AOL lays off 10% of workforce in cost-cutting move

ime Warner Inc.'s Internet division AOL LLC is cutting 700 jobs, or about 10% of its workforce as it seeks to narrow its focus on a few core areas while grappling with the down economy.

New Zealand slashes key rate by 11/2 points

New Zealand's central bank cut its main interest rate by a larger-than-expected 1.5 percentage points Thursday, saying the global recession's fallout on the domestic economy will be harsher than its earlier assessment.

The move sent the official cash rate -- once among the highest in the industrialized world -- to 3.5%.

Starbucks to close more stores as profit drops

Starbucks, jolted by the weak economy, said Wednesday it plans to close 300 more coffee shops, further slow expansion, and cut more jobs. Its profit dropped 69% in the latest quarter, missing analysts' expectations.

Starbucks now plans to close a total of 977 stores, including previously announced sites in Australia. The next round of closures will consist of 200 U.S. stores and another 100 overseas. It will result in as many as 6,000 jobs lost at the store level and 700 at the office level, including half at the company's Seattle support center.

Major provisions of stimulus package

The U.S. House of Representatives Wednesday approved an $819 billion economic stimulus package. The bill includes $275 billion in tax cuts, $523 billion in direct spending, and other provisions.

The bill, passed 244-188 on a straight party-line vote, would cut taxes for individuals and businesses, provide billions of dollars for infrastructure projects, help states balance their budgets, and provide relief to millions of people who've lost their jobs or homes

Here are the chief provisions of the bill:

Tax cuts

• Payroll-tax holiday: $99 billion
• Expanded earned-income tax credit: $25 billion
• Tuition tax credit: $10 billion
• Business expensing tax breaks: $90 billion
• Renewable-energy tax credit: $20 billion

Relief

• Expanded unemployment insurance: $42 billion
• Health insurance for unemployed: $40 billion
• Expanded food stamps: $20 billion
• Housing assistance: $11 billion
• Supplemental Security Income payments: $4 billion
• Welfare: $3 billion

Infrastructure

• Highways: $30 billion
• School renovation: $20 billion
• Health information technology: $17 billion
• Transportation projects: $16 billion
• Water projects: $8.4 billion
• Military and V.A. construction: $7 billion
• Accelerated deployment of broadband: $5.6 billion

Help for state and local governments

• Medicaid cost sharing: $87 billion
• State grants: $79 billion
• State and local bond tax credit: $42 billion
• Community development: $5 billion
• Rural development: $4 billion

Energy efficiency

• Federal energy-efficiency projects: $22 billion
• Energy-efficiency grants: $18.5 billion
• Smart electric grid: $11 billion
• Renewable-energy loan guarantees: $8 billion

Human capital

• Education programs: $29 billion
• Pell grants: $18 billion
• Job training: $4.6 billion
• Scientific research: $3 billion

$819B rescue plan approved by SENATE

The bill would cut taxes for individuals and businesses, provide billions of dollars for infrastructure projects, help states balance their budgets, and provide relief to millions of people who've lost their jobs or homes.

Democrats said the rapidly failing economy needs immediate attention.

"Every week we delay is another 100,000 people unemployed," said House Democratic leader Steny Hoyer of Maryland.

Earlier, the House rejected a Republican substitute that would have emphasized tax cuts. Republicans said their version would have created twice as many jobs as the Democrats' bill.

"The American people need a plan that works," said House Republican Leader John Boehner of Ohio.

The bill now heads to the Senate, with a goal of putting the legislation on President Barack Obama's desk by mid-February. Democrats hold a 255-178 majority in the House, and an effective 58-41 majority in the Senate.

Despite Obama's personal efforts to woo Republicans on Tuesday, not one Republican voted in favor of the bill on final passage. Twelve Democrats voted against it along with 176 Republicans.

The Senate isn't waiting for the House to act. Senate committees have been at work, with the tax portions of the bill getting the stamp of approval from the Senate Finance Committee late Tuesday. Senators boosted the cost of the tax cuts in the bill to $342 billion by agreeing to exempt millions of middle-class families from paying the alternative minimum income tax for one year.

Businesses and workers "are looking to Washington for action -- bold and swift," Obama said Wednesday after meeting with corporate chief executives. He said he expected to have a bill to sign within a few weeks.

"When it comes to rebuilding our economy, we don't have a moment to spare," he said. "All we can do, those of us in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow."

The House bill includes $275 billion in tax cuts to go with $523 billion in direct spending and other provisions, all intended to boost U.S. economic growth this year and next.

Obama has said his goal is to create or save 3 million to 4 million jobs. The economy lost nearly 2.6 million jobs in 2008.