U.S. business groups urge Obama to end Cuba embargo.

A dozen of the country's leading business organizations, including the U.S. Chamber of Commerce, said Thursday that President-elect Barack Obama should at least initiate the process of scrapping Washington's 46-year-old economic embargo against Cuba.

"We support the complete removal of all trade and travel restrictions on Cuba," the groups said in an open letter to Obama. "We recognize that change may not come all at once, but it must start somewhere, and it must begin soon."

Complaining about draconian restrictions on journeys to the communist-ruled island, the organizations said it was "simply wrong" that U.S. citizens were free to travel to North Korea or Iran but not to Havana.

They also urged the future president to make it easier for U.S. firms to take advantage of limited exceptions to the embargo that permit Cuba to purchase food and other necessities from the United States.

Havana has repeatedly made the same request in recent months as Cuba struggles to recover from the effects of three hurricanes.

Obama promised during the campaign that he would scrap Bush administration regulations sharply limiting the ability of Cuban Americans to visit their homeland or send money and goods to family members on the island.

While the Democrat said on the stump that he would not end the embargo, his victory in last month's election has fueled calls to normalize ties between Washington and Havana.

The author of the text sent to Obama, National Foreign Trade Council Vice President Jake Colvin, said Thursday that he had circulated a similar letter a year ago but found few organizations willing to sign.

This time around, the missive was signed by the Chamber of Commerce, American Farm Bureau Federation, Business Roundtable, National Retail Federation and Grocery Manufacturers Association, among others.

The document cites a 2001 government report that estimated the Cuba embargo was costing U.S. exporters up to $1.2 billion annually in lost sales.

In a separate report, Colvin points out that the U.S. Treasury Department devotes far more resources to enforcing the Cuba embargo than to tracking the finances of Al Qaeda.

While a reporter present at Thursday's presentation of the letter to Obama noted that just last month, Treasury imposed a fine of more than $12,000 on Internet travel agency Priceline.com for offering its services to Cuban citizens.

Obama would need congressional approval to completely dismantle the embargo, though he could use executive orders to ease the restrictions.

A poll released this week shows that 55 percent of Miami's Cuban Americans say the United States should end the economic embargo, while 65 percent say Washington should re-establish diplomatic ties with the island.

The strong support for lifting the embargo reflects a change in South Florida's Cuban-exile community, which has traditionally backed keeping the sanctions in place until the communist government in Havana frees political prisoners and embraces democracy.

Florida International University's Institute for Public Opinion Research interviewed 800 Cuban-American adults for the survey.

The poll showed a sharp division by age group, with 65 percent of respondents between 18 and 44 saying they opposed the embargo, while 68 percent of those 65 and over expressed support for keeping it in place.

In response to a question about whether there would be "great political change" in Cuba, some 29 percent of respondents said it would likely occur in the next two to five years, while 25 percent ruled out any change as long as the Castro brothers held on to power.

Fidel Castro, who is 82 and still convalescing from a serious illness that struck him in July 2006, formally resigned the Cuban presidency early this year in favor of his younger brother, Gen. Raul Castro.

Though anxious to revitalize Cuba's economy and raise living standards, Raul has given no indication he plans to loosen the Communist Party's grip on power.

COPYRIGHT 2008 News provided by Comtex.

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Wall Street's crisis hitting small business.

The ripple effect of the financial turmoil on Wall Street is spreading more deeply into the American economy.

The local hardware store is finding it more difficult to get the loan it needs to buy its summer gardening merchandise. Ivy-covered colleges and universities are finding that donors have second thoughts about contributions until the stock market quiets down. Some small businesses that count on using credit cards to finance their business are getting letters informing them of reductions in their credit lines or increases in their rates.

"Wall Street's woes are increasingly giving Main Street the blues," says Mark Zandi, chief economist at Moody's Economy.com.

One sign of the blues on Main Street: consumer-confidence surveys. On Tuesday, the Conference Board said that consumer confidence had dropped to a level not seen since the recessions of 1980 and 1973.

"The plunge is directly related to the turmoil in the financial system," says Mr. Zandi.

Economists are particularly concerned about one development: CIT Group, a commercial finance company that lends to small business, used a $7.3 billion line of credit from banks because it was having trouble selling its debt.

"CIT does lending to Main Street business," says Fred Dickson, market strategist at D.A. Davidson & Co. in Lake Oswego, Ore.

CIT, for its part, says it is looking to sell some nonstrategic assets or business lines and is looking for additional capital. "We recognize that given the current market environment, we need to operate a smaller, more focused company," writes Mary Flynn, a spokeswoman, in an e-mail.

Limited credit availability

Strains on CIT could pose just one more challenge for small to medium-size businesses, which are finding it increasingly tough to get loans. "Bank lending to small business is freezing in place," says George Cloutier, a small-business expert and chairman of American Management Services, a consulting group. "Availability of credit to small and mid-sized companies has almost dried up."

The decline in housing prices isn't helping either, in that many small-business people use their homes as collateral for loans, says Michael Leonard, executive director of the greater Richmond Small Business Development Center in Virginia. "What we're finding is that clients already somewhat highly leveraged are finding it difficult to get new money."

Small-business owners are also increasingly running into late-paying clients, he says. "They need to borrow money to bridge that gap as well," he says.

Business surveys seem to be mixed on the issue of the availability of credit. Last month, a survey conducted for the National Federation of Independent Business found no problem getting credit, says Bill Dunkelberg, chief economist for the organization. "We've been doing the surveys for 35 years, and when things get tough, our members let us know," he says.

But a survey done in 2007 for the National Small Business Association (NSBA) found that just 67 percent of respondents said they could obtain adequate financing, compared with 76 percent in 2000. The largest source of financing for the small-business members: their credit cards.

That's the case for Marilyn Landis, chairman of NSBA and owner of Basic Business Concepts Inc. in Pittsburgh. Ms. Landis is expanding her business, which provides temporary chief financial officers for companies not large enough for a full-time CFO. She applied twice for a line of credit and instead was sent a credit card.

Recently, Landis has been traveling weekly to New England as part of the expansion of her business, so she has run up her credit-card balances. "Much larger monthly balances - even though I pay off the card every month - triggered a change in my credit score," says Landis, a former banker. "One card company cut my credit line in half. Another card company raised my finance charge from 3.99 percent to 23.99 percent."

Impact on universities

Educational institutions have also been encountering challenges. Last week at a dinner in New York, many of the presidents or chancellors of eight universities said that the turmoil in the credit markets was affecting their institutions. G.P. "Bud" Peterson, chancellor of the University of Colorado, Boulder, said he was expecting a significant contribution from an alumnus. But out of the blue, his potential donor said he wanted to wait until the financial markets settled down.

Rebecca Chopp, president of Colgate University in Hamilton, N.Y., said her graduates sometimes have landed jobs at Bear Stearns, an investment bank that will disappear after an emergency merger with JPMorgan Chase.

Lois DeFleur, president of the State University of New York at Binghamton, recounted how more students are coming in for financial aid because their parents' financial situations have changed.

The credit-market turmoil also means some states and other municipal borrowers are paying more interest on some debt. For example, the state of Wisconsin is in the process of restructuring $945 million in short-term borrowings. In the past, the debt carried interest rates in the 5 to 6 percent range. But last month, it spiked up to 10 to 11 percent. To remedy that, on April 1, the state will issue longer-term debt for most of the prior short-term borrowings.

It's still too early to know if it will cost the taxpayers of Wisconsin more money to borrow. But in any event, other costs exist. "At the moment, there are some additional transaction costs and enhancement costs we had not planned on doing," says Frank Hoadley, state director of finance.

COPYRIGHT 2008 The Christian Science Publishing Society