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Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

MORNING MESSAGE: We've Foreclosed On Ourselves

OurFuture.org's Terrance Heath: "Since the housing bubble popped and sent the economy into free-fall, the government has been helping people don't deserve it. Of course, I mean the banks and financial institutions bailed out by the very taxpayers they are throwing out of the homes, without being able to prove they have the right to do so. Reading the stories of what has gone on, makes it hard to imagine how this has gone on without so much as a ripple of outrage ... If the economy, along with our communities are overwhelmed by the unimpeded waves of foreclosures, it will not be just because of a financial sector that sparked the tsunami or government officials who failed to stop it — but because we are apparently content to watch one another drown, effectively foreclosing on ourselves."

Dems Wait For Obama On Tax Cuts

President meets with Dem leaders today on tax cut strategy. Politico: "...congressional Democrats are likely to pose a simple question to President Barack Obama: What is your strategy?"

Robert Reich argues for Congress to help the unemployed, not the rich: "Republicans and many blue-dog Dems say we can’t afford another [unemployment insurance] extension. But these are many of the same people who say we should extend the Bush tax cuts for the wealthy for at least another two years ... The unemployed need the money. The rich don’t."

Income inequality is making America worse than a banana republic, argues NYT's Nick Kristof: "The truth is that Latin America has matured and become more equal in recent decades, even as the distribution in the United States has become steadily more unequal ... then I see members of Congress in my own country who argue that it would be financially reckless to extend unemployment benefits during a terrible recession, yet they insist on granting $370,000 tax breaks to the richest Americans. I don’t know if that makes us a banana republic or a hedge fund republic..."

Fixing the hedge fund income tax loophole is "probably dead" reports W. Post's David Ignatius: "The House passed a version of the reform on May 28 ... The action shifted to the Senate, and the special-interest fog began to roll in ... The Private Equity Growth Capital Council, the industry's lobbying group, managed to sound like the Salvation Army in warning with precise imprecision that 36,600 to 127,800 jobs could be lost by removing the carried-interest loophole ... Two White House economic officials told me this week that fixing the carried-interest loophole is probably dead, for this Congress and the next. It was hard enough to beat the big guys. But once they successfully hid under the cover of the little guys, it was impossible."

More Regressive Plans From Deficit Commission Members

Deficit commission members GOP Rep. Paul Ryan and Alice Rivlin propose complete gutting of Medicare and Medicaid. NYT: "[The two] proposed on Wednesday to turn Medicare into a voucher program in 2021, raise its retirement age and give states block grants to take over Medicaid ... The proposal is certain to be opposed by other Democrats, on the commission and off ... Advocates have long argued such action would lead states to so significantly cut benefits that Medicaid would no longer be ... available to whomever qualifies ..."

Deficit hawk Joe Klein turns on deficit commission co-chairs for ignoring jobs: "...I do wonder why these righteous burghers are leading the charge on this particular issue and are so obviously AWOL on a more pressing problem: finding a way to encourage productive investment that creates jobs while discouraging the financial speculation that creates bailouts."

Paul Krugman says the Simpson-Bowles tax plan is regressive: "... it redistributes income upward: the bottom 80 percent of families would pay higher taxes than they did in the Clinton years, while the top 20 percent — and especially the top 5 percent — would pay less; not what you’d call shared sacrifice."

Mark Thoma adds the Simpson-Bowles spending cuts hit the poor harder too: "One third of of the deficit reduction under Bowles-Simpson is from revenue increases, and two thirds is from spending cuts ... the spending cuts will, in the end, likely hit lower income households harder and end up being regressive as well."

Fed Pushes Back

Fed member estimates bond buy will help create 700,000 jobs, as Fed steps up pushback against American conservatives and foreign competitors. NYT: "The Fed chairman, Ben S. Bernanke, met with 11 members of the Senate banking committee to explain the decision ... Eric S. Rosengren, president of the Federal Reserve Bank of Boston and one of the biggest advocates of the Fed’s decision, said the plan could reduce the unemployment rate by a little less than half a percentage point by the end of 2012 ... On Friday in Frankfurt, Mr. Bernanke intends to respond to international criticism ... four Congressional Republican leaders [including Sen. McConnell and Rep. Boehner] expressed 'deep concerns' about the Fed’s plan..."

W. Post's George Will joins right-wing attack on Fed for trying to create jobs: "...how adroit can Fed management of the economy be? No complex economy can be both managed and efficient, meaning dynamic."

No Expectation For Quick Foreclosure Settlement

Prospects for quick foreclosure fraud settlement downplayed. NYT: "Changing the face of foreclosure in America will take some time, several state attorneys general said Wednesday, cautioning that an agreement with major lenders over revamped foreclosure practices was not imminent ... The banks hope to buy off the attorneys general with money, perhaps to establish a compensation fund for victims, [Georgetown law prof Adam] Levitin said. That, he said, would prevent attorneys general from 'digging deeper and uncovering more rot in the mortgage system. My fear is that the banks’ calculus is correct.'"

LAT's Doyle McManus hold more hope in attorneys general than Congress: "In the best of all possible worlds, Congress would ... change the bankruptcy law, which currently makes a first mortgage the only kind of loan that bankruptcy judges are barred from shrinking. (The House approved that change in 2009, but the Senate balked.) It could require banks to offer loan modifications before foreclosure, limit foreclosure fees and push states to expand mediation programs. These are all proposals made by Sen. Jack Reed (D-R.I.) in a bill he introduced in September. But in the current deadlocked Congress, even measures as voter-friendly as [these] appear beyond our legislators' ability. Instead, the best hope for better foreclosure practices may lie with the 50 state attorneys general..."

Feds launch investigation of controversial mortgage company MERS. WSJ: "The examination will asses MERS’ 'corporate governance, control systems, and accuracy and timeliness of information,' [Acting Comptroller of the Currency John] Walsh said in testimony prepared for delivery Thursday..."

New round of stress tests for big banks. W. Post: "The Federal Reserve said Wednesday that it will use a 'conservative' approach, applied equally across the 19 largest and most complex U.S. banks, to determine whether they should be allowed to pay their shareholders dividends, repurchase shares or take other actions that would reduce their buffers against future losses ... they are facing new challenges in court from owners of mortgage-backed securities, claiming that banks should be held responsible for loans that went bad..."

Financial crisis commission delays report to pursue leads on foreclosure scandal. GOPers object. HuffPost: "The move comes on the heels of revelations that the nation's biggest mortgage companies employed possibly-fraudulent tactics in trying to foreclose on distressed homeowners ... The crisis commission is also looking into the matter, said Phil Angelides, the panel's Democratic chairman. The Republicans on the panel are resisting further inquiries, according to people familiar with the matter. Angelides said in an interview that 'there are very powerful interests' seeking to undermine the panel's investigation."

Congrats OH, WI. You Gave Your Rail Jobs To NC

Midwest high-speed rail links in doubt after GOP gubernatorial wins. NYT: "Work on a pair of conventional rail lines in the Midwest is grinding to a stop now that Ohio and Wisconsin have elected Republican governors who are threatening to spurn $1.2 billion in federal rail money that their Democratic predecessors had sought and won..."

Transportation Sec. Ray LaHood indicates North Carolina will get what Ohio and Wisconsin throw away. Charlotte Observer: "...LaHood said the federal government could reallocate money planned for Ohio and Wisconsin because their governors-elect have indicated they don't want to use the high-speed funds
... LaHood then praised N.C. leaders for their work on high-speed rail [and] that because of those efforts 'you all are going to be in the high-speed rail business.'"

One More Try At Immigration Reform

Reid promises another vote on partial immigration reform. NYT: "... his office said he would try to do so in the current session as a stand-alone bill."

Incoming GOP congresspeople set their priorities -- end birthright citizenship. McClatchy: "GOP Rep. Steve King of Iowa, the incoming chairman of the subcommittee that oversees immigration, is expected to push a bill that would deny 'birthright citizenship' to such children. The measure, assailed by critics as unconstitutional, is an indication of how the new majority intends to flex its muscles on the volatile issue of illegal immigration."

AZ anti-immigrant law hurting local economy. NYT: "The state’s convention business as a whole is down $45 million this year, hurt by controversy over the state’s immigration crackdown that went into effect over the summer, according to a study to be released Thursday. Spinoff effects bring economic losses into the hundreds of millions of dollars..."

GM Speeds Up Taxpayer Payback

GM stock offering speeds up effort to repay taxpayers. NYT: "American taxpayers’ ownership of General Motors was halved on Wednesday, and billions of dollars in bailout money was returned to the federal government ... now that General Motors has shown that it can be profitable, a complete exit by the government could happen even within the next two years ... the nonprofit Center for Automotive Research released a study saying that government aid to G.M. and Chrysler saved more than 1.1 million jobs in 2009 and 314,000 jobs this year."

Paul Clemens reminds that some GM plants still closed in the restructuring, in NYT oped: "New G.M. will no doubt have a successful stock offering, for which we should all be grateful. But for many workers, in cities and towns across the country, that initial success — on computer screens, or stock exchanges, or wherever it is that I.P.O.’s exist — is going to be outweighed by the plant closing down the road."

Medicare Chief Defends Health Reform

Medicare chief defends health reform at Senate hearing. LAT: "Dr. Donald Berwick ... told lawmakers that repealing the law would be a major a mistake ... 'Would we tell them … that they will not be able to afford life-saving medicine? Would we tell them they would not be getting life-saving access to preventive services? ... That we won't work on safer care? That we're not going to be more transparent? That we're not going to work hard on fraud and abuse?' ... Republican lawmakers repeatedly returned to the circumstances of Berwick's appointment. Obama made the appointment during a congressional recess, allowing Berwick to avoid testifying before Congress."

Bipartisan duo proposes easing states' ability to get waivers from individual mandate to purchase health insurance. Politico: "The Affordable Care Act allows states to set up health care systems without a mandated purchase of health insurance, as long as they meet minimal requirements established by the Department of Health and Human Services. States can begin applying for mandate waivers in 2017 ... This new legislation [from Dem Sen. Ron Wyden and GOP Sen. Scott Brown] would roll the waiver date back to 2014 ... Wyden pressed CMS administrator Don Berwick ... on how much flexibility states will receive. He got a positive reaction."

Breakfast Sides

New GOP governors prepare to bring the pain. Bloomberg: "'Why do you exist?' Pennsylvania Governor-elect Tom Corbett said that he would ask every state agency when he spoke yesterday at the Republican Governors Association ... New Mexico Governor-elect Susana Martinez said she would reduce the public payroll by 5 percent through attrition ... 'We need to be honest and say, "This is going to hurt,"' said [SC Gov.-elect Nikki] Haley, when asked how she will explain cuts ..."

Nancy Pelosi wins race for Minority Leader as vote spotlights intra-party ideological division. NYT: "[Pelosi] defeated Representative Heath Shuler, a conservative from North Carolina, by a vote of 150 to 43 ... the votes for Mr. Shuler and, more tellingly, the substantial support for delaying the election were evidence that Ms. Pelosi is now the leader of a fractured caucus and could have difficulty retaining the tight control she has had on House Democrats in recent years."

President Obama can only win over independents by fighting for jobs, not by trying to improve the legislative process, argues TNR's John Judis: "If you want to see how much the white working class objects to earmarks, you can look at the failure of a Republican in Erie, Pennsylvania, to take the seat of the late Representative John Murtha, the king of earmarks ... Yes, Obama does have to pay attention to those white working-class voters who shift uneasily from one party to the other, but the way to win them over is to get them jobs—and if that fails because of Republican obstructionism, to make sure that these voters blame the Republicans not the Democrats..."

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