MORNING MESSAGE: Questions For Lew
OurFuture.org's Richard Eskow: "The International Monetary Fund just acknowledged that it underestimated the negative impact of government spending cuts. What will you do to prevent our own austerity measures from further harming the US economy? ... Most of the leading economic figures of the Clinton era and first Obama term were wrong about key economic issues, especially the housing bubble and the harmful effects of Wall Street deregulation. Meanwhile the people who were right seem to have been shut out of the process. What will you do to ensure that these people are given access to both you and the President when important decisions are being made?"
Lew In. Solis Out.
The Hill speculates on what Lew at Treasury means for Social Security and Medicare: "Liberal Democrats were none too pleased to learn that cost-of-living cuts to Social Security known as 'chained CPI' had been put on the table by the White House during fiscal cliff talks. The provision did not make it into the final compromise, and having a Treasury secretary that has left Republicans grumbling may calm Democrats' concerns that major changes to entitlement programs are on the way. [Concord Coalition's Robert] Bixby said his view is that Lew still wants a deficit bargain and is willing to reform entitlements to get there, though he’ll oppose any plan that would resemble giving recipients vouchers for care. The financial world will also read signals into the announcement. Lew is no stranger to Wall Street; he worked at Citigroup between jobs in the Clinton and Obama administrations. But Geithner, though he never worked for a major Wall Street bank, is much more widely thought to feel the pulse of Wall Street, because he has spent much of his career keeping an eye on it."
Labor Sec. Solis stepping down. NYT: "Ms. Solis was praised by labor unions for working to enforce workplace regulations and occasionally criticized for not being responsive to business interests. Among her biggest campaigns was cracking down on farmers who employ children or underpaid workers."
WH Keeps Option To Mint The Coin
WH ambiguous on whether it would mint a $1T coin. WSJ: "Facing repeated questions, White House spokesman Jay Carney declined to rule it out Wednesday, though he didn’t exactly encourage the idea either ... Philip N. Diehl, a former director of the U.S. Mint, says the plan is legal. 'It does not represent a circumvention of Congress’s power of the purse,' he said. 'Rather, it simply allows the government to pay the bills for what Congress has already appropriated.'"
NY Mag's Dan Amira on why Obama won't rule the coin out: "The White House can't admit that it might be willing to #MintTheCoin, because then the GOP would have no incentive to raise the debt ceiling itself. The Republicans would love for Obama to go the coin route. It would absolve them of responsibility for raising the debt ceiling while also allowing them to portray Obama as a power-mad dictator, two of their favorite things in the world. At the same time, if the GOP can't be convinced to raise the debt ceiling — we don't think it will come to this, but with these guys, you never know — minting the coin, as unseemly as the White House may find it, could be the only way to stave off economic calamity. So the White House can't exactly take it 100 percent off the table."
The coin is no stupider than having a debt ceiling. NYT quotes Business Insider's Joe Weisenthal: "If you think the trillion-dollar coin is silly, you should think the debate over whether a rich country would fail to pay its bills is silly."
House GOP splits on sequester. The Hill: "House Republican defense hawks are pushing back strongly against Speaker John Boehner’s claim that he has GOP support to allow steep automatic budget cuts to take effect if President Obama does not agree to replace them with other reductions ... One defense-minded Republican lawmaker said Boehner’s position would amount to a broken promise to his conference."
Breakfast Sides
The Obama coalition threatens corporate power, argues NYT's Tom Edsall: "The potential institutionalization of a majority Democratic coalition of the downscale [is] ominous for members of the top 0.1 percent and for the corporations that have profited over the past 40 years ... [The pro-business Democratic] faction is in danger of being submerged by a surge of redistributional demands coming from voters in the bottom half, income-wise ... The more workers recognize that their wages are not keeping up with their productivity gains, the more they are likely to press for redistributive government action through tax policy or by other means ... Although the stars are lined up in favor of the anti-corporate left, American business, when its back is to the wall, has historically proved to be extraordinarily resourceful."
New mortgage rules from CFPB. US News: "The new Ability-to-Pay rules require lenders to ensure that would-be borrowers can afford the mortgage debt they take on by verifying important financial information such as employment and debt obligations, and the rules bar lenders from basing ability to repay on low teaser rates."
FL Gov. Scott accused of inflating cost of Medicaid expansion to justify rejecting it. TPM: "The website Health News Florida reported Tuesday that Scott was warned in letters by the state legislature’s top economist and budget analyst that his administration’s figure — that the expansion would cost the state $26 billion over 10 years — was false. Scott’s aide reportedly said, in emails obtained by HNF, that the figure was based on the assumption that the federal government ... would not fulfill its promise. But after the report was published and caused a stir ... Scott said through a spokeswoman that his Agency for Health Care Administration would consider alternate cost estimates."
