Progressive Breakfast for October 8

Morning Message

The Ugly Charter School Scandal Arne Duncan Is Leaving Behind

Arne Duncan’s surprise announcement to leave his post as secretary of education ... but an important story lost in the media clutter happened three days before he gave notice ... Duncan rattled the education policy world with news of a controversial grant of $249 million ($157 million the first year) to the charter school industry. This announcement was controversial because, as The Washington Post reports, an audit by his department’s own inspector general found “that the agency has done a poor job of overseeing federal dollars sent to charter schools ... The agency’s inspector general issued a scathing report in 2012 that found deficiencies in how the department handled federal grants to charter schools between 2008 and 2011” – in other words, during Duncan’s watch.

Hillary Turns Against TPP…

Clinton says TPP falls short, in PBS interview: “I’m worried about currency manipulation not being part of the agreement … I’m worried that the pharmaceutical companies may have gotten more benefits and patients and consumers — fewer … What I know about it, as of today, I am not in favor of what I have learned about it.”

Complicates congressional approval. Politico: “Clinton’s defection means the White House will have to work even harder to keep a handful of Democrats on board for the pact and could give Republicans more leverage to press concerns about details of the agreement that they oppose.”

Martin O’Malley knocks. W. Post quotes: ““Wow, that’s a reversal. I was against the Trans-Pacific Partnership months and months ago.”

…And High-Speed Trading

Hillary Clinton rolls out Wall Street reforms. Bloomberg: “Hillary Clinton will propose a tax aimed at penalizing ‘harmful’ high-frequency trading strategies and offer ways to strengthen the Volcker Rule … Clinton’s proposals amount to a doubling down on her bet that appeasing her party’s populist base is worth more than the possibility of alienating wealthy donors.”

Dodd-Frank making to harder for governors to get Wall Street donations. The New Yorker: “If the donation is to a candidate who has the right to appoint a pension-fund trustee, the compliance department will call the investor-relations department in charge of gathering capital. Someone from the investor-relations department will then call the potential donor and remind him that he would be putting a pension fund on the firm’s ‘do not call’ list. Even worse, if the firm already works with a particular pension fund, the donation could force the firm to work for no compensation. And the compliance department may remind the donor that, post-Dodd-Frank, the S.E.C. will look into political donations when it conducts surprise inspections.”

House GOP Caucus Nominates Speaker Today

Right-wing House Freedom Caucus endorses Rep. Daniel Webster for Speaker. The Hill: “… a bold move that raises serious doubts about whether Majority Leader Kevin McCarthy can cobble together the 218 votes on the House floor he needs to be promoted.”

“What If the House Can’t Elect a New Speaker?” asks The Atlantic’s Russell Berman: “The last time it took multiple ballots to elect a speaker was 1923, when it took nine, and in the 19th century it took as long as two months for the House to agree on a leader. This year, the House just doesn’t have that kind of time. Congress must lift the debt limit to avoid a first-ever default within a week of the scheduled election for speaker, according to the Treasury Department, and it must pass another spending bill by December 11 to prevent a government shutdown.”

GOP Sweats Debt Limit

Republicans divided on debt limit. The Hill: “GOP lawmakers can’t even agree on who should take the lead on the issue, with many questioning whether outgoing Speaker John Boehner should be involved ahead of his resignation from Congress at the end of October.”

GOPers accuse Treasury of manipulating debt limit deadline. Politico: “Many Republicans believe the White House stands to gain by forcing Republicans to first increase the debt ceiling – which the administration insists must have no strings attached — and then dive into budget talks to keep the government open past Dec. 11.”

Breakfast Sides

Repatriation advocates insist tax deal only way to pass highway bill. The Hill: “‘Our bipartisan bill, the Infrastructure 2.0 Act would use international tax reform to add $120 billion to the Highway Trust Fund and establish a new $50 billion infrastructure finance vehicle for use by states and local municipalities,’ Reps. Richard Hanna (R-N.Y.) and John Delaney (D-Md.) said in a letter to House Majority Kevin McCarthy (R-Calif) … but Republican leaders in the Senate have expressed skepticism about the proposal.”

Larry Summers sounds alarm over global economy in W. Post oped: “Today’s challenges call for a clear global commitment to the acceleration of growth as the main goal of macroeconomic policy. Action cannot be confined to monetary policy … If a debt-to-GDP ratio of 60 percent was appropriate when governments faced real borrowing costs of 5 percent, then a far higher figure is surely appropriate today when real borrowing costs are negative.”