Progressive Breakfast - 10/7/2009

The jockeying continues among members of the Senate Finance Committee to get enough votes to pass a health care reform bill.

The Hill reports that committee chairman Sen. Max Baucus is optimistic that an assessment of the cost of the bill by the Congressional Budget Office will not force the committee to rework its provisions.

Meanwhile, The Wall Street Journal writes that the idea of a state-based public option plan, rather than a national federally based plan,  is being increasingly courted by some moderate Democrats:

 A new proposal by Sen. Tom Carper would spell out how to boost competition in the private market by enacting government-run plans at the state level. States could act alone or in concert with others to gain more leverage in the marketplace, and would be bound by the same rules established for private companies using the national insurance exchange envisioned by the Senate Finance bill. Another option would entail states opening their workers' employee-benefit plans to the general public.

But one key Republican in the debate, Maine Sen. Olympia Snowe, cast doubt on the Carper idea. She favors creating a federally run health plan as a fallback option that would come into force only if other changes to the system fail to expand coverage as expected. "A fallback can work and would work, in the event the private insurance industry failed to produce results," she said.

Time's Karen Tumulty says that it's still not clear how Senate Majority Leader Harry Reid will pilot the public option debate through the Senate floor deliberations.

 Will he include the plan, as the HELP Committee bill did, inviting a certain effort to strike it out of the bill by amendment on the floor? Or will he offer a bill similar to the Finance Committee's, which does not contain the public option, and see an effort to add it on the floor? "Reid's not tipping his hand," says one of his aides.

 A new Associated Press poll suggests that the tide of public opinion on health care reform is swinging away from Republican critics.

The public is split 40-40 on supporting or opposing the health care legislation, the poll found. An even split is welcome news for Democrats, a sharp improvement from September, when 49 percent of Americans said they opposed the congressional proposals and just 34 percent supported them.

TPM blogger tmccarthy0 asks: "What will we do about our current incarnation of Conservadems who are owned by the Insurance Industry?" She lists the Democrats who have gotten the biggest political contributions from the corporate players in the health care debate:

Max Baucus: Insurance Industry, $558,075; Pharmaceuticals, $507,313; Health Professionals, $504,641

Kent Conrad: Heath Professionals, $239,533; Insurance, $233,625

Ben Nelson: Insurance, $441,586; Health Professionals, $225,776

Blanche Lincoln: Health Professionals, $298,700; Pharmaceuticals, $153,304

Thomas R. Carper: Insurance: $238,680

I mean seriously, since at least two of these senators were instrumental in defeating health reform in the early 1990's, isn't it time they paid the price, shouldn't everyone know what they did, and what they are doing right now?

Afghan War opposition mobilizes, adjusts

As President Obama seeks a middle ground between the his military advisers and skeptics on Afghanistan, antiwar protesters today plan to make their voices heard. The Washington Post gets inside one group's plans:

With public opinion polls showing a majority of Americans opposing the war, organizers wanted at least 1,000 people to march through downtown, risk arrest by creating a ruckus at the White House and draw President Obama across the manicured North Lawn to meet with them.

… It would also set the stage for 42 rallies and protests scheduled to take place Wednesday around the country. After decades of decline in the antiwar movement -- from throngs of half a million to fringe rallies to almost nothing at all -- the job of organizers in Washington was to generate momentum for a historic week.

The Christian Science Monitor, meanwhile finds that another antiwar group, Code Pink, is refining its approach after talking to ordinary Afghanis.

Code Pink, founded in 2002 to oppose the US invasion of Iraq, is one of the more high-profile women's antiwar groups being forced to rethink its position as Afghan women explain theirs: Without international troops, they say, armed groups could return with a vengeance – and that would leave women most vulnerable.

Though Afghans have their grievances against the international troops' presence, chief among them civilian casualties, many fear an abrupt departure would create a dangerous security vacuum to be filled by predatory and rapacious militias. Many women, primary victims of such groups in the past, are adamant that international troops stay until a sufficient number of local forces are trained and the rule of law established.

The WSJ says that in The White House, the war debate "is becoming a battle of two books -- both suddenly popular among White House and Pentagon brain trusts."

The two draw decidedly different lessons from the Vietnam War. The first book describes a White House in 1965 being marched into an escalating war by a military viewing the conflict too narrowly to see the perils ahead. President Barack Obama recently finished the book, according to administration officials, and Vice President Joe Biden is reading it now.

The second describes a different administration, in 1972, when a U.S. military that has finally figured out how to counter the insurgency is rejected by political leaders who bow to popular opinion and end the fight.

The two books -- "Lessons in Disaster," on Mr. Obama's nightstand, and "A Better War" on the shelves of military gurus -- have become a framework for the debate over what will be one of the most important decisions of Mr. Obama's presidency.

On the war funding front, The Senate has voted by an overwhelming margin for a defense appropriations bill that would give another $128 billion to the Iraq and Afghanistan wars.

The $626 billion measure, passed 93-7, also would ban outright any transfer of accused enemy combatants from the Guantanamo Bay, Cuba, detention facility into the United States. Current law permits transfer of detainees to face trial or go to priso

The underlying bill combines $128 billion for overseas military operations in Iraq and Afghanistan with $498 billion for the rest of the Defense Department's budget. An analysis by congressional researchers puts the tally for Afghanistan at about $300 billion and for Iraq at more than $700 billion since Sept. 11, 2001 -- totaling more than $1 trillion.

The bill must now be reconciled with a measure that passed the House this summer and will then be presented to Obama for his signature.

From tax credits to political credit

None dare call it a second stimulus, but the NYT finds at least one element of what might be in a second stimulus is once again gaining steam on Capitol Hill: a proposal to give employers a tax credit for hiring new workers.

One version of the approach, to be unveiled next week by the Economic Policy Institute, a labor-oriented research organization, would give employers a two-year tax credit if they increased the size of their work force or added significant hours of work (for example, making a part-time worker full time). Employers would receive a credit worth twice the first-year payroll tax for each new hire, amounting to several thousand dollars, depending on the new worker’s salary.

Politico's Eamon Javers finds a lot of pessimism about the economy's prospects going into 2010

Some leading corporate executives worry there’s no economic engine available to drive growth in 2010: Technology, construction, finance — all sectors that have powered the U.S. economy out of the doldrums in the past — are flat this year.

And some boardroom denizens offer a bleak assessment: An economy that was driven by consumer overspending for years and by government overspending for the past year will have a tough time making any headway when the government support is withdrawn.

In Istanbul this week, billionaire investor George Soros said the American banking system is “basically bankrupt” and argued that the “United States has a long way to go.”

… New York University economics professor Nouriel Roubini — known as “Dr. Doom” for his grim but accurate forecasts in recent years — said this week that the best the U.S. economy can hope for is a “U”-shaped recovery, with a significant trough before the rebound.

A poll for a network of ethnic media organizations by New American Media on stimulus spending is mixed news for the Obama administration.

Ethnic Americans have a far better image of the $787 billion stimulus package than their white counterparts, with 84 percent of African Americans saying it was “a good thing” for the country, while only 45 percent of white adults agree with that statement,

… Nevertheless, most ethnic adults agreed with whites that, as of now, they are not aware of actual benefits from the legislation. These poll results strongly indicate the Obama administration has failed to inform the American public on ways that the stimulus spending may be having a positive impact on families and the national economy.

Moreover, the poll painted a picture of many ethnic Americans struggling to survive in the difficult economic times. More than 60 percent of Hispanics worry about their ability to pay housing expenses; 50 percent of Native Americans worry whether they can afford basic food, medicine and clothing for their families; and more than 30 percent of African Americans and Asian Americans worry about losing their current full-time job.

Side dishes:

Bloomberg News finds troubling signs for progressive advocates of financial reform in the assessments of the reform bill proposed by House Banking Committee chairman Barney Frank.

U.S. Representative Barney Frank’s proposed overhaul of derivatives regulation may leave gaps in oversight and weaken the Securities and Exchange Commission’s power to police fraud and manipulation, an SEC official said.

“Certain aspects of the discussion draft could unintentionally preserve existing regulatory gaps,” Henry T.C. Hu, director of the SEC’s new division of risk, strategy and financial innovation, said of legislation proposed Oct. 2 by House Financial Services Committee Chairman Frank. Hu made his comments in testimony prepared for a hearing before Frank’s committee today.

Business reaction to Frank’s proposal suggests it lacks restrictions sought by critics who blame derivatives for speeding the downfall of American International Group Inc. and for exacerbating the credit crisis over the last 18 months. “It is clearly the weakest of all the proposals I’ve seen to date,” said Christopher Whalen, managing director of Institutional Risk Analytics in Torrance, California. Whalen, who has testified before Congress on derivatives regulation, is an independent bank analyst. “Frank’s committee seems to be intent on gutting any meaningful reform.”

Industry executives are pushing for more changes to the bill, Hill said. The legislation would still subject transactions with end-users to burdensome margin requirements and would come at a high cost for some corporations even though they could post non-cash as collateral, he said. He said members of the securities industry association also oppose additional capital requirements for swaps transactions that are cleared and subject to separate margin requirements by clearinghouses.

Apple Computer has joined the split with the U.S. Chamber of Commerce over climate change legislation.

Apple Computer’s announcement Monday that it was quitting the US Chamber of Commerce was just the latest high profile defection from the country's most powerful business lobby—and one of the most prominent opponents of climate change legislation. In the preceding two weeks, three major electric utilities and Nike also said they'd be leaving the Chamber’s board of directors or dropping out altogether to protest its antiregulation stand. But yesterday Nike made it clear that its parting of ways with the Chamber went beyond a simple policy disagreement, describing a lack of transparency and accountability that conflicted with the organization's own supposedly democratic principles and suggested the outsized influence of a few Chamber members in setting its climate stance.

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Bill Scher will return Thursday.