Progressive Breakfast - 1/8/2009

Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.

Econ Plan May Get Bigger and Bolder

In CNBC interview by John Harwood, Obama indicates economic recovery could grow larger than $775B, in advance of major 11 AM address today:

Harwood: ... why stop at $775 billion? Why not go to the $1.2 trillion that some economists have recommended? Is that because you think that the political figure of a trillion dollars is too politically charged to get over? Is it because you think more spending would be pork rather than stimulus? Or do you think you've figured out exactly the right amount of stimulus that's needed?

Obama: Well, first of all I think it's important to note that every economist, conservative or liberal, at this point agrees that we have to have a substantial recovery plan that helps to jump-start the economy, that short-term it's going to be expensive, but it would be much more expensive to see the economy continue in the tailspin that it's been going in. We've seen ranges from $800 to $1.3 trillion and our attitude was that given the legislative process, if we start towards the low end of that, we'll see how it develops. We are concerned ...

Harwood: It's going to get bigger.

Obama: Well, we don't know yet. But what we are concerned about is making sure that the money is spent wisely, that there's oversight, that there's transparency.

Public Healthcare Plan Option In Spotlight as Daschle Nom Goes To Senate

NYT reports on today's Senate hearings for Tom Daschle's nomination to HHS:"Lawmakers will most likely question him sharply about one of the most contentious aspects of President-elect Barack Obama’s domestic agenda: his call for a new public health insurance plan to compete with private insurers."

NYT quotes policy architect of the public plan option Jacob Hacker: "“Public insurance has a better track record than private insurance when it comes to reining in costs while preserving access to care. The public plan would set a standard against which private plans must compete.”

Shorter insurance lobby reposnse: People might pay less for more care, noooooooooooo!

Politico reports Daschle wants fast timetable, starting in "spring," but House members Rangel and Waxman are skeptical.

CAF's Monica Sanchez warns that a public insurance backstop is needed to handle rising unemployment: "Making a public health insurance plan like Medicare available as a back-up would help ensure the health and financial security of all Americans. According to the Kaiser Family Foundation, a one percent rise in the nation's unemployment rate is projected to lead to 1.1 million more people without health insurance. And unemployment is certainly rising."

GoozNews on overpayments by private plans: "Why not use their discussion as an opening wedge into the elephant in the room of the medical home discussion: the best medical practices in the U.S. -- the Mayo Clinic, Kaiser Permanente, Group Health in Seattle -- utilize salaried physicians who don't get paid piecework-style and therefore do not have financial incentives that detract from care coordination or lead physicians to prescribe unnecessary or low-quality care."

Health Care Blog has more on private plan overpayment: "It was way easier to turn around and pass the increases from providers onto their clients--and kick a bigger percentage on top--than to do what some managed care plans tried to do in the 1990s, which was to reduce health care costs."

Biz Tax Cuts Continue To Get Pummeled

W. Post finds criticism of Obama's proposed business tax breaks may lead to changes in Congress:

[Senate Finance Chair Max' Baucus's preference is to invest a bigger share of the roughly $775 billion package in domestic energy programs. But, he added, Senate Democrats and the president-elect are "in general agreement" on what should be in the bill.

House Ways and Means Committee Chairman Charles B. Rangel (N.Y.) was less committal, describing the five tax proposals Obama outlined this week as guidelines aimed at reaching general goals, such as job creation and relief for middle-class workers. House tax writers "may have a little more experience technically" on what incentives might best achieve those objectives, Rangel cautioned. "Don't get tied up in how we do it."

Jonathan Tasini: President-Elect Obama, Tax The Rich To Keep Deficits Lower

Angry Bear likes the "use it or lose it" proposal for part of the transportation funds: "this looks good for projects that are in advanced stages of planning but not quite spade-ready — which may answer how to quickly obligate big bucks (by U.S. standards) for transit, passenger rail, and other projects more complicated than road repairs."

Worries of Delay as Economy Worsens

Baucus says Senate just wants "tweaks," per Bloomberg. But LA Times concludes "Political wrangling bogs down economic stimulus package."

Meanwhile, economy gets worse. Economy projected to shrink 2.2% | "Unemployment could get 'truly gruesome', analysts predict" | "The collapse of the stock market last year left corporate pension plans at the largest companies underfunded by $409 billion"

Conservative Attempt to Undermine Econ Recovery Undermined by Conservative

LA Times:

House Minority Leader John A. Boehner (R-Ohio) on Wednesday complained about Democrats' plans for "massive increases in government spending." His staff distributed six pages of quotes from economists criticizing a stimulus bill that includes a large boost in government spending.

But none carried the weight of Harvard economist Martin Feldstein, a former top advisor to President Reagan, who told House Democrats on Wednesday that this recession called for a mix of tax cuts and significant government spending.

"It pains me to say that, because I'm a fiscal conservative who dislikes budget deficits and dislikes increases in government spending," he said. "But it is important to have that fiscal stimulus at this time and to design the tax cuts and the spending changes in the most cost-effective way."

Yglesias sums up the conservative economic proposal: More Bushism

Blue Dogs Heel on Economic Recovery

The Hill reports that the right-leaning Blue Dogs Democrats will get nothing they wanted in the economic recovery package, but will still support it:

The so-called Blue Dogs are anxious that the enormous economic stimulus package will balloon the federal deficit, but they are likely to support it.

The costs of the stimulus will not abide by pay-as-you-go principle, one of the most important issues for Blue Dogs.

...

Last week a number of additional Blue Dogs and New Democrats began talking about possibly making a stand against the stimulus bill if long-term fiscal reform language was not included in the massive expenditure, according to aides.

On Wednesday, though, all hope for having a major entitlement or spending reform plan enacted through the stimulus essentially vanished.

WSJ has the Obama team's response to those worried about rising deficits:

...deficit hawks worry that economic recovery will present other investment opportunities and could lead to a rapid flight from U.S. government debt ... Senior Obama economic officials have been studying that scenario closely. For now, Democratic economists say even with a trillion-dollar deficit, there aren't enough Treasury bills to satisfy world demand for a savings safe harbor. The economic crisis has actually put much of the world at more risk than the U.S. And an aggressive response -- both through fiscal stimulus and the second $350 billion tranche of the Wall Street bailout fund -- will be more reassuring, not less.

But the Obama team recognizes that position won't last indefinitely. The ratio of debt to GDP has to stop growing and must stabilize at what they see as a reasonable rate. The problem is determining when to ratchet back the stimulus. Obama officials are determined not to pull back too fast for the sake of fiscal discipline and risk plunging the economy back into recession.

Social Security/Medicare Overhaul?

NYT headline sounds ominous: "Obama Promises Bid to Overhaul Retiree Spending." But W. Post notes: "So far, however, [Senate Budget Cmte Chair Kent] Conrad said Obama's team has been cool to requests to establish a bipartisan task force that would reexamine the entitlement programs..."

Dean Baker: Does Obama Want to Cut Social Security or Did the NYT Send Out a False Alarm?

Reid standing firm on EFCA

Newsweek's Howard Fineman: "I know some more conservative Democrats who are warning Sen. Harry Reid, their Senate leader, not to take up the one piece of legislation that labor unions really want, [the Employee Free Choice Act.] Reid has not relented, however, and privately is vowing to bring the matter to a vote in the Senate this spring."

AFL-CIO blog has C-Span video of Mary Beth Maxwell from American Rights at Work discussing the importance of EFCA

Midnight Rulemaking Rampage

Bloomberg reviews the latest on President Bush's final attempts to undermine government:

Bush is proposing changes to federal rules that critics say make it more difficult to protect U.S. workers from exposure to toxic chemicals, reduce the use of employee medical leave and open more land to oil and gas exploration. The effort is supported by the U.S. Chamber of Commerce and trade groups representing companies including Royal Dutch Shell Plc and Dow Chemical Co.

The Interior Department today is publishing a rule that would lift a 79-year-old executive order prohibiting oil shale development in Wyoming and Utah. Yesterday, the Bush administration postponed regulations requiring cars and light trucks to be more fuel efficient by 2011.

...

The [toxins] change is opposed by the United Mineworkers and other unions. They argue it would delay new health protections for workers by requiring a lengthy regulatory process before new standards could be issued.

...

Union leaders such as AFL-CIO President John Sweeney oppose a Labor Department rule, published in the Federal Register Nov. 17, that would amend the Family and Medical Leave Act. The changes would add limits on the use of accrued unpaid leave, and new requirements for requesting and medically certifying leave.

Sweeney called it a “slap in the face to working families.” The rule, pushed by the Chamber of Commerce and other business groups, would let employers speak directly with employees’ health-care providers to determine if workers have a legitimate reason to go on leave.

ProPublica: Dems Prepare Bills to Combat Midnight Regulations