House Vote Today
AP: President Barack Obama's expansive and expensive plan to jump-start the economy is all but certain to clear its first hurdle when the Democratic-controlled House votes on a $825 billion version that melds new spending and tax cuts. Republican support, however, is in doubt when voting takes place Wednesday."
House bill moves after Obama administration agrees to PAYGO rules following passage. The Hill reports: "House Democrats won a key procedural vote Tuesday on the stimulus after a last-minute promise from the Obama administration to return to 'pay-as-you-go' budget rules after the stimulus is approved. In a 224-199 vote, the House approved a resolution allowing the stimulus bill to come to the floor for debate. Twenty-seven Democrats -- 24 of them members of the conservative Blue Dog Coalition -- bucked their leadership and voted against the measure. But according to Democratic leadership sources, the number was almost much higher -- and could have been high enough to hand the Republicans a monumental victory -- had it not been for a letter from President Obama’s budget director Peter Orszag ... 'Moving forward, we need to return to the fiscal responsibility and pay-as-you-go budgeting that we had in the 1990’s for all non-emergency measures,' Orszag continued."
PAYGO rules would restrict additional deficit spending which by definition is stimulative, but could also produce pressure to quickly repeal Bush tax cuts for the wealthy and close corporate tax loopholes. Question: will anything else be deemed an "emergency"?
Obama holds firm on tax credits for the poor. W. Post: " He staunchly defended one of [the Republicans'] least favorite provisions, a $500-per-individual tax credit that can be claimed by people who make too little to pay income taxes but currently pay payroll taxes. Republicans oppose the so-called refundable credits, arguing that they are a form of welfare. 'Feel free to whack me over the head, because I probably will not compromise on that part,' Obama said of the refundability portion, according to a GOP participant who took notes during the House meeting. 'I will watch you on Fox News and feel bad about myself.'"
Senate version totals $888B after $70B provision protecting upper-middle class from Alternative Minimum Tax: "The addition of the AMT provision may increase Republican support in the Senate ... but may deepen resistance among more fiscally conservative House Republicans."
Most Economists, Most Voters Back Economic Recovery
Center for American Progress Action Fund publishes letter in support of economic recovery bill signed by prominent economists from "across the spectrum," while libertarian CATO publishes NYT ad opposing the plan featuring right-wing economists.
McClatchy settles the score: "...most leading economists who are experienced in public policy generally favor the stimulus plan that the House is considering because through it the government will step up spending at a time when private-sector spending has fallen off sharply. Some economists are ideologically opposed to any such massive government plan. The Cato Institute, a libertarian research center, has organized a list of dozens of academic economists who oppose the plan, urging instead tax cuts and smaller government, in favor of free markets and lower taxes over big government activities ... However, that isn't where the balance of expert opinion comes down today."
NYT's David Leonhardt mostly praises: "...for all the criticism the stimulus package has been getting, it does pretty well by several important yardsticks. First of all, the package really is stimulus. It will quickly give money to the people who have been hardest hit by the recession and who, not coincidentally, will be most likely to spend that money soon. The spending also has a chance to do some long-term good, by paying for the computerization of medical records, the weatherization of homes and other such investments ... it still is a missed opportunity in a few instances. The biggest is infrastructure ... This bill should help the economy in both the near term and the long term. But the government doesn’t go out and spend about $800 billion every day. The details matter."
Also from NYT: "...House Democrats would create a temporary new entitlement allowing workers getting unemployment checks to qualify for Medicaid, the health program for low-income people [and give] a hefty subsidy to help laid-off workers retain the same health plans they had from their former employers ... Democrats said the changes took a major step toward their goal of coverage for all Americans."
Media Matters: "CNN's Brown, Velshi falsely claimed increased food stamps and unemployment payments are 'not stimulus'"
Pollster's Mark Blumenthal review the polling: "When asked whether they favor or oppose an 'economic stimulus' plan that would cost $800 billion or so (give or take a hundred million), Americans generally express support in the mid-50-percent range ... When the questions provide more information on how the $800 billion (or so) will be spent, usually specifying a combination of tax cuts and transportation, education and energy projects, support grows to mid-60 low-70 percent range."
TPM: Support for Obama's Stimulus Plan, very high. Support for Boehner and McConnell, very low.
W. Post covers concern among some progressive congresspeople that the bill is not big enough: "Administration officials have said they did not push for more infrastructure spending because of concerns about how many projects are 'shovel ready' -- a view that House members say is held most strongly by Lawrence H. Summers, Obama's chief economic adviser. Even though most House Democrats say they will back the plan, many reject the administration's argument, saying that infrastructure projects could easily be expedited, that the economy will need additional infusions for years to come and that the real reason for shunning infrastructure was to make room for tax cuts. Obama, with a public mandate to do something big, is missing a rare opportunity to rebuild the country, they say."
Bipartisan Kabuki
Digby exposes the "bipartisanship" tactic: "The GOP hissy fit has worked like a charm. The villagers are all on the same page: the 'problem,' as always, is that Democrats are not doing everything they are precisely told to do by the Republicans. They are being partisan. The Republicans weeping and wailing like Victorian spinsters works every time."
Speaker Pelosi explains bipartisanship to the media: "Bipartisanship means giving an opportunity to make their voices heard and maybe to persuade in the marketplace of ideas. It does not mean we will have a continuation of the last eight years of failed economic policies that have taken us where we are today."
Obama Tries to Extinguish Conservative-Lit Brush Fires
Politico: "Obama and his often stormy Chief of Staff Rahm Emanuel interceded in the House to strike a provision related to the purchase of contraceptives with Medicaid funds. A $200 million appropriation in the House bill to improve the National Mall in Washington was dropped after pressure from Blue Dog fiscal conservatives."
Time on the GOP strategy: "Sowing the seeds of discontent between Obama and Pelosi is a no-lose proposition for the GOP: If Obama wins they get a bigger seat at the table, and if Pelosi gets her way, it's a blow to Obama's promises of inclusiveness and bipartisanship. 'If he's willing to kick [the Democratic leaders], we're willing to applaud, we'll take it,' another GOP leadership aide said. 'Am I trying to stir up trouble between him and his party? Of course I am.'"
Kos slaps Dems: "They never learn"
How Much Biz Tax Cuts?
Politico reports that the Senate Finance Committee added "more tax relief" to its version, but OurFuture.org's Bernie Horn observes, "if the Senate version is adopted, only 3 percent of the spending is for business tax breaks. If the House version is adopted, it’s only 1½ percent. Either way, this is a bill that is between 97 and 98.5 percent targeted toward good causes."
Business Lobby Won't Buy American
W. Post's Harold Meyerson rips the business lobby for opposing "Buy American" provision: "The debate about the stimulus package before Congress has helped expose the huge rift between our national interest and that of our globalized business sector. Last week, the House Appropriations Committee voted almost unanimously to require the use of U.S.-made steel in the infrastructure projects included in the stimulus, unless the U.S. industry -- which is running at 43 percent of capacity -- was unable to supply it. You might think that American business, beyond the steel industry, would welcome such language, but, in fact, using Americans' tax dollars to stimulate American production looks like the last thing globalized American business wants. A letter opposing "Buy American" provisions in the stimulus has been signed by the U.S. Chamber of Commerce, the Business Roundtable and several other such groups ... The only mystery here is why the Chamber and the Roundtable aren't compelled to register as foreign lobbyists."
Transit Watch
Politico reports high-speed rail added in the Senate, but at a cost: "the Senate Appropriations Committee leadership stepped in to dramatically scale back an Obama-backed proposal to devote as much as $2.6 billion for the purchase of new energy-efficient vehicles for the government’s fleet ... the vehicle purchases had been cut back to $600 million, with $2 billion instead devoted to high-speed rail corridors. 'We would have been killed,' Senate Appropriations Committee Chairman Daniel Inouye (D-Hawaii) told Politico. 'Someone didn’t think that out very well.'"
Streetsblog: "A spokesman for Jerrold Nadler confirms that the amendment to boost transit funding in the stimulus package has cleared the House Rules Committee. That means the full House will decide whether to add $3 billion in transit investment to the economic recovery bill -- a vote that could take place as soon as noon [today]. The most important House member to call now is the one who represents you."
Transportation for America posts a map, The United States of Transit Cutbacks, showing where 51 transit systems are facing cuts and need federal help.
Civil Engineers Say Infrastructure Needs $2.2T, Five-Year Investment. NYT: "More than a quarter of the nation’s bridges are structurally deficient or functionally obsolete. Leaky pipes lose an estimated seven billion gallons of clean drinking water every day. And aging sewage systems send billions of gallons of untreated wastewater cascading into the nation’s waterways each year. These are among the findings of a report to be released Wednesday by the American Society of Civil Engineers, which assigned an overall D grade to the nation’s infrastructure and estimated that it would take a $2.2 trillion investment from all levels of government over the next five years to bring it into a state of good repair."
Teach Our Children Well, By Funding It
NYT looks at the very large education piece of the package: "The proposed emergency expenditures on nearly every realm of education, including school renovation, special education, Head Start and grants to needy college students, would amount to the largest increase in federal aid since Washington began to spend significantly on education after World War II."
NYT catches one troubling provision: "One provision, which was sought by the student lending industry and went unmentioned in early Congressional summaries of the stimulus package, would temporarily increase subsidies to banks in the guaranteed student loan program by tying them to a new index, partly because recent federal intervention in the credit markets has invalidated the previous index. A spokesman for Sallie Mae, one of the largest student lenders, said the change was needed to keep student loan markets fluid. Critics said it represented a potential new windfall for lenders. 'This just continues the well-established tradition of welfare for the student loan industry,' said Barmak Nassirian, an expert in student lending."
OurFuture.org's Bill Scher on how while there is less for infrastructure than what Institute for America's Future proposed, there is much more for education and the unemployed: "Congress is more heavily tilted to addressing the immediate crisis, though that doesn't mean they are being outright myopic about long-term needs."
Bailout Recipients Plot Against EFCA
HuffPost scoop with damning audio of takers of government funds seeking to deny bargaining power to workers: Three days after receiving $25 billion in federal bailout funds, Bank of America Corp. hosted a conference call with conservative activists and business officials to organize opposition to the U.S. labor community's top legislative priority. Participants ... including at least one representative from another bailout recipient, AIG -- were urged to persuade their clients to send 'large contributions' to groups working against the Employee Free Choice Act..."
ITT List's Art Levine: "While President Obama is said to be looking to put some strings on the second half of the bailout to the banks, his economic team ought to look into limiting their ability to spend taxpayers’ money to lobby for selfish political goals that hurt the American economy."
AFL-CIO blog flags new Human Rights Watch report on EFCA: "The message of HRW’s report is clear: under existing U.S. law, the freedom to form unions and bargain is a hope, not a reality, for millions of workers. Passing the Employee Free Choice Act will go a long way toward making sure the United States lives up to its obligations to protect workers’ fundamental and internationally recognized right to form a union and bargain for a better life."
Military Spending Cuts Coming?
WSJ reports: "The biggest U.S. defense companies drastically increased their spending on lobbying last year, in the face of stiffer competition for fewer major Pentagon contracts and ahead of a change in the White House ... 'We must have the courage to make hard choices,' Mr. Gates told members of the Senate Armed Services Committee ... Mr. Gates said many key defense-industry contracts have had big cost and performance problems. As the economy worsens and the president breaks with the previous administration's national-security policies, the Pentagon's top civilian will have to make many tough calls this year. 'One thing we have known for many months is that the spigot of defense spending that opened on 9/11 is closing,' Mr. Gates said."
Climate Crisis, Delays, Dodges and Poison Pills
TNR's Brad Plumer on the NOAA climate study: "Even if we pare emissions back to pre-industrial levels, which would mean phasing out all fossil-fuel emissions and taking carbon out of the air, then some negative effects—rising sea levels, drought—will still occur, with effects lingering for a thousand years. But, as the study notes, pushing atmospheric carbon concentrations up even further, from their current level of 385 parts per million (ppm) to something like 450 to 600 ppm, will exacerbate the situation considerably—further altering rainfall patterns and boosting the likelihood of large Dust Bowl-like conditions in places like the U.S. Southwest and southern Europe, lasting for millennia rather than a decade or two."
Tom Laskway guesting at Ezra Klein argues this means "the 'innovation dodge,' endorsed by 'reasonable' conservatives like Andrew Sullivan, and used as a bludgeon against government regulation"
should be DOA. "Before this latest news, it surely seemed safe to base your climate strategy on silver bullets. You just figure you can pull all that nasty carbon out of the air once you've invented a magic carbon-eating machine some time in the indefinite future. But now we have evidence that we don't just have to deal with more carbon if we wait, we have to deal with more and larger guaranteed effects on the climate..."
Grist's David Roberts warns "Carbon tax is a poison pill": "The 111th U.S. Congress is not going to pass a carbon tax. Calls for a carbon tax, to the extent they have any effect, will complicate and possibly derail passage of carbon legislation ... If you want carbon pricing out of this Congress, cap-and-trade is what you're getting. It follows that your energies are best spent ensuring that cap-and-trade legislation is as strong as possible ... support for carbon taxes has been taken up by a growing cadre on the far right ... Are we to believe that these folks understand the threat of climate chaos ... and sincerely believe that a carbon tax is the best way to accomplish that goal?"
