President: Pass Budget to Propel Health Care, Clean Energy
CNN on President meeting with House Democrats, a few who are wavering: "...the president told members, "I need your vote in passing the budget. If we do that, we will create a sense of momentum that will allow us to do health-care reform and education." But he warned, "If we don't pass the budget, it will empower those critics who don't want to see anything getting done," according to the sources ... [Speaker Nancy] Pelosi told reporters after the meeting, "Yes, we will pass a budget this week." But leadership aides admit that there are still some undecided House Democrats and they are still working to secure the votes."
President says this year or bust. Politico: "President Barack Obama warned a closed meeting of House Democrats that Congress has to pass health care reform and major energy legislation this year 'or it will not get done,' according to people in the meeting.
President's message on health care, energy may resonate with some Blue Dog Dems. The Hill:
Rep. Mike Ross (D-Ark.), a former leader of the Blue Dog Coalition – whose 51 Democratic votes will be critical in passing the budget in the House – did not say if the Blue Dogs will rally behind the House budget, but indicated that the coalition was very supportive of a number of provisions. “The budget includes a commitment to statutory paygo, which is very important to us,” Ross said.
And Ross also hinted that he, for one, welcomed significant investments in healthcare and energy legislation that the president is pushing for momentum for. “These are tough times,” Ross said. “Part of the way we grow our economy is through investments in energy, healthcare and the environment.”
White House, Conrad In Delicate Dance
Sen. Kent Conrad cracks the door open for simply majority vote on health care. Politico:
Senate Budget Committee Chairman Kent Conrad, who remains opposed to this strategy, gave some ground Monday, telling reporters that he can’t control what will come out of final House-Senate budget talks and would be open to reconciliation next fall, after first testing if Senate Republicans will cooperate on health care.
“I don’t control the outcome of the conference. I am a participant, but I don’t control the outcome,” said the North Dakota Democrat. He was more hopeful than some at the White House that Republicans would engage on health care, but Conrad said that a second budget resolution could be called up as a backstop if that proved not to be the case.
“One could go through this year, at least most of this year, on this budget resolution without reconciliation instructions and then, if it proved absolutely essential — if there were no Republican cooperation on writing major health care reform — you could run a second budget resolution,” Conrad said. “It would only take a day on the floor, and you could put reconciliation instructions there.”
...in courting Conrad and other centrist Senate Democrats, the White House has hurt its credibility by rushing to downplay any differences over domestic spending, apart from health care.
Budget Office Director Peter Orszag went so far last week as to say that the administration was getting “98 percent” of what it had asked for in February. And in the case of Pell Grants for low-income college students, the president was assured, Orszag said, that the additional funding he wants will be provided, albeit in the form of annual appropriations, not direct mandatory benefits.
Pressed by POLITICO, administration officials said Monday that Orszag’s statement regarding the Pell funding was in error and based on a “quick analysis” at the time. Both sides held out hope that the differences could be resolved by finding additional savings in the college loan program. But the bottom line is that the Conrad budget assumes significantly more in five-year savings from nondefense spending than the White House has acknowledged...
...in the case of nondefense discretionary spending, his committee staff said Monday he would cut $221 billion from the president’s appropriations requests over the next five years for an outlay savings of $167 billion. That $167 billion is twice the $80 billion that the White House had previously estimated in documents prepared last week. While some of the discrepancy revolved around the still uncertain fate of the Pell Grants, the $221 billion overall cut from the president’s appropriations requests is four times the 2 percent adjustment suggested by the White House last week.
Auto Plan Reactions
TNR's Jonathan Cohn gives thumbs up, while listing the "unanswered questions:"
Will the taxpayers get equity in the new companies, as they should? ... Is there a way to give the union a larger stake in ownership/management ... if American taxpayers are putting money into this [Chrysler-Fiat] merger, to what extent can they be assured jobs won't simply continue to go overseas? ... Can Obama [increased demand for fuel-efficiency] by enacting some sort of pollution tax ...
...This much, however, we do know: This administration isn't clueless. They may not have all the answers, but they have clearly spent a lot of time pondering the questions. Indeed, experts I've consulted in the last 24 hours seem generally optimistic about this plan--or, at least, as optimistic as one can be given the dire circumstances.
During the next 60 days, G.M. and its stakeholder have the last opportunity to save the company — or risk letting a bankruptcy judge do it for them. To do so, G.M. will almost certainly need concessions from two groups: workers and bondholders.
The workers, represented by the United Automobile Workers, have made concessions already. And the president said they need to make even more, as painful as it will be. The workers — despite often appearing recalcitrant — have the most to lose. If G.M. falls into bankruptcy protection, they could lose not only their jobs but also much of their retiree health care plan.
Then there are the bondholders. Their motivation is very different. For them, this is not about keeping their jobs or, frankly, about patriotism. It is about dollars and cents. And, according to some analysts, there is a chance they would actually do better in bankruptcy court than they would negotiating against G.M. or the government, which is seeking to reduce G.M.’s debt by two-thirds.
Calculated Risk worries about pensions: "A bankruptcy sounds very likely. Added: I think a reasonable role for government is to guarantee the warranties (so people keep buying cars) and provide DIP (debtor-in-possession) financing. There are many other issues too - like making sure the vendors don't all go bankrupt, and the U.S. Pension Benefit Guarantee Corp. (PBGC) will probably be taking significant losses on GM and Chrysler pensions."
McClatchy on pensions: "Wagoner's pension secure as GM's workers could be hit"
Matt Yglesias on the need to focus on the broader Michigan economy: "this looks like an economically responsible way to avoid a cataclysmic implosion of these firms at an inopportune moment. But this isn’t going to prevent the conditions facing the population of Michigan from further deteriorating. That state more-and-more looks like it’s going to be the 21st century version of the Great Depression’s Dust Bowl. The most important policy question facing us in this regard thus continues to be what can be done to help the people of the Rust Belt that doesn’t just involved indefinitely propping up shrinking firms."
Of possible help, an expansion of fair wage law. Washington Independent's Jefferson Morley reports:
Though stymied on the Employee Free Choice Act, which would make it easier for workers to form unions, organized labor is about to claim a big consolation prize: the massive application of a law guaranteeing “prevailing wages” for hundreds of thousands of construction workers hired under President Obama’s economic stimulus program.
Secretary of Transportation Ray LaHood is now preparing guidelines that will expand the scope of the 1931 Davis-Bacon Act, according to a department spokesperson. “In some cases, the Davis-Bacon prevailing wage provisions will apply to federal construction contracts in the same manner as they currently apply,” said spokesperson Dolline Hatchett in an email. “In other instances, the prevailing wage provisions will apply to certain projects that may not have been subject to the Davis-Bacon provisions in the past.”
LaHood’s action will put a floor under wages paid for the more than 678,000 construction jobs that the White House estimates will be created by the end of 2010.
Anytime is a Good Time To Blame The Unions
Visit msnbc.com for Breaking News, World News, and News about the Economy
Emptywheel adds: "Corker, you see, is hoping everyone will stay focused on his showboating, and not notice that Corker left several key elements off the table last year out of political expediency. Corker's also hoping you ignore that Bush basically used Corker's plan when he pushed through the Christmas Eve bailout--so if this plan has failed, it is Corker's plan that failed."
Balloon Juice's John Cole mocks Lou Dobbs's union-bashing: "First, he is mad because Obama 'fired' Wagoner. Then he weeps for the future of capitalism with the government involved like this. Then he gets mad because Obama doesn’t know how to handle this crisis and isn’t doing more. Then he is mad because Obama didn’t fire the head of the UAW. And then he is mad because Obama might require the unions to make concessions. And then he is mad because the Obama team is not doing enough for the traditional economy (which I guess is the economy outside of the financial markets and not having to do with the auto industry but doesn’t involve concessions for blue collar workers). And that was in one 5 minute portion of the show."
ThinkProgress: "Fox News Blames Unions For Auto Companies’ Demise, Suggests Firing UAW Head"
Will Bank CEOs Be Next?
W. Post speculates on whether President Obama will force out any bank CEOs:
Banking executives and analysts said Monday that if the administration were to replace a bank chief executive, it would likely be someone from an institution that has received large amounts of federal money. The government is currently stress-testing the nation's 20 largest banks and "maybe three fail the test," said an executive at a large bank receiving government funds. Obama "could remove the heads of those banks," the executive said ...
...Two banking executives who may be vulnerable, [industry analyst Bert] Ely and others said, are Citigroup's Vikram Pandit and Bank of America's Ken Lewis. Pandit, who took the helm 15 months ago and largely inherited the bank's problems, has stirred questions about whether he is moving fast enough to sell off assets that no longer fit Citigroup's business plan. Lewis has been criticized for his decision to acquire Countrywide Financial and Merrill Lynch.
Obama Lapping GOP on Economy
New W. Post/ABC shows Obama maintain strong public support, with GOP credibility in tatters.
* 66% approve of President's Obama's "job as President"
* More trust Obama (58%) than congressional GOP (25%) on economy
Also, loaded question on deficits results in split.
* Plurality back "increasing federal spending" (49%) over "avoiding a big increase in the federal budget deficit" (47%).
President looks to assure the deficit worriers in House meeting. CNN: "...Obama acknowledged that the size of the deficit was one argument that critics raised to oppose his policies. According to several Democratic sources, he said, 'I'm serious as a heart attack about going after it.' And in his opening remarks, the president refuted the argument that it the economic downturn was a reason not to make major investments in health care, energy and education, saying, 'The only way to get out of the economic mess we are in is to grow our way out of it. If we do not have growth, we will not succeed.'"
Worried About Wasteful Spending? Talk To The Pentagon.
New GAO report finds "staggering" cost overruns for weapons systems. W. Post: "The costs to research and develop fighter jets and other programs have been rising steadily. Last year, they were 42 percent over initial estimates. That compares with 27 percent in 2000, when the cost of the portfolio of programs was half of what it is today. Overall, the cost overruns associated with the military's major weapons systems have decreased slightly compared with a year ago. But they still total near $300 billion..."
NYT on possible Pentagon response: "Pentagon officials have said they will finish putting together a list of proposed cuts in April ... Some programs, like the Air Force’s F-22 fighter jet and the Army’s Future Combat System, are among the systems that Defense Secretary Robert M. Gates has said he is scrutinizing ... Some military analysts say they believe that Mr. Gates will recommend canceling the [F-22], or buying fewer planes than the Air Force wants."
Carbon Cap Legislation To Be Introduced in House Today
W. Post reports the bill sets firm targets, but does not decide how much polluters would pay:
Key House Democrats will unveil legislation Tuesday that aims to cut the nation's greenhouse gas emissions 20 percent from 2005 levels by 2020 ... co-sponsored by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and Edward J. Markey (D-Mass.) ...
...It would establish a cap-and-trade system for carbon dioxide that would allow cleaner facilities to sell their pollution permits to dirtier operations. While the bill remains silent on some key issues, such as what portion of pollution allowances would be auctioned off and how the money raised through such an auction would be spent, sources said, it would establish both a national renewable energy standard as well as an energy-efficiency-resource standard that would reduce electricity demand by 15 percent by 2020.
The emissions reduction targets ... are slightly more ambitious than President Obama's short-term climate goals ... By 2050, the bill would cut national greenhouse gas emissions by 80 percent compared to 2005 levels...
...The bill also includes language modeled on the Carbon Capture and Storage Early Deployment Act that Rep. Rick Boucher (D-Va.) introduced last year -- promoting the commercial development of carbon sequestration technology by establishing a research fund.
Paper Trail's Marianne Lavelle reports lobbyist pressure: "...befitting an issue that has seen a 300 percent increase in lobbyists over the past five years, there have been plenty of last-minute suggestions for details to include in the legislation."
Grist's Kate Sheppard suggests coordination in the House across geographic lines:
A group of key House Democratic leaders sent a letter to President Obama on Friday signaling that they intend to work together on climate and energy legislation despite the different views and constituencies they represent.
Henry Waxman (D-Calif.), chair of the Energy and Commerce Committee, and John Dingell (D-Mich.), the former chair whom Waxman unseated last November, both signed the letter, as did Reps. Ed Markey (D-Mass.) and Rick Boucher (D-Va.), who chair two of the panel’s subcommittees. Dingell and Boucher have long been allied in seeking to protect manufacturing and coal interests, while Waxman and Markey have favored more aggressive environmental measures.
“We represent different regions of the country and approach energy issues from different perspectives, but we are united in the view that now is the time for Congress to pass comprehensive energy and climate legislation,” the four lawmakers wrote. “And we are working together to meet that goal.”
Grist also reports: "Nike, Starbucks, eBay, and a handful of other big-name U.S. companies are putting forward a climate agenda that’s just as ambitious as that of many environmentalists, if not more so."
Climate Progress on Senate developments: "The Senate Energy and Natural Resources Committee, however, 'has been working to produce a bipartisan, comprehensive energy bill since the beginning of this Congress,' as a new press release explains. The Committee, chaired by Jeff Bingaman (D-NM), will be marking up their bill Tuesday. They have just released an outline of key details, which I reprint below. Key features include authorizing the doubling of R&D, a major initiative to create a domestic battery industry for electric vehicles, and a major push to develop and deploy energy-efficient and low-carbon technologies for industry (which I will blog on a later). Notably missing is a renewable electricity standard and an energy efficiency standard..."
Can Senate Moderates Govern?
TNR Jonathan Chait so-called moderates in the Senate for hypocrisy and undermining President Obama: "Some moderate Democrats seem to suffer from a conflation of their own fund-raising strategies with responsible fiscal policy. The Wall Street Journal reported, of a group of Democratic Senate centrists, 'Their stated goal is to rein in deficits and to protect business interests.' In fact, this is not a goal but two often-conflicting goals, and neither is synonymous with 'the national interest.' This sort of behavior didn't hurt Bush because his agenda largely was synonymous with business interests. But the Democratic agenda isn't, and Democratic confusion of the two is poisonous."
Democratic Strategist's Ed Kilgore: "It's all a pretty persuasive case, and one that does not, as many accounts do, rely on excessive attributions of treasonous motives to a particular faction of the party."
D-Day: "I'm of two minds on this. On the one hand, no co-equal branch of government SHOULD be a rubber-stamp (certainly the Hastert/DeLay/Frist Congress under George W. Bush shouldn't be emulated), and Congress has every right to carry out their legislative agenda under their own terms. At the same time, the endless whining from Democratic 'moderates' to modify the Obama agenda, not out of any principle or belief that a middle course makes the most sense from a policy standpoint, but because they have been seduced by the high Broderist idea that the middle distance between two points is a virtuous end in itself, is both grating and irresponsible. The moderates use selective outrage - we must close the deficit, but we can't cap subsidies to wealthy agricultural interests to save money, just to use one example - to frustrate progress and make recovery more difficult."
Campaign Diaries: "The underlying point is that we should not confuse those who genuinely believe in third way policy solutions and those whose centrism derives from their ties to business interests, the donations they have received and the pressure from corporate lobbies. Someone is not necessarily well-intentioned just because his rhetoric sounds moderate; someone is not necessarily an expert on a subject just because he has bridged the gap between two extremes; and someone who pledges to protect buisiness interests is not automatically fiscally disciplined. (Chait’s detailed attack on Ben Nelson’s resistance to reforming the college loan system because 'one of the lenders that benefits from federal overpayments is based in Lincoln, Nebraska' is particularly damning.)"
