Sharp Recession Continues
GDP shrunk at annual rate of 6.1% in first quarter of 2009.
Will Specter Switch Affect Health Care?
Wonk Room's Igor Volsky: When it comes to health care reform, Sen. Arlen Specter may be one of the few (former) Republicans open to negotiation [and] Democrats now have 60 votes (assuming that Al Franken is seated) to pass health care reform ... some pundits may argue that reconciliation is no longer necessary. But this view overestimates the unity of the Democratic party. Blue-dog moderates like Sens. Evan Bayh (D-IN) and Ben Nelson (D-NE) are unlikely to support the price tag of comprehensive health care reform ($1.3 trillion over 10 years) or legislation that undermines the monopoly of private insurers. For this reason, reconciliation forces Republicans and Blue Dog Democrats to compromise with the liberal majority, not the other way around.
Change.org's Tim Foley: "Specter’s switch won’t have much of an impact on health care reform. Why not? Well, simply put, if health care reform couldn’t get Specter’s vote to begin with, we’d be in serious trouble ... [the danger] was that, much like the process for the stimulus bill that unfolded, he’d join with a handful of moderates including Sens. Nelson, Conrad, who knows, maybe even Evan Bayh to force the compromise to bend to their will. With a date set for when budget reconciliation rules apply to health care legislation taking the filibuster out of commission, the larger problem is still that reformers won’t be able to agree with reformers, or will squabble with the fiscal conservatives gun shy at such at the cost of health care reform, no matter how long-term cost effective. If reform falls apart this time, that will likely be why. If so, it doesn’t matter that Arlen Specter, fiscal conservative, has a (D-PA) after his name instead of an (R-PA)."
Four House caucuses representing 117 congresspeople draw line on public health insurance option: "our support for enacting legislation this year to guarantee affordable health care for all firmly hinges on the inclusion of a robust public health insurance plan like Medicare."
Consumer Watchdog presses public plan option: "Health care reform failed in California last year, and Massachusetts faces budget overruns and out-of-pocket cost increases for patients under its health care law, because cost control was not part of state reform proposals ... Unlike states, the federal government has the ability to offer a true public plan to compete with and drive down the wasteful overhead of private insurers.”
NBC/WSJ poll shows strong support for public plan option: "..please tell me whether you approve or disapprove of this proposal... Using government funds to expand health insurance coverage, and raising taxes on wealthier Americans to pay for it: Approve 56%, Disapprove 37%"
Wonk Room: "Republicans Falsely Complain That Democrats Aren’t Consulting Them On Health Care "
WSJ on new set of recommendations, in advance of closed-door Senate meeting today, from Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa):
Many of the proposals use Medicare as a testing ground for ideas that could eventually be expanded to the broader market. Here are the top points:
– To attract primary care doctors and general surgeons, give them a Medicare payment bonus of at least 5% for five years.
– Provide payment incentives to hospitals that reduce preventable readmissions of patients, and provide a single bundled Medicare payment for certain types of care, instead of paying hospitals for individual tests and services.
– Shift the way that private Medicare plans are paid, factoring in things like how well they manage care of chronically ill patients and other measures of performance.
LA Times on hospital and doctor reimbursements: "two leading senators offered a plan Tuesday to pay more to hospitals and doctors who meet federal quality standards and penalize those who do not ... the proposal by Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa) suggests the senior members of the Senate Finance Committee have reached some bipartisan agreement about how the federal government should pay providers through its Medicare program. That then could be the model for revamping the private healthcare system."
Boston Globe on comparative effectiveness research component: "The [Baucus-Grassley] proposals also call for making a stronger committment to comparative effectiveness research -- a systematic effort to discover through coordinated scientific research which treatments work best for which patients. This was a hot-button issue in the stimulus package, which set aside $1 billion for such research; the new proposals leave open the contentious question of whether the body guiding that research would be within government or a separate non-profit entity."
Will Specter Switch Affect Climate Protection?
Climate Progress' Joe Romm is hopeful: "...as a Republican facing a tough primary challenge from the right, he was a lost vote on global warming legislation. One assumes that if he is going to seriously run as a Democrat, he’ll support an energy and climate bill."
Watthead's Jesse Jenkins, "no easier": "Democrat or Republican, Senator Specter remains an independent thinker and a difficult but critical swing vote on climate legislation. It will be no easier to meet his concerns than it will the other critical swing Democrats in the Senate."
Beyond Green's Tom Laskawy sees path to compromise: "...his vote will also depend on just how lucrative to the carbon-heavy states the Dems make the climate bill. Predominantly, this is about getting Midwestern Dems on board, but the calculus is the same for PA. If they focus investment and/or tax rebates in a particularly attractive way on coal-dependent states, I don't think it would be beyond Arlen to flip-flop and support cloture (at a minimum)."
Grist's David Roberts is pessimistic: "So what are his positions on climate change? Roughly those of a conservative Democrat. He voted against the McCain-Lieberman climate bill twice and declined to vote for cloture for the Lieberman-Warner climate bill last year. He said that the latter bill contained 'very difficult standards which I, candidly, do not think are attainable.' As an alternative he has pushed a bill co-sponsored with Sen. Jeff Bingaman, the “Low-Carbon Economy Act,” which has weak targets, free permits, automatic off-ramps, and all the rest of the kinds of provisions that neuter a climate bill ... Given that the Waxman/Markey climate bill is considerably more ambitious than Lieberman-Warner—and likely will remain so even after being hashed over by the House’s conservative Dems—there is every likelihood that Specter, along with many other conservative Dems like Bayh and Nelson, will vote the bill down, or at least weaken it until it’s worthless. In other words, he’ll do what he would have done anyway."
Wonk Room's Brad Johnson: "Specter Joins Conservative Democratic Bloc On Climate And Energy "
WSJ on coal ties: "Hailing from a coal-rich manufacturing state, Sen. Specter is especially sensitive to two issues when it comes to energy and environmental policy: American jobs and the future of coal ... he’s made clear that his support is contingent on taking care of the folks back home, understandably enough. But that’s not necessarily what environmentalists—or many in the Democratic party – want to hear. Granted, that tune might change, if he faces the prospect of winning over Democratic voters in 2010—but it’s what he’s been dancing to so far ... Adding sweeteners to protect vulnerable industries, from handing out emissions permits to slapping carbon tariffs on 'dirty' imports, aren’t just options. Their absence could be a deal-breaker for Sen. Specter."
NBC/WSJ poll shows strong support for carbon cap: "...please tell me whether you approve or disapprove of this proposal... Charging a fee to companies that emit greenhouse gases, which might result in higher utility bills, and using the money to provide tax cuts for middle-income families: Approve 58%, Disapprove 35%"
Politico summarizes the policy positions among competing interests, notes: "[Reps.] Waxman and Markey delayed the [House Energy and Commerce] subcommittee markup of the proposal until next week, giving the committee more time to hammer out a deal. They still aim to have the bill passed out of the full committee by the Memorial Day recess."
Rahm Emanuel coy on nuclear and oil drilling when asked by NYT, "Are those going to be part of a final energy package?": "...stay tuned as we outline it. I'm not going to tell you--as we do it. But he has said, and you can go point to what he has said, John, in the past, which is you have to have a comprehensive policy and a comprehensive approach. You just can't lean. You have to have enough emphasis on efficiencies [and] investments in alternative energy; starting industries and companies that will be dramatic job producers in the future and catapult America back to its natural lead in innovation .... He has said in the past, nuclear's part of [the energy mix]. He has said he doesn't believe drilling is a solution, but he is open to it. What that composition is across the board you'll see as we draft the legislation."
McClatchy on US-hosted international meeting on climate: "The top U.S. climate negotiator, Todd Stern, said Tuesday that he was 'a bit more optimistic' that the world could solve the global warming crisis after meeting with high-level officials [but] no one should underestimate the difficulty of getting the world's developed and developing nations to agree on actions all can take to reduce emissions."
McClatchy also notes warning from Germany:
The head of the German delegation, Environment Minister Sigmar Gabriel, said he brought some advice to the Obama administration and Democrats in Congress as they try to develop public support for boosting renewable energy and efficiency and slowing climate change. Sell it as a business opportunity, Gabriel said.
"We say better to explain to your society that they will lose opportunities" if the country doesn't move away from fossil fuels, Gabriel said. "What happens when the Chinese close their biggest cities to the old kind of cars, those that aren't electric? Then you have to ask yourself, do you want these cars only coming out of Korea and Japan?" Gabriel said, speaking to reporters after the meeting. China has a "very ambitious" renewable energy program and "we shouldn't underestimate what technological leap-frogging China is capable of," he said.
Germany, a world leader in wind and solar energy, employs 280,000 of its people in renewable energy jobs — "and that's 160,000 more than four years ago," Gabriel said. He also said that although the price of electricity per kilowatt-hour would go up, the efficiency gains would ensure that people wouldn't pay higher bills.
Bloomberg adds: "There are two preparatory sessions scheduled before a July meeting of world leaders in Italy to discuss climate change. More may be added between July and December if they are thought to be needed, Stern said. One potential stumbling block to reaching an agreement for a new climate treaty by this year’s deadline is disagreement between the U.S. and others on emissions reduction targets [but] The EU isn’t overly concerned right now with the U.S.’s 2020 goal, [European Commission's] De Almeida said."
Greenpeace's USA Philip Radford in The Nation argues tougher emission targets will lower health care costs and ease passage of health care reform: "Pollution from fossil fuel power plants (mostly coal) adds $167 billion to America's annual healthcare bill, as a result of increased asthma attacks, respiratory diseases, heart attacks, lung cancers, mercury poisoning and other impacts that come with coal's soot and smog. Acting against global-warming pollution would cut other kinds of toxic pollution too, as businesses invest in energy efficiency and clean energy and move away from polluting sources of energy. Add the tens of billions of dollars of additional healthcare costs from auto tailpipe pollution, and the savings are even higher--potentially paying for the entire additional cost of President Obama's healthcare plan."
Will Specter Switch Affect EFCA?
Wonk Room's Pat Garofalo: "So even if Specter is still opposed cloture for EFCA in its current form (and who knows what political constraints he may find himself free of now), he has admitted that the system for forming a union is broken. Furthermore, he may find it very difficult to run in union-heavy Pennsylvania as a Democrat without supporting some sort of labor reform. Does this mean that there is an EFCA compromise in the works?"
Politico: "...labor leaders have been trying to hammer out a compromise. And now, their jobs — and Specter’s situation — just got a lot less complicated, since his future is tied closer to labor than to the business community."
Budget Vote Expected Today
W. Post says deal leaves out PAYGO commitment from Senate: "House Democrats resolved an internal squabble over a $3.5 trillion fiscal 2010 budget plan, clearing the way for final passage of the blueprint tomorrow ... negotiations over a final blueprint hit a snag over the weekend when House Majority Leader Steny H. Hoyer (D-Md.) sought to toughen deficit-reduction rules to prohibit new initiatives unless they are offset by spending cuts or revenue increases. Under pressure from the group of fiscally conservative Democrats known as the Blue Dogs, House leaders agreed to hold a vote on those rules and enshrine them in federal law. But Senate leaders have refused to do so ... Late yesterday, House Democratic aides said the matter had been resolved, without any further Senate concessions."
CQ notes House leader PAYGO pledge: "In a letter to budget conferees, Pelosi and Hoyer promised that the House would not consider any legislation to extend middle-class tax cuts, patch the alternative minimum tax, retain current estate tax rates or provide higher Medicare payments to physicians unless the costs of those initiatives was fully offset or a statutory pay-as-you-go law was enacted."
Bank Stress
Bloomberg on stress test results: "At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests ... While some of the lenders may need extra cash injections from the government, most of the capital is likely to come from converting preferred shares to common equity, the people said."
NYT: "Despite pressure from federal regulators, industry executives are taking issue with major elements of the president’s bank plan. Administration officials characterize each part of their three-pronged approach as crucial to bolstering banks and restarting the economy. But bankers are increasingly eager to extricate themselves from the government’s grasp, and worry that Washington will impose new restrictions on their businesses if the government’s already considerable role in the industry grows."
Politico rounds up populist attacks on bank CEOs: "On Tuesday, the Service Employees International Union, MoveOn.org and other activist groups staged protests at Bank of America branches across the country, including one directly across from the U.S. Treasury building. The protests came the day before the company’s annual shareholder meeting. Among their demands: Fire the bank’s CEO, Ken Lewis. The groups also want BofA, which has taken $45 billion in taxpayer bailout money, to stop what they call abusive lending practices and interest rate hikes and to stop lobbying against the Employee Free Choice Act, a labor-backed measure that would make it easier to unionize. Also on Tuesday, a trio of House Democrats called for capping credit card interest rates at 18 percent across the board — just the latest salvo in the popular war against credit card issuers. In unveiling their proposal, Reps. Maurice Hinchey (D-N.Y.), Peter Welch (D-Vt.) and John Tierney (D-Mass.) said they hoped to attach it to the broader bill to crack down on credit cards that’s slated to hit the House floor Thursday."
Mortgage Moves
Obama expands foreclosure strategy. W. Post: "The Obama administration unveiled an expansion of its $75 billion foreclosure prevention plan yesterday, providing new subsidies to mortgage lenders and investors. Under the expanded plan, some homeowners could see their payments fall significantly and the interest rate on their second mortgage pushed down to 1 percent. The announcement comes nearly two months after the administration launched the housing program, called Making Home Affordable. While officials said some borrowers have already received help, the foreclosure rate is rising and it could be months before the program begins to have an impact. The new efforts address, in part, criticisms from consumer advocates that the administration's housing plan did not go far enough and that borrowers still face too many barriers to receiving help."
HuffPost's Ryan Grim on shaky status of mortgage/bankruptcy reform deal: "Sen. Mary Landrieu (D-La.) spoke poorly of Durbin's compromise proposal, which is now being circulated. 'I don't think it's much of a compromise,' Landrieu told the Huffington Post. 'My community bankers are really opposed to it and I think it's important for people to realize there is a big difference right now in the country between the health of these large international financial institutions and our local community banks...I think we gotta be careful about adopting processes and procedures that would really hurt our community banks.' Asked if she was a definite no, Landrieu responded that she was 'pretty close to a definite No.' Sen. Evan Bayh (D-Ind.) wouldn't say whether or not he supported the compromise, but he nevertheless expressed deep skepticism."
Terrance Heath contributed to the making of this Breakfast
