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Paul-Grayson Fed Audit Plan Clears Committee

NYT on House committee vote repudiating Fed: "Mr. Paul, a libertarian Republican who has called for abolishing the Fed entirely, has introduced a version of his bill in every session of Congress since the early 1980s and never made any progress. But the Fed’s trillion-dollar efforts to bail out major banks and rescue the financial system provoked a popular firestorm that ignited both right-wing Republicans and left-wing Democrats. Mr. Paul’s amendment would instruct the Government Accountability Office, the investigative arm of Congress, to carry out audits of all the Fed’s operations. Those include an array of emergency lending programs, bailouts of giant financial institutions, dealings with foreign central banks and the central bank’s efforts to drive down interest rates by intervening in bond markets. Mr. Frank had already agreed that the G.A.O. should be authorized to audit all of the Fed’s rescue programs, but he had wanted to wall off the Fed’s more basic job of setting interest rates to steer the economy."

Vote on overall financial reform package stalled by Black Caucus members demanding more action on economy. The Hill: "Frank delayed the panel’s final vote after Congressional Black Caucus members said they would withhold their votes. 'It has nothing to do with the underlying bill,' said Steve Adamske, Frank’s spokesman. 'It has to do with larger economic issues with the African American community.'"

W. Post adds: "Congressional aides said the [CBC's] concerns are similar to those of the Democratic Party's liberal wing. Caucus members are pushing for legislation that would directly lead to new jobs by providing tax benefits, for example, that would provide incentives for home renovations and funding for new infrastructure projects. They also want to extend health-care and unemployment benefits."

Shelby rips Dodd financial reform bill. CQ: "Shelby and other Republican panel members said Dodd’s bill would preserve through law the practice of rescuing companies deemed 'too big to fail,' rather than end it ... Taking into consideration the Republican concerns, Dodd offered to give his panel members more time to fashion a bipartisan bill. He told his colleagues that they should be prepared to work 'virtually around the clock' into next week to iron out problem areas, but that he would not set a deadline on when to proceed with the bill."

Geithner tells Congress of plans to use leftover TARP funds for deficit reduction, while facing calls to resign. AP: "'We are winding it down and will close it as soon as we can,' Mr. Geithner said of the $700 billion bailout fund ... Mr. Geithner said 'substantial resources' remaining in the fund would be used to pay down the national debt ... While pledging to end TARP as quickly as possible, Mr. Geithner also said the administration did not want to repeat the mistake of other countries by ending government support too fast and derailing a fledgling economic recovery. But Representative Kevin Brady, a Republican from Texas, said the economy was such a mess that Mr. Geithner, as the Obama administration’s chief economic spokesman, should resign immediately."

Pelosi pushes international tax of financial transactions. Reuters: "Any tax imposed on financial transactions would have to take effect internationally to keep Wall Street jobs and related business from moving overseas, U.S. House of Representatives Speaker Nancy Pelosi said ... support is tepid among key legislators, especially those from the New York region who worry that finance jobs could disappear if the tax drives trading activity overseas."

White House stimulus watchdog notes imperfect local reporting will both understate and overstate job creation. NYT: "The 640,000 figure, announced by the White House with some fanfare last month, came from reports filed by recipients of the stimulus money, many of which have been shown to be inaccurate or overstated since they were made public. But the watchdog, Earl E. Devaney ... said that it was also possible that the figure understated how many jobs were affected. Up to 10 percent of the recipients had not filed the required reports showing how many jobs they had created or saved, he said." ALSO: White House blog posts "reality check."

President renews prospects of Korea trade deal. NYT: "Mr. Obama and the president of South Korea, Lee Myung-bak, both declared their desire to renegotiate elements of the agreement and to have both countries ratify it as soon as possible ... Democrats from big manufacturing states were already accusing the president of emulating his Republican predecessor and undermining American workers ... [Rep. Sander] Levin has warned the trade deal had no chance of passage unless South Korea agreed to make reductions in import restrictions. But he welcomed Mr. Lee’s apparent willingness to re-open those discussions."

Senate Hopeful To Clear First Procedural Hurdle Tomorrow

Senate expected to have 60 votes to begin health care debate Saturday. NYT: "After getting a look at the contents of the $848 billion legislative package unveiled by Mr. Reid on Wednesday, Democrats were increasingly confident they would be successful on the first crucial vote. That confidence was in part due to Mr. Reid’s shaping elements of his bill to appeal to Ms. Landrieu as well as to two other Democratic holdouts, Senators Blanche Lincoln of Arkansas and Ben Nelson of Nebraska."

Sen. Olympia Snowe looking to weaken employer mandate, public option. W. Post: "...Snowe said she is not happy with Reid's package, and has informed him that he will not have her vote Saturday. But Snowe said she would seek to amend the measure to lighten the financial burden it would place on small businesses whose workers received federal subsidies to buy insurance. She is also pressing for a trigger approach to the public option that would make it available only in states where private firms did not develop broadly affordable policies."

Union leaders remain opposed to tax on expansive insurance plans. LA Times: "...the Senate bill also includes the 40% excise tax on companies that offer high-end insurance plans -- those that cost $8,500 in annual premiums for individuals and $23,000 for families. Proponents argue that would not just raise revenues but also curb costs by discouraging companies from offering expensive plans ... critics warned it would not hit just luxury plans, but also those for middle-class workers whose premium costs are high because they live in high-cost states. A recent study by the Commonwealth Fund projected that the average premium for family coverage in 2015 would be nearly $20,000 in high-cost states. To address those concerns, the Senate bill sets the threshold $3,000 above that for certain states and for plans that cover workers in high-risk professions. Richard Trumka, president of the AFL-CIO, said that was a step in the right direction, but that labor would seek to kill the provision. 'We continue to believe that a tax on working families' benefits is the wrong way to finance healthcare,' he said."

White House squarely in support of insurance tax. WH budget director pens W. Post op-ed: "...will do more than help pay for reform. It also will curtail the growth of private health insurance premiums..."

CBPP largely praises Senate bill. TPMDC: "'The new Senate health bill marks a major step toward comprehensive, fiscally responsible health reform,' said executive director Robert Greenstein. 'It would extend health insurance coverage to 31 million Americans who lack it, reduce the budget deficit, and put long-term downward pressure on health care costs.'" CBPP had been particularly critical of the 'free-rider' employer mandate provision in the Finance bill, which Reid has rectified. Greenstein says the main problem with the bill now is its affordability (or lack thereof) for working-class Americans."

Some business groups oppose, but conflicted on strategy. WSJ: "Several industry groups are banding together to ask Congress to scrap the current bills and start from scratch on a health overhaul. They are stepping up television advertising against Democrats' proposals. The problem for employers is they may lack the power to kill the bill, which is why some are hedging their bets by negotiating on provisions they think they still have a chance of changing ...

Catholic bishops group lambastes Senate bill abortion language: "At the White House on Thursday, health reform director Nancy Ann DeParle praised Reid's effort to find a compromise on abortion ... But Richard Doerflinger, associate director of the bishops' conference Secretariat of Pro-Life Activities, said Reid's 'is actually the worst bill we've seen so far on the life issues.'"

House conservatives flip-flop on fixing Medicare reimbursements to doctors, as bill passes. The Treatment's Suzy Khimm: "The majority of House Republicans opposed the Democrats’ $210 billion physician payment bill--which passed this afternoon on a 243-183 vote--accusing the legislation of increasing the deficit by relying on federal borrowing through Medicare to pay for itself. ... But it was only four months ago that Ways and Means Republicans voted for an amendment that’s nearly identical to the bill being proposed today..."

Pre-Copenhagen International Jockeying Begins

Nations begin laying down markers on emission cuts in advance of Copenhagen. NYT: "...a rapid-fire succession of countries are unveiling national plans that serve as opening bids for reining in heat-trapping emissions ... 'We now have offers of targets from all industrialized countries except the United States,' [UN climate chief Yvo] de Boer said ... [US climate negotiator Todd Stern] noted that bills pending in Congress involved cuts of around 17 percent in emissions by 2020, increasing to much deeper cuts by 2030 ... South Korea said it would cut emissions by 30 percent from 'business as usual' by 2020. Russia’s president, Dmitri A. Medvedev, said his country would try to reduce emissions by 25 percent by then, instead of 15 percent as announced earlier. Last week, Brazil promised reductions of about 40 percent below current projections by 2020. The recent announcements are a mix of aspirations, good intentions and negotiating tactics. In most cases there is no certainty that the targets are politically or scientifically plausible."

Politico assesses Sen. John McCain's flip-flop from climate bill proponent to opponent: "Now the Arizona Republican is more likely to repeat GOP talking points on cap and trade than to help usher the bill through the thorny politics of the Senate. ... Former aides are mystified by what they see as a retreat on the issue, given McCain’s long history of leadership on climate legislation."

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