fresh voices from the front lines of change







Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

Obama Compared To Hoover After Announcing Spending Freeze

President to propose three-year spending freeze at tomorrow's State of the Union. McClatchy: "[President Obama] will urge Congress to keep overall spending at $447 billion a year for agencies other than those charged with national security and mandatory-spending programs such as Social Security and Medicare. The freeze would take effect with the 2011 fiscal year starting Oct. 1, and wouldn't affect the $787 billion economic stimulus plan already being implemented, the officials said. It also wouldn't affect a $154 billion jobs plan pending before Congress..."

Brad DeLong rips Obama as "Herbert Hoover": "...this is a perfect example of fundamental unseriousness: rather than make proposals that will actually tackle the long-term deficit ... come up with a proposal that does short-term harm to the economy without tackling the deficit in any serious and significant way."

Economist View's Mark Thoma reminds the White House the reason it took up health care: the deficit. "The long-term budget problem is due to primarily one thing, rising health care costs. Everything else is dwarfed by that problem. If we solve the health care cost problem, the rest is easy ... Instead we get cheap political tricks that are likely to backfire."

White House economist Jared Bernstein emphasizes jobs programs exempt from freeze on MSNBC's Rachel Maddow Show: "There`s also a bunch of emergency spending that`s outside of this freeze. The Recovery Act will continue to create employment ... New jobs initiatives that the president will be outlining in the State of the Union -- those will also be accommodated under this program." Maddow unconvinced: Not only [are you] not talking about a second stimulus, you`re talking about trying to cut $250 billion out of the budget. I have to tell you, it sounds completely, completely insane."

Robert Reich argues a freeze would hurt the jobs effort: "A spending freeze will make it even harder to get jobs back because government is the last spender around. Consumers have pulled back, investors won’t do much until they know consumers are out there, and exports are minuscule."

Huffington Post flags 2008 video of Obama criticizing McCain -- "an across-the-board spending freeze is a hatchet and we do need a scalpel." WH gives rebuttal: "'This is not a blunt, across-the-board freeze,' said a senior administration official. 'Some agencies will go up, others will go down; but in aggregate for those non-security agencies the total will remain constant.'"

Ezra Klein frets anti-poverty programs will get the ax: "The way this works is simple: The administration will target worthless programs, like agricultural subsidies, in order to preserve good programs. But the reason worthless programs live in budget after budget is they have powerful backers ... Now you've removed some of the cuts, but you still want to hit the overall target. So the cuts could get reapportioned to hit programs that lack powerful constituencies. Many of those programs help the poor."

Matt Yglesias takes a breath: "’I'm attempting not to freak out because (a) I don’t have details and (b) I suspect this initiative was deliberately leaked to progressive bloggers in an effort to get denounced by the left and I don’t want to give them the satisfaction."

TNR's Noam Scheiber reports White House trying to balance short-term stimulus with calming bond markets: "It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus."

R.A. at The Economist argues the WH has surrendered his agenda: "I understand the arguments from supporters of the president that this is a poltical gambit, that it won't actually amount to much but a sound talking point and a tool with which to co-opt the president's moderate antagonists. [But how] does the president move from this to any important policy goal? What room does this leave him to deal with either the jobless recovery or the long-run budget deficit?"

WH framing it as having more long-term effect than short-term. W. Post: "Although the freeze would shave no more than $15 billion off next year's budget -- barely denting a deficit projected to exceed $1 trillion for the third year in a row -- White House officials said it could save significantly more during the next decade."

Open Left's Paul Rosenberg accuses President of repeating mistake of 1937: "Obama is now intentionally recreating FDR's mistake of 1937, when he prematurely cut back spending to try to balance the budget, and sent the country into a new recession ... This is Bush-style idiocy."

Congressional Republicans stay on the attack. NYT quotes Rep. Boehner spokesman: "Given Washington Democrats’ unprecedented spending binge, this is like announcing you’re going on a diet after winning a pie-eating contest."

Conrad-Gregg debt commission expected to lose on Senate floor today. The Hill: "The Senate is expected on Tuesday to reject an amendment creating a fiscal commission that would recommend deficit-cutting measures Congress would have to vote on. The vote would prompt President Barack Obama and centrist Democrats to turn to their backup plan of creating a commission by executive order, a move that could be announced by the president as early as Wednesday in his State of the Union address."

Middle-Class Offered Tax Help, But What About Jobs?

W. Post breaks down the impact President's planned package of targeted middle-class tax cuts: Expanding the child-care tax credit ... Limiting student loan payments ... Expanding assistance for elder care ... Making retirement account enrollment automatic ... Simplifying the savers tax credit.'s Eric Lotke doesn't see the jobs: "They’re all good ideas and I hope every one of them passes. But something is missing. Mostly, the new initiatives don’t create jobs. Doubling the child tax credit, limiting student loan payments to ten percent of income, expanding tax credits to match retirement savings – they’re just relief ... More robust economic packages are out there, on the shelf, ready to be used. The AFL-CIO jobs plan puts people to work rebuilding our crumbling roads and bridges, and laying new track for high speed rail. It covers the basics like aid to the states so they don’t have to lay off teachers and fire fighters. The Economic Policy Institute offers a similar plan with greater detail."

Streetsblog reports Obama expected to travel to Florida after SOTU to announce high-speed rail funding: "...the state is all but certain that he's coming with $2.6 billion in federal stimulus funding for a new high-speed rail link between Tampa and Orlando."

Stimulus a huge boon to wind power, but more help still needed. NYT: "Despite a crippling recession and tight credit markets, the American wind power industry grew at a blistering pace in 2009, adding 39 percent more capacity ... [The American Wind Energy Assocation] said the growth of wind power was helped by the federal stimulus package that passed a year ago, which extended a tax credit and provided other investment incentives for the industry. But the group warned that the growth could slow ... Wind investors have called for long-distance transmission lines between the nation’s wind-intensive regions." Bipartisan group of 1,198 state legislators urges Congress, Obama to pass climate and clean energy jobs bill reports Climate Progress.

Arianna Huffington wonders if Obama is truly prioritizing the middle-class over Wall Street:: "The Bush and Obama administrations bailed out the big banks because it suddenly became imaginable that the financial system might collapse. Has Obama come to the same realization about America's middle class? Will he throw everything he has at the crisis it's facing — just as he did for Wall Street? Or do we need to become Brazil first, with the super-rich living behind fortified gates, with guards protecting their children from kidnapping?"

At the AFL-CIO blog, Leo Gerard spells out the meaning of Massachusetts: J-O-B-S: "It’s the economy, stupid. The Main Street economy. ...The Great Recession of Bush II is more than two years old now. Workers are frightened and angry. They see bailouts for Wall Street, big bonuses for bankers and unemployment continuing to rise. They will vent their frustration on politicians. Massachusetts showed it."

Business lobby frustrated at lack of movement on trade agreements. Bloomberg: "'Could we have a higher priority than to get this done?' Brenda Jacobs, a lawyer at Sidley Austin LLP in Washington representing apparel importers, said in an interview. 'It’s a harbinger of how tough it’s going to be on trade.' With last year’s defeat in mind, it’s unlikely Obama will take on Democratic allies and fight for still-pending trade agreements with South Korea and Colombia, Jacobs said."

Sens. Schumer and Hatch pen NYT oped proposing payroll tax cut for job creation: "Starting immediately after enactment, any private-sector employer that hires a worker who had been unemployed for at least 60 days will not have to pay its 6.2 percent Social Security payroll tax on that employee for the duration of 2010. The Social Security trust fund will then be made whole with spending cuts elsewhere in the budget between now and 2015 ... A $60,000 worker hired on Feb. 1 will save a business about $3,400 in taxes, while that same worker hired on May 1 will save it about $2,500."

Bernanke Gaining Support But Still Short of Majority

NYT tallies up yesterday's Bernanke announcements: "Several senators announced on Monday that they would support Mr. Bernanke, including Dianne Feinstein of California and Max Baucus of Montana, both Democrats; and Joseph I. Lieberman of Connecticut, an independent who caucuses with the Democrats. Senator John McCain of Arizona, the Republican presidential candidate in 2008, who had said he was leaning against Mr. Bernanke, announced that he would vote against him."

Bloomberg adds: "Democrats including Missouri’s Claire McCaskill and Maryland’s Barbara Mikulski were among the senators who said yesterday they would vote for the 56-year-old Fed chief or were leaning in his favor, along with Utah Republican Robert Bennett. Republicans Tom Coburn of Oklahoma and Florida’s George LeMieux said they would decide after meeting with Bernanke this week."

WSJ tally has 40 Yes votes and 32 undecided.

Campaign for America's Future and Open Left announce joint "Bernanke Whip Count" operation enlisting grassroots to call Senators and find out where they stand on Ben Bernanke.

The Guardian's Dean Baker calls three strikes on Bernanke: "Bernanke did not tell Congress that he was planning to set up a special lending facility to directly buy commercial paper. He announced this facility the weekend after Congress approved Tarp. It is not the Fed chairman's job to lead Congress up the garden path. Nor is it his job to bail out Wall Street at the expense of the rest of the country. It is his job to prevent the growth of dangerous bubbles. That's three really big strikes."

TARP inspector general investigating NY Fed actions during bailout. Bloomberg: "'We have initiated an investigation into whether there was any misconduct relating to the disclosure or lack thereof,' Barofsky wrote in remarks for an Oversight and Government Reform Committee hearing scheduled for tomorrow." NYT profiles inspector general: "Mr. Barofsky is the only one backed by federal agents who carry guns and badges and, if necessary, can break the locks off file cabinets."

Newly uncovered emails suggest Goldman Sachs willing to take losses in 2008 before AIG bailout, reports Zero Hedge. Goldman Sachs denies to Bloomberg.

Republicans attack Democrats for taking Wall Street campaign cash. The Hill: "Republicans are mounting a new effort to call Democrats hypocrites for raising populist ire at banks while continuing to accept millions of dollars in campaign money from them ... Democrats dismiss the new Republican attacks as unfounded campaign tactics. The House passed legislation in December to rein in the industry, and Democrats are targeting Republicans for voting unanimously in opposition."

NYT's Sorkin argues new bank rules proposed by Obama could be undermined by global system: "... banks in the United States may shrink because of the new rules, but will it matter if banks in China, so closely connected with ours, end up being twice the size? ... within hours of Mr. Obama’s announcement of the Volcker Rule last week, Wall Street banks were looking for ways to skirt it and figure out which of their international rivals would fall under it."

Attempt to Lower Temperature On Health Care

CQ reports Democrats are hoping to reduce tensions on health care: "Democrats are not saying much about health care this week, clearing the stage for President Obama to focus on the plight of the middle class in Wednesday’s State of the Union address. Behind the scenes, Democratic leaders continue to weigh how to break the impasse that has stalled health care overhaul legislation ... But for now, Democrats are trying to reduce the political tension the health care debate has created in Washington and around the nation. "

NYT reports serious consideration given to passing Senate bill with additional compromises passed through budget reconciliation: "... it may be the only route available to win passage of the sort of ambitious overhaul that he has pressed as his top domestic priority. And the White House and Congressional leaders have known all along that they might need to employ the tactic to finish a health bill."

Ezra Klein adds: "There are four major compromises that the health-care bill probably needs in order to move forward: The excise tax has to be softened, the subsidies need to be increased, the exchanges need to become federally-regulated, and the abortion language needs to be tweaked. The experts I spoke to said that the subsidies and the excise tax were no problem for reconciliation. Abortion and exchanges are less clear ... But what choice do Democrats have but to try?"

HCAN backs reconciliation strategy: "The House and Senate have already passed health care bills. The Senate bill has serious flaws that need to be fixed before the House can move forward, and the way to fix them is through reconciliation. Bringing majority rule back to the Senate and delivering the change the country voted for means getting back to the history of the Senate and getting the job done right. Call your Members of Congress today by ... dialing 1-877-264-4226."

The Treatment's Harold Pollack pleads with Congress to stick with comprehensive reform: "If the House and Senate bills are abandoned ... We will not soon see serious delivery reforms or cost-control measures. Whether the issue is high-cost insurance plans, bundled payments, comparative effectiveness research, overpayments to medical device makers, drug companies, specialists, and Medicare Advantage plans, there will be very limited political will to match what is in the current bills."

Sen. Ben Nelson says national health insurance exchange is a "dealbreaker" for him, but notes reconciliation makes that moot: "Democrats are trying to write a companion bill to the full Senate legislation that would need only 51 votes in the Senate. That means Nelson's threat to vote against any bill with a national exchange doesn't mean much. Nelson knows it, too."

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