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.
Split Reaction From Dems. Scorn From GOPers. Another Day in Washington.
No quick embrace of the budget on Capitol Hill. W. Post: "Democrats are enthusiastic about another jobs bill but anxious about additional spending. On Monday, Democratic leaders offered muted support for the budget proposal ... Republicans, however, were brutal in their assessment, saying that the spending plan offers 'the illusion of restraint,' in the words of Rep. Paul D. Ryan (Wis.)..."
"House and Senate Democratic leaders have yet to back any spending freeze," notes The Hill.
Some conservatives have a budget plan, and it's frightening: "Some GOP lawmakers also have endorsed Ryan's alternative budget plan, which would wipe out deficits in part by privatizing Social Security and replacing traditional Medicare benefits with an insurance voucher for people age 55 and older ... 'At least we're offering a plan,' [Ryan] said. 'They're offering a commission.' Uh, Mr. Ryan, better check with the Senate Minority Leader Mitch McConnell, who just said: "I like the commission idea ... a spending reduction commission."
Ezra Klein on Ryan's "violent" budget: "... Ryan's budget saves money ... not through privatization, though everything does get privatized. It's through firm, federal cost controls. The privatization itself actually costs money ... The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they'd need to either cut back on how comprehensive their insurance is or how much health-care they purchase. [And] seniors trying to purchase a plan equivalent to Medicare would pay more for it on the private market ... this is rationing."
Classic "centrist" hypocrisy from Sen. Blanche Lincoln, looking out for Big Ag. McClatchy quotes: "I intend to support measures to reduce the deficit but fight many of the president's proposed cuts that will harm farmers, ranchers and rural communities." She's not alone. Bloomberg: "Some of the proposed cutbacks produced immediate protests from lawmakers, including Republicans who have hammered away at the administration for what they contend has been excessive spending."
Paul Krugman calls the budget "depressing": "...while the freeze won't be a big deal, it will depress demand during a period in which, according to the administration's own projections, unemployment will stay very high. What we're witnessing is an awesome national failure."
OurFuture.org's Isaiah J. Poole described it as opting for "timidity instead of transformation": "There is much to be applauded in the Obama administration's budget. ... But when it comes to the kind of game-changing, transformational leadership that the nation needs to get its economy on track — and to sensibly address the federal debt over the long term — this budget proposal only offers a shadow of what we actually need."
Attempt To Extend Recovery Act Outside Of Freeze
CNNMoney.com reports President looking to extend key provisions in the Recovery Act beyond this year, separate from the proposed freeze: "The president's $3.8 trillion budget for fiscal 2011, unveiled Monday, calls for giving states more money for Medicaid and infrastructure projects, as well as renewing tax breaks for workers, small businesses and municipalities issuing bonds. It also requests additional funding for Obama's educational reform initiative, Race to the Top. All these were key provisions in the $862 billion American Recovery and Reinvestment Act ... Many of its measures are set to run out this year ... By including the provisions in the federal spending plan, the administration is able to keep the Recovery Act alive without having to pass a separate measure, which will likely spark a lot of controversy. As long as they make it into the fiscal 2011 budget, they will be allowed to continue in the future despite a promised cap in federal spending."
President to prod Senate on TARP shift to help small biz. CQ: "President Obama on Tuesday will roll out his proposal to shift $30 billion in financial bailout funding to community banks for lending to small businesses, and push for it to be quickly included in jobs legislation being assembled in the Senate."
McClatchy on Obama's decidedly un-rosy jobs scenario: "His head of the Council of Economic Advisers, Christina Romer, said Monday that she thought the jobless rate would stand at 9.8 percent at the close of this year. It won't feel much better next year. Romer expects an unemployment rate of 8.9 percent late in 2011 and 7.9 percent in late 2012, the final full year of Obama's term. More than 7 million Americans have lost their jobs since the recession began in December 2007. Romer's assumptions suggest rough sledding for some time to come."
Deficit Dodos
James Kwak mocks Republican leaders for creating the deficit, then attacking Obama for it: "...what is it in the president's proposed budget that the Republicans are aiming at? The plan to let the Bush tax cuts lapse for people making more than $250,000 per year. In other words, the problem with the Obama budget is that the deficits are too high, and the solution is to cut taxes. Huh? ... The budget was in surplus when President Clinton left office ... The 2001 and 2003 Bush tax cuts and the unfunded Medicare prescription drug benefit created the large deficits of the Bush era. ...Yet somehow the Republicans have tried-successfully!-to spin our current and projected deficits as the result of 'more government spending,' putting the Democrats on the defensive. And unfortunately, the result is the Obama administration buying into the Republican attack line — that government spending must be reduced..."
Salon.com's Michael Lind rips "deficit dodos" for drawing ridiculous parallels between governments and households: "In the deficit dodo universe, no family should ever take out a loan to purchase a family car. Why? Well, according to the deficit dodos, borrowing is bad, because the interest payments on loans represent money that could be used for something else. That's true. But the real question is whether it makes sense to have the use of the family car right now, in return for modest monthly payments over time..."
Ezra Klein notes what is projected to reduce the deficit is not cuts, but recovery and growth: "The giant deficits that greeted Obama were not really his fault. The bottom fell out of the tax base ... And the same goes for the return to normalcy. The spending freeze and a handful of other policies might shave the deficit from about 5 percent of GDP to 4 percent of GDP. But what's bringing it down from 10 percent of GDP is the expected economic recovery."
How Well Did Obama Wield The Scalpel?
W. Post sees mostly "small bites" in Obama's spending cuts: "[The budget cuts] a few big-ticket items. It would halt production of the C-17 cargo plane, end NASA's program for a return to the moon and reduce payments to wealthy farmers ... [But the majority of reductions would come in small bites -- preventing low-income workers from receiving the earned-income tax credit in advance, cutting back the Army Corps of Engineers' duties, eliminating duplicative programs, such as an $18 million brownfields initiative. 'At first glance, this very much fits the notion of a scalpel,' said John Irons, a budget expert at the left-leaning Economic Policy Institute. 'It looks like there's a big boost to the areas of the budget that would seem to be sound investments in the future. And it looks like they're nicking the other programs here and there to pay for it.'"
LAT lists the items Obama is trying to cut again, after being rebuffed by Congress: "The familiar programs on the list this year include the C-17 cargo jet, a program to restore polluted industrial sites, a program for reclaimed coal mines and various scholarship programs."
Obama looks to increase taxes on corporations and wealthy Americans. Bloomberg: "The Obama administration seeks a $970 billion tax increase over the next decade on Americans earning more than $200,000 and wants to take in an additional $400 billion from businesses even as it retools a proposed crackdown on international tax-avoidance techniques ... [Sen. Max] Baucus reiterated his preference for delaying action on Obama’s international tax reforms until Congress tackles a more comprehensive overhaul of the tax laws."
House Leaders Say: Freeze Military Spending Too
House budget to go after military pork, despite WH plan to exempt Defense from freeze. Bloomberg: "House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said he would abide by the spending freeze for domestic programs while seeking cuts in politically sensitive defense accounts. 'We will also not exempt any department or activity from review, including foreign aid and the Pentagon because none of them are without waste,' he said. Such additional cuts may be a tough sell in the Senate..."
Slate's Fred Kaplan says the Obama administration has proposed the largest defense budget since World War II. At TAPPED, Paul Waldman on what the military budget means: "...when it comes to defense, we can nibble around the edges -- cut an unneeded airplane here, an outdated weapons system there. But when even a Democratic president talks about freezing 'nondefense discretionary spending,' as though freezing defense discretionary spending is so absurd it need not even be contemplated, that line is going to continue to go up."
The Daily Beast's Matthew Yglesias laments that no one will talk about the military budget: "The problem here is that while targeting defense waste always has some support, there are few politicians willing to question the real driver of Pentagon cost -- the American military's global mission."
No Headway On Health Care In Budget
Swampland's Kate Pickert sees the WH downplaying health care as a deficit-cutter: "...what are we to discern from Peter Orszag's blog post introducing the 2011 budget? Health care reform was touted as 'the key to our long-term fiscal future,' but it was not mentioned until the second to the last paragraph of Orszag's post – hardly prominent placement for what was until recently the President's signature domestic priority."
WSJ notes certain budget items do not assume quick passage of health care reform: The blueprint includes several specific provisions originally contained in one of the versions passed by Congress. The biggest is a $25.5 billion increase in Medicaid funding to appease nervous governors who had already factored that money into their budgets. There’s also $290 million in funding for community health centers. They cater to low-income areas and were slated to receive a big spending boost under the health bills."
Sen. Specter urges use of budget reconciliation to pass a modified Senate bill, boosting prospects. HuffPost: "Specter's remarks could go some way towards alleviating angst among House Democrats who have been hesitant to proceed with health care reform without an explicit guarantee from the Senate that it will make additional changes to the legislative language. There was a rumor that 51 Democratic Senators were crafting a pledge to use reconciliation once the House passed the Senate bill, but leadership aides said it was false. Still, Democrats on the Hill are noticeably more confident about legislation's prospects today than they were just one week ago."
Mixed Reaction On Clean Energy Budget
Mixed reviews on clean energy investment. W. Post: "Marchant Wentworth of the Union of Concerned Scientists praised the proposed reductions in subsidies for fossil fuel producers and the increase for energy research and development ... But he lamented a new element intended to back up Obama's call for a bipartisan approach to energy reform: a tripling of the loan guarantees for nuclear power companies looking at new plants ... 'We would hate to see these loan guarantees for nuclear power suck all the money out of the system. We want to be sure there's enough left over for truly renewable energy.' The reaction in the transportation community was less equivocal ... They took heart that the proposed jobs bill will probably include billions more in infrastructure spending. And they praised the proposal for a new infrastructure fund, an echo of a plan Obama campaigned on to depoliticize infrastructure projects."
Earth2Tech sizes up the clean energy budget: "...there’s direct support for the renewable energy, carbon capture and smart grid industries, through loan guarantees, research and development project funding and other programs. Glaringly absent is the $646 billion in revenues that last year’s budget assumed would come from a program for limiting and trading carbon allowances, signaling dwindling confidence that the Senate will pass a bill with a cap and trade system this year." Treehugger downplays absence of carbon cap revenue: "Obama has included the outline for the program still--but none of the projected revenue it would generate for the federal government ... nothing to get excited about..."
Grist's Daniel Weiss questions nuclear strategy: "Tripling of the loan guarantees is also dubious political strategy because it provides huge subsidies for nuclear power without securing the support of pro-nuclear senators for comprehensive, bipartisan global warming pollution reduction legislation."
EPA gets money to tackle carbon, pressuring Congress. The Hill: "The White House budget proposal unveiled Monday reminds Congress that EPA is prepared to regulate greenhouse gases under its existing authority if lawmakers do not craft a new climate change law. EPA’s fiscal year 2011 budget plan seeks $43.5 million in new funding for climate-related regulatory efforts..."
Wind energy boom isn't yet creating jobs, but stimulus prevented losses. Climate bill seen as key. LAT: "Several factors accounted for the slow start, some of them linked to weakness in the overall economy. Electric power demand fell nationwide last year. Electricity from coal and natural gas is still by and large cheaper than wind or solar power. Renewable energy companies, faced with limited demand, often used parts and equipment in stock or imported renewable technology instead of building turbines or solar cells domestically. Industry analysts and energy company executives said job growth is also hampered by lingering uncertainties in federal energy policy. Those include questions about when or whether existing tax breaks will expire and whether the Senate will pass a climate bill that would make fossil fuels more expensive -- and renewable energy more competitive."
NYT says the Copenhagen Accord "passed its first test" but nations' emissions goal are too weak: "...countries responsible for the bulk of climate-altering pollution formally submitted their emission reduction plans, meeting the agreement’s Jan. 31 deadline. Most major nations — including the United States, the 27 nations of the European Union, China, India, Japan and Brazil — restated earlier pledges to curb emissions by 2020, some by promising absolute cuts, others by reducing the rate of increase from a business-as-usual curve ... Analysts said that even if all nations met their promises, the world would still be on a path to exceed the Copenhagen agreement’s central goal of limiting global warming to less than 3.6 degrees above the pre-industrial era."
Is Dodd Out To Kill Glass-Steagall 2?
Swampland's Joe Klein rips Dodd for reported rebuff of Obama's bank reforms: "There are some bipartisan gestures worth making ... But the Dodd cave not only sacrifices good law, but also good politics. The good law part of it is the most important: banks shouldn't be allowed to play private Ponzi-games (like credit-default swaps on mortgage packages) with their depositors' money--that's the so-called Volcker rule. ... But Chris Dodd wants his legacy. Or, perhaps, he just wants a nice, cushy bank job after he retires."
Pollster Frank Luntz pens strategy memo to kill reform. HuffPost quotes from memo: "Washington's incompetence is the common ground on which you can build support ... the single best way to kill any legislation is to link it to the Big Bank Bailout."
Paul Volcker to testify today, as anti-populist Senators bristle at Obama's embrace of his bank reforms. NYT: "The new White House approach has already prompted the Senate panel, led by Senator Christopher J. Dodd, Democrat of Connecticut, to interrupt [bipartisan] negotiations ... Republicans on the committee said Mr. Obama’s call for a bank tax was a political response to the unexpected loss of a Massachusetts Senate seat ... 'I think everybody watching understands that this was a political undertaking and not necessarily a substance undertaking,' [Sen. Bob Corker] said. 'This is a soak-the-rich populist grab.' ... 'I think it’s confused the issue considerably, because [Obama has] basically fanned the fires of populism and in a lot of instances, populism doesn’t give you either good regulatory activity or strong markets,' [Sen. Judd] Gregg said.
America Still Blue
New Gallup poll finds "Despite GOP Gains, Most States Remain Blue": "Nationwide, party support shifted in a slightly more Republican direction in 2009 after a historically strong Democratic year in 2008. Overall, 49% of Americans in 2009 identified as Democrats or said they were independent but leaned to the Democratic Party, while 41% identified as Republicans or were Republican-leaning independents. That 8-point Democratic advantage compares to a 12-point, 52% to 40%, Democratic advantage in 2008."
Kos stresses there are only 5 "red" states in Gallup's poll: "Only four states are solidly red: The Land of Palin, Idaho, Wyoming, and Utah. Mississippi leaned Red. On the other hand, there are 23 solidly Democratic states, and another 10 are leaning Democratic ... Of course, this does't translate directly to electoral politics, with huge swaths of the country preferring the Democrats in theory, but pulling the levels for Republicans. That is as much a failure of Democrats to ensure their core constituencies turn out to the polls (younger and browner voters), and also a testament of the GOP to win votes based on divisive social issues, rather than substantive economic ones. But this flies directly in the face of the notion that this is a 'center-right' country. It's not."
