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.
Wall St. Reform Tops Agenda As Congress Returns
No movement in bipartisan talks during congressional recess. CQ: "...lawmakers are returning to Capitol Hill this week no closer to a deal on legislation ... Senate Banking Chairman Christopher J. Dodd continues to negotiate behind the scenes with Richard C. Shelby of Alabama ... But if the Connecticut Democrat is too stingy with concessions, he could stoke GOP opposition and upset moderate members of his own party ... Republicans face the possibility of being tarred as captives of an unpopular banking industry if they oppose overhaul measures ahead of the fall elections."
The Hill runs down the myriad of fights left to be had: "The National Automobile Dealers Association (NADA) is supporting an amendment from Sen. Sam Brownback (R-Kan.) to exempt auto dealers from a new consumer protection office. Sen. Sherrod Brown (D-Ohio) had an amendment before the markup that would limit banks from having large ownership stakes in clearinghouses that act as middleman between buyers and sellers of derivatives.Big banks are concerned about new regulations that could limit proprietary trading ... Real estate and financial interests argue [against] a new requirement for lenders to retain 5 percent of risk in asset-backed securities..."
Volcker rule considered bargaining chip. CQ: "The bill’s ban on proprietary trading by banks ... is also seen as subject to change ... Dodd is not expected to go to the mat to include it — and if he gives it up, it could be seen as a significant concession to Republicans."
Congressional progressives want to dare GOP to oppose strong reform. Politico: "A big focus of their push will be strengthening the CFPA ... Liberals are also interested in strengthening the fiduciary duties imposed on broker dealers, new regulations on derivatives and a stronger version of the so-called Volcker rule, which prohibits commercial banks from proprietary trading or making investments in hedge funds and private equity funds."
Baseline Scenarios' Simon Johnson wants to fix the Dodd financial reform bill with the Kanjorski amendment: "This amendment will allow federal regulators to preemptively break up large financial institutions that — for any reason — pose a threat to financial or economic stability in the United States."
NYT's Paul Krugman says Georgia's copious bank failures speak to need for stronger regulations: "Why didn’t the same thing happen in Texas? The most likely answer, surprisingly, is that Texas had strong consumer-protection regulation ... it doesn’t seem to have anything to do with the issues that have dominated debates about banking reform. For example, many observers have blamed complex financial derivatives for the crisis. But Georgia banks blew themselves up with old-fashioned loans gone bad ... it’s a caution against silver-bullet views of reform, the idea that cracking down on just one thing — in particular, breaking up big banks — will solve our problems."
"Financial Innovation" is actually "untested, dangerous experimentation" according to new report. Reuters' Felix Salmon: "Eventually, a test comes along: the world behaves in a way that no one had expected, and the new securities prove to be less attractive than the traditional securities they replaced. When that happens, demand for them plunges, their price falls dramatically, and enormous losses ensue. This narrative has been played out many times..."
Dems Move To Restore Jobless Aid Today
Senate vote to end filibuster, restore jobless aid, scheduled for today. W. Post: "Because of the impasse, beginning April 5 more than 200,000 unemployed people .. could not apply for additional benefits from the federal program ... Republicans are largely united in their stand, and the vast majority are expected to vote Monday against [ending the filibuster] ... Jim Manley, a spokesman for Senate Majority Leader Harry M. Reid [said] many economists think jobless benefits have a stimulative effect that would be muffled if they were offset ... [GOP Sen. Tom] Coburn vowed to try to block any spending bill the rest of the year that isn't offset, which will include the $33 billion supplemental measure the Pentagon has requested to pay for operations in Iraq and Afghanistan."
Congressional leaders plan "series of bills" to promote jobs for rest of year. The Hill: "...a mix of small business tax incentives and loan and access-to-capital programs ..."
What was that about businesses paralyzed by uncertainty? Bloomberg reports the opposite: "Companies from Tiffany & Co. to Home Depot Inc. are restocking shelves in a move that will boost economic growth and may keep the recovery on track through 2010."
Decision Nears On Pushing Climate Bill
Time ticking on Senate climate bill. The Hill: "Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) plan to unveil their long-awaited energy and climate bill the week of April 19 ... they have just weeks to build momentum and show Majority Leader Harry Reid (D-Nev.) that it has a strong chance of surpassing 60 votes ... 'Reid can make the go or no-go decision no later than mid-May in practical terms,' said [energy analyst] Kevin Book ... Book doesn’t believe that Reid needs a guarantee of more than 60 votes to put the bill on the floor, but thinks the majority leader will need evidence of strong prospects."
Cap-and-trade helping EU states balance budgets. NYT: "According to an internal working paper released with little fanfare last week by the European Commission, E.U. member states stand to make €26 billion annually by 2020 through regular sales ... of emissions permits ... could be one of the ways governments balance their books in the aftermath of the largest budgetary deterioration the Union has experienced. Such revenues could play a similar role in the United States..."
U.S. threatens to deny climate aid to countries that reject Copenhagen Accord. Change.org's Juan-Pablo Velez: "The Obama administration has just announced that it will be denying climate aid to Bolivia and Ecuador for their boycott ... This is not inherently a bad thing: the accord won't save the planet, but at least it's a start ... However, given the deep split between developed and developing countries, critics say this move could prove counter-productive..."
Tax Reform On The Horizon
Former Sen. Tom Daschle looking to shape bipartisan tax reform before Bush tax cuts expire this year. CQ: "Daschle has emerged as an ally of Democratic Sen. Ron Wyden of Oregon and Republican Sen. Judd Gregg of New Hampshire in promoting a broad tax overhaul as a way to spur economic growth. They would like to broaden the tax base, eliminate some write-offs and reduce rates in ways similar to changes made in 1986 ... [Daschle] is hosting an April 14 panel discussion on a tax overhaul ... Two days later, Wyden and Gregg will present their case to a task force President Obama set up to deal with tax simplification and fairness."
President Obama reminds voters of the tax cuts coming their way: "So far, Americans who have filed their taxes have discovered that the average refund is up nearly ten percent this year — to an all-time high of about $3,000. This is due in large part to the Recovery Act."
Will China Backtrack On Currency Shift?
Rare month of trade deficit for China prompts argument to maintain currency manipulation. WSH: "China ran its first monthly trade deficit in six years in March, data issued Saturday show, a development that, while likely temporary, was quickly seized on by the nation's commerce ministry to argue against the need to revalue the country's currency."
Curious Capitalist's Michael Schuman says the argument for currency reform does not change: "...there is widespread agreement among economists that the March deficit is not an indication that Chinese exports are becoming less competitive ... The deficit was caused by an unusually large level of imports ... especially of the raw materials needed to fuel China's recession-busting infrastructure binge. However, investment in those infrastructure programs is expected to taper off as 2010 progresses, while recovering demand in the U.S. will likely lead to healthier Chinese exports – meaning China's trade balance will quickly return to a surplus."
