GOP Leaders Side With Wall Street, Against Reform
Senate GOP leader plants flag against Dodd bill. NYT: "The Senate Republican leader, Mitch McConnell of Kentucky, criticized the Democrats’ plans to regulate Wall Street as arrogant and partisan, echoing the recent health care fight in which he accused Democrats of carrying out a government takeover ... Both the White House and Congressional Democrats quickly fired back, accusing Republicans of trying to prevent tougher policing of Wall Street."
Conservative strategy is to equate cracking down on Wall Street with bailing out Wall Street ... while on Wall Street. The Hill: "House Republican Conference Chairman Mike Pence (Ind.), in a speech to New York hedge funds, called Democratic financial bills 'TARP II,' and said they would lead to future bailouts..."
HuffPost's Chris Harris notes McConnell statement also followed meeting with hedge fund managers: "After listening to 'numerous complaints the executives have with the bill,' the GOP lawmakers reportedly assured the bankers that Republicans would be their ally in the fight."
WH Dep. Comm. Dir. Jen Psaki counters conservative "bailout" talking point on official blog: "What they won’t tell you is that they are taking their marching orders from a partisan political consultant who has told them that the best way to oppose real reform is to link it to the bank bailouts ... The Senate bill explicitly mandates that a large financial firm that faces failure will be allowed to fail, and it explicitly prohibits the use of any funds to 'bail out' a failing firm."
Robert Reich offers policy response to conservative attack: "Smoke the Republicans out. Respond to their criticism that the Dodd bill leaves open the possibility that some future bank will become too big to fail by amending the bill to limit the size of banks to $100 billion of assets — so no bank can become too big, period. Challenge the Republicans to join you in voting for the amendment."
W. Post's Steven Pearlstein knocks Geithner for failing to articulate cause of crisis, leading to weak reform: "Geithner's view is that it is naive to think that we are somehow going to prevent the next crisis by ridding Wall Street executives of their animal spirits ... You give up trying to eradicate a Wall Street culture that celebrates and rewards people who find clever new ways to mislead investors, circumvent regulation, stimulate speculation and take advantage of customers and trading counterparties."
President to meet with top Dem and GOP leaders this morning on Wall Street reform. Reuters: "The White House meeting, at 10:45 a.m. will include Senate Republican leader Mitch McConnell and House Republican leader John Boehner. Obama's Democrats will be represented by Senate Majority Leader Harry Reid, House of Representatives Speaker Nancy Pelosi and House Democratic leader Steny Hoyer."
Senate Ag Chair Blanche Lincoln unexpectedly breaks with GOP counterpart, offers tough derivatives reform bill, picks up GOP support. NYT: "The Democratic chairwoman of the Senate Agriculture Committee said on Tuesday that she would propose legislation requiring nearly all users of derivative contracts to trade on centralized exchanges and possibly ordering banks to segregate their business in derivatives into separate subsidiaries. The outlines of the proposal drew praise from one Republican Senator, Olympia J. Snowe of Maine ..."
TPMDC's Brian Beutler credits populist primary challenge for altering Lincoln's approach: "With the plug pulled on [bipartisan] negotiations, though, Lincoln actually went ahead and proposed stiffer regulations than other, more progressive Democrats did. And the upshot: she still gets to portray herself as somebody who bucks her party. Who says primaries don't get results?"
IMF exploring bank tax coordination. W. Post: "Elements of the idea, which would force financial institutions to set aside more capital based on a measure of the 'systemic risk' they pose to the larger economy, have been included in different proposals made in the United States and Europe. But those financial reform discussions also have included a host of other ideas -- from a broad bank tax endorsed by the leaders of France and Germany to the 'crisis responsibility fee' proposed by President Obama .... Privately, IMF officials have expressed concern that such proposals fail to address what they see as a central obligation -- identifying institutions that pose systemic danger and either regulating them better or discouraging them from growing too big and complex in the first place."
NYT explores how Congress has become a bank lobbyist factory: "An analysis by Public Citizen found that at least 70 former members of Congress were lobbying for Wall Street and the financial services sector last year, including two former Senate majority leaders (Trent Lott and Bob Dole), two former House majority leaders (Richard A. Gephardt and Dick Armey) and a former House speaker (J. Dennis Hastert). In addition to the lawmakers, data from the Center for Responsive Politics counted 56 former Congressional aides on the Senate or House banking committees who went on to use their expertise to lobby for the financial sector."
Former chief of failed Washington Mutual bank whines of unfair government treatment. NYT: "'I just don’t think the company was treated in the same equal-handed, fair manner that all other financial institutions were,' Mr. Killinger told Mr. Levin, the chairman of the [Senate investigations] subcommittee, adding that 'those that were part of the inner circle and were ‘"too clubby to fail," ' were allowed to survive."
OurFuture.org Zach Carter counters Killinger: "WaMu was exactly the kind of company that didn't deserve to participate in rescue operations ... a textbook predatory lender that served no other useful social purpose."
Bank for America shifts on mortgage cramdown. HuffPost's Shahien Nasiripour: "Bank of America, the nation's largest lender and its biggest bank by assets, now supports changing the law to give federal judges the power to modify mortgages in bankruptcy. The bank joins Citigroup ... 'Maybe we can revisit this,' [Rep. Barney] Frank said."
Conservative Tax Day Class Warfare Misfires
NYT's David Leonhardt debunks the right-wing class warfare talking point falsely suggests half the nation doesn't pay taxes: "Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and capital gains taxes, among others. And, of course, people pay state and local taxes, too. Even if the discussion is restricted to federal taxes (for which the statistics are better) ... about 10 percent of all households pay no net federal taxes."
WH report tallies up the effect of the middle-class tax cuts from the Recovery Act. USA Today: "The report ... says the law has delivered more than $200 billion in tax relief and other direct benefits, mostly to middle- and lower-income families. More than $70 billion was paid in the past three months."
Bernanke to remind Congress today unemployment will not come down soon. AP: "...Bernanke is likely to warn again that the pace of the recovery will be sluggish because Americans still face formidable headwinds: high unemployment, stagnant wages, weak home values, rising foreclosures and hard-to-get credit."
Tricky Climate Politics
LAT explores tricky politics around possible carbon tax on motor fuels as part of climate compromise bill: "It is shaping up as a critical but controversial piece in the efforts by [GOP Sen. Lindsey] Graham, Sen. Joe Lieberman (I-Conn.) and Sen. John Kerry (D-Mass.) to write a climate bill that moderate Republicans could support ... the oil industry has spent heavily in recent years to fight taxes ... In this case, though, several oil companies like the tax because it figures to cost them far less than other proposals to reduce greenhouse gas emissions ... some Democrats ... fear the political specter of increasing gasoline prices as the national average cost of gasoline is expected to crest $3 a gallon this summer ...
Sources say the resistance extends to some Obama administration officials ... it's still unclear whether major oil companies and their trade group, the American Petroleum Institute, will explicitly endorse the legislation or at least agree not to fund an ad campaign opposing it."
Senate climate negotiators have not yet resolved key nuclear issue. CQ: "...the lead authors still have not agreed on a central provision that would require utilities to generate some of their power from sources that do not emit greenhouse gases ... [Dem Sen. Jeff] Bingaman’s bill would not count nuclear power toward the renewable mandate — and Graham suggested that would be a deal-breaker for him ... Graham said he also would be willing to accept a renewable requirement more ambitious than the 15 percent target if nuclear production could also get a mandate."
Grist's Lester Brown writes that our tax dollars are subsidizing environmental destruction: "Each year the world's taxpayers provide at least $700 billion in subsidies for environmentally destructive activities, such as fossil fuel burning, overpumping aquifers, clearcutting forests, and overfishing. As the Earth Council study Subsidizing Unsustainable Development observes, 'There's something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction.'"
What's the point of training for green jobs if there are no green jobs, asks Colorlines' Yvonne Liu: "There are no firm numbers on how many newly trained green workers are still jobless. But stories abound of programs that turn out workers with new, promising skills—in solar panel installation and weatherization, in places like Seattle and Chicago—and who nonetheless can’t find jobs."
Delicate Currency Dance
President Obama calls yuan "undervalued" while respecting Chinese sovereignty. Bloomberg quotes: "It’s my estimation that the renminbi is undervalued and that China’s own decision in previous years to begin to move towards a more market-oriented approach is the right one ... China rightly sees the issue of currency as a sovereign issue ... I think they are resistant to international pressure when it comes to them making decisions on their currency policy and monetary policy."
Chinese President publicly rejects "outside pressure," but seen as still moving towards shift. W. Post: "Hu ... told President Obama that China is reviewing its currency policy. But he stressed that any modification 'will not be advanced by outside pressure,' ... Jin Canrong, deputy dean of the School of International Studies in Beijng, said Hu's comments establish the political groundwork at home in China for an eventual revaluation by telling his 'domestic audience' that China won't shift its policy to please foreigners but for its own reasons."
NYT edit board approves of soft-touch approach for now but calls for ramped up multilateral pressure on China: "The best forum is coming in June when the leaders of the world’s biggest economies gather at the Group of 20 meeting in Toronto. They need to use that occasion to tell China, in no uncertain terms, that it cannot keep building up its own economy by undercutting the rest of the world’s exports."
Former Blue Dogs-turned-lobbyists start nonprofit to further Blue Dog goals, reports Roll Call.
Will AEI fire Norm Ornstein too, after this W. Post op-ed? "This president is a mainstream, pragmatic moderate, operating in the center of American politics; center-left, perhaps, but not left of center. The most radical president in American history? Does Newt Gingrich, a PhD in history, really believe that [expletive]?"