"The Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck the Economy" continues, with Peterson Foundation CEO David Walker confronted on video.
Will GOP Filibuster Wall Street Reform On Monday?
Sen. Maj. Leader Harry Reid schedules a Monday cloture vote, requiring 60 to begin consideration of Dodd financial reform bill. Politico: "...if no Republican cracks, and the bill goes down, Reid is calculating that would be politically devastating for the GOP ... It’s also a tactic to put pressure on the bipartisan negotiations now going on — and there were signs Thursday the ploy might be working ... applying a lesson learned from the interminable negotiations over health care reform, the Democratic leaders are not in the mood to give Republicans the weeks for further negotiations they have demanded. 'I’m not going to waste any more time of the American people until they come up with some agreement,' Reid said."
GOP senators bent out of shape that Dodd won't further weaken consumer protections. The Hill: "A Republican source said a bipartisan deal appeared less likely after Shelby gave colleagues an update on the talks Wednesday afternoon. 'Some people’s jaws dropped when they heard what Shelby had to say,' said the GOP source. Shelby informed colleagues that Dodd has declined his requests to take enforcement power away from a Consumer Financial Protection Bureau or to give prudential regulators oversight of the consumer-allied bureau."
GOP negotiators may initially filibuster but keep talks going. Politico: "[Sen. Richard Shelby] said he would recommend that all Republicans oppose the first key test vote, known as a motion to proceed — a move that would prevent the Senate from debating the bill. Shelby said he expects the Senate to eventually pass a bill, but 'it might take a series of votes.'"
Ag Cmte derivatives bill may not be directly folded into the Dodd bill, sparking intra-party friction. Roll Call: "After Dodd suggested that her measure may not be folded into his bill but would have to battle it out on the floor as a stand-alone amendment, Lincoln 'threw a fit,' one source said ... Reid told Lincoln to work out her differences with Sen. Jack Reed ... sources said Lincoln would prefer to work with Dodd on a chairman-to-chairman level ... Fans of Lincoln’s bill came to her aid at Thursday’s regular Democratic Policy Committee lunch with harsh criticisms for Dodd and Reid ... Both Lincoln and Dodd said they believe they will be able to come up with an agreement of some sort ..."
Wall Streeters react positively to president's financial reform speech. Bloomberg: "Robert Nichols, president of the Financial Services Forum, an industry group based in Washington, said Obama’s 'rhetoric was a lot more conciliatory' than in the past remarks ... Robert Diamond, president of Barclays Plc, said the administration, Congress and the banking industry are 'working very closely, and very constructively' on the legislation Obama is seeking. 'Strong banks want strong regulation,' ... Peter Solomon ... former vice chairman of Lehman Brothers, said the financial industry will adapt. 'Wall Street is smarter than any regulation or laws, and they’ll figure out how to make profits and they’ll figure out how to adjust,'..."
OurFuture.org's Richard Eskow stresses the President does not need to settle for the Dodd bill: "Obama's comment that both the Senate and House bills 'represent a significant improvement' over the status quo will frustrate a lot of people, too. That's the politician talking: If the weak Dodd bill is the best he can get, he'll still need to declare a great victory in anticipation of November's elections. But there's no reason to expect that this bill really is the best he can get ... demand an up-or-down vote on the Brown/Kaufman SAFE Banking Act ... Sen. Jack Reed's consumer amendment, Bernie Sanders' proposed audit of the Federal Reserve, and the truly bipartisan McCain/Cantwell amendment to reinstate the Glass-Steagall Act are all important."
Baseline Scenario's Simon Johnson urges phone calls to senators in favor of Brown-Kaufman bill to break up the banks: "[Brown-Kaufman] would greatly strengthen the Dodd bill by capping the size and leverage of our biggest banks."
NYT's Paul Krugman backs Dodd bill as "first step," follow by IMF proposal for a "Financial Activity Tax": "We also need to cut finance down to size ... a tax, the fund argues, could 'mitigate excessive risk-taking.' It could also 'tend to reduce the size of the financial sector,' which the fund presents as a good thing ... Ending this state of affairs will hurt the financial industry. So?"
Goldman Sachs gave Dems and GOPers $300K in March, reports Politico: "a sum that far surpasses most other financial institutions’ giving all year."
George Soros says America must face up to the dangers of derivatives, in FT oped: "Whether or not Goldman is guilty, the transaction in question clearly had no social benefit ... This synthetic collateralised debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions."
Dodd tweaks bill to further limit taxpayer exposure to Wall Street failures. CNN: "... explained [Rep. Brad] Sherman, 'when [the FDIC] takes over a defunct entity, they’ll only be able to borrow 90 percent of the value of the assets they’ve taken over so that they have the liquidity to wind that entity up.' ... [CNN's John] King quickly sought to clarify: The FDIC 'cannot use more taxpayers’ money than that firm is worth? So that if it had to sell the whole thing the day after tomorrow, the taxpayers would not lose a dime?' 'Exactly,' replied Sherman."
Climate Bill May Not Be Introduced On Monday
Senate trio may scrap carbon fee on motor fuels, push back Monday unveiling of bill. CQ: "... the 'linked carbon fee' idea has come under attack as a new gas tax on consumers. Graham said the three senators decided this week to scrap that approach and are now exploring different options ... now that the co-authors are reworking core components of their proposal, plans to circulate legislative language to colleagues and industry leaders have been delayed ... If the electric utility [lobby] does not pledge its support over the weekend, Graham said, 'then we’re not going to do it' [on Monday] .. 'They have to be able to convince my fellow senators that the ratepayers are not going to get a spike in their bill.'"
350.org's Bill McKibben rips climate compromises in W. Post oped: "The bill's emission reductions are weakened by offsets and loopholes -- and to win support for even those concessions, it offers the fossil-fuel industries a glittering collection of door prizes."
News that Sen. Reid will prioritize immigration reform poorly received by lead Senate climate negotiators. The Hill: "'It destroys the ability to do something like energy and climate,' [Sen. Lindsey] Graham told reporters in the Capitol. He called the suggestion to move on immigration first 'the ultimate CYA politics' ... The immigration bill, Graham said, is far from ready. 'What am I supposed to do, write an immigration bill between now and Monday with Chuck [Schumer]?' ... Kerry and Lieberman separately told reporters that Reid was committed to bringing their legislation to the floor, but they did not appear to have received a firm commitment on timing."
Last month, Graham was upset at weak WH support for immigration reform. Politico: "Yet in March, Graham [said] that Obama needed to push harder on immigration reform. 'At the end of the day, the president needs to step it up a little bit,' Graham said at the time. 'One line in the State of the Union is not going to do it.'"
Reid suggests no decisions have been made. CQ: "'I’m not going to say one is more important than the other,' Reid said Thursday. 'And to further complicate my life, we have the Supreme Court nomination that’s going to take up a lot of time.'"
AFL-CIO v. Chamber of Commerce on including "Buy America" provision in climate bill. Politico: "AFL-CIO President Richard Trumka ... predicted that 4 million to 5 million 'green jobs' could emerge ... Trumka is pushing for the legislation to include a 'buy America' section that would ensure those new jobs stay within U.S. borders ... [Chamber of Commerce's Bruce] Josten warned that a buy America provision would hamstring economic growth and ultimately hurt the U.S."
The Loop 21's Devona Walker asks after 8 million jobs gone, and the industries that usually pull us out of recessions crippled, will the future be green?: "Economists say policy makers are already reconciling themselves with an economy less dependent on consumption by focusing their efforts on increasing exports which means retraining many of those eight million workers (who lost their jobs) to transition into new job sectors ... The one bright spot in the jobs picture is the development of green jobs ... That industry, for all practical purposes, is in its infancy. Workers aren’t even trained yet for the sector, so, it’s going to take some time."
Cmte Passes Austerity Budget .. With Reconciliation Provision
Senate Budget Cmte clears budget with deep cuts, but provides opening for tax reforms by simple majority vote. W. Post: " Under the committee's proposal, the deficit would hover around $1.3 trillion in the fiscal year that begins in October but fall to $545 billion by 2015 -- nearly $250 billion lower than Obama's proposed target ... Covering the [alternative minimum tax reform] provisions alone would require hundreds of billions of dollars in new taxes or spending cuts ... [The reconciliation instructions] could be used to raise the legal debt limit and to extend a variety of middle-class tax cuts enacted during the Bush administration..."
What might get passed by reconciliation? Bloomberg: "'I have some ideas,' said Baucus, adding 'we don’t even have a budget yet' and 'we’re getting way ahead of ourselves.' Democrats were forced to allow the estate tax on multimillionaires to lapse this year after they were unable to produce the 60 votes needed to extend it."
Health reform law projected to strengthen Medicare trust fund. LAT: "[A new report by] independent actuaries at the U.S. Department of Health and Human Services ... suggests that the Medicare program will remain viable until 2029 – longer than some earlier projections. Before passage of the healthcare overhaul, Medicare had been projected to slip into the red in 2017."