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.
Senate Returns To Wall Street Reform, As Revolving Door Swings Wildly
New report details massive revolving door between government and bank lobby. Politico: "The nation’s six largest banks and their trade associations have hired more than 240 former government officials-turned-lobbyists to represent them in the fight over Wall Street reform, according to a new report by several progressive groups. The Service Employees International Union, Campaign for America’s Future and the Public Accountability Initiative will release the report Tuesday ... 202 used to work in Congress, and the rest served in the White House, Treasury Department or government agencies ... The report also estimates that six banks – Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley and Wells Fargo – and their trade organizations have spent about $600 million since the first major federal bailout of Bear Sterns in March 2008. Between 2008 and 2009, the six big banks spent about $69 million..."
As Senate returns to Wall Street reform today, OurFuture.org's Zach Carter lays out what's left to fight for: "Blanche Lincoln's Derivatives Bill ... The Volcker Rule ... Audit The Fed ... Protect Consumers ... Cap Leverage."
Sanders-Dodd fed audit compromise to be voted on by the Senate today reports W. Post.
The Nation's William Greider praises the compromise as a crucial first step: "This is a big deal, much bigger than most imagine. Congress has sputtered for years about the Fed’s imperious secrecy but never found the nerve to do anything ... This victory – if and when it’s complete – is a major marker on the road to much deeper reform of the central bank – its sheltered monetary policy, the concentrated power of the financial system and the cowardly habits of Congress ... More facts will insure that the public does not lose its anger but instead raises its demands."
NYT edit board calls for stronger bill with Volcker rule and strong derivatives reform: "[The Volcker rule] would help ensure that banks do not become so big and interconnected that it’s impossible to effectively manage them in good times or dismantle them in bad times ... Exemptions [for derivatives rules] would make it easier for the banks to game the new rules, tailoring products to be exempted from transparent trading."
SAFER's Jane D'Arista and Gerald Epstein counter argument that Sen. Lincoln's derivatives firewall would decrease transparency: "...the assumption that taking derivatives desks out of banks will make the business less regulated and more leveraged is simply wrong. For one thing, the requirements for prudential oversight under Title VII of the bill will apply standards for capital adequacy, transparency, anti-fraud and anti-manipulation to stand-alone derivatives dealers. But the equally important point is that they couldn't possibly be less regulated and less well capitalized than the bank dealers are now."
Sens. Levin and Merkley confident Volcker rule amendment will get vote. CQ: "The Levin-Merkley amendment would put the Volcker rule into law upon enactment of the bill. The senators said they have the backing of Dodd and the White House."
Rortybomb warns that strong state consumer protections could be weakened: "Keep an eye out for a deal that would allow for pre-emption of state consumer financial protection laws by federal regulators, a rumored development that should disturb financial reformers."
SEC investigating Moody's credit rating agency. AP: "Moody's disclosed late Friday that it might face a Securities and Exchange Commission administrative charge that it misled regulators when it applied for its license in 2007."
TARP watchdog blesses government sales of warrants to bailed out banks. Bloomberg: "'Treasury has generally succeeded in negotiating prices from recipients for the warrants at or above its estimated composite value,' the inspector general’s report said ... Banks that seek to exit TARP must dispose of the warrants that the Treasury received, either by repurchasing them or allowing the department to hold an auction..."
Support Rises For Climate Bill After Oil Spill
Climate Progress reports on memo from Obama's campaign pollster, finding stronger support for energy/climate bill after oil spill: "[Joel] Benenson finds, 'not only do voters support a comprehensive clean energy bill by large double-digit margins, they also indicate their Senator’s vote could be an impactful re-election factor.' ... Overall, 61% of 2010 voters support and just 31% oppose a bill 'that will limit pollution, invest in domestic energy sources and encourage companies to use and develop clean energy. It would do this in part by charging energy companies for carbon pollution in electricity or fuels like oil.'"
WH wants oil spill liability cap lifted in upcoming appropriations bill. Politico: "No formal announcement has yet been made by Chairman Daniel Inouye, but with Memorial Day fast approaching, the Hawaii Democrat appears weary of waiting for the House and determined to show some movement. The oil-spill provisions complicate his task but also give added impetus to a package that could top $58 billion, affecting the Pentagon, State Department and health benefits for Vietnam-era veterans exposed to Agent Orange."
Tax breaks for Big Oil under Congress microscope. CQ: "The spill has also given momentum to proposals to levy new fees and reconsider some preferential treatment of the oil industry, including tax breaks that encourage deep-water drilling. With the new concern over the environmental impact of deep-water drilling coinciding with pressure to reduce the budget deficit, repealing tax breaks to the oil industry are on the table."
Regulators let the oil industry drill deeper, despite safety concerns and unproven fixes. ProPublica: "We dug up a 2004 document from Minerals Management Service, the federal offshore drilling regulator showing that oil and gas production from deep water drilling had increased 535 percent since 1995, to that point. According to the document, oil and gas companies have 'made large investments in new technologies' in order to 'counter these challenges' of drilling deeper. Some of the technologies named are 'massive blowout preventers' and remotely controlled robots-both of which failed to stop the spill in this case. According to the Miami Herald, despite its own concerns about the safety equipment MMS did not issue new regulations to strengthen safety requirements, instead continuing to encourage exploration in deeper waters."
BP, contractors point fingers at each other in advance of Senate hearing today, reports Bloomberg.
BP has a hand in more than one disaster, from oil spilling to killing financial reform. Mother Jones' Andy Kroll: "Oil giant BP may be overwhelmed with the clean-up from the collapse of its Deepwater oil rig in the Gulf of Mexico. But the corporation has still found time to fight tougher financial reforms on Capitol Hill. The corporation is a member of the Coalition for Derivatives End-Users, a collection of companies actively pushing for a loophole in new regulations governing derivatives..."
Jobs Crisis Not Over
The American Prospect's Harold Meyerson calls for the President to push for a 21st century WPA: "Putting millions of people to work in a space of two months was an amazing achievement. The 4.26 million Americans employed by the [Civil Works Administration] constituted roughly 3.5 percent of the nation's population of 125 million people. Today, the Census Bureau estimates that America is home to 309 million. If a modern-day public-works program were employed on the same scale, it would employ 10.8 million Americans ... What the nation needs economically, then, and what Obama needs politically, is a jobs bill that invests in home care and child care, boosts tax credits for domestic manufacturing ... Obama needs to talk to Americans about the constrained economic future they will face if those sectors don't revive ..."
Without more job creation, more incumbent politicians will lose theirs, says Open Left's Mike Lux: "Incumbents in both parties are in trouble for one simple reason: the jobs aren't coming back and the perception among voters is that the incumbents aren't doing anything about it. ... Very few people are feeling the effects of the GDP growth that has elites proclaiming an improving economy."
Dean Baker challenges the premise that the economy is in trouble because the banks aren't lending to small biz: " First, small businesses are not special engines of job growth. Small businesses do create most new jobs, but they also lose most new jobs ... If small and mid-size companies were being prevented from expanding due to their inability to raise capital then we should be seeing larger companies rushing in to take market share. Retail stores should be opening up new outlets everywhere. Factories should be rapidly increasing output and transportation companies should be rushing into new markets. Of course we don’t see any of this happening ... The problem is that we have to generate demand, which means having the government spend more money to stimulate the economy."
Obama administration strengthens ability for rail and airline workers to choose unions. AP: "The new rule, announced by the three-member National Mediation Board, would recognize a union if a simple majority of workers who cast ballots approved organizing. The previous rule required a majority of the entire work force to favor unionizing. That meant workers who did not vote were effectively treated as no votes. The most immediate impact of the change would be at Delta Air Lines, where unions are trying to organize about 20,000 flight attendants. Unions are also expected to seek to organize workers at smaller carriers..."
Breakfast Sides
Estate tax opponents working on deal to establish low rate. CQ: "Finance Committee members Jon Kyl, R-Ariz., and Blanche Lincoln, D-Ark., are finding revenue-raising offsets within the estate tax code to cover the costs of the more generous rate and exemption they want ... The House bill would permanently extend the estate tax parameters in place in 2009 — a 45 percent top rate and an exemption of $3.5 million per person. That deal fell flat in the Senate ... moderate Democrats pushed the likely consensus — backed by Kyl and Lincoln — toward a top rate of 35 percent and an exemption of $5 million, with the exemption indexed for inflation ... the Senate version may gradually lower the tax rate and raise the exemption over the 10-year budget window ... Kyl and Lincoln are also considering establishing “prepayment trusts," ... people with estate tax liability would be able to pay their tax up front at a lower rate ..."
NYT gives hope to right-wing legal challenge to health care reform law's obligation for most to purchase insurance: "Some legal scholars, including some who normally lean to the left, believe the states have identified the law’s weak spot... questioning whether Congress can regulate inactivity — in this case by levying a tax penalty on those who do not obtain health insurance. If so, they ask, what would theoretically prevent the government from mandating all manner of acts in the national interest, say regular exercise or buying an American car? Other experts, however, dismiss the Florida lawsuit as a politically motivated lark at taxpayer expense, and argue that the insurance mandate falls comfortably within Supreme Court precedents. The states, they say, may not even withstand a challenge to their standing to bring the suit, since they are only indirectly affected by the mandate."
Felix Salmon on why a Greece default is not inevitable, if the EU is truly committed: "Greece has an enormous amount of low-hanging fruit in the form of uncollected taxes on undeclared income, and although it will take time to start collecting that extra money, time is exactly what the EU has just provided, and is likely to continue to provide."
