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.
Fed Beaten, But Bank Battle Not Over
Bank lobby whines in response to new report detailing widespread ties to government officials. W. Post: "The country's largest banks and trade groups have hired more than 240 former government officials and legislative staffers to lobby on their behalf in Congress ... The report, compiled by the Campaign for America's Future, the Public Accountability Initiative and the Service Employees International Union, is aimed at increasing the political pressure on Wall Street banks as Congress enters the final stages of debate ... 'What this report ought to look at is the virtual extortion of political contributions from unwilling union members and the failure to properly register senior leaders as lobbyists,' said Glenn Spencer, executive director of the Workforce Freedom Initiative at the U.S. Chamber of Commerce."
Rep. Alan Grayson praises unanimous Senate vote passed Fed audit compromise: "Soon, we will know what the Federal Reserve did with the trillions of dollars that it handed out during the financial crisis. A few months ago, such a vote would have been unthinkable. ... What happened? People Power is what happened. We built a coalition of people on the right and the left, ordinary citizens and economists, ex-regulators and politicians, all with one question for which we demanded an answer: 'What happened to our money?'"
Shady car financing deals raise question what car dealers deserve exemption from new financial rules. NYT: "Even the Pentagon has weighed in, insisting that automobile purchases and dealer-assisted financing should be part of any new financial legislation because low-income military people are victimized in large numbers by shady car dealers that set up shop just outside many bases. Officials say distractions caused by these bad auto deals could affect the readiness of the armed forces."
Vote on car dealer exemption expected today. W. Post: "The campaigns are forcing lawmakers into an uncomfortable choice between the interests of the military and car dealers, who run one of the most influential and deep-pocketed political action committees in Washington and tend to be intimately involved in politics in lawmakers' home districts."
Robert Reich on the prospects for Sen. Lincoln's tought derivatives reform: "...she has two things going for her. First is the awkwardness for the White House if the President were to come out explicitly against her. For many weeks the Administration has talked about the importance of being tough on derivatives ... The second advantage Lincoln has is her measure passed her committee with so much momentum ... While it’s always possible for opponents of reform to hide when amendments are voted down, it’s much harder to hide when trying to strip a provision from a bill."
Right-leaning Dems join GOP on weakening amendment to block strong regulation and enforcement by states. The Hill: "Democratic Sens. Tom Carper (Del.), Mark Warner (Va.), Tim Johnson (S.D.) and Evan Bayh (Ind.) are supporting an amendment that would give federal regulators more power to pre-empt state consumer financial regulations. They are joined by Republican Sens. Bob Corker (Tenn.) and John Ensign (Nev.) ... Supporters of greater state powers say the federal government, particularly since 2004, has too often pre-empted tougher state regulations. Senate Republicans and the financial industry ... argue that a patchwork of state regulations would hamper the banking industry in a way that could drive up costs on consumers."
Big banks have great first quarter, thanks to being propped up by Fed. Bloomberg: "Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc., the first, second and fifth-biggest U.S. banks by assets, all said in regulatory filings that they had zero days of trading losses in the first quarter ... The trading results, which helped the banks report higher quarterly profit than analysts estimated even as unemployment stagnated at a 27-year high, came with a big assist from the Federal Reserve. The U.S. central bank helped lenders by holding short-term borrowing costs near zero..."
SEC knocks top Wall Street banks for flinching during last week's market drop. W. Post: "Schapiro said that firms known as 'liquidity providers' stopped buying many of the stocks that were suffering the largest declines last Thursday. Some of these firms -- which are part of major banks -- have an obligation under securities rules to act only in ways that stabilize the market."
Conservative non-plan to address Fannie/Freddie defeated. WSJ: "[The Senate] rejected a Republican-backed plan that would have required the government to give up control of Fannie Mae and Freddie Mac after two and a half years ... Democrats didn’t dispute that changes are needed, but warned Republicans weren’t offering any alternative to fill the role Fannie and Freddie play in the nation’s housing finance market ... The Senate instead approved a Democratic amendment requiring the Obama administration to submit a plan to Congress outlining how to end taxpayer support for Fannie and Freddie, while also overhauling housing finance system."
The Nation's Greg Kaufman explores how the White House housing strategy is failing three Queens, NY homeowners: "...: it depends entirely on the banks voluntarily doing the right thing, even when homeowners have held up their end of the bargain to prevent a foreclosure ... Take the case of three homeowners in Queens, New York. Each one met the requirements for a 'permanent' modification of their mortgages ... how did Chase reward them? Permanent modifications denied. Delinquency reports to credit rating agencies issued. And the cherry on top--foreclosure."
Baucus keeps up pressure for a bank tax to repay TARP fund. Wonk Room's Pat Garofalo: "Chairman Max Baucus (D-MT) — who has said there’s not much doubt that a bank tax will happen — said that the U.S. should 'step up and lead' on this issue, and set an example for the rest of the world."
Kerry-Lieberman Climate Bill Released Today
Kerry-Lieberman (sans Graham) clean energy jobs and climate protection bill to be released today. Bloomberg: "'It’s a long, tough fight,' Kerry ... said yesterday. 'We’re going to do the best we can.' ... 'I’m confident there are votes out there ... We have to go fight for them.'"
The Hill lists how Kerry-Lieberman differs from Waxman-Markey: "The addition of nuclear power and drilling incentives is aimed at corralling support from Republicans and centrist Democrats. Also, the Senate plan would not subject refiners — who strongly oppose the House measure — to carbon trading markets to address emissions from cars and trucks ... it will include a 'hard price collar' that will keep carbon prices between $12 and $25 in the trading market created by the legislation, a significant win for electric utilities that sought more assurance the proposal would not lead to huge increases in energy costs ... It creates a cap-and-trade system for power plants and, eventually, large industrial plants. But, in a nod to oil industry concerns, it does not include transportation emissions in the carbon trading program ..."
Appeal to manufacturing states and consumers. The Hill: "It could appease Democrats from manufacturing states by providing a delay until 2016 before industrial plants face emissions requirements. It also provides so-called energy-intensive, trade-exposed industries with free emissions permits to help keep down compliance costs. Crucially, it allows 'border adjustments' — also called carbon tariffs — on imports from countries that do not take action to limit emissions, which is aimed at protecting U.S. industries and preventing 'carbon leakage,' a summary notes. The measure also provides substantial consumer rebates, which could help blunt GOP allegations that the bill represents a huge new energy tax."
Opposition from Big Oil appears to be defused. Greenwire: "...Kerry and Lieberman are expected to be joined by a large coalition of business, environment, faith and national security groups, which Lieberman said 'creates a new reality' in their uphill push for 60 votes ... Lieberman said he expects the American Petroleum Institute 'to be quiet' about the climate proposal. And he sees a similar role for the U.S. Chamber of Commerce."
Kerry-Lieberman climate bill gives states both incentives and veto power over offshore drilling. AP: "[The bill] would allow coastal states to opt out of drilling being allowed up to 75 miles from their shores ... In a break from current policy, states that allow offshore drilling will receive a share of federal revenue..."
New drilling provisions may be enough to woo back drilling opponents. The Hill: "Kerry and Lieberman may have made headway with some coastal-state liberal Democrats ... 'My objective is to be able to protect the Mid-Atlantic from offshore drilling, and I believe that during our discussions that that may in fact be achieved, but I want to read the language first,' said Sen. Ben Cardin (D-Md.). But they nonetheless face major barriers, especially absent any GOP backing."
Or maybe not. CQ: "'I’ll let them do the unveiling,' said New Jersey Democrat Frank R. Lautenberg, an offshore drilling critic. 'You know what an unveiling is, typically, in a graveyard? It’s when you first see the tombstone.'"
16-point drop in support for offshore drilling in new CBS poll.
Climate Progress' Joe Romm says the bill meets the test: "'From day one, two-thirds of revenues not dedicated to reducing our deficit are rebated back to consumers.' ... You might call it cap-and-dividend, were the name not taken ... [The] floor and ceiling [carbon] prices are sufficient to drive significant clean energy into the marketplace, including fuel switching from coal to natural gas ... There are a number of provisions to block market manipulation ... Now that the bill limits participation in the auctions and has a hard ceiling, the prospects that the market could be seriously manipulated vanish entirely."
Details still sketchy, according to Politico: "The vast majority of the revenue envisioned in the legislation would come through a variety of programs aimed at putting a price on carbon emissions. However, the draft version offered scant details about how those programs would work."
Sen. Maj. Leader Reid will plot climate strategy with cmte chairs after Memorial Day recess reports The Hill.
Interior Dept. will divide agency to handles offshore drilling, separating safety and revenue-raising functions. Is that enough? NYT: "...both functions will remain part of the agency and the Interior Department. Australia, by contrast, created a separate safety agency, the National Offshore Petroleum Safety Authority, in 2005 to more clearly avoid conflicts. Norway established its Petroleum Safety Authority a year earlier for similar reasons."
Even as oil spilled into the Gulf, more drilling plans in the Gulf got environmental exemptions. ProPublica: "Regulators at the Minerals Management Service exempted 27 additional offshore drilling projects in the Gulf of Mexico from performing an in-depth environmental analysis—even after the Deepwater Horizon oil rig exploded, according to reporting by McClatchy. One of those exemptions went to BP."
BPs hearing before the Senate energy cmte turned into a three-way blame game, says Grist's Jonathan Hiskes: "BP America's Lamar McKay focused on Transocean's failed blowout preventer. Transocean's Steven Newman talked about the failed Halliburton cement. Halliburton's Tim Probert said a drilling contractor misused a cement plug (it's unclear if he was blaming BP or Transocean, but it definitely wasn't Halliburton's fault!). BP's McKay complained that nobody talks about all the times they didn't ruin the Gulf of Mexico..."
New fee on oil proposed to help pay for cleanup. Politico: "...Democrats are actively discussing at least a one-cent-per-barrel increase in fees paid by the oil industry to finance a government trust fund covering damage claims from such spills ... the added revenue is coveted by tax writers, still struggling to find $45 billion to $50 billion in offsets needed to pay for an election-year package of infrastructure investments and popular tax break extensions."
Tax Realities Lost On Tea Party
Will news that Americans paid their lowest level of taxes since the Truman administration quiet the tea party tempest? Digby says no: "You would think this news would come as a big relief to the tea partiers who seem to think they are enduring the suffering of Jesus under the tax burden. But it won't. The anti-tax sentiment among middle and working class people actually means 'stop giving my money to people I don't like' (and among the Peterson level deficit fetishists, it's 'taxes are for the little people.') Neither of those sentiments are actually related to the deficit, but the deficit is a lovely excuse for such selfishness."
TNR's Jonathan Chait has news for conservative lovers of spending cuts: "The one period of time when federal spending actually declined on a continuous basis was when policymakers had implemented tax hikes."
Deal in works to gradually end tax break for hedge fund managers. CQ: "A tax increase on the 'carried interest' earned by private equity managers, venture capitalists and real estate investors now seems increasingly likely ... House Ways and Means Chairman Sander M. Levin, D-Mich., said the final version is likely to provide transition relief to taxpayers by gradually increasing the tax rate on carried interest from the capital gains rate to ordinary income rates. ... adding that the bill could reach the House floor next week."
Health Reform Implementation Update
AP suggests 10-year health care reform cost could top $1 trillion: "The Congressional Budget Office said the added spending includes $10 billion to $20 billion in administrative costs to federal agencies carrying out the law, as well as $34 billion for community health centers and $39 billion for Native American health care."
Time's Kate Pickert reminds those additional costs are optional, and could be offset: "The law also says Congress can spend $115 billion more, but it doesn't have to ... [OMB's Ken] Baer says even if all the items authorized for appropriations are funded - which is unlikely ... the current budget has a freeze on discretionary spending, meaning if more money was appropriated for health reform, less money would have to be spent in other parts of the budget."
W. Post on right-wing legal strategy to undermine health reform: "Many constitutional scholars have said the [individual mandate] suit has slim chances. But activists say they view the lawsuit as the first of what they hope will be a slew of challenges mounted by state governments, legislatures and individuals, ultimately narrowing the law's scope and possibly unraveling it altogether ... 'The initial challenges to McCain-Feingold were rejected,' said [Goldwater Institute's Clint] Bolick. 'But since then, litigators found the vulnerabilities ... I'm hoping that this will die a death of a thousand cuts.'"
HHS Sec. shrugs off lawsuits, assures public of cost savings in Yahoo! News interview: "We asked Yahoo! News readers to suggest questions for Sebelius via Twitter and Facebook, and many of those queries centered on concerns that they won't be able to afford health insurance ... Sebelius responded that people are concentrating too much on the mandate and not enough on the subsidies in the bill that help people to buy insurance."
Wrinkles in regs expanding family coverage to 26-year old dependents. W. Post: "Until 2014, when health plans will be prohibited from charging higher premiums based on preexisting conditions, insurers in the individual market can take into account the young adult's medical condition when setting the family's premium ... The provision 'applies only to health insurance plans that offer dependent coverage in the first place: while most insurers and employer-sponsored plans offer dependent coverage, there is no requirement to do so,' the Department of Health and Human Services said ... Families can take advantage of the option even if the young adult no longer lives with his parents and is not a dependent on their tax return."
