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.
Crunch Week For Wall St. Reform
Time's Jay Newton-Small previews what could be a critical week for Wall St. reform: "Still undecided are three key provisions ... [the] populist amendment that would require banks to spin off their derivatives desks ... it looks like some scaled back version of Lincoln's provision will be included in the final bill. Also likely to be included: the tough so-called Volcker rule ... Finally, the fate of a House provision that would create a $150 billion fund to pay for the cost of dealing with bankrupt financial institutions, paid for with new fees on firms worth more than $50 billion, remains undecided. Bankers are eyeing this week with some trepidation..."
NYT reports bank lobbyists may succeed in carving out significant loopholes to the Volcker RUle: "The three main changes under consideration would be a carve-out to exclude asset management and insurance companies outright, an exemption that would allow banks to continue to invest in hedge funds and private equity firms, and a long delay that would give banks up to seven years to enact the changes ... they have the support of Representative Barney Frank, Democrat of Massachusetts, and Senator Christopher J. Dodd, Democrat of Connecticut ...
Bank lobbyists prepare to fight on after the bill is passed, inside regulatory agencies. Bloomberg: "If the bill passes in roughly the form being negotiated by House and Senate lawmakers, regulators will be directed to write hundreds of new rules, conduct dozens of studies, combine two banking agencies and bring industries such as mortgage brokers under federal oversight for the first time. The process will take place in an arena where technical knowledge and relationships with regulators take precedence over old-fashioned legislative arm-twisting."
FT's Clive Crook argues that the pending bill is weakened by a lack of capital requirements:: "The trouble all along has been that Congress and the regulators are receptive to the argument that stricter regulation will raise the costs of US banks and shadow banks — putting them at a competitive disadvantage. But raising their costs is the whole idea. ... A capital requirement that rises in proportion to a bank’s size – a policy endorsed by the Squam Lake Group – would tax and discourage balance-sheet growth."
Jobless Already Crunched By Senate
Jobs impasse on Senate agenda this week, but "urgency" may be diminished reports NYT: "The Senate will continue trying this week to break a partisan logjam over a major package of tax changes and safety-net spending, including added unemployment benefits. ... And a major impetus to complete the measure was removed last week when the Senate agreed on a six-month plan to prevent a steep cut in doctors’ Medicare fees. A fear that older Americans could begin losing access to health care prompted the short-term deal, but some lawmakers may now feel less urgency to finish the broader bill."
Pressure on Maine senators to end jobs filibuster. TPMDC: "In a six-figure buy, Americans United for Change (AUC), and the American Federation of State, County and Municipal Employees (AFSCME) will run the television ad [targeting] Republican Sens. Susan Collins and Olympia Snowe ... 'It's very simple - more jobs now mean less debt later.' ... aid AFSCME President Gerald McEntee."
China Makes Vague Move On Currency
The Atlantic's Marc Ambinder on WH reaction to China's claim it will rebalance currency: "China's decision ... will be scrutinized very closely by Obama Administration officials. If it turns out to be meaningful, it will be seen as an important validation of the administration's foreign policy [and] might also provide important economic benefits that could lift the economy and reduce unemployment more quickly. China's move strengthens its hand going into next weekend's G-20 summit in Canada ... Still, details are hard to come by..."
China says the currency adjustment will be "gradual," not fast enough says Sen. Schumer. NYT "Senator Charles E. Schumer, Democrat of New York, responded to the Chinese statement on Sunday and the unchanged value of the renminbi at the market opening on Monday morning by promising to move ahead as quickly as possible on legislation that could lead to restrictions on Chinese imports."
Matt Yglesias lauds the move, but argues other countries need to take reciprocal action:: "Tightening in the three largest developing countries is the correct policy, but it makes looser policy in the U.S., E.U., and Japan all the more urgent. Likewise, fiscal contraction does seem to be the right policy for some European states (though not for Germany) but this again enhances the need for looser monetary policy from the European Central Bank."
Partial Carbon Cap On WH Agenda
Sen. Lieberman argues many Senate votes are in play for a comprehensive climate bill, possibly with caps on utilities only for now. The Hill: "Lieberman, appearing on CNN’s 'State of the Union,' said there are 50 senators that want to put a price on emitting carbon, 30 against it and 20 members who are undecided. 'We need half of the undecided and we can do it,' Lieberman said ... Lieberman also said he’s open to narrower climate bill that would restrict emissions limits to electric power plants only, an idea that White House Chief of Staff Rahm Emanuel last week said will be part of discussions with lawmakers [on Wednesday].
Anti-climate bill Senate Dems go catty on Kerry to Politico: "Kerry’s style, said Sen. John Rockefeller (D-W.Va.), is akin to being 'pursued by a suitor, just as boys pursue girls.' ... 'He’s so obsessed,' said one wavering Democratic senator ... Thursday’s climate-focused Democratic Caucus meeting left some senators grumbling that Kerry talked too much and didn’t listen enough."
British paper retracts smear on UN climate change panel previously embraced by global warming deniers. NYT: "In 2007, the top United Nations climate body, the Intergovernmental Panel on Climate Change, said the Amazon was vulnerable to drought as a result of trends linked to climate change. The panel backed its conclusion with a report prepared for the W.W.F. ... The London newspaper The Sunday Times described the authors of the W.W.F. report as 'green campaigners' with 'little scientific expertise' ... In its correction this weekend, The Sunday Times acknowledged that the conclusion about the Amazon was supported by peer-reviewed evidence."
Conservative base rallies behind pro-BP pols Rand Paul and Rep. Joe Barton. AP: "Erin Ryan, a tea party activist in Redding, Calif., said Barton was correct to use the word 'shakedown.' ... Conservative talk show host Mark Williams, chairman of the California-based Tea Party Express, said the White House went too far by pressuring BP to create the fund ... 'I'm accustomed to mobsters behaving that way, I'm just not accustomed to it from the president...'"
WSJ reports $20B escrow fund is not a bad deal for BP: "BP successfully argued it shouldn't be liable for most of the broader economic distress caused by the president's six-month moratorium on deep-water drilling in the Gulf of Mexico. And it fended off demands to pay for restoration of the Gulf coast beyond its prespill conditions ... it promised an additional $100 million for Gulf workers idled by the drilling moratorium [but] industry estimates the moratorium will cost rig workers as much as $330 million a month in direct wages..."
NYT investigation finds lax regulation regarding the Deepwater Horizon's "last line of the defense": ...the Minerals Management Service, repeatedly declined to act on advice from its own experts on how it could minimize the risk of a blind shear ram failure. It also shows that the Obama administration failed to grapple with either the well-known weaknesses of blowout preventers or the sufficiency of the nation’s drilling regulations even as it made plans this spring to expand offshore oil exploration ... in one significant instance where the Minerals Management Service did act, it appears to have neglected to enforce a rule that required oil companies to submit proof that their blind shear rams would in fact work."
WH pushing to reinstate the Superfund tax on oil and chemical companies, bringing back "polluter pays" principle to toxic waste cleanup. W. Post: "Since the fund ran out of money at the end of fiscal 2003, the federal government has appropriated public dollars each year to pay for orphaned sites, which account for 606 of the 1,279 sites across the nation. But that has slowed the rate of cleanup. The program completed 19 sites last year, compared with 89 in 1999, the EPA says ... [The bill] could face a greater challenge [in the Senate], given Republicans' inclination to filibuster ... Oil producers and refiners, now facing the prospect of Congress raising the Oil Spill Liability Fund tax from 8 to 49 cents a barrel, are furious at the idea of another tax burden."
Facts v. Deficit Hysteria
Richard Eskow, at Crooks & Liars, analyzes the angry video of WH debt commission chair Alan Simpson spouting Social Security falsehoods: "Simpson doesn't want to force the government to pay those bonds back, because it will probably require new taxes to pay for them. The Commission's likely to recommend some new taxes, but the Simpson crowd wants those increases to be a small as possible."
NYT's Paul Krugman explains to the deficit hysterics when the time will be right to focus on deficit reduction: "...he budget deficit should become a priority when, and only when, the Federal Reserve has regained some traction over the economy, so that it can offset the negative effects of tax increases and spending cuts by reducing interest rates ... as unemployment falls — probably when it goes below 7 percent or less — the Fed will want to raise rates to head off possible inflation. At that point we can make a deal: the government starts cutting back, and the Fed holds off on rate hikes so that these cutbacks don’t tip the economy back into a slump."
Blue Dogs push for House budget with 2% cut in "non-security" discretionary spending. The Hill: "[That] would go beyond the spending freeze that the White House has called for."
Both Parties Split On Legislative Agenda
Politico pessimistic Dems can accomplish more more in Congress this year: "How can the Senate expect to pull off an energy bill or even consider immigration when it’s paralyzed by bills that used to be a slam-dunk, like war funding? Unemployment benefits and tax extenders are stalled, and teacher layoffs loom, thanks to the Senate’s summer budget crisis."
GOP attempt to have voters craft their agenda online backfires. AP: "...House Minority Leader John Boehner of Ohio and his lieutenants launched 'America Speaking Out,' a public outreach campaign involving an interactive website ... Last week, the top five entries in the 'Liberty and Freedom' category were: ban handguns, 'drop the idea that we're a "Christian" country,' declare abortion 'none of the government's business,' allow gays to serve openly in the military and legalize marijuana. Republican leaders mentioned none of these when they began highlighting proposals from the project."
