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.
House-Senate Conference Approves Wall St. Reform
New regulation of Wall Street clears House-Senate conference. W. Post: “Despite myriad changes in recent days, Democrats appear poised to deliver a final bill that largely reflects the administration’s original blueprint unveiled almost precisely a year ago. While it would not fundamentally alter the shape of Wall Street or break up the nation’s largest firms, the legislation would establish broad new oversight of the financial system.”
Senate derivatives firewall scaled back to cover only certain products. HuffPost: “…banks would continue to be allowed to deal interest rate and foreign exchange swaps, ‘credit derivatives referencing investment-grade entities that are cleared,’ [said Rep. Colin Peterson] derivatives referencing gold and silver, and the firms would be allowed to hedge ‘for the banks’ own risk.’ Banks would be forced to push out to their affiliates derivatives referencing ‘cleared and uncleared commodities, energies and metals (with the exception of gold and silver), agriculture, credit derivatives referencing non-investment grade entities and all equities, and any uncleared credit default swaps,’ Peterson said.”
Volcker Rule included, with exceptions. NYT: “Banks managed to wrangle limited exceptions to the rule that would allow them to continue some investing and trading activity. The agreement limits banks’ investments in hedge funds or private equity funds to no more than 3 percent of a fund’s capital; those investments could also total no more than 3 percent of a bank’s tangible equity.”
Independent consumer protection agency included, housed in the Fed. NYT: “The bureau is to be headed by a single director appointed by the president and confirmed by the Senate. The new bureau would write and enforce rules for most banks, mortgage lenders, credit-card and private student loan companies. Smaller banks and credit unions, or those with less than $10 billion in assets, would have to obey the consumer bureau’s rules — but the smaller institutions’ enforcement and supervision would remain with their current regulators…”
But auto dealers win their loophole. AP: “…the consumer protection agency would not regulate auto dealers, even though they assemble loans for millions of car buyers. Payday lenders and check cashers would be regulated, but enforcement would be left to states or the Federal Trade Commission.”
Cost of bill to be paid for by big banks and hedge funds. The Atlantic: “…, between $15 billion and $19 billion [will] be paid for by a tax on the financial industry. The Federal Deposit Insurance Corporation will assess financial institutions with assets exceeding $50 billion and hedge funds with assets exceeding $10 billion over five years to cover the costs.” “Republicans howled over … the addition of a new tax on banks and big hedge funds reports Politico.
GOP Filibuster Kills Jobs Bill, Cuts Off Aid To Long-Term Unemployed
Senate GOP kills jobs bill, jobless aid, biz tax breaks despite Dems making nearly entire bill deficit-neutral. W. Post: “The latest version, released late Wednesday, would have increased budget deficits by $33 billion over the next decade — the cost of extending jobless benefits through the end of November. Obama’s request for $24 billion in state aid was scaled back to $16 billion and its cost would have been covered by unspent funds from last year’s economic stimulus package, much of it targeted at the food stamps program. Other provisions would have been fully paid for, including plans to extend an array of expiring tax breaks that are hugely popular with many of the nation’s largest business groups. Among the revenue-raising provisions in the measure are new taxes on investment fund managers and multinational corporations that do business overseas.”
Concessions not enough to woo Republican “moderates.” Politico: “‘The bill is simply too expensive, and I simply could not support it,’ [Sen. Susan] Collins said flatly. But only a third of the package — the $35 billion for unemployment benefits — is not paid for. And Democrats went to great lengths to remodel portions to suit precisely her requests … $24 billion in new state assistance to pay Medicaid bills was scaled back to $16 billion and then phased out, as Collins had suggested, and fully paid for with offsets.”
Jobless aid cutoff this week. Bloomberg: “The impasse means unemployment benefits will be cut off to more than 1 million people by the end of this week, according to the U.S. Labor Department … The bill derailed yesterday would have continued some extended jobless benefits through November.”
“Other senior Democrats said they will probably try again to attract GOP support for the measure … But after four months of talks, frustrated senior Democrats said they are likely to delay further action until after the July 4 recess.” reports W. Post.
“The Republicans [have decided] to move on from the recession … Today, the recession sort of ended for the Senate, and the election began.” says Ezra Klein on MSNBC’s Rachel Maddow.
Sen. Debbie Stabenow charges GOP will intentionally harming the economy to gain in November. Washington Independent quotes: “It is very clear that the Republicans in the Senate want this economy to fail. They see that things are beginning to turn around … in cynical political terms, it doesn’t serve them in terms of their elections if things are beginning to turn around. I believe when you look at this bill, which is all paid for — we raised revenues to pay for it — the one piece that is technically not paid for [is the federal unemployment benefit extensions and] that is done in a way that we have always done it, … [those are] always categorized as an emergency. And, frankly, if 15 million people without jobs is not an emergency, I don’t know what is.”
Democrats need to follow Sen. Stabenow’s example and just say it: Republicans are undercutting the national economy. TPMCafe’s Theda Skocpol: “Republicans have figured out that if they undercut economic recovery and increase unemployment rates, they will gain in the 2010 elections — and probably have a much better shot in 2012. … Trying to pretend this is a reasonable argument about the deficit, or that it is about ‘compassion’ for the unemployed, is nuts.”
Britain’s austerity plan a “test case” for global economy. Bloomberg: “‘This is going to be one of the biggest experiments, and the U.S. can sit and watch and look to see what happens to the U.K. output data, which I suspect is about to collapse,’ David Blanchflower, a former Bank of England policy maker, said…”
Status of funds to avert teacher layoffs unclear. NYT: “At a briefing, Ms. Pelosi indicated she was open to splitting the [war spending] measure into two parts to help grease the wheels for passage and did not tip her hand on whether funds to help stave off teacher layoffs would be included.”
Fed Chairman Bernanke has shown no “urgency in grappling with high unemployment,” argues Slate’s Daniel Gross: “Whether it was forecasting continued growth as the economy was about to slip into recession, or underestimating subprime losses, Bernanke hasn’t shown much clairvoyance. So perhaps it’s not surprising that the Fed doesn’t see how persistent long-term unemployment can erode labor force skills.”
In These Times’ Mike Elk sees path to winning over Tea Party sympathizers with support for manufacturing and carbon tariff: “Seventy-four percent of self-described Tea Party Supporters would support a ‘national manufacturing strategy to make sure that economic, tax, labor, and trade policies in this country work together to help support manufacturing in the United States,’ according to the poll, put out by the Mellman Group and the Alliance for American Manufacturing. Likewise, 56 percent of self-described Tea Party Supporters ‘favor a tariff on products imported from other countries that are cheaper because they came from a country that does not have to comply with any climate change regulations…”
Senators Sanders and Whitehouse propose progressive estate tax reform. Wonk Room’s Pat Garofalo: “[Reports CongressDaily,] ‘the measure would impose a 10 percent “billionaire’s surtax” on the value of inheritances worth more than $500 million per spouse … on top of a 55 percent rate on the value of estates above $50 million. Below $50 million but above $10 million, and the rate would be 50 percent; and between $3.5 million and $10 million, estate values would be taxed at 45 percent’ … Deficit hysteria has gripped Capitol Hill and is preventing any meaningful effort to boost job creation … so it makes sense to add some progressivity to the estate tax while still retaining the 2009 exemption.”
Dem Caucus May Go For It All On Carbon Cap
Politico reports Reid wants to add carbon cap to coastal drilling reform legislation this summer: “Senate Majority Leader Harry Reid is planning a high-risk, high-stakes strategy for bringing climate and energy legislation to the floor ahead of the August recess … yoking a bipartisan, fast-track measure to overhaul offshore drilling rules with a broad, contentious bill capping greenhouse gas emissions … Reid’s own Democrats are mixed on the strategy … Reid hasn’t settled yet on whether to push for a sweeping cap on greenhouse gases that covers multiple sectors of the economy … or a more limited approach that would deal with only power plants.”
An anonymous source gives Grist’s David Roberts stunning details from inside the caucus meeting: “A few, including Dorgan and Feinstein, argued for waiting until next year, but they were in the minority. Most significantly, key moderates like Begich, Shaheen, and Sherrod Brown backed action … take a strong bill to the floor without 60 votes, beat the sh*t out of Republicans for obstructionism, use public opinion in your favor, compromise where you’re forced, and pry off enough votes to get it done … it looks like the caucus generally agreed, it’s time to go that route on climate.”
Dems more circumspect in public. The Hill: “Several senior Democrats spoke only in broad strokes and slogans about their plans, but uniformly praised the meeting and claimed momentum … a key question — which the lawmakers did not address head-on after the meeting — is whether the bill will include measures that impose caps on greenhouse gas emissions from power plants and other sources.”
The activist judge hasn’t been nominated to the Supreme Court. He’s the one who knocked down the offshore drilling moratorium. : “As the Supreme Court has explained, and [Judge Martin] Feldman quoted in his ruling, ‘an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’ So, you might ask, in the context of the Gulf disaster and the moratorium: Has Judge Feldman seen pictures of those pelicans?”
Joe Conason is searching for solutions to global warming in Africa. But he can’t see the forest for the (lack of) trees: “What would the wealthy nations of the West … do if they actually wanted to prevent catastrophic warming? Here in Africa, the obvious answer is that they would find the ways and means to discourage deforestation — the ruinous practice of clear-cutting for timber, charcoal and arable land that accounts for at least 20 percent of the atmospheric carbon burden … in practice, the incentives created by Western policy are so perverse, according to Tanzania president Jakaya Kikwete, that they reward clear-cutting not once but twice over. So he told Bill Clinton, who is visiting Africa this week … As Kikwete explained the problem, it has become possible to open forests to loggers for profit and then receive carbon-credit subsidies as a reward for replanting the raped forest. Stupid is too kind a word for this.”
Currency Shift Or Chinese Checkers?
Naked Capitalism calls China currency move a “headfake”: “China allowed the renminbi to appreciate a grand total of 0.39% against the dollar this week. leading commentators to rethink China’s canny ploy. Today, the Financial Times gives a reassessment. It notes in particular that domestic interests are fiercely opposed to a rise of a mere 2-3% against the dollar, much the less the 20% to 40% that most experts deem necessary…”
NYT’s Paul Krugman if China keeps “playing games,” we must take strong action. “China needs to stop giving us the runaround and deliver real change. And if it refuses, it’s time to talk about trade sanctions.”
NYT news reports suggests move is for real, part of fundamental change in Chinese economy: “For years, Chinese leaders looked to the millions of poor workers from the country’s interior as the engine of a roaring export economy … These days, the workers … must start buying the very products they manufacture … China’s move this week to make its currency, the renminbi, more flexible and the authorities’ apparent tolerance of recent factory strikes that have led to significant wage increases both signal that Chinese leaders could be serious about re-engineering the nation’s economic model.”
Leading advocate for speedy immigration reform says votes aren’t there this year. The Hill: “Rep. Luis Gutierrez’s (D-Ill.) comments are significant because he has aggressively pushed President Barack Obama to pass immigration reform during this Congress … ‘it doesn’t make it easy when people like’ GOP Sens. Lindsey Graham (S.C.) and John McCain (Ariz.) are not helping like they did several years ago … ‘Obviously within our caucus, it’s 30 or 40 people that are afraid of this issue, afraid it will affect their election and won’t cooperate on it,’ [Dem Rep. Raul] Grijalva said…”
Conservative Senate candidate Marco Rubio likes some of “ObamaCare.” Wonk Room’s Igor Volsky: “[He] is now telling reporters that he would not repeal the law’s pre-existing conditions exclusions and the provisions that allow children to stay on their parents’ policies until age 26 … The statements seem to contradict Rubio’s previously calls to completely scrap the law and start over.”
Aetna scraps rate hike. Sacramento Bee: “Aetna Thursday withdrew plans to raise premiums on 65,000 customers who buy health insurance on their own, becoming the second insurer to do so in as many months because of ‘substantial mathematical errors’ in its rate calculations … ‘First, we found major problems with the Anthem Blue Cross rate filing,’ Insurance Commissioner Steve Poizner said today. ‘Now, additional scrutiny has revealed that Aetna’s filing has significant mathematical errors.'”