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.
State Aid Vote Today, As GOP Attacks Teachers
House expected to clear state aid to prevent teacher layoffs today. GOP leaders deride teachers as "special interests." McClatchy: "'The American people don't want more stimulus spending,' said House Republican leader John Boehner of Ohio, 'especially in the form of a payoff to union bosses and liberal special interests.' ... Republicans, though, are up against some powerful forces, notably teachers. According to federal Department of Education estimates released Monday, California would get $1.2 billion to help pay for 16,500 education jobs. Other teacher-jobs-saved estimates: Texas, 14,500; Florida, 9,200; Pennsylvania, 5,900; Illinois, 5,700; North Carolina, 5,700; and South Carolina, 2,600."
Economist Mark Zandi supports, but notes much more is still needed. Bloomberg: "...Zandi, a former adviser to 2008 Republican presidential candidate John McCain, called the legislation 'a very good idea,' estimating it would save 150,000 jobs ... It won’t spare thousands more from pink slips, Zandi said, estimating states will still have to cut another quarter-million jobs over the next year. 'Even with the $26 billion, they are going to be cutting into real bone,' he said."
Indiana governor, possible presidential candidate, flip-flops on state aid. HuffPost: "Indiana Gov. Mitch Daniels (R-Ind.) joined a chorus of Republicans on Sunday when he argued that the Medicaid and teacher funding set to pass in Congress this week is excessive and does not stimulate the economy ... Back in February 2010, the Indiana Republican was one of 47 signatories to a National Governors Association letter urging congressional leadership of both parties "to [extend] the American Recovery and Reinvestment Act's (ARRA) enhanced federal match for Medicaid (FMAP) for two additional quarters."
NYT's Bob Herbert calls the jobs picture a "Horror Show": "At some point we’re going to have to claw our way out of this denial. With 14.6 million people officially jobless, and 5.9 million who have stopped looking but say they want a job, and 8.5 million who are working part time but would like to work full time, you end up with nearly 30 million Americans who cannot find the work they want and desperately need."
Robert Reich offers a three-point solution to the jobs crisis: "First item on the agenda: establishing a federal bank that will provide states and locales zero-interest loans, to be repaid when their unemployment rates drop to 5 percent or below. Second item: eliminating payroll taxes on the first $20,000 of all incomes and make up the difference by subjecting all income above $250,000 to the payroll tax ... Third item: recreating the WPA to hire Americans directly."
The Brewing Battle To Gut Public Worker Pensions
States begin to go after public pensions. Stateline: "Lawmakers in Colorado, Minnesota and South Dakota voted earlier this year to limit cost-of-living increases they previously had promised to thousands of current and future retirees, who courts historically have protected from benefit reductions ... If the courts do not reinstate the retirees’ benefits, a flood of states could follow..."
TNR's Jonathan Cohn asks, "To what extent is the problem that the retirement benefits for unionized public sector workers have become too generous? And to what extent is the problem that retirement benefits for everybody else have become too stingy?"
Paul Krugman debunks wild exaggerations of overcompensated public employees: "State and local employees are paid more, on average, than private-sector workers — about 13 percent more, according to [CEPR's] John Schmitt. But ... state and local workers are much better educated and somewhat older than private-sector workers, and once you correct for that the comparison actually seems to go the other way ... Yes, firefighters and police get pretty generous pay packages; they also pull people from burning buildings ... A few percent either way in workers’ compensation would not make a big difference to state and local spending. This is a phony issue."
Countdown To Social Security's Birthday
Major push to protect Social Security this week. The Hill: "House Democrats are planning more than 100 events around this week’s anniversary of Social Security to attack Republicans who want to reform the popular entitlement ... The Democrats’ Social Security push was prompted by calls from GOP leaders for changes to the program. House GOP Leader John Boehner (Ohio) said last month that the retirement age may need to be raised from 67 to 70 ... A few key Democrats have signaled a willingness to take on Social Security reform. House Majority Leader Steny Hoyer (D-Md.) and Majority Whip James Clyburn (D-S.C.) both said in June that raising the retirement age should be considered ..."
TNR's Jonathan Chait sums up the depth of Republican hypocrisy on deficits: "The most mind-boggling development of the Obama years is that the Republican party has gained an advantage on the issue of fiscal responsibility. It isn't just that Bill Clinton spent eight years building bulwarks of fiscal restraint and then the GOP spent the next eight years dynamiting them. It's that the Republicans continue to oppose any long-term fiscal restraint. It's true that they opposed the stimulus, which created a temporary bump in the deficit. But they also opposed the Affordable Care Act, which reduces the deficit, while demagoguing Medicare. Now they're proposing another massive tax cut."
Pentagon v. Private Contractors
Pentagon looks to save money by reducing use of private contractors. USA Today: "Among cuts proposed by Gates ... A 10% cut per year for three years for spending on contractors. The Pentagon's use of contractors has soared. In 2000, they accounted for 26% of the department's workforce; in 2009, they made up 39% of its employees."
The cuts amount to a "small fraction of the defense department's $535 billion annual budget" reports McClatchy.
Beyond Warren, Confirmation Fights Likely To Staff Wall St. Reform
Nominees to implement Wall St. reform may spark confirmation battles. The Hill: "Obama will likely move within the next year to name new heads of at least a half-dozen major offices, including: the Consumer Financial Protection Bureau; the Office of the Comptroller of the Currency; the Federal Deposit Insurance Corporation (FDIC); the Office of Financial Research; and an insurance representative on a new council of regulators. The president is also in the process of filling vacant positions at the Federal Reserve. The Treasury secretary will also need to appoint someone to lead the first-ever Federal Insurance Office, which will have the power to monitor the insurance industry at the federal level ... Democrats and Republicans are already indicating that the battles ahead will be more contentious than previous debates on financial nominations."
Sens. Durbin and Levin back Elizabeth Warren. W. Post's Greg Sargent: "That makes a total of 15 Senators supporting her. Is momentum building in her favor?"
Leading House Dems push Warren. Reuters: "Representative Carolyn Maloney and House Financial Services Chairman Barney Frank are urging President Barack Obama to act swiftly to nominate Warren [and] are trying to drum up more signatures for their draft letter requesting a meeting with Obama on the matter ... White House spokesman Bill Burton told reporters that an announcement on the consumer job would not come this week..."
The Nation's Bill Grieder writes that Elizabeth Warren uncovered what the government did to rescue AIG, and it's not pretty: "The Congressional panel’s critique helps explain why bankers and their Washington allies do not want Elizabeth Warren to chair the new Consumer Financial Protection Bureau."
Fed Meets Today, May Discuss Policy Shift
Fed meets today, may decide to step on the gas pedal, suggests NYT: "Economists, including former Fed officials, say the central bank’s interest rate policy committee is likely, at the least, to acknowledge the slowdown in the recovery, and to discuss steps like reinvesting the proceeds from its huge mortgage-bond portfolio, which could help the economy by keeping more money in circulation."
But W. Post doesn't expect any immediate policy shift: "[Weak economic data] should be enough to at least get members of the Federal Open Market Committee to discuss their options for boosting the economy when they meet behind closed doors Tuesday -- including purchasing Treasury bonds or other assets, lowering the interest rate on bank reserves, or pledging to keep interest rates low for longer -- even if, as Fed-watchers expect, they won't pull the trigger on any of them."
China Trade Surplus Renews Pressure For Currency Reform
China's trade surplus spikes. NYT: "China’s trade surplus climbed to $28.7 billion in July, the largest total since January of last year ... the pace of [currency] appreciation has been very slow so far, with the renminbi rising only 0.8 percent against the U.S. dollar since [June.]"
Trade numbers put pressure on China to speed up currency reform. Bloomberg: "...today’s numbers may provide [US] lawmakers with fuel to increase demands for the Obama Administration to take action against China, which they claim is deliberately keeping its currency undervalued to give exporters an unfair advantage."
Foreclosure Data Renews Pressure For Bankruptcy Reform
"Fewer Homeowners Are Underwater, But Only Because They’re Being Foreclosed Upon" reports Wonk Room's Pat Garofalo: "Last week, the Cleveland Federal Reserve Bank released research showing that the implementation of judicial loan modification in bankruptcy — known as “cram down” — is a good way to incentivize private loan modifications ... legislation giving judges this ability has come up for a vote repeatedly in Congress, but has been defeated each time..."
Freddie Mac needs more federal aid. WSJ: "Freddie Mac and its larger cousin, Fannie Mae, continue to bleed money largely because of loans that were made as the housing boom turned to bust. As loans turn delinquent, the companies must set aside more money for future losses that they could take as homes sell through foreclosure ... The Obama administration said it will put forward a detailed plan early next year and will start that process at a conference in Washington next week. But analysts said that the final resolution of the firms' fates could still be years away."
House Expected To Pass Increased Border Security
House expected to pass border security measure in today's special session. The Hill: "The Senate bill would provide funding for an additional 1,000 border patrol agents and for hundreds of additional federal authorities, as well as facilitate the deployment of aerial drones. If House Democrats opt to introduce a new bill, it will most likely resemble [the Senate's.] ... Numerous conservative Democrats were pushing for passage of such a bill, and even the most ardent supporters of broad immigration reform said action is needed. A spokesman for Rep. Raúl Grijalva (D-Ariz.), one of the most vocal critics of Arizona’s new immigration law, said he supports the border security measures that have passed both the House and Senate. Still, some advocates for a broader immigration overhaul criticized the move as political pandering."
PFAW president Michael Keegan lays out the stakes of the GOP vs. the 14th Amendment: "Like the GOP's recent attacks on the record of Supreme Court justice Thurgood Marshall, this assault on the 14th Amendment is a willful attempt to revise American history and values in the name of political expedience."
Lessons From Portugal For Clean Energy Transition
NYT sees lessons for US in Portugal's rapid transition to a clean energy economy, widely considered a "success" but not without bumps: "If the United States is to catch up to countries like Portugal, energy experts say, it must overcome obstacles like a fragmented, outdated energy grid poorly suited to renewable energy; a historic reliance on plentiful and cheap supplies of fossil fuels, especially coal; powerful oil and coal industries that often oppose incentives for renewable development; and energy policy that is heavily influenced by individual states."
Sen. John Kerry introduces bill to boost clean energy funding. Mother Jones' Kate Sheppard: "Indefatigable, Thy Name is John Kerry ... His newest bill is the Clean Energy Technology Leadership Act of 2010, which includes provisions that would ... provide additional funding for the advanced energy manufacturing credit [and] extend and modify tax incentives for new energy efficient [buildings]..."
TreeHugger's Brian Merchant lists the questions much of the media isn't asking about the damage to the Gulf: "There may be fewer pictures of oiled birds to drum up sensational interest, but there are a slew of investigations that really need to be made: Impact of dispersants? Oiled areas restricted from the press? Health impact on cleanup workers? Broken-up oil in the water column?"
New science raises fears of long-term Gulf damage. Mother Jones' Julia Whitty: "The emerging picture is one of an incalculably complex, finely tuned, and delicate interaction between predators and prey, chemistry and light, currents and water column, night and day. Some semblance of this spatial ballet, played in weightless three-dimensional darkness, has likely been part of the oceans since the oceans were brought to life: layers of life gathering in extremely high densities to feed or to avoid being eaten. So what happens if you add millions of gallons of oil, dispersant, methane, and drilling fluid into the dense mix?"
UN sets low bar for December climate meeting. NYT: "Ban Ki-moon, the United Nations secretary general, said Monday ... that a better approach might consist of small steps in separate fields that built toward wider consensus rather than aiming for one sweeping pact."
Hotter Atlantic Ocean means expect fierce hurricanes this year. Bloomberg: "[The] meteorologists at the U.S. National Hurricane Center say there’s more reason for concern that the sky will fall than any time since 2005..."
