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.
Weak 2Q Growth Spurs Calls For Action
2nd quarter GDP revised downward from 2.4% to 1.6% annual rate of growth announces Commerce Dept.
NYT's Paul Krugman: "This Is Not a Recovery": "The Fed has a number of options. It can buy more long-term and private debt; it can push down long-term interest rates by announcing its intention to keep short-term rates low; it can raise its medium-term target for inflation, making it less attractive for businesses to simply sit on their cash ... The administration has less freedom of action, since it can’t get legislation past the Republican blockade. But it still has options. It can revamp its deeply unsuccessful attempt to aid troubled homeowners. It can use Fannie Mae and Freddie Mac, the government-sponsored lenders, to engineer mortgage refinancing that puts money in the hands of American families ... It can finally get serious about confronting China over its currency manipulation..."
Annual Fed gathering in Wyoming today. Bloomberg: "[A] transatlantic divide may be on display ... the [European Central Bank] is 'actually looking to the timing of an exit policy, whereas the Fed has obviously put that on the back burner,' [said] Mickey Levy, chief economist at Bank of America Corp. ... Bernanke is likely to elaborate on how much Fed officials or staff economists have reduced their forecast for 2011 growth and provide 'some degree of clarity' on possible plans for injecting more monetary stimulus..."
Trade deficit dragging down economy. W. Post: "The rise in the trade deficit, including an abrupt 16 percent spike in June, is a chief reason economists are downgrading estimates for recent U.S. economic growth ... The debate over possible responses is a broad one - including calls for Obama to push more aggressively to open foreign markets, and suggestions by both labor and industry groups that the United States craft tax and other policies that more directly support American manufacturers. Some lawmakers on Capitol Hill have also targeted China's currency..."
Firehouses cut back as states grapple with budget crises. NYT: "Fire departments around the nation are cutting jobs, closing firehouses and increasingly resorting to 'rolling brownouts' in which they shut different fire companies on different days ... 'It’s roulette,' said Chief James S. Clack of the Baltimore City Fire Department ..."
Momentum For Temporary Extension Of Bush Tax Cuts
Clear majority supports letting Bush tax cuts for wealthiest expire in CBS poll: "...56 percent, say the tax cuts should expire for households earning over $250,000 per year, as Democrats have proposed. Thirty-six percent of Americans say they should not be allowed to expire."
Some Dems step up push to temporarily extend all Bush tax cuts. W. Post: "With the economy rapidly weakening, some senior Democrats are having second thoughts about raising taxes on the nation's wealthiest families ... [Some] are advocating a plan that would permanently extend tax cuts benefiting the middle class while renewing breaks for the wealthy through 2011 ..."
Sen. Tom Coburn (R-Okla.) wants unspent Katrina recovery funds used for deficit reduction. McClatchy: "More than a quarter of the $20 billion in Housing and Urban Development relief funds that were earmarked for Gulf Coast states after Hurricane Katrina remains unspent five years after the storm ... Coburn suggested some of these funds could be used to help cover federal budget deficits and said that 'serious questions need to be asked about whether this money was appropriately designated as emergency funding.' Officials in Mississippi, however, said that the unspent money is earmarked for needed recovery projects and that they are moving as fast as federal red-tape, litigation and arbitration and other hurdles will allow."
New Deal 2.0's L. Randall Wray takes issue with Alan Simpson's use of metaphor: "Simpson’s statement appears to imply that Social Security recipients are little more than newborn calves, seeking to suckle the teats of our hard-working cows. But wait a minute. About three quarters of all Social Security recipients are retirees — those who have worked hard all their lives, contributing to American production. ... How can we possibly compare that to the suckling of cows? The other quarter of recipients are dependents — widows, children, and people with disabilities."
Fannie/Freddie Report Could Shape Housing Reform
Federal Housing Finance Agency report says Fannie/Freddie role as guarantor of mortgages main cause of their problems. W. Post: "The regulator's pronouncement could be significant. As policymakers begin to focus on what might replace Fannie and Freddie, they talk about retaining a government role as guarantor of mortgages but reducing or eliminating any government-backed mortgage investment portfolios to protect taxpayer dollars."
NYT's Binyamin Applebaum says reports show Fannie/Fannie "did not cause the housing bubble": " In 2006, at the peak of the mania, the companies subsidized only one-third of the mortgage market."
Economist's View's Mark Thoma warns against scapegoating Fannie/Freddie: "...it's worth a reminder given the concerted attempt by anti-government types to make people think that Fannie and Freddie played a large role in causing the crisis ... placing the blame for the crisis in the wrong places will lead to ineffective and potentially counterproductive attempts to prevent this from happening again..."
Climate Friction
WH-enviro dispute over climate lawsuit heats up. W. Post: "'We're very angry and very disappointed that they would take this tack,' said [NRDC's] David Doniger ... An administration official, speaking on the condition of anonymity, replied that the EPA has been taking 'a series of regulatory actions indicating that it's moving forward on greenhouse gases and really making it inappropriate for the courts to step in and take on this issue.' ... The plaintiffs said the utilities' greenhouse emissions posed a 'public nuisance' because they contributed to climate change. They asked the court to order the utilities to reduce emissions 'by a specified percentage each year for at least a decade.'"
Friction between wind energy developers and military officials continues. NYT: "In 2009, about 9,000 megawatts of proposed wind projects were abandoned or delayed because of radar concerns raised by the military and the Federal Aviation Administration ... The impact of wind turbines on radar had been a back-burner concern for years, but it heated up in March, when the Defense Department put a last-minute halt to the $2 billion, 338-turbine Shepherds Flat wind project in Oregon ... The department eventually withdrew its opposition after an internal analysis indicated the effect on radar would not be as severe as initially thought ... However, the Pentagon soon raised concerns about another wind project in the area, saying it could interfere with the very same radar."
Another British newspaper retracts attack on UN climate panel. NYT: "Last December, Britain’s Sunday Telegraph newspaper published a 2,000-word article accusing Rajendra Pachauri, the chairman of the United Nations’ Intergovernmental Panel on Climate Change, of potential financial conflicts of interest. On Sunday, The Telegraph made an abrupt about-face, pulling the story from its Web site and apologizing to Dr. Pachauri."
Breakfast Sides
Sen. Dodd never held any nominee to the standard he suggests for Elizabeth Warren. HuffPost's Shahien Nasiripour: "A review of transcripts from past confirmation hearings shows that Dodd has never questioned the management experience of nominees to head federal agencies his committee oversees."
Immigration enforcement agency moves to clear case backlog, cancel deportations of those likely to gain legal status. NYT: "[Homeland Security Asst Sec John Morton's] memorandum refers to a particular group of illegal immigrants: those who have been detained in ICE operations because they did not have legal status, but who have active applications in the system to become legal residents. The memo encourages ICE officers and lawyers to use their authority to dismiss those cases ... if they determine that the immigrants have no criminal records and stand a strong chance of having their residence applications approved ... if an immigrant’s application for legal residence was ultimately denied, ICE could reinstate the deportation ... But Republican lawmakers said the Obama administration was moving toward a de facto legalization program..."
The American Prospect's Harold Pollack urges Congress to accelerate implementation of health reform: "...the [interim high-risk] pools can cover only a small minority of people in serious difficulty ... The best way to address these problems would be to accelerate the timetable for health reform -- for example by subsidizing states to start up the [health insurance] exchanges before 2014."
