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.
Boehner Ready To Deal On Bush Tax Cuts?
House Min. Leader Boehner flinches on extending Bush tax cuts for the wealthiest. CBS: "'But aren't you kind of holding the tax cuts for the lower income people, the people making less than $250,000, hostage, so you can give those tax cuts to the upper brackets' [Face The Nation's Bob] Schieffer asked. 'There are a lot more people below those top brackets than are in . . . those upper brackets. Why wouldn't you want to do something for those folks?' 'I want to do something for all Americans who pay taxes,' Boehner said. 'If the only option I have is to vote for some of those tax reductions, I'll vote for it.'"
Further confirmation from anonymous Boehner aide. WSJ: "A Boehner aide said the congressman would accept a compromise that doesn't extend the Bush tax cuts for the wealthiest Americans if talks remain stalled over the next three weeks. The aide said the congressman's remarks were designed to combat President Barack Obama's remarks Friday that Republicans were 'holding middle-class tax relief hostage' by insisting that all cuts be extended. But the aide said the remarks could mark an opening for bipartisan talks on what is expected to be a rigorous debate this fall.
Skeptical" reaction from WH, reports McClatchy: "White House spokesman Robert Gibbs welcomed Boehner’s 'change in position and support for the middle class tax cuts,' but seemed skeptical about his sincerity. '…time will tell if his actions will be anything but continued support for the failed policies that got us into this mess,' he said..."
Booman calls Boehner's move "a curve and a cave" on taxes: "...the Republicans want to avoid giving the impression that they are holding up tax cuts for 97% of the people just to preserve $100,000/year tax breaks for millionaires, and they're hoping a few Democrats will help out the rich on their own. Of course, this strategy only works if the Senate Republicans actually allow a vote. That means, they'd have to prevail on an amendment prior to cloture, or those tax cuts for the rich are going away. Nevertheless, this strategy eases pressure on the Democrats because they know they can pass what the president wants if they just hold together ... If the Democrats fail to do so and buck the president, they'll have a hard time blaming the Republicans for it ... this strategy of avoiding the appearance of hijacking 97% of the people's tax cuts won't work if they actually hijack them with a filibuster."
Economist's View's Mark Thoma suggests a Democratic response to Boehner: "That's very Keynesian of him to have the concern that 'raising taxes in a very weak economy is a really, really bad idea,' and there's an easy response for Democrats ... if that's your concern, why not transfer the tax cuts, temporarily, to lower income groups who are much more likely to spend the money, or use it to backfill state and local budgets to stop further job losses?"
Several right-leaning House Dems call for extending Bush tax cuts to the wealthiest. Politico: "Reps. Jim Matheson (Utah), Glenn Nye (Virginia), Melissa Bean (Ill.) and Gary Peters (Mich.) drafted the letter and are working to gather support, mostly from the moderate Blue Dog and New Democrat coalitions, for at least a temporary extension of the rates for top income earners as well as those in the lower brackets."
Geithner Warns Against Austerity
Treas. Sec. Geithner warns against "premature restraint" on the economy, in WSJ interview: "If the government does nothing going forward, then the impact of policy in Washington will shift from supporting economic growth to hurting economic growth."
HuffPost's Robert Kuttner calls on President to build on his infrastructure proposal: "End the strip-tease and nominate Elizabeth Warren ... Make it clear that your administration will not support cuts in Social Security ... Sign an executive order requiring that companies that bid on government contracts have good wages and working conditions, and follow labor laws..."
The New Yorker's James Surowiecki recounts why the stimulus worked, but no one noticed: "...the very things that made the stimulus more effective economically may have made it less popular politically ... because research has shown that lump-sum tax refunds get hoarded rather than spent, the government decided not to give individuals their tax cuts all at once, instead refunding a little on each paycheck. The tactic was successful at increasing consumer demand, but it had a big political cost: many voters never noticed that they were getting a tax cut. Similarly, a key part of the stimulus was the billions of dollars that went to state governments. This was crucial in helping the states avoid layoffs [but] saving jobs just isn’t as conspicuous as creating them. Extending unemployment benefits was also an excellent use of stimulus funds, since that money tends to get spent immediately. But unless you were unemployed this wasn’t something you’d pay attention to ... while the plan may end up having a transformative impact on things like the clean-energy industry, broadband access, and the national power grid, it’s hard for voters to find concrete visual evidence of what the stimulus has done..."
California gas line explosion tragic reminder of weakening infrastructure. Bloomberg: "Much of the underground infrastructure in the U.S., which also includes water and sewer pipes, has been in use for more than 50 years and needs to be evaluated and, where needed, replaced ... Investment is needed in aging infrastructure of all types, including natural gas, water and the U.S. electricity grid, which can create jobs, and protect public health and safety, [said Environmental Defense Fund's] Scott Anderson..."
Robert Reich breaks down the two types of American corporations — and their politics: "Some giant American corporations depend on a buoyant American economy and a world-class industrial base in the United States. Others are far less dependent. What comes out of Washington in the next few years will reflect which group has most political clout ... The first group includes national telecoms like Verizon and AT&T that need a prosperous America because most of their sales are here. Same with finance companies like Bank of America and Travelers Insurance [and] certain giant chains like Home Depot ... The second group includes companies like Coca Cola, Exxon-Mobil, Hewlett-Packard, Intel, and McDonalds, that get substantial revenues from their overseas operations."
China Not Moving On Currency
Treas. Sec. Geithner acknowledges China has done "very, very little" to reform currency so far, in WSJ interview: "'It’s very important to us, and I think it’s important to China, I think they recognize this, that you need to let it move up over a sustained period of time,' Mr. Geithner added. His comments will likely fuel efforts on Capitol Hill to take more punitive action towards China over its currency..."
NYT's Paul Krugman counters fears stopping US from confronting China on currency: "... fear of what would happen if the Chinese stopped buying American bonds ... is completely misplaced: in a world awash with excess savings, we don’t need China’s money — especially because the Federal Reserve could and should buy up any bonds the Chinese sell. It’s true that the dollar would fall if China decided to dump some American holdings. But this would actually help the U.S. economy, making our exports more competitive. Ask the Japanese, who want China to stop buying their bonds because those purchases are driving up the yen."
New Global Bank Rules On Capital Requirements
International bank regulators reach compromise on capital requirements. Bloomberg: "[The deal] more than doubles capital requirements for the world’s banks while giving them as long as eight years to comply ... The definitions of what counts as capital and how risk is assessed have also been tightened."
Fed blesses, reports. W. Post: "Major U.S. bank regulatory agencies, including the Federal Reserve, endorsed the changes in a press release Sunday afternoon. U.S. Treasury Secretary Timothy F. Geithner said the Treasury welcomed the group's work and would begin reviewing the details..."
Bloomberg finds critical reaction from Simon Johnson and Joseph Stiglitz: "'They couldn’t do nothing after the greatest financial crisis since World War II, so they ended up doing the minimum. Even people I know who are pessimistic about the process are going to be disappointed. You should have gotten to 15 percent one way or another,' [Johnson] said of capital requirements ... 'It’s a move in the right direction. One should see these actions as part of trying to correct what is clearly a dysfunctional banking sector. While it’s understandable, given the weaknesses and the failings of the banking system, that one would want to be slow in introducing these increased capital requirements, delay is exposing the public to continued risk[,' said Stiglitz.]"
Positive reaction from Reuters' Felix Salmon: "Possibly the most important thing here is the existence of the first column, setting minimum standards for common equity — which is also known as core Tier 1 capital. Such standards did exist in the past, but they were set extremely low, at just 2%, and so were generally ignored. As of now, common equity is the main thing that matters. No more throwing any old garbage into the Tier 1 bucket and calling it capital: the new standards for common equity are significantly tougher than the old standards for Tier 1 capital in total."
Push to strengthen Wall St. reform law with greater transparency. Bloomberg: "The Dodd-Frank Act, designed to prevent future financial crises, does little to improve investors’ ability to analyze results at the five biggest U.S. firms that trade securities."
Zach Carter suggests Wall Street needs handcuffs, not more sweet talk from the President: "The Washington Post has published a very silly op-ed by Chrystia Freeland accusing President Barack Obama of unfairly "demonizing" Wall Street. ... For the past decade, fraud has been a mainstream business on Wall Street ... After the savings and loan crisis, more than 1,000 bankers went to jail for fraud, and the S&L bust was a much smaller debacle than the frenzy that took down Wall Street in 2008 ... the only reason we haven't we seen throngs of financiers in handcuffs over the past two years is precisely because Obama has been listening to people like Chrystia Freeland, trying to avoid 'demonizing' bankers who broke the law."
NYT edit board says banks not doing enough on executive pay: "Last year, the Financial Stability Board created by the Group of 20 leading economies agreed on new standards intended to discourage the kind of excessive risk-taking that ravaged the financial system. But national regulators around the world are taking vastly different approaches to implementing the standards. The Federal Reserve and other banking watchdogs must remain ready to tighten the rules to stop banks from moving their most risk-hungry bankers and operations to the least-regulated locales."
FT's Clive Crook says we have failed to muffle the banks: "If US President Barack Obama and the Democrats are punished as brutally in the mid-term elections as seems likely, their handling of the banks will be one reason for it. The administration's critics come from every point on the political spectrum but they agree about this: the banks pushed the country into a crisis, got bailed out and walked away scot-free."
Energy Bills Still On Table
As Congress returns to DC today, CQ checks in on energy legislation: "It is unclear if Democrats have made progress in resolving an intraparty split over a provision in Reid’s bill that would eliminate the $75 million cap on economic liability from offshore oil spills ... Sen. John D. Rockefeller IV, D-W. Va., who will join Minority Leader Mitch McConnell, R-Ky., and other coal-state lawmakers in addressing a pro-coal rally outside the Capitol on Sept. 15, has said he will hold Reid to a promise to allow a floor vote on his bill that would delay the EPA’s authority to regulate greenhouse gas emissions for two years."
Governors step up pressure for higher renewable energy standards. The Hill: "The bipartisan Governors’ Wind Energy Coalition is sending a letter Monday to Senate Democratic and Republican leaders touting a renewable electricity standard, or RES, as an economic jolt that will help the U.S. regain the ground lost to Europe, China and India in growing renewable energy markets. An RES would require many utilities to supply growing amounts of power from sources like wind, solar and biomass power over the next decade."
China showing how to cut carbon emissions while growing economy. W. Post: "They did not simply shutter factories in Tangshan, a major steel- and cement-producing center, but replaced them with cleaner-burning plants ... 'We shut down 1,500 highly-polluting factories,' Huang [Huikang, Tangshan's vice-mayor] said, adding that even as he did so the city's gross domestic product doubled twice in the past five years, to $400 million ... But the lack of a national accounting standard for emissions makes it difficult for independent observers in China and elsewhere to monitor how much progress is being made."
DC-area soon to get "smart meters" to improve household energy efficiency. W. Post: "Last year, Pepco was awarded a $168.1 million grant as a part of the Energy Department's stimulus program to promote smart-grid technology. That funding will go toward the full $300 million cost of deploying the meters."
Top Health Reformer Speaks Up
Obama's Medicare chief Donald Berwick today delivers first speech since appointment. Time: "Interest in his remarks will be high because Berwick is perhaps the single most powerful person in American health care ... As part of the new Affordable Care Act, Berwick will begin the process of cutting some $500 billion from Medicare — largely by eliminating subsidies for the private insurance program known as Medicare Advantage .... lay the groundwork for adding 16 million Americans to the Medicaid rolls [and] head up an effort to reform Medicare through a series of pilot projects that hold perhaps the greatest hope for slowing the runaway health care spending..."
Right-wing constitutional challenge to heath care reform comes to Florida court this week. LAT: "Florida Atty. Gen. Bill McCollum has chosen a favorable forum for the lawsuit. He filed the complaint in Pensacola, in the conservative northern district of the state, and it was assigned to U.S. District Judge Roger Vinson, an appointee of President Reagan. From there, the case would probably move to the U.S. Court of Appeals in Atlanta, which also has a conservative reputation."
TNR's Harold Pollack lambastes GOP proposal to scrap tax compliance provision with reduced funds for health care: "Should we promote public health by providing extra funds for HIV prevention, cancer screening, flu vaccination, and the like? Or should we zero out these funds in order to repeal a small health reform provision that clamps down on rampant tax evasion? ... Some prominent Republicans want it to choose the latter, although you likely won’t hear about it—at least, not in those terms."
Raising Retirement Age Means Less Retirement
NYT looks at impact raising the Social Security retirement age would have on blue-collar workers: "A new analysis by the Center for Economic and Policy Research found that one in three workers over age 58 does a physically demanding job ... that can be radically different at age 69 than at age 62. Still others work under difficult conditions, like exposure to heat or cold, exposure to contaminants or weather, cramped workplaces or standing for long stretches ... [Cooper Tire worker Jack] Hartley had planned to retire at 58, but he and his wife had high medical expenses, and the company froze one year of its pension plan, reducing benefits. He is, he said, 'stuck here.'"
