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.
What Drove Delaware Conservatives Over The Edge?
WSJ's Damian Paletta suggests Rep. Mike Castle lost his Senate bid because of his TARP vote: "Call it the curse of TARP. The defeat of Rep. Mike Castle in Delaware’s Republican Senate primary marks at least the fifth high-profile lawmaker to lose a primary after voting in October 2008 for the Emergency Economic Stabilization Act of 2008."
OurFuture.org's Bill Scher argues global warming drove Delaware conservatives to commit political suicide: "[Castle's] 'cap-and-trade' vote wasn't the only vote [he] took that put him at odds with conservatives. But it is literally at the top of Christine O'Donnell's list of reasons for opposing him ... This is the nightmare that GOP Sen. Lindsey Graham said he wanted to avoid back in October 2009 when he struck a preliminary climate compromise with Dem Sen. John Kerry."
Warren To Treasury?
Bloomberg reports WH considering making Elizabeth Warren a "counselor" to Geithner: "...Warren may be named a counselor to Treasury Secretary Timothy F. Geithner, who under the Dodd- Frank financial regulatory law is responsible for setting up the bureau before it becomes an independent agency housed at the Federal Reserve. While Warren’s job would be to help establish the bureau, she would be under Geithner..."
Dem Sen. Chris Dodd suggests Congress would cut off funding if Warren given interim appointment. HuffPost: "Dodd's twin arguments -- that the CFPB needs a director quickly, and that the director should go through the confirmation process -- are in apparent contradiction."
Rep. Barney Franks says an interim appointment "makes perfect sense." CQ quotes: "I have known for some time that, frankly, she would be interested in doing that and hasn’t seen herself as a long-termer ... She’s eager to set it up. I think she’d like to administer it some, but she’s not switching her career. I don’t think she’s planning to spend the next six or seven years in government."
No Tax Cut Consensus Yet
No Dem consensus on Bush tax cuts after nighttime caucus meeting. The Hill: "Rep. Chris Van Hollen (D-Md.) ... said party leaders were 'in listening mode.' He said that while 'there may well be a vote' on the tax cuts in the House, ultimately it would depend on what could get through the Senate. 'We’re talking about getting stuff done,' Van Hollen said when asked why Democrats would not simply call a vote based on Boehner’s comments."
Division among some Senate Dems. CQ: "Some members of the Democratic caucus, including Joseph I. Lieberman, I-Conn., and Ben Nelson, D-Neb., want to extend all of the tax cuts, at least temporarily ... Baucus argued that a one-year extension of all the tax cuts would create uncertainty for taxpayers ... Ron Wyden, D-Ore., has said he is wary of supporting any permanent policies, not necessarily because of the economic effect but because such policies would reduce the pressure to change the whole system ... Bob Casey, D-Pa., said other Democrats are reluctant to vote on the issue before the elections."
TPMDC's Christina Bellatoni further reports: "TPM spoke with several Democratic members on background and they confirmed that there was not a clear consensus to emerge out of the meeting. Most said they think leadership will put forward a vote to extend the middle class tax cuts only, but perhaps allow for a procedural vote that would satisfy those members who want to at least be on the record for extending the cuts for every income bracket. The members facing tough challenges want a vote before the election. Members without a challenge said they'd rather push it off since the cuts don't expire until 2011."
House Maj. Leader Steny Hoyer pledges to extend the middle-class tax cuts, pins planned expiration on GOP. TPMDC's Brian Beutler: "...Hoyer rolled out a new way of talking about the fight over the Bush tax cuts. Democrats, he said, are committed 'to absolutely ensure that Republican phasing out of the middle-class tax cuts will not happen.' 'That's what they adopted at the beginning of the Bush administration -- that they would phase it out, and it would end,' Hoyer said."
GOP Sen. Voinovich doesn't want to extend tax cuts for anybody. The Hill: "[He] is leaning against voting for an extension of tax cuts passed under President George W. Bush. 'My gut is probably no,' Voinovich told The Hill. 'I think I would probably not vote, period, for it.' Voinovich also said he would not vote only to extend tax cuts for middle-class families earning less than $250,000 a year. Voinovich said Congress needs to tackle tax reform..."
Matt Yglesias asks, "How screwed up is the tax policy debate?": "Jon Chait observes that even the middle class tax cuts being touted by the Obama administration will leave revenue unsustainably low. I would further add that while the bulk of the money involved in the middle class cuts will end up going to middle class people (who are numerous), rich people will, qua individuals, be getting a bigger tax cut. Meanwhile, Republicans joined by some Democrats want to also throw in a rich people only tax cut. Josh Barro points out that such a move 'would bring in federal revenues of just 18% of GDP over the next decade' whereas even Paul Ryan’s draconian budget 'roadmap' states that 19 percent of GDP is needed. On top of that, Benjy Sarlin reports that Ryan’s Roadmap isn’t draconian enough for some tea party types."
House Considers China Currency Crackdown
House Dems considering legislation to place tariffs on China in response to currency manipulation. The Hill: "...Rep. Tim Ryan (D-Ohio), the lead sponsor of the China bill under consideration, argued his bill could be 'tremendously helpful' to Democrats trying to rally their base in the fall ... Ryan and co-sponsor Rep. Tim Murphy (R-Pa.) have collected 100 signatures on a letter to House leaders urging a vote on their bill ... three dozen trade associations and business groups ... urged leaders of the House Ways and Means Committee in a letter Tuesday not to move forward ... The [Obama] administration has tried to hold off the Ryan measure and similar legislation in the Senate."
W. Post's Harold Meyerson urges both parties to get tougher with China on currency and trade issues: "This week, committees on both sides of Capitol Hill will plumb the conundrum of Chinese currency manipulation ... all well and good and long overdue, but Congress should really do more ... look at the pressure Wall Street puts on American companies to offshore manufacturing to China ... delv[e] into the 5,800-page complaint that the United Steelworkers filed last Thursday with U.S. trade officials documenting all manner of Chinese violations of World Trade Organization rules ... there's nothing laissez-faire about our Chinese competition, which raises a question for American conservatives: If they're opposed to state support for industries, shouldn't they back the steelworkers' complaint?"
Tim Duy sees Japan tag-teaming with China on currency manipulation: "I have a hard time faulting the Japanese. They are facing a serious deflation problem, and pumping Yen into the system is an appropriate response ... [But] if [Treas. Sec. Geithner] can't stop central banks from intervening in the Dollar, he really isn't going to be making much progress on reversing the deteriorating US trade deficit ... The absolute inability of US policymakers to seriously address a global financial architecture where a rule of the game is 'when in doubt, buy Dollars' will ultimately have serious consequences via disruptive adjustment..."
New Public Citizen reports finds "free" trade agreement haven't increased American exports. NYT: "...in the last 12 years, exports to the 17 countries with which the United States has free-trade agreements grew at a slightly slower pace than exports to other countries."
Bank Regulators Emboldened. Or Intimidated
W. Post's Steven Pearlstein sees American and international bank regulators finally asserting themselves: "I think we can be fairly confident that the regulators no longer believe, as Greenspan once did, that bank executives always know what is in the best interest of their own banks ... Regulators claim that they now see the folly of their over-reliance on market indicators, such as quarterly profits or current asset values, in assessing the financial health of a bank or the quality of its loans. Supervisors have been told to be more forward looking in their analysis and less optimistic in their assumptions about future profits and prices. Particularly for the larger institutions, the focus now is as much on the overall business strategy of the bank as it is on a review of the loan book."
Politico suggests bankers quietly happy with new international capital requirement rules: "Bankers aren’t saying this publicly, but privately they acknowledge they had feared the latest proposed Basel rules, to be considered by G-20 nations in November, could have been much tougher and gone into effect much more quickly."
Robert Scheer, in the new book "The Great American Stick-Up," writes that there are three myths we must "bust" to avoid being held-up again: "The first is that buyers and sellers are all logical and well informed about what they are doing, so the markets will always be 'corrected' to provide accurate price values. The second is that whatever happens in these 'free markets,' the general public will not be hurt—only irresponsible gamblers will lose their shirts. The third is that whenever the government gets involved, it will only screw things up; even if regulators only ask questions, it will poison the pond and spook the fish, to everybody’s detriment."
Acting head of Federal Housing Finance Agency breaks with Treasury on financing reform. W. Post: "'Recently there has been a growing call for some form of explicit federal insurance to be a part of the housing finance system of the future,' [Edward] DeMarco says in prepared testimony, scheduled to be delivered before the House Financial Services Committee. 'The potential costs and risks associated with such a framework have not yet been fully explored.' ... Geithner has argued that there is a strong case for the government to continue guaranteeing mortgages, but with tighter regulations."
Where Would Boehner Cut?
Where would Boehner cut, asks TNR's Jonathan Cohn: "Boehner's plan would mean a fairly drastic cut in discretionary spending: According to the Center on Budget and Policy Priorities, Boehner is seeking to reduce it by 22 percent, or more than $100 billion ... when you put it that way, in such abstract terms, it sounds pretty appealing to most people. But the specifics would probably alarm a lot of people: We're talking serious cuts to schools, public assistance, and services--the type that not just the poor but also the middle class would notice."
The Fiscal Times assesses where Boehner's axe would fall: "Though it’s impossible to predict exactly where the $100 billion in cuts would fall, [it] would require sharp cuts at civilian agencies ranging from NASA and the National Science Foundation to the Internal Revenue Service, the Securities and Exchange Commission and the Bureau of Prisons, based on GOP estimates. The plan could slash money for child care and education programs, including No Child Left Behind ..."
Kos finds the conservative agenda "unloved" and "unwanted" following the latest Pew poll: "Among the findings: 29% of Americans support extending all of the Bush tax cuts. 32% support repealing the newly passed health care law. 33% support replacing Medicare with vouchers."
Small Biz Bill Nears Passage
Filibuster broken on small business lending bill as two GOPers join Dems. W. Post: "The package of tax breaks and other aid includes a new $30 billion loan fund, administered by the Treasury Department, that would provide financing to qualified community banks that in turn vow to extend new loans to small businesses ... Reid and other Democrats have estimated that the legislation could create as many as 700,000 new jobs. Critics have questioned that figure, noting that expanded access to loans wouldn't cure the lack of consumer demand..."
Demand is the big issue for small businesses, not taxes or regulation. Economix's Catherine Rampell: "Much of the debate about how to spur growth and encourage hiring has focused on making the tax picture temporarily more business-friendly. But as you can see, the portion of small businesses citing taxes as their superlative problem has remained about the same — mostly in the 17-22 percent range, say — for about a decade."
W. Post's Ruth Marcus reminds that politicians regularly overstate the importance of small business: "Small businesses are job creators; they are also job destroyers, as firms fail ... The chief source of small-business job creation comes from a mere handful of firms ... that start small and prosper. Existing firms that change with the times and expand are another major source of new jobs, but that's a phenomenon that the bipartisan fetishization of small business studiously ignores.
Mark Thoma calls for a wide-ranging 21st century "New Deal" in oped for The Fiscal Times: "Taking steps to reduce the costs of changing jobs is a start. More government help matching workers and jobs along the lines that have been so successful in Denmark would be beneficial, as would enhanced portability for health insurance, tax credits for workers willing to relocate, effective job retraining programs, wage insurance, and unemployment compensation linked to industry or region-specific conditions ... the insecurity that working class households face could be reduced by enhancing Social Security to compensate for the loss of employer-based retirement programs, by making health care truly universal, by improving support for childcare..."
Josepth Stiglitz calls for a "better stimulus" in Politico oped: "While the first stimulus did work ... A combination of help to small businesses, tax breaks for firms that actually invest, increased infrastructure spending, extended unemployment benefits and the continuation of the 2001/2003 middle-class tax cuts — the kind of program that Obama is now putting forward — is the right medicine for the economy today."
Gridlock On Small Biz Tax Compliance
Both Dem and GOP attempts to drop business tax compliance provision in health care law fail on Senate floor. The Hill: "In a 46-52 vote, lawmakers killed an amendment sponsored by Sen. Mike Johanns (R-Neb.) that would have saved businesses and nonprofit groups from having to report an array of small and medium-sized purchases to the IRS ... The provision, which is estimated to raise $17 billion over 10 years to pay for a new prevention and public healthcare fund, requires businesses and other groups to file 1099 tax forms to report purchases from a single supplier that total more than $600 in a year. An alternative to Johanns’s amendment sponsored by Sen. Bill Nelson (D-Fla.) also fell short of passage. Nelson’s proposal would have increased the reporting threshold to $5,000 and eliminated the requirement for businesses with fewer than 25 employees. Nelson’s amendment failed by a vote of 56-42, four votes short of the 60 needed ... Republicans expressed concerns over the Nelson alternative because it would have been paid for by repealing a tax break for large oil-and-gas producers."
"GOP Rejects 1099 Compromise Despite Bipartisan Consensus On Underreporting Of Taxable Income" reports Wonk Room's Igor Volsky: "The sticking points are the offsets and as soon as the GOP abandons their politically motivated provisions, the 1099 requirements will likely be modified."
Harold Pollack defends his support for business tax compliance from charges of "elitism.": "Heroin users waiting six months to enter methadone treatment or uninsured people who need simple public health services are much more seriously inconvenienced by their predicament than a small business person who has an annoying and time-consuming problem with 1099 forms. Yet our supposedly-sclerotic political system responds with surprising urgency to the latter issues while often leaving the former largely unaddressed. I disdain the Johanns Amendment because it exemplifies precisely this bias towards the organized and the affluent. Small business has a problem that requires $17.1 billion in offsets to fix: Well lucky us. Here is this public health and prevention fund that is almost precisely the right amount."
Conservative Judicial Activism Aids Health Care Lawsuit
Reagan-appointed judge expected to advance right-wing challenge to health reform law. NYT: "...Judge Roger Vinson of Federal District Court said at the close of a two-hour hearing that he leaned toward denying the federal government’s motion to dismiss the lawsuit, on at least one count. That would end the jockeying over whether states have legal standing to challenge the law, and move the case to a full debate over its fundamental constitutional question: Is the federal government’s power so broad that Congress can require citizens to purchase a commercial product like health insurance?"
Jacob Hacker delves into the history of Social Security and comes up with lessons for health care reform, at HuffPost: "Democratic Senator Tom Harkin of Iowa rightly calls the health-care law a 'starter home,' with the need for plenty of renovation. Unfortunately, the home is not built yet, and the construction zone is in the path of a hurricane: the perfect storm of runaway costs and unbridled conservative attacks on the law. In short, reformers will discover the same painful truth made vivid by Social Security's stagnation after 1940: Maintaining the legislative status quo against the forces crying 'repeal and replace' is not enough. The reforms launched with the [Affordable Care Act] will need to be pushed forward or they will fall increasingly short."
Anti-EPA Climate Bill Will Get Vote, But Not This Week
Sen. Maj. Leader will allow vote to restrict EPA on climate, after Election Day. HuffPost: "Reid's commitment to give preemption a vote this year means that it is headed to the Senate floor during a lame-duck session, meaning that lawmakers will be less accountable for their votes."
Dems avert anti-EPA vote this week on Appropriations Cmte. Mother Jones' Kate Sheppard: "...Senate Democrats skirted the issue by limiting this week's markup to just executive branch and defense appropriations, leaving the portion that the question of EPA regulation to a later date.
Rep. Waxman says Dems will bring back climate legislation in 2011. Politico: "Asked if he’d push climate legislation next year if he’s still in a majority leadership position, Waxman told POLITICO, 'If we haven’t done the job completely this year, we’ll continue to fight it next year through the House and the Senate.'"
Breakfast Sides
More and more state government workers face pension cuts. AP: "Since 2008, New Jersey and at least 19 other states from Wyoming to Rhode Island have rolled back pension benefits or seriously considered doing do -- and not just for new hires, but for current employees and people already retired ... Only four states -- Florida, New York, Washington and Wisconsin -- had fully funded pension systems as of 2008. Part of the reason for the gap is that in tough times, states often skip paying their share into retirement funds ... Unions are on guard against the benefit cuts -- and the implication that workers are to blame for states' financial messes."
Reid includes immigration reform measure in defense bill. Wonk Room's Andrea Nill: "...Reid announced at a press conference that the bill will also include the Development, Relief and Education for Alien Minors Act, or DREAM Act as it is known — an immigration bill that would put undocumented youth who were brought to the U.S. as children on a path to citizenship through completion of higher education or military service ... when asked if he thinks he has the votes for the DREAM Act, Reid responded 'I sure hope so.'"
