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.
The Social Security Onslaught Begins
Billionaire Pete Peterson fired the firs shot in the next Social Security battle, with a television campaign to draw attention to "the nation's fiscal imbalances": "Moderate Democratic Sen. Evan Bayh (D., Ind.) endorsed a compromise solution of extending all the Bush-era tax cuts for two years and then allowing them to expire, becoming the second Senate lawmaker to back the plan this week. Bayh said given the weak economic recovery, it doesn't make sense to let any of the expiring Bush tax credits lapse. But he said the country is facing a longer term fiscal crisis, and therefore it wouldn't be affordable to renew the lower tax rates permanently. "We need to err on the side of growth for the next couple of years," Bayh said. "At that point, we have to pivot" and start to tackle the deficit, he said. Bayh was speaking to reporters at a press conference at the Newseum in Washington, D.C. He was speaking alongside Peter Peterson, who through the Peter G. Peterson Foundation, was launching a national television campaign drawing attention to the need to tackle the country's fiscal imbalances."
OurFuture.Org's Isaiah J. Poole responds to the latest Social Security Attack: "The Chicken Little campaign orchestrated by billionaire Peter G. Peterson to rally public support behind cutting Social Security was kicked up a notch on Tuesday with the launch of the $20 million "Owe No" campaign. With references to "a growing crisis" that will "threaten the livelihoods of Americans and our standing in the world," Peterson hopes to build consensus for policies that will persuade working-class Americans into swallowing a permanent state of austerity for themselves while the wealthiest grab even more for themselves. "Owe No You Don't" is the immediate response of the Strengthen Social Security coalition, of which Campaign for America's Future is a part."
Dean Baker, writing at TMPCafe, exposes the forces behind the assault: "The thing about Wall Streeters is that no matter how much money you give them, they always want more. Now they are using their political power and control over the media to attack Social Security. This effort is being led by billionaire investment banker Peter Peterson. Mr. Peterson has personally profited to the tune of tens of millions of dollars from the "fund managers' tax subsidy," an obscure provision of the tax code that allows billionaires to pay a lower tax rate than schoolteachers and firefighters. However, Peterson believes in giving back. He has committed $1 billion to an effort that is intended to take away the Social Security benefits that people have worked and paid for."
Joan McCarter at Daily Kos predcits the next step: "With Peterson setting the stage, the next step will come next week, on November 17 when a task force set up by Alice Rivlin and former Sen. Pete Domenici. Their intent? "The ad hoc group, which predates the real deficit commission, is working on a plan that will address the taboos the Obama commission is skirting, including raising taxes and cutting Social Security and Medicare, Rivlin says." Expect a real emphasis on the cutting Social Security and Medicare. Rivlin is also on the catfood commission, and has long been an advocate of cutting Social Security. Her membership in both groups is telling. Here's one very likely scenario: the Rivlin commission is poised to issue extremely harsh recommendations for Social Security and Medicare cuts, and promote a basic false narrative that Social Security contributes to the deficit; that cutting Social Security is inevitable; that long term austerity for the nation should be aimed at social programs; and that reducing the deficit should be addressed by cutting these programs rather than through tax increases."
At Progressive Blue, fake consultant pins down Peterson's motives: "So here's the dish: a limited partnership corporation called The Blackstone Group, through years of trading in real estate, operating hedge funds, giving financial advice to other companies and governments, and buying and selling companies (Hilton Hotels is one of theirs, the company that makes Corexit, the oil dispersant, is another), made its co-founder and former Chairman Peter G. Peterson a more-than-billionaire; a billion of that went to endow a Foundation that bears his name. The Foundation has a particular interest in things budgetary and governmental, and they are seen as one of the groups most looking to change the way Social Security works today. ...Managing the Federal Government's Social Security money, for a handsome fee, would be a spectacular business opportunity for Pete Peterson and The Blackstone Group, and to help create the environment where that can happen, the Peterson Foundation is dropping $20 million on a TV ad campaign to try to convince you to get interested in privatizing Social Security, too."
Social Security panic lies ahead, writes Paul Rosenberg, and bloggers are joining the fight: "Three things, right off the bat: First, it's going to get ugly, fast. The oligarchs coming after Social Security have invested in this massively for decades now. Pete Petterson alone has invested a billion dollars, and is about to spend $8 million more in an advertising scare-fest, building up to the release of the Deficit Commission recommendations & accompanying legislative battle. Second, it's totally bogus. Social Security has nothing to do with the deficit (it's separately funded, duh!) and is solvent for as far as the eye can see--until well into the 2030s at full benefits, and 75% after that, which is still a larger benefit than today, even if we do nothing. If we scraped the cap on incomes taxed, so millionaires paid the same percentage tax as the rest of us, we could not only fill the shortfall decades from now, we could increase benefits by 2%. Third, we can win this thing. Just like we've won this fight every time before, even though we were told it was a done deal."
Economy Update
President Obama is in South Korea for the G-20 summit: "The president's visit to Seoul will include a meeting with South Korean President Lee Myung-bak and a meeting with Chinese President Hu Jintao. Obama is also scheduled to deliver a speech to U.S. troops in South Korea on Thursday, the Veterans Day holiday in the United States. Tensions about currency and trade are likely to run high at the G-20 meeting, which will be held Thursday and Friday in Seoul, the South Korean capital. Officials in China and the United States have accused the other of manipulating its currency at the expense of other economies. And the G-20 has acknowledged that the global economic recovery is advancing in 'a fragile and uneven way.' Widespread protests are expected at the summit, for which South Korea has mobilized its largest security force ever, according to the Yonhap news agency. A total of 50,000 police and riot police are being deployed, authorities told Yonhap."
The U.S. Trade deficit narrowed in September: "The United States trade deficit narrowed more than expected in September, despite near record imports from China, as a weak dollar helped American exports grow for the third consecutive month, a government report showed on Wednesday. The monthly trade gap totaled $44.0 billion, down from a revised estimate of $46.5 billion in August. Wall Street analysts had expected the deficit to narrow to about $45.5 billion. Exports rose a bare 0.3 percent to $154.1 billion. But that still was the highest since the depths of the financial crisis in August 2008, and included record services exports of $46.5 billion."
Jobless claims have fallen to the lowest level since July: "The number of Americans filing initial jobless claims last week fell to the lowest level in four months, reinforcing evidence the U.S. labor market is healing. Applications for jobless benefits declined by 24,000 to 435,000 in the week ended Nov. 6, lower than the median forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. The total number of people collecting unemployment insurance fell to the lowest level since November 2008, and those receiving extended payments also declined. Fewer firings are a first step to improvement in the labor market, followed by faster job and income growth that will help fuel gains in consumer spending. Bigger increases in payrolls are also required to bring down an unemployment rate that’s close to 10 percent."
The First Cut Is The Deepest?
The WSJ has more on Blue Dog Senator's "cuts with a catch" compromise: "The Democrats' proposal likely would require extensive compromise by lawmakers at a time when the two parties have been preparing for battle. Most Democrats, including President Barack Obama, have supported extending the current levels for the middle class, defined as families earning less than $250,000, while allowing them to expire for higher earners. Republicans and some Democrats want all the Bush-era breaks extended, including those for higher earners, at least for some period. Since the Republican victories in last week's midterm elections, Mr. Obama has signaled he is also willing to consider some extension for higher earners, but the two sides remain divided on the details. The two parties also remain far apart on what a tax-system overhaul would look like. Republicans tend to focus on streamlining and simplifying the tax code, and making it more competitive for U.S. companies overseas. Many Democrats do too, but many also view tax-code changes as an important element of deficit reduction."
CSM's Howard Gleckman asks "Does the GOP really want to slash spending in a weak economy?": "According to an Oct. 27-30 Pew Foundation survey, even among likely voters the “job situation” was nearly twice as important as the deficit. That suggests an awful lot of people want government to do more to create jobs, not less. However, if the GOP does not act quickly on spending, it risks alienating a fidgety base that wants action right away. In this way, massive immediate spending cuts are to conservative activists what a single payer health system was the Democratic hard-core. This would be the same disappointed Democratic base that tuned out in 2010. Power in Washington has become evanescent (just look at the past three elections). Obama felt the need to push health reform while at the height of his influence. GOP activists may feel the same way about spending. They should be wary. Power in Washington has become evanescent (just look at the past three elections). Obama felt the need to push health reform while at the height of his influence. GOP activists may feel the same way about spending. They should be wary. This isn’t to say that some immediate well-targeted spending reductions are a bad idea. They are not. But the mindless across-the-board cuts (excluding, of course, defense, veterans benefits, homeland security, and Medicare), the GOP has in mind seem both clumsy and counterproductive in today’s economy. Just as Democrats paid a steep price for pursuing health reform at a time of high unemployment, so may Republicans pay dearly if they try to rapidly shrink government while the economy remains weak. Ideological purity is one thing. But it rarely trumps bad timing."
Republicans are moving the goalposts on the Bush tax cuts, writes DKos' brooklynbadboy, promising Democrats a less than happy new year: "Republicans are more than happy to run down the clock and increase the pressure. Can you see Senate Democrats shaking in their boots as December 31 nears? I can. This is why President Obama should turn the tables on that argument by pointing out, repeatedly, the truth: It was President Bush and Republicans who created this expiring tax cut business in the first place. By making it clear that it is Republicans who created this mess, he can then step in with a new "Obama Permanent Tax Cut for the Middle Class." The only way to win this thing is to outflank the GOP and go on offense, not continuing to offer a weak posture that only encourages them to keep moving the goalposts."
Andy Ostroy asks why Republicans won't answer one simple question: "They ran on a platform almost exclusively about shrinking government and America's $14-trillion debt. And they got elected, sweeping the House with 63 seats and six Senate pick-ups. But since election day, ask any Republican in the House and Senate exactly which government programs they plan to cut in order to cut the $1.3-trillion deficit and they become back-peddling, rambling idiots, offering more spin than the washer/dryer section at Sears. Sunday morning's news shows, the first since Democrats received what President Obama called a 'shellacking,' were awash with partisan rhetoric about swollen debt, angry voters and 'taking the country back.' But substance was in short order."
The GOP may be at war with itself over some cuts, as Sen. DeMint forces a battle over earmarks: "Fresh off the tea party's show of election might, GOP Sen. Jim DeMint said Tuesday he'll force a showdown next week with Senate Minority Leader Mitch McConnell and other old guard Republicans over 'earmarked' pet projects that DeMint and other victors last week made a symbol of out-of-control deficit spending. The South Carolina Republican, buoyed by support from six GOP freshman, is optimistic he'll win a change in internal GOP rules to effectively bar any Republican from seeking earmarks. ...McConnell, however, isn't enthusiastic about the idea of a ban now. And he finds himself caught in the middle of an unwelcome battle dividing his party and opening it to criticism from anti-pork tea party activists who helped Republicans take back the House and elect several anti-earmark senators. House Republicans already have such a rule in place and are about to renew it, but both House and Senate Democrats are strongly opposed. Earmarks include road and bridge projects, grants to local police department and community development projects, among many, many others."
The Investigations Begin ... With Health Care
The GOP promise of non-stop investigations is already beginning ... with health care reform: "Republicans plan to use the investigative powers of Congress to go after President Barack Obama's health care overhaul, and they're focusing on questions uppermost in the minds of consumers: What's it going to cost me? Can I keep the coverage I have if I like it? Republicans can call hearings and compel testimony, and Obama has no veto power to stop them. In the House, they'll control three major committees with a mandate to poke around on health care, subpoenas available if needed. In the Senate, they'll have added leverage on two key panels, so their demands can't be easily ignored. ...The first question for the GOP is where to start. The overhaul reaches nearly every corner of society in its attempt to cover more than 30 million Americans now uninsured. GOP lawmakers on both sides of the Capitol are clamoring to question Medicare administrator Don Berwick, who was appointed without Senate confirmation and has yet to testify before committees that oversee his program. ...Republicans also want to grill Berwick's boss, Health and Human Services Secretary Kathleen Sebelius. They have questions about costs and benefits of the overhaul for working families."
Richard Kirsch, at HuffPo, explains why Republicans are bent on repealing health care reform: "Why are John Boehner, Eric Cantor and Mitch McConnell so intent on stopping health care reform from ever taking hold? For the same reason that Republicans and the corporate Right spent more than $200 million in the last year to demonize health care in swing Congressional districts. It wasn't just about trying to stop the bill from becoming law or taking over Congress. It is because health reform, if it takes hold, will create a bond between the American people and government, just as Social Security and Medicare have done. Democrats, and all those who believe that government has a positive place in our lives, should remember how much is at stake as Republicans and corporate elites try to use their electoral victory to dismantle the new health care law."
Suzy Khim, at WaPo, explains what happens if states ditch Medicaid: "The underlying rationale is that sacrificing the health coverage of poor people would be a worthwhile move if it solves the state's budget crisis. If you're a purist in opposing the welfare state — even at significant human cost to the most vulnerable — it's a logical argument to make. But even if we all agree the goal is fiscal solvency, there's also a chance that gutting Medicaid could end up backfiring. The uninsured poor have already been resorting to hospital emergency rooms for care, and hospitals, in turn, have relied on state governments to cover the costs. If Medicaid coverage were pared back, the hospital ER would likely become the de facto safety net: The number of uninsured ER visits would invariably rise, and the state government would end up paying the price anyway. Texas's own comptroller, Susan Combs, has admitted as much: In a 2005 paper, she proposes that the state's Medicaid should be slashed and hospital reimbursements upped instead. But ER visits are extremely expensive, and they won't serve as a particular cost-effective solution to eliminating insurance, which at least gives patients other options for care."
More Foreclosure Woes
Goldman Sachs and other lenders are disclosing more of the problems in their mortgage servicing units: "Goldman said it did not expect the suspension of evictions and foreclosures to 'lead to a material increase in its mortgage servicing-related advances'. It said that, as of September 30, its mortgage servicing rights were not large enough to have an impact on the overall firm. Both banks face demands by investors to repurchase mortgages that failed to meet underwriting guidelines. JPMorgan said its liabilities from such demands rose to $3.3bn at the end of the third quarter, against $2.3bn three months earlier. Cambridge Place Investment Management and Charles Schwab have sued JPMorgan and other lenders over repurchase claims. Goldman said that while there remained 'significant uncertainty' surrounding such demands, its loss from repurchase requests had so far been 'immaterial'."
Meanwhile, homeowners are facing foreclosure notices in the midst of loan modification efforts: "Union County homeowner Barry Lancett signed two agreements with Wells Fargo this year to modify the terms of his mortgage but still received a disturbing piece of paperwork: a foreclosure notice. 'A deputy comes to your door and delivers it in front of the community,' said Lancett, who later avoided foreclosure but is still dealing with lingering issues. 'It was humiliating, to say the least.' His experience is one of the biggest frustrations for struggling homeowners - getting hit with a foreclosure proceeding at the same time a loan modification is being worked out with a bank. Recent laws and regulations in North Carolina are supposed to prevent this, but officials say they're still getting complaints from consumers. Now it's an issue coming under scrutiny from attorneys general investigating allegations that lenders mishandled foreclosure-related paperwork."
A Row Over High Speed Rail
The federal government is billing New Jersey for $271 million in tunnel costs: "The Obama administration wants prompt repayment of more than $270 million in federal grant money dedicated to New Jersey for a rail tunnel to Manhattan that became a political flashpoint when the state withdrew from the project. In a letter sent on Monday to New Jersey Transit Executive Director James Weinstein, the Federal Transit Administration (FTA) said the state "must immediately repay all the federal assistance" spent so far on the project canceled by Gov. Chris Christie due to costs. This includes $271 million, plus interest and penalties, that already had been sent to the state. In addition, FTA is canceling nearly $80 million in funds that were scheduled to be delivered."
The Administration has a message for states: Proceed with rail projects or give back the money: "In some post-election hardball between the Obama administration and newly-elected Republicans, Transportation Secretary Ray LaHood is threatening to take back stimulus funds from states if they do not follow through on proposed rail projects. CNN obtained copies of letters LaHood sent to incoming Republican governors in Ohio and Wisconsin who have stated their opposition to rail projects already underway in their states. In the letters, LaHood said a rail link between Cleveland, Columbus, Dayton and Cincinnati in Ohio, and a high-speed rail connection between Chicago, Illinois, and Milwaukee, Wisconsin, are vital to economic growth in both regions. Lahood wrote that he respects the power of governors to make decisions for their states, but, 'There seems to be some confusion about how these high-speed rail dollars can be spent.' To Wisconsin's Gov.-elect Scott Walker, LaHood said that none of the funds can be used for roads or any other projects. He went on to say, 'Consequently, unless you change your position, we plan to engage in an orderly transition to wind down Wisconsin's project so that we do not waste taxpayer's money.' That letter was delivered on Monday. A similar letter was sent to Gov.-elect John Kasich in Ohio on Tuesday. In that letter, LaHood mentions the thousands of jobs that would be created with the construction of a rail link between the state's largest cities."
Breakfast Sides
Ezra Klein chronicles the work of the "Do-Lots Congress": "They lost the election, certainly. And many of them lost their jobs. But the point of legislating isn't job security. It's legislation. And on that count the members of the 111th Congress succeeded wildly, even historically. There was health-care reform, of course. The bill is projected to cover 32 million Americans while cutting the deficit by about $140 billion in the first 10 years -- and by hundreds of billions more after that. It creates competitive insurance markets in every state and makes it illegal for insurers to turn you away or jack up your premiums because you have a preexisting condition. It empowers an independent commission to cut Medicare's costs and ratchets back the tax break for employer -- sponsored health-care insurance that's been at the root of many of our system's dysfunctions. It begins paying doctors for quality rather than volume. Even Mark McClellan, who directed the Centers for Medicare & Medicaid Services under George W. Bush, says the bill is 'an important step.' Oh, and next year, chain restaurants will be posting calorie and nutritional information on their menus and drive-through windows. That was the health-care bill, too."
Eugene Washington orders up a big cup of Mojo for President Obama: "Well, it may be unfair, but presidents aren't allowed to be discouraged. They aren't allowed to talk about the limitations of the job, or the fact that they are held accountable for everything from inclement weather to the lack of a championship playoff system in college football. Presidents are not permitted to acknowledge familiarity with the concept of 'one step back.' And good things aren't 'going to happen,' in the presidential lexicon. They're already happening. Maybe Obama will find that misplaced mojo during his trip to India and other points in Asia. But as Rep. John Boehner, the presumptive new speaker of the House, says, it's the president who 'sets the agenda' in Washington. The day after George W. Bush got thumped in the 2006 midterms, he dismissed Donald Rumsfeld as defense secretary. A good old-fashioned Cabinet shuffle would be one way of letting voters know that the administration intends to move forward -- rather than bemoan having to govern in lousy economic times. And besides, the White House has caught an incredible break: In terms of positive, forward-looking leadership, the Republicans are offering even less."
Rev. Jesse Jackson says that Republicans are about to show their true colors: "Republicans ran as wolves in sheep's clothing. Sobered by Tea Party challenges in their primaries, Republican candidates suddenly became populist tribunes. They indicted Democrats for running up deficits to bail out the banks without doing anything about jobs, even as incoming House Speaker John Boehner gathered the bank lobbyists together to offer Republicans as their protectors. ...The wolf is out. The poor, the unemployed, the children cannot accept these priorities in silence. At the time of his death, Dr. King was working on building a Poor People's Campaign. He thought it vital to bring the poor, across lines of region, religion and race, to Washington, along with people of conscience, to demand basic rights: the right to work, the right to a livable wage, the right to a decent education and the right to health care. Washington must hear once more from voices beyond the Beltway. It is time to march."
