MORNING MESSAGE: Only 6% Prioritize Simpson-Bowles Agenda
Only 6% of Americans want Washington to prioritize deficit reduction, yet we are. OurFuture.org's Richard Eskow: "Nearly ten times as many people, 56%, want it to focus on creating jobs and fixing the economy. Guess which set of policies is the center of attention in Washington right now? ... creating jobs and spurring economic growth? Nobody's even discussing it ... if the Democrats propose popular [jobs] bills that fail, people will understand why they failed. They'll see who's representing the 90% and who's representing the 6%."
TAKE ACTION: Tell the President: Reject Social Security Cuts.
No Lines Drawn In Tax Cut Talks
Dems split on Bush tax cuts. Politico: "House liberals and progressive groups stepped up their campaign against cutting a deal of any kind with Republicans ... But moderate Democrats had their own ideas, too. Arkansas Sen. Mark Pryor questioned whether it was wise to permanently renew any tax breaks, given the extent of the national debt. Meanwhile, at least two other Senate Democrats floated compromise proposals. Republicans, however, weren’t showing any interest in alternatives ... Democrats said they are uncertain about where the president will draw the line in the negotiations."
Progressive Democrats are urging a vote on only extending the Bush tax cuts for the middle-class:: "... Dem Reps. Raul Grijalva and Lynn Woolsey, the two co-chairs of the House Progressive Caucus, have endorsed this approach, sending a letter to Nancy Pelosi asking her to carry it out ... It would force Republicans to vote for Obama's proposal, or against a middle class tax cut. By contrast, a phony 'compromise' on a temporary extension of all the cuts would only muddy all these waters further."
Another compromise floated: extend the Obama tax cut too. W. Post: "As lawmakers prepare for a meeting on the topic that the White House has set Thursday, various options are bubbling up, including Schumer's proposal to increase the income threshold from $250,000 to $1 million and a plan by Sen. Mark Warner (D-Va.) to wipe out the upper-income cuts and replace them with $65 billion worth of tax breaks for businesses. Another idea calls for continuing all the breaks but demanding something from the GOP in return, such as an extension of Obama's signature Make Work Pay tax credit for the middle class ... Sen. Kent Conrad (D-N.D.) has proposed linking a temporary extension to a commitment to overhaul the nation's balky tax code."
CNBC echoing "bogus" GOP tax cut talking points, reports Wonk Room's Pat Garofalo: "The fact remains that exceedingly few small businesses will be affected if the Bush tax cuts for the rich expire ... CNBC is helping [Rep. Paul] Ryan distort the facts of the debate, to advocate continuing unaffordable and ineffective tax breaks for the very wealthiest Americans."
Sen. Min. Leader Mitch McConnell bows to Tea Party, gives up defense of earmarking funds for public projects. W. Post: "...an insurgent group of conservatives led by Sen. Jim DeMint (R-S.C.) had rallied enough senators to defeat McConnell if the issue came to a vote ... the Senate Republicans' earmark ban is not binding ..."
U.S. Chamber of Commerce looks to collect on its election investment. LAT: "[It] plans to announce a pro-business agenda that will include attacking federal regulations in four areas: labor, energy, healthcare and financial services. The business organization's leaders will announce their targets Wednesday, arguing that excessive government regulation is hampering economic recovery."
Simpson-Bowles Numerology
Dean Baker rips Simpson-Bowles for arbitrary cap on public spending at 21% of GDP: "One can only assume that the number 21 bears some sort of religious significance for Simpson and Bowles because it certainly makes no sense to have this sort of rule on policy grounds ... The standard way to determine the size of government is to have the government perform the services that are more efficiently and effectively done by the government than the private sector. If the total value of these services is less than 21 percent of the economy, that would be fine. On the other hand, there is no obvious problem created if it is more than 21 percent, except for those with religious beliefs about the number 21."
W. Post's Eugene Robinson praises Simpson-Bowles for putting military spending on the chopping block: "Bowles and Simpson properly classify defense spending as discretionary, meaning we are able to make choices ... But Bowles and Simpson don't state the obvious, which is that a much more effective way to cut defense costs would be to bring our troops home from Iraq and Afghanistan."
Conservatives Step Up Attack on Fed
Fed officials defend recent move, responding to attacks from American conservatives, foreign competitors. NYT: "'We have no goal in terms of pushing the dollar up or down,' [NY Fed Pres. William] Dudley said. 'Our goal is to ease financial conditions and to stimulate a stronger economic expansion and more rapid employment growth.' ... Mr. Dudley rejected the idea that the Fed might be setting the stage for uncontrollable inflation in years to come. He said the Fed had tools for draining the bank reserves sitting on its balance sheet."
GOP Rep. Mike Pence proposes stripping Fed of responsibility to pursue full employment. Mark Thoma incredulous: "Republicans oppose fiscal policy -- including things such as extending unemployment compensation and job creation initiatives to help to overcome severe conditions ... and they oppose monetary policy that tries to lower the unemployment rate. So, in essence, they oppose doing anything to help the unemployed during a recession."
Conservatives fund ad campaign attacking Fed and Bernanke. Politico: "To complaints from Democrats that they were politicizing the bank and weakening its independence, [GOP operative Dan] Senor and his allies retorted that it was Bernanke who has politicized the Fed by intervening in bond markets and aligning the Fed with Obama’s big-spending policies."
More evidence Obama's auto industry intervention worked, Wall Street goes ga-ga for GM. NYT: "First it was the Ford Motor Company that convinced skeptical investors that the Detroit automakers could make big profits again. Now General Motors is riding the same wave of investor enthusiasm, and is likely to fetch a higher price than previously anticipated for its initial public stock offering, expected on Thursday ... The high level of investor interest underscores how extraordinarily Detroit has changed since its senior executives went to Washington for emergency aid in the fall of 2008. The Rust Belt manufacturing sector has a new sheen for investors impressed by how much Detroit has slashed costs and improved the quality of its vehicles."
TARP Watchdog Fears Wider Damage From Foreclosure Scandal
TARP watchdog reports to Congress on foreclosure scandal today, possibly prompting new legislation. W. Post: "A congressional oversight panel is set to warn on Tuesday that a widespread problem of flawed and fraudulent foreclosure paperwork could upend the housing market and undermine the nation's financial stability ... Some lawmakers want to resurrect legislation that would give bankruptcy judges the power to order lenders to reduce the principal that homeowners owe. Others are pushing for some big banks to spin off their mortgage-servicing arms to avoid conflicts of interest. There's also discussion of the federal government replacing the industry's current system for tracking mortgages with one that would be subject to federal regulation. 'The risk is small that a bill gets through,' the financial lobbyist said. But, he added: 'We are taking it very seriously.'"
Watchdog to call for new stress tests on bank because of mortgage problems. Bloomberg: "...legal challenges to foreclosures and uncertainties in the housing market could threaten the financial system, a congressional watchdog said."
Bank of America also to testify to Congress today on foreclosure scandal. NYT: "Barbara J. Desoer, president of Bank of America Home Loans, plans to announce new initiatives like assigning a single case manager so homeowners do not get passed from one bank employee to another. The bank also will start providing checklists so borrowers know exactly where they stand in the modification or foreclosure process ... Bank of America officials insist their options are limited because investors have to sign off on modification of the loans they own. At the same time, they complain that the investors require a 'dual track,' in which the modification negotiations take place even as the foreclosure machine steams ahead."
Groping For Bipartisanship On Clean Energy
Blue-Green Alliance holds out hope for higher renewable energy standard in this congressional session. Mother Jones' Kate Sheppard: "... passing an RES is probably a longshot. But four Republicans are backing the effort, along with 21 Democrats."
Some optimism that electric cars can win bipartisan support in new Congress. The Hill: "[Dem Rep. Ed] Markey said lawmakers from Michigan — the heart of the U.S. auto industry — would lead the charge on electric vehicles ... Markey [has] introduced bills with bipartisan co-sponsors that would provide various grants, tax credits and other support for the technology."
GOP Rep. Darrell Issa backs off investigating climate scientists. The Hill quotes: “I will have limited resources and limited time. I am looking at things that fall between the cracks, but also I am looking for the largest dollars of waste, and although this is a significant issue, it may not be the issue that first comes to my committee, and we are willing to realize that I only have so many resources and so much time."
Coal-state Sen. Jay Rockefeller hopeful for vote to kneecap EPA on greenhouse gases. The Hill: "Rockefeller still expects Reid to give his two-year delay plan a vote in a lame-duck session [but] he is not even sure whether the lame-duck session will extend into December due to Republican posturing over extending unemployment insurance ... A vote on Rockefeller’s plan would be merely symbolic as the Democrat controlled House has no plans to take up his measure, which also faces an insurmountable veto threat by the White House."
Energy Sec. Chu presses China on green energy subsidies. AFP: "Chu said foreign firms, including Chinese companies, qualify for U.S. clean energy subsidies, but barriers, such as Beijing's local content requirements, exclude U.S. companies from receiving government help in China ... 'We would ask China to consider the same reciprocity, namely if a foreign company wants to come to China to set up manufacturing and production that it would be open to the same kind of help.'"
First Skirmish In New Health Care War?
Medicare chief to testify to Senate tomorrow. Politico previews GOP attack lines: "You’ve previously professed your 'love' for Britain’s National Health Service ... How can you and the Obama administration continue to insist that this [health care] law saves money? ... How will $500 million in Medicare Advantage cuts affect seniors? ... Why should these new bureaucracies stand between Americans and their doctors?"
Politico looks at early state efforts to set up health insurance exchanges: "As the federal government and states start to put together the building blocks of the health care overhaul’s insurance exchanges — Orbitz- or Expedia-like Web programs with which to buy insurance — they’re trying to avoid the hiccups experienced in the only two states with similar exchanges already in place today ... Cheryl Smith ... described Utah’s program as essentially a 'farmers market,' where insurers can offer their plans as farmers offer their produce at a market, with few requirements to participate. Massachusetts’s program is more complex; it has the authority to reject insurers’ premiums bids if it finds them to be too high, a feature that’s designed to leverage the buying power of the exchange."
Incoming GOP congressman and health reform opponent, demands his government health care. Politico: "'He stood up and asked the two ladies who were answering questions why it had to take so long, what he would do without 28 days of health care,' said a congressional staffer who saw the exchange ... 'Harris then asked if he could purchase insurance from the government to cover the gap,' added the aide, who was struck by the similarity to Harris’s request and the public option he denounced as a gateway to socialized medicine."
Breakfast Sides
The American Prospect's Paul Waldman girds for phony attacks on public employees: "... once again, the right is centering their assault on unionized workers around a tendentious, misleading figure: $120,000 a year ... The key to bringing down the deficit, they'll say, is firing federal workers and slashing the pay of the ones who remain ... To answer the obvious question: No, people working for the federal government don't make an average of $120,000 a year, and no, they don't make twice as much as private-sector workers ... this isn't about reducing the budget deficit; it's about attacking unions." More from Rortybomb.
Another vote on immigration reform possible. Politico: "Sen. Robert Menendez (D-N.J.), Rep. Nydia Velasquez (D-N.Y.) and Rep. Luis Gutierrez (D-Ill.) will meet with President Barack Obama Tuesday afternoon to talk about the chances of getting comprehensive immigration reform or the DREAM Act passed in the lame duck session ..."
