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.
MORNING MESSAGE: Stop The Next Bad Deal -- The Debt Ceiling Fight
OurFuture.org's Dave Johnson: "If you think the tax cut fight led to a bad deal… it may also lead to an expectation by conservatives they will finally be able to cut, gut or shut the government in the coming fight over raising the debt ceiling. The President and Democrats in Congress should take steps now to keep them from thinking they can win that ... They are going to have to risk the wrath of the Fox News/Rush Limbaugh/Chamber of Commerce conservative noise machine, talk to the public and tell it like it is."
Are The Votes There?
"Stony response" from Senate Dems, reports W. Post: "Sen. Dianne Feinstein (Calif.) was among those who emerged unconvinced. 'I'm just staggered by the enormity of this package,' she said. Others were in full revolt. Sen. Bernard Sanders (I-Vt.) was one of three senators who interrupted Biden's presentation."
House Dems not yet on board. The Hill: "House Majority Leader Steny Hoyer (D-Md.) said ... Obama failed to convince Democratic leaders to support the deal during a White House meeting on Tuesday. 'There was a discussion. It took some time, but there was no agreement reached,' he said." May try to strip estate tax deal: "Speaker Nancy Pelosi (D-Calif.) on Tuesday escalated the Democratic criticism of the agreement and said the estate-tax provision was 'a bridge too far.'"
But USA Today suggests enough Dems will vote for passage: "...while they balked and in some cases blasted the plan ... a wide swath of Democrats left open the possibility of supporting the deal..."
Some conservatives rejecting deal too. TPMDC: "The influential anti-tax group Club for Growth and conservative kingmaker Sen. Jim DeMint (R-SC) both came out in opposition to the agreement, threatening the breadth of Republican support for the plan."
WH makes the stimulus case. W. Post: "...administration officials said the package would inject an extra $300 billion into the economy next year alone. Mark Zandi, chief economist for Moody's Analytics, predicted ... more than 1.6 million jobs next year ..."
NYT's David Leonhardt assesses the stimulus case: "Forecasting firms on Tuesday upgraded their estimates for growth and job gains over the next two years ... left-leaning policy experts said the package did more to create jobs than they had thought possible after the Republicans’ midterm election victories ... [But] no economist believes the new stimulus package will be big enough to make the economy feel healthy anytime soon ... By the end of 2012, the [unemployment rate] decline could be up to 1.5 percentage points ... still probably be near 8 percent ..."
OurFuture.org's Bob Borosage says the WH is "over-promising": "..., this is far more a deal to keep the economy from slowing than to get it going."
And President takes shots at left and right. McClatchy: "...he cast himself squarely in the middle of American politics, lashing out at the GOP for insisting on extending tax cuts for the wealthy, while also ripping liberals who pushed him to reject compromise with Republicans even if it means letting tax cuts for the middle class expire on Dec. 31."
W. Post's Harold Meyerson rips deal as maintaining income inequality: "The best we can say of the deal is that it largely perpetuates, and only occasionally worsens, the status quo - in particular, the three-decade status quo in which the rich get richer at ordinary Americans' expense."
Business groups backing the deal. LAT: "Business groups, including the U.S. Chamber of Commerce, the Business Roundtable and the National Assn. of Manufacturers, said they supported the deal largely because it would keep the rates from going up for two years."
Assessing the deal depends on your baseline, argues Tax Policy Center's Howard Gleckman: "If you assume the Bush-era tax cuts were going to be extended anyway (what wonks like to call the current policy baseline), this deal is a sweet tax cut across the board. But if you compare it to the tax law at the end of the Clinton Administration—that is, if you assume the Bush-era revenue law expires in three weeks (the current law baseline)—this proposal is a big tax cut indeed and one that benefits very high earners much more than others ... if you use yet another baseline, one that assumes continuation of the stimulus provisions as well as the 2001 and 2003 laws, low-income households may do worse under the Obama deal. They’ll lose the benefit of the expiring Making Work Pay credit but get very little from the payroll tax holiday. [But] we only looked at the tax changes, and not at the proposal to extend some unemployment benefits."
President's red-line was keeping refundable tax credits for low-income families. NYT: "Mr. Biden returned to his West Wing office and called Mr. McConnell. 'We will not do the estate tax without the other stuff,' he told him, according to officials. 'There’s just no deal without the refundables. Won’t do it.'"
CAP breaks down who got what for whom: "Obama’s components of the tax deal (extended unemployment benefits, the payroll tax cut, and the extended credits) will cost $214 billion to aid 156 million people. The Republicans priorities (extending the Bush tax cuts for the rich and cutting the estate tax), meanwhile, will cost $133 billion, but only benefit roughly 4.8 million people."
GOP refusing to include Build America Bonds extension in the deal. Wonk Room's Pat Garofalo: "...1,912 bond issues have been made by state and local governments, funding everything from school construction and water projects to roadwork. 'Build America Bonds have provided crucial support for state and local governments at a time when they faced unprecedented stress raising funds,' wrote Princeton economics Professor Alan Kruegar. 'State and local governments have used BABs savings to create jobs and reduce taxes.' ... Reuters’ James Pethokoukis predicted today that allowing BABs to expire is part of a GOP strategy to push troubled states into bankruptcy and cripple public employees unions."
Christine O'Donnell equates extending jobless aid a "tragedy" equal to Pearl Harbor and the passing of Elizabeth Edwards. The Hill quotes: "Tragedy comes in threes ... Pearl Harbor, Elizabeth Edwards's passing and Barack Obama's announcement of extending the tax cuts, which is good, but also extending the unemployment benefits."
Does The Deal Threaten Social Security?
Steve Benen argues that the Social Security trust fund will not be touched: "Not one penny of the payroll tax cut would come from the trust fund ... when listing legitimate concerns about the tax policy agreement, this one doesn't make the cut."
But OurFuture.org's Richard Eskow sees an underlying danger to Social Security: "It's no accident that the 'payroll tax holiday' was first proposed by sworn enemies of retirement benefits on the deficit commission. We should be asking ourselves: When tax breaks can be designed in so many different ways, why did they choose this way? Why single out the only source of Social Security's funding? Could it be part of a long-term game plan?"
Daily Kos' Joan McCarter adds: "What are we going to be hearing for the next two years? Republicans demanding more and more spending cuts ... Those demands will be focused on entitlement programs, with Social Security the number one target. That will be made easier because Social Security will be in competition with other programs for general fund money because of the payroll tax holiday."
Moves Toward Climate Agreement
International climate talks may reach agreement on protecting tropical forests. W. Post: "If all goes according to plan, the U.N. Framework Convention on Climate Change will establish a global mechanism allowing developing nations to receive financial compensation for curbing deforestation, which accounts for roughly 15 percent of the world's annual greenhouse gas emissions."
China may be willing to accept international monitoring of carbon emissions. AFP: "China appeared to climb down from its past refusal on verification, with its chief negotiator Xie Zhenhua saying Monday that Beijing has 'a willingness to take an open and transparent attitude.' A new draft proposal released on Tuesday includes a general agreement on verification. Some details are lacking -- including how often countries would report their actions -- but most conference watchers were optimistic."
Coal state Sen. Jay Rockefeller hoping to ban EPA from regulating greenhouse gases in omnibus spending bill. The Hill: "...Rockefeller told reporters Tuesday he still believes Reid wants to allow the vote, and that including the measure in a catch-all spending bill is the best option." GOP may only allow short-term spending bill instead of long-term omnibus reports CQ.
Big Oil needs "major transformation" to avoid another Gulf gusher, says spill commissioner. WSJ: "...the bulk of Mr. Reilly's remarks—to be delivered in New Orleans at a conference of attorneys for U.S. oil and gas companies—focuses on the industry, and what Mr. Reilly says is the absence of 'a shared industry culture that puts a premium on safety and risk management.' ... it comes as his panel is preparing to deliver a report next month to President Barack Obama that could influence future regulation of the industry."
Will the DREAM Die?
DREAM vote expected today. NYT: "It stands a slim chance of passage in the House, where Democrats are in the final days of their majority. In the Senate, although its champion is the Democratic majority leader, Harry Reid of Nevada, the bill appears unlikely to succeed."
House leaders may add immigrant farm jobs measure to DREAM Act. Politico: "The agriculture bill, known as AgJobs, is designed to lure the votes of more rural members of the House ... [It] would allow migrant farmworkers to come to the U.S. through a guest worker program and eventually apply to become permanent legal residents."
DREAM backer GOP Sen. Lugar may filibuster because tax deal isn't done yet reports CQ.
Breakfast Sides
State governments face $82B shortfall as stimulus runs out, reports Bloomberg.
Drug companies pay $421M in fraud settlement. LAT: "The drug companies charged one set of prices to doctors and pharmacies but reported another set of inflated figures that were used as benchmarks by government insurers reimbursing healthcare providers, authorities said. The difference in price, or spread, amounted to kickbacks to the companies' customers..."
Consumer groups urge oversight of reverse mortgages: "With demand rising for reverse mortgages, senior citizens are particularly at risk of being misled and should be protected by greater government oversight of the industry, according to a report by Consumers Union and two California advocacy groups ... the loans can come with hefty charges, including origination fees, closing costs and compounding interest on loan principal."
Few new jobs expected for Korea trade deal. NYT: " President Obama said on Monday that the accord would ... 'support at least 70,000 American jobs.' The Obama administration has been careful to use the verb 'support,' not 'create.' In fact, the effect of the agreement on aggregate output and employment in the United States 'would likely be negligible,' according to a federal study, largely because the United States economy is so much larger than that of South Korea ... But the deal is likely to be beneficial to particular industries, including the Detroit automakers and manufacturers of industrial and electronic equipment and high-technology products ... American manufacturers of textiles and clothing could be hurt, however, as relatively high American tariffs on those products are reduced."
