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: Invest & Grow Vs. Cut & Gut
OurFuture.org's Robert Borosage: "[President Obama] set up what should be a centerpiece of Washington's debate over the next months: invest and grow vs. the Republican 'cut and grow,' or in the Republican Study Group version, "gut and grow." ... But the limits of this debate are too narrow, the reforms too limited. This isn't 1995 when Bill Clinton could count on a rising economy and a dot com bubble to fuel his revival. What is reviving in America is the old economy that was unsustainable - Gilded Age inequality, debilitating trade deficits, concentrated and highly leveraged banks, and a declining middle class."
Wide Support For President's Vision, But Challenges Loom
GOP-leaning swing voters inspired by President's economic vision, finds pollster Stan Greenberg: "...voters gave the President impressive assessments on key economic measures and were especially drawn to the President’s emphasis on three of the themes he emphasized in his speech - innovation, education, and America’s competitiveness in the future. As one of these swing voters put it, 'the future belongs to the people who make the what and the how.' ... His overall job approval among these voters jumped by 26 points [after the speech.]"
Politico reports White House wants to pressure GOP to finally cough up specifics: "...it was laced with meaty proposals that, according to presidential advisers, are designed to SMOKE OUT the GOP – to force Republicans to reveal plans of their own, and help the West Wing chart where the axis of cooperation may lie. Obama threw down the gauntlet on several monster issues that are likely to be furiously fought, and have lobbyists licking their chops."
Many challenges ahead for increased infrastructure investment. NYT: "Right now, the federal Highway Trust Fund pays for much of the nation’s transportation program. It gets most of its money from the federal gasoline tax, a flat 18.4-cent tax levied on each gallon sold. The tax has not been raised since 1993. In recent years, the trust fund has run out of money ... there is Mr. Obama’s call for attracting private investment. Just how public-private partnerships should work is the subject of much debate. Some states have leased toll roads, generating big up-front payments and outsourcing operating and maintenance costs, but also giving up big, steady streams of future revenue."
Open Left's David Sirota argues we need "Buy America" policies to meet President's goals: "Those lower wages/standards create an artificial economic incentive for companies to move production facilities to China. President Obama tonight in his State of the Union may claim that we can fix things by just becoming better 'competitors,' but the only way to reverse this inequity in standards is to put in place policies (like, say, Buy American or reformed trade laws) that directly counter the real problem."
Freeze Rebuffed On All Sides
President calls for five-year "freeze" on level of non-defense discretionary spending: "The five-year freeze in so-called discretionary domestic spending would reduce deficits by more than $400 billion in the 10 years through the fiscal year 2021, the administration said. By comparison, a group representing most House Republicans last week called for cutting $2.5 trillion over that decade."
And supports Pentagon plan to restrain military spending. The Province: "While Obama is not advocating an outright cut to Pentagon spending, he has endorsed a proposal by U.S. Defense Secretary Robert Gates to trim $78 billion from projected increases to the nation's military budget over the next five years."
Republicans say "freeze" is not brutal enough. HuffPost: "[Sen. Jeff] Sessions said the GOP would only be satisfied by budget cuts ... House Speaker John Boehner (R-Ohio) was also quick to dismiss the spending freeze ..."
Congressional Dems worry freeze is too much. The Hill: "A number of Democrats ... are skeptical such reductions won't threaten basic social services for poor communities ... other Democrats wanted more assurances from Obama that defense spending wouldn't be immune from the spending freeze."
Though Dem Sen. Claire McCaskill echoes GOP criticism. The Hill: "McCaskill, however, said Congress should adopt the spending caps she proposed with Sen. Jeff Sessions (Ala.), ranking Republican on the Budget Committee. She said the Sessions-McCaskill spending levels would be lower than those proposed Tuesday by Obama and would also rein in military spending."
Veto vow over earmarks. The Hill: "Senate Majority Leader Harry Reid (D-Nev.) suggested he did not take the pledge seriously. When asked about it in advance of the speech, Reid dismissed it as 'pretty talk' that would cede too much authority to a president who has 'enough power already.'"
No Social Security cuts in speech. W. Post: "...Obama largely avoided the issue of long-term deficit reduction, leaving the door open to cooperation with Republicans in Congress without offering specifics. He said his bipartisan fiscal commission made 'important progress,' but he did not explicitly endorse the tough prescription for debt reduction they issued last month, including proposals to raise the retirement age."
"GOP Austerity Plan Is an Assault on Blacks and Latinos" argues HuffPost's David Love: "...the public unions replace the welfare queens as the scapegoats of choice, the latest casualties in a long, protracted class warfare. And as the rich get more money, the poor, working poor, and what's left of a paltry middle class are given pep talks, tough love and sermons."
Britain facing double-dip recession after adopting austerity plan. NYT: "The slowdown placed the Cameron government’s $128 billion, four-year program of spending cuts and tax increases — policies on which it has staked its survival — at sharply heightened political risk."
Corporate Tax Reform Tops Agenda
Call for deficit-neutral corporate tax reform. Bloomberg: "President Barack Obama called on Congress to cut the top U.S. corporate tax rate for the first time in 25 years 'without adding to our deficit,' a sign that businesses will have to give up tax breaks in exchange for lower rates ... [That] is at odds with that espoused by corporate chiefs [who] have urged the administration and lawmakers to set aside deficit concerns for now to focus on rate reduction."
Different industries react differently. WSJ: "Companies that don't make big use of the deductions on offer and pay a high effective tax rate, such as Wal-Mart Stores Inc. and CVS Caremark Corp., would welcome such a move ... By contrast, the firms that have been most vocal in pressing for a straight rate cut are multinationals that pay a relatively low effective tax rate..."
Tax reform for American corporations should encourage job creation in America, argues W. Post's Harold Meyerson: "If we're going to rewrite our corporate tax code, why don't we rewrite it to reward those companies that employ workers at good jobs here at home? U.S. unions are almost surely too weak to get the kind of deals that German unions get, but why can't our tax laws discriminate between those companies that both develop and manufacture their products here and those that go abroad for cheaper labor?"
"Clean Energy Standard" Tops Enviro Agenda
President embraces clean energy standard, broadly defined. Politico: "...setting a nationwide goal for 'clean energy sources' that includes nuclear and 'clean coal.' [He said,] 'by 2035, 80 percent of America’s electricity will come from clean energy sources.' ... Attention will be centered first around the Senate and competing bills expected from Sens. Richard Lugar (R-Ind.), Lindsey Graham (R-S.C.) and perhaps even [Sen.] Jeff Bingaman (D-N.M.). But across Capitol Hill, House Republicans have not been so keen to embrace new national energy mandates, even if it covers some of their favorites like coal and nuclear power."
Yet nothing on climate protection regulations. Time's Bryan Walsh: "Whatever initiatives President Obama chooses to launch with his annual speech, the Environmental Protection Agency (EPA) will likely keep working on greenhouse gas regulations ... But there's no avoiding the fact that a candidate who spoke of climate change as an existential threat on the 2008 campaign trail ... didn't mention the term 'climate change,'..."
Climate Progress' Joe Romm gives mixed review to President's clean energy standard: "Clean coal, of course, doesn’t exist, and it remains a big stretch to call nuclear ‘clean’, but at least this proposal moves the debate forward significantly. I don’t know whether a serious clean energy standard has a chance, but this appears to be the only plausible way forward in the climate/energy arena, given the death of a serious carbon price and GOP opposition to any funding increases for R&D or deployment."
Sen. Barbara Boxer supports wide latitude for clean energy standard. The Hill quotes: "I think what’s good is, because he went to a clean energy standard rather than a renewable energy standard, it brings in many more people. I think that’s going to generate a lot of support.'
Oil lobby fires off critical statement, argues they don't get subsidized. TPM quotes: "The U.S. oil and natural gas industry also pays taxes at effective rates far higher than most other industries, and does not receive payments from the government to support oil and gas development. The tax deductions it does receive are similar to those enjoyed by other industries to encourage energy production and new jobs."
Newt Gingrich proposes replacing EPA with "Environmental Solutions Agency." Grist's David Roberts explains: "What Newt wants to do is replace America's successful environmental policy with its failed energy policy ... For example, one of his proposals for the ESA is to 'incentivize' the sale of flex-fuel vehicles, which can run on corn ethanol in addition to gas ... in what sense is a policy like this 'conservative'? It's all about meddling in markets and 'picking winners.' [But] there are no actual free-market conservatives in politics. What conservatives want to do ... is manipulate markets, regulations, and legislation to benefit their corporate contributors."
Wonk Room contrasts President and GOP plans on clean energy.
Ryan Flunks Econ 101
Dean Baker rips Rep. Paul Ryan's GOP response for equating Greece with US: "The United States has its own currency ... The United States collect taxes ... The United States has a huge diversified economy ... This is why we give politicians who compare the U.S. to Greece a nice lollipop and balloon and pat them gently on their little head."
Paul Krugman notes Ireland isn't like Greece either: "...Ireland was running a budget surplus on the eve of the crisis, and had quite low debt. Its problems now have nothing to do with fiscal irresponsibility in the past; they’re the consequence of weak financial regulation and the government’s too-generous bank bailout ... I guess we’re supposed to take heed of what Ryan believes happened in Europe, never mind that it isn’t what actually happened. Remember, this is the GOP’s leading deep thinker these days."
What About The Jobless?
HuffPost chronicles what the President didn't address: "...Obama didn't mention gun control, climate change or the decline of the middle class ... Of particular note was his decision not to discuss the ever-deepening foreclosure crisis plaguing communities across the nation, even as he touted stock market gains and surging corporate profits ..."
The America's Prospect's Jamelle Bouie argues President ignored the plight of the jobless: "There is no mention of the 15-year high poverty rate, or the ongoing foreclosures that have thrown millions of Americans out of their homes. If we can gauge issue importance by specificity and length, then it's abundantly clear that the White House -- along with the Democratic Party -- has all but given up on reducing unemployment."
Financial Crisis Report Slams Deregulation
Financial crisis commission to formally blame government deregulation and reckless CEOs, in final report tomorrow. NYT: "The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans ... It criticizes [Alan] Greenspan for advocating deregulation ... It also criticizes the Bush administration’s 'inconsistent response' to the crisis — allowing Lehman Brothers to collapse in September 2008 after earlier bailing out another bank, Bear Stearns ... The decision in 2000 to shield the exotic financial instruments known as over-the-counter derivatives from regulation, made during the last year of President Bill Clinton’s term, is called 'a key turning point ... .'"
Greenspan rejects blame, scapegoats Fannie & Freddie. WSJ: "Former Federal Reserve Chairman Alan Greenspan disputed some of the commission's points, saying the Fed was responsive to congressional demands for changes in mortgage-lending rules. The real problem, he suggested, was the new demand for subprime-mortgage securities coming from Fannie Mae and Freddie Mac..."
Open Left's Mike Lux criticizes Rep. Barney Frank for re-opening debate over debit card fees: "He has been saying he would be happy to work with Republicans in Congress to roll back the related new Federal Reserve regulations. Now, I love Barney Frank, and he is a good guy on most issues, but this is pure craziness. The basic question is: Politically or policywise, why would you want to help the big banks in opposition to Main Street businesses?"
Filibuster Reform Is Dead
Senate won't vote on filibuster reform. Politico: "Sen. Tom Udall (D-N.M.) conceded Tuesday night that the fight to overhaul the filibuster was essentially doomed this Congress, saying he was settling for more modest reforms worked out by the leaders from both parties ... Udall had sought to change the rules if they surpassed a 51-vote majority, but lacking the support, several of the upcoming votes will have to clear a 67-vote threshold, ensuring that only non-controversial measures will be approved."
