Each morning, Bill Scher and Terrance Heath serve up what progressives need to effect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.
MORNING MESSAGE: Unemployment Isn't "Stubborn." It's Unacceptable.
OurFuture.org's Richard Eskow: "There was a time when Bernanke didn't even acknowledge the 'employment' aspect of his mandate, so presumably it's a sign of progress (or, more likely, of political pressure) that he even mentioned it today. But he didn't say the situation was unacceptable. He merely said that 'we expect the unemployment rate to remain stubbornly above, and inflation to remain persistently below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate from the Congress to foster maximum employment and price stability.' In other words, he's saying he knows its in his job description, but that it's not going to happen and he's not going to do anything else to make it happen. How would your boss react if you said something like that?"
Weak Jobs Report
Another tough jobs report for January. NYT: "The United States labor market slowed to a crawl in January, adding just 36,000 jobs last month, far below consensus market forecasts ... the unemployment rate actually fell to 9 percent as fewer people looked for jobs ... Private companies added 50,000 jobs, while federal, state and local governments shed 14,000 jobs ..."
Bernanke won't pull back on stimulus measures. LAT: "...he strongly defended the effort in the face of sharp criticism from top Republicans, strong objections from China, Germany and other global competitors and even questions about whether the central bank's actions helped fuel the crisis in Egypt by driving up food prices. 'I think it's entirely unfair to attribute excess demand pressures in emerging markets to U.S. monetary policy,' Bernanke said in a speech and wide-ranging question-and-answer session with journalists..."
GOP struggles to explain what its jobs agenda is. Politico: "Democrats, ousted from the hot seat of governance, are blistering Republican leaders for concentrating on a repeal of President Barack Obama’s health care law, micro-targeted spending cuts and the reversal of obscure federal regulations at a time of high unemployment ... [Republicans] are shifting from a constant uttering of 'Where are the jobs?' to explaining how their actions on the floor will spur the economy."
Warnings Escalate On Debt Ceiling, Shutdown
Bernanke warns GOP against refusal to raise debt ceiling. Reuters quotes: "Beyond a certain point ... the United States would be forced into a position of defaulting on its debt. And the implications of that on our financial system, our fiscal policy and our economy would be catastrophic."
Geithner dismisses conservative claim Treasury could handle no increase in debt ceiling. Politico: "...Treasury Secretary Timothy Geithner fired back a letter to Sen. Pat Toomey Thursday, bluntly telling the Pennsylvania conservative that his legislative ideas on the debt ceiling crisis are 'unworkable' and 'quite harmful if enacted.' ... 'We understand that you define default narrowly in this context to apply only to debt service payments ... But the term is equally applicable to the broad failure contemplated in your legislation to meet other important U.S. obligations. That is how it would be regarded by global markets.'"
GOP leaders try to pre-emptively shift blame for possible government shutdown. W. Monthly's Steve Benen: "How can you tell the prospect of a government shutdown is getting increasingly serious? The most obvious hint is the Republican effort to avoid blame ... 'Sen. Schumer seems strangely preoccupied with the notion of a government shutdown,' a spokesperson for Senate Minority Leader Mitch McConnell (R) said. 'It is our hope that he soon realizes the only person talking about a shutdown is Sen. Schumer.' It's hard to overstate how very wrong this is. Schumer isn't the one who brought this up. Indeed, it was Mitch McConnell who, just a few days ago, appeared on national television and refused to take a government shutdown off the table."
House GOP leaders propose spending cut far less than promised to Tea Party. NYT: "...House Republicans announced Thursday that they would cut $32 billion for the remainder of the fiscal year — a minuscule amount compared with a projected annual deficit of nearly $1.5 trillion ... Republicans said that their cuts, prorated for the balance of the fiscal year, still fulfilled their campaign pledge to reduce to 2008 levels the government’s discretionary spending on everything other than national security ... their unwillingness to impose steeper reductions also reflected the severe difficulty they face in slashing spending on the wide scale demanded by some Republicans ..."
Senate Dems highlight impact of proposed cuts on consumers. CQ: "[Sen. Dick] Durbin is particularly worried about maintaining the strength of agencies that protect consumers, such as the Securities and Exchange Commission."
Corker-McCaskill spending cap bill threatens Social Security and Medicare. Off The Chart's James Horney: "Since entitlement and other mandatory spending generally grows faster than security or non-security discretionary spending (reflecting the fact that the growth of the three biggest entitlement programs — Social Security, Medicare, and Medicaid — is driven by the aging of the population and rising per-person health care costs), its percentage cut would be bigger than the percentage cut in the discretionary programs."
Could Scalia Uphold Health Reform?
HuffPost's Sam Stein suggests Scalia may rule to uphold health reform: "... legal scholars and defenders of the bill are increasingly convinced that another court member, not Kennedy, will play the critical role ... [In 2005,] Scalia made what is widely regarded as one of the Court's broadest interpretations of Congress' ability to regulate commerce. Not only did the legislative branch have the 'power to regulate activities that have a substantial effect on interstate commerce,' he wrote; it had the power to extend itself into 'those measures necessary to make the interstate regulation effective.'"
Another conservative legal challenge to health reform may be thrown out. HuffPost: "...Keith Starret, who serves on the U.S. District Court for the Southern District of Mississippi, ruled that plaintiffs suing over the coming implementation of the individual mandate did not demonstrate sufficient standing for him to take the case. He 'granted in part' the administrations motion to dismiss the case, but gave the plaintiffs 30 days to amend their complaint ..."
Virginia AG asks Supreme Court for expedited review. Politico: "Department of Justice spokeswoman Tracy Schmaler said in a statement that Virginia’s case hinges on a state law that is designed to exempt the commonwealth’s citizens from the individual mandate. Because 'Virginia’s suit is based on a state statute that is not applicable nationwide,' and the individual mandate will not take effect until 2014, 'there is more than sufficient time for this case to proceed first in the court of appeals,' Schmaler wrote. Cuccinelli may get a boost from Congress if an unlikely ally has his way. Democratic Sen. Bill Nelson of Florida has introduced a resolution asking for expedited review..."
Why the White House opposes expedited review. Bloomberg: "The government’s approach would give it a chance to rack up lower court victories and perhaps build popular support for the law before the justices take up the case ... The administration likely wants 'the law to be on the books as long as possible and have people get used to it,' [former clerk for Justice Kennedy John] Elwood said. 'If it has a feel of familiarity to it, the less likely they are to strike it down.'"
TNR's Brad Plumer argues GOP trying to kill health reform using "death by investigation.": "Some Democrats suspect these letters are just a ploy to bury HHS officials in a tsunami of paperwork—so that they're so busy responding to Upton that they barely have time to carry out the health care law."
HHS seeks to help states manage Medicaid costs. NYT: "Fearing wholesale cuts in Medicaid by states with severe budget problems, the Obama administration told governors on Thursday how they could save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud ... the administration refused to say whether it would allow states to ... throw low-income people off the Medicaid rolls ...Republicans in Congress are introducing bills to give states much more latitude in Medicaid and to block the provision of the new health care law that vastly expands eligibility."
Implementation in Wisconsin proceeds despite conservative grandstanding. AP: "...even though Attorney General J.B. Van Hollen declared the law dead earlier this week [he] is not able to order an end to implementation and he said Thursday that he has not advised fellow Republican Gov. Scott Walker to halt it ..."
Likely president candidate Rick Santorum defends Medicare prescription drug "donut hole." Wonk Room quotes: "...that was a good allocation of money. The Democrats said, well we don’t care, we’re just going to throw more money at seniors..."
Fannie/Freddie Reform Proposal Soon
Obama may propose ending mortgage finance support for expensive homes. W. Post: "...home buyers have benefited from a temporary federal policy that has allowed mortgages up to $729,750 to receive government backing ... The administration is now likely to suggest that Congress allow the policy to lapse as scheduled in September, lowering the loan limit to $625,500 ... The report, which will in part address the fate of the troubled mortgage giants Fannie Mae and Freddie Mac, is scheduled to be released as soon as next week."
New Deal 2.0's Mike Konczal promotes Elizabeth Warren to head consumer bureau: "...she’s done an excellent job starting up the agency, hitting the ground running. She has stalemated the critiques from industry and Republicans. And the Republicans have shown that they hate the agency itself but don’t actually mind Warren as far as candidates go, so she’s relatively more confirmable than people imagine."
SEC takes action against two Wall St. firms. W. Post: "TD Ameritrade brokers misled investors about the risks of a mutual fund that foundered at the height of the financial crisis ... Brokers falsely described the fund as being a money market fund or as safe as cash, the SEC alleged ... [The firm] settled the charges by agreeing to pay $10 million to customers who still hold shares in the fund ... In another SEC enforcement action announced Thursday, a money manager called the AXA Rosenberg Group and affiliates agreed to pay more than $240 million to settle charges that they defrauded institutional investors by keeping them in the dark about a malfunctioning computer program."
President Pushes Energy Efficiency
President proposes saving $40B by retrofitting commercial buildings. Earth2Tech: "The initiative will rely on existing efforts with new requests for funding from Congress ... While they maintain that Republicans, too, support clean energy, whether Republicans will embrace spending on clean energy remains a big question. The initiative calls for creating a competitive grant program, called Race to Green, that will give funding to state and local governments that have ideas for how to modify building codes and streamline regulatory processes..."
Center for American Progress' Bracken Hendricks applauds President's energy-efficiency initiative: "President Obama has set the right priority in his 'Better Buildings Initiative,' blending improved tools for project finance with assistance to hard hit small businesses and worker training to help American industries compete in the clean energy race."
Midwest Dem senators to propose "renewable" energy standard. The Hill: "Sen. Amy Klobuchar (D-Minn.) ... said she will introduce legislation with Sen. Tim Johnson (D-S.D.) that would create a renewable electricity standard [but] suggested that her effort could be broadened [to include non-renewables.] ... Her bill is also expected to include an energy efficiency standard for utilities and tax credits for biofuels producers."
WV Sen. Joe Manchin falsely claims coal gets no subsidies. Wonk Room's Brad Johnson: "[Sen. Manchin said,] 'It doesn’t get a penny of subsidies. But it’s been villainized by this administration.' ... In reality, the coal industry is heavily subsidized by the federal and state governments, enjoying explicit subsidies of billions of dollars a year, plus the indirect subsidy of free pollution that costs the United States 10,000 lives a year..."
Breakfast Sides
Uncertainty whether Obama get win corporate tax reform. W. Post: "...Geithner has met on multiple occasions with corporate leaders and others with a stake in the debate ... Some of those who attended the powwows have left with the impression that little real action lies ahead ... Others, however, see an administration determined to pursue real changes ... Republicans are pressing for adoption of a 'territorial' tax system that would tax only profits earned domestically [but] many Democrats [will] argue that such a system would encourage the largest firms to outsource U.S. jobs ..."
Sen. Rand Paul lone vote against ban on flashing laser pointers in eyes of pilots. Politico: "Rand Paul’s office said he voted against the legislation because he thought it could be more 'adequately handled and prosecuted at the state level.'" Paul's not done trying to harm workers with airport bill. AFL-CIO's Mike Hall: "...with the support of most of his Republican colleagues, Sen. Rand Paul (R-Ky.) wants to use the bill to take away workplace safety and health rights for flight attendants–and in effect put passengers at risk as well."
GOP backs off narrowing definition of rape in bill to expand ban on abortion coverage. W. Monthly's Benen: "But before we move on, it's worth emphasizing the fact that this bill is still awful, barring outright 'the use of federal subsidies to buy any insurance that covers abortion well beyond the new exchanges.'"
