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: DLC RIP
OurFuture.org's Robert Borosage: "The DLC ... is broke and closing its doors. For anyone who cares about working and poor people, this is a demise that should have come much sooner ... They celebated corporate free trade, the full catastrophe from NAFTA to embracing mercantilist China in the WTO. They promoted financial deregulation and privatization. They scorned labor law reform. Along with their conservative allies, they contributed directly to policies that helped usher in the Gilded Age inequality, the declining middle class, the disembowling of American manufacturing, the bubble and bust economy that now plague America ... They campaigned for Gingrich's welfare repeal, contributing directly to the rising tide of childhood poverty in the wake of the recession. They postured tough on crime, promoting 'two strikes and your out' and other punitive sentencing that produced an America that locks up 2 million of its citizens, more than the Chinese, for largely non-violent crimes."
Obama Seeks Help For States In Upcoming Budget
President's budget to include some relief to fiscally distressed states. Bloomberg: "Under existing law, some states would be required to raise taxes next year due to federal rules covering shortfalls in unemployment insurance funds. Obama is proposing a moratorium on those tax increases and interest payments in 2011 and 2012 ... State and local governments cut 12,000 workers from payrolls last month..."
State cuts still harming economy, finds CBPP: "BLS estimates that states, cities, counties, school districts, and other units of government cut another 12,000 jobs in December, bringing to 426,000 the number of jobs lost since August 2008 ... Economist Mark Zandi told a Congressional committee last Thursday that he expects a new round of spending cuts at the state and local level to shave another 0.4 percentage points off GDP growth over the course of 2011 ... If states pursue a cuts-only approach to closing these gaps, as opposed to tapping reserves and raising additional revenues, the loss of GDP could approach a full percentage point..."
House GOP spending cut plan cuts deeper than advertised, finds CBPP's James Homey: "GOP leaders say their plan would cut this category of funding by 9 percent. In fact, non-security programs – from K-12 education to biomedical research, food safety to the FBI – would shrink for the rest of the year, on average, by 15.4 percent below current funding ... because much of the fiscal year will be over by the time Congress must act on the spending cuts ... Transportation and housing programs would be cut by more than one quarter, while the costs of running Congress would be cut less than 4 percent."
NYT's Bob Herbert warns we can't cut to create jobs: "Instead of trying to figure out how to keep 4-year-olds out of pre-kindergarten classes, or how to withhold life-saving treatments from Medicaid recipients, or how to cheat the elderly out of their Social Security, the nation’s leaders should be trying seriously to figure out what to do about the future of the American work force."
NBER paper finds some aspects of stimulus worked better than others: "...money spent to support education and law enforcement did little to improve employment. But programs to support low-income households were highly stimulative, as was spending on infrastructure projects."
GOP Rep. Darrell Issa was for stimulus before he was against it, finds Economist's View's Mark Thoma: "[Issa] says: 'The abysmal results came as no surprise to those who knew that the Keynesian doctrine of spending your way to prosperity had been discredited decades ago.' Then it must of surprised him or, as is more likely, he doesn't actually know what Keynesian economics is. This is what he said around the time when the stimulus package was put in place ... that the stimulus package doesn't come online quickly enough, and doesn't do enough for infrastructure..."
The SEC is strapped for cash. NYT: "With President Obama planning to freeze the budget and Congress looking for cuts, the department could be deprived of a $160 million budget increase, keeping its annual funds flat at $1.1 billion. 'It is a strain that is already having an impact on our core mission — separate and apart from the new responsibilities that Congress gave us...,' [said SEC chair Mary Schapiro] ... The S.E.C. is one of the few government agencies that is self-funding, in that taxpayers don’t pay for the agency’s operations. The regulator’s entire budget comes from Wall Street firms and the like..."
Bipartisan Senate group met yesterday to craft deficit reduction compromise. Politico: "Running close to two hours and hosted by Senate Majority Whip Richard Durbin (D-Ill.) in his third floor Capitol offices, the meeting had an equal mix of Democrats—Durbin, Conrad, and Virginia Sen. Mark Warner—and Republicans: Sens. Saxby Chambliss of Georgia, Tom Coburn of Oklahoma, and Mike Crapo of Idaho ... The goal is to revive — in either legislative form or the spring budget resolution — major elements of the [Simpson-Bowles] plan to narrow future deficits by nearly $4 trillion over the next 10 years. Appropriations cuts would be part of the strategy but so would entitlement and tax reform. And if the senators can show enough political strength, the hope is that this would give Boehner and Obama enough cover to join them."
LIttle Movement From Chamber On Jobs After Obama Speech
After Chamber speech, some businesses bristle at notion they should use profits to create jobs and increase demand. NYT: "Harold Jackson, a executive at Buffalo Supply Inc., a medical supply company, called it naïve. 'Any business person has to look at the demand to their company for their product and services, and make hiring decisions,' Mr. Jackson said. 'I think it’s a little outside the bounds to suggest that if we hire people we don’t need, there will be more demand.'"
Robert Borosage responds to Chamber on MSNBC: "It's not going to be changed by corporations."
Time explains "Why A Housing Double Dip Could Kill The Recovery": "A rising number of foreclosures, tied to persistently high unemployment, is smothering housing's rebound ... an additional 1.5 million may be added to the pile this year. With that kind of distressed inventory on the market, it could take four to five years for prices to come back up ... data suggests a good number of those properties belong to lower-income, higher-risk borrowers who had already gotten a break on their mortgage payments via federal programs ... but as [economist Paul] Dales points out, 'If you don't have a job, you aren't going to be able to pay your mortgage.' ... [Robert] Shiller suggested a drastic fix to the current problem — a continuously changing mortgage balance that would be reset periodically based on both home prices and unemployment."
Amtrak revives plan for NY-NJ tunnel, after earlier plan killed by NJ Gov. Christie. NYT: "[Gov. Christie] said the proposal had vindicated his decision to kill the previous project because New Jersey would ultimately benefit from a tunnel project led by a federal agency ... But, he added, 'If they asked me for a check today, the answer is no.' ... The proposal that the [NJ] senators and Amtrak officials outlined was preliminary, and they acknowledged that they had not arranged any of the local or federal financing that the project would require ... proponents of the new tunnel said it would be an improvement over the previous project because it would provide access to Pennsylvania Station in Midtown to high-speed trains running between Boston and Washington, as well as commuter trains from New Jersey ... Amtrak officials said Monday that they would seek $50 million from Mr. Obama’s impending federal budget to pay engineers to study the feasibility of the new tunnel plan."
Tunnel plan could create 60,000 jobs reports The Record.
The Transport Politic sees hope of GOP support: " In light of the President’s active support of high-speed rail and House Transportation and Infrastructure Committee Chairman John Mica’s excitement about the Northeast Corridor, it may well be a viable program ... It would be difficult even for conservative Republicans to argue that this project does not fulfill Washington’s mandate to improve the nation’s transportation systems, since it is of course at its core a connection between two states."
FCC to hold initial vote on rural broadband plan today. LAT: "The $8-billion Universal Service Fund is paid for by telecommunications companies [and] has successfully spread phone service to residents in hard-to-reach areas ... But the fund has become highly inefficient ... Genachowski's plan calls for major changes, particularly to the complex payments known as Intercarrier Compensation that telecommunications pay each other as they transmit calls over their networks. He wants to use the savings from that and other changes to help pay for a new Connect America Fund."
Health Reform Safe From Conservative Attack?
Lawrence Tribe predicts Supreme Court will uphold health reform law. NYT: "Since the New Deal, the court has consistently held that Congress has broad constitutional power to regulate interstate commerce ... the health care law is little different from Social Security. The court unanimously recognized in 1982 that it would be 'difficult, if not impossible' to maintain the financial soundness of a Social Security system from which people could opt out. The same analysis holds here..."
GOP may flinch from trying to defund health reform. Politico: "As the GOP writes a continuing resolution to fund the government for the rest of the year, it is likely to leave out language that would shut off funding for new mandates and programs under the health care law, according to Republican aides and lawmakers ... Groups that are dedicated to repealing the health care law are already framing the spending bill as a missed opportunity. "
Right-leaning Dems consider abandoning individual mandate. Politico: "They haven’t decided whether to propose legislation, but any effort by moderate Democrats that takes aim at the individual mandate could embarrass Obama and embolden Republicans who are still maneuvering to take down the health care law ... The moderates most likely to buck their party include Sens. Joe Manchin of West Virginia, Ben Nelson of Nebraska, Claire McCaskill of Missouri and Jon Tester of Montana..."
Top House GOPer Rejects Clean Energy Standard
House energy cmte chair Fred Upton tells Politico he won't support comprehensive clean energy legislation: "[But] he said he does see room for bipartisan compromises on nuclear power licensing and development of natural gas and electric vehicles ... Republican leaders see Upton as a key figure for demonstrating they’re capable of governing effectively. But he also has to keep intact the detente with conservatives who fear he’ll cave into President Barack Obama and the Democratic agenda, which means plenty of headline-grabbing hearings and veto-baiting legislation front and center."
Upton hints at compromise on effort to handcuff EPA on climate. The Hill: "...he is open to compromising on his legislation ... Upton said he is planning to meet with Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) to find 'common ground' on key energy issues ... he won't be able to find common ground on Obama's proposal to get 80 percent of the country's electricity from low-carbon sources like wind, solar, natural gas and nuclear."
Onshore wind power cost becoming competitive with coal. Grist's Todd Woody: "The cost of onshore wind power has dropped to record lows, and in some regions is competitive with electricity generated by coal-fired plants ... Michael Liebreich, Bloomberg New Energy Finance's chief executive, said ... 'wind manufacturers were reducing their costs, and now we are seeing just how cheap wind energy can be when overcapacity in the supply chain works its way through to developers'"
Obama administration invests $50M into making offshore wind more affordable. NYT: "The two secretaries [of Energy and Interior] said they would establish four 'wind energy areas' in the outer continental shelf, gathering information about the 'environmental and geophysical attributes' of each one and providing information to potential investors."
Administration report rebuts claim American can't meet goal of 1 million electric cars by 2015. W. Post: "Last week, the panel of auto industry experts concluded that automakers' announced production efforts will fall short of Obama's goal. Their report tallied the announced production goals of manufacturers of electric cars. The administration performed a similar calculation, but reached a different result. One of the key reasons is that the administration assumed that GM would annually be able to produce 120,000 Chevrolet Volts, a plug-in electric vehicle, starting in 2012. The 120,000 figure comes from a news report that GM would not confirm."
Citigroup Pays For Foreclosure Fraud
Citigroup hit for foreclosure fraud. Bloomberg: "Citigroup Inc., the third-largest U.S. bank, settled or lost at least five claims in 2010 brought by borrowers who accused the bank of filing fraudulent mortgage documents provided by a Texas firm."
Big banks to pay more into deposit insurance fund. NYT: "The change, approved unanimously by the five-member board of the agency, was a result of the Dodd-Frank financial regulations that passed last year. Addressing complaints by small banks that they were taking on too much of the financial burden to save failing banks, the law directed the F.D.I.C. to re-evaluate the fees according to the value of assets held by each bank, instead of the level of deposits."
