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: Crimes ... And GE Capital Crimes
OurFuture.org's Richard Eskow: "Can a crime be committed if there is no criminal to commit it? According to the Securities and Exchange Commission, the answer to that Zen koan is apparently 'yes.' The SEC collected a $50 million settlement from GE Capital after concluding that the corporation "misled investors" by committing accounting and bank fraud, but then apparently decided that no individuals were responsible."
GOP Leaders Cave, Risk Government Shutdown
House GOP caves, pledges to cut deeper, risking gridlock before authority to fund government expires March 4. NYT: "House Republican leaders said Thursday that they would accede to demands from conservatives and dig deeper into the federal budget for billions of dollars in additional savings this year, exhibiting the power of the Tea Party movement and increasing chances of a major fiscal clash with Democrats ... 'In many cases, these proposals may mean taking workers off the assembly line or taking teachers out of the classroom or police off our streets,' [said] Senator Harry Reid ... 'After all, you can lose a lot of weight by cutting off your arms and legs ... But no doctor would recommend it.'"
Conservatives demand strict adherence to original pledge to cut $100 billion this year. W. Post: "The definition of the $100 billion pledge ... is proving increasingly troublesome ... [House Budget Chair Paul Ryan initially said] he would prorate the cuts to cover only the seven months from March to September ... House leaders [then] proposed reducing spending by $74 billion compared with the budget request Obama submitted last February - $58 billion from appropriations unrelated to national security and $16 billion from the Pentagon ... Those targets would require actual cuts of only about $32 billion ... Conservatives led by Rep. Jim Jordan (Ohio), chairman of the Republican Study Committee, were unappeased ... on Thursday, Rogers vowed to come up with an additional $26 billion in reductions. But then conservatives moved the goal posts. The cuts to the Pentagon should not count, they said..."
GOP right-wingers still aren't fully on board. The Hill: "...Rep. Jeff Flake (R-Ariz.), told The Hill that he wasn’t satisfied yet ... GOP leaders acknowledged that the cut includes security spending, something that will trigger floor amendments from more conservative members next week. They are also measuring the cut compared to the Obama 2011 budget request that was never enacted ... More than 20 lawmakers rose to voice their concerns over the plan formulated by leadership to make good on a promise to return spending to [2008 levels.]"
Pressure from outside conservative groups to cut deeper. The Hill: "...the conservative Club for Growth ... issued an alert to all members warning they would be given a negative score on spending if they voted for anything less than $100 billion in non-security cuts in the [continuing resolution.]"
Top GOPer warns shutdown is possible. CNN: "'I know that that's not something leadership wants to do. Is it a possibility? Yes, it is a possibility, but we're going to do everything we can to make sure that doesn't happen,' Rep. Mike Simpson, R-Idaho ... Simpson, who chairs a House Appropriations subcommittee, is the highest ranking Republican to go that far in suggesting a government shut down could happen."
Center for American Progress' Scott Lilly puts cuts into perspective: "While that is a tiny share of total spending, it is a huge chunk of what we think of as government, ranging from law enforcement to air traffic control, food safety, the courts, and our diplomatic corps. As a result, the cuts could have two seemingly contradictory consequences. First, they will do little to reduce a $1.5 trillion deficit. And second, they could have an absolutely devastating impact on the nation’s social infrastructure—placing citizens at risk of a variety of dangers ranging from criminality to disease transportation hazards and financial fraud."
Pew poll shows risks in deep GOP cuts. Politico: "In the case of education, Pew found that only 11 percent of those surveyed wanted to cut federal spending, while 62 percent favored more funding. In the case of combating crime, just 18 percent support cuts in federal spending while twice that number support increases ... 'Independents support increased spending on college financial aid and on rebuilding highways, bridges and roads at nearly the same rate as Democrats,' the report reads ..."
GOP Sen. Scott Brown sides with MA counterpart on protecting LIHEAP. Boston Globe quotes: "I can point to countless items in the president's budget that should be cut before LIHEAP funding. With Massachusetts residents getting pounded by brutal winter storms, cutting LIHEAP funding is a non-starter for me."
GOP cuts would worsen trade's impact on job losses. Wonk Room's Sabina Dewan: "This week, they proposed a $93 million (17 percent) cut from the International Trade Administration’s budget, most of which goes toward the National Export Initiative ... aimed at supporting 2 million American jobs ... but they also want to disadvantage thousands of workers that have been affected by the restructuring of the economy that comes with trade [by] proposing to cut $2 billion (51 percent) for job training programs that will help unemployed workers play an active role in retooling their skills."
Record Trade Gap With China
New trade deficit numbers break record. Manufacture This: "The 2010 annual trade figures for the U.S. were released today. They show a $497 billion trade deficit in goods and services, including a new record $273 billion goods deficit with China. Said Alliance for American Manufacturing (AAM) Executive Director Scott Paul: ' ... China now accounts for 75% of our overall non-petroleum goods deficit, yet I have seen little attention paid to it from this Administration, and even less from the new majority in the House of Representatives.'"
AFL-CIO pushes Senate to pass bill clamping down on China currency manipulation: "...AFL-CIO President Richard Trumka ... called on Congress to pass the bipartisan Currency Reform for Fair Trade Act of 2011. Introduced by Sens. Sherrod Brown (D-Ohio) and Olympia Snowe (R-Maine) and Reps. Sander Levin (D-Mich.), Tim Murphy (R-Pa.) and Tim Ryan (D-Ohio), it is same legislation passed by the U.S. House of Representatives last September by a 348-79 margin."
NYT's Paul Krugman lacerates bizarre currency theories among GOP leaders: "'There is nothing more insidious that a country can do to its people than to debase its currency,' declared Representative Paul Ryan ... Where did that come from? The dollar’s value in terms of other major currencies is about the same now as it was three years ago ... But Mr. Ryan is sure that the dollar is being debased and won’t take no for an answer. In an attempt to create a gotcha moment, he waved a copy of a newspaper bearing the headline 'Inflation Worries Spread' at the Fed chairman ... As Mr. Bernanke immediately pointed out, the article was about inflation in China and other emerging markets, not in the United States ... But the facts don’t matter, because conservative hard-money mania, the demand that the Fed stop trying to rescue the economy, isn’t really about inflation fears."
Treasury Releases Fannie/Freddie Report
Treasury formally releases Fannie/Freddie report options today. Politico: "While Treasury’s white paper does not constitute a conclusive legislative proposal, it lays down a critical marker by aligning the administration with the view that the federal government should not be in the business of making home ownership possible for all Americans ... Treasury concludes: 'The government must also help ensure that all Americans have access to quality housing that they can afford. This does not mean our goal is for all Americans to be homeowners.' ... The complexity and political sensitivity of unwinding the GSEs, as Fannie and Freddie are known, and determining how they should be replaced, will make resolving the issue by the close of the current Congress difficult, many experts believe. Republicans will likely want to wind down the GSEs more quickly than the Treasury plan suggests."
Dean Baker rejects claim that partially-privatized mortgage reform will save taxpayers money: "Well the hybrid model will mean slightly lower monthly mortgage payments, but this benefit is likely to be offset by higher property taxes. The higher house prices in the hybrid model will mean that it will be more difficult for first-time buyers to come up with a downpayment. And, the wealth effect associated with the higher house prices in the hybrid model will mean lower savings and less growth. We could also point out that financial intermediaries (e.g. Goldman Sachs and J.P. Morgan) would stand to make more money on housing in a hybrid model..."
Foreclosure fraud aftermath slowing down process. W. Post: "The number of foreclosure filings nationwide fell to about 260,000 last month, 17 percent lower than in January 2010. In areas where judges, law enforcement and other officials have taken aggressive actions against faulty foreclosures, the drop was even sharper."
Unknown company forges letters to influence financial reform. NPR: "Last summer, one still unnamed company hired a PR firm to launch a 'grassroots letter writing campaign' on derivatives reform. The PR firm hired a contractor, who hired a subcontractor in Arkansas. And instead of finding real people who care about derivatives — financial contracts tied to some other asset — the subcontractor went ahead and forged letters from grassrootsy sounding people ... the whole fiasco in Arkansas does tell us two things about where financial reform is right now. The conversation is not in the domain of regular people. There's a group of people who care desperately about this issue."
Conservative Governors Plan To Worsen Economy
CBPP's Judy Solomon warns states dangers of slashing health care services: "...at the same time that these governors claim they can’t afford to maintain their Medicaid and CHIP programs in the face of large budget shortfalls, many of them are proposing big tax cuts. Such tax cuts have a far lower 'bang for the buck' in promoting economic growth and creating jobs in a weak economy than the Medicaid spending that would be cut ... In addition, when a state cuts its Medicaid spending, it also loses money from the federal government because Washington pays an average of 57percent of each state’s Medicaid costs. So, every dollar in state Medicaid cuts would mean an average total reduction of $2.33."
New report indicates state proposals to cut corporate taxes won't grow economy. Wonk Room's Pat Garofalo: "... a new paper from Peter Fisher ... of the Iowa Policy Project, shows that these sorts of breaks yield very little in terms of real savings for companies ... 'The tax breaks to corporations do not stimulate consumer spending, and it is not clear how retailers can collect more sales tax if consumers are not spending any more money' ..."
Dems Push End Of Oil Subsidies, Shy From Gas Tax Hike
House Dems introduce bill to end Big Oil subsidies. The Hill: "Lawmakers including Reps. Earl Blumenauer (D-Ore.) and Ed Markey (D-Mass.) introduced a bill to end roughly $40 billion over five years worth of tax breaks. The bill stands little chance of passage but provides Democrats a political counterweight to GOP calls to begin curbing the deficit by slashing an array of federal programs."
Senate Dem leaders snuff out push to increase flagging gas tax. The Hill: "The issue arose because there is strong Democratic support for passing a multi-year transportation authorization bill ... But the money’s not there — unless the gas tax is raised or another major revenue source is found ... Much of the private discussion focused on redirecting federal spending from redundant government programs to initiatives that could spur the economy ... A Senate Democratic aide said the proposal to raise the gas tax, pushed by Sen. Tom Carper (D-Del.) in Charlottesville, 'did not generate much support ... There was much more of a consensus around ending subsidies for the oil-and-gas industry,'..."
MD Gov. proposes wind power mandate for state utilities. AP: "[The proposal] would require the state's four utilities to sign fixed-price contracts of at least 20 years with offshore wind developers who are expected to build wind turbines a dozen miles off the coast of Ocean City."
