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: 6 Things Everyone "Knows" About Deficits
OurFuture.org's Richard Eskow: "For too many journalists, consultants, and policy makers, these ideas are 'givens,' things that everybody knows ... which also happen to be totally wrong. 1. Deficits are caused by government spending ... 2. Neither the Republican budget nor the President's budget propose cuts to Social Security benefits ... 3. 'We have to live within our means so we can invest in the future.' ... 4. More concessions to Corporate America will lead to more jobs. ... 5. Government debt soared because of the last financial crisis, but we can fix the debt problem without ending the Wall Street behavior that will cause the next crisis ... 6. Medicare, Medicaid, and Social Security are a huge deficit problem."
President Opens Door To Deficit Deal ... But Is It A Trap Door?
President expresses optimism that compromise with Republicans possible on Social Security and Medicare. NYT: "The White House has already opened back-channel conversations to test Republicans’ willingness to negotiate about the soaring costs of Medicare and Medicaid, Social Security’s long-range solvency and an income-tax code riddled with more than $1 trillion a year worth of loopholes and tax breaks ... While no budget summit is imminent, Mr. Obama said he and Republican leaders are 'going to be in discussions over the next several months.'"
Bipartisan Senate "Slash Mob" meeting on possible deficit reduction/Social Security deal. HuffPost: "Liberal groups ... are worried that [Sen. Dick] Durbin's involvement and his close ties to President Barack Obama means he'll be willing to compromise on core principles."
GOP split over whether to work with President on deficit reduction. W. Post: "Some Republicans, particularly those in the House, want to force an immediate showdown with Democrats: GOP leaders have included sharp cuts to federal agencies in a must-pass spending measure that would keep the government open through September. Other Republicans, including many longtime senators, want to seize the moment to join Democrats in overhauling politically sensitive programs such as Social Security and Medicare, the biggest drivers of future spending."
Republicans signal they will propose Social Security and Medicare cuts in their upcoming budget. Bloomberg: "House Majority Leader Eric Cantor, a Virginia Republican, said Feb. 14 that his party will propose 'very bold' changes to entitlements in their 2012 budget resolution. 'We’re going to tee it up for them' and 'if they don’t take up our offer, it’s going to be very plain' to voters 'who’s leading and who’s not,' said Cantor. Yesterday, House Speaker John Boehner said Republicans will offer specifics in their budget."
Some Dems hopeful GOP has fallen into "entitlements trap." Politico: "With Obama refusing to offer his own plan for entitlements, congressional Republicans — as the president noted — rushed in to fill the vacuum ... 'They are suckers,' said one senior Democratic congressional aide of the House GOP plans to release the first detailed proposals to reduce entitlement spending. 'They have painted themselves into a corner.' ... 'None of the options polls well,' lamented one Republican insider."
Paul Krugman reminds that cutting Social Security and Medicare benefits for the wealthy doesn't amount to much: "...while there’s some money to be gotten by taxing the top 2 percent — they have more than 20 percent of the income — they account for roughly their pro-rata share of benefit costs — that is, the richest 2 percent account for around 2 percent of Medicare expenses. ... Social Security is more complicated, but bear in mind that high earners get bigger benefits, but also get taxed on those benefits; so again, we’re talking about savings not very different from their share of the population ... This is more anti-Wille Suttonism, going where the money isn’t."
GOP Plan Will Destroy Jobs, Speaker Sez "So Be It."
Speaker Boehner shrugs at prospect of destroying 200,000 jobs, saying "So be it." W. Post: "'Over the last two years since President Obama has taken office, the federal government has added 200,000 new federal jobs,' Boehner said. 'And if some of those jobs are lost in this, so be it. We're broke. It's time for us to get serious about how we're spending the nation's money.' ... the government might have to pay federal unemployment assistance to any laid-off federal workers, potentially adding more costs ... most of the new hires were to replace employees ... it's safe to say the federal government added about 107,057 new positions -- not the 200,000 Boehner claims."
The GOP cuts will destroy a lot more jobs than that. W. Post's Dana Milbank: "I checked with budget expert Scott Lilly of the Center for American Progress, and, using the usual multipliers, he calculated that the cuts - a net of $59 billion in the last half of fiscal 2011 - would lead to the loss of 650,000 government jobs, and the indirect loss of 325,000 more jobs as fewer government workers travel and buy things. That's nearly 1 million jobs - possibly enough to tip the economy back into recession."
Dean Baker points out the underreported fact that Boehner is lying: "Investors are willing to lend the United States trillions of dollars at historically low interest rates. This means that the government is not broke. There is no evidence that it is coming up against any serious spending or borrowing limitation."
President threatens veto of GOP cuts. USA Today: "Obama's ultimatum came in a written statement hours after a news conference in which he urged lawmakers to 'do things in a sensible way' without jeopardizing the nation's economic recovery."
Government shutdown threat looms over budget impasse. HuffPost: "One top Republican aide, echoing the sentiment of colleagues on the Hill, called the veto threat 'pure brinksmanship.' ... Senator Chuck Schumer (D-N.Y.), said 'I don't think a single Democrat is even entertaining the notion of trying to cause a shut down ... There are many Republicans who have already said they want a shut down and their leadership, even when asked repeatedly has not taken it off the table. So we are trying to get them to take it off the table.'"
Sen. Minority Leader McConnell doesn't embrace House GOP cuts. W. Pos quotest: "We're going to try to achieve the same reduction in total that we hope will be achieved on the House side later this week ... We'll see whether the Senate wants to establish different priorities."
TNR's Jonathan Chait observes that the GOP quickly ran out of non-vital services to cut: "Max Bergmann notes that the House budget would cut funding for nuclear security ... there's a deeper issue here. There just isn't a lot of waste in the federal budget. And if your premise is to craft a budget that's compatible with revenue levels that Republicans find acceptable ... then you're very quickly going to run into this problem ... The [Simpson-Bowles] commission [also] wanted to find some non-vital government functions to eliminate, but it couldn't, so it wound up proposing a major reduction in the federal workforce while pretending this would have no impact on functionality."
Strong majority opposes GOP plan to defund health reform law. CBS: "...55 percent, disapprove of the plan to cut off funding to the new health care reforms, and just 35 percent approve ... Forty-nine percent of independents disapprove, and 38 percent approve."
Dem Sen. Feinstein seek to protect renewable energy from House cuts. The Hill: "Sen. Dianne Feinstein (D-Calif.) is seeking to mobilize senators against House Republicans' attempt to end Energy Department loan guarantees for renewable-power projects ... Her letter warns that under the House CR, five conditional loans already issued would have to be withdrawn, while 26 others in the final stages could not be completed. The projects combined are seeking $15.5 billion in loans to finance over $24 billion in infrastructure – projects that would employ more than 35,000 people, the letter states."
President, GOP budgets part ways on science. W. Post: "... the president proposes $66.8 billion for nondefense research and development, 6.5 percent more than 2010 funding and 12.5 percent more than Republicans outlined in their cost-cutting 2011 budget bill ... Norman Augustine, the former chief executive of Lockheed Martin and a promoter of science and technology, said Republican lawmakers need to distinguish vital long-term programs from short-term ones. 'A meat ax across the board is abdicating their responsibility.'"
Some House GOPers not on board with own party's proposed cuts. The Hill: "Rep. Steven LaTourette (R-Ohio), who is spearheading the effort for centrist Republicans, has balked at the $61 billion reduction plan offered by House GOP leaders ... He called the underlying bill unfair because it would arbitrarily cut programs without proper vetting from committees of jurisdiction ... Pennsylvania Rep. Jim Gerlach (R) explained the [centrist GOP ]Tuesday Group wants to find a 'more equitable approach' in making the $61 billion in cuts. Garden State freshman Rep. Jon Runyan (R) left the meeting with LaTourette unsure of whether he could support leadership’s bill."
Other GOPers want even more cuts. The Hill: "Conservative members of the GOP conference have pushed to cut a full $100 billion from current spending, and [Rep. Jim] Jordan’s amendment would bring the total reductions closer to that total ... [It] would reduce current spending by another $19 billion to $20 billion beyond the cuts outlined by party leaders."
W. Post's Steven Pearlstein slams willful ignorance of GOP budget cutters: "If the aim is to reduce the deficit, you surely don't do it by cutting back on enforcement agents at the IRS whose job is to collect some of the $300 billion in unpaid taxes each year. Or to cut programs designed to immunize children, reduce teen pregnancy and offer nutritional support for pregnant mothers and infants, all programs that save a bundle later in future spending on health care, law enforcement and special education. Republicans even want to cut funding for the kind of beefed up regulation of securities and derivatives markets that would have prevented the last financial crisis. What's the fiscal logic in that?"
Someone is willing to raise taxes on the wealthy. NYT: "[MN Gov. Mark] Dayton, a Democrat elected in November, had campaigned on an explicit promise to raise taxes on the richest Minnesotans and said his budget proposal for the next two years amounted to a fulfillment of that pledge. But a standoff appears imminent. After the fall election, Republicans hold majorities in both chambers of the State Legislature."
GOP Seeks To Unravel Wall Street Reform
Republicans aim to stifle derivatives regulation. W. Post: "Corporate groups are protesting that some of the derivatives regulations could be bad for business, and they are urging the government to move more slowly. House Republicans, who overwhelmingly opposed Dodd-Frank, are arguing that regulation could undercut the U.S. derivatives industry ... Democrats countered that unregulated derivatives have already destroyed jobs and forced the government to bail out Wall Street."
Bernie Madoff says that banks and hedge funds were complicit in his crimes. NYT: "He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny."
Wall Street watchdogs argue Goldman Sachs owes taxpayers $2.9 billion. McClatchy: "Irked that Goldman Sachs appears to have reaped a $2.9 billion taxpayer-aided windfall on an investment of a mere $20 million, some experts and watchdogs say the Wall Street giant should return the money to the U.S. Treasury ... While most banks that got billions of dollars from AIG simply relayed the money to clients they'd insured against losses, Goldman got to collect a more than 100-fold return on a number of securities that soured, because none of its clients was involved."
Goldman Sachs may lose its proprietary-task operations because of Wall Street reform law. Bloomberg: "The eight-person desk, which trades currencies and stocks as well as products tied to interest rates and other fixed- income markets, will close in the days ahead ... Morgan Stanley and JPMorgan Chase & Co. are among Wall Street firms breaking off or winding down such trading units to comply with the Volcker rule ... That [Goldman Sachs] division generated revenue of $13.7 billion in 2010, 35 percent of the firm’s total."
Wisconsin On Verge Of Crushing Public Worker Unions
Wisconsin could strip public employees of bargaining rights tomorrow. AP: "... legislative leaders said Walker now has enough support in both chambers to approve the measure ... [Gov. Scott] Walker's plan would make workers pay half the costs of their pensions and at least 12.6 percent of their health care premiums ... Unions could still represent workers, but could not seek pay increases above the Consumer Price Index unless approved by a public referendum. Unions also could not force employees to pay dues and would have to hold annual votes to stay organized."
W. Post's Harold Meyerson rips WI governor: "You might think that Walker came to this extreme measure after negotiations with public-sector unions had reached an impasse. In fact, he hasn't held such discussions ... he vowed to call in the National Guard if protesting workers walked off the job or disrupted state services. It's a throwback to 19th-century America, when strikes were suppressed by force of arms. Or, come to think of it, to Mubarak's Egypt..."
Senate blocks effort to prevent TSA workers from unionizing reports W. Post. "... with all 47 Republicans voting in favor and all 51 Democrats present voting against the measure."
