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: The Speech - Progressive Priorities, Conservative Context
OurFuture.org's Robert Borosage: "The president combined his defense of progressive governance with a pointed and clear critique of the preposterous Republican budget plan and its indefensible priorities ... But it is worth understanding just how conservative this debate has become -- and how far the president has retreated. The most progressive president since Johnson has now embraced a center-right agenda -- even before entering negotiations with the Republicans."
President Draws Lines For Next Budget Battle
President lays out contrasting budget visions. NYT: " President Obama made the case Wednesday for slowing the rapid growth of the national debt while retaining core Democratic values, proposing a mix of long-term spending cuts, tax increases and changes to social welfare programs as his opening position..."
President sets June deadline for longer-term budget deal. Bloomberg: "The timeline Obama proposed for coming up with an agreement -- beginning talks in early May and completing them by late June -- sets up a negotiation over the nation’s long-term fiscal challenges in parallel with a congressional debate over raising the $14.29 trillion legal debt limit."
WH suggests concessions possible to avert debt limit crisis. HuffPost: "'We need to do the responsible thing in the coming weeks, which is passing the debt limit. But that doesn’t mean we shouldn’t strive to make progress in reducing the deficit in a smart way,' said [WH senior advisor David] Plouffe."
President Obama proposes Medicare savings without dismantling Medicare. W. Post: "...Obama’s framework largely preserved the entitlement programs — a central part of the nation’s social safety net — in their existing form. This was an explicit rejection of House Republicans, who favor converting Medicare into a voucher program and Medicaid into block grants ... A central aspect of the president’s Medicare proposal relies on a controversial board, to be created by 2013 under the 2010 Affordable Care Act, that will be empowered to devise ways to slow spending in the program if costs rise faster than specific limits. Under the year-old law, the board would undertake such work if Medicare spending grew by 1 percent faster than the gross domestic product. Obama would lower that ceiling to 0.5 percent faster than the GDP."
Obama proposal to strengthen Independent Payments Advisory Board will be a major fight with GOP. TIme's Kate Pickert: "Obama likely thinks he has good cover ... The Simpson-Bowles deficit commission recommended empowering IPAB even more than Obama suggested today. It said IPAB should be able to make recommendations for private health insurance plans, which would make IPAB's power much more dramatic ... Obama left other deficit reduction ideas on the table. He does not support raising the Medicare retirement age to 67, as Ryan suggests. A senior administration official was also careful to point out that capping or eliminating the tax exclusion for job-sponsored health benefits has not been proposed. ... Simpson-Bowles also recommended increasing cost-sharing for Medicare beneficiaries; Obama said nothing about this."
The Guardian's Michael Tomasky argues the President is finally challenging conservatism head-on: "...he showed today that is willing to fight the GOP on straightforward ideological grounds, and not just by saying 'hey, my numbers aren't quite as severe as theirs.'"
While Mother Jones' David Corn argues Obama is still playing on conservative "turf": "Obama is ticking off the boxes—cuts in government (including the military), taxes on the wealthy, and Medicare and Medicaid savings (details to come)—as he tries to leapfrog over the GOP in this deficit-reduction chase and rewrite the overarching narrative ... he's attempting this sophisticated and tricky maneuver on GOP turf—and in doing so, he runs the risk of reinforcing the Republicans' basic message that the name of the game is deficit-reduction."
CBPP concerned about ratio of spending cuts to tax increases: "Unlike the Ryan plan, the President’s plan puts all parts of the budget on the table, including defense and revenues. Unlike the Ryan plan ... the President’s plan contains measures to reduce [health care] costs ... [But because] Because the Obama plan relies on budget cuts for two-thirds of its deficit reduction measures, it goes dangerously far in two areas..."
President calls for deeper military spending cuts, Pentagon may resist. NYT: "He called for cutting $400 billion more in military spending — twice what his defense secretary, Robert M. Gates, told Congress was the largest cut he could recommend ... officials at the Pentagon said Mr. Gates was not told of Mr. Obama’s proposal until Tuesday. In a statement, a Pentagon spokesman, Geoff Morrell, said that 'further significant defense cuts' would reduce the military’s capability."
Matt Ygelsais argues President need not talk about deficits at all: " At the moment the international investment class is prepared to lend money to the United States of America at low interest rates ... the United States of America has a lot of infrastructure needs [and] has a large number of unemployed people ... Obama said that 'doing nothing on the deficit is just not an option.' But it is an option! ... It won’t be an option forever, but that’s all the more reason to exercise the option while we can."
GOP senators propose $6.2T cut in Social Security. Mother Jones' Suzy Khimm: "Under a proposal unveiled by Sens. Lindsey Graham (R-S.C.), Rand Paul (R-Ky.), and Mike Lee (R-Utah), the qualifying age for Social Security would rise from 67 to 70 by 2032, while benefits for everyone earning more than an average of $43,000 over their lifetime would be reduced."
Conservatives Wobble Over 2011 Budget Deal
Conservative chafe over 2011 budget deal after CBO concludes little immediate impact on deficit. NYT: "...the bill would produce only $350 million in tangible savings this year ... Future savings would be greater as the cuts took hold ... lawmakers warned their leaders that they needed to defend the deal from attacks from the right if they hoped to hold most of their members together ..."
The Hill's "whip count" suggests deal will pass today: "While there will be defections on the right and left, Capitol Hill sources believe the funding bill for the remainder of fiscal 2011 will clear both chambers. The Senate vote, however, is expected to be more of a cliffhanger than the House vote."
Some cuts are deep, but not all. NYT: "The Commerce Department ... is 'losing' $6.2 billion that was included in the last budget for its once-a-decade census — money that would not have been spent anyway this budget cycle because the census has already been completed ... [But] the housing department, officials said they considered it a real cut to lose $20 million for their mortgage fraud program ... State and local police will be losing more than $900 million this year — a 25 percent reduction — in Justice Department money used to hire hundreds of local police officers, pay for new technology and provide other services."
House votes to kill health reform law's plan for cost-saving preventative care. AP: "House Republicans [voted] to eliminate a section in the law providing $15 billion over the next decade on such preventive health care issues as fighting obesity, reducing smoking and promoting better nutrition ... Democrats cited a report from Trust for America’s Health concluding that spending $10 a person every year for physical activity, nutrition and anti-smoking initiatives would result in more than $16 billion in health care savings annually within five years."
Levin-Coburn Report May Lead To Goldman Prosecutions
New bipartisan report from Sens. Carl Levin and Tom Coburn names names for causing the financial crisis. NYT: "...the report focuses on an array of institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Supervision, a regulator; the credit ratings agencies Standard & Poor’s and Moody’s Investors Service; and the investment banks Goldman Sachs and Deutsche Bank."
"Goldman Sachs Misled Congress After Duping Clients" headlines Bloomberg: "The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue."
Deutsche Bank fingered for knowingly profiting off a "Ponzi scheme": "In addition, it took the Germany's Deutsche Bank to task for peddling mortgage securities scorned as 'crap' and 'pigs' by one of its senior executives, Gregg Lippmann, who referred to the broad market for risky mortgages as a 'Ponzi scheme.' Lippmann secretly bet as much as $5 billion of the company's money on a sharp drop in the value of mortgage securities, reaping $1.5 billion in profits to offset some of the bank's heavy mortgage losses."
State attorneys general worry about loss of leverage after feds go ahead with foreclosure fraud settlement. Bloomberg: "The 14 largest U.S. mortgage servicers, including JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), agreed to review all foreclosed loans from 2009 and 2010, and pay back losses in cases that were mishandled. They also will improve procedures ... [But federal] banking regulators didn’t include any requirements for lowering mortgage debt. ... The settlements, which include yet-to-be determined monetary penalties, also prohibit banks from seizing homes for which borrowers have negotiated a trial or permanent loan modification. The attorneys general proposal goes a step further, freezing the foreclosure process even while borrowers are being evaluated for workouts."
NYT explores why there have been so few prosecutions for causing the financial crisis: "Leading up to the financial crisis, many officials said in interviews, regulators failed in their crucial duty to compile the information that traditionally has helped build criminal cases. In effect, the same dynamic that helped enable the crisis — weak regulation — also made it harder to pursue fraud in its aftermath ... legal experts point to numerous questionable activities where criminal probes might have borne fruit and possibly still could."
"Larry Summers has had enough financial regulation" finds Reuters' Felix Salmon: "... Summers has gone so far as to launch ad hominem attacks on reformers, calling them angry people who hate economics and don’t do math ... Summers should be demonstrating substantially more humility here on the subject of encouraging financial innovation, when countries which constrained it did pretty well during the crisis compared to those with a deregulatory philosophy"
