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: Washington Ignores The "Majority's Economy"
OurFuture.org's Richard Eskow: "This country has divided itself into two economies. One is the economy of Wall Street and corporate Manhattan, along with Washington's thriving economy of lobbyists, politicians, ex-politicians, national security contractors, and assorted hangers-on. Call that one the 'Acela Economy,' ... Then there's the other economy, the one where most of us live. Let's call it the 'Majority's Economy.' That one's a catastrophe, and it's getting worse, not better. Guess which one is getting more attention and care in Washington DC?"
Parties Far Apart In Debt Limit Talks
No movement in bipartisan debt limit talks. Bloomberg: "Republicans said they wouldn’t agree to any measure that raised taxes or contemplated automatic tax increases to rein in future deficits. Democrats continued to insist that Social Security cuts be omitted from the discussions."
Senate Dems embrace even split between tax increases and spending cuts for deficit reduction deal. W. Post: "'50-50,' said Senate Majority Leader Harry M. Reid (Nev.). That represents a larger share for taxes than has been proposed by either President Obama or the bipartisan commission he appointed to recommend how to cut the national debt."
New Senate GOP Budget Offers More Pain To Middle Class
Senate GOP budget proposes radical spending cuts: "Conservative Republican senators offered a proposal Tuesday that would balance the budget in nine years by dramatically reducing spending. The proposal offered by freshman Sen. Pat Toomey (R-Pa.) and other conservatives would reduce government spending to 18.5 percent of the nation's gross domestic product ... The Toomey budget would reduce non-defense discretionary spending to 2006 levels in 2012, and freeze it at that level for the next six years ... while it would repeal the healthcare reform law, it would also retain its Medicare cuts and mandate changes to medical malpractice laws. On Medicaid, it would implement a block-grant program to the states, while gradually reducing Medicaid spending to $14 billion above fiscal 2008 levels by 2019."
Paul Krugman explains why capping spending levels at where they a few years ago means "savage" cuts: " ...why can’t [we] make do with the same level of spending it had in 2007? First and most obviously, the baby boomers are retiring ... Add to this the rising cost of health care: even if we take strong steps to control costs (death panels!), costs will surely rise faster than GDP for some time to come. And one more thing: yes, the deficits we’ve been running since the financial crisis — deficits we had to run to avoid another Great Depression — will mean higher interest costs, too. This is why the idea of capping spending at historical levels, while it may sound reasonable if you don’t know anything about these facts, is in fact a recipe for savage cuts in federal programs."
Senate GOP budget would raise taxes on middle class. Wonk Room's Pat Garofalo: "...preserving the Bush tax regime, but cutting rates (including the top rate), and having it all come out revenue-neutral necessarily implies a big middle-class tax increase:"
House Republican budget would take away health insurance from up to 44 million low-income Americans. AP: "The House Republican budget would leave up to 44 million more low-income people uninsured as the federal government cuts states' Medicaid funding by about one-third over the next 10 years ... The analysis by the Kaiser Family Foundation and the Urban Institute concluded that Medicaid's role as the nation's safety net health care program would be 'significantly compromised ... with no obvious alternative to take its place,'..."
Medicaid cuts in House GOP budget would hurt elderly as well as poor. NYT: "'This is a huge deal for the nation’s seniors, and it’s been largely unrecognized,' said Jocelyn Guyer, the co-executive director of the Center for Children and Families ... '...when it comes to nursing homes, a lot of seniors start off middle class and pay for their care with private funds but end up using the Medicaid program.'"
W. Post's Ezra Klein rips Alan's Simpson's ignorant comments about the retirement age: "...if he seriously doesn’t know that life expectancy from birth has increased dramatically over the last 70 years while life expectancy at age 65 hasn’t, well, he needs a new job ... [Furthermore,] raising the retirement age inflicts a double-blow on lower-income Americans: They already work more physically demanding jobs and die younger than the rich, but now they’re being told to work those jobs longer because people who aren’t them have seen large increases in life expectancy."
Senate Dems Propose Cutting Deficit By Ending Oil Subsidies
Senate Dems get behind linking end of oil subsidies to deficit reduction. The Hill: "Caucus leaders and several politically vulnerable members unveiled legislation Tuesday that would repeal $21 billion worth of tax breaks over a decade for the largest oil companies. All the savings would be steered toward deficit reduction, which Democrats made their top talking point ... the strategy isn’t a sure thing. It is drawing attacks from Republicans as well as Democrats who support the oil industry."
House to approve more oil drilling today. The Hill: "[A vote is expected today on] a bill to require that the Interior Department act on permit requests within 30 days [with a permit] deemed approved if the department has not acted within 60 days ... A second GOP drilling bill is also slated for a final vote Wednesday. The bill would require the Interior Department to sell offshore drilling leases in areas off the Atlantic and Pacific coasts beginning in 2012. It would also expand leasing off the coast of Alaska."
President Makes Economic Case For Immigration Reform
President Obama takes stand against cheap labor in immigration speech. USA Today: "President Obama laid out a plan in El Paso on Tuesday that would continue to strengthen security along the southwest border, make it harder for businesses to hire illegal immigrants and overhaul the nation's visa system to attract better-educated foreigners [as well as make] a path for legalization for the 11 million illegal immigrants in the country ... 'One way to strengthen the middle class is to reform our immigration system so that there is no longer a massive underground economy that exploits cheap labor while depressing wages for everyone else,' he said."
President "spoke truth to power" on immigration reform, argues W. Post's Lee Hockstader: "...the power in this case being congressional Republicans ... Republicans at the national, state and local level have been busy spoiling their brand with Hispanic voters for a generation by bashing undocumented immigrants, who are thoroughly interwoven with legal immigrants — in other words, real live voters. In 2012, I wouldn’t be surprised if Obama wins 70 to 75 percent of the Hispanic vote."
House Nears Passage Of Cuts For Unemployment Insurance
House Ways & Means cmte clears bill allowing states to redirect funds meant for unemployment insurance. Bloomberg: "[The bill] would let states use the $31 billion they are set to get for extended unemployment aid to prevent business tax increases, pay back federal loans or fund job-training programs. The measure may be sent to the full House of Representatives as soon as today ... 'It’s an opportunity for the states to steal from money that has been allocated for the unemployed in order to give businesses a tax break,' said Judy Conti [of the] National Employment Law Project..."
Bill to cut unemployment insurance would also cut 322,000 jobs. The American Prospect's Sarah Babbage: "If [states] use it to pay down their debt, that money will leave the economy ... no other area of spending has the multiplier effect of employment benefits."
GM to make $2B investment, create or save 4,000 jobs. NYT: "'We are doing this because we are confident about demand for our vehicles and the economy,' [CEO Daniel] Akerson said ... The United States government still owns a 26 percent stake in the automaker as part of the $50 billion taxpayer bailout. The Treasury Department could begin selling some of its remaining shares as soon as May 22..."
GOP Sen. Rand Paul accuses WH of having "enemies list" after NLRB pursues union-busting allegations against Boeing. McClatchy: "Freshman Sen. Rand Paul of Kentucky charged that Obama was targeting Republican states by stacking the NLRB with members who wanted to limit [so-called] right-to-work laws ... 'What we are really witnessing here is another example of the Republican assault on the middle class,' [Dem Sen. Tom] Harkin said..."
Health Reform Law Likely To Be Upheld
Health reform law expected to be upheld after federal appeal court hearing. LAT: "By their comments and questions Tuesday, the judges signaled they were likely to uphold provisions in the law that require virtually all Americans to have health insurance by 2014 or pay a penalty."
Judges appear unimpressed with argument that health reform is unconstitutional. Wonk Room's Ian Millhiser: "The judges ... were clearly bothered by the fact that this supposed ban on laws compelling people to take an action has no basis in the actual text of the Constitution ... opponents dug themselves in a hole because they were unable to cite a single word of the Constitution that supports their claim that Congress cannot pass laws that supposedly 'regulate inactivity.'"
China Talks End Without Big Reforms
Geithner calls China moves "promising" after two-day round of talks. NYT: "[Trade] issues have somewhat receded in importance lately as China has allowed its currency to rise against the dollar by about 10 percent, including inflation. American exports to China have also grown rapidly. 'We are seeing very promising shifts in the direction of Chinese economic policy,' Treasury Secretary Timothy F. Geithner said Tuesday."
China's growing labor shortage could help US, but not necessarily, argues W. Post's Harold Meyerson: "By 2015, [a new] study reports, the gap between American and Chinese labor costs adjusted for productivity differentials will have so narrowed that China’s labor costs will come to fully 69 percent of U.S. labor costs. So what’s the catch? Just this: The two regions that the group compared are the Yangtze River Delta (which includes Shanghai) and Mississippi ... one defined by Southern labor standards: 'fewer work rules, less unionization and lower costs' ... is the rebirth of U.S. manufacturing inescapably linked to paying the next generation of American workers less than their parents made?"
Possible Deal In Foreclosure Fraud Case
Banks make counteroffer in foreclosure fraud settlement talks. Bloomberg: "Bank of America Corp. and JPMorgan Chase & Co., along with three other U.S. mortgage servicers, proposed paying $5 billion to settle ... In a new proposal, [state] officials called for a fund, administered by state and federal officials, that would in part pay for principal writedowns, said Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller ... The fund for principal reductions could potentially pay for restitution to borrowers whose homes were improperly foreclosed on ... some lenders said they opposed any settlement terms that would reduce loan balances..."
Naked Capitalism sees state AGs retreating: "...the Miller-led effort [is] retreating from the only meaningful concessions, that of serious fines and/or principal mods ... This ask sounds troublingly like it is setting the stage for a broad waiver of liability for mortgage abuses, a step we have roundly opposed."
Government support for pricey mortgages expected to end. NYT: "...Democrats and Republicans agree that the taxpayer should no longer be responsible for homes valued well above the national average, and are about to turn a top slice of the housing market into a testing ground for whether the private mortgage market can once again go it alone. The result, analysts say, will be higher-cost loans and fewer potential buyers for more expensive homes."
