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: We Can't Cut Our Way To Prosperity
OurFuture.org's Robert Borosage, in USA Today: "We can't cut our way to prosperity. The best deficit reduction program is to put people back to work. With corporations sitting on more than $1 trillion in cash waiting for customers, more tax breaks won't help. Americans — struggling with rising costs, stagnant wages, and declining home values — are tightening their belts. It is time for government to act. We should take advantage of low interest rates to finance rebuilding America's infrastructure, increasing our global competitiveness and putting people to work. We should be expanding, not cutting, investments in education, innovation and new energy vital to our future."
Pawlenty Backs Radical Corporate Tax Cuts, Social Security Cuts, Spending Caps
Presidential candidate Tim Pawlenty calls for extreme tax cut on wealthy and corporations, in first policy address: NYT: "Mr. Pawlenty’s proposed tax and spending cuts go well beyond anything being sought at this point by the Republican leadership on Capitol Hill, and were dismissed by Democrats and their allies as fiscally unworkable and skewed to the wealthy and big corporations at the expense of working people. Under his proposal, the corporate income tax rate would be reduced to 15 percent from 35 percent. Individual federal income tax rates, which currently go as high as 35 percent, would be flattened to just two rates: 10 percent for the first $50,000 of income and 25 percent for income above that."
"Pawlenty Tax Plan Panned by Skeptics Who Question His Revenue Projections" headlines Bloomberg: "Pawlenty called for means testing for Social Security’s annual cost-of-living adjustment, as well as a gradual increase in the program’s retirement age. He said he would like to see block grants to states for Medicaid ... His proposal to limit federal spending to 18 percent of gross domestic product ignores rising health-care costs and an aging U.S. population, said Leonard Burman, a professor of public affairs at Syracuse University ...'The level of disconnect from reality is just disturbing,' Burman said."
W. Post's Steven Pearlstein slams Mitt Romney for dishonest attacks on the President's economic record: "Just to review: The Bolsheviks have taken over, capitalism as we know it is about to come to an end and, yet, somehow the Dow Jones industrial average has gained 47 percent since the Obama inauguration, private-sector profits are back at record levels and business investment in new equipment and software is growing at the annual rate of 11.7 percent. How weird is that?"
No New Help From Fed
Bernanke argues against pulling back stimulus, while predicting more growth. Bloomberg: "Federal Reserve Chairman Ben S. Bernanke said the 'frustratingly slow' U.S. recovery warrants sustained monetary stimulus while predicting that growth will gain speed in the second half of the year. ... 'Establishing a credible plan for reducing future deficits now would not only enhance economic performance in the long run, but could also yield near-term benefits by leading to lower long-term interest rates,' Bernanke said. On the other hand, 'a sharp fiscal consolidation focused on the very near term could be self-defeating.'"
Other economists downgrade forecasts. Politico: "Several leading economic forecasters this week reduced their outlook for second-quarter growth and suggested the rest of this year and the next could be very sluggish as the nation continues to work off the excesses of the credit bubble while lacking a clear driver for faster expansion."
Tim Duy of Economist's View translates Bernanke, no additional stimulus coming: "We received a pretty clear message yesterday – if you are looking for additional monetary stimulus, you need to find a new hobby ... Fed officials simply believe the weakness in the first and second quarters of this year is largely transitory, the impact of commodity prices and tsunami-related supply disruptions. In other words, nothing to see here, move along."
Geithner Looms Large In Austerity vs. Stimulus Debate
Geithner playing big WH role in deficit debate, argued against additional stimulus. W. Post: "Geithner has successfully pressed Obama to announce a plan to reduce the deficit by $4 trillion, though the president ultimately proposed doing it in 12 years rather than 10, as the Treasury secretary wanted. And Geithner has argued for an approach that would include tax increases, spending cuts and politically explosive changes to government retiree programs like Social Security and Medicare ... Once, as [Christina] Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was 'sugar,' and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt. Wrong, Romer snapped back. Stimulus is an 'antibiotic' for a sick economy ... In the end, Obama signed into law only a relatively modest $13 billion jobs program, much less than what was favored by Romer and many other economists in the administration."
W. Post's Harold Meyerson argues historians will condemn Obama's failure to embrace major public works program: "When historians look back at how Barack Obama lost the 2012 election — or won it only because the Republicans nominated a certifiable space case ... [they will note that this] recession required — and very much still requires — a massive public employment program to fill the hole created by our offshoring private sector and Americans families’ towering debt. Such a program would have required a massive and brilliant sales job from Obama at the outset of his presidency, given the decades of the American right’s delegitimization of government. Obama’s political aides dismissed this option out of hand; his economic aides failed to insist on it."
GoozNews recommends appointed blocked Fed nominee Peter Diamond to head WH Council of Economic Advisers: "It would be a stick in the eye to Republicans, and especially Alabaman Sen. Richard Shelby, whose love affair with the big banks from his seat on the Senate Banking Committee knows no limits. It would be a boost to Fed chairman Ben Bernanke, who today in a speech in Atlanta made his strongest statement yet that the short-term budget cutting fever now raging in Washington threatens to short-circuit the recovery. And it would be a signal to the business community that says, 'Hey, look, I’m dealing with a pack of assholes here. If you want to see your sales and profits rise over the next four quarters and not have the country sink into a double-dip recession, you’d better start spending and hiring, because the cavalry is led by a bunch of Custers and they’re riding off in the wrong direction.'"
Sen. Maj. Leader Reid charges House with burying jobs bills. The Hill: "He blasted the House as a 'big black hole' that has refused to act on bills cleared by the upper chamber, and added that 'nothing is coming out of there other than their idea of how to kill Medicare.' Reid said the House has buried two bills — patent reform legislation and Federal Aviation Administration reauthorization — that together would help create or save an estimated 580,000 jobs."
Senate Min. Leader McConnell double down on deny aid to workers displaced by trade. Wonk Room's Pat Garofalo: "Senate Minority Leader Mitch McConnell (R-KY) went so far as to claim that trade assistance has no place in negotiations over free trade agreements ... the GOP wants only to talk about the positive aspects of trade, while pretending that the negative aspects simply don’t exist."
Sen. Jon Kyl suggests GOP will only approve short-term debt limit hike if deal not reached on deep cuts. The Hill: "Negotiators in the Biden talks are looking for a way to increase the debt ceiling enough so that it does not need to be raised again until the end of 2012, after the next election. Kyl said that timeline would require a debt-ceiling increase of $2.4 trillion. But Kyl said the GOP would look to a shorter-term increase in the debt ceiling if the talks fail to produce more than $2.5 trillion in cut ... Kyl said the spending cuts could take effect over 10 years or more."
Wisconsin GOP Goes On Right-Wing Rampage
WI Gov. Walker ramming through right-wing agenda ahead of recall elections. NYT: "In just the last few weeks, Gov. Scott Walker, a Republican, has signed legislation to require voters to show photo identification cards at the polls and to deregulate elements of the telecommunications industry. And the Republican-dominated Legislature is now in the midst of advancing provisions to expand school vouchers, to allow people to carry concealed weapons, to cut financing for Planned Parenthood and to bar illegal immigrants from paying in-state tuition at Wisconsin’s universities. Why the urgency? ... They are at risk of losing their newly won majority in the State Senate as early as next month."
While CT quietly turns more liberal. NYT: "Lawmakers over the last several weeks have enacted the largest tax increase in Connecticut history and approved the nation’s first law to mandate paid sick leave for some workers ... they did not receive or they decided to tear up the antitax, budget-slashing, confront-the-unions script that has characterized state legislative sessions elsewhere."
NJ Gov. Christie cuts clean energy targets. NYT: "... after his decision last month to withdraw from a multistate trading system, the Regional Greenhouse Gas Initiative, environmental advocates called the move another setback ... Public hearings will be held on the plan before it becomes final. The revision sets the amount of electricity to be obtained from renewable sources like solar or wind power at 22.5 percent by 2021, down from 30 percent..."
Debit Card Vote Today
Debit card fee cap delay gets vote today in Senate. W. Post: "Sen. Jon Tester (D-Mont.) unveiled revised legislation Tuesday that requires four banking regulators to study the issue for six months. The Federal Reserve would then have an additional six months to rewrite the rules governing swipe fees. Tester’s original bill called for a two-year delay and would have required Congress to vote again to approve additional action ... one banking executive said Tuesday night that the industry had secured a number in the mid-50s, with 10 additional senators undecided. But Senate Majority Whip Richard J. Durbin (D-Ill.) has vowed to fight the proposal."
JPMorgan Chase's Jamie Dimon complains to Bernanke about new regulation. Bloomberg: "Dimon asked Bernanke if he 'has a fear like I do' that overzealous regulation 'will be the reason it took so long that our banks, our credit, our businesses and most importantly job creation to start going again.' ... Dimon’s points are valid, Bernanke said ... 'But there is some trade-off there and you’re right to point that out,' Bernanke said. 'It’s probably going to take a bit of time before we over time figure out where the cost exceeds the benefits and we make the appropriate adjustments.'"
Health Reform Starts Move Against Profiteering
Health reform prompts Blue Shield of California to cap earnings. NYT: "Blue Shield of California, a large nonprofit health insurer that has come under sharp criticism in recent months for its double-digit rate increases, said on Tuesday that it planned to cap its earning and refund the bulk of any excess income to its policyholders. Bruce Bodaken, chief executive of Blue Shield of California, which plans to limit its profit to 2 percent of its revenue. The insurer said it would limit its profit to no more than 2 percent of its revenue and said it already planned to return $180 million, the profit the company says it made above its 2010 target ... the federal health care law is aimed at making sure insurers are not able to set their premiums too much above their costs. Some experts expect other insurers to take similar actions as the law goes into effect."
Today's appeals court hearing on constitutionality of health reform is "the one to watch" says Time's Kate Pickert: "Not only is its outcome unpredictable because of mixed party lines, but the lead plaintiffs in the case are governors and attorneys general from a whopping 26 states."
