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: How Much Would A Social Security Deal Cost You?
OurFuture.org's Richard Eskow: "The average retired woman receives $890 in Social Security benefits, so the "chained CPI" cut would slash her benefits by almost $500 by the time she's 80. Here's how the cuts work out overall: By the age of 75, benefits would be cut by nearly 4%. By 85 that figure would be 6.5%, and by 95 it would be 9.2%. It gets much worse for younger people, because the effect is cumulative."
Social Security On The Chopping Block
President puts Social Security on the table, reports W. Post: "President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue ... Privately, some congressional Democrats were alarmed by the president’s proposal, which could include adjusting the measure of inflation used to determine Social Security payouts. But others described it as primarily a bargaining strategy intended to demonstrate Obama’s willingness to compromise and highlight the Republican refusal to raise taxes."
But some in WH say W. Post report is overblown. Politico: "Rather than $2.4 trillion in deficit reduction, the administration is aiming higher toward as much as $4 trillion over 10 years, and this increases the likelihood that some commitment to tax reform must be part of the mix ...[A deal would] include about $1.1 trillion in savings from future defense and domestic appropriations, and upwards of $600 billion from various government benefits and subsidies. Within these totals about $350 billion to $400 billion is now attributed to Medicare and Medicaid savings, and one wildcard still is a proposed change in how the inflation adjustments are made ... Social Security recipients could be impacted by these changes in the CPI, but administration officials Wednesday night cautioned against a Washington Post report that 'major changes' were being contemplated in the retirement program."
Military spending cuts could total $700B reports The Hill; "That’s almost twice the amount President Obama originally proposed ... Sources told The Hill recently that GOP negotiators are ready to break with recent Republican ideology by trading large defense cuts for not raising taxes as part of a debt-ceiling deal ... 'They want to hang defense cuts around the administration’s neck for 2012,' said one Democratic source who works on military issues. 'View all and any of this in the political context.'"
Are the Bush tax cuts on the table too? NYT: "One official said some revenue could be generated by allowing Bush-era tax cuts for affluent Americans to expire at the end of 2012, which would produce hundreds of billions of dollars, though those savings would be offset by the costs of retaining lower rates for those below the income threshold. Aides to Mr. Boehner said that no tax increases were on the table and that he had not agreed to the expiration of any tax cuts."
"Shared sacrifice" plan with 50-50 spit between spending cuts and tax increases gains traction among Senate Dems. The Hill: "The Senate Democratic budget is designed to make a strong statement that tax revenues should be increased substantially by requiring wealthy families to pay more into federal coffers and closing special corporate tax breaks. The plan includes a tax increase for couples making more than $1 million per year. Senate Republican leadership aides said Wednesday they were eager to see the details of Conrad’s plan, while wasting no time in blasting Democrats for raising taxes by $2 trillion."
"Liberals Fear Obama Is Bungling Debt Talks" reports Time's Michael Crowley: "Here are the critique’s three basic components: He Blew His Best Shot ... He’s Ineptly Framed the Debate ... He’s Caving In..."
NYT's Nick Kristof slams GOP for defending hedge fund manager loophole: "These fund managers are compensated mostly with a performance bonus of 20 percent or more of the profits they make. Under this carried interest loophole, that 20 percent is eligible to be taxed at the long-term capital gains rate (if the fund’s underlying assets are held long enough) of just 15 percent rather than the regular personal income rate of 35 percent. This tax loophole is also intellectually vacuous. The performance fee is a return on the manager’s labor, not his or her capital, so there’s no reason to give it preferential capital gains treatment ... when Congressional Republicans claim that the reason for their recalcitrance in budget negotiations is concern for the welfare of ordinary Americans, look more closely."
Republicans argue millionaires will reduce the deficit if we leave them alone, reports TPM: "'Millionaires can contribute to deficit reduction by spending part of their millions,' said Sen. John McCain (R-AZ). 'I agree with the Wall Street Journal editorial this morning: We should cut the corporate income tax from 35 to 25, and close loopholes that are in, and make sure that everything is revenue neutral ...' ... 'Create jobs, hire more people that pay more taxes, grow the economy, stay in America, don't leave, hire people -- that's how millionaires can help, is create more workers, and if you raise taxes you're gonna make it harder to keep the job you got,' explained Sen. Lindsey Graham (R-SC)."
Corporate lobbies warn against failure to raise debt limit reports The Hill.
Bipartisan Hope For Infrastructure
Signs that Republicans will come around on infrastructure. HuffPost: "Several freshmen House Republicans have either publicly stated or privately pushed for enhanced federal spending in their home districts. The most recent revelation came when Rep. Bobby Schilling (R-Ill.) told a town hall last week that the president's stimulus package -- which he had criticized on the road to election -- would have been better had it 'taken a lot bigger chunk of that money and put it into infrastructure.'"
But not yet, finds NRDC's Deron Lovaas: "The House Transportation and Infrastructure Committee is about to unveil a new 6-year transportation reauthorization bill that may cut highway and mass transit funding by one-third ... This short-sighted bill would hamstring our nation’s transportation network ... The Senate is working on its own, two-year version of a transportation reauthorization, which appears to be charting a better way forward than the House bill. A two-year bill has the political advantage of a smaller price tag, and could still address these critical issues and put America on the path to a cleaner, more prosperous and secure future."
CFPB Still In Limbo Two Weeks From Deadline
CFPB likely to have no director as of July 21, reports Newsweek's Michael Tomasky: "So it seems difficult to imagine that the CFPB will have a director on July 21. And if it doesn’t? Under Dodd-Frank, it keeps its watch over the banks but loses its regulatory power over payday lenders, mortgage brokers, private check-cashers, credit-reporting agencies, debt collectors, and debt-settlement companies. That’s a substantial weakening right there, irrespective of whether the Republicans ever succeed in forcing the White House to accept measures like the five-member panel [instead of a sole director]."
Some hope that CFPB can still perform without a director. Politico: "...one Democratic Senate staffer involved in the agency’s creation said it’s designed to 'fly with three engines.' Already, the bureau has its top-level staff in place, including Richard Cordray, former Ohio attorney general, who is the CFPB’s general counsel; Holly Petraeus, the bureau’s military affairs director, a former Better Business Bureau official and wife of newly confirmed CIA Director David Petraeus; and Catherine West, the CFPB’s chief operating officer, a former top executive at Capital One and an influential Republican."
Fed reveals that Goldman Sachs took biggest bailout loan during financial crisis reports Bloomberg.
Breakfast Sides
Foreclosure fraud settlement talks led by state AGs making progress, reports Bloomberg: "Negotiators tentatively set a July 13 target for a settlement, which may exceed $20 billion ... The proposed accord would require banks to set up a fund for states to resolve civil mortgage complaints as well as a separate federal account that would require them to provide a specified amount of mortgage relief to borrowers, two people said. Banks could get credit toward their relief obligation if they write down principal and modify loans in their portfolio..."
Senate cmte to try again to move trade deals. The Hill: "Senate Republicans who staged the protest last week argued that Democrats were trying to 'ram through' the long-delayed deals. They said there wasn't enough time to take up nearly 100 amendments at the scheduled time and said including TAA in the Korean deal would complicate fast-track authority. Sen. Orrin Hatch (R-Utah), ranking member of the Finance Committee, indicated Republicans will attend the markup this time around."
New study shows health insurance for the poor improves health, and wealth. NYT: "When poor people are given medical insurance, they not only find regular doctors and see doctors more often but they also feel better, are less depressed and are better able to maintain financial stability, according to a new, large-scale study that provides the first rigorously controlled assessment of the impact of Medicaid."
Obama administration backs cellulosic ethanol plant. NYT: "The Energy Department plans to provide a $105 million loan guarantee for the expansion of an ethanol factory in Emmetsburg, Iowa, that intends to make motor fuel from corncobs, leaves and husks ... the first commercial-scale plant to make ethanol from a nonfood, or cellulosic, plant source ... If celluosic ethanol could be produced in an economical fashion, it would vastly increase the American potential to make motor vehicle fuel and reduce use of fossil fuels. "
