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: Job Creation Stuck In Traffic
OurFuture.org's Isaiah Poole: "There is another way, and today's jobs report is a wake-up call. Instead of allowing conservatives to take us backward down a cracked, dangerous road that would not only mean missed job opportunities but continued erosion of our capacity to compete globally, let's demand immediate congressional action on a transportation bill that will put millions of the unemployed to work and make the nation more economically (and fuel-) efficient. Make a national infrastructure bank a part of the plan, to leverage private sector investment. Don't shy away from making the case for a gasoline tax increase: the head of General Motors this week called for raising the gasoline tax to $1, which would encourage consumers to demand more fuel-efficient vehicles and encourage car companies to make them."
Awful Jobs Report Show Crisis Persists
Only 18,000 jobs created in June. NYT: "The unemployment rate rose to 9.2 percent ... The increase in nonfarm payrolls came mostly from private companies, which added 57,000 jobs in June ... government agencies have been shedding jobs as they grapple with budget pressures ... The report showed the continuing challenges of adding jobs to the economy even at a rate that keeps pace with population growth, two years after the official end of the longest economic downturn since the Great Depression."
"Austerity is crippling the recovery" says Campaign for America's Future's Roger Hickey: "As a result of the end of federal stimulus support, state and local government employment declined in June, with more layoffs certain to come at all levels of government. But the surprising weakness in private sector job growth demonstrates that our country can’t expect private growth when the states are firing teachers, police and other public servants. Business won’t invest until they see customers ready to buy their products."
Jared Bernstein says the jobs machine is "stalled.": "Almost everything in today’s jobs report suggests recession-like conditions in the labor market ... if policy makers fail to recognize that our most pressing problem right now is job creation, they are a big part of the problem."
Mark Thoma laments Washington's lack of urgency: "Why, again, are we spending so much legislative time trying to figure out how to cut the deficit in the short-run -- which will make things even worse -- instead of focusing on job creation? We do need to get the budget under control in the long-run, but deficit reduction can wait until the economy is on better footing. We need more help for job markets right now, not the creation of additional headwinds that work against the recovery."
Dems slams House GOP for proposed cuts in transportation bill. W. Post: "... open hostilities broke out on the traditionally bipartisan House transportation committee over a GOP proposal to cut spending by about $15 billion a year. Democrats said the plan would cost 490,000 jobs. ... [Chairman John] Mica’s goal is to match spending to the revenue that flows into the Highway Trust Fund, primarily from the federal gas tax. He said he believes that could provide $35 billion for each of six years, which can be leveraged into $75 billion a year ... Oregon Democrat Peter A. DeFazio called Mica’s belief that $35 billion could be leveraged into $75 billion 'fantasy funding.' 'We need $87 billion just to maintain the existing transit system, just to maintain the existing highways and bridges in this country,' DeFazio said..."
Debt Limit Talks Heat Up
LAT lists what is on the table: "Among the proposals being discussed are a change in the way cost-of-living increases are calculated for Social Security; an increase in the payments that upper-income seniors make for Medicare; an overhaul of the corporate tax system; elimination of a variety of tax breaks that primarily benefit upper-income taxpayers; and significant cuts in the military budget, farm programs and other domestic spending.
Resistance among congressional Dems to cutting Social Security by change cost-of-living index. NYT: "As word spread that Mr. Obama was considering large savings from the use of a different measure of inflation to reduce the annual cost-of-living adjustment in Social Security benefits, Democrats joined with lobbyists for older Americans to reject the idea ... The proposal under discussion would affect current and future beneficiaries. Any move to exempt current beneficiaries would reduce the amount of savings."
But Dem opposition may be soft, suggests TPM's Brian Beutler: "Social Security benefit cuts may be a bridge too far for House Minority Leader Nancy Pelosi (D-CA). But what if Republicans and Democrats alike just agreed to refer to a benefit cut by another name ... the idea is to peg federal Cost of Living Adjustments to a new, stingier measure of inflation ... [Said] Rep. Jim Clyburn (D-SC), one of the Dems' principal debt limit negotiators[,] 'Now the question is will some other look at CPI make sense? And I think that it makes sense to look at it all to see what is an accurate account, a better way to determine benefits. I certainly wouldn't walk away from that kind of discussion.'"
President will meet with Pelosi today. NYT: "Mr. Obama plans to meet privately with Ms. Pelosi on Friday, suggesting that the White House is now turning its attention to soothing Democrats after the president held a secret meeting with Mr. Boehner last Sunday. That session advanced the talks and laid the groundwork for Thursday’s session, but left some Democrats complaining that they were being excluded from the process."
Speaker Boehner "shaken" by unwillingness of his caucus to compromise on taxes. Politico: "Boehner’s forces appeared shaken Thursday by the skepticism they encountered for even entertaining new tax revenues as part of the package. And the GOP’s divisions broke into the open at a White House meeting hosted by Obama for congressional leaders ... but the speaker has yet to back away."
TNR's Jonathan Chait sees a path for deal with new revenue, by reforming the Alternative Minimum Tax: "...one possible deal will raise a lot of taxes, but offset the revenue by permanently fixing the AMT. That way, conservatives can say that they didn't vote for a net tax hike -- they just voted to close some loopholes and plow the revenue back into other tax reductions. This allows them to avoid contradicting their sacred pledge to Grover Norquist never to support a revenue increase. But wait, you ask! How does this help the deficit problem? The answer is that if you assume that Congress will continue to patch the AMT year after year anyway, then the revenue loss from that 'tax cut' isn't real. You're just accounting for revenue that would be lost anyway, but paying for it rather than financing it with debt. In other words, you're turning a future assumed debt-financed tax cut into a future paid-for tax cut. That's genuine budget savings."
President pledges to veto short-term debt limit increase. The Hill: "...Obama said he would not sign a deal floated by Senate Minority Leader Mitch McConnell (R-Ky.) and other Republicans that would cut about $1 trillion in spending in exchange for a six or seven month extension of the debt ceiling. The second option ... would cut spending by $2 trillion and raise the debt ceiling through calendar year 2012. 'He did not dismiss that one,' the source said. The third option, and the one Obama appears to covet, is that 'they should go big and try to get the big one.'"
PIMCO chief Mohamed El-Erian urges "grand bargain" that includes focus on jobs, in FT: "...the grand bargain itself – especially if centred on the urgent need to address the country’s growing unemployment crisis – can help overcome the repeated difficulties that the administration has faced in outlining a credible economic vision. This is central to unlocking the considerable idle capital that is waiting on the sidelines for a medium-term roadmap before being committed to investment spending."
NYT edit board argues President must keep 14th Amendment option on the table: " Such a declaration by the president would probably lead to litigation or even attempts at impeachment, and could create years of unanticipated legal and financial problems. It might require that bondholders be paid off before spending obligations are met. But if Republicans kill a deal because it raises a dime of revenue, or if Democrats will not support it because it leans too heavily on the less fortunate, then the constitutional option may look better than the recession option."
Laurence Tribe argues the debt ceiling is constitutional, in NYT oped: "The Constitution grants only Congress — not the president — the power 'to borrow money on the credit of the United States.' Nothing in the 14th Amendment or in any other constitutional provision suggests that the president may usurp legislative power to prevent a violation of the Constitution."
NYT's Paul Krugman argues we can't trust Obama: "... it’s hard not to get the impression that he is now turning for advice to people who really believe that the deficit, not unemployment, is the top issue facing America right now, and who also believe that the great bulk of deficit reduction should come from spending cuts. It’s worth noting that even Republicans weren’t suggesting cuts to Social Security; this is something Mr. Obama and those he listens to apparently want for its own sake."
Sen. Kent Conrad holds off on releasing "shared sacrifice" budget. Roll Call: "Keeping the budget under wraps may be a sign of progress in the larger debt talks. That’s because the Democratic budget plan is just for show — there are no plans yet for a markup or to bring the plan to the Senate floor."
Breakfast Sides
EPA announces new rule on coal plants, clamoing down on smog and soot. McClatchy; "The EPA estimated the pollution controls would cost $1.6 billion per year over 30 years. It projected health benefits of $280 billion per year. The agency also said that the money spent on pollution controls would create U.S. jobs ... Conservation and environmental groups applauded the new rule."
Political winds shifting on ethanol subsidies. NYT: "In Washington, there is growing consensus that the ethanol industry has reached financial stability, making much government assistance unnecessary ... Industry lobbyists are now supporting a compromise announced Thursday by Senator Dianne Feinstein, a California Democrat and a critic of ethanol subsidies, and two ethanol supporters, Senators Amy Klobuchar, Democrat of Minnesota, and John Thune, Republican of South Dakota. That proposal would end the blender’s tax credit entirely and dedicate $1.33 billion of the $2 billion in unspent money from this fiscal year’s budget for deficit reduction. The remaining $668 million would go toward tax credits for advanced biofuels and for gas stations to install special blender pumps to allow drivers to choose higher concentrations of ethanol in their gasoline."
Treasury expands anti-foreclosure program to help the hardest hit. HuffPost: "Unemployed homeowners who've fallen slightly behind or are at risk of falling behind on their mortgage payments soon may be eligible for a 12-month forbearance period during which their monthly payments are reduced or suspended. Currently, jobless homeowners receiving unemployment benefits are eligible for just three or four months of forbearance. (Forbearance doesn't mean forgiveness; the loan still has to be repaid.)"
