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: Dodd-Frank, One Year Later, Under Siege
Financial Crisis Inquiry Commission Chair Phil Angelides: "One year ago this week, to begin repairing the damage wrought by this avoidable catastrophe and to avert the next financial crisis, President Obama signed the Dodd-Frank financial reform law [and] the most significant changes in financial regulation since the 1930s ... From the moment the legislation was signed, the agents of its destruction went to work. Wall Street lobbying has intensified, with expenditures of nearly $52 million during the first quarter of this year exceeding the amount spent in the same period last year when the bill was being debated ... The result: a troubling uncertainty about the ultimate outcome of financial reform ...The OTC derivatives market remains without oversight or transparency. Rules on critical matters such as credit rating agencies, consumer protection, and proprietary trading remain to be enacted. All the while business as usual has resumed."
GOP Trying To Starve Wall St. Reform
Republicans trying to starve enforcement agencies. LAT: "Financial industry lobbyists have swarmed federal agencies, trying to slow down and reduce the effect of new regulations being drawn up. And House Republicans have proposed cutting the budgets of two key regulators that depend on congressional appropriations — the Securities and Exchange Commission and the Commodity Futures Trading Commission. The heads of those agencies complained Thursday that they don't have enough money to implement all the new rules."
63% support strong government oversight of banks, more support CFPB concept. HuffPost: "...as many as 63 percent of Americans favor more, not less, government oversight of financial companies. Only a small minority of those polled, 25 percent, want the opposite. Of those polled, 74 percent favored having a single agency [like the CFPB] focus on protecting consumers from financial organizations. And it's not split down partisan lines, either. Indeed, 68 percent of Republicans feel the same."
Top GOPer reiterates obstructionist stance on CFPB nomination. ABC: "Sen. Richard Shelby, R-Ala., doubled down on his resolve to block the appointment of the agency’s first leader. 'We fought it last year. We’re going to continue to fight it,'..."
Former Sen. Ted Kaufman says "I told you so.": "I repeatedly said in the Senate debates last year that the bill did not include the kind of tough laws that were passed in the 1930s by the last Congress that had to deal with a catastrophic financial meltdown ... there was nothing in Dodd-Frank that faced this reality, nothing that put hard statutory limits on the size and complexity of our megabanks. Instead, the bill passed the buck to future regulators. We are now witnessing the consequences of that decision."
Economics of Contempt argues to Rortybomb that so far "the good rules clearly outnumber the bad rules.": "The proposed rule on resolution plans was very strong — it ensures that the FDIC will have all the information it needs when it comes time to actually resolve a major bank. That’s crucial, because a successful resolution of a major bank will have to be planned out in advance and be reasonably comprehensive ... The CFTC and SEC have both proposed robust derivatives trade reporting rules — if anything, the CFTC’s proposed rule on post-trade reporting is a little too robust ... but the delay for publicly reporting block swap trades definitely won’t be longer than one day. I don’t know how you describe that as anything other than a win for Dodd-Frank."
How Grand Is The Grand Bargain?
President, Speaker try to resurrect "grand bargain." Politico: "...the goal is to combine appropriations cuts, entitlement reforms and tax overhaul in a single endeavor to more than match the $2.4 trillion increase in the debt ceiling needed to get past the 2012 elections. The size of the revenue target is still a sticking point, as is the mechanism to ensure that the needed legislative changes — for tax and entitlement reform—get done before this Congress ends. Boehner and Obama are discussing some sort of trigger mechanism ... Democrats have suggested that if Congress fails to act, taxes will go up on those earning over $250,000. Republicans have countered that if the added taxes take effect, the law would also rip out portions of Obama’s prized healthcare reforms ..."
Deal may include $1 trillion in increased revenue, but not right away, disturbing Dems. USA Today: "Democratic sources close to the negotiations said the potential agreements discussed by the White House and Republicans include up to $3 trillion in spending cuts over 10 years and a tax code rewrite by the end of 2012 that would bring in up to $1 trillion ... Democrats, whose concerns were voiced by Senate Majority Leader Harry Reid of Nevada, were angered by the reports of the nebulous deal that included spending cuts now and revenue increases tied only to a review of the tax code next year."
Senate may pursue its own path to increase debt limit. TPM's Brian Beutler: "If the initial leak was meant to serve as a trial balloon, Senate Majority Leader Harry Reid (D-NV) shot it out of the sky the same day, after a contentious meeting with White House budget director Jack Lew. A Senate leadership aide told me that Reid will set the wheels in motion to pass a backup plan no later than Sunday unless a deal that can pass both chambers is agreed to before then."
GOPers feel scarred from last budget deal. W. Post: "'We got gamed early on when we got here,' said Rep. Mike Kelly (R-Pa.), who voted for that bill. He, like other Republicans, was upset that only $352 million of the cuts would actually come in the current fiscal year. 'You know, it’s ‘"fool me once, shame on you; fool me twice, shame on me."' Boehner’s pool of persuadables is considerably shrunken from the days of the deal that averted the shutdown."
President makes case for "big" budget deal with spending cuts and tax increases, in USA Today oped: "Some of these cuts would eliminate wasteful spending, weapons we don't need, or fraud and abuse in our health care system. Still, some of the cuts would target worthwhile programs that do a lot of good for our country. They're cuts that some people in my own party aren't too happy about, and frankly, I wouldn't make them if we didn't have so much debt .. At the same time, it's also true that if we tackle our deficit with spending cuts alone, it will likely end up costing seniors and middle-class families a great deal. Retired Americans will have to pay a lot more for their health care. Students will have to pay a lot more for college. A worker who gets laid off might not have any temporary help..."
Dean Baker argues that the most accurate inflation index for seniors would, unlike the Gang of Six, increase the cost-of-living adjustments: "...we know that the elderly have different consumption patterns than the population as a whole. They spend a larger share of their income on health care and less on computers and cell phones. BLS research shows that the rate of inflation experienced by the elderly is actually somewhat higher than the standard index used to adjust Social Security benefits. This research implies that if we are interested in an accurate cost of living adjustment, as the Gang of Six claim, then we might have to increase, rather than decrease, the annual adjustment."
Debt limit uncertainly affecting infrastructure projects. NYT: "August is also the peak of the road construction season. In June, the states got $4 billion worth of reimbursements for transportation projects from the federal government, said Jack Basso, the director of program finance and management for the American Association of State Highway and Transportation Officials. Now the association is trying to figure out whether money in the highway trust fund — which comes mostly from the federal gas tax — would be protected if the debt limit were not raised. An interruption in payments would put states in a bind, Mr. Basso said, since they use the money to pay private contractors."
Attack On Unions May Shutdown FAA
FAA faces partial shutdown tonight as GOP insists on weakening union. USA Today: "A partial shutdown looks increasingly likely because Congress hasn't been able to come to an agreement on legislation to extend the FAA's operating authority, which expires at midnight Friday. The main obstacle is a provision sought by House Republicans and the airline industry that would make it more difficult for airline and railroad workers to unionize ... The labor provision would overturn a National Mediation Board rule approved last year that allows airline and railroad employees to form a union by a simple majority of those voting."
House cmte passes bill to gut NLRB: "The legislation would prohibit the NLRB from ordering any employer to close, relocate, or transfer a business under any circumstance. Democrats said the bill would recklessly expose workers to discrimination by removing key NLRB remedies needed to punish bad employers."
Breakfast Sides
New federal guidelines seek to reform the electric grid to better deliver green power. NYT: "The new rule, passed unanimously on Thursday by the Federal Energy Regulatory Commission, does not specify what the formula should be for allocating costs, or precisely how new lines should be planned. But it does lay out general guidelines, including the notion that the costs should be borne by those who benefit. The commission also issued an implicit threat: if grid organizations do not enable the construction of badly needed new transmission lines, federal regulators will do it for them."
State energy budget cuts leaving some without air conditioning during heat wave. AP: "Many states hit hardest by this week's searing heat wave have drastically cut or entirely eliminated programs that help poor people pay their electric bills ... Oklahoma ran out of money in just three days. Illinois cut its program to focus on offering heating money for the winter ahead. And Indiana isn't taking any new applicants."
Conservative welfare reform not working in recession. TNR's Jonathan Cohn: "Conservatives insist that states would use the opportunity to make Medicaid more efficient, thus addressing the same level of need with a lot less government money. As proof, they frequently point to welfare reform, which entailed a similar change. The old Aid to Families with Dependent Children program was an entitlement, with federal contributions rising to match eligibility. Temporary Assistance to Needy Families, AFDC's replacement, is a block grant ... [But] TANF caseloads increased by only 13 percent between December 2007 and December 2009, a time during which the number of unemployed people doubled ... that's a huge gap."
HuffPost's Roger Wolfson remembers Paul Wellstone on his birthday: "For those of us who knew and believed in him -- and there were a lot of us -- his death was life-changing and devastating. Over the years since most of us have only missed him more. I, personally, have not healed at all. And the gaping hole his loss created in our political system, to me, has only widened."
