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: Republicans Say, Tax The Poor, Not The 1%
OurFuture.org's Robert Borosage: "Texas Gov. Rick Perry this week will try to revive his flagging presidential campaign by embracing an old conservative fancy — the flat tax ... it puts Perry at the head of what has become a bizarre GOP fixation — the need to tax the poor. Taxing the poor has become a badge of honor among conservatives ... Working poor people do pay taxes. They pay a larger portion of their incomes in payroll taxes and sales taxes than the wealthy. And they pay property taxes indirectly in their rental costs. Poor workers pay about one-eighth of their incomes in taxes, on average ... Taxing the working poor is, at best, an ineffective distraction from the fundamental challenge the country faces. Our problem isn’t that working people get too much from government and pay too little — it’s that income inequalities have now reached extremes destructive to both our economy and our democracy."
Perry Falls Flat
Presidential candidate Rick Perry proposes right-wing trifecta -- flat tax, spending cap, Social Security privatization. CBS: "Rick Perry unveiled a sweeping economic agenda Monday highlighted by a plan to level a voluntary 20 percent 'flat tax' on all taxpayers ... [He also] calls for capping federal spending at 18 percent of the country's GDP while allowing younger earners to privatize their Social Security accounts."
Perry plan also cuts corporate tax to 20%, and abolishes estate tax on multimillionaire heirs, per his WSJ oped.
Perry says "I don't care" if flat tax gives wealthy a massive tax cut. NYT: "In an interview with The New York Times and CNBC on Monday, Mr. Perry dismissed a suggestion that his plan could give hundreds of thousands or millions of dollars in tax cuts to wealthy Americans. 'I don’t care about that,' he said. 'What I care about is them having the dollars to invest in their companies...'"
Bloomberg edit board rips flat tax: "People want their taxes simpler, fairer and lower. A flat tax promises all three and would deliver on none."
Newt Gingrich and Herman Cain will debate who offers the most fiscal austerity. WSJ: "...Cain and Gingrich have accepted an invitation offered by the Texas Tea Party Patriots to stage a wide-ranging debate on fiscal austerity ... the debate will be broken into a discussion over how to tame the three major entitlement programs – Medicare, Medicaid and Social Security."
Obama Puts In Place New Refi Plan
President Obama issues new rules on mortgage refinancing to address housing crisis. NYT: "The changes, which will take effect over several months, will let people qualify for new loans no matter how far the values of their homes have fallen, so long as they have made at least six consecutive monthly payments. The plan also will reduce borrowers’ fees, for example, by dispensing with the need for an appraisal in many cases ... But the program still applies only to loans that Fannie and Freddie acquired before May 31, 2009. It does not reduce the amount that borrowers owe. And only borrowers with less than 20 percent equity in their homes are eligible..."
W. Post adds: "Housing regulators say that 1 million borrowers might be eligible, but that is only one-tenth of the number of homeowners who need help. And while estimates cited by the administration suggest the average homeowner might save $2,500 per year, other projections from housing regulators were in the range of $312 per year, depending on upfront fees the borrower pays, which may include several thousand dollars in closing costs ... The administration has resisted more aggressive approaches, such as using a large amount of taxpayer money to reduce debts."
ProPublica reports refi plan goes "beyond what analysts were expecting": "The revamped program offers the banks a major incentive: If they grant a homeowner a new loan, they will no longer be on the hook to buy back the previous loan, even if it was not properly underwritten. That removes a large potential risk to the banks ... FHFA argued that it waived its right to force repurchase of the loans because nearly all the loans eligible for the new program seem to be good ones..."
Calculated Risk calls it real "stimulus": "This doesn't solve all of the housing problems. But the refinance programs provide a stimulus to a number of borrowers and lowers the probability of default."
Reuters' Felix Salmon calls it "pathetic": "... the FHFA is projecting that the pace of HARP refinancings won’t increase at all as a result of this plan ... you’re never going to make a dent in the mountain of 11 million underwater mortgages at that rate ... the sad fact is that anything more substantive than this is likely to require Congressional approval, and therefore be a political non-starter between now and November 2012."
Krugman sees reason to hope: "... Joe Gagnon, someone I take very seriously .. thinks that this could be huge, especially if combined with a Fed program of buying mortgage-backed securities. He’s talking maybe 4 million jobs! This is not an endorsement of his analysis, just saying that this really needs looking at."
Wall Street Turns Up Heat On Super Committee
Wall St. starts to put public pressure on the Super Cmte. The Hill: "Failure to strike a deal could rattle confidence in Washington and depress stock prices well into 2012, analysts say .... Bank of America Merrill Lynch said it 'expects' a downgrade by one of the three credit agencies 'when the supercommittee crashes.' ... Deutsche Bank said the supercommittee report is 'perhaps' the most important issue facing the markets. 'The fiscal calendar is likely to be a source of considerable volatility,' the report warned."
Republican governors push Super Cmte to cut Medicaid. Politico: "The Republican governors’ Medicaid proposal resembles House Budget Committee Chairman Paul Ryan’s vision for a a program that gives states less money and more flexibility in administering the joint federal-state health insurance program for the poor and disabled ... Turning Medicaid into a block-grant program is a non-starter for most Democrats."
Transportation Jobs Bill Remains Stuck
Finding new revenue for transportation bill remain major obstacle. Politico: "The federal gas and diesel taxes that support the fund have not been raised in nearly two decades; the tax has lost about one-third of its purchasing power in that time ...
The Financing Commission [appointed by Congress] recommended a number of solutions, but the most talked-about was an eventual shift to a [mileage] tax to measure and charge for road use ... House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) said the odds of it being approved are the same as a gas tax increase — slim to none."
Projects for bikeable, walkable cities may lose big in transportation bill. W. Post: "Like many of the issues that get marquee attention in the partisan warfare in Congress, its symbolism outweighs the actual expense ... about 2 percent of the total $40.2 billion highway budget ... 'This program has been the lifeblood of the nation’s trails, biking and walking programs,' said Kevin Mills, vice president of the Rails-to-Trails Conservancy. 'It’s wildly popular across the country.' ... [Yet] House Transportation Committee Chairman John L. Mica (R-Fla.) said it won’t be included in the long-term funding bill he expects to produce this fall. And [GOP Sen. Tom] Coburn said he has received assurances on the Senate side that the spending will be made optional rather than mandatory."
No Need For Occupy To Create Demands, We Already Have Them
OurFuture.org's Eric Lotke argues Occupy doesn't need to me demands, we already have them: "One complaint issued against the protestors is the lack of a plan. This complaint is unfair: we know what they want, even without the policy details. Regulate Wall Street, rebuild the infrastructure, spend war money at home, tax the top end, create jobs, etc. Well, I don’t speak for the Occupiers. I’m just a body in the crowd. But I’m happy to report on a newly published book that should help anybody who wants more of a plan. See Innovation created the book, Dream of a Nation. It collects ideas by leading thinkers and presents them in graphically interesting, full color essays complete with anecdotes, statistics and everything else a movement needs to put ideas to work ... We don’t need more policy papers! Universities, think tanks and even the halls of Congress are filled with ideas. We know how to do this."
Occupy protests actually against redistributing wealth, Dean Baker explains to David Brooks: "David Brooks told readers that the Occupy Wall Street movement it out of step with the country because it favors redistribution while most of the country opposes it. It is not clear what Brooks thinks he means by this. The country has been seeing enormous redistribution over the last three decades, but it has all been in an upward direction. For example, the government gave trillions of dollars of below market interest rate loans to the largest banks to save them from collapse. The big banks continue to benefit from a too big to fail subsidy ... It would not be surprising if most of the country is against this sort of redistribution since 99 percent (or thereabout) are losers from these government interventions."
Poverty hits the suburbs. NYT: "The increase in the suburbs was 53 percent, compared with 26 percent in cities ... suburban municipalities — once concerned with policing, putting out fires and repairing roads — are confronting a new set of issues, namely how to help poor residents without the array of social programs that cities have, and how to get those residents to services without public transportation ..."
Oil drilling battles fiercely playing out at the local level. NYT: "Drillers are going into some areas that were once, in rosier times, earmarked for housing or other uses, and elsewhere companies are creating jobs and taxes in communities that have been gasping for air, and ways to make ends meet ... in many places where housing construction in boom times led to congestion, traffic and air quality concerns, the debate over oil is tangled with questions over what the land should be."
