MORNING MESSAGE: Outsourcing Is Out. Insourcing Is In.
OurFuture.org's Scott Paul: "President Obama, to his great credit, gathered about a dozen businesses and many more experts at the White House to strategize on how to bring manufacturing jobs back to America. Here are five things the President should highlight in the State of the Union address to ensure that the significant trickle of reshored jobs becomes a genuine trend. 1. Adopt insourcing tax incentives ... 2. Work to balance our trade account by continuing aggressive trade enforcement ... 3. Invest in infrastructure ... 4. Apply Buy America laws ... 5. Invest in our workers to ensure we have skilled human capital on the factory floor ..."
Romney/Bain Doc Released
"When Mitt Romney Came To Town" documentary released by "Winning Our Future" Super PAC.
W. Post explores Bain's philosophy of "creative destruction": "...like Romney’s work on all the businesses Bain invested in, the primary goal with these companies wasn’t job creation but making them more profitable and valuable. This meant embracing aspects of capitalism that have unsettled some Americans: laying off workers when necessary, expanding overseas to chase profits and paying top executives significantly more than employees on lower rungs ... 'I’ve got a lot of admiration for Bain Capital, but jobs were the byproduct of the mission, not the product,' said Howard Anderson, a senior lecturer at MIT’s Sloan School of Management. 'The product was to increase wealth, and in some cases it meant expanding the company. In some cases it meant contracting the company.'"
Warren Buffet takes swipe at Romney's record at Bain, Time magazine interview: "When I ask whether Mitt Romney is a job creator or destroyer, Buffett says that while businesses shouldn’t keep people they don’t need, 'I don’t like what private-equity firms do in terms of taking out every dime they can and leveraging [companies] up so that they really aren’t equipped, in some cases, for the future.'"
What Romney did at Bain is in a "black box" says Politico: "...the definitive and comprehensive answers to these questions have proven elusive to even the country’s best journalists because of the very private nature of private equity. The greatest privacy-destroying force known to man — an American presidential campaign — is going head-to-head with one of the most secretive redoubts of the American economy and for now, the door of Bain’s vault is holding."
Romney team struggling to respond. TNR's William Galston: "His initial response—claiming that an attack on private equity firms is an attack on capitalism—may get him through the Republican nominating contest, but it won’t serve him very well in the general election. Most citizens make an intuitive distinction between business activities that add value to workers and the economy (running an auto company, for example, as Romney’s father did) and those that shuffle paper to the advantage only of the shufflers ... His campaign is wrestling with (some reports suggest divided over) how best to respond. There’s an understandable reluctance to open up to public scrutiny the nearly one hundred deals in which he participated as the head of Bain Capital. But there’s really no choice."
Republicans unexpectedly start a national debate about capitalism, notes W. Post's E. J. Dionne: "Romney’s victory speech suggested that he hopes that the campaign will be about whether President Obama wants to turn the United States into Europe. A more relevant discussion would be over what American capitalism is — and should be. Thanks to Gingrich and Perry, this debate is now unavoidable."
President Proposing Insourcing Tax Incentive
President proposes tax plan to maximize insourcing. NYT: "President Obama said on Wednesday that he would propose tax incentives for companies to bring home manufacturing jobs they had moved overseas, and curtail tax breaks for those that keep relocating jobs abroad ... Economists said small changes in tax policy would play only a marginal role in deciding where companies build factories. But with labor costs rising overseas, such changes could help reinforce a fledgling trend, they said."
W. Post adds: "The announcement offers a clue about the president’s agenda for the State of the Union address on Jan. 24 and his reelection campaign."
Republicans Renew Fight To Cut Jobless Aid
Republicans trying to restrict access by unemployed to unemployment insurance in next extension battle. TNR's Jonathan Cohn: "The Republicans say they [want an extension in February] but only if the Democrats agree to changes in the program – among them, letting states deny benefits to workers who don't have high school degrees or the equivalent or are enrolled in classes to get one ... nearly half of all workers without a high school degree are older than 45 and more than a third are older than 50. It’s not clear that a high school degree will do these workers much good and, more to the point, it’s unlikely many of them could even get one. Waiting lists for high school equivalency programs are widespread ..."
Republican presidential candidate propose cuts to social safety net. HuffPost's Zach Carter: "...Republican Presidential contenders Mitt Romney, Rick Santorum and Newt Gingrich have all invoked the 1996 welfare reform project as a model for responsibly cutting federal spending on social safety-net programs like food stamps and health care. But while welfare reform did succeed in slashing the number of poor citizens receiving government assistance, it has not reduced the need for aid. American poverty today is deeper and more widespread than in 1996, and the government offers less relief."
Tax collection hampered by budget cuts. NYT: "The agency’s staff reductions and backlog have limited its ability to collect the hundreds of billions of dollars a year that the government is owed but not paid, Nina E. Olson, the national taxpayer advocate, said in her annual report to Congress."
President prepping 2013 budget. Bloomberg: "The president will offer a plan for deficit reduction along the lines of the $4 trillion proposal that he outlined last September. Two administration officials confirmed the plan on condition of anonymity because they weren’t authorized to discuss it before it’s announced. The previous plan called for $1.5 trillion in tax increases over the next decade, including the expiration of Bush-era tax cuts for families earning $250,000 or more a year. It also would make changes in mandatory spending programs, cutting Medicare and Medicaid and farm subsidies, selling government assets and reducing federal worker benefits."
Fed divided over need for further easing. Bloomberg: "Chicago Fed President Charles Evans in a speech yesterday said economic growth is modest and called for 'substantial' accommodation. During the past week, New York Fed President William Dudley, Boston’s Eric Rosengren and San Francisco’s John Williams have also backed consideration of a third round of bond buying ... Philadelphia Fed President Charles Plosser said yesterday that policy makers should watch 'very carefully' for the risks of accelerating inflation, and Kansas City’s Esther George said Jan. 10 that too much accommodation can raise the odds of financial instability. Richmond’s Jeffrey Lacker said he is 'nervous' about the Fed’s independence because of its forays into fiscal policy."
Recess Appointment Push To Fix Housing
House Dems push Obama to recess appoint housing regulator. The Hill: "...more than two dozen House members said the temporary head of the Federal Housing Finance Agency (FHFA), Edward DeMarco, simply hasn't done enough to help struggling homeowners avoid foreclosure. The lawmakers are pushing the president to name a permanent director 'immediately.'"
Senate GOP attacks Fed plan to cut mortgage payments. ThinkProgress' Pat Garofalo: "Reducing principal is one of the most effective ways to keep troubled borrowers — many of whom are underwater or behind on their mortgage payments through no fault of their own — out of foreclosure, and it would also boost the economy ... The Senate GOP, instead, derides the idea, after filibustering an Obama administration nominee because he may have been sympathetic towards principal reductions."
Corporations Push Pipeline
Corporate groups to launch campaign to approve Keystone pipeline. The Hill: "U.S. Chamber of Commerce President Tom Donohue plans to highlight the pipeline in his closely watched annual speech Thursday on the state of American business ... Separately, Business Roundtable President John Engler, a former GOP governor of Michigan, will hold a news conference Thursday touting what advocates call the jobs and energy security benefits of the project ... the powerful American Petroleum Institute has launched an ad campaign in favor of the project, and API President Jack Gerard last week issued a blunt warning to Obama: Approve the pipeline or face 'huge political consequences.'"
EPA has Google mapped the nation's greenhouse gas emissions. NYT: "Gina McCarthy, head of the E.P.A.’s office of air and radiation, said she hoped that making the information widely available would eventually lead to pressure for emissions cuts ... The administration is preparing regulations to limit carbon dioxide emissions from new power plants, but Ms. McCarthy would not say when they would be released ... The data shows that power plants are responsible for 72.3 percent of reported emissions and that the three largest single sources — two generating stations in Georgia and one in Alabama — are owned by the Southern Company, based in Atlanta." Click here for the map.
