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: CSI Missouri: Foreclosure Fraud Indictments
OurFuture.org's Richard Eskow: "A Missouri grand jury handed down multiple felony indictments for foreclosure fraud on Monday. That's the same kind of crime being negotiated in nationwide settlement talks with America's big banks. If people can be indicted for doing it, why should bankers be allowed to write a check and walk away?"
Settlement Status Murky
Uncertainty around mortgage settlement. Reuters: "A broad settlement with major banks over mortgage servicing abuses that would bring relief to distressed U.S. homeowners could be announced as early Thursday ... so far [it] lacks the support of a handful of critical states, including California and New York ... New York Attorney General Eric Schneiderman had planned an announcement late Tuesday about the settlement but postponed it 'indefinitely' without explanation ..."
WH still pushing for a settlement. FT: "Aides to President Barack Obama have in recent weeks courted civil rights groups and borrower advocacy organisations, scheduling meetings and calls in an attempt to gain support for the expected settlement and muffle criticism from key political allies."
Foreclosure fraud has cost $72B reports Bloomberg: "The mounting costs are pushing lenders and regulators to resolve investigations and lawsuits over faulty home lending ... The wrangling over the status of old loans has made some banks more reluctant to make new ones, even as Federal Reserve Chairman Ben S. Bernanke appeals for action to increase lending and fix the U.S. housing market because it’s a drag on the economic recovery."
Santorum Punctures Romney Inevitability
Romney hasn't won in the Midwest, notes Time's Alex Altman: "In a single evening, he punctured the aura of inevitability that had gathered around Romney’s campaign in the wake of his victories in Florida and Nevada. Though Santorum still lags far behind Romney in projected delegates, he now leads the front runner in contests won, four to three ... Santorum can now boast of three straight victories in the Midwest, a key region dotted with swing states where Romney has yet to notch an outright victory."
W. Post explores Romney's jobs record as governor, finds it "unremarkable": "Many state policymakers and economists say Romney struggled to apply his business expertise to Massachusetts’s problems during his tenure."
Romney Super PAC quietly reveals secret donor as former Bain exec, reports NYT.
GOP Refusing Simple Deal On Payroll Tax Cut
Payroll tax cut talks stall. NYT: "Democratic negotiators rejected $70 billion worth of spending cuts the House wanted to use to offset the cost of the package, including a one-year pay freeze for federal workers, a measure to raise Medicare premiums on some people and a proposal that would allow the government to claw back some subsidies for the purchase of health insurance under the new health care law ... The Senate majority leader, Harry Reid of Nevada, instead vowed to put forward his own bill ... His new proposal would require those earning over $1 million a year to contribute to the nearly $200 billion cost of extending a payroll tax cut to nearly every working American [and] renewing unemployment benefits into the next year ... "
Economists push GOP to end obstruction of payroll tax cut. ThinkProgress: "Both Federal Reserve Chairman Ben Bernanke and Moody’s Analytics chief economist Mark Zandi testified before Congress today, telling lawmakers that they should extend the payroll tax cut that is set to expire at the end of the year so as not to undermine the fragile economic recovery."
Tax lawyer David Miller exposes loophole benefiting wealthy who hold much stock, in NYT oped: "... how much income tax will [Facebook's Mark] Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax ... If Mr. Zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs ... Our tax system is based on the concept of 'realization.' Individuals are not taxed until they actually sell property and realize their gains. But this system makes less sense for the publicly traded stocks of the superwealthy."
Capital gains tax breaks don't help the middle class. EPI's Andrew Fieldhouse: " In 2011, the top 1 percent of households by cash income received a whopping 75.1 percent of the benefit from the preferential treatment of capital gains and dividends. The broad middle class—defined here as the middle 60 percent of households by cash income—received only 3.9 percent of that benefit. Upper-income households also do well by tax exclusions and itemized deductions, but the share of these tax expenditures accruing to the top 1 percent of households—at 15.9 percent and 26.4 percent, respectively—don’t come close to the windfall afforded by a 15 percent rate on capital income."
Fed To Keep Rates Low
Bernanke to keep rates low. Bloomberg: "Bernanke told the Senate Budget Committee in Washington yesterday that the decline in the jobless rate to 8.3 percent in January veils weaknesses in the U.S. labor market ... The comments suggest Bernanke won’t alter his 2014 rate pledge until he sees faster economic growth, strong employment gains over many months or a risk that what he calls 'subdued' inflation may speed up..."
Fed policies not causing inflation, despite conservative claims. Bloomberg: "More than a year after Republicans from House Speaker John Boehner of Ohio to presidential candidate Ron Paul of Texas warned that the Fed’s second round of asset purchases risked a sharp acceleration in prices, the surge has failed to materialize. The personal-consumption-expenditures price index rose 2.4 percent for the 12 months ending in December, near the central bank’s 2 percent target."
Outsourcing Firm Scandal In Mexico
Mexican outsourcing firm investigated for tax evasion. NYT: "The investigation, which has led to international warrants against the director of the firm and one of the Álvarez Puga brothers, has lifted a veil on the widespread tax evasion in the growing and increasingly powerful outsourcing industry here ... Typically, domestic and multinational companies hire a third party like the Álvarez Puga firm to arrange the payment of payroll, tax and other fiscal liability for workers ... Government auditors said they had identified at least 6,500 outsourcing firms that had failed to pay the taxes of the workers they handled. Beyond that, Alberto Real Benítez, the general administrator of federal fiscal audits in Mexico, said that most companies hiring such firms were aware that taxes were not being paid properly."
Manufacturers questioning the value of outsourcing, reports LAT's Michael Hiltzik: "[Pioneer Magnetics' Jerry] Rosenstein says economic realities have forced him to outsource most of Pioneer's manufacturing. But he describes the process as something of a mixed curse — it saves money overall, but at the expense of manufacturing efficiency and management time ... 'If they have a technical problem, they may not know how to solve it.' And overseas contractors often demand a higher volume of orders than a specialty manufacturer with its eye on quality can provide ... [He argues that] an advanced technical research program for manufacturers ... would be a useful component of a government economic stimulus plan. It would support longer-range technical development of the sort that gets cut back in economic slumps, help manufacturers increase their technical staff, upgrade America's worldwide competitiveness and feed into the hiring of production and support staff later on."
Breakfast Sides
Speaker Boehner risks splitting his party of transportation bill. Politico: "A loss on this bill, his baby, could make Boehner look weak again ... Under the House plan, transit programs would no longer be paid for out of the Highway Trust Fund. Instead, Republican leaders plan to cut government contributions to federal employees’ pensions to pay for transit programs ... That’s a political problem for Republicans from the suburbs of Chicago, New York and Philadelphia ... The bill would [also] slash Amtrak funding and privatize food service on its trains ... [But] Boehner still has to avoid a disaster with his 'no' caucus — folks who are averse to almost everything."
House cmte advances plan to cut pensions of federal employees. Roll Call: "Along party lines, the panel voted 22-16 ...The [Republican] aim is to bring government workers more in line with those in the private sector and push the federal workforce to help reduce the deficit ... Democrats said they had no problem slashing their own pensions. However, they would not do the same to their staffs or employees of government agencies."
Dems respond to GOP Keystone bill with amendment requiring pipeline oil and steel stay in US. Politico: "This has been the argument of the United Steelworkers — who oppose the proposed pipeline over the concern that a lot of their workers would fall victim to outsourcing. The existing Keystone pipeline, for example, uses steel from India ... Republicans say these Democratic provisions are merely poison pills."
OH Gov. Kasich moderating his rhetoric, not his policies, after rebuke from voters over anti-union law, notes American Prospect's Abby Rapoport.
