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: Prosperity Economics v. Austerity Economics
OurFuture.org's Isaiah J. Poole: "Prosperity Economics, which Jacob Hacker co-wrote with Nathaniel Loewentheil, is intended to pierce the myths and to make clear that there is an alternative view of how we should rebuild the economy from the bottom up … The report calls for 'immediate action to jump-start our sagging economy' by spending on infrastructure, schools and the other underpinnings of the economy that have been allowed to decay through years of disinvestment at both the federal and state levels."
Romney To Middle Class: Higher Taxes For You, Not For Me
Romney tax plan: cut taxes for wealthy, raise taxes for middle class. W. Post: "His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits — as Romney has pledged — the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care — all breaks that benefit the middle class."
Sen. Maj. Leader Harry Reid suggests Romney didn't pay any taxes for 10 years. HuffPost: "A month or so ago, he said, a person who had invested with Bain Capital called his office. 'Harry, he didn't pay any taxes for 10 years,' Reid recounted the person as saying. 'He didn't pay taxes for 10 years! Now, do I know that that's true? Well, I'm not certain,' said Reid. 'But obviously he can't release those tax returns. How would it look?'
DeMarco to Homeowners: Drop Dead
FHFA rejects Obama proposal for mortgage principal reductions to struggling homeowners. Reuters: The regulator for government-run housing finance giants Fannie Mae and Freddie Mac said on Tuesday that using taxpayer-funded bank bailout money could encourage defaults and not make a big improvement in reducing foreclosures in a cost-effective way for taxpayers. 'The anticipated benefits do not outweigh the costs and risks,' said the Federal Housing Finance Agency's head Edward DeMarco, who has come under intense pressure from the government to agree to the plan."
"Geithner Vows To Press For Writedowns" reports Bloomberg: "'I urge you to reconsider this decision,' Geithner wrote to FHFA Acting Director Edward J. DeMarco … Geithner yesterday offered technical assistance should DeMarco change his mind. 'Treasury stands ready to provide any additional analytical support to make a targeted principal reduction program at the GSEs successful,' he wrote to DeMarco."
DeMarco's reasoning doesn't hold up, says Reuters' Felix Salmon: "…'although principal forgiveness may provide some financial benefit to Fannie Mae and Freddie Mac,' he writes, 'it presents operational challenges for them and their servicers as well as a risk of loss to the taxpayer'. It’s not his job to worry about costs to Treasury or taxpayers generally — but he’s making it his job … But the main thrust of DeMarco’s argument is less financial than it is moral … DeMarco hates the very idea of strategic default. And even if there’s no strategic default at all — and the letter from Geithner makes a very strong case that strategic defaults as a result of this plan would be de minimis — DeMarco still hates principal reductions on, well, principle…"
"Fire DeMarco" says Krugman: "…the paper he cited in support of his stance took no account of the positive effects on the economy of debt relief — even though those effects are the main reason for offering such relief … even if there’s a small net cost to taxpayers, debt relief is still worth doing if it yields large economic benefits …"
No Shutdown, No Food Stamp Cut
No government shutdown before Election Day. The Hill: "Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) on Tuesday announced an agreement … The continuing resolution (CR) will extend government funding for six months after it runs out Oct. 1. The length allows Congress to spend the lame-duck session concentrating on the Bush-era tax rates, which expire at the end of the year, and how to deal with the $55 billion in defense cuts set to go into effect on Jan. 2."
House GOP shelves farm bill after failing to agree how much to cut food stamps. USA Today: "… instead [Republicans] will press for immediate help for drought-stricken livestock producers … Republicans plan to bring the measure to the floor under expedited procedures that require a two-thirds vote for passage. But top [Ag cmte Dem Rep. Colin] Peterson, who's support is crucial, said he's undecided whether he'll vote for the measure and was not pleased at cuts to conservation programs."
Breakfast Sides
"ObamaCare" holding premiums down. USA Today: "As the last of $1 billion worth of this year's health insurance rebate checks goes out to consumers this week, insurers and government officials say the new regulation may be keeping premiums lower for everyone … avoiding the 'medical loss ratio' means new programs that concentrate on paying for effective care, rather than by the number of tests or procedures a patient receives."
The private sector is not what's weak. Krugman: "The Wall Street Journal — yes, the WSJ — explains: Government Cutbacks Separate This Expansion From Others. Over at Angry Bear, Spencer shows that private GDP — GDP not including government spending — has risen almost exactly as fast under Obama as during the 'Bush Boom'; of course, if government spending hadn’t been falling despite a weak economy, there would have been more jobs, and private spending would have risen faster."
Money-market funds heavily lobbying to weaken Dodd-Frank. Bloomberg: "Money-market fund companies have doubled lobbying efforts to convince regulators and lawmakers that they aren’t a threat to the financial system. The money may have been well-spent … [SEC Chair Mary] Schapiro can count on only one supporting vote from the other four commissioners, even as Federal Reserve officials have said that failure to enact tougher rules will leave the $2.5 trillion industry vulnerable to investor runs and threaten global credit markets."
