MORNING MESSAGE: Two New Fraud Deals
OurFuture.org's Richard Eskow: "It must’ve been like old home week when the old gang of Wall Street and Washington insiders finalized a couple more cushy settlements last week. Everybody knew the drill: Ignore the potential criminal charges and agree on settlement figures they think the public will swallow – figures that are big enough to sound impressive but far smaller than the banks’ ill-gotten gains. They’ve done this dozens of times before ... Bank of America’s agreed-upon payment to Fannie Mae sounds big – $3.6 billion. But that comes to exactly one percent of the outstanding debt on those loans ..."
Banks Hope To Put Foreclosure Scandal Behind Them
Federal regulators forge two major foreclosure abuse settlements. LAT: "Bankers saw the settlements as a major step in providing more certainty for their balance sheets and possibly foreshadowing an end to the era of billion-dollar mea culpas and open-ended regulatory probes ... SNL Financial analyst Nancy Bush, arguing that it's time to concentrate on rebuilding the dysfunctional U.S. mortgage system. 'The bankers are going to have to stop complaining about the government, and we'll have to stop this endless calling for someone to go to jail.' Housing advocates welcomed payouts for homeowners but asserted that the banks and bankers have gotten off easy, given the enormity of the economic damage to Main Street. 'When you think about $8.5 billion, and you know trillions of dollars in wealth have been lost by communities, it's not enough at all,' said Sasha Werblin of the Greenlining Institute."
McClatchy on what affected homeowners will get: "Almost 4 million homeowners might receive cash compensation and mortgage relief in a multi-billion-dollar settlement with 10 major banks ... Eligible homeowners may receive payments that range from hundreds of dollars to $125,000, depending on the type of error ..."
"Foreclosure Review In New Settlement Leaves Homeowners In Banks' Hands" reports HuffPost: "The regulators, essentially admitting that the reviews were too difficult to conduct, and that assigning appropriate compensation to those most harmed by the banks was no longer a priority, said the mortgage companies themselves will determine how to distribute $3.3 billion to more than 4 million homeowners forced into foreclosure in 2009 or 2010. Housing advocates, while acknowledging that the foreclosure reviews were flawed, said they don't understand how turning the process over to mortgage companies improves a system already insufficiently independent."
"We Don't Have a Spending Problem"
American Prospect's Jamelle Bouie on the real problem: "Even with the Affordable Care Act and other new programs passed under this administration, spending is on track to reach the modest levels of the Clinton era by the end of Obama’s presidency. As for revenue, a combination of tax cuts and recessions have plunged federal income receipts to their lowest levels in 30 years."
Ratio of spending cuts to tax increases so far already skewed towards spending cuts. ThinkProgress: "...even with the revenue included in the fiscal cliff deal, there have been $2.50 in spending cuts for every $1 in revenue signed into law by President Obama. That ratio increases to 3 to 1 when reduced interest payments on the debt are included. As Bob Greenstein of the Center on Budget and Policy Priorities noted, following the GOP’s all-cuts plan going forward would blow that ratio up to 5 to 1..."
"Dem lawmakers say courts should resolve debt-limit standoff" reports The Hill: "Democratic lawmakers are urging President Obama to force Republicans to take him to court over the controversial issue of raising the debt ceiling. They believe the Supreme Court will have to ultimately resolve the battle over spending now raging between Republicans and the president. But how the courts will rule is shrouded in uncertainty because little case law exists to serve as meaningful precedent, say legal scholars."
Health Care Spending Slows
Health care spending slows, but at a cost. Bloomberg: "Health-care spending in the U.S. grew at less than half the pre-recession level for the third straight year, as employers shifted more costs to strapped workers and state governments limited payouts for the poor ... So far, the effect of the 2010 Affordable Care Act on medical spending has been 'minimal,' according to the report. That may change next year, when much of the insurance expansion created by the health-care system overhaul begins to take effect."
Idaho won't expand Medicaid under ObamaCare. HuffPost: "[Gov. Butch] Otter is the 10th Republican governor to reject extending Medicaid health coverage to more poor residents. The governor's decision contradicted a unanimous recommendation from a commission appointed by Otter that the state take advantage of the available federal funding to broaden Medicaid."
