MORNING MESSAGE: Disarm The GOP Hostage Bomb
OurFuture.org's Dave Johnson: "It is time to defuse the hostage-taking bomb. Do not negotiate with hostage-takers – and that includes shutdown threats ... How long have we been governed through hostage-taking, threats, intimidation and lies? Vietnam, Iraq and the more recent tax fights should make it clear that governing in reaction to hostage-taking, lies, threats and intimidation doesn’t turn out well in the long run. We need to govern through an open, transparent, considered, informed, reasoned, systematic and democratic process ... It is time to just stop it. Do not negotiate with terrorists."
Mint The Coin. Beat The Crazies.
NYT's Krugman says we need the $1T coin to beat the "crazies": "...no, this wouldn’t be an inflationary exercise in printing money. Aside from the fact that printing money isn’t inflationary under current conditions, the Fed could and would offset the Treasury’s cash withdrawals by selling other assets or borrowing more from banks, so that in reality the U.S. government as a whole (which includes the Fed) would continue to engage in normal borrowing. Basically, this would just be an accounting trick, but that’s a good thing. The debt ceiling is a case of accounting nonsense gone malignant; using an accounting trick to negate it is entirely appropriate."
Chances for broader tax reform sink after cliff deal, according to Politico: "The fiscal cliff has deepened distrust between the two parties. The politics have become riskier and more complicated. Time is short. And Washington has to first endure battles over the debt ceiling and scheduled spending cuts before tax reform can come under serious consideration."
Defense Sec. Panetta begins preparing for sequester cuts. CNN: "He has asked services to begin 'prudent' measures, including curtailing maintenance for non-critical activities and delaying hiring. The measures must be 'reversible' and minimize harmful impacts on military readiness, Panetta told reporters at the Pentagon."
House Republicans may still derail Sandy disaster relief bill. Politico: "Republican leadership plans some legislative jujitsu to pass the Sandy bill, and top Republican aides say they are likely to allow amendments that would call for offsets or spending reductions to a package expected to total around $50 billion. Northeastern Republicans and Democrats may be able to beat back those amendments — but if they can’t, that would complicate the bill's hopes for swift passage through the Senate."
WH Floats Gun Violence Prevention Plan
WH gun violence prevention plan may include universal background checks, high-capacity clip bans and funds for police in schools. W. Post: "The school safety initiative, one of several under consideration, would make federal dollars available to schools that want to hire police officers and install surveillance equipment ... The idea is gaining currency among some Democratic lawmakers, who see it as a potential area of common ground with Republicans who otherwise oppose stricter restrictions on firearms ... The vice president said Thursday that he sees an emerging consensus around 'universal background checks' for all gun buyers and a ban on high-capacity ammunition magazines."
NRA is heavily backed by gun manufacturers, not gun owners. HuffPost: "... the deep-pocketed NRA has increasingly relied on the support of another constituency: the $12-billion-a-year gun industry, made up of manufacturers and sellers of firearms, ammunition and related wares. That alliance was sealed in 2005, when Congress, after heavy NRA lobbying, approved a measure that gave gunmakers and gun distributors broad, and unprecedented, immunity from a wave of liability lawsuits related to gun violence in America’s cities."
Foreclosure Settlement Ends Investigation
Foreclosure settlement aborts flawed review. NYT: "To avoid criticism as the review stalled and consultants collected more than $1 billion in fees, the regulators, led by the Office of the Comptroller of the Currency, abandoned the effort after examining a sliver of nearly four million loans in foreclosure, the regulators and consultants said. Because they have no idea how many borrowers were harmed, the regulators are spreading the cash payments over all 3.8 million borrowers — whether there was evidence of harm or not. As a result, many victims of foreclosure abuses like bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions will most likely get less money."
New CFPB mortgage rules will be phased in, leaving some worrying about loopholes. NYT: "[Qualified mortgage] loans, which are expected to be the most common, will have to meet the affordability standards that apply to all mortgages. They will also be subject to a significant additional condition: Borrowers’ combined debt payments cannot exceed 43 percent of income. But the phase-in period will effectively allow banks to make qualified loans with higher debt burdens for up to seven years if the loans conform to standards set by government mortgage entities like Fannie Mae or the Federal Housing Administration. Such entities have reasonably high standards, but it is a loophole that banks could exploit."
Breakfast Sides
New food safety law kicks into gear, FDA tries to prevent salmonella. NYT: "Two large egg producers have received warning letters from the Food and Drug Administration, which said they violated a two-year-old rule aimed at preventing salmonella contamination. During inspections conducted last summer, the F.D.A. found failures to prevent pests and wildlife from entering barns housing laying hens ... The letters offer a window into the way new regulations the agency proposed last week to enhance food safety might work. The proposed regulations, like the rule cited in the letters, aim to prevent food from being tainted rather than addressing contamination after it has occurred."
LA Gov. Bobby Jindal proposing abolishing state income tax. Reuters: "'Our goal is to eliminate all personal income tax and all corporate income tax in a revenue neutral manner,' Jindal said in the statement. He did not confirm reports that he will seek an increase in sales taxes in order to offset lost income tax revenue, but said: 'We want to keep the sales tax as low and flat as possible.'"
Trade deficit widened in November. Bloomberg: "The gap jumped 15.8 percent to $48.7 billion, exceeding all estimates in a Bloomberg survey of economists and the biggest since April, from $42.1 billion in October..."
