Grand Bargain Looks Dead
Bipartisan deficit talks collapse after Republicans balk on taxes. NYT: "The meeting between senior White House aides, including Denis McDonough, the chief of staff, and eight senators ended with no date set for the next meeting and blunt talk of failure ... Over the past weeks, the Senate group ... had moved away from the kind of 'grand bargain' Mr. Obama had sought, which would combine higher tax revenues and changes to social programs like Medicare to produce trillions of dollars in deficit reduction. Instead, they aimed simply to replace the automatic across-the-board cuts known as the sequester over the next eight years with other budget changes ... but the White House’s insistence that tax revenues be included and Republicans’ refusal left the talks at an impasse."
WH refuses to accept Chained CPI without tax increases. Politico: "Republicans pushed for several cuts to mandatory spending programs that had been proposed in the White House’s budget, including benefit cuts to Social Security known as 'chained CPI.' But even on that issue, there was no common ground, with the White House appearing to toughen its tone over demands for higher tax revenues in order to maintain the same level of deficit savings, sources say. The White House will entertain such entitlement cuts under a much bigger grand bargain deal that includes higher taxes."
House conservatives try to force Boehner's hand on shutdown. Politico: "House Speaker John Boehner (R-Ohio) has given little indication that he’s going to give conservatives what they want, specifically a continuing resolution that would defund Obamacare. But conservatives think if he doesn’t, it could be a first shot in a renewed battle within the party ... These conservatives point to the January meeting of the House GOP Conference in Williamsburg, Va., where they say peace was struck. Leadership would hold strong on the sequester, uphold the so-called Hastert rule and keep all spending bills under the budget that Rep. Paul Ryan (R-Wis.) would put together. In exchange, conservatives would help pass appropriations bills ... But that doesn’t mean that deal would hold if a CR doesn’t include their requirements."
What crisis? Medicare spending down 3% since 2007 notes The Incidental Economist.
Nationwide Strikes Slam Fast-Food Industry
1000 fast-food strikes across the country. McClatchy: "Fast-food workers in an estimated 60 cities protested outside 1,000 stores, turning out at the crack of dawn to call for union representation and a wage of $15 an hour ... This is good news for the SEIU and other labor groups, which have faced years of declining membership. Unions are finding that fast-food workers are all too happy to protest, figuring that their jobs are bad enough that if they lose them from protesting, they haven't lost much."
Strikes could rejuvenate the union movement. NYT: "Jake Rosenfeld, a sociology professor and labor expert at the University of Washington, said the strikes could elevate the union movement’s standing among younger workers who have grown up in an era when unions have steadily lost membership and power ... But even with the attention the strikes have drawn, the big question remains whether the walkouts can achieve any traction on the main demand — the wage increase to $15 an hour in an industry in which many of the 2.3 million fast food workers earn the federal minimum of $7.25 an hour ... Mary Kay Henry, president of the Service Employees International Union, said the expansion of the strikes was helping to persuade government officials and community groups that the demand was not unrealistic."
The CEOs can afford it, notes NYT's Teresa Tritch: "The chief executives of McDonald’s and Yum are among the nation’s highest paid bosses. Wendy’s profits have been soaring lately. The corporations invariably say that individual franchisees set wages and franchisees say they can’t afford to pay more without raising prices, which they say would drive away customers and lead to job loss. But wages aren’t the franchisees’ only cost. They also pay rent and royalties to their corporate bosses. How about lowering those costs to create room for raises?"
Breakfast Sides
Obama follows through on climate plan with new energy efficiency regs. The Hill: "The Obama administration proposed a pair of energy efficiency regulations Thursday for certain appliances it says will slash energy bills and carbon emissions. The rules ... would affect commercial refrigeration equipment such as 'restaurant-size fridges' and walk-in coolers and freezers ... the two rules floated Thursday would shave energy spending by $28 billion and curtail carbon pollution by 350 million metric tons through the next 30 years..."
Banks make record profits. ThinkProgress: "Banks marked another record profit period in the second quarter, clearing $42.2 billionafter expenses in the three months from April to June. The figure is the latest confirmation that the financial industry has bounced back far faster than the rest of the economy. The profit report also underscores the intense concentration of the banking business. More than $4 out of every $5 went to the very largest banks even though they account for less than 2 percent of companies in the industry."
