Nearly 600,000 Jobs Lost in January
ALERT: AM Labor Dept. reports massive job loss: “Nonfarm payroll employment fell sharply in January (-598,000 [jobs]) and the unemployment rate rose from 7.2 to 7.6 percent…”
Cuts In Education, Energy, Transit, Health, Aid to State Govts Eyed by Moderates
After GOP tax cut proposals increased the size of the Senate economic recovery bill by more than $100B, a bipartisan group of Senate moderates delayed a final vote yesterday as they struggled to agree on how to cut $50B-$100B in investment from the bill.
Guess what? There ain’t that much pork.
NYT: “By early evening, aides said the group had drafted a list of nearly $90 billion in cuts, including $40 billion in aid for states, more than $14 billion for various education programs, $4.1 billion to make federal buildings energy efficient and $1.5 billion for broadband Internet service in rural areas. But they remained short of a deal, and talks were expected to resume Friday morning.”
ACTION ALERT from The Seminal’s Jason Rosenbaum: “Take a moment to call your Senators. Ask them to hold the line on these provisions, which are needed to keep vital state programs like Head Start, not to mention COBRA, Medicaid, and Medicare operational. These programs directly benefit those with low incomes or those families who’ve recently lost their jobs. It’s economic recovery that goes straight to the people, and it’s money that should be approved.”
Conservative Dem Sen. Ben Nelson got a bug about education funding. From TIME: “The biggest sticking point for the moderate gang has been about whether or not the federal government should be granting states aid for education. ‘As a former governor I didn’t like it when [the federal government meddled with education] because they never funded it completely,’ Nelson said. “I’m prepared to make some adjustment in my attitude toward that if we can be sure that whatever we do on the federal level is temporary.”
Stateline on states in crisis: “As state public health programs reach a crisis point — with surging demand and shrinking state budgets — officials say that only a federal bailout will prevent more and deeper cuts to the state-provided medical care relied on by the lowest-income Americans. ‘States are under tremendous stress, and they really need to get the stimulus package passed quickly,’ said Ann Kohler, director of the National Association of State Medicaid Directors…”
EPI: Don’t strip health provisions from stimulus
NYT’s Paul Krugman: “Even if a major stimulus bill does pass the Senate, there’s a
real risk that important parts of the original plan, especially aid to state and local governments, will have been emasculated. Somehow, Washington has lost any sense of what’s at stake — of the reality that we may well be falling into an economic abyss, and that if we do, it will be very hard to get out again.”
TPMDC goes deeper into possible cuts in health, state law enforcement, transit and education.
Grist’s Kate Sheppard reviews possible cuts in clean energy and transit
OurFuture.org’s Bernie Horn: “Right now, conservative U.S. Senators — both Republicans and Democrats — are thrashing around trying to cut pieces out of President Obama’s economic recovery plan. They say it costs too much. Ironically, these are the same Senators who increased the legislation by more than $100 billion just a couple of days ago. They just don’t get it. ”
Oxdown Gazette’s Scarecrow: “Do Sens. Collins, Nelson et al Want to Fire Teachers?
“Those who are talking about cutting massive amounts of money out of this bill are also cutting massive amounts of jobs,” he told reporters, warning that spending too little now could mean spending much more later.
“If we’re going to toss a teacup of water on this fire today, we’ll be back with firetrucks in months to come,” said Durbin, who vowed to support “compromise that’s reasonable and that brings in votes too pass the package.”
Politico on the mythical middle: “Central to the drama is a bipartisan bloc of 12 to 18 senators including [GOP Sen. Susan] Collins who hold the balance of power and are struggling among themselves over how best to scale back the $924 billion package. Cuts between $90 billion and $108 billion have been discussed, but the negotiations have become more difficult as individuals have sought to not just scale back spending but also redirect money with the package. Collins herself favors some formulation that adds more money for infrastructure spending, such as clean water and transportation projects. But the risk is that the offsetting cuts become too much to sustain, and the leadership is preparing to step in with its own smaller package of targeted cuts in the range of $50 billion.”
Maybe cuts somewhat offset with more infrastructure investment? Time: “From that list they selected about $100 billion in programs, mostly in education, state aid and science that, while perhaps worthy, they don’t believe belong in the stimulus bill. At the same time, the coalition has also agreed to add another $30 billion in infrastructure spending that the group does see as stimulative.”
CQ reports either a final vote will come today, or Sen. Maj. Leader Reid will file a motion setting up a cloture vote to end debate on Sunday.
President Obama Rips “Talking Points,” “Cable Chatter” and “Phony Arguments”
President Obama gives a tour de force at the House Democratic retreat. Full C-Span video here. MSNBC highlights below.
“Don’t come to table with the same tired arguments and worn ideas that helped create this crisis”
“Then you get the argument, this isn’t a stimulus bill, this is a spending bill. What do you think a stimulus is? That’s the whole point.”.
AmericaBlog’s Joe Sudbay: “The Republicans thought this was all fun and games. Well, now they may be back in the ring with the Barack Obama who whipped their butts in November. I hope so.”
OpenLeft’s David Sirota: “He’s on his game – and he’s finally thrown the Church of Broderism overboard. It’s pretty badass.”
Digby: “I noticed in passing that David Gergen is nearly in tears that Obama has betrayed the promise of bipartisanship tonight. He’s heartbroken that Obama decided that it was more important to save the economy than kiss GOP hems and bow and scrape before the villagers.”
MyDD’s Todd Beeton: “You’ll recall both during the primary and the general, Obama always performed better when he was down. He thrives in times of adversity. Well, the Republicans certainly have provided a big dose of that. Welcome back, Mr. President.”
TPM: “Exactly the case he needs to be making on TV and in some events around the country.”
On NBC’s Today this morning, Newt Gingrich has the audacity to accuse the President of not being bipartisan enough.
Weekly Standard’s Matthew Continetti paints Obama as “angry”: “Obama lambasted Republican critics of the stimulus and heaped scorn on the Bush administration for piling up the national debt. He said the stimulus bill could end the ‘tyranny of oil,’ whatever that means … A tell-tale sign in politics is when people get angry. It means they are losing the argument. Obama is angry. And he has only himself to blame.”
National Review’s Byron York: “His answer: if it’s spending, it’s stimulus. And if it’s full of earmarks, well, stuff happens.”
House Conservative Explains Obstructionist Strategy: “Insurgency, we understand perhaps a little bit more because of the Taliban.”
The Reaction’s Michael Stickings: “At this challenging time, with the economy struggling and without an end in sight, with people losing their jobs and their homes and their health care, the Republican Party intends not to work with Obama and the Democrats on a comprehensive plan to get the country moving again, or at least not constructively, but to launch an insurgency, an aggressive effort to attack and undermine the economic stimulus plan. In other words, Republicans are Washington’s terrorists.”
FireDogLake’s Thers: “Now, whatever else this is, it’s incoherent, freakish, and strange. It’s the sort of gibberish produced by someone faced with the choice of either cheering on appalling economic catastrophe, or else bringing on his own utter ideological obsolescence.”
Bad Bank Trial Balloon Goes Bust?
U.S. Treasury Secretary Timothy Geithner’s strategy to aid the nation’s banks will likely emphasize guarantees of toxic assets over proposals to create a so-called aggregator bank that would remove them from balance sheets, according to people familiar with the plan.
The government guarantees, which might be modeled on those already given to Citigroup Inc. and Bank of America Corp., may be coupled with the purchase of preferred shares in the banks that would be later convertible into common stock, some of the people said. The aggregator bank or ‘bad bank,’ has lost favor, in part because the potential costs involved, they added…
…The administration, smarting over the fight in Congress over its $800 billion plus economic stimulus plan, is wary about asking lawmakers for more money now for the banks, according to some of the people.
That’s one reason why the administration looks to be backing away from setting up a giant aggregator bank to buy up the assets and at most may settle on a smaller version of that, they added…
…Banks are also pressing for the plan to include a temporary easing of mark-to-market rules that require them to reduce the value of assets they hold. The firms maintain that at least some of the assets are not that impaired, arguing that investors are being too pessimistic about their ultimate value.
Senate Banking Committee Chairman Christopher Dodd said on Feb. 3 that such a change might be needed, although he made clear yesterday that he isn’t convinced. “I haven’t embraced it yet,” the Connecticut lawmaker told reporters, adding that he intended to discuss the idea with Geithner.
Politico’s Glenn Thrush: “Treasury Secretary Tim Geithner will give House Democrats a sneak preview of his bank bailout overhaul on Saturday — two days before he’s due to release details to the public.”
Health Care Reform This Year
The Hill: “In a letter sent to President Obama on Thursday, Sens. Edward Kennedy (D-Mass.) and Max Baucus (D-Mont.) assert the need to act quickly to overhaul the U.S. healthcare system. ‘We are writing to affirm our continuing commitment to enacting comprehensive healthcare reform this year,’ wrote Kennedy and Baucus, who chair two committees that will take the lead in drafting legislation to carry out Obama’s health agenda.”
Institute for America’s Future releases new report: “A Public Health Insurance Plan: Reducing Costs and Improving Quality:” “This report explains why a public health insurance plan that competes on a level playing field with private insurance plans in an exchange offers the best promise for reining in health care costs, encouraging greater efficiency and quality, and providing people with financial security. Moreover, authoritative studies show that the savings that can be achieved by insuring millions of people in a public health insurance plan may be enough to pay for covering the 46 million Americans currently without insurance.”
Managed Care Matters’ Joe Paduda is heartened by the bipartisan SCHIP vote: “This marks the first step towards universal coverage … Among the GOP Senators voting ‘yea’ were Collins and Snowe of Maine, Alexander and Corker of Tennessee, and Hutchison of Texas (!). While the Snowe and Collins votes are not unexpected, the support of the two Tennesseans and Hutchison in Texas are somewhat surprising. I wouldn’t expect the latter Senators to be very supportive of future health reform legislation. That said, the fact that this initial bill passed with some bipartisan support is a positive signal for reform advocates.”
ThinkProgress: “Boehner creates GOP health care task force stacked with industry-tied lawmakers.”
Ambinder: “For organized labor, enough’s enough. The nomination of Hilda Solis is languishing in the Senate, with Republican protesting Solis’s past association with labor groups and Democrats wondering about the tax problems her husband recently solved. Tomorrow, the AFL-CIO fights back. ‘Enough is enough,’ a spokesman said tonight Watch Friday for labor, women’s groups and Hispanic groups to open fire against Republicans.”
On a 40-57 vote, senators upheld a budget point of order against a $421 billion substitute amendment from McCain that included $275 billion in individual and corporate tax reductions, along with $50 billion in spending on entitlement programs, $32 billion in spending and tax breaks aimed at stimulating the housing market, and $64 billion in infrastructure investments.
Senators voted, 32-65, to reject an amendment from Russ Feingold, D-Wis., that would create a new point of order against unauthorized earmarks in spending bills. The stimulus bill does not contain earmarks in the traditional sense, but opponents of these parochial projects believe it is time to push the issue as concerns grow about how to handle the deficit and what spending is worthwhile.
The Senate adopted, by voice vote, an amendment from Banking Chairman Christopher J. Dodd, D-Conn., that would prohibit bonuses and other incentives for at least the 25 most highly paid executives at firms that are receiving bailout funds from the Treasury Department. It would require Treasury to conduct a retroactive review of bonuses given out by these firms.
Senators adopted by voice vote an amendment from McCaskill that would impose a $400,000 salary cap on officers and directors at firms receiving bailout funding.
It also rejected, 35-62, a substitute amendment from John Ensign, R-Nev., that would have the government guarantee a 30-year interest rate of 4 percent to 4.5 percent for refinanced mortgages of $750,000 or less.