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$790B Economic Recovery Deal Reached, Should Be Law By Monday
Associated Press, Reuters and Grist offer dollar figures. Major items: infrastructure, clean energy, education, health care, aid to unemployed and poor, help to states, one-year Alternative Minimum Tax fix and other tax cuts and credits.
Politico lists major infrastructure items: “$11 billion for the 21st Century energy grid; $29 billion for highways; $16.4 for transit projects and high speed rail and passenger rail grants to states; and $7.2 billion to expand broadband access.”
More green detail from Climate Progress: “an impressive down payment on the transition to a clean energy economy.”
OurFuture.org reactions. Horn: “biggest and boldest progressive legislation of the past 40 years” and “darn good first step.” Sirota: “the key term is ‘downpayment’ – we’re going to have to keep pushing.” Scher: “Pass This Deal. Then Get Back To Work.”
NYT: “The question now is whether the $789 billion economic stimulus plan agreed to by Congressional leaders on Wednesday is the opening act for a more ambitious domestic agenda from President Obama or a harbinger of reduced expectations … Regardless of the government’s budgetary straits, Mr. Obama has signaled that he sees his other signature initiatives not just as salvageable but as more urgent than ever.”
Lawmakers said they reduced one of Obama’s signature proposals, a plan to provide a $500 payroll tax cut to individuals and $1,000 to families. Under the compromise, the bill would provide $400 and $800 tax cuts, respectively. Retirees and disabled veterans who don’t pay payroll taxes would get a one-time payment of $250.
Lawmakers slashed a $35 billion plan designed to increase home sales. The Senate bill called for doubling a $7,500 tax credit for homebuyers. Under the compromise, that credit would increase by $500.
An $11 billion Senate proposal to boost the auto industry through tax breaks to new car buyers, to write off interest on their loans, also was cut to about $2 billion, according to Senator Barbara Mikulski, a Maryland Democrat, who sponsored the provision.
A proposed business tax cut that would have allowed companies to convert losses into tax refunds was all but eliminated. Baucus said the provision would have let companies claim $67.5 billion in refunds this year and next year.
Last Friday, [GOP Sen. Susan Collins] had successfully eliminated all such money from the Senate bill. Wednesday she agreed to allow $10 billion as part of a nearly $54 billion fiscal stabilization fund but argued that the $10 billion should not be confined to this single dedicated purpose.
This did not sit well with the House Democrats, already resentful of the Maine Republican’s veto power over the bill. The construction funds are especially sensitive in poor, often minority school districts less able to finance new schools. And because of political tensions now in his home state of South Carolina, House Majority Whip Jim Clyburn was insistent that some protection be provided so local schools — not the state — had access to the money.
The draft compromise keeps the $10 billion in the stabilization fund as proposed by Collins. But $6.6 billion would go to public schools under the Title 1 formula that is targeted more toward poor districts. The remaining $3.4 billion could be used for state higher education institutions and community colleges and distributed differently.
“Buy American” provision, within existing trade agreements, retained according to Bloomberg. Wall Street Journal cries.
“$50 billion in toxic pork for nuclear energy axed from Stimulus Bill,” says Climate Progress.
Blue Mass Group’s Charley on the MTA: “still not big enough, and good things were cut out in order to make sure it’s not big enough. So, more must be done.”
W. Post reminds how far we’ve come: “When Pelosi proposed a $300 billion stimulus plan [in November], she was rebuked by Republicans, who over the summer had blocked a comparably meager $60 billion package. ”
E.J. Dionne’s hopes White House learns lesson on centrism: “There is nothing wrong with a sensible centrism that tries to balance competing goods. But Washington has become too concerned with appearances and with calculating the distance from some arbitrary midpoint in any given debate. The sensible center should be defined by what works, even if that means discovering that the true middle ground isn’t where we thought it was.”
OpenLeft reports net neutrality is retained in the bill
W. Post reports stricter exec comp rules likely to be dropped from bill: “Provisions to impose a penalty on banks that paid hefty bonuses and to cap pay at $400,000 for all employees at firms applying for additional government funds did not survive the compromise, sources said. The situation was in flux last night, but provisions in the Senate bill that called for a ban on bonuses for all companies receiving government funds also appeared to be headed to the chopping block, congressional sources said.”
Stateline cautions that after years of trying to limit access to government assistance, state governments may not be fully prepared to handle billions in anti-poverty aid.
Truth trumps right-wing distortions. USA Today reports: “Obama managed to boost public support for the plan when he hit the road during the past week. A USA TODAY survey of 1,021 adults taken Tuesday showed
support for the bill rising to 59%, up 7 percentage points from a week earlier.”
Predictable Conservatives Whine
Shorter George Will: The guy Obama beat couldn’t support it, so this bill must suck!
Shorter Stephen Hayward in the WSJ: Hey Obama, stop winning so much!
PowerLine stokes hatred for teachers: “the huge ‘education’ component of the stimulus bill makes little sense as stimulus or as education spending. It is best understood, perhaps, as a payoff by the Democrats to the teachers unions.”
Digby on ABC report that House Republicans privately like some of the bill: “So the Republicans liked the legislation but voted against it because their feelings were hurt. What else is new?”
USA Today editorial board criticizes congressional GOP with “political positioning than responsible governing.”
Clip ‘n’ Save Conservative Quote
GOP Sen. John Ensign, asked by MSNBC yesterday when he could conclude the President’s economic recovery plan was working or not, “I think you have to give it at least a year, things like this don’t happen overnight.”
As Unemployment Rises, Biz Fights Providing Benefits
W. Post: “More than a quarter of people applying for [unemployment benefits] have their rights to the benefit challenged as employers increasingly act to block payouts to former workers. The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute.”
Brilliant at Breakfast: “This is why the compensation of top executives has become a huge issue. When times are good and everyone is sharing the wealth, no one cares about what executives are making. But when times are bad and everyone else is tightening their belts, the spectacle of corporations defend their executive compensation practices and bonus structures while denying laid-off workers $300 a week in unemployment just shows how rigged the game is.”
Financial Bailout Update
Robert Reich worries about transparency: “this is hardly a model of transparency. To date, the Fed has already committed some $2.5 trillion to rescuing the financial system, yet no one outside the Fed knows exactly how or where this money went. The Fed is subject to almost no political oversight. Yet if the trillions of dollars the Fed has already committed and the trillions more it’s about to commit can’t be recouped, the federal debt explodes and you and I and other taxpayers are left holding the bag.”
Bloomberg reports banks may give up government help: “With more scrutiny ahead, bankers including JPMorgan’s Jamie Dimon, Morgan Stanley’s John Mack and Goldman Sachs Group Inc.’s Lloyd Blankfein have said they’d like to repay government loans as soon as possible. BB&T Corp. CEO Kelly King told an investor conference yesterday that his Winston-Salem, North Carolina-based bank wants to be first to get out of TARP and escape U.S. restrictions, which can be added retroactively. ”
Naked Capitalism questions plans to “stress test” the banks: “I would welcome reader input (especially from bank examiners and accountants), but it is pretty clear 100 people and a few weeks (or even a few months) is grossly inadequate for a bank the size and complexity of a Citigroup. Citi has operations in over 100 countries. All 100 examiners can do is make queries along narrow lines, and work with the data presented. This scale of operation won’t allow for any verification or recasting of data.”
TPM’s Josh Marshall doesn’t get Obama’s resistance to nationalization: “What doesn’t compute to me about this is that I do not think anyone is talking about a wholesale nationalization of the banking sector — as in you literally nationalize the whole banking industry. The problem seems to be centered in a very small number of very big mega-banks. And what people are talking about is applying some version of Geithner’s bank ‘stress test’, coming clean about which banks are insolvent and having those banks that don’t pass the test taken over, just as little banks go under every week nowadays.”
NYT’s Kristof suggests handing out bank shares: “America’s horror of ‘nationalization’ could be defused by handing out shares to all American households. President Bush used to talk about building an ‘ownership society.’ Well, giving shares in big banks to all American households would be a terrific way to do that.”
White House Blogger Call
Solis Soon To Be Confirmed. What’s Next for EFCA?
The Nation’s John Nichols reports (via The Moderate Voice): “A determined campaign by labor unions, women’s rights groups, Latinos and progressives — and a timely intervention by Massachusetts Senator Edward Kennedy — has renewed the confirmation prospects of President Obama’s choice to serve as Secretary of Labor, California Congresswoman Hilda Solis … Solis, a labor ally who whose confirmation process was delayed by conservative Republicans who objected to her union ties and progressive politics, got the committee O.K. on a voice vote. Only two Republican members of the committee were heard to object. A full Senate vote is likely this week, and Republican opposition appears to be crumbling.
HuffPost’s Art Levine urges she crack down on “wage theft”: “[There is] an estimated $19 billion a year in virtually unpunished wage theft involving some of the country’s major corporations, including Wal-Mart, Tyson and even Federal Express. And it’s no surprise, then, that such companies are among the most virulent opponents of the Employee Free Choice Act, which aims to level the playing field by giving workers the right to choose how to form a union.”
President remarks on EFCA in interview with regional newspapers. St. Louis Post-Dispatch: “[The President said] he doesn’t think labor’s controversial ‘card-check’ plan to expand collective bargaining should be postponed because of the ailing economy. ‘I would love to see a process whereby business and labor get together and deal with some of the problems that have made it very difficult for workers to form a union, but perhaps address some of the legitimate concerns that businesses may have,’ the president said.”
Newsweek’s Fareed Zakaria notices calm up north (via E&P): “Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it’s Canada … as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers.”
“Thinking Big” Roundup
Yesterday’s Thinking Big conference was a huge success, attended by more than 800 people. Videos will be up soon at ThinkingBigConference.org
Nobel laureate economist Paul Krugman said Wednesday the US economic crisis is “out of control” and that a renewed push for public investment is the most effective stimulus remedy.
Speaking to a Washington symposium, Krugman said that the current slump is in some ways not as severe as in 1982 but that “this is not that kind of crisis.”
“This crisis is out of control and there is no reason to think there is any spontaneous mechanism for recovery,” he said.
“My deep concern is not simply that we will have a very steep slump but that we will become entrenched.”
He said there is a threat of deflation that could further curb spending and investment and lead to a situation where the economy is “basically stuck in quicksand.”…
… he argued that in the current crisis, government is the only entity that can now prop up demand and avert a deeper slump.
Thus, he said more spending, especially on infrastructure, would be more effective than tax cuts, favored by many Republicans and conservatives.
“Any attempt to make economic sense of the role of the government to sustain demand seems to lean toward increased government spending more than tax cuts,” he said.
“We get get a lot more bang for the buck from infrastructure spending than from tax cuts … the bang for the buck is probably twice as good at least in spending as for tax cuts cuts, maybe three times.”…
Krugman said he believes the financial rescue plan unveiled by Treasury Secretary Timothy Geithner Tuesday may lead to the failure of some major banks based on the so-called “stress test” for further aid.
“The problem is not toxic assets,” he said, referring to risky real estate assets being held by banks.
“The problem is that financial institutions have lost a lot of money and many of the big ones, if they are not actually insolvent, are very close.”
Krugman said the “stress test” may reveal that “five or maybe seven of these institutions are actually not viable,” and thus could be put into government receivership, noting that this is the same process used for smaller banks that fail.
Gov. Ed Rendell’s remarks on infrastructure investment covered by Tapped and FireDogLake.