Shovels Hit Ground
[President] Obama and [Transportation Sec. Ray] LaHood on Tuesday announced the release of $27 billion in funds from the stimulus package “to help states create a 21st-century infrastructure.” The president said it is part of the “largest new investment in America’s infrastructure since President Eisenhower built the Interstate Highway System.” Obama said another 200 construction projects would be launched over the next few weeks, “fueling growth in an industry that’s been hard hit by our economic crisis.
More than a dozen states have now said how they plan to spend at least some of their transportation money, giving the clearest picture yet of how one of the president’s signature programs is playing out around the country. Beyond all the money for Medicaid and unemployment benefits in the huge bill passed last month, this will be the face of the country’s stimulus program: a bridge will be painted on a rural road, a new lane added on a suburban highway, a guardrail built on a median strip.
They may be old plans that the recession had forced a state to shelve, but multiplied by thousands, they will quickly get bulldozers rolling again and paychecks flowing. On the highway projects alone, the White House said Tuesday that 150,000 jobs would be created or saved.
Conservatives Launch Health Care Attack
Richard Scott became famous, and infamous, for his management of the Hospital Corporation of America during the 1990s. More than almost any other individual, he is emblematic of everything that’s frequently wrong with corporate, for-profit medicine–and how it can twist the principles of well-intentioned reforms like managed care, designed to refocus medicine on prevention and efficiency, into a crude tool for cost-cutting and profiteering.
Scott left, or was forced out, from HCA just as it became mired in scandal in 1997, although Scott never faced any criminal charges. One might think that would be the last we’d hear from him, at least on this topic.
Well, guess who’s decided he has something to say about health care reform?
Wonk Room’s Igor Volsky spots Swift Boat link: “The group doesn’t engage with the actual content of Obama’s proposal. Its modus operandi– developed and perfected during Clinton’s failed efforts to reform the health care system — is to launch its attacks against a straw man. In fact, it appears that the group’s public relations guru Brian Burgess, is from the same PR firm that managed the Swift Boat Veterans For Truth; launching concocted right wing fairy tales onto the airwaves is something of a cottage industry for these guys.”
Ezra Klein guffaws: “If I were a Republican, I’d be ready to slit my wrists at the prospect of former Columbia/HCA Healthcare CEO Rick Scott heading the conservative response to Obama’s health reform effort. This is like liberals getting Franklin Raines to run their economic messaging or Bush tasking Donald Rumsfeld with a comprehensive defense of his administration’s legacy.”
Jacob Hacker critiques Obama’s health care strategy: “It makes sense to keep the targets for political attacks hidden for as long as possible, but that does not mean that Obama and his advisers should start dropping key priorities-priorities that they have already articulated and defended-before the debate begins … So when the administration presses its agenda to leaders in Congress, it shouldn’t sweat the details. But it should make clear that the big three-employer contributions, an Exchange, and a public health insurance plan aren’t details. They are the essence of Obama’s vision of a transformed system.”
More from Volksky: Conservatives And Insurance Industry Team-Up To Oppose Obama’s Cuts To Medicare Advantage
Next Phase Of Housing Plan
USA Today: “Details of the Obama administration’s housing rescue plan are expected Wednesday, and banks and other servicers are bracing for a flurry of demand for both loan modifications and refinancing.” FT looks at concerns from loan servicers.
One of the original sponsors of the cramdown provision, Rep. Brad Miller (D-N.C.), said he was content with the changes made this week.
“From what I’ve seen, I’m OK with it,” Miller said. “We don’t want people to get loan modifications in bankruptcy if they could get it outside of bankruptcy. “I could be happier, but I think this will work,” Miller said.
President Obama has supported cramdown generally as part of his broad effort to shore up the housing market, but appeared to signal that he would like it to be a last resort measure.
The language that was circulated on Tuesday includes a provision saying the court should consider whether the modification offered to a homeowner is a “good faith” effort to meet the standards set up by Obama’s housing plan as a “qualified loan modification.” The main component of that plan would mean that the modification would result in the homeowner’s first mortgage payment equaling no more than 31 percent of his income, according to draft language circulated on Tuesday afternoon.
One source in the financial services industry expressed displeasure with the latest language.
“Nothing has really changed from our point of view,” the source said. “It allows banks to compete with the president’s housing plan.”
AP reports criticism from Rep. Maxine Waters:
The deal would require judges to consider whether homeowners were offered a “qualified” loan workout — defined as one that would set monthly payments equal to about one-third of a homeowner’s income…
…Some liberals said the new limits were inappropriate. Rep. Maxine Waters, D-Calif., said many mortgage companies make it impossible for homeowners to even complete a phone call to their lender, much less work out more affordable loan terms.
“I don’t think people ought to have to go through that mess” to get mortgage relief in bankruptcy courts, Waters said. She said the banking industry still has a stranglehold on Congress. “These guys rule this place,” Waters said.
…the cramdown plan is a no-brainer and a definite benefit to the nation’s at-risk homeowners — but were the New Dems really trying to kill it?
Not so much. The compromise under discussion would require banks to offer mortgage-holders a workable loan modification plan — the same one proposed by President Obama — before bankruptcy proceedings could begin. Any loans being modified in bankruptcy would also have to be verifiably unaffordable based on homeowners’ income, as opposed to simply totaling more than a home is worth.
Whether that constitutes an unacceptable watering-down of the cramdown bill depends on one’s perspective. But the question of how many people would actually be helped by the provision is easy to answer: about 350,000 new bankruptcy filings over 10 years are expected as a result of the cramdown change, according to the non-partisan Congressional Budget Office (their report is downloadable here, under HR 200). The state of Florida alone is expected to be hit by 150,000 foreclosures this year alone.
“This is not an ideological fight for them,” one aide to a New Democrat told me, adding that members of the coalition “have worked closely with Democratic leaders to improve the bill, make it more expansive and push it in the direction of President Obama’s housing plan by including a loan modification plan.”…
…My response to any progressives who’d love to lump the New Dems in with the Blue Dogs: Direct that ire at the Senate, where cramdowns were negotiated with the help of Citigroup.
White House Commitment on EFCA
WSJ reports the President assured labor leaders that EFCA will happen: “President Barack Obama told AFL-CIO union leaders Tuesday in a videotaped address that the controversial Employee Free Choice Act will pass, signaling his full backing for legislation that makes union organizing easier. ‘We will pass the Employee Free Choice Act,[ President Obama told more than 100 top labor officials in a closed-door meeting at the labor federation's winter gathering in Miami, according to people at the meeting."
AFL-CIO pushes back on misinformation: "With waves of misconceptions coming from the Chamber of Commerce and corporate front groups, disseminated by reflexively anti-union pundits like Mickey Kaus, and trickling into the language and themes of credulous journalists, it’s important to cut through the spin and talk about what the Employee Free Choice Act actually does"
Fast Track for Cap and Trade?
TPMDC's Elana Schor speculates on possible use of budget rules to avoid filibuster: "President Obama's budget is a veritable road map to a more progressive tax policy, as I noted earlier today, but it also includes specific plans for regulating carbon emissions to fight climate change. That, in turn, opens the door for Congress to use 'budget reconciliation' process rules that would shield climate legislation from Senate filibusters when it comes to a vote (expected later this year or early next year)."
Right-leaning Dems Plot To Water Down Agenda
A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress. Afterward, some in attendance made plain that they are getting jitters over the cost and expansive reach of Obama’s $3.6 trillion budget proposal.
Asked when he’d reach his breaking point, Nebraska Sen. Ben Nelson, one of the most conservative Democrats in the Senate, said: “Right now. I’m concerned about the amount that’s being offered in [Obama’s] budget.”
Another attendee, Sen. Mary L. Landrieu (D-La.), said she expected the newly formed caucus to shape Obama’s budget proposal as it moves through Congress. “We want to give the president a chance, but our concern is going to be on the budget, looking forward,” Landrieu said. She added that she agrees with Obama that there needs to be “fundamental change” in fiscal policy, but she said “we do have to keep our eye on the long term, on intermediate and long-term fiscal responsibility.”
Sen. Evan Bayh, the Indiana Democrat who assembled Tuesday’s skull session, added that he was “very concerned” about Washington’s level of spending, especially in a $410 billion “omnibus” spending bill to fund the government until the start of a new fiscal year in October.
As for the tax increases on high-income earners called for in Obama’s plan, Bayh said, “I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending.” “The American people and businesses are tightening their belts,” Bayh added. “I think we need to show that the government can economize as well.”
TPMDC’s Elana Schor: “Does that fiscal-discipline argument against the spending bill sound familiar? Ah, right, House Republicans made it last week. Also, could someone remind Bayh that he voted against the Bush tax cuts that he’s now unwilling to see expire?”
Terrance Heath contributed to the making of this Breakfast