EFCA Introduced Today
Bloomberg reports Sen. Tom Harkin and Rep. George Miller will introduce the Employee Free Choice Act today and that Dem Sens. Bayh, Bingaman, Landrieu, Lincoln, Nelson (Neb.) and Pryor remain uncommitted.
HuffPost’s Art Levine: “The AFL-CIO has even started a “Chicken Little” contest for the most outrageously false and extreme claim made by opponents of the legislation, and the competition is fierce: Is it Newt Gingrich calling the bill a ‘mortal threat to American freedom’ or Home Depot’s Bernie Marcus saying it will cause the ‘demise of a civilization’?”
HuffPost’s Sam Stein on Warren Buffet’s opposition: “Labor representatives … noted that he misrepresented the crux of the legislation, claiming it would end the secret ballot when, in actuality, it would provide workers a choice between using a secret ballot or majority sign-up in their efforts to unionize.” Also from Stein: Chamber of Commerce head still won’t debate SEIU’s Andy Stern.
Bloomberg reports on huge business lobby money dedicated to stopping EFCA: “Opponents including the U.S. Chamber of Commerce and the National Federation of Independent Business have said they will spend about $200 million on advertising and lobbying to block the measure.”
New anti-EFCA advertisements are up reports The Plum Line.
More Stimulus: Door Open, Or Delay?
ABC’s George Stephanopoulos tracks Obama administration comments on additional stimulus, concludes, “No doors closed. Will news between now and G-20 [meeting in early April] raise or lower pressure?”
Obama econ adviser Christina Romer in speech says “We need to let the medicine work for a while” but also warns of underspending. USA Today: “…citing lessons from the Great Depression, she said the government must keep spending to sustain the economy until a recovery is well established … [In 1936,] though the unemployment rate remained stuck in double digits, President Franklin Roosevelt tightened spending and levied the first Social Security payroll taxes, which drained more purchasing power from private hands. The Federal Reserve, at the same time, doubled reserve requirements for banks. That one-two punch dealt the economy a blow that added two years to the Depression, Romer said.”
Economist’s View’s Tim Duy fears WH is too optimistic: “commentators are already calling for a fresh round of stimulus. But will these calls be heeded, or fall on deaf ears? For now, it looks like the Obama Administration is standing firm … Light at the end of the tunnel…what information exactly is flowing into the Oval Office? Did the White House get the same jobs report the rest of us saw last Friday?”
Time reports on rising consumer credit problems: “economic woes that have long plagued those at the lower fringes of the American middle class are now hitting people near the heart of it.”
How Weak Are The Banks?
McClatchy reports “5 biggest banks face huge losses”: “America’s five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.”
Baseline Scenario’s Simon Johnson decodes World Bank statement: “In a document prepared for the G20 meeting, the World Bank hints at more dire outcomes: global GDP will decline this year for the first time since WWII, with growth “at least 5 percentage points below potential” (translation: roughly minus 1 percent). But they don’t give any supporting country-level detail and they are completely silent on the key question for the US banking stress test – what will happen in 2010 … their body language … says that this is going to stay bad for a while. But they can’t quite bring themselves to be explicit. The document is a series of dire warnings, couched in rather indirect language – although, to an official ear, the general downbeat tone is quite clear. Then you reach section VII, “Urgent Priorities” and the recommendation for the financial system is: “restoring confidence”. This is completely vague and unhelpful – which, of course, is the point.”
AIG told govt its failure would be “catastrophic” and could start a “run on the bank” in confidential memo, according to W. Post.
Meanhile, Citigroup CEO touts new profits, according to Bloomberg. “‘I am most encouraged with the strength of our business so far in 2009,’ [Vikram] Pandit wrote in an internal memorandum obtained today by Bloomberg. ‘In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.’ … The bank has also conducted its own stress tests, using assumptions more pessimistic that the Federal Reserve’s, Pandit added. Citigroup is ‘confident’ about its capital strength.”
Naked Capitalism on Citi: “The double-speak in this Wall Street Journal piece, ‘U.S. Weighs Further Steps for Citi.’ is so thick that parsing it is like wading through mud. And I do mean to stress the attempts to obfuscate what is going on.”
FDIC pushes toxic assets plan. W. Post: “The government’s plan to strip banks of troubled assets could force some firms to record large losses, but the painful purge would help restore confidence in the banking system, according to Sheila C. Bair, chairman of the Federal Deposit Insurance Corp. Bair said yesterday that the effort might require more money than the $700 billion Congress has approved to aid the financial industry, but she added that taxpayers would probably reap an eventual profit on the asset purchases … Bair and other federal officials said discussions were ongoing about the appropriate extent of the federal subsidy. A larger government contribution would allow investors to pay higher prices, limiting the losses that banks would record but also exposing taxpayers to greater risk. The administration hopes to find the right balance and announce the details within the next two weeks, possibly as soon as next week, according to people familiar with the matter. ”
Fortune looks at how unemployment complicates bank rescue: “rapidly increasing joblessness directly undercuts the massive efforts underway to stabilize the banking system … feeding the near-tidal wave of homes on the brink of foreclosure as well as delinquencies on auto loans and other types of consumer lending. This process inevitably expands the already dangerously high levels of toxic assets on bank balance sheets.” Bloomberg economist survey: “The U.S. jobless rate will reach 9.4 percent this year and remain elevated through at least 2011…”
Reuters on BofA bonuses: “New York state’s top legal officer and U.S. Rep. Barney Frank demanded Monday that Bank of America Corp provide more details on $6.9 billion in bonuses paid in 2008, including $3.6 billion at the former Merrill Lynch & Co.”
FireDogLake’s Jane Hamsher: “Bank Lobby Still Getting a Lot of Bang for Their Bucks”
“He knew what he was doing. He gave good solid answers, it was two hours of openness,” House Financial Services Committee Chairman Barney Frank (D-Mass.) said after the meeting. “Reality is not the best right now. He can’t wave a magic wand.” The administration has included a placeholder in its budget proposal for additional bailout funds, and President Barack Obama said flat out during his congressional address last month that more money would likely be needed. But Geithner did not say Monday night how much additional bailout money the administration may need to request in the future, sources in the room said.
He defended the administration’s response thus far, walking members week-by-week through the actions the administration and Congress have taken since Obama took office, attendees said. … “We’re doing in weeks what countries did in years,” Geithner told the assembled Democrats, according to a person present. “This will work. It will take some time. It will take patience. We will work with you. But it will work,” the attendee recalled Geithner saying…
…Rep. Brad Miller (D-N.C.), who stayed to the end of the session, said the administration’s plans to fix the banking system seem to continue to focus on more capital infusions and somehow buying the toxic assets from financial institutions, “but it was not clear what that would be.” He, for one, did not emerge from the lengthy session reassured. “There is almost nothing about our banking system right now that I find reassuring,” he said.
Trade Nominee Promises Changes
Former Dallas mayor Ron Kirk, apparently on course to be the next U.S. trade representative, told senators Monday that his main objective as the nation’s top trade official will be enforcing existing law and insisting that U.S. trade partners play by the rules.
He made clear that trade policy under President Barack Obama would differ from that of the Bush administration, when the emphasis was on cementing new free trade agreements.
Kirk, generally supported by the business community as an advocate of expanded trade, said he did not come to the job with ”deal fever” and would make his top priority assuring that existing trade partners live up to the rules — in such areas as labor rights and environmental protection — that are already on the books.
He said that of the three pending bilateral free trade deals — with Panama, Colombia and South Korea — Panama was the closest to being sent to Congress. He said the agreement with South Korea offered ”one of the biggest opportunities we have” to expand U.S. sales abroad, but that the current accord ”just simply isn’t fair. ” He said that the administration ”will step away from that if we don’t get it right.”…
…Kirk said all three agreements would undergo a comprehensive review before they are presented to Congress…
…Kirk assured [GOP Sen. Chuck] Grassley that any efforts to ”strengthen” NAFTA would be collaborative and would not result in any of the participants raising tariffs, a concern to farmers in Grassley’s home state.
Eyes on Trade, after live-blogging the hearing: “Wow. That was the shortest and least substantive hearing on ANY matter I’ve ever heard.”
South Korea government responds. Bloomberg: “South Korea defended an economic accord with the U.S. that President Barack Obama’s nominee for U.S. trade representative vowed to alter on the grounds it ‘isn’t fair.’”
W. Post analyzes new trade strategy: “The Obama administration is aggressively reworking U.S. trade policy to more strongly emphasize domestic and social issues, from the displacement of American workers to climate change … the administration is preparing to take a harder line with America’s trading partners. It will seek new benchmarks before supporting already-written trade agreements with Colombia and South Korea and is suggesting that it will dig in its heels on global trade talks, demanding that other countries make broader concessions first … Yet the administration still appears to be toeing a line, saying it will move to address the concerns of American workers while also carefully avoiding words and deeds that directly smack of protectionism.”
Obama To Deliver Education Speech Today
President Barack Obama is laying out his “cradle to career” plan for education Tuesday, including a controversial plan to boost pay for teachers who excel. The White House plan also includes new incentives for states to boost quality in their preschool programs, to raise standards for student achievement and to reduce the high school drop-out rate. And the president is fleshing out his plan to increase financial aid for college students, senior administration officials said…
…He’ll also call for improved professional development, mentoring for new and underperforming teachers and “new processes to remove ineffective teachers.” He is also promoting better recruitment, including recruitment of mid-career professionals to enter teaching.
Additionally, he’ll call for more charter schools and challenge states to lift limits on the number in operation.
To reduce high-school drop-outs, the president wants to direct attention to the low-performing districts that account for a disproportionate share of the problem. According to the White House fact sheet, 2,000 low-performing high schools produce more than half the drop-outs, so the goal is to invest new money in these areas, including new attention to at-risk students still in middle school. The president’s 2010 budget includes funding for programs that deal with dropouts, such as transfer schools that combine education and job training for students that are far behind.
Reuters: [Officials] said he would challenge U.S. states to adopt more rigorous standards of education, especially in reading and math. … Obama, however, is not proposing to make it compulsory for states to raise education standards and will rely instead on boosting education spending in several areas, including early childhood education, to achieve the desired results.”
NY Daily News: “‘The most controversial thing here is the performance pay schemes,’ said a Democratic source with knowledge of Obama’s educational reforms. His push comes in the face of opposition from union allies who have long opposed the merit-pay system.”
NPR visits rural WV school to explore how ed stimulus money will be spent. “‘It could really be a big benefit to us to have that funding,” [Clay County Superintendent Larry Gillespie] says. Gillespie says it may help the school district not just get through the economic crisis, but jump-start some long-term improvements as well.”
Budget “Hawk” Protecting Wasteful Private Student Loan System
More colleges are offering government student loans, instead of subsidized private loans. USA Today: “The number of colleges and universities offering student loans through the government’s direct loan program rose sharply last year, a trend that could strengthen Obama administration efforts to end subsidies to lenders that provide student loans .. Obama’s budget calls for ending the government-subsidized loan program by 2010. The administration estimates that would save the government $4 billion a year.”
Yet conservative Dem Sen. Ben Nelson, who claims to be concerned about overspending, opposes the plan. W. Post: “one of the major corporate providers of student loans is NelNet, a company based in Lincoln, Neb., the home state of Sen. Ben Nelson … ‘I don’t support anything that could reduce those benefits,’ Nelson said.”
Back From Detroit
UAW employees ratify agreement with Ford allowing some retiree benefits to be paid in stocks, adding uncertainty to retirements.
CNN reports stimulus “could breathe new life into an emerging industry: small wind turbines … used to help power homes or small businesses.”
USA Today rounds up the stimulus tax credits you can take for making energy-efficient home improvements.
Health Care for America NOW! rallies in protest of major insurance lobby conference in DC this morning.
“Van Jones is Tapped as Special Adviser to Obama … an emerging leader who happens to be black and who has also successfully promoted the concept that we can address climate change, save our economy and create good jobs (especially in struggling communities) all at the same time.”: Jack and Jill Politics
Washington Independent: “WSJ Cherry-Picks Data to Label Cap-and-Trade Scheme ‘Regressive’”
Terrance Heath contributed to the making of this Breakfast