Senate Sets June Benchmark for Health Care
Sens. Baucus and Kennedy tell President Obama they plan a June mark-up of health care legislation. Time’s Jay Newton-Small: “The letter [to the President] is significant as it sets a time table that will now have political consequences if it is not met. This move, combined with the reconciliation language expected to be included in the final budget resolution, holds stake-holders’ feet to the fire to get something done this year.”
W. Post reports on progressive pressure for a public health plan option: “Last week, two top administration officials suggested that Obama is open to compromise on the public plan, comments that set off alarm bells in some corners of his party. ‘That’s what got the left nervous. I took that as a signal to Senator Grassley’ that Obama is willing to negotiate around an issue Grassley has vehemently opposed, said Len Nichols, health policy director at the New America Foundation … Yesterday, a spokeswoman clarified that Obama has not taken the idea off the table but is willing to consider any proposal that meets his broad goals … The formal legislative process will start today, when Baucus convenes the first meeting of the Senate Finance Committee.”
Insurance Company Rules: “Will Government Give Public Health Insurance an Unfair Advantage? Experience Tells Us No.”
The Treatment’s Jonathan Cohn mocks claims on long wait times: “The Washington Post’s Ceci Connolly has a nice story today about how the health care crisis is playing out in North Carolina. The state now has the nation’s highest rate of unisurance: 22.5 percent of the state’s residents have no insurance … Dr. David Talbott, says he can tell the problem is getting worse by the spike in demand for his clinic’s services … What’s that? Waiting time for medical care in the U.S.? That only happens when you have ‘socialized medicine’ like they do in Europe! The truth, of course, is that Americans wait for medical services all the time. That’s particularly true if they are uninsured, as more and more Americans are becoming.”
Who else is funding [your] organization?
I told people I am not disclosing their names. But there are lots of people who believe the same way we do.
Are they mostly individuals or corporations?
It is both. … The bigger dollars will be companies.
Are there companies giving money that are at the table talking with the Democrats?
How far do you want to go? (Laughs and refuses to answer.)
NYT looks at struggles of one family unable to find affordable coverage for their cancer survivor son.
Stan Collender says “Reconciliation for Health Care Should Not Be an Issue:” “…reconciliation has become such a standard part of the budget process that using it for health care would be neither surprising nor precedent-setting … health care reform will have a substantial impact on federal finances and so can’t be said to be unrelated to the budget, which is one of the critical criteria for using reconciliation … Finally, including it in reconciliation does not prevent the committees with jurisdiction from producing a bill outside the reconciliation process.”
Scrutiny Steps Up on Banks
Treasury Secretary Timothy Geithner indicated that the health of individual banks won’t be the sole criterion for whether financial firms will be allowed to repay bailout funds, a position that might complicate their efforts to give back the cash.
In an interview, Mr. Geithner laid out some broad principles, including the need to consider the overall health of the financial system and the flow of credit in judging whether banks can repay their government investment. Among large banks, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have both said they want to repay the government.
“We want to make sure that the financial system is not just stable, but also not inducing a deeper contraction in economic activity. We want to have enough capital that it’s going to be able to support a recovery,” Mr. Geithner said.
Mr. Geithner also said he plans to discuss signs of improvement in the U.S. economy with his counterparts at the coming Group of Seven finance-ministers meeting. But he said a “dramatic” mobilization of resources is still needed across the world to avert a deeper global recession.
Bloomberg checks in on possible congressional Wall Street investigative commission: “House Speaker Nancy Pelosi plans to push for a comprehensive inquiry [and] will speak about hearings this week to lawmakers, including Representative Barney Frank … “I think it’s useful to have it, but that should not be a reason to hold off on legislating,” [said] Frank … Senate Majority Leader Harry Reid, a Nevada Democrat, hasn’t indicated a preference for a new inquiry … [Senate Banking Cmte Chair Chris] Dodd’s office didn’t respond to requests for comment.”
NYT’s Andrew Sorkin on dubious bank profits: “Goldman Sachs, JPMorgan Chase, Citigroup and, on Monday, Bank of America all tried to wow their audiences with what appeared to be — presto! — better-than-expected numbers. But in each case, investors spotted the attempts at sleight of hand, and didn’t buy it for a second.” Barry Ritholz: “The banksters who have emptied the US Treasury of its money continue the same games of accounting sleight of hand, finacial engineering, and other tricks of the trade that helped caudse the mewltdown in the first place. Instead of recievership and liquidation, we rewarded these cretins with your grandchildren’s lunch money. It is idiocy on a grand scale, beyond my feeble imagination.
Baseline Scenario’s Simon Johnson: “I remain unconvinced by the Treasury’s line that ‘there is no alternative’ to their approach … If that is now their position, we have built a financial system that is immune to democracy – today’s complexity and lack of transparency mean that it is easier than even to become too big to fail. The major banks now know this and will behave accordingly.”
USA Today: “A government watchdog has launched ‘almost 20′ criminal investigations related to the $700 billion financial bailout program, according to a report to Congress to be released Tuesday. Neil Barofsky, the special inspector general for the rescue program, says in the report that the probes involve possible public corruption; corporate, stock and tax fraud; insider trading; and mortgage fraud. Barofsky provided no information on who is being investigated or why, saying details will not be released ‘until public action is taken.’”
More fraud possible in toxic assets program. NYT: “The inspector general was particularly pointed in his criticism of the Obama administration’s plan to buy up questionable assets from banks … It warned that the Fed was not currently planning to examine the securities that it would finance, and would be relying instead on the evaluation by credit rating agencies that originally failed to spot the dangers of subprime mortgages … Mr. Barofsky also warned that the Treasury’s plan might allow investors to double up on government subsidies for buying up troubled assets … The Treasury and the Federal Reserve have not yet begun the asset purchase programs … Geithner is scheduled to discuss it on Tuesday at a hearing of a Congressional panel…”
Pay limits may apply to firms in toxic assets program. W. Post: “Treasury Department lawyers have determined that firms participating in a $1 trillion program to relieve banks of toxic assets could be subject to limits on executive compensation, contradicting the Obama administration’s previous public position, according to a report to be released today by a federal watchdog agency. ”
Common stock transfer means banks pay less in interest payments. W. Post: “The Obama administration may let more large, troubled banks suspend interest payments on federal aid, allowing firms to rebuild their capital reserves more quickly and thereby limiting the amount of any additional federal aid that may be needed. The government initially required aid recipients to issue preferred stock that paid interest of 5 percent a year. It would now allow firms to replace some or all of those government-held shares with common stock that pays no interest. Taxpayers would lose the certainty of a guaranteed return, but could profit if the companies’ stock prices increase. The exchanges also would give the government significant ownership stakes in the banks that participate.”
Chrysler Financial denied bailout funds after refusing to rein in exec pay. ABC: “The Treasury Department turned down Chrysler Financial’s request for additional government funds because company executives refused to sign waivers for legal claims relating to changes in executive compensation restrictions, a government watchdog has revealed. ‘As Treasury reported to us, Chrsyler Financial sought additional funding,’ Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, told ABC News Monday. … ‘Treasury asked as a condition that the top 25 executives sign waivers reflecting the new executive compensation restrictions that were in the stimulus package. And Chrysler Financial executives refused to sign the waivers. So Treasury, in response, declined their request for additional funding.’”
Bloomberg on stress test criteria: “Regulators conducting the stress tests on the 19 largest U.S. banks are increasingly focusing on the quality of loans the companies made after finding wide variations in underwriting standards, a regulatory official said. Supervisors concluded that banks’ lending practices would need to be given as much weight as macroeconomic scenarios after finding a wide variation in standards for mortgages and other loans as about 200 examiners pored through the portfolios, the official said. The expanded criteria for the assessments will allow regulators to identify how much of each bank’s vulnerabilities stem from the economy’s deterioration, and how much comes from management decisions. Treasury Secretary Timothy Geithner has said he’s prepared to make management changes in any firms requiring ‘exceptional’ amounts of fresh taxpayer funding.”
Obama follows through on G20 pledge to boost IMF, reports Reuters.
McClatchy previews Thursday WH meeting with credit card CEOS: “A recent survey of credit card practices by the Pew Charitable Trusts found that of more than 400 cards offered online by the 12 largest issuers, all allowed payments to be applied in ways that disadvantaged cardholders, such as paying off lower-interest balances before those that accrue higher interest … Thursday’s meeting, which will include representatives from Bank of America, HSBC and Capital One, among others, comes amid a push by congressional Democrats for legislation to rein in questionable industry practices. Consumer advocates say that legislation sponsored by Sen. Christopher Dodd, D-Conn, and Rep. Carolyn Maloney, D-N.Y., would bring much-needed relief to Main Street after hundreds of billions of taxpayer dollars have been used to stabilize many of the same banks that issue credit cards.”
Mortgage Reform In Trouble
Mortgage reform may be blocked in Senate. FT: “Republican senators and the financial industry are closing ranks in an attempt to crush a controversial part of the Obama administration’s housing package [allowing] bankruptcy judges to reduce the principal and interest rate on mortgages … At first, groups such as the American Bankers’ Association (ABA) and key Republicans met Democrats in an attempt to water down the legislation. Now they have changed tack. ‘This is over – I just don’t think this will become law,’ said Bob Corker, a Republican on the Senate banking committee. ‘So what we tell people is just, ‘Let’s quit talking about this – don’t negotiate.’ … Charles Schumer and Dick Durbin, are working on a modified version. They hope to bring it to a vote in the coming days. But the Republicans and the ABA have stopped coming to meetings on the issue … Their conviction that the bill was effectively dead grew when Harry Reid, the Senate majority leader, said recently that he would be willing to remove it from the wider housing bill if a compromise could not be found.”
Rep. Barney Frank calls for more affordable housing funds. CNN: “Frank said federal funding for affordable housing had been cut when the GOP controlled both Congress and the White House because of a traditional Republican bias in favor of home ownership. He added, however, that housing policies will change now that Democrats are in the majority of Congress.”
SEIU Looking for EFCA Compromise
SEIU’s Andy Stern discusses EFCA compromises with W. Post editorial board: “…Stern noted that there are ways to try to level the playing field in union elections without giving workers a way around the secret ballot requirement, such as shortening the window before elections are held — thus giving employers less time to pressure workers — and stiffening penalties for employer violations …. ‘No matter what you do, you have to change the election process. Whether it’s majority sign up or not, workers have to have a choice about having an election. The bill has to address … fast elections, eliminating employer behavior and what happens if there are employer violations … ‘
NYT explores the need for Employee Free Choice Act, after corporate hospital uses intimidation to manipulate two elections after majority of nurses sign petition to unionize.
Climate Week in Congress
Politico lays out the House hearing schedule: “Fifty-four witnesses will testify on climate change legislation in three full days before the House Energy and Commerce Committee, topped off with an appearance from Al Gore on Friday. The committee will also hear from EPA Administrator Lisa Jackson, Energy Secretary Steven Chu, Transportation Secretary Ray LaHood and high-profile representatives from business and the environmental movement.”
Center for Public Integrity investigates the coal lobby American Coalition for Clean Coal Electricity: “…a collection of 48 mining, rail, manufacturing, and power-generating companies with an annual budget of more than $45 million — almost three times larger than the coal industry’s old lobbying and public relations groups combined … Amid the punishing economy of 2008, the top five U.S. coal mining companies saw their profits more than double to $1.9 billion. And the industry is determined to use a slice of those profits to deliver its message.”
NYT reports global warming drying up Colorado River: “The Colorado River is a critical source of water for seven Western states [but] under various forecasts of the effects of warming temperatures on runoff into the Colorado, scheduled future water deliveries to the seven states are not sustainable.”
Indigenuous peoples convene to address climate threat. Anchorage Daily News: …”hundreds of delegates — some wearing traditional clothing with long underwear underneath — listened to Native leaders from Greenland, Russia, Scandinavia and Alaska talk about how global warming is changing their lives in the Arctic … Gunn-Britt Retter, with the Finland-based Saami Council, talked about how her nomadic people, who herd reindeer in Scandinavian countries, are building up their own expertise to address changing animal migrations, longer growing seasons and the appearance of new pests that interfere with their pastoral lifestyle.”
WH Won’t Reopen NAFTA
NYT: “The administration has no present plans to reopen negotiations on the North American Free Trade Agreement to add labor and environmental protections, as President Obama vowed to do during his campaign, the top trade official said on Monday. ‘The president has said we will look at all of our options, but I think they can be addressed without having to reopen the agreement,’ said the official, Ronald Kirk, the United States trade representative.”
Sen. Sherrod Brown reacts: “I’m disappointed. The president needs to understand there is strong opposition to more-of-the-same trade deals.”
Social Security Still Sound
Recession not threatening Social Security. CBPP: “n recent weeks, several analysts, journalists, and legislators have sounded an alarm about the effect of the current recession on Social Security’s near-term prospects, which has fostered an impression that the program may face serious problems in the next few years. Fortunately, this is not the case. The recession has affected the system’s finances, and the next report of the Social Security Trustees — due in coming weeks — is expected to show some deterioration in the program’s financial outlook. But Social Security faces no immediate threat. The program continues to run large surpluses and remains capable of paying scheduled benefits in full for the next three decades or so.”
Terrance Heath contributed to the making of this Breakfast.