Due to a technical glitch, we have a shortened, continental-style, (but still filling!) Progressive Breakfast this late morning.
Stress Test Results Trickle Out
“The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank. If the bank is unable to raise the capital cushion by selling assets or stock, it would have to rely on the government, which has provided $45 billion in capital through the Troubled Asset Relief Program … The government’s determination that Bank of America doesn’t need as much capital as it has already received from taxpayers is an indication that even some of the most troubled banks may not need more government money than has been allocated to them.”: NYT
The main purpose of the stress tests remains largely unfulfilled. Federal officials want banks to raise more capital, from the government if necessary, so that they will have the financial strength to increase lending and help lift the economy from recession. The success of that process, which begins tomorrow and could take six months, ultimately will depend in large part on whether investors believe the government’s assertion that many banks are healthy and deserving candidates for new investment … But in persuading investors to wait patiently for the results, the Obama administration has already succeeded in achieving a goal that largely eluded its predecessor.”: W. Post
The public relations campaign packaging the bank stress tests is kicking into high gear and our professional information managers are really hitting their stride … deliberately or inadvertently confusing people is made much easier by the fact that the experts are in sharp disagreement.”: Baseline Scenario’s Simon Johnson.
“The major banks now collecting federal bailout money were not unwitting victims of the mortgage meltdown but instead were directly linked to the root cause of the problem: a subprime lending machine concentrated in Southern California, a new study asserts.”: LA Times
Congress will take a major step on Wednesday toward creating an independent panel with sweeping powers to investigate the root causes of the economic crisis. The House is expected to vote in support of a commission modeled on the Sept. 11 panel…”: NYT
“Financial firms eager to return infusions from the $700 billion Troubled Asset Relief Program will have to demonstrate that they can operate without debt guarantees provided by the Federal Deposit Insurance Corp., a senior government official said Tuesday … Treasury and the Federal Reserve are expected to issue TARP repayment guidelines on Wednesday”: AP
“Top senators on the Banking Committee are revamping legislation the panel passed in late March and are expected to unveil it in coming days … Many Senate Democrats want stricter limits on card companies’ ability to raise rates on consumers who are paying their credit-card bills on time. But most Senate Republicans want credit-card companies to have the right to establish a price for credit based on risk. That means adjusting terms if a consumer’s credit quality has deteriorated — even if that consumer hasn’t been delinquent … A Senate bill that is tougher than the House version on credit-card companies could lose some of the support in the House.”: WSJ
Schumer Plan Riles Health Insurance Lobby
“Schumer is in fact proposing a real public health insurance plan – government run and a strong competitor with private insurance. And most importantly, Schumer’s vision breaks the monopoly of private insurance, and this is the main standard on which a public health insurance plan proposal should be judged … What is really telling is the reaction of the insurance industry to this compromise:” HCAN’s Jason Rosenbaum
“[Top insurance lobbyist Karen] Ignagni’s sense of fair competition is itself unfair. Ignagni does not want a new public health insurance plan to have any inherent advantages, but she’s insisting that private insurers preserve their advantage to create provider networks and enter or exit markets as they wish, etc. As Schumer pointed out, ‘it’s sort of as if you’re saying well the public advantages we should get rid of, but the private advantages we should keep. Let them compete.’”: Wonk Room’s Igor Volsky
“Insurance Lobby Outlines a Strategic Retreat”: CQ Politics
“On Wednesday, Grassley will join Baucus for a face-to-face meeting with President Obama on health reform at the White House … Grassley wants to stick with Baucus for as long as he can but knows that Democratic leaders such as House Speaker Nancy Pelosi (Calif.), Senate Majority Leader Harry Reid (Nev.) and White House Chief of Staff Rahm Emanuel are waiting in the wings, ready to force through a Democratic bill if a consensus fails to emerge.”: The Hill
Climate Bill May Jump Subcommittee
“Energy and Commerce Chairman Henry Waxman may fast-track his controversial climate change bill, bypassing the political hurdles of the subcommittee. ‘I’m still holding firm on my deadline to get a bill out of committee by the end of May and I believe that will probably require us to go right to the full committee and bypass the subcommittee,’ Waxman told reporters.”: Politico
“The Democrats also confirmed a published report that the White House was interested in linking support for a climate change bill with a separate plan to expand domestic energy production. But Waxman declined to elaborate, saying energy production is not in his committee’s jurisdiction; the matter would rest with the Natural Resources Committee.”: Greenwire
“NRDC took a look at the [Chamber of Commerce] board of directors and their public positions on global warming and gee, what we found… it turns out that the staff of the U.S. Chamber appears to be projecting the views held by a tiny sliver of its board of directors – just four out of 122 members on the board. The Chamber’s oft-stated views, which question the scientific consensus on climate change and reject the need for federal regulation to reduce global warming pollution, stand in sharp contrast to the views expressed by 19 members of the Chamber’s board that support federal regulations with goals to reduce total US global warming pollution. You read that right: only 23 members of the U.S. Chamber’s board have a publicly stated position on climate change and more than 80 percent are not on board with the U.S. Chamber’s ‘Dr. No’ position on climate policy action.”: Switchboard’s Pete Altman.