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Job Ideas Abound In Advance of Today’s WH Summit
House leaders looking at TARP funding for jobs. Politico: “…House Democratic leaders are floating the idea of adding job-creating measures to a must-pass omnibus spending bill, and paying for the projects with repaid TARP funds. The measures that could be included in the legislation include transportation and infrastructure projects, which several Democratic sources say are the closest to being shovel-ready. An omnibus bill is currently seen as the best, if not only, option to pass more targeted job-creating legislation this year … [They] are considering a two-pronged approach in the bill: Bolstering safety-net programs like COBRA and food stamps, while also funding infrastructure projects.”
Among the ideas under consideration, according to National Economic Council director Lawrence Summers and others:
• Extending unemployment insurance benefits beyond this year. Earlier extensions already have made some people eligible for a record 99 weeks. Giving money to jobless Americans spurs consumer spending, which saves or creates jobs.
• Sending more aid to cash-strapped state and local governments. States are writing their 2010-11 budgets, and federal aid included in February’s stimulus package runs out in 2010. Without another bailout, they might be forced to cut spending or raise taxes, hindering the recovery.
• Creating tax incentives, such as for small businesses or manufacturers. During last year’s campaign, Obama proposed a tax credit for each new job created.
• Financing more infrastructure and energy efficiency projects. Obama favors an “infrastructure bank” with public and private money, which he promoted in last year’s campaign and this year’s budget.
“The premise of our policy is that while there is a public sector responsibility for employment, long-term economic recovery depends on private sector growth,” Summers says.
Labor leaders such as AFL-CIO President Richard Trumka want the government to create jobs. “Doing nothing is not an option,” Trumka says. “If we don’t put people back to work, the deficit will get higher.”
Republicans are promoting their own agenda: slashing payroll taxes, limiting regulations and reducing the deficit through spending cuts.
Loss of transportation jobs assured if no second stimulus. Time: “Another factor driving the calls for a second stimulus is that nearly 90% of the original stimulus money targeted for infrastructure projects will have been spent by May, and the Highway Trust Fund could be running shortfall by in June, says House Transportation Committee Chairman James Oberstar. “[It] means, unless we do something about it, we’ll start losing jobs instead of creating jobs in the construction sector,” says Oberstar. For that reason, one part of a proposed jobs bill would subsidize 30 states unlikely to meet their annual highway commitments next year and would top off the Highway Trust Fund. Pelosi last summer had pushed for a $600 billion six-year highway re-authorization bill, but the Administration and Senate balked at raising gas taxes, which is how the bill is traditionally paid for. Instead, Oberstar and House Appropriations Committee Chairman Dave Obey have suggested a smaller, band-aid program of $100 billion drawn from general treasury funds, though Oberstar has also suggested using some of the leftover bank bailout money. He still hasn’t heard anything back on either proposal.”
The Nation’s Katrina vanden Heuvel warns against “deficit hawk hysteria”: “…rather, it’s a time for smart thinking to rebuild this country which has been pillaged and looted for these last eight-plus years, resulting in a massive public investment deficit. We need to create jobs, and in turn increase consumer demand, raise revenues, and grow our way out of this jobless recovery. The private sector can’t get that job done at this moment–the government must fill the void.”
W. Post’s Harold Meyerson quantifies how much the stimulus was undercut by lack of state aid: “A recent report from the Center on Budget and Policy Priorities assesses the 2009-10 budget shortfall for the 50 state governments at a stunning $350 billion … assuming, conservatively, that states and localities are making cuts and raising taxes roughly at the level of $300 billion, net government spending to boost the economy this year and next is only $341 billion. That means our federal stimulus package isn’t the 2.6 percent of gross domestic product that was claimed but more like 1 percent. In the spring, you may recall, the administration chastised other nations for stimulus packages that it thought were too small — by which it meant stimulus packages that came to around 1 percent of those nations’ respective GDP .”
NYT looks at offshoring of green jobs: “Growth in clean energy industries and in green jobs has been considerably slower and bumpier than anticipated, industry experts say. But rather than giving up on its green jobs mantra, the White House will rededicate itself to promoting green industries at the jobs meeting … some green-industry companies have been shedding jobs in the United States, and in some cases moving them to China … Rhone Resch, president of the Solar Energy Industries Association, said there would be more such investment in the United States if it had incentives like those in China, Malaysia or South Korea. ‘In China, 80 percent of the entire cost of a factory and worker training is paid for by the government,’ Mr. Resch said. ‘Malaysia will give you a 10- or 20-year tax holiday.’ He praised Mr. Obama’s $2.3 billion tax credit program, but said its 30 percent credits were not nearly as generous as China’s.”
Hold On Bernanke
Sen. Sanders places hold on Bernanke nomination for another term as Fed Chair. W. Post: “Sanders’s action means that Senate Majority Leader Harry M. Reid (D-Nev.) will have to win the assent of 60 senators before a vote can be taken on the nomination. Typically, 51 votes are needed to confirm.
Left-right coalition forms to back Sanders. Politico: “Jumping on the news of Sanders’ hold, Campaign for America’s Future, a progressive group, blasted out a copy of a letter sent to senators Wednesday urging them to delay Bernanke’s confirmation until they pass audit-the-Fed legislation. The signatories make up a mind-bending group: on the right, conservative kingpin Grover Nordquist and Phyllis Schlafly; on the left, liberal economist Dean Baker and Jane Hamsher – founder of the liberal Firedoglake blog….”
Bloomberg previews Bernanke Senate hearing today: “Ben S. Bernanke, who led the most expansive use of the Federal Reserve’s powers in its 96-year history, may fight efforts to curtail its authority and independence during his confirmation hearing today.”
Rep. Barney Frank does not expect Fed audit language to change before full House vote. The Hill quotes: “Absent some change in the way the public is reacting, I don’t see any changes.”
Financial reform bill clears House cmte, over Black Caucus boycott. Politico: “The bill passed easily, but Waters suggested the CBC’s 43 members could vote with the GOP to scuttle a variety of Democratic bills if Obama and Emanuel don’t address what she thinks is a lack of understanding of the CBC’s wide-ranging goals of reducing urban unemployment, home foreclosures and bank failures … Until Wednesday, Waters and other CBC members had been reluctant to spell out their Obama wish list, with Financial Services Committee members refusing even to say why they skipped the vote. The caucus released a 2½-page handout to answer those questions on Wednesday, with an emphasis on addressing the economic problems of members’ districts, ranging from the crisis engulfing minority-owned auto dealerships and newspapers to the need for more-targeted foreclosure mitigation programs.” NYT focuses on lobbying efforts of hard-hit Inner City Broadcasting.
House unanimously passes expanded TARP oversight. CQ: “The bill would require the Treasury Department, which administers the program, to provide continuous data on money spent under the bailout to the TARP special inspector general, the comptroller general and the Congressional Oversight Panel. The Treasury Department would have to present the funding updates through a standardized electronic database.”
Bank of American to repay TARP. NYT: “Despite continuing problems with its loans to struggling homeowners and consumers, Bank of America plans to return the $45 billion in aid that it received at the height of the financial panic — a step that, only months ago, would have been almost unimaginable. But like many other big banks, Bank of America is once again making money, in large part through Wall Street businesses like trading stocks and bonds, rather than by making loans.
Geithner toughens up on derivatives reform. The Stash: “…the so-called “end-user exemption” [is one] which big banks have been angling to use as a kind of shield from the looming regulations … Geithner was saying, in effect, not so fast–we’re happy to exempt people who should legitimately be exempted, but we don’t want to let big banks off the hook … The big Wall Street firms were hoping to make a final stand in the Senate Agriculture Committee (which has partial jurisdiction over the issue for convoluted reasons), and Geithner’s comments probably tilt the field against them a bit further.”
Goldman Sachs seeks to defend salaries. WSJ: “[Goldman Sachs] has begun meeting with major investors in an effort to ward off an investor backlash over its record compensation pool … Winning shareholder support for its compensation-and-benefit pool is critical for Goldman executives. While the public uproar over pay has hurt the firm’s reputation, shareholders are the actual owners of the firm and the only ones with voting power to change the compensation structure.”
Health Care Obstruction
Dems prepare to end GOP obstruction tactics. Bloomberg: “Senate Democrats threatened to bypass Republican amendments to hasten debate over U.S. health-care legislation as delays jeopardized the goal of passage this year … Democrats may act to remove the opposition party’s amendments from floor consideration by tabling them, said Senator Dick Durbin of Illinois. The Hill adds: “Without an agreement from the minority, Democrats would either have to file cloture on each amendment, a process that takes days and requires 60 votes, or move to table the amendments, a procedural move that requires only 51 votes but that traditionally has been viewed by senators as harsh.”
Yet another poll finds strong support for public option among independents. Politico: “…an eye-popping 57 percent of independents favor a public option — with 60 percent of all those polled saying they favored the controversial provision.”
New report finds insurance tax will shift more health care costs onto workers. Kaiser Health News: “Two-thirds of employers would raise deductibles, change insurers or scale back coverage to avoid the so-called “Cadillac tax” on high-cost benefits proposed in the Senate Democrats’ health care bill, according to a survey to be released Thursday by consulting firm Mercer … Their actions would tend to shift more costs to workers … [Mercer's Beth Umland said,] ‘This comes down to the essential question: When you shift more costs to employees, do they cut back on unnecessary care or on needed care? Or do they just pay more? The answer is probably all three.’”
USA Today edit board slams Medicare hypocrisy from Senate conservatives: “…McCain and other Republicans haven’t always felt so protective of Grandma. McCain suggested even larger Medicare cuts during his presidential campaign last year, and he and some other GOP critics voted for cuts more than twice as big when Congress approved the Balanced Budget Act in 1997.” HuffPost report McCain recording robocalls to spread misinformation.
AARP backs Medicare savings. CNN: “…AARP says the measure ‘does not reduce any guaranteed Medicare benefits’ while it makes needed reforms to the program that is predicted to become insolvent within a decade.”
The Treatment’s Suzy Khimm speculates Sen. Collins is in play, and Nelson and Lieberman may not be needed: “…there are signs of what she’s likely to put on the table. Under the Senate bill, hospitals with the greatest hospital-acquired infection rate would be subject to a 1% penalty under Medicare beginning in 2015; in addition to raising the penalty rate, Collins would reportedly propose moving start date two years earlier. The small-business tax credit is currently limited to firms with less than 25 employees and average wages of less than $40,000. Like fellow centrists Mary Landrieu and Olympia Snowe, Collins seems inclined to support expanding the credit to larger firms and raising the income threshold … if the Senate leadership could bring them all along, it might not be necessary to get Lieberman or Ben Nelson, who would end up losing considerable leverage.”
Kerry has hope for Copenhagen. Politico: “Sen. John Kerry said he was confident that international climate talks in Copenhagen would result in a political agreement – even without a Senate climate bill … Kerry also implied that a bipartisan group attempting to write a climate bill is unlikely to release a framework of their proposal before the talks begin this weekend. The group, which includes Kerry, Sens. Lindsey Graham, (R-S.C.), and Joe Lieberman, (I-Conn.), plans to meet early next week with Senate Majority Leader Harry Reid and key Senate committee chairman to discuss an outline of their legislation that will be released later in the conference.”
UN pushes for deeper emission cuts. McClatchy: “[UN climate chief Yvo] De Boer said one of the main obstacles in the talks was that the emissions reductions offered by rich nations as a group ‘are not yet where science says they need to be if we’re going to avoid the worst impacts of climate change.’”
US to help India create EPA. Treehugger: “In an agreement that largely flew under the radar during Obama’s trip to Asia–so much so that Clean Technica has called it a ‘secret deal’–the US and India will cooperate on a huge swath of green measures designed to reduce carbon emissions and stimulate clean energy development. Those measures include instituting a joint US/India research project for renewable energy, US assistance mapping the entire Indian subcontinent for solar potential, and that the Obama administration will help India set up its National Environmental Protection Authority–its version of the EPA.”
UN suspends approval of Chinese wind farms. AP: “China has received millions of dollars through the Clean Development Mechanism (CDM), which allows industrialized economies to meet commitments to cut greenhouse gas emissions by paying developing countries to curb their own instead. But environmentalists say some Chinese wind and hydropower projects improperly receive foreign money without showing they would not be built anyway … Now, the UN body that oversees carbon credit trading has suspended approval of some Chinese wind farms.” Green Energy Reporter adds: “This kind of manipulation is exactly what countries looking to build a viable framework for carbon reduction should be afraid of.”