Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.
Few Lawmakers Embracing Spending Freeze In Advance of SOTU
The Hill reports cool reception to Obama spending plan: “His liberal base warned Tuesday the three-year cap on most non-defense discretionary spending could hamper an economic recovery. Conservatives dismissed it as insufficient and just for show. Even the bipartisan group of lawmakers who praised Obama’s plan, most of them centrists, questioned whether he has the fortitude to veto plump spending bills…”
What would Obama cut? CBPP’s James Horney speculates in W. Post: “Although the proposals were rejected by Congress, last year’s budget would have curbed Commerce Department subsidies to promote specific industries and to bring products to market, while increasing taxes on profits that corporations earn overseas. Horney predicted that the administration will widen its efforts to rein in federal help for corporations.”
Ezra Klein unimpressed with WH defense: “Over the three years that the freeze is supposed to last, that’s more than $100 billion that won’t be spent. That’s a lot of money … then they can’t also be telling people that this freeze will allow them to do everything worth doing, as if there was no freeze at all.”
Writing at HuffPo, pollster Celinda Lake sums up the lessons of Massachusetts ahead of the SOTU: “Scott Brown won on our message and it is time to take it back … Pass financial reforms to win back the angry independents … Democrats must pass and define health care reform…”
OurFuture.org’s Robert Borosage dubs Obama’s new program “Duck and Cover”: “His clarity and vision can embolden the meek, calm the flighty, and inspire the young. Yet now, with his young administration facing its first significant political challenge, the president apparently plans in his State of the Union address to offer not vision but distraction. Instead of taking off the gloves and challenging the lies and distortions of his opponents, he is choosing to duck and cover — which will only add to the public’s confusion and his party’s disarray.”
Senators Working To Find Consensus On Jobs Bill
CQ on the direction Senate talks are headed on the jobs bill: “One idea the senators may be nearing consensus on is a tax credit for companies that hire new workers … Democrats also may propose additional spending on transportation, schools, energy-efficient retrofitting of homes and businesses, and state assistance to prevent layoffs of teachers.”
Politico plays up where Senators are divided — how big a jobs bill should be, and whether to use paid back TARP funds or tax credits. Politico: “A leaked proposal [Sens. Durbin and Dorgan] drafted and floated last week would take $75 billion from the Troubled Asset Relief Program to bolster four designated job categories — jobs that ‘promote small business,’ that ‘strengthen infrastructure,’ that ‘improve energy efficiency’ and that ‘provide public service.’ … Sen. Kent Conrad … opposes using TARP money. Citing talks he had with the Congressional Budget Office, Conrad said he wants tax credits and other incentives for small businesses to hire.”
W. Post reports any Senate jobs bill will certainly be smaller than what the House passed last month: “…sources said the current version would cost just over $80 billion. Though that number may change as the process moves forward, it is clear Senate Democrats have no intention of moving a jobs package as large as the $154 billion measure the House passed in December on a narrow, party-line vote. The House measure included money to extend unemployment benefits and COBRA health insurance coverage, items that aren’t in the draft Senate bill but may move in the chamber separately. ‘There is “big bill fatigue” in the Senate right now,’ said a Senate Democratic aide.”
NYT edit board slaps Congress, warns against going small on jobs: “There are more than six jobless workers for every job opening .. If he leaves it up to Congress, lawmakers are unlikely to deliver. Even the $154 billion jobs bill passed by the House in December is only a starting point for the repair and recovery work that needs to be done.”
W. Post’s Harold Meyerson argues big jobs bill politically necessary: “The greatest decline in Democratic support has come from working-class voters who are bearing the brunt of the recession … Some of that slide can be attributed to concern over the deficit, but most polls indicate that concern over unemployment is far greater.”
“In one month, one million Americans are slated to lose their unemployment insurance. Millions more will follow,” reminds PR Watch’s Mary Bottari.
NYT notes plethora of proposals are circulating, debate continues on power of tax credits: “A recent Congressional Budget Office report estimated that a payroll tax cut for new hires would most likely have a bigger bang per buck … than other major policies on the table. Concerns remain, however, about whether employers might manipulate the system — for example, by firing existing workers only to rehire them at a discount, or replacing one full-time worker with two part-time workers.”
CBO report projecting several years of high unemployment. The Hill: “The unemployment rate will average more than 10 percent for the first half of this year and then decline at a slower pace than in past recoveries, the CBO said. The jobless rate won’t return to a sustainable level of 5 percent until 2014, the budget office predicted.”
Populist Caucus founder Rep. Bruce Braley releases “Blueprint for Recovery” in Politico oped: “The Bonus Tax Act would generate billions of dollars of new revenue that would be directed exclusively to reward small businesses that are investing in new jobs … reinstate a tiny transaction fee on speculative stock transactions by Wall Street traders, creating $150 billion annually … establish a wholly owned government corporation to prioritize infrastructure improvement projects … ensure that taxpayer money is used to purchase American-made products…”
Sen. Tom Harkin pessimistic on EFCA after Mass. loss. Politico: “Asked if EFCA was dead for the year, Sen. Tom Harkin (D-Iowa), the bill’s sponsor, hesitated for several seconds, saying, ‘Well, it’s, it’s, it’s there. But it doesn’t look too good.’ He added: ‘I’m not going to give up on it. I’ll never give up on it.’”
Debt Commission Defeated In Senate, WH Version Coming Up
Conrad-Gregg commission falls short of needed 60 votes. LAT: “The Senate vote was 53 to 46, seven short of the 60 needed for approval. The vote was a rare display of bipartisanship: Supporting the proposal were 36 Democrats, 16 Republicans and one independent. The opposition was a coalition of Republicans who worried that the panel would give new impetus to tax hikes and Democrats concerned that it would force cuts in Medicare and other prized programs. Others opposed the proposal because Congress would have been forced to vote on the panel’s recommendations without alteration.”
CQ reports deal not yet struck for executive branch debt commission: “More than 12 Senate Democratic moderates, led by Budget Chairman Kent Conrad of North Dakota, are open to Obama’s plan but are not satisfied that proposals from a commission will receive a straight up-or-down vote by Congress … At stake is whether Democratic leaders can round up the votes to raise the debt limit — the cap on how much the government can borrow — by enough to last into next year, so that Democrats will not have to take any more of these politically painful votes before the midterm elections.”
Commission may embrace 3% of GDP target. Politico: One idea discussed is to give the commission the target of bringing the deficit down to 3 percent of GDP by 2015 … The latest CBO numbers Tuesday, for example, suggest that the deficit could fall to 2.6 percent of GDP in 2015 just by sitting back and letting the tax provisions run out. But if many are preserved, the gap would be at least $365 billion wider in that year alone, and the deficit close to 5 percent of GDP …”
Experts differ on how much debt is too much. James Galbraith downplays debt concern in National Journal forum: “Deficits promote growth. Debt finances it. The consequence of too much is not a ‘drag on growth,’ but inflation. But we are very far from that, since we’re very far from full employment. We’d be lucky to get closer than we are.”
2010 deficit expected to go down, but CBO chief calls long-term fiscal outlook “daunting,” reports AFP.
Bernanke Vote Tomorrow
Sen. Reid schedules cloture vote, signaling support for Bernanke. NYT: “It is possible that some senators may vote to close debate but then vote against the confirmation, which requires a simple majority … Even so, criticism of Mr. Bernanke persisted on Tuesday. Senator Tom Harkin, Democrat of Iowa, told The Des Moines Register that he would vote against Mr. Bernanke.”
Ezra Klein slaps Senate for supermajority hypocrisy: “…people should watch the list that votes no on confirmation but yes on procedure very carefully. They no longer have the credibility to argue that procedural votes and actual votes are indistinguishable.”
OurFuture.org’s Borosage chastises Dems for shepherding nomination: “What’s amazing is that Democrats will provide more support than Republicans for a Republican who served in the Bush White House, was appointed to his current job by a failed president, has the full support of the Chamber of Commerce and Wall Street, and championed the market fundamentalism and financial deregulation that led to the financial collapse.”
Robert Kuttner & Yves Smith makes case against Bernanke in nytimes.com debate, while Mark Thoma defends Bernanke as someone who can rein in the “hawks” who would raise interest rates.
Geithner To Congress As AIG Payouts Under Scrutiny
Two Fed governors privately raised concerns about allowing AIG to transfer $30 billion in bailout cash to trading partners like Goldman Sachs. NYT: “Of particular interest to many in Congress is why those negotiating on behalf of the taxpayers did not push the banks to make concessions like returning the collateral to A.I.G. or accepting less than full value for their contracts with the insurer.”
Geithner to deny role in keeping secret AIG payouts. Politico: “Geithner plans to tell the committee in testimony that he had stepped aside from day-to-day operations of the New York Fed to join the Obama administration.”
Geithner to testify in Congress today that AIG bailout was necessary to avoid collapse. Bloomberg quotes from prepared remarks: “‘We did not act to protect the financial interests of individual institutions. We did not act to help foreign banks. We acted because the consequences of AIG failing at that time, in those circumstances, would have been catastrophic for our economy and for American families and businesses.’ … As of Sept. 30, the Treasury had invested $43 billion in AIG and expected to recoup $13 billion of that investment.”
Former Treasury Sec. Hank Paulson and NY Fed chief Stephen Friedman will testify today as well, per W. Post.
Wall Street afraid of a fight? Bloomberg on bank lobby strategy: “While they are still plotting tactics, one thing has become clear: The banks don’t want to go to war with the commander-in-chief … said [Financial Services Forum's] Rob Nichols … ‘We just want to sit at the table and have a productive conversation about the kinds of reforms needed to address the real causes of the recent crisis.’”
FT’s Martin Wolf concludes President Obama’s Glass-Steagall-style plan doesn’t go far enough: “…the vast parts of the financial system that evolved, particularly in the US, partly in order to get round capital requirements designed to make banks safer, are of vital importance … It is, alas, not the case that the US government can credibly promise to make banks safer, while leaving this vast forest of shadow institutions to the market.”
Health Care In The Waiting Room
No timeline for health care as right-leaning Dems question reconciliation strategy. Politico: “Senate Majority Leader Harry Reid (D-Nev.) told reporters, ‘We’re not on health care now.’ As for the schedule to get it done, he said, ‘there is no rush.’ [House Maj. Leader Steny] Hoyer said Democrats don’t expect a decision on how to proceed before next week, but other lawmakers held out the possibility it could stretch until Congress goes on a break Feb. 1 … [To pass changes under Senate budget rules] Reid could lose as many as nine members — and eight senators said Tuesday they oppose or have strong reservations about muscling the bill through Congress in that fashion.”
Right-leaning Dems talking with GOP Sens. Snowe and Collins. The Hill: “President Barack Obama and Democratic leaders, however, have made no attempt to reach out to the two centrist Republicans, despite spending months last year heavily courting Snowe. Instead they have focused their attention on persuading the House to pass the Senate bill, along with a secondary measure that would address concerns House Democrats have with the Senate bill … Skepticism over the likelihood of passing a second healthcare bill under reconciliation has prompted Democratic centrists to explore an alternative strategy that would rely on Republican support. Lieberman predicted Tuesday that White House officials would soon contact Snowe, Collins and other Republicans.”
The Treatment’s Jonathan Cohn charges right-leaning Dems with amnesia: “Perhaps Bayh has forgotten, but the Senate already passed health care reform on a strictly partisan basis. It happened in December … [And] that wasn’t because the Democrats failed to reach out to the Republicans. It was because the Republicans rebuffed every overture, declining to support the bill despite numerous Democratic concessions.”
House progressives push passing public option through reconciliation. HuffPost: “Reps. Chellie Pingree (D-Maine) and Jared Polis (D-Colo.), circulated a letter, looking for signatures, that will be delivered to Senate Majority Leader Harry Reid (D-Nev.) on Thursday … Pingree told HuffPost that the pair’s proposal was met with excitement from some quarters and skepticism from others.”
Rep. Hoyer suggests piecemeal strategy possible. Wonk Room quotes: “It is difficult to take small pieces and accomplish the objective that you want to accomplish. But it is not impossible, and insurance reforms are popular…”
President To Back Carbon Cap In SOTU
NYT piece speculates “cap-and-trade” is dead, but buries the lede, Obama sticking with it: “[A] White House official … said President Obama would restate his commitment to a bill that addresses global warming … The official said the White House would support legislation that provided incentives for oil and gas drilling and for construction of nuclear plants, as well as provisions that helped industries that use a lot of energy and were vulnerable to foreign competitors. But the president will also insist that any legislation also contain some form of cap on emissions of heat-trapping gases to make good on his pledge to reduce global warming pollution by 17 percent over 2005 levels by 2020.”
NYT quotes Sen. Lindsey Graham pulling plug on cap-and-trade — “What is dead is some massive cap-and-trade system that regulates carbon in a fashion that drives up energy costs” — BUT overlooks Graham quote from last week’s ClimateWire: “Graham … said he believes that what will ultimately emerge from the Senate will be a combination of both the cap-and-trade and cap-and-dividend approaches. ‘I think you’re probably going to have a hybrid system,’ Graham said.”
Bill Clinton lobbying WH for green jobs loan program. Salon’s Joe Conason: “For several months, Clinton has been lobbying administration officials, notably including Vice President Joe Biden, to create a new energy efficiency loan guarantee program that he says could result in well over a hundred billion dollars in new investment — and employ more than a million workers to install green retrofits on commercial, institutional and residential buildings.”
Sen. Murkowski pulls back, won’t push anti-EPA bill until March, reports Clean Skies News.
Countering Corporate Influence, Foreign and Domestic
Campaign finance expert David Donnelly backs public fund matching of small donations to counter corporate influence in OurFuture.org video interview.
Retired justice Sandra Day O’Conner livid at activist ruling. NYT: “I step away for a couple of years and there’s no telling what’s going to happen.”