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.
Lobbyists Aim To Kill Bank Reforms In Backroom
Senate votes on amendments begin today. Reuters: “Democratic leaders had not yet determined as of late Monday whether amendments will need 50 or 60 votes to pass … votes would be handled on a case-by-case basis for the time being … The very first amendment is expected from Democratic Senator Barbara Boxer. She wants to add language saying that no taxpayer funds could be used again to bail out financial institutions.” Expect 60 vote-thresholds for controversial amendments reports Politico.
Bank lobbyists whine to W. Post that Senate bill might actually be tough on them, beg for backroom deal: ” In a twist of fate, some say they’ll be looking to Rep. Barney Frank (D-Mass.), chief architect of the House bill and a sharp critic of banking excesses, to restore what they call rational discussion … They had expected the most vexing provisions in the bill sponsored by Sen. Christopher J. Dodd (D-Conn.), chairman of the banking committee, to be scratched by now, or at least scaled back … ‘They’ve got to get this thing off the [Senate] floor and into a reasonable, behind the scenes’ discussion, said one lobbyist.”
Lobbyists target Brown-Kaufman amendment to limit bank size. CQ: “Several industry sources, who spoke on condition of anonymity, said financial institutions are particularly concerned about an amendment offered by Democrats Sherrod Brown of Ohio and Ted Kaufman of Delaware that would bar banks from holding liabilities — other than deposits — that exceed 2 percent of the nation’s GDP .” Click here to tell your Senators to support Brown-Kaufman.
Baseline Scenario’s Simon Johnson hears that Brown-Kaufman will not get a vote: “The Senate leadership – on both sides of the aisle – has apparently decided that they do not want to give senators (and the public) the opportunity to focus their attention on this key issue. Instead, they would prefer to keep the ‘debate’, in terms of votes, on issues less likely to infuriate powerful banks.”
Conservative Sen. Jim Bunning says he backs limiting bank size, but hasn’t yet backed Brown-Kaufman notes Wonk Room’s Pat Garofalo.
Amendment to audit the Fed may have majority support, but WH working to block it. Vote could happen as early as today. HuffPost: “‘I think momentum is with us. But I’ve gotta tell you, that on this amendment, you’re taking on all of Wall Street, you’re taking on the Fed, obviously, and unfortunately you seem to be taking on the White House, as well. And that’s a tough group to beat,’ said [Sen. Bernie] Sanders.” Politico reports: “Sanders’ amendment has 15 co-sponsors – but 59 senators voted for a version of it last year during the budget resolution debate.”
Naked Capitalism on importance of auditing the Fed: “…contrary to the Fed’s claims of independence, it has been operating as an extra-legal off balance sheet entity of the Treasury, circumventing normal Constitutionally-stipulated budget processes. And rather than make adjustments in its practices to reflect its enlarged and now overtly political role, the Fed has instead been engaging in cynical, blatant misrepresentation, giving lip service to the idea of greater transparency in pubic, while fighting disclosure tooth and nail.”
Once again, the Democrats have a reform mesure that’s popular, solves the biggest problem at hand, and that they don’t have the political will to pass. Time’s Jay Newton-Small on derivatives reform: “…behind the scenes, most Democrats acknowledge that it’s not feasible to pass a bill barring banks from the derivatives business. The problem is: the provision is in the bill, how do Dems get it out? … Just about no one wants to be the person to introduce an amendment to strip the provision out…”
Opponents of derivatives firewall, including the White House, claim it would prevent transparency. W. Post: “‘You’d rather make sure that it’s regulated,’ said one administration official, who spoke on the condition of anonymity because the matter has not been resolved. ‘The whole principle of [regulatory] reform is not to push things into dark corners.’ … [Sen. Blanche] Lincoln has stood by her proposal … ‘It ensures banks get back to the business of banking,’ said Courtney Rowe, Lincoln’s spokeswoman.”
White House blog lists “The 10 Most Wanted Lobbyist Loopholes”: “…Letting Non-Banks Play by a Weaker Set of Rules … Preventing States from Protecting Their Own Citizens … Stretching the Derivatives ‘End-User’ Exemption into a Hedge Fund Loophole …”
Want to read a transcript of Wall Street’s regulators failing? Ezra Klein:: “Presented with evidence that something is going awry in the economy, Greenspan and Co. nitpick, divert, speculate and finally just change the subject … this is why you need to be very careful with the idea that regulation plus information is sufficient. We had regulators and they had information. And it proved totally insufficient. ”
HuffPost’s Ryan Grim read the transcript, and says Greenspan wanted to keep the Fed’s debate about the housing bubble under wraps: “As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn’t lose control of the debate to people less well-informed than themselves”
Reuters’ Felix Salmon defends Greenspan: “You can think that Greenspan is making a good point or you can disagree with him, but the fact is that he was not talking about the housing bubble – or about any specific economic discussions. This was a meta-discussion about how much to discuss discussions.”
Bank tax to repay TARP funds has momentum. Reuters: “The bank tax is not part of the Dodd bill, but analysts said chances of it being approved would be boosted by deletion of the $50 billion liquidation fund targeted by Republicans.”
Will BP Pay?
Law capping oil spill liability complicates WH call to make BP pay. Politico: “…after journalists pointed out that federal law sets a $75 million cap for economic damages in offshore spills, the White House issued a more nuanced statement that said the company is on the hook for cleanup costs but not necessarily all damages incurred by private individuals or businesses … The main federal law governing the spill response the Oil Pollution Act of 1990 was passed in the wake of the devastating Exxon Valdez spill in Alaska. While it does contain a $75 million limit for offshore spills, that limit does not apply to suits brought under state law. And … the limit doesn’t apply if BP acted in a grossly negligent fashion or wasn’t abiding by federal rules at the time the explosion and leak began last month.”
Senate bill would increase BP liability. W. Post: “…a group of Democratic senators including Robert Menendez (N.J.) and Bill Nelson (Fla.) introduced legislation Monday to raise oil companies’ liability limit retroactively to $10 billion.”
Digby lambastes $75M limit:: “That fund is a drop in the bucket. The lost revenue and damages are going to add up to much more than a billion. And the fishermen and other actual humans (as opposed to “corporate persons”) are not going to be able to sue BP for much (75 million is chump change) — that drop in the bucket fund is supposed to cover all those costs and more. And when it’s gone, either the taxpayers pick up the rest of the tab or that’s it.”
Too early to know extent of damage, reports NYT: “… its ultimate impact will depend on a long list of interlinked variables, including the weather, ocean currents, the properties of the oil involved and the success or failure of the frantic efforts to stanch the flow and remediate its effects [though] much of the damage was already taking place far offshore and out of sight of surveillance aircraft and research vessels … as much as $1.6 billion of annual economic activity and services … could be at risk … But much of this damage could be avoided if the various tactics employed by BP and government technicians pay off in the coming days.”
Economic damage could be widespread. AP: “If you drink coffee, eat shrimp, like bananas or plan to buy a new set of tires, you could end up paying more because of the disaster.”
Enviros call for drilling expansion to be removed from Senate climate compromise. Mother Jones’ Kate Sheppard: “The letter—signed by the Sierra Club, Natural Resources Defense Council, League of Conservation Voters, Friends of the Earth, and Environment America, among others—marks a shift in the stance of some green groups, which were initially willing to accept limited drilling as part of a broader climate and energy legislation … Notably absent from the letter were several major enviro groups, including the Environmental Defense Fund and the National Wildlife Federation.”
Time’s Bryan Walsh says next steps for White House on climate compromise unclear: “It is not clear whether the accident might cause Obama to rule out expanded drilling altogether … It’s also worth remembering that expanded drilling was offered in part to sweeten climate and energy legislation for skeptical conservatives …”
Politico asserts loss of drilling expansion would doom climate compromise: “If Graham holds firm, and the drilling provision is removed, Reid and Kerry would not be able to get the 60 votes needed to overcome a Republican filibuster.”
Virginia’s Dem senators, swing votes for any climate bill, take a step back from backing drilling, but don’t renounce. W. Post: “Sen. Mark Warner said it was ‘appropriate’ for Obama to delay offshore projects until safeguards are in place … Sen. James Webb said ‘the facts must be ascertained to determine how the disaster off the Gulf Coast could have been prevented’ before drilling takes place…”
Sen. Mary Landrieu sees opportunity to push revenue-sharing with states of offshore drilling revenue. CQ: “‘These are federal resources spilling … It’s 100 percent federal oil from federal water. But it’s 100 percent of Louisiana’s coast at risk.’ … Revenue sharing is a hot-button issue in the drilling debate. Environmentalists oppose it because they see sharing royalties as an enticement…”
Sierra Club’s Carl Pope challenges Sen. Graham, in HuffPost:: “Senator Graham is arguing that after the Challenger disaster America went back into space, so after Deepwater Horizon we should keep opening up new areas to oil drilling. That analogy is simply wrong. Imagine that the Challenger tragedy, in addition to causing the deaths of astronauts, had put at risk the economic base of a significant part of the United States … Would we have continued launching Space Shuttles?”
Sen. Bill Nelson urges examination by Interior of industry influence on safety regs. Salon: …Nelson wants to know if the industry has resisted fitting underwater wells with a device that remotely activates ‘blowout preventers’ — shut-off valves that, in the event of an emergency, seal a wellhead and prevent oil gushers.”
Joe Conason argues Norway’s state-owned offshore drilling operation is safer: “…Statoil rigs in the North Sea are required by law to maintain special ‘acoustic switches’ that shut down operations completely (and remotely) in case of a blowout or explosion. The US Mines and Minerals Service, under the industry-friendly Bush administration, decided that rigs operating in American waters need not install those switches because they are ‘very costly.’ At $500,000 per switch, they now look like an enormous bargain…”
Ohio State dean Gregory Washington says the heartland is ready for energy independence, thanks to higher gas prices, in Grist:: “…rising fuel prices represent good news for American manufacturing. At some point the cost of bunker fuel … surpasses the benefit of using overseas labor. And as automation makes processes less labor intensive, energy costs become an even greater factor …”
W. Post’s Dana Milbank mocks Gulf coast conservatives who suddenly see value of government: “It may have taken an ecological disaster, but the gulf-state conservatives’ newfound respect for the powers and purse of the federal government is a timely reminder for them. As conservatives in Washington complain about excessive federal spending, the ones who would suffer the most from spending cuts are their own constituents.”
Glimmers Of Hope For Immigration Reform
Senate immigration proposal includes commission to set levels of temporary workers each year. CQ: “…the new framework would allow the level to vary according to economic conditions … it is not clear whether holders of the proposed H-2C visa would be able to switch jobs … Nor is the extent of labor protections they would be granted while working here spelled out …”
House Dems preprare for Senate immigration bill, just in case. The Hill: “Democrats at the subcommittee and full committee level have been staking their claim in the debate, arguing they will be able to hit the ground running if the Senate clears a bill … [Rep. Henry] Cuellar, a co-sponsor of the Gutierrez bill, said time is short [but] shook his head at the prospect of moving such a measure within the next several weeks.”
Arizona’s anti-immigrant law may increase crime. HuffPost’s Afton Branche:: “As the Immigration Policy Center points out, Arizona’s crime rates have been steadily falling in recent years despite increased flows of undocumented immigration … law enforcement officials from across the country warn that SB
1070 may have the opposite effect, and compromise public safety by diverting scarce police resources away from targeting criminals…”
W. Post’s Eugene Robinson debunks “secure the border first” talking point: “Border crossings by undocumented immigrants have declined sharply over the past decade … Some of the decrease might be the result of tougher border enforcement, but the weakness of the U.S. economy also could be a factor … crime rates along the border have been ‘essentially flat for the past decade.’”
Andy Stern Floats Social Security Reforms
WH debt commission member Andy Stern proposes Social Security changes, reports TPMDC: “In a letter to President Obama and fellow commission members … Stern takes the somewhat surprising position that entitlement programs including Social Security should be on the table–but only if changes enhance retirement security for again Americans … ‘…all entitlement programs should be on the table … We should include tax entitlements as part of that conversation … We should include as part of our agenda ideas for strengthening the private parts of the retirement security system, reviewing both adequacy and solvency of the Social Security system, and the possibility of add-on universal private accounts.’”
Health Care Implementation Update
$5B to mitigate cost to businesses for ending tax exemption. Bloomberg: “Companies will get $5 billion from the U.S. government to help pay for retiree health insurance, a benefit of the health-care overhaul that will offset some of the millions of dollars in costs employers such as Caterpillar Inc. and Deere & Co. announced after the law’s signing … the government will reimburse businesses for 80 percent of early retirees’ health care expenses…”
Where Are The Jobs?
Black Caucus struggles to securing funding for youth jobs. W. Post: “…all the Congressional Black Caucus wants is $1.3 billion. But after six months of haggling over the funding for a youth jobs program, the group is running out of time … as deficit concerns rise in both parties, the black lawmakers have had little success.”
People still don’t know about Obama’s middle-class tax cuts, but Mark Thoma says that’s Obama’s fault: “There is a theory that says people will spend more of their tax cuts if they are unaware that they have happened, so the administration decided not to publicize the tax cut portion of the stimulus bill … My view is that the attempt to hide the tax cut from consumers wasn’t needed…”
Whose Side Are We On?
NYT explores Obama’s balancing act between support and challenging business interests: “In swearing to recover every last dime the government spends on BP’s spill, Mr. Obama is reflecting the pain of bailout-weary taxpayers. And fighting in recent weeks for Senate passage of a bill tightening regulation of the financial system, he has demanded a new overseer to protect consumers — over banks’ vehement opposition — even as he has sought business support for the legislation by arguing that he has been warding off much more stringent regulations from his party’s left.”
Mike Lux says that we, and our government, have a decision to make — side with Wall Street traders or hardworking immigrants: “Conservatives believe that if we just let Fabulous Fab do his
fabulous thing, all our economic problems will be solved. He is a true hero of America for them, and God forbid if we tax him or regulate him or prosecute him for fraud. Some of us, though, believe that government’s better role is to be on the side of the homeowners who lost their homes and the workers who lost their jobs because of Fab’s
greed. And, yes, it should be on the side of that immigrant worker in Florida who lost everything he had in Mexico because of what we did on NAFTA, and now is here working 14 hours a day for $50 a day (if he’s lucky).”
Time to bring back regulation, says Robert Reich: “When shareholders demand the highest returns possible and executive pay is linked to stock performance, many companies will do whatever necessary to squeeze out added profits. And that will spell disaster — giant oil spills, terrible coal-mine disasters, and Wall Street meltdowns — unless the nation has tough regulations backed up by significant penalties … Not heavy-handed and unnecessarily costly regulation, but regulation that’s up to the task of protecting the public from companies and executives that will do almost anything to make a buck.”