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.
Warren Tapped To Set Up Consumer Agency
“Warren to Unofficially Lead Consumer Agency” reports NYT: “Ms. Warren will be named an assistant to the president [and] a special adviser to the Treasury secretary, Timothy F. Geithner … The financial regulation law delegated to the Treasury Department the powers of the bureau until a permanent director was appointed and confirmed by the Senate to a five-year term … The decision does not preclude the possibility that Ms. Warren could eventually be named director, and at the least, she would play a pivotal role in deciding whom to appoint to the job…”
Sen. Bernie Sanders approves. LAT: “Rep. Bernie Sanders (I-Vt.), one of Warren’s strongest Senate supporters, applauded Obama’s decision, which he said effectively makes her the agency’s temporary head. ‘The American people are tired of being ripped off by large banks and financial institutions and, in professor Warren, they finally will have someone in a position of power who can protect their interests,’ he said. But Republicans would strongly oppose her nomination as permanent director.”
Atrios hopeful: “The buzz I was hearing was that contrary to what some people thought, they didn’t really have authority to appoint an ‘interim director’ but that instead Treasury had authority to run things in the interim. Distinction without difference, perhaps, but this seems (I hope) to put her in charge in all but name.”
Naked Capitalism’s Yves Smith skeptical: “Expect Warren to be pushed further to the sidelines, just as Paul Volcker has been (oh, and pulled out of mothballs when the Administration desperately needed to create the appearance it really might be tough on banks.”
Salon.com posts extended interview with Warren conducted in July.
Split Dems Seek Tax Solution
Dems seek legislative strategy to satisfy caucuses “… by allowing a vote on Senate Minority Leader Mitch McConnell’s (R-Ky.) plan to extend all the tax cuts, moderate Republicans and Democrats would be given cover. They could tell constituents they voted to extend all of the tax cuts, but the effort failed. The only choice left was to extend the middle-class tax cuts or let them all expire.”
Obama and Boehner trade tax cut jabs. NYT: “‘We simply can’t afford that,’ Mr. Obama said. ‘It would mean borrowing $700 billion in order to fund these tax cuts for the very wealthiest Americans — $700 billion to give a tax cut worth an average of $100,000 to millionaires and billionaires. And it’s a tax cut economists say would do little to add momentum to our economy.’ … ‘Listen, the American people want to stop all the tax hikes and Republicans are going to continue to stand with them,’ Mr. Boehner said…”
ConservaDems break with Obama on Bush tax cuts. CNN: “Thirty-one House Democrats, most of whom face tough re-election bids this fall, have signed a letter to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging them to extend expiring tax breaks for all income levels, including the wealthy.”
Sen. Max Baucus toughens up in defense of middle-class tax cut extension. Politico: “Often dismissed as overly cautious, Baucus — who angered many liberals when he backed the initial Bush-era tax cuts in 2001 — stands out now as one of the most aggressive Democrats in focusing single-mindedly on saving those reductions impacting families earning less than $250,000.”
House Maj. Leader Hoyer leaves door open for compromise. CQ: “.. Hoyer, D-Md., did not rule out an extension of the rest of the tax cuts. Some sort of compromise that included an extension of tax cuts for top earners would have significant bipartisan support, even among Democrats who might prefer or vote for a middle-income-only measure.”
Tim Fernholz says it’s now or never for the Democratic tax plan: “There’s a strange debate going on among the Democrats, who are having a hard time deciding whether they want to force a vote on their plan to prevent middle- and lower-income taxes from increasing while putting a modest levy on earners over $250,000. The proposal would also increase capital gains and dividends taxes. As I post this, taking a popular stand on an issue at the heart of their campaign platform is, for the Democrats, a bridge too far. But I hope they realize that this is their only chance … if Democrats don’t pass it now, they won’t have a chance to get their priorities across the line in the future.”
TNR’s Jonathan Cohn explains why right-leaning Dems are hesitant to engage tax cut fight: “…Democrats that represent more conservative districts worry that their constituents are more likely to believe Republican spin on the tax cut. Here’s how a senior congressional aide, one in close touch with more conservative Democrats, explained the thinking: ‘Like it or not most independent voters (and even conservative Democrats) think the president is anti-business and fighting with republicans about their small business canard is counterproductive at this stage for most members in red states.’”
Tea baggers can win primaries, but Steven Benen asks if they can stand on principle regarding the GOP tax plan: “When will we see a Tea Party organization, any Tea Party organization, publicly denounce the Republican tax plan as irresponsible and unaffordable? The GOP has no qualms about adding $4 trillion to the debt over the next 10 years. Surely the folks who consider the debt their ‘top issue’ should have something to say about this, right?”
Geithner Tries To Toughen Up On China
Geithner to amp up China rhetoric in testimony today. W. Post: “…he is studying a ‘mix of tools’ to persuade China to change how it manages its currency and to treat U.S. businesses more fairly. Using language more sharply critical of China than has been the norm for the Obama administration, Geithner noted the ‘substantial challenges’ posed for the United States by an array of Chinese policies, which he criticized as having a ‘negative impact . . . on our economic interests.’ … Geithner’s remarks did not detail possible steps being considered.”
US lodges formal complaints about China practices to WTO. Bloomberg: “The complaints at the World Trade Organization yesterday — one on payment-processing companies and the other on steel duties — followed demands in Congress hours earlier that the U.S. push China to accept a stronger yuan … China doesn’t let foreign companies issue their own bank cards denominated in its currency … The steel case involves dumping and countervailing duties China has placed on flat-rolled steel…”
Innovative Florida light bulb manufacturer wooed by China and Mexico. W. Post: “Aside from the enticement of lower-wage workers, those countries offer significant cash incentives for capital equipment and labor, amounting to as much as $4 million, company officials said. The United States, by contrast, has offered financing under the stimulus program, but the process has proved too cumbersome for the small company … The United States offered a $19 million stimulus bond that enabled the company to go to a lender and borrow money at a cheaper rate. But Lighting Science did not avail itself of the loan, because private lenders required unaffordable levels of collateral … while the United States and local officials are offering other grants that Lighting Science Group is applying for … the process requires writing proposals about future plans and comes with more strings attached…”
China’s factories are rethinking their cheap-labor business models. NYT: “The TAL Group, which operates an immense garment-making plant in this coastal boom town, is moving beyond piecework by helping J. C. Penney electronically manage its inventory of dress shirts … Chicony, maker of a power device used in the Xbox from Microsoft and a major supplier of computer keyboards to Dell, is diversifying by opening department stores … with manufacturing costs rising and China looking to create a consumer middle class, experts say the revamping of this region’s industries could help reduce the nation’s wide income gap…”
Will The Fed Toughen Up On Jobs?
Fed faces big decision next week. W. Post: “…setting the stage for a definitive decision in November or December on whether to purchase hundreds of billions of dollars of bonds in an effort to strengthen the economy … Fed policymakers face two major questions: Will the weak economic recovery of the past few months persist through 2011? And would pumping vast new sums of money into the economy pack enough punch to be worth the risks?”
Robert Scheer anticipates Summer’s end. Larry Summers, that is: “When will the president give Lawrence Summers his pink slip? He can thank him for his years of service and use the excuse that his top economic adviser wants to spend more time with his family. I don’t care how he sugarcoats it. But Summers deserves the same fate as the millions of workers laid off because of the banking debacle he helped cause, the dire consequences of which he has done precious little to mitigate.”
Banks resist paying back taxpayers after selling bad loans to Fannie & Freddie. LAT: “Taxpayer losses from the government seizure of failed housing finance giants Fannie Mae and Freddie Mac could reach nearly $400 billion, but likely won’t top that level as some had feared … To offset some losses, the Federal Housing Finance Agency is seeking billions of dollars in repayment from banks that sold bad loans to the firms, acting director Edward J. DeMarco said. Some banks are balking, and the agency is considering tougher action, DeMarco said. But he did not specify what steps might be taken.”
Small biz still struggling to get loans from bailed out banks. Bloomberg: “A record 41 percent of small business owners say they can’t get adequate financing, up from 22 percent two years ago…”
Hottest Year Ever?
2010 ties global heat record. The Hill: “The first eight months of 2010 tied for the warmest combined global land and ocean surface temperatures since records started in 1880, the National Oceanic and Atmospheric Administration said Wednesday … 2010 is well on pace to be one of the warmest years on record.”
Clean Energy Works launches ad campaign to stop anti-EPA climate bill. The Hill: “The ad will run for about a week and will be coupled with grassroots activity, including letters signed by small business and public health groups that would be sent to congressional leaders by early next week…”
Coal state Dem Sen. Jay Rockefeller doesn’t have 60 votes yet to handcuff EPA. Mother Jones’ Kate Sheppard: “…Sen. Jay Rockefeller again pledged on Wednesday that there will be a vote this year on his measure to delay the agency’s rules on planet-warming gases. Speaking at a pro-coal rally sponsored by the industry … Rockefeller said he believes he has 53 votes lined up for his measure, and believes another seven votes are ‘highly gettable’…”
Coalition pushes higher renewable energy standard. The Hill: “Twenty-two green, labor and renewables groups on Wednesday released an ‘action statement’ calling on the Senate to pass a renewable power mandate that won bipartisan backing on a key Senate panel in 2009 … Four Senate Republicans — Sam Brownback (Kan.), Chuck Grassley (Iowa), Susan Collins (Maine) and Olympia Snowe (Maine) — have voted for the panel’s mandate or a similar mandate. Energy and Natural Resources ranking member Lisa Murkowski (R-Alaska) voted for the mandate as part of the larger energy bill in which it was included, but may not support it if the mandate comes up as a stand-alone item … There is also the question of whether Democrats like Sens. Ben Nelson (Neb.) and Mary Landrieu (La.) would be supportive.”
Step Forward On Immigration Reform?
Immigration advocates meet with President today before push on incremental reform. The Hill: “[The DREAM Act] would allow certain children of illegal immigrants who came to the U.S. before the age of 16 a path to citizenship, will be debated next week as an amendment to the defense authorization bill. [Rep. Luis] Gutierrez told reporters Wednesday that he is hopeful the measure will attract 60 votes, though he acknowledged that the White House will need to be heavily involved to push the bill to passage.”
Republicans threaten to oppose defense spending bill if related immigration and gay equality measures are included. W. Post: “‘Obviously it’s about politics,’ [said Sen. Lindsey Graham]. “You’re trying to check a box with the Hispanic voters on the Dream Act . . . this is using the defense bill in a partisan fashion that hasn’t been done before.’ Actually, the defense bill has often been the subject of partisan wrangling. What is unprecedented, however, is that the bill could come to the Senate floor without the support of the committee’s top Republican, John McCain (Ariz).”
Only 37% says Obama has “expanded the role of government too much” in NYT/CBS poll.
Top WH econ adviser Goolsbee directly responds to Atrios regarding Goolsbee’s past academic work criticizing effectiveness of business tax credits: “‘In a period like today, where capacity utilization in the industrial sector has suffered greatly (and where there are substantial numbers of unemployed R&D engineers), the findings in my old work would clearly indicate there would be little reason to expect the increased demand to go into higher prices … – Austan Goolsbee, Council of Economic Advisers’ … my comment was ‘terrible bang for the buck,’ and while I’m willing to believe maybe it’s ‘not as terrible bang for the buck,’ it’s hard to see how this is in any way ‘the best bang for the buck.’ … – Atrios.” More at Rortybomb.
The American Prospect’s Matthew Yglesias finds the Pentagon is not reforming as advertised: “…as the Obama/Gates defense-reform bandwagon rolls forward, it’s increasingly clear that the administration views these steps as an alternative to rethinking the scope of America’s financial commitment to the military rather than a prelude to doing so … by buying weapons and services more efficiently, the military will be able to do more war fighting … Not on the table, in other words, is actually spending less money … More money for defense means higher taxes or less for other programs. Ignoring that point has been key to the politics of national security for the past 15 years, but it’s nonetheless true.”