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.
MORNING MESSAGE: 99ers Meet Compassionless Conservatism
OurFuture.org’s Terrance Heath: “The proposed deal holds nothing for the 99ers, those Americans who have exhausted or are close to exhausting their unemployment benefits … [Ralph] Reed’s mention of ‘misplaced compassion’ becomes ironic in the face of a ‘deal’ to ‘extend unemployment benefits’ that in reality leaves those most in need — the long term unemployed — out in the cold while handing the lion’s share of benefits to the top 1% — again. The reality is that there are currently fewer jobs than there are people looking for work … The next two years may make us nostalgic for the days when conservatives at least made gestures at compassion.
“Open Revolt” Threatens Tax Cut Deal
House Dems in “open revolt” reports LAT: “During an angry and emotional meeting of their caucus, Democratic lawmakers voted overwhelmingly against bringing the Obama package to the floor without substantial modification. ‘Just say no!’ many shouted in the Democratic caucus meeting. Though the voice vote amounted to a recommendation to party leaders, it marked the first major challenge to Obama from his party in Congress as he navigates in a new political reality by negotiating with Republicans…”
61 “firm” No votes and 7 Yes votes in House Dem caucus according to The Hill whip count. “…the White House needs 40 House Democrats to clear the plan through the lower chamber. In order to scuttle it, 217 Democrats will need to vote no.”
Energy tax credits added to the Senate version of the tax cut deal. AP: “The White House and key lawmakers cleared the way Thursday night for swift Senate action to avert a Jan. 1 spike in income taxes for nearly all Americans, agreeing to extend breaks for ethanol and other forms of alternative energy as part of the deal.”
“Ethanol and renewable power lobbyists are breathing easier now” reports The Hill.
W. Post notes what hasn’t been added: “Supporters were unable to win an extension of another incentive program that offered tax credits for investments in advanced energy manufacturing projects … Several other initiatives set up by the stimulus bill were also left out of the new tax legislation, including an extension of the Build America Bond program … ”
NYT suggests House Dem resistance may lead to a worse deal: “House Democrats have little negotiating leverage. If they block the package, the White House could simply work with the incoming Republican majority to pass it in early January — though Republicans would presumably be in a position to extract further concessions.”
CAP’s Michael Linden proposes “stop-gap credit” to avoid low-income workers getting an inadvertent tax increase. “The best solution would be to implement a ‘stop-gap’ credit that makes up the difference between their payroll tax cut and the value of the Making Work Pay credit. This would actually be easier and simpler than the current Making Work Pay structure, and it would hold harmless all 25 million people. This fix would cost less than $7 billion—less than one-tenth the cost of extending the bonus Bush tax cuts for the rich, and less than the cost of cutting the estate tax.
No Movement After WH-Deficit Commission Meeting
WH rejects “summit” plan from deficit commission. Politico: “Members of the commission made the proposal in a meeting Thursday morning with White House budget director Jack Lew and Treasury Secretary Tim Geithner … With House Democrats in revolt against the product of last month’s summit on tax cuts, the idea of another summit on deficits, so soon, drew a chuckle from one White House official … ‘I think we’ve had about all the fun we can stand’ … the president is focused on adopting some of the deficit commission’s ideas in his State of the Union address in January and fleshing them out in his fiscal year 2012 budget in February…”
Bloomberg poll shows Americans reject drastic, rushed deficit reduction: “The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they’re against an increase in the gasoline tax … the public still believes it’s more important to ‘minimize sacrifice’ than to take ‘bold and fast’ action to pare the $13.7 trillion national debt … when offered a list of more than a dozen possible spending cuts or tax increases, majorities opposed every one of them except imposing a bigger burden on the rich.”
Obama Signals Tax Reform Tops 2011 Agenda
NYT reports the President is weighing tax simplification: “…Mr. Obama has directed his economic team and Treasury Department analysts to review options for closing loopholes and simplifying income taxes for corporations and individuals … The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates … a majority of the [Simpson-Bowles] panel proposed eliminating or reducing many of the popular tax breaks for businesses and individuals that cost $1 trillion annually and using the additional revenues to lower rates and reduce deficits … According to commission officials, the Treasury secretary, Timothy F. Geithner, expressed interest in the panel’s approach …”
President expresses interest during NPR interview: “So typically, the idea is simplifying the system, hopefully lowering rates, broadening the base — that’s something that I think most economists think would help us propel economic growth. But it’s a very complicated conversation. So what I believe is, is that we’ve got to start that conversation next year. I think we can get some broad bipartisan agreement that it needs to be done. But it’s going to require a lot of hard work to actually make it happen … I have not specifically endorsed that [Simpson-Bowles] plan. What I’m saying is, is that the general concept of simplifying — eliminating loopholes, eliminating deductions, eliminating exemptions in certain categories — might make sense if, in exchange, people’s rates are lower. That may end up being a more efficient way of doing business.”
Dean Baker questions whether corporations need simpler taxes: “Corporate profits are equal to about 16 percent of the value of output in the corporate sector. Businesses pay roughly a third of their profits in taxes, which means that taxes are equal to about 5 percent of the value of output. If taxes were reduced by 20 percent, a very large tax cut, then this would reduce the cost of doing business in the United States by 1 percent relative to foreign countries.”
AFL-CIO, Steelworkers Oppose Korea Deal
Union split deepens. W. Post: “The proposed U.S.-South Korea free-trade deal drew fire from major unions Thursday, disrupting the Obama administration’s hope for building a broad consensus behind its first free-trade pact … The AFL-CIO, the United Steelworkers, the International Association of Machinists and the Communications Workers of America all said they would oppose the deal when it comes before Congress next year, arguing that it will drain U.S. manufacturing jobs … White House officials said the fact that labor may be divided does not detract from the fact that the agreement has garnered key endorsements [from the UAW and UFCW.]”
CEOs praising President for tax cut deal and Korea agreement. The Hill: “After two years of playing defense, business is now on the same side as Obama in two huge economic debates. And there could be more to come. One business official said immigration, education reform and infrastructure spending, to name just three topics, are all areas where Obama and business will have reason to cooperate.”
Wisconsin and Ohio Officially Lose High-Speed Rail Funds
WI, OH lose high-speed rail funds, jobs thanks to incoming governors. AP: “States gaining the most money include California, $624 million; Florida, $342 million; Washington, $161 million; and Illinois, $42 million. Other states receiving lesser amounts include New York, Maine, Massachusetts, Oregon, North Carolina, Iowa, Vermont and Indiana.
Cleveland Plain Dealer headline: “Feds to Ohio: Your high-speed rail project is officially dead (and New York thanks you)”
Madison Capital Times edit board headline: “Loss of high-speed rail represents ‘ugly triumph of politics over progress’”
EPA Backs Off
EPA delaying new emissions rules. NYT: “Now, the agency says, it needs until July 2011 to further analyze scientific and health studies of the smog rules and until April 2012 on the boiler regulation … Environmental advocates are furious. They fear a similar delay on the approaching start of one of the most far-reaching regulatory programs in American environmental history, the effort to curb emissions of carbon dioxide and other greenhouse gases. But in a striking turnabout, the National Association of Manufacturers and the American Petroleum Institute … are praising his administration.”
GOP Sen. Lindsey Graham may push carbon emission cuts on utilities, for a price. The Hill: “The idea would require power companies to supply escalating amounts of energy from various low-carbon sources. Power generated from new nuclear plants would be eligible. Graham told reporters that he wants to link the idea with proposals that would prevent EPA from ‘overly’ regulating several air pollutants — including carbon.”