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: Obama Less Trusted Than Bush On Social Security
OurFuture.org’s Richard Eskow: “When asked whether they trust the President or his opponents in Congress more on the issue of Social Security, people have less trust in Barack Obama than they did in George W. Bush when he had Obama’s job. And the question was asked about Bush in 2005, at a time when his unpopular campaign to privatize Social Security was reaching its crescendo … In this climate, with these numbers, any attempt by the President to cut Social Security could only be described in one phrase: Political malpractice.”
Public Rejects Social Security Cuts In New Poll
Public rejects Social Security cuts in CBS/NYT poll: “Nearly two-thirds of Americans choose higher payroll taxes for Medicare and Social Security over reduced benefits in either program. And asked to choose among cuts to Medicare, Social Security or the nation’s third-largest spending program — the military — a majority by a large margin said cut the Pentagon.”
“Social Security benefit already small compared to other nations” reports Open Left’s Paul Rosenberg.
Sen. Pat Toomey’s math on the debt ceiling doesn’t add up, finds Drum Major Institute’s Harry Moroz: “…Toomey breezily informs readers that they need not be worried about raising the U.S. debt ceiling … [But} in Toomey's brave new world the federal government would only have about $330 billion to meet its projected $1.4 trillion in outlays for discretionary spending … In other words, Toomey would slash the federal budget by something like $1 trillion without regard to the actual causes of the budget deficit while imposing a massive anti-stimulus on the American economy."
House Conservatives Press Speaker On Cuts
Majority of House GOP caucus proposes specific and severe spending cuts. NYT: "[The Republican Study Committee proposal calls] for outlays to be slashed by $2.5 trillion over the next decade, far more than the party has sought so far … its effect on the entire array of government programs, among them education, domestic security, transportation, law enforcement and medical research, would be nothing short of drastic … it would cut much of the federal government nearly in half by 2020, including agencies like the Education Department. Some targets, like Amtrak, would potentially be put out of existence …”
Federal employees would take a massive hit. W. Post: “It would extend President Obama’s pay freeze on federal employees from two years to five, cut the civil service by 15 percent through attrition over a decade, and prohibit federal workers from serving as union officials on government time.”
“House Republicans seek cuts to Energy Star, weatherization, advanced energy research, puppies” says Grist’s David Roberts.
TNR’s Brad Plumer sees a GOP civil war brewing: “…in recent weeks, Republican House leaders have been quietly edging away from their campaign promises … On Thursday, the Republican Study Committee (which acts as the ideological standard-bearer for the party), fired off a sharp letter to John Boehner … Republican leaders haven’t figured out how to balance the zeal of their right flank with the the headaches involved in getting those cuts to stick.”
Conservatives Find New Way To Screw Public Workers: State Bankruptcy
Conservative effort intensifies to give states “bankruptcy” avenue to break pension obligations to public employees. NYT: “Along with retirees, however, investors in a state’s bonds could suffer, possibly ending up at the back of the line as unsecured creditors … fear of destabilizing the municipal bond market with the words ‘state bankruptcy’ has proponents in Congress going about their work on tiptoe … House Republicans, and Senators from both parties, have taken an interest in the issue, with nudging from bankruptcy lawyers and a former House speaker, Newt Gingrich … The Center on Budget and Policy Priorities released a report on Thursday warning against a tendency to confuse the states’ immediate budget gaps with their long-term structural deficits.”
State budget gaps hurting mental health services. NYT: ” This year’s cuts are expected to be substantial, but they are just the latest round in the recessionary demolition of a public mental health system that has long been underfinanced and politically vulnerable. The National Association of State Mental Health Program Directors estimates that at least $2.1 billion has been cut from state mental health budgets in the last three fiscal years.
Next Step For GOP On Health Care: Government Shutdown?
Dems see GOP angling to force government shutdown over defunding health reform. HuffPost: “Democratic lawmakers tell The Huffington Post that they increasingly expect Republicans to try and freeze funding for the health care law … the inability to pass an appropriations bill could have far-reaching effects. ‘They are potentially setting up a situation where they will bring government, all of government, to a screeching halt,’ Rep. Debbie Wasserman Schultz (D-Fla.) said…”
W. Post’s Eugene Robinson notes GOP can’t do much better than “ObamaCare”: “It turns out that voters look forward to the day when no one can be denied insurance coverage because of preexisting conditions. They like the fact that young adults, until they are 26, can be kept on their parents’ policies. They like not having yearly or lifetime limits on benefits. The GOP is going to have to design something that looks a lot like Obamacare.”
Vermont may be able to save even more money if HHS allows them to install single-payer. Wonk Room’s Igor Volsky: “The plan would be financed through a higher payroll tax on employees and their workers, but [Harvard's Bill] Hsiao estimates that the tax burden would be ‘less than what they are paying in premiums now.’ … The Vermont Congressional delegation has introduced an amendment that would expand a provision in the law that allows states to propose their own pilot health care programs and seek a waiver from the federal health care law … The current law allows states to pursue these waivers in 2017; the amendment would move this waiver date up to 2014.”
W. Post’s Ezra Klein lambastes GOP effort to discredit CBO: “The facts don’t support the particular case the Republicans want to make, so they’re trying to take down the people who supply the facts. But once that’s done, it can’t easily be undone … If getting the CBO’s seal of approval ceases to matter, then political parties will cease to try. That’s when the ‘smoke and mirrors’ will really begin: when bills just have to sound good rather than pencil out.”
Banks Smell Profit In Housing Reform
Banks see “profit opportunity” in Fannie/Freddie reform. NYT: “Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities — that would be stamped with a government guarantee … The administration’s report [on reforming Fannie and Freddie], to be released later this month, is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners.”
Major foreclose case pending in Massachusetts court. Bloomberg: “Massachusetts’ highest court will consider whether a home buyer can rightfully own a property if the bank that sold it to him didn’t have the right to foreclose on the original owner. The state’s Supreme Judicial Court, which agreed last month to take the appeal, already ruled Jan. 7 that banks can’t foreclose on a house if they don’t own the mortgage.”
Paul Volcker optimistic about Volcker Rule implementation. NYT quotes: “‘I think it is a good-faith effort to enforce what the law asks for … It makes clear you cannot hide proprietary trading in other activities. It strikes me as very straightforward … I may not understand modern financial attitudes, but I don’t think a bank wants to be conducting financial activities that will be revealed as simply skirting the law.”
No Movement On China Currency
NYT’s Paul Krugman warns China it is hurting itself with currency manipulation: “China has been using a weak currency to keep its wages and prices low in dollar terms; market forces have responded by pushing those wages and prices up, eroding that artificial competitive advantage … It’s no wonder that the Chinese public is angry about inflation, and that China’s leaders want to stop it … they’re not willing to deal with the root cause and let their currency rise. Instead, they are trying to control inflation by raising interest rates and restricting credit. This is destructive from a global point of view…”
GE CEO Takes Over President’s Econ Council
President taps GE CEO Jeffrey Immelt to head econ advisory concil. Immelt lays out vision in W. Post oped: “We need a coordinated commitment among business, labor and government to expand our manufacturing base and increase exports … I applaud the free-trade agreement recently concluded between the United States and South Korea … We should seek to conclude trade and investment agreements with other fast-growing markets … Businesses should invest more of their cash and resources in advanced products and technologies that will create jobs in the United States, and government should incentivize this investment in innovation …”
Alliance for American Manufacturing’s Scott Paul rips choice: “You would have difficulty finding a company that has outsourced more jobs and closed more American factories than GE.”
Big business harming the economy slowing payments to small business, argues Bloomberg’s Jonathan Alter: “…big businesses are forcing small businesses to act as their banks by not paying their bills on time. ‘Net 60′ is the increasingly common standard in big business — 60 days before cutting a check to suppliers. You can imagine the havoc this wreaks on the cash flow of the small fry that depend on large companies to stay alive … [President Obama] could issue an executive order requiring that any company with a federal contract pay suppliers within 30 days.”