Each morning, Bill Scher and Terrance Heath serve up what progressives need to effect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.
MORNING MESSAGE: Don’t Do It, Mr. President
OurFuture.org’s Richard Eskow: “Nothing’s been confirmed, but it doesn’t help when Mr. Plouffe’s follows his remarks about ‘doing more’ to cut entitlements by saying that these cuts would be made with a ‘scalpel’ and not a ‘machete.’ If the President amputates the wrong limb, who cares what kind of blade he uses? And that’s exactly what benefit cuts would be: unnecessary amputations. Social Security doesn’t add to the deficit, and the only way to fix Medicare is by reducing the profit motive’s influence on health care costs. Could the President really be planning to cut these programs anyway? Don’t do it, Mr. President.”
Speculation Swirls Around President’s Deficit Speech
President may look to Simpson-Bowles to counter Ryan on health care. AP: “The president is using his speech to lay down broad principles and trace a path that could lead to compromise, but he won’t unveil a detailed program … The [White House] spokesman indicated Obama would build on the work of his debt commission … One proposal in the debt commission’s report last year would rework Medicare’s deductibles and copayments so that most beneficiaries have to pay a share of their everyday bills … In exchange, Medicare recipients would get better protection against catastrophic costs. Another called for scaling back the tax deduction for workplace benefits … It’s strongly opposed by unions…”
Higher taxes on wealthy expected to be major focus of President’s speech. LAT: “Obama will offer some spending cuts, including trims to the Pentagon’s budget, but his speech Wednesday is likely to provide Americans with a vivid choice between higher taxes or fewer benefits … Obama would end tax breaks for households earning more than $250,000 a year, trim Pentagon spending, lift a cap on the amount of income that is assessed for Social Security, and save on Medicare and Medicaid through alterations to healthcare delivery, administration officials said.”
Senate bipartisan “Gang of Six” nearing deal on long-term deficit reduction. USA Today: “‘We hope this week to make the progress we need to close the deal,’ said Sen. Dick Durbin, D-Ill., the Senate’s assistant majority leader. He said a plan from three Democrats and three Republicans ‘could be a game-changer’ that ‘might set the stage for some broad agreement.’”
W. Post reports WH is pushing Gang to finish: “…rather than introducing his own detailed plan [President Obama] is expected to offer support for the commission’s work and a related effort underway in the Senate to develop a strategy for curbing borrowing … Aides said that the group is very close to an agreement and that administration officials were pressing them to announce a deal this week. But the group and its allies feared an announcement closely followed by Obama’s endorsement would kill any hope of winning additional Republican support.”
Gang members Sens. Warner and Chambliss give a preview. CNN: “The senators said their plan would continue to reduce discretionary spending and reform the entitlement programs Medicare, Medicaid and Social Security, though changes to Social Security would not affect Americans currently over the age of 32. Warner said one idea would gradually raise the retirement age … Chambliss said the group was discussing lowering personal and corporate income tax rates to between 8 and 29 percent, but eliminating most tax deductions. ‘Some of you are scratching your heads, saying gosh, that means mortgage interest deduction, charitable deductions, all corporate deductions and that’s right,’ Chambliss said…”
Gang stuck on Social Security, reports The Hill: “One of the thorniest disputes with the Gang of Six is over Social Security. Obama could give Democratic negotiators a push toward including Social Security reforms in the package if he calls for it on Wednesday. Liberal advocates have been assured by Democrats that a Senate deficit-reduction package will not cut deeply into social programs for low- and middle-income families … Some [liberals] question whether [the President] is willing to take a hard-line stand …”
Liberals mobilize to protect pillars of retirement security. W. Post: “One liberal group, the Campaign for America’s Future, began mobilizing Monday to ramp up pressure on the White House in advance of Obama’s speech. The group sent an e-mail alert asking its members to contact the White House and warn against cuts to Social Security and Medicare.” Click here to send a message to the President.
Sen. Carl Levin kicks off campaign to end offshore tax havens. WSJ: “The coalition, called Financial Accountability & Corporate Transparency (FACT), includes union representatives, political and consumer activists and Catholic nuns … they’re seeking changes including: Requiring ownership of all business entities to be made public. Requiring multinationals to report sales, profits and taxes paid, country-by-country. Eliminating loopholes to make sure corporations pay ‘their fair share of taxes.’”
Will Obama go far enough on military spending? Wonk Room’s Ben Armbruster: “… if Defense Secretary Robert Gates’s recently proposed cuts in defense spending are any indication, Obama’s plan to rein in DOD funding will be token or minimal at best. Defense budget expert Winslow Wheeler recently said that simply getting the Pentagon’s books subject to an audit could be a good place to start.”
House GOP Prepares To Smash Medicare
Some in GOP nervous about voting to end Medicare as we know it. NYT: “…party strategists have warned House leaders about the dangers, aides said. But Republicans are calculating that the political ground has shifted … Representative Steve Israel, the New York Democrat … called the budget vote ‘the moment of truth’ for House Republicans in [the 61 congressional districts] that went for Barack Obama…”
Conservatives trying to give to the rich, take from the poor. LAT: “In their drive to cut medical assistance to the poor while pushing tax breaks benefiting the affluent, congressional Republicans are following the lead of a group of governors who have championed this approach to balance state budgets … the moves are sparking a debate in capitols from Arizona to Wisconsin to Maine over who is being asked to sacrifice and whether the strategy will produce more jobs.”
Will GOP Hijack Debt Ceiling Debate
President open to deal on conditions to debt limit increase. WSJ: “Softening the administration’s earlier insistence that Congress raise the so-called debt ceiling without conditions, officials now say they won’t rule out linking an increase of the borrowing cap with cuts aimed at reducing the deficit—even though they’d prefer to keep the issues separate.”
FLASHBACK: Senate Republicans Raised The Debt Ceiling Immediately After Passing The 2003 Bush Tax Cut, notes Wonk Room’s Pat Garofalo.
Wall Street warns, lay off debt limit. The Hill: “If Wall Street saw the fight over legislation to fund the government as playing with matches, it sees the fight over the debt ceiling as playing with plastic explosives, said Steve Bell, a former staff director with the Senate Budget Committee … a scare over the debt ceiling could be the ‘tipping point on the extraordinarily low interest rates’ the economy has been enjoying.”
Matt Yglesias offers a “hostage rescue strategy” to prevent GOP from hijacking the debt ceiling debate: ” The first [step] is a credible, repeated commitment not to surrender anything in exchange for getting congress to agree to the debt ceiling being increased … [Then] move to thinking about what happens as we reach the ceiling … start stiffing people Republicans care about … Make the doctors & hospitals, the farmers and defense contractors, and the currently elderly bear the inconvenient for a few weeks of uncertain payment schedules.”
What’s In The Spending Cut Deal?
What gets cut. W. Post: “Republicans were able to focus the sharpest cuts on areas they have long targeted. The Education, Labor, and Health and Human Services departments, which represent about 28 percent of non-defense discretionary spending, face as much as a combined $19.8 billion, or 52 percent, of the total reductions in the plan. In addition, the Environmental Protection Agency, long a target of conservatives, will see a $1.6 billion cut, representing a 16 percent decrease from 2010 levels. Key EPA programs include the Fish and Wildlife Services ($141 million cut from last year), the National Park Service ($127 million cut from last year) and “clean and drinking water state revolving funds” ($997 million cut from last year).”
What doesn’t. Politico: “…the president will come out of the fight with more money to implement his education and Wall Street reforms … AmeriCorps survives, after facing termination. The National Science Foundation received $6.9 billion, $307 million more than the House proposed. And mindful of the Democratic outcry, the Food Safety and Inspection Service is cut by just $10 million — a shadow of what Republicans had proposed two months ago.”
What looks like cuts but aren’t. AP: “…the cuts that actually will make it into law are far tamer, including cuts to earmarks, unspent census money, leftover federal construction funding, and $2.5 billion from the most recent renewal of highway programs that can’t be spent because of restrictions set by other legislation. Another $3.5 billion comes from unused spending authority from a program providing health care to children of lower-income families.”
How badly will these cuts hurt the economy? NYT: “The proposed federal spending cuts … do not amount to much by themselves, about 0.25 percent of annual domestic activity. But they join a growing list of minor problems impeding growth, economists said, including higher fuel prices and bad weather, Europe’s creeping malaise and the effect of the Japanese earthquake … some experts who had forecast that the economy would expand by more than 4 percent in 2011 to retreat toward a 3 percent growth rate.”
Sen. Rand Paul will oppose the compromise reports W. Post.
CNN poll finds more Dem voters approve than GOP voters. W. Post: “Fifty-eight percent of national adults polled over the weekend said they approve of the budget agreement … 66 percent of Democrats approve of the deal … 56 percent of independents approve … and 47 percent of Republicans approve…”
But congressional liberals more dissatisfied than conservatves. W. Post: “While Rep. Scott Garrett (N.J.) of the conservative Republican Study Committee had praise for the way Boehner handled the talks, Rep. Raul M. Grijalva (D-Ariz.) of the Congressional Progressive Caucus was much less pleased with his party’s performance at the negotiating table. ‘As more details come out, I’m afraid to say that we rolled over as Democrats,’ said Grijalva…”
Foreclosure Fraud Talks Falter
Fed-state split threatens foreclosure fraud settlement. WSJ: “Advocates of tougher sanctions accuse federal banking regulators, including the Office of the Comptroller of the Currency and the Federal Reserve, with going easy on the banks … A spokesman for the OCC said the pending orders ‘create a framework for remedial action, but there’s no reason that additional procedures sought from the states can’t fit within that framework. … Nothing that we’re doing is intended to impede any action by the state attorneys’ general.’ … ‘It sure looks like [regulators] are setting up the banks to be able to go out and say to the attorneys general, “You can’t touch us,”‘ says Margot Saunders, a lawyer with the National Consumer Law Center.”
State attorney generals seek assurance they can still pursue damages reports Bloomberg.
Natural Gas, Too Hot For Planet?
Natural gas may not help cut greenhouse gas emissions. NYT: “The problem, the studies suggest, is that planet-warming methane, the chief component of natural gas, is escaping into the atmosphere in far larger quantities than previously thought, with as much as 7.9 percent of it puffing out from shale gas wells, intentionally vented or flared, or seeping from loose pipe fittings along gas distribution lines.”