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: Deficits Are The New Iraq
OurFuture.org’s Richard Eskow: “What are those false premises? That we can cut the deficit without first addressing our jobs crisis. That Social Security contributes to the deficit. That it’s ‘braver’ to shift Medicare costs to the elderly than it is to face the dragon of for-profit healthcare. That tax increases should come in the form of ‘expenditure’ cuts that target the middle class and protect the wealthy. These ideas are the ‘WMD’ of austerity economics.”
Pressure Eases For Deficit Deal As Default Deadline Pushed Back
Deadline to avoid debt limit default pushed back. NYT: “A greater-than-expected increase in tax revenue has extended by about a month, until early August, the federal government’s ability to pay its bills … The new estimate creates a significant grace period for Congress …”
Senate vote on House GOP budget pushed back probably until next week. The Hill: “Reid said on the Senate floor Monday that the Senate will first deal with a small-business bill and then with subsidies for oil companies before turning to the Ryan budget.”
Senate Budget Chair preparing second budget proposal in case “Gang Of Six” fails to agree. Politico: “While he said the group made ‘more progress’ Monday, he reiterated his calls for a deal to be reached imminently. ‘It’s not easy to get something across the finish line,’ he said. Asked whether the group had a deadline, he said ‘it’s coming very soon obviously’ but he declined to state a specific date. He said he would brief the Senate Democratic Caucus on his options Tuesday.”
New Pew report clearly shows cause of current deficits. Ezra Klein: “No policy contributed more to the deficit than the two rounds of tax cuts passed in 2001 and 2003. The wars were also major contributors. The Medicare Prescription Drug Benefit, though its costs will build over time, was not a particularly large part of the story over the last decade … The financial crisis crushed our economic outlook. Revenues plummeted and spending grew [which shows] that economic projections are uncertain at best. Without the financial crisis, our current deficits, though significant, would be much more modest. Conversely, if economic growth takes off in the coming years … our future deficits will be much smaller than we currently project.”
No consensus yet on corporate tax reform: “Assorted proposals being discussed in Washington call for the rate to be lowered officially to about 25 percent and some tax breaks to be eliminated so that revenue remains unchanged. But some prominent business leaders, including the chief executive of Procter & Gamble, are pushing for the rate to be reduced without reining in tax shelters … [Other] business owners complain that the American system unfairly rewards disingenuous bookkeeping rather than innovation.”
Connecticut budget rejects knee-jerk conservatism, includes both spending cuts and tax increases. NYT: “As officials in nearby states — including New York, New Jersey and Massachusetts — have become conspicuous converts to the current antitax, antigovernment fever, Mr. Malloy and Connecticut Democrats are striking a more anomalous course, betting that residents will accept the short-term pain of tax increases if they see a long-term gain of stable government services and fiscal policy.”
Debate Rising Over Afghan War
Will Osama bin Laden’s death hasten end to US military involvement in Afghanistan? McClatchy: “[CSIS' Mark] Quarterman [said] that bin Laden’s demise ‘could lead to the real possibility of negotiations with the Afghan Taliban to end this war. One gets the sense that the Afghan government senses it was well.’ Chris Gelpi, a Duke University political science professor, isn’t as optimistic. ‘Killing bin Laden seems to do little in terms of the reality on the ground in Afghanistan and Pakistan and has no impact on the Taliban,’ Gelpi said.”
WH prepares for a changed debate over Afghan policy. NYT: “… officials in the State Department and Pentagon, as well as key lawmakers, said Bin Laden’s death was bound to alter the debate about a costly war soon to enter its second decade … ‘I hope people are going to feel, on a bipartisan basis, that when you move the ball this far it’s crazy to walk off the field,’ one senior administration official said. Officials who favor retaining a large troop presence said that while this was a significant victory, the security gains in Afghanistan remained fragile.”
Conservatives try to credit torture for key Osama intel. Daily Kos’ Joan McCarter: “As Marcy [Wheeler[ explained in an e-mail: 'Assuming they got the courier's name in 2005 or 2006, per reports, it happened 2 years or more after KSM's waterboarding. Which would say KSM withheld this information under waterboarding.'"
End of Osama doesn't mean end to terrorist threat, if we can't end our dependence on oil, notes retired Navy Vice Admiral Dennis McGinn and president of the American Council on Renewable Energy, reports Time.
Oil Subsidy Fight Hitting House Floor
Dems push to end oil subsidies. The Hill: "The House will vote later this week on GOP legislation to require the sale of oil-and-gas leases off Virginia’s coast and set deadlines for certain Gulf of Mexico lease sales … Democrats, meanwhile, are hoping to force votes in both chambers on repealing billions of dollars in oil industry tax subsidies. The House appears to be headed for a tax tussle this week, while Senate timing is less certain …"
Presidential candidate Tim Pawlenty defends Big Oil. Wonk Room quotes: "…the Obama proposal is ludicrous. I mean the worst thing we could do is raise the cost burden on costs on energy and oil…"
EPA chief touring farm states to debunk conservative myths reports Politico.
GOP Keeps Up Fight To Defund Health Reform
House vote expected today to defund health reform. W. Post: "On Tuesday, the House is scheduled to vote on a pair of bills: One would repeal funding from the health-care bill for states to establish insurance exchanges, and the other would repeal mandatory funding for school-based health center construction … the House-passed bills face little chance of becoming law, given Democrats’ control of the White House and the Senate."
House Budget Chair Paul Ryan partially concedes "some people will have to pay more out of pocket" for Medicare under GOP budget. Wonk Room's Igor Volsky: "Ryan’s admission gets at the truth, but it doesn’t go far enough. The Congressional Budget Office (CBO) analysis of Ryan’s proposal found that a 'typical' 65-year old would be paying more under Ryan’s plan, regardless of income."
HHS proposed new Medicaid rule to ward off cruel cuts. NYT: "The proposed rule generally prevents states from cutting Medicaid payments to providers unless they can show that Medicaid recipients will have 'sufficient access' to care after the cuts."
California May Make Banks Pay
California legislation would make banks pay for mortgage crisis they caused. Peter Dreier: "A bill sponsored by Assemblyman Bob Blumenfield (Democrat, Los Angeles) … would impose a $20,000 fine on banks for each foreclosure. If the bill passes in California, it could encourage other states to support comparable legislation and help energize a movement to reign in Wall Street abuses. The fee would generate about $12 billion in revenue over next two years. This would go entirely to local communities in order offset the multiple costs borne by our neighborhoods because of foreclosures and shared between public safety, public education, local governments, redevelopment activities and small businesses."
Bank loans are up … a little. WSJ: "Big banks eased lending standards and businesses sought more loans in the first quarter of the year … But consumer demand for loans is spotty. Demand for auto loans increased, but credit cards and other installment loans remained flat while mortgage demand continued its slide…"
Justice Dept. joins lawsuit against for-profit education chain. NYT: "The Justice Department plans to intervene in a whistle-blower lawsuit charging that one of the nation’s largest for-profit college companies, the Education Management Corporation, defrauded the government by illegally paying recruiters based on the number of students they enrolled … EDMC [is] 40 percent of which is owned by Goldman Sachs…”
China Rethinks Currency
China may be reconsidering currency manipulation. W. Post: “What is changing now is the growing recognition in China that its cut-rate currency has another side: rising local costs and other effects that could take a toll on the social order prized by the country’s political leadership … The managed exchange rate is also limiting the international use of the renminbi, also known as the yuan, frustrating Beijing’s commercial and political aspirations.”
Dean Baker names who doesn’t want more job creation from rebalancing global currency: “… there are powerful interest groups that don’t necessarily want to see the dollar fall. Goldman Sachs, J.P. Morgan and other banks are probably happy to have their dollars go further in buying up Chinese assets. Similarly, Wal-Mart and other major retailers probably are not anxious to see the prices of the goods they import increase by large amounts. And Pfizer, Apple, and Time-Warner would probably be worried that if we anger the Chinese government over its currency policy it might be less anxious to protect their patent and copyright claims.”