MORNING MESSAGE: Too Big To Fail. Too Big To Jail.
OurFuture.org’s Robert Borosage: “Holder’s outrageous admission means that bankers operate – and know they operate – above the law. That renders all the argument about regulations and legal limits risible … they can trample the laws, mislead the regulators and defraud their customers, bolstered by the confidence that the laws will not apply to them. Holder’s argument, however, is indefensible … If the Fed and Treasury can ‘foam the runway’ to protect otherwise insolvent banks from collapse, they surely could insure that a bank survives while its executives are held personally responsible for their crimes. Putting a few bankers in jail and holding them personally accountable for their frauds would do much to bring sobriety back to Wall Street.”
Holder Tells Congress Bank Size Thwarts Prosecutions
Banks are too big to easily prosecute, Attorney General tells Congress. Bloomberg: “Criminal charges against a bank — something that could threaten its existence — may also endanger the national or global economies in the case of the largest ones, because of their size and interconnectedness. That has ‘made it difficult for us to prosecute’ some of those institutions, Holder said today at a Senate Judiciary Committee hearing … While Holder didn’t single out any specific institutions, he said bank size was something Congress would ‘need to consider.’”
Swiss vote on exec pay rattles American boardrooms. Time: “The concern arising in American boardrooms is … [w]hether this groundbreaking legislation will be contained within Switzerland, and Europe, or set a new precedent for corporate compensation and bonuses in the U.S., where, according to a 2011 study by a consulting firm Towers Perrin, top executives make 269 times more than average workers … Robert Jackson, Associate Professor at Columbia Law School … believes that ‘the Swiss precedent will give the advocates important ammunition if they choose to press the U.S. Congress to adopt binding “say on pay” rules here [but] American regulators have preferred to wait and see how those changes play out in Europe before pursuing them here,’ he notes.”
President, GOP Restart Grand Bargain Discussions
President and GOP senators talk “grand bargain” over dinner. The Hill: “Senate Republicans are more optimistic about the prospect of a grand bargain on the deficit after an intimate dinner with President Obama … GOP senators say no new policy ground was broken as both sides held fast to their battle-tested positions on taxes and spending, but the meeting helped thaw frosty relations and improve the prospects of a deal eventually.”
President lunches with Rep. Paul Ryan today reports USA Today.
Ryan trying to untie GOP around Medicare cuts for people now 56 years old and under. The Hill: “[Ryan] argues the change is necessary to help him produce a budget next week that balances within 10 years … The problem for Ryan is that many Republicans have said his budget would not touch Medicare benefits for anyone who is already 55 years old … Republicans can afford to lose only 15 Republicans in what is expected to be a party-line vote.”
NYT’s Thomas Edsall explores the disconnect between Washington and the public on retirement security: “Cutting benefits is frequently discussed in the halls of Congress, in research institutes and by analysts and columnists. The idea of subjecting earned income over $113,000 to the Social Security payroll tax and making the Medicare tax more progressive – steps that would affect only the relatively affluent — is largely missing from the policy conversation. The Washington cognoscenti are more inclined to discuss two main approaches that are far less costly for the affluent: means-testing of benefits and raising the age of eligibility for Social Security and Medicare. (Sidenote: policy makers and national journalists who weigh in on this issue generally earn more than $113,700 a year.)”
House passes bill to keep government open, give military flexibility on sequester cuts. HuffPost: “Democrats criticized the bill for granting flexibility to the Pentagon to reallocate funds to higher-priority programs, while doing nothing to mitigate the impact sequestration would have on domestic programs … the Senate will move on its own government funding bill next week, which is being crafted by Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.). The Senate version will most likely include additional funding flexibility for domestic programs.”
Sequester will still slam the poor. NYT’s Charles Blow: “The pain of the sequester is that kind that lurks: a slow, creeping disaster mainly affecting those Americans on the fringes who are barely inching their way back into a still-bleak job market — or hopelessly locked out of it — and poor Americans too old or too young to participate in it … The director of the Congressional Budget Office has estimated that the sequester could cost 750,000 jobs this year. Those are not likely to be lost from the top down but from the bottom up.”
House bill requires post office to keep Saturday delivery. NYT: “The post office said last month that it had the authority to end mail delivery on Saturdays because the spending measure passed last year did not explicitly include the postal provision. On Wednesday, [Rep. José] Serrano said that issue had now been resolved.”