MORNING MESSAGE: Vote for the Back to Work Budget. Win in 2014.
OurFuture.org’s Roger Hickey: “Every American who cares about jobs and a healthy US economy should pick up the phone right now, call your Congressperson’s office, and tell whoever answers “I want my representative to vote this week for the ‘Back to Work Budget’ introduced by the Progressive Caucus.” … Democrats shouldn’t delude themselves: we are not going to win back the House in 2014 by campaigning as the guys who have a better plan for cutting the deficit than the Paul Ryan and the Republicans … In 2010, the last mid-term Congressional election, Democrats lost the House because they didn’t run on a plan to create jobs … The CPC Back to Work jobs plan is just full of ideas that creative organizers could make the focus of the next election.”
Battle of the Budgets
Big budget votes this week. Politico: “Warring 10-year budget plans come before the House and Senate this week, even as lawmakers must pass a six-month stopgap bill to avert a shutdown … Majority Leader Harry Reid (D-Nev.) will move ahead with a cloture vote scheduled Monday [on the stopgap bill] if no deal is reached first on amendments … [The budget] will be next up on the Senate floor Tuesday or Wednesday even as Ryan hopes to be moving ahead in the House … for the first time in many, many moons, Washington will witness the House and Senate debating budget resolutions at the same time.
Congress poised to pass bill keeping government open, but at the cost of 1M furloughs. W. Post: “…by locking in $85 billion in across-the-board cuts known as the sequester until Sept. 30, the plan is unlikely to stop the furloughs of more than a million federal employees — some for as many as 22 days … By rebalancing some spending, the new plans would cushion the effects of the sequester, since unspent money from last year could now be used. But neither plan restores funding lost to the automatic cuts or gives agency heads new authority to shift money from program to program to help manage their effects … the military will still absorb half of the sequester reductions. The furlough notices that Defense officials have sent to the majority of the department’s 800,000 civilian employees — announcing up to 22 unpaid days to begin one day a week in April — are not likely to be rescinded.”
British austerity sparks threat of new recession. NYT: “Calls for [Chancellor of the Exchequer George] Osborne to take a break from his relentless efforts to balance the budget and instead find ways to get economic growth back on track intensified in advance of the annual budget, which he is to present to Parliament on Wednesday … ‘The pressure is mounting on Mr. Osborne,’ said Simon Wells, an economist at HSBC. “He’s been in the job almost three years, and over this period the economy has grown by a measly 1 percent.” That compares with 4.9 percent growth in the United States during that span, 3.7 percent in Germany and 1.7 percent in France, according to Mr. Wells. ‘With an election looming in 2015, he needs growth if he is to stabilize the public finances, and he needs it soon,’ Mr. Wells said.”
Fears of European Bank Run
Fears of European bank run after Cyrpus bailout hits small depositors. Reuters: “In a radical departure from previous aid packages – and one that gave rise to incredulity and anger across Cyprus – the ministers are forcing the nation’s savers to pay up to 10 percent of their deposits to raise almost 6 billion euros. The European Central Bank’s pledge to buy euro zone government bonds in unlimited amounts if needed has calmed the beleaguered currency bloc for the past five months. But if investors fear the Cypriot template could be repeated in any future rescues, that calm could be shattered.”
Cyprus may try to amend deal. AP: “Cyprus’ president said Sunday that he is trying to amend a key provision of an unpopular eurozone bailout plan that would tax deposits in the country’s banks to reduce its effect on small savers. But in a nationally televised speech, President Nicos Anastasiades also urged lawmakers to approve the tax in a vote Monday, saying it is essential to save the country from bankruptcy.”
European leaders would accept amendment, but not less money. Bloomberg: “While demanding that the levy raise the targeted 5.8 billion euros ($7.6 billion), finance officials said easing the cost to smaller savers was up to Cyprus.”
Lax regulatory enforcement to blame. Bloomberg BusinessWeek: “Cypriot banks took in billions of euros in deposits, including from Russian oligarchs … Reaching for attractive returns, they invested depositors’ money heavily in Greek loans and bonds—and took a beating when Greece’s economy skidded. The Cypriot banks also invested heavily in the sovereign debt of Cyprus itself, a fatal embrace in which any losses forced on the holders of government debt would wipe out the banks. All this happened under the supervision—clearly too lax, in retrospect—of the European Union, the European Central Bank, and the International Monetary Fund. Cyprus did bring itself into compliance with bank secrecy laws, but according to the German newspaper Spiegel, German officials, in particular, have argued that what’s true on paper may not be true in practice.”
New push to fire FHFA’s acting director Ed DeMarco, from state attorneys general. NYT: “[DeMarco] has refused to put in place a White House proposal to reduce the principal on so-called underwater mortgages … Led by Eric T. Schneiderman of New York and Martha Coakley of Massachusetts, the attorneys general argue that writing down the principal on underwater mortgages … would aid the recovery … Any director would probably be named as a recess appointment because he or she would be unlikely to win Congressional approval … Attorneys general who have signed the letter also include Kamala D. Harris of California, Beau Biden of Delaware, Lisa Madigan of Illinois, Douglas F. Gansler of Maryland, Catherine Cortez Masto of Nevada and Bob Ferguson of Washington.”
Congressional hearings on bad JPMorgan Chase trades put pressure on Jamie Dimon: “Two board members are concerned about the repercussions of Mr. Dimon’s statements on an earnings call last April that dismissed news reports about the trades as a “tempest in a teapot,” say people briefed on the board’s thinking. The concern is that those statements — made months after Mr. Dimon learned the trades had breached the firm’s internal alarm system hundreds of times, according to the Senate report — could put the bank in a precarious situation with regulators investigating the trades.”