Campaign for America's Future News

MORNING MESSAGE: Democrats Must Overcome Clinton Nostalgia

OurFuture.org’s Robert Borosage: “…the GOP’s tribulations should not blind Democrats to their own challenge. The party must free itself from the legacy of former President Bill Clinton and the centrism of his New Democrats … Clinton’s Rubinomics contributed directly to digging the hole we are in … The sad fact is that the old economy is coming back. Austerity continues to starve public investments vital to our future. The banks emerged from the crisis bigger and more concentrated than ever. Despite the domestic natural gas explosion, the trade deficit is still more than $1 billion a day, with the deficit with China setting records.”

Veto Threat Renews Budget Impasse

Obama issues veto threat to GOP spending bills that would lead to more cuts. W. Post: “The Obama administration on Monday threatened to veto any spending bills for the coming fiscal year unless Republicans and Democrats reach agreement on a broader budget plan that ‘supports our recovery and enables sufficient investments’ in White House priorities … [The GOP bills] would shift the burden of [sequester] cuts away from veterans and national defense programs, and force domestic agencies to shoulder the entire burden.”

Veto strategy tied to debt limit. Roll Call: “It’s a more targeted shot across the bow from President Barack Obama, who has insisted he will no longer negotiate around extending the nation’s borrowing capacity …”

Deeply divided House Republican caucus unable to agree on debt limit strategy. W. Post: “On a recent Wednesday afternoon, House Republicans filed into the same Capitol basement room, HC5, where they fought on New Year’s Day … Some wanted more energy exploration, some entitlement reform and one lawmaker pushed to attach antiabortion measures to the legislative package … [Some veteran Republicans] said they fear there are too many extreme budget hawks to approve a deal with GOP votes alone, further hampering their leverage in negotiations with the Senate … Some conservatives are talking about circulating a petition to impose an internal rule forbidding Boehner from advancing legislation that does not have majority support in the Republican Conference…”

Are we headed for another shutdown showdown? Politico: “Could Republicans push President Barack Obama to the point where he feels he has to play shutdown politics when the new fiscal year begins Oct. 1? Monday’s veto threats against the first two bills reported from the House Appropriations Committee hinted strongly that such a fight could be coming. And if the only alternative is to be slowly bled to death by an ever-larger sequester, the White House clearly feels it has to take a stand.”

Global Jobs Picture Awful

Annual UN labor report finds fewer jobs and lower-paying jobs. The Atlantic”s Tim Fernholz: “The employment rate won’t return to pre-crisis levels in emerging markets until 2015, while advanced economies will have to wait until 2017 … But even then, the number of unemployed people is still set to grow 4% to 208 million in 2015. How can the employment rate and unemployment levels rise simultaneously? Because the unemployed are dropping out of the work force … Perhaps worse: job quality is worsening around the globe, even where the unemployment rate is falling.”

American manufacturing hits 4-year low. NYT: “…slumping overseas economies and a pullback in business spending reduced new orders and production … At the same time, consumers are holding back on spending more for factory-made goods, possibly a reflection of higher Social Security taxes that have reduced paychecks this year.”

Another new report shines light on low-wage federal workers. W. Post: “In a forthcoming publication, the National Employment Law Project (NELP) will report on its survey of 567 workers in federally contracted jobs. They make military uniforms, provide janitorial services and drive trucks. According to the report, 74 percent earn less than $10 an hour, 58 percent have no employment benefits and at least 20 percent depend on some form of public assistance.”

Corporations Push Tax Reform

New corporate coalition, Alliance for Competitive Taxation, forms to push revenue-neutral tax reform: “[ACT] is seeking to lower the top corporate rate to 25% from the current 35%, and offset the cost by ending corporate tax breaks and preferences … But the ACT group isn’t putting forward a detailed plan that includes elimination of specific breaks…”

Top GOPer wants to use IRS investigation to propel tax reform. NYT: “It is a difficult leap, even Republicans on the Ways and Means panel admit. Anger is building, not only over the targeting of certain applicants for tax-exempt status but also over a new issue, lavish I.R.S. spending on travel and training. But it is not so easy convincing voters that the answer is to drastically simplify the bloated tax code, then to downsize a sprawling I.R.S. built to police that code.”

Breakfast Sides

Obama to nominate three appeals court judges today. NYT: “Republicans deny being slow to confirm the president’s choices for his cabinet and the courts. But Democrats have said they plan to seek confirmation of many of the president’s judicial and executive branch picks as early as July as a way of highlighting what they say is partisan obstructionism.”

Senate negotiators ready plan to abolish Fannie Mae and Freddie Mac. Bloomberg: “The proposed legislation, which could be introduced this month, would require private financiers to take a first-loss position adequate to cover price declines as steep as those seen during recessions over the past century … [The companies] would be liquidated within five years and the U.S. Treasury would assume responsibility for their existing mortgage guarantees … The new agency, to be named the Federal Mortgage Insurance Corp., would continue existing efforts to build a common securitization platform and would have the capacity to help small lenders issue securities.”

MORNING MESSAGE: The Truman Show Economy

OurFuture.org’s Richard Eskow: “The Truman Show was the 1998 movie in which Jim Carrey slowly realizes that his entire life is a televised illusion … Much of what we hear nowadays hides a grim reality – not just from our leaders, but from us … Housing and car sales looking up? Housing’s being fueled by Fed-driven lending rates, and could be another bubble. Car sales might largely be the result of pent-up demand. Jobs situation improving? Long-term unemployment remains at levels unmatched in modern history … Middle class bouncing back? Americans have recovered less than half the wealth lost in the 2008 crisis, and the wealthiest among us got most of that …”

What Social Security Crisis?

Latest trustees reports show Social Security and Medicare do not need major benefits cuts, notes NYT’s Paul Krugman: “The retirement program’s trustees do foresee rising spending as the population ages, with total payments rising from 5.1 percent of G.D.P. now to 6.2 percent in 2035, at which point they stabilize. This means, by the way, that all the talk of Social Security going ‘bankrupt’ is nonsense … [Medicare] shows spending rising from 3.6 percent of G.D.P. now to 5.6 percent in 2035. But that’s a smaller rise than in previous projections … there are indications that some of the cost-reducing measures contained in the Affordable Care Act, a k a Obamacare, are actually starting to ‘bend the curve,’ just as they were supposed to. And because there are a number of cost-reducing measures in the law that have not yet kicked in, there’s every reason to believe that this favorable trend will continue.”

Europe still stuck with austerity, laments FT’s Wolfgang Münchau: “Did austerity end last week? This is what the headlines suggested when the European Commission gave five eurozone countries more time to meet their fiscal targets. The message from Brussels is that policy is no longer focused on austerity but on structural reforms. I am afraid that this apparent shift in policy amounts to little more than a tactical retreat by the champions of austerity. Rather than being abandoned, austerity has simply been prolonged.”

State option to expand Medicaid under ObamaCare dividing GOP. W. Post: “[Some] governors are unwilling to turn down Washington’s offer to spend millions, if not billions, in their states to add people to the state-federal program for the poor … [GOP Gov. Jan] Brewer, a firebrand tea party favorite who once wagged her finger at President Obama, has declared a ‘moratorium’ on all other legislation until her Medicaid plan, which would add 300,000 Arizonans to the program, is approved. She has backed up her threat by vetoing five unrelated bills. In Ohio and Michigan, the governors are pressing for last-minute compromises before their legislatures adjourn this summer. The Florida legislature, which has adjourned, rejected Republican Gov. Rick Scott’s plan to expand Medicaid.”

Immigration Nears Senate Floor

Immigration hits Senate floor June 10. USA Today: “…proponents of the bill face an even tougher challenge: how to lure more Republicans to support the legislation without alienating Democrats and losing the support of key immigrant rights’ groups … ‘We already have a path to legality in this bill that is quite narrow, quite hard and quite long,’ said Clarissa Martinez, director of civic engagement and immigration at the National Council of La Raza. ‘We are going to be vigilant about opposing any amendments that intend to make that path even harder because that might make citizenship unattainable.’”

Sen. Chuck Schumer predicts Senate will clear immigration reform by July 4. CNN: “And despite warnings from the GOP-controlled House of Representatives that the Senate bill will fail to gain traction, Schumer argued [on NBC's Meet The Press] House Speaker John Boehner will have no choice. ‘Congressman Boehner is in a box. There are about 60 or 70 of his people who are against any immigration reform,’ Schumer said. ‘But at the same time, he knows that the Republican Party will be consigned to a minority party for a generation if they’re anti-immigration.’”

Sen. Marco Rubio seeks border security amendment to further appease conservatives. McClatchy: “[Rubio] is working on a provision that would give Congress, not the Obama administration, the authority to devise a plan to improve border security … ‘The problem is people do not trust this administration and the federal government in general to do the law,’ Rubio said during a recent interview on Fox News.”

Dems open to Rubio plan. Politico: “Democrats may accept Rubio’s proposal because it doesn’t cross their own red line: making the pathway to citizenship contingent upon subjective benchmarks. That doesn’t mean they view it as sound policy. ‘The idea that the American public doesn’t trust the government to do this — they trust Congress less than they trust the government and the idea that you trust Congress on something that they don’t have deep expertise that never ends well,’ [Center for American Progress' Marshall] Fitz said.”

Breakfast Sides

Public Citizen’s Lori Wallach and Ben Beachy slam secret talks for Trans-Pacific Partnership trade deal, in NYT oped: “Although Congress has exclusive constitutional authority to set the terms of trade, so far the executive branch has managed to resist repeated requests by members of Congress to see the text of the draft agreement and has denied requests from members to attend negotiations as observers — reversing past practice. While the agreement could rewrite broad sections of nontrade policies affecting Americans’ daily lives, the administration also has rejected demands by outside groups that the nearly complete text be publicly released.”

The safety net is shredded, argues Elizabeth Lower-Basch in the American Prospect: “[In 2011] the number of poor children in the U.S. had climbed to 16.1 million, but still just 3.4 million children were in families receiving cash assistance under TANF …”

MORNING MESSAGE: The June Fight Over Student Loans

OurFuture.org’s Dave Johnson: “Student loan rates for more than 7.4 million students with federal ‘Stafford loans’ are scheduled to double July 1 from 3.4% to 6.8% if nothing is done … Republicans say students should pay ‘market-rates’, regardless of what people need or how much it does for the country and economy to have a better-educated population … President Obama has offered a similar plan that sets a fixed (once a student has the loan, the rate doesn’t change) rate to the 10-year Treasury note plus 0.9 percent, with no interest rate cap. However repayment obligations are restricted to 10 percent of income … Senator Elizabeth Warren (D-MA) has introduced The Bank on Students Loan Fairness Act that lets students borrow money at a rate of 0.75 percent – matching the rate that the Federal Reserve lets banks borrow at … We are stuck arguing about how much of a crushing debt burden students take on to get educated because ideology dictates what we provide ‘market solutions’ (aka ‘make bankers richer(er)’) instead of just being able to go to college if that’s the right path for them.”

President Elevates Student Loan Fight

President Obama to make Rose Garden pitch for student loan reform. W. Post: “President Obama will appear in the Rose Garden with college students on Friday to pressure Congress to approve his plan to prevent the interest rates on student loans from doubling in July … White House officials said the president’s proposal, in his budget for fiscal 2014, would freeze the low rates and allow an incoming college freshman who borrows $27,000 over four years save an average of $4,000 over the life of those loans. According to the White House, the House plan would require the student to pay $200 more than if the rates rise to 6.8 percent.”

“Universities Show Uneven Efforts in Enrolling Poor” reports NYT: “… many educators see real limits to how eager colleges are to enroll more poor students, no matter how qualified — and the reason is money.”

Social Security, Medicare Reports Released Today

Social Security and Medicare trustee reports due today. The Hill: “The annual report of the Social Security and Medicare trustees, due out Friday, will reignite the debate over how best to reform the two largest federal programs … Deficit hawks are preparing to push for lower retirement benefits and higher insurance premiums for seniors, while seniors advocates are ready to launch an all-out effort to argue that the problems can be mainly be solved by tax increases on workers.”

CBPP’s Kathy Ruffing previews today’s Social Security report: “…fluctuations from year to year in the trustees’ long-term estimates are normal … The estimated year in which Social Security’s combined trust funds … will be exhausted has ranged in those reports between 2033 and 2042 … even after the combined trust funds are exhausted, Social Security could still pay about three-fourths of scheduled benefits using its payroll tax income…”

Record Joblessness From Euro Austerity

Record high European unemployment, again: “Eurostat, the bloc’s statistics office, said unemployment rose to 12.2 percent in April from the previous record of 12.1 percent the month before … At this pace, unemployment in the euro area could breach the 20 million mark this year.”

Food stamp cuts should make you angry, says NYT’s Paul Krugman: “Food stamps have played an especially useful — indeed, almost heroic — role in recent years. In fact, they have done triple duty … Food stamps were especially helpful to children who would otherwise be living in extreme poverty … We desperately needed (and still need) public policies to promote higher spending on a temporary basis … Food stamps greatly reduce food insecurity among low-income children, which, in turn, greatly enhances their chances of doing well in school and growing up to be successful, productive adults … So what do Republicans want to do with this paragon of programs? First, shrink it; then, effectively kill it.”

Striking fast-food workers could give economy fresh stimulus. HuffPost’s Peter Goodman: ” If workers now earning $8 an hour inside warehouses or at fast-food counters manage to get more pay, they are not going to hide the extra money in the Cayman Islands or leave it to their heirs via elaborate trusts. They will go out and spend it almost immediately, boosting their local economies.”

Breakfast Sides

Liberal immigrant advocates worry about Senate leaders’ goal of 70 votes. The Hill: “Pro-immigrant advocates are leery of proposed changes to strengthen enforcement provisions, which could lengthen the already arduous path to citizenship for an estimated 11 million illegal immigrants.”

Setback for EU financial transaction tax. WSJ: “Deep disagreements among 11 European Union states that have pledged to introduce a tax on financial transactions mean the proposal faces delays and could be significantly scaled back…”

Treasury extends mortgage assistance program. NYT: “…the Making Home Affordable [initiatives will] remain in effect through 2015. They were due to lapse at the end of this year … According to the Treasury Department, about 1.3 million homeowners received direct assistance from the Making Home Affordable initiatives. Another 300,000 have received other relief … But the special inspector general charged with overseeing such relief programs, in the most recent quarterly report on April 24, expressed concern at the number of loan defaults among homeowners who have received assistance through mortgage modifications that reduced their payments…”

Veteran congressional analyst Norm Ornstein embraces filibuster reform by simple majority: “The fallout from such a move is unknown but would be substantial and deleterious. It would be far better to return to regular order, and to the use of filibusters as rare events, not routine ones. But if senators who know better — like Lamar Alexander, Bob Corker, Susan Collins, Lindsey Graham, and Saxby Chambliss — jump when McConnell tells them and continue to obstruct nominations, they should expect to reap the whirlwind.”

ObamaCare sparking fresh competition. NYT: “The new health care law is injecting more competition into health insurance markets nationwide, drawing additional insurance companies into states long dominated by a few carriers, Obama administration officials said Thursday … it appears that most consumers will be able to choose from health plans offered by five or more insurers…”

A new Congressional Budget Office report is making headlines for finding that the top 10 income and payroll tax “expenditures” – deductions, credits and other tax breaks – amount to $12 trillion over a 10-year period. That’s more than Medicare, Social Security or defense spending.

But like with Medicare, Social Security or defense spending, not all of that money is wasted or unfairly distributed. That $12 trillion includes child tax credits, mortgage deductions and health care deductions.

Nevertheless, a whopping $2 trillion of that goes to folks who make more than $450,000 a year. In other words, 17 percent of all tax breaks goes to the top 1 percent.

$2 trillion is about double the 10-year cost of the sequester.

The CBO cautions that it’s not as simple as ending a tax break to recoup that money, because ending a tax break can change people’s behavior. Still, President Obama’s proposal to cap the benefit of itemized deductions at a 28 percent rate, down from the top rate of 39.6 percent, would bring in about $500 billion, or about half a sequester.

That money is just sitting on the table.

MORNING MESSAGE: Stop It. This Is Not a Good Economy

OurFuture.org’s Dave Johnson: “The economy is slowly improving. Car sales are rising, housing has ‘bottomed’ and started back up … These small gains are enough for our media opinion-elite to declare good times are rolling … But: We still have a jobs gap of around 10 million … All the gains from economic growth are going to the top 1 percent – or fewer … Wages are and have been stagnant … Most of the new jobs are low-wage jobs … College graduates are saddled with debt …. 13 million homes still are ‘under water’…”

Massive Tax Breaks Benefiting The Wealthy

CBO finds “Washington ‘Spends’ More on Tax Breaks Than on Medicare, Defense, or Social Security” reports The Atlantic: “Washington’s tax spending budget — comprised of everything from mortgage deductions to the child tax credit to lower tax rates on capital gains — is so massive, it’s technically larger than Medicare, Defense, or Social Security. The tax spending budget is equal to 1/17th of the US economy.”

And those tax breaks heavily favor the wealthy. LAT: “… the top 10 major tax breaks ‘are distributed unevenly across the income scale,’ with the top 1% of households — those who make more than $450,000 a year — receiving more than 17% of the savings in 2013.”

Meanwhile … “50 Million Americans Are Going Hungry As Congress Considers Gutting Food Stamps” reports ThinkProgress: “According to the International Human Rights Clinic of NYU Law School, the four biggest food assistance programs fall short for as many as 50 million food insecure households. Eligibility requirements are already so strict that one in four households classified as food insecure were still considered too high-income to receive benefits from the Supplemental Nutrition Assistance Program (SNAP).”

Middle Class Sequestered

Pentagon sends out furlough notices. W. Post: “The Department of Defense has begun delivering furlough notices to civilian employees, who are scheduled to start taking up to 11 unpaid days beginning July 8. An estimated 652,000 Defense employees, about 85 percent of the department’s civilian force, are receiving the notices … But the union representing many defense employees said the furloughs are not a done deal, and it is urging workers to appeal the action…”

33,000 fewer college students will get work-study jobs due to sequestration reports W. Post.

Breakfast Sides

New internal docs reveal tensions over decision not to indict banks for money laundering. NYT: “In the case of the banks suspected of laundering billions of dollars through the American financial system — HSBC and Standard Chartered — authorities decided last year to level hefty fines rather than seek criminal charges. Those decisions raised concerns in Washington that some banks, having grown so large and interconnected, are too big to indict.”

Source claims Reid has the votes to reform the filibuster with simple majority. The Hill: “‘Reid has 51 votes,’ said a liberal advocate for filibuster reform who has met with Democratic senate offices to push for reform … A senior Democratic aide pushed back on the notion that outside groups know how the votes now stand on the controversial tactic within the Senate Democratic caucus.”

MORNING MESSAGE: A Vision For Social Security

OurFuture.org’s Richard Eskow: “Social Security benefits lag far behind those of other developed countries. A new analysis of census data shows that elder poverty is much higher than we first realized. And yet the discussion in Washington is of cutting, not expanding, it. The number of impoverished seniors would rise sharply if that happened, or if the Medicare cuts currently under discussion became law. The numbers say that Social Security should be increased, not cut, and most Americans agree.”

How To Make Corporations Pay Their Fair Share

Tax multinationals on their sales, not profits, to end foreign tax evasion, argues W. Post’s Harold Meyerson: “If Apple gets 60 percent of its revenue from sales in the United States, Apple should pay U.S. taxes on that revenue. Let France collect taxes from Apple on its sales in France, China on its sales in China and so forth. Taking production and the location of corporate headquarters out of the equation would end the noxious practices of placing factories where the taxes are lowest and creating dummy subsidiaries to funnel profits through low-tax countries.”

National Priorities Project readies new report on tax breaks for the wealthy and corporations: “Together, all tax loopholes, deductions and credits in the U.S. tax code add up to around $1.2 trillion this year. That’s about 50 percent more than this year’s federal budget deficit.”

Switzerland may settle tax-evasion cases with US. NYT: “The Swiss government is considering a proposal to disclose bank client names and pay a multibillion-dollar fine to the United States to help resolve a long-running dispute between the two countries over the handling of tax-evasion cases … The fine, which could reach at least $7 billion to $10 billion according to these people, could be paid in part by the Swiss government, which would then seek reimbursement from the banks.”

Might CFPB Filibuster End?

Possible break in CFPB filibuster. Roll Call: “Sen. Rob Portman has been conferring with Richard Cordray, head of the Consumer Financial Protection Bureau, as part of an effort to clear the way for his Senate confirmation … [Portman] brought together some Democratic and Republican senators to seek common ground on changes within the CFPB that could address GOP concerns about the independent financial regulatory agency. For example, the aide said, Portman suggested the idea of creating an inspector general within the CFPB.”

Fight over three vacancies on D.C. Circuit appeals court impacts several key issues. The Hill: “The court is in a position to help decide crucial battles over the Affordable Care Act, the Dodd-Frank Wall Street reform law and Obama’s quest to counter the effects of climate change … ‘The D.C. Circuit has become largely a conservative court, producing largely anti-regulatory decisions, most of which are not appealed,’ said Craig Holman, a government affairs lobbyist for Public Citizen. ‘These three new nominations are imperative to bring a sense of balance back to the court.’”

Austerity Still Not Helping Anybody

W. Post argues that “the economy is holding up surprisingly well in a year of austerity”: “In a year when tax increases and spending cuts by the federal government were expected to bleed life out of the economy, the strengthening housing and financial markets are proving to be more powerful than acts of Congress.”

Dean Baker debunks: “Given the economy’s trend rate of growth is between 2.2-2.5 percent, this means that we were at best making up lost ground at the rate of 0.3 percent annually. The Congressional Budget Office estimates that the economy is 6.0 percent below its potential. At the first quarter growth rate it will therefore take us at least twenty years to get back to potential GDP.”

W. Post’s Greg Sargent mocks GOP whining about “grand bargain” talks: “Their complaint, per the Hill, is this … ‘Some Republicans think the president has become distracted from the deficit by intensified public controversies’ … Of course, Republicans themselves are the ones that are working feverishly … to tie Obama to these ‘public controversies.’ What’s more, the GOP leadership has said that no budget compromise is possible if it involves any concession on revenues, which is to effectively say that no compromise is possible unless Democrats make 100 percent of the concessions. And not only that, but as Steve Benen notes, Obama has already offered Republicans the entitlement cuts they claim they want as part of a larger deal, only to have Republicans suddenly decide they no longer want those cuts, after all.”

MORNING MESSAGE: Apple: Bad Model for “Tax Reform.” California, New Tax Thinkers, Chart a Better Way.

OurFuture.org’s Roger Hickey: “In testimony last week Apple CEO Timothy Cook proudly described the ingenious ways in which Apple tax attorneys have gamed the U.S. tax system … Cook also laid out a plan for ‘reform’ of corporate taxes that, if passed, would make it easier for other corporations to follow Apple’s lead … [But in] a very important article in The Washington Post’s Wonkblog May 23, reporter Jia Lynn Yang summarized the thinking of a new group of tax thinkers and the successful tax experience of states like California that have tried a whole new approach … ‘If a company sells its product or services in a given state, it pays a tax proportionate to the sales in that state.’ … This new tax system would provide companies absolutely no tax incentive to move production to lower-tax countries.”

Stuck on Sequester

Sequester grounds Air Force. W. Post: “…the Air Force has stood down 13 combat squadrons, nearly one-third of its active-duty fighter and bomber squadrons, to meet a $600 million reduction in money available for flying and readiness dictated by the mandatory cuts. The Air Force has retained enough combat power to meet current requirements around the globe, including in Afghanistan and any immediate crisis on the Korean Peninsula. Beyond that, senior officers said, it’s a question mark.”

W. Post details “Sequester’s toll on summer tourism”: “Impacts of the cuts include shuttered exhibit areas at Smithsonian museums, a halt on White House tours, reduced hours at the National Archives, closings and reduced hours for visitors centers at certain national parks, and scaled-back summer programs for Rock Creek Park in D.C.”

Recent Seattle bridge collapse renews attention on lack of infrastructure investment. Bloomberg: “…the federal, state and local governments need to spend $8 billion a year more to catch up with $76 billion in unmet needs for deficient bridges … Washington [State] lawmakers are considering a 10 cent per gallon increase to the state’s 37.5 cent-per-gallon fuel tax in a special session this week to help pay for repairs …

Republicans complain President hasn’t followed through on “grand bargain.” The Hill: “Senate Republicans who shared laughs with President Obama over dinner at the Jefferson Hotel in March are grumbling … They say the White House has not set up a process for negotiating controversial reforms to Social Security, healthcare programs and the tax code, and that absence of basic organization has stalled negotiations … Obama told Republicans who had dinner with him on March 6 that a deficit deal would need to happen by August. That timeline has now been pushed until the fall and may even slide to the end of the year.”

Immigration Reform On Track

Anti-immigrant conservatives unable so far to derail reform. W. Post: “Unlike six years ago, the loudest voices of dissent were drowned out by a disciplined performance from a bipartisan group of eight senators who teamed up to fight off the most serious threats to the bill … Republican critics sought … to force the four Gang of Eight members on the committee … into difficult votes … the eight met in private before each committee hearing, hashing out which amendments they would support and which oppose as a united coalition. Senate aides said amendments were rejected if either side felt they would shatter the deal.”

Gay rights activists still supporting immigration bill despite loss on green cards for binational gay couples. NYT: “Gay rights advocates, stepping back from the loss, said the overhaul still contained many measures that could benefit gay immigrants, most of which came through the committee gantlet unscathed … The bill would also eliminate a one-year deadline for filing asylum claims, which gay advocates have long challenged, saying it effectively excludes many foreigners fleeing persecution because of sexual orientation. In the committee, Senator Richard Blumenthal of Connecticut, a Democrat, added several amendments gay groups had sought, to limit solitary confinement and ban discrimination in immigration detention.”

President Prepares Plan To End Judicial Obstruction

President plans major judicial nomination announcement. NYT: “President Obama will soon accelerate his efforts to put a lasting imprint on the country’s judiciary by simultaneously nominating three judges to … fill the three vacancies on the 11-member United States Court of Appeals for the District of Columbia Circuit …He will effectively be daring Republicans to find specific ground to filibuster all the nominees … Republican senators are pushing a proposal to eliminate the three empty slots from the court by shifting them to circuits in other parts of the country.”

USA Today edit board slams obstruction of judicial noms: “A study by the non-partisan Congressional Research Service shows that non-controversial judicial nominees — those eventually confirmed with fewer than five ‘no’ votes — face a wait of nearly seven months, up from 70 days during Ronald Reagan’s presidency. According to the Adminstrative Office of the U.S. Courts, 32 judgeships with high workloads have been unfilled for so long that they qualify as ‘judicial emergencies.’ In other words, immigration issues, Social Security appeals and other federal cases are piling up.”

MORNING MESSAGE: Washington’s Literal Sinkhole, And Our Idiotic Fixation On Deficits

OurFuture.org’s Robert Borosage: “On Tuesday, a “sinkhole” suddenly sank in Washington D.C. three blocks from the White House. Not a metaphor, but a massive hole in the road as “long as a Ford Explorer,” double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897. The sinkhole will take at least five days to “repair.” There is an idiocy about our current national politics that is simply stupefying. We are sitting idly, watching, and suffering, as our nation disintegrates into a run-down backwater. Sinkholes now are becoming a life-threatening peril.  Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future. Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future.”

Troubled Bridge Collapses Over Water

Cars, people sent tumbling into Skagit River as I-5 bridge collapses [Komo News Network]: “The Interstate 5 bridge over the Skagit River collapsed Thursday evening, dropping two vehicles into the water and injuring three people. Both the northbound and southbound portions of the bridge collapsed into the river sometime before 7 p.m., according to Washington State Patrol trooper Mark Francis. … Bart Treece with WDOT was unsure when the bridge was last inspected. ‘All of our bridges in the area are pretty old,’ he said. The bridge is not considered structurally deficient but is listed as being ‘functionally obsolete’ – a category meaning that their design is outdated, such as having narrow shoulders are low clearance underneath, according to a database compiled by the Federal Highway Administration. The bridge was built in 1955 and has a sufficiency rating of 57.4 out of 100, according to federal records. That is well below the statewide average rating of 80, according to an Associated Press analysis of federal data, but 759 bridges in the state have a lower sufficiency score.”

Salon’s Natasha Lennard writes that the bridge collapse is part of “an aging infrastructure badly in need of repair”: “In his February State of the Union address, President Obama called for $50 billion in new spending on ‘an aging infrastructure badly in need of repair.’ The I-5 bridge collapse in Washington state Thursday evening calls attention to an all-too neglected infrastructure in the context of decade of expensive war-waging. According to AP analysis the collapsed bridge, built in 1955, was not considered “structurally deficient” but is listed as being ‘functionally obsolete” – ‘a category meaning that the design is outdated, such as having narrow shoulders and low clearance underneath, according to a database compiled by the Federal Highway Administration.’”

Sequester Update

Post-ABC poll: Most Americans still disapprove of sequester [Washington Post]: “The government-wide spending cuts known as the sequester remain unpopular for most Americans, with little difference in opinion across party lines, according to a Washington Post-ABC poll released Friday. Thirty-seven percent of Americans say they have felt a negative impact from the sequester, the poll shows. The data indicates 56 percent of Americans disapprove of the sequester, which is roughly on par with the 57 percent who felt that way in April and the 53 percent in March. Political affiliations seem to matter little, with 54 percent of Republicans disapproving of the cuts, compared to 59 percent of Democrats.”

Sequester Guts Wildfire Prevention, Sets Up Bigger Blazes [Mother Jones]: “Last year saw the third-worst wildfire season in five decades; the Southern California fire that threatened thousands of homes earlier this month looks to be only the first flash of what the National Oceanic and Atmospheric Administration announced last week will be an above-average season for much of the Southwest. But the sequester took a 7.5 percent bite out of the Forest Service’s budget, nearly half of which is spent fighting wildfires. That means there will be 500 fewer pairs of boots on the ground and 200,000 fewer acres treated to prevent fires; the agency’s next proposed budget cuts preventative spending by a further 24 percent. It’s all part of what fire ecologists, environmentalists, and firefighters interviewed by Climate Desk describe as an increasingly distorted federal budget that has apparently forgotten the old adage about an ounce of prevention: It pours billions ($2 billion in 2012) into fighting fires but skimps on cheap, proven methods for stopping megafires before they start.”

Three big federal agencies to close Friday [Washington Post]: “Three of the largest federal agencies will close to the public on Friday, the first time since the government shutdowns of the 1990s that large corners of the government have ceased operations on a weekday. The mass furlough of 115,000 employees at the Internal Revenue Service, Environmental Protection Agency, Department of Housing and Urban Development and the small Office of Management and Budget — 5 percent of the federal workforce — is happening because of the budget cuts known as sequestration. Even in a government shutdown, thousands of essential employees are still called to work. In this case, the only ones in the office will be a small number of Senate-confirmed presidential appointees who are exempt from furloughs and emergency responders.”

War Is Over?

Obama seeks to redefine the US war on terror [Agence France-Presse]: “President Barack Obama laid out new guidelines for drone strikes and launched a fresh bid to close Guantanamo, warning that a “perpetual” US war on terror would be self-defeating. Obama told Americans their country was at a crossroads, and must move on from the counterterrorism policies deployed after the September 11 attacks to confront a new era of diverse global threats and homegrown radicals. He argued that the idea of a “boundless” conflict everywhere radicalism took root, be it in Pakistan or Arab Spring nations or Somalia, was now obsolete.”

Time’s Michael Crowley asks, “Can Obama end the war on terror?”: “In his broad address on drone strikes, al Qaeda terrorists, and the prison at Guantanamo Bay Thursday, Barack Obama wrestled with some of the hardest moral questions that have defined national security policy since September 11: Who is the enemy? Who can we kill, and where, and how? What to do with suspected terrorists we hold in captivity? And when, if ever, will this war as we know it end? Along the way, Obama issued a strong defense of his reliance on drones to kill suspected terrorists in places where other military means are infeasible or risk more civilian deaths. …But while Obama has an obviously sincere desire to bring the war against al Qaeda to a close and close the books on Guantanamo, however, he also lacks the power to make these things happen on his own. The future of the terror war that Obama inherited from George W. Bush and Dick Cheney depends on some very open questions.”

Republicans are deriding Obama’s speech as a “retreat”: “Republican lawmakers warned that President Barack Obama capitulated to US enemies in his counterterrorism speech Thursday by renewing his call to close Guantanamo and retreating to a pre-9/11 mindset. … Obama argued that the United States would not be able to use force everywhere that radicalism takes root, and in essence cautioned against a ‘perpetual war’ that could ultimately prove self-defeating. But House leaders warned that, after the Boston bombings and signs that terror networks were regrouping in parts of North Africa and elsewhere, now was not the time for a weakened security posture.”

School Daze

Elizabeth Warren Student Loans Bill Endorsed By Several Colleges, Organizations [Huffington Post]: “Back on May 8, [Sen. Elizabeth] Warren announced her plans to set student loan interest rates at the same level big banks receive from the Federal Reserve. Come July 1, some student loan rates are set to double from 3.4 percent to 6.8 percent, prompting Warren to push for legislation that reduces the level to 0.75 percent. By Thursday, Warren’s website showcased that more than two dozen organizations have endorsed the measure. Among the notable supporters were major universities like the Massachusetts Institute of Technology and groups like American Federation of Teachers. Coupled with the support from outside sources is a strong core of political colleagues behind the bill. Sens. Mark Begich (D-Alaska), Barbara Boxer (D-Calif.), Mary Landrieu (D-La.), Claire McCaskill (D-Mo.), Jeff Merkley (D-Ore.) and John Rockefeller (D-W.Va.) have joined on as co-sponsors, and Rep. John Tierney (D-Mass.) has introduced a corresponding House version of the bill.”

Massachusetts educator Adam Kirk Edgerton woke up mad about the impact of recent budget cuts on his Upward Bound students: “You can blame only the Republicans for sequestration — fine. I won’t even bother to argue that point. But think about how Obama and his cabinet members are allocating money within their departments. In the Department of Education, Obama’s dominant policy engine is Race to the Top, which aims to implement standards across state lines with financial incentives. I won’t even bother to argue why a financially-driven education system could create perverse incentives for administrators and teachers. What I will argue is this: a Democratic administration is deliberately funneling funds away from direct services to poor people and towards administrators and consultants and bureaucrats. Race to the Top pays some pretty good grant-funded salaries to curriculum writers in Central Offices. It puts on a good conference (I’ve been to one). What it doesn’t do is teach kids, or shelter them in safe homes, or feed them healthy food.”

MORNING MESSAGE: Apple Pie is American, But Apple Computer Isn’t

OurFuture.org’s Richard Eskow: “We should treat Apple and other formerly American multinationals as neutral entities with whom we can cooperate at times for our mutual benefit. We should encourage them to invest in the United States and hire American workers, as we do with other non-American corporations. What we shouldn’t do is treat them as US corporations. The very concept is probably obsolete in the multinational arena.”

Apple Testimony Doesn’t Add Up

Apple lied, says NYT’s Joe Nocera: “[CEO Tim Cook] said that the low taxes Apple pays overseas is on the profits of its overseas sales. Not to put too fine a point on it, but this was a flat-out lie.”

Apple can’t square its position on immigrant visas with its tax avoidance, argues TNR’s Alec MacGillis: “If Apple really cares about a shortage of homegrown engineering talent, then it should pay taxes to fund the institutions that could address that problem.

Immigration Reform Pressured From Left and Right

Sen. Marco Rubio seeks further changes to win additional GOP support for immigration reform. NYT: “The current bill sets up a sequence of new border measures that must be in place before illegal immigrants can gain legal status and eventually citizenship. Under the current bill, the Department of Homeland Security is directed to produce and carry out the border security plan … [Rubio] would take the authority away from the department and move the responsibility to Congress.”

Rubio is not alone. Politico: “Many of the almost two dozen Republicans identified as possible supporters by the Gang of Eight are demanding changes that would make the bill significantly more conservative. They want stricter border security, tighter control on government benefits for newly-documented immigrants and tougher requirements along the pathway to citizenship. Go too far on any of those elements, and liberal Democrats — who aren’t thrilled with many aspects of the bill already — begin to pull away.”

Dems split over proposed health care language in House draft immigration bill. Politico: “The House Democratic Caucus chairman knew that he couldn’t endorse a proposal to deny citizenship to undocumented immigrants who took government health subsidies … [Rep. Xavier] Becerra is torn between two roles: his part in the bipartisan group and his position in Democratic leadership, where he is under pressure from a progressive caucus not to give too much ground to the Republicans.”

House Dem leaders unsure if backing bipartisan House bill helps or hurts. The Hill: “…some Democrats and outside advocates are arguing the party should rally behind the Senate bill and pressure House Republican leaders to bring it to the floor once it passes the upper chamber. Yet some members of the bipartisan House group are worried … that walking away from the bipartisan agreement could kill immigration reform altogether.”

More than 100 conservative economists back immigration reform. LAT: “The economists cited the nonpartisan Congressional Budget Office in noting that an immigration overhaul could increase average economic growth over the next decade by 0.1% and reduce the federal deficit by more than $300 billion.”

Trade Talks Threaten Wall St. Reform

“Wall Street Seeks Dodd-Frank Changes Through Trade Talks” reports Bloomberg: “‘The trade talks could easily become a Trojan Horse,’ said Marcus Stanley, the policy director for Americans for Financial Reform … In separate letters on the EU and Asia-Pacific pacts, the industry coalition said negotiators should draft rules limiting what regulators can do in the name of protecting financial stability. The letters also urged using the pacts to curb extra-territorial rules that can reach beyond U.S. borders, like ones currently being considered on financial derivatives.”

Justice Dept. hasn’t examined whether bank prosecutions would harm the economy, reports HuffPost: “Testimony by a top Justice official and fresh documents made public on Wednesday during a House financial services committee hearing revealed that financial regulators and the Treasury Department did not provide warnings to prosecutors weighing the economic consequences or fallout in the financial system of criminal indictments against large financial groups … The hearing comes as DOJ, Treasury and financial regulators battle perceptions that they consider some large financial institutions are either too big or too important to the economy to fail.”

Breakfast Sides

“Harry Reid mulling filibuster overhaul” reports Politico: “Publicly, Reid has been coy about whether he’ll try to alter the Senate’s hugely controversial rules to help confirm President Barack Obama’s nominees … But it’s clear the majority leader wants to get something done and find 51 Democrats to support … changing the rules so executive branch nominees can no longer be blocked by filibusters requiring 60 votes to break.”

Tesla Motors pays back government loan nine years early. NYT: “‘Tesla is repaying early and it’s a great vindication,’ said Greg Kats, president of Capital-E, a firm that invests in clean-energy companies. ‘Tesla has really helped push the Big Three automakers down the energy efficiency track.’ The Energy Department on Wednesday said that losses on its loans were equivalent to 2 percent of its $34 billion portfolio.”

CBO examines carbon tax. WSJ: “Instituting a carbon tax could help reduce the deficit and ‘produce incremental benefits’ for the environment, but could also raise the cost of many goods and services … the economy as a whole would benefit if the tax was used to reduce the deficit.”

MORNING MESSAGE: What’s Wrong With Jamie Dimon is What’s Wrong With America

OurFuture.org’s Richard Eskow: “After today’s shareholder votes at JPMorgan Chase, Mark Gongloff is right to describe Dimon as a ‘cult leader.’ … But that’s not the end of the story. It’s too easy to externalize responsibility by pinning the blame on villains. … The Jamie Dimon story shows that something more fundamental needs repair – in our economy, in our society, in us.”

Immigration Reform Clears Committee, Stings Labor

Bipartisan immigration reform bill clears committee. Time: “The Senate committee debating a landmark immigration bill approved the bipartisan measure on Tuesday night, voting 13 to 5 to send the amended package to the floor. Ten Democrats on the Senate Judiciary Committee joined with three Republicans, including two of the four GOP authors of the bill, in support of a sweeping deal that would open a path to citizenship for some 11 million undocumented immigrants, beef up border security and refashion the clunky U.S. immigration system.”

Sen. Orrin Hatch secures amendment helping tech firms win visa battle over unions. W. Post: “The compromise amendment lifts the requirement that companies first offer tech jobs to Americans for all firms except those that depend on foreigners for more than 15 percent of their workforce and relaxes the formula for determining the annual number of foreign high-tech workers.”

AFL-CIO’s Richard Trumka vows to fight tech visa change on Senate floor. The Hill quotes: “Hatch’s amendments change the bill so that high tech companies could functionally bring in H-1B visa holders without first making the jobs available to American workers. Hatch’s amendments would mean that American corporations could fire American workers in order to bring in H-1B visa holders at lower wages.”

No Republican filibuster planned. The Hill: “Senate Republican Leader Mitch McConnell (Ky.) on Tuesday said he would not try to block immigration reform from reaching the floor despite the opposition of some conservative leaders … While McConnell stopped short of pledging his support for the legislation, he praised the Gang of Eight’s work and said he is ‘hopeful’ of passing a comprehensive immigration fix through the Senate.”

But more Republican concessions eyed. Roll Call: “…though the deal worked to secure Hatch’s backing for the immigration framework in committee, he and other Republicans are demanding more concessions before they back a final bill on the Senate floor. ‘I am going to vote this bill out of committee because I’ve committed to do that once this amendment passes,’ Hatch told his colleagues … ‘But make no mistake about it, those other four amendments that are Finance Committee amendments, we are going to reserve them for the floor, but I’ve got to get those or we’ll never pass those bills.’”

Apple Faces Senate

Senate hearing goes light on Apple CEO Tim Cook. TNR: “His interrogators seemed eager to prove how much they use Apple products … The problem, for [subcommittee Chair Sen. Carl] Levin, was that he made no determination that the company did anything illegal. He berated Cook for doing exactly what Congress has allowed it to do, by failing to update its tax code for a world where capital is mobile and intellectual property is more valuable than physical property.”

ThinkProgress offers “How To Close The Loopholes That Made Apple’s Tax-Dodging Completely Legal”: “[Economist Alan] Auerbach suggests that multinational companies pay their taxes only in the countries that use their products, so that moving money across borders doesn’t alter the taxes they owe in any given country. Tim Fernholz of Quartz explains that Auerbach’s idea strips ‘the ability to move US profits overseas’ artificially, as present law has encouraged Apple to do. With a few other tweaks, this could make it more attractive to invest in the U.S.”

Some corporate cash, parked offshore to avoid taxes, actually in US banks. NYT: “Apple’s $102 billion in offshore profits is actually managed by one of its wholly owned subsidiaries in Reno, Nev., according to the Senate report on the company’s tax avoidance. The money is tracked by Apple company bookkeepers in Austin, Tex. What’s more, the funds are held in bank accounts in New York. Because the $102 billion is technically assigned to two Irish subsidiaries, however, the United States tax code considers the money to be under foreign control, and Apple is legally entitled to avoid paying taxes on it. Tax experts say that such an arrangement is not uncommon among American multinationals.”

Fed Presses Europe To Quit Austerity

Fed Reserve member presses European central bank to adopt monetary stimulus. NYT: “The public comments were highly unusual. While central bankers from different countries frequently confer in private and offer advice and criticism to their peers behind closed doors, it is rare for any official to go public with even the mildest criticism of another central bank … The European Central Bank has given no signals that it is seriously considering quantitative easing.”

Keynesians winning the argument, to no avail, notes NYT’s Eduardo Porter: “For despite all this intellectual firepower, governments across the industrial world are zealously tightening their belts. The Italian government has cut its annual budget deficit to 3 percent of G.D.P. last year from 5.5 percent in 2009, and the Irish government has slashed it to 7.6 percent from 13.9 percent. In Britain … the government of Prime Minister David Cameron reduced the deficit to 6.3 percent of G.D.P. last year, down from 11.5 percent in 2009 … The German government is running a budget surplus. And despite the public’s belief that Washington is engaged in a spending spree, the deficit in the United States narrowed to 7 percent of G.D.P. in 2012 from 10.1 percent in 2009.”

“Sequester Part 2″ coming in January. The Hill: “Unless President Obama and congressional leaders reach a deficit grand bargain, experts say Congress is on track to put most spending on autopilot with another continuing resolution.

Amendment to protect food stamps from cuts fails on Senate Floor reports HuffPost.

Sens. Paul and McCain have floor flight over debt limit. Roll Call: “Republican Sens. John McCain of Arizona and Susan Collins of Maine joined Budget Chairwoman Patty Murray, D-Wash., on the floor in support of going to conference without imposing special mandates on conferees. McCain objected to a bid by Sen. Rand Paul, R-Ky., to require that Senate budget negotiators not provide for an increase in the debt limit … Allowing a debt limit increase through budget reconciliation would require agreement from House GOP budget conferees, which would be led by Rep. Paul D. Ryan, R-Wis. McCain highlighted that point during a floor exchange with Collins. ‘Isn’t that a little bit bizarre?’ McCain asked Collins.”