Progressive Breakfast: No 2nd Stim ... For Now

No Second Stimulus ... For Now

W. Post quotes Speaker Pelosi on additional stimulus proposal: "'I don't think you ever close the door to being prepared for whatever eventuality may come,' [Pelosi] said at her weekly news conference but emphasized that a second package is 'just not right now something that's in the cards.' Some prominent economists have suggested that a second stimulus measure, costing several hundred billion dollars, may well be needed. Mark Zandi, the chief economist at Moody's Economy.com who has become a key adviser to House Democrats, said this week that 'policymakers need to do more. I don't think we're done. . . . I think another stimulus package is a reasonable probability, given the way things are going.'"

Stimulus update today. AP: "President Obama is getting an update on the nation's economy from former Federal Reserve Chairman Paul Volcker. Volcker is chairman of Obama's economic recovery advisory board. He is set Friday to brief the president and his economic team on how the $787 billion stimulus package is working. After the private meeting, the president plans to give brief remarks."

NYT on global stimulus plans: "In the global debate about confronting the global economic crisis, Japan came down firmly on the side of the United States on Friday, saying that it backed American calls for more stimulus spending and that it would outline a new economic package by April."

Bloomberg on massive loss in household wealth: "U.S. household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed. ... The erosion of Americans’ wealth is one reason that analysts project households will save more in coming months, restraining spending and economic growth ... The report underscores economists’ judgments that consumer spending isn’t in a sustained recovery after better-than- projected results in the first two months of the year."

For the silver lining file, trade deficit narrows. Bloomberg: "The U.S. trade deficit probably narrowed in January to the lowest level in more than six years as Americans cut purchases of everything from OPEC oil to toys made in China, economists said before a report today."

Republicans For EFCA?

The Plum Line: "Senior officials with the powerful AFL-CIO have privately assured GOP Senator Arlen Specter that they’ll throw their full support behind him in the 2010 Senate race if he votes for the Employee Free Choice Act..."

Markos at Daily Kos reacts: "...labor support would be far more valuable in a Democratic primary, with Gov. Ed Rendell providing further efforts to clear the field of any viable opponents for Specter ... Maybe the same kind of deal is being worked with Alaska Republican Sen. Lisa Murkowski?"

TNR's Jason Zengerle: "Why Would Democrats Want Arlen Specter?"

The Nation's John Nichols highlights GOP support for EFCA: "a handful of House Republicans, including New Jersey's Frank LoBiondo and Chris Smith and New York's John McHugh, have bravely added their names to the cosponsor list ... Highlighting Republican support for EFCA takes apart the argument that labor law reform is merely a political payout to labor groups that backed Democrats -- along the same lines as pro-corporate legislation advanced by GOP leaders when there party was in power -- and makes it tougher for southern and western Democrats to go astray."

ABC quotes Anna Burger: "Well, I actually think that the vote won't come up today. Al Franken's gonna be seated and I believe that we'll have 60 votes and we'll pass this bill.”

Campaign Diaries does a comprehensive head count, and concludes: "Contrary to what some articles are suggesting, this drop in [stated] support does not necessarily mean that the bill is in trouble."

AFL-CIO Blog on EFCA panel discussion at National Press Club: "Martinez Ortega argued that the 'secret ballot' argument frequently used by opponents is a red herring, because the conditions of NLRB elections are slanted toward management such that the ballot doesn’t rectify other flaws in the process—including the company’s ability to control information and the minimal penalties for illegally firing workers."

Huffington Post's Sam Stein reports: "Embattled financial giant Citigroup Inc., which has received at least $50 billion in federal bailout funds, hosted a private conference call on Wednesday to build opposition to the Employee Free Choice Act." Rachel Maddow interviews Stein below.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Moderates Look To Water Down Health Care Reform

The Hill: "Blue Dog Democrats are asking President Obama to come up with a revenue-neutral healthcare plan in lieu of his initial proposal, according to a letter being drafted by the growing bloc of fiscally conservative House Democrats ... Obama’s budget called for carving out a $634 billion fund to be put toward a universal healthcare plan, a number that Blue Dogs believe is far too high given the current level of deficit spending."

Dow Jones quotes Sen. Conrad, defender of bloated argibusiness subsidies, failing to grasp the concept of investing in reform: "Senate Budget Committee Chairman Kent Conrad, D-N.D., said Thursday he was not convinced of President Barack Obama's plan to invest several hundred billions of dollars of new money into the health care system, as part of his proposal to radically overhaul the delivery of health care in the U.S. Conrad said he had serious concerns about the longer term forecast in President Barack Obama's federal budget framework. 'Some of us have real pause about putting substantially more money into the health care system when we have already got a bloated system,' Conrad said."

Time: "A bipartisan group of nine U.S. senators, after meeting for nine months behind closed doors, is nearing an agreement on the broad strokes of a health care reform bill. The so-called Gang of Nine — though its number expands and contracts depending on the meeting — is hammering out the finer points as they prepare to enter the drafting phase of the negotiations, sources from three Senate offices involved in the talks tell TIME ... Having the Senate Budget Committee leaders involved in the talks is especially noteworthy, as it suggests the group is grappling with the issues of Paygo — a requirement that all new spending be offset by reductions to avoid adding to the deficit."

Wonk Room's Igor Volsky reminds: "Since the rising cost per beneficiary is responsible for most of the fiscal problem, you can’t stabilize the economy without lowering the costs of health care, and you can’t lower health care costs without investing in the system."

The Treatment's Anthony Wright says look to San Francisco: "Healthy San Francisco focuses on providing a new, affordable public option for both employers and individuals, based on a sliding scale ... ealthy San Francisco has been successful: this program has increased access to care for nearly two-thirds of the uninsured in San Francisco in only its second year in operation. If this plan sounds similar to some of the federal health reform proposals being discussed, it is..."

"Mark-to-Market" Rule May Be Changed

FT reports Congress is pressing regulators for rule reform:

Congress will force regulators to relax the much-criticised mark-to-market accounting rule if they fail to take action themselves, Barney Frank, the chairman of the House financial services committee, on Thursday warned...

...Mark-to-market, which compels banks to value assets at current market prices, is blamed by some for exacerbating the financial crisis because the illiquid market for certain instruments such as mortgage-backed securities has forced financial institutions to write down the value of their holdings...

...Under tough questioning from Mr Frank’s committee, the SEC and FASB agreed to produce new guidance on the subject within three weeks....

...Chris Dodd, Democratic chairman of the influential Senate banking committee, told the conference that Congress should resist calls to intervene in the accounting system to alter the mark-to-market rule, which should be left to accounting bodies....

...Tim Geithner, Treasury secretary, said in a hearing with the Senate budget committee on Thursday that he had reservations about suspending the mark-to-market rule. “My personal point of view is that we have to be very careful not to do things that would erode confidence in the people’s ability to assess the risks in exposure to a bank,” he said. “There are some versions of those proposals that would have that risk.”

Naked Capitalism warns of abuse: "The Senate is trying to pretend it is going to keep fair value accounting in a somehow friendlier form, but friendlier to the industry means the financial statements are no longer reliable. ... Either you have objective standards or you don't. The notion that subjective valuations will be permitted and they won't be abused is utter fantasy."

NYT on tax haven crackdown: "Two small European countries, Andorra and Liechtenstein, agreed to loosen banking secrecy rules on Thursday, a small but significant step for Western governments trying to shut down tax havens ... Liechtenstein and Andorra, along with Monaco, had been on the O.E.C.D.’s list of uncooperative tax havens since 2000. Only Monaco continues to hold out from that group. In the meantime, the organization has a new list for the scrutiny of G-20 officials that includes Austria, Hong Kong, Luxembourg, Singapore and Switzerland."

The Nation's William Greider on "Fixing The Fed": "The great virtue of [economist Jane] D'Arista's approach is that it's forward-looking. Her focus is not on saving the largest and most culpable names at the pinnacle of the financial system but on creating the platform for a financial order composed of thousands of smaller, more deserving institutions that can serve the country more reliably. To achieve this, the Federal Reserve will have to submit to its own reckoning. By its very design, the cloistered central bank is an offense to democratic principles--and now the Fed's secretive, unaccountable political power has failed democracy again."

GM OK For March

BBC: "US carmaker General Motors has said it will not need the $2bn of funding it had previously requested for March from the government. GM said the development reflected the acceleration of its efforts to cut costs. It had delayed spending planned for January and February, it added."

Americans Like Their Government

Matt Yglesias on embracing activist government: "Walter Shapiro has an article in TNR titled 'Americans Like Big Government: They just don’t really know it yet' which is about the importance of branding in building support for a progressive agenda. I think our new CAP report on the state of American political ideology provides some context for this and helps move beyond the old saw about America being ideologically conservative and operationally liberal."

President Talks Global Warming With CEOs

W. Post reviews the divided political dynamics around forthcoming climate legislation and reports: "The sense of urgency has been heightened by House Energy and Commerce Committee Chairman Henry A. Waxman's push to have a bill ready by the end of May; the California Democrat plans to circulate a draft in about two weeks."

WSJ interprets the following presidential exchange with Weyerhaeuser Co. CEO Dan Fulton as a sign President Obama "could compromise on his plan to combat global warming." But is he?

Transcript below, focusing on whether "cap-and-trade" would have companies have to pay to pollute public sky (via "100% auction" of permits):

FULTON: I just wanted to comment that a number of us in the business community are concerned that a hundred percent auction will effectively be a tax that would impose significant costs on energy-intensive industries such as some that we operate, and may impact existing industries’ ability to fund needed investments in new low-carbon technologies.

I just wondered if you could explain how the hundred percent auction approach would work in our highly challenged economy — because we’re all feeling a lot of pressure today on costs — and yet still preserve jobs for existing industries, and strengthen our existing manufacturing sector.

THE PRESIDENT: Well, let me start by saying this. I said during the campaign we were looking at a hundred percent auction. We are not going to be able to move this in an effective way without partnership with the business community. But we just — we can’t get it done. And for businesses like yours that are committed to the concept and the idea, we’re going to work to make sure that it works for you.

Now, the experience of a cap and trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for. The flip side is, you’re right, if it’s so onerous that people can’t meet it, then it defeats the purpose — and politically we can’t get it done anyway.

So we’re going to have to find a structure that arrives at that right balance. We want to create a price structure. Keep in mind that the reason that I’m interested in a cap and trade approach is precisely because I think the market makes decisions about these technologies better than we do. You know, for those who are concerned about some heavy-handed command and control regulations coming down the pike, cap and trade is designed to say, you know what, here’s a target, here’s a price, you guys go figure it out and if you can make money on it, all the better.

So that’s the — that’s our goal. That’s what we want. And how that pricing mechanism works most effectively to actually influence incentives, but also be sufficiently realistic that industries are thriving as opposed to groaning under the weight of it, I think is going to be the trick. I’m confident that we can do it. We’ve done it before.

I mean, keep in mind that when — I’m trying to remember, this was back in the ’70s or early ’80s — I’m getting old enough now where I can’t remember — but, you know, the issue of acid rain was around. Everybody thought all your trees were going to be dying; you couldn’t make any paper. And we put in an auction system and a trading mechanism and, lo and behold, American ingenuity and American entrepreneurship and inventiveness created options that ended up being much cheaper than anybody had imagined — much cheaper than anybody had imagined.

Now, in the meantime, I just — I was talking to some members of Congress just yesterday, you know, who were concerned about this, because I’m sure they’re hearing from industries and, you know, what does this mean economically, et cetera. I just want to point out, you know, anybody who has been to Las Vegas recently and looked at Lake Mead; or who is familiar with what’s happening in agriculture in California right now; or go down to Atlanta, which may not have any water soon, because of what’s happening in terms of changing weather patterns; or talk to Kevin Rudd in Australia — that’s going to cost us money too. It’s just not — it’s not priced.

And I’m not somebody who — I’ve never bought into these Malthusian — woe — Chicken Little, the earth is falling — I tend to be pretty optimistic. I wouldn’t be here if I weren’t pretty optimistic. But I think this is — the science is overwhelming. This is a real problem. It will have severe economic consequences, as well as political and national security and environmental consequences.

And I’m confident that if we do it smart, if we’re talking to you guys, if we’re talking to industries, if our projections don’t end up being wildly unrealistic, then I think we can handle this problem.

Terrance Heath contributed to the making of this Breakfast.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future