Progressive Breakfast: Baucus Plan Lands With Thud

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day.

Baucus Plan Appears To Make No One Happy

Democrats unhappy with effort to make coverage affordable. W. Post: "Sen. Ron Wyden (D-Ore.) declared himself dissatisfied with the chairman's plan, which, like other congressional reform proposals, would require every American to buy health insurance by 2013. 'Additional steps are going to have to be taken to make coverage more affordable,' Wyden said, 'and my sense is that will be a concern to members on both sides of the aisle.' ... A plan drafted by House Democratic leaders would offer more generous tax credits, but it would cost more than $1 trillion over the next decade ... by squeezing the size and scope of the subsidies, [Baucus Caucus] negotiators have lowered the cost to a more politically palatable $880 billion..."

NYT reports GOP members of Baucus Caucus have several problems with latest draft: "...Mr. Enzi believes that the federal government should pay '100 percent of the cost of the Medicaid expansion, in order to avoid an unfunded mandate' for states, which ordinarily share Medicaid costs with the federal government. Mr. Enzi and Mr. Grassley have also objected to the fees that Mr. Baucus wants to impose on health insurance companies, clinical laboratories and manufacturers of medical devices ...[and] told Mr. Baucus that health legislation must include language affirmatively prohibiting the use of federal money to pay for abortion. The restriction, they said, should apply to any subsidies that help low-income people buy insurance ... Mr. Grassley has reservations about [an individual mandate]. He believes that 'the individual responsibility to have health coverage should be reconsidered and replaced with a reinsurance policy to ensure that affordable health coverage is available to everyone in a voluntary system, with a lower overall cost for the package,'..."

The Hill says expect many committee amendments: "Democrats on the Senate Finance Committee are poised to demand changes to the healthcare legislation being drafted by their chairman. Finance Committee Chairman Max Baucus (D-Mont.) plans to introduce his proposal for healthcare reform on Wednesday with a committee mark up to begin the following Tuesday."

House won't take up bill until October reports CQ as it waits for the Senate to commit.

63% of doctors support the public option reports Ezra Klein.

62% of Americans support the public option according to Americans United for Change.

The Page highlights Sen. Jay Rockefeller press conference with Institute for America's Future this afternoon stressing importance of public option.

Mixed Reaction To Wall Street Speech

The Stash's Noam Scheiber gives Obama Wall Street speech "Two Cheers": "...the consumer financial products regulator ... was the first proposal Obama discussed yesterday, and he came out swinging against would-be prevaricators ... it was good to see Obama prominently hit on the importance of higher capital requirements for systemically important institutions. ... [but] that idea of making firms smaller and less connected ... brings me to the one discouraging portion of the speech ... The administration’s unwillingness to engage on this question."

Baseline Scenario's Simon Johnson pans speech, Fed plan: "President Obama’s speech yesterday was disappointing. As a diagnosis of the problems that let us into financial crisis, it was his clearest and best effort so far. ... But then he said: our regulatory reforms will fix that. This is hard to believe. And even the President seems to have his doubts, because he added a plea that – in the meantime – the financial sector should behave better ... Making the Fed responsible for the largest firms could work, but only if the Fed throws out pretty much everything about the Greenspan doctrine of cleaning up after financial messes, rather than preventing them. There is no indication they are moving in this direction."

NYT sees momentum for financial reform slipping: "Senior officials have acknowledged that as the financial system begins to mend, a kind of political inertia sets in as lawmakers have less of an incentive to act boldly ... Big institutions and community banks have unified against a central provision of the plan to create a new consumer finance protection agency. ... [Rep. Barney] Frank has been saying that the Fed might have to share the role of systemic risk regulator, indicating that there was not enough support in Congress to give the Fed alone the wider authority that the president had been seeking. Other central elements of the plan have come under assault. Major Wall Street companies, for example, have also worked to water down the president’s proposal on tightening the rules for derivatives like credit default swaps. They have also lobbied heavily to make sure that any attempts to impose tough new restrictions on executive pay do not come to pass."

US may sell back Citigroup stake. Bloomberg: "The U.S. Treasury Department and Citigroup Inc. have begun discussing how to sell the 34 percent stake that the government acquired in the rescue of the bank, people familiar with the matter said ... 'Given the conversion and what’s happened to the stock price, it is likely that the government would make money on it,' said Moshe Orenbuch, an analyst at Credit Suisse Group AG..."

WH Defends Trade Law Enforcement From Hysteria

Bloomberg: "President Barack Obama downplayed the possibility that his imposition of tariffs on imported tires from China would spark a cycle of retaliation. 'We’re not going to see a trade war,' Obama said yesterday in an interview with Bloomberg News at the White House. 'There are some tensions around this, no doubt about it. But my message is very simple: We have rules on the books.' Obama’s argument that existing trade rules must be enforced to build support among lawmakers and the American public echoes the position taken by each of his four predecessors before they made free trade a focus. He may seek to convince China’s President Hu Jintao, whom he meets at a Group of 20 summit next week, of the need to limit the trade spat after China announced a probe into the pricing of U.S. chicken and auto products."

NYT reports on political fallout: "...organized labor, having tasted success in this case, is pressing Mr. Obama to take tougher stances on a number of upcoming trade issues. Manufacturing unions, in particular, are pushing for penalties on China’s steel exports, for strong Buy America provisions in future green jobs legislation and for rejecting trade pacts with Colombia and South Korea. The prospect that labor might succeed scares many American companies."

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