Progressive Breakfast: Financial Reform Debate (Finally) Begins

Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.

Financial Reform Debate Begins

Senate Republicans are no longer blocking debate of the financial reform bill, but have signaled serious battles ahead: "Republicans had blocked debate on the bill for three consecutive days, but eventually relented on Wednesday. But they also promised a hard fight to make changes to the reform bill. The key battlegrounds of the debates will be measures to restrict trades in complex financial instruments, called derivatives, and the powers proposed for a new agency to protect consumers. Despite agreeing to a debate, Republican Senator Richard Shelby, who led the blocking campaign, appeared in no mood to compromise on his opposition to the consumer protection agency."

The Senate's financial reform bill is unlikely to do what's needed most, break up institutions that are "too big to fail": "Is there anything that would keep too much power and importance from building up inside of any single financial institution? It's tough to say for sure, but what is starting to be clear to me is that only one course of action has a real shot: breaking up the big banks. A scary thought, I know. Not just from a political standpoint, but also because Americans are generally in favor of big things (big cars, big-box stores, Big Gulps) and against penalizing businesses for being successful and growing. On the other hand, we've got American history on our side. Breaking up big financial institutions is exactly what Congress did in response to the forces that caused the Great Depression, realizing that size inherently is dangerous—that financial firms are ultimately run by human beings, and human beings only have so much capacity to prudently manage complexity, risk and largess..."

The economy grew 3.2%, thanks to consumers, but not enough to signal a recovery from the recession: "The United States economy continued to expand in the first quarter, but economists cautioned that the pace of growth is still not nearly fast enough to recover ground lost during the recession. National output grew at a seasonally adjusted annual rate of 3.2 percent last quarter, the Commerce Department reported Friday, after growth of 5.6 percent in the fourth quarter of 2009 and 2.2 percent in the third quarter. ...Economists are hopeful that families will continue to pick up the pace of purchasing, although consumers may be hesitant to open their wallets too much further given the tepid growth in job creation and personal income. Hiring only recently began to turn around, with the economy adding 162,000 jobs on net in March — 48,000 of which were temporary Census-related positions — after having destroyed about eight million jobs since the recession began in December 2007."

The Job Front

A record high number of Americans fear losing their jobs: "Every day the jobless recovery seems to continue its surge… especially the jobless part. Now, according to Gallup, about 21 percent of the US workers who actually remain employed believe it’s “very” or “fairly” likely they’ll get fired or downsized within the next year. That’s the highest level since Gallup began gathering the data back in 1975. According to Gallup: 'Further reflecting today’s lack of job security, 38% of Americans employed full- or part-time say they are ‘not at all likely’ to lose their jobs over the next year — down 19 points from April 2007, and by far the lowest level of self-professed job security Gallup has measured since 1975.'"

Obama's nominee to the Federal Reserve Bank of San Francisco says job #1 is ... jobs: "Economist and President of the Federal Reserve Bank of San Francisco Janet Yellen, whom President Obama nominated to become vice chairperson of the Federal Reserve board this morning, has responded to today’s events on her bank’s website: 'I’m honored that President Obama has asked me to serve in that capacity. If confirmed by the Senate, I am looking forward to working even more closely with Chairman Bernanke and the other governors, and continuing to collaborate with my colleagues throughout the Federal Reserve System to conduct policies that foster economic prosperity and ensure a stable financial system. I am strongly committed to pursuing the dual goals that Congress has assigned us: maximum employment and price stability and, if confirmed, I will work to ensure that policy promotes job creation and keeps inflation in check.'"

Taking the Fight to Wall Street

Unions Marched on Wall Street and took the bull by the horns: "Thousands of people marched on Wall Street on Thursday afternoon in a major protest of financial sector greed and lending practices by big banks. Taking to the streets of downtown Manhattan, an expected gathering of 10,000 AFL-CIO union members shouted and jeered at the offices surrounding them, demanding three major changes to Wall Street culture. The first is to call off the lobbyists fighting regulatory reform. The second is to stop the incessant focus on market speculation over business lending. The third is to chip in money for job creation initiatives. 'Our history and our heritage teach us that America is about more than making easy money and looking out for number one. Our lives and our livelihoods are all bound together. And we are all paying the price for those who knew no limits on their greed,' AFL-CIO President Richard Trumka was to say, according to advance remarks. 'Eight and a half million lost jobs — that's the price of greed — that's the real cost of bankers' bonuses and private jets and cute tricks like the one that got Goldman Sachs in trouble last week.'"

On ABC News, AFL-CIO President Richard Trumka says Wall Street hasn't learned anything:

Goldman Sachs: Smooth Criminals?

The SEC has sent the Goldman case to the Justice Department, which is now looking into whether Goldman committed securities fraud: "Federal prosecutors are reportedly looking into whether Goldman Sachs has committed securities fraud. The Securities and Exchange Committee referred its investigation of Goldman to The Justice Department for possible criminal prosecution, according to several media reports, including one by the Wall Street Journal, Thursday night. The reports cited sources familiar with the situation."

Charlie's Choice

In a move that could make him a symbol of the conflict within the GOP, Charlie Crist officially announced that he will run as an independent for Florida's Senate seat: "Surrounded by cheering supporters, Florida Governor Charlie Crist announced today at a press conference he was dropping out of the Florida Republican Senate primary race to run as an independent. 'My decision to run for the United States Senate as a candidate without party affiliation in many ways says more about our nation and our state, than it does about me,' Crist announced. 'For me it's never been about doing what's easy,' he said today, 'it's about doing what is right for the people first.'"

Charlie Crist has announced he's running as an independent for Florida's Senate seat, but which party will he caucus with if elected?:"As I see it, Crist has almost no choice but to say that he will caucus with the Democrats. It's not that making that declaration will help him win the election exactly, but his divorce from the Republican Party will be made total by the actions of the Republican Party."

Charlie Christ may be leaving, but Republican party leaders say the campaign money stays with the GOP: "At a Monitor sponsored breakfast for reporters, Senator John Cornyn of Texas, Chairman of the National Republican Senatorial Committee (NRSC) said, 'I certainly will request the money that I donated to his campaign from my leadership PAC back.' Senator Cornyn added that, 'people have already asked for their money back and I expect that to continue. I think in addition to seeing his coffers depleted by having to return money, I think his ability to raise money as an independent will be dramatically down.' Governor Crist has $7 million in the bank and is not legally obligated to return the funds."

Crist's opponent, Mark Rubio, said the move was more about convenience than conviction: "'This has nothing to do with ideas or principles or ideology; it's about, quite frankly, political convenience,' Rubio told ABC News' Terry Moran in an interview that will air Thursday evening on 'Nightline.' 'It's about someone who wants to continue his career in politics and doesn't believe he can do that this year within the Republican Party.'"

Spill, Baby, Spill?

The Obama administration has put plans for new offshore drilling on hold, pending a review of the Gulf Coast oil rig disaster and oil spill: "Speaking on ABC’s Good Morning America, senior adviser David Axelrod said 'no additional [offshore] drilling has been authorized, and none will until we find out what happened and whether there was something unique and preventable here. ... No domestic drilling in new areas is going to go forward until there is an adequate review of what's happened here and of what is being proposed elsewhere.' The administration recently announced that it would open new coastal areas to oil exploration, including regions off Virginia’s coast and in the Gulf of Mexico, ending a long moratorium on new drilling."

Oil spilled after an explosion on a BP offshore oil rig has begun washing ashore: "The US Coast Guard is investigating reports that oil has started washing ashore on the Gulf Coast from a leaking offshore well. Up to 5,000 barrels of oil a day are thought to be spilling into the water after last week's explosion on a BP-operated rig, which then sank. President Barack Obama has pledged 'every single available resource' to help. The US navy has been deployed to help avert a looming environmental disaster. The US Coast Guard said it had sent investigators to confirm whether crude oil had begun to wash up on parts of the Louisiana shoreline. "

The Golf oil spill is worse than expected, and getting worser: "Emergency crews set a small section of the spill ablaze on Wednesday in what they say was a “successful” burn. But attempts to use a remote vehicle to cap the belching well have proven unsuccessful so far, and the proposed solution for actually capturing the oil (with a submerged dome) is weeks out at best, untested at the 5,000-foot depth of the leak, and a little pie-in-the-sky, don’t you think? In a sign that BP may be in over its head in the cleanup department, Coast Guard Rear Admiral Mary E. Landry hinted that the Defense Department may be scrambled to provide techno assistance to the effort. Meanwhile, Louisiana’s shrimping fleet is mobilizing to help deploy more than 20 miles of booms that may or may not protect the state’s fragile coastal wetlands from the encroaching slick, and the state’s fishing industry has filed a class action suit against BP, Transocean and others, charging negligence and seeking millions."

The oil spill also puts ten animal species — North Atlantic Bluefin Tuna; Sea Turtles; Sharks; Marine Mammals — Whales, Porpoises, Dolphins; Brown Pelican; Oysters; Shrimp and Blue Crab; Menhaden and Marsh-dwelling Fish; Beach-nesting and Migratory Shorebirds; Migratory Songbirds — especially at risk: "Though it's unclear how badly wildlife along the Gulf Coast will suffer, the timing of the spill couldn’t be worse. This is peak spawning and nesting season for many species of fish, birds, turtles and marine mammals. Many species remain in set breeding areas during this time and there’s less instinct to move away from danger. Disturbances to nests, fish spawning grounds or key links in the food chain might have lasting effects on species already at risk, commercial fish stocks and the people who make a living harvesting them. Minor oil spills are relatively common on the Gulf Coast, but this one has biologists, wildlife agencies, conservation groups and fishermen particularly concerned." When the smoke from the burning oil clears, it may reveal a regulator with a mixed record: "As The Wall Street Journal reported this morning, the oil rig lacked a device—known as an acoustic control—that would’ve served as a safeguard of last resort. While the effectiveness of the $500,000 device is debated, the Journal points out that it is used by other oil-producing nations, including Brazil and Norway. Regulators in the U.S. were also considering requiring it a few years ago, but after industry objections decided that the devices were expensive and needed more study. So which regulator oversees rigs and made that decision? It was the Department of Interior’s Minerals Management Service, an agency that has had a spotty record over the past few years. In 2008, we pointed out that MMS was in quite a bit of trouble for ethical violations by its officials. The scandal involved sex, drugs and (quite literally) sleeping with the very industry it was regulating."

Challenges Grow For Arizona Immigration Law

Three organizations have mounted legal challenges to Arizona's new anti-immigrant law: "Three legal challenges to the Arizona law have already been filed in federal court in Arizona, asking judges to block implementation of the statute and ultimately declare the measure unconstitutional. The National Coalition of Latino Clergy and Christian Leaders filed a class action suit on Thursday on behalf of a group of citizens, legal residents, and illegal immigrants who say the law will devastate lives and businesses in Arizona’s Latino community. Tucson Police Officer Martin Escobar said in his suit, also filed Thursday, that there was no way to carry out the mandate of the Arizona law in a race-neutral way. He said the state statute compels law enforcement officials 'to actively engage in racial profiling to detain, question, and require every Hispanic' to prove their legal status. A third lawsuit has been filed by Washington, D.C., resident and US citizen Roberto Javier Frisancho, who said he plans to visit Arizona in September to conduct research, but is now fearful of how he may be treated as a person of Hispanic heritage. The act 'establishes a crime of being Hispanic,' he says in the suit."

Democrats unveil immigration reform plan: "US Senate Democratic leaders unveiled on Thursday an outline for overhauling the country’s 'broken' immigration system as protests mounted against Arizona’s crackdown on illegal immigrants. With an estimated 10.8m people in the US illegally, Harry Reid, Senate majority leader, and fellow Democrats said the first step toward reform must be bolstered U.S. border security. The Democrats also called for creation of a high-tech identification card for immigrant workers, a process to admit temporary workers, 'tough sanctions' against US employers who hire illegal immigrants and, eventually, a path toward US citizenship for people in the country unlawfully."

Obama has "no appetite" for immigration reform fight: "Immigration reform has become the first of President Barack Obama's major priorities dropped from the agenda of an election-year Congress facing voter disillusionment. Sounding the death knell was Obama himself. The president noted that lawmakers may lack the "appetite" to take on immigration while many of them are up for re-election and while another big legislative issue — climate change — is already on their plate." I don't want us to do something just for the sake of politics that doesn't solve the problem," Obama told reporters Wednesday night aboard Air Force One."

John Boehner, White House agree immigration reform won't move in Congress: "For once, House Republican Leader John Boehner agreed today with President Obama. On immigration reform, the House minority leader said it's not going to happen anytime soon. 'There is not a chance that immigration is going to move through the Congress," Boehner told reporters. "Even the President last night admitted that this wasn't going to happen.' Boehner was referring to President Obama's comments last night aboard Air Force One that he doubted Congress had the 'appetite' for a tough fight over immigration this year before an election. Though Boehner wants to see an immigration-reform bill move through Congress, he said, he doesn't believe this is the right time."

Arizona's La Opinión may have endorsed the old John McCain, but not the new one: "McCain has gone from being a reasoned voice in the immigration debate to an apologist for the irrational by supporting the Arizona bill that uses racial profiling to persecute the undocumented, among other controversial provisions. If that weren’t enough, the Senator recently appeared on the Fox television network saying that undocumented immigrants were "intentionally" causing car accidents. McCain’s dramatic shift on immigration personifies the political opportunism we mentioned a few weeks ago in relation to California's own Republican primary, although the Senator’s case is much more profound. This is a politician who was once considered one of the Senate’s pillars in favor of comprehensive immigration reform, a position he diametrically opposes today."

Breakfast Sides

Kentucky mine where two workers died when a roof collapsed had a long history of safety problems: "State and federal records show more than 40 closing orders for the mine over safety violations since January 2009. Inspectors from the State Office of Mine Safety and Licensing have issued 31 orders to close sections of the mine or to shut down equipment because of safety violations since January 2009. Federal inspectors cited the mine 840 times for safety violations since January 2009, and closing orders were issued 11 times. The records show that 214 of the citations were issued in the first four months of this year, and that inspectors have issued closing orders twice so far this year.

What a little media exposure, and political pressure can do — like making AHIP adopt reform changes ahead of schedule: "Ah, the power of investigative journalism. Following last week's Reuter's story by Murray Waas on WellPoint's practice of targeting breast cancer patients for rescission, both WellPoint and UnitedHealthcare announced they would implement reforms immediately, instead of waiting until the new law kicks in. Following that story, the administration and Congressional leaders immediate contacted WellPoint's CEO to urge her to end the practice. Committee and Subcommittee Chairs from the House Committees on Ways and Means, Energy and Commerce, and Education and Labor sent a letter to the CEOs of the seven major insurance companies, 'urging them to end rescissions and institute independent third-party review.' Yesterday afternoon, the industry as a whole agreed to do the same, according to a letter from AHIP's Karen Ignani to top House Democrats."

Health insurers claim 39% rate hike was due to "bad math": "Insurance giant Anthem Blue Cross withdrew plans to raise health insurance rates for Californians by as much as 39% after an independent audit determined the company's justification for raising premiums was based on flawed data, state Insurance Commissioner Steve Poizner said Thursday. Anthem said separately it will file a new application for a rate increase with the California Department of Insurance and the Department of Managed Health Care, perhaps as early as next month. It added that any errors in its original application were inadvertent. 'The current application that was withdrawn today was just flawed,' Poizner said during a conference call with reporters. He added that it contained mathematical errors and in some instances double counting of data."

The U.S. has applied tarriffs on coated paper from China and Indonesia: "The U.S. on Thursday applied punitive duties on more than $200 million in imports of glossy, high-quality paper from China, in the latest salvo in an escalating trade dispute between the two nations. The Department of Commerce announced tariffs of between 30.8% and 135.8% on imports of Chinese coated paper. It also slapped a tariff of 10.6% on imports of coated paper imports from Indonesia. It decided to apply the duties after preliminary findings from an investigation found Chinese and Indonesian exporters have been selling paper to U.S. at below its regular values, the Commerce Department said.

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