Progressive Breakfast: 10 Reasons (And Then Some) To Oppose Simpson-Bowles

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.

Simpson-Bowles Plan Slammed, Slapped and Shredded

"Ten Reasons the Social Security Proposal of the Fiscal Commission Co-Chairs Should be DOA" from Strengthen Social Security: "Deeply cuts the benefits of middle-class families ... Closes Social Security’s long-range funding gap primarily by cutting already low benefits ... Raises the retirement age to 69 ... Discriminates against lower-wage workers ... Hurts current retirees, contrary to promises made by the Co-Chairs..."

NYT's Paul Krugman rips Simpson-Bowles plan for redistributing wealth upward: "...what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class ... what does any of this have to do with deficit reduction? ... They want the age at which Social Security becomes available to rise along with average life expectancy. Is that reasonable? ... , the proposal seemingly ignores a crucial point: while average life expectancy is indeed rising, it’s doing so mainly for high earners, precisely the people who need Social Security least."

Simpson-Bowles would kill jobs now, argues New Deal 2.0's Jeff Madrick: "[The] most dangerous part of this toxic package is that it urges cutting federal spending substantially in fiscal year 2012. At best, the unemployment rate will be in the range of 7.5 percent at that time, which many will fairly still consider recessionary. That is not time to administer austerity. A far better tool, if one had to be deficit minded, is to start reigning in spending or raising taxes (my preference) when unemployment is around 6 percent. I’d wait until it is well down into the 5s."

Simpson-Bowles "doesn't add up" says Captial Gains and Games' Stan Collender: "... it's not a coherent plan that embodies a vision of what the government should be and do to match the fiscal constraints ... Bowles-Simpson projects substantial savings based on the expectation that a less experienced and much smaller federal workforce will be more productive and just as effective than the more experienced and larger workforce it replaces. That makes absolutely no sense. ... Bowles-Simpson also doesn't add up because it relies on a variety of what in the past would have been ridiculed as budget gimmicks, such as mandating limits on certain costs without providing any real way of actually making that happen."

Preference for spending cuts appeals to corporate leaders. LAT: "In the outcry over a draft proposal released this week by President Obama's deficit reduction commission, one powerful interest group was more muted: business. ... While business typically resists a heavier tax burden, the draft put forward by the commission's two co-chairmen relies far more heavily on spending cuts to reach their goal of reducing the deficit to 1.4% of economic output by the end of the decade ...

Simpson-Bowles tax reform would help drug companies, hurt clean energy companies. WSJ: "Winners, said [economist Martin] Sullivan, the economist, would likely include high-tech and pharmaceutical companies. 'It looks like a great deal for them' he said, 'lower rates, an extended R&D credit...' Tax analysts said the losers under the proposals would include energy producers, especially alternative-fuel companies that depend on credits and incentives."

What would the spending cuts do to government services? W. Post's Joe Davidson: "Does anyone really want to lengthen the time it takes veterans to have their claims processed, or for the elderly or disabled to navigate the Social Security system? Are we willing to have fewer safety reviews of our nation's mines and factories? Should a wink and a nod pass for our food inspections and drug approvals? Federal employees are willing to sacrifice for the good of the nation. But what services are federal critics - or Simpson and Bowles - willing to sacrifice?"

David Sirota writes that the deficit commission's report has a surprise for health reform advocates: : "...the real shocker in the commission's announcement is its support of one of the most important progressive health care priorities: That's right, a public health-insurance option to compete with private insurers. When a Money Party commission is forced to admit that the nation needs a public health insurance option, it's a good sign that such an option should be considered a pragmatic 'moderate' idea - not an ultra-liberal/quasi-socialist boondoggle, as the political media regularly called it."

TPMCafe's William Hartung highlights the Simpson-Bowles cuts in military spending: "If the co-chairman's recommendations were taken up, the Pentagon budget would be $100 billion lower in 2015 than it otherwise would have been, and cumulative cuts from 2012 through 2020 could add up to more than $800 billion. Given that it is at its highest levels since World War II -- and almost as much as the rest of the world spends combined -- the military budget can afford to shed some dollars, and $800 billion over a decade is a good starting point. Whether this level of cuts can make its way through Congress and past the arms lobby is another question."

Matt Yglesias criticizes the Simpson-Bowles arbitrary cap on revenue: "The worst thing about the Bowles-Simpson plan is that for a deficit reduction plan it took the odd step of asserting that the federal government ought to implement a permanent arbitrary cap of revenue at 21 percent of GDP ... State and local government activity counts, too. If you 'cap' federal spending, then congress will just spend more time dreaming up ways to semi-coerce state government into spending more money. If we’re trying to ask what kind of tax burden the country can afford overall, we need to look at the whole picture."

President refrains from taking stance on draft plan. NYT: “'The only way to make those tough choices historically has been if both parties are willing to move forward together ... And so before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts. I think we have to be straight with the American people.' Mr. Obama’s stance was at the request of the [commission] chairmen ... who wanted to avoid any statements that might prejudice the panel’s deliberations before its Dec. 1 deadline. But it was also a response to the outcry from both conservatives against taxes and from Mr. Obama’s liberal base against the plan’s proposed long-term cuts in domestic programs..."

House Dem leaders give mixed reaction to Simpson-Bowles deficit reduction plan. The Hill: "Speaker Nancy Pelosi (D-Calif.) came out swinging, calling the proposals 'simply unacceptable,' ... Neither Hoyer nor Clyburn criticized the commission ... [Hoyer] has stood apart from other party powerbrokers by publicly embracing proposals to increase taxes and cut defense spending to balance the budget and to raise the retirement age to keep Social Security solvent ... Clyburn also has proposed changes to the payroll tax and the retirement age to protect Social Security benefits..."

Pelosi aide sends mixed message. Time's Massimo Calabresi: "Is Nancy Pelosi backing off her opposition to the proposal by the chairmen of the President's debt commission? Pelosi aides are trying to send that message. 'In the end I think we're going to be OK with it,' one top Pelosi aide told me this afternoon ... So why did Pelosi come out against it so fast? The top aide says she felt she needed to 'draw a line in the sand for her base.'"

But then Speaker Pelosi responds to Time with renewed opposition:: "Speaker Pelosi offered the following on-the-record response to the post below, by way of denying that she is backing off her opposition to the proposal presented yesterday by the chairmen of the President's Fiscal Commission: 'Any viable proposal from the President's Fiscal Commission must achieve the goals of reducing the deficit, promoting economic growth, and preserving Social Security. This proposal does not meet those standards.' Will she be OK with it in the end? 'I will have to see what is in the final draft,' she says. An aide says she is not going to take a public position on which elements of the current proposal she would support or oppose, including raising the Social Security retirement age, doing away with the child tax credit or other elements of the chairmen's proposal."

Progressives Fear Tax Cut Cave-In

Temporary extension of all Bush tax cuts floated as compromise, reports CNN: "An emerging tax cut compromise could be to temporarily extend Bush-era tax cuts for all income levels, congressional sources in both parties told CNN Thursday ... Democrats would compromise on their pledge to let tax cuts for the wealthy expire, and Republicans would give on their promise to make all tax cuts, including those for the wealthiest Americans, permanent ... GOP sources in particular say keeping tax cuts for the middle class and the wealthier Americans linked may be in their best interest."

Liberals press Obama to resist weak compromises with GOP. W. Post: "[Some offered] criticism of the White House on Thursday for signaling that it will compromise with the GOP on the issue of extending tax cuts that are scheduled to expire this year. Others said they would attack Obama if he embraced any proposal to reduce Social Security benefits, as the leaders of a bipartisan panel proposed this week to cut the federal deficit. And when Obama and Congress return to Washington next week, gay rights activists will call for the president to take a stand against 'don't ask, don't tell,' ... Before leaving on a trip to Asia this week, Obama emphasized his support for repealing 'don't ask, don't tell' and not extending the tax cuts for upper-income Americans. But neither he nor his aides have said he would veto legislation that did not conform with those goals."

House Dems look to Pelosi to hold the line. W. Post: "...they worry the president will sell them out as Republicans move forward with their strategy to roll back his policies. Pelosi, they believe, will push back against any reversal of the hard-fought policy gains - chief among them the health-care overhaul - that cost her caucus so much."

Agreeing to the GOP tax cut plan is "caving," says Daily Kos' Jed Lewison: "The compromise position involves both sides making sacrifice. In this case, the compromise position is a permanent extension of middle-income tax cuts and a temporary extension of upper-income tax cuts. But a temporary extension of both is caving. It almost certainly guarantees the upper-income tax cuts will be effectively permanent..."

TNR's Jonathan Cohn dismayed at Dem handling of tax cut debate: "What was really going on? Was the administration trying to float a trial balloon? Did Axelrod garble the message? Did the Huffington Post read too much into what Axelrod was saying? I really have no idea ... What I do know is that, at this point, the Democrats on Capitol Hill look incredibly weak and the Obama administration seems unable, or unwilling, to strengthen their resolve."

Obama Resists Unfair Korea Trade Deal

Media outlets label trade impasse with South Korea a "failure." W. Post: "President Obama's inability to secure a free-trade agreement with South Korea reveals in sharp relief the limits of his leverage overseas after a devastating midterm election."

And NYT: "It was a concession to the fact that Mr. Obama is dealing with a new and unpredictable Congress. White House officials said that the president would rather suffer a one-day loss of face here than bring home a deal that would be unacceptable on Capitol Hill ... But analysts agree that the president’s moment of maximum leverage — his meeting with Mr. Lee — has come and gone ... analysts on both sides of the political aisle described the events Thursday as a serious setback for the president."

But Obama praised by AFL-CIO for resisting unfair deal: "President Obama showed today that he is not willing to settle for an inadequate deal that doesn't address the very real concerns of working people and small business. Given the precarious state of our economy, President Obama is exactly right in holding out for a deal that puts working people's interests first. President Obama should keep fighting for a balanced and workable trade deal that will protect the interests of American and Korean workers."

McClatchy looks at how China's policies impact a manufacturer in upstate NY: "Today, Revere [Copper Products] employs about 350 workers ... Chairman Brian O'Shaugnessy bought the company in a leveraged buyout in 1989, and at the time it had 800 workers in two plants ... A decade ago, he said, U.S. copper mills supplied domestic makers of locksets for doors. That's gone completely overseas ... 'So you have got "socialists" fighting the "capitalists," and neither side realizes the mercantilists are kicking their ass.'"

Limited agreement at G-20 on trade imbalances. NYT: "Leaders of the world’s biggest economies agreed on Friday to curb 'persistently large imbalances' in saving and spending but deferred until next year tough decisions on how to identify and fix them ... The agreement ... fell short of initial American demands for numerical targets on trade surpluses and deficits. But it reflected a consensus that longstanding economic patterns — in particular, the United States consuming too much, and China too little — were no longer sustainable ... 'Instead of hitting home runs, sometimes we’re going to hit singles,' Mr. Obama said. 'But they’re really important singles.' ... The measured language on imbalances reflected the clout of China, which successfully resisted pressure for its currency to appreciate quickly, and Germany, which insisted that an examination of imbalances include fiscal, monetary and other policies, not just trade."

President Obama criticizes G-20 media coverage. LAT: "He also blamed the media, saying that the reporting on the G-20 summit has been 'all about conflict,' while ignoring that what was accomplished. He stressed that G-20 leaders made strides, including the development of a system to give the international community a mechanism to determine whether countries are engaging in unfair practices with their trading partners ... But time and again in Seoul, world leaders showed that they were in no mood to compromise and instead were headed toward broad, general pledges that did little to mask their inability to find common ground for immediate action."

Conservatives Grasp To Gut Health Care

Senate GOPers look for Dem votes to weaken health reform. Politico: "West Virginia Gov. Joe Manchin won a Senate seat vowing to repeal 'the bad parts of Obamacare,' and Republican aides say they'll hold him to it. Republicans are also eyeing Ben Nelson of Nebraska, Jim Webb of Virginia and Jon Tester of Montana ... [Nelson is] game to rolling back the reform law's vilified 1099 tax-reporting requirement and 'perhaps make some improvements to the individual mandate.' ... Tester spokesman Aaron Murphy said the Montana senator is always willing to listen to ideas to make any law better. 'But he stands by his decision to cut the deficit by $1.3 trillion and to prevent health insurance companies from booting people just because they get sick or have some pre-existing condition,' ... Webb has already supported a Republican repeal of the 1099 tax reporting requirements ... which was paid for by removing $17 billion from the health law’s prevention fund."

Texas conservatives consider abandoning Medicaid. NYT: "...some Republicans — bolstered by their expanded majority in the State House — say the strings attached to Medicaid and the Children’s Health Insurance Program (CHIP) are bankrupting the state ... Opponents argue that dropping Medicaid would have such a devastating effect on the state’s economy ... that the idea is pure anti-Washington grandstanding. The federal government covers 60 percent of Texas’ $45 billion biennial Medicaid budget. Without that money, critics say, any health care the state could provide would be so limited that undercovered patients would flood emergency rooms, and Texans would end up paying the costs through local property taxes or higher insurance premiums."

Breakfast Sides

Mortgage regulators needs to determine what is a "safe" loan, bankers fight for exemptions. WSJ: "Federal regulators are expected to issue by December proposed rules spelling out which loans will be excluded from a new [Wall St. reform law] requirement that issuers hold onto 5% of the risk of mortgages packaged into securities ... The moves are aimed at preventing a rerun of the catastrophic risk-taking epidemic in mortgage loans ... The Mortgage Bankers Association favors an exemption from the risk-retention requirements on adjustable-rate mortgages that have fixed payments for at least three years and meet certain other requirements. The Community Mortgage Banking Project, a coalition of mortgage insurers and small and midsize mortgage companies, wants only ARMs with a fixed payment for at least seven years to be exempt."

Dem Rep. Dennis Kucinich slams GOP Rep. Darrell Issa for calling stimulus "walking around money" to pay off Obama allies. Politico: "He demanded that Issa prove it, or retract the statement."

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