Progressive Breakfast: Climate Bill Boost Despite GOP Antics

Bill Scher — Wed, 04 Nov 2009 07:32:40 -0800

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

Kerry-Graham Climate Talks Advance Despite GOP Cmte Boycott

Chamber of Commerce (the real one) moves towards supporting Kerry-Graham climate compromise. Politico quotes top Chamber lobbyist: "Senators Kerry and Graham have set forth a positive, practical and realistic framework for legislation, one that echoes the core principles that the Chamber embeds in all of its communications on climate policy."

WH joins Kerry-Graham deliberations. CQ: "Even as a partisan stalemate has stalled a Senate panel’s markup of climate change legislation, behind-the-scenes efforts to engineer a bipartisan compromise are advancing, with negotiators scheduled to meet Wednesday to plot strategy with Cabinet secretaries and White House officials. The partnership of Massachusetts Democrat John Kerry and South Carolina Republican Lindsey Graham, who are trying to write a broader climate bill that can win Republican votes in the Senate, was boosted Tuesday with a cautious endorsement by the U.S. Chamber of Commerce ... Senate Environment and Public Works Chairwoman Barbara Boxer, D‑Calif., called the chamber’s letter a game-changer."

Meanwhile, other Republicans throw tantrum, boycott cmte markup session for specious reason. Politico: "Republicans would like an additional five weeks for the Environmental Protection Agency to complete a study of the legislation ... the EPA has already conducted extensive analysis of the House legislation, and the agency released a second, 38-page analysis of the Kerry-Boxer bill last month ... Another study, said Boxer aides, would cost $140,000 and take roughly five weeks. Amendments passed by the committee would also change any estimates, noted Democrats ... Boxer said that Senate Majority Leader Harry Reid will commission a full study of the final bill. Six committees are handling sections of the legislation, and Democratic leaders will eventually combine their work into one bill. The additional study of the final bill all but guarantees that the legislation will not be taken up until at least early next year."

Coal-state Dem Sen. Jay Rockefeller suggests climate bill can wait until 2011 reports Politico, but Kerry optimistic: "But even with all these obstacles, Kerry, who has become the lead negotiator on climate change, still thinks a deal could be made by Christmas. 'I absolutely believe it’s possible. It’s Nov. 3 today. We’re talking about seven weeks from now.'"

German Chancellor urges action in address to joint session of Congress, receives polarized response. W. Post: "While the entire Democratic side gave those remarks a standing ovation, most Republicans -- including key swing voters, such as Sen. Richard G. Lugar (Ind.) -- remained in their seats. When Merkel added that curbing greenhouse gas emissions would spur growth in 'innovative' jobs worldwide, the same partisan divide marked lawmakers' reaction. Merkel tried to assuage lawmakers' concerns that any agreement coming out of international climate talks in Copenhagen next month would not include binding commitments from China and India, saying those nations will make serious emissions cuts once the leaders of industrialized nations 'show ourselves ready to adopt binding commitments.'"

Final House Health Care Bill Released

Speaker Pelosi releases "manager's amendment." Abortion still not fully resolved. TPMDC's Brian Buetler: "At a glance I see some tweaks firming up the provisions ending the anti-trust exemptions for insurance companies, and creating some real consequences for violators. Again, at a glance, I see no changes to the public option, particularly one, requested by House progressives, to create a ceiling on the rates negotiated between the government and health care providers. I also see not a single word about abortion--Rep. Bart Stupak (D-MI) wants to ban any and all federal money--including money spent on subsidies for private insurance plans--from paying for abortions, and he's been raising quite a fuss about it. Seems like Pelosi's calling his bluff."

LA Times suggests an abortion compromise will be reached: "Abortion-rights activists maintain that Stupak's amendment would effectively prevent private insurance companies from offering abortion services through the exchanges, reducing the availability of those services to women nationwide. 'Stupak is basically saying you cannot even participate in the exchange unless your plan does not cover abortion,' said Nancy Keenan, president of NARAL Pro-Choice America. 'He's taking away coverage from women who already have it.' Meantime, another member of the House's Pro-Life Caucus, Rep. Brad Ellsworth (D-Ind.), is negotiating with the leadership to toughen the funding restrictions and require at least one insurer in the exchange to offer a plan that doesn't cover abortion. House leaders said that they expected a compromise to be reached with Ellsworth that would satisfy enough of the antiabortion Democrats."

CQ on timing: "The procedural move kicks off a 72-hour review period after which leaders say they intend to bring the health bill (HR 3962) to a vote..."

Dems predict passage in House next week. Reuters: "Democrats in the House pushed ahead with plans to take up a healthcare reform bill later this week, and Democratic leader Steny Hoyer said they had enough support to pass it. 'I am confident that we are going to pass this bill,' Hoyer told reporters, predicting passage before a planned recess begins in the middle of next week."

Sen. Reid suggests health care may not pass until next year, then suggests otherwise. AP: "'We're not going to be bound by any timelines. We need to do the best job we can for the American people,' he said after the weekly closed-door meeting of rank-and-file Democrats. A few hours later, Reid's office revised his remarks. 'Our goals remain unchanged. We want to get health insurance reform done this year...'"

Sen. Durbin says timeline depends on CBO, reports CQ: "Are we going to finish by the end of the year? ... How soon will CBO get finished?"

Sen. Landrieu working with Sen. Snowe to resurrect the "trigger" compromise reports W. Post. Sen. Ben Nelson supportive reports TPMDC.

NYT says immigration issues loom: "Some Republicans favor excluding immigrants who have been legal permanent residents for less than five years, as well as all illegal immigrants. Democrats broadly agree that illegal immigrants should be excluded, but many want all legal permanent residents to be able to participate in proposed health insurance exchanges and receive subsidized coverage if they qualify. Latino leaders ... have started an 11th-hour campaign to eliminate waiting periods for them in the proposed legislation and to cancel the existing five-year wait for Medicare and Medicaid programs."

Wonk Room analyzes new GOP health care bill: "The bill includes the word ’shall’ 378 times, but does very little to expand access or lower health care costs ... the amendment shifts the costs and risks of insurance onto individuals and divides the market into low-cost plans for the healthy and high-cost insurance for the sick."

Organizing For America pushes public option, reports The Plum Line: "Obama’s political operation is about to unleash a wave of emails pressuring members of Congress, Democrats included, to vote for the House health care bill. And, notably, it explicitly singles out the bill’s provision containing a public option ... Organizing for America — and Obama himself — have been criticized for not throwing enough weight behind the provision."

W. Post piece claims bills won't cut health care costs because they won't end tax exemption for employer benefits and don't do tort reform. Robust public option never mentioned. Dean Baker rips W. Post: "The Washington Post had a front page news story complaining that the health care reform plans being considered by Congress will not have major savings in part because they do not include tort reform. The Post tells readers that tort reform could save $54 billion over the next decade. Let's see, we will spend about $30 trillion on health care over the next decade, so this comes to less than 0.2 percent in total spending. Is this the best chance to have savings on health care?"

Searching For More Stimulus

WH trying to create more jobs without increasing deficit. W. Post: "On Monday, the Presidential Economic Recovery Advisory Board ... recommended advancing ongoing federal efforts to retrofit and weatherize homes and public buildings, possibly by partnering with mayors. Members also urged establishment of an infrastructure bank, an idea Obama advocated during the presidential campaign. The bank, which would be seeded with federal money, would allow the federal government to float long-term bonds to help finance large projects, such as transit systems, housing developments, water distribution networks, roads and bridges. While the federal government issues bonds to finance its deficits, it does not issue bonds to pay for specific projects. Under the proposals endorsed by Obama during the campaign, and embodied in proposals on Capitol Hill, an independent board would determine which projects are funded..."

Extended unemployment insurance should pass Senate this week. AFL-CIO Blog: "After weeks of obstruction by Republican Senate leaders, millions of jobless workers who have or who will soon run out of unemployment insurance (UI) benefits may finally have a chance to grab an economic lifeline in the form of extended UI benefits. The U.S. Senate yesterday approved a procedural motion that clears the way to a vote on legislation (H.R. 3548) that would provide an additional 14 weeks of benefits to unemployed workers in all states and up to 20 weeks in states with especially high jobless rates. The Senate could vote as early as [Wed.], but a Thursday vote is more likely."

Unemployment bill may also extend homebuyer tax credit. NYT: "The Senate and House are poised to agree on a compromise measure to extend unemployment benefits that also would expand a popular $8,000 tax credit for homebuyers, despite a recent government report on extensive mistakes and suspected fraud in the program ... Democrats are eager to show progress before Friday, when the October jobless report is again expected to show high unemployment ... real estate groups and some economists say the credit has helped stabilize the housing market, critics say it is too costly a subsidy when low interest rates and home prices are incentives enough for most."

Dems Tinker With Reform As Britain Breaks Up The Banks

Sen. Dodd to introduce financial reform bill without Sen. Shelby. W. Post: "The legislation, which is still being finalized, would consolidate federal responsibility for banking oversight, now assigned to four agencies, into a single regulator. And, compared with the plan rolled out by the White House, Dodd's measure would grant less power to the Federal Reserve to curb activities that pose a risk to the entire financial system ... But staff members on both sides of the aisle say [Dodd and Shelby] have yet to see eye to eye on a number of issues, including a proposal to create a new consumer agency and heightened government authority for dealing with large, troubled financial firms ... Dodd hopes his committee will begin the formal process of approving his bill as soon as the week after next..."

Rep. Frank makes tweaks to his bill. CQ: "Frank, D-Mass., told reporters Tuesday that a draft bill designed to mitigate the broad economic risks posed by the largest financial institutions would get a number of tweaks: a new financing provision would be added, a confidential listing of at-risk firms would be eliminated, and the authority of federal regulators to break up teetering conglomerates would likely be enhanced. A separate bill to regulate over-the-counter derivatives will also be amended on the floor to ensure that major banks aren’t able to evade new restrictions." ALSO, W. Post reports Frank wants Elizabeth Warren to head new CFPA.

British breaking up the banks. W. Post: "The British government announced Tuesday that it will break up parts of major financial institutions bailed out by taxpayers, highlighting a growing divide across the Atlantic over how to deal with the massive banks that were partially nationalized during the height of the financial crisis ... the Obama administration has maintained that large banks should be preserved because they play an important role in the economy and that taxpayers instead should be protected by creating a new system for liquidating large banks that run into problems. But Britain's decision already is being cited by a growing chorus of experts, including prominent bankers and economists, who want the United States to pursue a similar approach."

Wall Street's War Against the Real Economy & We, the People

Dave Johnson — Wed, 04 Nov 2009 03:00:15 -0800

At a meeting with bloggers before last week's Building The New Economy conference, AFL-CIO President Rich Trumka talked about how we have developed two economies, one real and one financial. As he said, originally the financial sector was designed to support the real economy by providing capital as needed for building manufacturing facilities, public infrastructure, etc. But in recent decades the power of Wall Street has twisted that relationship until the real economy now feeds the financial economy.

As I have been writing about, for decades the real economy has been "financialized" by the Wall Street types -- sold off piece by piece providing short term profits for a very few. We lost more than 50,000 manufacturing facilities in just the last decade! If you sell your house you might have some cash in your own pocket for a while but your family doesn't have a place to live and the present state of our economy demonstrates the long term cost of this kind of short-term thinking: a few Wall Street types have a bunch of cash and the rest of us don't have an economy anymore.

As each factory closes and its jobs are eliminated the companies that supplied machines, parts and supplies also go away. The effect on those of us still employed (for now) has been profound as we work longer hours for less pay and fewer benefits with ever-higher stress levels. A few get ever richer, the rest of us have ever-lower standards of living and quality of life. And our country's ability to bounce back becomes ever more compromised.

Along with others at CAF I have been exploring how We, the People became the servants of Wall Street and what to do about it. The post Companies As Buy-And-Sell Commodities - Workers, Customers and Country As Costs laid out the pattern of company buyouts and takeovers since Reagan. Here is the company-buyout pattern that has turned into a machine with no human concerns:

buying up good companies, shedding and outsourcing the workers, cutting their pay and benefits, outsourcing and cheapening the product or service, fleecing and mistreating the customers, closing the offices and factories and running up debt.

The post Caught In A Machine That Grinds Us Up talked about the incentives that created this inhuman machine:

I have described here a destructive, unsustainable system that creates company- and society-breaking machines. These exist because of the economic and social incentives that our government has set up and we allow to stay in place. Breaking unions, stealing pensions, outsourcing jobs and squeezing customers all depend on government not enforcing laws and regulations – especially labor, consumer and environmental rules. …

Certainly there is no incentive at the top to stop this. This system helps a wealthy few get ever wealthier and not feel the consequences. The people who do this are celebrated as "successful." And if they don’t like the resulting devastation to the economy, community, country and world they can just hop into their private jet or yacht to retire to their private island or tax haven.

This is conservative economics and the long-term consequences. Since Reagan supposedly stopped government from "picking winners and losers" our government has indeed been picking winners and losers with Wall Street winning and the rest of us losing. This brought about a concentration of wealth so severe that a very few now control almost all of the wealth of the country.

Over and over again we see the consequences of conservative economics and Wall Street domination: Short-term profits for a very few with devastating long-term consequences for the rest of us.

We see these consequences now as the economy supposedly enters “recovery” – Wall Street is reaping vast profits and paying astonishing bonuses – enabled by taxpayer dollars – while the taxpayers themselves face loss of houses, raises or jobs, pensions, health care, etc. Gains for a few at the expense of the rest of us.

Wall Street vs Costco

Just as with the private equity game, Wall Street and market ideology has been at war with any part of our economy that benefits customers or workers. For example, in 2005 the NY Times took a look at Wall Street’s war against Costco, How Costco Became the Anti-Wal-Mart. The complaint? Costco treats its customers and workers well. The article quotes one after another Wall Street “analyst” complaining that Costco is “altruistic” or “overly generous.” One makes it clear, saying the company “could force employees to pick up a little more of the burden.” In their eyes a business serving customers or employees is wrong. From the article,

Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

The head of Costco explained that they take a longer-term view:

Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."

And how does he do for himself?

Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.

"I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings.

So in 2005 Wall Street’s short-term view of how Costco should operate was to squeeze the workers, cheapen the products, fleece the customers and grossly overpay the CEO. Costco did none of that, and now it is 2009 – the long term. How is Costco doing? I looked over their annual report and they are going just fine. According to The Motley Fool,

The retailer of pianos, coffins, and, yes, 30-pound jars of mayonnaise -- along with hundreds of other goods in bulk -- has managed to continue growing during the recession, impressively avoiding any layoffs in the process.

By the way, last year Sinegal’s salary was still $350,000. And a week ago US News and World Report wrote about Sinegal that he still “has a habit, which sometimes irks stockholders and almost certainly annoys his competitors, of taking excellent care of his employees.”

So Costco, a real company, was under attack from Wall Street for providing actual service to customers and actual pay and benefits to employees who were actually in the United States. And Costco came out OK through the 2008 financial crisis and aftermath.

But then, what we call Wall Street came out of this OK as well. Thanks to their stranglehold on our political and economic systems Wall Street came out of all this enriched and emboldened, using taxpayer dollars to pay bonuses and increase their lobbying. Many of the individuals who might have looted and destroyed companies and communities are rich and gone, others are still collecting bonuses. As far as the public sees, few of them have faced negative consequences for what they did -- virtually guaranteeing that such activities will continue.

Lessons

What lesson should we take away from this? Costco is a rare exception to the new rules. How many companies can get away with ignoring the demands of Wall Street that they cheapen the products, squeeze the employees and drain their surrounding communities? Why do we allow a system that enriches a very few in the short term while harming the rest of us, and how do we change this? Why do we tolerate IBG-YBG, the "I'll be gone - you'll be gone" take-the-money-and-run attitude that understands that there are no consequences when you take as much as you can from everyone else?

Now that Wall Street and short-term, unsustainable profit-taking have brought us to inevitable collapse, where do we go from here? Well obviously too-big-to-fail is just too big and that is a starting point. We were forced by their size to bail out these institutions, actually making them even bigger, and now they use our money to lobby against taxpayer interests, lobby for more bailout dollars, lobby against compensation curbs and taxes, lobby against politicians who want to change things, against rules to protect consumers, and anything that might change the short-term destructive approach. Using our dollars to do this - did I mention? We should break them up, like England is doing. But our government is, for whatever reasons, not doing so.

The recent Building The New Economy conference provided some guidelines that we can follow as we look for paths out of this. Take a look at the blog posts from conference participants that try to tackle these questions. (There is also a highlights video and should be more video when available.) The themes from the conference included the need for the Obama administration to develop a national industrial/economic policy, a rebalancing of trade, increasing the manufacturing that we do IN the U.S., a new emphasis on increasing research and development, modernizing and maintaining our infrastructure, an infrastructure bank to finance public projects, improving education and access to education including vocational education, and passing the financial reforms currently before Congress.

And how about using taxpayer stimulus dollars to actually stimulate OUR economy?

So how do we reign in Wall Street? Leave a comment.

One Year After Election Day 2008: Still A Center-Left Nation

Bill Scher — Tue, 03 Nov 2009 11:43:40 -0800

Today's CNN poll, assessing President Obama one year after election day, confirms that America remains a center-left nation. Yet don't expect pundits to tell you that.

For example, poll analysis from the Wall Street Journal's John McKinnon implies that declining approval for Obama's handling of specific issues is down as perceptions of the president as "too liberal" are up:

In just about every specific policy category, Obama’s approval rating has declined significantly since the last time pollsters checked.

On the economy, it’s down to 46%, compared with 54% in September. On health care, it’s 42%, down from 51% in September. On the federal budget deficit, it’s 39%, versus 46% in September (although up from 36% in August). On Afghanistan, it’s 42% versus 49% in August.

The percentage saying his policies are too liberal (42%) is also up slightly [from 40% in August], although 44% still say his policies are just about right. The poll has a margin of error of four percentage points.

That makes it look like the nation is split down the middle about Obama's program, with conservatism on the rise.

But what the WSJ left out is the percentage of voters who say Obama's "views and proposed programs" are "not liberal enough."

That number is 14% -- up from 5% in March, and 8% in August.

Conservative disapproval is only up 2 points from August, while liberal disapproval is up 6.

While the combined percentage of voters of who deem Obama's agenda "just about right" or "not liberal enough" is 58% -- roughly parallel to Obama's overall approval rating of 54%. That's the center-left governing majority.

Which is not new to us. Institute for America's Future has been chronicling the underreported news of America's Progressive Majority, with reports earlier this year and last year.

So the declines in approval of Obama's handling of specific issues should not be interpreted as a wholesale rejection of the president's policy direction.

Quite the opposite. What we're seeing is a growing, albeit still small, frustration that Obama isn't moving far enough or fast enough to turn his progressive mandate into legislative reality.

I would argue that the president is taking the brunt of the failures of Congress to move the President agenda strongly and swiftly, thanks to the continuing delaying and weakening tactics of the right-leaning minority of the Democratic caucus.

So Congress should not interpret these numbers as cause to delay further, but to get moving.

Make Them Afraid Of Wall Street's Money

Isaiah J. Poole — Tue, 03 Nov 2009 08:19:00 -0800

Economist Robert Johnson says progressive activists are going to have to fight more aggressively against the forces on Capitol Hill and the White House who are working on behalf of the financial services industry to block financial reform, given the kinds of deals now being cut by the Obama White House and some Democrats in Congress.

Johnson, in the video interview above, says that while there is some good news in the recent moves toward creating a financial consumer protection agency, legislative proposals to curb the behavior of so-called "too-big-to-fail" banks remain seriously flawed.

The bottom-line problem, Johnson says, is that the campaign and lobbying dollars from the financial service industry is speaking louder than the general public. "I'd like to see voters mobilized to make people afraid to take Wall Street money," Johnson says.

Earlier, Johnson had a similar message in an interview with Democracy Now's Amy Goodman. In that interview, he tells a personal story that dramatizes the difficulty reform advocates are having in getting their views heard in Congress. Johnson was invited at the last minute to testify before the House Financial Services Committee, after Americans for Financial Reform helped pressure the committee to allow alternate voices from outside the banking industry. Johnson's testimony was cut short, however, by Rep. Melissa Bean, who was presiding over the committee hearing at the time and who is one of the committee's top recipients of banking industry campaign contributions.

Johnson is now the director of the newly created Institute for New Economic Thinking, which will use a 10-year, $50 million grant from financier George Soros to counter the "free-market fundamentalism" that helped set the stage for the financial crisis.

Progressive Breakfast: Boxer Stares Down GOP

Bill Scher — Tue, 03 Nov 2009 07:17:24 -0800

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

GOP Boycotts Today's Climate Bill Mark-up. No One Cares.

Sen. Boxer to proceed with climate bill markup today despite Republican delay tactics, after offering procedural concessions. Climate: "Boxer still plans to begin the markup at 9 a.m. with opening statements. But she agreed to suspend the markup at 2 p.m. for an open-door meeting with U.S. EPA officials to answer committee members' questions about the economic modeling of the legislation ... Republicans, who ignored yesterday deadline for filing amendments, also now have until 5 p.m. today to submit any suggested changes to the bill ... [GOP Sen. George] Voinovich declined to say whether he would attend the question-and-answer session ... But Voinovich did say he had no plans to back down on the boycott until he gets a more complete assessment of the climate bill from EPA..."

CQ notes an in-depth analysis will take weeks, and other studies are already completed. "EPA officials said they would need another four or five weeks to produce a more in-depth analysis — which Republicans say is a necessity before they attend a markup. But waiting would put Boxer under pressure from the White House. President Obama wants the Senate bill to show movement before a U.N. climate change summit in Copenhagen begins Dec. 7. Democrats say there have been ample studies of the legislation. The EPA, Congressional Budget Office and Energy Information Administration conducted in-depth studies of the House legislation that Boxer says largely apply to the Senate bill, which she describes as '90 percent the same.' ... Inhofe said one Republican will attend Tuesday’s session to keep an eye on things, but he declined to name that senator. He said committee rules require the presence of two members of the minority to constitute a quorum."

Kerry and Graham to meet with top White House climate officials. ClimateWire: "Kerry and Sen. Lindsey Graham (R-S.C.) are scheduled to meet tomorrow with several top Obama administration officials on the climate bill, including White House energy and climate adviser Carol Browner, Interior Secretary Ken Salazar and Energy Secretary Steven Chu. 'We have to get back some of the things we've been requesting from them, which will help to be able to determine what's real in terms of options and negotiations and so forth,' Kerry said. Asked what materials he is waiting for, Kerry replied, 'Ah ha! You'll have to see.'"

Carbon market consulting firm concludes oil industry cost under cap-and-trade is manageable, picture mixed for power companies. WSJ's Environmental Capital: "Oil companies are mightily exposed to the legislation—but the final bill will be just a drop in the bucket compared to their huge sales. Exxon, for instance, accounts for 6.5% of all the U.S. greenhouse-gas emissions covered by the Senate bill. The oil giant’s initial 'carbon bill' would be about $5.9 billion. But it can get almost all that back through slightly higher prices at the gas pump, leaving its net carbon bill at $277 million. Chevron and ConocoPhillips face similar, if smaller, bills. The picture for power companies is a bit different—the final bill is a bigger portion of their smaller sales and profits. Utilities with lots of coal will be hit hardest, Point Carbon notes. That means Duke (a net carbon bill of $129 million), Southern Company ($393 million), and American Electric Power ($252 million). Other power companies would actually come out ahead—those that have lots of renewable energy or low-emissions nuclear power plants. That group includes Exelon (net carbon gain of $1.7 billion), FirstEnergy ($494 million) and Edison ($279 million)."

Chairwoman of next month's Copenhagen meeting maintains hope for international agreement: "I know it's difficult, and I know the time constraint. But I also know from conversations with many American friends that a lot can be achieved in a few weeks, provided that the health care bill is dealt with in the not-too-distant future. They must find out how to avoid coming empty-handed to Copenhagen ... The momentum is so big that something will come out of Copenhagen. The involvement from ministers is as strong as ever, and they will expect their negotiators to be able to come up with a text that marks clear political choices."

Copenhagen pre-game negotiations in Barcelona yet to make progress. Treehugger: "...initial reports aren't exactly encouraging: An IEA official says negotiators aren't ready to solve any of the problems on the table; while pressure builds on the United States to actually commit to a meaningful 2020 emission reductions target ... Yvo de Boer, head of the UN Climate Change Secretariat: 'We need a clear target from the United States in Copenhagen. That is an essential component of the puzzle.'"

de Boer told Barcelona negotiators time is running out: "On Monday he reminded negotiators in Barcelona that there were only five days left to narrow down options and come up with working texts before they regrouped in December."

Health Care Grinds On

House floor action won't begin this week. CQ: "Differences among House Democrats over issues related to abortion and immigration have forced Democratic leaders to delay floor action on health care legislation until the end of the week as they attempt to satisfy moderate members of their caucus. A manager’s amendment that is expected to include compromise language on both issues will not be ready until Tuesday at the earliest, Democratic leadership aides said Monday. Because Democrats have agreed to allow House members — and the public — to see the amendment 72 hours before debate begins, floor action likely will not begin until Nov. 6, the aides said."

Politico speculates health care may not finally pass until 2010: "The House could take up reform on the floor as early as this week, with a good shot at passing something by Veterans Day. But in the Senate, Majority Leader Harry Reid is still wrangling with his moderate members to corral 60 votes just to get the debate started. And on Monday, Reid sent a letter to Republicans acknowledging that he is waiting on the Congressional Budget Office’s cost estimates and analysis to finish drafting a bill. Democrats signaled that those estimates would not be ready this week, casting further doubt on their ability to finish reform this year."

The Hill reports House "centrists" are gradually coming around: "'We’re not there yet, but we’re in a better spot than we were a week before the climate change vote,' said a Democratic leadership aide..."

Beltway view is Lieberman won't filibuster. The Hill: "Reid’s staff has told anxious liberals that Lieberman has given the Democratic leader assurances that he will not wreck the reform bill because of Reid’s decision to include the public option, according to two sources briefed on the issue. As a result, well-connected liberals inside the Beltway who are in touch with Reid’s office have taken a more optimistic view of Lieberman’s position, while activists and bloggers outside the loop have seethed over his statements from last week."

Ezra Klein flags Jon Gruber analysis that House bill will reduce premiums: "...the CBO projected that, absent reform, the cost of an individual policy in the nongroup market would be $6,000 for a plan with an actuarial value of 60 percent. This implies that the same plan that cost $6,000 without reform would cost $4,540 with reform, or almost 25 percent less ... This conclusion is consistent with evidence from Massachusetts ... the results have been an enormous reduction in the cost of nongroup insurance in the state: The average individual premium in the state fell from $8,537 at the end of 2006 to $5,143 in mid-2009, a 40 percent reduction, while the rest of the nation was seeing a 14 percent increase."

House Dems argue their bill will reduce premiums. NYT: "As the House moved toward climactic votes on legislation to remake the health care system, the Congressional Budget Office said Monday that middle-income families might be required to pay 15 percent to 18 percent of their income on insurance premiums and co-payments under the proposal. Democrats cited the figures as evidence that the legislation would reduce premiums for many low- and middle-income families who currently lack affordable coverage."

Senate analysis challenges where private insurance revenue goes. NYT: "The health insurance industry likes to cite figures showing that 87 cents of every dollar in premiums is spent on medical claims. But a new Senate analysis suggests that for-profit insurance companies are spending much less than that, especially for policies sold to individuals and small businesses. Instead, as little as 66 cents of each dollar paid in premiums goes toward doctor and hospital bills, while the rest covers administrative expenses, marketing and company profits..."

Republican plan won't even ban discrimination against people with pre-existing conditions: "Republicans plan to offer a measure much narrower in scope and more modest in its goals. GOP leaders are unable to say yet how much their bill would cost or how many Americans would gain health insurance under their plan, but Minority Leader John A. Boehner (R-Ohio) said Monday that his party's bill was sent to the Congressional Budget Office for scoring ... Boehner said Monday that the measure would not include language banning insurance companies from denying coverage to consumers with preexisting conditions..."

Nebraska poll shows support for public option, despite Sen. Nelson's opposition: reports HuffPost.

Economic Breakfast Sides

Bloomberg speculates Congress may stop Fed from endings its intervention in the housing market: "Federal Reserve Chairman Ben S. Bernanke is gambling that come March, he can stop the purchases of mortgage-backed securities that have propped up the U.S. housing market. Congress may have other ideas ... Bernanke ... is counting on private investors to fill the void left by the Fed when its purchases end. If he’s wrong, he may come under pressure from politicians to maintain support for housing or even extend credit programs for small businesses and consumers. That would threaten the Fed’s ability to conduct an independent monetary policy."

HuffPost's Shahien Nasiripour reports WH Chief of Staff Emanuel backs Rep. Maloney amendment to weaken financial reform: "White House Chief of Staff Rahm Emanuel has been telling Democratic members of the House Financial Services Committee that he supports amending the Investor Protection Act of 2009 -- a bill designed to beef up protection for investors -- in order to exempt small businesses from a requirement in the Sarbanes-Oxley Act that mandates audits of internal controls ... Emanuel is said to support an amendment proposed by Rep. Carolyn Maloney (D-N.Y.) that would exempt firms with a market capitalization of less than $75 million from the reporting requirement."

Politico reports on pushback against House too-big-to-fail bill: "...House Financial Services Committee chair Barney Frank may postpone today's scheduled committee consideration of systemic risk legislation and instead call for further hearings ... postponement would come following 'significant' concerns from Dems on the committee over how the bill is structured. The main dispute centers on who would pay -- and when -- if the federal government is forced to dismantle a giant bank whose collapse would threaten the financial system. The White House and Frank initially preferred language that would place the cost on the failing company's competitors but would give the competitors 60 months from the time of the wind-down to pay back the government, sticking tax-payers with the bill for five years. Some Democrats and other opponents of the White House/Frank plan would rather assess fees on banks with $10 billion or more in assets. The fees would go into a fund to be used to wind down failing firms if necessary. Banks are not thrilled with the idea of paying into this fund ... Frank yesterday indicated he would be willing to push an amendment that would require firms to pre-pay. Treasury Secretary Geithner has warned that such a fund would create moral hazard, encouraging excessive risk-taking on the part of banks who know they have such a fund to rely on."

Senate reform bill may come next week. CQ: "Dodd, D-Conn., and his aides have confirmed several major tenets of the pending proposal, including many that break from ideas put forth by the Obama administration and House Financial Services Chairman Barney Frank, D-Mass. Most notably, Dodd has said his proposal will include a consolidation of federal banking regulators, an idea that has been panned as politically untenable by Treasury Secretary Timothy F. Geithner and Frank."

Fed discussed exec pay with top bankers. NYT: "In 20-minute sessions, Fed officials told bankers that they might need to fundamentally reform their pay practices as the agency moved forward with a comprehensive review of 28 large financial institutions. Fed officials imposed a Feb. 1 deadline for them to submit a written plan of any changes, but urged them to begin the overhaul now as they considered bonuses for 2009 ... Some analysts questioned whether the meetings — and the Fed’s newfound focus on pay — were largely a public relations exercise ... "

US Stimulus Helping Chinese, Spanish Wind Energy Industries

Natasha Chart — Mon, 02 Nov 2009 23:53:57 -0800

Wind energy is supposed to be able to create thousands of manufacturing jobs, but unfortunately the early wind energy manufacturing jobs financed by US stimulus money have all gone to overseas manufacturers. There are at least three reasons why this happens, some easier to fix than others.

The Easier Problem

First is the problem of US wind turbine manufacturing capacity. It's tiny.

This could be improved by the adoption of a well-designed feed-in tariff. Feed-in tariffs are where the government sets mandates for renewable energy and supports the purchase of the resulting electricity at a rate that pays for the initial market entry.

Feed-in tariffs are why Spain is one of the countries whose wind turbines are being purchased for installation in the US. Also, many countries have preferential purchasing policies at the local level, which don't violate WTO rules.

Both feed-in tariffs and state or local government 'buy American' policies could be implemented in full keeping with our international trade obligations and we should do so at once.

The US needs to support its own industries, particularly those with significant environmental benefits, without apology.

The Somewhat Harder Problem

The US government has a bad attitude towards manufacturing and has favored the making of money over the making of things for a long time, the more complicated the scheme, the better. And conventional wisdom from the Commerce Department to all the serious business press has held that offshoring and outsourcing US jobs would cause no net changes in the job picture overall, even if there might be an unfortunate backlash tendency among the public.

Indeed, the policy elite seem baffled when people get upset that their mill or factory job disappears and they had to take work stocking shelves at a store that sells the imported version of what they used to make. Politicians appear confused when workers with degrees in computer science react badly to being told to get an education. But their confusion is surely an act.

It's been clear for a while now that many industries leave and don't come back. Manufacturing capacity and know-how is shipped off first, then the high value research and development jobs follow after them.

Retraining, a solution that politicians like to promote along with stern bromides about 'personal responsibility', is only a solution that works if there are comparable jobs to train for. It only works if the finance industry is willing to invest in businesses that hire skilled Americans, and if the tax code stops advantaging companies who keep jobs and profits overseas.

The reality more Americans live with all the time is that their job prospects have gotten worse over the years, with employers and investors increasingly unwilling to share profits with them.

Obama recognized this when he was campaigning and newly elected, saying that he'd stop offshoring tax breaks all the way through the summer. As of the middle of October, business leaders had convinced the president to shelve those plans.

You might hear politicians, business leaders, news anchors and various policy wonks say that outsourcing creates jobs and increases real wages for Americans. This is a lie unless you're referring specifically to the top 10 percent of US income earners, though wage inequality is a problem all around the globe.

Those offshoring tax breaks need to be rescinded, and more, policy makers need to connect start connecting the dots between an economy that makes useful things and one in which ordinary consumers can afford to buy them. One hedge fund manage making a million dollars off an overseas business deal isn't going to generate the same level of beneficial economic activity as twenty manufacturing workers making $50,000* per year, each.

The Very Challenging Problem

This problem is the real sticker, because unlike adjusting our own policies, economy, or leaders' attitudes, this one involves Chinese policy.

Wind turbines require rare earth elements for their manufacture, which make good permanent magnets, and this is also true of many other green technologies. As Keith Bradsher pointed out, "China currently accounts for 93 percent of production of so-called rare earth elements — and more than 99 percent of the output for two of these elements, dysprosium and terbium," and they've been both more tightly restricting exports every year, as well as securing controlling interests in overseas mines.

The Chinese government is well aware that most wealth is created farther down the value chain than simple extraction, that the real money is in processing and fabrication. They would like their people to earn that profit. Considering that I'd like my government to take the same attitude, I can hardly fault the Chinese on that count.

I even hope the Chinese do continue to grow their alternative energy manufacturing for their own domestic market in particular. At present, they're sending over 95 percent of their solar panels to be exported, while opening a new coal plant every 7-10 days.

Yet it significantly disadvantages manufacturing in other countries that the Chinese government won't allow the materials to be sold on the open market like other commodities.

The Obama administration, acting in concert with the European Union, filed a June complaint with the WTO about Chinese export restrictions of raw materials that have driven prices up for the steel industry. It might be a while before we know how that's going to turn out in the end. Perhaps rare earth mineral exports will be a target of future actions, or perhaps more clean, high grade deposits (rare earths are often found in low concentrations and contaminated with radioactive elements) will come to light that the Chinese don't control.

Either way, something's got to give.

A flourishing US wind industry that does more than installation and maintenance will require steady supplies of permanent magnets. Otherwise, they'll end up over the same barrel as Toyota, whose Prius hybrids use 12 kg of rare earth materials per battery and more for the motor, and whose component manufacture they're now under pressure to move to China.

These issues are solvable, but it'll take quite the fire getting lit underneath the US political establishment to get them sorted out.

* Speaking of which, the median US household income in 2007 was $50,740, and it dropped 3.6% in 2008.

Blowing in the Wind: Aggressive Steps Needed for Clean Energy Manufacturing

Steven Capozzola — Mon, 02 Nov 2009 13:16:48 -0800

On Friday, the Wall Street Journal trumpeted the news that a Chinese firm will be the exclusive supplier to one of the largest wind-farm developments in the U.S. and that the developer of the project would be seeking U.S. taxpayer assistance. The 36,000-acre West Texas development announced that it would purchase 240 2.5-megawatt wind turbines from Shenyang Power Group, a five-month-old alliance with operations in China.

Question: Why aren’t American firms building this clean energy project?

President Obama has made it a priority to expand U.S. production of clean renewable energy, which has the potential to create millions of new, good -paying manufacturing jobs. Aggressive steps should be considered – including domestic sourcing requirements similar to Buy America – to ensure that these jobs are created here in the U.S. and not in countries like China that have a record of providing massive subsidies to its domestic manufacturers, including to steel and glass, in order to undercut U.S. producers.

AAM Executive Director Scott Paul has submitted a letter to President Obama emphasizing the lost opportunity for domestic U.S. manufacturing. In part, the letter notes:

I am deeply concerned that if not done properly, our efforts to rejuvenate our manufacturing base in this country could be unseated by subsidized imports from countries seeking to capitalize on new demand for clean energy products in the United States, such as wind turbines and solar panels.

I was shocked to learn of the massive 36,000-acre West Texas wind farm development that will rely solely on wind turbines manufactured in China. The developer will be seeking federal tax credits and support from the Stimulus package. According to an October 30, 2009, article in the Wall Street Journal, “the project should create 2,800 jobs – of which 15% would be in the U.S. The rest would flow to China, where Shenyang employs 800 people.”

Simply put, U.S. producers can and should be building the same turbines as the Chinese firm. The WSJ cites Elizabeth Salerno, a spokeswoman for the American Wind Energy Association, who says that in the first three quarters of 2009, there were 33% fewer announcements of U.S. turbine-factory expansions than in the comparable period of 2008.

In this case, it means another lost opportunity to revitalize U.S. manufacturing.

Corporate Money In Elections -- What To Expect

Dave Johnson — Mon, 02 Nov 2009 07:50:05 -0800

The Supreme Court may decide as soon as tomorrow on the Citizens United v. Federal Election Commission case involving a corporate-funded anti-Hillary smear ad. It is likely the conservative-dominated activist court will overturn precedent and rule in favor of removing restrictions on corporate spending in elections, with terrible consequences. The 5-4 ruling will say that large companies injecting vast sums to sway election results is “free speech.” Imagine, vocal cords on a Cayman Islands post office box!

Common Cause has a report out, titled, Corporate Democracy: Potential fallout from a Supreme Court decision on Citizens United. "Lifting the ban on corporate political spending could unleash a flood of money into the political system and further diminish the public’s voice," the report says.

Really, imagine regular people trying to run for office while competing with the massive aggregated financial power of the biggest corporations. And imagine what will happen to anyone who dares to try to go up against their interests when they are able to openly spend any amount needed to get their way. I have come up with some examples of what to expect:

- The cost of running for office – any office – will increase exponentially. Even local campaigns will cost millions of dollars, as big corporations install their chosen representatives. Even locally powerful businesses will join the game, with car dealers paying to get local ordinances passed prohibiting new competitors, etc.

- A member of Congress considers voting against a special tax break for a certain very large corporation – or a law outlawing their competitors – which would bring the company $30 billion. The company lets that representative know they are prepared to spend a measly $200 million on a challenger in the next election, or for them if they vote the right way. How do you think that representative will vote -- and if they do the right thing how long do you expenct them to keep their seat?

- A huge oil company will certainly spend a measly $100 million to install a hand-picked board of county supervisors that will let them put a refinery in the middle of an organic farming or sensitive environmental region.

- Why wouldn't agribusiness spend a mere $1 billion installing legislators who vote to rescind food labeling requirements and food safety regulations?

- How long will it take before laws against monopolies, polluting the environment, etc. are repealed? Each election cycle will see corporate-backed candidates further consolidating the power and financial resources of a very few largest companies.

- Health insurance companies will pay Congress to pass a law ordering everyone to buy their product. Oh wait …

This is about the biggest corporations remaining dominant, using government power to channel tax dollars their way, while hampering competition -- especially from smaller, less powerful companies. The conservatives on the Court are there thanks to decades of spending by the biggest corporations that swayed public opinion in favor of big-corporation-supporting policies and politicians. We are seeing the results of these so-called “conservative” policies all around us as we lose our houses, raises, jobs and pensions while a select few grow ever richer.

If the Supreme Court rules in favor of this tomorrow it will be the big payoff, forever consolidating big-corporate control of the country and economy and effectively ending what was left of American democracy.

Progressive Breakfast: Health Care Up, Climate Down?

Bill Scher — Mon, 02 Nov 2009 05:13:35 -0800

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

Health Care Advancing, Bit By Bit

NYT offers optimistic update on health care legislation: "... President Obama’s arms-length strategy on health care appears to be paying dividends ... The bills have advanced further than many lawmakers expected. Five separate measures are now pared down to two. But the legislative progress has come at a price. In the absence of specific guidance from the White House, it has moved ahead in fits and starts. From here on, the challenges will only grow more difficult ... In the House, where leaders have vowed to pass a bill by Nov. 11, a fight over abortion coverage could still imperil the legislation, and Mr. Obama could lose some votes from liberals upset that the bill includes a weakened 'public option,' ... Last week’s back-and-forth in the Senate was emblematic of a process that has at times seemed on the brink of anarchy."

HuffPost's Art Levine observes the House-Senate differences on taxing expansive insurance plans may be a major stumbling block: "abor unions, joined with other progressive organizations like Health Care for America Now, will be pushing to strengthen the legislation when the bills come to floor votes, but they're also focusing their efforts on ensuring that midde-class families and union members aren't slammed by a whopping 40% tax on insurers offering so-called Cadillac plans."

E.J. Dionne notes incremental, immediate reforms will have the biggest political impact in 2010: "...since most of the changes don't become effective until 2013, the next few years will be a time of uncertainties and unknowns. Citizens typically want to know what's in this for them, and what they'll get right now. That's why the most important document House Democrats released when they unveiled their bill last week was a list of 14 benefits that would be created immediately. These include insurance reforms to ban lifetime limits on coverage and an end to 'rescissions,' under which insurers abruptly nullify patients' policies after they file claims. One of the most popular reforms in the bill -- barring insurers from denying coverage to those with pre-existing conditions -- wouldn't take effect until later. So the House bill creates an interim high-risk pool to help those who need coverage in the meantime. There are also particular benefits for Medicare recipients, including an immediate reduction in drug costs, and a very popular provision that would allow parents to keep their children on the family health plan through age 26. Especially important are new investments in community health centers and in efforts to increase the number of primary care doctors."

Sen. Snowe tells AP he "trigger" proposal doesn't have the votes to pass, won't bother introducing it. (via FDL)

Change.org's Tim Foley notes the House health care bill cuts the deficit more "than the Senate Finance Committee bill."

Senate Climate Bill Faces Committee Debate This Week

W. Post delivers a pessimistic update on Senate climate bill before tomorrow's committee debate: "With Democrats deeply divided on the issue, unless some Republican lawmakers risk the backlash for signing on to the legislation, there is almost no hope for passage ... Democratic leaders, with the support of the Obama administration, are trying to sway at least half a dozen Republicans by offering amendments to speed along their top priority: building nuclear power plants ... it remains unclear whether that approach will hold currency in the current era of political polarization."

CQ reports Sen. Stabenow looking to advance agricultural interests in climate bill offset program: "The two-term Democrat has been negotiating closely with farm groups and the bill’s sponsors, John Kerry, D-Mass., and Barbara Boxer, D-Calif., to craft language that favors farmers and can win support from colleagues representing rural regions ... Stabenow envisions Michigan cashing in on an offset program. The state has many forests, which release carbon when cut down. Landowners could earn offset payments by keeping the forests intact. The senator even envisions ways for Michigan’s economically depressed cities to generate cash from a carbon offset program ... Boxer said flatly: 'She’ll write the agriculture title.' But it’s not clear that Agriculture Chairwoman Blanche Lincoln, D-Ark., agrees ... [Farm groups] want the Agriculture Department — which is likely to be more sympathetic to farmers’ interests — to oversee a farm offsets program instead of the EPA. Environmentalists say this could undercut the program’s value as a conservation tool. ... An early draft of Stabenow’s legislation aims to straddle the agency line, giving the Agriculture Department chief jurisdiction of the program while creating a consultation role for the EPA and establishing a scientific panel to evaluate the environmental integrity of offset projects."

Al Gore predicts Obama will go to Copenhagen next month, reports EnviroKnow.

Climate Progress praises Al Gore's latest climate book: "a must-read book for those who want a primer on all the key solutions countries will be considering at Copenhagen."

Texas 600-megawatt wind farm creates more than 6 times the number of Chinese jobs than US jobs. NYT's Green Inc.: " The total cost of the project, which was brokered in part by the U.S. Renewable Energy Group, an American private equity company, was estimated at $1.5 billion. At an event after the announcement in Washington on Thursday, Cappy McGarr, a managing partner at the company, was beaming. 'This planned $1.5 billion investment in wind energy will spur tremendous growth in the renewable energy sector,' Mr. McGarr was quoted in a news release as saying, 'and directly create hundreds of high-paying American jobs.' ... The group’s calculations last week put the number of American jobs at a little more than 300 — most of them temporary construction jobs, along with about 30 permanent positions once the wind farm is operating. Mr. McGarr told The Wall Street Journal that more than 2,000 Chinese jobs would be created by the deal. That, along with the fact that the project was hoping to secure 30 percent, or $450 million, of its financing from U.S. stimulus funds, was enough to send tempers flaring."

Goldman Sachs Quietly Behind Subprime Housing Crisis

McClatchy uncovers Goldman Sachs secretive role in foreclosing on subprime mortgage homeowners: "Goldman spent years buying hundreds of thousands of subprime mortgages, many of them from some of the more unsavory lenders in the business, and packaging them into high-yield bonds. Now that the bottom has fallen out of that market, Goldman finds itself in a different role: as the big banker that takes homes away from folks such as the Beckers. The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman's then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003. Unable to identify a lender, the couple could neither capitalize on a mortgage hardship provision that would allow them to defer some payments, nor on a state law enabling them to offset their debt against separate, investment-related claims against Goldman."

GOP sees fresh opening to end TARP. Politico: "...Republicans are moving to use yesterday’s bankruptcy filing by business lender CIT to score political points against TARP -- which Senate Republicans are pushing to end with an amendment to unemployment benefits legislation this week. House Financial Services ranking Republican Spencer Bachus (R-Ala.) said in a statement that CIT’s filing 'highlights the folly of a legislative proposal that makes the Federal Reserve the unchallenged arbiter of systemic risk, capital adequacy, and financial stability.'"

We Can Not Afford Not Passing More Stimulus

Krugman sounds the alarm: "Suppose that the economy were to keep growing at 3.5 percent. If that happened, unemployment would eventually start falling — but very, very slowly. The experience of the Clinton era, when the economy grew at an average rate of 3.7 percent for eight years (did you know that?) suggests that at current growth rates we’d be lucky to see the unemployment rate fall by half a percentage point per year, meaning that it would take a decade to return to something like full employment. Worse yet, it’s far from clear that growth will continue at this rate. The effects of the stimulus will build over time — it’s still likely to create or save a total of around three million jobs — but its peak impact on the growth of G.D.P. (as opposed to its level) is already behind us. Solid growth will continue only if private spending takes up the baton as the effect of the stimulus fades. And so far there’s no sign that this is happening. So the government needs to do much more. Unfortunately, the political prospects for further action aren’t good."

American Prospect's Jake Blumgart reports ME and WA may pass anti-tax anti-stimulative initiatives tomorrow that will gut state government services: "TABOR bills are designed to restrict government spending by capping taxes at the previous year's levels, and allowing them to grow only in relation to population plus inflation. This idea can be problematic in boom years, but critics fear it would be disastrous now, when state and local budgets have already been cut to the marrow. If TABOR passes in Maine or Washington, the states would have to cap their budget at the 2010 revenue baseline. If the recession continues eating into revenues, the TABOR cap would only continue dropping, forcing governments to cut more programs. If the economy improves, Maine and Washington would still be trapped by the previous year's spending limit -- in this case, the trough of the worst recession in a generation. Essentially, both states -- along with every county and city within them -- would be locked into recession-era spending. 'TABOR would make it impossible for either state to ever recover any of the public services that were cut during this recession,' says Iris J. Lav, senior adviser for state fiscal policy at the Center on Budget and Policy Priorities. 'In a recession, revenues drop. When revenues drop under TABOR the inflation and population allowances are applied to those reduced revenues, you don't get to go back to your previous base.'"

Fed rate decision Wed., unemployment numbers Fri. notes W. Post.

Possible positive manufacturing news. Bloomberg: "Factories in the U.S. probably grew at a faster pace, while the number of people signing contracts to buy houses showed no improvement, signaling a shift to manufacturing as the driver of the expansion, economists said before reports today ... 'Manufacturing is back in expansion territory on a sustained basis,' said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina."

A Rich University's Mad Dash to Get Richer

Sam Pizzigati — Sun, 01 Nov 2009 09:38:32 -0800

Investing recklessness at Harvard is making 'the best and the brightest' look awfully silly — almost as silly as a nation that lets staggering quantities of wealth continue to concentrate.

Wild chases after vast riches, last fall’s global meltdown reminded the world, can destroy economies — and corrupt entire societies. Great universities, in theory at least, can serve to slow these chases. They offer a refuge from marketplace passions, a place where sober scholars can reflect thoughtfully on the damage frenzied speculation can do and how that damage can be undone.

America’s greatest university — Harvard — hasn’t enabled much of that reflection lately. The reason? Harvard has been too busy chasing riches.

Now that chasing has left Harvard, the world’s wealthiest university, enveloped in an embarrassing financial debacle that has cost hundreds of university employees their jobs, frozen the salaries of many others, and stopped campus development projects dead in their tracks.

“Harvard's investment managers played some of the same reckless games as the big banks,” says historian David Kaiser, a Harvard alumnus. “The difference is that Harvard isn’t eligible for a bailout.”

Kaiser and other Harvard grads from the class of 1969 have been critiquing Harvard investment practices since they learned six years ago that officials in the Harvard Management Co., the university office that invests Harvard’s endowment, were pulling in enormous Wall Street-style bonuses. In 2002, just six of these investment managers pocketed a combined $107.5 million.

To go about grabbing those millions, Harvard’s financial managers were investing university endowment dollars in exotic “derivatives” that promised high, double-digit annual returns. The higher the returns, the higher the rewards for the investment managers — and the greater the incentive to keep plowing endowment dollars into even shakier investments.

But the risk taking went beyond endowment dollars. Harvard actually began investing general operating funds in the same risky investments, in the process, observed the Boston Globe, violating “one of the most basic rules of corporate or family finance: Don’t gamble with the money you need to pay the daily bills.”

And what were Harvard’s grown-ups doing while all this was happening? They were looking the other way. In May 2002, a staffer at Harvard Management wrote then Harvard president Lawrence Summers a confidential letter to warn about the investing recklessness she saw all around her. Nothing changed. Two months later, she was fired for making “baseless allegations.”

Summers, a controversial figure at the university in his own right, would leave Harvard in 2006. He resurfaced, after last November, as the director of the new Obama administration's National Economic Council.

By that time, the global financial industry had collapsed. In the wake of that tumble, Harvard’s celebrated endowment — worth $36.9 billion at its peak two years ago — lost nearly $11 billion in just a year. The Harvard general operating fund lost another $1.8 billion.

More bad news came earlier this month. Harvard officials revealed they had shelled out just under $500 million, in the university’s last fiscal year, to a host of big Wall Street banks to cover a “failed bet that interest rates would rise.”

University officials, notes the Class of 1969 Ad Hoc Committee on Harvard’s Endowment, have responded to some alumni complaints. The university, for instance, significantly increased student financial aid several years ago. But Harvard, alumni critics charge, is still refusing to “acknowledge any fundamental mistakes.”

These alumni now want the university to cap investment manager earnings.

“We continue to believe,” the Class of 1969 committee related in a recent letter to Harvard president Drew Faust, “that no Harvard employee should earn more annually than the president of the university and that multi-million dollar bonuses are inappropriate in nonprofit institutions.”

The alumni critics also want Harvard to report how many university dollars have gone to the outside investment firms that have, in recent years, managed as much as two-thirds of the university’s endowment investing.

Outside investment managers typically receive a flat 2 percent annual fee on the billions they invest and a 20 percent cut of the profits they make buying and selling invested assets.

Absolutely “no one,” adds the alumni letter to Harvard’s president, “should be compensated on such an enormous scale for managing nonprofit funds.”

But the angry alumni are seeking an even broader change. They want Harvard to start acting as a great university should.

The reckless investment moves that have cost the university so dearly, the alumni note, essentially mirror “the practices that in the same period brought down most of our major financial institutions, with enormous short-, medium and long-term costs to the United States and the entire world economy.”

“Surely Harvard,” they note, “can find the intellectual, moral, and financial capital to face this fact squarely and begin a public discussion of the weaknesses of our financial practices, not only for the sake of the institution, but to help the society which it serves.”

In the end, the Harvard financial fiasco helps make clear, financial maneuvers that pump up endowment jackpots — and rewards for endowment investment managers — don’t contribute to academic greatness. They undermine it.

Indeed, the staggering concentration of wealth in the Harvard endowment — from $4.7 billion in 1990 to $36.9 billion in 2007 — has taken place over years that have witnessed the overall deterioration of American higher education.

The public colleges and universities that deliver most of that education have been steadily cutting academic services and raising tuition beyond the means of average working families, in no small part because tax cuts for America’s wealthy — the same wealthy who donate so prodigiously to their elite alma maters — have helped drive down state budget support for higher education.

The total average annual cost of attending a public four-year college, the College Board reported earlier this month, has now hit $15,213.

“The level of debt we’re asking people to undertake,” agonizes Patrick Callan of the National Center for Public Policy and Higher Education, “is unsustainable.”

The lesson in all this? In both academe and society at large, as the most learned Sir Francis Bacon pointed out over four centuries ago, wealth — like manure — only does good when you spread it around.

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.

Higher Ed Slashed, Left Dripping in Red

Armand Biroonak — Sat, 31 Oct 2009 08:51:12 -0700

The Chronicle of Higher Education released a survey of chief financial officers at four-year universities across the country and it is no treat; their outlook for this budget year (FY 2010) was gloomy, by next year? Even scarier. According to universities surveyed, 62% of officials expect the worst of financial pressures are still to come, with higher education budgets dripping in red ink, bitten by the recession looking forward.

This is despite the fact that universities have already slashed budgets, passed hair-raising tuition hikes, and in some cases chopped enrollment. At least 34 states already took the ax to public colleges and universities, reducing faculty and staff, coupled with steep tuition increases for the upcoming year.

And fiscal year 2011 looks equally sour, a total of 39 states expect to face or have already addressed shortfalls, amounting to an estimated $80 billion or 14 percent of state budgets. Although no real specifics, these fiscal challenges will surely trickle down to effect higher education spending even further.

To make up at least some of the difference, universities are spooking students with truly frightening tuition rates. On average the past year, tuition rose by nearly 10 percent for public four-year institutions. This comes after students were tormented with tuition increases of over 60 percent adjusted for inflation since 2000.

Meanwhile, enrollment and aid cuts are furthering the pain for students in a number of states. The California State University system plans to cut enrollment by 40,000 students. In Illinois, about 140,000 undergraduates (a quarter of all Illinois college students) will likely lose financial aid from the state. Ohio cut its top grant program in half, by $224 million.

And it is not just universities, weak state budgets are haunting community colleges equally. The majority of community college administrators predict that they will have mid-year budget cuts next year. While students can expect tuition to rise more than double the rate of inflation, as 46 states predict tuition increases at their community colleges.

And community colleges are feeling the effects of this recession in another way, as throngs of returning workers seek skills or job retraining. But the timing could not be worse. By a margin of 3:1 states report stress on their institutions to accommodate growing enrollment amid classroom cuts. In fact, in many cases, community colleges are so overextended that they now offer classes well into the graveyard shift to meet demand.

So what can be done to alleviate the skeletal state of higher education? A good start will be if the Senate passes the Student Aid and Fiscal Responsibility Act that expands Pell Grants and invests in community colleges. But that will not stop the bleeding alone. A second stimulus to help bridge state budget gaps for the upcoming year is critical until the economy shows signs of life again. While also, greater student aid and the creation of a ‘micro-Pell grant’ for workers to help pay for non-degree training can improve accessibility and affordability. While looking outward, we must start considering a way to better finance our education system, so it no longer resembles a sugar high and low.

The National Security Supply Chain

Natasha Chart — Fri, 30 Oct 2009 11:50:53 -0700

Did you know that the Army can no longer purchase domestically produced Howitzer triggers? Yesterday at the Building the New Economy conference, Carolyn Bartholomew, chair of the U.S.-China Economic and Security Review Commission explained that she'd seen this news turn on lightbulbs in the minds of Republicans as to why it's important to preserve manufacturing capacity in America.

Gov. Ed Rendell of Pennsylvania touched on this theme in his address as well. He asked attendees to "imagine going to war without a steel industry." Rendell also noted the problem outsourcing posed for economic security, saying that should the time come when the US produces nothing, it will be only a second- or third-rate economic power.

At every level, the US manufacturing sector is under threat of extinction. From basic materials fabrication, to machining, to high end electronics production. Combined with increased reliance on a finance sector that's only interested in the size of their bonuses and a political system intellectually handicapped by a cliche horror of interfering with the 'market's ability to pick winners and losers', we are gradually losing the ability as a nation to decide what's in our own best interests and act accordingly.

We used to act in our own interests unapologetically, and in other arenas besides declaring ridiculous pre-emptive wars that anger large majorities of the world's population. Consider our interstate highway system, which since its earliest incarnation as an idea was all about national defense. The interstate system has many economic benefits' as well, but it was mainly security concerns that ruled its creation. As the folks at GlobalSecurity describe the history of our highways:

When President Eisenhower went to Kansas to announce the interstate highway system, he announced it as "the National Defense Highway System." In 1956 President Eisenhower signed legislation establishing the National System of Interstate and Defense Highways (about 41,000 miles of roads). Since then, DOD has continued to identify and update defense-important highway routes. The National Defense Highway system was designed to move military equipment and personnel efficiently ...

Politicians used have an easier time saying that we were doing things for national security other than going to war, or violating the Constitution and Geneva Conventions, or provoking people we could be sitting down and negotiating with. Such a narrow interpretation of national security is actually dangerous where it isn't counterproductive.

The US does indisputably have enemies. The nation has taken huge hits in recent years to both moral authority and international goodwill. The US has also recently taken a large financial hit and the refusal of the federal government to rein in the irresponsible finance industry, as well as the potential that the dollar will lose reserve currency status and use as the common denominator of global fossil fuel exchanges, opens the possibility of steady erosions in relative economic power. Losing leverage over the supply chain and intellectual capital needed to maintain it means increased susceptibility to international pressure and retaliation via sanction, as well as a reduced ability to directly ensure the protection of that supply chain from terrorist attack.

We're opening ourselves up to problems that, even if they take a long time to materialize, can significantly restrain our freedom of action and increase our vulnerability to outside leverage.

In short, as someone who routinely disagrees with the hawk position and thinks of open warfare as a monumental failure of human intelligence, I worry that we're not properly defending ourselves from provocations to war. It's just stupid.

Also in other news, I come down strongly in favor of locking front doors and having a criminal justice system. Because pacifism is a different thing than being a masochist or having a death wish.

Failure is Their Only Option

Terrance Heath — Fri, 30 Oct 2009 09:40:44 -0700

Steve Benen asks a question about the Republican health care reform plan — or lack thereof — that I'm certain I've seen answered already.

The House Republican leadership "guaranteed" that they would offer an alternative health care reform bill. If my count is right, that was 134 days ago.

Asked about when Americans can expect to see the GOP plan, House Minority Leader John Boehner (R-Ohio) said it's "pretty difficult" for Republicans to come up with a "solid plan," because the minority caucus is "not quite sure how the majority intends to proceed."

I'm not sure what that's even supposed to mean. Republicans started putting together their health care reform proposal in June. They've had plenty of time to meet behind closed doors and craft the superior plan that will prove the seriousness with which the GOP takes this issue. What's the holdup?

Boehner wants to know first how Democrats intend to proceed? Well, here's a tip for the Minority Leader: Democrats will probably hold a vote on the reform bill they've spent the last year putting together. The question is, how does he intend to proceed?

The answer is that they don't intend to proceed. Because they can't proceed.

A solution is necessary only if there's a problem to be solved, and conservative politicial philosophy kind of prohibits them from perceiving a problem. Thus the don't have a solution because they can't come up with one that: (a) actually solves the problem in question by guaranteeing everyone access to quality, affordable health care and (b) rigidly adheres to the tenets of the political philosophy.

But I knew I'd seen it answered better than this somewhere. Then I realized that Benen answered it himself, a couple of days earlier.

I suspect part of the problem is that Republicans have noticed that health care reform is ... what's the word ... tricky. Can GOP lawmakers come up with a proposal that covers the insured, offers consumer protections insurers don't like, doesn't raise taxes, lowers the deficit, and ensures exactly zero government intervention in the free market? It seems unlikely.

And yet, way back on June 17, Rep. Roy Blunt (R-MO), the point man on the alternative GOP plan, publicly proclaimed, "I guarantee you we will provide you with a bill."

It's a "guarantee" Republicans are struggling to follow through on.

To be sure, I don't necessarily blame Republicans for refusing to unveil an alternative health care plan. Producing a GOP reform proposal would not only give Democrats a target, it would offer people a chance to compare the two approaches. In a side-by-side match-up, it's hardly a stretch to think the Dems' plan would be better. Much better.

I even took a shot at it myself.

Whether or not it's a crisis that millions of Americans are uninsured or underinsured, that thousands lose their health insurance every day, or that tens of thousands die every year because they lack health insurance is a matter of perspective. The same goes for the economic crisis, the foreclosure crisis, or any other crisis.

Depending on your perspective, there's nothing wrong with hundreds of thousands, or even millions losing their homes to foreclosure. (Even if deregulating the finance sector made it easier to sell them time bombs, in the form of mortgages, that went off long after the people who really matter made an easy buck and moved on.) There's nothing wrong with millions of people having no health insurance, and thus no access to affordable, quality care. There's nothing wrong, because it's all right, and there's no need to do anything about it.

That's why I have to disagree with the following assertion, from Simon Johnson and James Kwak.

No one is against expanding health coverage on principle. As we come down to crunch time, the health-reform debate is all about money.

We can't assume that "no one is against expanding health coverage on principle," because it's flat wrong. Just like there were plenty of people who were against mortgage modification on principle, and just like there were plenty of people who were against the economic stimulus on principle, there are plenty of people who disagree with expanding healthcare coverage. And they disagree with the very principle that everyone should be covered.

...Drop dead. That's the overall message of conservatives who (a) see nothing wrong with the status quo in our health care system, because they (b) see nothing wrong with millions of people having no insurance and no access to care.

Seen from that perspective, it's clear that the people who confronted GOP lawmakers in townhalls were talking about their wants not their needs. As such, they got put in their "place," for whining about privileges they clearly haven't earned because they can't afford them — like the woman Tom Coburn schooled (to thunderous applause) for wanting help for her husband's medical problems.

They haven't presented a health care reform plan because they've already told us their plan.

The answer is the same as when McCain was asked by Republicans never tried to reform health care when they held both the White House and Congress: because reform is only necessary if something's wrong. And they didn't see anything wrong with the status quo in this case.

In truth the GOP really doesn't need to present a plan, because we already know what it is: failure — either for health care reform or the plan they'd present if they had one — is their only option.

Progressive Breakfast: The Net Domestic Product

Isaiah J. Poole — Fri, 30 Oct 2009 06:30:34 -0700

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day. Bill Scher is traveling; he will return Monday.

Thursday's news that the nation's gross domestic product grew at an annual rate of 3.5 percent in the third quarter comes with a lot of asterisks. A few of them:

*The Wall Street Journal reports that the White House recovery plan will claim responsibility today for creating or saving 650,000 jobs with a bit less than half of the $339 billion in recovery funds spent through September 30. "The White House sees the data as proof that its $787 billion American Reinvestment and Recovery Act of 2009 will meet its goal of creating or saving at least 1 million jobs," the WSJ writes.

*John Authers of the Financial Times critiques what helped drive the GDP increase:

Household disposable incomes actually fell during the quarter, by 3.4 per cent, but consumer spending rose, also by 3.4 per cent. This is not a pattern that can be sustained for long, and it is inconsistent with the need for US families to pay down their debts.

Consumption rose largely because of a huge increase in expenditure on durable items, led by motor cars. Government subsidies through the “cash for clunkers” programme, removed before the quarter had ended, largely explain this.

Meanwhile, tax credits for homebuyers, which helped revive activity in the housing market, are due to be withdrawn later this year. The question now is whether higher consumption can be sustained without government support.

... Thursday’s new data on initial claims for unemployment insurance confirmed that the rate of the rise in joblessness has slowed significantly – but the jobless rolls are still rising faster than at any time this decade, before the financial crisis took hold.

*At BusinessWeek, Michael Mandel sees in the numbers evidence "that companies are robbing the future to pay for short-term profits," and if we measured economic growth to take into account the impact of these business decisions, we'd find GDP growth to be significantly lower:

...[T]he official statistics are not designed to pick up cutbacks in "intangible investments" such as business spending on research and development, product design, and worker training. There's ample evidence to suggest that companies, to reduce costs and boost short-term profits, are slashing this kind of spending, which is essential for innovation. Without investment in intangibles, the U.S. can't compete in a knowledge-based global economy. Yet you won't see that plunge reflected in the GDP and productivity statistics, which are still too focused on more traditional sectors, such as motor vehicles and construction.

... Over the past year, U.S. employment of scientists and engineers—the people who create the next generation of products and make the U.S. more competitive over the long term—has fallen by 6.3%, according to a BusinessWeek tabulation of unpublished data. Yet overall employment has fallen only 4.1%. "There are really bright people who are struggling to find a job," says Josh Albert, managing director at Klein Hersh International, an executive search firm for life scientists.

*Bloomberg News reminds us that the future prognosis is for anemic growth:

The economy will likely grow at a 2.4 percent annual rate from October through December, the median forecast in a survey

earlier this month showed. GDP will also grow 2.4 percent next year and 2.8 percent in 2011, the survey showed, compared with an average of 3.4 percent growth over the past six decades.

*In Olathe, Kansas, a suburb of Kansas City, a side effect of the economic downturn is playing out that is happening around the country. From The Olathe News:

The Olathe Salvation Army Food Pantry continues to see an increase in people needing help during these difficult times. The need, however, has changed in recent months.

“We’re seeing people we normally don’t serve,” said Mindia McManness, volunteer coordinator for the Olathe Salvation Army. “They call us not knowing even how to get help because they’ve never needed it before. They don’t know where to begin.”

They’ve lost their jobs or are experiencing other difficulties because of the floundering financial markets.

“They’ve run out savings or maxed out credit cards, something that usually helped them through short-term difficulties in the past,” McManness said.

This recession has gone on much longer than expected, and the impending recovery will take even longer, leading to a new pool of people needing assistance.

Shelves once filled with canned corn, spaghetti noodles, chili, pork and beans or peanut butter and jelly are empty more frequently, and tight food supplies have become the rule, not the exception, all around the metro area.

Health Care: House Moves Ahead

House Democrats unveiled the long-awaited health care reform legislation Thursday that will be up for debate on the House floor, and the best that can be said about it, at least according to a headline this morning on Politico, is that "liberals don't bolt" from it:

...[T]he bill [House Speaker Nancy Pelosi unveiled Thursday includes big pieces of what the most liberal members of her party wanted — most likely setting up a serious battle when negotiators try to merge it with the far more moderate Senate legislation.

The public option stays, even if it’s not the same one the House speaker preferred. So, too, does the so-called millionaire’s tax to help offset the $894 billion price tag. Individuals will be required to own insurance. Most employers will be legally mandated to offer it.

And in return, the House speaker won assent — if not complete agreement — from the liberals in her caucus, as well as a surprising amount of support from Democratic moderates who have long railed against some of these provisions.

Liberals expressed frustration that the speaker bowed to political reality by allowing doctors and hospitals participating in the public option to negotiate payments directly with the Department of Health and Human Services, and some promised to request an amendment that would allow them to scrap the current plan for one tied to Medicare. But few pledged to vote against the bill.

Adele Stan at AlterNet says that at least the House bill is "almost (dare we say it?) progressive" when compared to what's pending in the Senate:

So, okay, it isn't the "robust" public option promised to AlterNet readers by Ways and Means Committee Chairman Charles Rangel, D-N.Y., this summer, but it doesn't include that silly opt-out plan. Unlike the lonely Harry Reid, who stood alone to face reporters on Monday, Pelosi was surrounded by members of her caucus, all smiles. Implicit in her timing was a message to the Senate: Keep noodling all you want, but here's a bill, a decent bill -- the bill we're gonna pit against yours in a conference committee if you ever get around to passing one. So, you might want to hop to it. And the more yours looks like ours, the easier it's gonna be for all of us.

As for the compromises in the House bill...

The deficit neutrality of the House bill presumably wins the support of the White House, while the less-than-robust public option seems to have passed muster with the big labor unions, who are surely influenced by another important distinction between the House and Senate bills: the House bill helps pay for itself through a new tax on the nation's most well-off citizens, while the yet-to-be-finalized Senate bill will likely pay for part of its cost by taxing high-priced, fully-loaded health-care plans -- like the plans many unions have negotiated in lieu of salary increases (and even as trade-offs for give-backs) by their members. Within hours of Pelosi's unveiling, both the AFL-CIO and the Service Employees International Union (SEIU) released statements praising the House bill.

Some ConservaDems are still refusing to get behind the House bill, reports McClatchy's David Lightman, claiming they need to hear from constituents:

"The plan on the table has some good points and some bad points. I want to look at it," said Rep. Lincoln Davis, D-Tenn.

Blue Dogs wanted to hear from constituents, many of whom are more conservative than those represented by most Democrats. "I have both sides of the health care debate well-represented in my district," said Rep. Allen Boyd, D-Fla.

... Blue Dogs and some party moderates have been concerned about the plan's cost, as well as its impact on small business and expansion of government. Those concerns remain.

But Pelosi thinks that there's already been so much debate on the merits and impact of all aspects of the legislation that she wants the nearly 2,000-page bill to face an up-or-down House vote without a lengthy amendment process. Ryan Grim at The Huffington Post:

House Speaker Nancy Pelosi said Thursday that there's been plenty of time for amendments already, so neither her caucus nor members of the minority party should expect a chance to amend the health care bill when it gets to the House floor.

"I've considered all of that input as our amendment process," Pelosi said on a conference call with bloggers, citing "probably 78 caucuses on this subject where we've listened to members [and] 2,000 town meeting on this subject."

A stinging rebuke of one feature of the House health-care bill comes from FireDogLake's Jane Hamsher, who says as a breast-cancer survivor she felt "tremendous disappointment" that the bill places higher hurdles the marketing of generic versions of biologic anti-cancer drugs:

Nancy Pelosi made a choice with regard to the lifesaving biologic drugs I took when I was in chemotherapy that will cost many of my fellow breast cancer survivors everything they own, and quite possibly their lives. ... Thanks to Representatives Anna Eshoo and Joe Barton, there will be no generic versions of these drugs. At least not for 12 years, if the House health care bill announced today passes. And because of an “evergreening” clause that grants drug companies a continued monopoly if they make slight changes to the drug (like creating a once-a-day dose where the original product was three times per day), they will never become generics. Instead of the Waxman-Deal amendment that granted much more reasonable terms to biologic patent holders, Speaker Pelosi chose the Eshoo-Barton amendment. And we could all be paying for that choice for the rest of our lives.

Hamsher is helping to organize with Public Option Please "treat, not trick" Halloween-themed protests at 3 p.m. at the Russell Senate Office Building, the Baltimore office of Maryland Sen. Barbara Mikulski and the offices of Rep. Sen. Kay Hagan and Rep. Anna Eshoo.

'Too Big To Fail' Reform Too Bad To Work?

The Obama administration's plan to change the rules for so-called too-big-to-fail financial institutions so that taxpayers will not be compelled again to prop them up when they engage in reckless gambles is receiving significant criticism on Capitol Hill. The Washington Post:

Under legislation unveiled this week by the committee chairman, Rep. Barney Frank (D-Mass.), in close coordination with the Obama administration, an oversight council of regulators would act as a monitor of systemic risk throughout the financial system and impose tougher regulatory standards on the largest companies. Compared to an earlier draft put forward by President Obama's team, the current bill expands the role of the council, entrusting it to identify risks to the system. The Fed would be the enforcer of the council's recommendations.

But that structure came under fire from Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., who argued the new council should be headed by an independent chairman rather than by the Treasury secretary, and that the council should have greater authority.

Bair also joined both Republican and Democratic lawmakers in questioning the government's plan to pay for the cost of winding down large, failing financial firms. The plan calls for companies with more than $10 billion in assets to be assessed fees only after a large collapse, rather than contributing ahead of time into an insurance-like fund. [Treasury Secretary Timothy F.] Geithner and Frank have said the intent is to shift the burden of such failures from taxpayers to the financial industry itself, but Bair argued for the insurance approach.

The Washington Independent also details the objections that Treasury Secretary Timothy Geithner faced when he testified before the House Financial Services Committee:

“Mr. Secretary, I’m not a man that fears this administration or you,” Rep. Paul Kanjorski (D-Penn.) told Geithner. “But I do fear the accumulation of power exercised by someone in the future that can be extraordinary.”

Rep. Brad Sherman (D-Calif.) echoed those concerns, arguing that the bill represents “the most unprecedented transfer of power to the executive branch to make decisions about both spending and taxes in history — all without congressional approval.”

... [S]ome lawmakers are attacking the proposed bailout tax on large institutions, arguing that it should be collected beforehand as a type of insurance fund, rather than imposed after a competitor went under.

“No more TARP. No more bailouts,” said Rep. Luis Gutierrez (D-Ill.). “Let them [the companies] create the fund, the systemic risk fund, that will guarantee that the American taxpayer will no longer have to be involved should they cause such a crisis ever again.”

“Historic Moment?” Pelosi Unveils House Version of Health Care Bill

Ashley LoBuglio — Thu, 29 Oct 2009 15:35:24 -0700

On Capitol Hill today after months of debate, the House unveiled its version of the health care bill. The bill merges terms from three separate bills written by three different House committees.

This bill differs from the Senate’s health care bill in two major ways. It would increase income tax on the affluent (defined as individuals earning more than $500,000 per year, $1 million for joint filers) by adding a 5.4% surtax. The House bill also includes a public health insurance option that would not allow states to opt-out, a much more effective proposal policy-wise than the Senate’s bill.

Not only would a public option be available through this bill, but Federal subsidies would be available to millions of lower-income individuals and families to help them afford a health insurance policy.
The bill would also mandate individuals to purchase health insurance.

A major and most notable aspect of the House bill is that it would increase Medicaid coverage to 150% of the poverty level or $33,000 for a family of four.

This legislation would expand health insurance coverage to 96 percent of Americans. Definitely a step in the right direction, but will it be enough in the fight for health care for ALL?

Instead of a “robust” public option that would be tied to Medicare rates, rates will be negotiated by doctors and hospitals.

With this version of a public health insurance option, the House bill would actually make health insurance less affordable for the government and consumers than if it were covered by Medicare rates.

Perhaps a compromise Pelosi made with blue-dog democrats?

This negotiating tactic is disconcerting since it will also lesson the public option’s ability to compete with private insurance companies, allowing these greedy powerhouses to have greater control over the U.S. health care system than if Medicare rates were used. A solid proposal Pelosi has apparently “sacrificed.”

Additionally, the House bill has dropped numerous provisions that would allow states to experiment with single-payer plans.

Despite these blatant weaknesses, compared to the former broken U.S. health care system our country is ON ITS WAY to making sweeping monumental changes.

A prominent hospital, the Federation of American Hospitals, recognized this and has espoused the bill calling it “an important milestone.”

Yes, “an important milestone” but we are just not 100% there yet!

It is significant that the House finally recognizes the essential importance of a public option.
However, certain aspects of the bill still need to be altered to ensure ALL Americans will be guaranteed access to quality, affordable health care.