Progressive Breakfast: Bush Serves Up Auto Rescue

Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.

Auto Rescue Finally Announced

NYT reports this AM: [1]

President Bush on Friday announced $13.4 billion in emergency loans to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February...

Mr. Bush also said that bankruptcy was not a workable alternative for the troubled automakers. 'Chapter 11 is unlikely to work for the American automakers at this time,' he said, noting that consumers would be unlikely to purchase cars from a bankrupt manufacturer.

The loan deal also requires the companies to quickly reduce their debt obligations by two-thirds, mostly through debt-for-equity swaps, and to reach an agreement with the United Auto Workers union to cut wages and benefits so they are competitive with those of employees of foreign-based automakers working in the United States.

...

The plan announced on Friday by Mr. Bush offered a compromise ... making the requirements non-binding, allowing the automakers to reach different arrangements with the union, provided that they explain how those alternative plans will keep them on a path toward financial viability. To gain access to the emergency loans, GM and Chrysler must also agree to a wide range of concessions, including limits on executive pay and the elimination of their private corporate jets.

...Mr. Bush essentially handed off to President-elect Obama what will become one of the first, most difficult calls of his presidency: a political and economic judgment about whether General Motors and Chrysler are financially viable.

While there as been much talk of "orderly bankruptcy" in the last 24 hours, Bloomberg reports: [2] "While the option of placing Chrysler and GM into a prearranged bankruptcy has been considered, the administration decided that such a move would put Ford at a competitive disadvantage, the person said."

Obama Cabinet Split on Trade?

Both NYT [3] and WSJ [4] portray upcoming cabinet picks Ron Kirk for USTR and Rep. Hilda Solis for Labor as creating a "split" on trade policy

But David Sirota [5] and yesterday's Progressive Breakfast [6] note Kirk's trade record is thin and mixed, so the jury remains out on how he'll approach the issue. Notions of "split" are premature.

Tapped's Harold Meyerson raves about Solis [7]: "In the House, Solis has continued to champion labor causes, immigrants' rights, women’s health and environmental protections. She also worked closely with Rahm Emanuel in recruiting Democratic House candidates from the Southwest and Latino-dominated districts, so she brings to her new job a strong relationship with Obama’s incoming chief-of-staff. Now, she’s in the key position to promote the Employee Free Choice Act, which seems likely to be the most contentious issue on Obama’s agenda. But Solis has never been deterred by controversy."

As does HuffPost's Van Jones: [8] "New Labor Secretary is Brown and Green."

New EFCA Attack: Free Speech!

Hoover Institution's Richard Epstein makes the latest ridiculous conservative attack [9] on the Employee Free Choice Act in the WSJ, arguing that employers' free-speech rights would be violated if employee have the choice to unionize via card-check or ballot instead of employers' having that choice.

Epstein concedes in the oped that the Supreme Court does not share his unique interpretation of free speech under current labor law.

Will Paulson Get Another $350B?

Miami Herald editorializes: [10]

As the chairwoman of a congressional oversight panel on the $700 billion bailout plan, [Elizabeth Warren is] the top watchdog named by lawmakers for the rescue package approved in October. The package gave the executive branch a lot of leeway in how to use the money to get the economy back on track, but the administration was also obliged to accept oversight to keep lawmakers informed. The complaint by Ms. Warren that she's being stiff-armed by the Treasury Department adds to worries about what progress -- if any -- is actually being realized.

...

There is no reason for the secrecy. Mr. Paulson and his colleagues at Treasury have an obligation to be more forthcoming about their plan -- unless they're just making it up as they go along. In one of the few wise decisions Congress has made in this process, it withheld the second $350 billion installment of the plan until lawmakers get a satisfactory progress report.

If Mr. Paulson doesn't cooperate with the congressional overseer, he shouldn't get the rest of the money. Congress should not micromanage the plan, but lawmakers should insist on more openness, and they should also insist that banks on the receiving end start using the money to improve the mortgage market.

Warren appeared on MSNBC's Rachel Maddow show yesterday insisting that a plan for the next $350B be made public before any approval.

Visit msnbc.com for Breaking News [11], World News [12], and News about the Economy [13]

D-Day [14], points to LA Times report on congressional oversight [15] and adds: "So how's that financial bailout going? Depends on who you ask. Richy McRicherton, CEO of Globo-Capital, thinks it's the straight awsom!!1! Regular folks across the country, not so much ... Meanwhile, that homeowner relief program the White House put into place? Designed to help 400,000 homeowners, so far it's received 312 applications, because it's way too expensive and requires too many forms that lenders and borrowers want nothing to do with it ... This is theft."

$850B and Holding

WSJ reports Obama's economic team is eyeing $850B [16] for its economic recovery plan, and trying to avoid hitting $1T:

President-elect Barack Obama's economic team is crafting a stimulus package to send to Congress worth between $675 billion and $775 billion over two years, according to officials familiar with the package, and it expects a final price tag to be even larger.

The transition team has conveyed the figures to Capitol Hill, where the package is likely to grow as it works its way through the House and Senate. An Obama adviser familiar with the planning said the package could top out around $850 billion. Democratic leadership aides said it could easily exceed that before the package gets back to Mr. Obama's desk in final form.

"The biggest fear is that people will do too little," said one Democratic leadership aide, "like a start-up that fails because it didn't do enough."

Obama aides hope to keep the package below the trillion-dollar mark, a psychological threshold that could carry political consequences, as they fear being accused of adding too much to the country's long-term budget deficit.

Politico reports Sen. Majority Leader Harry Reid is on board [17] with $850B. Earlier, Speaker Pelosi spoke of a House plan between $500-$600B. [18]

NYT has the latest on what will make up the package: [19]

About a fifth of the Obama package could go toward health care, Democrats say. The biggest piece would be up to $100 billion to subsidize the states’ growing Medicaid caseloads of the poor. Mr. Obama also will call for a down payment on the $50 billion he proposed during his campaign to help medical providers buy information technology and save costs on health records.

Mr. Obama is considering roughly $200 billion in tax relief for low-wage and middle-class workers, including a payroll tax holiday to fatten paychecks and encourage Americans to spend more and spur economic activity, according to several people with knowledge of the options he is weighing.

The Obama plan has five main parts, according to Democrats in Congress and the Obama transition office. Besides the health care financing, it would propose billions of dollars for energy-saving programs, public works projects, school construction and renovation, and expanded jobless aid and food stamps for “the most vulnerable,” as well as tax cuts.

The Campaign for Jobs and Economic Recovery [20] formally kicked off yesterday, with "More than 20 leading progressive organizations and unions with millions of members have signed onto run a major campaign to pass a significant jobs and economic recovery package to create millions of jobs and help the economy grow in the near and long term."

A big grassroots push may be needed. Obama aides worry to NYT about conservative obstruction: [19] "President-elect Barack Obama’s advisers hope to finish an economic recovery blueprint by Dec. 25 so that Democratic Congressional staff members can draft legislation by the new year ... Some Obama advisers have sought to tamp down expectations that Mr. Obama could sign a package immediately after he is inaugurated. The opposition of some Senate Republicans and House and Senate negotiations on a final compromise could force delays into February."

CNN kicks off right-wing attack on infrastrucuture [21] making knee-jerk assessments from the conservative NTU on one-half of one percent [21] of the infrastructure requests from the US Conference of Mayors to declare it "full of pork." Nirmalm.com adds: [22] "What's most striking to me is CNN's lack of perspective. They propagate a 'drown government in a bathtub' group's argument against a stimulus program unchallenged, and express incredulity at its proponents without putting their cherry-picked objections into context. However, the three trillion dollar cost of the Iraq war dwarfs any proposed investment program, yet it's hardly put up to the same scrutiny."

Boston Globe [23] looks at brewing tension between road and mass transit in the economic recovery plan. House Transportation Chair Jim Oberstar, a green transportation advocate [24] gives reassuring compromise quotes: [23] "Our priority is to create jobs and to get people working in the shortest possible time ... To do that, we have to rely on projects that are ready to go to bid under existing formulas ... We're going to rewrite the whole book on this thing, but that has to wait."

As right-wingers whine about public investment, hunger in America spikes. USA Today: "...36% of low-income households say they ate less or skipped meals because they didn't have enough money for food [25], and 40% say they chose between food or paying for utilities in the past year. 'We've never seen anything like this,' says Vicki Escarra, [Feeding America] president. 'We're seeing more people come (to food banks) who've never come before.'"

Breakfast Sides

USA Today [26] looks at why health care reform may or may not happen quickly.

Juan Cole: [27] " Top 10 Reasons Obama Should Resist Military Plans for American Bases in Iraq"