Progressive Breakfast

Bill Scher — Fri, 10 Feb 2012 09:52:20 -0500

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

MORNING MESSAGE: Romney, Lead Your Party. Fight For Payroll Tax Cut.

OurFuture.org's Robert Borosage: "Instead of simply renewing the vital payroll tax cut – and extending unemployment insurance – they are piling on irrelevant demands, arguing with each other, and forcing yet another unnecessary crisis. Extending the payroll tax cut for the full year will give the average American an additional $1,000, a $40 boost in each paycheck. This will help sustain the demand vital to creating jobs. Republican antics make no sense. The sabotage must stop. The question for Mitt Romney is: You claim to lead this party, are you willing to stand up for common sense?"

GOP Threatening Tax Cut Extension

House GOP threatens termination of payroll tax cut by insisting on jobless aid cuts. NYT: "...Republicans are seeking numerous policy changes connected to unemployment benefits — like a mandatory high school equivalency program and possible drug testing for beneficiaries — that Democrats have rejected out of hand. They would also reduce the benefits to 59 weeks, far less than the 79 weeks sought by President Obama ... Democrats presented a one-page counterproposal to the House offer on unemployment insurance benefits that would cap the length of time that unemployment benefits are paid out at 93 weeks for the remainder of the year. Republicans all but laughed."

Conservatives overlook the obvious reason why working-class families are struggling, argues NYT's Paul Krugman: "Suddenly, conservatives are telling us that it’s not really about money; it’s about morals. Never mind wage stagnation and all that, the real problem is the collapse of working-class family values, which is somehow the fault of liberals ... it is, frankly, amazing how quickly and blithely conservatives dismiss the seemingly obvious answer: A drastic reduction in the work opportunities available to less-educated men."

Inequality extending to education. NYT: "...researchers are finding that while the achievement gap between white and black students has narrowed significantly over the past few decades, the gap between rich and poor students has grown substantially during the same period ... the imbalance between rich and poor children in college completion — the single most important predictor of success in the work force — has grown by about 50 percent since the late 1980s ... lower-income families, which are now more likely than ever to be headed by a single parent, are increasingly stretched for time and resources."

Mixed Reaction To Foreclosure Fraud Settlement

Settlement will have "limited" impact on the housing market, says McClatchy: "'Realistically, this is a settlement that at the end of the day will make nobody really happy,' said Rick Sharga, a foreclosure expert and executive vice president at Carrington Mortgage Holdings in San Diego. ... 'People watching the housing market won't think it is a cure-all to what ails the market. And from the financial side of things, banks will quickly realize this doesn't remove liability on a host of other issues.' In fact, Obama stressed that the settlement dealt only with problems in the servicing of mortgages and that his administration continues to investigated alleged fraud in the origination of mortgages and in the packaging of them into the complex instruments known as mortgage-backed securities."

But banks have not escaped all legal trouble either. LAT: "The settlement releases the banks from claims involving foreclosures, mortgage customer servicing and loan originations. However, authorities can still investigate various fraud claims, including those involving the mortgage bonds whose meltdown triggered a global financial crisis. What's more, there is no criminal immunity or release from private claims by individuals or class-action lawsuits."

"Foreclosure Fraud Settlement Costs Big Banks Half Of Last Year’s Profits" notes ThinkProgress.

Reuters' Felix Salmon is upbeat: "Other big-money lawsuits over securitization can and almost certainly will still be brought — which means that the big banks all still have significant litigation risk hanging over their heads ... [But] what’s happening here is that the mortgage settlement is at heart largely just encouraging banks to bring their balance sheets closer to reality ... [And] insofar as principal reductions can increase the value of a mortgage, this deal is actually making banks money ... really is a win for all sides."

"Mortgage Settlement Fight Not Over, Say Organizers" reports Truthout: "...Gordon Whitman, policy director at the Pacific Institute for Community Organizing (PICO) National Network and organizer with The Bottom Line, it will only help a handful of homeowners ... 'The way forward is much more pressure and investigation and pressure on the big banks,' he continued, which 'opens the pathway to get upwards of $300 billion in debt relief for American taxpayers. Wall Street wants to make this problem go away, but it won't go away.'"

Fannie and Freddie resisting the "principal reduction" accepted by banks in the settlement. ProPublica: "The two companies aren't directly part of the settlement ... But Fannie and Freddie do guarantee or own roughly half of the mortgages in the U.S. ... Principal reduction is being pushed heavily by the Obama administration as a way to lower the rate of foreclosures. The administration recently tried to encourage Fannie and Freddie by offering to triple incentives for principal reduction. So far, the companies and their federal overseer, DeMarco, have declined to do so."

Pressure on Freddie Mac and FHFA regarding past bets against homeowners. ProPublica: "'I don't understand why you make a bet that you can largely control the outcome of, and want your bet to lose,' [Sen. Robert] Menendez said ... 10 senators sent a letter to Edward DeMarco, the head of the Federal Housing Finance Agency, the regulator that oversees Freddie Mac, calling the report 'deeply troubling.' ... the inspector general for the FHFA confirmed Wednesday that it is looking into Freddie Mac's investments."

WH Reportedly Will Adjust Contraception Rule

ABC reports that WH plans contraception compromise: "The move, based on state models, will almost certainly not satisfy bishops and other religious leaders since it will preserve the goal of women employees having their birth control fully covered by health insurance ... Sources say it will involve health insurance companies helping to provide the coverage, since it’s actually cheaper for these companies to offer the coverage than to not do so, because of unwanted pregnancies and resulting complications."

Sen. Maj. Leader Reid blocks GOP anti-contraception amendment to transportation bill. Politico: "...Reid blocked the move, telling Republicans to 'calm down' until a final rule comes out. 'This is a rule that hasn’t even been made final yet. There’s no final rule ... Let’s wait until there is at least a rule that we can talk about.'"

House, Senate Diverge On Transportation Bill

Six House GOPers break ranks on tying Arctic oil drilling to transportation bill. NYT: "Six House Republicans on Thursday sent a letter to their leadership opposing the opening of Alaska’s Arctic National Wildlife Refuge to oil drilling to help pay for a pending transportation bill ... With tough re-election campaigns coming, House Republicans of all stripes may be looking for ways big and small to assert their independence from an unpopular Republican leadership."

Bipartisan transportation jobs bill in the Senate nears passage. Reuters: "A bipartisan proposal for the federal government to spend $109 billion over two years to upgrade roads, bridges and transit systems and create jobs easily cleared a crucial hurdle on Thursday when the Senate voted 85 to 11 to allow it to proceed to debate."

Breakfast Sides

WH to release review of clean energy loan guarantee program today. The Hill: "The much-anticipated review comes as House Republicans are pummeling the administration for greenlighting a $535 million loan guarantee in 2009 to the solar firm Solyndra ... Herb Allison, a former Treasury Department official who oversaw the Troubled Asset Relief Program (TARP), conducted the review and delivered his report to the White House late last month."

Republican chair of House Financial Services Cmte investigated for insider trading. W. Post: "The Office of Congressional Ethics ... investigators have notified Bachus that he is under investigation and that they have found probable cause to believe insider-trading violations have occurred ... OCE investigators are examining whether Bachus violated Securities and Exchange Commission laws that prohibit individuals from trading stocks and options based on 'material, non-public' inside information..."

Progressive Breakfast

Bill Scher — Thu, 09 Feb 2012 09:04:30 -0500

MORNING MESSAGE: At CPAC, Inequality Dare Not Speak Its Name

OurFuture.org's Terrance Heath: "At today's Conservative Political Action Conference (CPAC) I'm likely to hear an old favorite conservative talking point repeated over and over again: Marriage cures poverty, economic inequality, and just about any other economic complaint you can name — especially for black folks ... What I won't hear at CPAC, besides any specific plans for job creation, is how declining marriage rates are not to blame for economic decline, but economic decline is really to blame for declining marriage rates. I won't hear that the best way to increase marriage rates is improve Americans' economic prospects by growing the economy and putting people back to work. I probably also won't hear that marriage would actually improve the economic standings of one group of Americans: gay couples."

Cranky Conservatives Convene At CPAC

Conservatives are "worried" as they gather for 3-day CPAC conference. W. Times: "...Conservatives gathering for the conference are becoming more explicit than ever before about their disappointment with the movement’s progress in the years since Ronald Reagan ... Year after year at these meetings, CPAC attendees have grumbled about the failure of some of the elected Republican officials who profess conservative ideals to adhere to them once in power ..."

Romney expected to pander hard at CPAC tomorrow. Politico: "His speech, sources with ties to the Romney campaign said, will likely be a broad stroke that touches on the economy and fiscal discipline, but could feature nods to the social conservative planks of the GOP platform. It will not, sources said, be his standard stump speech."

White nationalist to be featured speaker at CPAC. MSNBC's Steve Benen: "Right Wing Watch [reports]: 'CPAC is hosting the panel "The Failure of Multiculturalism: How the pursuit of diversity is weakening the American Identity" with Peter Brimelow, the founder and head of VDARE.com. VDARE is a White Nationalist website, run by Brimelow, which frequently publishes the works of anti-Semitic and racist writers...' ... Perhaps someone could ask Romney, Santorum, Gingrich, and the entire congressional Republican leadership how comfortable they are with attending a conference with white nationalists and radical conspiracy theorists."

Foreclosure Fraud Settlement Expected Today

$26B foreclosure state settlement may be inked today, as state AGs reportedly end holdout. NYT: "Despite the billions earmarked in the accord, the aid will help a relatively small portion of the millions of borrowers who are delinquent and facing foreclosure ... Still, the agreement is the broadest effort yet to help borrowers owing more than their houses are worth, with roughly one million expected to have their mortgage debt reduced by lenders or able to refinance their homes at lower rates ... A recent estimate from the settlement negotiations put the average aid for homeowners at $20,000. 'I just don’t think it’s going to be a life-changing event for borrowers,' said Gus Altuzarra, whose company, the Vertical Capital Markets Group, buys loans from banks at a discount ... Mark Zandi, the chief economist for Moodys Analytics, said that while the settlement looked small compared with the scope of the problem, it was not necessary to erase all, or even most, of the nation’s negative equity to turn the market around ... a lawsuit [NY AG Eric] Schneiderman filed Friday ... will [still] go forward."

Negotiations finalized after midnight. WSJ: "The Obama administration made a full-court press over the past four days to secure the support of key state attorneys general, including those from Florida, California and New York. All three states are expected to be part of the announcement..."

Some will get more help than others. HuffPost: "The deal would be the largest payout to date from banks in the wake of the financial crisis ... Those who already lost their home, however, would receive just the smallest fraction of the money: a one-time cash payment of about $1,800 as compensation ... Potentially more significant, the banks would agree to forgive some mortgage debt owed by struggling borrowers through what's called 'principal reduction.' ... 'This settlement could be a starting point for principal reduction,' said Ira Rheingold, president of the National Association of Consumer Advocates. '... If it is done well, maybe it will shame Fannie and Freddie into doing what it should have been doing all along.'"

Feds plan to sue banks for mortgage bond fraud. WSJ: "The move would mark a stepped-up regulatory effort to hold Wall Street accountable for its sale of bonds linked to subprime mortgages in 2007 and 2008. At issue is whether the banks misrepresented the poor quality of loan pools they bundled and sold to investors..."

House GOP introduces legislation to disempower CFPB. W. Post: "The House GOP is now moving forward with bills that would remove the CFPB director from overseeing the Federal Deposit Insurance Company and allow Congress to directly control its funding every year ... Under Dodd-Frank, which created the bureau, the CFPB is funded by the Federal Reserve, which isn’t subject to congressional appropriations. There’s also a bill to ensure that information collected by the bureau is subject to attorney-client privilege."

GOP Moves Anti-Transit Transportation Bill

Dems slam GOP transportation bill for targeting transit users and federal workers for cuts. Politico: "The transportation bill primed for floor action would make federal employees — including members of Congress — pay a larger share of their pensions. The bill ... also ends dedicated transit funding from the Highway Trust Fund, meaning transit projects would need to compete with other general fund priorities while road projects would take the entire share of gas tax revenues ... Virginia Rep. Jim Moran said there was 'no question' Republicans had political motives in targeting two major Democratic demographics: federal employees and transit riders. 'They said these are not Republican demographics, so stick it to them,' Moran said. 'The more bashing of federal employees, the more likely you are to get Republican votes.'"

CBO says GOP transportation bill will starve transit. ThinkProgress: "...Republicans have imperiled the process by proposing to stop using revenue from the fuel tax to pay for mass transit ... [Instead,] the GOP wants to make a one-time $40 billion allotment for mass transit. Speaker John Boehner (R-OH) has proposed expanded oil drilling in areas currently off limits to the practice, including areas in the Gulf of Mexico, off the coast of Virginia, and part of the Arctic National Wildlife Refuge, in order to raise the $40 billion. But today, the Congressional Budget Office found that Boehner’s proposal would raise just 5 percent of the funds needed..."

War On Contraception Targets Workers

NYT's Gail Collins notes that contraception rule does not apply to churches: "Catholic dogma holds that artificial contraception is against the law of God ... The problem here is that they’re trying to get the government to do their work for them ... The churches themselves don’t have to provide contraceptive coverage. Neither do organizations that are closely tied to a religion’s doctrinal mission. We are talking about places like hospitals and universities that rely heavily on government money and hire people from outside the faith."

TNR's Jonathan Cohn sympathizes with Catholic leaders, but sympathizes with employees more: "Freedom of religion means the freedom to observe the tenets of one's faith ... To dismiss that concern out of hand would be wrong ... The checks to your insurance plan may have the name of a religious institution on them. But, as a matter of economics and of principle, the money is (or should be) yours ... the debate is also about a low-income worker at a large institution that happens to be religious—say, a janitor or clerk at Catholic hospital or university—who is trying to support a family on less than $30,000 of household income. If this person wants contraception through an implant or pills, which are the most reliable methods of birth control, the cost may be prohibitive—easily into the hundreds of dollars a year and even into four figures."

Conservatives pushing for more than just a bigger exemption. TNR's Alex MacGillis: "[USA Today reported that] 'Anthony Picarello, general counsel for the U.S. Conference of Catholic Bishops ... cited the problem that would create for "good Catholic business people who can't in good conscience cooperate with this." "If I quit this job and opened a Taco Bell, I'd be covered by the mandate," Picarello said.' ... as the Church sees it, [this is] also about protecting the right of all employers -- including, apparently, fast food franchises -- to deny contraception coverage to their employees."

Breakfast Sides

Conservatives jump on CBO report to push for lower compensation for federal workers. W. Post's Joe Davidson: "But the CBO findings certainly are not universally accepted ... During the House session, Rep. Elijah E. Cummings (D-Md.) said that 'the much better report is the Bureau of Labor Statistics report. They have more experience at this, and they show that federal employees were paid 26 percent less than private-sector employees.' ..."

President's economic advisers project improving economy, if stimulus measures are extended. NYT: "...advisers to President Obama have updated their forecasts in recent days and now project that the economy will create two million jobs this year if stimulus measures are extended, which could reduce the unemployment rate to about 8 percent by year’s end ... Private sector forecasters have said that ending the two percentage point reduction in payroll taxes and the emergency jobless aid could subtract about 1 percent from economic growth."

Progressive Breakfast

Bill Scher — Wed, 08 Feb 2012 09:48:27 -0500

MORNING MESSAGE: CSI Missouri: Foreclosure Fraud Indictments

OurFuture.org's Richard Eskow: "A Missouri grand jury handed down multiple felony indictments for foreclosure fraud on Monday. That's the same kind of crime being negotiated in nationwide settlement talks with America's big banks. If people can be indicted for doing it, why should bankers be allowed to write a check and walk away?"

Settlement Status Murky

Uncertainty around mortgage settlement. Reuters: "A broad settlement with major banks over mortgage servicing abuses that would bring relief to distressed U.S. homeowners could be announced as early Thursday ... so far [it] lacks the support of a handful of critical states, including California and New York ... New York Attorney General Eric Schneiderman had planned an announcement late Tuesday about the settlement but postponed it 'indefinitely' without explanation ..."

WH still pushing for a settlement. FT: "Aides to President Barack Obama have in recent weeks courted civil rights groups and borrower advocacy organisations, scheduling meetings and calls in an attempt to gain support for the expected settlement and muffle criticism from key political allies."

Foreclosure fraud has cost $72B reports Bloomberg: "The mounting costs are pushing lenders and regulators to resolve investigations and lawsuits over faulty home lending ... The wrangling over the status of old loans has made some banks more reluctant to make new ones, even as Federal Reserve Chairman Ben S. Bernanke appeals for action to increase lending and fix the U.S. housing market because it’s a drag on the economic recovery."

Santorum Punctures Romney Inevitability

Romney hasn't won in the Midwest, notes Time's Alex Altman: "In a single evening, he punctured the aura of inevitability that had gathered around Romney’s campaign in the wake of his victories in Florida and Nevada. Though Santorum still lags far behind Romney in projected delegates, he now leads the front runner in contests won, four to three ... Santorum can now boast of three straight victories in the Midwest, a key region dotted with swing states where Romney has yet to notch an outright victory."

W. Post explores Romney's jobs record as governor, finds it "unremarkable": "Many state policymakers and economists say Romney struggled to apply his business expertise to Massachusetts’s problems during his tenure."

Romney Super PAC quietly reveals secret donor as former Bain exec, reports NYT.

GOP Refusing Simple Deal On Payroll Tax Cut

Payroll tax cut talks stall. NYT: "Democratic negotiators rejected $70 billion worth of spending cuts the House wanted to use to offset the cost of the package, including a one-year pay freeze for federal workers, a measure to raise Medicare premiums on some people and a proposal that would allow the government to claw back some subsidies for the purchase of health insurance under the new health care law ... The Senate majority leader, Harry Reid of Nevada, instead vowed to put forward his own bill ... His new proposal would require those earning over $1 million a year to contribute to the nearly $200 billion cost of extending a payroll tax cut to nearly every working American [and] renewing unemployment benefits into the next year ... "

Economists push GOP to end obstruction of payroll tax cut. ThinkProgress: "Both Federal Reserve Chairman Ben Bernanke and Moody’s Analytics chief economist Mark Zandi testified before Congress today, telling lawmakers that they should extend the payroll tax cut that is set to expire at the end of the year so as not to undermine the fragile economic recovery."

Tax lawyer David Miller exposes loophole benefiting wealthy who hold much stock, in NYT oped: "... how much income tax will [Facebook's Mark] Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax ... If Mr. Zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs ... Our tax system is based on the concept of 'realization.' Individuals are not taxed until they actually sell property and realize their gains. But this system makes less sense for the publicly traded stocks of the superwealthy."

Capital gains tax breaks don't help the middle class. EPI's Andrew Fieldhouse: " In 2011, the top 1 percent of households by cash income received a whopping 75.1 percent of the benefit from the preferential treatment of capital gains and dividends. The broad middle class—defined here as the middle 60 percent of households by cash income—received only 3.9 percent of that benefit. Upper-income households also do well by tax exclusions and itemized deductions, but the share of these tax expenditures accruing to the top 1 percent of households—at 15.9 percent and 26.4 percent, respectively—don’t come close to the windfall afforded by a 15 percent rate on capital income."

Fed To Keep Rates Low

Bernanke to keep rates low. Bloomberg: "Bernanke told the Senate Budget Committee in Washington yesterday that the decline in the jobless rate to 8.3 percent in January veils weaknesses in the U.S. labor market ... The comments suggest Bernanke won’t alter his 2014 rate pledge until he sees faster economic growth, strong employment gains over many months or a risk that what he calls 'subdued' inflation may speed up..."

Fed policies not causing inflation, despite conservative claims. Bloomberg: "More than a year after Republicans from House Speaker John Boehner of Ohio to presidential candidate Ron Paul of Texas warned that the Fed’s second round of asset purchases risked a sharp acceleration in prices, the surge has failed to materialize. The personal-consumption-expenditures price index rose 2.4 percent for the 12 months ending in December, near the central bank’s 2 percent target."

Outsourcing Firm Scandal In Mexico

Mexican outsourcing firm investigated for tax evasion. NYT: "The investigation, which has led to international warrants against the director of the firm and one of the Álvarez Puga brothers, has lifted a veil on the widespread tax evasion in the growing and increasingly powerful outsourcing industry here ... Typically, domestic and multinational companies hire a third party like the Álvarez Puga firm to arrange the payment of payroll, tax and other fiscal liability for workers ... Government auditors said they had identified at least 6,500 outsourcing firms that had failed to pay the taxes of the workers they handled. Beyond that, Alberto Real Benítez, the general administrator of federal fiscal audits in Mexico, said that most companies hiring such firms were aware that taxes were not being paid properly."

Manufacturers questioning the value of outsourcing, reports LAT's Michael Hiltzik: "[Pioneer Magnetics' Jerry] Rosenstein says economic realities have forced him to outsource most of Pioneer's manufacturing. But he describes the process as something of a mixed curse — it saves money overall, but at the expense of manufacturing efficiency and management time ... 'If they have a technical problem, they may not know how to solve it.' And overseas contractors often demand a higher volume of orders than a specialty manufacturer with its eye on quality can provide ... [He argues that] an advanced technical research program for manufacturers ... would be a useful component of a government economic stimulus plan. It would support longer-range technical development of the sort that gets cut back in economic slumps, help manufacturers increase their technical staff, upgrade America's worldwide competitiveness and feed into the hiring of production and support staff later on."

Breakfast Sides

Speaker Boehner risks splitting his party of transportation bill. Politico: "A loss on this bill, his baby, could make Boehner look weak again ... Under the House plan, transit programs would no longer be paid for out of the Highway Trust Fund. Instead, Republican leaders plan to cut government contributions to federal employees’ pensions to pay for transit programs ... That’s a political problem for Republicans from the suburbs of Chicago, New York and Philadelphia ... The bill would [also] slash Amtrak funding and privatize food service on its trains ... [But] Boehner still has to avoid a disaster with his 'no' caucus — folks who are averse to almost everything."

House cmte advances plan to cut pensions of federal employees. Roll Call: "Along party lines, the panel voted 22-16 ...The [Republican] aim is to bring government workers more in line with those in the private sector and push the federal workforce to help reduce the deficit ... Democrats said they had no problem slashing their own pensions. However, they would not do the same to their staffs or employees of government agencies."

Dems respond to GOP Keystone bill with amendment requiring pipeline oil and steel stay in US. Politico: "This has been the argument of the United Steelworkers — who oppose the proposed pipeline over the concern that a lot of their workers would fall victim to outsourcing. The existing Keystone pipeline, for example, uses steel from India ... Republicans say these Democratic provisions are merely poison pills."

OH Gov. Kasich moderating his rhetoric, not his policies, after rebuke from voters over anti-union law, notes American Prospect's Abby Rapoport.

Progressive Breakfast

Bill Scher — Tue, 07 Feb 2012 09:41:21 -0500

MORNING MESSAGE: The GOP's Mutually Assured Destruction

OurFuture.org's Terrance Heath: "...Republicans freaked out when Newt launched his attack on Mitt Romney's days at Bain Capital was because he pretty much pointed a double barrel spotlight on two things Republicans dread discussing: economic inequality and the GOP's lack any plan or political will to do anything about it. That's classic Newt. On the one hand, he wants everyone to stop talking about economic inequality. Then just when the GOP's traveling side-show of a primary race rolls into some of the most economically devastated parts of the country, inadvertently rubs everyone's nose in it, while also making it clear that they don't plan to do anything about it, and don't particularly want to. Newt exposes that not only do Republicans have no solutions for our economic and unemployment crises, but the don't see that anything needs solving."

Romney Sputters Into Next Round On Contests

Santorum may do well in today's GOP contests. Time: "...a series of Public Policy Polling surveys found Santorum with a slight edge over Romney in Minnesota, 29% to 27%, and in second place in Colorado, where he trails Romney, 40% to 26%. A week-old survey also placed him atop Missouri’s bragging-rights derby."

"Private-Equity Lobbying Protected Romney’s Tax Benefit of Carried Interest" reports Bloomberg: "The largest U.S. private-equity funds and venture capital firms have relied on a five-year, multimillion-dollar lobbying campaign to protect the carried interest tax break that helped drive presidential candidate Mitt Romney’s 2010 effective tax rate below 14 percent."

Romney hypocritical on clean energy subsidies. Politico: "While Mitt Romney was governor, Massachusetts also picked some winners and losers with energy subsidies. And like Obama, some of the companies Romney's state invested in came out on the losing end."

Payroll Tax Cut Talks Stall

Speaker lowers expectations for payroll tax cut deal by attacking Senate. Roll Call: "In an interview on PBS’ 'NewsHour,' the Ohio Republican said, 'It’s pretty clear that our Senate colleagues want no part of cutting spending.' ... his comments were the clearest sign to date that talks on the conference committee were breaking down."

Politico details the disagreements: "Democrats want to tack on a surtax for millionaire earners, which would pay for the temporary 2 percent payroll tax cut, and they don’t want unemployment insurance offset by spending cuts elsewhere in the budget. Republicans are opposed to higher taxes and instead want the package paid for by freezing pay for federal workers, imposing higher premiums for upper-income Medicare beneficiaries and banning millionaires from receiving jobless benefits and food stamps, among other options. Complicating matters, the timeline is actually much shorter, with both chambers scheduled to be out of session during the week of Feb. 20 for the Presidents Day recess."

Medicare payments to doctors also a sticking point. NYT: "In the absence of agreement, doctors’ fees will be cut 27 percent next month, and many doctors say they could not continue treating Medicare patients under the lower payments ... To help offset the cost of paying doctors, House Republicans want to reduce certain Medicare payments to hospitals. By contrast, Democrats and at least one powerful Republican senator, Jon Kyl of Arizona, want to cover the cost with money saved by winding down the wars in Iraq and Afghanistan."

Key States Still Won't Settle

Several states still hold out on foreclosure fraud settlement. Bloomberg: "California and New York’s attorneys general haven’t signed on to a proposed settlement with five banks over foreclosure practices that has won the support of more than 40 states ... More than 40 states signed on to the accord ... [IA AG Tom] Miller said federal and state officials continue to discuss matters with the banks involved in the talks ... Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement ... The push by the three banks raised a new obstacle in getting Schneiderman’s support for the deal ... Nevada and Delaware [also] said late yesterday they hadn’t signed on to the settlement."

Mortgage company indicted for robo-signing. NYT: "One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury..."

Obama mortgage reform may help 500,000 homeowners. W. Post: "A new JP Morgan report estimates that the changes will lead 1.9 million more potential borrowers to qualify for mortgage modifications, along with 500,000 investors who rent properties ... Altogether, JP Morgan expects the HAMP expansion 'to result in 500,000 mortgage modifications that otherwise would not have taken place.' ... If the changes to HAMP end up succeeding, it could help the Obama administration build the case for the mass refinancing plan they’re pushing to Congress."

"Right To Work" Not Working

New study shows "right-to-work" doesn't create jobs. American Prospect's Abby Rapoport: "Because of free-trade agreements, companies can go to other countries and get their goods made for a fraction of the cost. Even in the most anti-union state in the country, there are still basic worker protections and a minimum-wage law to deal with. Such 'roadblocks' to corporate profit can disappear if the business relocates overseas. 'The wage difference that right to work makes ... is meaningless compared to the wage savings you can have leaving the country,' [economist Gordon] Lafer says."

Bloomberg's Ron Klain says OK proves "right to work" doesn't work: "The last state before Indiana to adopt a similar measure was Oklahoma, 10 years ago. At the time it passed, advocates promised that it would result in a surge of manufacturing jobs coming to the state. But in the decade that has followed, industrial exits from Oklahoma have increased 30 percent, manufacturing employment in the state is down by a third, and the unemployment rate is higher today than it was on the day the law was passed."

Breakfast Sides

NYT's David Firestone slams Karl Rove for being "offended" by Clint Eastwood Chrysler ad: "The White House said it had nothing to do with the ad, but it had a great deal to do with Detroit’s resurgence, and that’s what’s really offensive to Mr. Rove and other Republicans ... These are inconvenient facts for both Mr. Rove and for Mitt Romney, who is on the record as opposing the automaker bailouts. The outcry being raised against the commercial is not really from people who are offended, but from those who are embarrassed."

FAA bill clears Senate despite provision constricting union organizing. TPM: "The final vote was 75-20, with — not nearly enough Democratic opposition to prevent a supermajority from passing ... and labor officials are steamed."

Greece announces new austerity measures. NYT: "Despite new evidence of a deteriorating economy, Greece said on Monday that it would cut 15,000 state jobs this year ... Athens is racing to push through economic changes that it hopes will persuade its private sector creditors to grant easier debt repayment terms and will prompt Europe to release 130 billion euros, or $171 billion, in the next round of bailout money it needs to avoid defaulting on bond payments due in March ... The country’s two main labor unions, anticipating a new barrage of austerity measures, including wage cuts in the private sector, called a 24-hour general strike for Tuesday..."

House GOP may push Medicare privatization again. TPM: "[House Budget Chair Paul] Ryan’s signaling he’ll swap out his old Medicare plan with a new one — one that he actually co-wrote with a Democratic Senator. That’s what Democrats think he’s going to do, and if they’re right, it will allow him and members of his party to claim they’ve moved significantly in the Democrats’ direction ... [But] it ultimately hands Medicare’s benefit guarantee over to a whimsical market, instead of keeping it in government hands ..."

"The U.S. is the closest it has been in almost 20 years to achieving energy self-sufficiency" suggests Bloomberg: "Domestic oil output is the highest in eight years. The U.S. is producing so much natural gas ... And higher mileage standards and federally mandated ethanol use, along with slow economic growth, have curbed demand ...
The expansion in oil and natural gas production isn’t without a downside. Environmentalists say hydraulic fracturing, or fracking ... is tainting drinking water."

FL Gov threw away about $40M in annual revenue by rejecting high-speed rail. Tampa Tribune: "The high-speed rail project that Gov. Rick Scott doomed last February by turning down more than $2 billion in federal money would have made an annual surplus of $31 million to $45 million within a decade of operation, according to a state report. The Florida Department of Transportation sent the report to the Federal Railroad Administration in November. The Tampa Tribune obtained the document after a lengthy public records request."

Progressive Breakfast

Bill Scher — Mon, 06 Feb 2012 09:17:13 -0500

MORNING MESSAGE: Plutocrats Play Political Ponies

OurFuture.org’s Sam Pizzigati: “Mitt Romney is leading the Republican primary, but only because he has more billionaires on his side than anyone else. Four of these billionaires from the hedge fund industry — Paul Singer, Julian Robertson, Robert Mercer, and John Paulson — have each contributed $1 million to the cause of Mitt. In all, the super PAC run by Romney cronies has collected $1 million from 10 men of immense means, $2 million from one other, and at least $100,000 each from almost 40 additional politically inclined super rich, more than enough to fund the $17 million TV ad campaign that bounced Romney into the nomination lead … Just one political decision alone — the tax treatment of so-called ‘carried interest’ — can make an annual difference of tens and even hundreds of millions of dollars for [these] billionaires …”

Deadline Today For Foreclosure Fraud Settlement

Today is deadline for state AGs to decide on joining foreclosure fraud settlement. Bloomberg: “The accord … will allow banks to take steps toward resolving mortgage liability stemming from the housing bust. The releases protect them from legal claims tied to foreclosures, mortgage-servicing and origination of loans … The deal wouldn’t take away any individual’s right to pursue an individual or class action case … Delaware Attorney General Beau Biden, who joined [NY AG] Schneiderman in pushing for a narrow release that doesn’t protect banks from claims that haven’t been fully investigated, won’t support the agreement … The settlement, meanwhile, would also require Massachusetts, Nevada and Arizona, which have sued banks involved in the talks, to settle those cases...”

CA, NY AGs are close to joining foreclosure fraud settlement, reports NYT: “[California’s involvement] could increase the pot for mortgage relief nationwide to $25 billion from $19 billion … to pay for principal reductions and other relief for up to one million borrowers who are behind on their payments but owe more than their houses are currently worth. The deal would also provide checks for about $2,000 to roughly 750,000 who lost homes to foreclosure … homeowners who participate in the settlement will still have the right to sue the banks for improper behavior … California officials and other veterans of the foreclosure crisis are haunted by the failure of past attempts to alter the behavior of the big banks … The backers of the latest deal insist their plan has more teeth, with a powerful outside monitor to oversee enforcement and heavy monetary penalties if banks fail to live up to commitments.”

NY AG lawsuit is promising development, “settlement or no settlement,” argues HuffPost’s Robert Kuttner: “...the suit does blow up the wrong kind of settlement -- one that would protect the banks from further civil and criminal liability. In fact, the settlement now taking final shape would only narrowly insulate banks from federal and state litigation directly related to fake robo-signing. Nothing in it shelters the banks from other liability, such as fraudulently claiming that trust documents contained mortgage notes that in fact weren't there. The proof of the pudding is that Schneiderman's case went forward, and there will be more such cases.”

Economy Still In Pain

NYT’s Paul Krugman cautions that there is much more work to do on the economy: “...about that jobs report: it was genuinely good … falling unemployment was the real thing, reflecting growing availability of jobs rather than workers dropping out of the labor force … [But] this encouraging employment report shouldn’t lead to any slackening in efforts to promote recovery. Full employment is still a distant dream — and that’s unacceptable.”

Many GOPers still fighting to block payroll tax cut extension: “Challenges will be most acute in the House … Boehner moved the final two-month extension under a unanimous consent agreement while most GOP members were back in their districts. Leadership had to dissuade some rank-and-file members from coming back to Washington to oppose the deal. GOP leaders may be forced to deal with another potential mutiny this time around. ‘Our marketplace needs certainty,’ Rep. Jason Chaffetz (R-Utah) said. ‘Tax holidays just are bad policy.’”

Romney Winning Now, Weakened For Later

President hits 50% approval in ABC/W. Post poll: “Boosted by improved public confidence in his economic stewardship, President Obama for the first time holds a clear edge over Republican presidential candidate Mitt Romney … 55 percent of those who are closely following the campaign say they disapprove of what the GOP candidates have been saying. By better than 2 to 1, Americans say the more they learn about Romney, the less they like him.”

Romney hasn’t talked to a voter in three weeks. W. Post: “The objective: appear presidential, avoid gaffes and convince Republicans that they have no reasonable option left but to rally around Romney’s winning candidacy.”

Breakfast Sides

Communications Workers of America to intensify effort to stop union-busting measure in FAA reauthorization. TPM: “...what went in was this: a new union-busting measure would make it harder for workers to trigger a union election by increasing the percentage of workers who must declare interest in unionizing from 35 to 50 … if the bill passes unchanged, it threatens to widen a rift between labor and incumbent Democrats this election year.”

China opposes EU carbon tax on airlines. AP: “China announced Monday it will prohibit its airlines from paying European Union charges on carbon emissions … governments including China, the United States and Russia oppose them … Beijing could have unusually strong leverage in a possible dispute because its state-owned airlines carry large numbers of Chinese and other Asian tourists to Europe. Any disruption would hurt Europe's travel industry when the continent is struggling with a debt crisis and high unemployment.”

New rule will save money on prescription drugs. Stateline: “The federal government this week announced a rule change it says will save the federal-state Medicaid program $17.7 billion over the next five years … Instead of paying for drugs based on drug company price lists, which are often inflated, Alabama decided a few years ago to start paying local pharmacies for prescriptions based on what they actually paid for the medicines … Now, the federal government is proposing to make it easier for all states to take the same approach, and it is offering some assistance with collecting the pricing data.”

Progressive Breakfast

Bill Scher — Fri, 03 Feb 2012 09:39:08 -0500

MORNING MESSAGE: Don't Break Out The Bubbly

OurFuture.org's Robert Borosage: "We’ve now had 10 quarters of economic growth and 5 quarters of jobs growth. The January jobs report shows growth across the private economy, notably in manufacturing and construction. But don’t break out the bubbly. Any celebration should stay sober. The U.S. economy is still slogging slowly against fierce headwinds. We are still 6 million jobs short of where we were when the Great Recession began. There are still nearly 24 million people in need of full-time work. There are still over 4 people lining up for every available job."

Unemployment Rate Ticks Down

Better than expected job growth in January. BLS: "Total nonfarm payroll employment rose by 243,000 in January, and the unemployment rate decreased to 8.3 percent ... the employment-population ratio (58.5 percent) rose in January."

A "grind in the right direction." NYT: "The promising jobs numbers came as various economic indicators have painted an ambivalent picture of the recovery’s strength. Layoffs appear to be slowing as fewer people are filing for unemployment claims, and factory orders have picked up. But while sales of existing homes have started to rise, home prices continue to fall. Consumer spending is still restrained, and could come under further pressure with oil prices edging higher over the last four months and as consumers revert to building up savings. 'It’s a steady grind in the right direction, but it’s a grind,' said Omair Sharif, United States economist at the Royal Bank of Scotland."

NYT explores WH manufacturing jobs strategy: "...the administration has put together a far-ranging set of proposals: cutting taxes for manufacturers that produce goods in the United States, taking away tax breaks for businesses that move jobs offshore, doubling a tax deduction for makers of high-tech goods, providing support to businesses investing in areas where factories are closing, expanding worker training programs and creating a new task force to better enforce trade rules and intellectual property rights. Closing a loophole that allows companies to shift profits abroad would pay for the tax credits, the White House says. It all adds up to what economists might call an industrial policy, the out-of-favor practice of using tariffs, taxes and other measures to help a particular industry."

HuffPost chronicles the depths of our infrastructure deficit: "The problems America faces with its infrastructure are often much less headline-grabbing than the 2005 collapse of the I-35 bridge in Minnesota, which focused national attention on the subject in a way that has set the tone of discussion ever since. They are more often on the order of lost productivity and lost opportunity. They include other problems Obama referenced in his speech, like 'a power grid that wastes too much energy; an incomplete high-speed broadband network.' If the struggle to fix America's infrastructure problem were a movie, it would be less Michael Bay than Woody Allen: not a lot of action, but also not much in the way of mass fatalities. Since 2005, there haven't been any more terrifying bridge collapses. Instead, the United States has failed to innovate and failed to maintain some key pillars of its infrastructure that are often less visible. People aren't dying, but the country is slowly losing its edge."

Romney Economic Message Tied Up In Knots

Romney goes back to falsely saying economy is "worse" now than under Bush. NYT: "That statement echoed one that Mr. Romney ... used when he announced his candidacy ... until he was confronted by an NBC-TV producer and fact-checking organizations. He dropped the line for many months, but has recently revived it. The consensus among nonideological economists since 2009 has been that the stimulus measures of the Obama administration and the Federal Reserve actually prevented the recession from becoming worse ... When Mr. Romney was first challenged last summer ... he told reporters, 'I didn’t say that things are worse.' He did then, and he has again."

Romney says he "misspoke" about poor. W. Post quotes: “It was a misstatement; I misspoke. I’ve said something that is similar to that but quite acceptable for a long time.”

No he didn't, says NYT's Paul Krugman: "...the more context you give to his statement, the worse it gets ... just a few days ago, Mr. Romney was denying that the very programs he now says take care of the poor actually provide any significant help [because of] 'massive overhead,' ... [And] the candidate has endorsed Representative Paul Ryan’s plan for drastic cuts in federal spending — with almost two-thirds of the proposed spending cuts coming at the expense of low-income Americans ... Mr. Romney’s position seems to be that we need not worry about the poor thanks to programs that he insists, falsely, don’t actually help the needy, and which he intends, in any case, to destroy."

Romney sides with staying in Afghanistan indefinitely. NYT: "Though Republican candidates have often successfully used foreign policy against Democrats, they have struggled to turn Mr. Obama’s handling of the wars in Afghanistan and Iraq to their advantage, largely because polls show that a majority of Americans favor getting out of both countries as quickly as possible. ... Last June, 79 percent of Americans said that they approved of Mr. Obama’s plan to reduce the number of troops in Afghanistan — beginning in 2011, with a pullout of 33,000 by the end of this summer..."

President Roots Fight Against Inequality In His Faith

President tells National Prayer Breakfast his attempts at reducing inequality grounded in his faith. W. Post: "'I think to myself, if I’m willing to give something up as somebody who’s been extraordinarily blessed, and give up some of the tax breaks that I enjoy, I actually think that’s going to make economic sense,' Obama told the audience. 'But for me, as a Christian, it also coincides with Jesus’s teaching that "for unto whom much is given, much shall be required."’"

Record low effective corporate tax rate. WSJ: "Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008."

Payroll tax talks drag on. Politico: "Twenty-six days remain until the popular tax cut is set to expire for 160 million Americans. But the debate so far has been consumed by side issues. And though the 20 negotiators stress that they all agree the tax holiday as well as jobless benefits and the Medicare reimbursement rate should be extended through 2012, they are avoiding the $64,000 question that stumped Congress in December: how to pay for it all."

SEC Goes Easy On Banks

NYT finds SEC systematically going light on big banks: "By granting exemptions to laws and regulations that act as a deterrent to securities fraud, the S.E.C. has let financial giants like JPMorganChase, Goldman Sachs and Bank of America continue to have advantages reserved for the most dependable companies ... An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions."

WH plans to wind down Fannie and Freddie. W. Post: "Geithner told reporters that administration officials have begun more intensively exploring legislative options for overhauling the nation’s housing finance system [but] concrete changes won’t come soon ..."

Freddie Mac regulators had stopped controversial bets against homeowners. ProPublica: "Freddie Mac’s regulator gave new detail today on why it halted the company’s controversial trades in complex mortgage-backed securities last year ... 'FHFA’s concerns arose through its supervisory process, which found that the risk associated with these transactions is inconsistent with FHFA’s goals of having Freddie Mac reduce its risk profile and avoid unnecessary complexity that requires specialized risk management practices,' FHFA acting director Edward DeMarco wrote.' ... However, the agency says that Freddie retains $5 billion of these investments on its books."

Wall Street divided over possible foreclosure fraud settlement. Bloomberg: "...a committee of money managers signaled it opposes terms letting banks push some costs onto bondholders ... The rift ... follows investor advocates’ complaints that bondholder interests are often trumped by those of the biggest banks when government officials act to address the fallout from the U.S. housing slump."

"5.6 Million Americans Have Switched Their Banks In The Last 90 Days" reports ThinkProgress.

Corporations Warm To Super PACs

Corporations slowly increasing their Super PAC donations. W. Post: "Corporations, especially those with high public profiles, had largely refrained from donating to political groups, but the new data signal a possible shift."

NYT asks for reader help to identify a secret Romney donor: "...at least one major donor remains unidentified: 'Glenbrook LLC,' which made a $250,000 donation to the pro-Romney super PAC last August ... The address listed for Glenbrook in campaign finance records is 3 Lagoon Drive, Suite 400, Redwood City, Calif. But a visit by a reporter to that location found it occupied by a certified public accounting firm, Seiler LLP. It is unlikely that the company is the actual source of the donation; instead, it probably helped file Glenbrook’s paperwork, or keeps its books. A company official told the reporter that it could not discuss its clients."

Breakfast Sides

Top congressional Republicans don't want to have an agenda this year. Politico: "McConnell and other influential senators believe the party should avoid putting out a detailed platform and focus squarely on Obama’s record, while a range of junior senators — and some veterans like Sen. John McCain — think the conference should lay out a Contract with America-type agenda. Others, such as Sens. Roy Blunt of Missouri and Ron Johnson of Wisconsin, want to more aggressively push House Republican bills in the Senate in order to speak with one voice coming out of Congress."

Congressional GOPers try to abandon "trigger" deal to cut spending. TPM: "'I’ve got concerns about the sequester,' House Speaker John Boehner told reporters Thursday. '... The defense portion of the sequester, in my view, would clearly hollow our military.' ... Boehner’s Thursday comments came moments after Senate Republicans unveiled their plan to partially phase out the enforcement mechanism by reducing the federal workforce and freezing federal pay. Both developments indicate Republican leaders no longer regard their own deal as sacrosanct. Now Boehner’s pressuring the White House to let Republicans off the hook for the piece of the deficit enforcement mechanism that was designed to make them negotiate in good faith. And Democrats are furious."

Dems consider scaled-back DREAM Act after positions taken by GOP presidentials. THe Hill: "The Republican presidential contenders are willing to grant illegal immigrants legal status if they came to the country at a young age and served in the military. ... Gingrich and Romney would lop off part of the DREAM Act that would grant legal residency to alien minors who came to the country at age 15 or younger, live in the country for at least five years and complete at least two years of higher education. Some Democrats are unsure whether they will embrace the Gingrich-Romney approach."

Recall of AZ Gov. Brewer possible, reports HuffPost: "Arizona could become the next Wisconsin as plans for protests, Capitol sit-ins and a potential effort to recall the governor get underway in an effort by progressives to block the passage of sweeping legislation to ban collective bargaining."

Interior Dept. advances four offshore wind farms. USA Today: "Interior Secretary Ken Salazar said federal environmental reviews for 'wind energy areas' off Delaware, Maryland, New Jersey and Virginia are now complete and find 'no significant environmental impacts' from their development. That finding clears the way for companies to seek leases. A similar announcement for the Massachusetts coast is expected today. 'The wind potential off the Atlantic coast is staggering, and no developer should have to wait nine to 10 years to get a lease,' Salazar told reporters. He said the goal is to hold auctions and issue leases this year."

Climate Progress' Jorge Madrid defends federal green job training program: "[GOP Rep. Darrell] Issa says the program has produced 'abysmal results' and failed to meet its goal of placing 52,762 American workers into green jobs. As of June 2011, the program had placed 8,035 workers into jobs, about 10 percent of the final goal ... [But training] does not create jobs or hedge against a deep economic recession. If we consider the fact that ... there are five applicants for every available job, it should come as no surprise that nearly all sectors are struggling to match workers with jobs ... these types of programs are absolutely critical for preparing the American workforce for the range of skilled jobs emerging in the clean energy economy."

Progressive Breakfast

Bill Scher — Thu, 02 Feb 2012 07:21:08 -0500

MORNING MESSAGE: The Republican Myth Of Obama’s "Entitlement Society"

Robert Reich: "One of the few things Mitt Romney and Newt Gingrich agree on is that President Obama is turning America into 'European-style welfare culture.' ... What’s their evidence? Both rely on federal budget data showing direct payments to individuals shot up by almost $600 billion, a 32 percent increase, since the start of 2009 ... But they have cause and effect backwards. The reason for the rise in food stamps, unemployment insurance, and other safety-net programs is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression ... If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically over the past three years."

Romney Doubles Down On Dismissing Poverty

Romney on defensive after says he's "not concerned about the very poor." NYT: "...it seemed to reinforce what might be his rivals’ most potent line of attack against him: that Mr. Romney, with a net worth estimated at $200 million, is out of touch and unable to relate to struggling Americans."

OurFuture.org FLASHBACK: Romney in October, "the people who need the help most are not the poor, who have a safety net."

The quote is not taken out of the context, explains The Daily Beast's Gary Rivlin: "Romney’s point is that the very poor—like the very rich but unlike the middle class—don’t need more help from the government. 'We have a safety net there,' he said. 'If it needs a repair, I’ll fix it.' ... [But the safety net] is under greater strain and facing ever more threats the longer the country’s economic woes continue ... Unemployment insurance lasts only so long ... many workers barely scraping by don’t qualify for unemployment insurance ... Losing your job often means losing your health insurance ... Medicaid is generally only for those who are taking care of children ... only one in four people eligible for [the housing voucher] program actually receives assistance ... then there have been the deep cuts to the program that colloquially people refer to as 'welfare' ... [And] to the extent he’s spoken about these issues, he’s offered proposals that would weaken the safety net, not strengthen it."

Romney takes fire from Newt. CBS quotes: ""I am fed up with politicians in either party dividing Americans against each other. I am running to be president of all of the American people, and I am concerned about all of the American people."

Secret money funding Super PACs. NYT: "Some of the money came from well-established concerns, like Alpha Natural Resources, one of the country’s largest coal companies, which is backing Republican-aligned American Crossroads ... Some came from companies closely identified with prominent industrialists or financiers, like Contran, a mammoth holding company controlled by the Texas billionaire Harold Simmons ... and Blue Ridge Capital, a New York hedge fund founded by the wealthy investor John A. Griffin, a supporter of Mitt Romney. But some checks came from sources obscured from public view, like a $250,000 contribution to a super PAC backing Mr. Romney from a company with a post office box for a headquarters and no known employees."

Romney funded by small group of multimillionaires. W. Post: "A quarter of the money amassed by Romney’s campaign and an allied super PAC has come from just 41 people, each of whom has given more than $100,000 ... Some of Romney’s biggest supporters include executives at Bain Capital, his former firm; bankers at Goldman Sachs; and a hedge fund mogul who made billions betting on the housing crash."

Steven Rattner delves deep into Romney's tax return, for Politico oped: "...a large chunk of Romney’s income (about $7.4 million last year) is derived from the famous carried interest ... Romney believes he is entitled to that treatment even though he left Bain in 1999. He now almost certainly derives the vast preponderance of that $7.4 million from investment vehicles that weren’t even in existence when he left the firm ... In 1993, the IRS ruled that individuals would be entitled to the capital gains rate on carried interest if they provide services to their firm — but said nothing about after retirement ... Next, there’s his IRA [which] has a current value of $20.7 million to $101.6 million — one of the largest ever recorded ... he may well have 'sold' some of his Bain carried interest to his IRA ... Such a transfer would be of questionable legality..."

GOP race heads to economically devastated Nevada. NYT: "One in every 175 homes is in foreclosure. In every suburb here, signs advertising move-in specials abut vacant lots and half-completed development projects. The collapse in the construction industry has been devastating; it once accounted for 12 percent of all jobs, but it is down to 5 percent."

Santorum seeks to revitalize campaign by defending high drug prices, lecturing mother with sick child. CNN quotes: "People have no problem going out and buying an iPad for $900. But paying $900 for a drug, they have a problem with it. It keeps you alive. Why? Because you have been conditioned to thinking that health care is something that you should get and not have to pay for. Drug companies, health care companies need to have a profit motive, because if they don't, then how are we going to regulate costs? We are gonna ration care ... [Your son is] alive today because drug companies thought that they would make money in providing that care and if the drug company didn't think they could make any money by providing that care, I hate to put it in these terms, but that drug wouldn't be here."

Obama Proposes, Boehner Rejects Refi Plan

Obama announces refi proposal. NYT quotes: "I am sending Congress a plan that will give every responsible homeowner in America a chance to save about $3,000 a year on their mortgage by refinancing at historically low rates ... No more red tape. No more runaround from the banks.”

Boehner rejects any help for homeowners. HuffPost quotes: "We've done this at least four times where there's a new government program to help homeowners who have trouble with their mortgages ... All it does is delay the clearing of the market."

Jared Bernstein praises Obama's refi plan, knocks Congress: "Such borrowers are blocked [from refinancing] due to ... underwater mortgages and risk aversion by lenders ... One potentially helpful wrinkle is extending the federally insured refis ... to a large group of homeowners who have heretofore been ineligible ... the FHA needs capital to offset the risk they’re taking on by insuring the banks holding the new mortgages. To raise those funds, the bill calls for a fee on large financial institutions (banks, investment houses), specifically on their leverage. This actually strikes me as a fair way to connect the dots between the housing/finance meltdown/bailout and measures to address the damage. But this Congress is…um…very unlikely to pass it."

Deadline pushed back for state AGs to consider foreclosure fraud settlement. Bloomberg: "Nevada Attorney General Catherine Cortez Masto said in a Jan. 27 letter to Miller, the Justice Department and U.S. Housing and Urban Development Secretary Shaun Donovan that she needed answers to 38 questions to evaluate the deal.
The deadline was changed as Oregon Attorney General John Kroger said today in a statement that he would sign on to the settlement, joining Connecticut Attorney General George Jepsen, who also supports it. Delaware Attorney General Beau Biden has said he won’t sign on to the settlement."

GOP Tries To Extend Fed Worker Pay Freeze

No movement in payroll tax cut talks. The Hill: "...with Democrats feeling they have leverage in the negotiations, neither side has moved away from its preferred methods for paying for an extension of the payroll tax cut. On Wednesday, the House approved one of the GOP’s favored offsets, an extension of a pay freeze on federal employees. Democrats have not embraced that proposal, and conferees from the party said Wednesday that they were still hopeful that a surtax on millionaires could be used to fund an extension of payroll tax relief."

House votes to extend federal worker pay freeze. Politico: "...Wednesday’s largely bipartisan vote could help the GOP’s push to include a pay freeze in the payroll tax cut negotiations. The measure would save about $26 billion ..."

Conservative group pressures House to vote against transportation bill, which would increase oil drilling and defund bike paths, for not cutting spending. Politico: "The [Club for Growth] sent a 'key vote alert' Wednesday urging members to oppose the bill. It also said their votes would be part of the organization’s 2012 scorecard ... Large Republican defections would be devastating to the bill’s chances of clearing the House. Leadership doesn’t expect to win over any Democrats."

Breakfast Sides

17-year old explains what it is like when your parents "self-deport," in NYT oped: "I have a brother, 16, a year younger than me, still living in Mexico. He was too little to cross the border with me when I came to the United States, and as the government has cracked down on immigration in the years since, the crossing has become more expensive and much more dangerous ... So he stayed with my grandparents, but last year my grandmother died and two weeks ago my grandfather also died ... [My parents] decided they had to go back to Mexico ... Deportation, and 'self-deportation,' will result only in dividing families and driving them into the shadows."

Arizona state Senate committee advances anti-union legislation. Arizona Republic: "Arizona unions representing tens of thousands of public workers would be banned from collective bargaining with local governments and school districts ... make it tougher for unions to deduct dues though members' public paychecks and ban compensation of public employees for union work while on the job."

Additional research assistance was provided by Michael Brooks

Progressive Breakfast

Bill Scher — Wed, 01 Feb 2012 08:53:39 -0500

MORNING MESSAGE: Taxpayer-Backed Mortgage Giant Bets Against Its Customers

OurFuture.org's Richard Eskow: "The short version is this: A government-backed agency used billions in taxpayer money to bet against the economic well-being of those taxpayers. (Even people who don't have mortgages are being hurt, because the housing crisis is crippling the entire economy.) It undercut its own social function. And because these were risky bets, it went back to the glory days of banker recklessness - once again gambling with our money but keeping the bonuses for themselves it worked out. Heads they win, tails we lose. The moral of the story? Government is better than the private sector at doing many of its historical functions. More often than not, when it comes to well-run agencies we need to re-learn a lesson: Privatization stinks."

WH To Reveal New Refi Plan

President to propose mortgage refinancing plan today. WSJ: "The plan aims to help borrowers who are current on their mortgages refinance into lower-interest federally insured loans. Borrowers would qualify even if they owe more than their homes are worth or if they have trouble securing a new mortgage from a private lender ... to fund the effort's estimated $5 billion to $10 billion price tag [Obama] is proposing a tax on large banks—something Republicans have said they oppose ... Mr. Obama intends to unveil other housing initiatives the White House can implement unilaterally, that won't need congressional approval. Among them, officials said, is an auction process for bulk sales of foreclosed homes that federally controlled mortgage entities would sell to investors who maintain them as rentals."

Atlanta suffering most from housing crisis. NYT: "The region, plagued by mortgage fraud and developers who dotted the exurban landscape with large luxury homes that never sold, is inundated with foreclosed properties. In fact, Atlanta has the most government-owned foreclosed properties for sale of any large city, according to the Federal Reserve. Nationwide, sales of existing homes have recently picked up, prompting some economists to suggest that the housing market is finally starting to repair itself. But the number of new homes sold fell to a record low in December, and many homeowners are stuck in houses that are worth far less than they owe on their mortgages ... The glut is likely to grow. According to RealtyTrac, Atlanta has a nearly 12-month supply of foreclosed homes, about 70 percent of which are sitting on the books of servicers and lenders, waiting to go on sale."

W. Post's Harold Meyerson lauds NY AG Schneiderman's effort to secure a federal investigation of the banks: "With just 15 lawyers at his disposal, Schneiderman couldn’t have waged a far-reaching investigation anyway. He’s now secured commitments of much greater resources from the Justice Department, the FBI, the Internal Revenue Service, the Securities and Exchange Commission, the new Consumer Financial Protection Bureau, and various U.S. attorneys and other state attorneys general. There will be several hundred investigators, as well as state and federal statutes under which alleged lawbreakers can be charged. All of this means that the government will be able to commit resources comparable to those that a mega-bank can bring to its defense."

Regulators weigh Volcker Rule exemption. Bloomberg: "U.S. banking regulators are exploring whether they can exempt sovereign debt from the Dodd-Frank ban on proprietary trading after foreign governments complained that the rule could raise borrowing costs and impede the flow of capital ... The global backlash against the Volcker rule has been welcomed by U.S. banks ... Granting an exemption may have to overcome skepticism in Congress in the midst of the European debt crisis and the probe of MF Global Holdings Ltd, which collapsed after making a $6.3 billion bet on European government bonds."

House GOP Threatens Transportation Jobs Bill

House GOP introduces transportation bill loaded with poison pills. Politico: "...drilling in the Arctic National Wildlife Refuge, cutting Amtrak’s budget, forcing approval of the Keystone XL pipeline and ending mandatory spending on bicycle and pedestrian paths ... former T&I Chairman Jim Oberstar (D-Minn.) [said] 'It seems to me that fringe policymakers have hijacked the transportation bill.' ... There were no Democrats at the press conference. Even one of the Senate’s most conservative members, Environment and Public Works Committee ranking member Jim Inhofe (R-Okla.), opposes the House’s use of expected oil revenues to pay for the five-year proposal."

President celebrates auto turnaround at the Washington Auto Show. Politico: "The president viewed more than a dozen new electric and hybrid models from Ford, Dodge and General Motors, and even sat in the drivers seat of a few, checking out the interiors. 'When you look at all these cars, it is a testimony to the outstanding work that’s been done by workers, American workers, American designers,' he said. 'The U.S. auto industry is back.' ... 'It’s good to remember the fact that there were some folks who were willing to let this industry die ... Because of folks coming together, we are now back in a place where we can compete with any car company in the world.'"

China encroaching on US auto parts industry. Politico: "Along with the United Steel Workers and United Auto Workers, Sens. Bob Casey of Pennsylvania, Sherrod Brown of Ohio and Debbie Stabenow of Michigan, and Rep. Sander Levin (D-Mich.) asked the president on Tuesday to make good on his State of the Union pledge to investigate unfair trade practices. A brief released ... by the Alliance for American Manufacturing claims the Chinese government engages in 'a variety of illegal and predatory practices' to protect its auto-parts industry, including an $8.7 billion subsidy in 2010, mandates that any autos assembled in China feature engines made there, tax incentives, low-interest loans and export duties on auto parts."

President proposes small biz bill. W. Post: "Obama’s proposals, which build on the Startup America initiative the administration launched last year, include eliminating taxes on capital gains from investments in small businesses, providing a 10 percent tax credit for companies that create jobs or increase wages this year and ending country-specific immigration caps in order to attract highly skilled workers ... The White House acknowledged that Republicans have supported similar ideas and cast the president’s legislation as a vehicle to bring the parties together in an effort to craft a bill on which both can agree."

"Buffet Rule" Proposed In Senate

Sen. Sheldon Whitehouse (D-R.I.) to introduce "Buffet Rule" bill. NYT edit board praises, calls for more to achieve fairness: "[The bill] would impose a new rate of up to 30 percent that would phase in gradually on incomes between $1 million and $2 million. The new rate would have to be paid if it is higher than the taxpayer’s current rate. It would operate like the alternative minimum tax, superseding all brackets and the lower rates for investment income, though it would preserve the incentive for charitable donations ... [That's] only the beginning. Sound tax policy calls for raising the capital gains tax, which, at 15 percent, is the lowest since the Great Depression ... It is also important that the Bush tax cuts expire for all tax brackets at the end of this year."

WH also pushing tax on overseas profits. Politico: "While details remain sketchy ... The administration figures that if the IRS gets to collect the money anyway, then multinationals have less of a reason to move jobs out of the country. The tax could deter companies from hopscotching around the world to whichever country cuts them the best deal."

Huge support for tax incentives that boost domestic manufacturing. Politico: "Eighty percent of Democrats and 89 percent of Republicans said they favor giving U.S. corporations tax breaks for bringing home manufacturing jobs from abroad - known as 'insourcing' - while 77 percent of Democrats and 71 percent of Republicans said they support putting pressure on Beijing to allow fairer trade between the U.S. and China."

FL Win Doesn't End Questions About Romney

Who's funding Romney? NYT: "Close to 60 corporations and wealthy individuals gave checks of $100,000 or more to a “super PAC” supporting Mitt Romney in the months leading up to the Iowa caucuses ... Millions of dollars came from financial industry executives, including Mr. Romney’s former colleagues at Bain Capital, who contributed a total of $750,000; senior executives at Goldman Sachs, who contributed $385,000; and some of the most prominent and politically active Republicans in the hedge fund world .... Harlan Crow, the Texas construction magnate, gave $300,000 personally and through his company. William Koch, whose brothers Charles and David are among the country’s most prominent backers of conservative causes, gave $1 million personally or through Oxbow Carbon, the energy company he founded. Members of the Walton family, founders of the Walmart chain, gave over $200,000 ..."

"Romney Team Silent On Key Outstanding Tax Avoidance Question" reports TPM: "...despite multiple inquiries in the days since the conference call, the Romney camp has not set the record straight one way or another. Romney has disclosed a substantial individual retirement account (IRA) that, as the Wall Street Journal first noted, could have made offshore investments that circumvented an obscure U.S. tax called the Unrelated Business Income Tax (UBIT) ... at 35 percent that’s no small tax to get around ..."

GOP Obstruction On Taxes Increases Deficit

CBO projects federal deficit to stay over $1T this year. USA Today: "Obama's deficit-cutting goal fell short in part because of opposition to his support of a tax increase on the wealthiest of Americans."

Center for American Progress' Michael Linden details how the Bush tax cuts increased the deficit: "...higher spending under Obama accounts for less than 20 percent of this year’s deficit, and nearly half of that was additional defense spending—not domestic spending. Bottom line: The narrative that an 'Obama spending spree' caused our deficit problem is utterly false ... 35 percent of the swing from a $170 billon projected surplus to a $1.079 billion deficit is directly attributable to events that preceded the current president’s term ... The remainder of the deterioration did happen after 2009, but higher spending wasn’t even close to the main culprit. The real problem was lower-than-expected revenues ... [The Dec. 2010] deal, which extended all of the Bush tax cuts, even those that exclusively benefit the very wealthy, is the legislative factor by far most responsible for this year’s deficit."

"Will Germany Bully Europe Over the Brink?" asks New Deal 2.0's Jeff Madrick: "The audacity Germany has shown in floating a demand to manage Greece’s finances is a window on the leaders of that country and how much perspective they’ve lost ... I am tempted to say that antediluvian economics is ruling in Germany, but it may not really be about economic theory, but rather superior pride, irrational fear of inflation, and perhaps vindictiveness. It’s as if a German version of our own Tea Party is now running economic policy in Europe."

After wasteful subsidies to private insurers are killed by "ObamaCare," Medicare Advantage enrollment goes up, premiums down. USA Today: "That continues a trend for the Medicare Advantage program that counters the negative predictions about the effects of the 2010 health care law, which said enrollment would drop and premiums would rise."

Progressive Breakfast

Isaiah J. Poole — Tue, 31 Jan 2012 08:44:22 -0500

MORNING MESSAGE: China Cheats—Push May Come To Shove

OurFuture.org's Robert Borosage: China cheats and everyone knows it. Pressures are building on the administration to start enforcing our trade laws. Republican presidential aspirant Mitt Romney says he’ll cite China as a currency violator on day one of his presidency. In his State of the Union address, President Obama announced he would set up a special unit to enforce trade laws, calling out China by name. Now a coalition of unions led by the United Steelworkers and the United Auto Workers, along with allied organizations are joining with Senators Sherrod Brown and Debbie Stabenow to call the question.

Trade Battles with China

TPM's Josh Marshall reports: On Monday, the U.S. Commerce Department announced it had found “reasonable basis to believe or suspect” that Chinese subsidies of solar panels imported to the U.S. were in violation of international trade agreements. ... A big part of the reason the Commerce Department announced its decision today is precisely because it observed the Chinese manufacturers drastically increasing the volume of imports to the U.S. over the past few months — up nearly 15 percent in the case of at least two companies — following the original complaint from U.S. solar panel companies in October of dumping by Chinese manufacturers.

World Trade Organization orders China to stop export taxes on minerals. New York Times: "The legal setback for Beijing could set a precedent for the West to challenge China’s export restrictions on other natural resources, including rare earth metals that are crucial to many modern technologies, trade experts said."

Florida Vote: From SuperPACs to Super Crash

Political spending shifts from campaigns to superPACs, reports Jed Lewison at DailyKos: "... A new study shows that while the amount of advertising so far in the Republican presidential primary is on the same level as 2008, a much larger portion of it is now being funded by outside groups. in 2008, 97.4 percent of the money was spent by campaigns themselves—just 2.6 percent by outside groups. In 2012, 56.4 percent of the money was spent by campaigns—43.6 percent by outside groups, a nearly 17-fold increase for outside groups as a share of total ad spending. Even though total spending decreased by 42 percent, spending by outside groups increased 1,281.8 percent."

Ed Kilgore at Political Animal links to a chart on superPAC spending.

Who's behind all of this superPAC spending? As Christian Science Monitor reports, "The secret donors funding a flood of negative ads in the 2012 presidential race are supposed to go public Tuesday. But loopholes in federal disclosure rules mean that Americans will still be left largely in the dark about who is financing what."

The super crash in housing a big issue in Florida. Bloomberg Businessweek: "Twenty-three percent of mortgaged homes in Florida, the fourth-most populous state, are delinquent or foreclosed upon, more than in any other state, according to Jacksonville-based Lender Processing Services. Florida ranks third in the portion of homeowners with underwater mortgages -- with 44 percent of properties valued at less than the loans -- according to Santa Ana, California-based CoreLogic data from the third quarter. In a state that helped elect President Barack Obama in 2008, home prices declined 22.5 percent from the first quarter of 2009, when he was inaugurated, through the third quarter of 2011, according to the Bloomberg Economic Evaluation of States index."

Who will win Florida tonight? Steve Singiser at DailyKos does a polling roundup. "Well, maybe it is tightening, and Newt Gingrich is back within the margin of error. Or maybe Mitt Romney is now staked to a 20-point advantage. As has happened fairly often in this bizarre primary cycle, there is a poll out there on election eve to suit your favored meme."

The American Prospect's Bob Moser on "Newt's fatal flaw": "Gingrich’s only chance to take the nomination is as the leader of a movement—loosely defined, the Tea Party movement—and he spoke to its anti-elitist streak powerfully in his dramatic victory in South Carolina. But you can’t lead a movement when everything you say eventually comes back to you, above all else. It can’t be my outrage; it has to be our outrage. But instead of effectively casting the Romney campaign as the enemy of all anti-establishment conservatives—as Sarah Palin and Herman Cain tried to do for him over the weekend—Gingrich seems incapable of putting the brakes on his megalomania."

TheLoop 21's Keli Goff says three words—"I didn't inherit"—will cost Mitt Romney the election.

More Mortgage Fraud Settlement Fears

Nevada's attorney general is pushing back with concerns and questions about a settlement over allegations of widespread mortgage fraud, HuffPo's Loren Berlin reports. "In a letter sent Friday, emailed to federal officials and obtained by The Huffington Post, Nevada's attorney general, Catherine Cortez Masto, asked 38 questions relating to a variety of concerns, including fears that states would play second fiddle to the federal government in making decisions. She also questioned if states would lose their ability to pursue certain types of lawsuits against banks and whether states would get their fair share of the housing assistance for their borrowers. "

California's Attorney General Kamala Harris seeks "edge" in settlement talks, according to Bloomberg. "By Harris’s own reckoning, her reluctance to sign onto a deal and any investigation she might pursue risk deepening the “blight and despair” for many of the 2.2 million California homeowners whom she has said are “holding on by their fingernails.” Still, she is pushing a broader probe of banks’ mortgage practices, including securitization of the loans. ... She spoke of having an investigator’s penchant to leave no stone unturned in learning what banks told homeowners when they entered into loans, and how documentation of the transactions measured up to what mortgage holders believed to be the terms of the agreement."

USA Today offers a Q&A on the issues surrounding the mortgage settlement.

Freddie Mac's Bets against Homeowners

ProPublica/NPR follow-up to story that Freddie Mac was buying securities that served as an incentive against helping homeowners get out of high-interest-rate loans. "Freddie Mac agreed last month to stop making new bets against American homeowners after its regulator, the Federal Housing Finance Agency, raised concerns ... Separately, the White House said the Department of the Treasury is "looking into" Freddie's investments, and at least three senators called on Freddie not to bet against struggling homeowners."

The White House confirms it is investigating Freddie Mac bets against homeowners (New York Times).

Felix Salmon: "The Freddie Mac rule certainly maximizes Freddie Mac’s income, but it’s dreadful and unfair public policy. At the same time, it’s also policy which is very much in line with the FHFA’s stance on principal reduction, or anything else which might help homeowners. Given the choice between extracting short-term cashflows from homeowners, on the one hand, and improving the all-over health of the housing market, on the other, the FHFA will always choose the former."

Contrarian view from Yves Smith: "The storyline in this piece is neat, plausible, and utterly wrong. And my e-mail traffic indicates that people who are reasonably finance savvy but don’t know the mortgage bond space have bought the uninformed and conspiratorial ProPublica thesis hook, line, and sinker."

Unemployment Compensation Fight

States now paying the price for not collecting enough from businesses to pay unemployment claims. Center for Budget and Policy Priorities: "Businesses in 20 states must make the first payment [today] on about $35 billion that these states have borrowed from the federal government in recent years to help pay unemployment insurance (UI) benefits. Most of this borrowing happened because many states kept the business taxes that fund UI benefits too low before the recession, leaving their UI reserves ill prepared for an economic slump."

House to vote this week on extending a federal pay freeze to help pay for extension of unemployment benefits. The Washington Post: "The vote comes as a new government report shows that federal employees on average earn about 2 percent more than private sector employees in a comparable profession. When pension and health benefits are factored in, federal employees earn about 16 percent more in total compensation than private sector workers, according to the Congressional Budget Office."

Breakfast Sides

Mitch McConnell's revisionist history: Congress gave President Obama everything he wanted in 2009-2010. False, says Sahil Kapur at Talking Points Memo: "This isn't a new claim for McConnell, but it's audacious even by Washington's lax standards. It was McConnell, after all, who led Senate Republicans in serial filibusters -- a record-setting number -- successfully thwarting large chunks of Obama's agenda. By forcing Democrats to find 60 votes to nearly every action, McConnell and his members were able to block major initiatives including climate change and immigration reform bills, various appropriations bills, myriad presidential appointments, and arguably also a Democratic effort to let the Bush tax cuts expire for high incomes. Meanwhile, big legislative items that did pass, such as health care reform and the economic stimulus package, were notably scaled back as a result of the GOP filibusters."

Is your local weathercaster peddling the right-wing line against climate change? Huffpo's Lynne Peoples reports: "Recent studies have found that more than half of the reporters relaying weather on television do not believe humans are the primary drivers of global warming -- despite a consensus among scientists who specialize on the topic. ... A new campaign called "Forecast the Facts," begun by Citizen Engagement Lab with the support of the League of Conservation Voters and the climate advocacy group 350.org, aims to call out on-air climate deniers."

Mother Jones examines the Tea Party plan to save Wisconsin Gov. Scott Walker from defeat in a recall. "Tea partiers at the state and national levels are rallying around Walker's recall defense, hoping a victory could bolster the movement in a critical election year. ... In recent months, the Tea Party Express, a national organization, and the Campaign to Defeat Barack Obama, a tea party-linked political action committee, have waded into the recall fight, blasting out more than a dozen emails to supporters and launching a $100,000 "money bomb" fundraiser to help defend Walker."

Progressive Breakfast

Bill Scher — Mon, 30 Jan 2012 09:34:40 -0500

MORNING MESSAGE: Why Aren't Mitt & Newt Talking Social Security in FL?

OurFuture.org's Richard Eskow: "I can certainly understand why the candidates didn't want the subject raised. More than three and a half million Republican voters rely on Social Security, including seniors, disabled people, and surviving spouses. In fact, the candidates in Tuesday's primary would be crazy not to hide their opinions on the topic ... This week's Florida primary should be renamed 'Don't Tell Grandma Social Security Will Be Dead – and Medicare Too – If We're Elected.' Mitt Romney's already on record as saying income inequality shouldn't be discussed openly. Was there some sort of 'gentleman's agreement' to ignore Social Security too?"

Europe Admits: Austerity's a Bust

EU to admit austerity isn't working. NYT: "...European leaders are expected to conclude this week that what the debt-laden, sclerotic countries of the Continent need is a dose of economic growth ... The difficulty, however, is that reaching such a conclusion is not the same as making it happen. Instead, leaders will discuss long-term structural reforms and better use of E.U. subsidies, while avoiding mention of the one thing that could change the climate: a fiscal stimulus from Germany, the euro currency zone’s undisputed powerhouse."

Several European nations are worse off than during the Depression because of austerity, argues NYT's Paul Krugman: "Britain, in particular, was supposed to be a showcase for 'expansionary austerity,' the notion that instead of increasing government spending to fight recessions, you should slash spending instead — and that this would lead to faster economic growth ... 'I firmly believe,' declared Jean-Claude Trichet — at the time the president of the European Central Bank ... '...confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.' Such invocations of the confidence fairy were never plausible ... Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas."

No Settlement Yet

CA AG Kamala Harris holding out on foreclosure fraud settlement. Bloomberg: "...she is pushing a broader probe of banks’ mortgage practices, including securitization of the loans ... After Harris rejected a proposed agreement in September, negotiators crafted two deals: one including California for $25 billion and another without the state for $19 billion ... they must decide soon whether to move ahead without her ..."

NY AG Eric Schneiderman, Obama's new housing crisis investigator, hasn't signed off either. HuffPost's Robert Kuttner: "...he has already gotten major concessions. The deal will only address the relatively narrow (but outrageous) abuse of robo-signing, and nothing in it will provide release from criminal prosecutions. Other details are still being negotiated. It is likely that Schneiderman will not give his final assent until he receives assurances on who will really be in charge of these broader investigations and with what level of resources ... Schneiderman's goal, as far as I can tell, is to serve both justice and macroeconomic recovery. With fresh federal investigative resources, he can threaten bankers with legal Armageddon. Then, in addition to sending the worst malefactors to prison, he can entertain a settlement not in the tens of billions but in the hundreds of billions -- sufficient to provide very major write-downs of mortgage principal owed. That, in turn, changes the dynamics of the housing crisis as a drag on the recovery..."

Freddie Mac investments bet against homeowners, finds ProPublica and NPR: "Freddie Mac ... has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates. Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages. No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are 'walled off' from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules."

Banks lobby for overseas exemption of Dodd-Frank rules. Bloomberg: "More than half of the derivatives- trading business of Goldman Sachs Group Inc, Morgan Stanley and three other large banks could fall largely outside the Dodd-Frank Act if they succeed in lobbying regulators to exempt their overseas operations ... If overseas operations aren’t subject to U.S. rules or equivalent regulation by other nations, it could impede the goal of preventing another credit crisis, Darrell Duffie, professor at Stanford University’s Graduate School of Business ... CFTC Chairman Gary Gensler said this month that his agency won’t complete guidelines on the reach of Dodd-Frank until after April, while the financial industry waits for a similar proposal from the Securities and Exchange Commission. Gensler has said the CFTC may eventually defer to foreign regulators when they have comparable and consistent regulations."

Businessman Presidents Are Failures

How successful are presidents with mainly private-sector experience? Not every, finds LAT's Walter Zelman: "...five presidents [since 1901 had] extensive private-sector experience ... Warren Harding was a newspaper publisher. Herbert Hoover was an engineer who managed mining operations. Jimmy Carter was a peanut farmer. Both Bushes had longtime experience in the oil business, and George W. Bush was a managing partner of a baseball team. None of these five presidents rank above average, and three — George W. Bush, Harding and Hoover — are near the bottom of most rankings."

Romney profited from Bain's lobbying, reports Mother Jones: "The firm spent $300,000 between August of 2007 and April of 2008 lobbying the House and Senate on bills that threatened the carried interest loophole ... Bain and its ilk paid lobbying shops, public relations firms, and trade groups like Ogilvy and the Private Equity Growth Capital Council an estimated $15 million ... Bain's gain, then, has clearly been Romney's as well—and the candidate has publicly endorsed the same policies the company has backed."

GOP is risking obsolescence, argues NYT's Tom Edsall: "The party could open up beyond its core believers to accommodate old-school Republican moderates and hold on to its libertarians and still have decent size, strength and power. But the country is going through a profound restructuring in moral and economic thinking and the danger for Republicans is that their current coalition might become obsolete. If the party doesn’t adapt, the alternative is that its power centers — the Christian right, anti-immigration forces, and proponents of policies that benefit the affluent at the expense of the less well-off — will refuse to adjust, in which case the party risks going the way of the Studebaker."

Breakfast Sides

"Bolder choices" needed on military cuts, argues FT's Edward Luce: "Why are there still 30,000 troops in Germany? Why does the US need almost 2,000 nuclear warheads? Under what scenarios does it imagine fighting major land wars?"

Sen. Min. Leader McConnell refuses to rule out tax increase to offset cost of payroll tax cut extension reports Politico.

CA Gov. Jerry makes case that high-speed rail is cheaper with cap-and-trade. McClatchy quotes: "...cap-and-trade, which is this measure where you make people who produce greenhouse gases pay certain fees – that will be a source of funding going forward for the high-speed rail."