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Democrats Pick Up Health-Care Supporters as House Moves Near Critical Vote

by on March 19, 2010

By Nicole Gaouette and Kristin Jensen March 19 (Bloomberg) — U.S. House Democrats, who cleared a big hurdle in their effort to overhaul the health-care system by producing compromise legislation, are picking up fresh support for a showdown vote this weekend. Democrats need about six more votes from House members to pass the 10-year, $940 billion bill, Obama administration officials said today. President Barack Obama and Democratic leaders aim to sway some in a pool of 14 or 15 undecided lawmakers to get to the 216 votes needed to pass the measure, according to the officials, who spoke on condition of anonymity. “We are going to have the votes when the roll is called,” House Majority Leader Steny Hoyer told reporters today. A vote is scheduled for March 21, leaders said. Obama plans to meet with House Democrats at the White House tomorrow. He has met or called about three-dozen lawmakers in the last five days and cleared his schedule today for more last- minute appeals, including a rally in Fairfax, Virginia. “You’ve got to help us finish this fight,” Obama told the crowd. “You’ve got to stand with me just like you did three years ago and make some phone calls and knock on some doors, talk to your parents, talk to your friends. Do not quit.” Four Switch At least four Democrats agreed to switch their votes to back the bill this week. House Speaker Nancy Pelosi may need more to make up for defections by Democrats concerned about issues ranging from the cost to whether restrictions on abortion funding are strong enough. Democrats say the legislation will cover 32 million uninsured Americans and curb medical costs . The Congressional Budget Office yesterday said it would also reduce the federal deficit by $138 billion in the first 10 years and further reduce the shortfall afterward. “This changed a few votes in the last few days,” said Representative Bill Pascrell , a New Jersey Democrat who plans to vote for the bill in part because it cuts the deficit. The Senate, which passed its own version of the legislation in December, will take up the revised measure next week. House members objected to key provisions of the Senate bill, and Democratic leaders unveiled a compromise measure yesterday to settle the differences. Biggest Changes Democrats are seeking the biggest changes to the health system since the creation of the Medicare program for the elderly in 1965. Insurers such as Indianapolis-based WellPoint Inc. would get millions of new policyholders, while being required to accept all customers. Republicans are universally opposed and have vowed to block the plan. They say it costs too much and uses budgeting gimmicks because much of the expansion of insurance coverage comes later in the life of the bill. “They can tweak this thing and tweak it,” House Republican Leader John Boehner of Ohio told reporters. “Still, it’s a trillion dollars they are going to spend.” Business groups have mounted a lobbying campaign against the legislation, and Caterpillar Inc. sent a letter to Pelosi and Boehner saying the bills would raise its costs by $100 million in the first year alone. “We can ill afford cost increases that place us at a disadvantage versus global competitors,” wrote Gregory S. Folley, vice president and chief human resources officer at Peoria, Illinois-based Caterpillar, in the March 18 letter. Lobbying Lawmakers Obama says the U.S. can’t afford not to overhaul the health-care system, and postponed a trip to Indonesia and Australia to lobby lawmakers. Ohio Representative John Boccieri today told reporters he will support the new legislation after voting against a version when it passed the House in November. That followed similar announcements from Democrats Bart Gordon of Tennessee, Betsy Markey of Colorado and Dennis Kucinich of Ohio. The Democrats have lost votes too. New York Representative Michael Arcuri , who voted in favor of the original House bill, said he’s now a “no.” He said the bill doesn’t do enough to control costs in a statement . Representative Dan Lipinski , an Illinois Democrat, said he also is switching his vote to “no,” citing concerns about abortion. That followed the likely loss of Michigan Democrat Bart Stupak , who has said he can’t support the new legislation without changes on abortion. Geographic Disparities And a group of lawmakers are protesting the deletion of a provision designed to ease geographic disparities in Medicare payments. Oregon Representative Peter DeFazio , a “yes” vote in November, said he would be a “no” this time unless the provision, affecting 17 states, is reinstated. “There are a number of people who may be miscounted at this time,” DeFazio said of the “yes” vote count. The original House bill passed 220-215 in November. Since then, Democrats lost four “yes” votes because of vacancies and a switch by the only Republican who supported the bill. All told, 37 sitting Democrats voted “no” on the original bill. Another 40 supported the measure while voting “yes” on language calling for stricter controls on abortion funding put forth by Stupak. Some of their votes, like Lipinski’s, might change. House and Senate lawmakers designed the bill that will make changes to the Senate legislation under a process called reconciliation. It will allow the Senate to pass the revised bill with a simple majority after the House passes the original Senate measure and the changes. To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net ; Nicole Gaouette in Washington at ngaouette@bloomberg.net

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Democrats Pick Up Health-Care Supporters as House Moves Near Critical Vote

Obama Lobbies for Health-Care Bill as Democrats Move Toward Vote Showdown

by on March 19, 2010

By Roger Runningen March 19 (Bloomberg) — President Barack Obama appealed for last-minute support as he and House leaders lobbied for about a half-dozen more votes to push a $940 billion overhaul of the U.S. health-care system through to passage. “If this vote fails, the insurance industry will continue to run amok,” the president said at George Mason University in Fairfax, Virginia. “That’s why they’re doing everything they can to kill this bill.” Obama, making his fourth speech on the subject in two weeks, delivered a campaign-style address to an audience mostly made up of students, a group that he tapped to propel his presidential campaign and now is trying to rally to keep pressure on Congress. “You’ve got to help us finish this fight,” Obama told the crowd. “You’ve got to stand with me just like you did three years ago and make some phone calls and knock on some doors, talk to your parents, talk to your friends. Do not quit.” Heading toward a weekend vote, the White House and Democratic congressional leaders are targeting a group of 14 to 15 undecided lawmakers to get to the 216 votes needed to pass the measure, according to administration officials, who spoke on condition of anonymity because vote-counting was private. Cancelled Trip The stakes are so high for the president that he took the unusual step of postponing, for the second time, a planned five- day trip to Guam, Indonesia and Australia. Instead, he’ll remain at the White House this weekend to lobby wavering lawmakers to support a $940 billion bill that is of “paramount importance” to his presidency, spokesman Robert Gibbs said. Except for the speech, Obama largely cleared his schedule today to make way for legislative courtship, by telephone or in person before a vote that House Speaker Nancy Pelosi said would probably come on March 21. “When we bring the bill to the floor we will have a significant victory for the American people,” Pelosi said today when asked by reporters if House Democratic leaders have the votes to pass the measure. The original House bill passed 220-215 in November. The legislation, on the agenda for the past year, would cover 32 million uninsured Americans, curb medical costs , reduce the federal budget deficit, prohibit insurance companies from dropping coverage during illness and order companies to coverage pre-existing conditions. Republican Opposition Republicans are unified in opposition, saying it imposes new taxes and uses budget gimmicks to mask costs that will appear later in the life of the bill. “They can tweak this thing and tweak it,” House Republican Leader John Boehner of Ohio told reporters yesterday. “Still, it’s a trillion dollars they are going to spend.” Caterpillar Inc ., the world’s largest maker of construction equipment, said today it opposes the legislation because taxes and “new-coverage mandates” would increase company health-care costs by 20 percent, or more than $100 million. “In our fragile economy, we can ill-afford cost increases that place us at a disadvantage versus global competitors that are not similarly burdened,” Gregory S. Folley , vice president and chief of human resources, said in a letter to Pelosi and Boehner. Jim Owens , chairman and chief executive of Peoria, Illinois-based Caterpillar, is a member of Obama’s board of outside economic advisers to lead the nation out of recession. The legislation represents the most significant health-care revamp since the creation of the Medicare program for the elderly in 1965. Americans would benefit from more access to preventive care and young adults could stay on their parents’ insurance until age 26, Democrats said. Insurers such as Indianapolis-based WellPoint Inc. would get millions of new policyholders while being required to accept all customers. Standard & Poor’s 500 Managed-Care Index is up 70 percent over the last year. To contact the reporter on this story: Roger Runningen in Fairfax, Virginia, at rrunningen@bloomberg.net ;

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Obama Lobbies for Health-Care Bill as Democrats Move Toward Vote Showdown

Top GOP Senator: We’re Willing To Wait Out The Clock On Wall Street Reform

March 18, 2010

The top Republican on the Senate Banking Committee said Thursday that he doesn’t expect Republicans on the panel to get much accomplished in shaping the financial reform bill that was unveiled on Monday. The real action, he said, will be on the Senate floor. “Right now, there’s maybe a majority view on the banking committee that, if we could work a substantive bipartisan bill, that we would do that,” Sen. Richard Shelby, an Alabama Republican, told reporters at an American Bankers Association conference in Washington. “Our door is open, maybe not wide open, but it’s open and we’ll keep it open.” Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has indicated he wants his bill to be passed soon. The Obama administration wants a law reining in Wall Street and reforming the nation’s broken financial system by the November election. But Republicans, as well as progressives and academics, have criticized Dodd’s bill for a variety of reasons. So have Democrats in Congress. If unable to get their changes into the bill — chief among them dismantling the proposed consumer-focused agency — Republicans are willing to wait out the clock. “We don’t know what will happen in committee yet, probably not a lot,” Shelby said. “But once it hits the floor, I think we’ll have more options,” he said with a slight chuckle. Yesterday, the ABA’s top lobbyist, Ed Yingling, said that every week that passes gives the Republicans more leverage. The Republicans could gum up the bill once it hits the floor, delaying financial reform altogether. “Another thing to understand is the clock is very important here,” Yingling said. “It’s March. The Congress probably has only 60 more days before they really get into the total election season — 60 more work days.” “And from the Republicans’ point of view, every week that passes is, say, Senator Shelby, more leverage. And a lot of what this is about is leverage to get your best deal. “So it’s in the interest of the Republicans to slow things down because that gives them more leverage to negotiate.” Shelby wowed the crowd of bankers assembled at the ABA summit, receiving several rounds of applause and a standing ovation at the conclusion of a speech in which he assailed Dodd’s bill and re-asserted his belief that the banking sector’s profitability is more important than consumer protection. “Safety and soundness trumps everything,” Shelby said to loud applause. “It trumps the consumer finance whatever.” Shelby’s point was that if banks aren’t profitable, then they won’t be in a position to lend. He then told the crowd that if they wanted to kill the proposed consumer agency, which would protect borrowers from predatory lenders, they should “elect more Republicans to the U.S. Senate.”

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Job Legislation Costing $18 Billion Moves Closer to Passage in U.S. Senate

March 15, 2010

By Brian Faler March 15 (Bloomberg) — An $18 billion jobs plan giving companies a tax break for hiring the unemployed moved closer to becoming law when the U.S. Senate voted to end debate on the measure. Today’s 61-30 vote clears the way for a final vote as soon as tomorrow. Approval would send the bill to President Barack Obama for his signature. The measure would offer companies a holiday from a 6.2 percent Social Security payroll tax for each worker they hire this year who has been unemployed for at least 60 days. Other provisions would expand subsidies for bonds issued by state and local governments, increase highway spending and give small businesses more power to write off the cost of investments. The Senate first approved the legislation last month. The House made a few changes amid complaints the bill violated strengthened budget rules aimed at lowering the federal deficit . The changes require the Senate to pass the proposal a second time. In another effort to boost the economy, the Senate last week approved a $138 billion measure that would extend unemployment benefits and provide additional aid to states. The legislation is pending in the House. To contact the reporter on this story: Brian Faler  in Washington at bfaler@bloomberg.net .

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Dodd’s Wall Street Reform Bill: READ THE BILL

March 15, 2010

Today, Sen. Christopher Dodd will unveil his financial regulatory reform legislation to the Senate Banking Committee. Based on some predictions , the bill may fall short of correcting the Too-Big-To-Fail mentality that led to the financial crisis in the first place. A series of measures to soften the impact of the bill by Republicans and administration officials alike will surely challenge the success of any new legislation. HuffPost contributing editor Simon Johnson writes : The lobbyists did their job a long time ago. Treasury sent up a weak set of proposals – Secretary Geithner apparently felt that to do otherwise would be just to seek “punishment” for past wrongdoings; there is too little concern at the top levels of this administration regarding what comes next. And Senator Dodd was pushed hard by various interests to weaken all potentially sensible proposals – including anything that would bring greater transparency and safety to the derivatives market. The Republicans have also demonstrated their mastery of delaying tactics ; by emphasizing “procedural” issues, they have so far managed to conceal their fundamental opposition to real reform . But what does the bill itself say? The Huffington Post is recruiting a team to read through Dodd’s legislation, identify weak points and highlight important passages. Sign up below.

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Mary Bottari: Progressive Senators Fight for Real Bank Reform

March 13, 2010

Headlines blared that Senate Banking Chair Chris Dodd was done with dithering and ready to move ahead with a financial reform package without Republican support. Financial reform groups should be celebrating this as a positive move that would roll back some of the worst elements of the bill inserted during recent bipartisan negotiations, including the nutty effort to put the Consumer Financial Protection Agency into the Federal Reserve — an institution about as popular as the IRS. Hold the champagne. Reading between the lines, it seems that negotiations are continuing behind the scenes and ranking Republican Senator Richard Shelby (R-AL) says “an agreement is still very possible.” The little spat between Dodd and the Republicans has been beneficial, though, because it flushed out more details about the points of agreement and contention. You can hear the bankers cheering because there appears to be agreement to shrink and defang the best part of the bill, the CFPA. It seems destined for the basement of a failed regulatory body such as the Fed or the Treasury Department. The consumer protection agency was originally intended to be a stand-alone agency with broad authority over banks and nonbanks to crackdown on predatory mortgages, credit card fees, payday lenders and others whose abusive practices capture consumers in an unshakable debt cycle. Not only do the Republicans and the big banks want to put CFPA under the thumb of the bank-friendly Fed, an institution which completely failed to protect consumers from predatory lending in the run up to the financial crisis, they want to strip it of its enforcement authority and shoot it full of exemptions. No agency would be preferable than this type of toothless tiger. Negotiators have failed to break up the too big to fail banks or effectively cap their size. Worse, the draft continues to exempt the most complex derivatives — including foreign currency swaps and credit-default swaps — from the requirement that they be regulated and traded on an open exchange. You remember credit default swaps. They allow parties with no insurable interest in an underlying asset (i.e., your house) take out insurance on whether or not your house will burn down. This of course gives them an incentive to torch the place. These “financial weapons of mass destruction” played a key role in the collapse of AIG and the global economy and are now being used by big American banks to torch Greece . Janet Tavakoli, a respected financial analyst, called upon Congress “to act immediately to abolish credit default swaps on the United States, because these derivatives will foment distortions in global currencies and gold,” a situation that could wreak further havoc on the U.S. economy. If Congress does not close the loopholes in the bill on the derivatives front, the next crisis is assured. Fortunately, a few brave men are willing to put the kaibosh on toothless reform. “I won’t vote for a bill if the banks have control of it,” Sen. Sherrod Brown, (D-OH), told CNN . In remarks on the Senate floor, Sen. Ted Kaufman (D-DE) warned he won’t support “compromise measures that give only the illusion of change and a false sense of accomplishment.” And Independent Senator Bernie Sanders told CNN he would vote no unless the bill includes an independent consumer regulator and tough new restrictions on banks. Sens. Jeff Merkley (D-OR), Carl Levin (D-MI) and others are fighting hard for a real “Volcker Rule” that would reinstate some of the protection for Main Street banks against reckless Wall Street gambling. Dodd has said that he will unveil his new bill on Monday. Take your time Senator. Get it right this time. It is not an exaggeration to say that the future of the world may depend on it.

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Jobless Aid Passed by U.S. Senate, Sending $138 Billion Measure to House

March 10, 2010

By Brian Faler March 10 (Bloomberg) — The U.S. Senate approved a $138 billion measure that would extend unemployment benefits and provide additional aid to states in the second major effort this year by lawmakers to boost the economy. The chamber voted 62-36 to approve the legislation, which would also extend dozens of expiring tax cuts, ease corporate- pension requirements and head off cuts in Medicare reimbursements to doctors. The bill, partially financed by offsetting savings, would add $97 billion to the deficit, according to the Congressional Budget Office. “This has been and continues to be a horrific recession,” said Senator Bob Casey , a Pennsylvania Democrat. “In addition to aiding families who are desperately in need of putting food on their tables and a roof over their heads, an extension of the unemployment insurance has a direct impact on our nation’s economy.” The vote sends the bill to the House. Increased unemployment benefits are one of the best ways of providing short-term stimulus to the economy because the cash-strapped are likely to quickly spend any aid, which boosts overall demand in the economy, according to CBO. The Labor Department today reported the unemployment rate in January climbed in 30 states and decreased in nine. Sixteen states had jobless rates topping the nationwide 9.7 average unemployment rate. Unemployment in California, Florida, Georgia, North and South Carolina and the District of Columbia climbed to the highest levels since records began in 1976. Hiring the Jobless Congress’s earlier effort to help the jobless, an $18 billion plan offering companies a tax break for hiring people who have been unemployed for at least 60 days, is awaiting final approval in the Senate. The bill approved today would extend until Dec. 31 expiring provisions in the law that offer as many as 99 weeks of unemployment checks, along with a 65 percent subsidy to help buy health insurance through the Cobra program. The legislation would prevent millions from exhausting their benefits, though it would not spare all. According to the National Employment Law Project, a half-million Americans may burn through all of their allowable assistance by August. Senator Dick Durbin of Illinois, the chamber’s No. 2 Democrat, said, “We’re trying to give enough time to people on the chance they find something, but we know how hard it is.” “These poor people — I can’t imagine what lies ahead for them,” Durbin said. “In my state, there are not many options out there and they’re all awful; people end up homeless, some of them struggle in soup kitchens and pantries trying to survive.” Aid to States The bill would send $25 billion to states struggling with slack tax revenue to help prevent layoffs of teachers, police officers and other public service employees. It would spend $6 billion to prevent for seven months a 21 percent scheduled cut in Medicare reimbursements. The measure would renew a series of tax breaks for businesses and individuals that expired Dec. 31, including a research credit backed in the past by Microsoft Corp., Amgen Inc. and Boeing Co. It would renew a break that allows companies like General Electric Co. to defer U.S. taxes on profits from financing sales of equipment in overseas markets. For individuals, the bill would renew a deduction for state and local sales taxes that could be used instead of the deduction for state and local income taxes. Some states, including Texas and Florida, don’t have an income tax. Deduction for Teachers It would extend a $250 deduction for teachers who buy their own classroom supplies, as well as tax credits for installing energy-efficient windows, doors and skylights that meet 2010 Energy Star standards. To help offset its cost, the bill would give the Internal Revenue Service more tools to attack tax shelters by more precisely defining when tax-avoidance transactions lack economic substance. It also would prevent paper companies from claiming a tax credit for producing fuel from a byproduct of the pulp-making process known as “black liquor.” The IRS issued a ruling last year that congressional analysts said opened the door for abuses, although companies have expressed little interest in claiming the credit. To contact the reporters on this story: Brian Faler  in Washington at   or bfaler@bloomberg.net ; Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

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Jobless Benefits Measure Clears Hurdle as U.S. Senate Moves Closer to Vote

March 9, 2010

By Brian Faler and Ryan J. Donmoyer March 9 (Bloomberg) — A $138 billion plan to extend unemployment benefits through the rest of this year cleared a procedural hurdle in the U.S. Senate as lawmakers moved closer to putting the measure to a final vote. Eight Republicans joined all but one Democrat in a 66-34 vote to advance the measure. A final Senate vote is likely tomorrow; the bill also needs House approval. The bill would provide $25 billion to help states balance their budgets, prevent a 21 percent cut in Medicare reimbursements and temporarily ease corporate pension-funding requirements. The legislation, partly financed by offsetting savings, would add $97 billion to the deficit, according to the nonpartisan Congressional Budget Office. The plan hasn’t drawn the same Republican opposition as a 30-day extension of unemployment benefits approved earlier this month, in part because Democrats included in it a series of tax cuts backed by Republicans. White House spokesman Robert Gibbs called today’s Senate vote “one more step forward” to put “people back to work and support families that have been the hardest hit by the economic crisis.” Gibbs said President Barack Obama is “grateful to members of both parties that helped move forward on this bill.” Senator Jim Webb , a Virginia Democrat who proposed an amendment that would impose a 50 percent tax on bonuses awarded last year to Wall Street executives, said his plan is unlikely to receive a vote. “It’s looking a little grim,” Webb said. Second Effort The legislation represents Democrats’ second major effort this year to boost the economy. A separate $18 billion plan to offer companies a tax break to hire the jobless is awaiting a final Senate vote. The bill debated today would prevent millions from exhausting their unemployment benefits this year, including a 65 percent subsidy to help the jobless buy health insurance. Fifteen million Americans were unemployed last month with 40.9 percent of them out of work for at least six months, the second highest share in more than 50 years. Forty-one percent were out of work that long in January. The measure would renew a series of tax breaks for businesses and individuals that expired Dec. 31, including a research credit backed in the past by Microsoft Corp., Amgen Inc. and Boeing Co. It would renew a break that would allow companies like General Electric Co. to defer U.S. taxes on profits from financing sales of equipment in overseas markets. Sales Taxes For individuals, the bill would renew a deduction for state and local sales taxes that could be used instead of the deduction for state and local income taxes. Some states, including Texas and Florida, don’t have an income tax. It would extend a $250 deduction for teachers who buy their own classroom supplies, and tax credits for installing energy-efficient windows, doors, and skylights that meet 2010 Energy Star standards . To help offset its cost, the bill would give the Internal Revenue Service more tools to attack tax shelters by more precisely defining when tax-avoidance transactions lack economic substance. It also would prevent paper companies from claiming a tax credit for producing fuel from a byproduct of the pulp-making process known as “black liquor.” The IRS issued a ruling last year that congressional analysts said opened the door for abuses, although companies have expressed little interest in claiming the credit. To contact the reporters on this story: Brian Faler  in Washington at   or bfaler@bloomberg.net ; Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

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Corker Pushes `Surgical’ Senate Financial-Overhaul Bill, Sees Amendments

March 9, 2010

By Phil Mattingly March 9 (Bloomberg) — Senator Bob Corker , the Republican leading Banking Committee negotiations on legislation to overhaul financial rules, said the bill will be “surgical” and probably amended in committee and on the floor. “I don’t think we ought to try and pass legislation that solves all the problems in the world,” Corker said today during a CNBC Television interview. “There will be other legislation that comes down the road.” Banking Committee Chairman Christopher Dodd , a Connecticut Democrat, has negotiated with Corker for the past month on legislation to rewrite rules and end future taxpayer bank bailouts after the near-collapse of the financial system in 2008. The House passed its overhaul bill in December. “The goal is to have a bill that’s presented to committee that’s close enough to the middle of the road, in balance, that people can offer substantive amendments,” Corker said. Corker said the bill will have a “strong resolution piece” to wind-down systemically risky firms, avoiding bailouts for firms such as Bear Stearns Cos. and American International Group Inc. deemed “too big to fail” in 2008. Negotiators reached “an appropriate balance” on the consumer protection aspects in the bill, Corker said, without offering details on the compromise to remove the main sticking point in negotiations. To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net .

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Senate Democrats’ $150 Billion Plan Would Reinstate U.S. Jobless Benefits

March 2, 2010

By Brian Faler March 2 (Bloomberg) — Senate Democrats are proposing to reinstate unemployment benefits that expired Feb. 28 as part of a $150 billion measure intended to boost the economy. The legislation would spend $81 billion to extend the unemployment benefits, including so-called Cobra subsidies to help the jobless buy health insurance, for the rest of this year. It also would send $25 billion to state governments to help prevent layoffs. Jobless benefits for thousands of Americans expired after Senator Jim Bunning , a Kentucky Republican, blocked a one-month continuation designed to keep checks from being interrupted. Bunning complained that the $10 billion cost would be tacked onto the $1.6 trillion budget deficit. “I am exercising my right as a senator duly elected from Kentucky to object,” Bunning said yesterday as Democrats tried again to pass the short-term extension. About 400,000 people will lose unemployment benefits in the next few weeks if Congress doesn’t act, according to the Department of Labor. The agency also estimated that 500,000 Americans will lose access to Cobra by the end of this month. The program allows the jobless to buy health insurance through their former employer, with the government paying 65 percent of the cost. The Transportation Department said it was putting 2,000 employees on furlough because highway money included in the legislation blocked by Bunning was being delayed. ‘Spend It Quickly’ Senate Finance Chairman Max Baucus , a Montana Democrat, said the need for the bill was “urgent” and that it would “put cash in the hands of Americans who could spend it quickly, boosting economic demand.” It would provide unemployment benefits retroactively to March 1. The Senate aims to send the bill to the House for approval this week or next. The measure includes provisions unrelated to job creation, including a $7 billion plan to prevent, for seven months, a 21 percent scheduled cut in Medicare reimbursements to doctors. The bill would also extend a package of miscellaneous tax cuts, including a $1-per-gallon tax credit for biodiesel fuel and a $6.6 billion credit promoting corporate research and development programs. It would also temporarily ease corporate pension-funding requirements. The bill revives a number of provisions Senate Majority Leader Harry Reid , a Nevada Democrat, dropped last month from an $85 billion jobs plan created by Baucus and his committee’s ranking Republican, Senator Charles Grassley of Iowa. $15 Billion Jobs Plan Reid, who said their bill included too many provisions unrelated to creating jobs, instead put a scaled-back $15 billion plan before senators that was approved last month. House Majority Leader Steny Hoyer , a Maryland Democrat, said he hopes his chamber will pass that bill this week. The measure would offer companies a tax break for hiring new workers. “I think we all would see that as round one of what we would expect to be a series of bills on jobs,” said Representative Chris Van Hollen , a Maryland Democrat, in a conference call with reporters. To contact the reporter on this story: Brian Faler  in Washington at   or bfaler@bloomberg.net .

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Vote on Measure to Combat Joblessness Scheduled for Today in U.S. Senate

February 24, 2010

By Brian Faler Feb. 24 (Bloomberg) — The U.S. Senate plans to vote today on a $15 billion bill to fight joblessness that gives companies a tax break for hiring people who have been out of work at least 60 days. Senate Majority Leader Harry Reid , a Nevada Democrat, had hoped the chamber could complete action on the measure last night after a handful of Republicans, including Scott Brown of Massachusetts, joined Democrats in a Feb. 22 vote to end Republican stalling tactics. Republican Senate leaders objected to Reid’s efforts, prompting him to schedule final votes on the bill today. Passage of the bill will send it to the House, where Democratic leaders could seek a vote on it without changes or attempt to merge it with a $150 billion jobs plan the House passed in December. House Majority Leader Steny Hoyer , a Maryland Democrat, said lawmakers in the chamber haven’t decided which route to pursue. The Senate bill’s centerpiece is a $13 billion plan to fight unemployment by offering companies a one-year holiday from paying a 6.2 percent Social Security payroll tax for each worker they hire who has been jobless for at least 60 days. Democrats previously rejected the payroll tax idea as part of an economic stimulus package passed last February. Senator Charles Schumer , a New York Democrat and one of the chief sponsors of the tax provision, said it makes more sense now that the U.S. economy is growing. ‘Business Sense’ “Obviously employers decide to hire workers when it makes business sense” and “no tax incentive, if your sales are declining, is going to encourage you to hire somebody,” he said. “But we’re finding that at this stage of the nascent, incipient and all-too-small recovery that many businesses, large and small, are finding orders beginning to rise.” Schumer said, “It is those businesses that our tax credit is aimed at — this proposal may give them the push they need to add a few workers or hire them a few months sooner than they otherwise might. Either would be a good thing.” The plan would save or create as many as 234,000 jobs, according to the Congressional Budget Office. Other provisions in the bill would expand aid to state governments by expanding federal subsidies for bonds they issue to pay for construction projects, allow small businesses to immediately write off more of the cost of equipment purchases and expand infrastructure spending. The cost to the Treasury would be offset in part by cracking down on offshore tax evasion. Supermajority Lost Democrats, who lost their 60-vote supermajority with Brown’s election last month, were able to bring the legislation to a final vote after he and four other Republicans broke with their party leaders on the Feb. 22 procedural vote . Senate Minority Leader Mitch McConnell , a Kentucky Republican, had demanded a chance to make additional changes to the plan, including adding more tax cuts. Asked yesterday if we was unhappy with Brown, McConnell said his party “represents all parts of the country, different points of view — we don’t expect our members to be in lockstep on every single issue and we’re happy to have him here.” Reid said lawmakers will soon take up legislation extending unemployment benefits, including Cobra subsidies to help the jobless buy health insurance, as well as additional aid to state governments struggling with slack tax revenue. To contact the reporter on this story: Brian Faler  in Washington at   or bfaler@bloomberg.net .

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Vote on Measure to Combat Joblessness Scheduled for Today in U.S. Senate

February 24, 2010

By Brian Faler Feb. 24 (Bloomberg) — The U.S. Senate plans to vote today on a $15 billion bill to fight joblessness that gives companies a tax break for hiring people who have been out of work at least 60 days. Senate Majority Leader Harry Reid , a Nevada Democrat, had hoped the chamber could complete action on the measure last night after a handful of Republicans, including Scott Brown of Massachusetts, joined Democrats in a Feb. 22 vote to end Republican stalling tactics. Republican Senate leaders objected to Reid’s efforts, prompting him to schedule final votes on the bill today. Passage of the bill will send it to the House, where Democratic leaders could seek a vote on it without changes or attempt to merge it with a $150 billion jobs plan the House passed in December. House Majority Leader Steny Hoyer , a Maryland Democrat, said lawmakers in the chamber haven’t decided which route to pursue. The Senate bill’s centerpiece is a $13 billion plan to fight unemployment by offering companies a one-year holiday from paying a 6.2 percent Social Security payroll tax for each worker they hire who has been jobless for at least 60 days. Democrats previously rejected the payroll tax idea as part of an economic stimulus package passed last February. Senator Charles Schumer , a New York Democrat and one of the chief sponsors of the tax provision, said it makes more sense now that the U.S. economy is growing. ‘Business Sense’ “Obviously employers decide to hire workers when it makes business sense” and “no tax incentive, if your sales are declining, is going to encourage you to hire somebody,” he said. “But we’re finding that at this stage of the nascent, incipient and all-too-small recovery that many businesses, large and small, are finding orders beginning to rise.” Schumer said, “It is those businesses that our tax credit is aimed at — this proposal may give them the push they need to add a few workers or hire them a few months sooner than they otherwise might. Either would be a good thing.” The plan would save or create as many as 234,000 jobs, according to the Congressional Budget Office. Other provisions in the bill would expand aid to state governments by expanding federal subsidies for bonds they issue to pay for construction projects, allow small businesses to immediately write off more of the cost of equipment purchases and expand infrastructure spending. The cost to the Treasury would be offset in part by cracking down on offshore tax evasion. Supermajority Lost Democrats, who lost their 60-vote supermajority with Brown’s election last month, were able to bring the legislation to a final vote after he and four other Republicans broke with their party leaders on the Feb. 22 procedural vote . Senate Minority Leader Mitch McConnell , a Kentucky Republican, had demanded a chance to make additional changes to the plan, including adding more tax cuts. Asked yesterday if we was unhappy with Brown, McConnell said his party “represents all parts of the country, different points of view — we don’t expect our members to be in lockstep on every single issue and we’re happy to have him here.” Reid said lawmakers will soon take up legislation extending unemployment benefits, including Cobra subsidies to help the jobless buy health insurance, as well as additional aid to state governments struggling with slack tax revenue. To contact the reporter on this story: Brian Faler  in Washington at   or bfaler@bloomberg.net .

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Stimulus Tab of $41,800 Waits for Wall Streeters: Kevin Hassett

February 22, 2010

Commentary by Kevin Hassett Feb. 22 (Bloomberg) — While President Barack Obama goes on about the success of his economic stimulus, the latest policy developments suggest Democrats are finally backing away from his radical Keynesianism. Even Democrats, it seems, have concluded that the stimulus of 2009 was a big waste of money, and that better approaches exist that can do more and cost less. The truth is, economic stimulus is like a very expensive box of chocolates. You get a sugar high, and a caffeine rush, but when the chocolates are gone, you have nothing but fat to show for it. You are worse off than you were before and still need to find real nutrition. According to the latest estimate by the Congressional Budget Office, the U.S. stimulus sugar high will cost $862 billion by 2019. The excessively optimistic administration estimate is that the stimulus created 2 million jobs last year. If we take that high number at face value — there are plenty of reasons not to — and given that roughly one-quarter of the stimulus funds have been exhausted, then each job has cost about $100,000. To put that in perspective, if instead the government had used the stimulus to hire individuals at the going median wage of $37,115, it could have created more than 23 million new jobs. So much for the supposed Keynesian multiplier effect. From now on, it should be called the Keynesian divisor. Paying the Bill Ultimately, American taxpayers are going to have to pay the bill for the stimulus, and it is a steep one. For the average taxpayer, the bill is $7,798. Of course, the final bill will not be spread evenly across taxpayers, because the rich pay a disproportionate share. Assume the burden is distributed the same as the current income tax. If your income is between $40,000 and $50,000, you will pay about $2,600 for the stimulus. If your income is between $75,000 and $100,000, you will pay $6,500. If you are lucky enough to have an income of between $200,000 and $500,000, your bill will be $41,800. Small wonder that Democrats are so unpopular right now, and that they are looking for a better way. A New York Times/CBS News Poll this month found that only 6 percent of Americans believe that the year-old stimulus package has created any jobs. (A remarkably patient 41 percent said it hasn’t created jobs, but still will.) Meantime, policy makers are still looking at a catastrophically bad labor market that needs all the help it can get. Brown’s Message The message of Republican Senator Scott Brown’s victory in Massachusetts is clear: Voters don’t want to waste our last pennies on another expensive sugar high. They are crying out for bipartisan support for fixes that work, at a reasonable price. The good news is that even Democrats now recognize this. There has been progress behind the scenes looking for sensible alternatives to expense-account Keynesianism. A middle-of-the- road consensus is beginning to form around pragmatic approaches to the jobs crisis that cost a lot less and carry a big bang for the buck. My favorite example is a little-known program folded into last year’s stimulus package that is targeted for a big expansion because it actually has worked. It is based on the observation that it is cheaper to create jobs directly. The Emergency Contingency Fund , amended to the federal program called Temporary Assistance for Needy Families, provides funding for states to temporarily cover a portion of workers’ wages in both public and private jobs. The federal program reimburses states 80 cents for each additional dollar they spend getting a person back to work. Over time, as the worker’s reattachment to the labor force becomes stronger, the federal money is taken away. Private Is Best As many as 29 states have or are developing employment programs funded through this program, and some estimates show as many as 120,000 subsidized jobs could be created, at a cost of only $10,000 to $20,000 each. At that rate, the government could create 2 million jobs — the amount Obama asserts were created by the stimulus — for somewhere in the range of $30 billion. And the best part is that many of these jobs will likely be in the private sector. A strong sign of how much things have changed for the better is the focus of House Democrats on this limited but powerful measure. A bill sponsored by representatives Jim McDermott of Washington and Judy Chu of California would make funds available for an additional year. Given the state of the labor market, it is hard to imagine how any sensible person could oppose such a move. It is a shame that such common sense was absent last year. If they are to be more than the party of no, Republicans need to rally around the Democrats who have shown such reserved pragmatism. While they do, Obama can continue to crow about his amazing stimulus, but fewer and fewer people will notice. ( Kevin Hassett , director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Kevin Hassett at khassett@bloomberg.net

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Icesave Floating-Rate Offer Said to Be Planned to End Dispute on Loan Term

February 19, 2010

By Jurjen van de Pol and Tasneem Brogger Feb. 19 (Bloomberg) — The Netherlands and the U.K. are making a new offer to end a dispute with Iceland over the terms of a loan the Atlantic island took to settle depositor claims from the two countries, government officials familiar with the negotiations said. One option is a floating interest rate instead of the 5.5 percent rate attached to the $5.3 billion loan when the agreement was made in October. An interest-rate holiday may also be considered, according to the officials who declined to be identified because the proposals have not been made public. Icelandic Finance Ministry spokesman Elias J. Gudjonsson said the country hasn’t received any new offers yet, though “we’ve heard that an offer is under way.” The new rate will make it cheaper for Iceland to repay a loan granted to cover deposits at failed Landsbanki Islands hf’s Icesave Internet bank. Icelandic officials have been trying to restore relations with the British and the Dutch after President Olafur R. Grimsson blocked a bill intended to compensate the two countries. That rejection means the legislation will be put to a March 6 referendum, which most polls show Icelanders will block. The bill’s suspension prompted Fitch Ratings to cut Iceland’s credit grade to junk and Standard & Poor’s has said it may do the same. Prime Minister Johanna Sigurdardottir has signaled her government wants to renegotiate the bill before it’s put to a vote. Lawmakers want to renegotiate the interest rate charged on the $5.5 billion loan, Sigurdardottir has said. Members of the parliament said the 5.5 percent interest rate Iceland had committed to is too high, she said. Loan Question The suspension of the Icesave bill, named after the high- yielding Internet accounts offered by failed Landsbanki , has put in question the continuation of Iceland’s $4.6 billion International Monetary Fund -led loan. While the IMF has said continued disbursement of its $2.1 billion portion of the emergency loan isn’t linked to Icesave, the fund can’t provide installments without financing from contributing nations. Nordic countries that are providing $2.5 billion have indicated they want Icesave resolved before they resume payment. Grimsson’s Jan. 5 rejection of the bill sent credit default swaps on the island’s debt to the highest level since May, signaling a perceived increase in the risk of default. The CDS spread on five-year debt was at 566.92 yesterday, according to Bloomberg data. To contact the reporter responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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Bill To Move New Mexico’s Money Tripped Up In State Senate

February 19, 2010

The New Mexico legislature adjourned for the year on Tuesday without acting on a bill that would give preference to community banks and credit unions in bidding for contracts to handle state money. The bill, sponsored by Rep. Brian Egolf (D-Santa Fe), was inspired directly by the Move Your Money campaign. Egolf estimates that the bill could potentially take more than a billion dollars away from Bank of America and Wells Fargo. The bill had a lot of momentum : It passed the New Mexico House unanimously, and it had cleared two Senate committees and reached the floor this week but time ran out before it could see a vote. The state’s constitution requires the legislature to adjourn at noon on the 30th day of its legislative session, which was Thursday. “I’m a little sad,” said Egolf in an interview with HuffPost on Friday. “It sailed through everything and got to the floor and I think it just got caught up, honestly, in politics between the House and the Senate.” The Senate was set to take up the bill on Thursday, but Senate Republicans spent the dwindling hours of the session filibustering a bill that would have allowed judges to put first-time drug offenders in treatment programs instead of prison. “They ran the clock out at the very end with a filibuster,” said Senate majority spokesman and policy analyst Gerald Gonzalez in an interview with HuffPost. Jerry Walker, a lobbyist for the Independent Community Bankers Association in New Mexico, told HuffPost that he was not aware of any lobbying against the bill. Walker lobbied hard in support. “Things just kinda went to pot,” he said. “Our legislature just has a habit of melting down on the last day.” The legislature also failed to pass a budget, forcing Gov. Bill Richardson to call a special session for next week. Walker said he does not plan to lobby the governor’s office in support of putting the bill on the agenda for next week. He’ll wait till next year. Egolf doesn’t want to wait a year. He said he is considering whether he’ll try to bring it up during the special session. (Egolf said Richardson supports the bill, but Richardson’s office has not responded to several requests for comment.) “I’m not closing the door on it,” said Egolf. “I want to think through whether it makes sense to go forward. I would obviously love to do it. I’m still new in this whole thing and I’m so disappointed that I want to do it now. I don’t want to wait a year. I need to think it through while I’m not so upset about the whole thing.”

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Lloyd Chapman: Obama Continues to Ignore Small Business Contracting Abuses

February 4, 2010

In February of 2008, then Senator and Presidential candidate Barack Obama promised to, “end the diversion of federal small business contracts to corporate giants.” Yet to date President Obama has failed to honor that promise in the face of double-digit unemployment and current legislation in Congress that would solve the problem. http://www.barackobama.com/2008/02/26/the_american_small_business_le.php President Obama’s statement was in response to a series of federal investigations which found rampant abuses in federal small business contracting programs. Since 2003, twenty-five federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to Fortune 500 corporations and other clearly large firms. Since taking office, Obama officials have given small business contracts to firms like Xerox, General Dynamics, Boeing, Lockheed Martin, Raytheon, and Northrop Grumman. http://www.asbl.com/documents/20091202Xerox_Created_20091002.pdf http://www.asbl.com/documents/20091202GeneralDynamics_Created_20091027.pdf To date, President Obama has refused to propose any legislation or policy to honor that promise. As a result, the diversion of federal small business contracts to large corporations has continued. The only legislation that has been introduced into Congress that would address the abuses is H.R. 2568, the Fairness and Transparency in Contracting Act. H.R. 2568 would immediately stop the diversion of federal small business contracts to corporate giants, and redirect billions of dollars in federal infrastructure funds to small businesses in the middle class economy. Congressman Hank Johnson (D-4-GA) introduced the bill in May of 2009. To date the bill has 20 co-sponsors. In a statement released Thursday, U.S. Senate Committee on Small Business and Entrepreneurship Chair, Mary L. Landrieu, (D-LA) said, “Government contracts are perhaps one of the easiest and most inexpensive ways the government can help immediately increase sales for America’s entrepreneurs, giving them the tools they need to keep our economy strong and create jobs. By increasing contracts to small businesses by just 1 percent, we can create more than 100,000 new jobs – and today, we need those jobs more than ever.” http://sbc.senate.gov/public/index.cfm?a=Files.Serve&File_id=bc065833-dafc-46c5-9e6f-21209a532de2 The ASBL estimates that if President Obama issued an executive order directing federal agencies and prime contractors to halt the diversion of federal small business contracts to Fortune 500 firms and other large businesses, or pass H.R. 2568, it would increase the annual volume of contracts flowing to small businesses by well over 50 percent.

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Obama Backs Cadillac Tax as Pelosi Faces Democratic Discord on Health Bill

January 7, 2010

By Laura Litvan and Kristin Jensen Jan. 7 (Bloomberg) — President Barack Obama is pushing U.S. House Democrats to drop their opposition to a tax on high- end insurance plans as lawmakers try to craft a final health- care measure by early next month, a Democratic aide said. The president expressed a preference for a Senate proposal to tax so-called Cadillac plans in a meeting yesterday with House Speaker Nancy Pelosi and top party lawmakers, the aide said. The White House meeting came on the eve of a conference call Pelosi plans for noon today with her chamber’s Democrats. Pelosi is facing resistance as she tries to resolve differences in House and Senate bills that would mark the biggest changes to U.S. health policy in 45 years. The Cadillac tax is opposed by labor unions, which are among the party’s strongest backers, and 190 House Democrats. “I realize the White House has a timeline they want to meet here, but particularly on the tax issue, there is great potential for blowback,” said Representative Joe Courtney , a Connecticut Democrat who’s helping lead opposition to the tax. How to pay for the 10-year legislation, whose price tag topped $1 trillion in the House, may be the biggest fight in coming days. The Senate would impose a 40 percent tax on the high-end, employer-provided insurance plans; the House wants a 5.4 percent surtax on couples earning at least $1 million. ‘Stand Tough’ House Democrats say they will also push for a new government insurance program and greater subsidies to help millions of lower-income Americans buy policies. That may mean missing Obama’s push for completion before his State of the Union address, they said. “If we rush, the Senate will get most of its bad work implemented into law, and I don’t think we should allow that to happen,” said Oregon Representative Peter DeFazio . “We should stand tough on some of these issues.” With virtually no Republican support for the bill, Pelosi is depending on Democrats to stick together. Both the House and Senate would create online insurance-purchasing exchanges, expand the Medicaid program for the poor and attempt to curb medical costs . The Senate approved its bill on Dec. 24 with the support of all 58 Democrats and two independents, the exact number needed to overcome Republican delaying tactics. Senate Democrats said that razor-thin vote gives them the upper hand. Pelosi’s Margin “It’s going to have to be very close to the Senate package or you can see we won’t get 60 votes,” North Dakota Senator Kent Conrad said in a Bloomberg Television interview. Still, Pelosi won her Nov. 7 vote with just 220 of the House’s 435 votes, so she can’t afford to lose many members. Virginia Representative Eric Cantor , the No. 2 House Republican, said in a memo that he’s identified 37 House Democrats who might be persuaded to vote against the bill. Top Democrats may ask House members to give up the most if the Senate legislation dominates. Among other things, the Congressional Progressive Caucus, a group of more than 80 lawmakers, would probably lose its fight for the so-called public option to compete with private insurers such as Indianapolis-based WellPoint Inc. “There are components of the House version that must not be dismissed,” Arizona Democrat Raul Grijalva , a caucus leader, said in a Dec. 22 statement . Grijalva said he’d also push for a mandate that employers offer insurance. Antitrust Exemption DeFazio wants a House-approved repeal of the insurance industry’s antitrust exemption. Senate leaders kept the exemption to win over Democrat Ben Nelson of Nebraska and Independent Joe Lieberman of Connecticut. House leaders said they may accept a Senate plan to increase Medicare payroll taxes on high earners. The Senate bill would impose an additional 0.9 percent Medicare tax on individuals who make more than $200,000 a year and on couples earning more than $250,000. Abortion is also a major issue, as Nelson and other lawmakers seek to ensure federal subsidies to help buy insurance don’t pay for the procedure. In the House, dozens of abortion-rights supporters voted for the bill after an amendment from Michigan Democrat Bart Stupak while saying they wouldn’t support final legislation with the same language because it might discourage insurers from covering abortions. Some are concerned about a Senate compromise Nelson worked out. Meeting With Obama Democratic negotiators have to find a way to appease both liberals and Stupak, who got 63 other Democrats to support his plan and said the Senate language won’t work. Obama also pushed congressional leaders to come up with stronger subsidy provisions than those in the Senate bill, a House Democratic aide said after a Jan. 5 White House meeting. The House bill includes $602 billion in affordability credits, compared with $436 billion in tax credits in the Senate plan, according to a comparison provided by House staff. Lawmakers seeking more changes got ammunition from California Governor Arnold Schwarzenegger , who previously supported an overhaul of the health system. “It is not reform to push more costs onto states that are already struggling,” Schwarzenegger said yesterday. “Health- care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes.” To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

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Iceland President Delays Decision on Law to Reimburse Foreign Depositors

January 3, 2010

By Omar R. Valdimarsson and Tasneem Brogger Jan. 3 (Bloomberg) — Iceland’s President Olafur R. Grimsson is delaying his decision on a U.K. and Dutch depositor accord that lawmakers passed last week, as he weighs voter opposition to the bill against the prospect of souring international relations. “There hasn’t been any decision as to when the president will announce his decision,” said Arni Sigurjonsson , Grimsson’s deputy chief of staff, in a telephone interview. “He will look into this matter today. There’s nothing to say about this issue at the moment, the cards are being looked at.” More than 60,000 of Iceland’s 320,000 inhabitants signed a petition handed to Grimsson yesterday urging him to veto the legislation. A presidential rejection of the so-called Icesave accord would mean lawmakers must either drop the bill or put the matter to a referendum. “If the president doesn’t make any comments today then I believe” Prime Minister Johanna Sigurdardottir “will contact him tonight and urge him to complete the matter, one way or another,” Bjorn Valur Gislason , deputy chairman of the budget committee and a lawmaker in the ruling Left Green Party, said in a telephone interview. “We need the matter to be resolved before the markets open again.” The legislation, which polls show about 70 percent of the population opposes, obliges Iceland to use borrowed funds from the U.K. and Netherlands to cover depositor claims from the two countries after the failure of Landsbanki Islands hf more than a year ago. The absence of clear cross-border regulatory rules on depositor insurance has allowed settlement of the claims to drag on and left Icelandic taxpayers disgruntled over having to pay for the failure of a private bank. ‘End of Government’ The government, which has been working for the past year to rebuild the island’s financial system, said last month it completed a bank recapitalization plan after creditors accepted settlements. Iceland’s three biggest lenders collapsed in October 2008, leaving about $80 billion in outstanding claims. “If the president doesn’t ratify the bill it will mean the end of this government,” Gislason said. The parliament voted 33 to 30 to allow the government to provide a state guarantee for the U.K. and Dutch loans to cover the Icesave claims. Thousands of British and Dutch depositors risked losing their savings when Landsbanki collapsed along with the rest of Iceland’s over-leveraged banking system. By passing the bill, lawmakers hoped to pave the way for unlocking further disbursements from a $4.6 billion bailout from the International Monetary Fund and Nordic countries. Bill Details The bill would allow Iceland’s government to guarantee repayments of as much as 2.35 billion pounds ($3.8 billion) borrowed from the U.K. and 1.2 billion euros ($1.7 billion) borrowed from the Netherlands to repay depositors in the so- called Icesave Internet accounts. A tentative agreement on repaying the depositor claims and a state guarantee attached to them was reached on June 6. The agreement had to be ratified by Iceland’s parliament which attached conditions to the state guarantee. Parliament’s conditions linked repayments to economic growth, preserved the island’s right to legally challenge its payment obligation, and called for a full suspension in repayments in 2024. Some of the conditions were rejected by the U.K. and the Netherlands, sending the three nations back to the negotiating table. Rating Outlook The failure of Landsbanki, Glitnir Bank hf and Kaupthing Bank hf led to the collapse of the currency and forced Iceland to go to the IMF to get a $2.1 billion loan, with a further $2.5 billion pledged by Nordic nations. Standard & Poor’s on Dec. 31 raised its outlook on Iceland’s BBB- rating to stable from negative and said parliament’s ratification of the depositor bill is a step “that will contribute significantly to securing crucial external financing throughout 2010.” To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

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Financial Reform Bill: Bankers Get $4 Trillion Gift From Barney Frank: David Reilly

December 30, 2009

The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt. If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.

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Anti-Union Efforts Intensify at Target, U.S. Companies as Obama Bill Looms

December 29, 2009

By Holly Rosenkrantz Dec. 29 (Bloomberg) — Target Corp. retooled a training video to warn workers against a bill that would make union organizing easier. Michaels Stores Inc. told investors “our businesses could be impacted” by the measure. Enrollment in Jackson Lewis LLP’s “How to Stay Union-Free” seminars tripled. Companies are rallying to fend off a so-called card-check law sought by labor leaders and backed by President Barack Obama . While the bill stalled in Congress this year as health- care legislation dominated debate, anti-union groups say they expect the president and Democrats to deliver next year on a compromise version of the legislation. “As we approach the 2010 elections, the unions are really going to want their pound of flesh,” said Randy Johnson , who handles labor issues for the U.S. Chamber of Commerce , the nation’s largest business lobbying group. “Even if we defeat the card-check bill, it’s entirely possible that other changes to the National Labor Relations Act will come up, and some of those will likely make it easier to organize the workplace.” Companies have added anti-union videos to training programs, required employees to sit through anti-union meetings and hired outside labor-relations consultants as a pre-emptive strike against a union organizing campaign. “The whole culture that currently allows us to be a low- cost producer while paying top wages would probably be destroyed” by the legislation, Craig Milum, president of Milum Textile Services, a Phoenix-based linen supplier, said in an interview. Paying Weekly Dues “You may be paying weekly dues for something you don’t want” if the union-organizing measure passes, the company says in an anti-union video introduced in September for its 45,000 employees. Among customers of closely held Milum Textile are Darden Restaurants Inc. , Harrah’s Entertainment Inc. and Waste Management Inc. , according to Craig Milum. Leaders of unions that spent a record $450 million electing Obama and congressional Democrats in 2008 had promised members that the legislation easing organizing would be passed in 2009. Andy Stern , president of the 2.1 million-member Service Employees International Union, said in an interview this month that he now expects Congress to take up the bill in the first quarter of 2010. Stern was the most frequent visitor to the White House during Obama’s first six months in office, according to a log released by the administration in October. The Washington-based Chamber of Commerce and other trade associations have poured millions of dollars into efforts to kill the legislation. Dropping Namesake Provision To get enough votes in Congress, supporters of the card- check bill have agreed to drop the provision that gave the measure its name: a requirement that companies grant union recognition as soon as a majority of employees at a workplace sign cards saying they want a union. A compromise version backed by labor leaders calls for a secret-ballot election a week or two after workers petition for a union. The bill also calls for binding arbitration if companies fail to reach a contract with a new union after a certain period of time. Minneapolis-based Target, the second-biggest U.S. discount retailer, updated its anti-union video for employee training to explain the consequences of the bill, company spokeswoman Donna Egan said in an e-mailed statement. “If proposed labor relations legislation is adopted, allowing third-party involvement or interruptions to our business, our business could be impacted,” Michaels Stores of Irving, Texas, the world’s largest arts-and-crafts retailer, said in its earnings filing this month. Research on Unions Registration for Jackson Lewis’s $595 “How to Stay Union- Free” seminars has increased to about 100 executives a session, according to Michael Lotito , a partner in San Francisco with the New York-based law firm. Jackson Lewis also has done research for companies on unions that could come to their workplaces if there is a change in labor law. “We look at their financial reports, strike records, and what the leadership of the organization is all about,” Lotito said. Exploiting business fears of card-check has become a profitable pursuit, said Pat O’Neill, organizing director for the United Food and Commercial Workers. “There is one stimulus plan that has worked this year, and that’s union avoidance,” O’Neill said in an interview. “The law firms that do union-busting have put the fear of Armageddon out there with this bill.” O’Neill said unions have received calls from workers at CVS Caremark Corp ., Ikea and Target about “captive audience” meetings with an anti-union theme at stores where no organizing is going on. ‘Over the Top’ “They try to scare the hell out of them, and it’s over the top,” O’Neill said. CVS Caremark’s policy is to “communicate with our employees on an ongoing basis on a variety of issues,” Carolyn Castel , a spokeswoman for the biggest U.S. drugstore chain, said in an e-mailed statement. “We are constantly engaging our co-workers about unions,” said Mona Liss , a spokeswoman for Ikea, the world’s biggest home-furnishings retailer. The card-check legislation may be incorporated early next year into legislation in the Senate to create jobs, according to Steve Rosenthal , a Democratic consultant and former political director at the AFL-CIO, the nation’s largest labor organization. “Going into the 2010 election, when unions are critical to turnout, the Democrats need to do this to energize the labor movement and kick it into high gear,” Rosenthal said in an interview. “Something’s going to pass.” To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net .

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Icelandic Lawmakers Threaten to Reject Icesave Bill Again, Risking Rating

December 21, 2009

By Omar R. Valdimarsson Dec. 21 (Bloomberg) — Iceland’s parliament may reject a foreign depositor bill for a second time in a move that would sour relations with the U.K. and Netherlands and that Fitch Ratings has signaled will weaken the sovereign’s credit grade. “It’s difficult to think through what will happen if Iceland doesn’t pass the Icesave agreement,” Economic Affairs Minister Gylfi Magnusson said in a Dec. 18 telephone interview. The depositor accord, which polls show almost 70 percent of Icelanders oppose, is the last milestone the government must reach to repair international relations. Settling claims stemming from Icesave, as the deposit accounts were known, is “key to everything else” and needs to be “resolved pretty shortly,” Fitch senior analyst Paul Rawkins said in an Oct. 21 interview. Fitch ranks Iceland BBB-, one notch above junk. All 28 opposition lawmakers in the 63-seat parliament will try to block a bill that obliges Iceland to cover the depositor claims using borrowed funds from the U.K. and Netherlands, party leaders told Bloomberg. Thrainn Bertelsson , an independent member of parliament who used to be in the opposition, said in an interview he can’t guarantee he will support the bill. In the government, Left Green lawmaker Lilja Mosesdottir, who sided with the opposition in an earlier vote, said in an interview she remains “skeptical.” Left Green lawmaker Ogmundur Jonasson declined to say he won’t reject the legislation a second time and fellow Left Green lawmakers Atli Gislason and Asmundur Einar Dadason indicated to local media they may reject the second bill after it was presented to parliament on Oct. 22. The third and final debate will take place before the New Year, Deputy Chairman of the budget committee Bjorn Valur Gislason said in a Dec. 17 interview. Anti-Icesave Petition “Failure to pass the agreement will delay the resurrection of the economy and stall any progress in Iceland’s international relations,” Magnusson said. “It would also delay Iceland’s access to international financial markets.” Moody’s Investors Service rates Iceland’s debt Baa3, and Standard & Poor’s gives the sovereign a BBB- grade, both ratings are one level above junk. Magnusson said on Nov. 12 he was “optimistic” the island will keep its investment grade status. Even if the depositor bill does pass through parliament, it must still be ratified by President Olafur Ragnar Grimsson . More than 34,000 people have signed a petition calling on him not to sign the law. If he bows to public pressure, as he did in 2004 on a media ownership bill in response to a petition carrying 32,000 signatures, the bill will be put to a referendum. ‘Healthy’ Banks Progress on other parts of Iceland’s economic reconstruction has helped improve investor sentiment. The government on Dec. 17 said it spent 250 billion kronur ($2 billion) less than planned in recapitalization costs for the state-created units of the three failed banks after creditors agreed to take on equity stakes. Finance Minister Steingrimur Sigfusson said then Iceland now has three “healthy and fully financed banks.” Credit default swap spreads on Icelandic debt have narrowed to 420 basis points on Dec. 18 from a peak of 1,096 basis points on March 9. A lower CDS spread reflects investor perceptions of improved credit quality. The Icesave bill has received more media attention than the island’s other creditor disputes after the failure of Iceland’s banking system last year meant thousands of U.K. and Dutch depositors risked losing their life savings. The U.K. deployed anti-terror legislation to freeze Icelandic assets as uncertainty about cross border banking rules left doubts about which country should bear the cost of covering the claims. Prime Minister Johanna Sigurdardottir on Oct. 19 presented an accord between her coalition of Social Democrats and Left Greens providing Iceland with a 2.35 billion-pound ($3.78 billion) loan from the U.K. and 1.2 billion euros ($1.71 billion) from the Netherlands to cover the claims. Eight Times GDP The October agreement was an amended version of a June accord after lawmakers rejected the first bill. The failure of Glitnir Bank hf , Kaupthing Bank hf and Landsbanki Islands hf in October 2008 left creditors seeking to recoup about $80 billion in debt, almost eight times Iceland’s gross domestic product. The island has relied on a $4.6 billion International Monetary Fund -led loan since last year to rebuild its economy. Failure to pass the depositor bill will disrupt the island’s economic program with the fund, Mark Flanagan , head of the IMF’s mission to Iceland, said in an interview. Earlier delays in resolving creditor claims prompted the IMF to push back until October a loan payment due in February. Opposition Resolve The chairman of the opposition Independence Party Bjarni Benediktsson said all 16 lawmakers in his party will vote against the bill, while Gunnar Bragi Sveinsson of the opposition Progressive Party said all nine parliamentry members of his party were opposed. Birgitta Jonsdottir , a spokeswoman for the opposition party calling itself The Movement said none of her party’s three members will back the bill. The deal requires Iceland to pay back the loan, which carries an interest rate of 5.5 percent, over 15 years. It will be interest-only for the first seven years. To contact the reporter on this story: Omar Valdimarsson at valdimarsson@bloomberg.net

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Senate Bill Would Boost Medicare Taxes, Drop Proposed Plastic Surgery Levy

December 19, 2009

By Ryan J. Donmoyer Dec. 19 (Bloomberg) — The U.S. Senate’s health-care overhaul plan would almost double a proposed increase in Medicare payroll taxes for high-earners and impose a new tax on indoor tanning, replacing an earlier levy on plastic surgery. The new version of the bill announced today by Senate Majority Leader Harry Reid contains a 0.9 percentage-point increase in the Medicare tax for individuals who earn more than $200,000 and couples earning more than $250,000, according to an estimate by the nonpartisan Joint Committee on Taxation. The increase would start in 2013. That would generate $86.8 billion over six years, up from about $50 billion that would have been generated by an earlier proposed increase of 0.5 percentage point. Those affected would pay a Medicare tax rate of 2.35 percent, while their employers would continue to pay 1.45 percent. Reid’s proposed 10 percent excise tax on indoor tanning would be in place of an earlier proposal to tax breast enhancements and other elective cosmetic procedures, which was dropped from the bill. The main tax component of the bill remains a 40 percent excise tax on the portion of employer-provided health-insurance plans that’s worth more than $8,500 for individual coverage and $23,000 for families in 2013. That proposal would raise an estimated $148.9 billion through 2019, and it faces opposition from House Democrats led by Representative Joe Courtney of Connecticut. House Democrats passed a 5.4 percent income surtax on individuals earning more than $500,000 and couples earning more than $1 million to help pay for their health-care measure. To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

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Jobs Bill Squeaks Through Despite Dem Defections

December 16, 2009

Speaker Nancy Pelosi (D-Calif.) muscled a $154 billion jobs bill through the House on Wednesday evening just before Congress departed for a holiday recess. With the vote in serious doubt until seconds before it was gaveled to a close, Pelosi worked the floor furiously, imploring her caucus to stick with her and move the measure through. The bill passed 217-212, but when the time on the clock expired, it was losing 208-212. A few minutes later, when it hit 214-213 and then 215-213, someone shouted “gavel it!” from the Democratic side. A bill doesn’t need the full 218 to pass — only a simple majority of those voting. The presiding officer took the suggestion and closed the vote. Not a single Republican approved of the bill. The slim margin is strong evidence that deficit hawks have momentum in the ideological battle between one camp that demands more spending on job creation and another, dominated by the GOP and Blue Dog Democrats, calling for immediate reductions in the deficit. Even the fact that the money was being redirected from Wall Street couldn’t sway 38 Democrats, who voted with the Republicans. A vote moments earlier Wednesday showed much the same thing: 39 Democrats split with their leadership on a measure to raise the debt ceiling. Lifting the debt limit is a politically un-fun vote for any member of Congress — and one that has a habit of popping up on TV ads during campaign season — but is necessary to continue the functioning of the government. It barely passed, 218-214. The jobs bill would use $75 billion in money earmarked for the Wall Street bailout and redirect it to infrastructure investment and aid to states. The bill also extends the duration of the COBRA subsidy from nine months to 15 months, extends the deadline for eligibility from December 31, 2009 to June 30, 2010, extends by six months unemployment benefits that would have expired at the end of the year, and expands a child tax credit to 16 million families. Rep. David Obey (D-Wisc.), chairman of the Appropriations Committee, worked the floor on behalf of the bill, aggressively pressuring newly elected Rep. Mike Quigley (D-Ill.), who took White House Chief of Staff Rahm Emanuel’s seat. Obey’s legendary temper wasn’t enough to sway Quigley, who voted against the bill. Rep. Gerry Connolly (D-Va.), president of the freshman class, was worked over hard on the House floor by a red-faced George Miller (D-Calif.), chairman of the Education and Labor Committee and a close Pelosi ally. At one point, Connolly tossed his hand in the air, dismissing a Miller argument. Miller pressed Connolly, arguing that if the House doesn’t preserve the unspent bailout funds now, they’ll be lost for good, Connolly said later. Pelosi tried Connolly next, energetically making her case. But he leaned forward, put his right hand on her left arm, and told her he couldn’t give her his vote. He then stepped out in to the Speaker’s Lobby just off the House floor and spoke to a few reporters. “I’m sure she’s not happy,” he said in an understatement. Freshman defections, as he spoke, were threatening to defeat the bill. “I wrote the Speaker several weeks ago, along with [thirteen] other freshman, saying that at least half of the TARP money should be reserved for deficit reduction, and then we can address jobs.” Pelosi argued back that all of the bailout money that is repaid by banks goes to reduce the deficit, a point Connollly conceded but wasn’t swayed by. “Tonight, obviously a decision was made that what we’re going to do is address jobs. Maybe some day we’ll address the deficit. And I don’t think that’s the right sequence,” he said, saying that both are important (a point of agreement on all sides). HuffPost asked if Democratic freshmen are more concerned about the deficit than the jobless situation. Connolly said that the way people voted would answer the question. Eight of the fourteen freshman who joined the Connolly letter rejected the jobs bill, along with a sizable number of other new members and Blue Dogs. The sight of Democrats standing in opposition to spending on job creation with unemployment over 10 percent struck an angry Rep. Charlie Rangel (D-N.Y.), chairman of the Ways and Means Committee, as reason to ask where the party stands. “We may have to take a reevaluation,” Rangel said, “of Democrats.” Rep. Stephen Lynch (D-Mass.), who voted for the jobs bill, summed up the mood. “People are worried,” he said. If anybody has a right to be worried, it’s Rep. Chris Van Hollen, the chairman of the Democratic Congressional Campaign Committee, who will take the lead in fending off a wave of angry voters, many intent on tossing his members out of office. “Clearly, taking the TARP money that would have gone to Wall Street and spending it on infrastructure for Main Street I think is an important move, but obviously we need to get right back to work when we get back here focusing on long-term debt deficit and debt reduction. That will be a priority,” he told HuffPost. The key word Van Hollen’s analysis is “long-term.” House leaders are pushing for more spending now, along with efforts to structure the budget so that future deficits are reduced. The GOP and vulnerable Democrats, meanwhile, want to cut spending yesterday. “You can’t accomplish the fiscal stability goal if the economy doesn’t turn around,” Van Hollen said. Rep. Brad Miller (D-N.C.) echoed Van Hollen’s argument. He noted that for every one-point reduction in the unemployment rate, the federal deficit is reduced by more than $200 billion due to increased tax revenue. “If we want to close the deficit, we’ve got to grow the economy and put people to work. And if we don’t do that, nothing else we do is going to work,” he said. Connolly, the freshman leader, said that passing the bill would give fodder to political opponents — even as it is uncertain the Senate will move on it. “Why do we want to pass a bill that seems to lend credence to critics who say, well, maybe the stimulus really isn’t succeeding?” he argued. Connolly’s opposition to the spending, however, is particularly striking, because many of his Northern Virginia constituents are employed by or through the federal government itself. “I have to represent my district. My district has five percent unemployment. My district is right here in the shadow of the nation’s capital and it’s filled with federal employees and people who work for federal contractors and lots of other people. And within reason they are absolutely sympathetic to the need for jobs for people in other districts who aren’t so fortunate. But, remember, they’re the ones being asked to foot the bill,” he said — though his constituents are also being paid from the proceeds of that bill. “And they want to know that if we’re going to be doing that, that it’s balanced with prudent fiscal stewardship and with some attention to the red ink we inherited. And given the fact that that’s not in tonight’s bill and I asked for it two or three weeks ago, I cannot bring myself to vote for this bill. Reluctantly,” he said. Peering back into the chamber, Connolly noticed Pelosi and several aides watching him. “They’re looking at me. I’ve gotta go.”

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Rep. Maurice Hinchey: Bring Back the Glass-Steagall Act to Break Up the MegaBanks that Caused the Crisis

December 16, 2009

In the midst of the Great Depression, Congress approved the Banking Act of 1933, which among other things, separated investment banking from commercial banking. This measure, more commonly referred to as the Glass-Steagall Act, was adopted after many banks had taken depositors’ money, invested it in the stock market, and lost big time. This resulted in people pulling their money out of banks and led to a financial disaster. By separating commercial lending from investment activity through the Glass-Steagall Act, Congress took a prudent step to protect the American public from greedy banks. Unfortunately, Congress ignored history and reversed the Glass-Steagall Act in 1999 through what is commonly referred to as the Gramm-Leach-Bliley Act. The repeal of Glass-Steagall contributed a great deal to the financial collapse we recently experienced. The greed of these megabanks resulted in the American people having to pay the price as they bailed out these oversized financial institutions. We must learn from history once more and restore commonsense safeguards to the financial sector. That is why today I introduced the Glass-Steagall Restoration Act, which would separate investment banking from commercial banking. I was pleased to have U.S. Reps. Peter DeFazio (D-OR), Jay Inslee (D-WA), Marcy Kaptur (D-OH), Jim McDermott (D-WA), and John Tierney (D-MA) all sign on as original cosponsors to this bill, which would break up these oversized banks, restore consumer protections, and avoid future financial collapses like the one that began last year. The repeal of Glass-Steagall has exposed the U.S. economy to a level of risk that is simply unacceptable. This bill reinstates an important protection that will help ensure average Americans are not taken advantage of by banks and help mitigate the risk of another financial meltdown like the one from which we’re still recovering. Today, just four huge financial institutions hold half the mortgages in America, issue nearly two-thirds of credit cards, and control about 40 percent of all bank deposits in the U.S. In addition, the face value of over-the-counter derivatives at commercial banks has grown to $290 trillion, 95 percent of which are held at just five financial institutions. We cannot allow the security of the American economy to rest in the hands of so few institutions. When you take a look at history and see the situation in which we find ourselves today, it is clear that we need to bring back the Glass-Steagall Act. The bill I introduced today would statutorily require banking giants to decide whether they want to serve as a commercial bank or an investment bank and require them to cease activities in one of those areas within one year of the bill’s enactment. This bill would help right the ship and return our country to the days when banks either participated in commercial lending activities or investment activities, but not both. We need to bring the American banking system back to earth so that it functions in a way that benefits all Americans, not just bank executives who stand to make a fortune if things go well and a smaller fortune if they don’t. The financial system in this country has been rigged and this bill will help undo the circumstances that led to this most recent collapse while helping to prevent future ones. Congressman Maurice Hinchey (D-NY) is serving in his ninth term representing New York’s 22nd Congressional District. He is a member of the Joint Economic Committee.

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Obama Presses Senators to Defy History by Voting for Health-Care Overhaul

December 15, 2009

By Kristin Jensen and Laura Litvan Dec. 16 (Bloomberg) — President Barack Obama and top Democrats said they are on the verge of passing the most sweeping overhaul of the U.S. health-care system in four decades after making last-minute changes to win over holdouts. “We are on the precipice of an achievement that’s eluded Congresses and presidents for generations,” Obama said yesterday after meeting with Senate Democrats. The bill includes “the most significant reforms to our health-care system since the passage of Medicare.” Senator Joe Lieberman , a Connecticut Independent whose support is crucial because Republicans are united in opposition, said he’s ready to back the bill as long as two provisions are dropped — a plan to expand Medicare and to set up a new government insurer. Democrats are poised to oblige him and other lawmakers who voiced misgivings about those ideas. Senator Tom Harkin , an Iowa Democrat who heads the health committee, said Lieberman’s support leaves just one Democratic holdout — Nebraska Senator Ben Nelson . “But he’ll be good,” Harkin said. The 10-year $848 billion Senate plan is designed to cover 31 million uninsured Americans and curb medical expenses . Like a measure passed Nov. 7 by the U.S. House, the bill would require Americans to get health coverage, offering expanded government aid for the poor and creating online insurance-purchasing exchanges to help the uninsured buy policies. Christmas Passage? Senate Finance Committee Chairman Max Baucus of Montana and Illinois Senator Dick Durbin , the No. 2 Senate Democrat, predicted the chamber would pass the bill by Christmas. Before that happens, Senate Majority Leader Harry Reid will need to round up all 60 votes controlled by Democrats to overcome procedural hurdles that will be thrown up by Republicans. The 60 votes aren’t a lock. Proponents of a new government- run insurance program, or public option, will have to be placated now that it’s being removed from the legislation. Nelson is concerned about whether federal subsidies might go toward abortion, and a number of senators say they can’t support anything until they’ve seen the language. “The strange nature of this process is we’re being urged to vote for something, but we don’t know the details of what’s in it,” Indiana Senator Evan Bayh , a Democrat who’s expressed concern about the legislation, told reporters yesterday. Drug Importation Democrats resolved one issue splitting the party yesterday when the Senate voted against an amendment to allow the importation of cheaper medicines from Canada and other nations. Drugmakers, who have supported the overhaul, opposed the amendment, as did Democratic senators from New Jersey and Delaware, both home to major pharmaceutical operations. The party also has been divided over how best to cover uninsured Americans, with many liberal Democrats pushing for the public option to compete with private insurers. Another proposal would have let people as young as age 55 enroll in Medicare, the federal insurance program for people age 65 and older. Lacking the votes for either idea, Senate Democrats said on Dec. 14 they were moving toward dropping them. Obama said he told senators, “we simply cannot allow differences over individual elements of this plan to prevent us from meeting our responsibility to solve a longstanding and urgent problem.” ‘We Can Do Better’ Senator Sherrod Brown , an Ohio Democrat, said he will continue to fight for the Medicare buy-in as the legislation moves on and said he appealed to Lieberman to drop his opposition during a meeting with the president. “We’re not giving up,” Brown said. While Brown said he plans to vote for the bill, he said, “we can do better.” After passage, the Senate measure would have to be reconciled with a version approved by the House on Nov. 7. There are significant differences. The House bill has a public option, the original goal of Democratic leaders. The Senate pays for its measure in part with a tax on high-end insurance plans; the House opted for a surtax on millionaires. “We’ll have to figure out what the Senate can pass and we’ll have a look at it,” House Democratic leader Steny Hoyer of Maryland told reporters yesterday. Republicans say both versions might crowd out private insurers, raise taxes and widen the federal budget deficit . Republican Votes The two Republicans seen as most likely to vote with Democrats — Olympia Snowe and Susan Collins of Maine — said they want greater efforts to boost affordability of insurance premiums for lower-income Americans and added help for small businesses. Snowe, who met with Reid yesterday, said even if adjustments are made she wants time to review final legislation and doesn’t want to be pushed to decide before early next year. “There’s a lot of magic about Christmas, but what isn’t magic is the deadline of Christmas,” Snowe said. Obama said yesterday that disagreements still need to be “ironed out” while voicing confidence for passage. Senators leaving the meeting agreed with the president’s assessment, as did Collins earlier in the day. She said she was working to amend the bill even though she probably wouldn’t support it. “I think something is going to pass and I’d like to make that bill as good as possible,” Collins told reporters. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

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House Democrat Ed Perlmutter Has Lots Of Reasons To Support Big Banks

December 11, 2009

Rep. Ed Perlmutter pushed and pushed and pushed for an amendment to exempt some of the country’s biggest banks from supervision by a new consumer-protection agency. The Colorado Democrat’s office says it was to create “a more targeted approach” that goes after the biggest of the big banks. But the financial regulation bill being debated in the House already limits its examination authority to the 2 percent of the nation’s banks with more than $10 billion in assets. Perlmutter’s amendment failed twice, most recently on Thursday morning, when it was nixed by the House Rules Committee. But the third time was the charm as Perlmutter and Financial Services Committee Chairman Barney Frank engaged in a colloquy Thursday night — a pre-scripted dialogue on the House floor — so he could get the spirit of his loophole in the bill without actually having to have a vote. It’s now enshrined forever in the Congressional Record as Congress’s intent — a loophole for some of the nation’s biggest banks to evade additional scrutiny of their consumer practices in the wake of the biggest economic crisis in 80 years, brought about in large measure because of the lack of adequate consumer protections. Why would a Democratic member of the House Financial Services Committee push so hard for a loophole like that? Perlmutter has been a vocal advocate for banking interests on several issues this year, much like his fellow members of the New Democrat Coalition. But a Huffington Post review of Perlmutter’s family ties, financial interests, background, and, most significantly, the pace and timing of recent campaign contributions from financial interests suggests that he had much to gain from his advocacy. On Sept. 22, Frank released a two-page memo that said a draft version of the bill creating the Consumer Financial Protection Agency would be released soon. That same day, the Independent Community Bankers of America’s (ICBA) political action committee contributed $1,000 to Perlmutter. The next day, Perlmutter received $2,500 from the American Bankers Association PAC. It was just the second time since 2007 the ABA had given him a check for at least $2,000. On Sept. 25, the committee released its discussion draft of the bill creating the proposed agency. Five days later, the Credit Union National Association PAC contributed $2,500 to Perlmutter, his biggest one-day haul from the group in more than two years. Two weeks later, Perlmutter introduced his amendment for the first time carving out big banks from exams by the proposed consumer agency. He later withdrew it. Since then, Perlmutter has received another $2,500 from the ICBA and ABA each; he also received $5,000 from U.S. Bancorp’s PAC. U.S. Bancorp is one the nation’s largest banks — and Perlmutter and his children own between $150,000-$350,000 in the company’s stock. The amendment to the Wall Street Reform and Consumer Protection Act of 2009 died again Thursday morning, when the House Rules Committee ruled it out of order, yet was reborn Thursday night thanks to Financial Services Chairman Barney Frank. “This isn’t a loophole. This is actually the Chairman’s intent for what the bill does, and it was just clarified for the record what the bill currently does as written,” said Leslie Oliver, Perlmutter’s communications and policy director. Perlmutter was not available to speak with the Huffington Post. Oliver said there was no connection between the campaign contributions and Perlmutter’s actions. “He is campaigning. He accepts campaign contributions. Look at the totality of his campaign contributions,” she said. Of the $28,500 committees donated to his campaign in October, more than two-thirds came from the financial services industry. The principle behind his amendment, she said, “is still getting at the largest institutions that were part of the problem and it’s still getting at the unregulated institutions that were part of the problem.” During Thursday’s colloquy with Frank, Perlmutter said that “if an institution’s functional regulator has deemed that its consumer compliance record is strong” then it wouldn’t need to be subject to regular exams by the new agency. But nearly every bank supervised by national bank regulator the Office of the Comptroller of the Currency sports a strong consumer compliance record . During each of the last four years the following percentages of banks scored either the highest or second-highest rating available: 94 percent, 94 percent, 97 percent, and 97 percent, respectively. Perlmutter and his children own between $182,000 and $480,000 in stocks and bonds in three banks, according to his most recent financial disclosure forms filed with Congress. One of those banks — San Francisco-based New Resource Bank — was founded in part by his ex-wife , who he divorced last year . The bank is currently under sanction by the Federal Deposit Insurance Corporation for various “unsafe and unsound banking practices,” which include poor management, too many bad loans, and inadequate supervision by the bank’s board. Prior to his 2006 election, Perlmutter worked as an attorney in private practice representing banks and financial institutions. His clients included Chase Home Finance, a unit of JPMorgan Chase; Wachovia Commercial Lending and Wachovia SBA Lending, units of the bank that was swallowed up by Wells Fargo last fall; First Financial Federal Credit Union; and Chase Manhattan Mortgage Corporation, according to forms filed with Congress . Oliver said Perlmutter’s investments are held in family trusts over which he has no control. She added that he also represented individuals and small businesses in bankruptcy proceedings. Perlmutter’s amendment called for those banks without a full-time, on-site government regulator to be exempt from the new consumer-focused exams. That could have reduced the number of banks subject to examination from 112 to as little as 39. Oliver argued that Perlmutter’s approach was preferable to the $10 billion carve-out because $10 billion “is an arbitrary threshold.” By focusing on those institutions in which the existing regulator feels it’s necessary to house an inspector on site, Perlmutter’s amendment calls for the new agency to focus on only the biggest banks, Oliver said. But an OCC spokesman says it places its examiners at banks that are engaged in complex and sophisticated activities, like trading derivatives. It’s not necessarily the biggest banks — it’s the most complicated banks. And the new agency would be looking for different sorts of things, anyway. Oliver says Perlmutter has supported various measures that have been unpopular with banks, like the recent credit card reform law and allowing judges to modify mortgages in bankruptcy. And yet Perlmutter’s attempts to shield some of the country’s biggest banks from increased supervision was not the first time he tried to help the banking industry this year. Last month, for example, Perlmutter introduced a provision that would strip the independence of the board that sets financial accounting standards. As reported by the Huffington Post , the move would effectively allow bank regulators to set their own accounting standards in rough economic times. By changing how banks account for assets and liabilities, bank regulators could allow failing banks to appear completely healthy — an incentive when the regulators’ record is partly judged by the number of bank failures. “He votes and proposes legislation to actually try to fix the problems in the system,” Oliver said. “He believes the bill as written, which everybody supports, frankly does what it needs to do.” READ the full exchange between Perlmutter and Frank below: PERLMUTTER: My point here is to enter into a colloquy with the chairman. Mr. Chairman, I had submitted an amendment to exempt certain smaller banks and credit unions that was not passed in the Rules Committee. So, it is my understanding that the legislation would give the new CFPA [Consumer Financial Protection Agency] the authority to delegate the authority to conduct examinations and enforce consumer protection provisions to the functional regulator for financial institutions that fall above the $10 billion asset threshold. Would it be fair to say that the intent here is not to increase burdens on those institutions that have been good actors? For example, if an institution has an on-site examination or audit team from their functional regulator, it would seem that adding a CFPA team to work with those already there would not be as big a burden; however, if an institution’s functional regulator has deemed that its consumer compliance record is strong and the institution’s regulator is doing an effective job it would seem that subjecting them to CFPA examinations and enforcement would increase the regulatory burden on the institution. Is this a situation where the Chairman would envision the CFPA delegating that authoirty back to the functional regulator? FRANK: With regard to the permanent audit team, they may be the largest institutions and that’s a somewhat separate question. But for those that don’t have a permanent audit team, not only would it be better for the regulated entity — it would be better for the CFPA. They will realize any agency has limited resources. And if you have a bank that’s $13-$14-$17 billion in assets and has had a good record as most of those banks have had in consumer affairs, it would be a great waste of regulatory resources to be doing that, when they would have had the option instead of simply sending a CFPA member to join the other team. So yes, I would hope that the CFPA would take full advantage of this authority with those banks. Get HuffPost Business On Facebook and Twitter !

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Senate Bill Contains A Gift For Big Banks

November 30, 2009

Despite bipartisan consensus on Capitol Hill that the size and interconnectedness of major financial institutions poses a grave risk to the system as a whole, Senate banking reform legislation includes a provision that will help them get even bigger. The provision — long desired by the big banks — would allow them to open new branches in states regardless of local laws. This is known as de novo branching. The provision was first put forward by the Treasury Department in the financial regulation reform bill that it sent to Congress. House Financial Services Committee Chairman Barney Frank (D-Mass.) initially included the provision in his bill, but removed it after a Democratic committee member, Rep. Alan Grayson of Florida, asked that it be taken out. Florida doesn’t allow de novo branching and its local banks are vocal opponents of changing the law. They went to Grayson, and Grayson took their concerns to Frank, who said he had no problem removing it. Frank told HuffPost that Treasury didn’t object to his removal of their provision. “I don’t get much from pushback from Treasury,” Frank said. “They need me. I don’t need them.” The lobby representing small banks — the Independent Community Bankers Association — was glad to see the gift to big banks taken back, Steve Verdier, an ICBA senior vice president, told HuffPost. But weeks later, when Senate Banking Chairman Chris Dodd unveiled his new financial reform package , the de novo language popped up again — a verbatim copy of the Treasury language. That had observers scratching their heads at the resilience of the language. The conformity to Treasury’s wording was no coincidence. “That was just something we pulled straight from the administration’s proposal,” Kirstin Brost, a spokesman for Dodd’s banking committee, told HuffPost. Now that community banks are expressing concern, the provision will get a fresh look, she said, emphasizing that Dodd’s bill is a discussion draft only. Treasury, however, still wants it. “This eliminates a difference between thrifts and banks. While banks are subject to these limits, thrifts are not,” said Treasury spokeswoman Meg Reilly. “Although we are proposing to eliminate the thrift charter, this is an important step towards increased competition in banking and will reduce costs for consumers.” The little banks don’t see it that way. “ICBA opposes this part of the bill; we’d prefer to let the states handle this issue, as they have for years,” said Verdier.

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Reid on Verge of Clearing Health-Bill Test With Votes of Landrieu, Lincoln

November 21, 2009

By Laura Litvan and Kristin Jensen Nov. 21 (Bloomberg) — Senate Majority Leader Harry Reid won over the last of his party’s holdouts, bringing him to the verge of victory in the first big test of whether he can keep Democrats united behind health-care legislation. Senators plan to take a vote at 8 p.m. Washington time that would clear the way for debate on the most sweeping changes to the U.S. health system since the 1965 creation of the Medicare program for the elderly and disabled. Louisiana Senator Mary Landrieu and Arkansas Senator Blanche Lincoln , the last two Democrats who had held out on supporting the motion, said today they will vote in favor of debating the bill. With every Senate Republican opposing the legislation, Reid can’t afford a single defection from his 60-member caucus to enable the chamber to take up the bill when Congress returns from a weeklong Thanksgiving recess. “We’re not assuming a thing,” Illinois Senator Dick Durbin , the No. 2 Senate Democrat, told reporters yesterday. “We’re working hard to bring all Democrats together.” Last Holdouts “It is more important that we begin this debate to improve our nation’s health care system for all Americans rather than just simply drop the issue and walk away,” Lincoln said today on the floor of the Senate. “That is not what people sent us here to do.” Lincoln had said yesterday she was “still neutral” on the motion. Nebraska Senator Ben Nelson also intends to vote to support the motion to start debate, saying it presents “an opportunity to make improvements” to the bill. Nelson said he remains undecided on whether to vote in favor of the legislation itself. Landrieu took a similar position. “My vote to move forward on this important debate should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end,” Landrieu said on the floor of the Senate. “I have decided that there are enough significant reforms and safeguards in this bill to move forward, but much more work needs to be done.” Landrieu may have become more amenable to the legislation after winning the inclusion of an extra $100 million in federal aid for low-income people in her state. She said she still has concerns about the legislation, including that it doesn’t do enough to help small businesses. Nelson, Landrieu and Lincoln’s decisions made Democratic support for the motion unanimous. One independent who caucuses with the party, Connecticut Senator Joe Lieberman , has said he supports letting debate begin, although he doesn’t support the current bill. 2,074-Page Bill Winning tonight’s vote would kick in motion Senate debate over some fundamental provisions of the 2,074-page bill , ranging from how strictly to prohibit the use of federal money to fund abortions to how to pay for the legislation. Under pressure to finish work on a bill this year, Reid scheduled the rare Saturday vote to begin debate on the $848 billion legislation , which is intended to cover 31 million uninsured people and curb medical costs. Like a bill passed on Nov. 7 by the U.S. House, the Senate measure would require that all Americans get health coverage, setting up new online insurance-purchasing exchanges and providing subsidies. White House Urging The White House urged lawmakers in a statement last night to back the bill, saying it meets the criteria President Barack Obama set for an overhaul. The legislation “includes critical reforms to the insurance industry, so that Americans will no longer have to worry that they will be denied coverage, or that their coverage will be dropped or watered down when they need it most,” the statement said. The White House also released a statement from Tommy Thompson , a Republican and onetime Health and Human Services secretary, and former House Democratic Leader Richard Gephardt urging action. “Americans will look back with appreciation for those who set aside political interests to keep the process moving forward,” Gephardt and Thompson said. In a sign that abortion will remain a stumbling block to a bill’s passage, the U.S. Conference of Catholic Bishops yesterday sent a letter calling the Senate measure an “enormous disappointment” on the issue. The bishops said the bill did “not live up to Obama’s pledge to bar the use of federal dollars for abortion.” Abortion Stumbling Block Senate Democratic leaders have said the measure maintains existing restrictions on the use of taxpayer dollars to fund abortion services. If the Senate passes a bill, it would work on compromise legislation with the House for a new round of votes in both chambers before a measure could go to Obama. While the Senate vote tonight is simply on whether to head off Republican tactics to block consideration of the bill, it’s rare for a broader measure to fail after it clears such a hurdle. The Congressional Research Service released an analysis that found only one instance between 1999 and 2008 when Senate legislation failed after the chamber voted to end a so-called filibuster on a motion to debate a bill. That was a measure designed to protect gun manufacturers from lawsuits that was rejected in 2004. “When the Senate invoked cloture on a measure itself, it almost always proceeded to a final vote on the measure and passed it,” CRS analysts wrote to Senator Tom Coburn , an Oklahoma Republican who requested the study. Republican Argument Republicans said a vote to begin debate is a vote for the legislation. “No senator who votes for cloture on the motion to proceed tomorrow, I think, can with a straight face contend that they have not somehow embraced the bad policy contained in this bill,” Texas Senator John Cornyn said yesterday. Still, Lieberman has said he wouldn’t vote for the final legislation unless it’s changed. Lieberman, along with Landrieu, Lincoln and Nelson, have criticized a government-run insurance program to compete with insurers like Hartford, Connecticut- based Aetna Inc. The only Republican who has supported a health bill so far, Senator Olympia Snowe of Maine, said she won’t side with Reid in the vote on starting debate because of the public option. “I appreciate his phone calls, I’m just saying it hasn’t translated,” she said on Nov. 19. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

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Reid Wins Key Support From Landrieu in Senate’s First Big Health-Bill Test

November 21, 2009

By Laura Litvan and Kristin Jensen Nov. 21 (Bloomberg) — Senate Majority Leader Harry Reid is on the verge of victory in the first big test of whether he can keep his Democratic colleagues united behind health-care legislation. Senators plan to take a vote at 8 p.m. Washington time that would clear the way for debate on the most sweeping changes to the U.S. health system since the 1965 creation of the Medicare program for the elderly and disabled. Louisiana Senator Mary Landrieu , one of the last two Democrats who had held out on supporting the motion, said today she will vote in favor of debating the bill. With every Senate Republican opposing the legislation, Reid can’t afford a single defection from his 60-member caucus to enable the chamber to take up the bill when Congress returns from a weeklong Thanksgiving recess. “We’re not assuming a thing,” Illinois Senator Dick Durbin , the No. 2 Senate Democrat, told reporters yesterday. “We’re working hard to bring all Democrats together.” Under pressure to finish work on a bill this year, Reid scheduled the rare Saturday vote to begin debate on the $848 billion legislation , which is intended to cover 31 million uninsured people and curb medical costs. Like a bill passed on Nov. 7 by the U.S. House, the Senate measure would require that all Americans get health coverage, setting up new online insurance-purchasing exchanges and providing subsidies. Winning tonight’s vote would kick in motion Senate debate over some fundamental provisions of the 2,074-page bill , ranging from how strictly to prohibit the use of federal money to fund abortions to how to pay for the legislation. Last Holdouts Reid, of Nevada, and Durbin have already persuaded two of three holdouts in their party to support the motion to start debate. Nebraska Senator Ben Nelson intends to vote with Reid, saying it presented “an opportunity to make improvements” to the bill. Nelson said he remains undecided on the measure. “My vote to move forward on this important debate should in no way be construed by the supporters of this current framework as an indication of how I might vote as this debate comes to an end,” Landrieu said on the floor of the Senate. “I have decided that there are enough significant reforms and safeguards in this bill to move forward, but much more work needs to be done.” Extra $100 Million Landrieu may have become more amenable to the legislation after winning the inclusion of an extra $100 million in federal aid for low-income people in her state. She said she still has concerns about the legislation, including that it doesn’t do enough to help small businesses. Nelson’s and Landrieu’s decisions left Arkansas Senator Blanche Lincoln as a potential “no” vote among Democrats in tonight’s vote. One independent who caucuses with the party, Connecticut Senator Joe Lieberman , has said he supports letting debate begin, although he doesn’t support the current bill. “I’m still neutral,” she said, telling reporters she wants to have as much “leverage” as possible in the debate. She said that after “leaning against” allowing debate on the bill, she moved “to neutral after meeting with Harry Reid. And that’s where I am right now.” Lincoln’s Support Likely Lincoln has signaled she’s likely to go along with Reid, assuring supporters in a Nov. 19 e-mail that even if debate starts, “there will be many days and weeks of efforts to improve” the bill. The White House urged lawmakers in a statement last night to back the bill, saying it meets the criteria President Barack Obama set for an overhaul. The legislation “includes critical reforms to the insurance industry, so that Americans will no longer have to worry that they will be denied coverage, or that their coverage will be dropped or watered down when they need it most,” the statement said. The White House also released a statement from Tommy Thompson , a Republican and onetime Health and Human Services secretary, and former House Democratic Leader Richard Gephardt urging action. “Americans will look back with appreciation for those who set aside political interests to keep the process moving forward,” Gephardt and Thompson said. Abortion Stumbling Block In a sign that abortion will remain a stumbling block to a bill’s passage, the U.S. Conference of Catholic Bishops yesterday sent a letter calling the Senate measure an “enormous disappointment” on the issue. The bishops said the bill did “not live up to Obama’s pledge to bar the use of federal dollars for abortion.” Senate Democratic leaders have said the measure maintains existing restrictions on the use of taxpayer dollars to fund abortion services. If the Senate passes a bill, it would work on compromise legislation with the House for a new round of votes in both chambers before a measure could go to Obama. While the Senate vote tonight is simply on whether to head off Republican tactics to block consideration of the bill, it’s rare for a broader measure to fail after it clears such a hurdle. The Congressional Research Service released an analysis that found only one instance between 1999 and 2008 when Senate legislation failed after the chamber voted to end a so-called filibuster on a motion to debate a bill. That was a measure designed to protect gun manufacturers from lawsuits that was rejected in 2004. “When the Senate invoked cloture on a measure itself, it almost always proceeded to a final vote on the measure and passed it,” CRS analysts wrote to Senator Tom Coburn , an Oklahoma Republican who requested the study. Republican Argument Republicans said a vote to begin debate is a vote for the legislation. “No senator who votes for cloture on the motion to proceed tomorrow, I think, can with a straight face contend that they have not somehow embraced the bad policy contained in this bill,” Texas Senator John Cornyn said yesterday. Still, Lieberman has said he wouldn’t vote for the final legislation unless it’s changed. Lieberman, along with Landrieu, Lincoln and Nelson, have criticized a government-run insurance program to compete with insurers like Hartford, Connecticut- based Aetna Inc. The only Republican who has supported a health bill so far, Senator Olympia Snowe of Maine, said she won’t side with Reid in the vote on strating debate because of the public option. “I appreciate his phone calls, I’m just saying it hasn’t translated,” she said on Nov. 19. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

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David Rosenberg: Unemployment Will Hit 12-13%

November 11, 2009

David Rosenberg thinks the unemployment rate is headed much higher than anyone anticipates. If you recall, back in January when the stimulus package was crafted, the Obama Administration felt that passing the bill would mean an unemployment rate which would top out at 8.0%. As the situation deteriorated, the President recognized that 10.0% was more likely — a number we just got last week. But Rosenberg is the only one (except Meredith Whitney) who is talking about 12-13%.

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Betting Against Obama on Health Care Increases as Senate Trips on Calendar

November 9, 2009

By Ryan J. Donmoyer and Kristin Jensen Nov. 9 (Bloomberg) — Insurers such as WellPoint Inc. and Blue Cross Blue Shield and drugmakers are redoubling their efforts to fight proposals to overhaul the U.S health-care system, adding another obstacle as legislative hurdles mount. The insurers oppose competition from a new government-run program that’s included in both the House and Senate plans. The trade group representing drugmakers such as Pfizer Inc. says a House provision to allow the government to negotiate drug prices for Medicare would cost tens of thousands of jobs. House Speaker Nancy Pelosi won passage of her version of the legislation on Nov. 7 only after forcing her party’s liberal wing to make concessions and can’t count on those votes for a final version. In the Senate, time is running out to get a bill passed this year, leaving the effort vulnerable to a loss of momentum and a new backlash from Republicans in 2010. “They know they don’t have 60 votes,” said former Senator John Breaux , who now heads a lobbying firm that represents the Pharmaceutical Research and Manufacturers of America, the drug industry’s Washington trade group. “They have to go back to the drawing board” on the plan to set up a government-run insurer, he said. The House version passed 220-215 after Pelosi agreed to allow an ultimately successful vote that puts limits on the use of federal funds for abortion, setting up a later fight. The measure also includes a new government insurer, the so-called public option, that will pose less of a threat to private insurers than the original proposal. Senate Outlook Senate Majority Leader Harry Reid may have to go through a similar process in his chamber. He’s trying to placate liberals by pushing for a public option and eventually may have to give up on the idea. He’s also trying to bridge differences over how to fund the bill and whether to require employers to offer insurance, as well as tiptoe through issues including abortion. “Because of the degree of difficulty, it wouldn’t surprise me to see it roll over into the first quarter of 2010,” said William Frenzel , a Brookings Institution scholar in Washington who was a Republican member of Congress for 20 years. The only Republican to support any Senate proposal so far, Maine Senator Olympia Snowe , said Reid’s plan for a public option that allows states to opt out is unacceptable. And Connecticut Senator Joe Lieberman , an independent who caucuses with Democrats, reiterated his opposition yesterday. Lieberman’s Vote “As a matter of conscience, I will not allow this bill to come to a final vote” if the public option remains, Lieberman said on “Fox News Sunday.” Lieberman’s state is home to health insurer Aetna Inc. , based in Hartford. Without Snowe and Lieberman, Reid is at least one vote shy of the 60 he needs, and he risks losing weeks to a fruitless push for the public option. Should work spill into next year, breaks in the schedule and looming elections may open the effort up to the same types of criticism that dogged Democrats during their August recess. “The longer any bill is hanging in the winds, the harder it is to pass,” said Sean Spicer , a former aide for the House Republican conference. “When you have a 2,000-page bill, there is always something you can find to rally opposition around.” President Barack Obama is pushing Congress to send him legislation by the end of the year. “Now it falls on the U.S. Senate to take this baton and bring this effort to the finish line,” Obama said yesterday. Reid Won’t Commit Reid last week wouldn’t commit to Obama’s timeline. He plans to recess his chamber for three days starting Nov. 11 for a Veterans Day holiday and the week of Nov. 23 for Thanksgiving. Reid faces additional pressure because just one senator can effectively block legislation through procedural means. His colleagues say he will struggle to find enough votes to even begin a debate that senators say may last as long as six weeks. “We are far from the end of the debate in the Senate,” said Senator Jack Reed , a Rhode Island Democrat, on yesterday’s “Face the Nation” program on CBS. And that’s even before the House and Senate work together on a compromise, a process that would occur after a Senate vote and may take months. Lawmakers are trying to craft a bill to cover tens of millions of uninsured Americans while curbing medical costs. Their proposals for new purchasing exchanges, subsidies and a requirement that all Americans have insurance represent the biggest changes to U.S. health care in four decades. Insurers Speak Out The Blue Cross and Blue Shield Association, a federation of plans that it says cover more than 100 million members, released a statement criticizing the House plan minutes after it passed. The legislation “undermines the goals of comprehensive health-care reform,” the group said. “This legislation will significantly increase health-care costs and force many Americans to accept changes to the insurance plans they currently have and value,” said Angela Braly , chief executive officer of Indianapolis-based WellPoint, in an Oct. 28 earnings conference call. At least on the House side, the insurers’ battle is being joined by drugmakers. “While well-intentioned, the bill — as passed — would have the unintended consequences of killing tens of thousands of jobs in our industry,” said Ken Johnson , senior vice president of PhRMA, which represents New York-based Pfizer, Whitehouse Station, New Jersey-based Merck & Co. and other drug manufacturers. Pelosi’s Fight Pelosi lost the votes of 39 House Democrats this weekend and can’t count on all the votes she did win for a House-Senate compromise. Some Democrats who favor abortion rights and voted for the legislation said they won’t support a final bill that contains the funding restriction. “To say that this amendment is a wolf in sheep’s clothing would be an understatement of a lifetime,” Representative Diana DeGette , a Colorado Democrat, said during the debate. A big difference between the House and Senate bills lies in the way they pay for the legislation, which costs more than $800 billion over 10 years. The House funds its legislation largely with a surtax on couples who earn more than $1 million a year. The Senate is planning a tax on insurers who offer high-end benefit plans. The prospect of having the bill fail may force negotiators to include scaled-back versions of both proposals, said Clinton Stretch , a former congressional aide and principal at the Deloitte Tax LLC consulting firm in Washington. “The political risks of failure are pretty high,” he said. To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

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House Sets Weekend Vote on Health Care in Face of Republican Election Win

November 5, 2009

By James Rowley Nov. 5 (Bloomberg) — House Democratic leaders, undeterred by delays in the Senate or this week’s Republican electoral triumphs, plan to call a vote Saturday on the most sweeping overhaul of U.S. health-care policy in four decades. The House will move on the $1.05 trillion legislation that would cover 36 million uninsured people and create a government plan to compete with private insurers even after the election of Republican governors in New Jersey and Virginia. President Barack Obama will go to Capitol Hill tomorrow to meet with House Democrats, as they seek the 218 votes they need to pass the bill, a Democratic leadership aide said. Party leaders signaled they’re ready for a debate on the legislation and a vote on its final passage by filing a 42-page amendment that made last-minute changes to the bill. The Nov. 3 filing triggered a 72-hour waiting period that Democrats pledged to give Republicans before a vote. “We are on the verge of doing something great,” House Speaker Nancy Pelosi told reporters yesterday after meeting with lawmakers in Washington. “From my perspective, we won” on Election Day, she said, pointing to Democratic wins in two House races to fill vacancies in California and New York. Pelosi, of California, said Bill Owens , the Democrat who captured a New York seat held by Republicans, called his election “a victory for health-care reform and other initiatives” of the Democratic-controlled Congress. Investors bet that the Republican victories in the Nov. 3 gubernatorial races would bolster opposition to the overhaul, sparking a rally yesterday in health-care stocks. Health insurers Aetna Inc. of Hartford, Connecticut, and Cigna Corp. of Philadelphia both jumped 5.2 percent. Planning a Vote Still, Rules Committee Chairman Louise Slaughter said the leaders planned a vote for Nov. 7, taking up the legislation before a recess next week. The measure, which would require all Americans to get insurance, set up new online purchasing exchanges and provide subsidies to help people buy insurance, represents the biggest changes to U.S. health care since the 1965 creation of the Medicare system for the elderly. The Senate is still considering its version, and House lawmakers said they weren’t concerned about a possible delay in that chamber until early next year. Senate Democratic Leader Harry Reid suggested on Nov. 3 that the goal of passing a bill this year may slip. In the past, some House Democrats voiced reluctance to move forward until the Senate was ready to act. ‘Die Has Been Cast’ “That die has been cast” by Pelosi’s decision to start debate this week, said Florida Democrat Allen Boyd , a member of the Blue Dog Coalition of self-described fiscally conservative Democrats. “I knew in August that people were concerned about the bill,” Boyd said. “Whether my feet are cold or hot” about voting without the prospect of quick Senate action “doesn’t make a whole hell of a lot of difference,” he said. House leaders continued to seek votes from undecided Democrats, particularly those concerned that the legislation didn’t provide sufficient protection against government financing of medical care for illegal immigrants or of abortions. Democratic leaders are seeking to preserve a ban on federal funding of abortion without affecting private insurers, said Representative Jim Langevin , a Rhode Island Democrat working to broker a agreement on the issue. Democrats opposed to abortion, along with many Republicans, are concerned that subsidies to be offered to lower-income Americans on the health-insurance exchanges could be used to obtain abortions. Compromise Language Compromise language proposed by Indiana Representative Brad Ellsworth to clarify the restrictions will be included in the legislation in the Rules Committee, said Slaughter, the chairman. North Dakota Democrat Earl Pomeroy and other Democrats also want reassurance that undocumented aliens won’t receive subsidies for insurance. The legislation allows the immigrants to purchase private insurance with their own money on the exchange. It bars them from receiving subsidies or purchasing insurance from the public plan. Both the House and Senate plans lack any Republican support. The only Republican to vote for a health-care proposal, Maine Senator Olympia Snowe , said she can’t back the measure currently before the Senate because it includes the government insurance program. A number of Senate Democrats have also expressed concern about that so-called public option. Easier for Pelosi For Pelosi, Republican opposition is an easier hurdle to mount. Her Democratic Party now controls 258 of the 435 seats in the chamber, meaning she can lose some votes and still have the 218 needed for passage. In the Senate, Reid faces a tougher road to passage because of Senate procedures and opposition to his plan. Reid needs all 60 votes controlled by the Democratic caucus to even begin debate, and it isn’t certain he has them. He would then need 60 votes again to cut off debate and take a vote, amid controversies over the public option and new taxes to pay for the expanded insurance coverage for Americans. Now, Reid is waiting for Congressional Budget Office estimates on his proposals and trying to count votes. The nonpartisan agency probably won’t finish its analysis this week, Senate Finance Committee Chairman Max Baucus told reporters. To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

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Video: McClellan Says Moderates Key to Public Option’s Future: Video

October 30, 2009

Oct. 30 (Bloomberg) — Mark McClellan, former administrator of the Centers for Medicare and Medicaid and now a senior fellow at the Brookings Institution, talks with Bloomberg’s Lizzie O’Leary about the outlook for the so-called public option portion of the health-care overhaul legislation. McClellan also discusses the differences between Senate and House versions of the bill and the implications of an employer mandate for health-care coverage. (Source: Bloomberg)

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`Tribal Chiefs’ Pressure Reid to Spend More on Health-Care Overhaul Plan

October 30, 2009

By Ryan J. Donmoyer Oct. 30 (Bloomberg) — Senate Majority Leader Harry Reid faces a dilemma as he hunts for votes for a plan to overhaul the health system: how to find what economists say may be as much as $100 billion to meet the demands of other lawmakers. The Nevada Democrat is under growing pressure to exempt more workers from a proposed tax on high-end insurance plans; cut in half a proposed $40 billion fee on medical-device makers; increase subsidies to help lower-income Americans get coverage, and make it easier for the elderly to buy medication. These and other possible changes may force Reid to consider new ways to raise revenue to meet President Barack Obama’s pledge that the bill won’t add to the federal deficit, said Uwe Reinhardt , a Princeton University health economist. “The health-reform bill is no different than tribal warfare: To get this bill through, you’ve got to pay off the tribal chiefs,” Reinhardt said. “One would expect him to be somewhat short on revenue and have to do some real artistry.” Reinhardt and other economists said those revisions could add as much as $100 billion to the bill, although potential cost-cutting measures such as setting up a new government-run insurance program could help offset that, they say. Reid is melding a measure passed by the Senate health committee in July with an $829 billion proposal approved by the finance panel on Oct. 13. House leaders yesterday unveiled their own bill, which would cost $894 billion over 10 years to expand coverage to 96 percent of all Americans. Many Scenarios Democrats say Reid has sent a variety of bills to the Congressional Budget Office for cost estimates. He’s sharing few details about what his final bill will look like, other than that it will contain a government-run insurance plan. Reid spokesman Jim Manley dismissed as “speculation” questions that the majority leader’s final measure would be short of revenue. Still, Senate Budget Committee Chairman Kent Conrad of North Dakota said on Oct. 27 that Reid had “expressed an interest in replacement revenue.” When asked why Reid would be looking for new revenue, finance committee Chairman Max Baucus said, “It depends on what else is in the bill.” Reid can’t afford to ignore lawmakers’ demands because he would need all 60 votes controlled by the Democrats in the Senate to overcome Republican stalling tactics. Device Makers Among other Democrats, Minnesota Senators Amy Klobuchar and Al Franken want a $40 billion fee on makers of medical devices to be cut in half. Minnesota is home to Minneapolis-based Medtronic Inc. , the world’s largest maker of heart-rhythm devices, and St. Paul-based St. Jude Medical Inc. , also a maker of devices to treat irregular heartbeats. Florida Senator Ben Nelson wants Reid to close a $50 billion so-called doughnut hole in Medicare that forces seniors to pay out-of-pocket for some prescription drugs. Senators like Jay Rockefeller of West Virginia are pushing to exempt more households from a proposed excise tax on the most-expensive health insurance plans provided by employers. Paul Van de Water , a health economist at the Center on Budget and Policy Priorities, said that would reduce projected revenue by about $20 billion, depending on where a final threshold is set. New York Senator Charles Schumer yesterday said senators were also debating higher subsidies to help low-income Americans buy insurance and whether to mandate that employers provide coverage. ‘Serious Problems’ Douglas Holtz-Eakin , a former director of the Congressional Budget Office who was Republican presidential candidate John McCain’s top economic adviser in 2008, said a final CBO analysis will likely show a shortfall. “Reid has a serious problem in making this add up,” Holtz-Eakin said. “He’s got to be a substantial amount short.” Reinhardt and Holtz-Eakin said Reid may try budget maneuvers to make up any gap. One would be to include a long- term-care insurance proposal designed by the late Senator Edward Kennedy that would begin collecting premiums for five years before paying any claims. Reid can also tinker with the timing of when certain provisions take effect by collecting taxes and fees first and delaying subsidies, Holtz-Eakin said. Clint Stretch , a principal at the Deloitte Tax LLC consulting firm, said Reid has few good choices if he considers new tax increases. ‘Not Popular’ “Tax increases are not popular,” Stretch said. “If you’re talking $100 billion, you’ve got to find one thing or two very big things” to make up for it. Stretch said the few ideas that meet that criteria include the House’s proposal for an income surtax on couples earning more than $1 million a year and a version of an Obama budget proposal to limit itemized deductions for high-income individuals. Other proposals rejected earlier, including a tax on soda, may also be resurrected, he said. One thing Reid will likely want to avoid, he said, are new taxes on businesses, which would likely organize against the bill. “If they go after general business increases, it makes the bill more controversial.” To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

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Obama Administration Praises Consumer Protection Bill, Deflects Criticism Of Loopholes

October 23, 2009

The Obama administration on Friday strongly praised a House committee’s vote to create a new federal consumer financial protection agency, despite the fact that the bill exempts more than 98 percent of banks from annual oversight by the new unit. Michael Barr, the Treasury Department’s assistant secretary for financial institutions, said on a conference call with reporters that the agency “would provide an important voice for consumers across the country.” While the bill’s passage out of committee has been nearly universally hailed by consumer advocates, groups still point out loopholes that, in a perfect world, will be rectified later in the legislative process. One such loophole is the carve-out provided to commercial banks with less than $10 billion in assets. Unlike its larger competitors, such as Citibank, Bank of America and Wells Fargo, these banks would not be subject to annual exams by the new consumer-focused body. Of the nation’s 8,200 banks, only 117 of them would be specifically targeted; those nearly 8,100 smaller banks cumulatively hold about $3 trillion in assets. The new agency would have power to regulate things like credit cards, personal loans and it “would be able to take on important failings in the mortgage market,” Barr added, “where we had mortgage brokers selling mortgage loans to people knowing they didn’t make any sense for them.” As of June 30, the nearly 8,100 banks that would not be subject to annual review hold on their balance sheets more than $603 billion in home loans — nearly $120 billion of which are adjustable-rate mortgages, the kind of mortgages that analysts and experts fear could lead to a severe uptick in foreclosures in the next few years as interest rates reset to a higher level. Those banks also hold nearly $25 billion in delinquent home mortgages, according to banking data maintained by federal regulators. Barr disagreed with critics, though, maintaining that the legislation that passed Chairman Barney Frank’s House Financial Services Committee “did not exempt smaller institutions from review.” Specifically, Barr noted that the agency still would have the power to write and enforce consumer protection rules. In addition, the agency would be able to accompany the existing bank regulator when conducting its exams of these smaller banks. The administration’s original proposal did not include this exemption. It was added to placate conservative Democrats and Republicans who were concerned about the proposed agency’s power over smaller banks. “During the legislative process, there’s always a give and a take. There’s never a proposal that an administration puts forward that’s 100 percent of everything it wanted,” Barr said. A spokeswoman for the Center for Responsible Lending, a nonprofit consumer advocacy group, said they were generally pleased with the bill, but added the group was concerned about the exemption granted to banks with less than $10 billion in assets. “The bill could be tightened up,” said Kathleen Day, a CRL spokeswoman. “It should cover all institutions and all types of financial products. Otherwise, what’s the point?” In addition, though proponents of the bill play down the smaller-bank exemption by pointing out that the proposed agency could send its examiners to bank reviews if it chose to, the question remains whether the agency will have the resources needed to send examiners to every bank exam. If it doesn’t have the bodies or the resources, it just can’t do it. That could lead to problems in the future if the current language in the bill makes it into law. If the new agency could send its examiners to check on things like deceptive credit card and lending practices at smaller banks — but it isn’t mandated — the next fight could be over funding. “It’s a time-honored lobbying trick,” said someone involved in the current debate, who spoke candidly on the condition of anonymity. If the current provision survives, “the next fight will be to scale back [the agency's] funding, to tinker with its resources,” this person said. “There’s a lot of ways to skin a cat.”

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Environmentalists Concerned That Senate Dems Will Permit Drilling In Climate Change Negotiations

October 9, 2009

The Hill reports that environmentalists are expressing unease that Democrats will permit more offshore drilling in the Senate’s climate change bill. Sen. John Kerry, who co-sponsored the bill with Sen. Barbara Boxer, is reportedly talking to Senate Republicans about expanding drilling access in exchange for GOP support. Also of concern to the environmental lobby is a section of the bill that expresses support for a nuclear “renaissance,” as a new, more widely-used source of power. “You’re trying to solve a climate crisis and you are going to drill for more oil?” asked Jim Riccio of Greenpeace. “How does that make any sense whatsoever?” The New York Times reports that appeasing Republicans without offending environmentalists could prove problematic. “That’s a very careful balancing act that [Senate Majority Leader] Harry Reid is going to have to play if he goes down that road,” said Dan Holler, who analyzes the Senate for the conservative Heritage Foundation… Adding even more new drilling to Senate proposals could prompt several Democrats to drop support from an energy and climate package, said one petroleum industry lobbyist. “I don’t know what the net gain is here,” this lobbyist said.

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Derivatives Lobby Hooks Up With New Dems To Water Down Reform Bill

October 9, 2009

Bloomberg News reports Friday morning that the derivatives lobby has put a bug in the ear of the New Democrat Coalition . JPMorgan Chase, Goldman Sachs, and Credit Suisse lobbied New Dem Reps. Mike McMahon (D-N.Y.) and Melissa Bean (D-Ill.) “to expand the ways the legislation allows dealers and major investors to trade the contracts,” according to Bloomberg . The result of the banks’ lobbying effort seems to be draft legislation that could actually exempt most financial firms from a wide swath of derivatives regulations. The discussion draft put forth by House Financial Services Committee chairman Barney Frank (D-Mass.), Bloomberg reported Thursday , would not regulate derivatives used by financial companies for the rather ambiguous purpose of “risk management.” (Check out HuffPost’s Jason Linkins’ take on the wild world of derivatives here .) At stake in the legislation could be a significant portion of the tens of billions of dollars that commercial banks make in the largely unregulated derivatives market each year. U.S. banks made $5.2 billion in the second quarter of 2009, a 225 percent increase from the same period last year. New Democrats praised Frank last week for the bill. New Dem chairman Rep. Joe Crowley (D-N.Y.) said in a statement, “I congratulate my fellow New Dem Members, 15 of whom serve on the Financial Services Committee, for their work with Chairman Frank to reform our financial system to provide greater protections for American consumers and businesses while ensuring continued access to valuable tools to manage risk.” At a Wednesday hearing on the legislation, administration officials called Frank’s plan too weak. Gary Gensler, the chairman of the Commodity Futures Trading Commission, said the bill would allow financial firms too many exemptions from regulation. “We stay particularly vulnerable because we haven’t filled the [regulatory] gaps,” Gensler told the Huffington Post Investigative Fund in an exclusive video interview this week. Derivatives, despite their role in the near-collapse of the entire world economy, were not important enough for a some members of the House agriculture committee to sit through a hearing on their regulation in September. Instead, Reps. Blaine Luetkemeyer (R-Mo.) and Kathy Dahlkemper (D-Pa.) skipped out for fundraisers . Check out Bloomberg’s awesome story here .

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Big Pharma Getting Billions More Than Reported Out Of Senate Finance Bill

September 29, 2009

The introduction of the Senate Finance Committee’s health care proposal turns the focus from what the pharmaceutical industry will contribute to reform efforts toward what manufacturers stand to gain. The pharmaceutical industry could see an increase of approximately $115 billion over 10 years in U.S. drug sales as a direct result of the Senate Finance Committee’s health reform legislation – at least by one way of slicing up the numbers used in economic analyses underlying the bill.

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LilSis: Top Drug Industry Lobbyist Considered For Kennedy’s Seat

September 21, 2009

The LilSis Blog reports that a former lobbyist could temporarily fill the seat of the late Sen. Ted Kennedy. The blog reports that Nick Littlefield, Kennedy’s former chief of staff, is among those being considered for an appointment to the Senate seat by Massachusetts Gov. Deval Patrick. Littlefield is the chair of lobbying at Boston law firm Foley Hoag. Over the last six months the firm has brought in more lobbying money from pharmaceutical interests than any other firm in history — $2.6 million, according to LilSis. The Massachusetts House of Representatives approved a bill that would allow for a temporary appointment to fill the Senate seat until the state can hold a special election. The Massachusetts Senate must approve the bill for it to become law but Gov. Deval Patrick has indicated that he will sign the bill if it reaches his desk, reports the Christian Science Monitor . — Jenna Staul

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More on Housing Tax Credit

September 16, 2009

From Bloomberg: Homebuyer Tax-Credit Extension Gains Lawmaker Support An extension of the $8,000 U.S. homebuyer tax credit is gaining support in the Senate as bill sponsor John Isakson said he is rallying lawmakers to continue a program that helped boost home sales by more than 1 million. “I’m working the floor now to make everyone aware that the $8,000 credit sunsets on Nov. 30,” Isakson, a Georgia Republican, said in an interview today. The former real estate executive says he is “talking to everybody and anybody.” This is terrible policy , and hopefully the bill will be scuttled. Meanwhile the usual suspects are lining up to support the bill: Realtors, bankers and homebuilders have joined in the push, starting a campaign that encourages Congress to extend the program for one year … White House spokesman Robert Gibbs told reporters today that President Barack Obama’s economic team is looking at the tax credit and “evaluating the impact” on new home sales. “Through that evaluation we’ll come to something to give the president a recommendation,” Gibbs said. … The bill has at least 15 co-sponsors including Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and senators Patty Murray, a Washington Democrat, and Joe Lieberman, a Connecticut independent. What is wrong with Connecticut?

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Public Option Isn’t Vital to U.S. Health Reform, Teamsters President Says

September 4, 2009

By Holly Rosenkrantz Sept. 4 (Bloomberg) — Teamsters President James Hoffa said dropping the so-called public option wouldn’t be a “deal killer” for health-care legislation, signaling a split among leaders of unions that are a core constituency of President Barack Obama . “We’ve got to find out what’s doable,” Hoffa, head of the International Brotherhood of Teamsters, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt ,” which airs today. “I think it’s important to get something done this time and declare a victory.” Hoffa’s position adds to debate among Obama supporters over how best to accomplish an overhaul of the U.S. health-care system, the president’s top domestic priority. Richard Trumka , who takes over as president of the 11 million-member AFL-CIO this month, said Sept. 1 that a government-run insurance program known as the public option is an “absolute must.” There are no litmus tests when it comes to health-care legislation, Hoffa said. Dropping the public option is “not a deal killer,” the leader of the 1.4 million-member Teamsters union said. “The goal is to go after those 50 million people that don’t have health care.” Obama plans to make the case for his approach to health- care legislation in a prime-time address to a joint session of Congress next week. The Teamsters is one of seven labor unions that left the AFL-CIO federation in 2005 because of disagreements over priorities. Hoffa said he doesn’t expect the unions, which formed a rival coalition called Change to Win, to reunify with the AFL-CIO, even after reconciliation talks this year. Litmus Test Hoffa said he isn’t willing to compromise on another priority for organized labor, the so-called card-check bill that would make it easier for workers to form unions. “This is a litmus test,” he said of the Employee Free Choice Act, which is stalled in the Congress after labor leaders had pushed for the measure to be taken up in the first 100 days of Obama’s administration. The legislation lacks the 60 votes needed to force action on the Senate floor over Republican objections. Hoffa said his union may not support Senator Arlen Specter’s re-election bid because the Republican-turned-Democrat from Pennsylvania hasn’t fully supported the bill. “Those people out there that say they’re Democrats and see our ideas, that can’t back us on something that’s so basic as this — we’re certainly scoring,” he said. FedEx, UPS Senators Blanche Lincoln and Mark Pryor of Arkansas and Mary Landrieu of Louisiana are among the Democrats who have said they may not support the union bill, after voting for an earlier version of the legislation. Specter, who is running for a sixth term, has reversed his position on the bill several times this year, and has said he now plans to support efforts to bring a “modified” version to a vote. Hoffa said he expects the Senate to pass the bill this year, along with another measure backed by his union that would make it easier for FedEx Corp. ground workers to join the same unions that represent employees of United Parcel Service Inc. The House of Representatives approved the legislation in May. The Senate hasn’t crafted its version of the bill. “The Teamsters are very interested in organizing FedEx,” Hoffa said. To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net .

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Union Chief Hoffa Says Public Option Isn’t Essential to U.S. Health Reform

September 3, 2009

By Holly Rosenkrantz Sept. 3 (Bloomberg) — Teamsters President James Hoffa said he wouldn’t object to dropping the “public option” from health-care legislation, signaling a split among leaders of unions that are a core constituency of President Barack Obama . “We’ve got to find out what’s doable,” Hoffa, head of the International Brotherhood of Teamsters, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt ,” which airs this weekend. “I think it’s important to get something done this time and declare a victory.” Hoffa’s position adds to debate among Obama supporters over how best to accomplish an overhaul of the U.S. health-care system, the president’s top domestic priority. Richard Trumka , who takes over as president of the 11 million-member AFL-CIO this month, said Sept. 1 that a government-run insurance program known as the public option is an “absolute must.” There are no litmus tests when it comes to health-care legislation, Hoffa said. Dropping the public option is “not a deal killer,” the leader of the 1.4 million-member Teamsters union said. “The goal is to go after those 50 million people that don’t have health care.” Obama plans to make the case for his approach to health- care legislation in a prime-time address to a joint session of Congress next week. The Teamsters is one of seven labor unions that left the AFL-CIO federation in 2005 because of disagreements over priorities. Hoffa said he doesn’t expect the unions, which formed a rival coalition called Change to Win, to reunify with the AFL-CIO, even after reconciliation talks this year. Litmus Test Hoffa said he isn’t willing to compromise on another priority for organized labor, the so-called card-check bill that would make it easier for workers to form unions. “This is a litmus test,” he said of the Employee Free Choice Act, which is stalled in the Congress after labor leaders had pushed for the measure to be taken up in the first 100 days of Obama’s administration. The legislation lacks the 60 votes needed to force action on the Senate floor over Republican objections. Hoffa said his union may not support Senator Arlen Specter’s re-election bid because the Republican-turned-Democrat from Pennsylvania hasn’t fully supported the bill. “Those people out there that say they’re Democrats and see our ideas, that can’t back us on something that’s so basic as this — we’re certainly scoring,” he said. FedEx, UPS Senators Blanche Lincoln and Mark Pryor of Arkansas and Mary Landrieu of Louisiana are among the Democrats who have said they may not support the union bill, after voting for an earlier version of the legislation. Specter, who is running for a sixth term, has reversed his position on the bill several times this year, and has said he now plans to support efforts to bring a “modified” version to a vote. Hoffa said he expects the Senate to pass the bill this year, along with another measure backed by his union that would make it easier for FedEx Corp. ground workers to join the same unions that represent employees of United Parcel Service Inc. The House of Representatives approved the legislation in May. The Senate hasn’t crafted its version of the bill. “The Teamsters are very interested in organizing FedEx,” Hoffa said. To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net .

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U.S. House Approves Bill to Overhaul Food-Safety Laws in Wake of Recalls

July 31, 2009

By Brian Faler July 31 (Bloomberg) — The U.S. House approved the biggest overhaul of food-safety laws in decades in the wake of outbreaks of food-borne illnesses that sickened, killed and left industries fighting to woo back wary consumers. The chamber voted 283 to 142 yesterday to approve a $3.5 billion measure that would direct the Food and Drug Administration to write new regulations to safeguard the food supply, require more frequent inspections of processing plants and force companies to keep better records to help regulators trace outbreaks.

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House Panel Vote on Health-Care Bill Sought by Democrats Amid Party Clash

July 25, 2009

By Laura Litvan and Brian Faler July 25 (Bloomberg) — Democratic leaders will try to push a health-care overhaul bill through its final House committee next week to clear the way for a floor vote even as clashes within the party leave the measure’s passage in doubt. House Majority Leader Steny Hoyer said “significant and positive progress” occurred yesterday when some Democrats agreed to add to the bill a plan to curb the growth of Medicare spending. Still, the accord didn’t fully satisfy a group of self- described fiscally conservative “Blue Dog” Democrats who could block the measure’s approval by the Energy and Commerce Committee.

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"Madoff" Bill Would Charge Rich Criminals For Jail

July 20, 2009

For anyone who believes crime doesn’t pay, tell that to the New York state legislator who introduced a “Madoff” bill on Monday. Rich New Yorkers convicted of crimes would be forced — if his bill becomes law — to pay the state and federal governments for how much it costs to keep them in jail.

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