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Wisconsin Union Bill Passes State Assembly

March 10, 2011

MADISON, Wis. — Wisconsin lawmakers voted Thursday to strip nearly all collective bargaining rights from the state’s public workers, ending a heated standoff over labor rights and delivering a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide. The state’s Assembly passed Gov. Scott Walker’s explosive proposal 53-42 without any Democratic support and four no votes from the GOP. Protesters in the gallery erupted into screams of “Shame! Shame! Shame!” as Republican lawmakers filed out of the chamber and into the speaker’s office. The state’s Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night, meaning the plan that delivers one of the strongest blows to union power in years now requires only Walker’s signature to take effect. He says he’ll sign the measure, which he introduced to plug a $137 million budget shortfall, as quickly as possible – which could be as early as Thursday. “We were willing to talk, we were willing to work, but in the end at some point the public wants us to move forward,” Walker said before the Assembly’s vote. Walker’s plan has touched off a national debate over labor rights for public employees and its implementation would be a key victory for Republicans, many of whom have targeted unions amid efforts to slash government spending. Similar bargaining restrictions are making their way through Ohio’s Legislature and several other states are debating measures to curb union rights in smaller doses. In Wisconsin, the proposal has drawn tens of thousands of protesters to the state Capitol for weeks of demonstrations and led 14 Senate Democrats to flee to Illinois to prevent that chamber from having enough members present to pass a plan containing spending provisions. But a special committee of lawmakers from the Senate and Assembly voted Wednesday to take all spending measures out of the legislation and the full Senate approved it minutes later, setting up Thursday’s vote in the Assembly. Walker has repeatedly argued that collective bargaining is a budget issue, because his proposed changes would give local governments the flexibility to confront the budget cuts needed to close the state’s $3.6 billion deficit. He has said without the changes, he may have needed to lay off 1,500 state workers and make other cuts to balance the budget. The measure forbids most government workers from collectively bargaining for wage increases beyond the rate of inflation unless approved by referendum. It also requires public workers to pay more toward their pensions and double their health insurance contribution, a combination equivalent to an 8 percent pay cut for the average worker. Police and firefighters are exempt. ___ Associated Press writers Todd Richmond and Jason Smathers contributed to this report.

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Obama praises US Senate passage of patent-reform bill

March 9, 2011

Obama praises US Senate passage of patent-reform bill

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Richard Grenell: Hollywood Follows Wall Street?

March 4, 2011

Hollywood is supposed to be the place where people take risks. It’s the place where the industry types push the limits anew and create something fresh from the faint. It’s not supposed to be a place where yesterday is the standard. But this week, the Hollywood establishment made two choices that puzzled the forward looking — the Oscar for Best Picture went to the safest movie The King’s Speech , and the studio heads picked ethically challenged Chris Dodd to lead the Motion Picture Association of America (MPAA). In the press release announcing his appointment as the new MPAA Chairman and CEO, studio heads credited Dodd as “battle-tested” and experienced at “consensus-building”. But for anyone paying any attention to what’s happening in Washington these days, he’s one of the last people Hollywood needs representing them in the nation’s capital. For the last 30 years, Dodd has been a polarizing partisan in Washington. He’s a “proud Democrat” who considers bipartisanship a talking point rather than a philosophy. In fact, when The Hill — one of two daily newspapers focused on Capitol Hill — surveyed every Senator in 2009 for their opinions on bipartisanship among their ranks, Dodd was named the third least bipartisan member of the Senate. The studio heads are obviously partisans themselves but they shouldn’t also be foolish. A simple study of the political lay of the land for 2012 shows the Democrats in the Senate headed for a major defeat. If polls are accurate, Dodd will be expected to deliver votes from the majority Republican Party he has trash-talked for three decades. While political expediency may seem inconsequential to Hollywood, it’s a critical issue inside the Beltway. The Democratic Party has long embraced Hollywood — supporting legislative agendas, making major campaign contributions and tolerating its creativity when critics complain the entertainment industry is out-of-touch with America. And Hollywood’s outreach to conservatives has been almost non-existent. The one-sided strategy is a big risk and having Dodd lead it is even more dangerous. As revolutions in technology and international distribution continue to risk Hollywood’s current status quo, the last person the industry needs as its spokesman is banking specialist Dodd. Sending Dodd to Washington means Hollywood is looking to replicate Wall Street’s behavior of the last decade. Dodd gave us the multi-billion dollar bailouts and failures of AIG, Bear Stearns and Countrywide from his perch as Chairman of the Banking Committee. Why would Hollywood studio executives want to create the sequel if the original flopped? American taxpayers have seen this movie before. Grenell and Chase are Principals at Capitol Media Partners, an international strategic media affairs firm based in Los Angeles.

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Wisconsin Layoff Notices Coming Tomorrow

March 3, 2011

MADISON, Wis. — Wisconsin Gov. Scott Walker said Thursday that he will issue layoff notices to 1,500 state workers on Friday if his proposal forcing them to pay more for benefits and taking away nearly all their collective bargaining rights isn’t passed by then. Walker also said in an interview with The Associated Press that he is negotiating with Democrats who stymied passage of the bill by leaving the state for changes to the proposal that would get them to return. Walker said he won’t compromise on the collective bargaining issue or anything that saves the state money. “I can’t take any of that off the table,” he said. Walker’s budget proposal hinges on the state saving $330 million over two years from forcing state workers to pay more for their benefits. He’s also cutting aid to schools and local governments by about $1 billion, reductions he says they can’t handle without the freedom he gives them through eliminating nearly all collective bargaining with public workers. Walker said he has to issue the layoff notices starting Friday so the state can start to realize the $30 million savings he had assumed would come from the state worker concessions contained in the bill. The layoffs wouldn’t be effective for 31 days, and Walker said he could rescind them if the bill passed in the meantime. All state workers, except those in prisons, state hospitals and other facilities open around the clock, would be potential layoff targets, he said. “We’ll prepare them, let them out by the end of the day,” Walker said. “I pushed it off as long as I could … I do not want to have layoffs.” As for the Senate Democrats, Walker said he was talking with some of the “more reasonable members” about a deal that could get them to come back. “I’m still cautiously optimistic we can get this done,” Walker said. “I think we’re close, but the problem is we thought we were close the past couple days.”

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Ohio Anti-Union Bill Passes State Senate

March 2, 2011

COLUMBUS, Ohio — The bargaining rights of public workers in Ohio would be dramatically reduced and strikes would be banned under a bill narrowly passed by the Ohio Senate on Wednesday. The GOP-backed measure that would restrict the collective bargaining rights of roughly 350,000 teachers, firefighters, police officers and other public employees squeaked through the state Senate on a 17-16 vote. Six Republicans sided with Democrats against the measure. Firefighters and teachers shouted “Shame!” in the chamber as the legislation was approved and moved on to the GOP-controlled House, where it is likely to receive strong support. The bill is similar to the Republican-supported collective bargaining bill in the Wisconsin legislature that has sparked national debate in its weakening of public employees’ ability to negotiate contracts – although there are differences between the two. Wisconsin’s bill exempts police and firefighters from the collective bargaining restrictions, while Ohio’s does not. The Ohio bill would ban strikes by public workers and establish penalties for those who do participate in walkouts. Unionized workers could negotiate wages, hours and certain work conditions – but not health care, sick time or pension benefits. The legislation would also set up a new process to settle worker disputes, giving elected officials the final say in contract disagreements. Binding arbitration, which police officers and firefighters use to resolve contract disputes as an alternative to strikes, would be eliminated. “It’s a fair bill,” said Ohio Senate President tom Niehaus, a southwest Ohio Republican. “It’s more balanced and fair for the taxpayer whose money these elected officials will ultimately spend.” But Sen. Edna Brown, a Toledo Democrat, said the bill muzzles public employees. “This bill tilts the balance of power toward management and does not give one new right to employees,” she said. Ohio Gov. John Kasich, a Republican like his counterpart, Scott Walker, in Wisconsin, praised the development. Both have pushed the collective bargaining bills as part of budget-balancing measures. “This is a major step forward in correcting the imbalance between taxpayers and the government unions that work for them,” Kasich said. Republican Sens. Tim Grendell of Chesterland and Bill Seitz of Cincinnati spoke out against that provision. Grendell said the process would turn workers into beggars before city councils and other officials who oversee them. “No one can be a judge and advocate in their own cause,” Seitz said. “That’s called heads I win, tails you lose.” The bill had passed a Senate committee after leadership replaced Seitz on the panel after he expressed disappointment in the bill, a move that secured the votes needed to get the legislation before the full Senate. Extra chairs had to be brought in to accommodate the public attending the hearing. Prohibited from clapping, many wagged or waved their hands in response to pro-labor comments. The bill now goes to the state House, where the GOP holds a 59-40 majority. If passed there, it would go to Kasich, a strong supporter. During the debate, the chamber defeated Democrats’ request to have the entire bill read aloud. GOP Sen. Scott Oelslager of North Canton sided with Democrats on that issue, as he did on the bill. The bill sponsor, Republican Sen. Shannon Jones, had said the bill, which would change a 27-year-old Ohio law, is long overdue and would help state and local governments control costs. Jones said the bill is not an attack on the middle class, prompting snickering and coughs from members of the public in the crowded room. Democratic lawmakers pointed out teachers, pipefitters and public safety workers from their districts as the hearing began.

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Stopgap Budget Proposal To Be Sent To Obama

March 2, 2011

WASHINGTON — The Senate on Wednesday sent President Barack Obama a Republican-drafted stopgap funding bill that trims $4 billion from the budget, completing hastily processed legislation designed to keep partisan divisions from forcing a government shutdown. Moments later, Obama called on congressional leader to meet with top administration figures including Vice President Joe Biden to discuss a longer-term measure to fund the government through Sept. 30. “We can find common ground on a budget that makes sure we are living within our means,” Obama said. “This agreement should be bipartisan, it should be free of any party’s social or political agenda, and it should be reached without delay.” The White House said Obama will sign the bill. Congressional Republicans said it’s up to Democrats to offer an alternative to carry into the talks. They have yet to produce one to respond to a $1.2 trillion omnibus spending measure that passed the House last month. “The House position is perfectly clear. We cut $100 billion off the president’s request for this fiscal year,” said House Speaker John Boehner, R-Ohio. “We have no clue where our colleagues on the Senate side are.” The Senate cleared the temporary measure by an overwhelming 91-9 vote that gives the GOP an early but modest victory in its drive to rein in government. Obama has until Friday to sign the measure and keep federal offices open and operations intact. The House passed the legislation on Tuesday. The measure buys time for Obama, the GOP-dominated House and the Democratic-led Senate to start talks on legislation to fund the government through the end of September. House Republicans last month muscled through a measure cutting this year’s budget by more than $60 billion from last year’s levels – and $100 billion from Obama’s request – while trying to block implementation of Obama’s health care law and a host of environmental regulations. The White House has promised a veto and it will take weeks or months to negotiate a compromise funding measure that Obama would sign. Federal Reserve Chairman Ben Bernanke said in testimony Wednesday that the House GOP spending cuts plan would reduce economic growth by as much as two-tenths of a percentage point and hurt job growth. “That would translate into a couple hundred thousand jobs,” Bernanke said. “It is not trivial.” The $4 billion in savings comes from some of the easiest spending cuts for Congress to make, hitting accounts that Obama already has proposed eliminating and reaping some of the money saved by earlier moves by Republicans to ban lawmakers from “earmarking” pet projects for their districts and states. At issue are the operating budgets of every federal agency, including the Pentagon, where Defense Secretary Robert Gates is increasingly anxious for a full-year funding bill. “Discretionary spending” represents about a third of the overall $3.8 trillion federal budget. “Our priorities are twofold. One, keep the government running so essential services don’t get interrupted,” said Senate Majority leader Harry Reid, D-Nev. “Equally important, we need to lay the groundwork with a budget that keeps what works and cuts what doesn’t.” Some Republicans were restive that the bill didn’t cut further. “While some have been patting themselves on the back for proposing $4 billion in so-called `cuts,’ in reality, this bill fully funds billions upon billions of dollars in wasteful, duplicative programs that should be eliminated, reduced, or reformed,” said freshman GOP Sen. Mike Lee of Utah. But other Republicans seized on the vote as setting a precedent for cuts of $2 billion a week – which, if extended through the end of the budget year, would match the $61 billion in cuts in a measure passed by the House last month to meet their promise of cutting federal agency operating budgets back to levels in place before Obama took office. “It’s hard to believe when we’re spending $1.6 trillion more than we’re taking in a single year, that it would take this long to cut a penny in spending, but it’s progress nonetheless,” said Senate GOP leader Mitch McConnell of Kentucky. “It’s encouraging that the White House and congressional Democrats now agree that the status quo won’t work, that the bills we pass must include spending reductions.” The White House has promised a veto of the bigger GOP measure, citing crippling cuts to many federal agencies and studies by economists that predict the spending cuts would harm the economy. The GOP won control of the House and gained seats in the Senate last fall with the backing of tea party activists demanding deep, immediate cuts in federal spending. They say that an early down payment on those cuts would send a confidence-building signal to financial markets and the business community. Still, difficult negotiations loom between House Republicans, Senate Democrats and the White House over the full-year spending measure. It blends cuts across hundreds of programs – education, the environment, homeland security and the IRS among them – with a slew of provisions that attack clean air and clean water regulations, family planning and other initiatives.

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Top Republican: ‘Senate May Approve’ Elizabeth Warren For CFPB

March 1, 2011

WASHINGTON — A top Republican broke with what he called “conventional wisdom” Tuesday morning, saying that consumer watchdog Elizabeth Warren is “very persuasive” and may be confirmed by the Senate to head the new Consumer Financial Protection Bureau. In an interview with CNBC, House Financial Services Committee Chairman Spencer Bachus (R-Ala.) expressed skepticism about the new CFPB and consumer protection regulation in general. Early in the segment, he said he didn’t think Warren, currently in charge of setting up the nascent CFPB, could win Senate confirmation as its director. Asked again, however, Bachus seemed to change his mind. “The odds-on conventional wisdom is she would not, but that’s up for the Senate. And they would have hearings, and she would be in — she’s a very persuasive individual and she — she may — the Senate may approve her nomination,” Bachus said. That wouldn’t have mattered as much, however, if the House GOP had convinced the Senate to adopt its proposed short-term budget for the federal government, which would slash the agency’s funding nearly in half. That controversial budget bill is likely to die in favor of a separate, shorter-term plan that could pass the Senate and avoid a government shutdown. But the intensity of the GOP’s attack on the agency caught many by surprise, after cautiously positive statements about Warren from Republicans including Rep. Randy Neugebauer of Texas and major bank lobbyists like Financial Services Roundtable CEO Steve Bartlett. In an interview with The Wall Street Journal , Neugeubauer said he was open to having Warren placed in the permanent director position, calling her “intelligent” and “a good listener.” “She wouldn’t be my last choice” for the CFPB post, Neugebauer told the Journal . “I don’t know whether she’s my first choice, but she certainly wouldn’t be my last choice.” But Neugebauer has also helped lead the charge in cutting the CFPB’s budget, an effort to hamstring its ability to enforce rules on credit cards, mortgages and payday loans. Of course, neither Bachus nor Neugebauer will have a vote on the permanent director position, but some Senate Republicans also appear to be warming to Warren. Last month, Sen. Olympia Snowe (R-Maine) hosted Warren at an event for small businesses, calling the consumer advocate “a key ally” in the debate over financial reform. Last fall, Obama appointed Warren to a special advisory post charged with setting up the new agency, but did not formally nominate her as director of the CFPB, a post which requires Senate confirmation. If a permanent director is not confirmed by July, the agency will lose jurisdiction over payday lenders and some mortgage companies. Bank lobbyists are pressing for a permanent director to be nominated. In a Tuesday conference call with reporters, Jess Sharp, executive director of the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, the nation’s preeminent business lobby, said he hoped that a permanent head would get through the Senate before July. If that was not possible, Sharp said, the CFPB should not enforce consumer protection laws until a permanent director is installed. Tuesday’s conference call was organized to promote a letter the Chamber sent to Congress, warning of what the lobby deemed “huge and ambiguous authority granted to the CFPB which can lead to overreach.” While it will likely be several months until the CFPB writes its own rules for credit cards, mortgages and other consumer loans, the new agency will inherit the authority to enforce existing consumer protection regulations from the Federal Reserve and the Office of the Comptroller of the Currency in July. Bachus previously expressed kind words for Warren in an interview with American Banker , saying, “She has tremendous charisma. She is a person you admire, you like. She has ability,” but cautioning that he didn’t know her “philosophy,” or that of the people she has hired at the CFPB.

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Wisconsin GOP Sends State Troopers After Democrat

February 18, 2011

MADISON, Wis. — Republicans in the Wisconsin state Senate have asked the governor to send state troopers after Democratic leader Mark Miller. Senate Democrats are boycotting a Senate vote on a bill that would strip public sector workers of their collective bargaining rights. They have been missing from the Capitol for a day and a half. Senate Majority Leader Scott Fitzgerald says he has asked Gov. Scott Walker to send two state troopers to Miller’s home in Monona. He says he believes the troopers are en route. The Wisconsin Constitution prohibits police from arresting legislators while they’re in session. Fitzgerald says he just wants to send a message to Miller – if he’s even home – that he must bring his caucus back to Madison.

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Wisconsin GOP Poised To Cut Worker Rights In Budget Fix

February 15, 2011

MADISON, Wis. — Wisconsin is poised to strip collective bargaining rights from most of the state’s 175,000 public employees in the boldest step by a new Republican governor and Legislature to solve budget problems by confronting organized labor. The state Senate and Assembly are expected to vote as soon as Thursday on Gov. Scott Walker’s plan to end collective bargaining for all state, county and local workers except for police, firefighters and the state patrol. More than 10,000 public employees workers staged demonstrations at the state Capitol Tuesday to protest the measure, banging on drums and screaming “Save our state!” and “Kill the bill!,” and a parade of witnesses testified before lawmakers about the impact on middle-class families. But legislative leaders said Walker now has enough support in both chambers to approve the measure, which he said is necessary to address a projected $3.6 billion budget deficit. “We’re broke and we don’t want to lay off almost 20,000 people,” said Senate President Mike Ellis, a Republican, who added, “They’ve got the votes to pass it.” Union representatives were attempting to sway key moderates for a compromise but Democrats said the bill would be tough to stop. “The Legislature has pushed these employees off the cliff but the Republicans have decided to jump with them,” said Sen. Bob Jauch, one of 14 Democrats in the 33 member chamber. New Republican governors and legislatures in other states have proposed cutting back on public employee costs to reduce budget shortfalls, but Wisconsin’s move appears to be the earliest and most extensive. The state has long been a stronghold of organized labor. But the election of Walker, an outspoken conservative, last November and the GOP’s seizing of control of both legislative chambers set the stage for a dramatic reversal. Walker’s plan would make workers pay half the costs of their pensions and at least 12.6 percent of their health care premiums. State employees’ costs would go up by an average of 8 percent. The changes would save the state $30 million by June 30 and $300 million over the next two years. Unions could still represent workers, but could not seek pay increases above the Consumer Price Index unless approved by a public referendum. Unions also could not force employees to pay dues and would have to hold annual votes to stay organized. Local police, firefighters and state troopers would retain their collective bargaining rights. In exchange for bearing more costs and losing leverage, public employees were promised no furloughs or layoffs. Walker has threatened to order layoffs of up to 6,000 state workers if the measure did not pass. Wisconsin is one of about 30 states with collective bargaining laws covering state and local workers. Walker has argued that the public employee concessions are modest considering what private sector workers have suffered during the recession. But Democratic opponents and union leaders said Walker’s real motive was to strike back at political opponents who have supported Democrats over the years. Protesting workers arrived in buses from across the state and poured into the Capitol, where they rallied under the watch of a large security force. Protesters chanted, waved signs and occasionally applauded testimony broadcast from the legislative hearing on monitors set up in the Rotunda. “We’re focusing on being heard as a people, as one, all the unions,” said Michael Hyde, a sergeant at the prison in Waupun. “Government is supposed to be our representative.” Kathy Lusiak, 59, a computer lab aide at Prairie Lane Elementary School in Kenosha, said the bill would cost her about a third of her $21,000-per-year salary. “I’m totally shocked. I never thought it would be this drastic,” said Lusiak, who joined the protest. “It’s very much a nightmare scenario.” The public employee bill is the latest that Walker has pushed through the GOP-controlled Legislature in rapid order since taking office in January. He’s also signed into law tax cuts for businesses that relocate to Wisconsin and those that create jobs and sweeping lawsuit reform. To achieve additional budget savings, he is seeking authority to make changes in the Medicaid program, sell state power plants and restructure existing debt to save about $165 million. Democrats, who lost the governor’s office and control of the Legislature in the November midterm elections, have been powerless to stop to the juggernaut. Republicans hold a five vote margin in the Senate and a 57-38-1 edge in the Assembly. The threat of layoffs helped many lawmakers reluctant to compromise. “Anybody who promises you that there’s an easier way to close this gap is trying to sell you something,” Senate Majority Leader Scott Fitzgerald said in an open letter to Wisconsin workers. Governors in a number of other states, including Ohio, Indiana, Nevada and Tennessee, have called for forcing concessions from public employee unions but no similar measures have moved to final action.

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Top Government Watchdog Stepping Down

February 14, 2011

WASHINGTON — The government’s top watchdog over the $700 billion financial bailout said Monday that he will step down next month, after leading an office that uncovered millions of dollars in fraud among potential recipients. Neil Barofsky said in a letter to President Barack Obama that he will leave this job as special inspector general for the Troubled Asset Relief Program on March 30. A spokeswoman says Barofsky believes the office met the goals that he laid out for it: deterring fraud, improving transparency and overseeing the government’s management of the bailouts. Barofsky led investigations that resulted in 14 criminal fraud convictions of bankers. The office’s enforcement staff followed leads from a tip line Barofsky set up and from banks’ applications for bailout money. It was the only watchdog overseeing the bailout that had law enforcement authority. His office saved taxpayers $553 million by recognizing fraud at Colonial Bank and halting the Treasury Department’s plan to send the bank money. Colonial collapsed months later. It was the sixth-largest U.S. bank failure. Barofsky criticized both the Obama and Bush administration. He blasted Treasury Secretary Timothy Geithner and his predecessor, Henry Paulson, in a series of audits of the bailout fund, which was created by Congress in October 2008. The audits examined issues such as Geithner’s role in the rescue of American International Group Inc. and the department’s decision to close of thousands of auto dealers. Barofsky’s audits often prodded Treasury to make its bailout decisions more transparently. The office also grabbed headlines during the crisis by emphasizing the worst-possible outcomes of decisions that it criticized. For example, Barofsky wrote in mid-2009 that the government’s support programs totaled $23.7 trillion. That number represents the maximum size of 50 separate programs related to the crisis and the recession. It was not an estimate of possible losses. White House spokeswoman Amy Brundage said in a statement that Barofksy “provided strong oversight of the TARP program for the past two years.” “We are grateful for Mr. Barofsky’s service,” she said. Barofsky’s spokeswoman said Barofsky’s top deputy, Christy Romero, will become acting special inspector general next month. Romero formerly was an enforcement lawyer with the Securities and Exchange Commission. Barofsky is a former federal prosecutor who was nominated by President George W. Bush in November 2008. He was confirmed unanimously by the Senate the following month.

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Video: Gregg Faults Obama for Lack of Leadership on Budget

February 14, 2011

Feb. 14 (Bloomberg) — Former U.S. Senator Judd Gregg, a New Hampshire Republican who chaired the Senate Budget Committee, discusses President Obama’s proposed $3.7 trillion budget for fiscal 2012 and the recommendations of the Simpson-Bowles deficit-reduction commission. Gregg speaks with Scarlet Fu and Peter Cook on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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‘Death Panel’ For Elmo?

February 12, 2011

House Republicans called for cuts in hundreds of programs across the face of government Friday night in a $61 billion savings package toughened at the last minute at the demand of tea party-backed conservatives. From education to job training, the environment and nutrition, few domestic programs were left untouched – and some were eliminated – in the measure, which is expected to reach the floor for a vote next week. Among the programs targeted for elimination are Americorps and the Corporation for Public Broadcasting. In contrast, spending on defense and veterans’ programs were protected. U.S.News & World Report notes that liberal groups, along with public radio and television stations, are preparing for a showdown with House Republicans over the budget cut proposal. “Fans of Big Bird and All Things Considered ” are reportedly readying for battle as well. “They probably think that no one will notice these cuts in the midst of so many others. But the millions of listeners and viewers who rely on public broadcasting for Sesame Street, All Things Considered, and independent journalism will notice,” said MoveOn.org in an urgent E-mail just sent out. “We need to tell Republicans that cutting off funding was unacceptable last time they were in charge, and it’s unacceptable now,” said MoveOn. The New York Times reports : It blocks the spending of about $2 billion in unused economic stimulus money and seeks to prevent the Internal Revenue Service from enforcing the new health care law. The measure also cuts financing directly from the office of the president. The measure marks an initial down payment by newly empowered Republicans on their promise to rein in federal deficits and reduce the size of government. In a statement, House Majority Leader Eric Cantor, R-Va., called the measure “a historic effort to get our fiscal house in order and restore certainty to the economy. .This legislation will mark the largest spending cut in modern history and will help restore confidence so that people can get back to work.” Democrats harshly criticized the bill within moments of its formal unveiling, signaling the onset of weeks of partisan struggle over spending priorities. House Democratic leader Nancy Pelosi issued a statement calling the bill irresponsible, adding that it would “target critical education programs like Head Start, halt innovation and disease research, end construction projects to rebuild America and take cops off the beat.” But first-term Republican conservatives claimed victory after forcing their own leadership to expand the measure after rejecting an earlier draft as too timid. “$100 billion is $100 billion is $100 billion,” said Rep. Tim Scott R-S.C., referring to amount the revised package would cut from President Barack Obama’s budget request of a year ago. That was the amount contained in the Republican “Pledge to America” in last fall’s campaign, and when party leaders initially suggested a smaller package of cuts this week, many of the 87-member freshman class who have links to the tea party rebelled. In fact, even some Republicans acknowledged privately the legislation will cut about $61 billion from current spending on domestic spending. Some of the largest cuts would be borne by WIC, which provides nutritional support for women and infants, cut by $747 million, and training and employment grants to the states, ticketed for a $1.4 billion reduction. In addition, Republicans proposed a 43 percent cut in border security fencing and a 53 percent reduction in an account used to fund cleanup of the Great Lakes. The measure also asserts Republican priorities in several contentious areas. It prohibits the Nuclear Regulatory Commission from terminating plans for a nuclear waste site at Yucca Mountain in Nevada – a direct challenge to Senate Majority Leader Harry Reid, D-Nev. Reid dissented quickly, issuing a statement that said, “Any attempt to restart the Yucca Mountain project will not happen on my watch as Senate majority leader.” The Environmental Protection Agency would be banned from regulating greenhouse gases, linked to global warming, from fixed sources such as factories. The District of Columbia could not use federal funds to run a needle-exchange program for drug users. While a 48-hour revolt by tea party-backed conservatives roiled the party this week, its conclusion could mean an easier path to passage for the spending cut bill when it reaches the House floor. “The leadership responded to the concerns of those who are far to the right of the middle,” said Scott. The cuts will become part of a spending bill that is needed to keep the government in operation through the Sept. 30 end of the fiscal year. The current funding authority expires on March 4. Passage in the Republican-controlled House would send the bill to the Senate, where Democrats control a majority and are certain to support more generous funding levels. Barring a compromise before March 4, the two houses will be under pressure to agree on a short-term bill to keep the federal government operating without interruptions. Even that could prove difficult, though, and Democrats assert that Republicans will resort to a government shutdown to get their way. “It is time for the House Republicans to stop with the games and finally rule out a government shutdown once and for all,” said Sen. Chuck Schumer, D-N.Y. “Stop being coy about it and take it off the table.” Congressional Republicans were damaged politically in 1995 when a protracted dispute over funding with President Bill Clinton led to a government shutdown.

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For-Profit College Recruiters Taught To Use ‘Pain,’ ‘Fear,’ Internal Documents Show

February 8, 2011

Newly-released internal training documents from several for-profit colleges illustrate a culture that encourages recruiters to increase enrollment by focusing on emotions such as “pain” and “fear” to attract low-income students who are struggling with adverse personal and financial circumstances. The documents, obtained by a Senate oversight committee, shed light on the high-pressure recruiting tactics employed by some for-profit schools to increase enrollment numbers and the profits that come from federal student-aid dollars. “Remind them of what things will be like if they don’t continue forward and earn their degrees,” reads one document obtained from ITT Technical Institute, a for-profit school with more than 100 campuses across the country. “Poke the pain a bit and remind them who else is depending on them and their commitment to a better future.” The Senate Health, Education, Labor and Pensions Committee has conducted a series of hearings probing the for-profit education sector during the past year. Sen. Tom Harkin (D-Iowa), who chairs the committee, referenced the documents in a Monday-evening speech on the Senate floor. For-profit colleges are facing increased scrutiny and new regulations amid growing evidence of aggressive and deceptive recruiting tactics and a disproportionate number of students defaulting on federal loans. Critics of the industry have pointed to the tremendous amounts of money such schools spend on marketing and recruiting in order to get more students — and their federal aid funds — in the door. Harkin’s committee has requested a series of internal training documents from numerous for-profit schools. Among the more eye-opening materials turned over to the committee were training guides from ITT and Kaplan University , which is owned by The Washington Post Co. (Read our look at Kaplan’s questionable tactics here .) The ITT training documents laid out a “Pain Funnel and Pain Puzzle” that describes a series of questions recruiters should ask prospective students in order to “poke the pain” and convince them to sign up for classes. “Level 1 Pain” questions focus on telling the story of a student’s performance in high school or in getting a GED. The recruiter is then instructed to continue probing, asking questions such as “What has not having a college education cost you?” and “What are you willing to change now, or have you given up trying to deal with the problem?” A similar document from Kaplan University encourages recruiters to “Keep digging until you uncover their pain, fears and dreams” and to “Get to their emotions and you will create the urgency!” The internal training guides shed light on recruitment methods that have long been criticized by student-advocacy groups as preying on uninformed, uneducated students who may have little chance of success once admitted to the schools. A Kaplan spokeswoman said the company discontinued the recruiting guide mentioning “pain” and “fear” last year. She pointed to a new company policy that allows students to withdraw free of charge within four or five weeks if they are not satisfied with the program “When students are enrolled through deception or fear, they are less prepared to meet the challenges of college,” Harkin said Monday evening on the Senate floor. “Rather than offering students a better life, these types of strong-arm, emotionally abusive tactics are all too typical of schools that have little or no interest in providing students the academic help and support they need for the students to succeed.” A Senate report released last year found extremely high turnover rates for students in the for-profit sector: 57 percent of students had withdrawn within a year, according to an analysis of students at 16 large for-profit schools between July 2008 and June 2009. A document obtained from a privately owned for-profit school, Vatterott Educational Centers Inc. noted that, “We deal with people that live in the moment and for the moment. Their decision to start, stay in school or quit school is based more on emotion than logic. Pain is the greater motivator in the short term.” Another Vatterott document described the target market for recruiters: “We serve the UN-DER world, Unemployed, Underpaid, Unsatisfied, Unskilled, Unprepared, Unsupported, Unmotivated, Unhappy, Underserved!” Officials at ITT and Vatterott did not respond to requests for comment Tuesday afternoon. Students at for-profit schools represent less than 15 percent of college enrollments nationwide, but take in a quarter of federal student-aid dollars and account for nearly half of all student loan defaults, according to data released last week by the Department of Education. A quarter of all students enrolled at for-profit schools defaulted on student loans within three years — more than twice the rate of students at public nonprofit colleges. Numerous corporations that own for-profit colleges — including the Apollo Group, which owns University of Phoenix, and Corinthian Colleges Inc., which runs the Everest College chain — derive more than 85 percent of their revenue from federal student aid. Read the “Pain Funnel” page from an ITT Tech training manual and read the full documents from the floor speech below: Below, the “Kaplan document”: And the Vatterrott College document, detailing sales targets: Read the full documents from the floor speech: Recruiting documents –

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Harry Reid Warns Of Government Shutdown

February 4, 2011

With only a few weeks until the Senate and House must approve new funding legislation to keep the country humming, Democrats are sounding an alarm: Republicans are willing to let the country go dark to score political points.

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Retail Sales Rise For The Sixth Month In A Row

January 15, 2011

Despite Federal Reserve chairman Ben Bernanke’s expectations of only moderate economic growth this year, Americans are less worried about losing their jobs and more willing to spend money . This change in attitude is reflected in the numbers. The Commerce Department reported that retail sales were up in December, the sixth month in a row, making for the strongest holiday sales retailers have seen in recent years. Sales rose 0.6 percent last month to $381 billion, lifting sales for the year by the largest amount in more than a decade. Speaking to the Senate Budget Committee last week Ben Bernanke expressed the hope that “a self-sustaining recovery in consumer and business spending may be taking hold.” Despite the private sector adding 113,000 last month and 50,000 jobs in November, Chris Christopher, the IHS Global Insight economist who conducted the analysis, expects the unemployment rate, currently 9.4 percent, to remain above 9 percent in 2011. “Businesses are hiring people, but they’re not hiring them at a fast enough rate because they’re waiting to see consumer spending increase more. They’re still a little hesitant,” Christopher said. Consumers are hesitant, too, according to Scott Hoyt, Senior Director of Consumer Economics at Moody’s Analytics . “There’s an abundance of evidence that consumers are being more conscious of their spending, certainly in comparison to before the recession,” he said. Bernanke expects this cycle of hesitance to continue impacting the economy for years to come. “It could take four to five more years for the job market to normalize fully,” he told the Senate Budget Committee. The increase in retail sales came mainly from auto dealerships, gas stations (because of price hikes, not increased demand), building material stores and health stores. Online and mail order retailers, as well as gardening and furniture businesses, did surprisingly well. Retail sales for department stores fell 1.6 percent in December after jumping 2.9 percent in November, according to IHS Global Insight’s analysis. This drop in December may have been the result of the desperate measures some stores took to attract consumers in previous months with Walmart, Gap and Sears staying open on Thanksgiving Day and luxury retailer Neiman Marcus , known for their hefty price tags, opened bargain outlets.

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Video: Portales’s Kos Says U.S. Labor Market in `Slow Recovery’

January 7, 2011

Jan. 7 (Bloomberg) — Dino Kos, managing director at Portales Partners LLC, discusses the December U.S. employment report, Federal Reserve Chairman Ben S. Bernanke’s testimony before the Senate Budget Committee and the outlook for Fed policy. Payrolls increased 103,000, compared with the median forecast of 150,000 in a Bloomberg News survey, Labor Department figures showed today in Washington. Kos speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Bruce Bartlett: Time to Reform the Budget Process

December 31, 2010

ne consequence of the Senate’s irresponsible delay in confirming Jacob Lew as director of the Office of Management and Budget is that Congress will have less time to finish its work on the budget next year. This week, the White House announced that the president’s budget won’t be sent to Capitol Hill until mid-February, a week later than usual. It probably won’t make much difference. For decades, the president’s budget has been dead on arrival in Congress. This wasn’t always the case. Before creation of the Congressional Budget Office in 1974, the White House had a virtual monopoly on budget numbers. Congress, therefore, had little choice but to work from the president’s baseline and accept his underlying assumptions, which meant that appropriations bills tended to adhere closely to presidential priorities.

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Video: Mathias Sees Progress on Trade, Taxes in Next Congress

December 29, 2010

Dec. 29 (Bloomberg) — Anne Mathias, director of research at MF Global, talks about the outlook for congressional legislation in 2011. Republicans took control of the House of Representatives in the Nov. 2 mid-term elections and shaved the Democratic majority in the Senate by six seats. The party will have 47 votes in next year’s session, Democrats 53. (Source: Bloomberg)

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Jeffrey Rubin: Will Car Sales Ever Rebound to Meet US Ethanol Targets?

December 28, 2010

Just as the fiscal crisis sweeping through the major oil-consuming nations of the world is cutting funding for green energy, one of the most expensive yet least efficient of green fuels, corn-based ethanol, has been given another year of generous taxpayer support in the US. The promotion of corn-based ethanol has been America’s principal policy response to its growing dependence on ever more costly foreign oil. Fuelled by a federal tax credit of 45 cents per gallon and a crippling 54 cent per gallon tariff against competing Brazilian sugar-based ethanol , American ethanol production has grown exponentially over the course of the last decade to around 12 billion gallons per year in 2010. And it’s targeted to grow to as much as 36 billion gallons by 2022. Food inflation, particularly with respect to corn prices, has moved in step. Thanks in large measure to ethanol demand, US corn prices are up some 40 per cent this year. Food inflation aside, Congress had lots of other good reasons not to extend further subsidies. The net energy content from ethanol, after allowing for all the hydrocarbon inputs (ranging from fertilizers to diesel fuel for the tractors to coal for the processing plants), is marginal at best. And its carbon footprint isn’t materially better than burning fossil fuels, given how much of the latter is embodied in its very production. Despite a last-ditch attempt by Senator Dianne Feinstein and others to end the subsidies, the Senate decided to fork out more pork barrel funds to corn farmers and, by extension, to firms like Monsanto and Archer Daniels Midland for another year. But don’t count on American ethanol production’s ever coming even close to reaching that lofty target of 36 billion gallons per year. If the return of fiscal sanity to Washington doesn’t undercut its life-sustaining subsidies, an aborted recovery in motor vehicle sales will soon put the kibosh on future production growth. Car manufacturers and ethanol producers both hope that an economic recovery will return vehicle sales to their pre-recession levels. Unfortunately, the recovery they are counting on so heavily is a double-edged sword. An economic rebound will very quickly push pump prices beyond most drivers’ reach. They’re already hovering around $3 per gallon, and with triple-digit oil prices around the corner, we’re sure to see prices of $4 per gallon or higher by next spring. The last time we saw those prices, in the summer of 2008, scooters were outselling SUVs by a margin of three to one, and no one was keen to scoop up car-leasing firms and make acquisitions like Toronto-Dominion Bank’s recent $6.3 billion purchase of Chrysler Financial. Four-dollar gas crunched the North American vehicle market back in 2008, and it will likely do the same in 2011. And when it does, American farmers can go back to growing corn for food and, in the process, save taxpayers some $7 billion a year in ill-conceived ethanol subsidies.

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Senate Kills Foreclosure Aid

December 21, 2010

WASHINGTON — Despite mounting evidence of big banks committing serious fraud in the foreclosure process, the U.S. Senate eliminated $35 million in legal aid to homeowners trying to keep their homes. The fund was wiped out in order to meet government spending caps advocated by Sens. Jeff Sessions (R-Ala.) and Claire McCaskill (D-Mo.), but will likely end up costing taxpayers much more in the long run, as wrongful foreclosures burn through the balance sheets of Fannie Mae and Freddie Mac. The slashing of the foreclosure-assistance fund is just one casualty of Washington’s increasing bipartisan push to cut spending across the board. The $35 million fund was created by the Wall Street reform bill signed into law by President Barack Obama in July, but the Senate never took the additional necessary step of appropriating the money. Even if it had been appropriated, Senate Majority Leader Harry Reid (D-Nev.) last week gave up on passing a budget for next year in the face of Republican opposition to earmarks . Although the dollar amount is tiny in comparison with other federal housing programs, legal aid funding is a critical to the foreclosure relief effort. Without hiring a good lawyer, it is extremely difficult for borrowers to successfully defend their homes against banks — even when banks are committing clear-cut violations. Recent reports suggest severe, nationwide problems with the mortgage system. A survey of 96 attorneys found that banks started foreclosure proceedings on 2,500 borrowers who were negotiating a loan modification. The survey was conducted by the National Association of Consumer Advocates and the National Consumer Law Center. According to a Dec. 13 report by the Congressional Oversight Panel, Obama’s main foreclosure prevention initiative, the Home Affordable Modification Program (HAMP), will reach less than one-fourth of the borrowers it was intended to. And for the lucky few that do get help, the process can require years of legal wrangling. Over 29,000 borrowers have been stuck in trial modifications awaiting permanent relief for at least one year, according to the COP. Under program rules, the trial period is supposed to last for 3 months. Millions of other homeowners have been improperly denied loan modifications, charged illegal fees, and even improperly evicted. But for the $35 million legal aid fund to ever do borrowers any good, Congress had to actually set aside money for the program. And the Senate Appropriations Committee never did. As rhetoric about allegedly out-of-control government spending heated up this year, both Obama and members of Congress began touting plans to freeze discretionary spending. Sen. Jeff Sessions (R-Ala.) and Sen. Claire McCaskill (D-Mo.) even authored a bill that would have implemented a three-year freeze on spending levels. While the bill never passed, it made new initiatives like the foreclosure relief fund very difficult to get through the appropriations committee, according to Senate aides familiar with the battle. The committee decided to follow the Sessions-McCaskill limit despite the fact that it didn’t have the force of law. McCaskill, who does not serve on the Appropriations Committee, insisted that she was not to blame in an interview with The Huffington Post. “I’m not an appropriator, so I don’t participate in the process of prioritizing. So I can’t speak to the priorities that they decided were most important. Clearly, going to Sessions-McCaskill levels of spending, that was a modest cut in what had been submitted by the president. It’s still an increase over last year. So I’m trying to figure out why they had to cut a program if in fact this budget reflects an increase over last year’s spending, which it does, a little short of two percent,” said McCaskill. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, regretted the Senate failure. “We had a big fight in our committee and we won it to, to reauthorize $35 million and we’re hoping it gets appropriated,” he told HuffPost late last week. “I think McCaskill is wrong on these things. I understand she’s got some worries about her district, but she plays an unconstructive role in this,” said Frank. “These kind of restrictions on domestic spending with unlimited spending for the war — and you always have to talk about both — is a great mistake. And the liberal community’s got to focus more on Afghanistan, Iraq, NATO. NATO is a great drain on our treasury and serves no strategic purpose.” Frank said the overall deficit hysteria has tilted the debate. “The president plays into it with his freeze on domestic spending,” he said. “And particularly when you say we’re going to stick with where we are, how do you accommodate new things?” Critics say that targeting legal aid simply makes no sense in the context of the overall federal budget. “This is such a trivial sum — it’s what we spend on the military in about 20 minutes,” according to economist Dean Baker, co-Director of the Center for Economic Policy and Research. What’s more, by allowing borrowers to fight improper foreclosures, legal aid funding would almost certainly help ease taxpayer losses from fraudulent home seizures implemented by major banks. Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs all provide federal guarantees for mortgages. When those mortgages sour, government agencies are usually better off working out a mortgage modification with a borrower than foreclosing. But government agencies do not connect with borrowers — instead, they rely on private sector banks to interact and negotiate on their behalf. Since the banks make money from charging fees and conducting foreclosures, critics allege that banks are improperly pushing borrowers into trouble — at taxpayers’ expense. Legal aid funding to help borrowers could help limit those losses. “We don’t know how many foreclosures this will end up preventing, but given that we are willing to spend over $100 billion a year in tax subsidies to support people owning a home, it certainly seems reasonable to spend $35 million a year — less than 0.04 percent of this amount — to give them the chance to stay in their home,” Baker said. Frank said that the fiscal argument is counterproductive and that legal help should be given to homeowners in foreclosure as a matter of social justice. “Let’s not make that argument. We don’t know and you don’t know,” he said. “I’m for the money because I think it’s a matter of social justice. Let’s not try to [make] up that we think it’s going to save money in the long run, which we don’t know. And that’s not why we’re doing it.” Regardless, banks clearly come out winners in the plan. Fewer borrowers fighting foreclosures results in more bank revenue from foreclosure fees, and lower expenses for the banks. “The mortgage servicing industry is broken and that the effects of that broken system are being felt by America’s homeowners,” Rep. Maxine Waters (D-Calif.) told HuffPost. “If not for the tireless efforts of foreclosure attorneys, many families would have mistakenly lost their homes and the fraudulent and corrupt practices of the mortgage servicing industry may have never come to light.” The author of the legal aid provision, Rep. Mel Watt (D-N.C.) expressed frustration over the impasse in an interview with HuffPost, accusing the funds’ detractors of using budgetary gimmicks as an excuse to cut a program they didn’t support. “These funds are as important now as they were when we were trying to get them into the bill in the first place,” Watt said. “There were some people who didn’t want this fund all along. We had to work to get it in there, so it’s not surprising that they would try to come up with excuses to take it out.” Banks are likely to benefit from the death of the legal aid package, as borrowers find themselves financially unable to challenge improper fees and foreclosures. But the fund’s defeat is doubly unfortunate for struggling homeowners thanks to last week’s defeat of a separate legal aid bill in the House. The U.S. Treasury Department had refused to allow funds for the Wall Street bailout to be spent on legal aid for borrowers, citing a lack of legal authority. That decision came under fire from COP panelist Damon Silvers during a Dec. 16 hearing. “When hedge funds get money under [the bailout], I believe they get to pay for lawyers, and it puzzles me that a vast amount of TARP money has been expended on legal counsel for the benefit, obviously, of the government. It seems as though lawyers are understood to be a necessary and essential component of all the transactions that HAMP and TARP undertake, except when homeowners need the lawyers.” But Treasury had insisted that because the Wall Street overhaul included a $35 million legal aid fund, a separate fund was not necessary . Last week, House lawmakers from foreclosure-battered states attempted to push legislation that would explicitly authorize Treasury to extend legal aid funds to borrowers, but the bill failed to garner the two-thirds majority needed for passage under fast-track rules. So troubled homeowners will not be receiving any help from Congress this holiday season. And with soon-to-be-House-Speaker John Boehner (R-Ohio) opposed to legal aid programs, they are unlikely to get any further assistance next year.

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Video: Pappas Says Online Poker Revenue Is `Going Offfshore’

December 17, 2010

Dec. 17 (Bloomberg) — John Pappas, executive director of the Poker Players Alliance, talks about the outlook for Senate Majority Leader Harry Reid’s proposal to legalize and tax online poker. Pappas speaks with Scarlet Fu on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Video: Pappas Says Online Poker Revenue Is `Going Offshore’: Video

December 17, 2010

Dec. 17 (Bloomberg) — John Pappas, executive director of the Poker Players Alliance, talks about the outlook for Senate Majority Leader Harry Reid’s proposal to legalize and tax online poker. Pappas speaks with Scarlet Fu on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Senate Passes Obama-GOP Tax Cut Deal

December 15, 2010

(AP) WASHINGTON — The Senate Wednesday overwhelmingly passed a sweeping tax package that would save millions of Americans thousands of dollars in higher taxes while also reducing their Social Security taxes and extending jobless benefits. President Barack Obama swiftly urged the House to pass the $858 billion bill without changes, a slap at Democratic liberals eager to toughen a part of the measure that permits up to $10 million to pass to heirs estate tax-free. A wide array of tax cuts enacted under President George W. Bush is scheduled to expire on Jan. 1 – just two weeks away – affecting taxpayers at every income level. The bill passed by the Senate, 81-19 , would extend those cuts for two years. Obama urged quick action in the House. “I know there are different aspects of this plan to which members of Congress on both sides of the aisle object. That’s the nature of compromise,” the president said. “But we worked to negotiate an agreement that’s a win for middle-class families and a win for our economy, and we can’t afford to let it fall victim to either delay or defeat.” House Democratic leaders said they expect to vote on the bill Thursday. Obama negotiated the package with Senate Republicans, and then administration officials worked for days to persuade congressional Democrats to support it, signaling a possible blueprint for future legislation. Because of November’s election victories, Republicans will take control of the House in January and gain seats in the Senate. “Middle class families need a boost in this economy, and that is exactly what this plan gives them,” said Senate Majority Leader Harry Reid, D-Nev. “It is not perfect, but it will create 2 million jobs, cut taxes for middle class families and small businesses, and ensure that Americans who are still looking for work will continue to have the safety net they rely on to make ends meet.” The bill would extend expiring tax cuts at every income level. It also would renew a program of jobless benefits for the long-term unemployed that is due to lapse, and enact a one-year cut in Social Security taxes. The bill’s cost, $858 billion, would be added to the deficit. “Opposing this bill is tantamount to supporting massive tax increases that threatens our economic future,” said Sen. Orrin Hatch, R-Utah. “Allowing middle-class families, small businesses and investors to keep more of what they earn, while denying Washington hundreds of billions in new tax revenue to spend, is the right thing to do.” Other Senate Republicans, however, balked at the price tag, noting that Obama’s deficit commission recently outlined the massive fiscal problems facing the nation. “The American people are going to be looking, and they’re going to say, does the Senate get it? Do they understand the severity and the urgency of the problems that face our fiscal future?” Sen. Tom Coburn, R-Okla., said Wednesday. At the insistence of Republicans, the plan includes a more generous estate tax provision: The first $10 million of a couple’s estate could pass to heirs without taxation. The balance would be subject to a 35 percent tax rate. The lower estate tax infuriated some Democrats who were already unhappy with Obama for agreeing to extend tax cuts for individuals making more than $200,000 and couples making more than $250,000. “This administration fights for nothing,” said Rep. David Wu, D-Ore. The estate tax was repealed for 2010. But under current law, it is scheduled to return next year with a top rate of 55 percent on the portion of estates above $1 million – $2 million for couples. House Democratic leaders want to bring back the 2009 estate tax levels. That year, individuals could pass $3.5 million to their heirs, tax-free. Couples could pass $7 million, with a little tax planning, and the balance was taxed at a top rate of 45 percent. House Democrats said they are considering a vote to impose the higher estate tax, perhaps as an amendment to the package. But even critics of the lower estate tax say they expect the package to be enacted without changes. “Let’s find out if Republicans really want to jeopardize income tax, payroll tax and estate tax relief for every American in order to provide a budget-busting bonanza to the country’s richest estates,” Rep. Chris Van Hollen, D-Md., wrote in an op-ed in Wednesday’s Washington Post. “House Democrats think this trade-off should be debated and voted on in the light of day.” Rep. Bill Pascrell Jr., D-N.J., said, “We can jump up and down all we want about the higher-end estate taxes, and I don’t think anything’s going to change because the Senate isn’t going to change it.” Thirty-one members of the conservative Blue Dog Democrats sent a letter to House Speaker Nancy Pelosi urging quick passage of the bill. “It is time for us to put aside the partisan talking points and accomplish what the American people sent us here to do,” said the letter.

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Tax Cuts For Rich Move Forward In Senate

December 13, 2010

WASHINGTON — The Senate on Monday voted to move forward on a a two-year extension of the Bush tax cuts as well as a package of tax cuts and credits for the middle class, ethanol subsidies and a 13 month reauthorization of unemployment insurance. The vote follows months of insistent bipartisan concern about the size of the federal deficit. The vote is being held open to accommodate senators arriving in town, but the package already had 66 votes in favor of moving forward shortly after 4:15. Eight senators stood against the deal: Republican John Ensign (R-Nev.); Democrats Jeff Bingaman (N.M.), Sherrod Brown (Ohio), Russ Feingold (Wisc.), Kirsten Gillibrand (N.Y.), Pat Leahy (Vt.) and Mark Udall (Colo.); and Bernie Sanders (I-Vt.), who spoke for hours against the bill on Friday. UPDATE: As of 7:30 p.m. ET, the final vote stands at 83-15 (2 not voting). Of the 15 votes against, nine came from Democrats, five from Republicans and one from Sanders. The bill, with the unusual name of Reid-McConnell, originated in negotiations between President Barack Obama and congressional Republicans. House Democrats last week resolved to urge their leadership not to bring the bill to the floor, but lower-chamber leaders have been signaling that the House will consider the Senate product — though there will be attempts to amend it. “It’s clear it’s the right thing to do for middle-income Americans,” said Sen. Max Baucus (D-Mont.), chairman of the chamber’s finance committee. Baucus said he was confident the bill would make its way through the House. “It will pass,” he said. House Democrats are particularly offended by the estate-tax portion of the compromise, which funnels some $25 billion to some 6,600 families . The provision exempts the first $5 million in inheritance from taxation and reduces the rate on the rest. Rep. Jim McDermott (D-Wash.) said he objected to the unfairness of the package. It “gives $68 billion to the trust-fund babies with security, it’s going to last two years. To the unemployed, he gives $56 billion.” Extending tax cuts for two years, said McDermott, while giving unemployment insurance for one, shows a legislative chamber with its priorities far askew. When the deal was first announced, it was greeted with fury by some Democrats. “I’m going to argue forcefully for the nonsensicalness and the almost, you know, moral corruptness of that particular policy,” said Sen. Mary Landrieu (D-La.), walking into a meeting with Vice President Joe Biden and Senate Democrats to discuss the deal on last Tuesday. “This is beyond politics. This is about justice and doing what’s right.” On Monday, though, Landrieu said she would “reluctantly” vote to support cloture and move forward with the bill. “I’ll be voting yes today, but I’m hoping there will be some amendments,” she said before the vote. Landrieu was the 66th “aye.” Landrieu is working with Sen. Jeff Merkley (D-Ore.) to try to get a vote on an amendment that would end the tax cuts for the wealthy and apply the revenue to Social Security. But even if it’s considered, the amendment does not have enough votes to meet the filibuster-proof threshold of 60 that has become a standard requirement for legislation in the Senate. Asked what happened to her anger from last week, Landrieu said it remained — but it was only for the tax cuts for millionaires, not the entire package. “I’m still outraged about it,” she said.

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Obama Tax Cut Deal Projected To Cost More Than Stimulus

December 10, 2010

WASHINGTON — President Barack Obama is predicting congressional approval of the tax-cutting compromise he has reached with Republican leaders, but he’s not ruling out that unhappy Democrats will make some changes in the mammoth legislation. In an interview with NPR released Friday, Obama said that despite a rebellion by many Democrats against his tax deal, it will pass because “nobody – Democrat or Republican – wants to see people’s paychecks smaller on Jan. 1 because Congress didn’t act.” The pact would extend cuts in income tax rates for all earners that would otherwise expire next month, renew long-term jobless benefits and trim Social Security taxes for one year. Democrats have objected that it is too generous to the rich, especially its provisions cutting estate taxes for the wealthiest Americans. House Democrats voted in a closed-door meeting Thursday not to allow the package to reach the floor for a vote without changes to scale back tax relief for the rich. Asked about those objections, Obama said there will be talks between House and Senate leaders about the package’s final details. “Keep in mind, we didn’t actually write a bill,” he said of his agreement with GOP leaders. “We put forward a framework. I’m confident that the framework is going to look like the one that we put forward.” Rep. Michele Bachmann, R-Minn., one of the House’s highest-profile conservatives, said that Democratic discontent highlights the difference between the two parties. “The compromise that was forged wasn’t rich enough for Speaker Pelosi and the Democrats,” Bachmann said on NBC’s “Today” show, referring to Nancy Pelosi, D-Calif. “They want the taxes up even higher. And that’s really where the line of demarcation is in this discussion.” Speaking separately, Tim Kaine, chairman of the Democratic Party, said Democrats objecting to Obama’s tax deal may be showing voters in their districts that they have “some spine” and predicted that the two-year extension of the lowered income tax rates would eventually help Democrats. “By extending it two years, and I think this is going to happen, you’re putting the debate about tax cuts for the wealthiest right in the heart of the presidential election. I think the president feels very confident he can make the case,” Kaine said on CBS’ “Early Show.” The measure appears headed for Senate approval after negotiators added a few sweeteners to promote ethanol and other forms of alternative energy. Tax provisions designed to increase production of hybrid automobiles, biodiesel fuel, energy-efficient homes, coal and energy-efficient household appliances would be extended through the end of 2011. There is no precise timetable for passage in the Senate, but a test vote was set for Monday afternoon that appears likely to demonstrate overwhelming support for the legislation. Supporters say it would help accelerate a sluggish recovery from recession. “This bill is not perfect, but it provides the economic boost middle-class families and small businesses in Nevada and across America need,” said Senate Majority Leader Harry Reid, D-Nev. “Middle-class families and small businesses will see their taxes go down.” At the insistence of Republicans, the measure includes a more generous estate tax provision. That infuriated Democrats already unhappy with Obama for agreeing to extend tax cuts at incomes of more than $200,000 for individuals and $250,000 for couples. In all, the package would cost about $855 billion, according to a preliminary congressional estimate. “If we pass this agreement as written, it says we are going to continue the Bush policy of trickle down economics for at least two more years, and in my mind, that is absurd,” said Sen. Bernie Sanders, a Vermont independent. Vice President Joe Biden has told Democrats in closed-door meetings this week that they are free to oppose the agreement but it might unravel if they do. “If it’s take it or leave it, we’ll leave it,” said Rep. Lloyd Doggett, D-Texas, after a closed-door meeting in which rank-and-file Democrats chanted, “Just say no.” Despite significant criticism from fellow Democrats, Obama has said the sweeping measure is necessary to help the struggling economy recover from the worst recession in decades. Senate GOP leader Mitch McConnell has said he expects most Senate Republicans to support the tax bill. Prominent House Republicans back it, too. Among the energy tax provisions added was an extension through 2011 for the current 45-cent per gallon subsidy for ethanol, at a cost to the Treasury estimated at nearly $5 billion. The issue is of particular interest to lawmakers from Midwestern states with grain crops. “While this legislation is not as long as we had hoped, it is a commonsense approach that will ensure American ethanol production continues to evolve and new technologies commercialized,” said Bob Dinneen, president of the Renewable Fuels Association.

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Goldman Sachs Accused Of Trading Abuses By Dem Senator

December 10, 2010

Just as the housing market was tanking in 2007, Goldman Sachs tried to shove out investors who were betting against it, to secure the best price for itself, a Senator alleged Wednesday. An email in which a Goldman trader encouraged a colleague to “kill” other pessimistic bets — as he tried to strengthen the bank’s own short position — prompted Carl Levin, chairman of the Senate permanent subcommittee on investigations, to say Goldman perpetrated “trading abuse” and used a “short squeeze strategy” the Financial Times reports. Levin has accused Goldman, essentially, of attempting to artificially drive down the price of bets it wanted to make. After housing prices started to decline in 2006, and borrowers across the nation began a wave of defaults, the securities based on their mortgages began to lose value. Meanwhile, the price of insurance on these securities, which allowed investors effectively to bet against them, was rising. When the housing market tanked, Wall Street investors who had placed bets against it profited handsomely. Investors who kept piles of these mortgage-backed securities on their books, however, lost billions. Few understood just how explosive these securities were. Goldman’s response to Levin’s allegation: “This type of language sounds awful and is very disappointing, but it does not reflect the reality of what happened.” In the spring, when the SEC pursued civil fraud charges against Goldman, flamboyant emails from Goldman trader Fabrice “Fabulous Fab” Tourre caused some embarrassment for the bank and added evidence to the accusation that Goldman willfully sold bad deals to investors. (Goldman internal emails called these deals “sh–ty”.) Goldman paid $550 million to settle the SEC lawsuit — a record sum, but peanuts for a bank that earned $13.4 billion last year. The case against Tourre is ongoing.

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Cenk Uygur: The Hidden Cost of Capitulation

December 8, 2010

Now that the president has signaled yet another collapse in agreeing to tax cuts for the rich, there is a hidden cost to this capitulation. He is now stuck defending this deal for the rest of his term. I predicted this on the show yesterday and today it’s playing out exactly the way I imagined, with the president sending out advisers to talk about what a great idea it is to give tax cuts to the rich . Once you sign off on a political position, you own it. This could be a corollary to Colin Powell’s doctrine on foreign policy. Powell said if you break it, you own it. In this case, if you make it, you own it. The president claims he will fight hard against these same tax cuts two years from now. It’s hard to stop laughing long enough to make a point against that, but I will try. If you are sending out your people to talk up polls about how the right the Republicans were on the tax cuts for the rich now, how are you going to send out the same people to talk about how wrong they were – and how wrong you were – two years from now? These are the things that make me wonder if President Obama has a firm grasp on basic political fundamentals. Yesterday he said that the political reality is that he just didn’t have the votes in the Senate (by far his favorite excuse). He even said “I can’t win” in the Senate. That’s a damning reversal for a man who ran on “Yes we can.” But more importantly, he doesn’t seem to understand Politics 101. You don’t just count the votes based on how the other side says they’re going to vote. From time to time, you call their bluff. Which means you go to the home states of swing senators like Scott Brown in Massachusetts and Olympia Snowe in Maine and you campaign on this winning issue there until you make them feel the political pain. Then you put them to a decision — do you want to risk your career voting against me on this issue where I have huge popular support or do you want to vote with me? Then you take the vote and they will bend. If he doesn’t understand that, boy did we elect the wrong guy. Of course, the alternative is that he does understand that but doesn’t ever have the stomach for a real fight . Or even worse yet, secretly likes this deal and will always find an excuse to get more tax cuts and sweet deals for the rich and powerful. In which case, boy did we elect the wrong guy. Watch The Young Turks Here

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Warren Buffett: I ‘Should Be Paying A Lot More In Taxes’

November 21, 2010

WASHINGTON — Billionaire Warren Buffett rebutted claims that the Obama administration is unjustly hurting business orders with high taxes by saying that in fact, the wealthy have never had it so good. “I think that people at the high end, people like myself, should be paying a lot more in taxes . We have it better than we’ve ever had it,” he told ABC’s Christiane Amanpour in a clip played on “This Week” on Sunday. When Amanpour pointed to critics’ claims that the very wealthy need tax cuts to spur business and capitalism, Buffett replied, “The rich are always going to say that, you know, ‘Just give us more money, and we’ll go out and spend more, and then it will all trickle down to the rest of you.’ But that has not worked the last 10 years, and I hope the American public is catching on.” WATCH: On Tuesday, Buffett wrote a New York Times op-ed in the form of a letter to “Uncle Sam,” thanking him for saving the U.S. econom y: When the crisis struck, I felt you would understand the role you had to play. But you’ve never been known for speed, and in a meltdown minutes matter. I worried whether the barrage of shattering surprises would disorient you. You would have to improvise solutions on the run, stretch legal boundaries and avoid slowdowns, like Congressional hearings and studies. You would also need to get turf-conscious departments to work together in mounting your counterattack. The challenge was huge, and many people thought you were not up to it. Well, Uncle Sam, you delivered. People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective. Buffett isn’t the only billionaire who has argued for higher taxes. Both Microsoft co-founder Bill Gates and his father, Bill Gates, Sr., recently came out in support of a Washington state measure to ” create a 5 percent tax rate on annual income exceeding $200,000 for individuals and $400,000 for couples, and a 9 percent tax rate on income that tops $500,000 for individuals and $1 million for couples.” Buffett has spoken out in the past about taxes for the wealthy, telling the Senate Finance Committee in 2007 that the estate tax should not be repealed. “I think we need to… take a little more out of the hides of guys like me ,” Buffett testified.

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Video: Corker Proposes Single Fed Mandate of Price Stability: Video

November 16, 2010

Nov. 16 (Bloomberg) — U.S. Senator Bob Corker, a Tennessee Republican, talks with Bloomberg’s Peter Cook about the Federal Reserve’s “dual mandate” to fight inflation and maintain full employment. Corker, a member of the Senate Banking Committee, is calling for the central bank to focus solely on price stability. (Source: Bloomberg)

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Video: Dodd Challenges Proposal to Strip Fed of Job Mandate: Video

November 16, 2010

Nov. 16 (Bloomberg) — U.S. Senator Chris Dodd, a Democrat from Connecticut who leads the Senate Banking Committee, talks with Bloomberg’s Peter Cook about criticism of Federal Reserve monetary policy. Republican lawmakers in the U.S. House and Senate say they want to compel the central bank to focus solely on controlling inflation, upending a congressional mandate that’s shaped monetary policy for more than 30 years. Bloomberg’s Mark Crumpton also speaks. (Source: Bloomberg)

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Jobless Benefits About To Lapse As Senate Dems Mull Strategy

November 16, 2010

WASHINGTON — Senate Democrats are discussing their strategy for reauthorizing extended unemployment insurance on Tuesday as the expiration date for the jobless aid is fast approaching. Neither the House nor the Senate will be in session next week, aides say, so extended unemployment benefits for the long-term jobless will need to be reauthorized this week before they expire on Nov. 30. Two million people could prematurely lose their benefits by New Year’s Day, according to the National Employment Law Project. Currently five million people are receiving aid under two federally-funded programs for the long-term unemployed. Yet no clear path forward has emerged in Congress for reauthorizing those programs. Aides have floated the idea of coupling the benefits with a reauthorization of the expiring Bush-era tax cuts for the top two percent of earners. “I support extending unemployment benefits whichever way we can do it,” Sen. Debbie Stabenow (D-Mich.) told HuffPost before heading into a weekly caucus lunch with other Democrats. Sen. Ben Nelson, a Nebraska Democrat who sided with Republicans when they blocked the previous reauthorization for nearly two months this summer, said he doesn’t love the tax cut deal. “That’s a mistake,” said Nelson, who has joined the GOP in opposing the extended benefits unless their deficit impact is offset with spending cuts. “Unless unemployment is paid for, I can’t support it.” (Nelson and Republicans do not insist on offsetting the deficit impact of tax cuts for the rich, estimated to be near $700 billion. The progressive Economic Policy Institute puts the cost of a full year’s worth of extended unemployment benefits at $65 billion.) “I think what we want to do is not give $700 billion in tax breaks to the richest people in this country and cut back on the needs of Americans who are really really hurting,” said Sen. Bernie Sanders (I-Vt.) before meeting with his colleagues. “I’m walking into the room, those are the things I’m going to fight for.” A lobbyist who has been pushing for a year-long reauthorization said Democratic leadership sees tying unemployment to the tax cuts as an effective strategy. “Leadership is very aware of the beautiful symmetry of tax cuts for millionaires doesn’t need to be offset but $293 a week for the long-term unemployed does.” Aides have said it’s not likely a deal on unemployment will be sorted out this week, meaning a lapse is highly likely. It would be the fourth lapse in a year. People who missed checks during the previous lapses were paid retroactively when Congress got the job done. The programs needing reauthorization kick in after a layoff victim’s initial six months of state benefits are exhausted. If the benefits lapse, people whose state benefits end after Nov. 30 will be ineligible for the additional 73 weeks of benefits granted to people laid off closer to the beginning of the recession. State workforce agencies have made it through some of briefer lapses without a major interruption in benefits, but NELP estimates that this time, 800,000 people in the federally-funded “Extended Benefits” program, which offers 13 or 20 weeks, depending on the state, will almost immediately stop receiving checks when the program expires. People receiving benefits in any of the four “tiers” of federally-funded “Emergency Unemployment Compensation,” which provides up to 53 weeks of aid, will be unable to move to the next tier or to EB once their current tier expires. HuffPost readers: Would you be affected by a lapse? Tell us about it — email arthur@huffingtonpost.com .

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JPMorgan Internal Document Predicts ‘Gridlocked’ Congress ‘Without Any Landmark Legislation’

November 9, 2010

The financial titan JPMorgan Chase is betting on the next congressional session to be historic in its lack of productivity, according to a leaked internal document. On Tuesday, the money-in-politics research group Center for Responsive Politics published a document from JPMorgan’s government affairs office that gives some interesting hints as to how Wall Street views the fallout of last week’s elections. The viewpoint is bleak. “[T]he 112th Congress could be remembered as a gridlocked one without any landmark legislation,” the document’s author writes. In the House, Republicans will likely hail their wave of support as a mandate from voters to reject the comprehensive reform measures that passed over the past two years. House Republicans will look to pass a series of spending cuts, tax cuts and repeal measures — to create a distinct alternative in the mind of the electorate from the administration and reinforce their image as the party of fiscal restraint. The Senate will likely be gridlocked on nearly every substantive policy issue, unable to move legislation under the rules of the body that require 60 votes to move forward procedurally on controversial issues. The tense partisan battle will ensure a series of cloture votes and procedural motions meant to make the opposing party take difficult political votes. jpmdoc On the specific items, JPMorgan seems ready for nasty partisan fights, though in several instances they foresee areas of agreement between the two parties. On the issue of extending the Bush tax cuts, for instance, the firm predicts a “one-year extension… for all filers” to pass during the lame-duck session, though the author goes on to note that the lawmaker responsible for corralling the votes in the Senate — Sen. Max Baucus (D-Mont.) — will have a difficult task owing to Sen. Orrin Hatch’s (B-Utah) growing concern over a primary challenge in 2012. The firm also expects the Republicans to attempt to de-fund health care reform (not a surprise) as well as financial regulatory reform (more of a surprise). The latter will be done, the author predicts, by using “the appropriations process to slow implementation of Dodd-Frank by underfunding the new federal agency staff needed to get those programs off the ground.” The entire document is worth a read if, for nothing else, because it offers a rare insight into how the financial community views the drama unfolding in our nation’s capital. It’s impossible to know whether the sentiments expressed by JPMorgan’s government affairs arm are based on simple observation or insider knowledge. Mostly, they are fairly obvious and carefully worded takes on the major policy debates. But what’s telling is that for all of the talk about Wall Street wanting certainty in Washington, at least one major firm seems resigned to a legislative process that’s even more difficult to predict as it moves forward.

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Indiana Beefing Up Security At Unemployment Offices Ahead Of Holidays

November 1, 2010

WASHINGTON — The Indiana Department of Workforce Development is beefing up its security ahead of the holidays, when officials expect a seasonal surge in unemployment claims and extra stress for long-term jobless who might miss benefits because of Congress. If Congress doesn’t reauthorize extended unemployment insurance, which expires at the end of November, the National Employment Law Project estimates that two million people will prematurely miss checks by the end of December. “There’s obviously increasing stress, especially among the long-term unemployed, and also the upcoming expiration of these federal extensions will add additional stress,” department spokesman Marc Lotter told HuffPost. Lotter said the agency is putting armed guards at each of the 36 WorkOne Centers that process unemployment benefits across the state. Lotter said that each center has already had security for the past two years; the agency is consolidating to one private contractor that will now handle security at each of the centers. It’s part of a broader effort to prepare for the holidays, during which Lotter said Indiana sees more unemployment claims and also an effort to standardize services across the state. “We’ve had our staff undergo stress management,” Lotter added. “It’s much more than just adding armed security. We are trying standardize delivery of services, so that the WorkOne Center in Gary, Ind, will have same service as the one in New Albany.” NELP’s Judy Conti told HuffPost that so far Indiana is the only state that has boosted its security ahead of the holidays. “However, we are very aware that agencies are getting ready for the added volume of calls from the long-term unemployed who are going to be very worried and very anxious about Congress taking action in a timely fashion,” Conti said. Over the summer, the Senate dithered for nearly two months as 2.5 million people who’ve been out of work for longer than six months missed checks. Congress will have only two weeks from the time it reconvenes until the deadline for reauthorizing the benefits.

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Robert Reich: Why Aren’t Business Leaders Standing Up to the Tea Party?

October 29, 2010

America’s business leaders have not exactly shied away from offering political views. Verizon CEO Ivan Seidenberg has accused President Obama of creating a hostile environment for investment and job-creation, while General Electric’s Jeff Immelt says the administration is out of sync with entrepreneurs. All of which makes particularly curious the deafening silence of business leaders about the tea party that’s now taking over the GOP and about to take over a chunk of Congress. Maybe business leaders see it as a relatively harmless fringe group advocating the fiscally responsible small-government positions most CEOs agree with. Business leaders should take a closer look. Even if it’s now on the fringe, the tea party won’t be for long. By fueling the Republican surge in the midterm elections, the tea party has become the single most powerful force in the GOP. It’s backing at least 14 Senate candidates, both challengers and incumbents, and is playing a significant role in scores of House races. It has already shaken the GOP to its core, defeating establishment Senators Lisa Murkowski in Alaska and Bob Bennett in Utah, and exerting a strong gravitational pull on many other Republicans, such as Arizona’s John McCain. It will be a force in the run-up to the 2012 presidential election. Presidential aspirant Newt Gingrich has already declared his fealty, and Sarah Palin has become its grande dame. Beyond fiscal rectitude and less spending, tea party candidates are targeting the central institutions of American government. The GOP Senate candidate from Kentucky, Rand Paul, is among several who want to abolish the Federal Reserve. They blame the Fed for creating the Great Recession and believe that the economy would be better off without a single institution in Washington setting monetary policy. Even Maine’s stolid Republican Party, now under tea party sway, has called for eliminating the Fed. In a Bloomberg poll a few weeks ago, 60% of tea party adherents wanted to overhaul or abolish the Fed (compared with 45% of all likely voters). Another tea party target is the Internal Revenue Service. South Carolina Sen. Jim DeMint, who has emerged as the Senate’s leading tea party incumbent, says that his “main goal in the Senate will not only be to cut taxes, but to get rid of the IRS.” Mr. DeMint’s goal is echoed by many tea party candidates, including Arkansas Rep. John Boozman, now running for Senate. At the least, business leaders who complain about uncertainties caused by Mr. Obama’s policies might be concerned. John Castellani, the former head of the Business Roundtable who is now running the Pharmaceutical Research and Manufacturers of America, told Bloomberg Businessweek this month, with remarkable understatement, “This kind of extremism makes it much harder to plan from a business perspective.” GE’s Mr. Immelt may be unhappy with President Obama, but he’ll be far unhappier if the tea party takes over the GOP. Tom Borelli, director of the Free Enterprise Project of the National Center for Public Policy Research, a conservative think tank and vocal supporter of the tea party movement, has demanded Mr. Immelt’s resignation, calling GE an “opportunistic parasite feeding on the expansion of government.” Among Mr. Immelt’s alleged sins: taking federal subsidies for clean energy. In a press release last week, the National Center for Public Policy Research stated clearly: “Liberal CEOs are the next target for tea party activism.” Presumably, business leaders should also be uncomfortable with the Tea Party’s nativism. At the first national convention of the “Tea Party Nation” last February in Nashville, Tom Tancredo, former Colorado congressman and now Tea-Party-sponsored candidate for governor (as an Independent), brought the crowd to its feet by denouncing the “cult of multiculturalism” and accusing immigrants of threatening America’s Judeo-Christian values. “This is our country,” he declared to wild cheers. “Take it back!” More than half of Tea Party backers say they’d be more likely to vote for a candidate who supports changing the 14th Amendment to prevent the children of non-citizens born in the U.S. from automatically becoming citizens. And Tea Partiers strongly support Arizona’s recent immigration law making failure to carrying immigration documents a crime and giving police broad powers to detain anyone suspected of being in the country illegally. “We’re all Arizonans now,” says former Alaskan Gov Sarah Palin. Many Tea Partiers similarly recoil from global institutions and agreements. Minnesota Representative Michele Bachmann, leader of the House’s Tea Party caucus, calls the Group of 20 summit “one short step” away from “one world government,” and suggests America withdraw from international economic organizations. “I don’t want the US to be in a global economy where our economic future is bound to that of Zimbabwe” she says. And a higher proportion of Tea Partiers oppose free trade than does the American population in general. In a recent WSJ/NBC poll, 61 percent of respondents who characterized themselves as Tea Partiers thought trade was bad for America. Under normal times, ideas like these wouldn’t gain much public traction. Why are they now? Because of the continuing effects of the Great Recession. History has shown that people threatened by losses of jobs, wages, homes, and savings are easy prey for demagogues who turn those fears into anger directed at major institutions of a society, as well as individuals and minorities who become easy scapegoats – immigrants, foreign traders, particular religious groups. Were it not for their ongoing economic stresses, Americans wouldn’t be receptive to abolishing the Federal Reserve and the IRS, or believe government and big business were conspiring against them, or turn nativist and isolationist. Business leaders should be standing up to the tea party. And they should be actively supporting policies to relieve the economic stresses that fuel it. Their silence in both regards is not only bad for business; it threatens the stability of our economic and political system. Robert Reich is the author of Aftershock: The Next Economy and America’s Future , now in bookstores. This post originally appeared at RobertReich.org .

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Video: Biden Says Outside Money Hurts Democrats’ House Control: Video

October 22, 2010

Oct. 22 (Bloomberg) — U.S. Vice President Joe Biden says Democrats will retain control of the Senate while he worries that hundreds of millions of dollars in anonymous donations to campaign groups backing Republicans could cost his party its House majority. Biden spoke yesterday in an interview for Bloomberg Television’s “Political Capital With Al Hunt,” airing this weekend. (Excerpts. Source: Bloomberg)

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Dave Johnson: Lorain, OH Keep It Made In America Town Hall Meeting

October 17, 2010

Thursday evening I attended the “Keep It Made In America” Town Hall in the John Spitzer Conference Center at Lorain County Community College, an impressive, large campus. Lorain, Ohio is another town with closed factories, boarded-up houses, high unemployment, and ringed by the national big-box vulture chains whose business model is to suck the remaining funds away to Wall Street. Driving into Lorain As you drive from town to town in Michigan and Ohio you see one after another a ring of the “big box” stores and national chain stores around each city. You also see the “brownfields” of rusted-out, closed factories, empty, falling-down buildings. Then you go to the downtown and you see boarded up houses, empty storefronts, deteriorating and deteriorated communities, idle people standing on corners. As you drive into these towns you can just see what is happening in a nutshell. You used to hear about how Wal-Mart was predatory, how it would show up in an area and after a while the downtowns would dry up, local business-owners would go broke, local business employees would be laid off, and the local people would have to work for low wages at Wal-Mart, while the region’s spending money would go off to the wealthy few who run these things. Well a juicy story of devastation like that one gets around, and there are those who hear it and say, “Hey, that’s a great idea, I wanna get me some of that.” So the Wal-Mart business model has taken off and now there are any number of these vultures, ringing the cities and towns around the country, so often private-equity owned . They are draining away the lifeblood of the downtowns, fighting off the unions to keep wages down, even demanding tax breaks to move in and “create jobs.” You see all the same stores circling every town now , running all of the local and regional businesses unto the ground. Here are some pictures from the inner Lorain area but you see it all around: (click for large) The Lorain Town Hall Meeting As I said, the meeting was at Lorain County Community College. The turnout was good, a number of candidates, local officials, and people from the community. The opening speaker was Congresswoman Betty Sutton. “Manufacturing is the backbone of our economy. It’s the backbone of our nation. We’re aware here in Northeast Ohio that it created and promises to support the idea of a middle class.” Sutton talked about the bill passed recently by the house that confronts Chinese currency manipulation. She hopes the Senate will also pass this, but we all know how difficult it is to get anything through the Senate. She also said that unlike Wall Street shuffling paper money around, what creates real value is the manufacturing of goods, which supports four surrounding jobs in the economy for every manufacturing job. Following the opening remarks Scott Paul of the Alliance for Ameican Manufacturing presented a number of facts about manufacturing in Ohio and the country. 624,700 people work in manufacturing in Ohio, down from 1,021,000 in 2000. 39% of Ohio’s manufacturing jobs were lost in the last decade. For the country the last decade was the worst ever, worse than great depression. We lost 1/3 of all manufacturing jobs with 50,000 manufacturing facilities closed. “When I grow up will there be jobs in America?” Next came a panel, moderated by Scott Paul, with Larry Taylor, Plant Manager, US Steel Corp’s works in Lorain Dave MaCall, Director of District 1 for the United Steelworkers, USW in Ohio Kelly Zelesnik, Dean of engineering technologies at LCCC Elyria A video of a question from a young person in Lorain: “When I grow up will there be jobs in America?” was asked of the panel. MaCall: there will be jobs, because we have to take action, have to level the playing field. Things we need to do. Not be protectionists, have fair and balanced trade. But we need net exports. That’s how we grow. Every other country has a value-added tax so when someone makes a product that country writes a value-added check, so it is a subsidy on them and a tariff for us. America’s Visa card has run out. We have 100 million tons of demand for steel in the US, has been for decades, last year demand was 60 million tons. Huge numbers of people laid off, from lack of demand, lack of consumption, and illegal trade. Kelly, LCCC is partnering with manufacturing. LCCC invested in needs of community, 2 of 4 cornerstones of the college are education and economic development. LCCC is helping grow local economy with a new sensor center to develop and commercialize sensor technology. Industry and educational partners and entrepreneurs to access the center to develop and test prototypes and shorten the time to send products to the market as well as train employees. The center is an attractant to new businesses. MaCall: We need national policies like every other country has. Businesses need to know there is a policy in America that will make sure there is access to capital, etc. For green startups, it is hard for companies to make investment when other countries helping their industry and we are not. Wall Street gets refinanced, now they’re holding it back, won’t let small businesses have access at reasonable rates. Paul Q: What is the role in trade laws to keep steel competitive and on level playing field? Taylor – We need strong trade policies that are strictly enforced. If they are not enforced they do no good, if we have this there will be jobs in future, level playing field. We stopped China on the steel tubes , but now other countries are producing subsidized product, we don’t get government subsidies, they do, we must have strong policies that we enforce. Concluding Over and over I am hearing these themes emerge: trade is good but stop illegal trade practices, level the playing field to enable us to compete, put together a national policy, improve trade education and training, invest in our future. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF. Sign up here for the CAF daily summary . The last three photos by Ike GITTLEN: USW

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Video: Diamond, Obama’s Fed Pick, Shares Nobel Economic Prize: Video

October 11, 2010

Oct. 11 (Bloomberg) — Peter Diamond, an economics professor at the Massachusetts Institute of Technology and President Barack Obama’s choice for a post on the Federal Reserve Board, is one of three co-winners of the 2010 Nobel Prize in Economic Sciences. Diamond shares the prize with Dale Mortensen and Christopher Pissarides for research into the difficulties of matching supply and demand, particularly in the labor market. Diamond’s Fed nomination is subject to confirmation by the Senate. Bloomberg’s Peter Cook reports. (Source: Bloomberg)

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French Senate raises retirement age to 62

October 10, 2010

French Senate raises retirement age to 62

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Dr. Philip Neches: Suppose the Tax Cuts Expired

October 8, 2010

In ordinary human interaction, when almost everyone agrees on something, except for one part, you implement the parts everyone agrees on and discuss the remaining part until it is resolved. In the tortured, hyperbolic echo chamber we call the nation’s capitol, no such logic prevails. Such is the case with the so-called debate on what to do about the Bush era tax cuts, which expire on December 31, 2010. I say “so-called debate” because a “debate” assumes that both sides listen and respond to each other. Republicans took a stand based on their leaders’ perception of the tactical interests of their party, and now in the election season, Democrats respond in kind. It may be a validly political process, but it insults the integrity of the English language to call it a debate. The tax cut bills passed during the last presidency went through the Senate by “reconciliation” rules of procedure. Under these arcane Senate rules, the normal need to get 60 votes for cloture (the process that brings a bill to the floor for a vote) do not apply: the bill can advance by simple majority vote. However, the bill moved under reconciliation procedures must be only a fiscal (spending and revenue) measure, and must be deficit-neutral over 10 years. Of course, there is no way a permanent tax rate reduction can be deficit-neutral. Therefore, the bill had to be written as a temporary rate change, with an expiration date. The promoters of the bill assumed that their party would still be in power when the expiration date approached, and could extend the cuts using the same procedures that were used to first enact it. If the promoters’ party loses power, then the expiration creates what the British call a “sticky wicket” for the opposition, now the party in power. And so it goes. In a common sense world, the Senate would pass the Obama administration proposal to keep the Bush tax cuts for all but the highest income taxpayers. After all, hardly anyone opposes that step. Then one could have an actual, real debate on the merits of letting the cut for the highest income group expire, or not. According to Senate Majority Leader Harry Reid, common sense is now scheduled to break out in the lame-duck session after the elections and before the new Congress is seated in January, 2011. But suppose it doesn’t. Suppose that the same political calculus that prevailed for the last 18 months continues after the election — unlikely as that may seem. The new tax cut bill would remain stalled, and would procedurally die with the waning session of Congress. The tax cuts would then expire on New Year’s Eve, and we would enter 2011 with Clinton-era tax rates. What would happen? If you listen to the inside-the-Beltway hyperbole, all hell would break loose. But what would happen on planet Earth, in the actual United States of America? To get a handle on this, I start with something my tax accountant told me. His clients are, for the most part, relatively wealthy people. They own their own businesses, are senior corporate executives, or are retired with substantial investments to manage. In other words, top bracket folks. Their dirty secret? Year in, year out, despite the ongoing flood of new tax rules, procedures, forms, and rates, they actually pay about 25% of their gross to Uncle Sam. How does this work? Well, he explains, his job is to advise his clients so that they can utilize the deductions, rules, and programs to their best advantage, while still fully complying with the law. So what would you do in this situation if your nominal tax rate goes up? A lot of things, it turns out. You may put more into tax-deferred vehicles, or arrange your income to come as capital gains (lower rates). If you don’t have time to do the year-plus ahead planning for those strategies, the simplest thing is to spend more on things that generate deductions. Give more to charity. Buy a new computer. Do more business travel: go more often, stay longer, upgrade accommodations. When it comes to spending a bit more, creativity is easy. The result is that even though the rules changed, the check to Uncle will remain about the same. And while I have described the behavior changes of the highest income taxpayers, other taxpayers can employ similar strategies. They do not have as much discretion to implement them, but they also would have a lower tax rate increase to try to offset. In other words, Americans will do what they always have done since the Sixteenth Amendment went into effect in 1913: curse and scream — then quietly adapt. Who knows, they might actually boost the economy by spending more in certain areas (deductible, of course). That may explain, at least in part, the disparity between common political wisdom about tax cuts, particularly for the wealthy, and actual economic performance. A higher marginal tax rate can actually encourage spending, where a lower marginal tax rate can encourage saving. This seems to be the opposite of common sense, but it is the logic for people who are rich. In this context, “rich” simply means having sufficient resources to meet one’s actual, minimal, immediate needs — by this definition, a majority of Americans are at least somewhat rich. Finally, if the Bush era tax cuts expired, the Obama administration would then be free to devise a tax rate policy proposal not constrained by the policy of the prior administration. Political common sense would seem to say that not only would they, but they would be very motivated to pass it early in 2011 and make it retroactive to New Year’s Day. All this will most probably turn out to be idle speculation on a sunny Friday in October. But if Harry Reid is wrong about common sense erupting in the Senate, remember — you read it here first.

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Afghan Security Contractors Trashed In Senate Report

October 7, 2010

WASHINGTON — Heavy U.S. reliance on private security in Afghanistan has helped to line the pockets of the Taliban because contractors often don’t vet local recruits and wind up hiring warlords and thugs, Senate investigators said Thursday. The finding, in a report by the Senate Armed Services Committee, follows a separate congressional inquiry in June that concluded that trucking contractors pay tens of millions of dollars a year to local warlords for convoy protection. Sen. Carl Levin, chairman of the Senate panel, said he is worried the U.S. is unknowingly fostering the growth of Taliban-linked militias at a time when Kabul is struggling to recruit its own soldiers and police officers. “Almost all are Afghans. Almost all are armed,” Levin, a Michigan Democrat, said of the army of young men working under U.S. contracts. “We need to shut off the spigot of U.S. dollars flowing into the pockets of warlords and power brokers who act contrary to our interests and contribute to the corruption that weakens the support of the Afghan people for their government,” he added. The Defense Department doesn’t necessarily disagree but warns that firing the estimated 26,000 private security personnel operating in Afghanistan in the near future isn’t practical. This summer, U.S. forces in Afghanistan pledged to increase their oversight of security contractors and set up two task forces to look into allegations of misconduct and to track the money spent, particularly among lower-level subcontractors. The Defense Contract Management Agency has increased the number of auditors and support staff in the region by some 300 percent since 2007. And in September, Gen. David Petraeus, the top war commander in Afghanistan, directed his staff to consider the impact that contract spending has on military operations. But military officials and Republicans on the Senate Armed Services Committee warn that ending the practice of hiring local guards could worsen the security situation in Afghanistan. They say providing young Afghan men with employment can prevent them from joining the ranks of Taliban fighters. And bringing in foreign workers to do jobs Afghans can do is likely to foster resentment, they say. Also, contract security forces fill an immediate need at a time when U.S. forces are focused on operations, commanders say. “As the security environment in Afghanistan improves, our need for (private security contractors) will diminish,” Petraeus told the Senate panel in July. “But in the meantime, we will use legal, licensed and controlled (companies) to accomplish appropriate missions.” Levin says he isn’t suggesting that the U.S. stop using private security contractors altogether. But, he adds, the U.S. must reduce the number of local security guards and improve the vetting process of new hires if there’s any hope of reversing a trend that he says damages the U.S. mission in Afghanistan. His report represents the broadest look at Defense Department security contracts so far, with a review of 125 of these agreements between 2007 and 2009. The review concludes there were “systemic failures” in the management of the contracts, including “widespread” failures “to adequately vet, train and supervise armed security personnel.” The panel’s report highlights two cases in which security contracting firms ArmorGroup and EOD Technology relied on personnel linked to the Taliban. Last week, EOD Technology was one of eight security firms hired by the State Department under a $10 billion contract to provide protection for diplomats. A statement released by EOD Technology said the Lenoir City, Tenn.-based company had been encouraged to hire local Afghans and that it provided the names of its employees to the military for screening. The company said the military has never made it aware of any problems with its handling of the contract. In the case of ArmorGroup, the Senate panel says the company repeatedly relied on warlords to find local guards, including the uncle of a known Taliban commander. The uncle, nicknamed “Mr. White” by ArmorGroup after a character in the violent movie “Reservoir Dogs,” was eventually killed after a U.S. raid that uncovered a cache of weapons, including anti-tank land mines. ArmorGroup, based in McLean, Va., lost a separate contract this year protecting the U.S. Embassy in Kabul after allegations surfaced that guards engaged in lewd behavior and sexual misconduct at their living quarters. Susan Pitcher, a spokeswoman for Wackenhut Services, ArmorGroup’s parent company, said the company only engaged workers from local villages upon the “recommendation and encouragement” of U.S. special operations troops. Pitcher said that ArmorGroup stayed in “close contact” with the military personnel “to ensure that the company was constantly acting in harmony with, and in support of, U.S. military interests and desires.” The allegation that contractors rely on warlords for local hiring is not new. Last June, a Democratic House investigation led by Massachusetts Rep. John Tierney concluded that trucking companies had “little choice” but to pay local warlords “in what amounts to a vast protection racket.” Army criminal investigators are examining the allegations, specifically looking at whether companies hired under a $2 billion Pentagon contract to transport food, water, fuel and ammunition to troops were paying up to $4 million a week to insurgent groups. In August, Afghan President Hamid Karzai announced that private security contractors would have to cease operations by the end of the year. The workers, he said, would have to either join the government security forces or stop work because they were undermining Afghanistan’s police and army and contributing to corruption. U.S. officials responded that they shared the goal but wanted to move slow enough that military efforts weren’t impacted. Levin says he blames lost money to the Taliban on a lack of government oversight until this year. He previously has blamed the Bush administration for not devoting enough resources to the war in general. Led by Arizona Sen. John McCain, committee Republicans endorsed the investigative findings in a voice vote last month. But in a statement included in the report, they said Levin’s investigation “falls short of providing a more robust discussion of how slim our options were at the time.”

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White House Has ‘Concerns’ About Notarization Bill Seen As Foreclosure Cover

October 7, 2010

The White House is taking a careful look at legislation recently passed by Congress with little notice that would require courts to recognize notarizations from out-of-state, which some consumer advocates say would make it more difficult to fight bogus foreclosures by banks. “There were a series of meeting on that this morning here,” said White House spokesman Robert Gibbs, who added the White House would have a more definitive statement later on Thursday. “It is something that, as you said, there has been a lot of news on, the processing of documentation, the resulting impact on foreclosures, and that is being evaluated….In general, there is concern, ultimately, about the situation.” Max Gardner, a foreclosure defense attorney, said the timing of the bill was suspicious, considering fraudulent notarization of bogus foreclosure affidavits is at the heart of a scandal that has prompted the nation’s largest banks to pause foreclosures in 23 states. “The timing is just a little curious to me that all of a sudden you can’t get anything through the Senate at all and then all a sudden on a voice vote,” Gardner said. “This was first introduced in the House in 2007.” The legislation, titled the “Interstate Recognition of Notarizations Act,” would “require any Federal or State court to recognize any notarization made by a notary public licensed by a State other than the State where the court is located when such notarization occurs in or affects interstate commerce.” The bill would also require courts to recognize electronic notarizations. “The thing that concerns me about the bill is that the provisions in it that allow for digital notarization by electronic means,” said Gardner, “which implies that anyone with the appropriate software could notarize a digital document or image of a document, which would allow someone to notarize a document without seeing someone execute the document or doing the things a notary is supposed to do. In my mind that would lead a broad exception for more fraudulent practices.” Ira Rheingold, director of the National Association of Consumer Advocates, told HuffPost he wasn’t sure he agreed the bill was so problematic. “Just because you get a lawful notarization of a bunch of lies doesn’t change your ability to challenge an affidavit as a bunch of lies.” Sam Stein contributed reporting.

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Little-Noticed Bill Could Make It Harder To Challenge Foreclosures

October 7, 2010

UPDATE: An Obama administration official tells HuffPost that the White House has ‘concerns’ about the bill . Challenging foreclosures could become more difficult for homeowners if the president signs a bill that passed through the Senate last week. The little-noticed bill comes at a time when the validity of foreclosure proceedings across the nation have been called into question. The House passed the bill in April, and its brisk journey through the Senate has drawn scant attention, Reuters reports. If signed into law, it would require courts to accept certain documents that have been notarized out of state, streamlining foreclosure proceedings and stripping homeowners of one legal method of challenging a foreclosure. The legislation would come just as a foreclosure validity crisis is mounting: GMAC, JPMorgan Chase and Bank of America have admitted to not properly reviewing some of their foreclosure documents. The foreclosure controversies that have emerged in recent weeks throw doubts on the larger foreclosure system. A non-bank entity, Mortgage Electronic Registration Systems, has been initiating foreclosures, the Washington Post reports, exercising an authority that judges have ruled it does not have. In response to the mounting scandal, House Speaker Nancy Pelosi (D-Calif.) called on Tuesday for an investigation into foreclosure fraud . “This is a very big deal,” she told HuffPost. Ohio Secretary of State Jennifer Brunner told Reuters the timing of the bill’s passage was “suspicious,” implying that mortgage companies might have engaged in behind-the-scenes lobbying.

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After Bailout, Business Groups Now Turning On Former Allies

October 4, 2010

WASHINGTON — During the worst of the economic crisis, the nation’s most powerful business lobby pleaded with Congress to prop up financial institutions and stimulate the economy with hundreds of billions of dollars in borrowed money. “Make no mistake: When the aftermath of congressional inaction becomes clear, Americans will not tolerate those who stood by and let the calamity happen,” wrote Bruce Josten, the U.S. Chamber of Commerce’s vice president in September 2008, who at the time pressed lawmakers before their vote on a $700 billion bailout for Wall Street. A few months later, Congress faced a similar reckoning – whether to pass an $814 billion economic stimulus package consisting of about one-third tax breaks and two-thirds additional government spending. Again, Josten wrote to lawmakers: “The global economy is in uncharted and dangerous waters and inaction from Washington is not an option.” ___ EDITOR’S NOTE – An occasional look behind the rhetoric of political campaigns. ___ Fast forward to the present. The chamber is now spending millions of dollars on ads trying to elect candidates whose campaigns are based on opposing the very bank rescue and stimulus law it once supported. Lawmakers who voted with the chamber on the two crisis-era measures are now getting the back of its hand: Sen. Barbara Boxer in California, and Reps. Joe Sestak in Pennsylvania, Paul Hodes in New Hampshire and Brad Ellsworth in Indiana. “What they want is one of their own,” said Sestak, now running for the Senate against former Rep. Pat Toomey, who denounced bank rescue and the economic stimulus as ill-advised government interventions. “So back when we were salvaging the nation, that was then.” The chamber’s strategy underscores an all-or-nothing approach to lobbying, where partial support of their agenda is not sufficient and where recent clashes trump past agreements. Since the bank bailout and stimulus program, the four Democrats have taken stances contrary to what the business lobby wanted. They voted for President Barack Obama’s health care initiative and a consumer financial protection bureau. They supported reducing greenhouse gases and backed bills to make organizations like the chamber disclose donors who help pay for political ads. “The chamber looks at an endorsement on a broad range of issues, certainly not just one or two issues alone,” said J.P. Fielder, a chamber spokesman. “Looking at this so narrowly is like looking at the wrong end of a telescope. We need to consider all the factors that impact businesses.” The bank rescue initiated by former President George W. Bush and Obama’s recovery program aimed at stimulating economic growth have become two of the most popular Republican targets this election season, cited by some candidates as examples of misguided policies. One Senate candidate backed by the chamber, Republican Rand Paul in Kentucky, so opposed the bank bailout that he refused during the primary to accept financial backing from senators who voted for it. Another critic is Carly Fiorina, the California Republican Senate candidate who is challenging Boxer. The stimulus spending is one of Fiorina’s main avenues of attack against the three-term incumbent, saying it has not led to promised job growth while sticking taxpayers with a huge tab. “When the stimulus was passed, the California unemployment rate was 10.2 percent. It is now 12.4 percent. The stimulus was a failure,” Fiorina said in a recent telephone interview. The chamber has endorsed Fiorina and spent more than $2 million on TV ads criticizing Boxer. “I think it’s hypocritical with a capital H,” Eric Schultz, spokesman for the Democratic Senatorial Campaign Committee, said of the chamber’s campaign effort. Fielder, the chamber’s spokesman, said the group scored Boxer favorably on three of the seven votes it used to rank lawmakers on how friendly they were toward business. All votes get equal weight, so votes on the stimulus bill and health care overhaul are measured equally with less momentous legislation, such as a bill to promote the U.S. travel industry. But the effects of the bills are not equal, as the chamber seemed to recognize in an Oct. 1, 2008, letter to lawmakers about the financial bailout: “Failure to approve this legislation will wreak intolerable hardship on average Americans. The chamber urges you not to stand by and let this happen but to make a courageous stand to preserve the flow of credit to the economy. The American people will recognize your act of courage.” Not one of the political ads the chamber has rolled out across the country this year commends a lawmaker for voting for the stimulus bill and the bailout. The chamber’s $75 million planned for campaign ads in this year’s elections will go, in part, to criticize candidates who voted for both measures. For example, Hodes, who is running for the Senate in New Hampshire, voted for the stimulus bill and is now being attacked by the chamber as someone whose “out-of-control spending helped push America’s debt to $13 trillion.” Hodes voted against the bailout. Ellsworth, who is running for the Senate in Indiana, is accused in the chamber’s latest ad of voting for trillions of dollars in government spending. The ad asks viewers to “tell Ellsworth Hoosiers can’t afford his big-government agenda.” Both ads directly refer to the candidates’ votes for a Democratic-led overhaul of health care, a bill the chamber strongly opposed. But they also tap into voters’ concerns about growing federal budget deficits. Fielder said the ads highlight the federal budget and support for that budget by Hodes and Ellsworth. “When we look race by race, we have to say which candidate has a policy platform that’s going to address where the economy is right now and help businesses create jobs,” Fielder said. ___ Associated Press writer Jim Kuhnhenn contributed to this report. (This version CORRECTS to show that Hodes voted against the bailout.) Multimedia: An interactive with highlights of the midterm races is in the wdc/politics_timeline folder. This story is part of AP’s financial and general news services.)

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GOP, U.S. Chamber Of Commerce Beat Back Bill To Combat Outsourcing

September 28, 2010

Senate Republicans beat back an effort by Democrats Tuesday to end tax breaks for companies who send jobs offshore only to import products back into the United States. The House has passed a series of similar legislation over the past several weeks, as Democrats work to portray Republicans as in the pocket of Big Business at the expense of workers, the economy, the trade deficit and the budget deficit. That message was muddied, however, by the defection of four Democrats and Independent Democrat Joe Lieberman, who voted against the motion to end a filibuster. “I wish this election would be a simple referendum on this issue,” Dick Durbin, the Senate’s number two Democrat, said on the Senate floor Monday night. “Who in the world believes that we should be rewarding corporations in our country for shipping jobs overseas?” The U.S. Chamber of Commerce is one powerful answer to Durbin’s query. The Chamber, which represents businesses in the United States, has aggressively battled the effort to reduce outsourcing. During the debate over the stimulus, the U.S. Chamber fought efforts to include a provision that would encourage taxpayer money to be spent on products made by domestic companies. It opposed the outsourcing bill, arguing in a letter to the Senate that “the concept of economic growth is not a zero-sum game. Replacing a job that is based in another country with a domestic job does not stimulate economic growth or enhance the competitiveness of American worldwide companies.” In 2004, Chamber head Tom Donohue made the case that outsourcing shouldn’t be a concern because only “two, maybe three million jobs, maybe four” would be lost. “American companies employ 140 million Americans,” Donohue said in a CNN interview that Chamber opponents are happy to remind him of. “They provide health care for 160 million Americans. They provide training in terms of 40 billion a year. The outsourcing deal over three or four or five years and the two or three sets of numbers are only going to be, you know, maybe two, maybe three million jobs, maybe four.” The bill included a payroll tax holiday for companies that bring jobs back from overseas, ended tax breaks for plants that shut down to go elsewhere, and blocked companies from deferring their tax bill year to year by keeping money out of the U.S. The U.S. Chamber, in a letter to the Senate, outlined its opposition to the measure and said that it may use the vote to rate how friendly to business a senator is in the lobby’s annual scorecard. The bill, argued the Chamber, would “significantly curtail [tax] deferral [of earnings], reversing longstanding tax policy and subjecting American worldwide companies to immediate double taxation on the earnings of their foreign subsidiaries. Limiting deferral would hinder the global competitiveness of these American companies, impede U.S. economic growth, and ultimately result in the loss of jobs – both at the companies directly impacted and companies in their supply chains.” Sens. Ben Nelson (D-Neb.), Jon Tester (D-Mont.) and Mark Warner (D-Va.) broke with their party to vote to continue the filibuster, as did the chairman of the Senate Finance Committee, Max Baucus (D-Mont.). Republicans argued that revoking the tax breaks would punish American companies and make them less competitive with foreign firms. But more broadly, they pressed the case that the vote was a political stunt since Democrats knew they didn’t have 60 votes to cut off the filibuster. The best thing to do, said GOP senators, is to get out of town. “I think that right now all concerns, the leader included, are to get this over with, get back home and campaign,” said Sen. Jim Inhofe (R-Okla.). “To be honest with you, because of the election, we’re not going to get anything done. We’re just wasting–they’re wasting time. My hope is that after the election we can come back here and get serious about some issues that need to be dealt with,” said Sen. George Voinovich (R-Ohio). “They may be forcing it, but what we should be taking up right now are the tax cuts,” argued Sen. George LeMieux (R-Fla.). Sen. Bernie Sanders (I-Vt.) pushed back on the GOP argument that the vote was political theater. “Republicans call this a stunt. You go and you speak to the millions of American workers who have lost their jobs, because their plants have shut down and their companies have moved to China, and you ask them if they think focusing on outsourcing and demanding that American companies reinvest in American companies is a stunt. I don’t think they believe it’s a stunt,” he said. “We’re hearing a lot of things thrown out to create a diversion,” added Sen. Debbie Stabenow (D-Mich.). “The question is this: Do Republicans think that middle class families should pay through their tax subsidies for plants to close up and the cost of shipping jobs overseas to be on their back?” House Democrats are making a similar attempt to draw a bright line on jobs between Republicans and Democrats. At Tuesday’s “Conference on the Renaissance of American Manufacturing,” House Majority Leader Steny Hoyer (D-Md.) laid out the agenda for the remaining floor time before the election. “[T]his week the House will vote on three additional bills,” he said, according to his prepared remarks. “One will make sure that the government buys American-made American flags. Another helps ensure that American workers are given every opportunity to earn certifications, degrees, and qualifications for the jobs American industry needs to fill. And the third addresses China’s unfair currency policy and its harms to American workers. By deliberately keeping the value of its currency low, China is able to sell its goods in the United States at an artificially low price–which helps put American manufacturers out of business. The bill we vote on this week will help level the playing field for American businesses and workers.”

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Bill To Tax Firms That Export Jobs Fails In Senate

September 28, 2010

WASHINGTON — The Senate on Tuesday blocked tax legislation that would have punished U.S. firms that export jobs. But the political symbolism of trying to save American jobs, not passing a bill, was the Democrats’ closing argument on the economy in the waning weeks of the congressional elections. Republicans complained that the vote used a serious subject – economic recovery – to score points with voters five weeks before the balloting in which all 435 House seats, 37 Senate seats and the Democratic majority are on the line. The bill in question, Republicans said, would make U.S. companies less competitive. “The liberal Senate leadership has brought forward a politically motivated bill that will never become law,” said Sen. Orrin Hatch, R-Utah. But majority Democrats, now without their original plan to close the campaign with a middle class tax cut, sought to convince voters that the bill showed off their commitment to supporting the nation’s economic recovery. “This is part of the continuing focus on jobs,” Sen. Debbie Stabenow, D-Mich., told reporters. The bill failed, 53-45, to attract the 60 votes required to advance. Four Democrats and one Independent joined Republicans to block its progress. But debating it and forcing senators on the record was the Democrats’ point. “We’re just a few weeks away from an election,” said Sen. Dick Durbin, D-Ill. “I wish this election would be a simple referendum on the debate we’re having on the floor of the Senate right now.” The bill at issue in the Senate would exempt companies that import jobs from paying the 6.2 percent Social Security payroll tax for new U.S. employees who replace overseas workers who had been doing similar work. The two-year exemption would be available for workers hired over the next three years. The tax cut – estimated to cost about $1 billion – would be partially offset by tax increases on companies that move jobs overseas. The bill would prohibit firms from taking deductions for business expenses associated with expanding operations in other countries. It would increase taxes on U.S. companies that close domestic operations and expand foreign ones to import products to the U.S. Republicans argued the tax cuts would be difficult to administer and the tax increases would hurt international corporations that employ U.S. workers. “Let’s have votes on real job creation incentives and let’s get out of this gamesmanship,” said Sen. Chuck Grassley of Iowa, the top Republican on the tax-writing Senate Finance Committee. The tax increases total $369 million over the next decade, according to a preliminary estimate by the nonpartisan Joint Committee on Taxation. Combined with the tax cut, the bill would add an estimated $721 million to the budget deficit over the next decade. The Democrats voting to block the bill were Sens. Max Baucus of Montana, Ben Nelson of Nebraska, Jon Tester of Montana and Mark Warner of Virginia. Also voting no was Sen. Joe Lieberman, I-Conn.

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Senate Republicans Block Debate On Campaign Finance Bill

September 23, 2010

WASHINGTON — Senate Republicans on Thursday stood fast in blocking legislation requiring special interest groups running campaign ads to identify their donors. Mirroring a Senate vote on the bill last July, all 39 Republicans who voted stopped Democrats from bringing the campaign disclosure bill to the Senate floor. The 59-39 vote fell one short of the 60 needed to advance the legislation. Two Republicans didn’t vote. Republicans dismissed Democratic efforts to revive the bill as an attempt to win political points before the midterm elections. The White House-backed measure is a response to a 5-4 Supreme Court decision last January overturning a decades-old law that barred corporations, unions and other organizations from spending on advertising, mass mailings and other forms of political activity. Democrats warned that the ruling would lead to a deluge of ads from shadowy special interest groups financed by corporate millions. “It’s no longer a premonition, it’s a reality,” said Sen. Charles Schumer, D-N.Y., a main sponsor of the legislation, pointing to special interest ads already running in states such as Ohio and California with hotly contested political races. “We have these nameless, faceless individuals spending huge amounts of money, corporate money and other money. There is certainly no transparency whatsoever,” Democratic Majority Leader Harry Reid, D-Nev., said. President Barack Obama said in a statement that he was “deeply disappointed by the unanimous Republican blockade.” He said the vote was a “victory for special interests and U.S. corporations including foreign-controlled ones who are now allowed to spend unlimited money to fill our airwaves, mailboxes and phone lines right up until Election Day.” But Senate Republican leader Mitch McConnell, R-Ky., said Democrats were playing “pure politics” in trying to stop opponents from criticizing Democratic policies. “They’re trying to rig the system to their advantage. That’s it. It’s quite simple.” Schumer said Democrats were prepared to move the effective date of the bill to next January so it would not influence the November elections, but that offer failed to win any Republican support. Republicans also accused Democrats of playing pre-election politics earlier this week when they united to block action on a defense policy bill that would have allowed votes on opening a path to legal status for the children of illegal immigrants and on ending the military’s don’t ask-don’t tell policy for gays. The campaign finance bill, which narrowly passed the House on a largely partisan vote, would have required nearly all organizations airing political ads independently of candidates or the political parties to disclose their top donors and the amounts they paid. It would have banned a variety of political activity by entities holding a government contract worth more than $10 million and corporations where foreigners own more than a majority of voting shares. The rejection of the disclosure bill came as the the House Administration Committee approved legislation that would make candidates for federal office eligible for public funding if they rely solely on private contributions of $100 or less. Sponsors of the bill that passed in committee, led by Reps. John Larson, D-Conn., and Walter Jones, R-N.C., said it would reduce the role of special interest money in campaigns. ___ The disclosure bill is S. 3628. Online: Congress: http://thomas.loc.gov

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Senate Republicans Block Debate On Campaign Finance Bill

September 23, 2010

WASHINGTON — Senate Republicans on Thursday stood fast in blocking legislation requiring special interest groups running campaign ads to identify their donors. Mirroring a Senate vote on the bill last July, all 39 Republicans who voted stopped Democrats from bringing the campaign disclosure bill to the Senate floor. The 59-39 vote fell one short of the 60 needed to advance the legislation. Two Republicans didn’t vote. Republicans dismissed Democratic efforts to revive the bill as an attempt to win political points before the midterm elections. The White House-backed measure is a response to a 5-4 Supreme Court decision last January overturning a decades-old law that barred corporations, unions and other organizations from spending on advertising, mass mailings and other forms of political activity. Democrats warned that the ruling would lead to a deluge of ads from shadowy special interest groups financed by corporate millions. “It’s no longer a premonition, it’s a reality,” said Sen. Charles Schumer, D-N.Y., a main sponsor of the legislation, pointing to special interest ads already running in states such as Ohio and California with hotly contested political races. “We have these nameless, faceless individuals spending huge amounts of money, corporate money and other money. There is certainly no transparency whatsoever,” Democratic Majority Leader Harry Reid, D-Nev., said. President Barack Obama said in a statement that he was “deeply disappointed by the unanimous Republican blockade.” He said the vote was a “victory for special interests and U.S. corporations including foreign-controlled ones who are now allowed to spend unlimited money to fill our airwaves, mailboxes and phone lines right up until Election Day.” But Senate Republican leader Mitch McConnell, R-Ky., said Democrats were playing “pure politics” in trying to stop opponents from criticizing Democratic policies. “They’re trying to rig the system to their advantage. That’s it. It’s quite simple.” Schumer said Democrats were prepared to move the effective date of the bill to next January so it would not influence the November elections, but that offer failed to win any Republican support. Republicans also accused Democrats of playing pre-election politics earlier this week when they united to block action on a defense policy bill that would have allowed votes on opening a path to legal status for the children of illegal immigrants and on ending the military’s don’t ask-don’t tell policy for gays. The campaign finance bill, which narrowly passed the House on a largely partisan vote, would have required nearly all organizations airing political ads independently of candidates or the political parties to disclose their top donors and the amounts they paid. It would have banned a variety of political activity by entities holding a government contract worth more than $10 million and corporations where foreigners own more than a majority of voting shares. The rejection of the disclosure bill came as the the House Administration Committee approved legislation that would make candidates for federal office eligible for public funding if they rely solely on private contributions of $100 or less. Sponsors of the bill that passed in committee, led by Reps. John Larson, D-Conn., and Walter Jones, R-N.C., said it would reduce the role of special interest money in campaigns. ___ The disclosure bill is S. 3628. Online: Congress: http://thomas.loc.gov

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Senate Republicans Block Debate On Campaign Finance Bill

September 23, 2010

WASHINGTON — Senate Republicans on Thursday stood fast in blocking legislation requiring special interest groups running campaign ads to identify their donors. Mirroring a Senate vote on the bill last July, all 39 Republicans who voted stopped Democrats from bringing the campaign disclosure bill to the Senate floor. The 59-39 vote fell one short of the 60 needed to advance the legislation. Two Republicans didn’t vote. Republicans dismissed Democratic efforts to revive the bill as an attempt to win political points before the midterm elections. The White House-backed measure is a response to a 5-4 Supreme Court decision last January overturning a decades-old law that barred corporations, unions and other organizations from spending on advertising, mass mailings and other forms of political activity. Democrats warned that the ruling would lead to a deluge of ads from shadowy special interest groups financed by corporate millions. “It’s no longer a premonition, it’s a reality,” said Sen. Charles Schumer, D-N.Y., a main sponsor of the legislation, pointing to special interest ads already running in states such as Ohio and California with hotly contested political races. “We have these nameless, faceless individuals spending huge amounts of money, corporate money and other money. There is certainly no transparency whatsoever,” Democratic Majority Leader Harry Reid, D-Nev., said. President Barack Obama said in a statement that he was “deeply disappointed by the unanimous Republican blockade.” He said the vote was a “victory for special interests and U.S. corporations including foreign-controlled ones who are now allowed to spend unlimited money to fill our airwaves, mailboxes and phone lines right up until Election Day.” But Senate Republican leader Mitch McConnell, R-Ky., said Democrats were playing “pure politics” in trying to stop opponents from criticizing Democratic policies. “They’re trying to rig the system to their advantage. That’s it. It’s quite simple.” Schumer said Democrats were prepared to move the effective date of the bill to next January so it would not influence the November elections, but that offer failed to win any Republican support. Republicans also accused Democrats of playing pre-election politics earlier this week when they united to block action on a defense policy bill that would have allowed votes on opening a path to legal status for the children of illegal immigrants and on ending the military’s don’t ask-don’t tell policy for gays. The campaign finance bill, which narrowly passed the House on a largely partisan vote, would have required nearly all organizations airing political ads independently of candidates or the political parties to disclose their top donors and the amounts they paid. It would have banned a variety of political activity by entities holding a government contract worth more than $10 million and corporations where foreigners own more than a majority of voting shares. The rejection of the disclosure bill came as the the House Administration Committee approved legislation that would make candidates for federal office eligible for public funding if they rely solely on private contributions of $100 or less. Sponsors of the bill that passed in committee, led by Reps. John Larson, D-Conn., and Walter Jones, R-N.C., said it would reduce the role of special interest money in campaigns. ___ The disclosure bill is S. 3628. Online: Congress: http://thomas.loc.gov

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US Senate OKs Small Biz Bill

September 17, 2010

The US Senate has approved a new bill to boost lending to small businesses in an effort to give the economic recovery a boost ahead of midterm elections in November according to Reuters

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