Category : Senate

AP–Bottom line at health summit: lots of smoke

Sen. Chris Dodd, D.-Conn., who will be among the lawmakers participating, worked a rally of supporters on the eve of Thursday’s meeting, scheduled to start at 10 a.m. EST.

“After that meeting, you can either join us or get out of the way,” Dodd said.

Not if Republicans have anything to do with it. Riding a populist backlash against the widening reach of government, they insist that Obama start from scratch, a notion the White House rejects. They’re unified in opposing the Democratic bills passed last year and have pulled back from more ambitious GOP-backed plans that might have provided a foundation for compromise.

With premiums going up by double digits for some consumers, polls show the public wants Congress and the president to deal with spiraling medical costs, shrinking coverage and questionable quality. But Americans are split over the Democratic bills. If Obama and the Democrats can’t get their legislation passed, there may still be a chance for a modest measure this year that smooths the rough edges of the current system but stops well short of coverage for all.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Health & Medicine, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate

Tax Status Of Lawmakers' Religious Refuge Disputed

The three-story, brick townhouse at 133 C Street SE sits a half-block from the Cannon House Office Building, roughly three blocks from the Capitol ”” the home-away-from-home for a regular contingent of fundamentalist Christian members of Congress, who can pray in the living room and walk to work.

The C Street Center, which owns the 1880 vintage townhouse, claims status as a church. And as with other religious organizations, the IRS takes the center’s word that it is a church. As a result, the center doesn’t have to file public tax returns, as most nonprofit organizations must do.

The arrangement fits the C Street Center’s practically invisible public presence. But now a group of 13 ministers has asked the IRS to revoke that church status.

Their complaint, delivered to the IRS on Tuesday, says: “An organization whose chief activity is providing room and board to members of Congress is not a church.” It cites a list of 15 factors that the agency considers in granting church status.

Read or listen to it all.

Posted in * Culture-Watch, * Economics, Politics, House of Representatives, Law & Legal Issues, Politics in General, Religion & Culture, Senate

David Brooks–Sinking Into the Mire with Health reform

On Monday, the White House made another compromise. On the surface, it seems mundane. The imposition of the excise tax will be delayed until 2018, and the threshold at which the tax kicks in will be raised. In reality, the delay turns the tax into another Washington gimmick. Lord, give me virtue, but not yet.

The odds are high that the excise tax will never actually happen. There is no reason to think that the Congress of 2018 will be any braver than the Congress of today. It will probably get around the pay-go rules or whatever else might apply and it’ll postpone the tax again. The excise tax will turn into another “doc fix.” This is a mythical provision in which doctors are always about to get their reimbursements cut. But somehow they never do because the cuts are always pushed back, year after year.

So we’ve sunk another level in our tawdry tale. The White House, to its enormous credit, has tried to think about the long term. But it has been dragged ever lower into the mire by Congressional special interests that are parochial in the extreme.

This bill may be deficit-neutral on paper. But it has just become a fiscal time bomb. The revenue will never come. Compromises have to be made to keep it (barely) alive. But responsibility ebbs. Politics wins.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Health & Medicine, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate

Consumer Confidence Takes Unexpectedly Sharp Dip to 46 in February

One gauge, measuring consumers’ assessment of current conditions, dropped to 19.4 from 25.2, the lowest level since 1983. The other barometer, which measures their outlook over the next six months and had been rising since October 2009, fell to 63.8 from 77.3.

The overall Consumer Confidence Index hit a historic low of 25.3 in February 2009 but then enjoyed a three-month climb to 54.8 in May, fueled by signs the economy might be stabilizing. Since then, it has been mired in a narrow range, dropping as low as 47, as rising unemployment took a toll, before climbing again for a three-month stretch.

February’s reading is well below the 61.4 figure in September 2008, when the financial crisis intensified with the collapse of Lehman Brothers. The index has had an average reading of 95.6 since the Conference Board starting tracking the figures in 1967.

Read it all.

Posted in * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Office of the President, Personal Finance, Politics in General, President Barack Obama, Psychology, Senate, The U.S. Government

AP–Obama rate control plan's impact could be limited

If President Obama’s proposal for federal regulation of health insurance rates becomes law, rates for individual policyholders likely would still climb, experts said Monday, but not by as much as insurers might want.

Roughly half the states have the power to limit or block rate hikes for individual health insurance customers. Initial increases generally get knocked down by state officials, often substantially, based on recent cases.

And holding down rates below the level where insurers could make a fair profit would only drive many out of the market, consultants and analysts said, reducing competition and reducing access ”” the opposite of what the Obama administration has been seeking.

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Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Corporations/Corporate Life, Economy, Health & Medicine, House of Representatives, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate

George Will–Progressives and the growing dependency agenda

A century ago, Herbert Croly published “The Promise of American Life,” a book — still in print — that was prophetic about today’s progressives. Contemplating with distaste America’s “unregenerate citizens,” he said that “the average American individual is morally and intellectually inadequate to a serious and consistent conception of his responsibilities.” Therefore, Croly said, national life should be a “school” taught by the government: “The exigencies of such schooling frequently demand severe coercive measures, but what schooling does not?” Unregenerate Americans would be “saved many costly perversions” if “the official schoolmasters are wise, and the pupils neither truant nor insubordinate.”

Subordination is dependency seen from above. Today, it is seen approvingly by progressives imposing, from above, their dependency agenda.

There is no school choice here; no voucher will enable Americans to escape from enveloping dependency on this “government as school.” The dependency agenda is progressive education for children of all ages, meaning all ages treated as children.

Read the whole piece.

Posted in * Culture-Watch, * Economics, Politics, Children, Economy, Education, House of Representatives, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, The U.S. Government

The Economist Leader–What's gone wrong in Washington?

…the basic system works; but that is no excuse for ignoring areas where it could be reformed. In the House the main outrage is gerrymandering. Tortuously shaped “safe” Republican and Democratic seats mean that the real battles are fought among party activists for their party’s nomination. This leads candidates to pander to extremes, and lessens the chances of bipartisan co-operation. An independent commission, already in existence in some states, would take out much of the sting. In the Senate the filibuster is used too often, in part because it is too easy. Senators who want to talk out a bill ought to be obliged to do just that, not rely on a simple procedural vote: voters could then see exactly who was obstructing what.

These defects and others should be corrected. But even if they are not, they do not add up to a system that is as broken as people now claim. American democracy has its peaks and troughs; attempts to reform it dramatically, such as California’s initiative craze, have a mixed history, to put it mildly. Rather than regretting how the Republicans in Congress have behaved, Mr Obama should look harder at his own use of his presidential power.

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Posted in * Culture-Watch, * Economics, Politics, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

Time Magazine Cover Story–Why Washington is Frozen

How polarized is America today? Not all that polarized by historical standards. In 1856, a South Carolina Congressman beat a Massachusetts Senator half to death with his cane in the Senate chamber ”” and received dozens of new canes from appreciative fans. In 1905, Idaho miners bombed the house of a former governor who had tried to break their union. In 1965, an anti”“Vietnam War activist stationed himself outside the office of the Secretary of Defense and, holding his year-old daughter in his arms, set himself on fire. (She lived; he did not.) By that measure, a Rush Limbaugh rant isn’t particularly divisive. Americans may yell at one another about politics, but we mostly leave our guns and bombs at home, which is an improvement….

What really defines our political era, as Ronald Brownstein notes in his book The Second Civil War, is not the polarization of Americans but the polarization of American government. In the country at large, the disputes are real but manageable. But in Washington, crossing party lines to resolve them has become excruciatingly rare.

The result, unsurprisingly, is that Americans don’t like Washington very much. According to a CNN poll conducted in mid-February, 62% of Americans say most members of Congress do not deserve re-election, up 10 points from 2006. Public skepticism about the Federal Government and its ability to solve problems is nothing new, but the discontent is greater today than it has been in at least a decade and a half. Witness the growth of the Tea Party movement, a diffuse conglomeration of forces that have coalesced around nothing so much as a shared hostility toward Washington. Or the Feb. 15 announcement by Indiana Senator Evan Bayh ”” a man who almost made it onto three presidential tickets ”” that he would not stand for re-election because “Congress is not operating as it should” and “even in a time of enormous challenge, the people’s business is not getting done.”

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Posted in * Culture-Watch, * Economics, Politics, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

Irwin Stelzer–Angry voters will force action on runaway U.S. Deficit

So all is coming right. Sales of existing homes in the final quarter of last year were 27.2% above the 2008 level. Home construction jumped 2.8% in January, to its highest level in six months. The mining, manufacturing and utilities sectors also grew at satisfactory rates as did retail sales.

So confident is the Federal Reserve in the recovery that it has raised a key interest rate.

Alas, every silver lining has a cloud ”” in the case of the American economy, several. For one thing, the fiscal deficit, which is fuelling some of the growth, is clearly unsustainable. Even under the rosy scenario posited by the president ”” economic growth at about twice the rate the non-partisan Congressional Budget Office is predicting ”” the deficit will still be unsustainably high, and rising, in 2020.

Congress knows this, the president knows this, and the opposition knows this. But the Democrats want to fill the gap by raising taxes, anathema to Republicans, who fear such a move would stifle growth by reducing entrepreneurs’ incentive to create new businesses and jobs. The Republicans want to cut spending, a move the Democrats say would stifle growth by prematurely withdrawing a prop from a fragile recovery.

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Posted in * Economics, Politics, Budget, Economy, Federal Reserve, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Party Gridlock in Washington Feeds Fear of a Debt Crisis

After decades of warnings that budgetary profligacy, escalating health care costs and an aging population would lead to a day of fiscal reckoning, economists and the nation’s foreign creditors say that moment is approaching faster than expected, hastened by a deep recession that cost trillions of dollars in lost tax revenues and higher spending for safety-net programs.

Yet rarely has the political system seemed more polarized and less able to solve big problems that involve trust, tough choices and little short-term gain. The main urgency for both parties seems to be about pinning blame on the other, before November’s elections, for deficits now averaging $1 trillion a year, the largest since World War II relative to the size of the economy.

Mr. Bayh, the centrist Democrat from Indiana, lodged his complaint about excessive partisanship and Congressional gridlock on Monday by way of explaining his decision not to seek re-election. But he is hardly alone in sounding an alarm about the long-term budgetary outlook, which has Medicare, Medicaid and Social Security costs growing at unsustainable rates and an inefficient tax system that cannot keep up.

“I used to think it would take a global financial crisis to get both parties to the table, but we just had one,” said G. William Hoagland, who was a fiscal policy adviser to Senate Republican leaders and a witness to past bipartisan budget summits. “These days I wonder if this country is even governable.”

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Niall Ferguson in the FT–A Greek crisis is coming to America

What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch. Deficits did not “save” us half so much as monetary policy ”“ zero interest rates plus quantitative easing ”“ did. First, the impact of government spending (the hallowed “multiplier”) has been much less than the proponents of stimulus hoped. Second, there is a good deal of “leakage” from open economies in a globalised world. Last, crucially, explosions of public debt incur bills that fall due much sooner than we expect

For the world’s biggest economy, the US, the day of reckoning still seems reassuringly remote. The worse things get in the eurozone, the more the US dollar rallies as nervous investors park their cash in the “safe haven” of American government debt. This effect may persist for some months, just as the dollar and Treasuries rallied in the depths of the banking panic in late 2008.

Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.

Even according to the White House’s new budget projections, the gross federal debt will exceed 100 per cent of GDP in just two years’ time. This year, like last year, the federal deficit will be around 10 per cent of GDP. The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Budget, Economy, Europe, Globalization, Greece, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The National Deficit, The U.S. Government

Peggy Noonan–The Off-Center President

This touches on the still-essential question that historians will write books about: How did the president lose the room? How did he lose popularity?

The leftward edge of the left says he did it by being too accommodating, by trying for a bipartisanship that doesn’t exist. The rightward edge of the right says he did it by revealing his essentially socialistic agenda. The center has said, in polls and at the polls, that it didn’t like his administration’s first-year obsession with a health-care bill that was huge, costly and impenetrably complicated, and would be run by those people who gave you the DMV and the post office.

The political class this week blamed it on the Chicago Mafia, the longtime Obama friends and associates who surround him in the Oval Office. But even that doesn’t explain it. What did they do wrong? And why do people think Mr. Obama’s advisers are different from Mr. Obama?

Washington’s pundits have begun announcing that the White House is better at campaigning than at governing, but that was obvious last summer. The president and his advisers understand one thing really well, and that is Democratic primaries and Democratic politics. This is the area in which they made their careers. It’s how they defeated Hillary Clinton””by knowing how Democrats think. In the 2008 general election, appealing for the first time to all of America and not only to Democrats, they had one great gift on their side, the man who both made Mr. Obama and did in John McCain, and that was George W. Bush.

But now it is 2010, and Mr. Bush is gone. Mr. Obama is left with America, and he does not, really, understand it. That is why he thinks moving to the center would be political death, when moving to the center and triangulating, as Bill Clinton did, might give him a new lease on life.

Read it all from yesterday’s Wall Street Journal.

Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, President George Bush, Senate, The U.S. Government

WellPoint's CEO on ObamaCare's mistakes and how to pick up the political pieces

…Mrs. [Angela] Braly says. “We really do have to get at the underlying question of health-care costs.”

That was the core promise of ObamaCare. Overall health costs for people insured by WellPoint increased by 8.9% in 2009 alone, and arresting this climb was the reason so many industry groups, not only the insurers, joined with the White House and Democrats. Nobody thinks the status quo is a success. But as Mrs. Braly notes ruefully, “The nature of health care is very complex, and sometimes the nature of politics is very simple.”

The tragedy, as she sees it, is what “a wasted opportunity” it all turned out to be. “Health-care reform” soon became “health-insurance reform” exclusively. “It was a pivot that was””unfortunate,” she says, “because it is not going to solve the longer-term problem.”

It’s hard to see how WellPoint could be to blame for surging health spending, Mrs. Braly says, when 85 cents out of every premium dollar or more “is paid out in the actual cost of care, doctors, hospitals, suppliers, drugs, devices.” Confiscating the 2009 profits of the entire insurance industry would pay for two days of U.S. health care.

Read it all from this Weekend’s Wall Street Journal.

Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Corporations/Corporate Life, Economy, Health & Medicine, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate

The Economist–The budget and the deficit: An opportunity wasted

Mr Obama’s budget reduces the projected deficits between now and 2020 by just over $2 trillion, mainly through reductions in planned spending on overseas military operations and proposed tax changes. The concern is that many of the recommended tax changes may not stick. Mr Obama’s Financial Crisis Responsibility Fee (the so-called bank tax) will probably survive, but other items, including reform of the international tax system and repeal of fossil-fuel subsidies, were proposed last year and failed to make it through Congress. Measures boosting taxes on upper-income households (those earning above $250,000 a year) should fare better, but the decision to sustain George Bush’s tax cuts for everyone else is short-sighted.

If Congress balks, as expected, at some tax provisions, then deficits will prove larger than budgeted for. But even the president’s proposals fail to cut deficits to the 3% target. To make up the difference, Mr Obama will create a deficit commission by executive order, charged with making recommendations for long-run budget sustainability. Yet Congress had earlier failed to pass its own proposal to create a bipartisan deficit commission, which would at least have been able to force a yes-or-no vote on its recommendations. Republicans who had praised the idea cynically reversed themselves when the president signalled his support. And even before its defeat, the Senate voted 97-0 to shield Social Security from the commission’s purview.

The aversion of Congress to hard decisions is no small obstacle for the president. But Mr Obama has done himself no favours by fudging the hard budget choices which must ultimately be made. It could be a costly failure. The American government has room to continue supporting the weak economy, but only for as long as markets believe that the United States will eventually make good on its obligations. In this budget proposal, Mr Obama has not done anything to reassure them.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Politics in General, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Joseph E. Stiglitz on the Economy–Muddling Out of Freefall

The US economy is in a mess ”“ even if growth has resumed, and bankers are once again receiving huge bonuses. More than one out of six Americans who would like a full-time job cannot get one; and 40% of the unemployed have been out of a job for more than six months.

As Europe learned long ago, hardship increases with the length of unemployment, as job skills and prospects deteriorate and savings gets wiped out. The 2.5-3.5 million foreclosures expected this year will exceed those of 2009, and the year began with what is expected to be the first of many large commercial real-estate bankruptcies. Even the Congressional Budget Office is predicting that it will be the middle of the decade before unemployment returns to more normal levels, as America experiences its own version of “Japanese malaise….”

Three things can make a difference: a second stimulus, stemming the tide of housing foreclosures by addressing the roughly 25% of mortgages that are worth more than the value the house, and reshaping our financial system to rein in the banks.

Read it all.

Posted in * Economics, Politics, Budget, Economy, House of Representatives, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Fiscal Stimulus Package of 2009, The National Deficit, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government

Notable and Quotable

Don’t get confused by the size of the numbers at stake. Pay attention to the ratio of cumulative debt to the size of the national economy. That will tell you how easily we can manage the debt.

The debt-to-GDP ratio right now is close to 53%””still in the manageable zone. But after the boomers hit retirement, it will soar. One of the most telling figures in the president’s budget document is the Congressional Budget Office’s projection that by 2020 the debt-to-GDP ratio will be 77%, assuming no entitlement reforms. That’s bad news. The ratio is moving in the wrong direction. At some point, the dollar could tank and interest rates explode.

Robert Reich in today’s Wall Street Journal

Posted in * Economics, Politics, Budget, Credit Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

NY Times–The National Prayer Breakfast draws controversy

For more than 50 years, the National Prayer Breakfast has served as a prime networking event in Washington, bringing together the president, members of Congress, foreign diplomats and thousands of religious, business and military leaders for scrambled eggs and supplication.

Usually, the annual event passes with little notice. But this year, an ethics group in Washington has asked President Obama and Congressional leaders to stay away from the breakfast, on Thursday. Religious and gay rights groups have organized competing prayer events in 17 cities, and protesters are picketing in Washington and Boston.

The objections are focused on the sponsor of the breakfast, a secretive evangelical Christian network called The Fellowship, also known as The Family, and accusations that it has ties to legislation in Uganda that calls for the imprisonment and execution of homosexuals.

The Family has always stayed intentionally in the background, according to those who have written about it. In the last year, however, it was identified as the sponsor of a residence on Capitol Hill that has served as a dormitory and meeting place for a cluster of politicians who ran into ethics problems, including Senator John Ensign, Republican of Nevada, and Gov. Mark Sanford, Republican of South Carolina, both of whom have admitted to adultery.

Read the whole article.

Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, House of Representatives, Office of the President, Politics in General, Religion & Culture, Senate, Spirituality/Prayer

Notable and Quotable

I understand that positioning for the next election, partisan politics and lobbying money are a deadly combination to any possible reform. But its so obvious to me watching these folks push and shove good ideas away that they: 1) are utterly clueless how all of this (credit crisis, recession, housing bust) happened; b) have absolutely no idea how to fix any of it; iii) are primarily concerned with getting re-elected.

Barry Ritholtz

Posted in * Culture-Watch, * Economics, Politics, Corporations/Corporate Life, Economy, Energy, Natural Resources, Federal Reserve, House of Representatives, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Treasury Secretary Timothy Geithner

WSJ front Page: Deficit to Hit All-Time High

President Barack Obama will propose on Monday a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700 billion, or 4% of the gross domestic product, by 2013, according to congressional aides.

The deficit for the current fiscal year, which ends on Sept. 30, would eclipse last year’s $1.4 trillion deficit, in part due to new spending on a proposed jobs package. The president also wants $25 billion for cash-strapped state governments, mainly to offset their funding of the Medicaid health program for the poor.

Read it all.

Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The National Deficit, The U.S. Government

NPR: Senate Chaplain: Religious Leader For Secular Flock

Most mornings, after the gavel is struck in the Senate chamber on Capitol Hill, a prayer is offered in that most secular body ”” a practice that goes back to the founding fathers at the Continental Congress in 1774.

Chaplain Barry C. Black delivers the prayer, offering up some of the first words heard each day in the chamber.

Black works from an office in the Capitol building, a well-appointed room with high, arched ceilings and wall-to-wall mahogany bookcases. Compared with the number of people working for senators, the chaplain’s staff is downright humble. He has an executive assistant, a director of communications and a chief of staff.

But from this third-floor perch in the Capitol building, Black enjoys one of the best views of the National Mall’s mosaic of cherry trees, museums and monuments.

Read or listen to it all.

Posted in * Culture-Watch, * Economics, Politics, Politics in General, Religion & Culture, Senate

David Broder: In rejecting a fiscal commission, senators betray the nation

On the very day this week when the Congressional Budget Office warned that the succession of previously unimaginable trillion-dollar-plus budget deficits could inflict ruin on the United States, the Senate faced a moment of truth.

For the first time, a truly bipartisan proposal aimed at averting such a calamity came to a vote. By 53 to 46, the senators approved the measure officially described as a bill for “responsible fiscal action, to assure the long-term fiscal stability and economic security of the federal government of the United States, and to expand future prosperity and growth for all Americans.”

Of course, this being the 21st-century Senate, it meant defeat because of a failure to command the 60-vote supermajority the opposition now always requires.

Read it all.

Posted in * Economics, Politics, Budget, Economy, Politics in General, Senate, The U.S. Government

AP: Senate Backs Fed's Bernanke For Second Term

Embattled Federal Reserve Chairman Ben Bernanke won confirmation for a second term Thursday, but only by the closest vote ever for the crucial post and after withering criticism from lawmakers for bailing out Wall Street while other Americans suffered in recession.

The Senate confirmed Bernanke for a new four-year term by a 70-30 vote, a seemingly solid majority but 14 votes worse than the closest previous vote for a Fed chairman.

The battle over Bernanke’s confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies. Its decisions on interest rates can have immense consequences, from the success or failure of the largest companies to the typical home-buyer’s ability to get an affordable loan to the price of cereal at the grocery or gas at the corner station.

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Posted in * Economics, Politics, Economy, Federal Reserve, Politics in General, Senate, The U.S. Government

John Hussman: A Blueprint for Financial Reform

1) Immediately vest the FDIC (or other regulator that has a strict consumer-protection mandate) with the authority to take receivership / conservatorship of distressed bank and non-bank financial institutions, including bank holding companies, in the event of insolvency….

2) Require a significant portion of the capital of bank and non-bank financial institutions to be in the form of convertible debt (contingent capital).

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Posted in * Culture-Watch, * Economics, Politics, Corporations/Corporate Life, Credit Markets, Economy, Federal Reserve, House of Representatives, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Treasury Secretary Timothy Geithner

Bernanke's Confirmation Battle Damages Fed's Clout

No matter how it plays out, Ben Bernanke’s bruising confirmation battle has damaged the U.S. Federal Reserve’s clout and perceived independence.

Mr. Bernanke is more than the Fed’s chief decision maker. Fed officials see him as their brand, a smart, honest and stoic voice best able to defend decisions of the past two years to a skeptical Congress and public. Even if the Senate backs Mr. Bernanke this week, he won’t speak with the same authority, and the Fed will have a harder time casting itself as above partisan politics.

Fortunately for the Fed, the hard call about when to raise interest rates doesn’t need to be made now. Fortunately for Mr. Bernanke, his support inside the Obama administration, and even more so inside the Fed, is solid. But the longer the battle drags on, the more it could interfere with the Fed’s ability to communicate convincingly. And no matter what, the Fed will have less sway as Congress debates whether to rein in its powers.

Read the whole thing.

Posted in * Economics, Politics, Economy, Federal Reserve, Office of the President, Politics in General, President Barack Obama, Senate, The U.S. Government

David Broder: In Massachusetts Senate race, a vote of no confidence

When I spoke with Rep. Richard Neal, the veteran Democratic congressman from Springfield, Mass., on the afternoon of the special election to fill Ted Kennedy’s Senate seat, he told me, “It’s an alarm-clock moment for us.”

That is no exaggeration. Scott Brown, the little-known candidate who pulled out a victory over state Attorney General Martha Coakley, is the first Republican to win a Massachusetts Senate race since 1972 and will be the only Republican in what has been an all-Democratic congressional delegation from the Bay State.

Ron Kaufman, the longtime Republican National Committee member from Massachusetts, said that “it was a perfect storm” that made it possible.

“We had a really good candidate,” Kaufman said. “A military veteran, a family guy, a fiscal conservative, moderate on social issues, a pro-choice Catholic. But it was bigger than that. The Democrats didn’t understand that people here are very upset with the way things are going in Washington, just as they are elsewhere. They see big sums being spent, big deficits piling up, and they want to send a message.”

Read it all.

Posted in * Economics, Politics, Office of the President, Politics in General, President Barack Obama, Senate

Obama checks on Bernanke prospects, senators say secure

U.S. President Barack Obama called lawmakers on Saturday to check that Federal Reserve Chairman Ben Bernanke had enough support for a second term and two key senators said the nomination was on track.

In a sign of how worried the White House is about a sudden recent surge in opposition to Bernanke’s renomination, Obama contacted the Democratic Senate leadership to make sure it had enough votes.

“(The) president made … calls to a few senators this afternoon including leadership to make sure everything on track and he has been assured that Bernanke is on track for confirmation,” a senior administration official said.

Read it all.

Posted in * Economics, Politics, Economy, Federal Reserve, Office of the President, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Sunday (London) Times Leader: Barack Obama's banking plan could split the West

Scott Brown has a lot to answer for. His stunning Senate victory for the Republicans in Massachusetts sent the White House into a spin. President Obama promptly decided on the populist gesture of targeting Wall Street with vague proposals to outlaw banks’ risky activities and limit their size. Though seemingly hastily wheeled out, the ideas were first floated a few months ago by Paul Volcker, former chairman of the Federal Reserve Board, a man widely regarded as the best US central banker of the modern era. As a result they have some credibility, though they are far from being a panacea.

Many believe the banks have brought this on their own heads. The return of big bonuses so soon after a crisis of their own making, for which ordinary people will be paying for years, showed crass insensitivity and greed. America’s banks rushed to pay off their obligations to taxpayers under the Tarp (troubled asset relief programme) precisely so that they could get back on the bonus gravy train. The behaviour of the banks, however, is no excuse for flawed policy. Nobody yet knows the detail of Mr Obama’s plans, probably not even the president. But from what we know so far, they suffer from two serious shortcomings.

The first is that they would not have stopped the current crisis….

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Corporations/Corporate Life, Economy, England / UK, Federal Reserve, Globalization, House of Representatives, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The 2009 Obama Administration Bank Bailout Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government, Treasury Secretary Timothy Geithner

Senator Christopher Dodd: Democrats might need a month off from Health reform

Democratic Sen. Chris Dodd said today that Democrats may need to take more than a month off from the health care debate to regroup, saying it is up to President Obama to lead the way.

Dodd is the first congressional Democratic leader to suggest such an extended break, signaling that Democrats’ may be much further from a workable endgame strategy than they have suggested in the days since Republican Scott Brown won the Massachusetts Senate seat and ended the Democrats’ 60-vote majority.

The comments are sure to raise questions about whether Democrats are giving up on reform. A month-long break would almost certainly kill any momentum health reform has left, making it that much harder to pass.

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Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Health & Medicine, House of Representatives, Office of the President, Politics in General, Senate

Opposition Grows Against Second Term for Bernanke

The confirmation of Ben S. Bernanke to a second four-year term as chairman of the Federal Reserve ran into further trouble on Friday as two more Democratic senators said they would vote against him.

The White House came to Mr. Bernanke’s defense, but the Senate majority leader, Harry Reid, appeared uncertain about whether there were the 60 votes necessary to confirm Mr. Bernanke before his term as chairman expires on Jan. 31. Mr. Reid said late Friday that while he planned to vote for Mr. Bernanke’s confirmation, his support was “not unconditional.”

Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the Banking Committee, warned Friday that a no vote would send the “worst signal to the market right now,” and could lead to an economic “tailspin.”

In a statement Friday morning, Senator Barbara Boxer, Democrat of California, came out against Mr. Bernanke, who was named to his post during the Bush administration. She said she had “a lot of respect” for him and praised him for preventing the economic crisis from getting even worse. “However, it is time for a change,” she said. “It is time for Main Street to have a champion at the Fed.”

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Posted in * Economics, Politics, Economy, Federal Reserve, Office of the President, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Time Magazine: Mass Mutiny: How Scott Brown Shook the Political World

Brown’s victory ”” some called it “the Scott heard round the world” ”” on the eve of the first anniversary of Barack Obama’s Inauguration was an ominous sign for Democrats for the midterm elections ahead and a potentially crippling blow to Obama’s entire agenda. Brown ran explicitly on a promise to be the “41st Senator,” who would give the Republicans the power to block what he called “the trillion-dollar health care bill that is being forced on the American people,” one that will “raise taxes, hurt Medicare, destroy jobs and run our nation deeper into debt.”

That such a message would resonate here was poignant, given that no one had fought harder and longer than Kennedy for universal health care, something that the terminally ill liberal lion had referred to before his death in August as “the cause of my life.” And it was all the more ironic considering that Massachusetts has come closer than any other state to assuring coverage to all of its citizens, thanks to a 2006 law that was championed by a Republican governor, Mitt Romney, who was celebrating onstage with Brown on election night.

Although the rest of the country sees Massachusetts as the bluest of blue states ”” it had not elected a Republican Senator since Richard Nixon was President ”” its political complexion is actually more subtle. Registered Democrats outnumber Republicans 3 to 1, but fully half the state’s voters are registered “unenrolled” ”” not affiliated with any party. And four of its last five governors have been Republicans, albeit ones of a more moderate stripe than that of the national party.

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Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Health & Medicine, Office of the President, Politics in General, President George Bush, Senate