Thirty-six members of Congress came out against a proposed tax on stock and derivatives trading, warning that it would drive up unemployment and undercut a shaky economic recovery in the U.S.

Charging investors for trading stocks, futures, options and other instruments would also drive up the cost of credit and private investment for both businesses and governments, according to a Dec. 15 letter sent by the 36 members, a copy of which was seen by Dow Jones Newswires.

The letter marks the latest opposition to an early December proposal by Rep. Peter DeFazio, (D., Ore.), who introduced the transaction-tax idea as one way to raise money for job creation and paying down the federal budget deficit.

“In reality, it would be a tax on all investment and savings vehicles because mutual funds and money market fund transactions are, by definition, purchases and sales of securities and bonds,” wrote the members of Congress in the letter.

Read it all

When Congressional Democrats last week pushed to lift the U.S. federal debt ceiling by nearly two trillion dollars, Republicans blasted the move as fiscally irresponsible and voiced concern over the long term consequences of a level of deficit spending not seen since World War II.

So on Monday House Majority Leader Steny Hoyer indicated that lawmakers would seek to pass a temporary borrowing limit to last through 2010.

Still, fiscal conservatives fret over what they view as runaway spending and Congress’ silence over how to deal with the growing deficit….

“We haven’t got any clear indication that there’s a strategy to control this,” said Desmond Lachman, resident fellow at the American Enterprise Institute. “We hear the Obama administration paying lip service but there is no clear indication of how to prevent the U.S. from getting into increasing debt.”

Read it all .

Senate Democratic leaders appeared poised Monday night to abandon efforts to create a government-run insurance safety net in their push for health-care reform, as they attempted to close ranks around a bill they hoped would win the backing of all 60 members of their caucus.

Democratic negotiators had already disappointed liberal lawmakers by jettisoning a full-fledged public insurance plan a week earlier. Last night, party leaders conceded that a key portion of the compromise they crafted to replace the public option — a proposal allowing people as young as 55 to buy into Medicare — also did not have sufficient support from Democratic moderates to overcome a likely Republican filibuster.

Senate Majority Leader Harry M. Reid (D-Nev.), after consulting with senior White House officials, rallied his caucus in a closed-door meeting Monday evening, reminding senators that there was broad consensus behind most of the provisions in the $848 billion package and warning them of the consequences of not passing a bill before the end of the year.

“Democrats are not going to let the American people down,” he told reporters after the meeting. “I am confident that by next week, we will be on our way to final passage.”

Read it all.

Democratic leaders in the U.S. Senate struggled on Monday to move forward on a sweeping healthcare overhaul sought by President Barack Obama in the face of opposition from a frequent irritant — Joe Lieberman.

As the Senate opened a make-or-break week for healthcare, Senator Lieberman’s threat to join Republicans in blocking the bill complicated Democratic efforts to gather the 60 votes needed to overcome Republican opposition.

Obama invited all 60 members of the Senate Democratic caucus to the White House on Tuesday to discuss a way to reach agreement, party sources said.

Read it all.

Democrats plan to allow the government’s debt to swell by nearly $2 trillion as part of a bill next week to pay for wars in Afghanistan and Iraq. The amount pretty much equals the total of a year-end spending spree by lawmakers and is big enough to ensure that Congress doesn’t have to vote again on going further into debt until after the 2010 elections.

The move has anxious moderate Democrats maneuvering to win new deficit-cutting tools as the price for their votes, igniting battles between the House and the Senate and with powerful interest groups on both the right and the left.

The record increase in the so-called debt limit – the legal cap on the amount of money the government can borrow – is likely to be in the neighborhood of $1.8 trillion to $1.9 trillion, House Majority Leader Steny Hoyer, D-Md., said Friday.

Read it all.

The president of the U.S. bishops’ conference is calling the Senate’s move to table an amendment that would prevent federal money from funding abortion “a serious blow” to health care reform.

Cardinal Francis George, the archbishop of Chicago, said this today after the Senate voted 54-45 on Monday to kill the Nelson-Hatch-Casey Amendment proposed by senators Ben Nelson, Orrin Hatch and Robert Casey.

A similar measure was passed in the House of Representatives, paving the way for the passage there of the “Affordable Health Care for America Act.”

“The Senate is ignoring the promise made by President Obama and the will of the American people in failing to incorporate longstanding prohibitions on federal funding for abortion and plans that include abortion,” Cardinal George said.

“While we deplore the Senate’s refusal to adopt the Nelson-Hatch-Casey amendment, we remain hopeful that the protections overwhelmingly passed by the House will be incorporated into needed reform legislation,” he added. “Failure to exclude abortion funding will turn allies into adversaries and require us and others to oppose this bill because it abandons both principle and precedent.”

Read it all.

“There is a huge middle class marriage penalty hidden in the House and Senate health care bills. The penalty becomes evident by evaluating questions like the following: How much would two single people, each making $30,000 per year, pay for private health insurance if the Pelosi bill was in effect now? The answer is $1,320 per year for both individuals combined (based on the premium limits and subsidies outlined on the charts below). But how much would they pay for the same level of insurance under the Pelosi bill if they were to marry? Their combined cost would then be about $12,000 a year (the estimated cost for private insurance).

Read it all.

Most New Yorkers hadn’t heard of Bart Stupak before he attached his devastating anti-abortion amendment to the House’s health-care-reform bill three weeks ago. We know a lot more about him now, of course: that he lives in a Christian rooming house on C Street; that he’s a former state trooper. He has become a symbol of legislative zealotry, living proof that the fight over the right to choose will always attract a more impassioned opposition than defense. (As Harrison Hickman, a former pollster for NARAL, put it to me: “If you believe that choosing the wrong side of the issue means spending eternal life in Hades, of course you’re going to be more focused on it.”) Just a week after the vote, when I reached the Michigan Democrat as he was driving across his district, he seemed dumbfounded that anyone found his brinkmanship surprising. “I said to anyone who’d listen: ”˜Do you want health care, or do you want to fight out abortion?’”‰” says Stupak. He points out that he’d nearly managed to bring down a rule about abortion funding earlier in the summer, this time in a bill about spending in the District of Columbia. “I said, ”˜Look, that was a shot across your bow,’”‰” he recalls. “”‰”˜I was being polite to you. That was a warning.’ And the leadership just blew us off.”

Until it realized it couldn’t, of course. And the results sent chills through the pro-choice world, dampening what was otherwise an impressive victory for Democrats on the issue of universal health care. If Stupak’s amendment holds, then any health-insurance plan that’s either listed on the government-run exchange or accepts federal subsidies””which would likely be almost all of them””would not be allowed to cover abortions. (The Senate bill is better thus far, but what the legislation will ultimately be, assuming it passes at all, is anyone’s guess.) Four days after the vote, Kate Michelman, the former head of NARAL, and Frances Kissling, the former head of Catholics for Choice, warned of an ominous new landscape in a Times op-ed: “The House Democrats reinforced the principle that a minority view on the morality of abortion can determine reproductive-health policy for American women.”

But is that actually right? Was Stupak’s truly the minority view?

Read it all.

Democratic Senate negotiators struck a tentative agreement Tuesday night to drop the controversial government-run insurance plan from their overhaul of the health-care system, hoping to remove a last major roadblock preventing the bill from moving to a final vote in the chamber.

Under the deal, the government plan preferred by liberals would be replaced with a program that would create several national insurance policies administered by private companies but negotiated by the Office of Personnel Management, which oversees health policies for federal workers. If private firms were unable to deliver acceptable national policies, a government plan would be created.

In addition, people as young as 55 would be permitted to buy into Medicare, the popular federal health program for retirees. And private insurance companies would face stringent new regulations, including a requirement that they spend at least 90 cents of every dollar they collect in premiums on medical services for their customers.

Read it all.

The Senate on Tuesday rejected an effort to tighten restrictions against using federal funds for abortion under Democrats’ landmark healthcare legislation, handing a victory to abortion-rights advocates but setting up a potential conflict with the House.

The Senate voted 54-45 to kill an amendment offered by Sen. Ben Nelson (D-Neb.) to make sure the bill does not undermine the long-standing ban on federal abortion funding.

Read it all.

We have now reached the stage of the health-care debate when all that matters is getting a bill passed, so all news is good news, more subsidies mean lower deficits, and more expensive insurance is really cheaper insurance. The nonpolitical mind reels.

Consider how Washington received the Congressional Budget Office’s study Monday of how Harry Reid’s Senate bill will affect insurance costs, which by any rational measure ought to have been a disaster for the bill. CBO found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. Family policies under the status quo are projected to cost $13,100 on average, but under ObamaCare will jump to $15,200.

Fabulous news!

“No Big Cost Rise in U.S. Premiums Is Seen in Study,” said the New York Times, while the Washington Post declared, “Senate Health Bill Gets a Boost.” The White House crowed that the CBO report was “more good news about what reform will mean for families struggling to keep up with skyrocketing premiums under the broken status quo.”

Read it all.

Three House Democrats are ripping a proposed tax on stock transactions, even as the idea gains traction among Democrats desperate to fund jobs creation….

“Proponents of a transaction tax argue that a small 0.25 percent tax on stocks would be paid for by the highly paid financial traders and would not affect most Americans. This is simply not true. A tax on stock transactions would affect every single person who owns and invests in stocks from small business owners to senior citizens,” the letter said.

Read it all.

Congress has so far sensibly put this off limits. “Audit” has a different meaning in the context of the GAO than in everyday usage. It means examine, investigate, evaluate and, often, criticize. It’s not just crunching numbers. The GAO usually undertakes studies at the request of someone in Congress. This suggests that the GAO could be used to influence or intimidate the Fed through selective investigations, which would involve access to internal Fed documents and interviews with policymakers. The Fed might be pressured to finance government deficits or to adopt an “undue focus on the short term,” Vice Chairman Donald Kohn testified before Congress on July 9. Historically, similar pressures have caused other central banks to unleash inflationary torrents of money, Kohn said.

This is not inevitable, but even the impression that the Fed’s “independence” is compromised could perversely undermine confidence in the dollar, leading to higher market interest rates or a rapid fall in the dollar’s foreign exchange value. Massive projected government budget deficits compound the psychological damage. Similar objections apply to Dodd’s proposal to end the Fed’s power to examine and regulate financial institutions. If this crisis teaches anything, it is that the Fed needs to know more — not less — about large financial institutions.

The Fed isn’t infallible. Its mistakes contributed to the crisis. Its present low-interest-rate policy poses dangers of fostering inflation or new “asset bubbles.” But the congressional Fed-bashing poses greater dangers. Ironically, the destructive remedies being peddled are part of “financial reform” legislation. If this is “reform,” we’re better off without it.

Read it all.

The animus towards the Fed is striking, considering that its unprecedented market interventions almost certainly averted a financial meltdown last year and a far more severe recession. But many congressmen care less about the disaster avoided than the injustice of bailed-out bankers taking home record bonuses as unemployment keeps rising. The Fed is now guilty by association, seen as too close to banks, too quick to bail them out and too generous and secretive when it does so. The Fed’s structure supplies fodder for this critique. The compromise that led to its creation in 1913 split responsibility for monetary policy between politically-appointed governors in Washington, dc, and the presidents of 12 regional banks, whose boards are appointed in part by private bankers.

Read it all.

For a political horror show, fast-forward to the summer of 2010: The unemployment rate is stubbornly high, hovering between 9.3 and 9.7 percent. Companies are wary about hiring more workers because the economy remains soft. Small businesses, which normally power a recovery, are caught in a credit squeeze.

In this scenario, the jobs outlook will remain bleak for another year. The unemployment rate will remain well above 8 percent in 2011. And the economy won’t bounce back completely for five years after that.

The Democrats, in our scary 2010 movie, will be heading toward the midterm elections hoping to preserve their 81-seat margin in the House. Vulnerable incumbents will be clamoring for more economic stimulus, but the Obama administration will be constrained by the huge budget deficits needed to bail out the economy after the 2008 financial crisis.

I wish that this economic forecast were just a bad dream after too much Thanksgiving turkey. But it’s drawn from the minutes of the Federal Reserve’s Nov. 3-4 meeting, released last week.

Read it all

For the investor (the person who risks the capital to create real live self-sustaining jobs), every investment, whether it results in a profit or not, would be taxed two more times.

What is near certainty is that this bill will succeed at driving traders to international markets that are escaping the stilted centralized economy that DeFazio and Perlmutter feel the need to champion.

It’s a given that this misguided vengeance against Wall Street is comfort food for populist legislators, but “Wall Street” isn’t stocked exclusively with revolting would-be criminals. It is made up of retirees, small-business owners, entrepreneurs and parents who invest in their kids’ college funds. At last count, nearly 50 percent of Americans are, on some level, invested in the stock market.

If one was a hopeless skeptic, he might believe these legislators were trying to undermine private sector growth by re-appropriating wealth in such a ham-handed way. Even reliable liberal Sen.Chuck Schumer said that a Wall Street transaction tax had the potential to “harm economic recovery efforts by deterring capital investment.”

Read it all.

…the general view among independent health care economists is that these changes will not fundamentally bend the cost curve. The system after reform will look as it does today, only bigger and more expensive.

As Jeffrey S. Flier, dean of the Harvard Medical School, wrote in The Wall Street Journal last week, “In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it.”

…the current estimates almost certainly understate the share of the nation’s wealth that will have to be shifted. In these bills, the present Congress pledges that future Congresses will impose painful measures to cut Medicare payments and impose efficiencies. Future Congresses rarely live up to these pledges.

Read it all.

Leading up to the vote, Gregg reportedly said Republicans will attempt to filibuster the bill if it resembles what passed the House. After the vote he criticized it for creating a “new multitrillion dollar entitlement program that massively grows the size and role of the federal government, significantly increases taxes, especially on small businesses, and cuts Medicare by over a trillion dollars.”

Nine faiths were represented by the 15 religious leaders, which included rabbis, priests and pastors, including, from Dover, Rabbi Larry Karol of Dover Temple Israel; the Rev. Susan Garrity of St. Thomas Episcopal Church; the Rev. Mark Monson Alley of St. John’s Methodist Church; Dr. Julian Olivier, chaplain at Wentworth Douglass Hospital; and the Rev. Kendra Ford of First Unitarian Universalist Society of Exeter.

“As religious leaders, we affirm that all human life is sacred. We affirm our moral obligation to provide for the basic needs of all people, including food, clothing, shelter, legal protection and medical care,” they wrote in the letter. “We affirm the equal, just and impartial treatment of all people. … As religious leaders, we recognize that we are all morally bound to work for equal access to health care.”

Read it all.

A sudden crisis is unlikely. Other rich countries with far bigger debts relative to the size of their economies, from Italy to Japan, have soldiered on without hitting a wall. Stable politics, transparent laws and economic dominance give America unequalled credibility with lenders. For all the anxiety the declining dollar drew from China this week (see article), it has no serious rival as the world’s reserve currency. America has sensibly used this fiscal freedom to enact an aggressive stimulus programme. This should be maintained for as long as it is needed.

Yet ignoring the future is also costly. The problem is not the deficits in the next couple of years, but in the years that follow. Uncertainty over how taxes may be raised to shrink deficits may already be weighing on business confidence. Worries about inflation or default could start to push up interest rates. Eventually, private investment will be crowded out.

Barack Obama and Congress can pre-empt such corrosive uncertainty with a plan to reduce the deficit now. Far from requiring immediate spending cuts or tax increases, a credible plan would reassure markets and allow an orderly exit from fiscal stimulus. The Federal Reserve provides a model: it does not plan to tighten monetary policy in the near future, but has signalled its willingness to do so when inflation threatens.

Read it carefully and read it all.

Sen. Joseph Lieberman, speaking in that trademark sonorous baritone, utters a simple statement that translates into real trouble for Democratic leaders: “I’m going to be stubborn on this.”

Stubborn, he means, in opposing any health-care overhaul that includes a “public option,” or government-run health-insurance plan, as the current bill does. His opposition is strong enough that Mr. Lieberman says he won’t vote to let a bill come to a final vote if a public option is included.

Probe for a catch or caveat in that opposition, and none is visible. Can he support a public option if states could opt out of the plan, as the current bill provides? “The answer is no,” he says in an interview from his Senate office. “I feel very strongly about this.” How about a trigger, a mechanism for including a public option along with a provision saying it won’t be used unless private insurance plans aren’t spreading coverage far and fast enough? No again.

Read it all.

Companies and groups hiring lobbying firms on health issues nearly doubled this year as special interests rushed to shape the massive revamp of the nation’s health care system now in its final stretch before Congress.

About 1,000 organizations have hired lobbyists since January, compared with 505 during the same period in 2008, according to a USA TODAY analysis of congressional records compiled by the nonpartisan CQ MoneyLine.

Overall, health care lobbying has increased, exceeding $422 million during the first ninth months of the year, according to the Center for Responsive Politics, which tracks money in politics. That’s more than any other industry and a nearly 10% jump over the same period in 2008. The center’s Dave Levinthal said the frenzy of new lobbying activity makes financial sense.

“If lobbying didn’t work, people wouldn’t do it,” he said.

Read it all.

As one of the few senators undecided on healthcare reform, Arkansas Democrat Blanche Lincoln faces a huge headache. Liberals attack her as an obstructionist, even though she cast a key vote keeping the effort alive. Republicans are lining up to run against her — seven, so far, and counting.

The voters here at home seem conflicted, if not downright confused.

Take Jim Havens. He greeted Lincoln with a warm embrace when she showed up at the University of Central Arkansas for a service honoring veterans; his late brother was a family friend. Moments later, as Lincoln sat on stage, the 73-year-old state employee related his frustrations with the healthcare system: the struggle to cover his wife before Medicare kicked in, the exclusions that made her expensive policy barely worth the cost.

“What we got is broken,” Havens said. But, he quickly added, “what I don’t think we need to do is rush to fix it and make things even worse.”

Read it all.

The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said.

There is as yet no agreement within the White House or in Congress on how to try to curb the U.S. jobless rate. But the differences in opinion suggest that rifts could emerge among Democrats as they wrestle with how to beat back the highest unemployment rate in a generation.

The jobless rate, which hit 10.2% in October, has continued to climb despite the implementation of a $787 billion stimulus package in February.

The subheader for the article is: White House Is Unenthusiastic on Legislation That Would Raise Government Debt. To which I respond–good for them. Read it all.

But while our culture of imagination is still vibrant, the other critical factor that still differentiates countries today ”” and is not a commodity ”” is good governance, which can harness creativity. And that we may be losing. I am talking about the ability of a society’s leaders to think long term, address their problems with the optimal legislation and attract capable people into government. What I increasingly fear today is that America is only able to produce “suboptimal” responses to its biggest problems ”” education, debt, financial regulation, health care, energy and environment….

The standard answer [to the the governance problem] is that we need better leaders. The real answer is that we need better citizens. We need citizens who will convey to their leaders that they are ready to sacrifice, even pay, yes, higher taxes, and will not punish politicians who ask them to do the hard things. Otherwise, folks, we’re in trouble. A great power that can only produce suboptimal responses to its biggest challenges will, in time, fade from being a great power ”” no matter how much imagination it generates.

Grandma said that, too.

Read it all.

Only a day after Senate Democrats voted to move into a historic debate on overhauling the nation’s healthcare system, key centrists made it clear today that the party is still a long way from delivering on its promise to provide near-universal insurance coverage and contain medical costs.

Faced with the prospect of Republican filibusters, Democratic leaders must deliver the same kind of total unity they managed to achieve in Saturday’s vote to begin debate: Every Democratic senator, plus two independents who caucus with them, supported the key procedural motion.

But several of those senators spoke out today to say that they will not support the healthcare bill itself unless major changes were made.

Read it all.

Senate Majority Leader Harry M. Reid (Nev.) appeared Saturday to secure the 60 votes needed to move an $848 billion health-care reform bill to the Senate floor for debate, as the last two holdouts in his Democratic caucus said they will not join in a Republican filibuster.

After days of indecision, Sens. Blanche Lincoln (Ark.) and Mary Landrieu (La.) declared that they will vote to advance the bill despite reservations. Reid now expects all 60 members of his caucus to vote yes at 8 p.m. Saturday, clearing the way for amendment deliberations to begin after the Thanksgiving recess.

Reid is aiming for final passage before Christmas. The House has already passed its version of the bill.

Read it all.

It’s simply not true that America is ambivalent about everything when it comes to the Obama health plan.

The day after the Congressional Budget Office (CBO) gave its qualified blessing to the version of health reform produced by Senate Majority Leader Harry Reid, a Quinnipiac University poll of a national cross section of voters reported its latest results.
This poll may not be as famous as some others, but I know the care and professionalism of the people who run it, and one question was particularly interesting to me.

It read: “President Obama has pledged that health insurance reform will not add to our federal budget deficit over the next decade. Do you think that President Obama will be able to keep his promise or do you think that any health care plan that Congress passes and President Obama signs will add to the federal budget deficit?”

The answer: Less than one-fifth of the voters — 19 percent of the sample — think he will keep his word. Nine of 10 Republicans and eight of 10 independents said that whatever passes will add to the torrent of red ink. By a margin of four to three, even Democrats agreed this is likely.

Read it all.

Sen. Blanche Lincoln, a centrist Democrat from Arkansas, said Saturday she would vote to move forward with debate on health-care legislation, giving Democrats what appeared to be the 60 votes needed to bring the sweeping bill to the Senate floor for debate.

Sen. Lincoln, who faces a tough reelection battle next year, said it is “important that we begin this debate” and not “simply drop the issue and walk away.” She added a bit later: “I’m not afraid of that debate.”

Her comments came few hours after Sen. Mary Landrieu (D., La.) said she would vote to move forward with debate, and a day after Sen. Ben Nelson (D., Neb.) said he, too, would vote to move forward. The three senators had all been undecided for weeks, casting doubt on the vote planned for Saturday on whether to proceed.

Read it all.

Take the time to watch it all–he is one of the real heroes of our time.

House Speaker Nancy Pelosi on Thursday played down the possibility of using a stock trade tax to fund jobs legislation, saying it should only be done in conjunction with other countries.

“It would have to be an international rule,” Pelosi (D-Calif.) said at her weekly news conference. She said that she did not want to see trading action move to other countries to avoid such a tax.

She noted, “Other nations have proposed this, and we have been the ones who resisted.” But global consensus would be difficult, if not impossible, to reach by Dec. 18, when House leaders want to finish their job-creation bill.

Read it all.