Nation editor-at-large and host of MSNBC’s All In with Chris Hayes.
Crunch time on Capitol hill this week. Greg Kaufmann provides the low-down:
Recovery and TARP -- those are the cable news networks go-to issues this week….Dems want the recovery bill on the President's desk on Friday before a 10-day recess. But they have a tough road ahead after the Senate approves its version on Tuesday. Then come negotiations with the House -- and with the Senate providing $40 billion less in aid to cash-strapped states, $20 billion less in school infrastructure spending, and $100 billion more in tax cuts -- a fight looms. The Washington Post reports that President Obama "is interested in restoring support" for the education and state aid items. He's got a prime-time 8 PM news conference tonight -- maybe he'll reveal the non-flatearther Republicans that make him think he can restore those vital investments and still get 60 votes.
Timothy "Taxes" Geithner will explain the new TARP plan for the next $350B on Tuesday. Supposedly $50 to $100 billion will go towards helping homeowners, but according to the Post Administration sources say that part of the plan is "highly fluid" -- which is highly disconcerting. Geithner is also expected to ask for MORE money to get the banks lending more, but on Meet the Press Congressman Barney Frank said, "If they haven't been able to get the banks to lend more, restrict excessive compensation and help deal with foreclosure in a reasonable way, they're not going to get [more money]."
Speaking of Frank, his Financial Services Committee is holding a must-see hearing on Wednesday on how the first round of TARP funds were used. He's bringing in the CEOs of Goldman, Citi, Bank of America, Wells Fargo, JP Morgan Chase, Morgan Stanley, Mellon, and State Street and it should be a hoot to watch. Frank told Meet the Press: "These are eight very highly paid people…. What is it that you do, because you get a bonus, that you wouldn't otherwise do? I want to know, like, if they didn't get a bonus, would they knock off early on Wednesday?" Fed Chairman Bernanke will also testify on Tuesday "on the Fed's $1.2 trillion loans to banks, investment banks, and foreign central banks since September," according to CongressDaily.
Other news: Panetta should get confirmed this week… there will be a big push to do the same for Hilda Solis… Rep. John Dingell will be honored as the longest-serving House member in history…. there are reports Democrats might introduce card check legislation in the House -- but I wouldn't count on it -- not with recovery bill and Solis votes pending ….
Other hearings: the guy you don't want to be -- Peanut Corp. of America President Stewart Parnell testifying on the salmonella outbreak linked to his plant…. The House Armed Services Committee takes up Strategy in Iraq and Afghanistan…. and a Budget Committee hearing on Fighting Hunger and Investing in Children on Thursday.
From Greg Kaufmann:
This Week in Congress
Republicans continued to fight with no holds barred to defend a failed ideology. Thirty-six out of 41 Republican Senatorsvoted for an amendment that would have stripped the Recovery bill of ALL spending. Congressman Barney Frank said, "If anything can persuade Congressional Republicans to stop their hyper partisan sniping at the recovery package these disastrous employment numbers should be it."(Call your Senators -- tell them to pass the Recovery bill including $500 million for the Green Jobs Act.)
President Obama capped exec pay at $500,000 for TARP firms. Senators Bernie Sanders and Claire McCaskill passed their amendment which set maximum compensation at $400,000. The TARP Congressional Oversight board -- led by Elizabeth Warren -- said that the Treasury overpaid by $78 billion for the assets it received in exchange for $254 billion in bailout money. Warren testified that then-Secretary Paulson had said that the assets received were about equal to the monies given to the banks. Not so. "The Treasury paid substantially more for the assets… than their then-current market value," Warren said.
Obama signed the SCHIP bill to insure a total of 11 million kids. Congressman Raúl Grijalva, co-chair of the Congressional Progressive Caucus (CPC), told me: "This bill represents a major step forward by providing coverage to 4.1 million children who are currently uninsured. [But] the United States is the only developed nation in the world that does not provide basic health care for all children, and there are 4.5 million kids who are still uninsured. The CPC will renew our push to cover all uninsured children."
Confirmation hearings: Holder is in… Daschle a debacle…. and Hilda Solis is on hold.
Looking for extra billions? The non-partisan Commission on Wartime Contracting held its first hearing and Senator Jim Webb testified that he would get it subpoena power if needed. The Commission's broad mandate includes identifying "waste, fraud and abuse, and ensuring accountability for those responsible."
Under the radar: Congressman Frank announced that he and the CPC will host a half-day forum on Reasonable Defense Spending on February 24. Stay tuned for details…. And CPC vice chair, Congresswoman Mazie Hirono, co-sponsored legislation to establish a process for the formation of a Native Hawaiian government that could negotiate with the state and federal government on behalf of Hawaii's indigenous people.
Joe Klein's got a wise post about the messiness surrounding the stimulus bill, most of which is par for the course for legislation of this size. I've got many beefs with the legislation, not the least of which is the criminal under-funding of public transit. Oh, and also this braindead, Reinflate The Housing Bubble amendment that passed the senate by the voice vote. But if I were a member of Congress I'd vote for the bill, proudly. Fundamentally, we're teetering on the brink of a deflationary spiral, and without a serious and large commitment of federal dollars we're going to a) have a lot of people needlessly suffer b) be mired in a prolonged recession.
I think part of what's gotten lost in the carping from Republicans is that the bill has three objectives:
1) Immediately boost demand and create jobs
2) Make investments that will increase the productive capacity of theUS economy in the long-run
3) Lessen the misery of those caught in the black hole ofunemployment, declining incomes, bankruptcy, etc...
Any amount of money the government spends is going to be stimulus. There's a huge range to how stimulative that spending will be. But here's the problem! We need a massive amount of spending to close the output gap and there's not enough places to spend that money in the "top tier" of effectiveness, vis a vis the multiplier. So we have a range of items, that vary in just how stimulative they are. There's also a tension between short-term stimulus and long-term investment. It might be super stimulative to enact Keynes famous thought experiment with the bank notes in the buried bottles, but obviously that's not a a very good long-term investment. It might take longer and create fewer jobs at the margin to build out broadband, but when it's done you have internet in rural areas as opposed to a whole lot of improvised bottle-mines dotting the countryside.
As a percentage of the total, almost everything in the bill fits one of those criteria. The stuff that the right-wing Republicans have zeroed in on tend to be stuff in either the second or third category. But remember these are people that fundamentally don't believe in the social safety net. As Josh Marshall points out 36 of 41 senator voted yesterday to strip all spending from the bill. That's policy malpractice. And there's no reason to think that people that cast a vote like that have much productive to offer in negotiating the final shape of the legislation.
That's more or less what the usually understated Yves Smith says today about the preview of the Obama TARP plan, "Team Obama is taking the cowardly approach of distributing the costs among the most disenfranchised group in the process, namely the taxpayer, when there far more obvious and logical groups to take the hits."
It's not just Smith. I got an email from a good friend at a hedge fund last week. He's a *very* moderate guy, and he had this to say:
The one thing that I disagree on is that for all the talk of making Tarp II diff from Tarp I, I don't really see it happening. An aggregator bank still just takes bad assets from a bank in exchange for capital. If you pay market, the banks will be insolvent, so they won't participate. If you pay above market, you're basically just injecting capital in to the banks, which is what they did in Tarp I. Why are they scared of nationalizing? Citi is an insolvent bank - wipe the equity, take the company, remove the bad assets, put the remaining good company back in to the public markets, repeat for the next insolvent bank. If they try to let a Citi (or maybe evan a BofA) earn their way out of this we will end up with huge parts of the banking system in zombie mode, a la Japan. That would be very bad and will only prolong the pain.
This is the where the rubber of necessity hits the road of The New Politics. In order to save the American economy, it's increasingly clear we need to kill off some banks. In words of one former Wall Streeter, play "good bank, bad bank." But playing "bad bank" means taking on Wall Street's power in a concerted way. This is not a question of technical merits of policy, it's a matter of taking on entrenched power. Unless the Obama WH can find it within itself to do it, we may all be very, very screwed.
My intern Laura Dean makes a disturbing catch:
Judd Gregg's been hailed as a "fresh independent voice," who will make it more difficult for the GOP to dig in their heels to block legislation now that they have one of their own on the inside. But for a man who seems like a moderate in some respects, one wonders why in 2005, when 89 members of the Senate signed an apology for not passing an anti-lynching law-- an apology with no policy implications at that-- he and then fellow New Hampshire Senator John Sununu, refused to sign. At the time people speculated that with no African-American constituency to speak of, there was no particular incentive (aside from the glaring moral one!), to do so. His fellow dissenters, not surprisingly mostly Southern Republicans, are listed on the DailyKos wall of shame. Sometimes 'sorry' is the hardest word to say, but in this case, it should have been his easiest.
Um, what's up with that?
From Greg Kaufmann:
The Senate takes up the Recovery bill this week. It passed with no Republican support in the House but will need a couple Senators to cross the Grand Obstructionist Party line in order to overcome a possible filibuster.
The Senate will also confirm Eric Holder as Attorney General. In contrast, Tom Daschle faces an uncertain future as the Senate Finance Committee holds a closed-door meeting today on his now delayed confirmation hearings. On Thursday the Senate Intelligence Committee holds a hearing for CIA Director nominee, Leon Panetta -- could be a tough one but Panetta will likely be confirmed.
Tomorrow Senator Barbara Boxer will outline her legislation for a cap and trade system for CO2 emissions -- one of three key steps Al Gore has outlined as immediately necessary to begin turning climate change around.
The House will vote on the Senate version of the SCHIP bill to insure 11 million kids (an increase of 4 million from current enrollment).
On Wednesday Chairman Barney Frank's Financial Services Committee will take up his bill "to promote bank liquidity and lending through deposit insurance, the HOPE for Homeowners Program, and other enhancements" (that's seriously the title). The Hope program has fallen a tad shy of the 300,000 homeowners it was supposed to help, instead assisting "a few hundred," according to CongressDaily.
On Thursday House Democrats take their annual three-day retreat to Williamsburg. Strange time for a short workweek.
Some cool and important hearings this week…. Today the Commission on Wartime Contracting in Iraq and Afghanistan -- inspired by the Truman Commission -- holds its first hearing on improving wartime contracting. The Commission is also charged with identifying fraud and holding those responsible accountable.
Tomorrow the Senate Banking Committee holds a hearing on "modernizing the US financial regulatory system." (The Financial Services Roundtable has unveiled its plan for "streamlining" oversight of banks. We need to make sure those lobbyists don't win out.) And on Thursday they will hold a hearing on TARP oversight -- hopefully someone will push Sen. Bernie Sander's idea of expanding the Oversight Panel's charge to include an investigation into why this financial crisis occurred in the first place.
Finally, Progressive Caucus member and Tennessee Congressman Steve Cohen will chair the House Commercial and Administrative Law Subcommittee hearing on "Midnight Rulemaking: Shedding Some Light" -- crucial as we continue to undue the Bush legacy.
From correspondent Greg Kaufmann a look back at last week on the Hill:
Here are the big items this week: the Lilly Ledbetter Fair Pay Act that reverses the terrible anti-equal pay decision by the Supreme Court became the first bill President Obama signed into law. Just 5 Republican Senators supported it and 3 House Republicans.
The House also passed its version of the Recovery (stimulus) bill with ZERO Republican support. Former Vice President Gore warned that the "outstanding" green provisions in the House bill were muscled out in the Senate Finance Committee version, so we'll have to stay tuned on that front.
The Senate passed its Children's Health Insurance Program (CHIP) bill expanding health care to cover 11 million children. It targets kids in families earning too much to qualify for Medicaid but who can't afford private insurance. The House had already approved its version and the President is expected to sign the final bill soon. (Again, Republicans haven't seemed to have gotten the memo about the new "post-partisan" era. Only 9 Republican Senators supported it.) Congressional Progressive Caucus members will continue to push for an additional $15 billion to cover the remaining 4-5 million kids who still will not be covered.
One thing about CHIP you probably don't know is that Senator Ben Cardin succeeded in a fight he's taken on since the death of a twelve year old from a brain infection caused by a tooth abscess a couple years ago. Yesterday Cardin got the guaranteed dental benefit he's been working for. (Katrina vanden Heuvel has also written about this issue here and here.)
The House Judiciary Committee approved legislation to give bankruptcy judges the power to modify mortgages. Chairman John Conyers included provisions Citigroup had agreed to, but he refused to limit the measure to subprime mortgages like the Republicans and their surviving base -- the banking industry -- wanted.
In the confirmation hearings arena, Tim Geithner was confirmed. Eric Holder made it out of committee and will soon be confirmed. But, of course the nominee progressives are perhaps most excited about -- Congresswoman Hilda Solis for Labor Secretary -- is being held up by an anonymous Republican hold.
Under the radar… Senator Byron Dorgan, who chaired a hearing this summer examining the deaths of Staff Sgt. Ryan Maseth and 12 other US soldiers electrocuted on Army bases in Iraq, asked Defense Secretary Gates to meet with him, Senator Bob Casey and Maseth's mother to discuss the process the DoD intends to follow to guarantee accountability for any contractor misconduct. KBR faces possible negligent homicide charges.
Finally, Senator Bernie Sanders wrote a letter to Majority Leader Harry Reid demanding an investigation into the fiscal crisis -- how it started, who is responsible, and how to make sure it never happens again. Sanders wants the TARP Oversight Panel that oversees how monies are spent to expand its charge and have subpoena power.
Check here on Monday for news about the week ahead in Congress.
This, from Barry Ritholtz about Timothy Geithner's performance so far is pretty on the money:
I've noticed something I find a bit disturbing about our new Treasury Secretary: He has not yet fully come to terms with his new job, role -- and boss. Granted, he's been in the job for only two days. But given the extraordinary circumstances the financial sector and the economy is in, it is important for the Treasury Secretary to get up to speed as soon as possible.
Consider this statement from Geithner, who said that Treasury is considering a "range of options" for its financial rescue plan, with the goal of preserving the private banking system. "We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."
No! Defending these idiots was your old gig. In the new job, you no longer work for the cretins responsible for bringing down the global economy. Please stop rationalizing their behavior, and preserving the status quo!
Quite so. Here's my initial impression of the unequal distribution of "change" across the government. Basically everywhere but Treasury and Defense, we're seeing lots of change. Genuine progressives doing genuinely progressive things. At Treasury and Defense, well, jury's out.
From correspondent Greg Kaufmann, a dispatch from Al Gore's testimony on the hill:
Al Gore was back on the hill today, telling the Senate Committee on Foreign Relations what Congress needs to do to turnaround the global warming crisis and prepare for the Copenhagen Climate Conference in December.
The hearing was way long -- like three hours way long.
I kept wondering if Al wonders how many times he will have to give this talk before Congress does what everyone knows it needs to do.
One sign that maybe we're not as far along toward a sane climate policy as we'd like to think we are occurred when -- during Gore's testimony -- a Republican aide passed out a press release entitled "Updated US Senate Minority Report: Over 650 International Scientists Dispute Man-Made Global Warming Claims. Updated Senate Report Further Debunks ‘Consensus'".
But for the non-brain dead among us Gore had a clear message: 1) pass the green provisions of Obama's recovery plan (he called them "unprecedented and critical investments in… energy efficiency, renewables, a unified national energy grid and the move to clean cars"); 2) pass a cap and trade system this year -- as many states have already done; and 3) sign and ratify a treaty in Copenhagen that addresses -- among other things -- deforestation (responsible for 20% of emissions that cause global warming), binding commitments for reducing CO2 emissions, aid to developing countries to help them adapt to the worst impacts of the climate crisis, and a verification regime.
After praising the President's Recovery proposal and the House version of it (H.R.1) as "outstanding," he proceeded to call out the Senate version: "I'm very concerned that the [Senate Finance] Committee version would result in a complete screeching halt to any construction of solar facilities or wind facilities on a significant scale anywhere in the United States." Gore also said the Senate version "has a serious problem compared to the House bill" in not giving the utilities the right incentives for efficiency, conservation, and renewables as opposed to just selling more dirty energy.
Chris wrote recently about finding "choke points… in DC that thwart needed reform." I think Mr. Gore did us a favor by giving us the heads up on one today.
Since the White House made it official today, I wanted to note as a matter of full disclosure that my wife Kate Shaw is now an attorney in the Office of the White House Counsel. Obviously, my views are entirely my own, and throughout a long campaign in which I had very dear family members involved with the Obama organization, I'd like to think I maintained a critical distance. I intend to do so in covering the administration.