Author: David Dayen

A high-level exchange of letters Monday night in snowy Washington, as the House Republican leadership essentially paves the way for blowing off President Obama’s proposed health care summit by asking for a list of demands, and the White House responds by basically rejecting them.

First, the Republican letter, from Minority Leader John Boehner and Minority Whip Eric Cantor, asking 10 questions about the proposed talks, few of which were actual questions rather than requests. “Will (the President) agree to start over” on a new bill is one, and another asks if reconciliation, the process allowing the Senate to pass budget-related items with only 50 votes, is off the table. Other requests are familiar – wanting whatever legislative proposal on display at the summit to be up on the Web for 72 hours, for example. But most of them are intended to outflank the Democrats by bringing up some of the faults of the bill’s process to this point. For example:

Will the President include in this discussion congressional Democrats who have opposed the House and Senate health care bills? This bipartisan discussion should reflect the bipartisan opposition to both the House bill and the kickbacks and sweetheart deals in the Senate bill […]

Finally, as you know, this is the first televised White House health care meeting involving the President since last March. Many health care meetings of the closed-door variety have been held at the White House since then, including one last month where a sweetheart deal was worked out with union leaders. Will the special interest groups that the Obama Administration has cut deals with be included in this televised discussion?

Of course, Americans have been dismayed by the fact that the President has broken his own pledge to hold televised health care talks. We can only hope this televised discussion is the beginning, not the end, of attempting to correct that mistake. Will the President require that any and all future health care discussions, including those held on Capitol Hill, meet this common-sense standard of openness and transparency?

“Your answers to these critical questions will help determine whether this will be a truly open, bipartisan discussion or merely an intramural exercise before Democrats attempt to jam through a job-killing health care bill that the American people can’t afford and don’t support,” the letter concludes. Clearly, there’s a lot of positioning here, preparing the ground for inevitably having to cancel out of the summit.

How did Robert Gibbs, White House Press Secretary, respond? Thusly.

The President is adamant that we seize this historic moment to pass meaningful health insurance reform legislation. He began this process by inviting Republican and Democratic leaders to the White House on March 5 of last year, and he’s continued to work with both parties in crafting the best possible bill. He’s been very clear about his support for the House and Senate bills because of what they achieve for the American people: putting a stop to insurance company abuses, extending coverage to millions of hardworking Americans, getting control of rising premiums and out-of-pocket costs, and reducing the deficit.

The President looks forward to reviewing Republican proposals that meet the goals he laid out at the beginning of this process, and as recently as the State of the Union Address. He’s open to including any good ideas that stand up to objective scrutiny. What he will not do, however, is walk away from reform and the millions of American families and small business counting on it. The recent news that a major insurer plans to raise premiums for some customers by as much as 39 percent is a stark reminder of the consequences of doing nothing.

It doesn’t answer a whole lot, but states pretty firmly that the bills which passed the House and Senate would be the base for discussion, and they would not be scrapped. I fully expect Republicans to sorrowfully say that they can no longer participate in such a sham of an exercise.

This will doubtlessly make David Broder weep real tears. But the summit was more of an exercise than anything else, and now the real exercise will be the spin war over which side backed out or which side proved their point. Republicans don’t want a bill at all and don’t want to help Democrats get to one, and Democrats just wanted to add a patina of transparency and bipartisanship onto the process to soothe jittery members of their caucus. Doesn’t look like this summit will provide that.

 

This weekend, Anthem Blue Cross in California announced that their rates would go up as high as 39% in the next year. Up until a few months ago, when I got on my wife’s health insurance, this was my carrier. Health and Human Services Secretary Kathleen Sebelius wants answers, but in a general sense there’s not a lot she can do. Costs are rising at a rate where insurance companies feel the need to jack up their policy premiums to maintain their profits. And without any check on that, such rate hikes will continue.

So will this:

Insurers, drugmakers and hospitals will likely slash costs and merge companies to maneuver through a U.S. health-care landscape marked by rising medical expenses and the loss of millions of potential paying customers.

With Congress’ sweeping overhaul of the health system stalled, industry will seek its own answers to a push by government and the private sector to rein in costs, said Curtis Lane, senior managing director at MTS Health Partners, a New York-based equity fund. An aging U.S. population will spur demand for services and, at the same time, boost pressure to control spending, he said.

One solution will be increased consolidation, with companies led by WellPoint Inc., the biggest U.S. insurer by enrollment, and Community Health Systems Inc., the largest publicly traded hospital chain, scooping up rivals unable to “spread rising costs across fewer customers,” said Paul Keckley, of the Deloitte Center for Health Solutions.

Increasingly, out-of-work and older Americans are becoming eligible for public programs, reducing the profit pool for private insurers. They can only survive through market consolidation and continued subsidies like Medicare Advantage. Ironically, this consolidation will probably lead to major cost-cutting and putting thousands more out of work, making them unable to be eligible for employer health care, too.

You can argue about the health care landscape if we instituted this reform or that reform. There’s no argument about how dangerous and cruel the landscape will be under the status quo.

 

Chris Cillizza thinks the White House is making the filibuster a campaign issue. He’s a horse-race reporter, so everything’s a campaign issue to him. When all you have is a hammer, everything’s a nail, etc.

But the filibuster is not a campaign issue. It’s a governance issue. If you have 59 votes in the Senate and an artificial construct that demands 60, and a minority party committed to lockstep obstructionism over anything else, you have a governance problem. To be sure, Democrats have other levers at their disposal to get their agenda passed, and there are two most frequently cited – 1) using reconciliation for budgetary items, which cannot be filibustered – and which is basically the plan for passing a health care bill; and 2) highlighting and essentially shaming Republicans over their willingness to obstruct, the “make them filibuster” approach which starts with a coordinated information campaign of the kind we’re starting to see. Both of these are means to a governance end, not a campaign end.

Cillizza cites as proof that this is only campaign talk the article from his own paper stating that Harry Reid hasn’t scheduled a vote on the issue. But Tom Udall’s is calling for a rules change at the beginning of the next Congress, which he believes he can get with 50 votes. That cannot happen until January 2011, so there cannot possibly be a vote before then. In the meantime, you would need 67 votes for a rule change, and if that were possible, we wouldn’t be talking about a 60-vote filibuster. As for the nuclear option, that’s not a vote that you schedule, but a Parliamentary ruling that the chair makes and upholds by majority vote.

The bottom line is that Senate rules are a governance issue, one that is sending the country into decline.

A brief history lesson: In the 17th and 18th centuries, the Polish legislature, the Sejm, operated on the unanimity principle: any member could nullify legislation by shouting “I do not allow!” This made the nation largely ungovernable, and neighboring regimes began hacking off pieces of its territory. By 1795 Poland had disappeared, not to re-emerge for more than a century.

Today, the U.S. Senate seems determined to make the Sejm look good by comparison […]

The truth is that given the state of American politics, the way the Senate works is no longer consistent with a functioning government. Senators themselves should recognize this fact and push through changes in those rules, including eliminating or at least limiting the filibuster. This is something they could and should do, by majority vote, on the first day of the next Senate session.

People don’t have a sense of process rules, and it would be a silly thing on which to hinge a political campaign. People are interested in results, and Senate rules are impeding those results.

 

MSNBC is reporting that 19-term Congressman John Murtha (D-PA 12) has passed away. He was 77.

His condition was thought to be grave after complications following gall bladder surgery. He was expected to be in the hospital for several months.

Murtha was a chair of the Defense Appropriations Subcommittee and ran for House Majority Leader in 2006. He was an early voice against the Iraq war in 2005, before many members of Congress were willing to do so.

A special election is expected in Murtha’s district, which includes Johnstown, within a few months. But for the time being, this reduces the Democratic majority in the House by 1, and further complicates efforts to find 218 votes for a health care bill. Murtha voted for the bill in November.

 

Paul Begala thinks he’s found a nut:

Begala, in an interview today with TPM, said Democrats should force the GOP to bring their ideas into the public eye.

“Why don’t we put Mr. Ryan’s budget up to a vote?” he said. “Make them vote on it.”

Democrats, he argued, should stop calling Republicans the “party of no.”

“They have ideas, and lots of them. And their ideas ruin the country,” Begala said.

There’s a serious problem with the 24-hour news cycle – even the most plugged-in operatives forget the past. The House put Mr. Ryan’s budget up to a vote LAST YEAR. They did make the GOP vote on it. In fact, the vote split their caucus:

Before passing the Democratic budget proposal, the House rejected an alternative proposal put forward by the GOP leadership, which called for $4.8 trillion less in overall spending over the next decade, in part through a five-year freeze in most non-defense discretionary spending.

Among other things, the House GOP’s version of the budget would have repealed the entire $787 billion economic stimulus package except for an extension of unemployment insurance benefits. It also would have rolled back a recently passed 8 percent spending boost in the budget for the remainder of the current fiscal year.

Thirty-eight Republicans voted against their own leadership’s bill in that vote, while two Democrats voted in favor of it. The final vote was 293-137 against the GOP proposal.

And that budget had almost exactly the same Medicare voucher program which would privatize the entire system and offer too-small vouchers to seniors to purchase health insurance. Note the part of the sentence in this post with the line “It didn’t generate a lot of attention.”

But that’s not for lack of trying. In fact, Democrats ran ads about it back in September, with the simple message: “Republicans want to end Medicare.”

Of course Democrats should force a vote on the Republican budget. They’d be arrested for political malpractice if they didn’t. But let’s not pretend it’s some wildly new idea. Democrats forced the same vote last year. It didn’t have much of an effect, especially considering it didn’t register with a party hack like Paul Begala. You have to actually coordinate your message and use your various messaging outlets to make something like this stick. And those barely exist on the Democratic side, certainly not to the extent of the tightly focused Republican noise machine.

 

Speaking at an OFA “Conversation with the President,” Barack Obama called for health care reform, telling the personal story of a former campaign staffer and OFA volunteer who recently lost a battle with cancer as an impetus to get the package done. However, he described the process for finishing the bill for the first time, which included a “methodical,” deliberate process that would involve Republicans and take “several weeks.”

Obama took a fair bit of time to make his pitch to a room full of OFA volunteers and thousands more watching over the Internet. His pitch was similar to what he’s made throughout the past couple weeks: that the bill is closer than health care reform has ever been and it must get over the line, and that Democrats cannot shrink from the challenge. But he added something new to this stump speech. He talked about someone who worked on the campaign from the St. Louis area, who recently succumbed to breast cancer. “She insisted she was going to be buried in an Obama t-shirt,” Obama said. And he continued,

She was fighting throughout the campaign. And it wasn’t to get me elected, or to help her with her situation. It was because she understood there were others behind her who were going to be in the same situation. How can I say to her, we’re giving up How can I say to her family, we’re giving up? How can Democrats on the Hill say this is politically too risky? How can Republicans say we’re better off blocking anything from happening? That can’t be the message the American people are delivering. Yes, they want jobs. And they don’t like the process in Washington, the sausage-making. But they don’t want us to offer them nothing. This is what we campaigned on. And we’re going to keep on working to get it done.

Supporters at the rally spontaneously broke out into a chant of “Yes we can” after that. Obama closed his remarks by saying “I’m still fired up, I’m still ready to go.”

This was all reminiscent of the campaign. But when he was asked how OFA members could specifically help him deliver on health care, he described a drawn-out process that would be slotted in after the passage of multiple jobs bills. This is a rough paraphrase:

Democrats in the House and Senate have worked the last several weeks to finalize a package. We know some of what it will have: 30 million more with coverage, creating an exchange to negotiate with insurers, insurance reforms that benefit everybody (blocking pre-existing conditions, rescissions, etc), and long-term cost reductions in the health care system.

The next step is to call on Republicans to present their ideas. I’d like to have a meeting with Republicans and Democrats and health care experts, go through these bills, walk through them in a methodical way so Americans can compare ideas.

Then we’ve gotta move forward on a vote.

So we should be very deliberate, take our time. We’re moving a jobs package forward over the next several weeks. That will allow everybody to get the real facts.

The idea of some meeting with Democrats and Republicans is new, and it’s part of this “new openness” that we’ve seen on display recently. Democrats and Republicans do meet, ostensibly to discuss ideas, in a televised format, every day. It’s called “the United States Congress.” There’s no reason such a debate couldn’t be done again. But the emphasis here is on a several week-long “cooling off period,” in the hopes that a more methodical or deliberative debate will somehow work out better.

I think that’s a mistake, but I also think it’s a bit of a cover story. Obama acknowledged that “it’s easy to scare people” about health care, because people have a natural fear of the unknown. There’s no reason to believe that wouldn’t change. This reliance on reason hasn’t worked to this point.

What I mean by a cover story is that Obama is basically, with this new offensive, trying to raise his approval ratings, and residually raise the approval ratings of his party. He wants to at least appear to be opening up the process, counteracting the process issues that really sunk health care’s popularity in December. And the hope is that would allow for enough space to get reform over the line. That’s a process of “several weeks,” and that might as well read months.

Among the more interesting moments came at the end of the question, where the President implicitly threatened the job security of the Congress if they don’t pass something on health care.

If Congress decides not to do it, the American people can make a judgment whether Congress did the right thing or not. There are elections coming up, and people can register their concerns during election time.

He didn’t specify Republicans or Democrats, but the statement could be applied equally to either party, and probably more to his own. If they get handed the largest majority in a generation and do almost nothing with it, and spend a year on their signature priority and get nothing out of it, what Obama said above will come true – they won’t be asked back to try again.

 

Here’s a nice Friday news dump. Tim Geithner just announced support for a full cancellation of Haiti’s debt, and the IMF will join him:

WASHINGTON – The U.S. Department of the Treasury today announced the United States will work with its partners around the world to relieve all debts owed by Haiti to international institutions and to ensure grant financing to support Haiti’s reconstruction and recovery from the devastating earthquake in January.

“The earthquake in Haiti was a catastrophic setback to the Haitian people who are now facing tremendous emergency humanitarian and reconstruction needs, and meeting Haiti’s financing needs will require a massive multilateral effort,” said Treasury Secretary Tim Geithner. “Today, we are voicing our support for what Haiti needs and deserves – comprehensive multilateral debt relief.”

Secretary Geithner also welcomed International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn’s call to provide full relief for Haiti’s outstanding IMF debt, including the $102 million emergency loan approved on January 27, 2010.

In addition, Geithner stressed that future aid to the ravaged island nation should come in the form of grants and not loans, to reduce the burden on a suffering people.

Haiti actually owes no debt to the United States, after a September 2009 agreement on debt relief. Their total outstanding debt to other international institutions equals around $1.3 billion, a paltry sum for the world but an impossible sum for Haiti after the earthquake. Haiti’s debt troubles go all the way back to French colonization, and the 150M in francs it demanded after Haiti secured independence. No other country required former slaves to pay such a debt for their freedom.

The ONE campaign gathered over 200,000 signatures in their effort to convince the Treasury Secretary to call for debt cancellation.

This also represents another policy victory with respect to Haiti for Sen. Kirsten Gillibrand, who urged Geithner to support debt relief on Jan. 22. I’m sure Harold Ford would have joined her in that request, but if his knowledge of world geography is anything like his knowledge of the geography of New York City, he may not know where Haiti is.

 

Yesterday, New York Attorney General Andrew Cuomo filed a lawsuit against Bank of America, its former Chairman Ken Lewis and CFO Joseph L. Price on civil fraud charges, alleging that they hid information from shareholders about large losses at the investment firm Merrill Lynch, which BofA picked up in a merger, and that they lied to the federal government in order to secure a bailout to cover the losses. If you get a moment, read the summary to the lawsuit. It really does show Bank of America as, in the words of the summary, “a classic example of how the modus operandi of our nation’s largest financial institutions led to the near collapse of our financial system.”

The story is pretty simple: BofA bought Merrill Lynch and never told shareholders about the financial sickness at the heart of the firm. Then, after the purchase, BofA essentially played a game of chicken with the Feds, threatening to back out unless they got a sweetheart deal, even though there was no such clause in the merger agreement that would account for an opt-out. Here’s just a taste of how the world works when you’re a successful American bank:

Thus, Bank management sought taxpayer aid on the basis of actual losses only $1.4 billion more than losses they had deemed unnecessary to disclose to their shareholders, at a time when the shareholders were deciding whether to buy the company generating those losses. The undisclosed losses were enough to ruin the combined entity, as management demonstrated by going to the government for a taxpayer bailout, and would have done so without that bailout.

Having failed in their disclosure obligations, the Bank’s management went on to misrepresent its position to the federal government in negotiations for taxpayer aid. Bank management pretended to the government that it believed it had a viable MAC (merger agreement clause) claim and that it would seek to exit the merger, or that it would try to renegotiate the purchase price.

After the fact, in testimony before this Office and elsewhere, Lewis claimed that this position only changed after the government instructed the Bank not to invoke the MAC clause or renegotiate, but instead to take taxpayer aid in return for completing the merger. Lewis claimed, in effect, that he had been strong-armed by the government.

This account is belied by the facts uncovered by this Office. Contrary to Lewis’ after-the-fact account, the evidence shows that the Bank never intended either to renegotiate or to terminate the merger using the MAC clause. In fact, the Bank’s management knew almost immediately upon conferring with its outside lawyers that renegotiation was impossible, because it meant going back to the shareholders, and public knowledge of the endangered deal would likely destroy Merrill. Likewise, the Bank was informed by its outside lawyers that invoking the MAC clause would likely prove a futile exercise that could destroy the Bank […]

The Bank’s plan worked, and it received the taxpayer aid, in an amount exceeding $20 billion, on top of $10 billion already committed prior to the December negotiations, for a total of approximately $30 billion in aid. As a result, the merger closed as planned on January 1.

(Bank of) America, fuck yeah!

Lewis’ lawyers, in particular, are calling the lawsuit misguided, but the AG spells out a pretty solid case. Just because Cuomo is going after something that was probably standard practice doesn’t mean it was legal. Lewis’ case amounts to “my lawyers told me not to disclose to shareholders,” hardly a defense. But Lewis clearly doesn’t feel like going down alone.

In defending former Bank of America CEO Ken Lewis against charges that he misled investors, his lawyers will call as witnesses former Treasury Secretary Hank Paulson and the current Federal Reserve Chairman Ben Bernanke, according to people close to the matter. The defense team, led by former U.S. Attorney Mary Jo White, hopes to get Paulson and Bernanke to reveal that Lewis did not mislead the government about BofA’s deteriorating financial condition in the aftermath of its Merrill Lynch deal. Those losses prompted a massive government bailout.

White’s first order of business is to get the civil case dismissed, according to several sources. But if she’s unsuccessful, she plans a vigorous defense, including calling high-level government officials to testify. “If this thing goes to trial you can expect both Paulson and Bernanke to be on the witness list,” said one person close to the defense team, “and right now Lewis doesn’t want to settle.”

Now that could be worth watching. Bernanke and Paulson would specifically be called to testify, presumably, about whether or not Lewis was lying to them about backing out of the Merrill deal in order to secure a bailout. That’s a crevice, actually, that the AG could use to explore a whole host of crimes on Wall Street.

Stay tuned.

 

A confounding jobs report today shows that employers dropped 20,000 more Americans from the payroll in January, but the unemployment rate nevertheless decreased from 10% to 9.7%. This is about the worst way a jobless rate can decrease: by people leaving the job market en masse. The key stat:

In January, the number of persons unemployed due to job loss decreased by 378,000 to 9.3 million. Nearly all of this decline occurred among permanent job losers.

This basically means that a large chunk of people looking for work “left the work force.” It doesn’t mean they all discovered gold or won the lottery, but they simply stopped actively looking for a job and/or saw their unemployment insurance run out. They’re still hurting, they still have no income. They just aren’t “counted” anymore.

The employment numbers for November and December changed as well, revealing a rgood November and a really bad December:

The change in total nonfarm payroll employment for November was revised from 4,000 to 64,000, and the change for December was revised from -85,000 to -150,000. Monthly revisions result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.

The “annual benchmark” is a reassessment of the entire year, which revealed around 930,000 more people out of work than previously thought. Other than November, every month was revised downward, with numbers much worse than before.

The report shows continuing pain in the job market, regardless of the baseline jobless rate.

…If there can be said to be good news in the report, it’s that “involuntary part-time workers,” folks who were getting part-time hours for economic reasons, dropped sharply. So employers have been converting part-timers to full-timers rather than hiring new workers. This is good for those part-time employees, and also good that more hours are being worked and the employed generally have more money, but it does little for the unemployed. In fact, with productivity up strong (in other words, businesses are getting more out of less workers by increasing their workload), job growth is simply unlikely in the near term.

 

While all the hoopla over Richard Shelby’s hostage situation is a little overhyped — if not him, some other Republican would have held each and every one of these nominees — it does amount to what you would call a “teachable moment” about the dysfunctional Senate. Anyone who thinks that the fillibuster is merely a protection of minority rights need only look at the Shelby blanket hold. It is the manifestation of a Parliamentary era of ideological rigidity combined with a supermajority process of veto points, along with a political system that rewards the minority for frustrating a majority. It’s a formula for American decline, to put it as simply as possible. We are all Colorado Springs now.

You’re finally starting to see the White House dip their toe in the water on the question of whether to fix the broken Senate. Vice President Biden, himself a creature of the Senate for 36 years, is willing to discuss reform.

Washington (CNN) – Moments after swearing in Sen. Scott Brown, R-Massachusetts, whose presence in the Senate means Democrats no longer have their 60-vote filibuster-proof supermajority, Vice President Joe Biden told reporters he thinks filibusters have been abused in recent years and that the Senate should consider reforms.

“It’s a useful tool, it is legitimate. But from my perspective, having served here, elected to the Senate seven times, I’ve never seen a time when it’s become standard operating procedure,” Biden said. “You want to get anything done, you have to have a supermajority.

Biden noted that filibusters are not called for in the Constitution and the threshold was changed once before – from 67 votes to 60 votes – when it was “recognized as increasingly difficult” to get bills passed […]

“Any President in the future, having to move through anything he or she wants, requiring a supermajority, it’s not a good way to do business,” he said.

Robert Gibbs yesterday started talking about up or down votes for political appointees. And the White House blog posted a case study of Martha Johnson, the new head of the GSA, who was confirmed by a 96-0 count, nine months after she was nominated for the position.

This isn’t just a problem for nominees; it’s become a problem for legislating, too. Historically, the filibuster has been used as a way to try and reach a bipartisan compromise; now it’s just a tactic used to gum up the works. The Senate has had to cast more votes to break filibusters last year than in the entire 1950s and ’60s combined. This has prevented an honest debate from taking place, which has made it impossible to find agreement on important legislation that would benefit working families in this country.

I understand the desire to cast this as radical and new and different, and to an extent it is. But the supermajority filibuster, in the case of political nominees, serves basically no function. The President is entitled to his own staff, and I think you’d get 90% support for that proposition if posed to the country.

Indeed, the problem is the US Senate itself. Sherrod Brown talks about in the above clip following Tom Udall’s lead on changing the Senate rules at the beginning of the next Congress, and taking a year-long effort to educate members and the public about the dysfunctional rules. For some that’s too long to wait. Rep. Jerrold Nadler (D-NY) told me on Monday that the Senate should simply enact what was called “the nuclear option” to set a precedent for majority-rule votes (explanation here). “The Senate is paralyzed, it can’t do anything, and that helps conservatives, who by and large don’t want to do anything, more than liberals,” Nadler said. “We could change it if we use the nuclear option, but Democrats won’t because they’re unwilling to use such drastic measures.”

Nadler is not the only member of the House frustrated with the pace of the US Senate.

Politicking in the upper chamber is squarely to blame, as it has obstructed the chamber from progressing on the healthcare front, adopting a green energy bill, passing a jobs bill, introducing a financial regulatory reform package or finishing a student loan bill, Rep. John Larson (D-Conn.), told MSNBC’s Dylan Ratigan.

Ultimately, the Senate’s legislative pace has not only frustrated Democrats in the House, who have passed all of those bills, but the American voters who sent them there to finish the job, Larson added.

“Theres a host of things that we’ve passed already, and there needs to be action in the Senate, and people are tired of it,” Larson said, noting he was “glad the president cited the House” for making more progress than the Senate in last week’s State of the Union address.

“The issue here is, whether it’s Democrat or whether it’s Republican, is [voters] want to see action,” the chairman added.

Americans have a hazy understanding of Senate procedure, which means a) they aren’t blaming Republicans for obstruction right now, and b) they wouldn’t blame Democrats in the future if they made it easier to govern.

So what is there to do while we wait for Sen. Udall to make his point of order next January? Democrats could “make them filibuster,” but that’s OK in theory and terrible in practice. Also this will apparently happen should we go to reconciliation, with a vote-o-rama of endless amendments (at least for a time), so there will be a case study. There’s the idea that the filibuster can force bipartisan cooperation, and Obama just needs to try harder. He’s bent over backwards so far, I don’t know what more he could do. And if anyone’s come up with a worse way to counteract this than Walter Mondale, I’d like to see it:

So here’s what Mondale thinks should happen. Democrats assert the constitutional principle that the Senate, by majority vote, has the power to make its own rules, at least at the beginning of a new session. A friendly presiding officer (in the current situation, presumably Joe Biden) rules in favor, based on the argument that the U.S. Constitution outranks the Senate rulebook. The chair’s ruling can be appealed, but a vote on a motion to table that objection cannot be filibustered and the chair’s ruling can be upheld by a simple majority vote. This would push put the same majority in a position, at the beginning of the next session, to push through a new filibuster rule, or to ban filibusters entirely. (Mondale does not favor the latter, by the way).

Faced with that clear threat, Mondale believes, relative moderates from both parties would quickly work out a backroom compromise that would change, but not abolish, the filibuster rule.

But that’s simply an unrealistic reading of the relative dynamic among the political parties. If individual Republicans succeed through obstruction, if the party as a whole succeeds through obstruction, what possible reason is there for them not to do so?

“In our system, if the minority party can create and enforce party discipline (which has never really been done before, but which the GOP has now accomplished), then OF COURSE there can be no ‘bipartisanship’ on major legislative matters, in the sense of (1) the minority adding provisions to legislation as the majority compromises with them, and (2) at least some minority party members then voting with the majority.

“In a parliamentary system, the minority party is not involved in helping write or voting for major legislation either. If you think about it, and as that exchange I quoted shows, that sort of ‘bipartisanship’ really can’t happen in a parliamentary system on issues where the minority party has the power to tell its members to boycott the majority’s major bills on final passage.

Party discipline has trumped bipartisanship. Sure, people still talk about working together, but they are constrained by the Iron Law of Institutions, which we’ve seen here in 2/3 rule California – it’s more important for members of an institution to grow their own power within their institution than to grow the institution itself.

We’re slowly working to an important moment on this. The Craig Becker nomination will provide an early test next week. If Scott Brown doesn’t throw a curveball and joins a filibuster to block Becker entirely, it will simply be time for a change. In the short term that could mean a raft of recess appointments (George W. Bush made 171, as a pre-buttal to the outrage). In the longer term, it’s time to end minority vetoes and return democracy to Washington.

 

Sen. Sherrod Brown (D-OH) has introduced a bill that would mitigate the effects of the Citizens United ruling on corporate political spending. Saying that corporations already have enormous influence in Washington, as evidenced by their $3.3 billion dollars in annual lobbying expenses, Brown’s bill would at least try to stop this influence from moving into the electoral sphere.

The bill has three major parts. First, it would promote accountability by requiring all corporate shareholders to vote before a company can commit to any election spending. Saying that half of all Americans own stock, Brown judged that they should be able to consent to any corporate political spending from a company they own.

Next, the bill would apply the “stand by your ad” standard for political candidates to corporate spending. CEOs would have to offer an “I approve this message” statement at the end of any advertising. If the spending was carried off through a shell group called “Americans for Accountability” or something of that nature, the funder of the association would need to deliver the sponsorship message, not the head of the shell group.

Finally, the bill would prohibit foreign corporations, including government-owned wealth funds or corporate entities, from engaging in political speech. “If anything should have the label ‘Made in America’, it should be elections,” said Brown.

Asked if unions should also be subject to these accountability and transparency measures, Brown pushed back, saying that corporate speech and union speech were not equivalent because of the relative size. In addition to unions having elections for officers and decision-makers, Brown said that “Corporations made $10 trillion dollars last year, and union dues equaled $6 billion. It’s the difference in scale between the size of my arm and the Empire State Building. To make them equal is too far of a reach. In fact, it shows the corporate influence in our body politic.”

While Brown was open to dealing with various disclosure issues in the elections process separately, his bill was tailored specifically to deal with the corporate spending issues brought up by the Citizens United ruling. He expressed support for a more wide-ranging Constitutional amendment looking at corporate personhood or overturning Buckley v. Valeo, but considered that too arduous a process to deal with an immediate issue. “This bill is in rapid response to a huge new problem, the grand-daddy of all campaign finance problems,” Brown said.

Brown said that his bill, which is among several dealing with the Citizens United decision, would be acted upon soon in the Senate, hopefully in time for the 2010 election cycle. If Republicans are swayed by their Tea Party base, perhaps some of them would even agree to the limits. Tea Party activists have openly opposed the Supreme Court ruling, with one saying “We might as well be able to vote for Disney.”

He excoriated the Supreme Court for favoring corporate interests in making the decision. “This is not the first decision these five Justices have made that favor privilege over the rest of us.”

 

While today’s Senate Democratic press conference offered few details, a support document does explain the various different policies that will be introduced this year to deal with the nation’s jobs crisis. FDL News has obtained the document.

The “jobs agenda” Senate Democrats are forwarding includes five major headers:

Tax Incentives to Spur Immediate Job Growth: This includes the job creation tax credits and the “carry-back” tax credit for small business capital investments. However, included in this “tax incentive” section are extensions of both unemployment insurance and the COBRA subsidy for out-of-work Americans. Democrats would also try to fill funding for the Highway Trust Fund to allow for more infrastructure investment, and create “Build America Bonds” to allow states to float lower-cost bonds for public works projects.

Helping Small Businesses Grow and Hire More Workers: This includes the small business lending enhancements that the President unveiled earlier this week. It also includes “export promotion.” In the State of the Union address, President Obama talked about doubling US exports but offered few details. Neither does this document, outside of “identifying ready markets” and “promoting small business exports.”

Creating Jobs Through Energy Efficiency: This is essentially the “cash for caulkers” idea that has been kicked around. Grants would be offered for residential homeowners to do energy retrofits. There’s also a piece in here encouraging energy efficiency renovations at manufacturing plants.

Rebuilding America: Basically, infrastructure investment. The House bill included $50 billion; there’s no dollar sign attached to this document for the Senate. These grants would be for investment in transportation infrastructure, water, and schools.

Investing in Critical Public Services: This is basically aid to state and local governments for fiscal stabilization. The Obama budget earmarks about $25 billion for this purpose. There’s also support for summer youth job programs.

There doesn’t seem to be any bipartisan support for any of this, at least not confirmed, and with #41 Scott Brown set to be seated today, it’s unclear how much of this can actually move under normal Senate rules.

 

Well, this is. . . interesting.

Director of National Intelligence Dennis C. Blair acknowledged Wednesday that government agencies may kill U.S. citizens abroad who are involved in terrorist activities if they are “taking action that threatens Americans.”

I love this new American criminal justice system, don’t you?

Blair told members of the House intelligence committee that he was speaking publicly about the issue to reassure Americans that intelligence agencies and the Department of Defense “follow a set of defined policy and legal procedures that are very carefully observed” in the use of lethal force against U.S. citizens.

This is basically about the US-born cleric in Yemen, Anwar al-Awlaki, thought to be the connected to both the attack by Fort Hood shooter Nidal Hassan and the attempted attack by Christmas Day underpants bomber Umar Farouk Abdulmutallab. But the implications here are really astounding. We have the Director of National Intelligence saying that Americans can be targeted for assassination if they are involved with an extremist group, later saying that the decision would be based on “whether that American is a threat to other Americans.”

Is that the new standard?

[Ed. Note: Marcy has much more on this.]

 

The Democratic leadership held a strange press conference just now, unveiling a “jobs agenda” that offered no details on the size of the bill, no real details on the elements of the bill, basically no details at all other than the fact that there will be a jobs bill.

We do know some elements of what will be in an initial package. You’ll see incentives to kickstart construction and infrastructure projects by adding money to the Highway Trust Fund, and some manner of job creation tax credit for small businesses (Harry Reid said that would go through Max Baucus’ Senate Finance Committee). Some safety-net spending, like extending unemployment benefits or the COBRA subsidy, may be included as well. But nobody really knows at this point.

What Sen. Reid did say is that there would be a vote on a jobs bill on Monday. “We hope to have a bipartisan proposal under Rule XIV today. Otherwise we’ll do it ourselves,” the Majority Leader said. “We want to work with Republicans, and it seems on the job issue, they want to work with us.”

I’m not sure that’s true. Republicans are making demands on the type of jobs vote they’d want to see. They want a pledge to get a vote on legislation on the estate tax, which Reid wouldn’t commit to. And they want to split any tax cut measures from any spending bills, which Sens. Durbin and Dorgan have been putting together.

He would not give any hints as to the size or composition of the bill, saying that he didn’t want to “step on our message.” More details were promised today or tomorrow.

Senate Democrats hoped to finish at least the first bill of this jobs agenda “before we leave here” at the end of next week, Reid said.

Some conservative Democrats have balked at any bill with a high price tag, which could be the reason why Reid is splitting the “jobs agenda” into discrete parts.

 

Let there be no doubt that Chris Dodd has his own ideas about banking reform, and they don’t match up with the Administration’s or with Paul Volcker’s.

The chairman of the Senate Banking Committee warned on Tuesday that the Obama administration’s new proposals to rein in Wall Street firms ran the risk of derailing months of delicate negotiations over overhauling financial regulations.

“It’s not a movable feast,” the chairman, Christopher J. Dodd, told Paul A. Volcker, the former Federal Reserve chairman, who has become an influential outside adviser to President Obama. “It’s adding to the problems of trying to get a bill done,” he said at the end of a hearing on the proposals, after all the other committee members had already left.

Mr. Dodd, Democrat of Connecticut, added that the administration was “getting precariously close” to excessive ambition for the legislation. “I don’t want to be in a position where we end up doing nothing because we tried to do too much,” he said.

The last thing we need, surely, is “excessively” ambitious legislation to rein in the banks. Because surely they should be allowed to gamble with customer deposits, wreak havoc on the global economy, and get bailed out for their trouble. That’s just the American way.

Volcker held his own in defending the rules he set for Wall Street, to do such things as ban proprietary trading for commercial banks, and to stop them from owning hedge funds and private equity funds at the same time, along with capping the size of future firms.

In his testimony, Mr Volcker, who chairs a presidential advisory board, dismissed industry concern that it was difficult to separate proprietary trading from the buying and selling conducted on behalf of customers.

“Every banker I speak with knows very well what ‘proprietary trading’ means and implies,” he said.

“What I want to get out of the system is taxpayer support for speculative activity.”

He said that trading should be allowed if it was undertaken for customers but regulators should clamp down on any attempts to evade new rules. “There will be temptations to speculate by aggressive, highly remunerated traders,” he said.

I’m amused by this idea that the White House is complicating the financial regulatory reform by offering their own ideas. Surely these are the same people who would have said that the Administration was “complicating” health care reform by shutting down the Gang of Six negotiations (financial reform is basically going through a “Gang of Eight” process right now). Yet if Obama did that, health care reform would be complete by now.

If the White House needs to butt out and let the Senate destroy regulatory reform on its own, perhaps they could focus on what the FDIC is doing, and highlight that.

So it was a pleasant surprise to learn that the FDIC presented a cogent and tough-minded plan for securtization reform at the American Securitization Forum […] I’ve been skeptical of various ideas to “fix” securitization, but this one would do the trick. And it will also have the effect inherent to any program to restrain profligate and irresponsible lending: it will reduce credit extension and increase costs to the industry. That’s a feature, not a bug. But many incumbents seem unable to accept that a return to healthy practices means an end to cheap credit.

In addition, this FDIC proposal supports two of my other pet theories. One is that it is possible for regulators to come up with effective reforms if they have the will. This is a cogent and well designed plan. Second is the FDIC is the only Federal banking overseer that takes regulation seriously (the SEC might have once upon a time; it might be possible for it to rebuild that skill. The Fed is beyond redemption here; it is dominated by monetary economists who not only don’t know what they don’t know, but also are unduly respectful of the wonders of financial markets. The FDIC, by contrast, is not overawed by banksters).

You can read the meat of the proposal at Yves’ site. Basically, mortgages wouldn’t be able to be securitized for 12 months, the originator has to hold at least 5% interest in the credit risk of the assets, full disclosure must be given and re-securitization of mortgages (CDOs) would essentially be disallowed.

As Yves said, this shows that financial regulatory reform is somewhat less important that having regulators who actually perform their mission. The Obama Administration is leading what John Judis has called a quiet revolution in regulatory agencies, and so the best way for them to go forward is to allow the agencies relevant to the financial industries, the ones who have the stars out of their eyes, to actually use the authority they have. Perhaps the biggest rule that Congress can make is to change the way regional Federal Reserve Boards elect their leadership, to get them out from under the thumb of the banksters. In the meantime, the FDIC is well-positioned to crack down on the financial industry with existing regulatory authority.

None of this is to say that Congress shouldn’t pass the Volcker rule; but there are other ways at the problem.

 

This is a significant development. It’s one thing for Mike Mullen and Colin Powell to go on the record favoring the repeal of the military’s don’t ask don’t tell policy, it’s another for Republicans with the responsibility of voting on the policy talking about their openness to repeal. Susan Collins, in her questioning yesterday in the Senate Armed Services Committee, is unmistakably a vote for repeal. And now, appearing on Andrea Mitchell’s show, Orrin Hatch signaled his willingness to repeal the policy, although he’s clearly hedging his bets. Here’s a rough transcript of what Hatch had to say:

Hatch: I think people are very concerned. I believe there are very outstanding, patriotic gay people who serve in the military who ought to be given credit for it. And they shouldn’t have to lie about being gay. On the other hand, I think a lot of people are concerned that if you do away with the don’t ask don’t tell, that then they’ll come back and ask for special rights and preferences and privileges that others don’t have. I don’t see that either. So, like I say, I just plain do not believe in prejudice of any kind.

Mitchell: So you’re willing to vote for the change?

Hatch: Well I don’t know about that, I’d have to look at it. I’d have to really see, and of course, they recommend, Admiral Mullen said at least a year study by them, and then they’d come out and make the final recommendation. At least that’s what I got out of it. I’d like to wait until the end and then see what they come up with and see what happens. I can see why people on both sides are upset, but I just want to do what’s right.

Mitchell: I can put you down as being open to it.

Hatch: I am.

Hatch gave himself all kinds of wiggle room, but the lack of a united front on this policy among Republicans weakens their ability to block it. If Collins is a yes vote – and she pretty clearly is – then the decision of moving forward falls to Democrats (and not one in the Armed Services Committee hearing raised a problem with it, although we haven’t heard from Ben Nelson yet). Hatch’s willingness makes it impossible for Democrats to use the “we don’t have the 60 votes” claim on this policy. They don’t have to anyway, because they could stick DADT repeal in the defense authorization bill anyway, which would require an amendment – and in all likelihood, 60 votes – to get repeal OUT. This is how the policy passed in the first place.

The point is that Hatch’s openness takes away the rhetorical case for not passing repeal. He’s hiding behind the one-year Pentagon study, and in the end, he may not vote for it at all. But he’s useful at the moment.

 

The Senate will move forward with a jobs bill this week, and nobody has a good handle on everything it will include. But Harry Reid is being pretty clear about his strategy: it’s a “jobs agenda,” not one big bill.

UPDATE 4:35 PM: Speaking to reporters Tuesday afternoon, Senate Majority Leader Harry Reid (D-Nev.) confirmed that Democrats planned to move forward with a jobs package that would include small business tax credits, a one-year reauthorization of the highway trust fund, money for Build America Bonds and some form of tax credit for employers who add new jobs.

On the last item, Reid specifically mentioned the Schumer-Hatch proposal to provide a payroll tax break to employers. The jury is still out on whether Democrats will be able to finalize details of a job tax credit program for inclusion in the very first jobs bill that moves in the next couple of weeks. But Reid stressed that his plan isn’t just to move one measure. “We do not have a jobs bill. We have a jobs agenda we’re working on,” Reid said.

To that end, today Reid and Jay Rockefeller dropped an extension of Medicaid help for the states, which would provide around around $23 billion in aid through June of 2011, basically picking up the tab for the next fiscal year. This was in the President’s budget but not necessarily part of a “jobs bill”. And there are other elements, like extending the COBRA subsidy and unemployment benefits, or the small business lending initiative, as well.

The strategy certainly appears to be to break measures that would strengthen economic activity and job creation into discrete parts, and move them separately. If I would guess, the goal seems to be to lessen the sticker shock of a big jobs bill number. Democrats are right to criticize the size of the bill, but they need to take into account all the different pieces, which when combined do get you pretty close if not beyond the House’s $154 billion dollar bill passed back in December ‘09. I would submit that even that is not a level that meets the jobs crisis, but it’s better than the $80 billion top line number that everyone is discussing.

The pitfall here is that four separate pieces of legislation could take four times as long to get through the Senate, and would be subject to all kinds of obstruction.

UPDATE: Reid, Durbin, Baucus and Dorgan will unveil their jobs bill tomorrow morning.

 

Andrea Mitchell just hosted Sen. Susan Collins, who has taken the lead on Republican attacks against the Justice Department for reading Umar Farouk Abdulmutallab his Miranda rights and providing him with a lawyer. And Mitchell was not her usual self – she was actually willing to challenge Collins’ false claims, and provide the context that Abdulmutallab is now cooperating after members of his family were brought in to earn trust.

Mitchell started by asking Collins if this approach to interrogation wasn’t more favorable than declaring Abdulmutallab an enemy combatant and using torture. Collins claimed that she received testimony from the Director of National Intelligence, Homeland Security Director and the head of the National Counter-Terrorism Center that they were not consulted on the Miranda decision. She also said that there was a long six-week gap between when Abdulmutallab returned to cooperate and provide intelligence, and we lost time-sensitive information.

And Mitchell, who was actually prepared, oddly enough, responded that DNI, DHS and the NCTC all participated in a national security briefing on Abdulmutallab and did know about the Miranda rights decision. She noted that the Nigerian family members would not have helped earn cooperation from Abdulmutallab if he did not have access to a lawyer and was being treated well (ensuring that the intelligence is actually decent instead of a way to get captors to stop torturing him). She said that the Bush Administration proceeded in exactly the same fashion with respect to Richard Reid. And she said that even under military procedures, Abdulmutallab would have had a lawyer.

Collins, shocked that she actually had to defend her moronic talking points, evaded the questions she didn’t want to answer, and replied that the military detainee system provides “more flexibility” – yeah, I’ll bet it does – and that, in fact, Jose Padilla was held as enemy combatant (what a model case!).

Eventually, Collins resignedly said that yes, she’s glad Abdulmutallab is cooperating now, but 5-6 weeks of “time-sensitive information” was lost because the intel wasn’t provided immediately. And the security officials may have known about the Miranda decision, but weren’t consulted enough. Or something.

It’s fun to see the Republicans run aground on their talking points today. They don’t even have them straight. Later in the show, Orrin Hatch (R-UT) said that the Administration did the right thing by asking the family to help get Abdulmutallab to talk, and claimed that this proved he was right all along, and they should have done more than 50 minutes of interrogation initially. I have no idea what that means. Should the US have immediately teleported over Abdulmutallab’s entire family moments after the Christmas bombing attempt?

Maybe they’ll realize that life isn’t 24. But I doubt it.

 

Democratic State Treasurer Alexi Giannoulias and Republican Rep. Mark Kirk will face off for the US Senate seat in Illinois, after both won primary races last night. Kirk won fairly easily against two tea party challengers, while Giannoulias held on against a challenge from Chicago Inspector General David Hoffman, 39-34. If Chicago Urban League President Cheryle Jackson didn’t take so much of the African-American vote, Hoffman may have actually caught Giannoulias, who had a name ID advantage and did well in the Chicago ring counties and downstate.

The gubernatorial races are closer. On the Democratic side, Governor Pat Quinn, who replaced the impeached Rod Blagojevich, held a thin 6,000-vote lead (out of over 800,000 cast) against Comptroller Dan Hynes. Republicans have an even closer race, with State Sen. Bill Brady up only 1,500 votes or so over State Sen. Kirk Dillard with almost everything counted. Expect at least one recount there.

Pollster Tom Jensen notes that 885,000 votes were cast for the Democrat in the Senate primary, compared to 736,000 for the Republican. “Those numbers are awfully close to each other for a state that’s overwhelmingly Democratic,” Jensen said, noting that Barack Obama’s Senate primary in 2004 featured an almost 2:1 split in primary votes.

Other notable races: Denny Hastert’s son Ethan got beat in IL-14 by longtime state lawmaker Randy Hultgren; Dan Seals will try in IL-10 for the third time, just getting by Julie Hamos. Seals lost to Mark Kirk in 2006 and 2008, but IL-10, which trends Democratic, is an open seat this year.

 

Sen. Chris Dodd appears obsessed with getting a bipartisan financial reform package through the Senate Banking Committee, no matter if it makes a mockery of reform, no matter if it includes virtually nothing to protect consumers or deal with the problem of “too big to fail” financial firms. He’s already seeking to drop the Volcker rule put forward by the White House that would limit proprietary trading from banks:

However, Shelby said he expects to hold a meeting with Banking Committee Chairman Chris Dodd (D-CT) regarding the way forward on regulatory reform in two weeks time. A Democratic banking committee staffer confirmed that the meeting between Dodd and Shelby will be critical as Dodd needs to determine the level of bipartisan agreement and the timing of bringing the bill through committee and on the Senate floor.

With the election of Republican Scott Brown to the Senate, the Democrats no longer have the necessary 60 votes to force through a Regulatory Reform package, and any bill will need at least some Republican support to pass. A Dodd staffer said the senator is likely to quietly drop or modify many of the recommendations in the Volcker rule to ensure Republican support for regulatory reform.

“Chris is retiring so he wants to end his career with an important regulatory reform bill and he wants to make the bill bipartisan,” the staffer said. “He is not going to risk bipartisan support to make the White House happy.”

A spokeswoman for Dodd denied that he would drop the Volcker rule, eventually stating that the Chairman supports it. That’s positive, that he’s walking back these reports after a host of criticism. But it’s not just Dodd. Mark Warner (D-VA) is also out there attacking the Volcker rule. . . :

Senator Mark Warner, a Democrat on the banking committee from Virginia, also said he has concerns regarding elements of the Volcker rule, many of which are already being dealt with by the committee. He said that one of the problems is in the definition of what constitutes proprietary trading and that regulators should be more proactive in determining what constitutes excessive risk taking by financial players.

Warner also said that the prospective Senate version of the Kanjorski amendment passed by the House also includes using capital adequacy standards to reign in excessive risk taking by financial institutions and that such an approach gives regulators greater flexibility.

The concern for me is that Volcker’s plan wouldn’t survive a committee vote.

The New York Times has more on the Senate Banking Committee talks, where Democratic and Republican Senators are paired off working on elements of the policy. Clearly, maximum pressure needs to be applied to this process, by advocacy groups and the White House, so that we don’t end up with reform in name only.