Author: Mike Lillis

The health reform blueprint unveiled by President Obama earlier this week is being described everywhere as an amalgamation of the Senate and House bills. When it comes to children’s coverage, though, that’s not quite the case.

While the House has proposed to scrap the popular Children’s Health Insurance Program in 2014, and the Senate offered two addition years of CHIP funding (through 2015), the White House goes a step further, proposing a funded CHIP extension through 2016.

The move drew quick praise from a number of children’s welfare advocates, who have warned for months that the House proposal to shift kids from CHIP into private exchange programs would hike costs on low-income families, thereby discouraging parents from buying coverage for their kids at all.

The Congressional Budget Office backed that claim, arguing that, as a result of that shift, “some of those children would be eligible for subsidized coverage in the exchanges but would not be enrolled in an exchange plan.”

Bruce Lesley, president of First Focus, a kids advocacy group, said he’s “heartened” by the White House proposal.

After months of policy disputes over kids and health reform, we are pleased that President Obama has sided with children’s advocates, experts, actuaries, and the public on what is best for America’s children — the preservation of the highly successful Children’s Health Insurance Program.

Whether that proposal stands in the final bill has yet to be seen.

The American Action Forum — the right’s answer to the Center for American Progress — launched itself into the public consciousness Tuesday in Washington with a debate on Congress’ efforts to tackle the jobs crisis, which has left nearly one in five Americans without work or underemployed.

Jared Bernstein, top economic adviser to Vice President Joe Biden, was on hand to defend the Democrats’ stimulus legislation, claiming that it’s “created or retained about 2 million jobs.” Also representing the left was Ron Blackwell, chief economist of the AFL-CIO, who advocated for a year-long extension of unemployment benefits, more emergency funding for states, and the creation of a new federal employment program akin to FDR’s Civilian Conservation Corps.

Most speakers, though, rallied behind what’s likely to be the American Action Forum’s bread and butter: the advocation of job creation and economic development by way of freeing industry to do pretty much whatever it wants.

There was Gov. Bob McDonnell (R-Va.) arguing against cap-and-trade, card check and any more deficit spending. (He didn’t mention that he signed a letter this week requesting more Medicaid funding from Congress.) There was Stan Anderson, senior attorney for the U.S. Chamber of Commerce, blasting the EPA as “enormously unhelpful” and promoting the further development of fossil fuels. (”Green jobs are not the short-term future,” he said.) There was William “Denny” Dennis, senior fellow at the NFIB Research Foundation, a small-business advocacy group, arguing that companies aren’t hiring in part because Congress hasn’t made the Bush tax cuts permanent. (”Uncertainty,” he said, is a greater hindrance to new hires than lack of available credit.) And there was Arnold Kling, former economist at the Federal Reserve and Freddie Mac, blasting the thought that more state funding would help the recovery. (If states are struggling financially, he said, they should simply slash salaries for teachers and cops.)

Finally, apropos of nothing, former Sen. Norm Coleman (R-Minn.), who heads the Forum, also stressed the importance of the United States having Israel’s back.

This group might be new, but don’t say it isn’t on message.

It’s not just the filing deadline for unemployment benefits that’s set to arrive at the end of this month. Doctors treating Medicare patients are also scheduled to see an average pay cut of 21 percent beginning March 1, leaving no absence of questions about how the Democrats plan to deal with it.

Today, Senate Majority Leader Harry Reid (D-Nev.) told reporters that he wants to fix the Medicare pay formula “for as long as we can.”

“The doctors are right,” Reid said. “And it’s not just throwing something to the doctors to be nice to them.”

Unfortunately for doctors, “as long as we can” likely won’t be a very substantial span.

Recall that in October, the Senate shot down a plan to scrap the so-called sustainable growth rate formula altogether. The reason was simple: The price tag is upwards of $240 billion over 10 years, and the Democrats hadn’t proposed to pay for it with new revenues or spending cuts elsewhere. With voters well weary of deficit spending, it’s hard to imagine such a proposal passing the Senate four months closer to November’s midterm elections.

On the other hand, the American Medical Association, the nation’s largest doctors lobby, has grown tired of Congress applying short-term patches each year to prevent Medicare cuts to physicians. In a letter to lawmakers yesterday, the group warned that “kicking the can down the road with yet another short-term action magnifies the problem and makes it very difficult for physicians to continue caring for seniors and military families.” AMA is threatening to withhold its support for health reform unless it includes a longer-term doc fix.

So the choice isn’t a good one. Either the Democrats add a quarter-trillion dollars to the debt, or they risk the attacks of the powerful doctors’ lobby in what’s already certain to be a tough election year. Funny that the only option that doesn’t seem to be on the table is finding some way to pay the $240 billion.

Though initial proposals for extending unemployment benefits have ranged from six months (in the House) to three months (in the Baucus-Grassley proposal), Senate Majority Leader Harry Reid (D-Nev.) is now pushing for an even longer extension: through the end of the year. The AP’s Andrew Taylor reports:

Facing a Feb. 28 deadline, Reid hopes to pass two measures, one as soon as Tuesday. The first includes a 30-day extension of several of soon-to-expire provisions such as jobless aid, parts of the Patriot Act and prevention of cuts in Medicare payments to doctors.

Reid and McConnell were obviously negotiating the parameters of the second — a broader, longer-term measure — in a private conversation on the Senate floor. A top Reid aide could be overheard suggesting a full-year extension of unemployment insurance and a 65 percent health insurance subsidy for the unemployed through the federal COBRA program.

Of note, the extension they’re considering surrounds the filing deadline for existing benefits, not the creation of a additional benefit tiers.

To hear Republicans in Congress tell it, the Grand Old Party is pretty much united against the deficit-spending approach to economic recovery.

Don’t tell that to local GOP officials.

Faced with the most severe budget crises in decades, state and local policymakers from across the country — including a growing list of prominent Republicans — have been only too happy to accept the additional federal funding that accompanied last year’s $787 billion stimulus bill. Not only did that money prop up job markets, many say, but it kept social-service programs running strong during a period of greatest need.

“I don’t apologize for it at all,” Florida GOP Gov. Charlie Crist said Monday of accepting the federal help. “It was the right thing to do. We needed the money.”

That’s not all. Twelve months later — even as Republicans on Capitol Hill are balking at the new jobs bills being pushed by Democrats — a number of conservative governors have unveiled 2011 budget proposals assuming that billions of dollars more are on the way from Washington. Adding to the sense of urgency, 47 of the nation’s 50 governors on Sunday sent a letter to congressional leaders urging billions of dollars in additional Medicaid funding.

The saga highlights the expansive divide between GOP leaders on the national stage — who are focused almost exclusively on how many seats the party can pick up in this year’s mid-term elections — and those running the states, where the more pressing issue is how to balance budgets amid the economic chaos.

The two perspectives couldn’t be more different. Washington’s Republicans — who have voted near-unanimously against the Democrats’ stimulus bills — have effectively bet their political fortunes that those efforts would not only anger an American public grown weary of deficit spending, but would also fail to spur a recovery. An economy in turmoil, therefore, will play to their advantage at the polls in November — leaving them in the odd position of hoping the downturn endures until then. State officials, on the other hand, are grappling in real time with pinched budgets, a scarcity of jobs, and safety-net services threatened by increased demand and falling revenues.

The first group is playing election-year politics; the second is wrestling with urgent budget policies — and the source of the funding is beginning to matter less than whether or not it arrives at all.

In Georgia, for example, GOP Gov. Sonny Perdue’s latest budget proposal assumes that extra federal Medicaid funding will be flowing to the state through the end of June 2011, even though that money under current law expires at the end of 2010.

In Alabama, the 2011 budget proposal from Gov. Bob Riley (R) makes similar assumptions. The list goes on.

“If you anticipate something is going to pass, it would be asinine for us to go in and build a budget that would require people maybe to be laid off,” Riley said last month. It makes little sense, he added, “to build a budget based on things that we really don’t think will happen.”

If congressional Republicans had their way, those lay-offs might be forthcoming. Indeed, although most economists agree that more federal spending is necessary to spur hiring, only five Republicans voted in favor of the modest $15 billion jobs bill that jumped a vital procedural hurdle in the Senate on Monday.

In similar fashion, not a single Republican voted for the $154 billion jobs bill that passed the House in December. House Minority Leader John Boehner (R-Ohio) at the time called the legislation “budget-busting,” “fiscally irresponsible” and “unconscionable.”

Yet what’s unconscionable in the eyes of Washington is often economic necessity to many state officials faced with the worst budget crises in generations. In this environment, getting more stabilizing money from Washington is more important than the politically driven crusade against deficit spending.

On Sunday, for example, GOP Gov. Arnold Schwarzenegger chided the Republicans of Capitol Hill for their anti-stimulus sentiments, urging them to “think about the people rather than politics.”

“Anyone that says that [the stimulus] hasn’t created the jobs,” he said, “should talk to the 150,000 people that have been getting jobs in California.”

A series of recent reports point out the potential perils if congressional leaders fail to pass a new spending package tackling the jobs crisis, which has left roughly 17 percent of the workforce underemployed. Economists at the Center on Budget and Policy Priorities are warning that, without a new wave of funding for states, an additional 900,000 jobs would be lost. Analysts at the National Employment Law Project caution that 5 million workers will exhaust their unemployment benefits in the next four month without an extension of the filing deadline. And Families USA, a health-care advocacy group, estimates that hundreds of thousands of low-income folks would lose their Medicaid benefits if the extra federal help expires in January as scheduled.

It’s a dynamic that hasn’t been lost on the White House. On Monday, President Obama urged the nation’s governors to support his efforts to improve the economy — deficit spending or none.

“As governors, I know you feel the same responsibility to see the people we serve through difficult times,” Obama said.

State officials, even Republicans who’ve built a career massaging an image of fiscal hawkishness, appear more than willing to oblige.

“Government spending in and of itself is not stimulus,” Florida state Rep. Dean Cannon (R) said in December as lawmakers were fighting to secure $2.5 billion in federal funding for a high-speed rail project. “But where we can draw down more federal dollars and put Floridians to work building something … I think folks are probably more comfortable with that.”

Newly elected Sen. Scott Brown (R-Mass.), a wildcard in the jobs debate, agreed, siding Monday with the Democrats, who needed at least two Republican defectors to pass their $15 billion jobs bill.

“I wish the tax cuts were deeper and broader,” Brown said in a statement issued just before the vote, “but I will vote for it because it contains measures that will help put people back to work.”

Julissa Treviño contributed to this report.

Senate Majority Leader Harry Reid (D-Nev.) is reportedly preparing to introduce a bill extending the filing deadline for the next tier of unemployment benefits by 15 days. The backlash from economists pushing for a much larger safety net was inevitable. Here’s Ross Eisenbrey, vice president of the Economic Policy Institute, who just released a statement blasting that strategy:

The American people may not be familiar with the arcane rules that are grinding the Senate to a halt, but they are all too familiar with the hardships that this recession has imposed on their families, friends, and neighbors. Senators have got to find a way to move forward to provide help to Americans who are out of work, starting with a 12-month extension of unemployment benefits.

Without congressional action, the filing deadline arrives Friday. An estimated 1.2 million unemployed workers are poised to exhaust their benefits next month if that cutoff remains unchanged.

Here’s a profound idea from California GOP Gov. Arnold Schwarzenegger, who went after congressional Republicans yesterday for criticizing the Democrats’ stimulus bill one moment, then taking credit for the money the legislation is providing their districts the next. From ABC’s “This Week:”

I find it interesting that you have a lot of the Republicans running around and pushing back on the stimulus money and saying this doesn’t create any new jobs, and then they go out and they do the photo ops and they are posing with the big check and they say, isn’t this great? … It doesn’t match up. …

I think it’s kind of politics, rather than thinking about only one thing, and this is how do we support the president, how do we support him and do everything that we can in order to go and stimulate the economy, get the economy back, and think about the people rather than politics.

Schwarzenegger’s perspective on the economic turmoil, of course, couldn’t be more different from that of GOP leaders on Capitol Hill. He’s got a state to run, a budget to balance, a jobs crisis to tackle — meaning he’s actually interested in a full economic recovery. Republicans in Congress, on the other hand, have their eyes on just one thing: November’s midterm elections. And the worse off the country is eight months from now, the better the GOP will do at the polls. Though they’d never admit it, they’re actually cheering for the chaos to continue. Look for more and more Schwarzeneggers to start calling them out.

Greg Sargent has the scoop:

Senator Harry Reid’s office says that if a final decision is made to pass health reform via reconciliation, the Majority Leader would support holding a reconciliation vote on the public option.

The actual statement from Reid’s office, though, is an odd one:

If a decision is made to use reconciliation to advance health care, Senator Reid will work with the White House, the House, and members of his caucus in an effort to craft a public option that can overcome procedural obstacles and secure enough votes.

It’s a wonderful use of the passive voice  (always popular on Capitol Hill) to imply that the decision whether or not to use reconciliation will come down from Mt. Olympus or somewhere — as if the Senate majority leader doesn’t have any power to control these things. Sargent addresses this a bit, pointing out that Senate aides (1) maintain that the House would have to pass a reconciliation bill first, (2) want assurances that the White House will help to whip votes from fearful Democrats, and (3) fear that parliamentary rules to begin with might not allow the public plan to pass by reconciliation.

That’s a lot of unknowns for this late stage in the debate. You start to wonder if this public option push isn’t intended simply to shield Democrats from the liberal critics who thought all along that the Senate didn’t fight hard enough for the provision.

Senate leaders are only too aware that, amidst the nation’s jobs crisis, the filing deadline for emergency unemployment benefits is less than two weeks away. Oregon Sens. Ron Wyden (D) and Jeff Merkley (D) offered a gentle reminder Friday, warning Senate Majority Leader Harry Reid (D-Nev.) that a failure to quickly pass an extension would “only dampen and delay the economic recovery.”

As the deadline nears, state agencies will begin to send out notices for the termination of benefits, re-program their benefit systems, and develop contingency plans for handling claimants whose benefits are terminated.  If Congress does not act to extend benefits now, agencies that administer benefits and families who depend on them will have these essential safety nets pulled out from under them.

Though they don’t specify a timeframe in their request, both Wyden and Merkley were a part of last month’s Democratic push to extend the UI filing deadline through the end of 2010. Their motivation is clear: Oregon’s unemployment rate, at 11 percent, is well above the national average.

Remember back in 2003 when the insurance industry said that the creation of the Medicare Advantage program — which allows Medicare patients to receive their health coverage through private plans — would save both the government and patients money?

Scratch that.

Seniors enrolled in MA prescription drug plans will pay, on average, $39.61 in monthly premiums this year — a 14 percent jump over the 2009 rate, according to a report released today by Avalere Health, a DC-based consulting firm. And for one particularly popular type of MA plan — called private fee for service — the new average rate will be $57.85, an increase of more than 31 percent, Avalere reports. By contrast, monthly premiums in a standard drug plan under traditional Medicare will average $30 this year, up 7 percent from 2009.

The cost hikes, according to Lindsey Spindle, an Avalere vice president, “fit into a broader trend of increased financial pressure on the insured through rising co-pays and increased premiums.”

So if patients are paying more for MA plans, that must mean that the government is paying less, right? Wrong. The Medicare Payment Advisory Commission has long reported that the government pays much more to cover the average MA patient than it does to cover those enrolled in traditional Medicare. In 2009, it paid 14 percent more for a typical MA enrollee. A part of that additional cost, MedPAC noted last year, “consists of funds used for plan administration and profits and not direct health care services for beneficiaries.”

Translation: Taxpayers are paying tremendous subsidies to insurance companies which, in turn, are hiking premiums on seniors.

Medicare privatization, of course, has been a goal of conservatives since the program was launched more than four decades ago. The theory has been that the private sector is more nimble and cost effective, that it can offer additional services while at the same time  lowering costs. It would be a better argument if only it were true.

Hat tip: The Hill.

The media might be turning their attention to the looming crisis in commercial real estate, but some on Capitol Hill still doubt that the White House is doing enough to curtail residential foreclosures.

With that in mind, the House Oversight Committee’s Domestic Policy subpanel will hold a hearing next Tuesday on the administration’s anti-foreclosure efforts, Chairman Dennis Kucinich (D-Ohio) announced today. An unnamed Treasury Department official will testify, Kucinich says — and will have some explaining to do. Despite the administrative moves to stem the housing crisis, foreclosures topped 315,000 last month — up 15 percent from the year before, according to RealtyTrac, an online foreclosure database.

The White House isn’t blind to the problem. Today, President Obama will announce a reported $1.5 billion in federal funds to help stabilize the housing markets in California, Michigan, Florida, Nevada and Arizona — five states that have been pummeled by the housing collapse. Still, that the administration wasn’t more aggressive tackling the housing crisis — which, after all, was the root of the entire downturn — might be its biggest failure of the last year.

As the CPAC conference chugs on in Washington, Wes Benedict, executive director of the Libertarian Party, issued this statement reminding the world that the GOP has no moral claim to small government or fiscal responsibility.

It’s interesting that conservatives only notice “big government” when it’s something their political enemies want. When conservatives want it, apparently it doesn’t count.

• If a conservative wants a trillion-dollar foreign war, that doesn’t count.
• If a conservative wants a 700-billion-dollar bank bailout, that doesn’t count.
• If a conservative wants to spend billions fighting a needless and destructive War on Drugs, that doesn’t count.
• If a conservative wants to spend billions building border fences, that doesn’t count.
• If a conservative wants to “protect” the huge, unjust, and terribly inefficient Social Security and Medicare programs, that doesn’t count.
• If a conservative wants billions in farm subsidies, that doesn’t count.

It’s truly amazing how many things “don’t count.”

Conservatives like Rush Limbaugh can’t ever be satisfied with enough military spending and foreign wars.

Conservatives like Mitt Romney want to force everyone to buy health insurance.

Conservatives like George W. Bush — well, his list of supporting big-government programs is almost endless.

Ronald Reagan, often praised as an icon of conservatism, signed massive spending bills that made his the biggest-spending administration (as a percentage of GDP) since World War II.

Indeed, as GOP leaders are busy screaming about the recent levels of deficit spending, it’s worth checking out the historic rise of the national debt — and which party controlled the White House when the biggest jumps occurred.

The two central theories behind the deficit commission created yesterday by President Obama are (1) Congress is too dysfunctional to make these tough choices on its own, and (2) everything must be left on the table as a possible solution to runaway deficit spending. That means that liberals might have to swallow some cuts to popular government programs and conservatives might be forced to accept a tax hike or two.

Don’t hold your breath. Proving that their calls for bipartisanship are bunk, GOP leaders are already lashing out at the possibility that the commission would recommend that someone, somewhere pay higher taxes. “Americans know our problem is not that we tax too little, but that Washington spends too much,” Senate Minority Leader Mitch McConnell (R-Ky.) said yesterday in a statement. (That’s the same Mitch McConnell who once called a deficit commission “the best way to address the [budget] crisis,” then voted against the proposal anyway.)

That’s also the message coming from the headliners at CPAC this week. Florida GOP Senate candidate Marco Rubio yesterday told the conservative faithful assembled in Washington that his plan for balancing the budget features an across-the-board tax cut, including an abolition of taxes on capital gains, dividends and interest.

“While we’re at it, let’s eliminate the one on death, too,” he said.

The implication from McConnell, Rubio and a host of others is that they can slash federal revenues and balance the budget by simply taking a hatchet to government programs. They must have forgotten what happened when the White House recently proposed to cut some spending in GOP Sen. Richard Shelby’s Alabama. Or the Republican outcry that accompanied the Democrats’ proposal to cut some payments to the private insurance plans operating under Medicare. Or the inconvenient fact that conservative states have historically received a good deal more federal funding than their residents have paid in federal taxes.

Into this picture, enter Alan Simpson, former GOP senator from Wyoming. Simpson — who, along with University of North Carolina President Erskine Bowles, will head Obama’s deficit commission — told PBS NewsHour’s Judy Woodruff yesterday that those who think deficits can be controlled solely with spending cuts are, well, dazed and confused. From the transcript:

Woodruff: Some people, mainly Republicans right now, are arguing, what’s really needed are tax cuts, that, even if it raises the deficit in the short term, that this would get government out of the way of business, business could grow, and the deficit will take care of itself.

Simpson:  Well, I’m not smoking that same pipe. …

Everything is on the table.  But, if we’re just going to use flash words like cutting children’s benefits or cutting veterans or raising taxes, it will be a tougher struggle.

Everything is out there.  We [know] how people use emotion, fear, guilt, and racism.  I have been through that old stuff with immigration. … I don’t use those.  I use facts.  And we’re going to do a lot of facts.

Whether facts mean anything in an election year is another question altogether.

Democrats promoting their $15 billion jobs bill Thursday were hoping to get a strong endorsement from one of the nation’s most influential financial experts. Instead, Mark Zandi, chief economist at Moody’s Economy.com, said the bill is “too small” to tackle the jobs crisis and ensure that the country doesn’t slip back into recession.

“I don’t think this is enough,” Zandi told reporters during a conference call with Democratic leaders. “It’s too small a step and more needs to be done.”

While House Democrats passed a $154 billion jobs bill in December — a proposal featuring billions for new infrastructure projects, state help and unemployment benefits — Senate leaders are eying a much smaller package focused on business tax cuts. The reason is clear: In a tough election year when 60 votes are needed to pass anything at all through the Senate, there’s little appetite for another huge spending bill — even if another huge spending bill is the best solution to the jobs crisis.

The Senate’s $15 billion proposal is centered around $13 billion in tax breaks to businesses that hire unemployed workers this year, a provision championed by Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah). Other components include an extension of highway funding, a bonds provision allowing state and local governments to borrow cash at lower rates, and another business tax break empowering companies to write off more expenses. The bill, Democrats say, is just the first in a series of legislative efforts designed to spur hiring.

Senate leaders defended their plan Thursday, arguing that the provisions share a common trait: each has bipartisan backing. Schumer said the strategy was chosen in recognition of the wide-spread animosity toward the near-constant partisan bickering that’s defined Washington politics in recent years — an anger on display last month in Massachusetts, where voters stunned the country by electing GOP Sen. Scott Brown to replace the late-Sen. Edward Kennedy, a Democratic icon.

“They want us to work on jobs,” Schumer said of voters, “and they want us to work together.”

While Zandi offered tepid praise for the Senate’s $15 billion proposal — calling it “a good first step” — he also warned that it simply isn’t broad enough to address the national employment crisis, which has left more than 17 percent of the country either without work or underemployed. A failure to provide additional funding to struggling states, for example, would lead to job losses that would “overwhelm” all the other job-creating efforts being tried, he said. And while the Schumer-Hatch tax credit would create between 200,000 and 300,000 new jobs, Zandi estimated, that number is a drop in the bucket relative to the roughly 11 million new jobs needed to get the country back to pre-recession jobless levels. A similar tax credit proposed by the White House would be more effective, he said, if only because of its $33 billion price tag.

“If I were king for a day,” Zandi said, “I’d go for the bigger plan.”

He’s not the lone beacon. Analysts at the Center on Budget and Policy Priorities, a liberal policy group, estimated recently that, without federal help, state budget cuts would result in 900,000 lost jobs. And on Thursday, Families USA, a consumer health care advocate, warned of the Medicaid cuts that would follow if Washington doesn’t step in with emergency funding. Arizona, for example, is weighing a proposal to cut more than 310,000 low-income adults from the Medicaid rolls, Families USA says. In California, 250,000 low-income folks — including kids and pregnant women — would lose coverage under the governor’s proposal, the group estimates. The list goes on.

“The only way this immediate crisis can be averted is by enacting an extension of increased federal funding for state Medicaid programs — and doing so right away,” Ron Pollack, Families USA executive director, said in a statement.

The legislation is time-sensitive for other reasons. The filing deadline for emergency unemployment insurance is at the end of February, leaving millions of Americans unsure if they’ll be eligible for the next tier of benefits. The National Employment Law Project estimates that, without a further extension, 1.2 million unemployed workers will exhaust their benefits in March — a figure that grows to 5 million through June. Although the House passed a six-month UI extension in December (cost: $41 billion), the Senate has yet to finalize its plans on the issue. Sen. Jack Reed (D-R.I.) is among one group of Democrats pushing to extend unemployment through the end of the year.

“It’s not just something that provides relief to families,” Reed told reporters Thursday. “It also stimulates the economy.”

Democrats are well aware of the severity of the jobs crisis. Yet, faced with record budget deficits — and a public grown weary of a Congress unable to pay its bills — Senate leaders are avoiding much larger spending proposals that either have no chance of passing the Senate, or could haunt the Democrats on the campaign trail. Instead, they’ve opted for what Schumer on Thursday repeatedly called a “modest” proposal.

“This is not a panacea — I would not try to sell it as that,” Schumer said. “We have to be careful here and thread the needle.”

Yet Zandi warned that, while the economy is in recovery mode, it hasn’t evolved to a point where job creation is self-sustaining. And that means that lawmakers hoping to spur hiring will also have to be careful not to under-spend, which could pull the economy back into a recession. If that happened, Zandi said, “there’s no coming out.”

Schumer, for his part, vowed that the $15 billion proposal is just the first in a series. But he didn’t offer any hints about the size or makeup of what’s to come. Nor, the New York Democrat conceded, have any Republicans committed to supporting the package.

“The one thing you can be assured of is that there will be more,” he said.

Whether more is enough has yet to be seen.

Here’s Bill Johnson, the longshot Republican vying to replace retiring Sen. Jim Bunning (R) in Kentucky, arguing for the elimination of the EPA:

The Federal Government is standing between the American people and their use of their natural resources. It is time to abolish the Environmental Protection Agency [and] return those responsibilities to the states.

In Kentucky, of course, the environmental debate doesn’t exist outside the context of coal. And for the record, Johnson wants it to be known that he supports “all forms” of coal extraction, including mountaintop removal, where companies blast the peaks off of the Appalachians and push the debris into nearby streams. That process is popular among coal companies because it reduces labor and hauling costs. But for those living nearby, the deterioration of air and water quality is another thing altogether. Many locals are pushing back against the centuries-old trend of Big Coal decimating Appalachian communities.

Not Johnson. The self-described Reagan Republican argues that “any” further restrictions on coal companies “would decimate jobs in Kentucky and drive up energy costs for nearly every person.”

It’s an odd argument from conservatives that the best way to prosperity is to allow the wholesale rape of the land by companies that (1) are constantly searching for ways to shed laborers, and (2) are fighting to extend the nation’s reliance on the same fossil fuels contributing most to climate change. Though in the case of Johnson, the argument hardly comes as a surprise.

“The earth,” he says, “is actually in a cooling cycle.”

It began two days ago as a four-senator campaign urging Senate Majority Leader Harry Reid (D-Nev.) to tap the budget reconciliation process to create a public health insurance plan that would compete against private companies. Now 16 upper-chamber Democrats have signed their names in support of that strategy, according to the Progressive Change Campaign Committee, a liberal group that launched the campaign. Names follow after the jump:

Democratic Sens. Michael Bennet (Colo.), Barbara Boxer (Calif.), Dianne Feinstein (Calif.), Sherrod Brown (Ohio), Roland Burris (Ill.), Al Franken (Minn.), Kirsten Gillibrand (N.Y.), John Kerry (Mass.), Frank Lautenberg (N.J.), Jack Reed (R.I.), Sheldon Whitehouse (R.I.), Pat Leahy (Vt.), Bernie Sanders (Vt.), Jeff Merkley (Ore.), Barbara Mikulski (Md.) and Tom Udall (N.M).

Among Capitol Hill’s most common platitudes is this idea that the average voter in Des Moines or Waco or San Luis Obispo is well-enough versed in Medicare law, derivatives markets and climate science to dictate the precise policies coming out of Washington. It isn’t true, of course. The average voter simply doesn’t have the time to become an expert on these esoteric things. Indeed, they send their representatives to Washington with the idea that those folks will become the experts — and that they’ll vote in good faith to support the policies that would make the country stronger.

With that in mind, there’s plenty of room to criticize those lawmakers who, for political ends, mislead their own constituents with false messages about death panels, or death taxes, or pulling the plug on grandma. And yet, as Congress spins its wheels over the most pressing issues of the day — and each party blames the other for the impasse — Washington Post business columnist Steven Pearlstein notes accurately this week that the public at large also bears a share of the blame.

“[T]he truth is that on many issues these days, the American people are badly confused,” Pearstein writes.

They want Wall Street to be reined in, but they’re dead set against more regulation.

They want everyone to have access to affordable health insurance, but they’re wary of expanding the role of government.

They want the government to do something to create jobs, but not if it involves spending more money.

They want the federal deficit brought under control, but not if it means cutting entitlement spending or raising taxes.

They want to do something about global warming, but not if it raises energy prices.

Translation: Americans seem well aware of the enormous problems facing the country, but few are willing to sacrifice their own skin to fix them — a charge that could also extend to lawmakers more inclined to do what’s popular than what’s best. The result is that the nation is headed off of a cliff. But, Pearlstein argues, the leadership vacuum also creates an opportunity for strong leaders to step in and fill it — a fitting message in the week that the country is (ostensibly) celebrating the lives of George Washington and Abraham Lincoln.

“The reason we remember them as great presidents is that they threw off the yoke of party loyalty, defied popular opinion and used the full weight of their office to do what had to be done,” Pearlstein writes. “They understood, or came to understand, an important truth: that only after they had demonstrated that they were willing to lead, and lead boldly, were the people willing to follow and drag Congress along with them.”

Anyone listening?

The White House wants it. Senate leaders support it. The House has already passed it. And, in the wake of the worst financial upheaval since the Great Depression, many consumer groups and state regulators say it’s vital if the country is to avoid another economic collapse. Yet the proposal to create a new consumer financial protection agency is, for all practical purposes, dead on arrival in the Senate.

Just call it the public option of the finance reform debate.

Indeed, Republicans are already treating the protection agency like poison. Senate Banking Committee Chairman Christopher Dodd (D-Conn.) may have abandoned his finance-reform talks with Sen. Richard Shelby (R-Ala.), an outspoken foe of a separate agency to protect consumers. But Shelby’s replacement at the negotiating table is Sen. Bob Corker (R-Tenn.), who said recently that, just as Republicans were unanimous in opposing the public plan in the health care debate, so too are they united against an independent consumer financial protection agency, or CFPA — a proposal championed by Elizabeth Warren, head of the TARP oversight panel.

“For Republicans, including me, a free-standing agency is a nonstarter,” Corker told The Hill last week. Instead, Corker wants to carve out a consumer protection unit within a much larger bank regulator being proposed by Dodd.

Yet that idea worries many consumer advocates, who argue that the agency charged with ensuring the soundness of the nation’s financial institutions shouldn’t also be responsible for protecting consumers. It’s not difficult to imagine, for instance, situations in which firms profit from unfair or abusive practices. In those cases, the strategies that bolster the firms’ financial health might do so by taking advantage of the same confused consumers the agency is supposed to safeguard.

“These two missions can conflict,” Travis Plunkett, legislative director of the Consumer Federation of America, said Tuesday at a finance reform discussion hosted by the New America Foundation in Washington. “It would be like putting the Department of Commerce in charge of the EPA. … It would mean that we haven’t learned the lessons of the crisis.”

No matter. Despite the recent Wall Street collapse — a crash that required trillions of dollars in federal help and has left nearly a fifth of the country underemployed — the powerful financial services industry has retained remarkable sway on Capitol Hill. Not only have the nation’s largest firms rebounded to a point where seven- and eight-figure bonuses are again the norm, but they’ve also pumped tens of millions of dollars into K Street to lobby against the Democrats’ reform plans in general and the CFPA in particular.

The industry warns that too much government oversight would stifle innovation and ultimately limit access to the same credit that’s the lifeblood of the economy — not unlike the health insurance industry warning that the public option would ultimately harm the same consumers it’s designed to help. And lawmakers are listening. Not only are Republicans united against the CFPA, but a handful of Democrats — including Sens. Tim Johnson (S.D.), Ben Nelson (Neb.) and Mark Warner (Va.) — are wary as well. That opposition means that the Democrats would have had trouble creating the CFPA even before the surprise victory last month of Sen. Scott Brown (R-Mass.), which has forced the Democrats’ health care reforms to the back burner.

The saga highlights the dilemma facing Democrats in Congress and the White House in the run-up to November’s mid-term elections. On one hand, party leaders want to bolster their populist image; on the other, they’ll have to rally the support of at least a few business-friendly senators to get anything at all through the upper chamber, where 60 votes are required to pass everything. Meanwhile, Democrats also don’t want to alienate the same Wall Street firms that gave heavily to the party in 2008. If the enactment of strict new financial regulations was a foregone conclusion in February of 2009, a year later it’s looking like the Democrats will have to settle for weaker tea.

Another hurdle facing the CFPA, according to some observers, has been the failure of Democratic supporters to sell the importance of their proposal. Tim Fernholz
, writer at The American Prospect, pointed out that most voters have experience with mortgage loans, or car loans, or credit card rates or overdraft fees. The question is: why haven’t CFPA supporters been able to convince those same folks that a consumer protection agency would work to their benefit? “It really should be something that’s politically popular,” Fernholz said.

Jonathan Mintz, commissioner of New York City’s Department of Consumer Affairs, agreed that, despite all the evidence that the industry needs a shorter leash, the Democrats’ messaging has failed to resonate with the public at large. “You can be very specific about the harm that’s being done,” he said. “Suddenly what you’re talking about is a literal problem with a literal solution.”

Not that all Democrats are done fighting for the CFPA. “There needs to be a new agency with new powers for whom this will be a primary mission,” Lawrence Summers, White House National Economic Council director, said last month. More recently, White House Press Secretary Robert Gibbs echoed that sentiment, telling reporters Friday that an independent consumer protection authority remains “a great priority” of President Obama.

Congress is half way there. In December, House Democrats passed a financial reform package that included a stand-alone CFPA. Sponsored by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, the bill would prohibit certain complex financial products, require greater transparency surrounding terms and rein in misleading marketing campaigns. It received exactly zero Republican votes.

Some state financial regulators warned Tuesday that the industry has evolved quickly, with more and more companies dabbling in the complicated products that few seem to understand. “The fringe sector really isn’t so fringe anymore,” said Sarah Bloom Raskin
, Maryland’s commissioner of financial regulation.

Plunkett agreed, noting that the recent turmoil was caused by a series of regulatory failures that allowed the nation’s financial institutions to make a habit of abusive practices — a “parade of horribles,” Plunkett said, that extended well beyond sub-prime mortgage lending into the realm of credit cards, overdraft fees and payday loans. Because no one agency concentrates exclusively on protecting consumers, he said, they were able to focus elsewhere without much consequence — until it was too late.

“It’s a failure of will,” Plunkett said. “No one had consumer protection as a priority.”

And if Corker and the others have their way, that trend will continue.

For the past few weeks, House liberals have been urging Democratic leaders in the Senate to bring up the public insurance option via the budget reconciliation process, which would sidestep the filibuster and allow a simple majority-wins vote on the contentious public plan. Now some senators are joining the party as well.

In a letter to Senate Majority Leader Harry Reid (D-Nev.), four upper-chamber Democrats — Sens. Sherrod Brown (Ohio), Jeff Merkley (Ore.), Kirsten Gillibrand (N.Y.) and Michael Bennet (Colo.) — argue that including the public option would improve not only the Senate’s health reform bill, but also “the public’s perception of it.”

There are four fundamental reasons why we support this approach – its potential for billions of dollars in cost savings; the growing need to increase competition and lower costs for the consumer; the history of using reconciliation for significant pieces of health care legislation; and the continued public support for a public option….

The Senate has an obligation to reform our unworkable health insurance market — both to reduce costs and to give consumers more choices. A strong public option is the best way to deliver on both of these goals, and we urge its consideration under reconciliation rules.

With the pressure increasing on Democrats to reach across the aisle, it’s not likely that Reid would take such a controversial step. Then again, there’s been no indication that the Republicans’ calls for bipartisanship are in any way sincere. And of course, Reid’s slumping popularity in Nevada leaves him with little to lose.

With health care reform on the back burner following Republican Scott Brown’s Senate win in Massachusetts last month, more and more Republicans are predicting that that’s where it will remain unless Democrats agree to scrap the existing bill in favor of something bipartisan. Sen. Charles Grassley (Iowa), senior Republican on the Finance Committee, told reporters today that the chances of returning to health reform “are not very good unless the White House is willing to start over.”

That’s the same message coming from House GOP leaders, who have threatened to boycott the coming White House health care summit unless the Democrats are willing to start anew.

The White House, for its part, has said it’s not willing to start over. The impasse, of course, is the reason that the health summit was called to begin with. That will provide a high-profile forum for each side to make its case. Grassley’s words today, though, only reinforce the growing sense that, on health care reform, the Democrats and Republicans have agreed to disagree.