Thursday, February 11, 2010

The Daily Strike-2/11/10-Another De-Bauc-Le

Good evening and welcome to the Daily Strike. For the first time in a week, I will have work tomorrow. Awesome. I hopefully will be cured of my cabin fever.

JOBS BILL: Midday today, Senate Finance Committee Chairman Max Baucus (D-MT) and Chuck Grassley (R-IA) announced a deal on a bipartisan jobs package. The package was to have included everything in Majority Leader Reid's original package (tax credits for small businesses, money for the Highway Trust Fund, extension of tax credits etc.), but it also would have included some absurd tax cuts to win over Republican members. Among the tax cuts in the compromise agreement were a permanent fix in the estate tax and gift tax. These tax cuts will exclusively benefit the rich and would do absolutely nothing to create jobs. Baucus and Grassley seemed so proud of themselves for creating a bipartisan package, that they didn't quite seem to care what was in the bill.

Luckily this afternoon, Majority Leader Reid (D-NV) announced that the finance committee package will not be the official Senate jobs bill. Instead, Democrats will pursue a scaled-back bill with highway bonds, provisions that make it easier for small businesses to write off expenses, the aforementioned small business tax credits and a one year extension of the highway act. The Senate is expected to take up a separate measure later that will extend expiring tax provisions, COBRA, and unemployment insurance. Senator Reid has filed cloture on the bill. A vote to end debate (subject, of course, to the 60 vote threshold) will take place on Monday, the 22nd.

The question now is whether Reid will get the one Republican vote he needs to move this package forward. In a vacuum, it would seem like a small jobs package focused mostly on tax cuts would gain broad Republican support. Though most commentators ignore the obvious fact: Republicans don't want Democratic efforts to succeed, and they are in absolutely no room to compromise. This will be another one of those times that Democrats will have to grovel at the feet of Olympia Snowe and Susan Collins. If the GOP does oppose this bill en masse, the Democrats need to call them out publicly for opposing a package full of their own ideas.

Meanwhile, even Reid's Senate bill will do far too little to spur job creation. The bill will not contain truly stimulative measures like investments in public works and aid to bankrupt state and local governments. This is yet another sign of how difficult it will be this year to enact any sort of meaningful legislative agenda without using the reconciliation process for almost everything (which Democrats should do!).

ECONOMIC REPORT: The White House has released its official economic report for 2010. The picture is not rosy. The White House is projecting unemployment around 10 percent for the rest of the year without a new jobs package. The White House is even a little bullish on job growth. They are projecting that 95,000 jobs will be created per month during 2010. That would be great, if it were true. The White House also expects the savings rate to increase, which will cause problems with aggregate demand. The White House wants to create more demand with investment in infrastructure and exports. The Senate might get around to addressing these problems....well....never. Ugh.

ELECTIONS UPDATE: Since we last updated, there have been a few more retirements in the House. On the GOP side, Rep. Vern Ehlers (MI) is retiring from his swing district in Michigan. The district went evenly for Obama and McCain in 2008. I'm giving the GOP the advantage, though, in this race considering the district's Republican history and the current political climate. In Florida, Rep. Lincoln Diaz-Balart is retiring from his south Florida district. His brother Mario, a Congressmen in a nearby district, is going to run for his brother's seat. For those of you keeping score at home, that would make Mario Diaz-Balart's district the true open district. These districts are heavily Cuban, and tilt conservative, but with the right candidate, Democrats could potentially be competitive.

On the Democratic side, longtime California Rep. Diane Watson is retiring. She has been a staunch progressive advocated and an anti-war stalwart. She will be missed. Her district went about 90% for Obama, so there's nothing for us to worry about there. We have updated our rankings on the right side of your screen to reflect these changes.

That's it for today. We will be back tomorrow. Ta ta!

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