Friday, May 28, 2010
DADT: It turned out to be a monumental night in the House of Representatives Thursday. The House passed an amendment offered by Iraq War Veteran Patrick Murphy (D-PA) that rescinds the military's "Don't Ask, Don't Tell" policy, effective after the Pentagon finishes its review of the proposed changes. With a similarly positive vote in the Senate Armed Services committee last night, it's looking more and more likely that the policy will be overturned, which is a major victory for the LGBT community.
The vote last night was 234-194. Non-member delegates (from DC, Guam etc.) were allowed to vote since it was an amendment. Every Republican opposed the amendment, except for Reps. Biggert (IL), Cao (LA), Djou (HI), Paul (TX) and Ros-Lehtinen (FL). The only real surprise there is Paul, who as recently as last year was supportive of DADT. Ros-Lehtinen is an otherwise conservative member who has always been supportive of gay rights. Djou cast his first controversial vote in Congress by voting with the Democrats.
Here is the list of Democrats who voted in opposition. It reads like your average Blue Dog roster:
Berry (AR), Bishop (GA), Boucher (VA), Bright (AL), Carney (PA), Childers (MS), Costello (IL), Critz (PA), Davis (TN), Donnelly (IN), Edwards (TX), Etheridge (NC), Gene Green (TX), Lipinski (IL), Marshall (GA), McIntyre (NC), Ortiz (TX), Peterson (MN), Rahall (WV), Ross (AR), Shuler (NC), Skelton (MO), Spratt (SC), Tanner (TN) and Taylor (MS).
The full bill, which authorizes defense programs for next year, passed later today by a vote of 229-186, with 9 Republicans voting yes and 26 Democrats voting no (mostly because of the DADT amendment). The one part of the bill I'm not happy with is additional funding for the unnecessary F-35 fighter jets. Obama has threatened to veto any bill that contains that program, and rightly so. It amazes me that 100 Democrats, many of whom were crying about deficit spending for unemployment benefits, wouldn't vote to cut an expensive, unnecessary defense program.
JOBS BILL: The House was finally able to agree on a jobs bill, though it was drastically scaled down to appease the misplaced worries of deficit hawks. The bill extends expiring tax provisions and unemployment insurance through the end of the year. It also includes the so-called "doc fix." What's extremely unfortunate is that leaders took out expanded Medicaid funding for states, as well as an extension of COBRA health insurance. Critical programs that will give struggling Americans needed security in trying times was cut just to appease some faux deficit hawks. The bill was passed in two parts, by votes of 215-204 and 245-171.
Despite promising that the Senate would stay in session to complete the jobs bill, Majority Leader Reid decided to let members skip town yesterday. This means that unemployment benefits will expire for some at the beginning of next week. Pretty disgusting.
The House also finally passed a bill that funds math and science education, the America COMPETES Act by a vote of 262-150. All no votes came from Republicans. This was the bill that had been held up because of a Republican poison pill porn amendment.
That's it for now, have a great holiday weekend! And see you Tuesday!
Thursday, May 27, 2010
PRESS CONFERENCE: The President held his first open press conference in about 10 months today at the White House. President Obama wanted to show the media and the American people that he is on top of the response to the oil spill in the gulf. The President was adamant that he takes full responsibility for some of the government's missteps, including initially giving too much trust and authority to BP in the aftermath of the disaster. He even tried to insert some emotion into the press conference by saying that he is angered by the spill, and has even talked to his daughter about it. The President also addressed questions on Afghanistan (from Helen Thomas), on the supposed scandal about offering Joe Sestak a job if he would leave the Pennsylvania Senate race, and a variety of other topics.
I still think the President needs to be more forceful in turning this oil spill to force a change in our energy policy. The enemy here isn't necessarily just BP, but rather our addiction to foreign oil. Obama is not drawing the connection, and he should be. Having said that, those who are suggesting that this is "Obama's Katrina," as are many in the mainstream media, are absolutely full of themselves. The difference between this spill and Katrina is that during Katrina, people were starving and dying by the thousands in a major American city while the federal government offered virtually no help. The oil spill is an environmental disaster that shouldn't be minimized, but it is not a Katrina.
DYING JOBS BILL: Democrats in Congress are not doing the people's work, and I believe they will get punished for it. House leaders were unable to corral the votes for even a scaled-down version of a jobs bill that extends expiring tax breaks, as well as unemployment and COBRA insurance. The usual suspects are at play here. The Blue Dog Coalition won't agree to the bill because they're concerned about how much it will add to the deficit. I wrote about this extensively yesterday; I just find that reasoning so shameful.
In the Senate, Majority Leader Reid (D-NV) had said that he would wait for the House to act before the Senate goes on recess. It looks like Reid is abandoning that plan. Senate Democrats instead might try to pass a temporary extension of benefits for the next couple of weeks until Congress returns from its Memorial Day recess. I'll note again that President Obama has made absolutely no push for this measure, which is inexcusable given its policy importance and political importance. He could have drawn a great contrast between those who want to help people hurt by the recession, and those who want to adhere to a strict ideology, but he completely missed that opportunity.
THE SENATE: Despite deficit concerns, the Senate of course was still able to pass an $80 billion war funding measure. Cloture was invoked on the bill today by a vote of 69-29, with "no" votes coming from Republicans and anti-war Democrat Russ Feingold (WI). Prior to a vote on final passage, Democrats were able to beat back three separate Republican amendments to add more National Guard troops to the Arizona border. Democrats also united to defeat a Coburn (OK) amendment that would have required the money to be offset using unused stimulus funds. The vote on that amendment was 45-53, with Democrats Bayh (IN), Kohl (WI), Lincoln (AR), McCaskill (MO) and Nelson (NE) voting yes.
The Senate soundly defeated an amendment that would call for a phased withdrawal from Afghanistan. The amendment, offered by Feingold, only got 18 votes. It seems like Congress by and large is patient with the President's strategy in Afghanistan.
THE HOUSE: The House has spent the day working on the Defense Authorization Bill, which sets policy guidelines for the Pentagon. The big amendment will be the DADT amendment, offered by Rep. Murphy (D-PA). Speaker Pelosi has expressed confidence that the amendment will pass. I expect the vote to occur some time late this evening. Because Republicans are so adamantly opposed to the amendment, I expect them to vote against the bill en masse.
The Senate Armed Services Committee voted 16-12 today to rescind the ban on gays in the military, so it looks like this actually has a chance of happening this year. Every Democrat on the committee voted yes, except for Senator Webb (VA), and every Republican voted no, except for Senator Collins (ME).
That's it for tonight. Call your Congressman and tell them to pass a jobs bill!
Wednesday, May 26, 2010
JOBS BILL: House Democrats had to postpone consideration of a large jobs measure because of concerns from members of their own caucus. As you know, the bill contains a package of extensions to expiring tax cuts, plus extensions to unemployment and COBRA, safety net programs which have been proven to be stimulative. Conservative Democrats in the House are upset because even though part of the bill is paid for by new fees on financial transactions (which is great), much of the spending will increase the federal deficit. These deficit fears are fundamentally misguided and wrong, and it's painful to see in the Democratic party.
First of all, the best way to decrease the deficit is to get the economy moving, get people working, and get tax dollars flowing to all levels of government. We can only do that if we add demand into the economy, which this bill does. Second of all, opposing this bill is a massive political loser. People may say they care about the deficit, but concerns about the deficit really are underlying concerns about the economy and jobs. Do Democrats really think that if they allow people's unemployment benefits to expire, they'll be ok with it because the deficit went down .0001%? I don't think so.
This is a failure of leadership from every corner of the Democratic party. The President has not been forceful in explaining why we need to continue using fiscal policy to sustain our recovery. He has not publicly advocated for this bill at all. House and Senate Democrats are playing chicken with each other because they aren't sure if the other chamber will go along with whatever passes. Somebody has to show some leadership and get this bill passed before next week, when benefits will run out for millions of Americans.
As a result of the delay on this bill, there was little action on the floor of either the House or Senate today. The House just dealt with a few suspension bills, while the Senate debated a separate war funding bill. Speaking of that war funding bill, the Obama White House has sent frustratingly mixed signals as to whether they support attaching emergency funding for teachers to the bill. Yet another issue on which I think President Obama needs to show a little courage and resolve.
DADT: There haven't been any votes in Congress yet this week on whether to overturn the military's Don't Ask, Don't Tell policy. But we did get some good news today, as Senator Ben Nelson (D-NE), hardly anyone's favorite progressive, came out in favor of the compromise proposal to undue the 17 year old law. His vote could be key to insuring the repeal's inclusion in this year's Defense Authorization Bill, which will hit the House floor tomorrow.
That's it for today, we'll see you again tomorrow!
Tuesday, May 25, 2010
MEETING: Today, President Obama met with the Senate Republican Conference to discuss areas they can work together in the coming year. It seems like the meeting got pretty contentious. Republican Senator Bob Corker (TN) apparently confronted Obama for preaching about bipartisanship while undercutting bipartisan negotiations on financial reform. To Obama's credit, I think Corker has a point. The Democrats abandoned broad bipartisan negotiations in order to make the bill stronger. Of course, it's still not strong enough, but it's better than it would have been if we had watered it down for the likes of Bob Corker. Obama also asked for Republicans' help in passing a supplemental war funding bill this week. On this measure, I expect him to get some support.
I think the relationship between Obama and Senate Republicans is a lost cause, and thus it doesn't make sense for Obama to attempt any outreach. He has been rebuffed too many times. While he still has large Democratic majorities, he should focus on governing.
LEGISLATIVE WRANGLING: There wasn't much action on the floors of either House of Congress today, though negotiations/bickering on a couple of issues ensued. Democrats and the administration announced a deal that would allow for a near repeal of Don't Ask, Don't Tell as part of this year's Defense Authorization Bill. The Pentagon signed off on the compromise, even though it is currently conducting a "study" on the matter. Democrats picked up the support of GOP Senator Susan Collins (ME) today, but they still probably aren't close to 60 votes that they'd need to advance the amendment in the Senate.
On the seemingly never-ending oil spill in the gulf, President Obama is amping up the pressure on BP, and the Republicans are trying to lay the blame on Obama. Senate Democrats have tried numerous times to pass a bill that would raise the liability cap for BP, but Republicans have, as I would have expected, every single time.
And on the issue of immigration, the President announced today that he will send an additional 1,200 national guard troops to protect the border in Arizona. This was met with tepid approval by Republicans, who demanded that Obama send even more troops. Apparently, John McCain was especially testy on this issue during the Obama/Republican luncheon. I'm sure it has nothing to do with his primary challenge from former Rep. J.D. Hayworth.
ON THE FLOOR: On the Senate floor, Majority Leader Reid (D-NV) has filed cloture on the emergency war funding bill. There are several amendments pending, and many of them will get votes in the next couple of days. Some of them deal with contentious issues like secret holds, border security and a drawdown of U.S. troops in Afghanistan. We'll keep an eye on amendment votes.
Over in the House, it was just suspension bills today. They'll start their busy legislative week in earnest tomorrow.
That's it for now, leave comments!
Monday, May 24, 2010
THE SENATE: The Senate took a couple final votes today on non-binding "Motions to Instruct Conferees" in the financial regulation bill. These suggestions won't actually influence conference negotiations on the bill, but they are an opportunity for Senators to register views on various issues.
The first vote was on a motion offered by Senator Hutchison (R-TX) would protect the military from new rules on proprietary trading. Not a lot of people vote against the military, so the motion passed 87-4. Only Democrats Cantwell (WA), Feingold (WI), Independent Sanders (VT) and Republican Bunning (R-KY) voted no.
Next was a motion from Senator Brownback that would exempt auto companies from some of the regulations in this bill. I'm sympathetic to the auto industry, but it's a slipper slope before we start allowing exemptions for all kinds of industries. The motion carried 60-30, with all no votes coming from Democrats.
That's it for now, we'll see you tomorrow.
BUSY WEEK IN CONGRESS: This is going to be a busy week in Congress, and the issues debated will be contentious, and at points, bitterly ideological. Before next week's Memorial Day recess, Congress must deal with two spending bills. The first will fund continuing operations in Iraq and Afghanistan. Liberal Democrats, in the House especially, do not want to vote for this (rightly, of course). This means that Speaker Pelosi and Majority Leader Reid will need to get some significant Republican support. This could be difficult though, because the administration has requested funding for laid off teachers to be attached to the war spending bill. I'm not entirely sure where the votes would be for both of those items, quite frankly. The bill will start in the United States Senate, where the teacher funding will be debated as an amendment. Sources say that the amendment has no chance of passing. Of COURSE it is ok to funnel billions of dollars a year to never-ending wars, but not ok to prevent massive layoffs to teachers that will destroy this country's future.
There's also the question of whether to pay for the war funding. Most members think it is acceptable to pay for wars through deficit spending, though fiscal hawks like Senator Coburn (R-OK) will try to find ways to pay for the bill. I don't anticipate any of his ideas passing muster with the full Senate, but he could be successful at delaying the process to the end of the week. When all is said and done, I expect the war funding to be approved by both Houses in the Friday/Saturday range.
Before the Senate takes up the war funding bill, they'll vote on some non-binding motions to instruct conferees on the recently passed financial reform measure. We'll have more details on those motions this evening.
The House will have its busiest work week in months, even before they get to the war funding measure. After suspension bills today and tomorrow, the House will take up amendments to a Senate-passed bill that extends expiring tax breaks and unemployment/COBRA benefits through the end of the year. The bill also includes a 5 year "doc fix" that will fix payment rates to Medicare physicians. The bill will probably pass by a very narrow margin, because many House Democrats have deficit-itis and don't want to vote even for crucial safety net measures if it is not paid for. Only part of the bill is paid for, most of it is designated as "emergency spending." I'm fairly certain that every Republican will oppose this measure. If Democrats had any political courage, they would chastise Republicans for cutting off your unemployment insurance during a recession. But I bet most of the conversation this week instead will be about how much this bill adds to the deficit. I hope and pray that the Senate takes up the bill before the end of the week, but I'm afraid it might wait to weigh in until after the Memorial Day recess.
Next up for the House will be the Defense Authorization bill, which will set policies for the Pentagon in Fiscal Year 2011. Isn't there some defense policy that is particularly controversial? Oh yes, the gays! Democrat Patrick Murphy (D-PA) will try to include an amendment to repeal the 1993 Don't Ask, Don't Tell policy when this bill comes up for a vote. I'm not sure whether Murphy, an Iraq war veteran, will have the votes, but I sure hope he does. It would help if the administration was more supportive of the effort to repeal DADT, but instead they've been sending mixed signals.
The House will also try go vote on a stalled bill that authorizes funding for science and math education. The bill has been held up because Republicans have tried to include an unrelated "porn" amendment. If the House is waiting around for the Senate to finish its work, it may even take up the DISCLOSE Act, which would put new regulations on campaign spending. The DISCLOSE Act is a response to this year's Supreme Court decision in Citizens United.
We'll keep you up-to-date on these important pieces of legislation. The House will also swear in its newest member this week. Charles Djou, a Republican, was elected to finish the term of Rep. Neil Abercrombie in Hawaii's 1st District. Djou only got 39% of the vote, but because there was no primary election, he was up against two opponents who split the Democratic vote. There are now 432 members of the House, with vacancies in New York (Massa, the tickler), Georgia (where Nathan Deal is running for Governor) and Indiana (Souder, the philanderer). With Djou's victory, the Republicans now control 177 seats, the Democrats 255.
The President will be keeping an eye on this legislative action, though today he is holding a series of meetings relating to the aftermath of the BP oil spill.
That's it for now, see you tonight!
Thursday, May 20, 2010
FINANCIAL REFORM: President Obama is on the verge of another major policy accomplishment. This evening, the Senate passed by a vote of 59-39 a relatively strong Wall Street reform bill. A conference with the House is expected to take place in the next few weeks, and insiders say that Obama should get a bill to his desk by July 4th.
The most important vote, to cut off debate on the bill, took place this afternoon. After yesterday's vote, Senator Reid was two votes shy of invoking cloture. Senator Specter was absent, so his presence today brought leaders one step closer. The final vote came from a most unlikely source: new Republican Senator Scott Brown (MA). Brown had previously indicated to Reid that he would support cutting off debate, but then he voted against the Majority Leader at the last second. Brown's concerns were apparently assuaged before today's vote. Just like yesterday, two liberal Democrats voted against cloture: Senators Feingold (WI) and Cantwell (WA).
Unlike previous legislation, this bill has gotten stronger through the amendment process. I'm not happy that it doesn't have a consumer protection agency independent of the Federal Reserve. I also am unhappy that it won't include the most ambitious amendments, like the Volcker rule (Merkley-Levin hasn't yet come up for a vote) or a full reinstatement of Glass-Stegall restrictions. But like other pieces of legislation passed during the Obama presidency, it marks a giant step forward in reigning in the excesses of the financial industry, when all government has done in the past 30 years is propagate those excesses. Perhaps what makes me most pleased is that, for once, lobbyists for the financial industry are not happy. Their unhappiness brings me immense joy.
As with most pieces of legislation these days, I expect the final package to look a lot more like what the Senate just passed than what the House approved last December. That means, for instance, no independent Consumer Protection Agency, but stronger regulation of derivatives.
The Senate will now move on to consider an emergency bill to fund the wars in Iraq and Afghanistan. Obama had promised that he would include money for the wars in his regular budget, but that didn't happen, so this money still gets the "emergency" designation. As a result, the spending is not paid for. This should cause a problem with fiscal hawks like Senator Coburn (R-OK), who is planning to filibuster the bill. I also expect some opposition from the anti-war left (Senator Feingold, I'm sure). I expect the bill to pass some time next week with 65-70 votes.
RAND PAUL: Rand Paul, son of libertarian icon Ron Paul and Kentucky GOP Senate nominee, has gotten himself into some serious trouble. He has said to several sources, including MSNBC's Rachel Maddow, that he does not support the part of the Civil Rights Act that bans discrimination in private businesses. It may be morally reprehensible to segregate lunch counters, Paul argues, but it shouldn't be illegal, because the government shouldn't decide what private businesses can or can't do.
A lot of people have reacted to this article by saying that Paul is not racist, he's just an ideologically rigid libertarian. I'm not sure the latter is better than the former. If you are so rigid in your ideology that you think it's ok to turn blacks away from businesses, you are morally reprehensible, period. The best piece on saw on this today was from Adam Serwer at The Americna Prospect. Paul is living in this libertarian fantasy world, where racism will magically be solved through market forces. Rand Paul will stop shopping at racist places, so they'll have to let blacks in, right? That's an interesting theory, but unfortunately it's contradicted by American history. As Serwer said, it didn't work, and it won't work.
I also think Democrats should take Paul's assertion to their logical extensions. Does he believe businesses should be able to employ child labor? Does he believe in workplace safety laws? Does he believe you should be able to be fired for any reason? I hope Democrats take this opportunity to expose once and for all the idiocy of economic libertarianism.
That's it for today. I'm moving this weekend, so I'll see you from Baltimore next week!
Wednesday, May 19, 2010
FINANCIAL REFORM: The Senate today took a vote on whether to limit debate on the Wall Street Reform bill. The vote was 57-42, three votes short of the 60 it needed to advance. Majority Leader Reid (D-NV) voted no for procedural reasons (so he could bring up the motion again tomorrow), and Arlen Specter missed the vote after last night's election, so Democrats remain two votes shy. Two Republicans, Senators Snowe (ME) and Collins (ME), voted to end debate. The problem was that two generally liberal, but often renegade Democrats, voted no. Russ Feingold (WI) said that the bill did not pass the test of whether it would prevent another financial collapse. I agree with him on this point, but to me that's not reason enough to filibuster the bill. It would still be the most significant overhaul of our financial sector since the New Deal Era. Maria Cantwell (WA) voted no for a couple of reasons. For one, Democrats have so far refused to allow a vote on her amendment to reinstate Glass-Stegall restrictions (which I support). She also apparently doesn't think the derivatives language goes far enough.
Again, I'm sympathetic to those who think the bill doesn't go far enough. In fact, Senators Dodd (CT) and Reid (NV) have frequently rebuffed Democratic efforts to strengthen the bill. On the other hand, delaying passage of the bill won't likely make it any better, in my view. (The Big Picture disagrees, and cites this article as evidence). I also have sympathy for party leaders who are responsible for getting legislation through in a timely manner.
Majority Leader Reid has scheduled a re-vote for tomorrow afternoon. My guess is that he will offer Maria Cantwell some sort of deal to get her on board (maybe a vote on her amendment). If he doesn't succeed, he'll have to pry away another Republican. He claims that Senator Brown (MA) told him that he would support cloture, but withdrew his support at the last minute.
The Senate did take a couple of other votes on amendments today. A good amendment offered by Senator Whitehouse (D-RI), which would have closed a loophole that allows credit card companies to avoid state interest rate caps, failed by a vote of 35-60. Chalk up another win for the big banks. I don't understand how any self-respecting Democrat can vote against that amendment.
Should the Senate vote to cut off debate tomorrow, the Senate would proceed to vote on amendments on Friday and possibly over the weekend. A vote on final passage would most likely happen early next week. The Senate still needs to pass a war funding bill by the Memorial Day recess, so they need to keep the ball rolling.
THE HOUSE: House Democrats failed to hold their own members in line when Republicans offered a poison pill porn-related amendment to a science investment bill last week. Democrats decided to try again with the bill, this time under suspension of the rules so that Republicans couldn't offer amendments. Of course, under suspension of the rules, a 2/3rds majority is necessary. The vote was 261-148, about 29 votes short. Only 15 Republicans supported a deficit-neutral increase in investments in science and math education. Democrats will have to find another way to pass this bill in the next couple of weeks. Tomorrow, they'll take up a bill full of tax break and unemployment insurance extensions. We'll have full details in tomorrow night's entry.
ELECTION DAY: It turned out to be quite an election night last night, and an overall very solid night for Democrats. In Kentucky, Ron Paul's son Rand won the Republican nomination in the election to replace retiring Republican Jim Bunning. Rand Paul is sort of a nut, so his nomination gives the Democrats a decent chance to capture a Republican-held seat. For example, today Paul insisted that he would have voted against the 1964 Civil Rights Act. His die hard libertarian views, including some that may not mesh well with Kentucky's social conservatives (pot legalization!), could make this race winnable for the Democratic nominee, Attorney General Jack Conway.
In Pennsylvania, Joe Sestak won a resounding victory of incumbent party-switching Democrat Arlen Specter. Congressman Sestak did a very effective job reminding voters about Specter's Republican past, and he was buoyed by strong support among grassroots progressives. I think Sestak will be a more competitive candidate this fall against Republican nominee Pat Toomey.
Perhaps the best and most surprising result of the night came in the special election in Western Pennsylvania to replace the late Jack Murtha. Democrat Mark Critz, who polls showed was in a close race with Republican Tim Burns, cruised to a 12 point victory, and will take his seat in Congress tomorrow. As we noted yesterday, Democrats had no business winning this seat in the current political environment. This was the only district that voted for John Kerry in 2004 and John McCain in 2008. It is largely made up of older, white voters, and President Obama is polling very poorly there. If Republicans can't win an open seat like this, they will have a hard time winning the majority in November. Yes, Critz did run against many important Democratic policies, but his victory helps dispel the media narrative that the GOP is destined for a massive landslide in the midterm elections.
I'm also very pleased that Lt. Governor Bill Halter has pushed incumbent Senator Blanche Lincoln into a run-off in Arkansas' Senate primary. No doubt some of Halter's support came from right-wingers who wanted to express disapproval of Lincoln, but a large segment of his support comes from organized labor, who was rightly outraged that Lincoln abandoned Democratic positions on the Employee Free Choice Act and the public option. Also, Halter's success will force Lincoln to keep tailoring her policy positions to the Democratic primary electorate, at least for the next few weeks. As a direct result of last night's election, Lincoln's strong language regulating financial derivatives survived in the Wall Street reform bill.
That's it for tonight. Leave us your thoughts on Wall Street reform or last night's elections!
Tuesday, May 18, 2010
FINANCIAL REGULATIONS: A lot to report today on the Wall Street reform bill as we countdown to a cloture vote either tomorrow or Thursday. Democrats removed a key barrier to passage today by coming up with an agreement to basically prohibit State Attorney Generals from enacting regulations stronger than those done at the federal level. The agreement was negotiated by moderate Democrat Tom Carper (D-DE). This is a big disappointment, as states could have been the laboratories for aggressive crackdowns on the worst financial practices. The Carper amendment passed by a vote of 80-18. "No" votes all came from Democrats. A GOP alternative to the Carper amendment failed by 43-55.
The only other amendment considered on the floor today was from Senator Gregg (R-NH) and it would have prohibited more bailouts to "irresponsible state governments." Give me a break. If Gregg weren't a pea-brain, he'd realize that most states aren't "irresponsible" but rather are lacking in tax revenue because of the Republican recession. As a result, millions of teachers and firefighters (not exactly faceless bureaucrats) have been laid off. Thankfully, the Gregg amendment failed by a vote of 47-50 (60 votes were needed). It's too bad that the following Democrats voted for this piece of you know what: Baucus (MT), Bayh (IN), Feingold (WI), McCaskill (MO), Shaheen (NH) and Tester (MT).
Republicans seem to believe that they no longer have the votes to block the bill. Instead, their new strategy is to defeat Democratic attempts to make the bill stronger. Republicans have objected requests to consider some very progressive amendments. Senators Levin (MI) and Merkley (OR) have offered an amendment to enact the so-called Volcker rule. Senator Dorgan (ND) has offered an amendment to ban naked credit default swaps, and was able to get a vote for it only after some procedural wrangling (ask me about it if you're interested!). The sponsors of these amendments have hinted that they may not support cloture unless their amendments receive votes. I don't take these threats too seriously, but it's one obstacle Majority Leader Reid (NV) must jump through before he can get final passage.
In other news, President Obama was in Youngstown, OH to tout recent economic progress, and the House spent the day on suspension bills. We'll see you tomorrow with Financial Regulation and Election updates!
FINANCIAL REGULATION: The Senate is in the home stretch of its consideration of the Wall Street reform bill. Last night, Majority Leader Reid (D-NV) filed cloture on the bill, meaning a vote to cut off debate will come Wednesday. A vote on final passage could happen by the end of the week. It looks as though there will be more than enough votes to get this bill across the finish line. When all is said and done, I expect the bill to pass with about 65 votes.
Unlike every other major bill considered during the Obama Presidency, the amendment process seems to have made the bill stronger, not weaker. For example, last week, the Senate surprisingly approved an amendment from Senator Durbin (D-IL) to limit fees for ATM cards. The Senate will take up several more amendments before consideration of the bill wraps up. Among the key amendments left is one offered by Senator McCain (R-AZ) and Cantwell (D-WA) that would re-institute Glass-Stegall separation of banks and other financial institutions. I would be pleasantly shocked if that passed. We'll keep you posted on the amendments, but you can get a run down of what we missed last week by checking out the Senate website.
This bill would be a solid first step in reigning in the excesses of our financial system, though it does not do enough. It puts regulatory authority in the same hands of those who oversaw the crisis in 2008, and it does not fundamentally change the shape of our troubled financial sector.
Nevertheless, it's seeming more and more likely that President Obama will have another notch on his belt in the next few weeks.
THE HOUSE: The House has a relatively busy schedule this week as well. Starting yesterday, they began debate on a series of suspension bills. Tomorrow, the House will take up a key Senate-passed measure that extends expiring tax breaks, unemployment insurance, and COBRA coverage through the end of this year. The House is amending the package, but I'm not sure yet what they're changing. It's possible that they've found a way to pay for these extensions, though doing so would be ill-advised in my view.
The House will also complete consideration of the American Competes Reauthorization Act, a bill that provides research and development funding for Math and Science. The bill hit a snag last week when Democrats couldn't beat back a Republican poison-pill amendment dealing with pornography. I really wish rank-and-file Democrats would be more disciplined on these procedural votes.
ELECTION DAY: Today is Election Day in three states, and there are several key races to watch. The only Republican/Democrat contest of the day comes in Pennsylvania's 12th District, where Democrat Mark Critz and Republican Tim Burns are vying to replace the late John Murtha. Polls show the race to be dead even, so we could be in for a long election night. By all measures, Democrats have no business winning this seat in the current political environment. The district is the only one in the country that voted for John Kerry in 2004, and John McCain in 2008. But Critz has proven to be a relatively strong candidate.
There are also huge Senate primaries in three states. In Pennsylvania, incumbent party-switcher Arlen Specter is locked in a tight race with Congressman Joe Sestak for the Democratic Senate nomination. Polls show Sestak surging, but Specter could benefit from large turnout among unions and the ill-advised endorsement from President Obama. If I had to put money on it, I'd say that Sestak pulls it out. I really hope that Specter keeps up his liberal streak even if he loses his primary race.
In Arkansas, incumbent Blanche Lincoln is locked in a tight battle with Lt. Governor Bill Halter for the Democratic nomination. Lincoln is favored mostly due to the incumbency factor, but Halter has a shot if he can get high turnout among the few liberal voters that exist in Arkansas. Lincoln's primary challenge has pushed her to the left over the past few weeks. She authored very strong regulations of derivatives that have somehow made it through the Senate so far unscathed. The Republican nomination to face Lincoln (or Halter) features a large slew of candidates, and is most likely headed for a run-off.
In Kentucky, Democrats will choose between Lt. Governor Dan Mongiardo and State Attorney General Jack Conway. Conway seems like a better choice to me; he has more progressive policy views, but Mongiardo has taken a small lead in recent polls. On the Republican side, it looks like Ron Paul's son Rand will destroy his Republican establishment opponent, Secretary of State Trey Grayson.
We will keep you informed of what happens this evening! Leave us some comments.
Tuesday, May 11, 2010
1. Across the pond in Britain, David Cameron, the leader of the Conservatives, will become the next Prime Minister. His party didn't win a majority, so they will have to govern with the center-left Liberal Democrats. I suspect that Cameron and Obama are actually pretty similar ideologically (isn't that kinda sad?) and that they'll get along very well.
2. Two incumbent members of Congress have lost primary elections in the last couple of days, another sign of the massive anti-incumbent mood in the electorate right now. In Utah, Senator Robert Bennett (R-UT) lost in his party's state convention, a bizarre process in which the nominee is chosen by Republican activists. Apparently, Bennett is too liberal because he voted for TARP and supported eliminating Medicaid and the employer tax benefit in his health care plan.
Tonight, incumbent Democratic Rep. Alan Mollohan lost to state Senator Mike Oliverio in West Virginia. Mollohan was attacked by his Democratic opponent for supporting the health care bill and not being steadfast enough in opposition to Cap-and-Trade, which is lethal politically in coal-rich West Virginia. That's not the type of primary defeat I'm too thrilled about.
3. The financial reform bill is moving along in the Senate. Bernie Sanders' amendment to audit the Federal Reserve ended up passing unanimously, which is very interesting. Democrats were also succesful in beating a McCain amendment to include reform of Fannie Mae and Freddie Mac.
That's it for now, I will go back to enjoying the sights of Vancouver. See you later!
Sunday, May 9, 2010
a) she seems to be a believer in strong executive power, which as we saw in the Bush administration, can be extremely detrimental to democracy.
b) She did some consulting work for Goldman Sachs. Not only is that politically toxic right now, but I don't want someone on the Supreme Court who would potentially side with a business like Goldman Sachs over the millions of average Americans that they have defrauded.
Liberals will probably end up accepting her nomination in the end. But I will note that it's very possible her pick will move the court to the right.
Thursday, May 6, 2010
LATE BREAKING UPDATE: It looks like the Brown-Kaufman amendment to break up the banks has failed by a vote of 33-61, a major disappointment. No word on the vote tally yet. I had no idea they would be voting on this tonight when I wrote this entry. Very, very unfortunate.
FINANCIAL REGULATION: Wall Street went into a bit of a tailspin today, at one point the Dow was down nearly 1,000 points, though it later recovered. Some blame this on a computer glitch, while others attribute it to factors in Europe like the debt crisis. No matter what the cause, today's big losses are a reminder that our economy is still extraordinarily fragile, and that we need to keep pushing reforms to protect our financial system.
Luckily, the Senate is making some progress on that front. The Senate took two votes on amendments today. The first, offered by Senator Tester (D-MT), sought to change the definition that corporations use for "assessments." Not really sure what that will do, but it passed by a vote of 98-0.
Next, the Senate rejected the Republican alternative to the Consumer Financial Protection Agency. Offered by Senator Shelby (R-AL), the alternative would limit the power and scope of the agency. The White House and Democratic leaders denounced the plan as being even worse than the status quo. The amendment failed by a vote of 38-61. Every Democrat opposed the alternative, as did Republicans Grassley (IA) and Snowe (ME). I'm pretty surprised that Grassley crossed the aisle, though he did so last month when he supported Senator Lincoln's derivatives measure.
Almost as important as the amendments considered on the floor today were the announcements of amendments to be voted upon early next week. The amendment by Senator Sanders (I-VT) to audit the Federal Reserve got a boost today when Senator Dodd (D-CT) announced his support. Dodd had secured a change to the amendment that he said would protect the independence of the Fed. The other very encouraging news today is that Senator Reid (D-NV) will most likely allow a vote on the Brown-Kaufmann amendment that would cap the size of the big banks. Reid even indicated that he would vote for the amendment himself. Reid's vote probably hinges on how strongly the administration comes out in opposition to the amendment. I'm holding out hope that Obama sees the light some time in the next week, but I'm not holding my breath.
More amendment votes will take place starting Tuesday. Of course the United States Senate can take a 4 day weekend during a long-winded debate on a critical issue. In fact, today Majority Whip Durbin (IL) said that he doesn't think they can finish the bill by next Friday.
THE HOUSE: The House was busy today considering a bill that would provide cash rebates to people who weatherize their homes. This important piece of legislation passed by a vote of 246-161. 7 Democrats voted against the measure (for reasons entirely unclear to me), and 12 brave Republicans voted for it. The bill will surely die on arrival in the United States Senate, but I'm glad the House had a chance to take it up. Perhaps the bill can be included in a broader energy bill later this year.
The House also approved a Republican motion to recommit that seeks to assure that the bill will not add to the federal deficit. The motion passed by a wide margin of 346-68.
And a quick update before we go on the General Election in Great Britain. Exit Polls show that the Conservative Party will win a plurality of seats in the parliament, but probably not enough to ensure a majority. This should create some very interesting negotiations. Stay tuned.
See you next week!
Wednesday, May 5, 2010
The second problem, again in Krugman’s words:
“The reforms currently on the table . . . only deal with part of the problem: they would make finance safer, but they might not make it smaller. . . .
“We’ve been devoting far too large a share of our wealth, far too much of the nation’s talent, to the business of devising and peddling complex financial schemes — schemes that have a tendency to blow up the economy.”
This is the long-term challenge (see my charts here). Finance is an intermediate input. At the margin, every little innovation that makes markets more liquid does provide a small benefit to the economy in the form of better capital allocation; but in many cases those benefits are not enough to justify their transaction costs, let alone the negative systemic externalities we saw recently. The flowering of finance in the past three decades gave us the illusion of growing real GDP — especially in the past decade, when GDP growth was dominated by finance and real estate. Now we need to rebalance the economy toward productive activities.
The bad news is that the administration and Democrats in Congress will face a strong temptation to pass the reform bill and declare victory. The conventional wisdom is that you don’t get re-elected by saying, “We passed a bill that is pretty good, but doesn’t solve the root problems, so we need to do more in the future.” It’s better politically to say you fixed the problem once and for all, then cross your fingers and hope for the best.
The good news is that there seems to be a growing number of voices saying that we need structural change in the financial sector. Besides Krugman and Arianna Huffington, Martin Wolf has chimed in as well, arguing that making the current system safer, though necessary, is insufficient:
“The financial system would remain a doomsday machine. There are three difficulties. First, there is no sound basis for deciding how much capital is enough. Second, . . . it is profitable to take risks whose upside accrues to oneself and whose downside accrues to others. So the safer regulators try to make the system, the more risk it can take on. Finally, it is easy to create the desired risk via regulatory arbitrage.”
Serious academic economics is also questioning the value of a large financial system. A paper byNicola Gennaioli, Andrei Shleifer, and Robert Vishny (cited by Krugman here) shows how excessive production of securities (the phenomenon of the past decade) can be caused by mistakes in risk perception, making the financial system more fragile as a result. (As a another result, the social benefits of innovation can be outweighed by the social costs.)
So in the long term, I agree with Krugman: “These [current] reforms should be only the first step. We also need to cut finance down to size.” Given that whatever comes out of Congress will be imperfect in anyone’s eyes, whether the Obama administration agrees will be of crucial importance."
The problem is that based on appointments and decisions I have no confidence that Obama is anywhere close to the right side on this issue. And the people and institutions that destroyed security and opportunity for most Americans, stealing it to finance their lavish lifestyle, getting bailed out while everyone else suffered, will continue to keep their wealth and power. Neither political party will do anything about it. The answer is to move the Democratic Party to the left so that it actually stands for doing something. That's the right move substantively, and it's the only way to avoid crushing defeats in the midterm. But too many Democrats are so caught up in the Wall Street Knows Best worldview, as well as the high-paying jobs in the finance sector that await them, that they won't do what's right on the merits or politically. We can bemoan this, or we can make them see the light, through organizing, primary campaigns, and advocacy.
THE SENATE: The Senate finally began consideration of amendments to the Financial Regulation bill, after a week and a half of stalling and obstruction. Republicans refused to allow votes on amendments, even when offered a chance to subject those votes to a 60 vote threshold. If Democrats wanted to vote on amendments, they'd have to invoke cloture, which would take 60 votes and three days worth of time, per amendment. Republicans finally allowed for the consideration of a few amendments after a deal was struck early in the day between the top Democrat on the Banking Committee, Chris Dodd (CT), and the top Republican Richard Shelby (AL). Dodd agreed to remove the provision that would have set up a liquidation fund, paid for by big financial institutions, that would unwind firms that were "too big to fail." That provision has been taken out, though at this point it is unclear what the replacement provision is.
As part of the agrement, Republicans allowed votes on two Obama administration nominees and two amendments. The two nominees (Gloria Navarro of Nevada, and Nancy Freudenthal to be District Judges in Nevada and Wyoming respectively) each were confirmed overwhelmingly. Navarro's vote was unanimous, while Freudenthal's was opposed only by Senator Coburn (R-OK).
The Senate then voted on the first amendment to the bill, offered by Senator Boxer (CA). The amendment clarifies that the bill does not provide for taxpayer bailouts. The amendment doesn't really have any substantive effect. Rather, it gives Democrats the ability to refute the bogus Republican charge that the bill is one giant "taxpayer bailout." The Boxer amendment passed by a vote of 96-1, with only Senator Kyl (R-AZ) voting no (not sure what that's about). The Shelby-Dodd agreement we alluded to above passed by a margin of 93-5, with Senators Coburn (R-OK), Cornyn (R-TX), DeMint (R-SC), Dorgan (D-ND), and Hatch (R-UT).
There are no further amendment votes scheduled at this point. The two most contentious amendments may not get votes at all. An amendment offered by the odd duo of Senator Sanders (I-VT) and DeMint (R-SC) would call for an audit of the Federal Reserve. I agree generally that we should know how the Fed is pumping money into the economy, but I am afraid that the amendment seeks to undermine the independence of the Federal Reserve, which is crucial to monetary stability. I'm conflicted on this one.
I'm not conflicted on the other contentious amendment. Senators Brown (OH) and Kaufman (DE) still intend to offer the SAFE Banking Act as an amendment, which would limit the size of financial institutions. In what has been a major disappointment, the Obama administration has opposed this amendment behind the scenes. I guess they believe that the size of banks was not the main culprit in the financial crisis. I disagree. This amendment would assure that the fate of the economy would no longer be in the hands of a few firms that make a bunch of risky bets.
Hopefully we'll see votes on these amendments in the next couple of days.
THE HOUSE: The House just dealt with suspension bills today. Tomorrow, they'll consider the "Cash for Caulkers" bill that will authorize reimbursements to families who weatherize their homes.
We did get some sad news out of the House today. Rep. David Obey, a liberal stalwart who has been in the House since 1969, announced his unexpected retirement. Obey is the powerful chairman of the House Appropriations committee. His retirement opens up another potentially competitive seat, especially since the Republicans have already found a viable challenger. Obey was always on the right side of the issues. He was a passionate advocate for shrinking the massive gap between the rich and poor in our society, for campaign finance reform, and for investing money in critical areas underfunded by Republican administrations and Congresses. He will be missed.
That's it for today. See you tomorrow evening!
Tuesday, May 4, 2010
Monday, May 3, 2010
ACROSS THE POND: We thought our elections were interesting, but the one about to take place across the Atlantic Ocean looks like it will be a barn-burner.
First, the basics. Britain is a constitutional monarchy, with most government powers vested in the House of Commons, which has 650 seats. Voters will elect individual members in their constituencies (equivalent to our Congressional districts). If one party gains a majority, it will form a government. The executive powers of government are vested in Ministers, which are usually Members of Parliament (MPs) of the ruling party. The parties that do not finish first make up the opposition.
Currently, the ruling center-left Labor party controls 356 seats, the Conservative Party (the Tories) control 198 seats, and the left-leaning, libertarian-ish Liberal Democrats control 62 seats. The last election was held in 2005.
Labor has been in control of government since 1997, so it would seem only natural that voters would be ready for a change. Polls over the past few years have showed Conservatives generally ahead of their Labor counterparts. A few weeks ago, it looked likely that Conservatives would win perhaps a small majority in the next parliament.
But recently, the Liberal Democrats, led by Nick Clegg, have surged in the polls. They now come in a close second to the Tories in most polls, ahead of the Labor party. Clegg was boosted by a strong performance in American-style national debates, and by his outsider status. Much like the U.S., Britain seems somewhat fed up with the two major parties.
The current Prime Minister Gordon Brown further jeopardized Labor's status with an enormous gaffe last week, when he was caught calling a supporter "a bigoted woman" on a hot mic. Brown has never faced election as a party leader (Tony Blair was still in office in 2005) and he is anything but a charismatic politician. He has tried to gain traction by portraying his opponents, especially Conservative Party leader David Cameron, as risky bets during tough economic times, and ongoing wars in Iraq and Afghanistan.
The complicated thing about this election is that, much like the U.S., the national popular vote is not entirely indicative of the next parliament. Results in individual constituencies can vary greatly from the national result, meaning that conceivably a party could gain a majority in parliament while not getting the most votes. Unlike the U.S., however, voters generally vote for individual candidates based on their party affiliation. It seems like there is much less "personality driven" voting in Great Britain. That usually means that the advantages of incumbency (constituent services etc.) are not as prevalent.
So what will happen on Thursday? Nobody really knows. Nate Silver, using some complicated formula that I won't even begin to understand, projects that the Conservatives will win 299, 27 short of a majority. He projects the Labor Party winning 199 seats, and the Liberal Democrats winning 120. This seems to represent the consensus of most analysts that the Conservatives will win a plurality of seats, but will come up just short of a majority. If no party gains a majority, there will be a "hung parliament."
British tradition dictates that no matter who has a plurality of votes in a hung parliament, the current ruling party (Labor, in this case), has the first opportunity to try and form a majority. Labor would have to convince pretty much every Liberal Democrat, most likely, to merge and create a coalition government. I don't see this happening. There is a good deal of animosity between the two parties. Labor also would not want the Liberal Democrats to have a role in government, because they fear that Liberal Democratic ministers may undermine the broader Labor agenda. Both parties fear that if the Liberal Democrats join the government, they will push for institutional reforms that would make it easier for third parties to gain greater representation in parliament (like proportional representation).
Could Conservatives team up with Liberal Democrats to form a government? Also unlikely, since the two parties' agendas are so diametrically opposed. Most likely, therefore, is that the Conservatives will form a "minority government." A minority government is highly unstable, because a majority of the parliament could both block legislation and vote to dissolve the parliament. Perhaps the conservatives would be content with a minority government for a short time to highlight differences between the parties, so that they could then hold new elections promptly, and try again to achieve a majority.
Pretty complicated stuff, but fear not. I will do my best to explain it further if any of you all have questions.
What does this all mean for the United States? The Liberal Democrats are thought of as the least pro-U.S. of the major parties. They favor a full and complete withdrawal from Iraq and would want the European Union to be Britain's primary diplomatic arena. The Conservatives are much more pro-U.S., and are steadfastly skeptical of the European Union.
I will keep you posted with what happens in Britain. Cheerio!
Yes, that was extremely corny.
THE WHITE HOUSE: Just when the White House wanted to hone in on Wall Street reform, they have been distracted by events beyond their control. The oil spill in the gulf coast is turning into an unmitigated disaster. By the time all is said and done, this could be a bigger spill than the Exxon-Valdez catastrophe in 1989. Some conservatives have tried to suggest that this is Obama's Katrina, which is patently absurd. For one, the lives of millions of Americans aren't under immediate threat. Two, Obama has done a good job coordinating state and local efforts in the gulf region, including close work with potential adversary Louisiana Governor Bobby Jindal (R).
The White House also had to focus this weekend on the failed terror attempt in Times Square. Explosives found in a car failed to detonate. It doesn't look like this will be a major story, mostly because the suspect appears to be a white guy. The double standards in our society are pretty amazing.
The President's schedule is pretty light to start the week. This morning, he hosts a reception at the Naval Academy for winners of the "Commander in Chief" awards. Later this afternoon, he holds a dinner for the Business Council. The schedule for the remainder of the week is in flux, but I expect him to make one or two appearances on the road.
THE SENATE: Now that Republicans have relented in their obstructionism, the Senate can begin debate on Wall Street reform. Votes on amendments will begin tomorrow. Unlike previous legislation where Democrats wanted to fend off inevitable attempts to make the bill worse, this amendment process may offer progressives some opportunities. Anger at Goldman Sachs after their performance at a Senate hearing last week perhaps has given more momentum to proponents of reform. One particular amendment that might come up, offered by Senators Kaufman (DE) and Brown (OH) would break up the big banks and prevent them from becoming "too big to fail." I'm afraid the Obama administration is opposed to this approach, as is Banking Chairman Dodd (CT). The Big Picture may write more about this amendment, but it would be shameful to see it go down in flames. Not only is it good policy, but it would be very good populist politics.
The other key amendment to look out for is a chance to re-enact the Glass-Stegall Act, which separates banks from other financial institutions. The act was overturned by the Gramm-Leach-Bliley Act in 1999. I'm not too confident on this amendment going though, simply because of the influence of lobbyists, but I'll do my best to keep my hopes up.
THE HOUSE: After taking up suspension bills today and tomorrow, the House will take up the so-called "Cash for Caulkers" bill. The bill will give rebates to individuals and businesses for retrofitting for energy efficiency. The bill has one Republican cosponsor, so I expect it to pass very easily. Perhaps the Senate can include the bill as part of its comprehensive energy package that it will take up...err...at some point.
That's it for now. Leave some comments!