Obama Administration

Guest Post: Obama Needs to Accept His Role as Goatherd in the Health Care Debate

This guest post was submitted by a reader who wishes to be known as “Marlowe.” We thank him for his contribution.

I don’t have my own blog. I am no policy wonk. I am just a working stiff with a family, and I happen to read this blog during lunch. But I am worried: worried about the direction of the debate regarding health care reform. As congress debates, and the details of more proposals come out, we are getting further and further away from the complete overhaul the system needs. I am sure you all are bored of hearing the numbers over and over, for instance, how the amount we spend on health care is much larger than other developed nations for no better results

and that costs are rising faster than inflation, etc., etc.

Sure, Obama has given us broad — and admirable — goals for what he wants from health care reform.

In his press conference last week we learned he wants a plan that

• allows any American currently insured to ”keep what you have”
• provides an insurance exchange
• won’t add to the deficit
• must control cost growth in the future
• will eliminate waste and inefficiency in Medicare

I hope that the press conference, and subsequent town hall meetings, signal additional involvement from the president on the issue, but the president’s own website doesn’t make me optimistic by simply echoing the main (nonspecific) points from the press conference.

Healthreform.gov gives us some reports on what is wrong with the current system and a couple of “success stor(ies) in American health care”:  one about heart disease and stroke screening in Nebraska and one about preventing medical errors from Michigan. Excellent programs to be sure. But surely these bright spots are not a road map for an overhaul of the whole system. And while publicly praising places that have developed new models for health care like the Cleveland and Mayo Clinics, we continue to be without proposals from the Obama administration for how to adopt their systems to the entire nation.

I am not the only one feeling frustrated with Obama’s silence:

It would help, lawmakers are saying more frequently in private, if the President would be clearer about how he wants to fix the problem. His strategy of keeping his distance from the legislative machinery while only saying that any final product must meet certain broad principles means that Representatives and Senators have no clue as to what kind of bill he would accept in the end – and what they should be trying to sell to their constituents.

And on Tuesday morning I read in the New York Times that “the fate of the health care overhaul largely rests on the shoulders of six senators” and that “ the group of six has tossed aside the idea of a government-run insurance plan.” While the CBO hasn’t weighed in on the Baucus group’s proposals, the verdict on the other congressional proposals is not good as “bills crafted by House leaders and the Senate health committee do not propose ,the sort of fundamental changes, necessary to rein in the skyrocketing cost of government health programs.”

If Obama has some specifics in order to accomplish his many goals — including that of universal coverage — we need to see them before these various Congressional proposals become entrenched and we end up with a bill that does little to fix the problem, or — worse — fixes nothing at all. This is a once-in-a-generation opportunity. Maybe once in a lifetime.

Obama needs to seize control of the debate. Congress has had plenty of time to group think on its own. Now is the time for Obama to send a nearly complete bill to Congress. Presidents writing legislation and sending it directly to congress is not uncommon for significant and/or controversial legislation. Now, even more than in the past, it is one of the only ways to ensure that the White House’s priorities are reflected in the bill.

Kennedy wrote the Civil Rights Act.

Bush wrote the PATRIOT ACT.

Hell, Lincoln freed the slaves by executive order.

And while he is being more aggressive, how about getting out in front of the torture issue? We need a full accounting of what happened in the Bush Administration (and earlier) so that it doesn’t happen again. Sunlight is the best disinfectant.

Have a suggestion for a new guest post, to fill this bar exam week? E-mail submissionstoacandidworld@gmail.com.

The Banks Stressed? Fuhgeddaboudit!

This week, the Obama Administration and Wall Street successfully negotiated exactly how much it will cost to restore a warm and fuzzy feeling to the domestic economy: $75 billion. (That includes the cost to ship a rainbow-colored unicorn to every American household!)

The stress tests were a nice exercise meant to make everyone — especially in Treasury and bank executive offices — feel good about themselves. I can only say, “bullshit, ” so I will augment with Krugman’s summary:

I won’t weigh in on the debate over the quality of the stress tests themselves, except to repeat what many observers have noted: the regulators didn’t have the resources to make a really careful assessment of the banks’ assets, and in any case they allowed the banks to bargain over what the results would say. A rigorous audit it wasn’t.

As usual, I strongly recommend reading Krugman’s column today. He’s honest: Maybe the economy will recover with the administration’s tepid response to the banking industry’s woes. Of course, if it doesn’t …

What is most interesting about the piece, though, is what Krugman mentions at the end:

Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a “Wall Street éminence grise”? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary.

Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won’t be very different from its recent past, declaring, “I am far from convinced there was something inherently wrong with the system.”

I remember learning about Cohen from Andrew Leonard (his link):

H. Rodgin Cohen, a prominent banking industry lawyer, has “withdrawn from consideration” for the post of Deputy Treasury Secretary.

….

Cohen isn’t just a prominent banking lawyer — he is the banking lawyer, the chairman of Sullivan & Cromwell, a law firm entangled with every major player on Wall Street. As a Wall Street Journal profile noted last October, “Over the past five weeks alone, Mr. Cohen and his team have advised Fannie Mae, Lehman Brothers Holdings Inc., Wachovia, Barclays PLC, American International Group Inc., J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. in a blitz of mergers, rescues and cash infusions.”

Not only does he know the landscape, he helped create the landscape.

….

The people boasting the most familiarity with the complexities of the financial system are also the most implicated in its excesses and failures. A person like H. Rodgin Cohen might be both the first person we need and the last.

How nice that someone like Cohen believes the market is as sound and as involatile and as self-correcting as it ever was.

The event at which Cohen was speaking was sponsored by Bloomberg. Cohen was joined by Carlyle Group cofounder, David Rubenstein (Remember when Carlyle’s hedge fund collapsed?) and Gary Parr (Lazard, LTD. Deputy Chairman) who said:

There’s a good chance there are five to seven or eight global institutions, of which three or four will be clear winners and then some others will be good, doing full-service banking and securities business sort of as we knew it five years ago. … with a lot lower return on equity and a lot lower risk profile.

Commenting on the effect repealing Glass-Steagall might have had on the crisis, Parr added:

Some people say, did all of this arise due to the elimination of Glass-Steagall and we should put Glass-Steagall back into place … I’ve observed that that had little or nothing to do with this crisis.

Well, alrighty, then.

The problem is, and this goes wayyyyy beyond my singling out Goldman Sachs at the top of the heap, with the half-billion dollars the financial sector is willing to pump into Washington during a presidential election cycle (and the quarter-billion during mid-terms), Cohen and Parr are likely right on the money.

Ahem.

*** *** *** *** *** *** *** *** ***

O.K., bbs, this is the only new post for today. ACG and I are each on special, top-secret missions; though, ACG’s is decidely much more specialer and top-secreter.

If you are short on entertainment, might I recommend visiting ACG’s March post on crazy Orly Taitz’s birther saga. This week some vigilant voices from that end of the spectrum resurrected the comment thread, and it is worth a few laughs. (Happily, too, there are a few rays of blessed sanity from terrific commenters. To them, we say, THANKS!)

Obama’s Got a Banking Problem — And It Ain’t TARP

[Note: This version updates the "corrected" version posted 3:14 p.m. EDT which incorrectly exchanged Ben Nelson [D-NE] for Bill Nelson [D-FL] as having voted “Nay” on Senate Amendment 1014. I was correct the first time around, and this is what I get for triple- and quadruple-guessing myself.]

Let’s travel back in time, shall we, to a date long ago … in February (HA!) when the Obama Administration made a big whoop-de-doo announcing its plan to save American home owners and the domestic housing industry. The proposed plan, among other things, would grant bankruptcy judges power to modify mortgage terms. The banking industry strongly opposed this plan. In fact, the banking industry hates bankruptcy court (unless, they are the ones seeking its protection, of course). In 2005, for instance, a major overhaul of bankruptcy law ensured it would be quite difficult for, er, bankrupt consumers to unload or modify their debt. Interesting, also tucked into the legislation were provisions that allowed derivatives counter parties to get first dibs in bankruptcy proceedings. From Talking Points Memo (link theirs):

[Derivatives counter parties] don’t just go to the head of the line. They got to skip the line entirely. As the Financial Times noted last fall, “the 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.” As the article notes, ironically, this provision which Wall Street pushed for and got to protect investment banks actually ended up hastening the collapse of Lehman and Bear Stearns last year.

Essentially, derivates counter parties, under new BK rules, get to raid the coffers of a failing company while all other creditors have to follow regular bankruptcy procedure. Now, imagine what assets are left “to freeze” for reapportionment once the counter parties are through getting their shares. Bottom line: What the banks want, the banks get, even if it bites them in the ass later, as it did in the case of the collapse of the financial markets in 2008.

But I digress.

Last week — April 30, to be exact — the Senate voted down the amendment that would make it possible for bankruptcy judges to modify mortgage terms. Called “Senate Amendment 1014: To prevent mortgage foreclosures and preserve home values” and sponsored by Dick Durbin (D-IL), the legislation directly would help keep people in their homes, but indirectly would facilitate the establishment of the too-long-missing floor to the housing market. Only 45 senators (all Democrats) voted for the legislation. Twelve Democratic senators joined Republicans in opposing it, including Arlen Specter and Ben Nelson (NE), the latter quite enjoying throwing his weight around of late.

The Obama Administration was deathly silent on the matter:

But when the time came to stand up to the banking lobbies and cajole yes votes from reluctant senators — the White House didn’t. When the measure failed, there wasn’t even a statement of regret.

I am not so certain how “reluctant” those democratic senators were. Half of them are either on the finance or banking committees, and if we take Specter and Nelson out of the mix for the outlier, contrarian nuttiness they contribute, banking/finance committee members make up 60% of democrats who voted no on the amendment. Further, with the exception of Bennet and Lincoln, I can’t make the argument that mid-term election concerns fueled the move towards Republicans.

After his amendment went down, Durbin was quoted on Chicago radio saying:

And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.

I’ll have more on this tomorrow. It’s pretty disgusting. Here’s a hint: Goldman Sachs truly is in every nook and cranny in Washington.

Torture: Bush Apologists Answer the Wrong Question

President Obama’s decision to publish another round of “torture memos” – documents justifying and authorizing the use of torture against assorted War on Terror detainees – seems to have had the unanticipated effect of flushing out right-wing justifications for the practice. Apparently, Dick Cheney will happily dump as many state secrets as possible, if they help him.

Some of the right’s new talking points deserve new response. Let’s take the allegation, pushed by Thiessen and Cheney, that in fact, torture did produce actionable information that helped foil terrorist plots & save American lives.

While this sounds compelling, it doesn’t answer the right question. The question to ask when evaluating the risks and benefits of torture isn’t, “does torture produce information?” The right question to ask is, “is torture the only way to obtain the information necessary to foil imminent, grave threats to American citizens or assets?” Torture isn’t justified if it’s a means to an end. It’s only justified if it’s the only means to a necessary end.

On this question, and reduced to this issue, Cheney, Gonzales et al remain silent. But their casual failure to grasp the grave moral dilemma of torture speaks volumes. I’m prepared to give the President and any American officials full license to torture, provided they know, to a reasonable level of certainty, that:

1. The subject has information…
2. …that is necessary…
3. …to counteract a grave…
4. …and imminent threat to American assets…
5. …and will give the information…
6. …only if tortured.

All Cheney & company have offered is #1, and maybe #3. I’m not impressed.

Um, He Wasn’t Kidding: Obama Talks Cars

Anyone who doubts a modern politician can tell it like it is ought to read Obama’s remarks on the American auto industry.

Over the past year, our auto industry has shed over 400,000 jobs …. More than one in 10 Michigan residents is out of work.

….

Year after year, decade after decade, we’ve seen problems papered over and tough choices kicked down the road …. Well, we’ve reached the end of that road.

….

[W]hat we’re asking for is difficult.  It will require hard choices by companies.  It will require unions and workers who have already made extraordinarily painful concessions to do more.  It’ll require creditors to recognize that they can’t hold out for the prospect of endless government bailouts.  … Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry.

….

While the steps I’m taking will have an impact on all Americans, some of our fellow citizens will be affected more than others.  …  Many of you have been going through tough times for longer than you care to remember.  And I won’t pretend that the tough times are over.  I can’t promise you there isn’t more difficulty to come.

….

There are jobs that won’t be saved.  There are plants that may not reopen.  There’s little I can say that can subdue the anger or ease the frustration of all whose livelihoods hang in the balance because of failures that weren’t theirs.

Bankruptcy, David Brooks, and Left-wing-nuts after the jump.

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That Was Fast: David Brooks Calms Down; PLUS: A GRAPH!

Yesterday I wrote about David Brooks’ slide into hysteria over the gluttonous ruin threatening to swallow all that is good and right about America. I (and the incisive commentators to my post) were not the only people to feel umbrage at Brooks’ portents.

In his column today, Brooks summarizes his conversations with senior members of the Obama Administration, who responded to allegations he made Tuesday of irresponsible, big government spending. Some highlights:

[Administration officials] see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. … They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.

….

[T]he Obama administration will not usher in an era of big government. Federal spending over the last generation has been about 20 percent of G.D.P. This year, it has surged to about 27 percent. But they aim to bring spending down to 22 percent of G.D.P. in a few years. And most of the increase, they insist, is caused by the aging of the population and the rise of mandatory entitlement spending. It’s not caused by big increases in the welfare state.

He goes on to relate the administration seeks to lower nondefense discretionary spending [NDDS] to 3.1% of GDP by 2019. Since 1969, annual NDDS averages 3.8% of GDP. Of course, this year, it is much higher (4.7%), but the budget priorities Obama has laid out puts the country on a path to lower NDDS to a point never reached since data collection began in 1962. This means a Democratic administration is ready to shrink government to a size smaller than that of any Republican presidency.

Brooks likes to point out the “Obamatons” are adopting critical components of Republican plans. For instance, “[t]he Medicare reform represents a big cut in entitlement spending. It amounts to means-testing the system. It introduces more competition and cuts corporate welfare.” Further,

Over the long run, Obama has insisted that health care reform will be deficit-neutral. Many experts believe this will force Democrats to reduce the tax exemption for employee insurance benefits in order to raise revenue. This idea is at the core of most conservative reform proposals.

The latter might be true, but if it does happen, it will be when a system is in place that has expanded coverage to the currently uninsured and that has lowered overall health-care costs. McCain’s, ergo the Republican, health-care plan eliminated the tax exemption and sent workers into the free market, where private insurers would then be falling over themselves to cover people with high blood pressure or with special-needs children or with some other seemingly benign pre-existing condition that makes them high-risk on an actuarial table.

Regarding the former, the implication that liberals can’t cut spending is, as shown in the NDDS forecasts, ridiculous. That Republicans have some sort of monopoly on efficiency and fiscal responsibility is similarly ludicrous.

Ultimately, the ludes kick in, and Brooks concludes:

[T]he White House made a case that was sophisticated and fact-based. These people know how to lead a discussion and set a tone of friendly cooperation. I’m more optimistic that if Senate moderates can get their act together and come up with their own proactive plan, they can help shape a budget that allays their anxieties while meeting the president’s goals.

As promised, a GRAPH! (after the jump)

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Obama Ratings High, But Caution Advised

There’s nothing wrong with circumspection. Caution is my default filter. Eight years of W. and Darth Cheney, war, a turbulent election, and an economic crisis have honed my processing and investigative skills. Of course, there are no Pulitzer or Dick-Tracy-private-eye awards on my horizon, but I can safely say I keep myself pretty well informed.

And so here, 36 days into an Obama presidency, why do I feel so gosh-darned wary of what is to come?

My scale tips in favor of Obama and his Administration’s handling of the economy. Yes, I believe the stimulus bill is insufficient and relies too heavily on tax cuts. I believe ailing big banks need to be nationalized, er, yesterday (and it looks like they just might be). I make no secret that I like what Krugman has to say. Nonetheless, I give Obama a 7 out of 10 for the tone he has set and the legislation passed in this short time. While many Americans might not agree with my leftist-socialist-pinko fantasies for a utopian society, they do agree with my assessment of Obama. According to a recent NYT-CBS poll:

• 63% of Americans approve of Obama’s handling of his job as president and (57%) of the economy.
• 74% believe Obama and Congressional Democrats (45%) are reaching out to Republicans. (Only 31% feel Republicans are trying to work with Obama.)
• 91% believe the economy is either “fairly” or “very bad.”
• 77% feel optimistic about the next four years under Obama.
• 70% believe it will take at least two years “to make real progress on fixing the nation’s economy.”

Essentially, Obama has the good will, faith, and patience of Americans.

Yet, caution is in order.

Find out why after the jump.

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Houston, We Have a Plan.

And Phoenix, and Miami, and Los Angeles, and Las Vegas … and all communities drowning in foreclosures.

On Wednesday, Obama announced his admini-stration’s plan to stabilize the housing market. The stock market didn’t love the plan, but it didn’t hate it either, the Dow closing even. I’m sick, sad, and sorry that the country is in the mess we are in, but I understand that drastic action has to be taken even if dastardly, irresponsible people benefit. I can see House Republicans harping most loudly on this point, but as their squawking increases, so does their irrelevance.

In the meantime, Obama laid out a plan with a good amount of detail (unlike Geithner’s dreamscape last week) that will have a three-prong approach to curbing the foreclosure epidemic:

1. Incentives to lenders to refinance loans to homeowners who are current but who are paying relatively high interest rates and cannot refinance due to loss of equity in market downturn.
2. Incentives to lenders to adjust loan terms for at-risk homeowners (i.e., lowering interest rates, extending payment periods, lowering principle) with the goal of bringing monthly payments to 31% of the borrower’s monthly income.
3. $200 billion capitalization of Freddie Mac and Fannie Mae so that these institutions can provide increased mortgage backing.

Obama is also asking Congress to pass legislation enabling bankruptcy judges alter mortgage terms. Says the New York Times:

The banking industry has vehemently fought that proposal for more than a year, saying it would make investors unwilling to finance future mortgage lending. But Democrats in Congress strongly support the idea and banking executives are putting up less resistance than before.

The plan is estimated to help nine million homeowners. The Wall Street Journal editorial page has already characterized Obama’s plan as a handout to the undeserving. The page cites delinquency rates on mortgages that were renegotiated via previous plans in the last fiscal year, quoting the Office of the Comptroller of the Currency and the Office of Thrift Supervision:

The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months.

BUT … the WSJ goes on to admit (my bold):

Those who favor Mr. Obama’s plan say that many of these modifications haven’t lowered monthly payments the way the new plan does. True, and the more taxpayer dollars are spent subsidizing a particular borrower, the more affordable a loan becomes.

Furthermore, the second report by the Congressional Oversight Panel [COP], one of the entities overseeing administration of TARP, discusses some of the problems with previous programs to modify mortgages, like the Streamlined Modification Program:

The Streamlined Loan Modification Program (SMP) is an entirely voluntary program. … Its key feature is a 38% front-end debt-to income (DTI) target for modifications. … Litton Loan Servicing, a Goldman Sachs affiliate, uses 31% DTI as its initial target, FDIC has proposed a general modification program using a 31% DTI target, and Bank of America/Countrywide’s settlement with the state Attorneys General requires use of a 25%-34% DTI standard. Indeed, the GSEs’ [Freddie Mac & Fannie Mae] own initial underwriting guidelines suggest a maximum 25%-28% front-end DTI. Moreover, most loans already have a front-end DTI of less than 38%. Only around 10-15% of prime and alt-A and 25-30% of subprime are already above this threshold.

COP was most concerned about efforts Treasury had (or, actually, had not) made in administering TARP to stem foreclosures. Treasury responded by touting the “breakthrough” SMP, which was voluntary, and did little to significantly modify mortgages to avoid foreclosures. The COP report continues:

A recent study of loan modifications found that 23% result in higher monthly payments and another 23% result in no change in the monthly payment, while most of those that decreased payments did so by less than $100/month. Not surprisingly, failure rates on modified loans are high.

So when we start hearing soundbites railing against repeated defaults and screaming that mortgage modification doesn’t work, remember the context of these failures.

Live Blogging General Debate Before House Votes on Stimulus Bill

11:30 a.m. — The House is beginning 90 min. of general debate. Jerry Lewis (R-CA) is asking that the debate time be increased an hour. David Obey (D-WI) says that the House already voted on the rules for the debate. There is now discussion about whether the Democrat conference report should be considered since it has not been available for three calendar days, Tom Price (R-GA) is making the argument that it shouldn’t.

11:43 a.m. — Obey and Lewis are leading the Democrat and Republican sides, respectively, of the debate. Each side gets a total of 45 min. Here we go.

11:44 a.m. — Lewis just said he will be voting “No” … as in “No surprise.” He is making the argument that the bill is only going to grow government, says 191 government programs are being permanently expanded … 39% of spending is for temporary stimulus; 61%, for program expansion. (No details provided beyond these.) He is complaining about the way the conference report was introduced, via website at 12:30 a.m. this morning.

11:51 a.m. — Charles Rangel (D-NY) is talking in generalities about how the House will be remembered if it does not pass the bill, when “everyone is screaming out … to come to our nation’s economic savior [sic].”

11:55 a.m. — Nydia Velazquez (D-NY), chair of the Small Business Committee, is noting the bill allots $21 billion to small business development, with a resulting 30,000 jobs created.

11:56 a.m. — Dave Camp (R-MI) is referencing the CBO’s report earlier this week about the 10-15 year projections of the effect of this bill on GDP. (FYI: Be cautious of economic forecasts that look that far into the future.) Referencing the back-room nature of the conference debate yesterday. He is voting “No.”

12:01 p.m. — Sander Levin (D-MI) says bill provides $1 bn for transportation and infrastructure in Michigan. Expanded unemployment benefits to 161,000 …

12:03 p.m. — Harold Rogers (R-KY) says “principles of democracry are being compromised” because of way bill has been drafted and presented. Is talking about a $12.1-trillion debt … (Note the Bush Administration is responsible for a larger portion of it than will ever be contributed by this stimulus bill.)

12:07 p.m. — Xavier Becerra (D-CA) is talking about the technological innovation promised by the bill, specifically the tech improvements in healthcare.

12:09 p.m. — Jack Kingston (R-GA) says Republicans offered a bill that would create twice the jobs at half the cost … Does he mean 7 million jobs at a price of $400 billion? Is he talking about the bill they introduced when the House voted on the original bill? He talked about money going to a gigantic “rat in San Francisco.” David Obey held up the bill and dared Kingston to find the appropriation and show it to him.

12:12 p.m. — Jim McDermott (D-WA) says this is a “New Deal for a new century” … adds $100 to average unemployment insurance, reminding everyone that the average UI payout doesn’t reach poverty level.

12:13 p.m. — Rodney Frelinghuysen (R-NJ) says only 7% (UPDATE: Originally, I had “17%.” I misheard.) of bill goes to roads and transporation infrastructure and that bill “may lay the groundwork for a government takeover of the healthcare industry.”

12:16 p.m. — Richard Neal (D-MA): “operative word here is ‘necessary’.” Small-biz expensing increased (in contradiction to Frelinghuysen’s statement that small biz is not helped by tax portion of bill). 10,000 families a day “slipping into foreclosure.”

12:19 p.m. — Todd Tiahrt (R-KS) asks where this money is coming from … just said we are following the m.o. of Paul Volcker. (Didn’t that work? It hurt, but it worked.) Wants to do something like give workers a “payroll tax holiday” that will “last several years” (!!!) …

12:21 p.m. — Bob Etheridge (D-NC) talking about money for school construction … “federal government in partnership with school districts” to create private-sector jobs in schoool construction. “Hundreds of school-building programs stalled in downturn.”

12:23 p.m. — Zach Wamp (R-TN) questioning the approach of “spending our way to prosperity.” Predicts “waste, fraud, and abuse.” “Just because Republicans” spent a lot of money “after September 11″ doesn’t mean the “Democrats should be allowed to wreck our ship of state.”

12:25 p.m. — Henry Waxman (D-CA): bill providees (1) broadband investment … expand internet access in rural and underserved areas … (2) energy investment … development of “smart grid technology” … (3) health care investment … assist unemployed pay for health coverege, helps employers pay for people transitioning to work, from medicaid coverage to private insurance, states with higher levels of unemployment get more assistance in bill funding for health care.

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Economic Stimulus: It Might Not Be the End of the World (UPDATED)

Senators Ben Nelson (D-NE) and Susan Collins (R-ME) are the marquis names leading the bipartisan negotiations on the Economic Recovery and Reinvestment Act in the Senate. The past two weeks have seen Republican House and Senate members on the floor and talk-show circuit pointing out every nickle and dime of purportedly wasteful, non-stimulus spending. Sadly (and typically), Democrat leaders in Congress did not meet fire with fire, missing the opportunity to take control of the media message and to explain why Pell Grants and pregnancy prevention programs and the Census matter for economic vitality.

Obama screwed up, too. Rahm Emanuel might have been representing the Administration’s interests in the negotiations, but where was our leader? He paid millions upon millions of dollars to reserve 30 minutes of primetime television when he was campaigning, but as president he couldn’t get on the tube now, when it is free (!!!), to discuss what spending in the bill means with pie charts and emotive stock photos of workers and families?

ARGH!

As frustrating as Obama’s low profile has been, though, there might be a silver lining. For the first time in eight years, Congress has actually been able to act like … Congress. There has been lively debate. Yes, the party lines are still there (as we can all attest by the headlines we read and the soundbites we hear), but there has also been plenty of substance. Congress had to battle this out; after all, they are the branch solely responsible for drafting and passing legislation, notwithstanding Darth Cheney and his “mini me,” W.

The changes negotiated on Friday by the bipartisan group of senators are available here. (It’s in an Excel spreadsheet.) Admittedly, the appropriations are described in generalities, but some points worth noting …

1. The Census retains its $1,000,000,000 in funding. Many Republicans had gone apeshit on this appropriation, saying its stimulus benefit was questionable (even though the Census hires droves of people). Actually Republicans don’t like it because their districts don’t do well every 10 years when the Census counts all the brown and black and poor and sick and unemployed people.
2. The $79 billion originally set to go to the states with no strings attached is reduced to $39 billion. In the net, I believe this change is acceptable. I know states are hurting, and I didn’t like the Republican argument that the money would just be used to fill budget gaps, not to stimulate the economy. (Um, when people are able to keep their jobs, the economy is helped.) Nonetheless, I also know there is a lot of room for abuse and mismanagement. Case in point: Los Angeles and its precipitous decline in home owning, middle-class residents on one hand and the drastic loss of affordable housing for lower income groups on the other; the city lacks a cohesive vision for business and industry development. The city can benefit from funds, of course, but those funds have to administered as part of larger programs.
3. Science comes out pretty well. According to ScienceDebate2008.com, research agencies will see a boost of $6.6 billion in funding, including $1.2 billion to the NSF and $2.65 billion to renewable-energy R&D.
4. K-12 new-school construction is axed, but the Pell Grant program will receive $13.87 billion.

Haggling ensues, but NYT reports the bill (with Friday’s changes) will pass.

UPDATE: When I say Obama can reserve “free” T.V. time, I, of course, mean free to him. The networks lose advertising dollars when they preempt their regularly scheduled broadcasts. Nonetheless, Obama still ought to speak to the country, and, apparently, he IS planning to do just that.