Monday, January 25, 2010

Last Call

And no, I wasn't kidding about Obama's spending freeze.
U.S. President Barack Obama, under pressure from deficit hawks, will seek a three-year freeze on domestic spending in his 2011 budget that would save $250 billion by 2020, administration officials said on Monday.

Obama will outline the spending hold-down in his State of the Union address on Wednesday and will spell it out in detail on Feb. 1, when he unveils his second budget.

Obama is under fire for a record deficit and has called for a bipartisan congressional commission to consider spending cuts and tax increases to improve the country's fiscal outlook.

His proposed budget savings will need congressional backing and would exclude Defense, Veteran Affairs, Homeland Security and spending on international affairs, the officials said.
Naturally, the GOP is already attacking it.
Republicans dismissed the move as window-dressing by Obama's Democrats after an "unprecedented spending binge."

"This is like announcing you're going on a diet after winning a pie-eating contest," said Michael Steel, spokesman for House of Representatives Republican leader John Boehner.
Sure.  And then the GOP will say "Well, if you were really serious about budget matters, you'd throw out your entire agenda and cut taxes."  It'll turn into a contest.  Meanwhile, we'll be cutting spending in the middle of a recession...I mean depression.

I'm getting really tired of asking the rhetorical question about Obama being this stupid.  But he's playing the Republican patsy hook line and sinker.  And they will continue to ravage him when the spending cuts fail to do anything other than make government work worse.

Just Walkin' Away From It All

In another sign that the commercial real estate collapse is nowhere near over, the landlords of Stuyvesant Town, New York City's largest group of apartments, have simply walked away from their $5 billion plus real estate deal and are handing the keys back to lenders.
Tishman Speyer Properties LP and BlackRock Inc. will cede control of Stuyvesant Town-Peter Cooper Village to lenders after the value of Manhattan’s largest housing complex fell and they were prevented from raising rents.

Tishman, which bought the property with BlackRock Realty Inc. in 2006 for $5.4 billion, missed a $16.1 million debt payment on Jan. 8. Creditors with a claim on the complex include mortgage finance companies Fannie Mae and Freddie Mac and holders of so-called mezzanine debt including a Winthrop Realty Trust affiliate and Gramercy Capital Corp.

“We make this decision as we feel a battle over the property or a contested bankruptcy proceeding is not in the long-term interest of the property, its residents, our partnership or the city,” Tishman and BlackRock said in an e- mailed statement today.

The New York-based investors bought the 80-acre development from insurer MetLife Inc. near the top of the market with plans to remodel and raise the prices of rent-regulated units to market rates. Those plans were challenged by a recession, slackening demand for rentals and a legal victory for tenants who claimed some rent increases were illegal. In October, Fitch Ratings valued the property at $1.8 billion.

The companies decided to hand over the property after failing to reach an agreement to keep some level of ownership, according to the statement today. Tishman Speyer said it wouldn’t consider a long-term contract to manage the complex that doesn’t involve ownership.
(More after the jump...)

Pass The Damn Bill

Via Balloon Juice, now goes to Steve Benen's feature story on how the Dems can do just that.

Oh This Will Help

So that SCOTUS ruling last week?  Not only does it open the door for U.S. companies to spend unlimited money on elections, but it opens the door to foreign companies to do the same.
The ruling affirms that corporations, like individuals, have a free-speech right to spend unlimited amounts from their general treasuries on ad campaigns that support or oppose political candidates. It's true that foreign nationals are currently prohibited by law from making independent expenditures in U.S. elections. But that prohibition has little teeth. According to experts, it doesn't apply to foreign-owned corporations that incorporate in the U.S., or have U.S. subsidiaries -- meaning most foreign multinationals likely aren't covered. So there's "essentially no difference" between domestic and foreign corporations in terms of their ability to pump money into U.S. elections, says Lisa Gilbert of U.S. PIRG -- a view backed by several other advocates of increased regulation.

And even if the definition of a foreign corporation were interpreted more broadly, the logic of the ruling suggests the ban may now be unconstitutional anyway. In ruling for the majority, Justice Kennedy wrote that the court's decision did not address the issue of foreign actors -- implying that the ban would remain in place. But as Justice Stevens pointed out in his dissent, the vision of free speech that the court has embraced -- and the notion that corporations should be treated as individuals -- could make it very difficult to support singling out foreign corporations for special restrictions. "The sweeping freedom of speech rhetoric would have applicability to foreigners," says Edward Foley, an election-law expert at Ohio State University, who thinks the court has sent "mixed signals" on the question.
So does free speech apply to foreign corporations?  That's the next big can of worms this terrible ruling has opened.  More will be forthcoming, certainly.  But 2010 is going to be a nightmare for good government practices.

The Kroog For Helicopter Ben's Job

Baseline Scenario's Simon Johnson argues not only does Helicopter Ben need to be replaced, but that he needs to be replaced with Paul Krugman.
Big banks, without doubt, would be appalled.  But the “Greenspan fallacy” was always that no one else could do his job and even considering an alternative would be destabilizing.  Look at the mess that got us into.

What the markets really care about is what the Fed does, with regard to both interest rates and regulation.  What we need is a Fed chair who can be trusted to nuture the recovery  – find me the business person who is opposed to that - without allowing too big to fail institutions to remain so big and so dangerous that they can destabilize the system.

And don’t think that Krugman can’t raise interest rates if he really sees inflation coming – even if the danger, for example, is not picked up by conventional measures.  He is tough minded, not afraid to take stands long before they are fashionable, and confident that others will soon come to their senses.

Would he be a “populist” choice?  Absolutely not.  He would be a popular choice, no doubt, but he is also many technocrats’ favorite thinker and a person whose credentials and proven policy opinions speak for themselves.  No one would question the independence of the Fed with him at the helm.

Would Krugman be opposed by the Republicans?  Yes, potentially.  And there could be quite a fight in the Senate – entirely of the Republicans making.  But if they oppose his appointment – despite his qualifications and in the face of our weak economy – what signal would that send about their priorities?

The president said on Thursday he is (finally) willing to fight the big banks.  He’s an effective fighter and, with enough support, he can win.  But is any part of his agenda at this point really advanced by winning the reappointment of Ben Bernanke?
I'd rather see The Kroog in there than Helicopter Ben, that's for damn sure.  No doubt about it.  Is Paul Krugman the best choice?  I'd argue for Nouriel Roubini, but you know what?  Kroog would still be a couple light years ahead of ol' Ben there.  Now's the perfect time for Obama to extend the Volcker Rules and clean house.

Oh, and Timmy's ass is next.

The Way Forward

Steve Benen has written a strategy memo on how Democrats can finish health care reform and do it successfully.  He finishes with the following:
Elected leaders rarely get an opportunity to make a difference on such a grand scale. Indeed, in many ways, Democrats aren't just considering a solution to a chronic national problem, they're facing a test of their character. Democrats can either deliver or break their promise. They can either prove their ability to govern or appear inept. They can either satisfy the expectations of those who elected them or demoralize those who are counting on them. They can either watch the media cover their once-in-a-generation breakthrough or watch the media scrutinize a debacle for the ages.

Democrats, in other words, can either succeed or fail.

Looking back, the effort to reach this open door began last spring, but those with an eye for history know that America was actually carried to this point by giants with names like Roosevelt, Truman, Dingell, and Kennedy. With this once-in-a-generation opportunity, this Congress and this president can honor their legacy, and at long last, finish the task they began.

With a little courage and compassion, this generation of leaders can make comprehensive health care reform a reality, proving to the nation that they are worthy of the public's trust. House approval of the Senate bill — with additional improvements to be made through reconciliation — is the most efficient and effective way to deliver on the promise.

It simply requires one more step through an open door.
And while it's a nice memo and I really do hope it makes an impact on the Dems, it's the fact we're still having this fight in January that's the issue.  What Benen is talking about is basic stuff here, and while it's solid and correct analysis, we're far past the time for basics.

We're at the point where action is needed.  Bloggers like myself or Steve or the Balloon Juice crew can call Congressmen and let them know how they feel (and you should too!)

But in the end, action needs to be taken.  A good friend of mine said leadership is the ability to make a decision, and then act upon it.  We're missing that in Washington big time.

Feeling Wasted

Obama's lost the battle on the stimulus as well.
Nearly three out of four Americans think that at least half of the money spent in the federal stimulus plan has been wasted, according to a new national poll.

A CNN/Opinion Research Corporation survey released Monday morning also indicates that 63 percent of the public feels that projects in the plan were included for purely political reasons and will have no economic benefit, with 36 percent saying those projects will benefit the economy.

Twenty-one percent of people questioned in the poll say nearly all the money in the stimulus has been wasted, with 24 percent feeling that most money has been wasted and another 29 percent saying that about half has been wasted. Twenty-one percent say that only a little has been wasted and 4 percent feel that no stimulus dollars have been wasted.

"One reason why the economic stimulus bill is no longer popular with the American public is the perception that a lot of the money has been wasted. Six in ten believe that the projects in the stimulus bill were included for purely political reasons," says CNN Polling Director Keating Holland. "Nearly three quarters believe that at least half the stimulus money spent so far has been wasted, and one in five say nearly all of it has been a waste."
 The Republicans defined the bill as "porkulus" from the beginning, and Obama caved in and cut billions from it, assuring that it would be too small to make a difference.  Six in ten simply think the stimulus was graft, when the fact of the matter is without it, we'd be looking at a 12% or 13% unemployment rate right now.

But Americans don't care.  Republicans tell easy lies, and Democrats have to defend by telling difficult and complicated truths.  Easy lies win that battle every time.  Obama basically has zero accomplishments according to the zeitgeist now.  And now the White House keeps talking deficit reduction in the middle of a recessionary spiral.

2010 is going to be a disaster in more ways than one.

[UPDATE 12:57 PMJoe Klein has more on this but he should really keep his mouth shut.
So, two thoughts:

1. The Obama Administration has done a terrible job explaining the stimulus package to the American people...especially since there have been very few documented cases of waste so far.

2. This is yet further evidence that Americans are flagrantly ill-informed...and, for those watching Fox News, misinformed.

It is very difficult to have a democracy without citizens. It is impossible to be a citizen if you don't make an effort to understand the most basic activities of your government. It is very difficult to thrive in an increasingly competitive world if you're a nation of dodos.
Hey Joe?  I'm betting not all that misinformation and refusal to explain the stimulus well came solely from FOX News.  Just saying.  You work for Time, dig? A news outlet?

Maybe you should remember that next time you decide to pat Joe Lieberman on the back for saving the stimulus by you know, talking his GOP buddies into demanding hundreds of billions in cuts in the size of the package.   Perhaps Obama would of had more to explain to the American people instead of "here's your $400 tax credit stretched out over a year and projects that will start in 2011."

Help Is On The Way

President Obama is set to announce some middle-class help measures today, outlined by Joe Biden's task force.
"There are immediate steps we can take to reduce the strain on family budgets by helping middle class families manage their child and elder care responsibilities, save for retirement, and pay for college," the White House said in a statement.

The proposals would:
  • Require companies that do not offer retirement plans to enroll their employees in direct-deposit retirement accounts unless the workers opt out.
  • Increase the "Savers Credit," a tax credit for retirement savings, for families making up to $85,000.
  • Change some of the rules for 401K employer-sponsored savings accounts to make them more transparent.
  • Increase the child tax credit rate to 35 percent of qualifying expenses from the current 20 percent for families making under $85,000 a year. Families making up to $115,000 would be eligible for some increase in the tax credit.
  • Increase child care funding by $1.6 billion in 2011 to serve an additional 235,000 children.
  • Boost government spending by $102.5 million for programs aimed at helping families who provide home care for an aging relative.
  • Ease the burden for student loans by limiting a borrower's payments to 10 percent of his or her income above a basic living allowance. 
Hey, all of that seems really nifty.  You know what else would help Americans right now who are struggling to pay their bills?  A NATIONAL HEALTH CARE PUBLIC OPTION.

Sheesh.  And what is he doing?  Tax credits.  Republican tax credits.  Which the Republicans will vote down saying "No."   I see what he's trying to do, a series of bipartisan measures that the Republicans will get behind.  The Republicans will simply move the goalposts again and all 41 in the Senate will say no.  Game over.

Obama will never, ever learn.  He will get blamed when this doesn't pass.  Republicans will either want this aid with onerous restrictions that will assure only a few people get it, then they will complain that Obama's government plan failed and had too many restrictions, and wouldn't a massive tax cut across the board be better?

Watch the Republican response to this carefully.  They'll never let Obama pass it.

Harold Ford Will Go Far

...because he makes no logical sense.
SCOTT BROWN’S victory last week in the Massachusetts Senate race, following the Republican gubernatorial triumphs in New Jersey and Virginia, marked the third time in three months that the Democratic Party has lost the support and trust of independent voters.

The message these voters sent was clear. With one out of five Americans unemployed or underemployed, President Obama and the Democratic Party need to shift attention away from health care and toward a bold effort to create jobs, improve the economy and rein in the size of government.
A "bold effort" to create jobs and to improve the economy means cutting taxes to reduce revenues for government and getting rid of hundreds of thousands of government jobs all while reducing the deficit, meaning cutting billions in programs that act as the safety net to all those people who don't have jobs.  This will force them to get jobs that don't exist and that will be the Democrats' fault, but it's what the country wants so if they don't do that, they will be punished in November, by God.

So if Obama can't create millions of jobs by cutting millions of jobs, the Dems will lose in 2010.

Right then.

And this guy?  A Democrat.

I Think We've Been Here Before

If all this feels familiar to any of you politically, it's called deja vu for a reason, as Digby points out:
In case you were wondering, the consensus on all the Sunday gasbag shows is that Obama is an abject failure because of his radical leftist ideology and that his only hope of even maintaining the presidency, much less winning a second term is to take a sharp turn to the right and enact the Republican agenda. Several commentators, including such luminaries as political cross dresser Matthew Dowd on ABC, insisted that the first thing the president has to do is pick a huge fight with the Democrats to show the country that he isn't one of them. Cokie said he should have asked John McCain from the beginning what he was allowed to do.

The historians and expert political observers on Fareed Zakaria's CNN show all agreed that Obama is no Reagan, a president who never governed ideologically and always worked across party lines. Oh, and he needs to be a president or a prime minister, but nobody could agree on exactly what that means except that he should try to be more like Scott Brown, the white Barack Obama, except without all the liberalism.

Oddly, the Republicans weren't mentioned, although Robert Caro did note that Obama inherited something of a mess. Peggy Noonan said he ran to win not to govern and they all agreed that was a brilliant observation. Zakaria did point out that Obama had a higher approval rating at this stage than both Reagan and Clinton and that the two Bush's were higher at this point because of wars and they all stared for a moment and then went on about centrism and prime ministers again.

The Village has officially turned. I'm guessing they'll be calling for his resignation by July.
July seems late if there's a spate of Democratic retirements between now and March 1.  Me, I'm personally waiting for the first Villager to call for Hillary to run in 2012.

It will happen sooner than you think.

Run Into The Mystic Night

The first post-Scott Brown Dem retirement will be made official today, Arkansas Rep. Marion Berry is hanging it up after 14 years.
The field to replace Berry isn't yet set although Democrats mentioned include state Rep. Keith Ingram, Berry chief of staff Chad Causey and Jason Willett, a former state party chair. State Attorney General Dustin McDaniel (D) is regarded as a rising star in the state and would be a favorite if he ran. On the Republican side, broadcaster Rick Crawford is in the race although the field is likely to expand with the Berry announcement.

Berry joins Snyder as well as Reps. Dennis Moore (Kans.), John Tanner (Tenn.), Brian Baird (Wash.) and Bart Gordon (Tenn.) as Members sitting in districts either won by McCain or carried narrowly by President Obama to step aside between the end of November and today.

Democratic strategists warned privately that a Coakley loss could open the floodgates for members who were wavering about their future political plans. Including Berry, there are now 12 Democratic members retiring with 14 Republicans calling it quits.

The next two weeks could well serve as a tipping point in the battle for House control. Today there appear to be too few open Democratic seats for Republican to win the 40 seats they need to take control. But, another handful of retirements in swing districts could imperil Democrats hold on the chamber.
Again, two weeks ago I would have said the Dems would certainly hold the House and Senate.  Now?  Not even I'm willing to go that far anymore, especially since there's no indication that health care reform will be passed right now.  It's entirely possible that we're heading for a situation where Republicans and independent voters are looking to throw everyone out, and Democrats are too angry or disappointed to vote.   The result may be a Republican House next year, and even a Republican Senate.

I wasn't worried about 2010 a few months ago.  Now I am.


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