He Sure Loves A Klieg Light

Maybe the worst thing about Russ Feingold's czar hearing yesterday is that it got got Joe Lieberman a-thinking:

Hey, so guess who is mulling new legislation to solve the alleged problem of Obama’s “czars”? Joe Lieberman!

He may even hold hearings on the czars, as the chair of the Homeland Security and Governmental Affairs Committee. Since this will confer legitimacy on an attack that has mostly emanated from Glenn Beck and the hothouse right, it could prompt an “I told you so” chorus from those who argued that Lieberman should be stripped of his committee slots.

Leslie Phillips, a spokesperson for Lieberman’s committee, confirms by email that Lieberman’s legislation is “in the early conceptual stage.” She also said a hearing is in the works, with its schedule up the air until the committee can nail down witnesses.

Feingold's hearing yesterday should have actually ended this debate in Congress, not begun it. The panel, assembled on a bipartisan basis by Feingold and Tom Coburn, pretty unanimously argued that the Obama Administration was within Constitutional boundaries to have Presidential advisors in the White House. But Lieberman loves those Fox klieg lights (you know, the network who gives you "what we believe to be the facts"), and so does his partner in crime on the Committee, Susan Collins:

John Harrison, a University of Virginia law professor, compared the czars to the position of White House chief of staff, saying both hold great influence and can speak for the president, but their legal powers are limited.

Their "practical authority . . . is not legal authority, and as long as the distinction is rigorously maintained there will be no legal problem," Harrison said in his written testimony.

Sen. Susan Collins (R-Maine), who had also written Obama questioning the czars, said in a statement the issue was not dead. The Homeland Security and Governmental Affairs Committee, where she is the ranking member, will hold a similar hearing next week.

"The appointments of so many czars have muddied the waters, causing confusion and risking miscommunication going forward," Collins said.

Lieberman's call for legislation is the first time that has come up, taking this to an additional level. And it's not surprising coming from Holy Joe. You may recall that he got Glenn Beck into Yale. Yes, that's right:

"One local politician who appreciated Beck's regular digs at the governor was the man who had defeated Weicker in a bitterly contested 1988 senate race: Democrat Joe Lieberman. Beck and the senator were friendly throughout the '90s, until they fell out over Lieberman's refusal to back the impeachment of Bill Clinton in 1998. But before they parted ways, Lieberman would play a role in Beck's search for a worldview and identity by helping Beck enroll part-time at Yale in the fall of 1996. The ADHD-diagnosed Beck didn't last long at Yale. He took one class, "Early Christology," and dropped out."

Lieberman has appeared on Beck's show in the past. And once he submits this legislation, I'm sure he will again. He loves that klieg light.

It's definitely looking like keeping Lieberman as the chair of the committee in the Senate that can investigate the executive branch was a sound decision by Democrats.

Deal Of The Century

So Max Baucus will reveal his long-awaited wet kiss of a bill tomorrow, with subsequent votes in committee in the coming week. We've already seen an outline of it, so we know that it would still cripple people financially who have the temerity to get sick, it would criminalize people who do not buy inadequate private coverage from the insurance industry, it would incentivize employers to offer crappy coverage and discriminate in hiring against people who have no coverage from a family member, and it would not include a public insurance option to compete with private plans. It won't even include a trigger, because the original trigger backer, Olympia Snowe, has decreed that it's a dead letter. Those weak state-based co-ops designed to allow nonprofits like Blue Cross, some of which control 90% of the insurance market, to access billions in government seed money, will be as close as we get in the Finance Committee to a public option. Seemingly, the only reason for the death of the trigger is that Susan Collins said they might lead to a (horrors!) public option, and Snowe probably wants her along as cover for a final bill.

You can pretty much tell what a steaming pile of garbage the Baucus bill would be by the fact that the drugmakers are going all in to support it.

The drug industry’s trade group plans to roll out a series of television advertisements in coming weeks specifically to support Senator Max Baucus’s health care overhaul proposal, according to an industry official involved in the planning.

The move would be a follow-up to the deal that drug makers struck in June with Mr. Baucus and the White House. Under that pact, the industry agreed to various givebacks and discounts meant to reduce the nation’s pharmaceutical spending by $80 billion over 10 years.

Shortly after striking that agreement, the trade group — the Pharmaceutical Research and Manufacturers of America, or PhRMA — also set aside $150 million for advertising to support health care legislation.

President Obama has cited the deal with the group as signifying a new era of cooperation. But some critics say the advertising fund could be wielded against alternative approaches to health care legislation. Some House Democrats, including Henry A. Waxman of California, are seeking drug industry givebacks not covered in the deal with Mr. Baucus and the White House.

You rarely see bribes like this spelled out so succinctly and directly. $150 million is certainly more money than has been spent on health care advertising to date. And it's all going toward the Baucus plan, based on a quid pro quo agreement. Other committee chairs like Henry Waxman want to find more savings that what Big Pharma agreed to by letting the government to bargain for lower drug prices, like many other industrialized nations. But Baucus dutifully abided by the deal, and so his plan will get the ad backing. Matt Taibbi further explains.

The $150 million it committed to support Obama’s bill is now being rolled out in pro-reform ads, which are being aired mostly in the districts of freshman congressmen. The ads are cheesy, half-hearted tripe blandly supporting the weak-as-fuck remnants of Obama’s health care plan, an example being this “Eight Ways Health Reform Matters To You” ad that salutes the end of coverage denials for those with pre-existing conditions.

Now we’re also seeing pressure from a group of freshmen and Blue Dogs, who have composed a letter to a quartet of House Committee chairs requesting that the Waxman language be removed from the health care bill and replaced with the PhRMA language, which happens to be the language the White House is pushing and which will appear in the Baucus bill in the Senate. The pro-PhRMA language retains the preposterous government subsidy to the pharmaceutical industry in the form of laws banning Medicare from negotiating market rates. It is completely useless and of no possible social benefit to anyone except pharmaceutical companies, but this group still managed to get 60 people to sign this bill.

What does this letter say? Does it argue that the PhRMA language is better for America than the Waxman language? Does it say it will cost taxpayers less and provide cheaper drugs to more people? Hilariously, no. What it says is that this PhRMA language, while worse than the Waxman language, is not quite so bad as you think (it doesn’t save as much as the Waxman language, but it still has a 50 percent price reduction, which isn’t terrible!). Moreover, the letter says, substituting this language will help the bill get passed! Here’s the actual language, addressed primarily to Waxman:

“Your efforts to remove this onerous burden on Medicare beneficiaries… are to be greatly commended. However the commitment by President Obama and the AARP to support legislation that would provide a 50 percent reduction is a dramatic step forward in helping fill the doughnut hole. Equally important, it moves us toward our goal of health care legislation.”

In other words, your attempt to put in a real reform is cool and all, but PhRMA has us by the balls, so help us out.

At the same time, the drug industry is employing scumbag from way back Tony Coelho, who may be single-handedly responsible for Democratic silence in the face of the decimation of American manufacturing in the 1970s and 1980s, to attack comparative effectiveness research, another part of the Obama plan. I guess there's nothing two-way about that loyalty.

While we were going back and forth on a public option, this backroom deal to fund future Democratic campaigns (I don't believe for a second that the $150 million will be spent now, but on protecting conservative Democratic incumbents who protected drug industry profits next year) in exchange for backing off a huge subsidy to giant corporations was put into motion. Baucus' delay actually may have crimped this and forced Big Pharma to start spending now. With industry out in front, however, a bill will probably pass.

Just don't read it so closely.

Going Into Overtime

The successful Cash for Clunkers program is coming down to the wire in the Senate. They have until the end of the week to pass the bill before they head into an August recess. But if they try to change the bill from what the House passed already - which was just a straight extension - the bills would have to be reconciled, and that would require the House coming back from its recess. Otherwise, it'll get signed into law too late for the program to stay in business. What will Sen. Reid do?

The $2 billion cash infusion granted Friday by the House to the overwhelmed cash-for-clunkers program must be accepted by the Senate this week without amendments — or it won’t be signed into law until September.

The House has adjourned for its summer recess, and some Senate lawmakers want to change the bill, which will likely force Reid into a days-long cloture process.

And that's in addition to trying to move the Sonia Sotomayor confirmation, which will probably take multiple days of floor debate, even though the outcome is assured. There's simply no way the Senate can plow through all that by the deadline of Thursday night. It's not possible.

Senate Minority Whip Jon Kyl (R-Ariz.) said his party will push a go-slow approach on cash-for-clunkers so that the program’s solvency and effectiveness can be examined. Without knowing how many claims are still in the pipeline, Kyl suggested a similar mistake could be made again.

“We need to have a time-out to see how much money was spent,” Kyl said. “Before you authorize more money, wouldn’t you like to know how much you’ve spent and how it took to spend it, and what kind of things you might want to do to modify it?” [...]

The GOP staffers pointed to Democrats like Dianne Feinstein of California, Claire McCaskill of Missouri and Mark Warner of Virginia, who in recent days have all expressed skepticism about the program. However, Feinstein and GOP Sen. Susan Collins (Maine) indicated on Monday evening they will support the measure. Warner wants the program to have higher mileage requirements while McCaskill has sounded skeptical about how it will be funded.

But other Democrats strike a common refrain: The sudden demand on the cash-for-clunkers program proves it is working.

With Feinstein and Collins singing off after seeing the unexpected increases in fuel efficiency coming from this program, it's safe to say that this has a good chance of passage. But Republicans will obstruct, and slow down, and gum up the works, and try to add amendments and poison pills, all the while saying that they just have to get home for the August recess. And so a program with demonstrable success that has led to the highest light vehicle sales in a year might get scrapped because of the old stopwatch.

What a wonderful political system we have.

Wild Success Of Government Program Shows How Government Can't Run Anything

Amazingly enough, they're getting away with this message.

The government’s “cash for clunkers” program become the latest political flashpoint on Sunday, with Obama administration officials urging the Senate to approve more money for the initiative and Republicans raising concerns about it [...]

Republicans say the problems with the program are another strike against the Obama administration as it pushes for a speedy overhaul of the health care system that would involve a government-run insurance program. They argue that government involvement in any industry is a recipe for disaster.

Senator Jim DeMint, Republican of South Carolina, said the “cash for clunkers” program was an example of the “stupidity coming out of Washington right now.”

“The federal government went bankrupt in one week in the used-car business, and now they want to run our health care system,” Mr. DeMint said in an interview on “Fox News Sunday.” “This is crazy to try to rush this thing through again while they’re trying to rush through health care, and they want to get on to cap-and-trade electricity tax. We’ve got to slow this thing down.”

Let's number the "problems" with the program:

1) it's too successful and too many people want the rebate
2) the government Web site where the rebates get processed is getting killed because too many people are trying to access it
3) the rebates are going to "middle-class people" who may have eventually bought a car anyway
4) car dealers haven't gotten their rebate checks yet after a week

Are these even rational complaints? They boil down to "the program is too good a deal." I would agree, leveraging $5 billion dollars through the economy in a week is a pretty good deal for those on Main Street looking for some economic activity. There is a residual economic effect to selling a quarter of a million cars that increases hiring throughout the country as well.

While the program could stand with a few tweaks, and I stand with Sens. Feinstein and Collins on improving the fuel efficiency standards, the bottom line is that the program has a great economic multiplier effect, has been unexpectedly strong in increasing mileage rates among new buyers, and has been a boon to the middle class, which gets approximately nothing from their government 99% of the time. Republicans are going to carp at anything Democrats do, but what they are objecting to in this case is revealing. They don't like to see successful government programs that work.

Teach The Controversy

Ceci Connolly, well-known around these parts, has a "teach the controversy" article out today about the utter B.S. flung about on talk radio and promoted by serial liar Betsy McCaughey that the Democratic health care plan surreptitiously seeks to send roving verbal hit squads out to the sticks to talk the elderly into suicide. Connolly, in her role as a stenographer, dutifully transcribes the claims from all sides of the "debate". In the second paragraph she gets close to actually explaining the language in the bill:

The controversy stems from a proposal to pay physicians who counsel elderly or terminally ill patients about what medical interventions they would prefer near the end of life and how to prepare instructions such as living wills. Under the plan, Medicare would reimburse doctors for one session every five years to confer with a patient about his or her wishes and how to ensure those preferences are followed. The counseling sessions would be voluntary.

That's not even totally correct, I wouldn't call Medicare covering end of life counseling a proposal to "pay physicians." Unless you want to call Medicare covering hip surgery as a proposal to pay physicians to take out people's hips.

You can read the provision right here. And the story could have ended there. But Connolly and her editors find it more exciting to give lots of space to those distorting the bill, without really coming down on one side or the other. The heading over Connolly's articles on this subject say "Tracking the Health Care Debate." I guess it's someone else's job to track the truth.

You know what would have been an interesting wrinkle in the article? Besides actually saying who's right and who's wrong, I mean. The tidbit that Sen. Susan Collins actually introduced this language back in the spring.

On May 22nd, Senators Collins and Jay Rockefeller introduced the “Advance Planning and Compassionate Care Act,” according to a press release sent over by a source. The measure provides Medicare funding “for advance care planning so that patients can routinely talk to their physicians about their wishes for end-of-life care,” the release says.

Collins praised the measure, which may be included in the Senate health care bill, in the release. “Our legislation will improve the way our health care system care for patients at the end of their lives,” she said, “and it will also facilitate appropriate discussions and individual autonomy in making decisions about end-of-life care.”

Maybe someone should ask Senator Collins whether she’s concerned that Federal funding for end of life consultations could result in “government-encouraged euthanasia,” as we keep hearing. Come to think of it, maybe I’ll ask her.

What a reporter like this would say is that they have a fact-check department, and they write articles about their fact-checking, and the point of this article is to highlight the "debate". I don't really understand how that illuminates much of anything. An article with the opening line "A campaign on late-night radio promoting theories that the Earth is flat and sailors fall off the side of the world just past the horizon have sparked fear among seafaring families" wouldn't be particularly helpful to anyone. I do think Democrats have shown a basic unwillingness to decide whether to ignore B.S. like this and let it fester or attack it and give it more attention, but a journalist writing about it should probably make pretty clear that only one side is telling the truth. There is actually no convention of balance in journalism, that's a recently invented altar upon which the modern press corps bends and prays.

Playing Politics With People's Lives

Well that sure was smart.

Sen. Susan Collins (R-ME) was apparently unwilling to be seen as endorsing such "funny" sounding priorities as flu "preparedness" in an economic recovery package. Perhaps in an attempt to prove her fiscal conservative bona fides, Collins repeatedly insisted that (Rep. David) Obey's pandemic preparedness funding did not belong in the bill:

COLLINS: There's funding to help improve our preparedness for a pandemic flu. There is funding to help improve cyber security. What does that have to do with an economic stimulus package? [CNN, 1/31/09]

COLLINS: I think everybody in the room is concerned about a pandemic flu. But does it belong in this bill? Should we have $870 million in this bill? No. We should not. [MSNBC, 2/5/09]

After the funding was stripped, another moderate Republican attempting to appear tough on "unnecessary" spending in the recovery package, Sen. Arlen Specter (R-PA), endorsed Collins' crusade against the pandemic preparedness funding on Fox News:

MS. KELLY: Okay. $780 million for pandemic flu preparedness, in or out?

SEN. SPECTER: Out. Very important projects, I took the lead along with Tom Harkin on some massive funding for pandemic flu, but it belongs in our regular appropriations bill.

The argument for putting flu preparedness in the stimulus was that an outbreak at a time of economic downturn would be devastating, not to mention the fact that anything that spends money to buy anything is stimulus, and the money is gone for state and local public health for flu pandemics:

Hamburg said there is no more pandemic preparedness money in the pipeline for state and local public health. "The $600 million that was made available in December 2005, in the fiscal year 2006 emergency supplemental bill, the last of those dollars went out the door this past August," he said.

In addition to the cutoff of pandemic flu funding, public health agencies have seen their "all hazards" preparedness funding drop about 25% since 2005, Hamburg said.

TFAH and its partners are advocating for another $350 million specifically for pandemic readiness and additional money for other public health emergencies, he said.

There is likely, especially now, to be additional funding in the FY2010 budget, and maybe even an emergency appropriation. But right now, we have no money in the pipeline for flu pandemics, DURING a possible flu pandemic (I don't want to get too hyperbolic, because the severity remains to be seen).

This outbreak is also occurring at a time when we have no Health and Human Services Secretary, thanks to:

The Service Employees International Union has launched an online petition criticizing Republicans for delaying the confirmation of a Health and Human Services secretary in the face of a swine flu outbreak.

The union accuses Senate Republicans of delaying the confirmation of nominee Kathleen Sebelius to “curry favor with extremist outside groups” and depriving the department of leadership as the nation confronts a potential flu pandemic.

“This is simply unacceptable,” the union says on its website. “This disease is spreading as we speak, but right now, a Bush-appointed accountant is running the department. We need an HHS secretary NOW. Sign the petition telling the Senate to vote immediately to confirm Gov. Kathleen Sebelius. If we don't act, the swine flu might just turn into another Hurricane Katrina.”

To Republicans, governance comes last. Winning a cable news debate comes first. The country suffers.

Sign the petition.

The (Blue Dog) Owls Are Not What They Seem

You have to be something of a Kremlinologist to decipher the true meaning of Senate Democratic statements these days. In all of these matters it helps to focus on actions. For example, Kent Conrad (D-ND). As the chair of the Senate Budget Committee, he has been the most vocal about the widening deficit, the new CBO scoring showing that deficit widening even further, and how President Obama's plans are simply too ambitious for words. Sounds like the old fiscal responsibility thing, right? Well, the actual budget summary from Conrad is entitled "Laying Foundation for Long-Term Economic Security With Investments in Energy, Education, and Health Care," and the proposals do track the President's major long-term goals. And the supposed "cost-savings" in his budget plan are mainly derived from a bunch of gimmicks.

...someone who was genuinely alarmed by the fact that the CBO scored Obama’s plans as leading to large deficits in the final years of his ten year budget would not have “solved” this problem by abandoning Obama’s ten-year budget window switching to a five-year window. Similarly, re-inserting the “let’s pretend will use the AMT to raise taxes on the upper-middle class and then not actually do that” approach to budgeting, though now a time-honored trick of the Bush years, is not an actual deficit reduction measure.

Long story short, Senator Conrad cares about the deficit and is taking some action to make it smaller. But he also cares a great deal about being seen as a deficit hawk, the kind of guy who’s not afraid to take an axe to the president’s proposals. And in this instance the administration rather smartly eschewed a lot of this kind of pain free “virtual” deficit reduction, thus making it possible for interested Senators to deploy favored accounting patches on their own initiative and take credit for more reduction than they actually produced.

The White House seems to have no problem with the changes made, because the changes for the most part are made of air. And in some sense, Conrad actually enhanced the prospect of health care reform, by offering revenue-neutral space for a reform fund and allowing that particular budget item to be scored on a 10-year timeline, so that the savings in the later years can allow for an up-front deficit. And while Conrad deleted reconciliation for health care and energy proposals, because they exist (at least for health care) in the House version, they can be imported at a later date, meaning the threat can still be held over the heads of Republicans.

So Conrad appears to me to be someone who wants to appear like a centrist while facilitating the needs of a progressive budget, in direct contrast to Evan Bayh, Tom Carper and Blanche Lincoln, who want to appear like supporters of the President while obstructing and hacking up his agenda:

We formed our working group because we recognize both the difficulty and the urgency of accomplishing a huge and ambitious agenda. We must act quickly and decisively to repair our financial markets and start to turn the economy around. In addition, we believe that President Obama is correct when he says that we cannot afford to wait any longer to fix health care and transition to a clean-energy economy.

These are titanic and complicated tasks, and we believe that many worthwhile policy solutions can be found in the practical center -- ideas that also have the benefit of appealing to vast segments of the American electorate. Unfortunately, the Republican leadership has basically decided to stay on the sidelines to let the Democrats carry the load of reform alone.

As moderate leaders, it is not our intent to water down the president's agenda. We intend to strengthen and sustain it. Moderation is not a mathematical process of finding the center for its own sake. Practical solutions are practical because they offer our best chance to make a difference in people's lives today without forcing our children to pick up the tab tomorrow.

The stakes are too high for Democrats to fear a policy debate. Such debates produce better legislation. On nearly all important votes, a supermajority of 60 senators will be needed to pass legislation. Without Democratic moderates working to find common ground with reasonable Republicans, the president's agenda could well be filibustered into oblivion.

It's really not possible to take these people seriously. The whole "practical solutions are great because they are practical" part really gives you the sense of who you're dealing with here. They live in a magical pony and fairy land where they, only they, can bring the nation together, despite all evidence to the contrary, by just clicking their heels and magically finding those "reasonable" Republican votes for anything but the most watered-down policy. They are also very worried that if Obama passes the agenda on which he ran, moderates who voted for him will be very upset and will throw Democrats out of office in 2010. That's really their response. And none of them, just like their partner in crime Susan Collins can actually name anything they'd cut, or explain why a 51-vote majority is undemocratic:

"I'm very concerned that the levels of debt that the president's budget would entail are simply unsustainable and would pose a significant threat to the health of our economy," said Sen. Susan Collins, a Maine Republican who plays a pivotal role in Senate negotiations. "I've had conversations with several centrist Democrats who have exactly the same concerns I do."

Well, what would you cut? "One of the areas I would look at are the huge agricultural subsidies," she said. Those farm payments are one of the few cuts Obama has already proposed, which Collins added was "to his credit."

Anything else? "I thought I did pretty well coming up with one right off the top of my head," she said [...]

Sen. Mary Landrieu (D-La.) said she leans no on Obama's budget because of its size but is open to being convinced. She's not looking forward to cutting it, however. "That's always the problem. How to cut back and what to cut back," she said.

Yet the main change that Landrieu would like to see highlights the political contradiction at work. Tax hikes on independent oil and gas producers, many of whom operate in the Gulf, she said, are a "non-starter." Removing that tax hike, though, increases the deficit [...]

"Reconciliation should not be used to impose a major policy change. It's unfair to those who hold a minority view," Collins added.

Isn't that undemocratic? Collins was asked why she and a handful of senators should wield so much power over the nation's policy.

"I don't really think I have all that much power but I'm glad you think so," she said, laughing.

"I don't think it has anything to do with the power structure of moderates," she added. "People want to see healthcare reform, want to see us deal with major issues, but not in an undemocratic fashion. I think people want to see fuller debate and deliberation and more involvement by the minority."

But isn't the need for 60 votes undemocratic? Didn't the nation have a full debate, followed by an election in which people voted for major change?

"I disagree totally with that," said Collins. "I do not believe the American people voted to short circuit debate and prevent people with a minority view on both sides of the aisle from having the ability to amend a bill."

Behold the reasonable, responsible moderates who will save us from this crisis and return America to glory again.

Pardon me while I go throw myself in the ocean.

Stimulus Pre-Post-Mortem

It looked touch and go for the stimulus conference deal for a minute today, as House Democrats balked at the lack of school construction money in the bill (or maybe just not being consulted), but that seems to have been squared away. And so maybe it's a good time to look back.

On the bill itself, it's still probably too small to do the lifting it needs to do, and the inclusion of the patch to the alternative minimum tax is the most inexcusable part of it.

But the final bill retained a $70 billion tax cut that would spare millions of middle-class Americans from paying the alternative minimum tax in 2009, which some Democrats decried as wasting a large chunk of the bill on something that would do little to lift the economy and that Congress would have approved regardless of the recession [...]

“I am not happy with it,” said Senator Tom Harkin, Democrat of Iowa. “You are not looking at a happy camper. I mean, they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.”

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “which we were going to do later this year in a tax bill. Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery. This makes no sense whatsoever.”

The answer is that Republicans and quite a few Democrats are too cowardly to rewrite the tax code and offset the AMT patch with new revenue. Nobody thinks that a tax meant to hit high-income tax dodgers should come into play for an individual making $100,000 a year or even less; but if that's the case, Congress should change the law permanently, instead of these silly one-year patches that allow them to evade responsibility.

And yet the Axis of Centrism has the audacity to call their effort to gut the bill of some of its effectiveness "fiscally responsibile." There is no legitimate reason to cancel out state government aid or school construction funding - Nelson, Collins and Specter set an arbitrary number of $800 billion and demanded compliance, and they got it. Of course, Arlen made sure his pet project, funding for the NIH, stayed. There's no reason to it at all.

Which is why I think the sausage-making we saw is mostly due to giving power and agency to the moderates, and most of that is on Harry Reid. Barack Obama is right to say that he should have started the bill with no tax cuts and let those who put them in own them. I'm glad he learned that lesson. I'm not sure it would have made a fundamental difference to the final outcome. A majority of the Senate wanted to lard this up with tax cuts. The dynamic of the filibuster gives a lot of agency to those two or three Republicans on the margins. There are things Obama and the Democrats could have done, certainly. One is to insist that Al Franken be seated to narrow the margins needed for passage - or at least confirm Judd Gregg and use the open seat in New Hampshire as a lever to get Franken in. The passivity there is shocking. And of course, Obama's public offensive on the bill happened about a week late.

Digby writes about the differences when George Bush barely skated into the Oval Office, immediately asked for a huge tax cut, and got most of what he wanted, as opposed to what we saw here. That's because there is no bargaining partner on the Republican side of the aisle, that their nature is not to govern but to oppose, and they'll put party over country every time.

As for whether or not this will be the last chance for Obama to push forward his agenda - I'm not sure. In the short term, Obama's probably stronger for getting this passed, though public opinion hasn't really worked on Republicans yet. And Stan Collender reminds that there's a budget to be passed, which will have the opportunity for stimulus.

The continuing resolution put in place last Fall to cover the nine 2009 appropriations that were not enacted by the start of the fiscal year will expire on March and additional spending almost certainly will be added to the levels currently in place just a week or so after the stimulus is signed.

The Obama 2010 budget will start that year's budget process and the appropriations for that year will provide another opportunity for an additional economic jolt this Fall.

But even more important, the 2010 budget process could include a reconciliation bill that increases spending or reduces revenues or both that, because of the rules, won't be subject to a filibuster in the Senate. In addition, the budget resolution that has to be adopted before a reconciliation bill can happen also can't be filibustered.

Not only will that make another stimulus bill much easier to enact, it's also something that could happen any time after the budget resolution is adopted so the process could be completed relatively early this year and the stimulus provided quickly.

So there may be other bites at the apple. I too am worried about the pervasive talk of "entitlement reform" coming from some corners of Washington, especially in this time of economic hardship. But I really don't get the sense that it's anything more than a recognition that comprehensive health care reform must happen or the budget is toast. This has been Budget Director Peter Orszag's mantra for a while now.

Hopefully, everyone's learned some lessons from this battle and is ready to go to war for the next one. But the Senate is where the dynamic has to change. I'm all ears about how to get that done.

Wheelin' Dealin'

The conference negotiations on the stimulus package are going fast and could be done by mid-day, which obviously makes it hard to find the pressure points and apply them. Americans United For Change and AFSCME are running ads against recalcitrant Republicans, and they're pretty good, but obviously they're not the issue anymore. It's the Axis of Centrism still driving the negotiations.

In a sign of their determination to reconcile the differences between the Senate bill and the $820 billion House version swiftly, the White House chief of staff, Rahm Emanuel, and the budget director, Peter R. Orszag, huddled at the Capitol on Tuesday evening with Speaker Nancy Pelosi; the Senate majority leader, Harry Reid of Nevada; and other lawmakers.

Participants in the talks said they wanted to reduce the overall price to just under $800 billion.

The officials worked late into the night, with Mr. Reid shuttling between meetings with senators in his office and House leaders in Ms. Pelosi’s suite. Centrist senators who were crucial to the stimulus deal, Susan Collins and Olympia J. Snowe, Republicans of Maine, Ben Nelson, Democrat of Nebraska, and Joseph I. Lieberman, independent of Connecticut, returned around 9 p.m. for the talks and left about an hour later.

The group broke for the night shortly before 11:30 p.m. “We’re not there,” Mr. Reid said. “But we have made a significant amount of progress in the last 10 hours.”

You read that right, they want to make additional cuts from what the House and Senate passed. Why? Because a cut is a universal good, silly.

There are differing stories out there. The New York Times piece claims that the Senate cuts to Medicaid and COBRA would remain in the final bill, while the cuts to Obama's signature middle class tax cut would be restored. But the Wall Street Journal sees Obama seeking lots of spending restorations:

The White House is seeking to restore funding cut by the Senate for schools, health insurance and computerizing health records as the economic-stimulus plan heads for a final round of negotiations in Congress this week.
...
To make room for added spending, the White House, joined by House Democratic leaders, is pressing to scale back certain Senate-passed tax breaks, including ... an $11.5 billion proposal to give car buyers a tax deduction covering local sales taxes and interest on auto loans, and a $35 billion proposal to create a new tax credit for home purchases.

Clearly the home buyer tax credit is ridiculous. It will go mainly to people who were going to buy homes anyway, won't create new home construction, and will simply reinflate the bubble rather than stabilize home prices. Max Baucus said that the home buyer credit and the auto credit would probably be modified but not eliminated. Hopefully the cuts to programs like school construction, which Obama was consistently supported, will come back. However, the aid for state governments appears gone for good, which is a shame.

Obama's negotiating team insisted on restoring some lost funding for school construction projects as talks began Tuesday in hopes of striking a quick agreement, but by late in the day it appeared resigned to losing up to $40 billion in aid to state governments.

To the extent that Republicans are impacting this at all, they are making robocalls in Pennsylvania and Maine against the bill, trying to squeeze Specter, Collins and Snowe. And a separate GOP group is threatening primary campaigns against these three and anyone else who supports the bill. This is the typical way that Republicans try to maintain party discipline, and while it can occasionally work locally, it wasn't enough to beat Specter in a statewide primary six years ago.

But that doesn't matter. The Axis of Centrism sees reducing the effectiveness of the bill as an end in itself. They've already reduced it to a half-measure, and they're coming back for more. Did Obama's early emphasis on post-partisanship rather than browbeating Republicans into acceptance change this reality? I'm not really sure. The moderates seem to be goring this bill and liking it, and no matter Obama's pose he would still be constrained by the essential nature of getting something passed.

It's Susan Collins and Ben Nelson's world, we're just living in it.

Nuke Bailout

Apparently Presidents Nelson and Collins got it in their heads to include a billion dollars to the National Nuclear Security Administration for "weapons activities" in the stimulus. Once again we see that fiscal responsibility is deathly important, and fixing up dilapidated schools is not in the public interest because big gubmint shouldn't be messing around with education, but building another generation of muclear weapons is legitimate because military spending is magic and it never affects the budget bottom line.

By the way, here's a list of the main sites for US nuclear weapons research, development, testing, and production. You'll notice that they're conveniently located all over the country so that lots and lots of Senators have a vested interest in their continued production.

This is one issue where the Obama Administration has actually been pretty clear. They are implementing a full review which will examine the needs for nuclear weapons in the post-Cold War environment, and they are seeking sharp reductions in stockpiles in a comprehensive treaty with the Russians. There is absolutely no need for additional funding of nuclear weapons given that the President has called to rid the world of them.

But we can't afford more money for Head Start, you see. Or critical public health priorities.

Feel The Centrist Pride

Presidents Ben Nelson and Susan Collins today were strutting their peacock feathers and engaging in a full round of back-patting for cutting back the stimulus package, using weasel words that would have launched 1,000 George Carlin bits:

Q: Do you agree, or how do you respond to Paul Krugman in the New York Times who said that centrists have done their best to “make the plan weaker and worse?”

NELSON: Well, first of all, they’re not cuts. Let’s just get that up front. These are adjustments downward from numbers that were offered by the House in their version and by the Senate in its version.

"Adjustments downward." Sounds like something an accountant would make. Just an eraser swipe and a stroke of a pencil in the ledger. Nothing harmful. Just an adjustment.

Except that those adjustments will cost hundreds of thousands of people their jobs, and more importantly, will cost them the ability to produce in the economy and provide income tax revenue and increase economic activity, which is the whole point of the bill.

The House puts greater emphasis on helping states and localities avoid wide-scale cuts in services and layoffs of public employees. The Senate cut $40 billion of that aid from its bill, which is expected to be approved Tuesday.

The Senate plan, reached in an agreement late Friday between Democrats and three moderate Republicans, focuses somewhat more heavily on tax cuts, provides far less generous health care subsidies for the unemployed and lowers a proposed increase in food stamps.

To help allay Republican concerns about the cost, the Senate proposal even scales back President Obama’s signature middle-class tax cut. The Senate plan also creates new tax incentives to encourage Americans to buy homes and cars within the next year.

As Krugman notes, the centrists "did their best to make the plan weaker and worse," and the sickest thing is that they seem to be proud of it, touting aid to education in their version of the bill when they actually slashed it:

I’m really shocked by the extent to which the architects of the Senate cuts to the recovery package aren’t being made to offer any kind of justification for their actions. And in the absence of pressure, they certainly aren’t doing it of their own accord. I wanted to see, for example, what Ben Nelson (D-NE) had to say for himself, and what he had to say was this, with his partner in crime Susan Collins (R-ME) chiming in:

“This bipartisan agreement delivers the help millions of Americans need in this time of economic turmoil,” said Senator Nelson. “It fuels two powerful engines: major tax cuts for the middle class, and targeted investments in American infrastructure and job growth. It also pares back $110 billion of spending that didn’t belong in the bill. We’ve trimmed the fat, fried the bacon, and milked the sacred cows. What remains will fund education, an energy Smart Grid, tax credits for homebuyers and other critical infrastructure.” [...]

Would you ever in a million years have guessed from this rhetoric that the primary change Collins and Nelson made was to implement big reductions in aid to states and, especially, in funding for education? I think not. In their rhetoric, Collins and Nelson preserved vital education funding and state assistance while eliminating various metaphorical animal products. Meanwhile, actual changes Collins and Nelson made include:

• Elimination of $25 billion in flexible funding for state governments.
• Cut $7.5 billion in funding for “state incentive grants” to help states make progress toward NCLB goals.
• Eliminated $19.5 billion in construction aid for schools and colleges.
• Reduced new aid for the Head Start early childhood program by $1 billion.

The absolute worst part is the cuts to state aid, which will force the states to cut their budgets and reduce jobs during a recession, ensuring that it will be longer and deeper. The proud as a peacock centrists made it so that the states will have to actively work against the recovery package itself.

All so they could make room for tax cuts to wealthy people who flip their houses, and the patch to the alternative minimum tax, which these supposedly fiscally responsible Senators are too cowardly to pay for. They stuck it in this stimulus so they wouldn't have to offset the $70 billion dollar cost with revenue increases. Nelson, Collins and all the rest can never call themselves fiscally responsible ever again. This is the most irresponsible thing I've ever seen.

The question is, as I've said repeatedly, what happens in conference. The centrists are talking tough, saying that any significant changes to the bill will be met by them with a no vote.

Reconciling the remaining differences won't be easy. Even before negotiations have started, one influential Republican supporter of the bill, Sen. Susan Collins of Maine, is stressing her desire for the cost of the final package to be held to $800 billion. She is suggesting that her support for a final compromise package can't be taken for granted. "I made no commitments," she said.

And it can be, by taking out these silly, non-stimulative tax breaks and adding back in precisely the kind of targeted, temporary spending, to schools and state governments and relief for the poor, that the bill was designed to do. The President said today at the Elkhart, IN town hall: "The Senate version cut a lot of these education dollars. I would like to see some of it restored." There is upward momentum from 3,000 local town hall meetings this weekend, many of which came to their own conclusions
about the importance of the type of things taken out of the Senate version. Will Susan Collins or Olympia Snowe or Ben Nelson or Arlen Specter tank the economy because they don't get everything on their wish list? I'm not so sure. Specter has acknowledged the pressure from the left side of the aisle leading him to support a compromise, and in his WaPo op-ed today he said that inaction is not an option. The moderates sat by idly when their compromises were dropped in conference during the Bush years time and again. Would they stonewall a different conference report this time, and be on the hook for economic disaster?

I think it's unclear. And it's worth keeping up the pressure to let Congress know that we want a big, bold plan that restores cuts to the states and education at the expense of non-stimulative tax cuts.

Capital switchboard

House

Senate

...Joe Lieberman nominates moderates for the Congressional Medal of Honor. If the chance to make Holy Joe cry doesn't get you to the phones, what will?

Senate Proud To Sink The States

Both the Washington Post and the LA Times have stories today about the budget crises facing the states, where governors and legislatures have exhausted every gimmick and now must enact painful cuts that will work against the federal program to bring us out of the economic downturn. The personal stories are significant:

Nevada resident Margaret Frye-Jackman, 71, was diagnosed in August with ovarian cancer. She had two rounds of chemotherapy at University Medical Center, the only public hospital in the Las Vegas area.

Soon after, she and her daughter heard the news on TV: The hospital's outpatient oncology services were closing because of state Medicaid cuts. Treatment for Frye-Jackman and hundreds of other cancer patients was eliminated [...]

"If this is what it's like in Nevada, with cancer stuff closing, is it like that everywhere?" said Frye-Jackman's daughter, Margaret Bakes, accompanying her mother to the doctor's recently. "Are all the other states closing stuff too?"

The answer, in at least 39 states, is "yes" -- or "soon." With personal, sales and corporate income tax revenue plummeting, state governments -- which recently trimmed their budgets to cover a cumulative $40.3-billion shortfall for the current fiscal year -- are now watching in horror as a $47.4-billion gap opens for 2009.

And for fiscal year 2010, they will face a $84.3-billion hole, according to the National Conference of State Legislatures. The total shortfall through fiscal 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington.

This article frames it as there being "no choice" but tough budget cuts or tax increases for states facing shortfalls, states that cannot print money or run budget deficits. But that's not entirely true. There was a good deal of help being offered by the federal government in the House stimulus bill, which included $79 billion in state fiscal stabilization aid. But among their other cuts, the Axis of Centrism cut that aid in half, by $40 billion dollars, and in so doing guaranteed additional layoffs to teachers and firefighters and cops and nurses and all sorts of other professions which rely on a state paycheck.

California law mandates that layoff notices to teachers be given out by March 15 for the next school year. Arnold Schwarzenegger is proposing $10 billion in education cuts. Republicans, which use our state's rule requiring a 2/3 vote of the legislature to pass a budget, are demanding these cuts as the price of a tax increase to close the remaining $40 billion and ensure that the cuts aren't bigger.

But all of us were hoping and expecting that the US Congress would come through with aid to stabilize state budgets, to help ameliorate the problem and save teacher jobs by providing stimulus money. It must be in the stimulus because, as I just noted, the layoff notices will go out within 5 weeks - there is no time to include it in another bill.

Now we are told that Ben Nelson and Susan Collins, two Republican Senators, have reached a deal to cut that education assistance and that the Senate is likely to accept it.

In short, what they have done is guarantee to my sister and to thousands like her that they will receive a pink slip within five weeks.

To call this fearmongering, as John Ensign did on Meet the Press today, just denies reality, par for the course for both Republicans and bipartisan fetishists like Claire McCaskill, who was at first giddy about cutting 600,000-700,000 jobs in the stimulus, and then passive-aggressively "defended" it by saying the alternative was no bill.

Claire McCaskill is now defending herself against Krugman on Twitter:

Just saw Krugman's comments on reduction in recov act. Question for him. Would no stimulus act be better than one thats 800 B instead of 900.

She follows that up with

Compromise had to happen or we would NOT have 60 votes. Period.

And for further evidence of how much the bill is the same, she claims:

Original Senate bill was 60% appropriationss, 40%tax cuts. Compromise was 58, 42.Senate bill is 90% the same as House bill.

I'm glad that's she expressing herself here, and that we're able to somewhat have a dialogue. But I'm not sure how much in good faith it is. McCaskill began by stating how glad she was that they got a $100 billion cut out of the bill, that the "silly stuff" that Republicans didn't like is now out. She then switches to a passive aggressive mode in defending the cuts - it's basically the same bill and it wouldn't have made it through the Senate - but glosses her own role in making the cuts. From the way she talks about the bill, wouldn't she have been among those voting against the bill if the cuts hadn't been made and new non-stimulative tax cuts hadn't been added in?

McCaskill doesn't want to admit her role in putting 600,000 Americans out of work on Friday, which will harm public safety and increase class sizes and shut down bus and rail lines and send the sick and uninsured looking in vain for treatment and a host of other inadvisable outcomes. And there's no rational economic reason for it, just that the Axis of Centrism choked on the price tag and had to compensate for the non-stimulative tax cuts the Senate tossed into the bill. Massive job loss or increased property tax rates (as states compensate for the loss to education funds) is on McCaskill and Nelson and Collins and Spector's hands.

The big question is what will come out of the House-Senate conference next week, whether the cuts, especially the state government relief, will be restored at the expense of things like the $70 billion dollar patch to the alternative minimum tax. Larry Summers left that an open question on ABC this morning.

One of President Barack Obama's top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration's massive spending and tax cut package to stimulate the failing economy.

The $827 billion Senate version of the plan -- designed to bring the economy out of the worst downward spiral since the Great Depression -- was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.

And in the opening moments of This Week, an exchange between George Stephanopoulos and Larry Summers went like this:

STEPHANOPOULOS: ...does that mean the President prefers the Senate version to the House version?

SUMMERS: No, the President feels that above all, we need a major program enacted very quickly that would create 3 to 4 million jobs. He believes we need to perfect it in every way we can.

If the cuts are restored, suddenly the sense of urgency works back in the direction of passing a bill more like the House version. The Republican business lobby is urging passage. I don't think the moderates signed on to the bill could break ranks on the final vote if the changes in conference are limited to, say, swapping the state cuts for the AMT patch, combined with an assurance from the President that they will make that fix down the road.

The Lowdown

OK, with a day to sit back and figure things out, here's what's going on.

The Senate is going to pass their version of the bill by noon on Tuesday at the latest, depending on how much Republicans want to obstruct. There will be a cloture vote on Monday at 5:30ET. Here's a list of what the Axis of Nelson-Collins cut out of the bill to make room for more tax cuts.

$40 billion State Fiscal Stabilization
$16 billion School Construction
$1.25 billion project based rental
$2.25 Neighborhood Stabilization (Eliminate)
$1.2 billion in Retrofiting Project 8 Housing
$7.5 billion of State Incentive Grants
$3.5 billion Higher Ed Construction (Eliminated)
$ 100 million FSA modernization
$50 million CSERES Research
$65 million Watershed Rehab
$30 million SD Salaries
$100 million Distance Learning
$98 million School Nutrition
$50 million aquaculture
$2 billion broadband
$1 billion Head Start/Early Start
$5.8 billion Health Prevention Activity.
$2 billion HIT Grants
$1 billion Energy Loan Guarantees
$4.5 billion GSA
$3.5 billion Federal Bldgs Greening

The $40 billion for state aid is astounding. You're not going to see an economic recovery if the states are having to cut budgets at the same time the feds expand them. They'll cancel each other out.

What you don't see in there are the three big tax cuts that the Senate put in this bill that has crowded out this spending, not for reasons of effectiveness, but purely because squishy moderates couldn't live with a $900 billion dollar bill. They are:

1) $70 billion dollars for a patch so that the Alternative Minimum Tax (AMT) doesn't affect high-middle-income earners making under $1 million dollars a year. This is passed annually because Congress is too cowardly to rewrite the tax code. But it doesn't belong in a stimulus bill, as no less than House Minority Whip JON KYL just said in a floor speech. People making $400,000 a year aren't likely to spend money they get to keep as a result of fixing the AMT.

2) At least $35 billion dollars for a $15,000 home buyer's tax credit, which will only go to people who have enough money to buy a house. This is a craven attempt to reinflate the housing bubble before prices have settled, and because there's so much inventory on the market it will not spur hardly any new home construction.

3) Around $11 billion for a tax credit for car buyers, which will only go to people who have enough money to buy a new car. This is not tied to greening the US fleet and will be implemented before fuel economy standards have changed over, so it doesn't even reward fuel efficiency or reducing greenhouse gas emissions.

These are tax breaks for suburbanites, which in all likelihood won't get spent at anywhere near the rates that they would in the hands of the poor or middle class. And they won't create jobs, either.

Arlen Specter, one of the moderate squishes, said this is the best they can do. The above tax cuts are most certainly not. In particular, the House is piqued about the AMT patch in the bill.

House moderates oppose including the AMT provision in the stimulus package, arguing that the issue should be addressed in the regular budget process so that its cost can be offset by spending cuts or tax increases. But until yesterday, House leaders appeared willing to accept the provision, which was added at the urging of Sen. Charles E. Grassley (Iowa), the senior Republican on the Senate Finance Committee.

With AMT in and some of House Democrats' top spending priorities out, the package could become much more difficult for many House members to swallow, Democratic aides said. House Majority Leader Steny H. Hoyer (D-Md.) said House Democrats will push hard to restore the Senate's deletions. That means, lawmakers said, that the overall cost would grow to around $900 billion to accommodate the AMT fix.

This is the next step. The bill will go to a House-Senate conference. According to Kagro X in a must-read post, the Senate wants the House to swallow this bill whole, claiming that they cannot pass the bill if anything is deleted.

Assuming passage on Tuesday, the House will then have the option to accept the Senate package as is, to make still more amendments and send it back to the Senate, or to agree to the Senate's request for a formal conference to resolve their differences. It is the Senate's announced intention (also included in the unanimous consent agreements from last night) to insist on its version of the bill in conference. If the House acts immediately either to pass the bill or to go to conference, they would have an opportunity to do so Tuesday afternoon. The self-imposed deadline for clearing the bill for the White House falls prior to the scheduled adjournment for the President's Day recess at the end of next week. That doesn't leave a lot of time, and increases the pressure on the House and the likelihood that they'll be forced either to accept the Senate bill, or make only minor changes.

You're going to see a lot of House-Senate wrangling. The Senate could adjourn prematurely and stick the House with the bill. They'll create a sense of urgency through an artificial deadline. And they'll try to ram this flawed bill down the House's throat.

The question is whether or not the Senate moderates would be willing to sink the economy if the House makes changes to the bill in conference that are more than cosmetic. Obviously the rump faction of the Senate isn't going to alter their stance, you can't compromise with crazy. But the Snowe-Collins-Specter-Nelson faction kind of knows that something has to be done. The President is talking up job creation and will be hitting the road this week to increase the pressure. If you want more jobs, you have to eliminate the AMT patch, which can be reconciled through a regular process with offsets, and add back the spending to the states, school construction, and more, which will probably add a million more jobs. Otherwise, you're going to see cops, firefighters, nurses and teachers out on the street (John Kerry is explaining this very well on the Senate floor).

Will the House force the moderates in the Senate to eat a shit sandwich? Will the moderates do it, or will they vote against the bill and sink the economy? There can be no amendments to a conference report, but the bill will need a 3/5 vote. Again, Kagro X:

Just as the bill was subject to a budget point of order in the Senate, so will the conference report be. So the Senate will need 60 votes, filibuster or no, to pass any conference report. That, too, will increase pressure on the House to defer to the Senate position. Senate conferees will no doubt insist that nothing but their Perfect and All-Wise version of the bill could ever muster the necessary 60 votes, and House conferees will have to measure any changes they propose against the likelihood that the Senate's claims are true.

This is a big game of chicken, but if the President and House Democrats can generate enough grassroots support, they may have the cover to swap state spending in and the AMT patch or some of these other suburbanite amendments out.

The other thing, as I've said before, is that the Senate can help themselves by immediately confirming Judd Gregg for Commerce Secretary. Gregg is now recusing himself from all recovery package votes, which is the same as a no vote under the circumstances. Confirming him would reduce the number of Senators to 98, which would mean only 59 votes would be needed for passage. It reduces the moderates needed to eat the shit sandwich by one. If Bonnie Newman then came to the Senate to be seated, she could be blocked unless Al Franken is seated in a compromise action, which would get us 59 Democratic Senators and again keep the number of moderate squishes needed to one. I have no idea why Harry Reid isn't doing this. If he's afraid of Republican bleating he could schedule the Gregg vote immediately before the final vote on recovery and shock doctrine them.

That's basically what's going on. I think the pressure points are Harry Reid and Nancy Pelosi. Tell Reid to allow a real conference instead of forcing the House to make changes, and tell Pelosi that we'll have her back if she strips the AMT patch and adds back aid to the states.

Presidents Nelson, Collins Upbeat After Saving Bipartisanship

Washington (BP) - Presidents Susan Collins, the historic first female President, and Ben Nelson, the historic first Nebraskan President (OK, Ford, but he was only born there), were reported in good spirits after working long into the night to save bipartisanship on the $780 billion dollar stimulus package. Just three weeks after their inauguration, they were able to avert the bipartisanship crisis and come together to restore the faith of everyone working as on-air or print talent in the media industry in the vicinity of Georgetown, Bethesda, MD and Arlongton, VA.

Sen. Ben Nelson, a Democrat from Nebraska and one of the chief negotiators of the plan, said senators had trimmed the plan to $827 billion in tax cuts and spending on infrastructure, housing and other programs that would create or save jobs.

"We trimmed the fat, fried the bacon and milked the sacred cows," Nelson said as debate began.

According to several senators, the revised version of the plan axed money for school construction and nearly $90 million for fighting pandemic flu, among other things.

Remaining in the plan are tax incentives for small businesses, a one-year fix of the unpopular alternative-minimum tax and tax-relief for low- and middle-income families, said Sen. Susan Collins of Maine, who was the most prominent Republican negotiator in the bipartisan talks.

"Our country faces a grave economic crisis and the American people want us to work together," she said. "They don't want to see us dividing along partisan lines on the most serious crisis facing our country."

Making the recovery bill safe for tax cuts and free of wasteful spending like $40 billion in aid to states which will now have to lay off hundreds of thousands of workers was "a very liberating process," Presidents Nelson and Collins said before repairing to separate corners of the White House with their families. "It feels good to have that sense of accomplishment that comes with kicking firefighters and teachers out onto the street and seeing others slip into poverty," Nelson and Collins said in unison. "They said it couldn't be done!" The Presidents offered a list of wasteful nonsense that was excised:

In addition to the large cut in state aid, the Senate agreement would cut nearly $20 billion proposed for school construction; $8 billion to refurbish federal buildings and make them more energy efficient; $1 billion for the early childhood program Head Start; and $2 billion from a plan to expand broadband data networks in rural and underserved areas.

Collins and Nelson's chief of staff, former Illinois Congressman Rahm Emanuel, was singled out for praise:

Obama endorsed the moderates' effort and brought its leaders -- Sens. Ben Nelson (D-Neb.), Susan Collins (R-Maine) and Arlen Specter (R-Pa.) -- to the White House to discuss their proposed cuts. White House Chief of Staff Rahm Emanuel attended the final meetings in Reid's office last night to work out lingering differences. Before Emanuel arrived, Collins said, Democrats were advocating $63 billion in cuts. "Then Rahm got involved, and a much better proposal came forward," she said.

Once the expected Senate passage is completed, the bill will move to a conference committee with the House of Representatives, whose leader, Speaker Nancy Pelosi, called the new package "very damaging" and said she was very much opposed to the cuts. House Majority Whip Jim Clyburn was quoted as saying, "I don't think much of what the Senate is doing." In response, Presidents Collins and Nelson retorted, "Who died and elected them President?"

In other news, state Senator Barack Obama (D-IL) and his team won the Illinois Legislature pick-up basketball game last night by the score of 65-53.

Senate's Reverse-Midas Touch Turns Economic Recovery To Dung

When the initial Obama recovery plan came to the Congress, it had about a 40%-60% ratio between spending and tax cuts. That got reduced to around 33%-67% in the House bill. Based on the amendments that have passed and the inclusion of the AMT patch in the Senate, if the axis of Nelson-Collins are successful in scooping out $100 billion in spending that percentage could be closer to 50%-50%. This is especially true because the ridiculous home-buyer credit, passed last night, is now twice as costly as once imagined.

The measure, which had been championed by GOP Senator Johnny Isakson, would give $15,000 (or 10 percent of the purchase price, whichever is lower) to every person who buys a home in 2009.

As late as this afternoon, the overall price tag allotted for this measure was around $18.5 billion.

But the ultimate real world cost of this measure has been disputed, with some critics predicting that it would cost much more, given the expected levels of housing sales this year.

Turns out the critics may have been right. The nonpartisan Joint Committee on Taxation has just sent a letter to Chuck Schumer, who’s on the Finance Committee, responding to Schumer’s request that the Committee score an estimate of the measure’s cost.

The total price estimated by the Committee? $35.5 billion — double the original cost, says the letter, which was sent our way by Schumer’s staff.

So now we have a $35 billion dollar bailout for the mortgage industry in this bill, and the offsets are coming from state and local government relief, so county hospital workers and cops and firefighters can be thrown out of work?

This is lunacy. Robert Reich has an on-point explanation of how this debate SHOULD have gone, if we lived in a marginally sane country.

Regardless of your ideological stripe, you've got to see that when consumers and businesses stop spending and investing, there's only entity left to step into the breach. It's government. Major increases in government spending are necessary, and the spending must be on a very large scale. In the last several weeks the President has put forward the outlines of a stimulus plan, and has left it to the House and Senate to fill in the details. A tiny portion of the details that made it into the House version should be stripped away because they seem like old-fashioned pork. But most spending in the bill is absolutely appropriate. My worry is there's not nearly enough of spending to fill the shortfall in overall demand.

Yet at this very moment, Senate Republicans are seeking to strip the President's stimulus package of many of its spending provisions and substitute tax cuts. Part of this is pure pander: They know tax cuts are more popular with the public than government spending, even though spending is a far more effective way to stimulate the economy (more on this in a moment). Another part is pure partisan politics: Republicans are emboldened by Obama's willingness to court Republicans (taking three Republicans into his cabinet, bringing Republican leaders into the White House for consultations, putting all those business tax cuts into the stimulus bill in order to gain Republican favor) without getting anything at all back from the GOP. House Republicans snubbed the bill entirely. So, Senate Republicans say to themselves, what's to lose?

Plenty. Millions more jobs and a full-fledged Depression, for example.

We're adding in tax cuts that people will either give to bankers to pay down debt or keep in savings accounts in case they're the next to get fired. Maybe they'll buy some cheap crap from China. And we're taking out spending that can give people jobs and circulate multiple times through the economy to increase demand. This is so stupid.

Here's the deal. Obama pre-compromised with 40% tax cuts. That's too high, and I'd prefer having only the targeted, progressive tax cuts (like the child tax credit, tuition tax credit, and reduction in withholding) in there, but let's take the midpoint between Obama's initial offer and the House bill. That's 37.5% tax cuts. That ratio should be FIXED. If you add tax cuts in, you have to take tax cuts out so the ratio stays the same. If you want to give $35.5 billion to home buyers, you can eliminate those worthless business tax cuts in the exchange. Obama should announce that the ratio must be preserved or he cannot accept the bill. Veto threats work. These people cave.

...Maybe he'll do that this Monday. Greg Sargent reports that Obama will hold a nationally televised news conference. Maybe he can explain what a stimulus is and why it's needed, as well.

States Getting Screwed In Stimulus Trim-Down

If Republicans in Washington are offering a united front for neo-Hooverism and against any real effort to save the economy and prevent a Depression, Republicans out in the state who actually have to govern are doing anything but. Arnold Schwarzenegger and 18 other Democratic and Republican governors have come out in support of the recovery package, leading Dan Walters to call him Keynesian. Actually Arnold is just slightly less than insane, recognizing that without massive investment from the public sector, California will never be able to cover its budget deficit and revitalize its economy.

We support the objectives of ARRA and welcome the partnership it offers us as governors. The support for a temporary increase in the federal commitment for public education, health care (including cost control through initiatives such as health records IT), and for rebuilding our public infrastructure will create and preserve jobs today, and represents a sound investment in our long-term economic interests as well. We look forward to working with Congress and your Administration to advance an economic recovery package that puts federal dollars to work in our states in the quickest and most efficient manner as possible.

But this is being threatened in a big way. Yesterday we learned that enough moderates were blanching at the cost of the package to threaten its passage. President Obama met with the ringleaders of this neo-Hooverist movement, Sens. Ben Nelson and Susan Collins, and talked them part of the way off the ledge. They were planning up to $200 billion in cuts, but now have pared that down to closer to $100 billion. And in exchange for meaningless tax cuts and stupid initiatives like tax breaks for home and auto buyers (reinflating the bubble at great danger to the economy), they want to screw the states:

Sens. Ben Nelson (D-NE) and Susan Collins (R-ME) have come up with a list of about $100 billion in programs they want slashed from the stimulus package, according to a working draft of a staff paper outlining the cuts.

Among the biggest cuts under discussion: $24.8 billion in state stabilization money for education, which was intended to plug existing budget holes; $15 billion in state incentive grants for education; and $1.4 billion for the National Science Foundation, which is wracked by a porn-viewership flap. Pell Grants were the biggest program to survive the debate over cuts, with $13.9 billion staying intact.

Senate Democratic leaders are likely to bring this package up for a floor vote today, aiming to achieve a filibuster-proof margin in support of these cuts before pushing to pass the entire stimulus by day's end. Hang onto your hats.

Ben Nelson is now backing away from this draft, and it's no wonder. This would cripple states like California facing bug budget deficits. They didn't want to release these cuts until now because states having to fire cops and firefighters and teachers is deeply unpopular. But that's what slashing the stabilization fund would do. Given that budget money is fungible, that wouldn't just affect education but practically everything that states do.

This is typical of an anti-democratic body like the Senate, where the relative power of a state with 400,000 residents like Wyoming and one with 38 million like California is the same. California has a budget deficit bigger than the expenditures of 39 states and has all sorts of needs that could be filled by this package, creating hundreds of thousands of jobs and acting as a backbone for economic recovery. But you have small-state neo-Hooverist idiots like Charles Grassley who think their job is to sink the economy, apparently:

The House bill, written by the committee chaired by Rep. Henry A. Waxman (D-Beverly Hills), gives considerably more money to states whose unemployment rates have increased significantly. That would put California, with a 9.3% jobless rate in December, in the top tier of recipients -- along with New York, Florida and others.

The House "took an approach that recognizes that in the current recession, all states need some help, but some need more help than others," Waxman said. "It is only fair that the hardest-hit states with high unemployment receive more assistance than those with low unemployment."

But senators in some smaller states say the House provision would shortchange their constituents. "The legislation is biased to big states," Sen. Charles E. Grassley (R-Iowa) argued.

That's like saying the legislation is biased to people.

None of these people are explaining WHY the price tag has to shrink; it just does. And if it needs to go down, there are useless, not-multiplier tax cuts for businesses and people that can afford new cars and homes that have little to no stimulative value. They didn't have to insert them in the first place.

It would be absolutely absurd to cut off states - who are not to blame for the financial meltdown, and who cannot deficit spend - in exchange for giving away more tax cuts, with the same failed philosophy that got us into this mess. Now that these cuts are out in the open, there should be outrage.

Robo Smear

I think it's kind of stupid to invest in mass robocalls. I don't think they're nearly as effective as a human being, and while they're a good way to sneak in a negative attack, I'm not sure people invest a lot of credibility in a recorded voice. Certainly the anecdotal reaction to the highly negative calls coming from the McCain campaign in recent days suggest that they are backfiring. Worse, the dishonorable McCain hired exactly the same organization to make these robocalls that slimed him in South Carolina in 2000.

Well, it turns out FLS, which has offices in Phoenix and St. Paul, is basically the same outfit that George W. Bush hired to robo-slime McCain during the 2000 South Carolina primary, something that McCain repeatedly denounced with great outrage.

In 2000, the Washington Post reported that the Bush team's phone operation was conducted by a firm called Feathers, Hodges, Larson and Synhorst. A press release in 2003 (via Nexis) indicates that this firm had by then become Feathers, Larson and Synhorst, or FLS for short.

On February 20, 2000, McCain thundered that the robocalls hitting him -- done by this outfit -- were "hate calls" that had "inundated" him. Now, if Schoff is right, McCain appears to have enlisted the same outfit for his robo-slime campaign.

How perfect! No one could have made this one up if they'd tried.

Maine Senator Susan Collins, in a re-election fight of her own, asked McCain to stop making the calls into her own state. And the traditional media is beginning to see this for what it is, leading to more bad publicity.

But I just think they aren't effective. They're a band-aid for an inferior volunteer organization with little chance of matching Sen. Obama in voter contacts. That should frighten Republican stalwarts.

UPDATE: McCain addressed this through lying today:

WALLACE: But Senator, back — if I may, back in 2000 when you were the target of robo calls, you called these hate calls and you said...

MCCAIN: They worked.

WALLACE: ... and you said the following, "I promise you, I have never and will never have anything to do with that kind of political tactic."

Now you've hired the same guy who did the robo calls against you to — reportedly, to do the robo calls against Obama and the Republican Senator Susan Collins, the co-chair of your campaign in Maine, has asked you to stop the robo calls. Will you do that?

MCCAIN: Of course not. These are legitimate and truthful, and they are far different than the phone calls that were made about my family and about certain aspects that — things that this is — this is dramatically different, and either you haven't — didn't see those things in 2000...

WALLACE: No, I saw them.

MCCAIN: ... or you don't know the difference between that and what is a legitimate issue, and that is Senator Obama being truthful with the American people.

He's going to have to live with himself after this election is over. But let's face it- he's lying about this. The call has nothing to do with Obama being truthful about Bill Ayers. It asserts that Obama and Ayers were basically good friends. Others insinuate similar garbage. He's lying. He knows he's lying. And he has no honor.

As for the whining that Obama's raising too much money and it's going to lead to a scandal, you mean like using a front group for lying about your opponent?

The House And Senate Picture

Just wanted to update the look of things in the Congress (outside of California this time):

• MN-Sen: Al Franken has surged ahead of Norm Coleman and looks like he's going to take this one in Minnesota. The Coleman campaign tried to drive up Franken's negatives over the summer by scrutinizing some ticky-tack tax statements, all of which had very simple explanations. This turned out to be a fatal mistake considering all of the skeletons in Coleman's financial closet, especially all the gifts he receives from lobbyists and contributors - his rent, his utility bills, and even his CLOTHING. This led to an excruciating press conference where his spokesman was resigned to repeating "The Senator has reported ever gift he's ever received" over and over. Wow, what a flameout.

• AK-Sen: In Alaska, however, I'm not nearly as sure of this one as I was. The prosecution has been so incompetent in the Ted Stevens corruption case that the judge tossed out key evidence and the defense will again call for a mistrial. If Stevens is exonerated, whether through mistrial or acquittal, there will be a significant rebound in his poll numbers, and he's already nearly even right now. This ad from the DSCC is good, but I'm not sure it'll be good enough. I think Mark Begich is in some trouble.

• NC-Sen: VoteVets is back. They've revived their wildly successful body armor ad and set their sights on Elizabeth Dole. It's just as powerful as it was in 2006.



Liddy Dole is toast.

• ME-Sen: Interesting happenings in Maine. Susan Collins was popular enough for national Democrats to kind of leave the Tom Allen challenge for dead, but the twists and turns in the economic picture makes any Republican toxic. Sensing the changing winds, Planned Parenthood, which has endorsed Collins in the past as a bone to throw to a Republican for a couple good votes, turned around and endorsed Allen. Recent polls are tightening and there really could be a late rush.

• GA-Sen: I knew the polls were very close in Georgia, and nobody deserves to lose more than Saxby Chambliss, who unleashed that shameful ad in 2002 relating Max Cleland to Saxby Chambliss, but I didn't know a lot about Jim Martin the person. Turns out he's a progressive in Georgia:

With little money, but with a lot of gumption, energy, and a truly progressive message, Jim Martin has closed to a dead-heat in this race. He is pro-choice, pro-gay rights (supports ENDA and LLEA), a consumer advocate, committed civil libertarian (with ACLU awards for his efforts), opposes FISA telecom immunity, opposes the war in Iraq, is a strong environmentalist, a strong labor guy, a strong supporter of affirmative action, and so on. He is also a Vietnam vet, so perhaps he's destined for a Chambliss Special, but we can get his back. This is the kind of Democrat we can't even get in some Blue states, yet running on an explicitly progressive agenda, has a chance to represent the great state of Georgia while ousting the odious Chambliss at the same time.

If he can pull it off, it would be a clarion call that progressives can win anywhere and Democrats shouldn't be afraid of standing up for their policies.

• House of Reps.: I can't keep up with all the developments in the House - that's what Howie Klein is for. But what is clear is that the Republicans have a ton of seats to defend, more every day, and not a lot of cash to do it. That's why their campaign arm, the NRCC, is taking out an $8 million dollar loan to compete. Wait, House Republicans can GET A LOAN? In this credit market?

ME-Sen: Iraq Explodes Into Maine's Senate Race

Iraq is still going to be the major issue in the 2008 election, no matter how everyone wants to forget about it. The contours may be different, but the issue is still Iraq. If we're not talking about withdrawal or 100 years of occupation, we may be talking about waste, fraud, abuse, private military contractors, and government corruption. The Bush Administration ignored corruption in Iraq and from contractors like Halliburton and Blackwater. And now, progressive Democrat Tom Allen is hammering Susan Collins for the same thing - failing to conduct oversight of the massive corruption and profit-taking from these corporations. She's been the chair or the ranking member of the chief oversight committee in the Senate during the entire war, and she hasn't done a damn thing to see to the efficient management of the war machine. This report on a local TV station in Portland is pretty devastating, and a credit to local journalism in its ferocity.



The Portland Press-Herald also weighed in about this. Allen is starting to break through, and the issue he's using is Iraq.

Allen, who would be a major improvement and would be both a "more" and "better" Democrat, is within striking distance. Races like this will be the difference between a robust Democratic caucus in the Senate and a filibuster-proof landslide.