Friday, February 25, 2011

Wonkbook: Senate Dems announce their own spending cuts

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We're days away from a possible government shutdown, and the messages the two sides are offering are becoming more clear. The Republicans are the side that wants to cut. "It sounds like Senate Democrats are making progress towards our goal of cutting government spending to help the private sector create jobs," said Michael Steel, spokesman for House Speaker John A. Boehner. "Hopefully, that means they will support the [bill] with spending cuts that we will pass next week, rather than shutting down the government." Democrats are the side that wants to negotiate. "We're willing to go further," Sen. Richard J. Durbin said. "But that requires the sort of good-faith negotiations House Republicans refuse to engage in."

The endgame for both messages seems obvious enough: if we hit a shutdown, Republicans will accuse Democrats of ignoring the will of the people and the message of the election, while Democrats will accuse Republicans of being ideologues who were unwilling to negotiate a pragmatic compromise that would've avoided disaster. The bet the Democrats are making is that voters are ambivalent about specific cuts and care more about a well-run government than about slashing spending. Republicans are wagering that thd public thinks the mark of well-run government is slashing spending, even at the cost of a shutdown. I'd say something sage and predictive here, but I don't think anyone really knows how this will turn out. For all the confident allusions people make to 1994, that's but one data point.

Top Stories

Senate Democrats have announced their own spending cuts, report Lori Montgomery and Paul Kane: "With a political standoff over spending threatening to trigger a federal shutdown next week, Senate Democrats began drafting a plan Thursday to slice billions of dollars from domestic agency budgets over the next seven months, yielding to Republican demands to reduce the size of government this year. The plan will involve accelerating some of the $33 billion in program terminations and reductions included in President Obama's proposed budget for next year, a senior Senate Democratic aide said Thursday. Democrats are also looking at cuts that have been adopted by the Republican-controlled House, such as a plan to strip $8.5 billion for pet projects known as earmarks out of a measure aimed at keeping the government running through Sept. 30."

Freshman Republicans are finding that government "waste" has some supporters back home, reports Shailagh Murray: "As they return to their districts after the budget debate, Guinta and many of his fellow Republicans are discovering that fiscal responsibility can be a tricky business. Many federal programs reside in a vast gray zone, somewhere between worthy and wasteful. And while pledging to rise above local interests can establish a candidate as a principled outsider, for a member of Congress, it's often a quick way to guarantee a short career. 'This is not campaigning, this is governing,' [Rep. Frank] Guinta said in an interview. 'They're two very different things. And you have to be very careful what you say when you're campaigning, because people will hold you accountable.'"

GOP governors outside Wisconsin are backing down on labor issues, report Ariana Eunjung Cha and Amy Goldstein: "Republican leaders in several states softened their attacks on public employee unions on Thursday in an effort to avert the fiery demonstrations that have gripped Wisconsin's state Capitol for two weeks. In Ohio, Republican lawmakers agreed to modify a bill that would have banned collective bargaining, allowing state workers to negotiate on wages. Michigan's GOP governor offered to negotiate with public employees rather than create political gridlock...Even in Wisconsin - where more than 60,000 demonstrators have camped out at the Capitol for the past week to protest a budget plan by Gov. Scott Walker (R) to end collective-bargaining rights for public employees - Republicans and Democrats took a small but significant step toward resolving their clash."

Banks are skeptical of the White House's mortgage plan, report Nick Timiraos, Dan Fitzpatrick, and Ruth Simon: "The banking industry privately knocked the Obama administration's nascent proposal to force banks to modify mortgage loans, saying the plan won't help solve problems facing troubled borrowers. The nation's largest banks haven't yet seen a proposal that is designed to help resolve mortgage-servicing errors that affected troubled borrowers. But industry executives are bristling at the administration's new approach, disagreeing that principal reductions will help borrowers and, in turn, the broader housing market. Though a unified settlement is uncertain and would have to appease regulators, banks and state attorneys general, some officials are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers."

Mitch Daniels should run for president, writes David Brooks: "This is the G.O.P. quandary. The man who would be the party?s strongest candidate for the presidency is seriously thinking about not running. The country could use a serious, competent manager, which Governor Daniels has been, and still he?s thinking about not running. The historic moment calls for someone who can restrain debt while still helping government efficiently perform its duties. Daniels has spent his whole career preparing for this kind of moment, and still he?s thinking about not running."

Cat Power interlude: Chan Marshall plays "Maybe Not" on the Late Show with David Letterman.

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Still to come: The House wants to defund mortgage modification; the administration is assuring governors they have flexibility on health care reform; the White House has been meeting with lobbyists off the books; the administration is under increased pressure to allow offshore drilling; and the Muppets rock out to LCD Soundsystem.

Economy

The House wants to defund the administration's mortgage modification program, reports Alan Fram: "House committee plans to write legislation next week ending the Obama administration's flagship effort for helping struggling homeowners avoid foreclosure and abolishing three other housing assistance programs. At its meeting next Thursday, the highest-profile target of the Republican-run House Financial Services Committee will be the Home Affordable Modification Program. The Treasury Department has acknowledged the program won't meet its original goal of preventing 3 million to 4 million foreclosures, and last month a federal inspector general said it has been a failure. The bill comes at a time when Republicans are proposing deep spending cuts across the federal budget."

Senate Democrats are reviving Al Gore's Social Security "lockbox" idea: http://bit.ly/eSqafV

Regulators are warning against budget cuts to the CFTC, reports Ben Protess: "Top regulators of the derivatives markets are fighting back against a Congressional assault on their budget, arguing that funding cuts will derail a much-needed overhaul of the $600 trillion industry. The Republican-led House of Representatives passed a federal spending plan on Saturday that would cut the Commodity Futures Trading Commission?s budget by a third. The Senate, which is controlled by Democrats, is unlikely to approve such deep cuts, although the agency?s budget remains a target there. In contrast, President Obama has proposed increasing the commission?s budget by more than 80 percent. The agency?s Democratic commissioners asserted on Thursday that any cuts, big or small, would be disastrous."

Consumer groups are pleased with Obama's antitrust chief: http://politi.co/gzFb6I

Wisconsin is, like Iraq, an instance of the "shock doctrine" at work, writes Paul Krugman: "From Chile in the 1970s onward, [Naomi Klein] suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society...Gov. Scott Walker claims that he needs to pass his bill to deal with the state?s fiscal problems. But his attack on unions has nothing to do with the budget. In fact, those unions have already indicated their willingness to make substantial financial concessions -- an offer the governor has rejected. What?s happening in Wisconsin is, instead, a power grab -- an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy."

Our debate about the debt ceiling and budget cuts is silly, writes Alan Blinder: http://on.wsj.com/hJ6iJ1

The US shouldn't have a debt limit, writes Pete Davis: "Why do we have a debt limit? Congress wouldn't pass the Second Liberty Bond Act of 1917 to fund the First World War without it. Ever since, it has levered all manner of extraneous spending increases, tax cuts, and special interest amendments without having the slightest downward impact on federal spending. As the first two sentences of today's GAO report say, 'The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability top pay obligations already incurred.' If you really want to control spending, control spending."

Democrats should not fall for "fiscal conservatives"' bait, writes Jeff Frankel: "The zeal to cut funding for such tiny programs as the National Endowment for the Humanities and Planned Parenthood is accepted as evidence of the sincerity of the fiscal conservatives. I wish the Democrats would not fall for that bait. Their anguish over such cuts, while understandable, plays into the old narrative of big versus small government. The same with the bigger, but still small, categories of domestic spending such as food stamps. The Right reacts to such liberal anguish with glee, while the Center infers - less vindictively, but no more accurately - that such cuts are part of a painful but necessary fiscal adjustment. Losing the center is no way to put together a political majority. "

Muppet interlude: Kermit and the gang rock out to LCD Soundsystem's "Dance Yrself Clean".

Health Care

The White House is assuring governors they have flexibility on health reform, reports Mary Agnes Carey: "With the nation?s governors about to descend on Washington for their winter meeting, the Department of Health and Human Services today continued its campaign to calm their concerns that the health law is too expensive and complex for cash-strapped states to implement. In a letter responding to Republican governors who have been complaining they need more flexibility in setting up health insurance exchanges, HHS Secretary Kathleen Sebelius reiterated that the law gives states the authority to pick which insurers can do business in their states and allows for a diversity of health plans to be sold on the exchanges. In a separate report, HHS said that the federal government has offered or provided $2.8 billion so far -- and will provide 'billions more' -- to states to implement the law."

Mitt Romney is still defending the Massachusetts health law while attacking the federal one: http://politi.co/hSzjyK

Domestic Policy

The administration has been meeting with lobbyists outside the White House to keep it off the books, reports Chris Frates: "Caught between their boss? anti-lobbyist rhetoric and the reality of governing, President Barack Obama?s aides often steer meetings with lobbyists to a complex just off the White House grounds -- and several of the lobbyists involved say they believe the choice of venue is no accident. It allows the Obama administration to keep these lobbyist meetings shielded from public view -- and out of Secret Service logs kept on visitors to the White House and later released to the public. 'They?re doing it on the side. It?s better than nothing,' said immigration reform lobbyist Tamar Jacoby, who has attended meetings at the nearby Jackson Place complex and believes the undisclosed gatherings are better than none."

Darrel Issa has issued his first subpoenas: http://wapo.st/eAmlmx

Freshman Republicans are finding it hard to avoid local spending, reports Shailagh Murray: "As the government programs fell and the tens of billions in savings piled up during the budget debate in the House last week, freshman Republican Frank Guinta was right there cutting with the rest of them. The former Manchester mayor axed funds for after-school programs in his hometown. He voted against money to replace an aging bridge in Portsmouth. And he backed steep reductions for health centers that treat thousands of New Hampshire's uninsured. But Guinta also found that he had some limits. He wasn't willing to cut a subsidy for heating bills...Guinta and many of his fellow Republicans are discovering that fiscal responsibility can be a tricky business."

Teachers' union leader Randi Weingarten has a plan to reform teacher tenure: http://nyti.ms/hFCLhc

Simpler times interlude: A compilation of '90s TV news segments on what the "Internet" is.

Energy

Pressure on the White House to allow offshore drilling is mounting, report Tennille Tracy and Ryan Tracy: "Interior Secretary Ken Salazar plans to meet with oil industry executives in Houston Friday to assess the industry's readiness to handle a major offshore oil spill, amid growing pressure from congressional Republicans and a federal judge to resume deep-water drilling in the Gulf of Mexico. Mr. Salazar is expected to meet with representatives of an industry-led consortium, Marine Well Containment Co., and Helix Energy Solutions Group Inc., a company that aided BP PLC with BP's response to last year's Gulf of Mexico oil spill. The Obama administration has said the oil industry must demonstrate it can quickly contain a large offshore spill before it will allow companies to resume drilling in waters deeper than 500 feet."

A report has cleared US scientists of misconduct in "climategate": http://wapo.st/gNkHKS

House Republicans want to block EPA air pollution rules, reports Andrew Restuccia: "House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) raised the specter late Wednesday of taking action in Congress to change the Environmental Protection Agency?s final air pollution regulations for industrial boilers, which the lawmaker said were issued hastily amid a looming court-ordered deadline. 'If congressional intervention is needed to provide EPA the time it needs to provide careful, defensible rules that will not invite additional judicial challenge, the Committee on Energy and Commerce is prepared to act,' Upton, who was joined by energy subcommittee Chairman Ed Whitfield (R-Ky.), said in a statement."

House Democrats want Obama to tap strategic oil reserves: http://bit.ly/gbcYTF

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.



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