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Wonkbook: Small biz bill passes; Warren's powers uncertain; DREAM Act

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Harry Reid's long, national nightmare is finally over. Yesterday, Senate Democrats joined with two Republicans to finally pass the small-business lending bill. The legislation itself is a fairly modest measure to help small businesses access credit and lower their tax burden. It was, in fact, designed by members of both parties. But at this point, it's a huge lift for the Senate to do even the small stuff.

Nevertheless, hope springs eternal Reps. Nydia Velazquez and Luis Gutierrez were enthused by a meeting they had with president Obama on the DREAM Act. The president, they reported, promised to push hard for the legislation, which would help the children of illegal immigrants achieve legal status if they graduated from college and.or served in the military. At one point, the legislation was bipartisan. Today, of course, it isn't. But supporters are hopeful about the bill's prospects if the president gets behind it. Ah, to DREAM the impossible DREAM. (Sorry, sorry.)

Welcome to Wonkbook.

Top Stories

The Senate gave final passage to the administration's small business aid bill, reports Brady Dennis: "The aid package passed Thursday includes about $12 billion in tax relief for small businesses, as well as a $30 billion lending fund that will be administered by the Treasury Department. Those funds would go to qualified small banks that promise to extend new loans to small businesses, many of whom have had trouble getting loans in the wake of the financial crisis."

The White House will announce Elizabeth Warren's appointment this morning: http://politi.co/bnFUL1

Warren's powers in her new position remain uncertain, reports Damian Paletta: "Ms. Warren won't have the full powers that a Senate-confirmed director of the agency might have. She would be joining a team of administration officials who have already begun taking steps to create the new agency, and whether she takes over the effort or plays an advisory role remains unclear....Lawyers were scrutinizing a two-paragraph section of the Dodd-Frank law (Section 1066), which suggests Treasury's powers setting up the agency might extend only to areas such as transferring employees and other powers from existing agencies. In other words, Treasury—and Ms. Warren by extension—might not have broad authority to write new rules and guidelines."

John Boehner says the GOP will not force a government shutdown: http://politi.co/ad8Ef2

Senators pressed Treasury Secretary Tim Geithner to get even tougher on China's currency manipulation, reports Howard Schneider: "At a hearing of the Senate banking committee, chairman Christopher Dodd (D-Conn.) told Geithner that 'a disturbing pattern of behavior has emerged' with China and that 'it is time to move beyond just talking.' 'There is no question that the economic and trade policies of China present roadblocks to our recovery,' Dodd said. Sen. Richard Shelby (R-Ala.) wondered, 'Why is the administration protecting China by refusing to designate it as a currency manipulator?'"

Poverty is at its highest point since the Census Bureau started keeping records, reports Carol Morello: "At organizations where the unemployed come to get help finding a job or seek food, the numbers were no surprise. 'In the decade I've been doing this work, this is a low point,' said Jason Perkins-Cohen, executive director of the Job Opportunities Task Force in Baltimore. 'We're getting a real feeling of desperation. For sheer numbers, it's a new, unhappy world.' At the nonprofit Action Though Service in Prince William County late Thursday morning, the shelves of the agency's pantry were starting to empty, as the line for help snaked out the door with a few dozen people seeking assistance."

Obama will put his muscle into the effort to pass the DREAM Act, reports Kendra Marr: "After meeting with President Obama, Rep. Nydia Velazquez (D-N.Y.) told reporters that she urged him to work with the Senate to pass the DREAM Act on immigration. 'The president committed to talk to senators,' she said. 'We will encourage the community at large to help us, because next week is going to be a crucial week.' Echoing Obama, she called for an 'up or down vote.' Rep. Luis Gutierrez (D-Ill.) added that Obama made it clear that he would 'leave no stone unturned.' He said they asked Obama to use the 'full weight, the full might of the White House.'"

Elise Foley explains how the DREAM Act works: http://bit.ly/aixzVv

'70s rock interlude: Fleetwood Mac play "What Makes You Think You're the One".

Still to come: OMB nominee Jack Lew promises the Hill that he'll abidy by PAYGo; Dave Roberts defends against charges that environmentalists overreached on cap-and-trade; the House takes another crack at the health bill's 1099 requirements; and a bear does yoga.

Economy/FinReg

OMB nominee Jack Lew is promising to adhere to pay-as-you-go budgeting, reports Ed O'Keefe: "Lew, who served as OMB director during Bill Clinton's administration, said budget surpluses like those in the late 1990s and the early part of the next decade won't be possible again without strict fiscal discipline. He also said Clinton reluctantly adhered to 'pay as you go' rules. 'That meant saying no to a lot of things that we would have liked to have done,' Lew said. He added that the current lack of fiscal discipline is affecting the private sector."

Jobless claims are at a two month low: http://bit.ly/a8Peq2

The recession has been most volatile for the rich, reports Mark Whitehouse: "In the first year of the recession that began in 2007, the top 0.01% of earners in the U.S. saw their pretax income fall by an average of 12.7%, compared with 2.6% for all earners, according to an analysis of data from income-tax returns by economists Jonathan Parker and Annette Vissing-Jorgensen, in a paper presented Thursday at a Brookings Institution conference. The richest also did better on the way up. In the four years leading up to the recession, their income rose at an annualized rate of 13.9%, compared with 1.8% for everyone."

Daniel Indiviglio explains how jobless claims relate to the unemployment rate: "Each of these statistical methods will provide a number of unemployed Americans. For example, if you add continuing claims and EUC, you find that 8.2 million people filed for unemployment insurance during the week ending August 28th. But the Bureau of Labor Statistics report for August says 14.9 million Americans were unemployed. As you can see, these are very different measures. This shouldn't be surprising. You will always find the total number of unemployed Americans reported by BLS is higher than those claiming benefits."

One bank in Boston got special attention amongst TARP recipients: http://bit.ly/ctA0Qh

Nouriel Roubini argues for a payroll tax cut: "The argument that increased demand for capital leads to greater demand for labor (i.e., if you buy more machines you need workers to run them) has not held up. Firms are investing in capital goods, equipment and offshore offices that allow them to produce the same amount of goods with less -- and lower labor costs. To avoid a chronic increase in the unemployment rate, we need to subsidize the demand for labor -- achieving job creation -- rather than making it cheaper to buy capital, as investment and other tax credits would do. President Obama could fully fund the reduction in payroll tax by allowing the Bush tax cuts for people making more than $250,000 a year to expire. Meanwhile, the Bush-era cuts affecting middle- and low-income earners -- the vast majority of Americans -- would remain in place for the time being."

Valerie Jarrett urges legislation to close the male-female wage gap: http://bit.ly/a1Y1wO

Steven Pearlstein credits economic inequality with coarsening our politics: "While slowing growth and rising inequality have afflicted all advanced economies in recent decades as a result of globalization and new technologies and globalization, Hacker and Pierson find them to be more pronounced in the United States, as Thursday's report on the nation's soaring poverty rate attests. Conservatives like to ascribe such trends to the natural dynamics of efficiency-producing, liberty-protecting markets, but Hacker and Pierson remind us that there are no such thing as 'pure' markets, and that markets everywhere are shaped by laws and regulations, cultures and the institutional arrangements that themselves are shaped by the political process."

Adorable animals being flexible interlude: A bear doing yoga.

Energy

China is acknowledging its problem cutting down on energy use, report Ian Johnson and Keith Bradsher: "The acknowledgment of difficulties by Zhang Laiwu, deputy minister for science and technology, comes as China has become the world’s largest auto market and is spending heavily on high-speed rail and other infrastructure projects that require a lot of steel and cement, which are energy-intensive to make. A top Chinese auto executive predicted Thursday at a conference in Chengdu that annual auto sales in China would reach 40 million vehicles by 2020, more than twice the peak of the American market before the recent economic downturn."

The EPA is investigating a chemical used at a BP plant: http://bit.ly/cisd6T

California is nearing a showdown over its climate change law, reports Adam Nagourney: "The law in question, known as A.B. 32, mandates slashing carbon and other greenhouse emissions to 1990 levels by 2020, by forcing power companies and industries to cap their emissions and by slashing carbon in gasoline. Some oil industry leaders said it would force them to invest millions of dollars to comply, and asserted that it would force companies to cut jobs and raise the price of gas at the pumps. Although the vast majority of the money being contributed to fight the law is coming from oil companies, the oil industry is clearly not united in opposition: some major California oil refineries, including Chevron, have notably stayed out of the battle so far."

Senators Boxer and Feinstein are introducing legislation to ensure oil pipeline safety: http://bit.ly/dapIiW

Liberals did not overreach on climate change, writes David Roberts: "As to the notion that Democrats 'refused to compromise,' it's an impressive feat to say that with a straight face, even for Dillon. Cap-and-trade began its life as a compromise, a conservative answer to liberal environmental regulations, originally passed by Bush Sr. This whole latest mishegas kicked off with an enormous compromise in the House: Henry Waxman (D-Calif.) started with what Joe Romm once called 'the weak, coal-friendly, rip-offset-heavy USCAP climate plan,' developed by centrist green groups and big corporations. Grassroots greens felt burned from day one and from that point on it was one compromise after another -- more coal subsidies, more free permits for polluters, softer regulatory oversight for Big Ag, on and on."

Death-defying interlude: People jumping out of the way of cars and trains.

Domestic Policy

Lawmakers are attempting to overhaul a phone subsidy fund, reports Amy Schatz: "House lawmakers began debating Thursday a proposal to overhaul the $8 billion Universal Service Fund, which uses money from long-distance customers to subsidize phone lines in low-income communities and isolated rural areas. The program has grown rapidly over the past decade, and become target for lawmakers looking to cut federal spending. The Federal Communications Commission is also proposing changes to the program, mainly to shift its focus to funding broadband Internet lines instead of just phone service."

An FDA investigation pins the salmonella outbreak on problems with chicken feed: http://bit.ly/cprPt9

As DC chancellor Michelle Rhee prepares to leave, reformist NYC schools head Joel Klein is also under fire: http://bit.ly/aRibtu

Members of Congress are still targeting health care reform's tax reporting provision, reports Jennifer Haberkorn: "Now Democrats on the House Ways and Means Committee are considering a new push to repeal the provision, and a floor vote could come as soon as next week. But their plan, like all of the others, comes with strings attached that will make it virtually impossible for the other party to sign on....The new Democratic plan would offset the $17 billion loss by taxing carried interest, a move Republicans and at least some moderate Democrats are likely to oppose.

Closing credits: Wonkbook is compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: White House.

By Ezra Klein  |  September 17, 2010; 6:36 AM ET
Categories:  Wonkbook  
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Next: Small-business bill passes -- but what's there to say about it?

Comments

Isn't the $17 billion loss (health care tax loss) about two month's funding of the Iraq War?

Just repeal the 1099 requirement and don't worry about the cost. Let the GOP worry about that next year when they shut down the gvmt.

Posted by: lauren2010 | September 17, 2010 8:11 AM | Report abuse

Love the Dream Act. Illegal aliens, who can qualify for in-state tuition, can use this a benefit they never should have had, to gain a legal status to which they should not be entitled. Ezra "dreams the impossible dream" that we can make it easier for illegal aliens to become legal. This is the way to discourage illegal immigration?

Posted by: buggerianpaisley1 | September 17, 2010 9:41 AM | Report abuse

"Obama will put his muscle into the effort to pass the DREAM Act, reports Kendra Marr"

Why not go a step further and let anyone who doesn't have a criminal backgroud or history of inciting violence live here if he or she wants to?

As long as they won't be breaking my bones or picking my pocket why is it any of my business if someone would prefer to live here rather than in another country?

"To be eligible for the DREAM Act, illegal immigrants must be between the ages of 12 and 35 at the time the bill is enacted. They must have arrived in the U.S. before the age of 16 and lived there for five years consecutively since their arrival."

What's wrong with illegal immigrants over 36? Or who have been here for 3 years? Or who moved here with their family when they were 17?

"The bill would save students from deportation and keep American-educated students, whose childhood education was funded with tax-payer dollars, in the U.S."

Great. So in effect some bureaucrats grabbed a few bucks out of my pocket, and proceeded to use said funds to educate some kids and subsequently deport them. Oh, and the bureaucrats got to keep some of those dollars as well.

Posted by: justin84 | September 17, 2010 9:43 AM | Report abuse

"Harry Reid's long, national nightmare is finally over."

After that first sentence, I thought maybe Harry Reid resigned.

-Shane, Omaha

Posted by: spekny | September 17, 2010 9:53 AM | Report abuse

its nice to see OneUnited got some special treatment that they were the only one out of 700+ banks to get. We'll see what happens from that ethics investigation.

Something makes me think though that when businesses are in trouble they shouldn't be hiring yoga instructors at $150 an hour.


And when you're lying about the involvement it doesn't get more damning than this.

"Thompson, however, was dubious. She recalled that she had looked into the issue beforehand and learned that only two minority banks were harmed, OneUnited and a smaller Texas institution. She challenged Cooper, she said, by asking " 'How many?' Because I knew."


And in the end she went to Frank for help with OneUnited but did not disclose the stock she owned.

I don't know about anyone else but if I had $350,000 in stock in a bank I'd think I'd know about it.

Posted by: visionbrkr | September 17, 2010 10:24 AM | Report abuse

In other news, the relief well at Deepwater Horizon has now connected with the main well, and the final capping of the leak is expected to be completed on Sunday.

Took way too long, but better late than never.

Posted by: Patrick_M | September 17, 2010 10:44 AM | Report abuse

"Poverty is at its highest point since the Census Bureau started keeping records, reports Carol Morello"

How's that War on Poverty going?

Let's look at poverty rate for children:

Poverty rate 1959 - 27.3%
Poverty rate 1965 - 21.0%
---- war on poverty begins ~1965 ----
Poverty rate 1975 - 17.1%
Poverty rate 1983 - 22.3%
Poverty rate 1995 - 20.8%
---- 1996 welfare reform ----
Poverty rate 2000 - 16.2%
Poverty rate 2005 - 17.6%
Poverty rate 2009 - 20.7%

Social Security has helped keep poverty down for the elderly, although despite $645 billion budgeted for Social Security in 2009 and ~50 million recipients ($12,900 each), 1 in 11 elderly are still below poverty line (~$10,830 for a single individual, $14,570 for a two person household). Only a government program could have 9% of people fall through the cracks when a program has enough funding to put give each person 119% of the poverty line income if only it were distributed equally.

http://aspe.hhs.gov/poverty/09poverty.shtml
http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/ssa.pdf

Are there any excamples of the government winning a war on anything, other than other governments?

Posted by: justin84 | September 17, 2010 2:48 PM | Report abuse

Even If You Favor Amnesty For Some Illegal Teens, This DREAM Act Must Be Stopped

Those of us who are being taxed to pay for all the illegal aliens, who have managed to steal into this country need to read this summary of politicians who have adopted--forcing through any kind of Path to Citizenship. If you think it's not going to cost any money to process President Obama's Immigration Reform package--think again. To process the millions already here, the dollar figures will be in the billions? The government will certainly retain immigration attorneys to aid in this monolithic action, which will undoubtedly end up with massive fraud--as it is now with the six stealth amnesties already passed, without public notice. The DREAM ACT BILL, is a last ditch effort by pro-amnesty incumbent Senator Harry Reid to save his job.

It seems that Obama and his Senate are trying to pass any form of Amesty--by any means, when 15 million US workers are slogging the streets, looking for work. More than half of Nevadans think undocumented immigrants are taking jobs away from Nevada citizens, a recent Las Vegas Review-Journal poll showed. Angle's ad blasts Reid for voting to give "special tax breaks to illegal aliens" and to give those Social Security benefits "even for the time they were here in public welfare benefits? It was $62 million dollars in just July for Los Angeles County, California.

With 15 million Americans OUT-OF-WORK--forcing Amnesty into the people's faces is political suicide. If this bill is passed it leaves intact the “chain migration system” that will permit these 2.1 million illegal aliens, to eventually send for millions more relatives. The ominous DREAM ACT leaves intact the chain migration system that will allow these 2.1 million illegal aliens to ultimately send for millions more relatives.
Because of this emergency in warning patriotic Americans this is the statement of Roy Beck, President of Numbersusa pro-sovereignty organization. In his words it outlines the invisible dangers of this obvious deceptive attachment to the De fence appropriations bill--NEXT WEEK.

If a mass amnesty is passed by the Democrats, how are they going to pay for the 18 million people to be processed --TAXPAYERS? How are they going to enforce the rush by millions for the border, or a one-way-plane-ticket, aware that this Amnesty is going to be signed--or the next million or those who come after?
Vent your anger on the phone lines to Washington and your Senator and Congressman at 202-224-3121.

Posted by: infinity555 | September 17, 2010 3:37 PM | Report abuse

ABC quoted me as saying that there is no question that many of the teenagers who would get an amnesty through the DREAM Act make for "compelling" cases. But I'm also quoted saying that this DREAM amnesty should not be passed.

If the DREAM Act were actually limited to the PR rhetoric that comes out of the pro-amnesty organizations, there might be reason for a debate.

If you barely paid attention, you would think this amnesty is just about illegal aliens who are high school valedictorians.

If you pay a little more attention you would know it is larger than that but think it is for good students who are teenagers or college students who were brought to the U.S. illegally when they were toddlers. You would think that they don't know the language of their home country, have no ties there and if not given a U.S. amnesty would be without a country.

And you might have believed all the rhetoric of the pro-amnesty forces of the last year that they only want legalization (amnesty) for illegal aliens if it is coupled with strong enforcement measures that will prevent a buildup of an illegal population in the future.

Well, the open-borders people have spent millions of dollars on PR firms to figure out how to lie to and mislead the American people in the smoothest way possible -- how to seem to be saying things that they actually aren't.

Posted by: infinity555 | September 17, 2010 3:38 PM | Report abuse

Here's the real story:

No. 1: Not valedictorians -- or even necessarily good students.

Any illegal alien who can manage to meet the minimum requirements to graduate from high school or get an equivalent degree meets the first test.

No. 2: Primarily NOT teens or college students.

The Senate DREAM bill allows you to be up to 35 years old!

The House bill has no upper limit.

No. 3: Don't have to have come when a child.

An illegal alien can get this amnesty even if he didn't arrive in the U.S. until age 15. That's right -- he can spend his first 15 years learning the language and culture of his home country and developing all kinds of ties there and then come to the U.S. and later claim need for a DREAM amnesty because he supposedly has no country to go back to.

I was on a national Hispanic cable TV show last week on which a videotaped profile was run of a well-heeled-looking woman from another country bragging in front of New York City scenery that a few years ago she had illegally overstayed her tourist visa when her son was 15 so he could go to a U.S. college and pursue a U.S. career. DREAM would reward her and all the rest of people in the world who might think like her.

No. 4: Bill is open to gigantic fraud.

The bill is written so that the 2, 3 or 4 million illegal-alien applicants only have to CLAIM to meet the criteria. They don't have to PROVE anything.

The government has to build a case, one illegal at a time, and prove the claims on the application are false in order for the illegal alien to lose the amnesty. Can you imagine how many times that is likely to happen?

No. 5: DREAM does nothing to stop the behavior that put teenagers into their situation. It leaves the jobs magnet in place.

This amnesty has no enforcement measures at all. It allows employers to continue to hire illegal aliens, enticing millions more parents to bring their children here illegally and stay long enough for them to become high school students and demand another amnesty in a few years.

No. 6: DREAM leaves intact the chain migration system that will allow these 2.1 million illegal aliens to eventually send for millions more relatives.

Rather quickly, the amnestied illegal aliens would be able to get green cards for their parents. And millions of additional relatives would be able to start planning their applications and getting in line. This starts with adult siblings and moves on to aunts, uncles, cousins, etc.

A large percentage of the illegal aliens in the U.S. today are extended family members of the illegal aliens who got amnesty in 1986 and also those in the six more-limited amnesties in the 1990s.

Posted by: infinity555 | September 17, 2010 3:39 PM | Report abuse

I am writing to you today to strongly urge you to support the DREAM Act. I am an undocumented alien, working towards my master’s degree. This bill is urgently needed so that immigrant students who grew up in the USA can achieve their dreams of going to college and so that they can be freed up to fully contribute to our country. The U.S. is my only home. I have served this country in different ways, from volunteering at non-profit organizations to tutoring my fellow students. I am just as American as my neighbor, but I do not enjoy the bounties that many legal residents overlook everyday.

I urge you to support the DREAM Act. I will be graduating with masters in statistics this fall. Yet, my life is on hold. If my status does not get adjusted by next fall, I will have absolutely nothing to do after I graduate. I will not be able to work here, or apply for adjustment of status. Therefore, I will be forced out of this country. The people who want to benefit America by becoming efficient workers and businessmen are leaving this country because they are considered less "American" than their peers.

I would also urge you to look into the facts behind this proposed legislation. If this act passes, more underprivileged children would enroll in college. This act will clear up a huge hurdle that many students are not able to overcome. The students who graduate from college will work in the US and pay taxes. They will pay back their student loans. Many would open up their own businesses. This bill would be a step in the right direction, and it will surely benefit America, because you will be granting legal status to people who realize how lucky they are for being Americans. These children would give back to their communities, and I am sure the passage of this act will motivate them further to reach their goals.

DREAM Act will help those who will serve America. If undocumented students who are long-term U.S. residents continue to face setbacks, they will have to drop out and a great deal of potential will go wasted.

While you defeat those who threaten the values that America stands for, please help those who want to help America. I hope you will do everything in your power to make this bill a law as soon as possible. I will also urge you to discuss this matter with your fellow senators, Congressmen and enlist their support. Please do not punish innocent children for dreaming for a brighter future. Despite what anti-immigrants say, legislation that will remove this artificial barrier will only make this country and its economy stronger. PLEASE do not let anyone block the DREAM Act.


Sincerely,

Your fellow American

Posted by: dreamactivistforever | September 17, 2010 4:08 PM | Report abuse

I am writing to you today to strongly urge you to support the DREAM Act. I am an undocumented alien, working towards my master’s degree. This bill is urgently needed so that immigrant students who grew up in the USA can achieve their dreams of going to college and so that they can be freed up to fully contribute to our country. The U.S. is my only home. I have served this country in different ways, from volunteering at non-profit organizations to tutoring my fellow students. I am just as American as my neighbor, but I do not enjoy the bounties that many legal residents overlook everyday.

I urge you to support the DREAM Act. I will be graduating with masters in statistics this fall. Yet, my life is on hold. If my status does not get adjusted by next fall, I will have absolutely nothing to do after I graduate. I will not be able to work here, or apply for adjustment of status. Therefore, I will be forced out of this country. The people who want to benefit America by becoming efficient workers and businessmen are leaving this country because they are considered less "American" than their peers.

I would also urge you to look into the facts behind this proposed legislation. If this act passes, more underprivileged children would enroll in college. This act will clear up a huge hurdle that many students are not able to overcome. The students who graduate from college will work in the US and pay taxes. They will pay back their student loans. Many would open up their own businesses. This bill would be a step in the right direction, and it will surely benefit America, because you will be granting legal status to people who realize how lucky they are for being Americans. These children would give back to their communities, and I am sure the passage of this act will motivate them further to reach their goals.

DREAM Act will help those who will serve America. If undocumented students who are long-term U.S. residents continue to face setbacks, they will have to drop out and a great deal of potential will go wasted.

While you defeat those who threaten the values that America stands for, please help those who want to help America. I hope you will do everything in your power to make this bill a law as soon as possible. I will also urge you to discuss this matter with your fellow senators, Congressmen and enlist their support. Please do not punish innocent children for dreaming for a brighter future. Despite what anti-immigrants say, legislation that will remove this artificial barrier will only make this country and its economy stronger. PLEASE do not let anyone block the DREAM Act.


Sincerely,

Your fellow American

Posted by: dreamactivistforever | September 17, 2010 4:09 PM | Report abuse

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