Wonkbook: Senate to move on tax deal today; bill might keep 2 million out of poverty; Senate still dysfunctional
The tax deal is expected to pass its first test in the Senate today, reports Shailagh Murray: "The Senate will hold a key test vote Monday on the tax package President Obama negotiated with Republicans to prevent rate increases from hitting most American workers starting Jan. 1...Reid spokesman Jim Manley said Reid and Senate Minority Leader Mitch McConnell (R-Ky.) will discuss on Monday whether to allow any amendments to the legislation, a decision that will determine how quickly a final vote can be held. The bill is co-sponsored by Reid and McConnell, a first for two leaders who are typically adversaries, Manley said...The Senate is hoping to complete work on the tax bill on Tuesday, sending it to the House, where Democrats have proved less receptive to the Obama-GOP compromise."
And to keep 2 million people out of poverty, writes Arloc Sherman: "The three provisions are a temporary payroll tax cut and temporary extensions of the 2009 Recovery Act improvements in the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). In 2011, they would keep the family incomes (after subtracting federal income and payroll taxes) of 2.4 million Americans, including 1.2 million children, above the official poverty line, and
lessen the severity of poverty for 19.4 million poor Americans, including 7.2 million children, by lifting their incomes closer to the poverty line."
The Senate is failing to pass basic legislation, reports Philip Rucker and David Fahrenthold: "Last week, the U.S. Senate failed for the first time in 48 years to pass an annual bill authorizing money for national defense - not over disagreement about the part of the bill that would repeal a ban against gays serving openly in the military but on procedural grounds. Moderate lawmakers inclined to support the bill balked Thursday when a vote was called what they considered to be too soon... An institution designed to chew over legislation slowly, refining and moderating bills passed by the House, now routinely chokes on them...Says Julian Zelizer, a professor of history at Princeton University: 'Partisanship, combined with the rules of the Senate, make for an institution that doesn't like...to act at all.'"
Harry Reid is brokering a deal to confirm judicial nominees, reports Abby Philip: "Senate Majority Leader Harry Reid is negotiating a deal with Republican leaders to confirm a long list of President Barack Obama's judicial nominations that have idled on the Senate calendar for months, sources say. The deal could involve as many as 19 of President Barack Obama’s judicial nominees who the GOP consider non-controversial, but would leave out a shorter list of more liberal nominees Republicans consider objectionable -- setting up another potential disappointment for liberal activists, who have spent months pushing for their confirmation. Senate Republicans have flagged four nominations they want blocked: Goodwin Liu, who was nominated to the 9th Circuit Court of Appeals, and federal district judicial nominees Edward Chen, Louis Butler, and John McConnell."
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Scot-Rock interlude: Frightened Rabbit's "Skip the Youth".
Still to come: Lenders are taking on more risky borrowers; a federal judge will rule on the constitutionality of health care reform today; the small group of big-bank derivatives traders who dominate the market; the Cancun climate conference ended in a deal; and a man in a pigeon suit prevents pigeon feeding.
Lenders are extending credit to risky borrowers again, reports Eric Dash: "Credit card offers are surging again after a three-year slowdown, as banks seek to revive a business that brought them huge profits before the financial crisis wrecked the credit scores of so many Americans. The rise is striking because it includes offers to riskier borrowers who were shunned as recently as six months ago. But this time, in contrast to the boom years, when banks 'preapproved' seemingly everyone, lenders are choosing their prospects more carefully and setting stricter terms to guard against another wave of losses. For consumers, the resurgence of card offers, however cautious, provides an opportunity to repair damaged credit and regain the convenience of paying with plastic."
The middle and upper middle classes benefit the most from the tax deal: http://nyti.ms/f7QSNQ
The White House is continuing to express interest in tax reform, reports James Politi: "In a radio interview on Friday, Mr Obama said the 'conversation' on tax reform needed to start next year. He said his aim would be to lower rates for companies and individuals from their current top level of 35 per cent, while curbing a wide range of deductions and subsidies that make the system inefficient...While Mr Obama has asked his economic team to come up with options for discussion, there has not been a policy meeting between the president and other officials on the topic of tax reform. There was also no near-term deadline for officials to make their presentation, one administration official said. But making tax reform a big legislative priority could have significant benefits for the White House, achieving several competing objectives at the same time."
A small group of traders dominate the derivatives market, reports Louise Story: "On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable -- and controversial -- fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential. Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk. In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks."
The tax deal won't help the US deleverage, writes Paul Krugman: "It’s true that we’re making progress on deleveraging. Household debt is down to 118 percent of income, and a strong recovery would bring that number down further. But we’re still at least several years from the point at which households will be in good enough shape that the economy no longer needs government support. But wouldn’t it be expensive to have the government support the economy for years to come? Yes, it would -- which is why the stimulus should be done well, getting as much bang for the buck as possible...The point is that while the deal will cost a lot -- adding more to federal debt than the original Obama stimulus -- it’s likely to get very little bang for the buck."
Adorable animals chasing themselves interlude: A Boston terrier chases his own shirt.
A district court judge will rule on the constitutionality of health care reform today, report Janet Adamy and Evan Perez: "A Virginia federal judge is expected to rule Monday on whether the Obama administration's health law violates the Constitution, opening a new stage in the administration's defense of its biggest legislative achievement. The ruling by District Judge Henry E. Hudson is perhaps the most significant so far among a slew of state-based legal challenges to the law, which also faces attack by newly resurgent Republicans in Congress. More than 20 federal lawsuits have been filed against the health overhaul since President Barack Obama signed it in March."
The government's dependence on the American Medical Association drives up health costs, writes Uwe Reinhardt: "The RUC is a group of 29 physicians drawn from a variety of medical specialties. It was established by the A.M.A. in 1991 to advise the C.M.S. on recalibrations of the relative value scale underlying the Medicare fee schedule...As it happens, however, the C.M.S. tends to accept the RUC’s recommendations on RVU changes more than 90 percent of the time, which effectively makes the RUC the final arbiter in these matters. I do not believe that slavish acceptance of the RUC’s recommendations is a good thing, if only because the physicians on the RUC do labor under at least the appearance of a conflict of interest."
The GOP House is set to block most of Obama's education agenda: http://nyti.ms/f0bEpA
Regulatory reform would spur economic growth, writes Senator Mark Warner: "Now, no one is seriously questioning the need for common-sense rules of the road to protect American consumers, public health and our environment, especially in the wake of the BP oil-rig blowout in the Gulf of Mexico and the 2008 near-meltdown of several of our nation's leading financial firms. But our current regulatory framework actually favors those federal agencies that consistently churn out new red tape. In this town, expanded regulatory authority typically is rewarded with additional resources and a higher bureaucratic profile, and there is no process or incentive for an agency to eliminate or clean up old regulations."
Great moments in law enforcement interlude: A man in a pigeon costume prevents pigeon feeding.
The Cancun conference ended with a series of agreements, reports Fiona Harvey: " global agreement on climate change moved a step closer over the weekend as governments ended the UN Cancún talks with a series of accords on key elements of an overarching deal. A 'green fund' that will distribute money to help poor countries cope with climate change, a mechanism for international co-operation on low-carbon technology, and a way to help developing nations preserve their forests all emerged from the two weeks of negotiations in the Mexican resort of Cancún. Countries will now continue to work towards agreement on other elements, such as the legal form a new deal could take, and the future of the Kyoto protocol - the current provisions of which expire in 2012."
The EPA is defending its rule delays: http://bit.ly/hf7cZW
The US may not live up to its international climate commitments, reports Darren Samuelsohn: "Obama administration officials insist they are full-steam ahead with their pledge to help create a $30 billion short-term fund to help developing countries keep their forests standing, gain access to low-carbon energy technologies and adapt to rising seas, extreme weather and new crop patterns...Republican Sens. Jim Inhofe (Okla.), David Vitter (La.), John Barrasso (Wyo.) and George Voinovich (Ohio) urged Clinton last week to freeze all future spending requests related to international climate change finance programs and make no new commitments."
A federal court rejected an attempt to block EPA climate rules: http://bit.ly/h355ys
The Los Angeles-San Francisco high speed rail project is starting slow, reports Josh Mitchell: "California's plan for high-speed rail service envisions bullet trains zooming from Sacramento to San Diego. To start off, the state intends to spend $4.3 billion to build a 65-mile stretch of track and stations linking two small towns in rural Central Valley. Proponents of high speed rail say building this portion of track is a good way to launch a multiyear building program. Critics call the project the 'train to nowhere' and are using it to fuel a broader attack on the Obama administration's rail strategy...Congress is signaling it could cut spending for high-speed rail across the board."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: White House.
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