Meet Your 112th Congress

Photojournalism

A quick guide to the gay-bashing, detainee-abusing, coal-fired, bayonet-fixing class of 2011.

Tim Murphy

Sen. Joe Manchin (D-W.V.): If you've ever surveyed Congress and thought, "Hey, this is great, but could we be a bit more hostile to climate-change legislation?" you're in luck. Manchin, who's filling the seat left by the late Sen. Robert Byrd, flaunted his pro-coal credentials (and support for the Second Amendment) by literally shooting a copy of the "cap and trade" bill during a campaign ad. That said, it could have been worse: Manchin's opponent, John Raese, promised to put 1,000 lasers in space to defend the country from missile strikes. Photo: YouTube.

Start the slideshow, or read MoJo's ongoing coverage of 2010 elections fallout.

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Well that was fun. On Tuesday, Democrats were handed one of their biggest electoral setbacks in recent memory, losing 60-plus seats in the House, and another 7 in the Senate. It's out with progressive stalwarts like Tom Perriello, and Russ Feingold, and in with, well...what, exactly? Here's a quick guide to the incoming freshmen. [Read MoJo's special report on the 2010 elections here.]

Map: Election results 2010

election map 2010

Republicans face fundamental choice in how to oppose

Which way new majority goes will likely say a lot about whether it intends to oppose president’s identity or his ideas   

                              By Matt Bai

The New York Times

updated 11/4/2010 8:12:11 AM ET

         The day after the election always dawns sunny and full of hope in Washington. From Representative John A. Boehner on down, Republicans talked on Wednesday about how open they were to working with the president (except, perhaps, for repealing that whole health care thing). Rand Paul, the next senator from Kentucky, said on MSNBC that his family was hoping to meet the Obama girls. You could almost see the two dads stretched out in front of the TV, sharing a laugh at “Phineas and Ferb.”

Reality will intrude soon enough, and Republicans will have to decide what kind of opposition they intend to be. One could argue that the most fundamental choice facing the new Republican House majority, in particular, is whether to stand on cultural or intellectual dissent — or, put another way, whether they want to cast themselves principally as the party of Sarah Palin or the party of Paul Ryan.
The election only enhanced the stature of Ms. Palin, who bucked her party’s leadership by endorsing several outsider candidates — among them Mr. Paul and Nikki Haley, the governor-elect of South Carolina — who won this week. A powerful force in the party, Ms. Palin represents an aggrieved, anti-elitist strain of conservatism that goes back to Richard M. Nixon’s Silent Majority. It is a rural conservative impulse, rooted most firmly in the South and West, that equates liberal government with tyranny and anti-Americanism.

In the kind of opposition Ms. Palin represents, issues aren’t always meant to be addressed through governance, but rather to be deployed as blunt instruments in pursuit of more electoral gains. For the new Republican-led House, that would mean more questions about the president’s birth certificate, more subpoenas flowing down Pennsylvania Avenue, more votes on abortion and flag burning and all of that.

And it might mean passing a bill on gun rights or school prayer that excites the base, knowing full well that the Democratic-controlled Senate will simply let it die anyway.
Mr. Ryan, of Wisconsin, on the other hand, is the author of a radically austere plan to scale back federal spending, and he is about to become chairman of the House Budget Committee. Mr. Ryan, a Washington insider, is heir to the side of the conservative movement that grew out of think tanks and policy journals in the 1960s and ’70s.
To Mr. Ryan’s way of thinking, liberals in government aren’t cultural imperialists; in fact, he gets along with them just fine. Rather, Mr. Ryan sees the president and his allies as hopelessly misguided, reliant on unsustainable government spending rather than the market. Mr. Ryan’s kind of opposition would offer up an alternative, polarizing agenda, forcing President Obama and his allies to defend their philosophy and their intransigence.

Republican conundrum
In a sense, Ms. Palin and Mr. Ryan represent opposite sides of the Republican conundrum at the moment. Ms. Palin is an outsider with a serious following in the party’s grass roots, but she has not shown that she has a plan to actually govern. Mr. Ryan is a powerful Washington figure with an office full of detailed flip charts, but he has little, if any, following out among the faithful.
Mr. Boehner or his newly empowered lieutenants probably see some peril in pursuing either kind of opposition. Translating all of this Tea Party rhetoric about spending and deficits into some kind of alternative governing plan is a sobering undertaking — so much so that most Republican candidates this year refused to endorse Mr. Ryan’s version, which would partly privatize Social Security and Medicare.
Video: President Obama humbled by voters (on this page)

But to adopt a less substantive, more cultural kind of opposition, while it might satisfy a lot of Tea Party types, would be to court another voter revolt in 2012 or 2016. After all, if exit polls and conversations with individual voters are any indication, a lot of the unrest that came to the surface Tuesday had to do with the perception that no one in Washington is serious about solving problems like the national debt. It’s hard to see how more subpoenas and more blocked judges are going to change that perception.

Many Republicans seem to hope they won’t have to choose the direction, that they can just sit back and respond, either culturally or intellectually, to various pieces of Mr. Obama’s agenda. But there will be pivotal moments of choice for the Republican opposition, and one of them may be only weeks away.
In December, Mr. Obama’s debt-reduction panel (of which Mr. Ryan is a member) is supposed to release its findings on the budget, which, assuming the bipartisan panel can’t reach a consensus, will most likely encompass several options for reducing spending in the long term.
Video: GOP to launch ‘transition team’ (on this page) A Palinesque opposition would probably seize on proposed tax increases or benefit cuts in the plans, accuse Mr. Obama of creating the commission as a gimmick and dismiss the whole exercise as just another waste of the citizens’ money. A more intellectual approach would be to embrace the most conservative option offered by the panel and take it up for debate, in hopes of pressuring the White House into some meaningful compromise.
Which way the new Republican majority goes will say a lot, perhaps, about whether it intends to oppose the president’s identity or his ideas.

Copyright © 2010 The New York Times                    

Lame duck Congress: Lots to do, little time

Losers, survivors gather for final business ahead of new congressional class                     

By Tom Curry National affairs writer

msnbc.com msnbc.com

updated 11/4/2010 10:21:14 AM ET

The midterm elections were a game changer, for sure. But before a new cadre of congressman and women are sworn in, and before power in the House officially moves from left to right, the lame duck Congress has work to do.

The survivors, losers, and those senators not on the 2010 ballot return to Capitol Hill on Nov. 15 to address a host of outstanding issues. Among the most crucial:
Tax hikes Raise taxes? Or postpone that decision for another 18 months or two years, as some Democratic members would like?
The 2001 and 2003 income tax provisions expire on Dec 31. If Congress takes no action before then, a family of four, with two earners, making $85,000 a year, will pay about $1,800 more in federal income taxes in 2011, according to the nonpartisan Tax Foundation.
Obama has proposed higher tax rates on couples filing jointly with incomes of more than $250,000 and on individuals with incomes above $200,000. He’d leave in place the current rates for people with incomes less than $250,000.


Reining in spending Fiery campaign rhetoric about “out of control federal spending” aside, the long-term increase in federal debt is more threatening than any one year’s excess spending.
The Congressional Budget Office warned last summer that “growing budget deficits will cause debt to rise to unsupportable levels.” And growing debt would “increase the probability of a sudden fiscal crisis.”
A bipartisan commission (headed by former Clinton chief of staff Erskine Bowles and former Wyoming Sen. Alan Simpson) is due to issue a report by Dec. 1 on how the federal government can restrain spending and cut the deficit by one third by 2015.
The commission includes discordant members, from staunch conservatives such as Rep. Jeb Hensarling of Texas to former labor union leader Andy Stern. It is hard to see the required 14 out of 18 members agreeing on a consensus set of proposals.
But ever since last spring’s Greek sovereign debt crisis, there’s been an increasing sense among some voters and members of Congress that the federal spending is on a fiscally unsustainable course.


New stopgap spending bill Congress has passed a continuing resolution (CR) allowing the government to keep itself funded until the beginning of December. So the lame duck session will need to pass a new CR in the next few weeks, or some government agencies would begin to shut down.
Averting Medicare cuts Medicare’s payments to doctors will be cut by nearly 30 percent by New Year’s Day. Congress seems likely to avert these cuts which are mandated by a law it passed in 1997.
Congress designed the 1997 law to keep Medicare’s payments to doctors in line with the growth rate of the overall economy, or growth in Gross Domestic Product (GDP).
But for eight years, Congress has voted to postpone the annual cuts and instead add them to next year’s scheduled cuts.
The American Medical Association is urging Congress to pass a 13-month “patch” to avert the cuts.
There’s no way to know what would happen if the 30 percent cut took effect: some doctors would continue serving Medicare patients just as before and would absorb their decline in revenue. But some might stop serving Medicare patients altogether, a trend that has already begun in some places. It “will be a catastrophe” if the cuts take effect, said Dr. Cecil Wilson, president of the American Medical Association.
Congress’s habit of postponing the cuts makes budget forecasts somewhat unrealistic. Federal law requires budget projections to assume that current law will be in effect in future years so the ten-year budget forecast assumes that Medicare spending will be curbed when experience shows that it won’t. 
Greenhouse gas regulations The U.S. Chamber of Commerce, the National Association of Manufacturers, and other industry groups want Congress to impose a moratorium on the Environmental Protection Agency’s regulations affecting stationary sources of greenhouse gas (GHG) emissions, such as power plants.
The new regulations go into effect on January 2, 2011. If not delayed, the EPA rules would hinder economic recovery and job creation, business leaders argue.
Kyle Danish, an environmental lawyer with the Washington firm of Van Ness Feldman, said Congress could either defund or delay EPA regulatory efforts.
Danish said a congressionally ordered delay in EPA rules seems more likely than defunding.

Sen. Jay Rockefeller, D-W.V., has offered a bill would delay the impact of EPA greenhouse gas regulation of stationary sources for two years, “That would allow time both for Congress to act on climate change and for the economy to recover,” Danish said.
When it was introduced earlier this year, Rockefeller's bill attracted support from a number of moderate Democrats in the Senate, Danish said.
“Supporters of a defund or delay amendment will want to attach the amendment to a bill that is very difficult for the President to veto, such as the CR,” he said.
During the lame duck session, “when Democrats still hold the leadership positions in both chambers, it may be easier for them to fend off this sort of amendment. Starting with the new Congress, however, it may be harder for them to play defense.”
Worth noting: 30 of the House Democrats who voted for the Waxman-Markey cap-and-trade GHG legislation last year were defeated on Tuesday. (Ironically one of the few GOP House members to vote for the Waxman-Markey bill was Mark Kirk, who won the Illinois Senate election Tuesday.)

The bill passed in the House by only seven votes and was never acted on by the Senate.
President Obama sounded pragmatic about the futility of pushing for Waxman-Markey type legislation in the wake of Tuesday’s Democrat defeats.
"It's doubtful that you could get the votes to pass that through the House this year or next year or the year after," Obama said.
"The smartest thing for us to do is to see if we can get Democrats and Republicans in a room ... and seeing are there ways we can make progress in the short term and invest in technologies in the long term that start giving us the tools to reduce greenhouse gases and solve this problem."
"Cap-and-trade was just one way of skinning the cat; it was not the only way," Obama said.

Nuclear weapons treaty with Russia
According to Arms Control Association executive director Daryl Kimball, “one of the few domestic or foreign policy issues upon which there is a modicum of bipartisan agreement is the new Strategic Arms Reduction Treaty” which is awaiting Senate action.

“If Senate leaders agree to spare two to three days for floor debate and a vote on the treaty, it would very likely win well over the 67 votes that are needed for ratification,” he said arguing that Tuesday’s election results “don't fundamentally change that calculus.” 

The treaty with Russia would cut the number of strategic nuclear warheads on each side by approximately 30 percent and provide for monitoring and verification.
Obama nominees Forty six of Obama’s judicial and executive branch nominees are still on the Senate executive calendar awaiting action.
It’s conceivable Republican and Democratic leaders could agree to confirm some of non-controversial judicial nominees before year end. But the most controversial – Goodwin Liu– will almost certainly not be confirmed.
Republicans oppose Liu because they think based on his academic writings that he would rule that health insurance and other benefits are constitutionally required.
To date Obama has gotten 123 of his judicial nominees confirmed by the Senate; 47 Obama judicial nominees are pending.
Oil drilling in the Gulf of Mexico Also being stymied for now in the Senate is Obama’s nominee to head the Office of Management and Budget, Jacob Lew.
Sen. Mary Landrieu, D-La., has put a hold on the Lew nomination to protest the Obama administration’s moratorium on deepwater oil drilling in the Gulf of Mexico.
But when Interior Secretary Ken Salazar lifted the moratorium, she said that wasn’t enough. Landrieu she wants the Obama administration to speed up “the granting of permits in shallow and deep water, and provide greater certainty about the rules and regulations (the oil and gas) industry must meet.”
She said last month that once the lame-duck session begins, she will have had time to see if the lifting of the deepwater drilling moratorium “is actually putting people back to work.”
Jobless benefits Speaking of unemployment: without action by Congress, jobless benefits for two million unemployed people will run out by the end of December.


In September, 41.7 percent of the unemployed had been jobless for 27 weeks or more. The total number of jobless is 4.5 million higher today than in November 2008. Exit polls Tuesday found deep voter pessimism about the economy, a reflection of the persistently bad job market.
Repeal health care overhaul “We will immediately take action to repeal this law,” House GOP leaders vowed in their Pledge to America.
Exit poll data showed broad support among conservative voters and older voters for repealing the health care overhaul. These voters were the bedrock of GOP support in the elections. In the national exit poll sample a plurality of all voters, 48 percent, supported repeal.
But Senate Democrats would likely block any repeal attempt. In the new congress, House Republicans can use their control of investigating committees to grill administration officials on the law.
House Republican leader John Boehner has called the law a "monstrosity."
At his Wednesday press conference Obama said “there are going to be examples where I think we can tweak and make improvements,” but continued to argue, just as he did before the election, that the bill would benefit Americans.
Debt limit Sometime in the first of half of next year, the new Congress will need to vote on raising the debt limit. That vote will put some newly elected GOP members in an awkward spot since they campaigned on a pledge of opposing more borrowing and spending.
House Republican Whip Eric Cantor said last week, “We need to demonstrate a commitment and the fiscal discipline and an established track record, by the time that vote comes, of cutting spending,” he said.
He specifically called for reducing the federal workforce and making federal pay comparable to that in private sector. He said GOP leaders need to “show the people that we are serious in terms of reducing the size of government and the federal deficit, in order to see that vote successful on increasing the size of the debt limit.”
There are only six weeks between the start of the lame duck session on Nov. 15 and the last day of the year. Subtract weekends and Thanksgiving Day and Christmas Day, there are only 34 days left, precious little time to do lots of deal making.
© 2010 msnbc.com Reprints

Your move, GOP: What about the empty houses?

Posted: Thursday, November 4 2010 at 06:00 am CT by Bob Sullivan

George Bush, Barack Obama, Democratic wave, Republican tsunami. It doesn't matter who’s in charge -- one problem has, so far, transcended them all: all those empty houses.  
The fragile U.S. economy will not recover until someone solves the issue of empty houses and their drag on everyone’s financial stability. Right now, things aren't looking good. There may still be 10 million or so more foreclosures in the pipeline, on top of the 3 million from 2009 and another 3 million expected this year. There already are 19 million vacant homes in America, according to the U.S. Census Bureau. Nothing would more quickly kill a fledgling recovery and further decimate everyone’s home values  than dumping another 10 million empty homes on the market.
Here's the problem: While the Obama plan to help at risk homeowners has been a disastrous mess, Republicans say they want to do even less.

The empty house problem impacts us all. Each foreclosure drains $4,000 in equity from neighboring homes, according to some estimates.  Empty neighborhoods create blight; empty houses kill the new home construction industry. And even if you aren't among the 10 million homeowners at risk of foreclosure -- that's one in five outstanding mortgages in the country --  odds are good that you are a responsible mortgage payer whose home is now “under water.”
In California, 35 percent of homeowners are in that plight, owing more than their house is worth. In Florida and Arizona, half of all homeowners are drowning, and in Harry Reid's Nevada, fully 70 percent are under water.  Homeowners with negative equity are in serious financial handcuffs.  They often can't move to take a new job, because they can't afford to sell their homes. They can't borrow to help with other debt or to fix up their homes.  And they feel terrible, which puts them on the sidelines for any recovery that might be triggered by consumer spending.
When it comes to empty houses, we are all in this together. So why are we doing so little about it? And why would we even consider doing even less?
Even the most blindly loyal Obama supporters have to be disappointed with the president's feeble attempts to help homeowners at risk of foreclosure. After 18 months, the Home Affordable Modification Program (HAMP) has fallen about 90 percent short of its stated goal.  We were told it offered hope to 3 million or 4 million people. Instead, fewer than 500,000 homeowners have new, permanently lower mortgage payments. Meanwhile, more than that have been kicked out of the program,  having been drawn in by the prospect of lower mortgage payments, then later denied for non qualification, failure to make payments, or a host of other reasons. Worst yet, since the advent of HAMP, some 3 million people have been kicked out of their homes.
Instead of hope, most HAMP participations found Kafkaesque frustration. The litany of nightmares has been well-chronicled: lost paperwork, random denials, stall tactics, empty promises. Homeowners following bank instructions and making payments as instructed still received foreclosure notices. People who spent their last dollars making temporarily modified mortgage payments – instead of using that money for rent and to start a new life -- were kicked out of their homes anyway.
(See my colleague John Schoen's reporting on this; or have a look at a Web site devoted to HAMP horror tales).
So nearing the end of 2010, the back of the baseball card on HAMP looks like this: Banks repossessed homes at a rate of 100,000 per month, while HAMP was helping 14,000 per month.  That's not helping.
'Cruel,' and 'false hope'These tepid -- in some cases, counterproductive -- efforts to address the foreclosure problem are the single biggest failure of Obama's first two years in office, in my view. But don't take my word for it: Here's how the TARP inspector general described the program in an audit released last week:
"What Treasury deems a universal benefit, homeowners call 'cruel' and offering ‘false hope,’” it said.  The report accused the Treasury Department of trying to "define failure as success." The report accuses Treasury of disregarding the "harm and suffering" the program has caused, and ignoring cases where participants "unnecessarily (deplete) dwindling savings in an ultimately futile effort” to obtain relief.
Naturally, Republicans have seized on the program’s failure. As recently as last week, Rep. Darrel Issa, R-Calif., called for pulling the plug on HAMP.  Issa's words have serious weight: He will likely lead the House Oversight and Government Reform panel next year, giving him the power to launch an investigation of HAMP.
In a letter sent to Treasury in July, Issa argued forcefully for HAMP's demise.
"The massive government intervention is simply not working," he wrote. "HAMP is reaching only a tiny fraction of those homeowners whom the program was designed to help. … The evidence points to only one conclusion: The program should end immediately."
Hapless HOPE NOWWhat does Issa say should replace it? Private efforts at modification. In fact, Issa said that HAMP "disrupted" modifications that banks would have completed on their own had the government not gotten in the way.
Let me summarize these two approaches to fixing the empty house problem: Dumb and dumber.
If you've watched television after 11 p.m. in America during the last two years, you know all you need to know about private home loan modification, thanks to nonstop late-night infomercials.  You might not remember that the old "leave it up to the private sector" plan has already been tried.
Back in 2007, the Bush administration attempted a voluntary modification program called the HOPE NOW Alliance, run by banks.  HOPE NOW essentially provided a toll-free hotline to help consumers contact their banks and plead for mercy.  HOPE NOW still exists, and the alliance still puts out press releases saying it's helped hundreds of thousands of at-risk homeowners.  Does anyone believe it's done enough? Your eyes, and all those “for sale” signs, should tell you otherwise.
It's hard to see how removing the government's assistance program could make things better. And Republicans can't directly kill the program, because they only control one body of Congress. The money for HAMP comes from the already-appropriated TARP/bailout funds. An aggressive investigation into HAMP's failures could, however, make things very uncomfortable for the administration.
'Best thing we've gotBut many advocates for foreclosure assistance programs say they think Republican calls to torch government housing help are probably just saber-rattling.
"We've got a huge foreclosure crisis, and so far nothing we've done has turned the tide. But HAMP is the best thing we've got," said Alys Cohen, of the National Consumer Law Center.  She said the program's biggest problem is that banks aren't complying with its rules, and no one is punishing them for that.
 The Treasury Department also has failed to set benchmarks for success, she said.  "It needs to be fixed, not scrapped,” Cohen said of HAMP. “... It would be a shame if people scrapped the problem and replaced it with nothing else to help 10 million people who need it."
Ira Rheingold, a public interest attorney with the National Association of Consumer Advocates, called HAMP "extremely disappointing," and said the program wasn't well designed. But he, too, said the program should be fixed instead of scuttled.
"There are a number of homeowners who can be helped, but I fear they will say this is a failure, let's shut this down," he said. "The GOP will wind up blaming the government, as opposed to going after the banks.  They will figure out a way to protect banks from their own incompetence."
The empty house problem is vexing because it is not monolithic.  One side might think the problem was created homeowners who overreached and deserve to lose their homes; the other side counters that corrupt banks tricked families into booby-trapped loans. In fact, the housing mess is all those things, and more. Lenders who used illegal tactics like “robosigning” foreclosure documents and greedy speculators who bought condos in South Florida hoping to flip them for profit also contributed to the mess. Ideally, Cohen said, someone would invent a "trick-o-meter" to figure out which homeowners deserved help, and which deserved market punishment.
"But no one has a trick-o-meter," she said.
The problem, said Rheingold, is that decisions on loan modification have been left to banks in every program designed so far.
"There has to be a recognition that you cannot let the loan servicers be the ultimate decision-makers here,” he said. “Right now people are wrongly denied all the time. We have to create a due process. "If there is anything we should have learned so far, it's that if we build anything where we are trusting the banks, we are idiots. That's a recipe for failure. Depending on banks to do the right thing instead of mandating they do the right thing is a recipe for failure."
Possible solutionsOne controversial element of due process might be allowing bankruptcy judges to perform so-called "cramdowns," which reduce the principal balance on home loans. Right now, there is no legal process for reducing outstanding balances.  Banks have strongly opposed the idea, saying it would forever change the nature of home mortgage lending.
But less radical measures also could help, Rheingold said. Centrist Republican Sen. Olympia Snowe, R-Maine, proposed earlier this year a measure that would have created an Office of the Homeowner Advocate within the Treasury Department that would help consumers work their way through housing rescue plans.  Such an advocate is sorely needed, Rheingold said, and Snowe’s support for the measures shows there is at least some Republican support for creative solutions.
And he said a new Housing and Urban Development test program designed to help unemployed homeowners facing foreclosure shows promise.  The program provides bridge loans and other aid for up to 24 months while homeowners search for work.
'What are we doing to save communities?'Still, the empty house problem is mammoth. If 10 million families lose their homes,  that would represent roughly $2 trillion in home value, and roughly $1.8 trillion in outstanding mortgage balances.  No matter how you do it, that's a huge hole in the economy to fill.
Cohen said homeowner advocates aren't attached to Obama's HAMP program as the solution to that problem; they are chiefly worried that an ill-advised attempt to dismantle it and turn the problem over to market forces could be a final crushing blow to the housing market.
“The real question isn't HAMP. HAMP is a red herring," she said. "We have a foreclosure crisis. What are we going to do to help these people, save communities  and save the economy? That's really the issue, not 'Does HAMP work or not?' When the history books are written about our time I hope the narrative won't be that both parties sided with the banks."

GOP leader's top goal: Make Obama 1-term president

Sen. McConnell takes hard line, aims to cut down health care law                     

WASHINGTON — The Senate's Republican leader has a simple postelection message for President Barack Obama: Move toward the GOP or get no help from its lawmakers.

First Thoughts: McConnell doubles down


Senate Minority Leader Mitch McConnell on Thursday offered an aggressive assessment of the election results, calling for votes to erode the reach of the health care law that was a signature of the Obama administration.
"That means that we can — and should — propose and vote on straight repeal, repeatedly," McConnell said
.
Story: Nixing — or 'fixing' — health law? Don't hold your breath

He said the only way Republicans in Congress can achieve their goals is "to put someone in the White House who won't veto" a repeal of Obama's health care reform, spending cuts and shrinking the government.
McConnell said the results of the midterms were not about Republicans but instead about Democrats, who he said got an "F." He said he expects Democrats will begin peeling off of their base to start supporting GOP initiatives.
"Every one of the 23 Democrats up [for re-election] in the next cycle have a clear understanding of what happened Tuesday," McConnell said. "I think we have major opportunities for bipartisan coalitions to support what we want to do."

McConnell eyes Democrats up for re-election in 201

McConnell's confrontational tone was in sharp contrast to the chastened posture Obama took Wednesday in the face of a new Republican controlled House and Republican gains in the Senate.
On Wednesday, likely incoming House Speaker John Boehner said the he promised to be honest with Obama and the two agreed to work together on cutting spending and creating jobs, even though Republicans campaigned on vows to turn back much of Obama's agenda.
In remarks prepared for a speech Thursday to the conservative Heritage Foundation, McConnell says Republicans will work to deny Obama a second term in the White House in 2012.
"Over the past week, some have said it was indelicate of me to suggest that our top political priority over the next two years should be to deny President Obama a second term in office," McConnell said. "But the fact is, if our primary legislative goals are to repeal and replace the health spending bill; to end the bailouts; cut spending; and shrink the size and scope of government, the only way to do all these things it is to put someone in the White House who won't veto any of these things."
McConnell's own approval rating, per a September NBC/Wall Street Journal poll, is 12 percent positive, 20 percent neutral and 18 percent negative, with another 50 percent responding that they did not have an opinion.
Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Senate Minority Leader Mitch McConnell addresses the Heritage Foundation in Washington, D.C., about remarks he made earlier this week in which he said making President Obama a one-term president is a top goal for the GOP.

First Thoughts:

 McConnell doubles down

McConnell to double down on his my-top-priority-is-to-defeat-Obama comment… He'll also call for repeal of health care, though the midterms didn't produce a mandate on the law... From the “thumping” in ’06 to the “shellacking” in ’10… The GOP ideological food fight begins… Unfinished business in WA, AK, MN, and CT… Dudley concedes to Kitzhaber in Oregon… And the 10 undecided House races.
From Chuck Todd, Mark Murray, Domenico Montanaro, Ali Weinberg
*** McConnell doubles down: Twenty-four hours after Speaker-to-be Boehner and President Obama talked about the need to work together, Senate Minority Leader Mitch McConnell is taking a different tack. In a speech to be delivered at 11:00 am ET in DC, NBC’s Ken Strickland reports, McConnell will defend his statement that defeating President Obama in 2012 is his top priority -- a comment that drew criticism from Democrats, especially with unemployment near 10%. "Some have said it was indelicate of me to suggest that our top political priority over the next two years should be to deny President Obama a second term in office," McConnell is expected to say, according to excerpts of today’s speech. "But the fact is, if our primary legislative goals are to repeal and replace the health spending bill; to end the bailouts; cut spending; and shrink the size and scope of government, the only way to do all these things it is to put someone in the White House who won't veto any of these things."
*** No mandate on health care: On health care, McConnell will say that Republicans should propose and vote on a "straight repeal, repeatedly." He'll also say House Republicans should use their new majority to deny funding implementation of the law. That, of course, would lead to potential gridlock in the Senate. In the national exit poll, 47% said they wanted to keep the health law in place or expand it; 48% of those who voted said they wanted to repeal it. So the midterms weren’t a mandate for anyone's position on health care. The public is divided -- right down the middle.
*** From “thumping” to “shellacking”: Four years ago, after his party lost control of Congress, George W. Bush declared in a press conference that his party had taken a “thumping.” (But he issued this qualifier: “If you look at race by race, it was close. The cumulative effect, however, was not too close.”) Yesterday, at his own press conference after his party’s midterm defeats, Barack Obama stated the Democratic Party suffered a “shellacking.” Obama, though, was more introspective than his predecessor (whose book interview with Matt Lauer will dominate American politics next week). "This is something,” Obama said, “that I think every president needs to go through, because … the responsibilities of this office are so enormous … and in the rush of activity sometimes we lose track of … the ways that we connected with folks that got us here in the first place." Obama, like Bush did in ’06, also took some responsibility for the defeats. "It underscores for me that I've got to do a better job, just like everybody else in Washington does."
*** GOP food fight: Remember when we said that the GOP Senate losses in Colorado, Delaware, and Nevada would only spark a pragmatist-vs.-purist fight within the Republican Party? Well, here we go… Politico says that "a bloc of prominent senators and operatives said party purists like Sarah Palin and Sen. Jim DeMint (R-S.C.) had foolishly pushed nominees too conservative to win in politically competitive states. Movement conservatives pointed the finger right back at the establishment, accusing the National Republican Senatorial Committee of squandering millions on a California race that wasn’t close at the expense of offering additional aid in places like Colorado, Nevada and Washington state." The tension will be highest between DeMint and a newly-re-elected Lisa Murkowski, should she win. Speaking of DeMint, in an interview with National Journal, don't miss these two items: 1) DeMint said the only 2012er he's talked to since Tuesday was Mitt Romney who phoned him to congratulate him; 2) DeMint said he doesn't foresee a need in changing the Senate GOP leadership team but added, "Any leadership changes would be a year or two down the road." That a subtle threat to the current Senate GOP leadership team? You be the judge.
*** Unfinished business: In the unfinished Senate contest in Washington state, Sen. Patty Murray (D) widened her lead yesterday, “riding a Democratic surge in King County that is looking increasingly difficult for Rossi to overcome,” the Seattle Times reports… In Alaska, the counting of the write-in ballots -- which exceed the vote tally Joe Miller (R) received -- will begin next week… In Oregon’s gubernatorial race, former NBA player Chris Dudley (R) conceded, giving the race to former Gov. John Kitzhaber (D)… In Minnesota’s gubernatorial race, it looks like the state is headed for another recount, although Mark Dayton (D) leads Tom Emmer by nearly 9,000 votes (compared to Norm Coleman’s 762-vote lead after Election Day in ’08). And get this: Outgoing Gov. (and likely GOP presidential wannabe) Tim Pawlenty says he will serve until the new governor is sworn in, even if that’s after his term ends on Jan. 3.
*** Confusion in Connecticut: Yet the craziest undecided race is the one for Connecticut governor. Yesterday, state Secretary of State Susan Bysiewicz declared Dan Malloy (D) the unofficial winner by about 3,100 votes. The AP later withdrew its call of Malloy as the winner now with opponent Tom Foley (R) leading Malloy by some 8,000 votes with all but 1.5% of precincts reporting, the Hartford Courant says. (However, per our editorial screen, 11% of the total vote is still out.) And both candidates are declaring victory.
*** The uncalled House races: Republicans are at currently +60 in House races, and that gain could get to in the neighborhood of +63 when all the votes are finally counted (and recounted). There are 10 races still yet to be decided. Republicans lead in three of those -- CA-20, IL-8, and TX-27. All three are pretty big surprises. Most forecasters would have picked CA-11 -- which is almost certainly headed for a recount -- as the top GOP pick-up opportunity in the state. CA-11 is the closest race right now, with incumbent Jerry McNerney (D) up by just 121 votes out of about 164,000 votes (with 100% of precincts reporting). The next closest are: WA-2, where incumbent Rick Larsen (D) is up 502 votes out of 195,000 (71% in); IL-8, with incumbent Melissa Bean (D) down 553 votes out of 194,000 (100% in); KY-6, with incumbent Ben Chandler up just 600 votes out of 239,000 (100% in); TX-27, with incumbent Solomon Ortiz down 799 votes out of 101,000 (100% in); and in VA-11, freshman Rep. Jerry Connolly (D) is up by 920 votes out of 220,000. By the way, Rep. Bob Etheridge (D), who the AP says lost to Renee Ellmers (R), has NOT conceded. The margin is 1,646 votes; that's after Etheridge cut the margin by 500+ votes in late counts added Wednesday.
*** The full list: As far as the UNCALLED races, here's our the full list (in order of likely GOP takeover):
-- CA-20: 100% in; Vidak (R) up 51-49 or 1,823 votes of 63K
-- IL-8: 100% in Walsh (R) up 49-48 or 559 votes of 194K
-- TX-27: 100% in; Farenthold (R) up 48-47, or 799 votes of 101K
-- CA-11: 100% in; 47-47 McNerney (D) up by just 121 votes of 164K
-- WA-2: 71% in; 50-50 Larsen (D) up 502 out of 195K
-- KY-6: 100% in; 50-50 Chandler (D) up 600 votes of 140K
-- VA-11: 100% in; 49-49 Connolly (D) up 920 votes out of 222K
-- AZ-8: 100% in; Giffords (D) up 49-48, or 2,349 votes of 239K
-- AZ-7: 100% in; Grijalva (D) up 49-46, or about 4,083 votes of 121K
-- NY-25: 96% in; Maffei (D) up 51-49, or 2,196 votes of 189K

Haiti urges 1 million to flee camps ahead of Tomas

Up to 10 inches of rain expected; severe flooding is feared                     

Very Cool Interactive hurricane map   you can se all past hurricanes for this year

PORT-AU-PRINCE, Haiti — More than 1 million people were advised to leave earthquake homeless camps in Haiti's rubble-choked capital Wednesday as disaster officials watched the approach of Tropical Storm Tomas.

But few of the earthquake survivors who have spent nearly 10 months alternately baking and soaking under plastic tarps and tents have anywhere to go.
Painfully slow reconstruction from the quake, prior storms and the recent committing of resources to fight a growing cholera epidemic have left people with few options and overtaxed aid workers struggling to help.
"We are using radio stations to announce to people that if they don't have a place to go, but they have friends and families, they should move into a place that is secure," said civil protection official Nadia Lochard, who oversees the department that includes Port-au-Prince.
Concerns are even greater in the western reaches of Haiti's southern peninsula, where heavy flooding is predicted.
Disaster officials have extended a red alert, their highest storm warning, to all regions of the country, as the storm is expected to wind its way up the west coast of Hispaniola through storm-vulnerable Gonaives and Haiti's No. 2 city, Cap-Haitien, sometime Friday.
The U.S. National Hurricane Center in Miami announced a tropical storm warning for Haiti, along with tropical storm watches for Jamaica, the western Dominican Republic, eastern Cuba and the southeastern Bahamas as well as Turks and Caicos.
"Tomas could be approaching hurricane strength as the center nears Haiti" on Friday, the center said.
The storm, which strengthened from a tropical depression during the day, on Wednesday afternoon was 305 miles south of Port-au-Prince with maximum winds of 45 mph. It began to make an expected right turn toward the Greater Antilles, moving north-northwest at 6 mph.
The center said the storm could dump up to 10 inches of rain over much of Haiti.
Even just five inches could cause catastrophic floods in the severely deforested country, according to the U.N. Office for the Coordination of Humanitarian Affairs.
In Jamaica, soldiers will evacuate hundreds of people in the island's eastern region Thursday and move them into emergency shelters ahead of the storm, Information Minister Daryl Vaz said.
"We will be going all out to make good sense prevail," he said at a news conference Wednesday.
Most of the people who will be evacuated are squatters living along unstable gullies that often flood during heavy rainstorms.
Kareen Bennett, a forecaster with Jamaica's Meteorological Service, said heavy rains will lash the eastern region by Friday morning.
Jamaica is still struggling to recuperate from floods unleashed by Tropical Storm Nicole in late September that killed at least 13 people and caused an estimated $125 million in damage.
People who are still using boats to move about in the island's rural western regions also will be moved to shelters, said Ronald Jackson with the emergency management office.
Tomas has already killed at least 14 people and left seven missing in the eastern Caribbean nation of St. Lucia, where it caused more than $37 million in damage. In nearby St. Vincent, the storm wrecked more than 1,200 homes and caused nearly $24 million in damages to crops, especially bananas — one of St. Vincent's top commodities.
It could be the first big storm to strike Haiti since the Jan. 12 earthquake killed as many as 300,000 people and forced millions from their homes. It would also be the first tropical storm or hurricane to hit since 2008, when Fay, Gustav, Hanna and Ike battered Haiti in the space of a month, killing nearly 800 people and wiping out 15 percent of the economy.
Aid workers are scrambling to prepare but are badly short of supplies including shelter material because of the responses already under way to deal with the aftermath of the earthquake and an unprecedented cholera outbreak that has killed more than 330 people and hospitalized more than 4,700.
A U.S. Navy vessel, the amphibious warship Iwo Jima, was steaming toward Haiti to provide disaster relief.
An enormous international aid effort flowed into Haiti in the immediate wake of the quake, but reconstruction has barely begun, in part because donors have not come through with promised funds. The United States has not provided any of the $1.15 billion in reconstruction aid it pledged last March.
© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

With governor wins, GOP gains clout to fight health law

Newly elected officials have promised to repeal or change legislation    

The Democrats’ ambitious health care overhaul is facing roadblocks from newly elected state officials who harshly criticized it while campaigning and who are now in a position to make good on their promises.

In at least 10 states, including Kansas, Tennessee and Oklahoma, Republicans replaced Democrats in governors’ mansions.  The GOP also picked up seats in legislatures in many states. In the four races for state insurance commissioner, two went to candidates opposed to the law, while voters in California picked a Democrat in favor of it. One incumbent ran unchallenged.

GOP gubernatorial winners included Sam Brownback of Kansas, who called the reform law "an abomination." Tennessee’s governor-elect, Bill Haslam, said the law is an "intolerable expansion" of federal power and a "reminder of the incredible arrogance of Washington."

GOP Leaders Say Health Law Repeal Is A Top Priority; Obama Hopes To Find 'Common Ground'Republicans Look To Use Majority For Health Overhaul Repeal, Plan Vote     

Story: After 'shellacking,' Obama laments disconnect with voters

In Ohio, former House Budget Committee Chairman John Kasich defeated Democratic incumbent Ted Strickland, after criticizing the law as doing nothing to control costs and “giving bureaucrats more control over our personal health care decisions.”  Republicans also took control of the legislature.

In Wyoming, the election of Republican gubernatorial candidate Matt Mead could have significant implications for the health law in that state, since he will have the power to appoint the attorney general and insurance commissioner. Mead says Wyoming cannot afford its share of the funding necessary to expand Medicaid.

While unable to overturn the federal law, the newly elected officials will be under pressure to act. They could lean on congressional delegations to repeal or change the legislation, seek waivers from some of its provisions, veto state legislation related to it and appoint like-minded people to important positions, such as insurance commissioner slots.

At the very least, states may opt to slow implementation, while Republican lawmakers look ahead to the 2012 presidential election.

"If the Republican governors were to get together and say ‘we’re going to derail this train,’ they could do much more to reverse the national health [law] than an effort to repeal it in Congress," said Ross Baker, a political science professor at Rutgers University. "The governors could, without defying federal law, simply implement it inefficiently, throw sand in the gears."

To be sure, some political observers say that as the dust settles, even governors who vehemently opposed the bill may realize if they don’t act in key areas – such as establishing health insurance marketplaces – the federal government will do it for them. In addition, the new law includes federal funding to expand the Medicaid program and grants to set up or bolster other programs, including public health. Governors may be reluctant to turn down the money.

Story: 'Hurricane' ends Democrats' control of House

While Congress may end up in gridlock, the law requires state officials to make decisions in several key areas during the next few years, with lasting impacts on consumers, insurers, state finances, employers and the uninsured.

States must decide whether to set up their own insurance marketplaces, called exchanges, and whether to grant state regulators more authority, such as the power to review and reject premium increases before consumers start paying the new rates. One of the most difficult steps will be planning how to enroll millions of newly eligible low-income residents into Medicaid programs starting in 2014.

Obama administration officials say most states are already working to carry out the law – and they expect that will continue no matter how power may have shifted in Tuesday’s election.

Still, with state budget pressures and other concerns, "you are going to see push back … and demands for changes to the legislation to give them more flexibility and control," said Grace-Marie Turner, president of the Galen Institute, a conservative, free-market research group.

Even before the election, some elected officials moved to block or slow the legislation, including Republican Minnesota Gov. Tim Pawlenty.

In Florida, the incoming House speaker Dean Cannon wrote Gov. Charlie Crist in October cautioning that the legislative branch, not the executive, would be setting the framework for applying the law. And 20 states have already joined a Florida lawsuit to overturn the law on constitutional grounds.

Brownback has said he wants Kansas to join a lawsuit challenging the health overhaul. Taking that step will pit state residents against their former governor, Kathleen Sebelius, now the secretary of Health and Human Services, who is crafting key regulations needed to launch the law’s many provisions.

Story: Health insurance mandate on ballot in 3 states

Kansans also re-elected Insurance Commissioner Sandy Praeger, a moderate Republican who beat back a challenge in the primary and ran unopposed Tuesday. Along with a number of other state commissioners, Praeger has played a key role in helping craft new rules that will affect the health law in her role as a leader in the National Association of Insurance Commissioners.

Praeger sees many upsides in the law for Kansas, including the expansion of Medicaid in 2014 to low-income working adults with no children. They currently don’t qualify for Medicaid in her state and many others, no matter how little their income.

"There’s been so much rhetoric about 'Obamacare' and not liking this law, that we have a steep learning curve in terms of pointing out to state legislators and new governors all the benefits," Praeger said.

No matter which party is in charge, state officials face a number of decisions:

Creating Exchanges

State GOP leaders could refuse to set up and run health insurance exchanges, marketplaces where consumers shop for health insurance coverage. But if the states don’t do it, the federal government will do it for them. And many governors and insurance commissioners may balk at that.

States also determine how exchanges operate. They could, for example, allow all insurers in the market to offer their wares, just as Utah now does. Or they could be more selective, allowing only those that pass muster with the state or with an appointed group, as is currently done in Massachusetts.

Even Republican governors most critical of the law will likely want to set up their own insurance exchanges, said Michael Leavitt, who was secretary of Health and Human Services under President George W. Bush, and is now advising states on the matter. "My guess is that folks in Wyoming might not be enthusiastic about the federal government running an exchange in their state."

Overseeing Insurers The new law calls for states to work with the federal government to establish ways to review what are deemed "unreasonable" premium increases, but it is up to the states to decide what to do about such increases. Many states currently do not give regulators veto power over premiums, although they can exert pressure on insurers. A handful of states allow insurers to file their new rates with waiting for any review.

State lawmakers must decide whether to boost their state insurance commissioner’s authority to reject premium increases or leave current law in place. Praeger, the Kansas commissioner, expects there will be pressure from the public – and from the federal government – to increase such authority. But there will be pressure not to, as well.

"Republicans tend to be less regulatory minded, so it may be more difficult in those states to get that additional rate-approval authority," said Praeger, whose own office does not have prior approval authority over rates, but does have substantial review power.

Under the new law, insurers must spend at least 80 percent of their revenue on direct medical care or issue rebates to consumers. Regulations outlining what is considered medical care – and how to issue refunds – are awaiting final approval by the Department of Health and Human Services.

States can seek an exemption from the rules if they fear that meeting them could cause severe disruptions in the market for individual coverage. Maine, which is served by very few insurers, has already said it would seek an exemption and more states are expected to follow.

Skip federal funding? Another complication: Most states have already sought and accepted millions in federal grants to help increase scrutiny of premium increases, bolster consumer assistance offices and design health insurance exchanges. States that discontinue those programs would forfeit grant money in future years.

Story: Alcohol more dangerous than heroin, cocaine, study finds

Still, not all states sought funding. Minnesota and Alaska, for example, did not seek money to begin planning for state-based exchanges. Wyoming, Iowa, Georgia and Minnesota also did not seek funding to boost insurance premium review efforts.

More grants will be available in 2011, including funding for community health centers.

But elected officials may run into trouble with voters if their actions are seen as letting insurers off the hook for some of the law’s popular provisions, such as a bar on rejecting applicants with medical problems.

"If they are seen as a subsidiary of the insurance industry, that’s not good for them politically," says Jonathan Oberlander, professor of social medicine and health policy at the University of North Carolina-Chapel Hill.

Marilyn Werber Serafini contributed to this story.

© 2010 This information was reprinted with permission from KHN. KHN is an editorially independent news service and a program of the Kaiser Family Foundation, a nonpartisan health care policy organization that isn’t affiliated with Kaiser Permanente.

Fed takes bold, risky step to bolster economy

Commits to buy $600 billion in bonds to further lower borrowing costs                     

                              By JEANNINE AVERSA

The Associated Press

updated 11/3/2010 8:32:32 PM ET

WASHINGTON — The Federal Reserve will sink $600 billion into government bonds in a bold plan that it hopes will drive interest rates even lower than they already are and start the chain reaction that finally creates jobs and invigorates the economy.

The Fed said Wednesday that it would buy the bonds at a rate of about $75 billion a month through the middle of next year. The idea is to encourage people to spend more money and stimulate hiring, both ways of accelerating economic growth.
The announcement helped push stocks, which have been rising for weeks in anticipation of such a move, to their highest close of the year. But the program was immediately met with worries that it would not help enough and could backfire by causing inflation, creating asset bubbles and further weakening the dollar.
Story: The Fed’s big gamble: What could go wrong Even some analysts who were not concerned about such a backlash said the plan was unlikely to do much good.
"Bottom line: The plan provides a boost to the economy's growth, but it is not going to solve our problems," said Mark Zandi, chief economist at Moody's Analytics. "Even with the Fed's action, we're going to feel uncomfortable about the economy in the next six to 12 months."
The announcement came a day after voters frustrated by persistent unemployment and the limp housing market handed control of the House to Republicans and gave the GOP a bigger voice in the Senate.
The split will probably make it harder for President Barack Obama to enact any major economic initiatives and could put more pressure on the Fed to get the economy back on firmer footing.
The program is smaller than what Fed policymakers called their "shock and awe" approach to fighting the 2008 financial crisis. At that time, the Fed bought $1.7 trillion worth of securities.
This new program, including money that the Fed plans to reinvest from the portfolio of mortgages it has bought, should ultimately total $850 billion to $900 billion.
The Fed's balance sheet, a measure of all its total holdings and investments, has ballooned to $2.3 trillion, nearly triple what it was at the end of 2007, when the economy slid into recession.
In addition to the Fed's move, financial markets had anticipated the Republican takeover of the House for weeks and did not move much after the announcement. The Dow Jones industrial average finished up 26 points, about a quarter of a percentage point and good enough for a new high for the year.
Bond prices mostly rose. The huge demand from the Fed will make bonds more expensive and bring down the yields they pay out, which are connected to interest rates. The 30-year Treasury bond fell in price because the Fed is not expected to buy as many of those as other types of bonds.
In announcing its action, the Fed pointed out that the economic recovery remains slow. Companies are still reluctant to hire, housing activity is depressed, and Americans are increasing their spending only gradually.
Ten members of the Fed's Open Market Committee voted for the program. The lone dissenter was Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, who said the program was too risky. Among his fears: The Fed's plan will unleash inflation.
But Chairman Ben Bernanke said those worries are overblown.
"Concerns about this approach are overstated," Bernanke said in an opinion piece scheduled to be published Thursday in the Washington Post.
With the economy weak, the Fed is aiming to avoid the kind of economic stagnation that gripped Japan and led to a "lost decade" during the 1990s. Japan is still recovering from deflation, the self-reinforcing cycle of lower prices, during that time.
The Fed actually wants to raise inflation from its current level, which is extremely low. Besides warding off deflation, a little inflation can be good for the economy, encouraging people to spend their money rather than save it.
Fed acknowledged that progress toward this goal has been slow. Among the bond-buying plans risks is that it will essentially work too well and drive inflation to dangerous levels.
Another risk is that it will sap more strength from the dollar, which is already weak, aggravating trade disputes with other countries. Flooding the economy with hundreds of billions of dollars that the Fed can essentially print at will dilutes the value of the existing dollars.
Some investors argue that it may also create price bubbles. If hedge funds and other speculators can borrow money cheaply and make even bigger bets on stocks, commodities and other international markets, the prices of those assets could be driven too high.
Beyond that, there is simply no guarantee that lower interest rates will make people spend more money or hire in great numbers. The economic recovery has been weak even with rates lower than ever. The national average for a 30-year, fixed-rate mortgage, for example, was 4.23 percent last week, near its lowest point in decades.
Lou Crandall, chief economist at Wrightson ICAP, said the Fed's credibility is at stake. He worries that the Fed's program creates an appearance of buying government bonds and printing money to pay for bloated federal budget deficits.
"This runs the risk of hurting the Fed's reputation," Crandall said. "This may come back to haunt the Fed."
Zandi said he expects that even with the Fed's additional help, the unemployment rate by the end of 2011 will be exactly where it is now, 9.6 percent. Without the Fed's help, the rate would be 9.9 percent, he estimated.

In 2009, the Fed bought $1.7 trillion in mortgage and Treasury bonds. Those purchases helped lower long-term rates on home and corporate loans. The program was credited with helping to lift the country out of recession.
Zandi also estimates that the bond purchases will help the economy grow 0.3 percentage point faster in 2011, at a 2.7 percent rate. That's still not as fast as the 5 percent growth economists say it would take to significantly bring down unemployment.
The Fed has tried since the 2008 financial crisis to make credit more available to individuals and businesses. It's done so, in part, by keeping the target range for its bank lending rate near zero. But lending has remained frustratingly tight. And, unemployment has stayed persistently high.
"We could hardly be satisfied," Bernanke said.
Full text of Fed statement
Full text of the Fed's statement follows:
Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
Document: Expanded Fed statement (.pdf file)
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.
© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.