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Tuesday, November 16, 2010

Subsidy fight stalls child nutrition bill By CQ Staff

Groups representing local school boards and administrators are making an eleventh-hour push to block a Senate child nutrition bill, saying their concerns about unfunded mandates in the legislation have been lost in the drive for passage by the White House and hundreds of advocacy groups.
“I look at this bill as death by a thousand cuts,” said Lucy Gettman, federal programs director for the National School Boards Association.
Gettman’s organization, the American Association of School Administrators and the Council of the Great City Schools banded together to urge “passage of a simple extension of current programs.”
But Noelle Ellerson, assistant policy analysis director with the school administrators group, said that while some lawmakers have expressed interest, no one seems ready to champion the groups’ cause.
“We have support, but not to the point where they are out in front on this,” Ellerson said.
The Senate-passed bill (S 3307) appeared to be gaining momentum Monday after stalling in the House before the fall recess due to House Democrats’ concerns about using $2.2 billion from the food stamp program to help offset $4.5 billion in new spending over the next decade.
Key Democratic lawmakers are expected to issue a letter that will support clearing the Senate bill, a sign that the Obama administration has assured wavering members that it will restore the reduction in a temporary boost in food stamp benefits.
Although some advocacy groups sought a vote this week, action might not occur until after Thanksgiving.
Speaker Nancy Pelosi, D-Calif., posted online that an Agriculture Department report released Monday — it found that 14.7 percent of all U.S. households had trouble getting enough to eat in 2009 — underscored the need for expanding child nutrition programs for poor children.
Agriculture Secretary Tom Vilsack and Education Secretary Arne Duncan used a visit Monday to a public school in Washington as the backdrop for the administration’s call for action on the bill. Vilsack will continue to stress that theme Tuesday in an appearance at the Aspen Institute.
School administrator groups have praised much of the bill’s content but are worried about provisions they say could affect their bottom lines and infringe on local authority.
“We felt like it was time for the school districts to stand up and say, ‘Here’s the operational reality’ of the bill,” said Jeff Simering, legislative services director for the Council of the Great City Schools, which is an organization of big-city school districts.
The bill’s proposed six-cent increase in meal reimbursement rates is inadequate and could force school districts to subsidize free and reduced-price school meals, they said.
The reimbursement, available to districts that meet requirements for more vegetables, fruits and balanced meals, would not be authorized until fiscal 2013.
School groups are also concerned about a requirement that local districts put more non-federal money into their meal accounts. The provision aims to end the practice by many districts of using their federal meal subsidies to charge artificially low prices to students who can pay full price.
Ellerson said raising the meal prices should remain a local prerogative, especially if charging more drives students away from school lunches. The School Nutrition Association, which represents food service managers and their suppliers, has likewise expressed concern about the provision, but it decided to support the bill and seek changes later.
The National Governors Association also is wary of the pricing provision, as well as requirements for more state inspections of meal programs and a 2013 deadline for increasing the number of low-income children eligible for school meal programs. The group has not taken a position on the Senate bill.
Food managers and school administrators are divided on language to authorize an Agriculture Department review of the way school districts bill food service operations for utilities and other services. The indirect costs have been an irritant for school cafeteria managers, who have complained that many of the charges are unjustified.
The School Nutrition Association supports the provision.
-- Ellyn Ferguson, CQ Staff

Conservatives push permanent tax-cut extension over short-term compromise

By Michael O'Brien - 11/16/10 12:28 PM ET

Two top conservatives in Congress will introduce legislation to make expiring tax cuts permanent as other GOP leaders appear resigned to a compromise.

Sen. Jim DeMint (R-S.C.) and Rep. Mike Pence (R-Ind.) will unveil companion bills to make permanent the tax rates currently in place, which are set to spring upward at the end of the year, barring congressional action.

The legislation from the two conservatives, both of whom are seen as possible candidates for president in 2012, comes as top Republicans and members of the Obama administration are acknowledging that a compromise in which all tax rates are extended for a period of several years.

"I'm going to introduce legislation later today with Mike Pence from the House that would make the current rates permanent," DeMint said Tuesday on CBS's "Early Show." "If we do that, then businesses know what their taxes will be well out into the future. We can't keep this uncertainty going in Washington."

DeMint said he didn't know if he could support the short-term extension of tax cuts — maybe two, or three years — that has been discussed as a possible compromise.

"Two years is not enough to plan for the expansion of a plant, so I think the short-term view that politicians have really doesn't work in our economy," he said.

The details on the proposal could come at a press conference later this afternoon. But if DeMint, Pence, and other conservatives insist on a permanent compromise only, it could put them at odds with not only President Obama and Democrats, but some Republicans as well.

“I think it is quite likely you are going to see an agreement on tax policy for individuals," Treasury Secretary Tim Geithner said Tuesday at a Wall Street Journal forum. Geithner echoed what President Obama has said in recent days: that a compromise could be acceptable, but a permanent extension of the tax cuts across the board were a non-starter.

Other top Republicans acknowledged as much on Tuesday, when they said that the short-term extension was the most likely outcome in the lame-duck Congress.

"I understand it's not going to be permanent like we would like it. But get it done in the lame-duck. It's better for the entire economy," Rep. Paul Ryan (R-Wis.), the incoming chairman of the House Budget Committee, said this morning on MSNBC.

Rep. Michele Bachmann (R-Minn.), the leader of the House Tea Party Caucus, also threw her support to a short-term extension.

"If we can only get it extended for two years, I think that is great, but I don’t think that the American people should have to pay for that by having to have some new massive spending tied to it," she said on ABC's "Good Morning America."

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    House GOP leaders plan to bring freshmen into the fold


    By Michael O'Brien - 11/16/10 03:07 PM ET
    Republicans will elect two freshman House members to a position in the leadership, the top GOP leaders said Tuesday.

    Incoming Speaker John Boehner (R-Ohio), likely Majority Leader Eric Cantor (R-Va.) and presumptive Majority Whip Kevin McCarthy (R-Calif.) said that two newly-elected GOP lawmakers would join the leadership team, while another three would join the Republican Steering Committee, which helps determine chairmanships and committee assignment for members.

    “After several days of dialogue with our new colleagues and an assessment of the objectives the new majority will pursue in the next Congress on behalf of the American people, we have determined that the incoming House GOP freshman class should have two elected representatives at the leadership table and three representatives on the Republican Steering Committee in the 112th Congress," Boehner and Cantor said in a joint statement.

    "We are committed to taking the steps necessary to ensure that the Republican majority delivers on its pledge to rein in government, cut spending, and get people back to work," the pair added.

    The new positions are in some ways a bow to the new influence of the Republicans who were elected to Congress two weeks ago, many of them with ties to the Tea Party movement.

    Among the candidates for the new leadership positions might be some of the more high-profile freshmen, like Rep.-elect Kristi Noem (R-S.D.), Rep.-elect Tim Scott (R-S.C.) and Rep.-elect Sean Duffy (R-Wis.) have been mentioned as possible candidates for the new gigs.

    Statement from the Vice President on the New START Treaty

    The White House
    Office of the Press Secretary

    Failure to pass the New START Treaty this year would endanger our national security. Without ratification of this Treaty, we will have no Americans on the ground to inspect Russia’s nuclear activities, no verification regime to track Russia’s strategic nuclear arsenal, less cooperation between the two nations that account for 90 percent of the world’s nuclear weapons, and no verified nuclear reductions. The New START treaty is a fundamental part of our relationship with Russia, which has been critical to our ability to supply our troops in Afghanistan and to impose and enforce strong sanctions on the Iranian government.  

     President Obama has made an extraordinary commitment to ensure the modernization of our nuclear infrastructure, which had been neglected for several years before he took office. We have made clear our plans to invest $80 billion on modernization over the next decade, and, based on our consultations with Senator Kyl, we plan to request an additional $4.1 billion for modernization over the next five years.

    The new START Treaty enjoys broad, bipartisan support.  The Senate has held 18 hearings on the Treaty.  It was approved by the Foreign Relations Committee with bipartisan support.  It has been endorsed by prominent former officials from both parties, including former Secretaries of State George Shultz, James Baker, Henry Kissinger, Colin Powell, Madeleine Albright, and Warren Christopher, former Defense Secretaries James Schlesinger, William Cohen, William Perry, Frank Carlucci, and Harold Brown, and former National Security Advisors Brent Scowcroft, Stephen Hadley, and Sandy Berger.  It is consistent with previous Strategic Nuclear Arms Treaties, each of which passed with over 85 votes in the Senate.

    Given new START’s bipartisan support and enormous importance to our national security, the time to act is now and we will continue to seek its approval by the Senate before the end of the year.


    Biden pledges to work toward START approval by year's end

    By Jordan Fabian - 11/16/10 03:59 PM ET
    Vice President Joe Biden said Tuesday he is committed to getting the Senate to approve a key nuclear arms reduction treaty with Russia before the year's end despite a major GOP roadblock.
    Biden said the START treaty has broad bipartisan support and that failing to ratify it, an act that has been delayed for months, "would endanger our national security."
    "Given new START’s bipartisan support and enormous importance to our national security, the time to act is now and we will continue to seek its approval by the Senate before the end of the year," Biden said in a statement.
    The vice president's statement indicates Democrats will continue to press Republicans to back the agreement. The ratification of the treaty suffered a major setback Tuesday when Sen. Jon Kyl (R-Ariz.), a leading critic of START, said he informed Senate Majority Leader Harry Reid (D-Nev.) that it should not be brought up this year.
    The Obama administration has hoped for the Senate to approve the treaty, which the Foreign Relations Committee passed in October, during the lame-duck so that it could get to the president's desk before the end of the year.
    The ranking member of that panel, Sen. Richard Lugar (R-Ind.), backs its ratification, but he needs seven other Republicans to support it before the Senate can send it to President Obama.
    The new START treaty, signed by Russian President Dmitry Medvedev and Obama this spring, seeks to reduce missiles, warheads and launchers in the U.S. and Russia.
    But Kyl and other Republicans have said it does not do enough to ensure that U.S. nuclear facilities are modernized.
     Republicans, led by Kyl, have criticized the treaty based on fears that it endangers the U.S. by not taking strong enough steps to “modernize” the country’s existing arsenal of missiles.
    Biden said Obama has "made an extraordinary commitment to ensure the modernization of our nuclear infrastructure," which includes $80 billion in funding over the next 10 years.
    "Without ratification of this treaty, we will have no Americans on the ground to inspect Russia’s nuclear activities, no verification regime to track Russia’s strategic nuclear arsenal, less cooperation between the two nations that account for 90 percent of the world’s nuclear weapons, and no verified nuclear reductions," Biden said. "The New START treaty is a fundamental part of our relationship with Russia, which has been critical to our ability to supply our troops in Afghanistan and to impose and enforce strong sanctions on the Iranian government."

    President Obama Presents the Medal of Honor to Staff Sergeant Salvatore Giunta: "We’re All in Your Debt"

    The White House Blog



    Read the Transcript  |  Download Video: mp4 (226MB) | mp3 (22MB)
    This afternoon in the East Room of the White House, the President presented the Medal of Honor for conspicuous gallantry to Staff Sergeant Salvatore Giunta, U.S. Army -- the first living servicemember from the Iraq or Afghanistan wars to receive it.  "Now, I’m going to go off-script here for a second and just say I really like this guy," said the President to laughter and applause.  "I think anybody -- we all just get a sense of people and who they are, and when you meet Sal and you meet his family, you are just absolutely convinced that this is what America is all about."
    President Barack Obama Presents the Medal of Honor to Staff Sergeant Salvatore Giunta President Barack Obama presents the Medal of Honor to Staff Sergeant Salvatore Giunta in the East Room of the White House, November 16, 2010. (Official White House Photo by Chuck Kennedy)
    As the President always does, he recounted the story of the events that earned  this honor, and as always it needs no editorial embellishment:
    During the first of his two tours of duty in Afghanistan, Staff Sergeant Giunta was forced early on to come to terms with the loss of comrades and friends.  His team leader at the time gave him a piece of advice:  “You just try -- you just got to try to do everything you can when it’s your time to do it.”  You’ve just got to try to do everything you can when it’s your time to do it.
    Salvatore Giunta’s time came on October 25, 2007.  He was a Specialist then, just 22 years old.

    Sal and his platoon were several days into a mission in the Korengal Valley -- the most dangerous valley in northeast Afghanistan.  The moon was full.  The light it cast was enough to travel by without using their night-vision goggles.  With heavy gear on their backs, and air support overhead, they made their way single file down a rocky ridge crest, along terrain so steep that sliding was sometimes easier than walking.

    They hadn’t traveled a quarter mile before the silence was shattered.  It was an ambush, so close that the cracks of the guns and the whizz of the bullets were simultaneous.  Tracer fire hammered the ridge at hundreds of rounds per minute -- “more,” Sal said later, “than the stars in the sky.”
      
    The Apache gunships above saw it all, but couldn’t engage with the enemy so close to our soldiers.  The next platoon heard the shooting, but were too far away to join the fight in time.

    And the two lead men were hit by enemy fire and knocked down instantly.  When the third was struck in the helmet and fell to the ground, Sal charged headlong into the wall of bullets to pull him to safety behind what little cover there was.  As he did, Sal was hit twice -- one round slamming into his body armor, the other shattering a weapon slung across his back.

    They were pinned down, and two wounded Americans still lay up ahead.  So Sal and his comrades regrouped and counterattacked.  They threw grenades, using the explosions as cover to run forward, shooting at the muzzle flashes still erupting from the trees.  Then they did it again.  And again.  Throwing grenades, charging ahead.  Finally, they reached one of their men.  He’d been shot twice in the leg, but he had kept returning fire until his gun jammed.

    As another soldier tended to his wounds, Sal sprinted ahead, at every step meeting relentless enemy fire with his own.  He crested a hill alone, with no cover but the dust kicked up by the storm of bullets still biting into the ground.  There, he saw a chilling sight:  the silhouettes of two insurgents carrying the other wounded American away -- who happened to be one of Sal’s best friends.  Sal never broke stride.  He leapt forward.  He took aim.  He killed one of the insurgents and wounded the other, who ran off.

    Sal found his friend alive, but badly wounded.  Sal had saved him from the enemy -- now he had to try to save his life.  Even as bullets impacted all around him, Sal grabbed his friend by the vest and dragged him to cover.  For nearly half an hour, Sal worked to stop the bleeding and help his friend breathe until the MEDEVAC arrived to lift the wounded from the ridge.  American gunships worked to clear the enemy from the hills.  And with the battle over, First Platoon picked up their gear and resumed their march through the valley.  They continued their mission.

    It had been as intense and violent a firefight as any soldier will experience.  By the time it was finished, every member of First Platoon had shrapnel or a bullet hole in their gear.  Five were wounded.  And two gave their lives:  Sal’s friend, Sergeant Joshua C. Brennan, and the platoon medic, Specialist Hugo V. Mendoza.
    Now, the parents of Joshua and Hugo are here today.  And I know that there are no words that, even three years later, can ease the ache in your hearts or repay the debt that America owes to you.  But on behalf of a grateful nation, let me express profound thanks to your sons’ service and their sacrifice.  And could the parents of Joshua and Hugo please stand briefly?  (Applause.)

    Now, I already mentioned I like this guy, Sal.  And as I found out myself when I first spoke with him on the phone and when we met in the Oval Office today, he is a low-key guy, a humble guy, and he doesn’t seek the limelight.  And he’ll tell you that he didn’t do anything special; that he was just doing his job; that any of his brothers in the unit would do the same thing.  In fact, he just lived up to what his team leader instructed him to do years before:  “You do everything you can.”

    Staff Sergeant Giunta, repeatedly and without hesitation, you charged forward through extreme enemy fire, embodying the warrior ethos that says, “I will never leave a fallen comrade.”  Your actions disrupted a devastating ambush before it could claim more lives.  Your courage prevented the capture of an American soldier and brought that soldier back to his family.  You may believe that you don’t deserve this honor, but it was your fellow soldiers who recommended you for it.  In fact, your commander specifically said in his recommendation that you lived up to the standards of the most decorated American soldier of World War II, Audie Murphy, who famously repelled an overwhelming enemy attack by himself for one simple reason:  “They were killing my friends.”

    That’s why Salvatore Giunta risked his life for his fellow soldiers -- because they would risk their lives for him.  That’s what fueled his bravery -- not just the urgent impulse to have their backs, but the absolute confidence that they had his.  One of them, Sal has said -- of these young men that he was with, he said, “They are just as much of me as I am.”  They are just as much of me as I am.
    So I would ask Sal’s team, all of Battle Company who were with him that day, to please stand and be recognized as well.  (Applause.)  Gentlemen, thank you for your service.  We’re all in your debt.  And I’m proud to be your Commander-in-Chief.
    Applause for Members of Army Staff Sgt. Salvatore Giunta's Unit President Barack Obama, former Medal of Honor winners, and other people in the audience recognize members of Army Staff Sgt. Salvatore Giunta's unit during the ceremony in the East Room of the White House, November 16, 2010. (Official White House Photo by Pete Souza)
    Staff Sergeant Salvatore Giunta is Recognized by the Audience after Receiving the Medal of Honor Staff Sergeant Salvatore Giunta is recognized by the people in the audience after receiving the Medal of Honor from President Barack Obama during a ceremony in the East Room of the White House, November 16, 2010. (Official White House Photo by Lawrence Jackson)  

    Republican says he'll join Black Caucus

    By Mike Lillis and Shane D'Aprile - 11/16/10 06:50 PM ET

    Rep.-elect Allen West (Fla.), the black Republican vying for a spot on the Congressional Black Caucus (CBC), said this week that he’ll soon be joining the group.
    “There are two criteria to be a member of the Congressional Black Caucus — you must be black and you must be a member of Congress, and when I woke up this morning, I think I met both of those criteria,” West told The Hill on Tuesday. “So I will be joining.” 

    West, who was backed by the Tea Party in his successful bid to unseat Democratic Rep. Ron Klein (Fla.) in the midterms, is opposed to many of the measures championed by the CBC, including the new healthcare law and climate change legislation.
    Last month, CBC Chairwoman Barbara Lee (D-Calif.) seemed to imply that West might not be allowed to join based on his policy positions.
    “Our agenda is about lifting people out of poverty, providing middle-class tax cuts, supporting climate-change legislation,” she told The Economist. “Do [incoming black Republicans] embrace this agenda?”
    Last week, the CBC walked back Lee’s statement, announcing that Republicans wishing to join the group “will be welcomed.”
    Two black Republicans were elected to the House in the midterms election: West and Rep.-elect Tim Scott (S.C.). They’re the first black Republicans to win seats in the chamber since Rep. J.C. Watts (R-Okla.) retired in 2003.
    West said he’s scheduled “to have a chat” with Lee this week.
    “There’s a planning meeting tomorrow that I’ll try to go in,” West said.
    The CBC is a traditionally Democratic group, with just two House Republicans claiming membership in its 40-year history. The last — Rep. Gary Franks (Conn.) — retired in 1997.
    West has said he wants to join in order to bring some ideological diversity to the group.
    “Right now the Congressional Black Caucus has kind of got a broken wing,” he said. “You heard what just happened with Charlie Rangel [D-N.Y.], and I think Congressman [James] Clyburn [D-S.C.] has kind of been pushed aside with this made-up [House leadership] position.
    “So it’s time to have some differing voices and perspectives in the CBC,” West said.
    The CBC did not immediately respond to questions about the meeting West referenced.

    Republicans and the Fed

    — By Kevin Drum

    | Tue Nov. 16, 2010 9:30 AM PST
    Felix Salmon ponders the political brawl surrounding the Fed's quantitative easing program:
    For reasons I don’t fully understand, the debate over QE2 has divided along party-political lines, with the Republicans lining up against it and the Democrats attacking them....Interestingly, this is one of those old-fashioned technocrat vs technocrat policy debates, in contrast to the technocrat vs populist debates which seem to have taken over far too much airtime of late. But it’s just as shrill.
    ....Bernanke, then, has every reason to want to reduce the volume on this debate: the mere existence of the debate itself can easily counteract any good which comes from QE2. One way of doing that would be to admit that QE2 is an untried experiment: while QE1 worked as a weapon in the crisis-fighting arsenal, QE2 is being asked to do something quite different. So the Fed should define much more clearly than it has done until now what exactly QE2 is designed to achieve, and what criteria might be used to determine whether it is succeeding or failing. And if it’s showing signs of failing, then the Fed should also be explicit about how and when it might be unwound.
    I'm not a monetary economist, and the technical arguments about the mechanics of QE2 and what it will accomplish are impossible for me to evaluate properly. However, one thing does seem to be fairly clear: despite the scary sounding $600 billion number, the actual impact of QE2 is almost certain to be fairly small. With interest rates already so low, there's simply not enough money involved to move markets substantially.
    In other words, regardless of whether you think QE2 is good policy, it's next to impossible to understand the increasingly hysterical Republican reaction to it. Unless, of course, you consider the context: Republicans aren't just mounting a campaign against the Fed. They're equally dedicated to championing a damaging economic argument about regulatory uncertainty that doesn't withstand a moment's scrutiny; they've already rejected several compromise opportunities to extend the Bush tax cuts unless a permanent extension of the high-end cuts was included; and they're apparently planning to play a high-stakes game of chicken over raising the debt ceiling in a few months.
    None of these things bespeaks a genuine concern with the economy. Instead, they suggest a party that's simply jockeying for political advantage and figures that maximum chaos is in its best interest. It also explains why QE2 has divided along party-political lines: it hasn't. Only Republicans are wholeheartedly on one side. Democratic reaction has been both varied and fairly subdued.
    QE2 is vanishingly unlikely to either succeed or fail strongly enough for either side to make a bulletproof argument about whether it worked, and in any case benchmarks aren't really what Republicans are after. They just want the economic argument to be focused solely on taxes, taxes, and taxes. The more noise the Drudge/Rush/Fox axis can generate over everything else — in other words, the more they can argue that nothing else works — the better their tax argument looks.

    Scientists Name New Syndrome: Limbaughtosis

    — By Julia Whitty

    | Wed Apr. 1, 2009 4:31 PM PDT
    rush-limbaugh.jpg
    It's like halitosis, only it's bad breadth not breath. In other words, a case of severely overweighted self worth notable for its rush onset, sweatiness, febrile humor, heavy breathing, spitting, and verbosity. There's no known trigger though some speculate on electromagnetic waves. There's also no known treatment. Time-release drug formulas seem to exacerbate the symptoms.

    Patient X, who does not wish to be identified, says his affliction with Limbaugh Syndrome is a living hell. He describes obsessive demons of righteousness and a compulsion to fight for individual rights—except those that fail to appease his obsessive demons of righteousness. The conflict exhausts him.

    He can't sleep. There's insomnia over phantom governments. There are nightmares of unchanging ideals. He is forever tripping over his own unapologetic rules. Faith blindsides him.

    It's also intensely emotionally lonely, says Patient X. He feels like a lone voice in an answerless universe. He expects a God-given natural right to be free yet imagines himself irretrievably trapped inside a small soundproof room amid billowing clouds of smoke.

    Patient X secretly hopes for help from stem cell therapy. But he doesn't want to rush for a cure either. He can't envision life without his disease.

    Limbaugh's Suggestive Obama-Graffiti Graphic

    | Tue Nov. 16, 2010 2:04 PM PST
    Via Andrew Sullivan's Daily Dish, and offered without further comment:



    "The image above appears on Rush Limbaugh's Web site. Is any American more adept at exploiting racial dog whistles? It's always egregious enough to be calculatingly offensive, but never quite an open and shut case, because most of all the talk radio host revels in being called a racist so that he can throw up his hands and complain about liberal race-baiting. The accompanying text (emphasis added):
    This guy is an utter wrecking ball all by himself on the world stage to the point now of getting embarrassing.  This presidency of Obama's, it doesn't take much to irritate the left.  Try this:  "Barack Obama's presidency is graffiti on the walls of American history."  That's what his administration is.  No more than graffiti on the walls of American history.  We have a juvenile delinquent for a president who has ruined so much public and private property, not even his gang is making much of an effort here to protect him.  It's an utter disaster.
    This is self-concious and all the more disgusting for that reason."

    Will Obama use the power of the Presidency

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    Mayor, New York Delegation Push For 9/11 Health Care Bill

    Original post:
    Mayor, New York Delegation Push For 9/11 Health Care Bill

    Mayor Michael Bloomberg headed to Washington Tuesday in an effort to persuade Republican senators to support the health care compensation bill for first responders to the September 11th terrorist attacks.
    The mayor joined Senators Charles Schumer and Kirsten Gillibrand, along with several congressmen, labor leaders and activists, to ask the U.S. Senate to pass the James Zadroga 9/11 Health and Compensation Act.
    "New York, and every other state in this nation, is counting on the U.S. Senate to do the right thing and do it right now," said Bloomberg. "Two months ago, we observed the ninth anniversary of 9/11 and before you know it, the 10th anniversary will be upon us. We cannot wait any longer for action on this legislation."
    "Nine years ago, no one would have believed that our country could leave these heroes behind," said the state's junior senator. "This should not be a partisan debate."
    The measure is named for James Zadroga, a city police detective who died from a respiratory illness his family says he contracted at the World Trade Center site.
    It has already passed in the House of Representatives and needs to pass in the Senate's lame-duck session. Otherwise, the process would have to start from scratch in the new Congress.
    "These politicians know that there are people out there taking their last breath. They're on oxygen taking their last breath, hoping to get compensation for their family," said Joseph Zadroga, James’ father.
    "At the Concert for New York, my cousin, Mike Moran, who is a firefighter at 3 Engine down on 13th Street, told Osama Bin Laden that he can kiss his royal Irish . . .," said Congressman Joseph Crowley. "I'm not going to say that any senator who doesn't vote for this bill can kiss anything, but I will be thinking it."
    Earlier in the day, Bloomberg met with Illinois Senator-elect Mark Kirk, Massachusetts Senator Scott Brown and Maine Senator Susan Collins – all moderate Republicans who could give the bill enough support to pass.
    Democrats need one senator to cross the aisle to break a possible Republican filibuster.
    Some Republicans have expressed concerns about the cost of the Zadroga bill.
    It would provide more than $7 billion in aid to rescue workers and first responders sickened by exposure to toxic dust after the towers fell.
    According to lawmakers, $3.2 billion would be spent over the next eight years to monitor and treat injuries. Ten percent would be paid by the city.
    Also set aside is $4.2 billion to reopen the September 11th Victim Compensation Fund for compensation for job and economic losses.
    First responders also have until November 18 to sign on to the city's multimillion-dollar settlement offer. For it to take effect, 95 percent of workers need to accept the settlement.
    Meantime, a funeral was held Tuesday for an NYPD officer who police say died from a rare form of cancer after working at the World Trade Center site.
    David Mahmoud, 49, was laid to rest in Patchogue with many of his fellow officers in attendance.
    After the service, the Patrolmen’s Benevolent Association reiterated the New York delegation's call on Congress to act and provide health care for first responders.
    "We lost 23 on that day and we've lost more police officers since September 11th. Dialogue, discussion and debate is over. Stand up like men and women and vote 'aye' and take care of those that took care of you," said PBA President Patrick Lynch.
    Mahmoud leaves behind his wife and three daughters.

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    Survival guide for the Class of 2010


    Survival guide for the Class of 2010

    The author says he played music a few times a year, but otherwise spent his time working. | AP Photo
    By: Joe Scarborough
    November 16, 2010 04:39 AM EST
    Sixteen years ago this week, I packed a rental truck and moved to Washington to start an incredible chapter in my life as the congressman from Florida’s 1st District. It is still hard to believe that I was lucky enough to begin that job as a 30-year-old who had never even set foot in a congressional office before I was sworn in. Looking back, I am still proud of what we accomplished. We defied expectations by balancing the budget, reforming welfare, paying down the national debt, cutting taxes and creating an environment that helped produce millions of jobs.

    But borrowing from a certain House speaker’s book title, I also learned a few too many lessons the hard way. Today, with so many freshmen arriving in Washington under circumstances almost identical to those of 1994, I want to tell them what I wish someone had told me so long ago. So here it is:

    1. PROTECT YOUR FAMILY

    First things first: Guard your family. Congress is tough on all families, and yours will be no exception. Move your family to Washington now. Ignore conventional wisdom that says your spouse and children should be chained to your home district for political gain. It’s not worth it. Few good things come from being away from your spouse and children 200 nights a year, and, in the end, nothing you accomplish in Congress will be worth the moments you miss at home. Over time, the strains on a marriage can be bad. The sacrifices imposed on the entire family can be incalculable.

    2. FOCUS ON YOUR LOCAL OFFICE

    After moving to Washington, start building a great local office. I went to Congress to wage an ideological war against Big Government. But I quickly learned I would be given space to fight those battles only if I first focused on helping constituents with their problems. Because Nan Weaver and my local staff obsessed over how best to serve constituents, voters gave me more latitude to wage budget wars against President Bill Clinton and GOP appropriators.

    A decade after I left office, no one remembers a vote I cast, but I am still touched by the number of people who say my staff helped them through difficult times.

    3. EXPERIENCE COUNTS — ESPECIALLY FOR ROOKIES

    Hire a chief of staff who knows Washington. Like me, many of you will arrive in Congress wanting to do battle with Washington although you have no political experience. That’s a treacherous path, so hire a local guide to walk you through the mine fields that blow up too many freshmen. My staffers — long-suffering souls such as Bart Roper and David Stafford — would endure my frenetic bursts of energy and quietly pull me aside later to explain why my great ideas were actually not so good.

    4. KEEP THE “YES-MEN” IN CORNCOB, TEXAS

    Surround yourself with staff members who know how to use the word “No!” Nothing — and I mean nothing — is more dangerous to a new member than bringing a group of “yes men” from the district. What you need is a group of tough insiders whose existence doesn’t revolve around pleasing the bright, shiny new lawmaker from Corncob, Texas. Your best-case scenario would be if they were bored by your very existence and you felt honored to be in their presence. Four terms in Congress taught me the most important thing a staff member can tell you is “No!”

    5. ALL THE WORLD’S A STAGE

    House Minority Leader John Boehner is right. You need to be humble. And you can start by having a better understanding of your role in Washington than hotheads like me had in 1994.

    Fight for small government if that’s what you promised to do. But understand that the cuts you pass in the House will be watered down in the Senate and then killed by the White House. If you believe your job is to keep fighting for less government, charge ahead. But understand that your mandate is yours alone. There are 534 other actors in this play, with 534 separate mandates. Don’t demonize them for doing their job.

    6. CONSERVE YOUR WORDS

    This sounds like strange advice coming from me. Having said that, I have learned from my mistakes. Never give a speech when you are angry. When your blood begins to boil, shut your mouth unless you have a prepared text in front of you. If you don’t have a speech that will help you stay measured, use gum, tobacco or duct tape to keep your mouth occupied.

    7. DON’T PLAY DICE WITH TAXPAYERS’ MONEY

    Hire the toughest person you can find to handle your congressional and campaign budgets. Because I found a wonderful staffer named Mary Reed, I could go to sleep each night knowing that there would never be an article in Roll Call or The Hill calling into question how I spent taxpayers’ money. It’s worse now because you have those beasts at POLITICO following your every move. In my office, when Mary told me “no,” I bowed. That deference ended up saving me more times than I can count.

    8. DON’T SELL YOUR VOTE TO ANYONE

    Everyone is going to want to buy your vote. Lobbyists may try with campaign checks and box seats. Party leaders might warn of lost committee assignments or primary challenges. But for your political health, stay true to your convictions by voting your conscience. I can’t count the number of times I saw a young member quake when party leaders moved in and demanded a vote. Most eventually caved, but I can tell you that good things come to those who don’t. Stand your ground. You won’t be sorry.

    9. WORK HARDER THAN EVERYONE ELSE

    There is just no way around it. You are going to make some really stupid mistakes in Washington. But always remember that hard work erases a multitude of sins.

    My schedule on the Hill was brutal by others’ standards. I got to the office at 7 a.m. and usually quit working at 10 p.m. I never went out and knew nothing about Washington’s social scene until I moved back to the nation’s capital in 2004. Other than playing music a few times a year, my years in Congress were consumed by work.

    When I went back to my district every weekend, my goal was to hold six town hall meetings before flying back Monday. That schedule might have been exhausting to others, but, by the end of my first term, I was a 32-year-old who knew Florida’s 1st District better than politicians who had served the area longer than I had been alive. No one would come close to mounting a real challenge again.

    10. KEEP CALM AND CARRY ON

    I wish I had worn this as a sign around my neck in Congress as a reminder to keep everything in perspective.

    Be civil, respect others and disagree without questioning people’s motives. Today’s enemy will be tomorrow’s ally, and this year’s ranking member will be next year’s chairman. Just do unto others as you would have them do unto you, and everything else will take care of itself.

    One more thing: Have fun. You just got hired to do the greatest job in the world.

    A guest columnist for POLITICO, Joe Scarborough hosts “Morning Joe” on MSNBC and represented Florida’s 1st Congressional District in the House of Representatives from 1995 to 2001.
    © 2010 Capitol News Company, LLC

    Wealth Effect Rumors Have Been Greatly Exaggerated

    By Barry Ritholtz - November 16th, 2010, 7:30AM
    “When will these guys ever learn that maybe, just maybe, these Fed policies aimed at targeting asset prices at levels above their intrinsic values is probably not in the best interests of the nation?”
    -Dave Rosenberg, chief economist and strategist at Gluskin, Sheff
    >
    It is taken for granted that a rising stock market stimulates the animal spirits, sending consumers off shopping.
    The basic premise of the wealth effect is well known: As the value of stock portfolios rise during bull markets, investors enjoy a feeling of euphoria. This psychological state makes them feel more comfortable  — about their wealth, about debt, and most of all, about spending and indulgences. The net result, goes the argument, is that consumers spend more, stimulate the economy, thus leading to more jobs and tax revenues. A virtuous cycle is created.
    The rule of thumb has been that for every one dollar increase in a household’s net equity wealth, spending increased 2-4 cents. For residential RE, the increase is even greater: Consumer spending increases 9-15 cents (depending upon the study you use) for every dollar of capital gain.
    The problem is, the theory is its mostly nonsense.
    I make this statement for two reasons: 1) the distribution of equities in the United States; and b) the classic causation/correlation issue.
    Let’s start with equity ownership. The vast majority of Americans have a rather modest sum of cash tied up in equities. 401ks, IRAs, investment accounts — these are primarily the province of the well off. Ownership of equities is heavily concentrated in the hands of the wealthiest Americans. Start with the top 1%: They own about 38% of the stocks (by value) in the US. The next 19% owns almost 53%. That leaves the remaining 80% of American families with less than 10% stake in the stock market (See Federal Reserve’s Z.1 Flow of Funds report for the most recent info).
    How is THAT going to cause a wealth effect? Especially when you consider the median family’s stock portfolio is worth well under $50k. These are the millions of families who are the principle consumers of cars, food, clothing, electronics, energy, health care, etc. To them, a rising stock market is nearly meaningless.
    The biggest investment for the typical American household remains their home, with a median value of ~$200k. Put 20% down, and you see a 10 to 1 leverage. The impact of Real Estate on any wealth effect is much greater than the stock market. Unfortunately, homes remain somewhat overvalued — 10-15% by our measures — and are in a downtrend. They are not contributing to improvements in consumer spending in any meaningful way.
    Our second factor is quite simple: The causation/correlation problem. In the 1990s, the Fed under Alan Greenspan focused in the past wealth effect of stock market gains. But I suggest they would have been better off looking at the myriad factors impacting consumer’s psyches: Plentiful jobs, wage increases, economic expansion, labor mobility, modest inflation, and bountiful credit availability. These are sufficient to explain the behavior of consumers. Its not a secular bull market in stocks that causes the consumer spending — its all the other contemporaneous elements that are the prime drivers.
    ~~~
    Regardless of your views of QE2 — if the Fed is doing it create a wealth effect, they are wasting their time and money.


    >
    See also:
    Housing Wealth and
    Consumer Spending
    January 2007
    http://www.cbo.gov/ftpdocs/77xx/doc7719/01-05-Housing.pdf
    Wealth, Income, and Power
    G. William Domhoff
    September 2005 (updated September 2010)
    http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
    Housing Wealth Effects: Housing’s Impact on Wealth Accumulation,
    Wealth Distribution and Consumer Spending
    Eric Belsky and Joel Prakken
    December 2004
    www.jchs.harvard.edu/publications/finance/w04-13.pdf
    Consumption and the Wealth Effect: The United States and the United Kingdom
    Remarks by Governor Edward M. Gramlich
    Before the International Bond Congress, London, U.K.
    February 20, 2002
    http://www.federalreserve.gov/boarddocs/speeches/2002/20020220/default.htm

    Ambac, CDS and Geithner: It's AIG All Over Again


    Chris Whalen



    November 16, 2010



    It's deja vu all over again

    Yogi Berra

    REO is already owned by the banks. They need to decide whether to take their loss know by selling or speculate on higher prices and carry it and argue with the regulators about it. On foreclosures, need to speed up, not slow down the process. Resolution requires that the winners and losers be identified, prices set and markets allowed to clear no matter what it takes. Politicians in particular seem to think that they can somehow prevent "losses", or at least make sure the losers are savers. That includes banks in their minds. Nice thing about dot com is that the assets were easily moved and winners and losers quickly declared. But we can't move the houses, they just hang around and make it difficult to resolve the demand/supply imbalance. Real estate is not a big national clearing market. It is a bunch of little geographic markets being meddled with by politicians and banks that don't want to acknowledge losses.

    William Dunkelberg
    Chairman, Liberty Bell Bank
    November 15, 2010


    This week in The Institutional Risk Analyst, we return to the financial travails of Ambac Financial Group ("AFG"), which recently filed bankruptcy after several years of twisting in the wind due to questions about solvency related to RMBS exposures. AFG, as it turns out, is the latest project of Treasury Secretary Tim Geithner, who wants to again protect the largest bank dealers and the market in over-the-counter derivatives from legal discipline. But before we wade into that swamp full of terrapins, first let's take a look at the Q3 2010 preliminary ratings for all U.S. banks from the professional version of The IRA Bank Monitor.


    As of Friday we had 7,093 FDIC insured banks reporting logged in our system -- the FDIC cross checks 7,094 as of today -- and an aggregate bank stress index (BSI) score of 5.73 vs. the preliminary snapshot last quarter of 5.37. The largest bank in the group is the $143 billion asset Citibank (South Dakota), the credit card unit of Citigroup ("C"/Q2 2010 Stress Rating: "C") with an "F" rating and a BSI score of 25. That score is actually an improvement.Next is the bank unit of Ally, Ally Bank, with an "A+" rating and BSI score of 0.9 or less stress than the benchmark year of 1995.


    The BSI index is a quarterly survey of stress in the entire banking industry.The rating is specifically designed for consumers with exposure above the insured limit as well as vendors facing credit and operational risks from bank failures. The BSI is a harsh measure originally designed to provide early warning indicators to bank management and focuses on the best banks -- those with stress at or below the 1995 benchmark year and with ratings between "A+" and "B" -- and rates those outside this group as essentially being unsatisfactory. The several thousand U.S. banks which have maintained "A" or better BSI ratings through the past three years are really outstanding performers.


    The preliminary BSI score excludes the largest banks, which typically hold back their call reports until the last day of the reporting period, and all of the Thrifts that report separately to OTS and are later aggregated by FDIC for the RIS master file. The slight increase in preliminary stress among smaller banks may be the cause of continued volatility in the different ratings strata, with the number of "A+" institutions down almost 8% from last quarter and also a significant increase in the number of "F" rated institutions, which are banks with stress scores significantly higher than the benchmark year (1995=1).


    IRA Preliminary Bank Stress Grade Distributions
    PeriodA+ABCDF
    PRELIMINARYNumber of FDIC Units Represented =7,093
    Filings Observations Count =8,125
    including updates by banks during filing window.
    Average BSI
    5.74
    3,2871,564691723781,647
    Prior Quarter Ending 1006
    sample count = 8,270
    includes Thrifts which are not part of the CDR filing system
    Average BSI
    2.42
    3,5511,575480463771,632
    Notes:
    1. Source for preliminary data is FDIC Central Data Repository 'CDR'.
    2. Source for prior period data is FDIC RIS master file.
    3. Preliminary data is incomplete. Certain bank reports are unavailable until the final publication of the FDIC master file.

    Click on the IRA Industry Fact Sheets Page �to see the ratings matrices by bank units and dollar amount of assets for the past eight quarters.
    What these results suggest to us is that there is a great deal going on beneath the surface of the U.S. banking industry and, accordingly, that it is too early to declare the "all clear" from the crisis. Scores for ROE and Defaults are improving, but Efficiency is under pressure. While industry stress levels are still clearly better than the Q4 2009 peak BSI level of 24, we remain concerned by the migration of some of the larger institutions into lower ratings bands and the continued volatility of ratings for all banks. Notice in the Industry Fact Sheets the increase in the number of bank units in the "B" and "C" categories in Q3 2010 after the improvement of the past two quarters.
    It is normal for the final BSI score to be significantly lower than the preliminary snapshot and for several reasons. Chief among them is that the larger banks are excluded until the final days of the reporting period. These institutions have been tending to make the industry look better thanks to subsidies from the Fed and the GSEs. But whereas during 2007-2009 the money centers were tending to bias the population down in terms of stress scores due to TARP and the subsidy flows to the big banks from the Fed and GSEs, now the big banks are moving back to their traditional position as risk outliers in the industry.
    Speaking of outliers, it is no secret that we view the situation involving Bank of America ("BAC"/Q2 2010 Stress Rating: "C") and the corporation formerly known as Countrywide Financial as being problematic -- a legacy of the evil duet of Hank Paulson and Timothy Geithner at the U.S. Treasury. Some of you may have noticed that BAC just sold its securitization trust business to US Bancorp (USB/Q2 2010 Stress Rating: "A") and that no price was disclosed. Maybe there was no price. Want to buy an insurance company?
    Last week in The IRA Advisory Service, of note, we examined the possible scenarios for resolving the BAC situation. Suffice to say that while the possibility of a bankruptcy for the non-BHC affiliate of BAC known as Countrywide Financial is still unthinkable, it is no longer seen as impossible by the lawyers we contacted. If the credit environment continues to fester into 2011, says one former senior regulatory counsel, strategy of BAC management saying "foxtrot oscar" to the Treasury on the way to the Bankruptcy Court may have a certain utility.
    And speaking of brazen maneuvers, make sure you read Gretchen Morgenson's column on the unfolding AFG bankruptcy in The New York Times this past Sunday. "At Ambac, Haves and Have-Nots," tells the story of yet another stunning accomplishment for Secretary Timothy Geithner. It seems that the holders of credit default swaps (CDS) and municipal obligations of the underwriter subsidiary of AFGc are being given preference by the State of Wisconsin Insurance Commissioner over the holders of guarantees on RMBS.

    Wisconsin insurance boss Sean Dilweg is clearly toeing the "team player" line set down by Geithner in their collapse of American International Group (AIG), namely always pay the banks and screw the bond holders and the taxpayer. In this case the taxpayers are the good people of Wisconsin. Will AFG's insurance business really survive under this allegedly "optimal" rehabilitation plan proposed by Mr. Dilweg? It looks to us like he and Geithner are cherry picking the remains of AFG's assets to pay the bank CDS counterparties and leave the sinking ship for the WI state insurance fund to clean up a couple of years hence.
    Indeed, it appears that Geithner is once again raiding the public trust on behalf of the banksters, in this case the Wisconsin State insurance fund, to pay out CDS contracts to Citigroup and a whole slew of large foreign banks while holders of RMBS are being "segregated." We recall that at first the Irish government made payments to the German, French and UK banks who owned Irish bank debt, but now the whole country is insolvent. Now let's think: What deal was reached at the G-20 two years ago?
    You see, while AFG is in bankruptcy, the State of Wisconsin is dealing with the restructuring of the insurance underwriter, Ambac Assurance Corp. ("AAC"), in a separate proceeding being held this week in Dane County Circuit Court. The insurance underwriters and their Sell Side accomplices want to avoid a default on the CDS issued by AFG at all costs, thus the CDS contracts issued by AFG were settled at a cost of roughly one-third of the funds available to pay all AAC policy holders. This preference for the large banks is forcing Mr. Dilweg and the State of Wisconsin to effectively default on guarantees made by AAC on RMBS, which were costing the carrier $300 million per month in claims.
    It its legal filing, the State of Wisconsin refers to taking advice "from certain economic leaders" in making its decision to effectively subsidize some of the largest banks in the world and their customers, including Hertz and Dunkin Doughnuts, to the detriment of the RMBS holders. That's our boy Tim. We hear that at the direct instructions of Secretary Geithner, Dilweg is using the surplus funds of the WI underwriter, AAC, to unwind the CDS contracts written by the bankrupt AFG -- instead of using the state's power to abrogate all of the financial guarantees and focus all of the remaining liquidity on supporting the core municipal insurance business.
    "The money went out the door even though swaps aren't typically given the same kind of seniority in a bankruptcy as traditional insurance. In a bankruptcy filing, the holders of such swaps are generally considered unsecured creditors and have to be paid after holders of old-fashioned insurance," Morgenson reports. But the key thing to understand is that the CDS contracts written by AFG apparently were guaranteed by the WI-based insurance unit AAC, using insurance contracts that are fully within the power of the State of Wisconsin to "segregate."
    Indeed, fairness dictates that all of the financial claims against AAC be segregated. Yet in an affidavit filed with the Court, Dilweg argues that holders of financial guarantees such as Dunkin Doughnuts and Herz will be inconvenienced if the CDS contracts are not closed-out. But Dilweg's sworn statement seems inconsistent given that he is advantaging one class of non-insurance financial claims for another. Why are the RMBS claims inferior to the convenience of Herz and Dunkin Doughnuts? Why are CDS senior to any insurance wrap by AAC and in particular the coverage of RMBS?
    The determinative factor for Dilweg�seems to be the Geithner imperative of first paying the bank counterparties in the CDS and effectively repudiating similar guarantees on RMBS, which were destined to eat all of AFG's capital had the State of Wisconsin not intervened. That economic fact of the losses on the RMBS, at the end of the day, was probably the driver behind Mr. Dilweg's sworn statements to the Court.� And how conveninent that the State of Wisconsin decides to segregate the liabilities most likely to become current.
    While the filings by the State of Wisconsin seem well thought out, the fact remains that the logic of discriminating against the RMBS holders starts with the decision to pay out Citigroup and other large banks on the CDS positions. The dirty little secret revealed by the actions of the State of Wisconsin in the AAC case is that the insurance industry and captive regulators are giving equal treatment to CDS and some traditional insurance contracts, while discriminating against other financial claims.� This situation reeks of hypocrisy and conflict of interest.� Did we mention that BlackRock did the analysis supporting the State of Wisconsin affidavit.
    The whole point of treating insurance as a special, state-law industry not subject to the UCC was to give regulators the power to void non-policy related financial liabilities and put the true insured parties first in line. This gets to the question posed to the G-30 back in the summer of 2007, are the global banking and insurance industries at risk to each other. They concluded that all was well, remain calm. Ha! What AFG illustrates is that the financial system is literally one event of default away from a global meltdown.
    We disagree with Mr. Dilweg's pessimistic assessment of the sequestration options available to the State of Wisconsin to void all financial claims. Indeed, this case again illustrates where the Fed failed with AIG, namely to focus on the financial claims rather than taking the classical position of protecting only insurance policy holders. The investors objecting to the State of Wisconsin plan for rehabilitation of AAC correctly argue that the CDS parties were not insurance policyholders at all because AAC guaranteed AFG's obligations (the CDSs) and not the CDS parties directly.
    While the State of Wisconsin does have final say in these situations because of the fact of the guarantee fund supported by all insurers licensed in the state, the apparently illegal preference given to the guarantees of parent-company CDS exposures and the unequal treatment of policy holders of the AAC insurance unit may yet cause some legal shock waves. If Mr. Dilweg and the State of Wisconsin had the courage to segregate all of the financial claims, ring fence the municipal insurance policies and dare the banks to come sue them in WI state court, we would be applauding and the markets would understand that there are still rules in some parts of America.
    The handling of the AFG case by WI insurance regulators is hardly the only effort by political functionaries around the U.S. and the world to put new layers of lipstick on the proverbial pig. The sad part is that all of the political delay and obfuscation in reaction to the real estate meltdown does nothing to change the underlying reality on Main Street. The fact that regulators like the State of Wisconsin even allowed underwriters to deal in high-beta risks in mortgage credit via such vehicles as CDS tells you all that is needed about the failure of state regulation in the U.S. insurance industry.
    More important, the actions of the State of Wisconsin with respect to AAC are, to us, a transparent effort to sidestep the insurance commitments to RMBS holders in favor of honoring contracts to guarantee CDS that flow through some well-connected global banks. This is AIG all over again and we think that the Court and the State of Wisconsin need to understand if Mr. Dilweg has become, wittingly or no, the puppet of Timothy Geithner, his political master and former C director Robert Rubin, and all of the large banks involved.
    All of the above serves to show just how exposed the big banks remain to any issues relating to the $47 trillion OTC swap market. Why do the banks need everything to break their way? Are they not just market makers in the OTC marketplace? Or is the AFC mess once again exposing the "daisy chain" effect whereby breaking one OTC contract takes down the entire rancid system? Where is Oliver Stone?

    They Claim to have Fixed the System?

    Episode #1 – Chris Whalen on The Foreclosure Crisis





    Apparently insurance fraud is a good business and not just for AIG.  Check out Chris Whalen’s latest post: Ambac, CDS and Geithner: It’s AIG All Over Again. prior blog

    Video: The midterm disconnect

    Video: Foreclosures could devastate economy

    Angry Left to Obama: Stop Caving on Agenda


    by Sam Youngman

    Liberals furious with a White House they view as constantly telegraphing compromise with Republicans are pressuring President Obama to get tougher, arguing that is the only way he will win both progressives and independents in 2012.

    ["It's not liberals that Obama is having a clash with, it's reality," Jane Hamsher, founder of the liberal blog Firedoglake.com said. "And anyone who thinks his problems are just with the base is not paying attention. (photo by Flickr user firedoglakedotcom)]"It's not liberals that Obama is having a clash with, it's reality," Jane Hamsher, founder of the liberal blog Firedoglake.com said. "And anyone who thinks his problems are just with the base is not paying attention. (photo by Flickr user firedoglakedotcom)
    Adam Green, co-founder of the Progressive Change Campaign Committee (PCCC) and an outspoken critic of the White House, said liberal anger has less to do with fears of a Clintonian move to the middle by Obama and more with a misreading of the election results by the administration.
    "It's less ‘Oh no, they're triangulating,' and more ‘Boy, their political instincts are really stupid,' " said Green, who along with other liberals has blasted the White House for suggesting it would compromise with Republicans on expiring tax cuts.
    The White House "fundamentally" doesn't get that "the only way to get Republicans to deal in good faith is to fight them, crush them and teach a lesson that if Republicans are on the wrong side of an issue there will be consequences ... so it makes sense to negotiate," Green said.
    "Right now, every time Republicans are on the opposite side of an issue from the public, it's the Democrats who cave and talk about ‘compromise.' It's ridiculous."
    While the White House declined to comment for this story, Obama's remarks since the election indicate that pursuing compromise with Republicans, including on the tax issue, will be one of his top priorities moving forward.
    It's also clear the White House is concerned about the migration of independent voters.
    Obama won a majority of independent voters in 2008 when he was elected, but those voters abandoned Democrats two weeks ago. According to a poll by Resurgent Republic and Democracy Corps, 56 percent of independents voted for Republican candidates in 2010, compared to 38 percent for Democrats.
    There's some evidence that independent voters want the White House to work with Republicans. According to a recent Pew Research Center survey, 57 percent of independent voters want GOP leaders to cooperate with Obama, and 59 percent want the president to work with Republican leaders.
    Jane Hamsher, founder of the liberal blog Firedoglake.com, points to recent polling in arguing there is little evidence that much of what Obama views as areas of compromise - cutting the deficit, bending on tax cuts - would appeal to independents, who she says are fixated on jobs.
    Hamsher noted Obama has given signals that he wants to move a free-trade deal with South Korea even though many voters question the wisdom of free-trade policies.
    She also said there is support for ending tax breaks for the wealthy and protecting Social Security from reforms, despite the changes recommended by the chairmen of Obama's debt commission last week.
    "It's not liberals that Obama is having a clash with, it's reality," Hamsher said. "And anyone who thinks his problems are just with the base is not paying attention.
    "No reasonable person could look at the data and say that the center has support for Obama's priorities right now: cutting Social Security, passing Korea free trade and ballooning the deficit by $700 billion with tax breaks for millionaires.
    "So can we please stop with this fiction that Obama is attempting to woo independents?" Hamsher said. "The things he is doing are not any more popular with independents than they are with the base. Just because something annoys the base does not axiomatically mean it is popular with independents."
    Green said independents who voted Republican in the midterms would move back to Obama if he supported "progressive change."
    "It would be a complete misreading of this election to think that independents who voted for Obama suddenly voted en masse for Republicans," Green said. "In truth, the independents who showed up in 2010 were McCain-voting independents - and the way to ‘win back' independents in 2012 is to fight harder for popular progressive change that inspires Obama-voting independents to return to the polls. Caving to Republicans on Social Security and tax cuts for the wealthy is the worst way to do that."
    Talk of compromise rankles liberals even more when they hear Republicans like Senate Minority Leader Mitch McConnell (Ky.) saying their top priority is to prevent Obama from winning a second term even as the White House talks of a compromise.
    "That contrast bothers the left," said Peter Daou, a Democratic strategist and adviser to Hillary Clinton's 2008 presidential campaign.
    Of Obama's strategy over the last two years of trying to work with the GOP, Daou says: "We all know how that turned out."
    The anger from the left is nothing new to those who watched President Clinton tack to the right following huge Democratic losses in 1994.
    Dee Dee Myers, Clinton's press secretary at the time, said liberals were "definitely mad" at Clinton after he pledged in 1995 that the "era of big government is over."
    "It was a real tug-of-war throughout 1995," Myers said. "And I think it will be an equally long, emotional, difficult path forward for Obama."

    Barry wants to be 'national advocate' for welfare reform

    By Tim Craig

    D.C. Council member Marion Barry (D-Ward 8) hopes to become a "national advocate" for welfare reform, saying Tuesday that he's uniquely qualified to speak out about how the system is failing poor residents and taxpayers.
    "It's like Nixon going to China," Barry said. "You learn that times require different approaches. We have been wedded to this system for years and it's been a miserable failure not to close the economic gap of our people."
    On Tuesday, The Washington Post reported that Barry and D.C. Council member Yvette M. Alexander (D-Ward 7) are sponsoring a bill that would impose a five-year limit on cash payments to participants in the Temporary Assistance for Needy Families program.
    Barry's embrace of the time limits, which could force up to 40 percent of D.C. recipients off TANF, caught many advocates and council members by surprise.
    Council member Tommy Wells (D-Ward 6), chairman of the Human Services Committee, all but declared Monday that Barry's proposal probably will not even be brought up for a vote. Wells said the legislation, as drafted, would force about 8,000 residents from TANF and would also end other benefits, such as childcare subsidies, that they may need to transition into the workforce.
    But Barry, a former mayor with a reputation for being a fierce proponent of government spending, said his proposal is a first step in a broader fight to get more welfare recipients into the workforce.
    Instead of "kicking people off the rolls," Barry said his proposal was designed to bolster job-training and employment services within the Department of Human Services, which administers the city's TANF program.
    Barry said he will also be pushing a series of proposals to try to "get the private sector to live up to their responsibility" to hire city residents. With a little training, Barry said, welfare recipients could transition into well-paying jobs in the District. Barry will likely find an ally in Mayor-elect Vincent C. Gray (D), whose economic development plan calls for tapping into the hospitality and other industries to try to reduce unemployment.
    "There was a time in the African American community, even during segregation, when 90 percent of the waiters were black," Barry said. "This is an excellent opportunity to train these welfare recipients to be able to speak a certain way, to learn menus, to learn courtesy and make up to $200 to $300 a day."
    On Wednesday, Barry plans to speak about his proposal on Fox 5 (WTTG) news. He also hopes to take his message to the national media, believing other urban areas also need to refocus their human service programs.
    "I am going to become a national advocate for welfare transformation," said Barry, who has long been known to relish the spotlight. "Transformation is like a cocoon. You have a worm, in a cocoon, that transforms into a beautiful butterfly."

    By Tim Craig  | November 16, 2010; 3:48 PM ET