South Dakota governor signs bill allowing armed teachers in the classroom
Published March 08, 2013

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South Dakota Gov. Dennis Daugaard on Friday signed a bill allowing teachers to carry guns in school, making his state the first to enact such a law since the Newtown shooting tragedy.

The bill was pushed by gun-rights supporters who say arming teachers could help prevent tragedies like the one at Sandy Hook Elementary School, where 20 students and six educators died. The law, which goes into effect July 1, will allow school districts to arm teachers and other personnel.

But the measure prompted intense debate in the capital, as several representatives of school boards, school administrators and teachers opposed the bill during committee testimony last month. They said the measure could make schools more dangerous, lead to accidental shootings and put guns in the hands of people who are not adequately trained to shoot in emergency situations.

The issue of guns in schools has been a contentious one. The National Rifle Association, several days after the Newtown shooting, proposed installing armed officers or guards in schools across America -- an idea that was met with derision by gun control advocates. Democrats on Capitol Hill in Washington have since moved ahead on gun control legislation, including an anti-trafficking measure that passed out of Senate committee Thursday -- while at the state level, Republican-led states have tried to enhance gun-rights protections.

In South Dakota, main bill sponsor Rep. Scott Craig, R-Rapid City, said earlier this week that he has received messages from a growing number of school board members and administrators who back it. Craig said rural districts do not have the money to hire full-time law officers, so they are interested in arming teachers or volunteers.

South Dakota doesn't stand alone on this issue. For a dozen years, Utah has allowed teachers and others with concealed carry licenses to wear a gun in a public school. A couple of school districts in Texas have been given written authorization to allow guns in schools. And legislatures in other states, including Georgia, New Hampshire and Kansas, are working on measures similar to South Dakota's.

The measure does not force a district to arm its teachers and would not force teachers to carry a gun. 

On Monday, the South Dakota House voted 40-19 to accept the Senate version of the bill, which added a requirement that a school district must decide in a public meeting whether to arm teachers and others. Another Senate amendment allowed school district residents to push a school board's decision to a public vote.

The Associated Press contributed to this report.

Black smoke rises from Sistine Chapel; no decision on pope 

Vincenzo Pinto / AFP / Getty ImagesBlack smoke rises from the chimney on the roof of the Sistine Chapel on Tuesday.
By Alastair Jamieson, Staff writer, NBC News
VATICAN CITY — Black smoke rose above the Sistine Chapel on Tuesday, signaling that 115 Roman Catholic cardinals failed to agree on a new pope during the first day of the papal conclave.

The "princes of the church" began deliberating inside the Vatican after swearing an oath of secrecy and entering the papal conclave at about 5 p.m. local time (12 p.m. ET).

The smoke was created by the burning of ballot papers used by the cardinals in their deciding vote, with chemical cartridges being added to ensure the smoke did not appear to be white — the sign that a decision has been reached. It means the conclave will reconvene on Wednesday morning.

Shortly after the conclave began, semi-naked feminist activists with the words "pope no more" written on their chests and backs staged a protest right next to St. Peter's Square, directly in front of the Vatican.

They were tackled by police and detained.

Sunshine Week: In Celebration of Open Government
Lisa Ellman and Melanie Ann Pustay
March 11, 2013
09:59 AM EDT


Ed. Note: This post is the first in a Sunshine Week series on whitehouse.gov. Sunshine Week is a national initiative to celebrate and focus on government transparency and open government.

As President Barack Obama has stated, "Openness will strengthen our democracy, and promote efficiency and effectiveness in Government." This week, we celebrate Sunshine Week -- an appropriate time to discuss the importance of open government and freedom of information, and to take stock of how far we have come, and think about what more can be done.

Over the last few weeks, we have asked for your feedback on some of our open government efforts, and you have responded, whether in meetings with civil society or viaQuora, or a web form on WhiteHouse.gov. We thank you for taking the time to talk to us about this important work, and we hear you – and we will continue to consult with you.

In the spirit of Sunshine Week, the White House will highlight one initiative a day which demonstrates the Obama Administration’s continued commitment to open and accessible government. Today, we will focus on progress made improving the administration of the FOIA. As Justice Louis Brandeis wrote, "sunlight is said to be the best of disinfectants." In our democracy, FOIA, which encourages accountability through transparency, is the most prominent expression of a profound national commitment to ensuring an open government.

As President Obama declared in his landmark Memorandum on the Freedom of Information Act (FOIA) issued on his first full day in Office: “A democracy requires accountability, and accountability requires transparency.” The FOIA – which provides the public with a statutory right to request and receive information from their government – is a key way in which government transparency is realized.

Over the past four years agencies have been working hard to improve their administration of the FOIA under guidance issued by Attorney General Holder. That guidance directed agencies to apply a presumption of openness in responding to requests and to make it a priority to respond promptly. Both the President and Attorney General stressed that it is also vital for agencies to make information available proactively, without the need to make a request, so that what is “known and done by their Government” is readily available to all. These directives are taking hold across the agencies and real improvements are being made.

In Fiscal Year 2012, the government as a whole:

1. Processed more FOIA requests: Agencies processed 665,924 total requests. This is a 5.5 percent increase over the total number of requests processed last fiscal year. 
2. Decreased the FOIA request backlog: The efforts of agencies to increase the numbers of requests processed has paid off as the government was able to reduce its backlog of pending requests by 14 percent from last year. The current backlog marks a 45 percent reduction from the backlog that existed four years ago in 2008. 
3. Maintained a release rate above 92 percent for the fourth straight year: Of the 464,985 requests processed by agencies for disclosure, the government released records either in full or in part in response to 93.4 percent of these requests. For half of those requests all the information was released, with nothing withheld. This marks the fourth year in a row where the number of responses to FOIA requests providing a release of information either in full or in part exceeded 92 percent of the requests processed for disclosure. 
4. Improved average processing times: Agencies improved the average processing times for all categories of requests. 
5. Disclosed more information proactively: Agencies met public demand for information by posting a wide range of material on their websites, allowing the public to easily find information of interest without the need to make a FOIA request. 

All of the detailed data on agency FOIA compliance from Fiscal Year 2012 is compiled and displayed graphically on the Department of Justice’s government FOIA website FOIA.gov, providing a clear picture of government FOIA administration and progress during the last fiscal year.

These are more than just statistics. They represent the efforts of agencies across the government to answer the call to improve transparency. They demonstrate that agencies are responding to requests more quickly and releasing more information when they do. Agencies are reducing backlogs of pending requests and helping eliminate the need to even make requests by proactively providing information online. The public is the beneficiary of this progress. While there is more work to be done, this past year demonstrates that agencies are answering the President’s and Attorney General’s call for greater transparency.

Ahmadinejad's scandalous moment with Hugo Chavez's mother 

Miraflores Palace via AFP - Getty ImagesIran's President Mahmoud Ahmadinejad greets Elena Frías during the state funeral of her son, Venezuelan President Hugo Chavez, in Caracas, Venezuela, on March 8.

By Kari Huus, Staff writer, NBC News
Iranian President Mahmoud Ahmadinejad may have endeared himself to much of Latin America with his performance at the funeral of Venezuelan President Hugo Chavez, but minders of religious righteousness in his home country were unamused.

His sin — unfortunately for him captured in a photograph — transpired when he came cheek to cheek with a grieving Elena Frias, the mother of the late president, while clasping her hands. In strict Islamic societies, people are not supposed to touch others of the opposite gender unless they are related or married.

The image sparked a storm of controversy in the Iranian press, according to the English-language Iran Pulse, and went viral on Twitter and Facebook as users joked about it or speculated about how the conservative Islamic clerics back in Tehran would respond.

Their answer was swift and certain.
"In relation to what is allowed (halal) and what is forbidden (haram) we know that no unrelated women can be touched unless she is drowning at sea or needs (medical) treatment," said Hojat al-Islam Hossein Ibrahimi, member of the Society of Militant Clergy of Tehran, according to the Iran Pulse report.
Ahmadinejad was already under scrutiny by the conservative clerics who call the shots in Iran, and apparently they did not like the eulogy he gave for Chavez at the memorial ceremony.
They said it was another sign that a "deviant current" was driving the president a greater distance from the Supreme Leader, Ayatollah Ali Khamenei.

During the eulogy, Ahmadinejad said that Chavez "will come again along with Jesus Christ and Al-Imam al-Mahdi to redeem mankind,” putting the populist Venezuelan president and ex-paratrooper in the ranks of holy figures.
Mohammed Dehghan, a member of the Iranian parliament, called for religious scholars to confront Ahmadinejad’s "un-Islamic" acts, Al-Arabiya reported.

Some Shiite religious figures admonished the Iranian president to become better educated about his religion. Others urged him not to make religious references for the rest of his campaign for re-election, while his supporters said the whole uproar was a part of a smear campaign.

A second controversial photograph surfaced that appeared to be of Ahmadinejad attending the funeral in Caracas last week, but it turned out to be a fake that amateurishly Photoshopped the Iranian president in a cheek-to-cheek moment with the former director-general of the U.N. nuclear watchdog, Egyptian Mohamed ElBaradei.

Israel's Dreaded Tipping Point Has Finally Arrived
The country can either be a Jewish democracy or possess all of its historical territory. It can't have both.
MAR 8 2013, 7:30 AM ET

An Israeli holds up a national flag atop a building in Jerusalem's Old City during a parade marking Jerusalem Day, on May 20, 2012. (Ronen Zvulun/Reuters)



As President Obama prepares to visit Israel later this month, reports from administration officials indicate that he does not intend to focus on resolving the Israeli-Palestinian conflict, but rather to discuss regional threats such as Iran's pursuit of nuclear weapons and the continuing violence in Syria. But Obama should realize that Israel's continued presence in the West Bank is an existential threat to its continuity as a democratic, Jewish state -- and time is not on Israel's side.

The urgency of this issue was illustrated by Sergio DellaPergola, a Hebrew University professor and an expert on Israeli population studies, in a presentation at the Woodrow Wilson Center in Washington last month. The statistics DellaPergola assembled are clear and their implications are frightening. Right now, the total number of Jews and Arabs living under Israeli rule in Israel, the West Bank, and Gaza is just under 12 million people. At the moment, a shade under 50 percent of the population is Jewish. In other words, right now -- not in five or ten years, but right now -- only 50 percent of the people living in the Jewish state and in the areas under its control are Jews. The dreaded tipping point -- which advocates of the two-solution have been warning about for years -- has finally arrived.

Some argue that this ratio is irrelevant, that Israel's current demographic balance should not be a source of concern, since Israel withdrew from the Gaza Strip in 2005. The international community doesn't buy this argument, though, since they still see Gaza as occupied since Israel controls its airspace and sea space.

But taking Gaza out of the equation does not buy Israel much time, anyway. According to DellaPergola, if Israel continues to maintain control of the West Bank alone (without Gaza), as many members of the current government seem to favor, and if current fertility rates among Jews and Arabs continue, then by 2030, Jews will constitute only 54 percent of the population. By May 2048, when the State of Israel turns 100 years old, the population of this area will be approximately 55 percent Arab and 45 percent Jewish.

On the final slide of DellaPergola's presentation, he notes three possibilities for the Jewish state: that it be a Jewish state, that it be a democracy, and that it possess all of its historical territory. Israel cannot have all three.

The Jews are not the only people who want and feel entitled to a homeland within the historical territory of Israel. The Palestinians in the West Bank -- who currently outnumber the Jews there, 2.2 million to 320,000 -- know, and the world knows, that this is the only place where they can set up their homeland of Palestine.

If Israel ignores the demand to establish the Palestinian state there, then, in addition to incurring tremendous hostility from the rest of the world for doing so, it will eventually have to find a way to incorporate the stateless Arabs of the West Bank into Israel. What then? Either Israel will stop being a Jewish state, or it will choose to deny the Arabs of the West Bank the most basic of civil rights, such as the right to vote, and stop being a democracy.

If Israel wants to remain a Jewish state and a democracy and is willing to help bring about the creation of a state in the West Bank, its future -- particularly given its wildly productive and expanding economy -- is very bright indeed. But, if Israel insists on holding on to all the historical territory spoken of in the Bible, then its future becomes grim.

The Palestinians seem ready to address Israel's security concerns. Abu Mazen, the head of the Palestinian Authority, has made it clear that, within the context of an overall settlement, the Palestinian state will be non-militarized: no army, no airforce and no military weapons; just an internal police force. Given the past history of Palestinian-Israeli relations, the willingness of the Palestinian Authority to accept this condition is not insignificant.

Israel is about to turn 65, and the question that confronts it is as old as the 2,000-year-old question posed by Hillel in the Talmud: If not now, when? In just a few more years, it will be too late.

From continuing resolutions to budget blueprints: What you need to know about congressional money wrangling 

By Tom Curry, National Affairs Writer, NBC News

The federal budget comes back into the Washington political spotlight this week, as Congress tries to move forward on government spending for the rest of this year as well as a budget for the next.

The clashing fiscal priorities of congressional Democrats and Republicans will be on full display for the next two weeks with deadlines looming as early as the end of March.

Even as members of Congress work on these plans, the spending reductions, also known as the “sequester,” required by the Budget Control Act remain in effect, slicing 6 percent from non-defense, non-entitlement spending and 8 percent from defense spending in the current fiscal year.

Entitlement spending through programs such as Social Security, Medicaid and the Supplemental Nutrition Assistance Program, formerly known as "food stamps," is immune from the sequester’s cuts, although Medicare providers and plans are subject to a two percent cut. At this point there appears to be little likelihood of an agreement that would undo the sequester.

Here are the significant budget actions coming up in the weeks ahead:

White House spokesman Jay Carney talks about President Obama's meetings on Capitol Hill this week with lawmakers.

This week

Obama goes to Capitol Hill to hold separate meetings with Democratic and Republican members of Congress.

White House spokesman Jay Carney cautioned Monday that these meetings would not be budget negotiations. “I wouldn’t expect that they’re going to trade paper on numbers,” he said. Obama’s goal in the meetings, said Carney, was “making clear what his policy positions are, making clear his sincerity” in seeking lower budget deficits.This week the Senate takes up its version of a bill – called a continuing resolution, or CR – to keep funding the government through the end of the current fiscal year. Senate Appropriations Committee chairman Sen. Barbara Mikulski, D-Md., will release her CR Monday.

Last week, the House approved its version of the continuing resolution, with a bipartisan coalition of 53 Democrats and 214 Republicans supplying the votes to pass it.

The House bill, worth $982 billion, includes $518 billion in defense funding and another $87.2 billion for overseas military operations such as those in Afghanistan and North Africa.Ordinarily a CR continues funding for federal departments and agencies at the prior year’s level, but the House CR contains some spending adjustments – known on Capitol Hill as “CR anomalies” – which allow the Defense Department more leeway in its use of funds.

The House CR includes funds important to specific defense-dependent districts – such as funding for the building of two Virginia-class submarines in 2014 and funds for research and development on a submarine that will replace the Reagan-era Ohio-class submarines.

The House CR also includes some spending increases in certain programs such as a provision allowing the Customs and Border Protection agency to maintain its current staffing levels and a 1.7 percent pay increase for military personnel.

If the Senate CR differs from the House-passed CR, the two chambers would need to negotiate a compromise.

In order to avert a government shutdown, both Obama and congressional leaders want to get a CR enacted by March 27, when the current one expires.Senate Majority Leader Harry Reid said last Thursday that the Senate must finish its work on the CR this week because next week will be devoted to debating and passing a FY2014 budget blueprint. “And we have to do that before the break we take for Easter,” Reid said. Both chambers of Congress take a two-week break for Passover and Easter the weeks of March 25 and April 1.

Also this week, the chairmen of both the House Budget Committee and the Senate Budget Committee are expected to release their budget blueprints for fiscal year 2014. The Senate has not passed a budget resolution since 2009.While most federal spending is mandatory – for example Social Security benefits – and is on a kind of auto-pilot (the money goes to those who meet the eligibility criteria), the congressional budget resolution is an important device for raising or lowering spending levels on items such as the National Park Service, weather satellites and the National Science Foundation, which funds basic research.

Also under a budget process known as “reconciliation,” tax increases and changes in entitlement programs could be approved with a simple majority vote in the Senate, rather than the usual 60-vote requirement needed to advance legislation. But on Monday, Sen. Orrin Hatch, R-Utah, the top Republican on the tax-writing Senate Finance Committee urged Democrats to not use budget reconciliation to enact tax increases. Hatch said there's bipartisan interest in enacting comprehensive tax reform through the normal Finance Committee process, but that "it will poison the well for tax reform, making it all but impossible" if the Democrats choose to use the reconciliation route.

Pool / Reuters file photoHouse Budget Chairman Paul Ryan, R-Wis.

The people to watch are Senate Budget Committee chairman Sen. Patty Murray, D-Wash., and House Budget Committee chairman Rep. Paul Ryan, R-Wis.

A key point of contention in Ryan’s budget plan last year was his call for changes to Medicare beginning in 2023. Ryan’s proposal would have applied market principles to Medicare by encouraging seniors to shop among private-sector insurance providers.

Ryan’s 2012 plan would also have imposed a limit on the growth of per capita Medicare spending for people reaching eligibility after 2023.

Next week 

The Senate is scheduled to debate Murray’s FY 2014 budget proposal. Senate rules allow senators to offer dozens of amendments and some of those votes will likely put members who are up for reelection next year in a difficult position of voting for spending cuts or tax increases.

Once each house passes its FY2014 budget plan, the two sides would need to meet and come up with a compromise plan – but even without a formal FY2014 budget resolution, spending could continue if Congress passed a new CR for FY2014.

Beyond next week

The president’s budget plan is required by law to be submitted to Congress no later than the first Monday in February, but Obama hasn’t yet released his plan for FY2014.

Asked Monday when Obama will deliver his budget proposal, Carney said “I don’t have a date certain for you on the president’s budget; it’s being worked on.” Carney said Obama and his aides are watching the budget plans being proposed by Ryan and Murray and that Obama will work with Congress to try to come up with a plan to reduce budget deficits and encourage economic growth.

This summerAccording to Bipartisan Policy Center, the government will reach its borrowing limit by August. Obama and Congress will need to devise an agreement that would raise the borrowing limit. It’s too soon to know whether House Speaker John Boehner will seek to use the debt ceiling as another occasion to pressure Obama to make more spending cuts – especially in the entitlement programs.

Telling teens to just say no to sex doesn't work, so let's waste half a billion dollars doing that

byKaili Joy GrayFollowforDaily Kos

SUN MAR 10, 2013 AT 10:00 AM PDT

This never actually works

In case you were worried that House Republicans haven't come up with any ingenious new ways to waste a whole bunch of your money, worry no more:

Rep. Randy Hultgren (R-Ill.) on Monday called for the creation of a new federal grant program that would spend half a billion dollars to educate teenagers about why they should not have sex before marriage.

In a speech on the House floor, Hultgren cited a Centers for Disease Control report from mid-February that said young adults account for 50 percent of all sexually transmitted disease infections.

It's almost too easy, right? If teens are spreading diseases by having sex, we'll just create some government programs—we all know how much Republicans love creating government programs—to tell them to stop doing that. And because teenagers are known as the most obedient and compliant people on the planet, that should fix that problem double-quick. Who can forget how Nancy Reagan singlehandedly eradicated drug use with her super effective "Just Say No" program?

There's just one little problem with abstinence-only education. It doesn't work. In fact, it makes things worse. Head below the fold to find out why.

The idea of telling kids to just not have sex is pretty stupid on its face, but there's actually research and studies and science—you know, all that stuff Republicans hate—to show just howstupid, not to mention dangerous, these policies are:

After years of warning the Bush administration and social conservatives that abstinence-only education does not stop teens from having sex, nor does it prevent teen pregnancy,a new study by the Guttmacher Institute confirms what many have feared: that deliberately misinforming teens about sex can have serious consequences and that comprehensive sex education, in addition to the availability of contraception, is the best way to reduce teen pregnancy rates.

A 2004 study found that 88 percent of teens who take "chastity pledges"—when they make those creepy pinky swears to abstain from sex until marriage—engage in premarital sex anyway. They're just less likely to use protection and more likely to spread disease:

Yet the teenagers who had taken pledges were less likely to know they had an infection, raising the risk of their transmitting it to other people, said Dr. Bearman and Hannah Brückner of Yale University, the other author of the report.

Dr. Bearman said that telling teenagers ''to 'just say no,' without understanding risk or how to protect oneself from risk, turns out to create greater risk'' of sexually transmitted diseases.

A congressional report released by Rep. Henry Waxman the same year found that abstinence-only programs were actually giving false and misleading information about sex:

[T]hat abortion can lead to sterility and suicide, that half the gay male teenagers in the United States have tested positive for the AIDS virus, and that touching a person's genitals "can result in pregnancy[.]"

And then there was this study about the supposedly abstinent teens who are, strangely enough, still testing positive for sexually transmitted diseases. Huh. They were probably just absent the day they taught "Just Say No" in school.

Meanwhile, there's plenty of research to show the effectiveness and very positive consequences of real sex education, along with access to contraception and other family planning resources:

Teens who receive comprehensive sex-education—rather than misleading, propaganda-based abstinence-only sex education, which has been proven wholly ineffective—are 50 percent less likely to experience unintended pregnancies. Given that approximately half of all pregnancies in the U.S. are unintended, costing taxpayers $11 billion a year, addressing and reducing those numbers is, or should be, a legitimate concern for those who value families, not to mention fiscal responsibility.

But Rep. Hultgren, the sponsor of the latest bill to invest half a billion dollars in a dangerous policy, finds it "troubling" that the government spends more money teaching kids how to actually protect themselves from pregnancy and disease than on "risk avoidance education," which is Republicanese for abstinence-only education. So Hultgren might be surprised to learn that the Affordable Care Act already includes funding for exactly that:

The health care reform legislation that President Obama signed recently isn't only about insurance coverage -- there's also a renewal of $50 million per year for five years for abstinence-focused education.

Programs that receive this funding must "teach that abstinence from sexual activity is the only certain way to avoid out-of-wedlock pregnancy, sexually transmitted diseases, and other associated health problems," according to the Department of Health and Human Services. To qualify, they must also teach that sex before marriage is "likely to have harmful psychological and physical effects." These are part of the "A-H definition," requirements for programs to receive abstinence funding under Title V of the Social Security Act.

It's bad enough that the government is wasting $250 million on demonstrably harmful programs, but of course the very same people who didn't support health care reform now want to use itto spend even more on this absurd "education" that amounts to nothing more than right-wing propaganda:

To fix this problem, Hultgren has introduced the Abstinence Education Reallocation Act, H.R. 718, along with Rep. Dan Lipinski (D-Ill.). The bill would spend $110 million a year for the next five years on grants to abstinence programs around the country.

The bill already has a dozen other cosponsors, all of them Republicans. Token Democratic sponsor Dan Lipinski is, of course, barely a Democrat. He most recently voted for the Republicans' version of the Violence Against Women Act, but he's got a long history of enthusiastically supporting the Republican War on Women and sticking it to his own party just for kicks, including voting against the very same Affordable Care Act from which he's now seeking grant money to spread abstinence-only propaganda. Think it's time to force his retirement yet?

Meanwhile, this latest attempt to waste money miseducating our children has the support of at least one senator, with Lindsey Graham—a practitioner of abstinence, since he's unmarried and so obviously has never, ever had sex—promising to introduce a companion bill in the Senate. As Nick Wing at Huffington Post points out, Graham introduced a similar bill in the Senate last year—you can tell just how near and dear to his heart this abstinence thing really is—but his legislation didn't go anywhere. Oh well. Republicans are nothing if not resolute in trying the same thing over and over and over again, no matter how often or how badly it fails.

So while we know all the things we could do if we were serious about reducing teen pregnancy and disease rates, teaching kids to just say no to sex isn't one of them. In fact, it's just about the worst thing we could do. So maybe, just maybe, we should stop wasting our money on ineffective propaganda disguised as "education" and invest in real education that actually gives teens the resources they need to protect themselves. It's so crazy, it just might work.

Cordial nomination hearing for Cordray, but GOP doesn't budge on opposition 

By Tom Curry, National Affairs Writer, NBC News

The Republicans lost the struggle over the Dodd-Frank law to impose new rules on the financial sector, but three years later they’re still tenaciously fighting what’s probably the best-known Dodd-Frank creation: the Consumer Financial Protection Bureau (CFPB).
Richard Cordray, the man President Barack Obama re-nominated to lead the CFPB, had his confirmation hearing Tuesday before the Senate Banking Committee – and what was noteworthy was the warmth and respect that Republican senators displayed toward Cordray.

Sen. Tom Coburn, R-Okla., told him, “I will compliment you. I think you’ve done a wonderful job so far."

Sen. Elizabeth Warren, D-Mass., expresses her displeasure over the apparent holdup of the confirmation of Richard Cordray as director of the Consumer Financial Protection Bureau.

It’s not Cordray they have a problem with – it’s the agency’s autonomy.

Until Obama agrees to changes in the CFPB structure to make it a multi-member board akin to the Securities and Exchange Commission and other regulatory agencies, Republicans said they will block a confirmation vote on Cordray. They also want to subject the CFPB to annual appropriations by Congress. Right now the law allows CFPB to draw its funds directly from the Federal Reserve.

CFPB now enjoys “complete autonomy; the Federal Reserve has no ability to influence their decision making, no oversight capacity, nothing. The sole function of the Federal Reserve is to write a check” to pay for CFPB operations, said Sen. Mike Crapo of Idaho, the top Republican on the Banking Committee. The CFPB, Crapo said, needs to be “subject some kind of accountability or oversight – but in this case there is none.”

Cordray’s response to that argument is that he has testified many times before the Banking Committee and that his agency submits semi-annual reports to Congress.

And Cordray champion and fellow Ohioan, Democratic Sen. Sherrod Brown said at the hearing, “Some (Republicans) here want to nullify the (Dodd-Frank) legislation” and that for the first time in history “senators are blocking the nominee because they simply don’t like the agency that he will lead.”

T.J. Kirkpatrick / Getty Images

Richard Cordray nominee for director of the Consumer Financial Protection Bureau, and Mary Jo White, nominee for chair of the U.S. Securities and Exchange Commission, are sworn in before testifying at a confirmation hearing before the Senate Committee on Banking, Housing and Urban Affairs on March 12, 2013 in Washington, DC.
Personally, Cordray sent all the signals of a reasonable and accommodating man in his testimony. And Republicans reciprocated. Crapo told Cordray, “I appreciate our private conversations about the importance of accountability and oversight. I recognize that you can’t say what the White House and Congress will ultimately decide with regard to the issues with regard to… changes in the structure of the agency.” But the Idaho Republican told Cordray he “seeks your support” in resolving the dispute with Obama.
Another Banking Committee Republican, Sen. Bob Corker of Tennessee, told Cordray he appreciated the way Cordray had dealt with him and his staff “and I do hope that over the course of the next short period of time we’re able to figure out a way for the entity to function in a manner which makes everyone on both sides of the aisle feel comfortable.”
But Corker said after he left the hearing that “we’re not there yet” – in other words Republicans still haven’t been able to strike a deal with the White House on redesigning the CFPB.
Dissenting from Sen. Bob Menendez, D-N.J. who during the hearing denounced Republican opposition to the CFPB as “ideological,” Corker said, “This is not some sort of ideological deal. That’s not it at all. People would like to see a structure that’s standard for rule-making – the Fed (Federal Reserve) has it, the SEC has it, the FDIC has it.” Corker said he hoped that before Cordray’s nomination came to the Senate floor for a vote that “there’ll be some breakthrough.”
Asked after the hearing whether he’d seen signs of potential compromise from the White House, Crapo said, “not yet, but I’m still hopeful we can find a pathway. … I do believe that there’s plenty of room for us to find a common ground.”
Meanwhile, a legal challenge to the CFPB is under way in the federal district court in Washington – so even if Obama and GOP senators strike a deal the agency might ultimately be ruled invalid.

In the face of GOP opposition to the CFPB, Obama gave Cordray a recess appointment last year. But Cordray’s status seemed on shaky ground after a ruling last month from the U.S. Court of Appeals for the District of Columbia Circuit which held that Obama had acted unconstitutionally by giving a recess appointment to three members of the National Labor Relations Board on Jan. 4, 2012.

The court held that the Senate was not in recess on that day so Obama could not make any recess appointments. (In the NLRB case, the Obama administration said Tuesday it will file a petition with the U.S. Supreme Court seeking review of the appeals court decision.)
Obama gave Corday his recess appointment on the same day he made the now-invalid NLRB recess appointments.

Although Cordray’s appointment was not directly at issue in the appeals court decision, CFRB foes such as C. Boyden Gray, the former White House Counsel to President George H.W. Bush and lead counsel for plaintiffs challenging the CFPB’s structure, argue that Cordray’s actions are under a cloud – and Senate confirmation of Cordray wouldn’t dispel that cloud. The plaintiffs are the State National Bank of Big Spring, Texas, a small community bank, as well as two conservative advocacy groups, the Competitive Enterprise Institute, and the 60 Plus Association.

“Confirmation of Cordray would not retroactively validate the CFPB's actions taken during his appointment,” Gray said Tuesday. “Those actions remain under a shadow of grave unconstitutional doubt in light of the D.C. Circuit's recent decision in the NLRB recess appointment case, and that shadow will remain so long as the Supreme Court does not overturn the D.C. Circuit's decision.”

Each side has what seem to be plausible arguments: Cordray’s supporters say that Republicans are abusing the Senate’s unlimited debate rule by using a filibuster threat to block a confirmation vote on Cordray.

But Republicans – and the three judges of the appeals court -- say Obama abused the recess power when he appointed Corday last year.

First Thoughts: Return of the Ryan budget



Ryan budget takes center stage again … Balances budget in 10 years, but he keeps ObamaCare Medicare savings while at the same time assuming the law’s repeal. But he says it’s not about the “how,” it’s about the “why.” … Bottom line: There’s not much compromise in Ryan’s budget -- and there likely isn’t much in the Democrats’ either. … Obama meets with Senate Democrats, where there will be some friction over his overtures to Republicans. … Do the politics of usual hamper the potential for a grand bargain? … CPAC starts Thursday – and the pizza vs. box will be on full display … Priebus goes to Brooklyn, as the party tries to go high tech.

By Chuck Todd, Mark Murray, Domenico Montanaro, and Brooke Brower
*** Return of the Ryan budget: For the third time in the last three years, House Budget Committee Chairman Paul Ryan will once again unveil a budget today that conservatives will cheer, that liberals will despise, and that will kick off a debate over spending and budget priorities between the two parties. What pleases conservatives: It balances the budget within a 10-year timeframe (his previous ones waited until much longer to do that); it tackles entitlements (Medicare and Medicaid) as well as tax reform; and it isn’t shy about where it wants to take the country. What infuriates liberals: It ignores the election results from 2012 (Ryan and Romney largely campaigned on that budget last fall, especially the changes to Medicare, and lost); it cynically assumes ObamaCare’s $716 billion in Medicare cuts as a way to balance the budget in 10 years (despite Ryan saying he and Romney would restore those cuts during the campaign); and it also assumes the revenue from the fiscal-cliff tax increases (which a majority of House Republicans voted against). Ryan has an op-ed in the Wall Street Journal today about his plan. He leads off talking about the debt and emphasizes the “why” not “how” to get to a balanced budget. But bottom line: the only way Ryan got to a balanced budget in 10 years is using Obama’s tax increases and Obama’s Medicare cuts. 

Jacquelyn Martin / AP file photoHouse Budget Committee Chairman Rep. Paul Ryan, R-Wis. leaves a Republican caucus on Capitol Hill in Washington, Tuesday, Jan. 1, 2013.

*** Flashback: Just how much did Ryan campaign against the Medicare savings in ObamaCare, check out this from his GOP convention speech: "You see, even with all the hidden taxes to pay for the health care takeover, even with new taxes on nearly a million small businesses, the planners in Washington still didn't have enough money. They needed more. They needed hundreds of billions more. So they just took it all away from Medicare -- $716 billion dollars, funneled out of Medicare by President Obama. An obligation we have to our parents and grandparents is being sacrificed, all to pay for a new entitlement we didn't ask for. The greatest threat to Medicare is ObamaCare, and we're going to stop it."

*** No compromise: More than anything else, Ryan’s budget is mostly unchanged from its last two -- even though he lost a national election -- and doesn’t offer a hint of compromise. (Ryan touting on FOX that he and Romney won the elderly vote in 2012 is akin to the grunge band from “Singles” saying they’re huge in Belgium.) And it raises the question as Senate Democrats prepare their own budget and as President Obama continues his charm offensive: Is Ryan capable of cutting a deal? Up until now (like on the Simpson-Bowles commission), Ryan hasn’t reached across to the other side. For all of Ryan’s talk that Obama isn’t serious about cutting the deficit/budget, it’s noteworthy that he wouldn’t COME CLOSE to balancing the budget in 10 years without two of Obama’s priorities: the health-care law and the fiscal-cliff deal. Ryan and House Republicans believe their method would lead to growth, but liberals got a boost yesterday when the Wall Street Journal reported that without cuts in the public sector, a.k.a. government jobs, unemployment would be 7.1% rather than the 7.7% where it is today.

*** Obama meets with Senate Dems: Speaking of budgets, Senate Democrats are aiming to come out with theirs tomorrow. As we’ve noted previously, it will -- incredibly -- be the first budget they’ve released in four years. It won’t be all sunshine and roses for President Obama when he meets with Democrats today at 1:30 pm ET. There will likely be a little friction and skepticism from liberals on just what the president’s up to with Republican chats on grand bargain, according to a top Capitol Hill Democratic source. Not to mention, Democrats are already second-guessing the president’s deal-making during the fiscal cliff and the Congressional Black Caucus is wondering why there haven’t been more black cabinet nominees. And it will also be interesting to see the tone the president takes on the Ryan budget. The previous two years, the launch of the Ryan budget was cause for the White House to go into full campaign mode. But given the new tone of outreach the president is setting, does the president get critical of Ryan quickly or take a different tact? And then there’s the White House reaction to the Senate Democratic budget, how fully does the White House embrace it? With their own budget coming out sometime NEXT month, how those two budgets differ will be magnified and certainly COULD be a way for the White House to signal where it will compromise and where it won’t.

*** Politics as usual comes creeping in: While there’s some hope that a deal for a grand bargain is possible, given the White House’s desire for one and the president’s reaching out to rank-and-file Senate Republicans, the campaign arms of both parties are chomping at the bit over these budgets. The DSCC will go after several 2014 hopefuls over the Ryan budget. The DCCC and House Majority PAC are out with videos hitting Republicans as well. For the GOP’s part, they are eager to (finally) get a Democratic budget they feel like they can use against them. The NRCC is raising money off Ryan’s plan, and going after several freshmen. So if this was supposed to be a week breaking out a bit of budget kumbaya, think again. The politics of usual is also setting in. Somehow to get a budget to Obama, the two parties have to merge these political documents. Merging their politics is not something they’ve been able to even come close to doing in the last four-plus years. What is fascinating is how here you have the president and several Senate Republicans (and others), who say they want to clear the brush and get a big deal. But the campaign arms are fired up this week. How much does all this impact the chance at a grand bargain? Meanwhile, keep an eye on this other political sideshow that is developing in the talking-point wars between the two parties: the battle to own the word “balance” -- balanced budget vs. balanced approach. Democrats and the White House have used “balanced approach” as a buzzword to signal that the Republicans are uncompromising. Republicans hope to use the idea of a “balanced budget” to show the Democrats aren’t serious about the debt.

*** Just say no: With CPAC beginning on Thursday, conservatives and political observers have asked this question: Are the GOP’s problems about policy or are they due to the packaging? In other words, is it the pizza or the box? But looking at our most recent NBC/WSJ poll (conducted and released last month), the problems seem to involve a combination of the two: Americans associate Republicans with negativity in both policy and the tone -- they want to stop things, eliminate them, cut them, etc. Asked an open-ended question what one or two specific things they agree or disagree with the most that Republicans in Congress are proposing, 58% answered in disagreement. And those responses were almost about a negative rather than an affirmative. Not compromising with Democrats (11%), opposing gun control (10%), not taxing the wealthy (8%), getting rid of Obamacare (7%), and reevaluating entitlement programs (6%). And even the comments from the 31% in agreement with the GOP gave somewhat negative answers instead of affirmative ones: protecting gun rights (8%), cutting spending/managing spending (8%),cutting/not raising taxes (5%).


*** What are you FOR rather than simply AGAINST? By comparison, the 49% who said they agreed with President Obama gave affirmative responses: health care (15%), better/more gun control (13%), economic policies (11%), immigration reform (7%), creating more jobs (5%), more support for education. And the 48% who disagreed with Obama also gave affirmative responses: Obamacare (18%), gun-control legislation (16%), handling of the economy (7%), and handling of immigration reform (5%). Of course, when you’re out of power -- whether you’re the Democrats or Republicans -- you’re typically opposing the party in power, so these responses aren’t all that surprising. But this does speak to the fact why Americans right now have a more negative opinion of the GOP. And as we watch CPAC, especially the speeches by potential 2016ers, it will be interesting to hear what the speakers stand FOR rather than AGAINST.

*** Reince in Brooklyn: RNC to make digital expansion: It’s no secret that the Republican Party was walloped in two key areas in 2012 – with minorities and technology (especially with behavioral analytics). There was evidence yesterday that the Republican National Committee is taking steps to address both. RNC Chair Reince Priebus went to Brooklyn, NY, yesterday, where he met with black Republicans. And later in the day, NBC’s Sarah Boxer reported that the party is planning a major digital overhaul after it releases its autopsy of the 2012 election Monday.

*** Bloomberg soda ban blocked: The New York Times: “A judge struck down New York’s limits on large sugary drinks on Monday, one day before they were to take effect, in a significant blow to one of the most ambitious and divisive initiatives of Mayor Michael R. Bloomberg’s tenure. … The decision comes at a sensitive time for Mr. Bloomberg, who is determined to burnish his legacy as he enters the final months of his career in City Hall, and his administration seemed caught off guard by the decision.” Bloomberg said yesterday he would appeal. The New York Post goes for “Pour it on.” How many “soda/pop/coke” (whatever you want to call it) will there be at CPAC now…?

Johntho


The Ryan budget is part of the problem that republicans can not win elections. Take away from the working class in order to protect the richest in the land from having to pay their fair share of supporting this country and its government. They make their money here, they get rich on the backs of the American worker and have gotten even greedier as the conservative movement dies. If the republican part were serious about deficit reduction and a balance budget they would accept that this country has been starved by their continued use of supply side economics which has always failed, and austerity measures that are failing in Europe instead of a more moderate approach over a number of years that includes taxing the rich their fair share.

54 votes#1.1 - Tue Mar 12, 2013 9:06 AM EDT

Bill, Fairfax VA


The Fatal Flaw of "Compromise"

Why can't we all just get along? Why can't reasonable folks on either side of an issue find some common ground in the middle and come to an agreement that moves the country forward? And why oh why is it always those darn Republicans who dig in their heels and refuse to give an inch, thereby perpetuating government dysfunction? Maybe because "compromise" isn't quite what it's cracked up to be.

When the middle ground of "compromise" produces an outcome that requires folks on both sides to abandon deeply cherished principles, then "compromise" will not happen. To the contrary, when men and women of principal are in power they will exercise that power in a manner consistent with their beliefs and not concede an inch –thus, no one in the Obama administration would even consider waterboarding a bad guy. By the same token, a principled opposition will reject any "compromise" that forces an abandonment of their own most deeply held beliefs. The result is a middle ground that is virtually nonexistent.

This is exactly the situation we are in today regarding the issue of fiscal policy and the proper role of government in our society. Republicans fundamentally believe the national debt is leading us to fiscal disaster, a debt driven by unsustainable spending by a nanny state government that breeds dependency and erodes incentives for self-reliance. Democrats, of course, don't see the world that way at all and have firmly resisted even the slighest reductions in government spending. From the perspective of each side, there is no dishonor in standing firm on their respective principles. Indeed, the dishonor would lie in capitulating to untenable demands. Thus we have Paul Ryan preparing a budget that balances within ten years with no tax increases, while Patty Murray has a budget that NEVER balances even with a boatload of tax increases.

Which brings me to Obama and his shameless portrayal of Republicans as being intransigent and unwilling to "compromise." Apparently it's OK for Democrats to stand on principle when they resist calls for entitlement reform, but it's not OK for Republicans to stand on their own principles and resist calls for even more taxes. Consider this: 107 House Democrats have signed a letter to Obama threatening to vote against "any and every cut to Medicare, Medicaid or Social Security benefits – including raising the retirement age or cutting cost of living adjustments." How is this digging in their heels approach is any different from Republicans who have signed Grover Norquist's no tax pledge? The answer is there is no difference, both approaches are based on deeply held beliefs advocated by the respective parties. Yet Obama and an accommodating MSM consistently spin this story to paint the Republican side as the only bad guy in the room.

The fact of the matter is the notion of "compromise" in today's climate is nothing more than a club Obama is using to try and gain political advantage over Republicans. So the next time you hear the president and his pals in the MSM castigate Republicans for their refusal to deal, remember that when "compromise" makes a mockery of principle it is equally distasteful to both sides, Democrat as well as Republican. Just ask Patty Murray. Realistically, the only way out of this standoff is for one party to have control of both the Congress and the presidency and thereby be in a position to shape policy without need for "compromise" -- just like Obama did in his first two years with health care and financial reform,

That's why the 2014 midterm elections are looming as critically important to our future. And that's why every word and deed from Obama needs to be closely parsed from the perspective of 2014 politics – particularly his blatantly self-serving and thoroughly disingenuous representations of "compromise."

15 votes#1.2 - Tue Mar 12, 2013 9:06 AM EDT

Pat Boston-7793618

The Republican Party has for many years now steered our nation in the wrong direction, because of their own selfish priorities. They are no good at governing. What they are good at is being mouthpieces for the very wealthy by making up lies. Their lies have hurt a great deal of people and will continue to hurt a great many people. Most of the nation realizes it now and it's why the democrats won in November. Most of the nation does not want the GOP's policies.

The wealthy/right wing media for years have used the middle class to exploit the poor and working classes. I hope those days are over. I really do. It's up to President Obama and Congress to listen to US and not to those who have no idea of what they're talking about. The madness has to end. Now.

All the so-called msm we have had throughout the years didn't stop what their job was to stop. Government/corporate America exploitation of the American people. They failed the most vulnerable Americans miserably over the years.

I hope the media, Democrats and President Obama see this, written by Michael Tomasky:

{snippets}

... The Washington Post's editorial page, Alan Simpson, Erskine Bowles, Alice Rivlin, and all the other folks who go around insisting that the budget deficit is our biggest problem.

It's not. Jobs are still are our biggest problem. As Paul Krugman documented in his Monday column, the deficit is actually decreasing quite rapidly. It's still high. But it's tumbling down. And one thing that will make it tumble downward even further, of course, is putting more people to work, spurring more economic activity, leading to more investment and spending.

And one thing that will make it tumble downward even further, of course, is putting more people to work, spurring more economic activity, leading to more investment and spending. The February jobs numbers were great, but a 7.7 percent unemployment rate is still too high. That's what we need to be attacking.

Obama needs to take some steps toward bringing it down even more. But he can say that while also saying, and saying forcefully: I will not hop on the deficit hysteria bandwagon. I still believe the most important order of business for me is to create more jobs, first for the obvious reason that we want more people working and second because a stronger economy will lower the deficit more quickly and reliably than anything else. So yes, I want to get the deficit under long-term control, but I'm the president, I was reelected handily, and no combination of people is going to bully me into accepting their agenda or timetable.

Obama can't spend the last three years of his presidency playing ball on Paul Ryan's home field. That's a recipe for political weakness and policy disaster. This is the week to draw his line in the sand and tell the deficit-hawk establishment who's in charge.

http://www.thedailybeast.com/articles/2013/03/12/how-obama-should-respond-to-ryan.html

________________________

The beach erosion going on up here is very sad to see. Very sad.


45 votes#1.3 - Tue Mar 12, 2013 9:10 AM EDT



Beverly in Chicago


Good Morning fellow libs all nice comments this AM.


Shazam????

Does Paul Ryan think he is now Captain Marvel because wants to take credit for including $600 billion in new revenue in his budget which he and other republicans accused President obama of stealing? I still chuckle thinking of batty eyed Michele Bachman screeching... "We know that President Obama stole over $500 billion out of Medicare to switch it over to Obamacare."

Michele Bachmann on Monday, September 12th, 2011 in the CNN/Tea Party Express debate in
He shouldn't. He is prepared to reveal for the umpteenth time his iteration of repealing Obama Care in his budget today. He shouldn't bring that forward either. Repealing Obamacare is one reason Paul Ryan is not VP today. The American people spoke in the 2012 election. Paul Ryan has been all over the political landscape with Obamacare cuts.
When “Obamacare” passed Ryan put them in his House-passed budget plans in 2011 and 2012, then he campaigned against them in the 2012 election. Now he is backing them again in his new budget plan which he revealed on “Fox News" Sunday and was smacked down by Chris Wallace.
Futhermore, it's been revealed House Republicans Can’t Explain How Obama’s Policies Got Into Paul Ryan’s Budget .
http://thinkprogress.org/economy/2013/03/11/1697691/journalist-exposes-republicans-for-including-obamas-policies-in-ryans-budget/
-------------------------------------------------------------------------------

Uh Oh!!

Paul Ryan's budget explains why President Obama’s balanced approach is the only way to go.

Howevver, Paul Ryan's acting like Captain Marvel , along with the GOP, and the Tea Suckers think their very, long, angry, caterwauling, years of vehement denunciations have given then an imprimatur on a budget that is based on President Obama’s policies.
Keep wanting to raising more taxes for the rich and lowering the expectations of the Right ever becoming a relevant political party; Paul Ryan, GOP, and you Tea Suckers!!!!

If Paul Ryan should receive any lightning bolt moment, it should be only to enlighten him into realizing he is "A Big Red Cheese".

35 votes#1.5 - Tue Mar 12, 2013 9:14 AM EDT

David Walker


What the hell is the matter with this guy? He's like the neighbor kid who keeps poking sticks at a dog. The dog is only going to take so much. You tell the kid to stop it. You tell him at some point the dog is going to tear him apart. That is a perfect analogy for what Paul Ryan is doing with Obamacare.

Obamacare is not going to go away. The fact is the alternative to Obamacare is to stand by as people get sick. To tell them to just hurry up and get better. To tell them to go to an emergency room they can't begin to afford. To tell them to die. Dammit Paul, stop poking the stick at us. We're going to bite.

Ryan doesn't have a budget proposal. What he brings is more proof that he does not grasp arithmetic. Stop with the nonsense. Stop pretending he's some sort of numbers whiz. He is not. He's putting finger paint - or worse - on the walls.

He has a ten-year proposal. Really? And in that 10-year period, Congress is going to follow every one of his fantasy proposals? President Obama is going to sign a repeal of Obamacare? There will be no emergencies, no national disasters, no possible changes that Brainiac Boy hasn't considered? The economy is going to grow. Old folks will stop getting sick and their insurance premiums will go down. And gold will fall from the sky.

Enough! This is nonsense. Paul Ryan flatly does not know what he is talking about and then he has the nerve to say he did his part. It's up to the President to overdose on the same drugs Ryan is using and we'll all float off to La-la Land. NO MORE. STOP IT! SHUT UP!

Give us a realistic one-year budget. Give us something that can get through the Senate and the President will accept. Deal with the damned facts. We are running a deficit and we need revenues. You don't get new revenues by cutting revenues. Paul. Hello, Paul, anybody home. You don't get more by getting less.

You cut defense spending. You overhaul entitlement programs. You cut waste and inefficiency, and yes, we know it's not as easy as it sounds. You stop using the tax code to reward your friends and to promote social change you like. You tax the rich. NO, Paul. REALLY. You tax the rich. They don't create jobs. They just take money from those who can least afford to give it to the rich.

I'm not kidding Paul. Stop poking us with sticks!

Panel advances background check bill, but its path remains unclear



By Kasie Hunt, Political Reporter, NBC News


The Senate Judiciary Committee on Tuesday advanced legislation requiring all gun buyers to get a background check, voting along party lines to send a version of the bill to the full Senate.
But the bill passed in committee does not represent the legislative language that both sides ultimately expect the full Senate to consider. 
Instead, it's a Democratic version of a background check bill, voted upon by the committee because a bipartisan group of negotiators haven't yet been able to compromise on its specifics.

"I've been talking and continuing to talk to colleagues across the political spectrum and across the aisle about a compromise approach, and I remain optimistic that we'll be able to roll one up," Sen. Chuck Schumer said at the Judiciary Committee's meeting on Tuesday. "But we're not there yet."

Senators are working on a package that would require all gun buyers to get a background check before they buy a gun. Under current law, only licensed dealers have to get a background check from a buyer before they sell a firearm. The bipartisan group had agreed on some exceptions, including one for people selling or giving guns to family members.

If that group -- led by Democrats Schumer and Joe Manchin and including Republican Sen. Mark Kirk -- can find common ground, the bill they produce is expected to become the centerpiece of President Barack Obama's gun control agenda in the Senate.

Those negotiations stalled when Republican Sen. Tom Coburn -- who carries an "A" rating from the National Rifle Association -- couldn't agree with Democrats about whether to require private sellers to keep records of the guns they sell.

Schumer and Manchin are now looking for a second Republican co-sponsor, preferably someone with a top NRA rating. They've reached out to a number of GOP lawmakers, including Sens. Jeff Flake, Susan Collins and Johnny Isakson. Schumer is now taking meetings with some of those Republicans.

Senators also advanced a school safety measure on Tuesday. That bill had bipartisan support.

Why consumer agency must go, and why it should be saved 

By Bob Sullivan, Columnist, NBC News

If the Consumer Financial Protection Bureau disappeared tomorrow, would anyone notice?

What is expected to be a contentious Senate Banking Committee confirmation hearing Tuesday for Rich Cordray, who has been temporarily leading the bureau, offers an opportunity to examine the need for a federal agency designed to protect consumers in their financial dealings. If confirmed, Cordray gets a five-year term, but he’s certain to face a major fight from Republicans, who say the bureau is ill-conceived. We spoke to one of the agency's biggest supporters and perhaps its fiercest opponent to get some perspective. But first, a little background:

Born out of the financial crisis, the first new federal consumer protection agency since the Depression, the CFPB has had a rocky start. Republicans railed against the idea but couldn't stop Democrats from passing the financial reform legislation that created it, so instead they blocked appointment of Cordray in 2011, effectively putting the bureau into limbo. President Barack Obama then used a recess appointment to seat Cordray, setting off a battle that is still going on.

The political dispute didn't stop the bureau from shooting out the gate, however. In its 15 months of existence, it has written a host of new rules for lenders, set up a huge public database of consumer complaints and generally irritated most of the financial industry.

Many in the banking industry are still hopeful they can dismantle the CFPB, unseat Cordray and potentially undo everything the bureau has accomplished with a single court victory.
A federal court ruling in January found that another recess appointment by Obama was improper, creating the possibility that it might agree with Republicans who argue Cordray’s recess appointment was illegitimate, too. Some opponents argue that would make everything the bureau has done since his appointment void.

Expect bickering

That legal battle is still in the future, but Tuesday's confirmation hearing serves as a proxy for the fight and another chance for political posturing by both sides. There will be plenty of "Your regulations are killing jobs" vs. "Do you want a repeat of the 2008 recession?" bickering.

The discussion has potential to be a little more elevated, however, as this time the CFPB has a track record to examine. As far as federal agencies go, it's just a baby. But as long as we're fighting about it, it’s worth asking what the CFPB has done to prove its worth.

In one corner ...

Todd J. Zywicki, a law professor at George Mason University with expertise in bankruptcy and contracts, says the CFPB has become exactly the monster he predicted three years ago when Congress debated its creation.

"It's turned out to be an extremely political agency,” he said. “... It's turned out to be really aggressive and arrogant in the way it behaves.”

When one of Obama’s recess appointments was invalidated, the agency response was "typical,” he said.

"They said that ruling doesn't apply to us,” Zywicki said. “What that shows is an agency that is very arrogant and out of control.”

The CFPB has unusual power among federal agencies. Unlike the Federal Trade Commission, the Federal Communications Commission and other agencies which are run by members of a commission with mixed political affiliations, the CFPB has a single agency head. It also does not have to submit its annual budget for congressional review the way other regulators must.

"They've created an unaccountable super-regulator that can and has acted as a highly political agency," Zywicki said. "If the CFPB were to go away tomorrow, it would be a boon for consumers and the economy."

Zywicki's most specific concern about the agency before its creation was that it would hurt lenders, and therefore hurt consumers who were trying to borrow money. That has happened, he said.

"Our concern from the beginning was that it would act in a manner that would restrict credit and hurt the economy," he said. "Look at its rules on qualifying for mortgages (which impose stricter requirements on borrowers). ... It's stifling innovation (by banks) and restricting consumer choices."

He also said that the agency's new rules are disproportionately impacting the nation's smaller banks, which have smaller legal staffs to deal with them.

"Because of the massive regulatory burden it is imposing on the economy, (the agency) is promoting a consolidation of the banking industry" by burdening small banks, Zywicki said. He could not point to a bank that closed or was sold because of CFPB rules but said that smaller community banks across the country are consistently complaining about the rules. "It's the overall effect of regulations," he said. "It's not just the CFPB, but it is piling on."

And in the other ...

Taking the opposing view is Ed Mierzwinski, consumer program director for the consumer advocacy agency Public Interest Research Group and a vocal supporter of the CFPB creation and of Cordray. He gives the agency an "A-minus" for its work so far and has no trouble rattling off a list of accomplishments in its short life. Among them, he said, the bureau has: 

• Successfully brought enforcement cases against three large credit card issuers for allegedly unfairly "upselling" products such as credit card insurance, and returned $400 million to 6 million U.S. consumers after a settlement. 
• Created new mortgage disclosure documents, promoted awareness among college students about school loan debt and launched a separate effort to protect soldiers and veterans from predatory lenders, all through its “Know Before You Owe” program. 
• Become the first federal agency to supervise so-called “non-bank banks” and begun to focus on products such as payday loans, title loans and other non-traditional borrowing products, as well as private student lenders. 
• Worked to increase transparency, including creation of a public disclosure website that lists consumer complaints and, unlike similar databases at other agencies, allows anyone to browse the complaints, including information on the companies targeted. Agencies such as the Federal Trade Commission do not make complaints pubic. 

"The CFPB data allows (observers) to rank the companies involved. No one wants to be No. 1 on that list," Mierzwinski said. Public shaming is an effective regulatory tool, he argued, one that hasn't been used by other agencies.

When asked about the theoretical possibility that the agency could disappear, Mierzwinski said consumers would lose the benefit of actions he expects in the next 15 months, specifically related to the CFPB's recently acquired new power to regulate credit bureaus and debt collectors.

"The FTC never had the tools to go after them,” he said. “... Now for the first time, a federal agency can go into the credit bureaus and debt collectors and say, 'Show me your books.'"

Mierzwinski said the FTC has never held the credit bureaus financially accountable for credit report errors and predicted CFPB enforcement would lead to more accurate credit reports.

In a more general way, he says enforcement actions and additional regulatory oversight help all consumers, even if they haven't received a refund check based on a bureau lawsuit.

"I'm convinced that many banks eliminated those kinds of practices," such as selling credit card insurance, after a CFPB lawsuit,” he said. "So going forward, you will see fewer unfair offers from banks. ... If you have a mortgage, going forward your servicing rules will be fairer."

Mierzwinski’s chief argument for preserving the CFPB: All other banking regulators are charged with simultaneously protecting the safety and soundness of banks on one hand, while mandating fairness to consumers on the other. That's why, for example, excessive overdraft fees were allowed for years -- when regulators weighed the interests of making banks profitable against treating consumers fairly, they often chose the former.

"They had a conflict of interest ... and often sided with bank safety over consumer protection," Mierzwinski said.

Zywicki, the CFPB critic, said he isn't fundamentally opposed to a consumer protection agency focused on financial products, but he says he believes evidence shows that Cordray's agency is acting recklessly.

"They made a political decision that the entire financial crisis was a consumer protection problem, ignoring evidence that there were other causes," he said. "I see no indication to date that they have a serious understanding of economics or unintended consequences. Sure, there are concerns about these products. People misuse mortgages. But their behavior to date raises questions about how seriously they take economic evidence."

He disagreed that payday and other non-traditional lenders had slipped through regulatory cracks before creation of the CFPB -- they were regulated at the state level, he noted. And even in this area, he said he was concerned about the new agency's actions against high-interest lenders.

"The concern is the same, that they will blunder based on their belief in what's going on, rather than use sound economic science,” he said. “By over-regulating those products, they could drive them out of business and could end up hurting consumers. ... Before we had alternative lending products ... we had loan sharking. We could end up there again."

It works, or it doesn't

While Zywicki wouldn't mind a dismantling of the agency, his preference would be a radical restructuring, with Corday replaced by a slate of mixed-party commissioners with less power.

"The optimal solution is a more accountable, more reasonably constructed agency along the lines of the FTC," he said. "We've been doing independent regulatory agencies for a century, and we know what works."

But Mierzwinski said the housing bubble and the recession show that the system that was in place didn't work, and says he fears that a diluted CFPB wouldn’t be able to take firm action against the powerful financial services industry.

"We would lose … the one regulator that has protecting consumers as its only job," he said. "Payday lenders could run roughshod over American consumers again without the CFPB, and credit bureaus wouldn't be brought into line."


One latte away from millions? Don't bank on it, author says


ID theft on the rise again: 12.6 million victims in 2012, study shows