The congressional fiscal super committee that is tasked with crafting a deficit reduction package of at least $1.5 trillion met today with the architects of the Bowles-Simpson and Rivlin-Domenici deficit reduction plans. Both Democrats and Republicans have recently released their initial offers to the super committee, which seems no nearer to cutting a final deal than it did when it was first formed.

As Igor Volsky noted earlier this week, the plan that the Democratic members of the super committee released is well to the right of bipartisan plans like Bowles-Simpson or the plan crafted by the Senate’s Gang of Six (both of which included unnecessary cuts to vital programs). In fact, the Democrats’ plan has about six dollars in spending cuts for every dollar in new revenue (while Bowles-Simpson had a two to one ratio).

The Republicans, meanwhile, released a “deficit reduction” plan that, depending on the revenue baseline assumed by both Bowles-Simpson and the Gang of Six, would cut taxes to the tune of more than $800 billion over 10 years, according to the Center on Budget and Policy Priorities:

The new Republican plan provides for slightly more than $3 trillion in deficit reduction over the next ten years, relative to a current-policy baseline that assumes extension of all the 2001-2003 tax cuts. (See Table 1.) Of that amount, only about 1 percent of the deficit reduction ($40 billion) stems from revenue increases. And, compared to the “plausible baseline” that the Bowles-Simpson Fiscal Commission and the Senate’s Gang of Six used, which assumes expiration of the upper-income tax cuts, the latest Republican plan actually provides for tax cuts of more than $800 billion over ten years.

Overall, “the Republican plan would produce $1 trillion less deficit reduction than the Democratic offer, relative to any baseline.” The Republicans, in their zeal to indiscriminately reduce taxes regardless of the country’s ability to afford it, evidently believe that no deficit reduction plan is complete without blowing a new hole in the federal budget.

In just one week, Ohioans will vote on Issue 2 to decide if Ohio’s anti-labor law, Senate Bill 5, should stay on the books. Conservative supporters of Senate Bill 5 continue to argue that the unpopular law actually helps public employees by preventing layoffs. By taking away a worker’s right to collectively bargain, Republicans like Ohio Gov. John Kasich insist that cities will be able to afford the costs of public employees like firefighters and police because they won’t have to negotiate supposedly exorbitant contracts.

But according to David Smith, the Republican mayor of Lancaster, Ohio, that idea is the furthest one from the truth.

Smith recently had to layoff 13 firefighters and close a fire station, despite concessions from firefighters. As Smith notes, fire and police forces took no pay increases over the last two years. “Fire and police [unions' bargaining units] had closed contracts, but they opened them up to allow us to work with them on a number of issues,” he said. But Smith still had to lay off the firefighters, and he insisted that Senate Bill 5 wouldn’t have “save[d] the day for anybody.”

Why? Because it was Kasich’s budget cuts — not the ability of workers to bargain — that left him with no other option:

Smith said Lancaster didn’t have a problem with bargaining units but rather the state’s reduction of funds allocated to local governments. In an attempt to balance the state’s budget, Governor John Kasich reduced the amount paid out to cities and towns in the state by about half.

Smith said Lancaster also received fewer local income tax dollars, as well, compounding the problems.

“We lost 50 percent of that due to the state allocating that money back to themselves, instead of to the city,” he said.

Smith said the city had been unable to fill three other firefighter positions due to budget constraints as well as five police jobs, and around 20 other city positions.

Smith added that Kasich’s elimination of the state estate tax, a move that solely benefits the wealthy, will create “yet another obstacle” in finding the funding for the city’s firefighters. Smith joins a retired Republican Ohio Supreme Court judge and a right-wing radio host in urging Ohioan to vote no on Issue 2, thereby doing away with Ohio’s anti-worker law.

A favorite conservative pastime since the financial crisis of 2008 struck is to try and deflect blame away from Wall Street and its excesses and onto Fannie Mae, Freddie Mac, and government housing policy. No matter how many times the theory that the government mortgage giants caused the crisis gets debunked, it keeps on coming back to life.

The latest political figure to join this parade was New York City Mayor Michael Bloomberg (I), who responded to a question about the ongoing Occupy Wall Street protests by saying that the protesters’ grievances are “unfounded,” since “it was not the banks that created the mortgage crisis“:

“I hear your complaints,” Bloomberg said. “Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp. Now, I’m not so sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn’t have had them without that.

“But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it’s one target, it’s easy to blame them and Congress certainly isn’t going to blame themselves.”

While the government sponsored mortgage giants were certainly not blameless, Federal Reserve data shows conclusively that it was private mortgage brokers, not Fannie and Freddie, who drove the subprime housing bubble:

– More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

– Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

As economist Robert Gordon has written, the lenders that made the bulk of subprime loans weren’t even covered by government laws to encourage homeownership. In fact, 94 percent of high-cost loans were totally unconnected from government homeownership laws.

As Paul Krugman has written, “Fannie and Freddie had nothing to do with the explosion of high-risk lending…In fact, Fannie and Freddie, after growing rapidly in the 1990s, largely faded from the scene during the height of the housing bubble.” But this is a zombie lie that refuses to be put to rest thanks to lawmakers like Bloomberg constantly promulgating it.

While Republican lawmakers like to continually blast President Obama over government spending, Sen. Tom Coburn (R-OK) lives for it. This summer, Coburn released a report in which he weaves an “outrageous” tale of how Washington spends one out of every 10 taxpayer dollars on “wasteful” infrastructure projects at a time when states “don’t have enough money to repair structurally deficient bridges.”

Blocking a transportation funding bill last month, Coburn pointed to what he claimed was government waste on 39 projects, including “turtle tunnels” and $100,000 to restore a giant coffee pot. But if he had actually bothered to check, he’d find that — as with the GOP’s $16 muffin myth — the claim that the government is renovating giant kitchenware is far from the truth. The AP reports:

The Lincoln Highway 200-Mile Roadside Museum in south-central Pennsylvania. It was described as receiving $300,000 in 2004 for signs, murals, colorful vintage gas pumps painted by local artists and refurbishing of a former roadside snack stand from 1927 that’s shaped like a giant coffeepot.

But no transportation aid was spent on the coffeepot’s $100,000 restoration, said Olga Herbert, executive director of the Lincoln Highway Heritage Corridor. The money was raised entirely from preservation and civic organizations and local supporters.

“We did not use any of this $300,000 award for anything to do with the coffeepot,” she said. “It’s interesting that nobody from Sen. Coburn’s office called me about this.”

Coburn also listed $500,000 in federal funds for a lighthouse renovation in Toledo, Ohio when “no transportation dollars have been authorized or awarded” for the project. Another project he cited was a landscaping project to screen a junkyard in South Carolina. Again, had he checked, he would’ve seen that “the project was canceled year ago” and “no funds were awarded.”

Even the so-called “turtle tunnels” in Florida that Senate Minority Leader Mitch McConnell (R-KY) railed against — “Don’t tell the people of Kentucky they need to finance every turtle tunnel and solar-panel company on some bureaucrat’s wish list in order to get their bridges fixed” — were not frivolous but a “significant safety issue” as turtles and wildlife were “getting flattened by cars as they tried to cross” the road. Coburn said this project “will require $6 million more to finish,” when in reality, “the project was finished in September 2010 and came in under budget at $3 million.”

The truth behind government spending, incidentally, is that President George W. Bush grossly outflanks President Obama in terms of new spending, with the Bush tax cuts gouging $1.8 billion from the budget. But rather than deal with the reality of deficit drivers like tax cuts, Republicans will continue to push these false “facts” about make-believe spending.

Bank of America has had some spectacular screw-ups when it comes to foreclosures recently, from foreclosing on an elderly couple who supposedly paid their mortgage too early to incorrectly repossessing a woman’s pet parrot. Add to the list of horrors this tale from Texas, where one homeowner, Brad Gana, had his home destroyed by Hurricane Ike, and then had the remnants foreclosed upon by Bank of America after the bank took out an insurance policy on the non-existent home and raised Gana’s mortgage payments:

Hurricane Ike destroyed dozens of homes in Seabrook. Many families are just now rebuilding, but when Brad Gana tried to pick up the pieces, he learned that Bank of America was trying to take what little he had left.

“I was shocked when they said they were foreclosing on it,” Gana told investigator Amy Davis.

Gana was working overseas when the hurricane hit, destroying his home. But even then, he said he never missed a mortgage payment. It took him days to figure out why Bank of America was foreclosing.

“It wasn’t until about 20 calls that someone said, ‘We had a homeowner’s policy on your home that you reside in, and your monthly payments have gone up,’” Gana explained. “But they never notified me that my monthly payments had gone up.”

Even after Gana’s attorney managed to halt the foreclosure, “Bank of America removed Gana’s personal effects from the property, including tools and collectibles that are now also gone.” “Bank of America is ruthless in their incompetency,” Gana said. The bank claims that it attempted to tell Gana about his higher payments, but kept having their notices returned. (Gana’s mailbox was destroyed by the storm, and he was living overseas when BofA changed his mortgage payment.)

Bank of America has been the clear laggard when it comes to getting borrowers into sustainable mortgage modifications, even foreclosing on some borrowers after they had their modifications approved. Of course, since Bank of America’s CEO Brian Moynihan has hyped the benefits of faster foreclosures, perhaps the bank doesn’t see these miscues in quite the same light as everyone else.

(HT: Harry Bradford)

Mitt Romney, his son Tagg, and Romney’s chief fundraiser, Spencer Zwick, have extensive financial and political ties to three men who allegedly participated in an $8.5 billion Ponzi scheme. A few months after the Ponzi scheme collapsed, a firm financed by Mitt Romney and run by his son and chief fundraiser partnered with the three men and created a new “wealth management business” as a subsidiary.

In an exclusive interview with ThinkProgress, Tagg Romney confirmed their business relationship, but falsely claimed that the men were cleared of any wrongdoing associated with the Ponzi scheme. Tagg Romney told ThinkProgress that his three partners collected about $15,000 from their involvement in the Ponzi scheme. Court documents obtained by ThinkProgress show that the legal proceedings are ongoing and the men made over $1.6 million selling fraudulent CDs to investors.

The Ponzi Scheme

In 2009, prosecutors announced charges against the Stanford Financial Group, which managed a portfolio of $8.5 billion, for running a “massive, ongoing fraud” against its investors. The Ponzi scheme bust was one of the largest in recent history, second only to Bernie Madoff, who perpetrated a fraud estimated to be around $17 billion. The Stanford Ponzi scheme wiped out the savings of thousands, including many American retirees across the country. In Texas, 1290 people lost their retirement savings because of the Stanford Ponzi scheme; in Louisiana, several hundred reportedly suffered the same fate.

The Romney Business Connection

Launched in 2008 by Romney’s son Tagg and a few others, including Mitt Romney’s chief fundraiser Spencer Zwick, Solamere Capital is a “fund of funds,” meaning that it primarily invests in other investment companies, like private equity groups.

Mitt Romney himself made a $10 million initial seed investment in Solamere Capital and his personal financial disclosure forms reveal that he has received between $100,000 and $1 million in returns from his stake in Solamere. Romney has come under fire for refusing to release his tax returns, which would likely reveal additional details about his financial relationship with Solamere Capital.

After news of the Ponzi scheme precipitated the collapse of Stanford in 2009, Tagg partnered with several of Stanford’s North Carolina executives to start a firm called Solamere Advisors. At least three prominent brokers who had worked for Stanford — Tim Bambauer, Deems May, and Brandon Phillips — joined Tagg to help run Solamere Advisors, a wealth management business located in Charlotte, North Carolina. “We are excited to be associated with such a highly capable group of financial advisors with a proven track record of meeting the needs of their clients throughout the Southeast,” said Tagg in a press release announcing Solamere Advisors, which borrows its the name from its parent company, Solamere Capital.

The Romney Campaign Connection

The Romney campaign and the Romney family investment company are deeply entwined. A recent Boston Globe investigation found that top donors to the Romney campaign have invested into Tagg’s firm, and that Romney’s star campaign fundraiser, Spencer Zwick, doubles as a managing partner for Solamere Capital. The Romney campaign has paid Zwick’s firm, SJZ LLC, over $2 million in fees this year alone. Mitt Romney’s brother Scott Romney is listed as a senior advisor to Solamere Capital. Read more