Rep. Kline’s bill would go a long way toward turning the law’s largest program, Title I — which provides federal funding for high-poverty elementary and secondary schools — into a block-grant program by dispensing with Title I’s “maintenance-of-effort” provision. Title I maintenance of effort requires that in a given year states and districts receiving Title I funds spend 90 percent of what they spent from nonfederal sources in the previous year. This ensures that states and school districts do not shortchange high-poverty schools by shifting federal funds toward other purposes.

Rep. Kline’s Student Success Act has other shortcomings, too, but the idea of dropping the maintenance-of-effort provision is particularly ill advised. It would be one more step advocated by House Republicans toward dismantling longstanding federal provisions that ensure equitable education for all of our children. House Republicans claim they are taking this action to help states cope with budget shortfalls and to restore states’ rights over education spending. But the results would harm our poorest children and squander federal taxpayer dollars to boot.

As Miller laid out, the arguments that the GOP use to push for dismantling Title I are essentially bunk. Essentially, the GOP wants to allow states to take money meant to aid the most disadvantaged students and slush it around into different areas, defeating the whole purpose of having Title I in the first place.

Schools around the country are already having to deal with the debilitating effects of budget cuts that followed the Great Recession. The last thing they need are fewer dollars going to the students who need them the most. But perhaps we should be thankful that the GOP has, for now, abandoned its effort to cut Title I outright, as it proposed doing last year.

Republicans, however, either missed that debunking or have willfully ignored it. With Congress nearing a deal to extend the cut through 2012, GOP leaders like Rep. Paul Ryan (R-WI), who as the House Budget Committee chairman has positioned himself as the party’s top budget and finance authority, is again pushing the false notion that the payroll tax cut will hurt Social Security, as The Hill reported today:

Ryan warned that the the move could erode the Social Security Trust Fund, which is funded by the payroll tax.

“Members on our side of the aisle are divided on this question. I personally have a problem with what happens with the Social Security trust fund. So people are divided on this; the Democrats agreed to it, I’d say I don’t really know what the number of Republicans are that agree to it, so they basically decided to bring it to the floor and let Congress work its will, and let people vote however they want to,” Ryan said during an interview with WLS Radio in Chicago.

As Jared Bernstein, the former chief economist to Vice President Biden, wrote in December, the payroll tax holiday was specifically crafted to protect Social Security by requiring the nation’s general fund to replace any lost revenues in the trust fund. The general fund, in fact, has made monthly transfers to replace the lost revenue since the holiday began, and Social Security hasn’t been touched. The proposed extension Congress is now debating contains the same protections.

And while Ryan now claims to have “a problem” with diverting funds out of the Social Security Trust Fund and worries about “what happens” if such a plan is followed, he didn’t have the same concerns last year, when he proposed a privatization plan that would divert $1.2 trillion — a whopping 1,200 times the size of the payroll tax cut extension — out of the Social Security Trust Fund, and would only restore that money over the next quarter of a century through deep benefit cuts.

But it isn’t increasing demand for oil that is driving the recent price increase. In fact, demand is the lowest it’s been since April, 2007, according to the Oil Price Information Service (OPIS). Instead, OPIS points to speculators as the party responsible for driving up prices:

Strangely, the current run-up in prices comes despite sinking demand in the U.S. “Petrol demand is as low as it’s been since April 1997,” says Tom Kloza, chief oil analyst for the Oil Price Information Service. “People are properly puzzled by the fact that we’re using less gas than we have in years, yet we’re paying more.”

Kloza believes much of the increase is due to speculative money that’s flowed into gasoline futures contracts since the beginning of the year, mostly from hedge funds and large money managers. “We’ve seen about $11 billion of speculative money come in on the long side of gas futures,” he says. “Each of the last three weeks we’ve seen a record net long position being taken.”

A multitude of experts, from academics to government agencies, have pinned the 2008 gas price spike on oil speculators. Of course, a big increase in gas prices could doom the slow but steady economic recovery.

With its investments into infrastructure projects, tax cuts, and aid to states, the stimulus was designed to curb the effects of the recession and turn the economy back around. Though Republicans have criticized the effort and subsequent attempts to stimulate the economy as “failed policies,” early analysis has shown that the stimulus saved and created millions of jobs and pulled the American economy away from the precipice of collapse.

In a new analysis, Center for American Progress Director for Tax and Budget Policy Michael Linden examined the American economy in three parts — before the recession, during the recession, and after the stimulus passed — to find out if the stimulus did, indeed, work. As the video below shows, there is no doubt that the stimulus turned the economy around and put it on the path to recovery:

• President Obama met for the first time yesterday with Xi Jinping, widely expected to be the next leader of China. [Wall Street Journal]

• Congressional negotiators say they’ve struck a tentative deal to extend the soon-to-expire payroll tax cut, as well as unemployment benefits. [New York Times]

• The Obama administration is pushing a new $5 billion plan to pay teachers according to performance, rather than seniority. [Bloomberg]

• The Eurozone’s economy shrank by 0.3 percent last quarter, putting it one more bad quarter away from recession. [Washington Post]

• A Goldman Sachs analyst is under federal investigation for leaking inside information to hedge funds. [Reuters]

• California’s economy should see a slight improvement this year, according to a report from the Los Angeles County Economic Development Corporation. [Reuters]

• For the first time since 2007, a full funding bill for the Federal Aviation Administration has been signed into law. [The Hill]

• What New York Knicks phenom Jeremy Lin shows about U.S. competitiveness. [Businessweek]

Paul Volcker

The industry threw “one last roundhouse punch at the law,” and most of the letters from across the financial industry were negative. Among the rule’s most vocal opponents: JPMorgan Chase CEO Jaime Dimon and the U.S. Chamber of Commerce, according to the Wall Street Journal:

Opponents minced few words. J.P. Morgan Chase & Co. said the proposed rule “appears to take the view that banking entities, their customers, and the economy must pay almost any price in order to ensure absolute certainty that there can never be an instance of prohibited proprietary trading.” [...]

“In short, the American engine of economic growth will be deprived of the fuel needed to operate,” the U.S. Chamber of Commerce wrote.

What the industry doesn’t mention in its effort to weaken the rule is just how successful it has been in watering it down already. With the help of Massachusetts Sen. Scott Brown (R), the industry weakened the rule even before it became law, and it has spent the last year lobbying to make it even weaker. By the time it was unveiled, it was so weak that former Fed Chair Paul Volcker, for whom it is named, said he didn’t like it.

And while opponents of the law continue to argue that it will cost the nation’s largest banks substantial sums of money, that is precisely how the law aims to create the long-term economic stability that didn’t exist prior to the financial crisis. As Reuters’ Felix Salmon wrote today, the proprietary trading prohibited by a strong Volcker rule “doesn’t just disappear.” Instead, it moves to hedge funds, brokers, and other “small-enough-to-fail institutions” that aren’t backed by taxpayers:

In other words, there is a list of institutions which will be harmed by the Volcker Rule. Here it is: JP Morgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley. These institutions should get smaller. These institutions should be less profitable. There’s no reason to believe that when that happens, the economy as a whole will suffer.

Like with the Dodd-Frank law as a whole, banks and their lobbyists aren’t satisfied with watering down the Volcker rule before it passed. The industry continues to push back against regulations aimed at preventing the sort of crisis that drove the country into a deep recession four years ago, all under the false premise that what is bad for Wall Street’s balance sheet has to be bad for the American economy as a whole.

But you might not know that by scanning the Wall Street Journal’s new budget analysis. According to one graphic, the Journal suggests that military spending will decline over the next few years:

While it may be true that military spending will decline as a percentage of GDP, framing the military budget in these terms hides the fact that defense spending will increase in the coming years. Why? As the aforementioned CAP report explains, “Because these ‘cuts’ come from projected increases in defense spending.” As such, “the baseline defense budget will fall by just 1 percent, or $5 billion, next year and resume its growth thereafter.” Here is what a chart of projected military spending actually looks like:

Korb, Rothman and Hoffman offer a number of “next steps” the Pentagon can take to trim more fat, including reducing F-35 procurement, cancelling the V-22 Osprey, shrinking the size of the nuclear arsenal and reducing the size of the carrier fleet from nine to eleven.

(Photo credit: Samuel M. Simpkins / The Tennessean)

“I feel like a weight has been lifted off my shoulders,” Bailey said. “I love my home and my community and I am so blessed to be able to stay here. I am thankful for the support of my neighbors and the nation.”

The terms of the agreement from her mortgage-holder, JPMorgan Chase, are sealed, but previous settlement attempts involved a reverse mortgage that would let the new lender sell her home when she dies.

Occupy Nashville took up Bailey’s cause last month and received national attention for their efforts. Bailey was seeking to refinance her mortgage with JP Morgan Chase which would have allowed her to remain in her home for free until she dies, but the bank initially refused.

A petition at Change.org collected over 80,000 signatures, and prominent civil rights activists like Cornel West and Gary Flowers, the Executive Director of the Black Leadership Forum voiced their support for Bailey as well.

Today, to celebrate Valentine’s Day, activists in New York City will target Bank of America, citing the bank’s shoddy consumer record regarding its mortgage lending practices and its support for hazardous environmental practices like mountaintop removal coal mining, according to a press release published at the Paramus Post:

Bank of America loves profits more than people. We, the 99%, want out of this abusive relationship. Bank of America has foreclosed on more homes than any other bank in the United States. On February 14th, Valentine’s Day, housing and environmental activists will break up with Bank of America.

According to the release, activists organized by Mountain Justice, an environmental group, and various groups associated with Occupy Wall Street will gather at New York’s Washington Square this afternoon before marching to a local Bank of America branch and delivering thousands of blue valentines. Bank of America is a “grave threat to US financial stability,” the release says, and it also has “an ugly relationship with the planet: bankrupting the ecosystem with their investments in the coal industry–lending billions of dollars to companies seeking to build new coal-fired power plants.”

Bank of America has been the target of protests over its financial and foreclosure practices, ranging from charging customers fees to withdraw unemployment benefits, foreclosing on homes because of clerical errors, and perpetuating fraudulent foreclosure practices. The bank, meanwhile, has been targeted repeatedly by environmental activists for its connections to Big Coal.

According to one consulting firm, Bank of America is the most susceptible bank to bank transfer protests and could lose up to 10 percent of its customers and $42 billion in customer deposits.

Romney has often played up those ties on the campaign trail — he won Michigan’s primary in 2008 — and attempted to use them to his advantage three years ago when he penned a New York Times editorial titled, “Let Detroit Go Bankrupt.” The editorial was a response to President Obama’s plan to rescue the American auto industry, and as evidence has emerged that Obama’s rescue plan worked, Romney had attempted to claim that he came up with the idea first.

Ahead of the primary, though, Romney published another editorial on the rescue, this time in the Detroit News, in which he renewed the “Let Detroit Go Bankrupt” call he first made in 2009:

My view at the time — and I set it out plainly in an op-ed in the New York Times — was that “the American auto industry is vital to our national interest as an employer and as a hub for manufacturing. Instead of a bailout, I favored “managed bankruptcy” as the way forward.

Managed bankruptcy may sound like a death knell. But in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation. [...]

By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.

In the editorial, Romney, whose former company profited from a government bailout, called on the government to sell its shares in GM and return the profits to taxpayers. In other words, Romney is fine with destroying the company when it isn’t succeeding, but then wants to seize its profits if it turns around.

Meanwhile, he continues to ignore the success of the rescue plan he criticizes. Chrysler posted its first profit more than a decade in last year and expects those profits to continue growing in 2012. It has added 9,400 jobs since its rescue and plans to add 1,600 more at a plant in Illinois this year, and the success of Chrysler and General Motors has helped American automakers control more than half of the industry’s market share. The industry has hired enough workers to make up for all those laid off during the recession, and American and foreign automakers plan to add 167,000 jobs at American plants this year.

Romney isn’t just ignoring facts — he’s also ignoring a Republican who is close to the situation. Michigan Gov. Rick Snyder (R) has warned candidates against criticizing the bailout and touted its success. “I would have had some differences on how they did it, but I’m not going to second-guess it,” Snyder told the New York Times. “The more important thing is the results. And the auto industry is doing very well today.”

Convicted Ponzi-Schemer Bernard Madoff

A Koch spokeswoman disputed the demand, arguing, “The Koch entity involved made an investment in an entirely separate fund. That Koch entity no longer exists and its investment was redeemed in 2005, long before anyone knew of Madoff’s fraud.”

Even the Rupert Murdoch-owned WSJ noted the amusing irony in their lead:

Koch Industries Inc., whose billionaire owners are funding an ad campaign (via an advocacy group they support) criticizing the Obama administration’s support of bankrupt solar company Solyndra LLC, faces a call to give back money received from Bernard Madoff’s Ponzi scheme.

Even if the Kochs lose this case though, $21.5 million would hardly make a dent in the billionaires’ empire or, one imagines, their extensive giving to right-wing Republican causes.

Then, yesterday, three Republican senators ignored Inhofe and Boxer’s calls to keep the bill free from controversy and attempted to attach an amendment mandating the construction of the Keystone XL pipeline, which Democrats warned could “kill the bill.” Now, Sen. Rand Paul (R) has put a hold on the bill until leadership promises him a vote on an amendment that would suspend foreign aid to Egypt, Politico reports:

Paul wants to offer an amendment to the Senate transportation bill that would cut off aid to Egypt if nongovernmental employees working with the U.S. government are detained or held in the country, as Transportation Secretary Ray LaHood’s son, Sam, currently is. And unless the senator decides to offer consent to move forward to the transportation bill, the Senate would be stuck in a 30-hour holding pattern.

“We’re not going to grant back our 30 hours unless we get a discussion on Egypt. We’re not asking for a lot of time; we just want a discussion and a vote on whether or not we should continue sending money to Egypt,” Paul told POLITICO.

Paul said he is taking action now because he fears his amendment won’t be allowed if he waits until debate on the transportation bill begins.

Noting the urgency of the transportation bill, Boxer and Inhofe agreed not to attach amendments or provisions that could be controversial. It contains no taxes and none of the other traditionally controversial measures included in such bills.

“2.8 million jobs hang in the balance” of the bill’s passage before the current transportation package expires, Boxer told Politico. “And we have obstruction from our friends on the Republican side.”

• Senate Minority Leader Mitch McConnell (R-KY) declared President Obama’s budget “dead on arrival” in the Senate. [The Hill]

• Moody’s downgraded the credit ratings of six European countries, including Italy, Portugal, and Spain, and changed its outlook on the United Kingdom and France to “negative.” [CNN Money]

• House Republicans will offer a proposal to extend the payroll tax cut without offsets, backing down from previous demands. [New York Times]

• The federal government may reach its debt limit right before the 2012 elections. [Huffington Post]

• The Federal Housing Authority will exhaust its returns by the end of 2012, according to budget projections released Monday, but funds from the mortgage settlement could keep it from needing money from Treasury. [Wall Street Journal]

• The Consumer Financial Protection Bureau outlined its first plans to regulate mortgage servicers Monday. [Washington Post]

• The financial industry threw “one last roundhouse punch” at the Volcker Rule yesterday, just before the deadline for changes to it. [Wall Street Journal]

• The former chairman of the Financial Crisis Inquiry Commission has stepped down from his position at a group seeking to profit off of distressed mortgages. [Reuters]

In Britain, a large package of budget cuts and austerity measures which rolled out in 2010 has not unleashed the proverbial job creators in the private market. Instead, the country is still shackled with an economic growth trend that’s even worse that what it suffered in the aftermath of the Great Depression.

In the Eurozone as a whole, the European Central Bank and other relevant authorities have so far insisted on massive austerity measures from struggling countries in exchange for fiscal aid. Here, too, the result has not been a revitalized economy but a continuance of dismal growth rates.

Here at home, the effect of 2009′s recovery package and the tax deal in December 2010 was more than offset by cuts in state budgets. By the end of 2009, the combined budgets of the federal and state governments had entered a period of fiscal contraction from which they have yet to emerge.

The portions of Obama’s economic policy which actually passed simply made the economic hole created by state-level cuts less deep. Which was a valuable and necessary function, but insufficient to actually boost the economy back to healthy growth. Contrary to Republicans’ claim that Obama’s first two years were a period of unbound Keynesian experimentation, austerity is the budgetary policy reality which has accompanied America’s stagnant economic growth.

This matters because, now that the wars in Afghanistan and Iraq are winding down, the Bush tax cuts and the lingering effects of the recession remain the two primary drivers of the U.S. federal deficit. While the Republicans insist on not only maintaining all the tax cuts, but blowing an even larger hole in our revenue with added tax relief for the wealthy, Obama has proposed raising new revenue by allowing the Bush cuts for the top income rates to expire and by eliminating other injustices in the code which go to the benefit of the wealthiest Americans.

Even more importantly, because our tax system pulls in a percentage of the country’s overall wealth production, tax revenues will continue to underperform as long as our GDP production remains below capacity. The perverse irony of austerity as an immediate response to economic recession is that it drives down demand and GDP, thus driving down revenues and deepening the deficit hole it seeks to mend. In the opposite direction, a sudden positive jump in GDP could bring our economy back into line with its pre-recession trend and bring tax revenues back up without any change in tax rates or policy at all. The policy history in Britain, Europe, and here in America since the end of 2008 shows the Republicans’ austerity fixation won’t deliver this reinvigoration. But a recommitment by the government to boost demand could do the trick.

Obama’s budget, while imperfect, aims for the proper balance and the proper order of repairs: Investment now in jobs, infrastructure, state aid, extensions for the payroll tax cut and unemployment insurance, and other immediate boosts to demand, followed by longer-term deficit cutting once the economy is again firing on all cylinders. If the GOP had not been using every political tool at their disposal to undermine this approach during the last four years, the president could probably have done considerably more.

On a local NBC affiliate in Georgia, Romney said that he supported the measure:

Jeff Hullinger: [Lawmakers] have bantered about the proposition that welfare recipients should be drug tested. How do you feel about that?

Mitt Romney: Well my own view is, it’s a great idea. People who are receiving welfare benefits, government benefits, we should make sure they’re not using those benefits to pay for drugs. I think it’s an excellent idea.

Watch it:

Romney’s support for blindly drug-testing welfare recipients dates back at least two decades, to his failed 1994 campaign for the US Senate. Civil rights advocates, meanwhile, have been quick to challenge the constitutionality of drug testing bills that were passed last year, and courts blocked similar bills from being implemented in Florida and Michigan.

Rather than saving states money or ensuring taxpayer dollars aren’t used to purchase drugs, mandatory testing laws have succeeded only in proving that welfare recipients are actually less likely to use drugs than the public at large, and implementing laws requiring drug testing is costing states like Florida money they don’t have.

The ACLU of Florida has estimated that the state saved just over $40,000 between July and October by denying residents welfare support based on their failure to pass a drug test, while it spent more than $245,000 in reimbursements for the cost of the exam in the same time period.

President Obama submitted his budget for fiscal year 2013 to Congress this morning, with the explicit goal of “rebuild(ing) our economy and strengthen(ing) the middle class.” The $3.8 trillion budget includes $5 million to help individual states launch paid leave programs – similar to those in California and New Jersey – that allow workers to take paid time off from work to provide care to a new child or ailing family member.

While some have argued that government intervention into work-family policies will only increase the cost of employing women, and that the marketplace will respond by voluntarily providing policies in order to retain valuable employees, the evidence does not support these arguments. At present, there are huge gaps in access to maternity leave for working women. According to the U.S. Census Bureau, between 2006 and 2008 about two-thirds of mothers with a bachelor’s degree or higher received paid maternity leave, but only 18.5 percent of those with less than a high school degree did. New mothers who have access to paid maternity leave are more likely to return to their previous employer, and 97.6 percent of those who return to the same employer do so at their previous pay level or higher. When women have to change employers after giving birth, often times because they are forced to quit or are fired in the absence of paid maternity leave, more than 30 percent experience a drop in pay.

New research on California’s Family Disability Insurance program illustrates how offering paid leave to women after childbirth helps individual workers and the economy as a whole. California’s program was passed in 2002, and became available to workers in July of 2004. Paid leave is administered through the State Disability Insurance program, and is funded through payroll taxes on employees. Eligible workers in California who take leave receive 55 percent of their regular pay, up to a maximum of $928 per week, for up to 6 weeks to bond with a new child or to care for a seriously ill family member.

California’s program has increased both job retention and the number of hours worked by employed mothers. More than 95 percent of workers who took leave in 2009 and 2010 returned to work; 80 percent returned to the same employer. Workers who made $20 an hour, meanwhile, returned to the same employer 83 percent of the time. And according to researchers from the University of Virginia and Columbia University, paid leave increased hours worked by mothers six to nine percent.

Working mothers are often the ones keeping their families afloat. The typical working wife now brings home 42.2 percent of her family’s earnings, and while married families with a male breadwinner and a female homemaker haven’t seen incomes rise since the 1970s (when adjusted for inflation), families with a working wife have seen incomes grow by 30 percent. Families where wives work, work longer hours, and receive higher pay are thus more likely to maintain their position on the income ladder or move up.

If every woman in America had access to paid leave when she had a baby, estimates are that this would increase employment by approximately 40,000 new mothers each year. Imagine how many families that would help raise up into the middle class, or secure their foothold there. If we are serious about repairing the economy, we must remember that a rebuilding a strong middle class is not just about helping the unemployed find work, but also about helping workers keep the jobs they already have. Paid family leave is one policy that can help us meet those goals.