Last week, Sen. Jim DeMint (R-SC) sent out a recruitment call for “new Republicans,” confirming that he sees “little use for a big-tent approach for his party.” As South Carolina’s The State put it, DeMint is setting himself up as a kingmaker, wading into national races to endorse far-right candidates.

And one of the issues about which DeMint feels very strongly is Social Security. In an interview with Bloomberg News’ Al Hunt, DeMint blasted Social Security as “socialistic,” and advocated reviving President George Bush’s Social Security privatization scheme:

DeMint considers Social Security a “socialistic” measure and blasts the American Association of Retired Persons for promulgating “socialist solutions”…In the interview, he talks of reviving President George W. Bush’s failed plan to partially privatize Social Security by having workers put a small percentage of the current levy in a personal savings account.

As CNN Money’s Allan Sloan wrote back in January, “someday, Social Security privatization will come back into vogue. When that happens, I’ve got two words that will remind you why it’s a bad idea: Remember 2008.” It’s quite shocking that we’re not even through 2009 yet, and 2008, at least for DeMint, is already forgotten.

But let’s review. As a Center for American Progress Action Fund report found, under a Bush-style privatization plan, a October 2008 retiree would have lost $26,000 in the market plunge. If the U.S. stock market had behaved like the Japanese market during the duration of that retiree’s work life, “a private account would have experienced sharp negative returns, losing $70,000 — an effective -3.3 percent net annual rate of return.” And this doesn’t take into account the full plunge of the stock market, which dipped below 7,000 in March 2009.

As the Cunning Realist pointed out, failed investment banks Bear Stearns and Lehman Brothers were both “blue chips, the sort of companies that proponents of private accounts insisted any new system would be limited to.” Can you imagine the mess that would have occurred — and the leverage those companies would have held — had not only the financial system’s health, but the retirement accounts of untold seniors, been tied up in them?

The Center for Economic and Policy Research found that, “as a result of the collapse of the housing bubble, the vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security.” Privatization opponents would have had seniors sacrifice that safety net as well.

Cross-posted on ThinkProgress.

Today, the House of Representatives passed H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, by a vote of 223-202. The bill overhauls the nation’s financial regulatory system by creating a new Consumer Financial Protection Agency (CFPA), providing a dissolution mechanism for dismantling failed financial firms (without using taxpayer money), and bringing some transparency to the derivatives market.

“This legislation brings us another important step closer to necessary, comprehensive financial reform that will create clear rules of the road, consistent and systematic enforcement of those rules, and a stronger, more stable financial system with better protections for consumers and investors,” said President Barack Obama.

Regulatory reform has been the focus of an intense lobbying campaign on the part of the financial services industry, which has spent $344 million (and some time huddling with Republicans) trying to figure out ways to kill it. And before the final bill came to a vote, conservative Democrat Rep. Walter Minnick (ID) proposed an amendment removing the CFPA and replacing it with a consumer protection council composed of 12 existing bank regulators.

Rep. Barney Frank (D-MA) called the provision “the bureaucratic version of the Christmas song,” but still, it was only defeated 223-208, with 33 Democrats voting in favor of dumping the CFPA. Also, an amendment that would have added a provision to the bill allowing bankruptcy judges to cram-down mortgage payments for troubled homeowners was defeated 241-188, with 71 Democrats voting against.

Overall, 27 Democrats (and every Republican) voted against final passage of the bill, siding with the financial services industry and Wall Street banks against consumers and regular investors. After the jump is a full list of Democrats who either voted against final passage or in favor of Minnick’s amendment: Read more

Yesterday, the Treasury Department released its latest data on the Home Affordable Modification Program (HAMP), which has come under significant fire due to the unwillingness or inability of mortgage servicers to get enough eligible borrowers into the program. The new report isn’t making things look any better.

According to Treasury, about 728,000 borrowers have been enrolled in the program, up from 650,000 last month. But of these, just 4 percent (31,382) have made their way from the three-month trial stage of the program to a permanent modification.

Earlier this week, Bank of America and JP Morgan Chase went to Capitol Hill, where they suggested that borrowers themselves were responsible for HAMP’s lack of progress, because they can’t seem to get their documents together and filed. BofA claimed that more than three-fourths of the borrowers eligible for a permanent modification have not gotten their documents in. “It is unclear why this has happened to such a high degree,” the bank said.

Even if we accept BofA’s numbers at face value — and as ProPublica’s Paul Kiel pointed out, “the data from servicers should be viewed with skepticism” — then how does BofA explain that just 98 borrowers have been given permanent modifications. That’s less than .1 percent of the homeowners who received trials. Even if only 15,000 borrowers have gotten their documents filed correctly, why have fewer than 100 received a permanent modification?

For comparison’s sake, JP Morgan Chase, with a portfolio half the size of BofA’s, has 4,302 borrowers with permanent modifications. Are JP Morgan’s clients simply better at getting their documents together?

For all of Bank of America’s whining about irresponsible homeowners, it is clearly failing compared to some of the other servicers. BofA is likely dragging its feet because there is no consequence for failing to enroll borrowers in the program, and because it has been pushing its own, lousier, private modification program. Read more

Yesterday, Rep. Spencer Bachus (R-AL) appeared on C-Span and laid out his main reason for opposing H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, which is the regulatory reform legislation that the House has begun to debate. Evidently, Bachus has a problem with the proposal to implement a “too big to fail” tax on financial giants, which would build a fund that would be tapped in the event that a large financial institution fails and needs to be unwound.

This fund (officially known as the Systemic Dissolution Fund) is meant to ensure that taxpayers stay out of the bailout business, by providing a pool of money — put up by the Wall Street behemoths themselves — that would be used to facilitate the orderly dismantling of a failed institution. This would correct for some of the problems that arose when AIG and Citigroup got into trouble (and to head off the sort of chaotic collapse exhibited by Lehman Brothers).

Republicans though, made it clear on the House floor that their opposition will be based on calling the fund “permanent TARP” and a “permanent bailout fund,” while falsely claiming that taxpayers and non-financial companies will have to pay for it. Watch a compilation:

Unless the “schoolteachers in Mesquite, Texas” that Rep. Jeb Hensarling (R-TX) referenced have more than $50 billion in assets and have taken to hawking credit default swaps in the cafeteria, this tax will not affect them. And as far as the levy hitting “small businesses,” unless Goldman Sachs is now a small business in the eyes of the GOP, there is no truth to this.

Instead of enshrining bailouts, the bill quite clearly stipulates on page 397 that the dissolution fund can only be used “to facilitate and provide for the orderly and complete dissolution of any failed financial company or companies that pose a systemic threat to the financial markets or economy.” The fund cannot be employed to turn companies into zombies like Citigroup, which is wise, as Treasury is still struggling with how to dispose of Citi.

As Rep. Ed Perlmutter (D-CO) said on the floor in response to the GOP’s rhetoric, “there is no bailout. As much as my friends on the other side of the aisle would like to be on message and continue to repeat that, there is no bailout.” Though they dress it up in populist language, the GOP is endorsing the regulatory approach that led to AIG’s repeated infusions of taxpayer money and the market shock that was felt in the wake of Lehman Brothers’ collapse. But what more should we expect from the party that is huddling with financial services lobbyists to decide how to best kill regulatory reform?

Last night, after a dust-up between the New Democrats and House Financial Services Chairman Barney Frank (D-MA), the House of Representatives agreed on the rules for debate of H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009. The 253-177 vote (with all Republicans voting against) frees the bill up to come to the floor.

One results of the New Dems’ obstinance is the addition to the bill of a provision that would “broaden proposed powers of the Office of the Comptroller of the Currency to preempt state consumer protection laws for national banks” by lowering the threshold for preemption and allowing the OCC to apply its previous preemption decisions in new cases (instead of on a literal case-by-case basis). This is a troubling development.

The second concession wrung by the New Dems is to bring an amendment scrapping the proposed Consumer Financial Protection Agency (CFPA) to the floor. The CFPA is one of the most important facets of regulatory reform, and has been the target of an intense lobbying campaign from the Chamber of Commerce and the financial services industry, in cooperation with Republicans.

In a preview of what debate over the CFPA is liable to look like, Reps. Don Manzullo (R-IL) and Judy Biggert (R-IL) took to the House floor last night to claim that the CFPA’s powers will enable it to regulate churches, doctors, people writing checks for their mothers, and cockroach inspectors. Watch a compilation:

This strategy takes the Chamber of Commerce’s already ludicrous campaign claiming that the CFPA would regulate bakeries and grocery stores a step further. Of course, this effort is seriously undermined by Sec. 4205 of the actual legislation (pg. 760-762) which clearly lays out the “exclusion for merchants, retailers, and sellers of nonfinancial services”:

And thanks to the deal struck by the New Democrats, which called into question the necessity of the CFPA, we can look forward to much more of this nonsensical rhetoric as debate progresses.

Yesterday, the House Financial Services Committee held a hearing to examine problems with the Home Affordable Modification Program (HAMP), which is the cornerstone of the administration’s Making Home Affordable program. HAMP has sputtered since its inception, with trial mortgage modifications not even keeping up with new foreclosure starts.

One of the main factors holding back HAMP is that servicers have been dragging their feet in getting eligible borrowers into the program (partially because there is no disincentive to gumming things up), and then failing to turn trial modifications into permanent ones. To try and get to the bottom of things, the committee brought representatives of Bank of America and JP Morgan Chase in to testify, and both banks claimed that, actually, the problem is borrowers can’t get their documents together:

JP Morgan Chase: The focus of our immediate attention is finding ways to assist the 51 borrowers out of 100 that are missing some or all of the documentation required under HAMP or where the documents are incomplete, not current enough or otherwise not acceptable under the HAMP rules.

Bank of America: Bank of America has approximately 65,000 customers who have made more than three trial modification payments on time and their modifications are set to expire on December 31, 2009. Unfortunately, 50,000 have either not submitted some or all of the required documents or have submitted all their required documents, but the documents reveal discrepancies that require an additional response from the customer. It is unclear why this has happened to such a high degree.

As ProPublica’s Paul Kiel pointed out, “the data from servicers should be viewed with skepticism, given another clear trend: Banks and other mortgage servicers are themselves not very good at managing documents.” Indeed, stories abound about workers submitting their documents, only to be run in circles by the servicers and asked to resubmit.

But there’s not just anecdotal evidence showing that some banks are having trouble navigating the program. After all, there are very large differences between different servicers in the program, with some, like Saxon and CitiMortgage, getting upwards of 40 percent of eligible borrowers into the program, while others struggle.

Bank of America has been participating in HAMP since April, but has trial modifications on just 14 percent of its eligible mortgages. Wachovia has trials on only 3 percent. US Bank, meanwhile, signed up for the program in September, yet has 15 percent of its borrowers in trial modifications.

Are Saxon’s, US Bank’s, and Citi’s borrowers just a lot more responsible than BofA’s or Wachovia’s? I find that hard to believe. BofA’s dumping the blame onto borrowers for its shoddy stats (though it did cite “shortcomings in document maintenance” as an exacerbating cause) is particularly galling, because, as Andrew Jakabovics and I reported, the bank is siphoning potentially HAMP-eligible borrowers into its own private modification program, in violation of its contract with Treasury.

Of course, there are bound to be borrowers who can’t get their documents together and therefore fall out of the program. But it’s completely irresponsible for the banks to pass the buck onto borrowers, when they can’t get their own houses in order. And this could all be remedied by the implementation of mandatory mediation programs, which require a servicer to actually meet with a borrower before finalizing a foreclosure. Oftentimes, mediation sessions result in a borrower previously thought to be ineligible for HAMP discovering that an administrative error has been made, and that he or she does in fact qualify.

Today, the House of Representatives is expected to begin debate on H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009, which is the House’s effort to reform and update the country’s financial regulations. Prior to the bill even coming to the floor, Republicans are joining with the financial services industry in an attempt to scuttle it.

As Roll Call reported, “in a call to arms, House Republican leaders met with more than 100 lobbyists…on Tuesday afternoon to try to fight back against financial regulatory overhaul legislation.” According to a lobbyist who attended the meeting, “the message was [House Financial Services Chairman Barney] Frank and the Democratic majority are ruining America, ruining capitalism, and stand up for yourselves…[The lobbyists] said, ‘Look, you all oppose this bill, but only a few of you have come out publicly.’”

And the message seems to have taken hold, as Rep. Spencer Bachus (R-AL), the ranking member on the House Financial Services Committee, appeared on C-Span this morning to criticize H.R. 4173 as a job-killing assault on American freedom. He made it clear that the GOP is out to defend big banks as, when asked what Republicans would do differently, the first thing that came to Bachus’ mind was ditching the Democratic proposal to levy a “too big to fail” tax on giant financial institutions, in order to build a fund that would be used to unwind failing financial companies without taxpayer dollars:

The first thing, we don’t impose a tax. The Democratic plan imposes a bailout tax. It’s a $150 billion tax on large corporations in this country. $150 billion out of our economy right now is going to cost jobs. We don’t tax corporations in the event that other corporations, their competitors fail.

Watch it:

Notice Bachus’ sneaky substitution of “corporation” for “financial institution,” to make it seem as if lots of businesses would be subject to the tax. But let’s be clear: Google, Home Depot, and Boeing are not going to be paying into what is officially known as the Systemic Dissolution Fund. According to the legislative language, the levy is restricted to financial institutions with more than $50 billion in assets and hedge funds with more than $10 billion in assets.

The point of building up this fund is to ensure that, when a large, interconnected financial institution does go under, there is a pot of money — provided by the financial industry itself — with which to unwind the failing institution in an orderly way. As Frank has said, the point of this provision is to create a “death panel for banks,” ensuring that sick institutions don’t cling to life at taxpayer expense. But instead, Bachus and the GOP want to keep the big banks from paying for the cost of their failure.

With the House’s financial regulatory reform effort set to come to the floor this week, attempts to derail the proposed Consumer Financial Protection Agency (CFPA) are once again picking up steam. For instance, the Chamber of Commerce has unveiled a new ad campaign attacking the CFPA, and Reuters reports that the Chamber “plans to spend ‘well more’ than its original estimate of $2 million to quash plans to create the new agency.”

Instead of the CFPA, the Chamber would like to see a consumer protection council, composed of the Federal Trade Commissioner and the heads of the already existing federal bank regulators. In short, the Chamber wants the same people who blew their consumer protection responsibilities in the buildup to the financial crisis to have a second chance at it.

But some in Congress are not as skeptical of this approach. One of the more than fifty proposed amendments to the regulatory reform effort comes from Rep. Walter Minnick (D-ID), who is embracing the Chamber’s model:

One key amendment to scrap the CFPA was proposed by moderate Democrats and led by Walt Minnick, a representative from Idaho. Mr Minnick, who has the support of Republicans, wants to replace the CFPA with a looser council of existing regulators.

According to National Journal, Minnick “held off offering the language in committee after [House Financial Services Chairman Barney] Frank expressed strong opposition.” This was for good reason, as we’ve already tried allowing the bank regulators to be responsible for both consumer protection and bank regulation. It certainly didn’t work. And making them sit together in a room once in a while as a “council” won’t remove the inherent tension between bank profits and consumer protection (as ripping off consumers is often highly profitable).

Minnick is not the only Democrat trying to bring an amendment to the floor that was held off in committee. As Mike Elk reported, Rep. Melissa Bean’s (D-IL) preemption amendment — which would prevent states from enacting consumer protections that go beyond the federal minimum — has also resurfaced, after she withdrew it from consideration during committee deliberations (partially due to her having to miss a committee meeting to handle a family illness). Hopefully, both of these ideas will finally meet their well-deserved ends, if they come up for a vote on the floor.

Last weekend, the Washington Post reported that one-quarter of the borrowers enrolled in the Home Affordable Modification Program (HAMP) are behind on their payments, providing just one more dent in the armor of the administration’s signature foreclosure prevention plan. HAMP is suffering on multiple fronts, from banks dragging their feet and outright violating their contract with Treasury, to design flaws preventing all of a borrower’s debts from being taken into account when the modification is designed.

To fix this, House Democrats are looking (yet again) to revive cram-down, a measure which would allow bankruptcy judges to rework the terms of a mortgage. Cram-down was part of the administration’s original vision for HAMP, but the measure went down to defeat in the Senate, after an intense lobbying campaign by the financial services industry.

Democrats are planning to attach cram-down as an amendment to Rep. Barney Frank’s (D-MA) regulatory reform bill (with Frank’s approval), which is set to come to the House floor sometime this week. If the measure passes (this time, with the added wrinkle that the borrower must “convince the judge that he or she has made sufficient efforts to complete a loan modification” through HAMP), it will mark the third time that the House has passed cram-down.

Meanwhile, during a hearing today examining HAMP’s flaws, Rep. Jeb Hensarling (R-TX) explained that the best way to prevent foreclosures is to create jobs, and the only way to do that is to block and obstruct health care reform, cap-and-trade, and regulatory reform:

That is a plan. That is a recipe to create jobs in our economy…And if you create jobs then people can keep their homes. Nothing short of that will work.

Watch it:

This sounds remarkably like anti-tax crusader Grover Norquist’s bizarre foreclosure prevention plan, which hinged on Congressional vacations. But contrary to their assertions, there are still plenty of steps that could be taken, including mandatory mediation before foreclosures are finalized or authorizing housing counselors to approve HAMP modifications.

And while cram-down’s chances of passing the Senate appear no brighter than last time, it still would be a good way to encourage banks to make modifications. As Prof. Jean Braucher wrote in a new study, “bankruptcy modification is administratively efficient in that the bankruptcy courts are already operating and available immediately. Also, servicers, with their perverse incentives, and junior lien holders are removed as obstacles. Furthermore, bankruptcy is not an appealing choice to any borrower and is unlikely to draw borrowers who can afford their payments.”

Our guest blogger is Luke Reidenbach, Special Assistant for Economic Policy at the Center for American Progress Action Fund.

Last week, the Republican National Committee used positive labor market developments — such as the news that payrolls in the United States remained virtually unchanged in November and the unemployment rate decreased to 10 percent — as an opportunity to criticize the policies that have pulled the country’s economy back from the brink. Additionally, some commentators misread the new data and argued for ending economic stimulus efforts early, like CNBC’s Trish Regan.

The global economy is slowly on the rebound, but it remains crucial that governments maintain policies that protect workers, both in developed and developing nations. Indeed, the International Labor Organization confirms this conclusion with its new World of Work report, released yesterday. The ILO argues that fiscal stimulus around the world was effective, crucial for recovery, and needs to continue as the world economy returns from the brink:

The Report shows that badly shaped spending cuts now would hit many existing jobs which were saved thanks to earlier stimulus measures but are still at risk. Such an early exit would also postpone employment recovery and would aggravate the risk of long-term joblessness, labour market exclusion and employment informality.

The ILO highlights just how precarious global labor market conditions are. While public spending by nations has prevented 7.2 percent of the world’s workforce from losing their jobs, almost 43 million workers around the world are still at risk of exclusion from the labor market. Terminating fiscal stimulus packages before they have run their due course would exacerbate this problem, putting workers at serious risk and potentially destabilizing the fragile recovery.

Furthermore, continuing policies that help workers around the world during recovery is just good economic policy. Today, more than ever before, global markets are deeply connected. Policies to help workers, here at home and abroad, get back on their feet will help boost global aggregate demand. Using the crisis as an opportunity to build and strengthen social protection and labor market institutions will contribute to the creation of a global middle class that has the purchasing power to help sustain global economic growth and alleviate some of the pressure on the American consumer.

It isn’t just the ILO that understands both the value of and need for keeping stimulus measures in place. In early November, Finance Ministers and Central Bank Governors from the G20 supported continued fiscal stimulus, agreeing to “maintain support for the recovery until it is assured.” The administration understands this as well. Treasury Secretary Timothy Geithner has reiterated that while the economy is healing, the administration will not end the stimulus prematurely.

This is the right choice, and throughout the world there is evidence of both an economic recovery and the need for a continued role of public policy to steer the global economy in the correct direction.

Today, House Minority Whip Eric Cantor (R-VA) appeared at the Economist’s World in 2010 conference (attended by ThinkProgress), where he took exception to NBC’s David Gregory characterizing Republicans as “not really a party of ideas, because they don’t want to be.” Cantor claimed that it’s actually the media’s fault that no one hears about Republican ideas, because “it’s not as sexy of a story to cover our ideas right now.” But when the Economist’s Daniel Franklin gave Cantor an opportunity to present his big idea for job creation, Cantor couldn’t come through:

FRANKLIN: What is the big idea? “Jobs” is not an idea.

CANTOR: The big idea is to get, to get, to produce an environment where we can have job creation again. And see, that’s where the Obama administration’s agenda so clearly disadvantages the Democrats in this upcoming election in eleven months and advantages us.

Watch it:

If Cantor’s goal is “to produce an environment where we can have job creation again,” shouldn’t he have supported the American Recovery and Reinvestment Act (i.e the economic stimulus), which has boosted GDP growth and lending to small businesses, while cutting taxes for workers, thereby boosting demand? And shouldn’t he be supporting further efforts in Congress to craft a jobs bill that emphasizes infrastructure spending and lending to small businesses?

Instead, Cantor has put forth a “no-cost jobs plan” that Andrew Leonard rightly called a “magic pony jobs plan.” “Cut regulations. Freeze spending. Cut taxes. No new taxes. That’s the plan,” Leonard wrote.

Later in the discussion, Cantor replied to a question about the U.S.’s role at the climate change conference in Copenhagen by saying, “I think from the larger sense the question of climate change comes down to, if there’s been any constant in human history it’s been climate change, and the real question is the severity of that and the involvement of humans in all of that.” Watch it:

Former White House Press Secretary Joe Lockhart responded, “I wouldn’t have predicted last year that scientific doubters would still have this strong a voice.”

Cross-posted on ThinkProgress.

Last week, legislation was introduced in the House that would implement a .25 percent financial transactions tax (FTT or Tobin tax), which would affect all trades, except those pertaining to retirement, health and education savings, and mutual fund accounts. Speaker of the House Nancy Pelosi (D-CA) has offered her support to the idea, saying that “I believe the transaction tax still has a great deal of merit.” “It is really a source of revenue that has really minimal impact on the transaction but a tremendous impact on helping us meet our needs,” she added.

Sen. Tom Harkin (D-IA) has said that he will introduce a similar bill in the Senate. “I don’t look upon it as any kind of way of punishment or anything like that,” Harkin said. “I mean, we’re just looking for revenue. We’re looking for ways of getting out of this hole we’re in.”

Thus far, the administration has been cool toward the transactions tax, with Treasury Secretary Tim Geithner reiterating over the weekend that “I have not seen the version of that that I think works.” Today, at the Economist’s World in 2010 conference (attended by ThinkProgress), Council of Economic Advisers member Austan Goolsbee was asked about the transactions tax. He said he thinks such a tax “would be hard” to implement, and that the FTT was merely a “serving as a proxy” for more robust financial regulation:

It’s clear it would have to be done by everybody, and don’t overlook the temptation of a bunch of small — there are a whole bunch of, I don’t know if it would be Singapore or somebody who wants to be a financial center — saying ‘everybody else is going to tax your transactions but we won’t, so you should move all your stuff here.’

So I think it would be hard…Tobin himself would often say ‘well I don’t know if it exactly could work,’ because everybody’s got to do it together. The second thing I’d say, though, is it’s clearly getting at don’t we need a stronger regulatory environment. The Tobin tax is serving as a proxy for ‘don’t we need tougher, tighter, more robust oversight.’ Obviously we do.

Watch it:

The first point Goolsbee makes is worth considering, especially in light of Germany’s assertion yesterday that an FTT is not in the cards. “This government has taken office to lower taxes, not to levy new ones,” said Development Minister Dirk Niebel. But this concern should be balanced by acknowledging that there is a cost to a company for moving as well, and the United Kingdom instituted a .25 percent stock trading tax and still has a vibrant financial industry. Threats to move overseas may have more to do with the financial industry fearmongering than any real intent to move.

As for Goolsbee’s second assertion, I think he’s missing the mark. As Harkin pointed out, an FTT isn’t just about regulation, but also raising deficit-reducing revenues from the one source that can most afford it these days: Wall Street. In a $50 trillion trading industry (under conservative estimates), surely a tax that will raise $100 billion yearly can be managed. As Dean Baker wrote, “the economic collapse caused by Wall Street’s irrational exuberance has led to a huge increase in the country’s debt burden. It seems only fair that Wall Street bear the brunt of the clean-up costs.”

ThinkProgess has documented how the private health insurance industry is waging a duplicitous, “two-faced” campaign to kill health reform. Because the industry understands that the public views it in a largely negative light, the industry presents itself as proactively working hand-in-hand with legislators to produce reform. However, behind the scenes, the industry is coordinating a massive effort to kill all reform — employing attacks from front groups, allied politicians, think tanks, lobbyists, and right-wing media.

The Blue Cross Blue Shield Association, which is a lobbying group representing 39 independent Blue Cross and Blue Shield Plans, is also engaged in this two-faced campaign. Like most of industry, the BCBS Association says it fully supports the concept of health reform, but continually demands drastic changes to the bills in Congress. Some have begun to question the BCBS Association’s claim of support given its new study attacking reform legislation in the Senate. The criticism of BCBS is bolstered by a new revelation that BCBS Association lobbyists are helping to orchestrate a right-wing movement to invalidate all of health reform.

Yesterday, the BCBS Association released yet another industry-sponsored study to distort health reform and falsely claim that premiums will skyrocket because of the legislation. However, the nonpartisan CBO reported earlier this week that under the Senate health reform bill, “most Americans would pay the same or less in premiums.” A New York Times editorial yesterday criticized BCBS Association’s study, and noted correctly that it is yet another example of the private insurance industry doing whatever it can to frighten Americans.

But while the study certainly damages BCBS’ credibility, BCBS is involved in another anti-health reform ploy that they do not bother to promote on the BCBS website. The American Legislative Exchange Council (ALEC), founded in 1973 by conservative activist Paul Weyrich, is a DC-based front group which helps state lawmakers craft corporate-friendly legislation. As the Atlantic has noted, ALEC developed template health care “states’ rights,” legislation to declare aspects of health reform unconstitutional. ALEC has promoted this “tenther” legislation using its network of mostly far right Republican state lawmakers. The bills, which have been adopted in some form in 24 states so far, aim to invalidate federal regulations of health insurance, the public option and the individual mandate using the Tenther Amendment.

According to the ALEC website, the resolution was developed by a three member task force of industry representatives. One of the of the members is Joan Gardner, who is executive director of state services with the BCBS Association’s Office of Policy and Representation. In an interview with ThinkProgress, Christie Herrera, the director of ALEC’s health task force, confirmed that Gardner played a pivotal role in crafting this anti-health reform states’ rights initiative. Herrera told us that Gardner’s unique position at the BCBS Association brought “great knowledge” to the issue, and that Gardner voted to press forward with the campaign.

Part of the reason the BCBS Association has claimed that it opposes the reform bill in its current form is because of what it perceives as a weak individual mandate. However, the BCBS Association-supported ALEC campaign depicts the very notion of an individual mandate as “anti-freedom.” So either way the Senate acts, BCBS will be able to trash the bill and try to kill reform.

Private insurers have already been caught using a stealth lobbying firm to send employees to rowdy town halls (and radical tea party events), sharing lobbyists with slash-and-burn anti-health reform attack groups, and paying a number of conservative pundits who regularly appear in major media outlets to slam health reform. Now that it is clear that BCBS helped write the script for the radical tenther movement, any claim that the industry supports reform must be viewed with heightened skepticism.

Yesterday, the Department of Labor reported that the unemployment rate dropped to 10 percent in November, and the U.S. economy lost a much lower than expected 11,000 jobs last month, which is the fewest since the recession began in December 2007. The wider measure of underemployment also fell to 17.2 percent, from 17.5 percent.

Everyone (aside from the Republican National Committee, which still used the new numbers to bash the Obama administration) seems to be looking at the report with cautious optimism. But CNBC’s Trish Regan concluded that the report means the government should cancel the rest of the American Recovery and Reinvestment Act (i.e. the stimulus package) because we are now on “the road to recovery”:

The first thing that went through my head was, number one, wow! I mean, it was a tremendous surprise to, I think, everyone, certainly here at the New York Stock Exchange, one of the reasons the market’s doing so well this morning. But the second thing was, do we really need more stimulus given that we seem to be very much now on the road to recovery?…Why spend any more money? We haven’t spent all the stimulus money thus far, why not maybe hang onto that?

Watch it:

While the jobs report is certainly encouraging, I wouldn’t be celebrating a recovery just yet. 7 million jobs have still been lost in this recession, while “the typical unemployed worker has been searching for work for 20.1 weeks, and the share of the unemployed who have been out of work and searching for a job for at least six months rose to a record high of 38.3 percent.” Its particularly foolhardy to suggest canceling the stimulus on the same week that the Congressional Budget Office found that it has created or saved 600,000 to 1.6 million jobs, with plenty of punch still to come.

We’re definitely not out of the woods, which is why it’s encouraging that Democrats in Congress are working to craft a new jobs package. “I think we’re at a moment now where we’re beginning to see the positive benefits of the stimulus, but if we take our foot off the accelerator, we could relapse into a very, very slow recovery,” said Sen. Jack Reed (D-RI) yesterday.

The Wall Street Journal reported that Democrats are looking at a $170 billion effort — funded at least in part by TARP money that has been repaid to Treasury by banks — inclusive of $100 billion in safety net provisions and $70 billion in infrastructure investments and aid to states.

President Barack Obama, meanwhile, will lay out his own vision for a jobs bill on Tuesday, and Congress isn’t expected to unveil its final legislation until after Obama’s speech. According to White House Press Secretary Robert Gibbs, Obama is likely to endorse using TARP funds for the jobs bill. Republicans, meanwhile, are opposed, with House Minority Leader John Boehner (R-OH) calling it “the worst idea I’ve ever heard of.”

In recent weeks, the U.S. Chamber of Commerce has been stepping up its campaign against health care reform, running ads in seven states fear-mongering that the public option will increase individual costs and threaten the system of employer-sponsored coverage. It has even been “collecting money to finance an economic study that could be used to portray the legislation as a job killer and threat to the nation’s economy.”

But on Thursday, Comcast, the nation’s largest cable provider, came out and endorsed the Senate health care legislation. CEO Brian Roberts sent a letter to President Obama saying that the “enactment of comprehensive health care reform legislation is, in my judgment, critical to putting this country on a path of sustained growth and prosperity.”

Later that day, a small group of bloggers met with Comcast Executive Vice President David Cohen, who discussed how important the company believes health care reform is to reinvigorating the economy. A Comcast spokesperson confirmed to ThinkProgress that the company is an annual contributor to the Chamber, but not a member of the board of directors. It is also active on a number of working groups, such as Technology and Regulatory Affairs, and a supporter of a recent broadband study commissioned by the Chamber. At the meeting, Cohen made a specific point of noting that Comcast is not involved in the Chamber’s controversial anti-climate change legislation lobbying.

However, when we asked Cohen about what the Chamber is doing on health care, he said that Comcast clearly disagrees. But Cohen gave no indication that the company was thinking of discontinuing its dues, stating that the members and national organization are bound to have disagreements:

We’re entitled to have our own opinion, and I think it’s impossible for the U.S. Chamber of Commerce to only take positions that 100 percent of its members agree with 100 percent of the time. … But we clearly don’t agree on health care. There may be other things we agree on, but on health care, we clearly don’t agree. [...]

You just can’t let the perfect be the enemy of the very good. Nobody wrote that you have to solve this problem in one piece of legislation at one time.

The Chamber of Commerce did not respond to ThinkProgress’ requests for comment.

Our guest blogger is Michael Ettlinger, Vice President for Economic Policy at the Center for American Progress Action Fund.

The Wall Street Journal editorial page isn’t often right (or, perhaps I should say “correct”), but it’s really gone a round too far in challenging Jared Bernstein, Chief Economist to the VP and Executive Director of the Middle Class Task Force, on whether the American Recovery and Reinvestment Act (i.e the stimulus package) is working.

To start off, I should say that I’ve known Jared for quite a while, worked with him for six years and have great respect for him. You could, I suppose, call me biased. But the truth is simply that I know him well enough, and have even disagreed with him enough, to know that his numbers are always right.

Jared took on the Journal’s editorial page by citing some straightforward analysis from the Council of Economic Advisors and the Congressional Budget Office — which found that ARRA has saved or created 600,000 to 1.6 million jobs — as well as reporting from the Journal’s still-credible news pages:

[The Editorial Board's numbers] don’t square at all, of course, because the editorial board is more interested in scoring political points by discrediting the Recovery Act’s jobs impact than they are in reading their own paper’s reporting. And let’s be clear: while the new CBO findings are a welcome addition, these facts have been out there for months, including from an earlier CBO report last March.

The Journal then, made the mistake of responding in a way that actually proves Jared’s point. First, it dragged up a projection Jared made about what the unemployment rate would be if ARRA were enacted and which proved overly optimistic. That projection was consistent with what other economists were saying at the time — but more importantly, if we used missed projections of economic outcomes to disqualify economists we wouldn’t have any qualified economists. The analysis of the impact of the recovery bill isn’t about projections, it’s about evidence and facts.

The Journal’s next argument is that an earlier analysis of the impact of the Recovery Act by Jared is “now-infamous,” and characterizes CBO’s straightforward description of its methodology as an admission. Hardly a sophisticated critique. Both Jared’s and CBO’s analyses are pretty standard. The Journal seems to have a problem with accounting for the fact that, when someone gets a job, the benefit to the economy isn’t just to the person hired, but also to the nearby store, now that the hired person has a job and can spend some money.

The next round of Journal critique might, in other times, have some basis. The point they make is that the money the recovery act spends has to come from somewhere, and wherever it’s coming from is costing jobs. But they miss what’s actually going on in the economy. Read more

Yesterday, the House of Representatives passed an extension of the estate tax, permanently setting it at the 2009 level of a 45 percent rate on estates valued at more than $3.5 million ($7 million for a couple). Thanks to one of President Bush’s myriad accounting gimmicks, the estate tax is scheduled to disappear entirely in 2010, but return in 2011 at a 55 percent rate for estates of more than $1 million, which there is little stomach for in Congress.

The extension passed the House on a 225-200 vote, and now moves to the Senate, where things look decidedly murky. Earlier this year, 51 senators, including 10 Democrats (and then-Republican Arlen Specter), voted for an estate tax cut proposed by Sens. Jon Kyl (R-AZ) and Blanche Lincoln (D-AR) that would cost $250 billion and overwhelmingly benefit the heirs of the ultra-wealthy. And already, Kyl is responding to the House bill by saying that “he sees no way the Democrats can pass an estate tax extension before the end of the year, leaving them in for a ‘rude shock’ next year when the levy disappears”:

“Unfortunately, I think that’s inevitable,” Kyl told CongressDaily. “That wouldn’t have been the way I would have done it…Given the fact that Blanche Lincoln and I got 51 votes in the budget debate to move forward with a fairer estate tax reform, my hope would be we could pass that over here and that would be what ultimately became law.”

As of right now, it is decidedly unclear if the Senate will take up the estate tax at all this year, as health care has filled out the agenda. But one option reportedly on the table is to attach an estate tax extension to the FY10 Defense omnibus bill, which is coming up for consideration.

It’s really quite extraordinary that, while Congress is spending significant time harping on deficits, there is serious talk of a cut in the estate tax, and that merely extending current law is so contentious. House debate on the issue yesterday was heated, and took a turn for the absurd when Rep. Louie Gohmert (R-TX) announced that he was opposing the extension because “Jesus never advocated the government go steal.”

For some perspective, current law exempts 99.8 percent of estates. Plus, since the exemption is so high, the average effective rate heirs to those estates hit by the tax will pay will be just 14 percent. But the tax is still a significant revenue raiser for Treasury, and even enshrining the permanent rate costs $233 billion over ten years (relative to the baseline).

As Warren Buffett put it, “dynastic wealth, the enemy of meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy.” And in a time when we are having serious discussions regarding how to fund a jobs package and an increased troop presence in Afghanistan, an estate tax cut would be inexcusable.

Today, Federal Reserve Chairman Ben Bernanke went to Capitol Hill to face a confirmation hearing before the Senate Banking committee. Bernanke has been getting knocked around in the last few days, and while a bare majority of the committee seems to support his confirmation, he was still amply criticized during the hearing. Complicating matters, both Sen. Bernie Sanders (I-VT) and Sen. Jim Bunning (R-KY) have placed holds on Bernanke’s nomination, which, while unlikely to derail his confirmation, can slow it down quite a bit.

While the main point of consternation within Congress is the Fed’s lending actions during the economic crisis — which is the drive behind Reps. Ron Paul (R-TX) and Alan Grayson’s (D-FL) effort to audit the Fed — as Matt Yglesias has been pointing out, Bernanke should also have to answer for his “apparent contentedness with a monetary policy that is going to fall far short of the Fed’s legal mandate to maximize employment.”

Sen. Jack Reed (D-RI) actually asked Bernanke about unemployment during the hearing, and while Bernanke agreed that joblessness is “the most difficult problem that we face right now” — and conceded that the long-term costs of high unemployment are “severe” — he decided to not advocate more steps on the part of the Fed or to reassure Congress that he wouldn’t act to reel in fiscal expansion:

We have kept interest rates close to zero to try to stimulate growth and we have seen now positive growth in output which will translate into jobs, we’re hoping soon…I discussed earlier some of the steps we’re taking to try to unfreeze credit, including pushing banks to give credit-worthy borrowers access to loans, have banks raise capital, try to restart securitization markets and other steps. So the Fed has a program we’re employing, which is focused on getting jobs created. Now, on your side, on the fiscal side, obviously there are a whole number of different options…Obviously all of these issues will have fiscal consequences and again, Congress will have to make those tradeoffs.

Watch it:

Prior to the hearing Sen. Sheldon Whitehouse (D-RI) said that he wants to hear Bernanke say that the Fed is “willing to take their eyes off an exclusive gaze on the welfare of Wall Street and start giving a red hot damn about the American public.” I’m not sure that Bernanke’s response is very reassuring.

According to the latest economic forecast from Goldman Sachs, unemployment will peak at almost 11 percent in mid-2011, while inflation will remain close to zero at the same time. Therefore, there is no reason for the Fed to not take additional steps to encourage employment, and in fact, the Fed would be violating its legal mandate if it sits on its hands. And if Bernanke really feels that there is nothing more the Fed can do, then he should make sure that Congress knows that.

Minutes from the last Federal Reserve Board meeting show that some Fed leaders are freaking out about inflation, despite all the evidence that unemployment is the far greater problem. Bernanke had the opportunity to ease concerns that the Fed will allow the country to suffer high unemployment in the name of fighting inflation and seems to have let it pass.

Today, the White House is hosting a jobs forum, “to sound out ideas for accelerating job growth during the worst labor market in a generation,” as Democrats in both houses of Congress are attempting to craft jobs legislation. Yesterday, the administration for the first time expressed support for new legislation, so long as it has a “relatively small deficit impact.”

This effort comes in the wake of a Congressional Budget Office (CBO) report showing that the economic stimulus package is having its intended effect — creating or saving 600,000 to 1.6 million jobs — albeit in a weaker than anticipated economy.

Republicans, though, have said that additional jobs legislation “would meet resistance.” They’re justifying this position — aided by the conservative media — by claiming that the “failed economic stimulus” has not created jobs, despite the CBO reporting otherwise. Here’s a roundup of conservative statements that have occurred after the CBO released its report:

Rep. Eric Cantor (R-VA): The 800-billion dollar stimulus bill that Washington passed has failed to create – or save – the jobs it promised…There is now talk of a second — or is it a third – stimulus bill…More government spending, more bailouts for states, more transfer payments to individuals, expanded government agencies.

RNC Chairman Michael Steele: [Obama's] failed economic stimulus has considerably added to our national debt, skyrocketing it to a record-breaking $1.42 trillion in 2009…This time using a “jobs summit” to distract from the 10.2 percent national unemployment rate as well as President Obama’s and Congressional Democrats’ plans to unleash a second wave of stimulus spending on the American public, known as Stimulus II.

Rep. John Boehner (R-OH): Washington Democrats staked their credibility on a nearly trillion-dollar ‘stimulus’ that was supposed to be about putting people back to work…Given the last 11 months of outrageous ‘stimulus’ claims, the American people are right to wonder whether Washington Democrats can be trusted to create jobs and cut the deficit.

Wall Street Journal Editorial Board: [T]he stimulus has been a manifest bust, much as the critics who appeared on our pages predicted. As the recovery continues, sooner or later the economy will begin to create new jobs, thank heaven. But the stimulus won’t have much do with it, except insofar as the higher taxes to finance the runaway spending further retard private investment and hiring.

For their part, Republicans have organized an economic roundtable for today, chock full of former Bush administration and McCain campaign staffers who, among other things, are responsible for the Bush tax cuts and Medicare Part D. Cantor also released a jobs plan yesterday, which Andrew Leonard characterized as a “magic pony jobs plan.” “Cut regulations. Freeze spending. Cut taxes. No new taxes. That’s the plan,” Leonard wrote.

Cross-posted on ThinkProgress. Read more about confronting the jobs dilemma in today’s Progress Report.

House Republicans, “promising not to be flat-footed on efforts to revive the economy,” are preparing what they’ve called a “one-two punch” this week, in an attempt to counter the jobs summit that is being held at the White House tomorrow. With the CBO report yesterday showing that the stimulus package — derided by Republicans for months — has saved or created between 600,000 and 1.6 million jobs, the GOP is trying to roll out a jobs plan that it can call its own.

The administration’s summit will feature “more than 100 business, union and nonprofit leaders and economists,” so House Minority Leader John Boehner (R-OH) has organized an parallel economic roundtable, to provide a platform “for economists who have a different perspective on how Obama’s agenda has affected the economy.”

So who is the GOP betting on to design policies adequate for combating the effects of the great recession? Mostly former Bush administration and McCain campaign staffers, who have advocated disastrous tax and budget policies. Here’s a rundown:

Bush Tax Cut Architect Larry Lindsey: Lindsey was Director of the National Economic Council under President George W. Bush, and Bush’s “closest economic adviser.” Lindsey was the architect of the Bush tax cuts, which he characterized as an “insurance policy” against a recession. He responded to charges that the cuts overwhelmingly favored the wealthy by saying “”I don’t think that jealousy is what matters to the American people.”

 

Deficits Double-Talker Douglas Holtz-Eakin: Despite being a former CBO Director, during the campaign, Holtz-Eakin repeatedly asserted that McCain’s economic plans would balance the budget (which wasn’t true) and that McCain would cut taxes for everybody in America (also not true). Since leaving the campaign trail, he has been pushing the absurd notion that repealing the estate tax would create millions of jobs.

 

Kevin “Dow 36,000″ Hassett: Hassett was chief economic adviser for McCain’s 2000 presidential bid, and advised both the Bush ’04 and McCain ’08 campaigns. He is best known for penning the 1999 book Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, which predicted a huge surge in stock prices. As of last night, the dow stood at 10,485, after falling below 7,000 for a time.

 

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