February 26, 2009
Readers of this blog may have been a little confused this morning. On the one hand, I've reported that Congress isn't likely to give the administration another cent for the banks, at least not any time soon. On the other hand, the reports on Obama's budget suggest he's asking for another $250 billion in bank bailout money (and that's a net cost; the gross number is $750 billion).
Ooookay, let's scrunch up our sleeves and talk accounting for a bit. (Wait! Don't click away!) As mentioned earlier, the White House's newly unveiled budget proposal plans to raise $646 billion in tax revenue between 2012 and 2019 by auctioning off carbon permits under a cap-and-trade regime—about $80 billion per year. But what sorts of assumptions are they making here? What, exactly, are they envisioning for climate policy? On a White House conference call just now with reporters, a handful of senior administration officials unspooled their thinking a bit.
Spoiling For A Fight On Taxes
Jonathan Oberlander, one of the nation's leading experts on health care policy, is a professor at the University of North Carolina at Chapel Hill and author of The Political Life of Medicare. This is the first of what we hope will be many posts at The Treatment. The Obama administration's just released budget blueprint marks the beginning of a new health reform battle. The largest source of money for financing health reform comes from a proposal to reduce itemized tax deductions for families making over $250,000.
In The Washington Post, Juliet Elperin and Steve Mufson bring word that Obama's first budget, set for release today, will assume revenues from a cap-and-trade system on carbon emissions: Today, the White House will unveil a budget that assumes there will be revenue from an emissions trading system by 2012. Sources familiar with the document said it would direct $15 billion of that revenue to clean-energy projects, $60 billion to tax credits for lower- and middle-income working families, and additional money to offsetting higher energy costs for families, small businesses and communities.
Just when it seemed the D.C. voting rights bill was on its way to passage, there's a new glitch in the Senate: an amendment, by Republican John Ensign, that would lift virtually all local control laws. That would make the overall bill tough to reconcile with the House version. As the Washington Post reports, Sen. John Ensign (R-Nev.) said he was introducing the amendment because the D.C.
Wyden Is Impressed, Too
Few people have been working as relentlessly towards universal health insurance in the last two years as Senator Ron Wyden, who introduced a serious universal coverage proposal just weeks after the 2006 midterm elections and has been building bipartisan support for it ever since. In an interview just moments ago, Wyden said he was pleased with Obama's opening bid on reform: In the last 36 hours, the president took two very gutsy steps on health care. The first was, after 60 years of yakking about health care in America, he wasn't going to wait until year 61 to do something about it.
First China, which is particularly relevant as Obama announces a $634 billion "reserve fund" for health care reform over the next decade. (Though, in fairness, about half is paid for by tax increases, and the administration is looking for cost savings in Medicare and Medicaid to help cover the rest.) Anyway, Brad Setser has been following purchases of U.S. debt and has picked up something extremely interesting.
February 25, 2009
In his first inauguration speech, President Franklin D. Roosevelt observed that the titans of Wall Street “have fled from their high seats in the temple of our civilization”--an apt description for the lashing of Wall Street leaders this month in front of the House Financial Services Committee. Chairman Barney Frank and the members of his committee were less eloquent than FDR in their criticisms of the current Wall Street CEOs, but the point was the same--the public has lost faith in the leadership of our financial community. How have we come full circle over 75 years after FDR?
Bust the Slump First
Two weeks ago, at his first press conference, President Barack Obama grabbed our attention by insisting that we face a potential “lost decade” of growth--a reference to the prolonged slump in Japan during the 1990s. As a statement of our predicament, this was brilliant, breathtaking, and refreshing: Remember that most American presidents choke on the word “recession” and would never consider hinting at anything worse. The prospect of a lost decade concentrates the mind and urges consideration for bold proposals.
No One Home At Treasury
Question: Who's the deputy secretary of the Treasury? Answer: Trick question--no one! As ABC News reports today, Treasury Secretary Geithner has less than 20 percent of the politically appointed spots at Treasury filled, including his Number 2 spot. The article makes such vacancy rates seem outlandish, but historically they're not unusual at such an early stage in a new administration. Nor is it a real problem at the moment, as the policy-proposal and passage stages are handled more by the White House than the Treasury rank-and-file.