As reported in Huffington Post

WASHINGTON — House Republicans on Tuesday rejected a Senate bill that would have prevented a payroll tax cut from expiring on New Year’s Day, saying they wanted a year-long extension or no extension at all.

House Republicans accomplished that with a convoluted motion to reject a Senate compromise that would have extended the 2 percent payroll tax break for two months, voting 229 to 193 to send the measure to a conference committee.

Seven Republicans voted with Democrats, and no Democrats crossed the aisle. They were Reps. Charles Bass (R-N.H.), Jeff Flake (R-Ariz.), Chris Gibson (R-N.Y.), Jaime Herrera Beutler (R-Wash.), Tim Johnson (R-Ill.), Walter Jones (R-N.C.) and Frank Wolf (R-Va.).

Senate leaders also were hoping for a year-long deal, but sources told The Huffington Post that Republicans and Democrats could not agree on how to fund about half of the $200 billion needed to pay for the bill for a full year. The measure would also extend unemployment insurance benefits and would prevent a 27 percent cut to Medicare payments to doctors with a “doc fix” provision. Those also expire Jan. 1.

So instead, the Senate voted 89 to 10 on Saturday for a two-month extension to buy time to bridge the gap. The upper chamber then recessed, apparently confident that Senate Minority Leader Mitch McConnell (R-Ky.) had the go ahead from House Speaker John Boehner (R-Ohio) to cut a deal.

But Boehner’s members rebelled against the bill, even with 39 Senate Republicans backing it, and scrambled to oppose it. At first, the GOP had set a vote on the bill, but late Monday changed it to an unusual motion to reject the Senate compromise. If they had held the first vote, and it had passed, the bill would have gone straight to President Obama.

But under the new version, House leaders accomplished their goal of sending the bill to a conference committee instead, even though Senate and House Democratic leaders insist they will not appoint members to the committee.

Democrats argued that the parliamentary gymnastics were just a way to prevent a clear vote on a bill that they believe would pass.

“The Republican majority in this House of Representatives is refusing — it is refusing to allow a vote in this House on the Senate bipartisan compromise,” said Rep. Chris Van Hollen (D-Md.). “What are they so afraid of? It is very clear that the Republican leadership is afraid that the same bipartisanship that took place in the Senate will take place right here in the House… otherwise we’d have a vote on it.”

Republican leaders insisted they were preventing a vote to pass the Senate deal because approving a bill for just two months creates uncertainty. They cited a payroll business trade organization that said a two-month extension is problematic for electronically processed payrolls.

And they contended that the sides were “90 percent” of the way to a deal, even though $100 billion separated the GOP and Democrats in the Senate. The original version of the House bill also adds a string of “poison pill” riders on top of the differences over funding. Democrats initially wanted to tax the rich to pay for the bill, but dropped that surtax in the compromise.

“We need to come together in a responsible manner to find common ground,” said House Majority Leader Eric Cantor (R-Va.).

Cantor and others argued that the Senate had only been interested in going on vacation.

“We stand ready to work over the holidays to get this done,” said Rep. Jeb Hensarling (R-Texas). “That’s the question, are you willing to work over the holidays, or are you not willing to work over the holidays,” Hensarling said, suggesting that Democrats need to watch Schoolhouse Rock to figure out how Congress’ conference committees work.

Democrats didn’t buy it, and none budged to the GOP side, even though at least a handful usually do.

“If you’re so sure of your argument, why not vote on the Senate bill?” asked Rep, Sander Levin (D-Mich.), the top Democrat on the Ways and Means Committee. “Because everything you said is a smokescreen,” he said.

The House could still hold a separate vote directly on the Senate bill if GOP leaders relent.

However, they seemed intent on trying to make the president or Democratic leaders blink on their position, and restart negotiations.

Democrats insisted they would not budge, leaving the Senate bill as the only standing proposal.

“It is unconscionable that Speaker Boehner is blocking a bipartisan compromise that would protect middle-class families from the tax hike looming on January 1st – a compromise that Senator McConnell and I negotiated at Speaker Boehner’s own request,” Senate Majority Leader Harry Reid (D-Nev.) said in a statement just after the vote.

“I would implore Speaker Boehner to listen to the sensible Senate Republicans and courageous House Republicans who are calling on him take the responsible path, and pass the Senate’s bipartisan compromise,” Reid added. “I have been trying to negotiate a yearlong extension with Republicans for weeks, and I am happy to continue doing so as soon as the House of Representatives passes the bipartisan compromise to protect middle-class families, but not before then.”

 

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As reported in Huffington Post 12/08/11 by Andrew Taylor

WASHINGTON — Conservative flashpoint issues from abortion and abstinence education to President Barack Obama’s health care law are the biggest obstacles to Congress completing a massive year-end spending bill next week that would keep the government running through next September.

Going into end-game negotiations this weekend on the $900-plus billion bill, Republicans expect to lose on most of the policy provisions, or “riders,” they added to House versions of the must-do spending measures. But the White House and Democrats are poised to make concessions on some environmental rules, wetlands regulations and, in all likelihood, on continuing a ban on government-funded abortions in the nation’s capital city.

“We’re meeting heavy resistance from the White House and Democrats in the Senate,” said House Appropriations Committee Chairman Harold Rogers, R-Ky., who is pressing for provisions to help the coal industry. “So, we’ll get as many as we possibly can.”

Among most popular targets for Republicans are environmental regulations they say hamper the economy, such as proposed Environmental Protection Agency rules on coal ash, large-scale discharges of hot water and greenhouse gases from electric power plants, and emissions from cement plants and oil refineries.

If past is prologue, most of the issues will end up on the chopping block. That’s what happened last spring during negotiations on a spending bill for the budget year that ended in September.

“There’s a lot of opposition to these and they know they need Democratic votes in the House to pass it,” said Rep. Norm Dicks of Washington, senior Democrat on the Appropriations Committee. “So we have made this very clear to the other side. … If you expect our votes you’ve got to get rid of the controversial riders.”

But some riders will be needed to win GOP support for the measure in votes next week. And many of the provisions are important to powerful members of the appropriations panel in both parties.

“We don’t want to be wholly inflexible,” said Rep. James Moran of Virginia, top Democrat on the spending panel responsible for the EPA’s budget. That measure is studded with riders.

“Virtually every rule the EPA has come up with, they’re trying to come up with a rider to stop it,” said Scott Slesinger, legislative director of the Natural Resources Defense Council.

// // The roster of environmental riders is indeed lengthy.

For coal interests, there is a rider to block clean water rules opposed by mining companies that blast the tops off mountains as well as a rider to block proposed labor rules to limit miners’ exposure to coal dust, which causes black-lung disease. Electric utilities would benefit from delays of rules on traditional air pollution and emissions of carbon dioxide. Painting contractors would benefit from a delay in a 2008 rule that requires them to be certified by the EPA in order to remove lead paint.

“We’re pretty clear that we find these riders as unacceptable,” said Sen. Jack Reed, D-R.I. “We’re being very emphatic.”

On social issues, there are proposals to ban needle exchange programs that help stem the spread of HIV among drug users; cut off federal funding to Planned Parenthood, the nation’s leading provider of abortions; and adopt an abstinence-only approach for grants to reduce teen pregnancy.

Those riders, in addition to GOP efforts to block implementation of the new health care law – a nonstarter with Democrats and the White House – are among the reasons the labor, health and education chapter of the omnibus spending measure is at risk of being left out of the final bill.

“It’s from soup to nuts,” said Rep. Rosa DeLauro, D-Conn. “They just designed an ideological agenda.”

In addition to proposing to eliminate federal family planning funding, Republicans would block the District of Columbia government from providing abortions to poor women, which is a top priority of anti-abortion activists.

The D.C. abortion rider was in place when Republicans controlled the White House but was lifted after Obama took office. He reluctantly agreed to reinstate the funding ban this year, prompting Washington’s mayor and city council members to march on Capitol Hill. Democrats continue to fight the rider, but GOP leaders are likely to insist on it.

At the same time, Republicans are trying to reverse a loss earlier this year when they tried to block taxpayer money from going to Washington’s needle exchange program.

Some of the riders aren’t contentious. For instance, even though the EPA has no interest in regulating methane emissions from cow burps and flatulence, there’s a rider to block the agency from doing so. That’s fine with Democrats.

Then there are riders that have no practical effect but set a precedent that agencies would prefer to avoid. One would block the EPA from officially delineating any new wetlands in counties affected by flooding this year. It turns out that the agency has no plans to do so, so this might be a rider Democrats and the White House would accept.

Another battle involves an attempt to block the Obama administration’s 2009 policy lifting restrictions on travel and money transfers by Cuban-Americans to families remaining in Cuba. That provision drew an explicit Obama veto threat earlier this year and will probably be dropped in end-stage negotiations.

The White House warned last week it’ll play a strong hand in trying to keep the final measure as free of riders as possible. “There should be no miscalculation about the intensity of (Obama’s) feelings,” White House budget director Jacob Lew told reporters.

 

Reported by Sam Stein

 

WASHINGTON — As the United States Senate considers yet another variation of the payroll tax cut, there appears to be little common ground over how the measure should be paid for. Democrats, along with one Republican, continue to argue for a small surtax on millionaires. Republicans either balk at that proposal or say they don’t support extending the payroll tax cut at all.

The impasse is unlikely to be bridged by the time the newest bill comes to the floor on Thursday, leading operatives to suggest that it would simply be easier to pass the payroll tax cut extension without paying for it.

Longtime anti-tax advocate Grover Norquist said he would prefer to see the tax cut accompanied by an equivalent reduction in spending to make up for the decrease in revenue. He and other conservatives said that if spending offsets do not accompany the tax cut, it would be harder for Democrats to argue against other such tax cuts, including a repatriation holiday on corporate taxes.

“No to a tax increase, yes to extending it without a quote, unquote ‘pay for,’ and the preference is to do it with spending cuts as the offset,” said Norquist. “The worst thing you can do would be to extend it with a permanent job-killing marginal tax increase. You would end up with permanent marginal tax rates in exchange for a temporary reduction in tax rates on Social Security.”

When the payroll tax cut was first introduced at the end of 2010, there was no talk about how it would be offset. Instead, it was passed as part of an agreement to extend the Bush tax cut for an additional two years. The estimated $860 billion price tag was simply put on the books.

So why not do the same now, when the price tag is significantly lower — $185 billion to reduce the employee’s share from 4.2 percent to 3.1 percent of wages, along with other tax policy changes — and Republicans have, as a matter of ideological principle, argued that tax cuts pay for themselves?

The question was posed to two senior Obama administration officials during a briefing with reporters yesterday. And while they continued to argue that there were easy ways to cover the payroll tax cut — while needling Republicans for suddenly insisting that tax cuts be offset — they never explicitly said it had to be paid for.

// // “So we still think that the payroll tax, unemployment insurance, any other jobs measures can be paid for in a responsible way,” one said. “The important thing here, though, is that this get done.”

Reminded that, at least as far as unemployment insurance is concerned, the president has consistently held that such emergency expenditures don’t need to be offset, the official replied: “I don’t think the president’s longstanding position on that has changed. But there is a way of paying for it that was put forward in the American Jobs Act.”

And therein lies the problem. While both Republicans and Democrats privately admit that they have been and would be comfortable with letting tax cuts continue without offsets, neither will say so publicly, lest their commitment to deficit reduction be questioned.

Top congressional Republican aides argue that a payroll tax cut extension without offsets isn’t necessarily easier to pass than one paid for by a millionaire’s surtax. But the reasoning behind that argument has more to do with timing than philosophical disputes.

Congress will be voting on major appropriations bills before the Christmas recess. To have them turn around and stack $185 billion on the deficit would be too much to ask, the logic goes.

“The president said in his speech to Congress and in speeches since, that ‘everything’ in the bill will be paid for,” Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), said in an email. “I think it will be MUCH easier to pass it if they take out the poison pill of a tax hike on job creators; a tax hike, by the way, that has bipartisan opposition.”

A top House aide was more blunt. “I don’t think either would pass the House,” the aide explained, when asked about a payroll tax cut extension without offsets and one that was paid for with a millionaire’s surtax. “So it’s a ‘would you rather burn to death or drown’ type of question.”

by Jesse Eisinger ProPublica,  Nov. 30, 2011, 12:12 p.m.

Note: The Trade is not subject to our Creative Commons license.

Last week, I had a conversation with a man who runs his own trading firm. In the process of fuming about competition from Goldman Sachs, he said with resignation and exasperation: “The fact that they were bailed out and can borrow for free — It’s pretty sickening.”

Though the sentiment is commonplace these days, I later found myself thinking about his outrage. Here was someone who is in the thick of the business, trading every day, and he is being sickened by the inequities and corruption on Wall Street and utterly persuaded that nothing had changed in the years since the financial crisis of 2008.

Then I realized something odd: I have conversations like this as a matter of routine. I can’t go a week without speaking to a hedge fund manager or analyst or even a banker who registers somewhere on the Wall Street Derangement Scale.

That should be a great relief: Some of them are just like us! Just because you are deranged doesn’t mean you are irrational, after all. Wall Street is already occupied — from within.

The insiders have a critique similar to that of the outsiders. The financial industry has strayed far from being an intermediary between companies that want to raise capital so they can sell people things they want. Instead, it is a machine to enrich itself, fleecing customers and exacerbating inequality. When it goes off the rails, it impoverishes the rest of us. When the crises come, as they inevitably do, banks hold the economy hostage, warning that they will shoot us in the head if we don’t bail them out.

And I won’t pretend this is a widespread view in finance — or even a large minority. You don’t hear this from the executives running the big Wall Street firms; you don’t hear it from the average trader or investment banker. From them, we get self-pity. For every one of the secret Occupy Wall Street sympathizers, there are probably 15 others like Kenneth G. Langone, who, like downtrodden people before him, is trying to reclaim and embrace a pejorative [1], “fat cat.”

The critics are more often found on the periphery, running hedge funds or working at independent research shops. They are retired, either voluntarily or not. They are low-level executives who haven’t made scrambling up the corporate hierarchy their sole ambition in life. Perhaps their independent status removes the intellectual handcuffs that come with ungodly bonuses. Or perhaps they are able to see Big Money’s flaws because they have to compete with the bigger banks for dollars.

Are these “Wall Streeters”? To civilians, they work on the Street. Bankers at the bulge-bracket firms wouldn’t think they are. But that doesn’t mean they don’t count. They know the financial business intimately.

Sadly, almost none of these closeted occupier-sympathizers go public. But Mike Mayo, a bank analyst with the brokerage firm CLSA, which is majority owned by the French bank Crédit Agricole, has done just that. In his book “Exile on Wall Street [2]” (Wiley), Mr. Mayo offers an unvarnished account of the punishments he experienced after denouncing bank excesses. Talking to him, it’s hard to tell you aren’t interviewing Michael Moore.

Mr. Mayo is particularly outraged over compensation for bank executives. Excessive compensation “sends a signal that you take what you get and take it however you can,” he told me. “That sends another signal to outsiders that the system is rigged. I truly wish the protestors didn’t have a leg to stand on, but the unfortunate truth is that they do.”

I asked Richard Kramer, who used to work as a technology analyst at Goldman Sachs until he got fed up with how it did business and now runs his own firm, Arete Research, what was going wrong. He sees it as part of the business model.

“There have been repeated fines and malfeasance at literally all the investment banks, but it doesn’t seem to affect their behavior much,” he said. “So I have to conclude it is part of strategy as simple cost/benefit analysis, that fines and legal costs are a small price to pay for the profits.”

Last week, in a Bloomberg Television event, both Laurence D. Fink, the chairman and chief executive of the mega-money management firm BlackRock, and Bill Gross, the legendary bond investor, evinced some sympathy for the Occupy Wall Street movement [3].

Over the last several decades, “money and finance have dominated at the expense of labor and Main Street, and so how can one not sympathize with their predicament?” Mr. Gross said, speaking of the 99 percent. “To not have sympathy with Main Street as opposed to Wall Street is to have blinders.”

It’s progress that these sentiments now come regularly from people who work in finance. This is an unheralded triumph of the Occupy Wall Street movement. It’s also an opportunity, to reach out to make common cause with native informants.

It’s also a failure. One notable absence in this crisis and its aftermath was a great statesman from the financial industry who would publicly embrace reform that mattered. Instead, mere months after the trillions had flowed from taxpayers and the Federal Reserve, they were back defending their prerogatives and fighting any regulations or changes to their business.

Perhaps a major reason why so few in this secret confederacy speak out is that they are as flummoxed about practical solutions as the rest of us. They don’t know where to begin.

Over the next year, maybe that will change. Things are going to be tough on Wall Street. Bonuses will be down. Layoffs are coming. Europe seems on the brink of another financial crisis. Maybe from that wreckage, a leader will emerge.

as reported in HuffingtonPost 11/30/2011

WASHINGTON — For the second year in a row, Congress must decide during the holiday season whether to renew federal jobless benefits for people out of work six months or longer. While Democrats have been making a huge fuss, with a press conference Wednesday featuring hundreds of unemployed workers, Republicans have been relatively quiet — but that doesn’t mean they’re against reauthorizing the benefits.

Republican leaders in both Houses of Congress have expressed support for continuing the benefits, saying the holdup is just a matter of how the legislation is put together.

“We’re going to be discussing between the House and Senate ways to deal with both continuation of the payroll tax reduction and unemployment insurance extension before the end of the year,” Sen. Mitch McConnell (R-Ky.) said Tuesday. “And in the end, it will have to be worked out in a joint negotiation between a Democratic Senate and a Republican House.”

If the benefits are not reauthorized, 1.8 million jobless will stop receiving checks over the course of January, according to worker advocacy group the National Employment Law Project. The federal benefits kick in for laid off workers who use up to six months of state-funded compensation without finding work. Congress routinely provides extensions during recessions and hasn’t dropped extended benefits with the national unemployment rate above 7.2 percent.

Yet the need to reauthorize benefits has been overshadowed by the looming expiration of a payroll tax cut put in place last December, which would result in a tax hike on every working American — an average hike of $1,000 — a scenario Republicans would like to avoid. And Congress also needs to pass a so-called “doc fix” by the end of the year to prevent a 27 percent cut in pay for doctors who see Medicare patients.

“Nobody is coming out with any definitive statements on [unemployment insurance]. Last year they were happy to,” Judy Conti, a lobbyist for NELP, told HuffPost. “I think it’s indicative of the fact that on a bipartisan basis people understand that workers families and the economy need these programs to continue.”

HuffPost readers: Worried your benefits will stop because of Congress? Tell us about it — email arthur@huffingtonpost.com. Please include your phone number if you’re willing to do an interview.

// // The sticking point over renewing the benefits through next year will be their roughly $50 billion cost. Republicans typically insist that the aid must be “paid for,” but that calculation may not apply if the benefits can be attached to something attractive like a tax cut. Republicans blocked renewed unemployment aid last year until President Obama agreed to extend the Bush-era tax cuts for two more years — at a cost much greater than unemployment. Earlier this year President Obama pressed Congress to pass a jobs package that included many items Republicans favored — for instance a “Bridge to Work” training program — but so far congressional Democrats have not signaled support for those programs.

Many members of Congress expected the deficit reduction super committee to craft a deal that included the benefits, but the committee turned out to be less super than advertised.

“Any kind of grand deal that we’ve been after has eluded us,” House Speaker John Boehner (R-Ohio) said Tuesday, referring to the failed broader talks on the budget and debt. “So let’s try and work incrementally towards a conclusion this session that can benefit all Americans. Because we Republicans do care about people that out — that are out of work. We don’t want to raise taxes on anybody. We want to provide the help to the physicians and the providers in the health care arena in this country, and we want to make sure this country has a sound national defense policy.”

Even Sen. Orrin Hatch (R-Utah), who suggested during a standoff on jobless benefits last summer that unemployed people blow the money on drugs, sounded sympathetic to jobseekers on Wednesday.

“Nobody really has a real quick answer. We’re studying it, looking at it. We’re clearly going to have to do something — nobody wants to see people suffer,” Hatch told reporters outside the Senate floor on Tuesday. “There’s a huge underemployment rate as you know, of 16, 18 percent, somewhere in that area. People don’t even want to look for jobs anymore. There oughta be some incentives to find jobs, to get to work. It’s easier said than done. I think there’s a general consensus that we need to help people.”