White House Mulling US Chamber's 's Regulatory Hit List

Dan Froomkin froomkin@huffingtonpost.com | HuffPost Reporting

A leading big-business group, responding to a request from top White House aides, last month submitted to President Obama's Office of Management and Budget a 54-page hit list that takes aim at regulations protecting the environment, workers, consumers and investors.

Having asked the Business Roundtable for its advice, the White House was then faced with the question of what to do with it.

Discussions between the two parties are ongoing, the White House says. And their conclusion may depend on who wins the ongoing power struggle between the president's top political gurus and his policy apparatus.

The push to placate business leaders is being led by Obama's political team: senior adviser Valerie Jarrett and Chief of Staff Rahm Emanuel.

But just like the advice the White House politicos are giving Obama about pressing forward with deficit reduction in the midst of a jobs crisis, the idea of loosening the reins on big business during the Deppwater Gulf oil crises strikes some observers as spectacularly tone-deaf.

Not just bad policy, but bad politics.

"What we're in the middle of is a string of regulatory failures that the Obama administration seems very insensitive to," said Rena Steinzor, a law professor at the University of Maryland and president of the pro-regulation Center for Progressive Reform.

She cited the financial crisis, the Massey Energy mine disaster, and of course the BP oil spill.

Steinzor told the Huffington Post she suspects Obama's political team is not motivated by the optics in this case, nor by an overwhelming devotion to the free market -- but rather by money.

"They want campaign contributions. They want to win," she said. "I think they definitely are trying to make sure that they don't fall behind in the fundraising race. I think they're quite worried about that," she said.

"If I were them, this isn't what I'd be worried about. I'd worry about people being so angry about BP that they wouldn't vote for the president."

Gary Bass, executive director of the pro-accountability group OMB Watch, said the Business Roundtable should be embarrassed by its insensitivity to the regulatory failures that have cost the nation so much in recent years.

And he scolded the White House for soliciting the group's advice on regulation in the first place.

"Why the White House would be catering to this kind of rhetoric smacks of election-year politics, instead of governing," he told HuffPost. "What I continue to see in this administration is a battleground between the politicos and the policy people, whether it's deficit versus stimulus or regulatory matters."

In early July, Jarrett and Obama's top economic adviser, Larry Summers, met with Ivan G. Seidenberg, the CEO of Verizon and chair of the Business Roundtable, to follow up on the list of suggestions, a White House spokesperson told the Huffington Post. The roundtable consists of chief executives of many of the largest U.S. corporations.

Rightardia note: Verizon is a big GOP supporter and an anti-union company. The White House must know this.

According to letters released by the White House, Seidenberg then wrote to Jarrett agreeing to "refine" the roundtable's list of regulations to "those that have the greatest potential to affect adversely economic growth."

Jarrett, in turn, wrote to Seidenberg: "While we may disagree on some issues, we have an open door and are always willing to consider input and ideas from everyone, including the business community, as we continue to provide rules of the road to protect the American people , while fostering an environment that will stimulate growth and job creation."

The exchange was much friendlier than the recent volleys between the White House and the increasingly radical-right Chamber of Commerce, which on Wednesday sent the White House its own four-page list of priorities.  The chamber list  identified deregulation of business, tax cuts for the wealthy, free trade agreements, a reduced corporate income tax, expanded offshore drilling and logging in national forests and the privatization of waterways and roads.

The Chamber's positions, compounded by its rejection of Jarret's request for a speaking slot at a job-promotion conference earned it a tough letter signed by Jarret and Emanuel.

"We will not... accept the lax regulation of the financial industry that led to the greatest economic crisis since the Great Depression," they wrote. "And we will not stand by while oil and gas companies continue to fight needed changes to outdated regulations that are partially responsible for one of the worst environmental crises in American history."

Bottom line: Any attempt to loosen federal laws or regulations that cut taxes for the affluent, weaken labor law and environmental regulations will alienate progressives. Democrats didn't go on the street to elect another Republican president. 

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ABC News: Senate Passes Historic Wall Street Regulation Bill

By JIM KUHNHENN Associated Press Writer |WASHINGTON May 20, 2010 (AP)

Prodded by national anger at Wall Street, the Senate passed the most far-reaching restraints on big banks since the Great Depression. In its broad sweep, the massive bill would touch Wall Street CEOs and first-time home buyers, high-flying traders and small town lenders.

The 59-39 vote represents an important achievement for President Barack Obama, and comes just two months after his health care overhaul became law. The bill must now be reconciled with a House version that passed in December. The legislation Should reach Obama's desk before the Fourth of July.

The legislation aims to prevent another meltdown of big Wall Street investment banks and the resulting costly bailouts. It calls for new ways to watch for risks in the financial system and makes it easier to liquidate large failing financial firms. It also writes new rules for complex securities blamed for helping precipitate the 2008 economic crisis. It ALSO creates a new consumer protection agency, something republicans had little enthusiasm for.

It would impose new restraints on the largest, most interconnected banks. It would  demand proof that borrowers could pay for the simplest of mortgages.

"Our goal is not to punish the banks but to protect the larger economy and the American people from the kind of upheavals that we've seen in the past few years," Obama said earlier Thursday after the Senate cleared a key 60-vote hurdle blocking final action.
Obama said, the fiancial industry had tried to stop the new regulations "with hordes of lobbyists and millions of dollars in ads."

Only two Democrats voted against the bill. Four Republicans broke ranks with their party to support it.

"The decisions we've made will have an impact on the lives of Americans for decades to come," said Sen. Richard Shelby, R-Ala., who voted against the legislation. "Judgment will not be rendered by self-congratulatory press releases, but, rather, by the marketplace. And the marketplace does not give credit for good intentions."
 
Democrats argued the bill  was a potent response to the financial abuses, regulatory weaknesses and consumer misjudgments that plunged the nation deep into recession.
"To Wall Street, it says: No longer can you recklessly gamble away other people's money," said Senate Majority Leader Harry Reid, D-Nev. "It says the days of too big to fail are behind us. It says to those who game the system: The game is over."

As House and Senate negotiators meet to work out differences in the bills, the common ground between the two bills will likely tilt toward making the bill tougher on banks rather than weaker.

See the complete story at: http://abcnews.go.com/Business/wireStory?id=10696150

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Tom Tomorrow: This Modern Banking World

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This Time, We Can't Leave the Middle Class Behind

TUE, AUGUST 11, 9:16 AM EST

Rightardia comment: This situation didn't happen by magic. The Republicans have been on a deregulation kick for the past 30 years that enriched the affluent at the expense of the public infrastructure. Many CEOs in large corporations now make in one day what the average employee makes in a year. The health care battle that is going on is an attempt to reverse this trend.

If you look at the top one per cent chart, you can see the inequality in income started in the 1980s when Ronald Reagan became president. Reagan used the Trojan horse, supply side economics, to rewrite the income tax code so it favored the rich. In the US the GINI coefficient is now above 0.40 that is the threshold that indicates income inequality. Reagan's tax cuts actually fractured the middle class. One third became affluent and the other two third either treded water or declined.

Income tax and the estate tax are the two progressive taxes in the US.  These are the taxes the GOP always tries to cut. You never hear Republicans saying much about sales tax, municipal tax, tariffs, or excise tax because they are regressive. The so called fair taxes or flat taxes that the GOP also talks about are simply synonyms for regressive taxes.

Bush followed in the footsteps of Reagan and also fiddled with the tax codes cutting both the income tax tables for top earning Americans and also cutting the capital gains tax. Bush even suspended the other progressive tax: the Estate tax. Bush also bragged during one of his inauguration balls that his base was the 'have mores.'

There are three words that explain the decline of the middle class in the US. They are "the Republican Party.'

Posted by Jared Bernstein

Even before we got to the White House, the President, the Vice President, and the economic team were crafting policies designed to offset the deepest recession since the Great Depression. Back in mid-December of last year, I remember a meeting in Chicago, with the snow swirling outside, as we began to plan the Recovery Act, the financial stabilization plan, and housing relief, all in the context of a budget that would bring down the trillion-plus dollar deficit we were about to inherit as quickly as possible.

I also remember the Vice President talking about the difficulties facing the middle class, struggles that predated the recession. With the campaign fresh in their minds, he and the President recalled that even in supposedly good times, when the economy was expanding and unemployment was low, the families they met on the trail were having far too much trouble making ends meet.

Saving for college, paying for health care, keeping up with the mortgage payments … just making their basic budgets balance out at the end of the month seemed awfully hard in an economy that was supposedly solid.

Of course, that solid economy was fading fast; the recession was a year old, unemployment was rising, and helping people get back to work had become our top priority. But the longer-term, structural challenges that have been facing the middle class since long before the recession began were never far from the President’s mind, which is why, shortly thereafter, he asked the VP to chair the Middle Class Task Force.

Today, in August of 2009, we’re faced with yet another set of realities. After falling at a rate of about 6% from the last quarter of 2008 through the first quarter of this year, a rate of decline we hadn’t seen in half a century, the economy contracted at a 1% rate in the second quarter of 2009.

Yes, our economy is still ailing, but six months ago, economists worried the recession would descend into depression; now they’re asking when recession will become recovery.

Here in the White House, however, recovery means something very specific, and it’s different than what economists generally mean when they talk about it. According to the panel that decides when recessions officially begin and end, you don’t need job growth or falling unemployment to declare that a recovery is underway. In fact, in the last two recoveries, it took 15 and 19 months, respectively, before the unemployment rate peaked.

That definition doesn’t work for us. No jobs, no recovery.

But—and this is the real subject of this post—job growth isn’t enough either. Remember, unemployment fell to below 5% at the end of the last expansion, but middle-income families ended up worse off, in real dollar terms, than they were before that expansion began. The productivity of our economy increased by 19% from 2000 to 2007, but the real median income of working-age households fell $2,000. The share of Americans living in poverty was actually higher in 2007 than it was in 2000.

How could this happen? In fact, the arithmetic is disarmingly simple. If the economy’s growing, but middle-class and low-income families are falling behind, then the growth must be accruing to the top of the scale. And that’s exactly what happened.

Some of the best data on income inequality are collected by two economists: Emmanuel Saez and Thomas Piketty. Their data go back almost to the beginning of the last century, allowing us to make some pretty amazing observations, like the one shown in the figure below.

Income concentration, measured as the share of income going to the top 1% of households, was higher in 2007 (23.5%) than in any year on record going back to 1913, with one ominous exception: 1928, the height of the speculative, bubbly "roaring 20s" and the year before the stock market crashed and the Great Depression began.

For middle-class families to be part of the next recovery, this trend must reverse.

Yes, we want to see a GDP recovery take hold as soon as possible, and once we start seeing robust, consistent job growth we’ll know we’re solidly on track. But even then, we won’t be done: not until the prosperity we’re generating reaches everyone who’s contributing to it, not until all the bakers get their fair slice of the pie—not just the owners of the bakery or the investors in the bakery, but the men and women who are actually doing the work.

Here’s what the President said about this way back in February 2007, when he announced his candidacy:

"… let's be the generation that ensures our nation's workers are sharing in our prosperity. Let's protect the hard-earned benefits their companies have promised. Let's make it possible for hardworking Americans to save for retirement. And let's allow our unions and their organizers to lift up this country's middle class again.

"Let's be the generation that ends poverty in America. Every single person willing to work should be able to get job training that leads to a job, and earn a living wage that can pay the bills, and afford child care so their kids have a safe place to go when they work. Let's do this."
Though he may not have realized at the time, the President-to-be was really describing the work of the Middle Class Task Force. Vice President Biden, the Task Force staff, and our members at all the cabinet agencies will do everything we can to make sure that the next recovery stacks up very differently than the bars in the graph above. The middle class won’t get left behind again.


Jared Bernstein is Chief Economist to Vice President Biden, and Executive Director of the Middle Class Task Force

http://www.whitehouse.gov/blog/

        http://en.wikipedia.org/wiki/Gini_coefficient

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