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David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In the last 72 hours, we’ve finally seen the outlines of the inevitable Democratic civil war that’s been brewing over taxes and spending. Both sides argue that their way is the path to economic prosperity – and so the question is, which side represents a fact-based argument, and which side represents fact-free theorizing?

Before answering that question, let’s first outline which side is which.

On one side is the Obama administration and progressive Democrats, pledging to keep its promise to let the Bush tax cuts for the very wealthy expire on schedule. Most on this side want to reinvest some or all of the recovered tax money and plow it into domestic spending that would rebuild crumbling infrastructure and economically support those hard-hit by the recession.

On the other side are conservative Democrats in Congress who are becoming increasingly brash in their declarations that either today’s middle-class Americans or tomorrow’s middle-class Americans (via. debt interest payments) should have to pay higher taxes or suffer through slashed services/benefits in order to prevent today’s wealthy from paying any more. This is a varied group, but a nonetheless powerful one in its diverse motivations.

For instance, you have many “Blue Dog” Democrats. Afflicted with a debilitating case of Selective Deficit Disorder, these Democrats cite their devotion to deficit hawkery as reason to vote against unemployment benefits – but also defend policies like the Bush tax cuts. Democratic Sen. Ben Nelson is about the best example of this. (more…)

Robert Borosage

 Robert L. Borosage
Co-Director of the Campaign for America’s Future

Health care reform suffered the torments of partisan obstruction. Now gird yourself for financial reform and the perils of bipartisan blight.

In health care, lockstep Republican opposition caused months of delay, and empowered the likes of Connecticut’s embittered Senator Joe Lieberman and Nebraska’s compromised Ben Nelson to exact cankerous concessions to forge a super-majority.

So Washington pundits rail against bitter partisanship. Republican Senator John McCain charges that Obama is to blame for the partisan divide, even though the President wasted months while Max Baucus courted coy Republicans. Senator John Cornyn, the most rabid of Republican obstructionists, damns the partisan process as a reason to oppose the health care bill. This is akin to a gang of thieves lamenting crime in the streets.

Next year, assuming that this health care bill, like a large kidney stone, must eventually be passed, the Congress will turn to financial reform. In the House, Republicans remain in lockstep opposition, providing not one vote for a measure that would take the first steps towards limiting the ability of banks to fleece us again. But in the Senate, we may well witness not the price of partisan rancor, but the blight of bipartisan cooperation.

Senate Banking Committee Chair Chris Dodd put forth a strong legislative proposal, one far better than the administration’s plan. When the Committee’s senior Republican, Alabama’s Richard Shelby, scorned that in an extended rant, Dodd decided to pair up Democrats and Republicans on the committee to come up with bipartisan solutions. And now reports suggest that a bipartisan plan may well be unveiled in January, with Dodd pushing for an early vote.

Hold onto your wallets. We don’t yet know what is in the bipartisan bill, but we do know what has been kicked to the curb. Shelby announced one price for his cooperation: no new agency to protect consumers from financial fraud or abuse. Want Republican cooperation? Then the proposed Consumer Financial Protection Agency – with a mandate to police everything from mortgage fraud to preposterous bank overdraft charges – is verboten. Grateful banking lobbyists will insure him a lucrative retirement.

We continue to suffer a pandemic of bank fraud and abuse. In the housing bubble, mortgage companies rewarded brokers for peddling exotic mortgages to customers that the brokers knew couldn’t afford them and didn’t understand them. Now, banks are raking in record sums from overdraft charges, credit card fees, and preposterous ATM charges. Payday lenders are pocketing the equivalent of 1000% interest from the poorest working people.

The White House has sensibly championed a new agency devoted not to the health of the banks but to the protection of consumers. Already the banking lobby succeeded in weakening the proposal in the partisan House, exempting auto dealers – hell, we know they are honest, right? – and over 90% of all lending institutions, and eliminating the mandate to offer “wonder bread” or plain vanilla loans along with the exotica banks prefer to peddle.

But that was with House Republicans in opposition. In the Senate, the price of bipartisanship is to trash the whole concept. Caveat emptor, baby.

The bipartisan blight is not limited to banking reform. A bipartisan majority is now lining up in the Senate to confirm Ben Bernanke to a second term as head of the Federal Reserve, without demanding an audit of the Fed’s books to review the terms and conditions of the deals he made in shoveling literally trillions in public subsidies and guarantees and swaps to private financial institutions – here and abroad.

Similarly, bipartisan support will be arranged – although with Republicans supplying most of the votes – for the $50 billion supplemental to support the escalation in Afghanistan.

And most pernicious, Senators in both parties are lining up colleagues to support a bipartisan Commission to provide cover for cutting Social Security and Medicare.

Why is bipartisan blight so toxic? Because it generally means that more conservative Democrats will have made common cause with the less rabid reactionaries in the Republican Party. At best, the result reflects the views of powerful entrenched interests that buy into both parties. At worst, it reflects both parties seeking to avoid responsibility for undertaking measures the establishment wants and the vast majority of Americans oppose. The bank bailout stays secreted, while Bernanke gets confirmed. Consumers get ditched. The war gets funded. Seniors take a hit.

Partisan rancor is debilitating; stalemate fatal. But bipartisan accord is too often more affliction than antidote. We’d be far better off getting rid of the Senate filibuster and allowing majorities to rule. Hold them accountable if they fail; re-elect them if they deliver. But don’t give a minority the power either to obstruct or to set the price of bipartisan accord.

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Robert Borosage and Campaign for America’s Future Co-Director Roger Hickey are co-editors of the book, The Next Agenda: Blueprint for a New Progressive Movement.

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

“Don’t make the perfect the enemy of the better,” says the President and congressional insiders when confronted with the sorry spectacle of a health-care bill whose scope and ambition continue to shrink, and whose long-term costs to typical Americans continue to grow. They’re right, of course. But by the same logic, neither the White House nor congressional Democrats will be able to celebrate the emerging legislation as a “major overhaul” or “fundamental reform.” At best, it’s likely to be a small overhaul containing incremental reforms.

Real reform has moved from a Medicare-like public option open to all, to a public option open to 6 million without employer coverage (still in the House bill), to a public option open only to those same people in states that opt for it, or about 4 million (the original Harry Reid version of the Senate bill), to no public option but expanded Medicare (the Senate compromise) to no expanded Medicare at all (the deal with Joe “I love all the attention” Lieberman).

In other words, the private insurers are winning and the public is losing.

Pharmaceutical companies are winning as well. Yesterday, proposals to allow US pharmacies and wholesalers to import prescription drugs from Europe and Canada were defeated in the Senate. No matter that American consumers pay up to 55% more for their prescription drugs than Canadians, or that the measure would have saved the government at least $19.4 billion over ten years (according to the Congressional Budget Office). Big Pharma’s argument that the safety of such drugs couldn’t be assured was belied by the defeat of another proposed amendment that would have allowed drug imports only if their safety and economic benefits were certified by the Secretary of Health and Human Service.

Doctors and hospitals are also winning. More and more of the putative “savings” from health care reform (“savings” should really be understood as projected costs that are under the wildly-escalating costs projected without such savings) rely on constraints on future Medicare spending. But the details of such constraints keep vanishing, while ever more of the messy work of coming up with them is assigned to a so-called Medical Advisory Board that will supposedly recommend them later on. What no one wants to admit is that Congress never actually implements promised Medicare savings. When crunch time comes, it caves in to the AMA and the AARP. In a few years time, when boomers swell the ranks of seniors, and the political power of the AMA and AARP together rival that of Wall Street, the cave-ins will be boggling.

Meanwhile, opponents of abortion are winning, too. Ben Nelson (a Nebraska Democrat who enjoys being the spoiler even as much as Joe Lieberman) is holding out for even more restrictions.

The political reality right now is that Harry Reid will do anything to get sixty votes — which means Lieberman, Nelson, and even Olympia Snowe are able to use extortion on behalf of Big Insurance, Big Pharma, the AMA, and abortion foes. The President, meanwhile, remains eerily above the fray. Having closed deals months ago with Big Insurance, Big Pharma, and the AMA — in order to get their support in exchange for guaranteeing them big profits — his only apparent interest is keeping the deals going while helping Reid corral sixty votes for just about anything. (The deals have caused some awkwardness for the White House. Drug importation would have cost Big Pharma far more than the $80 billion price tag it agreed to, forcing the White House to oppose importation even though the President had publicly supported it during his presidential campaign last year, and even though John McCain supported yesterday’s amendment.)

Is the effort worth still worth it? Yes, but just. Private insurers will have to take anyone, regardless of preconditions. And some 30 million people who don’t now have health insurance will get it. But because Big Insurance, Big Pharma, and the AMA will come out way ahead, the legislation will cost taxpayers and premium-payers far more than it would otherwise. Cost controls are inadequate; in fact, they barely exist. If Wall Street’s top brass are “fat cats,” as the President described them last weekend, the top brass of Big Insurance, Big Pharma, and the AMA are even fatter. While they don’t earn as much, they’re squeezing the public for even more.

We are slouching toward health-care reform that’s better than nothing but far worse than we had imagined it would be. Even those of us who have seen legislative sausage-making up close, even those of us who never make the perfect the enemy of the better, are concerned. That two or three senators are able to extort as much as they have is appalling. Why hasn’t Reid forced much of the bill into reconciliation, requiring only 51 votes? Why has the President been so cowed? In all likelihood, the White House and the Dems eventually will get a bill they can call “reform,” but they will not be able to say with straight faces that the reform is a significant improvement over the terrible system we already have.

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org. 

Jane Hamsher

By Jane Hamsher
Founder of Firedoglake

New compromise measures supported by Diane Feinstein and Arlen Specter may pave the way for the passage of the Employee Free Choice Act (EFCA).

With 900,000 union members in the state of Pennsylvania, the Arlen Specter firewall appears to be crumbling.  He knows he can’t win a Democratic primary in Pennsylvania without labor, and they have made it clear that their support is contingent on his vote on Employee Free Choice.  

Which is why Penny Pritzker and fellow billionaires are getting nervous, publicly breaking with the White House and President Obama over his support for the bill.

The “centrist” Dems of the Senate, led by Tom Harkin, know they won’t be able to shrug and say “what can we do, we only have 59 votes” much longer.  They have thus been trying to write an acceptable compromise so the party’s progressives (including the unions) don’t decide to stay home when Specter and others need their help in the 2010 elections. 

According to the National Journal:

[Diane Feinstein's] proposal would replace the card-check provision, which would allow workers to unionize if a majority signed authorization cards and strip a company’s ability to demand a secret ballot election. “It’s a secret ballot that would be mailed in … just like an absentee ballot. The individual could take it home and mail it in,” Feinstein said. If a majority mailed the ballots to the National Labor Relations Board, the NLRB would recognize the union.

As Harkin says, the Feinstein compromise has the advantage of “protecting the secret ballot, so people can do it in private,” which neutralizes that particular right-wing criticism of the bill.  

The other bone of contention has been arbitration clause of the Employee Free Choice Act.  Specter himself supports “last best offer” arbitration.  It’s also called “baseball arbitration,” and has incentives to get both parties to quickly make their best, most reasonable offer.  Bill Samuel of the AFL-CIO says “we’re open to that.”

Labor will no doubt be disappointed with such sacrifices to the bill, but if it means getting something passed, they will probably be happy to make these concesssions which satisfy the demands of critics like Blanche Lincoln, Mark Pryor, Jim Webb, Michael Bennet, Mark Udall and Ben Nelson.  

George McGovern was recently dis-invited from the Progressive Magazine’s 100th anniversary event because of his outspoken opposition to the bill on behalf of his good friend Rick Berman.  If McGovern is interested in reclaiming his reputation among progressives as something more than the pawn of a right wing astroturfing scumbag, he now has the opportunity to acknowledge that these compromises would satisfy his concerns.

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Follow Jane Hamsher at firedoglake.com and on Twitter