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A senior White House official has confirmed that Vice President Joe Biden will take the lead on the administration’s next phase China policy.

While the Departments of State and Treasury have held important functional roles in conducting the China-US Strategic and Economic Dialogue meetings, raising the bilateral status of US-China relations with ongoing meetings between two senior US Executive Branch officials with two of China’s most senior leaders, Vice Premier Li Keqiang and State Councillor Dai Bingguo, there has been a general sense that neither Timothy Geithner nor Hillary Clinton and her team were comprehensively driving US-China policy.

The White House official made clear that the coming shift in the locus of US-China policy management was not a critique of either Clinton or Geithner’s management of the China portfolio — but rather, the rise of Hu Jintao heir apparent and current Vice Premier Xi Jinping as the likely next President of China created certain practical challenges in dealing with him on a same-status level throughout much of 2012 until Xi’s accession to the presidency is formalized.

The view of some of the administration’s China-handlers is that management of US-China policy has become so central to a vast array of other policy challenges that the administration’s approach needs to be both broad and managed with “a deep and senior bench.”  The evolution of many functional offices at the Department of State and Treasury tasked with various line items in the China-US Strategic and Economic Dialogue has helped stabilize many aspects of the relationship and has helped to benchmark meeting to meeting progress on core concerns. (more…)

Newt Gingrich has done it again. With his new tax plan he has raised the bar from irresponsibility to recklessness.

Every dollar estimate I’m about to share with you comes from the independent, non-partisan Tax Policy Center — a group whose estimates are used by almost everyone in Washington regardless of political persuasion.

First off, Newt’s plan increases the federal budget deficit by about $850 billion — in a single year!

To put this in perspective, most forecasts of the budget deficit cover ten years. The elusive goal of the White House and many on both sides of the aisle in Congress is to reduce that ten-year deficit by 3 to 4 trillion dollars.

Newt goes in the other direction, with gusto. Increasing the deficit by $850 billion in a single year is beyond the wildest imaginings of the least responsible budget mavens within a radius of three thousand miles from Washington.

Imagine what Standard & Poor’s or Moody’s or Fitch would do if it became law. We’d go directly from a triple-A credit rating to triple X — the veritable porn star of fiscal mayhem. Interest on our debt would become larger than most of the rest of the budget.

Most of this explosion of debt in Newt’s plan occurs because he slashes taxes. But not just anyone’s taxes. The lion’s share of Newt’s tax cuts benefit the very, very rich.

That’s because he lowers their marginal income tax rate to 15 percent — down from the current 35 percent, which was Bush’s temporary tax cut; down from 39 percent under Bill Clinton; down from at least 70 percent in the first three decades after World War II. Newt also gets rid of taxes on unearned income — the kind of income that the super-rich thrive on — capital-gains, dividends, and interest. (more…)

Not with a bang but a whimper.

Not a surprise, but disheartening on many levels. Let us count the ways:

Dysfunctionality: The deficit reduction committee grew out of the debt ceiling debacle, and any child of that process was doomed to disappoint. It’s yet another example of legislators turning to a process solution as opposed to doing their jobs. The Congress is largely dysfunctional, unable to craft policy solutions to our biggest challenges.

A Pox on One of Their Houses: The Democrats on the committee went much further onto the Republicans side of the field, offering plans that were to the right of Simpson-Bowles or Gang of Six in terms of balancing spending cuts and revenue increases. The Republicans came a slight bit out of their comfort zone by offering minor revenues ($300 billion at one point) but offset this by a factor of 10+ by offering it only in tandem with locking in the Bush cuts, costing $3.6 trillion.

The Wrong Deficit: The deficit we should be fighting now is not the budget deficit: it’s the jobs deficit, but policies to help on that front are nowhere to be seen (Democrats tried, I believe, to extend the payroll tax cut and Unemployment Insurance extension but never even got close).

No Deal Better Than Bad Deal: The automatic cuts take place in 2013. Though they lack balance (they’re all cuts; no revenues) they’re a better deal than plans that were being kicked around by the committee in its dying days. Some versions of those plans were too harsh to Medicare beneficiaries and, as noted, locked in the Bush tax cuts.

That Is, as Long as the Trigger Holds: Republicans are already talking about reconfiguring the trigger to cut defense less and non-defense more, something Democrats must stand firmly against. If it is shown — and as of yet, this case has not been made — that cuts of $55 billion per year on the $500+ billion defense budget actually compromise national security, then the only acceptable alternative is to reduce cuts to the non-defense budget or raise the needed revenues to achieve the required deficit reduction.

(By the way, I see here that Gov. Romney is complaining about “a $600 billion cut to our military.” That’s a 10-year figure, to be compared to about a defense budget of about $6 trillion.)

Is There Anything to Feel Good About Here? The only thing I can think of is that the Republicans did admit that new revenues need to be part of a deal… like I said, they hardly crossed that Rubicon before running back to the other shore advocating for huge tax cuts. But, sad to say, in this day and age, that was progress.

Also, I should note that the 10-year U.S. Treasury bill ended the day with a yield below 2%. Markets still view the U.S. as a safe port in a stormy world. Even our Congress has been unable to destroy our standing, though not for lack of trying.

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Jared Bernstein joined the Center on Budget and Policy Priorities in May of 2011 as a senior fellow. From 2009 to 2011, Bernstein was the chief economist and economic adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Befpre joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute in Washington, D.C. Between 1995 and 1996, he held the post of deputy chief economist at the U.S. Department of Labor.

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This post originally appeared at Jared Bernstein’s On The Economy blog.

President Obama’s speech to Congress tonight reset the political battle lines and put Progressives back on the offensive.

The speech included provisions that Republicans in Congress may actually agree to pass — like continuing the payroll tax holiday that if allowed to lapse would affect the paychecks of virtually every American worker. But it also made the case for bold initiatives to rebuild America’s infrastructure and directly create jobs through a teacher corps and youth jobs program. These bolder proposals are critically necessary to jump start the economy, and Obama is betting — correctly — that if they fail to support them, Republicans will pay a political price next year.

What was needed was a package of proposals that were bold, projected urgency, and will create jobs now. The president delivered.

Obama explicitly rejected the dangerous, fallacious notion that the path to long-term economic growth runs through the valley of economic austerity.

He clearly defined the fundamental difference in values — and economic philosophy — between progressive Democrats and right wing Republicans. (more…)

Whenever protectionists like myself demand that the U.S. government do something to stand up for America in global trade, we are shouted down with the stern admonition, “You’ll start a trade war.”

I wish.

The reality is that nobody in America is going to start a trade war, for the simple reason that we are already in one. Foreign governments understand, as ours does not, that international trade is an arena of national rivalry, and they play the game in their own national interests. Our government is hostage to an outdated 19th-century economic theory of global harmony, and on this basis conducts our trade relations with blissful naiveté.

Am I saying that our policy is determined by a theory? No. It’s quite obviously determined by the campaign contributions of the multinational (aka “who cares about America?”) corporations who profit from it. But it is this theory that makes their demands respectable. All the money in the world couldn’t bribe Congress to pass a law requiring everyone to roller-skate to work; policy always requires some non-laughable justification.

Thanks for nothing, David Ricardo. You’ve made a fine mess.

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Voter fraud is virtually nonexistent in America, but this imaginary crime still serves to justify a wave of onerous new voter registration laws—often requiring a state-issued photo ID—that Republican legislators have rapidly spread across the nation. The implications for the 2012 elections are huge.

“The overall idea is pretty obvious,” says Frances Fox Piven, author of three books outlining America’s unusually harsh and restrictive voting laws. “Both parties expect close elections in 2012, and if you peel off just a couple percentage points, you can determine the outcome.”

Piven points to Wisconsin, where protests over a law passed earlier this year rendering public-employee unions toothless were followed by the imposition of a restrictive voter ID law by Gov. Scott Walker and Republican majorities in the state legislature. “We saw labor protests of unprecedented size and intensity over limiting their voice as workers,” Piven says. “And then [protesters] were greeted with a law to limit their power electorally, too.”

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Yesterday evening I attended an event sponsored by my U.S. Representative, Jim Moran (D-VA). I accepted an invitation I received from his email list to a community forum called “Principles & Priorities: How would you balance the budget?”

I’m no dummy and I was expecting political theater, but I thought at least the theater would be staged by Representative Moran, a centrist Democrat who generally votes the party line, though he sometimes surprises and delights like his 2002 vote against the Iraq war resolution.

How wrong I was. Representative Moran didn’t even show up until it was halfway over to deliver his prepared remarks.

The meeting was called to order and, it turns out, convened by the Concord Coalition, the right-wing group dedicated to deficit-cutting and fiscal responsibility. We received a fiscal briefing complete with PowerPoint pie charts that showed how the “entitlements crisis” is eating our budget. Then we were broken into small groups to discuss lists of proposed solutions.

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Recently I debated a conservative Republican who insisted the best way to revive the American economy was to shrink the size of government. When I asked him to explain his logic he said, simply, “government is the source of all our problems.” When I noted government spending had brought the economy out of the previous eight economic downturns, including the Great Depression, he disagreed. “The Depression ended because of World War Two,” he pronounced, as if government had played no part in it.

A few days later I was confronted by another conservative Republican who blamed the nation’s high unemployment rate on the availability of unemployment benefits. “If you pay someone not to work, they won’t,” he said. When I pointed out unemployment benefits couldn’t possibly be the cause of joblessness because there are now about five job seekers for every job opening, he scoffed. “Government always makes things worse.”

Government-haters seem to be everywhere.

Congressional Republicans, now led by House Majority Leader Eric Cantor, hate government so much they’re ready to sacrifice the full faith and credit of the United States in order to shrink it.

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Washington was built on a swamp. In the summer, temperatures can reach over 100 degrees — as they did over the last few days when I made the rounds of Washington Democrats, repeatedly asking why no bold jobs plan is emerging.

Here’s a sample of their responses:

“Dead in the water. We’ll be lucky if we get votes to raise the debt ceiling without major spending cuts this year and next.”

“Are you kidding? It’s all budget deficit, budget deficit, budget deficit. Nobody’s thinking about anything else.” (more…)

As the debate heats up over Elizabeth Warren to head the Consumer Financial Protection Bureau, I took a step out on my own. I got a divorce. I am no longer a wholly owned subsidiary of Wells Fargo Bank.

First Wells Fargo acquired the bank I’d been banking in. Then Wells Fargo acquired my mortgage. The roof over my head and the little savings accounts where my kids manage their newspaper money were just parts of Wells Fargo’s diversified portfolio. So we left.

I opened a new account at a community bank near me. It has exactly the same tools for on-line banking, check-cards and so forth that I’ve come to expect, and better interest rates on every product from checking to CDs to my kids’ little savings accounts. I’m even better off with ATMs. (more…)