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Editorial

De-Criminalizing Children

December 17, 2009
The New York Times

As many as 150,000 children are sent to adult jails in this country every year — often in connection with nonviolent offenses or arrests that do not lead to conviction. That places them at risk of being raped or battered and increases the chance they will end up as career criminals.

To fix this problem, Congress needs to properly reauthorize the Juvenile Justice Delinquency and Prevention Act of 1974, under which states agreed to humanize juvenile justice policies in exchange for more federal aid. This act was largely bypassed in the 1990s when unfounded fears of an adolescent crime wave reached hysterical levels.

When it reauthorizes the law — it is already three years late — Congress should make it illegal for states to place children in adult prisons, perhaps with the exception of truly heinous criminals.

The House has yet to introduce a new bill; in the Senate, an updated version has yet to be voted out of the Judiciary Committee. The Senate bill is less than ideal, but it does encourage the states to de-emphasize the practice of detaining children in adult jails before trial and requires them to better protect young people who end up there. Several states have begun to reform their systems: housing young people in juvenile facilities — where they are better protected and can get mental health treatment — even if they have been convicted in adult courts. The current version of the law threatens states with loss of federal aid if they make that decision. The Senate bill would do away with that language.

The bill also would require states to phase out policies under which children are detained in either juvenile or adult facilities for offenses like violating curfew or smoking. These children should be dealt with through community-based counseling or family intervention programs, which are better for the child and for taxpayers.

In addition, the bill increases financing for mentoring, drug treatment, mental health care and other programs that have been shown to keep children out of custody in the first place. And it would require states to closely monitor — and address — racial inequities in their system. Studies show that black and Hispanic children get harsher treatment at all levels of the juvenile justice system than white children.

The Senate bill is not perfect. But it represents a welcome step away from the cruel and self-defeating policies that subject children to irreparable harm at the hands of the state and puts them on a path that too often leads to a lifetime spent behind bars.

    De-Criminalizing Children, NYT, 17.12.2009, http://www.nytimes.com/2009/12/17/opinion/17thu3.html

House Passes Defense Bill, Rushes Toward Recess

December 16, 2009
Filed at 2:02 p.m. ET
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- The House has passed a $636 billion Pentagon spending bill that funds the wars in Iraq and Afghanistan and provides a 3.4 percent pay hike for military personnel.

Approving the defense bill was one of several major must-do tasks the House must address before its planned adjournment for the year at the end of the day.

To accomplish that, Democratic leaders attached to the defense bill numerous temporary extensions of programs about to expire at the end of the year. Those included two-month extensions for federal highway programs and unemployment benefits.

The defense bill includes $128 billion for the war efforts in Iraq and Afghanistan, but does not have money for the troop surge in Afghanistan recently ordered by President Barack Obama.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) -- The House launched a frenetic day of legislating Wednesday, seeking to wrap up such end-of-session tasks as financing the military, helping the jobless and permitting the government to run up more debt.

Lawmakers, with one eye on the door, plan to conclude the day with a vote on a $174 billion jobs bill combining help for state and local governments with spending on infrastructure and extended benefits for the jobless. Half of that comes from diverting money from the Wall Street bailout fund.

''We've already put more than enough into shoring up Wall Street. Now we need to focus on creating jobs for the Americans that will rebuild our economy from the bottom up,'' said Rep. Chellie Pingree, D-Maine.

While House members look to vacations and trips to Copenhagen for the climate summit, the Senate is likely to work into Christmas week as Democrats make their final push to pass a health care overhaul bill.

The Senate won't take up the jobs bill until next year and much of Wednesday's House action would simply postpone until early next year a host of difficult issues, such as long-term financing of highway and other infrastructure projects and dealing with controversies surrounding the anti-terror USA Patriot Act.

An exception is the $636 billion Pentagon budget bill, which has been held back to serve as a locomotive to tug a bunch of unrelated provisions into law as Congress rushes to finish its work in the dwindling days of this year.

The defense bill includes $128 billion to finance the war efforts in Iraq and Afghanistan, but does not pay for the increase in troop strength in Afghanistan recently ordered by President Barack Obama.

Other measures to be included in the defense bill include two-month extensions of federal jobless benefits approved as part of the economic stimulus package in February, health insurance subsidies for the unemployed and several provisions of the Patriot Act that are set to expire.

The spate of two-month extensions is required because the House and Senate have simply run out of time to iron out Congress' typical flood of year-end business, as the notoriously balky Senate is tied up with the health care overhaul bill.

''In a world of alternatives, that's the one we have,'' said House Majority Leader Steny Hoyer, D-Md., acknowledging that the need to revisit so many controversial items early next year will be a huge headache for Democrats, who control Congress.

Particularly troublesome is must-pass legislation to make sure the government doesn't default on its obligations when it hits its $12.1 trillion limit on borrowing in the coming days. The bill would boost the ceiling by $290 billion, giving the Treasury another six weeks of borrowing power before Congress will have to act again.

Plans for a far bigger increase in the federal debt limit that would have ensured lawmakers didn't have to vote on it before next year's midterm elections fell through.

Democratic leaders had proposed a huge increase of about $1.8 trillion, but ran into trouble from fiscal conservatives in their own party, particularly Senate moderates who wanted to tie the ceiling increase to creation of a task force on deficit reduction.

Hoyer also said the House will approve a stopgap measure to ensure that the Pentagon isn't deprived of money because of congressional delays in approving the defense bill.

House action on all those bills would conclude its major tasks for the year. It still would have to wait for the Senate, where debate could spill over into Christmas week, depending on Senate action on the health care bill.

A host of tax issues would be ignored entirely, including action to prevent the estate tax from expiring Jan. 1. The tax is set to disappear in 2010 but return in 2011 at a rate of 55 percent for estates over $1 million. Also off the agenda is the extension of about 30 business-related tax breaks that will end Dec. 31.

It's expected that Congress will have to act retroactively to address these tax issues next year.

Action on the defense bill would close out congressional action on 12 spending bills to fund agency operating budgets for the fiscal year that began Oct. 1.

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    House Passes Defense Bill, Rushes Toward Recess, NYT, 16.12.2009, http://www.nytimes.com/aponline/2009/12/16/us/politics/AP-US-Congress.html

House Approves Tougher Rules on Wall Street

December 12, 2009
The New York Times
By CARL HULSE

WASHINGTON — The House approved a Democratic plan on Friday to tighten federal regulation of Wall Street and banks, advancing a far-reaching Congressional response to the financial crisis that rocked the economy.

After three days of floor debate, the House voted 223 to 202 to approve the measure. It would create an agency to protect consumers from abusive lending practices, set rules for the trading of some of the sophisticated financial instruments that fueled the crisis, and take steps to reduce the threat that the failure of one or two huge banks or investment firms could topple the entire economy.

Whether all of those measures will become law, however, is uncertain because the Obama administration wants certain revisions and the Senate will not take up its version of the legislation until next year.

The Democratic authors of the House legislation hailed the bill as the biggest change in oversight of Wall Street since the Great Depression, and said they believed they had struck a careful balance between protecting the public and the economy while not stifling economic growth and market forces.

“We have a set of rules in place that will allow the most productive parts of the free market economy, and particularly the financial system, to play the role they should play, but with much less chance of abuse,” Representative Barney Frank, Democrat of Massachusetts and a main architect of the measure, said after the vote.

The approval of the bill is the most significant step lawmakers have taken to confront the financial crisis since the $700 billion bailout package was rammed through Congress at the peak of the emergency more than a year ago. The bill represents an attempt to address comprehensively what many of its supporters have called the underlying causes of the collapse — reckless risk-taking unrestrained by regulation.

No Republican voted for the measure, and 27 Democrats, most from more conservative districts, broke ranks with their party. Republicans strongly criticized the Democratic legislation, saying it could restrict the availability of credit, cause job loss and lead to future bailouts of failing businesses.

“The array of new regulations and taxes on consumers, investors and businesses will destroy jobs and further undermine the fragile economy,” Representative Spencer Bachus of Alabama, the senior Republican on the Financial Services Committee, said.

The bill would create, at a cost that could run into the billions, a Consumer Financial Protection Agency in an attempt to head off the kinds of lending practices that led many homeowners to take on mortgages they could not afford.

The bill would bring regulation for the first time to a portion of the over-the-counter market for derivatives. It would create a process for dealing with troubles at very large financial institutions that might pose a risk to the financial system and the economy, and require large firms to contribute to a fund to help with an orderly dissolution of those institutions if they are in danger of failing.

And the bill includes a number of other provisions to address executive compensation, investor protections and regulation of hedge funds.

Before approving the measure, House Democrats held off an attempt led by Representative Walt Minnick, Democrat of Idaho, to replace the proposed new consumer protection agency with a council made up of existing regulators.

He and other moderate Democrats, joined by Republicans and much of the banking industry, argued the new agency — a central element of the overhaul — represented an unnecessary bureaucratic approach that would give the federal government excessive control over mortgages, credit cards and other financial products.

“How many new government agencies are necessary to accomplish this task?” asked Representative Dan Boren, Democrat of Oklahoma. Their effort was defeated on a vote of 223 to 208, removing a final obstacle to the measure.

In other important preliminary votes, lawmakers slightly scaled back the bill’s ambitions to address objections from powerful financial interests.

Heeding complaints from banks, the House rejected an effort to allow bankruptcy judges to restructure mortgage payments, a plan that has passed the House before but not the Senate.

House members also agreed to relax some of the proposed new controls on trading in derivatives. Rather than subject all over-the-counter derivatives to open trading, the bill would subject such derivatives only if they were traded between Wall Street firms, or with a major player like the American International Group. But the transactions between dealers and customers will remain largely hidden, so customers will not be able to compare the prices they are being charged with the prices charged to other customers.

The overhaul of Wall Street regulation is a top domestic priority of the Obama administration, which supported the House bill and applauded its approval. But Treasury Secretary Timothy F. Geithner signaled that the administration would seek changes in any final measure.

Despite the House action, final legislation is not imminent. The Senate is still developing its own measure for debate early next year and any Senate bill is likely to differ substantially from the House measure, necessitating further negotiations.

Most Democrats agreed that stiffened regulation of the financial services industry was warranted by the events leading up to the financial crisis. Representative Steny H. Hoyer of Maryland, the House majority leader, cited what many considered a lack of adequate regulation during the administration of President George W. Bush as a central reason for the economic collapse.

“This bill puts the referees back on the field,” Mr. Hoyer said.

The chief argument in the House centered on the Democratic proposal that would assess large financial companies a fee to create a $150 billion fund to cover the costs of dissolving companies that pose a threat to the economy.

Democrats said the fund did not amount to a reserve for bailouts since it would not be used to keep companies afloat but would instead lead to a more orderly shutdown and would be paid for by large companies, not taxpayers.

Republicans, trying to capitalize on public frustration with financial bailouts, said that failing firms should instead go through normal bankruptcy proceedings.

“We just think at the end of the day that $150 billion in a permanent bailout fund is not the direction the American people want this nation to go,” said Representative Mike Pence of Indiana, the No. 3 Republican in the House.

Both sides saw the vote as a political opening in the coming midterm elections. Republicans sought to turn the issue on dozens of potentially vulnerable Democrats in swing districts, noting that they had opposed a Republican procedural move that would have shut down the bailout fund and put the money toward paying off the national debt.

 

Floyd Norris contributed reporting from New York.

    House Approves Tougher Rules on Wall Street, NYT, 12.12.2009, http://www.nytimes.com/2009/12/12/business/12regulate.html

Editorial

The Ban on Abortion Coverage

November 10, 2009
The New York Times

When the House narrowly passed the health care reform bill on Saturday night, it came with a steep price for women’s reproductive rights. Under pressure from anti-abortion Democrats and the United States Conference of Catholic Bishops, lawmakers added language that would prevent millions of Americans from buying insurance that covers abortions — even if they use their own money.

The restrictions would fall on women eligible to buy coverage on new health insurance exchanges. They are a sharp departure from current practice, an infringement of a woman’s right to get a legal medical procedure and an unjustified intrusion by Congress into decisions best made by patients and doctors.

The anti-abortion Democrats behind this coup insisted that they were simply adhering to the so-called Hyde Amendment, which bans the use of federal dollars to pay for almost all abortions in a number of government programs. In fact, they reached far beyond Hyde and made it largely impossible to use a policyholder’s own dollars to pay for abortion coverage.

The bill brought to the floor already included a careful compromise that should have satisfied reasonable legislators on both sides of the abortion issue. The vast majority of people expected to buy policies on the new exchanges would pay part of the premium and receive government tax credits to pay for the rest. The compromise would have prohibited the use of the tax subsidies to pay for almost all abortions, but it would have allowed the segregation and use of premium contributions and co-payments to pay for such coverage. A similar approach allows 17 state Medicaid programs to cover abortions using only state funds, not federal matching funds.

Yet neither the Roman Catholic bishops nor anti-abortion Democrats were willing to accept this compromise. They insisted on language that would ban the use of federal subsidies to pay for “any part” of a policy that includes abortion coverage.

If insurers want to attract subsidized customers, who will be the great majority on the exchange, they will have to offer them plans that don’t cover abortions. It is theoretically possible that insurers could offer plans aimed only at nonsubsidized customers, but it is highly uncertain that they will find it worthwhile to do so.

In that case, some women who have coverage for abortion services through policies bought by small employers could actually lose that coverage if their employer decides to transfer its workers to the exchange. Ultimately, if larger employers are permitted to make use of the exchange, ever larger numbers of women might lose abortion coverage that they now have.

The restrictive language allows people to buy “riders” that would cover abortions. But nobody plans to have an unplanned pregnancy, so this concession is meaningless. It is not clear that insurers would even offer the riders since few people would buy them.

The highly restrictive language was easily approved by a 240-to-194 vote and incorporated into the overall bill, which squeaked through by a tally of 220 to 215. It was depressing evidence of the power of anti-abortion forces to override a reasonable compromise. They were willing to scuttle the bill if they didn’t get their way. Outraged legislators who support abortion rights could also have killed the bill but sensibly chose to keep the reform process moving ahead.

The fight will resume in the Senate, where the Finance Committee has approved a bill that incorporates the compromise just rejected by the House. We urge the Senate to stand strong behind a compromise that would preserve a woman’s right to abortion services.

    The Ban on Abortion Coverage, NYT, 10.11.2009, http://www.nytimes.com/2009/11/10/opinion/10tue1.html

U.S. Considers Reining In ‘Too Big to Fail’ Institutions

October 26, 2009
The New York Times
By STEPHEN LABATON

WASHINGTON — Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution.

The official said the Treasury secretary, Timothy F. Geithner, was planning to endorse the changes in testimony before the House Financial Services Committee on Thursday.

The White House plan as outlined so far would already make it much more costly to be a large financial company whose failure would put the financial system and the economy at risk. It would force such institutions to hold more money in reserve and make it harder for them to borrow too heavily against their assets.

Setting up the equivalent of living wills for corporations, that plan would require that they come up with their own procedure to be disentangled in the event of a crisis, a plan that administration officials say ought to be made public in advance.

“These changes will impose market discipline on the largest and most interconnected companies,” said Michael S. Barr, assistant Treasury secretary for financial institutions. One of the biggest changes the plan would make, he said, is that instead of being controlled by creditors, the process is controlled by the government.

Some regulators and economists in recent weeks have suggested that the administration’s plan does not go far enough. They say that the government should consider breaking up the biggest banks and investment firms long before they fail, or at least impose strict limits on their trading activities — steps that the administration continues to reject.

Mr. Frank, Democrat of Massachusetts, said his committee would now take up more aggressive legislation on the topic, even as lawmakers and regulators continue working on other problems highlighted by the financial crisis, including overseeing executive pay, protecting consumers and regulating the trading of derivatives.

Illustrative of the mood of fear and anger over the huge taxpayer bailouts was Mr. Frank’s recent observation that critics of the administration’s health care proposal had misdirected their concerns — Congress would not be adopting death panels for infirm people but for troubled companies.

The administration and its Congressional allies are trying, in essence, to graft the process used to resolve the troubles of smaller commercial banks onto both large banking conglomerates and nonbanking financial institutions whose troubles could threaten to undermine the markets.

That resolution process gives the government far more sweeping authority over the institution and imposes major burdens on lenders to the companies that they would not ordinarily face when companies go into bankruptcy instead of facing a takeover by the government.

Deep-seated voter anger over the bailouts of companies like the American International Group, Citigroup and Bank of America has fed the fears of lawmakers that any other changes in the regulatory system must include the imposition of more onerous conditions on those financial institutions whose troubles could pose problems for the markets.

Some economists believe the mammoth size of some institutions is a threat to the financial system at large. Because these companies know the government could not allow them to fail, the argument goes, they are more inclined to take big risks.

Also, under the current regulatory structure, the government has limited power to step in quickly to resolve problems at nonbank financial institutions that operate like the failed investment banks Lehman Brothers and Bear Stearns, and like the giant insurer A.I.G.

As Wall Street has returned to business as usual, industry power has become even more concentrated among relatively few firms, thus intensifying the debate over how to minimize the risks to the system.

Some experts, including Mervyn King, governor of the Bank of England, and Paul A. Volcker, the former chairman of the Federal Reserve, have proposed drastic steps to force the nation’s largest financial institutions to shed their riskier affiliates.

In a speech last week, Mr. King said policy makers should consider breaking up the largest banks and, in effect, restore the Depression-era barriers between investment and commercial banks.

“There are those who claim that such proposals are impractical. It is hard to see why,” Mr. King said. “What does seem impractical, however, are the current arrangements. Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.”

The prevailing view in Washington, however, is more restrained. Daniel K. Tarullo, an appointee of President Obama’s, last week dismissed the idea of breaking up big banks as “more a provocative idea than a proposal.”

At a meeting Friday at the Federal Reserve Bank of Boston, the Federal Reserve chairman, Ben S. Bernanke, said in response to a question by a former Bank of England deputy governor that he would prefer “a more subtle approach without losing the economic benefit of multifunction, international firms.”

Republican and Democratic lawmakers generally agree that the “too big to fail” policy of taxpayer bailouts for the giants of finance needs to be curtailed. But the fine print — how to reduce the policy and moral hazards it has encouraged — has provoked fears on Wall Street.

Even before Mr. Frank unveils his latest proposals, industry executives and lawyers say its approach could make it unnecessarily more expensive for them to do business during less turbulent times.

“Of course you want to set up a system where an institution dreads the day it happens because management gets whacked, shareholders get whacked and the board gets whacked,” said Edward L. Yingling, president of the American Bankers Association. “But you don’t want to create a system that raises great uncertainty and changes what institutions, risk management executives and lawyers are used to.”

T. Timothy Ryan, the president of the Securities Industry and Financial Markets Association, said the market crisis exposed that “there was a failure in the statutory framework for the resolution of large, interconnected firms and everyone knows that.” But he added that many institutions on Wall Street were concerned that the administration’s plan would remove many of the bankruptcy protections given to lenders of large institutions.

    U.S. Considers Reining In ‘Too Big to Fail’ Institutions, NYT, 26.10.2009, http://www.nytimes.com/2009/10/26/business/economy/26big.html

Congress Is Split on Effort to Tax Costly Health Plans

October 13, 2009
The New York Times
By DAVID M. HERSZENHORN and ROBERT PEAR

WASHINGTON — A proposed tax on high-cost, or “Cadillac,” health insurance plans has touched off a fierce clash between the Senate and the House as they wrestle over how to pay for legislation that would provide health benefits to millions of uninsured Americans.

Supporters, including many senators, say that the tax is essential to tamping down medical spending and that over 10 years it would generate more than $200 billion, nearly a fourth of what is needed to pay for the legislation.

Critics, including House members and labor unions, say the tax would quickly spiral out of control and hit middle-class workers, people more closely associated with minivans than Cadillacs.

The tax, a provision of the bill to be voted on Tuesday by the Senate Finance Committee, is one of the few remaining proposals under consideration by Congress that budget experts say could lead directly to a reduction in health care spending over the long term, by prompting employers and employees to buy cheaper insurance. Whether it remains in the bill is emerging as a test of the commitment by President Obama and his party to slowing the steep rise of medical expenses.

It is also a prime example of the major differences still to be bridged by Democrats as health care legislation advances to floor debate in both houses.

Under the Finance Committee bill, the tax would be imposed beginning in 2013 on employer- sponsored health plans with total premiums exceeding $8,000 for individuals and $21,000 for families, regardless of whether the coverage was paid for by the employer, the individual or both. The tax would be paid by insurers, who would be expected to pass along the cost to customers.

Critics say that would mean an increase in premiums or in out-of-pocket expenses for employees, raising medical costs for individuals and families.

Supporters say the more likely prospect is that employers would bargain-hunt or take other steps to avoid the tax, putting pressure on insurers to offer cheaper coverage and slowing the rise in medical costs for everyone.

In a preliminary estimate, the Congressional Joint Committee on Taxation calculated that absent any such employer efforts, 14 percent of family health policies and 19 percent of individual policies would be hit by the tax in 2013. By 2019, according to the estimate, 37 percent of family policies and 41 percent of individual policies would be affected. Those numbers rise over time in these calculations because although the initial tax threshold would increase with the economy’s overall inflation, premiums would be expected to rise even faster.

Many Democratic senators, led by the Finance Committee chairman, Max Baucus of Montana, like the idea of the tax, and Mr. Obama embraced it in his speech to Congress on Sept. 9.

“This reform will charge insurance companies a fee for their most expensive policies, which will encourage them to provide greater value for the money,” the president said then. “This modest change could help hold down the cost of health care for all of us in the long run.”

Congress has also heard from many economists, Republicans and Democrats alike, who support the tax.

But House Democrats, led by Speaker Nancy Pelosi and Representative Charles B. Rangel of New York, the chamber’s chief tax-writer, oppose the idea, as do labor unions and businesses. Ms. Pelosi last week floated the idea of taxing insurers’ “windfall profits” as a possible alternative, to supplement the House’s main revenue raiser, an income tax surcharge on the nation’s highest earners.

At least 173 House Democrats, two-thirds of the party caucus, have signed a letter to Ms. Pelosi voicing opposition to the insurance tax .

“The tax, supposedly aimed at Cadillac health plans, would affect millions of middle-class people,” said Representative Joe Courtney, Democrat of Connecticut. “The American people soundly rejected the idea when it was proposed by Republicans in elections last year.”

Under current law, employer-paid premiums for health insurance are not taxable. Experts say this provides a big government subsidy for such coverage, and an incentive for businesses to provide better benefits in lieu of higher wages.

In an unusual alliance reflecting the shared interest of some unions and businesses on the issue, the A.F.L.-C.I.O. and the United States Chamber of Commerce are mobilizing opposition to the tax.

James P. Gelfand, senior manager of health policy at the Chamber of Commerce, said that if the tax is imposed, “employers will have to reduce wages or benefits or increase cost-sharing.” And, he said, “employees will blame employers, not the government.”

Leaders of organized labor, which in recent years has often negotiated for benefits in place of raises, descended on Capitol Hill last week to lobby against the tax, which could hit many health plans covering unionized workers. Larry Cohen, president of the Communications Workers of America, said at least half his members would be in health plans subject to the tax in 2013.

John P. Yrchik, executive director of the Connecticut Education Association, has lobbied Mr. Courtney and other members of the state’s Congressional delegation, noting that the tax would affect teachers in 30 percent of Connecticut towns. In some towns, Mr. Yrchik said, health insurance premiums for teachers’ family policies already exceed $25,000.

Aides to Mr. Baucus, the Finance Committee chairman, said the tax had numerous benefits, and predicted that employers and employees would shop for health plans to avoid it, forcing insurers to rein in costs.

They also cited projections by the Joint Committee on Taxation that about $142 billion of the 10-year total of $201 billion to be raised by the proposal would come from increased income and payroll taxes — evidence, they said, that workers would receive increased wages if employers spent less on health benefits.

But the same expectation that employers would adjust their health plans to avoid the tax was cited by some critics as a potential harm for workers.

“Employers and insurers will reduce their benefits to avoid paying the proposed tax,” said Representative Pete Stark, the California Democrat who heads the Ways and Means Subcommittee on Health. “As a result, middle-class families will be forced to pay more for health care.”

Some experts said that the tax was a complicated, backdoor way to tax employer-provided health benefits, and a number of them maintained that simply ending the tax exemption for such benefits would be a better approach.

Others said the tax would have an uneven impact, falling harder on businesses that, for instance, have older employees or are situated in high-cost regions.

Robert H. Dobson, an actuary at Milliman, an employee benefits consulting firm, said, “The high cost of so-called Cadillac plans has as much to do with the characteristics of the covered population as it does with the richness of the benefits.”

    Congress Is Split on Effort to Tax Costly Health Plans, NYT, 13.10.2009, http://www.nytimes.com/2009/10/13/health/policy/13plans.html

House Votes to Expand Definition of Hate Crimes

October 9, 2009
The New York Times
By CARL HULSE

WASHINGTON — The House voted Thursday to expand the definition of violent federal hate crimes to those committed because of a victim’s sexual orientation, a step that would extend new protection to lesbian, gay and transgender people.

Democrats hailed the vote of 281 to 146, which brought the measure to the brink of becoming law, as the culmination of a long push to curb violent expressions of bias like the 1998 murder of Matthew Shepard, a gay Wyoming college student.

“Left unchecked, crimes of this kind threaten to ruin the very fabric of America,” said Representative Susan A. Davis, Democrat of California, a leading supporter of the legislation.

Under current federal law, hate crimes that fall under federal jurisdiction are defined as those motivated by the victim’s race, color, religion or national origin.

The new measure would broaden the definition to include those committed because of gender, sexual orientation, gender identity or disability. It was approved by the House right before a weekend when gay rights will be a focus in Washington, with a march to the Capitol and a speech by President Obama to the Human Rights Campaign.

Republicans criticized the legislation, saying violent attacks were already illegal regardless of motive. They said the measure was an effort to create a class of “thought crimes” whose prosecution would require ascribing motivation to the attacker.

Representative John A. Boehner of Ohio, the House Republican leader, called the legislation radical social policy.

“The idea that we’re going to pass a law that’s going to add further charges to someone based on what they may have been thinking, I think is wrong,” Mr. Boehner said.

Republicans were also furious that the measure was attached to an essential $681 billion military policy bill, and accused Democrats of legislative blackmail.

Even some Republican members of the usually collegial House Armed Services Committee who helped write the broader legislation, which authorizes military pay, weapons programs and other necessities for the armed forces, opposed the bill in the end, solely because of the hate crimes provision.

“We believe this is a poison pill, poisonous enough that we refuse to be blackmailed into voting for a piece of social agenda that has no place in this bill,” said Representative Todd Akin of Missouri, a senior Republican member of the committee.

On the final vote, 237 Democrats were joined by 44 Republicans in support of the bill; 131 Republicans and 15 Democrats opposed it. The Democratic opponents were a mix of conservatives who were against the hate crimes provision and liberals opposed to Pentagon provisions.

The military bill has yet to be approved by the Senate. But the hate crimes provision has solid support there, and Senator John McCain of Arizona, the senior Republican on the Senate Armed Services Committee, said the overall bill outweighed his own objections to including the hate crimes measure.

Mr. Obama supports the hate crimes provision, though the White House has raised objections to elements of the bill related to military acquisitions. If signed into law, the hate crimes legislation would reflect the ability of Democrats to enact difficult measures with their increased majorities in Congress and a Democrat in the White House.

“Elections have consequences,” Mr. McCain said.

Similar hate crime provisions have passed the House and the Senate in previous years but have never been able to clear their final hurdles. Speaker Nancy Pelosi said Thursday that it was fitting that Congress was acting now, since next Monday is the 11th anniversary of Matthew Shepard’s killing. The hate crimes part of the bill is named for Mr. Shepard and James Byrd Jr., a black man killed in a race-based attack in Texas the same year.

The hate crimes legislation would give the federal government authority to prosecute violent crimes of antigay bias when local authorities failed to act. It would also allocate $5 million a year to the Justice Department to provide assistance to local communities in investigating hate crimes, a process that can sometimes strain police resources. And it would allow the department to assist in the inquiry and local prosecution if requested.

“The problem of crimes motivated by bias,” the measure says, “is sufficiently serious, widespread and interstate in nature as to warrant federal assistance to states, local jurisdictions and Indian tribes.”

Senator Carl Levin, the Michigan Democrat who heads the Armed Services Committee, said that the Federal Bureau of Investigation recorded reports of more than 77,000 hate crimes from 1998 through 2007 and that crimes based on sexual orientation were on an upward trend.

“The hate crimes act will hopefully deter people from being targeted for violent attacks because of the color of their skin or their religion, their disability, their gender or their sexual orientation, regardless of where the crime takes place,” he said.

But Representative Mike Pence of Indiana, the No. 3 House Republican, said the measure could inhibit freedom of speech and deter religious leaders from discussing their views on homosexuality for fear that those publicly expressed views might be linked to later assaults.

“It is just simply wrong,” Mr. Pence said, “to use a bill designed to support our troops to reverse the very freedoms for which they fight.”

Democrats, however, noted that the bill would specifically bar prosecution based on an individual’s expression of “racial, religious, political or other beliefs.” It also states that nothing in the measure should be “construed to diminish any rights under the First Amendment to the Constitution.”

    House Votes to Expand Definition of Hate Crimes, NYT, 9.10.2009, http://www.nytimes.com/2009/10/09/us/politics/09hate.html

House Prohibits Federal Money to Acorn

September 18, 2009
The New York Times
By CARL HULSE

WASHINGTON — The House voted Thursday to deny any federal money to the nationwide community organizing group Acorn, and the Senate reaffirmed its opposition as well after embarrassing videos of a few of the group’s workers became public.

House Republicans added the prohibition on federal money to the Democratic bill on college lending. It was approved by a bipartisan vote of 345 to 75, showing that Democrats also increasingly see a political liability in Acorn, which is short for Association of Community Organizations for Reform Now.

“Acorn has violated serious federal laws, and today the House voted to ensure that taxpayer dollars would no longer be used to fund this corrupt organization,” said Representative Eric Cantor of Virginia, the No. 2 House Republican.

Since 1994, the group has received an estimated $53 million in federal aid.

Bolstered by conservative news media outlets, Republicans have been on a crusade against the group for months, accusing it of voter-registration fraud and claiming it was being protected by Democrats who benefited from its political activities. Matters escalated when some Acorn workers were videotaped offering advice to conservative activists who were posing as people interested in establishing a prostitution business.

The Census Bureau, citing public criticism, had already severed its ties with the group, saying it would not use Acorn in conducting the 2010 census. The Senate voted Monday to deny the group any housing or transportation money.

Despite that vote, Senator Mike Johanns, Republican of Nebraska, on Thursday offered the same ban to add to a measure covering spending by the Interior Department.

Though Senator Dianne Feinstein, the California Democrat in charge of the bill, said there was no money in the measure for Acorn, she said she was willing to accept his proposal without a roll-call vote.

Mr. Johanns, recognizing the political benefits in a vote, insisted on a roll-call tally. “This is such an important issue,” he said, adding that “people all across the country are watching the Senate floor.” His proposal was approved 85 to 11.

Mr. Johanns also said he was preparing a measure that would ban all federal money to Acorn to avoid having to attach the ban to a dozen different spending bills.

In the House, the 75 votes against the prohibition all came from Democrats. One opponent, Representative Jerrold Nadler of New York, said he considered the prohibition to be unconstitutional. Officials at Acorn have called the videotaped incidents isolated. The have begun their own investigation and said workers at other offices reported the conservative imposters to the police.

Acorn’s chief executive, Bertha Lewis, said in a statement, “We’re disappointed that the House took the rare and politically convenient step of attempting to eliminate federal funding for a single organization, one that has been the target of a multi-year political assault stemming variously from the Bush White House, Fox News and other conservative quarters.”

The statement added that the action would have little impact because most of the group’s income comes from members and other supporters. The House financing ban was included in an education bill that would still have to pass the Senate to become law. The Senate prohibitions are also weeks if not months from becoming law.

    House Prohibits Federal Money to Acorn, NYT, 18.9.2009, http://www.nytimes.com/2009/09/18/us/18acorn.html

House Rebukes Wilson for Shouting ‘You Lie’

September 16, 2009
The New York Times
By CARL HULSE

WASHINGTON — Representative Joe Wilson was formally rebuked by the House on Tuesday for his outburst during President Obama’s health care address. The vote came after a Congressional clash over civility that showcased the deep partisan divisions in the House.

In a mainly party line vote of 240 to 179, the House held that by shouting “You lie” during the president’s speech Mr. Wilson, a South Carolina Republican, committed a “breach of decorum and degraded the proceedings of the joint session, to the discredit of the House.”

The resolution was the latest — and many lawmakers hoped final — development in an episode that has generated significant public attention. The outburst prompted millions of dollars in political contributions to both parties and made Mr. Wilson a hero to some and an embarrassment and symbol of Republican disrespect to the president to others.

Seven Republicans joined 233 Democrats in approving the resolution; 12 Democrats joined Mr. Wilson and 166 other Republicans in opposing it.

Leading Democrats said the resolution put on the record that the House “disapproves of the behavior of the representative from South Carolina, Mr. Wilson, during the joint session of Congress held on Sept. 9, 2009,” and was needed to protect the integrity of the House and deter such acts in the future.

“This is about the rules of this House and reprehensible conduct,” said Representative James E. Clyburn of South Carolina, the No. 3 Democrat in the House and a home-state colleague of Mr. Wilson who led the Democratic argument for the resolution.

Democrats characterized the sanction as mild and said they would not have pursued any action at all had Mr. Wilson taken the floor and apologized to his colleagues for disrupting the address.

Mr. Wilson briefly argued his own case Tuesday and refused to offer the apology demanded by House Democrats, saying that Mr. Obama had already accepted his apology and that that should have ended the matter.

“The challenges our nation faces are far bigger than any one member of this House,” said Mr. Wilson, who was comforted and encouraged by his Republican colleagues as he faced the vote against him. “It is time that we move forward and get to work for the American people.”

The three ranking members of the House Republican leadership all took the floor to criticize Democrats for conducting what Representative John A. Boehner of Ohio, the party leader, described as a witch hunt against Mr. Wilson. They accused Democrats of politicizing the incident to shift attention from their internal party struggles over health care legislation.

“Let’s get on with the business of the people,” said Representative Eric Cantor of Virginia, the No. 2 Republican.

While some lawmakers have suggested that Mr. Wilson’s outburst had a racial component, top Democrats played down that view and said they were acting strictly to uphold proper order in the House.

“I did not take a racial connotation from Mr. Wilson’s remarks,” said Representative Steny H. Hoyer of Maryland, the majority leader, who introduced the resolution. “I do believe that there are expressions throughout the country being made that are unusually harsh. I think the attacks being made on Mr. Obama are unusually vitriolic.”

The House historian’s office said no lawmaker had ever previously been held to account for behavior toward the president during an appearance on Capitol Hill — though lawmakers have been cited for personal attacks on a president during routine House debate when the chief executive was not present. House guidelines on the rules of debate say it is impermissible to refer to the president as a liar.

The vote put Republicans in the position of opposing a resolution that condemned behavior virtually all of them had agreed was improper, as has Mr. Wilson himself. Even his wife, Roxanne, conceded on a video put on his campaign Web site that after the speech she asked him, “Who’s the nut that hollered out, ‘You lie or you liar?’ ”

“I couldn’t believe that Joe would say that,” Ms. Wilson said, “but he is very passionate and he is fighting the good fight.”

She said her husband “does not deserve the treatment he is getting from Congress.”

The White House pointedly stayed out of the dispute.

“That’s House business,” said Bill Burton, a White House spokesman. “Congressman Wilson called the White House to apologize. The president accepted his apology.”

The episode has become a political bonanza for both parties as Mr. Wilson and his Democratic challenger in the 2010 election, Rob Miller, have each raised over $1 million in the aftermath, and the two parties have benefited as well.

Mr. Boehner, the Republican leader, said policing such minor activity through a resolution could set a dangerous precedent.

“There has been behavior that has gone around here far more serious than this,” Mr. Boehner said. “My goodness, we could be doing this every day of the week.”

    House Rebukes Wilson for Shouting ‘You Lie’, NYT, 16.9.2009, http://www.nytimes.com/2009/09/16/us/politics/16wilson.html

House Plans to Admonish Rep. Wilson Over Outburst

September 12, 2009
Filed at 2:24 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- Democratic leaders are planning a House vote early next week to admonish Republican Rep. Joe Wilson if he does not apologize on the House floor for yelling ''You lie!'' during President Barack Obama's health care address to Congress.

National attention from the heckling episode has money pouring into Wilson's campaign treasury and that of his 2010 Democratic challenger. Wilson had raised more than $700,000 since the incident as of Friday, according to the National Republican Congressional Committee. His opponent, Rob Miller, had received more than $1 million from 25,000 donors nationwide, said his campaign manager, Lindsay Zoeller.

Democratic leaders initially showed mixed interest in punishing Wilson. But they decided at a meeting late Thursday that they probably will propose a resolution of disapproval early next week if he doesn't apologize to Congress, said Brendan Daly, a spokesman for House Speaker Nancy Pelosi.

While not a formal censure or reprimand, the resolution, if passed as expected, would put Congress on record as condemning Wilson's conduct.

Wilson, who was criticized by Republicans and Democrats for his outburst, told Obama he was sorry shortly after the incident Wednesday night. But he has refused requests from both parties to apologize on the House floor. Wilson's office says the congressman considers his initial apology sufficient.

Obama said Thursday he accepted Wilson's apology, telling reporters that ''we all make mistakes.'' The White House said it considered the matter over, and Pelosi, D-Calif., initially said she wanted move on.

But many Democrats remain angry and have pressed for further action. They say Wilson clearly violated House rules.

''This is about how elected officials should be conducting themselves in the well of the U.S. House of Representatives,'' Rep. James Clyburn of South Carolina, the third-ranking House Democrat, said in an interview Friday.

The White House had no comment on the plan for a House resolution.

Wilson also has taken a more combative tone since his apology.

In a video posted on his campaign Web site, he said he let his emotions get away from him during Obama's speech but added, ''I will not be muzzled. I will speak up and speak loudly.''

Wilson said his critics want to use the incident to silence opponents of health care reform.

''I need your help now,'' he said, soliciting donations.

In 2008, Wilson took 54 percent of the vote in beating Miller, a former Marine.

For their rematch next year, Miller already has raised more money in the past two days than the roughly $625,000 he spent for that race.

Wilson spent nearly $1.3 million for the 2008 cycle. The health care industry -- among South Carolina's largest economic sectors -- has traditionally been his top contributor.

His top 20 career donors include the American Hospital Association, the Lexington Medical Center and the American Dental Association, according to the Center for Responsive Politics.

Wilson shouted ''You lie!'' after Obama said in his address to Congress that illegal immigrants would not be eligible for low-cost health care.

The Democratic proposals explicitly prohibit spending any federal money to help illegal immigrants get health care. Still, Republicans say there aren't sufficient citizenship verification requirements to ensure illegal immigrants are excluded.

Wilson, a former state senator elected to Congress in 2001, is known as a mild-mannered lawmaker with hard-line conservative views. But he has been confrontational in the past.

In 2003, Wilson called it ''unseemly'' and a ''smear'' for the mixed-race daughter of Sen. Strom Thurmond, Essie Mae Washington-Williams, to identify the longtime South Carolina senator as her father after his death. After a public outcry, he said he had the utmost respect for Washington-Williams.

Wilson returned to South Carolina on Friday morning and doesn't plan to make any public appearances Friday or Saturday, his spokesman said.

About 40 people gathered Friday evening outside Wilson's West Columbia office for a rally promoted on blogs. Wilson did not attend. But those gathered said they wanted to show support amid what they called attacks on Wilson's character, and praised him as a hero.

Attendees wore shirts that read ''Palin 2012'' and ''Dare to say NO to Obama and Socialism!''

''Joe's my hero. He said what we all wanted to say to Barack Obama,'' said William Browning, 55.

''Maybe Joe shouldn't have said it in that venue, but he's apologized,'' Browning said. ''I hope he sticks to his guns. If they reprimand him, so be it.''

------

Adcox reported from Columbia, S.C.

    House Plans to Admonish Rep. Wilson Over Outburst, NYT, 12.9.2009, http://www.nytimes.com/aponline/2009/09/12/us/politics/AP-US-Health-Care-Heckling-Wilson.html

In Lawmaker’s Outburst, a Rare Breach of Protocol

September 11, 2009
The New York Times
By CARL HULSE

WASHINGTON — It was a rare breach of the protocol that governs ritualistic events in the Capitol.

In an angry and very audible outburst, Representative Joe Wilson, Republican of South Carolina, interrupted President Obama’s speech Wednesday night with a shout of “You lie!”

Though he later apologized, his eruption — in response to Mr. Obama’s statement that Democratic health proposals would not cover illegal immigrants — stunned members of both parties in the House chamber.

Democrats said it showed lack of respect for the office of the presidency and was reminiscent of Republican disruptions at recent public forums on health care.

“I was embarrassed for the chamber and a Congress I love,” Vice President Joseph R. Biden Jr. said Thursday on ABC’s “Good Morning America.” “It demeaned the institution.”

He said that he had not spoken to President Obama since the speech. But, “knowing the president, I’m sure he accepted the apology,” The Associated Press reported.

After the speech, Rahm Emanuel, the White House chief of staff who sat a few rows in front of Mr. Wilson, said he immediately approached senior Republican lawmakers to encourage them to identify the heckler and urge him to issue an apology quickly.

“No president has ever been treated like that. Ever,” Mr. Emanuel said.

Other Democrats said they did not want to dwell on the outburst or allow it to overshadow what they saw as an effective address by the president. But they also said it bolstered their contention that some Republicans were not interested in constructive dialogue, and they noted that Democratic plans specifically barred coverage for illegal immigrants.

Republicans also said the heckling was out of line. “I think we ought to treat the president with respect,” said Senator Mitch McConnell of Kentucky, the Republican leader, “and anything other than that is not appropriate.”

And the House Republican whip, Eric I. Cantor of Virginia, told ABC on Thursday: “Obviously, the president of the United States is always welcome on Capitol Hill. He deserves respect and decorum.” He said that Mr. Wilson’s apology “was the appropriate thing to do.”

But Representative Steny H. Hoyer of Maryland, the House Democratic leader, said Thursday he considered Mr. Wilson’s apology insufficient. “I think, frankly, he ought to apologize to the House as well,” he told MSNBC.

Mr. Wilson seemed rattled in the wake of his comment, and quickly left the chamber at the end of the speech.

His office later issued an apology, saying: “This evening I let my emotions get the best of me when listening to the president’s remarks regarding the coverage of illegal immigrants in the health care bill. While I disagree with the president’s statement, my comments were inappropriate and regrettable. I extend sincere apologies to the president for this lack of civility.”

Mr. Wilson also phoned the White House and reached Mr. Emanuel, who accepted an apology on behalf of the president.

Democratic campaign officials said that in the first eight hours after Mr. Wilson’s outburst gained attention, his potential Democratic opponent, Rob Miller, received nearly 3,000 individual campaign contributions totaling about $100,000. At the same time, some Republican officials and party allies pushed back, saying too much was being made of the incident and that past presidents had been treated roughly during Congressional addresses.

Critical body language and murmurs of disapproval are typical at presidential addresses and part of the political theater. But members of both parties were trying to recollect such a pointed attack from an individual lawmaker at a presidential address and noted that a similar remark could draw a formal reprimand if delivered at a routine session of the House.

When President Clinton addressed Congress in 1993 to push his health care plan, “both sides of the aisle received the President warmly,” according to a report in The New York Times at the time.

“But when he began talking about raising taxes on tobacco to pay for the plan, or the need to cut Medicare and Medicaid, many on the Republican side of the aisle began snickering, shaking their heads skeptically and making faces at each other,” the article said.

    In Lawmaker’s Outburst, a Rare Breach of Protocol, NYT, 11.9.2009, http://www.nytimes.com/2009/09/11/us/politics/11Wilson.html

Editorial

Climate Loopholes

July 22, 2009
The New York Times
 

The House’s approval of the Waxman-Markey climate change bill earlier this month was a remarkable political achievement and an important beginning to the task of reducing greenhouse gas emissions. But in all the last-minute wheeling and dealing, the House bill acquired two big loopholes that the Senate must close.

The first loophole involves coal-fired power plants. Coal is the world’s most abundant fossil fuel — producing more than half the electricity in the United States — and also its dirtiest, with twice the carbon content of natural gas.

The House bill would limit emissions from coal-fired power plants in two ways. It imposes a cap on emissions from all industrial facilities that tightens slowly over time. It also sets tough performance standards on new power plants permitted after 2009, requiring emissions reductions of 50 percent or more. The bill would help underwrite advanced technologies capable of capturing carbon dioxide and storing it underground.

The bill does not, however, impose any performance standards on existing power plants. And it explicitly removes these plants from the reach of the Clean Air Act. This is a mistake. The overall cap on industrial emissions will not be fully effective for a long time, and, meanwhile, the government should be able to impose lower-emissions requirements on the older, dirtiest plants.

There is little doubt that the Clean Air Act authorizes the Environmental Protection Agency to require existing plants to reduce emissions by, say, using cleaner fuels or increasing efficiency. But the House bill says otherwise, at least when it comes to carbon dioxide. The Senate must fix this problem by writing standards for existing plants into its bill or restoring the E.P.A.’s authority to do so. The old plants simply cannot be let off the hook.

The second loophole involves the tricky matter of offsets. Offsets allow polluters who cannot immediately reduce their own emissions to get credit for reducing emissions elsewhere. A rich country can earn credits by helping a poor country save its rain forests. Domestically, a power company can earn credits by, say, helping farmers capture methane emitted by animal waste ponds or cultivate land in ways that help absorb carbon.

Offsets are an important cost containment mechanism since it is usually cheaper for a company to buy offsets in the near term and gain time to install the new technology necessary to eventually meet its targets. But they can be easily manipulated. Academic studies have found that many of the offsets purchased by industrialized countries under the Kyoto treaty turned out to be bogus or produced far less reductions than advertised.

This is a very real danger with some of the offsets in the House bill. For instance, the bill would allow polluters to meet their requirements not by paying farmers to put new conservation techniques in place but by paying them to keep doing things they were already doing. The result is that money changes hands, but the atmosphere is no better off. Offsets must be real and verifiable, or the integrity of the entire scheme is at risk.

There are risks here. The Senate has already rejected much weaker bills. But the political climate is more favorable now than it has ever been, and Senate Democrats should not settle for half-measures.

    Climate Loopholes, NYT, 22.7.2009, http://www.nytimes.com/2009/07/22/opinion/22wed11.html

House Passes Bill to Address Threat of Climate Change

June 27, 2009
The New York Times
By JOHN M. BRODER

WASHINGTON — The House passed legislation on Friday intended to address global warming and transform the way the nation produces and uses energy.

The vote was the first time either house of Congress had approved a bill meant to curb the heat-trapping gases scientists have linked to climate change. The legislation, which passed despite deep divisions among Democrats, could lead to profound changes in many sectors of the economy, including electric power generation, agriculture, manufacturing and construction.

The bill’s passage, by 219 to 212, with 44 Democrats voting against it, also established a marker for the United States when international negotiations on a new climate change treaty begin later this year.

At the heart of the legislation is a cap-and-trade system that sets a limit on overall emissions of heat-trapping gases while allowing utilities, manufacturers and other emitters to trade pollution permits, or allowances, among themselves. The cap would grow tighter over the years, pushing up the price of emissions and presumably driving industry to find cleaner ways of making energy.

President Obama hailed the House passage of the bill as “a bold and necessary step.” He said in a statement that he looked forward to Senate action that would send a bill to his desk “so that we can say, at long last, that this was the moment when we decided to confront America’s energy challenge and reclaim America’s future.”

Mr. Obama had lobbied wavering lawmakers in recent days, and Secretary of State Hillary Rodham Clinton and former Vice President Al Gore had made personal appeals to dozens of fence-sitters.

As difficult as House passage proved, it is just the beginning of the energy and climate debate in Congress. The issue now moves to the Senate, where political divisions and regional differences are even more stark.

Representative Henry A. Waxman, Democrat of California, a co-sponsor of the bill, called the vote a “decisive and historic action” that would position the United States as a leader in energy efficiency and technology.

But the legislation, a patchwork of compromises, falls far short of what many European governments and environmentalists have said is needed to avert the worst effects of global warming. And it pitted liberal Democrats from the East and West Coasts against more conservative Democrats from areas dependent on coal for electricity and on heavy manufacturing for jobs.

While some environmentalists enthusiastically supported the legislation, others, including Greenpeace and Friends of the Earth, opposed it. Industry officials were split, with the United States Chamber of Commerce and the National Association of Manufacturers opposing the bill and some of the nation’s biggest corporations, including Dow Chemical and Ford, backing it.

Republican leaders called the legislation a national energy tax and predicted that those who voted for the measure would pay a heavy price at the polls next year.

“No matter how you doctor it or tailor it,” said Representative Joe Pitts, Republican of Pennsylvania, “it is a tax.”

Only eight Republicans voted for the bill, which runs to more than 1,300 pages.

Representative John Boehner of Ohio, the Republican leader, stalled the vote by using his privilege as a party leader to consume just over an hour by reading from a 300-page amendment added in the early hours of Friday.

Apart from its domestic implications, the legislation represents a first step toward measurable cuts in carbon dioxide emissions that administration officials can point to when the United States joins other nations in negotiating a new global climate change treaty later this year. For nearly 20 years, the United States has resisted mandatory limits on heat-trapping emissions.

The German chancellor, Angela Merkel, who was in Washington on Friday to meet with Mr. Obama, strongly endorsed the bill even though it fell short of European goals for reducing the emissions of heat-trapping gases.

Mrs. Merkel, a longtime advocate of strong curbs on emissions, has been pushing the United States to take a leading role before the climate negotiations, set for December in Copenhagen.

After meeting with Mr. Obama, she said she had seen a “sea change” in the United States on climate policy that she could not have imagined a year ago when President George W. Bush was in office.

The House legislation reflects a series of concessions necessary to attract the support of Democrats from different regions and with different ideologies. In the months of horse-trading before the vote Friday, the bill’s targets for emissions of heat-trapping gases were weakened, its mandate for renewable electricity was scaled back, and incentives for industries were sweetened.

The bill’s sponsors were making deals on the House floor right up until the time of the vote. They set aside money for new energy research and a hurricane study center in Florida.

The final bill has a goal of reducing greenhouse gases in the United States to 17 percent below 2005 levels by 2020, and 83 percent by midcentury.

When the program is scheduled to begin, in 2012, the estimated price of a permit to emit a ton of carbon dioxide will be about $13. That is projected to rise steadily as emission limits come down, but the bill contains a provision to prevent costs from rising too quickly in any one year.

The bill would grant a majority of the permits free in the early years of the program, to keep costs low. The Congressional Budget Office estimated that the average American household would pay an additional $175 a year in energy costs by 2020 as a result of the provision, while the poorest households would receive rebates that would lower their annual energy costs by $40.

Several House members expressed concern about the market to be created in carbon allowances, saying it posed the same risks as those in markets in other kinds of derivatives. Regulation of such markets would be divided among the Environmental Protection Agency, the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission.

The bill also sets a national standard of 20 percent for the production of renewable electricity by 2020, although a third of that could be met with efficiency measures rather than renewable energy sources like solar, wind and geothermal power.

It also devotes billions of dollars to new energy projects and subsidies for low-carbon agricultural practices, research on cleaner coal and electric vehicle development.

Mr. Gore, who shared a Nobel Peace Prize for his work on global warming, posted an appeal on his blog for passage of the legislation.

“This bill doesn’t solve every problem,” Mr. Gore said, “but passage today means that we build momentum for the debate coming up in the Senate and negotiations for the treaty talks in December which will put in place a global solution to the climate crisis. There is no backup plan.”

    House Passes Bill to Address Threat of Climate Change, NYT, 27.6.2009, http://www.nytimes.com/2009/06/27/us/politics/27climate.html?hp

House Unveils Health Bill, Minus Key Details

June 20, 2009
The New York Times
By ROBERT PEAR and DAVID M. HERSZENHORN

WASHINGTON — House Democrats on Friday answered President Obama’s call for a sweeping overhaul of the health care system, unveiling a bill that they said would cover 95 percent of Americans. But they said they did not know how much it would cost and had not decided how to pay for it.

The proposal would establish a new public health insurance plan to compete with private plans. Republicans and insurance companies strenuously oppose such an entity, saying it could lead to a government takeover of health care. The draft bill would require all Americans to carry health insurance. Most employers would have to provide coverage to employees or pay a fee equivalent to 8 percent of their payroll. The plan would also end many insurance company practices that deny coverage or charge higher premiums to sick people.

“Health insurance for most American families is just one big surprise,” said Representative George Miller of California, the chairman of the Education and Labor Committee. “When you go to use it, you find out it’s not quite as it’s represented, and you spend hours on the phone with exclusions and discussions and referrals to other legal documents that you didn’t have at the time you purchased it.”

The 852-page House bill, as expected, is more expansive than the legislation taking shape in the Senate, where work on the issue bogged down this week after early cost estimates came in far higher than expected. The initial price tag for a measure drafted by the Senate Finance Committee, for example, was $1.6 trillion over 10 years.

Similar sticker shock could hit House members when they see the cost of their bill, which incorporates many ideas from health policy experts about how to fix the health system.

Industry critics of the emerging Senate bill are likely to have even more objections to the House version, but House Democratic leaders can probably push their measure through on a party-line vote.

Under the House bill, health insurance would be regulated by a powerful new federal agency, headed by a presidential appointee known as the health choices commissioner.

The draft bill was unveiled by three committee chairmen — Mr. Miller; Henry A. Waxman of California, chairman of the Energy and Commerce Committee; and Charles B. Rangel of New York, chairman of the Ways and Means Committee. The chairmen, all first elected in the 1970s, have worked together in secret for months to develop a single bill.

The proposal would expand Medicaid eligibility, increase Medicaid payments to primary care doctors and gradually close a gap in Medicare coverage of prescription drugs known as a doughnut hole. The bill would also reverse deep cuts in Medicare payments to doctors scheduled to occur in the next five years. Taken together, these provisions could significantly drive up the bill’s cost.

The bill would impose a new “tax on individuals without acceptable health care coverage.” The tax would be based on a person’s income and could not exceed the average cost of a basic health insurance policy. People could be exempted from the tax “in cases of hardship.”

Asked why there was no cost estimate for the bill, the House Democratic leader, Steny H. Hoyer of Maryland, said: “Until we have a final product, we are reluctant to ask the Congressional Budget Office for a score. But whatever we do will be fully paid for.”

House Democrats pledged to offset the cost of their legislation by reducing the growth of Medicare and imposing new, unspecified taxes.

Republicans, who had no role in developing the bill, denounced it as a blueprint for a vast increase in federal power and spending.

“Families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” said the House Republican leader, John A. Boehner of Ohio, who raised the specter of federal bureaucrats’ making medical decisions for millions of people.

Business groups also were not pleased. “There is enough to see here already to know that we would be compelled to oppose this bill,” said E. Neil Trautwein, a vice president of the National Retail Federation.

But John J. Sweeney, president of the A.F.L.-C.I.O., praised the House bill, saying it provided “a road map for what health care reform should look like.”

The House chairmen described their bill as a starting point in a battle that would dominate Congress this summer and ultimately involve the full range of interest groups in Washington. The three House committees plan to hold as many as six hearings on the bill next week. Mr. Waxman said lawmakers were committed to considering all ideas, even a proposal to tax some employer-provided health benefits, which he opposes.

The House bill shows what Democrats mean when they speak of a “robust” public insurance plan.

Under the bill, the public plan would be run by the Department of Health and Human Services and would offer three or four policies, with different levels of benefits. The plan would initially use Medicare fee schedules, paying most doctors and hospitals at Medicare rates, plus about 5 percent. After three years, the health secretary could negotiate with doctors and hospitals.

But the bill says, “There shall be no administrative or judicial review of a payment rate or methodology” used to pay health care providers in the public plan.

Scott P. Serota, president of the Blue Cross and Blue Shield Association, said, “A government-run plan that pays based on Medicare rates, for any period of time, is a recipe for disaster.”

The bill would limit what doctors could charge patients in the public insurance plan, just as Medicare limits what doctors can charge beneficiaries.

In setting payment rates for doctors and hospitals under the public plan, the bill says, the government should try to reduce racial and ethnic disparities and “geographic variation in the provision of health services.”

The public plan would receive an unspecified amount of start-up money from the federal government. After that, it would have to be self-sustaining.

The bill would require drug companies to finance improvements in the Medicare drug benefit. Drug companies would have to pay rebates to the government on drugs dispensed to low-income Medicare beneficiaries.

The bill would expand Medicaid to cover millions of people with incomes below 133 percent of the poverty level ($14,400 for an individual, $29,330 for a family of four). The cost would be borne by the federal government.

The government would also offer subsidies to make insurance more affordable for people with incomes from 133 percent to 400 percent of the poverty level ($43,300 for an individual, $88,200 for a family of four).

    House Unveils Health Bill, Minus Key Details, NYT, 20.6.2009, http://www.nytimes.com/2009/06/20/health/policy/20health.html?hpw

Many in Congress Hold Stakes in Health Industry

June 14, 2009
The New York Times
By JACKIE CALMES

WASHINGTON — As President Obama and Congress intensify the push to overhaul health care in the coming week, the political and economic force of that industry is well represented in the financial holdings of many lawmakers and others with a say on the legislation, according to new disclosure forms.

The personal financial reports, due late last week from members of Congress, show that many lawmakers hold investments in insurance, pharmaceutical and prescription-benefit companies and in hospital interests, all of which would be affected by the administration’s overhaul of health care.

The lawmakers’ stakes are impossible to quantify because the reports ask for ranges of value for each asset, and because many officials’ holdings are in stock index and mutual funds. The Senate majority leader, Harry Reid of Nevada, for example, has interests in a stock index fund for the health care sector of more than $50,000 and up to $100,000.

Representative Dave Camp of Michigan, the senior Republican on the Ways and Means Committee, one of three panels in the House with jurisdiction over health care, reported at least tens of thousands of dollars in health-related interests, including the medical technology giant Medtronic, the drug maker Wyeth and the insurance company Aetna.

In Congress, as members and aides of the three House committees continue to meet privately, the Senate health committee will begin publicly drafting and voting on its bill as soon as Tuesday. Later in the week, the Democratic chairman and senior Republican of the Senate Finance Committee, Max Baucus of Montana and Charles E. Grassley of Iowa, are expected to unveil a bipartisan plan.

Neither Mr. Baucus, from a ranching family, nor Mr. Grassley, a farmer, have major health-related holdings, their reports show.

Senator Edward M. Kennedy of Massachusetts, chairman of the health committee, has much of his wealth in blind trusts.

Senator Christopher J. Dodd, Democrat of Connecticut, leads the health committee in consultation with Mr. Kennedy. Mr. Dodd’s wife, Jackie Clegg Dodd, is a member of the board and a shareholder in several health-related companies, including Cardiome Pharma, Javelin Pharmaceuticals and Brookdale Senior Living.

Senator Tom Coburn of Oklahoma, a Republican on the health committee, is an obstetrician with income from his clinic in Muskogee. The wife of Representative Wally Herger of California, the senior Republican on the health subcommittee of the Ways and Means panel, works for Catholic Healthcare West, while the wife of Representative Joe L. Barton of Texas, the top Republican on the House Energy and Commerce Committee, works for JPS Health Network.

Mr. Obama’s chief adviser on health care, Nancy-Ann DeParle, also filed disclosure forms with the White House. Ms. DeParle, who served in the Clinton administration, went on to lucrative positions on the boards of health companies and as director of a private-equity firm with health investments, earning more than $2 million from 2008 to this year, according to forms signed on May 13.

The companies included Medco Health Solutions, a pharmacy benefits manager; Boston Scientific, a device maker; Cerner, a provider of medical information technology; and DaVita, an operator of dialysis services.

A handwritten note on the forms, dated June 4, says that “all conflicting assets have been divested.” Ms. DeParle is the wife of a reporter for The New York Times, Jason DeParle.

Janie Lorber, Ashley Southall and Jack Styczynski contributed reporting.

    Many in Congress Hold Stakes in Health Industry, NYT, 13.6.2009, http://www.nytimes.com/2009/06/14/us/politics/14cong.html

House Reviews Advice Given to 401(k), IRA Holders

March 24, 2009
The New York Times
By THE ASSOCIATED PRESS
Filed at 11:11 a.m. ET

WASHINGTON (AP) -- Lawmakers took a hard look Tuesday at rules adopted in the final days of the Bush administration on how millions of Americans with 401(k) and individual retirement accounts get guidance on investing for retirement.

Members of a congressional panel said they wanted to ensure that retirement account holders have access to unbiased investment advice, an issue that's all the more important since stock market declines drained billions from retirement savings.

A House pensions subcommittee heard testimony on the Labor Department rules adopted under the Bush administration -- which President Barack Obama put on hold for further review.

Supporters say the complex rules have adequate safeguards to protect the consumer from biased advice given by advisers who have a financial incentive to recommend certain investment products. But some Democrats contend they could allow financial advisers to steer clients to investment products that maximize the advisers' profits rather than workers' retirement security.

''If workers receive investment advice, it should be independent and free of conflicts of interest,'' said Rep. Rob Andrews, D-N.J., chairman of the House Subcommittee on Health, Education, Labor and Pensions, which conducted the hearing. ''This last-minute Bush administration special interest payback had the potential to further drain Americans' hard-earned retirement savings.''

Andrews said the rules as written will tip the scales toward special interests by opening the door to conflicts of interest among the very advisers purporting to offer unbiased investment advice. ''I applaud the Obama administration putting this regulation on hold and hope this flawed rule does not see the light of day,'' Andrews said.

Rep. John Kline, R-Minn., disputed claims that the rules were ''last-minute, midnight'' regulations that provide giveaways to the financial services community. He said the rules have been the subject of months of debate and consideration. ''As testimony will reflect, many of the policy choices made by the department are decidedly pro-participant and protective in scope,'' he said.

    House Reviews Advice Given to 401(k), IRA Holders, NYT, 24.3.2009, http://www.nytimes.com/aponline/2009/03/24/washington/AP-Congress-Pensions.html

House Sets Up Vote on Taxing AIG Bonuses

March 19, 2009
Filed at 3:16 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- Venting their outrage, lawmakers are preparing to slap heavy taxes on employee bonuses at insurance giant AIG and at other companies that have received large bailout packages from the government.

The House was scheduled to vote Thursday on a bill that would levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

''We figured that the local and state governments would take care of the other 10 percent,'' said Rep. Charles Rangel of New York, chairman of the tax-writing House Ways and Means Committee.

Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.

House Democratic leaders unveiled the bill as the head of embattled American International Group Inc., which has received $182 billion in bailout money, testified about $165 million in bonuses paid out in the past week to about 400 employees in its Financial Products unit.

Edward Liddy, who was brought in last year by the government to run AIG, told a House subcommittee Wednesday that the company was contractually obligated to pay the bonuses but that some of the recipients have begun returning all or part of them.

Liddy said that on Tuesday, he had ''asked those who have received retention payments in excess of $100,000 or more to return at least half of those payments.'' Some have ''already stepped forward and returned 100 percent,'' he added.

Lawmakers rushed to the microphones after word of the bonuses was leaked out by the government over the weekend. Bills were quickly drawn up in both the House and Senate to impose heavy new taxes on them.

The top two members of the Senate Finance Committee on Tuesday announced a bill that would impose a 35 percent excise tax on the companies paying the bonuses and a 35 percent excise tax on the employees receiving them. The taxes would apply to all companies receiving government bailout money, but they are clearly geared toward AIG.

President Barack Obama, who took office just under two months ago, told reporters Wednesday that his administration was not responsible for a lack of federal supervision of AIG that preceded the company's demise.

But Obama added, ''The buck stops with me.''

Obama said his administration was consulting with Congress on creating a new ''resolution authority'' to seize giant institutions like AIG -- including all their toxic assets -- whose collapse in normal bankruptcy could cause calamity in the financial markets.

Republicans have pointed their criticism at Treasury Secretary Timothy Geithner, questioning how much he know about the bonuses in advance and efforts by the administration to stop them. And they complained anew about being locked out of discussions earlier this year when Democrats decided to jettison a provision in the economic stimulus bill that would have revoked the payments.

''The fact is that the bill the president signed, which protected the AIG bonuses and others, was written behind closed doors by Democratic leaders of the House and Senate. There was no transparency,'' said Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee.

    House Sets Up Vote on Taxing AIG Bonuses, NYT, 19.3.2009, http://www.nytimes.com/aponline/2009/03/19/washington/AP-AIG-Outrage.html

House Passes Expansion of Programs for Service

March 19, 2009
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — The House voted Wednesday to approve the largest expansion of government-sponsored service programs since President John F. Kennedy first called for the creation of a national community service corps in 1963.

The legislation, which passed by an overwhelming bipartisan vote of 321 to 105, would more than triple the number of service positions by expanding AmeriCorps and creating volunteer programs focused on education, health care, clean energy and veterans. The total number of positions would grow to 250,000 from 75,000 now in AmeriCorps.

The Senate is expected to adopt a nearly identical bill early next week.

The action by the House came three weeks and a day after President Obama in his first speech to a joint session of Congress called for “a renewed spirit of national service for this and future generations,” and lawmakers said they were answering his challenge.

The broad expansion of AmeriCorps, at a cost of nearly $6 billion over the next five years, would establish Mr. Obama as the boldest proponent of service programs since Kennedy exhorted Americans to “ask what you can do for your country.”

Mr. Obama, in a statement, praised the House vote. “At this moment of economic crisis, when so many people are in need of help and so much needs to be done, this could not be more urgent,” he said, adding, “It is up to every one of us to do his or her small part to make the world a better place.”

The House speaker, Nancy Pelosi of California, said, “This has been a great day.”

Critics, however, expressed concern about the cost of the measure, and some said the money could be better spent, perhaps on raises for members of the military. A single Democrat joined 104 Republicans in opposing the bill; 251 Democrats and 70 Republicans voted for it.

In addition to expanding the number of positions, the bill would raise the education stipend for volunteers to $5,350 — the same amount as a Pell Grant.

The legislation is a top priority of the first lady, Michelle Obama, who has said public service will be a main focus of hers in the White House. She founded the Chicago chapter of Public Allies, an AmeriCorps program, after leaving her law career.

Representative George Miller, Democrat of California and chairman of the House Education and Labor Committee, said Mrs. Obama had pulled him aside at a White House dinner to introduce herself and express her keen interest in the bill moving quickly.

At a lunch with Mr. Obama the next day, Mr. Miller recounted the conversation, aides said, prompting a jovial warning from the president. “Speaking from long-term experience,” he said, “it sounds to me like you better get that bill out of committee.”

Kennedy’s service program, which began after his death, was called Vista, Volunteers in Service to America. The House bill is the GIVE Act, for Generations Invigorating Volunteerism and Education. The Senate legislation has a simpler name: the Serve America Act.

Mr. Obama’s budget provides $1.2 billion for the expansion of programs in the next fiscal year.

The House bill seeks to encourage middle school and high school students to engage in volunteer activities, allowing them to earn a $500 education credit to be used for college costs. It also establishes “youth engagement zones,” a new service-learning program intended to establish partnerships between community organizations and schools in high-poverty neighborhoods.

The bill seeks to establish Sept. 11 as a national day of service though it would not be a formal holiday.

Senator Barbara A. Mikulski, Democrat of Maryland and a major proponent of the legislation, invoked the nation’s long history of service programs, saying, “This is not about programs; this is about value.”

    House Passes Expansion of Programs for Service, NYT, 19.3.2009, http://www.nytimes.com/2009/03/19/us/politics/19cong.html

House to Vote on Bankruptcy Mortgage Rewrites

March 5, 2009
Filed at 3:03 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- Debt-strapped homeowners unable to afford their mortgages could get their monthly payments lowered in bankruptcy court under a controversial element of President Barack Obama's housing rescue plan.

The legislation is part of a broader housing package scheduled for a House vote Thursday. It's the toughest piece of Obama's efforts to prevent foreclosures -- a stick to go with the many carrots he is offering the mortgage industry to help borrowers afford their home loans.

On Wednesday, Obama's team announced details of his broader $75 billion housing plan, which features cash incentives for mortgage holders -- known as loan servicers -- who cut deals with borrowers for new, more affordable terms.

The legislation has been the subject of an intense lobbying campaign by the financial services industry, which has worked hard to kill it. It has exposed rifts among liberal Democrats who regard it as the only real way to help debt-strapped homeowners avoid foreclosures and moderates who want to give voluntary efforts a chance to work before resorting to the courts.

The same divisions are at work in the Senate, which is expected to consider its own version of the legislation in the coming weeks.

The industry already won several concessions from Democrats in the House, who agreed to limit the measure to existing loans, to homeowners who sought a loan modification from their lenders before filing for bankruptcy, and to people who can no longer afford to pay their mortgages.

Democrats were forced to put off action on the measure when moderates voiced concerns last week that the bill was still overly broad. They wrote a compromise that requires bankruptcy judges to consider whether banks offered homeowners reasonable loan restructuring deals before they weigh in with their own rewrites.

Borrowers also would have a responsibility to prove that they tried to modify their mortgages with their lenders before seeking help in bankruptcy court.

The deal would require judges to consider whether homeowners were offered a ''qualified'' loan workout consistent with Obama's plan. That program would let eligible homeowners rework their mortgages to bring their monthly payments down to no more than about one-third of their incomes.

The mortgage industry has argued that unfettered access to bankruptcy court mortgage modifications would impose steep and unpredictable costs on its companies that would be passed along to borrowers as higher fees and interest rates.

Although it calls the new compromise a good step, the industry is still opposed to the measure it brands the ''cramdown.'' Lobbyists pressed lawmakers to limit the measure to subprime mortgages and to block homeowners who had been offered a mortgage workout by their lenders from getting one through a bankruptcy judge.

Backers and a wide range of economists say that because the measure is limited to existing loans, banks would have no reason to raise future rates to factor in the cost of forced loan rewrites.

The measure is part of a broader housing package that would raise the Federal Deposit Insurance Corporation's borrowing authority and boost incentives for lenders to rework mortgages. The legislation takes $2 billion out of the $700 billion Wall Street bailout fund to bolster an existing program to allow homeowners rework or refinance their mortgages.

The bill is H.R. 1106.

------

On the Net:

Congress: http://thomas.loc.gov

    House to Vote on Bankruptcy Mortgage Rewrites, NYT, 5.3.2009, http://www.nytimes.com/aponline/2009/03/05/washington/AP-Mortgages-Bankruptcy.html

Brown Speaks to Congress on Economy

March 5, 2009
The New York Times
By BRIAN KNOWLTON

WASHINGTON — Prime Minister Gordon Brown urged American leaders on Wednesday to “seize the moment,” in tandem with their European allies, to work through the global economic crisis and prepare for a future that brings “the biggest expansion of middle-class incomes and jobs the world has ever seen.”

Speaking from one of the most prominent stages accorded any visiting foreign dignitary — a joint meeting of Congress — Mr. Brown called for a clear rejection of protectionist tendencies as the world struggles toward recovery.

The address came a day after President Obama assured Mr. Brown that the “special relationship” between the two countries was as strong as ever — despite what some observers have described as coolness in the handling of the prime minister’s visit. The White House spokesman, Robert Gibbs, said again Wednesday that “the relationship remains strong and special.”

In any case, the senators and congressmen, joined by American military leaders and other dignitaries, gave the prime minister a warm welcome, interrupting his 45-minute speech at least a dozen times with standing ovations. One of those came after he announced that Senator Edward M. Kennedy of Massachusetts, who is suffering from brain cancer, had been granted an honorary knighthood.

The chamber was nearly full as Mr. Brown spoke; the Capitol interns who are sometimes summoned to fill empty seats on such occasions were relatively few in number.

Mr. Brown praised his host country as one of remarkable strength, optimism and resilience. “America is not just the indispensable nation,” he said, “you are the irrepressible nation.”

Those strengths, he added, needed to be marshaled fully now in what Mr. Brown said would have to be concerted world action to stimulate national economies, bolster banks and improve their oversight, and help developing countries survive the downturn.

Echoing a point that Mr. Obama has begun to make, Mr. Brown argued that a big part of the solution to the crisis lay in having confidence that it can be solved.

“While today people are anxious and feel insecure, over the next two decades our world economy will double in size,” Mr. Brown said. “Twice as many opportunities for business, twice as much prosperity, and the biggest expansion of middle class incomes and jobs the world has ever seen.”

He argued that the United States, under a president who enjoys great popularity at home and sometimes even greater popularity abroad, would find a rare receptiveness to its efforts to move forward.

“Let me say that you now have the most pro-American European leadership in living memory,” Mr. Brown said.

“There is no old Europe, no new Europe, there is only your friend Europe. So once again I say we should seize the moment — because never before have I seen a world so willing to come together. Never before has that been more needed. And never before have the benefits of cooperation been so far-reaching.”

He also vowed to continue close cooperation in the fight against terrorism, in efforts to induce Iran to suspend its nuclear program, and in moves to curtail global warming. And he paid tribute to the soldiers of both countries who had fought in Iraq and Afghanistan.

Mr. Brown, who was chancellor of the Exchequer, or finance minister, in the Labour Party government of Tony Blair, has been calling for a “global new deal” with every country working to end the downturn.

The prime minister has been laying the groundwork for a meeting on April 2 in London of the leaders of the Group of 20 major economies. He has been calling for greater accountability and transparency, and stricter oversight, for banking and financial institutions around the world.

Mr. Obama has supported many of the same goals, at least in principle.

But Julianne Smith, director of the Europe program at the Center for Strategic and International Studies in Washington, said that Mr. Brown might not get all he wanted.

“I don’t think he’s going to be able to go back home and say ‘Obama and I see completely eye-to-eye on some big global regulation scheme,’ ” she said.

Part of that is a general American skepticism toward such internationalist approaches, Ms. Smith said. “Europeans, even the Brits, have a higher level of comfort with global machinery and bureaucratic machinery than Americans do,” she said.

Commentators on both sides of the ocean have catalogued a number of signs that the reception accorded to Mr. Brown in Washington was not quite as warm as the ones British prime ministers enjoyed during the Bush years: No invitation to Camp David, no full-scale news conference, no state dinner — and while there was a meeting between the men’s wives, none was held between the two couples. Mr. Brown, whose own approval ratings in Britain are suffering, had hoped to profit from his visit to the popular American president.

Mr. Obama brushed such concerns aside on Tuesday, saying that the two countries were united by a bond “that will not break.”

And Mr. Brown said the same on Wednesday: “Partnerships of purpose are indestructible,” he said. “There is no power on Earth that can drive us apart.”

    Brown Speaks to Congress on Economy, NYT, 5.3.2009, http://www.nytimes.com/2009/03/05/world/europe/05brown.html

House Passes Spending Bill, and Critics Are Quick to Point Out Pork

February 26, 2009
The New York Times
By ROBERT PEAR

WASHINGTON — The House on Wednesday passed a $410 billion omnibus spending bill packed with pet projects requested by Democrats and Republicans alike.

The 245-to-178 vote came just a week after President Obama signed one of the largest spending bills in the nation’s history, a $787 billion measure meant to rejuvenate a sluggish economy.

The new bill, a reflection of Democratic priorities, increases spending on domestic programs by an average of 8 percent in the current fiscal year, which began in October.

On Thursday, Mr. Obama is scheduled to send his budget for the next fiscal year to Congress. He did not take a formal position on the bill passed by the House.

“It’s a big document,” a White House official said. “We are still reviewing it.”

Republicans, however, did not mince words in describing the spending bill as wasteful. And one watchdog group said the bill provided nearly $8 billion for more than 8,500 pet projects favored by lawmakers, including $1.7 million for a honey bee laboratory in Weslaco, Tex.; $346,000 for research on apple fire blight in Michigan and New York; and $1.5 million for work on grapes and grape products, including wine.

Representative John Fleming, Republican of Louisiana, said Mr. Obama’s call for fiscal responsibility, in a speech to a joint session of Congress on Tuesday, was “sandwiched between two wasteful spending bills.”

Representative Mark Steven Kirk, Republican of Illinois, pointed out that the new bill came just two days after the White House held a forum to promote fiscal restraint.

The legislation includes nine of the regular appropriations bills for this fiscal year. Unable to reach agreement with President George W. Bush last year, Congress provided most domestic agencies and programs with a short-term infusion of cash, which runs out at the end of next week.

Democratic leaders of the House and the Senate have already negotiated and agreed on the contents of the new legislation. But conservative Republican senators could try to amend the bill, to pare it down or delete earmarks. If they succeed, the bill would need to go back to the House before it could be presented to the president.

The bill increases budgets for the Departments of Education, Health and Human Services, Housing and Urban Development, and Transportation, among others.

Over all, it provides $19 billion more than Mr. Bush requested for the same agencies and $31 billion more than what they got in the last fiscal year.

Representative Jim McGovern, Democrat of Massachusetts, said the bill “turns the page once and for all on the last eight years.”

Democrats boasted that they had not included earmarks in the economic stimulus bill, but lawmakers of both parties relished the opportunity to stuff the new bill with pet projects.

Taxpayers for Common Sense, a watchdog group, counted more than 8,500 “Congressionally designated projects” in the bill and said the cost of these earmarks totaled $7.7 billion., up 3.4 percent from last year.

Representative Jeff Flake, Republican of Arizona, said it was unseemly for Congress to finance so many pet projects at a time when “the Justice Department is investigating the connection between earmarks and campaign contributions.”

By a vote of 226 to 182, the House killed a proposal by Mr. Flake calling on the House ethics committee to investigate such connections.

Representative David R. Obey, the Wisconsin Democrat who is chairman of the Appropriations Committee, said earmarks were a small part of the bill and had been fully disclosed. Without the earmarks, he said, “the White House and its anonymous bureaucrats” would control all spending.

Moreover, Democrats said 40 percent of the spending on earmarks went to projects that had been requested by Republicans.

Representative Jerry Lewis of California, the senior Republican on the Appropriations Committee, said that to understand the magnitude of new federal spending, one must look at the money in the omnibus bill and the money for the same agencies in the economic stimulus law, which together total $680 billion. That sum is 80 percent higher than spending for those agencies last year, he said.

A number of policy changes are included in the bill. It would, for example, make it easier for Americans to visit immediate relatives in Cuba. And it would forbid Mexican trucks to operate outside certain commercial zones along the border with the United States. The Teamsters union, which supported Mr. Obama’s election last year, had sought the restriction.

Among the pet projects is one to help producers of genuine pork, in contrast to the Congressional variety. The bill includes $1.8 million to conduct research in Iowa on “swine odor and manure management.”

The legislation includes $173,000 for research on asparagus production in Washington State; $206,000 for wool research in Montana, Texas and Wyoming; and $209,000 for efforts to improve blueberry production in Georgia.

It also includes $208,000 to control a weed known as cogongrass in Mississippi; $1.2 million to control cormorants in Michigan, Mississippi, New York and Vermont; $1 million to control Mormon crickets in Utah; and $162,000 to control rodents in Hawaii.

Democrats also earmarked money for the presidential libraries of three Democrats: Franklin D. Roosevelt ($17.5 million), John F. Kennedy ($22 million) and Lyndon B. Johnson ($2 million).

The bill even includes earmarks requested by some lawmakers who have left Congress, like Senator Pete V. Domenici, Republican of New Mexico, and Representative William J. Jefferson, Democrat of Louisiana.

House Republicans have been divided on the merits of earmarks. Some, like Mr. Flake and the minority leader, John A. Boehner of Ohio, do not request earmarks. But other Republicans, including many on the Appropriations Committee, do request such projects.

In the Republican response to Mr. Obama’s speech on Tuesday night, Gov. Bobby Jindal of Louisiana said Republicans lost the public’s trust in recent years because they “went along with earmarks and big government spending in Washington.”

    House Passes Spending Bill, and Critics Are Quick to Point Out Pork, NYT, 26.2.2009, http://www.nytimes.com/2009/02/26/us/politics/26spend.html

Obama's gamble: Big plans have big risks

24 February 2009
USA Today
By Richard Wolf

WASHINGTON — Until Tuesday, President Obama was already dealing with the worst economy since the Depression: failing industries, teetering banks, a stock market sliced in half and millions of people losing their homes.

Now he's added overhauling the nation's health care system to his to-do list — a challenge that has vexed presidents from Harry Truman to Bill Clinton. Not to mention weaning America off Middle East oil, fixing its schools, bolstering Social Security and declaring war on deficits and debt.

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care, the schools that aren't preparing our children and the mountain of debt they stand to inherit," Obama said in his first address to Congress Tuesday. "That is our responsibility."

It's a high-risk strategy, doing everything at once. Obama is doing it for two reasons: The economy is in free fall, and the voters gave him a sizeable mandate in November.

"We've never seen an administration get out of the starting blocks as rapidly or try to clear as many hurdles in the first 50 yards," says Robert Reischauer, president of the Urban Institute and former director of the Congressional Budget Office. "But moving at a more moderate pace I don't think decreases the risk appreciably, because then you're going to be driven by events, reacting to crises. He is trying to be proactive."

That won praise even from Republicans on Tuesday. "The president deserves much credit for his willingness to tackle health care reform, the budget deficit, Social Security and the recession all at once," said Rep. Dave Camp, R-Mich., while warning against tax increases.

The challenge for Obama is all the greater because he's presiding over an incomplete government. Nearly all departments and agencies are without key political appointees who will design and implement policy, because they've yet to be nominated or confirmed.

Three Cabinet-level departments still lack leaders, including the Department of Health and Human Services following the withdrawal of former Senate Democratic leader Tom Daschle over personal tax problems. The White House has slowed the nomination process and stepped up its vetting of candidates to avoid additional public relations calamities.

On the other hand, Obama is helped by his willingness to name many veterans of the Clinton administration to his top echelon of advisers. And if he needs advice on the pitfalls of overhauling health care, Hillary Rodham Clinton is down the street at the State Department.

Her advice could come in handy on what not to do. Her health care effort failed in 1994 due largely to the Clinton administration's decision to craft its own plan, rather than work with Congress. It took most of 1993 to do that, delaying the legislative process well beyond President Clinton's honeymoon period.

The last three presidents who represented a party that reclaimed the White House used their first budgets to make major changes, something Obama hopes to do in the budget outline he unveils Thursday. Republican Ronald Reagan cut spending and taxes. Democrat Bill Clinton pushed through a major deficit-reduction deal that helped lead to budget surpluses. Republican George W. Bush focused almost single-mindedly on his massive tax cuts.

"History suggests that particularly when the White House changes parties … the president has a window to make bigger changes than he may be able to get later in his term," says Robert Greenstein, founder of the liberal Center on Budget and Policy Priorities.

With the country in economic crisis, Obama is betting that Americans are more prepared to fix the nation's problems than they have been: 46 million people uninsured and soaring costs for others, dependency on fossil fuels from foreign lands, a debt approaching $11 trillion due to unsustainable government benefits.

The risk is obvious: failing.

"Clinton paid a price for not succeeding on health care," says Steve Elmendorf, who was chief of staff to former House Democratic leader Richard Gephardt. "So if you go out and announce, 'I'm going to do X on health care' and you don't succeed, you pay a price."

    Obama's gamble: Big plans have big risks, UT, 24.2.2009, http://www.usatoday.com/news/washington/2009-02-24-analysis_N.htm

Editorial

‘We’ll Take It’

February 17, 2009
The New York Times

This nation’s founders rebelled against taxation without representation, but residents of Washington are still without a meaningful voice in Congress. A bill to give the District of Columbia a voting member in the House of Representatives has taken an important step forward, and it could become law this year. The bill is not ideal, but it would redress a longstanding injustice. Congress should pass it.

A Senate committee voted for a bill last week that would give the district a voting House member and add another House seat for Utah. Utah is the state next in line by population according to the 2000 census to get another seat.

Washington’s lack of representation is profoundly undemocratic. Its residents are American citizens who pay taxes, vote for the president and serve and die in the military. Although the city is relatively small, it is more populous than Wyoming and nearly equal to those of Vermont and Alaska.

The drive to secure a voting House member for heavily Democratic Washington has traditionally faced stiff opposition from Republicans. But in the Senate committee, two Republicans — Susan Collins of Maine and George Voinovich of Ohio — voted in favor. The bill’s supporters may now have the votes to pass it and to overcome a Senate filibuster.

The special consideration given to Utah, a heavily Republican state, has helped win the support of Republicans. They know, however, that after the 2010 census, the new House seat could end up going to another state.

Of course, in a perfect world, fixing the disenfranchisement of residents of the nation’s capital would not be conditioned on giving another House member to a state that has not been wrongly deprived of one. But the compromise is still worth making.

Some critics insist that the bill is unconstitutional because the Constitution speaks of House members representing “the several states.” The better argument, as respected constitutional scholars argue, is that Article I’s “District Clause” gives Congress sweeping authority over the District of Columbia. That authority includes the right to award it Congressional representation.

With Barack Obama, who co-sponsored a 2007 version of the bill, now in the White House and the Democrats in control of both the House and Senate, this could be the moment Washington finally gets its representation.

“It’s 200 years too late,” says Eleanor Holmes Norton, who now serves as the city’s nonvoting member of the House. “But we’ll take it.”

    ‘We’ll Take It’, NYT, 17.2.2009, http://www.nytimes.com/2009/02/17/opinion/17tue2.html

House Approves Stimulus With No Republican Support

February 14, 2009
The New York Times
By DAVID STOUT

WASHINGTON — The House approved a $787 billion economic stimulus package Friday afternoon, with Democrats successfully promoting it as a boost for middle-class Americans and Republicans countering in vain that it will only stimulate wasteful government spending.

The vote was 246 to 183, reflecting the Democrats’ considerable majority in the House and the Republicans’ deep dissatisfaction with the measure, whose estimated price tag has fluctuated daily and was finally placed at $787 billion on Friday. Not a single Republican voted in favor of the bill.

The Senate was expected to vote on the final legislation Friday evening, clearing the way for the paperwork to go to President Obama, who is eager to sign the measure.

"After all the debate, this legislation can be summed up in one word: Jobs," House Speaker Nancy Pelosi of California said. "The American people need action and they need action now."

But Representative John A. Boehner of Ohio, the House minority leader, lamented that a bill that was supposed to be about “jobs, jobs, jobs” had turned into one that was about “spending, spending, spending.”

“We owe it to the people to get this bill right,” Mr. Boehner said.

President Obama and Democrats in Congress contend the package is designed to create or save 3.5 million jobs.

There was no suspense about the outcome, since the Democrats hold a 255-to-178 advantage in the House. The real suspense was how many, if any, Republicans would vote for the bill; none did two weeks ago, when the House approved its initial version of the legislation. A handful of Democrats opposed the bill on Friday.

“The country needs this package,” said Representative David Obey, the Wisconsin Democrat who is chairman of the Appropriations Committee. “I think we ought to get on with it.”

But the committee’s ranking Republican, Jerry Lewis of California, asserted that the program would do far too little to finance road construction, flood control projects and other works for the public good.

“Facts are stubborn things,” Mr. Lewis said, describing the package as a recipe for bloated government programs that would saddle taxpayers with a debt burden “well, well into the future.”

The legislation is the product of negotiations between the House and Senate, which had favored a somewhat larger stimulus. The final package ended up considerably smaller than either the House or Senate had originally approved.

President Obama, speaking at the White House to the Business Council, an association of chief executives, described the vigorous debate leading to the votes in Congress as “a good thing.”

“Diverse viewpoints are the lifeblood of our democracy, and debating these viewpoints is how we learn from each other’s perspective and refine our approaches,” Mr. Obama said. The president said the program nearing passage would benefit not only middle-class families but “will also provide sensible tax relief to business that are trying to make payroll and create jobs.”

But as debate in the House went on, it was clear that the gulf between Democrats and Republicans was as wide as ever.

Representative Charles B. Rangel, the New York Democrat who is chairman of the Ways and Means Committee, said the legislation would offer “hope not only for those people who are jobless, but hopeless.”

But Representative Dave Camp of Michigan, the committee’s ranking Republican, complained that Republicans had been “frozen out” by Democrats. “Most important, the American people were frozen out,” he said. “Record me as a ‘no’ on this legislation.”

David M. Herszenhorn contributed reporting.

    House Approves Stimulus With No Republican Support, NYT, 14.2.2009, http://www.nytimes.com/2009/02/14/us/politics/14web-stim.html?hp

Congress, White House Near Final Deal on Stimulus

February 11, 2009
Filed at 12:25 p.m. ET
The New York Times
By REUTERS

WASHINGTON (Reuters) - U.S. lawmakers and the White House were moving toward a final deal on Wednesday for what could be a stimulus plan of under $800 billion that Democrats say is crucial to rescuing the struggling U.S. economy.

"We're close. I expect to have it done by 3 p.m. (2000 GMT)," said Senator Max Baucus, one of the negotiators on the package of tax cuts and government spending designed to pull the U.S. economy out of its deep recession.

Senator Arlen Specter, a moderate Republican whose support is key to passage, said $789 billion "sounds pretty close" to the overall price tag, while Democratic Senator Ben Nelson added, "The target was actually lower than that."

House and Senate negotiators were expected to emerge from closed-door meetings later on Wednesday and gather in a public session to sign off on a compromise bill that would then be sent to the full House and Senate for final passage.

Once that happens, possibly by week's end, President Barack Obama would promptly sign the legislation into law.

"I've heard white smoke is imminent but I haven't seen it yet," said Senate Republican leader Mitch McConnell.

McConnell has been an outspoken critic of the bill, saying it contains too much government spending that would not stimulate the economy.

But Democrats who control both houses of Congress have mostly rebuffed Republicans, saying the combination of tax cuts and spending to rebuild roads, bridges and other projects in the bill would create or save up to 4 million jobs.

Democrats are working with three moderate Republican senators so that the bill could speed through the Senate.

Alone, the stimulus package is unlikely to fix the U.S. economy because it does not address financial sector problems. As long as banks face losses and struggle to raise money, lending and growth will suffer.

The Obama administration hopes to address this through a bank rescue program unveiled by Treasury Secretary Timothy Geithner on Tuesday. Wall Street plunged as traders expressed disappointment there were not more details.
 

AWAITING DETAILS

Nelson said he thought some money for education had been increased in the stimulus compromise, adding that lawmakers were scaling back money for tax incentives to encourage auto and home buying.

Sen. Susan Collins, a Maine Republican, said lawmakers intended to keep in a one-year fix to a quirk in the tax law that threatens to ensnare the middle class in a tax intended for the richest. Other specifics were not yet available.

One House Democratic aide said the sides were finding it easier to agree on tax cuts than on the more complicated list of spending priorities contained in the legislation.

The House has passed a bill costing about $820 billion, while the Senate's version will cost $838 billion.

House Speaker Nancy Pelosi says her chamber's legislation would create more jobs, fulfilling Obama's pledge to create or save up to 4 million jobs through construction and investment projects and tax cuts to put money in consumers' hands.

But Senate Majority leader Harry Reid, hamstrung by more difficult Senate procedures, cut out some spending that Republicans objected to in order to get the required 60 votes.

Apart from three senators, all Republican lawmakers have opposed the bills as written so far. Democrats had scant hopes of attracting many more of their votes for a bill Obama says needs to be enacted quickly to avert a "catastrophe."

Various business groups support the Democratic-written legislation. The U.S. Chamber of Commerce, for example, supports "many of the pro-growth tax initiatives in the bill, as well as the spending-side provisions to provide stimulus, create jobs and get Americans back to work."

(Editing by Alan Elsner)

    Congress, White House Near Final Deal on Stimulus, NYT, 11.2.2009, http://www.nytimes.com/reuters/2009/02/11/business/business-us-usa-stimulus.html

Congress Is Divided Over Competing Stimulus Bills

February 8, 2009
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — The Senate agreement on a roughly $827 billion economic stimulus bill sets up tough negotiations with the House, primarily over tens of billions of dollars in aid to states and local governments, tax provisions, and education, health and renewable energy programs.

Congress is racing to try to finalize the legislation this week.

The price tag for the Senate plan is now only slightly more than the $820 billion cost of the measure adopted by the House. Both plans are intended to blunt the recession with a combination of tax cuts and government spending on public works and other programs to create more than three million jobs.

But the competing bills now reflect substantially different approaches. The House puts greater emphasis on helping states and localities avoid wide-scale cuts in services and layoffs of public employees. The Senate cut $40 billion of that aid from its bill, which is expected to be approved Tuesday.

The Senate plan, reached in an agreement late Friday between Democrats and three moderate Republicans, focuses somewhat more heavily on tax cuts, provides far less generous health care subsidies for the unemployed and lowers a proposed increase in food stamps.

To help allay Republican concerns about the cost, the Senate proposal even scales back President Obama’s signature middle-class tax cut. The Senate plan also creates new tax incentives to encourage Americans to buy homes and cars within the next year.

Republican opponents continued to rail against the stimulus plan on the Senate floor on Saturday, though it appeared they would not have the votes to stop it.

The negotiations in Congress will test whether Democrats, who say they won a mandate in November to pursue their goals, are willing to give up some favored long-term policy initiatives to win over more Republican votes.

The talks will also test whether any but the most moderate Republicans will be willing to support the Obama administration, or whether they will simply recoil in an opposition stance.

Speaker Nancy Pelosi, who was in Williamsburg, Va., on a retreat with her fellow House Democrats on Friday, called the emerging Senate cuts to the stimulus program “very damaging” and said she was “very much opposed to them.” But after the Senate reached a deal, Ms. Pelosi expressed resolve to complete the legislation in the days ahead.

Mr. Obama, who has made the economic recovery effort the centerpiece of his agenda, is expected to take a stronger hand in the negotiations and will embark on an aggressive public lobbying campaign.

He will hold a meeting in Indiana on Monday, followed by a formal White House news conference, the first of his term, in prime time on Monday night. He will pitch the plan again on Tuesday in Florida and on Wednesday in Virginia.

In his weekly radio and Internet address on Saturday, the president praised the Senate deal and urged quick passage of a final bill.

“The time for action is now,” Mr. Obama said. “If we don’t move swiftly to put this plan in motion, our economic crisis could become a national catastrophe.”

Also on Monday, Treasury Secretary Timothy F. Geithner is expected to announce the broad outlines of a rescue plan for the financial industry. The administration hopes that the announcement will quiet some critics in Congress who say not enough is being done for the housing sector.

After Senate Democrats reached their deal with moderate Republicans on Friday, Republicans who are more conservative refused to put the legislative process on a fast track.

Senator David Vitter, Republican of Louisiana, insisted that the deal required careful deliberation and said he would spend the weekend reviewing it, even though it was all but certain that he would not support the measure.

As a result, the Senate met for a rare Saturday session, and Republicans delivered some of their harshest criticism of Mr. Obama since he took office, suggesting that he was pressing Congress to act irresponsibly by warning of imminent catastrophe.

“In discussing with the American people his approach to the stimulus of our economy, he has first really used some dangerous words,” said Senator Jon Kyl of Arizona, the No. 2 Republican. Mr. Kyl added, “It seems to me that the president is rather casually throwing out some careless language.”

The majority leader, Senator Harry Reid of Nevada, said Congress would move quickly to get the bill into conference, in hopes of sending the bill to the White House by the week’s end.

As it stands, three Republicans are expected to join the 58 Democrats in favor of the bill, and the negotiations may tilt slightly in the Senate’s favor as officials try to keep that coalition in place.

Both the House and the Senate must vote again to approve the final legislation, leaving a chance of unexpected pitfalls.

The main fight is likely to be over the Senate’s proposal to cut $40 billion from proposed aid to states. Such aid does not necessarily lift the economy, but it prevents states from carrying out cuts that could make the recession worse, and the money can be deployed quickly, a challenge in any stimulus.

The $40 billion was the largest cut in a paring back of the Senate proposal that helped seal a deal between Democrats and the moderate Republicans, thanks to the efforts of a bipartisan group led by Senators Susan Collins, Republican of Maine, and Ben Nelson, Democrat of Nebraska.

Another big difference is the Senate’s inclusion of nearly $70 billion to protect thousands of middle-class Americans from paying the alternative minimum tax in 2009, sparing them from a system originally intended to prevent the wealthy from claiming too many tax deductions.

House Democratic leaders have indicated a willingness to retain that provision even though it could require them to give up tens of billions of dollars in favored spending programs and force them to make wrenching choices.

Adjusting the alternative minimum tax is also unlikely to give much extra lift to the economy, because Congress has adopted similar fixes for years and would probably have done so again regardless of the stimulus.

Other trims the Senate settled on eliminated $19.5 billion in construction aid for schools and colleges and sliced proposed new aid for the Head Start early childhood program by $1 billion.

In some cases, the cuts to the Senate bill brought it closer to the House proposal. For instance, the senators reduced financing to expand broadband data networks in rural and underserved areas to $7 billion from $9 billion. The House has proposed $6 billion.

Some of the Senate’s changes clearly reflected the personal priorities of lawmakers, especially the moderate Republicans who were instrumental in reaching an accord.

The Senate deal, for example, reduced proposed aid to NASA and the National Science Foundation by $200 million each.

But it added $6.5 billion for medical research at the National Institutes of Health, favored by Senator Arlen Specter of Pennsylvania, one of the three Republicans supporting the plan

Even with Democrats controlling both chambers, the negotiations are likely to be difficult. House Democrats have shown little inclination to cater to Republican wishes, especially given the unwillingness of Republicans to vote for the bill.

So far, Mr. Obama and his aides have strongly resisted any change to his proposal for a middle-class tax cut, which was one of his main campaign promises.

It would provide a tax credit of up to $500 for individuals and up to $1,000 for couples, with the credit phasing out for individuals earning more than $75,000 a year and couples more than $150,000.

The Senate bill would lower that income cap to $70,000 for individuals and $140,000 for couples, saving the government $2 billion but potentially reducing the effectiveness of a tax break that is intended to lift consumer spending.

It is unclear how Congress will deal with two provisions aimed directly at general consumers, including an $11 billion tax break in the Senate bill to spur car sales by allowing buyers to deduct any sales tax and one year of loan interest.

The chambers must reconcile competing homebuyer tax credits.

To stabilize real estate prices, the House would give first-time homebuyers a tax credit of 10 percent of a home’s cost, up to $7,500, with income caps reducing the credit for individuals earning at least $75,000 and couples earning $150,000.

The Senate plan includes a more generous credit of 10 percent, up to $15,000, that would be available to all homebuyers, with no income limits.

A formal conference to resolve the differences between the two bills is expected to begin by midweek.

In the Senate debate, critics of the plan said their main objective was to support proposals that would quickly create jobs or spur consumer spending.

But there were Republicans who vehemently opposed some spending programs in the bill, saying the federal government was overstepping its bounds and should not be getting involved in taking up local responsibilities like school construction.

Many of the education programs in the bill are top priorities of the powerful chairman of the House Appropriations Committee, Representative David R. Obey, Democrat of Wisconsin.

In debate on the Senate floor, many Republicans, including the party’s defeated presidential nominee, Senator John McCain of Arizona, offered amendments to reduce spending and broaden the tax cuts in the plan. The Democrats easily swatted those down.

Critics of the stimulus plan say Democrats have packed it not with the most effective short-term proposals to lift the economy, but with favored, liberal spending programs that will drastically increase the national debt and cause long-term fiscal harm.

“A bill that was meant to be timely, targeted and temporary has instead become a Trojan horse for pet projects and expanded government,” the Republican leader, Senator Mitch McConnell, said in a floor speech on Friday.

Although Mr. Obama made substantial efforts to reach across party lines, not one of the House Republicans voted for the stimulus measure. They complained that House Democrats shut them out of the process.

In the Senate, too, talks proved excruciatingly difficult. In the end, the only Republicans whose support the Democrats won were Mr. Specter, Ms. Collins and Senator Olympia J. Snowe of Maine.

    Congress Is Divided Over Competing Stimulus Bills, NYT, 8.2.2009, http://www.nytimes.com/2009/02/08/us/politics/08stimulus.html

Editorial

The Stimulus Advances

January 29, 2009
The New York Times

The signature achievement of the $819 billion stimulus and recovery bill, passed on Wednesday by the House, is that it directs most of its resources where they would do the most good to stimulate the economy.

The bill is large because this deep recession is getting deeper, and the recovery, when it comes, is expected to be slow. President Obama and the lawmakers who wrote the bill are to be commended for not letting size distort the substance. Contrary to the claims of Republican opponents that the bill indiscriminately rains money down, the amounts and categories of spending have, for the most part, been calculated carefully and chosen well.

Nearly 30 percent is devoted to unemployment benefits, food stamps and fiscal aid to states so that they don’t have to cut services, raise taxes and lay off employees and contractors. Evidence is overwhelming that such spending yields the biggest return for every dollar spent. The bill, however, takes into account that these areas cannot absorb unlimited money. In calculating the expanded food stamps, for instance, it provides a significant increase immediately that would otherwise have occurred over time in line with inflation. That way, ample funds are available when needed, but there is no sudden cut off down the road.

Aid to states also is well thought out. The single biggest chunk of spending — $87 billion for states to shore up Medicaid programs — would allow them to provide care to the neediest, whose ranks have been swelled by the deepening recession. Equally important, by taking on more of the states’ Medicaid burden, the federal government frees up states to continue providing other services that would have had to have been cut.

One of those vulnerable areas, states’ education budgets, is the main target of another $79 billion. The money would help to prevent lapses in early childhood education, which often cannot be made up later. It would also prevent cuts in the curriculum and in extracurricular activities in grade schools through college — while averting big layoffs in a sector that is among the largest employers in many states.

After jobless benefits, food stamps and aid to states, the most effective stimulus is to get money directly to low- and middle-income Americans, who are likely to spend it quickly, boosting demand. The package expands the Earned Income Tax Credit temporarily to raise the pay of the working poor. There also is money to allow low-income workers to qualify for a tax credit of up to $1,000 per child, a break currently denied them. These are good tax policy and good stimulus.

The measure devotes $145 billion to Mr. Obama’s “Making Work Pay” tax credit for the next two years. The credit, up to $500 per worker, would be more effective as stimulus if the cutoff for eligibility were lower. The richer the recipient, the more likely it is that the money would be saved, not spent.

Having maxed out on the most powerful forms of stimulus and facing an economic downturn that requires still more government intervention to prevent a more disastrous downward spiral, lawmakers sensibly expanded the package into other areas. It contains $62 billion on infrastructure spending for highways, mass transit and school buildings, and tens of billions more for other projects. It also includes $40 billion to subsidize the cost of health coverage for the unemployed.

Republicans’ objections are mostly ideological. They worry, in particular, that subsidizing health insurance may be a step toward universal coverage. They may be right. But that is an argument for another day. The government must act urgently to protect the vulnerable from what is shaping up to be the worst recession in modern history and to boost the economy at a time when consumer and business spending is slack. Besides, a lamentably large amount of money goes to business tax cuts dear to Republicans. That is folly as stimulus but more than enough for political compromise.

A more thoughtful criticism is that the package is not more transformative in scope. There is more money for fixing roads, but not for high-speed railroads; for Head Start, but not for curriculum reform. That, too, is a discussion for another day.

Indeed, even with an $819 billion package, the challenge for the Obama administration is to lower expectations, not raise them. The hole the economy is in is so deep that even the stimulus package will only dig us halfway out. According to recent testimony by Douglas Elmendorf, the director of the Congressional Budget Office, without the stimulus, the economy in 2010 could underperform its potential by an amount equal to 6.3 percent of gross domestic product. With the plan, the gap could be, at best, about half that.

It will be a long and unpleasant climb from the ruins of the economy. But the House stimulus package is a good first step. The Senate, which takes up its version next week, should follow suit.

    The Stimulus Advances, NYT, 29.1.2009, http://www.nytimes.com/2009/01/29/opinion/29thu1.html

Relief Seen for Jobless and States in Health Care Plan

January 28, 2009
The New York Times
By ROBERT PEAR

WASHINGTON — The stimulus bill working its way through Congress is not just a package of spending increases and tax cuts intended to jolt the nation out of recession. For Democrats, it is also a tool for rewriting the social contract with the poor, the uninsured and the unemployed, in ways they have long yearned to do.

With little notice and no public hearings, House Democrats would create a temporary new entitlement allowing workers getting unemployment checks to qualify for Medicaid, the health program for low-income people. Spouses and children could also receive benefits, no matter how much money the family had.

In addition, the stimulus package would offer a hefty subsidy to help laid-off workers retain the same health plans they had from their former employers.

Altogether, the economic recovery bill would speed $127 billion over the next two and a half years to individuals and states for health care alone, a fact that has Republicans fuming that the stimulus package is a back door to universal health coverage.

“It’s raining money,” said Representative Michael C. Burgess, Republican of Texas.

The House plans to vote Wednesday on the $825 billion bill, and the Senate is expected to vote on a similar measure next week.

As Congress rushes to inject cash into a listless economy, it is setting aside many of the restraints that have checked new domestic spending for more than a decade. The White House said the changes contemplated by Congress would provide coverage for nearly 8.5 million newly uninsured people who had lost their jobs and would protect Medicaid for many more whose eligibility would otherwise be at risk.

Of the $127 billion cost, the Congressional Budget Office said, $87 billion would be used to increase the federal share of Medicaid, $29 billion would subsidize private insurance and $11 billion would finance Medicaid for unemployed workers who could not otherwise qualify.

Most of the aid is billed as temporary. But Republicans fear that states would get hooked on it, just as they might grow accustomed to a big increase in federal aid to education, also included in the bill.

Democrats said the current economic crisis did not allow time for public hearings on the legislation.

“This is as urgent as it gets,” said Representative Anna G. Eshoo, Democrat of California.

After the House Ways and Means Committee approved its piece of the economic recovery legislation last Thursday, Representative Pete Stark, Democrat of California, said, “We accomplished more today than in the last eight years.”

Congressional Democrats developed the package in close consultation with President Obama. Health care provisions of the bill taking shape in the Senate are broadly similar to those in the House bill, though they may prove less expensive. Obama aides and advisers said the president would insist on health insurance assistance for the unemployed as part of a final bill, which he wants to sign by mid-February.

The legislation would allow states to provide Medicaid to an entirely new group: those who are receiving unemployment insurance benefits, their spouses and children under 19.

Medicaid is normally for low-income people, and for decades it has been financed jointly by the federal government and the states, with the federal share averaging 57 percent of costs.

The economic stimulus bill prevents states from enforcing a means test, saying, “No income or resources test shall be applied with respect to any category of individuals” who become eligible for Medicaid because they are receiving unemployment benefits. The federal government would pay 100 percent of the costs for people enrolled under this option through December 2010.

Republicans said this proposal would take a big step toward federalizing Medicaid. For their part, Democrats said the changes took a major step toward their goal of coverage for all Americans.

At the same time, the legislation would provide a huge measure of fiscal relief to state Medicaid programs, at a time when state revenues are declining and the number of Medicaid recipients is rising because of the recession.

The federal share of Medicaid spending now ranges from 50 percent in higher-income states like New York and Connecticut to more than 73 percent in poor states like Mississippi and West Virginia. Under the House bill, the federal share would be increased by at least 4.9 percentage points in every state, and by much more in states with large increases in unemployment.

The bill would also offer a lifeline to workers who have lost health insurance along with their jobs. In theory, such workers and their families can keep their group health benefits for 18 months under a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1986, known as Cobra. But laid-off workers are often required to pay 102 percent of the full premium, including the employer’s share, so the cost now can be prohibitive.

Under the bill, the federal government would pay 65 percent of the premiums for a year. That subsidy would almost surely increase the number of laid-off workers choosing to continue coverage.

Republicans wanted to deny the premium subsidies to people who had annual incomes of more than $100,000 or assets of more than $1 million. They also wanted to prevent people with more than $1 million of family income from taking advantage of the Medicaid option for the unemployed.

Democrats voted down those proposals in the House Committee on Energy and Commerce.

Representative Nathan Deal, Republican of Georgia, said “the poorest of the poor” had long been subject to income and asset tests when applying for Medicaid. But, Mr. Deal argued, under the new option, a millionaire could get Medicaid benefits, financed entirely by the federal government, without being asked about such matters.

The committee chairman, Representative Henry A. Waxman, Democrat of California, said, “It’s highly unlikely that you are going to find millionaires who would like to go on Medicaid.”

Moreover, Mr. Waxman said, the purpose of the new options is to “streamline the enrollment process” and speed assistance to people who are unemployed.

“It’s going to set up an unnecessary barrier if we have any income test,” Mr. Waxman said, adding that the enforcement of a means test could require “a whole new bureaucracy.”

The bill would also create a new option for people 55 or older and for those who have worked for the same employer for 10 years or more. They could retain health benefits under Cobra, at their own expense, until they became eligible for Medicare at 65 or obtained coverage through another job. Under this option, employers said, younger workers could conceivably hold onto their coverage for decades.

In a joint letter to Congress, the United States Chamber of Commerce, the National Association of Manufacturers and the National Retail Federation opposed this proposal, saying it would drive up costs for workers already covered by employer health plans.

“The people who sign up for unsubsidized coverage under the new option are more likely to have serious medical conditions and therefore to increase the cost of employee health care disproportionately,” said E. Neil Trautwein, a vice president of the National Retail Federation.

If states wanted the federal government to pay a larger share of Medicaid, they would have to maintain current eligibility levels and could not adopt more restrictive criteria. But states could reduce benefits or payments to health care providers.

Representative Christopher S. Murphy, Democrat of Connecticut, said he feared that such cuts would make it more difficult for Medicaid recipients to find doctors in some parts of the country.

    Relief Seen for Jobless and States in Health Care Plan, NYT, 28.1.2009, http://www.nytimes.com/2009/01/28/us/28health.html?hp

Pelosi Open to More Federal Money to Banks

January 25, 2009
Filed at 8:57 a.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- House Speaker Nancy Pelosi says she is open to additional government rescue money for banks and financial institutions. But she is demanding that taxpayers get an ownership stake in return.

She did not name a dollar figure in a television interview broadcast Sunday. And she did not use the term ''nationalization'' when referring to additional rescue dollars.

She said that if the government puts more money into struggling banks, then an ownership stake would be sought.

Already $350 billion has gone out to banks and financial institutions -- and the second $350 billion installment is now in the hands of the new Obama administration, which is promising tougher standards on how the money is used.

Pelosi spoke on ABC's ''This Week.''

    Pelosi Open to More Federal Money to Banks, NYT, 25.1.2009, http://www.nytimes.com/aponline/2009/01/25/washington/AP-Pelosi-Banks.html