Minorities Lose the Most in the Recession

By Lesley Russell in Washington DC

5 August 2011


Several recent studies highlight how minorities have fallen even further behind white Americans in both income and wealth in the last few years. 

Last month the Pew Research Center reported that the wealth gap is at an all-time high, largely because of the recent slide in housing prices.  The median wealth of white households in 2009 was 20 times that of black households and 18 times that of Hispanic households.

A report from the National Urban League shows that the recession has erased almost 30 years of progress in African American communities.  Unemployment for blacks with a four year degree was 6.5 percent in 2009, compared to 2.9 percent for whites.  In 1992 there was only a 1.4 percentage point difference between balck and white unemployed graduates. 

An additional cause of black middle class downward mobility is the housing market.  Falling prices of homes, the single biggest invetsment for most blacks, hit the middle clases particularly hard, creating real reverals in black home ownership rates.  Just 44.8 percen of African Americans own their own homes today, compared with 74.1 percent for white Americans.

A new analysis of census data by the US2010 project at Brown University shows that the well-to-do African Americans live in poorer neighbourhoods than their white counterparts.  The average affluent black household - defines as eraning more than $75,000 a year - lives in a porrer neighbourhood than the average lower-income white household that makes less than $40,000 a year.  Neighbourhood poverty is linked to lower quality schools and health care and higher crime rates.  Many better-off black families are living with the same problems as poor black families.

                          

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Deal Done

By Lesley Russell in Washington DC

2 August 2011


The House has passed the compromise bill to increase the debt ceiling by 268 votes to 161 – arguably a bigger margin than expected. Only 93 Democrats voted for the bill, among them Rep Gabrielle Giffords who returned to Washington for the first time since she was shot in January to cast her vote.

The Senate will take up the bill tomorrow, and it seems certain that it will pass. At last! There are no winners here.

It is interesting to compare and contrast the way the House Democratic leaders and the House GOP leaders outlined the compromise to their members.

                    

 

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Here is the information the Democratic caucus was provided about the bill:

"The first part of the plan includes approximately $1.2 trillion of deficit reduction through the establishment of ten-year discretionary caps. In the first two years, there would be a firewall separating security and non-security spending. Total discretionary spending in Fiscal Year 2012 and 2013 will be limited to $1.043 trillion and $1.047 trillion, respectively, about $7 billion and $3 billion below Fiscal Year 2011. The security savings would represent roughly $5 billion of the total $10 billion in reductions over this two year period.

The plan provides for debt ceiling increases in two stages. The President may request a $900 billion increase now, of which $400 billion is immediately available. This $900 billion is subject to a resolution of disapproval in both the House and Senate. The disapproval measure would be subject to Presidential Veto. Once the debt comes within $100 billion of the debt ceiling, the President may ask for at least an additional $1.2 trillion, which could rise to $1.5 trillion if a Balanced Budget Amendment is sent to the states or the Joint Committee process described below enacts more than $1.5 trillion in savings. This increase is also subject to a resolution of disapproval.

The legislation creates a Joint Committee tasked with achieving $1.5 trillion in deficit reduction. A joint, bipartisan committee, made up of 12 members (6 from each Chamber, equally divided between Democrats and Republicans, and appointed by the Majority and Minority Leaders in each Chamber), will be tasked with developing legislation to achieve at least $1.5 trillion in future deficit reduction by Thanksgiving. The committee's legislation, which can include entitlements and revenues, will be guaranteed an up-or-down vote in both chambers, without amendments, by December 23.

If the Committee's recommendations achieve at least $1.5 trillion and are enacted by Congress, the debt ceiling will be raised by $1.5 trillion. If the committee's bill is enacted and produces between $1.2 trillion and $1.5 trillion, the debt limit will be raised dollar-for-dollar. If the committee fails to produce a bill, its bill is not enacted, or it produces less than $1.2 trillion, the debt limit will increase by $1.2 trillion. Regardless of the amount of the debt limit increase, it would be subject to a disapproval vote which would, in turn, be subject to a Presidential Veto. If the Joint Committee fails to come to a majority agreement on recommendations that achieve at least $1.2 trillion, or Congress fails to enact recommendations that produce at least that amount, sequestration is triggered, forcing across-the-board spending cuts. 50 percent of those cuts forced by sequestration would apply to defense spending in function 050. The other 50 percent would come from non-defense discretionary and mandatory spending with exemptions for many programs.

Social security, Medicaid, veterans' benefits, and other essential benefits are exempt from cuts. Medicare savings are not totally exempt, but would be capped at 2% and are limited to Medicare providers only – the sequester would not cut benefits. Finally, as part of this legislation, both the House and Senate will vote on a balanced budget constitutional amendment before the end of the year. The plan does not make the debt limit increase contingent on passage of the amendment. Nor does it prevent a vote on an alternative version of the balanced budget amendment."

This is a very different presentation than the powerpoint presentation Boehner gave the GOP caucus. His presentation is available here.

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Where are the votes?

By Lesley Russell in Washington DC

29 July 2011


As I write this the House of Representatives is just a few hours away from a vote on the Boehner plan, which would create another debt ceiling crisis in less than six months and may lead to a down grade in the US credit rating. Boehner needs 217 votes to pass the plan. The vote is deliberately scheduled to occur after the markets close. Thus far, no House Democrats have publicly supported the Boehner plan. Without Democratic support, Boehner can only afford to have 23 Republicans vote against the bill. All reports are that he does not yet have those votes.

The conventional wisdom in the media and in political circles is that Boehner will eventually find the votes to pass the bill by twisting arms behind the scenes. But Think Progress has done a careful review of public statements by House Republicans to the media and made some phone calls to congressional offices and finds that 23 House Republicans have already expressed opposition to the Boehner plan.

Politico reports that Boehner is currently engaged in one-on-one meetings with recalcitrant Republicans, pulling them off the House floor and meeting with him in his ceremonial office on the second floor of the Capitol. Meanwhile the Tea Party is rallying outside the Capitol, calling for the Boehner bill to be rejected.

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Republican leaders won over some reluctant members by scheduling Friday votes on two versions of a balanced-budget amendment to the Constitution. One version is an amendment favored by conservatives that includes a requirement that future tax increases be enacted only with a two-thirds majority in Congress. The other version is one deemed more likely to attract Democrats because it does not include the tax provision. However Democratic leaders are opposed to the measure.

Even if the Boehner bill passes the House, it will go nowhere in the Senate.

Senate Majority Leader Harry Reid said today that the Senate will vote tonight (Thursday night) on the bill. In a move that is likely to anger House Republicans, the vote will be on a motion to table Boehner's plan. Such a vote will allow Reid to quickly dismiss the Boehner measure, as it requires a simple majority to circumvent the hours of debate generally demanded by Senate rules to move something through the chamber. All 53 Senate Democrats and 2 Independents have vowed to oppose the bill, but in order to move his own legislation Reid needs 60 votes.

So the net likely outcome late this evening is another stand-off. Who will blink first?

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Political intransigence on steroids

By Lesley Russell in Washington DC

26 July 2011


The weather in Washington is hot and so is the political climate. At this point it's hard to see where the compromise positions are. I'll leave it to others to analyse the budget deficit / debt ceiling standoff in detail. However it is worthwhile here to refer to the statement yesterday from Bob Greenstein who heads up the Center on Budget and Policy Priorities.

The statement bluntly says that "House Speaker John Boehner's new budget proposal would require deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, the repeal of health reform's coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans. The plan is, thus, tantamount to a form of "class warfare." If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history. This may sound hyperbolic, but it is not. The mathematics are inexorable." And the statement then lays out the inexorable mathematics of the Boehner plan.

If you need an example of the current political intransigence and failure to act and the subsequent consequences, then you need look no further than what is happening with the failure to fund the Federal Aviation Administration(FAA).

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The FAA was shut down at midnight last Friday when its funding expired. More than 4,000 FAA employers and an unknown number of construction workers have been laid off. All development and construction projects have ceased and only air traffic controllers, plane safety inspectors and test pilots remain on the job. The airlines' authority to collect federal ticket taxes has expired, costing the FAA about $30 million a day in lost revenue. The airlines have cashed in, raising ticket prices to an amount equivalent to the tax – money which now goes to airline coffers.

Earlier this spring, the House and Senate passed drastically different versions of the reauthorization bill for the FAA. The Senate measure provided $34.5 billion over two years, while the House provided $59 billion over four years. Now GOP senators refuse to let go of an anti-union provision amending the National Mediation Board's union voting rules and a provision eliminating $16.5 million in air service subsidies for 13 rural airports that Democrats say are unacceptable measures in the House passed bill and House Speaker John Boehner will not call a conference to resolve the differences between the House and Senate bills.

All indications point to a prolonged shutdown of the FAA. Rep. John Mica (R-FL) chairman of the House Transportation and Infrastructure Committee, said there are no negotiations between the House and Senate to resolve the dispute, and House Republican leaders are determined to hold their position. "I have no idea when we'll open the FAA again," he said.

Long-term authority for the FAA expired in 2007. Unable to agree on long-term funding legislation for the agency, Congress has kept the FAA operating through a series of 20 short-term extension bills. But it seems that the 21st extension is a step too far.

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Reenactment of First Manassas Battle

By Lesley Russell in Washington DC

23 July 2011


On July 21, 1861 the citizens of Washington drove out in their buggies and wagons to picnic and watch the first major battle of the Civil War at Manassas, confident that the untried Union army of General McDowell would handily defeat the Confederates under General Beauregard and put a quick end to the conflict.

At the beginning of the five hour battle the Union soldiers had the Confederates on the retreat, except for one brigade commanded by General Jackson, who held isground and earned the nickname "Stonewall". Thanks to Jackson the Confederates were able to hold out until General Johnston showed up with 9000 reinforcements. Soon the Union soldiers and the city burghers were fleeing back to Washington..

The casualties soared to 2,900 killed, wounded, captured, or missing for McDowell's army and 2,000 for Beauregard's. The battle spurred a sense of victory in the South, pushing them on, and in the North a feeling for revenge, but the more prescient realized that what lay ahead was no pageant but a long and bloody war.

This weekend, in stifling heat, dignitaries, history buffs and thousands of re-enactors will gather on the hills and fields outside Manassas to mark the 150th anniversary of the Battle of Bull Run. More than 8,000 reenactors and up to 100,000 spectators are expected. Despite the heat, the re-enactors will be dressed in woolen period garb and proper military uniforms.

 

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Where the voters are on the debt ceiling debate.

By Lesley Russell in Washington DC

21 July 2011


Recent polls show that Wall Street, Main Street and American voters are increasingly concerned about where the debate over extension of the debt ceiling is not going and the consequences of forcing the government into default. This is no longer an issue just for economists and policy wonks. As the default deadline draws near, the American public is increasingly concerned about the prospect of the federal government not being able to meet its obligations.

There has been a consistent trend toward greater support for lifting the ceiling. A new Washington Post/Pew Research Center poll shows that the percentage of Americans concerned about the consequences of not raising the debt limit has gone up since May, while concern over raising the ceiling has remained static. Similar polling from Gallup and the Wall Street Journal / NBC confirms the trend of more voters favoring lifting the debt limit as the national debate progresses.

Also, when voters are provided with more context (do you support or oppose raising the debt limit to avoid defaulting on U.S. Government debts), voters are more likely to support raising the debt ceiling, with support running at roughly 1:1 with opposition. A Pew Research Center survey finds the nation evenly split on the urgency of raising the debt limit. When offered a choice, 40 percent of adults say they consider it "absolutely essential to raise the federal debt limit by August 2 to avoid an economic crisis," while 39 percent say the country can go past the August 2 debt limit deadline "without major economic problems." Roughly as many voters are concerned that "not raising the debt limit would force the government into default and hurt the economy" (43%) as are concerned that "raising the debt would lead to higher government spending and make the debt bigger" (45%).  See here for more.

There is only minimal public support for Michele Bachmann's extreme position that the debt ceiling shouldn't be raised under any circumstance - only 18% believe Congress should not raise the debt limit under any circumstance.

 

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Gallup polling shows that Americans prefer a deficit reduction approach that includes both spending cuts and tax increases. More than seven in ten voters prefer a plan that either includes "equal spending cuts and tax increase" (32%), "mostly spending cuts" (30%), or "mostly / all tax increases" (11%). Only 20% of Americans insist on deficit reduction through spending cuts alone. Even 68% of Republicans prefer some element of tax increases to cut the deficit, compared to just 26% of Republicans who want tax increases completely off the table.

Fundamentally, the Republican position in the debt ceiling debate (spending cuts only) is not just out of step with voters, but even with self-identified Republicans.

Several polls show that Americans want their leaders to compromise on the debt ceiling and focus on the real issues facing families.  For example, a CBS poll found that by more than 5:1, voters nationwide would prefer a compromise that they don't fully support (76%) to not reaching an agreement and having the U.S. default on its debts (14%). Support for a compromise spans party affiliation, as overwhelming majorities of Democrats (80%), Republicans (78%), and Independents (72%) prefer even an unsatisfying compromise to government default. Even 64% of self-identified Tea Party supporters would rather see a compromise they don't fully support, compared to only 28% who prefer no compromise and a government default.

A new Washington Post / ABC News poll shows that the majority of American think both President Obama and congressional Republicans are not willing enough to compromise in their budget negotiations. However the poll also suggests that Republicans will receive the brunt of voter anger if a deal is not reached.  President Obama is seen as operating in good faith while Republicans are not. Gallup shows that 60% of Americans feel the President is trying to find a solution, while a similar 62% believe Congressional Republicans are not.

The re-emergence of a bipartisan plan for a budget deal from the so-called "Gang of Six" seems to have buoyed the President this week.  And a WSJ / NBC News poll finds that the public is in favour of this debt-cap compromise.

 

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Hot and humid

By Lesley Russell in Washington DC

20 July 2011


The dangerous heat wave baking the central United States is today extending its reach eastward and by the end of this week is expected to cover most of the eastern part of the country.  Excessive heat warnings have been declared by the National Weather Service in at least 14 states, most of those in the upper Midwest. Heat advisories are in effect for four other states. Cities like Dallas and Oklahoma City have had more than a fortnight of daytime temperatures over 100 (degrees Fahrenheit).

There is extensive drought across the country and this is worsening every day. The US Drought Monitor released earlier this month showed 29 percent of the country in drought, and 12 percent of the country in exceptional drought. Of all states, drought conditions continued to be most extensive and intense in Texas, with 72 percent of the state in exceptional drought.

These drought conditions have evolved very quickly. A year ago, there was essentially no extreme or exceptional drought over the U.S. in Oklahoma, where exceptional drought now covers 40 percent of the state, a marked 10 percent increase from the end of June. The New York Times has an excellent illustration showing the evolution of "extreme to exceptional" drought over time.

To the north and northwest of where it's been extraordinarily dry and soils are parched, it's been extraordinary wet and soils are saturated. So the huge heat ridge over the central U.S. over the past week combined with high soil moisture, have brought high humidity levels in places like Minneapolis and Des Moines.

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Women's World Cup Soccer final: US vs Japan

By Lesley Russell in Washington DC

18 July 2011


If you've had enough of the poisonous partisanship of debt ceiling negotiations and the unexpected unraveling of the Murdoch empire, then join me on the couch for something big – the Women's World Cup Final! It's up in just two hours.

Soccer doesn't get much of a look in as a serious sport in the US and women's soccer may even rank below cricket. But you may have noticed the American fondness for American winners, and right now, thanks to a Swedish coach, the US women's soccer team is a winning combination. (This doesn't mean they are a dead cert to beat Japan today, but they will give the Japanese team some real competition.)

This is the team's first World Cup final since 1999, and it's fair to say that the wonderful players of those years (Mia Hamm, Brandi Chastain) have largely been forgotten in the past decade, despite the fact that the US team won gold at the Beijing Olympics.

There was one effect – the number of girls playing soccer grew 12.5 percent from 1999 to 2001, reaching 8.3 million players. According to the US Soccer Federation, in 2010 the US had twice as many registered female soccer players as any other country, and women's soccer rates well as a college sport. But there has been no viable professional league to give the sport greater visibility (fans can't even buy the US teams' jerseys). In 1999 in California 90,000 spectators and 18 million Americans television viewers watched the US beat China. Attendances at this season's games of the Women's Professional Soccer roster has surpassed 4,000 in only five of 34 matches.

Dr Jill Biden is leading the official US delegation to watch today's match. Hillary Clinton and Barack Obama will be watching. As will the two small children of Christie Rampone, team captain and "super mom" who has played in four World Cups and three Olympic Games.

 

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Farewell to First Lady Betty Ford

By Lesley Russell in Washington DC

13 July 2011


The wonderful eulogies to former First Lady Betty Ford have served to remind us how muzzled current political spouses are. Who now would dare speak out as Betty Ford did about pre-marital sex, smoking marijuana, equal rights and addiction and volunteer that they had sex with their husband 'as often as possible'?

The first of her memorial services today in California was attended by Michelle Obama and three former first ladies. The focus was on her twin passions: politics and her world famous Betty Ford Center for substance abuse and alcohol treatment.

The eulogies were delivered by former first lady Rosalynn Carter, journalist and National Public Radio commentator Cokie Roberts, and a former director of the Betty Ford Center.

In a sure sign that she was fully aware of how partisan politics had become, some years ago she planned her own funeral and memorial services and specifically asked Cokie Roberts (a member of a noted political family of Democrats – both her father and mother were Members of Congress) to give one of her eulogies. 

Roberts said that Betty Ford asked her to give a eulogy five years ago and specified it should be about the times in Washington when Democrats and Republicans could be friends and about the power of friendship to mend political differences and ensure that partisan politics do not paralyze government.

    

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Roberts' father, Congressman Hale Boggs, was House majority leader when Republican Gerald Ford was House minority leader. (Her mother,Lindy Boggs, later served in the House after her father's plane disappeared, never to be found, in Alaska in 1972.) They also both served on the Warren Commission. The two families became close, as did the Ford and Carter families, despite Jimmy Carter defeating Ford in the 1976 presidential election. Carter spoke at Ford's funeral in 2007. The two families were so close that before his death, Ford asked the Carters to join his wife aboard Air Force One, which flew his body to its final resting place in Grand Rapids.

"Mrs. Ford was very clear about what she wanted me to say," Roberts said. "She wanted me to talk about Washington the way it used to be. She knew there were people back then who were wildly partisan, but not as many as today.

"They were friends and that was what made government possible," said Roberts, adding that the topic seems particularly appropriate this week when the two parties are divided over dealing with the national debt ceiling.

Sigh. It does make you long for the good old days.

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Obama comes out swinging on the budget talks

By Lesley Russell in Washington DC

12 July 2011


This morning President Obama came out swinging on the stalled budget deficit talks, issuing strong challenges to both Republicans and Democrats. "It is possible for us to construct a package that is balanced, shares sacrifice, would involve both parties taking on sacred cows," he said.

Obama pushed Republicans to live up to their demands to cut the nation's deficit and address its long-term debt by enacting a program to include not just spending cuts, but also revenue increases and changes to entitlement programs. He called on Democrats to be open to changes to entitlement programs like Social Security and Medicare. And he pushed everyone to make as large a deal as possible, stating that he will not consider any short-term, stop-gap solutions.

"It's not going to get easier. It's going to get harder," Mr. Obama said. "So we might as well do it now. Pull off the Band-Aid. Eat our peas. Now is the time to do it."

"I'm prepared to do it. I'm prepared to take on significant heat from my party to get something done."

He also said, as he has done previously, that getting the budget issues off the table for the long term was the key step to enable new initiatives to tackle unemployment to go forward. Last Friday's poor employment figures hang like the sword of Damocles over his re-election chances.

        

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The President stressed that he saw House Speaker John Boehner as his key negotiating partner. However Boehner's decision not to go big on a debt limit deal is the starkest demonstration yet of the limits of the Speaker's power, how beholden he is to the right wing of his party, and how threatened by House Leader Eric Cantor.

"It's crazy to think the speaker was considering a trillion [dollars] in tax increases. After all, we're the anti-tax party," said one Republican. "Cantor brought him, the economy and our party back from the abyss. Cantor is strengthened, clearly. And it's another example of the speaker almost slipping beyond the will of the GOP conference."

But while the President today made effective use of his bully pulpit to highlight the recalcitrance of Republicans, it remains to be seen if he will be the victor in this power play.

Budget meetings are set to continue on Monday afternoon, with the President and House and Senate leadership at the table. Republicans now want to revert to the smaller $2.4 trillion package that was being worked on by the group headed by Vice President Biden, but neither Republicans nor Democrats have endorsed this, and it is understood that there is bipartisan agreement on only about $1.4 trillion of the package. This would involve more than $1 trillion in cuts to government agencies, about $200 billion in reductions to Medicare and Medicaid and another $200 billion from other direct payment programs such as farm subsidies and federal employee pensions. There was no agreement on the revenue measure proposed by Obama which included elimination of a raft of corporate tax breaks benefitting people like hedge fund managers and corporate jet owners – those were the measures that Cantor objected to.

Time is running out to reach a deal on raising the nation's $14.3 trillion debt ceiling before an Aug. 2 deadline. On Sunday both Treasury head Timothy Geithner and IMF head Christine Lagarde warned of the consequences for the international economy if this is deadline is not met.

But Republican presidential candidates are pledging that they will not vote to raise the debt limit.

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