Obama’s legislative wins: Too little, too late for Democrats?

President Barack Obama: Little help for Dems (AP)

Anxious and angry, Americans are not in a congratulatory mood. That’s bad news for President Barack Obama and his Democratic allies.

After winning a landmark health care overhaul earlier this year, Obama now stands on the brink of seeing Congress approve the most far-reaching overhaul of Wall Street regulations since the 1930s. Democrats aim to put it on his desk by July 4.

Yet with the economy still wobbly and the stock market retreating, Americans remain nervous about the possibility of a double-dip recession. They have seen few concrete benefits yet from the slow-to-unfold health care law. Likewise, it may be some time before Obama can point to results from the advancing legislation to rewrite the rules that govern Wall Street.

Senate passage last week of the financial overhaul bill was “another big win for him. But the problem is that, in terms of his standing in the eyes of the public, both these enormously far-reaching pieces of legislation are going to take quite a while to play out and to begin to affect the lives of Americans,” said Ross Baker, a political scientist at Rutgers University in New Jersey.

In the meantime, there’s plenty for people to worry about.

Despite signs of a fledgling corporate recovery, unemployment seems stuck at just under 10 percent. Home foreclosures continue to rise. Despite a rebound Friday, U.S. stocks have fallen some 10 percent in just the last month, signaling a correction to the bull market that began in March 2009.

Riots in Athens and strikes in Spain are rattling world markets. And millions of gallons of crude oil have gushed into the Gulf of Mexico over the past month from a blown out well, threatening the environment and jobs in the region.

The result: Americans are in a sour mood, and the polls reflect that.

Just 35 percent surveyed this month say the country is heading in the right direction, the lowest measured by the AP-GfK survey since a week before Obama took office in January 2009. His approval rating remains at 49 percent, as low as it has been since he became president.

Both the health care overhaul and the financial regulation measures are complicated pieces of legislation. Republicans have gone out of their way to portray both as examples of Democratic efforts to expand the scope of government.

Two months after Obama’s health care overhaul narrowly passed Congress, polls suggest many Americans still either don’t like the looming health care changes or are skeptical of them — and Republicans are seizing on that discontent at every opportunity.

Democrats believe the financial overhaul bill will be a bigger winner for them in November elections, given widespread public anger at Wall Street bailouts and bonuses. Obama won’t be on the ballot until 2012 and by then, the White House hopes, the economy will be stronger, the jobless rate will be lower and Americans will be enjoying benefits of the health care changes.

The health care bill and now the financial regulation legislation follow Obama’s signature legislative accomplishment of 2009, a $787 billion stimulus package passed in February 2009 that contained dozens of federal initiatives aimed at preventing the worst recession in 70 years from becoming another Great Depression.

The Congressional Budget Office recently estimated that the 2009 stimulus package has an actual long-term cost of $862 billion.

“By any objective terms, the Obama presidency has had an incredibly productive start. He reached high. The major things he’s taken on during very difficult times will pay dividends in legislative terms. But will he get credit in the short term? Probably not,” said Thomas Mann, a political scientist at the Brookings Institution.

“The public has come to believe the stimulus bill and financial bailout were of no use in helping the economy, contrary to evidence suggesting otherwise. Health reform remains a very controversial measure. The bottom line is that the public is scared, they’re angry, they’re in a foul mood and not inclined to see great victories or achievements,” Mann said.

Copyright © 2010 The Associated Press

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Senate passes financial industry overhaul

In a major victory for President Barack Obama, the US Senate has passed the most sweeping overhaul of financial industry rules since the Great Depression of the 1930s.

By a 59-39 margin, lawmakers approved Thursday an ambitious effort to curb Wall Street excesses blamed for fueling the 2008 global economic meltdown, amid smoldering voter anger months before November mid-term elections.

“To Wall Street, it says: No longer can you recklessly gamble away other people’s money,” Democratic Senate Majority Leader Harry Reid. “It says to those who game the system: The game is over.”

Senate Banking Committee chair Chris Dodd, a key author of the legislation, said it was “a major step toward creating a sound economic foundation for the American people we represent. This is their victory.”

The legislation, Obama’s top domestic goal, must still be merged with the House of Representatives’ rival version into a compromise measure before the final package can go to the president to sign into law.

House Financial Services Committee chair Barney Frank, a Democrat, told CNBC television that he foresaw smooth sailing and that “the president, I am certain now, will have signed this bill well before the Fourth of July.”

The measure aims to rein in big firms’ use of high-risk practices blamed for the collapse of 2008, end taxpayer-funded bailout of financial titans previously deemed “too big to fail,” and create an unprecedented consumer protection agency to shield Americans from industry abuses.

It also seeks to curb big banks’ lucrative, largely unregulated business in complex securities called derivatives, essentially bets on the future cost of an asset, which many businesses use to control risk from volatile prices.

It includes several measures aimed at increasing the transparency at the US Federal Reserve and the central bank’s accountability, as well as a measure aimed at blocking International Monetary Fund aid packages like the one for Greece without a guarantee that the money will be repaid.

A few hours before the vote, Obama pledged that the law would not smother the market.

“The reform I sign will not stifle the power of the free market — it will simply bring predictable, responsible, sensible rules into the marketplace,” he said in the Rose Garden of the White House.

“Our goal is not to punish the banks, but to protect the larger economy and the American people from the kind of upheavals that we’ve seen in the past few years,” said the president.

Obama also took aim at the financial industry, accusing it of deploying “hordes of lobbyists and millions of dollars in ads” to kill the bill and trying to “water it down.”

“Today, I think it’s fair to say that these efforts have failed,” he said.

Four Republicans joined all but two Democrats to approve the measure, drawing praise from Reid at the end of a month-long, sometimes bitter debate expected to stretch into the House-Senate “conference” to build a compromise.

US Treasury Secretary Tim Geithner said in a statement that he looked forward to working with lawmakers “to produce a sensible, prudent reform bill that strengthens the American financial system and preserves our ability to innovate and compete in a global economy.”

The two chambers were to pick negotiating delegates on Monday.

Some of the remaining disputes include curbs on derivative trading and restrictions on investment activities by deposit-holding banks.

Senate Agriculture Committee chair Blanche Lincoln, a Democrat, authored a measure in the bill aimed at ending the largely unregulated derivatives business, a step forcefully opposed by big banks and their lobbyists trying to shape the legislation.

Dodd introduced and then pulled back from but did not withdraw a measure gutting Lincoln’s proposal.

Democratic Senators Jeff Merkley and Carl Levin, authors of a measure to enact the so-called “Volcker rule” curbing deposit-holding banks’ investment activities, expressed faint hopes the final bill would include it.

The measure, named for former US Federal Reserve chairman Paul Volcker, would stop banks from holding customers’ deposits at the same time as making investments for their own gain — so-called proprietary trading.

Curbs on “prop trading” went into effect after the Great Depression. In 1933, the Glass-Steagall Act prohibited commercial banks from underwriting corporate securities, or acting as brokerages, but it was undone in 1999.

Copyright © 2010 Agence France Presse

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Obama sings his old “blame Republicans” song

Obama: Singing the same old tune (Reuters)

With his administration and policies in disarray and his party’s fortunes falling, President Barack Obama returned Thursday to his familiar theme of blaming Republicans for his problems.

Obama claimed any failures to jumpstart the economy is all the fault of his predecessor and the current GOP minority in the House and Senate and claimed his economic policies are working.

“We are heading in the right direction,” Obama claimed. “Despite all the naysayers who were predicting failure a year ago, our economy is growing again.”

Obama’s message may not sell to the the millions of Americans still out of work in the longest-running recession since the Great Depression. More Americans have been out of work for a longer period of time than any other point in American history.

Still, Obama claims his policies are working while slamming Republicans for “gumming up the works.”

“Their basic attitude has been, in Democrats lose, we win,” Obama told a Democratic fundraising event in New York City. “After they drove the car in the ditch, made it difficult as possible for us to pull it back, now they want the keys back. No. they can’t drive. We don’t want to have to go back in the ditch.”

Recent polls suggest Obama’s “blame my failures on Republicans” strategy isn’t working. Independent voters who gave Democrats victories in the last two elections continue to the party in droves and when Obama arrived earlier in the day for a speech in Buffalo his entourage faced billboards that proclaimed: “Dear Mr. President, I need a freakin’ job. Period.”

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Republicans block Wall Street reform…again

(AFP)

Undaunted by the political risks, Senate Republicans hung together and again thwarted Democratic efforts to start formal debate on sweeping legislation to rein in Wall Street excesses.

For the second time in two days, lawmakers voted 57-41 to take up the popular bill, falling short of the 60 needed to move ahead with the toughest regulatory overhaul of its kind since the Great Depression of the 1930s.

President Barack Obama led Democrats in slamming Republicans for blocking legislation backed by nearly two in three Americans, amid smoldering anger at fat-cat financiers blamed for the 2008 global economic meltdown.

“It’s one thing to oppose reform, but opposing even talking about reform in front of the American people and having a legitimate debate, that’s not right. The American people deserve a honest debate on this bill,” he said during a campaign-style visit to Iowa.

“Republicans have made it clear whose side they?re on: Big banks on Wall Street, not middle-class families,” said Democratic Senate Majority Leader Harry Reid, who set the stage for a similar vote on Wednesday.

The vote came as top Goldman Sachs executives faced a barrage of questions and criticism from a key Senate committee over the investment giant’s actions in the run up to the collapse, now the subject of a fraud lawsuit.

Republicans, mindful of a potential political price to pay in November mid-term elections for blocking the bill, said they wanted to give back-room negotiations begun last year more time to forge a compromise bill.

Their lead negotiator, Republican Senator Richard Shelby said his talks with Senate Banking Committee Chairman Chris Dodd, a Democrat, had made “considerable progress” in recent days but still faced high hurdles.

Shelby said “the biggest obstacle” was the creation of an “intrusive” consumer financial protection agency reaching beyond Wall Street to “anybody that’s dealing with finance,” like automobile dealers who offer loans.

“If they will meet us halfway on that, I think we could get a bill,” said Shelby, the top Republican on Dodd’s panel.

It was unclear how long moderate Republicans would hold out as Democrats happily piled on the pressure.

“At this hour, to consider that too radical an idea is stunning to me,” said Dodd, who warned that if Republicans blocked even the start of debate, “they do so, in my view, at their political peril.”

He also said he was prepared to accept an amendment from Democratic Senator Barbara Boxer that he described as saying “no money can be used, no taxpayer money… for any bailouts at all” of big Wall Street banks.

Dodd’s’s bill would erect a mechanism for dissolving rather than bailing out financial institutions whose collapse could risk crippling the US economy, so-called “too big to fail” firms.

The legislation — which would need to be merged with the bill the House of Representatives passed in 2009 — would also establish a new agency to protect consumers from abusive lending practices.

The legislation also aims to tighten regulations on the giant market in derivatives — complex, privately traded instruments tied to the underlying value of a commodity and seen as vehicles for dangerous speculation.

Despite the delay in starting debate, no senators were predicting that the popular measure will die.

Democrats and the White House have been eager to portray Republicans as in the pocket of Wall Street, while Republicans say they want tough new rules but that the bill as currently crafted is not ready and must be changed.

“The Democrat majority forced a vote on a bill that wasn’t ready for prime-time,” said Republican Senate Minority Leader Mitch McConnell, who accused Democrats of being “less interested in fixing this bill than in some political win they think they’re scoring by not fixing the bill.”

Democratic Senator Ben Nelson joined Republicans in both votes.

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Dems to GOP: ‘Go ahead, make our day’

Democratic Senators Christopher Dodd and Mark Warner (AFP)

With a showdown vote looming, Democrats are resisting Republican appeals for a broad compromise on financial overhaul legislation and are eager to test whether GOP unity will crack in an anti-Wall Street political climate.

The top negotiators on the regulatory bill — Democratic Sen. Christopher Dodd and Republican Sen. Richard Shelby — professed to be close to a deal during a joint appearance on NBC’s “Meet the Press.”

But Shelby conceded that “inches sometimes are miles,” and the two did not hold a negotiating session Sunday.

The legislation is the most sweeping effort to rein in financial institutions since the Great Depression. Aimed at avoiding a recurrence of the near collapse of the financial system in 2008, it would create a mechanism for liquidating large firms that get into trouble, set up a council to detect systemwide financial threats and establish a consumer protection agency to police lending. The legislation also would require derivatives, blamed for helping precipitate the meltdown, to be traded in open exchanges.

The House already passed its version of the legislation.

Senate Republican Leader Mitch McConnell on Friday blocked Democrats’ efforts to bring the bill up for debate, setting up a vote Monday that will require 60 votes to move ahead. McConnell and Shelby said Sunday that without a deal with Dodd, all 41 Republican senators would vote to stall the start of debate. Shelby said a deal in time for the vote was unlikely.

But unlike the health care debate, public sentiment was not working in favor of Republicans. Public opinion is leaning toward more regulation of large financial institutions, and a Securities and Exchange Commission lawsuit alleging fraud by Goldman Sachs has added the cloud of scandal to Wall Street.

On Sunday, Dodd agreed to toughen his overarching bill with stronger rules on derivatives, including one that had drawn objections from the Obama administration, according to a Democratic official familiar with the negotiations. Dodd entered into a tentative deal with Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., to incorporate her committee’s derivatives provisions into the broader regulatory legislation. At least two Republicans — Sens. Charles Grassley of Iowa and Olympia Snowe of Maine — are on record supporting Lincoln’s derivatives package.

Derivatives are the complex securities blamed for helping precipitate the 2008 Wall Street crisis.

One of the most sweeping of Lincoln’s restrictions would require banks to spin off their derivatives business into subsidiaries with a separate source of capital. Large banks fiercely opposed the provision. The Obama administration has called for banks to end trading in speculative securities but not to jettison operations that create derivatives markets for clients.

In yet another attempt to attract Republicans, Democrats appeared willing to jettison from the bill a $50 billion fund — financed by large banks — that would have been used to liquidate failing firms once considered “too big to fail.” The fund has been one of the main targets of GOP criticism.

Democrats said the time had come to move on with the bill.

“Are we going to start the debate or are we going to shut it down and continue negotiating, negotiating, negotiating?” Sen. Sherrod Brown, D-Ohio, asked on ABC’s “This Week” Sunday.

For now, Republicans are using the only leverage they have — the threat of 41 unified votes — to seek a bigger GOP imprint on the bill.

The impasse reflects differences over how to contain large, interconnected financial firms and how to liquidate them when they fail. But Democrats and Republicans also differed on how to protect consumers and how to set limits on previously unregulated exotic instruments such as derivatives.

Dodd has already incorporated a number of Republican ideas into his version of the bill following negotiations with Shelby and Republican Sen. Bob Corker of Tennessee. Democrats, particularly liberals, have become increasingly worried that a compromise with Shelby will limit their ability to amend the bill during floor debate.

Dodd tried to reassure them.

“We can’t take care of everything in the bill,” he said, referring to his talks with Shelby. “Obviously our colleagues will want to be heard.”

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Right wing rewrites history in real time

A bust of Thomas Jefferson at Monticello in Charlottesville, VA (AP)

The rabid right wants to rewrite history and in states like Texas they are already doing so.

Conservatives in the Lone Star state want the state school board to rewrite teaching guidelines and force schools to downplay the role that Thomas Jefferson played in American history while praising right-wingers like Phyllis Schlafly and challenging the Constitutional concept that separates church in state.

And that’s not all. Writes Steven Thomma of McClatchy Newspapers:

In articles and speeches, on radio and TV, conservatives are working to redefine major turning points and influential figures in American history, often to slam liberals, promote Republicans and reinforce their positions in today’s politics.

The Jamestown settlers? Socialists. Founding Father Alexander Hamilton ? Ill-informed professors made up all that bunk about him advocating a strong central government.

Theodore Roosevelt ? Another socialist. Franklin D. Roosevelt ? Not only did he not end the Great Depression, he also created it.

Joe McCarthy ? Liberals lied about him. He was a hero.

The effort is a classic right-wing ploy: Ignore the lessons of history and create fantasies that never existing.

Conservatives, of course, see it differently.

“We are adding balance,” Texas school board member Don McLeroy claims. “History has already been skewed. Academia is skewed too far to the left.”

Historians often debate the “official versions” of history but the current effort by conservative is not debate…it’s an attempt to hijack the truth and replace it with propaganda.

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