Republicans Prepare to Kill Jobs; Democrats Angle for Majority Leader

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Brian Beutler reports that the Republicans are prepping to make sure no additional support for jobs gets passed next week.

Senate Democrats want to vote on the first installment of a jobs package as early as Monday, amping up the pressure on Republicans to get aboard. But for the moment, they’re not biting.

“We’ll have a vote on a jobs bill on Monday,” Senate Majority Leader Harry Reid said at a press conference today.

There’s just one wrinkle: According to the Senate’s top vote counter, there is currently no Republican support for the proposal Democrats are putting forth–and with Scott Brown to be seated today as the 41st Republican Senator, they’ll need at least one member of the minority to come aboard.

“You need two to tango. And you need Republicans for bipartisanship,” said Senate Majority Whip Dick Durbin (D-IL).

Now, there’s an interesting subplot to this.

Current Majority Leader (and very endangered incumbent) Harry Reid says no Republicans currently support the bill.

Majority Whip and second-most senior Democratic Senator Dick Durbin suggests there are no Republicans supporting the bill.

Meanwhile, Vice Chairman and third-most senior Democratic Senator Chuck Schumer has been working on a deal–at least for tax credits for businesses that create jobs–with Republican Orrin Hatch.

Sens. Chuck Schumer (D-N.Y.) and Orrin Hatch (R-Utah) released a plan Wednesday to give tax breaks to companies that add new workers, a proposal that is likely to become a key component of the jobs bill Senate Democratic leaders are hoping to unveil this week.President Obama has called for employers to receive a $5,000 tax credit for each new employee they hire, while other lawmakers have floated different proposals for a job tax credit. The Schumer-Hatch plan, which would allow companies to avoid paying Social Security taxes for the duration of 2010 on each unemployed worker they hire, appears to have the most momentum in the Senate.

“Our payroll tax cut is a simple, cost-effective and bipartisan solution. It will help put more Americans to work right away,” Schumer said in a press release. Hatch added: “While Senator Schumer and I disagree on most issues, we’ve been able to come together on an affordable, effective and targeted proposal to get the American people back to work.”

Democratic leaders emphasize that they haven’t yet settled on an exact combination of items that will go in the Senate’s jobs package, but Senate Majority Leader Harry Reid (D-Nev.) suggested Wednesday that he was taking a close look at the Schumer-Hatch bill.

Mind you, the Schumer-Hatch deal only deals with one aspect of the deal, not with things like COBRA subsidy extension. And I’ve got concerns about any plan that defunds social security.

Nevertheless, it seems that the drama over whether Democrats will squabble themselves into irrelevance–and/or whether Republicans will sacrifice the interests of their constituents for partisan gain is playing out large on the jobs front.

Whatever is happening, it is preventing Americans from getting back to work.

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Frank Luntz's Ideal Small Businessperson: Democratic Congressman Mark Schauer

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You know that Frank Luntz memo telling Republicans how to kill Wall Street reform?

Republican message guru Frank Luntz has put together a playbook to help derail financial regulatory reform.

In a 17-page memo titled, “The Language of Financial Reform,” Luntz urged opponents of reform to frame the final product as filled with bank bailouts, lobbyist loopholes, and additional layers of complicated government bureaucracy.

“If there is one thing we can all agree on, it’s that the bad decisions and harmful policies by Washington bureaucrats that in many ways led to the economic crash must never be repeated,” Luntz wrote. “This is your critical advantage. Washington’s incompetence is the common ground on which you can build support.”

Well, as Ben Smith points out, Luntz used a funny picture to illustrate his section on how best to reach out to small businesspeople.

Pollster Frank Luntz picked an unusual poster boy in his new memo instructing Republicans to kill attempts to tighten financial regulations by tying the new laws to the bailout: Michigan Democratic Congressman Mark Schauer.

Schauer and his wife, Christine, are used to illustrate a section suggesting Republicans “personalize the impact” of the legislation by claiming it will effect specific small business owners.

In his research, “”The most popular images of small business owners both projected optimism with signs saying ‘grand opening’ or ‘open.'”

The image above, which appears on page 14 of the memo, appears to be taken from Scheuer’s campaign website, which celebrated the opening of his wife’s store in a July, 2008 posting headed, “Mark Schauer: Small Business Owner.” The Battle Creek, Mich. shop, according to the item, is a kind of upscale consignment store.

Mark, of course, is the Congressman from just west of Ann Arbor. He is speaking like a proud progressive in one of the most closely contested districts this year. And, as Ben points out, Mark voted for Wall Street reform but opposed the bailout (he was first elected in 2008 so was not in Congress at the time).

I guess not only are Democrats better for the economy. But even astute political observer Frank Luntz recognizes that Democrats make the ideal businesspeople too.

Update: Mark Schauer’s office issued the following in response to Luntz’s gaffe:

To be clear, Frank Luntz is a paid consultant for Wall Street banks and big credit card companies, and this memo was written with one goal in mind – defeating a bill to end taxpayer-funded bailouts and clean up the mess on Wall Street.

As a small business owner himself, Mark understands the economic challenges entrepreneurs in Michigan are facing. That’s why he plans to support a new tax credit for businesses that hire more workers, and a measure that will make it easier for small businesses to obtain credit and expand their operations by taxing excessive bonuses at bailed out Wall Street banks.

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The Word Not Spoken: Foreclosure

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ForeclosuresI didn’t watch the SOTU last night–though I did follow along on Twitter. It seems like those actually watching came away with a renewed belief in American exceptionalism, which I suppose is one important–but not necessarily wise–point of the SOTU. Huzzah! USA! USA! USA!

And I’ll have more to say later about other parts of the content of the speech. But for the moment, I wanted to call attention to one word not spoken: foreclosure.

Mind you, the mortgage crisis did not go without mention. Here are the places where the giant trauma that has devastated our economy was discussed:

One year ago, I took office amid two wars, an economy rocked by severe recession, a financial system on the verge of collapse, and a government deeply in debt. Experts from across the political spectrum warned that if we did not act, we might face a second depression. So we acted – immediately and aggressively. And one year later, the worst of the storm has passed.

But the devastation remains. One in ten Americans still cannot find work. Many businesses have shuttered. Home values have declined.

[snip]

These struggles are what I’ve witnessed for years in places like Elkhart, Indiana and Galesburg, Illinois. I hear about them in the letters that I read each night. The toughest to read are those written by children – asking why they have to move from their home, or when their mom or dad will be able to go back to work.

[snip]

Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there’s one thing that has unified Democrats and Republicans, it’s that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal.

But when I ran for President, I promised I wouldn’t just do what was popular – I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost.

[snip]

Let me repeat: we cut taxes. We cut taxes for 95% of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food, and other necessities, all of which helped businesses keep more workers.

[snip]

We cannot afford another so-called economic “expansion” like the one from last decade – what some call the “lost decade” – where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation.

[snip]

As hard as it may be, as uncomfortable and contentious as the debates may be, it’s time to get serious about fixing the problems that are hampering our growth.

One place to start is serious financial reform. Look, I am not interested in punishing banks, I’m interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes.

[snip]

The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments. This year, we will step up re-financing so that homeowners can move into more affordable mortgages. [my emphasis]

Now, I get it. The point of the SOTU is to speak of the positive, to look forward, not back. You don’t want to plant a bummer word like “foreclosure” in the middle of such a speech, like a turd in a punchbowl, to kill the buzz. I get it–pundits were looking to count the number of times Obama said “jobs” (23, by my count), and so were not focused on the housing crisis that is at the root of the jobs crisis.

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A Sure Sign Democrats Must Impose a Spending Freeze

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Who’d a thunk it? When given a choice, voters are happy to impose higher taxes on those who have been getting rich while everyone else faces higher costs and stagnant wages.

Yesterday Oregon voters delivered a huge victory for progressives by approving Measures 66 and 67, raising taxes on incomes over $250,000 and large corporations to generate $733 million to close the state’s budget deficit. The Oregon legislature had approved the taxes last summer, but a corporate/teabagger alliance organized to put it to voters in a referendum.

One wonders if the national media will cover this victory at all – much less at the levels of the Massachusetts Senate race.

[snip]

The opposition ran a well-funded campaign, led by Nike, Columbia Sportswear, and other big businesses. They were joined by Ari Fleischer’s FreedomWorks and the libertarian publisher of the Oregonian, who used to be at the Orange County Register before it went belly-up. Together they ran a campaign arguing that the tax increases would worsen unemployment. But 55% of voters have rejected that, and instead showed that when a truly progressive campaign is waged, the right-wingers can be beaten. Even on taxes.

What it also shows is that progressive policies, supported by smart progressive organizing led by folks such as former US Senate candidate Steve Novick and the Oregon Bus Project, which reached out to younger voters and had a strong ground game, can beat well-funded, well-organized corporate/teabagger alliances.

Their message was deeply progressive:

These reforms protect nearly $1 billion in vital services like education, health care and public safety. These funds preserve class sizes, save jobs for teachers, provide seniors with in-home care, and provide health care for thousands of Oregonians through the Oregon Health Plan. In this time of economic crisis, we must protect those who have been hit the hardest – seniors, children and the unemployed – without putting more of a burden on the middle class.

Like Cruickshank, I’m not holding my breath for Cokie Roberts and George Will and Chris Matthews to drone on about how this is a game-changer. But it really must be read as the book-end to the MA Senate vote. Progressive messaging and policies do work. If only national Democrats can muster some progressive politics and messaging.

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The Obama Chill: In 2012 Obama Will Run Against Democratic Congress

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There’s a lot to say about Obama’s foolish call for a spending freeze in the middle of the Great Recession.

But for now, consider the point that Chris Bowers is making: the spending freeze won’t happen. It won’t happen because Congress, whose remaining power in the era of post-Cheney has been reducted to clutching purse strings, will not let it happen.

In the midst of the rightful outrage over President Obama’s call for cuts in social spending during poor economic times, keep in mind that the likelihood of social spending actually being frozen or cut remain pretty low.

This is because the people who actually write spending bills–members of the House Appropriation and Budget committees–say they won’t be freezing or cutting social spending:

House Democrats are rejecting an idea floated by the Obama administration to freeze or cut discretionary spending in 2011.

Key members of the House Appropriations and Budget committees told The Hill this month they would not go along with alternative spending plans being requested by White House Budget Director Peter Orszag, which are part of the administration’s plan to reduce the deficit.

Months ago, the White House asked the relevant House Democrats to prepare three budget drafts, including one with a freeze on discretionary spending and one with a 5% cut in discretionary spending.  They didn’t even prepare the drafts.

Members of Congress write and vote on the budget, and members of Congress like to bring the bacon home to their districts. As such, the legislative process will ultimately make President Obama’s call for a spending freeze a hollow one.  Like the President’s deficit commission, not much will actually come of this.

This call for a spending cut is a press release.

But it’s more than a press release. It is a promise that is conveniently scheduled to come due just in time for the 2012 election season. In mid 2011, Obama will be haranguing Congress about helping him fulfill his promise. And Congress, up for election like they always are, will ignore him.

And then Obama, who has already saddled Congress with accepting unpopular legislation over popular legislation, appears to be putting his perceived self-interest above Congress’. And this may be no different–by the time the 2012 election comes around, Obama will be in full Deficit Troll mode, blaming those mean Democrats in Congress for his own failures. Maybe I’m wrong on this, but the only logical explanation I can fathom for this obtuse policy is to set up an Obama-vs-the-Dems narrative for Obama’s reelection.

And mind you, I spoke of Obama’s “perceived self-interest” above, because no matter how you look at it this policy simply makes no sense. Voters in 2010 are going to be voting on their pocketbook. Voters in 2012 are going to be voting on their pocketbook. They don’t really care about deficits. Rather, they care about a working economy. And this little PR stunt will only make it harder for Obama to do what he needs to do to get the economy working again.

Hopefully, though, it’ll serve to clarify the issue for Congress: Obama’s not looking out for them, so they’re going to have to pass sensible legislation without Obama if need be. Including more spending to stimulate the economy.

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This Fed Chief Brought to You by Enron

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EnronJust wanted to throw two tidbits into the debate on Ben Bernanke’s reconfirmation. First, this quote, which needs no explanation.

In the event that Bernanke isn’t confirmed, several sources say, Federal Reserve Board Vice Chairman Donald Kohn likely would be elevated to acting chair of the U.S. central bank. Bernanke would be entitled to stay on the board until his term as a Fed governor expires in 2020, but the sources said Bernanke could instead return to a professorship at Princeton University.

Possible successors to Bernanke include three people currently advising Obama on the economy, former Fed chief Paul Volcker, Larry Summers and Christina Romer.

Kohn was traveling in Europe at the end of the week on Fed business, but strategy on the Bernanke confirmation was being led by former Enron lobbyist Linda Robertson, who is viewed as an effective advocate for the banking chief on Capitol Hill. [my emphasis]

And then there’s this:

The effort to secure Mr. Bernanke’s confirmation, which had intensified after two Democratic senators announced their opposition on Friday, continued through Saturday and included calls to senators by both Mr. Obama and Mr. Bernanke. By late afternoon, senators began issuing statements of support

White House and Congressional Democratic leaders say they now believe that they have the 60 votes needed to block a filibuster of Mr. Bernanke’s reappointment. They expect some Democrats will oppose him on the confirmation vote, but that requires only 50 votes.

This implies that Harry Reid is demanding party discipline on the procedural cloture vote on Bernanke, but allowing Senators to vote no on the confirmation itself. That’s the way it often works on such issues, of course. Unless it’s health care.

Nice to see that when the party wants to protect the guy who refuses to work for full employment, they can enforce party discipline, but not when the party could offer better health care options to voters.

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Supreme Court Unleashes Corporate Campaign Cash In Citizen's United Decision

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images5thumbnail1.thumbnail11The stunning and decisive loss by Martha Coakley to Scott Brown in the Massachusetts Senate special election has already caused a tsunami of fear among Democrats, and corresponding joy among Republicans, heading toward next fall’s midterm elections. If you think this is cause for concern for Democrats looking forward to the 2010 midterm elections, picture the scene if the Republican party were also able to benefit from removal of restrictions on corporate and financial industry cash infused into their electoral coffers heading into the midterms and 2012 Presidential election.

As I wrote back last August, the Supreme Court took very unusual steps in a case by the name of Citizens United v. FEC to craft a case – originally argued on separate grounds – into a vehicle to make a Supreme Court declaration on the constitutionality of campaign finance restrictions and regulations. As Adam Cohen of the New York Times put it:

If the ban is struck down, corporations may soon be writing large checks to the same elected officials whom they are asking to give them bailouts or to remove health-and-safety regulations from their factories or to insert customized loopholes into the tax code.

Citizens United v. FEC was originally argued on March 24, 2009; but subsequently noticed for re-argument on the new grounds involving the opening of corporate campaign contributions on September 9, 2009. The general consensus among the cognoscenti is that the Justices were leaning heavily toward blowing up the regulations and restrictions on corporate campaign contributions. For a complete blow by blow procedural and substantive history leading up to the decision, see Lyle Denniston’s SCOTUSWiki on this case.

Well, the decision in Citizens United v. Federal Elections Commission is in and attached hereto. As you can see, it is a 5-4 split decision with Justice Kennedy writing the majority opinion. The decision below is reversed in part and affirmed in part, and the seminal case of Austin v, Michigan is hereby overruled as is that part of McConnell v. FEC which upheld the resitrictions on independent corporate expenditures. In dissent, and/or partial dissent is Justice Stevens, joined by Ginsburg, Sotomayor, and Breyer. Justice Thomas also filed an opinion concurring in part and dissenting in part.

Today’s decision in Citizens United v. FEC abolishes the previously settled distinction between corporate and individual expenditures in American elections and would appear to apply to state and local elections as well as Federal ones given that the Court recognizes such a First Amendment right. This is literally an earth shattering change in the lay of the land in campaign finance, and it will have ramifications in every way imaginable for the foreseeable future.

Quoting a very interested observer, Senator Russ Feingold, he of McCain-Feingold fame, John Nichols had this to say in The Nation:

But U.S. Senator Russ Feingold, the Wisconsin Democrat who has been in the forefront of campaign-finance reform efforts for the better part of two decades, is worried.

“This would be in my view, a lawless decision from the Supreme Court,” says the senator who gave his name to the McCain-Feingold law. “Part of me says I can’t believe they’ll do it, but there’s some indication they might, and that means the whole idea of respecting the previous decisions of the Supreme Court won’t mean anything anymore.”

A lawyer who chairs the Constitution Subcommittee of the Senate Judiciary Committee, Feingold notes with regard to controls on corporate campaigning: “These things were argued in 1907, when they passed the ban on corporate treasuries. It was argued in 1947, Taft-Hartley did this. The Supreme Court has affirmed over and over again that it’s not part of free speech that corporations and unions can use their treasuries (to buy elections).”

If the court does overturn both law and precedent to advance a corporate Read more →

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On Gruber: I Don't Want Apologies. I Want Independent Analysis.

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Between the auto show and the Prop 8 trial and associated travel, last week was tremendously exhausting for me and it will take me several days to actually report on those two events. But it seems one thing hasn’t moved on very much since last Sunday–the reporting surrounding Jonathan Gruber’s role in pitching the Administration’s health care. Gruber’s defenders are still falsely claiming I accused Gruber of tainting his analysis for pay (I said, “I don’t doubt he believes all this stuff”) and suggesting that I’m ignoring Gruber’s qualification for the HHS contract (I wrote an entire post affirming that the sole source on it made sense). Now, the debate has ratcheted up as some very able commentators call for apologies.

Unfortunately, that debate–like Gruber’s failure to reveal his conflicts in the first place–has supplanted what is really long overdue in this policy debate: real analysis of the assumptions behind the $850 billion plan about to be enacted by Congress, the assumptions that Gruber had a key role in formulating.

Gruber’s public claims delayed real analysis of the claim that the excise tax would raise workers’ wages

To explain why this is important let me make a suggestion that I can’t prove, but which is the reason I started looking at this in the first place: because someone as credible as Gruber made certain claims about the excise tax, others in his field did not examine his claims in timely fashion.

Gruber, in conjunction with the Joint Committee on Taxation, has long been claiming that the excise tax would raise workers’ wages. I first started challenging that claim in October, in response to an Ezra Klein post that relied on Gruber’s faith-based claim that the excise tax would lead to higher wages. On November 5, Gruber quantified the benefit as $74 billion in 2019. And by December, I was in full panic mode, given that no economist could point me to a study proving the point, even in the face of benefit consultants’ surveys refuting it. Economists kept pointing me to Gruber’s papers and telling me not to worry my sweet little non-economist head about such matters.

Perhaps because of the work of the Economic Policy Institute, people finally started looking at this key claim in the last two weeks. No lesser economist than Gruber’s chief defender, Paul Krugman, judged that those making the claim (Krugman implied, but did not say explicitly, that this criticism was directed at Gruber) were exaggerating. And Gruber, who backed off the claim slightly after having had his conflicts exposed, has since admitted privately that he “over-reached” in his earlier statements.

So to review what happened: for a number of months, unions and benefits professionals and dirty fucking hippies like me challenged this assumption, but no one in Gruber’s field appears to have done any independent analysis of his claims. As a result, the excise tax was passed by the Senate based on at least one erroneous assumption. But now, either because economists have weighed in or because Gruber’s conflicts have been exposed, a key part of those assumptions has been challenged (and, in a perhaps not unrelated development, unions have been able to negotiate a palatable deal on this issue).

This kind of analysis should have happened last fall, but it did not, at least partly (I would argue) because someone of Gruber’s prominence had strongly made the claim. His colleagues didn’t do what scholars normally do, regardless how prominent the scholar, which is to check his work. And again, none of this is meant to say Gruber “over-reached” with this claim intentionally. Rather, because the normal peer review of Gruber’s claims didn’t happen, he (and with him, the Administration and the Senate) made a mistake, one that has already had real policy implications.

The entire basis for the excise tax remains unexamined

Now, this matters to me not because a bunch of prominent people are accusing me of being a scandal-monger, but because I believe some more key assumptions about the health care reform have not been adequately examined. In fact, there are two key claims about the excise tax that have, at the least, gotten far too little scrutiny.

Start with the revenue model. Read more →

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Krugman on the Cadillac-as-Chevy

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A number of people have pointed to this Krugman post, in which he seemingly agrees with the excise tax apologists.

I think that states his position too strongly. What Krugman does is argue is that it makes sense to limit the tax exclusion for benefits. At the same time, he admits there are problems with imposing the excise tax as a flat dollar amount, not least because it’ll end up targeting older workers and those with chronic medical issues. In that stance, Krugman endorses a key point raised by excise tax critics–that it is taxing people who need the insurance, rather than just the affluent.

Here’s how Krugman weighs in on the Excise Tax Raise claim.

Second, there’s the argument that any reductions in premiums won’t be passed through into wages. I just don’t buy that. It’s true that the importance of changing premiums in past wage changes has been exaggerated by many people. But I’m enough of a card-carrying economist to believe that there’s a real tradeoff between benefits and wages.

Maybe it will help the plausibility of this case to notice that we’re not actually asking whether a fall in premiums would be passed on to workers. Even with the excise tax, premiums are likely to rise over time — just more slowly than they would have otherwise. So what we’re really asking is whether slowing the growth of premiums would reduce the squeeze rising health costs would otherwise have placed on wages. Surely the answer is yes.

I’ll come back to that, but first I want to treat his rebuttal of the third complaint about the excise tax–that it targets unions that have exchanged salary increases in the past for benefits–because I think it is illustrative to the question of the Excise Tax Raise.

The last argument is that this hurts unions which have traded off lower wages for better benefits. This would be a bigger issue than I think it is if the excise tax were going to kick in instantly. But it won’t, giving time to renegotiate those bargains. And bear in mind that this kind of renegotiation is exactly what the tax is supposed to accomplish.

Krugman suggests, I think, that the unions that will be disproportionately affected by this tax will have three years to negotiate new contracts that (presumably) take more compensation in wages and less in health care.

Nationally, one of the unions that will be most affected by this is AFSCME–national, state, and local government workers. The teachers unions are also likely to be affected.

So what do you think the chances are, in an economic environment in which many states are struggling to close budget deficits, in which states are cutting basic services and educational resources dramatically, that any contract renegotiation in the foreseeable future would involve a one-to-one swap of wages for health care costs or even any raise at all? What are the chances that elected government officials would give public employees salary increases when all their constituents were struggling, rather than putting that money back into the services that constituents need?

Not. Gonna. Happen.

In another economic environment, unions might be in a position to negotiate for raises to offset hits to their benefits package. But not in this economic climate, not these unions.

Which brings me back to Krugman’s take on the Excise Tax Raise.

Krugman starts by ceding that “the importance of changing premiums in past wage changes has been exaggerated by many people.” “The Shrill One” is being polite here in not naming names. But the report he links–the EPI report I’ve cited–introduces the claim this way:

Jonathan Gruber, an economics professor at M.I.T., argued in an op-ed in the Washington Post on December 28, 2009:

And when firms reduce their insurance generosity, they make it up in higher pay for their workers. We saw this in the late 1990s, when the rise of managed care temporarily lowered insurance costs, and wages rose in real terms for the first time in many years. But as soon as managed care was weakened and health costs rose again, we once again saw flat or declining real wages in the United States. (Gruber 2009)

The paper then goes on to name Ezra Klein and NYT’s David Leonhardt as the others making this claim.

In other words, Krugman starts by saying that Gruber and others are exaggerating the degree to which wage increases in the late 1990s were caused by a slowing rise in health care premiums. So Krugman’s rebuttal is, in part, a Nobel Prize winner affirming that the excise tax’s biggest boosters are overselling their case.

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It All Depends on Your Definition of Failure

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Politico is now aiding the fear-mongerers in declaring the Obama’s Administration’s response to a failed terrorist attack a failure (one, two, three, four, balanced by this).

And yet, little mention of the successes the Obama Administration has had: preventing Najibullah Zazi’s alleged attack attempt, rooting out efforts to recruit Somali youth from Minnesota, catching several self-radicalizing Americans. Indeed, the frenzy surrounding the Obama Administration’s failure to prevent a failed attack seems to exceed that surrounding questions about the handling of Nidal Hasan.

Meanwhile, there’s also little mention of the recent reports showing how badly the Bush Administration screwed up the Afghan war–a massive strategic failure that has allowed al Qaeda to sustain its threat. And real hypocrisy about the Bush Administration response to equivalent events, like the Shoe Bomber.

Right Wing Breaking News!! Failure failure failure (if you don’t look closely at all)!!!

But note the silence, thus far, about a real Obama Administration failure. (h/t Calculated Risk)

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.

The Obama Administration’s unwillingness to force the banks sucking at the federal teat to take a haircut on mortgages whose value had been blown out of proportion by a captive mortgage industry is a damning failure, one that may lead us into a double dip recession, one which forces more and more families into dire circumstances. Even if you only care about national security, narrowly defined (as Republicans and Lieberman appear to), if the failure to solve the foreclosure crisis extends the recession, it’ll make it a lot harder to pay for all the cool war toys that seem to give fear-mongers big woodies.

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