Progressives to Obama: Go Big or Go Home

Obama Jobs Plan: Progressive Groups Urge President To ‘Go Big’

 The Huffington Post      Posted: 8/30/11 06:10 PM ET

Sixty-seven major progressive organizations have penned an open letter to President Barack Obama, asking him to “go big” as he prepares a new jobs plan, which he will announce in a major speech just after Labor Day.

The groups — including MoveOn, Democracy for America, Rebuild the Dream and the National Council of Women’s Organizations — commend Obama for presenting a jobs plan at a “crucial moment,” but also stress the negative impact of Congress’s failure to provide a fix for the nation’s high unemployment rate:

A problem this serious needs a plan to match it in scope. Tax cuts and incentives for corporations have repeatedly failed to put Americans back to work. It is time to move beyond these half-measures designed to appeal to a narrow ideological minority who have repeatedly shown their unwillingness to negotiate and their disinterest in real solutions. History — and proven economics — tells us that any plan to solve our job crisis needs to be big, bold, and create jobs directly.With 25 million Americans out of work, or only able to find part-time work when they want and need full time jobs, aggressive action is needed. Representative Jan Schakowsky’s “Emergency Jobs to Restore the American Dream Act” is an example of the kind of bold step that we need to take as a country and that you should include as part of your broader jobs agenda. It would decrease unemployment 1.3 percent by directly creating more than 2 million jobs, including jobs for construction workers to rebuild our crumbling infrastructure, and for educators, health care workers, firefighters, and police, to strengthen our communities.

The progressive groups have reservations about Obama’s intention to dedicate part of his speech to deficit reduction, according to a press release from Campaign for America’s Future.

They are also concerned that Obama’s plan may not be large enough to be taken seriously — the plan is expected to be significantly less ambitious than the $825 billion stimulus of 2009.

According to the Associated Press, economists who advocate for government intervention in the economy estimate that it would take a package of at least $300 billion to avoid backsliding, and even more to boost the economy significantly. It is unlikely a plan that large would be accepted by Congress, which was divided on fiscal issues during the recent debt ceiling debate.

1 in 5 American Children Live in Poverty

Study: 1 in 5 American children lives in poverty

Researchers find 14.7 million children were poor in 2009, 2.5 million more than in 2000

Image: Karla Washington
updated 8/17/2011 5:30:32 AM ET

LAS VEGAS — Karla Washington worries how she will afford new school uniforms for her five-year-old daughter.

Washington, an undergraduate student, earns less than $11,000 a year from a part-time university job. The salary must cover food, rent, health care, child care and the occasional splurge on a Blue’s Clues item for her only child.

“My biggest fear is not providing my daughter with everything that she needs to be a balanced child, to be independent, to be safe, to feel like she is of value,” said Washington, 41.

Washington’s economic woes are seen throughout Nevada, where the nation’s highest unemployment and foreclosure rates have combined to devastate families and empty neighborhoods and construction yards.

A national study on child well-being to be published Wednesday found Nevada had the highest rate of children whose parents are unemployed and underemployed. The state is also home to the most children affected by foreclosures — 13 percent of all Silver State babies, toddlers and teenagers have been kicked out of their homes because of an unpaid mortgage, the study found.

Across the nation, the research by the Annie E. Casey Foundation found that child poverty increased in 38 states from 2000 to 2009. As a result, 14.7 million children, 20 percent, were poor in 2009. That represents a 2.5 million increase from 2000, when 17 percent of the nation’s youth lived in low-income homes.

Recession hits hard
In the foundation’s first examination of the impact of the recession on the nation’s children, the researchers concluded that low-income children will likely suffer academically, economically and socially long after their parents have recovered.

“People who grew up in a financially secure situation find it easier to succeed in life, they are more likely to graduate from high school, more likely to graduate from college and these are things that will lead to greater success in life,” said Stephen Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “What we are looking at is a cohort of kids who as they become adults may be less able to contribute to the growth of the economy. It could go on for multiple generations.”

The annual survey monitored by policy makers across the nation concludes that children from low-income families are more likely to be raised in unstable environments and change schools than their wealthier peers. As a result, they are less likely to be gainfully employed as adults.

There are other social costs. Economically disadvantaged children can result in reduced economic output, higher health expenditures and increased criminal justice costs for society, the survey concludes. The research is based on data from many sources, including the Mortgage Bankers Association, National Delinquency Survey and U.S. Census Bureau.

“Even if you don’t care about kids and all you care about is your own well-being, then you ought to be concerned,” said Patrick McCarthy, president of the Baltimore, Md.-based charity. “… We’ve got to think about what kind of state, what kind of country we can expect to have if we are not investing in the success of our children.”

The report found some bright spots.

In the two decades since researchers began compiling the annual report, infant mortalities, child and teen deaths and high school dropout rates have declined. But the number of unhealthy babies have increased, and there were far more children living in low-income families.

Programs such as food stamps, unemployment insurance and foreclosure meditation have acted like a dam against the flood of poverty, McCarthy said, but that assistance has been threatened by federal and state government budget cuts.

Mississippi in last place
Mississippi kept its overall last place ranking in child welfare for the 10th consecutive year, according to the survey. It was closely trailed by neighboring Louisiana and Alabama, a nod to the poverty that plagues southern states. Nevada ranked 40th overall, its worst ranking in 10 years, largely because of its economic decline.

The rankings are determined by a state’s achievement in 10 indicators that reflect child poverty, such as undernourished infants, infant mortalities, teen births and children in single-parent families. The top state for children was New Hampshire, ahead of Minnesota, Massachusetts and Vermont.

In Mississippi, 31 percent of children were living in poverty — the highest level in the U.S.

New Hampshire had the smallest population of low-income children at 11 percent. The federal poverty level this year is $22,350 a year for a family of four, but child advocates claim that figure should be higher.

Nevada, Florida, Arizona and California and other states grappling with high foreclosures rates also were home to the largest populations of children affected by the mortgage crisis. North Dakota had the fewest, followed by South Dakota, Vermont, Wyoming and Alaska. In all, more than 5.3 million children have been affected by foreclosure, the study found.

Mississippi’s rankings were least affected by the recession, only because it long ago secured its worst-case standing. Overall, Mississippi ranked last in seven of the survey’s child well-being indicators.

“We are really tired of being in 50th place,” said Linda Southward, a social science research professor at Mississippi State University. She said state policy makers have closely followed the rankings and have strived to promote early education as part of its strategy to reduce overall poverty.

“We are just extremely challenged given the economic hardships that we have,” she said.

Dreaming of a savings nest
Nevada, meanwhile, has long had a challenging record on child issues because of its historically low-performing schools.

The Kids Count survey found 11 percent of Nevada teens were not in school and had not graduated from high school in 2009, the worst rate in the nation. New Hampshire was best at 3 percent.

Image: Karla Washington
Karla Washington dreams of stashing away a small savings nest for her daughter, in case of emergency. “I want to be able to say that she is OK,” she says.

At least 34 percent of Nevada’s children were living in families with both parents not working full-time in 2009, the largest increase in the nation, according to the survey.

Fact-checking Bachmann

Posted at 06:00 AM ET, 08/16/2011

Michele Bachmann’s too-good-to-be-true stat on federal workers

By , The Washington Post


“Well, I think the one thing we have to do is reject the new normal level of spending under the Obama administration, because President Obama amped up spending to never-seen-before levels. . . . I mean, one example I’ll give you is, we had one employee at the federal Department of Transportation that made $170,000 a year at the beginning of the recession. We had the trillion-dollar stimulus, and 18 months into the recession, we had 1,690 employees making over $170,000. Government has really been growing at — a lot of largesse, but the people in the real world aren’t. And that’s what has to change. Government has no conformity at all with the real world.”

— Rep. Michele Bachmann (R-Minn.), Aug. 14, 2011

By popular demand, we are going to vet a statement in the column that we had previously discussed in an online chat. We probably did not do it full justice then, and Bachmann continues to say it — including on the Sunday morning TV shows this past weekend. A number of readers sent e-mails curious to know the truth, so we are happy to oblige.

On the surface, the fact appears astonishing — a huge increase in big-paying government jobs under Obama. But this is one of those statements one has to unpack very carefully, because Bachmann uses what is essentially a correct statistic regarding government salaries in a very misleading way.

The Facts

Note that although the GOP presidential aspirant starts out by talking about the “never-seen-before levels” of spending under Obama and then mentions “the trillion-dollar stimulus,” the example she cites — the number of Transportation Department employees making more than $170,000 — uses the metric of “the beginning of the recession.” There’s a reason for that phrase: The recession started in December 2007, 13 months before Obama became president.

In other words, Bachmann gives the impression that she is talking about something that Obama did, but in fact, the big increase in government pay that she denounces started under Obama’s Republican predecessor, George W. Bush.

In fact, the apparent source of Bachmann’s claim, a 2009 article in USA Today, made it clear that Bush recommended across-the-board raises that, after they got through Congress, resulted in boosts of 3 percent in January 2008 and 3.9 percent in January 2009. By contrast, Obama in 2010 recommended the smallest federal pay raise since 1975 — 2 percent — and then froze salaries in 2011.

USA Today also noted that civil servants are generally prevented from earning more than their agency’s leader, so when the salary of the Federal Aviation Administration chief was raised, nearly 1,700 employees had their salaries lifted as well.

The fact that these salary shifts occurred before Obama became president is easily confirmed by fiddling with the data displayed on the Web site of the U.S. Office of Personnel Management.  If you check the data before Obama became president, it is clear that the bulk of the new salaries were instituted before he took office.

The Pinocchio Test 

Bachmann’s use of the phrase “beginning of the recession” suggests she knows full well that the pay raises did not occur under Obama, and yet she persists in leaving the impression that Obama is directly responsible for boosting the number of employees making more than $170,000.

That makes her statistic, while technically correct, deliberately misleading, especially since Obama has actually frozen federal salaries.

Double Dip Recession Solved by Unspent Stimulus Money?

Could Unspent Stimulus Money Be Used to Fend Off a New Recession?

by Michael Grabell
ProPublica, Aug. 9, 2011, 11:46 a.m.

The nation’s top economists are already giving odds on a double-dip recession. The Federal Reserve has only a few bullets left in its gun. And Congress seems politically paralyzed to come up with any new infrastructure or tax-cut plan that would fire up the economy.

So, it seems all the more surprising that the federal government still has $100 billion to $150 billion in stimulus money left to spend. That’s about as much as the Making Work Pay tax credit that gave $800 apiece to middle-class families in 2009 and 2010. And it’s twice as much as Congress gave to states to stabilize budgets and save education jobs.

So, could the money be better used to counteract the fallout from the European debt crisis and Standard & Poor’s downgrade of the U.S. credit rating?

Taking back money from slow-moving infrastructure projects like high-speed rail and spending it on sooner-starting projects or on short-term stimuli like food stamps is easier said than done and might create more problems than it fixes, according to economists and current and former White House budget officials.

“It’s meaningful, but it’s not a game-changer,” said Mark Zandi, an economist at Moody’s Analytics who has followed the stimulus. “From an economic and political perspective, I’m not sure that would make a lot of sense to do. A lot of this spending has generated a lot of planning, a lot of environmental designs. They’re counting on the money. If you’re going to divert it, you’re going to create all kinds of problems for them.”

More than half of the remaining money is tied up in tax credits for things like renewable energy production and business equipment purchases, as well as increases in safety-net programs such as Medicaid and food stamps, which are distributed to states every three months.

Minus that, federal agencies had about $56 billion left in project funding at of the end of July. All but a few billion dollars of that is already committed to specific projects.

Although the vast majority of stimulus money is gone, dozens of solar, wind, high-speed rail and broadband Internet projects have yet to break ground. It wasn’t until this year, for instance, that doctors could begin claiming billions of dollars in incentives to adopt electronic health records.

In addition, many highway projects—such as the rehabilitation of Interstate 295 in southern New Jersey—are reimbursed as they go. Work has begun, and construction workers are receiving paychecks, but the money technically isn’t “paid out” until a certain phase is complete.

“Rescinding the remaining funds which have already been obligated would mean halting projects before they are complete, putting workers out of jobs and leaving contractors without payments owed to them,” said Moira Mack, a spokeswoman for the White House Office of Management and Budget.

Centuries of federal law dating back to the Constitution tie the president’s hands when it comes to spending money even in an economic emergency. Congress has full authority to set the government’s budget, and federal agencies are required to use the money for a specific purpose. Many programs are further restricted with labyrinthine rules and formulas that dictate how much each state will get.

While federal and state officials do have some discretion to pick grand public works or minor repairs—a new bridge versus a paved road, for example—once they have signed a contract or a grant agreement, it would require an act of Congress to undo and could subject the federal government to liability.

“By and large, an obligation is a commitment that, absent violation of the terms and conditions, can’t be pulled back and redone unless both parties agree,” said Jonathan D. Breul, executive director of the IBM Center for the Business of Government.

Such an act has precedent, though, under the Recovery Act. The White House shifted funds when recipients didn’t file progress reports and after newly elected Republican governors, concerned about additional costs, turned down high-speed rail projects.

Congress cut funding for food stamps, renewable energy loans and broadband to pay for the Cash for Clunkers car rebate program in 2009 and a program to save teachers’ jobs in 2010.

Linda Morrison Combs, who was OMB controller during the George W. Bush administration, said a similar situation occurred when she was chief financial officer at the Environmental Protection Agency. Some toxic-waste cleanups were facing long delays, so the agency worked with contractors and Congress to free up funds for other waste sites that had work ready to go.

Essentially, the administration could go to states and other recipients and say, “Are you going to spend your money or not?” But that option is complicated by some of the long deadlines set by Congress in the Recovery Act.

Although many programs had deadlines to spend or commit funds within the first two years, others such as energy-efficiency programs have until 2012 to spend their money. A California lawmaker recently tore into the state energy commission after an audit revealed it still had $183 million left to spend. Broadband expansion projects don’t have to be completed until 2013, and California’s high-speed rail funding doesn’t have to be spent until 2017.

Still, if a project has multiple phases, the promise of future funding gives the federal government significant leverage to influence projects already under contract, Breul said.

So, while the Obama administration might not have a bullwhip, it does have bully pulpit, which Vice President Joe Biden was known to use during his weekly calls with mayors and governors before stepping down as “sheriff” of the Recovery Act.

For example, the administration has urged school districts that have held onto education money to spend it faster. Similarly, the Commerce Department earlier this year moved to streamline environmental reviews for broadband projects.

Recession Dipping Into A Depression?

29 July 2011 Last updated at 10:57 ET BBC News

US economy: GDP growth much weaker than thought

US economic growth is much weaker than first thought, government figures show.

The economy grew at an annualised rate of 1.3% in the second quarter, the Commerce Department said. Economists had forecast growth of 1.8%.

And in a surprise move, first-quarter growth was revised down sharply from 1.9% to 0.4%.

There is also much uncertainty at the moment as to how the current row about the US debt crisis will affect its economic recovery.

If Congress does not raise the debt limit by 2 August, the US government could face funding shortfalls that it cannot meet by extra borrowing.

President Barack Obama urged Democrats and Republicans in the Senate “to find common ground” on a plan to address the debt crisis.

“There are plenty of ways out of this mess. But we are almost out of time.

“If we don’t come to an agreement, we could lose our country’s triple A credit rating,” he said. “That is inexcusable.”

“On a day when we’ve already been reminded how delicate the economy is, we can end [this crisis] ourselves.”

US markets opened lower, with the Dow Jones, the S&P 500 and the Nasdaq all falling 1% in early trade.

European markets, which were already in negative territory, saw further falls after the figures were released.


After the revision, the US growth figures now correspond to a quarterly increase of just 0.1% in the first three months of 2011, followed by a 0.3% rise in the second quarter.

Economists had expected steady growth in the second quarter, now that supply constraints from Japan after the earthquake and tsunami are easing.

The main reason for the lower-than-expected second-quarter figure was that consumer spending virtually ground to a halt, growing by just 0.1%, compared with 2.1% growth in the first quarter.

The large downward revision to the first quarter’s growth figure was made as a result of lower capital investment and higher imports than first thought, and adjusting how seasonal factors are taken into account.

In addition, growth for the fourth quarter of 2010 was revised down from 3.1% to 2.3%, indicating that the economy had already started slowing before the end of last year.

Tim Ghriskey, chief investment officer at Solaris Asset Management, said the figures were “shocking”.

“Clearly this is evidence of a mid-cycle slowdown. The only question now is do we see a pick-up in the second half and so far the economic data to date doesn’t suggest that.

“You might have some analysts come out and talk recession, talk about a double dip. Right now none of the forecasts even come close to that but this is weak data.”

Worse recession

The Commerce Department’s Bureau of Economic Analysis makes annual revisions to its GDP estimates every July, incorporating more complete and detailed data.

It now says that the US recession of 2007-2009 was more severe than previously reported, with the economy shrinking by 5.1% over that period, rather than 4.1%.

But it also says that growth in 2010 was a bit stronger than it had first estimated.

It now puts 2010 growth at 3%, up from the previous 2.9%.