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Dems, GOP Compromise; Agree to Tax Deal

A massive bipartisan tax package preventing a tax hike for millions of Americans is on its way to President Barack Obama for his signature Friday. The House easily passed the bill Thursday. It passed the Senate earlier this week. (Dec. 17)

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Congress Passes Obama-Bush Tax Cuts for the Wealthy

After a brief show of disapproval, the House went along with the Senate to extend George W. Bush’s gift to the yachting community for another two years. President Obama negotiated the compromise, which will add $858 billion to the deficit, thanks in part to generous give aways to rich Americans—and not just those who are living. The estate tax took a beating in this deal, leaving the first $10 million of grandpa Warbucks’ wealth untouched and taxing the rest at a lower rate than Democrats had wanted.

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By Ruth Marcus I’m hoping for the moment when a federal judge picked by a Democratic president strikes down the health care law. Or when a Republican-appointed judge upholds it. Related Entries December 16, 2010 An Afghan War Refresher With President Obama December 16, 2010 White House Sees Progress in Afghanistan

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[From Fix The Senate Now : Interview with a senator who likes how it dysfunctions.] Quietly behind the scenes in the Senate, Democratic senators are working to prepare a package of filibuster-rules reforms , led in particular by Sen. Jeff Merkley of Oregon and Sen. Tom Udall of New Mexico . This morning I sat in on a conference call with Merkley and Udall, who explained how they were planning to roll out a framework for other senators to examine soon. (Here’s Dave Weigel’s report .) Certainly the urgency to do so has only been heightened by events of the past few days, with Republicans using the filibuster to effectively forestall any action by the Senate in the lame-duck session beyond extending the Bush tax cuts — including approval of the START treaty, DADT repeal and the DREAM Act. Fundamentally, as these events have demonstrated, Republican abuse of the filibuster has rendered the Senate into a body in which only the supermajority rules. Considering that it was clearly never designed to be anything other than a majority-rule body by the Founding Fathers, it’s a pretty classic case of hypocrisy for Tea Partying right-wingers who love to parade their love of the Founders whenever possible. So I asked them about whether they intended to use the Founders’ intent as a kind of marketing point for their plan. Here’s what they said: Udall: That point is very much talked about. And it was not that long ago that there were major pieces of legislation in which the public discussion always was, ‘Can we get 51 votes to pass this?’ We had controversial Supreme Court justices — for example, Clarence Thomas — who was passed through without a supermajority. There was no cloture process or extended debate requested by those who opposed him. It was considered a privilege to exercised — that is, the privilege of delaying the Senate so that you could continue to make your points was considered a precious privilege to be exercised upon very rare occasion. That social contract has been eliminated. And members of the Senate are ready to make their objection to the regular order of 51 on everything, and often many times on a single bill, and that has done what you’ve just described, which is it has turned the Senate into a supermajority body. And for all those who say, do not disrupt the tradition of the Senate, the response is, the tradition of the Senate has never been for it to be a supermajority body. Merkley: To give you one little factoid here: When Lyndon Baines Johnson was in the Senate, the time he was the Majority Leader from 1954 to 1961, in that entire six-year period, he only attempted to cut off debate, filing cloture, one time. The last two years, Harry Reid had to do that 84 times. So we’ve taken something that was an extraordinary rare expression of opposition — where you went down to the floor and you did everything you could to persuade the American people and your own constituents as to your point of view — now we don’t do that. Now the only filibuster — the only filibuster I think I’ve really seen, a true filibuster in the Senate tradition, in the two years I’ve been here is what happened with Bernie Sanders in the last couple of days, where he took the floor for approximately eight hours or more to actually talk about the tax package. Most of the time, we see this in a secret way, when you look at C-SPAN2 and you’re looking at the Senate, you see a quorum call, the post-cloture debate time — that time is not being utilized for debate, and that has rendered the Senate a broken institution. Merkley also talked about the dysfunction that occurs after a cloture vote — that is, a vote to end the debate and thus the filibuster — fails to reach the 60-vote threshold: Merkley: You can think of a cloture vote that fails as the following: 41 senators have said they want to continue debate. When that happens, under current rules, we do not have ongoing debate. People just leave the floor and we are let with a quorum call. There’s nothing to compel senators to actually engage in the debate that they have said they want to have. There are a number of potential rules that could be used that exist currently, but each of them is trumped by some other procedural mechanism. And that’s why you don’t see continuous debate after a cloture call. … The advantage of continuous debate is that it honors the purpose of the cloture vote, which was to have debate. The other advantage is that it says to the American people: ‘Here is my position. This is why I’m not ready to have a vote yet. This is what is most important. Here is my case.’ In other words, senators stand on the floor, literally stand on the floor and make their case to the American public. And the American public and their colleagues can say, ‘You’re a hero’ or ‘You’re a bum.’ And provide that kind of feedback to all of the senators, who will have to vote on a subsequent cloture vote at some point down the line. And if no one has anything left to say, then the whole purpose of the post-cloture debate is concluded — that is, if no senator at some point is ready to continue the debate, then we should automatically go to a majority vote. This would get rid of many of the frivolous objections. And just to give you a sense of this — we just had a food safety bill in which three filibusters were launched, delaying the work of the Senate by three weeks. Each objection to the regular order creates a one-week delay and a 60-vote hurdle. And yet that was on a bill that had substantial bipartisan support, it was not, if you will, one of the bills that has grave national consequences one direction or the other. So if, on a simple, ordinary bill, you can have three cloture motions, you can imagine the type of delay that has resulted in we have no appropriations bills, why we don’t have a budget that was debated, and so on and so forth. Why so many House bills come here to die. Aas Greg Sargent reports today, there is some quiet momentum building in support of these reforms, especially given the galling impotency of the past couple of weeks: The key thing that’s happening is that groups pushing to reform the filibuster are now laying down a clear roadmap to action, and are setting their sights on clearly defined common-sense reforms that seem eminently achievable if enough political will gathers to make them happen. For instance, a range of lefty groups and powerful labor unions like AFL-CIO and SEIU recently spelled out a statement of core principles that would form the bedrock of reform. The underlying ideas here are twofold: First, there’s Senator Tom Udall’s insight that each Congress has the power under the Constitution to set its own rules. And second, Senator Jeff Merkley, one of a new crop of younger reform-minded Senators, is getting traction with a proposal of simple, achievable reforms to encourage as much open debate as possible, mainly by forcing Senators to actually filibuster. Of course, as anyone even casually familiar with the inner workings of the Senate will tell you, the best-intentioned ideas can — and often do — disappear without ever getting acted on, for reasons that no one can explain. But it’s certainly noteworthy that a real movement seems to be taking shape to prevent that from happening this time around. Tom Harkin is predicting some serious fireworks on Jan. 5 : Senate Democrats will make a dramatic effort to reform the rules of the chamber when the next Congress begins, one of the body’s primary filibuster-reform advocates said Wednesday morning. Sen. Tom Harkin (D-Iowa), who has championed a weakening of the procedural mechanism that allows the minority party to hold up legislation, predicted “fireworks” on Jan. 5, 2011 — the day on which the Senate can, he argued, revamp its rules by a simple majority vote. “There could be some fireworks. There could be some fireworks on January fifth,” Harkin said at a pro-reform event sponsored by several like-minded organizations. “I’m going to be there. I’m armed. I’m armed with a lot of history, and I know the rules, and I know the procedures too, so we will see what happens on the fifth.” “[Former Sen.] Robert Byrd in 1975, the last time that last time that we changed the rules and [brought the filibuster threshold] from 67 [votes] down to 60, actually stated on the floor that a majority, 51 senators, could change the rules. And that’s what we intend to do and that is what we are working on right now. We are coming on the fifth to basically send a motion to the vice president … that will change the rules and there is a procedure to provide 51 votes to do that. Robert Byrd said that in 1975 and that’s what we are going to try to do.” Essentially, that path to reform requires Vice President Joe Biden — who supports weakening the filibuster — to rule on the first day of the next session that the Senate has the authority to write its own rules. Republicans, presumably, would immediately move to object, but Democrats could then move to table the objection, setting up a key up-or-down vote. If 50 Democrats voted to table the objection, the Senate would then move to a vote on a new set of rules, which could be approved by a simple majority. Keep your fingers crossed. And call your senators and buck them up.

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Assange Freed on Bail in Britain

On Thursday, WikiLeaks founder Julian Assange was sprung from jail on bail in London, where he addressed a press throng, cracking wise about how justice in the British system is “not dead yet” and thanking his legal team and journalists who “were not all taken in and considered to look deeper in their work.” While he was at it, Assange discussed a rumor that his legal team was heeding about an indictment made against him in the U.S. and said he was more concerned “about being extradited to the U.S.” than to Sweden.

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‘Terror Babies’ Louie Gohmert Predicts Doom for America and the Military From Repeal of DADT

Click here to view this media It appears fear mongering flame thrower Rep. Louie Gohmert has found himself a new target other than those “terror babies” he warned us about . This week it’s “teh gays” that are going to literally destroy our military if they’re allowed to come out with the possible repeal of DADT, or worse yet, allowing gay members of the military to serve openly might just mean the end of America’s “existence as a great nation.” Right Wing Watch has more — Gohmert: Without DADT, Military Stands to Lose Thousands and US Will Reach the “End of its Existence as a Great Nation” : While debating the repeal of Don’t Ask Don’t Tell, Rep. Louie Gohmert (R-TX), of “terror-baby” fame, claimed that the policy’s repeal may doom the military and the nation as a whole. Gohmert blasted the recent Pentagon study , which showed that an overwhelming number of military service members do not oppose repealing DADT, and said that the military could potentially lose “many thousands, or tens of thousands, or hundreds of thousands” if the policy is repealed. Gohmert uses no scientific evidence of his own to back up his claim that “hundreds of thousands” of troops could leave, even though the Pentagon’s own polling found that the vast majority of troops do not have problems serving alongside gays and lesbians, and 92 percent of those who believe they have already served alongside gays did not believe that their “units functioned poorly as a result.” Gohmert went on to suggest that the House, which today voted to repeal Don’t Ask Don’t Tell 250-175, is opening up the floodgates to a disorganized and ineffective military. According to the Congressman, “when militaries throughout history of the greatest nations in the world have adopted the policy that it’s fine for homosexuality to be overt…they’re toward the end of its existence as a great nation.” Here’s the transcript of Gohmert’s remarks from Right Wing Watch and as they noted, he’s just channeling the remarks of The Family Research Council’s Tony Perkins who just earned a spot on the SPLC’s list of hate groups for their anti-gay rhetoric. You want an accurate poll? Take one where military members can answer privately with no ability of the commanders to figure out who answered where. And then let’s find out how many thousands, or tens of thousands, or hundreds of thousands we can lose with this activity. That’s important. Now we were told Don’t Ask Don’t Tell is inconsistent with American values, I would submit the military is inconsistent with American values. It does not have freedom of speech, it does not have freedom of assembly, it does not have the freedom to express its love to those in the military the way you can out here because it’s an impediment to the military mission. You can’t do that. Can you imagine military members being able to tell their commander what they think of him using freedom of speech or assembling where they wish? It doesn’t work. This is one of those issues that is so personal to the military; we need to have an accurate poll. And to my friend who said history would judge us poorly, I would submit if you look thoroughly at history, and I’m not saying its cause and effect, but when militaries throughout history of the greatest nations in the world have adopted the policy that it’s fine for homosexuality to be overt, you can keep it private it’s fine if you can’t that’s fine too, they’re toward the end of its existence as a great nation.

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C&L Opening Bell, 12-15-10

enlarge Good mornin’! Let’s get started: Republicans on the financial crisis investigation commission reached new levels of insanity yesterday when they chose to adopt a blame-it-on-ACORN narrative to the causes of the financial crisis: The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission’s work. The Republicans, led by the commission’s vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They’ll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said. The Republicans’ report is expected to conclude that government policy helped inflate the housing bubble and that prices weren’t expected to crash because the government pushed homeownership so aggressively. This cute little narrative — which I called the “We didn’t want to give houses to all those swarthy poor people, the government made us, WAAAAAAAH!” narrative — has absolutely no basis in reality. This chart from Barry Ritholz tells you everything you need to know (click to enlarge): enlarge As you can see this housing bubble was global in nature . And looking at the chart you can see that the U.S. actually had things relatively good compared to Ireland, Spain and the UK. And I’ll let you in on a little secret: The Community Reinvestment Act did not force Irish, Spanish or British banks to make no-doc mortgages. The reason so many banks made so many crappy loans over the years is the simplest of all reasons: Because the securitization process made it profitable for them to do so. The incentives within the system were such that the original lender never had to live with the consequences of making a crappy loan because he would just fork it off to Wall Street, which was hungry for loans to bundle up into CDOs. Ratings agencies had no incentives to point out that these CDOs were full of crappy loans because they were being paid by the banks to rate their products favorably. For good measure, add in the fact that the Fed kept interest rates low during the buildup of the bubble and gave banks lots of easy money to play with. And finally, when banks started issued synthetic CDOs backed primarily by unregulated credit derivatives, well, you have a recipe for a massively over-leveraged financial system where everybody is basically making money out of thin air. Heidi Moore has a more-nuanced take over at DealBook that makes roughly the same points: The government-sponsored enterprises fueled bad lending but it was the investment banks’ packaging of the same bad mortgages over and over again into toxic collateralized debt obligation bundles that created billions of dollars in losses. If every mortgage could only be securitized once, the losses would have been bad but not horrible. But because fancy Wall Street chicanery reproduced those mortgages and mirrored them in bundles of increasing size, the investment banks took far bigger losses than they would have otherwise. As those losses grew, the banks struggled to find enough cash to stay well capitalized. Investors grew scared that the banks would not be able to, and the government had to step in to bolster the banks’ capital with the Troubled Asset Relief Program and other bailout programs. (Incidentally, people like Dean Baker were writing about this way back in 2004 when nobody else was talking about it. But for some reason people like Dean Baker never get appointed to key government positions. Only people who couldn’t see a multi-trillion dollar housing bubble get that sort of work.) We’ve been on a “happy news roll” for the past couple of days and I think this qualifies : The Obama administration has selected Ohio Attorney General Richard Cordray, a vocal critic of the banking industry, to head the enforcement division of the new Consumer Financial Protection Bureau, according to a Treasury official. Cordray, a Democrat, has been a leader among state attorneys general in the probe into mortgage foreclosure practices. The probe is examining whether banks submitted faulty legal documents in foreclosure proceedings. This has “Elizabeth Warren lobbying” written all over it. To which I say, “Thank God!” If Obama had taken more advice from Warren over the past two years and less from the Geithner-Summers tag team, he wouldn’t be in the predicament he’s in today. Let’s hope this is the start of a trend (though I’m cynical enough to know it isn’t). Another data point you can use against Glen Beck fans you know who are screaming “ZOMG TEH INFLATION!!!!” The cost of living in the U.S. rose less than forecast in November, indicating higher prices for commodities such as fuel aren’t filtering through into other goods and services. The consumer-price index increased 0.1 percent after a 0.2 percent rise the prior month, the Labor Department said today in Washington. The median estimate of economists in a Bloomberg News survey called for a gain of 0.2 percent. The so-called core measure, which excludes more volatile food and energy costs, also rose 0.1 percent, matching the median forecast. I’m much more worried about 10% unemployment and a massive foreclosure crisis than I am about inflation at this point in time. In fact, I would gladly trade some inflation if it meant people were getting back to work and demand for goods started rising. Ireland’s parliament voted to pass the Permanent Servitude to the Eurocrats Bill €85 billion EU-IMF bailout package today. This bit tickled me: Minister for Finance Brian Lenihan said it mystified him that anybody in the Dáil could oppose the measure. “The suggestion that the Opposition could negotiate a better interest rate from the IMF is, frankly, laughable,” he added. “The rate of interest charged by the IMF is calculated using the standard formula which it applies to all countries.” Another way of putting this is: “The Opposition tells you they could have given you a crap sandwich with wholewheat bread, lettuce and tomatoes. Balderdash! We know the IMF only serves its crap sandwiches on Wonder Bread with no vegetables! There’s only one party that will get you the best deal on crap sandwiches and that’s Fianna Fáil!” And finally, I’d be remiss if I didn’t express happiness at the House voting overwhelmingly to repeal Don’t Ask, Don’t Tell yesterday. Now it goes back to the Senate where it should get done… but this is the Senate… they have been known to pull stuff like this in the past: But, uh, let’s hope the Senate is more competent than the Washington Redskins. Gulp.

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Raw Video: House Passes ‘Don’t Ask’ Repeal

The US House of Representatives voted Wednesday to repeal the ‘don’t ask, don’t tell’ policy that for 17 years has forced gays desiring to serve in the military to conceal their sexual identity. (Dec. 15)

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Rep. Patrick Murphy on Repealing ‘Don’t Ask, Don’t Tell’ Chris Geidner has been following this closely: On a 250-175 vote, and with 15 Republicans supporting the measure, the House of Representatives — in a chamber temprorarily presided over by Rep. Barney Frank (D-Mass.) — passed a stand-alone bill aimed at the repeal of the “Don’t Ask, Don’t Tell” policy on Wednesday, Dec. 15.

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As expected, the Senate passed the much discussed Tax Cut deal with overwhelming support, 81-19. The Senate on Wednesday approved a sweeping tax package negotiated by the White House and congressional Republicans, and House leaders – who were looking to amend the measure in a way that would satisfy liberals without unraveling the deal altogether – said a House vote could follow as soon as Thursday. The Senate’s approval of the bill came after three amendments were decisively rejected. One, sponsored by Sen. Jim DeMint (R-S.C.), would have permanently extended all of the Bush tax cuts. Another, introduced by Sen. Bernard Sanders (I-Vt.), would have excluded the wealthiest 2 percent of Americans from the tax-cut extension…. read on .

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