Sep/090
Obama For Action Despite Facts:
Obama
Only a week after top scientist make a u-turn on global warming, our president faces major nations of the world to announce what America is doing to combat “man-made climate change”
By JOSH GERSTEIN | 9/22/09 10:28 AM EDT
Read more: http://www.politico.com/news/stories/0909/27430.html#ixzz0RtI5FCcr
President Barack Obama’s closely watched climate change speech at the United Nations got a mixed reaction Tuesday: Some world leaders saluted his rhetoric, but environmental activists expressed disappointment that he didn’t commit to a timeline to pass cap-and-trade legislation in the Senate.
“After too many years of inaction and denial, there is finally widespread recognition of the urgency of the challenge before us. We know what needs to be done,” Obama told fellow heads of state gathered for a climate change summit called by U.N. Secretary-General Ban Ki-moon.
“The House of Representatives passed an energy and climate bill in June that would finally make clean energy the profitable kind of energy for American businesses and dramatically reduce greenhouse gas emissions,” Obama said. “One committee has already acted on this bill in the Senate, and I look forward to engaging with others as we move forward.”
Many diplomats and environmentalists were hoping that Obama would detail his strategy to move House-approved carbon-emissions-trading legislation through the Senate and onto his desk to be signed into law ahead of a key climate change conference this December in Copenhagen. But the president made only a vague pledge to continue pushing for the measure.
“The Obama speech was a missed opportunity,” said Annie Petsonk, international counsel for Environmental Defense Fund. “Leaders want him to lay out a game plan to get a bill through the Senate, to give some timeline, some commitment to do it on a timely basis. … They didn’t get it.”
Environmental activists are particularly concerned that U.S. influence and leadership in the climate issue are dwindling ahead of Copenhagen, with the issue of global warming getting pushed further and further down the presidential agenda by other pressing concerns, such as health care reform, the recession and Afghanistan.
Former Vice President Al Gore gave a warm, but not effusive, reception to Obama’s remarks.
“I thought that he was simply recognizing the reality of the situation that this legislation is still pending,” Gore said at a U.N. press briefing. “I welcome his promise to get personally engaged in the work of the Senate committees.”
Gore said it would be “far better” for the climate change treaty talks set for Copenhagen in December if the U.S. Senate acted by then.
“I would encourage the Senate to take up the climate and energy legislation immediately upon conclusion of the pending health care debate, if not before,” Gore said. “I interpret President Obama’s statement about getting involved in that process to mean that he will urge them to do exactly that.”
Asked about the decision not to set a timeline, White House climate czar Carol Browner said the Senate’s pace was not under Obama’s control. “The Senate is hard at work,” Browner said. “Health care has obviously taken up more time than was originally anticipated. … At the end of the day, [Senate Majority Leader] Harry Reid does set the schedule for the Senate, and we have to be mindful of that.”
Obama said little about the resistance in the Senate but indicated the recent economic slump has left some lawmakers reluctant to impose emissions changes that could affect a weakened economy.
“We seek sweeping but necessary change in the midst of a global recession, where every nation’s most immediate priority is reviving their economy and putting their people back to work. And so all of us will face doubts and difficulties in our own capitals as we try to reach a lasting solution to the climate challenge,” Obama said. “But I’m here today to say that difficulty is no excuse for complacency. Unease is no excuse for inaction.”
The president insisted his administration has taken a series of important, groundbreaking actions to fight global warming, such as increasing fuel economy standards and directing stimulus funds and tax credits to energy efficiency.
“These steps represent an historic recognition on behalf of the American people and their government,” he said. “We understand the gravity of the climate threat. We are determined to act. We will meet our responsibility to future generations.”
Read more: http://www.politico.com/news/stories/0909/27430.html#ixzz0RtICWibT
Sep/090
Taking Over American Education: the final chapter
Congressional Hall
Bill Name Student Aid and Fiscal Responsibility Act of 2009 Bill Category Amendment Extented Title To amend the Higher Education Act of 1965, and for other purposes.
Bill Summary This information is intended to be a nonpartisan summary and may not include all specifics contained in the full text of the bill. Further research may be necessary in order to make an informed decision. This bill does several things. First, this bill increases, by $490, the maximum Pell Grant amount that can be awarded to students. This bill also allocates money to be given in the form of grants to states for programs to promote the completion of post-secondary education, especially for minority groups that are underrepresented in higher education. This bill also states that if a student is called up for active duty in the military, and has taken a loan to pay for that portion of his/her schooling, then that portion of the loan will be repaid for him/her. If a student has more than $150,000 in assets, then that student will not be eligible for Pell grants, loans, or work assistance. Also this bill includes language that would prohibit federal funds from what are called certain indicted organizations, specifically the community organizing group ACORN. Bill Type House Bill Interest Education, House of Representatives, Monetary Sponsor George Miller (D) California Co-Sponsor
09-17-2009 Passed/agreed to in House: On passage Passed by the Yeas and Nays: 253 – 171 (Roll no. 719). 07-27-2009 Reported (Amended) by the Committee on Education and Labor. H. Rept. 111-232. 07-15-2009 Introduced in House
CBO estimates 705 billion in loans, 70% of all loan volume over the next 10 years.
Bill Upends System for College Loans
By COREY BOLES and ROBERT TOMSHO
http://online.wsj.com/article/SB125321217589620383.html
(See Corrections & Amplifications below)
WASHINGTON — House approval of an education-financing bill Thursday marks a first step toward sweeping changes in U.S. higher education that would cut out private lenders and leave the government as sole provider of student loans under federal programs.
The bill, which passed on a largely party-line 253-171 vote, would save taxpayers $87 billion over the next decade by ending fees paid by the government to private lenders, according to the nonpartisan Congressional Budget Office. Among other things, the House bill would use the anticipated savings to increase grants for low-income students and boost funding for minority students.
The cost of student loans wouldn’t change as a result of the overhaul, according to the Obama administration. The only difference would be the source of the loans — the government as opposed to private lenders.
While the measure would eliminate private lenders from originating government-backed loans, banks and other lenders would be allowed to bid for a limited number of contracts to service government-made loans.
Richard Hunt, president of the Consumer Bankers Association, said Congress and the Obama administration should “consider alternative approaches that maintain choice for students and protect local jobs” at banks. Ending private lenders’ ability to originate government-backed loans “is a step in the wrong direction and at the wrong time,” he said.
The House vote follows two years of turmoil in the student-loan industry. In 2007, Congress reduced government payments to lenders making federally guaranteed student loans by more than $20 billion — just as credit markets started to seize up, eventually making it nearly impossible for lenders to package student loans into securities and sell them to investors, a key source of liquidity. Since the fall of 2007, more than 180 lenders have exited from all or part of the federal student-loan program.
This week, Fitch Ratings downgraded student-loan company SLM Corp., better known as Sallie Mae, to BBB-, and called its outlook negative.
For the school year that ended in the spring, companies lent students at 4,465 schools a total of $74 billion, up 13% from $65.3 billion the prior year.
Sep/090
Maxine Waters: Press Should Probe Conservatives For Racist Views
Maxine Waters
The Hill: Rep. Maxine Waters (D-Calif.) said that it’s not enough for African-Americans to levy allegations of racism against the right-leaning protesters, and that the media must look into their views.
“I want those people talked to; I want them interviewed,” Waters told the liberal Bill Press Radio show in a podcast. “I want journalists to be all over those rallies and the marches with the birthers and the teabaggers.”
Sep/090
45% Of Doctors Would Consider Quitting
Doctors Ready to Quit
By TERRY JONES
News Analysis by IBD | Posted Tuesday, September 15, 2009 4:30 PM PT
http://www.ibdeditorials.com/IBDArticles.aspx?id=337909690110379
Two of every three practicing physicians oppose the medical overhaul plan under consideration in Washington, and hundreds of thousands would think about shutting down their practices or retiring early if it were adopted, a new IBD/TIPP Poll has found.
The poll contradicts the claims of not only the White House, but also doctors’ own lobby — the powerful American Medical Association — both of which suggest the medical profession is behind the proposed overhaul.
It also calls into question whether an overhaul is even doable; 72% of the doctors polled disagree with the administration’s claim that the government can cover 47 million more people with better-quality care at lower cost.
The IBD/TIPP Poll was conducted by mail the past two weeks, with 1,376 practicing physicians chosen randomly throughout the country taking part. Responses are still coming in, and doctors’ positions on related topics — including the impact of an overhaul on senior care, medical school applications and drug development — will be covered later in this series.
Major findings included:
• Two-thirds, or 65%, of doctors say they oppose the proposed government expansion plan. This contradicts the administration’s claims that doctors are part of an “unprecedented coalition” supporting a medical overhaul.
It also differs with findings of a poll released Monday by National Public Radio that suggests a “majority of physicians want public and private insurance options,” and clashes with media reports such as Tuesday’s front-page story in the Los Angeles Times with the headline “Doctors Go For Obama’s Reform.”
Nowhere in the Times story does it say doctors as a whole back the overhaul. It says only that the AMA — the “association representing the nation’s physicians” and what “many still regard as the country’s premier lobbying force” — is “lobbying and advertising to win public support for President Obama’s sweeping plan.”
The AMA, in fact, represents approximately 18% of physicians and has been hit with a number of defections by members opposed to the AMA’s support of Democrats’ proposed health care overhaul.
• Four of nine doctors, or 45%, said they “would consider leaving their practice or taking an early retirement” if Congress passes the plan the Democratic majority and White House have in mind.
More than 800,000 doctors were practicing in 2006, the government says. Projecting the poll’s finding onto that population, 360,000 doctors would consider quitting.
• More than seven in 10 doctors, or 71% — the most lopsided response in the poll — answered “no” when asked if they believed “the government can cover 47 million more people and that it will cost less money and the quality of care will be better.”
This response is consistent with critics who complain that the administration and congressional Democrats have yet to explain how, even with the current number of physicians and nurses, they can cover more people and lower the cost at the same time.
The only way, the critics contend, is by rationing care — giving it to some and denying it to others. That cuts against another claim by plan supporters — that care would be better.
IBD/TIPP’s finding that many doctors could leave the business suggests that such rationing could be more severe than even critics believe. Rationing is one of the drawbacks associated with government plans in countries such as Canada and the U.K. Stories about growing waiting lists for badly needed care, horror stories of care gone wrong, babies born on sidewalks, and even people dying as a result of care delayed or denied are rife.
In this country, the number of doctors is already lagging population growth.
From 2003 to 2006, the number of active physicians in the U.S. grew by just 0.8% a year, adding a total of 25,700 doctors.
Recent population growth has been 1% a year. Patients, in short, are already being added faster than physicians, creating a medical bottleneck.
The great concern is that, with increased mandates, lower pay and less freedom to practice, doctors could abandon medicine in droves, as the IBD/TIPP Poll suggests. Under the proposed medical overhaul, an additional 47 million people would have to be cared for — an 18% increase in patient loads, without an equivalent increase in doctors. The actual effect could be somewhat less because a significant share of the uninsured already get care.
Even so, the government vows to cut hundreds of billions of dollars from health care spending to pay for reform, which would encourage a flight from the profession.
The U.S. today has just 2.4 physicians per 1,000 population — below the median of 3.1 for members of the Organization for Economic Cooperation and Development, the official club of wealthy nations.
Adding millions of patients to physicians’ caseloads would threaten to overwhelm the system. Medical gatekeepers would have to deny care to large numbers of people. That means care would have to be rationed.
“It’s like giving everyone free bus passes, but there are only two buses,” Dr. Ted Epperly, president of the American Academy of Family Physicians, told the Associated Press.
Hope for a surge in new doctors may be misplaced. A recent study from the Association of American Medical Colleges found steadily declining enrollment in medical schools since 1980.
The study found that, just with current patient demand, the U.S. will have 159,000 fewer doctors than it needs by 2025. Unless corrected, that would make some sort of medical rationing or long waiting lists almost mandatory.
Experiments at the state level show that an overhaul isn’t likely to change much.
On Monday came word from the Massachusetts Medical Society — a group representing physicians in a state that has implemented an overhaul similar to that under consideration in Washington — that doctor shortages remain a growing problem.
Its 2009 Physician Workforce Study found that:
• The primary care specialties of family medicine and internal medicine are in short supply for a fourth straight year.
• The percentage of primary care practices closed to new patients is the highest ever recorded.
• Seven of 18 specialties — dermatology, neurology, urology, vascular surgery and (for the first time) obstetrics-gynecology, in addition to family and internal medicine — are in short supply.
• Recruitment and retention of physicians remains difficult, especially at community hospitals and with primary care.
A key reason for the doctor shortages, according to the study, is a “lingering poor practice environment in the state.”
In 2006, Massachusetts passed its medical overhaul — minus a public option — similar to what’s being proposed on a national scale now. It hasn’t worked as expected. Costs are higher, with insurance premiums rising 22% faster than in the U.S. as a whole.
“Health spending in Massachusetts is higher than the United States on average and is growing at a faster rate,” according to a recent report from the Urban Institute.
Other states with government-run or mandated health insurance systems, including Maine, Tennessee and Hawaii, have been forced to cut back services and coverage.
This experience has been repeated in other countries where a form of nationalized care is common. In particular, many nationalized health systems seem to have trouble finding enough doctors to meet demand.
In Britain, a lack of practicing physicians means the country has had to import thousands of foreign doctors to care for patients in the National Health Service.
“A third of (British) primary care trusts are flying in (general practitioners) from as far away as Lithuania, Poland, Germany, Hungary, Italy and Switzerland” because of a doctor shortage, a recent story in the British Daily Mail noted.
British doctors, demoralized by long hours and burdensome rules, simply refuse to see patients at nights and weekends.
Likewise, Canadian physicians who have to deal with the stringent rules and income limits imposed by that country’s national health plan have emigrated in droves to other countries, including the U.S.
Sep/090
Is Health Care Reform Constitutional?
We The People
By INVESTOR’S BUSINESS DAILY | Posted Wednesday, September 16, 2009 4:20 PM PT
http://www.ibdeditorials.com/IBDArticles.aspx?id=337992265461227
Federal Powers: Where in the U.S. Constitution does it say the government can force people to buy health insurance? And by what authority does it prohibit the purchasing of insurance across state lines?
A key part of the administration’s plan to reform health care is what is called the “individual mandate” — a requirement that everyone must have health insurance either through his or her employer or purchased individually.
A good chunk of the uninsured are that way of their own volition. They are young and healthy and feel they have better things to do with their money at this point in their lives. Forcing them is the only way to get them covered, but it’s not clear where the constitutional authority to do that comes from.
The Constitution specifically enumerates the powers given to each branch of government and says that any powers not mentioned revert to the states and to the people. Nowhere does it say that the feds can compel you to buy health insurance. But then, this is the administration that claims the right to a de facto nationalization of the banking system and auto industry, to set executive compensation and to fire corporate officers.
With regard to health care reform, the administration seems to be operating under a distorted version of the Commerce Clause that has been grossly misinterpreted over the years as allowing the feds to regulate and control just about everything. Because the sum total of millions of individual health decisions has a collective economic impact, the reasoning goes, government has the authority, even the duty, to regulate those decisions. It does not.
Former New Jersey Superior Court Judge Andrew Napolitano, a constitutional scholar now a Fox News analyst, says the power to “regulate” interstate commerce is just that and only that. He says that when James Madison used the word “regulate,” he meant “to keep regular.” Madison intended the government to function like a modern-day referee in football — to throw a flag once in a while and moderate disputes, but not call the plays.
The irony here, says Napolitano, is that at the same time the government wants to force people to buy insurance, it forbids them from doing so across state lines. In other words, he says, “Congress refuses to keep commerce regular when the commercial activity is the sale of insurance, but claims it can regulate the removal of a person’s appendix because that constitutes interstate commerce.”
David B. Rivkin Jr. and Lee A. Casey, who served in the Justice Department under both Presidents Ronald Reagan and George H. W. Bush, wrote in the Washington Post that in United States vs. Lopez in 1995, the U.S. Supreme Court ruled that Congress can only regulate human activity that is truly commercial at its core. One does not go to a doctor to engage in commercial activity.
The Commerce Clause allows for the regulation of economic activity across state lines that involves the production, distribution or consumption of commodities. The Supreme Court has specifically rejected the idea that Congress can regulate noneconomic activities simply because through a chain of collective events they might have some impact down the road.
The government does not have the power to regulate individual Americans simply because they are there and you think their individual decisions are unwise. There are other concerns, such as whether the mass collection of medical records violates the Fourth Amendment’s right of people “to be secure in their persons, houses, papers and effects.”
The states are starting to rebel. In July, Texas Gov. Rick Perry indicated that he might join those invoking the 10th Amendment to fight a federal takeover of health care. “I think you’ll hear states and and governors standing up and saying ‘no’ to this type of encroachment on the states with their health care,” Perry said.
If passed into law, the House’s health care reform plan will be tested. We hope the Supreme Court will once again find that H.R. 3200, and any bill like it that imposes similar mandates, violates the Constitution.
Sep/091
Santorum may challenge ‘injurious’ Obama
Rick Santorum
September 15, 2009
By Ben Smith 12:59 PM
http://www.politico.com/blogs/bensmith/0909/Santorum_may_challenge_injurious_Obama.html
Rick Santorum affirmed on an RNC conference call — aimed at attacking Arlen Specter — that he’s considering a run for president in 2012 — because, he said, the Obama presidency is “injurious to America.”
“The dynamic has changed,” Santorum said. “A lot of folks who might not have thought about running against an incumbent president” are now considering it.
He cited Obama’s lower poll numbers and his failure to “transform” and unify the country.
“A lot of people are going to take a look and see wht they can do to try to confront this presidency, which many of us — as you’re seeing from the tea parties and the like — which many of us believe is injurious to America,” Santorum said, saying the 2012 race is “something that I think I would consider.”
Santorum also elaborated on his opposition to the use of reconciliation to pass health care legislation; the parliamentary procedure was used, with his support, in the Bush years to pass the controversial 2003 tax cuts and a range of other measures, including opening the Arctic National Wildlife Refuge to oil drilling.
Santorum called ANWR drilling “fairly minor” in its impact on the land and on the economy
“You’re talking about drilling holes, as opposed to rejiggering and reconstructing the entire health care system of this country,” the former Pennsylvania senator said.
“A tax bill is by definition a revenue bill – it affects the budget. That’s what reconciliation is for,” he said.
“This is a major policy initiative in an area that goes beyond the federal government’s balance sheets — that to me makes it an abomination.”
He warned that the procedure would turn the bill into a “Rube Goldberg machine.”
UPDATE: A Democrat notes that Santorum didn’t always consider ANWR a minor matter of a few holes: “I believe that ANWR has the potential to play a significant role in reducing our dependence on foreign oil, and I support exploring this area in a safe and environmentally sound way,” he wrote in 2006.
Sep/091
No We Can’t? UK Think Tank Says US Power Is Fading
IISS.org
UK think tank: Barack Obama may have to say ‘no we can’t’ as American power fades
By RAPHAEL G. SATTER Associated Press Writer
LONDON September 15, 2009 (AP)
http://abcnews.go.com/International/WireStory?id=8577176&page=1
A weakened United States could start retreating from the world stage without help from its allies abroad, an international strategic affairs think tank said Tuesday.
The respected London-based International Institute for Strategic Studies said President Barack Obama will increasingly have to turn to others for help dealing with the world’s problems — in part because he has no alternative.
“Domestically Obama may have campaigned on the theme ‘yes we can’; internationally he may increasingly have to argue ‘no we can’t',” the institute said in its annual review of world affairs.
The report said the U.S. struggles against insurgent groups in Iraq and Afghanistan had exposed the limits of the country’s military muscle, while the near-collapse of the world financial markets sapped the economic base on which that muscle relied.
The report also claimed that the U.S. had lost traction in its efforts to contain Iran’s nuclear program and bring peace to the Middle East.
“Clearly the U.S. share of ‘global power,’ however measured, is in decline,” the report said.
The head of another respected London think tank, Robin Niblett of Chatham House, said the rise in the relative power of China, India, Russia and the European Union has made it harder for the U.S. to exercise its influence.
“America should apply changes in leadership style, but I wouldn’t overplay the decline because decline is relative,” said Niblett — who was not involved in drawing up Tuesday’s report. “One should not doubt that the U.S. remains the most powerful nation in the world, but it’s difficult to use the power and to use it to influence others.”
In addition to a rise in regional powers, Niblett said the U.S. has long been viewed as being part of the problem rather than the solution on many issues — including climate change, the financial crisis, and the failure of the Middle East peace process.
It’s also carrying the baggage of failed policies and of a failed financial approach,” Niblett said, referring to the Bush administration. “There’s a lot of catching up to be done.”
The IISS report praised Obama, saying that he recognized there was only so much America could do “to impose its views on others.”
After years of often thorny relationships between the U.S. and its allies during Bush’s administration, Obama has talked of the need to work with other nations on such issues as the financial meltdown, climate change and nuclear proliferation.
“These are challenges that no single nation, no matter how powerful, can confront alone,” Obama said in April after attending the G-20 summit in London.
“The United States must lead the way,” he said. “But our best chance to solve these unprecedented problems comes from acting in concert with other nations.”
The think tank’s report said Obama could help restore the United States’ standing by working with other nations to contain emerging threats to its position as the world’s pre-eminent power. Controlling the nuclear ambitions of Iran and North Korea would require help from regional allies, the report said. The same was true of Afghanistan, where the U.S. has had difficulty persuading its NATO partners to follow its lead in boosting the number of troops sent to fight a resurgent Taliban.
“In the next year or two, the greatest demand on U.S. talents and power will be to persuade more to become like minded and adopt greater burdens,” the report said.
Niblett said Obama was moving in the right direction.
“This administration is far more frank about the U.S. interdependence with rest of the world, and that’s a good thing,” Niblett said.
Sep/091
No, Mr. President
Obama on 60 Minutes
SUNDAY, SEPTEMBER 13, 2009
Posted by William Kristol
http://www.weeklystandard.com/Weblogs/TWSFP/TWSFPView.asp#13172
In his 60 Minutes interview to be aired tonight, President Obama apparently says, “I intend to be president for a while and once this bill passes, I own it….I’m the one who’s going to be held responsible. So I have every incentive to get this right.”
No, Mr. President. It’s not about you. If legislation passes, you don’t own it.
We all own it. Any health care bill will become part of the U.S. Code, not simply an item on the Obama White House web site. We will all feel its effects. We are all responsible for the future of our country. Here the people rule.
Which is why it is wrong to jam through a 1,000+ page legislative act in such a rush that its defenders can’t even give a coherent account of what it will and won’t do, and in order to deal with a situation that the president himself acknowledged Wednesday night is not a crisis (“But we did not come here just to clean up crises. We came to build a future. So tonight, I return to speak to all of you about an issue that is central to that future — and that is the issue of health care.”).
The national debate on health care has just begun. Much of the popular anger of this past summer came from a feeling — a justified one — that if Obama has his way, we, the people, won’t have an opportunity to debate this issue as it deserves. The August recess seemed to be citizens’ one chance to force a reconsideration by their elected representatives before Obama succeeded in rushing the Congress to judgment.
This is a moment of truth for the two political parties.
Will enough Congressional Democrats refuse to be herded like sheep and stampeded like cattle? Will they do what is right, and insist, for the sake of the political health of the country, on an open and measured and deliberative process?
And if there are not enough such Democrats — if the Democratic party simply yields to Barack Obama and his assurance that, hey, he has every incentive to get it right, so everyone else should just get out of the way — if the Democratic Congress jams this legislation down the people’s throat — then the Republican party will have to say: We do not yield. We do not acquiesce. And we will take this issue to the country in 2010 and 2012, with the purpose of repealing this dangerous and damaging legislation.
Sep/091
U.S. poverty rate hits 11-year high
War on Poverty
WASHINGTON (Reuters) – The U.S. poverty rate hit its highest level in 11 years in 2008 as the worst recession since the Great Depression threw millions of Americans out of work, a government report showed on Thursday.
The Census Bureau said the poverty rate — the percentage of people living in poverty — jumped to 13.2 percent, the highest level since 1997, from 12.5 percent in 2007.
About 39.8 million Americans were living in poverty, up from 37.3 million in 2007.
Despite signs the economy was showing signs of crawling out the slump that started in December 2007, the poverty rate would rise gain this year and beyond 2010 as unemployment would stay elevated for a while, analysts and the government warned.
“Unfortunately, even with an improving economy, the higher unemployment rates during 2009 will almost surely lead to further declines in income and further increases in poverty,” Rebecca Blank, Undersecretary for Economic Affairs at the Commerce Department told Senate’s Joint Economic Committee.
The government defines poverty as an annual income of $22,025 for a family of four, $17,163 for a family of three and $14,051 for a family of two.
With unemployment rising, real median household income fell 3.6 percent to $50,303 in 2008, a 10-year low. The percentage decline was the biggest annual drop since 1991 and snapped a three year streak of annual income increases.
The longest and deepest recession in 70 years has been marked by escalating unemployment as companies aggressively cut payrolls to cope with slumping demand. The unemployment rate was at 7.2 percent at the end of last year.
As of August, the unemployment rate was at 9.7 percent, the highest in 26 years, and is expected to peak just above 10 percent early next year. Almost 7 million people had lost their jobs since the start of the recession.
POVERTY WILL STAY HIGH
“The poverty rate will not fall back to the 2007 rate until the economy expands enough that the unemployment rate falls back below 5 percent. This is not likely to happen for several years,” said Sheldon Danziger, a Russell Sage Foundation fellow and professor at the University of Michigan.
“Government policies must stay focused on helping those among the poor and near-poor who have been left behind by economic growth in recent years.”
The Census Bureau also said 46.3 million Americans were without health insurance last year compared to 45.7 million in 2007. The numbers could feature in arguments over President Barack Obama’s plans to overhaul the U.S. healthcare system and dramatically expand medical insurance coverage.
The family poverty rate rose to 10.3 percent last year and 8.1 million families were classified as poor, the Bureau said, compared to 9.8 percent and 7.6 million respectively in 2007.
Analysts said rising poverty underscored the need for the government to strengthen its safety net, which many argue is inadequate.
“Unemployment insurance will need to be extended beyond the provisions in this year’s recovery legislation,” said Harry Holzer, professor of public policy at Georgetown University in Washington.
“For low-income and part-time workers ineligible for unemployment insurance, other forms of cash assistance and perhaps community service jobs will need to be provided,” said Henry Holzer, a professor of public policy at Georgetown University in Washington.
Poverty was higher among blacks and Hispanics, the report showed. About 14.1 million children under the age of 18 lived in poverty last year, up from 13.3 million in 2007.
“We project that with the continuing deterioration in the labor market, by 2009 a quarter of all children in this country will be living in poverty,” said Heidi Shierholz, a labor market economist at the Economic Policy Institute in Washington.
(Reporting by Lucia Mutikani; editing by Andre Grenon)
Sep/091
Summers: Unemployment Will Remain ‘Unacceptably High’ for Years
Obama UnEmployment
September 11, 2009 6:30 PM
In preparation for President Obama’s speech on regulatory reform on Monday — the one-year anniversary of the collapse of Lehman Bros. — Dr. Larry Summers, the chair of President Obama’s National Economic Council, today briefed reporters on the state of the economy and the administration’s policies.
“As the president has said and (Treasury Secretary) Tim Geithner and I have said many times, these problems were not made in a week or a month or a year; they will not be fixed in a week or a month or a year,” Summers said. “The level of unemployment is unacceptably high and will on all forecasts remain unacceptably high for a number of, for a number of years.”
Summers said that while there has been substantial normalization in the economy, financial conditions in commercial real estate continue to struggle, and “the availability of capital to small businesses remain very tight and credit is in short supply.”
In news that the financial markets will no doubt find interesting, Summers said that the Obama administration officials have no interest in “prematurely withdrawing public support for credit flow” — tax dollars to encourage financial institution loans to citizens and businesses. The former Treasury Secretary for President Bill Clinton argued withdrawing support too quickly would repeat mistakes made by Japan during its fabled “Lost Decade” and the U.S. in 1937 and 1938.
There remains much work to be done, Summers said.
“Any institution too large and interconnected” to break down without causing serious economic hardship to the nation needs to be regulated, he said, adding that the same is true with any market too larger and interconnected to fail, such as derivatives.
“We will not be failsafe until it’s safe for failure,” he said.
Summers argued that it makes no sense for financial sectors to be able to pick which government agency regulates them.
“Stability is not attainable if institutions can choose their regulators,” he said, explaining that the president continues to believe what President Obama outlined in June, that it makes sense for the Federal Reserve to supervise all large, inter-connected financial firms that could pose a systemic risk to the overall system, institutions that would be subject to stricter capital requirements.
Has Wall Street learned its lesson?
Paraphrasing former President Reagan, Summers said his motto is “trust but verify – and regulate.”
He said one of the reasons greater regulation is needed is because the “imprudent put enormous pressure on the prudent” — that bad actors in the financial sector are able to generate wealth by behaving inappropriately which cause “pressure that makes it impossible for the prudent to function properly.”
But some analysts have criticized the administration’s reform proposals as weak and watered down.
“The proposals that they’re considering are very weak,” Simon Johnson, a professor at MIT and senior fellow at the Peterson Institute, told ABC News’ Matt Jaffe earlier today. “There’s nothing in the administration’s proposed legislation before Congress to which the industry objects except for the consumer protection agency.”
“The reform process to fix the underlying problems has only just begun,” Peterson said. “It’s not an impossible task. It will take a long time and a lot of effort, but this administration is not focused on that. Hopefully they’ll change their mind soon and we can really get down to business, but in this political cycle it’s not happening.”
The administration’s financial regulatory reform proposals have also taken a back seat to healthcare reform, causing even more doubts about the administration’s – and the Hill’s – drive to change to system.
Summers said that rumors that the administration was seeking to “interfere with Main Street retailers” are untrue. “That argument is to the financial debate what ‘death panels’ is to the debate over health insurance.”
Summers said that the Obama administration was doing everything it could to revitalize the economy, and was doing it well.
“We have moved back from the brink of financial catastrophe,” he said. He argued that never before in history has “as profound an economic crisis been addressed so forcefully and so quickly.”
But the administration would keep working hard, he said “as long as the unemployment rate is in the 9’s” with millions of foreclosures and tens of millions of people with negative equity in their homes.
The President is not just interested in responding to crises, Summers said, but trying to build a more stable foundation, which includes investments in education, energy. This new foundation includes the regulatory reforms the president will discuss on Monday; this last year was “not the first time,” he said that financial crises disrupted millions of American lives, he said, mentioning the 1987 Wall Street crash, the Savings and Loan scandal, the bursting of the internet bubble, and others.
Earlier today, White House press secretary Robert Gibbs previewed the president’s speech, which will be delivered shortly after noon in Federal Hall.
Gibbs said that the speech will not introduce new policies.
“We’ve outlined a financial plan and are working with Congress to implement it,” he said. “I think we want to demonstrate again why it’s so important, why we need to move forward and why we can’t wait.”
President Obama has forced on ensuring “that we get our stability right, that businesses have access to stable capital and credit they need. And we’ve seen great progress on that, pulling financial insecurity back from the brink of another recession. The speech on Monday will focus on the need to take the next series of steps on financial regulatory reform to insure that what happened a year ago – there are significant safeguards.”
– jpt