President Barack Obama

This Week in The 21st Century America Project

Today, as analysts pore over President Obama's budget proposal, Millennial Generation activists are focusing on what his proposal means for students.  According to a write-up by Reuters:

President Barack Obama's proposed budget for the next fiscal year nips and tucks at individual grants for low-income students but the amount budgeted is twice as high as two years ago because the number of students has grown.

One tuck is a decision to end the year-round Pell which allows students to collect two grants in a calendar year if they attend summer school, which is most likely to be felt by for-profit schools, according to one analyst.

The other tuck is the elimination of interest subsidies for loans to graduate students.

The maximum award for a Pell grant remains $5,550, which more than nine million students expected to benefit from as part of the program.

The New York Time's David Leonhardt delves into the Pell provisions, writing:

When the Pell program recently expanded to include grants for summer classes, the additional cost was not supposed to be very large - roughly 1 percent of Pell's annual $30 billion cost in future years. Instead, many more students than expected have signed up for the program and are receiving federal grants for summer classes. In 2013, summer grants are projected to make up $5 billion of the program's total $36 billion budget - or a whopping 14 percent.

In my earlier post, I asked for evidence that the summer grants did not help lift graduation rates. The administration official preferred to ask a different question: What evidence exists that summer grants, which began last year, have lifted graduation rates? Or, as the official put it, "Is the evidence adequate to justify a $5 billion new entitas lement?"

The administration decided that the answer was no and that eliminating the program was the kind of budget cut that the government should be making, given the deficit. One reason to be skeptical that summer grants are making a big difference is that enrollment in summer classes has risen only marginally in the last year.

By contrast, the Republican plan would offer even sharper cuts.  Nick Anderson at The Washington Post writes:

House Republicans would lower the maximum Pell grant to $4,705 and cut other education spending by $4.9 billion, according to their spending proposal for the rest of the fiscal year that ends Sept. 30.

This narrow but important conversation about educational grants brings into focus an even larger and long over-due conversation about unemployment among young Americans.  University of Massachusetts Amherst Economics Professor Nancy Folbre explores this issue on today's New York Times Economix blog.  As she writes,

Neither lofty rhetoric surrounding a new "competitiveness agenda" nor bipartisan invocations of the importance of public investments in human capital can conceal the emerging reality.

Apart from the American Opportunity Tax Credit and modest increases in financial aid, public policy is not doing much to help young people from moderate- and low-income families who can't find a job or afford the education they need to improve their chances of finding one.

When last reported by the Bureau of Labor Statistics in August, unemployment among those aged 16 to 24 was about 19 percent - unchanged from the previous year. Partly as a result, community college enrollments, already on an upward trend, have grown in the last two years. However, state budgets, already groaning under fiscal pressure, have been unable to provide additional support.

As voters - particularly Millennial voters - begin to compare and contrast the budget proposals, this underlying question about investment in the largest generation in American history offers a stark contrast between the two parties. 

Taking Jeb Bush Seriously

Matt Bai has a very good piece in today's NYTimes on Jeb Bush.  Despite the obvious problems with a third Bush running for President, the Democrats should be taking a potential Bush candidacy seriously in 2012. 

Thrree quick observations:

1) He is the strongest potential Republican candidate on the scene today, and could win the GOP nomination.

2) He can win Hispanic votes, and change the electoral map.  Unlike his brother, Jeb is fluent in Spanish, and married to a Mexican immigrant.  If the midwest is weaker for Obama in 2012 due to the economy, VA/NC more difficult, Obama's firewall becomes the heavily Latino Southwest and Florida.   Right now Jeb, who has opposed SB1070, is the only GOPer who could likely break through that Latin firewall and flip the electoral college. 

Bush is from Florida, the GOP's convention is there in 2012, and if he puts a newly electred CA governor Meg Whitman on the ticket, could even put CA into play, forcing the Democrats to spend tens of millions of dollars just to defend.  His strength in Florida alone changes the electoral calculations for 2012, potentially taking the biggest swing state in the Presidential election off the table.

The Bush family has shown great facility at appealing to Hispanic voters in past elections.  Jeb's potential strength in the emerging Latin electoral belt in the Southern and Western US makes him a very formidible candidate.    

3) He is motivated.  The Bush family needs some new and better chapters in their book of national service.  The last few chapters have not been so good. 

My own gut is that if Obama looks vulnerable early next year Jeb will jump in and go for it.  And if he does 2012 is going to be a serious and highly contested campaign.

Broken No More?

There is a new breeze blowing through Washington this week. Yes it has hit 70 degrees outside. Spring is in the air, and it has lightened everyone's step a bit. But the real change is what is happening in the governing party and in the Capitol. The people's business is starting to get done.

It has been a remarkable few weeks here in DC. A payroll tax cut for small businesses to help provide a modest boost to the economy was signed into law, passing the Senate with 11 Republican votes. A serious bipartisan immigration reform plan outline was advanced. The final financial regulatory reform package is taking shape. The President offered up a thoughtful vision on how to improve the nation's education system, and is about to pass a major overall and expansion of the college student loan program. The FCC released a powerful vision for the future of broadband and the internet in the US.  Competitive - and what we all hope were fair - elections were conducted in Iraq. And of course, the big one - modernizing and improving our health care system - is close to passage. 

After a fitful first year, the Democrats are learning, however clumsily, to become the governing party. None of the three Democratic leaders - Obama, Reid, Pelosi - have ever been in their position when the Democratic Party was in such a strong position with the public, or had so much power in Washington. Democrats have more seats in Congress and received a higher vote share in 2008 than in any time since the 1960s. Barack Obama was not yet age ten the last time Democrats were in a similar position in DC, and frankly, the years of conservative ascendancy, which kept the Democrats on the defensive and largely out of power, left an entire generation of politicians more used to challenging the power of others than wielding it themselves. And it has shown over the past 14 months.

This new day for Democrats - huge Congressional majorities, a country tempered by failed conservative policies, a significant Party ID advantage, and a powerful and growing majority coalition - is unlike any time we've seen in Washington in at least 40, if not 70 years. The Democrats have clearly needed time to learn how to be a governing party, to align their interests, manage complex legislation, bring along a lot of new staff, Senators, Members of the House, and a young President into a coherent team. It has been a bumpy process - no big surprise - but there are signs this week that this new 21st century Democratic Party is finding its way, learning how to manage the new circumstances, do what is required to move the nation forward.  It is learning how, after the end of the conservative ascendancy, to become a governing party.

In 2007, Peter Leyden and I wrote an article called The 50 Year Strategy, which argued that the failure of conservative politics and the emergence of a "new politics" of the 21st century offered the chance for the progressive movement to build a new and durable progressive era, and usher in a re-alignment in American politics.  I still believe, deeply, that this opportunity is very much present today. With strong leadership and the courage to tackle the nation's most important problems, it is still very much within the center-left's grasp. And in many ways this question - could the Democrats seize the historic opportunity they had to realign politics, and usher in a new era of reform and progress? - has been, and remains the single most important question in American politics today.  This morning, the chances of the Democrats seizing the moment - and the conservatives continuing to make equally historic political miscalculations - seems ever more possible.

Steven Pearlstein has a nice reflection on all this in the Washington Post this morning.

It may not be morning in America just yet, but today it certainly feels a lot more like spring - a time of hope and of possibility - for Washington and for the 21st century center-left.

Update: See our recent report on the changing coalitions of the two political parties to learn more about the current state of the Democratic Party's emerging majority coalition.

President Obama, Senators Advance Payroll Tax Cut to Spur Job Creation

This week, President Obama and Senators Schumer and Hatch proposed important job creation ideas similar to those advocated by NDN and Dr. Robert Shapiro over the past several months. At the core of these proposals sit payroll tax cuts or tax credits that reduce the employer’s cost of hiring, which NDN has advocated as the most effective way to spur employment in the near-term. 

Dr. Robert Shapiro, Chair of NDN's Globalization Initiative and former Under Secretary of Commerce for Economic Affairs, said this about the White House and Schumer-Hatch proposals:

Reducing the cost to hire at a time when the economy is encountering special problems creating jobs simply makes good economic sense, and reducing the employer's payroll taxes on new hires, when the employer is also expanding its overall workforce, is the most effective way to do it.  The proposals advanced by the White House and Senators Schumer and Hatch do just that. NDN has long promoted versions of this approach, and while there are no silver bullets for unemployment, understanding the dynamics responsible for weak job creation now and throughout the 2002-2007 recovery is a necessary first step to restoring real prosperity. Taking targeted action now by reducing the payroll tax for new hires a vital next step.

NDN congratulates the Obama Administration and Senators Schumer and Hatch for offering this important proposal and will work for the rapid passage of this measure. For Shapiro's advocacy of such an approach, which dates back to October, please see:

  • January 20, 2010, The Path to More Jobs and Growth – "It’s virtually the only proposal that’s actually targeted directly at job creation, and it’s effective because it directly reduces a company’s cost to create new jobs. Its’ projected power to boost GDP follows directly from its success in creating jobs, since the new workers would spend virtually everything they earn, boosting output in the goods and services they choose and the jobs required to provide those goods and services." 
  • December 4, 2009, Video of the White House Forum on Jobs and Economic Growth: Encouraging Business Investment, Competitiveness and Job Creation working group in which Dr. Shapiro discusses this proposal. 
  • December 2, 2009, How to Create Jobs in a Troubled Economy"Exempt from payroll taxes the first $3,000 to $5,000 of wages paid in each of the first two years to new hires by firms that expand their work forces."
  • November 2, 2009, The Storms on the Economy’s Horizon"An even better idea would be to jumpstart new job creation by exempting the first few thousand dollars of wages from payroll taxes."

For more of NDN's work on the economy, please see our backgrounder on "A New Economic Strategy for America."

Immigration Reform: Still In Play

In a new Newsweek piece on immigration Reform, Arian Campo-Flores writes: 

Given that much of last year was squandered on a health-care debate that has yet to produce an agreement, and given that Americans are clamoring for the administration to focus on jobs and the economy, immigration has fallen far down the priority list, for both the president and Congress. "I don't think there's been a diminution in the desire to do it," says Simon Rosenberg of NDN, which has also pressed for an overhaul. "But there's a greater recognition that the pipeline got backed up in 2009." The top two priorities now, he says, are a jobs bill and financial-services reform. "If those get done, and Washington is working better, then I think other things will be possible this year." Even, perhaps, immigration reform, though he says it may well get pushed to 2011.

As the New York Times reports this morning, there is a new legislative pipeline now.  If the White House and Congress can pass jobs and financial services reform bills quickly, then the basket of other issues waiting for consideration - immigration reform, energy/price on carbon, education reform, transportation, a DOHA treaty, even health care now - will get put into play.  A lot now depends on what happens with these two bills now, and for those wanting progress in these other areas a good plan would be to help get these other two bills passed, quickly. 

The President might consider bringing the Senate and House leadership in for an extended set of discussions next week on how best to get the differing approaches to these bills reconciled as soon as possible, and not leave it to the whims of the Committee process alone to help determine their fate.  That is perhaps the greatest lesson from 2009 - more centralized and cooperative management by the governing party is required for the President to get done all that he wants done in the coming years.

For those wanting to reform our badly broken immigration system do not lose heart.  The President and much of Congress want to get it done, and a lot of prep work has been done in 2009 to prepare for the fight when it comes.  For an issue like this timing is going to be key.   The White House and the Senate and House will have to work closely together, in a very coordinated way, to keep the immigration reform debate from spiraling out of control.   Decks will have to be clear, leaders aligned, confidence high.  I'm not sure we are there right now, but I also think that day is not all that far down the road.  We will need to keep the pressure on, keep making our case to more people, show both determination and patience, and as the President has said, never quit.

Zakaria Offers President Obama Some Good Advice

From one of our favorite thinkers:

On health care, energy, taxes, immigration, deficits and everything else, Obama should get away from the politics of legislating and go back to being president. He should put forward the best proposals to help solve America's problems. He may or may not get much support from Republicans, but he will earn political capital and power, which in the long run is the only way to enact a big, transforming agenda. This approach is exactly what Obama campaigned on. He promised that he would reach out to all sections of the country, listen to the best ideas and appeal to the nation as a whole. "I don't see a blue America and a red America, I see only the United States of America," he said. Obama needs to shift course and govern as the president he promised to become. That's change I could believe in.

You can read the rest of his Washington Post essay here.

And if you happened to have caught my 620AM appearance on Fox News this morning, yes, it did seem a little short.  I think once the conservative agreed with me on the GOP's role in running up the deficit they had to pull the plug on the segment.

Going to Be On Fox News Monday at 6:20 AM

Yes it's crazy early but this is an important week to be slugging it out.   Will be on with John O'Hara, author of "A New American Tear Party," talking about the State of the Union and the year ahead.  6:20 AM.  In case you are up, tune in. 

Sotomayor, Hispanics and the Martinez Resignation

Perhaps no figure in the country has been more on the frontlines of the rising anti-Hispanic rhetoric in the Republican Party than Senator Mel Martinez.   His political ascendency was engineered by Bush and Rove as part of their early - and successful - effort to increase Republican market share with Latinos.   He was placed in the Bush Cabinet, and then backed by the Bush machine heavily in both the GOP primary and the Senate general election in Florida in 2004, as a way of helping create a national Republican Hispanic leader and to help Bush in a state they no doubt considered essential - given what happened in 2000 - in their 2004 re-election. 

After the disasterous 2006 elections, the Bush White House made clear what worried them most by their defeat by appointing Senator Martinez the Chair of the RNC.   The Hispanic vote which had gone from 21% in 1996 to 35% in 2000 to 40% in 2004 had - because of the anti Hispanic rhetoric of the immigration debate in 2005-2006 - dropped all the way down to 30% for the GOP in 2006.   Martinez, who was the sharp edge of the Rovian Hispanic spear, was deployed to help reverse what was clearly a dangerous development for the GOP - the profound alientation of the fastest-growing, and perhaps most strategically placed, part of the American electorate. 

When he was picked to be RNC Chair I predicted Senator Martinez would not last, that the national GOP so long so reactionary on matters of race, would simply not accept a bi-lingual Hispanic immigrant as their Chair.  He lasted till the fall of 2007, overseeing among other things the sight of John McCain going from champion of immigration reform and Hispanics to opponent - all in order to appease the unappeasable anti-immigrant fringe of the Republican Party.   To be clear after leading the GOP for less than a year Senator Martinez felt he could no longer do the job and walked away.

Earlier this year Senator Martinez, clearly now an outlier in his own Party, announced that he would not seek re-election for a 2nd term.  And today, just one day after a Supreme Court vote where he witnessed first hand the reactionary attitudes toward race and Hispanics of his own Senate conference, Mel Martinez choose to not just not run for re-election but leave the Senate and his Republican colleagues altogether. 

I've gotten a lot of questions this week about whether the way the Senate Republicans handled the Sotomayor vote would contribute to the deep alientation Hispanics feel towards the GOP.  I offered some initial thoughts in a post which made it to the front page of the Huffington Post for almost a day.  But perhaps they should ask the only minority in the Republican Senate conference, who, today, announced that he was doing what millions of Hispanics had already chosen to do these last few years - flee the national Republican Party.

Senator Martinez's resignation is yet another victory for those Republicans working to repudiate the sensible Bush/Rove strategy towards race and immigration, and yet another clear indicator of how unattractive the modern GOP's reactionary attitude towards race has become even to members of their own party.

Update - Markos has a great quick polling analysis of how far the GOP has fallen with Latinos this year.

An Economic and Political Primer on the Administration's Plan for the Housing Crisis

President Barack Obama today announced a plan to cut foreclosures and reboot new mortgage financings, at least when the economy shows signs of new life. The fact of offering a plan is an advance, given that Bush and his people did nothing and proposed nothing, even as the crisis reached critical mass. As we have written here since the crisis first broke, keeping people in their homes is fundamental to solving the larger economic problem. Again, it’s the fast-rising foreclosures and mortgage delinquencies that are eroding and destroying the value of hundreds of billions of dollars in mortgage-backed securities and the credit default swaps that “back them up” (sic). And it’s the falling value of those securities and swaps, in turn, which has led to the effective bankruptcy of financial institutions that had leveraged themselves to their eyeballs to buy them or issued them and then kept them (and how dumb was that?).

While the act of proposing anything serious puts the Obama Administration ahead of its predecessor, passing such a low threshold is hardly very meaningful -- especially since the problems continue to worsen. More than nine percent of mortgages today are either in foreclosure or delinquent, two to three times the numbers from just two years earlier; and if everything continues to unravel, those numbers could double in another year. If that happens, there won’t be many large, U.S. banks left standing. Many of the homeowners now in trouble could manage, if they just could refinance at current rates. But banks quite naturally see someone in financial trouble as a poor credit risk for a new loan, which is what refinancing is. And the fall in housing prices means tens of millions of those people can’t qualify to refinance. That’s because refinancing is available today only if you owe no more than 80 percent of the original mortgage’s value. The catch for millions of families is that as the value of their home goes down, their existing mortgage (the one being refinanced) accounts for a greater percentage of the value being refinanced. In the worst cases, people just walk away from a $200,000 home with a $300,000 mortgage -- and who would refinance one of those? In millions of other, less extreme cases, the falling prices simply disqualify people for refinancing.

The Administration wants to address this precise part of the problem, by providing $75 billion in subsidies to banks to defray half of the cost of refinancing for several million homeowners at risk of losing their homes. Mortgages owned by Fannie Mae and Freddie Mac are also eligible here, and they’re the ones most likely to actually see their interest rates reset, since the government owns Fannie and Freddie and can direct them to do it. It will be harder to convince bankers already staring at enormous losses already on their books or soon to be there, especially if they’re worried that their bondholders could sue them for resetting loans. The plan also has some $100 billion for the Treasury to keep buying more of Fannie and Freddie’s failing mortgage-backed securities since, as we also have said repeatedly, until foreclosure rates return to normal, the biggest bank bailout in the world won’t prevent more banking losses.

There are more direct ways to address foreclosures. We could provide direct loans to tide over those in trouble, or Fannie and Freddie could reset the loans of everyone in trouble. The problem is that anyone advancing such a common sense approach would become a very large political target -- and not just for reflexively-critical House Republicans.

How could the president or his advisors explain to those who work hard and spend less, so they can keep their mortgage payments up to date, why they don’t qualify for a lower interest rate from the government, when their neighbor who spent more or just had harder luck does qualify? More plainly, how does the government choose who would qualify for such direct help without enraging most of those who wouldn’t? In effect, the Administration plan finesses this problem by letting banks choose, without compelling them to do so. But what if the economy continues to worsen and the plan doesn’t work, which is a very real possibility? Indeed, don’t be surprised to see the Administration revisit it six months from now with a much less “voluntary” approach.

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