Upon its 100th anniversary this week, the NAACP under the leadership of Benjamin Todd Jealous, set aside euphoria over the historic inauguration of the first Black president and challenged the Obama administration on where he stands on human and civil rights issues as they pertain to people of color.
''We’re not simply interested in a bail out for Main Street, it’s a good goal. It’s a good starting point. But, we want a fix for back street,'' says Jealous in a telephone press conference leading up to Feb. 12, the 100th birthday of the nation’s oldest civil rights organization. ''At the end of the day, we are not an organization who’s here merely to celebrate any milestone too much. On Jan. 20, we celebrated Obama as the nation’s first Black president and first president of color. On Jan. 21, we were well aware that he simply became the 44th president of the United States and all pressures that have worked the agenda of the presidents before him came to bear on him.”
He continues, “So, now, we’re out there with everybody else trying to make sure that his agenda is our agenda, that his agenda is one of civil rights and inclusion and opportunity for all. And right now there are two things that we’re concerned are not getting sufficient attention.”
The first issue that he listed was the need for federal enforcement of Black participation in jobs and contracts coming out of the $827 billion economic stimulus act, that has passed the House and is being negotiated in the U. S. Senate this week.
“White unemployment [stats], since they’ve been calculated since 1940, have never gotten into double digits. Yet somehow this country finds it tolerable and somewhat normal to have Black unemployment in the double digits,” Jealous says.
The second issue is the need for law enforcement accountability - federal oversight and enforcement of police profiling and misconduct, which former President Bush promised, but never delivered in 2001.
“We’re lifting this up and placing it squarely in front of the administration and we’ll be pushing harder now now that we know who the attorney general is,” Jealous says, referring to Eric Holder, also Black. “We have a decade of repressed aspirations since 1999 when candidate Bush promised to end racial profiling and driving while Black and it hasn’t happened yet. But, we also need to see the Law Enforcement Trust and Integrity Act passed. We also need to see real reforms in police officer use of force and training.”
Referring to protests in the wake of the in-the-back police shooting of a restrained unarmed man in an Oakland subway, Jealous said, “We’ve had a riot in Oakland in the winter. We’ve had a riot in an American city in the winter because of the BART (Bay Area Rapid Transit) police killing.” Jealous said the NAACP has local affiliates dealing with high profile police killings in at least a half dozen states.
Jealous said he would release specific policy proposals in a “White Paper” on Wednesday this week, the day before the 100th Anniversary celebration of the organization founded in 1909. A White Paper is an authoritative report or guide that outlines problems and suggests ways to solve them from expert perspective.
Jealous said proposals in the White Paper would include:
• That the Department of Labor beef up staffing in their solicitors office that handle discrimination. Also that they beef up staffing in the Office of Federal Contract Compliance Programs so that as the stimulus dollars flow through, there won’t be the same tattered infrastructure left by the Bush administration “and we won’t see a repeat of the sloppiness that we saw in Iraq and that we saw in New Orleans.”
• That the Justice Department’s Civil Rights Division be rebuilt to enforce a wide spectrum of civil rights laws.
• That every stimulus-created job that is awarded to a general contractor or to sub-contractors be contracted through the federal employment service so that federal authorities will monitor who gets the jobs. “We need to send a clear message that tax payer dollars should create jobs for everybody. We don’t want people discriminated against based on age, gender, race or anything else,” Jealous said.
• Greater oversight for banks, brokers and a major investment in public education “because we’re tired of Black people with good credit and assets being fleeced. We want them protected.”
The White paper will included the NAACP’s Agenda pertaining to the Obama Administration for the first year. He said the Goals of the NAACP for the next 25 years of the 21st century will be released at its its 100th Annual Convention in July in New York.
Issuing the White Paper to the Obama Administration is only one major action taken by the civil rights organization amidst the economic havoc in the Black community.
The organization is moving ahead with a federal lawsuit to force 15 major financial institutions to cease alleged racial discrimination and rogue sub-prime home mortgage lending.
A federal Judge last month denied a joint motion filed by the institutions to stop the NAACP from moving ahead with the suit. The lenders are now required to release information and documents regarding their mortgage policies and practices, according to an NAACP news release.
The Mortgage lenders named in the lawsuit include: Accredited Home Lenders, Inc.; Ameriquest Mortgage Co.; Bear Sterns Residential Mortgage Corp.; Encore Credit; Chase Bank USA; Citimortgage; First Franklin Financial Corp.; First Tennessee Bank; First Horizon National Corp.; Fremont Investment & Loan; GMAC Mortgage Group, LLC; GMAC ResCap; J.P. Morgan Chase & Co.; Long Beach Mortgage; Option One Mortgage Corp.; SunTrust Mortgage; and WMC Mortgage, LLC.
Jealous speaks with the confidence of the past 100 years of successes by the NAACP, which led and won campaigns for voting rights, against lynching, Jim Crow, and campaigns to equalize the political playing field.
The NAACP Headquarters, based in Baltimore, has 1,700 units nationwide and will host celebrations and observances throughout the year ending on February 12, 2010.
At the organization’s star-studded Image Awards to be broadcasted from Los Angeles on Feb. 12, will be Nobel Peace Prize Laureates Dr. Wangari Muta Maathai and Former Vice President Al Gore. Also, Halle Berry, Tyler Perry, Sean Didd Combs, Jennifer Hudson, Beyonce, Russell Simmons ad the legendary Stevie Wonder and Muhammad Ali.
“As we set out at this moment, we have a lot to celebrate,” Jealous said. “What makes this organization different than virtually every other great organization in this country is that we’ve practiced one formula for a hundred years with great success and transformed this country again and again, not just for Black people or Brown people, but for all people.”
Thursday, February 12, 2009
Firings End in Tragedy for California Family
When Ervin Lupoe shot and killed his wife and five children, and then himself in their Wilmington, Calif. home, the deaths were another example of the human cost of joblessness and an economic crisis that has many people panicked over how they will survive these troubling times.
In the suicide note he left behind, Mr. Lupoe said that the Jan. 27 deaths were his wife Ana’s idea after both were fired from Kaiser Permanente Medical Center about two days earlier for falsifying records in order to receive affordable childcare. A Los Angeles Police investigator reported there was no crime scene indication that the wife had anything to do with the murders of their children—Brittney (8), twin daughters Jaszmin and Jassely (5) and twin boys, Benjamin and Christian (2).
Mr. Lupoe’s suicide note said he had been discriminated against and had to file a grievance with his union to get the position he lost, which was a Special Procedural Technician, and that an unnamed administrator told him at work one day, “You should not even had bothered to come to work today. You should have blown your brains out.”
“So after a horrendous ordeal my wife felt it better to end our lives and why leave our children in someone’s else’s hands. In addition, it seems Kiaser Permanente want’s us to kill ourselves and take our family with us. They did nothing to the manager who stated such, and did not attempt to assist us in the matter, knowing we have no job and 5 children under 8 years with no place to go. So here we are,” Mr. Lupoe wrote.
His letter alleged additional problems: His administrator told the couple that they would not be eligible for unemployment but his wife applied anyway. The couple also sought copies of their licenses from Kaiser to look for other work and were referred to their union representative, who directed them to human resources, to no avail.
Anthony Krump, a Kaiser spokesperson, told The Final Call that the company is confident no one told Mr. Lupoe to take his life and the lives of his family. He did not say whether other disciplinary measures were at Kaiser’s disposal, besides firing both workers and parents. In an interview, he told The Final Call, “The co-workers, employees, and physicians, are experiencing a great deal of loss and grief as well … they (the Lupoes) were well known and well liked,” Mr. Krump said.
On the day of the Lupoe shootings, Mayor Antonio Villaraigosa released a five-page press release, which listed mental health, foreclosure and employment counseling and resources.
“The economic uncertainty is driving workers to the brink, but that should not lead people to resort to extreme measures. Help is available. Resources exist … If you need assistance know that we are ready with open arms and open hearts to guide you through this tough stretch and ensure that everyone emerges from this crisis with their livelihoods—and lives—intact,” Mayor Villaraigosa said.
Some say information about resources should be better publicized and more outreach is needed to get the information to vulnerable communities, and especially people who do not e-mail, fax or use the internet.
“What about them?” asked a Bay area-based community resource professional, who requested anonymity. Even with such service lists, he feels some people don’t get needed help because of how they are talked to, treated or herded in government job and welfare agencies when they finally take that giant step.
“You’ve got to look at this from all the different angles, for example, no matter what resources are available, this man also had some mental health issues. If my whole life is all about work and employment, and then all of a sudden that rug is pulled from under me, and then I’m being asked to go to the Employment Development Office and engage in things that I have no experience about, am not used to and don’t understand, that can be overwhelming,” the counselor said.
Another question is what made Mr. Lupoe go from zero to a final option, said the counselor, who has worked with people needing jobs and with youth. “It’s easy to say there’s a history of vindictiveness or that he could be evil, but if this was a good man, a family man and he fell on hard times, then in his mind, and I’m not excusing it, this was his only option.”
Diana Bonta, vice president of public affairs Kaiser Permanente, stated in a Jan. 28 release that the Lupoes were terminated with good cause and that throughout the process they were treated with dignity and respect.
Dr. Earl Ofari Hutchinson, author and syndicated columnist, said the entire ordeal raises the question of how Kaiser handles personnel employee-management relations. “Is there due process procedures, a grievance process and that’s important because this is not the first complaint that my organization (the Los Angeles Urban Policy Roundtable) has received about the treatment of Black employees at Kaiser,” he said. Some of those complaints involved discrimination and retaliation, he said, and that leads him to believe that there was a flaw and breakdown in Kaiser’s system.
“Two weeks before the Lupoes’ incident, there was a murder-suicide in Inglewood where a young man killed himself and his son and in Baldwin Hills, a man set his house on fire, killing himself and his daughter but his wife escaped. Given the severe economic crisis we’re in, where many more people are obviously facing financial hardship, that also means that psychologically, mentally and emotionally, people are distressed and that may cause more acts of violence,” Dr. Hutchinson told reporters.
In the suicide note he left behind, Mr. Lupoe said that the Jan. 27 deaths were his wife Ana’s idea after both were fired from Kaiser Permanente Medical Center about two days earlier for falsifying records in order to receive affordable childcare. A Los Angeles Police investigator reported there was no crime scene indication that the wife had anything to do with the murders of their children—Brittney (8), twin daughters Jaszmin and Jassely (5) and twin boys, Benjamin and Christian (2).
Mr. Lupoe’s suicide note said he had been discriminated against and had to file a grievance with his union to get the position he lost, which was a Special Procedural Technician, and that an unnamed administrator told him at work one day, “You should not even had bothered to come to work today. You should have blown your brains out.”
“So after a horrendous ordeal my wife felt it better to end our lives and why leave our children in someone’s else’s hands. In addition, it seems Kiaser Permanente want’s us to kill ourselves and take our family with us. They did nothing to the manager who stated such, and did not attempt to assist us in the matter, knowing we have no job and 5 children under 8 years with no place to go. So here we are,” Mr. Lupoe wrote.
His letter alleged additional problems: His administrator told the couple that they would not be eligible for unemployment but his wife applied anyway. The couple also sought copies of their licenses from Kaiser to look for other work and were referred to their union representative, who directed them to human resources, to no avail.
Anthony Krump, a Kaiser spokesperson, told The Final Call that the company is confident no one told Mr. Lupoe to take his life and the lives of his family. He did not say whether other disciplinary measures were at Kaiser’s disposal, besides firing both workers and parents. In an interview, he told The Final Call, “The co-workers, employees, and physicians, are experiencing a great deal of loss and grief as well … they (the Lupoes) were well known and well liked,” Mr. Krump said.
On the day of the Lupoe shootings, Mayor Antonio Villaraigosa released a five-page press release, which listed mental health, foreclosure and employment counseling and resources.
“The economic uncertainty is driving workers to the brink, but that should not lead people to resort to extreme measures. Help is available. Resources exist … If you need assistance know that we are ready with open arms and open hearts to guide you through this tough stretch and ensure that everyone emerges from this crisis with their livelihoods—and lives—intact,” Mayor Villaraigosa said.
Some say information about resources should be better publicized and more outreach is needed to get the information to vulnerable communities, and especially people who do not e-mail, fax or use the internet.
“What about them?” asked a Bay area-based community resource professional, who requested anonymity. Even with such service lists, he feels some people don’t get needed help because of how they are talked to, treated or herded in government job and welfare agencies when they finally take that giant step.
“You’ve got to look at this from all the different angles, for example, no matter what resources are available, this man also had some mental health issues. If my whole life is all about work and employment, and then all of a sudden that rug is pulled from under me, and then I’m being asked to go to the Employment Development Office and engage in things that I have no experience about, am not used to and don’t understand, that can be overwhelming,” the counselor said.
Another question is what made Mr. Lupoe go from zero to a final option, said the counselor, who has worked with people needing jobs and with youth. “It’s easy to say there’s a history of vindictiveness or that he could be evil, but if this was a good man, a family man and he fell on hard times, then in his mind, and I’m not excusing it, this was his only option.”
Diana Bonta, vice president of public affairs Kaiser Permanente, stated in a Jan. 28 release that the Lupoes were terminated with good cause and that throughout the process they were treated with dignity and respect.
Dr. Earl Ofari Hutchinson, author and syndicated columnist, said the entire ordeal raises the question of how Kaiser handles personnel employee-management relations. “Is there due process procedures, a grievance process and that’s important because this is not the first complaint that my organization (the Los Angeles Urban Policy Roundtable) has received about the treatment of Black employees at Kaiser,” he said. Some of those complaints involved discrimination and retaliation, he said, and that leads him to believe that there was a flaw and breakdown in Kaiser’s system.
“Two weeks before the Lupoes’ incident, there was a murder-suicide in Inglewood where a young man killed himself and his son and in Baldwin Hills, a man set his house on fire, killing himself and his daughter but his wife escaped. Given the severe economic crisis we’re in, where many more people are obviously facing financial hardship, that also means that psychologically, mentally and emotionally, people are distressed and that may cause more acts of violence,” Dr. Hutchinson told reporters.
Minority Stock Ownership Continues Falling in Market Downturn
The recent severe downturn in the stock market may further reduce stock ownership by African-Americans and other minority investors, new research suggests.
Minorities, who had long trailed Whites in stock ownership, had begun to catch up between 1992 and 2001. But a new study found that those gains largely disappeared between 2001 and 2004, which included the major stock market downturn in 2002.
If minorities began bailing out of the stock market during the 2002 decline, it's likely their rates of stock ownership are going to continue to lag behind Whites and maybe even fall further behind in the current environment, said Sherman Hanna, co-author of the study and professor of consumer sciences at Ohio State University.
“All the bad trends we saw in minority stock ownership from 2001 to 2004 will probably continue for the next several years, because, if anything, the conditions now are even scarier for investors,” Hanna said.
Hanna conducted the study with Suzanne Lindamood, a Columbus attorney. The results appear in the current issue of the Journal of Financial Counseling and Planning.
The researchers used data from the Survey of Consumer Finances, a survey of U.S. households conducted every three years for the Federal Reserve System.
The most recent survey available to researchers was done in 2004. The survey collected data on all types of stock ownership, including mutual funds and retirement accounts.
The survey showed that the rate of stock ownership by African Americans increased from 16.8 percent in 1992 to 34.2 percent in 2001. But the rate declined by nearly 12 percentage points to 22.5 percent in 2004.
Hispanics had an even lower level of stock ownership. About 28 percent of Hispanic households owned stock in 2001, and that dropped to 18.7 percent in 2004.
The rate of stock ownership among White households increased from 1992 to 2001, topping off at 57.5 percent. Unlike minority investors, however, their rate didn't drop significantly between 2001 and 2004 (the drop was less than one percentage point).
Black and Hispanic households did not have higher investments in real estate or businesses that would explain why they didn't invest as much in the stock market, the study found.
Of course, part of the reason that African Americans and Hispanics don't invest as much as Whites is that they have less income, and thus less to invest.
This study confirmed that fact. Moreover, the survey showed that 57 percent of Blacks and 65 percent of Hispanics in 2004 said they were unwilling to take risks with their investments, compared to only 36 percent of Whites who held that view.
In a statistical analysis, the researchers took into account the lower income and lower risk tolerance of African Americans and Hispanics and found that, even then, stock ownership rates would have decreased from 2001 to 2004. Meantime, though, the White rate would not have been predicted to fall.
So why did minorities leave the stock market between 2001 and 2004 at a higher rate than Whites? Hanna suggests that minority households' shorter investment history may have led more of them to panic when the downturn occurred in 2002.
“It may be that White investors are more experienced with the stock market, so that they are prepared for the inevitable drops,” he said. “Minorities tend to be new investors and may be scared off more easily.”
That's unfortunate, Hanna said. “In the long run, you build wealth by putting your money in high-return investments, and there's no better high-return investment for most people than the stock market,” he said.
“You know there are going to be scary periods, but in the long run investing in stocks is still a good idea.” The best remedy may be increased education, according to Hanna.
“It is important that households understand the long-term nature of investments and how high-yield investments like stocks perform over the years when compared to other types of savings and investments.”
Minorities, who had long trailed Whites in stock ownership, had begun to catch up between 1992 and 2001. But a new study found that those gains largely disappeared between 2001 and 2004, which included the major stock market downturn in 2002.
If minorities began bailing out of the stock market during the 2002 decline, it's likely their rates of stock ownership are going to continue to lag behind Whites and maybe even fall further behind in the current environment, said Sherman Hanna, co-author of the study and professor of consumer sciences at Ohio State University.
“All the bad trends we saw in minority stock ownership from 2001 to 2004 will probably continue for the next several years, because, if anything, the conditions now are even scarier for investors,” Hanna said.
Hanna conducted the study with Suzanne Lindamood, a Columbus attorney. The results appear in the current issue of the Journal of Financial Counseling and Planning.
The researchers used data from the Survey of Consumer Finances, a survey of U.S. households conducted every three years for the Federal Reserve System.
The most recent survey available to researchers was done in 2004. The survey collected data on all types of stock ownership, including mutual funds and retirement accounts.
The survey showed that the rate of stock ownership by African Americans increased from 16.8 percent in 1992 to 34.2 percent in 2001. But the rate declined by nearly 12 percentage points to 22.5 percent in 2004.
Hispanics had an even lower level of stock ownership. About 28 percent of Hispanic households owned stock in 2001, and that dropped to 18.7 percent in 2004.
The rate of stock ownership among White households increased from 1992 to 2001, topping off at 57.5 percent. Unlike minority investors, however, their rate didn't drop significantly between 2001 and 2004 (the drop was less than one percentage point).
Black and Hispanic households did not have higher investments in real estate or businesses that would explain why they didn't invest as much in the stock market, the study found.
Of course, part of the reason that African Americans and Hispanics don't invest as much as Whites is that they have less income, and thus less to invest.
This study confirmed that fact. Moreover, the survey showed that 57 percent of Blacks and 65 percent of Hispanics in 2004 said they were unwilling to take risks with their investments, compared to only 36 percent of Whites who held that view.
In a statistical analysis, the researchers took into account the lower income and lower risk tolerance of African Americans and Hispanics and found that, even then, stock ownership rates would have decreased from 2001 to 2004. Meantime, though, the White rate would not have been predicted to fall.
So why did minorities leave the stock market between 2001 and 2004 at a higher rate than Whites? Hanna suggests that minority households' shorter investment history may have led more of them to panic when the downturn occurred in 2002.
“It may be that White investors are more experienced with the stock market, so that they are prepared for the inevitable drops,” he said. “Minorities tend to be new investors and may be scared off more easily.”
That's unfortunate, Hanna said. “In the long run, you build wealth by putting your money in high-return investments, and there's no better high-return investment for most people than the stock market,” he said.
“You know there are going to be scary periods, but in the long run investing in stocks is still a good idea.” The best remedy may be increased education, according to Hanna.
“It is important that households understand the long-term nature of investments and how high-yield investments like stocks perform over the years when compared to other types of savings and investments.”
General Motors emerged as winner-loser in the $789 billion economic stimulus package
General Motors Corp. emerged as both a winner and loser in the $789 billion economic stimulus package that lawmakers agreed to after ironing out differences between competing House and Senate versions.
GM won a provision that will erase a tax liability of up to $10 billion that would have resulted from restructuring efforts, said Senator Debbie Stabenow, a Michigan Democrat.
Yet GM, Ford Motor Co. and other automakers failed to get the full tax write-offs for car buyers proposed in the Senate bill, which might have slowed the plunge in sales that has pushed GM to the brink of bankruptcy. Homebuilders such as Centex Corp. didn’t fare as well as they would have under the $838 billion Senate measure adopted earlier this week.
President Barack Obama, who this week has been stumping for the plan in areas hard-hit by the economy, is counting on the package to help revive the economy. The U.S has lost 3.6 million jobs since December 2007, and the nation’s unemployment rate has risen to 7.6 percent, its highest level since 1992.
“This is the biggest stimulus bill ever passed in the history of the country,” said Pete Davis, president of Davis Capital Investment Ideas in Washington, which provides analysis of Congress to investors.
Public Works Spending
The effects will be widespread, with individuals getting a boost from tax breaks, state governments seeing additional funding and companies benefiting from road building and other infrastructure projects in the package, Davis said. “The peak of the effects will probably occur in six to 12 months,” he said.
The package, which will be sent to the White House for Obama’s signature after final congressional approval in both chambers, amounts to the biggest burst of public works spending since the interstate highway system was started in the 1950s.
Congressional staffers were still working on the final draft of the legislation last night. The House may vote on the plan as early as today.
A proposed $15,000 tax credit for homebuyers was reduced to $8,000, Democratic Senator Max Baucus said, a decrease that may hurt U.S. homebuilders such as Centex and D.R. Horton Inc.
GM’s tax liability would have been triggered by its plan to offer equity in exchange for debt and for health-care obligations to union workers. GM, surviving with the help of $13.4 billion in pledged government loans, is making the changes in order to meet a U.S. requirement for the aid.
Senate Finance Committee Chairman Baucus said about 35 percent of the stimulus plan consisted of tax cuts and the remainder would be government spending.
GM won a provision that will erase a tax liability of up to $10 billion that would have resulted from restructuring efforts, said Senator Debbie Stabenow, a Michigan Democrat.
Yet GM, Ford Motor Co. and other automakers failed to get the full tax write-offs for car buyers proposed in the Senate bill, which might have slowed the plunge in sales that has pushed GM to the brink of bankruptcy. Homebuilders such as Centex Corp. didn’t fare as well as they would have under the $838 billion Senate measure adopted earlier this week.
President Barack Obama, who this week has been stumping for the plan in areas hard-hit by the economy, is counting on the package to help revive the economy. The U.S has lost 3.6 million jobs since December 2007, and the nation’s unemployment rate has risen to 7.6 percent, its highest level since 1992.
“This is the biggest stimulus bill ever passed in the history of the country,” said Pete Davis, president of Davis Capital Investment Ideas in Washington, which provides analysis of Congress to investors.
Public Works Spending
The effects will be widespread, with individuals getting a boost from tax breaks, state governments seeing additional funding and companies benefiting from road building and other infrastructure projects in the package, Davis said. “The peak of the effects will probably occur in six to 12 months,” he said.
The package, which will be sent to the White House for Obama’s signature after final congressional approval in both chambers, amounts to the biggest burst of public works spending since the interstate highway system was started in the 1950s.
Congressional staffers were still working on the final draft of the legislation last night. The House may vote on the plan as early as today.
A proposed $15,000 tax credit for homebuyers was reduced to $8,000, Democratic Senator Max Baucus said, a decrease that may hurt U.S. homebuilders such as Centex and D.R. Horton Inc.
GM’s tax liability would have been triggered by its plan to offer equity in exchange for debt and for health-care obligations to union workers. GM, surviving with the help of $13.4 billion in pledged government loans, is making the changes in order to meet a U.S. requirement for the aid.
Senate Finance Committee Chairman Baucus said about 35 percent of the stimulus plan consisted of tax cuts and the remainder would be government spending.
Congress Nears Passage of $789 Billion Stimulus Plan
An economic stimulus bill is headed for passage in Congress by the end of this week after lawmakers agreed on a $789 billion plan that aims to stem the recession through a mix of government spending and tax cuts.
The House will vote tomorrow on the bill, Speaker Nancy Pelosi, a California Democrat, said today.
Senate Majority Leader Harry Reid, a Nevada Democrat, said a vote in his chamber will come “tonight or tomorrow,” while Senator Jon Kyl, an Arizona Republican, said his colleagues won’t allow a vote today because a text of the legislation had not been released yet.
“Are you kidding,” Kyl said when asked about the prospects for a Senate vote today. He said he and other Republicans won’t “just turn around and vote on it before we even have a chance to look at it.”
Following weeks of debate and negotiations in Washington, Reid announced yesterday that “middle ground” was reached on a final measure. President Barack Obama, who has been pressing for quick approval, thanked lawmakers for their work. He said the measure could save or create 3.5 million jobs, including ones at Caterpillar Inc.
‘Hard-Fought Compromise’
“The CEO of Caterpillar said that if this American Recovery and Reinvestment Plan is passed, his company would be able to rehire some of the employees they’ve been forced to lay off,” Obama said in a statement, referring to Jim Owens, chief executive officer of the construction equipment firm. Obama praised “Democrats and Republicans in Congress who came together around a hard-fought compromise.”
The plan is smaller than the $838 billion bill approved earlier this week by the Senate or the $819 billion one the House passed last month. Lawmakers critical to moving the stimulus legislation through the Senate, including a trio of Republicans, insisted that the compromise be pared down to less than $800 billion.
“We had to nip and tuck and cut here and cut there and modify here and shape there,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat. “We had a long way to go to get to $789 billion, believe me.”
Payroll Tax Cut
Lawmakers said they reduced one of Obama’s main proposals, a plan to provide a $500 payroll tax cut to individuals and $1,000 to families. Under the compromise, the bill would provide $400 and $800 tax cuts, respectively. Retirees and disabled veterans who don’t pay payroll taxes would get a one-time payment of $250.
Lawmakers slashed a $35 billion plan designed to increase home sales. The Senate bill called for doubling a $7,500 tax credit for homebuyers. Under the compromise, that credit would increase by $500. The Senate proposal was supported by Centex Corp., the second-biggest U.S. homebuilder by sales, and the National Association of Home Builders.
Also scaled back was an $11 billion Senate proposal to help the auto industry by allowing new car buyers to write off the cost of interest payments on their loans and their sales and excise taxes. Under the compromise, estimated to cost $2 billion, buyers would be able to deduct the sales and excise taxes on cars purchased this year.
Business Tax Cut
A proposed business tax cut that would have allowed companies to convert losses into tax refunds was all but eliminated. Baucus said the provision would have let companies claim $67.5 billion in refunds this year and next year.
House Financial Services Committee Chairman Barney Frank said today that lawmakers dropped a proposed fix for the troubled HOPE for Homeowners program to keep the bill’s price tag below $800 billion. The program, which allows the refinancing of subprime loans into government-backed loans, has had few takers since it was created last year because lawmakers said they made its enrollment terms too tough.
Lawmakers also dropped provisions, opposed by Wall Street, which would have required companies taking money from the government’s Troubled Asset Relief Program to repay the cash portions of bonuses topping $100,000, Baucus said.
A one-year cut in the alternative minimum tax was retained in the bill.
The bill would spend $59 billion to increase aid to the jobless. It would extend unemployment benefits by 20 weeks and boost weekly benefits by $25. It also would expand a 65 percent subsidy to help the unemployed continue buying health insurance from their former employers.
Highway Spending
Other spending includes $29 billion for highway construction projects, $7 billion to expand access to broadband and $11 billion to renovate the nation’s electrical grid. The measure also would provide $15.6 billion for Pell college tuition grants, $8 billion for rail projects, $5 billion to weatherize low-income homes and $4.5 billion to make federal buildings more energy efficient.
The plan retains “Buy American” provisions for material used in construction projects it funds, though such rules cannot be implemented in a way that violate international trade agreements.
The agreement was a product of intense negotiations that lasted late into the night Feb. 11 and much of yesterday. Democrats who control the House and Senate had stressed that they wanted to hammer out an agreement before a week-long congressional recess starts on Presidents Day, Feb. 16. Obama also spent much of this week urging lawmakers to quickly send him a bill.
“There’s nothing like a deadline to force people to give and take a little bit,” Baucus said yesterday.
White House Aides
White House aides involved in the compromise talks included Chief of Staff Rahm Emanuel, Budget Director Peter Orszag and Deputy Budget Director Rob Nabors.
Senator Susan Collins of Maine, one of the three Republicans whose support was needed to pass the Senate’s stimulus bill, hailed the cuts made to produce the $789 billion plan. She said the measure “reflects our efforts to truly focus this bill on programs and policies and tax relief that will help turn our economy around.”
Senate Minority Leader Mitch McConnell, a Kentucky Republican, said in a statement he saw little in the compromise to change his opinion that the plan remains fundamentally flawed.
“It still misses the mark,” he said. “This unprecedented spending of taxpayer dollars is not timely, targeted nor temporary and it fails to address the underlying problems with the economy. American families know they have a limit on spending their hard-earned money but now they must be wondering if the government has any limits on spending it for them.”
JUDD GREGG WITHDRAWS AS COMMERCE SECRETARY
New Hampshire Sen. Judd Gregg has abruptly withdrawn as President Barack Obama’s nominee to run the Commerce Department, another blow to an administration trying to build a bipartisan cabinet.
The surprising turn of events “blind sided” at least one Obama aide who spoke to Politico, and another senior White House official said he was “totally caught off guard” by the news.
“I couldn’t be Judd Gregg and serve in the Cabinet. I should have faced up to the reality of that earlier,” Gregg said. “I’ve been my own person and I began to wonder if I could be an effective team player. The president deserves someone who can block for his policies. As a practical matter I can contribute to his agenda better—where we agree—as a senator and I hope to do that.”
“The fault lies with me,” Gregg said in an interview with Politico, refusing to discuss any conversations he has had with Obama himself. Asked if he felt the decision would be an embarrassment for the president, Gregg said, “I may have embarrassed myself but hopefully not him.”
In a separate statement, Gregg cited his problems with the economic stimulus bill, as well as partisan disagreements over how to run the Census as reasons for pulling his nomination. He was quick to point out that there was nothing in the vetting process that made him yank his own nomination – steering clear of the controversies that killed the Health and Human Services nominee Tom Daschle and chief performance officer nominee Nancy Kileffer, who both withdrew after tax problems.
Ultimately, Gregg said he and Obama “are functioning from a different set of views on many critical items of policy.”
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