Known as CETA — the Comprehensive Employment and Training Act — the program provided direct government funding to hire temporary workers. At its peak in 1978, it had created 725,000 public service jobs and shaved roughly one point off the unemployment figure…The version of CETA being discussed by Democrats would be some type of public-private partnership through which the government would pay part of an employee’s salary, while he or she would train under and work for a private firm.

Of course, as in most other issues, Republicans automatically voiced their displeasure with the idea, as Michael Steel, a spokesman for Minority Leader John Boehner (R-OH) “gave CETA the instant thumbs down.”

While I would prefer a straight, WPA-style program (both for efficiency and accountability purposes), instead of a public-private partnership, it’s encouraging to see that Congress is finally willing to put such a plan on the table, albeit far later than it should have. There’s no reason that direct job creation — particularly for young people — has been avoided for so long.

However, the Wall Street Journal reported this morning that the administration is “lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit.” “Hamstrung by the nation’s $1.4 trillion deficit and his pledge not to raise taxes on middle-class Americans, Mr. Obama is keen to avoid any measures suggestive of a second, big-ticket stimulus,” the Journal said.

As Paul Krugman noted today, deficit hysteria amounts to “scaring the government into inaction on unemployment.” That, combined with Republican insistence that repealing the stimulus is a sound jobs policy, are going to make serious job-creation proposals difficult to engineer. But as former Federal Reserve Vice Chairman Alan Blinder wrote:

Direct public-service employment is straightforward. As long as the new government jobs do not compete with the private sector, the net job creation should be one-for-one. So hire people to repair parks, not shopping malls. And if we restrict ourselves to low-wage jobs, the cost will not do grievous harm to the budget. For example, at an average all-in cost of $30,000 a year, one million new jobs would cost $30 billion.

As James Galbraith noted, in the absence of additional steps (including fiscal aid to states, which are seeing tax revenues plummet) “double-digit joblessness will linger on, breeding frustration and anger — perhaps all the way through to the mid-term elections.”

Of course, much like the brouhaha over stimulus accounting errors, a direct-jobs program opens its advocates up to criticism when, as Dean Baker put it, “reporters inevitably find some chump claiming to be employing his brother while splitting the government paycheck.” Does that making taking such a step not worth it? I don’t think so.

Democrats have been critical of Geithner’s performance in recent weeks as well, with Rep. Peter DeFazio (D-OR) also calling for him to resign. And according to the New York Post, as Geithner gets battered, “JPMorgan Chase CEO Jamie Dimon is emerging as a potential replacement”:

Sources tell The Post that a number of policy makers have begun mentioning Dimon as a successor to Geithner, whose standing in Washington has suffered…[Dimon] has achieved rock star status during the financial crisis, having navigated JPMorgan through the recession and being a go-to guy when Uncle Sam last year needed Wall Street’s help during the collapses of Bear Stearns and Washington Mutual.

The Post cites “people familiar with Dimon’s thinking” as saying he “would love to serve his country.” No source in the article was willing to go on the record though, so who knows what their motivation for floating Dimon’s name was. As Laura Tara LaCapra wrote at The Street, “[Dimon's] name has been tossed about speculatively — and at times jealously — by those in the industry for some time.”

But politically, if such a personnel switch did come to pass, it would strike me as odd. Geithner’s problem is that he is perceived as being too cozy with Wall Street, and is blamed for the dichotomy between Wall Street’s resurgence and Main Street’s continued time in the doldrums. The failure of the “bailout” to translate into wider recovery is, fairly or not, laid on his doorstep, with 42 percent of Americans saying that “has done a poor job handling the credit crisis and federal bailout programs.”

If that is the case, how would the problem be assuaged by plucking a CEO directly from Wall Street to take over? For his part, Dimon has been very careful to applaud efforts at regulatory reform (aside from panning the idea of a Consumer Financial Protection Agency), and even penned a Washington Post op-ed fully supporting a robust resolution authority for taking apart failed financial institutions. He is also supportive of efforts to help troubled homeowners receive mortgage modifications, telling investors who were bashing the administration’s effort that “they should get over it.”

Dimon has also said that “tax cuts should go to lower paid citizens, not the wealthy.” But he does not support limits on bank size, and JP Morgan is part of a Wall Street trifecta (including Goldman Sachs and Morgan Stanley) that is on pace to pay out $30 billion in bonuses, an increase of 60 percent from last year.

So if the perception is that Geithner is coddling the banks, would that change with Dimon, as opposed to someone without ties to Wall Street? I’m not sure that case can be made. But on the plus side, Dimon hasn’t characterized anything that he’s done as “God’s work.”

The Securities Industry and Financial Markets Association, a leading lobbying organization for banks and securities firms, said that such a tax would literally stall the stock market:

Imposing a tax on financial transactions is the wrong idea at the wrong time. Such a tax would likely result in a stalling of the stock market, cutting off companies’ ability to raise capital to fund new investments in plants and equipment, and thus create jobs. Furthermore, it would directly and detrimentally affect millions of Americans by imposing a tax on their savings such as mutual funds, just as they are seeing their investment assets regain value.

An analyst in Washington at Concept Capital, which advises brokers and dealers, told clients that “we cannot completely dismiss the slight possibility it could be part of a House jobs bill,” but vowed that it has “virtually no chance in the Senate.” Even right-wing tea party organizers Americans for Prosperity got into the act, saying that the FTT would be a “disaster.”

Contrary to SIFMA’s assertion, under the proposed plan, the tax would be refunded “for those involving assets kept in individual retirement accounts, education savings accounts and health savings accounts” and the first $100,000 in annual transactions. So “millions of Americans” would not see their savings accounts slammed.

But furthermore, an FTT will make the financial system allocate capital more efficiently, as trading for the simple sake of trading will be more expensive. Center for Economic and Policy Research co-director Dean Baker estimates that an FTT could free up more than $60 billion a year in capital and labor for productive uses.

Finally, I’m not sure where SIFMA gets off suggesting that an FTT would stall the stock market, as the United Kingdom already has both a tax on stock trades and a vibrant stock exchange. Wall Street was saved by taxpayers to the tune of $700 billion dollars, plus untold amounts of guarantees against losses and cheap money from the Federal Reserve. An FTT — the revenues from which could be put towards programs or deficit reduction — seems only fair.

In response to the new legislation, the big business community — led by the Chamber of Commerce — has voiced its opposition to the very notion of paid sick days, by downplaying the extent of the problem. The Chamber said that “the problem is not nearly as great as some people say,” while the National Association of Manufacturers claimed that employers who don’t provide sick leave are “clearly the exception.”

The Wonk Room sat down with DeLauro today to discuss her bill. She said that by steadfastly opposing paid sick leave, the Chamber and its allies are simply ignoring the 57 million working Americans who currently have no paid sick days:

[The Chamber of Commerce] is just ignoring the needs of a bulk of a workforce, people who get up every day, go to work, want to work, but you know what? They get sick. People get sick and to not have the opportunity to take a day or two days, nobody’s talking about two weeks…What we are trying to do is address the issue of 57 million people — who are hard-working people — who today have not one paid sick day.

Watch it:

DeLauro noted that the arguments coming from the Chamber are the same that the group employed to oppose the Family and Medical Leave Act of 1993:

They said at that time that business was going to crash, that this country was going to go to hell in a handbasket, that we couldn’t survive this kind of an act. Well, they were proven wrong, and they are wrong in this instance.

Watch it:

DeLauro correctly noted that the U.S. economy loses $180 billion in productivity annually due to sick employees attending work and infecting other workers. DeLauro is also a sponsor of the Healthy Families Act, which would permanently require seven paid sick days for workers (again, at firms with more than 15 employees). In both bills, leave could be used to care for a sick child or elderly relative.

Can Kanjorski break them up?

Though regulatory reform legislation has been moving in the House for weeks, the Senate only started today, with members of the Senate Banking Committee giving their opening statements regarding Chairman Chris Dodd’s (D-CT) reform bill. Republicans, who have already said that they will lend the regulatory reform effort zero support, were unanimously opposed to the bill, particularly the provision to create a Consumer Financial Protection Agency (CFPA).

But Sen. Judd Gregg (R-NH) also took a few minutes to criticize the Kanjorski amendment, stating that it was too “European,” and that it empowers the government to break apart Coca-Cola and Wal-Mart, the latter because “they don’t have a union“:

The Kanjorski amendment that was dealt with yesterday on the House side was an exercise in European politics where there was some belief that a group of thoughtful people can choose winners and losers in the marketplace that are still doing well, that aren’t at risk, and decide how those winners and losers should be structured. Well where does that stop? Is Coca-Cola, should they be broken up under the House bill? Wal-Mart, maybe, because they don’t have a union, should be broken up under the House bill? This is undermining the American advantage, especially relative to our European neighbors.

Watch it:

While Wal-Mart’s lack of unionization is a shame, Kanjorski’s amendment clearly states that it only pertains to financial institutions, which can be broken apart only for threatening the financial system, and only after more stringent capital requirements have proven ineffective in removing the threat:

Scott Valentin, the banking analyst at FBR Capital Markets, told DealBook that he expects the Kanjorski’s push will meet its demise in the Senate, as “Wall Street’s objections…will win out in the end.” Valentin “based his opinions partly on meetings he had with Senate Republican staffers the day before the final language of the bill was released.”

There’s been a fair bit of hemming and hawing over the news that the federal debt has now surpassed $12 trillion. Sen. Judd Gregg (R-NH), widely known for his fiscal hawkishness during Democratic administrations, couldn’t resist pointing the finger, saying, “this level of fiscal recklessness and irresponsibility should be shocking to the American taxpayer, especially since it is our children and grandchildren who will be forced to grapple with the consequences of our debt.”

While this milestone is actually nothing of the sort – $12 trillion is gross federal debt, not the debt owed to the public, which is the much more important figure – you can be sure that many people will use this as another excuse to condemn what Gregg called “expensive expansions of government” and to blame all of our fiscal problems on President Obama. But here are three facts about this year’s deficit that you probably won’t hear much about:

– Less than one-fifth of all the new spending in FY 09 came from Obama initiatives;

– The big deficit this year was as much a product of a huge decline in tax revenues as it was an increase in spending;

– The overall cost of the decline in tax revenues was four times larger than the cost of Obama’s initiatives.

These facts don’t fit with the narrative of an Obama “spending binge.”

It’s true that there was a big increase in spending in fiscal year 2009. Total spending rose by about $600 billion, not counting payments for interest on the debt (which actually declined in 2009 because of extraordinarily low interest rates).

But fiscal year 2009 began on October 1, 2008, when George Bush was still president, and by the time President Obama took office more than 40 percent of that new spending had already been committed, in the form of TARP and the bailouts for Fannie and Freddie. Another quarter of the new spending came from growth in entitlement programs and unemployment insurance, which was certainly outside the control of a new president.

The American Recovery and Reinvestment act, on the other hand, was responsible for only 18 percent of the new spending in 2009. So, spending did rise, but only one in five of those new dollars came from Obama’s initiatives.

And spending is only half the story. The other half is that tax revenues plummeted this year to their lowest levels since 1950.

Johnny-come-lately fiscal hawks almost never talk about the tax side of the balance sheet when they rail against deficits, because it’s more politically expedient to point fingers at the Recovery Act. But the size of the decline in tax revenues was four times larger than all the Recovery Act spending this year!

This year’s deficit was eye-catching, but it didn’t just appear out of the blue on January 20th, and it isn’t just a product of new spending. If you hear some pundit or politician claiming that a huge expansion of government is responsible for our fiscal woes without mentioning President Bush and with nary a word about tax revenues, you can be pretty sure that he’s more interested in scoring political points than actually solving problems.

In the interim, banks have been jacking up rates left and right. In fact, half of Americans report that their credit card rates have been raised in the past six months. According to Pew Charitable Trusts’ Safe Credit Cards Project, the lowest interest rates offered on most bank cards “jumped by more than 20 percent” in that time.

To deal with this problem (which is significantly of their own making), Democrats crafted a bill bumping up the implementation date of the new regulations and freezing interest rates until the new laws come into effect. The bill was approved by the House on a vote of 331-92 earlier this month.

Due to a packed floor schedule, there was no stomach in the Senate for a prolonged fight over credit cards. So, as Ryan Grim noted “the only way Democrats could pass the bill in time for the holidays would be with the support of the GOP.”

Sen. Chris Dodd (D-CT) tried to do just that yesterday, with the support of Sen. Mark Udall (D-CO), by asking for unanimous consent to bring the bill to the floor. However, Sen. Thad Cochran (R-MS) objected “on behalf of several senators on this side of the aisle,” killing the whole effort. Watch it:

According to Pew, none of the credit cards currently offered online by the 12 largest U.S. banks “would meet requirements of new federal curbs on the industry’s rates and fees.” But Republicans still saw fit to allow the credit card companies to do whatever they want until the new rules comes into effect next year.

As the Coloradoan reported, “Republicans didn’t explain their decision to block a vote…beyond Cochran’s short objection.” Dodd, clearly expecting an objection, lamented that a bill “that would really have allowed us to do something meaningful” was being derailed.

This is, sadly, exactly how the rest of the financial regulatory reform debate is going. Yesterday, Senate Republicans said that “there is no support within the GOP for the financial overhaul plan outlined last week by Democrats.” “My understanding is that it’s not acceptable to any of the Republicans on the [banking] committee as it now stands,” said Minority Leader Mitch McConnell (R-KY).

That’s right. In the wake of the financial crisis, not one Republican is prepared to vote for regulatory reform. And the reason is that “they think the plan goes too far by putting onerous restrictions on Wall Street that could limit the availability of credit.” So by preventing the credit card bill from going forward — and by uniting in opposition against wider regulatory reform — the GOP is endorsing the credit card companies’ actions and the wider return to rampant risk on Wall Street.

Goldman Sachs CEO Lloyd Blankfein

And to show us that they really mean it, Goldman is devoting $500 million over the next five years to scholarships for business education and loans to small businesses:

Goldman Sachs said late Tuesday that it would provide $500 million to support small businesses, hours after its CEO Lloyd Blankfein apologized for the group’s role in the global financial crisis…The group said it will provide $100 million a year over the next five years, including a total of $200 million to provide scholarships for business and management educations and $300 million in the form of “loans and philanthropic support” to increase access to capital for small businesses.

Not that I want to in any way discourage big businesses from undertaking such efforts, but, really? As Daniel Indiviglio wrote, “maybe I’m crazy, but I don’t think this initiative, though a pleasant effort, will have many angry Americans putting down their pitchforks currently pointed at Goldman. If Goldman really wants to impress anyone, they’re going to have to do a little better than this.”

For some perspective, Goldman has already set aside $17 billion for bonuses this year, which could climb to $23 billion by year’s end. So the five-year program amounts to 2 percent of this year’s bonus pool. The Financial Times pointed out that “the $100 million annual cost is the equivalent of one good trading day” and that Goldman “had 36 days in the third quarter where it made more than $100 million.” And loans account for part of the $500 million, which presumably have to be paid back, while Goldman will get a write-off for any charitable giving, thus reducing their tax exposure.

And its not just Goldman that’s having a lot of good trading days recently. According to a report from the New York City Comptroller, “Wall Street profits in 2009 are on track to exceed the record set three years ago, at the height of the credit bubble”:

The report noted that the four largest investment firms in Manhattan — Goldman Sachs, Merrill Lynch, Morgan Stanley and the investment banking arm of JPMorgan Chase — earned $22.5 billion in the first nine months…Net revenue at the four firms, which excludes interest expenses, reached a high of $57.7 billion in the second quarter.

Of course, instead of $500 million, Goldman could up its small business program to, say, $23 billion (or whatever the entirety of its bonus pool turns out to be). After all, that money was earned, in large part, by Goldman’s access to cheap money from the Federal Reserve.

Barring that development, Democrats in Congress are reportedly looking quite seriously at a financial transactions tax, which is an excellent idea, unless we want to count on further charity from Blankfein and co. to boost the country towards economic recovery

Seemingly deliberate noncompliance with the Home Affordable Modification Program (HAMP) may explain why Bank of America has consistently lagged behind the other large servicers in the share of delinquent loans that have been modified under the program. Ever since the Treasury Department began releasing data on the performance of servicers participating in HAMP, Bank of America has always been dead last of the four large servicers.

BofA has been participating in HAMP since its inception in mid-April. As of the end of October, it had active trial modifications on 14 percent of its estimated 991,000 eligible mortgages. This rate is less than half that of Wells Fargo (29 percent), which is third among the big servicers. Even US Bank, which has a much smaller portfolio but only signed up for the program on September 9, has been able to get 15 percent of its borrowers into trial modifications.

The reported percentage of modifications for each servicer is calculated based on the number of active modifications divided by the number of loans that are at least 60 days late and otherwise meet eligibility criteria. But as this recent letter demonstrates (which is available here, courtesy of the Coalition for Mortgage Industry Solutions), BofA is actively soliciting borrowers to participate in its own private mortgage modification program, without first verifying whether or not the borrower is eligible for HAMP. (In the full document, the borrower’s personal information has been blacked out.)

The letter clearly indicates that BofA has no idea whether or not the borrower qualifies for HAMP, yet they are still offering an alternative program. This diversion is an apparent violation of the contract signed with Treasury. The Servicer Participation Agreement stipulates:

Servicer shall perform the Services for all mortgage loans it services, whether it services such mortgage loans for its own account or for the account of another party, including any holders of mortgage-backed securities (each such other party, an “Investor”).

The “Services” referred to in this section are elsewhere in the contract defined as “All services required to be performed by a participating servicer…including, but not limited to, obligations relating to the modification of first lien mortgage loans and the provision of loan modification and foreclosure prevention services relating thereto.”

The program guidelines released in March by Treasury quite plainly state that “participating servicers are required to consider all eligible loans under the program guidelines unless prohibited by the rules of the applicable PSA and/or other investor servicing agreements. Participating servicers are required to use reasonable efforts to remove any prohibitions and obtain waivers or approvals from all necessary parties.”

In case there remains any ambiguity as to whether a servicer can pull borrowers out of the pool to offer them a non-HAMP-compliant modification before determining their status under HAMP, Treasury official Herbert Allison recently testified, “under HAMP’s loan modification guidelines, mortgage servicers are prevented from ‘cherry-picking’ which loans to modify in a manner that might deny assistance to borrowers at greatest risk of foreclosure.”

So BofA can’t simply suggest an alternative program to this homeowner without determining eligibility for HAMP, and by doing so, it is potentially lowering the number of successful HAMP modifications it completes. Given the size of BofA’s portfolio, its compliance with program rules — particularly as it pertains to getting eligible borrowers into the program — directly impacts the public’s perception of the success of HAMP. If BofA were performing as well as CitiMortgage, Treasury would have reported an additional quarter million mortgages in its HAMP totals.

Diverting eligible borrowers from HAMP threatens to undermine support for the program. Treasury should not allow any contractual breaches to continue.

Earlier this month, the Chamber of Commerce downplayed the extent to which lack of guaranteed paid sick leave could spread disease, saying that “the problem is not nearly as great as some people say.” And now the rest of the big business community is piling on:

Testifying on behalf of the National Association of Manufacturers Tuesday, A. Bruce Clarke, who runs his own 1,000-member business lobby in North Carolina, told Miller’s committee that most businesses already have comparable or more generous paid leave programs, so why bother? “While some employers may not have taken specific action in response to the H1N1 outbreak, these employers are clearly the exception to the widespread practices taking place today,” Clarke said in his prepared testimony.

And its not only business downplaying the extent of the problem. Rep. John Kline (R-MN), the ranking member on the Ed. and Labor committee, also tried to claim that the “vast majority” of workers have paid sick leave:

“With so many workers already having access to a variety of sick leave options, we need to look very carefully at proposals to add a new layer of federal leave mandates,” the 2nd District Republican said in a prepared statement during a House Education and Labor Committee hearing…According to Kline, the vast majority of workers in the United States already have access to paid sick leave.

Actually, nearly half of private sector workers have no paid sick leave. This includes 78 percent of hotel workers and 85 percent of food service workers, even though they are among the most likely to come in contact with other individuals. 68 percent of workers not eligible for paid sick days say that they have gone to work with a contagious illness.

According to the Centers for Disease Control, an employee with H1N1 will infect one in 10 co-workers if he or she attends work. But without any paid sick leave, many workers can’t afford to take a day off, or fear for their job if they request time off to recover.

Miller’s bill, as it is, would address the immediate threat of swine flu, but would continue to give employers the choice regarding whether or not workers receive sick leave. It also doesn’t provide time off to care for a sick child. The Healthy Families Act, sponsored by Rep. Rose DeLauro (D-CT), would guarantee seven paid sick days to all workers at firms with more than 15 employees. Enacting HFA would be an important step to ensuring that workers don’t have to place their job and their co-workers at risk when they come down with an illness.

In 2008, nearly 17 million children, or 22.5 percent, lived in households in which food at times was scarce — 4 million children more than the year before. And the number of youngsters who sometimes were outright hungry rose from nearly 700,000 to almost 1.1 million. Among Americans of all ages, more than 16 percent — or 49 million people — sometimes ran short of nutritious food, compared with about 12 percent the year before. The deterioration in access to food during 2008 among both children and adults far eclipses that of any other single year in the report’s history.

President Obama characterized the data as “unsettling,” and reiterated his campaign pledge to end child hunger by 2015. “These numbers are a wake-up call…for us to get very serious about food security and hunger, about nutrition and food safety in this country,” added Agriculture Secretary Tom Vilsack.

These numbers will only get worse in the short-term, as 2009’s increase in unemployment will negatively impact the food situation of even more families. This is just one more reason that any jobs package that Congress puts together should include further aid to states, so that they don’t cut back on services providing food to the hungry, or lay off even more people that will have to join lines at the soup kitchen.

But, since Obama is remaining committed to his 2015 goal, this could also be a time to look at poverty-fighting measures more widely. The Senate Agriculture Committee held a hearing today on reauthorization of U.S. Child Nutrition Programs, which is one more opportunity to combat hunger, if dollars are put in the right places. As Vilsack told the committee “this legislation is an opportunity to in one stroke confront both the challenges of obesity and hunger – with the prospect of better health and well-being in the years to come. Investing in meal quality and access to these critical programs will help support the capacity of our young people to learn and acquire the tools necessary to become the leaders of tomorrow.”

The Board of Directors is the principal governing and policymaking body of the U.S. Chamber of Commerce. The board’s membership is as diverse as the nation’s business community itself, with more than 100 corporate and small business leaders serving from all sectors and sizes of business, and from all regions of the country.

In fact, a Wonk Room analysis has found that the U.S. Chamber of Commerce board is overwhelmingly Republican, having contributed six to one to conservative over liberal politicians.

The nation’s business community, however, is a bipartisan participant in American politics, contributing about equally to both parties over the last ten years. The Wonk Room has found that from 1999 to 2007, corporate contributions broke 53% to 47% in favor of Republicans. After the presidential campaigns of Barack Obama and other Democrats massively outraised that of Sen. John McCain (R-AZ) and other Republicans, the split from 1999 to 2009 stands 52% to 48% in favor of Democrats:

Source: Center for American Progress Action Fund, from Federal Election Commission data compiled by the OpenSecrets project of the Center for Responsive Politics.

The Chamber — when not lying about the effects of climate or health care reform — has grossly inflated the numbers of its members. It also seems it’s misrepresenting the nature of the few members who make its misguided policy decisions.

Methodology: Contribution data from OpenSecrets.org of the top 50 industries to Congress from the 1999-2000 to the 2009-2010 cycle were compiled. Donations from unions, candidate committees, civil servants, ideological and issue groups, education, and retirees were excluded.

Gov. Linda Lingle (R-HI)

The decision to impose furloughs drew the ire of Education Secretary Arne Duncan, who said last week that Hawaii’s decision was “mind-boggling,” and added that the furloughs all but disqualified Hawaii from competing for the $4 billion in Race to the Top funds that were included in the American Recovery and Reinvestment Act:

“I don’t know anyone who can make a case that eliminating 10 percent of your school days is good for the children of Hawaii,” he said. Moreover, Hawaii faces “a heck of a challenge” to make a compelling case that it qualifies for between $20 million to $75 million in federal “Race to the Top” competitive grants next year, he said.

Yesterday, Hawaii Governor Linda Lingle (R) saw the light and decided to end Furlough Fridays:

Gov. Linda Lingle plans to eliminate 27 Furlough Fridays at Hawaii’s public schools by tapping the so-called rainy day fund and switching teacher training days to class time…Under Lingle’s plan, furlough days would be restored starting Jan. 1 by using $50 million from the fund, formally the Emergency and Budget Reserve Fund, and converting non-instructional hours to instructional hours, totaling 15 school days.

First, this episode highlights that more aid to states should be part of any job creation package that Congress might consider. Letting states slash their primary education systems to smithereens serves no one’s interest — not the teachers who see their purchasing power diminish, the parents who need to find alternative arrangements for their children during the day, or the students whose education has been compromised.

But even given the budget situation, Lingle’s furloughs were an extraordinarily bad idea. Lawmakers really need to rethink their knee-jerk impulse to reduce time in the classroom when faced with budget problems, as expanding time — particularly discarding the outdated 180 day model — and trying to integrate schools into the wider community is a necessary part of revitalizing America’s education system. As Duncan told The Wonk Room last month, schools that are following the traditional model of six hours per day, five days per week, for nine months “don’t serve anyone well.”

As CAP pointed out in a new report examining leaders and laggards in terms of innovation in education, “Hawaii does a below-average job managing its schools in a way that encourages thoughtful innovation. Ninety-four percent of teachers report that routine duties and paperwork interfere with their teaching, and only 22% of teachers like the way their school is run.” Let’s hope that this controversy over the furloughs causes Hawaii’s administration to take a deeper look at its education policies.

A bill sponsored by Sen. Jack Reed (D-R.I.) would give unemployment compensation to employees who accept a reduced work schedule to allow their companies to avert layoffs or to hire more employees…Democratic Sens. John Kerry (Mass.), Paul Kirk (Mass.) and Patrick Leahy (Vt.) have signed on as co-sponsors. Reed’s plan calls for up to $600 million for the program, which would last for up to two years.

The Hill noted that “Rhode Island and 16 other states already have their own work share programs, which have saved more than 146,000 jobs this year so far, according to the Labor Department.” According to Reed’s office, “if all 50 states participated in work share programs, between 400,000 and 500,000 jobs a year could be saved.”

The most outspoken advocate of work sharing has been Dean Baker, co-director of the Center for Economic and Policy Research, who pointed out that the process is cheap, simple, and quick:

In principle, the government can go this route to save jobs at a cost of a bit more than $20,000 per job – far less than the cost per job saved through the stimulus package…Approximately 4 million people leave their jobs every month, half involuntarily. We have job growth if we either create more than 4 million jobs or reduce the number of jobs lost below 4 million. If a work share program reduced involuntary job loss by 20 percent, or 400,000 per month, it would have the same effect as adding 400,000 new jobs.

Both Baker and Paul Krugman point to the example of Germany, which has a work sharing program, along with strong labor protections. As Krugman wrote, the measures “didn’t prevent a nasty recession, but Germany got through the recession with remarkably few job losses.” Plus, as Peter Dorman at EconoSpeak noted, work sharing helps preserve human capital, as firms don’t have to re-hire and re-train workers down the line — they just increase their hours back to where they were previously.

All that said, this is still only a B- idea. (Krugman acknowledges this, calling it the “third-best” economic policy available, after committing to moderate inflation to lower interest rates or further fiscal stimulus.) In the absence of stronger stimulus measures, such as aid to states or a direct job program, it will do some good — and it may be the only thing that a deficit-crazed Congress is willing to consider. But it is inefficient, has the potential to be wasteful, and obviously does nothing for those already out of work. Work sharing isn’t terrible, but I’d like to think that we can do better.

Source: Center for American Progress Action Fund, from Federal Election Commission data compiled by the LittleSis project of the Public Accountability Initiative.

The top beneficiary of this outpouring of conservative cash is the Republican National Committee, which has received over ten times as much money from the Chamber’s board as the Democratic National Committee — $1,257,201 versus $102,950. Contributions went 4.5 to 1 for John McCain ($373,150) versus Barack Obama ($82,150).

Source: Center for American Progress Action Fund, from Federal Election Commission data compiled by the LittleSis project of the Public Accountability Initiative.

Of the board’s 116 members, 96 have made major political contributions. Sixty-eight directly contributed to the campaigns of George W. Bush or John McCain. In contrast, only 27 gave to the campaigns of Al Gore, John Kerry, or Barack Obama. Forty-seven board members, including Chamber of Commerce president Tom Donohue, have contributed more than 90 percent to Republicans, averaging $74,634 in GOP contributions. Only seven members have contributed more than 90 percent to Democrats, averaging $3,529 to Democrats.

The political giving is dominated by leading Republican billionaire George Argyros, the Bush pioneer who served a disastrous term as the U.S. ambassador to Spain. Argyros is also one of the top backers of Newt Gingrich’s right-wing American Solutions for Winning the Future. The following visualization of Chamber of Commerce board member contributions is a sea of red surrounding a few small islands of blue. The size of each box is proportional to amount of total contributions per person, with the shading indicating percentage of Republican versus Democratic contributions:

The Chamber’s Board: A Right-Wing Money Machine

Source: Center for American Progress Action Fund, from Federal Election Commission data compiled by the LittleSis project of the Public Accountability Initiative.

Cross-posted at ThinkProgress.

Of course, that setback won’t end the banks’ effort to stop such legislation from going forward. In fact, next week they will be calling on some of their friends from around the business world to try to convince New York’s congressional delegation that such legislation “would undermine the Big Apple’s economy and its reputation as a world financial hub”:

Among roughly 20 business leaders slated to come to a meeting called by Rep. Charles Rangel (D-N.Y.) are: Rupert Murdoch, CEO of News Corp.; Lloyd Blankfein, CEO of Goldman Sachs; Larry Fink, CEO of BlackRock; and William Lauder, CEO of The Estee Lauder Companies Inc.…“If the U.S. dismantles our leading institutions, then it will destroy the American financial center, which is largely anchored in New York,” said Kathryn Wylde, president and CEO of the [Partnership for New York City]. “It’s just frightening.”

Of course, the UK has already begun breaking up firms that were deemed “too big to fail,” and the financial sector is arguably more important to London than it is to New York.

This isn’t the first time that large corporations have gone to bat for the banks when it comes to regulatory reform. When the House Financial Services Committee was working on a bill reforming the derivatives market, a coalition of business groups came in to pressure lawmakers, despite the fact that 97 percent of derivatives are held by just five large financial firms.

The details of these provisions — particularly what constitutes an undue amount of risk and who gets to ultimately pull the trigger to break up a firm — have yet to be ironed out, and I would hope that Rupert Murdoch and William Lauder don’t have enough sway over regulatory policy to make much of a difference. (Since they’re joining with Goldman Sachs CEO Lloyd Blankfein, are they also doing “god’s work”?)

As Kanjorski said, this could be “one of our potentially last chances to get control, particularly of financial institutions in their mega-forms, before they take over the world.” It’d be a shame if News Corp. took that chance away.

President Barack Obama plans to announce in next year’s State of the Union address that he wants to focus extensively on cutting the federal deficit in 2010 – and will downplay other new domestic spending beyond jobs programs, according to top aides involved in the planning. The president’s plan, which the officials said was under discussion before this month’s Democratic election setbacks, represents both a practical and a political calculation by this White House.

As Andrew Sullivan wrote, “this classic Politico piece — in as much as it regurgitates almost comically process-oriented Beltway wisdom — fails to mention a few things about Obama’s spending in his first year,” including: the recession, that health care reform is paid for, and that “there’s a big big difference between spending on green and infrastructure investment and slashing taxes or increasing Medicare entitlements.” Chris Hayes added “there’s one big maddening conceptual error at the heart of this piece…which is to confuse relatively substantial pieces of domestic legislation with a spending ‘binge.’”

But if true, what does the administration mean by “focus extensively” on deficits next year? And what will that entail for the domestic agenda? I certainly hope that no one is thinking of making a 1937-style haul back on recovery efforts. Judging by the public statements of Treasury Secretary Tim Geithner and Office of Management and Budget Director Peter Orszag, they aren’t, but if the administration is quaking over the political ramifications of the deficit now, how long until they head in that direction?

This week, we’ve already seen a group of senators threaten to force the U.S. to default on its debt (by refusing to increase the federal debt ceiling), if they don’t get a bi-partisan commission that will be tasked with cutting Social Security and Medicare. This deficit-mania comes despite a stubbornly weak labor market, and at the same time that Congress is insisting that more must be done in terms of job creation.

Of course, there’s nothing wrong with wringing waste from the system, and there are surely some ineffective or duplicative programs in the various federal agencies that can afford to go by the wayside. And if that’s what the administration means, more power to them.

But as Paul Krugman wrote, “conventional wisdom in Washington seems to have congealed around the view that budget deficits preclude any further fiscal stimulus — a view that’s all wrong on the economics, but that doesn’t seem to matter.” It’d be a shame to see the administration turn this particular bit of conventional wisdom into policy that doesn’t provide more support to the job market, and at worst, could choke off economic recovery.

As it turns out — and as many economists said at the time — this was not a very good idea. A new report from the Pew Center on the States warns of “fiscal peril” in 10 states which, if unaddressed, will hamper the nation’s economic recovery:

These states’ budget troubles can have dramatic consequences for their residents: higher taxes, layoffs or furloughs of state workers, longer waits for public services, more crowded classrooms, higher college tuition and less support for the poor or unemployed. But they also pose challenges for the country as a whole. The 10 states account for more than a third of America’s population and economic output. And actions taken by state governments to balance their budgets — such as tax increases and drastic spending cuts — can slow down the nation’s economic recovery.

“The problems are evident from coast to coast,” said Mark Zandi, chief economist of Moody’s Economy.com. “Without more help to state and local governments, the resulting budget cuts will become a very significant drag on the economy.” The Center on Budget and Policy Priorities estimates that state budget shortfalls could mean that nearly a million jobs to disappear in the next year:

Presuming they will get no more fiscal relief, states will have to take steps to eliminate deficits for state fiscal year 2011 that will likely take nearly a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year…Deficits for the current state fiscal year, not all of which states have closed, total more than 25 percent of state general fund budgets, making these the largest shortfalls on record.

As Derek Thompson wrote, those protesting more state aid “must recognize what that entails: hundreds of thousands of state employees joining the ranks of unemployment, and unemployment benefits. Q3 was great, but this thing isn’t close to being over.” And these employees are teachers, police officers, and health care workers — not the kind of employees that it’s easy to make do with less of.

The administration announced today that it is planning a “jobs summit” for December, with Obama calling high unemployment one of the administration’s “great challenges.” If the administration is serious about policies aimed at stemming job loss, more aid to states should certainly be on the table.

Already, one of Obama’s DoL nominees, Lorelei Boylan, withdrew her nomination after a lengthy wait for a confirmation vote. But it’s imperative that Smith’s nomination be brought to the floor and that she get confirmed.

As Solicitor, Smith would be responsible for enforcing all of the nation’s workplace laws, and overseeing the office representing the agency in all enforcement actions. And such actions are clearly necessary, as 16 people die at work every day from employer negligence in America, while 68 percent of low-wage workers report that they have been the victim of wage violations. All told, the typical low-wage worker victimized by wage theft sees an overall 15 percent reduction in pay annually.

Under the Bush administration’s corporate-friendly Labor Department, the solicitor’s office sat on its hands and failed to enforce even the most flagrant labor violations. And Enzi seems to be trying to maintain the status quo. As Thomas Frank wrote, Enzi is coming after Smith “because she is an effective and innovative labor bureaucrat.” Is Enzi motivated by “the dread possibility of a Labor Department that works?” Frank asked. AFL-CIO President Richard Trumka agreed, saying that those in Congress who are holding up the nominees are doing so simply “because they don’t want those positions filled.”

The New York Times has called Smith “one of the nation’s foremost labor commissioners because of her vigorous efforts to crack down on minimum wage and overtime violations at businesses including restaurants, supermarkets, car washes and racetracks.” During her time with the New York State Labor Department, where she is labor commissioner, Smith helped win more than $20 million in back pay for thousands of low-wage workers, including a record $2.3 million settlement with the owner of Ollie’s Noodle Shop and Grill chain in Manhattan.

As David Madland and Karla Walter pointed out, “too often penalties [for labor law violations] are easily reduced or levied for low amounts, and the solicitor’s office has minimized civil and criminal liability for the worst violators.” Smith can change that, if only her nomination could come to a vote.

Sen. Chris Dodd (D-CT) and Rep. Barney Frank (D-MA)

With this bill, there are now competing versions of regulatory reform in the Senate and the House, where the effort is being led by Financial Services Committee Chairman Barney Frank (D-MA). Unlike Frank, who chose a piece-meal approach, Dodd is moving his legislation as one large package.

Overall, Dodd’s bill is more ambitious, and would go further in terms of blowing up and replacing the current system (but it also hasn’t been through mark-up, which is where some of the changes in the various pieces of House legislation originated). Below is a comparison of the major provisions in the two versions:

Both the House and Senate also have provisions aimed at reining in use of over-the-counter derivatives and regulating hedge funds and other non-bank entities. But politically, the two most contentious issues will likely be reconciling Dodd’s complete consolidation of regulators with Frank’s more limited approach, and trying to garner Republican support for the CFPA on the Senate side.