2010 - %3, December

New START Primed For Passage

| Tue Dec. 21, 2010 1:34 PM EST

From National Review editor Rich Lowry:

Republican opposition to New START is collapsing. One Senate source just told me the vote for ratification could go as high as 75. Another said, “I don’t know if it will get that high, but it’s starting to tick up there.” As the sense builds that ratification is inevitable, Republicans are lining up to get on the “right side.”

In other words, a big chunk of the Republican caucus has known all along that New START was a good treaty but was holding out for strictly partisan purposes. If it had been close, and giving Obama a black eye had been a serious possibility, they would have voted no. But with that option gone, they're willing to vote yes. It's a real profile in cowardice.

This says nothing good about the modern Republican Party. Everyone expects partisan gameplaying in Congress, but over a nuclear arms treaty with Russia? Seriously?

Advertise on MotherJones.com

Winners and Losers

| Tue Dec. 21, 2010 1:24 PM EST

Luke Johnson runs down the results of House districts gained and lost thanks to the latest census results:

Texas, where Republicans have a supermajority in the House and Senate and hold the governor’s mansion, gained four new House seats....Florida gained two seats....Arizona, Georgia, Nevada, South Carolina, Utah and Washington all gained one seat.

New York and Ohio lost two seats each, representing the longstanding decline in growth in the Rust Belt. Iowa, Illinois, Louisiana, Massachusetts, Missouri, New Jersey and Pennsylvania all lost one seat.

Michigan lost a seat too, according to Aaron Blake. Everyone else held their ground.

Stopping the Next Meltdown

| Tue Dec. 21, 2010 1:05 PM EST

Tyler Cowen is skeptical that vigilant bondholders can motivate banks to decrease their risk exposure. He's got a bunch of reasons that I agree with, including regulatory capture, the opacity of bank trading books, and the impossibility of making a no-bailout policy credible. But there's also this:

The net risk of a bank position is not determined solely by the bank's portfolio. Say a bank lends money to homeowners and then those homeowners increase their leverage. The bank is now in a riskier position, and de facto a more leveraged position, althoug it's measured leverage hasn't gone up a whit.

I think this gets to the heart of things. It's not practical to micromanage risk-taking in the financial sector, nor is it feasible to eliminate bubbles and bank crises entirely. But I really do believe that we could very substantially reduce the risk of bank crises without affecting the efficiency of legitimate banking operations. The way to do it is with very simple, very blunt leverage restrictions that apply to all financial actors over a certain size: banks, insurance companies, hedge funds, private equity, you name it. If you have assets over, say, $10 billion, then the rules kick in. Strict leverage limits (say, 10:1 or maybe 15:1) based on conservative notions of both assets and capital would be a pretty effective bulwark against excessive risk taking but wouldn't seriously interfere with the basic asset allocation function of the financial industry.

It wouldn't be perfect. Nothing is perfect. But if we got obsessed with leverage the same way that, say, the Fed is obsessed with inflation, we could all sleep a lot easier at night. Dodd-Frank and Basel III have gotten us part of the way there, but almost certainly not far enough. Maybe after the next global meltdown we'll finally do the job right.

DC Ticker on ABC News: Lieberman, Buy; McCain, Sell.

| Tue Dec. 21, 2010 12:08 PM EST

I've previously explained the DC Ticker I compile most days, which is now being featured weekly on ABC News' website show, Political Punch, hosted by Jake Tapper. Here are the picks featured on the latest PP:

* Joe Lieberman, buy — As a leading proponent for repealing Don't Ask/Don't Tell, the senator whom progressives love to hate scored a major progressive victory. Time to kiss and make up?

John McCain, sell — It's one thing to be a cranky flip-flopper who wins a political battle; it's quite another to be a cranky flip-flopper who loses. The repeal of Don't Ask/Don't Tell showed the limitations of McCain's curmudgeonly influence.

* Jon Kyl, sell — The White House appears confident it will win ratification of the START treaty--and that's only possible by rolling Kyl.

Pete Rouse, buy — Does it seem the White House is running a little smoother these days? Or is it just the eggnog?

You can receive the almost-daily DC Ticker report by following my Twitter feed. (#DCticker is the Twitter hashtag.) Please feel free to argue with my selections—though all decisions of the judges are final. And please feel free to make suggestions for buy or sell orders in the comments below or on Twitter (by replying to @DavidCornDC).

DC Ticker is merely an advisory service. It and its author cannot be held liable for any investments made in politicians, policy wonks,or government officials on the basis of the information presented. Invest in politics at your own risk.

A Stealth Attack on Financial Reform?

| Tue Dec. 21, 2010 11:52 AM EST

The campaign to kneecap the Dodd-Frank financial reform bill just keeps gaining steam. First, it was Rep. Spencer Bachus (R-Ala.), the incoming chairman of the House financial services committee, who pledged to repeal federal regulators' power to dismantle "too big to fail" banks, as spelled out in Dodd-Frank. Bachus also tried unsuccessfully to block the "Volcker Rule," which would limit banks' trading for their own benefit and investments in riskier hedge and private equity funds. The man Bachus beat to the run the financial services committee, Rep. Ed Royce (R-Calif.), a leading Republican on financial issues, has similarly attacked aspects of the legislation, seeking to chip away at the power of the new Bureau of Consumer Financial Protection.

In the Senate, both parties are now set to approve a measure that would drastically undercut Dodd-Frank. After Senate GOPers rejected a new omnibus spending bill that would fund the government through October, their Democratic counterparts offered what's called a "continuing resolution"—a short-term plan to keep government running through March. There's just one problem: That resolution doesn't include previously promised money for implementing Dodd-Frank.

As ThinkProgress points out, the Securities and Exchange Commission and the Commodity Futures Trading Commission were due to receive budget increases—from $1.1 billion to $1.3 billion and $169 million to $286 million, respectively—to handle the new workload from Dodd-Frank. But the short-term funding resolution doesn't include those increases, endangering the ability of both agencies to meet their regulatory mandates. In other words, it wounds a major piece of legislation not yet a year old. "The implementation of that good and historic law is in jeopardy if the CFTC doesn’t have increased resources," said Bart Chilton, a CFTC commissioner.

The continuing resolution has yet to be finalized, which means there's still time to boost the agencies' Dodd-Frank funding. If Congress fails to do so, three years' worth of hearings, negotiations, and back-room deal-brokering will go to waste.

Remember When Cap and Trade Was a GOP Idea?

| Tue Dec. 21, 2010 11:48 AM EST

It might have been hard to tell during the past few years, with Republican opponents branding all attempts to cut greenhouse gas emissions "cap and tax," but the idea of capping emmissions and trading emission permits was originally a GOP idea introduced to deal with acid rain. On Monday, the Environmental Protection Agency released a report celebrating the 15-year-old program to curb acid rain as an environmental (and economic) success.

The program aims to cut emissions of the two compounds that cause acid rain, sulfur dioxide and nitrogen oxide, and was endorsed by President George H.W. Bush and approved in 1990 as an amendment to the Clean Air Act. The program actually began in 1995. Since then, the American industrial sector has slashed sulfur dioxide pollution 64 percent. Moreover, the EPA reports, the program has saved $120 billion in public health costs, which is about 40 times what it cost to implement the program. The EPA concludes that the program's success in cutting fine particle pollution has saved 20,000 to 50,000 lives per year.

Like the cap and trade system proposed for dealing with an even bigger emission problem, greenhouse gases, the program set a hard limit on emissions and then provided polluters with "allowances" for how much they could emit. Companies were able to trade permits between themselves to meet their needs, a program designed to keep costs lower for industry while achieving the overall reduction goals.

"The program's success has demonstrated that market-based trading systems can cost-effectively reduce pollution and address environmental damage," the EPA concludes in the report.

For more on the political history of cap and trade, see this Smithsonian Magazine piece and this Foreign Policy piece. This is, of course, something to remember as we listen to Republicans attack cap and trade and even the very idea of controls on pollution.

Advertise on MotherJones.com

Harry Reid Goes SNL

| Tue Dec. 21, 2010 11:15 AM EST

The latest email from Senate Democrats about the New START treaty is a doozy:

Busy Beavers Building, Part 2

| Tue Dec. 21, 2010 8:48 AM EST

This post courtesy BBC Earth. For more wildlife news, find BBC Earth on Facebook and Posterous.

After laboring for weeks on end, pushing themselves to their physical limits, the time has now come for the beavers to reap the rewards of their hard work. Not only can signs of the beaver species hard work be seen in the successful colonisation of vast areas including that of the Taiga and Tundra in far North America, but also in their genetic make-up. Beavers teeth have evolved to endure the tough grind needed to prepare for this time of year. For instance, beaver teeth have such sharp edges they were once used as knife blades by Native Americans. In fact, beaver’s front teeth do not stop growing. Which is especially useful as being particularly prolific builders means their most important wood-cutting tool never degenerates or goes blunt!
 
We return to the beaver family in the thick of winter. The lush vegetation, mud and stone are now frozen solid and we see exactly how the beavers hydro-engineering and science of preparation have paid off.

More Child Brides, Please

| Tue Dec. 21, 2010 7:00 AM EST

Rep. Ileana Ros-Lehtinen (R-Fla.) has yet to assume the gavel of the House Foreign Affairs Committee. But in these waning days of the 111th congress, she's wasting no time hacking away at this country's credibility as a champion of basic human decency. Her most recent masterpiece: killing a bill that commits the country to combating forced child marriages abroad, and directs the Obama administration to develop a multi-year strategy to address the issue. Ros-Lehtinen's objections? That it's too expensive, and could be used to promote abortions.

Under normal procedure, the 241 votes the bill received on Thursday would've been enough to win its passage. But thanks to a rule (designed to expedite legislation by disallowing additional changes) invoked by House Speaker Nancy Pelosi (D-Calif.) the bill needed a two-thirds majority—or 290 yeas—to pass, a vote count that supporters of the bill from both parties still expected to meet easily. After all, its Dick-Durbin-penned cousin in the Senate passed unanimously.

Ros-Lehtinen tried to thwart the bill by raising concerns over its five-year, $108 million price tag. But once she failed, it should have been smooth sailing. Foreign Policy's Josh Rogin breaks down what happened next:

[A]bout one hour before the vote, every Republican House office received a message on the bill from GOP leadership, known as a Whip Alert, saying that leadership would vote "no" on the bill and encouraging all Republicans do the same. The last line on the alert particularly shocked the bill's supporters.

"There are also concerns that funding will be directed to NGOs that promote and perform abortion and efforts to combat child marriage could be usurped as a way to overturn pro-life laws," the alert read.

But the bill doesn’t even include any abortion-related funding. Still, Ros-Lehtinen's blast was enough to scare off any remaining pro-lifers who hadn't been sufficiently freaked out by her warnings about its cost.

Ros-Lehtinen's efforts to thwart this bill show that she wants to do as much as she can, as early as she can, to frustrate plans to improve the mechanics of diplomacy. In what should have been a win for bipartisan decency, scare tactics won the day. Between Ros-Lehtinen's unwavering skepticism of global diplomacy, hard-line approach towards Iran and North Korea, and unabashed slamming of the State Department and foreign operations, it's becoming clear what sort of foreign policy course the GOP intends to chart over the next two years: one that dismisses the pursuit of humane objectives.

We're Still at War: Photo of the Day for December 21, 2010

Tue Dec. 21, 2010 6:30 AM EST

SANGIN, Afghanistan - A special forces company commander meets with village elders and 1st Kandak, 209th Afghan National Army Corps, counterparts to discuss military operations in the Sangin District area at an undisclosed forward operating base in Helmand Province April 13. Photo via US Army.