File destruction scandal highlights Obama's failure to regulate Wall Street

Senator Chuck Grassley made news last week by publicizing a whistleblower’s claims about widespread file destruction at the Securities and Exchange Commission. Thousands of preliminary investigation files no longer exist, which hampers the SEC’s ability to identify and prosecute financial crimes. The alleged practice goes back nearly two decades, despite a federal law that grants the National Archives and Records Administration authority over preserving government files.

President Barack Obama didn’t create this problem, but his cozy relationship with Wall Street helped keep law-breaking alive at the SEC.

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Senate passes, Obama signs short-term FAA extension

While in pro-forma session for 59 seconds today, Senate Democrats passed a six-week extension of the Federal Aviation Administration’s authorization. Since the bill had already passed the U.S. House, it went straight to President Barack Obama. He signed it right away, ending the partial shutdown of the FAA that began on July 22. Furloughed FAA employees can go back to work, and airport construction projects put on hold can resume.

The short-term extension contains some cuts to the Essential Air Service program subsidizing service to small airports (including three in Iowa). House Republicans want to phase out that program, while most Democrats want to preserve it. The bill passed today does not include Republican-backed language that would make it more difficult for airline workers to join a union.

LATE UPDATE: The FAA shutdown delayed planned upgrades at the Southeast Iowa Regional Airport in Burlington, possibly until after the winter.

Senate approves debt ceiling deal; Harkin and Grassley vote no

The U.S. Senate approved the last-minute deal to raise the debt ceiling today by a vote of 74 to 26 (roll call). Iowa’s senators voted no for very different reasons. Democrat Tom Harkin reject the deal he called "a clear and present danger to the fragile, indeed faltering, economic recovery." Republican Chuck Grassley said the plan "delays meaningful spending reductions, fails to address entitlement spending in a way that will save the programs for future generations of retirees, and leaves open the possibility of tax increases." The complete statements from by Harkin and Grassley are after the jump.

Yesterday all five Iowans in the U.S. House voted against the debt deal as well. To my knowledge, no other state’s entire Congressional delegation rejected this national embarrassment.

After hailing passage of an austerity plan that will deeply cut domestic spending, President Barack Obama said today, “We’ve got to do everything in our power to grow this economy and put America back to work.” He missed that chance.

LATE UPDATE: Richard Kogan posted a helpful summary on “How the Potential Across-the-Board Cuts in the Debt Limit Deal Would Occur.”

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New thread on the debt ceiling sellout

President Barack Obama and Congressional leaders announced a deal on raising the debt ceiling in exchange for at least $2 trillion in domestic spending cuts. The agreement is complicated in many respects, but the gist is that Republicans will get almost everything they have demanded throughout this process (if they are smart enough to accept total victory).

After the jump I’ve posted the ludicrous White House talking points on why this deal is “a win for the economy and budget discipline.” They brag about putting the U.S. “on track to reduce non-defense discretionary spending to its lowest level since Dwight Eisenhower was President,” as if that’s a good thing. No economist would endorse big domestic spending cuts, given the current state of the economy. The deal calls for many of those cuts to happen in 2013 or later, but unemployment is not going down in any significant way before 2013—more likely, it will increase. Some Democrats claim the president will hold the line on extending the Bush tax cuts in late 2012, but that is a sick joke. Obama has no credibility on these issues. Only two weeks ago he said he would reject a $2.4 trillion spending cut plan that did not include any tax increases. Look where he is now, serving up a “sugar-coated Satan sandwich” and thanking Republican leaders for doing their part.

House Speaker John Boehner is trying to sell the deal to the House Republican caucus with this slide show (pdf file). House Minority Leader Nancy Pelosi hasn’t committed to supporting the deal, but I assume a significant number of House Democrats will be stupid enough to go along. Any Democrat who votes for this deal deserves to lose.

I will update this post with comments from the Iowans in Congress as those become available. Recent statements from most of the Iowa delegation are here, along with details on how our representatives in the U.S. House and Senate voted on the debt ceiling proposals offered since Friday.

UPDATE: The deal passed the House easily on August 1, but all of Iowa’s representatives voted against it.

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All Iowans vote no, but House passes Boehner debt plan (updated)

The U.S. House on Friday evening approved Speaker John Boehner’s latest bill to sharply cut federal spending as a condition for raising the debt ceiling. The bill barely passed by a 218 to 210 vote (roll call). Every House Democrat present voted no, including Bruce Braley (IA-01), Dave Loebsack (IA-02), and Leonard Boswell (IA-03). The big surprise for me was that both Tom Latham (IA-04) and Steve King (IA-05) were among the 22 Republicans who voted against the bill. I expected King to oppose the measure, because many of his Tea Party Caucus colleagues believe Boehner isn’t cutting enough spending. But Latham is one of the speaker’s closest friends, and I thought he would be one of the votes putting the bill over the top. It was a tremendous struggle for Boehner to line up enough support for this bill; he had to delay Thursday’s scheduled vote in order to rewrite some provisions today.

Sometimes in situations like these, the House speaker gives some members in the majority caucus permission to vote no, if they are in tough districts. Latham will face Boswell in the new third Congressional district next year, and some of the spending cuts in this bill would affect popular programs. It’s possible Latham voted no with Boehner’s consent, once the speaker knew he had 218 yes votes lined up. That insulates Latham against some potential attack ads. However, Latham was on WHO radio this afternoon saying something must be done to ensure that the government pays its bills. If he acknowledges the need to raise the debt ceiling, when does he think a better deal will come around than Boehner’s bill?

Incidentally, House leaders don’t seem inclined to move on Latham’s bill to prioritize certain types of spending in case no debt ceiling deal is reached.

The U.S. Senate is expected to table the latest House bill on the debt ceiling later Friday evening. Senate Majority Leader Harry Reid has been working on a new “compromise” that is depressingly similar to what Boehner proposed, so Congress is probably headed toward a total Republican victory—big spending cuts, no revenue increases. Notably, if the U.S. ever does pull out of Iraq and Afghanistan, all the savings would go toward deficit reduction, rather than investing in our own infrastructure or social programs. Never mind that the U.S. economy is sputtering and will probably go back into recession under fiscal austerity. That serves Republican political interests as well, because President Barack Obama will be blamed for the downward spiral. Obama’s approval rating on the economy is already low, and most Americans think job creation is more important than deficit reduction right now.

For some reason, Obama prefers this outcome to Senator Tom Harkin’s advice: raise the debt ceiling by invoking the 14th Amendment to the U.S. Constitution.

UPDATE: On Friday night six Senate Republicans voted with all 53 members of the Democratic caucus to table the motion on concurring with Boehner’s bill (roll call). Grassley was among the 41 Republicans who opposed the motion to table.

Statements released by Latham, King, Loebsack and Braley are now after the jump.

SATURDAY UPDATE: The House rejected Senate Majority Leader Harry Reid’s bill on July 30; it was a symbolic vote because Reid is still revising the proposal, which so far doesn’t have enough support to overcome a Republican filibuster in the Senate.

Most House Democrats voted for the Reid bill, including Boswell. However, Braley and Loebsack were among the 11 Democrats who voted with all Republicans present against that bill (roll call). I am seeking comment from Braley and Loebsack offices on why they voted against the Reid proposal. It’s worth noting that like Boehner’s bill, Reid’s plan would cut more than $2 trillion in spending over the next decade, with no revenue increases. A total disgrace.

UPDATE: Loebsack released this statement about Saturday’s vote: “We must get Iowa’s economy moving forward.  Today’s vote was not about a solution, it was about political leverage in Washington.”

FURTHER UPDATE: Here’s Harkin speaking on July 30:

“I’m talking about that there’s precedents for presidents to do things where the Constitution doesn’t give the president explicit authority but it doesn’t prohibit the president from doing it, and I believe there’s a basis in the 14th amendment as decided in Perry v. United States,” Sen Tom Harkin (D-IA) said on the Senate floor. “I think the president – barring action from the Congress – not only has the authority to do so, he has the responsibility to not let this country default.”

SUNDAY UPDATE: Senate Majority Leader Reid called a cloture motion on his horrendous compromise proposal Sunday afternoon. It needed 60 votes to pass but only received 50, mostly from Democrats (roll call). I don’t understand Harkin voting for cloture here, when the bill has none of the balance he has advocated. Maybe he planned to vote against the bill itself later—who knows? Grassley voted against cloture, as did every Republican present besides Scott Brown. I’ve added Grassley’s statement below.

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Senate tables "Cut, Cap, and Balance" on party-line vote

The U.S. Senate voted down the Cut, Cap, and Balance Act of 2011 today, three days after the House approved that Republican budget-cutting plan. All members of the Democratic caucus present, including Iowa’s Tom Harkin, voted for a motion to table the motion to proceed with considering the bill (roll call). All Senate Republicans present, including Iowa’s Chuck Grassley, voted against the motion to table. Tabling the bill in effect kills it for this session of Congress.

After the jump I’ve posted the floor statement Grassley submitted yesterday in support of the Cut, Cap, and Balance Act. He argued that raising taxes would neither increase federal government revenues nor reduce the federal deficit. He described Cut, Cap, and Balance as “the only plan that has been put forth to address our deficit and debt problem” and claimed it would “impose budget caps to get our spending down to a manageable level compared to our gross domestic product.” This piece by Michael Linden and Michael Ettlinger points out that the “last time federal spending dipped below 18 percent of GDP was 1966.” Click through for a chart showing how severe spending cuts would have to be to bring fiscal year 2016 spending down to 18 percent of GDP. Robert Greenstein of the Center on Budget and Policy Priorities described this bill as “one of the most ideologically extreme pieces of major budget legislation to come before Congress in years, if not decades.”

I’ve also posted below Harkin’s floor statement opposing Cut, Cap, and Balance. He reminded colleagues that President Ronald Reagan warned Congress against refusing to raise the debt ceiling, and that Reagan supported “corrective income tax increases in 1982 and 1984” when he realized that “his 1981 tax cuts were resulting in large deficits.” Harkin also claimed the Republican bill would defund Medicare by putting “the federal government in a fiscal straightjacket, allowed to spend no more than in the mid-1960s, before Medicare.”

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