Administration

A member of the White House Economic Recovery Advisory Board indicated that an economic recovery is just around the corner.

Laura Tyson, an adviser to President Barack Obama, said "we may have hit stability, we may be in the beginning of an upturn" on Saturday. Tyson cited the latest jobs report in making her remarks.

Tyson also said that more stimulus funds would be injected into the economy in the coming months.

Nobel-prize winning economist Paul Krugman added that the jobs report showed "It's quite possible, though not certain, that retrospectively, we'll say that the recession ended in July or August, maybe September," said in a separate interview with Bloomberg News.

The U.S. Labor Department reported last week that job losses amounted to 247,000 in July, less than the 320,000 jobs that economists expected to disappear.

In June, 443,000 Americans joined the ranks of the unemployed. The unemployment rate fell to 9.4 in July from 9.5 percent in June, the first time the figure declined in 15 months.

Sen. Chuck Grassley (R-Iowa) will vote against the Supreme Court confirmation of Judge Sonia Sotomayor when the matter comes to a vote on Tuesday.

The Des Moines Register reported on Monday that Grassley believes the federal appeals court judge would engage in judicial activism while serving on the bench. The fifth-term senator expressed similar concerns about Justice David Souter, whom Sotomayor will replace on the Court should she be confirmed.

"And consequently, I don't want someone succeeding him who doesn't have a clear role of what the Supreme Court is," Grassley told the Register.

The Iowa Republican was previously thought to be a "swing vote," so to speak, on Sotomayor's confirmation vote.

Grassley joins Republican Senate Judiciary Committee members John Cornyn (Tex.), Orrin Hatch (Utah), Jeff Sessions (Ala.), and Jon Kyl (Ariz.) in opposing Sotomayor's confirmation. Grassley is the second-ranking member of the committee.

Grassley previously voted against Sotomayor for her appointment to the appellate court in 1998. But when asked about it May he did not seem to remember why.

President Obama formally announced an agreement with healthcare industry groups Monday under which national healthcare spending could be reduced by $2 trillion over 10 years.

"What's brought us all together today is a recognition that we can't continue down the same dangerous road we've been traveling for so many years; that costs are out of control; and that reform is not a luxury that can be postponed, but a necessity that cannot wait," Obama said.

The White House previewed the announcement Sunday and issued the letter from America's Health Insurance Plans, the American Medical Association, the Pharmaceutical Research and Manufacturers of America, the American Hospital Association, the Advanced Medical Technology Association and the Service Employees International Union outlining their plans on Monday.

- Jeffrey Young

Below is a transcript of the president's full speech:

Read more...

The wonkosphere is abuzz today with news that five healthcare industry groups and at least one major union will meet with Obama at the White House today to announce a new cost-savings initiative.

The plan aims to cut the rate of growth in healthcare costs by 1.5 percent each year for 10 years--a total of $2 trillion.

The stakeholders: Pharmaceutical Manufacturers of America (PhRMA); Advanced Medical Technology Association (AdvaMed); America's Health Insurance Plans (AHIP); the American Hospital Association (AHA); the American Medical Association (AMA); and the Service Employees International Union (SEIU).

What does this mean? All of the groups (except SEIU) have been major opponents of healthcare reform in recent years, and continue to oppose a public insurance plan to compete with private insurers.

Regardless, the consensus is that this is unequivocally good news for Obama's hopes of pushing through big, comprehensive healthcare reform this year.

TNR's Jonathan Cohn:

The mere sight of these groups standing shoulder-to-shoulder with Obama will give reform additional political momentum, driving an even bigger wedge between health industry groups and their erstwhile allies in the conservative movement--where dismay over the behavior of AHIP and other groups is becoming louder by the day.

The event will also give lawmakers in Congress political cover for proposing bolder changes to the payment and delivery systems--the kind that might make reform seem more affordable, at least in the eyes of the all-important Congressional Budget Office.

Marc Ambinder:

This is big -- and I'm not talking about the news. I'm talking about the dealmaking between unions, corporations, the health insurance companies and hospitals. And there all going to be at the White House tomorrow. What's the bottom line political significance of all of this: it means that the White House is gonna get health care reform, this year.

Paul Krugman:

The fact that the medical-industrial complex is trying to shape health care reform rather than block it is a tremendously good omen. It looks as if America may finally get what every other advanced country already has: a system that guarantees essential health care to all its citizens.

And serious cost control would change everything, not just for health care, but for America's fiscal future. As Mr. Orszag has emphasized, rising health care costs are the main reason long-run budget projections look so grim. Slow the rate at which those costs rise, and the future will look far brighter.

I still won't count my health care chickens until they're hatched. But this is some of the best policy news I've heard in a long time.

So there you have it. Politically, this is nothing but good news for the administration. It will be infinitely harder for Republicans to oppose a reform package when the major industry groups--these are the Harry and Louise people--are on board, at least in principle.

President Obama outlining $17 billion in budget cuts, this morning, calling for a new era of fiscal accountability as his administration fills out the details of his budget proposal.

"We can no longer afford to spend as if deficits do not matter and waste is not our problem," the President said, taking an implicit shot at his predecessor. "We can no longer afford to leave the hard choices for the next budget, the next administration--or the next generation."

Obama defended his cuts against Republican critics, who argue that $17 billion is just a drop in the bucket.

"That's a lot of money, even by Washington standards," Obama said.

The administration released the details of its budget today, outlining how much should be spent on specific programs. The full budget can be found here.

Obama pointed to a number of specific programs that will head to the chopping bock, including a Department of Education office in Paris, the National Literacy Institute, a new engine for the Joint Strike Fighter, and a long-range radio navigation system.

"This system once made a lot of sense, before there were satellites to help us navigate," the President said.

As Republican accuse the President of runaway spending, Obama replied that his administration will pare back on spending by the end of his first term.

"[B]y the end of my first term we will cut the deficit in half," he said. "Over the next decade we'll bring non-defense discretionary spending to its lowest level as a share of Gross Domestic Product since 1962."

Chrysler will not pay back either the original government bailout loan nor the funds the government provided to maintain operations during bankruptcy proceeding.

One of the company's financial "assumptions" in its bankruptcy filing is that the government will forgive both the original $4 billion loan from the Bush administration, the $300 million fee from the loan and the latest installment of $3.2 billion that the Obama administration provided to prop up the company during bankruptcy.

From CNN Money:

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money.

"While we do not expect a recovery of these funds, we are comfortable that in the totality of the arrangement, the Treasury and the American taxpayer are being fairly compensated," said the official.

Sen. John McCain (R-Ariz.) blasted President Obama's cap-and-trade proposal today, saying it represented a "irresponsible, ill-conceived and distorted version of a cap-and-trade system."

Under cap-and-trade, the government would establish an emissions ceiling that polluters can exceed only if they obtain allowances.

Obama favors auctioning off all of those allowances, while some Republicans and moderate Democrats think a portion should be given away initially to ease businesses' transition into the new system.

"The president's proposal of auctioning 100 percent of the carbon credits is bad economic policy that would cost businesses billions of dollars and allow for little-to-no transition into a low carbon system," McCain told the Reform Institute Forum today. "I am a supporter of a strong cap-and-trade system, but I will not and cannot align myself with a giant government slush fund that will further burden our businesses and consumers."

The legislation currently being discussed in the House does not dictate what portion of the allowances would be auctioned. Rep. Ed Markey (D-Mass.), a co-sponsor of the legislation, has said he believes at least some portion should be given away at first.

"Initially, at least, we have to set aside a certain amount of the carbon credits to ensure that the steel, the paper and other trade-sensitive, energy-intensive industries are not exploited in the near term by the Chinese and others in terms of them taking advantage of this increased cost," he told an MIT conference. "Right off the top, we cannot auction off all those credits."

President Obama did say during his campaign that all allowances under a cap-and-trade policy should be auctioned. But there are signs the administration is open to a compromise.

In an interview with the Washington Post, White House Science Adviser John Holdren hinted that an all-auction policy might not be feasible.

"The idea, obviously, is to end up with a bill that reflects both the thinking of Congress and the administration, a bill that the president can sign," Holdren said. He added that "whether you get to start with [100% auctions] or get there over a period of time is something that's being discussed."

Even environmentalists are flexible on the issue.

"It's not essential to us that there be 100% auctions from the start," said David Doniger, Policy Director of the Climate Center at the National Resources Defense Fund. "I think over time you want to get there."

President Obama's virtual townhall will be underway any minute now. You can watch it here. We'll be posting periodic updates on Obama's answers...

Warren Buffett said Monday morning that the Obama administration

Many breathed a sigh of relief when the Iraqi government approved a U.S. troop withdrawal pact last week, roughly validating the timeline set out by President-elect Barack Obama during the 2008 campaign, but a handful of anti-war representatives are maintaining their opposition to the pact.

A bill expressing disapproval of the deal was put forth yesterday by Rep. Barbara Lee (D-Calif.), who leads the House Progressive Caucus, along with five of her fellow caucus members and Rep. Ron Paul (R-Texas).

Lee and other anti-war Democrats have long opposed the negotiating process for the security pact, alleging that any deal would amount to a treaty, and that the Bush administration sought to circumvent Congress's constitutional authority to ratify it. The new bill levels that same charge at the newly approved agreement, which would see all U.S. troops withdraw from Iraq by the end of 20111.

Some opposition to the pact may have withered: