Money in the Morning


Despite much chatter about what House GOP Leader John Boehner said Sunday, any deal on the Bush-era tax cuts is going to be shaped by the Senate. Senate Republicans are showing a united front for extending all of the cuts, while Senate Democrats are trying to figure out where the 60 members of their conference are.

Sen. Jim Webb (D-Va.) added his voice Monday to those of Democratic centrists wary of letting tax rates for wealthy rise next year.

“I don’t think we ought to be drawing a distinction at $250K,” Webb told Fox News.

Four other Dems -- Kent Conrad, Ben Nelson, Evan Bayh and Joe Lieberman -- have called for temporary extensions of all the cuts.

Democratic leadership still plans to roll out their tax cut legislation this week, but it’s not clear what they plan to do with the upper-income cuts. The Hill:

Expect more news around 2 p.m. Tuesday, when Democratic and GOP senators emerge from the first conference policy lunches since recess.

On the GOP side, Mitch McConnell has already unveiled his plan: make all of them permanent.

Reuters hed: “Senate Republicans Firm on Tax Cuts for the Rich": “Prospects faded for breaking the deadlock when Republicans gave a cool reception to a signal on Sunday by John Boehner, their party's leader in the House of Representatives, that he might be willing to bend.”

With Senate GOP centrists largely behind McConnell’s approach, President Obama and Democrats are trying to seize on differences between House and Senate Republicans. Obama on Monday in Virginia urged Congress to act on his plan to extend only the middle-class cuts: “We could get that done this week... But we’re still in this wrestling match with John Boehner and Mitch McConnell.” NYT:

Once you get past the partisan wrangling, one thing's clear: the deficit will grow. Ezra Klein:

Bush administration economist Alan D. Viard argued that the upper-income cuts weren’t sold the right way. Supporters should have touted their investment effects and not just pushed them as stimulus.

But TNR’s Jonathan Cohn says that the Bush administration lied to get the tax cuts for the rich passed, attaching them to middle-class cuts.


Mark Zandi, the economic guru that frequently consults with Dems on the Hill, is pushing a new jobs plan: $50 billion for an expanded hiring tax credit and federal insurance for businesses that invest in infrastructure projects.

But... President Obama already signed a hiring tax credit this year and he has his own infrastructure bank plan.

Warren Buffett says he’s a “huge bull”: “We are not going to have a double-dip recession at all.” AP:

Fed Chairman Bernanke’s 2011 outlook may have outsized influence on other Fed officials as they decide whether to buy up more Treasury notes to boost the economy. Bloomberg:

Business groups such as the Business Roundtable and NFIB are lining up against the president’s latest job-creation package, even it’s mostly tax breaks for small biz: WSJ:

David Brooks breaks with Rep. Paul Ryan (R-Wis.) and AEI’s Arthur Brooks on the idea that America is all about limited government. The story the GOP should be pushing is that it’s “limited-but-energetic” government, Brooks says.

Krugman pushback... Stephen Williamson, economist at Washington U. in St. Louis, asks if the NYT columnist’s Nobel Prize can be revoked. Williamson takes issue with Krugman’s Monday column attacking China’s exchange rate policy.

The Economist’s Free Exchange blog says Krugman is making straw man arguments.


Elizabeth Warren, the left’s candidate to head the new consumer protection bureau, may get a temporary appointment from the president. NYT: “Two people who have been briefed on the appointment process, who spoke on condition of anonymity because they feared reprisal, said the White House was exploring ways to have Ms. Warren effectively run the bureau without having to endure a confirmation battle and, potentially, the threat of a Republican filibuster.” NYT:

The Basel international finreg agreement calling for more bank equity standards is a win. Felix Salmon:

AIG is trying to get out from under bailout requirements.

... while smaller banks are having trouble making their TARP repayments.