Money in the Morning


Liberal pundits are down on Dems’ decision to put off Bush tax cut votes until after the election.

“Political suicide,” says TNR’s Jonathan Chait. “Just one of the nuttiest decisions, on pure political grounds, I've ever seen.”

Paul Krugman says Dems are missing their chance to put the GOP on the spot over the middle-class tax cuts. “I guess the Blue Dogs really want to be in the minority,” he adds.

The tax cuts debate only gets harder for Dems after the election, argues TAPPED’s Tim Fernholz.

And/but... The move sets up the fate of the Bush tax cuts as a huge campaign issue, writes The Hill’s Alex Bolton and Russell Berman. “Liberal lawmakers in both chambers had pressed their leaders to schedule a vote on legislation that would make permanent the tax cuts for families earning below $250,000 but allow the rates for families above that threshold to rise... Centrists and Democrats facing tough reelections, however, balked at voting for any tax increases. Republicans have argued for an extension of all of the current tax rates, which became law during the Bush administration.”

The unresolved tax issues are leaving consumers and businesses unsure about how to plan for the future, says WSJ. The tax provisions that must be dealt with are the Bush income tax cuts, the Bush tax cuts on investment, the alternative minimum tax and the estate tax.


Conservative pundits didn’t sound excited about the House Republicans’ “Pledge to America” after GOP leaders rolled it out Thursday.

Club for Growth: “Milquetoast” pledge doesn’t take on entitlements or call for Constitutional amendments for a balanced budget or spending limits.

James Pethokoukis finds it to be a start, but not enough: “Sure, the Republicans don’t want to give Democrats fodder for negative advertising. But this manifesto could have begun making the public case for the GOP’s vision of the big budgetary changes America needs. That didn’t happen. America’s long-term economic and fiscal woes call for bolder leadership.”

But... ex-Speaker Gingrich likes the “very big, breakthrough idea” of calling for Congressional review of any new regulation that costs more than $100 million.

The non-partisan Committee for a Responsible Federal Budget says “Pledge” has some good ideas on spending, but would probably add to the deficit.

More on the “Pledge” rollout:

Boehner says GOP’s goal isn’t a government shutdown.

CHINA CURRENCY -- President Obama prodded China on the yuan Thursday, ahead of Friday’s House committee markup of a bill that would allow the Commerce to impose duties on Chinese goods.

NYT’s David E. Sanger (with a U.N. dateline): "President Obama increased pressure on China to immediately revalue its currency on Thursday, devoting most of a two-hour meeting with China’s prime minister to the issue and sending the message, according to one of his top aides, that if ‘the Chinese don’t take actions, we have other means of protecting U.S. interests.’ ... But Prime Minister Wen Jiabao barely budged beyond his familiar talking points about gradual 'reform' ..."

The Ways and Means Committee starts marking up the Currency Reform for Fair Trade Act at 9:30 a.m.


Former Xerox CEO Anne Mulcahy’s colleagues tout her for NEC director. Daily Beast:

HuffPo wants “No more Rubinites” on WH econ team.

Volcker has a favored candidate, but he’s not saying who it is. Real-Time Econ:

Volcker says he’s not worried about deflation. “We’re in a situation right now where we’ve got a sluggish economy, a lot of excess resources, a lot of unemployment,” he said. “This is not an atmosphere that’s inclined to produce inflation. I think we ought to be sure that we don’t take actions that down the road might lead to an inflationary situation.”

Elizabeth Warren, officially installed at the consumer protection bureau, finds banks are receptive to change. Reuters:

Econ indicators -- Data hints soft patch may be easing. Existing home sales and leading index are up.

But weekly jobless claims went up, sending markets lower.

And the data over the past few months shows the housing market is a "neutral force at best, and could drag down an already weak growth outlook," writes WaPo's Neil Irwin.