News Nuggets 706

Quite the image of a stag beetle in the Gunung Leuser National Park in Sumatra.  From National Geographic.

UP-FRONT DEBT CEILING NUGGET!!
How a Debt Downgrade May Affect Consumers from the New York Times
This article clears up a lot of rumors surrounding default.  The really bad news is deep in the article.
"Shortly after a downgrade, he said, he would expect interest rates to spike a bit, though he said he did not expect rates on fixed-rate mortgages to rise more than half a percentage point to a full percentage point, at most. ... The interest rates on most private student loans are pegged to the London Interbank Offered Rate, or Libor, which is influenced by Treasury yields. So if the yields on government securities rise, student loan rates could rise as well, said Mark Kantrowitz, publisher of the FinAid and Fastweb Web sites."

U.S. Rating Rests On S&P’s View of Washington from Bloomberg News Service
"Critics say the company is misreading the political dynamics in Washington and that it shouldn’t engage in political prognosticating at all. “If we fail to increase the debt ceiling, they have every right to take the U.S. down as many notches as they want,” said Jared Bernstein, former economic adviser to Vice President Joe Biden. “I don’t look to S&P for political analysis” and “their job is not to try to do political crystal-ball gazing. Their job is to assess the reliability of U.S. debt.”"

House Democratic Leaders To Obama: Use The 14th Amendment from the Huffington Post
"House Democratic leaders emerged from a Wednesday Caucus meeting with a message for President Barack Obama: Invoke the Constitution to resolve the debt standoff."
Our top-of-the-line story tells you why this may be a really bad idea -- at least if you are the president. Here's the problem with invoking the 14th.  It does nothing to address the concerns of the jerks at S&P and the other credit agencies.  Without SOMETHING that looks like deficit reduction, they will almost certainly downgrade the US's AAA rating, causing an economic upheaval -- even without default -- and Obama would get **100% of the blame** for that economic downturn.  He would have no cover whatsoever.  In my view, S&P has been acting as something of a political wingman for the GOP against any deal that didn't include major deficit reduction.

Obama and the Dems (and many in the GOP I suspect) want to send the credit agencies a warning about political meddling.  Look no further than:
Credit Rating Agency Executives To Testify Before Congress from Reuters via Huffington Post
"Executives from rating agencies Standard & Poor's and Moody's Investors Service are scheduled to testify on Wednesday on attempts to reform the credit rating industry and the role it is playing in the U.S. debt ceiling debate."
Congress's message to credit agencies: 'You mess with us - believe it, we WILL mess with you!"

More here:
Debt Police Go Rogue (Zachary Karabell) from the Daily Beast
"How did a bunch of unelected corporate suits get the power to wreck the global economy? Zachary Karabell on the real bogeymen of the debt debacle: unaccountable ratings agencies."

Boehner’s Debt Plan Rewrite Faces Test In Thursday Vote from Talking Points Memo
"The new Boehner bill will cut the deficit $917 billion over ten years and raises the debt limit $900 billion, a net cost savings of $17 billion, according to a Congressional Budget Office analysis. In the next year along, fiscal year 2012, the bill would cut $22 billion in spending."
Interesting -- I don't get that the S&P will be even remotely jazzed by this plan and, I suspect, neither will a sizable number of hard-right lawmakers.  All these WEEKS of hand-wringing angst and political blood-letting -- and FOR WHAT?  $22 billion in savings next year!?  THIS is what the GOP is going to run on next year as the big deficit-reduction concession they wrought out of big bad Obama and those big-spending Dems!?

GOP Coalition Splinters Into Open Conflict Over Debt Ceiling from Talking Points Memo
"The Republican leadership's efforts to avert a debt ceiling crisis with a two-tiered set of cuts is turning into the most divisive wedge issue the party has confronted since President Obama took over in 2009. ... their Tea Party colleagues are leading a rebellion of epic - perhaps even galactic - proportions. Cue the John Williams music and find out who stands where in this stand-off between the Establishment's storm-troopers and the Rebel Alliance."

GOP's Circular Firing Squad (Howard Kurtz) from the Daily Beast
"If the Republican Party isn’t having a collective nervous breakdown about the impending default deadline, it’s doing a pretty good imitation. The level of finger-pointing within the conservative movement is getting uglier by the moment."

A Republican Caucus Fleeing Its House Speaker? (Jim Gallway) of the Atlanta Journal Constitution
Quoting from former congressman Buddy Darden (D-GA): “The responsibility of being the ruling party, or the party in charge, is that you’re responsible for a positive outcome. This, in my mind, is unprecedented – that the speaker can’t get a majority of his own caucus to step up. There are enough Democratic votes if he can get a majority of his own caucus to pass it. “But personally, it looks to me like [House Majority Leader Eric] Cantor is undermining the speaker….The speaker has apparently lost control of his caucus – which I’ve never seen.”"
WHO CALLED IT!?  I thought I saw the tip of Cantor's sword protruding from Boaehner's lapel yesterday!

Tea Party Takes On Boehner (Patricia Murphy) from the Daily Beast
"Republican lawmakers who vote for the speaker’s debt-ceiling measure will face Tea Party retribution at the polls next year, movement leader Mark Meckler tells Patricia Murphy."

The 'Big Headache': Boehner Backed Into Corner by Tea Party, Obama (Ed Hornick from CNN
"House Speaker John Boehner is in a tough position: between a rock and a hard place, wedged squarely into a corner. ... he has the small but powerful tea party freshman class in the House, many of whom are unapologetic in their desire not to give an inch on tax increases and are quite willing to push the negotiations to -- and possibly over -- the edge."

Boehner Bill Dividing GOP Groups (Reid Wilson) from the National Journal
"House Speaker John Boehner's proposal to raise the debt ceiling by $1 trillion in exchange for $1.2 trillion in cuts has achieved what Democrats have spent months trying to do: It has divided Republican interest groups that have so far stood united."

So Long, Speaker Boehner? (David Morris) from the Kiplinger Letter
"With tea partiers reluctant to negotiate, he has only bad choices as the default deadline looms."

GOPers chant 'fire him' at RSC Staffer Caught Blatantly Undercutting Speaker from Politico
"House Republicans 0n Wednesday morning were calling for the firing of Republican Study Committee staffers after they were caught sending e-mails to conservative groups urging them to pressure GOP lawmakers to vote against a debt proposal from Speaker John Boehner (R-Ohio). Infuriated by the e-mails from Paul Teller, the executive director of the RSC, and other staffers, members started chanting “Fire him, fire him!” while Teller stood silently at a closed-door meetings of House Republicans. “It was an unbelievable moment,” said one GOP insider. “I’ve never seen anything like it. ... House Republicans were particularly peeved that the RSC was targeting some of its own dues-paying members.”
IN-credible! WHAT A NEST OF VIPERS!

More evidence:
Boehner Plan Causes Conservative Blogs to War from Politico
"While Capitol Hill Republicans choose sides on House Speaker John Boehner’s debt ceiling plan, the sniping in the conservative blogosphere has degenerated into an online civil war."

Boehner Is Gang of One Trapped by Politics (Margaret Carlson) from Bloomberg News Service
"Over the last year, Boehner and Obama have developed a working rapport, if not a friendship. Obama understands what Boehner is up against. Blessed with the luxury of leading a mostly sane party, Obama has more leeway than Boehner to reach consensus. ... Deep down, Boehner has more in common with Obama than with the extremists in his own caucus."

After Aiding Republicans, Business Groups Press Them on Debt Ceiling from the New York Times
"The U.S. Chamber of Commerce, which spent millions of dollars last year helping elect Republicans to Congressional seats, is struggling to convince the House it helped to build that the debt ceiling must be increased. ... But as the government runs out of money, those efforts have not produced the desired result. The freshman class of House Republicans, along with longer-serving members, is balking at Mr. Boehner’s plan, let alone anything that Senate Democrats and the White House might be willing to accept. The tension highlights the distance between the pro-business stalwarts of the traditional Republican Party and the populism of its newer representatives, many of whom seem to view Wall Street and Washington with equal suspicion."
BOY, the irony here is too rich not to miss!  To make Gov't more subservient to big business, the Chamber threw millions at Tea Party candidates -- the SAME people who are now ushering the US and it's vaunted capitalist system off the economic cliff.  Thank you SO MUCH C of C!!

The GOP's Reality Test from the Editorial Board of the Wall Street Journal
"The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor."
The mocking tone of the WSJ towards the tea partiers here is pretty hilarious!

Obama Faring Better Among Dem Voters Than Every Democratic President Since Truman: Gallup (Sam Stein) from Huffington Post
"President Obama currently enjoys a higher popularity among Democratic voters than every Democratic president dating back to Harry Truman had at similar junctures in their presidencies."

On Social Security and the Budget, Raising Medicare Age Won't Save Money (Theodore R. Marmor) from the Philadelphia Inquirer
"The Kaiser study estimates that 65- and 66-year-olds would spend another $5.6 billion a year, while employers would spend another $4.5 billion. That's spending $10.1 billion to save $7.6 billion."

Voters Still Blame Bush For Economy, Poll Says from the National Journal
"When asked whether the policies of President Obama and the Democrats or Bush and the Republicans are more responsible for the country's current economic problems, 57 percent said Bush and the Republicans are more responsible, according to the CNN/ORC poll, while just 29 percent said Obama and the Democrats are more responsible. 10 percent said both are responsible while three percent indicated they find neither to be culpable."

The Cult That Is Destroying America (Paul Krugman) from the New York Times
"Watching our system deal with the debt ceiling crisis — a wholly self-inflicted crisis, which may nonetheless have disastrous consequences — it’s increasingly obvious that what we’re looking at is the destructive influence of a cult that has really poisoned our political system."

Generation of Young Women are Putting Off Motherhood due to Money Worries from the Daily Mail [of the UK]
"A generation of young women are delaying having  children because they cannot afford a family, according to a report yesterday. More than four out of ten working women in their 20s intend to put off having children because of ‘financial worries’."
This was exactly the pattern in the US during the Great Depression.

As Democrats Seize Advantage in Wisconsin Recalls, Right-wing Money Pours in (Chris Bowers) from the Daily Kos
"With the release of new Daily Kos polling earlier today, it's no longer accurate to call the Wisconsin recall elections a toss-up. Democrats now have the advantage."

Some journalistic malfeasance here:
Not Leveling with Viewers (Josh Marshall) from Talking Points Memo
"The top headline running now on CNN reads: "They're all talking, but no one is compromising, at least publicly. Democratic and GOP leaders appear unwilling to bend on proposals to raise the debt ceiling." By any reasonable measure, this is simply false, even painfully so."

AUTO INSURANCE NIGHTMARE NUGGET!!
That's One Expensive Car Crash! from the Daily Mail [of the UK]
"She scraped her £250,000 Bentley Azure down the side of a £75,000 Mercedes S Class.  Her 2.7 tonne beast then crashed into a £140,000 black Ferrari F430, before going head on into an £80,000 Porsche 911 and a £140,000 Aston Martin Rapide."

EDUCATION NUGGET [of a sort]!!
For-Profit College Chain In Kentucky Accused Of Cheating Students Out Of Financial Aid from Huffington Post
"The Kentucky Attorney General filed suit Wednesday against a chain of for-profit colleges in the state, claiming that administrators at Daymar Colleges have consistently deceived students by making false promises about the ability to transfer course credits and have forced them to purchase textbooks and supplies at substantially marked-up rates."
So many of these for-profit schools are such BAD NEWS!!  Lawmakers and the feds need to start going AFTER these people!