Morning Must Reads — Blue Christmas

David Broder – A health-care victory that stinks

The health bill approved by the Senate this morning should make Broder a very happy man. It addresses the unfulfilled portion of the New Deal and came amid high political drama, but the dean’s joy is tinged with anxiety.

While he has blame for Republicans for being hysterical about the legislation, he gives President Obama an upbraiding for divorcing himself from the process and thrashes Harry Reid for constructing the bill in venal fashion.

Broder suggests – and the White House seems to agree – that Obama must exert himself more in the process as the House bill, a fiscal nightmare, and the Senate bill, a shoddy compromise, are merged into one plan before a final vote.

Obama’s great strength in compromises is symbolism – think Copenhagen or the beer summit. But the White House says that the president is going to get down and dirty on the health bill, and not just remind members that they owe it to history to do the right thing.

And, in fact, by Obama’s reckoning, they’ve done the right thing – passing massive legislation in a public opinion headwind and at a time when many other more pressing concerns vied for their attentions.

But in part because of Obama’s laissez-faire legislative approach, the raw materials from which he must fashion the final version of his temple are poorly made and tainted by an unworthy process. Getting voters to believe that this plan is good news may be an impossible task.

“There's blame enough to go around. Start with the 40 Republicans, not one of whom was willing to break out of the mold of negative conformity and offer a sustained working partnership in serious legislative effort.

But even those Republicans who were initially inclined to do that — and there were at least a handful of them — were turned away by the White House and the Senate Democratic leaders, who never lifted their sights much beyond the Democratic ranks.

Forced to bargain for every vote among the 60 in his caucus, Senate Majority Leader Harry Reid did what he usually does: He reduced the negotiations to his own level of transactional morality. Incapable of summoning his colleagues to statesmanship, he made the deals look as crass and parochial as many of them were — encasing a historic achievement in a wrapping of payoff and patronage.”


Wall Street Journal — Firms Warn of Cuts to Benefits


Writer Neil King looks at how a Senate health plan to end a corporate tax break on retiree prescription drug benefits might result in millions of seniors getting booted into government drug programs. Rather than generating $5.4 billion, the plan might cost taxpayers much more through handouts and decreased taxable earnings for companies.

“Under the 2003 law that created a prescription-drug benefit known as Medicare Part D, companies that continued to provide such benefits on their own qualified for a 28% tax-free subsidy — worth about $600 a year per retiree. Hundreds of major companies took advantage of the provision and were able to list the subsidy on their balance sheets as a reduction to their retiree health liability.

But the Senate bill would tax the subsidy, dramatically increasing companies' tax liability for years. Under U.S. accounting rules, companies would be required to register the change as a loss in earnings — all at once.”


USA Today — South sees new pull via Census


The last numbers before the 2010 Census are out, and it’s bad news for the northeast and, short-term at least, for Democrats.

If the numbers next year hold steady, you’d see three more congressional seats (and electoral votes) for Texas, and one each for Arizona, Florida, Georgia, Nevada, South Carolina, Utah and Washington. Losers would include Ohio, Illinois, Iowa, Louisiana (Katrina), Massachusetts, Michigan, New Jersey, New York and Pennsylvania.

President Obama would have won 353 instead of 365 electoral votes last year if the map were so arranged.

The growing populations in the South may make the states less conservative as new immigrants and Yankees flock to expanding cities and suburbs. But it certainly means that the Democratic power base in the Northeast and California will not continue to cut it, especially since 2008’s results in the Mountain West and plains look increasingly aberrant. The graphics package shows the trends in very sharp relief.

Writer John Fritze explains:

“The 2010 Census data, which will be released in early 2011, will represent the first step in an often bitter process of redrawing the boundaries of congressional and legislative districts. State lawmakers redraw the maps in most states, a function that has raised the stakes for the 2010 legislative elections.

Redistricting fights already are shaping up in such states as California, where Democrats control the Legislature. If the trends hold, California would not gain any new House members — the first time that has been the case since 1920.”


New York Times — Banks Bundled Bad Debt, Bet Against It and Won

While the bright boys at Goldman Sachs were convincing the rest of us to embrace the profits and predictability of mortgage-backed securities, the firm was laying huge wagers on the implosion of the mortgage market.

Whether this was a hedge or a scam is the subject of a current SEC probe, but for Goldman, it turns out that there was no need to hedge.

By keeping their alumni in positions of power in regulatory power on Washington, the firm made sure that there was a quick, no-interest loan available when the housing market actually exploded. Rather then trimming their sails, the firm was able to use taxpayer dollars to snatch up competitors laid low by the crisis it helped create.

Writers Gretchen Morgenson and Louise Story share with us this shot of holiday cheer.

“‘The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,’ said Sylvain R. Raynes, an expert in structured finance at R & R Consulting in New York. ‘When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.’”

Wall Street Journal — Senate Agrees to Vote on Proposal to Halt EPA's CO2 Action

In exchange for not forcing Democrats to stay late tonight to vote on health care, Republicans won a floor vote next year on the EPAs move to regulate that quotidian compound, carbon dioxide, as a menace to human health because of global warming.

Republicans might actually be able to take the global warming gun out of the administration’s hand by swinging enough Democrats to their side and at the very least force several uncomfortable votes for carbon-state lawmakers.

Writer Ian Talley has the details.

“Senator Lisa Murkowski (R., Alaska), the ranking member of the Energy and Natural Resources Committee and chief sponsor of the amendment, has said a number of colleagues across the aisle have already expressed support for her proposal.

If the amendment passed, it may also be a relief to the EPA, now that Congress is increasingly unlikely to pass a climate bill next year and the agency is forced to play out its regulatory hand.”


— My column today “Obama's pick for man of the year: George W. Bush” is here.

— Christmas is a day when I mustn’t read anything other than the second chapter of Luke’s gospel and the cards of well wishers. I’ll be in touch Monday. Merry Christmas to you all.











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