Sign Of The Times: Apologizing For Having To Say, "Christmas"

DOOMSDAY FOR BARRY: A Decision May Be Necessary (The Bush Tax Breaks Nightmare And How To Deal With It)

A massive bipartisan tax package preventing a big New Year's Day tax hike for millions of Americans is on its way to President Barack Obama for his signature.

The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.

The president is expected to sign the bill this afternoon.

In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138).

In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.

"There probably is nobody on this floor who likes this bill," said House Majority Leader Steny Hoyer, D-Md. "The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they're right."

Rep. Dave Camp, R-Mich., said that with unemployment hovering just under 10 percent and the deadline for avoiding a big tax hike fast approaching, lawmakers had little choice but to support the bill.

"This is just no time to be playing games with our economy," said Camp, who will become chairman of the tax-writing House Ways and Means Committee in January. "The failure to block these tax increases would be a direct hit to families and small businesses."

Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 - a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.

The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.

Workers' Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.

"This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force," said Treasury Secretary Timothy Geithner.

Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn't make all the tax cuts permanent.

Rep. Ginny Brown-Waite, R-Fla., called it "a bipartisan moment of clarity."

The bill's cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.

"I know that we are going to borrow every nickel in this bill," Hoyer lamented.

At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple's estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.

Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.

House Speaker Nancy Pelosi, D-Calif., called the estate tax the "most egregious provision" in the bill and held a vote that would have imposed the higher estate tax. It failed, 194-233.

Rep. Elijah Cummings, D-Md., said he thought the White House could have gotten a better deal.

"When I talk to the Republicans they are giddy about this bill," he said. (source)

Last-Ditch Effort To Ram Through Omnibus Bill By Barry, Pelosi Et Al Fails

After wrestling with - and finally abandoning - a 1,900-page catch-all spending bill stuffed with more than $8 billion in home-state projects known as earmarks in Washington and pork in the rest of the country, Senate leaders need to come up with a measure to keep the federal government running into early next year.

Nearly $1.3 trillion in unfinished budget work was packed into the spending measure, including $158 billion for military operations in Iraq and Afghanistan. But Senate Majority Leader Harry Reid gave up on the bill Thursday after several Republicans who had been thinking of voting for it pulled back their support.

Republican leader Mitch McConnell of Kentucky had thrown his weight against the bill in recent days, saying it was "unbelievable" that Democrats would try to muscle through in the days before Christmas legislation that usually takes months to debate.

"Just a few weeks after the voters told us they don't want us rushing major pieces of complicated, costly, far-reaching legislation through Congress, we get this," McConnell said. "This is no way to legislate."

The turn of events was a major victory for earmark opponents like Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., who for years have been steamrolled by the old-school members of the powerful Appropriations Committee.

The spending barons saw their power ebb in the wake of midterm elections that delivered major gains for Republicans - with considerable help from anti-spending tea party activists.

"We just saw something extraordinary on the floor of the United States Senate," a grinning McCain said.

The $1.27 trillion catchall bill wrapped together 12 bills - blending $1.1 trillion for the operating budgets of every federal agency with an infusion of funding to carry the war in Afghanistan into its 10th year - into a single foot-tall piece of legislation that Democrats had hoped to pass with just a couple of days' worth of debate.

It was designed to bankroll the day-to-day operations of the government for the budget year that started Oct. 1, funding the almost one-third of the federal budget that Congress has to pass each year.

The House and Senate typically spend months on the 12 annual spending bills, but Democrats didn't bring even a single one to the Senate floor this year, an unprecedented collapse of an appropriations process. The House only passed two of the 12 bills and didn't make any of the other 10 public.

The sinking of the bill was a setback for President Barack Obama, who supported it despite provisions to block the Pentagon from transferring Guantanamo Bay prisoners to the United States and fund a program to develop a second engine for the F-35 Joint Strike Fighter, which the administration says is a waste of money. Obama came under fire from Republicans for supporting the bill after promising after the election to take a harder line on earmarks.

Just Thursday, Secretary of Defense Robert Gates made a public push for the omnibus measure at an appearance at the White House, saying that operating under a stopgap measure frozen at current levels would be a major hardship for the Pentagon.

McConnell had earlier quietly backed the effort to produce the legislation, which had significant input from Republicans on the Appropriations panel.

But release of the bill on Tuesday sparked an outcry among the GOP's conservative political base. Senate Republicans held two combative closed-door meetings in which the rank-and-file turned up the heat on those few Republicans who were considering voting for the bill.

Republicans were also irate that the measure contained money to begin implementation of Obama's controversial health care law and a financial overhaul measure that all but a handful of Republicans opposed.

On the merits, most of the rest of the bill had bipartisan support. It stuck to a spending cap sought by Republicans while boosting spending for Head Start, veterans programs and Pell Grants for disadvantaged college students. But that message didn't get out amid the firestorm over earmarks and the measure's remarkable size.

McConnell proposed Thursday to keep the government running at current funding levels through Feb. 18. By then, Republicans will have taken over the House and bolstered their strength in the Senate, giving them greater leverage to force spending cuts.

The House last week passed a yearlong funding bill that's mostly frozen at current levels. (source)

What The ObamaNation Has Brought Us: Taking From The Rich

President Obama’s $8 Billion Earmark Rerun: Lesson Not Learned?

The Obama administration today told Congress to pass an omnibus spending bill containing $8 billion in earmark projects, even though just a few days ago the president said one of the lessons he learned from the 2010 midterm elections was to take more seriously the public’s disapproval of – and his pledge to oppose -- earmarks.

“We wish there were no earmarks and are troubled with their presence” in the $1.1 trillion omnibus spending bill, an administration source told ABC News. “But Secretary Gates has told the President that the alternative bill” – a continuing resolution that for one year funds the government, which is due to run out of cash at the end of the week – “doesn't have the funding critical for several national security priorities.”

Gates issued a statement this evening saying that without the omnibus spending bill, the Pentagon would be left “without the resources and flexibility needed to meet vital military requirements” – specifically “the military pay raise, increases in military health care costs, higher fuel prices, and other ‘fact of life’ bills.” The shorter funding bill would “slow our efforts to meet unanticipated wartime needs,” he added, while the bigger funding bill would provide funding for “critical national security initiatives” including the new Cyber Command and increasing special operations forces.

The president’s acquiescence with a bill that contains $8 billion in earmarks stands in contrast with what he said was a lesson learned from the 2010 midterm “shellacking,” when he indicated that he regretted not taking more of a stand against a different $8 billion in earmarks in a 2009 omnibus spending bill.

At his press conference after the shellacking, the president said that upon taking office, “we were in such a hurry to get things done that we didn’t change how things got done. And I think that frustrated people.”

The president said he’s “a strong believer that the earmarking process in Congress isn’t what the American people really want to see when it comes to making tough decisions about how taxpayer dollars are spent. And I, in the rush to get things done, had to sign a bunch of bills that had earmarks in them, which was contrary to what I had talked about. And I think folks look at that and they said, ‘Gosh, this feels like the same partisan squabbling, this seems like the same ways of doing business as happened before.’ And so one of the things that I’ve got to take responsibility for is not having moved enough on those fronts.”

The president said the midterms provided him with “an opportunity to move forward on some of those issues,” and he specifically cited incoming House Majority Leader Eric Cantor, R-Va., as wanting “to see a moratorium on earmarks continuing. That’s something I think we can work on together.”

Cantor spokesman Brad Dayspring said Wednesday evening that President Obama and Cantor have not spoken about earmarks since the president mentioned his name at that press conference.

“So right after his election rebuke, President Obama claimed that he to work together to reform earmarks and today he supports a bill that contains billions of dollars of wasteful pork,” Dayspring said. “If that’s the kind of reform the President had in mind, Eric Cantor isn’t interested. People are furious and rightly so with the runaway spending and the joke process that they are watching Democrats are engage in. Even after the election shellacking, the President and his party still don’t get it. If he is serious about working together, he needs to take it seriously and pledge to veto this pork laden spending bill.”

The president told 60 Minutes last month that while he had “campaigned saying we should stop doing earmarks….I had to make a decision, ‘Do I sign this omnibus bill to finish last year's business? And, you know, make sure that I can keep on working with Congress to get all these things done? Or do I veto that bill and have a big fight right away in the middle of an economic crisis?’ Well, I decided to sign the bill. Now, that's an example of where I was so concerned about getting things done that, you know, I lost track of part of the reason I got elected. Which was we were gonna change how business was done here.”

After a number of decisions like that, the president said, “I think what people started feeling was, "Gosh, this is sort of business-as-usual in Washington,’ And that's part of what I ran against. And so, I reflect a lot about over the next two years, making sure that I remind myself, my job is not legislator in chief. It's not just a matter of how many bills I'm passing, no matter how worthy they are. Part of it's also setting a tone in Washington and for the rest of the country that says, "We're responsible’…” (source)

Earmark Foes Pressure Obama

Arizona Republican Representative Jeff Flake

Newly emboldened earmark foes are calling on President Obama to back up his opposition to pork-barrel spending with action.

Mr. Obama, who stopped requesting earmarks during his final year in the Senate, has used his bully pulpit to call for reform of the process by which lawmakers direct federal funding to pet projects. He even made it the sole focus of a recent weekly address, identifying earmarks as a possible area of bipartisan cooperation with the GOP.

But the president has signed billions of the sometimes-controversial projects into law during his first two years in office - even though he has later expressed regret for doing so.

"If you want to know how you really change the practice, it's for a president to say, 'I'm simply going to veto bills that have these projects in them,' " said Rep. Jeff Flake, Arizona Republican and a leading anti-pork crusader. "He has to know what a stain there is around the country for this kind of politics, for earmarks in general, and if he were to take a firm stand that would be huge for him."

Indeed, with a near-record federal deficit and an economy that's still struggling to recover, public pressure to control government spending is immense and congressional Republicans have latched onto an earmark moratorium as a part of the answer. But members of Congress are also intent on protecting what they see as their constitutional prerogative to appropriate federal dollars, and those competing tensions have set up one of the key showdowns on Capitol Hill.

"The president really is the lynchpin in all of this," said Steve Ellis, vice president of government watchdog group Taxpayers for Common Sense. "He can talk to the Senate Democrats and say, 'Hey, it's not like I'm telling you to do something I didn't do when I was in the Senate.' So he has a bit of the moral high ground there."

Mr. Ellis noted that Mr. Obama has already had some luck "saber rattling" with Congress over a defense authorization bill last summer that included $1.8 billion for new F-22 fighter jets. The Senate eventually voted to cut funding for the program after Mr. Obama made the first veto threat of his presidency.

The president has been less interested in standing up to lawmakers when it comes to pork barrel spending projects - despite vowing to crack down on them during his 2008 campaign. Soon after taking office in March 2009, he criticized, but signed, a $410 billion omnibus spending bill loaded with $7.7 billion in earmarks, including $200,000 for a California tattoo removal program.

Mr. Obama justified his signature by pointing out that the legislation was left over from the previous year, declaring however that it "must mark an end to the old way of doing business." Nine months later, he signed a second omnibus bill totaling $447 billion, with nearly $4 billion in earmarks.

Both House Republicans, who will take control of the chamber in January, and their Senate counterparts have agreed to voluntarily ban earmarks, which account for less than 1 percent of federal spending but have become symbols of government waste and even corruption. In particular, the Senate GOP moratorium was a major coup for earmark hawks, who welcomed a change of heart by Senate Minority Leader Mitch McConnell of Kentucky, a longtime defender of directing federal dollars to projects back home.

With their new majority, House Republicans could effectively block requests by House Democrats. But Democrats still control the Senate and, along with a few Republican outliers who are bucking their caucus on the pork moratorium, such as Sen. James M. Inhofe of Oklahoma and Sen. Lisa Murkowski of Alaska, have vigorously resisted the anti-earmark wave.

That leaves a bipartisan band of agitators, led by Sen. Tom Coburn, Oklahoma Republican, looking to force fellow lawmakers into line with a binding moratorium that, as a change to Senate rules, would require 67 votes and is unlikely to pass. Senate Majority Leader Harry Reid, an avowed earmarker, has agreed to allow a vote on the proposal even as he warned it would lead to a power grab by the executive branch.

"I think I have an obligation to the people of Nevada to do what's important to Nevada and not what's important to some bureaucrat with green eyeshades," Mr. Reid, of Nevada, told reporters last week in a routine defense of the practice.

But Mr. Obama seems to have recommitted himself to a tough public stance on pork since his party's "shellacking" at the polls earlier this month.

In a postelection press conference, he appeared to regret having signed bills piled high with earmarks, saying the process "isn't what the American people really want to see when it comes to making tough decisions about how taxpayer dollars are spent" and that he hopes to work with Republicans on reform.

He told Americans in a weekly address that "we can't afford" earmarks amid staggering deficits, and even put out a statement in response to Mr. McConnell's reversal in a bid to stay out front on the issue.

The real test, however, will come if and when Congress sends Mr. Obama another pork-laden bill. That may not happen until next year, as Mr. McConnell has vowed to block consideration of an omnibus spending bill during the so-called "lame duck" session of Congress.

Asked last week by a reporter whether the president would use his veto pen to enforce his views on earmarks, White House press secretary Robert Gibbs ducked the question, saying the administration would have to "evaluate a piece of legislation for what is and is not" in the bill.

Mr. Flake, who thought Mr. Obama "would take a firmer stand initially," said it would be a mistake for the president to sign another omnibus riddled with pet projects.

"I think people would say that's just more of the same," said Mr. Flake, who described the fight over pork as "a new ball game" come January, when the new Congress is sworn in. (source)

Barry As President: More Lies Catching Up With Him (The 2010 Omnibus Bill And The Earmarks Involved)

The Net Neutrality Coup (How's That Hope And Change Thing Working For Ya' Now?)

The campaign to regulate the Internet was funded by a who's who of left-liberal foundations.

The Federal Communications Commission's new "net neutrality" rules, passed on a partisan 3-2 vote yesterday, represent a huge win for a slick lobbying campaign run by liberal activist groups and foundations. The losers are likely to be consumers who will see innovation and investment chilled by regulations that treat the Internet like a public utility.

There's little evidence the public is demanding these rules, which purport to stop the non-problem of phone and cable companies blocking access to websites and interfering with Internet traffic. Over 300 House and Senate members have signed a letter opposing FCC Internet regulation, and there will undoubtedly be even less support in the next Congress.

Yet President Obama, long an ardent backer of net neutrality, is ignoring both Congress and adverse court rulings, especially by a federal appeals court in April that the agency doesn't have the power to enforce net neutrality. He is seeking to impose his will on the Internet through the executive branch. FCC Chairman Julius Genachowski, a former law school friend of Mr. Obama, has worked closely with the White House on the issue. Official visitor logs show he's had at least 11 personal meetings with the president.

The net neutrality vision for government regulation of the Internet began with the work of Robert McChesney, a University of Illinois communications professor who founded the liberal lobby Free Press in 2002. Mr. McChesney's agenda? "At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies," he told the website SocialistProject in 2009. "But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control."

A year earlier, Mr. McChesney wrote in the Marxist journal Monthly Review that "any serious effort to reform the media system would have to necessarily be part of a revolutionary program to overthrow the capitalist system itself." Mr. McChesney told me in an interview that some of his comments have been "taken out of context." He acknowledged that he is a socialist and said he was "hesitant to say I'm not a Marxist."

For a man with such radical views, Mr. McChesney and his Free Press group have had astonishing influence. Mr. Genachowski's press secretary at the FCC, Jen Howard, used to handle media relations at Free Press. The FCC's chief diversity officer, Mark Lloyd, co-authored a Free Press report calling for regulation of political talk radio.

Free Press has been funded by a network of liberal foundations that helped the lobby invent the purported problem that net neutrality is supposed to solve. They then fashioned a political strategy similar to the one employed by activists behind the political speech restrictions of the 2002 McCain-Feingold campaign-finance reform bill. The methods of that earlier campaign were discussed in 2004 by Sean Treglia, a former program officer for the Pew Charitable Trusts, during a talk at the University of Southern California. Far from being the efforts of genuine grass-roots activists, Mr. Treglia noted, the campaign-finance reform lobby was controlled and funded by foundations like Pew.

"The idea was to create an impression that a mass movement was afoot," he told his audience. He noted that "If Congress thought this was a Pew effort, it'd be worthless." A study by the Political Money Line, a nonpartisan website dealing with issues of campaign funding, found that of the $140 million spent to directly promote campaign-finance reform in the last decade, $123 million came from eight liberal foundations.

After McCain-Feingold passed, several of the foundations involved in the effort began shifting their attention to "media reform"—a movement to impose government controls on Internet companies somewhat related to the long-defunct "Fairness Doctrine" that used to regulate TV and radio companies. In a 2005 interview with the progressive website Buzzflash, Mr. McChesney said that campaign-finance reform advocate Josh Silver approached him and "said let's get to work on getting popular involvement in media policy making." Together the two founded Free Press.

Free Press and allied groups such as MoveOn.org quickly got funding. Of the eight major foundations that provided the vast bulk of money for campaign-finance reform, six became major funders of the media-reform movement. (They are the Pew Charitable Trusts, Bill Moyers's Schumann Center for Media and Democracy, the Joyce Foundation, George Soros's Open Society Institute, the Ford Foundation, and the John D. and Catherine T. MacArthur Foundation.) Free Press today has 40 staffers and an annual budget of $4 million.

These wealthy funders pay for more than publicity and conferences. In 2009, Free Press commissioned a poll, released by the Harmony Institute, on net neutrality. Harmony reported that "more than 50% of the public argued that, as a private resource, the Internet should not be regulated by the federal government." The poll went on to say that since "currently the public likes the way the Internet works . . . messaging should target supporters by asking them to act vigilantly" to prevent a "centrally controlled Internet."

To that end, Free Press and other groups helped manufacture "research" on net neutrality. In 2009, for example, the FCC commissioned Harvard University's Berkman Center for Internet and Society to conduct an "independent review of existing information" for the agency in order to "lay the foundation for enlightened, data-driven decision making."

Considering how openly activist the Berkman Center has been on these issues, it was an odd decision for the FCC to delegate its broadband research to this outfit. Unless, of course, the FCC already knew the answer it wanted to get.

The Berkman Center's FCC- commissioned report, "Next Generation Connectivity," wound up being funded in large part by the Ford and MacArthur foundations. So some of the same foundations that have spent years funding net neutrality advocacy research ended up funding the FCC-commissioned study that evaluated net neutrality research.

The FCC's "National Broadband Plan," released last spring, included only five citations of respected think tanks such as the International Technology and Innovation Foundation or the Brookings Institution. But the report cited research from liberal groups such as Free Press, Public Knowledge, Pew and the New America Foundation more than 50 times.

So the "media reform" movement paid for research that backed its views, paid activists to promote the research, saw its allies installed in the FCC and other key agencies, and paid for the FCC research that evaluated the research they had already paid for. Now they have their policy. That's quite a coup. (source)

No Congress Since '60s Makes as Much Law Affecting Most Americans as 111th

However history judges the 535 men and women in the U.S. House of Representatives and Senate the past two years, one thing is certain: The 111th Congress made more law affecting more Americans since the “Great Society” legislation of the 1960s.

For the first time since President Theodore Roosevelt began the quest for a national health-care system more than 100 years ago, the Democrat-led House and Senate took the biggest step toward achieving that goal by giving 32 million Americans access to insurance. Congress rewrote the rules for Wall Street in the most comprehensive way since the Great Depression. It spent more than $1.67 trillion to revive an economy on the verge of a depression, including tax cuts for most Americans, jobs for more than 3 million, construction of roads and bridges and investment in alternative energy; ended an almost two-decade ban against openly gay men and women serving in the military, and today ratified a nuclear arms reduction treaty with Russia.

For all of its ambitious achievement, the 111th Congress, which may adjourn this week, also witnessed a voter-backlash driven by a 9.6 percent unemployment rate that cost Democrats control of the House and diminished their Senate majority.

“This is probably the most productive session of Congress since at least the ‘60s,” said Alan Brinkley, a historian at New York’s Columbia University. “It’s all the more impressive given how polarized the Congress has been.”

Revenue Gains

As lawmakers wrap up the session, Wall Street firms such as Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc. are positioned to complete their best two years in revenue, General Motors Co. has emerged from bankruptcy with more than $23 billion repaid to the U.S. Treasury, and American International Group Inc. was able to sell $2 billion of bonds in its first offering since the company’s 2008 bailout.

The S&P 500 Index has gained 38.9 percent since Congress convened in January 2009, the biggest increase for a two-year congressional session since 1997-1998, according to data compiled by Bloomberg. The S&P 500 Index reached 1254.60 yesterday, the Dow Jones Industrial Average 11533.16.

Stimulus money created and saved jobs across the country, helping strapped state governments retain their workforces, according to government analyses. President Barack Obama’s Council of Economic Advisers said that in Ohio, for instance, the legislation created 122,000 jobs for teachers, police officers and construction workers.

“These policies carried the economy along during a period when the private sector was not engaged,’ said Ethan Harris, head of developed-markets economic research in New York at BofA Merrill Lynch Global Research.

Election Results

The careers of many lawmakers didn’t fare so well. Fiscally conservative Tea Party activists channeled their frustration with government spending and debt into political campaigns, most often to the benefit of Republicans challenging Democratic incumbents. In the Nov. 2 elections, Democrats lost 63 House seats, costing their party control of the chamber in next year’s Congress. In the Senate, the Democratic majority was shaved by six seats; the party will have 53 votes in next year’s session, Republicans 47.

“What we did was work, and our reward was, ‘Get out of here,’” said Representative Louise Slaughter, a New York Democrat and outgoing chairwoman of the House Rules Committee. While Slaughter won re-election, five of her New York colleagues were among Democrats defeated.

Partisan Divide

Party-line votes on most of the major measures engendered ill will among Republicans and helped stall in the Senate initiatives requiring significant bipartisan support. Blocked legislation included limits on greenhouse-gas emissions that scientists blame for global warming, a bill the House passed in June 2009, a measure offering undocumented immigrants a path to citizenship and the administration’s attempts to curb growing income inequality with tax increases for higher earners.

Those are unlikely to be tackled next year, when the House’s Republican majority will turn its attention to dismantling the health-care law and cutting domestic government spending by $100 billion.

Congress this year was also unable to approve a single one of the 12 annual appropriations bills that fund the government.

“I think it was a disaster,” said Senator Jeff Sessions, an Alabama Republican, of the congressional session.

Senator Richard Durbin of Illinois, the chamber’s No. 2 Democratic leader, saw it differently: “This whole two-year session has been dramatic in terms of its achievement and the changes that it’s brought about.”

End of Era

The policies embraced by the 111th Congress suggested the end of an era in Washington, as Democrats pushed to reverse three decades of deregulation that began under President Ronald Reagan, say economists.

“We’ve been in a trend toward an attempt to deregulate the economy,” said Harris. “You’re turning back the clock to an earlier period.”

The scope of regulations approved since Obama took office has made business hesitant to expand and hire new workers, he said. “Business is overwhelmed,” said Harris.

Congress scored its first big accomplishment weeks after Obama’s inauguration with passage in late February 2009 of a $814 billion stimulus bill. It has created or saved 3.3 million jobs, according to the Congressional Budget Office, while also steering more funds to road construction, broadband technologies and renewable energy ventures.

New Customers

The health-care legislation approved last March provided insurers including WellPoint Inc. of Indianapolis and drug- makers such as Pfizer Inc. of New York millions of new customers by requiring that all Americans have health insurance. These industries, as well as medical device-makers, will also face billions of dollars in new fees, and hospitals face a host of new standards designed to help curb soaring costs.

The health-care law is facing legal challenges, with the insurance provision a key dispute.

An overhaul of the rules governing the financial services industry, approved in July, aims to prevent a repeat of an economic collapse that led to the failures of Lehman Brothers Holdings Inc. and Washington Mutual Inc. It included $4 billion in aid to help thousands of unemployed property owners avoid foreclosure, while the program has fallen short of its goals.

Congress also passed laws to help ensure pay equity by enabling women to pursue lawsuits claiming they were underpaid, and to empower the federal Food and Drug Administration to regulate the tobacco industry, which includes restrictions on cigarette marketing.

New Justices

Additionally, lawmakers expanded state programs for health insurance for children, and they confirmed two Supreme Court justices, Sonia Sotomayor and Elena Kagan. Sotomayor became the first Latino to serve on the court, and the pair increased to three the number of women among the nine justices.

Following the November elections in which voters handed Democrats what Obama termed a “shellacking,” Congress in a lame-duck session made significant additions to its accomplishment list. Lawmakers approved an $858 billion measure that continues for two years Bush-era tax cuts for all income levels, extends aid for 13 months to the long-term unemployed, provides estate tax relief and cuts by two percentage points worker payroll taxes during 2011.

Congress in its last days also voted to repeal the “don’t ask, don’t tell” ban on military service by openly gay men and women. Yesterday it cleared the biggest food-safety overhaul in more than 70 years, giving the FDA more enforcement power. And the Senate ratification today, 71-26, of the new Strategic Arms Reduction Treaty gives Obama a key foreign-policy victory.

‘Broad Basis’

“What we’ve been able to do in the lame duck has been not just bipartisan by a fingernail, but bipartisan on a broad basis,” said Senator Claire McCaskill, a Missouri Democrat.

From a market perspective, Congress’s biggest accomplishment was probably the tax cuts, with the estate tax breaks the “whipped cream, fudge and cherry on top,” said Ethan Siegal, president of the Washington Exchange.

Investors responded to the health-care and financial- services measures largely negatively, with health care viewed as “big government gone nuts,” he said.

Democrats say it will take years before the public recognizes their achievements. Many of the measures that passed were designed to forestall a bleaker recession, an argument that’s little comfort to many Americans as the nation’s unemployment rate has remained at 9.5 percent or higher for more than a year.

“It was hard to tell people that we accomplished anything important when their lives are so difficult,” said Representative Henry Waxman, a California Democrat and outgoing chairman of the House Energy and Commerce committee.

Changing Direction

The Tea Party movement, which worked to elect lawmakers advocating a new era of fiscal authority, has already begun to shift the direction of Congress.

Shortly after the election, Senate and House Republicans announced a voluntary ban on earmarks, the funding for pet projects added to bills by lawmakers. The incoming House Republican leadership has promised to turn the focus of the Appropriations Committee from funding government to identifying spending cuts.

Many of those efforts will likely fail in the Democrat- controlled Senate. And the party split between the two chambers is likely to bring the record of congressional productivity to an abrupt end in January.

“There’s just nothing that’s going to be accomplished,” said Brinkley. “What really is disturbing is that this is a period in which there is a lot to be done.” (source)

Dems Go Where Republicans Fear To Tread: Net Neutrality

Consumers for the first time got federally approved rules guaranteeing their right to view what they want on the Internet. The new framework could also result in tiered charges for web access and alter how companies profit from the network.

The Federal Communications Commission on Tuesday voted 3-2 to back Chairman Julius Genachowski's plan for what is commonly known as "net neutrality," or rules prohibiting Internet providers from interfering with legal web traffic. President Barack Obama said the FCC's action will "help preserve the free and open nature of the Internet."

The move was prompted by worries that large phone and cable firms were getting too powerful as Internet gatekeepers.

Most consumers haven't had a problem viewing whatever they want online; few instances have arisen of an Internet provider blocking or slowing services.

Rather, the FCC rules are designed to prevent potential future harms and they could shape how Americans access and use the Internet years from now. In the future, the Internet industry will be increasingly centered around the fastest-growing categories of Internet traffic—online video, gaming and mobile services, analysts say. Cisco Systems Inc., the broadband network provider, has forecast those services could quadruple by 2014.

Steve Wozniak, a co-founder of Apple Inc. and a staunch proponent of keeping the Internet unregulated, after an FCC hearing on Tuesday.

Comcast Corp. and other Internet providers have experimented with ways to handle the growing problem of network congestion. Recently, Mr. Genachowski suggested that instead of selectively slowing certain traffic to cope with congestion, providers could consider charging consumers for how much data they consume. That would be a departure from the flat monthly fees consumers pay now for Web access. It's something providers privately say is one of the only ways to make a profit and fund network infrastructure.

Such a system could pose a challenge to companies like Netflix Inc., which streams movies over broadband networks to televisions and computers. Netflix Tuesday said the FCC decision did not go far enough toward protecting content providers.


The new rules will also allow phone and cable companies to sell to Internet companies like Amazon.com Inc. faster data delivery for extra money, particularly on wireless networks. That would let a company that offers streaming video, like Google Inc.'s YouTube, pay a wireless company like Verizon Communications Inc. a bonus for guaranteed delivery of its videos to consumers' smart phones.

But FCC officials said any such priority service must be disclosed, and they said they would likely probe and reject such efforts. That could prompt some of the many expected legal challenges to the new rules, since it is not clear if the FCC has authority to enforce them.

Consumer groups and other organizations, including the American Library Association, oppose such high-speed toll lanes, arguing all Americans should have the same quality of Internet access.

The FCC's decision is a mixed bag for consumers. The new rules—which haven't been released in full—say that land-line broadband providers can't block legal content from websites, or "unreasonably discriminate" against companies like Skype or Netflix that want to use broadband networks to provide video or voice services. They also require providers to give consumers more information about their Internet service, like actual download speeds or usage limits.


But the rules come with some wiggle room for the industry. Service providers will be allowed to engage in "reasonable network management" to cope with congestion on their systems.

Wireless companies are less restricted by the new rules—a win for the industry because consumers are increasingly accessing the web using hand-held devices such as iPhones or Blackberries. Mr. Genachowski said mobile carriers faced more congestion issues than other companies and need more leeway to manage their networks.

Wireless companies would be prohibited from blocking Internet voice services but they could block access to many other applications, citing congestion issues.

Reaction the FCC's rules was mixed. AT&T Inc. said the rules were "not ideal" but would bring some "market certainty so that investment and job creation can go forward." Verizon said it was "deeply concerned" because it didn't think the rules were needed. A coalition of Internet companies including Google said the rules were a good first step but stronger regulations on wireless networks were needed to ensure the same rules apply to both wired and wireless Internet.


Some venture capital firms that invest in innovative applications and wireless technology expressed concern about how the rules will impact the wireless business. "The problem is that there's so much ambiguity in the rules," said Brad Burnham of Union Square Ventures, which has invested in startups including Foursquare and Twitter Inc. (source)