Posts tagged with 'budget'

Weekly Audit: HBGary Federal and The Chamber of Secrets

Posted Feb 15, 2011 @ 12:03 pm by
Filed under: Economy     Bookmark and Share

Creative Commons, Flickr, laverrueBy Lindsay Beyerstein, Media Consortium blogger

The most influential business lobby group in the United States has been linked to a scheme to deploy dirty tricks against its political opponents. Josh Harkinson reports for Mother Jones that prospective vendors for the Chamber of Commerce hatched a plan to frame and entrap critics of the Chamber.

The plan came to light last week after hackers released thousands of emails obtained from the servers of HBGary Federal, a private security company. The emails reveal Chamber law firm Hunton & Williams was looking for firms to help it execute a plot to entrap bloggers, union officials and other Chamber critics. The goal, according to Harkinson, was to manufacture evidence that all the Chamber’s critics were working together to discredit the business group:

According to the emails, Chamber law firm Hunton & Williams wanted to hire digital sleuths that could demonstrate that the business group’s opponents had been working as a “single entity instead of a true ‘grasroots’ campaign.” That phrase and others suggest that the Chamber’s ultimate goal was to openly accuse its foes of a left-wing form of astroturfing.

HBGary Federal was apparently planning to pitch its services as a “Corporate Information Renaissance Cell” to the Chamber yesterday. The emails show that HBGary Federal and two other firms, Berico Technologies and Palantir, proposed to use the social networking pages of the Chamber’s enemies to manufacture evidence of supposed “relationships” between various players.

Labor of love

Robert Kuttner suggests in The American Prospect that organized labor may be the last best hope for reviving the middle class and restoring shared prosperity:

Though no longer centered in auto and steel factories, unions continue to offer lower-income Americans a path into the middle class–just ask a newly organized janitor, hotel worker, security guard, hospital paraprofessional, home-care worker, or warehouse, call-center, or food-service employee.

Kuttner notes that the average union employee earns about 20% more than a non-unionized worker doing the same job. He also cites evidence that unionized workers are more likely to vote for Democrats than their non-unionized counterparts and that the power of unions to deliver votes for Democrats had been growing steadily up until the Republican blowout in the midterm elections of 2010.

Budget bingo

Ari Berman of The Nation takes a closer look at President Obama’s proposed federal budget for 2012. The budget calls for investments in high speed rail and a national infrastructure bank. It does not tinker with Medicare or Social Security. The cuts proposed in the budget barely offset the cost of continuing the Bush tax cuts for the wealthy, Berman notes.

Meanwhile, David Corn of Mother Jones examines the president’s budget and feels deja vu from the Clinton administration. At a recent press conference, White House budget director Jared Lew outlined a budget that attempts to save money while”winning the future.” Obama’s budget promises $1.1 trillion in savings over the next decade, while maintaining investments in future-oriented research and development projects.

Corn notes that the administration is calling for $2.5 billion in cuts to a home heating program (LIHEAP) for the poor and elderly while simultaneously planning a national broadband network. But the administration has more or less given up on immediate job-creation in favor of long-term investment, Corn argues:

It seems the administration has concluded that after that tax-cut deal—which did amount to something of a second stimulus—there is not much else the White House can do via government spending (or tax cuts) to create jobs, especially with Republicans controlling the House.

That sounds good on paper, but how much are these ambitious big ticket projects going to do for Americans who are struggling in the current recession? He thinks it all sounds a lot like former president Bill Clinton’s centrist approach to the budget.

Consumers Anonymous

Carrie Barker of Ms. Magazine interviews CNN host Jane Velez-Mitchell about her new book Addict Nation, a book about American consumerism as a form of mass addiction. As a recovering alcoholic with 16 years of sobriety, Velez-Mitchell says she began to see connections between her personal struggles and the larger cultural script that “more is better.” She argues that our society needs a “consumer revolution” that will prompt people to rethink their buying patterns as conscious social and moral choices, as opposed to reflexive self-gratification.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: What Will The GOP Cut?

Posted Jan 18, 2011 @ 11:33 am by
Filed under: Health Care     Bookmark and Share

Creative Commons, Flickr, jackenhackBy Lindsay Beyerstein, Media Consortium blogger

The Republicans won control of the House and picked up seats in the Senate in the midterm election on nebulous promises to slash spending and reduce the size of the federal government.  House Speaker John Boehner has pledged to reduce spending to 2008 levels, as per the GOP’s campaign manifesto, known as the “Pledge to America.”

But as Andy Kroll reports in Mother Jones, while the Pledge calls for a 21.7% reduction in spending on non-security discretionary programs, it doesn’t commit to any specific cuts. Medicare and Social Security are safe from this round of cuts because they are not discretionary.

The Center for Budget and Policy Priorities tried to give a glimpse of what the federal government might look like if all eligible agencies took a 21.7% budget cut across the board. As Kroll notes, it’s more likely that some programs will be spared, some trimmed, and some eliminated entirely.

However, the CBPP’s analysis gives a stark picture of the magnitude of the proposed cuts, Kroll writes:

What it found was grim, with middle class Americans set to lose the most.

K-12 education funding, the CBPP found, would drop by $8.7 billion, and food stamps for at-risk pregnant women, infants, and young children would lose $1.6 billion in funding. State- and local-run housing programs would lose $6.9 billion, and children and family social services would lose nearly $2.2 billion.

Already pinched state budgets would take massive hits as well, losing out on $31.6 billion in federal funding.

Cuts to state budgets mean even deeper cuts to education and social services that benefit working families. Starving the states is also a strategy to force state governments to default on their pension obligations to unionized public sector workers.

But the magnitude of these cuts might be giving the GOP cold feet. In January, Speaker Boehner told Brian Williams at NBC that he couldn’t name a single program that he planned to cut.

Inequality is personal

Paul Buchheit points out on AlterNet that if middle- and upper middle-class families had the same share of the economic pie that they did in the 1980s, they would be making $12,500 more per year. In other words, the economy has become vastly more productive over the last 30 years, but the extra wealth has become overwhelmingly concentrated in the hands of the very richest Americans at the expense of working families.

U.S. GDP quintupled since the 1980s, but most of the extra wealth has gone to the top 1% of earners. Nobody begrudges entrepreneurs a healthy return on their capital, but what about the 99% of earners who provided the labor. Where’s the return on their investment?

With looming government spending cuts to domestic programs, the middle- and upper-middle classes will face an even bigger hit to their real standard of living. Local and state governments are cutting back on services while hiking taxes and fees.

The richest 1% won’t feel these cuts as acutely as middle class families. If you have your own private swimming pool, you may not notice that the public pool is closed because the city can’t afford lifeguards. If you send your kids to private universities, you won’t be biting your nails over potential tuition hikes at public universities.

MLK’s legacy

The nation honored the legacy of Dr. Martin Luther King, Jr. on Monday. Roger Bybee of Working In These Times points out that, while King is remembered as a civil rights leader, he was also deeply committed to economic justice for all Americans. The politicians who praised King’s legacy on Monday should remember that Dr. King’s last great crusade was on behalf of sanitation workers in Memphis, public employees struggling for a decent standard of living.

Beck sets sights on 78-year-old CUNY prof

Amy Goodman of Democracy Now! interviews Frances Fox Piven, a 78-year-old distinguished professor of political science at the City University of New York, who may be the first person to inadvertently spark prime time conspiracy theory in the pages of a Media Consortium outlet. Right wing talk host Glenn Beck has identified Piven as the co-author of a violent blueprint to crash capitalism itself.

As Piven explains to Goodman, the bile stems from the suggestion made by her and her co-author Richard Cloward in a 1966 article in The Nation that social activists should help poor people access the benefits they were already legally entitled to. At that time, Piven recalls, the welfare system denied benefits to more than half of its eligible recipients. She and Cloward believed that the poor would become a more politically powerful and visible part of society if society suddenly had to make good on its promises of aid.

In July, Richard Kim of The Nation explained how an obscure 40-year-old article was recast as the “Rosetta Stone” of lefty politics, the blueprint to usher in an economic crisis which the left could exploit to bring about socialism.

Since Beck seized on Piven’s work and labeled her a violent revolutionary, she has been the target of death threats by commenters on Beck’s website. Political operatives posing as students came to her home to interview her. The interview later showed up on Andrew Breitbart’s conservative website.

Piven seems both concerned and bemused that her brief for reforming the welfare system of the 1960s has been labeled as a blueprint for destroying the capitalist system.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Mulch: What’s Missing from the New Clean Energy Agenda?

Posted Feb 5, 2010 @ 11:46 am by
Filed under: Sustain     Bookmark and Share

By Sarah Laskow, Media Consortium Blogger

Photo courtest of Flickr user Joost J. Bakker IJmuiden via Creative CommonsNuclear power, biofuels, clean coal: These are the Obama administration’s answers to climate change. The 2011 budget, released this week, promised new loans for the construction of nuclear power plants, and on Wednesday the Environmental Protection Agency (EPA), White House, and other departments detailed steps to encourage ethanol and clean coal production.

These initiatives may garner support from conservatives, but their ascendancy comes at a price. Support for renewable fuel sources, like wind and solar, has dwindled. President Barack Obama did encourage Senate Democrats to pass a climate change bill, but some moderates are bucking the cap-and-trade provisions that could tamp down carbon emissions. Those moderates are pushing for legislation that leaves carbon caps out entirely. (more…)

Daily Pulse: Howard Dean (Video Exclusive)

Posted Sep 25, 2009 @ 11:42 am by
Filed under: Health Care     Bookmark and Share

By Lindsay Beyerstein, Media Consortium Blogger

Last night Gov. Howard Dean, former chair of the DNC and 2004 presidential hopeful, appeared in conversation with journalist Joe Conason at the 92nd Street Y in New York. Dean discussed his new book, Howard Dean’s Prescription for Real Health Care Reform.

Later on, I had a chance to ask Dean about the prospects for passing health care reform in the Senate through budget reconciliation, a parliamentary tactic that would allow the bill to pass by majority vote and thwart a filibuster. Many Democratic strategists consider reconciliation to be extremely politically risky, but Dean is unconvinced. He argues that passing a bill through budget reconciliation is not only doable, but also likely to result in a stronger bill.

“I’m not worried about doing this through reconciliation,” he said, “I think we’ll probably have a better bill if it’s through reconciliation because the people who are involved in the passage of the bill will only be Democrats and a very high proportion of Democrats want a public option.”

This post features links to the best independent, progressive reporting about health care and is free to reprint. Visit for a complete list of articles on health care affordability, health care laws, and health care controversy. For the best progressive reporting on the Economy, and Immigration, check out and This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.

Weekly Audit: Time to Shake Off the Bank Lobby

by Zach Carter, TMC MediaWire Blogger

While the national economy struggles under the weight of a massive bank bailout effort, the banking lobby’s ability to influence public policy is more problematic than ever. The too-big-to-fail bankers may be dependent on U.S. taxpayers for their survival, but corporate lobbyists still have members of Congress, the Treasury Department and the Federal Reserve asking the banks’ permission to bring the Big Finance behemoths under control. The relationship between Wall Street and the government is so out of whack that it’s difficult to distinguish the political players from the panhandlers.

In Mother Jones, Daniel Schulman and Jonathan Stein detail the ease with which important congressional staff switch careers and move into the banking sector. In recent years, dozens of key staffers for powerful Senators have left the political arena to work for as lobbyists for the financial sector, and policy gurus from both sides of the aisle are jumping ship for lucrative careers as influence peddlers on Wall Street.

“Financial firms seeking big bucks and favorable terms from Congress and the White House are deploying Capitol Hill aides turned lobbyists to win favorable treatment from the congressional lawmakers,” Schulman and Stein write. Many lawmakers, including Senate Banking Committee Chairman Chris Dodd, D-Conn., are refusing to disclose whether they’ve had contact with former staff who now work for Wall Street. Small surprise, then, that so many of the recent bailout packages have allowed failed bank CEOs to stay in power and saved their shareholders from bad investments in inept, even predatory, companies.

Sometimes these reinvented bank defenders are even former Senators. Susan Douglas of In These Times highlights the career of former Sen. Phil Gramm, R-Texas, who is currently a lobbyist for UBS. The Swiss banking giant has been plagued by a seemingly endless stream of scandals over the past year, for everything from diamond smuggling to tax fraud. And Gramm helped push for looser predatory lending laws—including those pertaining to the now-decimated mortgage sector—while he on the UBS payroll.

This would be a shameful legacy for any former public servant, but for Gramm, Douglas notes, this behavior is particularly disgraceful: his two chief legislative “accomplishments” helped create and intensify the current financial crisis. Gramm co-authored the Gramm-Leach-Bliley Act of 1999, which compounded the financial world’s too-big-to-fail problem by letting traditional commercial lenders like Bank of America and Citigroup buy up riskier, unregulated investment banks like Merrill Lynch. Gramm then pushed the Commodity Futures Modernization Act of 2000 through in a midnight budget amendment, a tactic which made sure that “credit default swaps” were not subject to either securities regulations or gambling laws. Just eight years later, credit default swap gambling destroyed insurance giant AIG, to the dismay of taxpayers everywhere.

When lawmakers stop cowing to the bank lobby and start answering to their constituents, the result is a big boost for the entire economy. Last week, committees in both the House and Senate dealt the credit card industry a rare defeat by approving bills that crack down on abusive credit card billing practices. Even though Sen. Dodd insists keeping his lobbying contacts a mystery, he is capable of crafting responsible legislation. The bills were introduced by Dodd and Rep. Carolyn Maloney, D-N.Y., but still face major uphill battles clearing the full House and Senate.

As Harry Hanbury details for the American News Project, conservative lawmakers and bank lobbyists are already hard at work watering down the legislative language to ensure that it will not actually curb any abuses if enacted. Take a look:

The bills would ban dozens of billing gimmicks that are as outrageous as they are common, including raising interest rates on credit card debt after it has been accumulated and hiking rates due to completely unrelated activity, like returning a library book late. The banking industry deploys a lot of clever words to mask the predation inherent in the tactics, and most common of all are the terms “price according to risk” and “risk-based pricing.” These phrases make it sound as if all the poor little credit card companies want to do is set interest rates at levels appropriate for a borrower’s credit profile. Of course, that’s not what’s actually happening: lenders are radically changing the terms of loan agreements for no other purpose than to gouge borrowers, and give borrowers no say in what happens.

It’s crazy that banks are legally permitted to raise interest rates on cardholders after they have charged debt to their credit card. If you pay full price for anything else—a shirt, a bag of groceries, a guitar—it would be laughable if the shop clerk demanded more money from you months later.

Banker apologists insist that banning these practices will restrict the flow of credit. But more credit cards will not fix a problem caused by massively over-indebted consumers. We need higher wages, not a fresh flood of predatory, high-interest debt.

But if taxpayers can win on credit cards, we can win on the bailout, too. Yes! Executive Editor Sarah van Gelder posted an open letter to President Barack Obama this week, citing half a dozen economic experts and urging him to change his bailout strategy before it’s too late. “Watching your appointees’ latest bank bailout makes me wonder if all your administration’s good work on health care, education, and jobs will be swept away by the extraordinary giveaway of trillions in taxpayer money to a group of powerful Wall Street operatives,” van Gelder writes.

And indeed, in other arenas of economic policy, the president has made significant steps in the right direction. While Obama’s proposed federal budget is less than perfect, it moves away from some of the worst trends of the past eight years. GritTV’s Laura Flanders details some of this progress in a roundtable discussion with Irasema Garza, President of Legal Momentum, former New York Times reporter David Cay Johnston, and New York City Coalition Against Hunger Director Joel Berg. By implementing robust job creation plans and a massive increase in anti-hunger and nutrition programs, Obama has signaled that the plight of those hardest hit by the recession cannot simply be ignored.

But these positive budget strides do not involve the banking lobby, which still maintains a stranglehold on any realm of U.S. public policy it can loot for a profit. Obama standing up to the financiers is not an improbable pipe dream, it’s a prerequisite for economic recovery and a necessary step toward rebuilding the integrity of our democracy.

This post features links to the best independent, progressive reporting about the economy. Visit and for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out and This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

Weekly Pulse: Key Dems Back Public Health Insurance Option

Posted Apr 1, 2009 @ 11:12 am by
Filed under: Uncategorized     Bookmark and Share

The chairs of five key congressional committees have finalized a plan for healthcare reform, and their blueprint includes a critical public option. The chairs’ decision to support government-administered health insurance for everyone who wants it is sure to attract ferocious opposition from both the insurance industry and its patrons in the GOP.

Sen. Bernie Sanders (I-VT) also put single-payer healthcare on the agenda by introducing the American Health Security Act (AHSA) of 2009. John Nichols of The Nation describes the bill as an important piece of legislation. If AHSA became law, it would create a federal health insurance system administered by the states. The insurance program would give patients an unlimited choice of doctors and hospitals because their insurance would cover them everywhere. The proposed program would be financed by redirecting current healthcare spending and supplementing the total with a modest tax increase that would cost most consumers less than their current health insurance premiums.

As Ezra Klein of TAPPED explains in his public insurance primer, single payer healthcare is a step beyond the public option. Under single payer, the government is the sole supplier of health insurance, whereas, under the public option, consumers are allowed to choose public or private insurance. Public insurance will be cheaper and more comprehensive because the government will be able to use its vast bargaining power to lower prices. Also, U.S. government administered health insurance plans like Medicare and SCHIP consistently spend a smaller portion of their budgets on administrative costs than private insurers. Republican Congressional leaders are opposed to the public option because they fear that the private insurance industry won’t be able to compete with government-administered insurance.

Dave Weigel, the Washington Independent‘s crack conservatologist, interviewed Rick Scott, the founder and principle funder of Conservatives for Patients Rights. CPR has been running ads nationwide warning that Obama is plotting a government takeover of healthcare. Scott also resigned from Colombia/RCA, a for profit-hospital corporation, in the middle of a $1.7 billion fraud investigation. Weigel asked Scott if he was concerned that his past might color public perceptions of his current healthcare advocacy:

TWI: People can still say, “Look, this was the guy who resigned in the biggest fraud settlement in American history.”

RICK SCOTT: But, you know, we were the biggest company. If you go back and look at the hospital industry, and the whole health care industry since the mid-1990s, it was basically constantly going through investigations. Great institutions, like ours, paid fines. It was too bad.

With all the talk about healthcare reform, it’s easy to forget that there’s more to health than insurance or the medical care it can provide. Amy Goodman of Democracy Now! explored the bigger picture with Dr. Steven Bezruchka, a public health scientist who studies how inequality itself makes us sick.
Yesterday, Gov. Kathleen Sebelius had her first Senate confirmation hearing yesterday for the post of Secretary of Health and Human Services. As Emily Douglas of RH Reality Check notes, last week, Sebelius signed a bill into Kansas law that would force women to undergo medically unnecessary ultrasounds before obtaining abortions. The normally pro-choice Sebelius probably signed the bill to dodge controversy before her confirmation hearing, according to Dana Goldstein of TAPPED.

Agit prop ultrasounds are a favorite tool of anti-choice activists, who claim that the sight of the sonogram is necessary to informed consent. But women have been making decisions about abortions without sonogram assistance since the beginning of civilization. In practice, the ultrasounds are just another obstacle that anti-choicers throw in the path of abortion providers. It’s disconcerting that Sebelius was willing to sign a frivolous law to ease her own confirmation.

RH Reality Check‘s Kay Steiger offers a first hand account of Sebelius’s first day of confirmation hearings. The governor said she supports a public option for health insurance and opposes conscience clauses for healthcare providers who seek to deny women abortion and contraception on religious grounds.

Finally, members of Congress are engaged in last minute wrangling prior to a vote on Obama’s budget. Democrats may try to use the budget reconciliation process to put healthcare reform to the Senate in a filibuster-proof format. (Due to an obscure rule, the Senate can pass a budget reconciliation with a simple majority, but only if the provisions in the budget are deemed to relate directly to spending and revenue.) Brian Beutler of Talking Points Memo reports that Congressional Republicans are vehemently denouncing the reconciliation option. Surprise, surprise.

This post features links to the best independent, progressive reporting about health care. Visit for a complete list of articles on healthcare affordability, healthcare laws, and healthcare controversy. And for the best progressive reporting on the ECONOMY, and IMMIGRATION, check out, and

This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.

Weekly Audit: Budget Good, Bailout Bad

Posted Mar 3, 2009 @ 9:38 am by
Filed under: Economy     Bookmark and Share

President Barack Obama rolled out his highly anticipated federal budget proposal on Thursday, and while the plan represents a dramatic departure from the priorities of the Bush administration, its ultimate impact may be crippled by a counterproductive bank bailout.

First, the good news: The budget is awesome.

“Obama would raise taxes on the wealthy to pay for healthcare for the uninsured; cap pollution emissions; put billions more dollars into infrastructure and new technology; … invest in new education programs; and roll back the U.S. troop presence in Iraq,” Mike Madden writes for Salon. “There were proposals to save money by modernizing the healthcare system … and by eliminating federal farm subsidies to the biggest and wealthiest recipients.”

While it’s refreshing to see a set of priorities that put economic stability ahead of entrenched corporate interests, Obama’s call to reduce the federal deficit comes as a bit of a surprise. He has inherited a massive recession and defecit. Over at The American Prospect, Ezra Klein highlights an analysis of spending by Media Consortium alum Brian Beutler. Both bloggers agree that government debt is not a major problem, provided that borrowed funds are used to invest in something meaningful.

“Debt can be good if you expect that spending will offer a greater return than saving,” Klein writes. “And right now, because Treasury bonds are the last safe investment, it’s the cheapest it’s been for the government to borrow money in 50 years.”

Republicans are screaming about the enormous deficit that Obama’s budget requires, but most of that debt was passed down by President George W. Bush. Obama has actually taken cues from Congressional Republicans to find funding for financial shortfalls. Steve Aquino of Mother Jones notes that Obama’s move to raise premiums on Medicare received by wealthy Americans is a longstanding Republican priority. Additionally, Obama’s move to cap the itemized deduction tax subsidy at 28 cents on the dollar would re-establish Reagan-era levels.

But the line items missing from Obama’s budget are just as noteworthy. The Washington Monthly‘s Steve Benen dissects the Republican angst over Obama’s refusal to push for cuts in Social Security benefits. During his speech before Congress last week, Obama breezed right by the alleged Social Security crisis without asking elderly Americans, who have already seen their 401k plans cut in half over the past year, to take further cuts in their retirement income.

That’s a good thing, because as Matthew Rothschild explains for The Progressive, Social Security’s looming implosion is a Republican myth. “Social Security isn’t going bankrupt,” Rothschild writes. “It’s fully funded until 2041, and could remain so for many more years simply by making the wealthiest Americans kick in their share.”

The income limit for Social Security taxes is $105,000 a year, so billionaires pay the same Social Security as those making $105,000 annually. If Social Security ever does run into trouble, it can be easily fixed by charging rich people more for the program.

On to the bad news.

The government bailed out Citigroup and its shareholders for the third time on Friday, converting $25 billion in preferred stock into ordinary, run-of-the-mill, we-own-this-company common stock. But while Citi’s stock market value was hovering around $13 billion at the time, taxpayers only received a 36% stake in return for their largesse.

The Real News has a great interview with economist William Engdahl about the banking lobby’s ability to exercise control over public policy, despite the industry’s self-inflicted collapse. Engdahl argues persuasively that it is time for the government to stop propping up bank shareholders under the hope that “market prices” will magically appear for worthless assets. “Write those assets, those toxic assets, down to zero,” Engdahl says. “Only the state can do that at this point. You don’t find the market price for these things.”

The government has been playing for time for the last 18 months in hopes that the financial crisis could iron itself out. Rather than reward investors who put money into bad companies, Engdahl says Obama needs to wipe out the shareholders of failed banks and kick out the management teams that steered their companies into catastrophe.

Playing for time was the central economic strategy of Henry Paulson’s tenure as Treasury Secretary, but as Lagan Sebert and David Murdoch make clear in the below video for The American News Project, Paulson also managed to slip in major giveaways to big U.S. banks in the process.

The Troubled Asset Relief Program (TARP) allowed the government to inject capital into banks, but Paulson charged them a much lower than market rate of return on the investment. As a result, taxpayers missed out on about $78 billion that they could have expected to receive in interest payments had their money been managed by, say, Warren Buffett instead of Paulson. To put that number in perspective: President Obama’s entire plan to avert foreclosures will cost taxpayers $75 billion.

The U.S. banking system is completely broken and will need an enormous taxpayer commitment to return to any semblance of health. But there are good ways and bad ways to go about doing that. A bailout should be accompanied by control over how a bank is managed.

The banking industry is working very hard to portray TARP as something other than a bailout. When Northern Trust, for example, throws decadent parties after receiving taxpayer funds, its executives justified those lavish expenditures by claiming that their company was not “bailed out,” but merely received capital which it is paying for. The pricing of TARP was so favorable to banks and so disadvantageous for taxpayers that this claim cannot be taken seriously. Northern Trust got a bailout, and even if they pay back their TARP funds ahead of time, the interest they are paying is so far below market rates that the company will still be coming out ahead.

Obama’s budget shows that he knows what it takes to turn the economy around, but his financial policy indicates that he lacks the political will to shake off the banking lobby and do what is necessary to save ordinary Americans from disaster.

This post features links to the best independent, progressive reporting about the economy. Visit and for complete lists of articles on the economy, or follow us on Twitter. And for the best progressive reporting on critical health and immigration issues, check out and This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.