It is now five days since a handful of senior Democrats joined with the Bush administration to announce a new "deal" on free trade, while refusing to release the actual legislative language of the deal. Today, environmental and health advocates have come out slamming the deal, noting like other grassroots groups that what the deal doesn't cover says as much about its potential problems as does the secrecy the deal is shrouded in.

Last week, Sirota pointed out that the vehemently anti-labor Chamber of Commerce was assured that the key labor provisions weren't really going to require compliance with international labor agreements:

U.S. Chamber of Commerce President and Republican Party bigwig Tom Donohue tells AFP news service that he is "encouraged by assurances that the labor provisions [in the deal] cannot be read to require compliance with ILO Conventions."

Paul Krugman weighed in on the new trade deal as well.  He wrote about some of the pitfalls of trade deals in his NY Times column on Monday, May 14, 2007 (subscription required).  Krugman not only wants pro-labor trade policy, he thinks American workers need universal health care:

The key element of the new trade deal is its inclusion of “labor standards”: countries that sign free trade agreements with the United States will have to allow union organizing, while abolishing child and slave labor.

The Bush administration, by the way, opposed labor standards, not because it wanted to keep imports cheap, but because it was afraid that America would end up being forced to improve its own labor policies. So the inclusion of these standards in the deal represents a real victory for workers.

Realistically, however, labor standards won’t do all that much for American workers. No matter how free third-world workers are to organize, they’re still going to be paid very little, and trade will continue to place pressure on U.S. wages.

So what’s the answer? I don’t think there is one, as long as the discussion is restricted to trade policy: all-out protectionism isn’t acceptable, and labor standards in trade agreements will help only a little.

By all means, let’s have strong labor standards in our pending trade agreements, and let’s approach proposals for new agreements with an appropriate degree of skepticism. But if Democrats really want to help American workers, they’ll have to do it with a pro-labor policy that relies on better tools than trade policy. Universal health care, paid for by taxing the economy’s winners, would be a good place to start.

The key to the agreement, said those involved, was the Bush administration's reluctant assent to Democratic demands for more stringent labor rules. Under the new policy, enforceable labor provisions will be written into the texts of trade deals to protect the rights of workers abroad to organize unions and bargain collectively, while banning forced labor, child labor and workplace discrimination.

The Bush administration resisted such rules, reflecting the fears of business interests that they could boost the power of U.S. labor unions, opening a backdoor for them to rewrite U.S. law to their advantage. But the administration concluded that it had to swallow the labor rules lest its trade deals die in a Congress controlled by the other party.

The deal also includes an agreement between the White House and Congress to develop a "strategic worker assistance and training initiative" that would increase job training and financial assistance for communities that suffer job losses to overseas competition and automation. Democrats said those programs would go beyond existing benefits, but they provided few details.

The New York Times also noted the environmental protections secured: 

It would also require trading partners to enforce environmental laws already on their books and comply with several international environmental agreements.

The new agreement applies to pending deals with Peru and Panama.  We'll continue to monitor this development.  Progressives have been pushing for labor and environmental protections in trade agreements for years.  Too many elected officials were willing to vote for trade deals without those key provisions.  Those days are over. 

Congress may balk at extending the president's "fast track" trade authority this year if there is not significant progress in global trade talks, the chairman of the Senate Finance Committee said Monday.

That authority lets President Bush negotiate a trade agreement and submit it to Congress for a simple yes-or-no vote without amendments. It was last extended by Congress in 2002 and is to expire on July 1.

"Absent any progress, any meaningful progress on the Doha negotiations it's going to be difficult for, I think, the Congress to get excited about extending fast track trade promotion authority this year," Sen. Max Baucus, D-Mont., said at the National Press Club. "Many are going to say, `Wait, give it to the next president, why do we need it right now anyway because there's no Doha.'"

This is significant because just a couple months ago, Baucus, chair of the Senate Finance Committee, was a strong advocate for renewing the President's fast-track trade authority.  But, in mid-April, Baucus announced a major shift in policy by announcing that he was no longer thought it was necessary to push the fast-track renewal legislation.  Coincidentally (or not), at the end of February, the Montana State Senate approved a resolution telling Congress not to renew the President's fast-track authority.  Then, in mid-March, "They Work For Us" ran radio ads on 13 radio stations in Montana attacking Baucus' position on free trade. 

If anyone thought that the Democrats capturing the U.S. Congress would result in any real change in Congressman Henry Cuellar, they were wrong.  Just last week, Cuellar voted with only four other Democrats to allow Corporate CEO’s to be paid huge multi-million dollar compensation packages without ordinary shareholders having any opportunity to cast even a symbolic vote on whether the compensation was deserved or could be afforded.  Cuellar’s “NO” vote on this common sense bill, H.R. 1257, makes it crystal clear he remains solidly on the side of irresponsible corporate fat cats and his friend George Bush, who vowed to veto the legislation after it passed the House. 

Over the past several years, Cuellar has managed to vote with Bush 85% of the time – more than any other Democrat in even Bush’s home state of Texas.  While some have suggested that now that the Democrats are in the majority he would change, this vote proved that this guy knows which side he’s on…and it’s not the side of working class families. 

Cuellar’s vote shouldn’t be a surprise.  After all, his top campaign contributors are the PACs of the right-wing Club for Growth (he was the first Democrat endorsed by the Club) and the International Bank of Commerce.  And as Bush’s favorite Democrat, Cuellar is more likely do what’s helpful to corporate CEOs and the wealthiest in our country, rather than the regular working folks who, in large part, make up his constituents.   Cuellar represents the Rio Grande Valley, which, according to the local paper, The Monitor.com, has "some of the lowest wages in the nation.".

As we wrote on the Wire at workingforus.org last week, in 1965 CEOs of major US companies made 24 times more than the average worker - by 2005, they made 262 times more.  Given today's staggering disparity between the very rich and the poor, shining a little light on executive compensation packages is just common sense and we can't understand why Congressman Cuellar thinks this is a bad idea.  (see MissLaura’s recent post for more great info on income inequality)

The final tally for the vote was 269 - 134.   214 Democrats and 55 Republicans voted yes and only four other Democrats voted against the bill --Boyd (FL-2), Boyda (KS-2), Cardoza (CA-18) and Tanner (TN-8).

H.R. 1257 would allow shareholders to have an advisory vote on executive compensation.  A shareholder voice in the executive pay process will encourage boards of directors to consider shareholder interests before approving questionable compensation plans.   It’s one small but important step toward opening up the process around CEO pay packages and ensuring sound corporate governance.  It shouldn’t be a difficult vote for a Democrat – and it wasn’t for 214 of them in Congress.  But let’s face it – Henry Cuellar is a Democrat in name only.

Growing problems in the mortgage industry combined with bad weather in some parts of the country to fuel the steepest one-month decline in sales of existing homes in nearly two decades, the National Association of Realtors reported yesterday.

Sales of previously owned homes in March fell 8.4 percent from February, the group reported. It was the largest one-month drop since sales plummeted 12.6 percent in January 1989, when the country was in a housing recession. It was also 11.3 percent below the number of units sold in March 2006.

The drop -- from a seasonally adjusted rate of 6.68 million homes sold in February to 6.12 million in March -- followed three consecutive months of increases in sales of existing single-family houses, townhouses, condominiums and co-ops. Those gains had led to speculation that the market was coming back after a sluggish 2006.

David Lereah, chief economist for the Realtors group, attributed the downturn partly to bad weather in parts of the country in February that carried over to transactions closed in March.

But more troubling are the problems in the subprime mortgage industry, he said. During the housing boom, lenders gave non-traditional loans to many of those borrowers, who typically have blemished credit records. Now that delinquencies and foreclosures are on the rise, lenders are tightening their standards.

In his “State of the Economy” speech today, delivered from the financial center of the world, President Bush aimed at bringing his economic message out of the shadows of the Iraq war. On his second day in a row he focused on the economy, the government reported faster-than-expected growth of 3.5 percent in the final quarter of last year.

In his address, Bush took aim Wednesday at lavish salaries and bonuses for corporate executives, standing on Wall Street to issue a sharp warning for corporate boards to “step up to their responsibilities” and tie compensation packages to performance.

But, no surprise, the President isn't working for us on this one.  Less then three months after that Wall Street speech, George Bush is opposed to legislation that will give shareholders the power to control those salaries:

The Bush administration is opposing a bill before the House, pushed by Democrats, to give shareholders at public companies a formal say in executives’ compensation packages.

The legislation, written by Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, comes at a time of growing public and shareholder anger over lavish compensation for executives unrelated to their performance. It would give shareholders a chance to cast an advisory vote on executive pay plans, allowing them to show their approval or disapproval of them.

Investor advocates, union pension funds and shareholder groups have been pushing for such “say on pay” votes as the chasm between executives’ salaries and the pay of rank-and-file employees continues to widen.

The last few years have seen economic gains for the wealthiest Americans, at least in part resulting from tax cuts and investment gains, and many Americans are living well — buying large homes, expensive cars and luxury products. But has any of this wealth trickled down to the middle class?

According to the latest CBS News Poll, most Americans — and most of those with mid-range incomes — don't think so; instead, many think the middle class has experienced tougher times. 59% think that life for middle class Americans has gotten worse in the last 10 years. Just 30% think it’s gotten better.

Something isn't working for the middle class. 

The number of US homes entering foreclosure in the first quarter doubled from a year earlier as property prices stagnated and owners struggled to refinance mortgages.

Owners of 168,829 homes in the first three months of 2007 got notices that lenders had filed for foreclosure due to failure to pay loans or liens, Foreclosures.com said yesterday.

That compares with 83,154 homes in the same period of 2006, the Sacramento, Calif.-based research firm said.

A four-year high in mortgage payment delinquencies and the failure or sale of 50 subprime mortgage companies, which provide loans to people with poor or limited credit histories, have made credit less available.

The inability of homeowners to refinance their debt has added to the rise in foreclosures.

The foreclosures are not limited to a specific geographic part of the country either.  They appear widespread:

Riverside County, Calif., had a 172 percent rise in homes entering the foreclosure process in the first quarter, the company said.

Foreclosures.com said other counties showing big increases were Clark County, Nev., which includes Las Vegas (143 percent); Los Angeles County, Calif., (92 percent); Miami-Dade, Fla. (90 percent); and Cook County, Ill., where Chicago is located (44 percent).

In a significant change of position, Senate Finance Committee Chairman Max Baucus (D-Mont.) now says it is not currently necessary to extend President Bush’s fast-track trade authority.

Baucus, the top Democrat on trade, told reporters Friday there is no immediate need to extend fast-track, which makes it easier for the White House to negotiate trade deals. The authority expires at the end of June and Bush and other administration officials have urged Congress to extend it.

But Baucus argued that the administration is not currently negotiating any new trade deals. “Once agreements start to come down the pike, then there will be a need for us to address [fast-track],” Baucus said.

This is a shift from January when the senator, who has been under pressure in Montana to reject an extension of fast-track, wrote in The Wall Street Journal that Congress should renew fast-track authority with some changes.

In the Jan. 4 column, Baucus wrote that trading partners would not negotiate with the U.S. unless Congress granted the president fast-track.

That is the same argument Bush repeatedly has made in calling on Congress to extend fast-track.

On Friday, Baucus said he is focused on extending another program expiring this year that is meant to help workers negatively affected by trade. The senator stated that it was urgent to pass an improved version of the trade adjustment assistance program with increased healthcare benefits for workers who lose their jobs due to trade. He also said legislation improving this assistance should “travel by itself” and not be attached to bills liberalizing trade.

The pressure in Montana appears to have had an impact on Baucus.  Last month, They Work For US ran radio ads targeting Baucus on trade issues.

Montana’s state Senate, which is controlled by Democrats, approved a resolution earlier this year asking Congress to create a replacement for fast-track, which prevents trade deals from being amended. Liberal groups have sought to highlight differences on trade between Baucus, who is seen as generally pro-trade, and freshman Sen. Jon Tester (D-Mont.). 

Today many CEOs, who already pull in enormous salaries and extensive benefits, stock and "goodbye" packages-have again stacked the deck in their favor by backdating their stock options.  Even The Wall Street Journal cited this as similar to placing a "bet on a horse race after it is over."   Even Bush is talking about "lavish salaries and bonuses for corporate executives".

This is a basic issue where we need to hold Democrats feet to the fire.  H.R. 1257, the Shareholder Vote on Executive Compensation Act introduced by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, is one step in the right direction.  It would allow shareholders to have an advisory vote on executive compensation, and take one important step toward opening up the process around CEO pay packages.  A shareholder voice in the executive compensation process will encourage boards of directors to consider shareholder interests before approving questionable compensation plans. 

The House Financial Services committee gave H.R. 1257 at 37-29 vote with all Democrats present voting in favor (go here and here for details on the mark-up).

We expect that H.R. 1257 will get the same treatment when it hits the House floor.

As families are ruined, whole neighborhoods are imperiled. A Chicago study found that a foreclosure on one home lowered the price of nearby single-family homes by 1.44 percent, on average. The more foreclosures, the greater the effect. Vacancies are a particular problem because home buyers and businesses shun areas with vacant homes, while the cost for abandoned property must be borne by municipal taxpayers, draining resources at a time of need.

Congress and state governments have to assess the extent of irresponsible and predatory lending in the subprime market, and determine whom to hold accountable. They must also come up with rescue plans for families and communities in harm’s way.

Many experts have concluded that the nation's real estate boom of recent years was fueled in part by weakened lending standards that sparked excessive demand and drove up prices. Now, some are worried that the looser standards may have permitted a boom of another kind -- a big expansion of mortgage fraud.

No one knows exactly how extensive the crime has become, but new data from the federal government suggest that it has jumped tenfold since 2000. Prosecutors are finding cases all over the country in which sham transactions, based on fraudulent appraisals, led to homes changing hands at far above their real value. Mortgage lenders failed to carry out the most elementary safeguards.

In some neighborhoods, mortgage fraud became so extensive that it drove up overall home prices. That is what happened in Atlanta. Hill, 50, was convicted last month in what authorities call one of the biggest mortgage-fraud cases in U.S. history. It involved 400 fraudulent loan applications; nearly $100 million in mortgages; and 120 closing attorneys, appraisers, mortgage brokers and others who prosecutors say were in on the scam.

Who was overseeing the banking industry?  Congress and the Bush administration put a lot of effort in to passing the onerous bankruptcy law that benefited the financial industry.  Maybe if they put as much energy in to regulating the financial industry, some of this could have been avoided.  Instead, it seems the financial repercussions of the growing mortgage scandal are really just starting to be felt by more and more American families. 

Michigan lawmakers are threatening to block a South Korean trade agreement completed last weekend by the administration because of opposition from the auto industry, which contends the deal will not balance auto trade between the countries.

“We haven’t counted the votes yet, but I can say this will be a very hard fight,” Sen. Debbie Stabenow (D-Mich.) said in an interview with The Hill. In a prepared statement, Stabenow said she would do “everything in my power” to defeat the Korea free-trade agreement (FTA).

Rep. Sandy Levin (D-Mich.), who chairs the Ways and Means trade subcommittee, also said he would oppose the deal unless it is changed in the 90 days before the administration signs it.

That poll, conducted March 2 - 5, 2007, asked,  "Do you believe that the United States is benefiting from the global economy, is being harmed by the global economy, or do you think the global economy has had no impact on the United States one way or the other?" By an almost two to one margin, the answer was the United States is being harmed: 48% responded "harmed" compared to 25% who replied "benefiting."     

Americans want fair trade.  In the next couple months, that's what we expect Congress to deliver.        

There are nine members newly elected last fall who rang up party unity scores of 100 percent. But all of these members represent strongly Democratic-leaning districts, with the exception of Ciro D. Rodriguez of Texas’ politically competitive 23rd District in and around San Antonio.

By contrast, the six Democratic freshmen with the lowest party unity scores all represent districts that Bush won in 2004 and are likely to face tough fights in their efforts to hold their seats in the 2008 elections.

They are Jason Altmire of Pennsylvania’s 4th (88 percent party unity score); Christopher Carney of Pennsylvania’s 10th District (91 percent); Brad Ellsworth of Indiana’s 8th District (91 percent); Heath Shuler of North Carolina’s 11th District (92 percent); Joe Donnelly of Indiana’s 2nd District (93 percent); and Baron P. Hill of Indiana’s 9th District (93 percent).

Ellsworth, Shuler, Donnelly and Hill were among the 12 Democrats who voted last week against the Democratic-written fiscal 2008 budget resolution, which passed anyway.

Hill is considered a freshman for the purposes of this story even though he previously served in the House from 1999 through 2004, losing his seat in the latter year, then staged a successful comeback bid in 2006. The same applies to Texas’ Rodriguez, who was first elected in a 1997 special election, lost his seat in 2004 but was returned to Congress (in a different district) in 2006.

Among the 233 House Democrats, the lowest overall party unity score in this year’s first quarter was registered by Mississippi Rep. Gene Taylor (81 percent), long considered among the most conservative and contrarian members of the Democratic caucus.

So far, it appears that most members are voting their districts.  But, it's still early and many of the most contentious votes await.   We're going to keep watching. 

Drug makers spent $155 million lobbying the federal government from 2005 to mid-2006, setting a record that they could outdo this year as Congress considers high-stakes legislation for the industry and consumers, said a public interest group in a report Monday.

Researchers at the nonpartisan Center for Public Integrity said that the drug industry spent nearly $111 million on lobbying in 2005, a record for the sector in any one year. The record pace appeared to be sustained in the first half of 2006, the report said.

Pharmaceutical industry officials said the report distorts the industry's role in Washington, which they say is primarily educational and scientific. Industry spending is designed to ensure that new drugs for intractable illnesses get government approval to be marketed, they said.

"The Center for Public Integrity's report, not surprisingly, misses the mark when it comes to efforts by America's pharmaceutical research companies to educate policy-makers," said Ken Johnson, senior vice president at the Pharmaceutical Research and Manufacturers of America. "Our priority has always been to help advance patient health and we have supported policies and programs that bolster patient access to safe and effective medicines."

Lobbying is only one facet of the industry's influence. Drug company sources also accounted for more than $19 million in political contributions to candidates in last year's congressional elections, mainly to Republicans.

The industry's lobbying budget enabled drug makers to field about 1,100 agents to influence congressional committees and administration offices in each of the last two years.

The industry achieved several of its major objectives, the report added, including upholding the government's ban on imports of lower-cost medications from abroad.

Now that the subprime market is imploding, it seems that better regulation a few years ago would have saved us. Even market stalwarts such as Larry Summers concede that the market didn't provide enough discipline to prevent lenders from pushing lousing loans. But the no-regulation crowd isn't giving up. Summers, for example, says that the answer to the current crisis is not to regulate because that's just the generals fighting the last war.

A regulatory moment comes around rarely, but one is nearly upon us. Senator Dodd and Congressman Frank are pushing hard on the lack of regulatory oversight of subprime lending, and folks on both sides of the aisle are beginning to ask the regulators and business people some tough questions.

But the no-regulation crowd hasn't given up. They want non-regulation in response to the crisis precipitated by non-regulation.

SNIP

A significant part of the problem in the subprime market is not simply that too many dollars were put into the hands of working families and people with bad credit. The problem is that too many exploding products--products that were designed from the beginning to become unaffordable--were sold around the country. Smarter, more effective regulation can help us avoid repeating that mistake.

Congress is working on a fix to this problem.  Predatory lending and an unregulated market have resulted in financial ruin for many middle class families.