TPM News

Republicans have blanketed the airwaves in the past week, carrying a single message that's been well-amplified, with almost no skepticism, on MSNBC ...

[Sen. John] ENSIGN [R-NV]: You know, politically, what we're trying to do is choose the right policy, something that actually stimulates the economy, that creates jobs. ... If we could lower the corporate tax rate, that would be one of the best things that we could do to make American business more competitive in the world and actually help stimulate the economy.

... not to mention CNBC:

[Rep. Spencer] BACHUS [R-AL]: We have said let's do tax cuts, let's let the American people make the decisions on how they'll spend the money. That will stimulate the economy more than bringing all that money to Washington and then distributing it out in all sorts of government programs.

... and, of course, on Fox News:

[Rep. Mike] PENCE [R-IN}: What House Democrats have done here is get out a dusty old wish list of liberal spending priorities, dump it all in a bill, and throw in a few token tax cuts on top of it. That's not going to create jobs. It's not going to put this economy back on its feet.

There's only one problem with the stimulus debate's focus on whether the percentage of spending on tax cuts should be 40 or 20, as opposed to the outright merits of such breaks: Tax cuts are an ineffective economic stimulus.

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Sources reveal that a probe into the actions of a Houston-based industrial waste-handling firm is focusing on several Detroit politicians, including former mayor Kwame Kilpatrick. Others mentioned to the Detroit Free Press were Bernard Kilpatrick, Kwame's father, and Monica Conyers, the president of the Detroit City Council and the wife of Rep. John Conyers (D-MI). Sources say that there is still little direct evidence that Synagro Technologies gave any bribes to city council members in order to win a $1.2 billion contract with the city. (Detroit Free Press)

Hartford mayor Eddie Perez was arrested on Tuesday for bribery related to the renovation of his home. Perez allegedly used a city contractor to do $40,000 worth of renovations to his kitchen and bathroom and only paid $20,000 for it even after investigators started asking questions. The contractor, Carlos Costa, had previously held a $5 million streetscape contract with the city. (Associated Press)

American International Group, the troubled insurance giant that has seen eye-popping losses and was essentially nationalized in September, has announced that it will pay bonuses to employees of a division that sold credit default swaps for the company. These are the same risky financial products that caused the insurer's staggering losses. According to an expert, it is possible that AIG is contractually obliged to pay bonuses to its employees. This illuminates a shortcoming of the government's TARP program, of which AIG has been the largest recipient. (Associated Press)

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Call them the mini-Madoffs: Investment advisers accused of conducting Ponzi scams that echo the one allegedly pulled off by the disgraced Wall Street money manager.

In recent weeks, both the Wall Street Journal (sub. req.) and the New York Times report, a spate of mini-Madoffs has come to light

The Journal looked at SEC records and found an increase in cases in which the agency alleged Ponzi schemes. Last year, it brought at least 23 Ponzi cases, up from 15 in 2007. This year, it has already filed four. The paper explains why:

More schemes are emerging now, experts say, in part because of the economic downturn. Tough times have prompted people to seek to cash in their investments, only to find out their money is missing. New investment also dries up in slumps, making it harder for fraudulent funds to replenish their coffers and make the payments needed to keep their operations going.

Let's go down the list of the mini-Madoffs to emerge recently:

- Arthur Nadel, the missing Florida hedge-fund adviser, was arrested yesterday, accused by the feds of defrauding clients to the tune of millions of dollars.

- Nicholas Cosmo, a Long Island money manager, raised more than $370 million, promising eye-popping returns of 48 percent by funding commercial loans. But he lent little money and only about $746,000 remains, according to an affidavit. Cosmo surrendered to authorities Monday.

- Joseph S. Forte, an investment manager in Phildelphia, was accused by the SEC earlier this month of running a Ponzi scheme since at least 1995, claiming returns as high as 38 percent and raising $50 million.

- Darren Palmer, an Idaho Falls money manager, is being probed by state authorities, with investors claiming they lost up to $100 million in a Ponzi scheme.

- Marcus Schrenker, an Indiana financial adviser, was arrested in Florida earlier this month after apparently trying to stage his own death in a plane crash. He faces charges, in both states, of swindling investors.

- Rod Cameron Stringer of Texas is alleged by the SEC to have set up a Ponzi scheme that lured elderly investors, claiming annual returns of 61 percent.

- Robert C. Brown of California is accused by the SEC of using millions in clients' money "to pay for lavish personal expenses, such as upkeep on his Ferrari, limousine services and shopping trips."

- Anthony James of Florida set up a "classic Ponzo scheme", says the SEC, through which he got access to at least $2.4 million in client funds, which he used to pay for a six-bedroom home, a Porsche and season tickets to the Miami Heat.

There are more.

Sounds like the SEC's plans to beef up their enforcement unit can't happen quickly enough.

The House of Representatives is slated to vote on its $825 billion economic recovery bill today, as Republicans fret over the level of bipartisanship on display and Democrats largely look the other way.

But what can we really expect after all the noise of the past few days? Will last night's dinner at the White House really sway any centrist GOPer to support the stimulus? Will the bill's relatively weak spending on infrastructure redevelopment persuade any liberal Dems to vote no? A few lawmakers to watch:

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Appearing last night on Fox News for an interview with Sean Hannity, Norm Coleman made an interesting appeal for money: That he can win this race if "good Americans" contribute to help him pay his legal bills, versus the lefties out there who support Al Franken:

"Sean, this recount is an expensive proposition. Al Franken's got George Soros, he's got I need just good Americans to contribute," said Coleman (emphasis his own). ", It's an expensive proposition. Don't let George Soros, or the far left buy this race."

A few Republicans got in trouble in the 2008 elections for using phrases like "real Americans" to describe their supporters. But now that the election is over, and this is purely about courting the base and bringing in the necessary cash, Republicans can really say whatever they want.

National GOP Targeting Reid -- And Bailouts -- With New Ad The National Republican Senatorial Committee is running its first ad of the 2010 cycle -- against Senate Majority Leader Harry Reid, in the Reno media market. The ad also cements the GOP's new message as the anti-bailout and anti-stimulus party, as opposed to the leadership's pro-bailout policies last Fall:

The GOP successfully took out the previous Senate Democratic leader, Tom Daschle, back in 2004. The Dems made a similar play against Senate Republican Leader Mitch McConnell in 2008, but only managed to keep him to a 53%-47% win.

Obama's Day Ahead President Obama is holding a series of meetings this morning, receiving his regular daily briefing, an economic briefing, conferring with senior advisers, and meeting with business leaders. At 11:15 a.m. he will be speaking on the economy after his meeting with business leaders. At 3:30 p.m. he will be meeting with Secretary of Defense Robert Gates.

Minnesota Trial Keeps Going Today is the third day of the Minnesota election-contest trial, scheduled to reconvene at 10 a.m. ET. Norm Coleman's legal team is expected to continue their argument that Coleman voters have been unfairly disenfranchised compared to Franken voters, due to election officials in GOP areas being more strict on the matter of improperly-rejected absentee ballots.

House Voting Today On Stimulus The House of Representatives will be voting some time later today on an $825 billion stimulus package. Democrats are expected to vote overwhelmingly for the mix of public spending and tax cuts, while the Republican leadership has signaled their opposition.

Illinois Senate Hears Blago Tapes The Illinois state Senate yesterday got to hear Rod Blagojevich's own voice on the FBI wiretaps, in a trial that Blago himself is boycotting as unfair. "It sounds like a couple of organized crime figures out preparing to break some kneecaps," said GOP state Senator Dan Cronin. "It's just horrible. It's nauseating. It's sickening."

WaPo: RNC Race A GOP Referendum On Bush The Washington Post reports that much of the opposition to RNC chairman Mike Duncan, who faced five different opponents, has come down to conservative resentments against the man who picked Duncan: Then-President George W. Bush. "Most of us strongly supported the Bush administration through the entire two terms," said RNC member Curly Haugland of North Dakota, "but in the last few months, this bailout and the abandonment of capitalism really kind of sealed it."

Bunning: Yes, I Am Running Again Sen. Jim Bunning (R-KY) is firing back at Republicans who are spreading the idea that he hasn't been working on his re-election campaign -- such as his own co-Senator Mitch McConnell. "He either had a lapse of memory or something when speaking to the Press Club last week when he said that he didn't know what my intentions were," said Bunning.

Jill Biden Starts New Teaching Job In D.C. Area Jill Biden began her new job yesterday at Northern Virginia Community College, as an adjunct professor teaching two English courses. "A lot of them either didn't know that she is the wife of the vice president, or act any differently," said spokeswoman Courtney O'Donnell.

At a brief press conference with reporters just now, held after the Minnesota election court proceedings ended for the day, Norm Coleman expressed his pride in the witnesses his legal team had called, regular voters whose absentee ballots haven't been counted yet.

Now remember, their witness roster included a guy who admitted to obtaining his absentee ballot through forgery by his girlfriend, and is demanding that his vote be counted.

"You know there's been so much discussion about process, but today we saw the human side of this, and that's what this is really about," said Coleman. He added a bit later: "For me it was heartwarming to be here to see Minnesotans come forward and be so passionate, so passionate, about the right to vote and be counted."

To be sure, some of the witnesses were sympathetic -- such as Gerald Anderson, a 75-year old who has gone legally blind and who believes his signature on his ballot envelope didn't match the one on his ballot application because of his lost vision. But come on, they really called the forgery guy?

(Special thanks to The Uptake for carrying the presser.)

Oy vey. Sen. Chuck Grassley (IA), senior Republican on the Finance Committee, just won approval of a one-year fix for the alternative minimum tax as part of the upper chamber's stimulus bill, at a cost of $70 billion over 10 years.

Anyone looking for background on what the AMT means for taxpayers can find it here. But what this means for Congress is a potentially huge headache.

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White House Press Secretary Robert Gibbs was just asked at a briefing about Congress's subpoena, issued yesterday to Karl Rove, seeking his testimony on the US Attorneys firings.

Gibbs replied that the White House counsel's office "is studying those issues and will advise us when they have a recommendation."

As we reported earlier, the ball is now largely in President Obama's court as to whether Rove can continue to defy Congress's subpoena.

We'll keep you posted.

House Democrats have removed a provision from their stimulus bill that would exempt states from the need to get waivers for covering family planning under Medicaid. The family-planning aid has been the subject of repeated Republican attacks over the past few days, and health care advocates were dismayed by the Democrats' decision to give in on its removal.

"We are disappointed that the Medicaid Family Planning State Option, a common-sense provision to expand basic health care to millions of women, including many who have lost their jobs in the current economic downturn, was a victim of misleading attacks and partisan politics, and dropped from the economic stimulus bill," Planned Parenthood for America President Cecile Richards said in a statement today.

But the House's move didn't necessarily mean that the family-planning aid is dead. After all, the Senate still has to act and could include the provision in its stimulus bill -- right?

Maybe not.

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