DISPATCHES

CAN SOUTHERN DEMS MAKE A COMEBACK?

Republicans have finally cleared the Deep South of Democratic senators with the defeat of Sen. Mary Landrieu in Louisiana (12/6). Landrieu actually increased her share of the vote, from 42% in the general election to 44% in the runoff, despite being massively outspent by Republican-aligned groups that aired more than 6,000 TV ads against Landrieu, compared to about 100 ads supporting her, Markos Moulitsas noted at DailyKos.com (12/10).

Despite all those millions of dollars spent on ads, with virtually nothing happening on the Democratic side, Landrieu still narrowed her gap in the second round. However, another $10 mln spent for her or against her wouldn’t have made a difference, Moulitsas said. “In our highly polarized political environment, no one’s mind is being changed,” he wrote. “There are no ‘persuadables’ waiting to make up their mind after careful examination of television messaging. There are people who could be Republican. There are people who could be Democrat. Whoever gets more of their supporters and favorable demographic populations to the polls wins. And you don’t do that by blasting the airwaves with stupid ads.”

Some progressives are urging Dems to write off the South (Virginia and Florida excepted), but most Southerners over the age of 50 who now part of the Republican base have a history of voting Democratic. Economic populism might lure them back — as well as younger working-class white Southerners.

Phil Bredesen, Democratic governor of Tennessee form 2003-11, told Politico.com he has a message for the party: “I come out of the business world. If you have a product that’s not working, you don’t say, ‘Our customers are lazy’ or ‘Our customers don’t know what’s best for them.’ The ones that are successful say, ‘I need a better product.’”

In interviews with more than a dozen elected Democratic officials, strategists and academics, Politico.com found some optimism that the party can find at least selective success across the South in the not-distant future, particularly in states with growing minority populations like North Carolina and Georgia. But the party needs to spend less time on divisive social issues and more on middle-class economic concerns — and hope that when Barack Obama is out of the white house the party will get a second look from skeptical white voters, James Hohmann wrote at Politico.com (12/5).

“We’re just trotting out the same old nostrums: a little class warfare here and a nod to labor unions there and more money for X, Y and Z programs,” said Bredesen. “People are looking for a vision.”

Most believe that vision will be found in pocketbook issues, particularly related to the middle class, including a revival of the more populist economic message that resonated during the first half of the 20th century, Hohmann wrote. Support for student loans, Medicare and Medicaid, equal pay for equal work – all can be framed in a way that strengthens and bolsters the working class, Democrats say.

“As tough as 2014 is, you have to go watch the game film,” said Atlanta Mayor Kasim Reed, a Democratic rising star. “The first thing you’ve got to do is shake it off. Then stop whining. Midterms are hard for Democrats, but we have the opportunity in ’16 to win the presidency and to rebuild the party.”

Mike Beebe, the popular outgoing Democratic governor of Arkansas, believes “most” of his party’s struggles in the state can be traced to Barack Obama.

In 2008, Obama became the first Democrat to carry Virginia and North Carolina in decades. Dems dominated Arkansas’ congressional delegation, and Republicans did not field a candidate against Sen. Mark Pryor (D-Ark.) that year.

But in 2010, driven by an anti-Obama backlash, Republicans won three of the state’s four House seats and knocked off Sen. Blanche Lincoln (D). In 2012, Republicans seized control of the state House and Senate for the first time since right after the Civil War and captured the fourth US House seat. And Pryor was trounced this November.

“The No. 1 thing to be competitive in the South is to have Barack Obama not be president anymore,” North Carolina pollster Tom Jensen, who runs the Democratic firm Public Policy Polling, told Politico. “It’s just a simple reality that Southern whites really, really despise him in a way they have not despised any other president.”

Beebe says “it’ll help” for Obama to not be around, “but it’ll take more than that” to make up the lost ground.

Exit polls showed that Pryor received fewer than one-third of white votes last month. In Georgia, Democratic Senate candidate Michelle Nunn received a quarter of white votes, and Landrieu just 18% in the November voting.

“During this last election — if you made above minimum wage, and you already had health care — there wasn’t a hell of a lot in [the Democratic message] for you,” said Jim Hodges, Democratic governor of South Carolina from 1999 to 2003. “If the Republicans have a 1% problem, we have a 10% problem. We seem obsessed with the problems that 10% of the population has. Then voters don’t believe Democrats care about people like them.”

Even as Democrats were getting swamped, Arkansas overwhelmingly passed a minimum wage hike. Polling shows heavy support in the region for expanding Medicaid, reforming student loans and giving women equal pay for equal work.

Former Mississippi Gov. Ronnie Musgrove said all those things are good, but Dems need a broader, more comprehensive plan. “To me, the sweet-tea-and-grits crowd still likes our economic issues,” said Musgrove, who served from 2000 to 2004 and narrowly lost a 2008 Senate race. “Democrats need an economic message based on opportunity: education, job training, infrastructure rebuilding, and even health care – where voters know that Democrats can make a difference in these issues.”

Bredesen, the former Tennessee governor, put it more bluntly. “We’re known for gay rights, immigration, climate change and an unpopular health plan,” he said. “I think we’re on the right side on all those issues, but it’s not what people are looking for right now from government.

“I’ll be honest: it passes my understanding how particularly the past few years we’ve ignored the economic pain that’s been created in this country,” he added.

Bredesen said Democrats who are thinking about running for office need to adopt what he calls “the Walmart test.”

“When you think about what your platform is going to be, go to the nearest Walmart and stop someone in the aisle and tell them what you’re going to run on,” he said. “If that engages them and they’re interested, then you have a plan.”

GOP PUTS SWEETHEART DEALS IN MUST-PASS SPENDING BILL. As Congress neared a deadline to pass a $1 tln spending bill to keep the government open for nine months, some Democrats were balking at measures demanded by Republicans that, among other things, would let banks use federally insured deposits to trade in highly speculative derivatives (one of the factors that led to the 2008 economic crash). Another provision would allow wealthy individuals to give $324,000 to national party committees — 10 times more than the current limit of $32,400.

The 1,600-page bill, which was released late the night of 12/9 for action 12/11, funds most of the government through September 2015, but only funds the Department of Homeland Security through February. Republicans hope to restrict Obama’s immigration order when the party controls both the House and Senate.

The bill also cuts $60 mln from the budget of the EPA, which has lost $2.2 bln (21%) since fiscal 2010; it cuts $345.6 mln from the IRS and bans the tax agency from targeting organizations seeking tax-exempt status based on their ideological beliefs; it allows benefits from multi-employer pensions to be cut for as many as 1.5 mln retirees in an effort to save some of the nation’s most distressed pension plans; it cuts $93 mln from the Women, Infants and Children program; it reduces funding for the Pell Grant program for low-income college students by $303 mln to make up a shortfall in the money budgeted for companies that collect student loan debts on the government’s behalf. The bill bans the D.C. government from implementing the marijuana legalization that 69% of D.C. voters approved 11/4. The bill also orders the US Postal Service to continue six-day mail delivery, so there’s that.

Sen. Elizabeth Warren (D-Mass.) called on House Democrats to use their leverage to reject the bill until the measure that would roll back a piece of the Dodd-Frank financial reform law is removed. [The House passed the bill Dec. 11.]

“Who does Congress work for?” Warren said in a Senate speech (12/10). “Does it work for the millionaires, the billionaires, the giant companies with their armies of lobbyists and lawyers, or does it work for all the people? ... Now, the House of Representatives is about to show us the worst of government for the rich and powerful. The House is about to vote on a budget deal, a deal negotiated behind closed doors that slips in a provision that would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system.”

STATE A.G.’S ALLY WITH BIG ENERGY TO KILL ENVIRO REGS. Energy firms and state attorneys general have established a secretive alliance in an effort to derail environmental oversight and promote fossil fuels, the New York Times reported (12/7). Having reviewed thousands of emails and legal documents and undertaken dozens of interviews, the Times found that “Republican attorneys general have formed with some of the nation’s top energy producers to push back against the Obama regulatory agenda.”

In Oklahoma, open-records requests revealed that Attorney General Scott Pruitt (R) delivered a letter to the EPA in 2011 accusing the agency of significantly overestimating the air pollution caused by fracking. Pruitt did not mention that the letter was originally written by representatives of Devon Energy, one of the state’s largest oil and gas companies.

“The attorney general’s staff had taken Devon’s draft, copied it onto state government stationery with only a few word changes, and sent it to Washington with the attorney general’s signature,” the Times reported.

Devon Energy is a major supporter of the Republican Attorneys General Association, whose mission is electing Republicans to the Attorney General offices. The company has donated significantly to the campaigns of climate-change deniers, giving $800,000 to former Virginia Atty. Gen. Ken Cuccinelli’s gubernatorial campaign in 2013. Devon Energy also gave over a million dollars to the lobbying effort in support of the Keystone XL pipeline in 2012. Pruitt is head of the Republican Attorneys General Association, which has collected $16 mln this year — nearly four times the amount it collected in 2010.

According to the Times, at least a dozen states now have attorneys general working with “energy companies and other corporate interests” that are in exchange providing them with unheard of amounts of political funds. After this year’s elections, Republicans will hold 27 state attorney general offices starting in January — the first time they’ve had a majority in recent history.

The Times reported that Devon Energy “readily turned to Mr. Pruitt and his staff for help” as part of a broader national effort bringing together powerful energy interests and attorneys general. The establishment of a new Federalism in Environmental Policy task force by the offices of 19 state attorneys general has bolstered attempts to push back on federal actions to reduce ozone pollution, protect endangered species, regulate fracking, and limit greenhouse gas emissions. The scale of this coordination with corporate interests is unprecedented.

Pruitt changed 37 words out of 1,016 when repurposing a letter drafted by Devon lawyers for submission to then head of the EPA, Lisa Jackson, about the agency’s methane regulations. The Times published 80-plus pages of notes and documents showing the extent to which Devon and other energy companies have been working with state attorneys general to fight federal actions.

In responding to questions about his involvement with industry lobbyists, Pruitt said “it is the content of the request not the source of the request that is relevant.” He went on to say that Devon Energy is an important energy producer and job creator for Oklahoma and that the overreach of the federal government into the regulation of fracking is not only bad for Devon, but also would negatively impact citizens of the state.

A recent study published in the journal Science found that nearly all of the more than 2,500 small earthquakes that have hit Oklahoma in the past five years can be linked to the process of drilling for oil and gas. Spills related to fracking have also threatened water supplies in the state.

In another recent display of the coordination between energy firms and state-level Republican politicians, in early December the American Legislative Executive Council held their annual closed-door meeting in D.C. They pushed a number of anti-clean energy initiatives, including a resolution to abolish the EPA. (Ari Phillips, ThinkProgress, 12/8)

TAX CUTS FOR OIL COMPANIES PUT ALASKA IN A BIG HOLE. Alaska is the only state with neither a state income tax nor a state sales tax, Jeff Spross noted at ThinkProgress.org (12/5). For revenue, it relies entirely on federal funding and taxes on oil production in the state. In 2013, the oil taxes were cut under former Gov. Sean Parnell (R), which was supposed to encourage new drilling in the state. Instead, as the price of oil drops lower and lower, Alaska’s state budget is falling well into the red.

“[I]n recent years taxes on oil production have covered more than half the total budget ($13.5 bln including federal funds and capital projects) and 90% of the state’s discretionary spending ($6.5 bln to run agencies and schools),” the Washington Post reported (12/3). “Now, with prices under $70 a barrel, the budget deficit could balloon to more than $3 bln, about half of the state’s discretionary spending level.”

According to work in mid-2014 from Alaska’s Institute of Social and Economic Research (ISER) — when the revenue hole in the oil tax was anticipated to be $2.1 bln for this year — the overwhelming majority of the drop was due to the change in oil prices. Whether the old or new tax regime will bring in more revenue is disputed, but another ISER study projected that, under the most likely assumptions for future oil prices and production costs, the old structure would’ve brought in about $1.3 bln more revenue over the next five years.

Newly-installed Gov. Bill Walker — an independent who quit the Republican Party to run a joint-ticket campaign with Alaska’s Democrats in the recent midterm elections — supported a referendum to undo the tax cut, but it was narrowly defeated by voters back in August. Walker also supported taking up the expansion of Medicaid — the joint federal-state health insurance program for the poor — that’s on offer under the Affordable Care Act. Parnell had resisted the move, citing cost concerns.

In November, Walker told the Alaska Dispatch News that “he doesn’t plan to offer changes to the tax structure this session. But he plans to monitor whether the tax is having the desired effect of more oil in the pipeline and increased industry investment.”

According to previous reporting from the Dispatch News, oil production in Alaska has actually been slowly declining ever since the late 1980s, when it peaked at 2 mln barrels per day. Advocates for the oil tax cut had insisted the policy change would reverse that trend. But new state projections at the start of 2014 anticipated a continued decline to 312,000 barrels per day by the end of the decade, from 531,000 barrels per day in 2013.

VW ACCEPTS UNION IN TENNESSEE. Volkswagen, overruling opposition from state officials, has recognized United Auto Workers at the company’s plant in Chattanooga, Tenn., ABC News reports. It is the first time UAW has been recognized in a foreign-owned assembly plant in the South, Reuters reports.

The certification does not enact collective bargaining, but it gives UAW the highest level of representation available under a recently enacted company policy that is similar to a German-style Works Council at the plant. The company will be able to meet bi-weekly with human resources and monthly with the executive committee and will be guaranteed use of company space for union purposes.

The company hired an outside auditor to verify that at least 45% of workers have signed representation cards. UAW has said it actually signed up a majority of workers, but the 45% threshold was the highest available under the company policy. UAW lost a representation election in February year after Tennessee politicians campaigned against the union and threatened to withdraw state incentives needed to expand the plant if the union won.

COLO. CREATES CREDIT UNION TO HANDLE POT CASH. Nearly a year after Colorado’s first marijuana shops opened, the thriving industry’s biggest problem is deciding what to do with all its cash. Now, the state banking commission believes it has found a way to free pot entrepreneurs from the regulatory haze between federal banking laws, DEA policy and the state’s right to experiment with legalization of recreational and medicinal use of the herb: It approved a charter for The Fourth Corner Credit Union.

Alan Pyke noted at ThinkProgress (12/9) that business has been very good for marijuana growers and sellers since the state’s carefully designed legalization regime came online in early 2014, but traditional banks have refused to do business with the industry for fear of inviting punishment from regulators that are required to enforce the federal prohibition on the drug. That inability to access banking services has pushed the businesses into the arms of security firms that specialize in moving and safeguarding huge piles of cash for the marijuana industry.

As the cash stacked up and security concerns mounted, Colorado’s banking regulators came to view that problem as justification for approving a pot bank.

A state charter for Fourth Corner requires the Federal Reserve to give the credit union access to the technological infrastructure for processing payments and conducting electronic transactions. But it might take Fourth Corner two years to qualify for deposit insurance so Fourth Corner may have to seek private insurance instead.

Another hurdle is the Colorado Bankers Association, which advises commercial banks that doing business with Fourth Corner is too risky to be wise because any money coming out of Fourth Corner is inherently tied to the marijuana trade, so any bank that accepts transactions originating at Fourth Corner risks incurring legal liability, according to the group. As a result, “it is unclear if checks and/or drafts drawn on these credit union accounts will be accepted by other institutions not serving the industry.”

“We consider ourselves regulated, legitimate businesses. We just want to have the same access to banking that other legitimate businesses have,” marijuana dispensary owner Kristi Kelly told USA Today. “I don’t want to pay people in cash.”

KING COAL: ‘DEAD MAN WALKING’. 'King Coal' ran into a slag heap of bad news in 2014, Tom Kenworthy wrote at ThinkProgress (10/9). From a groundbreaking US-China deal to slash carbon pollution, to a plan by the Environmental Protection Agency to impose carbon limits on existing coal-fired power plants, to crumbling prospects for exports to Asia, to more dire predictions of coal plant retirements in coming years, to tanking stock prices for many of the industry’s giants, the US coal industry had little to celebrate this holiday season.

Taken together, those developments give plenty of reasons to recall the 2011 pithy assessment of coal’s future by the head of asset management at Deutsche Bank. “Coal is a dead man walking,” said Kevin Parker. “Banks won’t finance them. Insurance companies won’t insure them. The EPA is coming after them … And the economics to make it clean don’t work.”

On the domestic front, the EPA proposed a plan in June to cut carbon pollution from existing electric power plants by 30% from the levels released in 2005. Those facilities are the largest US source and emit about one-third of our total carbon. Congressional Republicans have vowed, with their upcoming majority rule in Congress, to block the initiatives.

The EPA announcement came shortly after the US Energy Information Administration projected that low natural gas prices and slower electricity demand would accelerate the pace of coal-fired electric plant retirements. The agency said 60 gigawatts of capacity would retire by 2020, with the bulk of that coming by 2016. In 2012, there were 1,308 coal-fired generating units in the US, with 310 gigawatts of capacity, and in that year alone 10.2 gigawatts was retired.

The EIA said implementation by 2016 of another EPA rule cutting emissions of mercury and air toxics would drive part of the new wave of projected coal plant retirements. The Supreme Court’s decision in April to uphold yet another key EPA tool for fighting pollution, the “Cross-State Air Pollution Rules” (CSAPR), further cemented the dirtiest coal-fired power plants as untenable business propositions.

In November, during a visit to China, President Obama and China’s president Xi Jinping jointly announced an agreement to cut their nation’s greenhouse gas emissions. Under the deal, the US pledged to cut its emissions 26 to 28 percent below 2005 levels by 2025, advancing an earlier US target of 17% below the 2005 baseline by 2020.

China agreed to reach peak carbon emissions in 2030, and to get 20% of its energy by that year from sources that don’t burn fossil fuels. China would have to have an additional 800 to 1,000 gigawatts of zero-carbon energy in place by 2030 to meet that goal, close to the total amount of energy now generated by the US from all sources.

Analysts quickly predicted that China’s pledge on renewables and greenhouse gas emissions would hurt nations that export coal to that nation, which earlier this year had announced a resumption of import taxes on some foreign exporters and which has been modernizing its domestic coal industry in ways that are likely to reduce imports.

For the US coal industry, which has seen exports as its great hope to offset coal’s shrinking share of the domestic energy market and stiff competition from cheap natural gas, China’s plans to reduce coal imports is a daunting prospect. Exports this year are already projected to fall about 19% below 2013, according to the EIA.

Plans to build new coal export facilities in the Gulf Coast region and Pacific Northwest have fallen by the wayside. With the announcement in June by Oregon regulators that they are denying a permit for a proposed Ambre Energy terminal on the Columbia River, four of the six proposed facilities in Washington and Oregon have been cancelled or are now questionable. A half-dozen proposed new facilities in the Gulf Coast region have also been cancelled or apparently put on hold.

Near the end of 2014, activists also served notice to the Obama administration that they are ratcheting up the fight against the Bureau of Land Management’s continued aggressive leasing of federally-owned coal from the Powder River Basin in Wyoming and Montana, the source of about 40% of US coal production.

In a lawsuit filed in US District Court in Washington, DC, financed by the Paul G. Allen Family Foundation, Friends of the Earth and the Western Organization of Resource Councils are seeking to force the BLM to conduct a full updated environmental review of the coal program’s impact, including its effects on climate change.

O’CARE KEEPS INSURANCE PREMIUMS IN CHECK. Health care premiums for policies available through the Affordable Care Act will increase slightly on average in 2015, growing at a far slower rate than they did before President Obama signed the reform into law in 2010, Igor Volsky reported at ThinkProgress (10/5).

Premiums will decrease, on average, in at least 14 of the 35 states where the federal government has established a health-care exchange, the Obama administration reported. In the remaining 21 states, premiums will fluctuate between a 2% increase in Utah and Wisconsin to a 28% spike in Alaska. On average, the report concludes that premiums for the second-lowest-cost policy will rise “by 2% on average this year before tax credits, while premiums for the lowest-cost silver plan will increase on average by 5%.”

Prior to reform, an analysis conducted for the Commonwealth Fund, found that on average, premiums in the individual and small group markets rose by more than 10% annually.

The report also notes that more than 25% more insurers are participating in the exchanges in 2015, meaning that “91% of consumers will be able to choose from 3 or more issuers—up from 74% in 2014.” The administration is encouraging enrollees who had signed up for coverage in 2014 to shop around this year, noting that the plans offering the lowest prices may have changed as new issuers enter the market and compete for customers. Approximately two-thirds of existing customers will be able to find coverage for $100 a month or less.

FREEDOM ISN’T FREE IN CHEM SPILL. Gary Southern, former executive of Freedom Industries, whose tank leaked chemicals (1/9/14) into the Elk River, a tributary of the Kanawha River, that tainted the water supply of 300,000 people around Charleston, W.V., for several days, was arrested in Florida (10/8) on a charge of bankruptcy fraud, lying in a bankruptcy case and committing wire fraud by filing false documents in a bankruptcy case. The complaint unsealed in US District Court in Charleston said Southern tried to protect his $7.7 mln net worth from lawsuits. Freedom declared bankruptcy eight days after the spill. Southern was released on $100,000 bond with travel restricted to southern West Virginia and middle Florida. He was required to hand over his passport and permanent resident card. (Charles Pierce, Esquire, 10/10)

From The Progressive Populist, January 1-15, 2015

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