Budget stalemate gives airlines huge tax bonus, so they increased fares

Chris may have written about this the other day, but too bad.  It bears repeating.

A Congressional stalemate over funding means that the government cannot currently collect taxes of around $45 on a $400 round-trip ticket. But rather than passing that savings along to travelers, the country’s major carriers actually raised fares over the weekend to make up the difference.

American Airlines, Southwest Airlines, US Airways and jetBlue were first off the runway to raise prices on Friday night by at least 7.5% to keep the bottom-line ticket price unchanged, despite the tax-break. United, Delta and Continental followed suit Saturday night, while Frontier and Virgin America hiked prices on Sunday night, according to Tom Parsons, CEO of BestFares.com.

These companies are evil. I've always said, avoid American carriers like the plague. They exist to violate you, nothing more. They are the worst example of American capitalism - profit uber alles. Perhaps some day Washington will start an illegal price fixing investigation into why every single airline charges the exact same price, to a penny, for the same flights. They're clearly working together, but they've bought off Washington, so nobody in town will do a thing to stop them. Read the rest of this post...

Senate debt vote postponed til 1 PM ET Sunday

No vote tonight. No deal yet. The key players, including the President, are still talking.

Reid's planning a vote on his bill tomorrow at 1 PM ET. But, of course, this could all change. Read the rest of this post...

John and Joe on Twitter

In addition to our official Twitter accounts for the various blogs (AMERICAblog, AMERICAblog Gay, and AMERICAblog Elections: The Right's Field), Joe and I also have our personal Twitter accounts (@aravosis and @joesudbay).

Our blog Twitter feeds are composed mostly of our blog posts, whereas our personal feeds are a mix of personal observations and retweets of some of the best political tweets we can find.  To make it easier to follow our personal tweets, Joe and I have set up this page where you can read our tweets even if you don't entirely understand Twitter.  Enjoy.

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How Reid, McConnell, Boehner, Pelosi and Obama could shove us into another recession

It's criminal the way politicians in Washington are ignoring the very real possibility that this budget deal could plunge us into another recession (just in time for Obama to lose re-election and Democrats to lose the Senate). From Bloomberg:

Congressional agreement on budget cuts could cause troubles of its own. Less spending by the Federal government would be “a real problem” for the economy, Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia, said in a July 29 interview on Bloomberg Television.

“We could see a growing risk of recession in the fourth quarter, early 2012, if in fact the federal government gets it together and makes aggressive budget cuts,” LeBas said.

Here's some pretty direct evidence that the stimulus did help the economy grow, and cut backs in federal spending helped the economy shrink (or at least grow at a smaller rate).

No one, and I mean no one, on the Hill, at the White House, anywhere is talking about what these grand bargains are going to do to the economy next year. I don't mean this as a personal shot, but it's easy to tell people to eat their spinach when you make a government guaranteed salary of $400,000 a year, or even a congressman's guaranteed salary of $174,000 a year.  It doesn't mean you don't care, but it does mean that the concern isn't personal, like it is for the rest of us.

If you're actually worried about how you're going to pay your mortgage, or feed your family, or stop your car from being repossessed, all this hysteria about cutting the deficit - and not just ignoring the economy, but actually proposing policies that may send us into another recession (a direction we're already heading) - doesn't sound all that grand at all.

Mark my words: No one, not Reid, McConnell, Boehner, Pelosi or Obama is willing to answer the simple question of what these grand bargains are going to do to the economy next year, and in the years to come.  And sadly, the media doesn't seem terribly interested either. Read the rest of this post...

McConnell: Boehner and I are now dealing directly with Obama on debt ceiling

The Senate has rejected the House bill and the House just voted down Reid's bill (even though Reid's bill isn't finalized) by a vote of 173 - 246. So, why does this matter? According to the NY Times, it makes Minority Leader Mitch McConnell a key player:

The pre-emptive vote could strengthen the hand of Senator Mitch McConnell of Kentucky, the Republican leader, as he seeks additional concessions from Mr. Reid.

Mr. Reid, for his part, said Mr. McConnell was dragging his feet on beginning talks to find a compromise solution, and he called on Republicans to offer their plans to alter his measure.

And, it gets worse. McConnell wants to be the one running the show -- and bypassing Reid to go directly to Obama:

Senate Minority Leader Mitch McConnell (R-Ky.) said Saturday he and Speaker John Boehner (R-Ohio) are fully engaged with the White House on a debt deal and expressed optimism an agreement will be reached.

“I’ve spoken with the president and the vice president within the last hour and a half," McConnell said at a press conference with Boehner shortly after the House rejected Senate Majority Leader Harry Reid's (D-Nev.) debt ceiling plan.

"We are now fully engaged with the one person … who can sign a bill into law,” McConnell told reporters.

Yeah, that doesn't inspire confidence. Obama's one-on-one interactions with the other GOP leader didn't pan out so well.

Ken Bazinet tweeted that Reid and Pelosi were "summoned" to the White House. (UPDATE @ 5:43 PM: The White House meeting is over. Via Roll Call's John Stanton:

The question is are we closer to agreement? The answer is no - sen. Reid on #debt deal

)

Not sure what kind of game McConnell is playing, but let's hope he's not playing the President. The sad part is that it will probably easier for McConnell to get 13 Democrats to vote for his plan than it has been for Reid to get seven GOPers on board with him. Read the rest of this post...

Murdoch’s staff at NY Post told to "preserve and maintain" info. on phone hacking

Well, well, well:

News Corp. has told staffers at its New York Post tabloid to "preserve and maintain" any information related to phone hacking or government payoffs in exchange for scoops.

The memo comes in response to an ongoing probe in Britain about phone hacking done by News Corp.'s now-shuttered News of the World tabloid. That paper was found to have hacked into the voice mail messages of celebrities, members of the Royal Family and even victims of crime and terrorism.

"All New York Post employees have been asked to do this in light of what has gone on in London at News of the World, and not because any recipient has done anything improper or unlawful," said the paper's Editor Col Allen in a memo to his staff.

Uh-hum.

Is the same memo being sent to FOX News? Read the rest of this post...

Did Obama just come out for same-sex marriage on Facebook?

Sure looks that way. Read the rest of this post...

Senate debt vote expected at 1 AM. Still no final deal.

Last night, the Senate put the kibosh on John Boehner's debt plan. Late, late tonight, the Senate will take its first vote on a compromise. From the Washington Post:

The Senate is driving toward a climactic and dramatic vote at 1 a.m. Sunday that could determine whether a bipartisan deal to raise the nation’s legal borrowing limit is possible or a government default is likely.

What that deal might look was still deeply uncertain Friday, but talks were underway between Democrats and Republicans in the Senate about methods to circumvent some of the chamber’s most cumbersome procedures to allow the Senate to act more quickly if a compromise is reached.

According to The Hill, there's still no assurance that the Senate bill will pass, which means there's going to be more compromise:

According to a Senate Democratic aide, Reid also increased the total level of spending cuts from $2.2 trillion to $2.4 trillion, in part by using the January baseline — a budget maneuver House Speaker John Boehner (R-Ohio) used on a previous version of his debt-limit plan. The January budget baseline does not count cuts Congress implemented in legislation passed this spring to avert a government shutdown.

So far Reid has had trouble attracting Republicans to his bill. Centrist Republican Sen. Scott Brown (Mass.) said he would vote for it, but otherwise it has received scant bipartisan support.

More compromise means giving even more away to the GOPers.

We've got til midnight Tuesday night to avoid default. For most of that, it means we've got til midnight Tuesday to see how badly our 401ks tank. Read the rest of this post...

Moody's eyes Spanish debt downgrade

The ratings agencies are definitely annoying most Western governments these days. They've suggested downgrading the US debt, Greek debt, Spanish debt, Portuguese debt, you name it. These are of course the same ratings agencies that loved the heaping piles of steaming dog turds that triggered the global recession. When they were called in front of Congress, they had the simple excuse that their ratings were merely suggestions so they could not be held accountable. In the real world that is not the case. Lower debt ratings means higher debt financing.

While it's fair for all of us to be upset with the latest round of downgrades and threats of downgrade, the real anger should be redirected to the failure to call them out during the crisis. It was an exposed industry, ripe for reform. They were given a free pass during the crisis and no effort has been made to reform the industry or hold it accountable for its actions. If the industry is not going to be forced to behave differently, why would it? Just as the bankers are back to doing the shady business that they did before the crisis, the ratings agencies felt no need to reform.

Blame the lack of political leadership for this.

Moody's Investors Service on Friday put the Spanish government's bond ratings on review for a possible downgrade, citing funding pressures and a precedent set by the euro zone's debt package for Greece.

Moody's said any change in the Aa2 rating would likely be limited to one notch.

As he always does, Robert Reich had an interesting blog post about the ratings agencies earlier this week. Read the rest of this post...

Pataki hints at 2012 presidential run

Now that Pawlenty is disappearing, the GOP could use a new candidate to put the crowds to sleep. Pataki hardly seems radical enough to win over the radical right GOP voters.

Former New York Gov. George Pataki said Thursday he's not sure if any of the current field of GOP presidential hopefuls can beat President Obama in 2012.

But according to New Hampshire's WMUR-TV, Pataki suggested he knows someone who might be able to win back the White House for the GOP. That person, he said, is George Pataki.

"I'm seriously thinking about running," he said, adding that his decision will come "very soon."

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