Thanks to New Hampshire blogger Dean Barker I learned something new today about Senator Judd Gregg. According to the Associated Press,

President Barack Obama’s former nominee to become commerce secretary, Sen. Judd Gregg, steered taxpayer money to his home state’s redevelopment of a former Air Force base even as he and his brother engaged in real estate deals there, an Associated Press investigation found.

Gregg, R-N.H., personally has invested hundreds of thousands of dollars in Cyrus Gregg’s office projects at the Pease International Tradeport, a Portsmouth business park built at the defunct Pease Air Force Base, once home to nuclear bombers. Judd Gregg has collected at least $240,017 to $651,801 from his investments there, Senate records show, while helping arrange at least $66 million in federal aid for the former base.

Sadly, this isn’t unprecedented or even the most egregious example of members of Congress profiting from earmarks. Former House Speaker Dennis Hastert sold real estate for nearly $2 million in profits after he secured federal earmarks to construct the Prairie Parkway near land he owned.

What looks corrupt in politics turns out to be legal more often than not, and that seems to be the case here. The AP says Senate ethics rules do not permit senators to direct earmarks to projects “solely” in order to benefit themselves or their family members financially, but of course Gregg could point to all kinds of benefits from redeveloping the former base.

“I am absolutely sure that in every way I’ve complied with the ethics rules of the Senate both literally and in their spirit relative to any investment that I’ve made anywhere,” Gregg told the AP. “These earmarks do not benefit me in any way, shape, manner financially, personally or in any other manner other than the fact that I’m a citizen of New Hampshire.”

Still, one wonders whether this story prompted Gregg to withdraw his nomination for Commerce Secretary. Whatever his reasons, we’re better off without him.

Members of Congress should stick to the usual form of legalized corruption and only seek earmarks that would personally profit their large campaign contributors.

No one raises ethical concerns about that behavior. As a bonus, donors who stand to gain from the earmarks may go the extra mile during the incumbent’s next tough campaign.

President Barack Obama will present his first budget request to Congress today.

Early leaks indicate that he will propose some tax increases on the wealthiest Americans as well as some spending cuts to help pay for health care reform.

Ezra Klein, an excellent blogger on health care, is excited about what’s in the budget regarding health care reform. Although there is no detailed plan, Obama is submitting eight principles that should define health care reform efforts. Klein believes the principle of “universality” is likely to lead Congress to propose an individual mandate to hold health insurance.

I support mandated coverate only if there is a public plan that any American, regardless of age and income, can purchase as an alternative to private health insurance. The public plan would work like Medicare, in that individuals would be able to choose their own providers. Unfortunately, the Massachusetts model of mandatory private insurance without a meaningful public option has left a lot of problems unsolved.

It is not clear how much Obama will do to roll back George W. Bush’s tax cuts for the wealthiest Americans. I am with House Speaker Nancy Pelosi and others who would prefer to start rolling back tax cuts for the top 1 percent immediately. Last month the president seemed to be leaning toward letting those tax cuts expire over the next two years rather than fighting to repeal them this year.

According to Bloomberg,

President Barack Obama’s first budget request would provide as much as $750 billion in new aid to the financial industry […]

No wonder Obama went out of his way to make the case for helping banks during his address to Congress on Tuesday night. I firmly oppose shelling out another $750 billion toward this end, especially since the bailout money we’ve already spent hasn’t accomplished the stated goals of the program.

According to AFP, today’s budget proposal will include a plan

to raise money through a mandatory cap on greenhouse emissions.

Obama’s budget director Peter Orszag earlier estimated that a cap-and-trade scheme could generate 112 billion dollars by 2012, and up to 300 billion dollars a year by 2020.

Cap-and-trade may be more politically palatable, but a carbon tax may be a better approach for reducing greenhouse-gas emissions.

In cabinet-related news, have calculated that expanding the food-stamp program

Interior Secretary Ken Salazar wasn’t the top choice of environmentalists, but I was pleased to read this post:

Interior Secretary Ken Salazar canceled oil shale development leases on Federal lands in Colorado, Utah and Wyoming and announced that the Interior Department would first study the water, power and land-use issues surrounding the development oil shale.

Meanwhile, Homeland Security Secretary wants to review US Immigration and Customs Enforcement raids and told Congress that employers should be the focus of raids seeking to enforce immigration laws at workplaces. Obviously, swooping in and arresting a bunch of undocumented workers does nothing to address the root of the problem if employers are not forced to change their hiring practice.

Yesterday Obama named former Washington Governor Gary Locke as his latest choice to run the Commerce Department. Locke seems like a business-friendly Democrat, which is a big improvement over conservative Republican Judd Gregg, who thankfully withdrew his nomination for this post.

Republicans have been freaking out because of alleged plans by the Obama administration to “take control of the census.” Of course the GOP wants to continue the practices that have caused millions of white Americans to be double-counted in past censuses while millions more Americans in urban centers (largely non-whites) were not counted at all. Click here for more on the political battle over the census.

This thread is for any thoughts or comments about Obama’s cabinet or budget.

Senate Republicans finally gave up on obstructing Hilda Solis’ nomination as Secretary of Labor today, and the Senate easily confirmed her by an 80 to 17 vote. Chuck Grassley was among the 24 Republicans who voted to confirm Solis. Tom Harkin did not vote but clearly would have voted yes, along with all the other Democrats, had he been in the chamber.

Solis’ confirmation was tied up for weeks in committee after Senator Mike Enzi of Wyoming put an anonymous hold on her nomination. Today even he voted yes, indicating that he had no solid grounds for blocking her from serving in the cabinet. I suspect Enzi was just trying to see whether he could trick Barack Obama into withdrawing her nomination as a gesture to Republicans.

Solis’s staunch longtime support for organized labor will make her a target for the right-wing noise machine, but who cares?

For more on why Solis is one of Obama’s best appointments so far, read this piece by Meteor Blades and this one by Paul Rosenberg, who notes,

People just loved talking about what a great political leader Hilda Solis is. I didn’t have nearly enough room to include all the good stuff that was said.

Calitics takes a first stab at handicapping the special election in California’s 32nd district, which Solis is vacating. It’s a safe Democratic seat but will have a competitive primary.

Obama has two cabinet positions left to fill. Kansas Governor Kathleen Sebelius appears to be the leading candidate for Health and Human Services now, and former Washington Governor Gary Locke is reportedly Obama’s pick for Commerce.  

Senator Judd Gregg of New Hampshire withdrew his name from consideration for Commerce Secretary in Barack Obama’s cabinet today. Politico posted the statement from Gregg’s office. Excerpt:

I want to thank the President for nominating me to serve in his Cabinet as Secretary of Commerce. This was a great honor, and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle.

However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.

Obviously the President requires a team that is fully supportive of all his initiatives. […]

As a further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate.

One wonders why Gregg only noticed today that his views on economic stimulus and the census would impede his effectiveness as a cabinet member. (The U.S. Census Bureau is part of the Commerce Department.)

Despite the last paragraph of Gregg’s statement, you have to wonder whether something popped up in the vetting process here.

Whatever his reasons, I welcome the news and hope that the third time will be the charm for President Obama as he tries to fill this position.

This thread is for any comments or speculation about why Gregg dropped out and who should replace him at Commerce. I don’t want the job to go to another conservative or another Republican.

When Barack Obama nominated Timothy Geithner for Treasury Secretary and appointed Larry Summers to be the chief presidential economics adviser, I became very worried. Summers had a hand in some of Bill Clinton’s deregulation policies that have contributed to our current economic problems, and Geithner was a key architect of the Wall Street bailout last fall.

Here and at other blogs, some commenters urged me to “give Obama a chance–he hasn’t even been inaugurated yet.”

Geithner confirmed my worst fears today when he rolled out the new-and-improved bailout plan (using the second $350 billion tranche from the Troubled Assets Relief Program). Economist James Galbraith came up with the name Bad Assets Relief Fund (BARF) to describe Geithner’s plan.

Other bloggers have already explained why Geithner’s proposal is an unimaginably pricey gift to Wall Street bankers at the expense of the public interest. This diary by MyDD user bobswern hits all the main points, drawing on a front-page story in the New York Times and other sources.

Writing about how Geithner prevailed over presidential advisers like David Axelrod, who wanted to attach more strings to the taxpayer money Wall Street bankers would receive, David Sirota observed,

Interestingly, the divide inside the administration seems to hearken back to a divide discussed very early on in the formation of the administration – the one whereby progressives were put in strictly political positions, and zombie conservatives were put in the policymaking positions. In this case, more progressive politicos like Axelrod was overruled by corporate cronies like Geithner.

The good news is that at least there seems to be something of a debate inside the administration, however tepid. The bad news is what I and others predicted: namely, that progressives seem to have been ghettoized into the political/salesmanship jobs, the conservative zombies shaping policy aren’t interested in having any debate with them. Worse, we’re now learning that those zombies are as rigidly ideological as their initial policies seemed to suggest.

I stand by my prediction that Geithner will turn out to be one of Barack Obama’s worst appointments. I can’t fathom why Obama wants to “own” the very worst aspects of the Bush administration’s failed Wall Street bailout, while also depriving the government of cash needed for other domestic priorities.

The stock market fell sharply today, perhaps because investors have no confidence in Geithner’s scheme and perhaps because the compromise stimulus bill that passed the U.S. Senate came straight out of bizarro world (do click that link, you’ll enjoy it).

I hope Obama will recognize his mistake and let Geithner and Summers go within a year or so, but they’re already poised to do plenty of damage to his administration.

Speaking of bad appointments, isn’t it amazing that Obama didn’t even make Senator Judd Gregg of New Hampshire promise to vote for the stimulus bill in exchange for being named Commerce Secretary? Why would you put someone in a cabinet position with influence over economic policy if that person doesn’t even support the president’s stimulus plan?

Apparently Obama’s also considering making a lobbyist for the Chamber of Commerce the main presidential adviser on judicial appointments. I’ve long anticipated that judges appointed by Obama would be corporate-friendly, pro-choice moderates in the Stephen Breyer mode, but I never imagined that a Chamber of Commerce lobbyist would be in a position to recommend only judges who would favor business interests.

If Tennessee Governor Phil Bredesen becomes Secretary of Health and Human Services, the Obama-Biden magnet is coming off my car.

The Senate confirmed Eric Holder as attorney general today by a vote of 75-21. Both Tom Harkin and Chuck Grassley voted yes, as expected. I always thought Holder would be confirmed, but I am pleasantly surprised that he was approved by a larger majority than Treasury Secretary Timothy Geithner. I believe Holder will turn out to be one of President Barack Obama’s better cabinet appointments.

For reasons I cannot fathom, Obama appears ready to appoint Senator Judd Gregg of New Hampshire, a conservative Republican, as Secretary of Commerce. Chris Bowers concisely explains why this is an awful choice:

So, for some reason, in the wake of total Republican intransigence on the stimulus bill, the Obama administration will respond by putting a Republican in charge of one the federal departments overseeing the economy. Judd Gregg himself has said he will oppose the stimulus package. That is certainly an, um, interesting way for the Obama administration to incentivize Republican opposition. Oppose President Obama, and he will reward you by giving you a cabinet position.

It is worth noting what sort of ideas Judd Gregg has for the economy: a commission of center-right insiders operating in secret and circumventing Congress in order to destroy Social Security and Medicare.

Senate Republicans continue to hold up Hilda Solis’s confirmation as Labor Secretary, and Obama responds by appointing Gregg to the cabinet?

Democrats won’t even get a Senate seat out of the deal, because the Democratic governor of New Hampshire has promised to appoint a Republican to serve out Gregg’s term. The only upside is that the appointee may be easier to beat in 2010 than longtime incumbent Gregg would have been. But that’s not worth handing over control of the Commerce Department to a conservative, in my opinion.

All I can say is, Gregg better not screw around with the Census Bureau and the National Oceanic and Atmospheric Administration.

In a dispatch from bizarro world, Politico’s David Rogers still isn’t convinced that Obama is serious about bipartisanship, even though Gregg will become the third Republican in his cabinet and will be replaced by a Republican in the Senate:

Obama, while talking a good game about bipartisanship, is draining the Senate of the very talent he needs to achieve this goal.

If only Obama were merely “talking a good game about bipartisanship.”

Speaking of Senate Republicans, Kagro X put up a good post on prospects for a filibuster of the economic stimulus bill, and Chris Bowers posted a “whip count” here, concluding that

Overall, it seems highly likely that the stimulus will pass without Republicans forcing major changes. However, given the narrow margins, this is not a guarantee.

The Senate will likely vote on the bill on Wednesday. Grassley has already spoken out against what he calls the “stimulus/porkulus bill.”

I didn’t see this one coming. Bill Richardson has withdrawn from consideration for the Commerce Department job in Barack Obama’s cabinet because of a pending FBI investigation. He denies any wrongdoing and will continue to serve as governor of New Mexico. (It’s bad luck for Diane Denish, who was set to become that state’s first woman governor in a few weeks.)

The Commerce Department is big and oversees a lot of important agencies, like the Census Bureau and the National Oceanic and Atmospheric Administration.

Whom will Obama pick for the Commerce job, and whom should he pick?

UPDATE: Jake Tapper says people on the Obama transition team feel Richardson “was not forthcoming with them about the federal investigation that is looking into whether the governor steered a state contract towards a major financial contributor.”

A CNN report suggests Richardson was forced to withdraw his name from consideration.

Reuters speculates about who might replace Richardson.

Barack Obama named Bill Richardson to head the Commerce Department today. Click the link to read Obama’s prepared remarks. It’s not a top-tier cabinet appointment, but Commerce still oversees a lot of significant government activities, including the U.S. Census Bureau and the National Oceanic & Atmospheric Administration. Click here to view all the bureaus within the Commerce Department.

The Hispanic Caucus in Congress has sent Obama a letter asking him to appoint more Latinos to the cabinet.

Obama has asked Congressman Xavier Becerra of California to accept the position of U.S. trade representative, but Becerra has yet not made a decision. He is the fifth highest ranking Democrat in the U.S. House, and some believe he could become the first Latino Speaker of the House someday if he stays in Congress.

Obama’s short list for secretary of labor apparently includes Mary Beth Maxwell, “the founding executive director of American Rights at Work.” According to the Wall Street Journal,

Maxwell already had the strong backing of former Rep. David Bonior, who despite repeated attempts to get his name removed from consideration continues to be on the short list of potential labor secretaries. Bonior, 63 years old, says it is time for his generation to turn over power to a new generation, and Maxwell, whose labor-backed organization pushes for expanded collective bargaining rights, is his pick.

Some labor leaders from both the AFL-CIO and Change to Win, a splinter union group led by the Service Employees International Union, back her as a consensus choice, citing her efforts on behalf of legislation to allow unionization at workplaces with the signing of cards, not secret balloting.

The Wall Street Journal says Obama is also vetting Michigan Governor Jennifer Granholm and Kansas Governor Kathleen Sebelius for secretary of labor.

I haven’t heard much lately about a possible secretary of education or transportation.

Who would you like to see in the cabinet?

UPDATE: I forgot to mention that if nominated and confirmed, Maxwell would become the first openly gay cabinet secretary in this country.

Apologies for not getting this thread posted yesterday, when President-elect Barack Obama unveiled his economic team.

On the plus side, there are no incompetent hacks in this group. I’ve heard particularly good things about Peter Orszag’s work at the Congressional Budget Office, and he will produce reliable numbers at the Office of Management and Budget.

People I respect speak quite highly of Melody Barnes, who will run Obama’s Domestic Policy Council.

Also, it’s encouraging that Obama is committed to a major stimulus bill that will focus on infrastructure investments. I’ll reserve further judgment until we see more specifics about Obama’s plans, because spending $350 billion on stuff worth doing is a lot better than spending $350 billion on boondoggles.

I also agree with Matthew Yglesias that if you’re going to throw tens of billions of dollars at the economy, high-speed rail in the Midwest would be an excellent place to start. (UPDATE: Senator John Kerry has introduced a major bill that would promote high-speed rail development across the country.)

On the down side, since I opposed the series of Wall Street bailouts we’ve been seeing this fall, I’m not thrilled to see Timothy Geithner as Treasury Secretary and Larry Summers as chief of the National Economic Council. During Bill Clinton’s presidency, I wanted economic policy to be more in the direction that Labor Secretary Robert Reich was proposing, but Clinton and now Obama are clearly favoring the approach of Clinton’s Treasury Secreatry, Robert Rubin. Almost everyone on Obama economic team has close ties to Rubin.

I think Bill Richardson will do fine at the Commerce Department, but I would have preferred to see him in a different cabinet position.

If you were one of those Obama supporters who claimed during the primaries that he would govern in a much more progressive way than Hillary Clinton, now would be a good time to rethink your views.

Meanwhile, George W. Bush’s team is taking care of one troubled financial firm after another. The latest bailout plan, for Citigroup, is a particularly bad deal for taxpayers, according to Paul Krugman (who reluctantly supported the $700 billion bailout package approved before the election).

What do you think about the team Obama is assembling to handle the economy?

UPDATE: The members of the New York Times editorial board are not wild about putting Geithner and Summers in charge:

As treasury secretary in 2000, Mr. Summers championed the law that deregulated derivatives, the financial instruments – a k a toxic assets – that have spread the financial losses from reckless lending around the globe. He refused to heed the critics who warned of dangers to come.

That law, still on the books, reinforced the false belief that markets would self-regulate. And it gave the Bush administration cover to ignore the ever-spiraling risks posed by derivatives and inadequate supervision.

Mr. Summers now will advise a president who has promised to impose rational and essential regulations on chaotic financial markets. What has he learned?

At the New York Fed, Mr. Geithner has been one of the ringmasters of this year’s serial bailouts. His involvement includes the as-yet-unexplained flip-flop in September when a read-my-lips, no-new-bailouts policy allowed Lehman Brothers to go under – only to be followed less than two days later by the even costlier bailout of the American International Group and last weekend by the bailout of Citigroup.

It is still unclear what Mr. Geithner and other policy makers knew or did not know – or what they thought they knew but didn’t – in arriving at those decisions, including who exactly is on the receiving end of the billions of dollars of taxpayer money now flooding the system.

Confidence in the system will not be restored as long as top officials fail or refuse to fully explain their actions.

The more I think about it, the more I think Hillary Clinton should stay in the Senate. However, most analysts are speculating she will accept Barack Obama’s offer to become Secretary of State. Here’s a roundup of recent coverage on the appointment.

Tom Harkin thinks Hillary will be secretary of state, and he likes the idea:

Harkin said he was confident that former President Bill Clinton would not pose conflicts, as he’s agreed to make public the donors to his foundation and clear his travel schedule and speeches with the Obama administration, should his wife become secretary of state.

“If he’s willing to do whatever the Obama team and the president wants – and he should understand it, he’s a former president – that would be fine,” Harkin said.

He also said Obama naming her would be a demonstration of unity to the world. Sen. Clinton and Obama waged an intense, six-month campaign for the Democratic presidential nomination this year.

“I think it would send a good signal to the world if Hillary Clinton were secretary of state,” Harkin said. “The signal it sends to the world is we can have big fights politically here in the United States and yet after the election’s over, we pull together.”

Where does that leave Bill Richardson? I hope he ends up in the cabinet. UPDATE: ragbrai08 has heard rumblings Richardson might become Secretary of the Interior, which would be a decent fit for him.

Kia Franklin of the Drum Major Institute wrote an interesting piece on Eric Holder, the likely attorney general, and where he stands on civil justice issues.

John Crabtree of the Center for Rural Affairs blog offers “A Different View of [Tom] Vilsack,” the front-runner to run the U.S. Department of Agriculture:

It is difficult, if not impossible, to predict when, where and from whom leadership will emerge. The book on Tom Vilsack is not complete, and perhaps that is a good thing. He does not get a perfect score on my litmus tests. But, when I disagree with him in the future I will continue to engage him, just as I always have, whether he is a private citizen or the Secretary of Agriculture. And he will engage me, just as he always has.

I hope that, at the end of the day, our next Secretary of Agriculture is the kind of leader that can help create a future for rural America with thriving family farms and ranches and vibrant rural communities. I believe Governor Vilsack can provide that leadership. Perhaps he just might get the chance.

James L. of Swing State Project is concerned that Obama might choose either Representative Stephanie Herseth-Sandlin or Representative Collin Peterson for the USDA job. Both are from Republican-leaning districts that would be hard for a different Democrat to hold.

Obama supposedly was leaning toward offering the Commerce Department position to uber-fundraiser Penny Pritzker, but she withdrew her name from consideration.

Haven’t heard much about a possible secretary of transportation. Obama supports greater investment in core infrastructure as well as high-speed rail and public mass transit, so I am hopeful he will put someone with vision in charge of this department. The highway bill comes up for reauthorization in 2009 and is sure to be one of the major battlegrounds in Congress.

Still no word on a Treasury Secretary. Matt Stoller remembered another reason why Larry Summers is wrong for the job.

Most people seem to think Robert Gates will stay on as Defense Secretary. I don’t see why Obama can’t appoint a Democrat for that position. We have plenty of qualified people in our party. Keeping the Republicans in charge of defense supports their propaganda that the GOP is best for defending the country.

The Mayor of Miami, Manny Diaz, is being considered either for Transportation or for Housing and Urban Development. Representative Jim Clyburn of South Carolina is not interested in the HUD appointment.

Share your opinions or predictions in the comments.

UPDATE: Why does Obama want to reinforce Republican stereotypes about how they’re the only ones who can handle national security? Now General Jim Jones, a supporter of the Iraq War and John McCain, is tipped to run the National Security Agency. That is just crazy. Put some Democrats in charge, please. It’s not as if we don’t have people who could do this job well. I would not be surprised if Jones undermines Obama in this position.

UPDATE 2: The New York Times says Hillary Clinton will take the Secretary of State job.

Several news outlets are saying Timothy Geithner, about whom I know nothing, will be Obama’s Treasury Secretary nominee. Geithner is president of the Federal Reserve Bank of New York.

NBC News says Bill Richardson will be Commerce Secretary. I don’t like him nearly so much for that job as I would like him for Secretary of State, Transportation, or Interior. Richardson’s a corporate Democrat, judging from his record in the 1990s. He ran the whip to get NAFTA through the House during Bill Clinton’s first term.

Still no progressives in Obama’s cabinet.

UPDATE 3: My brother, who works in the investment field and is much more of a moderate Democrat than I am, is “sick” about the prospect of Geithner running Treasury. His other comment about Geithner is not printable at this blog.

UPDATE 4: This is from a speech Geithner gave in May 2006:

Credit derivatives have contributed to dramatic changes in the process of credit intermediation, and the benefits of these changes seem compelling. They have made possible substantial improvements in the way credit risk is managed and facilitated a broad distribution of risk outside the banking system. By spreading risk more widely, by making it easier to purchase and sell protection against credit risk and to actively trade credit risk, and by facilitating the participation of a large and very diverse pool of non-bank financial institutions in the business of credit, these changes probably improve the overall efficiency and resiliency of financial markets.

With the advent of credit derivatives, concentrations of credit risk are made easier to mitigate, and diversification made easier to achieve. Credit losses, whether from specific, individual defaults or the more widespread distress that accompanies economic recessions, will be diffused more broadly across institutions with different risk appetite and tolerance, and across geographic borders. Our experience since the introduction of these new instruments-a period that includes a major asset price shock and a global recession-seems to justify the essentially positive judgment we have about the likely benefits of ongoing growth in these markets.

Despite the benefits to financial resilience, the changes in the credit markets that are the subject of your conference have also provoked some concerns and unease, even among those on the frontier of innovation and the most active participants in these markets.

These concerns are based in part on uncertainty-a candid acknowledgment that there is a lot we do not yet know about how these instruments and the increased role of nonbank institutions in these markets will affect how the financial markets are likely to function in conditions of stress.  […]

Let me conclude by reiterating the fundamental view that the wave of innovation underway in credit derivatives offers substantial benefits to both the efficiency and stability of our financial system.

Hmmm, he didn’t seem to have seen any of the current problems coming. Also, he apparently was involved in the bailout negotiations. So it seems like this is a very status quo pick for Obama.

On an even less encouraging note, Obama’s leading candidate to run the CIA is a “Bush-Cheney apologist.”

That’s not exactly “change we can believe in.”

UPDATE 5: Two people on Obama’s short list would both be highly competent and celebrated by progressives: Representative Raul Grijalva for Interior (he heads the House Progressive Caucus) and former Representative David Bonior for Labor (he has close ties to organized labor).