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Meet the Blue Dogs

They’re liberal. They’re conservative. Meet the Blue Dogs.

If you haven’t heard about the Blue Dogs yet, you will, especially once Congress gets back from its summer break after Labor Day.

They’re one of the groups in Congress being blamed for holding up the health care vote on the House floor, which won’t happen—as originally planned—before the vacation begins.

Who are they?
They’re a group of 52 Democrats in the House of Representatives who are socially moderate but fiscally conservative. There are many camps within the two parties that have their own agendas, but this one’s getting the most attention at the moment.

From Cali to health, all about costs

If you take away one major theme from this week, it's costs.

 

First, California came closer to a budget agreement that would close a $26 billion budget gap caused by over-spending. Second, Obama stumped to keep the momentum going for a health care plan with a $1 trillion-plus price tag. And third, the Senate voted to stop funding the F-22 bomber plane, saving $1.75 billion.

 

What are we willing to pay for?

The question of what services we want and what we are willing to pay for comes into play in both the California budget situation and the national health care talks.

Cutting through the clutter

Since we all get sick and we all need a doctor now and then to help us get better, let’s dive into the health care reform proposals thus far on the table in Congress and take a look at where it’s all going.
 
First, the facts

• 47 million Americans uninsured
• Annual overall U.S. spending on health care is $2.2 trillion 
• Annual U.S. costs per person is about $7,000
• The tab for reforming health care is expected to be about $1 trillion over 10 years
• Obama wants to pass health care legislation before Congress goes on vacation in August

Ok, on to where we are with the proposed bills
Two versions of legislation moved forward this week, one in the House and another in the Senate. There’s a third proposal still sitting in the Senate Finance Committee (remember a bill usually begins in a House or Senate committee where it is “marked up” and then voted on so that eventually the full chamber can vote on it), which you’ll likely hear more about next week. The House version could be put to a full vote in the next couple of weeks.

Summer news equals a weird week

It was such a weird week.

Sarah Palin quit her post as governor of Alaska for reasons yet to be revealed to us—and maybe to herself, and instantly became the top-read, top-searched story again on most news sites. Man, the media loves to hate her.

Michael Jackson’s memorial was attended to with interest and care deserving of a head of state, broadcast live on CNN, and then over and over again.

California began issuing IOUs to “pay” its bills because it’s almost entirely out of cash, and Al Franken, otherwise known as the Saturday Night Live character Stuart Smalley, was sworn in as a Senator.

Google announced that it’s launching an operating system just weeks after Microsoft unveiled a new search engine (who does what again?). Media moguls met in Sun Valley and talked about how Twitter might make money (do we care?).

Hot dogs and the news

A short week but a busy one as the nation pauses to celebrate July 4 on Friday. As you nibble on hot dogs--over 150 million are consumed on this holiday--here are some conversation nibblers, too.

The markets head into the second half of the year 25% higher than where they were in March
So that's good, yes, but don't get too excited--all said stocks are still down some 25% from their highs in 2007. The next month will be important to see where stocks go from here as U.S. public companies report how well they did or didn't do in the last three months. Expectations are that overall profit fell by 35% from last year (there's still growth on average, it's just much lower than in recent years). If they do much worse than that benchmark forecast, stocks could fall. If they do better, stocks could get a boost. But don't expect to see 14,000 again on the Dow anytime soon.

Outside of earnings, the consumer will be interesting to watch in the second half as well. In May they closed their wallets and saved at a rate of 7 percent, up from zero just about a year ago, and their confidence was weak. Consumers are getting hammered by job losses, which scares them into not spending. That's bad for the housing market because they may hold off on big purchases like a home, which as we've talked about here many times before is pivotal to the overall economic recovery. More job losses could mean more foreclosures and so on. Enough... let's get back to the party!