Bush says he's for a minimum wage increase...that comes with tax and regulatory breaks for business. See the story here.

President Bush endorsed one of the Democrats' top priorities for the new Congress, a $2.10-an-hour minimum wage increase _ and on a faster timetable than they have proposed.

But his support comes with a catch.

Bush said at a Wednesday news conference that any pay hike should be accompanied by tax and regulatory relief for small businesses, potentially a tough sell for Democrats, who are about to reassume control of the House and Senate.

EJ Dionne has an insightful column on a vital question that's been coming up a lot recently: how should we pay for wars?

This debate began as a moral one. Dionne thinks that conservatives have paid for the Iraq and Afghanistan wars in an unfair, irresponsible way. Through it all, they've supported lower taxes for the wealthy, run high deficits, and cut domestic programs.

Who then pays the cost of a war financed almost entirely by deficit spending? Mostly, it's subsequent generations of taxpayers, who have to pay our bills when we don't live within our means. In the near-term, the administration has made policy decisions that have put additional burdens on the lower and middle classes. It has cut taxes on the wealthy and slashed discretionary spending on social programs. This at a time when the rising tide is only lifting yachts.

Dionne believes that this approach has had practical consequences, too. He argues that we now just don't have the resources that more hawkish conservatives want to continue the fight. That could very well be. Another practical consequence of this strategy may have been to undermine the political will to fight a war. Perhaps it is now resented by those who fight and pay for it alone. And perhaps those who were never asked to contribute to it feel like they won't lose much if the war is discontinued.

In general, President Bush's fiscal policies have helped divide this country against itself. Could it be that this unfair approach has also helped turn it against the war?

The Brookings Institute's Katrina Index, which is still performing the invaluable task of tracking the Gulf Coast recovery, reports today that inadequate public services seem to be slowing down the pace of the recovery in New Orleans. Bad public services have may caused stagnation in the housing market particularly, as former residents have been reluctant to move back to neighborhoods that lack adequate sanitation, electricity, gas and water services.

These interdependent trends may lock in a cycle of slow growth. If no new residents show up, why should the city build better public services? Yet, if public services aren't built, why would anyone want to move back?

Even now, 1+ years after the hurricane hit, letting the market do its thing won't rebuild New Orleans. Breaking this cycle would seem to require more public intervention.

Furthermore, the federal government and local governments have shut down a few key sources of information on the recovery.

Interestingly, as long-term recovery problem solving continues, available data to measure the housing, economic, and social recovery on the ground appears to be slowing. For instance, the Bureau of Labor Statistics has stopped reporting data on the status of evacuees while some local entities have temporarily stopped or slowed reporting on noteworthy data such as home sale prices, public transportation ridership levels, current level of utility customers, and the opening of new restaurants.

Tracking inversely with income inequality over the past 20 years has been the rate of union membership among American workers. From a peak of 20.1% in 1983, the unionization rate has fallen to 12.5% in 2005 (the latest year for which the latest data are available). In addition to this correlation are empirical data which show that declining union membership explains 15-20% of the increase in income inequality for males.

Increasing rates of unionization would slow the trend in income inequality, and removing obstacles to forming unions is one of the ways to boost union membership. The New York Times reports today that Speaker of the House-elect Nancy Pelosi (D-CA) is proposing to do just that by moving the Employee Free Choice Act, aka "Card Check", to a vote next year.

Even before the Democrats won control of Congress, the bill, the Employee Free Choice Act, had 216 co-sponsors in the House, including 14 Republicans, just 2 short of a majority.

With the Democrats capturing both houses, labor and its allies voice confidence that the bill will pass in the House, but they fear a formidable battle in the Senate, where some foresee a Republican filibuster. Representative Nancy Pelosi, the incoming speaker, said yesterday that the bill would probably go to the House floor in the early spring.

[...]

"We certainly will be passing the card check, the Employee Free Choice Act," Mrs. Pelosi, Democrat of California, told reporters.

Though popular, the tax extenders package that seems headed for approval today is not without its perverse aspects.

For instance, a funding patch for the State Children's Health Insurance Program (SCHIP) was stripped out of the package, at the same time that funding for Health Savings Accounts (HSA) was added. SCHIP benefits low-income children- HSAs the wealthy and privileged.

For more, see this statement by Robert Greenstein of the Center on Budget and Policy Priorites.

It has been known all year that without additional SCHIP funding, 17 states would face SCHIP shortfalls in 2007. The Administration included a proposal in its budget to address these shortfalls. Various bills to resolve the problem were introduced in Congress. But when decision time came, Congressional leaders declined to act. Coverage for up to 600,000 low-income children will be at risk as a result.

ThinkProgress notes that, as of Saturday, the current minimum wage has gone the longest without an increase since its inception in 1938.

With the bursting of the real estate bubble and increases in interest rates, access to cheap home equity loans is drying up and adjustable-rate mortgages (ARMs) are taking up larger portions of homeowners’ take home pay. As household finances begin tightening, consumers will be increasingly reaching for their credit cards, and not just for big-ticket purchases like plasma TVs, but for more everyday expenses like food and utility bills.

At a time when Americans are under unprecedented levels of household debt, credit card companies enacting unfriendly consumer practices, and headlines about consumer privacy violations, the 110th Congress may be looking at ways to shield consumers from some of the more devious clever fees and interest rates credit card companies charge their customers.

BNA ($):

"If credit card companies do not promptly take the initiative to clean up their industry, Congress and the regulators--including the Federal Reserve, the Federal Trade Commission, and the Office of the Comptroller of the Currency--must take action," [Sen. Carl] Levin [(D-MI)] said in remarks prepared for a Nov. 30 policy forum sponsored by the Center for American Progress.

[..]

At the forum, Levin highlighted several examples of practices he found disturbing including companies requiring payment of interest on charges already paid through "double-cycle" billing, he said.

For example, a credit cardholder might pay off a charge of $490 out of $500, leaving a $10 balance, but the bank still charges the customer interest on the entire $500 charge. Other practices include requiring borrowers to pay back debt with a lower interest rate first before they can pay back debt with a higher interest rate, he said.

Additionally, Levin highlighted the practice of charging consumers fees of $5 to $15 to make an on-time payment by phone, potentially in order to encourage people to mail payments so the company can earn interest on them.

Meanwhile, in the House, Rep. Barney Frank (D-MA) has announced his consumer-protection agenda for the next Congress (CongressDaily ($)):

House Financial Services ranking member Barney Frank, D-Mass., said today his top priorities as incoming chairman are bills to restrict predatory lending on home mortgages, strengthen data security and ensure that the nation's top bank regulators do not override state consumer protections.