Just call it a 'moderate public option.' Sort of. U.S. House Speaker Nancy Pelosi, D-California, Thursday unveiled a revised, $894 billion health care reform bill that would provide insurance to up to 36 million more Americans while cutting the budget deficit by $30 billion over 10 years.

The bill's key elements: subsidies offered to moderate-income Americans to buy insurance either from private carriers or a new, government-run program, an expansion of Medicaid to insure the poor, and an income tax increase on upper income Americans -- individuals earning more than $500,000 per year and couples earning more than $1 million.

The health care reform debate continues, and really, given the horse-trading and logrolling that's likely to occur in the upcoming conference committee to reconcile the House and Senate versions of each chamber's health care reform bill, assuming each chamber approves them, to cite a phrase used by political science professor Larry Sabato, the party's just begun.

A bit jaded by it all? Don't be -- it's just the political process at work, and here's one, major positive to take out of the health care reform bill's passage: a new policy that will finally end the 'tax' that U.S. citizens and businesses pay for uninsured Americans who obtain health care services.

This 'hidden health care tax' increases at the rate of $1,354 per second or $116.98 million per day. As of Friday, the American people have been charged $33.37 billion this year to pay for health care for the uninsured: that's the bill that hospitals pass on to those who have insurance.

House Speaker Nancy Pelosi, D-Calif., has signaled that House negotiators would be open to a compromise regarding the income tax increase required for the universal health care program. And that's a good sign.

Pelosi said a proposed income tax increase on high-income Americans is "at the high end" and the rate could be reduced by "squeezing" more savings out of the health care system, Bloomberg News reported Thursday.

House Speaker, Nancy Pelosi wants a 1933 style investigation of Wall Street. She said that the American people are demanding to know the what and how of the Lehman, Bear Stearns and Merrill collapses. She wants to pattern her investigation after the Ferdinand Pecora hearings in 1933. The Pecora review "was probably the single most important congressional investigation in the history of our country, excepting the Watergate hearings. Congress is under public pressure to find out exactly what generated $1.3 trillion in financial industry losses, the details of the $700 billion dollar bailout and the $37 trillion destroyed in world markets. In response, John Larson, of Connecticut said: "We truly want to find out what happened to this country and level with the American people." Pelosi, in a speech on April 15 said: people need "to have a clear understanding as to how we got here and what the exposure is to the taxpayer to all this."

It looks like tomorrow could very well become yet another 'brace yourself Friday' or another edition of 'As The U.S. Economy Turns.'

Still, hopefully it won't become a new rendition of 'down goes the Dow' with another visit by our old friend, you guessed it - - Dow 8,000. But analysts and economists haven't ruled the latter out.

The reason? The December 2008 jobs report, to be released by the U.S. Labor Department at 8:30 a.m. EST.

December jobs data won't be pretty

President-elect Barack Obama, D-Illinois, and House Speaker Nancy Pelosi, D-California, said they are bracing for a 'sobering' jobs report, Reuters reported.

Sobering is one way to lower expectations: economists surveyed by Bloomberg News expect the December 2008 jobs report to show a loss of 500,000 jobs. If that occurs, the U.S. economy will have shed more than 2.5 million jobs in 2008 and a staggering 1 million jobs in the last two months alone, November / December 2008. It would also make 2008 the largest job loss year for the United States since World War II.

Economist Peter Dawson told BloggingStocks economists are becoming "very concerned" for two reasons. First, a trend line for job cuts has increased for more than six months. Second, ADP's (NYSE: ADP) private sector job report showed the loss of a staggering 693,000 jobs, and even though the ADP report has not correlated well with the Labor Department report, it still is setting off alarm bells in economists' circles.

How big will the 2009 U.S. fiscal stimulus package be?

Well, to borrow a phrase popularized by actor William Shatner, 'really big.'

There's talk now in Washington that the Obama Administration outline for fiscal stimulus could reach $1 trillion, or higher, over two years, The Wall Street Journal reported (subscription required).

Further, House Speaker Nancy Pelosi, D-California, said the U.S. House is likely to act next month on a stimulus package totaling $500-600 billion, Bloomberg News reported.

President-elect Barack Obama has said he wants a fiscal stimulus package ready for him to sign on Inauguration Day, January 20, 2009. Moreover, while administration officials have not detailed specific program preferences with accompanying dollar amounts, there is general agreement between the Obama Administration and Congress Democratic leadership on the need for immediate job-creating infrastructure work, assistance to deficit-laden states, unemployment insurance extension and home mortgage relief.

Still, while the list of needs is long and large enough to occupy all of Pelosi's aforementioned $500-600 billion, that appropriation level probably won't be enough to "move the GDP needle by a large amount," so says economist David H. Wang.

What are likely to be Congress's performance conditions for any rescue package for Big Three auto manufacturers General Motors, Ford, and Chrysler?

First, it should be noted that many Americans oppose any auto maker rescue/bailout, and the stance contains a legitimate point: that underperforming private companies shouldn't be rewarded for operational errors.

Still, a stronger argument holds that a cessation of U.S. auto company operations would severely hurt an already weak U.S. economy - - with an unacceptable increase in unemployment, particularly in the Midwest U.S., and other negative economic ramifications. Hence, Congress is very likely to pass and either President Bush/President-elect Obama will sign a performance-based rescue package.

The plan's performance metrics are likely to include:

• a credible, coherent plan for auto manufacturer viability and profitability;

• wage, benefit, and payment sacrifices by all stake holders: management, unionized employees, suppliers, dealers, contractors, shareholders, and creditors, etc.;

• the elimination of executive and management bonuses, if certain metrics are not me;

• a next-generation vehicle platform that reduces U.S. dependence on oil and that radically increases fuel efficiency/miles per gallon;

• debt-to-equity options, perhaps in the form of convertible bonds, that give the U.S. government the option of purchasing shares, should federal oversight officials choose to do so, to enable the government to share in any automaker's success;

• senior debt status for any U.S. government loans;

• full General Accounting Office access to auto maker financial records and business plans for the duration of the rescue package.
  

New York Times columnist and Nobel Prize-winning economist Paul Krugman underscores that those who are thinking in terms of a balanced federal budget now are doing a serious disservice to the economy, and, by extension, to the nation.

It's important for the U.S. Government to return to a balanced budget when the economy returns to health, but it is critically important for Congress to approve a large fiscal stimulus to help the U.S. economy recover from the current recession, he said.

Sees danger of vicious cycle

That's because doing so will help end what Krugman argues is a vicious cycle of contraction that's beginning to play itself out in the economy. Rising unemployment will lead to further reductions in consumer spending, which will lead to further business cutbacks in production and more job cuts, which will lead to further reductions in consumer spending, contracting the economy even more, and so on. It's a destructive cycle that has to be stopped, and fiscal stimulus is part of the healing: it will get momentum headed in the constructive direction.

For those who doubt the harm that prematurely trying to balance a budget can do to the U.S. economy, Krugman offered FDR's premature attempt to balance the budget in 1937: it almost destroyed the New Deal and the economic recovery taking place in the nation at that time.

Detroit's Big Three automakers are finding out assistance is a two-sided process.

President-elect Barack Obama is backing a plan in which U.S. automakers would receive $50 billion in federal aid in exchange for structural changes and oversight by an auto czar or board. An auto czar or board would be patterned after the bailout of Chrysler in 1979 or the City of New York in 1975.

During those two assistance / loan guarantee efforts, the U.S. Government ended up making money on the deals. The revamped Chrysler returned to profitability and actually led both General Motors and Ford in several vehicle categories in the ensuing decades. The streamlined, pro-business City of New York experienced an economic, civic, and cultural renaissance in the 1990s that was surpassed only by the 'Roaring 20s.'

Economist David H. Wang told BloggingStocks Thursday a bankruptcy by General Motors or Ford "is economically and psychologically unacceptable." If both filed for bankruptcy and operations were disrupted, "U.S. unemployment would soar over 10%" and the U.S. economy would incur into its deepest recession since the 1981-82 Reagan Administration recession, he said.

All House Speaker Nancy Pelosi, D-California, wants for Christmas -- happiness for her grandchildren aside -- is a tax cut.

The incoming Obama Administration, driven by the U.S.'s large economic problems and by prudence, is expected to seek quick approval of a major fiscal stimulus package soon after Inauguration Day on January 20. Even so, Speaker Pelosi may do the administration one better: Pelosi will seek to include a tax cut in a fiscal stimulus package, Pelosi's spokesman told Bloomberg News.

In addition, Congressional Democrats are considering passing two fiscal stimulus packages: one during the current lame-duck session and another after the Obama Administration and new Congress take office in January.

Pelosi favors a tax cut over the earlier stimulus version of tax rebates because the latter would take too long to administer, taxs-news.com reported. Pelosi will seek Senate agreement on a modified-version of a roughly $61 billion stimulus measure the House approved earlier in September, before seeking approval from President Bush.

A second stimulus package would help lessen the effects of a U.S. recession, many economists -- including the Chairman of the Fed -- agree, but whether Congress can pass one by year's end remains an open question.

Fed Chairman Ben Bernanke boosted a second stimulus package's prospects by arguing in Congressional testimony Tuesday that the likelihood of a protracted slowdown stemming from weak U.S. economic fundamentals, aggravated by the financial crisis, convinced him to support a new round of fiscal stimulus, Bloomberg News reported.

Bernanke underscored that he was commenting only on a potential fiscal stimulus package's economic impact/merits: the decision to approve/reject a package and the composition/form of any package remains the decision of Congress.

Second stimulus check ahead?

What are the chances taxpayers will receive a second stimulus check/tax rebate?

Economist David H. Wang told BloggingStocks Tuesday the worsening economy "appears to be shifting the political winds in Washington and they [elected officials] may very well pass a second stimulus package."

"I think the prospects of a $150-$200 billion stimulus package passing are pretty good," Wang said. "The main problem is unemployment. Retail sales are down and businesses are trimming back payrolls, which means unemployment will continue to rise. Rising unemployment is bad news for earnings and for the economy, so any stimulus package that creates jobs would be a help. The stimulus could also provide a refinance provision to allow homeowners to refinance mortgages with Fannie Mae and Freddie Mac at lower rates of, say, 5.5-7%."

Bernanke's testimony occurred on the heels of a White House about-face on a second package. The Bush Administration is now "open to the idea" of a second package, White House Press Secretary Dana Pirino told Bloomberg News Monday.

With unemployment rising and the signs of slowdown all around, is a second tax rebate or second stimulus check from Congress up ahead?

The U.S. economy continues to slow. More than 800,000 jobs have been lost since the slowdown began about a year ago, and many economists say the lay-offs are likely to continue or even increase.

Meanwhile, the world's major industrialized nations are striving to stabilize the global financial system and end a credit crunch that could further damage economies around the world.

Well, the answer to the question about a second stimulus check may very well rest on the answer to this one: Who are you voting for on Election Day, November 4?

Key factor: 2008 Election

Congressional Democrats, led by House Speaker Nancy Pelosi, D-California, have vowed to push for a second stimulus package totaling up to $150 billion to help jump-start the anemic U.S. economy, The San Francisco Chronicle reports.

Selected House Republicans said they had never agreed to a bailout deal, despite only hours earlier Bush Administration officials announcing an agreement on "fundamentals."

That segment of House Republicans, many from the party's conservative wing, say they oppose assisting Wall Street firms, which they believe made wrong business choices that led to the crisis. As an alternative, House Republicans offered a plan under which companies would buy insurance from the government, and that includes proposed tax cuts and a relaxation of government regulations.

Currency trader Andrew Resnick said the House Republicans' plan was deficient from a number of standpoints.

"Is this the way a responsible coalition behaves? You say nothing all day, then in the dead of night present a questionable plan via back-channels? Frankly, it's reckless and bizarre," Resnick said. "The House Republicans are playing with fire. Here we are trying to prevent a financial crisis from turning into a catastrophe and one political camp wants to play partisan politics. It's the height or depth of public irresponsibility."

Resnick said credit markets, already stressed by a series of financial institution and bank failures, as well as forced margin calls, could degenerate further.

"I'll tell you right now this whole [expletive] system could come crashing down if banks continue to hoard funds and a series of cascading sales starts to occur," Resnick said. "The House Republican plan also isn't credible. Few expect it to provide the liquidity necessary to keep the financial system functioning, and their tax cut proposal is just nuts. They want to increase the federal budget deficit more? With the dollar weak and after eight years of deficits?" Resnick added that he was presently flat, or had no open currency trading positions.

First the good news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.

Now the bad news: Congressional Democrats are talking up the idea of a second fiscal stimulus package to help jump start the U.S. economy.

U.S. House Speaker Nancy Pelosi, D-California, said she would raise the prospect of a second stimulus bill when she and other Congressional leaders meet with President Bush this week, CNN reported Monday.

Anemic U.S. economy

Speaker Pelosi did not provide specifics but said March 2008's "disturbing unemployment numbers" which indicated the nation's economy lost 80,000 jobs "compels the President to work with Congress on a second stimulus package to get our economy back on track, create jobs, and speed assistance to families struggling to make ends meet," CNN said.

On Monday, the Bush Administration said it was too soon to talk about the need for a second economic stimulus package because the first one had not been fully implemented yet, Reuters reported.

The major public policy players in Washington appear to be lining up in support of a fiscal stimulus package to help jump-start the ailing U.S. economy.

Professor Emeritus David E. RePass of the University of Connecticut once said that, "Congress doesn't react, unless not reacting will result in the Congress bearing the wrath of the American voter."

In this instance, it looks like the Congress has heard about, or has at least taken the pulse of economic conditions in their home districts, and is set to act on a stimulus package. And, by all accounts, it looks like they may do it in near-record time. (The late writer Mark Twain would add here, "Famous last words.")

Fiscal stimulus: full speed ahead

House Speaker Nancy Pelosi, D-California, said she expects to introduce an economic stimulus package after she meets with President Bush next Tuesday, CBS News reported. Further, on Friday, President Bush outlined a proposed $140 billion stimulus plan, which will include tax cuts and other tax credits, The Wall Street Journal reported. In his statement Friday, Bush did not provide specifics, but lawmakers close to the White House said the administration is set to propose tax rebates of $800 and $1,600, for individuals and households, respectively, and is set to provide businesses with a 50% tax deduction for new equipment purchases, The Journal reported.