MITCHELL HIRSCH A Dangerous Crossroads Ominous signs emerged last week that a threat to undermine an economic recovery is afoot, and that threat has particularly severe consequences for America's 15 million unemployed. Before voting on an already scaled-down jobs and jobless aid bill, House Democrats succumbed to pressure from conservative Blue Dogs and nervous moderates and weakened the bill further, eliminating some of its core provisions. Then, despite narrowly passing the bill on a vote of 214 to 205, the House joined the Senate in leaving town for a week-long recess — allowing eligibility for extended federal unemployment insurance programs to expire June 2. BILL SCHER Speaker Pelosi Previews Address On Progressive Leadership For America's Future Now! On Tuesday, House Speaker Nancy Pelosi will address a nationwide gathering of progressives at On Tuesday, House Speaker Nancy Pelosi will address a nationwide gathering of progressives at America's Future Now! — one day after the conference holds "The Great Debate: Progressive Strategy in the Obama Era,", where attendees will discuss whether to fully back President Obama's agenda or constitute an independent force pushing for bolder, faster action." ZACH CARTER Liveblogging The Rating Agencies Hearing Buffett just offered a standard defense of Corporate America that allows companies to do terrible things without any accountability. Buffett is the largest shareholder in Moody's. He says over and over again that he believes in due diligence — making sure you understand what you invest in. But Douglas Holtz-Eakin and Phil Angelides pressed Buffett on whether he knew or should have known Moody's was doing terribly reckless things that endangered the global economy. Buffutt responded that he didn't know, and he couldn't be expected to know. Companies are complicated, and no shareholder can understand everything that a company is up to. Warren Buffett, Rating Agencies and Corruption Today's Financial Crisis Inquiry Commission hearing on credit rating agencies promises to shed quite a bit of light on one of the most profitable and corrupt businesses in Corporate America. Rating agencies score huge profits regardless of how accurate their ratings prove, and thus never felt any serious pain from the financial crisis, despite the central role rating agencies played in the collapse. DAVE JOHNSON Tax Cuts Caused The Deficits, Therefore... As the country discusses what to do about the borrowing the elephant in the room, the important thing is that everyone understands that restoring top tax rates to pre-Reagan levels and cutting the military budget in half would solve the problem completely. But we can't do that. We can't even discuss it. RICHARD ESKOW Law and Order: AIG President Obama's Department of Justice announced last week that there would be no indictments in the collapse of AIG, an event which led to a worldwide economic collapse and cost the American taxpayer trillions. As someone who once worked for AIG I was shocked, but apparently that's how this mystery ends: Hundreds of millions of victims, smoking guns in every room, and not a perp to be found anywhere. more from our bloggers >>

W. Post's Steven Pearlstein rips Blue Dogs for scuttling aid to states and COBRA subsidies in latest jobs bill: "...the caucus of fiscally conservative House Democrats insisted last week that their party leaders strip out nearly $30 billion in funding for health-care coverage for the poor and the unemployed ... which raises the question of why the Blue Dogs couldn't muster the same fiscal discipline when it came to spending $22 billion over the next three years to guarantee that American doctors, who are far and away the best-paid in the world, don't suffer any significant declines in their incomes just because of a little thing like a recession ... much of that money for Medicaid and COBRA would eventually have made its way into the hands of doctors and other health professionals. Instead, those clever Blue Dogs have found a way to get the docs the money to maintain their lifestyles, but without having to provide the extra care."

Speaker Pelosi will revisit state aid provisions. HuffPost: "'There's a changed climate in terms of the size of the spending/investment packages that we're putting forth,' said Pelosi in a conference call with progressive media ... 'If I had all the votes I needed in a non-Blue Dog world, I would not have had to make some of the changes I made to get some Blue Dog support.' ... 'We will pick up FMAP [state aid] and hopefully we will be able to include COBRA in that,' she said."

NYT's David Leonhardt urges Senate pass the jobs bill, and state aid, while cutting other wasteful spending: "It can pass the jobs bill, putting people back to work, and even pass a separate bill to help struggling states. History has shown that state aid, which prevents layoffs of teachers, emergency medical technicians and other workers, is the single most effective form of stimulus. But this new spending needs to be... paired with substantive cuts to continuing policies, like subsidies for oil companies and agribusinesses, outdated weapons systems, NASA’s moon program and at least some Bush tax cuts, among many other things. That is the right economic strategy. It’s probably the right political one, too. It shows serious concern about both jobs and the deficit."

House jobs bill includes the closing of the offshore tax loophole. Economic Populist's Robert Oak: "The bill ties income to the foreign tax credit, so no longer can a corporate claim the tax credits yet park the actual profits money offshore in a low tax country. As one can see if one gets credits yet doesn't have to actually pay tax on profits accrued when offshore, this encourages the movement of assets, production overseas, including jobs ... Expect war from our Benedict Arnold Tech Companies such as IBM, Microsoft and HP."

AFL-CIO's Tula Connell has a message from one of those 1.2 million Americans whose unemployment benefits Congress didn't extend before leaving D.C.: " Sen. Judd Gregg (R-N.H.) ... says jobless workers on UI 'don’t want to go look for work.' Here’s a message for Judd from Deborah, a jobless worker who commented at the AFL-CIO Now blog: 'I have been a lifelong Republican. I believed that if you were willing to work, you could always find a job and support yourself and your family ... I generally thought that welfare was a lifestyle people chose. After working more than 20 years at a well-paying job, I was a victim of widespread job cuts. ... I have faithfully applied to job after job….What will I do when my unemployment benefits end? I am outraged that our representatives seem willing to let people go under when they have lost a job through no fault of their own and there are not enough jobs to make a dent in the jobless situation.'"

Brad DeLong asks, "Does Washington care about unemployment?": "Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? ... I don’t know. But this unseemly calm does astonish me."

Digby says DeLong misses that Democrats think they're being "cruel to be kind": "DeLong speculated that this is the result of out gilded age wealth inequality and I think that's largely correct. These High priests of politics seem to live in an alternate universe from the middle class, in which "sacrifice" means other people having to give up their homes, their futures and their jobs in order to satisfy the deity we call "the market." It's fairly primitive stuff, actually. But I think it's also something more politically prosaic: Democrats are just dying to use this as another opportunity to inflict suffering, thus proving once and for all that they are the party of 'responsibility.'"

Grist's Glenn Hurowitz tells politicians to pay attention to "underground green economy":: "There's a new economy springing up around the country — but it's operating almost entirely in secret. It's called 'the restoration economy' ... restoring what's been lost: degraded forests, watersheds, oceans, cities, communities, buildings, transit ... investments in forest, wetland, and other land and water restoration creates 74 percent more jobs than ANY other economic activity — more even that energy wind or solar, and more than five and a half times as much as investments in dirty energy sources like oil, coal, and nuclear. These are the ultimate shovel-ready jobs: for many of them, you really don't need much more than a shovel to get to work. Mother Nature provides all the capital you need."

President Obama delivers economic address today in Pittsburgh reports CNN.

Criminal Investigation Underway In Gulf Oil Disaster

Justice reveals criminal investigation of Gulf spill disaster. Bloomberg: "The government is reviewing whether there were violations of the Clean Water Act, which carries civil and criminal penalties, and the Oil Pollution Act of 1990, which can be used to hold companies liable for cleanup costs, [Attorney General Eric] Holder said. Also under review is whether there were violations of the Migratory Bird Treaty Act and Endangered Species Act, which provide penalties for injuries to wildlife, and other criminal laws. A criminal probe likely also will examine whether there was a violation of the Refuse Act, which deals with discharges into waterways ..."

No one is expected to go to jail. Politico: "...if Attorney General Eric Holder and his team of prosecutors find criminal wrongdoing in the BP oil spill, it likely will result in a much different outcome – a fine. Every day oil gushes out of undersea pipe, well owner BP is racking up massive civil fines. The company also is facing billions of dollars in liability for cleanup and environmental damage. Any criminal penalties could simply be tacked on to that, experts say."

Prospect of massive fines depressing BP stock, but company expected to survive. NYT: "One analyst calculated that in a worst-case scenario, BP’s cleanup liability would be around $14 billion, which would account for the entire loss of all fishing and tourism revenues for coastal states closest to the spill, said Kevin Book, a managing director at ClearView Energy Partners. Even then, Mr. Book said, the market overreacted, and BP can easily handle the cleanup bill."

Deep-sea coral reefs threatened by oil plumes. NYT: "There is reason to hope that deepwater corals far from the blowout will escape serious harm. Deep-sea currents are slower than surface currents ... oil and chemicals will disperse as they migrate away from the site of the blowout .. deepwater corals may have adapted to the presence of low-level concentrations of oil. Still, as more and more oil enters the ocean each day, the likelihood that at least some reefs will be overwhelmed only grows."

Miami Herald's Leonard Pitts mocks conservatives who have suddenly embraced government: "As there are no atheists in foxholes, it turns out there are no small-government disciples in massive oil spills. No, with BP oil soaking the sands of his coastline, Bobby Jindal turned righteously to that big, sometimes bloated, often intrusive federal government, and asked for help."

Breakfast Sides

Federal Reserve echoes banking lobby in opposing credit card protections for small biz. HuffPost's Shahien Nasiripour: "The Federal Reserve warned Congress in a recent report that protecting small businesses from the kind of 'harmful' credit card practices it prohibits from being used on consumers would lead to a reduction of credit and higher borrowing costs for businesses -- a similar argument advanced by the banks the Fed regulates."

"Business Groups Reluctant To Join NFIB In Suing Federal Government Over Health Reform" reports Wonk Room's Igor Volsky: "Having successfully lobbied against the employer mandate and in favor of a so-called SHOP exchange that would allow small businesses to purchase coverage in large pools, the NFIB’s members — most of which employ six or fewer staff — stood to gain a lot for the new law ... they would be foolish to join a frivolous lawsuit that cuts them out of negotiations with HHS about any new regulations."