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Republicans joining populists in ending corporate welfare for banks |
| No one likes the idea of filthy rich banks getting a leg up from the government, not even Republicans. And a small but growing contingent within the party is aligning with populists to strip big banks of the benefits they receive from the implicit guarantee that the government will always come to their rescue. Rep. Dave […] |
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How companies wield off-the-record influence on Obama’s trade policy |
| As it negotiates U.S. trade policy, including the massive Trans-Pacific Partnership (TPP) and the upcoming E.U.-U.S. trade deal, the Obama administration seeks closed-door council from its network of 28 trade advisory committees. These committees are made up of U.S. citizens and ostensibly exist to represent the public’s interests in these negotiations. But the advisory committees […] |
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Reforming the laws won’t be enough. Immigrants need financial help, too |
| Nobody quite knows what immigration reform will looks like, much less when it will happen, but one thing's for sure: Under a new law, immigrants would be asked to pay at least several hundred dollars in fees for the privilege of becoming U.S. citizens, not to mention all the back taxes they might owe. For […] |
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Why the Fed’s taper could still cause a market meltdown |
| Last summer, when speculation heated up over the Federal Reserve’s plans to begin to “taper” its bond purchases, markets went wild. Bond yields spiked and stocks fell. But things calmed down, and when the Fed ultimately did taper, it went off without a hitch. But a major new paper by a quartet of top economists now […] |
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Wonkbook: Puneet Kollipara is your next Wonkbooker |
| Welcome to Wonkbook, Wonkblog’s morning policy news primer by Evan Soltas. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here. I've written approximately 360 Wonkbooks since I started in the summer of 2012, and this one is my last. Puneet […] |
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Consumer Financial Protection Bureau isn’t out of the woods yet |
| The two-and-a-half-year-old Consumer Financial Protection Bureau may finally have a confirmed director, but that doesn't mean Republicans are done throwing rocks at it. The House debated (UPDATE: And passed, 232-182) a package of bills this afternoon that would replace the bureau's single director with a five-person commission, prevent it from collecting consumer credit card information, […] |
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I've written approximately 360 Wonkbooks since I started in the summer of 2012, and this one is my last. Puneet Kollipara is the next Wonkbooker. He starts Monday.
I'm confident that Puneet will keep Wonkbook the best digest of the day's public policy news. He's a wonk, too -- he joins Wonkblog as a specialist in science and environmental policy, with previous experience writing for Chemical & Engineering News, Science News, and Inside EPA. You should follow him on Twitter, along with Wonkblog itself.
I'm heading off to join Ezra Klein as an economics writer on his new venture. I'm also continuing as an opinion contributor to Bloomberg View. And you can follow me on Twitter @esoltas.
I'm deeply grateful for the opportunity to work at The Washington Post and to all the people who helped me along the way. Particular thanks go to Michelle Williams and Amrita Jayakumar, Wonkbook's current and former producers; Karl Singer and Dylan Matthews, my predecessors; and Ezra Klein and David Cho, my supervisors.
They put enormous trust in me as a young writer, and I can only hope I've repaid them. Wonkbook has been one of the best experiences of my life, and one of those from which I've learned and grown the most.
And the greatest thanks, of course, go to Wonkbook's incredibly loyal and, well, wonky readership. It's been an honor.
Wonkbook's Number of the Day: 4.1 percent. That's how small the federal budget deficit was in 2013 as a percentage of gross domestic product. It's the smallest since 2008, when the recession caused the deficit to swell.
Wonkbook's Chart of the Day: Where the cuts happened.
Wonkbook's Top 5 Stories: (1) budget deficit falls to 4.1 percent of GDP; (2) monetary policy is also tightening; (3) gay rights, red states; (4) saving HealthCare.gov; and (5) the interconnections of energy.
1. Top story: The deficit is shrinking away
Federal budget deficit falls to smallest level since 2008. "Closing the books on a fiscal year in which the federal budget deficit fell more sharply than in any year since the end of World War II, the Treasury Department reported on Thursday that the deficit for 2013 dropped to $680 billion, from about $1.1 trillion the previous year. In nominal terms, that is the smallest deficit since 2008, and signals the end of a five-year stretch beginning with the onset of the recession when the country's fiscal gap came in at more than $1 trillion each year. As a share of the nation's economy, the budget deficit fell to about 4.1 percent, from a high of more than 10 percent during the depths of the Great Recession." Annie Lowrey in The New York Times.
The nation's budget wars have reduced the deficit by $3.3 trillion. "The endless rounds of deficit reduction in Washington in recent years have significantly improved the nation's budget outlook, reducing projected borrowing by $3.3 trillion through 2024, according to new estimates by Senate Budget Committee chairman Patty Murray (D-Wash.)...As this chart from Murray shows, the discretionary budget, which funds the Pentagon and other agencies, will absorb nearly half of the cuts, or $1.6 trillion...A quarter of the impact comes from the higher taxes on the wealthy that were adopted during the fiscal cliff fight. And another 20 percent comes from not borrowing as much and not having to pay more than $700 billion in interest that otherwise would have accrued. Mandatory programs, which include Social Security and Medicare, were barely nicked, meanwhile, accounting for just 7 percent of overall savings." Lori Montgomery in The Washington Post.
@ryanlcooper: The 2010-2013 fevered obsession with the 2050 budget deficit from is going to look monstrous to future historians
Does the declining deficit mean Obama should embrace the GOP tax plan? "Should Obama take the fig leaf of a tax reform proposal offered by Camp -- regarded by all sides as reasonable, the most compromising proposal made by a Republican in some time -- and respond with a cool, if not warm, embrace? Should Obama say, "I can work with this," and then work with it -- suggest some modifications to ease Democratic concerns, find some money for domestic investments in jobs and infrastructure and research and development? Or should he blow it off? The funny thing is the Camp tax reform proposal is a bit of mirror image to Obama's own budget proposals -- compromise offers that try to reach the other side halfway. The Camp proposal is very much in the Obama mold." Zachary A. Goldfarb in The Washington Post.
Wall Street hates Dave Camp. "Private equity and investment firms in New York are telling key Republican players in D.C. that commitments for big-dollar fundraising have been "canceled for the foreseeable future," according to one GOP lobbyist with knowledge of the conversations...Big banks want to turn Republicans against the bank tax. The situation puts the party at risk of seeing a reliable source of campaign cash dry up right in the middle of a critical election year. The tax proposal itself is not even expected to get a vote in the House, since it's so unpopular among most Republicans. That Wall Street would react so ferociously to a dead-end bill is a reminder of how hard a powerful player is willing to fight to protect its interests in Washington." Jake Sherman, Anna Palmer and Lauren French in Politico.
CHAIT: Now this is a Republican tax reform plan. "The tax-reform proposal unveiled yesterday by Dave Camp, chairman of the House Ways and Means Committee, does something remarkable: It actually reforms the tax code. It doesn't use the pretense of reform to shift the tax burden off the rich, as Republican "tax reform" plans usually do, and it does not use hand-waving to gesture in the direction of reform without following through. Camp has actually plunged his hands into the guts of the tax code and pulled out item after item. It may be the most impressive and ambitious domestic policy proposal crafted by a major Republican in a generation." Jonathan Chait in New York Magazine.
PONNURU: Dave Camp's one huge tax problem. "It imposes a new tax on a few banks with a large number of assets. This tax is not completely unjustified: It's billed as a way of offsetting the advantage these firms get from being considered candidates for bailouts in the event they run into trouble. But is this the right way to fix that problem? Shouldn't we base the tax on liabilities rather than assets, if we're trying to tackle the too-big-to-fail problem?" Ramesh Ponnuru in Bloomberg.
Music recommendations interlude: The Beatles, "Hello, Goodbye," 1967.
Top opinion
BIDEN: We need TPP. "High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/bde80c72-9fb0-11e3-b6c7-00144feab7de.html#ixzz2uaXXQ6Be The question is whether the US will take a leadership role in shaping a new course that reflects American values - or whether we will stand on the sidelines as a new order unfolds." Joe Biden in The Financial Times.
KRUGMAN: No big deal. "It's far from clear that the T.P.P. is a good idea. It's even less clear that it's something on which President Obama should be spending political capital. I am in general a free trader, but I'll be undismayed and even a bit relieved if the T.P.P. just fades away. The first thing you need to know about trade deals in general is that they aren't what they used to be...Why? Basically, old-fashioned trade deals are a victim of their own success: there just isn't much more protectionism to eliminate." Paul Krugman in The New York Times.
FOURNIER: The religious-liberty excuse. "The Bible is both a holy book and a book of loopholes, open to broad interpretation and, at one time, the source of racist inspiration. My takeaway: In this great and diverse country, we are capable of protecting people's right to express their faith and worship freely without tramping others' rights to live freely." Ron Fournier in National Journal.
SUDERMAN: Obamacare's failed state exchanges. "The federal government spent more on broken state-run exchanges than it did on its own troubled system. Of the 14 states, plus the District of Columbia, that established their own health insurance coverage under Obamacare, seven remain dysfunctional, disabled, or severely underperforming. Development of those exchanges was funded heavily by the federal government through a series of grants that totaled more than $1.2 billion--almost double the $677 million cost of development for the federal exchange." Peter Suderman in Reason.
PORTER: Why college supply matters. "Most discussion about our dismal educational attainment implicitly assumes that if the demand for higher education materializes, public and nonprofit colleges and universities will step up to meet it. Recent research has shown, however, that this is not generally the case. There is pretty good evidence that shortfalls in the supply of higher education slots have constrained college completion. John Bound of the University of Michigan and Sarah Turner at the University of Virginia tracked college education through the second half of the 20th century. They found that when states had a large college-age population, public spending per student declined and graduation rates suffered." Eduardo Porter in The New York Times.
BROOKS: Ease and ardor. "Michel de Montaigne and Samuel Johnson are two of the greatest essayists who ever lived. They tackled similar problems and were fascinated by some of the same perplexities, but they represent different personality types and recommended two different ways to live." David Brooks in The New York Times.
Cliches interlude: Time will tell whether you turn a blind eye to this little-noticed link, but at the end of the day, who cares?
2. Monetary policy is also tightening
Yellen says the Fed is sticking to its tightening plans for now, despite a wintertime slowdown. "Federal Reserve Chairwoman Janet Yellen said bad weather might explain the patch of soft economic data making headlines during the past few weeks, but she isn't quite sure. The Fed's uncertainty on the matter likely puts its policy plans on cruise control for now, meaning continued reductions in monthly bond purchases unless the weak data persist and change the officials' view about the economic outlook." Jon Hilsenrath and Pedro Nicolaci Da Costa in The Wall Street Journal.
Here's the most important thing Janet Yellen said today. "Mr. Chairman, let me add as an aside that since my appearance before the House committee, a number of data releases have pointed to softer spending than many analysts had expected. Part of that softness may reflect adverse weather conditions, but at this point, it's difficult to discern exactly how much. In the weeks and months ahead, my colleagues and I will be attentive to signals that indicate whether the recovery is progressing in line with our earlier expectations" Ylan Q. Mui in The Washington Post.
Orders for durable goods rose in January. "The Commerce Department said durable goods orders excluding transportation rose 1.1 percent, the largest increase since May, after falling 1.9 percent in December...Still, the data on Thursday was not enough to alter views that economic growth hit a soft patch early in the first quarter, with important measures like shipments declining last month." Reuters.
Jobless claims rise more than expected. "The number of Americans filing new claims for unemployment benefits jumped last week, the latest indication of volatility in the nation's job market. Initial claims for jobless benefits, a measure of changes in employment nationwide, rose by 14,000 to a seasonally adjusted 348,000 in the week ended Feb. 22 from the previous week's downwardly revised figure of 334,000, the Labor Department said Thursday. Economists surveyed by Dow Jones had predicted claims would come in at 335,000. Jobless claims can be volatile. The four-week moving average of claims, considered more reliable because it smooths out week-to-week gyrations, held steady last week at 338,250." Ben Leubsdorf and Josh Mitchell in The Wall Street Journal.
Fisher: Faster taper, please. "The economy has "enough money to create jobs," he said. In the case of a "more rapidly accelerating economy, I might be in favor of a further reduction," in bond buys he said...Speaking at the conference sponsored by Germany's central bank, Mr. Fisher warned that a prolonged period of accommodative monetary policy could create risks to financial stability, in part by steering money to risky assets." Todd Buell and Christopher Lawton in The Wall Street Journal.
The Fed's curse of unanimity. "Neil Fligstein, a sociology professor at the University of California, Berkeley, argues in a recent paper that the broader problem was cultural. The Fed increasingly is dominated by one kind of official: academic economists who lack private-sector experience. "They all start out analyzing everything in more or less the same way," he said...[I]t remains a striking fact that Fed officials were not just wrong about economic conditions, but wrong in roughly the same way." Binyamin Appelbaum in The New York Times.
Bernanke set to relive his worst day ever. "Former Federal Reserve chairman Ben S. Bernanke is slated on Thursday to provide a long-awaited deposition in a landmark class-action lawsuit over the government's bailout of insurance giant AIG. His sworn testimony comes after a long legal battle in which the government sought to shield Bernanke from providing a statement. Last summer, U.S. Federal Claims Court Judge Thomas Wheeler ruled that Bernanke's "personal involvement" in AIG's $85 billion bailout makes him a key witness. But an appeals court acknowledged that deposing Bernanke while he was in office could cause "significant" disruption." Ylan Q. Mui in The Washington Post.
Consumer Financial Protection Bureau isn't out of the woods yet. "[T]he CFPB is probably safe -- at least until the midterm elections. But the continued onslaught is evidence that it hasn't made as many friends as it might've hoped, even after delivering $3 billion to consumers in settlements over fraudulent practices by financial institutions, and helping thousands who called in to complain about mortgages, student loans, auto loans, payday lenders, and debt collectors. The bureau's leaders tried really, really hard to win over the community banks and credit unions, but their trade associations still spoke out in favor of the legislation that would render it essentially powerless, protesting that the CFPB's new requirements are still too onerous for smaller institutions to deal with." Lydia DePillis in The Washington Post.
Fed set to ignore Bitcoin. "Federal Reserve Chairwoman Janet Yellen on Thursday distanced the central bank from oversight of bitcoin and other virtual currencies, the latest sign that emerging forms of digital payment continue to operate in a sort of regulatory black hole. "The Federal Reserve simply does not have authority to supervise or regulate bitcoin in any way," Ms. Yellen said at a Senate Banking Committee hearing Thursday. "This is a payment innovation that is taking place entirely outside the banking industry."" Ryan Tracy and Scott Patterson in The Wall Street Journal.
The incredible stock-picking ability of SEC employees. "[I]n the report titled "The Stock Picking Skills of SEC Employees," researchers found that SEC employees' stock purchases look like your average person's. But when these employees sell their stocks, they appear to systematically beat the market by making sales within weeks of costly enforcement actions by the agency. "These results suggest that SEC employees potentially trade profitably under the new rules, and that at least some of their profits potentially stem from trading ahead of costly SEC sanctions and on privileged non-public information," write Shivaram Rajgopal, a professor of accounting at Emory University, and Roger M. White, a doctoral student in accounting at Georgia State University. "In short, it appears that SEC employees continue to take advantage of non-public information to trade profitably in stocks under their regulatory purview."" Jia Lynn Yang in The Washington Post.
Interesting interlude: The dark psychology of being a talented comedian.
3. Gay rights force their way into red states
Kentucky must recognize out-of-state same-sex marriages, federal judge says. "A federal judge signed an order Thursday directing state officials to immediately recognize same-sex marriages performed in other states and countries. U.S. District Judge John G. Heyburn II issued a final order throwing out part of the state's ban on gay marriages. It makes his Feb. 12 ruling official. The order doesn't affect a related lawsuit seeking to force the state to issue marriage licenses to same-sex couples. The order came just hours after Kentucky's attorney general asked for a 90-day delay to decide whether to appeal the earlier ruling. Heyburn's final order did not mention the request for a stay." The Washington Post.
D.C. insurance must cover treatment for transgender residents, mayor says. "Health insurance providers in the District of Columbia must cover treatment for those given a diagnosis of gender dysphoria, including gender-reassignment surgeries, Mayor Vincent C. Gray said Thursday. Building on the District of Columbia's existing anti-discrimination measures, the announcement reiterates that gender dysphoria -- a diagnosis for psychological discomfort with one's sex, formerly known as gender identity disorder -- is a recognized medical condition. As such, treatment deemed necessary by medical professionals must be covered by insurers, including Medicaid...The mayor's office was careful to note that this was not a change but rather a clarification of a policy that went into effect last March, prohibiting medical discrimination on the basis of gender identity or expression." Emmarie Huetteman in The New York Times.
After veto in Arizona, conservatives vow to fight for religious liberties. "Conservative activists said Thursday that they will continue to press for additional legal protections for private businesses that deny service to gay men and lesbians, saying that a defeat in Arizona this week is only a minor setback and that religious-liberty legislation is the best way to stave off a rapid shift in favor of gay rights...Many conservatives said they will continue working to convince voters and judges that opponents of same-sex marriage and abortion are motivated by faith rather than bigotry." Juliet Eilperin in The Washington Post.
Why Republicans themselves shot it down. "The decision by members of the Republican establishment to join gay activists in opposing the bill reflected the alarm the Arizona battle stirred among party leaders, who worried about identifying their party with polarizing social issues at a time when Republicans see the prospect of big gains in Congressional elections on economic issues. No less important, the bill produced almost unanimous opposition among one critical Republican constituency -- business owners -- who feared it would entangle the state in lawsuits and prompt a damaging boycott." Adam Nagourney in The New York Times.
Names interlude: What your name says about your politics.
4. How HealthCare.gov was saved
Key healthcare longread: How an unlikely group of high-tech wizards revived Obama's troubled HealthCare.gov website. Steven Brill in Time Magazine.
Surgeon general nominee one step closer. "President Obama's nominee for surgeon general is one step closer to confirmation after the Senate health committee approved him for the job on Thursday. The Senate will likely confirm Dr. Vivek Murthy in the coming weeks despite a move by Sen. Rand Paul (R-Ky.) to block the nomination over concerns about Murthy's stance on guns." Elise Viebeck in The Hill.
Food labels to get first makeover in 20 years with new emphasis on calories, sugar. "The new label, which could take a year or more to appear on store shelves, includes more than half a dozen significant changes -- such as more prominent calorie counts and more realistic serving sizes -- that advocates see as key in fighting the country's obesity epidemic. Years of research show that tracking calories may be more important than tracking fat consumption when it comes to your health...The Grocery Manufacturers Association and other industry groups have said they are committed to working with the administration to help Americans make better diet choices. As the new labels were being developed, however, they expressed strong objections to some of the FDA's ideas, especially the addition of a line for "added sugars."" Ariana Eunjung Cha and Krissah Thompson in The Washington Post.
Interview: Burkey Belser, who designed the original nutrition facts label, on the new proposals. Ariana Eunjung Cha in The Washington Post.
Insurers become Obamacare foot soldiers. "Insurance companies are serving as foot soldiers for ObamaCare with a multimillion-dollar ad campaign intended to push customers into the insurance exchanges. Though the companies are reluctant to publicize their role in the unpopular law, health insurers are expected to spend hundreds of millions of dollars in 2014 alone on television, radio and online ads aimed at boosting enrollment." Elise Viebeck in The Hill.
We all feel like this interlude: Husky gets a head massager.
5. Why energy policy is complex
U.S. moves towards Atlantic oil exploration. "The Interior Department opened the door on Thursday to the first searches in decades for oil and gas off the Atlantic coast, recommending that undersea seismic surveys proceed, though with a host of safeguards to shield marine life from much of their impact. The recommendation is likely to be adopted after a period of public comment and over objections by environmental activists who say it will be ruinous for the climate and sea life alike." Michael Wines in The New York Times.
Bakken crude, rolling through Albany. "With little fanfare, this sleepy port has been quietly transformed into a major hub for oil shipments by trains from North Dakota and a key supplier to refiners on the East Coast. Hidden in plain sight, Albany's oil boom has taken local officials and residents by surprise...About 75 percent of Bakken oil production travels by rail and as much as 400,000 barrels a day heads to the East Coast, said Trisha Curtis, an analyst at the Energy Policy Research Foundation. Albany gets 20 to 25 percent of the Bakken's rail exports, according to various analyst estimates." Jad Mouawad in The New York Times.
Senators take another crack at energy bill. "A bipartisan Senate duo on Thursday renewed the fight for passage of an energy efficiency bill. Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) on Thursday reintroduced an energy efficiency bill that stalled in September after debates about the Affordable Care Act and the Keystone XL pipeline sidetracked the legislation. This time around, backers are optimistic the bill will pass. Sponsors include Sens. Mary Landrieu (D-La.), John Hoeven (R-N.D.), Kelly Ayotte (R- N.H.), and Chris Coons (D-Del.). The revamped legislation includes an extra 10 amendments, ranging from efficiency retrofits on low-income housing to a program that promotes energy efficiency in leased commercial buildings. All of the additions are meant to help the bill garner enough support to pass the Senate." Laura Barron-Lopez in The Hill.
Art interlude: Banksy and "The Simpsons."
Wonkblog Roundup
How Obama is trying to lift up young men of color. A Q&A with Joshua Dubois. Zachary A. Goldfarb.
Burkey Belser, who designed the original nutrition facts label, on the new proposals. Ariana Eunjung Cha.
The incredible stock-picking ability of SEC employees. Jia Lynn Yang.
Bernanke set to relive his worst day ever. Ylan Q. Mui.
Here's the most important thing Janet Yellen said today. Ylan Q. Mui.
We have an answer: The nation's budget wars have reduced the deficit by $3.3 trillion. Lori Montgomery.
Does the declining deficit mean Obama should embrace the GOP tax plan? Zachary A. Goldfarb.
Consumer Financial Protection Bureau isn't out of the woods yet. Lydia DePillis.
Et Cetera
Five years on, rudderless Tea Party searches for meaning. John Stanton in BuzzFeed.
Yahoo webcam images from millions of users intercepted by GCHQ. Spencer Ackerman and James Ball in The Guardian.
Got tips, additions, or comments? E-mail us.
Wonkbook is produced with help from Michelle Williams.
