Wonkbook: Lincoln's hand strengthened; energy bill stalled; deficit fears dominant
In the wake of her primary victory, Blanche Lincoln is gaining support for her derivatives reform proposal. Meanwhile, energy legislation is stalled in the Senate following Lindsey Graham's announcement that he will oppose a carbon cap. Some attention is turning towards Richard Lugar's no-cap compromise, which is exactly the sort of half-measure Graham used to say he wouldn't support. Now he's a co-sponsor. And a new Gallup poll shows people are more worried about the deficit than about health-care costs, immigration, global warming, corporate power, unemployment...
Welcome to Wonkbook.
Blanche Lincoln's derivatives reforms are gaining ground following her primary win, report Michael Crittenden and Victoria McGrane: "Diane Raley, a spokeswoman for Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said Mr. Hoenig has been studying the provision and finds 'it is consistent with his desire to take the riskiest activities out of the commercial banking system.' Senate Majority Whip Richard Durbin (D., Ill.) said Ms. Lincoln is now in a stronger position. 'She returns as the chairman of the Agriculture Committee, running for re-election in November, which I think gives her a strong bargaining position.'"
A new Gallup poll finds the national debt tied with terrorism as voters' biggest worry. Health-care costs, unemployment, immigration, and global warming all lag. http://bit.ly/9sbXaf
Meredith Shiner reports that the Senate doesn't know what to do about energy: "Graham’s situation captures the confusion and lack of vision on energy legislation. He broke off with Kerry and Lieberman last month. He said Tuesday that Lugar’s bill probably couldn’t get many votes. And suddenly Wednesday, Graham had become a chief co-sponsor of Lugar’s bill."
Speaking of Lugar's bill, John Broder writes up an introduction: http://bit.ly/dufQG1
2012 watch begins: Andrew Ferguson's extremely-flattering profile of Mitch Daniels shows why the Indiana governor is increasingly the choice of conservative policy wonks.
Barbecue interlude: People like flavored ices, right?
Table of Contents: Bill Gates wants more energy research (and other energy news); Ben Bernanke is warning Congress about the deficit (and other economic news); the House is set to pass a big capital gains tax cut (and other domestic policy news); and credit unions are resisting the swipe fee regulations in FinReg (and other FinReg news).
BP has been trying to block coverage of the oil spill, reports Jeremy Peters: "In the first few weeks after the oil rig explosion, BP kept a tight lid on images of the oil leaking into the gulf. Even when it released the first video of the spewing oil on May 12, it provided only a 30-second clip. The most-detailed images did not become public until two weeks ago when BP gave members of Congress access to internal video feeds from its underwater rovers. Without BP’s permission, some members of Congress displayed the video for news networks like CNN, which carried them live."
Richard Lugar is out with a new greenhouse gas bill. Brad Plumer says it's a mixed bag.
Inspector numbers in the Gulf of Mexico haven't kept pace with offshore drilling growth, report Juliet Eilperin and Steven Mufson: "Although the number of exploration rigs soared and the number of deep-water oil-producing projects grew more than tenfold from 1988 to 2008, the number of federal inspectors working for the Minerals Management Service has increased only 13 percent since 1985."
Public support for offshore drilling is plummeting. 72 percent want fewer or the current number of offshore wells.
Republicans are resisting a tax on offshore oil drilling, reports Scott Wong: "The proposal, part of a larger tax extenders bill being debated by the Senate, increased the tax on offshore oil to 41 cents per barrel from 8 cents. Republicans have complained that the money generated by the tax hike—$15 billion over 10 years—actually would be used to ease a House-backed tax on investment fund managers and to offset increased spending on things like Medicaid."
Josh Green thinks the oil spill is killing the Tea Parties: http://bit.ly/cii33M
Adorable synergy interlude: Cute dog messes with cute baby.
Ben Bernanke fears the US could end up in Europe's current situation, reports Jia Lynn Yang: "The budget deficit was necessary to help get the nation out of recession, Bernanke said, but will have to be addressed in the long term, particularly in light of the European debt crisis."
Russ Feingold has introduced an administration-supported line-item veto alternative, reports Jackie Calmes: "It would require a president to send Congress proposed rescissions within 45 calendar days after signing an appropriations measure – sooner than the 45 Congressional business days that Mr. Obama proposed as a deadline. Congress would have to consider the president’s rescissions proposal immediately and the House and Senate could not amend it."
Build America Bonds for state and local governments are under fire as the administration is trying to extend them. http://bit.ly/9RABvT
Economists predict a slow recovery, reports Phil Izzo: "On average, the 53 respondents to the Journal's monthly survey still expect the U.S. economy to grow about 3% in the second half of the year and to continue at that pace into 2011. That means adding jobs so gradually that unemployment, now at 9.7%, will be at a still-elevated 8.6% by the end of December 2011."
Board game interlude: The shortest possible game of Monopoly.
The House is preparing to pass a capital gains tax cut for small businesses, reports Martin Vaughan: "Under current law, investors may exclude 75% of their gains from capital-gains taxes for small business stock purchased before Jan. 1, 2011, and held for five years. The House bill would increase that exclusion to 100% and extend it for an additional year, through the end of 2011. It also would ease IRS penalties on small businesses for failing to disclose their use of certain employee-benefit plans the IRS has branded tax shelters."
Ann Gerhart and Philip Rucker profile Elena Kagan's ability to flatter and impress important people:. http://bit.ly/cpuVHE
Fees on foreign investment set to rise, reports Miriam Jordan: "The initial cost to process a petition for a foreigner seeking to earn the right to live in the U.S. by investing at least $500,000 and creating jobs, under a program known as EB-5, would rise to $1,500 from $1,435. However, another fee associated with the program, which must be paid about two years later, would jump to $3,750 from $2,850. Operators of so-called regional centers—projects designated to receive investment by the foreigner entrepeneurs—will have to pay $6,230 to qualify for those funds, according to the new fee structure."
The GOP is resisting FCC regulation of the Internet, reports Tony Romm: "Republican appropriators slammed the Federal Communications Commission on Wednesday for leaving Congress on the sidelines as it seeks to enforce net neutrality and more heavily regulate Internet providers.…An incensed Rep. John Culberson (R-Texas) even warned federal dollars could be on the line if the agency uses its own rule-making process to rein in companies like Verizon, AT&T and Comcast."
Celebrity phobia interlude: Salma Hayek is not fond of snakes.
Credit unions want swipe fee rules in FinReg changed, report Ylan Mui and Brady Dennis. And they have the lobbying power to make it happen: "Community bankers, auto dealers and other Main Street businesses have won exemptions from proposed new regulations by repeating a mantra not available to big Wall Street firms: We didn't cause the crisis.…'The major influence has been legitimate grass-roots networks -- credit unions, auto dealers,' said Rep. Barney Frank (D-Mass.). 'They are the kinds of operations that have members in every district. People who get sponsored by big institutions have had very little impact.'"
Former financial workers are flocking to work on Capitol Hill, and not as lobbyists, reports Erika Lovley: "Capitol Hill has become a magnet for some former financial industry executives, who have traded high-flying jobs for the grind of congressional hearings and committee markups. Some are taking Hill salaries that would have been a mere Christmas bonus on Wall Street. One former Lehman Brothers analyst still calls his buddies in the trading pit in New York. Another who did work for the defunct investment giant landed a spot in a congressional office — as an unpaid intern."
Closing credits: Wonkbook compiled with the help of Dylan Matthews.
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