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Wonkbook: Orszag out in July; swipe fee deal reached; a "Hoover moment"

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Budget chief Peter Orszag might become the first member of President Obama's cabinet to resign, which means it's time for Washington to play its favorite game: Guess the replacement! Meanwhile, House and Senate conferees have reached a deal on regulating debit card fees, and for all the talk about how the U.S.'s fiscal policy is too tight, we're the ones begging the rest of the world to loosen up a bit.

It's Tuesday, if you know what I mean. Welcome to Wonkbook.

Top Stories

OMB director Peter Orszag will likely resign in July and move to a think tank, reports Hans Nichols: "Among the potential replacements under consideration are Laura Tyson, a former director of the National Economic Council under President Bill Clinton, and Rob Nabors, who served as OMB deputy director under Orszag before moving to the White House to work under Chief of Staff Rahm Emanuel, said one of the officials."

Ed O'Keefe names and flash-profiles seven possible successors for Orszag: http://bit.ly/a8bqkU

House conferees have mostly agreed to the Senate's strict limits on debit card fees, reports Binyamin Appelbaum: "The agreement largely preserves the Senate’s language, telling the Federal Reserve to limit the fees that banks collect from merchants when customers swipe debit cards. That is expected to save merchants billions of dollars, some of which could be passed on to customers in the form of lower prices."

U.S. plans to argue against global austerity measures at the G-20, report Bob Davis and Marcus Walker. The U.S. plans to press its economic partners at a summit to move cautiously with plans to tighten their fiscal policies while the global economic recovery remains uncertain, for fear of producing a "Hoover moment."

Cineaste interlude: A Kubrick/Scorsese mashup.

Still to come: Ken Salazar renames the Mineral Management Service; Americans want to move beyond oil but they oppose policies that would get us there; and a Wendell Primus profile. Did you hear that? I said a Wendell Primus profile!

Energy

A New York Times/CBS poll has good news and bad news for environmentalists, report John Broder and Marjorie Connelly: Overwhelmingly, Americans think the nation needs a fundamental overhaul of its energy policies, and most expect alternative forms to replace oil as a major source within 25 years. Yet a majority are unwilling to pay higher gasoline prices to help develop new fuel sources."

The panel charged with investigating the oil spill will not recommend lifting the offshore drilling moratorium before year's end, reports John Broder: "The co-chairman, William K. Reilly, who served as administrator of the Environmental Protection Agency under the first President George Bush, also said it was unlikely that the panel would recommend the lifting of the six-month moratorium on deep-water drilling before it completed its report. Such a move would require profound changes in industry practice and government oversight that could not be done that quickly, Mr. Reilly said in his first extensive remarks on the commission’s work."

Ken Salazar has renamed the Minerals Management Service the Bureau of Ocean Energy: http://bit.ly/9JlD4F

R&D neglect is holding back energy innovation, reports Peter Coy: "Energy companies worldwide are far less science-oriented than one might expect from an industry that is heavily dependent on technology for safety and profit. In the U.S., energy companies' spending on research, development, and deployment amounts to just 0.3 percent of sales. That's barely more than a tenth what the auto industry spends as a share of sales and is dwarfed by the pharmaceutical industry, which spends nearly 19 percent of sales."

Utilities are split on supporting a utilities-only carbon cap; most support an economy-wide cap: http://politi.co/cxCKwZ

Deep-water drilling will likely continue, reports Steven Mufson: "Willie Sutton robbed banks because that's where the money is. And oil companies venture into deep waters for exploration because that's where the oil is.…Within five years, global deep-water production is expected to rise by two-thirds, to 10 million barrels a day, according to Cambridge Energy Research Associates. That's equivalent to the amount of crude oil that the world's largest exporter, Saudi Arabia, produces."

Bad weather threw a dent in the Gulf cleanup efforts: http://bit.ly/bHELV3

Historians are ranking the Gulf spill with the largest disasters in US history, report David Fahrenthold and Ylan Mui: "The Dust Bowl of the 1930s caused more social upheaval. The Exxon Valdez spill had a higher wildlife death toll. The pesticide DDT affected a wider swath of the country. But just asking the question reveals a depressing truth about the current catastrophe. It has a great deal in common with the others: private interests that took risks in search of a payoff; a government that wasn't trying hard enough to stop them."

Alternative hip/hop interlude: Blackalicious' "Blazing Arrow".

Economy/FinReg

With China's currency floating, the focus at the G-20 conference will be on Europe's problems, reports Sewell Chan: "Officials said on Monday that the pace and path of European fiscal consolidation was likely to be the main topic of discussion, along with three critical questions relating to regulatory reform: how tough to make new capital requirements for banks, how best to oversee the trading of derivatives, and whether to impose a tax on giant banks, which is favored by the United States and most European economies. Canada, Japan and Australia oppose the bank tax."

Nonetheless, Chuck Schumer is pressing forward on legislation targeting the yuan: http://politi.co/dt7I2L

Making Home Affordable is rejecting more homeowners, reports Renae Merle: "A growing number of borrowers are failing to move from the program's initial stage into a permanent loan modification. Lenders have said that many homeowners are failing to make the reduced loan payments and others have not been able to prove they qualify for mortgage assistance. The number of borrowers dropped from the program, about 436,000, eclipses those who have been helped, according to Treasury Department data. More than 100,000 borrowers lost their mortgage aid in May."

The G-20 conference is drawing attention to the success of Canada's banking system: http://bit.ly/cY6ST4

Barney Frank and House negotiators will push for auto dealers to be exempt from FinReg, reports Carrie Budoff Brown: "Rep. Barney Frank (D-Mass.), the lead House negotiator, released a proposal Monday to not only maintain the exemption for auto dealers from oversight of a new consumer protection agency but also expand it to include dealers that finance the purchase of motorcycles, boats, recreational vehicles and motor homes."

New reports predict that FinReg is expected to cut bank profits 10-20%, trim bonuses slightly, and shut down no banks: http://politi.co/cTIGqB

Banking lobbyists are targeting the Volcker rule in the FinReg home stretch, report Eric Dash and Nelson Schwartz: "The three main changes under consideration would be a carve-out to exclude asset management and insurance companies outright, an exemption that would allow banks to continue to invest in hedge funds and private equity firms, and a long delay that would give banks up to seven years to enact the changes."

'80s confirmation battle flashback interlude: Gregory Peck was not fond of Robert Bork.

Domestic Policy

The Senate is fighting over would-be Medicare/Medicaid administrator Donald Berwick's nomination, reports Robert Pear: "The Senate Republican leader, Mitch McConnell of Kentucky, describes Dr. Berwick as an 'expert on rationing.' Senator Pat Roberts, Republican of Kansas, calls him 'the perfect nominee for a president whose aim has always been to save money by rationing health care.'…Asked about such statements, Reid H. Cherlin, a White House spokesman, said: 'Rationing is rampant in the system today, as insurers make arbitrary decisions about who can get the care they need. Don Berwick wants to see a system in which those decisions are transparent, and the people who make them are held accountable.'"

The White House and Chris van Hollen are pushing forward with the DISCLOSE Act: http://bit.ly/aRx9N0

House Dems are preparing a vote on a budget alternative that would eschew a deficit vote, reports Walter Alarkon: "House Budget Committee Chairman John Spratt (D-S.C.) said the alternative would be the 'functional equivalent' of a full-fledged budget. But because it won't be a traditional budget resolution, it will be silent on future deficits, which are expected to average nearly $1 trillion for the next decade."

The FCC is in negotiations with AT&T, Verizon, Google, and Skype on its proposed Internet regulations: http://bit.ly/akjEdf

Nancy Pelosi's chief policy advisor, Wendell Primus, pushed the White House left on health care, reports Mary Ann Akers: "As Pelosi's point man during the epic health-care effort, Primus routinely clashed with Emanuel, the White House chief of staff. When Primus orchestrated a meeting at the height of negotiations, to challenge the White House's position on Medicare payments to doctors, 'Rahmbo' went quintessentially ballistic.…The tension between the two dates to the Clinton administration, when Emanuel was a top White House policy adviser and Primus, a big cheese at the Department of Health and Human Services, resigned in protest over President Bill Clinton's signing of the 1996 welfare reform bill."

HHS community health centers administrator Mary Wakefield explains how she plans on implementing health care reform: http://bit.ly/a8WS8S

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.

By Ezra Klein  |  June 22, 2010; 6:29 AM ET
Categories:  Wonkbook  
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Comments

We got corporate centrist health care. You can really move health care towards the l3eft by going to http://www.democratz.org

Posted by: WWWoDEMOCRATZoORG | June 22, 2010 7:11 AM | Report abuse

Re: the NYT/CBS energy poll -- all the more evidence that an energy/climate policy should be in line with the CLEAR Act -- and the need for heavy advertisement of how it works to cushion people from the effects of higher energy prices.

Posted by: JonathanTE | June 22, 2010 8:37 AM | Report abuse

"But just asking the question reveals a depressing truth about the current catastrophe. It has a great deal in common with the others: private interests that took risks in search of a payoff; a government that wasn't trying hard enough to stop them."

Seriously? A world in which private interests were prevented from taking risks in search of a payoff is a world in which we live in caves and die at thirty. And infant mortality is 70%. Is that really the argument they want to make?

And while, yes, stopping them would have prevented the catastrophe, actual oversight and a few extra regulations appropriate to the construction of deepwater oil rigs, and a MMS that wasn't occupied with the pressing matters of hookers and blow, would have also stopped it.

Eventually, a robust alternative energy infrastructure is going to involve private interests taking risks in pursuit of a payoff. And even the government involvement is going to involve some willingness to risk money and time, as well as the fact that the money the government invests in alternative energy will be coming from the taxes payed by people taking risks in pursuit of a payoff (and those working for those people). It's risk! For a payoff! Stop them!

"You're going to give someone a 'medicine' made from mold growing on bread? Risky! Insane! Someone stop that guy!"

Posted by: Kevin_Willis | June 22, 2010 8:51 AM | Report abuse

"The Senate Republican leader, Mitch McConnell of Kentucky, describes Dr. Berwick as an 'expert on rationing.'"

I'd be curious as to what the alternatives are. Eventually, if you are going to control health care costs, it has to be rationed. It can either be rationed via the libertarian ideal--fee for service. If you can't afford your healthcare, you don't get it. Rationing done. Or you can us 3rd party private interest rationing, which we have now. The insurance company doesn't want to pay for your healthcare, so they don't, and you sue them, and maybe you live until the suit is over, and maybe you don't. Rationing is again accomplished.

The final system, the government rations your healthcare, based on their own arbitrary standards, and when you don't get covered you or your family sue, and probably make out better than when you were suing private insurers.

But I don't see a system in which healthcare is not rationed, or one in which that rationing is not unfair to somebody.

Posted by: Kevin_Willis | June 22, 2010 8:55 AM | Report abuse

President Obama claimed he would have fired BP's CEO.

Yet has Obama fired ANYONE of consequence?

And will he find the nerve to fire Gen. McChrystal?

Posted by: Lomillialor | June 22, 2010 9:01 AM | Report abuse

kevin

It's not whether risk is allowed. It's whether too much risk is allowed. Duh.

Posted by: Lomillialor | June 22, 2010 9:03 AM | Report abuse

--"I don't see a system in which healthcare is not rationed, or one in which that rationing is not unfair to somebody."--

Price rationing is not like the other two examples you name. One can almost always work around price rationing, but third party rationing is arbitrary and final, and promotes real shortages, which no one can work around.

The conflation of "price rationing", which is a function of the market, with third party rationing, which is imposed on a market, has been the long work of malign propagandists like Klein. They are not equivalent, and the outcomes under each will vary quite considerably. Once government rationing starts, it's all downhill, amidst the stupid fingerpointing of politicians and the added propaganda from Klein.

Posted by: msoja | June 22, 2010 9:04 AM | Report abuse

"The three main changes under consideration would be a carve-out to exclude asset management and insurance companies outright, an exemption that would allow banks to continue to invest in hedge funds and private equity firms, and a long delay that would give banks up to seven years to enact the changes."

No, no and no. Banks did not get to write the rules during the Great Depression, and after the 1929 stock market crash. There was a reason for that.

They don't get to write the rules now. They had their chance to play nice, and instead blew up the playground and burned down the swingset. They don't get to decide how best to fix things.

Posted by: Kevin_Willis | June 22, 2010 9:04 AM | Report abuse

--"expected to save merchants billions of dollars"--

More propaganda from Klein. What's the other side of the equation? One does not impose a constraint on a market, and not get more than one output difference. If merchants save, someone else is going to not save. That someone else will have to raise prices or cut output. Of course, the government has exempted itself from the regulations it is intent on imposing on others, which might give a hint to some.

It's more rot that will have unintended consequences, which propagandists like Klein will then whine about in calling for more government control.

Posted by: msoja | June 22, 2010 9:08 AM | Report abuse

@msoja: "One can almost always work around price rationing, but third party rationing is arbitrary and final, and promotes real shortages, which no one can work around."

Granted. Arguably, an open market can still support price rationing. For example, for all the complaints about the availability of care, you can still pay for cash for almost any medical care conceivable, and enjoy a discount for the service because you are paying in cash. So that's not likely to go away. Although there are those who would prefer that patients (except for the super-rich kind, like politicians) all be forced into the same government run system.

"They are not equivalent, and the outcomes under each will vary quite considerably"

This is true, but rationing happens in every outcome. There is no such thing as unrationed healthcare (or unrationed anything) as there is a finite supply of all goods and services (and money and time). So complaining about how one system creates "healthcare rationing" at best is ambiguous, and worst intentionally disingenuous. Rather, the argument should be one of "Do you want you, and your own hard work, to decide what kind of healthcare you get? Or do you want a government bureaucrat to do that for you?"

For some people, the answer is going to be the latter. Thus, I see an argument for a combination of catastrophic care insurance and healthcare savings accounts. Rather than "this will lead to rationing". Because everything leads to rationing.

BTW, Klein is a dude with an opinion, not a propagandist. I don't think the hyperbole helps the discussion.

Posted by: Kevin_Willis | June 22, 2010 9:11 AM | Report abuse

@Lom:

"It's not whether risk is allowed. It's whether too much risk is allowed. Duh."

That's not how it was expressed. So I addressed what was actually said. Duh.

If they meant what you think they meant, rather than what they said, they need to work on how they choose to express their position. Which was kind of my point.

Posted by: Kevin_Willis | June 22, 2010 9:13 AM | Report abuse

--"there is a finite supply of all goods and services"--

Poppycock. "We'll make more." Ever heard that? If you want to buy more, they'll make more. Under government rationing, no effort (except bribes, maybe, or political connections) will get you the product or service you desire.

Posted by: msoja | June 22, 2010 9:26 AM | Report abuse

--"BTW, Klein is a dude with an opinion, not a propagandist. I don't think the hyperbole helps the discussion."--

Klein is a dude with a decidedly dishonest opinion. He consistently presents a one sided view, and it invariably follows the government line. No, he *is* a propagandist. He has an agenda, and he pushes it, and every push he makes involves a loss of freedom for his fellow citizens. I wouldn't be him for all the money in the world.

And screw the hyperbole. These people are *wrecking* this country. Do you understand? With what they are doing, hyperbole is the least problem that anyone will ever remember.

Posted by: msoja | June 22, 2010 9:31 AM | Report abuse

kevin

While you are "technically" accurate, the entire context and the widespread public debate on the issue of BP's excessive risks should lead followers of Ezra's blog to realize he most certainly meant "too much risk". When I read his comment above, I had no doubt that is what he was talking about. You wrote a lengthy diatribe simply because he left out a tiny qualifier. You could have simply asked "Ezra, didn't you mean "too much risk?"

Nevertheless, I will give you your due and say that not everyone understands that "some risk" is necessary in many endeavors, including oil drilling, so pointing that is is appropriate, even if you failed to understand that someone like Ezra already knows that.

Posted by: Lomillialor | June 22, 2010 9:39 AM | Report abuse

msoja

Rich white Republicans wrecked the country.

Not gays, not hispanics, not liberals, not wonks like Ezra.

Get over it.

You neocons hate people like Ezra because he so easily exposes the logical and factual falsehoods in your cultural-based, pro-greed ideology.

Posted by: Lomillialor | June 22, 2010 9:47 AM | Report abuse

How does one "throw a dent"?

Posted by: loganjt24 | June 22, 2010 9:55 AM | Report abuse

--"Rich white Republicans wrecked the country."--

You're not biased, are you?

The GOP is inarguably complicit in the creation of the mess in in Washington, but the Dems have always been behind the push to bigger and more government, and that's what's killing the country, now. Were Fannie and Freddie the creations of rich, white, Republicans? Were Medicare and Medicaid? Was Social Security?

And never mind that some of the largest corporations you would no doubt find fault with, like BP and Countrywide, were and are in bed with Demcocrats, and your "Rich white Republicans" begins to look like the blatherings of someone who has never taken the time to actually think about things.

Posted by: msoja | June 22, 2010 10:07 AM | Report abuse

Barney Frank is leading to charge to protect favored lenders from the consumer protection agency? Why, is that because autodealers have my best interests at heart, but Bank of America is out to rob me blind? What a joke.

Posted by: justin84 | June 22, 2010 10:22 AM | Report abuse

msoja

Big gvmt is not the problem. Corrupt gvmt is the problem.

The GOP alone created virtually all of our debt.

The GOP caused this oil spill by corrupting gvmt and slashing regulations.

Bush and enron bankrupted western states in 2001 by stealing their surplusses because of inflated and fraudulent energy prices.

The GOP caused this recession with huge tax cuts, huge spending increases, invading the wrong country and sabotaging energy prices in the process.

Fannie and Freddie did not cause the recession or the housing bubble or its crash. If you read noted authors other than drudge or beck you'd realize that.

Medicare and SS are beloved programs. Few people want them gutted or ended. If we stopped doubling the defense budget and stopped war mongering and stopped cutting taxes for the wealthy those programs would be sound.

And yes, I'd gladly revise one statement of mine -> Rich white Republicans and ConservaDems wrecked this country.

That means ALL Republicans and about 1/3 of Democrats wrecked this country.

Go look at the Nafta vote as one example. BushSr wrote and negotiated Nafta, Clinton (ConservaDem) ratified it with the help of unified GOP votes despite the majority of Democratic votes against it.

Gays, liberals, hispanics never had power in the USA. Reagan's voodoo economic policies, spending habits, tax cutting mantras, globalization (downsizing) policies, oil refinery closing policies, anti-labor anti-gvmt-regulation policies have dominated this country.

Posted by: Lomillialor | June 22, 2010 10:52 AM | Report abuse

Blackalicious is awesome. I sure wish they'd release a new album. Gab's solo album was good, but not as good as "The Craft" and nowhere in the ballpark of "Blazing Arrow".

Posted by: MosBen | June 22, 2010 10:58 AM | Report abuse

--"Big gvmt is not the problem. Corrupt gvmt is the problem."--

You can't have the former without the latter. That's just one of the reasons why one doesn't want the former.

Posted by: msoja | June 22, 2010 11:19 AM | Report abuse

@Lom: "While you are 'technically' accurate, the entire context and the widespread public debate on the issue of BP's excessive risks should lead followers of Ezra's blog to realize he most certainly meant 'too much risk'."

Actually, it was David Fahrenthold and Ylan Mui who wrote that quote, not Ezra. And I am not familiar enough with their work to assume they mean other things they did not explicitly say. But your interpretation that invest their words with meaning that they could have themselves provided, with just the slightest effort at additional clarity, certainly makes more sense.

But I was not in any way faulting Ezra, who was simply quoting the authors.

Perhaps I'm just picking nits.

Posted by: Kevin_Willis | June 22, 2010 11:37 AM | Report abuse

@Lom: "Big gvmt is not the problem. Corrupt gvmt is the problem."

Power corrupts, and absolute power corrupts absolutely. Thus, big gummint is the unavoidable problem. But Republicans don't want to make the government any smaller. So they're no help.

Posted by: Kevin_Willis | June 22, 2010 12:18 PM | Report abuse

We'd have the same problems today even with a small government.

The greatest influence of corruption in gvmt is money from big business.

If we could have true public financing of all elections we'd have far less problems now.

Anyone who blames all our problems on just gvmt or just big business is only rowing with one oar in the water.

Posted by: Lomillialor | June 22, 2010 2:03 PM | Report abuse

Mortgage Loan Modification is the only solution to save your home and stop foreclosure. Some 650,000 troubled borrowers have been put into trial loan modifications under the president's foreclosure rescue plan, the Treasury Department said Tuesday. That number represents only 20% of eligible homeowners. Mortgage Home Modification Program is the solution to save your house and stop foreclosure process Use this free tool to see if you qualify for loan modification http://bit.ly/b8C0iS

Posted by: campjoh | June 24, 2010 1:32 AM | Report abuse

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