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Wonkbook: Basel III moving; Filibuster under attack; DISCLOSE falling short

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International negotiators have agreed on broad principles for the Basel III banking regulation accord; the Senate version of the DISCLOSE Act is still a few votes short of passage; the House is packing its schedule until the August recess with bills addressing unemployment and the economy; some senators are beginning to talk seriously about filibuster reform; and Atul Gawande thinks we all need to talk seriously about end-of-life care.

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Negotiators have settled on a rough outline for Basel III's international finance regulations, reports Howard Schneider: "The panel agreed, for example, to allow a larger variety of assets to be counted as the highest-quality capital, which will make it easier for some European firms to meet new capital requirements. It also agreed that large, highly connected companies -- those considered 'too big to fail' -- be subject to capital surcharges and other provisions so they are better protected in the event of a downturn. Some of the group's more controversial ideas -- such as forcing some banks to rely more on long-term sources of funding or adhere to new limits on lending -- remain in the plan but will be implemented during a transition period of as long as seven years."

Brooking's Douglas Elliott guides you through the Basel III process: http://bit.ly/cUUWMM

The DISCLOSE Act lacks the votes to beat a filibuster before the August recess, reports Meredith Shiner: "Schumer, the Senate’s No. 3 Democrat, would not say definitively Monday whether leadership had corralled every Democratic vote -- Ben Nelson of Nebraska, for example, broke with his party in 2002 to vote against the McCain-Feingold campaign reform bill. His office did not respond to requests Monday about how the senator, who also has voted against his party on recent unemployment benefit packages, intends to vote Tuesday. Sen. Susan Collins of Maine may have delivered a fatal blow to the bill Monday, announcing that she would not support cloture, which would break a filibuster."

More Democratic senators are thinking seriously about reforming the filibuster, report Ryan Grim and Sam Stein: "Momentum is building to reform Senate rules that allow silent filibusters and force a 60-vote requirement for virtually any action, interviews with Democratic candidates and sitting senators indicate. Democratic candidates said that they hear regularly from voters about abuse of the parliamentary tactic, which is likely to come up as the first vote new senators face in 2011. The supermajority requirement in the Senate has become such an obstacle to reform that it infiltrates policy discussions at every step."

Neil Irwin explains why Ben Bernanke isn't push for more fiscal stimulus: http://bit.ly/asW6fW

The House is taking up measures to bolster manufacturing before the August recess, reports Jared Allen: "Last week, Democratic leaders announced plans to move forward on a new 'Make it in America' agenda, which, as of now, is an undefined mix of bills designed to bolster the crumbling manufacturing sector through various tax incentives, trade policy tweaks and direct investments. A Democratic leadership aide said on Friday afternoon that a final floor schedule had not been set, but noted leaders have planned on bringing as many as three 'Make it in America' items up for votes -- albeit on the suspension calendar, which would help the legislation bypass the committee process."

Atul Gawande looks at end-of-life care: "People have concerns besides simply prolonging their lives. Surveys of patients with terminal illness find that their top priorities include, in addition to avoiding suffering, being with family, having the touch of others, being mentally aware, and not becoming a burden to others. Our system of technological medical care has utterly failed to meet these needs, and the cost of this failure is measured in far more than dollars. The hard question we face, then, is not how we can afford this system’s expense. It is how we can build a health-care system that will actually help dying patients achieve what’s most important to them at the end of their lives."

New indie interlude: Tennis plays "Baltimore".

Still to come: The IMF says the yuan remains undervalued; BP's new CEO faces a tough road ahead; Donald Berwick faces a skeptical Senate; and a bear steals a car.

Economy/FinReg

The IMF says the yuan is still undervalued, report Bob Davis and Aaron Back: "The IMF determination is bound to put pressure on Beijing to let the currency appreciate more than the 0.7% it has risen since China loosened the yuan's peg to the dollar on June 19. The IMF determination was backed by the U.S., Germany, France, the United Kingdom, among others, say two individuals familiar with the deliberations, as the IMF's executive board debated the China report on Monday, though none of the countries pushed China to boost its currency quickly."

Housing supply is expected to stay high even as sales fall: http://bit.ly/ds4gd3

Academics are starting to evaluate the stimulus' impact, reports Jon Hilsenrath: "Robert Hall, a Stanford University professor, says there hasn't actually been that much extra government spending overall, because the increased federal spending has been largely offset by a large contraction in state and local government outlays. By the third quarter of 2009, he notes, federal government spending added $66 billion to economic output, less than 0.5% of total output, offset by a $43.1 billion contraction in state and local government spending, he says. A study of 91 fiscal stimulus programs in 21 developed economies between 1970 and 2007 by Harvard's Alberto Alesina found tax cuts were more stimulative than government spending."

The fight over an Elizabeth Warren appointment is breaking down on party lines, reports Binyamin Appelbaum: http://nyti.ms/babL9x

Elizabeth Warren; blogger: http://bit.ly/b5AlsH

Businesses are finding profits despite deep cuts, reports Nelson Schwartz: "'Because of high unemployment, management is using its leverage to get more hours out of workers,' said Robert C. Pozen, a senior lecturer at Harvard Business School and the former president of Fidelity Investments. 'What’s worrisome is that American business has gotten used to being a lot leaner, and it could take a while before they start hiring again.'"

"Systematic risk" theory is gaining ground in economics, reports Howard Schneider: "The phenomenon is not fully understood. 'We sort of know vaguely what systemic risk is and what factors might relate to it. But to argue that it is a well-developed science at this point is overstating the fact,' said Raghuram Rajan, a former International Monetary Fund chief economist and author of 'Fault Lines,' which explored the role of U.S. real estate and credit bubbles in the crisis. A recent IMF paper described study of the field as 'in its infancy.'"

Andrew Ross Sorkin argues AIG was not bailed out to help Goldman Sachs: "Documents released by the Senate Finance Committee late Friday suggested Goldman was trying to brace for that potential loss. It now appears that Goldman had hedged itself against such a potential loss by buying $1.7 billion in insurance on A.I.G. from more than 30 different banks, and made other bets against A.I.G. worth more than $600 million. Whether it would have all paid off remains an unanswered question."

The stimulus' TANF Emergency Fund is running out of funds, writes LaDonna Pavetti: http://bit.ly/cvV4SA

Bob Herbert explains Jacob Hacker's new Economic Security Index: "They created an economic security index, which measures the percentage of Americans who experience a decrease in their household income of 25 percent or more in one year without having the financial resources to offset that loss. (Major medical expenses were counted as a decrease in available income.) The team’s findings were grim. Simply stated, more and more families are facing utter economic devastation: completely out of money, with their jobs, savings and retirement funds gone, and nowhere to turn for the next dollar."

Sixties flashback interlude: Every cigarette smoked on Mad Men.

Energy

New BP CEO Robert Dudley arrives with a long to-do list, report Guy Chazan and Monica Langley: "Mr. Dudley is expected to call White House chief of staff Rahm Emanuel, White House energy and climate adviser Carol Browner and cabinet secretaries to assure them that he is 'not abandoning the Gulf,' said one person familiar with the matter. 'He will reinforce [the point] that the Gulf is more front and center' for BP now that he is taking over as CEO, the person said."

Fuel-producing algae research is picking up: http://nyti.ms/aRhtz3

Solar power is now cheaper than nuclear, reports Diana Powers: "Solar photovoltaic systems have long been painted as a clean way to generate electricity, but expensive compared with other alternatives to oil, like nuclear power. No longer. In a 'historic crossover,' the costs of solar photovoltaic systems have declined to the point where they are lower than the rising projected costs of new nuclear plants, according to a paper published this month."

GOP Sen. Sam Brownback will support a renewable energy standard in the Senate energy bill: http://bit.ly/bVrf7L

House Democrats from the Rust Belt feel betrayed over cap and trade, report Paul Kane and Shailagh Murray: "The White House and House Speaker Nancy Pelosi (D-Calif.) had assured reluctant members that the Senate would take up the measure. Although Senate passage wasn't a sure thing, House Democrats hoped to go back home to voters with a great story to tell -- about reducing dependence on foreign oil, slowing climate change and creating jobs. That didn't happen."

David Roberts offers a climate bill post-mortem: http://bit.ly/9lNmm8

Adorable animals committing felonies interlude: A bear steals a family's car.

Domestic Policy

Medicare/Medicare chief Donald Berwick will offer a detailed defense of his record to the Senate, reports Robert Pear: "The White House declined to make him available for an interview. But friends and allies said he was preparing a point-by-point rebuttal, most likely to be delivered when he first testifies before Congress. He wants to focus on the work of his agency, which finances health care for one in three Americans and has a budget bigger than the Pentagon’s...His supporters worry that he will be a lame duck because agency employees and health care interest groups know he may be gone in 18 months."

A new Brookings reports says urban areas need an export boom, reports Sudeep Reddy: "It concludes that the federal government needs to push harder on negotiations around exchange rates, trade agreements and enforcement of existing trade laws. But it also offers recommendations specific to local and regional concerns: 1) Federal and state governments should give metro areas support on export promotion, innovation through research and development, freight planning and data-collection policies. 2) Metro leaders must improve their exporting abilities and learn from the few metro areas that actually developed and implemented successful export strategies."

Nancy Folbre argues for increased home care aid as a stimulus measure: http://nyti.ms/c80gLY

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: Larry Downing-Reuters

By Ezra Klein  |  July 27, 2010; 6:37 AM ET
Categories:  Wonkbook  
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Next: Gridlock I can get behind

Comments

I watched the first three seasons of Mad Men, and I just don't get why it's so popular. It annoys me when people say that "nothing happens" when what they really mean is that a show develops slowly or in an understated way. Still, there are multiple episodes where no plots are furthered and we don't really learn much or anything about any of the characters. Most of the cast doesn't have their own plots or character arcs; they just show up to have conversations. Sometimes the conversations are interesting, sometimes not, but the end result is that I don't care about any of them. Yes, it's an amazing recreation of the 60s, but that can't be enough to hold a viewer's attention for years on end, can it? Personally, it's just made me glad I didn't live in the 60s because people were jerks.

On the other hand, that intro credits sequence is all kinds of rad.

Posted by: MosBen | July 27, 2010 8:14 AM | Report abuse

The Jon Hilsenrath report cited above ("Course of Economy Hinges on Fight Over Stimulus", Wall St Journal, 26-Jul-2010) is excellent. The report references the work of Valerie Ramey (U California at SD, "We just don't have enough evidence to prove that [stimulus based on other-than-tax-cuts] good.", Robert Barro (Harvard U, "A government dollar spent creates about 80 cents worth of growth, or possibly less"), David Romer and wife (who is now economic adviser to the Obama/Pelosi Regime, stated that tax cuts "have very large and persistent positive output effects"), and Carmen Reinhart (U Maryland, "more stimulus could be counterproductive because it could lead the public to expect even higher taxes in the future") before concluding with the acknowledgment that there is little public confidence in the worth of stimulus which does not cut future tax rates.

Why can't Congress understand the importance of reducing both the size of the federal government and the size of federal debt looming over American taxpayers? The gluttonous federal sloth, like any other morbidly obese and pathetically lethargic invalid, would benefit from both diet and exercise: the federal belly should be reduced by spending cuts, tax cuts, and all other means necessary while the heart-health of the nation is simultaneously improved by judicious exercise of federal power, elimination of invasive federal regulations, and renewed direct citizen involvement at all levels of federal activity.

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Posted by: shanchuhuiyi | July 27, 2010 9:10 AM | Report abuse

"Yes, it's an amazing recreation of the 60s, but that can't be enough to hold a viewer's attention"

just another opinion here, i dont think it is an amazing recreation of the sixties. and in an era of videos, why does anyone need an approximated recreation of the forties, fifties or sixties....clothes and furniture scoured out of thrift shops by costume designers, when there are video archives that hold all of the genuine articles?
the filmwork of that time period of natalie wood, elizabeth taylor, from "butterfield 8," to "virginia woolf," the old doris day /rock hudson/cary grant movies,"the best of everything," "raisin in the sun," "the honeymooners," "mary tyler moore," "i love lucy," "imitation of life," "nothing but a man," the film work in the fifties of kirk douglas and gregory peck....all of the work of bette davis in a constant cloud of cigarette smoke....every film character on turner classics leaves their office or the bedroom, and pours themselves a drink.
i dont understand why people would watch "madmen," when the amazing works from that time period, many of which explore the repressive social aspects, the wonderful sense of glamour of that time, and "actual" living sets of manhattan and los angeles landscapes, exist in their authenticity and purity, as eternal timepieces.

Posted by: jkaren | July 27, 2010 9:10 AM | Report abuse

If you want to cut the size of government and the amount of debt you'll need to do more than cutting taxes. Find 60 Senators, and the voter base required to elect them, willing to cut the spending needed to offset your tax cuts and we'll talk. Right now I suspect you couldn't find 20 Senators willing to do that.

Posted by: MosBen | July 27, 2010 9:12 AM | Report abuse

great article by Atul Gawande that I haven't even finished yet. Easier when the person has lived a full life at age 80 but much harder when the patient is a 34 year old new mother. Even harder or impossible for a child. The big issue comes not from the patients themselves but the relatives of the patients that don't want to let them go. I would expect if the final say was in the hands of the patients a lot more advance directives would be finalized and put in place. Easy to say here in this setting, very hard to actually do.

Posted by: visionbrkr | July 27, 2010 9:39 AM | Report abuse

why does Atul have to bum me out like that? Magnificent article though...

Posted by: ThomasEN | July 27, 2010 11:48 AM | Report abuse

@rmgregory: All well and good but

1. I didn't hear conservatives advocating all of these deeply unpopular programs when they controlled the govt. What is currently exploding the deficit? 2 rounds of unpaid for tax cuts, medicare d, and 2 profoundly mismanaged invasions, 1 that the US was lied into. This all happened when the "fiscal conservatives" were in charge. But as Hatch said "We didn't pay for a lot of things back then." Where is the accountability for this kind of fiscal malfeasance?
2. Leaving Social security out of the picture since it has its own funding stream and small changes in the program (raising the income cap, etc.) will make is solvent for the future, where are these cuts going to come from. Cutting ALL non-defense discretionary spending is only about 600 billion. that doesn't even close the current budget deficit. Where should the rest of the money to close the deficit come from?

"Non-security spending was $553 billion. The largest departments were: Health and Human Services ($84 billion), Transportation ($76 billion), Education ($46.8 billion), Housing and Urban Development ($43.6 billion) and Agriculture ($25 billion). (Source: OMB)"

Posted by: srw3 | July 27, 2010 12:14 PM | Report abuse

Well, nice to see that David Roberts is still a moron.

Lists five points, three of which are the same (Senate), none of which was the real reason the bill failed.

Could we stop whining about the Senate? Sure, the Senate could change its rules to preclude filibuster, and pass a mediocre climate bill in 2011. Then on January 21, 2013, the Senate will have no problem passing legislation revoking financial reform, healthcare reform, and climate legislation in one easy session with 51 votes. Yay! I too agree that our current issue of an excess of policy certainty is a problem that needs to be dealt with head on.

The climate bill failed because of the oil spill. They had the votes on bipartisan versions before that. Waiting until this summer made sense; rising gas prices (which usually spike in early summer; they didn't this year) would have given energy reform broad public support. For financial reform, on the other hand, they had to strike while the iron was hot. And for the whole "climate change is objectively more important than healthcare reform"? Really? Americans die every day for lack of access to quality care.

Posted by: eggnogfool | July 27, 2010 12:55 PM | Report abuse

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