Wonkbook: Climate bill dead; Obama signs unemployment bill; Geithner vs tax cuts
Harry Reid has officially given up on plans to pass a climate bill through the Senate before the August recess. Which means it's hard to imagine a climate bill passing at all during the remainder of this congressional session. It's also hard to imagine one passing next session.
Meanwhile, Barack Obama signed into law an unemployment insurance extension over a month after benefits initially expired; Tim Geithner has come out against extending Bush tax cuts that apply to high earners; and the Congressional Budget Office scored a new version of the public option and found it would save the government more than $50 billion and consumers about five to seven percent in premiums.
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The Senate Democratic leadership has given up hope on passing a climate bill before the August recess, reports Perry Bacon: "Instead, Democrats will push for a more limited measure that would seek to increase liability costs that oil companies would pay following spills such as the one in the Gulf of Mexico. It also would create additional incentives for the development of natural gas vehicles and would provide rebates for products that reduce home energy use. Senate Democrats said they expected to find GOP support for the bill and pass it in the next two weeks."
Parties involved are already debating who killed the climate bill, reports Darren Samuelsohn: "One exasperated administration official on Thursday lambasted the environmentalists - led by the Environmental Defense Fund - for failing to effectively lobby GOP senators. 'They didn’t deliver a single Republican,' the official told POLITICO. 'They spent like $100 million and they weren’t able to get a single Republican convert on the bill.'
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Obama has signed a six-month extension of unemployment benefits into law, reports Lori Montgomery: "The jobless bill revives a program that provides up to 99 weeks of income support to those who have lost their jobs in the recession. Advocates for the unemployed said checks in some states are likely to go out quickly; in others, people can expect a delay of several weeks."
Tim Geithner does not want to see Bush tax cuts on high earners extended, reports Lori Montgomery: "Geithner's comments come as a small but vocal group of Democratic lawmakers has begun to argue that the feeble economic recovery suggests that no taxes should be raised right now -- not even taxes on the approximately 3 million high earners who have been frequent Democratic targets. In the past few years, Democrats have offered a flurry of plans to raise taxes on that group, and they followed through in the recent health-care overhaul."
CBO looks at another public plan proposal: "CBO estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges...roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan...CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion.
Live indie interlude: Best Coast, Kid Cudi, and Rostam Batmanglij play "All Summer".
Still to come: How FinReg passed; Salazar promises to end the Interior Department's revolving door with industry; health insurance plans are increasing premiums and hoarding cash; and a montage of dogs eating ice cream.
Renae Merle profiles the Obama administration lieutenants who made FinReg possible: "Geithner and Lawrence H. Summers, Obama's top economic counselor, brought Wolin, Barr and Farrell together. They are an Ivy League trio known for their wonky discussions of the details of complicated legislation. Wolin and Barr both worked at the Treasury Department during the Clinton administration, while Farrell had been head of the McKinsey Global Institute, the economics research department of the consulting firm McKinsey & Co...The trio sometimes were reluctant to make necessary compromises and had to be prodded by legislative allies to do so, congressional aides and industry lobbyists said."
Workers whose unemployment insurance was cut off are now eligible for retroactive lump sum payments: http://bit.ly/bJs86S
The Fed is now stuck with over $1 trillion in unwanted securities, reports Binyamin Appelbaum: "While officials and economists generally regard the program as successful in supporting the housing market, it has left the Fed holding a vast pile of mortgage securities -- basically i.o.u.’s from homeowners -- that it does not want and cannot sell. Holding the securities could cost the Fed a lot of money and hamper its ability to fight inflation, while selling the securities could drain needed money from the still-weak economy."
The end of the housing tax credit contributed to another drop in home sales: http://bit.ly/aGOwk0
Bailed-out firms received $1.6 billion in excessive compensation, reports Jia Lynn Yang: "Kenneth Feinberg, who was appointed as the Obama administration's special master for compensation, will single out 17 companies for egregious payment practices, according to sources familiar with the findings who spoke on condition of anonymity because the report had not yet been released. Out of these companies, 11 have paid back the assistance received from taxpayers."
Ben Bernanke warned against lowering interest rates on excess bank reserves: http://bit.ly/bkB0PB
Paul Krugman thinks GOP defenses of Bush-era economic policy fall flat: "The actual record of the Bush years was (i) two and half years of declining employment, followed by (ii) four and a half years of modest job growth, at a pace significantly below the eight-year average under Bill Clinton, followed by (iii) a year of economic catastrophe. In 2007, at the height of the 'Bush boom,' such as it was, median household income, adjusted for inflation, was still lower than it had been in 2000."
Capitalism only works under a culture of trust, writes Tim Harford: http://bit.ly/2jBnGI
Sketch art interlude: Portraits done in one minute.
Health insurers are raising premiums despite high surpluses, reports N.C. Aizenman: "The report released Thursday by Consumers Union, the nonprofit publisher of Consumer Reports, found that seven of 10 Blue Cross Blue Shield affiliates examined had amassed surpluses more than three times the level regulators deemed necessary for them to remain solvent. For instance at the close of 2009, Blue Cross Blue Shield of Arizona had a surplus of $717 billion, more than seven times the regulatory minimum. The same year the company raised premiums for its individual market customers between 8.8 percent and 18.4 percent."
Chuck Schumer has released a revised DISCLOSE Act in the Senate: http://politi.co/9Vvv3F
The federal judge in the Department of Justice's lawsuit against Arizona is giving mixed signals, reports Josh Gerstein: "She questioned Arizona’s lawyer about whether those parts of the law could pass Constitutional muster, and wondered whether allowing it to be implemented would 'result in the arrest of tens of thousands of people' and their indefinite detention while awaiting the results of federal immigration checks. But Bolton, who was appointed by President Bill Clinton, was also skeptical of one of the federal government’s key claims: that the overall thrust of the state law would usurp federal authority to set nationwide immigration policies."
A new metric finds US households suffering from record economic insecurity: http://bit.ly/bDQKi4
Immigration reform is a matter of life and death, writes Eduardo Schumacher-Matos: "Guess how many migrants, mostly Mexicans searching for work, died crossing illegally into America? The Border Patrol collected 422 in the last fiscal year, part of a rising trend. And most die in the desert. Here is how Luis Alberto Urrea, in his book, 'The Devil's Highway,' described what happens: 'Dehydration had reduced all your inner streams to sluggish mudholes...Your sweat runs out...Your temperature redlines -- you hit 105, 106, 108 degrees...Your muscles, lacking water, feed on themselves. They break down and start to rot...The system closes down in a series. Your kidney, your bladder, your heart.'"
Steve Pearlstein argues Virginia's anti-federal attitude is hurting schools: "Evaluators found that a majority of Virginia's school districts were hostile to charter schools and deficient in the way they evaluated teachers and principals and dealt with chronically underperforming schools. Yet even before the second round, Gov. Bob McDonnell (R) announced that Virginia would drop out of the competition, citing his opposition to national proficiency standards that would be less rigorous than what the state was already using. That was a curious claim, given that, at the time, the final standards had not yet been released."
"Negative studies" provide a path to health care savings, writes Harlan Krumholz: "Rather than a letdown, the failure to find an advantage in an expensive strategy opens the door to doing less and spending less without worsening patient care -- and in some cases improving it. It's simply the case that many popular medical strategies have little or no rigorous scientific evidence of their effectiveness regarding patient outcomes."
Adorable animals being adorable interlude: Dogs eating ice cream.
Secretary Ken Salazar promised Congress he would crack down on the Interior Department's revolving door with business, reports Kimberly Kindy: "His statement came after Rep. Jackie Speier (D-Calif.) asked about a Washington Post article that reported that dozens of former Interior officials had crossed over into the oil industry and that three out of four industry lobbyists had once worked for the federal government. The rate is more than double the norm in Washington, where industries recruit about 30 percent of their lobbyists from the government, according to data from the nonpartisan Center for Responsive Politics."
Ships working on the oil spill in the Gulf are leaving as a tropical storm arrives: http://bit.ly/cEjUhz
The oil spill investigation hearings Thursday focused on human error, reports David Hilzenrath: "The morning's main witness was John Guide, a BP well team leader who oversaw drilling on the Macondo well from BP offices onshore. Guide was asked about an April 18 report -- two days before the disaster -- from contractor Halliburton concluding that the well had a potentially severe gas flow problem. 'I didn't even know that that particular piece was in there,' Guide said, adding that he never looked at that section of such reports."
The oil spill is reducing Gulf tourism earnings by billions: http://politi.co/aE1hxE
Brad Plumer argues natural gas may work better as an electricity source than a transportation fuel: "A better use for America's vast shale-gas reserves may be to displace coal in the electricity sector. A recent MIT report on "The Future of Natural Gas" found that electric utilities could cut their carbon emissions 22 percent simply by switching from coal to natural gas--and that's with no additional capital investments. And that would be on top of any additional wind turbines that got built. And what about transportation? There's a good argument that electric vehicles are a better investment in the long term."
David Roberts argues that action in Congress on climate change is still possible without a climate bill: http://bit.ly/91AdYO
Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard. Photo credits: Pete Souza/White House.
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