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Wonkbook: Jobless benefits to pass; BP seeks new cap method; Warren for CFPB?

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The Senate is finally set to approve an extension of unemployment benefits over a month after they initially expired. But there's somewhat less to this than meets the eye: Though unemployment is still near 10 percent, the extension won't include the $25-a-week supplement that began with the stimulus, it won't create an unemployment tier for people who've been out of work for more than 99 weeks, and the bill doesn't include any of the state and local relief measures -- like Medicaid funding and aid to keep teachers on the job -- that were initially envisioned. In other words, the goalposts have moved: Democrats will celebrate getting one more extension of unemployment benefits, but that's a lot less than they originally hoped to get, and the retrenchment shows that the space for stimulus spending is rapidly narrowing to almost nothing even as high unemployment persists.

Meanwhile, problems with BP's new oil well cap are leading it to seek new methods of stopping the leak; Harvard law professor and Congressional TARP watchdog Elizabeth Warren is under consideration to head the Consumer Financial Protection Bureau she initially proposed; John Kerry is trying to broker another deal on energy; and don't you want to know how to game 'The Price is Right'?

Welcome to Wonkbook.

Top Stories

An unemployment benefit extension finally has the votes to pass the Senate, report Naftali Bendavid and Greg Hitt: "Sens. Olympia Snowe and Susan Collins, both Maine Republicans, are expected to support the measure, after Democrats agreed to drop unrelated items and trim the bill to $34 billion. Democrats had originally introduced a $120 billion bill that included such items as aid to cash-strapped states. The Maine Republicans would join 58 of the Senate's 59 Democrats and Democratic-leaning independents in backing the bill...Sen. Ben Nelson (D., Neb.) is opposing the legislation."

But it's not a very generous extension, writes Annie Lowrey. "The bill does not include an extension of the $25-a-week Federal Additional Compensation funds, tacked onto many unemployment checks. It also does not include any of the other provisions originally included in or proposed for the jobs bill or extenders package: It does not close tax loopholes, or provide Medicaid funding to states, or include funds to keep teachers and other state employees working. It also does not create an additional fifth tier of benefits; federal extensions only continue in states with higher than an 8 percent unemployment rate, and the maximum weeks of state and federal benefits remains ninety-nine."

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BP is considering a new oil stoppage method after inconclusive pressure tests on its well cap, report Ben Casselman, Susan Daker, and Angel Gonzalez: "Pressure tests have been inconclusive, but BP says the reservoir has depleted to the point where the company could use a new method of closing off the well by pumping heavy drilling fluid into the top--an operation similar to the 'top kill' procedure that failed in May. If successful, the procedure could kill the well permanently more quickly than the relief wells that BP is drilling, which have long been seen as the only permanent solution to what is now one of the worst-ever environmental disasters in the U.S."

Elizabeth Warren is on the shortlist to head the Consumer Financial Protection Bureau she helped create, reports Brady Dennis: "Warren, who chairs the congressional panel overseeing the federal bailout of the nation's banks, isn't the only candidate for the powerful post. Others include Michael S. Barr, an assistant Treasury secretary, and Eugene Kimmelman, a deputy assistant attorney general in the Justice Department's Antitrust Division. But she is easily the best-known and the most polarizing...'While there are a number of strong choices under consideration for this position, Elizabeth Warren is a champion for consumers and middle-class families, and we are confident she is confirmable,' White House spokeswoman Jen Psaki said."

Neil Irwin explains why some worry Warren doesn't have the managerial and bureaucratic chops for the position: http://bit.ly/8ZBT90

Live indie interlude: TV on the Radio plays "Poppy".

Still to come: John Kerry is holding closed-door meetings to craft a climate bill; local opposition to stimulus is fierce; evangelicals are joining the fight for immigration reform; and Quentin Tarantino directs the Super Mario Brothers.

Energy

John Kerry is leading more talks with utility and environmental groups to agree on an energy bill, reports Darren Samuelsohn: "Edison Electric Institute President Tom Kuhn, Environmental Defense Fund President Fred Krupp and David Hawkins, head of the Natural Resources Defense Council’s climate center, huddled for about an hour in the Massachusetts Democrat’s Senate office...Majority Leader Harry Reid still holds the reins on the climate and energy package, with plans to begin Senate floor debate next week."

Brad Plumer assesses whether an energy bill that doesn't have cap-and-trade might still be an energy bill worth doing: http://bit.ly/bolj5j

China has passed the US as the world's top energy consumer: http://bit.ly/bYBnY9

The chief engineer of the Deepwater Horizon rig resisted the oil spill panel's attempts at questioning, report Steve Mufson and David Hilzenrath: "In that statement, which has not been made public, Stephen Bertone said that the captain of the rig screamed at a crew member for pressing either a distress button or a disconnect button and, referring to an injured man on a stretcher, said, 'Leave him.' But at Monday's session of the joint U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement, Bertone said, 'I honestly don't feel anything in that statement needs to be changed,' and his attorney, Stephen D. London, resisted efforts to get him to describe the scene anew."

The White House is reformulating its ocean policy: http://bit.ly/ckjnQt

House Democrats are set to finalize oil spill response legislation, reports Ben Geman: "Less clear is the path forward for a much broader -- and bitterly contested -- bill that the Natural Resources Committee approved with no GOP votes Thursday. Two Democrats on the committee voted against the plan, which passed 27-21. That bill would overhaul Interior Department oversight, require many new safeguards, impose new fees on oil and natural gas production and end some royalty waivers for offshore producers, among many other measures. It also contains a provision dubbed 'use it or lose it' that empowers Interior to yank leases from companies that are not taking 'diligent' steps to develop them."

Bob Herbert thinks nuclear power is not ready yet: "The problem is that while the most terrible accidents are blessedly rare, when they do occur the consequences are horrific, as we’ve seen in the gulf. With nuclear plants, the worst-case scenarios are too horrible for most people to want to imagine. Denial takes over with policy makers and the public alike. Something approaching a worst-case accident at a nuclear plant, especially one in a highly populated area, would make the Deepwater Horizon disaster look like a walk in the park."

Tarantino/NES mashup interlude: Inglourious Plummers.

Economy/FinReg

Local opposition is pushing conservative Democrats away from stimulus spending, reports Lori Montgomery: "Democratic pollster Mark Mellman said disgust with the stimulus and anxiety about the deficit are 'really a metaphor for wasteful government spending.' From the perspective of many voters, 'a lot of their money has gone out the door to bail out big banks and big corporations while their jobs have been lost.'...Rep. Gerald E. Connolly (D) said job creation is 'less important' to his constituents than the 'Sophie's choice' of a double-dip recession or higher deficits."

The Fabulous Fab is trying to get the federal suit against him dismissed, reports Zachary Goldfarb: "Fabrice Tourre -- also known as "Fabulous Fab," the Goldman Sachs vice president accused of committing fraud by the Securities and Exchange Commission -- asked a federal court Monday to dismiss a government lawsuit alleging that he sold to investors a subprime mortgage security that was secretly designed to fail...According to a response filed Monday to the SEC complaint, Tourre 'specifically denies that he made any materially misleading statements or omissions or otherwise engaged in any actionable or wrongful conduct.'"

Columbia president Lee Bollinger will chair the board of the New York Fed: http://bit.ly/cwRLHi

Martin Feldstein argues we can close the deficit by reducing tax expenditures: "Eliminating tax expenditures does not increase marginal tax rates or reduce the reward for saving, investment or risk-taking. It would also increase overall economic efficiency by removing incentives that distort private spending decisions. And eliminating or consolidating the large number of overlapping tax-based subsidies would also greatly simplify tax filing. In short, cutting tax expenditures is not at all like other ways of raising revenue."

Critics are attacking a subsidy for landline phone line installation as anachronistic: http://bit.ly/aSkMJp

Nobel laureate Vernon Smith makes the case against stimulus: "Our best shot at increasing employment and output is to reduce business taxes and the cost of creating new start-up companies. Don’t subsidize them; just reduce their taxes even as they become larger; also reduce any unnecessary impediments to their formation."

Luigi Zingales argues that international financial firms need an international version of Chapter 11: http://bit.ly/aaD1FH

Long-form interlude: How Terry Kniess gamed The Price is Right.

Domestic Policy

Evangelicals are joining the fight for immigration reform, report Josh Gerstein and Ben Smith: "Most of the arguments put forward by the conservative religious figures are similar to those of other immigration-reform advocates, including Catholics and left-leaning religious groups. The evangelicals’ insist that the treatment of the estimated 12 million illegal immigrants is inhumane and immoral...However, the evangelical leaders are also advancing a more controversial line of argument: that immigration reform is practical or even desirable because Latinos subscribe to moral and religious values in line with social conservatives."

Elena Kagan is distancing herself from the administration's legal defense of health care reform: http://politi.co/9ssOmd

David Obey and the White House are fighting over Race to the Top again, reports Walter Alarkon: "Obey, who is retiring at the end of the year, has been a vocal skeptic of Race to the Top. Unlike broad-based education programs such as Title I grants for low-income schools and special education assistance, only a select few states would win Race to the Top awards. Obey is proposing a 3 percent increase for the Title I program and a 4 percent increase for special education aid for 2011, which is slightly more than the administration had requested. Obey has also noted that Race to the Top received $4.35 billion in the $862 billion stimulus, much of which has yet to be spent. Only two states -- Tennessee and Delaware -- have won Race to the Top grants so far."

We don't know if cheaper doctors provide worse care necessarily: http://bit.ly/bHYf3C

Hispanic lawmakers want health care reform to be friendlier to immigrants, reports Carrie Budoff Brown: "Arguing that immigrants shouldn’t be consigned to second-class legalization, proponents say they will try to relax other restrictions, including lifting the five-year waiting period for legal residents to sign up for Medicaid, which was vastly expanded under the health care law. Some advocates also argue that since immigrants will most likely be mandated to buy coverage under a temporary legal status, they should be eligible for the tax credits immediately."

Charter schools are gaining political power: http://bit.ly/bug33r David Brooks thinks this is the do-or-die moment for technocracy: "This progressive era amounts to a high-stakes test. If the country remains safe and the health care and financial reforms work, then we will have witnessed a life-altering event. We’ll have received powerful evidence that central regulations can successfully organize fast-moving information-age societies. If the reforms fail -- if they kick off devastating unintended consequences or saddle the country with a maze of sclerotic regulations -- then the popular backlash will be ferocious. Large sectors of the population will feel as if they were subjected to a doomed experiment they did not consent to."

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: Daniel Acker/Bloomberg News Photo

By Ezra Klein  |  July 20, 2010; 6:27 AM ET
Categories:  Wonkbook  
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Next: Unemployment benefits to pass, but all alone

Comments

Nice story about JournoList at the Daily Caller this morning:

http://dailycaller.com/2010/07/20/documents-show-media-plotting-to-kill-stories-about-rev-jeremiah-wright/

Posted by: msoja | July 20, 2010 9:35 AM | Report abuse

Hispanic lawmakers want health care reform to be friendlier to immigrants, reports Carrie Budoff Brown:


Oh no they want more. They want what their votes were PAID for.

On top of that they want to ease medicaid restrictions. that's like people in the lifeboats of the titanic going by passing ships and asking people to jump aboard.

Posted by: visionbrkr | July 20, 2010 9:51 AM | Report abuse

Long-time reader, first-time commenter.Always enjoy reading Wonkbook, Ezra.

Quick comment on Martin Feldstein's support for targeting tax expenditures to reduce the deficit: Doesn't this seem a little opportunistic and disingenuous to you? His op-ed supports eliminating tax expenditures on education, child care, and health care, but only a limited roll-back of mortgage-interest tax benefits. That's just playing partisan politics in the guise of a principled stand against tax expenditures and deficits (something we're all-too familiar with when it comes to deficit politics). It seems to me that a real plan to end tax expenditures would just convert them all into regular expenditures, and leave the cutting and horse-trading to the normal appropriations process.

I go into this on my own blog, too (http://jointstock.wordpress.com/2010/07/20/end-tax-expenditures-right/). I just wanted to put these comments here where I originally saw your link to Feldstein's article. I'd be very interested in reading a longer post with your thoughts on the subject.

Thanks.

Posted by: JSC5 | July 20, 2010 6:31 PM | Report abuse

The comments to this entry are closed.

 
 
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