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Wonkbook: House to vote on EduJobs; Fed meets; Bushies blast 14th amendment reform

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The Federal Open Market Committee is meeting today amidst speculation -- and in some quarters, fervent hope -- that they'll take a more aggressive role in accelerating the recovery. The House is also heading into session, with the $26 billion education and Medicaid bill and a $600 million border security bill on the dockets. Meanwhile, BP is nearing a deal with the US government to secure funding for its $20 billion Gulf cleanup fund, and former Bush administration officials are objecting to Republican calls for changing the 14th amendment.

Irt's Tuesday. Welcome to Wonkbook.

Top Stories

The Fed's policymaking organ is meeting today, reports Neil Irwin: "One key option on the table will be to state that the Fed will maintain the current size of its balance sheet, $2.3 trillion, by buying new assets as the mortgage-backed securities in its portfolio mature. That would have only a moderate impact in terms of increasing the money supply, but would signal that the Fed has become more worried about growth. Similarly, the Fed could strengthen its statement that economic conditions 'are likely to warrant exceptionally low levels of the federal funds rate for an extended period.' The policymakers could state how long an 'extended period' might be, such as two or three years."

The House is back in session today to pass the $26 billion state-aid bill and a $600 million border security bill:

BP and the Obama administration are near a deal on the $20 billion Gulf cleanup fund, reports Monica Langley: "The Justice Department and BP said Monday they had completed talks to establish the fund, which is designed to cover damage claims from residents and businesses hurt by the spill and clean-up efforts by state and local governments. BP paid $3 billion into the fund ahead of schedule...BP has said it expects to be able to make the required payments to the $20 billion fund through its ongoing operations and asset sales. However, the administration wanted security in the form of collateral in the event that BP couldn't meet its obligation due to financial or legal problems."

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Republican opposition to the 14th amendment's provision of birthright citizenship is facing a backlash from Bush-era officials, reports Scott Wang: "Cesar Conda, who served as domestic policy adviser to Cheney, has called such proposals 'offensive.' Mark McKinnon, who served as media adviser in Bush’s two presidential campaigns, said Republicans risk losing their 'rightful claim' to the 14th Amendment if they continue to 'demagogue' the issue."

Experimental pop interlude: Menomena play "Taos".

Still to come: Freddie Mac's losses are shrinking but it still needs government aid; China is shuttering more than 2,000 factories over pollution concerns; Obama's doubling down on his education policies; and a park ranger befriends a group of lions.


More and more investors are paying to hear predictions from serious pessimists, reports Landon Thomas Jr: In many smart-money circles, listening to bears has become fashionable, especially now that doubts remain about the sustainability of the euro zone, concerns grow that the United States may slip back into recession and that even the Chinese growth engine may seize up. But to some, the popularization of extremely dire forecasts suggests that the pendulum may have swung too far.

Freddie Mac is losing less but still needs government help, reports Zachary Goldfarb: "The massive dividends are forcing Fannie and Freddie to borrow money from the Treasury to repay taxpayers, creating a cycle of ever-increasing demands for government infusions of money and dividend payments. The Obama administration and Congress are beginning to devise a new housing finance system to replace Fannie and Freddie. No decisions about the future of U.S. housing policy have been announced."

CEOs are not confident about the recovery:

Only cities with large governmental sectors saw incomes rise last year, reports Conor Dougherty: "Among the 52 metro areas with populations of more than one million, in only three did both net earnings and the broader measure of personal income both rise. All three had strong ties to the federal government: the Washington, D.C., area and two areas with a large military presence, San Antonio and Virginia Beach, Va. In all three, the biggest gains were among workers in the federal government and the military; private sector compensation fell. The same picture was reflected nationally, as private employers froze and in many cases reduced workers' pay and hours."

A paper from the San Francisco Fed says odds of a double-dip recession are rising:

Obama will get to appoint at least a half dozen financial regulators in the next year, reports Silla Brush: "Obama will likely move within the next year to name new heads of at least a half-dozen major offices, including: the Consumer Financial Protection Bureau; the Office of the Comptroller of the Currency; the Federal Deposit Insurance Corporation (FDIC); the Office of Financial Research; and an insurance representative on a new council of regulators. The president is also in the process of filling vacant positions at the Federal Reserve. The Treasury secretary will also need to appoint someone to lead the first-ever Federal Insurance Office, which will have the power to monitor the insurance industry at the federal level."

St. Louis Fed chair William Poole says more bond purchases won't help the recovery:

Allan Sloan argues the Social Security trust fund is "funny money": "Let's say I begin taking Social Security when I hit the full retirement age of 66 later this year. Because its tax revenue is below its expenses, Social Security would have to cash in about $3,400 of its trust-fund Treasurys each month to get the money to pay me. The Treasury, in turn, would have to borrow $3,400 from investors to get the money to pay Social Security. The bottom line is that the government has to borrow money to pay me, regardless of how big the trust fund is."

Bob Herbert thinks we face a labor market participation crisis:

Daniel Gross believes worker unwillingness to settle for low-pay, menial work makes sense: " A smaller percentage of private-sector jobs today come with health insurance, while many workers who have insurance have to pay more for it. Given globalization, the furious pace of mergers and acquisitions, and continuous cost pressures, job security is increasingly tenuous. And so the main thing employees--and potential employees--look at when evaluating their current jobs and potential offers is wages. And here, too, corporate America hasn't been delivering. The median income in 2008 was below what it was in 1998."

Adorable animals befriending humans interlude: A South African park ranger gets to know a group of lions and hyenas.


China is closing over 2,000 factories because of environmental concerns, reports Keith Bradsher: "The National Development and Reform Commission, which is the government’s most powerful economic planning agency, announced last Friday that it had forced 22 provinces to halt their practice of providing electricity at discounted prices to energy-hungry industries like aluminum production. The current Chinese five-year plan calls for using 20 percent less energy this year for each unit of economic output than in 2005. But surging production by heavy industry since last winter has put in question China’s ability to meet the target."

New technology could enable whole buildings to become solar panels:

BP added its first $3 billion to the cleanup fund, reports Siobhan Hughes: "BP said the account would be administered by a newly established trust overseen by former U.S. District Judge John Martin and by Kent Syverud, dean of the Washington University School of Law. Citigroup Inc. will serve as corporate trustee."

BP will continue work on a relief well this week:

Undertraining has created a crisis on offshore oil rigs, report Carol Leonnig and Marc Kaufman: "On more than 4,000 platforms and exploration rigs in the gulf, workers are asked daily to do very arduous work under difficult conditions -- often with little sleep and sometimes with limited instructions and inadequate training. According to scores of accident reports and panel investigations by the MMS in recent years, the stressful and sometimes confused working conditions played a significant role in the accidents and deaths that have occurred in the gulf. In the past two years, federal rig inspectors have warned their bosses of a looming safety crisis because of workers' minimal training. But little changed."

Eugene Robinson talks to Thad Allen about what can be learned from the oil spill: "Allen acknowledges that how much oil remains in the gulf, and what effect the oil and dispersants are having on marine life, will not really be known until scientists have the chance to conduct further studies...Much of his focus now is on containing and cleaning up the oil that remains -- and on doing his best to ensure that the knowledge gained from dealing with the Deepwater Horizon spill is put to good use. 'It would be adding a crime to a crime,' he said, 'if we didn't make this one of the great learning laboratories in the history of this country.'"

Megan McArdle doubts a carbon tax would spur energy innovation:

Supercut interlude: Every lightsaber ignition and retraction in every Star Wars movie.

Domestic Policy

Obama is defending his education policy by focusing on higher ed, reports Carol Lee: "Education is one piece of Obama’s 'Made in America' plan he’s touted in recent weeks. It includes doubling U.S. exports, broadly adopting renewable energy initiatives and producing 8 million additional college graduates by 2020...He detailed a strategy to try to reverse the trend: making college more affordable, including pressuring colleges and universities to keep from raising tuition; investing in institutions; reforming student loans, an initiative Obama said Democrats passed despite Republican opposition."

House leaders might send the Senate's border bill back with no action:

The administration is investigating pay practices in the health care industry, reports Robert Pear: "'It is the duty of the management to exercise its control and see that the work is not performed' if the employer does not intend to pay for it, the rules say. In some cases, workers and the government say, hospitals automatically reduce an employee’s pay by the equivalent of 30 minutes per shift, on the assumption that the worker has taken a meal break, even when the employee missed it or was interrupted."

Google is considering using more of its stored user data to target advertisements:

Race to the Top is creating a boom of "school turnaround" experts, reports Sam Dillon: "Under federal rules, school districts can hire companies or nonprofits to help, and experts said a significant percentage, perhaps a majority, were likely to hire at least one outside contractor. Sandra Abrevaya, a spokeswoman for the Department of Education, said the department did not yet know exactly how many districts would do so."

Emily Bazelon defends alleged "judicial activists" on district courts:

Google and Verizon CEOs Eric Schmidt and Ivan Seidenberg defend their deal on net neutrality: "Internet service providers should also have a fair amount of flexibility to manage their networks and the opportunity to provide additional services -- such as telework applications, health monitoring services or optimized gaming -- so long as these services do not affect consumers' ability to simply access their favorite sites over the open Internet offerings that this framework would protect."

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

By Ezra Klein  |  August 10, 2010; 6:30 AM ET
Categories:  Wonkbook  
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Next: Obama and the left


You guys should stop complaining cuz one the health care we have now isnt as good as it was supposed to be. also the law has just been signed give it a try u guys are too hard on democrats they went to college and we voted for most of these if u want to say u have the right to choose tell that to ur congress men or state official. as for obama people are just tryin to make it look like america made a mistake he has done things to help us and we had a full 8 years of a terrible president and i will be so as happy as ever when a obama fixes bush's mistakes. You can find full medical coverage at the lowest price from . obama has to put up with the world judging his every move and trying to fix the mess we are in we are lucky anyone wants to be our president. STOP COMPLAINING AND GIVE HIM A BREAK. i wanna see one of yall do what he has done. some people are just so ignorant.

Posted by: devinjoel10 | August 10, 2010 6:56 AM | Report abuse

Hey, can we add a filter that prevents the posting of anything with the words "healthcare" and a link? Cuz the spammer gets old.

That being said: "Cesar Conda, who served as domestic policy adviser to Cheney, has called such proposals 'offensive.'"

If by "offensive" he means "stupid", then I agree. As other conservatives have mentioned, turning citizenship from a birthright to a fiat of the state makes citizenship an arbitrary assignation from government, rather than something conferred by nature.

There's no good that can come from making government the fickle arbiter of who is a citizen and who is not. Actual conservatives would see that inherent flaw. Of course, this started with Lindsey Graham.

Posted by: Kevin_Willis | August 10, 2010 8:30 AM | Report abuse

I agree with Kevin_Willis about the daily commercial spam in this blog. WaPo can and should do better with moderating that kind of stuff out of here.

Posted by: Patrick_M | August 10, 2010 9:12 AM | Report abuse


"As other conservatives have mentioned, turning citizenship from a birthright to a fiat of the state makes citizenship an arbitrary assignation from government, rather than something conferred by nature."

I don't really see how a jus sanguinus mode of citizenship is any more arbitrary or "less nature-based" then a jus soli principle. If you have a wacky counterfactual in mind, please describe to clarify (it's certainly possible that repeal advocates have something wacky in mind and I just haven't heard about it yet).

Obviously I don't favor repeal, I'm just sayin', as they say.

Posted by: eggnogfool | August 10, 2010 9:26 AM | Report abuse

I love Wonkbook. It's like a newspaper... that I want to read!

Posted by: fakedude1 | August 10, 2010 9:31 AM | Report abuse

@eggnogfool: "I don't really see how a jus sanguinus mode of citizenship is any more arbitrary or 'less nature-based' then a jus soli principle. "

Inevitably, it is largely a matter of how you choose to think about it, but I would suggest (especially for conservatives!) a system where the government confers citizenship in all cases is not a desirable system. Birthright citizenship is admittedly conceptual, as is government-conferred citizenship, but one has a connection to location, to country, to Creator-bestowed inalienable rights, while the other is a product of bureaucratic caprice.

For example, would conservatives think a system where citizenship is a product of paying taxes--so that if you show up and pay taxes, you're a citizen (as are your children) but if you do not, then your citizenship (and your children's) can be taken away? For that seems to me to be the road those championing a re-examination of the 14th amendment (a pointless task, in any case, because there is a 0% chance of a 2/3rd majority of state legislatures to repeal the 14th) are headed down.

Posted by: Kevin_Willis | August 10, 2010 10:17 AM | Report abuse


I agree that that would be a terrible way to determine citizenship.

Considering the standard alternative of citizenship based on your parent's citizenship(s), I don't see how any of that applies, except for the Magic Dirt stuff.

Posted by: eggnogfool | August 10, 2010 11:01 AM | Report abuse

There is an inherent logic in the notion of citizenship "by default" from the nation in which one is born. If we begin to carve out exceptions to that logical presumption, we end up on a slippery slope where our government may choose to deny the fundamental status of citizenship for any number of temporarily popular reasons.

Jus soli is the sturdier concept.

Anyway, this whole argument is a waste of time. If the Republicans attempt to remove birthright citizenship, it will fail the constitutional test. If they want to amend the Constitution, that effort will fail as "change the Constitution" campaigns always do. The whole thing is silly.

Posted by: Patrick_M | August 10, 2010 12:09 PM | Report abuse

having read through several comments, I noticed that there wasn't one person who actually seemed to understand the reasoning behind the change proposed by Lindsey Graham. So, here goes. The proposal to eliminate the automatic citizenship by judges interpretation of the 14th amendment is to remove the enticement to illegals to have "anchor babies". The 14th amendment was originally meant to clarify the status of ex-slaves and their children.

Posted by: gfafblifr | August 10, 2010 1:22 PM | Report abuse


Actually, I think all of us who have discussed the issue are well aware that the stated objective for creating an exception to the language of the 14th Amendment is to prevent rights of citizenship to children born to illegal immigrants on American soil.

While the 14th Amendment may have been ratified largely to clarify the status of freed slaves and their children, it simply affirms and incorporates the much older and broader legal concept of jus soli, which many of us feel is extremely sensible and therefore ought to be left alone.

Posted by: Patrick_M | August 10, 2010 6:32 PM | Report abuse

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