Wonkbook: Obama against environmentalists; Katrina recovery uneven; Dems pushing broader tax cuts
A new lawsuit finds the Obama administration arguing on behalf of utility companies against environmentalists trying to crack down on greenhouse gas emissions. Meanwhile, five years out from Katrina, New Orleans' white and upper-class residents received more in recovery assistance than their black or working-class neighbors. And some congressional Democrats are pushing for the administration to extend the Bush tax cuts in their entirety for another year.
Welcome to Wonkbook.
The Obama administration is siding with utilities against environmental activists on a lawsuit before the Supreme Court, reports Steven Mufson: "The case dates to 2004, when eight state governments, the city of New York and three land trusts sued the Tennessee Valley Authority and five other utilities burning fossil fuels to generate electricity. The plaintiffs said the utilities' greenhouse emissions posed a 'public nuisance' because they contributed to climate change. They asked the court to order the utilities to reduce emissions 'by a specified percentage each year for at least a decade.' Although they lost in district court, a two-judge panel of the 2nd Circuit ruled in their favor on Sept. 21, 2009."
The Hurricane Katrina recovery effort favored the wealthy and white, reports Michael Fletcher: "This month, a federal judge ruled that the program's formula for calculating grants discriminates against black homeowners, who tend to live in neighborhoods with lower home values. ... Advocates say the more than $3 billion distributed by the state's housing recovery program went disproportionately to more-affluent residents. The plan paid up to $150,000 to homeowners whose properties were damaged by the unprecedented storm surge spawned by Katrina, but nothing to those whose homes suffered wind damage."
More and more congressional Democrats are backing a year's extension of the full Bush tax cuts, reports Lori Montgomery: "Democrats said it has gained momentum since economist Mark Zandi, a key adviser to House Speaker Nancy Pelosi (D-Calif.), adopted that view during a presentation at a Democratic issues conference in California in mid-August. ... Some progressives are pushing back. In an op-ed this week in the Financial Times, John Podesta of the Center for American Progress and Robert Greenstein of the Center on Budget and Policy Priorities, argued that extending the high-income tax breaks even temporarily would send a bad signal to investors worried about rising U.S. debt."
Basement pop interlude: Tennis play "Marathon" live.
Still to come: A growing number of Republicans back higher taxes; Obama's environmental advisers largely stayed out of its offshore drilling policy decision-making; New Orleans schools are improving five years after Katrina; and a member of al-Qaeda tries out for "American Idol."
Benjamin Sarlin talks to right-leaning politicians and economists who are backing new taxes: "President Maya MacGuineas, a former adviser to John McCain, has called for a major energy tax to reduce the deficit. ... Domenici said that the tax cuts, which he helped put in place, are indeed a significant contributor to the deficit. 'There is no question that there is a big impact on the debt from the extension of the whole package,' he said."
The federal regulator overseeing Fannie and Freddie has a new theory of the pair's collapse, reports Zachary Goldfarb: "Thursday's report from the Federal Housing Finance Agency said that Fannie and Freddie's portfolios weren't the major driver behind the companies' losses. Rather, it was the role the companies played as a guarantor of mortgages that led to most of their losses, the FHFA said. Geithner has also pointed to the weight of souring guaranteed loans as a source for the companies' troubles."
Foreclosures and delinquencies dropped a bit in the second quarter.
The U.S. trade deficit is hurting growth, reports Howard Schneider: "The rise in the trade deficit, including an abrupt 16 percent spike in June, is a chief reason economists are downgrading estimates for recent U.S. economic growth. Statistics to be released Friday are expected to show that the economy grew more slowly from April to June than initially thought, with a group of analysts polled by Bloomberg cutting their growth estimates to an annualized rate of 1.4 percent, down from 2.4 percent as reported by the government late last month."
Credit card reform is limiting card companies' marketing to college students.
Paul Krugman thinks this is not much of a "recovery": "The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative."
David Brooks praises Germany's long-term economic planning.
Mohamed A. El-Erian argues that fiscal stimulus is not enough to put the U.S. economy back on track: "With the recovery's visible loss in momentum, more people are coming to appreciate the importance of structural issues. Indeed, some elements of the package are visible. Yet, to my dismay, the prospects for a sufficiently bold policy reaction are doubtful. Post-financial crisis, it is no longer just about the 'unusually uncertain' economic outlook and related challenges for a policy approach that remains too reactive and ad hoc. The politics of structural change are now a material impediment."
Domestic security interlude: A Canadian al-Qaeda suspect's American Idol tryout tape.
Obama's top environmental advisers were not part of the final decision to expand offshore drilling, report Juliet Eilperin and Mary Pat Flaherty: "Speaking before the presidential oil spill commission, Jane Lubchenco, the National Oceanic and Atmospheric Administration's administrator, and Nancy Sutley, chair of the Council on Environmental Quality, said that while they did offer comments about the proposal, the key decisions were made by the president and Interior Secretary Ken Salazar, who oversees U.S. oil and gas policy under federal law."
A new report says recent safety standards are adequate for ensuring the safety of offshore drilling.
Community colleges are ramping up training for green jobs, reports Elizabeth Olson: "Some community colleges already are offering two-year degrees in environmental management and certificates for managers who want to add green qualifications -- which means learning more about the environmental aspects of a particular field -- to their résumés. These colleges are offering some courses and training on campus as well as online. Lane Community College, in Eugene, Ore., for example, is offering two-year programs -- for associate degrees in applied sciences -- in energy management, renewable energy or water conservation."
The tourism industry in Florida is trying to secure oil spill compensation.
The DOD is opposing wind turbine programs, reports Leora Broydo Vestel: "Moving turbine blades can be indistinguishable from airplanes on many radar systems, and they can even cause blackout zones in which planes disappear from radar entirely. Clusters of wind turbines, which can reach as high as 400 feet, look very similar to storm activity on weather radar, making it harder for air traffic controllers to give accurate weather information to pilots. ... Because of its concerns, the Defense Department has emerged as a formidable opponent of wind projects in direct conflict with another branch of the federal government, the Energy Department, which is spending billions of dollars on wind projects as part of President Obama’s broader effort to promote renewable energy."
Investigators grilled BP executives on the company's safety record.
Geek culture mashup interlude: Neo from "The Matrix" as Scott Pilgrim.
A half-decade after Katrina, things are looking up for New Orleans schools, writes Sarah Laskow: "In 2005 Orleans Parish was the second-worst-performing school district in the state, and in some schools 30 percent of seniors dropped out over the course of the year. ... In New Orleans today, students and educators have unprecedented leeway to mold educational experiences. Students can apply to and, if accepted, choose to attend any of the city’s 46 charter schools or 23 'traditional' schools. The vast majority of schools have open-enrollment policies that allow any student to attend, regardless of past academic success. (Schools with more applicants than spots hold lotteries.)"
Immigration reform advocates expect Scott Brown and Lindsey Graham to back future efforts.
Concern over its effect on business is deterring states from copying Arizona's immigration law, reports Elise Foley: "Florida legislators are using concerns about tourism to push back against an anti-immigration bill proposed for the next legislative session. The bill, proposed by defeated Republican gubernatorial hopeful Bill McCollum and some state representatives, promised to be 'tougher' than the Arizona law. ... In Utah, where Republican Rep. Stephen Sandstrom introduced legislation like Arizona’s, opposing lawmakers have argued the bill would cost Utah millions of dollars in detention costs, increased enforcement measures and potential lawsuits."
Harold Pollack makes the case for expediting health-care reform implementation.
As a cost-cutting measure, states are attempting to have employees pay more for health care, reports Jeannette Neumann: "The states' moves to get workers to pay more for health coverage also comes amid a growing awareness of the gap in benefit contributions between public and private employees. A handful of states have made changes this year, including Kentucky, Connecticut and Texas, and they join a growing number of governments that have cut health benefits in recent years without major challenges. But in Michigan, the trend has met firm resistance."
Bush HHS secretary Michael Leavitt argues health-care reform has weakened Medicare's finances.
Dylan Matthews is a student at Harvard and a researcher at The Washington Post.
August 27, 2010; 8:39 AM ET
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