Wonkbook: Romer out; Voinovich questions tax cuts; Kagan confirmed; Delicious lobster
Lots of economic news today: Council of Economic Advisors chair Christina Romer is resigning at the end of the month, which, combined with Peter Orszag's departure, leaves the Obama economic team without two of its lead players. MIT professor Peter Diamond's nomination to the Federal Reserve Board of Governors has been sent back to the White House by the Senate because of GOP opposition. And we're starting to see some opposition to extending the Bush tax cuts without offsets among Republicans, including swing-vote George Voinovich.
Meanwhile, the Senate released the Kagan yesterday, approving the former-solicitor general's nomination to the Supreme Court 63-37, and then passed a $4.7 billion school nutrition bill. Speaking of nutrition, DC's set to get a lobster-roll truck next week; just one more entrant into the city's delicious food-cart renaissance. But ever wonder why DC's suddenly getting so many food trucks and carts? Policy, my friends. Delicious, delicious policy.
It's Friday, and now I want lobster for breakfast. Welcome to Wonkbook.
Christina Romer is leaving the White House to return to UC Berkeley, reports Lori Montgomery: "Obama and his chief economic adviser, Lawrence H. Summers, praised Romer on Thursday, noting that she will continue to serve the administration as a member of the Economic Recovery Advisory Board led by former Federal Reserve chairman Paul Volcker...It was not immediately clear who would replace Romer. White House observers called Austan Goolsbee, a member of the Council of Economic Advisers, an obvious choice, but that would leave Obama without a woman on his senior economic team."
Opposition to extending the Bush tax cuts is spreading among Republicans, reports Walter Alarkon: "Sen. George Voinovich (R-Ohio), President Reagan’s budget chief David Stockman and former Federal Reserve Chairman Alan Greenspan have each argued that extending the tax cuts -- set to expire at year’s end -- would increase the nation’s $13 trillion debt. 'It’s like tax reductions, you don’t need to pay for them? To me, that’s nonsense,' Voinovich said."
Today's job report could determine the Fed's decision on pursuing more monetary stimulus: http://bit.ly/baf1um
Elena Kagan has won confirmation, but the tight margin suggests future confirmation battles will be brutal, reports Josh Gerstein: "Goldstein said Kagan’s margin is uncomfortably close to the 60-vote threshold the majority party needs to end a filibuster...Comparing Ginsburg’s 96-3 landslide with Kagan’s 63-37 tally offers the best evidence of how much things have changed. As the former head of the American Civil Liberties Union’s women’s rights project, Ginsburg clearly had liberal credentials, though she also had more than a decade of experience as an appellate court judge."
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The Senate has passed a $4.5 billion school nutrition bill, reports Abby Phillip: "Senators...funded the reauthorization using a different set of budget offsets from the food stamp or the Supplemental Nutrition Assistance Program, which the Senate also used to fund a $26 billion state aid and education funding bill on Thursday. SNAP received a funding boost in the 2008 stimulus bill, but has suffered deep cuts this week, with a $19.9 billion used from the emergency state aid bill; the child nutrition bill will siphon off another $2.2 billion from the program. In a conference call with reporters on Thursday, Lincoln said the money cut from SNAP would not have been spent until 2013."
Scandinavian pop interlude: Jens Lekman plays "Your Arms Around Me" live.
Still to come: Fannie and Freddie are helping attorneys profit from foreclosures; environmental groups are avoiding staff shakeups after the failure of cap and trade; the Michelle Obama-backed school nutrition bill has passed the Senate; and an opossum gets a pedicure.
The Senate has returned Peter Diamond's nomination to the Fed Board of Governors, report Pedro da Costa and Rick Cowan: "The animosity toward Diamond, who has said he is more worried about deflation than inflation, first emerged during the Senate committee vote...Richard Shelby, the committee's top Republican, said at the time that Diamond did not have the right sort of experience for the job. 'I do not believe the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job,' the Alabama senator said...It was unclear whether Obama would resubmit Diamond's nomination or name someone else to the post."
Fannie Mae and Freddie Mac are assisting lawyers who profit from foreclosures, reports Andy Kroll: "Hiring lawyers on a case-by-case basis was burdensome, so Fannie and Freddie put together a stable of law firms, prime contractors prepared to litigate large bundles of foreclosures quickly and cheaply. They urged these handpicked firms to bring in-house all of the related services--inspections, eviction notices, sales of repossessed properties, and so forth--or at least to retain a suitable subcontractor to handle the tasks. Thus emerged the foreclosure supermarket."
Jobless claims are up, against economists' predictions: http://bit.ly/d6IO3A
The Senate state aid bill received final passage, report Lori Montgomery and Jenna Johnson: "Even as the federal government is preparing Friday to release new unemployment figures likely to underscore the weakness of the economic recovery, a separate jobs bill aimed at spurring hiring by small businesses was stalled in the Senate and unlikely to move until after Labor Day. Obama urged the Senate to quickly wrap up work on the package. Aides said a final Senate vote is likely Thursday afternoon. The package would then go to the House, whose members will return to Washington on Tuesday, House leaders said."
A bipartisan group of Senators support eliminating SEC's exemption from FOIA requests: http://politi.co/blXKsE
Paul Krugman thinks Paul Ryan is hardly the truthteller he's made out to be: "The Tax Policy Center finds that the Ryan plan would cut taxes on the richest 1 percent of the population in half, giving them 117 percent of the plan’s total tax cuts. That’s not a misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95 percent of the population...In its first decade, most of the alleged savings in the Ryan plan come from assuming zero dollar growth in domestic discretionary spending, which includes everything from energy policy to education to the court system. This would amount to a 25 percent cut once you adjust for inflation and population growth. How would such a severe cut be achieved? What specific programs would be slashed? Mr. Ryan doesn’t say."
Paul Michel and Henry Nothcraft make the case for patent reform as a jobs strategy:
Steven Pearlstein argues that philanthropy is not enough to fight economic inequality: "Yes, philanthropy has been important, but so have unions, which ensured a fair distribution of corporate profits. So have antitrust laws that prevented successful companies from snuffing out entrepreneurial competition. So have norms of corporate behavior that made it socially unacceptable for top corporate executives to pay themselves 350 times what their workers made. And so have tax-supported schools, playgrounds and hospitals that were good enough to be used by rich and poor alike."
Questionable moments in animal hygiene interlude: How to give a pedicure to an opossum.
Green groups won't shake up their leadership following the cap and trade defeat, reports Coral Davenport: "EDF had spent $20 million on climate legislation since October 2008. Al Gore’s Alliance for Climate Protection pledged in 2006 to spend $300 million, but it’s unclear how much it ended up using. Enraged environmentalists flooded the White House with phone calls after the quotation appeared in publication. Publicly, they decried the finger-pointing and insisted they aren’t alone in deserving fault, saying Obama failed to use his bully pulpit and moderate Senate Republicans weren’t allowed by their leaders to fully negotiate."
Gulf residents are skeptical of the apparent good news: http://nyti.ms/aC3sUf
BP has finished cementing the leaking oil well, reports Guy Chazan: "Privately, some BP officials say that with the well now cemented shut, there is less need to kill the well using a so-called bottom kill procedure via the relief well. On Thursday, Retired Coast Guard Adm. Thad Allen, who heads the federal oil-spill response, reiterated that the operation would only be considered complete once the relief well was drilled, partly because there could be no guarantee that the cement BP had pumped into the well had filled it completely."
Lobbyists are rushing to influence the final oil spill response bill: http://bit.ly/cTvAjg
David Roberts thinks environmentalists and libertarians can find common ground on climate change: "Some regulatory incentives degrade environmental and economic performance. You could point to fossil-fuel subsidies, antediluvian utility regulations, unpriced carbon emissions, any number of tax breaks and incentives that favor industry incumbents, even parts of the Clean Air Act. These are market distortions that incentivize inefficiency (i.e., stupidity) and therefore waste (i.e., pollution). Removing or rationalizing them -- making a more perfect market, with more competition, better information, and lower barriers to entry -- would improve environmental performance."
The hidden side of Washington interlude: David Deal photographs the physical infrastructure of DC.
The Medicare trustee's report suggests health care reform helped the program's solvency, reports Jackie Calmes: "Medicare’s hospital insurance trust fund should remain solvent until 2029, or 12 years more than projected in last year’s report, the trustees said. The long-term, 75-year shortfall for the hospital fund also is reduced, as are the projected costs of the separate Medicare Supplementary Insurance program. But both parts of the Medicare system will require additional reforms to be financially sustainable, the trustees say."
Medicare actuary Richard Foster is challenging the trustees' report: http://bit.ly/b9KmmX
The FCC has ended net neutrality talks with business, reports Cecilia Kang: "The participants also debated whether carriers could offer faster downloads for some Web sites offered to customers as 'specialized services.' The parties agreed that dedicated capacity for things such as telemedicine could be allowed, but some feared that allowing that could result in tiered service offerings where a carrier would charge for better-quality channels dedicated to YouTube, for example, over Netflix."
Charles Krauthammer thinks the administration is using executive authority to circumvent the will of Congress: "Last week, a draft memo surfaced from the Department of Homeland Security suggesting ways to administratively circumvent existing law to allow several categories of illegal immigrants to avoid deportation and, indeed, for some to be granted permanent residency. Most disturbing was the stated rationale. This was being proposed "in the absence of Comprehensive Immigration Reform."...Regardless of your feelings on the substance of the immigration issue, this is not how a constitutional democracy should operate. Administrators administer the law, they don't change it. That's the legislators' job."
Some Senators are decrying how Ivy League-centric the Supreme Court has become: http://politi.co/bu9b4t
Adam Winkler thinks the Kagan hearings showed the confirmation process works: "Even the politicization of the process is salutary. Every nominee’s record is closely examined for controversial statements or ideas, meaning some qualified people are excluded. But the consequence is that anyone who does make it through the process is likely to have more or less mainstream views. Radicals whose jurisprudence would likely take us too far left or too far right need not apply. This is a net positive: the Court should stay within the broad mainstream of American political thought."
David Leonhardt notes the benefits of education don't end in kindergarten: http://nyti.ms/9A826x
Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: Pete Souza/White House.
August 6, 2010; 6:32 AM ET
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