Wonkbook: House votes for China tariffs; net neutrality bill dead; Elizabeth Warren's first speech
The theory here is obvious enough. Mix a bad economy with a helpless legislature and an angry populace and people are going to go searching for someone to blame. And Posen is being proven right: The House voted to allow tariffs against China yesterday, with one member decrying the "clique of gangsters" in Beijing. Something for Janet Yellen and Sarah Bloom Raskin, the newly confirmed members of the Fed's board, to think about. Welcome to Wonkbook.
The House voted to allow tariffs against China, reports Howard Schneider: "The House vote was overwhelming - 348 to 79 - and bipartisan. The rhetoric was sharp as members of Congress slammed the 'clique of gangsters' at the head of the Chinese government and argued that the United States was already fighting a trade war with the world's most populous nation. Joint trade between the two countries amounts to nearly $300 billion a year, but it is lopsided: The U.S. trade deficit with China was in excess of $200 billion last year. Opponents said the legislation, if enacted, could raise prices for U.S. consumers and was more about election-year politics than addressing the trade problems between the two nations."
Janet Yellen and Sarah Bloom Raskin have been confirmed to the Fed's board of governors, reports Corey Boles: "The U.S. Senate unanimously confirmed two of the three outstanding Federal Reserve Board governor nominees on Wednesday night, filling key slots on the central bank's board. Lawmakers approved Janet Yellen as a member of the board, as well as vice chairman of the Fed, and Sarah Bloom Raskin as a member of the board. A third nominee to complete the Fed's board of governors, Peter Diamond -- an economics professor at the Massachusetts Institute of Technology -- wasn't confirmed by the Senate, leaving lawmakers to consider his nomination when they return after the November mid-term elections."
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Senate leaders are conceding that renewable-energy legislation likely won't get a vote this Congress, report Darren Samuelsohn and Josh Voorhees: "Majority Whip Dick Durbin (D-Ill.) said Wednesday that the legislative agenda is quickly filling up for the post-election session, with priority going first to the START arms reduction treaty with Russia, tax cuts and the fiscal year 2011 omnibus spending bill. 'I think it's unlikely we'll have time to take up a bill that's controversial, that would take a longer period of time,' Durbin said when asked about the renewable electricity standard, or RES. 'Already, there are at least three in the queue. It's going to be difficult.'"
The Senate passed a stopgap spending bill, reports David Rogers: "A stopgap spending bill to keep the government operating for the next two months cleared the Senate Wednesday night--rolling over conservative protests that deeper spending cuts were needed... The underlying bill, approved 69-30 and sent onto the House, fills just 25 pages and reflects what’s been a bipartisan effort to avoid the costly add-on’s so famous in past continuing resolutions. Senate Republicans had a virtual veto over any new spending in the bill."
Net neutrality's main sponsor has declared it dead, reports Cecilia Kang: "In a statement, Waxman urged the Federal Communications Commission to reassert its authority to regulate broadband access providers. Doing so would allow the FCC to create its own net neutrality rules -- an effort that was thrown into doubt when a federal court ruled the agency overstepped its authority by sanctioning Comcast for allegedly violating broadband rules. 'With great regret, I must report that ranking member Barton has informed me that support for this legislation will not be forthcoming at this time,' Waxman said in a statement."
Britpop interlude: Blur plays "Tender" on Later with Jools Holland.
Still to come: Elizabeth Warren extends a hand to bankers; anti-EPA legislation is dead; senators are embracing Obama's suggestion to break the climate bill into parts; and a baby wallaby takes its first hop.
Elizabeth Warren extended an olive branch to bankers, reports Brady Dennis: "But there is something you may want to know: I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike." She quoted from a speech that businessman Joseph P. Kennedy gave after he was appointed as the inaugural director of the Securities and Exchange Commission in the 1930s: "We are not working on the theory that all the men and all the women connected with finance, either as workers or investors, are to be regarded as guilty of some undefined crime. On the contrary, we hold that business based on good will should be encouraged."
Business groups are fighting the SEC's new rule on proxy votes in court, reports Zachary Goldfarb: "The petition by the U.S. Chamber of Commerce and Business Roundtable, two of the largest business trade associations, targets a rule approved last month by the Securities and Exchange Commission that would make it easier for shareholders to oust directors on corporate boards and to nominate replacements. It also sets the stage for one of the first legal showdowns between companies and regulators over Washington's tougher approach to overseeing corporate America. Under the Dodd-Frank financial overhaul measure President Obama signed this summer, the SEC and other federal regulators are required to issue hundreds of new rules."
JP Morgan is freezing foreclosures, reports Ariana Eunjung Cha: "The bank's decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Yet the impact may be much broader, given J.P. Morgan's stature in the industry. If other banks adopt the same approach, the foreclosure process in many parts of the country will grind to a halt. Officials at Fitch Ratings, a credit-rating firm that measures the health of companies, said the 'defects' found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation's largest lenders."
The fiscal commission will push earmark reform: http://bit.ly/acxutz
The Financial Stability Oversight Council is fighting over turf even before its first meeting, reports Damian Paletta: "A senior Treasury Department official forwarded an email from Mr. Geithner to roughly a dozen other government officials, people familiar with the matter said. In the message, Mr. Geithner asked for feedback on a planned FDIC rule on securitizations. He offered two options: The FDIC could proceed but have the rule conform to standards on which all regulators would later agree; or the FDIC could delay any decision for six months while regulators conferred...The email alarmed several regulators, people familiar with the matter said."
TARP banks are still sitting on $65 billion as the program is set to expire next week: http://bit.ly/aGdZgK
Treasury is near a deal on recouping taxpayer investment in AIG, reports Brady Dennis: "Under the terms of the agreement, Treasury plans to convert its $49 billion in preferred shares in AIG into common equity, effectively taking a 92 percent ownership stake in the company. The U.S. government currently holds a 79.8 percent stake. Any such conversion probably would not take place until 2011, and the government would subsequently sell its shares to investors over time. Under that arrangement, AIG's share prices will play a key role in how much money the U.S. government can recover for taxpayers."
Basel III is worth celebrating but still comes up short, writes Alan Blinder: "While the Dodd-Frank Act wisely removed most provisions in U.S. law that gave the rating agencies special exalted status, Basel III did not. So the agencies that did so poorly in rating mortgage-backed securities and collateralized debt obligations will continue to play major roles in the risk-weighting process. It gets worse. Didn't the Basel Committee notice that the internal risk models of most of the world's leading financial institutions led to disaster? Whether it was gross-but-honest errors in assessing risk or self-serving behavior is an important moral question, though not an important operational one."
Astronomy interlude: The most Earth-like planet yet found.
A key advocate for legislation blocking EPA regulations on climate change is conceding defeat, reports Darren Samuelsohn: "Sen. Jay Rockefeller (D-W.Va.) acknowledged that his bid to block the Environmental Protection Agency’s global warming policies is only a 'message' bill that doesn't have any chance of making it into law. Rockefeller has extracted a promise for a floor vote before the end of the year on legislation that would handcuff EPA’s ability to write climate-themed rules for two years on power plants and other stationary sources. But with aides to President Obama signaling that the White House would veto his bill, Rockefeller said he’s prepared for defeat."
BP is undergoing an executive shuffle: http://wapo.st/9Vh8Gs
Senators are embracing Obama's proposed strategy of breaking up the climate bill, reports Darren Samuelsohn: "From John Kerry to Lamar Alexander, the reaction on Capitol Hill to the president's remarks in a Rolling Stone magazine interview suggest there's room for compromise on energy and environmental issues when Congress returns next year...Kerry said he spoke this year with several key Republicans, including Alexander and Maine Sen. Olympia Snowe, on a way to get short-term greenhouse gas emission reductions similar to earlier versions of his legislation."
Obama is planning a green charm offensive: http://politi.co/c1wfMV
"Heavy duty" auto emissions standards are due soon, reports Matthew Wald: "The Obama administration could announce a proposal as early as this week for new mileage standards for heavy-duty vehicles beginning in the 2014 model year. Separately, the administration is readying new fuel economy standards for light-duty vehicles in the 2017 model year and beyond, after tightening standards last year for 2012 through 2016 models. The new standards would make it likely that technologies used in cars -- aerodynamic bodies, low-rolling-resistance tires, variable valve timing and hybrid electric propulsion -- would be introduced in box trucks, garbage trucks, cement mixers, school buses and tractor-trailers."
Adorable animals being adorable interlude: A wallaby takes its first hop.
McDonald's is threatening to drop health coverage because of health care reform: http://bit.ly/cQjfVX
The Postal Service is close to bankrupt, reports Ed O'Keefe: "Americans can still send and receive mail, but the U.S. Postal Service may not have much left in the bank after this week, as it's set to announce billions of dollars in losses as early as Thursday. It's also waiting for postal regulators to announce Thursday whether they approve of a proposed 5.6 percent postage-rate increase, to start in January. The proposed increase faces stiff resistance from business groups and lawmakers, who say that the USPS should instead make deeper spending cuts to meet its financial obligations."
Congressional Democrats will keep pushing immigration reform until the midterms: http://politi.co/a3ycIv
For-profit ed backers are organizing in DC, reports Nick Anderson: "Several hundred students and others connected with for-profit colleges and trade schools rallied Wednesday at the foot of Capitol Hill to protest a federal proposal to tighten regulation of career-education programs...The rally, organized by the Association of Private Sector Colleges and Universities, showed anew that the administration's proposal has put a rare spotlight on a fast-growing sector of higher education often overshadowed by public and nonprofit colleges."
Wealth consumers are buying more fast food: http://bit.ly/bhbtVY
Waiting for Superman dangerously villainizes teachers, writes Diane Ravitch: "The claim that teachers can be accurately evaluated by student test scores has been refuted again and again by scholars. The Economic Policy Institute released a statement by many of the nation's leading testing experts warning that this method was riddled with error and instability. A study released days ago by Sean Corcoran of New York University showed that a teacher who was ranked at the 43rd percentile, using student test scores, might actually be at the 15th percentile or the 71st percentile because the margin of error in this methodology is so large."
Closing credits: Wonkbook compiled with help from Dylan Matthews and Mike Shepard. Photo credit: White HOuse
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