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Wonkbook: DeMint wins major internal battle; unemployment benefits might expire for 2 mil; anti-reform congressman wants his gov-provided health care now

By Ezra Klein

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Last week, Politico reported that Mitch McConnell was quietly meeting with incoming senators to talk them out of banning earmarks. "Eliminating earmarks would effectively cede Congress’ spending authority to the White House while not making a real dent in the $1 trillion-plus budget deficit," he argued. That pitted him in opposition to Jim DeMint and the Tea Parties, both of whom had made the elimination of earmarks a central priority.

Yesterday, McConnell waved the white flag. "Make no mistake," he said. "I know the good that has come from the projects I have helped support throughout my state. I don’t apologize for them." But "unless people like me show the American people that we’re willing to follow through on small or even symbolic things, we risk losing them on our broader efforts to cut spending and rein in government."

The big news here is not earmarks, however, which are, as McConnell says, "small or even symbolic things," but the glimpse into the dynamics of the incoming Republican legislators. Jim DeMint and the conservative base hold a lot of influence. At this point, it's not yet clear that McConnell and the Republican establishment -- many of whom were defeated in primaries over the course of the election -- can counter them. Some have warned that will lead to civil war in the Republican Party, but it could also lead to an exhausted capitulation by the old guard -- much as we saw from McConnell yesterday. If that happens, if the moderating influence of the veterans is not just rejected but actively extinguished, we're going to see a much more ideologically hardline and legislatively unpredictable Republican Conference than most have been predicting.

Welcome to Wonkbook.

Top Stories

Mitch McConnell announces he will reluctantly support a Republican moratorium on earmarks: "Make no mistake. I know the good that has come from the projects I have helped support throughout my state. I don’t apologize for them. But there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the waste and the out-of-control spending that every Republican in Washington is determined to fight. And unless people like me show the American people that we’re willing to follow through on small or even symbolic things, we risk losing them on our broader efforts to cut spending and rein in government."

"With Republican leaders in Congress united, the attention now turns to the President. We have said we are willing to give up discretion; now we’ll see how he handles spending decisions. And if the president ends up with total discretion over spending, we will see even more clearly where his priorities lie. We already saw the administration’s priorities in a Stimulus bill that’s become synonymous with wasteful spending, that borrowed nearly $1 trillion for administration earmarks like turtle tunnels, a sidewalk that lead to a ditch, and research on voter perceptions of the bill."

Obama applauds: http://bit.ly/cGx1mw

Congress might fail to extend unemploiyment benefits during the lame duck, throwing two million people off the rolls, report Janet Hook and Sara Murray: "Congress is unlikely to agree to extend jobless benefits for two million unemployed workers by the time the program begins to lapse in two weeks...The patchwork nature of jobless-benefits system means the impact of a lapse would roll slowly through the ranks of the unemployed. Without an extension, jobless workers in most states would receive a maximum of 26 weeks of benefits through their regular state programs. A separate state-federal program, currently 100% federally funded, offered another 13 to 20 weeks of benefits to workers in high unemployment states. Some 800,000 workers in those programs would be quickly cut off. Another 1.2 million jobless Americans would stop receiving benefits by the end of December. "

Democrats are making a terrible mess of the fight over the Bush tax cuts, writes Ezra Klein: http://wapo.st/aeNgtT

An anti-health care reform Congressman-elect is demanding his health benefits early, reports Glenn Thrush: "Republican Andy Harris, an anesthesiologist who defeated freshman Democrat Frank Kratovil on Maryland’s Eastern Shore, reacted incredulously when informed that federal law mandated that his government-subsidized health care policy would take effect on Feb. 1 - 28 days after his Jan. 3rd swearing-in. 'He stood up and asked the two ladies who were answering questions why it had to take so long, what he would do without 28 days of health care,' said a congressional staffer who saw the exchange. The benefits session, held behind closed doors, drew about 250 freshman members, staffers and family members to the Capitol Visitors Center auditorium late Monday morning."

Live indie interlude: Yeah Yeah Yeahs play "Rockers to Swallow".

Still to come: Bond interest rates have increased since quantitative easing has begun; legislators push for DREAM vote in lame-duck; a resolution blocking EPA action on climate change may also get a lame-duck vote; and a cat intimidates an alligator.

Economy

The Congressional Oversight Panel will release a report urging action on the foreclosure crisis, report Brady Dennis and Ariana Eunjung Cha: "It's unclear what new measure could pass in a politically divided Congress, but some ideas under consideration could broadly reshape the mortgage industry. Some lawmakers want to resurrect legislation that would give bankruptcy judges the power to order lenders to reduce the principal that homeowners owe. Others are pushing for some big banks to spin off their mortgage-servicing arms to avoid conflicts of interest. There's also discussion of the federal government replacing the industry's current system for tracking mortgages with one that would be subject to federal regulation."

The Federal Housing Administration is stabilizing financially: http://on.wsj.com/cAjwMg

Bond interest rates have only increased since quantitative easing was announced, reports Michael Mackenzie: "On Monday the benchmark 10-year bond yield traded at a three-month high of 2.95 per cent, well above the low of 2.46 per cent it touched soon after the Fed announced its move. Many bond market dealers had expected yields to fall towards 2 per cent. The Treasury bond market will be an important gauge of the Fed’s success in its attempt to revive the US economy. The central bank is hoping that its plans to buy $105bn of Treasuries each month until well into next year will cause long-term interest rates to fall, encouraging households and businesses to spend. A sustained rise in yields, therefore, could be a serious cause for concern."

Conservative economists are circulating a letter attacking quantitative easing, reports Jeannine Aversa: http://wapo.st/bvhXnW

Almost half of the deficit could be cut through a few tax hikes for the rich, writes David Leonhardt: http://nyti.ms/cjudGQ

Conservatives should embrace the Bowles-Simpson commission's tax recommendations, writes Glenn Hubbard: "When I left my job as the deputy assistant Treasury secretary for tax policy in 1993, I left a message on my office blackboard for my successor. I wrote, 'Broaden the base, lower the rates' repeatedly until I filled the entire space. I then had it covered with wax so it could not be erased. (Yes, the government charged me for my bit of vandalism. But it was worth it.) The Bowles-Simpson report seems to have taken that message to heart, recognizing that when we provide tax advantages to spur certain types of spending -- with, say, a deduction for interest payments on home mortgages -- we in turn require higher marginal tax rates to raise offsetting revenue."

Adorable animals besting terrifying animals interlude: A cat fends off an alligator.

Health Care

Republican senators can't wait to get their hands on CMS director Don Berwick later today, reports Sarah Kliff: "Senate Republicans with whom POLITICO spoke said observers may expect versions of five basic questions on Wednesday: You’ve previously professed your “love” for Britain’s National Health Service, admitting to being 'romantic' about the nationalized system. What role did you play in shaping that system, and do you still see it as an 'example' for the United States to follow?"

America should follow Europe's lead and have individuals pay more for care, writes Anne Applebaum: http://wapo.st/aqCiUw

Domestic Policy

Some legislators want the White House to push the DREAM Act during the lame duck session, reports Simmi Aujla: "Sen. Robert Menendez (D-N.J.), Rep. Nydia Velasquez (D-N.Y.) and Rep. Luis Gutierrez (D-Ill.) will meet with President Barack Obama Tuesday afternoon to talk about the chances of getting comprehensive immigration reform or the DREAM Act passed in the lame duck session, a House Democratic source said. Immigration advocates want to know how much the White House supports a vote on either bill in the next few weeks. Menendez said on a conference call with reporters Monday that the White House is 'ready and willing' to talk about immigration. House Speaker Nancy Pelosi (D-Calif.) could bring the DREAM Act to the floor as early as this week."

Illegal immigrants in California can now pay in-state tuition: http://on.wsj.com/9E3rbD

House Republicans are also cracking down on earmarks, reports Jake Sherman: "House Republicans have been far more stringent than their Senate counterparts on earmarking. Boehner, House Minority Whip Eric Cantor (R-Va.) and Republican Conference Chairman Mike Pence (Ind.) led a charge to institute a moratorium on member directed spending earlier this Congress. And last Friday, Cantor and Boehner called on President Barack Obama to 'veto any spending measure this year or next that includes earmarks.' Cantor issued a statement of his own support, upping the pressure on Obama."

The organization that accredits education schools is calling for a overhaul of teacher training, reports Stephanie Banchero: "The panel said local school districts should work more closely with higher-education officials to train student teachers and assess whether they are actually helping students learn. In most states, candidates spend only about 10 to 12 weeks observing teachers or student-teaching themselves, with the bulk of their time spent listening to college lectures. The nation's colleges of education are a patchwork of programs which vary in quality. Each state sets its own admissions, graduation and licensing requirements, and teacher candidates aren't required to graduate from nationally accredited programs."

17 million Americans struggled to eat last year: http://wapo.st/dyT9fp

Bowles-Simpson's Social Security proposals are sensible, writes Peter Orszag: "If Congress were to take all four of these recommended steps, it could not only eliminate the long-term deficit in Social Security but also make the system much more progressive. Even compared with the benefits promised by the current system, the recommended benefits for the poorest 20 percent of recipients would increase by about 5 percent, while those for the wealthiest retirees would fall by almost 20 percent. Furthermore, the plan would not create private accounts within Social Security -- the most controversial issue that came up when reform was last debated in 2005. Why not lock in a reform when private accounts are off the table?"

One hundred thousand points for Gryffindor interlude: Daniel Radcliffe sings Tom Lehrer's "The Elements" from memory.

Energy

Sen. Jay Rockefeller's resolution blocking EPA climate action may get a lame-duck vote, reports Darren Samuelsohn: "Reid promised the West Virginia Democrat a vote on his EPA proposal earlier this summer, but it’s unclear whether there is time for the controversial bill during the end-of-year session already packed with contentious items. 'He said he would [allow a vote] and I think he will,' Rockefeller told reporters on Monday. 'The question lies not so much in him, but in the word 'opportunity.''...EPA's climate rules kick in Jan. 2 and require regulated sources to install pollution controls to win permits from state and local regulators."

Tom Harkin may block a pro-electric vehicle bill if it does not include support for ethanol: http://bit.ly/bOW6uL

The Obama administration will reallocate high speed rail funds from states that reject them, reports Michael Bolden: "Ohio Gov.-elect John Kasich (R)asked the Obama administration for permission to repurpose $400 million in high-speed rail funds for highway projects. Kasich says Ohio doesn't need the project. But LaHood said Ohio would forfeit the money it doesn't use for high-speed rail... LaHood recently announced awards of $2.4 billion for high-speed rail projects in 23 states, including $45.4 million for Virginia to help fund studies and preliminary engineering in order to improve service between Richmond and Washington. It was the second round of awards, as the administration previously distributed $8 billion in stimulus money for high-speed rail projects."

Fewer than ten percent of articles about last year's Copenhagen conference focused on climate science: http://wapo.st/bMj3pa

Unions and environmentalists are still pushing for lame duck passage of a renewable energy standard, reports Andrew Restuccia: "The Blue Green Alliance -- which includes among its membership the United Steelworkers, the United Autoworkers and the Union of Concerned Scientists -- said passage of an RES is an essential step in creating new jobs and encouraging the development of clean energy technology...Senate Majority Leader Harry Reid (D-Nev.) and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) talked last week about moving a renewable energy standard during the lame-duck session. But according to a senior Senate aide with knowledge of the conversation, it appears that Reid decided there isn’t enough support to do so."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: Mark Wilson Photo

By Ezra Klein  | November 16, 2010; 6:38 AM ET
Categories:  Wonkbook  
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Next: GOP legislator frets over 28 days without insurance -- but what about 30 million he'd leave uninsured?

Comments

"On Monday the benchmark 10-year bond yield traded at a three-month high of 2.95 per cent, well above the low of 2.46 per cent it touched soon after the Fed announced its move. Many bond market dealers had expected yields to fall towards 2 per cent. The Treasury bond market will be an important gauge of the Fed’s success in its attempt to revive the US economy. The central bank is hoping that its plans to buy $105bn of Treasuries each month until well into next year will cause long-term interest rates to fall, encouraging households and businesses to spend. A sustained rise in yields, therefore, could be a serious cause for concern."

If long term interest rates fall, that means that the market expects lower inflation and/or a lower real interest rate (i.e. the failure of QE).

Strong recoveries and expansions tend to see rising yields (look at the 10 year yields over the past cycle).

Now granted, those rising yields might just mean treasury investors are switching over to things like oil and gold, which wouldn't be great, but rising yields are consistent with successful QE2.

Posted by: justin84 | November 16, 2010 9:50 AM | Report abuse

"17 million Americans struggled to eat last year:"

The article refers to 17 million households, suggesting several times as many Americans.

We have 18 federally funded programs (as of 2008) to improve nutrition and fight hunger. Still more state and local programs. The result? 1/6 households still manages to experience food insecurity. Unbelievable.

http://www.gao.gov/products/GAO-10-346

Posted by: justin84 | November 16, 2010 10:56 AM | Report abuse

EK:

Thoughts:

Isn't providing a link to yourself in your column the kind of thing that Christine O'Donnell says that God doesn't want you to do?


"On Monday the benchmark 10-year bond yield traded at a three-month high of 2.95 per cent, well above the low of 2.46 per cent it touched soon after the Fed announced its move. Many bond market dealers had expected yields to fall towards 2 per cent"

Not really, I told you to go short Treasuries a few weeks ago.


"Some legislators want the White House to push the DREAM Act during the lame duck session, reports Simmi Aujla:"

If Obama wants to simply end his re-election chances right now, this would be a great way to do it! (and this is coming from someone who favors some type of amnesty for illegals, just not this abomination)

"Tom Harkin may block a pro-electric vehicle bill if it does not include support for ethanol: http://bit.ly/bOW6uL"

Stop me if you've heard this one before. So what did the one boodndoggle say to the other when they met on the street . . . ?


"The Obama administration will reallocate high speed rail funds from states that reject them, reports Michael Bolden"


Ok, how about this one. Three boondoggles go into a bar . . .?


"Unions and environmentalists are still pushing for lame duck passage of a renewable energy standard, reports Andrew Restuccia"


Oh you mean the thing that makes public ultilities buy energy from wind and solar producers at prices about 75% above market? Yes, let's do that because Boone Pickens doesn't have anywhere near enough money, and neither do the Chinese who will benefit most.

Posted by: 54465446 | November 16, 2010 11:03 AM | Report abuse

Ezra, can you interview Republican Andy Harris so that we can understand more how it is okay for common people to live without any insurance whereas it is not ok for a representative to stay without it for few days.

Is this any 'teachable moment'?

Can your newspaper put this news on the front page?

Can President Obama talks about this in his Press Conference?

Ezra, at the end of the day it is the job all others to keep exposing this vanity which is going on. Glenn Thrush did his part.

Posted by: umesh409 | November 16, 2010 11:31 AM | Report abuse

From the NY Times two days ago to explain my remarks about the renewable energy standard:

"The $39 billion solar industry is no exception to a broad trend in which lower cost Asian rivals eat away at the market shares of European and U.S. companies that usually operate with higher labor costs.

Asian makers own about half of the German market for solar modules, by far the world’s biggest, as they offer products at a discount of 10 percent to 20, percent compared with their European peers.

Large subsidies, so called feed-in tariffs, have made Germany, which has the biggest European economy, the world’s largest solar market, creating 83,000 jobs in the eastern part of the country, which has otherwise suffered an exodus of young, educated people."


Also this from Minnesota Public Radio about the closing of a plant making wind trubines there:


"We made a big deal a couple weeks ago about an in-depth analysis by the Federal Reserve Bank of Minneapolis throwing cold water on the idea that "green jobs" will drive the new economy.

Among its points the Fed waived off a Minnesota 2020 report claiming that if done right, the wind industry "can create thousands of jobs, [and] revive the economic base of many Minnesota communities hit hard by the recession."

It doesn't work that way, Fed writer Ron Wirtz wrote: "As a job creator, wind power doesn't pack much punch...."

Xcel Energy has the most wind-generated power of any utility in the country, yet "it's really hard to quantify" the effect of the green movement specifically on company employment, said Beth Chacone, environmental policy manager for Xcel. "I know [the green economy] gets a lot of press, but we're not sure there is job creation."


This from Climate Progress, supposedly the leading climate change blog according to Time:

"Danish wind turbine manufacturer Vestas has today announced 3000 job cuts and the closure of five plants, in response to a slowdown in demand in the US and policy uncertainty in other key markets.

The company, which is the world’s biggest wind turbine maker, posted a smaller-than-expected drop in third-quarter profits, but said markets in Europe would not live up to its expectations next year, sending its shares down seven per cent on Tuesday.

Speaking about the market conditions in an interview with Reuters, Vestas’ executive director Ditlev Engel, said that indebted European governments are not investing in new energy projects, which has delayed recovery. “A lot of countries are facing a challenging 2011 in terms of budget deficits and other financial issues. It is a hard time to see a lot of activity in this area compared to what we had initially expected,” said Engel."


So a renewable energy standars is just what we need to revive yet another moribund industry, . . . in China that is.

Posted by: 54465446 | November 16, 2010 12:06 PM | Report abuse

If they don't extend unemployment extension, here is my plan B:


http://www.extraincome101.net

Posted by: quisqueyo1 | November 16, 2010 7:47 PM | Report abuse

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