Wonkbook: Obama's 2011 Budget (slightly) delayed; earmarkers become lettermarkers; corporations are buying each other rather than hiring workers
Obama's budget has been delayed a week, reports Jonathan Weisman: "President Barack Obama's budget proposal for fiscal 2012 will be released in mid-February, a little more than a week after its planned release date. The administration is scrambling to assemble what could be a pivotal document following a six-week delay in the confirmation of the White House's new budget director, a senior administration official said Monday. The budget's release date will be pushed back from Monday, Feb. 7, to some time the following week, the official said. The White House's new budget director, Jacob Lew, saw his confirmation put on hold by Louisiana Democratic Sen. Mary Landrieu, who was protesting the administration's moratorium on offshore oil drilling. Mr. Lew was confirmed Nov. 19."
Members of Congress are finding ways besides earmarks to fund pork projects, reports Ron Nixon: "Lettermarking, which takes place outside the Congressional appropriations process, is one of the many ways that legislators who support a ban on earmarks try to direct money back home. In phonemarking, a lawmaker calls an agency to request financing for a project. More indirectly, members of Congress make use of what are known as soft earmarks, which involve making suggestions about where money should be directed, instead of explicitly instructing agencies to finance a project. Members also push for increases in financing of certain accounts in a federal agency’s budget and then forcefully request that the agency spend the money on the members’ pet project. Because all these methods sidestep the regular legislative process, the number of times they are used and the money involved are even harder to track than with regular earmarks.
Real talk: The move from earmarking to lettermarking, phonemarking, hearingmarking, etc, wasn't just predictable. It was inevitable. And make no mistake: Within three-to-five years, we're likely to be back to earmarking as well.
Corporations are using their cash supplies to fuel mergers, not job growth, reports Jia Lynn Yang: "The volume of global mergers this year rose 19 percent, according to Dealogic, ticking up for the first time since 2007 as firms looked for ways to deploy the record amount of cash sitting on their balance sheets...Conditions are ripe for a comeback in mergers and acquisitions because U.S. companies are holding a record nearly $2 trillion in cash. They have been hesitant to use these massive piles of funds to hire as they wait to see whether the economic recovery picks up more speed. Instead, this year they've been making safer bets: buying back stocks to help boost their share prices and spending money on modestly sized mergers."
Fuzz-pop interlude: Wavves plays "King of the Beach".
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Still to come: Foreign banks benefited from a Federal Reserve program; being unemployed is bad for your health; Obama's federal pay freeze is being extended to more civil service workers; the incoming House Energy and Commerce chair outlines his plan to derail the EPA's climate regulations; and a genetically engineered singing mouse.
The Obama administration is cracking down on banks that are delinquent on their TARP payments, reports Zachary Goldfarb: "The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of their boards. The moves come as the number of banks that failed to make at least one dividend payment to the government rose to 132 in the last quarter. These 'deadbeats,' as they are sometimes called, are virtually all community lenders and collectively received billions of dollars in taxpayer assistance. In addition to those firms, seven others have failed, resulting in the total loss of the government's investment."
Looking for a rigorous overview of the various methodological difficulties involved in assessing stimulus proposals? Alan Auerbach, William Gale, and Benjamin Harris have you covered (pdf).
Non-US banks have benefited from Federal Reserve credit, report Robin Harding, Bernard Simon, and Christian Oliver: "Some of the world’s strongest banks have profited from an emergency credit facility set up by the US Federal Reserve to shore up confidence in the global financial system, according to a Financial Times analysis of data released by the Fed. More than half of lending under the Fed’s term auction facility - the largest of its crisis programmes - went to foreign banks. Details of the varied uses to which they put it may add to political criticism of the Fed. The Taf was set up in December 2007 to provide one-month loans to creditworthy banks as markets dried up for lending longer than overnight. In August 2008, it began offering three-month loans as well."
A new study suggests startups are central to job growth: http://on.wsj.com/fDs2eV
There's much Obama could do for the economy that wouldn't require congressional approval, write Paul Krugman and Robin Wells: "Democrats could pressure the administration to fix the inexcusable mess at the HAMP (mortgage modification) program--a program whose Kafkaesque complexity has in many cases made matters so bad for home owners that it has triggered the foreclosures it was supposed to avoid. In addition, mortgage relief would benefit the wider economy. Furthermore, the scope of mortgage relief could be made much wider if Fannie Mae and Freddie Mac were used to guarantee mortgage refinancing. Other proposals go even further: for example, that Fannie and Freddie engineer reductions in mortgage principals. All of this could be done, conceivably, by executive order."
Prizes for spurring innovation work, writes Annie Lowrey: http://slate.me/dFXZgh
A survey of jobless workers shows the extent of their suffering, writes Bob Herbert: "More than 15 million Americans are officially classified as jobless. The professors, at the John J. Heldrich Center for Workforce Development at Rutgers, have been following their representative sample of workers since the summer of 2009. The report on their latest survey, just out this month, is titled: 'The Shattered American Dream: Unemployed Workers Lose Ground, Hope, and Faith in Their Futures.' Over the 15 months that the surveys have been conducted, just one-quarter of the workers have found full-time jobs, nearly all of them for less pay and with fewer or no benefits. 'For those who remain unemployed,' the report says, 'the cupboard has long been bare.'
The American political system is corrupted in favor of the upper classes, writes Jeffrey Sachs: http://bit.ly/icPQdh
Extreme sports interlude: Russian-style bungee jumping.
Enrollment is lower and costs higher than expected in health care reform's high-risk pools, reports Amy Goldstein: "An early feature of the new health-care law that allows people who are already sick to get insurance to cover their medical costs isn't attracting as many customers as expected. In the meantime, in at least a few states, claims for medical care covered by the 'high-risk pools' are proving very costly, and it is an open question whether the $5 billion allotted by Congress to start up the plans will be sufficient... According to some health-policy researchers, the success or failure of the pools also could foreshadow the complexities of making broader changes in health insurance by 2014, when states are to open new marketplaces - or exchanges - for Americans to buy coverage individually or in small groups."
Real talk: High-risk health-care pools never work very well. The Democrats knew that when they rejected Republican plans that would've put them at the center of the health-care system for sick individuals. Then, of course, they turned around and made them one of health-care reform's early deliverables. I'm skeptical of arguments that say they "foreshadow" larger market reforms, which work very differently than segregating a tiny fraction of sick patients in state-run insurance programs.
Unemployment could cause serious health damage, reports David Wessel: "A new National Bureau of Economic Research paper suggests that increases in unemployment lead to a decrease in fruit and vegetable consumption, with potentially long-lived effects on workers’ health. 'Among those who are predicted to be at the highest risk of unemployment, a one percentage point increase in the resident’s state unemployment rate is associated with a 2% to 4% reduction in the frequency of fruits and vegetable consumption, and an 8% reduction in the consumption of salad,' economists Dhaval Dave of Bentley University in Waltham, Mass., and Inas Rashad Kelly of Queens College in Flushing, N.Y, said...Research by Daniel Sullivan and Till von Wachter finds that mortality rates in the year following a layoff among high-seniority male workers increases sharply."
The White House denies its new regulation on end-of-life care represents a policy change: http://politi.co/gkMbRZ
The federal pay freeze is being extended to more civil servants, reports Lisa Rein: "The two-year pay freeze that is now law for federal employees on the pay scale known as the General Schedule will also apply to hundreds of thousands of civil servants whose wages are set under a separate salary system, according to an executive order signed last week by President Obama. Employees covered by the so-called Administratively Determined pay scale - not legislated by Congress but set by federal agencies - make up about 30 percent of the workforce of 2 million. They include public health doctors and nurses, medical personnel in the Veterans Affairs system, administrative law judges and attorneys, auditors and other staff at financial agencies such as the Securities and Exchange Commission."
Nobelist James Heckman is urging early childhood education as a path toward economic growth, reports James Warren: " James J. Heckman, who has won the Nobel in economic science, offered a provocative idea for reducing spiraling budget deficits and strengthening the economy: investing in early childhood development. Mr. Heckman marshals ample data to suggest that better teaching, higher standards, smaller classrooms and more Internet access 'have less impact than we think,' as he put it at the Spertus Institute. To focus as intently as we do on the kindergarten to high school years misses how 'the accident of birth is the greatest source of inequality,' he said. He urges more effectively educating children before they step into a classroom where, as Chicago teachers tell me, they often are clueless about letters, numbers and colors -- and lack the attentiveness and persistence to ever catch up."
Public universities are getting creative about tuition fees: http://on.wsj.com/ifgrV1
Obama should push for Social Security reform, writes Michael Gerson: "Obama's liberal base contends that the Social Security trust fund is not in immediate trouble. But this argument depends on an elaborate accounting trick. The trust fund is not filled with assets - gold bullion and Apple stock. It is filled with debt issued by the government to itself. The surpluses of the trust fund are in fact liabilities for the government as a whole. And these illusory surpluses are regularly used to subsidize the rest of the budget. The scheme begins to collapse in 2037, when promised benefits for Social Security recipients will suddenly drop by about 25 percent - unless the system is reformed...Obama's urgent political need is to polish his image among Independents on spending and debt."
Fun with genetic alterations interlude: Scientists create a singing mouse.
Congress should stop the EPA from regulating carbon emissions, write House Energy and Commerce chair Fred Upton and Todd Phillips: "The best solution is for Congress to overturn the EPA's proposed greenhouse gas regulations outright. If Democrats refuse to join Republicans in doing so, then they should at least join a sensible bipartisan compromise to mandate that the EPA delay its regulations until the courts complete their examination of the agency's endangerment finding and proposed rules. Like the plaintiffs, we have significant doubt that EPA regulations can survive judicial scrutiny. And the worst of all possible outcomes would be the EPA initiating a regulatory regime that is then struck down by the courts."
The EPA is well within its rights to regulate carbon emissions, writes Brad Plumer: "Over at The Atlantic, Conor Friedersdorf thinks the EPA is 'disregarding [the] separation of powers.' But why? How? The Clean Air Act is a law that was passed by Congress and amended several times. The law originally focused on specific toxins like lead and sulfur-dioxide, but it was intended to be updated periodically, as new science on pollution and human health came in. The Supreme Court ruled that greenhouse gases fit within this framework--and, so, the Obama administration has begun enforcing the relevant laws. Set aside whether you agree with the policy outcome. What about this is constitutionally troubling?"
The Department of Energy is circulating a "list of accomplishments" from the past year: http://bit.ly/gbQFTh
Sen. Jay Rockefeller is challenging the administration on mine safety, reports Andrew Restuccia: "Sen. Jay Rockefeller (D-W.Va.) is raising questions about whether the federal agency charged with mining safety is adequately funded. In a letter to Labor Secretary Hilda Solis, Rockefeller said he is concerned that the Senate’s inability to pass an omnibus spending bill that would have increased funding for mine safety could 'undermine the progress that is being made and further limit MSHA's [Mine Safety and Health Administration] ability to fulfill its mission.' Instead of the broad omnibus spending bill, the Senate passed a narrow continuing resolution that largely funds the government at current levels until March."
John Tierney makes the case for optimism about the world's energy supply: http://nyti.ms/fKyVGN
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams. Photo credit: White House.
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