Wonkbook: Occupy the Senate!

Remember last week's abrupt change to the Senate's rules? This morning, Senate Majority Leader Harry Reid has an op-ed explaining what he feels happened, and why.

A few dozen Occupy DC protesters crowd the McPherson Square Park in Washington, D.C. on October 10, 2011. (Marvin Joseph - WASHINGTON POST)

(Photos: Occupy Wall Street protests continue)

"Democrats," he writes, "have one overriding objective this Congress: to create jobs and get our economy back on track. But our Republican colleagues are so dead set on preventing Democrats from passing job-creating legislation that they have been willing to abuse the rules of the Senate to grind the chamber to a halt." This came to a head, Reid says, as the Senate tried to move to a final vote on a bill addressing China's currency manipulation -- a bill that had already broken the filibuster.

"We offered votes on four amendments, and they wanted five. We offered five votes, and they wanted six. Finally, we offered votes on seven amendments, including a vote on an outdated version of President Obama’s American Jobs Act, with which Republicans were seeking to score political points. Still, Republicans refused. They came back with a demand for nine votes that required suspending the Senate’s rules. The same logic that allows for nine unstoppable motions to suspend the rules could lead to consideration of 99 such motions."

"The Republicans used a new stall tactic last week, one that is used infrequently in the history of the Senate. It was an attempt to make cloture meaningless — to say that the road to passage must include a vote-a-rama of unrelated, purely political votes. This is the practice we voted to change. The precedent we set merely returns the Senate to the regular order and only affects the ability of the minority to obstruct and delay after more than 60 senators have voted to end discussion. Now, 60 votes to end debate will mean debate actually ends, as the rules of the Senate intended."

I quote the op-ed at length for two reasons: First, Senate dysfunction is among the most pressing issues facing the country. Though there is a tendency to report on each stymied piece of legislation as a special snowflake that melted for its own unique reasons, it's quite often the case, particularly in times of unified government, that the explanation for why, say, climate bills are bottled up is the same as the explanation for why unemployment benefits are lagging. And that explanation is minority obstruction driven by party discipline in the Senate. We have many pressing policy problems, but we can't solve them until we overcome our many pressing procedural problems.

Second, Reid's op-ed is curious for the mismatch between his urgent call for Senate reform and his utter unwillingness to do anything about it. If job-creating bills are such an "overriding priority," and "the minority party has abused its right to debate and delay," and their actions have "twice nearly shut down the government and forced our nation to the brink of default for the first time in its history," that would seem to imply a larger rethink of Senate procedures than the very limited change he has offered and is defending here.

Right now, of course, Senate dysfunction is not having a big impact on anything save nominations. The key question is not whether Senate Democrats and Senate Republicans agree, but whether Senate Democrats and House Republicans agree. That actually eases pressure on the two parties in the Senate, and makes this an excellent time to reconsider the rules of the Senate on a bipartisan basis.

It could work like this: representatives of the two parties could meet to decide how to streamline the Senate so that in times when the American people have made their party preference clear, the people they elected to govern can actually give governance a shot. That means they can pass bils, clear nominations, and generally govern in a way that tries to address America's problems until the American people decide they don't like the results of that party's governance, rather than until the American people decide they don't like the results of congressional gridlock.

They can agree to usher these rules into effect in six years, at which point neither party knows who will control the House, the Senate, or the White House, so both parties will have to consider the question from both the majority and minority's point of view. Is this likely? Of course not. Jamie Dimon will head to Zuccotti Park and join the drum circle before a majority of senators agree to give up their individual powers of obstruction so that the country can be governed effectively. But if Senate dysfunction is truly as bad as Reid says it is -- and in my view, it's much, much worse -- stopping with the piddling rules change Democrats attempted last week is downright irresponsible.

Recent years have brought us closer and closer to a true blow-up over the Senate rules. There was Sen. Bill Frist's effort to end the judicial filibuster, last year's Democratic revolt -- which Reid effectively and proudly shut down -- over the filibuster, and now a late-night rules change. These are signs that the current equilibrium in the Senate is not sustainable, and it will eventually be changed. How much better to change it in a calm and rational way than amidst the heat of a bitter and polarizing legislative debate.

Top stories

1) The Senate will vote on the jobs bill tonight, reports Rosalind Helderman: "President Obama has used virtually every public appearance in recent weeks to demand an immediate congressional vote on his jobs plan. On Tuesday evening, he’ll get it, as the Democratic-controlled Senate plans to hold a procedural vote on whether to allow the $447 million American Jobs Act to move forward. But the vote, which could be the only one Congress will hold on the package as a whole, might do as much to put Democratic senators on the spot as it will to highlight the Republican obstructionism that Obama has blamed for blocking consideration of the package. There is little mystery about the vote’s outcome. Democrats hold 53 seats in the Senate, not enough to overcome unified GOP opposition and muster the 60 votes necessary to break a filibuster and send the package forward. Even if all Democrats vote for it. And all Democrats are unlikely to back it."

2) As a Plan B, Senate Dems are planning to go small, reports Manu Raju: "Democrats may not vote on President Barack Obama’s jobs bill just once. They could hold several votes on it, even though they know it’s going nowhere. But that’s just the public theater. Behind the scenes, Senate Democrats are trying to develop a Plan B: a series of smaller bills that actually have a chance of passing a badly divided Congress. For instance, New York Sen. Chuck Schumer (D-N.Y.) has been quietly courting some Senate Republicans and Democrats to see whether there is any appetite for merging a GOP-backed idea -- a tax holiday for corporations to bring home their overseas profits -- with a Democratic-supported plan of creating a national infrastructure bank. At the same time, Democrats are weighing whether to push ahead with other individual pieces of the president’s jobs plan, like its extension of the payroll tax cut."

3) Austerity is making it hard for Greece to reform, writes Michael Birnbaum: "Europe’s plans to help Greece avoid piling up another mountain of debt are straightforward enough on paper: Get the government to cut its spending, mainly by trimming the large public sector, and increase its revenue, mainly by collecting the taxes it already has in place. In practice, those goals require a fundamental overhaul of the Greek system, which would be difficult in the best of times and is proving torturous now. Plans to raise money by selling off state property have collided with a new tax on land that makes investors less interested in buying it. Efforts to curb rampant tax evasion are hampered by deep pay cuts for tax collectors. In the meantime, the country is close to running out of money. Europe is increasingly inclined to give up on much of Greece’s debt, which would relieve the pressure to reform but would have uncertain consequences for all the European economies."

4) High-profile Democrats are backing Occupy Wall Street, reports Eric Lichtblau: " Leading Democratic figures, including party fund-raisers and a top ally of President Obama, are embracing the spread of the anti-Wall Street protests in a clear sign that members of the Democratic establishment see the movement as a way to align disenchanted Americans with their party. The Democratic Congressional Campaign Committee, the party’s powerful House fund-raising arm, is circulating a petition seeking 100,000 party supporters to declare that 'I stand with the Occupy Wall Street protests.' The Center for American Progress, a liberal organization run by John D. Podesta, who helped lead Mr. Obama’s 2008 transition, credits the protests with tapping into pent-up anger over a political system that it says rewards the rich over the working class...The center has encouraged and sought to help coordinate protests in different cities."

5) Corporate job creation estimates are based on fuzzy math, report Steven Mufson and Jia Lynn Yang: "Oil companies aren’t the only ones promising jobs if Washington gives them their way. A wide array of businesses are saying they can help solve the country’s unemployment crisis if only the government would roll back some regulations, approve their big mergers or lower their taxes. Yet the industry often touts debatable jobs numbers. Mergers between big companies, for instance, tend to result in layoffs rather than new positions overall. And a closer look shows that API’s ads exaggerate the effect that looser drilling policies would have on employment; more than half of its projected job growth would come between 2015 and 2030. Nonetheless, some policymakers and presidential candidates have cited these statistics as they echo companies’ claims about creating jobs."

Top op-eds

1) Occupy Wall Street's solutions are too small, writes David Brooks: "If there is a core theme to the Occupy Wall Street movement, it is that the virtuous 99 percent of society is being cheated by the richest and greediest 1 percent. This is a theme that allows the people in the 99 percent to think very highly of themselves. All their problems are caused by the nefarious elite. Unfortunately, almost no problem can be productively conceived in this way. A group that divides the world between the pure 99 percent and the evil 1 percent will have nothing to say about education reform, Medicare reform, tax reform, wage stagnation or polarization. They will have nothing to say about the way Americans have overconsumed and overborrowed. These are problems that implicate a much broader swath of society than the top 1 percent. They will have no realistic proposal to reduce the debt or sustain the welfare state."

2) Senate Democrats' rule shift was a move toward comity, writes Harry Reid: "The Republicans used a new stall tactic last week, one that is used infrequently in the history of the Senate. It was an attempt to make cloture meaningless -- to say that the road to passage must include a vote-a-rama of unrelated, purely political votes. This is the practice we voted to change. The precedent we set merely returns the Senate to the regular order and only affects the ability of the minority to obstruct and delay after more than 60 senators have voted to end discussion. Now, 60 votes to end debate will mean debate actually ends, as the rules of the Senate intended. We restored the balance between individual rights and comity in the rules of the Senate...I hope Republicans will work with us to restore that balance in our larger political debate in the interest of finding practical, bipartisan solutions to put Americans back to work."

3) This year's economics Nobelists helped wrest macroeconomics from Keynes, writes Edward Glaeser: "While Friedman and Phelps grasped the failings of Keynesianism, they didn’t provide an alternative set of tools. And who could blame them? With macroeconomics, there are barriers to insight...Sargent and Sims tried to build something new from the wreckage of Keynesianism, and are being honored for their contributions to empirical work. Sargent was an early leader of a movement often labeled as 'rational expectations' macroeconomics, whose great contribution was to build macroeconomics from the ground up, starting with assumptions about individuals and firms and then examining the implications for the larger economy. That movement has become mainstream, partly due to the work of Sargent, who showed how to bring theory to data."

4) The proposed "Volcker rule" is quite good, writes Economics of Contempt: "In general, the proposed Volcker Rule appears to be very good: it’s a serious effort by a group of smart, market-savvy people to draw a workable distinction between market-making and proprietary trading. The regulators recognize the importance of both market-making and hedging, but they also recognize (most of) the places where market-making and hedging can bleed into proprietary trading. And in those situations, the regulators realize that any effort to distinguish impermissible prop trading from permissible market-making or hedging will -- quite appropriately -- require a very fact-intensive inquiry. That said, I’m still going to have to withhold my final judgment until I see the actual text of the proposed rule."

5) The China currency bill is Smoot-Hawley redux, writes Bob Corker: "The bill seeks to create U.S. jobs by imposing tariffs on imports from China in the amount that China undervalues its currency. The bill's actual effect, though, won't be to bring production from China to the U.S.--only to make the things that we buy from China more expensive. Why? Because China is unlikely to respond to a tariff on all imports by doing what we demand they do. More likely, China would retaliate with tariffs of its own and by cutting off business with U.S. companies...In 2010, the U.S. imported $365 billion worth of goods from China. This bill would potentially inflate the price U.S. consumers and businesses paid for those items by 20%-30%. That's about $60 billion-$100 billion in extra costs taken from the U.S. economy in the middle of a recession."

Music video interlude: Lana del Rey's "Video Games".

Got tips, additions, or comments? E-mail me.

Still to come: A look at this year's Nobel winners; progressives are thinking of state-level replacements for the individual mandate; a program for workers displaced by trade is set to be renewed by the House; oil and gas are seeing a worldwide boom; and a pug plays a keyboard.

Economy

Two Americans won the economics Nobel, reports Neil Irwin: "Two Americans were awarded the Nobel prize in economics Monday for their work that helped explain some of the mysteries of how government policy affects the economy. Thomas J. Sargent of New York University and Christopher A. Sims of Princeton University, both 68, were jointly awarded the $1.5 million prize for work that helped untangle the details of why economies respond the way they do to intervention by central banks or other government authorities. Their research, conducted separately, helped better explain the importance of people’s expectations for the workings of policy. For example, higher interest rates help reduce inflation not just through traditional channels like slowing down economic growth, but also by shifting peoples’ expectations of what the central bank will do in the future."

A roundup of Sargent and Sims' work: http://wapo.st/qjkuFw

Global regulators are standing up for new banking rules, reports Patrick Jenkins: "Global regulators insist the economic cost of implementing tough new rules on bank capital requirements will have only a tiny effect on global growth, with their latest estimate putting the impact at barely a tenth of the industry’s own projection. In an assessment of the impact of the Basel III rulebook published late on Monday, the Financial Stability Board and the Basel Committee on Banking Supervision, the two international oversight bodies, concluded that the reforms would only slow gross domestic product by 0.34 per cent at its peak over the eight-year period during which the rules are being implemented...A recent study by the Institute of International Finance, which represents most global banks, estimated that the new rules could bring global output down by 3.2 per cent by 2015 and lead to 7.5m fewer jobs being created."

Businesses need to create jobs or face a backlash, writes Gerald Seib: "The Federal Reserve has repeatedly fired its monetary cannon, with an impact that looks limited to the frightened worker. And, like the government generally, the Fed is about out of ammo. Which leaves the business community. On that front, there is a radical disconnect between the picture populist critics paint from outside, and the one business leaders describe from inside. The populist crowd sees American companies that have enough money to create jobs, but not in America. Indeed, in the 1990s, Commerce Department data show, American multinationals added 4.4 million jobs in the U.S. and 2.7 million abroad. But in the first decade of this century, they cut their work forces in the U.S. by 2.9 million, while increasing employment overseas by 2.4 million."

A new paper makes a great case for big infrastructure spending, writes Joe Nocera: "The title of the white paper is, admittedly, a mouthful: 'The Way Forward: Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.'...Its authors are Daniel Alpert, a managing partner of Westwood Capital; Robert Hockett, a professor of financial law at Cornell and a consultant to the New York Federal Reserve; and Nouriel Roubini, who is, well, Nouriel Roubini, whose consistently bearish views have been consistently right. It is scheduled to be released on Wednesday...Like most mainstream economists, Alpert, Hockett and Roubini roll their eyes at the calls for immediate government deficit reduction...Instead, they believe that this is perhaps the best time in recent history for the government to take on a sustained infrastructure program, lasting from five to seven years, to create jobs and demand."

Local news interlude: A woman gives birth right after completing a marathon.

Health Care

Progressives are organizing to replace the individual mandate at the state level, reports Jennifer Haberkorn: "A group of progressive state lawmakers from across the country is considering what can be done to encourage residents to buy insurance if the federal health reform law’s individual mandate is struck down by the Supreme Court. Lawmakers associated with the Progressive States Network are meeting next month in Baltimore with hopes of coming up with state-based legislation that could fill the void in the health care law. Those measures could range from state-based individual mandates -- like the one in Massachusetts -- to incentives for people to buy insurance on their own...The worry from a policy standpoint is that without the mandate, young and healthy people would have no incentive to buy coverage and join the insurance pools, which brings down rates for everyone."

Cancer testing isn't a no-brainer, writes Gil Welch: "When doctors screen for early cancer, all the incentives -- cultural, financial, professional and legal -- line up in one direction: Don’t miss it. As a result, doctors overreact to even the tiniest abnormalities, which leads to the two basic harms of screening: false-positive tests and overdiagnoses...It’s a matter of opinion to what extent patients with false-positive tests are losers -- the physical complications of biopsies are generally short-lived. But they certainly don’t benefit from the procedures. And in the interim, they’re made to worry that they have cancer...Patients who are overdiagnosed are the big losers here. They undergo surgery, radiation and chemotherapy unnecessarily. And then there are the associated complications: chemotherapy can cause nausea and radiation can burn normal tissue; breast surgery can be disfiguring, and prostate surgery can lead to bladder and sexual dysfunction."

Domestic Policy

Trade adjustment assistance is expected to pass the House, reports Russell Berman: "House Republicans expect to overcome conservative opposition this week and pass a worker assistance bill that has been the chief hurdle to completing a trio of bilateral trade agreements. Under an agreement with the Senate and the White House, House GOP leaders will call a vote on a renewal of Trade Adjustment Assistance (TAA) legislation on Wednesday, immediately after the House approves trade agreements with South Korea, Colombia and Panama. Extending TAA, which provides health insurance, worker training and other benefits to U.S. workers negatively affected by foreign trade, has been a Democratic priority, and the Obama administration for months refused to submit the three trade deals for congressional ratification without assurances from Republican leaders that the adjustment assistance would be renewed. The TAA program expired in February."

A food marketing guideline could get watered down, reports Dina ElBoghdady: "A federal proposal that would restrict the kinds of foods marketed to children may soon be substantially changed to address the concerns raised by the food and beverage industry, which has aggressively lobbied against the plan for months...a federal regulator deeply involved in developing the voluntary guidelines said the government is taking a 'fresh look' at its proposal and rethinking some of its most hotly contested aspects, including how it defines 'children.' The guidelines, designed to tackle childhood obesity, called on the industry to market to children only those foods and drinks that make a 'meaningful contribution' to a healthful diet and to limit sodium, fats and added sugars in products. Under the voluntary plan, foods that don’t meet the criteria should not be marketed to children. But since the plan was unveiled in May, the nation’s largest food makers, fast-food chains and media giants have railed against it."

Adorable animals being musically talented interlude: A pug plays a keyboard.

Energy

Oil and gas drilling are undergoing a worldwide boom, reports James Kanter: "Opportunities in oil and natural gas have rarely been so bountiful. New finds and technological advances and fresh access to some countries are pushing exploration and production into areas once considered peripheral. Some of the most promising new fields are in deep water off the coast of Brazil. Experts say they could yield as much oil as the North Sea. There have been significant strikes off the coast of French Guiana, north of Brazil, and off Ghana in West Africa. Iraq is opening up after years of sanctions and war. It could be a second Saudi Arabia. Russia is increasing production in its Arctic regions, while Canada is steadily producing more oil from its abundant tar sands. In the United States, the vast deposits of natural gas found in shale rock could transform the country into a major energy exporter."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.