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Wonkbook: Senate GOP blocks student loan plan

By Karl Singer,

Karl Singer is writing Wonkbook while Ezra is off.

J. Scott Applewhite


Clarise McCants of Philadelphia, a Howard University student, speaks at a news conference on student loans on May 8. She's flanked by Sen. Sherrod Brown (D-Ohio), left, and Sen. Jack Reed (D-R.I.).

Wonkbook dashboard:

RCP Obama vs. Romney: Obama +0.2%.

RCP Obama approval: 47.3%.

Top stories

1) Senate Republicans filibustered a student loan bill. "Senate Republicans on Tuesday blocked consideration of a Democratic bill to prevent the doubling of some student loan interest rates, leaving the legislation in limbo less than two months before rates on subsidized federal loans are set to shoot upward. Along party lines, the Senate voted 52 to 45 on a key procedural motion, failing to reach the 60 votes needed to begin debating the measure. Senator Olympia J. Snowe, the moderate Republican from Maine who is retiring, voted present...Republicans say they want to extend Democratic legislation passed in 2007 that temporarily reduced interest rates for low- and middle-income undergraduates who receive subsidized Stafford loans to 3.4 percent from 6.8 percent. But the Republicans would not accept the Senate Democrats’ proposal to pay for a one-year extension by changing a law that allows some wealthy taxpayers to avoid paying Social Security and Medicare taxes by classifying their pay as dividends, not cash income." Jonathan Weisman in The New York Times.

@RBReich: Showdown looming on student loans. Ds want to finance w tax hike on rich, Rs w cut in Obamacare. Prez campaign in miniature.

@sethdmichaels: also, 45>52. as usual.

2) Sen. Richard Lugar of Indiana loses GOP primary to Mourdock ."Republican Sen. Richard G. Lugar of Indiana, a 35-year member of the Senate and one of Washington’s leading experts on U.S. foreign policy, lost his bid for reelection Tuesday after a conservative backlash inside the GOP denied him his party’s nomination for a seventh term. Lugar’s loss — the first for a senator this year — appears to be another victory for the tea party conservatives who roiled the Republican Party in 2010 when they defeated two GOP senators in primaries and knocked off several more establishment favorites in open Senate primaries." Paul Kane in The Washington Post.

3) The start of the highway bill negotiations dealt a blow to House GOP hopes. "It was a conservative Oklahoma Republican who told the House GOP not to even start. At the beginning of Tuesday’s conference committee negotiations on a transportation reauthorization bill, Sen. James Inhofe threw cold water on any hopes House Republicans had that their Senate colleagues would put up a fight with Democrats on the long-delayed bill, lecturing conservatives from the House on the art of compromise. House Republicans came into the meeting hoping to use Speaker John Boehner’s (Ohio) sweeping reform to transportation programs as their negotiating position -- despite the fact that Boehner was unable to pass that measure and the highway bill that finally did pass the House did not include most of those reforms...But Inhofe, one of the most conservative lawmakers on the Hill and the ranking member of the Senate Environment and Public Works Committee, made it clear early he would not be backing the play." John Stanton in Roll Call.

@AndrewRestuccia: Inhofe on transp bill: "Having been ranked as the most conservative [lawmaker] many times, the conservative position is to pass this thing."

4) Job openings rose in March. "U.S. job openings rose in March, a sign that employers gained confidence heading into the spring. The nation had 3.74 million job vacancies at the end of March, about 5% higher than February and the highest level since July 2008, the Labor Department said Tuesday. The rise was driven in part by growing demand for workers in construction and manufacturing. The rate of hiring, however, was flat--and the government's broader report on unemployment, released last week, showed that the pace of hiring has slowed since March...Federal Reserve Bank of Richmond President Jeffrey Lacker said Tuesday that the skills mismatch could lead the economy's long-term, or natural, unemployment rate to be higher than what economists now project, as workers take longer to acquire skills and fill vacancies." Josh Mitchell and Jeffrey Sparshott in The Wall Street Journal.

@grossdm: oh, and I know you'll be shocked. Private sector job openings rose 198K in March, while public-sector openings fell 26K

5) HHS's new rate review authority isn't having much of an impact. "The Department of Health and Human Services isn’t that much of a bully, it turns out. Health insurers flagged by the department for 'unreasonable' premium hikes are refusing to back down in the first year of HHS’s new rate review authority. The health reform law gave HHS the power to scrutinize 'unreasonable' rate hikes in states that didn’t have robust review programs. But 'scrutiny' doesn’t give the department power to actually block the rates from going into effect. HHS can use its bully pulpit to publicly shame insurers whose rates don’t pass its sniff test - and HHS has done just that, holding four media calls since November to scold insurers each time it’s made a new 'unreasonable' determination. Faced with the choice of dealing with some negative press on the national stage or upending their business plan, the four insurers that have been dinged by HHS have all chosen to stick with the business plan." Jason Millman in Politico.

6) The House rejected several additional spending cuts. "The House on Tuesday evening rejected several proposals to slash spending in a series of votes that pitted younger Republicans against more senior GOP members who argued against further spending reductions. The House voted on seven Republican amendments that would have cut $1.4 billion in additional spending from the 2013 appropriations bill for the Departments of Commerce and Justice, H.R. 5326. Members accepted just one of them -- a proposal from Rep. Andy Harris (R-Md.) to reduce funding for a climate website at the National Oceanic and Atmospheric Administration. That amendment saved $542,000, and was approved 219-189. But the rest of the amendments were defeated...The most aggressive proposal came from Rep. Paul Broun (R-Ga.), who submitted language that would have cut 3 percent of all salaries and overhead covered by the bill. That amounted to a cut of $847 million, but was rejected in a 137-270 vote." Pete Kasperowicz in The Hill.

Top op-eds

1) WOLF: Hollande must force a change of course for the eurozone. "What, then, might Mr Hollande do?...He should give enthusiastic support to the wise recent remarks by Wolfgang Schäuble calling for higher German wages. He should then point out that there seem to be only five ways this can end. The first and best would be symmetrical adjustment of the imbalances that built up before the crisis, along with reform in weaker countries. The second would be a permanent transfer of resources from surplus countries to deficit ones. The third would be a painful shift of the eurozone into external surplus - a Germany writ large, so to speak. The fourth would be semi-permanent depressions in weak countries. The last would be partial or total break-up of the eurozone. The only sensible choice is the first. But that is not the path the eurozone is now on. Austerity has to be matched to the realistic pace of adjustment and structural reform." Martin Wolf in The Financial Times.

2) PORTER: Net neutrality is essential for innovation. "Imagine a network of private highways that reserved a special lane for Fords to zip through, unencumbered by all the other brands of cars trundling along the clogged, shared lanes. Think of the prices Ford could charge. Think of what would happen to innovation when building the best car mattered less than cutting a deal with the highway’s owners. A few years ago, Tim Wu, a professor at Columbia Law School...warned members of the House judiciary committee that this could be the fate of the Internet...Fifty years ago, consumers were allowed to hook up only Bell telephones to their Bell phone lines. But in the 1960s, the F.C.C. and the courts forced the Bells to accept any device that didn’t threaten the network. The decision unleashed a torrent of innovation -- including the answering machine, the fax and the first device that allowed us to explore what would become the Internet: the modem. Innovation online requires an open playing field, too." Eduardo Porter in The New York Times.

3) ORSZAG: The super rich face income volatility too. "Over the past three decades, the highest incomes in the U.S. have risen dramatically, and that has appropriately received lots of attention. At the same time, however, these high incomes have also become much more volatile, and that has gone almost unnoticed. Conventional wisdom suggests that low-income households experience the greatest changes in response to macroeconomic conditions -- their income falls the most when the economy weakens, and it picks up the most when the economy recovers. That conventional wisdom is in need of some updating. Today, the impact of macroeconomic events on household incomes forms a U-shaped curve -- it is greatest at the bottom and the top of the income distribution and smallest in the middle...Since the early 1980s, the income of the top 1 percent has fluctuated more than average over the business cycle, rising five percentage points more per year than the overall average during economic expansions and falling 3.7 percentage points more per year during recessions." Peter Orszag in Bloomberg.

4) JENKINS: The government is holding back broadband. "Broadband history may be short, but it's already starting to rhyme. In the early days, what were still known as the Baby Bells were treated as DSL monopolists, forced to resell access to their broadband lines to competitors at cost. Undermined, naturally, was their incentive to invest, especially to push network switches closer to residential neighborhoods, the secret to getting cable-like speeds from the old copper phone network. The result is the world we have today: Cable operators increasingly are the only choice for high-speed fixed broadband in many neighborhoods...But there is no shortage of spectrum; as much spectrum exists as ever has existed. Rather, there is spectrum starvation--a new and fast-growing user, the wireless industry, is being starved of spectrum its customers would willingly pay for because of an archaic government allocation system in which economic logic does not penetrate." Holman Jenkins in The Wall Street Journal.

5) GLAESER: Americans will continue to have an array of living styles. "How has the Great Recession reshaped America? Does the decline in New York’s financial sector herald the 'demise of the luxury city,' as Joel Kotkin has recently suggested? Or instead has this watershed meant 'the death of the fringe suburb,' as Christopher Leinberger speculates? In fact, none of America’s diverse living styles is about to perish. Incomes remain highest in the large, well-educated coastal cities, even though Kotkin is right that they remain challenged by the high cost of government. Population growth remains strongest in the car-oriented cities of the Sun Belt...It is a great thing that Americans can opt to live in dense cities or sprawling suburbs. As long as people pay the social costs of their actions, and are not subsidized by policies that artificially favor one living style over another, then it is splendid that we have plenty of options, some with sunshine and inexpensive mass-produced housing and others with high wages and costly apartments." Edward Glaeser in Bloomberg.

Top long reads

Alison Fairbrother on how an angler and two government bureaucrats may have saved the Atlantic Ocean: "Price is a lifelong striped bass fisherman with no formal training as a scientist. Yet he has spent the last four decades cutting open bass stomachs in a kind of renegade ecological study, charting the precipitous decline of the lowly menhaden. Price’s interest in the species is indirect; menhaden aren’t prized by anglers. But they are prized by striped bass. The little fish has historically been the striper’s most significant source of protein and calories. In fact, menhaden are a staple in the diets of dozens of marine predators in the Atlantic and its estuaries, from osprey to bluefish to dolphin to blue crab. In a host of undersea food chains, menhaden--also known as pogy and bunker--are a common denominator. They have been called the most important fish in the sea."

Bluegrass interlude: Old Crow Medicine Show play "Next Go 'Round" live on WRLT.

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

Still to come: Borrowers face delays; the FDA bill moves forward; Common Core faces a backlash; gas isn't headed for $4 this summer; and a game of feline tetherball.


House GOP leaders are considering bundling appropriations bills. "With an eye toward the legislative calendar, House GOP leaders are considering bundling must-pass spending bills to accelerate the lengthy process of debating them on the floor. In doing so, however, they risk angering conservatives, who note that leadership has long promised an open process so they can offer hundreds of amendments aimed at cutting spending that they can tout on the campaign trail. All of this underscores the quandary Appropriations Chairman Hal Rogers faces in trying to pass his dozen bills before the House adjourns this presidential election year: Short workweeks and pushback from Members of both parties will make it a difficult task to complete...Rep. Tom McClintock gathered 43 House Republican signatories, many from the conservative Republican Study Committee, on a letter sent Tuesday to Speaker John Boehner (R-Ohio) and Cantor asking that appropriations bills be brought to the floor individually." Daniel Newhauser in Roll Call.

Borrowers looking to refinance mortgages face big delays. "Clogged mortgage pipelines have created headaches for hundreds of thousands of Americans trying to take advantage of low mortgage rates, which averaged 4.05% for the week ending April 27, according to the Mortgage Bankers Association. Those rates have helped thousands of Americans free up cash or retire debt...But considering how far mortgage rates have dropped, the refinancing burst has been lackluster by historical standards. A surge in demand has come at a time when fewer banks control a larger share of the mortgage market than they did before the financial crisis. Banks also are being more careful about whom they lend money to and how they process loans. It now takes the nation's biggest mortgage lenders an average of more than 70 days to complete a refinance, according to Accenture Credit Services, up from 45 days a year ago." Nick Timiraos and Ruth Simon in The Wall Street Journal.

The House is set to pass a bill reauthorizing the Export-Import Bank. "A bill to raise the Export-Import Bank’s lending cap 40 percent by 2014 will pass the U.S. House today, lawmakers of both parties predict, although Republican leaders aren’t formally urging members to support it. House Speaker John Boehner endorsed the measure. Still, many Republicans oppose it, saying the bank distorts free markets by subsidizing loans for export sales. The legislation, H.R. 2072, was negotiated by Majority Leader Eric Cantor, a Virginia Republican, and second-ranking Democrat Steny Hoyer of Maryland...The vote will be conducted through an expedited procedure requiring a two-thirds majority for passage. Republicans control the House with 292 members to 190 Democrats and three vacant seats. If all members vote, the bill will need 289 votes to pass under the streamlined procedure." James Rowley in Bloomberg.

Donald Layton will be Freddie Mac's new CEO. "Freddie Mac is preparing to name Donald Layton, the former chief executive of online brokerage E*Trade Financial Corp., as its next CEO, according to people familiar with the matter. The company is expected to announce the hiring as soon as Thursday, these people said. That would end a six-month search for the mortgage giant's third chief executive in the four years since the government took control of it. Mr. Layton had been considered the frontrunner for the job for more than a month. His appointment is subject to approval by the Federal Housing Finance Agency--which regulates Freddie and its sibling, Fannie Mae--and by the Treasury Department...In Mr. Layton, Freddie and its regulator are selecting a financial-services veteran whom the government has turned to in the past and who is willing to work for much less money than a typical chief executive." Nick Timiraos and Joann Lublin in The Wall Street Journal.

Hollande disagrees with key partners on structural reform. "When Mario Draghi called a couple of weeks ago for a growth pact to match the European Union’s fiscal austerity drive, François Hollande, now France’s president-elect, could barely contain his delight...What got less attention was Mr Hollande’s revealing admission that he did not share Mr Draghi’s vision, quickly endorsed by Angela Merkel, the German chancellor, that such a growth plan should be focused on structural reforms, such as increasing labour market flexibility. Mr Hollande was not coy about this. 'Can we really believe that liberalism, privatisations and deregulation, which led us to the financial crisis we are in, will help us get out of the crisis?' he said...His programme falls well short of embracing the sort of structural reforms called for by Mr Draghi and Ms Merkel, which are currently being introduced in Italy and Spain and are seen by many as essential to revitalising France’s economy." Hugh Carnegy in The Financial Times.

Adorable renditions of Shakespeare interlude: Brian Cox teaches a two year-old to recite Hamlet's soliloquy.

Health Care

Schools may be key to preventing obesity. "Obesity is so entrenched in the U.S. that it would take an intense push by schools, employers, doctors and others to reverse an epidemic that accounts for billions of dollars in annual health-care costs, concluded a report released Tuesday. The report by the Institute of Medicine, an influential independent body that advises the federal government on health policy, recommended requiring at least 60 minutes of physical activity a day in schools and considering excise taxes on sugar-sweetened beverages. It urged food companies to improve nutritional standards for foods marketed to people under 18 years old, recommending that mandatory standards be considered at all levels of government if the companies don't adopt their own...Schools, in particular, should be a 'national focal point' for obesity prevention, because children spend up to half their waking hours and consume as many as half their daily calories there, the report said." Betsy McKay in The Wall Street Journal.

The FDA user fee bill advanced. "The 'must-pass' Food and Drug Administration user fee bill was sent to the full House Energy and Commerce Committee on Tuesday morning on a raft of blown kisses from Democrats and Republicans on the Health Subcommittee. After more than a year of work, at least 10 hearings related to user fees and 'intense negotiations as recently as last weekend,' Joe Pitts (R-Pa.), chairman of the subcommittee said its members praised their staffs and one another and passed the bill by unanimous voice vote. It took less than a half-hour. The Energy and Commerce Committee will mark up the bill Thursday. Backers hope to move it to the floor quickly with the goal of getting it wrapped up -- or very close to final -- before the Supreme Court rules on the health law in late June. Industry sources worry the fallout from the ruling, no matter how it goes, could politicize the otherwise relatively bipartisan legislation and slow down, if not derail, its passage." Brett Norman in Politico.

Domestic Policy

The Common Core standards are facing pushback. "The Common Core national math and reading standards, adopted by 46 states and the District of Columbia two years ago, are coming under attack from some quarters as a federal intrusion into state education matters. The voluntary academic standards, which specify what students should know in each grade, were heavily promoted by the Obama administration through its $4.35 billion Race to the Top education-grant competition. States that instituted changes such as common learning goals received bonus points in their applications...Conservative lawmakers and governors in at least five states, including Utah and Alabama, recently have been pushing to back out, or slow down implementation, of Common Core. They worry that adoption of the standards has created a de facto national curriculum that could at some point be extended into more controversial areas such as science." Stephanie Banchero in The Wall Street Journal.

A cyberattack against natural gas pipelines has been under way for months. "A sophisticated cyberattack intended to gain access to US natural gas pipelines has been under way for several months, the Department of Homeland Security has warned, raising fresh concerns about the possibility that vital infrastructure could be vulnerable to computer hackers. The department’s Industrial Control Systems Cyber Emergency Response Team said recently that it had identified a single campaign behind multiple attempted intrusions into several different pipeline companies since December last year. There was no information about the source or motive for the attack, but industry experts suggested two possibilities: an attempt to gain control of gas pipelines in order to disrupt supplies or an attempt to access information about flows to use in commodities trading...The threat of attacks on IT systems has prompted the US authorities to step up their security efforts in recent years, including the creation of ICS-CERT, designed to protect critical infrastructure." Ed Crooks in The Financial Times.

The FAA is under fire for its response to safety risks. "The Federal Aviation Administration was slow to respond to serious safety risks highlighted by employees, including air-traffic-control violations and lax airline maintenance, according to a government watchdog. Directing unusually sharp criticism at the FAA and the Department of Transportation, the Office of Special Counsel on Tuesday released documents and findings covering several cases that it said highlighted 'the recurring nature of the problems' over the years. The conclusions, according to the report, reveal a pattern of 'insufficient responses by the FAA' to resolve urgent safety hazards and internal organizational weaknesses...In a number of instances, according to the documents, it took FAA management years to implement fixes--and sometimes required repeat warning from employees--even after the original hazards were substantiated." Andy Pasztor in The Wall Street Journal.

Animal athletics interlude: Two cats play an epic game of tetherball.


The EIA no longer sees gas hitting $4 this summer. "Gasoline prices likely won’t reach a national average of $4 per gallon during the summer driving season, the federal Energy Information Administration (EIA) said Tuesday, walking back earlier predictions. That’s welcome news for consumers, who have grown increasingly worried about the effect of high gasoline prices on their pocketbooks. EIA, the Energy Department’s independent statistical arm, predicted Tuesday in its short-term energy outlook that gasoline prices will average $3.79 per gallon during the April-to-September summer driving season. The estimate is 16 cents lower than the average price EIA predicted in April. EIA said at the time that prices at the pump would average $3.95 per gallon during the summer, peaking in May at $4.01 per gallon. In its short-term energy outlook Tuesday, EIA said it lowered its prediction because of 'falling global crude oil prices over the past month.'" Andrew Restuccia in The Hill.

@Ben_Geman: Coal losing ground. EIA sees power gen. from coal sliding 15% in ’12, nat gas increases 24%. But coal forecast to regain some ground in ’13

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

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