Wonkbook: A bad week for John Boehner
Speaker John Boehner is having a bad week. First, his members weren't able to agree on a budget. For a time, it didn't look like they would be able to agree on a budget. They would have to join the Senate Democrats in simply skipping the budget process. And now, it looks like the only way to pass a budget is to propose one that undercuts the spending levels agreed to in the debt-ceiling deal -- a deal that Boehner signed onto, and a reversal that sets up an unnecessary and likely unwinnable battle with the Senate.
Then, there was the push to bring Rep. Jeff Fortenberry's “Respect for Rights of Conscience Act” to the floor. This legislation was the House version of the Blunt Amendment, and it would have amended the Affordable Care Act to permit any health-care plan, whether religious or not, to refuse to cover birth control. More than half the House had already signed on to co-sponsor the bill. It looked like an easy slam dunk. At least, it did before the Senate defeated the Blunt amendment, and Rush Limbaugh said something dumb, and the politics of this issue turned sharply against the GOP. Now the bill looks like an ugly distraction from jobs, jobs, jobs. It's currently on ice in the Energy and Commerce Committee.
Which brings us, of course, to the Energy and Commerce Committee, site of Boehner's most frustrating struggle. It was months ago now that he shepherded the Energy and Infrastructure Jobs Act -- better known as his highway bill -- through five committees. His office put muscle behind the legislation, blasting out a constant stream of press releases on its many virtues, and Boehner himself delivered a speech endorsing the bill when it came to the House floor.
But the legislation has languished. Some Republicans don't like the spending. Others don't like the changes to mass transit funding. Some want the ability to add earmarks. Another group doubts the highway bill is the place to expand offshore oil drilling. Transportation Secretary Ray LaHood -- a former Republican congressman from Illinois -- told Politico it was "the worst transportation bill I’ve ever seen during 35 years of public service.”
On Wednesday, in a closed-door meeting, Boehner tried to persuade his colleagues to save the bill. “Even the Senate — the do-nothing Democratic Senate — is going to pass something," he said. But while Boehner's speech might have helped a little, Jake Sherman reports that "GOP lawmakers are still opposing the measure in alarmingly high numbers," leaving "Boehner and the Republican leadership scratching their heads about what went wrong."
They must be doing that a lot lately.
1) The GOP is coalescing around a budget beneath the levels agreed to in the debt-ceiling deal. "Anxious to change the subject, House Republicans moved toward picking a new fight with the White House over spending Wednesday even as the leadership confirmed it will go slower on legislation challenging President Barack Obama’s policy of requiring contraception coverage by health insurance companies. House Budget Committee Republicans are to meet Thursday morning on options for the new fiscal year that begins Oct. 1, and the GOP is coalescing around a plan that would cap appropriations at a level of $1.028 trillion -- nearly $20 billion below what was agreed to last August as part of the Budget Control Act. The move is designed to appease fiscal conservatives, many of whom opposed last summer’s debt agreement and have threatened to delay action on the budget. But the strategy only ensures more delay and rancor this year, since the Senate intends to move ahead at the higher $1.047 trillion cap set in the law." David Rogers in Politico.
2) The House is slowing down its push for contraception exemptions. "House Republican leaders are taking their foot off the gas, slowing down plans to pass legislation taking aim at the Obama administration’s contraception coverage requirement, according to sources close to leadership. The Senate's defeat of similar legislation last week means a House-passed version won’t become law. Although this House has passed several other reproductive health bills it knew would never make it through the Senate, some Republicans have lost their appetite for such symbolic votes as the November election comes closer...Rep. Jeff Fortenberry's 'Respect for Rights of Conscience Act' has been pending in the House for months, and it would likely pass easily if brought to the floor. More than half the House -- 219 members -- have already signed on as co-sponsors to the bill, the companion to the measure defeated in the Senate last week sponsored by Missouri Republican Roy Blunt." Lester Feder and Kate Nocera in Politico.
But the birth control debate is heading towards the courts. "Republicans and religious organizations fighting President Obama’s new birth-control-coverage rule are focusing their hopes on what could prove the next front in the battle: the courts. Since November, at least eight lawsuits have been filed in federal district courts across the country challenging the constitutionality of the rule, which requires employers, including church-affiliated organizations that object to contraception on religious grounds, to cover birth control in workers’ health plans with no out-of-pocket charges. (Groups that are exclusively religious, such as churches, are exempt)...Some Republicans predict the matter will ultimately be decided by the nation’s highest court. Speaking moments after the Senate voted down his attempt to expand the rule’s conscience exemption last Thursday, Sen. Roy Blunt (R-Mo.) pointed in the direction of the Supreme Court." N.C. Aizenman in The Washington Post.
Meanwhile, 'We’re looking at about 430 abortion restrictions that have been introduced into state legislatures this year.' "Despite intense backlash to some of the provisions, states could be on track for another, record-breaking year of passing restrictions on reproductive health. 'We’re looking at about 430 abortion restrictions that have been introduced into state legislatures this year, which is pretty much in the same ballpark as 2011,' says Elizabeth Nash of the Guttmacher Institute, a research and policy group that focuses on health and reproductive rights. This year, Nash says, 'is shaping up to be quite busy.' Keep in mind, 2011 was already a watershed year for abortion restrictions: States passed 83 such laws, more than triple the 23 laws passed in 2010. And much of that had to do with the 2010 election, when Republicans gained control of many state legislatures. With the political makeup of state capitols unchanged, lawmakers are continuing to put more limits abortion." Sarah Kliff in The Washington Post.
3) There's an anti-incumbent SuperPAC: "In two Ohio congressional primaries Tuesday, a Texas-based group spent almost $190,000 supporting a pair of candidates who could not be more different: a tea party conservative and a liberal icon, Rep. Dennis J. Kucinich (D-Ohio). The group’s enemy is incumbency — of any ideological stripe, anywhere in the country. The Campaign for Primary Accountability, founded by the son of a Houston construction magnate, is targeting longtime incumbents in House districts that are otherwise safe for their party. Group leaders say these long-term lawmakers who face scant competition have created a 'permanent political class' that has poisoned politics." Paul Kane in the Washington Post.
4) John Boehner failed to save his highway bill. "House Speaker John Boehner’s plea Wednesday to save his massive highway bill wasn’t the silver bullet some hoped it would be. The Ohio Republican’s speech urging colleagues to vote for Transportation and Infrastructure Chairman John Mica’s bill has 'gained some traction,' according to a Republican source, but the GOP lawmakers are still opposing the measure in alarmingly high numbers, according to top GOP insiders. It leaves Boehner and the Republican leadership scratching their heads about what went wrong and will likely force the House GOP to take up a shorter-term measure -- most likely a short-term extension. The House doesn’t want to take up the Senate bill, and they’re mulling how long of a clean extension they’ll propose. GOP leadership will meet Thursday ahead of a one-week recess to make a decision. But an 18-month or two-year extension would also have a rocky road to passage." Jake Sherman in Politico.
1) Mitt Romney's policy plans are hollow shells. "After last night’s Super Tuesday victories, Mitt Romney’s longstanding lead in the GOP primary looks increasingly solid. His policy plans, however, are as flimsy as ever. Indeed, exploring his economic policy proposals is rather like touring a Hollywood backlot. Like a street façade on a movie set, Romney’s economic plans are designed to project an outward appearance of functionality. But when you look behind their cleverly made-up fronts, there’s nothing to see. Romney’s policy offerings on taxes, spending, and entitlements consistently lack crucial structural details; his campaign seems intent on emulating the outward appearance of policy proposals without providing anything that’s actually workable...Romney has taken to framing his campaign in part around the goals of 'less debt' and 'smaller government.' These are central themes to his candidacy, and yet Romney’s actual proposals remain mysterious at best, unworkable at worst." Peter Suderman in Reason.
@morningmoneyben: Romney on @cnbc on his own tax plan: "Frankly it can't be scored"
2) The system failed the test of the recession. "A simple model of negotiations over the last year could look like this. Imagine every policy proposal can be ranked on a scale from 1-10, with 1 being very liberal, 10 being very conservative, and 5 being perfectly in the middle. The Obama administration is liberal, but they also place a very high premium on getting something done. So they would have permitted a range of outcomes from 1 to 6.5, or perhaps 7. Congressional Republicans are very conservative, and they put a high premium, intentionally or not, on keeping the Obama administration from getting things done. So they retreated to a range of outcomes from 9-10 -- one example being the Ryan budget, which was far more conservative than anything the Republican Party had endorsed in the previous decade. And so compromise wasn’t possible." Ezra Klein in The Washington Post.
3) Watch out for spin on the jobs numbers. "Traders, take your mark. Go! The monthly employment stakes has begun. At precisely 8:30 a.m. Eastern Standard Time tomorrow, the Bureau of Labor Statistics will release the Employment Situation report for February. (Note: It is not the 'unemployment report,' a misnomer favored by almost every TV and radio commentator.) Then the real fun begins: dissecting the numbers and spinning them to reflect one’s political biases or entrenched view on the U.S. economy. In other words, attempting to make reality conform to the model...Assuming a labor-force participation rate of 63.7 percent and monthly population growth of 0.07 percent, the past year’s average rate, it would take monthly payroll growth of 242,558 to reduce the unemployment rate to 7 percent in 12 months. Nonfarm payrolls rose 243,000 in January. And yes, some of that increase was due to unseasonably warm weather, for which there will be a giveback this spring. Still, 243,000 net new jobs a month isn’t out of the realm of possibilities." Caroline Baum in Bloomberg View.
4) Charles Murray doesn't offer solutions for the class divide because there aren't any good solutions for the class divide. "There's been a lot of commentary from all sides about my recently published book, 'Coming Apart,' which deals with the divergence between the professional and working classes in white America over the last half century. Some of the critiques are fair, some are frivolous. But there’s one -- 'He doesn’t offer any solutions!' -- that I can’t refute. The reason is simple: Solutions that are remotely practicable right now would not do much good...The changes that matter have to happen in the hearts of Americans. The haves in our society are increasingly cocooned in a system that makes it easy for their children to continue to be haves. Recognizing that, and acting to diminish the artificial advantages of the new upper class -- especially if that class takes the lead in advocating these reforms -- could be an important affirmation of American ideals." Charles Murray in The New York Times.
5) War with Iran would devastate the economy. "A war with Iran would have enormous consequences on the global price of oil, and it’s perfectly reasonable for speculators to take to the futures markets to try to bet on it. How big of an impact on oil prices are we talking about? In January, UC-San Diego energy economist James Hamilton looked at four previous supply disruptions: the 1973 OPEC embargo, the Iranian Revolution of 1978, the 1980 Iran-Iraq War, and the 1990 Persian Gulf War. Hamilton found that at peak 'these events took out 4-7 percent of net world productions and were associated with oil price increases of 25-70 percent.' Iran, in case you were wondering, is currently responsible for 4.9 percent of world oil production. So that’s big. Of course, an American or Israeli bombing of Iranian nuclear facilities wouldn’t mean that all of Iran’s oil would come off world markets. But then again, it might." Matthew Yglesias in Slate.
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Still to come: Growth in emerging markets is showing signs of weakness; early signs are good on job growth; teacher evaluations hit the reality of implementation; Boehner didn't save his highway bill; and the latest sports trend from the 1950s.
The Fed is mulling a new approach to bond purchases. "Federal Reserve officials are considering a new type of bond-buying program designed to subdue worries about future inflation if they decide to take new steps to boost the economy in the months ahead. Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates. The aim of such an approach would be to relieve anxieties that money printing could fuel inflation later, a fear widely expressed by critics of the Fed's previous efforts to aid the recovery. Fed officials are set to meet next week and have signaled that they are unlikely to launch new programs at that meeting. Moreover, it is far from certain the Fed will launch another program later on. If growth or inflation pick up much, officials seem unlikely to launch a bond-buying program because the economy might not need the extra help or because doing more could spur higher inflation." Jon Hilsenrath in The Wall Street Journal.
@justinwolfers: Don't let QE, Operation Twist or Sterilized bond buying confuse you. The Fed is just trying to cut long-term interest rates.
The ADP report showed solid job growth. "U.S. businesses added more workers in February than January, the latest sign that improvements in the economy are making it a bit easier for Americans to find jobs. Private-sector employers hired 216,000 workers last month, an increase from an upwardly revised 173,000 in January, according to payroll processor Automatic Data Processing Inc. and Macroeconomic Advisers LLC, a consulting firm. The upbeat report comes ahead of Friday's jobs snapshot from the government, which will include public and private employers. The ADP update isn't as comprehensive as the government's monthly snapshot of the jobs market. But Wednesday's reading likely will fuel optimism that recent improvement on the jobs front will continue. Most forecasters expect Friday's government job report to show that the U.S. added a net new 210,000 nonfarm jobs in February--with gains among private employers trimmed by continued cutbacks in government." Neil Shah in The Wall Street Journal.
@morningmoneyben: I don't remember what my life was like before I obsessed over every NFP jobs report. It was a dark time for sure.
Consumer borrowing continues to rise. "Consumer borrowing continued to climb in January, driven largely by student loans, sustaining a trend begun in the final months of 2011. Household borrowing through car loans, student loans, credit cards and other debt, excluding mortgages, rose at a seasonally adjusted 8.6% annual rate in January, the fourth straight month of rapid growth, according to Federal Reserve data out Wednesday. Behind the increase is a surge in student loans, auto loans and other 'non-revolving' debt, which jumped a seasonally adjusted $20.7 billion, to $1.711 trillion, the biggest dollar increase since November 2001. The Fed revised December's overall increase down to 7.9% from 9.3%. After years of trying to shed debt, Americans are starting to borrow again. Many economists view that as favorable to the recovery, which shows indications of being broad-based as hiring picks up." Neil Shah in The Wall Street Journal.
Growth in emerging markets is faltering. "Fresh signs of economic weakness in Brazil are adding to a growing worry for the global economy: that the emerging markets that have boosted growth in recent years are slowing. That is a big concern amid the drag of the European debt crisis and a sluggish U.S. recovery. Brazil, China, Russia, India and South Africa are among the dynamic economies that helped the world bounce back from the 2008 financial crisis. This time around, they seem less likely to provide the same boost as they deal with problems such as strong currencies, inflation, deficits and real-estate bubbles...To be sure, most of the world's developing economies are still cruising faster than the U.S., Europe and Japan. Foreign investment in the regions is recovering, and rising commodity prices should help growth in resource-rich nations like mining giant South Africa and Brazil, a major exporter of iron ore, soy, beef and other goods." John Lyons and Bob Davis in The Wall Street Journal.
Foreclosures may rise in 2012 -- and that might may be a good thing. "There are too many vacant houses and not enough people who want to buy them. And that’s a reality that’s likely to get worse before it gets better: The number of foreclosures is expected to rise significantly in 2012, adding to a housing overhang that has depressed prices and held back the recovery. But some of these new defaults may be necessary medicine for the housing market to recover in the long term: They represent homes that have been backlogged in the courts and elsewhere that can’t be sold until they finish going through legal foreclosure proceedings...The coming flood of new foreclosed homes will push up the supply of vacant houses once more, which could further depress home prices as there still aren’t enough home buyers. But it’s step that’s ultimately necessary for the housing market to come back in the longer run." Suzy Khimm in The Washington Post.
Greece is nearing its debt restructuring. "The big banks have opted in. Some pension and hedge funds have opted out. Late Thursday in Athens, Greek officials will begin the final tally of a massive debt write-down to see if enough investors have agreed to participate to allow them to declare the program a successful step on the way back to solvency, receive a new round of international loans -- and perhaps put the worst of their crisis behind them...On Wednesday, enough investors had publicly declared their support that the program seemed likely to avoid a worst-case outcome. Greece has said that if participation does not top 75 percent of the outstanding bonds, it will not proceed with the exchange -- meaning it would probably face a general default this month...But there were some holdouts -- including a few Greek-based pension funds that Venizelos criticized for risking the country’s future." Howard Schneider in The Washington Post.
The Treasury is selling off some of its AIG stock. "The Treasury Department launched a sale of as much as $6 billion of American International Group Inc. stock, in a move that stands to further reduce the U.S. government's stake in the New York-based insurer more than three years after the company's government rescue during the financial crisis. Bankers were discussing a price of $29 a share with investors on Wednesday evening, according to people familiar with the matter, who also said the offering is expected to be completed and priced by Thursday morning. AIG, which has bounced back from the brink of collapse and expects steady profits in coming years, will itself buy as much as $3 billion of the shares the Treasury is selling. That buyback could help prevent Treasury's sale from weighing on AIG's share price." Erik Holm and Serena Ng in The Wall Street Journal.
Internet history interlude: PBS on the history of GIFs.
'Personalized medicine' cancer care hits a snag. "A tumor's genetic makeup can vary significantly even within the same tumor sample, researchers said, a finding that poses new challenges to the personalized-medicine movement in cancer. One big implication of the new research, being published Thursday in the New England Journal of Medicine, is that analyzing only a single sample of a patient's tumor--the current practice--may miss important genetic mutations that affect the course of the disease. That, in turn, could hinder emerging efforts to match patients with drugs that target the mutations affecting their tumors, a basic strategy of personalized medicine. The findings don't diminish enthusiasm for the idea that genetic knowledge about tumors can transform cancer care, the researchers said. But it could make personalized treatment more complex--and more costly." Ron Winslow in The Wall Street Journal.
Teacher evaluations face implementation challenges. "Efforts to revamp public education are increasingly focused on evaluating teachers using student test scores, but school districts nationwide are only beginning to deal with the practical challenges of implementing those changes. Only an estimated 30% of classroom teachers in the U.S. work in grades or subjects covered by state standardized tests. Currently, most states test students only in math and reading in third through eighth grades and once in high school, as mandated by the federal No Child Left Behind law. Few states test students in other core subjects, such as science and social studies, and for many other subjects there is no testing at all. Rolling out systemwide tests and devising ways to measure educator effectiveness require additional spending for states and districts, many already low on cash. And some parents and teachers complain that the effort has translated into more testing for children, taking away from classroom learning." Stephanie Banchero in The Wall Street Journal.
The Justice Department is threatening publishers with an antitrust case. "The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter. Several of the parties have held talks to settle the antitrust case and head off a potentially damaging court battle, these people said. If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers. However, not every publisher is in settlement discussions...The case centers on Apple's move to change the way that publishers charged for e-books as it prepared to introduce its first iPad in early 2010. Traditionally, publishers sold books to retailers for roughly half of the recommended cover price. Under that 'wholesale model,' booksellers were then free to offer those books to customers for less than the cover price if they wished." Thomas Catan and Jeffrey Trachtenberg in The Wall Street Journal.
Vintage sports interlude: Roller skiing -- the 1950s sports craze!
@ObsoleteDogma: I'm disappointed Newt Gingrich hasn't proposed pushing gas prices into negative territory. Whatever happened to American exceptionalism?
Obama proposed more subsides for hybrids. "President Obama on Wednesday proposed sweetened tax incentives and subsidies to spur the market for alternative-power cars and trucks, promoting his 'all of the above' energy strategy while warning against other politicians’ 'quick fixes' to the latest spike in gasoline prices...The president called for increasing to $10,000 an existing $7,500 credit per vehicle for consumers and businesses that buy cars and trucks powered by electric battery, natural gas or hydrogen. He would also expand the technologies that qualify and allow buyers to benefit at the time of purchase, by transferring the credit to the dealer or financier. The credit’s enhanced value would bring the purchase price of alternative-energy vehicles more in line with conventional models, supporters say. Partly because of the vehicles’ costs, sales have been a problem. General Motors announced last week that it was suspending production for five weeks of the Chevrolet Volt, a plug-in hybrid that Mr. Obama has promoted in the past." Jackie Calmes in The New York Times.
Brad Plumer explains the Volt's troubles: http://wapo.st/xFTXwY
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.