Wonkbook: The veepstakes are outdoing the presidential campaign
You all know I hate the veepstakes, right? It's months of endless and mostly groundless political speculation about a choice that we'll find out soon enough and that mostly won't matter in the election. But I've got a confession to make: I'm loving the veepstakes this year.
Not the speculation part of it. That is, as ever, a colossal waste of time. But at a moment when the presidential election has descended into microscandals and vague, policy-free addresses, the various contenders vying to be Romney's veep have gone for substance.
On Wednesday, Marco Rubio gave a speech on foreign policy at the Brookings Institution. It was a far more credible and thoughtful statement than anything we heard during the primary. It was also presented in a very different way. "at a time when the two parties—and in recent years, especially the Republicans—often talk in fact-free zones exclusively to their most ardent supporters, Rubio’s speech was notable for its civility and relative policy heft," wrote the New Yorker's Ryan Lizza. "He is one of the few Republican leaders genuinely trying to engage in dialogue with people who don’t already agree with him."
On Thursday, Paul Ryan headed to Georgetown University to defend his budget before a roomful of Catholic theologians. "Government is one word for things we do together," he said. "But it is not the only word. We are a nation that prides itself on looking out for one another – and government has an important role to play in that. But relying on distant government bureaucracies to lead this effort just hasn’t worked."
You don't have to agree with these speeches, or like these politicians, to believe this is much closer to the debate we should be having at the presidential level. But at the moment, the debate we are having at the presidential level hasn't come anywhere close. Indeed, insofar as President Obama is having an interesting and serious policy debate, it's been with Ryan, not with Romney.
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1) Senate Democrats rejected the House GOP plan to pay for low student loan rates. "Senate Democratic leaders said Thursday they would reject a House Republican bill extending low student loan rates because it would defund an important part of the 2010 healthcare reform law. House Republicans plan to pass the bill Friday. 'I’m very disappointed with what the House is contemplating doing tomorrow,' Senate Majority Leader Harry Reid (D-Nev.) said during a Thursday press conference. 'They would pay for it by stopping Americans from getting preventive healthcare. That doesn’t sound like a very good deal to me,' he said...Student loan rates for an estimated 7 million people are expected to rise from 3.4 percent to 6.8 percent on July 1. Senate Democrats have proposed a one-year extension of lower rates by eliminating a tax break for S corporations, which pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes." Alexander Bolton in The Hill.
2) Happy GDP day! "The biggest increase in consumer spending in a year probably helped extend the U.S. economic expansion into the first quarter, economists said before a report today. Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2.5 percent annual rate after a 3 percent gain the prior three months, according to the median forecast of 85 economists surveyed by Bloomberg News. Household purchases, which account for about 70 percent of the economy, advanced by the most since the end of 2010, the survey showed. Job creation and income gains were enough to propel sales at car dealerships and retailers like Target Corp. (TGT), helping make the U.S. more resilient to weakness in overseas markets...The Commerce Department will release the first estimate of GDP at 8:30 a.m. in Washington. Economists’ estimates ranged from 1.2 percent to 3.6 percent." Shobhana Chandra in Bloomberg.
3) Bad sign: Jobless claims came in worse than expected. "New applications for unemployment benefits last week remained near the highest level in nearly four months, showing that the labor market's recent improvement may be slowing. Initial jobless claims decreased by 1,000 to a seasonally adjusted 388,000 in the week ended April 21, the Labor Department said Thursday. The fall, however, is in comparison to the prior week's upwardly revised level of 389,000--the highest reading since the first week of the year. Economists surveyed by Dow Jones Newswires predicted that 376,000 new claims would be filed last week. Considering the amount of applications filed in recent weeks, 'the notion of a re-emergence of labor market weakness gains further credence,' said Joshua Shapiro, chief U.S. economist with MFR Inc. It was the third straight week that the level topped 385,000. Claims haven't stayed that consistently high since November." Eric Morath and Alan Zibel in The Wall Street Journal.
@greg_ip: QE3 odds went up today. Just sayin'.
@BCAppelbaum: Tardy thought: Seems like QE3, even if it happens, would aim to maintain, rather than increase, the pace of decline in unemployment.
4) The House passed cybersecurity legislation -- but the president will veto. "Defying a veto threat from President Obama, the House on Thursday passed a bill that encourages intelligence agencies and businesses to share information about threats to computer systems, including attacks on American Web sites by hackers in China and other countries. The vote was 248 to 168, as 42 Democrats joined 206 Republicans in backing the bill. The 'no' votes were cast by 140 Democrats and 28 Republicans, including a number who described the measure as a potential threat to privacy and civil liberties...The White House opposed the bill, saying it could 'undermine the public’s trust in the government as well as in the Internet by undermining fundamental privacy, confidentiality, civil liberties and consumer protections.' In addition, the White House said the government should set 'minimum cybersecurity performance standards' for the private sector -- an approach resisted by House Republican leaders." Robert Pear in The New York Times.
5) The Senate voted to reauthorize the Violence Against Women Act. But will the House? "The Senate voted overwhelmingly on Thursday to reauthorize the Violence Against Women Act and expand its reach to American Indians and homosexuals, after Republicans opted to sidestep an expected partisan brawl. But a political fight still looms when the House takes up a version of the legislation next month that is shorn of the hot-button issues added in the Senate. The final vote, 68 to 31, including 15 Republicans, belied the partisan maneuvering that preceded Senate action on the bill, which extended landmark legislation first passed in 1994 to give courts and law enforcement new tools to combat domestic violence...If there are to be fireworks, they will have to come when the Senate version comes up against the House’s. House Republican women this week announced that they would introduce a version of the violence act when they return from next week’s recess, with a final House vote expected by mid-May." Jonathan Weisman in The New York Times.
@teddygoff: Sign of the times: VAWA reauthorization, which passed just now with 31 Republican nays, passed by unanimous consent in 2005
1) KRUGMAN: The confidence fairy is dead. "This was the month the confidence fairy died. For the past two years most policy makers in Europe and many politicians and pundits in America have been in thrall to a destructive economic doctrine. According to this doctrine, governments should respond to a severely depressed economy not the way the textbooks say they should -- by spending more to offset falling private demand -- but with fiscal austerity, slashing spending in an effort to balance their budgets. Critics warned from the beginning that austerity in the face of depression would only make that depression worse. But the 'austerians' insisted that the reverse would happen. Why? Confidence!...The good news is that many influential people are finally admitting that the confidence fairy was a myth. The bad news is that despite this admission there seems to be little prospect of a near-term course change either in Europe or here in America" Paul Krugman in The New York Times.
@FareedZakaria: Spain & Britain officially entered a double-dip recession, the first time major economies have done so in 40 years. Austerity is not working
2) SUMMERS: Romney needs to fill out the details of his budget plans. "Start with the taxes. The Romney campaign has been very clear about what the former governor is promising: $5 trillion in tax cuts on top of extending the Bush tax cuts, with those benefits heavily weighted toward the country’s wealthiest taxpayers. Romney himself has acknowledged the lack of details, stating in reference to his tax plan that 'frankly, it can’t be scored.' I have been party for many years to searches for 'high-income tax shelters' that can feasibly be closed. I know of no reputable expert in either political party who would find that there is anything even approaching $5 trillion in potential revenue to be generated from this source. Romney has also proposed a massive defense buildup, even while he says he will cut spending deeply enough to balance the budget. I think it’s clear why he won’t tell voters which cuts he would make: In the past, disclosing his planned budget cuts was politically damaging." Lawrence Summers in The Washington Post.
@Austan_Goolsbee: how do you conclude from the last 10 years that our big economic problem has been not enough high income tax cuts?
3) BROOKS: Government needs a culture of experimentation. "Businesses conduct hundreds of thousands of randomized trials each year. Pharmaceutical companies conduct thousands more. But government? Hardly any. Government agencies conduct only a smattering of controlled experiments to test policies in the justice system, education, welfare and so on. Why doesn’t government want to learn? First, there’s no infrastructure. There are few agencies designed to supervise such experiments. Second, there is no way to conduct a randomized experiment to test big economywide policies like the stimulus package. Finally, the general lesson of randomized experiments is that the vast majority of new proposals do not work, and those that do work only do so to a limited extent and only under certain circumstances. This is true in business and government. Politicians are not inclined to set up rigorous testing methods showing that their favorite ideas don’t work." David Brooks in The New York Times.
4) GERSON: Reform conservatives have won the battle for the GOP. "Reform Conservatism is less ideologically ambitious than Rejectionist Conservatism. It would replace Obamacare, for example, rather than simply abolish it. Similarly, it focuses on education reform -- school accountability, parental empowerment and teacher quality -- rather than on the demolition of the Education Department...The conflict, in the end, was not a close one. Speaker John Boehner has adopted Ryan’s reform approach as the de facto ideology of the House Republican majority. Mitt Romney has embraced the outlines of the Ryan budget and Medicare reform with more enthusiasm than I suspected he would. The internal struggle within conservatism has been difficult, but the outcome has been decisive. Reform Conservatism is intellectually and politically ascendant. It would be the governing agenda of the next Republican administration." Michael Gerson in The Washington Post.
5) ALTER: Community colleges are the key to growing the middle class. "Setting aside the misery of poverty for a minute, the rich need a skilled middle-class workforce to make their businesses successful or they won’t stay rich for long. Skills, of course, require education, which is why it’s nutty that Republican House members want to cut Pell grants and are making unreasonable demands in the debate over preventing the federal interest rate on student loans from shooting up. But conservatives have a point that a lot of federal support goes to students who don’t finish community college. We need to move faster to improve these schools. They aren’t Harvard -- and they might not be sexy to talk about on the campaign trail -- but they make up a growing share of the college market. And nowadays they are the primary engine powering people into the middle class. Unfortunately, these institutions are often failing." Jonathan Alter in Bloomberg.
Top long reads
Paul Ryan defended his budget's commitment to Catholic doctrine at Georgetown University: "The overarching threat to our whole society today is the exploding federal debt. The Holy Father, Pope Benedict, has charged that governments, communities, and individuals running up high debt levels are 'living at the expense of future generations' and 'living in untruth.' We in this country still have a window of time before a debt-fueled economic crisis becomes inevitable. We can still take control before our own needy suffer the fate of Greece. How we do this is a question for prudential judgment, about which people of good will can differ. If there was ever a time for serious but respectful discussion, among Catholics as well as those who don’t share our faith, that time is now."
Alan Krueger discusses the jobs deficit: "It will take a concerted national effort to reverse the problems that have been building in the job market for decades, and, although much more work needs to be done, we have made progress in the last few years. The United States has considerable strengths that should help us to reverse the middle-class jobs deficit. No country has a more productive workforce, better colleges and universities, or more daring and innovative entrepreneurs. It is imperative for policymakers to build on these strengths to create an expanding middle class and provide more opportunity for more young people, regardless of their family backgrounds. As President Obama has stressed, this is the defining issue of our times. We face a critical moment in which we can pursue a path that leads to a more durable economy and growing opportunities for all Americans, or we can return to the policies that caused an erosion of the middle class and tilted an ever-increasing share of income into the hands of a fortunate few, who were allowed to play by their own rules."
@justinwolfers: Krueger: "2000s were on track for the worst decade of job growth in over 50 yrs, even before the steep job loss from the 2007-09 recession."
Soul interlude: Aretha Franklin's "I Never Loved A Man."
Got tips, additions, or comments? E-mail me.
Still to come: Multinationals add jobs overseas; employers may drop coverage when exchanges kick in; the Obama administration drops a child labor rule; billions are needed for the electrical grid; and a dog is mystified by a toothbrush.
Appropriators continued to make progress on spending bills. "The House and Senate Appropriations committees on Thursday continued on their collision course by passing three annual spending bills tailored to different overall budget numbers. The Senate Appropriations Committee reported out Agriculture and Energy titles by 28 to 1 votes, while the House Appropriations Committee approved a Commerce, Justice bill by voice vote. The House’s new Commerce bill provides $51.1 billion in funding, a cut of $1.6 billion below 2012 levels and about $800 million below the Senate Appropriation Committee’s companion measure...The differing spending levels are the result of a decision by the Senate to craft bills meeting the spending ceilings in last August’s debt deal. The House is producing bills that come in at $19 billion less, as per the House-passed budget authored by Rep. Paul Ryan (R-Wis.)." Erik Wasson in The Hill.
@brianbeutler: Boehner on OMB threatening veto on approps below debt limit deal: "blah blah blah blah blah." Me: "That the official response?" Him: "Yes."
Foreclosures increased in major cities. "The number of foreclosures rose during the first three months of the year in more than half of the nation’s metropolitan areas, even as such activity dipped from the previous year in many of those cities, according to a report released Thursday by the research firm RealtyTrac. The numbers show that foreclosures increased during the first quarter in 26 of the country’s 50 largest metro areas, with the highest jumps in Pittsburgh, Indianapolis and Philadelphia...Many experts expect foreclosures to surge in coming months in parts of the country, in the wake of a $25 billion settlement between major banks and government officials over shoddy foreclosure practices. Many banks and mortgage servicers had halted or delayed foreclosures while that deal was pending. A new wave of foreclosures could drag down home prices in the short term but eventually help to boost the housing market by clearing backlogged inventories and putting new owners into long-vacant homes." Brady Dennis in The Washington Post.
Multinational companies are adding jobs, but mostly overseas. "Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis. Those companies, which include Wal-Mart Stores Inc., International Paper Co., Honeywell International Inc. and United Parcel Service Inc., boosted their employment at home by 3.1%, or 113,000 jobs, between 2009 and 2011, the same rate of increase as the nation's other employers. But they also added more than 333,000 jobs in their far-flung--and faster-growing-- foreign operations. The companies included in the analysis were the largest of those that disclose their U.S. and non-U.S. employment in annual securities filings. All of them have at least 50,000 employees. Collectively, they employed roughly 6.4 million workers world-wide last year, up 7.7% from two years earlier. Over the same period, the total number of U.S. jobs increased 3.1%." Scott Thurm in The Wall Street Journal.
Bidding wars are back. "A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back. From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today's are a result of supply shortages...Competitive bidding in the current environment isn't producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump. An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday." Nick Timiraos in The Wall Street Journal.
The bad news for Europe keeps piling up. "Another vital sign for the euro-zone economy took a sudden turn for the worse this month as an economic confidence indicator fell, raising the risk of a prolonged contraction even as government leaders begin poring over formulas for promoting growth. The European Commission, the European Union's executive arm, said in its latest sentiment survey that the overall index of economic confidence for April dropped to a reading of 92.8, its lowest level since the end of 2009 from a reading of 94.5 the previous month. The survey of businesses and consumers noted particularly sharp declines among manufacturers and services, with the outlook for order books and employment outlook deteriorating in both sectors...The indicator suggests that the contraction expected in the region's economy in the first quarter could continue in the current period, supporting warnings that the currency bloc could show an economic contraction for the year as a whole." Matina Stevis and Ilona Billington in The Wall Street Journal.
Kitchen utensil music interlude: A cover of The Black Keys' "Lonely Boy" on the spoons.
A GOP report warned of employers dropping health coverage. "Consultants have told some large employers they can save money by dropping health insurance in 2014 and funneling employees into insurance exchanges under the new health-care law, according to a report by congressional Republicans. Staff for Republican lawmakers on the House Energy and Commerce Committee asked companies represented on President Barack Obama's jobs council for statements and internal presentations made about the law. Their remarks, in a report released Thursday, show that some employers expect the law to increase their health-care costs...Whether the health-care overhaul will prompt employers to drop their health insurance is a subject of intense debate. Several studies have found that most employers don't expect to do so once workers have the option of buying policies through insurance exchanges, set to begin in 2014." Louise Radnofsky in The Wall Street Journal.
@sarahkliff: Wow - United States accounts for 40 percent of *global* health care spending.
Health insurance rebates will soon be on the way. "This summer millions of Americans could find a check in the mail from an unexpected source: their health-insurance company. Consumers and businesses will receive about $1.3 billion by this August from insurance plans that failed to meet a new standard in the 2010 health-care law, according to estimates released Thursday by the independent Kaiser Family Foundation. (That’s assuming the law, or at least the portion of it containing the rule, is upheld by the Supreme Court, which is expected to issue its decision in late June.) The rule requires most insurers to spend at least 80 percent of the premiums they collect from customers on health-care claims or quality improvement efforts -- leaving no more than 20 percent for administrative expenses, such as salaries and marketing, and profits for investors. This 'medical loss ratio' requirement took effect on Jan. 1, 2011, so under current law, any plans that exceeded their limits last year must refund customers the difference by Aug. 1." N.C. Aizenman in The Washington Post.
The farm bill passed out of committee. "Landmark farm legislation cleared the Senate Agriculture Committee Thursday, promising wholesale changes in commodity programs but also opening up a major breach with Southern growers angered by what they see as an unfair tilt toward the Midwest Corn Belt. The 16-5 vote--counting proxies -- underscored the regional split...Corn and soybeans appear the big winners in what would be an historic shift away from direct cash payments and price supports in favor of new forms of subsidized crop insurance. These cash payments have become almost impossible to defend politically given the record farm profits of recent years and growing national debt. Instead the Senate bill proposes to save an estimated $50.2 billion over the next decade by repealing these and related commodity subsidies and then reinvesting about $29.24 billion into a new government-supported 'shallow loss' insurance program to complement traditional crop insurance." David Rogers in Politico.
The Obama administration is trying to weed out low-performing Head Start programs. "Some local Head Start programs for the first time will have to compete for a share of $7.6 billion in federal funding under a plan aimed at weeding out low-performing preschool centers. In its initial move, the Obama administration recently told 132 Head Start programs across the country that they have been identified as deficient, including the nation's largest programs in Los Angeles County and New York City. The targeted programs, which serve low-income three- and four-year-olds, won't lose current funding. But instead of having their grants renewed automatically, as has been the practice, the programs now have to prove they are effective in preparing children for kindergarten before they will be given future funding. The move is part of the administration's broader goal to infuse competition and accountability into public education from preschool through college." Stephanie Banchero in The Wall Street Journal.
The Obama administration backed off of child labor restrictions for farms. "The Labor Department withdrew a proposed rule Thursday that would have limited the work that children can perform on farms. The proposal drew heavy criticism from rural-state lawmakers and agricultural leaders, who cast the rule as government overreach that would erode the traditional American family. Others in Congress supported the rule, and unions argued it was needed to make farm work safer for young adults. In nixing the proposal, the Labor Department cited the need to protect 'the rural way of life.' The new regulations would have forbidden children younger than 16 years of age from completing 'agricultural work with animals and in pesticide handling, timber operations, manure pits and storage bins.' It would also have barred farm workers under 16 from handling most 'power-driven equipment' and from contributing to the 'cultivation, harvesting and curing of tobacco.'" Rachel Leven in The Hill.
Adorable animals being confused by oral hygiene interlude: A dog doesn't know what to do with a toothbrush.
The electrical grid needs billions in upgrades. "A staggering investment is needed in infrastructure that is reaching the end of its life span if the United States is to remain competitive and serve its growing population. The experts have been saying that for years, and the latest report on an aspect of their concern was released Thursday, when the American Society of Civil Engineers (ASCE) described the nation’s electrical grid as a patchwork system that ultimately will break down unless $673 billion is invested in it by 2020. If investment isn’t increased by at least $11 billion a year, the report said, the electrical service interruptions between now and 2020 will cost $197 billion...The report describes an electrical system that dates to the 1880s, just after Thomas Edison invented the first commercially practical light bulb. It grew much as the country grew, in haphazard fits and starts with pieces that now fit together in an imperfect match of power plants, power lines and transformers of widely varying age, condition and capacity." Ashley Halsey III in The Washington Post.
GOP senators are pushing to include Keystone XL in the highway bill. "Republican lawmakers are planning a mix of public pressure and member-to-member schmoozing to build traction for including the Keystone XL oil pipeline in a final transportation programs bill. The House-approved transportation programs bill authorizes construction of the Alberta-to-Texas pipeline. The Senate's plan omits the measure, but GOP senators want it included in a compromise package and will make the case in upcoming bicameral talks...Republicans are facing an uphill battle heading into the negotiations. Of the eight Senate Democrats on the conference committee, only Sen. Max Baucus (D-Mont.) has voted to mandate a permit for the Alberta-to-Texas line, and the Montana senator has signaled he won’t demand Keystone language in the final bill. Even if he did demand its inclusion, Republicans would need to find another Democrat to prevent a 7-7 deadlock." Ben Geman in The Hill.
@drgrist: Only 50% of Americans have heard about the proposed Keystone XL pipeline. 66% of Rs, 69% of Is & 48% of Ds have heard of it.
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.