Wonkbook: What does Europe want to do now?
There's a famous scene at the end of Robert Redford's 1972 film "The Candidate." Redford's Bill McKay has won election to the U.S. Senate. He's sitting in his hotel room. His victory party is raging outside. And as the movie ends, he turns to his campaign manager and mouths, "what do we do now?"
I always thought this was a bit dramatic. McKay had just won election to the U.S. Senate, after all. "Absolutely nothing" would have been an acceptable answer. "I'll figure it out sometime in the next 30 years" would also have worked. But it's the right question for Francois Hollande, who edged out Nikolas Sarkozy to become the next president of France. Hollande does need to decide what to do now, at least so far as the euro zone goes.
So far, his answer has been, "not this," where "this" means the pro-austerity consensus that Sarkozy had agreed to with Germany's Angela Merkel. And, for the campaign, that was good enough. The "Merkozy" consensus hasn't been working. Change beats no change. But what now? Merkel is not going to agree to a transformative stimulus package. The Germans aren't going to look to even the euro zone's current account imbalances by buying many more goods from Italy and Spain and Greece. The French don't have any obvious way to convince the European Central Bank to permit more inflation. So what next?
One realistic possibility is this pessimistic scenario from Slate's Matthew Yglesias. "A very plausible story of what happens next is simply that the European Central Bank will decide it needs to bring the continent's newest leader to heel," he writes. "If the ECB signals that it will only support the French banking system and the French economy if Hollande sticks with the status quo program, then Hollande may well have no choice."
Of course, even in that situation, there's always a choice. The question is just what Hollande thinks that choice is. A credible threat to break-up the Euro? To campaign against the ECB? To humiliate Germany in the next set of euro zone meetings? What, exactly, is his leverage, and how much does he think France will suffer if he uses it?
Perhaps the reality of the euro zone right now is that this isn't just about what Hollande does now. It's about what Merkel wants to do now, and what the ECB wants to do now. The old consensus is no longer politically sustainable. The regime changes in France and Greece, and Hollande's presence at the negotiating table, offers an excellent opportunity to change course if that's what the euro zone's leaders want to do. But is it? What do the euro zone's leaders want to do now?
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Francois Hollande wins!
European elections rendered a harsh verdict for austerity. "Voters in France and Greece redrew Europe’s political map Sunday in a powerful backlash against the German-led cure for the region’s debt crisis: painful austerity. In France, voters swept Francois Hollande into the nation’s highest office, ejecting President Nicolas Sarkozy and bringing the Socialists back to the Elysee Palace for the first time in 17 years. Along with Germany’s Angela Merkel, the blunt-talking Sarkozy was a chief architect of Europe’s push to restore confidence in the euro through tough fiscal discipline. In contrast, Hollande vowed to focus on economic growth, arguing that the singular emphasis on spending cuts has weighted down Europe with recessions and soaring unemployment. Yet potentially more disruptive to Europe’s crisis management plans, furious voters in Greece dealt a powerful blow to traditional parties that backed the tough terms of the country’s massive international bailout. The result left centrists in Athens scrambling to form a fragile new government against strengthened ranks of the far left and right." Anthony Faiola in The Washington Post.
@finansakrobat: Sarkozy is first sitting president in over 30 years to not win reelection in France.
@theharryshearer: Who knew? Severe austerity not good for the careers of politicians who espouse/enforce it.
Investors are not happy: "The euro and equity markets fell and bond yields in the eurozone’s periphery nations climbed after France elected a new president and support for pro-Europe parties in Greece collapsed. Europe’s single currency fell below $1.30 for the first time since January – falling more than 1 per cent as low as $1.2964 – prompting foreign exchange analysts to predict the single currency would finally break out of its recent range against the US dollar." Neil Dennis in the FT.
François Hollande will be forced to hit the ground running. "For François Hollande, capturing the Elysée palace represents a huge personal triumph, redemption for the Socialist party after 17 years’ absence from the presidency, and a significant political change for France at a time of severe economic challenges for the country and for Europe. There will be little time to savour his win over Nicolas Sarkozy. Mr Hollande himself warned that he was unlikely to enjoy a presidential honeymoon. An immediate trial will come in the reaction of financial markets wary about the shift of power from a centre-right incumbent...to a new left-of-centre president...Meanwhile, the formation of a government, a difficult first visit to Berlin, a potentially tense double summit in the US of the G8 leading industrialised countries and Nato, and a vital two-round election for the National Assembly will all confront Mr Hollande within the first four weeks of his new administration." Hugh Carnegy in The Financial Times.
PROFILE: Hugh Carnegy profiles François Hollande.
KRUGMAN: Europe is revolting. "The French are revolting. The Greeks, too. And it’s about time. Both countries held elections Sunday that were in effect referendums on the current European economic strategy, and in both countries voters turned two thumbs down. It’s far from clear how soon the votes will lead to changes in actual policy, but time is clearly running out for the strategy of recovery through austerity -- and that’s a good thing...What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist -- that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper. Moreover, there seems to be little if any gain in return for the pain." Paul Krugman in The New York Times.
@Austan_Goolsbee: Hollande win means G no longer on same page with F. Didn't seem possible but life about to get much harder in the deadzone, er, euro zone.
THE WALL STREET JOURNAL: Hollande's model should be Gerhard Schröder. "The French vote for Mr. Hollande is less a lurch to the socialist left than it is a desire not to reward failure and to give someone else a chance. The French know better than anyone how badly they need to change. It's why they voted for Mr. Sarkozy last time. But 17 years of 'right-of-center' presidencies have yielded little by way of fundamental reform...In 1981 France elected the unrepentant socialist François Mitterrand to the presidency. He tried to implement his campaign agenda only to watch as the markets revolted. Soon enough the Socialist repented and went on to 14 largely successful years in the Élysée. So it could be with Mr. Hollande if he has the wit to realize the limits of dirigiste economics. The irony of his election is that his best chance for success is to follow the example of the last center-left German Chancellor, Gerhard Schröder, who did a Nixon goes to China by selling reform to his coalition." The Wall Street Journal.
YGLESIAS: Hollande probably won't be able to do much. "Whatever you think of Hollande's economic policy ideas (my read on Europe is that mainstream parties there actually don't govern very differently on fiscal issues) the real question is whether he can inject some much-needed perestroika into Eurozone-wide economic governance. There's ample reason to think that he simply can't. That the Eurozone is simply an unworkable enterprise and that European voters simply lack the sense of common identity and solidarity that are necessary for such a large and diverse place to share a single system of economic management...All that said, a very plausible story of what happens next is simply that the European Central Bank will decide it needs to bring the continent's newest leader to heel. If the ECB signals that it will only support the French banking system and the French economy if Hollande sticks with the status quo program, then Hollande may well have no choice." Matthew Yglesias in Slate.
CASSIDY: The French election offers good and bad news for Obama. "For President Obama, the sight of Nicolas Sarkozy, a fellow member of the Presidential class of 2007-2008, being sent packing by French voters will bring mixed feelings...When the campaign turns to questions of economics, what is happening in Europe should provide Obama with plenty of arguments with which to flay his opponents. Republicans say they want to slash government spending and focus on the deficit regardless of the immediate economic situation. The Europeans have carried out that experiment, and, to say the least, it hasn’t turned out very well. From this side of the Atlantic, the American economic recovery seems pretty impressive. After more than three years of economic stagnation, most Europeans would gladly take G.D.P. growth of two-to-three per cent and an unemployment rate of eight per cent." John Cassidy in The New Yorker.
Hollande's win won't bring radical change. "Hollande isn’t likely to lead France in a radically different direction even though his campaign slogan was 'Change now!' His maneuvering room will be sharply limited by fiscal and market pressures. It’s not even clear that most of his countrymen support the tax-and-spend platform he ran on. A poll taken by survey group Ifop during the first-round vote on April 22 showed that 73 percent of Hollande voters supported him because they wanted to punish Sarkozy. Only 44 percent said they agreed with the Socialist candidate’s ideas. An early signal of Hollande’s intentions will come just after his May 16 swearing-in, when he plans to visit German Chancellor Angela Merkel. She had endorsed Sarkozy after they worked closely together to address the European debt crisis, while Hollande blamed German obsession with austerity for stifling economic recovery in Europe." Caol Matlack in Bloomberg Businessweek.
@sethdmichaels: who could have predicted that central-bank-driven, recession-inducing austerity would be politically destabilizing?
1) House leaders reached a deal on the Export-Import Bank. "With an agreement reached late Friday, House leaders will move quickly to the floor this week on legislation to extend the Export Import Bank’s charter through September 2014 and raise its loan exposure cap 40 percent to $140 billion. For the current fiscal year, the cap would go from $100 billion to $120 billion and then in fiscal 2013 and 2014, it would continue to grow in two successive $10 billion increments. The bank’s expanded portfolio will be contingent on Ex-Im maintaining default rates below 2 percent and submitting both a business plan and a report responsive to criticism of its risk-management practices. In addition, the Treasury Department would be required to initiate talks with U.S. trading partners toward 'substantially reducing' and ultimately ending the practice of export financing subsidies, especially for passenger aircraft." David Rogers in Politico.
2) The Obama administration unveiled rules for fracking. "The Obama administration on Friday issued a proposed rule governing hydraulic fracturing for oil and gas on public lands that will for the first time require disclosure of the chemicals used in the process. But in a significant concession to the oil industry, companies will have to reveal the composition of fluids only after they have completed drilling -- a sharp change from the government’s original proposal, which would have required disclosure of the chemicals 30 days before a well could be started. The pullback on the rule followed a series of meetings at the White House after the original regulation was proposed in February. Lobbyists representing oil industry trade associations and individual major producers like ExxonMobil, XTO Energy, Apache, Samson Resources and Anadarko Petroleum met with officials of the Office of Management and Budget, who reworked the rule to address industry concerns about overlapping state regulations and the cost of compliance." John Broder in The New York Times.
@brookejarvis: 1. WH proposes requiring chemical disclosure before fracking. 2. Meets with lobbyists. 3. Proposes rule mandating disclosure AFTER fracking.
3) House Republicans will bring their budget up for a vote this week. "House lawmakers will return to a familiar debate over the deficit when they come back to Washington on Monday following a weeklong recess. Republican leaders are planning to bring up a $260 billion measure to slash the budget gap and replace across-the-board spending cuts set to take effect in 2013. The bill, known as a 'reconciliation' proposal, is the product of six House committees and will be combined into one piece of legislation by the House Budget Committee...Principally, the GOP measure would replace $78 billion in sequestered cuts resulting from the failure of the congressional 'supercommittee' to strike a bipartisan deficit deal last fall...In addition to the $78 billion in sequester replacement, the bill contains an additional $180 billion in cuts aimed at reducing the deficit. Among the federal programs hit are food stamps, funding for the 2010 healthcare and financial regulatory laws and the refundable child tax credit." Russell Berman in The Hill.
4) A variety of lawmakers want to change the Fed. "What do Reps. Kevin Brady (R-Texas), Barney Frank (D-Mass.), Dennis Kucinich (D-Ohio) and Ron Paul (R-Texas) have in common? All are not happy with the current state of the Federal Reserve. In the 112th Congress, areas of bipartisan interest have been hard to come by. But overhauling the nation’s central bank looks to be a subject where politicians of all different stripes have developed an interest -- if not necessarily an agreement on how it should be done...On Tuesday, Paul will host a hearing of his House Financial Services subcommittee, where lawmakers will discuss a range of legislative proposals to tweak, overhaul, or outright eliminate the Fed...Second-guessing the Fed’s structure is not just a Republican game these days. Of the six bills on the agenda Tuesday, half come from Democratic lawmakers, who have their own issues with the central bank." Peter Schroeder in The Hill.
@damianpaletta: Here's a congressional hearing release you don't see every day: "Subcommittee to Examine Proposals to Reform or Abolish Federal Reserve"
1) KLEIN: Obama would be constrained by Congress in a second term. "It was helpful when, at the White House Correspondents’ Association Dinner a week ago, the president opened up about the 'secret agenda' he has planned. 'In my first term,' he joked, 'we ended the war in Iraq; in my second term, I will win the war on Christmas. . . . In my first term, we passed health-care reform; in my second term, I guess I’ll pass it again.' In other speeches, Obama has offered a more serious preview of what he’d like to get done if he’s reelected. On March 30, he listed second-term priorities including reforming the immigration system; remaking the nation’s energy policy so it addresses 'the long-term challenges. . . . of energy independence and climate change'; doing more to ensure that 'people who don’t have work can find work' and that 'our housing system is working for everybody'; pushing forward on education reform; and executing an 'effective transition out of Afghanistan.' But that’s not really a list of what Obama would do in his second term. It’s a list of what he would like to do." Ezra Klein in The Washington Post.
2) LUCE: So much for a return to growth. "Another spring, another sputtering American recovery. For the third year in a row, what many anticipated to be a return to robust growth is beginning to look like another summer of hibernation. Last Friday’s payroll numbers showed a 115,000 drop in joblessness, barely enough to match population growth. And the ratio of Americans seeking work continues to go in the wrong direction, which flatters the official unemployment number. It fell a decimal point to 8.1 per cent last month. If no one had dropped out of the labour market, the official rate would have risen. None of this should be much of a surprise. There are plenty of external factors to blame - the crisis in the eurozone, the persistence of relatively high global oil prices and expectations of a slowdown in China and India. To a greater extent than before, the US economy is affected by what happens to demand elsewhere. US domestic spending power is no longer the prime mover in today’s global economy. That era is unlikely to return." Edward Luce in The Financial Times.
@ModeledBehavior: Demographics problems, housing surplus, skill shortage, gov't debt: all can be helped w/ more immigration. Stagnation is a choice we make
3) GROSS: The rise of renting could lead to the next boom. "In the American mind, renting has long symbolized striving--striving, that is, well short of achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they're OK with renting it. Homeownership is on the decline, and home rentership is on the rise. But the trend isn't limited to the housing market. Across the board--for goods ranging from cars to books to clothes--Americans are increasingly acclimating to the idea of giving up the stability of being an owner for the flexibility of being a renter. This may sound like a decline in living standards. But the new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to what might be called a Rentership Society, far from being a drag, will unleash a wave of economic efficiency that could fuel the next boom." Daniel Gross in The Wall Street Journal.
4) COWEN: The U.S. should be paying more attention to India's slowdown. "The economic slowdown in India is one of the world’s biggest economic stories, but it is commanding only a modicum of attention in the United States. It may not even look like a slowdown because by developed standards, India’s growth -- estimated by the International Monetary Fund at 6.9 percent for 2012 -- is still strong. But a slowdown it is: the economy has decelerated from projected rates of more than 8 percent, and negative momentum may bring a further decline. The government reported year-over-year growth in the October-through-December quarter of only 6.1 percent. What is disturbing is that much of the decline in the growth rate is distributed unevenly, with the greatest burden falling on the poor. If the slower rate continues or worsens, many millions of Indians, for another generation, will fail to rise above extreme penury and want. The problems of the euro zone are a pittance by comparison." Tyler Cowen in The New York Times.
5) PEARLSTEIN: We live in an era of government by hijacking. "If you want a perfect example of why government has become dysfunctional, look no further than the Board of Supervisors of Loudoun County, Va. A majority of the newly elected, all-Republican board has threatened to derail the extension of Metrorail out to Dulles Airport and beyond because of a requirement that the general contractor for the project negotiate a 'project labor agreement' with local construction unions...What we’re dealing with here is yet another example of government by hijacking. If we don’t get everything we want, we’ll kill the project, we’ll close the government, we’ll put the U.S. Treasury into default. As the infamous general said in Vietnam: We had to 'destroy the village in order to save it.' In this poisonous political atmosphere, every little disagreement becomes a test of wills that must be fought until a total victory is won. It’s not about what’s good for the country, or the state, or the county -- it’s all about politics and winning." Steven Pearlstein in The Washington Post.
Top long reads
Michael Specter on the promise and risks of geoengineering the climate: "For years, even to entertain the possibility of human intervention on such a scale--geoengineering, as the practice is known--has been denounced as hubris. Predicting long-term climatic behavior by using computer models has proved difficult, and the notion of fiddling with the planet’s climate based on the results generated by those models worries even scientists who are fully engaged in the research. 'There will be no easy victories, but at some point we are going to have to take the facts seriously,’' David Keith, a professor of engineering and public policy at Harvard and one of geoengineering’s most thoughtful supporters, told me...There is only one reason to consider deploying a scheme with even a tiny chance of causing such a catastrophe: if the risks of not deploying it were clearly higher. No one is yet prepared to make such a calculation, but researchers are moving in that direction."
Minneapolis hip hop interlude: Doomtree plays "Fresh New Trash" live at WFUV.
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Still to come: Confusion over the timeline for the 'Volcker Rule'; The FDA user fee bill is increasingly likely to pass; Senate Democrats look for GOP votes on cybersecurity; TransCanada is trying again on Keystone XL; and livestream of kittens.
HAMP is continuing its slow growth. "Three years after the Obama administration launched its main mortgage-assistance effort, nearly 800,000 homeowners have received assistance. It’s not a huge milestone, given that officials initially estimated that up to 3 million homeowners would qualify. But it’s an indication that the program is still growing, if slowly. Treasury Department statistics released Friday showed the government’s Home Affordable Modification program helped nearly 795,000 U.S. homeowners avoid losing their homes through permanent loan modifications as of March. That was up roughly 12,000 from about 783,000 in February. Only about 43% of the more than 1.8 million homeowners who started the program since its launch in spring 2009 have remained enrolled. Most of the remainder either didn’t qualify for the program after an initial trial phase or were unable to make payments and dropped out." Alan Zibel in The Wall Street Journal.
@neilbarofsky: Remember when Treasury was going to modify 25,000 mortgages per week via HAMP? Now 12,000 per month.
Confusion reigns on the timeline for implementing the 'Volcker Rule.' "The Federal Reserve's attempt to clarify the 'Volcker rule' is only creating more confusion. At issue is whether the Fed is requiring banks to start scaling back on making bets with their own money almost immediately, or whether they can continue until the ban on such activities goes into effect in two years. Law firms, bankers, analysts and members of Congress are divided on what the Fed is advising. The matter may come down to the interpretation of just two words: 'good faith.'...The Fed largely calmed bankers' fears when it said in its guidance that it expects banks to 'engage in good-faith planning efforts' to make sure they comply with proprietary-trading restrictions by July 21, 2014. That deadline follows a two-year 'conformance' period after the rule's implementation...But not everyone agrees that the Fed's guidance gives banks a free pass until the end of the conformance period." Scott Patterson in The Wall Street Journal.
China and the U.S. made mild progress on economic issues. "Leaders of China and the United States said Friday that they had made important progress on a range of economic issues at their annual bilateral meeting, with Prime Minister Wen Jiabao of China saying the areas of agreement included 'some important breakthroughs.' China agreed to remove what United States officials said were unfair subsidies and favorable regulations affecting state-owned corporations and to allow foreigners to take bigger stakes in Chinese securities firms, according to a senior official of the United States delegation who spoke on condition of anonymity...For the first time, according to senior United States officials, Chinese policy makers said they would commit to removing advantageous financing and regulatory conditions for state-owned enterprises, a significant step forward in the eyes of the administration of President Obama, the official said, even though such changes may take years." Michael Wines and Annie Lowrey in The New York Times.
College graduates are increasingly turning to unpaid internships. "Confronting the worst job market in decades, many college graduates who expected to land paid jobs are turning to unpaid internships to try to get a foot in an employer’s door. While unpaid postcollege internships have long existed in the film and nonprofit worlds, they have recently spread to fashion houses, book and magazine publishers, marketing companies, public relations firms, art galleries, talent agencies -- even to some law firms...The Labor Department says that if employers do not want to pay their interns, the internships must resemble vocational education, the interns must work under close supervision, their work cannot be used as a substitute for regular employees and their work cannot be of immediate benefit to the employer. But in practice, there is little to stop employers from exploiting interns." Steven Greenhouse in The New York Times.
The U.S. won't let foreign students work in warehouses. "The State Department, responding to a wave of complaints from foreign students about abuses under a summer cultural exchange program, issued new rules on Friday significantly revising the types of jobs the students can do, prohibiting them from most warehouse, construction, manufacturing and food-processing work. The rules are the most extensive changes the State Department has made to its largest cultural exchange program since several hundred foreign students protested last summer at a plant in Pennsylvania...The five-decade-old Summer Work Travel Program brings more than 100,000 foreign university students here each year to work for up to three months and then travel for a month. The program, which uses a visa known as J-1, is designed to give students who are not from wealthy backgrounds a chance to experience the United States. The students’ trips are arranged by American sponsoring agencies that find jobs and housing for them." Julia Preston in The New York Times.
Flash mob interlude: The Copenhagen Philharmonic Orchestra plays Grieg's "Peer Gynt" on the Copenhagen Metro.
The FDA user fee bill seems set to pass. "A major Food and Drug Administration user fee bill is so 'must-pass' that it’s unlikely to get entangled in more GOP efforts to defund or repeal the 2010 health law, according to congressional staffers and industry sources pushing hard to get the bill through. There’s a bipartisan push to get the FDA bill -- negotiated with the medical device and pharmaceutical industries -- enacted ahead of the Supreme Court ruling on the health reform law expected in June, which could quickly pull a relatively bipartisan health-related bill into a swamp of political grandstanding...Although there have been some partisan hiccups on the House side, Republican and Democratic staffers expect to be able to mark up a bipartisan agreement by the House Energy and Commerce’s Health Subcommittee on Tuesday. The full committee is expected to take up the legislation on Thursday and industry sources said committee leaders hope to move it to the House floor under a suspension of rules, a sign of optimism that it could move quickly." Brett Norman in Politico.
Some are pushing for a House vote on the Senate postal reform bill. "Lawmakers hoping to force a House vote on a Senate-passed postal reform bill believe some of their colleagues could be swayed by their message of saving jobs and rural access to postal services. Rep. Peter Welch (D-Vt.), who is circulating a letter of support for the Senate bill with Rep. Michael Grimm (R-N.Y.), also told The Hill that the measure has momentum behind it after clearing the Senate in late April...The Senate bill, which was sponsored by a bipartisan quartet from the Senate Homeland Security Committee, would at best allow USPS to move to five-day delivery, one of the service’s key cost-cutting initiatives, after two years...But top House Republicans - like Rep. Darrell Issa (R-Calif.), the chairman of the Oversight Committee and the sponsor of a GOP postal overhaul plan - have called the Senate plan insufficient, and Issa even suggested that the effects of the Senate bill become worse over time." Bernie Becker in The Hill.
Senate Democrats are working on changes to their cybersecurity bill meant to win GOP votes. "Senate Democrats are quietly revamping cybersecurity legislation in an attempt to pick up Republican votes. The move is an acknowledgement that they currently lack the 60 votes needed to bring their preferred bill to the floor...The White House and Senate Democrats argue that CISPA lacks adequate privacy protections and would fail to protect critical infrastructure, such as electrical grids, banks or water supplies. They have endorsed an alternative bill from Sens. Joe Lieberman (I-Conn.) and Susan Collins (R-Maine) that includes tougher privacy protections and would authorize the Homeland Security Department to set mandatory security standards for critical infrastructure...But a group of Republicans, led by Sen. John McCain (Ariz.), has slammed the Lieberman-Collins Cybersecurity Act as an example of big government overreach." Brendan Sasso in The Hill.
Livestream interlude: A livestream of kittens hanging out together.
The boom in renewable energy could soon turn into a bust. "Although renewable energy - not derived from fossil fuels - still accounts for less than a tenth of total US energy use, it has been growing fast. Between 2006 and 2011 renewable electricity generation, excluding hydro power, doubled to 195m megawatt hours: enough to power 17m American homes, roughly one in every seven. That boom, however, is on the brink of turning into a bust. As federal government support goes into precipitous decline as time-limited subsidies expire, the clean energy industry is facing a 'funding cliff' according to a recent analysis by authors from three leading US think-tanks...Subsidies including grants, loan guarantees and tax credits for technologies such as nuclear power, electric vehicles and advanced biofuels, as well as renewables such as solar and wind, are set to fall from a peak of $44.3bn in 2009 to just $11bn by 2014" Ed Crooks in The Financial Times.
TransCanada reapplied for a permit for Keystone XL. "TransCanada, the company behind the disputed Keystone XL pipeline, submitted a new application for the project to the State Department on Friday, as expected. The company will route the pipeline around the environmentally sensitive Sand Hills region of Nebraska, and the revised proposal starts a fresh clock on the environmental review process. The State Department, which reviews pipeline projects that cross national borders, will probably need at least until the first quarter of 2013 to finish reviewing the new application -- pushing a final decision on the project beyond the presidential election...The company’s revised application includes a number of possible routes that would run about 850 miles from the Canadian border to Steele City, Neb., and TransCanada officials have said they will avoid the Sand Hills region of the state, which was the focus of passionate political and environmental opposition." Dan Frosch in The New York Times.
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