Wonkbook: A thaw in the Senate?

May 22, 2013

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(AP Photo/J. Scott Applewhite)
(AP Photo/J. Scott Applewhite)

Two remarkable things happened in the U.S. Senate on Tuesday.

The first is that the immigration bill cleared the Senate Judiciary Committee. The final vote of 13-5 joined 10 Democrats and three Republicans in the "aye" column. If it holds, it's a ratio that could clear a Senate filibuster -- though not one that could survive the House of Representatives. The bill is expected to hit the Senate floor in June.

The second was the forceful entry of Sens. John McCain and Susan Collins in the budget debate. The quick background here is that congressional Republicans have spent years calling for a return to "regular order" in which the House writes a budget, the Senate writes a budget, and the two chambers move to a conference committee to hash out their differences. This year, for the first time since 2009, Senate Democrats wrote and passed a full budget, shepherding it to passage through an open amendment process. Now various Senate Republicans are blocking the move towards conference -- blocking, in other words, the move towards the regular order they demanded.

On the Senate floor last night, McCain and Collins unloaded on their colleagues. "What are we on my side of the aisle doing?" McCain asked. "We don't want a budget unless we put requirements on the conferees that are absolutely out of line and unprecedented?"

For years now, congressional observers have wondered when Republican members of the Senate would tire of gridlock and decide to return to a more traditional approach to legislating. It's too early to say that that's actually happening. But on a couple of issues, at least, there are signs of it. The Senate is beginning to look a bit more like the Senate again.

Wonkbook's Number of the Day: 13-5. That's the vote to bring the Senate's immigration bill out of the Judiciary Committee and to the floor. More below in the lead story.

Wonkbook's Quotation of the Day: “There are going to be some ugly numbers in there...It is not the optimal situation," said Rep. Mike Simpson of the House Appropriations Committee bill to reallocate sequestered discretionary funding.

Wonkblog's Graphs of the Day: Tornadoes in numbers.

Wonkbook's Top 5 Stories: 1) here comes immigration reform; 2) a primer on disaster-relief policy; 3) Apple and the American corporate tax code; 4) IRS revelations continue; and 5) turbulence ahead in budget issues.

1) Top story: Immigration floor debate begins in June

Immigration reform heads to the Senate floor. "The Senate Judiciary Committee passed a sweeping reworking of immigration laws on Tuesday evening, giving a bipartisan bill its first formal stamp of approval in Congress. After five days reviewing the more than 800 pages of the bill and accepting 100-plus amendments, the committee voted 13-5 to send the legislation to the full Senate, which is expected to take it up in early June." Kristina Peterson in The Wall Street Journal.

@justinwolfers: I'm in the waiting room at US Citizenship & Immigration Services. It's beautiful seeing people beam with joy at their newfound citizenship.

Debate begins in June. "The legislation emerged with its core provisions largely intact, including new visa programs for high-tech and low-skilled workers and new investments in strengthening border control...The comprehensive bill is now headed to the full Senate, where Minority Leader Mitch McConnell (R-Ky.) urged fellow Republicans on Tuesday not to block the bill from a floor vote. The Congressional Budget Office will take two weeks to issue an assessment of the fiscal cost of the bill, so Democratic aides said the floor debate could begin around June 10." David Nakamura in The Washington Post.

@BobCusack: Some on right balking but Hatch's yes vote and McConnell's vow to vote yes on motion to proceed = momentum for immigration reform.

Leahy pulls same-sex amendment to bill. "The most emotional part of the committee process, which stretched over five days and 301 amendments, came late Tuesday, when Senator Patrick J. Leahy, the Vermont Democrat who leads the committee, said that he would not offer an amendment allowing United States citizens to apply for permanent resident status, known as a green card, on behalf of their same-sex partners. Mr. Leahy, according to immigration and gay rights advocates, was under pressure from the White House not to offer this amendment." Ashley Parker and Julia Preston in The New York Times. 

@mattyglesias: Cynical take: Dems have an incentive to lose on LGBT equity in immigration deal to be able to use the issue in future fundraising.

Another important change on H1-B visas. "Sen. Charles Schumer (D-N.Y.), a member of the chamber’s Gang of Eight, secured a compromise on a package of tech-friendly amendments by Sen. Orrin Hatch (R-Utah) after days of back-and-forth negotiations. The Senate Judiciary Committee approved the compromise language on Tuesday...The amendments from Hatch softens the requirements that employers would have to follow when hiring highly skilled workers on H-1B visas. Hatch had argued that the requirements, as written, would make it more difficult for tech companies to secure the visas they need to fill technical job positions, potentially forcing them to move those jobs abroad." Jennifer Martinez in The Hill.

@samsteinhp: remarkable that immigration reform passes 1st major hurdle and it will be, what, 4th most discussed news tomorrow?

And in the House, immigration hangs on health care. "House immigration negotiators have given themselves until the end of the week to hash out language on what kind of health benefits should be available to undocumented immigrants seeking U.S. citizenship, a crucial issue for the talks. If they can’t resolve this issue, the four-year immigration negotiations could come to a crashing halt...The provision, in essence, said immigrants seeking citizenship must provide their own health care — and if any government entity provides them with services, they would be ineligible for permanent citizenship...Top Democrats are concerned that in emergency situations, for example, undocumented immigrants would be forced to undergo procedures that could bankrupt them, and eventually lead to deportation." Jake Sherman and John Bresnahan in Politico.

@thegarance: Obama on immigration bill: Congratulations! But also, "None of the Committee members got everything they wanted, and neither did I."

U.S. already began monitoring immigrant departures at Canadian border. "Hundreds of thousands of foreigners passing into Canada from the United States have unwittingly been a part of a grand experiment by the Department of Homeland Security to crack down on visitors who violate laws governing the length of their stay...The pilot project with Canada, conducted from September to January, involved about a third of the traffic across the northern American border, tracking the departure of 413,222 foreigners from the United States. Starting this year, according to Congressional officials who have been briefed on the plan, the information collected at the Canadian border will be used to prevent certain foreigners who have stayed too long in the United States from returning again by revoking tourist visas or taking other steps." Eric Lipton in The New York Times.

Music recommendations interlude: The National, "Trouble Will Find Me." (h/t Sarah Kliff)

Top op-eds

PORTER: A Keynesian victory, but austerity stands firm. "To go by the statements of most mainstream economists, one would be forgiven for believing this is the best of times for Keynesian economics...The confluence of [economic] events [has] provided further evidence of Keynes’s central proposition: when consumers and businesses set out to reduce their debt burden, and private spending and investment stall, it is the government’s job to borrow, spend and pick up the slack...But in many ways it is the worst of times for Keynesian economists. For despite all this intellectual firepower, governments across the industrial world are zealously tightening their belts." Eduardo Porter in The New York Times.

ORSZAG: As job flow slows, Americans get stuck. "After analyzing combined data from four employment surveys conducted from 1998 to 2010, Henry Hyatt and James Spletzer of the U.S. Census Bureau concluded that “rates of job creation, job destruction, hiring and separation declined dramatically, and the rate of job-to-job flows fell by about half.” In 1998, various surveys suggested that 8 percent to 10 percent of American workers switched jobs. In 2010, just 5 percent to 6 percent did." Peter Orszag in Bloomberg.

SOLTAS: Detroit's slow demise has not been averted. "President Barack Obama hails it. Super Bowl commercials celebrate it. But is it real? I refer, of course, to the vaunted recovery of the Detroit automakers. Do you see the resurgence in the data as well as in the high-gloss ads? Not really...There's nothing in production and sales data to convince an objective analyst that Detroit has broken this long-standing pattern [of decline]." Evan Soltas in Bloomberg.

YGLESIAS: The problem with the corporate income tax. "These zero-tax companies weren’t doing anything illegal. Rather it was thanks largely to an affirmative act of Congress that enabled companies to claim “accelerated depreciation” of their physical assets to offset earnings...The really big losers in the system, meanwhile, are typically big retailers and health insurance companies that don’t benefit from manufacturing tax subsidies and don’t have major foreign operations where earnings can be hidden. Meanwhile, the absurd stockpiling of cash in offshore tax havens by tech companies means that the money really can’t be used." Matthew Yglesias in Slate.

GRAMM AND MCMILLIN: The debt problem has not vanished. "Once the Federal Reserve's easy-money policy comes to an end and interest rates return to their post-World War II norms, the cost of servicing this debt will explode. The cost will increase further as the Fed sells down its $1.85 trillion holding of government bonds, and the Social Security system runs deeper and deeper into the red. The Treasury will then have to pay interest on an ever-growing percentage of the debt." Phil Gramm and Steve McMillin in The Wall Street Journal.

CROOK: Sympathy for the IRS. "I used to be a civil servant, so I also understand how stupid laws can create administrative chaos. The more I read about the scandal of the IRS and its scrutiny of conservative groups seeking tax-exempt status, the more convinced I am that the blame for this mess -- just like the blame for my having to put down my tripod -- lies almost entirely with Congress...Yet the intersection of [tax] rules with equally arcane U.S. campaign-finance laws raises the problem to a whole other level. Congress made the really big mistake in all this by mixing the two. Administration of the tax code should be kept separate from regulation of money in politics." Clive Crook in Bloomberg.

Modern Middle East interlude: Doing parkour in a headscarf is not as dangerous as it sounds, or one look at the lives of Iranian women.

2) What you need to know about disaster-relief policy

FEMA has boots on the ground in Okla. "FEMA spokesman Daniel Watson said three of its search-and-rescue teams arrived early Tuesday morning. He said the agency also sent a liaison to the state’s emergency-response center on Sunday, well before a tornado claimed dozens of lives while ripping through the city of Moore, Okla. FEMA has also deployed incident-management teams to the affected region to provide technical assistance and help with any needs that state and local officials cannot meet, in addition to sending survivor-assistance personnel to the state to help people register for federal aid, Watson said." Josh Hicks in The Washington Post.

Conservative Okla. legislators face dilemma: Will they support spending on tornado relief? "Oklahoma has one of the most conservative congressional delegations of any state: seven Republican men, including fierce advocates for cutting federal spending. Five of those seven voted no in January on a bill to provide $50 billion in disaster funding for states hit by Hurricane Sandy...On Tuesday, the disaster was Oklahoma’s instead, a deadly tornado that swept through the town of Moore on Monday afternoon. So those representing Oklahoma all faced the same question: Would they support an influx of new funding — if necessary — for disaster relief efforts in Oklahoma?...Coburn has said that any extra federal spending for disasters should be offset by cuts elsewhere. A spokesman said Coburn would stick to that demand." David A. Fahrenthold and Paul Kane in The Washington Post.

...But Dems want to move quickly on aid. "The No. 2 House Democrat said Tuesday he wants to make sure Oklahoma has all the money it needs to respond to Monday’s devastating tornado. Minority Whip Steny Hoyer (D-Md.) added that Democrats want to move quickly and predicted “overwhelming support” for such funding, similar to last year’s Hurricane Sandy." Tarini Parti in Politico.

A short history of violent tornadoes in the U.S. "It’s official: The massive tornado that ripped through Moore, Okla., on Monday has been rated an EF-5 — basically at the very top of the scale, with winds over 200 miles per hour...So how common is this? An EF-5 only comes around about once a year, on average. Here’s the National Climatic Data Center: “On average over 1000 tornadoes hit the U.S. each year, [and] 20 can be expected to be violent and possibly one might be incredible (EF5).”" Brad Plumer in The Washington Post.

...And why are tornadoes so hard to predict? "Just 16 minutes before a gigantic twister first developed near Oklahoma City on Monday, the National Weather Service put out a tornado warning...But those 16 minutes actually represent an enormous advance for weather science. Back in the 1980s, the average tornado lead time was a scant five minutes. Today, it’s about 13 minutes." Brad Plumer in The Washington Post.

Just a reminder: That Hurricane Sandy aid is still moving slowly. "Three-fourths of the small businesses battered by Hurricane Sandy are still waiting for U.S. government assistance, raising concerns among some about Midwest businesses hit by devastating tornadoes. The U.S. Small Business Administration has approved loans to one out of every four business owners who applied for assistance after Sandy hammered the East Coast in October, according to analysis of data the agency submitted to Congress." J.D. Harrison in The Washington Post.

NOAA is planning to furlough storm forecasters due to sequestration. "Some lawmakers are open to looking at sequestration’s effects on the National Oceanic and Atmospheric Administration, home to the National Weather Service and its 3,500 forecasters. But they said it’s too soon to know whether Congress has an appetite for making a sequester fix for the forecasters, similar to the ones lawmakers approved for air-traffic controllers and meat inspectors." Scott Wong in Politico.

Embarrassing moments interlude: That time when Wolf Blitzer asked an Oklahoma tornado survivor if she "thanked the Lord" on live TV and she responded "I'm actually an atheist."

3) What Apple reveals about the American corporate tax code

Apple CEO defends tax strategies. "Apple chief executive Tim Cook offered no apologies Tuesday for the way his company keeps tens of billions of dollars in overseas profits virtually free of U.S. taxes, amid sharp questions from lawmakers about the practice...Cook said the 35 percent corporate tax rate is too high and should be closer to the “mid-20s.” Separately, he said companies that bring cash back to the United States should have a tax rate closer to “single digits” on those sums." Cecilia Kang in The Washington Post.

Explainer: 5 things we learned from Apple's hearingNeil Irwin in The Washington Post.

One response to Apple's tax strategies? Copy it. "The Apple tax tactic that came in for denunciation at Tuesday’s Senate subcommittee hearing was not particularly difficult to carry out, and it seems to have been something known to some tax experts — but not to many of those whose job it is to write tax laws. “What impresses me is the effortlessness of Apple’s international planning,” said Edward Kleinbard, a tax law professor at the University of Southern California and a former chief of staff of the Congressional Joint Tax Committee...“It hinges,” said Mr. Kleinbard, “on nothing more than an Irish shell company whose management in fact is in Cupertino, and a contract between two arms of Apple’s single global enterprise with no economic significance to anyone outside of Apple. It’s as if Apple checked a box to elect out of worldwide taxation on a vast swath of their international income.”" Floyd Norris in The New York Times.

Sen. Paul, the Apple polisher. "This much is clear from the first hour of the Senate Permanent Subcommittee on Investigations hearing on Apple’s steps to avoid paying billions in U.S. corporate income tax: It will be primarily an exercise in righteous indignation for the senators present; and there will be at least one lawmaker with a quite different take...“If anyone should be on trial here, it should be Congress,” Paul continued. “I frankly think the committee should apologize to Apple. The Congress should be on trial here for creating a Byzantine and bizarre tax code.”" Neil Irwin in The Washington Post.

Heartrending interlude: Just watch this. Trust Wonkbook. You'll be glad you did

4) Revelations continue in IRS scandal

Internal IRS probe had found these problems as early as May 2012. "An Internal Revenue Service review of the agency’s approach of scrutinizing conservative groups seeking tax-exempt status questioned the now-controversial policy a year ago, according to House Oversight and Government Reform Committee spokesman Ali Ahmad...On May 3, 2012. Marks gave what IRS officials described as a “presentation” to Miller describing her findings. Marks said the investigation had found significant problems in the review process and a substantial bias against conservative group, Ahmad said. No written findings were produced as a result, the aide said, and it does not appear the internal review led to any disciplinary actions against IRS employees." Juliet Eilperin in The Washington Post.

Live blog: Read and watch important moments from the Senate's IRS hearingAaron Blake in The Washington Post.

Clarifications only bring confusion on IRS. "Why would it be inappropriate for the president to know what his chief of staff, his counsel and others on his senior staff knew and were talking about with others in the government? Would telling him require him to do something inappropriate? Would he be open to criticism if he knew and stood idly by? Perhaps, but if his top advisers knew weren’t inclined to act inappropriately, why would the president?" Dan Balz in The Washington Post.

IRS's Lerner to plead the Fifth. "Embattled IRS official Lois Lerner will invoke her Fifth Amendment right not to incriminate herself when she appears before the House Oversight Committee on Wednesday. In a letter to Oversight Chairman Darrell Issa (R-Calif.), Lerner’s attorney William W. Taylor III cites the Justice Department’s criminal investigation into the issue of whether the IRS singled out tea party and other conservative groups for extra scrutiny." Lauren French and Ginger Gibson in Politico.

...And we haven't received any apologies from Douglas Shulman, yet. "Former IRS commissioner Douglas Shulman doesn’t think he has to apologize for the wrongdoing that occurred at the IRS on his watch, and he repeatedly refused to do so at a Senate Finance Committee hearing on Tuesday. We’ll see how long that lasts." Aaron Blake in The Washington Post.

Debate: How should we set a balance between media disclosures and national securityThe New York Times.

Watchdog group suing IRS for tighter exemption rules. "“As the ongoing IRS scandal shows, the 501(c)(4) regulation is unmanageable,” said CREW executive director Melanie Sloan. “It clearly conflicts with the tax code and IRS employees are simply at a loss as to how to apply it.”" Josh Hicks in The Washington Post.

The IRS controversy isn't about taxes. It's about disclosure. "[W]hy are these groups so eager to keep their 501(c)4 status if it, if anything, puts them at a disadvantage tax-wise? It’s simple: disclosure. 501(c)4s can accept unlimited donations and don’t have to tell a soul from whence they came. 527s, including super-PACs, have to file quarterly reports disclosing donors...The key question, then, in considering what should come next for 501(c)4s, is not “should groups like this have to pay taxes.” They’re never going to have to pay taxes. It’s whether they should have to disclose their donors." Dylan Matthews in The Washington Post.

"Nontroversies" interlude: Is the G in "GIF" soft or hard?

5) Seeds of turmoil sown in future budget debates

GOP begins intra-party fight over budget procedure. "Long-simmering divisions among Republicans burst into public view Tuesday evening, when GOP moderates challenged tea-party conservatives on the Senate floor over their refusal to proceed to formal negotiations with Democrats over the federal budget...Their reason: Democrats can’t be trusted not to sneak in an automatic increase in the federal debt limit." Lori Montgomery in The Washington Post.

House panel OKs huge spending cuts. "Sequestration 2 opened at the House Appropriations Committee on Tuesday as Republicans won approval of their dramatic plan to reallocate the reduced funding available after the second round of spending reductions slated for October. Discretionary spending would drop to $967 billion — $17 billion below where appropriations stand now after the first round of cuts in March. And within this tighter cap, labor, health and education programs are to be transformed into a virtual GOP bank to help finance a $28 billion increase for defense...Indeed, the $121.7 billion allocated to the giant annual Labor, Education, Health and Human Services bill is the lowest since 1998 when adjusted for inflation. Transportation and housing programs are also hit hard together with the Interior Department and Environmental Protection Agency...“There are going to be some ugly numbers in there,” Simpson told POLITICO. “It is not the optimal situation.”" David Rogers in Politico.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Self-driving cars are a privacy nightmare. But it's totally worth itTimothy B. Lee.

Study: Election officials are biased against Latino votersDylan Matthews.

A brief history of America's fluoride wars, and some more follow up hereSarah Kliff.

The end of health price secrecy may be starting in MiamiSarah Kliff.

A short history of violent tornadoes in the United StatesBrad Plumer.

Five things we learned from Tuesday’s big Apple tax hearingNeil Irwin.

The IRS controversy isn’t about taxes. It’s about disclosureDylan Matthews.

Let artists, innovators and the public define our copyright systemDerek Khanna.

Why are tornadoes so hard to predictBrad Plumer.

Rand Paul unloads on ‘bullying, berating and badgering’ of AppleNeil Irwin.

Et Cetera

Obama announces members of commission to review election process. Ashley Southall in The New York Times.

In Europe, a Fed president urges quantitative easingJack Ewing in The New York Times.

And the Fed's Dudley wants to play wait-and-see with QEMichael S. Derby in The Wall Street Journal.

Moniz wants Congress to pass energy-efficiency legislationBen German in The Hill.

Senior DoE official suggests more natural-gas export approvals comingZack Colman in The Hill.

U.S. court rejects Arizona law imposing new curbs on abortionThe Washington Post.

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

Wonkbook is produced with help from Michelle Williams.

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Brad Plumer · May 21, 2013