Wonkbook: The stimulus debate’s final chapter

February 18

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Evan Soltas. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.


All of the dollars. (bigstockphoto)

Wonkbook's Number of the Day: 2 million. That's how many people have been deported from the U.S. since Barack Obama became president. For reference, that's roughly the population of Houston, Texas that lives within city limits.

Wonkbook's Graphs of the Day: How the Council of Economic Advisers assesses the 2009 stimulus.

Wonkbook's Top 5 Stories: (1) the last stimulus report; (2) NSA on NSA; (3) reversing the wave of deportations; (4) Indiana moving towards gay-marriage ban; and (5) finance roars back.

1. Top story: The stimulus debate's final chapter

White House, Republicans rekindle fight over 2009 stimulus. "Democrats and Republicans used the fifth anniversary of the 2009 stimulus law to renew the bitter debate over whether the measure, at a cost of more than $800 billion, sparked job growth and helped ease the country out of recession, or simply worsened the nation's debt load...The White House on Monday released a report that said the law "saved or created an average of 1.6 million jobs a year for four years" and raised the country's gross domestic product by between 2% and 3% from late 2009 through mid-2011. The spending "initiated" 15,000 transportation projects and helped with the construction or improvement of nearly 6,000 miles of railway lines, the report said. On one of the most polarizing points, the White House report said the law "had at most a minimal impact on the long-run debt," arguing that the legislation resulted in economic growth that offset or eliminated its costs." Damian Paletta and Janet Hook in The Wall Street Journal.

Report: The Economic Impact of the American Reinvestment and Recovery Act Five Years Later.

Another view of the stimulus. "The Recovery Act jump-started clean energy in America, financing unprecedented investments in wind, solar, geothermal and other renewable sources of electricity. It advanced biofuels, electric vehicles and energy efficiency in every imaginable form. It helped fund the factories to build all that green stuff in the U.S., and research into the green technologies of tomorrow. It’s the reason U.S. wind production has increased 145% since 2008 and solar installations have increased more than 1,200%. The stimulus is also the reason the use of electronic medical records has more than doubled in doctors’ offices and almost quintupled in hospitals. It improved more than 110,000 miles of broadband infrastructure. It launched Race to the Top, the most ambitious national education reform in decades." Mike Grunwald in Time Magazine.

For your reference: What top economists think about the stimulusIGM Forum.

Rubio's view. “If you recall five years ago, the notion was that if the government spent all this money — that, by the way, was borrowed— that somehow the economy would begin to grow and create jobs. Well, of course, it clearly failed,” Rubio says in the video, according to POLITICO’s Mike Allen in Playbook. “Five years later, underemployment is still too high, the number of people that have dropped out of the workforce is astounding, unemployment remains stubbornly high and our economy isn’t growing fast enough — proof that massive government spending, particularly debt spending, is not the solution to our economic growth problems."" Jose DelReal in Politico.

@Grunwald: Thanks to all for the nice words, but let's face it: On the stimulus, the myths beat the facts. Despite my 400-page doorstop.

Republicans let concerns about debt fall to the wayside. "Senators Mitch McConnell and John Cornyn, two Republican leaders facing primary challenges, knew they would take an immediate political hit from the Republicans’ Tea Party wing by voting to clear the way for a debt-limit increase. They also knew that their willingness to cast that vote would enhance their party’s chances of gaining a majority in the Senate next year...Democrats acknowledge that the Republican retreat on the debt issue was politically wise and represents yet another factor in the mounting concerns over their own Senate prospects." Carl Hulse and Jonathan Martin in The New York Times.

MCBRIDE: What we could have done better in 2009. "It is important for the future to set aside ideology and recognize that the American Recovery and Reinvestment Act of 2009 helped the economy. The stimulus could have been structured differently, for example, why have tax incentives for businesses to invest when their is already too much capacity? And research suggests the cash-for-clunkers program was not very helpful. And more importantly - knowing that recoveries from financial crisis are slow - investment in infrastructure could have been larger and lasted longer." Bill McBride on the Calculated Risk blog.

@Claudia_Sahm: "Well we will never really *know* how well the stimulus worked." ... one of the more depressing things said to me by a seasoned forecaster

VINIK: The unloved stimulus. "Should the Recovery Act have been larger? Sure. And a few people, like Paul Krugman and Joseph Stiglitz, made the case at the time. But that would have been difficult, and quite possibly impossible, given the lack of political support on Capitol Hill. And even if the program wasn’t big enough to create a strong recovery, it saved the country from a second Great Depression while funding transformative programs that will benefit America for decades to come." Danny Vinik in The New Republic.

Music recommendations interlude: The Raconteurs, "You Don't Understand Me."

Top opinion

SEIB: Presidential power in transformation. "[P]erhaps this is the new normal, not a temporary aberration. Perhaps what we think of as presidential power is changing in fundamental and lasting ways. A series of forces are converging to change how a president can best hope to have an impact: The nation's deep and abiding political divide makes political consensus elusive on the biggest issues. A gerrymandered House of Representatives renders Congress virtually irrelevant on some matters. Long-term fiscal constraints make it hard to conjure up traditional government programs, while the public has lost confidence in many conventional government solutions. Meantime, states, cities and nongovernment organizations are rising as venues for problem-solving." Gerald F. Seib in The Wall Street Journal.

Debate: How will Obama’s paragraph read? Did he get it right? What will be his place in historyPolitico.

BROOKS: The prodigal sons. "We live in a divided society in which many of us in the middle- and upper-middle classes are like the older brother and many of the people who drop out of school, commit crimes and abandon their children are like the younger brother. In many cases, we have a governing class of elder brothers legislating programs on behalf of the younger brothers. The great danger in this situation is that we in the elder brother class will end up self-righteously lecturing the poor: “You need to be more like us: graduate from school, practice a little sexual discipline, work harder.”" David Brooks in The New York Times.

YESELSON: After Chattanooga. "Because most workers weren’t particularly looking for a union to address problems they didn’t believe they had with the company in the first place — because VW was drafted into a cooperative relationship by the UAW, rather than seen as an galvanizing adversary — they didn’t think that the (literally) foreign concept of works council presented much of value proposition for them that would be worth one to two percent of their income in dues payments." Rich Yeselson in Jacobin.

Interview: Nobel laureate economist Michael SpenceJonathan Schlefer in The New York Times.

PIERESON: The truth about the 'One Percent.' "This crusade is based on three questionable claims. One is that the wealthy are mostly Wall Street bankers benefitting from rising stock and real estate prices, or executives who pay themselves extravagant salaries. Another claim is that such people unfairly benefit from a system that taxes capital gains at half the highest marginal rate paid by those who earn salaries and wages. Then there is the assertion that the "super rich" have abundant funds that can be taxed to improve the living standards of everyone else. All of these claims are false" James Piereson in The Wall Street Journal.

ROOSE: Inside a Wall Street secret society. "Recently, our nation’s financial chieftains have been feeling a little unloved. Venture capitalists are comparing the persecution of the rich to the plight of Jews at Kristallnacht, Wall Street titans are saying that they’re sick of being beaten up, and this week, a billionaire investor, Wilbur Ross, proclaimed that “the 1 percent is being picked on for political reasons.” Ross's statement seemed particularly odd, because two years ago, I met Ross at an event that might single-handedly explain why the rest of the country still hates financial tycoons – the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi." Kevin Roose in New York Magazine.

What a month for this interlude: 3 white "Jeopardy" contestants all try to avoid the "African-American History" category.

2. What the NSA head thinks about the NSA

Spy chief: We should have told you we track your calls. "Even the head of the U.S. intelligence community now believes that its collection and storage of millions of call records was kept too secret for too long...In an exclusive interview with The Daily Beast, Clapper said the problems facing the U.S. intelligence community over its collection of phone records could have been avoided. “I probably shouldn’t say this, but I will. Had we been transparent about this from the outset right after 9/11—which is the genesis of the 215 program—and said both to the American people and to their elected representatives, we need to cover this gap, we need to make sure this never happens to us again, so here is what we are going to set up, here is how it’s going to work, and why we have to do it, and here are the safeguards… We wouldn’t have had the problem we had,” Clapper said." Eli Lake in The Daily Beast.

Eric Cantor blasts ‘isolationist sentiment.’ "Make no mistake: Eric Cantor sides with the strong-on-defense wing of the GOP. In a Presidents Day speech prepared for delivery at the Virginia Military Institute, the House majority leader offers a full-throated rebuke of the “isolationist sentiment” he says caused the United States to hesitate to enter World War II and again threatens to unleash global horrors...It also provides a window into the foreign policy rhetoric that can be expected of establishment Republicans running for president in 2016 as they seek to counter the policies of the president on one side and tea party-backed primary challengers on the other." Austin Wright in Politico.

When should shoppers hear about hacks? It’s complicated. "When companies must notify consumers of breaches, how they notify them and how much they disclose is governed by a dizzying mosaic of state laws. The Securities and Exchange Commission has said public companies hit with breaches should inform consumers in a timely manner — as long as doing so doesn’t interfere with law enforcement investigations. But there is no national law that compels retailers or any firm to disclose a data breach." Hayley Tsukayama in The Washington Post.

Urban interlude: High-speed video on the Berlin subway.

3. Reversing the wave of deportations

Immigration protest sparks arrests outside White House. "Around 30 religious leaders, immigrants, and supporters holding signs and singing songs in protest to President Obama’s deportation policy were arrested outside the north gate of the White House Monday. The President’s Day protest was organized by the United Methodist Church and the National Day Laborer Organizing Network. The UMC reported on its website Monday afternoon that more than 50 people attended the protest. More than 2 million people have been deported during President Obama’s five years in office, according to data from the Department of Homeland Security. In comparison, the George W. Bush administration deported around 2 million people during Bush’s eight years in office." Erin Delmore in MSNBC.

Polls: Public's immigration priorities changing. "According to a Gallup survey released Monday, 44% of those surveyed say it's extremely important for the United States to develop a plan to deal with the large number of undocumented immigrants. Forty-three percent say the top priority should be beefing up border security to halt the flow of undocumented workers into the country. That's a shift from 2011, when Gallup polling indicated border security trumped dealing with immigrants already in the country...According to the CNN survey, 54% said the top priority for the government in dealing with the issue of illegal immigration should be developing a plan that would allow those with jobs to eventually become legal U.S. residents." CNN.

I could watch this all day interlude: Slovakian hockey player butt-checks opponent in Olympics.

4. Because banning gay marriage is sure to be a winner in 2016...

Indiana Senate votes for constitutional ban on gay marriage. "A proposed constitutional amendment in Indiana that would have banned same-sex marriage won't go on the ballot this year. The Indiana Senate passed the measure, known as House Joint Resolution 3, on a 32-17 vote Monday. But because its provisions were changed before a House vote Jan. 28, the three-step process of amending ­Indiana's constitution restarts. The vote came after the Senate declined Thursday to restore the amendment's second sentence, which also would have banned civil unions and similar arrangements. Instead, the General Assembly must approve the ban again in 2015 or 2016 before a public referendum could happen in November 2016." Tony Cook and Barb Berggoetz in The Indianapolis Star.

Who’s the judge who ruled on Va.’s ban on gay marriage? A seeker of ‘more perfect’ freedom. "Arenda L. Wright Allen made history in 2011 by becoming the first black woman nominated to serve as a federal district judge in Virginia. On Thursday, she cemented her legacy with a sweeping decision striking down Virginia’s ban on same-sex marriage in a moment she said makes “our freedom more perfect.”...But her forceful and sometimes grandiose 41-page ruling — issued on the eve of Valentine’s Day and including an unapologetic defense of a federal judge’s duty to strike down a democratic decision that may intrude on constitutional rights — seemed to draw special attention." Robert Barnes and David A. Fahrenthold in The Washington Post.

What academia is up to interlude: Trolls just want to have fun.

5. Financial prosperity returns, if only for some

401k balances rise with record gains on Wall Street. "Wall Street’s historic gains in 2013 have boosted the value of Americans’ retirement accounts to record highs, according to several plan managers, restoring a critical component of household wealth. Fidelity Investments, the nation’s largest provider of retirement plans, said the average balance in its accounts at the end of last year was $89,300 — nearly double the amount during the depths of the recession. Vanguard, another major fund manager, said its plans clocked in at $101,650, the highest level since it began tracking the data in 1999." Ylan Q. Mui in The Washington Post.

Student debt may hurt housing recovery by hampering first-time buyers. "The growing student loan burden carried by millions of Americans threatens to undermine the housing recovery’s momentum by discouraging, or even blocking, a generation of potential buyers from purchasing their first homes. Recent improvements in the housing market have been fueled largely by investors who snapped up homes in the past few years. But that demand is waning as prices climb and mortgage rates rise. An analysis by the Mortgage Bankers Association found that loan applications for home purchases have slipped nearly 20 percent in the past four months compared with the same period a year earlier." Dina ElBoghdady in The Washington Post.

Obama has a new cabinet member you’ve never heard of — Marianne Markowitz. "One week ago, without any fanfare, Markowitz stepped into the role of acting administrator of the SBA, a cabinet-level position, replacing Jeanne Hulit, who had held the position since September. And while Markowitz isn’t expected to hold her new title for long — lawmakers are currently vetting Obama’s formal nominee — she will spend at least a couple weeks as part of the president’s top circle of senior executives." J.D. Harrison in The Washington Post.

Debate interlude: Labor's future in the South?

Wonkblog Roundup

Cows are incredible: They might just keep producing more milk foreverLydia DePillis.

When should shoppers hear about hacks? It’s complicatedHayley Tsukayama.

401k balances rise with record gains on Wall StreetYlan Q. Mui.

Et Cetera

Financier plans big ad campaign on climate changeNicholas Confessore in The New York Times.

Congressional Republicans are focused on calming their divided ranksRobert Costa in The Washington Post.

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

Wonkbook is produced with help from Michelle Williams.

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Evan Soltas · February 17