Friday, June 18, 2010; 7:16 AM
Thursday was not a great day for Democratic congressional leadership: A Senate Democratic caucus meeting ended without consensus on a climate bill; the GOP, helped by Ben Nelson and Joe Lieberman, successfully filibustered the weakened jobs bill; and following criticism of the NRA's exemption from its requirements, Nancy Pelosi has pulled today's vote on the DISCLOSE Act. Ouch.
Well, they can take comfort in the fact that it's Friday. Welcome to Wonkbook.
No consensus came out of a Senate Democrats meeting on climate legislation, reports Darren Samuelsohn: "Majority Leader Harry Reid of Nevada dedicated an hourlong session to a 'full, frank discussion' of three competing proposals for overhauling the nation's energy policies and trimming greenhouse gas emissions. But senators spoke for so long that they had to bump back a more detailed question-and-answer session for another meeting that's tentatively scheduled for next week."
Senate liberals are threatening to bolt on an energy bill that doesn't price carbon, reports Alexander Bolton: "Some of the strongest critics of offshore drilling within the Democratic Conference now warn they may not vote for it without a measure to require industry to pay for carbon pollution. 'It's hard to imagine that I would support it,' said Sen. Frank Lautenberg (D-N.J.), after Democrats met Thursday to discuss energy legislation.¿[Sen. Sheldon] Whitehouse said 'it would be very challenging' to vote for an energy bill that did not take a significant step to limit carbon emissions.¿'We obviously don't have comprehensive energy reform unless we address the pollution that comes from carbon,' said Sen. Jeanne Shaheen (D-N.H.)."
Ben Nelson, Joe Lieberman, and every Republican in the Senate voted to filibuster the jobs bill, reports Lori Montgomery: "Democrats believed they had secured the votes of at least two Republicans: Sens. Olympia J. Snowe (Maine) and Scott Brown (Mass.). But any deal unraveled during a long day of talks Thursday, leaving Democrats frustrated and perplexed. 'We thought we had enough votes to pass this,' Reid told reporters, adding that Lieberman had been prepared to come on board. He and Senate Finance Committee Chairman Max Baucus (D-Mont.) said they would regroup Friday. But aides said the path forward would not become clear until next week at the earliest."
Nancy Pelosi has pulled today's scheduled vote on the DISCLOSE Act after complaints from Blue Dogs and the Congressional Black Caucus, reports John Bresnahan: "The Blue Dogs are concerned that opposition from the Chamber, National Federation of Independent Business, National Association of Realtors and other business groups will damage their reelection prospects in the fall. The CBC, on the other hand, was unhappy about an exemption to the bill granted to the National Rifle Association agreed to by Van Hollen. While the exemption was later extended to other groups, the CBC remained concerned about the bill's potential impact on the NAACP and other progressive groups."
"You disappoint me, Buzz" interlude: A Wire/Toy Story mashup.
Still to come: In economic news, the crisis in Europe is oushing down prices in the US; in energy news, Rep. Joe Barton's ranking membership on the energy committee is in danger after he apologized to BP; in the domestic policy arena, the federal government has responded to state lawsuits on health care reform; and in FinReg, New York banking allies are planning an 11th-hour lobbying push to weaken the bill.
The crisis in Europe has caused a dip in US prices, reports Neil Irwin: "A silver lining of the European debt crisis is starting to emerge: falling prices in the United States. Consumer prices fell 0.2 percent in May, the Labor Department said Thursday. The department said Wednesday that wholesale prices fell 0.3 percent. Both were driven by a dip in global prices for oil and other commodities caused by investor concern that, given the troubles in Greece and other European nations, the global recovery could slow."
But it could also widen the trade deficit: http://bit.ly/aluRr8
The House has passed $30 billion in capital loans to small businesses, reports Martin Vaughn: "Banks with total assets of less than $10 billion would be eligible to receive capital investments from the fund, under the bill from House Financial Services Committee Chairman Barney Frank (D., Mass.). Banks with higher rates of lending to small businesses and farms would qualify to have interest rates lowered on those capital infusions. The bill would also provide $1 billion, to be matched by private capital, for a new equity financing program for start-ups. That fund will be overseen by the Small Business Administration."
House-Senate tensions are rising as a result of the jobs bill fight: http://bit.ly/digpd3
Democrats defeated Republicans' alternative jobs proposal, report Corey Boles and Martin Vaughan: "The Republican measure would have stripped out $24 billion in fiscal aid to state governments and introduced broad budget cuts to most federal agencies in order to fully offset the cost of the legislation. Like the Democratic version of the bill, it would renew a popular series of tax cuts aimed at businesses and individuals, continue federal jobless benefits and avert pending reductions in payments to doctors who treat Medicare patients."
Jobless claims are sharply up: http://bit.ly/ddn36p
Alan Greenspan argues that low interest rates hide the urgency of the debt crisis: "I believe the fears of budget contraction inducing a renewed decline of economic activity are misplaced. The current spending momentum is so pressing that it is highly unlikely that any politically feasible fiscal constraint will unleash new deflationary forces. I do not believe that our lawmakers or others are aware of the degree of impairment of our fiscal brakes. If we contained the amount of issuance of Treasury securities, pressures on private capital markets would be eased."
Jersey rock interlude: The Gaslight Anthem and Bruce Springsteen play "The '59 Sound".
GOP leadership threatened to remove Rep. Joe Barton from his ranking membership if he did not retract his apology to BP, reports Paul Kane: "GOP leadership aides, who asked not to be identified in order to speak candidly, said that House GOP leaders gave Barton an ultimatum -- retract the BP apology or lose his position as ranking member of the House Energy and Commerce Committee. They said he will now retain that position unless he causes further controversy."
House Republicans have rejected unlimited liability for BP for the fourth time, reports Meredith Shiner: Democrats attempted Thursday to create unlimited liability for oil companies, and for the fourth time since the Gulf crisis began, Republicans objected. Sen. Robert Menendez (D-N.J.) asked for a voice vote to pass a bill that would hold oil companies accountable for all damages they create, a significant leap from the $75 million cap set by current law. Sen. Jim Inhofe (R-Okla.), ranking member of the Environmental and Public Works Committee, rejected the request."
The liability cap helped cause the Gulf spill, writes Daniel Indiviglio. "If a liability cap had never been put in place, BP and other oil companies would have behaved differently. Since they thought their liability was limited, oil companies participated in a relatively small insurance fund to cover potential damages. This is where the problem began. Without a net to catch the oil companies if they fell, BP probably would have been more careful."
David Brooks believes the clean-up effort is suffering from too little local control: http://nyti.ms/9jTeB2
BP faces little to no risk of bankruptcy, report Bernard Condon and Michael Liedtke: "BP posted $17 billion in profit from its vast operations around the globe last year, compared with $5.7 billion for Apple and $6.5 billion for Google. More important, in the past three years the company generated $91 billion in cash flow from operations. It's not highly leveraged with debt, as banks were during the financial crisis. And it has 18 billion barrels of oil in proven reserves, twice what the U.S. consumes every year."
British comedy interlude: Some math problems.
The federal government has responded to state attorneys general's lawsuit on health care reform, report Janet Adamy and Evan Perez: "The department's filing noted that virtually everyone needs medical care at some point. Existing laws guarantee a right to emergency care, and the new law requires insurance companies to allow people to buy insurance after they get sick. Congress was entitled to pass a law punishing people who go without coverage because their decision could impose future costs on the nationwide health system, the filing said. The law 'imposes a tax on the choice of a method to finance the future costs of one's health care,' it said."
Numerous National Relations Labor Board decisions have been invalidated by the Supreme Court, report Peter Whoriskey and Sonja Ryst: "Hundreds of recent federal rulings in disputes between unions and employers could be reopened after the Supreme Court said on Thursday that it was illegal for the National Labor Relations Board to decide the cases with only two sitting members. The case before the court turns on an attempt by the NLRB to operate with only two of its five seats filled because of gridlock over presidential nominees, and it highlights the way political divisions in Congress interfere with basic government functions."
The FCC's Internet regulation is set to begin: http://politi.co/9ocoHA
A pharmaceutical industry crackdown could pay for emergency education funds, reports David Rogers: "Looking for savings to avert threatened layoffs this fall, the White House and Democrats are again eyeing proposals to crack down on licensing agreements in which pharmaceutical companies reward competitors that agree to slow the introduction of often cheaper generic drugs.¿Both administration and House Democratic officials told POLITICO that it's being actively discussed now in a new effort to come up with $10 billion in spending cuts and savings to offset emergency assistance to local school boards this summer."
Budget concerns in general have paralyzed the Senate: http://politi.co/9clnVD
Classic Python interlude: The Role of the Idiot in Rural Society.
New York bank supporters are mounting a last-minute campaign against FinReg, reports Ben White: "A flurry of opposition from New York City-area politicians and House moderates is aimed at blunting tough new financial regulations - an 11th-hour lobbying blitz that could shift momentum once again in the Wall Street reform fight. Three letters - from the New Democrat Coalition, the New York delegation and New York City Mayor Michael Bloomberg - stake out a view that's been politically risky amid the populist anger over Wall Street: don't be too tough on the banks."
Mortgage brokers want to use FinReg to get laxer appraisal rules: http://bit.ly/a4bymn
FinReg conferees have agreed to a comprehensive audit of the Fed, reports Brady Dennis: "The compromise expands on language from the Senate bill that would grant the GAO authority to audit the Fed's massive emergency lending programs and compel the agency to release details about the firms that benefited from those programs during the crisis. The new language broadens those audits to include the Fed's discount window and its purchases and sales of government securities, requiring the central bank to disclose details about such transactions within two years after they occur."
The Fed's power will stay largely intact after FinReg: http://bit.ly/cBCokG
Despite Eric Holder's promises to prosecute Wall Street executives, white collar cases lag, reports Jerry Markon: "Nearly 1 1/2 years into Obama's tenure, despite several cases against mortgage companies whose lending practices contributed to the crisis, the administration has not brought any charges against the big Wall Street banks that took those loans, converted them into toxic securities and pumped them into the world's financial markets. Law enforcement sources say no such charges are imminent."
The Justice Department is targeting mortgage frauds: http://bit.ly/cpa7lE
Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard.