Last week, the Obama administration released a video celebrating Osama bin Laden's death. This week, as Taegan Goddard notes, they've got a video focusing on the fact that GM continues to be alive. It's 7:17 long, slickly produced, and about as concise a presentation of the White House's view of its own record as you're likely to find.
From today until the election, I could start every Wonkbook with a paragraph like that. There are going to be a lot of ads. A lot of web videos. A lot of new messages and big speeches. Some of it matters for policy reasons: Presidents hew much closer to their campaign promises than most people think. Mitt Romney's Medicare plan and Barack Obama tax proposals might begin as political ploys, but depending on which man wins, they might well end as law. Some of it is just fun to watch. But insofar as moving the needle on the election goes, most of it just doesn't matter at all.
The question for the rest of this election is how to judge what matters and what doesn't. I'd argue that we -- that is to say, you and I -- can't: If you're reading Wonkbook right now, you're really, really weird. You start your day with a policy e-mail. That's not how most Americans do it. And if you're weird, think about how weird I am: I start my day by writing a policy e-mail. There is no reason on earth for you to believe that I have some special insight into the mind of the average swing voter. Quite the opposite, actually.
But this is Wonkbook. We don't have to spend our time speculating about whether Mitt Romney's latest barrage of attack ads is having any effect. We have enough data that we can tell whether something is mattering in the presidential race -- that is to say, whether it is changing the underlying dynamics of the campaign.
I'm not a big fan of hyping up individual polls. Individual polls can be very, very wrong, and the media has a bias towards the very wrongest of them, as those polls tend to include the most sensational results. But I trust polling aggregates -- that is to say, averages of many polls. So from here until election day, I'm going to include two numbers in the beginning of Wonkbook: the Real Clear Politics average of polls pitting Obama against Romney and the Real Clear Politics average of polls testing Obama's approval ratings. It will look something like this:
This doesn't, of course, tell us whether something that happened today will matter in three days. But that's okay. We can wait a few days to see whether something actually mattered. And, at least this way, we can test whether the things that seemed like they would matter at the time actually had an impact.
Hopefully, in a year where it's going to be very easy to get caught up in microscandals and silly arguments, this will help weirdos like, well, us, keep at least one eye at where the presidential race really is at any given moment. For the record, I'd also love to include some kind of daily economic indicator on this dashboard, but I haven't found one that I think is both predictive enough and updated frequently enough to use. If anyone has ideas, though, let me hear them at wonkbook at gmail dot com.
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1) The House passed a bill to prevent a doubling of student loan rates. "Moments after an unusual fiery appeal from Speaker John A. Boehner, the House ignored a veto threat from President Obama and voted 215 to 195 on Friday to prevent a doubling of student loan rates. The bill, which would strip $5.9 billion from a program within the health care law to pay to keep rates on subsidized undergraduate loans at 3.4 percent, is all but certain to fail in the Senate, where lawmakers have put together their own measure to keep the rate from reverting to 6.8 percent by closing tax loopholes for some wealthy business owners...As with other measures designed to appeal to middle-class voters, the fight between Democrats and Republicans was less over the substance of the bill than how to pay for it, with Republicans, as they have all year, looking to cut government spending and Democrats, as has been their approach, looking to extract more money from high earners." Jennifer Steinhauer in The New York Times.
CONTEXT: Here's what the health law's prevention fund -- the pot of money the GOP is using to fund their student loan bill -- is currently financing.
@jonathanweisman: House R's pay for student loan bill w/ measure they know D's can't accept. Senate D's pay for student loan bill in way R's can't accept. ...
@CitizenCohn: GOP position, boiled down: No help for student loans unless Dems agree w/cuts to immunization, cancer screenings, HIV prevention/treatment.
2) The Senate has a recent streak of bipartisan legislation. "Don’t call it a comeback, or even a detente, but a strange thing is happening in the Senate: Democrats and Republicans are working together to pass legislation. While President Barack Obama has railed on the trail against a 'do-nothing' Congress and House Republicans have struggled to unite around major legislation, the Senate has recently passed sweeping bills on a bipartisan basis. From a two-year transportation bill to U.S. Postal Service reform to the Violence Against Women Act, the Senate has flipped convention on its head by becoming the chamber that works...After more than a year of gridlock, taking the government to the brink of shutdown and the nation close to default, lawmakers are finding their groove and enjoying doing what they were elected to do." Meredith Shiner in Roll Call.
3) The growth of health spending is slowing. "The growth of health spending has slowed substantially in the last few years, surprising experts and offering some fuel for optimism about the federal government’s long-term fiscal performance. Much of the slowdown is because of the recession, and thus not unexpected, health experts say. But some of it seems to be attributable to changing behavior by consumers and providers of health care -- meaning that the lower rates of growth might persist even as the economy picks up...In 2009 and 2010, total nationwide health care spending grew less than 4 percent per year, the slowest annual pace in more than five decades, according to the latest numbers from the Centers for Medicaid and Medicare Services. After years of taking up a growing share of economic activity, health spending held steady in 2010, at 17.9 percent of the gross domestic product." Annie Lowrey in The New York Times.
4) Fannie and Freddies' regulator has indefinitely delayed its decision on principal reduction. "The Federal Housing Finance Agency has indefinitely delayed its timeline for a highly anticipated decision on whether to allow principal reductions on loans owned by Fannie Mae and Freddie Mac, an agency spokeswoman said Friday. The agency had previously said it would announce its determination by the end of the month, but is now no longer expected to do so. 'FHFA continues to work on its principal forgiveness analysis and is in discussions with the Department of the Treasury,' a spokeswoman for the agency said Friday. 'A final determination on the Treasury proposal for triple investor incentives for Hamp Principal Reduction Alternative is being deferred until we conclude these activities.' The agency did not specify a new target date for its decision. Principal reductions have emerged as a crucial issue in efforts to work out troubled loans threatened by foreclosure." Donna Borak in American Banker.
@EdwardGLuce: It is disappointing tho unsurprising DeMarco again stymies Obama on mortgage write downs. Q: will Obama finally fire him?
5) Big banks are fighting a proposed Fed rule. "Giant banks are making a major push to blunt the impact of a proposed rule that could further constrain their trading profits. Chief executives at some of the nation's largest banks on Wednesday plan to discuss several regulatory matters with Federal Reserve Gov. Daniel Tarullo, the central bank's point man on regulation, all part of the financial industry's efforts to reduce or delay the impact of regulations tied to the 2010 Dodd-Frank financial overhaul law. Emerging as a particular concern is a Fed proposal to limit the biggest banks' exposure to other firms and governments, which the banks contend could reduce liquidity in the financial system, dragging down economic growth...Big banks with large derivatives businesses face particular pain under the draft rule, because it would limit net credit exposures between any two of the nation's six largest financial firms to 10% of a company's regulatory capital." Victoria McGrane in The Wall Street Journal.
1) KRUGMAN: We should expand investments in the education of America's youth. "In Spain, the unemployment rate among workers under 25 is more than 50 percent. In Ireland almost a third of the young are unemployed. Here in America, youth unemployment is 'only' 16.5 percent, which is still terrible -- but things could be worse...What should we do to help America’s young? Basically, the opposite of what Mr. Romney and his friends want. We should be expanding student aid, not slashing it. And we should reverse the de facto austerity policies that are holding back the U.S. economy -- the unprecedented cutbacks at the state and local level, which have been hitting education especially hard. Yes, such a policy reversal would cost money. But refusing to spend that money is foolish and shortsighted even in purely fiscal terms. Remember, the young aren’t just America’s future; they’re the future of the tax base, too. A mind is a terrible thing to waste; wasting the minds of a whole generation is even more terrible. Let’s stop doing it." Paul Krugman in The New York Times.
2) BARRO: Cheap student loans are the wrong way to lower the cost of college. "Structurally, the higher education sector looks a lot like the health care sector. It hasn’t seen the productivity gains enjoyed by sectors like manufacturing and retail, which have benefited extensively from automation and technological advances. Colleges still need to employ a lot of highly skilled workers, and college costs are tied to their wages, which rise faster than inflation. It’s no surprise, then, that the higher education inflation trend looks a lot like the alarming one we see in health care...Unfortunately, consumers do not have the necessary incentives to impose cost discipline in the market. The perceived necessity of a college degree to find a middle-class job gives students few options but to pay up. Easy credit has allowed them to finance rapidly rising tuition and worry about the costs later...But we can make structural changes to the higher education sector to combat skyrocketing costs." Josh Barro in The Daily.
3) SUMMERS: What Europe needs is growth. "Again, Europe and the global economy approach the brink. The architects of current policy and their allies argue that there is insufficient determination to carry on with the existing strategy. Others argue that failure suggests the need for a change in course. The latter view seems to be taking hold among the European electorate. This is appropriate. Much of what is being urged on and in Europe is likely to be not just ineffective but counterproductive to maintaining the monetary union, restoring normal financial conditions and government access to markets, and reestablishing economic growth...Only if growth is restored can the euro endure and European financial problems be resolved. If there was ever a situation that called for a collective response, this is it. Going forward, the IMF and international community should condition further support not merely on individual countries’ actions but on a common European commitment to growth." Lawrence Summers in The Washington Post.
4) ROMER: Europe should backload its austerity. "European policy makers just don’t get it. To hear them talk, you’d think that Europe was on the right path. Troubled countries just need more of the same, they say -- more fiscal austerity, more labor market flexibility, more price stability -- and the European crisis will be licked. Have they looked at their own numbers? It has been two years since moves to austerity started, but the crisis is still with us...If stringent belt-tightening isn’t the answer, what is? It’s not to just ignore the deficit. Many European countries have long-run fiscal situations that are unsustainable and must be dealt with. The core of a more sensible approach is to pass the needed budget measures now, but to phase in the actual tax increases and spending cuts only gradually -- as economies recover. To use economists’ terminology, the measures should be backloaded." Christina Romer in The New York Times.
@AndyHarless: How can anyone look at Europe today and still think an inflation-only mandate is a good idea?
5) MANN AND ORNSTEIN: Let's just say it: Republicans are the problem. "We have been studying Washington politics and Congress for more than 40 years, and never have we seen them this dysfunctional. In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party. The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the mainstream, it makes it nearly impossible for the political system to deal constructively with the country’s challenges...Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center, a strategy that is simply untenable when one side is so far out of reach." Thomas Mann and Norm Ornstein in the Washington Post .
Top long reads
Suzy Khimm introduces the wonks of Occupy Wall Street: "Occupy Wall Street has moved. Its new address: 60 Wall Street. There, inside a soaring public atrium, dreadlocked teens trade shoulder massages near the evening meditation circle. A young man holds up a sign: 'You’re a Federal Reserve $lave.' The dinnertime crowd buzzes over free plates of rice and beans while listening to an improvised, profanity-laden operetta about the evils of agro-giant Monsanto. But amid the din, there’s a small group holding a quieter, and far wonkier, conversation. 'What are the restrictions? Does it let anyone call themselves a clearing agency? It seems like there’s a rigorous definition, but maybe there’s not,' Caitlin Kline says. 'What if all you’re taking on is counterparty risk for all of these banks, but you don’t ever take any other exposure? It seems to be covered by several exemptions.' Kline, a former Wall Street trader-turned-Occupier, is a member of Occupy the SEC, an offshoot of the large movement that has burrowed deep into the regulatory process."
Charles Duhigg and David Kocieniewski investigate how Apple avoids billions in taxes: "Apple, the world’s most profitable technology company, doesn’t design iPhones here. It doesn’t run AppleCare customer service from this city. And it doesn’t manufacture MacBooks or iPads anywhere nearby. Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states. Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains. California’s corporate tax rate is 8.84 percent. Nevada’s? Zero. Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year."
Jonathan Chait on the rise of Paul Ryan: "Ryan’s prestige explains, among other things, the equanimity with which movement conservatives have reluctantly accepted the heresies of Mitt Romney. They may not have an ideal candidate, but they believe Romney could not challenge Ryan even if he so desired...In any case, Romney has shown no inclination to challenge Ryan, praising him fulsomely and even promising him, according to The Weekly Standard’s Stephen Hayes, he’d enact Ryan’s plan in the first 100 days. Republicans envision an administration in which Romney has relegated himself to a kind of head-of-state role, at least domestically, with Ryan as the actual head of government. To find a parallel to the way Ryan has so thoroughly seized control of the Republican agenda and identity, you have to go back at least to Gingrich in his nineties heyday, or possibly to Reagan."
Duff Wilson and Janet Roberts look at the food industry's campaign against anti-childhood obesity initiatives: "In the political arena, one side is winning the war on child obesity. The side with the fattest wallets. After aggressive lobbying, Congress declared pizza a vegetable to protect it from a nutritional overhaul of the school lunch program this year. The White House kept silent last year as Congress killed a plan by four federal agencies to reduce sugar, salt and fat in food marketed to children. And during the past two years, each of the 24 states and five cities that considered 'soda taxes' to discourage consumption of sugary drinks has seen the efforts dropped or defeated. At every level of government, the food and beverage industries won fight after fight during the last decade. They have never lost a significant political battle in the United States despite mounting scientific evidence of the role of unhealthy food and children's marketing in obesity."
Jonathan Cohn evaluates Mitt Romney's economic plan: "If Mitt Romney has his way, the general election will be just like the one Bill Clinton won in 1992: It’ll be about the economy, stupid. And you can understand why. A recovery is underway but it’s tentative and weak. Large numbers of Americans remain out of work, not to mention the many more who have jobs but still struggle to pay bills. Romney’s pitch to these people is simple and compelling: Hire me, and somebody will hire you. But how would he do that? It’s a difficult question to answer, in part because Romney’s 160-page manifesto, 'Believe in America,' is less specific than you might think. It spends a lot of time offering a story about why the country is in trouble, but only a little on what Romney would do about it. As Reason’s Peter Suderman observed, 'it’s sufficiently thorough in its background analysis, yet aspirationally vague when it comes to proposing action items.' More important, Romney has made some promises that don’t seem possible to fulfill."
Cover interlude: Lucero plays David Bowie's "Modern Love" for the AV Club.
Got tips, additions, or comments? E-mail me.
Still to come: Public job losses have hurt the recovery; states may soon struggle with the next step on mandates; contractors are upset; the EPA has a big palm oil choice; and a Siberian Husky just wants to hold your hand.
Lawmakers are mulling a change to bankruptcy laws on student debt. "In 2005, Congress prohibited student debt from being discharged through bankruptcy, except in rare cases, because of concerns that many young graduates--who often have no major assets such as a house or a car--would be tempted to walk away from loan obligations. Some lawmakers now want to temper that position, pointing to concerns that a significant number of Americans could be buried under education loans for decades. Their efforts, however, would apply only to private loans--a fraction of the market...Terri Reynolds-Rogers, a 57-year-old health-program manager from Palmer, Alaska, declared bankruptcy in 2007, but still has $152,000 in student debt...Stories like hers have prompted Sen. Dick Durbin (D., Ill.) to introduce legislation to make it easier for borrowers to shed debt issued by private lenders, and not backed by the government, through the bankruptcy process." Josh Mitchell in The Wall Street Journal.
Public job losses have dragged down the recovery. "As the economic recovery has struggled to pick up speed, one of the biggest stumbling blocks has been job losses in state and local governments, which have been on the rise for much of President Obama’s term...Since the beginning of his term, state and local governments have shed 611,000 employees -- including 196,000 educators -- according to government statistics. Unlike the recovery in private-sector employment that Obama and his reelection campaign often cite -- with businesses adding 4 million jobs since hiring hit its low point in 2010 -- the jobs crisis at the state and local level has continued throughout his term. On Friday, new government data showed that economic growth slowed in the first three months of the year, in part because government at the local, state and federal level has been spending less money -- money that could have fueled economic activity. The state and local job losses are significant for several reasons, economists say." Zachary Goldfarb in The Washington Post.
The housing market is facing a prolonged bottom. "Nearly six years after home prices started falling, more U.S. housing markets appear to be nearing a new phase: a prolonged bottom. Hitting a bottom, of course, isn't the same as a full-fledged recovery, which is still years off for many housing markets--as well as for millions of people who purchased homes or took cash out during the bubble. The good news is that housing construction and home sales appear to have hit a floor. Home builders cut back heavily in the past four years and began construction on just 434,000 single-family homes last year, the lowest level on record...The problem, of course, is that foreclosures are still a very high share of sales in many of the hardest-hit markets. One of the biggest headwinds today is the 'shadow inventory' of potential foreclosures. Banks owned about 450,000 properties at the end of March, but there were an additional two million loans in some stage of foreclosure." Nick Timiraos in The Wall Street Journal.
A financial fraud investigation is adding muscle. "An Obama administration task force probing misconduct that fueled the financial crisis is increasing its ranks, adding five financial analysts and 10 new federal prosecutors spread across the country, according to a senior Justice Department official. The increased staffing reflects a new push by the administration to aggressively pursue cases against firms and individuals who contributed to the 2007-2009 financial crisis, especially ahead of the November election...The task force formed earlier this year represents a more coordinated effort than prior investigations, the Justice Department official said in an interview on Thursday. Prosecutors are reviewing documents for both federal and state law violations. In addition to the 50 positions the department previously announced, the DOJ is hiring 10 new assistant U.S. attorneys in districts that include Massachusetts and Colorado, according to job listings on the agency's website." Aruna Viswanatha in Reuters.
Comedy history interlude: Jimmy Fallon's SNL audition.
States may soon have a mandate dilemma. "If the Supreme Court strikes down the health reform law’s individual mandate, the states at the forefront of implementing the law could find themselves like Wile E. Coyote in the Road Runner cartoons: racing ahead only to discover there’s no ground underneath their feet. These states were all counting on the individual mandate to make health insurance exchanges viable -- because without a requirement for most people to buy coverage, there’s a chance that healthy people could avoid paying into the system, making premiums skyrocket. So a ruling against the requirement could force states to either consider enacting their own individual mandates -- hoping people will be more accepting of them more than of a federal mandate -- or pass other measures to draw healthy people into the system so their insurance markets don’t go off a cliff." Lester Feder and Jason Millman in Politico.
Health insurers' efforts to diversify are raising questions. "Like hospitals and doctors everywhere, Banner Health fights a daily battle to get paid by insurance companies and government agencies for the care it delivers. So the hospital system hired a company called Executive Health Resources to fight back against the likes of Medicare and UnitedHealthcare when they deny claims or pay bills for less than what Banner thinks it is owed. But Banner executives began to worry about EHR’s independence when the firm was acquired in 2010 by UnitedHealth Group, UnitedHealthcare’s parent...As insurers eager to add revenue streams convert themselves into diversified health-services companies, they often buy traditional business adversaries, including physician groups and hospital consultants such as EHR. They’re also buying technology companies and research firms that serve medical-care providers, raising questions not only about independence but about the privacy of patient information." Jay Hancock in The Washington Post.
The Obama administration is ending a program to promote a pre-existing condition insurance plan. "Health insurance agents and brokers will no longer be getting paid to tell sick people about a government-backed health insurance plan that can't turn them down. The Centers for Medicare and Medicaid Services is ending a program at the end of this month that gave $100 to agents and brokers who referred customers to the Pre-Existing Condition Insurance Plan, which was created by the health care reform law President Barack Obama enacted in 2010. The PCIP, as it's known, was designed as to provide help to people who can't find affordable health insurance because of their medical histories...To address lackluster enrollment in the program, the Obama administration announced in May 2011 it would start paying insurance agents and brokers $100 when they helped an eligible person obtain coverage through the program." Jeffrey Young in The Huffington Post.
Spending cuts have contractors protesting. "The U.S. government’s push to reduce spending on contracts has left it fending off the most challenges in 16 years from unsuccessful bidders. Contractors filed 2,353 protest-related cases during the last fiscal year with the Government Accountability Office, which arbitrates contract disputes. That’s up 18 percent from the 1,989 cases filed when federal contract spending peaked in fiscal 2009 and the most since 1995, when more than 2,500 were filed, according to GAO data...Government contract spending declined 3.6 percent to $531.9 billion in the fiscal year that ended Sept. 30, from a record $551.8 billion in fiscal 2009. At the same time, the United States is awarding fewer contracts as agencies cut costs by consolidating work. There were 933,357 direct contract awards last year, down 38 percent from fiscal 2007...In addition to the economic downturn and the increase in contract spending after 2000, the GAO’s expanded jurisdiction may be contributing to the boost in protests." Kathleen Miller in The Washington Post.
Fewer illegal immigrants arrested for minor violations will face deportation. "Fewer illegal immigrants stopped by police for minor traffic violations would be held for deportation under changes announced Friday to a federal fingerprinting program, Department of Homeland Security officials said. The policy change on how federal agents will handle illegal immigrants arrested by state and local police for offenses like driving without a license came in the department’s response to a report by a task force on the federal program. One of the task force’s central recommendations was that the program, called Secure Communities, should avoid deportations of traffic violators. The sharply critical task force report, issued last September, argued that such deportations were inconsistent with the department’s stated priorities of removing foreigners with serious criminal records." Julia Preston in The New York Times.
Adorable animals being needy interlude: A Siberian Husky wants to hold hands in the car.
The EPA faces a big choice on palm oil. "Quick quiz: Which country is the world’s third-largest emitter of greenhouse gases, after the United States and China? The answer, at least in recent years, has been Indonesia. That’s surprising. It’s not the world’s third-largest economy. It’s not an industrial powerhouse. But Indonesia has been clearing its vast rain forests of late, releasing huge stores of carbon into the air. One culprit has been the country’s fast-growing production of palm oil, an edible vegetable oil that’s increasingly being harvested to make biodiesel fuel for cars and trucks in Europe. This isn’t just a bit of environmental trivia. There’s a fierce battle in the United States over whether the Environmental Protection Agency should allow more diesel made from palm oil to be used by U.S. refineries. Agribusiness groups are lobbying for its use. Environmentalists are trying to block it -- with some saying this could be the EPA’s most important climate-change decision of the year." Brad Plumer in The Washington Post.
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.