Wonkbook: Introducing John Bryson
By Dylan Matthews,
Matthews is writing Wonkbook while Ezra is on vacation.
President Obama stands with John Bryson after nominating him to be the next commerce secretary.
Welcome to Wonkbook.
Five in the morning
1) Obama picked businessman John Bryson as his new Commerce Secretary, reports Zachary Goldfarb: “President Obama on Tuesday nominated former electric utility executive John E. Bryson as his next Commerce secretary. ... Bryson spent nearly two decades as the head of the largest utility in North America, Edison International, the parent company of Southern California Edison, and today serves as a senior adviser to the private-equity giant Kohlberg Kravis & Roberts. He also is a director of Boeing and Walt Disney, a former energy regulator in California and a noted environmentalist who co-founded the Natural Resources Defense Council...Senate Republicans immediately vowed Tuesday to block the nomination in a dispute with Obama and Senate Democrats over outstanding free-trade agreements."
2) A meant-to-fail vote to raise the debt limit failed, report Lori Montgomery and Paul Kane: “With an August deadline looming, the House overwhelmingly refused Tuesday to raise the legal limit on government borrowing, setting the stage for a long, sweaty summer of haggling over the shape of the largest debt-reduction package in at least two decades. Not a single GOP lawmaker voted for the measure to raise the limit on the national debt from $14.3 trillion to $16.7 trillion — a sum sufficient to cover the government’s bills through the end of next year. Republican leaders said their troops would reject any increase without a plan to sharply curtail spending and, thus, future borrowing. ... As the House voted 318 to 97 against raising the limit, nearly half of the chamber’s Democrats sided with the Republicans.”
3) Democratic leadership whipped members to vote “no,” reports Russell Berman: “The House Democrats’ top vote-counter is advising rank-and-file members to vote against an unconditional increase in the federal debt limit to avoid political attacks from Republicans. Rep. Steny Hoyer (Md.), the second-ranking House Democrat, said Tuesday that members should not ‘subject themselves to a political 30-second ad attack' by voting to raise the debt ceiling when all Republicans are expected to vote no. ... The move has put Democrats in an awkward position because 114 of them — nearly two-thirds of the caucus — signed a letter in April calling for a clean debt-ceiling vote. ... The White House also initially called for Congress to raise the debt limit and leave the spending fight as a separate issue.”
4) Reconstruction spending is boosting the economies of disaster-stricken areas, reports Michael Cooper: “A new phase is slowly beginning in some hard-hit areas: reconstruction, which past disasters show is typically accompanied by a burst of new, and different, economic activity. There is no silver lining to a funnel cloud, as anyone who survived the tornadoes can attest, but reconstruction can help rebuild local economies as well as neighborhoods. ... No one would suggest that disasters are a desirable form of economic stimulus. But economists who have studied the impact of floods, tornadoes and hurricanes have found that after the initial anguish and huge economic disruptions, periods of increased economic activity frequently follow as insurance money and disaster relief flow in to jump-start rebuilding.”
5) The Doha trade round is getting rebooted, reports John Miller: “The World Trade Organization's 153 members agreed Tuesday in Geneva to a less-ambitious Doha Round of global trade talks, stripping away enough contentious issues that it now appears feasible to finish a deal by the end of the year. The endorsement of what WTO Director-General Pascal Lamy calls an ‘early harvest’ means the group now risks a significant failure if its members can't agree to even a Doha-lite deal. It also suggests that the era of big, multilateral trade deals is over. The final result of a decade of talks, say trade officials and analysts, is likely to be a package of measures designed to help developing nations--including common customs standards, and the elimination of tariffs and quotas on exports from the poorest countries.”
Live interlude: Cults plays "Abducted.”
Got tips, additions, or comments? E-mail me.
Still to come: Housing prices fell more in the Great Recession than during the Great Depression; premiums for government-run high risk pools are being cut; AT&T is tooling up to get regulators to approve its merger; donors to green groups are doing a lot of soul-searching after last Congress' defeats; and a panoply of corgi crossbreeds.
Housing prices have fallen more than during the Depression, reports Dina ElBoghdady: “The prices of single-family homes have dropped to their lowest level since 2009, creating a ‘double dip’ as values fell below where they were when the housing market collapsed, according to a closely watched price index released Tuesday. The Standard & Poor’s Case-Shiller index shows that single-family home prices fell 4.2 percent nationally in the first quarter from the previous quarter, leading analysts to conclude that prices have fallen by more than they did during the Great Depression. ‘The peak-to-trough decline is worse,’ said Mark Zandi, chief economist at Moody’s Analytics. ... The report included prices in 20 major metropolitan regions and found that that index fell 3.6 percent in March from a year earlier.”
The E.U. could get bigger taxing powers, reports Laurence Norman: “The European Commission is considering laying claim to tens of billions of euros in tax revenues from across the European Union, a change that would significantly boost the commission's financial power. On June 29, Budget Commissioner Janusz Lewandowski is to outline budget proposals for 2014-20. The former Polish privatization minister will also present a plan on ‘own resources,’ or tax revenues specifically earmarked for the commission. Currently, just 12% of the EU's total budget, which this year amounts to €126.5 billion ($181 billion), comes from own resources, which are mainly import duties. Mr. Lewandowski said in an interview that he hopes that by the end of the next budget period, new forms of own resources could account for 30% of the EU budget.”
China’s workforce is racing against time, reports Howard Schneider: “In a shift that is intensifying the economic competition between China and the United States, China’s working-age population has plateaued in size and will begin getting smaller sometime in the next five years, according to demographers and recently released census data. The number of 20-to-24-year-olds, a main source of entry-level and factory labor, is already shrinking, the leading edge of an eventual decline in the overall population. The demographic change is ushering in higher wages and inflation and remaking the country’s social fabric -- particularly in rural villages ... where working adults have all but disappeared to major cities.”
The auto bailout worked, writes Tim Geithner: “Today, six years earlier than planned, Chrysler has repaid its outstanding government loans. While it has a long way to go, Chrysler has made enormous strides. Tough decisions, stemming from the restructuring, have helped Chrysler post five consecutive quarters of operating profit. It has announced more than $3 billion in investments in plants and technology since emerging from bankruptcy and is poised to hire back workers. The story has been similar for GM — and the industry as a whole. The domestic automakers are getting stronger. For the first time since 2004, each has achieved positive quarterly net income. ... The choice to stop the American automobile industry from unraveling was the right one.”
The U.S. is getting less economically dynamic, writes Steven Pearlstein: “Job creation and job destruction began their decline as far back as the 1990s, and continued right up to the Great Recession, when job destruction fell to its lowest level in 30 years, and job creation even more. The average business became older and larger. Moreover, since the trough of the recession in 2009, Haltiwanger finds that the rate of overall job destruction has returned to the more normal levels before the recession, even as the rate of job creation remains near its historic low...I have yet to mention the Federal Reserve’s monetary policy or fiscal stimulus or the deficit or even taxes...t’s hard to draw a convincing connection between any of them and a decline in entrepreneurial dynamism that began more than a decade ago.”
Christine Lagarde is the wrong pick for the IMF, writes Sebastian Mallaby: “If another French managing director is the wrong choice in terms of the IMF’s legitimacy, it would also damage the institution’s independence. Over the past year, the IMF has compromised itself in Europe, supporting bailouts in Greece and Ireland that are not going to work. Perhaps because its last leader, Dominique Strauss-Kahn, aspired to become president of France, it was too willing to abet the German and French governments as they fudged the big choice before them: Either the European countries in crisis must wipe out unpayable debts by defaulting or they must receive far more generous bailouts. The IMF’s next managing director needs to explain this dilemma without flinching, even if Europe’s establishment does not want to hear it.”
TV and real life intersecting interlude: Nick Offerman makes a Ron Swanson Turkey Burger, as referenced on “Parks and Recreation.”
Premiums for high-risk pools are being cut, reports Janet Adamy: “The Obama administration moved to make an insurance program for people with existing illnesses cheaper and more accessible for potential enrollees. The Department of Health and Human Services said it will lower premiums in 18 states where the federal government runs high-risk insurance pools created by the 2010 health overhaul law. The programs were designed to provide insurance to people who have been denied insurance or priced out of the individual insurance market because of pre-existing health conditions. But the policies, dubbed the Pre-Existing Condition Insurance Plan, have had a lukewarm response from consumers. Many complained they were too expensive.”
The Ryan budget isn't serious about cost-containment, writes Howard Gleckman: “The House budget not only would replace Medicare with vouchers but also repeal the 2010 health law- which does include some real cost containment. Those provisions are exceedingly modest and many are in the nature of experiments — a good choice given how much we still need to learn about delivering cost-effective care. ... By repealing the health law, the House GOP would also eliminate the two key mechanisms seniors would need to buy insurance on the open market--a requirement that insurance companies not discriminate against those with pre-existing conditions (80 percent of those 65 and older have at least one) and exchanges though which buyers can shop for individual coverage.”
AT&T is lobbying-up to push its merger through, reports Cecilia Kang: “Opponents of AT&T’s proposed merger with T-Mobile filed last-minute petitions to federal regulators Tuesday in hopes of blocking the $39 billion mega-deal. But they are going up against a deep-pocketed telecom giant that’s just getting started on its own campaign to influence the decision. ... According to the Center for Responsive Politics, AT&T spent $6.8 million in the first three months of 2011 to hire lobbying shops and lawyers, who in large part are making the case to federal officials to approve the deal. AT&T’s lobbying expenditures are the third-largest among companies and trade groups so far this year, the center’s figures showed.”
“Turnaround schools” are all too often myths, writes Diane Ravitch: “In 2005, New York’s mayor, Michael R. Bloomberg, held a news conference at Public School 33 in the Bronx to celebrate an astonishing 49-point jump in the proportion of fourth grade students there who met state standards in reading. In 2004, only 34 percent reached proficiency, but in 2005, 83 percent did. It seemed too good to be true — and it was. A year later, the proportion of fourth-graders at P.S. 33 who passed the state reading test dropped by 41 points. By 2010, the passing rate was 37 percent, nearly the same as before 2005. What is to be learned from these examples of inflated success? The news media and the public should respond with skepticism to any claims of miraculous transformation. The achievement gap between children from different income levels exists before children enter school.”
Iowa and New Hampshire's early primaries are undemocratic and unfair, writes David Leonhardt: “A presidential campaign is once again upon us, and Iowa and New Hampshire are again at the center of it all. ... It is not natural. It’s undemocratic, in fact. It is unfair to voters in the other 48 states. And it distorts economic policy in several damaging ways. Most obviously, the federal government has lavished subsidies on ethanol, even though those subsidies drive up food prices and do little to solve the climate problem, partly because candidates pander to the Iowa corn industry. ... Beyond ethanol, a recent peer-reviewed study found that early-voting states received more federal dollars after a competitive electio — so long as they supported the winning candidate.”
Corgis are excellent interlude: A corgi crossed with a husky, and a chihuahua, and a Jack Russell terrier, and so forth.
Green donors are stepping back and regrouping, reports Darren Samuelsohn: “Wealthy donors spent about a half billion dollars helping green groups try to pass climate legislation and prep the guts of a new international global warming treaty. With both efforts in tatters, donors behind the green curtain are trying to figure out what's next as well as asking whether the money could have been better spent on other issues that were shoved to the sidelines over the past two years. Donors are also hurling tough questions at their friends in the Obama administration about the White House's failed climate push despite the foundations giving unprecedented amounts of money to the cause as their stock portfolios plummeted during the recession.”
Dylan Matthews is a student at Harvard and a researcher at The Washington Post. Wonkbook is compiled and produced with help from Michelle Williams.