Karl Singer is writing Wonkbook this week while Ezra is on vacation.
RCP Obama vs. Romney: Obama +2.0%; 7-day change: Obama +0.1%.
RCP Obama approval: 48.4%; 7-day change: -0.3%.
1) Mitt Romney officially clinched the Republican nomination. "Mitt Romney Tuesday night claimed his win in the Texas primary gives him the requisite number of delegates to clinch the Republican presidential nomination...According to a tally by the Associated Press, Tuesday's win in Texas puts Mr. Romney over the threshold of 1,144 delegates needed for the nomination...Tuesday's victory in Texas marks a symbolic milestone for Mr. Romney, capping a five-month journey that began with the Jan. 3 caucuses in Iowa. But the primary effectively ended in mid-April when former Pennsylvania Sen. Rick Santorum suspended his bid. And while Mr. Romney finally locked up the nomination with the delegates he accrued in Texas, he won't be able to officially cast aside the label of 'presumptive nominee' until delegates actually elect him at the national convention in Tampa, Fla., at the end of August." Patrick O'Connor and Laura Meckler in The Wall Street Journal.
2) Eight more states got waivers from NCLB. "Obama administration freed eight states from core provisions of the No Child Left Behind education law on Tuesday, bringing to 19 the number of states granted waivers this year, and officials said that even more states would soon qualify for them. State officials have clamored in particular for relief from the federal law’s requirement that every student be proficient in math and English by 2014. The Department of Education waived that condition in exchange for an agreement by states to meet new standards -- in a longer time frame -- that Arne Duncan, the education secretary, says are tougher...The waivers, like the Race to the Top competition for federal money, have allowed the Obama administration to enact parts of its education agenda without sweeping legislation...The states granted waivers on Tuesday were Connecticut, Delaware, Louisiana, Maryland, New York, North Carolina, Ohio and Rhode Island." Richard Pérez-Peña in The New York Times.
3) Americans in their prime working years haven't seen much of a recovery. "The proportion of Americans in their prime working years who have jobs is smaller than it has been at any time in the 23 years before the recession, according to federal statistics, reflecting the profound and lasting effects that the downturn has had on the nation’s economic prospects. By this measure, the jobs situation has improved little in recent years. The percentage of workers between the ages of 25 and 54 who have jobs now stands at 75.7 percent, just a percentage point over what it was at the downturn’s worst, according to federal statistics. Before the recession the proportion hovered at 80 percent...While the unemployment rate may be the most closely watched gauge of the economy in the presidential campaign, this measure of prime-age workers captures more of the ongoing turbulence in the job market. It reflects 'missing workers' who have stopped looking for work and aren’t included in the unemployment rate." Peter Whoriskey in The Washington Post.
4) Housing prices fell only slightly. "Housing prices across the U.S. fell in March, but not as much as in earlier months, according to a report Tuesday that offered fresh evidence of a real-estate market on the mend. Compared with February, prices fell just 0.03% in March, and after adjusting for seasonal factors, they rose 0.09%, according to the S&P/Case-Shiller 20-city home-price index...It is a measure of the housing slump's severity that a flat index in March is seen as good news; prices are down roughly 35% from their peak in 2006...Average sale prices of single-family homes declined 1.9% in the first quarter from a year ago, according to the Case-Shiller national composite index...The March data raised hopes that the current quarter--the important spring selling season--is luring buyers confident that prices have reached bottom. Last week, the National Association of Realtors reported sales of previously owned homes increased 3.4% in April from a month earlier." S. Mitra Kalita and Nick Timiraos in The Wall Street Journal.
5) Spain is inching closer to a bailout. "Spain’s economic problems are deepening, pushing the country closer to an international bailout that U.S. and European officials worry could destabilize the global economy. The risk that the euro zone’s fourth-largest country may need a massive dose of outside help is forcing the region’s leaders to accelerate weighty decisions they had expected to consider over time. These include deciding whether the euro-zone countries should begin issuing bonds that they all jointly back, a step that would be aimed at reassuring investors skittish about lending money to troubled governments such as Spain’s...The release Tuesday of discouraging figures on Spain’s retail sales and exports further contributed to the sense of the country’s fragility. And the resignation of Spain’s central bank head, a month ahead of schedule, highlighted the struggle to fix long-standing problems in the country’s financial sector." Howard Schneider in The Washington Post.
Want Wonkbook delivered to your inbox or mobile device? Subscribe!
1) ORSZAG: Spending caps are the wrong way to do deficit reduction. "A good illustration of how to do future deficit reduction the wrong way is the Sustainable Growth Rate formula for Medicare, which was enacted in 1997 to constrain payments to doctors. The SGR places a broad cap on payments without addressing any of the reasons those payments are increasing...This same cap-and-punt approach is at the heart of several bills that the House Budget Committee is addressing this week. Two of these, the Spending Control Act and the Balancing Our Obligations for the Long Term Act, would impose a cap on total government spending as a share of gross domestic product, plus a number of other caps on specific areas of spending. These are meant to be enforced through automatic across-the-board spending cuts (with some specific areas exempted). Like the SGR, the acts under consideration by the House Budget Committee avoid the hard work of making specific policy changes." Peter Orszag in Bloomberg.
2) PORTER: Patents can harm innovation. "Broad patents can hinder innovation by allowing dominant businesses to stop future inventions that would disrupt their business model. 'Who has patents?' asked the Stanford economist Tim Bresnahan, an expert on technology policy. 'It’s the guys who have been around for a while, not the guys who have done a lot of innovation lately.' Overly broad patents have given birth to an entire new industry of 'patent trolls,' whose only business is to buy patents and sue for royalties. TufAmerica, for instance, has made a business out of buying the rights to old songs and suing artists who sample them without permission...Intellectual property, meanwhile, keeps growing. The United States patent office awarded 248,000 patents last year, 35 percent more than a decade ago. Some will spur innovation. But others are more likely to stop it in its tracks." Eduardo Porter in The New York Times.
3) GLAESER: Housing prices will continue to stagnate. "The 1990s offer us one upbeat message. Housing prices stayed static for six long years after 1991, and in real terms, housing prices were no higher in 1998 than they were in 1991. Yet real GDP grew an impressive 28 percent between 1991 and 1998. It’s a myth that the housing market must recover before the larger economy can surge...I see no reason to think that this period of housing-price stagnation will be shorter than the six-year stagnation of the 1990s. I hope that housing prices continue to be modest for decades so that ordinary Americans can afford to buy, and I see little good in government policies, like the homebuyer tax credit, intended to artificially boost housing prices. My greatest hope, however, is that prospective buyers have learned the lesson of the past decade: Housing prices go down as well as up. The right reason to buy a home is not as an investment, but as a place to live a fulfilling life." Edward Glaeser in Bloomberg.
4) GOOLSBEE: Fiscal union won't fix the eurozone crisis. "Increasingly, euro-zone hardliners have called for putting in a disciplined, unified fiscal arrangement similar to the one we have in the U.S. Unfortunately, their vision of fiscal union has badly missed the essence of the U.S. experience and would not fix the euro crisis...Giving Northern Europe a veto over Southern Europe's budgets will not hold a monetary union together. The euro zone will continue to need the weaker countries to stomach decades of high unemployment to grind down wages. Without some significant inflation in the North or mobility from the South, holding the European monetary union together will cost Northern Europe a great deal of money. In other words, if a fiscal union is to save the euro zone, it would need to facilitate subsidies from North to South, not eliminate them. As far as the likelihood of that, I wouldn't be willing to bet a dollar." Austan Goolsbee in The Wall Street Journal.
5) WOLF: The future of the eurozone rests in Germany's hands. "How will the crises inside the eurozone end? Many people have asked me this question in the US in recent weeks. How, in particular, might the eurozone move from crisis into stability? To address this question, we need to distinguish three aspects of the turmoil: where the eurozone is going; where Germany wants the eurozone to go; and where the eurozone needs to go...Now does Germany want the eurozone to be organised? This is how I understand the views of the German government and monetary authorities: no eurozone bonds; no increase in funds available to the European Stability Mechanism (currently €500bn); no common backing for the banking system; no deviation from fiscal austerity, including in Germany itself; no monetary financing of governments; no relaxation of eurozone monetary policy; and no powerful credit boom in Germany. The creditor country, in whose hands power in a crisis lies, is saying 'nein' at least seven times." Martin Wolf in The Financial Times.
Top long reads
Eric Lipton on the decline of coal: "Coal and electric utilities, long allied, are beginning to split. More than 100 of the 500 or so coal-burning power plants in the United States are expected to be shut down in the next few years. While coal still provides about a third of the nation’s power, just four years ago it was providing nearly half. The decline is largely because new pollution rules have made coal plants more costly, while a surge in production of natural gas through the process of hydraulic fracturing, known as fracking, has sent gas prices plummeting. Together, the economics of coal have been transformed after a century of dominance in Washington, state capitals and the board rooms of electric utilities...The environmentalists figure that if they can shut down a third of the nation’s coal burning plants by 2020, emissions of greenhouse gases in the United States could be cut at least as much as they would have under a landmark 2009 climate bill that died in Congress."
Bluegrass interlude: David Holt and Doc Watson play "Shady Grove" live at the Valborg Theatre.
Got tips, additions, or comments? E-mail me.
Still to come: Consumer confidence may be down; health exchanges will have to deal with IT; private space flight is blasting off; a big NRC hearing has been called off; and a dog just wants to go for a morning job.
A measure of consumer confidence fell. "US consumer confidence fell unexpectedly in May at the start of a big week of economic data that will show how the world’s largest economy is weathering renewed turmoil in Europe. The Conference Board, an industry group, said its index of consumer attitudes fell to 64.9 from a downwardly revised 68.7 the month before. Analysts had expected to see a gain of 69.7. April’s figure was originally reported as 69.2...It was the weakest confidence report in four months, suggesting that a fall in the stock market triggered by Europe’s woes has hurt sentiment and may point to slow consumption growth in the second quarter...But the confidence number is merely a warm-up for a week that includes updated first-quarter growth data on Thursday before non-farm payrolls and the purchasing managers' index for manufacturing on Friday. The last two are the most closely watched measures of short-term economic health." Anjli Raval and Robin Harding in The Financial Times.
@DLeonhardt: New Conf Board data on consumer confid are weak. Gallup, UMich still strong. Don't dismiss CB, but don't put too much weight on it either.
The U.S. is trying to nudge Europe towards crisis fixes. "The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the U.S. economy. The latest push by the Treasury Department's under secretary for international affairs, Lael Brainard, comes as the debt troubles in Europe mount amid Greece's political standoff and renewed threats to Spain's financial system. U.S. officials are pressing Europe on several fronts, including a broader role for the Continent's €700 billion ($878 billion) rescue fund, according to people familiar with the matter. Allowing the fund to directly recapitalize European banks--instead of forcing troubled nations to borrow from the fund for that purpose, potentially putting them under even more market pressure--could calm fears of cascading bank runs in Spain and other nations even before Greece's June 17 election." Sudeep Reddy in The Wall Street Journal.
Most aid to Greece is going right back where it came from. "Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout. But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets. The European bailout of 130 billion euros ($163.4 billion) that was supposed to buy time for Greece is mainly servicing only the interest on the country’s debt -- while the Greek economy continues to struggle...In an elaborate payment system that began after the May 6 election that brought down the Greek government and is meant to ensure that the Greeks do not touch the cash, the big three creditors are now wiring bailout payments to an escrow account in Greece. There the money sits for two or three days -- before much of it is sent back to the troika as interest payments on the Greek bonds." Liz Alderman and Jack Ewing in The New York Times.
Outtakes interlude: The blooper reel for The Muppets.
A drug company tweaked the FDA bill on generics. "One of the few bills moving through Congress with bipartisan support this spring would speed government approval of lower-cost generic copies of brand-name drugs. But one company, with help from an influential former congressman, is lobbying to protect its most lucrative brand-name product against generic competition and appears to have had some success in the House, potentially altering the bill to make it more favorable for the company...Republicans working on the legislation said that Mr. Nordwind had submitted proposed legislative language to the committee. Democrats said they thought it was tilted against generic drug makers. Congressional aides eventually negotiated a compromise. The language ultimately included in the House bill was prepared by Mr. Upton’s staff, working with the Democrats, and requires the F.D.A. to develop new ways of measuring the equivalence of 'locally acting' generic and brand-name medicines, with the help of the fees to be paid by the generic-drug makers." Robert Pear in The New York Times.
IT may be health exchanges' biggest problem. "If state health care exchanges survive the Supreme Court challenge to health care reform, the election and state tea party activists, health policy experts are worried they could still be brought down by a much more mundane problem: information technology. Even states that are solidly committed to pursuing an exchange are facing major logistical challenges in building the computer systems that will be able to handle enrollment when exchanges open for business in 2014. That’s largely because the system that will actually connect people to the right coverage will have to 'talk' to many other systems, and the systems don’t use a common language. This includes a yet-to-be built federal 'data hub' with tax and citizenship info, the enrollment systems of multiple private insurers selling exchange plans and -- hardest of all -- state Medicaid enrollment systems, many of which are not yet fully computerized." J. Lester Feder in Politico.
The House will vote this week on banning sex-selective abortions. "The House will vote this week on legislation imposing criminal penalties on anyone performing an abortion based on the sex of the child, but the measure runs the risk of failing on the floor because of how the GOP is calling it up. Republican leaders have scheduled a vote on H.R. 3541, the Prenatal Nondiscrimination Act (PRENDA), under a suspension of House rules, which will require a two-thirds majority vote for passage. Suspension votes are usually reserved for non-controversial bills, but Republican leaders have occasionally used the process for bills that Democrats oppose, and the PRENDA bill appears to be one of those. Democratic opposition to the bill began with its original name, the Susan B. Anthony and Frederick Douglass Prenatal Non-discrimination Act. Democrats argued in February that while the bill was named after these civil rights heroes, it has nothing to do with protecting civil rights." Pete Kasperowicz in The Hill.
@sarahkliff: Broccoli mandate suddenly becomes clear... RT @markknoller: Asked about First Family fave veggies, Mrs Obama says "We're a brocolli family"
Private space efforts are taking off. "The linkup last week of a privately built capsule with the international space station boosted the prospects of commercial spacecraft shuttling U.S. astronauts into orbit, though Capitol Hill disputes continued to threaten the possibility. For more than two years, National Aeronautics and Space Administration leaders and congressional critics have disagreed about budgets, timing and safety issues. By 2017, NASA wants to outsource to private companies all cargo and manned trips to the space station, which orbits 240 miles above the Earth. Some of the legislative clashes may be easing. Industry officials and space experts said political support for NASA's strategy seemed to be gaining momentum four days after Space Explorations Technologies Corp.'s unmanned Dragon capsule became the first privately built and operated vehicle to dock at the space station." Andy Pasztor in The Wall Street Journal.
Some want the House to take up postal reform sooner. "Senators and stakeholders are pushing House Republicans to move more swiftly on their postal reform bill, saying quick action is needed to prop up the cash-strapped Postal Service. House Majority Leader Eric Cantor (R-Va.), in a memo to lawmakers on Friday, said the chamber would look to bring a GOP postal proposal to the floor between the July 4 holiday and the August recess. But interested observers want the House to pick up the pace -- noting that not only is the Postal Service bleeding money by the day, but that election-year politics and the so-called 'fiscal cliff' are also going to consume much of the oxygen on Capitol Hill later in the year. The Senate has already passed its postal reform bill, a measure that differs greatly from the current House GOP proposal. And if the House passes legislation shortly before lawmakers skip town for August, that would likely push a conference committee on postal reform into September." Bernie Becker in The Hill.
Cybersecurity experts are in high demand. "Alec Ross, senior adviser for innovation at the State Department, has a piece of advice for students tasked with the nerve-rattling problem of choosing a college major. 'If any college student asked me what career would most assure 30 years of steady, well-paying employment,' Ross said, 'I would respond, ‘cybersecurity.’' Cybersecurity is a field where the rules of the recession seem flipped: There’s plenty of jobs, but relatively few qualified applicants. The government needs to hire at least 10,000 experts in the near future and the private sector needs four times that number, according to Tom Kellermann, vice president at Trend Micro and former member of President Obama’s cybersecurity commission. Booz Allen Hamilton, a private security firm in McLean, has hired nearly 3,000 cybersecurity experts in the past two years, and that trend is expected to continue." Alexander Fitzpatrick in The Washington Post.
Conservative groups want to sink the farm bill. "Conservative groups have made it official -- they hate the Senate farm bill and will push Tea Party fiscal hawks in Congress to defeat it. Heritage Action and Club for Growth on Tuesday told The Hill they will 'key vote' the Senate farm bill that is coming up for passage in early June, punishing members on their annual scorecards for voting in favor of the bill...In the House, conservative group opposition could scuttle plans to bring a farm bill to the floor before the current farm law expires Sept. 30. A farm bill was not on the summer agenda memo released last Friday by House Majority Leader Eric Cantor (R-Va.). The Senate farm bill reduces the deficit compared to current law by $23.6 billion, but a House GOP aide noted that the Republican Study Committee got $50 billion in savings, not including its block granting of the food stamp program." Erik Wasson in The Hill.
Animals doing long-distance running interlude: A dog tags along with bikers.
A hearing with all of the NRC commissioners has been postponed. "House Energy and Commerce Committee Republicans have shelved a planned showdown this week with outgoing Democratic Nuclear Regulatory Commission Chairman Gregory Jaczko. The GOP, citing upcoming Senate action on the embattled Jaczko’s replacement and the re-nomination of Republican NRC member Kristine Svinicki, are postponing thPresident Obama last week nominated George Mason University Professor Allison Macfarlane to replace Jaczko atop the agency that oversees the nation’s nuclear power plants. May 31 hearing with all five NRC commissioners...Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) signaled that she’ll move ahead with the nominations in tandem, vowing to hold a joint hearing next month." Ben Geman in The Hill.
@Ben_Geman: House energy committee GOP postpones blockbuster (in energy circles!!) May 31 hearing w/all five Nuclear Regulatory Commission members
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.