Here's the supercommittee's problem right now: it's really the only game in town. Want a $4 trillion grand bargain on the deficit? Better get them to do it, as Congress sure ain't lifting a finger through the regular order. Want a jobs bill? Best ask the supercommittee, as there aren't enough working days left on the House's calendar to get one done otherwise. Want a particular policy tweak or program reform? Better try and make a bankshot argument about its capacity to reduce the deficit, as there's little chance that small, smart ideas can pass on their own this year.
But Greg Sargent reports that Sen. Jeff Merkley has an idea that's just small enough for the supercommittee to adopt. He wants the supercommittee to ask the Congressional Budget Office to score its proposal for its impact on jobs. The CBO has done this before, and all it would take is a request from the committee's chairs for them to do it again. It wouldn't require anyone to come to any new ideological epiphanies, or strike any grand new bargains. It would just force them to think hard about the impact their proposals will have on the labor market, and submit their conclusions to the independent analysis of the CBO. That won't force them to go big, or do anything significant to create jobs. But it's a small step in the right direction. And realistically, that may be all we can ask for from the supercommittee.
Five in the morning
1) The supercommittee won't go big, reports Alexander Bolton: "The debt supercommittee is unlikely to 'go big' and find more than $1.5 trillion in budget cuts, according to a member of the special panel. The key lawmaker, who spoke on condition of anonymity, said it is unrealistic to think the 12 lawmakers on the panel will be able to agree to a budget-cutting deal as large as $3 trillion or $4 trillion, as some have urged it to do. The supercommittee has come under intense pressure to agree to a 'grand bargain' styled deal similar in size to the recommendations of groups like President Obama’s debt commission, which called for $4 trillion in cuts over 10 years...The supercommittee member who spoke on background cast doubt on the ability of the panel to be so ambitious. There does not appear to be any consensus to cut Medicare payments to doctors, the Defense Department or other large programs with strong political support, the lawmaker said."
@2Chambers: "Debt supercmte holds a private breakfast mtg at 8:30 a.m. today; their 1st informal mtg after 2 formal hearings."
2) Sen. Jeff Merkley wants the supercommittee's recommendations evaluated for their impact on jobs, reports Greg Sargent: "'We need to have every proposal that the super-committee brings out to have it scored by its jobs impact,' Merkley told me in an interview this morning. He plans to urge Democratic and GOP leaders to agree to this standard, and hopes to build a campaign to make it happen. There’s precedent for the CBO scoring proposals for jobs impact. You can find examples of that here, here, and here. As Merkley notes, Congress normally submits proposals for budgetary impact but Congress can request jobs impact evaluations."
3) Some Democrats aren't keen on the jobs bill, reports Jennifer Steinhauer: "'I think the American people are very skeptical of big pieces of legislation,' Senator Bob Casey, a Democrat from Pennsylvania, said in an interview Wednesday, joining a growing chorus of Democrats who prefer an à la carte version of the bill despite White House resistance to that approach. 'For that reason alone I think we should break it up.'...Some are unhappy about the specific types of companies, particularly the oil industry, that would lose tax benefits. 'I have said for months that I am not supporting a repeal of tax cuts for the oil industry unless there are other industries that contribute,' said Senator Mary L. Landrieu of Louisiana. A small but vocal group dislikes the payroll tax cuts for employees and small businesses. 'I have been very unequivocal,' said Representative Peter A. DeFazio, a Democrat from Oregon. 'No more tax cuts.'"
@FiveThirtyEight: "Individual provisions of jobs bill are quite popular. But voters have cautious overall impression: 43% favor/35% oppose http://bit.ly/or2ohp"
4) Europe is stepping back from the brink, report Michael Birnbaum and Neil Irwin: "The debt crisis in Europe showed signs of easing Wednesday, as heads of state said that Greece will keep using the euro currency, helping soothe the fears of a financial collapse on the continent and driving markets up. French President Nicolas Sarkozy and German Chancellor Angela Merkel said they are 'confident that Greece’s future is in the euro zone,' after a teleconference between the two leaders and Greek Prime Minister George Papandreou, according to a statement from Merkel’s spokesman. That was enough to ease some of the mounting fear on global markets that the Mediterranean nation might default on its debt and pull out of the 17-nation euro currency zone, potentially causing calamitous ripple effects across the world financial system."
5) The jobs bill would ban discrimination against the jobless, reports Arthur Delaney: "The jobs package President Obama sent to Congress on Monday includes a ban on hiring discrimination against the jobless. Since last year companies and staffing firms have been slipping 'must be currently employed' requirements into online job postings, a practice President Obama has said 'makes absolutely no sense.' The provision is modeled on legislation first sponsored this year by Democrats in the House of Representatives, which would ban hiring discrimination against the jobless (but would not make employment status a protected class like race or sex). Republican leaders in the House have embraced some elements of Obama's overall proposal, but spokesmen for House Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) did not respond to requests for comment on the jobless discrimination piece."
New release interlude: Girls play "Honey Bunny" on Late Night with Jimmy Fallon.
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Still to come: Obama doesn't want to put Social Security back on the table; the House voted to condemn lifting the debt ceiling; Republicans are taking aim at a different mandate in health reform; lobbying reform just needs a push to pass, and isn't getting one; the Solyndra loan controversy heats up; and a tiger and dog hang out.
Obama doesn't want Social Security cuts back on the table, reports Zachary Goldfarb: "The last time President Obama negotiated with Republicans about overhauling the nation’s social safety set, he put several significant and politically explosive proposals on the table. This time, it may be different. As Obama prepares to present Congress on Monday with a detailed plan for taming the nation’s debt, a pivotal question is whether he will again propose raising the Medicare eligibility age from 65 to 67 and propose cuts in Social Security benefits. Over the objections of members of his party, the president had agreed to those changes as part of an unsuccessful effort to strike a debt deal this summer with House Speaker John A. Boehner (R-Ohio). But Obama’s aides say the plan being released Monday would not represent that sort of compromise."
If Congress doesn't act, the housing market could take a hit at the end of the month, reports Alan Zibel: "Housing-market experts warned lawmakers Wednesday that the size of mortgages backed by the government shouldn't be reduced next month amid a weak housing market. If Congress doesn't act, the maximum size of loans that can be guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration will drop Oct 1. The new limits vary by location, but will drop to $625,500 in expensive markets such as New York, Los Angeles and Washington from the current $729,750. Many Democrats, mainly from pricey coastal housing markets, and real-estate lobbying groups want the change to be blocked. But they have failed to gain traction so far. Only a handful of Republicans support maintaining the current levels. Many Republicans see allowing the limits to drop as a way to reduce the U.S. mortgage market's dependence on government support.'"
Financial regulators could be getting bigger budgets, reports Ben Protess: "Financial regulators clamoring for bigger budgets notched a rare victory on Wednesday, as a Senate subcommittee approved a measure to increase the budgets for cops on the Wall Street beat. The bill, offered by the Senate Appropriations subcommittee on financial services, would raise spending by about 19 percent at both the Securities and Exchange Commission and the Commodity Futures Trading Commission, both recently charged with writing dozens of new rules for Wall Street. Over the last year, feeding the coffers of financial regulators has become a thorny partisan issue. While the Senate, run by Democrats, is seeking to ratchet up regulatory spending, House Republicans want to cut back their budgets."
European banks could lose hundreds of billions of dollars if the continent reaches a crisis, reports Howard Schneider: "European banks are facing a reckoning over hundreds of billions of dollars in loans extended to the continent’s cash-strapped governments with potential losses so large, if countries default, that some financial firms could be put out of business. The tumbling value of government bonds issued by some European governments is already undermining the health of major banks. On Wednesday, Moody’s Investors Service cut the credit rating of two large French banks, due to their holdings of Greek government bonds and to wider concerns about whether investors will continue to trust European banks with their money. If a major bank were to fail, that could send shock waves across the Atlantic, buffeting U.S. financial companies with close ties to their European counterparts or major investments in Europe."
A GOP bill could undermine the SEC's regulatory capabilities, reports David Hilzenrath: "A Republican legislative proposal would make it harder for the Securities and Exchange Commission to do its job of policing and regulating the financial markets, the chairman of the agency argues in testimony prepared for delivery Thursday. The House bill calls for the SEC to weigh a variety of factors before issuing regulations, including, potentially, whether the rules are tailored 'to impose the least burden on society.' The term 'society' includes 'businesses of differing sizes,' the bill says. The bill, by Rep. Scott Garrett (R-N.J.) and other members of the House Financial Services Committee, guides the SEC to assess 'the best way of protecting” both the public and 'market participants.' That language could conflict with the SEC’s mission, SEC Chairman Mary L. Schapiro says in written testimony."
The House voted to condemn increasing the debt ceiling, reports Rosalind Helderman: "The House voted 232 to 186 Wednesday to formally disapprove of President Obama’s recent action to raise the nation’s debt ceiling by $500 billion, a vote that had no practical impact but allowed Republicans to once again express their displeasure at government borrowing. The procedure leading to the vote was an arcane bit of the August debt deal, designed to technically transfer the responsibility for raising the debt ceiling from Congress to the president. While the deal allowed for the debt limit to rise, it required that the president take action to formally lift it. It then allowed for Congress to vote to reject his action. The vote was always designed to be symbolic -- the president could veto the action, and Republicans would not be able to muster the two-third vote of both chambers necessary to override his veto and refuse the debt ceiling increase."
The actions the Fed is mulling may not work, writes David Wessel: "Today the Fed holds more than $500 billion in Treasurys that mature in less than three years, and less than $200 billion in Treasurys that mature in less than 10 years. If it sold, say, $300 billion of short-term debt to buy longer-term debt, the thinking goes, it could push long-term rates about two-tenths of a percentage point below where they'd otherwise be. This echoes a 1961 attempt by the Kennedy administration to keep short-term rates stable or rising (to help the dollar) while lowering long-term rates (to help the economy). The effort was known as 'Operation Twist,' after the popular dance step. (Finally, a monetary-policy story with a soundtrack.) In 2004, Mr. Bernanke (then a Fed governor) and Fed staffers Vincent Reinhart (now at Morgan Stanley) and Brian Sack (now running the New York Federal Reserve Bank market desk) wrote, 'Operation Twist is widely viewed as a failure.'
China can save Europe, writes Fareed Zakaria: "The International Monetary Fund could go to the leading holders of such reserves -- China, Japan, Brazil, Saudi Arabia -- and ask for a $750 billion line of credit. The IMF would then extend that credit to Italy and Spain but insist on closely monitoring economic reforms, granting funds only as restructuring occurs. That credit line would more than cover the borrowing costs of both countries for two years. The IMF terms would ensure that Italy and Spain remained under pressure to reform and set up conditions for growth. What’s in it for the Chinese, who would have to devote at least half the funds and who have already politely demurred when approached by the Italians?...China would have to get something in return for its generosity. This could be the spur to giving China a much larger say at the IMF."
Adorable animals rocking out interlude: Winston the cat gets really into the song "Pillow Talk."
The health industry would like to see the Medicare eligibility age raised, reports Sarah Kliff: "Key health care players tentatively lean toward raising Medicare eligibility age, especially when it’s compared to other entitlement cuts that the deficit-reduction supercommittee could make. And, for some of those in the health care industry, the change could be profitable...There’s a pretty simple explanation for why hospitals and some insurers would favor raising the eligibility age: Hospitals receive higher payments from private insurance than they do from Medicare. The payments that hospitals receive from private insurers are 28 percent above the break-even point for providing treatment, according to a recent report from the Blue Cross Blue Shield Association. Medicare pays only 91 percent of what it costs a hospital to provide care."
Republicans are targeting another mandate in health reform, reports Julian Pecquet: "Congressional Republicans and the U.S. Chamber of Commerce are renewing their push for repealing the healthcare law’s employer mandate in the wake of last month’s flat jobs numbers. Bills to repeal the requirement that businesses provide their workers with quality health insurance starting in 2014 have garnered 34 co-sponsors in the Senate and 144 in the House, including Blue Dog Rep. John Barrow (D-Ga.). And on Wednesday, the International Franchise Association released a report that found that the mandate threatens 3.2 million full-time jobs at tens of thousands of franchise businesses. 'The president has talked about growing the economy and creating jobs -- this is one way of providing certainty to our job creators and our entrepreneurs,' Rep. Pat Tiberi (R-Ohio.) said at a news conference announcing the report."
The House will pass a bill backing Boeing in its labor dispute, reports Steven Greenhouse: "Leading House Republicans on Thursday will take up the contentious debate over the National Labor Relations Board’s efforts to block Boeing from operating a $750 million aircraft assembly line in South Carolina instead of Washington State. The Republican-controlled House is expected to approve an unusual bill that would bar the labor board from pursuing the board’s pending action against Boeing, which Republicans have been denouncing day after day. Republican leaders and business groups are vigorously backing the bill, saying it would safeguard the freedom of corporations to locate operations where they want. But many Democrats and labor unions have denounced the bill, asserting that it would badly weaken an independent federal agency and be an improper favor to Boeing, a prominent political contributor."
States are fighting broadband regulation, reports Kim Hart: "States are squaring off with the feds over the best way to expand high-speed Internet. The Federal Communications Commission says its efforts to reform an outdated subsidy system will help stretch broadband to rural areas. But many state regulators argue it will have the opposite effect -- and some are threatening to take the agency to court if it moves forward with the proposed plan. 'This is outrageous,' said Jim Cawley, commissioner on the Pennsylvania Public Utility Commission. 'It’s profoundly anti-rural, anti-state and anti-consumer.' At issue are the complex rules that govern how phone carriers pay each other to exchange traffic on their networks -- a system known as intercarrier compensation...The biggest beef of state regulators: The proposed plan pre-empts their role in regulating how phone companies operate in their territories."
Bonus adorable animals interlude: A dog and a tiger, just chillin'.
Members of Congress are questioning the Solyndra loan, report Carol Leonnig and Joe Stephens: "Republican lawmakers demanded at a hearing Wednesday that Obama administration officials explain why they poured millions of additional taxpayer dollars into a favored solar company this year after the firm warned it was near collapse. Facing a stream of criticism that they had failed taxpayers, two senior administration officials defended their actions and a $535 million federal loan to Solyndra, a solar-panel manufacturer...When it won federal support in 2009, the company was a centerpiece of President Obama’s stimulus initiative to develop clean-energy technologies...Both Republicans and Democrats on the House Energy and Commerce investigative subcommittee questioned the administration’s decision this year to extend a lifeline to the struggling California firm."
Five myths about the Solyndra collapse: http://wapo.st/ov22qb
Obama's green energy loan guarantee program hasn't created many jobs, report Carol Leonnig and Steven Mufson: "The $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show. The program -- designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans -- has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies...The loan guarantee program can also be unwieldy. It works like this: Companies negotiate with the Energy Department for a government loan guarantee, which means taxpayers will pay off bank loans if the project fails. Then the Office of Management and Budget must sign off on the guarantees, often changing terms."
A federal probe blames cost-cutting for last year's BP oil spill, reports Joel Achenbach: "A 16-month federal investigation has concluded that BP’s efforts to limit costs on its mile-deep Macondo well in the Gulf of Mexico contributed to the blowout last year that killed 11 workers, sank the Deepwater Horizon drilling rig and created the largest oil spill in U.S. history. The long-awaited report by the Bureau of Ocean Energy Management, Regulation and Enforcement catalogues dozens of mistakes, misapprehensions, risky decisions and failures of communication that led to the blowout and the 87-day spill that spewed nearly 5 million barrels of oil into the gulf. The report also found fault among BP’s contractors, including Transocean, which owned the doomed rig, and Halliburton, which handled the cement job that failed to seal the bottom of the well before the blowout. But it says BP was 'ultimately responsible' for safe operations at the Macondo well."
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.