When Republicans had the opportunity to strike a $4 trillion deficit-reduction deal with President Obama, they refused on the grounds that the deal would include around $1 trillion in new revenue, even as it extended $2.6 trillion in tax cuts. So far, we've passed less than $1 trillion in actual spending cuts, and the cost of doing even that was we nearly defaulted on the debt, which delivered another blow to an economy that was already trembling.
Last night, we descended into farce. Having failed to agree on the big issues, Washington descended to squabbling over a very, very small one: whether a mostly meaningless speech would happen on a Wednesday or a Thursday.
The White House tried to get a little cute here: they left the date of the speech open and then decided to schedule it at the same time as the GOP presidential debate. But they say they ran that by Speaker Boehner's office and didn't get an objection.
Then Boehner got a little cute: he pretended that the logistics were simply impossible -- a security sweep couldn't be assured on such short notice -- and, breaking with precedent, refused to schedule the address.
Eventually, the White House agreed to schedule the speech for Thursday. That may or may not have been the best political decision -- perhaps they could have just moved the address to a roomful of the unemployed -- but it was the adult decision. It would have been a shame for an argument over the venue to overshadow what is supposed to be a proposal about jobs.
Nevertheless, in the parlance of Washington, Boehner "won." And perhaps he did. But the rest of us lost. If it wasn't already clear that Republicans in congress have no intention of working with the White House on further help for the jobless, it's plenty clear now. If it wasn't already clear to the business community that the two parties absolutely hate each other and there is no reason to believe that Washington will be able to help the economy if what little recovery we have turns south, it's plenty clear now.
To paraphrase economist Brad DeLong, last night was one of those nights when you remember that even taking into account the fact that our political system is performing worse than you could possibly imagine, it's performing worse than you can possibly imagine. Washington has made many more consequential missteps than this one. But few of them have been so thoroughly depressing, so insistent on showing us us, with brutal clarity, what the greatest nation in the world has come to.
Five in the morning
1) After some consternation, Obama's jobs speech has been scheduled for September 8, report Peter Wallsten and David Nakamura: "President Obama announced Wednesday his intention to lay out a new jobs plan in a speech to Congress next week that strategists hope will set a new tone for his tenure. But the announcement provoked an instant confrontation with Republicans over the seemingly trivial question of timing, resolved only when the White House agreed late Wednesday to delay the speech by one day, to Sept. 8. The dust-up underscored Obama’s dilemma as he attempts to show progress on the economy while distancing himself from a dysfunctional Washington...White House officials said Obama would lay out a much-anticipated package of new proposals to stimulate job growth, a package expected to include spending programs for roads, bridges, school repair and training for the long-term unemployed."
@PourMeCoffee : "Obama: 'Way.' GOP: 'No way.' There, you are caught up on today's and the whole last three years of politics."
2) The speech won't matter, writes Ezra Klein: "Obama’s speech will achieve nothing. It will go nowhere because it has nowhere to go. A speech can rally the base, and maybe even temporarily change the topic in the news. But it can’t change the fundamental fact of politics right now, which is that the two parties disagree on the most profound question in Washington. It’s not: How do we fix the economy? It is: Who should win the next election? So long as Republicans and Democrats disagree on that, there will be no significant cooperation on substantive issues. Boehner simply will not cut off his party’s candidates at the knees, especially its presidential contenders, by handing Obama a major economic accomplishment. Because he controls the House of Representatives, that means Obama -- and, by extension, the U.S. -- is not going to get a major economic accomplishment."
@BrianBeutler : "On the plus side: NEW PRECEDENT!"
3) The Justice Department will try to block the AT&T/T-Mobile merger, reports Cecilia Kang: "The Justice Department on Wednesday sued to block AT&T’s $39 billion pursuit of T-Mobile, saying the deal would leave consumers with fewer choices and higher bills for mobile phone service that has become 'indispensable' to the way Americans live and do business. AT&T immediately vowed to challenge the lawsuit, setting the stage for the most significant antitrust battle of the Obama administration, which had vowed to rigorously police big business deals that are bad for consumers. But Justice has rarely gone to court to stop blockbuster deals, and it failed the last time it sued to prevent a big corporate merger, seven years ago. Justice officials said the outcome of the deal, which would combine the second- and fourth-largest wireless companies, made their decision clear."
This breaks Obama's pattern of not taking companies to court: http://wapo.st/q6PAy5
4) Jon Huntsman has put out a jobs plan, reports Nia-Malika Henderson: "Lagging badly in the polls, GOP presidential candidate Jon Huntsman Jr. turned his attention to jobs Wednesday afternoon, unveiling a plan to jump-start the economy by revising the tax code, repealing financial regulations and opening up foreign markets...Huntsman’s plan calls for eliminating taxes on capital gains and dividends, lowering the business tax rate, and instituting a tax holiday for repatriating corporate profits earned overseas. Addressing regulations, Huntsman said he would repeal Obama’s health-care plan -- all of his Republican rivals have vowed to do the same if elected -- as well as the Dodd-Frank bill, which increased oversight of the financial sector. Huntsman also took aim at the Environmental Protection Agency."
5) Obama is fast-tracking infrastructure projects already in the pipeline, reports Andrew Restuccia: "President Obama put more meat on the bones of his jobs agenda Wednesday, outlining a plan to quickly permit major infrastructure projects pending approval at several federal agencies. He signed a presidential memorandum instructing federal agencies to each identify three major infrastructure projects that will create jobs and can be greenlighted by the Obama administration within 18 months...The plan comes a week before Obama is slated to outline his jobs plan during a speech before a joint session of Congress. The memorandum -- which is directed toward the Agriculture, Commerce, Housing and Urban Development, Interior and Transportation departments -- specifically calls on agencies to identify projects that have already secured funding."
Live in Europe interlude: Okkervil River play "Unless It's Kicks" in Haldern, Germany.
Got tips, additions, or comments? E-mail me.
Still to come: All sides suffered from the debt limit standoff; health insurance subsidies for the unemployed are ending; a new rule would require political donation disclosure from public companies; an administration-backed clean energy company folded; and hot dogs on a rake.
Everyone lost the debt limit standoff, reports Dan Balz: "According to a new analysis by one of the country's leading pollsters, the standoff dealt a devastating body blow to public confidence in the economy and government that has powerful implications for the 2012 elections. 'The debt ceiling negotiation is an extremely significant event that is profoundly and sharply reshaping views of the economy and the federal government,' Bill McInturff of Public Opinion Strategies wrote in a just-completed analysis...Each side assumed that, with the outcome, the other would bear the brunt of public dissatisfaction. Obama believed he would be rewarded for appearing open to compromise and for being the adult in the room. Republicans thought they would gain by showing greater determination to cut spending. Instead, both sides lost -- badly."
The AFL-CIO and Chamber of Commerce have put out dueling jobs proposals, report Dave Levinthal and Anna Palmer: "Two of the nation’s behemoth political forces are about to grapple over jobs. Seizing on Labor Day’s approach, the U.S. Chamber of Commerce and the AFL-CIO each issued dueling six-point job creation proposals on Wednesday, most likely foreshadowing a bitter fight ahead of the 2012 election. Chamber President Tom Donohue said his organization will engage in a 'massive mobilization' of members to get its message to Congress and the White House. Details on the effort were scant at a Wednesday morning news conference, but spokeswoman Blair Latoff said in an email to expect more at the rollout next week. The AFL-CIO, meanwhile, said it would use its newly formed super PAC tool to empower working people and press its political agenda of promoting laborers and creating good jobs."
Banks have agreed to end "robosigning", reports Liz Rappaport: "The mortgage industry will take a step toward cleaning up some of its most controversial practices under a deal between a New York regulator and three financial firms, including Goldman Sachs Group Inc. Under the agreement with the state's financial-services superintendent, Benjamin M. Lawsky, the three firms--Goldman, its Litton Loan Servicing business and Ocwen Financial Corp.--promised to end so-called robo-signing, in which bank employees signed foreclosure documents without reviewing case files as required by law. They also agreed to comb through loan files for evidence they mishandled borrowers' paperwork and to cut mortgage payments for some New York homeowners. The settlement most affects mortgage servicers, the companies that collect monthly house payments from homeowners and pass them on to investors and lenders."
Many top CEOs earn more than their companies pay in taxes, reports Peter Whoriskey: "It has become a bipartisan article of faith in some quarters that the income tax on U.S. corporations must be lowered. But for many large U.S. companies, the burden of U.S. taxation pales in comparison with what they pay their chief executives, according to a study released Wednesday by the Institute of Policy Studies, a liberal think tank. Of last year’s 100 highest-paid corporate executives in the United States, 25 earned more in pay than their company recorded as a tax expense in 2010. Those 25 firms reported average global profits of $1.9 billion. Among the 25 were Verizon, Bank of New York Mellon, General Electric, Boeing and eBay...Some companies argued that the institute’s approach -- which focused on what the firms recorded as a tax expense within the 2010 calendar year -- presented a skewed picture."
The study doesn't make sense, writes Felix Salmon: http://reut.rs/n314wG
Supercommittee members are getting prepped, reports Seung Min Kim: "A day after Republicans on the supercommittee met for a daylong session on Capitol Hill, their Democratic counterparts chatted via a conference call that lasted under an hour. An aide familiar with the call said the Democratic supercommittee members -- Sens. Patty Murray of Washington, Max Baucus of Montana and John Kerry of Massachusetts and Reps. Chris Van Hollen of Maryland, Xavier Becerra of California and James Clyburn of South Carolina - discussed various logistics such as a schedule of meetings and various ways to work with Republicans on the panel. During the call, lawmakers also talked about other major deficit-reduction plans, the aide said. The panel’s Democrats have been talking regularly on the phone since being named to the powerful committee charged with finding at $1.5 trillion in deficit-reduction measures."
Liberals haven't given up hope of passing a jobs plan, reports Suzy Khimm: "First, some on the left are still holding out hope that Congress can pass some kind of significant jobs package this fall, even in the face of staunch Republican opposition. Michael Ettlinger, vice president of economic policy for the Center for American Progress, says that Obama shouldn’t just go off the assumption that Republicans will shoot down every big idea that Democrats put on the table. 'We need to test the boundaries of what Congress is willing to do. And on job creation those boundaries haven’t been tested,' he says...Given the likelihood that any big spending bill will be dead in the water once it hits Congress, some liberals say they’re more hopeful that a jobs package could be part of the supercommittee’s deficit-reduction deal...Other liberals may just be holding out for the 2012 elections for anything substantial to pass Congress again."
Harvard economist Kenneth Rogoff thinks the economy needs a dose of inflation, reports Leon Neyfakh: "For the better part of the past 30 years, the dollar has stayed stable...with the central bank standing guard over the economy and doing everything necessary to keep inflation low. You might say that Kenneth Rogoff has been one of the guards...His reputation as a conservative-minded inflation hawk followed him from the Fed to the International Monetary Fund to his current position in the economics department at Harvard. But then came the financial crisis of 2008, and the ensuing slump. And as the economy has continued to stagnate, Rogoff, 58, has become the flag-bearer for an unlikely position: that as we struggle to help the economy find its way out of the darkness, inflation could be the answer. It’s time, Rogoff says, to put Reagan’s 'hit man' to work for the good guys."
Late night interlude: Amy Sedaris makes hot dogs-on-a-rake on Late Night with Jimmy Fallon.
COBRA insurance subsidies for the unemployed are ending, reports Phil Galewitz: "One of the key consumer benefits of the federal stimulus package - subsidies to help laid-off workers continue their health care coverage - draws to a close Wednesday, raising concerns about how the unemployed will cover those expenses...COBRA [is] a program set up under federal law that allows people who lose their jobs to keep the employer-provided insurance, typically for 18 months, if they pay the entire premium plus a small percentage for an administrative fee. In February 2009, at the height of the economic downturn, Congress first approved a 65 percent subsidy for COBRA premiums to help those who had been laid off starting in September 2008. Congress extended the COBRA subsidy three times to cover workers who lost their jobs through May 2010, but lawmakers last year resisted another extension amid rising concerns about the federal deficit. The subsidy lasted for up to 15 months so it expires Wednesday."
It's unclear whether they worked: http://wapo.st/qLJAhd
Foreclosures and bad health go together, reports Mitra Kalita: "The threat of losing your home is stressful enough to make you ill, it stands to reason. Now two economists have measured just how unhealthy the foreclosure crisis has been in some of the hardest-hit areas of the U.S. New research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University shows a direct correlation between foreclosure rates and the health of residents in Arizona, California, Florida and New Jersey. The economists concluded in a paper published this month by the National Bureau of Economic Research that an increase of 100 foreclosures corresponded to a 7.2% rise in emergency room visits and hospitalizations for hypertension, and an 8.1% increase for diabetes, among people aged 20 to 49...And the same rise in foreclosures was associated with 39% more visits for suicide attempts among the same group."
Huntsman's tax plan would get rid of the health care deduction, reports Julian Pecquet: "Republican presidential candidate and former Utah Gov. Jon Huntsman on Wednesday announced a tax-reform plan that would unravel the nation’s system of employer-sponsored health insurance, the Center for American Progress’s Seth Hanlon opines on the liberal website ThinkProgress...The tax-free treatment of employer-sponsored health insurance...enables employers to provide health coverage to some 160 million American workers and their dependents. The exclusion of employer contributions for medical insurance premiums and medical care was worth more than $100 billion in 2011. Sen. Ron Wyden (D-Ore.) and then-Sen. Bob Bennett (R-Utah) championed that idea during the healthcare reform debate, but it went nowhere, in part because of strong opposition from unions and many employers."
A state-based public option could be on the ballot in California next year, reports Siddartha Mahanta: "Consumer Watchdog, a California-based consumer advocacy group, is spearheading a ballot initiative that would create a public option for the state. By introducing a public competitor to the health insurance marketplace, the group argues, private insurance companies would have to lower their own rates. The plan would also roll back insurance rates by 20 percent and exact tougher oversight of premiums. The goal: to get the initiative approved by the state attorney general's office and ready for a vote by the November 2012 election. Jacob Hacker, the Yale professor who is credited with the idea for the federal public option, says a state-run version could do a lot of good too."
An SEC proposal would mandate campaign donation disclosure from public firms, reports T.W. Farnham: "A proposal before the Securities and Exchange Commission that would require public companies to disclose political contributions has drawn some favorable comments from investors, but it won’t go a long way in meeting the demands of those advocating for more transparency in political fundraising. A group of 10 law professors filed a formal petition asking the commission to require corporations to list political contributions in annual proxy statements sent to shareholders. The professors cite a growing interest among shareholders for disclosure of political contributions...Advocates for transparency have been pushing various ways, both in Congress and the executive branch, to force interest groups to disclose their financial backers. So far, none has been enacted."
Obama is pushing Congress to approve the highway bill, reports David Nakamura: "This month, a congressional impasse shut down parts of the nation’s airline transportation system. Next month, according to President Obama, it could be highways and other mass transit projects. Hoping to head off a work stoppage, President Obama on Wednesday called on Congress to approve a funding extension to the Surface Transportation Bill, which is due to expire at the end of September. If the bill is not extended, Obama said, 4,000 workers would be immediately furloughed without pay and 1 million workers could be out of a job over the next year...Congress is divided on how to extend the highway funding. The Republican controlled House is considering a six-year, $230 billion bill that would be paid for with fuel taxes. The Democratically controlled Senate proposal would last only two years, and cost $109 billion."
Farms are facing tighter child labor rules, reports Scott Kilman: "The U.S. Labor Department proposed Wednesday to increase for the first time in four decades its list of jobs too hazardous for hired hands age 15 and younger to do on the farm, long one of the most dangerous places in America for children to work. Under the proposed changes, laborers who are hired to do such things as drive most tractors or work in tobacco fields would have to be at least 16 years old...Agricultural interest groups don't want federal regulators to make it any harder for them to recruit and train the next generation of farmers. But child-safety advocates want Washington to get tougher than current labor law, which allows 16-year-olds to perform jobs on the farm that regulators deem too hazardous for them to do off the farm at that age, such as handling dynamite, chainsaws and pesticides."
Adorable animals sleeping interlude: A dog's ear flaps as she sleeps on top of the A/C vent.
An Obama-touted clean energy company has shut down, report Joe Stephens and Carol Leonnig: "A company that served as a showcase for the Obama administration’s effort to create jobs in clean technology shut down Wednesday, leaving 1,100 people out of work and taxpayers obligated for $535 million in federal loans. Solyndra, a California solar panel maker, had long been an administration favorite. Over the past two years, President Obama and Energy Secretary Steven Chu each had made congratulatory visits to the company’s Silicon Valley headquarters. Although Wednesday’s announcement came as a surprise, House Republicans and government auditors had questioned the wisdom of the administration’s loan guarantees to the company, backed by capital from billionaire Democratic fundraiser George Kaiser."
Congressional Republicans are pouncing on the failure, reports Darren Goode: "House Republicans vow to continue their probe of the Energy Department’s $535 million loan guarantee to Solyndra, saying the solar equipment manufacturer’s announcement Wednesday that it will file for bankruptcy underscores that the federal aid was a 'dubious' investment. 'We smelled a rat from the onset,' said a joint statement from House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and the panel’s oversight subcommittee chairman, Cliff Stearns (R-Fla.)...They also complained that both the administration and committee Democrats have opposed their efforts to uncover the facts behind the loan guarantee."
Energy Secretary Steven Chu looks likely to back the Keystone XL pipeline, reports Andrew Restuccia: "Energy Secretary Steven Chu signaled this week that he supports a controversial proposed oil sands pipeline project being considered by the Obama administration. The administration is reaching the tail end of its multi-year review of TransCanada’s Keystone XL pipeline, which would carry oil sands from Alberta to refineries on the Texas Gulf Coast. The State Department is expected to make a final decision by the end of the year. Chu, in a sit-down interview on Tuesday with the television program energyNOW!, did not say directly whether he supports approving the project, but touted its potential benefits. Canada is a more stable supplier of oil than many other countries, Chu said. 'It’s certainly true that having Canada as a supplier of our oil is much more comforting than to have other countries supply our oil,' Chu said."
Closing credits: Dylan Matthews is a student at Harvard and a researcher at The Washington Post. Wonkbook is compiled and produced with help from Sarah Halzack.