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Five years ago, members of Congress went home for their August recess only to be engulfed by tea partiers raucously protesting the health-care law at town hall meetings. The mobilization was swift, overwhelming, and effective. It ensured there wouldn't be even a shadow of Republican support for the bill, and made certain that many Democrats knew an "aye" vote could cost them their jobs.
This August could have hosted a similar mobilization around immigration -- and on behalf of either side. Restrictionists could've dominated town halls and other events, solidifying House Republican opposition and unnerving Democrats. Or the pro-immigrant community could've massed its forces, giving Republicans a clear look at the size of the constituency they're losing.
Insofar as there has been a mobilization, it's been, as Holly Yeager reports, concentrated on the pro-immigration side. But much of it has been oddly arms-length given the up-close-and-personal activism that tends to dominate recesses. The National Association of Manufacturers, for instance, is buying up 60-second radio ads. The tech group FWD.us is airing a television ad about a young immigrant who wants to become a marine.
There are some more personal touches. Yeager reports on a sit-in at House Whip Kevin McCarthy's office -- one of 350 events sponsored by the Alliance for Citizenship. The Chamber of Commerce has about 60 events scheduled, though immigration is only one of the agenda items.
Some of this comes down to a lack of political mobilization, particularly on the anti-immigration side. Some of it, on the pro-immigration side, comes down to a fear that clips of immigrants shouting down members of Congress at town halls will not be well-received.
But all of it means that this recess isn't likely to be a gamechanger for immigration reform. At best, advocates for the legislation hope that Republican lawmakers realize the absence of a hot opposition makes them realize they can probably vote for a bill without too much backlash. But that's a bit of a wan hope.
Wonkbook's Numbers of the Day: $3 and $8. That's the amount consumer spending tends to increase for every $100 increase in wealth held in stocks or in housing, respectively. So rising stock prices and home prices will feed back into consumption. It's called the "wealth effect" in economics.
Wonkbook's Graph of the Day: You really, really have to check out The Wall Street Journal's new interactive tool that breaks down changes in retail sales.
Wonkbook's Top 5 Stories: 1) back-to-school means back to education policy; 2) the Summers of discontent; 3) the stop-Obama theory of immigration reform; 4) how to understand Obamacare's delays; and 5) can't have another Snowden if they're all fired.
1) Top story: Back-to-school time is coming. So is Obama's education agenda.
Obama pushes ambitious Internet access plan for schools. "President Obama liked the idea laid out in a memo from his staff: an ambitious plan to expand high-speed Internet access in schools that would allow students to use digital notebooks and teachers to customize lessons like never before. Better yet, the president would not need Congress to approve it. White House senior advisers have described the little-known proposal, announced earlier this summer under the name ConnectEd, as one of the biggest potential achievements of Obama’s second term. There’s just one catch: The effort would cost billions of dollars, and Obama wants to pay for it by raising fees for mobile-phone users. Doing that relies on the Federal Communications Commission, an independent agency that has the power to approve or reject the plan." Zachary A. Goldfarb in The Washington Post.
...And they're pushing forward on early education, too. "President Barack Obama has found a way to cater to his obsession with pre-K programs while the rest of his education agenda stalls: Skip Congress and spend the money anyway...Race to the Top early learning awards and Affordable Care Act money are helping states carry out their pre-K and early childcare plans. Education Secretary Arne Duncan is traveling the country to deliver what amounts to an early childhood stump speech, and the administration just hired a new leader for its Office of Early Learning...By directing money to state-level programs across the country, the Obama Department of Education is basically building out a national pre-K agenda, regardless of congressional dysfunction." Caitlin Emma in Politico.
Martha Kanter, top Obama official on higher ed, to resign. "Martha Kanter, an Obama administration education undersecretary, is preparing to step down, according to an email obtained by The Huffington Post. Kanter has served in the Education Department since 2009, when she was confirmed as undersecretary. She has overseen higher education policies, such as student aid and adult education...In a departure memo sent to administration staff Tuesday evening, confirmed by Education Department spokesman Cameron French, Kanter said she will transition out of her job "to return to academia." She did not give details. She said she will leave in the fall, but only after the agency finds a replacement." Joy Resmovitz in The Huffington Post.
Music recommendations interlude: Van Morrison and Tom Jones, "Cry for Home."
ORSZAG: With so many job openings, why so little hiring? "To get some sense of how significant this is, consider that if, since June 2010, hiring had risen a third as much as advertised jobs have (rather than only a 10th), and nothing else were different, job creation would be roughly 500,000 higher each month, and the unemployment rate would already be back to normal levels...A related interpretation, favored by Steven Davis of the University of Chicago, Jason Faberman of the Federal Reserve Bank of Chicago and John Haltiwanger of the University of Maryland, is that companies have reduced their “recruiting intensity.” They advertise jobs but don’t have much interest in filling them." Peter Orszag in Bloomberg.
MELTZER: When inflation doves cry. "Instead of rejecting monetary theory and history, the army of Wall Street soothsayers should look beyond the Fed’s press releases and ask themselves: Does it make sense to throw out centuries of experience? Are we really so confident that the Fed has found a new way?...Instead of continuing along this futile path, the Fed should end its open-ended QE3 now. It should stop paying interest on excess reserves until the US economy returns to a more normal footing. Most important, it should announce a strategy for eliminating the massive volume of such reserves. I am puzzled, and frankly appalled, by the Fed’s failure to explain how it will restore its balance sheet to a non-inflationary level. The announcements to date simply increase uncertainty without telling the public anything useful." Allan Meltzer in Project Syndicate.
REICH: The real price of gridlock. "Just because the legislature has ceased to function doesn’t mean our government has. Political decision making has moved to peripheral public entities, where power is exercised less transparently and accountability to voters is less direct. What we’re losing in the process isn’t government — it’s democracy." Robert B. Reich in The New York Times.
GALSTON: The real trade-offs in housing reform. "Corker-Warner would not be cost-free. Mark Zandi of Moody's Analytics calculates that the increased private capital reserves the legislation makes necessary would increase interest rates for average borrowers by 50-75 basis points—about $75 per month, enough to price some would-be borrowers out of the market. In 15 years, after the insurance fund builds up to adequate levels, this would shrink to about 35-55 basis points, according to Mr. Zandi." William A. Galston in The Wall Street Journal.
GOLDSTEIN: Give money to the poor, no strings attached. Is that a crazy idea? Not really. "After Mexico’s economic crisis in the mid-1990s, Santiago Levy, a government economist, proposed getting rid of subsidies for milk, tortillas and other staples, and replacing them with a program that just gave money to the very poor, as long as they sent their children to school and took them for regular health checkups...Levy commissioned studies that compared spending habits between the towns that received money and similar villages that didn’t. The results were promising; researchers found that children in the cash program were more likely to stay in school, families were less likely to get sick and people ate a more healthful diet. Recipients also didn’t tend to blow the money on booze or cigarettes, and many even invested a chunk of what they received." Jacob Goldstein in The New York Times.
BRADY: The Fed's next century. "The bill would create a 12-member, bipartisan commission that would objectively review the Fed's performance in terms of output, employment, prices and financial stability over its first 100 years. The commission would also study what legislative mandate the Fed should follow to best promote economic growth and opportunity. Advocates of different monetary regimes—discretionary policy, inflation-rate-targeting, price-level-targeting, nominal GDP-targeting, a gold standard—would have an open forum in which to make their case based on empirical evidence. After a comprehensive review involving our best monetary economists, the commission would make recommendations to Congress, as was done before the Fed was established." Kevin Brady in The Wall Street Journal.
BARTLETT: What to do about the federal deduction for state and local taxes? "The Salt deduction is among the oldest in the tax code. The first income tax law enacted 100 years ago this year provided a deduction for all state, county, school and municipal taxes paid within the last year. It is not known why it was adopted, but lawmakers may have felt that it was fundamentally unfair to tax a tax...While those in the blue states will undoubtedly fight any proposal to eliminate or limit the Salt deduction, one thing that should be kept in mind is that the deduction is already sharply limited by the alternative minimum tax, a separate tax system primarily affecting the wealthy that eliminates certain tax preferences, including the Salt deduction. Thus those covered by the A.M.T. have already lost the Salt deduction or had it curtailed, whether they realize it or not." Bruce Bartlett in The New York Times.
In one chart interlude: The history of the world, from prehistory to 1931.
2) Now is the Summers of their discontent
The White House is annoyed with the Senate getting all up in its business in picking a Fed chair. "The president has chafed at the prospect of being boxed in on what he views as clear presidential authority, but some lawmakers argue they have a constitutional duty both to confirm the Fed nominee and make known their preferences...After word of the letter leaked out, senior White House aides privately conveyed the president's displeasure to their counterparts on Capitol Hill, officials said. In one recent meeting, deputy White House chief of staff Rob Nabors discussed the Fed appointment with David Krone, chief of staff for Senate Majority Leader Harry Reid (D., Nev.). Mr. Nabors came away from the meeting with the assurance that Mr. Reid would support whomever Mr. Obama chooses, according to a person familiar with the meeting." Carol E. Lee, Peter Nicholas, and Colleen McCain Nelson in The Wall Street Journal.
Few clues to regulatory goals of Fed rivals. "Mr. Summers and Ms. Yellen are now the leading candidates to head the Federal Reserve, and the winner is likely to spend far more time on financial regulation than previous Fed chairmen. Congress has greatly expanded the Fed’s regulatory purview; moreover, the central bank’s basic responsibility to try to keep the economy on an even keel, experts say, will require a much greater focus on ensuring the stability of the financial system. The two candidates share similar views on many regulatory issues, according to a review of their public statements and interviews with friends and colleagues. Both forged academic careers as members of the economics counterculture that attacked the dogma of efficient markets. Both say they believe that markets require regulation to prevent abuses, ensure fair competition and prevent disruptions of economic growth" Binyamin Appelbaum in The New York Times.
July retail sales inch up. "The Commerce Department reported on Tuesday that retail sales increased 0.2 percent in July from June. Sales had risen 0.6 percent in June from May because of a surge in auto sales. The core figures for retail sales, which exclude the volatile auto, gas and building supply categories, rose 0.5 percent in July. It was the biggest such gain since a similar increase in December. Retail sales are closely watched because they are the government’s first report each month on consumer spending, which accounts for 70 percent of American economic activity." The Associated Press.
Wealth effect drives up US spending. Woohoo! "Shoppers are "seeing the value of their homes and retirement accounts go up," said John Venhuizen, chief executive of Ace Hardware Corp., an Oak Brook, Ill., retailer cooperative with 4,700 stores globally. "That wealth effect is making people feel more comfortable buying higher-priced items like barbecue grills, which increased by double digits in July" from a year earlier, he said...In a healthy economy with near-full employment, every $1 increase in stock wealth raises consumer spending by roughly three cents over an 18-month period, said Mark Zandi, chief economist at Moody's Analytics; every $1 in housing wealth sends up that spending by eight cents. The effect is less potent in today's slower economy, he said, translating into about two cents of spending for every $1 in stock wealth and five cents for every $1 in housing wealth." Brenda Cronin and Shelly Banjo in The Wall Street Journal.
How salad dressing explains the economy. "Low-income consumers are switching to private-label brands to save money. But at the same time, fresh and organic premium dressings are also growing at two to three times the rate of regular dressings. Middle class brands, like those marketed by Kraft Foods and the giant Unilever, are feeling the squeeze." Lydia DePillis in The Washington Post.
Recessions used to make people live longer. But not anymore. "A new working paper by the University of Virginia’s Christopher Ruhm finds that the odd relationship between recessions and mortality has disappeared in recent years. The reason is interesting: Recessions still reduce deaths due to heart attacks and traffic accidents. But they increase deaths due to cancer and “accidental poisoning.” The cancer finding, Ruhm writes, likely reflects “the increasing importance of financial resources used to purchase sophisticated (and expensive) treatments that have become available in recent years,” while the accidental poisoning finding “reflects the unintended consequences of illicit or prescribed use of opioids used to treat mental health problems, which become more prevalent during economic downturns.”" Ezra Klein in The Washington Post.
US won't prosecute JP Morgan's 'London whale.' "The developments mark the first move by prosecutors trying to uncover who was responsible for the trading fiasco in a London outpost of the bank's chief investment office, and whether any wrongdoing was involved. The decision not to prosecute Mr. Iksil suggests the former trader has emerged as an important witness...[JP Morgan] is in settlement talks with the Securities and Exchange Commission to resolve a probe into whether it provided the proper disclosures of the losses. The SEC has been pressing for a settlement in which the bank admits to some wrongdoing." Dan Fitzpatrick, Devlin Barrett, and Gregory Zuckerman in The Wall Street Journal.
Woah interlude: A day in the life of the KKK.
3) Act now on immigration, while Obama is standing by
Immigration advocates make big push this month. "An unusual alliance of advocates — including Internet moguls and evangelicals, representatives of big business and labor unions — is working across the country during the August congressional recess in an all-out push for immigration reform. The broad effort, which also includes immigrant rights groups, is using diverse tactics, too. There are roundtables and rallies, sit-ins and voter registration drives, as well as expensive radio and television ads." Holly Yeager in The Washington Post.
Pathway to citizenship would boost GDP by $1.4T over decade. "The White House on Tuesday released a new report arguing a pathway to citizenship for the nation's 11 million illegal immigrants would add 2 million jobs to the economy and boost gross domestic product by $1.4. trillion over the next decade. The report, penned by Director of Domestic Policy Cecilia Muñoz and Director of the National Economic Council Gene Sperling, is the latest in a series of releases touting the economic benefits of comprehensive immigration reform as the White House pushes House Republicans to act on the issue." Justin Sink in The Hill.
Primary source: "The economic benefits of providing an earned path to citizenship." White House.
Rubio: With no congressional action, Obama will do immigration reform by executive order. Do conservatives really want that? "Stalling on Capitol Hill might force the president’s hand, the Florida Republican said. That could result in a mass legalization of undocumented immigrants without any of the reforms included in the Senate-passed immigration bill that Rubio played a key role in writing and negotiating. Rubio said continued delay in Congress could create a scenario in which the nation misses out on his bill’s technological advances along the border with Mexico, drones, cameras, more Border Patrol agents and a national E-Verify system." Burgess Everett in Politico.
...And this marks something of a return of Rubio to the debate. "The line is meant to touch a nerve with conservatives who might dislike the idea of immigration reform, but loathe the idea of Obama taking on any major issue on his own — let alone immigration. Rubio’s goal is to re-ignite momentum behind a reform package that fizzled this summer in the House, where most Republicans have balked at the idea of a path to citizenship for millions of undocumented workers." Anna Palmer and Burgess Everett in Politico.
Deep thoughts interlude: "The idea of selling out is only understandable to people of privilege."
4) How to read the Obamacare delays
Health law delays are starting to pile up. "Republicans opposed to the health-care overhaul have had scant luck in overturning or delaying the law, but corporate America has succeeded in persuading the Obama administration to temporarily postpone a growing number of its provisions. In February, the administration delayed part of a requirement that some employer health-insurance plans cap employees' out-of-pocket costs. In June, a rule that small businesses offer either a single plan or allow employees to choose among different plans was delayed, and a month later, the administration postponed until 2015 a mandate that larger employers offer health insurance." Amy Schatz in The Wall Street Journal.
IRS moves to share taxpayer information under Obamacare. "The agency will share personal information such as income and tax filing status with states and other agencies to confirm whether or not people are eligible for tax credits to buy health insurance in new state-based marketplaces...The IRS already shares taxpayer information with other federal agencies to determine whether Americans are eligible for programs like Medicaid. Additionally, there are legal penalties already on the books for the improper use or release of tax return information." Julian Hattem in The Hill.
We might hear more stories like this, though, as states parse the challenges of implementing the law. "When Washington state approved individual health-insurance plans from four companies to be sold inside its newly created exchange marketplace, it also rejected efforts by five others. Now, critics say that rejection will limit consumer choices and hurt continuity of care for those with low incomes...State Insurance Commissioner Mike Kreidler said some plans had trouble securing adequate networks of providers or meeting other commercial-market regulations, which he said can pose a significant challenge." Carol M. Orstrom in The Seattle Times.
KLEIN: 4 ways to understand the latest Obamacare delay. "[I]t’s time, once again, to play Obamacare Rashomon! Does this mean: 1) “The Obamacare ‘train wreck‘ continues,” with another “vivid demonstration of governing incompetence.” 2) The Obama administration is correctly showing flexibility in the rollout of a vast and complex law. No legislation fully survives first contact with reality, and they’re doing the right thing by listening to employers and insurers who say this small provision would be too burdensome to implement in 2014. 3) The Obama administration is favoring the interests of politically powerful employers and insurers over the interests of consumers and, in particular, the chronically ill, who would be likeliest to spend past these out-of-pocket limits. 4) Almost nothing. This is a small provision that effects relatively few people that’s only being delayed in certain cases — and even then, it’s only being delayed for a single year. Chill out." Ezra Klein in The Washington Post.
PONNURU: Not every glitch means that Obamacare is fatally flawed. "Some Obamacare critics see this as a major setback to the law, and others as even part of a stealth plot to foist a single-payer plan on Americans. But they are reading far too much into a minor delay. Eventually, employers and insurers will program their computers to keep track of consumers’ out-of-pocket expenses, and this provision of the law will be able to be implemented. Still, it does seem as though the administration is awfully free in handing out waivers and delays when businesses and insurers complain." Ramesh Ponnuru in Bloomberg.
COHN: The place to be frustrated with the delay. "The ruling is indeed frustrating and, for a change, it will actually make a difference to people who need insurance. Obamacare is supposed to place a hard limit on your out-of-pocket medical spending. If you have coverage through an employer—that is, a “group” plan—the limit is supposed to be $6,350 for an individual and twice that for a family. But the employers who provide group coverage frequently do so by breaking out spending into different categories—and, sometimes, hiring outside companies to manage the different parts. An employee in such a company would, technically speaking, have several different insurance plans—one each for medical, prescriptions, dental, and so on. Employers told the administration that coordinating records from the different plans was difficult, so the administration gave them some leeway." Jonathan Cohn in The New Republic.
YGLESIAS: Conservatives boycott Obamacare only at their own loss. "They’ll end up persuading many grassroots conservatives not to participate. Trying to trick people into not exploring the potential benefits of a new government program is a rather novel tactic in American politics, perhaps because it’s blatantly immoral. But conservative leaders truly believe the ACA is disastrous for the country and are more than willing to sacrifice the concrete interests of their followers to undermine it." Matthew Yglesias in Slate.
Urban interlude: Street life in 19th-century London, captured in stunning photographs.
5) Nothing like an army of discontented, unemployed hackers to improve national cyber-security
NSA to cut 90 percent of systems administrators. "Army Gen. Keith B. Alexander, the NSA’s director, told a cybersecurity conference at Fordham University in New York last week that almost the agency’s entire crew of systems administrators is being cut. “What we’re in the process of doing – not fast enough – is reducing our system administrators by about 90 percent,” he said in remarks earlier reported by Reuters. Many of those systems administrators are contractors, like Snowden was before he fled the United States and Booz Allen Hamilton fired him. Instead of the 1,000 systems administrators NSA uses, Alexander wants to move more of the operation to the cyber cloud, called the Intelligence Community’s Information Technology Enterprise (ICITE),which relies on a network of computers linked on the Internet." Joe Davidson in The Washington Post.
Longread: How about a Wednesday longread? Try this profile of Laura Poitras and Glenn Greenwald. Peter Maass in The New York Times.
Primary source: "Reviewing Our Global Signals Intelligence Collection and Communications Technologies." Federal Register.
Clapper won't head NSA surveillance review, says White House. "The Obama administration is denying that James Clapper, the director of national intelligence, will control a review of the government's surveillance programs. Privacy advocates expressed dismay on Monday after President Obama directed Clapper to establish a group that will provide recommendations for reforming the controversial surveillance programs. The review is part of the president's push to restore public trust in the programs, but the privacy activists argue that the group can't be independent if it is led by the administration's top intelligence official." Brendan Sasso in The Hill.
Reading material interlude: The best sentences Wonkblog read today.
This amazing, animated chart shows the aging of America. Brad Plumer.
Explainer: Here’s what you need to know about stop and frisk — and why the courts shut it down. Dylan Matthews.
‘There is no redeeming feature of the Hyperloop.’ Brad Plumer.
Four ways to understand the latest Obamacare delay. Ezra Klein.
Mo’ money mo’ meat: Rich countries are extremely carnivorous. Lydia DePillis.
How salad dressing explains the economy. Lydia DePillis.
In defense of open kitchens. Ezra Klein.
Why blackouts are becoming more common, in two charts. Brad Plumer.
Boring but important: What counts as an "audit" may soon be changing. Michael Rapoport in The Wall Street Journal.
Clearly the lesson to this piece is: Dirty movies come out on top. Catherine Rampell in The New York Times.
How to bring the airlines back: competition, not mergers. Eduardo Porter in The New York Times.
Wonkbook is produced with help from Michelle Williams.