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Wonkbook: Few surprises in Yellen’s debut, but she briefly shakes markets

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. To subscribe by e-mail, click here. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.

(Photo by Jin Lee/Bloomberg)

Wonkbook’s Number of the Day: $10 billion. That's the number by which the Fed has just again reduced its bond purchases.

Wonkbook’s Chart of the Day: This chart shows results from a survey on how a minimum-wage increase would affect hiring.

Wonkbook's Top 5 Stories: (1) Yellen's debut; (2) U.S. implications of Russia's Crimea takeover; (3) jobless benefits deal in jeopardy; (4) Obama's fine environmental line; and (5) the tea party may be over.

1. Top story: Yellen's debut offers few surprises but shakes markets.

Federal Reserve lays groundwork for first interest rate hike. "The Federal Reserve spent the past five years driving home a single message: Zero percent interest rates are here to stay. Now it is preparing to change its tune. The nation’s central bank said Wednesday it will look at a broad swath of indicators — including job market data, inflation expectations and financial developments — as it determines when to raise rates for the first time since the recession hit. The deliberately vague wording is a retreat from the Fed’s concrete promise to leave rates untouched. Though they disagree on when to act — targets range from this year to 2016 — the statement signals the moment has finally come within striking distance. The Fed has cast the shift as merely a change in semantics, not in official policy. In its statement, the central bank tried to assure investors that rates could remain below historical levels — even if they are no longer at zero." Ylan Mui in The Washington Post.

As expected, the Fed also continued tapering its bond purchases. "The Federal Reserve further curtailed its economic stimulus campaign on Wednesday, even as it said the effort would continue for the foreseeable future given the enduring consequences of the Great Recession. The Fed, as expected, announced it would reduce its monthly purchases of Treasury and mortgage-backed securities by $10 billion, to $55 billion, because of its confidence that the four-year-old recovery is finally becoming self-sustaining." Binyamin Appelbaum in The New York Times.

But Yellen's mixed message on rate hikes rattled markets. "Investors bristled after Janet Yellen emerged from her first meeting as Federal Reserve chairwoman with some unsettling signals about the central bank's outlook for short-term interest rates....Even though the Fed's official policy statement sought to give assurances of continued low rates far into the future and Ms. Yellen played down rate-increase expectations, stock prices fell and longer-term rates on Treasury bonds moved up....The market response was emblematic of the market's hypersensitivity to the Fed's interest-rate decisions after seven years of aggressive central-bank action to stabilize and strengthen the economy. It is also emblematic of the challenge Ms. Yellen faces as she takes charge at the Fed. As the economy gets on a stronger footing, the Fed is gradually stepping back from its easy-money stance, but if it moves back too quickly, it could undercut the recovery it has been working to support." Jon Hilsenrath and Victoria McGrane in The Wall Street Journal.

Quotable: @MarketplaceAPM: "The dots are going to move up and down all the time... this way and that," Janet Yellen, on graphs.

Primary sources:

The full text of the Federal Reserve's statement. The Associated Press.

Yellen's first FOMC statement, annotated. Felix Salmon in Reuters.


How Janet Yellen is looking at the economy. Catherine Hollander in National Journal.

Six takeaways from the Fed meeting. Jon Hilsenrath in The Wall Street Journal.

Questions for Yellen: Is this economy as good as it gets? Andrew Flowers in FiveThirtyEight.

Long read: The Fed chair's debut: Dull, with a dash of folksy. Ben White in Politico.

One member's not-so-surprising dissent. "The sole dissenting vote recorded at the Federal Reserve policy meeting ending Wednesday came from Minneapolis Federal Reserve leader Narayana Kocherlakota, and that should surprise no one. The policy maker offered his formal opposition because of the central bank's decision to end offering numbers-based guidance to govern the potential timing of increases in the Fed's short-term target rate. Mr. Kocherlakota fears it will now be harder for the central bank to convince observers the central bank will get very low levels of inflation back to the central bank's official target of 2%....Mr. Kocherklakota is one of the Fed's strongest supporters of aggressive action to boost growth and lower the unemployment rate. He has argued in recent speeches the central bank should do "whatever it takes" to boost the job market." Michael S. Derby in The Wall Street Journal.

The shift to a range of data closes a successful experiment in monetary policymaking. "The Federal Reserve’s decision Wednesday to move away from numbers-based guidance about the timing of future interest rate increases has closed the door on what many economists see as a successful, if imperfect, experiment in monetary policy making....Since December 2012 the Fed had said it wouldn’t consider lifting short term rates from near zero until after the unemployment fell to 6.5%, as long as expected inflation stayed under 2.5%. The formula became known as the Evans Rule because it had been advocated by Chicago Fed President Charles Evans. Many economists say the formula succeeded because it stated in concrete terms that the Fed’s easy money policies would be in place for a long time to come, which helped hold down borrowing costs for households, businesses and investors. Fed officials hoped this would give the economy a lift by encouraging more spending, hiring and investment. Proponents say the approach was better than past efforts that used vague time frames and specific calendar dates." Michael S. Derby in The Wall Street Journal.

Other highlights:

Yellen says U.S. economy 'not close to full employment.' The Associated Press.

Yellen says the buck stops with her. MJ Lee, Kevin Cirilli and Kate Davidson in Politico.

As it happened: Federal Reserve live blogs. The Wall Street Journal and The New York Times.

Other economic policy reads:

U.S. quarterly trade deficit is smallest in 14 years. The Associated Press.

Survey: Minimum wage hike could slow future hiring but wouldn't hurt current workforce. Eric Morath in The Wall Street Journal.

The story of the recession, as told through 8 beautiful graphics. Niraj Chokshi in The Washington Post.

Banks await stress test results. Stephanie Armour in The Wall Street Journal.

CASSIDY: Yellen's awkward day. "There is good reason to hope that Janet Yellen may go on to become one of the great leaders of the Federal Reserve: she’s a first-rate economist, a gifted explicator of complicated concepts, and an experienced hand at navigating Washington....In policy terms, she’s on the side of the angels: passionately committed to getting the economy growing and bringing down unemployment, particularly for the long-term jobless, who have been the biggest victims of the Great Recession and its aftermath. On Wednesday, though, at her first press conference as chairwoman of the Fed, Yellen had an awkward time, conveying a message that she may well not have intended to, and spooking the markets. This may not be a big deal: Alan Greenspan and Ben Bernanke made similar errors in their early days and quickly recovered. But it did indicate some of the challenges Yellen faces in extricating the Fed from the emergency policy actions it has taken during the past five years." John Cassidy in The New Yorker.

MATTHEW KLEIN: Yellen and the Fed go dark. "It’s hard to believe now, but the Federal Reserve used to keep its policy decisions a secret until weeks after the fact....The Fed’s latest policy statement, and subsequent comments by the central bank's new chief, Janet Yellen, both suggest that some policy makers are having some second thoughts about the push for greater transparency. Opacity is back on the menu....These developments suggest a desire to turn the clock back to a time when traders had to make bets without Fed hand-holding — even if the Fed still does release its economic projections. A shift toward opacity might be wise. The economy is a complex system that no one fully understands, so it would be foolish to commit to any unbending numerical rule that limits policy makers’ flexibility to react to unforeseen events....An additional benefit of opacity is reduced predictability. Scholars have found that financiers take too much risk when they think they know what will happen in the future, so muddying the waters may be just what’s needed to promote a safer financial system." Matthew C. Klein in Bloomberg View.

GOODMAN: Fed needs to speed up its taper, smooth out distortions. "The idea that a reversal from what has been the greatest synchronized monetary ease in recent history could occur without a hitch is foolish. This is a herculean task in which the Fed will need to take a hard look at its mandate and increase coordination with other central banks around the world, particularly in emerging markets. The hope that potential damage from the taper will be limited since the market has already “priced in” the event is naïve. This hope is simply not supported by history." Lawrence Goodman in Forbes.

THE WALL STREET JOURNAL: The Fed's non-guidance guidance. "Congratulations to Federal Reserve Chair Janet Yellen, who marked her first meeting at the head of the central bank's Open Market Committee on Wednesday by throwing its specific "forward guidance" over the side. The Fed's idea to offer guidance on future policy was always more rhetorical razzle-dazzle than monetary substance, and Ms. Yellen deserves credit for tacitly admitting what most investors suspected....The Fed's new non-guidance guidance is so vague that Ms. Yellen and her comrades now have the leeway to do whatever they want whenever they want for whatever reason they want. This is what we've thought the Fed has done in recent years anyway, so we might as well have the central bankers acknowledge it openly....The real test of her monetary mettle will be when to start raising rates, and on that score your guess is as good as the Fed's guidance." Editorial Board.

BLOOMBERG VIEW: Most banks would fail a real stress test. "This week, the Federal Reserve will present the results of stress tests designed to ensure that the largest U.S. banks won't turn the next financial crisis into an economic disaster. There's just one problem: If the tests were realistic, most of the banks would fail....Unfortunately, the Fed's approach ignores a lot of the horrible things that actually happen in crises....The Fed also makes a passing grade too easy to achieve....It doesn't have to be this way. The Bank of Canada, for example, includes the effects of credit freezes and contagion in its stress tests. If the Fed did the same, and checked its results against a market-based approach like that of NYU, its conclusions would be a lot more believable." The Editors.

Top opinion

COHN: Are premiums going to skyrocket next year? "Wednesday’s prediction of Obamacare doom came with a pretty blunt headline: 'O-care Premiums to Skyrocket.' It accompanied an article, written by Elise Viebeck of the Hill, in which some anonymous insurance company officials predicted that premiums in some Obamacare exchanges would increase sharply for 2015. One official, from a 'swing state,' actually said his firm was planning to triple its rates. It was only a matter of time before it became part of the right-wing conversation, which means — I’m just guessing — it’s only a matter of time before it’s part of a Koch Brothers ad on your local television station. As usual, the real news here is more complicated and ambiguous." Jonathan Cohn in The New Republic.

KAPLAN: How to stop Putin in his tracks. "What’s going on now is not Cold War II....Nothing like that is going on now. Nothing like it could possibly go on now. Neither side has the leverage to do it. Russia has no global reach whatsoever. Russia has no support for its actions in Ukraine; China has evinced no interest in it. Right now, then, this is at most a regional conflict, not a global one, and the best thing that Obama can do — in both his threats and his inducements — is to keep it that way. Certain Republicans on Capitol Hill could help. Senators like John McCain and Lindsey Graham, who used to know better, could lay off their absurd yelping about Obama’s 'weakness' and 'feckless leadership.' For one thing, it’s not true; at least when it comes to this crisis, they’ve recommended very few steps that Obama hasn’t already taken. If they’re really worried about Putin’s perceptions of America, instead of merely clamoring to make political points with GOP extremists, they should stand by the president and make sure Putin understands that, on this issue, there are no domestic fissures for him to exploit." Fred Kaplan in Slate.

FERRARA: American prosperity does not stem from a higher minimum wage. "Obama’s policy stance proposing to increase the minimum wage is not about helping the poor. It is 2014 campaign rhetoric, meant to deceive you into voting for Democrat candidates this year, because you have been led to think that would help the poor and downtrodden. But it would not help the poor and most vulnerable. Poverty in America has soared to all time record levels since Obama has been President. It is about Obama Democrats deceiving you into keeping them in power, even though that means more poverty for America, and the world." Peter Ferrara in Forbes.

BEUTLER: How Democrats could blow it big time on Obamacare. "A few weeks ago, when I was doing some research and reporting for these stories about misleading Americans for Prosperity ads, I confidently asserted to one of my sources that Democrats and allied groups would ultimately counter the ads with equal-but-opposite ads of their own. Play the issue to a draw. Make GOP candidates disown repeal. Or at least try. It’s only March, so maybe I’ll yet be vindicated. But it looks bad for me at the moment, and worse for Democrats who are playing right into the GOP’s hands." Brian Beutler in Salon.

TOMASKY: 3 questions for Ukraine hawks. "One, why should Ukraine, which never before was a realpolitik first-order concern of the United States, be one now? Two, what exact sacrifices are we willing to make to preserve Ukraine’s territorial integrity? And three, what broader risks might those acceptable sacrifices entail, and are they worth it? There might be very good answers to all three questions. But our political culture has a very bad habit of not wanting to discuss them much. That’s a habit we need to change." Michael Tomasky in The Daily Beast.

VINIK: Boehner's pathetic excuse for blocking deal on jobless benefits. " After nearly three months of fighting, Senate Democrats and Senate Republicans came to an agreement last week to extend unemployment benefits. On Wednesday, House Speaker John Boehner shot down the deal on the grounds that it doesn’t help create jobs — which is ironic, given that his party hasn’t offered a serious jobs agenda since the financial crisis....Boehner is just trying to find any excuse to deny the long-term unemployed a financial lifeline — including false claims that his party has a jobs agenda." Danny Vinik in The New Republic.

MAHER: No, the U.S. isn't 'giving up control' of the Internet. "This announcement definitely doesn’t reflect a global takeover. U.N. black helicopters aren’t coming for your servers. So what just happened? A smart, strategic move by Commerce to formalize, on its own terms, a process of increased globalization that has been going on for some time. It’s actually the opposite of what the critics claim: The Obama administration is trying to head off rising global pressure to give other countries, including China and Russia, more of a say in how the Internet is governed, not bow to it." Katherine Maher in Politico Magazine.

THE WASHINGTON POST: Obama doesn't understand Putin's Eurasian ambitions. "Western officials seem to be betting that Mr. Putin won’t dare to extend his aggression beyond Crimea. But then, just last week they were saying they did not expect Moscow to move quickly on Crimean annexation. The Obama administration and its European allies have been too slow to grasp that Mr. Putin is bent on upending the post-Cold War order in Europe and reversing Russia’s loss of dominion over Eastern Europe, the Caucasus and Central Asia." Editorial Board.

March Madness interlude: President Obama's NCAA tournament picks.

2. The fallout of the Ukraine crisis for the U.S.

Russia's moves are a 'wake-up' call, NATO official says. "Russia’s aggression in Ukraine is a 'wake-up call' for the Atlantic military alliance and other international institutions that have buttressed European security and stability for decades, NATO Secretary General Anders Fogh Rasmussen said Wednesday....How NATO and its 28 individual members respond to the new world Rasmussen outlined is likely to determine whether the challenges that have plagued the alliance almost since its inception are eased or aggravated." Karen DeYoung in The Washington Post.

No military action in Ukraine, Obama says. "President Obama says the United States military will not take action in Ukraine....'What we are going to do is mobilize all of our diplomatic resources to make sure that we’ve got a strong international correlation that sends a clear message,' Obama said. Obama told St. Louis's KSDK-TV that the United States does 'not need to trigger an actual war with Russia.' 'The Ukrainians don’t want that, nobody would want that. But what we can do is stand up for principles and stand by the Ukrainian people,' he said. Katie Zezima in The Washington Post.

News analysis: With military action ruled out, Obama's diplomatic approach put to test. "For President Barack Obama, Russia's aggressive annexation of Crimea is testing central tenets of his foreign policy philosophy: his belief in the power of direct diplomacy, his preference for using economic sanctions as punishment and his inclination to proceed cautiously in order to avoid creating larger long-term problems. The question facing the White House now is whether actions that have done little to stop Russia from claiming Crimea are tough enough to stop further escalations by Moscow. And if they continue to prove insufficient, what else is Obama willing to do to change Vladimir Putin's calculus? The menu of additional options appears limited." Julie Pace in The Associated Press.

Obama has no leverage over Putin, majority of insiders say. "President Obama does not have any leverage over Russian President Vladimir Putin, a narrow majority of National Journal's National Security Insiders said. A defiant Putin this week annexed Crimea, despite the economic sanctions the Obama administration and European Union imposed. The interim Ukrainian leaders fear Putin may try to seize more territory beyond Crimea, and the West is warning that Russia will pay a price for its meddling and violations of international law. But a slim 53 percent majority of the security and foreign policy experts say Obama can do little to stop Putin." Sarah Sorcher in National Journal.

Have we entered a 'chilly war' with Russia? "Since the fall of the Berlin Wall in 1989, Washington and Moscow had struggled to replace their Cold War rivalry with a new form of partnership, one that was tested by crisis after crisis but that endured in its own peculiar way. After each rupture, whether over Kosovo or Iraq or Georgia, came another reset that put the two powers back onto an uneasy equilibrium. The decision by President Vladimir V. Putin to snatch Crimea away from Ukraine, celebrated in a defiant treaty-signing ceremony in the Kremlin on Tuesday, threatens to usher in a new, more dangerous era. If it is not the renewed Cold War that some fear, it seems likely to involve a sustained period of confrontation and alienation that will be hard to overcome. The next reset, if there ever is one, for the moment appears far off and far-fetched." Peter Baker in The New York Times.

Crisis suggests administration must do more to convince allies of its support. "Vice President Biden’s we’re-all-in-this-together tour of Eastern Europe, a two-country stop that concluded here Wednesday, highlighted not only the growing regional anxieties about Russia’s designs on Ukraine — but also how much work the Obama administration must do to convince allies of its support. At its core, Biden’s message here and in Poland was a simple reaffirmation of what one senior administration official called a 'bedrock commitment': The United States will honor NATO’s basic premise that if one member nation is attacked, all will come to its defense....Having to deliver the message at all is a measure of how uncertain Eastern Europe remains as it confronts an expansionist Russia — and how uncertain many leaders here are of the Obama administration’s intentions to help. In some ways, the anxieties are the inevitable result of the United States’ military retrenchment after more than a decade of war." Scott Wilson in The Washington Post.

U.S. lawmakers urge end to Pentagon contracts with Russian firm. "U.S. lawmakers who oppose the Pentagon's dealings with Russia's state-owned arms exporting firm are using Moscow's intervention in Ukraine to press the argument that contracts with Rosoboronexport should end....Most of the five signatories represent districts that are home to some major U.S. defense contractors. In an unusual program, the Pentagon has been buying Russian Mi-17 helicopters from Rosoboronexport to equip U.S.-backed Afghan security forces who are used to operating Russian-made equipment. In November, under congressional pressure, the Pentagon said it was canceling plans to buy any additional Mi-17 aircraft, but that action did not affect contracts already under way." Warren Strobel in Reuters.

Which companies would be hurt by Russia sanctions? "As Russia’s occupation of Crimea continues and U.S. sanctions against the former Soviet country start to take shape, there are worries in Congress about how sanctions could impact the Pentagon’s $70 billion satellite launch program, which involves Russia and a joint venture between the Boeing Company (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT)." Christopher Harress in International Business Times.

Other foreign policy reads:

What happened to the U.S. food aid for Ukraine? Josh Rogin in The Daily Beast.

Obama says solving Malaysia Flight 370 mystery is top priority. The Associated Press.

Animals interlude: Catarchy!

3. Jobless benefits in jeopardy?

Boehner rejects Senate jobless benefits plan amid concerns from state agencies. "U.S. House of Representatives Speaker John Boehner said on Wednesday a U.S. Senate plan to extend long-term unemployment benefits retroactively "is simply unworkable" after a state officials group warned of implementation problems. The National Association of State Workforce Agencies said in a letter that some states may find the plan's verification requirements too costly and onerous, and could try to opt out....The Senate is expected to vote in coming weeks on bipartisan legislation to renew the jobless benefits for the first five months of 2014 that would put an average of $300 per week into the hands of long-term unemployed workers. The checks would be retroactive to December 29, 2013. For Boehner, whose House Republican caucus has shown little interest in the extending unemployment benefits, the letter from the state officials' group bolsters the case for opposing the Senate plan. He said it was 'cause for serious concern.'" David Lawder in Reuters.

Primary source: The NASWA letter. Steven T. Dennis in Roll Call.

Senators hit back at Boehner. ""It is extremely disappointing that, no matter what solution is reached, there is some excuse to deny these much-needed benefits,' Republican Sen. Dean Heller of Nevada said in a statement. 'I look forward to passing this proposal out of the Senate next week, and stand ready to help the speaker, as well as any organization or any individual necessary, in order to make this extension a reality'...Heller has been a key negotiator on the Senate bill, and at least four other Republicans, including Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, Mark Kirk of Illinois, and Rob Portman of Ohio, have signed onto the agreement as well. Sen. Jack Reed of Rhode Island, the chief Democratic author of the deal, pointed out that Congress has passed emergency unemployment benefits before and that implementation should not be a problem for the states....Heller and Reed jointly released a point-by-point takedown of the letter from the association of state agencies." Michael Catalini in National Journal.

Here's how the unemployment benefits bill might have affected states. "Boehner said his decision was based in part on a letter from an association of state unemployment benefit administrators. The group took no issue with extending benefits — different states have different opinions on the matter — but they said implementing the Senate deal would be difficult. The proposal included, for example, what the directors portrayed in a letter as an onerous requirement: That states pay benefits that would have been distributed had the program been extended into 2014. To implement that and other requirements could take one to three months, they wrote." Niraj Chokshi in The Washington Post.

Music interlude: Children's choir performs "Happy" by Pharrell.

4. Obama's fine line on environmental issues.

Podesta miffs environmentalists on natural gas. "When President Barack Obama hired John Podesta, an outspoken environmentalist who opposes the Keystone XL pipeline, as his special adviser late last year, many environmentalists anticipated that they were getting a strong ally in the West Wing. Maybe so. But on Wednesday, Mr. Podesta showed that he’s not afraid to push back at environmental groups when he feels they’re going too far....This isn’t the first time Mr. Podesta has tangled with environmental groups over climate change. Earlier this year he questioned a letter sent from a broader set of environmental groups urging the administration to drop its 'all of the above' energy strategy that embraces fossil fuels. The latest conflict is more focused on natural gas, specifically exporting it." Amy Harder in The Wall Street Journal.

Then Podesta tosses environmentalists some red meat with methane leak rules. "White House adviser John Podesta said Wednesday that the Obama administration is getting ready to release an interagency strategy for curbing emissions of the potent greenhouse gas methane....But while officials want to improve control of methane from natural gas production and distribution, the White House and Energy Department have made clear that even with current leakage, they view natural gas as a climate winner compared with the coal its displacing as a fuel source....The view rebuts some environmentalists who argue the methane leakage problem is big enough to make the nation's natural-gas boom a loser from a climate perspective — especially if it's joined with a surge in liquefied natural-gas exports....Research on the topic has yielded an array of results, and the White House climate plan calls for both better data collection, and technologies and administrative steps to help curb leaks." Ben Geman in National Journal.

White House climate initiative deploys 'maps and apps.' "The Obama administration's Climate Data Initiative unveiled on Wednesday uses 'maps and apps' to help convince Americans to make climate change a high priority, White House senior counselor John Podesta said....Podesta said the administration believes the effort will help make climate change more tangible for Americans. He pointed to recent polls showing that while the majority of Americans think climate change is real, they say it's not a high priority....The initiative may raise the pressure to act in places that have so far been reluctant, said presidential science and technology adviser John Holdren. He was responding to a question about places like North Carolina, where lawmakers have passed legislation that would bar the inclusion of climate-change factors in sea level rise projections." Kate Sheppard in The Huffington Post.

But Obama may need to walk the fine line on this, too. "The climate service has practical appeal beyond the political dispute over global warming: NOAA signed a memorandum of understanding with the Western Governors Association in June 2011 to provide them with climate data on drought and other issues....But the American Coalition for Clean Coal Electricity, an industry group that opposes federal limits on carbon dioxide, said the idea is part of an effort to justify stricter regulations based on the prospect of harmful climate impact." Juliet Eilperin in The Washington Post.

At times Obama may need to thread the needle with his own party, poll suggests. "Fifty-six percent of conservative or moderate Democrats approve of the construction of the Keystone XL Pipeline, according to a new survey. A Pew Research poll released Wednesday shows the deep divide within the Democratic party about a pipeline that is projected to carry 830,000 barrels of oil a day into the United States from Canada if approved. Overall, 49 percent of Democrats favor construction, while 38 percent oppose it. Only 32 percent of conservative to moderate Democrats oppose the pipeline while 12 percent are unsure. Forty-six percent of liberal Democrats oppose construction of the pipeline, compared to 40 percent who support it." Mario Trujillo in The Hill.

Read: The Pew Research Center poll. 

Other environment/energy reads:

Interior Department sells $850 million worth of leases to major oil companies. Steven Mufson in The Washington Post.

BP to win first Gulf leases since suspension, but it may take decade to bestow barrels. Joe Carroll and Jim Snyder in Bloomberg.

Confused dog interlude: It thinks it's a bunny.

5. Is the tea party over?

Tea party on the wane. "In relative terms, I see a Tea Party whose influence is gradually declining, not increasing. Its clout in Congress appears to be on the wane. Its ability to win intra-GOP contests is being newly challenged. And the organizational advantages it once enjoyed are no longer so clear-cut. The GOP rank and file that greeted the movement as an exciting infusion of new energy now regard it with weariness and skepticism. The far right, in turn, has focused much of its ire on the Republican Party itself, with increasing threats to start a third-party splinter movement. This seems unlikely to happen, but it reflects Tea Partiers’ frustration at their inability to control the GOP more fully. We should not, however, expect a waning Tea Party to mean a suddenly rosy political landscape....That’s not to say it couldn’t have an impact in select races, and doesn’t still have vocal proponents in Congress. But where it was once the engine of the GOP base, it is now more properly regarded as one faction among many in the Republican coalition—and a poorly organized, arriviste faction at that." Molly Ball in The Atlantic.

The tea party is over, but the grassroots is still alive. "2014 is shaping up as the year the Republican establishment is finding its footing. Of the 12 Republican senators on the ballot, six face primary competition, but only one looks seriously threatened: Sen. Thad Cochran of Mississippi....That doesn't mean the influence of the conservative grass roots has petered out. If anything, it demonstrates that conservatives have already reshaped the House to their liking in recent elections. This year's Senate class of Republicans, who won their last election before the emergence of the tea party, is merely a lagging indicator. Outside groups are still poised to play a significant role in open primaries, where it's easier to have an impact than against entrenched incumbents." Josh Kraushaar in National Journal.

A lot of tea partiers are running. But not many are winning. "Talk of a tea party takeover of American politics — or the Republican party — has faded of late....Tea party-aligned primary candidates have fizzled. In a recent NBC-Wall Street Journal national poll, just 23 percent of people had a positive image of the tea party while 41 percent had a negative impression — the worst numbers for any individual or group tested other than Russian President Vladimir Putin. Simply put: It's easy to write the 'Tea Party is dead' story." But, according to a fascinating new project out of the Brookings Institution that aims to study the 2014 primary season (more of this please!), the tea party remains relevant." Chris Cillizza in The Fix.

Key finding: For insights on primaries, don't look to the horse races, but to the issues. "But the real lessons to be learned from this year’s primaries are not in the horse race, they are in the issues and fissures within each political party — and that’s what we’ll be looking at as the year goes on. On the Republican side the big question is obvious — is the Tea Party growing, shrinking or holding steady?...We looked at all the Republican primary challengers in these first two states and categorized them according to ideology. As is clear, the Tea Party is the dominant source of challenges in Republican primaries. For those who are hoping they will just go away the presence of Tea Party inspired candidates (and their close cousins, Libertarians) means that the Ted Cruz and Rand Paul wings of the Republican Party are alive and well. They may not win many elections, and they still have a hard time recruiting talented candidates; nonetheless next year’s Republican members of Congress will be paying close attention to them." Elaine Kamarck in Brookings's FixGov.

Primary source: The Primary Project. Brookings Institution.

Trick shot interlude: Is this even real?

Wonkblog roundup

Nebraska rejects compromise effort to expand Medicaid. Jason Millman.

This guy knew when Obamacare enrollment would hit 5M before anyone else. Now he’s predicting 6.2M. Jason Millman.

Federal Reserve lays groundwork for first interest rate hike. Ylan Mui.

Detroit spends more money issuing parking fines than it collects from them. Emily Badger.

NSA PowerPoint art: Greatest hits, vol. 1. Christopher Ingraham and Andrea Peterson.

Everything you need to know before Yellen’s first press conference. Max Ehrenfreund.

Why more skilled immigration would be good for American workers, too. Emily Badger.

Levin and McCain to DOJ: Extradite Swiss bankers. Danielle Douglas.

Et Cetera

Holder says feds on track to meet NSA reforms deadline. Josh Gerstein in Politico.

States to join DOJ in probing Comcast-Time Warner merger. Diane Bartz in Reuters.

CIA-Senate accusations complicate oversight of surveillance programs. Eileen Sullivan in The Associated Press.

Common Core creates opportunities for publishers. Lynn Neary in NPR.

Judge upholds Kan., Ariz. laws requiring voters to show citizenship. John Hanna in The Associated Press.

Obama denies abandoning the Internet. Brendan Sasso in National Journal.

GM hit with lawsuit seeking payments for pre-bankruptcy ingition deception. Jessica Dye in Reuters.

Congress plans another band-aid 'doc fix.' Clara Ritger in National Journal.

Got tips, additions, or comments? E-mail us.

Wonkbook is produced with help from Michelle Williams.



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