Speaking in Cleveland on Wednesday, President Obama was asked what he thought about money in politics. He responded by suggesting that voting be mandatory, as it is in countries such as Australia.
"If everybody voted, then it would completely change the political map in this country," he said, adding that mandatory voting would "counteract money more than anything."
Mandatory voting certainly would alter the political map -- and likely in the president's favor. Less than 37 percent of Americans voted in November's election, and those who didn't would probably have supported Democrats. With mandatory voting, the election might have been a victory for Obama's party, rather than a defeat.
Mandatory voting would help Democrats, but it wouldn't solve the problem of money in politics unless you think that Democrats are invulnerable to corruption. Law enforcement certainly doesn't think they are. Sen. Bob Menendez of New Jersey and Sheldon Silver, the former speaker of the New York Assembly, are at the center of the two most recent high-profile corruption cases. Both are Democrats. Silver pleaded not guilty, and Menendez has said he obeyed the law.
Money is a problem in politics because politicians rely on contributions to run campaigns and get elected. Even when they don't break the law, these contributions seem certain to influence politicians' decisions in favor of those with money to give. Mandatory voting would eliminate one major expense of campaigning, the get-out-the-vote operation in the final days before the election. Politicians would still need money to pay staff, travel and buy TV spots, so they'd still be dependent on their donors and obliged to cater to their whims.
What's in Wonkbook: 1) FOMC review 2) Opinions, including Pethokoukis on the GOP budget 3) Jeb Bush's unsavory business connections, and more
1. Top story: Fed ready to raise rates but could wait
Wednesday's statement from the central bank conveyed conflicting signals. "The Federal Reserve opened a door to raising short-term interest rates by midyear, but signaled it’s in no hurry to walk through it. ... Comments by Fed Chairwoman Janet Yellen after the meeting and new central bank forecasts suggested the Fed intends to proceed cautiously. It isn’t yet set on raising rates in June, and once it starts it now sees a smaller succession of increases in coming years than it did just three months ago. That is in part due to low inflation." Jon Hilsenrath in The Wall Street Journal.
Quote of the day: "Just because we removed the word ‘patient’ from the statement does not mean we are going to be impatient," Yellen said. Steven Mufson in The Washington Post.
What does that even mean? "The Fed really said that it's going to be more patient than it was before, even if it's not officially so. In other words, it could hike rates at any time starting in June, but it's less likely to do so. And even when lift off does happen, it'll probably happen slower than people thought it would. The Fed's going to take its time making sure it gets this right. ... It thinks unemployment can get down to between 5 and 5.2 percent, rather than 5.2 and 5.5 percent, before inflation starts picking up. Why does that matter? Well, joblessness is already at 5.5 percent, so if that was as low as the Fed thought it could go, it'd have to start raising rates soon. But now we know that it thinks unemployment can fall further, which means the first rate hike should be further away." Matt O'Brien in The Washington Post.
Primary source: The statement.
Raising interest rates too soon could mean real trouble. "The possibility of imminent interest-rate rises worries many. The dollar is already very strong (see chart). Thanks to the plunging price of energy, inflation is well below the Fed’s target of 2%, and has fallen in the past year. The Fed revised down its forecasts for inflation this year, though it thinks it will hit 2% by 2016, as the effect of lower energy prices wears off. In recent months American exports have been sliding. More hawkish monetary policy will reinforce all these trends, with knock-on effects around the world. And it may hit confidence, just as the strength of America’s recovery is starting to worry some. Figures on Monday showed that manufacturing output fell by 0.2% over the last month, and car output by 3%. The Fed has little to gain from tough monetary policy, and a lot to lose." The Economist.
IP: To be prepared for the next recession, the central bank needs to keep rates low now. "The case for lifting rates from zero looks solid. The economy has been growing steadily, if unspectacularly, for nearly six years. Unemployment has fallen to 5.5%, into the range that many economists consider 'full employment.' The spoiler is inflation, which was minus 0.2% in January. ... That’s well below the Fed’s 2% target. Inflation this low is worrisome, not for today, but for the not-too-distant future. Which is why the Fed has to tread carefully as it moves to return rates to normal. ... If low inflation becomes entrenched, the U.S. could enter the next recession with interest rates still uncomfortably close to zero, leaving the central bank with too little ammunition to fight back. That could worsen the downturn and result in the sort of stagnation Japan has tried to escape for more than two decades." The Wall Street Journal.
And if need be, the Fed should let prices go up. "Leaning against the recovery before wage pressures are plainly in sight would guard against an inflation overshoot, which is good -- but if that means missing out on income and jobs, then the price is too high. Since the recession, the Fed has tolerated an inflation undershoot. Now it should be equally willing, if need be, to let inflation move briefly above the 2 percent ceiling." The editors of Bloomberg View.
Chart of the day: Central bankers expect inflation to return to its target of 2 percent. The market doesn't believe them. The Wall Street Journal.
2. Top opinions
PETHOKOUKIS: The GOP budget can't be taken seriously. "It's hard to see how the math works. To balance the budget over a decade, the GOP plan would cut $5.5 trillion from planned spending — no tax increases — generating a tiny surplus in 2025. Of those total savings, $2 trillion would come from repealing the ObamaCare insurance subsidies and Medicaid expansion and replacing them with… well, nothing right now. … But the biggest problem with the House budget isn't faulty math but a faulty premise. House Republicans apparently believe the federal debt is at unsustainable levels, needs to be reduced ASAP, and eventually eliminated. Indeed, the entire thrust of the budget seems to be that the federal debt is America's biggest problem. But where's the evidence?" The Week.
WILL: Ohio Gov. John Kasich would make a strong Republican candidate for president. "He is a fact that refutes a theory — the theory that professional wrestling and American politics share a lack of honest emotion. This caffeinated son of a mailman from McKees Rocks, Pa., lacks the filter that other politicians install in their skulls to protect them from saying whatever they are thinking at the moment. ... As governor, he has cut taxes by $3 billion. Death is no longer a taxable event in Ohio, and under his proposed budget, small businesses would be untaxed until their income reaches $2 million. Because of his focus on economic growth, the building-trades unions supported his reelection." The Washington Post.
BEUTLER: John Boehner is ready to save his party from itself. "Three months ago, almost nothing would’ve struck me as less likely than House Speaker John Boehner brokering a hundred-billion dollar deal with Democrats of any kind, let alone one to smooth the functioning of the U.S. health care system. ... The specific deal Boehner’s contemplating would address an issue that arises every year because the government’s formula for paying Medicare physicians generates significant annual reimbursement reductions, and every year Congress acts to prevent those cuts, to the tune of billions of dollars. It’s a recurring headache. And if Boehner is able to fix the formula, it’ll only be because he stepped out of character to negotiate a deal with Democrats before conservatives could hijack the process and steer it toward the cliff." The New Republic.
SPROSS: Neither liberal nor conservative elites understand the lives of the poor. "Just as economic security allows the upper class to live either a traditionalist or a more libertine lifestyle, the lack of that security thwarts the efforts of the poor to live by either script. Because the poor lack resources and live at the behest of a ragged and chaotic labor market, both ways of life twist back upon them in contradictory and poisonous ways." The Week.
3. In case you missed it
Republicans were unable to move their budget through a House committee. "The House Republican budget stalled in committee Wednesday night amid a war between GOP leaders and their Budget Committee chairman over funding for the global war on terror, as each tried to appease a contingent of the GOP Conference crucial to passing their yearly spending blueprint. ... Whatever the final outcome, the budget delay marks yet another stumble by a Republican majority that has repeatedly found itself unable to move controversial legislation easily through its ranks in the 114th Congress. ... The standoff is exposing long-simmering tensions between defense hawks and fiscal conservatives." Daniel Newhauser in National Journal.
The larger the company, the more unequal the pay. "Economists have long recognised that economies of scale allow workers at bigger firms to be more productive than those at smaller ones. That, in turn, allows the bigger firms to pay higher wages. ... But ... the benefits of scale are not shared equally among all workers. ... Larger firms should find it easier to automate tasks than smaller ones, and may therefore find it easier to resist demands for pay rises from relatively unskilled workers who could be replaced by machines. In addition, entry-level workers in the middle of the income distribution may be willing to accept lower pay from big firms since in the long run the chances of winning a promotion are greater than at small firms." The Economist.
Support for Hillary Rodham Clinton has declined sharply among Democrats, according to a new poll. "Support for Clinton's candidacy has dropped about 15 percentage points since mid February among Democrats, with as few as 45 percent saying they would support her in the last week, according to a Reuters/Ipsos tracking poll. Support from Democrats likely to vote in the party nominating contests has dropped only slightly less, to a low in the mid-50s over the same period." Amanda Becker for Reuters.
Former Florida Gov. Jeb Bush's business connections have gotten him involved with a few unsavory characters. "Time and again, he benefited from his family name and connections to land a consulting deal or board membership, sometimes doing business with people and companies that would later run afoul of the law. ... In one case, Bush reportedly advocated for a federal loan guarantee for a Miami contractor later convicted of fraud in applying for the loan, though Bush later said he did not recall doing so. He became a board member and consultant to a Florida-based manufacturer whose two top officers are now serving federal prison sentences for defrauding investors and the U.S. government. And he worked with another Florida firm investigated for alleged fraud involving a deal to sell water pumps to Nigeria underwritten by the Export-Import Bank of the United States." Tom Hamburger and Robert O'Harrow Jr. in The Washington Post.
UPCOMING EVENT: Washington Post Live presents “Changing the Menu,” March 26 at Arena Stage. Steve Case, chairman and chief executive, Revolution & co-founder, America Online; Debra Eschmeyer, executive director, Let’s Move! Dan Kish, head chef, Panera; Agriculture Secretary Tom Vilsack and many other innovators and experts will look at food and wellness -- what we eat, how we move and how to ensure a healthy, well-fed America. Learn more about the event and register to attend.