In his September 15th speech to the Economic Club of Washington, DC, Speaker John Boehner was very eloquent on the need for a new spirit of compromise in politics. "If we want to create a better environment for job creation, politicians of all stripes can leave the ‘my way or the highway’ philosophy behind," he said.

It turns out, though, that he didn't mean to totally leave it behind. He meant to tweak it slightly. "My way or the highway" might be out, but "my way because I'm on the highway" is in."

Earlier this week, House Republicans failed to pass legislation that would continue to fund the federal government. Last night, after some cosmetic changes and a stern talking to by the leadership, the bill squeaked through the chamber. But there are still major differences, particularly in disaster-relief funding, between what House Republicans passed and what Senate Democrats. Normally, this would kick off negotiations. But not this time, says Boehner. This time, House Republicans are leaving town for a scheduled recess, so it's either this bill, or the government's lights go off.

You might imagine they would be a bit apologetic about that. After all, they passed the bill at the 112th hour, after an unexpected failure on the floor, and after Senate Majority Leader Harry Reid warned that it couldn't pass his chamber. But that's not how House Republicans are choosing to spin it. "Time for the Senate to do it's job, stop threatening shutdown, stop playing politics, fund FEMA, and pass the CR," tweets Brad Dayspring, communications director for Majority Leader Eric Cantor.

In legislative parlance, this is called "jamming." You hand the other chamber a must-pass bill and you walk from the table. In this case, failure to pass a bill before September 30th would mean a government shutdown, and Boehner has said his chamber is not reconvening until October 3rd.

It remains to be seen whether Senate Democrats will actually get jammed. They have been pretty clear on their opposition to this bill, and Republicans might find it hard to explain that the government had to shut down because they refused to return to work and negotiate a resolution. But either way, it's hardly a new spirit of job-creating compromise reigning over Capitol Hill.

Five in the morning

 

1) The House passed a stopgap spending bill, report Rosalind Helderman and Paul Kane: "Washington lurched toward another potential government shutdown crisis Friday, as the House approved a Republican-authored short-term funding measure designed to keep government running through Nov. 18 that Democrats in the Senate immediately vowed to reject. In an after-midnight roll call, House Republican leaders persuaded conservatives early Friday morning to support a stop-gap bill nearly identical to one they had rejected just 30 hours earlier. The bill, which will keep federal agencies funded through Nov, 18, passed over staunch objections from Democrats, who opposed a provision that would pair increased funding for disaster relief with a spending cut to a program that makes loans to car companies to encourage the production of energy-efficient cars."

2) Senate Democrats say they won't pass the bill, reports Manu Raju: "Senate Democrats declared that House Republican plans to push through a revised stop-gap measure would be dead-on-arrival in their chamber, intensifying the latest budget impasse on Capitol Hill that again threatens to shut down the government. Emerging from a late-night caucus meeting Thursday, Democrats said that emerging GOP plans to partially offset $3.65 billion in disaster relief with cuts to a clean-car program, along with an additional $100 million in cuts to an Energy Department loan program, would be unacceptable. Senate Majority Leader Harry Reid (D-Nev.) warned Thursday night that the House plan would be rejected by the Senate and said the chamber was prepared to scrap next week’s recess in order to finish a spending agreement by Sept. 30."

3) Markets tanked yesterday by more than they have since the financial crisis hit, reports Brad Plumer: "Anxiety erupted in the markets Thursday as investors seized on even hints of bad news in China and Europe to confirm their worst fears about the health of the global economy. The Dow Jones industrial average fell 3.5 percent, capping its biggest two-day drop since the height of the financial crisis in 2008. Markets in Europe and Asia fell even more. And it wasn’t just stocks. Commodities -- the raw materials such as copper, oil and corn that countries use to fuel their economies -- plummeted after months of holding steady...New indications that China’s massive economy might finally be cooling off appeared to scare markets, as did the steady trickle of bad news out of Europe...Wednesday’s extraordinary actions by the Federal Reserve to boost the economy had little impact."

4) My take: There was no good reason markets fell on Thursday rather than on any other day "Given the grim state of the world economy, none of that news is unusually bad. If you left every data point unchanged but the market hadn’t dived, you wouldn’t be seeing stories tomorrow wondering about the Dow’s unusual resilience. Salmon’s headline is that 'there’s no reason why stocks are down today,' and perhaps that’s right. Or perhaps it’s exactly wrong, and stocks are down today not because any one thing is so bad, but because everything is so bad, and when everyone is scared, sometimes people begin running without quite knowing why. Either way, there’s no really good reason that stocks are down today as opposed to some other day. The squiggly line squiggled down. That’s all there is to it."

5) Rick Perry defended his immigration record in last night's GOP debate, reports Alexander Burns: "Rick Perry defended himself from a multi-front attack on his immigration record at Thursday night’s GOP debate, accusing his opponents of being 'heartless' in their attitude toward the children of undocumented immigrants. Three of his opponents - including his nearest competitor, Mitt Romney - accused Perry of coddling illegal immigrants with a law allowing children who broke the law by entering the United States to claim in-state tuition benefits in Texas. 'That kind of magnet draws people into this country to get that education,' Romney charged. 'We have to turn off the magnet of extraordinary government benefits.' Under fire from Rick Santorum and Michele Bachmann on the same issue, Perry said he didn’t believe in punishing children who entered the country illegally through no fault of their own."

Fan input interlude: The video for Junior Senior's "Can I Get Get Get."

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

Still to come: The supercommittee might use "dynamic scoring"; the CLASS Act may be an ex-act, or maybe it's just resting; the White House is providing details on its No Child Left Behind waivers; the EPA will get tougher in enforcing its relaxed ozone rule; and a cat gets creative with his food.

Economy

 

The supercommittee is weighing "dynamic scoring," reports Lori Montgomery: "Warring Republicans and Democrats on Capitol Hill have little hope of drafting an ambitious plan to tame the national debt by Thanksgiving unless they can agree on an approach to rewriting the tax code, key lawmakers and leadership aides say. But any attempt at a tax overhaul would require policymakers to clear some daunting hurdles, including an old battle over a fundamental question: Do tax cuts pay for themselves by spurring economic growth?...Some Republicans say an agreement to count revenue generated by economic growth -- a process known as 'dynamic scoring' -- could be the magic elixir that greases the skids to a more far-reaching compromise...But 'dynamic scoring' is a pair of dirty words among many Democrats, who remember Republican efforts during the George W. Bush administration to use it to estimate the cost of tax cuts."

Regulators are finalizing their foreclosure settlement with banks, reports Brady Dennis: "State and federal officials on Friday were again to meet with representatives of the nation’s largest banks, trying to finalize a much-anticipated settlement over shoddy foreclosure practices that remains elusive a year after the abuses first garnered national attention. People familiar with the negotiations said the session in Washington would center around how broad a release from future liability banks should receive in exchange for agreeing to overhaul their mortgage servicing practices and paying billions of dollars in penalties. The issue has caused sharp divisions in recent months within a 50-state coalition of state attorneys general and has threatened to undermine the outcome of the talks. New York Attorney General Eric Schneiderman...has expressed concern that the pending settlement could release banks from liability for misdeeds that go beyond flawed and fraudulent foreclosure documents."

Housing lending fell last year, report Nick Timiraos and Alan Zibel: "Mortgage lending declined last year amid weak demand and tight credit standards, with particularly sharp credit contractions in neighborhoods with many foreclosures, according to the Federal Reserve. In its annual analysis of mortgage data provided by thousands of financial institutions, the Fed found that lenders originated 7.9 million mortgages in 2010, down 12% from 2009. The only year they were lower in the past decade was 2008, when they hit 7.2 million. The Fed analyzed data from more than 7,900 mortgage lenders that are reported to regulators under the Home Mortgage Disclosure Act. The report found that declines in lending were 'notably larger' in neighborhoods that have been hardest-hit by foreclosures and price declines. Many of those neighborhoods saw high concentrations of subprime and other exotic mortgages during the housing boom."

Making the tax code less biased toward the rich is hardly class warfare, writes Paul Krugman: "The budget office’s numbers show that the federal tax burden has fallen for all income classes, which itself runs counter to the rhetoric you hear from the usual suspects. But that burden has fallen much more, as a percentage of income, for the wealthy. Partly this reflects big cuts in top income tax rates, but, beyond that, there has been a major shift of taxation away from wealth and toward work: tax rates on corporate profits, capital gains and dividends have all fallen, while the payroll tax -- the main tax paid by most workers -- has gone up...According to new estimates by the nonpartisan Tax Policy Center, one-fourth of those with incomes of more than $1 million a year pay income and payroll tax of 12.6 percent of their income or less, putting their tax burden below that of many in the middle class."

The global financial system of the last forty years has failed, writes Neil Irwin: "The improvised, on-the-fly financial system that replaced Bretton Woods after 1971 has failed. The great challenge facing the world leaders gathering for the annual World Bank-International Monetary Fund meetings in Washington this weekend is to figure out what will replace it. For the past 40 years, capital has moved freely around the globe, with currencies fluctuating according to market forces and countries intervening to affect those flows according to their domestic interests. It has all proved remarkably prone to financial crises: in northern Europe in the early 1990s, Mexico in 1994, several East Asian nations in 1997, Russia in 1998, Argentina in 2001. And, most disastrously, nearly the entire planet in 2008. This is no way to run a global economy."

Obama's debt plan isn't about the math, it's about the principles, writes Michael Gerson: "During his brief Rose Garden remarks on the deficit, Obama employed variants of the word 'fair' at least 10 times. The rich and fortunate must 'pay their fair share.' His critics defend 'unfairness.' It is 'about fairness.' Obama is not only using the language of sibling disputes -- 'That’s not fair!' -- he is echoing the defining commitment of modern liberalism. The most influential liberal political philosopher, John Rawls, wrote of 'justice as fairness.'...There is, however, another tradition of American political thought: a belief in justice as opportunity. Instead of focusing on the fair distribution of wealth in a static economy, presidents such as Abraham Lincoln and Ronald Reagan set out to increase the economic rewards for enterprise and ambition. They honored risk-taking, not risk-aversion."

Adorable animals being picky eaters interlude: This cat prefers wet food, and so makes himself some.

Health Care

 

The CLASS Act could be on the way out, reports Janet Adamy: "he Obama administration said it may not enact a long-term-care insurance program included in last year's legislation that overhauled health care. The initiative, known as the Class Act, was designed to help Americans cover the cost of aid for daily living needs such as bathing and using the toilet should they become too old or sick to care for themselves. It became law when President Barack Obama signed the health-care overhaul in 2010, though the program hasn't begun operating. Amid mounting concerns about its fiscal sustainability, officials at the Department of Health and Human Services on Thursday said they may not go forward with the program. "It is an open question whether the program will be implemented," the agency said."

But if CLASS is ended, it'd cost the government billions, reports Sarah Kliff: "There’s one big reason why the CLASS Act won’t disappear anytime soon: $70.2 billion. That’s how much the Congressional Budget Office estimates the insurance program will save in the next decade. The reason is that CLASS enrollees have to pay premiums for five years before they ever receive benefits, meaning a surplus will emerge in the CLASS Act’s infancy. 'That $70.2 billion, incidentally, amounts to slightly more than half the entire CBO estimated budget savings of the ACA (Affordable Care Act) in the first ten years,' former Kennedy advisor John McDonough writes in his new book, 'Inside National Health Reform.' Until CLASS Act opponents are able to find a $70 billion offset for repealing the program, it’s hard to see the program being wiped off the books right away."

The administration has to decide whether to ask the Supreme Court to rule on health care, reports Jennifer Haberkorn: "The Obama administration has to decide by Monday whether it wants to directly ask the Supreme Court to review the constitutionality of its signature health reform legislation. Since the 11th Circuit Court of Appeals ruled against the health law in August, the administration can either ask the full court to take another look at the case or ask the Supreme Court to review it and issue a final decision...The Justice Department has until Monday to file paperwork if it wants to go back to the full 11th Circuit Court of Appeals...If it doesn’t file by Monday or get an extension, the Justice Department would have no other option than to ask the Supreme Court to overturn the 11th Circuit’s decision. The department has until Nov. 10 to file the appeal."

Domestic Policy

 

The White House has laid out its conditions for No Child Left Behind waivers, reports Lyndsey Layton: "President Obama will excuse states from key parts of No Child Left Behind, the federal education law, if they adopt certain education reforms in exchange for greater flexibility in deciding how to measure school performance. The Obama administration offered the first details Thursday of the highly anticipated program, with as many as 45 states expected to participate...Senior administration officials said waivers will be awarded to states that adopt academic standards that ensure their high school graduates are ready for college or a career, measure school performance not merely by test results but by student improvement over time, and evaluate teachers and principals using a variety of measures, including but not limited to student test scores."

A bipartisan group of legislators has introduced a regulatory reform bill, reports Felicia Sonmez: "The joint debt-reduction supercommittee isn’t the only bipartisan, bicameral group in town. A small group of lawmakers from both parties and both chambers has drafted a measure that they say would streamline and bring transparency to the regulatory process. Sen. Rob Portman (R-Ohio), Sen. Mark Pryor (D-Ark.), Rep. Collin Peterson (D-Minn.) and House Judiciary Committee Chairman Lamar Smith (R-Texas) introduced the measure, the Regulatory Accountability Act of 2011, at a Capitol news conference Thursday morning. Portman said the bill represented 'the first time, really, since 1945 that there has been a major overhaul of the Administrative Procedures Act codifying, making permanent and enforceable some of these various executive orders and other orders that have come from administrations over the years.'"

Movie trailer interlude: The full-length trailer for The Girl with the Dragon Tattoo.

Energy

 

Despite relaxing an ozone rule, the EPA is still stepping up enforcement, reports Tennille Tracy: "The Environmental Protection Agency will enforce a three-year-old Bush administration standard for smog-forming ozone following the White House's decision to abandon a more stringent standard opposed by business groups, EPA Administrator Lisa Jackson said Thursday. Such a move could force many states to tighten their ozone controls because they currently rely on less demanding rules adopted by the EPA in 1997. Testifying before a House subcommittee, Ms. Jackson said her agency would enforce an ozone standard of 75 parts per billion, adopted by the EPA in 2008. Until now, the standard had been suspended because of the EPA's intention to introduce a more stringent measure, and the 1997 standard of 84 parts per billion prevailed."

Fossil fuel subsidies have historically dwarfed ones for renewables, reports Matthew Wald: "Renewable energy deserves subsidies, its partisans say, because conventional energy sources have enjoyed bigger subsidies for decades. The latter is a hard proposition to quantify, but a new report by a venture capital firm that specializes in renewables takes a stab at it...t traces oil and gas subsidies beginning in 1918, biofuel subsidies since 1980 and renewable electricity subsidies since 1994. All of those are tracked through the end of 2009, meaning that the study does not capture all of the aid to renewable energy in the stimulus bill. It tracks nuclear energy from 1947 to 1999...The report calculates that nuclear subsidies came to more than 1 percent of the federal budget in their first 15 years, and that oil and gas subsidies made up one-half of 1 percent of the total budget in their first 15 years."

The administration denied a big solar project a loan guarantee, report Cassandra Sweet and Ryan Tracy: "First Solar Inc. said Thursday the Department of Energy won't provide a loan guarantee to help finance construction of a large California solar farm, but the company said it is in 'advanced discussions' to sell the project. The Tempe, Ariz., solar-panel maker and solar-farm developer said that the DOE informed it that there wasn't enough time to process the company's $1.9 billion loan-guarantee application for the 550-megawatt Topaz solar farm to meet a statutory Sept. 30 deadline for closing the loan-guarantee transaction...The DOE's disqualification of First Solar's Topaz project loan guarantee comes as the department faces intense scrutiny following the bankruptcy of solar-panel start-up Solyndra Inc., which obtained a $535 million loan guarantee and a $527 million government loan to build a factory in Fremont, Calif."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

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Sept. 23, 2011