March 16, 2012

We're 15 days out from the expiration of our eighth stopgap -- yes, our eighth stopgap -- to extend funding for transportation infrastructure. The last long-term transportation bill ended in 2009, and here we are, three years later, with no replacement.

It looked, this week, like perhaps we had finally broken the impasse when 72 senators joined together to pass the Boxer-Inhofe transportation bill. But Hill staffers tell Politico that the House won't take the Senate bill up before the end of the month. Which means, yes, a ninth transportation stopgap. A ninth bill that doesn't give states any predictable framework in which to make long-term investments. A ninth failure, in other words.

Congress, sometimes you guys are an embarrassment.

And so long as we're taking the dim view here at Wonkbook, let's just be honest about it: Boxer-Inhofe won't solve our transportation problems, either. It's much better than nothing, of course. And it's better than yet another stopgap. But both on the spending and funding sides, it's inadequate.

On the spending side, it only lasts for two years -- the House wants a five-year bill, as does the White House -- and, at $109 billion, it's only about two-thirds the size of the president's budget request for infrastructure, which was, in turn, smaller than what most infrastructure experts thought was needed.

This is a bad time to do a half-measure on infrastructure. We have literally trillions of dollars in unmet infrastructure needs. We have massive unemployment in the construction sector. Materials are unusually cheap because of a depressed global economy. Borrowing is unusually cheap because we're one of the few safe havens left in the global financial market. And it's cheaper to repaid an aging bridge today than rebuild a crumbled one 10 years from now. So waiting to do the bulk of our infrastructure passing a half-measure on infrastructure investment later is like waiting till after the big sale ends to buy your groceries. It's just bad financial planning.

Further, as my colleague Brad Plumer reports, Boxer-Inhofe does nothing to stop the Highway Trust Fund, which is paid for by the federal gas tax, from going broke. There are all sorts of reasons the fund is going broke -- more fuel-efficient cars, the gas tax isn't indexed to inflation, etc -- but the bottom line is that the primary mechanism we use to pay for infrastructure in this country is in crisis. President Ronald Reagan, you'll recall, actually raised the gas tax to fund his infrastructure bill, and Sen. Mike Enzi (R-WY) offered an amendment to index the gas tax to inflation in this bill. But that amendment was defeated, and so rather than actually fixing the Highway Trust Fund, we're exhausting it, and patching the rest of the bill with one-time pay-fors and gimmicks. So the central problem in transportation funding -- the problem that has arguably led to these nine stopgaps -- will be left for another day.

Boxer-Inhofe is a lot better than doing nothing. It's a lot better than another stopgap. And Sens. Barbara Boxer and James Inhofe deserve credit for actually moving a bipartisan infrastructure bill through the Senate. But it's a reminder that, these days, even when Congress does get around to doing its job, it doesn't do it particularly well.

Top stories

1) The House won't take up the transportation bill this month. "The House will not take up the Senate’s transportation bill and its own version won’t hit the floor until mid-April at the earliest, Transportation and Infrastructure Committee aides told industry officials Thursday morning. Democrats on both sides of the Capitol are ramping up their pressure on the House after the Senate approved a two-year, $109 billion bill that garnered votes from nearly half of the Republican caucus. The guts of the bill would stay the same as the latest version that hasn’t gone anywhere -- transit would continue to receive a dedicated share of the federal gas tax, an issue that had drawn opposition from a number of Republicans in suburban districts, according to a source who attended the meeting. The general game plan over the next few weeks, as laid out by aides: continue rallying and gauging support for a five-year bill when members return to town next week. An extension of the current law, slated to expire April 1, would hit the floor sometime during the March 26 week." Adam Snider in Politico.

2) Domestic fossil fuel production is down this year, but up 12 percent since Obama;s inauguration. "The latest federal data on oil and gas production offer ammunition to both the White House and its critics on whether the Obama administration is out to squelch American-bred energy. The numbers were both up and down. Oil production from federal lands and federal offshore waters fell sharply last year, and was also down significantly since 2003. But it’s also up 12 percent since Barack Obama became president. For all fossil fuels from federal lands and waters, 2011 was the lowest-producing year in nearly a decade -- though most of that dip may have been driven by a record-shattering boom in natural gas production from privately owned shale beds...The EIA revised the figures at the request of Rep. Ed Markey (D-Mass.), who complained in January that an earlier set of numbers drastically undercounted the amount of production occurring on federal lands and in offshore waters." Bob King in Politico.

Rising gas prices are reminding people of our dependence on oil. "Every time gas prices soar, Americans get a reminder of how dependent we are on oil, how vulnerable to soaring prices and how hard it has been to change our ways. Motorists are angry and a little mystified. Gas prices seem to go up when no one’s looking, and for no obvious reason...It has been 39 years since the first of the 1970s oil shocks. The fuel efficiency is much better now. Americans get far more productivity per barrel of oil. There are a couple of million hybrids on the road and a smattering of electric cars. And yet in many ways, it still looks like the 1970s out there. The transportation sector of the economy remains almost entirely beholden to petroleum, much of it imported from unfriendly countries. This technological conundrum has long-term solutions, potentially, and short-term political implications. Higher gas prices function like an instant tax hike, as visible as the spinning numbers on the Pure station’s old-fashioned pumps." Joel Achenbach in The Washington Post.

3) Unemployment claims dropped again. "The number of Americans filing new applications for unemployment benefits dropped last week, but declines in a broader measure of such claims have slowed, suggesting recent improvements in the job market may be losing steam. New claims for unemployment insurance fell 14,000 to a seasonally adjusted 351,000 last week, the government said Thursday, the lowest level since early February. But a less-volatile measure, the four-week moving average of claims, has hovered at about 356,000 for the past three weeks. The job market continues to mend. Employers are slowing the pace of layoffs and tilting toward adding workers. The U.S. economy has added 1.2 million jobs in the past six months, the fastest pace of hiring since 2006. But some economists worry recent declines in the jobless-claims readings are slowing. That would mesh with the view that the job market won't strengthen further without more robust economic growth." Neil Shah in The Wall Street Journal.

@TheStalwart: Bottom line. Economy keeps on going. Scant evidence of any slowdown in Feb or March

@zerohedge: Goldman sees economic improvement, yet expects THE NEW QE in 1 month. Why? "The improvement might not last."

4) The House GOP is slowing its fight against the contraceptive mandate. "House Republicans, unsure how to proceed, have slowed their efforts to overturn a federal rule requiring employers, including religious institutions, to provide female employees with free health insurance coverage for contraceptives. While most House Republicans still support legislation to broaden the exemption for religious employers, House Republican leaders are carefully reviewing their options on the issue, which Democrats used to political advantage in the Senate. The goal of House Republicans has not changed, they said, but they worry about further alienating women in this year’s elections...By a vote of 51 to 48, the Senate recently upheld President Obama’s birth control policy and turned back Republican efforts to let employers and health insurance companies deny coverage for contraceptives and other items to which they object on religious or moral grounds." Robert Pear in The New York Times.

5) Wall Street's recruiting efforts are struggling. "Wall Street, once a magnet for America’s best and brightest, is facing a recruiting problem. The industry’s cachet, which was tarnished during the financial disaster, has been further stained by the lingering economic slowdown and a series of highly publicized industry scandals that have drawn critical attention to the big banks...College students who were once attracted to prestigious banks like moths to bonfires are increasingly turning to other industries in search of success. Insiders say that harsh testimonials of industry life can deter would-be financiers from even applying for jobs at the most selective firms...Smaller paychecks and waves of layoffs are only making the decision easier for some students, who no longer view Wall Street as a fast track to seven-figure salaries. Last year, flagging profits at many financial firms reduced some bankers’ compensation from stratospheric to merely generous." Kevin Roose in The New York Times.

Top op-eds

1) KRUGMAN: Drilling doesn't create jobs. "Mitt Romney claims that gasoline prices are high not because of saber-rattling over Iran, but because President Obama won’t allow unrestricted drilling in the Gulf of Mexico and the Arctic National Wildlife Refuge. Meanwhile, Stephen Moore of The Wall Street Journal tells readers that America as a whole could have a jobs boom, just like North Dakota, if only the environmentalists would get out of the way. The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. For the truth is that we’re already having a hydrocarbon boom, with U.S. oil and gas production rising and U.S. fuel imports dropping. If there were any truth to drill-here-drill-now, this boom should have yielded substantially lower gasoline prices and lots of new jobs. Predictably, however, it has done neither." Paul Krugman in The New York Times.

2) KRAUTHAMMER: Obama's energy policy leaves us dependent. "The American people know something about this president and his disdain for oil. The 'fuel of the past,' he contemptuously calls it. To the American worker who doesn’t commute by government motorcade and is getting fleeced every week at the pump, oil seems very much a fuel of the present -- and of the foreseeable future...The event that drove home the extent of Obama’s antipathy to nearby, abundant, available oil was his veto of the Keystone pipeline, after the most extensive environmental vetting of any pipeline in U.S. history. It gave the game away because the case for Keystone is so obvious and overwhelming. Vetoing it gratuitously prolongs our dependence on outside powers, kills thousands of shovel-ready jobs, forfeits a major strategic resource to China, damages relations with our closest ally, and sends billions of oil dollars to Hugo Chavez, Vladimir Putin and already obscenely wealthy sheiks." Charles Krauthammer in The Washington Post.

3) YGLESIAS: The Fed hasn't done all it could for the economy. "The job of the Federal Reserve system, roughly speaking, is to prevent the economy from spiraling into spasms of uncontrolled inflation or prolonged periods of mass unemployment. Given that the United States is currently in the midst of a prolonged period of mass unemployment, it’s safe to say that the Fed has failed. Under the circumstances, it’s not difficult to see why its chairman, Ben Bernanke, has come in for large quantities of criticism from both sides--and rightly so. A detailed new apologia from Roger Lowenstein in the Atlantic, based on extensive access to Bernanke, attempts to mount a defense of his tenure, but only confirms his liberal critics’ worst fears. Bernanke knows what he needs to do to put people back to work, but refuses to try...He’s chosen the guarantee of failure over the risk that trying something new might not work. He’s counting on the Lowensteins of the world to give him credit for trying his best. But he’s not." Matthew Yglesias in Slate.

4) KLEIN: The real change at Goldman is from long-term greed to short-term greed. "For Goldman Sachs, the real damage of the last two days didn’t come from disgruntled trader Greg Smith’s resignation op-ed. It came from Goldman’s defenders. Many of the replies said, either explicitly or in effect, of course Goldman rips off its clients if doing so will help it make money. Only the naive would think otherwise...But Smith never suggested that Goldman should be run as a charity. Rather, he argued something very different...Goldman might have been out to make money, but the particular type of greed was, in the words of former Goldman Sachs director Gus Levy, 'long-term greed.’...Today, most of Goldman’s profits come from the trading side...The response of many of Goldman’s defenders confirmed the very trend Smith was lamenting: A change from long-term greed, which aligned Goldman’s interests with those of its clients and arguably with those of the broader market, to short-term greed, which is not quite so benign for your clients or for the broader market." Ezra Klein in The Washington Post.

5) THIESSEN: The GOP needs to undo its sequestration blunder. "Unless Congress acts, this summer the Pentagon will begin making across-the-board cuts in defense programs -- cuts that will eventually be so deep that the chairman of the Joint Chiefs of Staff has said they will end the United States’s status as a global superpower. Yet there seems to be almost no sense of urgency among congressional Republicans for immediate action to stop this gutting of the country’s national defense. Ronald Reagan, the architect of 'peace through strength,' would be appalled. The GOP shares a large part of the blame for putting our military in this predicament. As part of last year’s Budget Control Act, Republicans agreed to $600 billion in automatic defense cuts (scheduled to begin in January 2013) if the congressional deficit-reduction supercommittee failed to reach agreement. The GOP refused to include automatic tax increases as part of this sequester. But automatic cuts to national defense? This Republicans were willing to risk." Marc Thiessen in The Washington Post.

Top long reads

Ryan D'Agostino on the lives of four of the nation's unemployed: "As for Scott Annechino landing another job in social work, forget it — these days they won't even look at you unless you have a master's degree, which wasn't true twenty years ago. But he's good with people, can talk to anyone. He's looking at sales or business development, something like that, where he can talk. So he's online every day — Monster, CareerBuilder, all the sites, uploading his résumé onto the Internet, which is like pinning it to the sky. And he's here at the Embassy Suites, walking toward the elevator past the cold oatmeal, saying aloud to no one, 'This is a joke.'"

English pop interlude: Dido plays "Life For Rent" live on MTV Unplugged.

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

Still to come: The CFTC targets high-speed trading firms; Texas's women's health program gets defunded; a new law lets airports opt-out of the TSA; natural gas has stopped nuclear's comeback; and a fast friendship forms between a kitten and a Saint Bernard.

Economy

Senate Democrats are resisting the House jobs bill. "A chorus of Democratic senators is raising objections to a bill designed to help small businesses - throwing bumps in the road to passage of the legislation that had sailed through the GOP-led House and won President Barack Obama’s endorsement. The Democratic lawmakers warned that the House bill would loosen financial oversight so much that it would weaken safeguards for consumers and investors, even potentially triggering another economic crisis or Enron-style scandal...Senate Majority Leader Harry Reid (D-Nev.) scheduled votes for Tuesday on a substitute version of the House-passed JOBS Act - for Jumpstart Our Business Startups - as well as a measure that would renew the mandate of a federal exports agency that Democrats say will create thousands of jobs. The substitute version pushed by Levin and fellow Democratic Sens. Jack Reed of Rhode Island and Mary Landrieu of Louisiana will better protect consumers and investors, the senators argue." Seung Min Kim in Politico.

The IMF approved its share of the Greek bailout. "The International Monetary Fund agreed Thursday to contribute $36 billion toward the latest bailout of Greece, deepening the agency’s financial exposure to a country that has become one of its most difficult rescue projects. The IMF loans will be doled out over four years alongside more than $170 billion provided by other European governments and institutions. Combined, the money is meant to keep the heavily indebted Greek government afloat for four years while it restructures its economy, trims public payrolls and spending, and grapples with a deep recession. IMF officials said the new program should help restore stability. Over the past two years, Greece’s economic growth has cratered, and private holders of Greek bonds have absorbed the first-ever losses on government debt in the 17-nation euro region. At the same time, an initial IMF-led bailout of Greece ran aground." Howard Schneider in The Washington Post.

The CFTC will increase its scrutiny of high-speed trading. "A top U.S. regulator said his agency plans to widen day-to-day monitoring of the commodities and futures markets, targeting the high-speed trading firms that are a growing force. Instead of just policing completed futures trades, the Commodity Futures Trading Commission will seek to watch the fleeting buy and sell orders that increasingly influence the market, CFTC Chairman Gary Gensler said in an interview. The move follows a Securities and Exchange Commission plan to sharpen oversight of stock trades following the 2010 'flash crash.' Regulators are seeking to catch up with high-frequency trading firms that are responsible for roughly half of orders, the vast majority of which are never executed. The SEC is probing the close relationship between high-speed firms and the computerized exchanges they do business with." Scott Patterson in The Wall Street Journal.

Star Wars interlude: 10 hours of Darth Vader breathing.

Health Care

The White House has shifted its legal defense of health reform. "The Obama administration has shifted its legal arguments as it prepares to defend the president’s healthcare law before the Supreme Court. Written briefs in the landmark case increasingly have focused on a part of the Constitution that didn’t get much attention in lower courts. Some legal experts say the shift could steer the case in a direction that would make Justice Antonin Scalia more likely to uphold the healthcare law’s mandate requiring individuals to purchase health insurance. Oral arguments in the landmark case are set to begin March 26, and the justices are expected to give a ruling in June, just months before the presidential election. A ruling that the mandate is unconstitutional could make it nearly impossible to implement other parts of the healthcare law--which is exactly the point the Department of Justice is highlighting in its most recent briefs." Sam Baker in The Hill.

The Obama administration defunded a Texas Medicaid program for a dispute over abortion. "After Texas blocked abortion providers’ participation in its Medicaid Women’s Health Program, the White House officially notified the state Thursday afternoon that it will pull all funds from the program, which totalled about $39 million last year. Twenty-nine states participate in the Medicaid’s Women Health Program, which extends Medicaid coverage for reproductive health services to lower-income women who do not qualify for the rest of the entitlement program’s benefits. In Texas, the program served about 130,000 women, with the federal government footing 90 percent of the bill. About half of the clinics participating in the program would have been disqualified by the new legislation....While nine states have passed legislation to end abortion provider’s government funding, Texas is the first to lose federal dollars over it. Other states’ laws have only affected state spending, or have been held up by court challenges." Sarah Kliff in The Washington Post.

Domestic Policy

A new law lets airports dump the T.S.A.. "A new law makes it easier for airports to replace federal screeners with private contractors, and several airports, after years of passenger complaints, are lining up to make the change. The law was welcome news to Larry Dale, president and chief executive of Orlando Sanford International Airport, who said his airport’s request to opt out of using Transportation Security Administration officers last year was denied by the federal government...Since 2001, a little-known law has let airports seek permission to stop using federal screeners. But airport officials said that the T.S.A had been slow in allowing the switch, and last year the agency said it would stop accepting additional requests. That angered Representative John L. Mica, Republican of Florida, whose district includes the Orlando Sanford airport. Mr. Mica, the chairman of the House transportation committee, included a provision in aviation legislation strengthening the ability of airports to use private screeners. The law passed last month." Ron Nixon in The New York Times.

Interspecies friendship interlude: A kitty and a Saint Bernard are BFFs.

Energy

A revival of nuclear energy has been cut short by cheap natural gas. "The U.S. nuclear industry seemed to be staging a comeback several years ago, with 15 power companies proposing as many as 29 new reactors. Today, only two projects are moving off the drawing board. What killed the revival wasn't last year's nuclear accident in Japan, nor was it a soft economy that dented demand for electricity. Rather, a shale-gas boom flooded the U.S. market with cheap natural gas, offering utilities a cheaper, less risky alternative to nuclear technology...Across the country, utilities are turning to natural gas to generate electricity, with 258 plants expected to be built from 2011 through 2015, federal statistics indicate. Not only are gas-fired plants faster to build than reactors, they are much less expensive. The U.S. Energy Information Administration says it costs about $978 per kilowatt of capacity to build and fuel a big gas-fired power plant, compared with $5,339 per kilowatt for a nuclear plant." Rebecca Smith in The Wall Street Journal.

The White House is denying reports of a deal to release oil from the strategic reserves. "Oil prices dropped quickly Thursday on a news report that Britain and the United States would cooperate on a release of crude oil from strategic reserves, but the Obama administration said the report was 'not accurate' and played down the talks with British officials. White House spokesman Jay Carney said, 'Among the many topics of discussion the British prime minister and president had were energy issues and the situation globally with the rise in the price of oil,' but he added that 'I can say very clearly that the report' that there was an agreement on specific actions or a timetable for those actions 'is false. It is not accurate.'...Earlier, Reuters reported that Britain had agreed to cooperate with the United States to dampen high oil prices...Many oil experts said the Obama administration would remain under pressure to release strategic reserves because of the soaring price of gasoline." Steven Mufson in The Washington Post.

@politicoroger: Why do think they call the Strategic Petroleum Reserve "strategic"? Raiding it may make for better polls, but is bad policy.

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

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