July 13, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas’s morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

As in any Senate fight, both sides of the filibuster clash are swearing fealty to the hallowed traditions of the chamber. And they’re both right — and very wrong.

There are two different Senate traditions in tension right now. Reid and the Democrats are trying to preserve the Senate’s traditions of governance. Historically, the Senate has been able to smoothly consider executive-branch nominees, and move through daily business without burning time to defeat filibusters of non-controversial items. That’s not to say the upper chamber has ever been a model of legislative efficiency, but sit with any veteran senator — either party — for 10 minutes and they’ll soon lapse into agonized remembrances over how “it never used to be this bad.”

McConnell and the Republicans are trying to preserve the Senate’s traditions of obstruction. Historically, the minority’s right to obstruct has been even less constrained than it is today. Until 1917, the filibuster couldn’t be broken at all. Until 1975, breaking a filibuster required a two-thirds majority, rather than a three-fifths majority. Until quite recently, the budget reconciliation process was only used for reconciling budgets, not for evading filibusters. The Senate has long made room for extraordinary levels of minority power.

But here’s where the claims of tradition break down into utter nonsense: The Senate never used to work like this. The minority could have an unconstrained right to obstruct because they rarely invoked it. The majority could govern more easily because the two parties hadn’t polarized into disciplined war machines. To airily talk about the Senate of the past is almost an obscenity: It was killed long before today, and there’s no resolution to this crisis that will bring it back.

The question should not be who is doing a better job protecting the Senate of the past. It’s which set of rules will build a stronger Senate for the future.

Wonkbook’s Number of the Day: $91 billion. That’s how far apart the House and the Senate are on discretionary funding bills for the next fiscal year. Showdown, here we come.

Wonkbook’s Quotation of the Day: "My friend the majority leader is going to be remembered as the worst leader in the Senate ever," Sen. Mitch McConnell said of Sen. Harry Reid’s call for a change to the filibuster. "It makes me sad."

Wonkbook’s Graph of the Day: The Democratic case for changing the filibuster rules, in 1 chart.

Wonkbook’s Top 5 Stories: 1) reforming the filibuster; 2) financial regulation is fun; 3) immigration reform shortcuts; 4) the House bets the farm; and 5) fiscal realities and political nightmares.

1) Top story: Is a filibuster clash coming?

Amid acrimony, Senate moves toward historic vote to change its rules. “With the Senate hurtling toward a climatic showdown over its controversial filibuster rules, the deep personal animosity between Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) spilled awkwardly into public view Thursday. "My friend the majority leader is going to be remembered as the worst leader in the Senate ever," McConnell said. "It makes me sad."…Reid said he planned use a party-line vote to change the Senate's rules so that nominees can be confirmed by a simple majority, thereby doing an end run around a Republican blockade of nominees to key boards that oversee Wall Street and labor relations.” Paul Kane in The Washington Post.

Is it the beginning of the end for the filibuster? “Senate Majority Leader Harry Reid's threat to change filibuster rules is supposed to narrowly focus on presidential nominees to the executive branch. But his potential move to invoke the "nuclear option" is raising a bigger and more sweeping question that could have huge consequences for future presidents of both parties: Is this the beginning of the end of the filibuster? If the filibuster goes, the Senate would lose a crucial check on majority rights -- and it could start looking very much like the House, where the majority always gets its way.” Manu Raju, John Bresnahan, and Burgess Everett in Politico.

@ezraklein: New rule: Minority can filibuster. Majority can sharknado.

Mitch McConnell's problem: How can he threaten to obstruct the Senate even more? “There's a reason the Senate majority rarely goes through with filibuster reform: The minority can make the aftermath hellish…What's so odd and interesting about Senate Majority Leader Harry Reid's threats to eliminate the filibuster on executive-branch nominees is that the impetus is the exact opposite: The majority is considering rules changes precisely because there's nothing more the minority can obstruct that they really, really care about.” Ezra Klein in The Washington Post.

@jonathanweisman: Jay Rockefeller, once a skeptic on filibuster nuclear option, just said he’s now probably a yes. We may really going there.

One Senate staffer's theory: Mitch McConnell actually wants to get nuked. “I always thought that McConnell is actually giddy about being nuked. I know there are Rs who are concerned for the right reasons - health of the institution, retribution that would make it hard to pass much of anything, etc. But if you're McConnell...wouldn't you want Reid to nuke you? It helps you raise money with the base, it means you don't have to negotiate these nominations that your base doesn't like, and it leaves the door wide open to nuke us back - and worse - if they take over.” Ezra Klein in The Washington Post.

@GeraldFSeib: Senators sometimes get passionate about issues. But they REALLY get passionate about the filibuster, as we’re seeing this morning.

Senate might huddle in old chamber on 'nuclear' option. “In hopes of staving off a Senate meltdown wherein Democrats would use the "nuclear option" to get presidential nominees through the chamber, Sen. Roger Wicker (R-Miss.) suggested that the lawmakers sit down to a lovely, collegial lunch in the Old Senate Chamber….[But in the same space:] "The caning of Senator Sumner signalled the end of an era of compromise and sectional accommodation in the Senate, further heightening the discord that culminated in war." But, hey, sounds like a promising place for some productive peace talks!” Emily Heil in The Washington Post.

Explainer: The Democratic case for changing the filibuster rules, in 1 chart. Chris Cillizza in The Washington Post.

Federal courts are understaffed. It's everybody's fault. “Contrary to some Democratic protestations, however, this isn't all -- or, arguably, even mostly -- the fault of Senate Republican intransigence. For most vacancies, Obama hasn't even nominated a potential judge…So district courts are really where the problem -- both in terms of Obama's slow appointments, and the Senate's slow confirmations -- really lies.” Dylan Matthews in The Washington Post.

Music recommendations interlude: Parov Stelar, “Catgroove.”

Top op-eds

BROOKS: Pass the bill. “[Not doing so] could be a tragedy for the country and political suicide for Republicans, especially because the conservative arguments against the comprehensive approach are not compelling. After all, the Senate bill fulfills the four biggest conservative objectives…Whether this bill passes or not, this country is heading toward a multiethnic future. Republicans can either shape that future in a conservative direction or, as I've tried to argue, they can become the receding roar of a white America that is never coming back.” David Brooks in The New York Times.

MILBANK: Oh, SNAP! “[T]he food stamp folly shows just what a difficult situation Republican leaders find themselves in. For the second time in two days, they had been forced to placate conservatives in their own ranks by taking a position that alienates crucial segments of the electorate.” Dana Milbank in The Washington Post.

SOLTAS: A labor-market lockout. “Take a closer look at last week’s jobs report. In particular, at a telling, but largely obscure, statistic on unemployment among Americans who are entering the labor force for the first time or are rejoining it. Some 4.6 million of them can’t find a job. That’s three full percentage points of the total unemployment rate, now at 7.6 percent. But unlike the unemployment rate, unemployment of new entrants and re-entrants hasn’t budged since the end of the recession…The weakness of the economic recovery explains most of this. The U.S. labor market is saturated with the overqualified and the experienced. Businesses that want to hire can skim the top; the bottom curdles.” Evan Soltas in Bloomberg.

KRUGMAN: Delusions of populism. “Have you heard about "libertarian populism" yet?…You can see why many on the right find this idea appealing. It suggests that Republicans can regain their former glory without changing much of anything -- no need to reach out to nonwhite voters, no need to reconsider their economic ideology. You might also think that this sounds too good to be true -- and you'd be right. The notion of libertarian populism is delusional on at least two levels.” Paul Krugman in The New York Times.

TAYLOR: Exit, Fed, exit. “A growing number of economists, former central bankers and senior government officials--including Martin Feldstein, Paul Volcker, Allan Meltzer, Raghu Rajan, David Malpass and Peter Fisher--have now concluded that the Fed’s policies are not working. Critics want the Fed to return to a more rules-based monetary policy…[Q]quantitative easing [is] today’s version of the easy money of the 1970s.” John B. Taylor in The Wall Street Journal.

EICHENGREEN: A tale of two tapers. “[C]entral bankers, like the rest of us, should learn from their mistakes. What are the lessons of this one? First, the June 19 episode reminds us that central banks' communications strategies remain works in progress…A second lesson is that central banks are wise not to overreact to the latest bit of news. The Fed's statements suggesting an end to quantitative easing appear to have been grounded in very recent evidence that the economy was improving. Now that the markets have reacted adversely, some investors have begun to worry that, as a result, the economy is doing worse. The Fed should wait for more - much more - data to come in before adjusting either its policy or its rhetoric.” Barry Eichengreen in Project Syndicate.

BARNETT: NSA surveillance court is unconstitutional. “In a republican government based on popular sovereignty, the people are the principals or masters and those in government are merely their agents or servants. For the people to control their servants, however, they must know what their servants are doing. The secrecy of these programs makes it impossible to hold elected officials and appointed bureaucrats accountable.” Randy E. Barnett in The Wall Street Journal.

Photography interlude: A drowning world.

2) The return of Glass-Steagall?

Senators want to resurrect Depression-era curbs on risk-taking. “Sen. Elizabeth Warren (D., Mass.), one of Wall Street’s most outspoken critics, is putting her populist muscle behind a bipartisan bill to reinstate Depression-era laws separating plain-vanilla banking activities from riskier investment-banking bets…She said lawmakers need to “keep the gamblers out of our banks” by separating traditional bank activities such as home loans and checking accounts from riskier activities such as trading derivatives and investment banking.” Michael R. Crittenden in The Wall Street Journal.

The case for a new Glass-Steagall. “ Anything that tilts the playing field back toward smaller financial institutions is good for the small business sector…The main problem for resolution is that the largest firms are incredibly complex, and the impact of any failure could reach far and wide in unpredictable way.” Simon Johnson in Bloomberg.

EU, US strike derivatives deal. “The head of the Commodity Futures Trading Commission, under heavy pressure from U.S. and European officials, struck a last-minute deal to prevent controversial U.S. swaps rules from immediately going into effect overseas…At issue is whether U.S. banks operating overseas should have to follow U.S. swaps rules abroad…Under the proposal the CFTC is expected to consider Friday, foreign banks would be allowed to wait to comply with some provisions--including for swaps deals that are too complex or rare to be accepted by a clearinghouse--until the CFTC determines if their home-country rules are comparable.” Jamila Trindle and Tom Fairless in The Wall Street Journal.

House GOP outlines plans for mortgage finance. “House Republicans on Thursday released the details of legislation that would shutter mortgage finance giants Fannie Mae and Freddie Mac and nearly eliminate the government's role in backing the nation's mortgage market. The measure, which is expected to be introduced this month, could also limit the number of moderate-income families and others who get their mortgages from the Federal Housing Administration.” Danielle Douglas in The Washington Post.

It's possible America learned nothing from the financial crisis. “When mortgage rates shot up by a full percentage point in June, analysts at Discover (as in, the credit card company) Home Loans saw an immediate reaction from their customers. They didn't go looking for less expensive houses. They started asking about adjustable-rate loans…[I]f America's still-not-roaring recovery is being financed more and more by debt, and if the definitely roaring housing market recovery starts to depend on riskier and riskier mortgage products, well, that would be a textbook definition of short memory.” Jim Tankersley in The Washington Post.

Elizabeth Duke, Fed governor, plans to step down. “Elizabeth A. Duke, a Federal Reserve governor who has helped to overhaul the Fed's approach to financial regulation, said on Thursday that she would step down at the end of August. Ms. Duke, just the seventh woman to serve on the Fed's board, has also been a quiet but consistent supporter of Ben S. Bernanke, the Fed chairman, and of the central bank's economic stimulus campaign.” Binyamin Appelbaum in The New York Times.

S&P 500, Dow set record highs after Bernanke's comments. “The stock market leapt to new highs Thursday as investors cheered remarks from Federal Reserve Chairman Ben S. Bernanke that the central bank would continue its aggressive measures supporting the U.S. economy. The benchmark Standard & Poor's 500-stock index and the Dow Jones industrial average both hit record closing levels. The S&P ended the day up 1.4 percent, at 1675.02, and the Dow rose 1.1 percent, to 15,460.92.” Jia Lynn Yang in The Washington Post.

US jobless claims rise by 16k. “The four-week moving average of claims, which smooths week-to-week volatility, increased by 6,000 to 351,750 from the previous week’s revised average of 345,750. For the week ended June 29, the number of claims was revised up to 344,000 from an initially reported 343,000. A Labor Department analyst noted that claims tend to be volatile during the first two weeks of July as the result of temporary closures at plants in auto manufacturing and other industries, and that the July 4 holiday also tends to skew the readings.” Jonathan House and Sarah Portlock in The Wall Street Journal.

This is the absolute best interlude: Guys drive around in ice cream truck but only hand out healthy food.

3) Immigration reform shortcuts

The GOP's best play on immigration: a path to legalization. “House Republicans finally come around to comprehensive immigration reform, but -- and this is a BIG but -- they do it without a path to citizenship. They pass a bill -- or a conference committee produces a compromise after both chambers pass their own bills -- that includes a path to legal status and/or something along the lines of the DREAM Act (legalization for young illegal immigrants), but no new path to citizenship.” Aaron Blake in The Washington Post.

…A compromise, in particular, is emerging around young immigrants. “House Republicans remain divided about whether to offer a path to citizenship to the 11 million immigrants in the U.S. illegally, but for those who came here as children, a compromise may be emerging. Two Virginia Republicans, House Majority Leader Eric Cantor and House Judiciary Chairman Bob Goodlatte, are in the early stages of crafting legislation to create a track to citizenship for children whose parents brought them to the U.S. illegally…Still, it became clear after a meeting of House Republicans this week that the proposal appears to be gaining traction with GOP lawmakers in the House who want to move forward with immigration legislation but aren’t interested in giving all undocumented immigrants an opportunity to become citizens.” Sara Murray in The Wall Street Journal.

Poll: Immigration support grows. “More people want immigration increased than ever before since 1999, according to the new poll from Gallup, though that number is still below a quarter of respondents…Of those surveyed, 40 percent wanted to keep immigration steady, 35 percent wanted the flow decreased and 23 percent wanted to see an increase…A record-high number of people also believe immigration is a good thing for the country since Gallup began tracking it in 2001. Seventy-two percent of those surveyed said it's a good thing. The share of people saying it's a bad thing similarly set a record low, with 25 percent.” Tal Kopan in Politico.

Parties seek advantage in immigration dance. “[T]here's another political calculation at play: if a House/Senate conference blows up, the death of immigration reform won't fall squarely on Republicans. Fingers will be pointing in all directions much like the supercommittee of 2011. Rep. Paul Ryan (R-Wis.) -- who is driving the immigration process far more than Majority Leader Eric Cantor (R-Va.), and maybe more than Boehner -- thinks this is a winning approach.” Jake Sherman and Ginger Gibson in Politico.

Movies interlude: Here's a preview of 'Sharknado,' your must-see summer movie.

4) The House bets the farm

Farm Bill passes in House, without food stamp funding. “House Republicans successfully passed a Farm Bill Thursday by splitting apart funding for food stamps from federal agricultural policy, a move that infuriated the White House and congressional Democrats who spent most of the day trying to delay a final vote. Lawmakers voted 216 to 208 to make changes to federal agricultural policy and conservation programs and end direct subsidy payments to farmers. But the measure says nothing about funding for the Supplemental Nutrition Assistance Program, or food stamps, which historically constitutes about 80 percent of the funding in a Farm Bill…The vote made clear that Republicans intend to make significant reductions in food stamp money.” Ed O’Keefe in The Washington Post.

Roll call: How the House voted on the farm bill. Dan Berman in Politico.

Why the food stamp money is gone. “The House leadership has said it will come back later this month and try to scrounge up money for food aid in a separate piece of legislation…There's a fair bit at stake here: Some 46.6 million people received food stamps in 2012 -- a number that had surged in recent years due to the recession. The average benefit is about $133.41 per month. If that funding lapsed, that would be a lot of money pulled out of the U.S. economy all at once.” Brad Plumer in The Washington Post.

Explainer: How to understand the fight over food stamps. Rachel Weiner in The Washington Post.

The farm bill provides a rare victory for House Republicans. “House Republican leaders successfully pulled their party back from the brink of a second legislative embarrassment in as many weeks, passing a stripped down version of the farm bill with the narrowest of majorities. The win on the House floor comes on the heels after the first farm bill failure, a loss largely attributed to the revolt against leadership by five dozen Republicans who voted against it. Hoping to avoid owning the political consequences of killing a bill that provides subsidies to farmers across the country, GOP leaders -- led by House Majority Leader Eric Cantor (Va.) -- decided to pull the food stamp provisions out of the legislation to attract more Republican members to vote for it.” Chris Cillizza in The Washington Post.

XKCD interlude: “In the last few years, with very little fanfare, we’ve conclusively settled the questions of flying saucers, lake monsters, ghosts, and bigfoot.”

5) While the fiscal reality improves, the fiscal politics deteriorate.

U.S. posts record June budget surplus. “Revenues outpaced spending by $116.50 billion last month, compared with a $59.74 billion deficit a year earlier, the Treasury Department said Thursday in a monthly report. Last month’s black ink was the first June surplus in five years--reflecting a broadly improving fiscal outlook as well as almost $67 billion in payments from the two mortgage-finance companies. Other receipts are rising due to higher taxes and an improving economy, while spending is falling in part because of mandatory cuts.” Jeffrey Sparshott in The Washington Post.

Spending bills are on a collision course. “House and Senate lawmakers are $91 billion apart as they draft spending bills for the next fiscal year, putting Congress once again on a collision course that raises the risk of a partial government shutdown this fall…The White House had already threatened to veto the House bill, saying in a statement that both chambers should first negotiate a budget framework before passing spending bills.” Kristina Peterson in The Wall Street Journal.

Rubio: GOP should reject funding bills that don’t cut Obamacare. “Rubio said Republicans should reject any continuing resolution to fund the government that does not defund the healthcare law…Rubio also challenged his leadership to demand significant budgetary concessions from President Obama in exchange for raising the debt limit.” Alexander Bolton in The Hill.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

AltaVista is dead. Here's why it's so hard to compete with Google. Timothy B. Lee.

How climate change makes it harder to keep the lights on. Brad Plumer.

Quinoa should be taking over the world. This is why it isn't. Lydia DePillis.

House Republicans finally pass a farm bill -- with no money for food stamps. Brad Plumer.

One Senate staffer's theory: Mitch McConnell actually wants to get nuked. Ezra Klein.

It's possible America learned nothing from the financial crisis. Jim Tankersley.

Federal courts are understaffed. It's everybody's fault. Dylan Matthews.

Mitch McConnell's problem: How can he threaten to obstruct the Senate even more? Ezra Klein.

Will bourbon help Kentucky swallow Obamacare? Sarah Kliff.

Et Cetera

Student-loan deal gets hung up on cost. Jenna Johnson in The Washington Post.

North Carolina House passes abortion restrictions. Sean Sullivan in The Washington Post.

Illinois Supreme Court: Girls under 17 must inform parents if aborting. Ruth Tam in The Washington Post.

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

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