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Top House Republican on immigration says no path to citizenship. Not even for DREAMers.

Ezra Klein's Wonkbook

Aug. 22, 2013

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

More bad news for immigration reform: Rep. Bob Goodlatte, head of the House Judiciary Committee (which has jurisdiction over immigration), told conservative radio host Hugh Hewitt that he flatly opposes a path to citizenship — even for DREAMers.

“Even for them, I would say that they get a legal status in the United States and not a pathway to citizenship that is created especially for them,” Goodlatte said. ”In other words, they get that legal status if they have an employer who says I've got a job which I can't find a U.S. citizen and I want to petition for them, ah, they can do that, but I wouldn't give them the pathway to a Green Card and ultimately citizenship.”

Goodlatte’s never been a friend to immigration reform. But of late, he’s really been emphasizing his role as a foe.

If you’re peering into the tea leaves, here’s what that means. First, Goodlatte thinks the trends in the House Republican Conference support flat-out opposition. As head of the relevant committee, if he thought serious immigration reform had a chance, he’d hold a bit of fire in order to ensure he kept his role in the process. That was his strategy early in the debate.

Second, he’s fairly confident that House Republican leadership won’t roll him to get a bill done. Again, if that seemed like a possibility, he might be a bit more reticent in order to preserve his seat at the table and avoid any humiliation. But this suggests he doesn’t believe Boehner et al will fight him to pass something that the Senate could stomach and the president could sign.

At this point immigration reform relies on one of three things happening. Boehner could go back on his word and bring the Senate bill, or something like it, to the floor without a majority of Republicans supporting it. That seems unlikely.

Another option would be a discharge petition in which every Democrats and a few dozen Republicans demand the Senate bill comes to the floor — which is also unlikely, given that discharge petitions almost never work and any Republicans who tried it would be assuring themselves primary challenges and, quite possibly, leadership reprisal.

The third option, which some Democrats still cling to, is Goodlatte and friends pass some kind of quasi-immigration bill that the White House and the Senate reject. That opens negotiations with the Senate and leads to a more moderate product coming to the House floor. It’s hard to imagine how this would work in practice, and note that Boehner has said the Hastert rule applies to a conference report.

What all these options have in common is that they require Boehner to take a large political risk — and possibly break his word — to pass immigration reform. There’s not much evidence he’s interested in doing that. And that’s emboldening restrictionists like Goodlatte.

Wonkbook’s Number of the Day: 75 percent. That’s the share of all U.S. Internet traffic that National Security Administration surveillance tools have the capacity to reach. Just think about that for a moment, and shudder.

Wonkbook’s Quiz of the Day: Which economist do you agree with most? Take this quiz to find out.

Wonkbook’s Top 5 Stories: 1) a quiet Fed race may be one the insiders are winning; 2) the Obamacare turncoats; 3) NSA taps 3/4ths of all US Internet traffic; 4) subsidizing college; and 5) how do you get around peak water?

1) Top story: The Summers-Yellen race didn’t end. It just went underground.

Summers, Yellen allies wage behind-the-scenes effort to win Federal Reserve nod. “[E]arlier this month, recently departed Treasury secretary Timothy F. Geithner and other former Obama administration officials joined Summers for a private strategy call, according to people familiar with the discussion…Meanwhile, allies of Yellen publicized her attributes in the media while privately lobbying on her behalf -- often without much success. Christina Romer, a former chairman of the Council of Economic Advisers and a top advocate for Yellen, encouraged her former colleagues in the White House for months to introduce Yellen to a wider range of Obama aides.” Zachary A. Goldfarb in The Washington Post.

Play: Which economist do you agree with most? Take this quiz to find out! Dylan Matthews in The Washington Post.

Why the White House is uneasy with picking Janet Yellen as Fed chair. “Yellen has a perfectly solid relationship with Bernanke, as best as I can tell, but she's more of her own thinker within the institution…So what does that have to do with how Obama's advisers might view her? They are big on the team player concept, people diving in together to sort through the hard and messy challenges they face…A second, and related, reason that Yellen's leadership style isn't a great mesh with the Obamaites is also one of her strengths. She is always meticulously prepared, a careful and systematic thinker who chooses her words carefully…She is methodical, not manic. And the prevailing style of the White House insiders advising on the decision leans a bit more toward manic.” Neil Irwin in The Washington Post.

@ezraklein: Summers was part of the team. And so there’s a lot of loyalty and trust towards Summers. Hard for Yellen to overcome those bonds.

There will be a lot of new faces at the Fed in 2014. “Much focus has been put on the race between Lawrence Summers and Janet Yellen to succeed Federal Reserve Chairman Ben Bernanke, but market strategists at Bank of America Merrill Lynch point out that by the end of 2014, there are likely to be three to five new Fed board governors and at least one new regional Fed president. "Uncertainty about these new participants' policy views could compound market volatility and concern about the Fed's exit strategy," the analysts say. "We see a high chance that the Board will be short-staffed for a time, but a low chance of a significantly more hawkish FOMC in 2014."” Min Zeng in The Wall Street Journal.

@mattizcoop: Interesting those who haaaate Larry Summers and loooove his Treasury Department Chief of Staff Sheryl Sandberg. #nodoginthefight

Justice Dept. plans new cases tied to financial crisis. “Attorney General Eric Holder said the Justice Department is nearing decisions on a number of probes involving large financial firms and that he plans to announce new cases stemming from the economic meltdown in the coming months…On Tuesday, Mr. Holder wouldn’t say whether any new cases would be civil or criminal but said his department would pursue whichever type of case was most likely to work in court.” Devlin Barrett in The Wall Street Journal.

Legal troubles mount at JPMorgan. “In the past few months, the nation's biggest bank has found itself ensnared in a series of probes and litigation that may trump the legal woes of other mega-banks. JPMorgan is staring down six separate investigations by the Justice Department, four by the Securities and Exchange Commission and three by the Commodity Futures Trading Commission, according to the bank's -second-quarter filing. There are also probes being conducted by the Federal Reserve, the Office of the Comptroller of the Currency, Congress and British authorities. And that is only the investigations. The bank is also facing a mountain of individual and class-action lawsuits.” Danielle Douglas in The Washington Post.

The SEC is now demanding that companies admit wrongdoing. That's a big deal. “A few weeks ago, SEC Chairwoman Mary Jo White announced a significant change in policy: For certain violations, the agency would no longer allow financial institutions to simply pay a fine without admitting wrongdoing (also known as a "nolo contendere" plea). And in its latest cases, the SEC has been following through, demanding an admission of guilt from JPMorgan in the case of the London Whale and extracting one from hedge fund adviser Philip Falcone.” Lydia DePillis in The Washington Post.

Fed to face judge over new rules for 'swipe' fees. “The Federal Reserve on Wednesday is expected to outline plans for its cap on fees that banks collect each time a debit card is swiped -- an issue that has become a flashpoint in the debate over the Fed's regulatory powers. The central bank was ordered to rewrite its rules governing interchange, or "swipe," fees after a U.S. District Court judge, saying they ran "completely afoul" of the Fed's mandate, overturned them last month. Judge Richard Leon requested that the Fed craft temporary regulations to take their place.” Ylan Q. Mui in The Washington Post.

India's currency is collapsing. Is it Ben Bernanke's fault? “Now the hot money has gone cold. Suddenly, the problem facing India, and other giant emerging economies like Indonesia and Brazil, isn't so much the question of how to deal with gushes of cash crossing their borders, but rather of capital moving out and leaving behind a less valuable currency, higher borrowing costs and higher inflation in its wake. In India, the rupee currency has fallen 15 percent against the dollar since the start of May, with a particularly sharp decline since the start of August.” Neil Irwin in The Washington Post.

@EconomistLake: No chance of a repeat. In 1991 India’s reserves covered 3 weeks of imports. Today they cover 6 months. Still, need to reduce twin deficits.

Summer jobs elude many teens. “Less than a third of 16- to 19-year-olds had jobs this summer, essentially unchanged from a year ago, according to Labor Department data released Tuesday. Before the recession, more than 40% of teens had summer jobs. One in four teens who tried to find work failed to get a job, far above the 7.4% unemployment rate for the broader population.” Ben Casselman in The Wall Street Journal.

Back to school: Are sales tax holidays worth it? “[T]he holidays simply help consumers to shift their purchases from one part of the year, when a sales tax would be in effect, to a period when taxes are lifted…[S]tate revenue departments think the holidays cost their coffers hundreds of millions of dollars in lost tax revenue. Georgia, which gave consumers a weekend holiday on clothing, school supplies and computers earlier this month, will lose $89 million in revenue, according to data compiled by Georgia State University's Fiscal Research Center. When North Carolina gave shoppers a break on taxes up to $3,500 for computers and $100 each for clothing and school supplies, the state missed out on $13.6 million in taxes, according to the state Department of Revenue. Massachusetts lost $23.3 million during its 2012 sales tax holiday, according to the Commonwealth's Department of Revenue.” Reid Wilson in The Washington Post.

A better way to save for retirement? “Declaring the nation's private-sector retirement system "broken," the Center for American Progress is adding its voice to the growing call for a new kind of investment vehicle to shore up retirement security for workers…An analysis of the proposal found that if workers made regular lifetime payments into a pooled, professionally managed fund, they would be much better off than if they funneled the same money into a 401(k), which is the dominant retirement savings vehicle for workers in the private sector.” Michael A. Fletcher in The Washington Post.

BERNSTEIN: I can no longer sit on the sidelines of the debate over the next Fed chair. “I would not want Summers to mow my yard either. When I picture myself sitting in my home office, which overlooks the yard, seeing Larry out there mowing the lawn would be distracting and unsettling. My neighbors would also find it odd, wondering why a renowned economist was doing my yard work as opposed to me or one of my kids. And really, what explanation could I give them that would suffice? To be fair, one must also ask of oneself: how would I feel about Janet Yellen mowing my yard? This too would feel odd and inappropriate.” Jared Bernstein on his blog.

BHIDE: Wanted: a boring Fed leader. “What all sides seem to misunderstand, however, is the proper nature of the central bank's role in the economy. Instead of casting about for a new maestro, we need to return the Fed to dullness and its chairman to obscurity…The Fed's chairmen in recent decades have been eminently qualified individuals of undisputed probity. But they are humans, too, whose blind spots, egos and potential conflicts of interest raise real concerns about hubris, even bias. The solution is not to subject the Fed to the whims of a dysfunctional Congress but rather to scale back what we can expect of it.” Amar Bhide in The New York Times.

POSEN: Why has the Fed given up on America’s unemployed? “[T]here is no reason to hold back on trying to drive US unemployment down through monetary and fiscal policy. An elastic supply of labour will keep wage growth low, which will suppress inflationary pressure…While a precise breakdown of unemployment into cyclical versus structural components is impossible, policy makers need not worry. If anything, fixating on false precision of any labour market estimate is nothing but an excuse for inaction…The costs of pushing a bit too far are small and reversible. But the costs of letting unemployment persist are vast.” Adam Posen in The Financial Times.

Music recommendations interlude: The Who, “Substitute,” 1966.

Top opinion

BLYTH: End austerity now. “Austerity's underlying logic is that budget cuts, by reducing the debt burden and restoring confidence, ultimately enhance stability and support growth. But, when countries pursue austerity simultaneously with their main trading partners, overall demand plummets, causing all of their economies to contract and, in turn, increasing their debt/GDP ratios. But the problem with austerity in the eurozone is more fundamental: policymakers are attempting to address a sovereign-debt crisis, though the real problem is a banking crisis.” Mark Blyth in Project Syndicate.

ORSZAG: Practice makes perfect if your genes play along. “David Epstein has convinced me I was wrong. His thoroughly researched new book, "The Sports Gene," pretty much demolishes the 10,000-hour rule — and much of "Outliers" along with it…About 5 percent of participants boosted their VO2 max levels by an astonishing 40 to 50 percent. Another 5 percent, however, saw almost no gain at all, and the rest fell in between. The clincher was that, although a subject's rate of improvement had little to do with how fit he or she was to start with, members of a family showed somewhat similar gains. The rate of improvement varied 2 1/2 times as much between families as within families, highlighting the importance of genes in determining how much improvement occurred.” Peter Orszag in Bloomberg.

BARTLETT: The future of the charitable deduction. “One obvious compromise would be to convert the charitable deduction to a tax credit: some percentage of contributions could be subtracted directly from one's tax liability rather than from taxable income. This would equalize the tax reward across incomes and could be done in a way that raised net revenue to pay for rate reductions.” Bruce Bartlett in The New York Times.

GALSTON: How much transparency do we really want? “The current surveillance controversy challenges the entire post-Watergate regime. Many members of Congress have come to doubt that the intelligence committees permit sufficient accountability; an increasing share of the public now doubts that the system established by the 1978 Foreign Intelligence Surveillance Act adequately protects privacy. But what is to replace it? If secrecy is diminished in the name of public accountability and individual liberty, are we willing to sacrifice a measure of security?” William A. Galston in The Wall Street Journal.

PORTER: Back to nuclear? “Averting climate change is likely to require much less eco-friendly sources of power. This includes natural gas, of course, which emits about half the carbon dioxide of coal. But over the long term it is likely to require much more investment in a big bugaboo of the environmental movement: nuclear power.” Eduardo Porter in The New York Times.

This is genius, absolutely genius interlude: How to make your ceiling fan into a hyponosis machine with painter’s tape.

2) Republicans for Obamacare

A Republican conversion to Obamacare. “Clint Murphy's Facebook post on Obamacare last week, addressed to his Republican friends, was something of a surprise: "When you say you're against it, you're saying that you don't want people like me to have health insurance." There is nothing like a bout with testicular cancer to bring focus to your life, Murphy explained over the phone…Murphy would like to call himself a Republican, but has been too dismayed by his party's cavalier attitude toward the health care debate. "We have people treating government like a Broadway play, like it's some sort of entertainment," he said. So call Murphy an independent.” Jim Galloway in The Atlanta Journal-Constitution.

Watch this: How New York is advertising its Obamacare exchange. (Very interesting as a precedent for the coming campaign.) Sam Baker in The Hill.

Peggy Noonan attacks Obamacare for doing what Peggy Noonan wants Obamacare to do. “Noonan's column is a beautiful example of a writer so intent on criticizing Obamacare that she's missed the fact that the law is doing precisely the thing she wants done. A reasonable reader of Noonan's column would end up loathing "Obamacare" and hoping for a replacement that looks like, well, Obamacare…When she writes, "This is the reason many people don't like ObamaCare," the "this" links to a report in the Oregonian looking at a particularly difficult edge case: People who are too cognitively disabled to direct their own care, and whose guardian is also their paid caregiver.” Ezra Klein in The Washington Post.

Health overhaul targets Hispanics. “About 10.2 million of the 53 million Hispanics in the U.S. are uninsured and could qualify for coverage under the law, according to estimates from the Obama administration…But signing them up won’t be easy. Some don’t speak English. Even with government-provided subsidies, many may not be able to afford insurance, given that Hispanics’ median household income--$39,000 in 2011--significantly trails the national average, which was $51,000 that year. A May survey by Latino Decisions, a nonpartisan polling firm, found that 69% of Hispanics called the health-care law “confusing and complicated” and 71% couldn’t name any policy that was part of it.” Timothy W. Martin, Arian Campo-Flores, and Meredith Rutland in The Wall Street Journal.

Employer health-insurance premiums rise slowly this year. “Premiums for employer health coverage rose relatively slowly again this year, but the 4% increase in the cost of a family plan was still enough to push it above the $16,000 mark for the first time, according to a major survey. The increase, to an annual total of $16,351 from $15,745 in 2012, represented the same rate of growth as last year, which likely reflects employees’ continued tendency to limit their use of medical care, said Gary Claxton, vice president of the Kaiser Family Foundation…[T]he general trend in recent years has been similar to 2013, with the annual increase for family plans amounting to 3% in 2010 and 5% in each of the three previous years. Early in the previous decade, the survey showed double-digit increases.” Anna Wilde Mathews in The Wall Street Journal.

Health costs are growing really slowly. Americans haven't noticed. “Ask any health economist and they'll no doubt tell you that health care cost growth is slowing, growing at a low, unprecedented rate. They can point to the National Health Expenditures report, which shows health care costs now growing at the same rate as the rest of the economy…These trends, Altman and others say, are likely to continue under Obamacare, where millions of consumers will price shop for health coverage and compare premiums for different plans. The cheapest premium plans will likely have significant deductibles, as a way of holding overall costs down.” Sarah Kliff in The Washington Post.

Did Obamacare cause Forever 21 to cut employees’ working hours? “Forever 21 officials have said that Obamacare was not the impetus for its decision--that they were making a routine staffing decision, in order to better manage their labor costs. But you don't have to be an Obamacare hater to wonder if that's entirely true, particularly since other, similar stories have been showing up in the press recently.” Jonathan Cohn in The New Republic.

Study: Budweiser, Colt 45 most popular beers among ER patients. “The study is by no means meant as a definitive guide to which alcoholic beverages can be most linked to emergency room admissions. The authors acknowledge that they have a small sample size that came from one hospital, which makes it hard to generalize from their results. Instead, researchers were more interested in a proof of concept: that it is indeed possible to collect this information from patients. And, when about one-third of emergency room trips involve alcohol, that kind of data can matter for public health initiatives.” Sarah Kliff in The Washington Post.

Adorable animals interlude: Sunny Obama, the new White House puppy, in charts.

3) NSA taps 3/4ths of all U.S. Internet traffic

The NSA’s reach is way broader than you ever thought. (And, well, we already know it’s pretty darn broad.) “The system has the capacity to reach roughly 75% of all U.S. Internet traffic in the hunt for foreign intelligence, including a wide array of communications by foreigners and Americans. In some cases, it retains the written content of emails sent between citizens within the U.S. and also filters domestic phone calls made with Internet technology, these people say…This filtering takes place at more than a dozen locations at major Internet junctions in the U.S., officials say. Previously, any NSA filtering of this kind was largely believed to be happening near points where undersea or other foreign cables enter the country.” Siobhan Gorman and Jennifer Valentino-Devries in The Wall Street Journal.

PRISM works because a ton of data moves through U.S. servers. That's also why it could fail. “One of the reasons electronic surveillance tools such as PRISM work so well is because much of the world's Internet traffic goes through U.S. servers. The American companies that own and operate that equipment can be subpoenaed and the data handed over to the government. Voila -- intelligence secured! But that works only so long as the traffic keeps going where intelligence agencies want it to go. There are signs now that the gravy train of easy data is coming to an end. Foreign companies who once considered hosting their information on U.S. servers are beginning to change their minds. And they're not the only ones. Governments are growing more wary, too.” Brian Fung in The Washington Post.

RIP interlude: How Elmore Leonard wrote all his books.

4) How and to what extent should we subsidize college?

Obama to offer plans to ease burden of paying for college. “The president did not reveal his proposals in the e-mail, and aides at the White House declined to provide details before Mr. Obama embarks this week on a two-day bus tour through upstate New York and Pennsylvania. They said Mr. Obama would talk about his plans in a series of speeches and town hall-style meetings at universities…Aides pointed to proposals that Mr. Obama made about college affordability in his 2012 State of the Union address. In that speech and in others since then, Mr. Obama has called for legislation to shift aid away from colleges that fail to keep costs down and to provide an online "scorecard" with information for college students and their parents about the real costs of education” Michael D. Shear in The New York Times.

Public college tuition is rising. But it's rising more for rich kids. “Everyone knows that public colleges and universities have been jacking up prices in recent years. But Matt Bruenig at Demos had the smart idea of looking at who's having to pay those jacked up costs. According to the College Board's data, the increases are concentrated on students in the upper middle and upper classes, with students from families making under $32,500 a year largely spared.” Dylan Matthews in The Washington Post.

Mother Earth interlude: 29 percent of San Fran pollution came from China.

5) How do you get around peak water?

Peak water in the American West. “In the past few years, we've seen bits and pieces of the puzzle: a well, and then two wells, and then a town goes dry. A farmer has to shift from water-intensive crops to something else, or let land go fallow. Vast man-made reservoirs start to go dry. Groundwater levels plummet, yet the response is to try to drill new and deeper wells and pump harder, or build another dam, or move water from an ever-more-distant river basin. Competition between industry and farming increases. And politicians run back to old, tired, half-solutions rather than face up to the fact that we live in a changed and changing world.” Peter Gleick in ScienceBlogs.

Panel implores region to heed rising seas. “A presidential task force convened to learn lessons from superstorm Sandy urged communities to take rising sea levels and climate change as a given--and plan to shore up their buildings and power grids accordingly. The report released Monday by the Hurricane Sandy Rebuilding Task Force is in keeping with President Barack Obama’s emphasis that climate change is real and must be addressed…The panel was the result of months of interviews with nearly 450 officials from the region and Washington, D.C. Government officials, housing advocates and planners working to rebuild the region after the Oct. 29 storm also weighed in on it.” Heather Haddon in The Wall Street Journal.

These 20 cities have the most to lose from rising sea levels. “Tally it all up, and flooding is going to become a bigger, more expensive problem for the world's coastal cities. How much bigger? A new study in Nature Climate Change estimates that average annual losses from flooding in the world's biggest coastal cities could rise from about $6 billion per year today to $1 trillion per year by 2050.” Brad Plumer in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Ray Kelly says stop & frisk saves lives. There's no good evidence for that. Dylan Matthews.

Study: Budweiser, Colt 45 most popular beers among ER patients. Sarah Kliff.

Peggy Noonan attacks Obamacare for doing what Peggy Noonan wants Obamacare to do. Ezra Klein.

Why the White House is uneasy with picking Janet Yellen as Fed chair. Neil Irwin.

These 20 cities have the most to lose from rising sea levels. Brad Plumer.

The SEC is now demanding that companies admit wrongdoing. That's a big deal. Lydia DePillis.

Health costs are growing really slowly. Americans haven't noticed. Sarah Kliff.

Which economist do you agree with most? Take this quiz to find out! Dylan Matthews.

India's currency is collapsing. Is it Ben Bernanke's fault? Neil Irwin.

Public college tuition is rising. But it's rising more for rich kids. Dylan Matthews.