Recovery Fails To Take Off
162K net new jobs in July. NYT: "While July represented the 34th straight month of job creation, the relatively strong employment gains were still not on track to absorb the backlog of unemployed workers anytime soon. At the recent pace of job growth, it would take about seven years to close the so-called jobs gap left by the recession ... Some economists are hopeful that the pace of hiring will pick up once Congress’s latest across-the-board budget cuts have worked their way through the system at the end of the fiscal year on Sept. 30. But battles in Washington over the debt ceiling and further austerity measures mean that the drag from a shrinking government could continue into next year and beyond."
Republicans holding the economy back, argues US News' Chad Stone: "All in all, this is a disappointing recovery, although as President Obama correctly noted in last week's Knox College speech, we've done far better than most other advanced economies. Two important reasons are the 2009 Economic Recovery Act, which provided significant stimulative tax cuts and spending measures, and the Federal Reserve's willingness to embrace unconventional monetary policy tools. Still, 'it could have been worse' is no rallying cry. The president is offering ideas, but Republicans dismiss them."
Grand Bargain Talks Renew As Republicans Fracture
Grand Bargain is back? WSJ: "A group of Republican senators who have been meeting privately with top White House officials have concluded that they want to try again to reach a sweeping budget deal that would cut deficits and make changes to Medicare ... The Senate contingent met for more than two hours at the White House on Thursday and got an unexpected visitor. President Barack Obama joined the meeting ... 'We have a lot of work to do and I don’t think anyone ought to be too excited about where are,' Mr. Corker said."
Republicans split every which way on budget, then leave town. W. Post: "The House bill would have embraced the sequester, deep automatic budget cuts designed to shrink the federal government. The Senate bill would have ended it, restoring billions of dollars for housing, roads and bridges. This week, congressional Republicans tacitly rejected both approaches to next year’s budget ... As Congress prepared to leave town for a five-week summer break, the prospects for progress on any front in the endless Washington budget war appeared excruciatingly dim."
House GOP Literally Doubles Down On Food Stamp Cuts
After House fails to pass food stamp cuts 5 times larger than Senate bill, Republicans go for 10 times larger. Reuters: "On June 20, the House defeated a farm bill that included $20 billion in food stamp cuts over 10 years, the deepest cuts in a generation, primarily because it was not enough to satisfy conservatives. Some 62 Republicans voted against the bill. 'We'll see if they change their minds,' said [House Ag Chair Frank] Lucas when asked if $40 billion could win enough support to pass ... The Senate bill called for $4 billion in cuts to the food stamp program. Because of the huge difference between the two versions, 'this may be one of those issues that ultimately needs a little guidance from on high,' Lucas said..."
Bill aims to take food from unemployed. Politico: "The prime target appears to be able-bodied beneficiaries under 50 years old and without dependents — a population that has grown significantly since 2008 because of the bad economy and increased state waivers of a 20-hour-a-week work requirement. By rolling back these waivers, large savings are possible, essentially by forcing millions off the rolls if they don’t find work after three months. Unless approached with some care, the impact could be severe in areas of chronically high-unemployment, such as the Rio Grande Valley, poor urban areas and Indian reservations, for example."
Food stamp benefits already will be reduced automatically. NYT: "A report released Thursday by the Center on Budget and Policy Priorities ... found that the 47 million people who currently receive food stamps will see their benefits reduced in November because of an expiring provision in the stimulus bill passed in 2009 ... family of three will see a reduction of about $29 a month..."
Obama Narrows Fed List
Three on Fed short list. NYT: "Mr. Obama is now in the process of interviewing three candidates for the position at the helm of the central bank: Mr. Summers; Janet L. Yellen, the vice chairwoman at the Federal Reserve, who had generally been considered the front-runner for the job; and a dark horse for the post, Donald L. Kohn, a former Fed vice chairman."
How would they be different? NYT's Binyamin Applebaum: "... Summers appears to have less confidence in the tools available to the Fed at the moment, and greater concern about the potential consequences ... Yellen, by contrast, has regularly defended the Fed’s policies as both safe and effective ... Ms. Yellen has received mixed reviews for her work as a financial regulator, a role she played most prominently as the president of the Federal Reserve Bank of San Francisco between 2004 and 2010 ... Summers was a leading figure in the Clinton administration’s push to reduce regulation of the banking industry and to limit or forgo entirely the regulation of newer kinds of financial activity like derivatives trading ... He also fought against some changes the [Obama] administration eventually embraced, including the 'Volcker Rule'..."
Summers' professional ties to Wall Street in spotlight. Bloomberg: "Consulting work helped make Summers a wealthy man between the time he left government service in 2001 and when he returned in 2009. When President Bill Clinton nominated him to be Treasury Secretary, he listed assets of about $900,000 and debts, including a mortgage, of $500,000. When he returned to serve in the Obama administration, he reported a net worth between $17 million and $39 million. Summers’s finance industry ties are gaining new scrutiny..."
