Dems Ponder Response To GOP Budget "Crack Up"
"The House GOP Is About to Crack Up" says TNR's Jonathan Cohn: "Conservatives seem determined to provoke a crisis, whether it's over funding the government past September 30 or increasing the Treasury's borrowing limit. If that happens, Boehner will face a choice. He can stand by while government services and the economy suffer—or, as Greg Sargent recently suggested, he can 'cut the Tea Party loose, and suffer the consequences.'"
WH, House Dems may not be on same page in budget talks. Politico: "While the White House won’t give ground on Obamacare with regard to the CR, House Democratic leaders are far more inclined to let the government shut down over the spending levels or length of the extension than their White House counterparts. 'Our leadership thinks the time has come to draw a line in the sand, not do a short-term extension,' said a senior Democratic aide."
Senate Dems not inclined to ask for too much in upcoming continuing resolution, reports W. Post's Greg Sargent: "If they demand more [spending], there is no chance Boehner can get such a thing through the House ... Republicans can shift some blame for the looming government shutdown on to Democrats. The cause of the shutdown will become the dispute between Dems and Republicans, in which Dems are asking for more spending, instead of the cause merely being GOP intransigence and disarray."
Sequester hits FBI. NYT: "...they will shut down its headquarters and offices across the country for roughly 10 weekdays over the next year. The Federal Bureau of Investigation’s plans mean that on those days, the bureau will have only a skeleton crew on hand, which raises questions about how effectively it can respond to crime."
And jobs data. NYT: "[The latest jobless claims data] is unreliable, the government said, skewed by upgrades on two state computer systems that caused those states to underreport claims ... It also shined a light on the imperfect and often outdated systems that states and the federal government use to provide benefits to workers and cull data on the labor market and the broader economy — a situation that some experts warn might become even worse because of the $1 trillion in budget cuts spread over 10 years known as sequestration."
Summers Nod May Be Next Week
Japanese newspaper reports Obama is "set to" nominate Summers next week. Reuters: "Asked about the story, a White House spokeswoman said Obama had not made his decision about the Fed job."
National Journal's Michael Hirsh delivers "The Case Against Larry Summers": "The Federal Reserve chairman wields such enormous power, with so little accountability, that he or she is said to be the second-most-powerful person in government after the president. Decisions are habitually made in secret. The job requires a person of great personal tact, subtlety, and self-control. It requires someone who knows how to build consensus at the highest levels for the right kind of policies—someone who possesses the maturity and character to admit error and shift course when needed. But, according to numerous accounts from those who have worked with him, Summers has often displayed the opposite attributes during his long career."
The American Prospect's Jeff Faux slams Summers' ties to The Lending Club: "The firm is an unregulated high-interest lender (charging 19 percent or more on over a third of its loans) in a partnership with a regulated bank that seems to skirt close to the edges of banking law."
Fed meeting next week may deliver "muddled" message. Bloomberg: "They will probably lower their estimates for growth for this year and next for the third consecutive time. Simultaneously, they are forecast to start scaling back the $85 billion in monthly bond purchases they have been relying on to stoke the recovery. What’s more, annual inflation has been running at least a half percentage point below the Fed’s goal since December. And while the unemployment rate, at 7.3 percent in August, is falling, that’s mainly because some Americans are leaving the labor force."
NYT adds: "Fed officials are concerned that the markets will misinterpret the introduction of tapering, as the impending move is popularly known, as a sign of a broader retreat. They are expected to discuss ways of reinforcing the Fed’s continuing determination to encourage economic activity and job creation when the Federal Open Market Committee meets here Tuesday and Wednesday."
California, DC Go Opposite Ways On Wages
CA legislature approves $10/hr minimum wage. AP: "...making it one of the highest rates in the nation. Washington State has the top minimum wage at $9.19 an hour, an amount that is pegged to rise with inflation, and some cities, including San Francisco, have slightly higher minimum wages ... Gov. Jerry Brown said this week that he would sign the bill..."
DC mayor vetoes living wage bill. AP: "Mayor Vincent Gray vetoed a bill on Thursday that would force Wal-Mart Stores and other large retailers to pay their employees at least $12.50 an hour, calling it a 'job-killer ... because nearly every large retailer now considering opening a store in the district has indicated they would not come here or expand here if this bill becomes law' ... The District of Columbia bill applied only to retailers with stores of 75,000 square feet or larger, at least $1 billion in annual sales and nonunionized work forces."
NYT's Paul Krugman cites Bill de Blasio's pre-K plan as step towards reducing inequality: "...the kind of transformation that took place under the New Deal — a transformation that created a middle-class society, not just through government programs, but by greatly increasing workers’ bargaining power — seems politically out of reach. But that doesn’t mean we should give up on smaller steps, initiatives that do at least a bit to level the playing field. Take, for example, the proposal by Bill de Blasio, who finished in first place in Tuesday’s Democratic primary and is the probable next mayor of New York, to provide universal prekindergarten education, paid for with a small tax surcharge on those with incomes over $500,000."
Breakfast Sides
US tries to keep financial regulations out of Europe talk talks. NYT: "American trade officials said in interviews this week that trans-Atlantic trade talks should not be seen as a panacea for Europe’s economic ills, and they continue to resist the idea of including financial service regulations in the discussions ... 'Our view is that there is nothing that we should do, or are going to do through TTIP, that would weaken Dodd-Frank,' [US Trade Representative Michael] Froman said."
Government energy efficiency policies have worked, notes NRDC's Ralph Cavanagh in NYT oped: "Our factories and businesses are producing substantially more products and value with less energy ... energy use in the United States has been dropping since 2007, and last year’s total was below the 1999 level, even though the economy grew by more than 25 percent from 1999 to 2012 ... At the same time, the amount of oil we are using in our vehicles, homes and businesses continued to decline last year, down 14 percent from a peak in 2005. Surprisingly, oil use was lower in 2012 than in 1973 (when the nation’s economy was only about a third of its current size). The main reason is that we are demanding better mileage from our vehicles and driving them less ... With numerous studies uncovering vast untapped energy efficiency savings, there are several critical steps we should now take ..."
