Summers Is Over
Summers withdraws. Momentum for Yellen. AP: "David Jones, chief economist at DMJ Advisors and the author of several books on the Fed, said he saw Yellen's selection as a virtual certainty ... Yellen has long been considered a top candidate for the chairmanship in part because of her expertise as an economist, her background as a top bank regulator and her experience as vice chair. Last week, more than 350 economists signed a letter to Obama calling on him to nominate Yellen [which] credited Yellen for prescience in warning in 2005 about the impending mortgage meltdown, for her consensus style of leadership and for her commitment to job growth."
"Victory on Summers Emboldens Liberals" reports WSJ: "Chest-thumping by liberals after Lawrence Summers‘s decision to withdraw from consideration as the next chairman of the Federal Reserve could have broad implications ... they tried to leverage the decision to pressure President Barack Obama to nominate Fed vice chairman Janet Yellen to the post ... Liberals could try to use the blockade they put up to stop Mr. Summers’s nomination as a playbook on coming discussions to prevent a partial government shutdown later this month and a possible vote to raise the debt ceiling in October."
"Progressive groups will push for Janet Yellen" reports Politico: "'The confirmation hearings would’ve been a nightmare for Summers — but now we turn for Yellen,' [Robert] Borosage said. 'Progressives have to be pleased because this is a result of the leadership in the Senate from' Sens. Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.) ... As one Democratic strategist put it: 'If Obama did nominate someone else who happened to be a man — I think he would catch holy hell.'"
Robert Kuttner on why Yellen is the logical choice: "In her service as vice-chair of the Fed, and before that as president of the San Francisco Federal Reserve Bank, as a governor of the Fed, and as chair of President Clinton's Council of Economic Advisers, Yellen has been superb. Were it not for the failed attempt to install Summers, Yellen is the logical choice to succeed Bernanke. The fact that she is a woman is another plus, but she is also simply the most qualified candidate. It also happens that Yellen has been outspoken on the need to target a lower unemployment rate, a goal that serves the nation and the Obama Administration. Yellen has already been confirmed to her present post. There is nothing in her record that would produce a contentious hearing other than predictable and contained opposition from rightwing Republicans."
NYT's Krugman urged Fed not to begin withdrawing monetary stimulus: "...while there is legitimate uncertainty about what the Fed should be doing, the costs of being too harsh vastly exceed the costs of being too lenient. To err is human; to err on the side of growth is wise."
Shutdown, Debt Limit Anxiety Resumes
"White House Warns Against Threats of Debt Default" reports NYT: "On Sunday, the Obama administration celebrated its successes in combating the recession, while acknowledging the difficulties that remain: while the corporate economy has rebounded strongly, the middle class and its aspirants continue to feel the squeeze of high unemployment and sluggish wage growth. The White House warned this weekend that Congressional recalcitrance on raising the federal debt ceiling might hurt the economy at a still-fragile time ..."
House GOP leader insist they prefer debt limit fight over government shutdown. Politico: "Boehner and his top lieutenants believe that digging in for a fight over the debt ceiling gives them more leverage against Obama and Democrats. Republicans hope to take advantage of Obama’s desire to blunt $20 billion in sequester cuts that kick in Jan. 1 to reach a broader budget deal with the White House. There’s even been chatter in and around leadership about holding a vote on a debt ceiling bill before the government funding measure — a way to satiate conservatives’ budget-cutting hunger and help avoid a government shutdown."
Tea Party congresspeople don't care if they lose their seats over shutdown. Bloomberg: "[The] new breed of Republican in Washington [is] not bound by fealty to leaders and unmoved by the usual tools of enforcing party discipline ... Without support from this band of rogue Republicans, a House vote on a transportation funding bill was called off. Their opposition doomed a farm bill and forced Republican leaders to rewrite it."
"GOP to vote on $40 billion in food-stamp cuts" reports Bloomberg: "House Republicans are planning to vote soon on a bill that could push millions of people off food-aid programs that have expanded since the economic downturn, potentially burdening charities that help feed the hungry ... The food-assistance bill would end benefits to as many as 6 million low-income people, according to an August report from the Center on Budget and Policy Priorities ... The bill’s text hasn’t been released."
EPA Readies Power Plant Regs
EPA expected to release proposal to cap carbon on new power plants this week. Politico: "The rule coming this week wouldn’t apply to existing power plants — EPA will tackle those in a second rule due to be proposed next June and finished a year later. But EPA’s proposal is the first major step toward fulfilling Obama’s call this summer for his agencies to tackle climate change without waiting for help from a gridlocked Congress ... Expect to hear a lot about the rule during the next year, especially as Republicans use it as a weapon against coal-state Democrats like Virginia gubernatorial candidate Terry McAuliffe, West Virginia Rep. Nick Rahall and Kentucky Senate challenger Alison Lundergan Grimes. Meanwhile, environmental groups are expected to mount a major effort to champion the rule, offering both public and legal support while praising Obama for taking on the fight."
King Coal look to take anger out on FERC nominee. NYT: "The Senate Energy Committee is expected to hold a hearing Tuesday on the nomination of Ronald J. Binz to head the Federal Energy Regulatory Commission. Mr. Binz, 64, headed the Colorado Public Utility Commission from 2007 to 2011, where he was known for promoting renewable energy and efficiency, and for helping to draft a law that encouraged closing some old coal plants and cleaning up newer ones ... the coal industry maintains that Mr. Binz’s nomination is part of an administration strategy to further reduce the use of coal. 'FERC is the last piece of the puzzle,' said Benjamin Cole, the spokesman for the American Energy Alliance, which is financed by coal and other fossil fuel industries. The administration’s goal, he said, was a low-carbon energy strategy that could not win the approval of Congress."
