Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
October 2, 2014

October 1, 2014

The ‘Hell No’ Caucus and the Farm Bill

Jonathan Chait comments on Rep. Tom Cotton’s (R-AR) position on the farm bill.

“Cotton currently serves in the House as a frequent member of the ‘hell no’ caucus, which votes against nearly everything. The trouble is that one of those things was the farm bill, which is popular in Arkansas because it lavishes subsidies upon major state industries.”

Cotton’s claim: “President Obama hijacked the farm bill, turning it into a food stamp bill.”

“In his untrue ad, Cotton argues that he voted as he did because ‘career politicians love attaching bad ideas to good ones.’ The bad idea here, in Cotton’s telling, is food stamps. The good idea is farm subsidies.”

“There is no persuasive economic rationale for why the government should write checks to people who operate farms as opposed to textile mills or construction firms or any other business … Farmers are also more affluent than the average American. Since they are overwhelmingly white and conveniently spread throughout nearly every state, their claim to public subsidy has gained some popular legitimacy.”

Cotton also argues that food stamp recipients “live high on the hog: ‘They have steak in their basket, and they have a brand-new iPhone, and they have a brand-new SUV.'”

The facts: “The program offers a benefit averaging $1.50 per person per meal, and its beneficiaries are quite poor.”

Obamacare is Working. What Now?

Peter Orszag, in Politico‘s profile of Obamacare, makes a “bold claim: The first stage of delivery-system health care reform has been a success. But that’s like saying the first five miles of a marathon have been a success. The key is what happens now.”

“The signs of progress should not be dismissed lightly, and those who attacked the Affordable Care Act for ‘doing nothing’ to bend the cost curve should be embarrassed by the reality that has unfolded since then.”

“So what do we need to do now? The first and most important step is to move the system more definitively away from fee-for-service payment, in which we pay based on volume of care, toward value-based payment, in which we pay based on quality of care.”

“We also need to continue to encourage digitization, and specifically work harder to make electronic systems in health care talk to one another.”

“My final recommendation is medical malpractice reform, which was unfortunately largely ignored in the ACA.”

Wonk Wire: Obamacare’s First Anniversary Report Card

Posted at 7:38 a.m.

Liberals Use Dark Money Too

Thomas Edsall argues that “it’s not only the right that uses secretive organizations to keep rich donors anonymous while it seeks to influence elections and policy. Liberals do the same, and the press in large part gives them a pass.”

Edsall uses the liberal Democracy Alliance as an example.

“The Democracy Alliance is an organization of roughly 100 very rich men and women who agree to contribute at least $200,000 annually to a list of roughly 20 liberal think tanks and advocacy groups, according to documents obtained by Politico. The Alliance itself makes no contributions. Nor does it pay for television ads or engage in other direct campaign activity.”

“In effect, the Alliance helps guide an estimated $30 million a year. It does not disclose its members or the groups that are recipients of its members’ contributions.”

“In the long run, the relatively modest (but growing) dependence of Democrats on dark money, mega-dollar contributors to ‘super PACs’ and other funding mechanisms is corrupting, even as it comes alongside the party’s parallel success in building a powerful small donor base … Insofar as the Democratic Party moves in the same direction, it will be unable to act as a counterbalance to the right.”

“While neither the left nor the right has clean hands, liberals have far more to lose, and much less to gain, from continued hypocrisy.”

When Dealing Drugs, Make Sure You’re White

Christopher Ingraham reports on a study by Brookings’ Jonathan Rothwell: “Arrest data show a striking trend … arrests of blacks have fallen for violent and property crimes, but soared for drug related crimes.”

“Even more surprising is what gets left out of the chart: Blacks are far more likely to be arrested for selling or possessing drugs than whites, even though whites use drugs at the same rate. And whites are actually more likely to sell drugs … Whites were about 45 percent more likely than blacks to sell drugs in 1980.”

“Rothwell’s numbers shoot some holes into some oft-repeated drug warrior talking points: that people don’t get arrested for nonviolent drug crime as much as they used to (false), and that legalizing and decriminalizing certain drugs won’t magically solve racial disparities in the criminal justice system (true, although the chart above suggests it could help).”

30 war on drugs fig When Dealing Drugs, Make Sure Youre White

California Becomes First State to Ban Single-Use Plastic Bags

L.A. Times: “Gov. Jerry Brown on Tuesday fulfilled a promise by signing a measure that will phase out single-use plastic bags from checkout stands at California supermarkets, convenience stores, liquor stores and pharmacies.”

“California is the first state in the nation to enact such a ban at the state level, creating a statewide standard after 127 cities and counties in California, including the city of Los Angeles, have adopted local bag ordinances.”

“The measure by Sen. Alex Padilla (D-Pacoima) prohibits, beginning July 1, grocery stores and pharmacies from making available single-use plastic bags. Stores will offer paper and reusable plastic bags for at least 10 cents each.”

“On July 1, 2016, the ban will extend to convenience and liquor stores. Local ordinances are grandfathered in and the state will provide $2 million in competitive loans to help plastic-bag businesses transition to making reusable bags.”

More Legal Hurdles for Obama Care

Another hurdle arose in the Obama Administration’s attempt to pass the Affordable Care Acts as a federal judge in Oklahoma has ruled parts unconstitutional, Politico reports.

“Judge Ronald A. White said that the administration’s decision to allow subsidies to go through either a state-run health insurance exchange or the federal exchange is an improper and invalid reading of the Affordable Care Act and must be struck.”

“Split decisions in U.S. appeals courts came earlier this year. The 4th Circuit Court of Appeals in Richmond, Va., ruled with the Obama administration, saying the IRS had the right to allow the subsidies to go to residents of any state. The D.C. Court of Appeals ruled against that regulation but it recently vacated that decision when it decided to have the full court, not just a three judge panel, rehear the case.”

“White wrote that he knows the case will be closely scrutinized. And he dismissed criticism that court rulings against the subsidies are politically motivated.”

Posted at 6 a.m.

September 30, 2014

‘Old Energy’ Utilities See Rising Threat from Solar

Brad Plumer: “If you ask the people who run America’s electric utilities what keeps them up at night, a surprising number will say solar power. Specifically, rooftop solar.”

“Solar power provides just 0.4 percent of electricity in the United States — a minuscule amount.”

“But utilities see things differently. As solar technology gets dramatically cheaper, tens of thousands of Americans are putting photovoltaic panels up on their roofs, generating their own power. At the same time, 43 states and Washington DC have ‘net metering’ laws that allow solar-powered households to sell their excess electricity back to the grid at retail prices.”

“That’s a genuine problem for utilities. All these solar households are now buying less and less electricity, but the utilities still have to manage the costs of connecting them to the grid. Indeed, a new study from Lawrence Berkeley National Laboratory argues that, without policy changes, this trend could soon put utilities in dire financial straits. If rooftop solar were to grab 10 percent of the market over the next decade, utility earnings could decline as much as 41 percent.”

solar price plummet.0 Old Energy Utilities See Rising Threat from Solar

Reuters:  “Although U.S. utilities have yet to feel a financial sting from solar’s rise, they are leery of a future in which the burden of maintaining their delivery systems is spread among a smaller number of customers.”

“Last year, Arizona became the first U.S. state to introduce a solar tax after the state regulator let its main utility … charge 70 cents per kilowatt, or about $5 per month for most households, to those on the grid who use solar … several other states are considering similar proposals, or have pledged to reform electricity rates to address the rise of distributed generation.”

“‘Distributed generation could be the end of utilities as we know them today,’ U.S. investment research firm Morningstar said earlier this year. ‘Utilities’ centralized network monopolies break down when customers become self-sufficient competitors.'”


The Dawn of Solar Power?

Bloomberg: “Solar power might become the world’s largest source of electricity by 2050 as falling costs boost installations, according to the International Energy Agency.”

“Photovoltaic plants may provide as much as 16 percent of global electricity, and concentrating solar facilities could generate another 11 percent, the IEA said in an e-mailed statement today.”

“Photovoltaic installations have grown much faster than the agency expected when it released its first outlook for solar in 2010, when it saw them covering 11 percent of global power by 2050.”

“The cost of electricity from photovoltaic projects will fall by an average 25 percent by 2020, 45 percent by 2030 and 65 percent by 2050 … This implies a levelized cost of power of as little as $56 a megawatt-hour for large plants and $78 on rooftops.”

The Guardian: “The IEA said PV expansion would be led by China, followed by the United States, while [solar thermal electricity] could also grow in the United States along with Africa, India and the Middle East.”

 The Dawn of Solar Power?

Posted at 9:35 a.m.
Energy & Environment

Poll: Obamacare is Confusing

The Hill: “Four years after its passage, most people in the United States believe ObamaCare is the most complicated political issue they face.”

“Nearly 75 percent of people said the healthcare law is difficult to understand, according to a new poll by The Associated Press and GfK.”

“The Affordable Care Act ranked as the most complicated out of 10 issues surveyed, edging out long-term financing of Social Security, the Federal Reserve’s interest rates and data collection by the National Security Agency.”

“The AP-GfK poll, which interviewed 1,044 adults in late July, also found that people are more confused about politics in general. Nearly 80 percent of people believe political issues have become more complex over the last decade.”

Posted at 8:59 a.m.

Obamacare’s First Anniversary Report Card: The Facts

Jonathan Cohn writes a lengthy piece assessing Obamacare’s “health” after one year. Cohn concludes that a careful review of the data show that, despite “real flaws and shortcomings … the available evidence suggests that the Affordable Care Act is working pretty much as its designers envisioned it would.”

“Critics can legitimately take issue with the law’s goals and principles. That’s a matter of philosophical preference, after all. Performance is another matter.”

Cohn: “Overall health care costs are rising at historically low rates.”

slide1 27 Obamacares First Anniversary Report Card: The Facts

Cohn lists other facts that point to Obamacare’s overall success:

  1. More people have health insurance.
  2. People who are getting health insurance are almost certainly better off.
  3. “Winners” probably outnumbered “losers” in the new marketplaces.
  4. Premiums in the marketplaces aren’t rising quickly, and more insurers are jumping in to compete.
  5. Employer premiums also aren’t rising quickly.
  6. The net effect on the budget has been to reduce the deficit.
Posted at 8:39 a.m.

Ginsburg: Citizens United is ‘Worst Ruling’ of Supreme Court

Juliet Lapidos comments on a recent New Republic interview in which Justice Ruth Bader Ginsburg is asked to name “the worst ruling the current Court has produced.”

Lapidos: “It looks as though Justice Ginsburg didn’t hesitate at all in choosing Citizens United.”

Ginsburg: “If there was one decision I would overrule, it would be Citizens United. I think the notion that we have all the democracy that money can buy strays so far from what our democracy is supposed to be. So that’s number one on my list.”

“That statement gets at what’s so frustrating about Citizens United: The fact that it should have been bleedingly obvious to the majority that the deregulation of the campaign finance system would be harmful to democracy. Of course there’s a ‘connection between money and influence on what laws get passed.’ How could anyone think otherwise?”

Posted at 8:22 a.m.

Americans’ Tolerance of Inequality is Built on a Foundation of Ignorance

Paul Krugman contends that “these days it’s the rich who are invisible … Most Americans have no idea just how unequal our society has become.”

“The latest piece of evidence to that effect is a survey asking people … how much they thought top executives of major companies make relative to unskilled workers … The median respondent believed that chief executives make about 30 times as much as their employees [but] today chief executives earn something like 300 times as much as ordinary workers.”

“And even the 1 percent is too broad a category; the really big gains have gone to an even tinier elite. For example, recent estimates indicate not only that the wealth of the top percent has surged relative to everyone else — rising from 25 percent of total wealth in 1973 to 40 percent now — but that the great bulk of that rise has taken place among the top 0.1 percent, the richest one-thousandth of Americans.”

“The truly rich are so removed from ordinary people’s lives that we never see what they have.”

“Does the invisibility of the very rich matter? Politically, it matters a lot. Pundits sometimes wonder why American voters don’t care more about inequality; part of the answer is that they don’t realize how extreme it is. And defenders of the superrich take advantage of that ignorance.”

September 29, 2014

The Fed Was Designed to Cater to Banks

Politico: “So now, thanks to secret tape recordings made by Carmen Segarra, a rightly disgruntled former employee of the Federal Reserve Bank of New York, the Fed has had its Ray Rice moment, as Michael Lewis suggested.””

“The truth is, although both incidents do reveal something about the way the powerful and famous get away with more stuff than the rest of us, there’s no real comparison. The Segarra Tapes actually reveal little or nothing that was not already known, assuming you have a shred of understanding how the Federal Reserve banks actually work.”

“This is simply the way the New York Fed was designed to behave. The system of 12 Federal Reserve banks, established about 100 years ago by an act of Congress following secret meetings presided over by J.P. Morgan himself at an island off the coast of Georgia, has always existed for the benefit of the commercial and investment banks that created the system, that own the banks and that control their boards of directors. To think that these banks exist for any other reason than to serve their Wall Street masters is complete folly. It has never been so and it will never be so – as long as the current system remains intact – despite what Segarra captured her bosses talking about on tape, without their knowledge.”

There’s no Sharing of the Income Pie

Christopher Ingraham highlights a study by Bard College economist Pavlina Tcherneva: “An examination of average income growth [in the U.S.] during every postwar expansion (from trough to peak) and its distribution between the wealthiest 10% and bottom 90% of households reveals that income growth becomes more inequitably distributed with every subsequent expansion during the entire postwar period.”

“Notice the sharp drop in the bottom 90 percent’s share of growth starting with the 1982-1990 period — thanks, Reaganomics! Not only that, but the bottom 90 percent actually saw their real income drop between 2009 and 2012.”

Screen Shot 2014 09 25 at 10.30.11 AM Theres no Sharing of the Income Pie

Posted at 11:03 a.m.

The Economic Costs of Climate Change Inaction

Opponents of climate change are focusing on a new tactic: the claim that tackling climate change will be too costly.

Mashable: “That economic argument had gone virtually unchallenged by senior Obama administration officials and other leaders. That is no longer the case.”

“In an unusually blunt policy address on Thursday, EPA Administrator Gina McCarthy called opponents of climate change action ‘sad,’ and portrayed restrictions on greenhouse gas emissions as a net economic winner.”

“McCarthy said avoiding action on global warming will be far more expensive in the long run, compared to reducing emissions and hardening infrastructure to cope with climate impacts.”

McCarthy: “… When it comes to climate change, the most expensive thing we could do, is to do nothing … The bottom line is: We don’t act despite the economy, we act because of it.”

McCarthy’s speech came … more than a week after an international assessment about the economics of climate change showed that taking action sooner rather than later could be an economic boon.

“Another report, this one by a bipartisan group of American business leaders, warned that if greenhouse gas emissions continue unabated, by 2050, between $66 to $106 billion of existing coastal property in the U.S. will be below sea level. This would grow to up to $507 billion by 2100.”

Working Capital Review: “Lately, the push to connect business and the environment comes not just from environmentalists, but from businesses themselves.”

Americans Have Widely Different Educational Priorities

Christopher Ingraham: “Here’s a fascinating chart from the Pew Research Center that sheds some light on why education policy can be such a polarizing topic. Liberals and conservatives prioritize very different values when it comes to educating their kids.”

“Among all political types, liberals stand out for their general indifference toward teaching obedience. On the other hand, they place a higher value on curiosity, creativity and empathy.”

9 17 2014 01 Americans Have Widely Different Educational Priorities

Americans Undecided on Government’s Role

Gallup: “Americans continue to divide almost evenly when asked to rate their preference for government activity on a 1-to-5 scale. Currently, 35% rate themselves a ‘1’ or ‘2,’ indicating that they favor a limited government that ‘provides only the most basic government functions.’ Meanwhile, 32% rate themselves a ‘4’ or ‘5,’ tending to prefer a government that ‘takes active steps in every area it can to try and improve the lives of its citizens.’ The remaining one-third of Americans fall in the middle.”

“Substantial percentages of each party’s supporters — 38% of Democrats and 26% of Republicans — place themselves in the middle on the 5-point scale. And one in six Republicans say they favor a more active government, while one in 10 Democrats favor a less active one.”

“The divided preferences on government activity do not give elected leaders clear direction in deciding whether to rely on government or nongovernment solutions to the nation’s biggest problems. To some degree this may help explain why the president and Congress have had difficulty in addressing some of the major issues facing the country in recent years.”

eetpleci20qp03jefu1q6q Americans Undecided on Governments Role

September 26, 2014

How the Beverage Industry Needs Boozers

Christopher Ingraham: “The top 10 percent of American drinkers – 24 million adults over age 18 – consume, on average, 74 alcoholic drinks per week. That works out to a little more than four-and-a-half 750 ml bottles of Jack Daniels, 18 bottles of wine, or three 24-can cases of beer. In one week.”

“The shape of this usage curve isn’t exactly unique. The Pareto Law states that ‘the top 20 percent of buyers for most any consumer product account for fully 80 percent of sales.'”

“But the consequences of the Pareto Law are different when it comes to industries like alcohol, tobacco, and now marijuana. If you consume 10+ drinks per day, for instance, you almost certainly have a drinking problem. But the beverage industry is heavily dependent on you for their profits.”

drinking How the Beverage Industry Needs Boozers

Posted at 8:09 a.m.
Health, Social Issues

Capitalism’s Role in Saving the Climate

Daniel Gross responds to the complaint that “the engine of capitalism is killing the environment, especially the climate, and that it should be shut down immediately.”

“Here’s the thing, though. One of the possible solutions to global warming and climate change is a rapid scaling up of technologies that allow humans to go about their business while emitting less carbon dioxide, or no CO2 at all. And increasingly, Wall Street wants to be in on the green rush.”

“Government plays an important role by setting standards and providing early financing for risky applications of new technology … But even the U.S. government, with its huge balance sheet, can’t do it all.  Fortunately, once projects are proven to be viable, Wall Street rushes in.”

“There’s even more financial innovation going on. In recent years, we’ve seen an explosion of so-called ‘green bonds’ … Through early June this year, some $16.6 billion in green bonds  had been raised around the world.”

“Of course, Wall Street firms aren’t doing this out of the goodness of their own hearts … They’re doing is because they can make money doing so … The Occupy-like protesters might not like it, but renewable energy, efficiency, and sustainability have become big businesses, with huge needs for capital. You can’t crowd-fund your way to stopping climate change.”

The Ray Rice Video for Wall Street

Michael Lewis reports that the radio program “This American Life” will air today “a jaw-dropping story about Wall Street regulation, and the public will have no trouble at all understanding it. The reporter, Jake Bernstein, has obtained 47½ hours of tape recordings, made secretly by a Federal Reserve employee, of conversations within the Fed, and between the Fed and Goldman Sachs. The Ray Rice video for the financial sector has arrived.”

“First, a bit of background — which you might get equally well from today’s broadcast. After the 2008 financial crisis, the New York Fed, now the chief U.S. bank regulator, commissioned a study of itself. This study, which the Fed also intended to keep to itself, set out to understand why the Fed hadn’t spotted the insane and destructive behavior inside the big banks, and stopped it before it got out of control… It’s an extraordinary document. There is not space here to do it justice, but the gist is this: The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems.”

ProPublica has more details on the secret recordings.

Posted at 7:41 a.m.
Financial Markets

Majority of Americans Favor Prayer in School

Gallup: “Sixty-one percent of Americans support allowing daily prayer to be spoken in the classroom. Though still solidly above the majority level, this is down slightly from 66% in 2001 and 70% in 1999.”

“The vast majority of Americans identify with a religion, a majority of Americans say religion can solve today’s problems, and three in four Americans see the Bible as the actual or inspired word of God … In fact, previous Gallup research showed that in 2005, three in four Americans supported a constitutional amendment to allow voluntary prayer in public schools.”

7muscflns0aoxtcc0nljqg Majority of Americans Favor Prayer in School

Posted at 5:35 a.m.
Social Issues

September 25, 2014

Imagining Obamacare as Romneycare

Ezra Klein shows how, despite an abundance of facts to the contrary, in the conservative media, Obamacare is still considered a disaster.

“This is the problem in the debate about Obamacare. The two sides live in different informational universes.”

“My hunch is that relatively few conservatives realize that premiums are lower-than-expected, and that the law’s costs are lower-than-expected ($104 billion lower, as of April 2014). (Of course, information loops can go the other way, too: a lot of liberals probably don’t know that of the much-discussed 8 million enrollees in Obamacare’s insurance exchanges, new data suggests only about 7.3 million stuck around as paying members.)”

“If Obamacare were Romneycare does anyone doubt Paul Ryan — and Republicans more broadly — would be celebrating?”

“Obamacare isn’t by any means a perfect law and not everything in it is going right. The law powers a different insurance market in every state (plus the District of Columbia), so it is perfectly possible for Obamacare to be a success in California even as there are troubles in Minnesota. And there continue to be operational issues: there have been troubling revelations about web site security, and problems verifying the incomes of some enrollees.”

Posted at 12:37 p.m.

What Happened to the American Dream?

Christopher Ingraham: “This chart, from the Brookings Institution’s FixGov blog, is a pretty good barometer of the country’s mood over the past two years: Americans everywhere, regardless of age, sex, education, party or ideology, are less likely to say that the American Dream – the notion that if you work hard, you’ll get ahead – still holds true today.”

galston chart002 What Happened to the American Dream?


Posted at 11:05 a.m.
Social Issues

A Basic Fairness Problem in the U.S. Tax Code

Neil Irwin explains how surprisingly simple it is to claim tax deductions for personal expenditures as a business expense. And it’s legal.

Using the Michael Sorrentino tax fraud case as an example, Irwin notes that the case highlights “a basic fairness problem in the tax code. Mr. Sorrentino did plenty of things to avoid taxes that were perfectly legal, showing how those with the resources to hire accountants and lawyers can end up with lower tax bills than people with a regular job.”

“In other words, if you stay away from the really egregious deductions, like trying to deduct the expense for your daughter’s wedding as a business entertainment expense just because a couple of colleagues were invited, you’re probably going to be just fine.”

“Compare that with a guy who earns a regular paycheck at a standard job. All of his income is reported to the I.R.S. on a W-2 at the end of the year. He probably won’t have any way to deduct dinner with friends, or tickets to a game, from his income taxes. And he probably won’t be able to pay accountants to help him brainstorm plausible deductions and to help keep him just on the right side of ‘legal.’”

Working Capital Review: What’s ahead for global tax structures?

Posted at 10:34 a.m.
Budget & Taxes

Obamacare Coverage Lowers Hospital Costs

Kaiser Health News: “Hospitals are projected to save $5.7 billion this year as previously uninsured patients gain coverage through the 2010 health care law, the Department of Health and Human Services said Wednesday.”

“States that have expanded their Medicaid programs will see about 74 percent of those savings, an HHS report said … Hospitals in states that have not expanded Medicaid are projected to save up to $1.5 billion this year, or about 26 percent of the total savings nationally.”

HHS Secretary Sylvia Burwell: “This is one of the reasons that we see hospitals and others supporting the expansion of Medicaid.”

“Hospital officials say the biggest impact of the change is on patients themselves. Rather than having to rely on emergency rooms, newly insured patients can see primary care doctors and get diagnostic tests and prescription drugs, among other services.”

Jason Millman: “Millions more people with health insurance means fewer uninsured patients are coming through hospitals’ doors. That means fewer costs from bad debt or charity care from people unable to pay their bills, which amounted to about $50 billion for the nation’s hospitals in 2012.”


Posted at 10:19 a.m.

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