Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
October 1, 2014

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.
Health

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.
Health

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.
Judiciary

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.
Economy

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.
Health

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.
Health

The Obamcare Revolution in How Americans Pay for Health Care

Bob Kocher and Farzad Mostashari, writing in the New York Times, use the case of McAllen, TX — once the most expensive place for health care in the U.S. — as an example of an Obamacare success story.

McAllen is “now showing us how the problem can be solved, largely because of the Affordable Care Act.”

“The problem was that doctors in McAllen were responding to reimbursement incentives in the American health care system that rewarded activity rather than value.”

Obamacare “created the Medicare Shared Savings Program, which rewards doctors for keeping their patients healthy. Participation in the program requires primary care doctors to create networks, called accountable care organizations, or A.C.O.s, to better coordinate patient care.”

“These changes didn’t just save money; they also improved patients’ health. From 2012 to 2013, the number of patients achieving control of their diabetes rose 11.8 percentage points. The number receiving vaccinations rose 12.2 percentage points.”

“This is not an isolated case. Today, more than 5.3 million Medicare beneficiaries nationwide are served by more than 360 A.C.O.s, which have helped hold spending hundreds of millions of dollars below Medicare targets for this period.”

“A continued slowing of health care cost growth will owe a good deal to this revolution in how we pay for medical care. It is a transformation that was sparked by the Affordable Care Act, and is now being played out throughout the country.”

Posted at 6:15 a.m.
Health

Income Inequality Begins in the Workplace

Peter Orszag: “Rising inequality in the amount of money Americans earn turns out to be mostly explained by where they work. And that may help solve another puzzle about the economy: why fewer and fewer workers are moving from one company to another.”

“A new study [released by the National Bureau of Economic Research] of U.S. incomes since the 1970s shows that most of the rise in inequality has been due to a greater spread in average earnings across companies. The researchers … attribute two-thirds to nine-tenths of the change to increasing inequality from workplace to workplace.”

Another study showed that “other labor-market indicators also suggest that there is substantially less fluidity today than there has been historically and that the decline started well before the recent recession.”

“Here’s how the two papers may be related: If most of the rise in earnings inequality is due to bigger pay differences across companies, one might expect that few people would leave the higher-paying employers once they’re in the door. And while workers at the lower-paying companies may want to jump, the opportunities to do so would be limited.”

Posted at 6:08 a.m.
Economy

A Bleak View of American Government

Gallup: “More than one in four Americans are satisfied with the way the nation is being governed, while nearly three in four are dissatisfied … Although the 27% who are currently satisfied is higher than the record-low satisfaction seen last October during the partial government shutdown, it is still below where it was in September 2013, before the shutdown began.”

“The partial government shutdown affected Americans’ views of many things, including a sharp drop in economic confidence and a rise in the percentage saying dysfunctional government was the most important problem in the country. While views on a number of these issues have improved since the shutdown ended, many Americans continue to have low opinions of the country’s government. Currently, Americans are not satisfied with the way things are going in the country and are less trusting of the executive and legislative branches than they were in 2013. With voters set to go to the polls in a little more than a month, incumbents seeking re-election may face a more challenging fight than in the past.”

uujojp949uywnrkomlofcg A Bleak View of American Government

September 24, 2014

Corporations Step in to Take Action on Climate Change

New York Times: “With political efforts to slow global warming moving at a tortuous pace, some of the world’s largest companies are stepping into the void, pledging more support for renewable energy, greener supply chains and fresh efforts to stop the destruction of the world’s tropical forests.”

“Forty companies, among them Kellogg, L’Oréal and Nestlé, signed a declaration on Tuesday pledging to help cut tropical deforestation in half by 2020 and stop it entirely by 2030. They included several of the largest companies handling palm oil, the production of which has resulted in rampant destruction of old-growth forests, especially in Indonesia.”

“The corporate promises are the culmination of a trend that has been building for years, with virtually every major company now feeling obliged to make commitments about environmental sustainability, and to report regularly on progress. The companies have found that pursuing such goals can often help them cut costs, particularly for energy.”

Paul Ryan’s Latest Strategy is to Question Arithmetic

Jonathan Chait declares that Paul Ryan “has identified the root cause of his difficulties, and it is fiscal arithmetic.”

What is Ryan’s new tax plan? “During the 2012 campaign, he swept aside the problem by couching his plan as ‘tax reform,’ promising not to cut taxes for the rich. Ryan’s new plan is just to go ahead and cut taxes.”

“Ryan assails Obama for doing nothing about the long-term deficit, which he calls a ‘crisis’ and claimed would lead to interest rate hikes years ago that are still nowhere in sight. It is true that long-term deficits are projected to rise somewhat. It is not true that Obama has done nothing. He let the Bush tax cuts on income over $450,000 rise, over Ryan’s fierce objections.”

22 debt chart.w529.h352.2x Paul Ryans Latest Strategy is to Question Arithmetic

“With the Bush tax cuts continuing in their entirety, the national debt was projected to hit 200 percent of gross domestic product by 2032. It is now projected to be at less than half that level.”

“Obama enacted policies to increase revenue and slow health-care inflation, over the staunch and often hysterical opposition of Ryan, who insisted that budget forecasts showing that Obama’s proposals would reduce the deficit were wrong. The deficit has in fact fallen very fast. Ryan’s response is to deny that any of this has happened, to castigate Obama for failing to reduce the deficit, and to propose new measures that would increase it. And he wants everybody to ignore the budget forecasters because their numbers won’t bear out his claims.”

 

Posted at 11:08 a.m.
Economy

Wall Street Focuses on Income Inequality

Wall Street Journal: “First, it was Standard & Poor’s.  Now, Morgan Stanley weighs in on income inequality in a new report. Why are these Wall Street institutions, normally focused on macroeconomic issues directly related to gross domestic product forecasts, suddenly chiming in on the issue?”

“Because both firms find U.S. inequality is holding back economic growth. Morgan Stanley’s research suggests weaker-than-usual consumption at the lower end of the income ladder helps explain why this economic recovery has been particularly anemic.”

“Before the recession, they say, ‘the expansion of credit simply delayed the day of reckoning from declining incomes and rising inequality.’”

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