Household

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Household Deals

On Tuesday, Speaker John Boehner took the stage at the Peter G. Petersonas 2012 Fiscal Summit and outlined his intentions to again threaten the Obama administration with default in order to extract concessions on spending. I wrote a bit about why Boehner is adopting this strategy in Wednesdayas Wonkbook. But hereas his full speech:

Itas truly an honor to be with you in the historic Mellon Auditorium. It was here in the spring of 1949 that the United States and our closest allies gathered to sign the North Atlantic Treaty, giving birth to NATO.

On that occasion, President Truman declared that people awith courage and vision can still determine their own destiny. They can choose freedom or slavery.a

In our time, all of these great nations face a grave threat to freedom, one from within, and that is debt. It is shackling our economies and smothering the opportunities that have blessed us with so much.

Once again the world looks to the United States for what it always has: an example. It is the example of a free people whose hard work and sacrifice make up the sum total of thriving towns and a vibrant economy. Itas a humble government that lives within its means and unleashes the potential of first-rate ideas and world-class products. Itas a nation never content with the status quo and always on the make.

I got a glimpse of this example growing up working at my dadas tavern just outside Cincinnati, and then lived a piece of it running my own small business.

Instead of this shining example, what does the world now see?

A president on whose watch the United States lost its gold-plated triple-A rating for the first time in our history;

A Senate, controlled by the presidentas party, that has not passed a budget in more than three years;

And, earlier this month, another unemployment report showing that the worldas greatest economy remains unable to generate enough jobs to spur strong and lasting growth.

If you should know one thing about me, itas that Iam an optimist.

Yes, times are tough, but our future doesnat need to be dark. We donat have to accept a new normal where the workplace looks more like a battlefield and families have to endure flat incomes, weak job prospects, and higher prices in their daily lives.

We have every reason to believe we can come out of this freer and more prosperous than ever. And we will, if we confront our challenges now while we still have the ability to do so.

For the solution to what ails our economy is not government a itas the American people.

The failure of astimulusa a a word people in Washington wonat even use anymore a has sparked a rebellion against overspending, overtaxation, and overregulation.

Americans, who take pride in living on a budget, recognize we canat go on spending money we donat have, and that our economy is stuck in large part because itas stuck with debt.

Nationwide, weare seeing a groundswell of support for bold ideas that reject small politics, cast off big government, and return us to common sense and first principles a the kind of ideas that will restore prosperity and substantially improve the trajectory of our economy.

In March, as part of our Plan for Americaas Job Creators, the House passed an honest budget with real spending cuts, pro-growth tax reform, and serious entitlement reform. Itas a far-reaching effort to control governmentas worst habits and capitalize on the American peopleas best. This budget gets our fiscal house in order AND promotes long-term growth. Far from settling for stability, it offers a true path to prosperity.

Various bipartisan commissions and coalitions have devised ambitious plans as well. The math and the mix are different, but the goals are mainly the same.

And of course, there are summits like these that bring together people who just get it. Of course, while Iam happy to be here and Iam sure we all enjoy each otheras company, we can also agree that weave talked this problem to death.

Itas about time we roll up our sleeves and get to work.

For all the focus on Election Day, another date looms large for every household and every business, and thatas January 1, 2013.

On that day, without action by Congress, a sudden and massive tax increase will be imposed on every American a by an average of $3,000 per household. Rates go up, the child tax credit is cut in half, the AMT patches end, the estate tax returns to 2001 levels, and so on.

Now, it gets a little more complicated than that. What will expire on January 1 is cause for concern a as is what will take effect. That includes:

Indiscriminate spending cuts of $1.2 trillion a half of which would devastate our men and women in uniform and send a signal of weakness;

Several tax increases from the health care law that is making it harder to hire new workers;

As well as a slate of energy and banking rules and regulations that will also increase the strain on the private sector.

But a| it gets even more complicated than that.

Sometime after the election, the federal government will near the statutory debt limit.

This end-of-the-year pileup, commonly called the afiscal cliff,a is a chance for us to bid farewell a permanently a to the era of so-called atimely, temporary, and targeteda short-term government intervention.

For years, Washington has force-fed our economy with a constant diet of meddling, micromanagement, and manipulation. None of it has been a substitute for long-term economic investment, private initiative, and freedom

Previous Congresses have encountered lesser precipices with lower stakes, and made a beeline for the closest lame-duck escape hatch.

Let me put your mind at ease. This Congress will not follow that path, not if I have anything to do with it.

Having run a business, I know that failing to plan is planning to fail. The real pain comes from doing nothing a| aausteritya is what will become necessary if we do nothing now. Weall wake up one day without a choice in the matter.

Thereas also no salvation to be found in doing anything just to get by, just to get through this year.

aNothinga is not an option, and aanythinga is not a plan. To get on the path to prosperity, we have to avoid the fiscal cliff, but we need to start today.

To show my intentions are sincere, Iall start with the stickiest issue, and that of course is the debt limit.

On several occasions in the past, the debt limit has been the catalyst for budget agreements. Last year, however, the president requested a quote-unquote acleana debt limit increase a business as usual.

Well Iave run a business, and thatas no way to do it. Itas certainly no way to run a government either, especially one that has run up a debt bigger than the entire economy. Business as usual will no longer do.

So last year around this time, I accepted an invitation to address the Economic Club of New York. I went up there and said that in my view, the debt limit exists in statute precisely so that government is forced to address its fiscal issues.

Yes, allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process.

We shouldnat dread the debt limit. We should welcome it. Itas an action-forcing event in a town that has become infamous for inaction.

That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase.

From all the way up in Midtown Manhattan, I could hear a great wailing and gnashing of teeth. Over the next couple of months, I was asked again and again if I would yield on my aposition,a what it would take, if I would budgea|

Each and every time, I said anoa a| because it isnat a apositiona a itas a principle. Not just that a itas the right thing to do.

When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.

If that means we have to do a series of stop-gap measures, so be it a but thatas not the ideal. Letas start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.

Just so weare clear, Iam talking about REAL cuts and reforms a not these tricks and gimmicks that have given Washington a pass on grappling with its spending problem.

Last year, in our negotiations with the White House, the president and his team put a number of gimmicks on the table. Plenty of thought and creativity went into them a things like counting money that was never going to be spent as savings.

Maybe in another time, with another Speaker, gimmicks like these would be acceptable.

But, as a matter of simple arithmetic, they wonat work.

They wonat work, and as I told the president, weare not doing things that way anymore.

What also doesnat count as acuts and reformsa are tax increases. Tax hikes destroy jobs a especially an increase on the magnitude set for January 1st. Small businesses need to plan. We shouldnat wait until New Yearas Eve to give American job creators the confidence that they arenat going to get hit with a tax hike on New Yearas Day.

Any sudden tax hike would hurt our economy, so this fall a before the election a the House of Representatives will vote to stop the largest tax increase in American history.

This will give Congress time to work on broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits, and special carveouts.

Eyebrows go up all over town whenever I talk about this, but when I say abroad-baseda tax reform, I mean it. We need to do it all a| deal with the whole code, personal and corporate itas fairer and more productive for everyone.

Thatas why our bill to stop the New Yearas Day tax increase will also establish an expedited process by which Congress would enact real tax reform in 2013. This process would look something like how we handle Trade Promotion Authority, where you put in place a timeline for both houses to act.

The Ways Means Committee will work out the details, but the bottom line is: if we do this right, we will never again have to deal with the uncertainty of expiring tax rates.

Weall have replaced the broken status quo with a tax code that maintains progressivity, taxes income once, and creates a fairer, simpler code.

And if we do THAT right, we will see increased revenue from more economic growth.

Again, change doesnat need to be sudden or painful.

Last fall, when I addressed the Economic Club of Washington, I said that making relatively small changes now can lead to huge dividends down the road in terms of debt reduction. As we approach the issue of the debt limit again, we need to continue to bear this in mind.

As you know, we could eliminate all of the unfunded liabilities in Social Security, Medicare and Medicaid tomorrow, and the effect within the Congressional Budget Office 10-year window could be minimal.

Thatas because changes to these programs take time and are phased-in slowly.

For example, when Congress last increased the retirement age for Social Security, the increase a a mere two years a was scheduled to fully take effect 40 years after the law was enacted.

Another example: take the House Budget Resolution and its assumptions for Medicare reform. Those would not even begin until after 2022.

Smart and modest changes today mean huge dividends down the line.

Now, I can already hear the grumbles a| partisans getting all worked up or people saying, eh, letas wait until after the election.

We canat wait. Employers large and small are already bracing for the coming tax hikes and regulations, which freeze their plans. The markets arenat going to wait forever; eventually theyare going to start reacting.

We now know that we ignore these warnings at our own peril.

Thatas why the House will do its part to ease the uncertainty surrounding the fiscal cliff. And I hope the president will step up, bring his partyas Senate leaders along, and work with us.

Because if thereas one action-forcing event that trumps all the rest a even the debt limit a itas presidential leadership.

Ladies and gentlemen, I believe President Obama cares about this country and knows what the right thing to do is. But knowing whatas right and doing whatas right are different things.

The difference between knowing whatas right and doing whatas right is courage, and the president, Iam sorry to say, lost his.

He was willing to talk about the tough choices needed to preserve and strengthen our entitlement programs, but he wasnat ready to take action.

As it turned out, he wouldnat agree to even the most basic entitlement reform unless it was accompanied by tax increases on small business job creators.

We were on the verge of an agreement that would have reduced the deficit by trillions, by strengthening entitlement programs and reforming the tax code with permanently lower rates for all, laying the foundation for lasting growth.

But when the president saw his former colleagues in the Senate getting ready to press for tax hikes, he lost his nerve. The political temptation was too great. He moved the goalposts, changed his stance, and demanded tax hikes.

We ended up enacting a package with cuts and reforms larger than the hike. But it could have been so much more.

The letdown was considerable. And, in turn, our nationas credit rating was downgraded for the first time.

Well it should also be the last time that happens, which is why I came here today.

If the president continues to put politics before principle a or party before country, as he often accuses others of doing a our economy will suffer and we may well miss our last chance to solve this crisis on our own terms.

But if we have leaders who will lead a| if we have leaders with the courage to make tough choices and the vision to pursue a future paved with growth, then we can heal our economy and again be the example for all to follow.

Iam ready, and Iave been ready. Iam not angling for higher office. This is the last position in government I will hold. I havenat come this far to walk away.

All my life, Iave operated by a simple code: if you do the right thing for the reasons, good things will happen.

Well, NOW is the time to do the right thing.

Letas do it for the right reasons a we donat need to be dragged kicking and screaming. Thatas not the American way. Letas summon the courage and vision to choose freedom, to choose prosperity, and to determine our destiny.

Then weall not only have succeeded in solving this crisis a weall be worthy of that success.

Thank you all.

“We shouldnat dread the debt limit,” said Speaker John Boehner at the Peter G. Peterson Fiscal Summit. “We should welcome it. Itas an action-forcing event in a town that has become infamous for inaction.”

These comments have been the occasion for much wailing and gnashing of teeth, as if anyone, anywhere, believed that the Republicans’ 2011 debt-ceiling antics were some sort of one-off. But Boehner was clear on Tuesday. “I will again insist on my simple principle of cuts and reforms greater than the debt limit increase,” he said.

Of course he will. For one thing, it worked well for him in 2011. Republicans got more than $900 billion in immediate spending cuts, as well as $1.2 trillion in triggered spending cuts — though they don’t much like the $500 billion or so of those cuts scheduled to fall on the Pentagon. They also drove President Obama’s approval ratings beneath 40 percent. And while I’m not one who thinks Republicans intentionally tank the economy to undermine Obama, there’s little doubt that the effect of the debt-ceiling debacle was to set back the recovery, brightening Republican prospects and darkening Democratic ones. The fact is that it’s easier to be sanguine about economic showdowns when you’re not the ones in charge.

For another, it’s Boehner’s only option in 2012. The Democrats, for once, have nothing but fiscal leverage. They’ve got the expiration of the Bush tax cuts, which all Republicans would hate and many Democrats would welcome. They’ve got the aforementioned spending trigger, which Republicans really have begun to fear for its cuts to defense spending. They can do nothing — or, more likely, offer Republicans a deal they can’t accept — and the resulting paralysis will swing fiscal policy far, far, far to the left. Threatening to default on the national debt is Boehner’s only piece of counter-leverage.

So of course Boehner will try and use the debt ceiling as leverage again. And again. And again. It’s pretty clear that, at this point, there’s no going back to the time when debt-ceiling increases came smoothly. If I were the market, I’d take the fact that the leader of one of the two parties has publicly said that he “welcomes” debt-ceiling showdowns as evidence that the United States is almost certain to default on its debt — if only temporarily — within the next decade or so.

The question is what, aside from complain, Democrats and the business community will do to stop him. Somehow, the debt ceiling needs to be taken off the table once and for all, either because Republicans forced a default in a way that they were blamed for the consequences and scared into never doing it again or because the president successfully pulled off one of the more creative maneuvers suggested during last year’s showdown (Bill Clinton, for instance, argued that Obama should invoke the Fourteenth Amendment — which says “the validity of the public debt of the United States … shall not be questioned” — to raise the debt ceiling unilaterally).

Wonkbook dashboard

RCP Obama vs. Romney: Obama +1.8%; 7-day change: Obama +1.6%.

RCP Obama approval: 48.0%; 7-day change: +0.7%.

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Top stories

1) Boehner threatened another debt-mageddon “Washington braced Tuesday for a replay of last summeras tense battle over the burgeoning national debt as House Speaker John A. Boehner threatened again to block an increase in the federal debt ceiling without significant new cuts in spending. Treasury Secretary Timothy F. Geithner and other senior Democrats quickly blasted the Ohio Republican, arguing that his ultimatum could put the nationas credit rating — and the broader economy — at risk early next year, when the debt is expected to hit its $16.4 trillion limit.” Lori Montgomery in The Washington Post.

@damianpaletta: Boehner’s debt ceiling “line in the sand” is very similar to what he said last year; Definitely got the attention of White House and D’s

@ObsoleteDogma: Shorter Boehner: Regulatory uncertainty is bad. But default uncertainty is good.

INTERVIEW: Sen. Tom Coburn on defusing the debt bomb.

READ: Mitt Romneyas remarks on the debt.

@MichaelSLinden: As a fiscal policy analyst, I’d like to thank Mitt Romney for offering no specifics whatsoever so I can go home at a normal time tonight.

2) Greece failed to form a new government, triggering new elections. “The threat of a full economic collapse in Greece escalated Tuesday after warring political factions here failed to forge a new government, triggering fresh elections and heightening chances that this rudderless Mediterranean nation could be forced to abandon the euro…A nation in danger of running out of cash to operate the government, and where fearful residents in recent days have been rapidly withdrawing more of their savings from Greek banks, faces uncertain new elections next month. Opinion surveys have shown that Syriza, a party that wants to break the terms of Greeceas bailout deal and that came in a surprise second in the last vote, is polling in first place…European finance ministers — whose taxpayers have largely funded the bailout for Greece — were quick to push back Tuesday. Given the potential shock waves if Greece is forced to leave the euro zone, there have been suggestions in recent days that European officials might show more lenience with Athens.” Anthony Faiola in The Washington Post.

Surging bank withdrawals in Greece sparked fears of a bank run. “Greek depositors withdrew a!700 million ($898 million) from the country’s banks on Monday, fueling fears of a bank run amid the growing political disarray. With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area. Greek President Karolos Papoulias told the country’s political leaders that bank withdrawals plus buy orders received by Greek banks for German bunds totaled some a!800 million on Monday, a transcript of his comments said. A central bank official confirmed the figures…Monday’s deposit withdrawal far outpaced Greek banks’ steady decline in deposits since the start of the country’s debt crisis in 2009, as depositors withdraw cash and transfer funds overseas.” Brian Blackstone and David Enrich in The Wall Street Journal.

@grossdm: So, Greece is seeking to solves its economic problems through QE — quantitative electioneering

3) The Senate will vote on several GOP budget proposals today. “The Senate on Wednesday will hold six hours of debate and votes on four different Republican budget resolutions, in an apparent attempt to demonstrate that they will not be supported in the Democratic-led Senate. A fifth budget measure up for a vote, from Senate Budget Committee ranking member Jeff Sessions (R-Ala.), is based on President Obama’s budget and is seen as an attempt to embarrass the White House. But Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday that debate and votes on the GOP proposals would show there is little appetite for these plans. He also said it would give the country a chance to understand that last year’s Budget Control Act already sets spending caps for Congress. Democrats have been under fire for failing to pass any budget resolution…One of the four GOP budget resolutions to be debated Wednesday is H.Con.Res. 112, the budget resolution approved by the House in March.” Pete Kasperowicz in The Hill.

4) The Justice Department started a criminal probe into JPMorgan Chase’s loss. “The Justice Department has initiated a criminal probe into the $2 billion trading loss at JPMorgan Chase, a law enforcement representative familiar with the situation said Tuesday. The inquiry is at a very early stage, said the person, who spoke on the condition of anonymity because the matter is private. Many details about the loss at JPMorgan are murky, so it is unclear what laws, if any, may have been violated. But the attention from federal officials indicates that regulatory pressure is rising on JPMorgan, and its chief executive Jamie Dimon, to explain what exactly led to the bankas multi-billion dollar misstep. That, in turn, has rekindled questions about whether government regulators are equipped to monitor banks making risky, complex trades…Dean Boyd, a Justice spokesman, declined to comment.” Jia Lynn Yang and Sari Horwitz in The Washington Post.

Too big to fail banks have gotten bigger. “JPMorgan Chaseas $2 billion blunder is throwing the spotlight on an awkward truth for President Barack Obamaas promise to end the era of big bank bailouts: The same institutions that were deemed ‘too big to fail’ before the financial collapse are even bigger now. Efforts to manage the size of such institutions were at the heart of the Dodd-Frank financial law passed in July 2010. But nearly two years later, many of the lawas regulations remain in limbo, as federal agencies muddle through long rule-making processes against stiff industry opposition…All the while, the countryas biggest financial institutions continue to grow. The five largest, which controlled $6.1 trillion in assets before the collapse, by the end of 2011 had assets worth $8.5 trillion — equal to more than half of U.S. economic output, according to Federal Reserve data.” Patrick Reis in Politico.

@BCAppelbaum: This whole JPM story underscores one reason we don’t have effective financial regulation: Our public officials don’t understand finance.

Top op-eds

1) PORTER: It’s time for the euro to come to an end. “Social upheaval across the euro area suggests that it may be time to call it quits and try to work out an orderly process to re-establish national currencies throughout the bloc. Europe would be in much better shape if the euro didnat exist and each member country had its own currency. Monetary union has shackled together nations with vastly different economies, depriving them of an independent monetary policy that can help them through rough times. The interest rate and exchange rate that serve Germany also have to serve Spain, though that country has more than four times Germanyas joblessness. The main problem is that while leaders eagerly embraced the monetary bond, they rejected its necessary complement: a central budget that would transfer money from successful regions to underperforming ones, as the United States government sends tax dollars collected in Massachusetts to pay for unemployment benefits in Nevada.” Eduardo Porter in The New York Times.

2) FROST: The FDIC shouldn’t protect investment banks. “I suggest that we divide the two functions into separately owned, managed and regulated entities. That’s the only way we can ensure that their riskier businesses don’t undermine the insured deposits that are the foundation of a stable and healthy economy. Taxpayer safety-net programs, such as the Federal Deposit Insurance Corporation (FDIC), should be available only to banks in business to provide insured deposits. Financial institutions that provide primarily investment, hedging and speculative services don’t deserve protection either by the FDIC’s explicit guarantees or by an implicit understanding that taxpayers will bail them out because there is no other alternative. Indeed, this kind of protection is a perversion of capitalism and can distort its good outcomes…We need a real and impregnable firewall that keeps one part of the banking system–and the economy–from being consumed when the other goes into flames.” Tom Frost in The Wall Street Journal.

3) ROSEN: Competitive bidding can hurt patients. “On the face of it, competitive bidding sounds like a very good idea. If one supplier can provide power wheelchairs or oxygen masks for 30 percent less than another, itas hard to argue for contracting with the more expensive supplier, especially at a time when everyone is looking for ways to save money. A one-year experiment with expanded competitive bidding that was recently conducted by Medicare yielded cost savings of 42 percent, without reducing the quality of care, and was hailed as a great success. But as a doctor working with patients on the ground, I have doubts about that quality-of-care measure, and I worry that those savings obscure a potentially serious problem…If competitive bidding is predicated on supplying equipment at the lowest possible price, something has to give. And more likely than not, that something will be patient care.” Dennis Rosen in The New York Times.

4) ORSZAG: Want good news on jobs? Look to big businesses. “Big business, we keep being told, has been so hampered by regulatory uncertainty over the past few years, it has been reluctant to hire workers. So it is surprising to read the results of a little-known survey from the Bureau of Labor Statistics: Very large businesses, it turns out, have been expanding their domestic workforces relatively rapidly. If, since January 2011, businesses of all sizes had hired at the same rate as those with 5,000 or more employees, we would have almost 4 million more jobs today…The JOLTS data highlight the importance of exploring how the continuing deleveraging process and resultant sluggish growth in demand is affecting smaller businesses in particular. With the percentage of working Americans stuck at a depressed level, we sure could use those extra 2 million to 4 million jobs.” Peter Orszag in Bloomberg.

5) ALEXANDER: Washington should take over Medicaid and let states handle education. “Staring down steep tuition hikes, students at the University of California have taken to carrying picket signs. As far as I can tell, though, none has demanded that President Barack Obama accept a Grand Swap that could protect their education while saving them money. Allow me to explain. When I was governor of Tennessee in the early 1980s, I traveled to meet with President Ronald Reagan in the Oval Office and offer that Grand Swap: Medicaid for K-12 education. The federal government would take over 100% of Medicaid, the federal health-care program mainly for low-income Americans, and states would assume all responsibility for the nation’s 100,000 public schools…If we had made that swap…states would have about $92 billion a year in extra funds, as they’d keep the $149 billion they’re now spending on Medicaid and give back to Washington the $57 billion that the federal government spends per year on schools.” Lamar Alexander in The Wall Street Journal.

Cover interlude: Screaming Females play Sheryl Crow’s “If It Makes You Happy” for the AV Club.

Got tips, additions, or comments? E-mail me.

Still to come: Free trade with Colombia is in effect; Catholic bishops are close to suing over birth control; backlash against tests is growing; energy independence is within reach; and a puppies’-eye view of life.

Economy

The Senate will vote on two Fed nominees on Thursday. “Senate Majority Leader Harry Reid (D-Nev.) today set up a procedural vote for Thursday on two nominees to join the Federal Reserve whose nominations have stalled because of opposition from Sen. David Vitter (R-La.)…Vitter blocked attempts in March to quickly confirm Harvard University economics professor Jeremy Stein, a Democratic nominee, and former private-equity executive Jerome Powell, a Republican nominee…Asked whether he was confident that he would have the 60 votes to invoke cloture on the nominations, Reid said, ‘Well I sure hope so, weave been waiting months and months.’…Senate Minority Leader Mitch McConnell (R-Ky.) said he believes there is bipartisan support for the nominees…Without the two nominees in place, the Federal Reserve Board will remain short-handed as it attempts to support the economic recovery” Humberto Sanchez in Roll Call.

The dip in gas prices eased inflation. “The recent slide in gasoline prices in the U.S. has pushed the nation’s annual rate of inflation to its lowest level in more than a year, easing some economic strains on consumers. The consumer price index, which measures what Americans pay for everything from breakfast cereal to doctor visits, was unchanged from March to April, ending three months of increases, the Labor Department said Tuesday. A 2.6% drop in the gasoline-price index helped offset rising costs for many other items. Overall prices are now running 2.3% higher than a year ago, the smallest increase since February 2011…The inflation figures have mixed implications for the recovery. Lower gasoline and utility costs are keeping a lid on household expenses, effectively boosting Americans’ spending money. However, prices are climbing broadly, most notably for food, but also medical care, rents, autos and airfares.” Josh Mitchell in The Wall Street Journal.

States are using foreclosure prevention funds to plug budget gaps. “Hundreds of millions of dollars meant to provide a little relief to the nationas struggling homeowners is being diverted to plug state budget gaps. In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nationas biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the stateas debts. The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes…As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge.” Shaila Dewan in The New York Times.

House Republicans are planning a vote on a ‘fast track’ proposal for tax reform. “Speaker John Boehner said in a speech Tuesday that House Republicans would try to attach a timeline to fast-track a broad tax overhaul to a vote extending the George W. Bush-era tax rates before the November elections…’Our bill to stop the New Yearas Day tax increase will also establish an expedited process by which Congress would enact real tax reform in 2013,’ Boehner (R-Ohio) said in remarks to a fiscal summit in Washington. ‘This process would look something like how we handle Trade Promotion Authority, where you put in place a timeline for both houses to act.’…GOP aides said that, even though Boehner specifically discussed Trade Promotion Authority on Tuesday, House Republicans are looking at a variety of expedited processes that have been used in the past, and have yet to settle on just one.” Russell Berman and Bernie Becker in The Hill.

@grossdm: Memo to Boehner, the markets, etc.: the House passing legislation won’t be sufficient to avert tax increases. They’ll have to make a deal

The euro zone narrowly missed recession. “The euro-zone economy narrowly escaped recession in the latest quarter thanks to a surprising rebound in Germany, which offset deepening downturns in Spain and Italy. Although the region avoided two straight quarterly drops in gross domestic product, the common benchmark for recession, the figures nonetheless reflect a deepening divide between Germany and the rest of the euro zone that complicates the bloc’s efforts to stem its debt crisis…Euro-zone GDP was unchanged from the previous quarter, said Eurostat, the European Union’s statistics agency. In annualized terms, GDP rose 0.1% from the fourth quarter, according to calculations by J.P. Morgan Chase. Economists had expected an annualized contraction of around 1%. GDP fell at a 1.2% rate in the fourth quarter…European stock markets rose initially on the figures, which eased fears that the debt crisis may trigger an economic free fall.” Brian Blackstone in The Washington Post.

Export-Import Bank reauthorization cleared the Senate by a wide margin. “On a broad bipartisan vote of 78 to 20, the Senate voted Tuesday to extend the life of the U.S. Export-Import Bank and expand its authority to make loans to U.S. exporters. In the ‘Schoolhouse Rock’ version of how Capitol Hill works, this is what Congress does all the time — passes legislation. But it made for big news on this Capitol Hill, where protracted partisan warfare has meant that lately the story has more often been about votes forced by one party or the other to indignantly demonstrate the otheras opposition…Tuesdayas bill was the rarest of breeds: a lasting compromise on an issue of substance. It renewed the charter of what is commonly referred to as the Ex-Im bank for three years and will over that time raise the cap on the total financing the bank can guarantee from $100 billion to $140 billion.” Rosalind Helderman in The Washington Post.

The U.S.-Colombia free trade agreement took effect. “A free-trade agreement between the U.S. and Colombia took effect Tuesday after years of negotiations and despite strong opposition from U.S. labor organizations, which are worried about jobs being sent abroad and union-busting violence in Colombia. The first products shipped tariff-free were crates of Colombian roses and other flowers that landed Tuesday morning at Miami’s airport…President Barack Obama signed the free-trade agreement with Colombia in October, days after Congress gave its final approval following heated debates. The deal was originally negotiated by the Bush administration, but President Obama reworked the deal to satisfy Democrats. The U.S. exported $14 billion of goods to Colombia last year, everything from cars to consumer electronics to food, and exports are expected to rise by more than $1.1 billion as a direct result of the pact, according to the International Trade Commission.” Dan Molinski in The Wall Street Journal.

Adorable children singing interlude: Two girls cover Gotye’s “Somebody That I Used To Know” from the back seat of the car.

Health Care

Catholic bishops are threatening to sue over the birth control mandate. “The Catholic Church’s U.S. hierarchy warned Tuesday that without quick action by Congress, it will sue the Obama administration for mandating that insurance plans provide birth control to women without a co-pay. ‘[F]orcing individual and institutional stakeholders to sponsor and subsidize an otherwise widely available product over their religious and moral objections serves no legitimate, let alone compelling, government interest,’ lawyers for the U.S. Conference of Catholic Bishops wrote in a letter to federal regulators. Several small Catholic universities have already filed suit over the policy…The bishops’ notice came in 20 pages of comments submitted to the Department of Health and Human Services (HHS) on a forthcoming rule to accommodate certain religious organizations, such as Catholic hospitals, that were not exempted from the original mandate.” Elise Viebeck in The Hill.

Obamacare will expand healthcare options for immigrants. “The Obama administrationas drive to cut down on Americaas uninsured is about to get multilingual. Come 2014, when core provisions of the Affordable Care Act kick in, millions of legal immigrants will have new options for gaining health coverage. And like U.S. citizens, most will be subject to the individual mandate, under which they will be required to get coverage to avoid a penalty. The national health law explicitly excludes illegal immigrants — a politically explosive topic — and bans them from the new state insurance exchanges, even if they use their own money. They will make up a big chunk of the remaining uninsured population. But advocates say states have good reasons to reach out and get uninsured legal residents covered — especially as the federal government picks up most of the tab…In 2014…legal immigrants will be able to shop for health coverage through the new state insurance exchanges.” Kyle Cheney in Politico.

Domestic Policy

The backlash against standardized testing is growing. “The increasing role of standardized testing in U.S. classrooms is triggering pockets of rebellion across the country from school officials, teachers and parents who say the system is stifling teaching and learning. In Texas, some 400 local school boards–more than one-third of the state’s total–have adopted a resolution this year asking lawmakers to scale back testing. In Everett, Wash., more than 500 children skipped state exams in protest earlier this month…The efforts are a response to the spread of mandatory testing in the past decade. Proponents say the exams are needed to ensure students are learning and teachers’ effectiveness is measured. Critics say schools are spending disproportionate time and resources on the tests at the expense of more-creative learning. They also contend the results weigh too heavily in decisions on student advancement, teacher pay and the fate of schools judged to have failed.” Stephanie Banchero in The Wall Street Journal.

The NLRB suspended implementation of its union elections rule. “The National Labor Relations Board (NLRB) suspended implementation on Tuesday of a rule that would speed up union elections. On Monday, U.S. District Judge James Boasberg struck down the regulation. In his ruling, the judge said the labor board only had two members vote on the final rule in December 2011 when it needed three members to form a quorum. In the wake of the court decision, the agency is temporarily suspending the rule’s implementation, which went into effect on April 30. Further, Lafe Solomon, the NLRB’s acting general counsel, withdrew guidance he sent to the labor board’s regional offices and told those offices to follow the old union election rule instead. The agency is still considering its response to the court ruling…’We continue to believe that the amendments represent a significant improvement in our process and serve the public interest by eliminating unnecessary litigation,’ said NLRB Chairman Mark Pearce.” Kevin Bogardus in The Hill.

Dog’s-eye view interlude: Life from on top of puppies.

Energy

Energy independence is no pipe dream. “Every president since Richard Nixon has called for the U.S. to wean itself from needing oil from unstable or unsavory countries. The nation’s new-found energy riches are likely to bring that ambition closer to reality in the next two decades, according to many forecasters. It’s no pipe dream. The U.S. is already the world’s fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is ‘the new Middle East,’ Citigroup analysts declare in a recent report. The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half…Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020.” Tim Mullaney in USA Today.

@umairh: So consider how our political institutions are paralyzed by a financial crisis. Now think about energy, water, etc crises. Sweet!

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

Today, in Des Moines, Iowa, Mitt Romney delivered a speech his campaign billed as a significant address on the national debt. His prepared remarks a minus some introductory material about the greatness of Iowa a follow:

Today America faces a financial crisis of debt and spending that threatens what it means to be an American. Here in the heartland you know in your hearts that itas wrong.

We canat spend another four years talking about solving a problem that we know we are making worse every single day.

When the men and women who settled the Iowa prairie saw a fire in the distance, they didnat look around for someone else to save them or go back to sleep hoping the wind might blow another direction. They knew that their survival was up to them.

A prairie fire of debt is sweeping across Iowa and our nation and every day we fail to act that fire gets closer to the homes and children we love.

This is not solely a Democrat or a Republican problem. The issue isnat who deserves the most blame, itas who is going to do what it takes to put out the fire.

The people of Iowa and America have watched President Obama for nearly four years, much of that time with Congress controlled by his own party. And rather than put out the spending fire, he has fed the fire. He has spent more and borrowed more.

The time has come for a president, a leader, who will lead. I will lead us out of this debt and spending inferno. We will stop borrowing unfathomable sums of money we canat even imagine, from foreign countries weall never even visit. I will bring us together to put out the fire!

A lot of people think this is a problem we canat solve. I reject that kind of acanat doa defeatist talk. Itas wrong.

Whatas happened here isnat complicated. Washington has been spending too much money and our new president made things much worse. His policies have taken us backwards.

Almost a generation ago, Bill Clinton announced that the Era of Big Government was over.

Even a former McGovern campaign worker like President Clinton was signaling to his own party that Democrats should no longer try to govern by proposing a new program for every problem.

President Obama tucked away the Clinton doctrine in his large drawer of discarded ideas, along with transparency and bipartisanship. Itas enough to make you wonder if maybe it was a personal beef with the Clintons a| but really it runs much deeper.

President Obama is an old-school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, tame the deficit and help create jobs. Instead, he bailed out the public sector, gave billions of dollars to the companies of his friends and added almost as much debt as all the prior presidents combined.

The consequence is that we are enduring the most tepid recovery in modern history.

The consequence is that half of the kids graduating from college canat find a job that uses their skills. Half.

The consequence is that retirees can no longer get by on savings and Social Security.

The consequence is that the length of time it takes an unemployed worker to find a job is the longest on record.

This is why even those who voted for Barack Obama are disappointed in him.

Disappointment is the key in which the presidentas re-election is being played. Americans will not settle for four more years of the same melancholy song. We can and we must do better.

President Obama started out with a near trillion-dollar stimulus package a the biggest, most careless one-time expenditure by the federal government in history. And remember this: The stimulus wasnat just wasted a it was borrowed and wasted. We still owe the money, weare still paying interest on it and itall be that way long after this presidency ends.

Then there was Obamacare. Even now nobody knows what it will actually cost. And that uncertainty has slowed our economy. Employers delay hiring and entrepreneurs put the brakes on starting new businesses, because of a massive, European-style entitlement that Americans didnat want and canat afford.

When you add up his policies, this president has increased the national debt by five trillion dollars.

Let me put that in a way we can understand. Your householdas share of government debt and unfunded liabilities has reached more than $520,000 under this president. Think about what that means. Your household will be taxed year after year with the interest cost of that debt and with the principal payments for those liabilities. Of course, it wonat be paid off by the adults in your household. It will be passed along to your children. They will struggle throughout their lives with the interest on our debts a and President Obama is adding to them every single day.

And thatas the best case scenario. The interest rate on that debt is bound to go up, like an adjustable mortgage. And thereas a good chance this debt could cause us to hit a Greece-like wall.

Subprime mortgages came close to bringing the economy to its knees. This debt is Americaas Nightmare Mortgage. It is adjustable, no-money down, and assigned to our children. Politicians have been trying to hide the truth about this nightmare mortgage for years a just like liar-loans.

This is not just bad economics; it is immoral.

During my time in business and in state government, I came to see the economy as having three big players a the private sector, the states and localities and the federal government.

Of these three, the private sector is by far the most efficient and cost effective. Thatas because scores of businesses and thousands of entrepreneurs are competing every day to find a way to deliver a product or a service that is better than anyone elseas. Think about smart phones. Blackberry got things going. Then Apple introduced the iPhone. Now the Android platform leads the market. In the world of free enterprise, competition brings us better and better products at lower and lower cost. Innovate and change or you go out of business. And the customer a us a benefits.

Government doesnat begin to compare when it comes to change and improvements that provide better and less expensive services and products. But among governments, the states and localities are more responsive than the federal government, probably because there is a degree of competition between them.

The slowest, least responsive sector is the federal government. Nobody hears aWashington, D.C.a and thinks aefficiency.a

Imagine if the federal government was the sole legal supplier of cell phones. First, theyad still be under review, with hearings in Congress. When finally approved, the contract to make them would go to an Obama donor. Theyad be the size of a shoe, with a collapsible solar panel. And campaign donors would be competing to become the all-powerful app czar.

My point is this: As President Obama and old-school liberals absorb more and more of our economy into government, they make what we do more expensive, less efficient and less useful. They make America less competitive. They make government more expensive.

What President Obama is doing is not bold; itas old.

As president, I will make the federal government simpler, smaller, smarter a and, by the way, more in keeping with the vision of the framers of our Constitution.

This is why I do not, for one moment, share my opponentas belief that our spending problems can be solved with more taxes. You do not owe Washington a bigger share of your paycheck.

Instead of putting more limits on your earnings and your options, we need to place clear and firm limits on government spending. As a start, I will lower federal spending to 20 percent of GDP within four yearsa time a down from the 24.3 percent today.

The presidentas plan assumes an endless expansion of government, with costs rising and rising with the spread of Obamacare. I will halt the expansion of government and repeal Obamacare.

Working together, we can save Social Security without making any changes in the system for people in or nearing retirement. We have two basic options for future retirees: a tax increase for high-income retirees, or a decrease in the benefit growth rate for high-income retirees. I favor the second option; it protects everyone in the system and it avoids higher taxes that will drag down the economy.

I have proposed a Medicare plan that improves the program, keeps it solvent and slows the rate of growth in health-care costs.

Both of these reforms are relatively simple, compared to the far more difficult choices weall face if we do nothing. Of course, Medicare and Social Security are also easy to demagogue, and I expect the president to continue doing that in this campaign. But Americans are on to that game, and Iam not going to insult voters by pretending that we can just keep putting off entitlement reform. I will continue to speak honestly, and, if elected, I will do what is right for the people of America.

The president has made little effort to rein in redundancy and waste.

In 2011, the Government Accountability Office found 34 areas where agencies, offices, or initiatives in the federal government had overlapping objectives or were providing similar services. The GAO estimated that fixing this redundancy could save over $100 billion. Yet, one year later, only three of these 34 areas had been fully addressed. Only one program was actually defunded.

In 2010, 17 federal government agencies gave $7.7 billion to more than 25 United Nations programs, billions of it voluntarily.

Another example: There are 94 federal programs in 11 agencies that encourage agreena building. A report found that the results of their initiatives and investments are, quote, aunknown.a

We see the same bureaucracy and overhead in our anti-poverty programs. Last year, the federal government spent more than $600 billion on more than 100 different programs that aim to help the poor.

My approach to federal programs and bureaucracy is entirely different. Move programs to states or to the private sector where they can be run more efficiently and where we can do a better job helping the people who need our help. Shut down programs that arenat working. And streamline everything thatas left. Itas time for the people of America to take back the government of America.

Entitlement reform, doing away with redundancy and waste, and shifting services and programs to the economic player who can deliver them best a these are all serious steps toward getting our debt and spending under control.

But above all, we need to shake off the static big-government mindset of these past few years and all the limits and regulations that go with it. We need a big turnaround here, and it requires a focused, unrelenting, long-term agenda for economic growth.

Instead of leading the world in how much we borrow, America must continue to lead the world in how much we build, create and invent.

With all that weave been through these past few years, the challenges can seem awfully big, and some might look at America and wonder if we have lost our confidence. But confidence is not what is missing. All thatas lacking now is direction and leadership.

These have been years of disappointment and decline, and soon we can put them behind us. We can prosper again, with the powerful recovery weave all been waiting for, the good jobs that so many still need, and, above all, the opportunities we owe to our children and grandchildren.

All of this can be more than our hope a it can be our future. It can begin this year, in the choice you make, so I ask for your help, your support and your vote on the sixth of November.

About 560,000 Americans use some form of car-sharing service a mostly Zipcar a where they can rent vehicles from neighborhood lots by the hour. That sounds like a lot of people, but itas only about 0.27 percent of all drivers in the United States.

So what would happen if car-sharing really caught on? Tanya Snyder points to a new study (pdf) by the RAND Corporation that, in part, looks at the potential for car-sharing in the United States. Realistically, the RAND authors argue, we could see as many as 7.5 million Americans a or 4.5 percent of all eligible drivers a use car-sharing services at some unspecified point in the future. That would be a huge, huge shift, the study notes, but itas not infeasible. Surprisingly, though, it would have only a modest impact on energy use and carbon emissions.

Here are the numbers: If 7.5 million Americans signed up for car-sharing services, the RAND study estimates that greenhouse-gas emissions from all U.S. vehicles would decline just 0.6 percent. If we got outlandish and assumed a future in which 20.3 million Americans (or about 12.5 percent of all eligible drivers) used car-sharing, then emissions from light vehicles would still just drop 1.7 percent.

Thatas not nothing, but the drop in pollution seems fairly meager. How come?

To see why, itas worth looking at how car-sharing reduces emissions. For one, fewer cars need to be manufactured in the first place a according to one survey, one shared vehicle displace nine to 13 private vehicles. Second, people drive fewer overall miles when using a service like Zipcar, in part because theyare constrained by the hourly rate. Third, car-sharing vehicles tend to be newer and more fuel-efficient.

But hereas the twist. For the most part, the people who sign up for car-sharing services were barely driving anyway. On average, Americans who use these sharing services see their car ownership numbers drop from 0.47 cars per household down to 0.24 cars per household. In other words, they went from barely owning cars toa| barely owning cars. In contrast, car ownership for the country as a whole is about 1.87 vehicles per household. Thatas one reason the effect on climate pollution is so small.

Indeed, as StreetsblogDCas Tanya Snyder points out, public transportation a taking the bus or train a is a much more effective way for city dwellers to cut emissions. aOne person taking transit to work instead of driving can save more than two metric tons of carbon dioxide emissions a year, according to APTA,a Snyder notes, aas opposed to the above estimate of 0.89 tons per person car-sharing.a

Now, the RAND study authors a Keith Crane, Liisa Ecola, Scott Hassell, and Shanthi Nataraj a point out that increased car-sharing could have all sorts of other benefits that arenat counted in the numbers above. If millions more people use services like Zipcar, that means thereas less need for parking spaces. That frees up valuable land in urban areas. Car-sharing can also cut down on traffic jams and congestion, which can reduce travel times and conventional air pollution. It can also reduce transportation costs for many people a renting a car periodically is typically much cheaper than owning one.

aBecause many transportation problems can be improved by small changes in the number of vehicles using the roads,a the authors note, athese benefits may be particularly valuable in large metropolitan areas.a

So what would need to happen for car-sharing to take off a growing to 7.5 million drivers or even 20.3 million drivers? The RAND study argues that these services need to become a lot more convenient a by, for instance, becoming widespread enough in cities such that anyone who needs a car at any time can get one. And there are a few policies that states and cities could do to help these services along, from doling out more parking spaces to car-sharing to tweaking state insurance policies so that peer-to-peer vehicle sharing becomes more viable. California is already experimenting with the latter.

Is this realistic? Thatas unclear. The report cautions that optimistic projections about car-sharing have proved wildly off-base in the past. One report from 1994, for instance, found that the amarket potentiala for car-sharing in Germany was 2.45 million people. A decade later, only 70,000 people were using the service.

By the way, the full RAND report isnat even primarily about car-sharing. It mostly discusses a new and comprehensive way to analyze the energy savings from various technological advances a thereas also a section, for instance, on the impacts of switching from newspapers to e-readers (they find, again, modest savings in greenhouse-gas emissions).

Don’t think of gay marriage as a cultural issue. Don’t think of it even as an equality issue. Don’t even think of it as a political issue. Think of it, just for a moment, as an economic issue.

In the traditional view of marriage, write economists Betsey Stevenson and Justin Wolfers, “the joining of husband and wife yields a more productive firm, because it allows one spouse to specialize in earning income from working in the market, while the other specializes in the domestic sphere. The division of labor allows for greater productivity, just as it does in the workplace. The different skills required for these separate roles provide an economic rationale for the advice your grandmother may have offered, that ‘opposites attract.’” Romantic, right?

But in recent decades, the marriage-as-firm view has crumbled — and not just because social mores have changed. “Washing machines, dishwashers and microwave ovens have reduced the value to the family ‘firm’ of employing a domestic specialist,” say Stevenson and Wolfers, who are, themselves, married. “Cheap clothes can be imported from China, rather than sewn at home. Healthy meals can be purchased from the freezer at Trader Joeas. Whatas more, legal and social changes have broken down many of the barriers keeping women out of the labor market…All these developments have increased the opportunity cost of having a spouse stay home, because that spouse now has greater value in the marketplace.”

One possibility was that, as the traditional economic case for marriage fell apart, marriage itself would decline as an institution. But that didn’t happen. Rather, we developed a new kind of marriage. “Modern partnerships are based upon ‘consumption complementarities’ — the joy of sharing things and experiences — rather than the production-based gains that motivated traditional marriage,” continue Stevenson and Wolfers. “Consistent with this, co- parenting has replaced the separate roles of nurturer and disciplinarian. We have called this new model of sharing lives ‘hedonic marriage.’ These are marriages of equality in which the rule aopposites attracta no longer applies in the same way, because couples with more similar interests and values can derive greater benefits. So likes are now more likely to marry each other.”

And it’s into this institution that gay couples are being admitted, because the nature of this institution doesn’t provide a good argument for their exclusion.

Gay couples couldn’t credibly promise to provide each other with the separate and specialized skills — separate for reasons of legal discrimination, and social beliefs about what men and women could do — that were the basis of the older conception of marriage. But gay couples can certainly share the joy of things and experiences, they can certainly improve each other’s lives, they can certainly co-parent, they can certainly bring increased economic stability to a household by combining two incomes — they can do all the things that form the basis of what Stevenson and Wolfers call “hedonic marriages.”

In other words, one story here is that our attitudes have changed towards homosexuality, and that’s certainly true. But another is that our attitudes have changed towards marriage — even heterosexual marriage — in ways that opened the institution for gays. And that’s true, too.

Wonkbook dashboard

RCP Obama vs. Romney: Obama +1.4%; 7-day change: Obama +0.4%.

RCP Obama approval: 48.3%; 7-day change: +1.2%.

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Top stories

1) Greece’s coalition talks remain deadlocked. “Greeceas president is set to resume coalition talks on Tuesday with the countryas political leaders in another attempt to avoid a fresh general election after a meeting on Monday evening ended without agreement. Antonis Samaras and Evangelos Venizelos, the conservative and socialist leaders, and Fotis Kouvelis, head of a leftwing splinter group, held a fruitless one-hour discussion on how to escape the crisis but agreed to meet again, along with other party heads. President Karolos Papoulias has another 48 hours to persuade politicians to join a national unity government according to the constitution or face having to call another election…Alexis Tsipras, the leader of Syriza, the radical leftwing coalition that rejects the terms of Greeceas international bailout, refused to participate in Mondayas talks. ‘Weare not going to join in selective meetings of political leaders … The circle of contacts provided for by the constitution has been completed,’ he said.” Kerin Hope and Peter Spiegel in The Financial Times.

The standoff is raising worries of a European economic crisis. “Political deadlock in Greece rattled world markets Monday, reviving fears that the fractious Mediterranean country could spurn an international bailout, abandon the common European currency and risk a fresh round of world economic turmoil. European stock indexes fell, with Greeceas market now at a 20-year low, while the euro currency continued a recent decline against the dollar. U.S. stocks also fell. Coming only days before the leaders of the worldas Group of Eight industrialized nations meet at Camp David, the standoff in Greece over its political direction has thrust Europeas troubles to the top of the agenda. A downturn in Europe could stagger a fragile recovery in the United States and undermine growth around the world. Fighting a new downturn would be a challenge for the major economies, many of which have not fully stabilized since the last big economic crisis.” Howard Schneider and Anthony Faiola in The Washington Post.

FAQ: Why is Greece in such trouble? And can it be fixed?

@ezraklein: “Syriza” is a rather evil-sounding name for a political party. Pretty sure it means Hydra in Greek.

2) Senate leaders reached a deal to move the Export-Import Bank bill forward. “Legislation to extend the Export-Import Bankas charter advanced in the Senate Monday evening after agreement was reached on addressing tea party demands to reopen a bipartisan deal approved only days ago by the House. Five GOP amendments will be permitted Tuesday — some re-litigating specific agreements reached by House leaders. But in each case, a supermajority of 60 votes would be required, leaving Senate Majority Leader Harry Reid (D-Nev.) hopeful that the House package will survive intact and go quickly to President Barack Obama for his signature this week…Mondayas agreement, as announced by Reid, came only minutes before a scheduled procedural vote in which he would have needed 60 votes himself to move on to the bill. By coming to terms on the amendments, Reid avoided that challenge, but as part of the same deal, he will need 60 votes for passage of the bill.” David Rogers in Politico.

3) JPMorgan Chase’s loss has the banking industry scared. “A Congressional committee announced plans on Monday to hold a hearing on the financial regulatory overhaul that will look at the JPMorgan loss. Wall Streetas representatives, fearing that the entire banking industry might pay for JPMorganas sins, are trying to contain the fallout in Washington, people close to the matter said…JPMorgan, however, is stepping away from another public panel on the Volcker Rule. The Commodity Futures Trading Commission, one of the regulators writing the Volcker Rule, will host a public roundtable this month about the new regulation and has invited JPMorgan to speak. Last week, JPMorgan suggested that one of its top Volcker Rule experts would attend. But then the bank said that this person had a scheduling conflict. Rather than dispatch another executive to Washington, the banks recommended an employee at another bank..” Ben Protess and Ed Wyatt in The New York Times.

The fiasco claimed its first casualty. “JPMorgan Chase on Monday announced the abrupt retirement of the executive who oversaw the unit that lost $2 billion trading exotic securities, the latest twist in a story that has exposed the gulf between how Wall Street views itself and how the public sees the financial sector. To the bank, its actions — which included appointing an executive to investigate what went wrong — were an example of how it could take the initiative in cleaning up its own shop. But to many lawmakers and analysts, the question remains how a bank with a sterling reputation could get into such trouble two years after Congress passed laws to prevent dangerous financial gambling…On Monday, the bank announced that Chief Investment Officer Ina Drew, who oversaw the London unit, would leave the firm, which she has served for 30 years…The bank also announced that Mike Cavanagh, a top executive, would lead a team of officials to investigate the losses.” Zachary Goldfarb and Steven Mufson in The Washington Post.

FAQ: What happened at JP Morgan? And should you care?

@lizzieohreally: Carl Levin just waved highlighted parts of Dodd-Frank at me. Which was awesome.

@SuzyKhimm: Part of Obama’s problem in selling Dodd-Frank: many new regs aren’t written yet, much less implemented. Similar to Obamacare conundrum.

4) Businesses are bracing for taxmageddon. “Defense contractors have slowed hiring. Tax advisers are warning firms not to count on favorite breaks. And hospitals are scouring their books for ways to cut costs. Across the U.S. economy, anxiety is rising about the potential for widespread disruptions after the November election, when a lame-duck Congress will have barely two months to resolve a grinding standoff over taxes and spending. The halls of the U.S. Capitol are already teeming with people warning of disaster if lawmakers fail to defuse a New Yearas budget bomb scheduled to raise taxes for every American taxpayer and slash spending at the Pentagon and most other federal agencies…The uncertainty is already prompting some firms to take action. Many more say they will be forced to contemplate layoffs and other cost-cutting measures long before the end of the year unless the Republican House and the Democratic Senate come up with an alternative path to tame deficits.” Lori Montgomery and Rosalind Helderman in The Washington Post.

5) The House GOP may link tax cut extensions with a tax reform vote this summer. “House GOP leadership is considering linking a short-term extension of the expiring Bush-era tax cuts to an overhaul of the tax system this summer, aiming to give its party a campaign talking point and to pressure Senate Democrats to act. While the details of the plan are very much up in the air, one option being considered is passing a bill extending the 2001 and 2003 tax rates for one year along with a resolution affirming GOP principles for tax reform. The measures could also include some form of fast-track authority, much like the power granted to the Joint Committee on Deficit Reduction, to expedite floor consideration of a tax reform plan in 2013, when the Bush-era tax cuts would again expire…Boehner is expected to address this and other financial issues at a speech before the Peter G. Peterson Foundation Fiscal Summit today.” Daniel Newhauser and John Stanton in Roll Call.

Top op-eds

1) KLEIN: The filibuster may be unconstitutional. “According to Best Lawyers — ‘the oldest and most respected peer-review publication in the legal profession’ — Emmet Bondurant ‘is the go-to lawyer when a business person just canat afford to lose a lawsuit.’ He was its 2010 Lawyer of the Year for Antitrust and Bet-the-Company Litigation. But now, heas bitten off something even bigger: bet-the-country litigation. Bondurant thinks the filibuster is unconstitutional. And, alongside Common Cause, where he serves on the board of directors, heas suing to have the Supreme Court abolish it…At the core of Bondurantas argument is a very simple claim: This isnat what the Founders intended. The historical record is clear on that fact. The framers debated requiring a supermajority in Congress to pass anything. But they rejected that idea.” Ezra Klein in The Washington Post.

2) SALAM: The U.S. economy shouldn’t follow China’s model. “Americans have always looked abroad for inspiration. Alexander Hamilton drew on the experience of Britain and France to shape the economic institutions of the early republic. In the early 19th century, Henry Clay championed tariffs, a national bank, and internal improvements in an effort to match Britainas economic might. As the 19th century gave way to the 20th, Germany emerged as an industrial colossus, and American intellectuals had a new model. During the 1950s, at least some Americans, mainly but not exclusively on the political left, saw the breakneck modernization of the Soviet Union as a clear indication that the old-fashioned market economy was on its last legs…But the belief that we had much to learn from the Soviets was both dangerous and stupid. And much the same can be said for the current enthusiasm over Chinaas economic model.” Reihan Salam in National Review.

3) BERWICK: Cheaper healthcare can mean better healthcare. “Reducing costs wonat just rescue health care; it will also help rescue our schools, our roads, our museums, our wages, and the competitiveness of our corporations…The route is simple: improve care. In a study in the Journal of the American Medical Association, my colleague Andy Hackbarth and I estimated the amount of pure waste in American health care — overtreatment that helps no patient at all (like treating viral infections with antibiotics), errors and injuries from unsafe care, failures in coordination (such as sending people home from hospitals without supports), needless administrative complexity, failures of price competition, and fraud. The lowest estimate of total waste in these six categories was 21 percent of health care costs; the highest was 47 percent; and the midpoint was 34 percent. When we are wasting $1 in of every $3, it makes no sense to say we cannot afford to make health care a human right without rationing. Donat cut care. Cut waste.” Donald Berwick in The Boston Globe.

4) SCHMITT: Link worker pay to corporate taxes to fight inequality. “The tax code can be part of the solution. The first step is to end the preferential treatment of income from capital gains, which economists like Princetonas Alan Blinder have shown to have no lasting effect on total investment or the economy. But we can and should go further, actively using the corporate tax code to create a real incentive to pay CEOs less, and workers more, by linking the head honchoas compensation to both employee salaries and tax rates. Hereas how the idea could work. The current corporate tax rate is a flat 35 percent. In an equity-based corporate tax system, companies with a pay ratio at the historic norm of 40:1, or even up to 60:1, would pay the existing rate and be able to deduct executive pay. But companies that pay their top executives more than 60 times the average worker (including employees in overseas subsidiaries) would pay a higher rate, 40 percent, and those with extreme pay differentials, 80:1 or higher, would pay 45 percent.” Mark Schmitt in GOOD.

5) STEVENSON AND WOLFERS: An economic mode of marriage equality. For our grandparentsa generation, marriage was about separate roles, separate spheres and specialization. Gary Becker, an economist at the University of Chicago, won the Nobel Prize partly for describing the family as an economic institution — a bit like a small firm that employs people with different skills to produce both income and a well-run household. In Beckeras view, the joining of husband and wife yields a more productive firm, because it allows one spouse to specialize in earning income from working in the market, while the other specializes in the domestic sphere. The division of labor allows for greater productivity, just as it does in the workplace…Modern marriage offers different benefits. Today, we search for a soul mate rather than a good homemaker or provider. We are more likely to regard marriage as a forum for shared experiences and passions. Viewed through an economic frame, modern partnerships are based upon ‘consumption complementarities’ — the joy of sharing things and experiences — rather than the production-based gains that motivated traditional marriage. Consistent with this, co- parenting has replaced the separate roles of nurturer and disciplinarian.” Betsey Stevenson and Justin Wolfers at Bloomberg View.

Anti-folk interlude: Kimya Dawson plays “I like Giants” live.

Got tips, additions, or comments? E-mail me.

Still to come: A fall in commodities prices sparks worries of deflation; a turf war over primary care; colleges begin to confront costs; regulators worry about solar flares; and a harbor seal pup explores the water for the first time.

Economy

New data suggests the eurozone has returned to recession. “Industrial production in the 17 countries that use the euro fell unexpectedly in March, leaving little doubt the region contracted for a second straight quarter in the first three months of the year and returned to recession, data by Eurostat showed Monday. The European Union’s statistical agency will publish the first estimate of first-quarter gross domestic product Tuesday. Economists are forecasting a 0.2% quarterly decline, according to a Dow Jones Newswires poll. Industrial production fell 0.3% on the month in March and by 2.2% on the year. The latter was the steepest drop since a 3.7% decline in December 2009, while the monthly decline was because of a sharp 8.5% decrease in energy production as the weather in March was warmer than usual for the time of year, a Eurostat statistician said…The data were weaker than expected. Economists had forecast a 0.5% monthly increase and a 1.2% year-on-year fall.” Ilona Billington in The Wall Street Journal.

Commodities prices fell to a new yearly low. “The prices of key commodities fell to their lowest level of the year on Monday, dragged down by worries about Europeas debt crisis and the possibility of a slowdown in China, the worldas second-largest economy. An emerging concern among some economists and investors is that the declining prices of materials such as gold and crude oil could be an early signal of deflation — a decline of prices that is economically corrosive because it makes it more difficult for businesses to make a profit. The downturn in prices is reflected in broad measures of commodity prices. The Standard & Pooras GSCI, an index tracking prices for crude oil, gold, copper and several other commodities, has dropped more than 6 percent this month so far. Even the price of gold, which usually rises when investors have concerns about the economy, has fallen.” Jia Lynn Yang in The Washington Post.

Smile for the camera interlude: Videos of people who think they are posing for a picture.

Health Care

Romney and Obama differ sharply on Medicare. “President Obama and Mitt Romney agree on one thing about Medicare: the differences between them are huge…Mr. Romney, who would limit the governmentas current open-ended financial commitment to Medicare, contends that Mr. Obama has no workable plan to prevent Medicare from going bankrupt. Under the Romney proposal, the government would contribute a fixed amount of money on behalf of each beneficiary, and future beneficiaries could use the money to buy private insurance or to help pay for traditional Medicare…Mr. Obama assails the Romney proposal for the same reason he denounced a similar plan devised by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee: the government contribution, he says, would not keep up with the rising cost of health care, so Medicare beneficiaries — older Americans and people with disabilities — would have to pay more of the cost.” Robert Pear in The New York Times.

A primary care turf war is heating up. “Nurse practitioners are rolling out a campaign this week to explain what, exactly, nurse practitioners do — and why patients should trust them with their medical needs…The AANP will follow up on the public relations blitz with state-level lobbying efforts, looking to pass bills that will expand the range of medical procedures that their membership can perform…All states have ‘scope of practice’ laws, which regulate what medical procedures each profession can, and cannot, perform, given their level of education…In 16 states, nurse practitioners can practice without the supervision of another professional such as a doctor. Other states, however, require a physician to sign off on a nurse practitioneras prescriptions, for example, or diagnostic tests. As the health insurance expansion looms, expanding those rules to other states has become a crucial priority for nurse practitioners.” Sarah Kliff in The Washington Post.

A senator is floating a plan to make HIV drugs cheaper. “Why do American patients pay tens of thousands of dollars each year for HIV drugs that cost just hundreds in Africa? Drugmakers wave their patent rights in developing countries as part of the Presidentas Emergency Fund for AIDS Relief. But the higher cost of brand-name drugs in the United States makes it difficult for many HIV patients to stay on drug regimens that can cost as much as $30,000 a year. Thatas the challenge a Senate subcommittee will explore on Tuesday at a hearing on how to narrow the gap. Itas mainly a vehicle one proposed solution — a proposal by Sen. Bernie Sanders (I-Vt.) that would award prize money rather than grant patent rights to manufacturers that develop new HIV drugs, allowing the medication to go straight to the generic market. But the hearing will also look at the root causes of a dilemma that has had some HIV patients and drugmakers at odds for years.” J. Lester Feder in Politico.

@petersuderman: This new issue of Health Affairs looks so, so awesome. All coverage expansion all the time!

Domestic Policy

Broadcasters are pushing back on recent FCC moves. “TV broadcasters look at the Federal Communications Commissionas recent drive to move them off frequencies and put their political advertising rates on the Internet and draw one conclusion: The FCC has it in for television. And broadcasters are fighting back by publicly airing that charge in the midst of the ongoing policy debate on freeing up airwaves for wireless broadband…For decades, televisionas use of the airwaves was virtually unchallenged. Under Chairman Julius Genachowski, the FCC has focused on fostering mobile broadband as the essential communications platform of the future. As broadcasters see it, television has become a much less important medium to the agency…In the wrangling over spectrum, broadcasters see the wireless industry — which is clamoring for access to more airwaves to satisfy the exploding amount of broadband data traffic — as their main foe. As the wireless industry sees it, the best use of finite spectrum resources is mobile broadband.” Brooks Boliek in Politico.

A federal judge struck down a NLRB rule on union elections. “A federal judge ruled Monday that a contentious union election rule proposed by the National Labor Relations Board (NLRB) is ‘invalid.’ In an 18-page memorandum opinion, U.S. District Judge James Boasberg struck the regulation down, saying the labor board only had two members when it voted on the final rule in December 2011. Boasberg said the agency needed at least three members to have a quorum for action on the rule…Two NLRB members — Chairman Mark Pearce and then-Member Craig Becker, both Democrats — participated in adopting the rule. The labor boardas third member at the time, Republican Brian Hayes, did not participate…The judge said the decision by the U.S. District Court for the District of Columbia ‘may seem unduly technical,’ but cited a 2010 Supreme Court ruling that the NLRB needs a quorum of three members to issue regulations and make rulings. Boasberg said his ruling was not made on the merits of the union election rule and noted the NLRB could vote again to pass it.” Kevin Bogardus in The Hill.

@AlecMacGillis: Dems’ failure to pass labor law reform in ’09-’10 haunts once again–a judge just threw out NLRB’s incremental new rule to ease organizing.

Colleges are beginning to confront costs. “College presidents across the country are confronting the same realization, trying to manage their institutions with fewer state dollars without sacrificing quality or all-important academic rankings. Tuition increases had been a relatively easy fix but now — with the balance of student debt topping $1 trillion and an increasing number of borrowers struggling to pay — some administrators acknowledge that they cannot keep putting the financial onus on students and their families. Increasingly, they are looking for other ways to pay for education, stepping up private fund-raising, privatizing services, cutting staff, eliminating departments — even saving millions of dollars by standardizing things like expense forms…The problems arenat confined to public colleges. Administrators at some nonprofit private institutions said they too had come to realize they could not keep raising tuition and fees.” Andrew Martin in The New York Times.

Adorable animals exploring the world interlude: The firsts of a harbor seal pup.

Energy

A transmission line for offshore wind is moving forward. “A pioneering proposal to build a wind power transmission line on the ocean floor from southern Virginia to northern New Jersey cleared a hurdle on Monday when the Interior Department opened the way for the projectas sponsors to start work on an environmental impact statement. The Bureau of Ocean Energy Management, part of the Interior Department, said that no competitor had emerged for the right-of-way for the proposed transmission line, known as the Atlantic Wind Connection, allowing the bureau to issue a ‘determination of no competitive interest.’ By linking wind farms 15 to 20 miles off the coast, the backbone would greatly reduce the number of individual radial lines needed to bring the energy to shore…Construction of the full project would take about 10 years, according to the company. The right-of-way corridor, including branches to reach the shore at intermediate points, would run about 790 miles, the Interior Department said.” Matthew Wald in The New York Times.

Regulators are considering options to protect the grid from solar flares. “With a peak in the cycle of solar flares approaching, U.S. electricity regulators are weighing their options for protecting the nation’s grid from the sun’s eruptions–including new equipment standards and retrofits–while keeping a lid on the cost. They are studying the impact of historic sunstorms as far back as 1859 to see if the system needs an upgrade, and encountering a clash of views on how serious the threat is and what should be done about it…The sun is expected to hit a peak eruption period in 2013, and while superstorms don’t always occur in peak periods, some warn of a disaster. John Kappenman, a consultant and former power engineer who has spent decades researching the storms, says the modern power grid isn’t hardened for the worst nature has to offer. He says an extreme storm could cause blackouts lasting weeks or months, leaving major cities temporarily uninhabitable and taking a massive economic toll.” Ryan Tracy in The Wall Street Journal.

Highway crashes are the leading cause of fatalities for oil and gas workers. “Over the past decade, more than 300 oil and gas workers like Mr. Roth were killed in highway crashes, the largest cause of fatalities in the industry. Many of these deaths were due in part to oil field exemptions from highway safety rules that allow truckers to work longer hours than drivers in most other industries, according to safety and health experts. Many oil field truckers say that while these exemptions help them earn more money, they are routinely used to pressure workers into driving after shifts that are 20 hours or longer…Last year, the National Transportation Safety Board said it ‘strongly opposed’ the oil field exemptions because they raise the risk of crashes. This threat will grow substantially in coming years, safety advocates warn. According to federal officials, more than 200,000 new oil and gas wells will be drilled nationwide over the next decade.” Ian Urbina in The New York Times.

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

On Tuesday, Speaker John Boehner took the stage at the Peter G. Petersonas 2012 Fiscal Summit and outlined his intentions to again threaten the Obama administration with default in order to extract concessions on spending. I wrote a bit about why Boehner is adopting this strategy in Wednesdayas Wonkbook. But hereas his full speech:

Itas truly an honor to be with you in the historic Mellon Auditorium. It was here in the spring of 1949 that the United States and our closest allies gathered to sign the North Atlantic Treaty, giving birth to NATO.

On that occasion, President Truman declared that people awith courage and vision can still determine their own destiny. They can choose freedom or slavery.a

In our time, all of these great nations face a grave threat to freedom, one from within, and that is debt. It is shackling our economies and smothering the opportunities that have blessed us with so much.

Once again the world looks to the United States for what it always has: an example. It is the example of a free people whose hard work and sacrifice make up the sum total of thriving towns and a vibrant economy. Itas a humble government that lives within its means and unleashes the potential of first-rate ideas and world-class products. Itas a nation never content with the status quo and always on the make.

I got a glimpse of this example growing up working at my dadas tavern just outside Cincinnati, and then lived a piece of it running my own small business.

Instead of this shining example, what does the world now see?

A president on whose watch the United States lost its gold-plated triple-A rating for the first time in our history;

A Senate, controlled by the presidentas party, that has not passed a budget in more than three years;

And, earlier this month, another unemployment report showing that the worldas greatest economy remains unable to generate enough jobs to spur strong and lasting growth.

If you should know one thing about me, itas that Iam an optimist.

Yes, times are tough, but our future doesnat need to be dark. We donat have to accept a new normal where the workplace looks more like a battlefield and families have to endure flat incomes, weak job prospects, and higher prices in their daily lives.

We have every reason to believe we can come out of this freer and more prosperous than ever. And we will, if we confront our challenges now while we still have the ability to do so.

For the solution to what ails our economy is not government a itas the American people.

The failure of astimulusa a a word people in Washington wonat even use anymore a has sparked a rebellion against overspending, overtaxation, and overregulation.

Americans, who take pride in living on a budget, recognize we canat go on spending money we donat have, and that our economy is stuck in large part because itas stuck with debt.

Nationwide, weare seeing a groundswell of support for bold ideas that reject small politics, cast off big government, and return us to common sense and first principles a the kind of ideas that will restore prosperity and substantially improve the trajectory of our economy.

In March, as part of our Plan for Americaas Job Creators, the House passed an honest budget with real spending cuts, pro-growth tax reform, and serious entitlement reform. Itas a far-reaching effort to control governmentas worst habits and capitalize on the American peopleas best. This budget gets our fiscal house in order AND promotes long-term growth. Far from settling for stability, it offers a true path to prosperity.

Various bipartisan commissions and coalitions have devised ambitious plans as well. The math and the mix are different, but the goals are mainly the same.

And of course, there are summits like these that bring together people who just get it. Of course, while Iam happy to be here and Iam sure we all enjoy each otheras company, we can also agree that weave talked this problem to death.

Itas about time we roll up our sleeves and get to work.

For all the focus on Election Day, another date looms large for every household and every business, and thatas January 1, 2013.

On that day, without action by Congress, a sudden and massive tax increase will be imposed on every American a by an average of $3,000 per household. Rates go up, the child tax credit is cut in half, the AMT patches end, the estate tax returns to 2001 levels, and so on.

Now, it gets a little more complicated than that. What will expire on January 1 is cause for concern a as is what will take effect. That includes:

Indiscriminate spending cuts of $1.2 trillion a half of which would devastate our men and women in uniform and send a signal of weakness;

Several tax increases from the health care law that is making it harder to hire new workers;

As well as a slate of energy and banking rules and regulations that will also increase the strain on the private sector.

But a| it gets even more complicated than that.

Sometime after the election, the federal government will near the statutory debt limit.

This end-of-the-year pileup, commonly called the afiscal cliff,a is a chance for us to bid farewell a permanently a to the era of so-called atimely, temporary, and targeteda short-term government intervention.

For years, Washington has force-fed our economy with a constant diet of meddling, micromanagement, and manipulation. None of it has been a substitute for long-term economic investment, private initiative, and freedom

Previous Congresses have encountered lesser precipices with lower stakes, and made a beeline for the closest lame-duck escape hatch.

Let me put your mind at ease. This Congress will not follow that path, not if I have anything to do with it.

Having run a business, I know that failing to plan is planning to fail. The real pain comes from doing nothing a| aausteritya is what will become necessary if we do nothing now. Weall wake up one day without a choice in the matter.

Thereas also no salvation to be found in doing anything just to get by, just to get through this year.

aNothinga is not an option, and aanythinga is not a plan. To get on the path to prosperity, we have to avoid the fiscal cliff, but we need to start today.

To show my intentions are sincere, Iall start with the stickiest issue, and that of course is the debt limit.

On several occasions in the past, the debt limit has been the catalyst for budget agreements. Last year, however, the president requested a quote-unquote acleana debt limit increase a business as usual.

Well Iave run a business, and thatas no way to do it. Itas certainly no way to run a government either, especially one that has run up a debt bigger than the entire economy. Business as usual will no longer do.

So last year around this time, I accepted an invitation to address the Economic Club of New York. I went up there and said that in my view, the debt limit exists in statute precisely so that government is forced to address its fiscal issues.

Yes, allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process.

We shouldnat dread the debt limit. We should welcome it. Itas an action-forcing event in a town that has become infamous for inaction.

That night in New York City, I put forth the principle that we should not raise the debt ceiling without real spending cuts and reforms that exceed the amount of the debt limit increase.

From all the way up in Midtown Manhattan, I could hear a great wailing and gnashing of teeth. Over the next couple of months, I was asked again and again if I would yield on my aposition,a what it would take, if I would budgea|

Each and every time, I said anoa a| because it isnat a apositiona a itas a principle. Not just that a itas the right thing to do.

When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.

If that means we have to do a series of stop-gap measures, so be it a but thatas not the ideal. Letas start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.

Just so weare clear, Iam talking about REAL cuts and reforms a not these tricks and gimmicks that have given Washington a pass on grappling with its spending problem.

Last year, in our negotiations with the White House, the president and his team put a number of gimmicks on the table. Plenty of thought and creativity went into them a things like counting money that was never going to be spent as savings.

Maybe in another time, with another Speaker, gimmicks like these would be acceptable.

But, as a matter of simple arithmetic, they wonat work.

They wonat work, and as I told the president, weare not doing things that way anymore.

What also doesnat count as acuts and reformsa are tax increases. Tax hikes destroy jobs a especially an increase on the magnitude set for January 1st. Small businesses need to plan. We shouldnat wait until New Yearas Eve to give American job creators the confidence that they arenat going to get hit with a tax hike on New Yearas Day.

Any sudden tax hike would hurt our economy, so this fall a before the election a the House of Representatives will vote to stop the largest tax increase in American history.

This will give Congress time to work on broad-based tax reform that lowers rates for individuals and businesses while closing deductions, credits, and special carveouts.

Eyebrows go up all over town whenever I talk about this, but when I say abroad-baseda tax reform, I mean it. We need to do it all a| deal with the whole code, personal and corporate itas fairer and more productive for everyone.

Thatas why our bill to stop the New Yearas Day tax increase will also establish an expedited process by which Congress would enact real tax reform in 2013. This process would look something like how we handle Trade Promotion Authority, where you put in place a timeline for both houses to act.

The Ways Means Committee will work out the details, but the bottom line is: if we do this right, we will never again have to deal with the uncertainty of expiring tax rates.

Weall have replaced the broken status quo with a tax code that maintains progressivity, taxes income once, and creates a fairer, simpler code.

And if we do THAT right, we will see increased revenue from more economic growth.

Again, change doesnat need to be sudden or painful.

Last fall, when I addressed the Economic Club of Washington, I said that making relatively small changes now can lead to huge dividends down the road in terms of debt reduction. As we approach the issue of the debt limit again, we need to continue to bear this in mind.

As you know, we could eliminate all of the unfunded liabilities in Social Security, Medicare and Medicaid tomorrow, and the effect within the Congressional Budget Office 10-year window could be minimal.

Thatas because changes to these programs take time and are phased-in slowly.

For example, when Congress last increased the retirement age for Social Security, the increase a a mere two years a was scheduled to fully take effect 40 years after the law was enacted.

Another example: take the House Budget Resolution and its assumptions for Medicare reform. Those would not even begin until after 2022.

Smart and modest changes today mean huge dividends down the line.

Now, I can already hear the grumbles a| partisans getting all worked up or people saying, eh, letas wait until after the election.

We canat wait. Employers large and small are already bracing for the coming tax hikes and regulations, which freeze their plans. The markets arenat going to wait forever; eventually theyare going to start reacting.

We now know that we ignore these warnings at our own peril.

Thatas why the House will do its part to ease the uncertainty surrounding the fiscal cliff. And I hope the president will step up, bring his partyas Senate leaders along, and work with us.

Because if thereas one action-forcing event that trumps all the rest a even the debt limit a itas presidential leadership.

Ladies and gentlemen, I believe President Obama cares about this country and knows what the right thing to do is. But knowing whatas right and doing whatas right are different things.

The difference between knowing whatas right and doing whatas right is courage, and the president, Iam sorry to say, lost his.

He was willing to talk about the tough choices needed to preserve and strengthen our entitlement programs, but he wasnat ready to take action.

As it turned out, he wouldnat agree to even the most basic entitlement reform unless it was accompanied by tax increases on small business job creators.

We were on the verge of an agreement that would have reduced the deficit by trillions, by strengthening entitlement programs and reforming the tax code with permanently lower rates for all, laying the foundation for lasting growth.

But when the president saw his former colleagues in the Senate getting ready to press for tax hikes, he lost his nerve. The political temptation was too great. He moved the goalposts, changed his stance, and demanded tax hikes.

We ended up enacting a package with cuts and reforms larger than the hike. But it could have been so much more.

The letdown was considerable. And, in turn, our nationas credit rating was downgraded for the first time.

Well it should also be the last time that happens, which is why I came here today.

If the president continues to put politics before principle a or party before country, as he often accuses others of doing a our economy will suffer and we may well miss our last chance to solve this crisis on our own terms.

But if we have leaders who will lead a| if we have leaders with the courage to make tough choices and the vision to pursue a future paved with growth, then we can heal our economy and again be the example for all to follow.

Iam ready, and Iave been ready. Iam not angling for higher office. This is the last position in government I will hold. I havenat come this far to walk away.

All my life, Iave operated by a simple code: if you do the right thing for the reasons, good things will happen.

Well, NOW is the time to do the right thing.

Letas do it for the right reasons a we donat need to be dragged kicking and screaming. Thatas not the American way. Letas summon the courage and vision to choose freedom, to choose prosperity, and to determine our destiny.

Then weall not only have succeeded in solving this crisis a weall be worthy of that success.

Thank you all.

“We shouldnat dread the debt limit,” said Speaker John Boehner at the Peter G. Peterson Fiscal Summit. “We should welcome it. Itas an action-forcing event in a town that has become infamous for inaction.”

These comments have been the occasion for much wailing and gnashing of teeth, as if anyone, anywhere, believed that the Republicans’ 2011 debt-ceiling antics were some sort of one-off. But Boehner was clear on Tuesday. “I will again insist on my simple principle of cuts and reforms greater than the debt limit increase,” he said.

Of course he will. For one thing, it worked well for him in 2011. Republicans got more than $900 billion in immediate spending cuts, as well as $1.2 trillion in triggered spending cuts — though they don’t much like the $500 billion or so of those cuts scheduled to fall on the Pentagon. They also drove President Obama’s approval ratings beneath 40 percent. And while I’m not one who thinks Republicans intentionally tank the economy to undermine Obama, there’s little doubt that the effect of the debt-ceiling debacle was to set back the recovery, brightening Republican prospects and darkening Democratic ones. The fact is that it’s easier to be sanguine about economic showdowns when you’re not the ones in charge.

For another, it’s Boehner’s only option in 2012. The Democrats, for once, have nothing but fiscal leverage. They’ve got the expiration of the Bush tax cuts, which all Republicans would hate and many Democrats would welcome. They’ve got the aforementioned spending trigger, which Republicans really have begun to fear for its cuts to defense spending. They can do nothing — or, more likely, offer Republicans a deal they can’t accept — and the resulting paralysis will swing fiscal policy far, far, far to the left. Threatening to default on the national debt is Boehner’s only piece of counter-leverage.

So of course Boehner will try and use the debt ceiling as leverage again. And again. And again. It’s pretty clear that, at this point, there’s no going back to the time when debt-ceiling increases came smoothly. If I were the market, I’d take the fact that the leader of one of the two parties has publicly said that he “welcomes” debt-ceiling showdowns as evidence that the United States is almost certain to default on its debt — if only temporarily — within the next decade or so.

The question is what, aside from complain, Democrats and the business community will do to stop him. Somehow, the debt ceiling needs to be taken off the table once and for all, either because Republicans forced a default in a way that they were blamed for the consequences and scared into never doing it again or because the president successfully pulled off one of the more creative maneuvers suggested during last year’s showdown (Bill Clinton, for instance, argued that Obama should invoke the Fourteenth Amendment — which says “the validity of the public debt of the United States … shall not be questioned” — to raise the debt ceiling unilaterally).

Wonkbook dashboard

RCP Obama vs. Romney: Obama +1.8%; 7-day change: Obama +1.6%.

RCP Obama approval: 48.0%; 7-day change: +0.7%.

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Top stories

1) Boehner threatened another debt-mageddon “Washington braced Tuesday for a replay of last summeras tense battle over the burgeoning national debt as House Speaker John A. Boehner threatened again to block an increase in the federal debt ceiling without significant new cuts in spending. Treasury Secretary Timothy F. Geithner and other senior Democrats quickly blasted the Ohio Republican, arguing that his ultimatum could put the nationas credit rating — and the broader economy — at risk early next year, when the debt is expected to hit its $16.4 trillion limit.” Lori Montgomery in The Washington Post.

@damianpaletta: Boehner’s debt ceiling “line in the sand” is very similar to what he said last year; Definitely got the attention of White House and D’s

@ObsoleteDogma: Shorter Boehner: Regulatory uncertainty is bad. But default uncertainty is good.

INTERVIEW: Sen. Tom Coburn on defusing the debt bomb.

READ: Mitt Romneyas remarks on the debt.

@MichaelSLinden: As a fiscal policy analyst, I’d like to thank Mitt Romney for offering no specifics whatsoever so I can go home at a normal time tonight.

2) Greece failed to form a new government, triggering new elections. “The threat of a full economic collapse in Greece escalated Tuesday after warring political factions here failed to forge a new government, triggering fresh elections and heightening chances that this rudderless Mediterranean nation could be forced to abandon the euro…A nation in danger of running out of cash to operate the government, and where fearful residents in recent days have been rapidly withdrawing more of their savings from Greek banks, faces uncertain new elections next month. Opinion surveys have shown that Syriza, a party that wants to break the terms of Greeceas bailout deal and that came in a surprise second in the last vote, is polling in first place…European finance ministers — whose taxpayers have largely funded the bailout for Greece — were quick to push back Tuesday. Given the potential shock waves if Greece is forced to leave the euro zone, there have been suggestions in recent days that European officials might show more lenience with Athens.” Anthony Faiola in The Washington Post.

Surging bank withdrawals in Greece sparked fears of a bank run. “Greek depositors withdrew a!700 million ($898 million) from the country’s banks on Monday, fueling fears of a bank run amid the growing political disarray. With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area. Greek President Karolos Papoulias told the country’s political leaders that bank withdrawals plus buy orders received by Greek banks for German bunds totaled some a!800 million on Monday, a transcript of his comments said. A central bank official confirmed the figures…Monday’s deposit withdrawal far outpaced Greek banks’ steady decline in deposits since the start of the country’s debt crisis in 2009, as depositors withdraw cash and transfer funds overseas.” Brian Blackstone and David Enrich in The Wall Street Journal.

@grossdm: So, Greece is seeking to solves its economic problems through QE — quantitative electioneering

3) The Senate will vote on several GOP budget proposals today. “The Senate on Wednesday will hold six hours of debate and votes on four different Republican budget resolutions, in an apparent attempt to demonstrate that they will not be supported in the Democratic-led Senate. A fifth budget measure up for a vote, from Senate Budget Committee ranking member Jeff Sessions (R-Ala.), is based on President Obama’s budget and is seen as an attempt to embarrass the White House. But Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday that debate and votes on the GOP proposals would show there is little appetite for these plans. He also said it would give the country a chance to understand that last year’s Budget Control Act already sets spending caps for Congress. Democrats have been under fire for failing to pass any budget resolution…One of the four GOP budget resolutions to be debated Wednesday is H.Con.Res. 112, the budget resolution approved by the House in March.” Pete Kasperowicz in The Hill.

4) The Justice Department started a criminal probe into JPMorgan Chase’s loss. “The Justice Department has initiated a criminal probe into the $2 billion trading loss at JPMorgan Chase, a law enforcement representative familiar with the situation said Tuesday. The inquiry is at a very early stage, said the person, who spoke on the condition of anonymity because the matter is private. Many details about the loss at JPMorgan are murky, so it is unclear what laws, if any, may have been violated. But the attention from federal officials indicates that regulatory pressure is rising on JPMorgan, and its chief executive Jamie Dimon, to explain what exactly led to the bankas multi-billion dollar misstep. That, in turn, has rekindled questions about whether government regulators are equipped to monitor banks making risky, complex trades…Dean Boyd, a Justice spokesman, declined to comment.” Jia Lynn Yang and Sari Horwitz in The Washington Post.

Too big to fail banks have gotten bigger. “JPMorgan Chaseas $2 billion blunder is throwing the spotlight on an awkward truth for President Barack Obamaas promise to end the era of big bank bailouts: The same institutions that were deemed ‘too big to fail’ before the financial collapse are even bigger now. Efforts to manage the size of such institutions were at the heart of the Dodd-Frank financial law passed in July 2010. But nearly two years later, many of the lawas regulations remain in limbo, as federal agencies muddle through long rule-making processes against stiff industry opposition…All the while, the countryas biggest financial institutions continue to grow. The five largest, which controlled $6.1 trillion in assets before the collapse, by the end of 2011 had assets worth $8.5 trillion — equal to more than half of U.S. economic output, according to Federal Reserve data.” Patrick Reis in Politico.

@BCAppelbaum: This whole JPM story underscores one reason we don’t have effective financial regulation: Our public officials don’t understand finance.

Top op-eds

1) PORTER: It’s time for the euro to come to an end. “Social upheaval across the euro area suggests that it may be time to call it quits and try to work out an orderly process to re-establish national currencies throughout the bloc. Europe would be in much better shape if the euro didnat exist and each member country had its own currency. Monetary union has shackled together nations with vastly different economies, depriving them of an independent monetary policy that can help them through rough times. The interest rate and exchange rate that serve Germany also have to serve Spain, though that country has more than four times Germanyas joblessness. The main problem is that while leaders eagerly embraced the monetary bond, they rejected its necessary complement: a central budget that would transfer money from successful regions to underperforming ones, as the United States government sends tax dollars collected in Massachusetts to pay for unemployment benefits in Nevada.” Eduardo Porter in The New York Times.

2) FROST: The FDIC shouldn’t protect investment banks. “I suggest that we divide the two functions into separately owned, managed and regulated entities. That’s the only way we can ensure that their riskier businesses don’t undermine the insured deposits that are the foundation of a stable and healthy economy. Taxpayer safety-net programs, such as the Federal Deposit Insurance Corporation (FDIC), should be available only to banks in business to provide insured deposits. Financial institutions that provide primarily investment, hedging and speculative services don’t deserve protection either by the FDIC’s explicit guarantees or by an implicit understanding that taxpayers will bail them out because there is no other alternative. Indeed, this kind of protection is a perversion of capitalism and can distort its good outcomes…We need a real and impregnable firewall that keeps one part of the banking system–and the economy–from being consumed when the other goes into flames.” Tom Frost in The Wall Street Journal.

3) ROSEN: Competitive bidding can hurt patients. “On the face of it, competitive bidding sounds like a very good idea. If one supplier can provide power wheelchairs or oxygen masks for 30 percent less than another, itas hard to argue for contracting with the more expensive supplier, especially at a time when everyone is looking for ways to save money. A one-year experiment with expanded competitive bidding that was recently conducted by Medicare yielded cost savings of 42 percent, without reducing the quality of care, and was hailed as a great success. But as a doctor working with patients on the ground, I have doubts about that quality-of-care measure, and I worry that those savings obscure a potentially serious problem…If competitive bidding is predicated on supplying equipment at the lowest possible price, something has to give. And more likely than not, that something will be patient care.” Dennis Rosen in The New York Times.

4) ORSZAG: Want good news on jobs? Look to big businesses. “Big business, we keep being told, has been so hampered by regulatory uncertainty over the past few years, it has been reluctant to hire workers. So it is surprising to read the results of a little-known survey from the Bureau of Labor Statistics: Very large businesses, it turns out, have been expanding their domestic workforces relatively rapidly. If, since January 2011, businesses of all sizes had hired at the same rate as those with 5,000 or more employees, we would have almost 4 million more jobs today…The JOLTS data highlight the importance of exploring how the continuing deleveraging process and resultant sluggish growth in demand is affecting smaller businesses in particular. With the percentage of working Americans stuck at a depressed level, we sure could use those extra 2 million to 4 million jobs.” Peter Orszag in Bloomberg.

5) ALEXANDER: Washington should take over Medicaid and let states handle education. “Staring down steep tuition hikes, students at the University of California have taken to carrying picket signs. As far as I can tell, though, none has demanded that President Barack Obama accept a Grand Swap that could protect their education while saving them money. Allow me to explain. When I was governor of Tennessee in the early 1980s, I traveled to meet with President Ronald Reagan in the Oval Office and offer that Grand Swap: Medicaid for K-12 education. The federal government would take over 100% of Medicaid, the federal health-care program mainly for low-income Americans, and states would assume all responsibility for the nation’s 100,000 public schools…If we had made that swap…states would have about $92 billion a year in extra funds, as they’d keep the $149 billion they’re now spending on Medicaid and give back to Washington the $57 billion that the federal government spends per year on schools.” Lamar Alexander in The Wall Street Journal.

Cover interlude: Screaming Females play Sheryl Crow’s “If It Makes You Happy” for the AV Club.

Got tips, additions, or comments? E-mail me.

Still to come: Free trade with Colombia is in effect; Catholic bishops are close to suing over birth control; backlash against tests is growing; energy independence is within reach; and a puppies’-eye view of life.

Economy

The Senate will vote on two Fed nominees on Thursday. “Senate Majority Leader Harry Reid (D-Nev.) today set up a procedural vote for Thursday on two nominees to join the Federal Reserve whose nominations have stalled because of opposition from Sen. David Vitter (R-La.)…Vitter blocked attempts in March to quickly confirm Harvard University economics professor Jeremy Stein, a Democratic nominee, and former private-equity executive Jerome Powell, a Republican nominee…Asked whether he was confident that he would have the 60 votes to invoke cloture on the nominations, Reid said, ‘Well I sure hope so, weave been waiting months and months.’…Senate Minority Leader Mitch McConnell (R-Ky.) said he believes there is bipartisan support for the nominees…Without the two nominees in place, the Federal Reserve Board will remain short-handed as it attempts to support the economic recovery” Humberto Sanchez in Roll Call.

The dip in gas prices eased inflation. “The recent slide in gasoline prices in the U.S. has pushed the nation’s annual rate of inflation to its lowest level in more than a year, easing some economic strains on consumers. The consumer price index, which measures what Americans pay for everything from breakfast cereal to doctor visits, was unchanged from March to April, ending three months of increases, the Labor Department said Tuesday. A 2.6% drop in the gasoline-price index helped offset rising costs for many other items. Overall prices are now running 2.3% higher than a year ago, the smallest increase since February 2011…The inflation figures have mixed implications for the recovery. Lower gasoline and utility costs are keeping a lid on household expenses, effectively boosting Americans’ spending money. However, prices are climbing broadly, most notably for food, but also medical care, rents, autos and airfares.” Josh Mitchell in The Wall Street Journal.

States are using foreclosure prevention funds to plug budget gaps. “Hundreds of millions of dollars meant to provide a little relief to the nationas struggling homeowners is being diverted to plug state budget gaps. In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nationas biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the stateas debts. The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes…As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge.” Shaila Dewan in The New York Times.

House Republicans are planning a vote on a ‘fast track’ proposal for tax reform. “Speaker John Boehner said in a speech Tuesday that House Republicans would try to attach a timeline to fast-track a broad tax overhaul to a vote extending the George W. Bush-era tax rates before the November elections…’Our bill to stop the New Yearas Day tax increase will also establish an expedited process by which Congress would enact real tax reform in 2013,’ Boehner (R-Ohio) said in remarks to a fiscal summit in Washington. ‘This process would look something like how we handle Trade Promotion Authority, where you put in place a timeline for both houses to act.’…GOP aides said that, even though Boehner specifically discussed Trade Promotion Authority on Tuesday, House Republicans are looking at a variety of expedited processes that have been used in the past, and have yet to settle on just one.” Russell Berman and Bernie Becker in The Hill.

@grossdm: Memo to Boehner, the markets, etc.: the House passing legislation won’t be sufficient to avert tax increases. They’ll have to make a deal

The euro zone narrowly missed recession. “The euro-zone economy narrowly escaped recession in the latest quarter thanks to a surprising rebound in Germany, which offset deepening downturns in Spain and Italy. Although the region avoided two straight quarterly drops in gross domestic product, the common benchmark for recession, the figures nonetheless reflect a deepening divide between Germany and the rest of the euro zone that complicates the bloc’s efforts to stem its debt crisis…Euro-zone GDP was unchanged from the previous quarter, said Eurostat, the European Union’s statistics agency. In annualized terms, GDP rose 0.1% from the fourth quarter, according to calculations by J.P. Morgan Chase. Economists had expected an annualized contraction of around 1%. GDP fell at a 1.2% rate in the fourth quarter…European stock markets rose initially on the figures, which eased fears that the debt crisis may trigger an economic free fall.” Brian Blackstone in The Washington Post.

Export-Import Bank reauthorization cleared the Senate by a wide margin. “On a broad bipartisan vote of 78 to 20, the Senate voted Tuesday to extend the life of the U.S. Export-Import Bank and expand its authority to make loans to U.S. exporters. In the ‘Schoolhouse Rock’ version of how Capitol Hill works, this is what Congress does all the time — passes legislation. But it made for big news on this Capitol Hill, where protracted partisan warfare has meant that lately the story has more often been about votes forced by one party or the other to indignantly demonstrate the otheras opposition…Tuesdayas bill was the rarest of breeds: a lasting compromise on an issue of substance. It renewed the charter of what is commonly referred to as the Ex-Im bank for three years and will over that time raise the cap on the total financing the bank can guarantee from $100 billion to $140 billion.” Rosalind Helderman in The Washington Post.

The U.S.-Colombia free trade agreement took effect. “A free-trade agreement between the U.S. and Colombia took effect Tuesday after years of negotiations and despite strong opposition from U.S. labor organizations, which are worried about jobs being sent abroad and union-busting violence in Colombia. The first products shipped tariff-free were crates of Colombian roses and other flowers that landed Tuesday morning at Miami’s airport…President Barack Obama signed the free-trade agreement with Colombia in October, days after Congress gave its final approval following heated debates. The deal was originally negotiated by the Bush administration, but President Obama reworked the deal to satisfy Democrats. The U.S. exported $14 billion of goods to Colombia last year, everything from cars to consumer electronics to food, and exports are expected to rise by more than $1.1 billion as a direct result of the pact, according to the International Trade Commission.” Dan Molinski in The Wall Street Journal.

Adorable children singing interlude: Two girls cover Gotye’s “Somebody That I Used To Know” from the back seat of the car.

Health Care

Catholic bishops are threatening to sue over the birth control mandate. “The Catholic Church’s U.S. hierarchy warned Tuesday that without quick action by Congress, it will sue the Obama administration for mandating that insurance plans provide birth control to women without a co-pay. ‘[F]orcing individual and institutional stakeholders to sponsor and subsidize an otherwise widely available product over their religious and moral objections serves no legitimate, let alone compelling, government interest,’ lawyers for the U.S. Conference of Catholic Bishops wrote in a letter to federal regulators. Several small Catholic universities have already filed suit over the policy…The bishops’ notice came in 20 pages of comments submitted to the Department of Health and Human Services (HHS) on a forthcoming rule to accommodate certain religious organizations, such as Catholic hospitals, that were not exempted from the original mandate.” Elise Viebeck in The Hill.

Obamacare will expand healthcare options for immigrants. “The Obama administrationas drive to cut down on Americaas uninsured is about to get multilingual. Come 2014, when core provisions of the Affordable Care Act kick in, millions of legal immigrants will have new options for gaining health coverage. And like U.S. citizens, most will be subject to the individual mandate, under which they will be required to get coverage to avoid a penalty. The national health law explicitly excludes illegal immigrants — a politically explosive topic — and bans them from the new state insurance exchanges, even if they use their own money. They will make up a big chunk of the remaining uninsured population. But advocates say states have good reasons to reach out and get uninsured legal residents covered — especially as the federal government picks up most of the tab…In 2014…legal immigrants will be able to shop for health coverage through the new state insurance exchanges.” Kyle Cheney in Politico.

Domestic Policy

The backlash against standardized testing is growing. “The increasing role of standardized testing in U.S. classrooms is triggering pockets of rebellion across the country from school officials, teachers and parents who say the system is stifling teaching and learning. In Texas, some 400 local school boards–more than one-third of the state’s total–have adopted a resolution this year asking lawmakers to scale back testing. In Everett, Wash., more than 500 children skipped state exams in protest earlier this month…The efforts are a response to the spread of mandatory testing in the past decade. Proponents say the exams are needed to ensure students are learning and teachers’ effectiveness is measured. Critics say schools are spending disproportionate time and resources on the tests at the expense of more-creative learning. They also contend the results weigh too heavily in decisions on student advancement, teacher pay and the fate of schools judged to have failed.” Stephanie Banchero in The Wall Street Journal.

The NLRB suspended implementation of its union elections rule. “The National Labor Relations Board (NLRB) suspended implementation on Tuesday of a rule that would speed up union elections. On Monday, U.S. District Judge James Boasberg struck down the regulation. In his ruling, the judge said the labor board only had two members vote on the final rule in December 2011 when it needed three members to form a quorum. In the wake of the court decision, the agency is temporarily suspending the rule’s implementation, which went into effect on April 30. Further, Lafe Solomon, the NLRB’s acting general counsel, withdrew guidance he sent to the labor board’s regional offices and told those offices to follow the old union election rule instead. The agency is still considering its response to the court ruling…’We continue to believe that the amendments represent a significant improvement in our process and serve the public interest by eliminating unnecessary litigation,’ said NLRB Chairman Mark Pearce.” Kevin Bogardus in The Hill.

Dog’s-eye view interlude: Life from on top of puppies.

Energy

Energy independence is no pipe dream. “Every president since Richard Nixon has called for the U.S. to wean itself from needing oil from unstable or unsavory countries. The nation’s new-found energy riches are likely to bring that ambition closer to reality in the next two decades, according to many forecasters. It’s no pipe dream. The U.S. is already the world’s fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is ‘the new Middle East,’ Citigroup analysts declare in a recent report. The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half…Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020.” Tim Mullaney in USA Today.

@umairh: So consider how our political institutions are paralyzed by a financial crisis. Now think about energy, water, etc crises. Sweet!

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.

Today, in Des Moines, Iowa, Mitt Romney delivered a speech his campaign billed as a significant address on the national debt. His prepared remarks a minus some introductory material about the greatness of Iowa a follow:

Today America faces a financial crisis of debt and spending that threatens what it means to be an American. Here in the heartland you know in your hearts that itas wrong.

We canat spend another four years talking about solving a problem that we know we are making worse every single day.

When the men and women who settled the Iowa prairie saw a fire in the distance, they didnat look around for someone else to save them or go back to sleep hoping the wind might blow another direction. They knew that their survival was up to them.

A prairie fire of debt is sweeping across Iowa and our nation and every day we fail to act that fire gets closer to the homes and children we love.

This is not solely a Democrat or a Republican problem. The issue isnat who deserves the most blame, itas who is going to do what it takes to put out the fire.

The people of Iowa and America have watched President Obama for nearly four years, much of that time with Congress controlled by his own party. And rather than put out the spending fire, he has fed the fire. He has spent more and borrowed more.

The time has come for a president, a leader, who will lead. I will lead us out of this debt and spending inferno. We will stop borrowing unfathomable sums of money we canat even imagine, from foreign countries weall never even visit. I will bring us together to put out the fire!

A lot of people think this is a problem we canat solve. I reject that kind of acanat doa defeatist talk. Itas wrong.

Whatas happened here isnat complicated. Washington has been spending too much money and our new president made things much worse. His policies have taken us backwards.

Almost a generation ago, Bill Clinton announced that the Era of Big Government was over.

Even a former McGovern campaign worker like President Clinton was signaling to his own party that Democrats should no longer try to govern by proposing a new program for every problem.

President Obama tucked away the Clinton doctrine in his large drawer of discarded ideas, along with transparency and bipartisanship. Itas enough to make you wonder if maybe it was a personal beef with the Clintons a| but really it runs much deeper.

President Obama is an old-school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, tame the deficit and help create jobs. Instead, he bailed out the public sector, gave billions of dollars to the companies of his friends and added almost as much debt as all the prior presidents combined.

The consequence is that we are enduring the most tepid recovery in modern history.

The consequence is that half of the kids graduating from college canat find a job that uses their skills. Half.

The consequence is that retirees can no longer get by on savings and Social Security.

The consequence is that the length of time it takes an unemployed worker to find a job is the longest on record.

This is why even those who voted for Barack Obama are disappointed in him.

Disappointment is the key in which the presidentas re-election is being played. Americans will not settle for four more years of the same melancholy song. We can and we must do better.

President Obama started out with a near trillion-dollar stimulus package a the biggest, most careless one-time expenditure by the federal government in history. And remember this: The stimulus wasnat just wasted a it was borrowed and wasted. We still owe the money, weare still paying interest on it and itall be that way long after this presidency ends.

Then there was Obamacare. Even now nobody knows what it will actually cost. And that uncertainty has slowed our economy. Employers delay hiring and entrepreneurs put the brakes on starting new businesses, because of a massive, European-style entitlement that Americans didnat want and canat afford.

When you add up his policies, this president has increased the national debt by five trillion dollars.

Let me put that in a way we can understand. Your householdas share of government debt and unfunded liabilities has reached more than $520,000 under this president. Think about what that means. Your household will be taxed year after year with the interest cost of that debt and with the principal payments for those liabilities. Of course, it wonat be paid off by the adults in your household. It will be passed along to your children. They will struggle throughout their lives with the interest on our debts a and President Obama is adding to them every single day.

And thatas the best case scenario. The interest rate on that debt is bound to go up, like an adjustable mortgage. And thereas a good chance this debt could cause us to hit a Greece-like wall.

Subprime mortgages came close to bringing the economy to its knees. This debt is Americaas Nightmare Mortgage. It is adjustable, no-money down, and assigned to our children. Politicians have been trying to hide the truth about this nightmare mortgage for years a just like liar-loans.

This is not just bad economics; it is immoral.

During my time in business and in state government, I came to see the economy as having three big players a the private sector, the states and localities and the federal government.

Of these three, the private sector is by far the most efficient and cost effective. Thatas because scores of businesses and thousands of entrepreneurs are competing every day to find a way to deliver a product or a service that is better than anyone elseas. Think about smart phones. Blackberry got things going. Then Apple introduced the iPhone. Now the Android platform leads the market. In the world of free enterprise, competition brings us better and better products at lower and lower cost. Innovate and change or you go out of business. And the customer a us a benefits.

Government doesnat begin to compare when it comes to change and improvements that provide better and less expensive services and products. But among governments, the states and localities are more responsive than the federal government, probably because there is a degree of competition between them.

The slowest, least responsive sector is the federal government. Nobody hears aWashington, D.C.a and thinks aefficiency.a

Imagine if the federal government was the sole legal supplier of cell phones. First, theyad still be under review, with hearings in Congress. When finally approved, the contract to make them would go to an Obama donor. Theyad be the size of a shoe, with a collapsible solar panel. And campaign donors would be competing to become the all-powerful app czar.

My point is this: As President Obama and old-school liberals absorb more and more of our economy into government, they make what we do more expensive, less efficient and less useful. They make America less competitive. They make government more expensive.

What President Obama is doing is not bold; itas old.

As president, I will make the federal government simpler, smaller, smarter a and, by the way, more in keeping with the vision of the framers of our Constitution.

This is why I do not, for one moment, share my opponentas belief that our spending problems can be solved with more taxes. You do not owe Washington a bigger share of your paycheck.

Instead of putting more limits on your earnings and your options, we need to place clear and firm limits on government spending. As a start, I will lower federal spending to 20 percent of GDP within four yearsa time a down from the 24.3 percent today.

The presidentas plan assumes an endless expansion of government, with costs rising and rising with the spread of Obamacare. I will halt the expansion of government and repeal Obamacare.

Working together, we can save Social Security without making any changes in the system for people in or nearing retirement. We have two basic options for future retirees: a tax increase for high-income retirees, or a decrease in the benefit growth rate for high-income retirees. I favor the second option; it protects everyone in the system and it avoids higher taxes that will drag down the economy.

I have proposed a Medicare plan that improves the program, keeps it solvent and slows the rate of growth in health-care costs.

Both of these reforms are relatively simple, compared to the far more difficult choices weall face if we do nothing. Of course, Medicare and Social Security are also easy to demagogue, and I expect the president to continue doing that in this campaign. But Americans are on to that game, and Iam not going to insult voters by pretending that we can just keep putting off entitlement reform. I will continue to speak honestly, and, if elected, I will do what is right for the people of America.

The president has made little effort to rein in redundancy and waste.

In 2011, the Government Accountability Office found 34 areas where agencies, offices, or initiatives in the federal government had overlapping objectives or were providing similar services. The GAO estimated that fixing this redundancy could save over $100 billion. Yet, one year later, only three of these 34 areas had been fully addressed. Only one program was actually defunded.

In 2010, 17 federal government agencies gave $7.7 billion to more than 25 United Nations programs, billions of it voluntarily.

Another example: There are 94 federal programs in 11 agencies that encourage agreena building. A report found that the results of their initiatives and investments are, quote, aunknown.a

We see the same bureaucracy and overhead in our anti-poverty programs. Last year, the federal government spent more than $600 billion on more than 100 different programs that aim to help the poor.

My approach to federal programs and bureaucracy is entirely different. Move programs to states or to the private sector where they can be run more efficiently and where we can do a better job helping the people who need our help. Shut down programs that arenat working. And streamline everything thatas left. Itas time for the people of America to take back the government of America.

Entitlement reform, doing away with redundancy and waste, and shifting services and programs to the economic player who can deliver them best a these are all serious steps toward getting our debt and spending under control.

But above all, we need to shake off the static big-government mindset of these past few years and all the limits and regulations that go with it. We need a big turnaround here, and it requires a focused, unrelenting, long-term agenda for economic growth.

Instead of leading the world in how much we borrow, America must continue to lead the world in how much we build, create and invent.

With all that weave been through these past few years, the challenges can seem awfully big, and some might look at America and wonder if we have lost our confidence. But confidence is not what is missing. All thatas lacking now is direction and leadership.

These have been years of disappointment and decline, and soon we can put them behind us. We can prosper again, with the powerful recovery weave all been waiting for, the good jobs that so many still need, and, above all, the opportunities we owe to our children and grandchildren.

All of this can be more than our hope a it can be our future. It can begin this year, in the choice you make, so I ask for your help, your support and your vote on the sixth of November.

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