Congress

The IRS Threat to Turbo Tax

Flickr/401K 2012
As a general matter, I think the best reason for government not to go around competing with private industry isn't that doing so inherently diminishes our freedom, but because it's just not worth the effort, and much of the time it isn't going to provide any benefit to consumers. It wouldn't be tyrannical for the federal government to produce its own brand of cola, but it would be pointless, since they're unlikely to make something people will like better than Coke or Pepsi, and consumers seem to be perfectly happy with their current cola options. On the other hand, there are some areas where the market has clearly failed—health insurance for senior citizens, for instance (and, I'd argue, everyone else too, but that's a separate topic)—where it makes sense for the government to step in. But what about areas where the market in question involves private companies helping consumers interact with the government itself? And where there isn't a particularly egregious market failure, but...

Have the Politics of Gun Control Changed?

Flickr/White House
At The Washington Post , Greg Sargent reports that five red-state Democrats—Kay Hagan of North Carolina, Mary Landrieu of Louisiana, Mark Pryor of Arkansas, Joe Donnelly of Indiana, and Heidi Heitkamp of North Dakota—have been unwilling to voice support for expanding the background-check program—"the centerpiece," he writes, "of President Obama's package of gun reforms." Their rationale is straightforward: Supporting this policy might hurt us in our states, or leave us vulnerable to Republican attacks. This, despite the fact that expanded background checks have wide support from the public. It's hard, at this point, to make predictions on the status of the policy, but if this is any indication, the situation doesn't look good—if Democrats have backed away from an assault-weapons ban, and are skittish over expanded background checks, then what hope is there for meaningful gun control policies? Indeed, it's tempting to argue— as Chris Cillizza does —that national outrage notwithstanding...

Battle of the Budgets

AP Photo/Alex Brandon
For the next year, at least, Republicans will have one less talking point to turn to when they want to hit Democrats on the budget. Over the weekend, Senate Democrats came together to pass their first budget since 2009, a comprehensive package that calls for additional stimulus and modest deficit reduction, stretched over the next ten years. Under Senate rules, lawmakers can’t filibuster a budget resolution, allowing Democrats to pass it by a vote of 50 to 49 , with four Democrats—Mark Pryor of Arkansas, Kay Hagan of North Carolina, Mark Begich of Alaska, and Max Baucus of Montana—voting against the bill. Unlike the House budget—crafted by Republican Paul Ryan—the Senate plan isn’t meant to restructure the federal government or redefine its obligations. Nor does it try to balance the budget or order dramatic and controversial changes to the tax code. Instead, it’s a modest package responsive to the economic needs of the moment. It includes $100 billion in immediate infrastructure...

Another Court Nominee Down

WikiMedia Commons
Last Friday afternoon, the Obama administration surrendered on its latest attempt to fill one of four vacancies on the nation's second most-important court. Caitlin Halligan, facing a Republican filibuster, officially withdrew from consideration for a judgeship on the D.C. Circuit Court of Appeals. This is not surprising or unexpected. Halligan, who was nominated to fill the seat vacated by Chief Justice John Roberts, had seen her nomination languish since 2010. The successful filibuster that snuffed Halligan's nomination early this March represents another example of why real reform or (better yet) elimination of the filibuster is desperately needed. The filibustering of Halligan is striking, even in the context of an utterly dysfunctional Senate, for two reasons. First, Halligan is a mainstream nominee , with broad support for her credentials and temperament from across the political spectrum. And second, Obama is the first president in at least 50 years not to get a single nominee...

A Post-Iraq Security Consensus?

AP Photo
On the tenth anniversary of George W. Bush's invasion of Iraq, we may be witnessing a seismic shift in America's politics of national security. After decades of using hawkish positions for partisan advantage, the Republican Party is facing a foreign policy identity crisis. Its brand is still stained by the Iraq War and the Global War on Terror, and the once-fringe views of Ron Paul are becoming mainstream among the public and party activists, as shown by the response to Senator Rand Paul's March 6 filibuster and his success at this past weekend's Conservative Political Action Conference. This is liberating progressive Democrats to criticize the Obama Administration—now safely reelected—for its hawkish national security policies, and it might even free the party from some of its ceaseless fear of looking "soft" on terror. It's about time. One can't help wondering what took so long, since this is clearly a winning issue: opposition to the Global War on Terror abroad and civil liberties...

Banks Are Too Big to Fail Say ... Conservatives?

AP Photo/Jae C. Hong
AP Photo/Jae C. Hong M embers of the Federal Reserve don’t usually make the rounds at partisan gatherings. But amid the tri-cornered hats and “#StandWithRand” buttons of last week’s Conservative Political Action Conference (CPAC)—the largest annual gathering of conservatives in the country—was Richard Fisher, president of the Dallas Federal Reserve Bank. In a Saturday morning speech , Fisher quoted Revolutionary War hero Patrick Henry, who once said that while “Different men often see the same subject in different lights,” such quibbling had to be set aside in a time of “awful moment to this country.” Fisher described the current time as an era of economic injustice in which the nation’s largest banks threaten our financial stability and act with immunity. He said that the Dodd-Frank financial reform law did not go nearly far enough to fix the problem, and that mega-banks still profited from being “Too Big to Fail.” His solutions included a proposal to limit the total assets held by...

The Political Is Personal

AP Photo/Mike Munden
On Friday, Senator Rob Portman of Ohio became the first Republican in the Senate to support same-sex marriage, explaining in a Columbus Dispatch op-ed that his change of heart came after his son told him he's gay. It was easy to be underwhelmed by Portman's announcement; as Michael Tomasky asked , "what if his son weren't gay? Were that the case, we have no reason whatsoever to believe Portman would have taken this step." That's true, and we might also ask what took him so long; after all, Portman wrote that his son came out to him two years ago, and that seems like a rather extended period of introspection. Portman may not be a civil-rights hero, but if nothing else his announcement is likely to force people to confront the ways public policy is or isn't shaped by legislators' own experiences. And now, many of them will be asked what they would do in Portman's shoes. That was what Speaker of the House John Boehner was asked on Sunday's This Week , and he answered, "I believe that...

The Boehner Rule

flickr/Talk Radio News Service
flickr/Talk Radio News Service A fter months of Republican resistance, the House of Representative finally renewed the Violence Against Women Act (VAWA) late last month. What many casual political observers may not know is that there were always enough votes in the House for the bill to pass, but it couldn’t get a vote because of something called the “Hastert Rule”—an informal practice in the House by which only legislation supported by a majority of the majority party (in this case, Republicans) is allowed to come to a vote. How Speaker John Boehner got VAWA passed tells us a lot about what the next two years is going to be like in Washington. The Hastert Rule was coined during the speakership of Republican Denny Hastert, who said he would bring nothing to the floor of the House of Representatives unless a majority of the Republican conference supported it. As University of Miami political scientist Greg Koger explains, the logic behind such a rule is basically one of "an...

The Contest Over the Real Economic Problem

flickr/Starley Shelton
“Our biggest problems over the next ten years are not deficits,” the president told House Republicans Wednesday, according to those who attended the meeting. The president needs to deliver the same message to the public, loudly and clearly. The biggest problems we face are unemployment, stagnant wages, slow growth, and widening inequality—not deficits. The major goal must be to get jobs and wages back, not balance the budget. Paul Ryan’s budget plan—essentially, the House Republican plan—is designed to lure the White House and Democrats, and the American public, into a debate over how to balance the federal budget in ten years, not over whether it’s worth doing. “This is an invitation,” Ryan explained when he unveiled the plan Tuesday. “Show us how to balance the budget. If you don’t like the way we’re proposing to balance our budget, how do you propose to balance the budget?” Until now the president has seemed all too willing to engage in that debate. His ongoing talk of a “grand...

Paul Ryan Still Wants to Dismantle Government

Gage Skidmore / Flickr
As he has in years past, Wisconsin Representative Paul Ryan presented his latest budget as a necessary step—the only thing we have to avert a destructive debt crisis. It may be painful to turn Medicare into a voucher program, cut spending on social services, and devolve Medicaid into a block grant for the states, but it's the only choice we have to avoid catastrophe. Here's Ryan in his own words: Unless we change course, we will have a debt crisis. Pressed for cash, the government will take the easy way out: It will crank up the printing presses. The final stage of this intergenerational theft will be the debasement of our currency. Government will cheat us of our just rewards. Our finances will collapse. The economy will stall. The safety net will unravel. And the most vulnerable will suffer. The problem, of course, is that we're not facing a debt crisis. Interest rates haven't spiked, and markets are still happy to lend the United States cash at astonishingly good rates. Our economy...

All Wall Street Regulators Should be Self-Funded

Systemic RIsk Council.org
When a crew that calls themselves the "Systemic Risk Council" speaks, it's a good idea to pay attention. After all, the last time people pooh-poohed deep-seated problems within the financial system, trillions of dollars vanished into thin air and millions of people were thrown out of work. Since its creation last year by the Pew Charitable Trusts and CFA Institute, the Systemic Risk Council —which is chaired by former FDIC head Sheila Bair and advised by Paul Volcker—has sought to keep up the pressure for financial reform. That's important because a) many of the rules mandated by Dodd-Frank haven't actually been written yet; b) Wall Street is working every day to weaken that law; and c) additional reforms, beyond Dodd-Frank, are still needed. Yet unfortunately, as Thomas Hedges wrote recently here in Policyshop, sequestration cuts are going to set back the entire process of financial regulation. The SEC and CFTC were already struggling to find the staff capacity to write mandated...

The Fundamentals of Immigration Reform

T he United States, with more than 40 million foreign-born, a number that includes the estimated 11 million illegal residents, is not just the largest immigration player in the world; it’s larger than the next four largest players combined. Because immigration amounts to social engineering, how well we do it has profound consequences for huge swaths of our society, from education to health care to economic growth to foreign relations. Most important, how a country treats its immigrants is a powerful statement to the world about its values and the principles by which it stands. Related Content Spotlight: The Fundamentals of Immigration Reform Demetrios Papademetriou talks about what's next for reforming our broken immigration system. On all these counts, recent U.S. immigration policy has been more notable for its failures than its successes. Almost half a century ago, in 1965, we reversed the discriminatory policies that over the course of the previous 80 years had either barred or...

Tyranny of the Minority

Jamelle Bouie
Jamelle Bouie Adam Liptak, writing for The New York Times , has a long feature on Senate malapportionment , political science shorthand for the fact of unequal representation in the upper chamber of Congress. Our system has always had a small state bias, hence the Senate—a powerful body where each state gets equal representation—and the Electoral College, a variation on the same. But as large states grow larger—and small states stay small—that bias has become a decisive advantage that benefits Republicans—who tend to represent smaller states—over their Democratic counterparts. The Times has more: Beyond the filibuster, senators from Wyoming and other small states regularly oppose and often thwart programs popular in states with vastly bigger populations. The 38 million people who live in the nation’s 22 smallest states, including Wyoming, are represented by 44 senators. The 38 million residents of California are represented by two senators. In one of every 10 especially consequential...

Gone In 22 Seconds: How Frequent is High Frequency Trading?

Flickr/Ars Electronica
This is a story of journalists and economists, and the confusion that can ensue when they communicate. For me, the story starts with a book, Dark Pools , written by Wall Street Journal Reporter Scott Patterson. The book, published in the summer of 2012, is an account of the rise of high-frequency trading or “HFT.” That is automated trading of securities and derivatives using powerful computers driven by complex algorithms. It is widely accepted that trading activity in most markets is dominated by HFT. Firms that specialize in this practice trade in enormous volumes but start and end the day with few if any holdings. Their purpose is to profit from intra-day market moves, not from fundamental investment. They buy and sell in the blink of an eye, churning the markets constantly. Mr. Patterson’s book contains the following passage: At the end of World War II, the average holding period for a stock was four years. By 2000, it was eight months. By 2008, it was two months. And by 2011, it...

The Paul Ryan Medicare Shuffle

Jamelle Bouie
Jamelle Bouie / The American Prospect He still doesn't care about poor people. When Wisconsin Representative Paul Ryan ran for vice president last year, he campaigned against the $716 billion Medicare cut in the Affordable Care Act, calling it a "raid" on the program. "Medicare should not be used as a piggy bank for 'Obamacare,'" said Ryan last August , after joining the Romney campaign, "Medicare should be used to be the promise that it made to our current seniors. Period. End of Story." This was the whole of Ryan's message on Medicare, which included an ad that combined scaremongering with a fair amount of racial resentment: But Ryan's message has always had two problems. First, President Obama's cuts to Medicare are on the provider side; he's reducing payments to hospitals and doctors in order to fund better benefits for seniors and cover low-income people under the Affordable Care Act. And second, by shrinking the pool of Medicare recipients to the oldest and the sickest, Ryan's...

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