O.K., Smart Guys: Fix the Energy Problem How should the U.S. solve its energy problems? The experts brainstorm

Norman Pearlstine, Thomas Kuhn, Bob Shapard, Carol Browner, Jigar Shah, and T. Boone Pickens Henry Leutwyler
This Week

August 1, 2011
Why the Debt Crisis Is Even Worse Than You Think

The U.S. first became a net importer of oil in 1948. The intervening decades have led Americans down a steady path of price spikes, shortages, and compromised foreign policy decisions. Imported fuel means expensive gasoline, lost jobs, and hobbled industries, while climate change poses risks as dramatic as they are difficult to assess. So how do we fix our fuel and energy problems? To answer that question—the first in a quarterly series called Fix This—Bloomberg Businessweek Chairman Norman Pearlstine gathered BP Capital Management’s T. Boone Pickens; Bob Shapard, chairman and chief executive officer of Oncor Electric Delivery and chairman of GridWise Alliance; Carol Browner, former director of the White House Office of Energy and Climate Change Policy for President Obama and EPA administrator for President Clinton; Jigar Shah, CEO of the Carbon War Room; and Thomas Kuhn, president of Edison Electric Institute. Their conversation has been condensed and edited.


What do we mean when we talk about an energy crisis? Is that an appropriate term for framing this discussion?

Shah: The word energy is very confusing. Energy includes both transportation fuel—which I think people are very concerned about—and coal, solar, wind, and other things that produce electricity. People confuse the two, and while we have fast-rising prices of electricity—5 percent rate increases per year since 2000—the fourfold increase in oil prices since 1999 is a much bigger problem in terms of economics than our electricity problem.

Shapard: People perceive there to be a crisis in this country environmentally with carbon and other emissions. I think transportation is the place you go for the biggest impact, and I think it’s a combination of natural gas and electricity that can solve our transportation problem. You can convert a significant portion of our fleet to natural gas and/or electricity. It addresses our dependence on foreign oil, but just as importantly it addresses the environmental issues. While coal plants and power plants are viewed as the villain when it comes to carbon, [giving off] 39 percent of the emissions, 31 percent of the emissions are [from] cars, and the important point is we know the solution on cars.

Kuhn: Never in the history of the world have we been so dependent upon one commodity as we are on oil right now, and every recession has been preceded by a spike in the price of oil. A $10 increase in oil causes $75 billion to come out of this economy. There are a lot of electric cars that are going on the road all over the world, in India, China, and elsewhere. I drive a Chevy Volt. I haven’t visited a gas station in three months. I plug in, I drive at 2¢ a mile compared with 10¢ to 12¢ a mile—that’s about $1 a gallon equivalent.

Browner: One of the first things we did when [President] Obama came to office was set the first fuel-efficiency standards in almost 20 years. We said we can make cars more efficient, and that’s been making our automotive industry stronger.

Pickens: If you remember, President Obama, when he got the nomination, said in 10 years we will not import any oil from the Mideast. I was impressed with that. It’s different than all the other people that ran for President. They said elect me, and we’ll be energy independent. So I thought he’s got a plan, and I hope that he does have a plan.

If there’s a consensus here that we don’t have to be reliant on imported oil, why are we?

Browner: Some of these changes will require congressional action, because what we need to do is give the private sector the certainty and the predictability so that they’ll make the large-scale investments in these changes. They don’t want to start making investments where they think I’m going to build something but I’m not able to sell it.

Shah: Just to be slightly argumentative, I think we were in exactly the same place for both electricity and transportation in the 1970s. For electricity, we opened up that market. I started one of the largest solar companies in the U.S. We had that opportunity because we had net metering, we had streamlined interconnection standards, we had all sorts of ways for us to connect to the grid and actually provide [a new service to] customers who were dissatisfied with the services they were already being provided. Today if you own a gas station, you’re most likely under a franchise agreement with a large oil company that doesn’t allow you to add an alternative fuel station without their permission.

You talk to people in Washington all the time, Boone. Does anybody understand the problem well enough to know how to address it?

Pickens: Get yourself a crisis, and then something will come out of Congress. But we’re sitting here with a bill ready to go in the house, HR1380. [Editor’s note: HR1380 would amend the tax code to encourage investment in alternative energy.] There are 250 million vehicles in America: All I’m trying to address is 8 million 18-wheelers. Go to the past 10 years, and look at our costs with OPEC—$1 trillion in 10 years. The largest transfer of wealth from one group to another. Now go forward 10 years and take [the price of] $100 a barrel forward, which I think is being extremely conservative. That’s $2.2 trillion. Just take the 18-wheelers, that’s 2.5 million barrels a day. Now the $2.2 trillion that we’re going to pay 10 years in the future. … You cut OPEC in half with 8 million vehicles.

Browner: Between what Mr. Pickens has been talking about in terms of the long-haul vehicles and the commitment on electric cars, it would be a huge change in our fleet in this country.

Pickens: Don’t call me Mr. Pickens, O.K.? It makes me feel old when you do that.

Browner: Well, it’s respectful.

Is technology a place that can give us clean or cleaner coal or allow us to do more aggressive fracking for natural gas?

Browner: I personally think the natural gas industry needs to be fully transparent. What scares people is what they don’t know. Right now [fracking] is regulated differently in different states, and I think if the industry would join together and say we’re going to disclose exactly what we’re doing, we’re going to take a giant step forward.

On energy, we certainly know a lot of things that we could do very, very quickly. Energy efficiency is not complicated. There’s a nice little company in Washington, Opower, that works with utilities to send the customer an explanation of how much electricity they’re using in comparison to their neighbors, and you know what the effect of that is? People stop using as much electricity. They don’t want to be less efficient than their neighbors are, and they’re able to achieve a 1 percent to 3.5 percent reduction.

Shapard: If we could reduce electricity consumption by 10 percent, you’d save $25 billion a year in energy costs, you’d reduce CO₂ by about what you get in 10 percent electric vehicle penetration. The problem is people don’t know how to do it. Think about the way you buy electricity today. It’s like going to the grocery store, throwing groceries in your bag, walking out the front door, and once a month the grocer sends you a bill for $800. You didn’t break down eggs from milk from bacon. That’s the way you get electricity, just a big lump bill. If we can give you real-time feedback, studies have shown you’ll use less, you’ll use it smarter.

Shah: I love Opower, but ultimately energy efficiency through individual action is just people spending money out of their own pocket. [It] hasn’t worked for 35 years. I really don’t believe it.

Browner: People make wise decisions when they have access to information. Do you know what percentage of people now use a seat belt? It’s over 90 percent.

Shah: But it’s mandated. There’s a law.

Browner: We got there by educating people.

When we talk about the automotive industry, is the change going to come out of Detroit?

Browner: It’s going to come through the regulators. What regulations do is they create market opportunities for the capital investments, because they create predictability and certainty. When the President said all cars are going to be 35 miles per gallon for the average fleet by 2017, the automotive industry knew what kind of investments they needed to make.

Shah: Here’s one thing that we don’t have in transportation, which I think is critical: There is almost no way in hell that you’re going to get an entrepreneur into transportation. There’s at least 15 different engine technologies that have been invented since the 1960s, but only someone with 50 full-time regulatory affairs people can actually get through the National Transportation Safety Board, through all the EPA regulations, and all of the other things to actually bring a new car to market. Like the group that won the X Prize, right? That’s an actual gasoline-powered vehicle that goes 120 miles to the gallon, and it’s an extraordinary engineering feat. I guarantee you that thing is never going to come to market.

What can we look to that can change the equation in terms of electric vehicles?

Kuhn: Battery technology is making major advancements. Lithium ion batteries [are] coming from a lot of government-supported research with the automobile companies and other companies around the world.

Pickens: Well, don’t end up on a Chinese battery.

Shapard: Even the auto companies are telling us that within five years the price of these batteries could drop in half and the functionality grow.

Shah: But the beauty of the electric vehicle is the business model innovation. There [are] 17 things that you can do that I’ve counted, and you might be able to do more, with an electric battery as an electric utility. The grid’s got to stay at 60 hertz to keep everything running well, and you can use batteries to do this instead of spending reserves with natural gas, which is far more expensive.

Browner: So what you’re saying is when I’m not driving, my car would become part of the electric utility system?

Shah: In California their peak demand for electricity is roughly 60,000 megawatts. If you have 250,000 electric cars, just 250,000 out of 30 million cars they probably have over there, at 20 kilowatts a piece, which is what a lot of these full electric cars are, that’s 5,000Mw. So you now have one-twelfth of the entire grid of storage.

The problem is people go to the dealership and will never buy an electric vehicle. So what you have to do, and entrepreneurs are doing this now, is convert these into vehicle services contracts. You say here’s a free car, just pay me $400 a month, which is what you would have paid for your lease payment, and I’ll get the $4,000 a year out of the utility because you don’t want to deal with the paperwork.

Open thread: Senate to vote on debt bill at 1 p.m., or maybe not

posted at 12:09 pm on July 31, 2011 by Allahpundit
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They’re supposed to vote at 1 p.m., but according to Plouffe and another “Democrat familiar with the situation,” there’s still no bill. What’s the hold up? In all likelihood, they’re haggling over the “triggers” that’ll happen if the new Super Commission can’t agree on, or Congress won’t accept, new deficit reduction proposals later this year. Jen Rubin’s hearing the following from a Republican source on the Hill:

The second tranche works like this: If a new congressional commission introduces a plan totaling at least $1.5 trillion in cuts by Thanksgiving and it’s passed by Christmas there are no across-the-board cuts. Or, if a balanced budget amendment is passed and sent to the states, then across-the-board cuts are avoided. However, if there is no commission package passed AND the BBA is not passed and sent to the states, then across-the-board cuts of $1.2 trillion including Medicare and defense (the details of which aren’t final) go into effect. If the across-the board-cuts go into effect, the debt ceiling is only raised $1.2 trillion (likely insufficient to keep the government operating for long), meaning “we could do this all over again, depending on economic growth.” In other words, if we went to sequestration the total debt ceiling increase would be $2.1 trillion in two doses.

So there’s the BBA concession: Democrats can avoid new cuts in the second stage entirely if they pass the amendment. As for the automatic Medicare/Pentagon reductions, that’s obviously designed to make both sides in Congress think twice before rejecting the Super Commission’s recommendations. The precise formula for that is still being negotiated too. According to Jake Tapper, the White House wants fully 50 percent of the automatic cuts to affect the Pentagon and 50 percent to be spread across various other discretionary programs. GOP hawks won’t go for that, especially since the only alternative might be approving a Commission package that includes new revenues.

As I write this, the Senate has just begun its session and Reid is insisting that they’re “cautiously optimistic” about a deal but not there yet. Here’s your thread for tracking today’s drama. Exit question: How many Republican and Democratic votes will this bargain get in the House? Progressives are reportedly already murmuring about balking because of the lack of revenue in the deal, which means Boehner will need a majority of his previous Republican majority on yesterday’s vote to get this through. (Here’s one vote forecast.) I wonder if they’ll do it on the first try or, a la TARP, if it’ll take a market panic and subsequent re-vote to get it done. Stand by for updates.

Update: The post-deal spin starts before the deal is even struck:

“I don’t think we’ve been hurt at all,” McConnell said on CBS’ ‘Face the Nation’.

“The American people wanted us to do something about out-of-control spending and … the debt ceiling is going to produce what many people would believe is a complete change in the trajectory of the federal government beginning to get spending under control,” said McConnell, who is likely to be largely responsible for any package that wins muster with Congress.

Update: John Bolton sounds the alarm for hawks:

Every indication is that the debt-ceiling negotiations are leaving the defense budget in grave jeopardy. By exposing critical defense programs to disproportionate cuts as part of the “trigger mechanism,” there is a clear risk that key defense programs will be hollowed out.

While the trigger mechanism comes into play only if the Congressional negotiators fail to reach agreement on the second phase of spending cuts, it verges on catastrophe to take such a national security risk.

Defense has already taken hugely disproportionate cuts under President Obama, and there is simply no basis for expanding those cuts further. Republican negotiators must hold the line, since the Obama Administration plainly will no

Deal update: $2.4T in cuts and ceiling hikes — both in two parts

posted at 8:42 am on July 31, 2011 by Ed Morrissey
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ABC reports this morning that Congressional leaders have already begun briefing their caucuses on the eleventh-hour deal that emerged from the White House last night. Jonathan Karl notes that the deal is contingent on getting enough support from each House caucus to form a majority, and in the Senate to avoid a filibuster. We’ll come back to that in a moment, but Karl also updates the story on the deal. The topline numbers are apparently $2.4 trillion in matching spending cuts and debt-ceiling raises instead of $2.8 trillion, but now both are split into two parts:

The current framework would give the president the authority to raise the debt ceiling in two parts: roughly half of it now and the balance at the end of the year.

Each increase would be subject to a Congressional resolution of disapproval.

If Congress voted to disapprove that increase, however, the President could veto their disapproval.

The AP reported earlier on the $2.4 trillion number, too, although they say the cuts will be “slightly more” than the debt-ceiling boost. That’s still enough to get Barack Obama past the 2012 election, but not by much. It guarantees that the debt ceiling will be a 2012 election issue, although by now that was a given anyway.

However, the added McConnell wrinkle is interesting — and potentially a big win for Republicans. Essentially, Republicans get to claim credit for the cuts while laying blame for the debt increases on Obama. If they “disapprove,” Obama will veto the disapproval and end up owning all of the political baggage for the debt-ceiling increases. That’s a steep price to pay for Obama just to protect himself through the next election, although he could turn it on its ear and refuse to veto the second increase disapproval and force this fight all over again. That would, however, put the country back in “crisis” mode, and that would still be all on Obama.

This brings the deal closer to what I predicted yesterday; in fact, it almost matches it exactly. But can the leaders get the votes for it? If Obama endorses this deal, most Democrats will have no choice but to back it; after all, they have been doing the most Chicken Little screeching about the consequences of legislative failure. Boehner and McConnell will lose a significant number of Republicans, but both will probably hold a majority of their caucuses. I’d expect an agreement along these lines to pass quickly through Congress, maybe fast enough to avoid having to pass a $50 billion, two-week extension to gain time for the debate.

Update: Added “ceiling” to headline for more clarity.

Update II: McConnell tells CNN that they are “very close” to a deal. I’d interpret that to mean that they’re shopping the deal to the caucuses to make sure they can get the votes.

Reid postpones vote to “give everyone as much room as possible” for deal; Update: $2.8T in cuts and debt-ceiling boost, no tax hike?

posted at 11:45 pm on July 30, 2011 by Ed Morrissey
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The late breaking news from the nation’s capital tonight is that the late-breaking news from the capital early tomorrow morning has been postponed:

Senate Majority Leader Harry Reid (D-Nev.) announced shortly after 10 p.m. Sunday that he would postpone a vote on his bill to raise the debt limit to give negotiators at the White House more time to work.

He said the Senate would vote on his plan at 1:00 p.m. Sunday, instead of 1:00 a.m., as was originally scheduled. …

“I believe we should give everyone as much room as possible to do their work,” he said. “I spoke to the White House, quite a few times this evening, and they’ve asked me to give everyone as much time as possible to reach an agreement if one can be reached.”

The Senate adjourned at 10:13 p.m. Saturday and will reconvene at noon Sunday.

Translastion: The remarks by John Boehner and Mitch McConnell earlier today appear to have been accurate. CBS’ Mark Knoller had been tweeting earlier that Dan Pfeiffer was poo-pooing the notion that a deal was brewing, but that he has “covered WH long enough to know when pool kept late on Sat night something’s going on.” And as I predicted earlier tonight, the first stage may be a very short-term debt-limit increase to get time to finalize a deal:

If they get a tentative deal, Pres Obama will agree to short term extension of debt limit to allow time to enact deal.

If Obama told Reid to extend the vote for another 12 hours, then the White House must figure that they’re close to a deal.

Update: Jimmie Bise links to ABC, which reports the tentative parameters of the deal:
Debt ceiling increase of up to $2.8 trillion
Spending cuts of roughly $1 trillion
Vote on the Balanced Budget Amendment
Special committee to recommend cuts of $1.8 trillion (or whatever it takes to add up to the total of the debt ceiling increase)
Committee must make recommendations before Thanksgiving recess
If Congress does not approve those cuts by late December, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare.

So Obama gets all of the increase in one fell swoop, but no tax hikes, apparently, plus a total of $2.8 trillion in reductions for projected spending (none of the plans actually made cuts in spending) in areas guaranteed to hurt both parties. The vote on the BBA is a win for Boehner, but only in the sense that Republicans get Democrats on the record for opposing it. It’s a deal we could have reached two weeks ago, but were never going to reach until time ran out.

Update II: Via Jeff Dunetz, National Journal’s Major Garrett also gets a similar story from his sources, but the news is a little better:
2.8 trillion in deficit reduction with $1 trillion locked in through discretionary spending caps over 10 years and the remainder determined by a so-called super committee.
The Super Committee must report precise deficit-reduction proposals by Thanksgiving.
The Super Committee would have to propose $1.8 trillion spending cuts to achieve that amount of deficit reduction over 10 years.
If the Super Committee fails, Congress must send a balanced-budget amendment to the states for ratification. If that doesn’t happen, across-the-board spending cuts would go into effect and could touch Medicare and defense spending.
No net new tax revenue would be part of the special committee’s deliberations.

I expect plenty of hyperventilating at the term “Super Committee,” but it’s basically the kind of ad hoc committee that Congress can authorize at any time. It sounds a lot like the BRAC process used by Congress to identify military bases for closure. The prohibition on net tax revenue gains is a big, big win for Republicans if it holds. I should note that Jimmie Bise in his post believes that the second round of cuts might be actual cuts; if so, then this is an even bigger win.

Note too that the second round of cuts appears to be guaranteed; if the Super Commission can’t agree on specific and precise reductions, then an across-the-board cut goes into place.

Update III: Jen Rubin hears the same deal from the offices of two “senior” Republicans on the Hill.

Sixth Quarter of Gains for Yuan

The Chinese yuan posted the sixth straight quarterly gain on the speculation that China will allow the currency to appreciate faster in order to slow growth of consumer prices.

The People’s Bank of China increased the reference rate for the yuan to 6.4716 per dollar today, allowing the currency to fluctuate 0.5 percent in either side of the target. Li Daokui, the adviser to the central bank, explained the rise of prices in June by higher costs of agricultural products and pork. China Securities Journal said today, citing the State Information Center, the inflation is estimated to be 5.3 percent in the first half of 2011 and about 4.9 percent for the whole year.

USD/CNY traded at 6.4648 today as of 11:22 GMT, fluctuating near its opening rate of 6.4644, after rising as high as 6.4680 and falling as low as 6.4625.

If you have any questions, comments or opinions regarding the Chinese Yuan, feel free to post them using the commentary form below.

Earlier News About the Chinese Yuan:
» Yuan Appreciates Above 6.5 vs. USD for a Short Time (2011-04-29)
» Chinese Yuan Appreciates with Other Asian Currencies (2011-04-02)
» China Allows Yuan Appreciate, Can It Do So? (2011-01-12)
» Yuan Rises Beyond 6.6 per Dollar as China Battles Inflation (2010-12-31)
» Can Yuan's Gains Be Limited by Demands for Slower Appreciation? (2010-12-29)

Sexy Hwang Mi Hee [황미희]

Dollar Falls on US Growth Slowdown

The US dollar fell sharply against some of the major currencies today, following a report that showed that the economic growth in the second quarter of 2011 was worse than expected.

The greenback was trading at a rather high level against the other currencies earlier today, advancing significantly both against the euro and the Great Britain pound before 12:30 GMT today. Following the US GDP report, it slid to bearish against the euro and trades almost in the negative zone against the pound. The dollar is also down against the Japanese yen and the Swiss franc.

The gross domestic product increased at an annual rate of 1.3 percent in the Q2 2011 from the Q1 2011. The first quarter growth was revised down from 1.9 percent to 0.4 percent. The traders expected 1.8 percent gain in GDP on average. This news is very pessimistic in regards of the possible rate increases in the United States and thus is extremely negative for the US dollar.

EUR/USD went up from 1.4327 to 1.4333 as of 13:09 GMT, trading as low as 1.4229 earlier. GBP/USD is now trading near its opening level — 1.6369. USD/JPY fell from 77.69 to 77.14 today.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:
» Continued Debates over US Debt Push USD to New Lows vs. CHF (2011-07-25)
» Optimism for Europe Returns, Greenback Suffers (2011-07-20)
» Dollar Rises on Signs of Agreement Among US Lawmakers (2011-07-19)
» S&P Warn About Possible Downgrade of US Rating, USD Down (2011-07-15)
» Dollar Regains Strength as Bernanke Speaks (2011-07-14)


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What’s so wrong with Reid’s bill?

posted at 2:45 pm on July 29, 2011 by Tina Korbe
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House Speaker John Boehner’s debt-ceiling-and-deficit-reduction bill, now through Revision Round 2 and headed for likely passage, has hogged most media attention over the past few days, but, with Senate Majority Leader Harry Reid now touting his bill as “the only compromise there is,” the lesser-known parts of Reid’s proposal deserve a little bit of attention.

First and most importantly, the bill actually explicitly seeks to excuse the Senate from passing a budget resolution for the next two years. Reid and Senate Democrats have enjoyed a more-than-800-day vacation from crafting a budget in the first place, but that’s just not enough – never mind that the law requires the Senate to pass a budget every year. So, how does the Reid plan enable the Senate to skirt its responsibility even further? It “deems” a budget for this year and next year.

Sen. Jeff Sessions (R-Ala.) explained today on the Senate floor just what this means:

The Reid amendment to increase the debt limit deems two consecutive budget resolutions for fiscal years 2012 and 2013. In other words, it basically takes over the budget process and sets the basic spending number. Does the president think the Senate should go two more years without crafting or passing a budget? We’ve already gone two. The Reid amendment sets spending allocations for most Senate committees at the Congressional Budget Office’s rising baseline. … So it just says we’re going to deem the amount we spend, what C.B.O. has projected our growth and spending to be. And C.B.O. projects growth in spending. They don’t set that as right for America, but they project that’s what will occur under current circumstances. … So without hearings or debate on these allocations, this provision would provide a further excuse for avoiding a budget and increase the likelihood … the Congressional Budget Act will be violated for the third straight year. This is an abrogation of the responsibilities of the Senate and of the Budget Committee of the United States Senate. We were not elected to the Senate and chosen to serve on the Committee on the Budget … to see most of the budget levels automatically raised based on a set of spending growth projections by some apparachix in the C.B.O.

Sessions is right. It is an abrogation of responsibility — and one that’s been little remarked upon in discussion of Reid’s amendment.

Next, Reid’s bill boasts the largest debt increase in U.S. history — $2.7 trillion. Up to now, the most sizable increase has been $1.9 trillion (also an Obama increase). Debt ceiling increases might be routine — but hikes of this magnitude are not. Far better — and, frankly, more in line with precedent — to split that increase into two “smaller” amounts (even split in half, the increase is monstrous!).

Finally, as has been repeatedly pointed out, the savings in Reid’s bill aren’t exactly real. Reid touts dollar-for-dollar savings, but that’s a ruse. The bill actually delivers just $1 trillion in cuts in exchange for that unprecedented $2.7 trillion increase. The Global War on Terror savings are a gimmick. The administration has never requested current levels of funding for the war for the next ten years (i.e. the administration has never planned to spend $160 billion each year on the war for the next 10 years). Not funding what the administration was never going to fund doesn’t qualify as a cut.

Yet, Reid still claims his bill represents a compromise, whereas Boehner’s bill does not. Here he is today, making it sound as though he’s doing a favor to moderate Republicans who recoil from the lack of compromise Boehner has put forth:

Right now, this is the only compromise there is. … What is being done in the House is not a compromise. It’s being jammed through there with all kinds of non-transparent dealings. We’re recognizing the only compromise there is, is mine. Ours is truly a bipartisan piece of legislation. Republicans realize that. I’ve had a number of Republicans come to me. I had one Republican come to me and say, “Thank you” for your legislation. … I’ve asked my friend Sen. McConnell to meet with me and try to work this out. … The stakes couldn’t be higher. The security of our nation, every family, is at stake here. If the debt ceiling is not increased, every American family will feel an increase in their taxes, all their payments, credit cards, loans that they’ve taken out for their children to go to college, car payments, mortgages on their houses. So I say here to my Republican colleagues in the Senate to put the American people first. … The people we all represent want us to come together.

But what does the bill offer that Republicans want? Equivalent cuts? No. Enforceable future cuts? No. A vote on a balanced budget amendment? Certainly not.

Why aren’t House Republicans writing Reid a letter to say they won’t support his bill if it makes it to the House? Why isn’t Boehner saying it’s DOA?

Reid changing debt-ceiling plan to woo Republicans

posted at 10:00 am on July 30, 2011 by Ed Morrissey
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After yesterday’s embarrassing plea to Mitch McConnell to save him from a cloture vote, Harry Reid went back to the drawing board. The Hill reports that Reid has altered his plan to raise the debt ceiling by borrowing more from the plans of McConnell and John Boehner, hoping to shake loose enough Republicans to get past the procedural hurdle:

The biggest change is that Reid would give the president almost unilateral power to raise the debt limit, borrowing an idea introduced by Senate Republican Leader Mitch McConnell (R-Ky.).

Reid would have President Obama request a $2.4 trillion debt-limit increase in two installments of $1.2 trillion each. The requests would be subject to congressional resolutions of disapproval, but these would do little to restrict the president.

Obama could veto any resolution of disapproval, and it would take a two-thirds vote in both chambers of Congress to override him.

According to a Senate Democratic aide, Reid also increased the total level of spending cuts from $2.2 trillion to $2.4 trillion, in part by using the January baseline — a budget maneuver House Speaker John Boehner (R-Ohio) used on a previous version of his debt-limit plan. The January budget baseline does not count cuts Congress implemented in legislation passed this spring to avert a government shutdown.

The McConnell mechanism wouldn’t stop Obama from raising the debt ceiling limit in the next installment, but Republicans might be more inclined to see that as a bug rather than a feature by now. The “cuts” – such as they are – would come up front, with the possibility for getting more cuts down the line. Obama would have to raise the limit himself, and Republicans in both chambers would be able to vote against it, forcing Democrats to own the hikes. It’s not pretty, but it would set up the debate in 2012 as well as can be expected for the GOP at this point.

Reid also is rumored to be offering a vote on a balanced budget amendment as a sweetener for Republicans in the Senate, although not requiring passage. That’s also a good development for the GOP. A properly written amendment would force Congress to control spending rather than raise taxes by limiting the federal budget to a constant percentage of GDP. If Democrats vote such a plan down, it’s yet another point for the 2012 debate.

However, according to The Daily Caller’s Amanda Carey and the Republicans on the Senate Budget Committee, the Reid plan has a big and unpleasant surprise for Republicans on taxes. Reid’s figures rely on current law — and current law has all of the Bush-era tax rates expiring and rising to their previous levels. It also assumes that Congress won’t provide a “patch” for the AMT:

Reid’s proposal includes a provision that “deems” budget resolutions for fiscal years 2012 and 2013, but Senate Democrats have not yet produced a 2012 budget proposal, much less one for 2013.

Within those anticipated budget resolutions lie the tax increases, according to the analysis, and here is where it gets tricky.

When the Congressional Budget Office scores a proposal, it uses either current policy or current law as its baseline. Reid’s bill is based on current law, which assumes certain tax breaks will expire according to pre-determined scheduled. That is a big deal.

The 2001–2003 Bush tax cuts are set to expire at the end of 2012. And some business tax breaks, “death tax” cuts, and the patch for the Alternative Minimum Tax expire at the end of 2011. Reid’s proposal assumes that Congress will not act to renew or extend those expiring tax breaks.

Total tax hike over 10 years, according to the GOP analysis? $3.8 trillion. And those would not just be tax hikes on the “wealthy,” either. Those tax hikes would hit the middle class like a freight train, both on basic rates and the AMT creep that Congress has parried for years. If this analysis is correct, Reid either wants to hit the US with the biggest tax hike in its history, or he’s offering bogus deficit reduction that will never occur.

If this sounds like a bad deal to you, keeping in mind what Tina wrote yesterday as well, then it just shows that you’re paying attention. It could get worse, though, as this Star Wars parody shows:

Tech-savvy president wages Twitter campaign against GOP, loses 36,000+ followers

posted at 7:30 pm on July 29, 2011 by Allahpundit
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Unexpectedly.

President Obama created a barrage of activity on Twitter on Friday afternoon when he began urging his more than 9 million followers to tweet at their Republican Congressmen to “ask them to support a bipartisan solution to the deficit crisis.”

The @BarackObama account then preceded to tweet out the Twitter handles of Republican Congressmen state-by-state. The account has also been making use of the hashtag #compromise in an effort to drive home the message of bipartisanship…

As we noted in our earlier coverage, however, some users felt the state-by-state tweets were creating way too much noise — the President has lost nearly 37,000 followers so far today.

To put it another way, he lost twice as many followers today as jobs created last month. Go have a look at his Twitter feed. His staff was beaming out the Twitter handles of congressional Republicans every few minutes for six hours. They could have achieved the same thing by tweeting this once every half-hour, say, until the House vote finally began. And the dumbest part? The congressmen they were targeting were trying to compromise by passing Boehner’s bill and advancing the ball so that a deal can be struck before Tuesday. If anyone needed lobbying to “compromise,” it was the 22 Republican tea-party holdouts.

But that’s not the punchline. This is:

But could this strategy have an unintended consequence for the president? With 9.4 million followers, Obama’s campaign account is one of the most followed. Mentioning GOP foes to Obama’s followers could help boost their followings on Twitter.

By midafternoon on Friday, that seemed to be the case.

A Senate Republican staffer told National Journal that Republican Senators, in total, added about 6,500 new followers throughout the afternoon.

Said one polisci professor, “It’s the cyber-equivalent of pre-printed postcards — totally ineffectual.” Exit quotation from one Twitter user who got tired of being spammed: “I just unfollowed @barackobama seemed like a good #compromise.”

Dollar Falls on US Growth Slowdown

US DollarThe US dollar fell sharply against some of the major currencies today, following a report that showed that the economic growth in the second quarter of 2011 was worse than expected.

The greenback was trading at a rather high level against the other currencies earlier today, advancing significantly both against the euro and the Great Britain pound before 12:30 GMT today. Following the US GDP report, it slid to bearish against the euro and trades almost in the negative zone against the pound. The dollar is also down against the Japanese yen and the Swiss franc.

The gross domestic product increased at an annual rate of 1.3 percent in the Q2 2011 from the Q1 2011. The first quarter growth was revised down from 1.9 percent to 0.4 percent. The traders expected 1.8 percent gain in GDP on average. This news is very pessimistic in regards of the possible rate increases in the United States and thus is extremely negative for the US dollar.

EUR/USD went up from 1.4327 to 1.4333 as of 13:09 GMT, trading as low as 1.4229 earlier. GBP/USD is now trading near its opening level — 1.6369. USD/JPY fell from 77.69 to 77.14 today.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

Earlier News About the US Dollar:

    Continued Debates over US Debt Push USD to New Lows vs. CHF (2011-07-25)
    Optimism for Europe Returns, Greenback Suffers (2011-07-20)
    Dollar Rises on Signs of Agreement Among US Lawmakers (2011-07-19)
    S&P Warn About Possible Downgrade of US Rating, USD Down (2011-07-15)
    Dollar Regains Strength as Bernanke Speaks (2011-07-14)

Euro Slids for Second Day on Debt Crisis Concern

EuroThe euro fell against all of its major counterparts today, as the fear of the debt crisis spreading beyond Greece and other troubled countries of the Eurozone.

The euro is currently demonstrating a second bearish day in a row against the US dollar, the Great Britain pound and the Japanese yen. It is falling against the dollar despite the stalemate in the US debt-limit discussions, which may lead to a technical default on August 2.

Greece’s long-term sovereign credit rating was reduced to CC by Standard & Poor’s yesterday. It was also reported by the agency that the proposed measures (by the European Union) will push the rating to SD (selective default), as it will result in losses for the commercial creditors. Meanwhile, Moody’s downgraded Cyrpus from A2 to Baa1 with a negative outlook on its government bonds.

EUR/USD fell from 1.4368 to 1.4304 as of 17:12 GMT; it traded as low as 1.4254 earlier today. Yesterday, the pair opened at 1.4512. EUR/GBP declined from 0.8797 to 0.8756 and EUR/JPY decreased from 111.93 to 111.36.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Earlier News About the Euro:

    Euro Posts Weekly Gain After Two Weeks of Losses (2011-07-23)
    Euro Drops as Optimism Caused by EU Summit Wanes (2011-07-22)
    Euro Jumps as EU Leaders Make Plan to Help Greece (2011-07-21)
    Is Agreement Among European Leaders Attainable? Perhaps (2011-07-19)
    Bad Monday for Euro (2011-07-18)

Reid: Hey, who’s up for killing another debt-ceiling increase?

posted at 2:30 pm on July 28, 2011 by Ed Morrissey
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Must be nice to have a job that doesn’t actually require any work, except to refuse to work at all:

House Republicans are just wasting their time debating Speaker John Boehner’s debt reduction bill, Senate Majority Leader Harry Reid said today.

“Boehner’s bill dies tonight,” Reid communications director Adam Jentleson wrote on Twitter. “Forever.” …

“As soon as the House completes its vote, the Senate will move to take up that bill,” Reid said, “and it will be defeated tonight.”

“No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now,” he said.

To which the answer should be: “Where’s the Senate plan?” The Politico article has Harry Reid standing in front of a display that reads, “In the battle of budget scores, Senate plan is a clear winner over Boehner plan.” That was certainly true of the Boehner 1.0 plan, but it’s less clear that it’s true about Boehner 1.1. Either way, Reid’s bill only reduced actual spending by $750 billion rather than Boehner 1.0′s $710 billion over a ten-year period, so neither was exceptionally robust in scoring. It’s a bit like bragging about winning a football game when the only score comes off of a safety.

But that argument assumes the Senate will actually produce a plan. So far, even though Reid controls the majority and the floor, we haven’t even seen a hint of a vote. In fact, we haven’t seen the Senate originate any budget bill in over 800 days. Since Reid’s plan doesn’t include new taxes — or at least that’s his claim — it doesn’t have to originate in the House.

The proper legislative process should be for both chambers to work on their own versions of legislation and form a conference committee to produce a bill for up-or-down votes in each chamber. Reid could have done that with the CCB bill, had he chosen to do so, although there would have been very few commonalities between a Senate response and the CCB around which to compromise. That’s not true of the Boehner 1.1 bill; as National Journal noted yesterday, they have quite a bit in common, including the level of cuts. All that needs to happen is to get the Senate to pass its bill and let the conference committee hammer it out. That can even take place after a vote to kill Boehner 1.1.

If all Reid does is vote to kill the Boehner plan, however, then nothing can happen. Reid wants to bully the House into doing his work. The House should tell Reid to do his job rather than worry about doing theirs. If Democrats never plan to make a proposal, then they should just pass Boehner 1.1, and Republicans should call a halt to any further efforts until Democrats start taking their responsibilities seriously.

Update: A reminder, via Newsbusters‘ Lachlan Markay, that Harry Reid could have raised the debt ceiling last year.

Update II: Lachlan actually went to Heritage a few weeks ago.

Oh, by the way, the U.S. just accused Iran of working with Al Qaeda

posted at 8:19 pm on July 28, 2011 by Allahpundit
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A little something light to tide you over while we wait for the next chapter in the debt-ceiling saga. I’ve been around blogs long enough to remember when claiming that Shiite nuts might collaborate with Sunni nuts against America would draw derisive snickers from lefty blogs at the sheer wingnuttery of the idea. Isn’t it just like neocons to try to drum up war against Iran by claiming a connection as preposterous as that?

And now here we are. Over to you, Obama administration:

The Treasury Department slapped sanctions on six individuals operating in a network that they said “serves as the core pipeline through which al Qaeda moves money, facilitators and operatives from across the Middle East to South Asia, including to Atiyah Abd al-Rahman, a key al Qaeda leader based in Pakistan, also designated today.”

“Iran is the leading state sponsor of terrorism in the world today. By exposing Iran’s secret deal with al Qaeda allowing it to funnel funds and operatives through its territory, we are illuminating yet another aspect of Iran’s unmatched support for terrorism,” Under Secretary for Terrorism and Financial Intelligence David Cohen said in a statement announcing the sanctions…

Among the individuals sanctioned today is Ezedin Abdel Aziz Khalil, described by the Treasury Department as “an Iran-based senior al Qaeda facilitator currently living and operating in Iran under an agreement between al Qaeda and the Iranian government.”…

“As al Qaeda’s representative in Iran, Khalil works with the Iranian government to arrange releases of al Qaeda personnel from Iranian prisons. When al Qaeda operatives are released, the Iranian government transfers them to Khalil, who then facilitates their travel to Pakistan,” the Treasury Department said.

This isn’t the first time Treasury’s targeted Al Qaeda inside Iran, actually: Bill Roggio remembers that four AQ operatives, including Saad Bin Laden, were sanctioned in January 2009. If that doesn’t prove to you that Iran’s dealing with major players inside Al Qaeda, not just the rank-and-file, Roggio also points out that Atiyah Abd al-Rahman happens to be Al Qaeda’s operations chief and was working with Bin Laden himself on an attack timed to the 10th anniversary of 9/11 before the SEALs came knocking on Osama’s door. But then, none of this is the least bit surprising. Remember where Saif al-Adel, one of AQ’s highest capos, spent the better part of the last decade? Remember the AP’s exclusive just two months ago about how Iran might be preparing to release Al Qaeda prisoners in order to target American troops in Iraq and Afghanistan? Do I need to link this evergreen Tom Joscelyn piece about longstanding ties between Iran and Al Qaeda yet again? Go figure that a fundamentalist state that specializes in outsourcing terror against the west via proxies might broker a cold peace with America-hating Wahhabist terrorists.

Since we’re on the subject, I feel obliged to link this hopeful WaPo story from a few days ago about how U.S. intel increasingly believes Al Qaeda’s leadership in Pakistan is on its last legs. Daveed Gartenstein-Ross warns against declaring mission accomplished, which is fair enough, but if the best this degenerate can do right now is try to convince Syrian protesters that America’s their worst enemy and not the monster in Damascus who’s been killing them for months, well, maybe we’re closer to mission accomplished than we think.

Chaos: Gunmen kill Libyan rebels’ top military commander — while he’s in rebel custody

posted at 7:38 pm on July 28, 2011 by Allahpundit
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To fully appreciate how shady this is, take two minutes to read the Atlantic Wire’s excellent tick-tock of news accounts of how this guy was killed. Rumors that he was dead started turning up in Arab media four days ago, oddly enough. Then word came that he had been recalled from the front lines to Benghazi to be questioned about collaborating with Qaddafi loyalists. (Younis used to be the regime’s Interior Minister but defected to the rebels earlier this year and took charge of their army.) Then, suddenly, he was under arrest. And lo and behold, shortly thereafter he was dead — shot by a mysterious group of gunmen whose identities the rebels’ spokesman is being curiously tight-lipped about. The AP’s story simply reeks of suspicion that it was an inside job:

The head of the Libyan rebel armed forces was shot and killed Thursday just before arriving for questioning by rebel authorities, their political leader said in a carefully worded statement to reporters that gave few details on who was behind the killing.

Adding to the confusion, the rebels had said hours earlier they had already detained the commander, Abdel-Fattah Younis, on suspicion his family might still have ties to the regime of Moammar Gadhafi, raising questions about whether he might have been assassinated by his own side…

Announcing the killing at a press conference where he did not take questions, Mustafa Abdul-Jalil, head of the rebels’ National Transitional Council, called Younis “one of the heroes of the 17th of February revolution,” a name marking the date of early protests against Gadhafi’s regime.

He said two of the commander’s aides, both colonels, were also killed in the attack by gunmen and that rebels had arrested the head of the group behind the attack. He did not say what he thought motivated the killers.

The spokesman himself alternately blamed the killing on “efforts by the Gadhafi regime to break our unity” and, er, “armed criminal gangs” running wild. Supposedly the “gang” killed him before he arrived before the rebel council in Benghazi to be questioned about ties to Qaddafi, but a rumor being pushed to Al Jazeera by Qaddafi loyalists claims that Younis was executed by the gunmen before the committee itself. Yet another journalist flagged by the Atlantic is hearing that the killing happened after a “major general” from a rival rebel tribe started an argument with Younis at a Benghazi hotel. (Remember, Younis wasn’t supposed to be in Benghazi today; he was recalled from the front.) Any guesses who that general might be? Revisit this post by Ed from April for a possibility.

To sum up, then: The man who’s supposed to be leading rebel troops to final victory over Qaddafi, thereby vindicating NATO’s decision to join the war, is now dead in his own capital on the orders of his own side, in all probability. The best-case scenario is that he was a traitor to their/our side and had to be removed immediately. The worst-case scenario is that the rebel leadership is so dysfunctional and gangsterish that they’re risking their war effort on settling personal grievances. This comes, incidentally, after a week filled with stories about the failure of “diplomatic solutions” to the stalemate, the best of which is this Time piece marveling at the fact that NATO’s been so ineffective in dislodging Qaddafi that we’re now looking at peace treaties that would involve letting him stay in the country. Take a moment to read it. And remember: “Days, not weeks.”

Rick Perry: Abortion is a states’ rights issue

posted at 5:07 pm on July 28, 2011 by Allahpundit
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A smart middle-ground play for independents, but I thought he was supposed to be the great evangelical hope. Last week he said he was “fine” with New York legalizing gay marriage before clarifying today that he’s not fine with gay marriage itself. (In fact, he supports a Federal Marriage Amendment.) Now this. Why would a social-conservative voter looking for a champion who has traction in the polls prefer him to, say, Bachmann?

Maybe Perry’s willing to shed some votes in Iowa in exchange for picking some up in New Hampshire.

Despite holding personal pro-life beliefs, Texas Gov. Rick Perry categorized abortion as a states’ rights issue today, saying that if Roe v. Wade was overturned, it should be up to the states to decide the legality of the procedure.

“You either have to believe in the 10th Amendment or you don’t,” Perry told reporters after a bill signing in Houston. “You can’t believe in the 10th Amendment for a few issues and then [for] something that doesn’t suit you say, ‘We’d rather not have states decide that.’”…

The National Right to Life Committee responded to Perry’s categorization of abortion as a states’ rights issue in a statement, saying, “Our society has an obligation to enact laws that recognize and protect the smallest members of our human family. Prior to Roe, states had the ability to enact laws that extended full legal protection to unborn children. We look forward to the day when Roe v. Wade is changed, and the states will once again have the ability to pass legislation that fully protects mothers and their unborn children.”

I’m surprised the NRLC gave him cover on that. Granted, the immediate first step after Roe is overturned would be state laws restricting abortion, but I’ve never understood that to be the end point for pro-lifers, as Perry seems to suggest by invoking the Tenth Amendment. The goal is a Human Life Amendment or, at a minimum, a federal statute banning abortion coast-to-coast. If you believe abortion is murder, why on earth would you want to let any state choose to legalize it? Huckabee made that point succinctly during the 2008 campaign; watch the end of the clip below.

Maybe Perry’s position on this mirrors his position on gay marriage. His argument for the Federal Marriage Amendment is that it would require ratification by three-fourths of the states, so the process honors the federalist principle of the Tenth Amendment even though the FMA would trump it. He could make the same argument for the HLA, although (a) a hardcore believer in the Tenth Amendment presumably wouldn’t want to see the sovereignty of any state trumped, even if three-quarters of the other states agree, and (b) if he didn’t make the same argument for the HLA, he’d have to explain why he thinks gay marriage requires a national solution but abortion doesn’t.

But maybe none of this matters. Neither the HLA nor the FMA will ever pass, so all we’re doing is polishing credentials here — and his already have plenty of polish. The latest whispers from his advisors, incidentally, claim that he’ll be in by late August. In fact, he’s already nudging Fox about a spot in the August 11 debate.

Guess who’s gotten pretty quiet this week

posted at 4:28 pm on July 28, 2011 by Ed Morrissey
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Jim Geraghty notices that the man who has spent July all over our TV screens now seems strangely … shy:

This is not a complaint, but an observation: President Obama has made no public speeches, appearances, or remarks since Monday night.

According to CBS News’ Mark Knoller, he has no public or press appearances scheduled for today.

This seems more than just a coincidence. After all, this is crunch time on the debt ceiling. If the President wanted to pick a time for conspicuous leadership, this would be it. By tomorrow, there may not be enough time to get any solution through Congress, let alone one the White House likes.

Jim speculates that Obama’s advisers may have decided that Obama’s media blitz the last three weeks has just not moved the needle, but I think it goes farther than that. I’d guess that the White House is getting worried about Obama’s relentless scolding while pursuing the no-plan strategy. The White House press corps has begun insisting on seeing Obama’s plan in writing, and since it’s not forthcoming, Obama’s team may be afraid of putting him out in public.

This could also reflect some frustration from Senate Democrats. The Reid and Boehner plans share a similar structure, and Reid might want to get the Senate into position to pass his proposal so that a conference committee can quickly produce something that will pass both chambers. Having Obama out front demagoguing the issue doesn’t help move that process along, as Republicans could filibuster Reid’s efforts if they really dig in their heels.

But Jim has the bottom line right — Obama very obviously didn’t help matters over the last three weeks with his all-mouth, no-plan strategy. If one doesn’t want to offer a solution, then perhaps the One shouldn’t be spouting off about those who do — and have.

My eyes are up here

Boehner: We, er, don’t have the votes — yet; Update: 25 Republicans leaning no? Update: Boehner still short as of 4 p.m.

posted at 3:50 pm on July 28, 2011 by Allahpundit
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He can afford to lose 23 Republicans, I believe. Number of Republicans leaning or confirmed no as of 2 p.m.: 22.

As much as the left hates having to make token concessions on spending, a GOP meltdown on the House floor tonight would be be a mighty fine consolation prize.

House Speaker John Boehner continued to lobby fellow Republicans to back his debt bill Thursday, telling members at a closed-door meeting, “We don’t have the votes yet,” according to a Republican in the room. But he added, “Today is the day we’re going to get it passed.”

As part of that lobbying effort, House GOP leaders agreed to add a last minute sweetener for conservatives who have been pushing for a balanced budget amendment to ensure future spending cuts actually happen.

House Republicans plan to have a pair of votes Friday on two versions of a balanced budget amendment to the Constitution. One version, if adopted by the states, would require that the government maintain a balanced budget. The other version, one that conservatives have long been pushing, would also require a supermajority vote in both chambers to approve any tax increases.

The supermajority requirement on tax hikes cinched it for Mike Pence, who’s now a yes. Nearly 30 of the GOP’s 87 freshmen also announced today that they’re backing Boehner, so momentum is with the leadership. Just one question: Er, what happens if Reid makes good on his threat to kill Boehner’s bill in its crib tonight?

No one knows:

“We’re going to put all this at the doorstep of Harry Reid,” Rep. John Fleming (R-FL) told reporters Thursday. I asked whether Boehner had prepared caucus members for the possibility that they’ll have to grapple with yet another compromise — this one between Boehner’s bill and a similar plan Reid wrote himself.

“No, no discussion about that at all,” Fleming said.

Rep. Allen West (R-FL) — a conservative supporter of Boehner plan — says Republicans are looking no farther than Thursday’s vote. “The bottom line is this: What happens after this really depends on Harry Reid, and hopefully they get beyond the do-nothing aspect that they have shown in my time since I’ve been up here, and they move on this.”

So Boehner’s strategy, I take it, is to win this vote by the skin of his teeth, then be forced into some sort of compromise with Reid after the bill dies in the Senate, and then sell the new, even more watered-down bill to House conservatives who are already groaning about having to line up behind Boehner? Unless there’s a market panic tomorrow, how does he win that vote? And Reid’s strategy, as I understand it, is to convince Boehner not to waste precious time by moving ahead with this vote since the bill’s doomed anyway — even though that sort of public ultimatum is guaranteed to force Boehner’s hand and nudge House Republicans into rallying behind him, with the GOP then sure to blame Reid’s rejectionism as the true stumbling block to an economy-saving deal. Huh.

Whether intentionally or not, though, Reid’s ultimatum gives Boehner a face-saving excuse if it turns out he can’t get to 218 before the vote. Having to yank the bill because his own caucus won’t support it would be a catastrophic embarrassment. Having to yank the bill because those damned Democrats in the Senate refuse to agree to a short-term deal that’s politically inconvenient for Obama is simply bowing to political reality. Boehner’s been meeting one on one with reluctant Republicans all day; if 5 p.m. rolls around and he doesn’t have the votes, he’ll pull it and then say he had no choice because there isn’t enough time left before August 2 to push bills that have no hope of becoming law. Which brings us back to the “what then?” question posed above.

Here he is at today’s presser. Exit question: Can we all agree, at least, that the S&P’s influence on our little national crisis is way, way greater than it should be? Whether you think they’ve been too pessimistic or not pessimistic enough, given their track record, why should we care what they think?

Update: Things are in flux and votes may (and probably will) change, but Think Progress’s whip count finds 25 Republicans leaning or confirmed no. That leaves Boehner two votes short and there are no House Democrats who are budging.

Update: National Journal still counts just 22 GOP no’s. And even better for Boehner, because of Democratic absences, he only needs to get to 216 for a majority, which means he can lose 24 Republicans and still win.

Update: A Twitter pal notes that Boehner won’t need tea party votes on a compromise bill with Reid since he’ll pick up Democratic votes on that one too. Absolutely; I didn’t mean to imply otherwise. But House progressives will peel off on that one in all likelihood and there aren’t many Blue Dogs left, so Boehner may yet need a few conservatives to join moderate Republicans in pushing him over the top. Can he get them? With the default deadline bearing down, yeah, probably.

Update: The Hill files a new story at 4:08 p.m.: Boehner’s still short.

There are 22 House Republicans who will vote no or are leaning no, according to The Hill’s whip count. There are more than three dozen Republicans who are publicly undecided, and 12 of them said or suggested on Thursday that they are still on the fence.

Boehner and his top lieutenants were scrambling for votes Thursday in anticipation of this evening’s vote, expected at around 6 p.m…

Rep. Jeff Flake (R-Ariz.) told reporters he was still leaning no on the bill and questioned whether it would be the GOP’s last chance to influence the debt limit debate. He speculated that the Senate could send Reid’s measure back to the House, which he said was similar to Boehner’s proposal, and then the House could attach a clean balanced budget amendment and send it back to the Senate.

Maybe Reid’s ultimatum convinced fencesitters that there’s no point taking a tough vote for a bill that’s destined to die anyway, whatever the consequences may be for Boehner’s prestige. Anyone want to start a pool on what time, precisely, we’ll hear that Boehner is pulling the bill from the floor?

Reid: Hey, who’s up for killing another debt-ceiling increase?

posted at 2:30 pm on July 28, 2011 by Ed Morrissey

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Must be nice to have a job that doesn’t actually require any work, except to refuse to work at all:

House Republicans are just wasting their time debating Speaker John Boehner’s debt reduction bill, Senate Majority Leader Harry Reid said today.

“Boehner’s bill dies tonight,” Reid communications director Adam Jentleson wrote on Twitter. “Forever.” …

“As soon as the House completes its vote, the Senate will move to take up that bill,” Reid said, “and it will be defeated tonight.”

“No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now,” he said.

To which the answer should be: “Where’s the Senate plan?” The Politico article has Harry Reid standing in front of a display that reads, “In the battle of budget scores, Senate plan is a clear winner over Boehner plan.” That was certainly true of the Boehner 1.0 plan, but it’s less clear that it’s true about Boehner 1.1. Either way, Reid’s bill only reduced actual spending by $750 billion rather than Boehner 1.0′s $710 billion over a ten-year period, so neither was exceptionally robust in scoring. It’s a bit like bragging about winning a football game when the only score comes off of a safety.

But that argument assumes the Senate will actually produce a plan. So far, even though Reid controls the majority and the floor, we haven’t even seen a hint of a vote. In fact, we haven’t seen the Senate originate any budget bill in over 800 days. Since Reid’s plan doesn’t include new taxes — or at least that’s his claim — it doesn’t have to originate in the House.

The proper legislative process should be for both chambers to work on their own versions of legislation and form a conference committee to produce a bill for up-or-down votes in each chamber. Reid could have done that with the CCB bill, had he chosen to do so, although there would have been very few commonalities between a Senate response and the CCB around which to compromise. That’s not true of the Boehner 1.1 bill; as National Journal noted yesterday, they have quite a bit in common, including the level of cuts. All that needs to happen is to get the Senate to pass its bill and let the conference committee hammer it out. That can even take place after a vote to kill Boehner 1.1.

If all Reid does is vote to kill the Boehner plan, however, then nothing can happen. Reid wants to bully the House into doing his work. The House should tell Reid to do his job rather than worry about doing theirs. If Democrats never plan to make a proposal, then they should just pass Boehner 1.1, and Republicans should call a halt to any further efforts until Democrats start taking their responsibilities seriously.

Weekly jobless claims dip below supposedly significant 400,000 level

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posted at 10:30 am on July 28, 2011 by Tina Korbe

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Not sure what accounts for this (and the Labor Department offers no specific explanation either), but a 15-week streak of 400,000+ weekly jobless claims ended last week.

Claims dropped to 398,000, a decrease of 24,000 from the previous week’s revised figure of 422,000, according to figures released today by the Department of Labor.

Economists consider 400,000 to be a crucial number — the number below which jobless claims need to drop to make a difference in the unemployment rate or to achieve stability in the labor market. But, as Ed has explained in the past, that’s somewhat of a myth:

Take a look at the historical series of weekly claims between December 2005 and December 2007, the last time we really had “stability” in the labor force. The highest number in that period was 355,000 in a week, and that was in December 2007 when the economy slid into recession. In fact, between January 2004 and January 2008, we had only two weeks of 400K-level weekly claims, both in September 2005, and they were very much the exception. The average for that four-year span is 326,735, and the median number is 324,000 — which is why I usually use the 325K number in my analyses. We actually didn’t get to the 400K level until July 2008, at which point no one considered the labor market “stable.”

So, we still have a long way to go. Still, it seems like a hopeful sign to me that the four-week moving average also declined to 413,750, a decrease of 8,500. Even if it’s only for this week, I’ll rejoice in the lower figures and even call ‘em “unexpected,” even if that does mean Ed might accuse me of sounding like Reuters.