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| Welcome to Wonkbook, Wonkblog's morning policy news primer byMax Ehrenfreund (@MaxEhrenfreud). Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here. Follow us on Twitter and Facebook. |
| Oakland’s police cleaned up their act. So can Ferguson’s. |
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Wednesday's report on the Ferguson Police Department was, to put it mildly, troubling. Federal investigators found statisticaland documentary evidence of racism in the police force as well as in the municipal government as a whole. The good news is that law enforcement agencies can improve. Indeed, one of the worst of them has done just that, writes Scott C. Johnson in an engrossing history of the Oakland police at Politico. It took years, but after a series of reforms and the appointment of a new chief, complaints against officers declined by 40 percent in the past year, and the department went nearly two years without an officer-involved shooting. "If Oakland—with its bloody, costly history of police brutality—can change, any city can," Johnson concludes.
Correction: Wednesday's chart of the day misstated the total earnings U.S. multinational corporations have stockpiled overseas. The value is $2.1 trillion, not $2.1 billion. That's trillion with a "T." We regret the error.
What's in Wonkbook: 1) King v. Burwell 2) Opinions, including Vinik on Clinton 3) Hillary Clinton's DIY server, and more
Number of the day: 95 percent. That's the share of those charged with jaywalking offenses in Ferguson, Mo., who are black. The Washington Post.
One surprise was Justice Anthony M. Kennedy, who seems undecided. "Three years ago, Kennedy was among the four dissenters who would have found the entire act unconstitutional. But Wednesday, with his comments and questions seeming to cut both ways, he appeared to be back in play." Robert Barnes in The Washington Post.
Primary source: The transcript of the oral arguments.
MacGILLIS: Kennedy's argument, funnily enough, is the same one that partially overturned Obamacare the first time."Kennedy seemed concerned that ruling in favor of the challengers, and thereby eliminating the subsidies in the 33 states without their own exchanges, would pose a constitutional problem for the law. Why? Because it would mean that the federal government was exerting an undue level of coercion over the states—threatening them with the withholding of valuable subsidies for millions of their citizens if the states did not take a specified action. ... If this argument about coercion of the states sounds familiar, it’s because it is what the Supreme Court relied on in the second half of its 2012 opinion—a 7-2 ruling that, to the great dismay of the law’s supporters, undid the law’s expansion of Medicaid to a new nationwide threshold of eligibility." Slate.
TOOBIN: Chief Justice John Roberts asked just one question, and it could be a crucial one. "Kennedy had asked about 'Chevron deference,' a doctrine of law that describes how much leeway the executive branch should have in interpreting laws. Verrilli, not surprisingly, said that the Chevron doctrine gave the Obama Administration more than adequate permission to read the law to allow subsidies on the federal exchange. 'If you’re right about Chevron,' Roberts said, at long last, 'that would indicate that a subsequent Administration could change that interpretation?' Perhaps it could, Verrilli conceded. The question suggests a route out of the case for Roberts—and the potential for a victory for the Obama Administration. ... A decision in favor of Obama here could be a statement that a new President could undo the current President’s interpretation of Obamacare as soon as he (or she) took office in 2017. In other words, the future of Obamacare should be up to the voters, not the justices." The New Yorker.
FELDMAN: In any event, the Obama administration wants the case decided once and and for all, even if that weakens their argument. "The government never challenged the King petitioners’ standing. But reporters investigating the issue did. ... The government wants the case to go forward no matter what, even if it could win on standing. Why? The most logical explanation is that Verrilli thinks the government is going to win anyway. The adjunct to this is what would happen if the case were dismissed on standing grounds: It would come back later, with different plaintiffs. That would be fine -- unless Jeb Bush or another Republican is president and a new solicitor general won’t defend the statute as Barack Obama's administration reads it." Bloomberg View.
Here's a five-point summary of the arguments. "1. The vote will be close. ...
2. Kennedy's skepticism could be good for the Obama administration. ...
3. The Supreme Court could offer a temporary 'fix' if subsidies are struck down. ...
4. 'Standing' likely won't be an issue. ...
5. No one knows what John Roberts is thinking." Jason Millman in The Washington Post.
VINIK: Former Secretary of State Hillary Clinton is unprepared, and Sen. Elizabeth Warren (D-Mass.) should run for president. Clinton "made multiple gaffes about her own wealth, saying her family was 'dead broke' after Bill Clinton left office. At the same time, she has given numerous speeches for hundreds of thousands of dollars. And over the past few weeks, the Wall Street Journal and Washington Post reported in separate investigations that the Clinton Foundation had accepted donations from foreign countries both during and after her time as secretary of state. Many of those countries, like Saudi Arabia, do not have stellar records on human rights. For a would-be presidential candidate with her deep experience in Washington, that’s a lot of unforced errors. ... The best way for a party to vet a candidate, and get all of the dirt out of the way, is in a primary. But the Democratic Party is not going to have a competitive primary." The New Republic.
O'BRIEN: Wages aren't increasing because the economy hasn't yet recovered. "Even during the bust, wages were still rising in all but what had been the bubbliest of states. So it's hard to see how today's low wage growth could be making up for yesterday's zero wage growth that "should" have been negative when there wasn't that much zero wage growth to begin with. ... Between people who can't find the full-time jobs they want, people who haven't been able to find any jobs after looking for at least six months, and people who think things are so hopeless that they've given up looking for now, there are a lot more people than normal stuck on the margins of the labor force. And these "shadow unemployed," according to the Fed, exert just as much downward pressure on wages as the regular unemployed." The Washington Post.
MEYERSON: Shareholders are sucking the profits out of the U.S. economy. "In the 1960s and ’70s, about 40 cents of every dollar that a corporation either borrowed or realized in net earnings went into investment in its facilities, research or new hires. Since the ’80s, however, just 10 cents of those dollars have gone to investment. ... The corporations on the Fortune 500 list from 2003 through 2012 devoted fully 91 percent of their net earnings to shareholder payouts. So much for retaining earnings to invest." The Washington Post.
GILBERT: European Central Bank President Mario Draghi prepares for quantitative easing, but the damage has already been done. "The euro region economy might -- might -- be recovering sufficiently to make the bond-buying plan obsolete before it gets going in earnest. ... The economic evidence in favor of a turnaround in the euro region is growing. In fact, economic data in the EU has consistently outpaced the expectations of economists for much of this year." Bloomberg View.
New Jersey Gov. Chris Christie let Exxon Mobil off the hook, writes attorney Bradley M. Campbell. "The decision by the administration of Gov. Chris Christie to settle an environmental lawsuit against Exxon Mobil Corporation for roughly three cents on the dollar after more than a decade of litigation is an embarrassment to law enforcement and good government. Even more troubling are the circumstances surrounding the decision, which recently came to light. As a judge deliberated whether to assess the $8.9 billion in damages New Jersey sought, the administration stepped in and agreed to take about $250 million and settle the case."The New York Times.
The Federal Reserve knew the economy was in serious trouble in 2009, newly released transcripts show. "But they were hobbled by doubts about the Fed’s ability to do more and by concerns about the potential political and economic consequences." Binyamin Appelbaum in The New York Times.
The central bank removed regulatory authority from its New York branch without telling anyone. "The new structure was enshrined in a previously undisclosed paper written in 2010 known as the Triangle Document. Under the new system, Washington is at the center of bank supervision, exercising control over the Fed’s 12 reserve banks, much as the State Department exerts control over embassies. The power shift, initiated after the financial crisis and slowly put in place over the past five years, is more than a bureaucratic change. It influences how the biggest banks on Wall Street are overseen and has begun to affect regulation in unanticipated ways across the Fed system." Jon Hilsenrath in The Wall Street Journal.
As secretary of state, Clinton handled official correspondence using a private server registered to her home. "The highly unusual practice of a Cabinet-level official physically running her own email would have given Clinton, the presumptive Democratic presidential candidate, impressive control over limiting access to her message archives. ... In most cases, individuals who operate their own email servers are technical experts or users so concerned about issues of privacy and surveillance they take matters into their own hands. It was not immediately clear exactly where Clinton ran that computer system." Associated Press.
Just who is the House Freedom Caucus? "It’s not completely clear exactly who belongs to the group. But in the just-completed fight over Homeland Security funding, it was hard to miss the influence of the insurgent conservative bloc as it clashed with GOP leadership. ... As the unified Republican majority looks to the next big legislative battles over the debt ceiling, the federal budget and the Export-Import Bank, the Freedom Caucus may be the best illustration of how intra-party discord could dramatically slow the pace of business in this Congress and likely bring it to a complete halt." Sean Sullivan in The Washington Post.
The administration is counting on Sen. Ron Wyden (D-Ore.) to deliver a trade deal. "A White House not known for its courtship of Capitol Hill is counting on Wyden to help deliver on the trade deal, which the president and his GOP adversaries have called the most likely bipartisan breakthrough in Obama’s final two years. So far, however, the results have not inspired confidence among Republicans." David Nakamura in The Washington Post.
Correction: Wednesday's chart of the day misstated the total earnings U.S. multinational corporations have stockpiled overseas. The value is $2.1 trillion, not $2.1 billion. That's trillion with a "T." We regret the error.
What's in Wonkbook: 1) King v. Burwell 2) Opinions, including Vinik on Clinton 3) Hillary Clinton's DIY server, and more
Number of the day: 95 percent. That's the share of those charged with jaywalking offenses in Ferguson, Mo., who are black. The Washington Post.
1. Top story: The justices' questions about Obamacare
The court is divided -- no surprise there. "Wednesday’s arguments suggested that the coming months will be tense for the administration as it waits to hear whether about seven million low- and middle-income people in some three dozen states will continue to receive subsidies to help them buy health insurance. Should the court rule that subsidies were not authorized by the health law, most of those people would no longer be able to afford insurance. And insurance markets in those states could collapse." Adam Liptak in The New York Times.One surprise was Justice Anthony M. Kennedy, who seems undecided. "Three years ago, Kennedy was among the four dissenters who would have found the entire act unconstitutional. But Wednesday, with his comments and questions seeming to cut both ways, he appeared to be back in play." Robert Barnes in The Washington Post.
Primary source: The transcript of the oral arguments.
MacGILLIS: Kennedy's argument, funnily enough, is the same one that partially overturned Obamacare the first time."Kennedy seemed concerned that ruling in favor of the challengers, and thereby eliminating the subsidies in the 33 states without their own exchanges, would pose a constitutional problem for the law. Why? Because it would mean that the federal government was exerting an undue level of coercion over the states—threatening them with the withholding of valuable subsidies for millions of their citizens if the states did not take a specified action. ... If this argument about coercion of the states sounds familiar, it’s because it is what the Supreme Court relied on in the second half of its 2012 opinion—a 7-2 ruling that, to the great dismay of the law’s supporters, undid the law’s expansion of Medicaid to a new nationwide threshold of eligibility." Slate.
TOOBIN: Chief Justice John Roberts asked just one question, and it could be a crucial one. "Kennedy had asked about 'Chevron deference,' a doctrine of law that describes how much leeway the executive branch should have in interpreting laws. Verrilli, not surprisingly, said that the Chevron doctrine gave the Obama Administration more than adequate permission to read the law to allow subsidies on the federal exchange. 'If you’re right about Chevron,' Roberts said, at long last, 'that would indicate that a subsequent Administration could change that interpretation?' Perhaps it could, Verrilli conceded. The question suggests a route out of the case for Roberts—and the potential for a victory for the Obama Administration. ... A decision in favor of Obama here could be a statement that a new President could undo the current President’s interpretation of Obamacare as soon as he (or she) took office in 2017. In other words, the future of Obamacare should be up to the voters, not the justices." The New Yorker.
FELDMAN: In any event, the Obama administration wants the case decided once and and for all, even if that weakens their argument. "The government never challenged the King petitioners’ standing. But reporters investigating the issue did. ... The government wants the case to go forward no matter what, even if it could win on standing. Why? The most logical explanation is that Verrilli thinks the government is going to win anyway. The adjunct to this is what would happen if the case were dismissed on standing grounds: It would come back later, with different plaintiffs. That would be fine -- unless Jeb Bush or another Republican is president and a new solicitor general won’t defend the statute as Barack Obama's administration reads it." Bloomberg View.
Here's a five-point summary of the arguments. "1. The vote will be close. ...
2. Kennedy's skepticism could be good for the Obama administration. ...
3. The Supreme Court could offer a temporary 'fix' if subsidies are struck down. ...
4. 'Standing' likely won't be an issue. ...
5. No one knows what John Roberts is thinking." Jason Millman in The Washington Post.
2. Top opinions
O'BRIEN: Wages aren't increasing because the economy hasn't yet recovered. "Even during the bust, wages were still rising in all but what had been the bubbliest of states. So it's hard to see how today's low wage growth could be making up for yesterday's zero wage growth that "should" have been negative when there wasn't that much zero wage growth to begin with. ... Between people who can't find the full-time jobs they want, people who haven't been able to find any jobs after looking for at least six months, and people who think things are so hopeless that they've given up looking for now, there are a lot more people than normal stuck on the margins of the labor force. And these "shadow unemployed," according to the Fed, exert just as much downward pressure on wages as the regular unemployed." The Washington Post.
MEYERSON: Shareholders are sucking the profits out of the U.S. economy. "In the 1960s and ’70s, about 40 cents of every dollar that a corporation either borrowed or realized in net earnings went into investment in its facilities, research or new hires. Since the ’80s, however, just 10 cents of those dollars have gone to investment. ... The corporations on the Fortune 500 list from 2003 through 2012 devoted fully 91 percent of their net earnings to shareholder payouts. So much for retaining earnings to invest." The Washington Post.
GILBERT: European Central Bank President Mario Draghi prepares for quantitative easing, but the damage has already been done. "The euro region economy might -- might -- be recovering sufficiently to make the bond-buying plan obsolete before it gets going in earnest. ... The economic evidence in favor of a turnaround in the euro region is growing. In fact, economic data in the EU has consistently outpaced the expectations of economists for much of this year." Bloomberg View.
New Jersey Gov. Chris Christie let Exxon Mobil off the hook, writes attorney Bradley M. Campbell. "The decision by the administration of Gov. Chris Christie to settle an environmental lawsuit against Exxon Mobil Corporation for roughly three cents on the dollar after more than a decade of litigation is an embarrassment to law enforcement and good government. Even more troubling are the circumstances surrounding the decision, which recently came to light. As a judge deliberated whether to assess the $8.9 billion in damages New Jersey sought, the administration stepped in and agreed to take about $250 million and settle the case."The New York Times.
3. In case you missed it
The central bank removed regulatory authority from its New York branch without telling anyone. "The new structure was enshrined in a previously undisclosed paper written in 2010 known as the Triangle Document. Under the new system, Washington is at the center of bank supervision, exercising control over the Fed’s 12 reserve banks, much as the State Department exerts control over embassies. The power shift, initiated after the financial crisis and slowly put in place over the past five years, is more than a bureaucratic change. It influences how the biggest banks on Wall Street are overseen and has begun to affect regulation in unanticipated ways across the Fed system." Jon Hilsenrath in The Wall Street Journal.
As secretary of state, Clinton handled official correspondence using a private server registered to her home. "The highly unusual practice of a Cabinet-level official physically running her own email would have given Clinton, the presumptive Democratic presidential candidate, impressive control over limiting access to her message archives. ... In most cases, individuals who operate their own email servers are technical experts or users so concerned about issues of privacy and surveillance they take matters into their own hands. It was not immediately clear exactly where Clinton ran that computer system." Associated Press.
Just who is the House Freedom Caucus? "It’s not completely clear exactly who belongs to the group. But in the just-completed fight over Homeland Security funding, it was hard to miss the influence of the insurgent conservative bloc as it clashed with GOP leadership. ... As the unified Republican majority looks to the next big legislative battles over the debt ceiling, the federal budget and the Export-Import Bank, the Freedom Caucus may be the best illustration of how intra-party discord could dramatically slow the pace of business in this Congress and likely bring it to a complete halt." Sean Sullivan in The Washington Post.
The administration is counting on Sen. Ron Wyden (D-Ore.) to deliver a trade deal. "A White House not known for its courtship of Capitol Hill is counting on Wyden to help deliver on the trade deal, which the president and his GOP adversaries have called the most likely bipartisan breakthrough in Obama’s final two years. So far, however, the results have not inspired confidence among Republicans." David Nakamura in The Washington Post.
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