Wonkbook: Will Harry Reid really go nuclear?

By Ezra Klein and Evan Soltas, Published: July 10 at 8:18 am

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There are two theories of Senate Majority Leader Harry Reid's threat to go nuclear and limit or even eliminate filibusters against executive-branch nominees.
One is that Reid is serious. He's fed up. He feels betrayed by Minority Leader Mitch McConnell's continued obstruction. "I think he would really do it," says a top Republican Senate aide. "He is not known for his even temper and long view of the repercussions of his actions."
The other is that this is all a dance between Reid and McConnell -- and they both know it. "I think McConnell and Reid look each other in the eye and know the game," says a Democratic aide. "I think they know this help gets McConnell where McConnell needs to go in a way his caucus can handle."
Senate insiders say that this particular fight is really about a handful of nominations: Secretary of Labor, members of the National Labor Relations Board, and head of the Consumer Financial Protection Bureau. These are the nominations organized labor cares about more than any other. They're also nominations Republicans have proven particularly committed to blocking.
So Reid and McConnell are at an impasse. Reid can't just sit back and permit the Republicans to block these nominees. The unions would howl. But McConnell can't just give up. He'd be tarred and feathered.
Adding the nuclear option into the mix makes the debate about something else: The ability of the Republicans -- and any minority -- to block future nominees. If Reid can credibly threaten the nuclear option, and McConnell can credibly defuse it by letting some of the nominees slip through, perhaps both men can get out of this one.
That word "credibly" matters though. Whether Reid can get enough Democrats to talk up the nuclear option is an open question. Plenty of his members are looking at this gummed-up Congress, and the prospect of losses in 2014, and wondering why now is a good time to pick this fight. "I’d be more comfortable nuking if we had an explicit agenda we were trying to pass and a Democratic-controlled House that could pass it," one aide told me. "Absent that, I’m not sure the pain is going to be worth it."
At the moment, the nuclear option talk is being channeled almost entirely through the press. Tomorrow, Reid formally brings it to his members. “I’m going to caucus on this Thursday, and I think Thursday by the time the day is out, you’ll have a better idea of what we’re going to try and do on this,” he told reporters.
Wonkbook's Number of the Day: $1.5 billion. That's how much the U.S. gives Egypt each year in foreign aid. Here's what it does.
Wonkbook's Quotation of the Day: “Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandates without giving the same exemption to the rest of America? Hell no, it’s not fair,” said House Speaker John Boehner to Republicans on Tuesday.
Wonkblog's Graph of the Day: You can't deny global warming after seeing this graph.

Wonkbook's Top 5 Stories: 1) filibuster fighting; 2) the battle of the mandates; 3) fixing too-big-to-fail; 4) is immigration reform dead?; and 5) good and bad from IRS.
1) Top story: DEFCON time for filibuster's nuclear option
Sen. Harry Reid ready to go nuclear on executive branch nominations. "After months of quiet lobbying, Democratic sources say the powerful Senate majority leader is ready to invoke the “nuclear option” to limit the use of the filibuster on executive branch nominations as early as next week. The move could have dramatic implications for both Reid and President Barack Obama. It would also amount to a significant shift in power away from the Senate and toward the White House by ensuring presidential nominees win confirmation to their posts by a straight majority vote." Manu Raju and John Bresnahan in Politico.
Senate Democrats set for decisive meeting on 'nuclear option'. "Senate Democrats will huddle Thursday to determine whether to trigger the “nuclear option” to ram through nominees with a simple majority vote...Thursday’s meeting will be Reid’s final chance to determine how badly his colleagues want to push several stalled presidential nominees, including Tom Perez, President Obama’s pick to head the Labor Department, and Richard Cordray, who was renominated to continue as director of the Consumer Financial Protection Bureau (CFPB)." Peter Schroder in The Hill.
@RBReich: If Reid gets 51 Dems to change filibuster rule, it will be fault of Senate R's for forcing Reid's hand by blocking O's exec branch nominees.
Sen. Mitch McConnell: Democrats manufacturing nomination crisis. "With a batch of controversial nominees teed up for consideration this month in the Senate, McConnell pushed back against the notion that Republicans are obstructing President Barack Obama’s nominees, necessitating a move to scrap 60-vote thresholds on executive nominees. “We see the other side cooking up phony nomination fights because they want to go nuclear,” McConnell said Tuesday. “They know their core argument — that President Obama’s nominees are being treated less fairly than those of Bush — is essentially at odds with reality.”" Burgess Everett in Politico.
@JohnJHarwood: Funny how anti-majoritarian devices like filibuster look so much less undemocratic/evil when they stop something you don't want to happen
Vitter drops filibuster threat on EPA nominee Gina McCarthy. "The ranking Republican on the Senate Environment and Public Works Committee said Tuesday he would no longer block the nomination of Environmental Protection Agency official Gina McCarthy to head that agency and would support a vote on the Senate floor without a filibuster. Sen. David Vitter (La.) said he had changed his position after “major progress” was made on five demands he and other committee Republicans made of the EPA." Lenny Bernstein in The Washington Post.
JONATHAN BERNSTEIN: The best news in Senate reform. "It’s really good news, that is, if you have a middle position on the filibuster: that the Senate should reform it, not eliminate it, but certainly not continue with the 60-vote Senate of the last few years. The news is that, gradually, Democrats in the Senate seems to be concluding that different rules are needed for legislation, for judicial nominations and for executive-branch nominations." Jonathan Bernstein in The Washington Post.
Music recommendations interlude: The Civil Wars, "From This Valley."

Top op-eds
HUBBARD AND KANE: The great wall of Texas, a folly. "What our leaders need to understand is that the only existential threat facing America is not embodied by barbarians at the gates, but by American isolationism. To continue the miraculous American growth story, we need to continue the traditions of constant innovation, diversity, and openness to the world. The last thing we need is a wall." Glenn Hubbard and Tim Kane in The Atlantic.
JARED BERNSTEIN: Front-running the release of economic data. "Traders need to know the precise vintage of the information they are looking at. The fact that some are getting it before others is itself valuable knowledge. When this broke, a lot of folks claimed, “Oh, everybody knows that.” But everybody didn’t. So it is important to continue to pursue reporting that exposes such advantages. And the other important thing is: Really? Millisecond trading advantages are helping our capital markets allocate excess savings more productively?" Jared Bernstein in The New York Times.
SUNSTEIN: News flash -- Obamacare haters hate Obamacare. "To the critics of the health-care law, however, the real lesson of the announcement is clear: OBAMACARE IS A DEBACLE. And to those critics, that is the real lesson of essentially every development in health-care reform...No one should doubt that the implementation of the health-care law is creating serious challenges. Reasonable people have objections and concerns. But as with Durning-Lawrence, so with many of Obamacare’s critics, whose conclusions are motivated and preordained." Cass R. Sunstein in Bloomberg.
Religious interlude: "Available Emblems of Belief for Placement on Government Headstones and Markers."

2) Republicans target Obamacare's mandates
House GOP wants to delay individual mandate, too. "House Republican leaders on Tuesday seized on the Obama administration’s one-year delay of a mandate for larger employers to offer health insurance or face penalties, demanding the same postponement for the mandate on individual insurance purchases and promising a series of showdowns aimed at dividing Democrats from the White House...House leaders began devising strategies that would most likely start this month with multiple votes, the first to codify the one-year delay on the employer mandate, then another to demand a delay on the individual mandate." Jonathan Weisman and Robert Pear in The New York Times.
GOP announces second hearing on Obamacare delay. "Republican lawmakers will double down on ObamaCare's implementation next week with another hearing on the employer mandate delay. The House Energy and Commerce subcommittee on Oversight will convene next Thursday to ask why the administration deferred a rule that larger businesses offer health insurance to their workers." Elise Viebeck in The Hill.
White House ramps up effort to sell Obamacare. "The White House is dramatically expanding its efforts to sell the Affordable Care Act, hiring additional staffers, formulating a public-relations strategy and reaching out to key lawmakers as the new health-insurance system prepares to launch in coming months...White House Chief of Staff Denis McDonough spends at least a couple of hours a day working on implementation, regularly reaching out to congressional Democrats to see what questions they need answered to spread the word about the law back home, according to several people involved in the discussions." Juliet Eilperin in The Washington Post.
17 states made it harder to get an abortion this year. "As to how states are restricting abortion, the most common restrictions Guttmacher saw were those that tried to regulate abortion clinics in a specific way, such as requiring them to become certified as surgical centers. Five states have passed laws like this so far this year, including North Dakota and Alabama." Sarah Kliff in The Washington Post.
...And NC is working on it. "The North Carolina proposal would require abortion clinics to meet the same standards as outpatient surgery centers, which bill supporters say would improve oversight." Valerie Bauerlein in The Wall Street Journal.
Extraterrestrial interlude: "Dems pitch national park on the moon." The Hill.

3) Too-big-to-fail banks get higher capital requirements

A ‘too big to fail’ crackdown: U.S. regulators hit big banks with tougher standards. "Regulators told the country’s eight largest banks that they will have to raise billions of dollars to guard against future problems or reduce their size and complexity. In a key step in the “too big to fail” debate, the top three banking regulators approved a proposal Tuesday that would force bank such as JPMorgan Chase, Goldman Sachs and Wells Fargo to hold far larger cash buffers than required by international standards...Tuesday’s proposal calls for each of the eight largest banks — those with more than $700 billion of assets — to hold equity capital equal to 6 percent of its total assets." Danielle Douglas in The Washington Post.
U.S. regulators place GE Capital, AIG under additional supervision. "The Financial Stability Oversight Council voted Tuesday to place GE Capital and American International Group under stricter supervision, the first substantial move to address the risks that large nonbank companies pose to the financial system. The interagency panel of regulators has ushered in a new era of oversight for a broad swath of firms that play in the financial markets but have largely escaped federal supervision. Now life insurers, hedge funds and private equity firms could come under the purview of the Federal Reserve and face tougher rules to govern their businesses." Danielle Douglas in The Washington Post.
The case for Christina Romer to be Fed chair. "The only way the Fed will give us a new day is with new thinking. Fed number two Janet Yellen is the odds-on favorite to replace Bernanke, and would be a very good choice, but Christina Romer would be a better one. Now, Yellen has been quietly pushing the Fed to evolve towards a quasi-NGDP target, but doing so quietly half-defeats the point. Romer understands you have to scream it -- and back it up -- to get people's attention. And you have to keep screaming it -- and keep backing it up -- until it's just background noise." Matthew O'Brien in The Atlantic.
Ouch! The IMF now expects slower global economic growth than it did in April. "The International Monetary Fund is out with the summer update to its World Economic Outlook, its regular assessment of the global economy. It’s not that good. The IMF thinks that global growth will be slower this year than it had expected as recently as April. The 3.1 percent rise in global GDP the fund now forecasts for this year is a downward revision of 0.2 percentage points from the April forecast. The downward revision covered much of the world: the United States, the euro zone, China and other emerging markets. The major exceptions to the pessimistic tone were Japan and Britain, which both received upward revisions." Neil Irwin in The Washington Post.
...The IMF is worried about global echoes of Fed exit. "The theme of the update is "growing pains," and the key message is a warning to the U. S. and the Federal Reserve, in particular: Your monetary tightening, if done too quickly, could bring the world economy to its knees. And so far, we don't like what we see...The problem the IMF sees is that the Fed may want to tighten monetary policy, but the rest of the world (which still faces weak demand) isn't ready for it to do so. A tightening in the U.S. would put those countries in a bind: if they tighten, they weaken their domestic economies; if they don't, investment capital will depart for higher returns in dollar-denominated assets." Evan Soltas in Bloomberg.
The internet didn’t kill bank branches. Bank mergers did. "Branch networks finally started to shrink in 2010, when banks shed 1,100 locations, according to research firm Bancography. The decline has continued over the past couple of years, led by the troubled Bank of America, which shuttered 193 branches in 2012. Meanwhile, the number of transactions per branch declined too, from 10,200 per month in 2007 to 7,600 per month in 2012." Lydia DePillis in The Washington Post.
Tennis interlude: "Virginia Wade: a Wimbledon champion written out of British history."
4) Is immigration reform dead?
House GOP to look at immigration against backdrop of deep divisions. "House Republicans will meet Wednesday to hash out their differences on immigration legislation, and there is a lot of hashing out to be done. The session is expected to last hours, and, if recent history is any guide, a lot of it is likely to be contentious and unpleasant...It is against this backdrop that House GOP leaders try to begin mapping a way forward for a difficult immigration overhaul effort, hoping that this time they can corral enough support from each of the various GOP factions at the end of what promises to be a long and complex process." Sean Sullivan and Aaron Blake in The Washington Post.
Immigration reform heads for slow death. "Republicans walked away from their 2012 debacle hell-bent on fixing their problems with Hispanics. Now, they appear hell-bent on making them worse. In private conversations, top Republicans on Capitol Hill now predict comprehensive immigration reform will die a slow, months-long death in the House. Like with background checks for gun buyers, the conventional wisdom that the party would never kill immigration reform, and risk further alienating Hispanic voters, was always wrong — and ignored the reality that most House Republicans are white conservatives representing mostly white districts." Mike Allen and Jim VandeHei in Politico.
7 Republicans who need a vote on immigration reform. "Voters in seven GOP-held congressional districts would be less likely to vote for their current representative if he doesn’t support immigration reform, according to the poll from Public Policy Polling. The number of voters who would be less likely to support their current congressman ranged from 40 to 47 percent, while the number of voters who would be more likely ranged from 19 to 31 percent...The seven representatives — Jeff Denham, David Valadao and Gary Miller, all of California, Mike Coffman of Colorado, John Kline of Minnesota, Joe Heck of Nevada and Mike Grimm of New York — each serve in a district with overwhelming support for the Senate’s immigration reform plan, ranging from 61 to 69 percent, the poll found." James Arkin in Politico.
Better than interlude: Sliced bread turns 85.
5) The good, the bad, and the ugly from the IRS
IRS mistakenly exposed thousands of Social Security numbers. "The incident involves the unwitting exposure of "tens of thousands" of Social Security numbers, according to a recent audit by the independent transparency and public-domain group Public.Resource.org. The identifying numbers were on the Internet for less than 24 hours after being discovered, but the damage was done. And unfortunately, the data-breach concerns some of the most sensitive types of transactions: Those made by nonprofit political groups known as 527s." Brian Fung in NationalJournal.
Pressure campaign in works over IRS scandal. "House Republicans are planning to push a series of bills designed to keep pressure on the White House over government scandals that burst open this spring, particularly the IRS targeting of conservative political groups for vigorous oversight. During Tuesday’s weekly Republican Conference meeting, Majority Leader Eric I. Cantor (R-Va.) outlined a collection of bills that GOP leaders expect to advance in the final week of the summer legislative session late this month." Paul Kane in The Washington Post.
GOP bill would allow leave without pay for officials under investigation. "One of the measures, bound to meet with opposition from the federal workforce, would allow agencies to place senior career officials on paid or unpaid leave while they are under investigation for abuses. A similar bill passed the House last year but died in the Senate. Another proposal in the GOP package would require agency leaders to approve government conferences and hold them accountable for over-the-top spending on such events." Josh Hicks in The Washington Post.
IRS chief Daniel Werfel pushes to kill bonuses. "The acting head of the embattled Internal Revenue Service is moving to halt $70 million in scheduled bonus payouts — potentially blunting some anger on Capitol Hill while threatening a fight with the agency’s union. In an email Tuesday to IRS employees, Daniel Werfel said he instructed his senior team to determine how the agency can eliminate bonuses for union employees and senior executives. Managers and non-union employees will also not receive the bonuses, he said." Lauren French, Brian Faler, and Rachael Bade in Politico.
Reading material interlude: The best sentences Wonkblog read today.
Wonkblog Roundup
This accused hacker is a jerk. Here’s why he shouldn’t be a felon. Timothy B. Lee.
Barack Obama loves broccoli. So does America! Sarah Kliff.
Think our Senate is horrible? Wait til you see Canada’s. Dylan Matthews.
You can't deny global warming after seeing this graph. Ezra Klein.
A radical plan for shaking up the FISA court. Ezra Klein.
Seventeen states made it harder to get an abortion this year. Sarah Kliff.
The U.S. gives Egypt $1.5 billion a year in aid. Here’s what it does. Brad Plumer.
Ouch! The IMF now expects slower global economic growth than it did in April. Neil Irwin.
Could the Supreme Court stop the NSA? Timothy B. Lee.
The internet didn’t kill bank branches. Bank mergers did. Lydia DePillis.

Et Cetera
Rand Paul aide has history of neo-Confederate sympathies, inflammatory statements. Alana Goodman in The Washington Free Beacon.
ACLU launches legal challenge to Pa. ban on same-sex marriage. Juliet EIlperin in The Washington Post.
As Detroit teeters on bankruptcy, creditors are left holding the bag. Michael A. Fletcher in The Washington Post.
Farm bill may get cleaved in half. David Rogers in Politico.
James Comey got his Senate hearing for the FBI post. Devlin Barrett in The Wall Street Journal.
Got tips, additions, or comments? E-mail me.
Wonkbook is produced with help from Michelle Williams.