The Dish

The House Republicans still want their pound of flesh for lifting the debt ceiling, but can’t seem to agree on what that flesh should be:

On Thursday, however, two ideas gained traction, with dozens of Republicans predicting that versions of the pitches could hit the floor next week once House members return to Washington. At the top of the list: a proposal to link a one-year extension of the debt ceiling to a restoration of recently cut military benefits. Another popular option is tying the “doc fix,” which would alter the way doctors are reimbursed for Medicare treatments, to an extension. Changes to the federal budget that would reduce fraud or mandatory spending levels also have been mentioned.

Danny Vinik explains the most popular option:

House leadership is considering undoing the changes that the budget agreement made to the cost-of-living-adjustment (COLA) for military pensions. Of course, doing that costs money – you didn’t think that Republican debt ceiling extortion actually had something to do with the deficit, did you?

So, how are they going to offset the cost? Nothing has been settled on, but Politico’s Jake Sherman and Burgess Everett report that they may use a budget gimmick known as “pension smoothing” to do so. Pension smoothing allows companies to underfund their pensions in the next few years, boosting their profits, and thus increasing government revenues. Thus, the Congressional Budget Office (CBO) shows this as reducing the deficit over the next decade. But beyond that, it increases the deficit, because those firms eventually have to make those pensions contributions, reducing their future profits and therefore government revenue as well.

Kilgore notices that fiscal restraint is no longer the point:

After years of linking the debt limit vote to proposed spending cuts (or mechanisms for forcing spending cuts, from sequestration to a constitutional balanced budget amendment), now suddenly you have Boehner talking about demanding increased spending in exchange for votes to accommodate more public debt. Whatever else this represents, it shows Boehner being more interested in registering a “win” for his conference than in making a coherent argument for reducing both spending and debt.

How Allahpundit sees the GOP’s game:

Reid also took a hardline “no negotiations” approach during the shutdown, you’ll recall, rejecting a bunch of House bills that would have restored funding for discrete parts of the government but not for ObamaCare. Fund everything or we’ll fund nothing, he insisted. The sole exception: He passed a bill right before the shutdown began to keep money flowing to the military so that troops wouldn’t miss a paycheck. Boehner’s counting on the same thing happening now.

Bernstein blames the GOP’s radicals for obstructing responsible policymaking:

Instead of “forcing” Democrats to accept something they oppose, Boehner now is seeking to use something many Democrats want. That’s what a normal party does: use marginal legislative leverage to attempt to win marginal gains. Of course, Democrats could still hold out for a clean debt limit increase, or they could pile on their own matching demands (say, the minimum wage, or restoring recently-passed cuts in food stamps, or any other Democratic priority that’s popular). Normal parties would then negotiate their way to a win-win deal, because policy doesn’t have to be zero-sum.

But that wouldn’t satisfy Republican demands for extortion for the sake of extortion.

Chotiner isn’t too worried:

[E]ven if Obama were to fold, there is something else that has rendered the debt ceiling hostage racket useless. John Boehner, who quite obviously does not want to rely on the good graces of Kevin Costner, has shown that he won’t let the country default. Not only is Obama unwilling to pay the ransom, then, but Boehner is unwilling to harm the economy. It’s sort of like when someone gets kidnapped in a PG-rated movie: you know nothing too bad will be allowed to occur.

Cillizza analyzes Boehner’s statement yesterday that “There’s widespread doubt about whether this administration can be trusted to enforce our laws”:

Making President Obama the issue is never a bad thing for a Republican Speaker who wants to keep his job. If the narrow window to pass immigration reform closes entirely sometime between now and November, Boehner has now created a perfect political scapegoat on which to blame things. Look, President Obama never was willing to build the relationships with my members I told him he needed to, Boehner will now be able to tell both his conference and conservative Republican activists across the country. And, those folks are already more than willing to believe that narrative.

Immigration reform isn’t dead — yet. But Boehner’s assessment of its chances on Thursday are what sharp political minds have known all along: It’s a triple bank shot (or a Triple Lindy). Possible, but far from likely.

Weigel chides the media for making too much of the statement. Allahpundit thinks it makes more sense for the speaker to pursue reform after the elections:

Here’s the question: If he could get more of a Republican buy-in next year, why shouldn’t he wait? Matt Lewis argued the other day that amnesty opponents will always gin up some sort of excuse related to the timing to keep kicking the immigration-reform can down the road, but I simply can’t believe party leaders and their business backers will send the GOP nominee into battle in 2016 without arming him with some sort of amnesty to show Latino voters. It might be a limited one like DREAM, but something’s going to happen. Even Raul Labrador, who said this week that pushing immigration now could cost Boehner his gavel, says immigration is “one of the first things we should do” in 2015 once it controls the Senate again.

Sargent’s view:

[T]here’s just no reason to assume reform will be any easier for Republicans next year than it is right now, and there are multiple scenarios in which it could be harder next year. And if it doesn’t get done in 2015, Republicans will be heading into the next presidential election having failed to embrace reform yet again — after yet another contentious debate marked by who knows what sort of rhetoric — making relations with Latinos still worse, as demographic reality marches on.

Jay Newton-Small thinks immigration reform will stall. Among her reasons:

Most Republicans want to wait to pass immigration reform until next year, after the midterm elections. The problem with that scenario is that the 2016 presidential race will heat up the minute the midterms are over. And while Democrats have every incentive to push for a deal now, they could lose a powerful wedge issue at the polls in 2016 if they pass a deal next year. Sure, Obama probably would like to see something get done to burnish his legacy. But Democrats may argue that they could get a better deal in 2017, especially if they lose the Senate in November.

Larison sees a lose-lose scenario for Republicans:

Republicans stand to gain nothing if they help Obama achieve one of his legislative goals. Meanwhile, their “compromise” position of favoring legalization without citizenship so reeks of cynicism that it won’t be appealing to anyone outside the party. Indeed, favoring legalization without the possibility of citizenship is in some respects the most insulting position one can take, since it provides amnesty for those here illegally while keeping them as a non-citizen underclass that will continue to compete with American labor.

Benen summarizes the bad news:

The new report from Bureau of Labor Statistics shows the U.S. economy added 113,000 jobs in January, well below economists’ expectations. The unemployment rate dropped to 6.6% – its lowest point since October 2008 – but that’s cold comfort given the overall data, and is likely affected by congressional Republicans’ decision to cut off jobless benefits for the long-term unemployed. As is often the case, there was also a sizable gap between the public and private sectors – in January, businesses added 142,000 jobs, while spending cuts forced 29,000 government job losses.

Felix Salmon uses the chart above, which is from Betsey Stevenson, to cast doubt on the numbers:

[J]ust look at how we got to that 113,000 figure. We took January’s workforce, of 135,396,000 people, and then subtracted December’s workforce, of 138,266,000 people — for a total decrease of 2,870,000 jobs. But we know that the number of jobs in America always decreases in January — even when the economy is surging. It’s cold out, making outdoor jobs very difficult to do, and the Christmas seasonal jobs are all in the past. So the BLS institutes some seasonal adjustments. In this case, it subtracted 880,000 jobs from the December number, and it added 2,103,000 jobs to the January figure.

All of which means that the 113,000 headline figure is, in fact, 135,396,000 + 2,103,000 – 138,266,000 – 880,000. You want to trade on that being 70,000 jobs lower than you thought it would be?

Cassidy largely blames the numbers on bad weather:

The cold snap does bear part of the blame for this dramatic dropoff. When it’s freezing cold, consumers tend to stay indoors, spending falls, and firms tend to put off hiring new workers. The figures that the Labor Department publishes have already been adjusted to take account of normal seasonal variations. But we’ve been experiencing abnormal variations, which must have had some effect.

Jeffrey Sparshott disagrees:

“Weather was a clear drag on December, but this actually reversed in January,” said Morgan Stanley economist Ted Wieseman.

Indeed, nationwide the weather wasn’t that bad. While December registered the coldest temperatures for the month since 2009, the National Weather Service isn’t expecting a dramatically cold January relative to records from the last 120 years. It was warm in the Rocky Mountains and West, balancing conditions in East, a spokeswoman said.

Ylan Mui also doubts that the weather is playing a big role:

So if it’s not the weather, what is it? Why is the labor market still so weak? There are no easy answers to that question. Without weather as a scapegoat, it raises the uncomfortable prospect that the economy’s potential for growth is lower than we would like it to be.

Alan Pyke notes the continued disconnect between public and private sector jobs:

State, local, and federal government payrolls shrank by 29,000 jobs in January, according to the Bureau of Labor Statistics data released Friday, continuing a damaging and historically unusual trend that has undermined the economic recovery throughout the past five years.

Despite spiking briefly during the 2010 Census, the public-sector workforce nationwide isnearly three-quarters of a million jobs smaller than it was when President Obama took office. In that same time, the private sector has added 3.5 million jobs on net, even after accounting for the millions of jobs lost in the economic free fall five years ago

Barry Ritholtz calls the report “mostly meaningless”:

To me, the most fascinating aspect of the employment report is the hoopla leading up to it. It is merely a single monthly data point in an ongoing series, one that 90 percent of the time is almost insignificant.