Daily Digest - February 14: America Loses When Cable Giants Play Monopoly

Feb 14, 2014Rachel Goldfarb

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There will not be a new Daily Digest on Monday, February 17, in observance of Presidents' Day. The Daily Digest will return on Tuesday, February 18.

Comcast's Time Warner Deal Is Bad for America (Bloomberg Businessweek)

Click here to receive the Daily Digest via email.

There will not be a new Daily Digest on Monday, February 17, in observance of Presidents' Day. The Daily Digest will return on Tuesday, February 18.

Comcast's Time Warner Deal Is Bad for America (Bloomberg Businessweek)

A Comcast-Time Warner Cable monopoly won't just limit choice for consumers, says Roosevelt Institute Fellow Susan Crawford. The combined company will have no reason to upgrade infrastructure.

Just How Much Do Republicans Hate Unions? (TAP)

Volkswagen seems to be supportive of a union at its Chattanooga, TN plant. That means the GOP pushback is just about opposing organized labor in general, writes Paul Waldman.

It's Time to Kill the Debt Limit (The Daily Beast)

Jamelle Bouie says that the easiest way to stop the cycle of debt ceiling crises of the past few years would be to abolish it altogether, since it's a pointless and redundant concept anyway.

Should We Place A Tax On All College Graduates? (Forbes)

Josh Freedman considers this alternative model of funding for public higher education. He quotes Roosevelt Institute Fellow Mike Konczal to express concern about whether such taxes would lead to class-segregated schools.

How Credit-Card Debt Can Help the Poor (NYT)

Since good credit affects so many aspects of life in the U.S., Shaila Dewan writes that special loans that build credit alongside savings could make a big difference.

New on Next New Deal

Conservatives Concerned About the CBO and the Dignity of Work Should Consider a Higher Minimum Wage

Roosevelt Institute Fellow Mike Konczal suggests that a higher minimum wage could solve Republican concerns about people who choose to work less due to the Affordable Care Act and means-tested programs.

A New Medicare Penalty Puts the Focus on Community Health

Anisha Hegde, Roosevelt Institute | Campus Network Senior Fellow for Health Care, says that expanding community health resources and workers will help patients and reduce costs in the health care system.

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Daily Digest - February 13: Public Finance Can Help Weather the Storm

Feb 13, 2014Rachel Goldfarb

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Preparing for Disaster by Betting Against It (NYT)

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Preparing for Disaster by Betting Against It (NYT)

The Metropolitan Transit Association's catastrophe bond, a type of insurance to cover the costs of future storms like Hurricane Sandy, could be a model for disaster prep, says Roosevelt Institute Fellow Georgia Levenson Keohane.

A Comcast-Time Warner Cable Deal Would Combine Two of America’s Most-Reviled Companies (Quartz)

Adam Pasick reports on the newly-announced merger plan. He quotes Roosevelt Institute Fellow Susan Crawford, who predicts that the only way this will affect customers is through higher prices.

GOP Succumbs to Rare Outbreak of Sanity (The New Yorker)

John Cassidy says the moment passed after the House voted to raise the debt ceiling. Ted Cruz's reaction proved that nothing had changed, even as the debt ceiling increase passed the Senate.

I Can’t Find Enough Skilled Workers! (At the Crappy Wage I’m Offering…) (On The Economy)

When employers complain about a lack of skilled workers, Jared Bernstein says they're forgetting the second half of that equation. Case in point: regional airline pilots, who sometimes barely break minimum wage.

After Outcry, White House Extends $10.10 Minimum Wage to Some Disabled Workers (In These Times)

Mike Elk reports on the change, which follows public objections to keeping disabled workers' wages lower than the minimum. Disabled service and concessions workers will now get minimum wage, not less.

Up in Arms Over Union ‘Persuader’ Rule (The Hill)

Kevin Bogardus and Ben Goad report on the proposed regulation, which would require companies to disclose when they bring in legal consultants on union election strategy.

America Has Forgotten Its Three Biggest Economic Lessons (Salon)

According to Robert Reich, those lessons are that consumers create jobs, the rich do better with a smaller share of a growing economy, and taxes pay for public investment that helps everyone.

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Daily Digest - February 12: Higher Pay Won't Hurt Workers

Feb 12, 2014Rachel Goldfarb

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Who Would Benefit From a Minimum Wage Hike? (Your Call Radio)

The aggregate effects of a minimum wage increase wouldn't lead to job losses, says Roosevelt Institute Fellow Mike Konczal, and it's the easiest way to boost our economy.

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Who Would Benefit From a Minimum Wage Hike? (Your Call Radio)

The aggregate effects of a minimum wage increase wouldn't lead to job losses, says Roosevelt Institute Fellow Mike Konczal, and it's the easiest way to boost our economy.

Now That Boehner Has Backed Down, Let's Fix The Debt Ceiling For Good (TNR)

Since the House GOP has approved a clean debt limit increase, Eric Posner argues it's time to pass legislation that would end this game of chicken over the national debt forever.

Yellen Sets a Familiar Direction for the Fed (NYT)

Binyamin Appelbaum reports that the new Fed chair's testimony to the House Financial Services Committee emphasized that many policies will remain the same under her leadership.

What Do the Jobless Do When the Benefits End? (WaPo)

Ylan Mui interviews people about how they're getting by, and since none of her subjects have full-time work, the GOP theory that benefits keep people from taking jobs seems unlikely.

Why Democrats Will Win on Unemployment Insurance (The Atlantic)

Sarah Mimms writes that the Democrats will come out on top whether they get an extension on unemployment insurance or not. No extension? Then there's the campaign message for 2014.

Responsible Contractors Only: How to Ensure Obama’s Minimum Wage Order Is Enforced (PolicyShop)

Building a "responsible contractor" enforcement mechanism into his executive order will help the president to ensure workers actually get the raise he called for, writes Amy Traub.

Anatomy of a Hunger Crisis (MSNBC)

New York City's food pantries are already unable to handle the needs of the city's hungry, according to Ned Resnikoff, and the president has just signed another round of cuts to food stamps.

New on Next New Deal

The Three Big Questions Janet Yellen Should Answer in Today's Testimony

With the new Fed chair delivering her first testimony to Congress this week, Roosevelt Institute Fellow Mike Konczal lays out what we need to know about her views on the taper, financial reform, and unemployment.

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The Three Big Questions Janet Yellen Should Answer in Today's Testimony

Feb 11, 2014Mike Konczal

Janet Yellen has her first Humphrey-Hawkins testimony today, where she’ll give a prepared speech, already released online, and testify before the Republican-controlled House Financial Services committee. What are the points that she’ll need to cover?

The first element is how and when she’ll manage the so-called “taper” of monetary policy. At the end of 2012, the Federal Reserve started an extensive program of monetary stimulus designed to boost the economy. They declared that this would stay in full effect until unemployment dropped to 6.5 percent.

We are close to hitting that threshold. The unemployment rate is at 6.6 percent, and will fall below 6.5 percent very soon. Yellen, in her testimony, emphasizes a broader picture of unemployment than just the headline rate, including the amount of people working part-time against their choice and the amount of long-term unemployed.

What’s even more interesting, and a bit new, is her statement that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal.”

Hopefully Congress will ask her to consider these choices in light of the last two weak job reports. Isn’t it more appropriate to step on the gas rather than test the brakes? However, she’ll likely encounter a skeptical Congress, and as such it will be essential for Yellen to make the case that the weak job numbers, combined with the vagueness of what the headline unemployment rate is telling us, requires continued monetary action.

The second point is how she'll handle financial reform. Given that Yellen is considered a monetary dove, it’s been interesting to see the amount of questions she’s taken from Congress about where Dodd-Frank and other reforms stand. This will no doubt continue into this testimony.

Financial reform has hit an interesting point where much of the rule-writing from the Dodd-Frank Act is finished, and now there’s a transition to both enforcement and clean-up action. Yellen notes in her testimony that rules related to derivatives as well as capital requirements still remain in the works. It would be useful for Congress to ask her where she thinks capital requirements for the largest firms should ultimately end up. Does she think that this number is too high, or too low?

It would also be fascinating for someone to ask Yellen about the recent wave of “postal banking” coverage, and the role the government can play in providing essential banking services to unbanked and underbanked Americans.

The third and most important is how the Federal Reserve will transition to prevent periods of mass unemployment like we are currently experiencing. Is a 2 percent inflation target either high enough, or the right target, for the job?

Sadly, this will be the topic least covered of them all. However, it’s the one that is most essential for preventing the economy from falling back into the situation it now finds itself in.

Mike Konczal is a Fellow at the Roosevelt Institute.

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Image via Federal Reserve

Janet Yellen has her first Humphrey-Hawkins testimony today, where she’ll give a prepared speech, already released online, and testify before the Republican-controlled House Financial Services committee. What are the points that she’ll need to cover?

The first element is how and when she’ll manage the so-called “taper” of monetary policy. At the end of 2012, the Federal Reserve started an extensive program of monetary stimulus designed to boost the economy. They declared that this would stay in full effect until unemployment dropped to 6.5 percent.

We are close to hitting that threshold. The unemployment rate is at 6.6 percent, and will fall below 6.5 percent very soon. Yellen, in her testimony, emphasizes a broader picture of unemployment than just the headline rate, including the amount of people working part-time against their choice and the amount of long-term unemployed.

What’s even more interesting, and a bit new, is her statement that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal.”

Hopefully Congress will ask her to consider these choices in light of the last two weak job reports. Isn’t it more appropriate to step on the gas rather than test the brakes? However, she’ll likely encounter a skeptical Congress, and as such it will be essential for Yellen to make the case that the weak job numbers, combined with the vagueness of what the headline unemployment rate is telling us, requires continued monetary action.

The second point is how she'll handle financial reform. Given that Yellen is considered a monetary dove, it’s been interesting to see the amount of questions she’s taken from Congress about where Dodd-Frank and other reforms stand. This will no doubt continue into this testimony.

Financial reform has hit an interesting point where much of the rule-writing from the Dodd-Frank Act is finished, and now there’s a transition to both enforcement and clean-up action. Yellen notes in her testimony that rules related to derivatives as well as capital requirements still remain in the works. It would be useful for Congress to ask her where she thinks capital requirements for the largest firms should ultimately end up. Does she think that this number is too high, or too low?

It would also be fascinating for someone to ask Yellen about the recent wave of “postal banking” coverage, and the role the government can play in providing essential banking services to unbanked and underbanked Americans.

The third and most important is how the Federal Reserve will transition to prevent periods of mass unemployment like we are currently experiencing. Is a 2 percent inflation target either high enough, or the right target, for the job?

Sadly, this will be the topic least covered of them all. However, it’s the one that is most essential for preventing the economy from falling back into the situation it now finds itself in.

Mike Konczal is a Fellow at the Roosevelt Institute.

Follow or contact the Rortybomb blog:

  
 
Image via Federal Reserve

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Daily Digest - February 11: Raising Wages from Coast to Coast

Feb 11, 2014Rachel Goldfarb

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The Minimum Wage Fight: From San Francisco to de Blasio’s New York (Reuters)

Mayor de Blasio and others should learn from San Francisco's example when it comes to lifting standards for low-wage workers, write Ken Jacobs and Michael Reich.

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The Minimum Wage Fight: From San Francisco to de Blasio’s New York (Reuters)

Mayor de Blasio and others should learn from San Francisco's example when it comes to lifting standards for low-wage workers, write Ken Jacobs and Michael Reich.

Horrible Bosses (TAP)

Paul Waldman writes that some employers are blaming the President and his health care policies for benefit cuts and stagnant wages. But workers should know: their bosses are lying.

Labor Battle at Kellogg Plant in Memphis Drags On (NYT)

As the lockout approaches four months, Steven Greenhouse says these workers are determined not to accept a contract that could replace them all with "casuals," or lower-paid temps.

New York AG To Put Heat On Banks for Foreclosed Properties (WSJ)

Eric Schneiderman wants to require banks to take better care of so-called "zombie properties" they've foreclosed on, reports Andrew R. Johnson, and his proposed bill would reduce neighborhood blight.

Obama's Partly to Blame for the Postal Service's Backward Ways (TNR)

Progressive reform, including postal banking, is in reach for the USPS, says David Dayen, if only the president would step up and fill the five empty seats on its Board of Governors.

Support the Student Loan Borrower Bill of Rights (Blog of the Century)

Jill Silos-Rooney says Senator Warren's proposal bets that college grads who have fewer struggles with debt will be better for the economy than government profits on student loans.

House GOP Rolls Dice on Debt Limit (Politico)

Jake Sherman and Ginger Gibson report on the GOP's plan to pass a debt ceiling increase by tying it to fixing military benefit cuts. That probably won't sway Democrats from a clean bill.

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Daily Digest - February 10: When the Personal Becomes Political

Feb 10, 2014Rachel Goldfarb

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Turning Personal Tragedy Into Activism (Melissa Harris-Perry)

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Turning Personal Tragedy Into Activism (Melissa Harris-Perry)

Roosevelt Institute Fellow Dorian Warren discusses how tragedies like the deaths of Trayvon Martin and Jordan Davis have pushed so many to take part in activism. He uses the public pressure to cancel George Zimmerman's celebrity boxing match as a prime example.

Sex Workers' Rights are Just Workers Rights (WaPo)

Roosevelt Institute Fellow Mike Konczal considers the policy arguments on sex work presented in Melissa Gira Grant's new book, Playing the Whore. He sees the need to conceptualize sex work as labor as the most important takeaway, regardless of individual opinions on that labor.

Liberals Should Question Obama’s ‘Opportunity Agenda’ (AJAM)

Mike Konczal argues that shifting the discussion from inequality to opportunity could leave out key items on the progressive agenda. If opportunity isn't defined beyond legal equality of opportunity, or if acceptable policy outcomes aren't made clear, the progressive agenda won't advance.

The Case for a Higher Minimum Wage (NYT)

The New York Times editorial board calls for an increased minimum wage, emphasizing its purpose in reducing power imbalances between workers and employers. The accompanying interactive graphic from Jeremy Ashkenas and Bill Marsh shows the insufficiency of $7.25 per hour.

January Jobs Report: Hard to Read (MoJo)

Erika Eichelberger says that the jobs report released on Friday is hard to interpret. Unemployment is at its lowest point in five years, and the labor force participation rate increased slightly, but that could change without an extension of unemployment benefits from Congress.

The Spectacular Myth of Obama's Part-Time America—in 5 Graphs (The Atlantic)

Derek Thompson pulls data on part-time job growth, part-time workers as a share of the labor force, and part-time work for non-economic reasons to demonstrate just how wrong certain slices of the financial media are when they insist that the president is creating a part-time economy.

Obamacare: It's a Net Gain for the Economy (LA Times)

Jonathan Gruber writes that the Congressional Budget Office report shows that the Affordable Care Act in fact creates a more efficient job market in the U.S., by allowing people leave jobs when they want to and increasing job mobility.

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Daily Digest - February 7: Why America Keeps Falling Behind

Feb 7, 2014Rachel Goldfarb

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When It Comes To High-Speed Internet, U.S. 'Falling Way Behind' (Fresh Air)

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When It Comes To High-Speed Internet, U.S. 'Falling Way Behind' (Fresh Air)

Dave Davies interviews Roosevelt Institute Fellow Susan Crawford, who discusses why net neutrality is so important and how the FCC can preserve it. They also talk about the Internet infrastructure in the U.S., which needs improvements to compete globally.

Cities at Work: Progressive Local Policies to Rebuild the Middle Class (CAP)

Joel Rogers and Satya Rhodes-Conway introduce their new report on why local governments are best suited to strengthen the middle class. They point to cities' wealth, sustainability, and democratic values and organization as key reasons.

  • Roosevelt Take: Roosevelt Institute Associate Director of Networked Initiatives Alan Smith discusses the Roosevelt Institute | Campus Network's "Rethinking Communities" initiative, which is similarly focused on local economic development.

Skating Close to the Edge, Again, on the Debt Ceiling (NYT)

Annie Lowrey writes about global fatigue over the U.S. debt ceiling stand-offs, with everyone from Democrats in Congress to international financial managers expressing exhaustion with the tactic. She says the damage to the country's financial reputation is done, no matter the outcome this time.

Obamacare Cures 'Job Lock' (USA Today)

Theda Skocpol and Katherine Swartz praise the end of 'job lock,' when workers are reluctant to leave jobs because they need the employer-sponsored health insurance. Freeing those workers is going to encourage innovation and entrepreneurship.

Senate Still at Odds Over Whether to Extend Unemployment Benefits for Long-Term Jobless (WaPo)

Paul Kane reports that Senate Democrats again failed to pass an extension of long-term unemployment benefits, falling just one vote shy of the supermajority needed to break a filibuster. Of course, he notes, House Republicans have shown no interest in taking up this issue anyway.

The Shame of America's Long-Term Unemployment Crisis (The Atlantic)

Derek Thompson says that Washington is failing on long-term unemployment, which is a serious crisis for the U.S. job market. There could be ways to incentivize hiring the long-term unemployed, but that would require the GOP to care about this problem.

New on Next New Deal

A CBO Report Shows How Obamacare Will Help the Working Poor

Roosevelt Institute Senior Fellow and Director of the Bernard L. Schwartz Rediscovering Government Initiative Jeff Madrick writes that the money that low-income families won't have to spend on health insurance, thanks to Medicaid expansion and insurance subsidies, will boost the economy when it's spent elsewhere.

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Mike Konczal on What's Next for Financial Reform

Feb 6, 2014

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Fran

In a new episode of the Roosevelt Institute's video explainer series, "What's the Deal," Roosevelt Institute Fellow Mike Konczal talks about what the Dodd-Frank financial reform law accomplished, what still needs to be done to change the system, and why there are reasons for reformers to be optimistic.

For more, check out An Unfinished Mission: Making Wall Street Work for Us, a report co-edited by Konczal.

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A CBO Report Shows How Obamacare Will Help the Working Poor

Feb 6, 2014Jeff Madrick

Never mind the conservative fear-mongering. The Affordable Care Act's subsidies will boost the economy and free workers who were locked into their jobs.

Never mind the conservative fear-mongering. The Affordable Care Act's subsidies will boost the economy and free workers who were locked into their jobs.

The attack on the Affordable Care Act by conservative Republicans after the release of the Congressional Budget Office's new report was desperate. Bravo to much of the media for setting the story straight almost immediately. But so strong is the anti-government bias involving social policy that critics hardly stopped to think.

No, businesses were not about to issue a couple of million pink slips, as Senate Republicans put it. Rather, because of the subsidy to buy health care, people could choose to quit their jobs or work fewer hours and lead a marginally better life. Heaven forbid.

And that’s the real rub. Republicans must think this is a new dole for the undeserving. But actually, it’s another example of how perverse and unfair the health care system in America is. In other words, according to CBO estimates, 2 million people or so were basically working so they could get insurance. Working makes acquiring health care cheaper because you are in a group plan and the employer will often help subsidize the price. (Of course, that subsidy partly results in lower wages for the worker.)

Because many Americans work just to get health care, they are locked into their jobs. And this may reduce their desire to bargain for higher wages out of fear of being fired.

A few points should be kept in mind. The determinedly objective CBO is by no means always right. It is a peculiar construction, in fact. The CBO is not allowed to make sensible assumptions about the economy, but instead has to stick to the current law. So it can’t anticipate, except as an exception to the main forecast, a change in tax rates or stimulus. The CBO builds in a recovery from a recession automatically—a clockwork interpretation of what economists know as Say’s law, which holds that economies will bounce back automatically as wages, prices, and interest rates stagnate or fall. This notion was anathema to John Maynard Keynes. The CBO makes absurdly precise projections of events 10, 20, and 30 years out. All the while, it wears the mask of objectivity.

The CBO’s estimate that Obamacare will result in 2 million people or so leaving the workforce, it admits, is “substantially uncertain.” There’s an understatement. Just a couple of years ago, it figured the number to be much less. But it says it did a more comprehensive analysis and included a few more recent studies, mostly about cuts in Medicaid. Some studies show that when a couple of states cut funding for Medicaid, people started looking for work. Other studies show little impact, however.

A subsidy for the poor, as Obamacare is, benefits the poor. As the working poor make more money, however, the subsidy diminishes. They may leave their jobs as a result, now able to afford health care on their own.

The CBO also said, however, that Obamacare “will boost overall demand for goods and services over the next few years because the people who will benefit from the expansion of Medicaid and from access to the exchange subsidies are predominantly in lower-income households and thus are likely to spend a considerable fraction of their additional resources on goods and services.” In contrast, people who will pay the modest increase in taxes to support the subsidies “are predominantly in higher-income households and are likely to change their spending to a lesser degree.”

Just what the doctored ordered for a sick economy!

In addition, the drop in total labor compensation as people quit their jobs will be less than the drop in the number of hours worked. Fewer hours worked but not as much lost in income. Pretty good policy. 

Jeff Madrick is a Senior Fellow at the Roosevelt Institute and Director of the Bernard L. Schwartz Rediscovering Government Initiative.

 

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Daily Digest - February 6: Putting the Brakes on the High-Tech Economy

Feb 6, 2014Rachel Goldfarb

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Cable Cabal Tries to Block Future in Kansas (Bloomberg View)

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Cable Cabal Tries to Block Future in Kansas (Bloomberg View)

Roosevelt Institute Fellow Susan Crawford explains why a proposed law barring municipal fiber-optic networks in Kansas, like similar bills passed in 19 other states, would put the U.S. further behind on building the infrastructure needed for high-tech industries of the future.

Breaking: Union Rule Despised by Right-Wingers Now Roaring Back to Life (Salon)

Josh Eidelson reports on the return of a rule requiring speedier union elections, quoting Roosevelt Institute Fellow Dorian Warren to point out that the rule isn't exactly radical. But employers are unhappy, because it allows less time to convince employees to reject organized labor.

  • Roosevelt Take: Bryce Covert interviewed Dorian about his research on workplace anti-union campaigns and the original version of this National Labor Relations Board rule from 2011.

On Jobs, Conservatives are Completely Full of It (WaPo)

Ryan Cooper calls out Republicans for distorting the Congressional Budget Office's prediction that Obamacare will lead to people choosing to work less. Reducing labor supply will decrease unemployment and raise wages, and the GOP hasn't offered many alternatives.

A Report’s Real Message: It Wasn’t About Health Care (NYT)

Jared Bernstein asks why it seems that the only thing anyone is talking about after the release of the CBO's "Budget and Economic Outlook" report is health care, when the report is really a warning about our disturbingly slow economic growth.

What to Watch on Jobs Day: Yes, We Should Still Be Worried About the Labor Force Participation Rate (Working Economics)

Heidi Shierholz writes that beating December's job growth is a low bar for the January jobs report, which will come out Friday morning. She's more concerned about the potential drop in the labor force participation rate due to the end of extended unemployment insurance.

Is This the End of America’s Debt Ceiling Wars? (Quartz)

Tim Fernholz suggests that with Republicans unable to agree on a demand in this round of debt ceiling battles, it's possible that they've just ceded the war. He thinks it's likely that there will just be a clean debt ceiling increase in the coming weeks.

Bipartisanship is Ruining America (The Daily Beast)

Jamelle Bouie points to the new farm bill as an example of everything that can go wrong with bipartisan governance. Hundreds of thousands of families will face painful food stamp cuts, and it isn't even clear who they can vote for or against for a better outcome.

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