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The Economic Report of the President - Keith Hennessey
On Monday Dr. Edward Lazear, Chairman of the President's Council of Economic Advisers, released the Economic Report of the President for 2008. This traditionally is released a week after the President's Budget. It describes the state of the U.S. economy, and also discusses in more detail a range of economic policy issues. As the ERP
Why are gas prices high, and what can we do about it? - Keith Hennessey
The national average price for a gallon of regular unleaded gasoline is one penny short of its all-time high (adjusted for inflation), at $3.22 per gallon. That's about $1 per gallon higher than early last November. In recent years, it reached $3.04 in September of 2005, and $3.00 in August of 2006. Q: Why are gasoline
Veto threat on House energy bills - Keith Hennessey
As a follow-up to last night's note on the energy bills the House is considering today, here is the Statement of Administration Policy (SAP) on these two bills. The key sentence is: Because H.R. 2776 and H.R. 3221 fail to deliver American consumers or businesses more energy security, but rather would lead to less domestic oil
Earmark reform (State of the Union follow-up) - Keith Hennessey
Here's what the President said last night in the State of the Union about earmarks: The people's trust in their government is undermined by congressional earmarks -- special interest projects that are often snuck in at the last minute, without discussion or debate. Last year, I asked you to voluntarily cut the number and cost of
The wrong way to address climate change - Keith Hennessey
The Senate is now debating a climate change bill, typically referred to as the "Lieberman-Warner" bill, referring to Sen. Joe Lieberman (I-CT) and Sen. John Warner (R-VA). Technically, we think they'll end up considering a slightly different version of that bill, offered by the Chair of the Senate Environment and Public Works Committee, Sen. Barbara
President's Working Group on Financial Markets documents - Keith Hennessey
The President's Working Group on Financial Markets met at 8:30 AM today to announce the specifics of the new policy actions described by the President in the Rose Garden earlier this morning. This note is just a collection of primary source documents from today's announcement. Generalists will likely be interested in the first six documents, as
More oil supply - Keith Hennessey
In May of 2007, I wrote Why are gas prices high, and what can we do about it? At the time, the national average price for a gallon of regular unleaded gasoline was $3.22. The national average price is now 59 cents higher, at $3.81 per gallon. That's down 30 cents from a high of
A messy end to a bad farm bill - Keith Hennessey
Now let's look at last week's farm bill procedural snafu. Last Wednesday we thought the farm bill veto would be straightforward: Congress passes the farm bill conference report and sends it to the President. There are several steps in this process. The bill is passed by both Houses. That's the "engrossed bill." This engrossed bill is then "enrolled." This
USA Today op-ed: Keep taxes low - Keith Hennessey
USA Today editorializes today against making the tax cuts permanent, and includes an opposing view from me. I'll include both here. I've learned that he who writes the opposing view is at a disadvantage, in that they get to see what I wrote, but not the reverse. I thought I had anticipated their attacks, but I
Health insurance for poor kids - Keith Hennessey
This past weekend the President signed a short-term extension of a program that finances health insurance for children, called SCHIP: the State Children's Health Insurance Program. We expect the Congress today will send the President H.R. 976, a bill that reauthorizes SCHIP for five years. The President has said he will veto this bill,
Rose Garden Statement by President Bush on financial markets - Keith Hennessey
President Bush spoke at 8:02 AM this morning in the Rose Garden. Good morning. I just completed a meeting with my working group on financial markets. We discussed the unprecedented and aggressive steps the federal government is taking to address the financial crisis. Over the past few weeks, my administration has worked with both parties
President Bush vetoed the farm bill - Keith Hennessey
I wrote the following last Wednesday evening, in anticipation of a straightforward farm bill veto. Little did I know the procedural snafu that would arise. I have since edited it and written a follow-up. I will send the follow-up email soon. The first, written last Wednesday and included below, explains what we thought would happen. The
Extending unemployment insurance - Keith Hennessey
Some have been arguing that the growth package should extend the availability of unemployment insurance (UI) benefits. I'd like to cover three points in response: Unemployment benefits have never before been extended when the unemployment rate is as low as it is now, or before the economy has been in a recession. Extending unemployment benefits will not have
The President's trip to Europe - Keith Hennessey
The President left this morning for a nine-day trip to Europe. Q: Where is he going? A: (1) Prague, Czech Republic. (2) Heiligendamm, Germany, for the G-8 meetings. (3) Jurata and Gdansk, Poland. (4) Rome and the Vatican. (5) Tirana, Albania. (6) Sofia, Bulgaria. The G-8 meetings are Wednesday, Thursday, and Friday. There
The Farm Bill will be vetoed - Keith Hennessey
We expect the House to vote on the Farm Bill conference report today. The President will veto this bill. Here is the President's statement on the bill. The final legislative language for the conference report was released Tuesday morning. Hint: If you want to find the really bad stuff in a big bill, always start at
Veto threat: Fairness Doctrine - Keith Hennessey
The Federal Communications Commission (FCC) instituted the Fairness Doctrine regulation in 1949, requiring that broadcasters design programs "so that the public has a reasonable opportunity to hear different opposing positions on the public issues of interest." The FCC abolished the Doctrine in 1987 after concluding that "a multiplicity of voices in the marketplace assured diversity of
Subprime mortgages - Keith Hennessey
In the Rose Garden last Friday, the President proposed policy changes to address problems in the subprime mortgage market. Here are his remarks and a fact sheet. I'm going to do this in three parts: (1) give a few definitions for those who are new to the housing finance world; (2) define the
Subprime mortgages, part 2 - Keith Hennessey
This is part two (of two) of your crash course on problems and solutions in the mortgage markets. Here's part one. There is also a great op-ed on the financial market impacts of these mortgage market problems. It ran in today's Financial Times, and was coauthored by two Administration officials: Treasury Undersecretary for
Third party liability - Keith Hennessey
We gave our policy views recently to the Solicitor General (who represents the Administration in front of the Supreme Court) on a case called Stoneridge Investment Partners v. Scientific-Atlanta. The core policy issue at stake is one of third party liability, and it's an important element of an ongoing debate about litigation and whether the
Are taxes too low? - Keith Hennessey
President Bush has signed into law 15 bills cutting taxes. The 2001 and 2003 tax laws were the biggies. Here's a list. This President has a well-established record as a tax cutter. Many of our critics argue that we cut taxes too much, and that we need to repeal some or all of the enacted
A bipartisan economic booster shot - Keith Hennessey
Last Friday the President spoke about the need for additional Congressional action on the economy. Outsiders are referring to this as fiscal stimulus. We've been calling it a growth package. There's a lot to say, so I'm going to break this up into three big parts. what the President proposed;
Subsidizing Manhattan farmers - Keith Hennessey
Here's an excerpt from Agriculture Secretary Mike Johanns' remarks to the Tennessee Farm Bureau Federation in Nashville on August 9th. Now you're looking at that map and you're saying to yourself, Mike, you're the Secretary of Agriculture, and you're supposed to be talking about agriculture and that looks like a map of a city. It is
Much ado about nothing: the House energy bill - Keith Hennessey
In his State of the Union address, the President proposed an energy plan we call Twenty in Ten. The goal is to reduce U.S. gasoline usage by 20% within 10 years (by 2017). There are two main components to 20 in 10 that would reduce gasoline usage: fuel economy standards - we would increase the CAFE
Statement by Treasury Secretary Hank Paulson - Keith Hennessey
The President will speak at 10:45 AM. I'll send his remarks soon after he has spoken. Here's what Secretary Paulson said shortly after 10 AM this morning. Last night, Federal Reserve Chairman Ben Bernanke, SEC Chairman Chris Cox and I had a lengthy and productive working session with Congressional leaders. We began a substantive discussion on
Food prices & food aid - Keith Hennessey
The President spoke this afternoon about high food prices and food aid. If you'd like more detail, here's our "fact sheet." And if you really want to dive down deep, here is a transcript of a press briefing done by three senior administration officials after the announcement: OMB Deputy Director Steve
The G-8 agreement (especially on climate change) - Keith Hennessey
Here is the 38-page "Summit Declaration" from the G8 summit, released earlier today. The summit and the document cover many important economic topics. I'm going to focus on the climate change section, which is receiving a lot of press coverage. We are very pleased. Let me start with some quotes from the President while he was
Rose Garden Statement by President Bush on the Economy - Keith Hennessey
Here's what President Bush said at 10:45 AM today in the Rose Garden. This is really important. Good morning. I thank Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox for joining me today. This is a pivotal moment for America's economy. Problems that originated in the credit markets -- and first
Defense earmarks - Keith Hennessey
Each year Congress considers the "defense authorization bill." This bill gives the U.S. military its legal authorities. The House passed this bill last Thursday. One provision in the bill would attempt to limit the President's ability to ignore certain earmarks in the report language that accompanied the bill. This is an important moment in the debate
The President's speech on financial markets and the world economy - Keith Hennessey
President Bush spoke at the Manhattan Institute today on financial markets and the world economy. This speech is a prelude to the financial summit the President will host this weekend. I'll write separately about the Summit, and about the elements of today's speech that talk about principles for reform. I want to draw your attention to
What did President Bush announce today on climate change? - Keith Hennessey
The President spoke today to the U.S. Global Leadership Council about America's international development agenda. You can find his remarks here. His wide-ranging speech covered trade, debt relief, education, AIDS, and malaria. There was a lot to highlight, but I'm going to focus first on his new climate change proposal. Here's the key quote: In
Address by President Bush on financial markets - Keith Hennessey
President Bush gave a major policy address on the State Floor of the White House this evening. THE WHITE HOUSE State Floor 9:01 P.M. EDT THE PRESIDENT: Good evening. This is an extraordinary period for America's economy. Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and
Debt and the real threat - Keith Hennessey
Monday the President proposed his budget for Fiscal Year 2009. This is the first "e-Budget" - it was transmitted electronically as an official document to the Congress, and was digitally signed by the Executive Clerk. At a press conference Monday, Senate Budget Committee Chairman Kent Conrad (D-ND) said: But let me emphasize to you what I see
Stimulus 2008: a need for speed - Keith Hennessey
The House passed the bipartisan growth bill (aka the "stimulus bill") yesterday on an overwhelming 385-35 vote. 93% of Democrats and 85% of Republicans voted aye. That vote is a direct result of the cooperation among Speaker Pelosi, Republican Leader Boehner, and Treasury Secretary Hank Paulson on behalf of the President. The bill now
Taxpayers subsidizing rich farmers - Keith Hennessey
This week we expect the House will consider legislation to extend agricultural programs, more commonly known as the Farm Bill. We think the Farm Bill needs significantly more reform than the bill that will be brought to the House floor. In some cases, that bill actually moves in the wrong direction. Here is our Statement
What caused this financial mess? - Keith Hennessey
President Bush spoke today about the financial crisis to the U.S. Chamber of Commerce. I'm going to use the President's speech as an opportunity to explain to a non-financial audience what the Federal government did this week and why. I will oversimplify in many cases, and will gloss over many details. I don't claim that
Are banks hoarding taxpayer investments? - Keith Hennessey
We're getting questions about whether banks that receive taxpayer funds from the Treasury are "hoarding" that cash, rather than using it to support lending. We know that banks aren't hoarding yet, since at most they've had cash for two days. Remember that there is a two-fold purpose to this program: (1) strengthen the banking system (prevent a
Economic highlights of the State of the Union address - Keith Hennessey
The President delivers his State of the Union address this evening, beginning just after 9 PM. We typically release "fact sheets" along with the address. Since the big document is 36 pages long, we also have versions of the different component fact sheets on whitehouse.gov. Here are the economic ones: Economy
The Mid-Session Review - Keith Hennessey
The President spoke about the budget yesterday when we released the Mid-Session Review, the summer update of the budget numbers. Here's the least you need to know: This year's deficit (for Fiscal Year 2007) is now projected to be $205 billion. Good news: That's $43 billion lower than
A "second stimulus?" - Keith Hennessey
We are frequently asked whether there should be a "second stimulus" bill. Unfortunately, what is being considered on Capitol Hill is a very different animal from what we did earlier this year. 10-second macroeconomic review GDP = Consumption + Investment + Government spending + Exports - Imports = C + I + G + X
Enacting President Bush's growth proposal - Keith Hennessey
About three hours ago, the President signed into law H.R. 5140, The Economic Stimulus Act of 2008 , less than four weeks after he first proposed Congressional action. We are enormously pleased with this rapid and bipartisan legislative success. The final bill passed the House 380-34, and the Senate 81-16. Here is