Energy
What to watch for in the State of the Union
FUEL FIX
Jennifer Dlouhy
Energy analysts aren’t sure which Obama they will see on Tuesday night, as he delivers his penultimate State of the Union address: Will it be the president who took aim at oil and gas tax breaks in 2009 or the one who celebrated natural gas three years later?
Oil Export Myths
WALL STREET JOURNAL
Editorial
There’s an inside-the-Beltway debate about the best timing for a vote to lift the export ban, and we’ll leave that to the pros. The point is that allowing oil exports ought to be as much a part of the GOP energy agenda as Keystone XL, liquid-gas exports or relief from the Environmental Protection Agency. It’s the kind of pro-growth policy that voters elected a GOP Congress to support.
Report: Crude exports would boost production, lower gas prices
FUEL FIX
Jennifer Dlouhy
Lifting the longstanding U.S. ban on exporting crude would spur domestic oil production while paring gasoline prices by as much as 12 cents per gallon, according to a Columbia University report released Friday. Spearheaded by a former adviser to President Barack Obama, the new analysis dovetails with other private- and government-led studies that predict modest gasoline price declines if the United States scuttles its 40-year-old ban on most raw crude exports.
How Low Can Oil Go? Traders Balk at Making the Call
WALL STREET JOURNAL
Nicole Friedman and Rob Copeland
The sudden realization that the world has more oil than it needs sent analysts and traders scrambling to figure out how low prices need to go to rebalance the market. Analysts estimate the global market is oversupplied by anywhere between 1 million and 2.5 million barrels of oil a day. The Organization of the Petroleum Exporting Countries decided in November to maintain its production quotas rather than cut them in a bid to support the market, causing prices to plummet. Total crude-oil and fuel stockpiles in the U.S. hit a record high last week and traders are booking tankers to store oil at sea until they can find a buyer. Some energy companies have cut spending and laid off workers, but it could take months or even years for production to fall enough to erase the glut.
Former oil exec: $5-a-gallon gas on the way
USA TODAY
Bill Loveless
John Hofmeister attracted national attention in 2010 when he predicted that average U.S. gasoline prices would soar to $5 a gallon in 2012, thanks to rising crude oil prices. His forecast fell short, as the cost of filling up flirted with $4 in 2012, but never went higher. Now, with gasoline prices at $2.14, their lowest level since May 2009, the former president of Shell Oil is issuing another warning, telling motorists that their joy ride may end sooner than they think.
The conventional wisdom is wrong on Keystone XL
WASHINGTON POST
Aaron Blake
It’s something to remember as the White House faces a likely veto of the Keystone XL bill. As long as they cast it as being out of an abundance of caution, this poll suggests that even many Americans who want the pipeline will understand. But if and when they ultimately nix the project altogether — as most think they will — they will still be running afoul of the vast majority of Americans.
A Modest Move on Methane
NEW YORK TIMES
Editorial
There is much to like in the Obama administration’s proposal, announced last Wednesday, to reduce harmful methane emissions from oil and gas drilling. The proposal — which calls for detailed rules to be unveiled in early summer — is the first federal effort to directly regulate methane, the main component of natural gas and a major contributor to climate change. The regulations will apply to all new oil and gas wells, and be national in scope, thus setting minimum standards for what is now a patchwork quilt of state laws.
Technology
The Turning Point for Internet Freedom
WALL STREET JOURNAL
Robert M. McDowell
While Republicans and Democrats try to work out a deal, FCC Chairman Tom Wheeler should hit the pause button on next month’s vote and let the elected representatives of the American people try to find common ground. At the end of this constitutional process, all sides may be able to claim victory.
Shifting Politics of Net Neutrality Debate Ahead of F.C.C. Vote
NEW YORK TIMES
Jonathan Weisman
Senator John Thune, the South Dakota Republican who now heads the commerce committee, hopes to have legislation ready the following week — ahead of the F.C.C.’s February meeting and what Internet activists are calling “the most important F.C.C. vote of our lifetime.” “By turning the F.C.C. away from a heavy-handed and messy approach to regulating the Internet, this draft protects both consumers who rely on Internet services and innovators who create jobs,” Mr. Thune said about his legislation in a statement.
Cyber warfare: Capitol staffers aren’t ready
POLITICO
Tal Kopan
Congressional staffers are the gateway to all lawmaking on the Hill, but they also may be unwittingly opening the door to hackers. The Hill’s networks are under constant attack. In 2013 alone, the Senate Sergeant at Arms’ office said it investigated 500 potential examples of malicious software, some from sophisticated attackers and others from low-level scammers. And that’s just the serious cases — in a different measurement, the House IT security office said in 2012 it blocked 16.5 million “intrusion attempts” on its networks.
EU Considers Taxing Google, Other U.S. Internet Firms
WALL STREET JOURNAL
Frances Robinson and Tom Fairless
The European Union is considering imposing a tax on U.S. Internet companies such as Google Inc. as part of a new plan to build a single digital market across the region, EU digital chief Günther Oettinger said. Mr. Oettinger, the top German official in Brussels and the commissioner for the digital economy and society, said in an interview Monday that Europe is currently a “loser” in the information-technology sector but that the situation could be reversed with investment and by creating a level playing field for all digital companies. He stressed the importance of maintaining the region’s edge in the automotive sector, which looks set to be disrupted by Internet companies.
Keep hotel Wi-Fi free everywhere
USA TODAY
Editorial
The hotels’ argument — that such a move is necessary to protect cybersecurity and to thwart “rogue” hotspots — does not even have the patina of plausibility that airports had. Wireless Fidelity is admittedly not the most secure form of communication. It is possible, for instance, that a malicious person could set up an “evil twin” hotspot with a name and home page similar to common ones and use it to acquire credit card information. Nevertheless, that is no reason to block all hotspots. It’s a reason to block one, and to call the police.
Our goal is to protect security
USA TODAY
Katherine Lugar
That’s why it’s alarming to see so much misinformation on this issue. To be clear, the hotel industry is not interested in stopping guests from using personal hotspots. Our customers expect to access their devices on our properties and to do so in a secure way. Nor do we seek to restrict personal Wi-Fi use. As the president noted, security breaches are more prevalent. Hackers are more sophisticated. Millions of people have been targets of data breaches. They understand how important this issue is, and so do we.
Finance
Obama Plan Reignites Tax Fight
WALL STREET JOURNAL
Carol E. Lee, John D. McKinnon and Kristina Peterson
The White House views Mr. Obama’s proposals as the start of a broad discussion with the new Republican Congress over a rewrite of the tax code that includes not just corporate but individual taxation, as GOP lawmakers have wanted. But in calling for tax increases, the White House may have complicated negotiations on an issue that both parties recently cited as ripe for compromise. “This is just another poke in the eye at Republicans, rather than showing a willingness to cooperate,” said Rep. Charles Boustany (R., La.), a member of the tax-writing Ways and Means Committee. “If the president were really interested in tax reform, rather than making political statements, he would have approached Congress and members of the Ways and Means committee in thoughtful ways.”
White House: Obama tax plan overlaps 2014 GOP bill
POLITICO
Patrick Temple-West
In his State of the Union address on Tuesday, Obama is set to propose a bank tax that would impose a fee on the liabilities of the roughly 100 firms with assets exceeding $50 billion, the White House says. “The fee on large financial institutions is something very similar to what was included in the Republican corporate tax reform last year by Republican Dave Camp,” White House Senior Adviser Dan Pfeiffer said on CBS’s “Face the Nation.” In February, Camp, then chairman of the House Ways and Means Committee, proposed an excise tax on banks with more than $500 billion in assets.
Tax Reform Should Go Right Down Main Street
WALL STREET JOURNAL
Brian Reardon and Tom Nichols
For years corporate America has correctly argued that the 35% top corporate tax rate—the highest in the world—puts it at a global disadvantage. But chances are the successful partnership or S corporation down the street pays federal income taxes at an even higher rate—nearly 45% in some cases. These enterprises are called “pass-through” businesses because their income is passed through to their owners, where it is taxed at the individual rather than corporate tax rate. Combined with state income taxes, many profitable pass-through businesses are sending more than half their income to the government every year. Higher capital-gains and death taxes would only add to this burden.
President, Republicans Aim to Forge Trade Deals
WALL STREET JOURNAL
William Mauldin
The president and Republican congressional leaders are highlighting trade as a top area for cooperation this year, and Mr. Obama is likely to ask for expanded powers on the trade front when he addresses Congress Tuesday night. But before pushing to give Mr. Obama those powers, called trade promotion authority, Republicans first want the White House to be more aggressive in courting support for the legislation, particularly among skeptical Democrats.
S.E.C. Reversal May Clear Way for Shareholders to Challenge Companies
NEW YORK TIMES
Gretchen Morgenson
With the reversal of a ruling that kept corporate governance questions from being put to a company’s investors, the Securities and Exchange Commission has potentially cleared the way for such challenges to spread at annual shareholder meetings. While the S.E.C.’s turnabout related to a ruling it had provided to a single company — the grocery chain Whole Foods Market — it is likely to have broader effects, investors say, enlivening the entire 2015 proxy season.
Goldman Sachs Invests in Government and Expects to Be Paid Back
NATIONAL JOURNAL
Fawn Johnson
In 2012, the financial giant entered an agreement with the city of New York to loan $10 million of startup cash to establish a cognitive behavioral therapy program for juveniles incarcerated on Riker’s Island. At the time, half of the adolescents who left New York City’s Department of Correction returned within one year. The goal of the cognitive therapy intervention was to reduce recidivism rates. The city pays back the loan with interest when recidivism rates drop, decreasing costs of jail time. If all goes well (and so far, it has), a successful reduction in reincarceration could net the Goldman’s client investors millions of dollars in return. Goldman Sachs’ entrance into this kind of financing–most often known as social impact bonds–could change the way both Wall Street and governments do business.
The Federal Housing Administration’s risky move to lower premiums
WASHINGTON POST
Editorial
Taxpayers might legitimately wonder, however, why it’s necessary to take on this additional risk so soon after the FHA’s bailout, before the capital cushion is even halfway rebuilt — and at a time when homebuyers are already enjoying record-low interest rates, plus a windfall from cheaper gasoline. The president’s own estimate of the cash savings from the premium cut implies that it would pump less than $1 billion a year of consumer cash into an economy that is already recovering well without it. The premium reduction takes effect Jan. 26, so the administration can still reconsider, which is what it will do if it has really learned a key lesson of the Great Recession: Finance in general, and mortgage finance in particular, is riskier than it sometimes seems, and the best protection against those risks is a solid core of capital.
Politics
Views of Economy Brighten, WSJ/NBC Poll Finds
WALL STREET JOURNAL
Janet Hook
Before Mr. Obama delivered last year’s State of the Union, only 28% said they were satisfied with the state of the economy, while 71% said they were dissatisfied. That gap has narrowed to 45%-54%, the latest poll found, marking the survey’s highest level of satisfaction since 2006.
In State of the Union Address, Obama to Move Past Hardship and Reset Goals
NEW YORK TIMES
Peter Baker
With the American job market surging to life, President Obama plans to use his State of the Union address on Tuesday night to effectively declare victory over the economic hard times that dominated his first six years in office and advocate using the nation’s healthier finances to tackle long-deferred issues like education and income inequality. In presenting a series of initiatives aimed at the middle class, Mr. Obama hopes to pivot finally from the politics of adversity and austerity that have frustrated him for much of his tenure. But coming off a midterm election defeat that handed full control of Congress to Republicans, the president faces long odds in actually enacting his agenda and in essence is trying to frame the debate for his remaining time in power and for the emerging 2016 contest to succeed him.
How Obama Might Address the State of His Party
WALL STREET JOURNAL
Gerald Seib
President Barack Obama will go before Congress Tuesday night to address the state of the union. He won’t be addressing the state of his Democratic Party directly, though it is interesting to think of what he might say were he to do so. The thought arises because it will be the first time Mr. Obama addresses a Congress under full control of the opposition Republican Party. That makes the tone of his remarks exceptionally important: Does he stress the (relatively few) areas where there is the potential for agreement, or lay down political markers by focusing on the areas where the two sides have little realistic chance of agreement?
Members of Congress, in Cuba, Discuss Trade but Don’t Meet With Castro
NEW YORK TIMES
Randal C. Archibold
A delegation of members of Congress who have been some of the strongest advocates of lifting the American trade embargo with Cuba concluded a three-day visit here on Monday with optimism over trade deals but without an anticipated meeting with President Raúl Castro — apparently because of its decision to meet with several Cuban dissidents.
In Year 2 of Affordable Care Act, Premiums Diverge Widely
NEW YORK TIMES
Reed Abelson and Agustin Armendariz
At first glance, Colorado would seem to be one of the federal health law’s clearest success stories, offering nearly 200 plans and average premiums nearly unchanged in the coming year. But zoom in closer, and it is clear that a kind of pricing pandemonium is underway, one that offers a case study of the ambitions and limits of the Affordable Care Act during this second year of enrollment.
Support Our Students
NEW YORK TIMES
David Brooks
The smart thing to do would be to scrap the Obama tuition plan. Students who go to community college free now have tragically high dropout rates. The $60 billion could then be spent on things that are mentioned in President Obama’s proposal — but not prioritized or fleshed out — which would actually increase graduation rates.
A Troubling Death in Argentina
WALL STREET JOURNAL
Editorial
Argentine federal prosecutor Alberto Nisman was set to deliver proof to the Argentine Congress Monday of an alleged cover-up by President Cristina Kirchner of Iran’s responsibility in the 1994 terrorist attack on a Buenos Aires Jewish community center. Hours before the hearing, Nisman was found dead in his Buenos Aires apartment.
