We hope all our readers have had a Happy Holidays. Today’s briefing covers all the top news you may have missed over the past week.
Energy
Some States See Budgets at Risk as Oil Price Falls
NEW YORK TIMES
Manny Fernandez and Jeremy Alford
States dependent on oil and gas revenue are bracing for layoffs, slashing agency budgets and growing increasingly anxious about the ripple effect that falling oil prices may have on their local economies. The concerns are cutting across traditional oil states like Texas, Louisiana, Oklahoma and Alaska as well as those like North Dakota that are benefiting from the nation’s latest energy boom.
Clouds on the horizon for solar power
POLITICOPRO (Subscribe)
Alex Guillén
Several factors that helped the industry achieve impressive growth in recent years are about to see major shifts, cutting short the burgeoning solar sector just as it begins installing panels at levels that would make a serious impact on the U.S. electricity mix.
New York takes the wrong approach to ‘fracking’
WASHINGTON POST
Editorial
Fracking’s risks concern water and air contamination. States should control where and how wastewater is disposed of, require robust wells that are resistant to blowouts, demand that drillers prevent methane and volatile organic compounds from escaping into the air and regulate leaks from storage facilities and well sites. States such as Colorado have developed rules with sensitivity both to industry and to environmental concerns. The Obama administration is developing its own, national fracking rules, too. That’s the model to follow — not New York’s.
E.P.A. Wrestles With Role of Nuclear Plants in Carbon Emission Rules
NEW YORK TIMES
Matthew L. Wald
The [EPA]’s proposal gave an odd mathematical formula for evaluating nuclear plants’ contribution to carbon emissions. It said that 5.8 percent of existing nuclear capacity was at risk of being shut for financial reasons, and thus for states with nuclear reactors, keeping them running would earn a credit of 5.8 percent toward that state’s carbon reduction goal.
Is Vacation Over?
NEW YORK TIMES
Thomas L. Friedman
High oil prices covered many sins and fostered many sins. If they stay low again for long, a lot of leaders will have to pay retail for their crazy politics, not wholesale. The political and geopolitical fallouts will be varied — good and bad — but fallout aplenty there will be.
Technology
Net neutrality to dominate D.C.’s tech agenda
POLITICO
Tony Romm
The Federal Communications Commission is racing to write rules that require Internet service providers to treat all Web traffic equally, and many expect the agency will follow President Barack Obama’s call to treat broadband service like a utility. Telecom giants and Republican lawmakers say that will create burdensome new regulation — and the issue has already incited a lobbying frenzy, raised the specter of lawsuits and ignited new partisan fires on Capitol Hill. Some GOP members are planning to use their soon-to-be majority status to knock down the FCC’s net neutrality actions, perhaps even before any rules are announced in early 2015. And the growing tensions threaten to spill over into larger policy debates, as Congress takes on the complex process of updating the nation’s central communications laws.
Wireless group makes case against tough Web rules
THE HILL
Julian Hattem
The Federal Communications Commission (FCC) has “no lawful basis” for imposing utility-styles rules on people’s access to the Internet over their phones and tablets, CTIA-The Wireless Association said in a filing with the agency late on Monday. The analysis provides a new wrinkle in the FCC’s efforts to write new net neutrality rules so that Internet providers are required to treat all Internet traffic equally.
FTC in 2015: Deeper dive into tech
POLITICOPRO (Subscribe)
Katy Bachman
The Federal Trade Commission is often referred to as the Federal Technology Commission — and with good reason, as the agency in 2015 will broaden investigations that touch on Big Data, the mobile industry and Internet-connected health devices and apps.
The Grinch Who Stole . . . Drones
WALL STREET JOURNAL
Gordon Crovitz
Government will block drones so long as bureaucrats are measured by accidents that could happen, not by the costs of regulation that postpones innovation. Congress should broaden the permissionless approach that works so well for the Internet, applying it to drones and other Internet-based technologies. Innovation first, regulation later is how technology takes flight.
Rock stars amp up in digital music copyright war
POLITICO
Alex Byers
2015 is likely to bring more rock stars to Washington, each looking to make their mark on the growing debate over the future of music. Industry lobbying groups say they’re planning to increasingly leverage the name recognition of recording artists and songwriters to add firepower to traditional lobbying efforts as they ramp up advocacy campaigns for musicians’ rights. The efforts — which this year brought artists like Rosanne Cash, Lady Antebellum and Steven Tyler to D.C. — reflect a growing tumult in the music industry, as listeners shift preferences from hard-copy music toward downloads and the streaming marketplace.
‘The Interview’ Redux
WALL STREET JOURNAL
Editorial
We’d like to think that if the U.S. were going to respond, it would do more than execute a 24-hour shutdown. And we still think the U.S. should send the movie into North Korea via balloons. Kim’s subjects deserve a good laugh.
Silicon Valley’s Mirror Effect
NEW YORK TIMES
Joe Nocera
It is easy to understand the appeal of going into business with your friends — and then surrounding yourself with mirror images of yourself. But let’s at least not call it a meritocracy.
A Wi-Fi Problem for Hotels?
WALL STREET JOURNAL
Shira Ovide
An industry group that includes Marriott International Inc. has petitioned the Federal Communications Commission for guidance on whether hotels are acting within the law when they disable unauthorized Wi-Fi access points set up on their properties. The hotels say they are trying to make sure their own wireless networks don’t get bogged down and to prevent criminals from tricking people into logging onto fake Wi-Fi networks.
Finance
Life Without Fannie and Freddie
WALL STREET JOURNAL
Editorial
The housing-industrial complex spends so much money lobbying to maintain federal mortgage subsidies that it’s easy to forget how little they matter to the average borrower. A recent report from the Congressional Budget Office does a public service in showing how easily the U.S. could transition to a free market that doesn’t threaten taxpayers.
Banks had to pay more fines in 2014 than ever before
VOX
Matthew Yglesias
The high total of fines reflects the conjunction of two trends. On the one hand, regulators have started demanding more money when banks are caught in misconduct. Regulators in both the United States and United Kingdom (and to a lesser extent in Europe) have extracted record-breaking fees as part of an effort to demonstrate a new attitude of toughness. On the other hand, 2014 happened to be the year in which several large years-old claims were settled.
Good Medicine for Bad Bankers
WALL STREET JOURNAL
Alan Blinder
But if bankers in, say, a particular trading unit know that any financial penalties for wrongdoing will be shared within the group, rather than dispersed among shareholders, they are more likely to answer Mr. Dudley’s call and either get the offenders in line or blow the whistle on them. In other words, when bankers discover bad behavior that threatens their own bonuses, these Masters of the Universe may turn into Protectors of Integrity. Wouldn’t that be nice?
Discord Brews Over SEC Campaign-Finance Rule
WALL STREET JOURNAL
Rebecca Ballhaus
A Securities and Exchange Commission rule designed to limit conflicts of interest in state contracting is becoming less effective amid the rise of super PACs and should be broadened, groups that track campaign finance say. The SEC’s so-called pay-to-play rule, which applies to state officials including governors, could become a prominent factor in the 2016 presidential election given that four or more Republican governors who would be in office during the campaign have said they may run or are thought to be considering a candidacy.
A Trade Opportunity for Obama and the New Congress
WALL STREET JOURNAL
Charles Boustany and Robert B. Zoellick
American families, and businesses, benefit from higher incomes and lower-priced imports. The World Trade Organization reports that the North American Free Trade Agreement and the Uruguay Round, the last big global trade agreement, have increased the purchasing power of an average American family of four by $1,300 to $2,000 every year. The Peterson Institute for International Economics estimates that the new trade deals in the works could offer that family another $3,000 or more a year.
Warren’s war against Wall Street
WASHINGTON POST
David Ignatius
Warren and the neo-populists are right that the recovery hasn’t benefited Main Street as much as it has Wall Street and that the fruits of American prosperity are skewed toward the wealthy. Changing the structural problems that limit job growth may be the country’s biggest economic challenge, as Summers has argued persuasively. But fixing this problem will surely be harder if liberal Democrats such as Weiss, who understand the financial world enough to challenge it, are barred from government for the offense of working on Wall Street.
When Insider Trading Is Legal
NEW YORK TIMES
Editorial
The Justice Department is reviewing its options in response to a recent court ruling that overturned two insider-trading convictions and threatens others. Unfortunately, the options are limited, and the ruling — a setback in the fight against rigged markets — is likely to stand for a long time.
Fees Get Leaner on Private Equity
WALL STREET JOURNAL
Mike Spector and Mark Maremont
Facing pressure from investors and heightened scrutiny from federal regulators, some of the largest private-equity firms are giving up their claim to fees that generated hundreds of millions of dollars for them over the years. The investment firms usually collect the fees from companies they buy for providing services such as consulting, serving as directors and helping them make their own acquisitions. Instead of keeping some of the money, the buyout firms, in new funds they are raising, will now pass the fees on in full to investors in the funds.
Politics
16 in ‘16: The new battle for the Senate
POLITICO
Kyle Cheney
But a closer look at some of 2016’s most intriguing and competitive races suggests that the battle for Senate control is more complicated than it seems. In states like Pennsylvania and Illinois, for example, Democrats aren’t convinced they have candidates that are both willing to run and packing enough star wattage and talent to topple first-term incumbents. And in others — like Kansas, Iowa and North Carolina, where Democrats thought they had a fighting chance in 2014 — Republican incumbents up in 2016 seem better positioned to win another six years. The GOP also enters the new election cycle with a four- or five-seat cushion, depending on which party wins the presidency.
Charles Koch eyes sentencing reform as a 2015 priority
THE HILL
David McCabe
Conservative mega-donor Charles Koch says reforming the criminal justice system to make it more fair to the “disadvantaged” will be a major one of his priorities in 2015. The businessman said that the criminal justice system needs reforms aimed at “making it fair and making [criminal] sentences more appropriate to the crime that has been committed.” “Over the next year, we are going to be pushing the issues key to this, which need a lot of work in this country,” Koch told The Wichita Eagle in an interview published Saturday night. “And that would be freedom of speech, cronyism and how that relates to opportunities for the disadvantaged.”
Hillary Clinton Faces Uphill Fight for White, Rural Vote
WALL STREET JOURNAL
Beth Reinhard
After a rocky start in that campaign, Mrs. Clinton cast herself as a scrappy underdog and union ally while topping Mr. Obama in more than 20 states in Democratic primaries in places such as Pennsylvania and Ohio that have many white, working-class voters. Recent Wall Street Journal/NBC News polling shows that Mrs. Clinton’s appeal among those voters has withered. In June 2008, Mrs. Clinton was viewed positively by 43% of whites without college degrees and negatively by 44%. Last month, 32% of that group held a positive view and 48% had a negative view. Her image among those voters is only slightly better than that of Mr. Obama.
Jeb Bush jumps to the front of Republicans’ 2016 race
THE HILL
Cameron Joseph
A CNN/ORC poll released on Sunday found Bush with the support of 23 percent of Republicans, 10 percentage points higher than his nearest rival, New Jersey Gov. Chris Cristie. The poll provided further evidence of how Bush has shaken up the field since his announcement he’s “actively exploring” a presidential bid, an aggressive early move that thrilled the donor class.
Congress’s Scoring Upgrade
WALL STREET JOURNAL
Editorial
All of this is separate from the fate of current CBO director Doug Elmendorf. Some liberal journalists report that the GOP has decided to dismiss him, but a spokesman for new Senate Budget Chairman Mike Enzi says no decision has been made. Mr. Elmendorf has been an honest liberal at CBO, and if he would agree to implement the new scoring rule it might make sense to keep him. But Republicans should understand that their liberal critics will still deplore everything they do no matter who is running the budget office. Personnel matters, but more important is that the GOP takes control of the institutions of Congress by setting rules that accurately assess the impact of their proposals. Realistic budget scoring is one such step.
Regrets on Obamacare? Sebelius has very few
POLITICO
David Nather
“I think it was not only well worth it, but a battle worth fighting,” Sebelius said. “Millions and millions of people are the beneficiaries of this policy.”
Critical decisions after 9/11 led to slow, steady decline in quality for Secret Service
WASHINGTON POST
Carol D. Leonnig
The Secret Service began struggling to carry out its most basic duties after Congress and the George W. Bush administration expanded the elite law enforcement agency’s mission in the wake of the Sept. 11, 2001, terrorist attacks.
Cuba, North Korea, and getting sanctions right
WASHINGTON POST
Jimmy Carter
When non-military pressure on a government is considered necessary, economic sanctions should be focused on travel, foreign bank accounts and other special privileges of government officials who make decisions, not on destroying the economy that determines the living conditions of oppressed people.
