Your morning briefing for the top news in energy, tech, finance, and politics.
Energy
President Congeniality
WALL STREET JOURNAL
Editorial
President Obama welcomed the 114th Congress Tuesday with an Obama-as-usual gesture: The White House said he will veto a bipartisan bill approving the Keystone XL pipeline if it gets to desk, as seems likely. … Congress is finally acting in bipartisan fashion because Mr. Obama has delayed his Keystone decision for six years. Members of both parties should move ahead despite the veto threat and call his bluff. At least the country will see who is the real obstacle to faster growth and job creation.
Learning from the oil market
WASHINGTON POST
David Ignatius
The recent plunge of oil prices to below $50 a barrel offers the same lessons as previous sharp fluctuations: Energy markets work, and politicians who try to steer them almost always get it wrong. It’s ironic that, amid this demonstration of the inexorable power of supply and demand, Congress is beginning its debate on the symbolic issue of the Keystone XL pipeline. The premise on both sides of the aisle is that legislative decisions will shape the supply of crude oil. But 40 years of experience says otherwise.
With oil prices low, now’s the perfect time for Congress to raise the gas tax
WASHINGTON POST
Editorial
THE PRICE of crude oil dipped below $50 a barrel on Monday. National gasoline prices average a little over $2 a gallon. On principle and on politics, now is the best time Washington has seen in years to raise the federal gas tax.
Deep Debt Keeps Oil Firms Pumping
WALL STREET JOURNAL
Erin Ailworth, Russell Gold and Timothy Puko
American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June.
Technology
Ahead of FCC vote, Dems revive net neutrality bill
THE HILL
Julian Hattem
Sen. Patrick Leahy (D-Vt.) and Rep. Doris Matsui (D-Calif.) are introducing the Online Competition and Consumer Choice Act on Wednesday, as one of the first acts in the new Congress. The bill would prevent Internet service providers such as Comcast or Time Warner Cable from charging websites like Netflix more money for faster service. Charging sites for quicker access to users — a practice formally known as “paid prioritization” — would lead to “fast lanes” for big companies on the Internet and “slow lanes” for everyone else, critics have feared. … The bill from Leahy and Matsui to ban “fast lanes” does not call for those utility-style rules for the Web.
If the Internet becomes a public utility, you’ll pay more. Here’s why.
REUTERS
Grover G. Norquist and Patrick Gleason
The Federal Communications Commission is in the middle of a high-stakes decision that could raise taxes for close to 90 percent of Americans. The commission is considering whether to reclassify broadband as a telecommunications service and, in doing so, Washington would trigger new taxes and fees at the state and local level. The agency would like to make Internet service a public utility, placing broadband under Title II regulation of the Communications Act of 1934. This move would make broadband subject to New Deal-era regulation, and have significant consequences for U.S. taxpayers.
Patent reform push leads to pile-on
POLITICOPRO (Subscribe)
Erin Mershon
While the debate continues to revolve around the central aim of curbing so-called litigious patent trolls, industry and advocacy groups are beginning to float add-on proposals only marginally related to the broad goals of the package. Associations representing universities, technology companies and biotech and pharmaceutical firms are all looking to tweak various rules that govern the patent system. The rapidly accumulating wish lists could complicate what many see as improving chances for patent reform in the new Congress.
Issa takes CES spin to talk patents, net neutrality
POLITICOPRO (Subscribe)
Tony Romm
“I believe the FCC is exceeding its legislative mandate. … I will be pushing hard against that,” said Issa, a former chairman of the Consumer Electronics Association. “But again, like a lot of things, … you can be against something because you think it’s [bad for] technology,” he continued. The congressman said Republicans still had to stand “for something” and offer an alternative in response. “There is a need to ensure others don’t abuse their large market share to favor their products in an anti-competitive way,” he said.
Your cable Internet is about to get way faster
WASHINGTON POST
Brian Fung
If you’ve heard of services like Verizon FiOS or Google Fiber, you know that many technologists regard fiber optic Internet as the future. Fiber can deliver Internet speeds of up to 1 gigabit per second, marking a 100-fold improvement over today’s household average. But now cable is poised to catch up with gigabit speeds of its own, and Comcast will be among the first to adopt the technology behind it.
Top regulator fears ‘smart-home hacking’
THE HILL
Julian Hattem
The head of the Federal Trade Commission (FTC) raised alarms on Tuesday about the potential hazards to people’s privacy that come with the rise of connected bracelets, cars and other devices. The billions of “smart” devices on the so-called “Internet of Things” pose serious threats to personal privacy, Chairwoman Edith Ramirez said at the Consumer Electronics Show in Las Vegas, even while they may help with daily tasks or improve people’s health.
Time for a Pause
NEW YORK TIMES
Thomas Friedman
In short, there’s never been a time when we need more people living by the Golden Rule: Do unto others as you would have them do unto you. Because, in today’s world, more people can see into you and do unto you than ever before. Otherwise, we’re going to end up with a “gotcha” society, lurching from outrage to outrage, where in order to survive you’ll either have to disconnect or constantly censor yourself because every careless act or utterance could ruin your life. Who wants to live that way?
Google and the Self-Driving Delusion
WALL STREET JOURNAL
Holman Jenkins
Google’s driverless car has become a branding exercise, a ticket to free media, a way to market Google software to auto consumers for onboard infotainment systems. Never mind the false expectations it raises in the driving public. Never mind the pressure it puts on real auto makers to pay lip service to autonomous driving they won’t be able to deliver.
Finance
Voting ‘Yes’ on Trade Is Hard for Democrats—but Necessary
WALL STREET JOURNAL
Mack McLarty
When trade-promotion authority came up in Congress last year, Senate Democrats blocked it. Doing so again would be bad policy and bad politics. Now the minority in both houses, congressional Democrats can draw a sharp contrast with the Republicans’ hyperpartisan, defeat-at-any-cost tactics. Instead Democrats can be a constructive force for elevating the discussion and giving President Obama an important bipartisan accomplishment. Most Americans want Congress to work across party lines to get things done. Trade is an opportune place to start.
The Double-Edged Dollar
WALL STREET JOURNAL
Editorial
The biggest danger would be if the dollar overshoots on the strong side, as it arguably did in the 1990s. This could mean far more destruction here and abroad, in the commodity economy in particular, including to the U.S. energy boom. As U.S. companies suffer from Japanese and European competition, protectionist pressure could increase just as President Obama and Republicans are trying to pass trade-opening legislation. All of which is a reminder that there is no free market in currencies, because their supply is controlled by the world’s central banks. The major central bankers need to pay attention as much to currency fluctuations as they do to their national economies. A stronger dollar would help the world more if it were also stable.
Barack Obama nominates former community banker to Fed board
FINANCIAL TIMES (Subscribe)
Gina Chon and Alice Ross
The White House announced on Tuesday that it would nominate former Bank of Hawaii chief Allan Landon to the board of the Federal Reserve. The move followed complaints that the agency needs representation from community banks amid Wall Street dominance. If confirmed by the Senate, Mr Landon will be the first community banker appointed to the Fed board since the departure of Elizabeth Duke in 2013.
Politics
Obama’s year of the veto
POLITICO
Edward-Isaac Dovere and Burgess Everett
A veto would come with political complications for Obama. Republicans are already pointing to the threat as more evidence of their narrative that he’s a dictatorial president who refuses to listen, even on an issue that has enormous support in public opinion polls. Supportive Democrats, though, say they’re eager to see the president dig in and concentrate more on fighting than compromising. Senate Majority Leader Mitch McConnell’s (R-Ky.) setting Keystone as the first order of business for the new session, with fast passage through the House expected Friday, was part of a GOP attempt to undercut Obama quickly, and devastatingly, even before he got to his State of the Union address: He’d either have to concede on approving a project he has resisted and his base hates, or kick off his promised era of bipartisan cooperation with what would be only his third veto ever.
McConnell finds his go-to Dems
THE HILL
Alexander Bolton
Republicans have identified six go-to centrists: Democratic Sens. Joe Manchin (W.Va.), Heidi Heitkamp (N.D.), Mark Warner (Va.), Tim Kaine (Va.) and Joe Donnelly (Ind.) and independent Sen. Angus King (Maine), who caucuses with the Democrats. Several other Democrats, including Sens. Claire McCaskill (Mo.), Chris Coons (Del.), Tom Carper (Del.) and Martin Heinrich (N.M.), are also targets, though they are seen as riskier partners.
Boehner takes revenge
POLITICO
Jake Sherman and John Bresnahan
John Boehner is getting revenge. After he secured his third term as speaker Tuesday afternoon, losing 25 votes on the House floor to some relative-unknown members of the Republican Conference, Boehner moved swiftly to boot two of the insurgents from the influential Rules Committee. That could be just the start of payback for the speaker’s betrayers, who might see subcommittee chairmanships and other perks fall away in the coming months. Boehner’s allies have thirsted for this kind of action from the speaker, saying he’s let people walk all over him for too long and is too nice to people who are eager to stab him in the back.
The opposition to John Boehner and the coming GOP nomination contest
WASHINGTON POST
Dan Balz
[Steve] King, one of the most outspoken conservatives in Congress, concluded that Boehner was neither sufficiently conservative nor an adequate-enough defender of the Constitution to serve as his party’s leader in the new House. He therefore cast a no vote when the roll was called. He was one of 25 Republicans to vote against Boehner. King’s defection from the majority of his party could speak louder than the others for one important reason. In a few weeks, he will host the Iowa Freedom Summit, a weekend conclave that will draw at least half a dozen potential Republican presidential candidates for the unofficial kickoff to what will be a long pre-Iowa-caucus season.
Why Some GOP Presidential Hopefuls Are Staying Quiet About Gay Marriage
NATIONAL JOURNAL
Rebecca Nelson
Compared with the aggressive gay-marriage takedowns of yore—that is, just a few years ago—Bush and some other potential Republican 2016ers who were once more vocal opponents of same-sex marriage sound deflated. In last year’s midterm elections, staying mum on same-sex marriage became an oft-used strategy. And for Republicans with an eye—or a long Facebook post—on 2016, a deliberately hands-off, “leave it up to the states” attitude could be the best way to deal with the political hot potato, rather than wasting finite political clout and energy fighting something that a majority of Americans support.
‘Scoring’ Legislation for Growth
WALL STREET JOURNAL
Ed Lazear
The House of Representatives on Tuesday adopted a rule that will change Washington and lawmaking for the better. … Disregarding macroeconomic impacts of legislation is not neutral and the change by the House is a change for the better. Because revenue-raising bills must originate in the House, the rule will affect new legislation before it ever lands on the Senate floor, where the rule change might have faced stiffer opposition. The new Congress is already looking promising.
Former Virginia Governor Robert McDonnell sentenced
CBS NEWS
Paula Reid
McDonnell also has a substantial appeal working its way through the system. The critical issue, George Mason University School of Law Assistant Dean Richard Kelsey told CBS News, is what constitutes an official act. “In order for him to be guilty of this scheme of fraud, he had to take an official act as governor,” Kelsey said, “and what the prosecution has said, is that when he hosted a party at his house to launch this product for Jonnie Williams, that was an official act. Does that constitute an official act?” It’s a broad interpretation of case law.
Postal Chief Says Congress and Unions Block Progress
NEW YORK TIMES
Ron Nixon
“What’s holding us up? Myopia, shortsightedness,” Mr. Donahoe said. “We never get past the narrow set of interests that are determined to preserve the status quo.” Union leaders heatedly responded that Mr. Donahoe was responsible for problems at the Postal Service. They said he had pushed for cuts like the elimination of Saturday mail delivery that would undermine service and cut revenues.
Improving Obamacare faces mounting threats
USA TODAY
Editorial
Obamacare health exchanges that were a laughingstock a year ago are working more smoothly this enrollment period. Millions of people who could never get coverage, or faced bankrupting medical costs if they lost their jobs, now have real protection for the first time. So, after years of controversy, is the Affordable Care Act out of the woods? Hardly. Consider this the calm before the storm. Despite the recent progress, the 5-year-old law continues to face mortal danger from Congress, public opinion and the courts.
Obamacare is beyond repair
USA TODAY
Rep. Paul Ryan
You can’t fix a fundamentally broken law; you’ve got to replace it. That’s why Congress can’t save Obamacare with a few tweaks, despite what its defenders say. No quick fix can correct the main flaw: The law takes power away from patients and hands it to bureaucrats.
Biosimilar Drugs Face U.S. Test
WALL STREET JOURNAL
Thomas M. Burton
The introduction in the U.S. of cheaper alternatives to complex biologic drugs faces a key test this week that could determine whether consumers and insurers will save billions of dollars on drugs to treat cancer and other ailments. A Food and Drug Administration advisory panel will decide Wednesday whether to recommend that the agency approve a drug known as EP2006 from Novartis AG ’s Sandoz unit.
