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U.S. economy added 175K jobs in February

The Bureau of Labor Statistics (BLS) reported that the economy added 175,000 jobs in February, besting economists' expectations of a roughly 150,000 payroll gain. Many had warned of downside risks, given February's bad weather—which hit during the period BLS conducts its employment surveys—and two weak labor-market reports released earlier in the week.

It was—and is—tough to tell. Teasing the precise weather effects out of the report is a difficult task. Just ask BLS, which says so explicitly: "It is not possible to quantify the effect of extreme weather on estimates of over-the-month change in employment," the new report says. "What we need to do and will be doing in the weeks ahead is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather," Janet Yellen, the Federal Reserve chair, said at a recent hearing.

Now, some economists are pointing to Friday's report as evidence that the poor performance of the past few months was the result of the weather after all, and the economy is due for a payback.

The addition of jobs has been growing at a steady pace over the last few years. Monthly employment gains averaged 174,000 in 2011, 186,000 in 2012 and 194,000 in 2013.

Senate Democrats pull all-nighter for climate change

On Monday night, Democrats in the Senate pulled an all-nighter talking about climate change. Thirty Senate Democrats, who are part of a new “Senate Climate Caucus” spoke for 15 hours about the perils of climate change. 

The all-nighter, as well as the new climate caucus, are part of a broader effort to raise the profile of the climate change issue—particularly in the 2014 midterm elections.

Recently, California hedge fund billionaire Tom Steyer pledged to spend up to $100 million in November on candidates who will make climate change a priority. This huge infusion of money into the 2014 elections has helped give rise to a growing group of candidates that environmental activists are referring to as “climate candidates”—politicians who are making the climate change issue a central part of their campaigns.

Despite the massive infusion of money and the efforts to raise the profile of the issue, the reality is that no legislation can pass without Republican support—something that is woefully lacking on the climate change issue. Additionally, advocates have yet to convince moderate Democrats of the need to tackle the issue. Indeed, analysts were quick to note that none of the four most vulnerable Democratic incumbent senators in the midterms—Mark Begich (D-AK), Kay Hagan (D-NC), Mary Landrieu (D-LA) or Mark Pryor (D-AR)—participated in the all-night climate push. 
Click here to view the Washington Business Brief, Bipartisanship Breaks Out in D.C.

Senate reaches deal on unemployment insurance

The question of how to extend benefits for the long-term unemployed, which expired at the end of 2012, has been hotly contested in the Senate for almost three months. It appears the debate—at least in the Senate—may finally be coming to a resolution.

Senate negotiators reached an agreement that will extend the unemployment insurance program for five months. The benefits affect the long-term unemployed who have been out of work for at least six months. Because the new program will include retroactive benefits from December, the extension would expire for all beneficiaries in late May.

The agreement is similar to one proposed by Senate Republicans just last week.

The GOP plan is paid for by extending customs user fees through 2024, preventing individuals from receiving both unemployment and disability benefits, and pension smoothing. The bill also reforms the overall program, requiring beneficiaries to take any "suitable work" offered to them, asking state and federal agencies involved to determine why an individual remains unemployed, and preventing millionaires and billionaires from receiving the benefits.

Because of the recess, a vote is not expected until after senators return to Washington on March 24.

This will mark the fourth time this year that Senate leadership has brought an unemployment insurance package to the floor. The last effort, back in February, came just one vote short of the 60 needed for passage.

A Senate deal is still far from guaranteed to pass the House, where Republicans have expressed opposition to extending the benefits. House Speaker John Boehner has insisted he will not bring an unemployment insurance fix to the floor unless it is fully paid for and also includes a separate job-creation provision.

Schumer and Alexander work to “fix” the Senate

Dysfunction is nothing new in Washington, but there is little doubt that dysfunction in the U.S. Senate has been at an all-time high recently. Two Senators, Chuck Schumer (D-NY) and Lamar Alexander (R-TN), have been quietly working behind the scenes to make the Senate work—at least when it comes to largely non-controversial pieces of legislation.

Senate Majority Leader Harry Reid (D-NV) will allow debate on the reauthorization of a child care block-grant program—where both sides will get equal time and equal opportunity to offer amendments. This will be a return to more regular order in the Senate.

If all goes as planned, Reid will allow the same process on a handful of other bipartisan initiatives ranging from sentence overhauls to manufacturing to energy efficiency. 

Bipartisan agreement reached on housing finance reform

This week, Senate Banking Committee Chairman Tim Johnson (D-SD) and ranking member Mike Crapo (R-ID) announced a plan for housing finance reform.

The Johnson-Crapo proposal builds on a plan introduced last year by Sens. Bob Corker (R-TN) and Mark Warner (D-VA) that would wind down Fannie Mae and Freddie Mac and replace them with a new agency, known as the Federal Mortgage Insurance Corporation. This new agency would be modeled after the Federal Deposit Insurance Corporation. Like the Corker-Warner plan, the new agency would guarantee certain mortgages after the first 10 percent of losses on new loans are covered by private capital, according to an outline of the bill.

While the proposal will be marked up in committee, it is unlikely to receive a floor vote this year. However, the legislation, should it pass successfully out of committee, could provide the basis for a bill that could pass next year.


Transportation in focus

Rails to trails in jeopardy

Since 1983, thousands of miles of abandoned railroad beds have been converted to bike and pedestrian trails under a federal program. The future of many of those trails became cloudier this week when the Supreme Court ruled 8 to 1 that the government easements used for railroad beds expired when the railroads who used those easements went out of business.

It is unknown at this point just how much the Court ruling, which requires that the land of the expired government easements be returned to its original owner, will effect the rail-to-trail projects. Not all of these projects were built on government easements, indeed many were built on land actually owned by the railroad companies.

Hersman to leave NTSB

National Transportation Safety Board Chair Deborah Hersman will leave the agency at the end of April to become the National Safety Council's next president and CEO. Hersman, who started her third, five-year term last year and has been on the board since 2004, steered the NTSB through a number of high-profile incidents in recent years: the fatal Asiana Airlines crash, the Boeing Dreamliner battery problems that led to the fleet's grounding and several fatal accidents on the Metro-North railroad. Hersman was behind several of the NTSB's big safety recommendations, including a push to lower the Blood Alcohol Concentration (BAC) from 0.08 to 0.05.

Foxx grilled on GM recall

Transportation Secretary Anthony Foxx testified before the Senate Appropriations subcommittee that has oversight over transportation spending. Subcommittee chair Patty Murray (D-WA) grilled Foxx over the General Motors recall of more than 1.6 million vehicles due to an ignition issue that has been linked to at least 12 deaths.

Foxx promised an "aggressive investigation" over just how long ago GM knew about the problem. Foxx further pledged to hold auto industry companies accountable for any delays in reporting problems like this to the National Highway Traffic Safety Administration, saying the Department of Transportation will respond in a "very, very tough manner."

Political bits


California 33rd Congressional District: Twenty-one candidates have filed paperwork to run for the seat being vacated by long-time Rep. Henry Waxman (D-CA).

Florida 13th Congressional District Special: Republican David Jolly, a former lobbyist and onetime aide to the late Rep. Bill Young, (R-FL), defeated Democrat Alex Sink, a former state CFO, in the 13th Congressional District special election.

Idaho 2nd Congressional District: The Club for Growth went up with television ads attacking Rep. Mike Simpson (R-ID). The Club has endorsed Simpson's primary challenger Bryan Smith (R-ID).

Michigan 3rd Congressional District: Businessman Brian Ellis (R-MI) released a television ad this week attacking Tea Party favorite Rep. Justin Amash (R-MI) for not voting to ban gender selection abortions.

Michigan 12th Congressional District: Debbie Dingell, wife of retiring Rep. John Dingell (D-MI), was endorsed this week by EMILY'S List.


Alaska: The Club for Growth endorsed former Alaska Attorney General Dan Sullivan over former Club endorsed Joe Miller (R-AK).

Iowa: A new poll shows Rep. Bruce Braley (D-IA) with a wide lead over all of his potential Republican challengers. Republicans have had high hopes that the seat left open by the retirement of Senator Tom Harkin (D-IA) would be a potential GOP pickup in November.

Mississippi: Former Alaska Governor Sarah Palin endorsed State Senator Chris McDaniel (R-MS) in his primary challenge to Senator Thad Chochran (R-MS).

New Hampshire: After months of flirting with the idea of running for Senate against Jeanne Shaheen (D-NH), it appears former Massachusetts Senator Scott Brown will indeed run.

A look ahead

The House and Senate are not in session next week.        

Washington by the numbers                        

80 -- The number of airplanes—of all sizes—that have disappeared and not been recovered since 1948.

175,000 -- The number of jobs added in February, higher than most economists’ estimates.

They said what?

“I feel a little like a pedestrian in a Godzilla movie.” –Andrew Romanoff, Democratic challenger in Colorado’s 6th Congressional District, on the enormous outside spending in close midterm races (National Journal)

Washington humor

"If you want to boycott Russia, do what I did. Switch to a domestic vodka." –David Letterman


 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
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