Apparently a debt ceiling deal has been reached. There's surprisingly little to it, chiefly a freezing of domestic spending in next year's budget. At a guess, this means cuts of maybe 3-4% after you adjust for inflation. In the following year, spending would increase 1%, which probably represents further cuts of 1-2% after inflation. So this comes to total cutbacks over two years of around 5% or so. There are no reported changes to Social Security, Medicare, or Medicaid.
That's a substantial slash to domestic programs. In addition, the deal includes some work requirements for food stamps and some mild permitting reforms to allow federal energy projects to pass environmental review more quickly.
And that's about it. Now it's just a matter of seeing if it can pass.
For many, the pandemic-era shift to remote work proved that all the schlepping was unnecessary....They can get a lot more done — in their work lives and in the rest of their lives — if they skip the commute.
Liberty Street Economics, a blog that features writing from New York Fed analysts, reported last year that collectively, Americans now spend 60 million fewer hours per day traveling to work. That’s 60 million hours for which they weren’t being compensated that they can now spend exercising, taking care of their children, getting a bit more sleep and starting their workday earlier or ending it later.
There's obviously something to this. No one likes commuting, and barren downtown office spaces offer evidence that there's less of it these days. But that 60 million hour figure is for the pandemic year of 2020 and things have changed since then. Here are a couple of suggestive charts.
First up is the crudest possible measure, Vehicle Miles Traveled per working-age person (for the first quarter of each year):
VMT dropped substantially during the pandemic era, but it's since rebounded and is close to its pre-pandemic level. People are back to driving as much as they ever were.
Next up is a closer look specifically at commute times via the American Time Use Survey. This time we can go through the end of 2021 and the numbers tell a different story:
We don't know what happened in 2020 because ATUS was interrupted during the pandemic, but it's safe to say that commutes were down—probably quite a bit. A total of 60 million hours doesn't seem unreasonable. This rebounded in 2021, but only partly: 35% of people commuted before the pandemic but only 28% in 2021—though I imagine that number has increased since then. However, average commute time among those who still commuted was barely changed, down less than two minutes.
This all suggests that, in fact, commuting is returning to its old levels, though slowly. Workers might or might not like it, but they're mostly doing it.
And one other thing. There's a reason bosses want their workers coming into the office. Here's a chart from Liberty Street Economics based on a careful analysis of what people did with the time they saved from their commute in 2020. It's pretty startling:
Look at the red lines at the very top representing all age groups. Non-commuters worked a lot less at the office and made up for it with only a little more work at home. Altogether, in 2020, they reduced their total working time by a whopping 3.5 hours per day, replaced mostly with leisure and sleep. Their productivity might have remained strong, but they simply weren't putting in the hours. Is it any wonder that with the pandemic over, CEOs and managers want to see butts in chairs where they can be sure everyone is really working?
UPDATE: The second table above originally showed commute minutes per day. I changed it to the percent of people commuting because that gives a better idea of just how much commuting has (or hasn't) fallen off following the pandemic.
It's worth going back in time a few months and remembering why the debt ceiling even still exists. Why wasn't it raised unilaterally by Democrats during the November/December lame duck session? Janet Yellen was certainly in favor.
Technically, the debt ceiling could have been increased easily via reconciliation. The procedure is straightforward: It starts with the House and Senate budget committees writing budget resolutions that include reconciliation instructions for raising the debt ceiling. These can be discharged immediately for passage on the floor that requires only 51 votes and can't be filibustered by Republicans.
There are two gotchas. The first is a rule that allows 50 hours of debate, which sucks up a vast amount of floor time that could be used for other priorities. The second is a required "vote-a-rama" in which Republicans can offer a theoretically endless set of amendments. In practice, however, since the amendments must be "germane" to the debt ceiling, this puts a limit on how many amendments Republicans can waste time with.
Bottom line: the whole process would have taken 2-3 weeks that Democrats wanted to use for other purposes. That's bad but hardly catastrophic. But this still isn't the real story.
The administration has determined that if it were to go the reconciliation route on the debt limit, it would face likely opposition from Sen. Joe Manchin (D-W.Va.).
....Already, Manchin has expressed reluctance to act on the debt limit with only Democratic votes, though he’s declined to rule it out completely. “I don’t think it should go to reconciliation,” he said Tuesday. “My goodness, it’s something we’ve always worked together on.”
According to Politico at the time, "That’s left White House officials to all but abandon efforts for a lame-duck move they once hoped might head off a potentially disastrous showdown with the House GOP majority next year."
In short, we are now facing a debt ceiling crisis thanks to Joe Manchin. That's it.
It's Day 31, more than twice as long as I expected to stay in treatment. But we're home now.
Earlier today I had my final consult and everything is going swimmingly. My counts are completely normal; the Bell's palsy is diagnostically gone, though I still feel a few twinges; and my doctor says I'm responding "beautifully" to the CAR-T treatment. For now, anyway, things couldn't be going better.
Our stay at City of Hope has stretched out so long that I'm finally running out of cat pictures. So here's a rare file photo of Hilbert and Charlie playing back when Charlie was still sort of kittenish.
Tyler Cowen points me to some truly remarkable research today. The topic is the pay and productivity of women in a large multinational corporation with offices and factories around the world.
The central insight of the study is that if women face high barriers to entry into the labor market, then only the best, most productive women are likely to work. As barriers go down, the performance of women will become more average.
But not entirely average. Check this out:
On the left side of the chart, where female labor participation is low, women's productivity is astronomically higher than men's. But even on the right, where participation is high, women's productivity is still about 50% higher than men's.
Unsurprisingly, this affects pay too:
The authors conclude across the board that optimal pay for women should be higher (and optimal pay for men should be lower). And the difference isn't small:
Given the productivity differences between men and women, the firm could increase productivity for the same wage bill if they were to change the terms of the wage contract to attract more women....However, we note that such a contract would significantly increase inequality within and between genders; most notably, the difference in pay between women and men would go up by 78%.
And this:
We show that equalizing barriers between genders would bring the pay gap to zero and would increase productivity by 32%, while keeping the wage bill and employment constant.
Among other things, the authors conclude that women perform so well that hiring managers should practically hire them sight unseen if their visible qualifications are even in the same ballpark as a similar man.
I'm unable to judge the methodology of this paper, but I'll offer one caveat: the effects are just too big. I'm always a bit skeptical of gigantic effects since the real world doesn't often produce them.
Also, keep in mind that this is not purely US research. One reason for the big effects is likely that many of the countries under study are poor and have exceptionally high barriers to female work. Under such circumstances it might not be surprising that women are enormously underhired and underpaid. The same wouldn't be true in an advanced economy like the US.
Both core and headline PCE inflation clocked in at around 4.5%, though the headline rate continues to be considerably lower on a trendline basis. Overall, though, it was mostly sideways movement in April. PCE inflation has stayed pretty steady since the end of last year.
In other news, the BEA also released consumer spending data:
Adjusted for inflation, spending ticked up from 2% last month to 2.3% this month (compared to a year ago), but it's still well below its pre-pandemic trendline.
NBC News reports that state officials working for Ron DeSantis are soliciting campaign contributions from lobbyists with business before the state:
NBC News spoke with 10 Republican lobbyists in Florida, all of whom said they couldn't remember being solicited for donations so overtly by administration officials — especially at a time when the governor still has to act on the state budget.
....“What the f--- am I supposed to do?” one lobbyist said. “I have a lot of business in front of the DeSantis administration.”
....“The practice feeds the DeSantis corrupt swampy meme perfectly for opponents. For no f------ reason,” said another veteran Florida Republican. “Hard to be Mr. Break the Internet and Swamp when you do this. Really dumb.”
....“Whoever is telling these kids to do this has lost their damn mind,” said another Florida Republican lobbyist.
Quite the guy, our Ron. Maybe this is illegal; maybe it's not. He doesn't care.
The Supreme Court today severely curtailed the EPA's ability to regulate wetlands under the Clean Water Act. This was a genuinely complicated case, but the big problem is that the court majority was able to do its work only by twisting the clear instructions of Congress. The CWA defines wetlands as anything "adjacent" to lakes, streams, rivers, and so forth, but conservatives on the court just tossed that aside:
To determine when a wetland is part of adjacent “waters of the United States,” the Court agrees with the Rapanos plurality that the use of “waters” in §1362(7) may be fairly read to include only wetlands that are “indistinguishable from waters of the United States.” This occurs only when wetlands have “a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that there is no clear demarcation between ‘waters’ and wetlands.”
"Adjacent" is simply not the same thing as "indistinguishable" or "adjoining" or any other word. As Justice Kagan acidly puts it:
One last time: “Adjacent” means neighboring, whether or not touching; so, for example, a wetland is adjacent to water on the other side of a sand dune. That congressional judgment is as clear as clear can be—which is to say, as clear as language gets. And so a clear-statement rule must leave it alone. The majority concludes otherwise because it is using its thumb not to resolve ambiguity or clarify vagueness, but instead to “correct” breadth.
Kagan is clear that the conservative majority is rewriting the words of Congress not because of any ambiguity—there isn't any—but simply because they believe the current wetlands rules go too far. In other words, they are baldly substituting their own water regulation preferences for those of Congress, even though Congress's are clearly expressed. It's an appalling act of transparent judicial activism.
