Driving the Day: 3/27/12
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In the first of three days of hearings, Supreme Court justices made it clear that they would decide this year on the constitutionality of President Obama's Affordable Care Act. The 1867 Anti-Injunction Act forbids lawsuits against federal tax policies until the tax has been paid. Under the health care law, penalties for not acquiring insurance would not kick in until 2015. As the word "tax" was not used in the health care legislation, however, the justices signaled that they did not feel the Anti-Injunction Act would apply to this case. The health care hearings continue today with arguments about whether the individual mandate is constitutional.
Two years after President Obama signed it into law, the U.S. Chamber of Commerce says the sluggish implementation of the Dodd-Frank bill has made it “impossible” for businesses to “know the rules of the road,” according to a new scorecard released Tuesday. Out of the 17 portions of the controversial Dodd-Frank bill that the Chamber graded, all but two received some sort of “incomplete” grade, an indicator of the slow movement that has led to greater uncertainty. The scorecard focuses on the regulations enforcing the bill, including a call for a fresh start on the Volcker Rule, and not the law itself.
EPA will announce a rule today that will require new coal-fired power plants to capture their carbon dioxide emissions – either for storage or to send CO2 to oil and gas drilling operations to help extract fossil fuels. The rule means that coal-fired power plants as they exist now will not be built in the future. The new standard will require that new power plants emit CO2 at a rate no greater than that of a nature gas power plant, which currently emit an average of 60% less greenhouse gases than coal plants.
Fed Will Keep Interest Rates Low, Bernanke Signals – Los Angeles Times
Despite some jobs gains in early 2012, Federal Reserve Chairman Ben Bernanke said the U.S. labor market growth is still at risk because of slow economic recovery, indicating he would continue with the Fed's low interest policy. Bernanke noted that the employment rate and the number of hours worked is still below pre-recession levels, and said the drop in the jobless rate in January and February was "out of sync" with America's slow economic growth. For the unemployment rate to drop further, America needs faster growth in production and business and consumer demand, and Bernanke said continued low interest rates and "accommodative policies" will support the needed growth. The Fed has said it will keep short-term interest rates near zero until late 2014.
Despite the hype that housing is in a robust recovery, a slew of new data last week has disappointed analysts and the stock market. There was not one hopeful headline that came from the new data as the only gains were made in multi-family housing, a contrary indicator to housing recovery. Mortgage originations are at a 12-year low, despite record low rates, and rents are still on the rise. The new data has prompted analysts to start questioning the strength of the recovery.
In other news…
Small Businesses Caught in Battle Over Export Aid – Businessweek
House Approves Tweaks to Dodd-Frank – The Hill
Why We Went to Court Over ObamaCare – Dan Danner, NFIB via Fox news
Senate Democrats Unveil Business Tax Breaks – ABC News