As the end of 2013 approaches, the Washington Examiner is taking a look back at the biggest stories and issues of the year. Today, it's economics.
The future of the Federal Reserved was shaped this year, when Janet Yellen was picked to succeed Ben Bernanke after Democrats in Congress stood against Larry Summers. Elizabeth Warren made waves with her populist push to bring back Glass-Steagall. Democrats and Republicans butted heads on a variety of issues, including unemployment benefits, student loans and what to do about Fannie Mae and Freddie Mac.
Here are some of the top Examiner stories of 2013 on economics:
The White House is annoyed with liberals over Larry Summers
By Joseph Lawler, Aug. 14
When it came time for the president to nominate a replacement for Ben Bernanke at the Federal Reserve, congressional Democrats made an early push for Janet Yellen (the eventual pick) over Larry Summers, who was perceived as the favorite because of his past work with the administration. The White House reportedly felt President Obama's own party had usurped his authority on the decision.
Over the past few weeks, a number of Democrats have registered their disapproval of Summers. Rep. Ed Perlmutter of Colorado directly challenged Obama to defend Summers when the president visited House Democrats in late July. The majority of women in the House Democratic caucus wrote Obama a letter asking him to pick Yellen. In a recent Huffington Post article, senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont laid out a set of criteria for the selection of a Fed chairman that seemed specifically to exclude Summers.
The most aggressive intervention by Democrats into the process, however, was a letter that a group of liberal senators sent Obama in late July recommending Yellen for the post, a clear sign that the senators were worried by news about Obama leaning toward Summers.
Elizabeth Warren introduces new Glass-Steagall bill with bipartisan support
By Joseph Lawler, July 11
The freshman senator made an ill-fated push over the summer to reinstate the Great Depression-era Glass-Steagall law that would separate commercial from investment banks.
Anti-bank populism was a key feature of Warren’s 2012 campaign and the reason for her popularity among liberal grassroots groups. Before running for office, she was the chairman of the Congressional Oversight Panel, a group formed in 2008 to oversee the Troubled Asset Relief Program (TARP) and other bailout programs. In that role, Warren became known for combative questioning of Treasury Secretary Timothy Geithner and other administration officials about the Treasury’s treatment of big banks and mismanagement of the housing relief program. ...
The bill marks bipartisan unease with the size of the biggest banks and their importance in the larger economy. “The four biggest banks are now 30 percent larger than they were just five years ago, and they have continued to engage in dangerous, high-risk practices that could once again put our economy at risk,” Warren said.
Long-term unemployed face loss of benefits
By Joseph Lawler, Nov. 29
Unemployment benefits to 1.3 million jobless Americans were poised to expire at the end of December after Congress failed to pass an extension to the Emergency Unemployment Compensation program.
Five years after the financial crisis, 4.1 million Americans have been out of work for longer than 27 weeks. Many of them face a looming deadline at the end of the year, when federal long-term unemployment benefits expire.
It's a perilous situation for a group that has been uniquely affected by the slow economic recovery. While short-term unemployment is back to pre-recession rates, the job market for the long-term unemployed is still in crisis.
The National Employment Law Project estimates that the 1.3 million long-term jobless who receive benefits will lose them on Dec. 28, if Congress does not reauthorize the Emergency Unemployment Compensation program before then. And 850,000 more workers who would have been eligible for added benefits will use up their regular 26 weeks of unemployment insurance through the first three months of 2014.
Republicans, Democrats agree Fannie Mae and Freddie Mac should go --- but what's next?
By Joseph Lawler, July 25
Fannie Mae and Freddie Mac were major players during the U.S. financial crisis of 2008. Five years after the crisis, Democrats and Republicans both agreed that it was time to wind them down, but couldn't agree on a plan.
House Republicans passed a bill at the committee level Wednesday to wind down Fannie and Freddie in five years, and a bipartisan group on the Senate Banking Committee has introduced a bill that would do the same. But there is no agreement on what housing finance should look like after the two government-owned mortgage buyers are gone.
There's good reason for the disagreement: Freddie and Fannie, as private companies sponsored by the government, were always major players in U.S. housing finance. But since becoming government-owned entities in 2008, they have dominated the mortgage market.
Ed DeMarco, the top regulator in charge of Fannie and Freddie, warned in a March speech that the country "finds itself in the uncomfortable position of having over 90 percent of new mortgage originations supported by the federal government."