Supreme Court Rulings | Four Years After ‘Recovery Summer’ "U.S. Economy Shrunk By Most In Five Years"

Today in Washington, D.C. - June 25, 2014:  Supreme Court Rulings: This morning the Supreme Court unanimously issued a ruling banning warrantless cell phone searches. The Washington Times reportes "The Supreme Court ruled Wednesday that police must obtain warrants before snooping through people’s cellphones, delivering a unanimous decision that begins to update legal understanding of privacy rules to accommodate 21st-century technology. Police agencies argued that searching through data on cellphones was no different from asking someone to turn out his pockets, but the justices rejected that, saying a cellphone holds the most personal and intimate details of someone’s life and falls squarely within the Fourth Amendment’s privacy protections. . . . The court did carve out exceptions for “exigencies” such as major security threats."

The Supreme Court also ruled 6-3 against Aereo determining they violated the Copyright Act. CNN Money reports. "Today's decision is a victory for consumers," Paul Clement, the attorney representing the broadcasters, said in a statement. "The Court has sent a clear message that it will uphold the letter and spirit of the law just as Congress intended. . . . The ruling essentially protects billions of dollars in retransmission fees that broadcasters collect for their signals. Media stocks rallied after the news was announced."

The Senate reconvened at 9:30 AM today and began a period of morning business.

At noon, the Senate began consideration of H.R. 803, the Workforce Investment Act. At 2:30, the Senate will vote on 3 amendments to the bill: one offered by Sen. Jeff Flake (R-AZ), one offered by Sen. Mike Lee (R-UT), and a managers’ amendment of technical corrections to the bill. Following those votes, the Senate will then vote on passage of the bill.

Yesterday, the Senate voted to confirm four district court nominees, three for Florida, and one for Vermont.

Also yesterday, Democrats advanced the nomination of Leon Rodriguez to be Director of the United States Citizenship and Immigration Services using the precedent they set after they used the nuclear option to break Senate rules and allow cloture on nominations with fewer than 60 votes. Cloture was thus invoked on the Rodriguez nomination by a vote of 52-44. The Senate later voted 52-44 to confirm his nomination.

The House reconvened at 10 AM.  The House is expected to take up the following bills:
H.R. 4899 - "To lower gasoline prices for the American family by increasing domestic onshore and offshore energy exploration and production, to streamline and improve onshore and offshore energy permitting and administration, and for other purposes; providing for consideration of the bill."
H.R. 4923 - Making appropriations for energy and water development and related agencies for the fiscal year ending September 30, 2015, and for other purposes; and for other purposes."
H.R. 6 — "To provide for expedited approval of exportation of natural gas to World Trade Organization countries, and for other purposes." (Unfinished business)

Yesterday the House passed the following bills:
H.R. 1098 (Voice Vote) — "To amend the Public Health Service Act to reauthorize certain programs relating to traumatic brain injury and to trauma research."
H.R. 1281 (Voice Vote) — "To amend the Public Health Service Act to reauthorize programs under part A of title XI of such Act."
H.R. 3301 (238-173) — "To require approval for the construction, connection, operation, or maintenance of oil or natural gas pipelines or electric transmission facilities at the national boundary of the United States for the import or export of oil, natural gas, or electricity to or from Canada or Mexico, and for other purposes."
H.R. 3548 (Voice Vote) — "To amend title XII of the Public Health Service Act to expand the definition of trauma to include thermal, electrical, chemical, radioactive, and other extrinsic agents."
H.R. 4080 (Voice Vote) — "To amend title XII of the Public Health Service Act to reauthorize certain trauma care programs, and for other purposes."
H.R. 4413 (265-144 ) — "To reauthorize the Commodity Futures Trading Commission, to better protect futures customers, to provide end users with market certainty, to make basic reforms to ensure transparency and accountability at the Commission, to help farmers, ranchers, and end users manage risks to help keep consumer costs low, and for other purposes."
H.R. 4631(Voice Vote) — "To reauthorize certain provisions of the Public Health Service Act relating to autism, and for other purposes."
S. 1681 (Voice Vote) — "To authorize appropriations for fiscal year 2014 for intelligence and intelligence-related activities of the United States Government and the Office of the Director of National Intelligence, the Central Intelligence Agency Retirement and Disability System, and for other purposes."

The Wall Street Journal reports, “The U.S. economy contracted at a worse pace than previously estimated in the first quarter, marking its sharpest pullback since the recession ended five years ago. Gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 2.9% in the first three months of the year, according to the Commerce Department's third reading released Wednesday. That was the fastest rate of decline since the first quarter of 2009, when output fell 5.9%. . . . In its third GDP reading, based on newly available data, Commerce said first-quarter consumer spending and exports were even weaker than previously estimated. . . . The economy's first-quarter stumble has once again dashed hopes the recovery was in the process of switching into a higher gear.”

Reuters adds, “While the economy's woes have been largely blamed on an unusually cold winter, the magnitude of the revisions suggest other factors at play beyond the weather. Growth has now been revised down by a total of 3.0 percentage points since the government's first estimate was published in April, which had the economy expanding at a 0.1 percent rate. The difference between the second and third estimates was the largest on records going back to 1976, the Commerce Department said.”

The WSJ notes, “Five years into the recovery, high unemployment and stagnant incomes continue to restrain consumer spending, which accounts for more than two thirds of U.S. economic output. Consumer spending grew by a 1% pace in the first quarter, revised down from the previous estimate of 3.1%. Commerce said the downward revision was primarily the result of weaker health-care spending, though it also revised lower its estimate of spending on goods.”

But wasn’t the Obama administration boating of health care spending when the original first quarter GDP estimates came out? White House Press Secretary Jay Carney said at the time, “[T]he fact of the matter is, and the GDP report makes it clear, that it was consumer spending on health care that helped drive economic growth in the first quarter. And that is directly related to the increase in people who have insurance because of the Affordable Care Act.” (Never mind that Obamacare was initially sold by the Obama administration as slowing the growth of health care spending.)

Megan McArdle examines what’s going on here, writing, “How did this happen? The White House line is that this was driven mostly by health care and net exports. . . . Health-care spending is a major factor in the downward revision of Bureau of Economic Analysis estimates, because the BEA was overestimating it in prior reports. But it is not what is mainly driving the actual decline in GDP. That looks a lot more broad-based . . . . It’s still a mystery why health-care costs have fallen. One theory is that this was a transitional thing -- maybe people who were going to sign up for a health plan but procrastinated until the deadline put off a bunch of ordinary medical expenses until they had their new insurance. It’s also possible that the weather kept people at home; after all, the unusually hard winter is thought to have hurt first-quarter GDP. Though as an explanation, weather is a lot more convincing when you’re talking about a tiny decline than it is when you’re talking about a huge drop like this. Snow keeps people from shopping so much; it does not cause them to abandon all economic activity and hole up in their homes waiting for the final trump to sound. The most worrisome potential explanation is that health expenditures fell because, well, health expenditures fall when the economy is contracting. I’m not exactly ready to call recession yet . . . . But I’ll be crossing my fingers until the next report comes out.”

As Senate Republican Leader Mitch McConnell said recently, “Four years after administration officials trumpeted ‘Recovery Summer’ in June 2010, working men and women in this country are more anxious about work, and family, and the high cost of living. And that’s to say nothing of the millions who can’t find work at all.”

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