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    America has an income inequality problem and Bernie Sanders is on a mission to fix it. Lots of politicians talk about the widening gap between the rich and the poor, but Sanders is the 2016 presidential candidate offering the most aggressive -- and some would say radical -- plans to narrow the gap. At this point, the Democratic candidate has virtually no chance of winning the White House.

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    It's tempting to describe the legislative chaos surrounding the National Security Agency's surveillance programs as dysfunction. Possibly, though, the framers would have been pleased.Asked to renew a controversial law that many say intrudes on Americans' civil liberties, Congress finds itself unable to muster the votes for a compromise ahead of a deadline Friday. The bicameral legislature's internal checks and balances could force the executive branch to pause the program indefinitely.Advocates for civil liberties aren't interested in a short extension to give lawmakers time to work out a solution, and they're also not particularly pleased about the reform bill the House passed earlier this week. Scott Shackford in Reason and Andrea Peterson in The Washington Post explain their objections.On the other hand, Sen. Mitch McConnell (R-Ky.), the majority leader, hopes to continue surveillance without making changes. The next few days will tell whether they can find a way to resolve their differences.Welcome to Wonkbook. To subscribe by e-mail, click here. Send comments, criticism or ideas to Wonkbook at Washpost dot com. Follow Wonkblog on Twitter and Facebook.What's in Wonkbook: 1) NSA reform 2) Opinions, including Will on the death penalty 3) A fluffy, funny-looking prairie bird causes a dust-up in Congress, and moreChart of the day: Incomes fluctuate wildly from month to month for a surprising number of Americans. Jim Tankersley in The Washington Post. 1. Top story: NSA could be forced to halt surveillanceIf Congress doesn't act this week, the National Security Agency will shut down its program. "A bitter ideological divide in Congress appeared destined Wednesday to at least temporarily end the bulk collection of Americans’ phone records as government officials warned they would have to begin shuttering the program after Friday if lawmakers do not act. ... The Justice Department made clear that the government needs to know Congress's intentions this week. The current court order authorizing the program requires the government to file for any renewal no later than Friday if it intends to continue the collection, according to the memo, which was obtained by The Washington Post." Mike DeBonis and Ellen Nakashima in The Washington Post.But Rand Paul took crucial minutes off the clock with an informal filibuster. "Sen. Paul’s (R-Ky.) filibuster hampers the GOP-led Senate’s efforts to pass the big-ticket items before the Memorial Day recess. ... Paul’s move will require McConnell to get a series of unanimous-consent agreements if he is to stick to his timeline of passing fast-track and an extension of the Patriot Act this week. Any one senator can block such an agreement, and there are many who feel strongly about trade and the nation’s spying powers. Senate officials say there is a chance proceedings could extend well into the holiday weekend. Aides say fast-track and a short-term extension of surveillance authority likely have the votes to pass the upper chamber. But the Senate might not have enough time to get the bills done over the next couple of days. Furthermore, key provisions of the Patriot Act expire June 1, and lawmakers are not scheduled to return to Washington before then. The House, meanwhile, is expected to leave town Thursday." Alexander Bolton in The Hill.He talked for 11 hours, with support from a handful of Democrats. "He spoke about the bulk collection of data. He spoke about civil forfeiture. He spoke about Section 213 of the Patriot Act, “this whole sneak-and-peek” that allows the government to come into a person’s house. He spoke about criminal justice. And spying. And a 1928 court case. And the Ninth Amendment. Every half-hour or so a new stenographer came over to stand by Paul’s desk, relieving the previous one. ... 'Where’s the outrage?' he asked. The chamber was nearly empty, save for a few staffers seated in the back and a security guard standing near the door." Katie Zezima in The Washington Post.There's not much Mitch McConnell can do. "McConnell had hoped Congress would reauthorize Section 215 and leave the program intact, arguing that it's a critical part of defense against terror attacks. But privacy concerns raised by Democrats and libertarian-minded Republicans have made that impossible. Instead, last week, the House passed a bill that would limit the data-collection program. ... For McConnell, passing the House measure is not acceptable, but as he looks for an alternative, he lacks an obvious path to keeping the program from expiring when it hits its June deadline. On Tuesday, McConnell announced he would give the USA Freedom Act a vote on the floor. He won't be supporting the legislation, but is putting it on the floor to demonstrate that it lacks the support it would need to advance in the Senate." Lauren Fox in National Journal.He and his allies in the Senate are on their own. "On one side are the president, the public, a recent appellate-court decision, and an overwhelming bipartisan majority of the House. On the other is a cast of Senate Republican hawks, pushing for the federal government to continue the bulk collection of phone-call records from millions of Americans. ... The hawks now are whipping against the House reform bill, which has the support of almost all Senate Democrats and some libertarian-leaning Republicans. Realizing that a permanent or years-long extension of the NSA's authorities is improbable, they hope that enough members in the middle will come together to pass a short-term bill extending the NSA's authorities to figure out a compromise." Alex Rogers in National Journal.2. Top opinions WILL: Proponents of capital punishment are losing the debate. "Nebraska is not a nest of liberals. Yet on Wednesday its 49-member unicameral legislature passed a bill abolishing the death penalty 32 to 15. ... First, the power to inflict death cloaks government with a majesty and pretense of infallibility discordant with conservatism. Second, when capital punishment is inflicted, it cannot later be corrected because of new evidence, so a capital punishment regime must be administered with extraordinary competence. It is, however, a government program. Since 1973, more than 140 people sentenced to death have been acquitted of their crimes (sometimes by DNA evidence), had the charges against them dismissed by prosecutors or have been pardoned based on evidence of innocence." The Washington Post.FALLOWS: Policymakers knew at the time that Iraq wasn't a threat and the invasion would be risky. "No one ever again—not a news person nor a civilian, not an American nor one from anyplace else—should waste another second asking, 'Knowing what we know now, would you have invaded Iraq?' ... Leaders don’t make decisions on the basis of 'what we know now' retrospectively. They have to weigh evidence based on 'what we knew then,' in real time. ... The 'knowing what we know' question presumes that the Bush Administration and the U.S. public were in the role of impartial jurors, or good-faith strategic decision-makers, who while carefully weighing the evidence were (unfortunately) pushed toward a decision to invade, because the best-available information at the time indicated that there was an imminent WMD threat. That view is entirely false." The Atlantic.BRODY: A report concluded years ago that the Bush administration misrepresented intelligence officers' conclusions. "That report, from June 2008, found that President George W. Bush, Vice President Dick Cheney, Secretary of State Colin Powell, and others used information from the intelligence community in public statements about Iraq but routinely glossed over uncertainties, some of which were significant. ... Administration officials’ statements about the link had no basis in analysts’ conclusions, while officials' repeated insinuations that Iraq would give terrorists WMDs to attack the U.S. actually 'were contradicted by the available intelligence.' The report also addressed the administration’s rosy predictions about postwar Iraq. ... Before the war, the intelligence community actually believed that '[e]stablishing a stable democratic government in postwar Iraq would be a long, difficult and probably turbulent challenge.' " Bloomberg.YGLESIAS: Hillary Rodham Clinton has a plan to help small bankers. "Being for small business in American politics is like having a favorable attitude toward Mom or apple pie. But campaigning in Iowa this week, Hillary Clinton's thus-far policy-light campaign rolled out the germ of a small-business idea that has big implications: the federal government should help smaller businesses by showing more favorable treatment to small banks. ... The specific claim that the health of the community banking sector is critical for small businesses is a piece of longstanding conventional wisdom within the small business community, a point of pride for community bankers, and backed up by a fair amount of expert analysis. It is not, however, a point of universal agreement. ... Of course, a separate question is whether a financial model that disproportionately benefits smaller companies is good for the country overall."Vox.3. In case you missed itThe Federal Reserve will likely not raise interest rates in June. "Officials have been saying they won’t begin lifting their benchmark federal funds rate from near zero until they see more improvement in the labor market and are confident inflation will rise toward their 2% target. Several of them started the year thinking they might reach that point by midyear. But by last month, after watching the economy stumble through the winter, many at the April 28-29 meeting were doubtful those criteria for a rate increase would be met, according to minutes of the meeting released Wednesday." Jon Hilsenrath in The Wall Street Journal.Fox News (NWSA) will not invite all candidates to the first GOP primary debate. "Fox News (NWSA) announced guidelines Wednesday that will winnow the field of participants in the first Republican debate of the 2016 presidential campaign. The network will require contenders to place in the top 10 in an average of the five most recent national polls in the run-up to the event, narrowing what is expected to be a field of 16 or more by the Aug. 6 event in Cleveland. ... It remains to be seen how many candidates will be included in the Fox News (NWSA) debate under the criteria, which could allow more than 10 participants if some are tied in the polls." Matea Gold in The Washington Post.Former Florida Gov. Jeb Bush is not sure to what degree humans are changing the climate. "Republican Jeb Bush said on Wednesday that the Earth's climate is changing but that scientific research does not clearly show how much of the change is due to humans and how much is from natural causes. ... 'Look, first of all, the climate is changing. I don’t think the science is clear what percentage is man-made and what percentage is natural. It’s convoluted. And for the people to say the science is decided on, this is just really arrogant, to be honest with you,' he said." Steve Holland for Reuters.Lawmakers skirmish over the sage grouse. "A Republican maneuver on the $612 billion military bill to block the Interior Department from adding the bird to the endangered species list has set off a major congressional skirmish that has spilled over into Western states, where the sage grouse is revered, and among environmental groups... The attempt to circumvent protections for the sage grouse — fluffy, with a formidable chest once puffed, chickenlike yet more proud — as well those for the lesser prairie chicken and the American burying beetle is part of an ambitious push that House Republicans have pursued since retaking the majority in 2010 to roll back, limit or unravel environmental regulations." Jennifer Steinhauer in The New York Times.




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    The Republican-controlled U.S. Senate Banking Committee voted down efforts by the panel's Democrats on Thursday to narrow the scope of a financial regulatory reform bill that aims to give relief to smaller banks and financial firms. In a 12-10 vote, the committee declined to accept the Democrats' alternative proposal.

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    People move to the South and West today for a lot of the same reasons they've historically moved to the suburbs: Developers are constantly building more housing there, which makes it cheap and plentiful and the cost of living seemingly low. And for much of the 2000s, this trend — Americans ebbing out of the Northeast and Midwest for the Sunbelt — has been the dominant geographic shift in the U.S.The housing bust and recession put a hold on that trend. But today it's picking up again."We’re now on the verge of having a renewal of the growth of the Sunbelt, which took a little bit of a hit during the recession and immediate post-recession years," says Brookings Institution demographer William Frey. "And this is likely to continue."This is true at the metropolitan level — Sunbelt metros are growing faster than Northeastern ones — and new census population data out today shows it's true within cities, too. According to Frey's analysis, these were your fastest growing cities in America over the past year: Austin, Orlando, Durham, Henderson, Nev., Denver, Fort Worth. All grew faster last year than they had the year before. Austin gained more than 25,000 people, Houston more than 35,000 (this includes net domestic migration, immigration and natural growth from births and deaths).If you have the impression that everyone's moving these days to San Francisco, New York and Washington, that's pretty far off. Those cities are still growing, too, but at a slower rate than they have been over the last couple of years. Washington grew by about 1.5 percent between 2013 and 2014 (that's about 9,700 people). That's down from the more than 2 percent growth in each of the previous three years.The fact that people are moving in larger numbers again to the Sunbelt means that the economy and the housing market are picking up there again. These other cities also have notably cheaper housing."The cost of living is really very important, and that’s why we’ve seen a real out-migration from California and the New York metro area for a long time," Frey says. "The reason there was a huge flow into Las Vegas and Phoenix and Atlanta, and North Carolina and Florida cities, has been that these are much more affordable places. It’s sunnier there, too — which is an extra benefit."But the bigger factor is affordability.Coupled with another trend — the far-out suburbs are now regaining steam, too — it looks like we're heading back to a pre-recession normal. Minus, hopefully, the housing bubble.




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    The amount of U.S. commercial paper contracted to its lowest level in nearly 2-1/2 years in the latest week, suggesting sluggish loan demand to finance payrolls and inventories, Federal Reserve data showed on Thursday. U.S. seasonally adjusted commercial paper outstanding fell $28.3 billion to $964.1 billion in the week ended May 20.

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    * Weekly jobless claims rise 10,000. * Four-week average of claims at new 15-year low. * Existing home sales fall 3.3 percent in April. * Factory activity moderates in May. By Lucia Mutikani. The U.S. economy was on a modest growth path early in the second quarter with home resales falling in April and manufacturing activity on the backfoot in May, although the labor market continued to tighten.

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    The Philadelphia Fed's manufacturing index increased to a reading of 6.7 in May, below the 7.5 in April and the 8.8 forecast in a MarketWatch-compiled economist poll. Any reading above zero indicates expansion. The subcomponent for new orders rose to 4.0 from 0.7, while the shipments index increased to 1.0 from negative 1.8.

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    Sales of existing homes fell 3.3% in April to a seasonally adjusted annual rate of 5.04 million, hit by rising prices and pulling back from March's jump higher, the National Association of Realtors reported Thursday. Economists polled by MarketWatch had expected an April rate of 5.24 million, compared with an originally reported March rate of 5.19 million. On Thursday NAR revised March's pace to 5.21 million.

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    The leading economic index rose 0.7% in April, indicating the U.S. is still expanding despite a first-quarter freeze. "April's sharp increase in the LEI seems to have helped stabilize its slowing trend, suggesting the paltry economic growth in the first quarter may be temporary," said Ataman Ozyildirim, economist at The Conference Board, publisher of the report. "However, the growth of the LEI does not support a significant strengthening in the economic outlook at this time."

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    U.S. home resales unexpectedly fell in April as tight inventories pushed prices higher, giving a cautious signal on the strength of the housing market. The National Association of Realtors said on Thursday existing home sales dropped 3.3 percent to an annual rate of 5.04 million units. March's sales pace was revised up to 5.21 million units from the previously reported 5.19 million units.

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    The average rate for a 30- year fixed-rate mortgage ticked lower to 3.84% in the week that ended May 21 from the prior week's average of 3.85%, which was the highest in two months, according to a Thursday report from federally controlled mortgage-buyer Freddie Mac. "Mortgage rates were little changed this week amid positive housing news," said Len Kiefer, Freddie's deputy chief economist. A year ago, the 30- year rate was at 4.14%.

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    The flash reading of the Markit manufacturing purchasing managers index fell to 53.8 in May from 54.1 in April. New orders growth dropped to the slowest pace since January 2014. Export sales have declined for two straight months, adding to evidence that the strong dollar has been holding down the economy. The flash estimate is typically based on approximately 85%-90% of total PMI survey responses each month, and any reading above 50 indicates improving conditions.

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    As the recession fades in the rearview mirror, many big U.S. cities that saw population gains when the economy was down are growing more slowly, even as suburbs remain stable or grow faster. Population growth slowed in 33 of the nation's 50 largest cities between July 2013 and July 2014 compared to the prior year, according to Kenneth Johnson, a demographer at the University of New Hampshire, who analyzed new Census Bureau data released on Thursday. The latest data largely echo trends...

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    The number of people who applied for U.S. unemployment benefits in mid-May rose by 10,000 to a seasonally adjusted 274,000, hitting the highest level in a month, government figures show. That's still near a 15- year low, however. Economists polled by MarketWatch had expected claims in the seven days stretching from May 10 to May 16 to rise to 269,000 from an revised 264,000 in the prior week.

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    New applications for benefits rise 10,000 to 274,000. WASHINGTON-- Most American workers remain safe in their jobs. Initial jobless claims-- a proxy for layoffs-- rose by 10,000 to a seasonally adjusted 274,000 in the week ended May 16. Although they hit a four-week high, new claims are still 16% lower compared to a year ago and remain near a 15- year bottom amid the lowest rate of layoffs on record.

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    Critical information ahead of the market's open. I keep telling my kid that it's OK not to look/think/dress like everyone else. But it's a waste of breath because those tweensters want to blend in.

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    The U.S. economy was on a modest growth path early in the second quarter with home resales falling in April and manufacturing activity on the backfoot in May, although the labor market continued to tighten. Growth is struggling to rebound strongly after slumping at the start of the year, weighed down by bad weather, a strong dollar, port disruptions and deep energy spending cuts.

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    The U.S. economy performed below trend in April but not as bad as the previous month, according to the Chicago Fed's national activity index released Thursday. The index edged up to negative 0.15 from negative 0.36 in March, and the three-month average edged u to negative 0.23 from negative 0.27. The index is a weighted average of 85 indicators of national economic activity, and when the three-month average moves below negative 0.7, there's an increasing likelihood a recession has...

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    The U.S. federal funds rate, which banks charge each other to borrow each other's excess reserves, averaged 0.12 percent for a second day on Wednesday, U.S. Federal Reserve data released early Thursday showed.