Wonkbook: House reaches bipartisan deal to reject Simpson-Bowles
By Ezra Klein,
Of late, there have been a number of efforts to reconstruct the debt deal that President Obama and Speaker Boehner almost agreed on in August. At the Post, Peter Wallsten, Lori Montgomery and Scott Wilson published one two weeks ago. In the New York Times Magazine, Matt Bai has just released his own take, which includes an odd and unbecoming swat at the other outlets that wrote stories on this question even "as it became clear that I" -- and, yes, "I" means Matt Bai -- "was planning to write a more nuanced and detailed account of the final week of negotiations."
Erskine Bowles, left, accompanied by former Wyoming Sen. Alan Simpson, co-chairmen of President Obama's bipartisan deficit commission, gestures while speaking on Capitol Hill in Washington on Nov. 10, 2010.
Perhaps that's true. I think now, and thought then, that the real scandal of those negotiations wasn't that the deal fell apart, but that the deal that almost passed was a bad deal. Much worse, say, than something like Simpson-Bowles.
Which brings us to Simpson-Bowles (see how I did that?). On Wednesday, Reps. Jim Cooper and Steve LaTourette managed to put Simpson-Bowles to a vote before the House of Representatives. It didn't just fail. It got crushed. The final tally was 382-38. Twenty-two of the supporters were Democrats, while 16 were Republicans. But overall, the rejection was overwhelming, and overwhelmingly bipartisan.
This was, of course, what the White House always complained would happen if they had listened to the pundits and brought Simpson-Bowles to a vote. Republicans would reject it because it included $2 trillion in new taxes and $800 billion in defense cuts. Democrats would reject it because they weren't going to vote for a doomed proposal that included deep Medicare and Social Security cuts in addition to a large tax increase just to show how much they cared about deficits. Perhaps, with presidential leadership, the vote would have been less lopsided.
But Wednesday's vote — which considered a version of SImpson-Bowles with somewhat less in tax increases -- is at least suggestive evidence that the White House was right and the proposal would never have passed because, in the end, the problem with Simpson-Bowles wasn't that the president didn't say enough nice things about it, but that members of Congress didn't want to vote for it.
Now think back to August. Consider all the forces pushing towards a big deal: The media, which loves bipartisan deficit-reduction packages. The Speaker of the House of Representatives. The President of the United States. The business community. Washington's deficit-reduction community. And still, the underlying reality of the tumultuous negotiations was that the two sides couldn't line up the votes for anything even approaching a reasonable package. That's why the negotiations were so tumultuous.
This was truer on Boehner's side than Obama's, of course. As Bai writes, "What’s undeniable, despite all the furious efforts to peddle a different story, is that Obama managed to persuade his closest allies to sign off on what he wanted them to do, and Boehner didn’t, or couldn’t. While Democratic leaders were willing to swallow either a deal with more revenue or a deal with less, Boehner’s theoretical counteroffer, which probably reflected what he would have done if empowered to act alone, never even got a hearing from his leadership team."
I wonder if Democrats would have been so accomodating if Obama had actually released the full details on what he was negotiating with Boehner. Once they got an actual look at what they were giving away, and what they were getting in return, they might have balked. But the bottom line is the votes, particularly on the Republican side of the aisle, just weren't there for a major compromise. And, as Wednesday’s vote on Simpson-Bowles showed, they're still not there. They're only there for a not-compromise. Preferably a hardcore not-compromise.
Today, Rep. Paul Ryan's budget will come up for a vote in the House. It's expected to pass on a party-line vote. Insofar as any trouble is foreseen, the difficulty is that many conservatives consider Ryan's budget too compromised and incrementalist. I'll repeat that: They consider Paul Ryan's budget -- which is an undeniably radical, transformational document as compared to the major budget proposals of, oh, the last 50 years -- too compromised and incrementalist.
Meanwhile, Democrats are so uninterested in taking tough votes for doomed bills that they helped Republicans unanimously defeat a version of Obama’s 2013 budget that the GOP brought to the floor. No reason to vote for a tax increase if it’s not going to pass, Democrats figure.
When that's the ideological and political temperature of the two parties, it's not obvious that any amount of leadership from the top can lead to a reasonable, far-reaching deal.
1) The Supreme Court wrapped up the oral arguments over Obamacare. "The Supreme Court closed an extraordinary three-day review of President Obama’s health-care law Wednesday with its conservative majority signaling that it may be on the brink of a redefinition of the federal government’s power. Justices on the right of the deeply divided court appear at least open to declaring the heart of the overhaul unconstitutional, voiding the rest of the 2,700-page law and questioning the underpinnings of Medicaid, a federal-state partnership that has existed for nearly 50 years. Much can happen between now and the expected ruling this summer, and a far more moderate tone may emerge. Broad statements come more easily in the court’s intense oral arguments than in majority opinions. The vote appears close and the court could uphold the law." Robert Barnes and N.C. Aizenman in The Washington Post.
@petersuderman: I've read a few tweets about this morning's hearing so I'm pretty sure I can accurately predict how the court will rule.
LITHWICK: It was another bad day in court for Obamacare. "Court watchers seem to generally agree that the individual mandate is in real peril and will rise or fall with Chief Justice Roberts and Justice Kennedy. Court watchers also agree that 19th-century tax law--while generally adorable--will not prevent the justices from deciding the case by July. And they also agree that they may have counted five justices who appear willing to take the whole law down, along with the mandate, and the Medicaid expansion as well...A lot of today’s discussion started to sound like justices just free-associating about things in the law they didn’t like. That doesn’t reveal all that much about the interplay between the four separate challenges--what happens when they all have to be looked at together--or anything at all about what will happen at conference or in the drafting of opinions. Could the five conservative justices strike down the entire health care law, and take us into what Kagan described this morning as a 'revolution'? They could. Will they? I honestly have no idea anymore." Dahlia Lithwick in Slate.
DENNISTON: NO, actually, it was a good day for the mandate. "The Supreme Court spent 91 minutes Wednesday operating on the assumption that it would strike down the key feature of the new health care law, but may have convinced itself in the end not to do that because of just how hard it would be to decide what to do after that. A common reaction, across the bench, was that the Justices themselves did not want the onerous task of going through the remainder of the entire 2,700 pages of the law and deciding what to keep and what to throw out, and most seemed to think that should be left to Congress. They could not come together, however, on just what task they would send across the street for the lawmakers to perform. The net effect may well have shored up support for the individual insurance mandate itself." Lyle Denniston in SCOTUSblog.
@SupremeHaiku: Arguments conclude/ Will the mandate be struck down?/ And the rest as well?
@sarahkliff: SCOTUS oral arguments on health reform are done. Now just a three month wait for a verdict!
@AdamSerwer: If Obamacare gets struck down, the biggest factor will not be Clement or Verrilli. It'll be that there are five GOP Justices.
2) The House overwhelmingly voted down Simpson-Bowles. "The House overwhelmingly voted down a bipartisan budget proposal Wednesday that would have directed lawmakers to reduce the federal deficit by more than $4 trillion over 10 years through a combination of spending cuts and tax increases. The vote on the budget resolution, which was defeated 382-38, shows how far apart Republicans and Democrats remain in Congress over how to address the growing U.S. debt. The measure was pushed by Reps. Jim Cooper (D., Tenn.) and Steve LaTourette (R., Ohio), who had urged their colleagues to begin work on a bipartisan deal...Defeat of the Cooper/LaTourette proposal, which largely reflected the outline offered in 2010 by the White House's deficit-reduction commission chaired by Republican former Sen. Alan Simpson and Democrat Erskine Bowles, was expected. Twenty-two Democrats and 16 Republicans ended up supporting the measure." Damian Paletta in The Wall Street Journal.
@DLeonhardt: A reminder that deficit reduction -- tax hikes and spending cuts -- is unpopular: Bowles-Simpson fails in House, 382-38.
3) The U.S. is in talks with other countries over a coordinated release of oil reserves. "France’s energy minister, Eric Besson, confirmed his country was in talks with the US, UK and Japan to release billions of barrels of oil on to the market, Saudi Arabia’s influential oil minister said Riyadh would do all it could to bring prices down...While the discussions are at a preliminary stage and none of the countries involved has decided yet to go ahead with a release, three officials familiar with the talks said action was likely in the next three months. After meeting with initial opposition from Germany, which maintains the world’s third-largest oil reserve, Washington has turned to Paris, London and Tokyo for support...The US, UK, France and Japan have been quietly drawing up contingency plans for the release, which officials said could surpass the one authorised during last year’s Libyan civil war. One official said the release could coincide with the formal introduction of a European Union embargo on Iranian crude, scheduled for July 1." Javier Blas in The Financial Times.
4) The House GOP is ready to pass a ninth stopgap highway bill on a party-line vote. "House Republicans went on the offensive Wednesday in the fight over federal transportation funding, with a plan to pass an extension under normal House rules before they adjourn for recess. A 90-day extension of current law that provides funding for road and transit projects, which expired in 2009, was sent to the House Rules Committee on Wednesday evening. The move ended an effort to win Democratic support for the two-thirds majority required to pass the bill under suspension of the rules. It signals Republicans plan to pass their extension with just GOP votes, if necessary, and put pressure on the Democratically controlled Senate to accept it before it leaves town...Democrats in the House are persisting in their efforts to bring the Senate transportation bill to the lower chamber, however, petitioning the House Rules Committee to allow them to offer a substitute amendment containing the Senate version." Keith Laing in The Hill.
1) KLEIN: The Supreme Court's mandate debate is a dispute over a technicality. "The constitutional argument over Obamacare is a dispute over a technicality. We agree that it’s constitutional for the government to intervene far more aggressively in the market. We agree that it’s constitutional for it to intervene in an almost identical, albeit slightly more roundabout, manner. We’re just not sure if the government needs to call the individual mandate a 'tax' rather than 'a penalty,' or perhaps structure it as a tax credit...If the mandate falls, future politicians, who will still need to fix the health-care system and address the free-rider problem, will be left with the option to move toward a single payer system or offer incredibly large, expensive tax credits in order to persuade people to do things they don’t otherwise want to do. That is to say, in the name of liberty, Republicans and their allies on the Supreme Court will have guaranteed a future with much more government intrusion in the health-care marketplace." Ezra Klein in Bloomberg.
2) DIONNE: The Court's conservatives looked an awful lot like judicial activists. "Three days of Supreme Court arguments over the health-care law demonstrated for all to see that conservative justices are prepared to act as an alternative legislature, diving deeply into policy details as if they were members of the Senate Health, Education, Labor and Pensions Committee. Senator, excuse me, Justice Samuel Alito quoted Congressional Budget Office figures on Tuesday to talk about the insurance costs of the young. On Wednesday, Chief Justice John Roberts sounded like the House whip in discussing whether parts of the law could stand if other parts fell. He noted that without various provisions, Congress 'wouldn’t have been able to put together, cobble together, the votes to get it through.' Tell me again, was this a courtroom or a lobbyist’s office? It fell to the court’s liberals -- the so-called 'judicial activists,' remember? -- to remind their conservative brethren that legislative power is supposed to rest in our government’s elected branches." E.J. Dionne in The Washington Post.
3) BLOOMBERG: All of the Bush tax cuts should expire. "The president not only embraced the frustration expressed by Occupy Wall Street protesters--which was real--but he adopted their economic populism. Central to fixing the country's problems, he has argued, is making the wealthiest Americans pay their 'fair share,' even though the top 5% already pay 59% of all federal income taxes, while 42% of filers have no federal income tax bill at all (or got a check from the government via the earned-income tax credit). Warren Buffett's secretary became the public symbol of this strategy, even appearing at the president's State of the Union address...I don't believe in class warfare, and not because I don't want to pay more in taxes. I think the Bush tax cuts should expire for all Americans--you, me, everyone--as part of a long-term plan to rein in the deficit. We are all in this together. Pitting one group against another not only divides us in counterproductive ways but offers one group the false promise of something for nothing." Michael Bloomberg in The Wall Street Journal.
4) YGLESIAS: The mild winter boosted job creation. "Everyone likes a mild winter, but perhaps no one likes it more than President Obama. A recent Macro Musings newsletter from the respected forecasting firm Macroeconomic Advisers suggested that warm weather in December, January, and February added 72,000 extra jobs to the U.S. economy. This report helps explain one of Recovery Winter’s minor puzzles: Why did the economy add an unusually high level of jobs relative to very modest growth in GDP? But it also leaves us with a question: If unseasonable weather boosted winter job growth, would a return to normal this spring undo those gains? Macroeconomic Advisors thinks it will, but there’s reason to believe they’re wrong...Weather also helps explain why the winter saw the reverse of a jobless recovery, a time period in which employment growth was faster than you’d predict based on the GDP numbers." Matthew Yglesias in Slate.
5) TAYLOR: Interventionist monetary policy doesn't work. "Thanks to careful empirical research by Milton Friedman, Anna Schwartz and Allan Meltzer, we have plenty of evidence that rules-based monetary policies work and unpredictable discretionary policies don't. Now is the time to act on that evidence. The Fed's mistake of slowing money growth at the onset of the Great Depression is well-known. And from the mid-1960s through the '70s, the Fed intervened with discretionary go-stop changes in money growth that led to frequent recessions, high unemployment, low economic growth, and high inflation. In contrast, through much of the 1980s and '90s and into the past decade the Fed ran a more predictable, rules-based policy with a clear price-stability goal. This eventually led to lower unemployment, lower interest rates, longer expansions, and stronger economic growth. Unfortunately the Fed has returned to its discretionary, unpredictable ways, and the results are not good." John Taylor in The Wall Street Journal.
Top Long Reads
Matt Bai reconstructs the debt deal that didn't happen: "When the response came back to Nabors, Boehner’s aides had, as expected, struck the $1.5 trillion from the offer. But in its place they had inserted a strange formulation: they were proposing to reduce federal revenue, “compared to current law,” by $2.8 trillion. On the surface, this sounded like a flagrant rejection of what the White House was proposing — “You’re asking for more in taxes, we’re giving you less” — but in fact Boehner was speaking in complex code."
Andrew Katz on the struggle for the soul of Occupy Wall Street: "At 23, Zucker has the organizing gene. He's a fresh graduate of Tulane University, where he studied public health to get a foot in the door of social justice work, and his family lives in Silver Spring, Maryland, just inside the Beltway. He once spent a semester running a health program in Senegal, and upon his return, he got involved with a protest by dining services workers. Zucker, who was hooked after first swinging by McPherson in early October, represents the liberal side of the movement. He wants universal health care and federal takeovers of big banks, and he thinks Occupy Wall Street is a good way to make it all happen. That's a sharp contrast with Murphy, a Long Beach native who earned his high school diploma in 2004 but never graduated. At 17, he was sentenced to more than two years in the California Youth Authority for stabbing three people at a coffee shop after his friend was punched."
Canadian pop interlude: Memoryhouse plays The Police's "Every Little Thing She Does Is Magic" for the AV Club.
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Still to come: Unemployment causes serious damage; no plan B from Obama; we're losing the hacker war; good news for drilling; and a child discovers the wonders of one's shadow.
Unemployment causes lasting damage. "Our economic malaise has spurred a wave of research about the impact of unemployment on individuals and the broader economy. The findings are disheartening. The consequences are both devastating and enduring. People who lose jobs, even if they eventually find new ones, suffer lasting damage to their earnings potential, their health and the prospects of their children. And the longer it takes to find a new job, the deeper the damage appears to be. Not since the Great Depression have so many Americans been unable to find work for so long. But researchers have turned to the next-worst period, the early 1980s, to seek a better understanding of the likely damage. A 2009 study, to cite one recent example, found that workers who lost jobs during the recession of the early 1980s were making 20 percent less than their peers two decades later." Binyamin Appelbaum in The New York Times.
@NickTimiraos: For what must be the first time ever, people are talking about a 30-year mortgage rate of 4.2% as a "high" rate
The House unanimously rejected a proposal based on Obama's budget plan. "The House on Wednesday night unanimously rejected an alternative budget proposal based on President Obama's 2013 budget plan, dispatching it in a 0-414 rout. The vote came just hours after the White House cast the pending vote as a political 'gimmick,' an apparent attempt to downplay what many expected to be an ugly-looking vote for the White House. White House officials said Rep. Mick Mulvaney (R-S.C.), the sponsor of the alternative, was using Obama's top-line spending and revenue numbers as a budget proposal, without any specifics. On the House floor, Budget Committee Ranking Member Chris Van Hollen (D-Md.) agreed that Mulvaney's amendment was not, in fact, Obama's entire budget proposal...Obama's budget plans have a poor track record in Congress over the last year. In May 2011, 97 senators voted against a motion to take up his 2012 budget plan -- no senator voted in favor of the motion." Pete Kasperowicz in The Hill.
Businesses are not thrilled with the House GOP. "Big business groups like the Chamber of Commerce spent millions of dollars in 2010 to elect Republican candidates running for the House. The return on investment has not always met expectations. Even though money for major road and bridge projects is set to run out this weekend, House Republican leaders have struggled all week to round up the votes from recalcitrant conservatives simply to extend it for 90 or even 60 days. A longer-term transportation bill that contractors and the chamber say is vital to the recovery of the construction industry appears hopelessly stalled over costs. At the same time, House conservatives are pressing to allow the U.S. Export-Import Bank, which has financed exports since the Depression, to run out of lending authority within weeks. The bank faces the possibility of shutting its doors completely by the end of May, when its legal authorization expires." Jonathan Weisman in The New York Times.
House Republicans have backed off earlier demands that disaster aid be paid for. "Heading into final votes Thursday, Republicans said the House Budget Committee has backtracked from its earlier demands that future disaster aid be fully offset within the strict appropriations caps set in the party’s resolution. House Appropriations Committee Chairman Hal Rogers told POLITICO that he felt free to 'ignore' these demands, first spelled out in a legislative report prepared by the Budget panel to explain the assumptions that underlie its tax-and-spending plan. The Kentucky Republican said he has the backing of party leaders in this regard and an understanding had been reached as well with Budget Committee Chairman Paul Ryan (R-Wis.)...If disaster aid had to also be squeezed in -- as described in the report -- that would mean a further reduction of at least $5 billion in the total resources available next year." David Rogers in Politico.
Developing nations want an open contest for World Bank head. "The World Bank presidency has always been in Washington’s gift, thanks to the superior voting power of the US and support from other developed nations. But there has been a strong push from the emerging world for an open contest to choose a successor to succeed Robert Zoellick, which the main World Bank shareholders say they support. Ms Okonjo-Iweala, backed by African leaders, is one of three candidates vying to take over from Mr Zoellick when his tenure ends in July...Jim Yong Kim, the American health expert nominated by President Barack Obama to lead the bank, is expected to win the race in April. José Antonio Ocampo, the former Colombian finance minister, is also seeking the job...Ms Okonjo-Iweala’s backers insist she is a strong candidate. A former managing director of the World Bank, she earned widespread respect for helping win Nigeria debt relief during her first term as finance minister from 2003 to 2006." Xan Rice, Lionel Barber, and William Wallis in The Financial Times.
Robots are cool interlude: A robot shows off its impressive vertical jumping skills.
The White House doesn't have a contingency plan if Obamacare is ruled unconstitutional. "The White House has no contingency plans in place in the event the Supreme Court rules the healthcare law is unconstitutional. White House officials said Wednesday they remain 'confident' that the healthcare reform law is constitutional and is implementing all the provisions of the law. If the law is thrown out, there's 'no contingency plan in place,' principal deputy press secretary Josh Earnest said at Wednesday’s press briefing with reporters. 'We're focused on maximizing the benefits of this law.'...During the arguments on Tuesday, a majority of the justices appeared to be skeptical that the health law’s insurance mandate met constitutional muster. But on Wednesday, the court seemed more divided on the question of whether the entire law would need to be thrown out if the court ruled the mandate was unconstitutional." Amie Parnes in The Hill.
PROFILE: Jonathan Gruber, Mr. Health Care Mandate.
The U.S. is losing the hacker war. "The Federal Bureau of Investigation's top cyber cop offered a grim appraisal of the nation's efforts to keep computer hackers from plundering corporate data networks: 'We're not winning,' he said. Shawn Henry, who is preparing to leave the FBI after more than two decades with the bureau, said in an interview that the current public and private approach to fending off hackers is 'unsustainable.'' Computer criminals are simply too talented and defensive measures too weak to stop them, he said. His comments weren't directed at specific legislation but came as Congress considers two competing measures designed to buttress the networks for critical U.S. infrastructure, such as electrical-power plants and nuclear reactors. Though few cybersecurity experts disagree on the need for security improvements, business advocates have argued that the new regulations called for in one of the bills aren't likely to better protect computer networks." Devlin Barrett in The Wall Street Journal.
The government will launch a research effort on big data computing. "The federal government is beginning a major research initiative in big data computing. The effort, which will be announced on Thursday, involves several government agencies and departments, and commitments for the programs total $200 million...Big data refers to the rising flood of digital data from many sources, including the Web, biological and industrial sensors, video, e-mail and social network communications. The emerging opportunity arises from combining these diverse data sources with improving computing tools to pinpoint profit-making opportunities, make scientific discoveries and predict crime waves, for example...On Thursday, the National Science Foundation will announce a joint program with the National Institutes of Health seeking new techniques and technologies for data management, data analysis and machine learning, which is a branch of artificial intelligence." Steve Lohr in The New York Times.
Some lawmakers want to regulate cosmetics. "For the first time in more than 30 years, lawmakers are preparing to extend the Food and Drug Administration’s authority to regulate cosmetics, setting off a battle between large makeup manufacturers and consumer safety advocates over how far the government should go. For months, the cosmetics industry has been fighting a bill introduced by Rep. Jan Schakowsky (D-Ill.) that would ban the use of ingredients linked to cancer and reproductive disorders and require companies to include complete ingredient labels on fragrances and salon products. The FDA is all but powerless when it comes to policing hair care products, makeup and facial treatments -- an industry that brings in about $60 billion every year. The agency has no authority to regulate ingredients or recall products, and while it can ban substances deemed dangerous, it rarely does. The European Union, by contrast, has a list of about 1,200 ingredients that cannot be used in cosmetics." Janie Lorber in Roll Call.
Adorable children discovering new things interlude: A child notices his shadow for the first time.
States are worried about the highway bill expiring. "The doomsday clock is ticking down on a Sunday expiration of surface transportation programs, and there’s nowhere those bells are tolling as loudly as back home in lawmakers’ districts...If Congress can’t come together on an extension by April 1, the federal government’s ability to collect and spend most of the federal gasoline tax money that fuels the nation’s transportation system will come to a screeching halt. The Highway Trust Fund -- the place where federal gas taxes are deposited -- will start incurring losses to the tune of $110 million each day the law is lapsed. That means states won’t be reimbursed for projects already under way, putting them in the uncomfortable position of trying to decide how long they can float the money before they have to shutter projects midstream. The uncertainty created will also mean states just won’t start new projects already planned." Kathryn Wolfe, Adam Snider, and Burgess Everett in Politico.
The Obama administration took steps to boost drilling. "With higher gasoline prices holding steady, the Obama administration on Wednesday took steps that could pave the way for oil and gas exploration off the coast of Alaska and in the Atlantic Ocean as it sought to combat criticism it is hostile to fossil-fuel development. The Department of Interior approved Royal Dutch Shell's plan for responding to oil spills in Alaska's Beaufort Sea, news the company called 'another major milestone' toward drilling there this summer. The agency also set 2013 as a target for allowing new seismic surveys off much of the East Coast. Energy companies use the survey data to evaluate oil and gas resources. Current data for the Atlantic are decades old. 'There is no silver bullet to high gas prices, but we must continue to reduce our reliance on foreign oil and reduce our vulnerability to the ups and downs of the international market,' Interior Secretary Ken Salazar said." Ryan Tracy in The Wall Street Journal.
@amaeryllis: Healthcare, I'm happy for you, and imma let you finish, BUT LIGHTBULB REGULATIONS ARE THE GREATEST ASSAULT ON OUR FREEDOM OF ALL TIME!!
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.