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Wonkbook: Perhaps there won’t be a shutdown, after all?

at 07:42 AM ET, 03/31/2011


On CBS's "Face the Nation" Sunday, Feb. 20, 2011, Paul Ryan, the top Republican budget writer, said it's unlikely the Senate will go along with steep cuts the House just passed. He said Republicans and Democrats will have to negotiate to avoid a government shutdown. (AP Photo/J. Scott Applewhite) (J. Scott Applewhite - AP)
I always think revisiting past predictions is good practice. Two days ago, Wonkbook led with me saying, “if I were a betting man...my money would be” on a shutdown. Today’s top story? “Democratic and Republican leaders are nearing a budget deal.” Shows what I know. The deal, at least as it’s being reported, has congressional leaders looking for $23 billion in cuts above the $10 billon included in the first two stopgaps. For those keeping track at home, that’ll leave us with $33 billion in cuts -- barely half as much as House Republicans have called for, but actually slightly more than the House Republican leadership originally proposed.

That brings up the question of the riders -- the policy-oriented amendments defunding Planned Parenthood and handicapping the EPA and so on. The way to think of an eventual agreement, a Republican aide told me, was to assume that the more cuts there were, the fewer riders there would need to be, and vice-versa. And you’re seeing some of that in this agreement. Paul Kane says that, “on Wednesday, the vice president indicated that such an agreement was at least a possibility, although he did not give details or say which riders Democrats might be willing to accept.” Remember that Sen. Chuck Schumer has ruled out riders on Planned Parenthood or the Environmental Protection Agency and Nancy Pelosi has ruled out riders trying to repeal or otherwise undermine the health-care law. But Boehner’s going to need to bring something significant back to his members lest they accuse him of folding.

Which leads to the remaining question: where do Boehner’s votes come from? A deal, after all, does not mean a law, and Boehner has lost important votes before. Conventional wisdom was that Republicans wouldn’t support a compromise on these terms, and reports have suggested Boehner will not back a plan that splits his members in half. But there’s no major third party in the House right now, so how is Boehner expecting to get a majority?

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Housekeeping: You’ll notice a slight change to Wonkbook today: the “Top Stories” has been replaced by an “Unnamed list” of five stories. Why five stories? Because people love lists of five. And lists in general. And Wonkbook wants to be loved. Also, marketable. But I couldn’t think of a name for the feature. “Top Five” is banal, and “The Wonkbook Five” sounds like they’re defendants in a really boring murder case. So I turn to you. If you’ve got any ideas for a name, e-mail me or leave a comment. Winner will credit in Wonkbook, of course, and the thanks of a grateful nation.

Unnamed list feature

1) Democratic and Republican leaders are nearing a budget deal, reports Paul Kane: “After weeks of arguing, Republicans and Democrats on Capitol Hill began negotiations Wednesday on a possible budget agreement that would slash federal spending by as much as $33 billion and avert a government shutdown. ‘We’re all working off the same number now,’ Vice President Biden told reporters after meeting with Senate Democratic leaders at the Capitol on Wednesday evening. ‘Obviously, there’s a difference in the composition of that number -- what’s included, what’s not included. It’s going to be a thorough negotiation.’ If approved, the deal would be the largest single-year budget cut in U.S. history... The two sides have already agreed on $10 billion in cuts; now, the House and Senate appropriations committees are searching for an additional $23 billion to extract from the budget.”

2) Obama has unveiled his new energy plan, reports Steven Mufson: “President Obama on Wednesday called for a one-third cut in oil imports by 2025, part of a plan he says will reduce U.S. dependence on foreign petroleum. With rising gasoline prices at home and political turmoil throughout the Middle East, Obama sought in a speech at Georgetown University to rally Americans -- and bickering lawmakers -- behind a program that draws equally from energy savings and increases in energy production. ‘We’ve been down this road before,’ Obama said, acknowledging that past presidents have made similar calls for greater energy independence. But, he added, ‘we can’t rush to action when gas prices are high and then hit the snooze button when prices are low again.’”

Note: Head down to Wonkbook’s energy section for a range of reactions to the proposal.

3) Nancy Pelosi has ruled out including anti-health care riders in a budget deal, reports Felicia Sonmez: “House Minority Leader Nancy Pelosi (D-Calif.) said Wednesday that any longer-term government funding bill that eventually gets signed into law by President Obama will not include any policy riders aimed at defunding the national health-care law. ‘Let’s put it this way: the health-care rider is not one that will be in any bill that will be sent to the president and that the president will sign...This bill will not be repealed,’ Pelosi said at an event touting Democrats’ health-care and student loan laws. Senate Democratic Majority Leader Harry Reid (D-Nev.) on Tuesday signaled some willingness to consider the controversial provisions known as policy riders included in the House-passed funding bill.”

4) GOP negotiations with Blue Dogs have backfired, reports Susan Crabtree: “Any attempt -- real or imagined -- by House Republican leaders to court enough Blue Dog Democrats to their side on the budget talks to avoid a government shutdown, may have backfired. Rep. Collin Peterson (D-MN), a founding member of the Blue Dogs, told TPM he didn’t think the talks were ‘all that effective’ because House Majority Whip Kevin McCarthy (R-CA) had ‘talked down to them’ during a recent meeting. Peterson was short on specifics but said McCarthy had definitely rubbed members of the fiscally conservative Democratic coalition the wrong way. Still, a significant number of Democrats carried an earlier stopgap spending bill across the finish line two weeks ago when 54 conservative Republicans voted against it.”

5) Shutdowns, defaults and assorted other pieces of evidence that our political system can no longer function will not be looked upon kindly by the market: “Asger Lau Andersen, David Dreyer Lassen and Lasse Holbøll Westh Nielsen — remember them? — have looked into how the market treats late budgets in the states — and late budgets in the states, it should be noted, are considerably less public and psychologically disruptive than a shutdown of the federal government during a weak economy. The answer is: not kindly (pdf). “We estimate that a budget delay of 30 days has a long run impact on the yield spread between 2 and 10 basis points,” they conclude. To put that in context, economists estimated that if the Federal Reserve pumped $400 billion into the economy, it’d lower yield spreads by about 20 basis points, or two-tenths of a percent. And it actually gets worse than that: ‘Markets also punish late budgets much more harshly if they occur during times of fiscal stress.’ I think it’d be fair to characterize this as a time of fiscal stress, don’t you?”

Country music interlude: Deer Tick plays “These Old Shoes” live.

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Still to come: Liberals want GE CEO Jeffrey Immelt out of the Obama administration; Tom Coburn his laying a trap for Grover Norquist; Alan Blinder sees four major dangers blocking a global recovery; VA attorney general Ken Cucinnelli thinks he’ll win his anti-health reform lawsuit; the House wants to revive a voucher program in DC; commentators react to Obama’s energy plan; and a puppy pushes a car.

Economy

Liberal activists are pushing GE CEO Jeffrey Immelt to resign from his advisory role in the administration, reports Perry Bacon: “Two liberal groups Wednesday called for General Electric Chief Executive Jeffrey Immelt to step down as the head of the White House’s Council on Jobs and Competitiveness following a report that GE paid no federal taxes last year despite more than $14 billion in profits. ‘One of the chief ways GE avoids paying taxes is by shifting a large portion of its profits overseas, and jobs follow. Now GE’s CEO is the person charged with helping the President create jobs here in America. That’s just perverse,’ the groups MoveOn.org and Progressives United told supporters in an e-mail message. President Obama tapped Immelt to head the council in January.”

Tom Coburn has a plan to take on Grover Norquist, writes Jon Chait: “To Norquist, eliminating a tax loophole is just as bad as raising rates. So he opposes any attempt to increase revenue through the elimination of loopholes, however unworthy those loopholes may be. Norquist and Coburn have been circling each other for months, trading barbs in the media. Now Coburn is using a test case to expose Norquist’s Pledge. That test case is the ethanol subsidy, which is pork that survives due to the strength of the agriculture lobby, but which the conservative movement at least putatively opposes. The ethanol subsidy, like many subsidies, comes in the form of a tax break. Eliminating it is, therefore, a tax increase. Therefore, eliminating the ethanol subsidy, without using the revenue for a tax cut, would violate the Pledge. In other words, Coburn has set a trap for Norquist. He has proposed eliminating the ethanol subsidy. If Norquist supports it, he has to alter his pledge to allow for closing loopholes that raise revenue. If he opposes it, he has to admit that he opposes closing loopholes that even Norquist admits are unsupportable. Norquist’s response? He opposes closing the loophole”

Elizabeth Warren defended the consumer protection bureau before the Chamber of Commerce, reports Brady Dennis: “In her perpetual campaign to win over the many opponents of the new Consumer Financial Protection Bureau, Elizabeth Warren has crisscrossed both the capital and the country for months, meeting with bankers and business owners and lawmakers. On Tuesday, that quest took her only several blocks to the headquarters of one of the agency’s most ardent critics, the U.S. Chamber of Commerce, which spent millions of dollars and countless hours trying to prevent the creation of the consumer bureau last year. Warren, the Harvard law professor appointed to stand up for the new watchdog, joked that her visit had been likened to Daniel in the lion’s den or President John F. Kennedy speaking to Protestant ministers.”

The government safety net will continue to function if the government shuts down, reports Arthur Delaney: “Social Security recipients will still see receive their benefits even if the federal government switches off next month, said Cristina Martin Firvida, a lobbyist for the AARP... Current Medicare beneficiaries also should not be affected by a short shutdown, said AARP’s Mary Liz Burns... A similar situation would likely occur with unemployment insurance benefits...Elizabeth Lower-Basch, a senior analyst with the Center for Law and Social Policy, said other programs administered at the state level, including Temporary Assistance for Needy Families (formerly known as welfare) and the Supplemental Nutrition Assistance Program (food stamps), should continue as well.”

The economic recovery faces four obstacles, writes Alan Blinder: “If you’re searching for a metaphor for the U.S. economy right now, think of an athlete who is recovering from serious injuries and must navigate a difficult obstacle course. She’s getting into better shape but there are hazards along the way that might keep her from reaching the finish line. Here’s my list of the four biggest obstacles to recovery right now--in ascending order of seriousness. The Japanese disaster: Many people view the physical and human tragedy now afflicting Japan as a serious threat to global recovery. Based on what’s known so far, I don’t...The European sovereign debt crisis: This one is starting to look like a hardy perennial... The U.S. budget deficit: The unedifying and sometimes irrational political wrangling over our own budget deficit is more worrisome... The oil market: This is the most worrying.”

The SEC has issued a new rule regulating executive pay, reports David Gilzenrath: “The five members of the Securities and Exchange Commission gave their preliminary endorsement Wednesday to a proposal that would ostensibly require executive pay to be set by independent members of corporate boards. But the SEC proposed leaving details to another group of rulemakers, the stock exchanges. The SEC also proposed letting the exchanges carve out major exceptions to whatever independence standards they adopt.”

Tax deferral is dead, writes Matt Miller: http://wapo.st/gYFJqp

Obama should show more resolve in the budget battle, writes EJ Dionne: “Someone should introduce the Barack Obama who addressed the nation Monday on Libya to the Barack Obama who has been dancing around the edge of the budget fight. In his Libya speech, Obama was clear, forceful and principled. Yes, there were some ambiguities but these were dictated by a genuinely uncertain situation on the ground, not by muddled thinking. The president made the case for a foreign policy rooted in morality yet also alive to the difficulties of acting wisely in an imperfect world that does not bend easily to one man’s or one country’s will. On the budget, by contrast, it’s hard to know what the president’s bottom line is, what deals he would regard as reasonable or when he will even join the fray.”

Adorable animals powering transportation interlude: A dog-pushed car.

Health Care

VA attorney general Ken Cuccinelli handicaps his chances of persuading the Supreme Court to overturn health-care reform: “I am cautiously optimistic. I’d say, above 50 percent, no higher than 60 percent, because the nature of constitutional cases is very unpredictable. A lot of people presume the government will win, because it usually does, but there have been four major Commerce Clause cases and the court ruled in favor of the limited-government side in two of the four, so it isn’t as if we always lose and that is within the past 16 years.”

The Senate could fast-track 1099 repeal: http://politi.co/fVExJ6

Tea Party legislators are finding success in blocking health-reform’s implementation at a state level, reports Sarah Kliff: “Despite their best efforts, tea party activists could not stop Congress from passing health reform last year. Now, they’re finding surprising success doing the next best thing: blocking the law’s implementation. In South Carolina, tea party activists have been picking off Republican co-sponsors of a health exchange bill, getting even the committee chairman who would oversee the bill to turn against it. A Montana legislator who ran on a tea party platform has successfully blocked multiple health exchange bills, persuading his colleagues to instead move forward with legislation that would specifically bar the state from setting up a marketplace.”

Domestic Policy

The House has revived a DC school voucher program, reports Ben Pershing: “The House approved a bill Wednesday to revive the D.C. Opportunity Scholarship Program, even as the controversial school-choice measure faces an uncertain future. Under the program, which began in 2004, low-income D.C. students are given federal money to help pay for private school tuition. Democrats closed the program to new entrants in 2009. House Speaker John A. Boehner’s bill -- known as the SOAR Act -- would reopen it, offering $20 million annually for five years for new scholarships, along with another $20 million apiece for D.C. charter schools and traditional D.C. public schools. Boehner’s bill passed the House on a 225 to 195 vote, with all but nine Republicans present voting in favor and all but one Democrat opposed.”

A bill would cut the number of Senate confirmable appointments: http://wapo.st/hT3cmE

The House GOP is taking on the AARP, reports Dan Eggen: “House Republicans, who are continuing their efforts to chip away at President Obama’s health-care law, have now set their sights on a powerful group that strongly supported the legislation: the AARP seniors lobby. Two GOP members of the House Ways and Means Committee released a report Wednesday alleging that the nation’s largest seniors group stands to gain financially from the Affordable Care Act, because the law could result in greater demand for supplemental Medicare policies that carry the AARP stamp of approval. In addition, the Ways and Means health and oversight subcommittees have scheduled a joint hearing Friday to grill AARP officials about the organization’s financial ventures.”

Obama has threatened to veto an anti-union aviation bill: http://bit.ly/ho0OjV

Gun control legislation enacted after Reagan’s shooting saved lives, writes Sarah Brady: “It took seven years and an immeasurable number of hours of talking, walking and testifying for Congress to pass the Brady Handgun Violence Prevention Act. President Bill Clinton cradled and carried our cause in his heart all the way to the signing ceremony. The legislation requires federally licensed gun dealers to perform background checks on purchasers. Since enactment, 2 million gun purchases have been denied to people too dangerous and irresponsible to possess firearms. We’ll never know how many lives have been saved. It’s hard to believe that despite this success, some conservatives who claim to revere Ronald Reagan still reject the common-sense gun reforms he backed.”

Adorable children being talented interlude: 10-year-old Connie Talbot covers Adele’s “Something Like You”.

Energy

The energy plan’s focus on “security” is a bad sign, writes Ezra Klein: “Energy security is shorthand for ‘oil we drill here’ as opposed to ‘oil that gets shipped here.’ So the first part of the plan is all about expanding domestic production of some of the very fuel we need to be weaning ourselves off of. The truth is that the Obama administration’s energy policy looks more like Sarah Palin’s applause lines than the cap-and-trade program it advocated during the election. That’s not because the White House wouldn’t prefer the plan it pushed in 2008 to the plan it’s pushing in 2011. Congress, not the administration, opposes to cap-and-trade. But we are where we are, and there’s no use dressing it up. You can put lipstick on ‘drill, baby, drill,’ but it’s still ‘drill, baby, drill.’”

The plan is unambitious, writes David Roberts: http://bit.ly/iddWRU

There’s nothing wrong with imported oil, writes Daniel Griswold: “We Americans benefit tremendously from our relatively free trade in petroleum products. Like all forms of trade, the importation of oil produced abroad allows us to acquire it at a price far lower than we would pay if we had to rely more heavily on domestic oil supplies. The money we save buying oil more cheaply on global markets allows our whole economy to operate more efficiently. Oil is the ultimate upstream input that virtually all U.S. producers use to make their final products, either in the product itself or for shipping. If U.S. manufacturers and other sectors are forced to pay sharply higher prices for petroleum products because of import restrictions, their final goods will cost more and will be less competitive in global markets.”

Obama’s speech should have called the GOP to task, writes Joseph Romm: http://bit.ly/g5y0U7

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

 
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