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Wonkbook: Ryan's Medicare plan finished?

By Ezra Klein,

Joshua Roberts BLOOMBERG It seems increasingly clear that though Medicare is on the table -- Nancy Pelosi said as much yesterday -- the privatization and voucherization plan that passed through the House is not. No major Republican presidential candidates have endorsed it -- and Newt Gingrich actually came out against it -- the Senate GOP left it out of their budget, Boehner said he's "not wedded" to it, and when Paul Ryan, the plan's creator, delivered a defense of his budget in Chicago yesterday, he spent almost no time at all explaining or defending the Medicare portion. To say he glossed over it would be an understatement. He rushed past it, like a man hastily greeting his ex on his way out of a party.

That's good news for those who dislike Ryan's plan. But it means we've wasted the last few months arguing over a plan that isn't going to happen. Worse, as of yesterday, we've actually hit the debt ceiling, meaning that we can't dither on a deal for much longer, as the countdown to an actual financial disaster has begun. So we need some sort of agreement between the two parties, and soon. But the two parties don't even seem close to that. And much more time has been spent talking about policies that everyone knows -- and knew -- won't be part of a deal than policies that will.

Five in the morning

1) Republicans' Medicare split is widening, report Naftali Bendavid and Jonathan Weisman: "Newt Gingrich's dismissal of the House Republican plan to overhaul Medicare provoked a rebuttal from the proposal's author, Rep. Paul Ryan, highlighting a split in the party over how hard to push a priority for the House GOP majority. On Monday, Mr. Ryan (R., Wis.), hit back at Mr. Gingrich's comments. 'With allies like that, who needs the left?' Mr. Ryan said on the Laura Ingraham Show, a radio program...A Democratic candidate in a special House election in New York is making a strong showing in a Republican district in part by attacking the Medicare plan. House GOP freshman are asking President Barack Obama to intervene and defuse the tone on Medicare. When a group of Senate Republicans introduced their budget plan last week, they pointedly omitted the House GOP Medicare changes."

2) Paul Ryan gave a speech in Chicago defending his Medicare plan, reports Philip Rucker: "The architect of the GOP’s controversial Medicare overhaul delivered a forceful defense of the plan here Monday, saying it would empower seniors and accusing President Obama of having a 'shared-scarcity mentality' that promotes 'bureaucratically rationed health care.' Facing a backlash from voters over his proposal to turn Medicare into a system that subsidizes health-care coverage for retirees on the private market, House Budget Chairman Paul Ryan (Wis.) moved to recast the plan as the only one that would make the economy grow...Ryan reiterated recent comments by House Speaker John A. Boehner (Ohio) that Republicans would support an increase in the debt limit only if spending were reduced by more than that amount."

Read Paul Ryan's speech defending his budget: http://bit.ly/lUg8bL

3) Nancy Pelosi is open to including Medicare in debt talks, reports Felicia Sonmez: "House Minority Leader Nancy Pelosi (D-Calif.) said Monday that House Democrats are open to including reforms of entitlement programs such as Medicare in the ongoing talks on a deficit-reduction plan, although they remain opposed to the sweeping changes in House Republicans’ 2012 budget blueprint. 'When we’re talking about Medicare, we are open to many [changes],' Pelosi said in an interview with Bloomberg Television’s Peter Cook. 'We are listening to every suggestion. But one suggestion we are not open to is the abolishment of Medicare. That is what the Republicans have put forth in their budget. We do not support that.' Pelosi added that while 'abolishing Medicare is not on the table, considering some changes to funding and the rest, that is a different story.'"

4) No debt talk progress was made on debt limit day, report Jackie Calmes and Carl Hulse: "The Treasury secretary, Timothy F. Geithner, officially informed Congress on Monday that the government, as projected, had reached its $14.3 trillion debt limit and had begun taking what he has called 'extraordinary measures' to meet obligations while lawmakers and President Obama seek a budget deal to raise the limit...With the House in recess all week, few members of Congress were even in town, and budget talks between Vice President Joseph R. Biden Jr. and Congressional leaders were suspended. But a bipartisan 'Gang of Six' continued negotiating toward a long-term debt-reduction compromise in what could be their make-or-break week."

5) The last budget deal ended up increasing spending, reports Brian Beutler: "It turns out the six-month spending bill Congress passed in April increased discretionary outlays through the remainder of the fiscal year by a bit over $3 billion. In other words, total direct spending will be higher by the end of September than if Congress had just set spending on autopilot for the remainder of the fiscal year back in April. 'Total discretionary outlays in 2011 will be $3.2 billion higher as a result of the legislation, CBO estimates--an increase of $7.5 billion for defense programs, partially offset by a net reduction of $4.4 billion in other spending,' reads a just-released report from the Congressional Budget Office -- Congress' non-partisan scorekeeper."

Brit-pop interlude: Fanfarlo's video for "The Walls Are Coming Down".

Got tips, additions, or comments? E-mail me.

Still to come: The U.S. needs $2 trillion in new infrastructure spending; the four words that screw up the currency debate; the case for aboishing the debt ceiling; cutting federal pensions could make government recruitment harder; the administration is backing down on a new emissions rule; and an owl and cat befriend each other.

Economy

The US needs $2 trillion in new infrastructure spending, according to a new study, reports Ashley Halsey: "The United States is falling dramatically behind much of the world in rebuilding and expanding an overloaded and deteriorating transportation network it needs to remain competitive in the global marketplace, according to a new study by the Urban Land Institute. Burdened with soaring deficits and with long-term transportation plans stalled in Congress, the United States has fallen behind three emerging economic competitors -- Brazil, China and India, the institute said. The report envisions a time when, like Detroit, U.S. cities may opt to abandon services in some districts and when lightly used blacktopped rural roads would be allowed to return to nature. Eventually, the report says, the federal gas tax will be increased...and private, profit-seeking companies will play a much larger role in funding and maintaining public projects."

Mitch McConnell and the White House are sparring over trade deals, reports Felicia Sonmez: "Senate Minority Leader Mitch McConnell (R-Ky.) blasted the Obama administration Monday after the White House announced that it will not move forward on three key trade deals unless Congress agrees to move forward on extending a program for workers whose jobs were displaced because of outsourcing...The White House’s move on Monday represented the latest in the back-and-forth between both parties over the three long-stalled trade deals with South Korea, Panama and Colombia. U.S. Trade Representative Ron Kirk and other White House officials announced in a conference call with reporters Monday morning that the administration would not allow the three trade pacts to progress unless lawmakers worked out a deal on the Trade Adjustment Assistance program."

Ben Bernanke wants the US to preserve its R&D spending, reports Luca di Leo: "Federal Reserve Chairman Ben Bernanke made the case for public research funding, saying government spending on research and development can help boost economic growth. 'The primary economic rationale for a government role in R&D is that, absent such intervention, the private market would not adequately supply certain types of research,' the Fed chief said at a Georgetown University conference Monday. But he added that, given current budget constraints, the U.S. needs to weigh its decisions cautiously...While the U.S. struggles to contain the deficit, President Barack Obama has been making the case for more government spending in research and innovation to boost growth. Mr. Obama wants to invest more in clean energy and information technology, as well as biomedical research."

A "strong dollar" isn't always a good thing, writes Ezra Klein: "In practice, a strong dollar makes foreign goods cheaper and domestically produced goods more expensive. That’s a boon for American consumers, American travelers and countries that export to America...A weak dollar, meanwhile, makes American-made goods cheaper on the world market and foreign-produced goods -- including commodities, like oil -- more expensive. That’s a boon for American manufacturers and people in other countries who want to buy American goods or come visit the country. The very crude way to put it is that, in the short term, a stronger dollar is good for buying stuff and a weaker dollar is good for making stuff. What a temporarily weak dollar is particularly good for, however, is recovering from a deep recession.

The debt ceiling should be abolished, writes Annie Lowrey: "The debt ceiling is a historical relic, the budgetary equivalent of the appendix. Before 1917, Congress needed to approve each and every debt issuance. But when World War I hit, the legislature decided to make the process easier, setting an overall debt limit and letting Treasury issue as many bonds as it needed to stay within it. A century ago, the ceiling made more sense. The government was smaller, with discretionary spending a bigger portion of the federal budget. Having the additional check helped to keep appropriations under control. But now, the debt ceiling does little to encourage smarter budgeting. Most of the country's debt stems from spiraling mandatory spending on programs like Medicaid, Medicare, and Social Security anyway. Yet, in the past decade or two, the ceiling has transformed from useless political relic to handy political football: Whenever the country comes close to hitting the limit, the opposition party—whether Republican or Democratic—seizes the opportunity to thwack the other side and refuses to vote to lift it."

We know what to do to solve the deficit, the problem is doing it, write Alan Simpson, Erskine Bowles, Pete Domenici, and Alice Rivlin: "A credible plan must address the growth of entitlement spending caused by our aging population and unsustainable growth in health care costs. We can make Social Security financially sound for future generations through a combination of modest benefit changes and additional revenues. Negotiators should take the best cost-control ideas from both parties, including delivery system reforms, increases in beneficiary responsibility, reductions of excess payments to providers and pharmaceutical companies, greater flexibility for states in administering Medicaid and reforms to the medical malpractice system. They should also consider reforms that bring market competition into Medicare and examine the current tax exclusion for employer-sponsored health insurance."

Adorable animals being adorable together interlude: An owl and cat hang out.

Health Care

State-level conservatives are split on implementing insurance exchanges, reports Guy Gugliotta: "Insurance exchanges, enabling individuals and small businesses to shop for medical coverage in much the same way that travelers troll the Web looking for bargain airfares, are a cornerstone of last year’s federal health-care law...The law describes in some detail how the exchanges are to be set up, but leaves states considerable leeway in how to structure them. States must have their plans ready by 2013 so the exchanges can begin operation on Jan. 1, 2014. If states do not have their own plans, the federal government will set one up for them... Business groups want an exchange to avoid the federally imposed plan. The legislative leadership is sympathetic to this view, but worries that conservatives will gin up so much grass-roots opposition that the GOP will lose its majorities next year."

Domestic Policy

Cutting federal pensions could keep people from entering the civil service, report Steve Vogel and Ed O'Keefe: "A proposal to significantly increase payroll deductions of federal workers to contribute to the federal pension fund may make public service less attractive and possibly hasten an exodus among current workers eligible for retirement, some observers and workers said Monday...'This just piles on to the demoralization that folks in the federal workplace feel,' said Dan Adcock, legislative director for National Active and Retired Federal Employee Association. News of growing support for the plan -- long endorsed by Republicans and President Obama’s bispartisan fiscal commission -- follows a two-year pay freeze in place since January, a slowdown of hiring in many agencies and an increase in negative comments about the public workforce in Congress and on the airwaves."

The man behind Citizens United is just getting started, reports Stephanie Mencimer: "Citizens United was the culmination of years of work by Bopp to chip away at the nation's campaign-finance regulations, often via obscure cases no one expected him to win. But Bopp's not done--not by a long stretch. Today, the 63-year-old lawyer is pursuing challenges to dismantle practically every facet of campaign-finance regulation. Taken individually, many of those cases look just as preposterous and doomed as Citizens United did in 2008. But laugh at your peril...Reformers see Bopp as using his clients--often small, mission-driven organizations--to widen loopholes in the law that end up benefiting wealthy corporations and their political allies.

Bush's Education Secretary is the Chamber of Commerce's head No Child Left Behind lobbyist, reports Abby Phillip: "Margaret Spellings, an architect of the No Child Left Behind Act during the Bush administration, is now pushing for the landmark education law’s renewal on behalf of the U.S. Chamber of Commerce. Rather than retreating from some of the law’s more controversial provisions, Spellings and the Chamber want to strengthen them. All schools, not just the lowest-performing, should meet tough federal standards...Spellings’s efforts put the Chamber in an unusual position for a group that prides itself on crusading for a less-instrusive government. It also places the Chamber at odds with the White House and many lawmakers in both parties, who agree the law should be renewed but advocate greater state control and want punitive measures for schools significantly scaled back."

It's worth reconsidering letting courts strike down laws, writes Dahlia Lithwick: "In an article he wrote in 2006 for the Yale Law Journal, [Jeremy] Waldron argued that judges should not be allowed to have the authority to strike down legislation, period. He urged his readers to bracket their feelings about the outcomes in specific cases and think instead about institutions whose job it is to protect individual rights. Allowing judges to have the last word on the constitutionality of gay marriage, abortion, or capital punishment, he wrote, is fundamentally undemocratic. In countries that do not permit judicial review, the citizens themselves are allowed to decide whether such laws are permissible...Judicial review, he wrote, undermines democratic values 'by privileging majority voting among a small number of unelected and unaccountable judges.'"

Adorable children kicking back interlude: A baby enjoys a leisurely lunch.

Energy

The Obama administration is delaying a new boiler emissions rule, report Stephen Power and Tennille Tracy: "The Obama administration suspended a new regulation aimed at cutting pollution from boilers at oil refineries, chemical plants and other factories, amid complaints by a range of industries over the potential cost...The boiler rule is the latest in a series of EPA regulations the administration has scaled back or delayed amid criticism that jobs would be threatened...It is unclear when the agency will put the proposal into effect. The rule would have required companies with so-called major boilers to comply by 2014. The EPA says now it will freeze the rule until related lawsuits are resolved or until the agency finishes its review, 'whichever is earlier,' said EPA spokeswoman Enesta Jones."

Environmentalists are pushing for natural gas-fueled 18-wheelers, reports Jeffrey Ball: "An 18-wheeler can burn as much fuel in a year as 40 cars. What if it burned domestic natural gas instead of imported oil?...A growing chorus of fans, including President Obama, says natural gas might deliver more bang for the buck--and they want taxpayers to spend billions of dollars to subsidize the shift. The typical semi-trailer truck guzzles 20,000 gallons of diesel annually and uses the same roads day after day. So switching trucks to natural gas from diesel, which comes from oil, could make a big dent in U.S. petroleum use. And it wouldn't require building nearly as many new fueling stations as switching America's roughly 240 million cars and light trucks to something other than oil."

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

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