The Supreme Court is expected to rule on the health care law sometime this week, and perhaps even today. So for today’s Wonkbook lead, I’m turning the mic over to Sarah Kliff, who will tell you everything you could possibly need to know about this week’s decision, and what it might mean for health reform.
Remind me what, exactly, will the Supreme Court be deciding?
The Supreme Court is weighing four separate constitutional challenges to the Affordable Care Act. The one they spent the most time debating at oral arguments was the individual mandate, which requires nearly all Americans to purchase health insurance. The Supreme Court justices will have to decide whether the Commerce Clause – which gives Congress the power to regulate interstate commerce – creates the authority to enact such a requirement.
There are also three other issues that the Justices have to decide on (which you can read about in more detail here). They have to decide whether they can even rule on the substance of the case, since the provisions being challenged haven’t come into effect yet. They need to decide whether, if the individual mandate falls, it can be severed from the rest of the law, or takes down other provisions with it. And they must decide whether the law’s Medicaid expansion – which has the program cover everyone below 133 percent of the Federal Poverty Line – is constitutional. States challenging it have said it is unconstitutional, as it puts an undue burden on the states.
What are the different ways that the Supreme Court could rule?
Because of the many issues the Court is weighing, there’s no simple list of possible outcomes. The court could uphold or overturn the law in full. Or, it could do something in-between, striking down specific provisions while leaving others intact. Which parts go down and which ones stand is completely within the justices’ discretion. That unpredictability explains why, across town, advocacy groups are writing as many as eight press releases that react to all the possible rulings.
While we don’t know how the Court will rule, certain outcomes do seem more likely than others. Both experts and the general public have become increasingly convinced that the Supreme Court will strike down the individual mandate. In one poll of 56 former Supreme Court clerks, the number who thought it would go down jumped by 22 percent before and after oral arguments. InTrade puts the odds at 79.9 percent.
What about the rest of the law? What happens if the individual mandate gets struck down?
A lot of this depends on whether the Supreme Court justices decide the individual mandate is severable from the rest of the law – that is, whether the rest of the Affordable Care Act can stand with this provision being struck down. In Justice Ruth Bader Ginsburg’s vivid phrase, “may the mandate be chopped, like a head of broccoli, from the rest of it?”
Most observers doubt the Court will want to take the step of invalidating the whole law even if they do rule against the individual mandate. But nobody really knows. If the mandate is severed but the rest of the law stands, the Affordable Care Act will still be a major health insurance expansion. The Medicaid expansion, to cover everyone under 133 percent of the Federal Poverty Line, would be the largest expansion of public health insurance coverage since 1965, the year that Medicaid and Medicare were created.
The Affordable Care Act has a number of provisions that have nothing to do with expanding health insurance at all. They include changes to how Medicare doctors get reimbursed, which look to move the health care system to one that pays for quality, rather than quantity. Big investments have been made in prevention and public health, which could continue, as could the insurance reforms that the Obama administration often touts. Those are things like allowing young adults up to age 26 to enroll on their parents’ coverage and not allowing insurers to charge co-pays for preventive care.
Let’s say the individual mandate goes down but the rest of the law stands. What happens?
The whole point of the individual mandate is to encourage everyone to purchase coverage, even the healthy people who don’t think they need it. That helps create what actuaries call a “balanced risk pool” where the healthy people, and their low medical costs, offset the high medical costs of sick people and help make insurance affordable.
Without a requirement to purchase coverage, health care economists roundly expect fewer people to buy it. The number of people who gain insurance through the Affordable Care Act would shrink. Health insurance, meanwhile, would become more expensive, although there’s a lot of debate about how much more it would cost. Economic modeling has estimated premiums would go up anywhere between 2 and 40 percent.
Can the Affordable Care Act’s insurance expansion work without the individual mandate?
This is a subject of huge debate among health policy experts. Some argue it cannot: Without a requirement to buy insurance, the market would go into a “death spiral,” with only the sick buying insurance and premiums becoming prohibitively expensive. This is what happened in a handful of states in the 1990s, like Washington, that tried to end pre-existing conditions without an individual mandate.
Others, however, say those states don’t make a very good analogy for the Affordable Care Act. The federal law will subsidize coverage for everyone under 400 percent of the Federal Poverty Line; the states did not. Those subsidies, they argue, will make health insurance affordable and encourage healthy individuals to enroll.
Could the individual mandate be replaced?
Yes: The Government Accountability Office has come up with nine policies that could encourage individuals to enroll in insurance coverage. Their list – which you can read here – includes ideas such as an open enrollment period, where individuals could only sign up for coverage at a certain point in the year, and more extensive outreach programs to make individuals aware of their options.
The difficulty is mostly political: congressional Republicans are unlikely to permit the Obama administration to repair the Affordable Care Act. But it might not be up to them. If the mandate is overturned but the rest of the law stands, many states might go looking for policy solutions to stabilize the health-care markets that they set up under the Affordable Care Act but that are now missing the steadying influence of the mandate.
When will the Supreme Court rule?
The Supreme Court is expected to finish its term by the end of June, meaning we should know by Friday.
Justices release opinions on weekdays at 10 a.m. Right now, they’re only scheduled to release opinions on Monday morning, but with nine cases still left on the docket – including both the health challenge, and a case of Arizona’s contentious immigration law – observers expect them to add additional days, likely Wednesday and Thursday.
SCOTUSBlog has done an excellent job liveblogging the release of opinions, which you can follow here.
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RCP Obama vs. Romney: Obama +2.5%; 7-day change: Obama +1.8%.
RCP Obama approval: 48.5%; 7-day change: +1.2%.
Top story: Waiting on the (healthcare) world to change
This week will top off what’s been a pretty rough year for the Obama administration at the Supreme Court. “The Supreme Court this week will conclude its term by handing down much-anticipated rulings on health care and immigration, President Obama’s remaining priorities before the justices. It is a finale that cannot come quickly enough for the administration, which has had a long year at the high court.” Robert Barnes in The Washington Post.
Congressional Democrats and the White House did not take the legal challenge to the law seriously. “Congress held no hearing on the plan’s constitutionality until nearly a year after it was signed into law. Representative Nancy Pelosi, then the House speaker, scoffed when a reporter asked what part of the Constitution empowered Congress to force Americans to buy health insurance. ‘Are you serious?’ she asked with disdain. ‘Are you serious?’ Opponents of the health plan were indeed serious, and so was the Supreme Court, which devoted more time to hearing the case than to any other in decades. A White House that had assumed any challenge would fail now fears that a centerpiece of Mr. Obama’s presidency may be partly or completely overturned on a theory that it gave little credence. The miscalculation left the administration on the defensive as its legal strategy evolved over the last two years.” Peter Baker in The New York Times.
Most legal scholars think the mandate is constitutional, but few are confident it will be upheld. ”The U.S. Supreme Court should uphold a law requiring most Americans to have health insurance if the justices follow legal precedent, according to 19 of 21 constitutional law professors who ventured an opinion on the most-anticipated ruling in years. Only eight of them predicted the court would do so…Five of the 21 professors who responded, including Whitman, said the court is likely to strike down the coverage requirement. Underscoring the high stakes and complexity of the debate, eight described the outcome as a toss-up..” Bob Drummond in Bloomberg.
How the Republican Party, and the Supreme Court, got to this week. On March 23, 2010, the day that President Obama signed the Affordable Care Act into law, fourteen state attorneys general filed suit against the law’s requirement that most Americans purchase health insurance, on the ground that it was unconstitutional. It was hard to find a law professor in the country who took them seriously. ‘The argument about constitutionality is, if not frivolous, close to it,’ Sanford Levinson, a University of Texas law-school professor, told the McClatchy newspapers. Erwin Chemerinsky, the dean of the law school at the University of California at Irvine, told the Times, ‘There is no case law, post 1937, that would support an individual’s right not to buy health care if the government wants to mandate it.’ Orin Kerr, a George Washington University professor who had clerked for Justice Anthony Kennedy, said, ‘There is a less than one-per-cent chance that the courts will invalidate the individual mandate.’ Today, as the Supreme Court prepares to hand down its decision on the law, Kerr puts the chance that it will overturn the mandate—almost certainly on a party-line vote—at closer to ‘fifty-fifty.’ The Republicans have made the individual mandate the element most likely to undo the President’s health-care law. The irony is that the Democrats adopted it in the first place because they thought that it would help them secure conservative support. It had, after all, been at the heart of Republican health-care reforms for two decades.” Ezra Klein in the New Yorker.
HHS has spent $2.7 billion on the healthcare law since oral arguments. ”The administration has forged ahead, spending at least $2.7 billion since oral arguments in the case ended on March 28. That’s more than double the amount that was handed out in the three-month period leading up to the arguments, according to a POLITICO review of funding announcements from the Department of Health and Human Services. While much — if not all — of this funding was in the pipeline well before March, the timeline for handing out specific funds is not set in stone, which gives the agency leeway over the kinds of dollars it has been handing out. And the stakes have increased as the date of a Supreme Court ruling approaches, because money that is spent most likely won’t have to be repaid. But remaining funds will dry up if the court strikes down the law. The court is expected to announce its decision this week.” J. Lester Feder, Kathryn Smith, and Kyle Cheney in Politico.
Why the SCOTUS leaks less than the CIA. ”Why is the Court so much better at stopping leaks than the government agencies entrusted with the country’s most critical secrets? One answer is that the Supreme Court has fewer secrets than the executive branch and fewer people who know about each one. Only 70 or so people inside the Court–the justices, their clerks and senior staff, and a few Court employees–would be privy to the outcome of the health care case prior to its announcement…Because a Supreme Court term begins in October and ends by July, secrets about the Court’s decisions last at most nine months, and usually (as with the health care case) a much shorter period. Such short-fuse secrets are relatively easy to keep…Law clerks also have a personal incentive to keep quiet. After one year at the Court, clerks can fetch hundreds of thousands of dollars in signing bonuses from law firms and are all but guaranteed successful careers. Leaking the Court’s decisions is one of the few ways to screw up these prospects.” Jack Goldsmith in The New Republic.
If Obamacare is overturned people with pre-existing conditions may be on their own again. ”Sarah Lewis is fed up with American health care: ‘I’ve completely removed myself from the system,’ she said. ‘I don’t want to be a patient anymore.’ Lewis, a 55-year-old single mother of two daughters, has been through the wringer. It started with a diagnosis of anal cancer in September 2010. Then came the denials from her insurance company, the fights with the insurer, the hospitals and the doctors over money, and the debt collectors chasing at least $20,000 that she owes. Not to mention the grueling chemotherapy and radiation therapy that, so far, have saved her life. She ultimately gave up on health insurance this year…The system will likely fail Americans like Lewis again and again, if the Supreme Court overturns President Barack Obama’s health care reform law next week.” Jeffrey Young in The Huffington Post.
A tale of eight press releases. “Families USA Executive Director Ron Pollack does not know how the Supreme Court will rule on the Affordable Care Act, or even when the decision will be made. This is what he does know: His group has a news release ready for it. For weeks now, his pro-health-law nonprofit has had seven separate statements, reacting to the various ways the Supreme Court might rule. There’s one for if the whole law gets upheld, and another for a situation where it is all taken down. One for where just the individual mandate falls, and a completely separate statement should the end to preexisting conditions go with it. Pollack got worried Wednesday that all that preparation might not be enough. So he drafted an eighth statement, reacting to yet another possible combination of decisions…The court’s decision may not be a yes-or-no verdict. Many observers expect it to fall somewhere in between, with some parts of the law upheld and others tossed out.” Sarah Kliff in The Washington Post.
@sarahkliff: I just met you, and this is crazy, but I really want a health care ruling. Tomorrow, maybe? #sorry
@nycsouthpaw: I’m sorta hoping SCOTUS comes out tomorrow and says certiorari was improvidently granted and everyone’s heads just explode.
How health insurance changes people’s lives. “In a continuing study, an all-star group of researchers following Ms. Parris and tens of thousands of other Oregonians has found that gaining insurance makes people feel healthier, happier and more financially stable. The insured also spend more on health care, dashing some hopes of preventive-medicine advocates who have argued that coverage can save money — by keeping people out of emergency rooms, for instance. In Oregon, the newly insured spent an average of $778 a year, or 25 percent, more on health care than those who did not win insurance…The newly insured were more likely to describe their health as good, and to say that their health was getting better, according to self-reported data that researchers are now combining with objective measurements for a deeper follow-up study. The uninsured reported being in worse physical and mental shape and were less likely to describe themselves as happy.” Annie Lowrey in The New York Times.
@petersuderman: Honestly, I’m more worried about an asparagus mandate.
The Court could uphold Obamacare as a tax. “Lurking in the background is a way to decide the case on tax law grounds. No one can be prosecuted, punished or fined for violating the mandate. In fact, the word ‘mandate’ does not appear in the law. In ‘practical operation,’ the administration argued, it’s just a tax law. If the mandate is really just a tax, that would be supported by the Constitution, which says Congress ‘shall have the power to lay and collect taxes … to provide for the common defense and general welfare.’ So, in the end, the justices could agree the law’s required tax payments are constitutional, while also making clear the government does not have broad power to mandate purchases. Late last year, Judge Brett Kavanaugh of the U.S. Court of Appeals in Washington, an influential appointee of President George W. Bush and a friend of the chief justice, wrote an opinion arguing for treating the mandate as a tax law, not a regulation of commerce.” David Savage in Los Angles Times.
@CitizenCohn: One possibility: 4 justices uphold law on commerce/necessary&proper/taxes, 1 or 2 conservatives vote to uphold as tax.
Aetna’s CEO thinks the deficit matters more than the Supreme Court’s decision. “Mark Bertolini has a pretty busy day job: As Aetna’s chief executive, he manages one of the country’s top five health insurance plans…Bertolini has started spending some evening hours working with the Gang of Six, the bipartisan group of six senators that tried (and failed) to push a major deficit reduction plan through Congress. He has come away from the bull sessions thinking the Supreme Court verdict on the Affordable Care Act does not matter much for the future of health care — or for his business. With our without the health law, he sees a country staring down a deficit driven by health-care cost growth — and a pressure on private industry to turn that around. ‘The Supreme Court ruling does not matter for our business strategy,’ Bertolini says. ‘It’s a political event. Whether or not the Supreme Court impacts the Affordable Care Act in some way, we still have to keep moving forward to impact the cost of care in America.’” Sarah Kliff in The Washington Post.
TURLEY: The fate of healthcare shouldn’t come down to nine justices. Try nineteen. “How many people should it take to come up with the final word on such questions? Our highest court is so small that the views of individual justices have a distorting and idiosyncratic effect on our laws. The deep respect for the Supreme Court as an institution often blinds us to its flaws, the greatest of which is that it is demonstrably too small. Nine members is one of the worst numbers you could pick — and it’s certainly not what the founders chose. The Constitution does not specify the number of justices, and the court’s size has fluctuated through the years. It’s time for it to change again…While the best number is debatable, I believe that a 19-member court — roughly the average size of a circuit court — would be ideal. Just because we settled on the number 9 arbitrarily does not mean that any number is as good as any other. A 19-member or so court has been shown to work efficiently where a larger court would likely be unwieldy.” Jonathan Turley in The Washington Post.
TOMASKY: Democrats should come out swinging if the Court overturns Obamacare. “I expect, as I think most of us do, an unfriendly decision (from the Democratic point of view) on the health-care law. Can’t yet say how unfriendly; at the very least, an overturning of the individual mandate, and maybe more. Assuming that’s correct, the question immediately becomes how the president and the Democrats should respond. There’s very little they can do legislatively. But I’ll be watching for rhetoric, tone, even body language. And on those counts, they had damn well better dispense with the usual liberal woe-is-me hand-wringing and shoulder slumping and come out swinging. They had better communicate to their base that they stand for something, it’s important to them, and they’re pissed. And if they do it the right way, they can make the Supreme Court an issue this fall in a way that might even persuade some swing voters that the court overstepped its bounds.” Michael Tomasky in The Daily Beast.
ADLER AND CANNON: Even if Obamacare survives, legal challenges will continue. “Even if the Affordable Care Act survives its first Supreme Court test– a ruling is due as early as today — the lawsuits won’t end…Still another potential lawsuit poses as great a threat to the law as the case now before the high court. Under the guise of implementing the law, the Internal Revenue Service has announced it will impose a tax of up to $3,000 per worker on employers whom Congress has not authorized a tax…Under the Congressional Review Act, Congress has 60 days from the date of issue to block the rule. Reps. Scott DesJarlais, R-Tenn., and Phil Roe, R-Tenn., have introduced a resolution…If that approach fails, states that have refused to establish a health insurance exchange, and large employers the IRS will hit with this unauthorized tax, could challenge the rule in court.” Jonathan Adler and Michael Cannon in USA Today.
11 facts about the Affordable Care Act: http://wapo.st/MlOLL5.
1) KRUGMAN: People with power to contain economic crisises are refusing to act. “Why won’t the Fed act? My guess is that it’s intimidated by those Congressional Republicans, that it’s afraid to do anything that might be seen as providing political aid to President Obama, that is, anything that might help the economy. Maybe there’s some other explanation, but the fact is that the Fed, like the European Central Bank, like the U.S. Congress, like the government of Germany, has decided that avoiding economic disaster is somebody else’s responsibility. None of this should be happening…Knowledge and resources do no good if those who possess them refuse to use them. And that’s what seems to be happening. The fundamentals of the world economy aren’t, in themselves, all that scary; it’s the almost universal abdication of responsibility that fills me, and many other economists, with a growing sense of dread.” Paul Krugman in The New York Times.
2) STIGLITZ: Policy has contributed to widening inequality. “The Fed has consistently failed to understand the links between inequality and macroeconomic performance. Before the crisis, the Fed paid too little attention to inequality, focusing more on inflation than on employment…After the crisis, as the Fed lowered interest rates — in a predictably futile attempt to stimulate investment — it ignored the devastating effect that these rates would have on those Americans who had behaved prudently and invested in short-term government bonds, as well as the macroeconomic effects from their reduced consumption. Fed officials hoped that low interest rates would lead to high stock prices, which would in turn induce rich stock owners to consume more. Today, persistent low interest rates encourage firms that do invest to use capital-intensive technologies, such as replacing low-skilled checkout clerks with machines. In this way, the Fed may still be contributing to a jobless recovery, when we finally do recover.” Joseph Stiglitz in The Washington Post.
3) LEONHARDT: The young are losing to the old. “The wealth gap between households headed by someone over 65 and those headed by someone under 35 is wider than at any point since the Federal Reserve Board began keeping consistent data in 1989. The gap in homeownership is the largest since Census Bureau data began in 1982. The income gap is also at a recorded high; median inflation-adjusted income for households headed by people between 25 and 34 has dropped 11 percent in the last decade while remaining essentially unchanged for the 55-to-64 age group. If there is a theme unifying these economic and political trends, in fact, it is that the young are generally losing out to the old…Over all, more than 50 percent of federal benefits flow to the 13 percent of the population over 65. Some of these benefits come from Social Security, which many people pay for over the course of their working lives. But a large chunk comes through Medicare…a transfer program from young to old.” David Leonhardt in The New York Times.
4) PEARLSTEIN: Mario Monti is the euro’s best hope. “Monti is well-positioned to act as the honest broker between France’s new socialist president, Francois Hollande, who wants to shift the focus of European policy to pro-growth fiscal and monetary stimulus, and German Chancellor Angela Merkel, a stubborn champion of hard money, tight budgets and market-friendly structural reforms. As the leader of an economy shrinking at the annual rate of 2 percent or more, Monti is determined to put growth back at the top of the European policy agenda. At the same time, his tough moves to raise taxes, cut spending and reform Italy’s notoriously uncompetitive labor and product markets have won him credibility with Merkel…In truth, there is no simple Keynesian solution by which the euro zone could borrow-and-spend its way back to growth…What would work would be…genuinely Europe-wide energy, transportation, education and environmental projects that would enhance the efficiency and productivity of the region’s economy over the long run.” Steven Pearlstein in The Washington Post.
@ezraklein: Pearlstein: “Germany’s Merkel… seems to believe that economics is a branch of moral philosophy.”
5) MILLARD: Corporate pension reform is needed. “Pension plans measure their liabilities by applying a discount, or interest, rate that is prescribed by law. The lower the discount rate, the more they will have to contribute to fund their plans. Right now, defined-benefit pensions must use a discount rate based on a two-year average of AA corporate bond rates. Because these bond rates are at such historic lows, corporations are under tremendous pressure to meet their pension funding obligations. But there is a proposal in Congress that can give companies the relief they need while also protecting employee pensions. It can also help reduce the federal deficit…Corporations should be allowed to use interest rates that are smoothed over many years. This makes sense because pension obligations are paid over decades. Moreover, pension plans do not need to be continuously funded at 100% of their current liabilities, because they are not payable now. Unfortunately, the current law treats them as if they are.” Charles Millard in The Wall Street Journal.
Top long reads
David Segal on Apple’s retail workers:“Last year, during his best three-month stretch, Jordan Golson sold about $750,000 worth of computers and gadgets at the Apple Store in Salem, N.H. It was a performance that might have called for a bottle of Champagne — if that were a luxury Mr. Golson could have afforded. ‘I was earning $11.25 an hour,’ he said. ‘Part of me was thinking, ‘This is great. I’m an Apple fan, the store is doing really well.’ But when you look at the amount of money the company is making and then you look at your paycheck, it’s kind of tough.’…While consumers tend to think of Apple’s headquarters in Cupertino, Calif., as the company’s heart and soul, a majority of its workers in the United States are not engineers or executives with hefty salaries and bonuses but rather hourly wage earners selling iPhones and MacBooks. About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year.”
Acoustic interlude: Paul Westerberg plays “Achin’ to Be” at AOL.
Got tips, additions, or comments? E-mail me.
Still to come:A eurozone sort-of stimulus; new rules on debt collection from patients; VAWA reauthorization is stuck; the farm bill may be pushed back again; and Vincent van Gogh recreated with a lot of dominoes.
The middle-aged jobless are struggling too. “Much of the attention during the prolonged U.S. employment crisis has been on high rates of joblessness among young people. Less noticed, but no less significant to many economists, has been the plight of the middle-aged. More than 3.5 million Americans between the ages of 45 and 64 were unemployed as of May, 39% of them for a year or more–a rate of long-term unemployment that is unprecedented in modern U.S. history, and far higher than among younger workers. Millions more have quit looking for work…In the 1990s, the unemployment rate among 45- to 64-year-olds peaked at 5.7%. In the brutal downturn of the 1980s, that jobless rate barely topped 7%. This time, it topped out at 8.2%. As of May, the unemployment rate for people ages 45 to 64 was 6%, some 10 points lower than for people under 25…Those between 45 and 64 take almost a year on average to find a job, more than two months longer than workers between 25 and 44.” Ben Casselman in The Wall Street Journal.
Eurozone leaders will push for a stimulus package. “Leaders of the eurozone’s four largest economies pledged on Friday to back a €130bn growth package and defend the common currency but remained divided over the credit crisis…Angela Merkel, German chancellor, declined to endorse affirmations by all three of her co-heads of government – Italy’s Mario Monti, François Hollande of France and Spain’s Mariano Rajoy – of the need to use the eurozone’s bailout funds to ‘stabilise financial markets’…Officials conceded, however, that the declaration by all four leaders of an agreed proposal to launch a €120bn to €130bn ‘growth’ package was not new. Nicholas Spiro, a sovereign risk analyst, said the ‘rehashed’ European growth compact was ‘another example of eurozone leaders desperately trying to paper over their differences while failing to address the issue which concerns investors the most: shoring up the sovereign debt markets of Spain and Italy’.” Guy Dinmore and Peter Spiegel in The Financial Times.
@mattyglesias: [soccer outcome] [eurozone economic policy]
Greece outlined a plan to renegotiate its bailout. “Two days before Greece’s international creditors return to Athens to begin talks on keeping the nearly bankrupt country solvent, the new coalition government on Saturday highlighted the main points it plans to renegotiate with lenders, aiming to revoke certain taxes, suspend planned layoffs in the bloated public sector and extend by two years the deadline for imposing additional austerity measures…The chief priorities highlighted in the policy statement — the product of several days of tense negotiations between the coalition parties — include the extension of Greece’s “fiscal adjustment period” by at least two years, to 2016, so that fiscal targets can be met without further cuts to salaries and pensions. The blueprint also aims to revoke changes to collective bargaining agreements in the private sector and to ease the burden on taxpayers by ensuring that they pay no more than 25 percent of their income in overdue obligations.” Niki Kitsantonis in The New York Times.
The WTO is warning about an increase in barriers to trade. “Argentina tweaked import regulations on bottle caps and water balloons. India banned exports of cotton. South Africa instituted a tariff on artificial turf. Those recent policy changes sound minute. But they, and scores more like them, have stoked fears about trade protectionism rising as the global economy cools. The World Trade Organization and other independent analysts are sounding the alarm. In a report released at the end of April, the W.T.O. said that since mid-October the Group of 20 economies — the world’s biggest, which account for a vast majority of the world’s economic output and trade — had added 124 new restrictive measures affecting about 1 percent of world imports…The wave of protectionism comes as growth has slowed or stalled in nearly every region of the world…According to the Global Trade Alert, the share of protectionist measures put in place by Group of 20 economies has climbed to 79 percent today from 60 percent in 2009.” Annie Lowrey in The New York Times.
The fiscal situations of state and local governments are slowing the recovery. “State and local governments were hit hard by the recession. But even as they get a handle on their finances, more austere funding likely to come from the federal government and the burden of pension and health-care obligations have put their spending growth on a flatter trajectory. That’s good news for tomorrow’s economy if it puts cities and states on a path to better financial shape, but it is straining today’s recovery. Last year, spending and investment by state and local governments was $1.8 trillion, or 11.9 percent of U.S. gross domestic product, which was $15.1 trillion. Spending by the nation’s 89,000 public jurisdictions…is expected to grow less fast and therefore fall as a share of the slow-growing economy. Forecasting firm Macroeconomic Advisers projects state and local government spending and investment will fall to about 10% of GDP by 2020, which would be the lowest level since the mid-1960s.” Conor Dougherty in The Wall Street Journal.
Regulators are wrangling over overseas trading. “The Commodity Futures Trading Commission abruptly canceled a meeting to vote on the overseas trading proposal with just hours to spare. The agency provided no explanation…Interviews with regulators, who spoke on the condition of anonymity, show that the agency canceled the meeting after closed-door talks yielded a more flexible proposal that gives Wall Street additional time to comply. Now, rather than debating the issue in public, the commissioners plan to cast their votes in private over the next several days, according to people briefed on the matter. While such wrangling is business as usual in Washington, and the changes debated this week are relatively modest, the trading commission’s new overseas proposal has become a focal point in the debate over Wall Street regulation. The proposal, stemming from the Dodd-Frank financial regulatory law, takes aim at firms that ship derivatives trading overseas to escape the eyes of American regulators.” Ben Protess in The New York Times.
Adorable children being adorable together interlude: Kindergarteners perform Madonna’s “Vouge”
New rules would protect patients from aggressive debt collection. “Patients at about half of U.S. hospitals will be shielded from aggressive debt collection under regulations proposed by the Treasury Department. The draft rules issued Friday, following concerns about medical debt-collection practices that came to light in the past year, would require tax-exempt charitable hospitals to establish new billing and collections practices for patients who are eligible for financial help…Many hospitals are under financial stress because of reduced government payments and other factors, and are eager to increase collections. A growing number of have hired ‘revenue-cycle management companies’ to file claims with insurers and government programs and collect money from patients…Under the Treasury proposal, tax-exempt hospitals can’t report a debt to a credit agency or garnish wages until they give patients an opportunity to seek financial assistance.” Alan Zibel in The Wall Street Journal.
States are struggling to implement the habilitative services benefit. “Six months after Health and Human Services told states to figure out the health care law’s mandated benefit packages on their own, there’s still one category of benefits that remains in doubt. It’s habilitative services — which help people overcome long-term developmental problems, like speech therapy for children or physical or occupational therapy…In December, the Obama administration said it’s up to the states to set the Affordable Care Act’s essential health benefits package, which sets requirements for coverage sold in the law’s new health insurance exchanges starting in 2014. States can choose from a category of 10 plans to set benefits, including the state’s largest small-group plans, HMO plans, state employee plans and federal employee plans…It is stuck on how to shape the habilitative services benefit — required by the ACA but not typically featured in the types of plans states can choose from as their benchmark.” Jason Millman in Politico.
@sarahkliff: At my first poker night. Made a comparison between the blind and the individual mandate. Relatedly, not making friends!
Progress on the VAWA has come to a halt. “Progress on the reauthorization of the Violence Against Women Act has ground to a halt despite the passage of competing bills in the House and Senate. Democrats had once made the bill a top priority, but Senate leaders were unable to send their bill to the House because they found it violated the Constitution by raising revenue. House Republicans say they’ve yet to see any substantive negotiations on the legislation and are waiting for the Senate to fix their bill. Senate leaders, on the other hand, want the House to take up their version, which passed with bipartisan support and had the backing of most advocacy groups…When the issue will get resolved is anyone’s guess. Lawmakers and aides say there is no timetable, and because there is no hard deadline to act, the Violence Against Women Act has taken a backseat to the student loan and highway bills that must be passed by the end of June.” Russell Berman in The Hill.
The Senate is getting closer to a student loan deal. “Senate negotiators are making steady progress toward a framework agreement to avert a doubling of student loan rates set to occur July 1, top aides confirm. While Senators have left town for the weekend, staffers continued discussions Friday with hopes of announcing a deal early next week. They have tentatively agreed to use a combination of items proposed in recent weeks by leaders in both parties to provide nearly $6 billion. Included will be a proposal originally advanced by Senate Majority Leader Harry M. Reid (D-Nev.) to raise premiums paid by businesses for federal pension insurance–a plan that may be accepted by executives because it will be paired with new rules allowing them to lower pension liabilities, according to a top Senate Democratic aide. One of a number of items proposed by Republicans last month will also be included, the aide said–though a GOP proposal to raise retirement contributions of federal employees appears to be off the table.” Rosalind Helderman in The Washington Post.
Domino art interlude: Vincent van Gogh’s “Starry Night,” recreated with dominos.
The farm bill looks set to be pushed back further. “Having delayed a farm bill markup in deference to an agriculture appropriations bill due on the floor next week, the House Republican leadership confirmed Friday that the $19.4 billion appropriations measure isn’t likely to come up either before the July Fourth recess. Instead Majority Leader Eric Cantor (R-Va.) has assigned the first slot to a transportation appropriations bill which will be called up Tuesday night. Given the press of other legislation–and some annual social events for lawmakers–both the leader’s office and the Appropriations Committee signaled that it is unlikely the agriculture measure will make it to the floor before the holiday. House Agriculture Committee Chairman Frank Lucas (R-Okla.) was described as unfazed. But just days ago, Cantor asked him to delay any action on the farm bill precisely because of the conflict. Why the leader didn’t follow through and schedule the agriculture appropriations first next week is unclear.” David Rogers in Politico.
@drgrist: I’m trying to write a post on sea-level rise and I keep typing “seal-level,” over and over. I don’t really know anything about seal levels.
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.