RCP Obama vs. Romney: Obama +1.7%; 7-day change: Obama -1.8%.
RCP Obama approval: 46.8%; 7-day change: -0.9%.
Top story: Are you ready to repeal?
The House votes today on another healthcare repeal bill. “The House has voted 30 times previously to undo all or part of the health law, and the Senate is all but certain to ignore the House action. But GOP leaders want to reaffirm their opposition to it in advance of November’s elections. The arguments on the House floor Tuesday ahead of the vote weren’t new, but the urgency was greater. Members of both parties say opponents’ last chance for overturning Mr. Obama’s signature domestic achievement is to capture the White House and Senate.” Naftali Bendavid and Louise Radnofsky in The Wall Street Journal.
@mattyglesias: If the House GOP votes to repeal ObamaCare one more time, the Supreme Court will change its mind right?
@RyanLizza: Fav line from repeal debate goes to Bachmann: ACA is “crown jewel of socialism” that “steals $574 million from Medicare.”
And Senate might take another repeal vote soon. “Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday he wants the Senate to vote again ‘in the near future’ on repealing President Obama’s healthcare law. McConnell had held off on forcing a repeal vote while he waited for the Supreme Court to rule on the healthcare law. Now that the court has upheld it, he said the Senate should follow the House’s lead and hold another symbolic vote on repeal.” Sam Baker in The Hill.
But the debate over Medicaid expansion has a much bigger impact. “House Republicans are lining up to repeal the Affordable Care Act on Wednesday, but GOP governors in the South have a real plan to gut the law…Unlike the symbolic votes in the House this week, the governors’ tough talk has real-world consequences: Texas and Florida are among five hell-no states, meaning 3 million of the potential Medicaid beneficiaries — or about 1 in 5 nationwide — won’t get coverage through President Barack Obama’s health care law, according to a POLITICO analysis of data compiled by The Urban Institute. The governors of Mississippi, Louisiana and South Carolina also have said Washington can keep its Medicaid money and the new requirements that come with it…But not all Republican governors are convinced and most have taken a more measured approach. The Medicaid expansion is still in doubt in at least eight other states with GOP governors who are leaning no.” Jonathan Allen and Kathryn Smith in Politico.
@jmartpolitico: It’s a sign of how much Dems have given up on politics of ACA that they ignoring R govs who are boasting of denying their citizens insurance
Hospitals could face a financial crisis in states rejecting Medicaid expansion. “Hospitals in some US states are facing a potential financial crisis after a string of Republican governors rejected a provision of President Barack Obama’s healthcare law that would have expanded their number of insured patients…The development spells bad news for roughly 4m uninsured people – the working poor, as some analysts have defined them – who would have been eligible for insurance in those states. It is also devastating for hospitals who are legally obliged to treat those patients and take a hit to their bottom line whenever one walks through their doors. In 2010, the hospital industry took a gamble on the ACA. They backed the president’s sweeping law and agreed to accept $155bn in cuts in government reimbursements over 10 years to help to pay for it…Jennifer Schleman of the American Hospital Association says Congress may have to pass a new law to ‘revisit’ the cuts that were agreed.” Stephanie Kirchgaessner in The Financial Times.
The uninsured may come out of the woodwork and onto Medicaid. “What really has many state leaders worried is something called the ‘woodwork effect.’ When big parts of the health law go into force in 2014, they worry it will bring out of the woodwork the millions of people who are already eligible for Medicaid but aren’t already enrolled. When some people look to see if they can get health insurance through one of the health exchanges, they may discover a cheaper option. ‘They will find out that they’re actually eligible for Medicaid,’ says Bruce Lesley, president of First Focus, an advocacy group for children and families. But many of those people signing up for Medicaid won’t be members of the newly eligible expansion group, whose bills will be largely paid by the federal government. They’ll be regular old Medicaid beneficiaries, and states will have to pay up to half their costs…Goldsmith says state officials he’s talked to worry that Medicaid, already the largest piece of almost every state budget, could end up dwarfing everything else.” Julie Rovner in NPR.
Some Medicaid experts are urging flexibility to get states on board. “Three former administrators of the Centers for Medicare & Medicaid Services who served Republican presidents have a bit of advice for Democrats trying to get conservative governors to go ahead with Medicaid expansion: Be flexible. Don’t make it a political litmus test. And try not to pour fuel on what’s already a hot-burning fire…The three former administrators would counsel CMS to take it slow, avoid antagonizing states by issuing ultimatums and get ready for a whole new dynamic in the state-federal Medicaid negotiations — one in which the states have a lot more leverage than in the past. ‘The big point is that states are going to get something as a result of the shift in the negotiating power with the federal government,’ said Mark McClellan, who served under President George W. Bush and is now director of the Engelberg Center for Health Care Reform at the Brookings Institution. ‘That’s going to mean something, but we don’t know exactly what.’” Brett Norman in Politico.
Medicaid dollars spur further economic activity. “Here’s one factor governors may want to weigh as they consider participating in the health law’s Medicaid expansion: Study after study has found that federal Medicaid dollars spur economic activity beyond the initial investment. Researchers find that a dollar of Medicaid spending increases spending both in the health-care sector and in other industries…Medicaid acts as a stimulus in two ways. First, increased federal spending on health care can, in tough budget times, free up state dollars for other spending. Medicaid spending can also ripple through the private sector, stimulating increased employment that leads to higher household spending…One recent study found that every $100,000 in stimulus dollars increased employment by 3.8 job years. Each stimulus dollar had a multiplier of 2, meaning that every $1 of Medicaid spending resulted in a $2 increase in gross domestic product.” Sarah Kliff in The Washington Post.
Markets seem to be betting on Medicaid expansion. “For all the Republican governors saying they’ll block President Barack Obama’s plan to expand Medicaid in their states — now at least five — the market seems to think they’re bluffing. There are clear signs that Wall Street is anticipating a spike in Medicaid spending that would come from the expansion. Among them: Insurance giant WellPoint announced Monday it has agreed to spend $4.9 billion in cash to purchase Amerigroup, a smaller health insurance firm whose business focuses on Medicaid administration…’When you step back from all this, there are billions of dollars of federal money that are going to flow into the states. We think the states are going to need to take it,’ Amerigroup CEO James Carlson told analysts in a call following the announcement…’The de facto assumption is that most states will go ahead and expand,’ Dave Windley, a senior health care analyst with investment bank Jefferies” Patrick Reis in Politico.
ORSZAG: The subsidies will get states to sign up for the Medicaid expansion. “Timing. That’s the crucial element missing from the rancorous debate, prompted by the U.S. Supreme Court’s health-care ruling, over whether states will decide not to expand Medicaid. Officials in the Obama administration confidently predict that few, if any, states will opt out of the expansion. Opponents say most of them will. My guess is, both sides are right. Many states seem likely to opt out at first, judging by what their governors have said. Over time, however, assuming the law stays in place, most states will find it hard to resist the substantial subsidies for new enrollees. After all, over the past few decades, states have gradually added optional benefits and expanded the number of beneficiaries beyond the bare minimum required by the federal government. And they have done so in response to much smaller subsidies than offered under the 2010 health-care-reform law.” Peter Orszag in Bloomberg.
MILLER: Republicans have abandoned the uninsured. “This is the shameful reality behind the GOP’s rhetoric on health care. Republicans don’t want to spend a penny to insure the uninsured. We know this because back during the original debate over Obamacare, the ‘boldest’ GOP alternative would have extended coverage to 3 million of the 50 million uninsured, versus Obama’s 30 million (which still leaves us 20 million short of behaving like every other civilized nation, mind you). It was not always thus. It’s striking to recall that back in 1992, George H.W. Bush put out a serious plan to cover 30 million of the then 35 million uninsured. (Democrats at the time rejected it, figuring they’d do the job on their own terms once Bill Clinton won. We know how that turned out.) So the erosion of Republican seriousness over two decades can be tracked with unusual precision. As the ranks of the uninsured have soared, the size of Republican compassion has shriveled.” Matt Miller in The Washington Post.
1) WOLF: Policy must continue to facilitate deleveraging. “The big story continues to be one of private sector de-leveraging, tempered by easy monetary policy and offset by the leveraging of the government’s balance sheet. The willingness of the authorities to do both of these things, despite foolish criticism, prevented us from experiencing a second great depression and continues to do so. The idea seems fantastic that these large fiscal deficits are crowding out private spending when interest rates are so low in countries blessed by not being in the eurozone…We know that big financial crises cast long shadows, particularly in countries whose underlying rate of growth is modest, which makes de-leveraging slow. Policy must both sustain demand and facilitate de-leveraging. This means aggressive monetary and fiscal policies, working in combination, along with interventions aimed at recapitalising banks and accelerating restructuring of private debt.” Martin Wolf in The Financial Times.
2) PORTER: Corporate corruption’s broader impacts are alarming. “Perhaps the most surprising aspect of the Libor scandal is how familiar it seems. Sure, for some of the world’s leading banks to try to manipulate one of the most important interest rates in contemporary finance is clearly egregious. But is that worse than packaging billions of dollars worth of dubious mortgages into a bond and having it stamped with a Triple-A rating to sell to some dupe down the road while betting against it?…The misconduct of the financial industry no longer surprises most Americans. Only about one in five has much trust in banks, according to Gallup polls, about half the level in 2007. And it’s not just banks that are frowned upon. Trust in big business overall is declining. Sixty-two percent of Americans believe corruption is widespread across corporate America…We should be alarmed that corporate wrongdoing has come to be seen as such a routine occurrence. Capitalism cannot function without trust.” Eduardo Porter in The New York Times.
@BCAppelbaum: “We should be alarmed corporate wrongdoing has come to be seen as routine. Capitalism cannot function without trust.”
3) MALPASS: Litigation over the Libor scandal could slow down growth. “The Libor scandal may by bad enough to slow a global economy already weighed down by troubles in Europe, the U.S. and China. This is not because this key interest rate is more important than other prices in the economy. That’s probably not the case. The problem is that the litigation potential is enormous and could infect a broad range of markets for years…If the world now claims that Libor approximations should be exact and then sues over imprecision, the result will be a powerful drag on global growth. The allegations of manipulation run the gamut…The sharp November decline in Libor hurt lenders and helped Libor-based debtors in the heat of the crisis. To reduce the impact of this scandal on global growth, the financial world and their governing bodies need to quickly identify wrongdoing, deal with it, and then move forward. The world can’t afford endless litigation against the financial system.” David Malpass in The Wall Street Journal.
4) BARRO: It’s time to abolish tax-free municipal bonds. “In 2011, 35,000 taxpayers making more than $200,000 a year paid no federal income tax. As Matthew O’Brien notes at The Atlantic, 61 percent of those avoided tax for the same reason: their income consisted largely of interest on tax-exempt municipal bonds. As Washington looks for options to broaden the tax base, and particularly to eliminate tax preferences for the wealthy, why not eliminate this exemption?…There is a ready model for reform. For 2009 and 2010, states and municipalities were allowed to issue so-called Build America Bonds. These bonds were taxable, but the federal government made 35 percent of the interest payments. These bonds can be sold to individuals, but are also attractive to investors who can’t take advantage of a tax preference, such as pension funds and foreign entities. In 2011, Congress let the Build America Bonds program expire but kept traditional tax-free munis. It would be better to do the opposite.” Josh Barro in Bloomberg.
5) SAMUELSON: Offshoring doesn’t have a big impact on jobs. “It’s not that offshoring is a myth. No one knows its full extent, because comprehensive employment figures for international trade and money flows don’t exist. But there are estimates for some items. America’s huge trade deficit with China might have cost 2.8 million U.S. jobs from 2001 to 2010, says Robert Scott of the Economic Policy Institute, a liberal think tank. (The estimate counts jobs created by exports and subtracts jobs lost to imports.) Although that’s a lot, the loss in any single year would have been modest, and even the total is only about 2 percent of all U.S. payroll jobs (129.8 million in 2010). Also, offshoring is not all negative for U.S. employment. Cheap imports may have boosted U.S. economic growth — and job creation — by holding down inflation and increasing both consumer purchasing power and business profits. The larger point is that developments in the domestic economy, for good and ill, still dominate job expansion and decline.” Robert Samuelson in The Washington Post.
Minneapolis indie pop interlude: Jeremy Messersmith plays “Novocain” on KUST.
Got tips, additions, or comments? E-mail me.
Still to come: Spain will give up control over banks; food stamp cuts may sink the farm bill; a new cybersecurity compromise; clean coal has a way to go; and the best video of Andy Warhol eating a hamburger that you’ll ever see.
States are still trying to find the right balance between taxes and spending. “As state governments begin to emerge from the long downturn, many are grappling with a difficult choice: should they restore some of the services and jobs they were forced to eliminate in the recession or cut taxes in the hopes of bolstering their local economies? The debate over the proper balance between taxing and spending has been raging in Congress, on the presidential campaign trail and in statehouses around the country, and no two states have settled it more differently this year than Maryland and Kansas, whose fiscal years began July 1. Maryland, a state controlled by Democrats that has a pristine credit rating, raised income taxes on its top earners this year to preserve services and spending on its well-regarded schools — leading some business groups to warn that the state might become less competitive. Kansas, controlled by Republicans, decided to try to spur its economy with an income tax cut.” Michael Cooper in The New York Times.
Spain will be forced to give up most of its control over its banks. “Spain will be forced to give up most of the control over its banks to European institutions–and will be required to impose losses on local investors–in return for a bailout of as much as €100 billion ($123 billion), according to the draft agreement accompanying the rescue…Banks won’t get taxpayer funds until they have come up with a burden-sharing arrangement with investors. According to the draft document, those investors include not only equity holders, but also owners of hybrid capital and subordinated debt. The idea behind this exercise, for which Spain still has to create a legal basis, is to limit the amount of taxpayer-funded bailout money that has to be pumped into the banks. But in the case of Spain, such arrangements may still hit ordinary citizens directly, as hundreds of thousands of them bought preferred shares in local banks.” Matina Stevis and Gabrielle Steinhauser in The Wall Street Journal.
In 2009 Americans paid the lowest tax rates in 30 years. “Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday. A sharp decline in income — especially among the wealthiest Americans, who pay the highest tax rates — also played a role, according to the report by the nonpartisan Congressional Budget Office. Household income fell 12 percent on average from 2007 to 2009, with income among the top 1 percent of earners decreasing by more than a third…During Obama’s first year in office, the average tax rate paid by all households fell to 17.4 percent, down from 19.9 percent in 2007, according to the CBO. The 2009 rate was significantly lower than the previous low of 19.4 percent in 2003 and well below the 30-year average of 21 percent.” Lori Montgomery in The Washington Post.
The New York Fed was told about problems with Libor in 2007. “The Federal Reserve Bank of New York said Tuesday it had received word as early as 2007 from the British bank Barclays about problems with the benchmark interest rate that underpins much of global lending. Barclays has admitted to rigging Libor, an interest rate that sets the standard for lending in a wide variety of markets — from corporate bonds to credit cards and some mortgages. On Tuesday, the New York Fed said that it had received ‘occasional anecdotal reports from Barclays of problems with Libor’ in late 2007, as the financial crisis was starting…After receiving initial reports in 2007, the New York Fed said, it made additional inquiries of Barclays about its Libor operations, and subsequently made suggestions for changes to British authorities. Geithner personally participated in several conversations with Barclays executives, according to his New York Fed calendar…It wasn’t clear if these meetings focused on the Libor issues now coming to light.” Zachary Goldfarb in The Washington Post.
@ModeledBehavior: Can we not kickstarter our way out of this great stagnation?
Strange music videos interlude: A Day in the Life of the Golden Gate Bridge.
Farm bill food stamp cuts are dividing both parties. “Food stamps are fast becoming a flash point for the House farm bill this week — but also an increasingly partisan, even racially tinged debate in Congress over the future of the social safety net in these hard economic times. The politics are explosive enough that Republican farm bill proponents are working now to tamp down any further nutrition cuts demanded by conservatives on the House Agriculture Committee, which will take up the bill on Wednesday. At the same time, Assistant Democratic Leader Jim Clyburn stepped into the fray Tuesday, warning that the $16.5 billion in food stamp savings are already an ‘abomination,’ but ‘I stand ready to do whatever I can to assist in this discussion.’…Urban Democrats are warning they will move to kill the farm bill entirely when it comes to the floor. Given the expected opposition from tea party Republicans, that could be enough to block action.” David Rogers in Politico.
The congressional GOP is taking aim at the contraception mandate again. “A new Republican bill would remove the teeth from a contentious Obama administration health mandate by barring the federal government from penalizing employers that do not comply. The measure was written in response to the Affordable Care Act, which requires that most employers cover birth control without a co-pay for employees. Under the GOP bill, employers that object to birth control for religious reasons can refuse to cover it without facing financial penalties from the government. Rep. James Sensenbrenner Jr. (R-Wis.), an author of the new bill, argued that the mandate’s current penalty for non-compliance would sink many religious groups…Sensenbrenner’s bill would erase the taxes faced by employers who choose not to cover certain healthcare benefits ‘by reason of adherence to a religious belief or moral conviction.’” Elise Viebeck in The Hill.
Two senators are pushing a new compromise on cybersecurity. “Two senators seeking to build support for a compromise cybersecurity proposal have dropped a key provision requiring third-party audits for companies operating critical infrastructure. The move by Sens. Sheldon Whitehouse (D-R.I.) and Jon Kyl (R-Ariz.) is intended to win industry support and break a stalemate over cybersecurity legislation in the Senate…The latest version leaves out the so-called ‘national security need’ section that was included in a draft proposal circulated last month, according to two people familiar with the updated framework. The old section would have authorized the Defense Department (DOD) and Department of Homeland Security (DHS) to require operators of infrastructure that would ’cause a severe degradation of national security’ if disabled to submit to third-party audits on the security of their systems and networks.” Jennifer Martinez in The Hill.
Artists eating fast food interlude: Andy Warhol eats a hamburger.
‘Clean’ coal tech is ready, but unlikely to be used. “The federal government has funneled billions of dollars over the past two administrations into cutting carbon pollution from coal-fired power plants, but so far the ‘clean coal’ dream is far from reality…While the technology is there, it’s struggling to make its way into prime time. The reasons: It’s expensive, and there are no limits on carbon emissions. Without climate legislation or new regulations that mandate the technology, companies don’t really have an incentive to deploy the technology on a commercial scale…The likelihood that these problems can be solved in the near future is small. The days when the federal government greatly boosted funding for energy research, demonstration and deployment are most likely long gone; the Environmental Protection Agency, though it has proposed climate regulations for new power plants, currently has ‘no plans’ to impose the same rules on existing plants; and there is zero political appetite for legislation that puts a price on carbon.” Andrew Restuccia and Erica Martinson in Politico.
The House GOP wants to sunset loan guarantees for clean energy. “House Republicans floated legislation Tuesday that would sunset the Energy Department’s controversial loan guarantee program for green energy projects. The draft bill, which Republicans call the ‘No More Solyndras Act,’ would bar the Energy Department (DOE) from granting loan guarantees for any applications received after the end of 2011. For existing applications, the bill — which is named after the failed DOE-backed solar firm Solyndra — sets new parameters for reviewing the requests. The department currently has authority to issue $34 billion worth of loan guarantees, according to the draft bill. House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), Upton’s point man on the committee’s Solyndra probe, are the sponsors of the draft bill that will be the subject of a committee hearing Thursday. Stearns said Monday evening that he’s hoping for a floor vote before the congressional August recess.” Ben Geman in The Hill.
Global warming makes heat waves more likely. “Some of the weather extremes bedeviling people around the world have become far more likely because of human-induced global warming, researchers reported on Tuesday. Yet they ruled it out as a cause of last year’s devastating floods in Thailand, one of the most striking weather events of recent years. A new study found that global warming made the severe heat wave that afflicted Texas last year 20 times as likely as it would have been in the 1960s. The extremely warm temperatures in Britain last November were 62 times as likely because of global warming, it said…The general conclusion of the new research is that many of the extremes being witnessed worldwide are consistent with what scientists expect on a warming planet. Heat waves, in particular, are probably being worsened by global warming, the scientists said. They also cited an intensification of the water cycle, reflected in an increase in both droughts and heavy downpours.” Justin Gillis in The New York Times.
Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.