Wonkbook: Everything you need to know about Jack Lew

January 10, 2013

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Wonkbook's Number of the Day: 6 billion. That's the combined number of man-hours U.S. taxpayers spend working on their taxes, according to the ombudsman of the IRS. The federal tax code is so complex, 90 percent of Americans pay experts to help them pay their taxes. And it's not getting any easier, either: since 2001, Congress has made an average of more than one change to the code each day. For more on the tax code and the fine print of policy, see Wonkbook's special section.

Wonkblog's Graph of the Day: The U.S. has a very high infant mortality rate.

Today in Wonkbook: Obama to nominate Jack Lew for Treasury Secretary; should we mint the coin?; study finds case for green stimulus; what the White House is planning on gun control; New Mexico to expand Medicaid; the fine print of tax and financial regulation; and how education is changing.

Jack Lew speaks during an interview in Washington in March 2011. (Source: Andrew Harrer/Bloomberg)
Jack Lew speaks during an interview in Washington in March 2011. (Source: Andrew Harrer Bloomberg)

Top story: What Lew can do as Obama's Treasury Secretary

Obama picks Jack Lew, White House chief of staff, for Treasury Secretary post. "Obama plans to nominate Lew to take over from Treasury Secretary Timothy F. Geithner, the president’s longest-serving economic adviser, according to two people familiar with the pick. The selection signals that Obama’s second term will not initially focus on big new ideas to create jobs or expand government investment in the economy...Rather, it will involve a sustained conflict with congressional Republicans over the nation’s finances...Lew, 57, is a veteran of these fights. He was formerly the budget director for Obama and President Bill Clinton." Zachary A. Goldfarb, Jim Tankersley, and Chris Cillizza in The Washington Post.

Longreads on Lew:

In National Journal this November, Nancy Cook called Lew 'the man who could save Obama's legacy.' "Jacob Lew isn’t the most obvious figure to be charged with securing the Obama legacy. The purposefully low-key White House operative is content to work behind the scenes, and he always takes care to speak strictly on behalf of the president. Yet this Jewish son of middle-class parents from Queens, a stranger to President Obama’s Chicago-centric universe, could help cement the way the first African-American president is remembered if Lew can cut a sweeping budget deal in the coming months. To do that, however, he might have to give ground and trigger what critics may see as the first steps in the dismantling of the modern social-welfare state by allowing Republicans to chip away at the very ideal that has inspired and informed Lew’s public service since the days he learned Washington’s mores at Tip O’Neill’s side." Nancy Cook in National Journal.

The New York Times' Carol Gay Stolberg also wrote a shorter profile of Lew in December, describing him as a 'low-key power broker': "At 57, Mr. Lew may be the most unassuming power broker in Washington. He is deeply religious (an Orthodox Jew, he leaves work each Friday before sundown) and is so strait-laced that his colleagues feel compelled to apologize when they curse in front of him. He brings his own lunch (a cheese sandwich and an apple) and eats at his desk. With his owlish glasses and low-key manner, Mr. Lew may come off as just a policy nerd. But he is a fierce negotiator. When defending social safety net programs, particularly those like Medicaid that help the poor, he morphs into a warrior, Republicans say, though he has proved willing to make concessions." Carol Gay Stolberg in The New York Times.

Explainer: Six facts on Jack Lew.

The best part about a Treasury Secretary Lew: His loopy signature will go on the dollar bill.

KLEIN: Where are the White House's new voices? "President Obama’s personnel strategy has changed over the years. When he first took office, his hiring choices were notable for the wide net he cast..But after that initial burst of hiring, Obama has shown a clear preference for what some allies call 'line-of-sight promoting.'...The fact is that the White House has not named an actual outsider to their economic team since taking office." Ezra Klein in The Washington Post.

@bdomenech: Jack Lew is one of the most partisan, most ideological members of the Obama team. Represents escalation of acrimony.

CHAIT: The new Cabinet game: block everything. "Now Lew is unacceptable because Republicans want to pick the person on both sides of the negotiating table. It is remarkable how the unstated standard of cabinet acceptability seems to be shifting before our eyes. The basic assumption is no longer that the president needs only to appoint people who are broadly qualified and not wildly more radical than himself. It’s that the cabinet represents a kind of middle ground between the president and the opposing party. Agreement with Obama on public policy issues is now a disqualification rather than a qualification." Jonathan Chait in New York Magazine.

@ObsoleteDogma: "Jack Lew is good at budget negotiations" isn't exactly disqualifying under "advise and consent".

CILLIZZA: Lew and the new President Obama. "President Obama’s pick of Jack Lew to replace Tim Geithner as the Treasury secretary is the latest in a rapid series of moves to reshape his Cabinet that provides a telling glimpse into the incumbent’s changing philosophic approach on the cusp of his second term...Fast forward four years, however, and Obama knows what (and who) he needs at each of these departments far better." Chris Cillizza in The Washington Post.

@damianpaletta: Geithner, financial market wiz, brought to Treasury to deal with financial crisis. Lew, budget wiz, brought over to deal with budget fight.

HUNT: Lew's number two. "When White House Chief of Staff Jack Lew is named Treasury secretary tomorrow, high-powered financial types say the selection of his deputy secretary will be crucial. President Barack Obama has been advised that it's important to name someone with expertise in global financial markets, an area where Lew has limited experience. The most oft-mentioned possibility is David Lipton, currently the first deputy managing director of the International Monetary Fund." Albert R. Hunt in Bloomberg.

Music recommendations interlude: Peter Gabriel, "Solsbury Hill," 1977.

Top op-eds

KLEIN: There's nothing crazy abut Biden 2016. "If Biden can’t quite match Obama’s policy chops, he has an ease with other politicians that the president hasn’t mastered. In negotiations, Obama’s policy-centric approach is arguably a hindrance, leading him to spend much of his time lecturing Republicans about the myriad ways in which they’re wrong. That Obama is often right on the policy merits doesn’t diminish Republican feelings that a trip to the Oval Office is a date with condescension. Biden produces different results. His success in negotiating with McConnell might be partly attributable to the Republican Party’s loathing of Obama -- repeatedly bypassing Obama in favor of his vice president is, after all, a kind of insult to the president -- but it’s also attributable to the fact that Republicans like Biden and feel he treats them fairly." Ezra Klein in Bloomberg.

KLEINBARD: An escape hatch on the debt ceiling. "[T]here is a plausible course of action, one that the president should publicly adopt in the coming weeks as his contingency plan should debt-ceiling negotiations falter. He should threaten to issue scrip — 'registered warrants' — to existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.’s could include federal employees, defense contractors, Medicare service providers, Social Security recipients and others." Edward R. Kleinbard in The New York Times.

DIONNE: Why some Republicans need to come around on gun control. "Absolutely nothing positive will happen on this issue unless a substantial number of Republicans insist that we act. And before you give up hope, it’s worth remembering that in 1994, 38 House Republicans supported the assault-weapons ban on a roll call in May, and 46 supported the crime bill, which included the ban, that eventually passed later in the year." E.J. Dionne in The Washington Post.

GLAESER: Why government spending cuts won't kill too many jobs. "[T]he U.S. is far enough along in its recovery that it can begin balancing its books. An impressive new series of papers has estimated the impact of public spending on jobs during the recession, and concluded that we can make moderate budget cuts without sending the economy into a tailspin...If we cut only $50 billion, this should mean 400,000 fewer jobs, and possibly less if the effect of public spending on employment is weaker today than it was during the recession. That’s a serious loss, but if private-sector job creation continues at its current annual rate of 1.9 million a year, private-sector growth could offset that loss in less than three months." Edward Glaeser in Bloomberg.

SOLTAS: Federal disaster-relief funding is a disaster. "The federal government currently treats disasters as unanticipated emergencies because it chronically underbudgets the programs that are meant to do the insuring, such as the Federal Emergency Management Agency. After leaving these programs short of money, Congress is forced to provide additional relief funds whenever disaster strikes. The first step in the right direction would be to reclassify FEMA spending as 'mandatory' rather than 'discretionary.'" Evan Soltas in Bloomberg.

MILLER: The U.S. is slipping in terms of economic liberty. "The foundations of economic freedom are weakening around the world, according to the 2013 Index of Economic Freedom, published today by the Heritage Foundation and The Wall Street Journal. Particularly concerning are the rise of populist 'democratic' movements that use the coercive power of government to redistribute income and control economic activity...The United States, ranked only 10th most free in the world this year, joins Ireland as the only advanced economies to have lost economic freedom five years in a row." Terry Miller in The Wall Street Journal.

In memoriam interlude: James M. Buchanan, Nobel laureate in economics.

Should we mint the coin?

Trillion-dollar coin a 'jackpot of jests.' "The proposal, which originated in economics and business blogs and has a vanishingly remote chance of happening, has won ample attention and garnered new controversy as Republicans and the White House seem to be headed for yet another standoff over a legal limit on the country’s debt — a fight that may come as soon as next month. On Wednesday, the idea of a trillion-dollar coin made it all the way to the White House." Annie Lowrey in The New York Times.

Minting a trillion-dollar coin? Idiotic. But that's the point. "I hate the platinum coin idea. But if there is no resolution of the debt ceiling through the legislative process, I hate some of the alternatives more...But ultimately, the platinum coin is an idiotic solution to an idiotic problem. Congress has given the Treasury a series of mutually exclusive instructions. If Congress can’t pass a debt ceiling increase, the choices that Obama and the Treasury face will all be bad ones." Neil Irwin in The Washington Post.

The worst objection to the platinum coin idea. "The NRCC is suggesting that you need $1 trillion worth of platinum to mint a $1 trillion platinum coin. For some bullion coins, that may be true—the coin is worth the value of the underlying metal...In the modern age, money can be worth more than the material used to make it. The trillion-dollar platinum coin would operate under the same principle — just on a much, much, much larger scale." Brad Plumer in The Washington Post.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already.

Study finds case for green stimulus

Solyndra stunk. But green stimulus didn't. "These are the conclusions Harvard University economist Joseph Aldy reaches in a new research paper on the economic and environmental effects of the Recovery Act, just published online by the Review of Environmental Economics and Policy...His top-line, and unsurprising, takeaway is that the green stimulus was worth it – perhaps not optimally cost-effective, but still important for both jobs and carbon, even if neither unemployment nor emissions levels are where America needs them to be today." Jim Tankersley in The Washington Post.

Read the study: "A Preliminary Review of the American Recovery and Reinvestment Act’s Clean Energy Package."

A chorus of voices to do something about emissions. "The U.S.'s record temperature for 2012, after a year of extreme weather, is increasing pressure on President Barack Obama to take further steps to curb emissions that many scientists and environmental groups say contribute to climate change. But congressional opposition and a sputtering economy all but rule out the prospect of sweeping legislation, leaving regulation as the most likely way the administration could try to curb greenhouse-gas emissions." Keith Johnson in The Wall Street Journal.

Oil imports keep falling. "The United States isn’t quite as reliant on foreign oil as it used to be. Imports of crude oil and other petroleum products are on pace to drop to 6 million barrels per day by 2014, according to new forecasts by the Energy Information Administration. That’s the lowest level since 1987. It’s also just half as much liquid fuel as the country was importing back in 2005, at 12.5 million barrels per day." Brad Plumer in The Washington Post.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already.

What the White House is planning on gun control

There could be executive action on gun control coming. "Vice President Biden vowed Wednesday that President Obama will use executive action where he can to help stop gun violence as part of  the White House’s response to the mass shootings in Newtown, Conn...Biden did not elaborate on the types of executive actions that Obama is considering." David Nakamura in The Washington Post.

How the Obama is working to build support for gun control. "The White House is working with its allies on a well-financed campaign in Washington and around the country to shift public opinion toward stricter gun laws and provide political cover to lawmakers who end up voting for an assault-weapons ban or other firearm restrictions. With President Obama preparing to push a legislative agenda aimed at curbing the nation’s gun violence, pillars of his political network, along with independent groups, are raising millions of dollars and mapping out strategies in an attempt to shepherd new regulations through Congress." Philip Rucker in The Washington Post.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already. 

New Mexico to expand Medicaid

NM will expand Medicaid. "A second Republican governor has agreed to carry out an expansion of Medicaid under President Barack Obama's health care reform law. New Mexico Gov. Susana Martinez announced her plans Tuesday...New Mexico's Medicaid expansion would add 208,000 people to the program, according to an analysis by the Urban Institute and the Henry J. Kaiser Family Foundation. The report projects New Mexico would spend $268 million on Medicaid through 2022, and the federal government would send $4.9 billion to the state." Jeffrey Young in The Huffington Post.

Maine is shrinking it. But by less than it wanted to. "The Obama administration will not allow Maine Gov. Paul LePage (R) to drop more than 37,000 low-income people from Medicaid, instead approving plans that will affect coverage for about 20,000 Mainers. President Obama's acting Medicare chief cited healthcare reform Monday in denying LePage's plan to eliminate coverage for parents whose incomes fall between the federal poverty level and 133 percent of that number. LePage also sought to cut insurance for 19- and 20-year-olds to save a total of $23 million." Elise Viebeck in The Hill.

Study says big changes coming to health industry in 2013. "President Obama's signature healthcare law will prompt major health-industry changes this year, according to a new study. Accounting firm PricewaterhouseCoopers (PwC) named seven aspects of the Affordable Care Act as part of its top-10 list of issues facing the healthcare industry in 2013. The study described a healthcare system in flux as a result of budgetary pressures, technological advancement, changes in consumer tastes and long-term questions about the viability of employer-based coverage." Elise Viebeck in The Hill.

Why we just can't stop talking about 'death panels.' "Dartmouth’s Brendan Nyhan has new research that looks at why the death panels won’t die. He finds that providing readers with a corrective information to dispel an Obamacare myth can actually strengthen belief in death panels...For high information Palin supporters though, the correction backfired: They appeared more likely to believe in death panels after reading the appended information, and have less favorable opinions of the Affordable Care Act." Sarah Kliff in The Washington Post.

Only the good die young. But also Americans in general. "Americans die younger and have more illnesses and accidents on average than people in other high-income countries—even wealthier, insured, college-educated Americans, a report said Wednesday...The study by the federally sponsored National Research Council and Institute of Medicine found the U.S. near the bottom of 17 affluent countries for life expectancy, with high rates of obesity and diabetes, heart disease, chronic lung disease and arthritis, as well as infant mortality, injuries, homicides, teen pregnancy, drug deaths and sexually transmitted diseases." Louise Radnofsky in The Wall Street Journal.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already.

Why the fine print of tax and financial regulation matters

IRS ombudsman says tax code needs overhaul. "Congress should simplify the tax code to ease the burden on filers, as well as take a hard look at the myriad tax breaks that cost nearly as much revenue as the government generates from individual income taxes, according to the Internal Revenue Service’s ombudsman...The analysis noted that Congress has made an average of more than one change to the code each day since 2001 and that taxpayers, 90 percent of whom pay experts to determine what they owe, spend a combined six billion hours a year trying to conform to the rules." Josh Hicks in The Washington Post.

Why the CRFB's new mortgage rule matters. "It is one of the most common sense regulations in the works by the government’s new consumer watchdog, but one that stands to radically change the nation’s housing market: the qualified mortgage rule. On Thursday, the Consumer Financial Protection Bureau will finalize the criteria that lenders will use to determine whether a borrower can repay a home loan. The rule is aimed at protecting consumers from some of the worst abuses of the mortgage meltdown but could make it more difficult or expensive for some home buyers to get a loan." Danielle Douglas in The Washington Post.

SEC enforcement chief stepping down. "Robert S. Khuzami, head of the Securities and Exchange Commission’s enforcement division for the past four years, announced Wednesday that he plans to leave the agency in two weeks. A former federal prosecutor, Khuzami is largely credited with restoring the reputation of a plodding unit that was ridiculed for its failure to detect Bernard Madoff’s massive Ponzi scheme or aggressively pursue financial misconduct on Wall Street." Dina ElBoghdady in The Washington Post.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already.

Education is changing

Schools get grades -- and a taste of their own medicine. "Schools long have graded students. Now they are being graded themselves, as a growing number of states assign them A-to-F scores to evaluate their performance...Modeled after an accountability program pioneered in Florida by then-Gov. Jeb Bush in the late 1990s, these systems gather reams of data, feed the numbers into complicated formulas and spit out letter grades. The formulas typically take into account test scores, graduation rates, attendance and progress among the lowest-achieving students." Stephanie Banchero and Caroline Porter in The Wall Street Journal.

Why it helps to have a degree in a recession. "Young adults have long faced a rough job market, but in the last recession and its aftermath, college graduates did not lose nearly as much ground as their less-educated peers, according to a new study. The study, published on Wednesday by the Pew Charitable Trusts, shows that among Americans age 21 to 24, the drop in employment and income was much steeper among people who lacked a college degree." Richard Perez-Pena in The New York Times.

Read: The study that says you should stay in college.

Have college prices stopped rising? Maybe. "The demand for four-year college degrees is softening, the result of a perfect storm of economic and demographic forces that is sapping pricing power at a growing number of U.S. colleges and universities, according to a new survey by Moody's Investors Service...[O]ne-third of the 292 schools that responded to Moody's survey anticipate that net revenue will climb in the current fiscal year by less than inflation." Michael Corkery in The Wall Street Journal.

Adorable animals interlude: Otter pup swim lessons. You can feel the "aww" already.

Et Cetera

Secretary Hilda Solis is done at Labor, but Holder will stay at JusticeSteven Mufson and David Nakamura in The Washington Post.

AIG says it's not going to sue. Thanks. Neil Irwin in The Washington Post.

Why can't businesses find qualified applicants, with so many unemployedCatherine Rampell in The New York Times.

"Fix the Debt," a front group for business interestsNicholas Confessore in The New York Times.

Are markets fearless? Less implied volatility now than at any time since June 2007Robin Wigglesworth, Arash Massoudi and Ralph Atkins in The Financial Times.

Study finds benefits from exports are unequally shared, go to biggest corporationsHoward Schneider in The Washington Post.

Gallup poll finds more Americans identifying as Democrats than RepublicansRachel Weiner in The Washington Post.

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

Wonkbook is produced with help from Michelle Williams.

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