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Wonkbook’s Number of the Day: 15 percent. That’s the reduction in the Congressional Budget Office’s forecast for health spending in 2020 it made this year versus three years ago. That’s a huge deal, because health care costs are the major driver of long-run structural deficits. Slowing health care cost inflation makes those a lot smaller.
Wonkblog’s Graph of the Day: See the historical trend for declines in teen birth rates.
Wonkbook’s Top 5 Stories: 1) A full rundown for the SOTU; 2) have we done enough budget-cutting?; 3) health care cost inflation slows; 4) Bipartisan Policy Center’s new immigration policy initiative; and 5) how business responds to green policy.
1) Top story: Everything you need to know for tonight’s State of the Union address
What time is the speech? 9 p.m. Eastern.
How will Obama’s first State of the Union address since re-election be different? “On Tuesday night, the president will address the nation and Congress on the state of the union. But many will watch as well for signs of the state of Barack Obama…As the president prepares to outline his second-term agenda, it is clear from these personal accounts as well as his public acts, like his bold Inaugural Address, that he has shown an assertiveness, self-possession, even cockiness that contrasts with the caution, compromise and reserve that he showed for much of his first term.” Jackie Calmes in The New York Times.
Watch: The 10 most memorable moments of State of the Union addresses. Sean Sullivan in The Washington Post.
Explainer: A history of State of the Union addresses. Chris Cillizza in The Washington Post.
Do Obama’s State of the Union goals have any hope of success? “Obama is likely to promote the same goals for the country that he did in last year’s address, a reflection of the fact that many of the major items on his agenda remain outstanding. More broadly, Obama is still working to strengthen the economy in the profound ways he describes, facing both short-term challenges — such as an unemployment rate stuck near 8 percent — and long-term challenges, like slow-growing wages and an anxious middle class.” Zachary A. Goldfarb in The Washington Post.
Explainer: Jon Favreau’s greatest rhetorical hits. New York Magazine.
The speeches don’t count for much, anyway. “Rarely have State of the Union addresses moved public opinion and rarely have they led to the kind of broad legislative accomplishments that presidents propose. For all the ritual and attention surrounding these speeches, the State of the Union is, well, sort of lame.” Nia-Malika Henderson and Felicia Sonmez in The Washington Post.
@RobinBew: Obama to use
#US SoU address to push for action on sequester. Still think there’s a chance of action, but cuts looking likely now.
Marco Rubio’s response to the SOTU is another leap on the Republican power ladder. “Sen. Marco Rubio plans to follow his prime-time response to the president’s State of the Union address with his own legislative push on education funding and help for small businesses—all part of a larger effort to build his image as a conservative leader with a bipartisan bent.” Neil King Jr. in The Wall Street Journal.
@ByronTau: Obama is going to do a call with Organizing for Action after the State of the Union, the group announced in an email.
Some Congresspersons wait hours for a five-second handshake. “For the people on the aisle, the State of the Union is a rare night when a low-ranking legislator can score both a TV appearance and a personal audience with the president.” David A. Fahrenthold in The Washington Post.
Explainer: There was a time when presidents weren’t obliged to say the State of the Union was “strong.“ Binyamin Appelbaum in The New York Times.
BLOOMBERG VIEW: Three things we want to hear. “In his second inaugural address, U.S. President Barack Obama offered a vague but appealing vision. Now it’s time for the more distinct and contentious translation…From our standpoint, Obama — and the nation — would be best served by focusing on challenges such as immigration, inequality and climate change.” Bloomberg View Editorial Board.
@thegoldfarb: Good timing for Obama’s State of the Union announcement of unilateral nuke cuts.
SEIB: Obama and the cloud of economic uncertainty. “Four times, President Barack Obama has stood in the well of the House of Representatives and delivered a State of the Union address—and four times, economic anxieties have largely overshadowed his efforts to push a broad agenda…A broader Obama agenda is fighting to break out, but the economy still hangs over all else.” Gerald F. Seib in The Wall Street Journal.
BROOKS: Carpe diem nation. “This future-oriented mentality had practical effects. For decades, government invested heavily in long-range projects like railroads and canals. Today, Americans have inverted this way of thinking. Instead of sacrificing the present for the sake of the future, Americans now sacrifice the future for the sake of the present.” David Brooks in The New York Times.
POSTREL: Obama, take on copyright in your address. “Locking up creative works for generations hampers the progress copyrights are supposed to encourage. And the retroactive extensions of the past few decades have convinced too many Americans that Washington cares more about corporate interests than about the public good…Americans don’t need today’s extreme copyrights to be creative. Neither do the citizens of the world. We need sensible protections that balance financial incentives with creative freedom.” Virginia Postrel in Bloomberg.
Music recommendations interlude: Bruce Springsteen, “Waitin’ on a Sunny Day,” 2003.
MOORE: Sequester scare-mongering. “Environmental groups, the welfare lobby and other big-government organizations are preparing a media blitz to warn Americans of the supposed catastrophic effects of the 5% cut in domestic spending…All this destruction from a five percent cut from agencies that got, on average, 20%-plus budget hikes over the past four years…This is, of course, the old ‘Washington Monument’ ploy. Whenever agencies are asked by Congress to pinch pennies, they shutter the most visible and popular programs in order to build voter opposition to the cuts.” Stephen Moore in The Wall Street Journal.
MATLOFF: Glut of foreign geniuses hurts U.S. “In the old days, the U.S. program for foreign-student visas helped developing nations and brought diversity to then white-bread American campuses. Today, the F-1 program, as it is known, has become a profit center for universities and a wage-suppression tool for the technology industry.” Norman Matloff in Bloomberg.
SARGENT: The GOP’s problem is bigger than Ted Nugent. “The problem lies in all the over-the-top stuff GOP lawmakers say regularly that isn’t quite crazy enough to earn widespread condemnation, as Nugent’s quotes have, but are still whacked out enough to encourage an atmosphere that helps keep millions of GOP base voters sealed off from reality. The problem is the perpetual winking and nodding to The Crazy that is deemed marginally acceptable – the hints about creeping socialism, the claim that modest Obama executive actions amount to tyranny, the suggestions that Obama’s values are vaguely un-American and that Obama is transforming the country and the economy into something no longer recognizably American, and so on — more so than the glaringly awful stuff that gets the media refs to throw their flags.” Greg Sargent in The Washington Post.
BERNSTEIN: How a balanced-budget amendment is an abdication. “What occurs to me is the contrast between the GOP gimmicks and Democratic efforts to, you know, actually get things done (on, say, immigration and guns) despite divided government…Find common ground, and get some of what you want, even if you can’t get it all. But that works only if you have real, substantive goals that you actually care about. More and more, it appears that many Republicans simply care much more about symbolic stands rather than substantive policy.” Jonathan Bernstein in The Washington Post.
Wonkbookmark interlude: “If this, then that,” ifttt.com.
2) Have we done enough budget-cutting?
Obama: We’ve done almost enough to reduce the debt. “When President Obama delivers his State of the Union address Tuesday evening, here’s one thing you won’t hear: an ambitious new plan to rein in the national debt. In recent weeks, the White House has pressed the message that, if policymakers can agree on a strategy for replacing across-the-board spending cuts set to hit next month, Obama will pretty much have achieved what he has called “our ultimate goal” of halting the rapid rise in government borrowing.” Lori Montgomery in The Washington Post.
Senate Dems unveil a sequester plan. “Senate Democratic leaders are closing in on a $120 billion package of tax increases on the affluent and targeted spending cuts that they say would be large enough to put off looming, across-the-board spending cuts to defense and domestic programs for 10 months. The package combines a new 30-percent minimum tax rate for income over $1 million with new limits on tax incentives for retirement once retirement saving reaches a certain level. The legislation would also eliminate some subsidies to agribusinesses and retain some targeted defense cuts.” Jonathan Weisman in The New York Times.
Pentagon readies budget ax. “[T]he Navy has made plans to scale back deployments that could affect rapid response to crises, the Air Force is preparing to curb flying hours for pilots, and the Army is planning to curtail training…In response to the budget problems, the Defense Department has imposed a hiring freeze, slowed spending on military contracts, restricted travel and ordered the layoff of 46,000 part-time workers. Nearly 90% of the 800,000 civilian workers in the Defense Department are facing temporary furloughs of up to 22 days if sequestration goes forward.” Dion Nissenbaum in The Wall Street Journal.
Explainer: 10 highlights from David Leonhardt’s new book, ‘Here’s the Deal,’ on the deficit negotiations. Ezra Klein in The Washington Post.
Meanwhile, with all this talk of debt and deficits, Congress misses a free lunch on infrastructure. “[W]e may be approaching the end of a five year period in which investing in the nation’s physical infrastructure has been something close to a free lunch. With interest rates near all-time lows and millions of construction workers unemployed, the last few years have been a time that it would have been a historical bargain for the United States to do upgrades to roads, bridges, and airports that will eventually need to take place anyway. It has been a political breakdown—in particular conservatives’ view of almost any non-defense federal spending as wasteful—standing in the way.” Neil Irwin in The Washington Post.
Journalist interlude: How to wish one a Happy Valentine’s Day.
3) Health care cost inflation is slowing
How slowing health care cost growth makes a huge difference in projected budget deficits. “A sharp and surprisingly persistent slowdown in the growth of health care costs is helping to narrow the federal deficit, leaving budget experts trying to figure out whether the trend will last and how much the slower growth could help alleviate the country’s long-term fiscal problems…The budget office now projects that spending on those two programs in 2020 will be about $200 billion, or 15 percent, less than it projected three years ago.” Annie Lowrey in The New York Times.
Obama has taken raising the Medicare age off the table. “President Obama won’t support raising the eligibility age for Medicare — an idea he had once embraced — White House press secretary Jay Carney said Monday. Carney said during his daily press briefing that Obama has ruled out raising the Medicare eligibility age from 65 to 67 as a way to slow healthcare spending and reduce the federal deficit.” Sam Baker in The Hill.
…And why he has. “[T]he cutoff for Medicare eligibility age has been under consideration repeatedly, giving health-care experts more time to run the numbers and parse their results. Their conclusion, essentially, was that raising the Medicare eligibility age is counterproductive: It cuts the deficit but raises national health spending as it moves seniors to more expensive insurance options. Some in the White House are simply more skeptical of the policy than they were two years ago.” Ezra Klein in The Washington Post.
Is the Affordable Care Act bad for the young? Ask them. “The actuarial firm Oliver Wyman recently looked at the case of a 25-year-old who earns $33,510, which puts her at 300 percent of the federal poverty line. Right now, she can buy a health insurance plan for $2,400 per year, or about 7.2 percent of her income. After health reform, the firm estimates that her premiums will increase by $785, now eating up 9.5 percent of her salary. The worry – for both the insurance industry and the Obama administration – is that young Americans will see the higher price tag and decide not to purchase coverage altogether. If that’s what happens, the insurance market could enter a death spiral.” Sarah Kliff in The Washington Post.
…Don’t worry kids. The ACA is a good deal. “The point of the Affordable Care Act for the young and the old, for the insured and the uninsured, is that it protects you. A young person making a rational calculation today to go without insurance and making a rational calculation next year to just pay the individual mandate and remain without insurance is going to be thankful indeed for the Affordable Care Act if they’re unexpectedly diagnosed with diabetes.” Ezra Klein in The Washington Post.
Medical fraud recoveries are rising significantly. “The Obama administration touted its progress Monday in cracking down on healthcare fraud, saying recoveries have hit an all-time high. The Health and Human Services Department and the Justice Department recovered a record $4.2 billion from healthcare fraud investigations last year. They’ve recovered a total of nearly $15 billion over the past four years — more than double the total recoveries in the previous four years.” Sam Baker in The Hill.
Coming soon: Major new health regulations. “The first would, among other provisions, create new standards for defining “essential health benefits” to be provided under the landmark law…The other rule moved to the White House for review involves parameters of programs designed to protect health insurers from financial losses. Those losses, administration officials contend, would likely be passed along to patients.” Ben Goad in The Hill.
…And in some good health news, teen births hit a new low. “The new figures from the Centers for Disease Control (CDC) show an 8 percent drop in teen births during that period. Just over three percent of 15- to 19-year-olds gave birth in that span. The teen birthrate peaked in 1991, researchers said.” Elise Viebeck in The Hill.
Hospitals work to prevent readmissions. “Hospital readmissions are miserable for patients, and a huge cost — more than $17 billion a year in avoidable Medicare bills alone — for a nation struggling with the price of health care. Now, with Medicare fining facilities that don’t reduce readmissions enough, the nation is at a crossroads as hospitals begin to take action.” Associated Press.
Something truly beautiful interlude: What happens when you try to project a movie onto falling snow.
4) BPC launches immigration initiative
The Bipartisan Policy Center’s push on immigration reform goes live. “A high-profile new bipartisan group is forming to pressure Congress to overhaul the nation’s immigration laws, including former Secretary of State Condoleeza Rice, the Washington-based Bipartisan Policy Center announced Monday. The group will also be led by former Housing and Urban Development Secretary Henry Cisneros, as well as former Mississippi Gov. Haley Barbour (R) and former Pennsylvania Gov. Ed Rendell.” Rosalind S. Helderman in The Washington Post.
Meet the GOP’s immigration-policy moneyman. “Carlos Gutierrez eventually rose to become chief executive of Kellogg and President George W. Bush’s commerce secretary. But now he worries for the country’s 11 million undocumented immigrants and is putting his reputation, his energy and his connections behind a new effort to give them a shot at the opportunities he’s enjoyed.” Suzy Khimm in The Washington Post.
Is the immigration cap a drag on American manufacturing? “[I]n the American heartland, US companies are struggling to recruit the engineers and researchers they need to innovate and remain globally competitive. There are not enough US-born candidates for these jobs and not enough visas for highly skilled foreigners.” Anna Fitfield in The Financial Times.
Rep. Gutierrez invites illegal immigrant to State of the Union. “Luis Gutierrez announced Monday that he’s invited Gabino Sanchez, a South Carolina man who is fighting deportation from the United States, to attend the speech. Gutierrez has been working on behalf of Sanchez to help him secure legal residency in the United States, accompanying him to three Immigration and Customs Enforcement appointments.” Rosalind S. Helderman in The Washington Post.
The link you’re going to send to everyone right now interlude: A time lapse of a Boston street in the blizzard.
5) How climate regulations affect businesses
Businesses are contemplating conservation in response to climate regs. “Businesses are weighing how to prepare for potential new rules on climate change, after President Barack Obama has repeatedly promised to make the issue a priority in his second term…In the energy sector, some businesses, especially those heavily invested in carbon-intensive power sources, stand to lose if the government acts aggressively to curb greenhouse-gas emissions. Others, including firms that sell alternative energy or gear to clean up existing power plants, sense an opportunity.” Keith Johnson in The Wall Street Journal.
Why the fight over LNG exports may be overblown. “In a policy memo written last week, energy committee staffers pointed out that many analysts now believe U.S. natural-gas exports will peak at around 5 to 8 billion cubic feet per day in the coming decade…And that figure appears to be amenable to many on both sides of the debate — including some petrochemical companies who have long worried that natural-gas exports could drive up the price of a crucial feedstock” Brad Plumer in The Washington Post.
The boom in oil drilling hasn’t lowered gas prices. “The big thing to remember is that oil prices are a function of both supplyand demand. If world demand for oil rises faster than producers can pump the stuff out, prices will go up. And that’s what is happening now. As James Hamilton of UC San Diego explains, China alone has consumed about half of the extra oil that’s been drilled since 2010.” Brad Plumer in The Washington Post.
Awards interlude: All the ‘Best Picture’ winners, Oscarized.
The GOP’s Wall Street budget gimmick. Suzy Khimm.
The political science of papal elections. Dylan Matthews.
Fewer Americans want fries with that. Sarah Kliff.
The GOP’s pro-immigration mogul. Suzy Khimm.
Why we might not need to fight about LNG exports. Brad Plumer.
10 notes on Leonhardt’s ‘Here’s the Deal.’ Ezra Klein.
Longread for Tuesday morning: Why the GOP is and will remain the party of white people. Sam Tanenhaus in The New Republic.
Very important remarks from the Fed’s vice chairman Janet Yellen. Pedro da Costa and Janet Lange in The Washington Post.
Small Business Administration chief Karen Mills is stepping down. Emily Heil in The Washington Post.
Farm income expected to be highest in 40 years. Mark Peters in The Wall Street Journal.
Wonkbook is produced with help from Michelle Williams.