Wonkbook: The sequester stops being polite and starts getting specific

February 25, 2013

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Wonkbook's Numbers of the Day: 11 out of 30. That's the number of the top recipients of defense-industry campaign contributions in the House in 1990 who actually remain there today. If you're wondering why the sequester cuts might happen, one good explanation is that the loudest voices defending defense spending have fallen silent. 


(AFP PHOTO / Files / Jewel SAMAD)

Wonkblog's Graph of the Day: The statistical impact of winning an Oscar on the marriage of the winner, a.k.a the "Oscar curse."

Wonkbook's Top 5 Stories: 1) More sequestration details are emerging; 2) Senate is almost there on gun control; 3) the success of government in health care reform; 4) who has momentum on immigration reform; and 5) the Fed plans its exit.

1) Top story: How the sequester hits you

Agencies are spelling out the cuts under sequestration. "If they are not reversed, federal spending at the discretion of Congress will eventually fall to a new five-decade low. Cuts of even larger size are scheduled to take effect every year over the next 10, signaling an era of government austerity. By the end of this week, federal agencies will notify governors, private contractors, grant recipients and other stakeholders of the dollars they would be about to lose." Jonathan Weisman and Annie Lowrey in The New York Times.

...And the White House has done a state-by-state breakdown. "The White House on Sunday detailed how the deep spending cuts set to begin this week would affect programs in every state and the District, as President Obama launched a last-ditch effort to pressure congressional Republicans to compromise on a way to stop the across-the-board cuts." Zachary A. Goldfarb and Paul Kane in The Washington Post.

@CitizenCohn: If the sequester goes through, next year the Oscars will be 10 percent shorter.

Here's a plan to manage the sequester you are likely to hear more about this week. "Already looking past the current budget impasse gripping the capital, congressional leaders are quietly considering a deal to avert a government shutdown next month—but at the cost of prolonging across-the-board spending cuts...Senior aides to House Speaker John Boehner (R., Ohio) and Senate Majority Leader Harry Reid (D., Nev.) have begun discussing a bill being prepared by House Republicans to fund government operations through September. Republicans want the bill to extend operating funds at the lower levels set to kick in Friday and to give more flexibility to the Pentagon to manage its cuts." Janet Hook and Peter Nicholas in The Wall Street Journal.

In weekly address, Obama called on GOP to compromise on sequester. "'They will eliminate good jobs,' Obama said. 'They will leave many families who are already stretched to the limit scrambling to figure out what to do.'" Bernie Becker in The Hill.

@noamschieber: Arguing that sequester was Obama's idea like saying it was your idea to give wallet to mugger when he said, "your money or your life."

But both sides miscalculated. "With Congress unlikely to stop deep automatic spending cuts that will strike hard at the military, the fiscal stalemate is highlighting a significant shift in the Republican Party: lawmakers most keenly dedicated to shrinking the size of government are now more dominant than the bloc committed foremost to a robust national defense, particularly in the House. That reality also underscores what Republicans, and some Democrats, say was a major miscalculation on the part of President Obama." Jonathan Weisman and Ashley Parker in The New York Times.

The big quester gamble: How badly will it hurt? "Over the past week, President Obama has painted a picture of impending disaster, warning of travel delays, laid-off firefighters and pre-schoolers tossed out of Head Start. Conservatives accuse Obama of exaggerating the impact, and some White House allies worry the slow-moving sequester may fail to live up to the hype...Obama is betting Americans will be outraged...But if voters react with a shrug, congressional Republicans will have won a major victory in their campaign to shrink the size of government. Instead of cancelling the sequester, the GOP will likely push for more." Lori Montgomery and Paul Kane in The Washington Post.

@jonathanweisman: I am beyond incredulous that DC is still arguing over the provenance of the sequester days before it hits. This is why everyone hates us.

But when you ask them, Americans aren't big fans of cutting government spending. "A new survey from the Pew Research Center finds that most Americans like the idea of cutting federal spending in the abstract — they just can’t agree on any specific areas they’d actually like to cut." Brad Plumer in The Washington Post.

We're about to cut defense spending because the hawks are all gone. "The defense industry is in the fight of its life, but many of its longtime champions on Capitol Hill are retired, dead or in jail. Of the 30 largest House recipients of defense industry campaign donations since the 1990 election cycle, only 11 are still serving in Congress...It’s the same story in the Senate, where 14 of the top 30 recipients over the same time period still serve...And many observers admit that the remaining industry defenders aren’t the defense giants who once walked the halls of Congress." Darren Samuelsohn and Anna Palmer in Politico.

@robertcostaNRO: This sequester fight is playing out like so many recent dramas. House acts, but long before deadline. Sen waits. Pressure builds, then deal.

Congress is getting a taste of its own austerity. "[T]he reductions would hit their individual offices, as well as all legislative-branch agencies such as the Library of Congress, the Congressional Budget Office and U.S. Capitol Police." Josh Hicks in The Washington Post.

KLEIN: Should Democrats learn to stop worrying and love the sequester? "[I]f we’re not going to turn it off, then we need to think about it, and the possible replacements, a bit more clearly. Because right now, Republicans and Democrats are thinking about the sequester — and most all budget deals — all wrong...Washington’s developed a very stupid, but very simple, way to score budget fights. Since the easy gloss on the DC debate is that Democrats want taxes and Republicans want entitlement cuts, both parties have adopted a simple shorthand for judging budget deals: What’s the ratio of spending cuts to tax increases?" Ezra Klein in The Washington Post.

BLINDER: A deficit 'Silver Linings Playbook.' "Despite seemingly unending political battles, Congress and the president have managed to agree on several measures that reduce the projected 10-year deficit considerably. In addition, the Congressional Budget Office has quietly lowered its deficit projections, in part due to changes in the underlying economic forecast and in part due to changing cost estimates for health care and other items." Alan S. Blinder in The Wall Street Journal.

Music recommendations interlude: Eric Clapton, "Running on Faith," 1989.

Top op-eds

DIONNE: The miracle on guns. "A not-so-small miracle is unfolding before our eyes. After nearly two decades in which established opinion insisted that it would never again be possible to pass sensible regulations of firearms, the unthinkable is on the verge of happening...The fact that [Obama] and Biden have refused to let the issue fade away has also made a difference." E.J. Dionne in The Washington Post. 

THALER: How we could still reform healthcare. "A fee for health rather than fee for service model. Doctors and hospitals should be paid for keeping their patients well. Paying them for doing more tests and surgeries creates bad incentives...A requirement that all patients meet with their doctors or trained end-of-life counselors and prepare living wills." Richard H. Thaler in The New York Times.

DOUTHAT: A world without work? "[T]he decline of work isn’t actually some wild Marxist scenario. It’s a basic reality of 21st-century American life, one that predates the financial crash and promises to continue apace even as normal economic growth returns. This decline isn’t unemployment in the usual sense, where people look for work and can’t find it. It’s a kind of post-employment, in which people drop out of the work force and find ways to live, more or less permanently, without a steady job. So instead of spreading from the top down, leisure time — wanted or unwanted — is expanding from the bottom up. Long hours are increasingly the province of the rich." Ross Douthat in The New York Times.

STEVENS: GOP renewal must go beyond Twitter. "Barack Obama was able to forge a powerful community in 2008 because of his message. Technology conveyed that message to millions, nurtured it and help harvest their votes. But he didn’t win because he won the Facebook wars; he won the Facebook wars because he was winning. For Republicans, this can’t be an either/or choice. We need to be omnivorous in our development and consumption of new technology tools and relentless in our dedication to speak for the majority of Americans. One without the other will fail." Stuart Stevens in The Washington Post.

SUNSTEIN: When presidents act on their own. "All presidents find that the national legislature is unwilling to enact some of their highest-priority proposals. But existing law also grants the executive branch a lot of power to act on its own. In exercising that power, presidents hardly 'bypass Congress.' On the contrary, they act because a previous Congress has authorized them to do just that." Cass R. Sunstein in Bloomberg.

PHELPS: The inequality-innovation relationship. "One source of the outsize inequalities in America is the dynamism that made economic activity so rewarding. An economy open to new concepts and novel ventures is bound to generate unequal gains. To tax all of those gains would close off the prospects for success that many entrepreneurs need if they are to undertake ambitious ventures — a big mistake. But it would also be a mistake to misunderstand the relation of inequality and innovation. It is less innovation — not more — that has widened inequality in the United States in recent decades." Edmund S. Phelps in The New York Times.

Adorable animals interlude: These 21 animals have strong feelings about the sequester.

2) Almost there on gun control

Senate close to a deal on background checks for private gun sales. "A bipartisan group of senators is on the verge of a deal that would expand background checks to all private firearms sales with limited exemptions, but significant disagreements remain on the issue of keeping records of private gun sales, according to aides familiar with the talks." Ed O'Keefe in The Washington Post.

But there's still time to snatch defeat from the jaws of victory. "Sen. Tom Coburn (R-Okla.) said Sunday that a bipartisan Senate group he belongs to isn’t 'that close' to striking a deal to expand background checks on gun sales, citing a remaining disagreement over keeping records." Sean Sullivan in The Washington Post.

Meanwhile, the House GOP is showing some unusual flexibility. "The Republican chairman of the House Judiciary Committee said Friday that he's interested in writing legislation this year improving background checks for gun buyers and cracking down on illegal firearms sales. In an interview, Rep. Bob Goodlatte, R-Va., provided little detail about his plans. But he said the federal background check system should be fixed to make sure more people with serious mental illnesses don't get firearms." The Associated Press.

Historical interlude: Old, beautiful photos of New South Wales, Australia during its gold rush in the 1870s.

3) Government trying, and succeeding, on medical costs

Florida becomes a Medicaid pioneer. "Almost overnight, Florida has gone from being an ardent opponent of the federal health care law to a laboratory for one of the law’s most ambitious experiments. But if state lawmakers back Gov. Rick Scott's plan to expand Medicaid, it will be an experiment with a determinedly free-market twist. Scott’s turnabout on the Medicaid expansion came a few hours after the federal government tentatively approved his application to fully privatize the federal-state program for the poor." Phil Galewitz in Kaiser Health News.

Big insurance rate hikes are becoming rarer. "The number of double-digit rate increases requested by health insurers has plummeted over the past four years, according to a Friday report from the Obama administration. Researchers combed through data available from the 15 states that publicly post all requests for rate increases in the individual market. They found that, in 2009, 74 percent of all requests came in above 10 percent. By 2012, that number had fallen to 35 percent. Preliminary data for 2013, which only cover a handful of states, shows 14 percent of rate increases asking for a double-digit bump." Sarah Kliff in The Washington Post.

And the politics of less-out-of-control health costs. "One shift is the shrinking magnitude of the Medicare spending problem — a consequence, at least for now, of a recent slowdown in the rise of health care costs. That diminishes the willingness of Congressional Democrats, and perhaps the administration, too, to accept the sort of Medicare curbs that Mr. Obama has indicated that he favors...As a result, Mr. Obama’s ability to deliver a bipartisan compromise on entitlement spending may be waning even as Republicans edge closer to one." John Harwood in The New York Times.

How to summarize Steven Brill's 26k-word healthcare story into one sentence. "Steven Brill started his cover story in this week’s Time magazine with a simple health-policy question: 'Why exactly are the bills so high?' His article is essentially a 26,000-word answer, the longest story that the magazine has ever run by a single author. It’s worth reading in full, but if you’re looking for a quick summary, the article seemed to me to boil down to one sentence: The American health-care system does not use rate-setting." Sarah Kliff in The Washington Post.  

Urban interlude: These apartments are so small they can only be photographed from the ceiling

4) Immigration reform update

On immigration reform, roadblocks are emerging. "The push for immigration reform on Captiol Hill has been in overdrive thus far in 2013, but last week’s recess serves as a reminder — if one was needed — that the issue is far from settled. On the face of things, there’s plenty of momentum in Congress: The Senate Gang of Eight hopes to have a bill by mid-March; labor and business groups agreed on basic principles for low-skill workers; and a series of congressional hearings on the topic already have begun in earnest. But momentum can change quickly, and last week saw signs of roadblocks for immigration legislation." Kate Nocera in Politico.

Have the politics of immigration reform improved since 2007? "More elected officials, from both sides of the aisle, seem to be publicly advocating a path to citizenship. To that extent that such arguments make their way to the public through the media, the shift may bode well for supporters of a plan that would allow undocumented workers to remain in the country." Danny Hayes in The Washington Post.

How the sequester will affect immigration. "Our immigration system is already plagued by protracted delays, red tape and limited resources, and sequestration would exacerbate some of those problems. ABC News singles out some of the many ways that the automatic budget cuts would hit our immigration system, affecting everything from visas to deportations." Suzy Khimm in The Washington Post.

That time Barack Obama helped kill immigration reform. "In a midnight session almost six years ago, then-Senator Barack Obama voted to gut a guest-worker program that sponsors of an immigration bill considered vital to their effort to legalize millions of undocumented residents. A few weeks later, the bipartisan measure was dead -- blocked from a final vote by Republicans who called it amnesty for lawbreakers and Democrats who said it would hurt American workers and treat immigrants unfairly." Julie Hirschfield Davis in Bloomberg.

Strange policy ideas interlude: The police ticket you get for doing good things.

5) Bernanke to talk to Congress this week

How monetary policy is helping the economic recovery. "Federal Reserve Chairman Ben S. Bernanke has something to tout before Congress in hearings this week: job growth in the auto and housing industries. Consumers rely on loans to buy cars and homes, so these segments of the economy are among the most responsive to Bernanke’s strategy of holding interest rates low and pressing on with bond purchases of $85 billion a month." Joshua Zumbrun and Steve Matthews in Bloomberg.

His next goal? Thread the needle on an exit from monetary stimulus. "Federal Reserve Chairman Ben Bernanke is preparing for a most sensitive task: telling jittery investors who have grown accustomed to the U.S. central bank's ultra-easy monetary policies that things will eventually have to change.Bernanke appears committed to the Fed's bond-buying stimulus right now. But the unprecedented communications challenge of laying groundwork for a shift in policy, while still assuring investors that rates will continue to stay low, could come in just a few months if the U.S. recovery continues apace." Jonathan Spicer and Ann Saphir in Reuters.

When the economy mends, will the Fed lose money? "The Federal Reserve’s plans for the eventual wind-down of its economic stimulus campaign could provoke a political reaction that will make it more difficult to control inflation, a current Fed official and a former Fed governor said Friday. When the economy grows stronger, the Fed plans to sell some of its vast holdings of Treasury and mortgage-backed securities. The Fed also plans to pay banks to leave some money on deposit with it to limit the pace of new lending." Binyamin Appelbaum in The New York Times.

Cats interlude: Edison filmed them boxing in 1894.

Wonkblog Roundup

The key to evaluating teachers: Ask the kidsDylan Matthews.

A summary of Steven Brill's mega-story on health care costsSarah Kliff.

How the voters moved the sequester goalposts in 2012Ezra Klein.

Immigration reform: readier now than in 2017? Danny Hayes.

How the sequester would make U.S. immigration yet more dysfunctionalSuzy Khimm.

Et Cetera

Here's a longread to start the week: Tod Lindberg on the new Left in Policy Review.

You can learn a lot about Obama's health reform plans on -- surprise! -- the White House website. Republicans should try sometimeJonathan Cohn in The New Republic.

How the CFTC killed IntradeGregory Meyer in The Financial Times.

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

Wonkbook is produced with help from Michelle Williams.

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Suzy Khimm · February 24, 2013