Welcome to Wonkbook, Ezra Klein and Evan Soltas’s morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.
Wonkbook’s Number of the Day: $982 billion. That’s the amount in federal spending the House wants to authorize in its continuing resolution, which goes up for a vote today. More below.
Wonkblog’s Graph of the Day: The long-term/short-term distinction is really important when talk about the economic impact of smaller fiscal deficits.
Wonkbook’s Top 5 Stories: 1) A vote on the continuing resolution; 2) disorder among Republicans on immigration policy; 3) the Dow sets a nominal high; 4) Paul Ryan’s latest Medicare ideas are yet more aggressive; and 5) the federal role in energy.
1) Top story: House votes on continuing resolution today
‘Snowquester’ pushes House vote on continuing resolution to today. “The House will convene at 10 a.m. and vote on final passage of the continuing resolution by no later than 1:30 p.m., according to GOP aides. No votes are scheduled for Thursday or Friday in the House. The Senate is still weighing whether to be in session Wednesday, with an announcement expected shortly.” Ed O’Keefe in The Washington Post.
Congress is optimistic it can pass a CR to avoid shutdown. “The House is scheduled to vote Wednesday on the $982 billion measure, which would ensure that the government remains open past March but allows the sequester to remain in place. It would provide new flexibility, mostly only to the Pentagon, which absorbed half of the $85 billion across-the-board cut, to manage the impacts of the reduction. Senate leaders indicated Tuesday that Democrats will most likely seek amendments to the continuing resolution after it passes the House to provide additional flexibility for domestic programs too. But both Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) indicated Tuesday that negotiations over amendments are going well.” Rosalind S. Helderman in The Washington Post.
@TPCarney: You thinking what I’m thinking? Congress gets snowed in. It forces them to cone together. They pass something bipartisan & awful.
Sen. Mikulski has some incremental solutions. “Senate Appropriations Committee Chairwoman Barbara Mikulski is picking up steam and bipartisan support in her bid to substantially expand on the six-month, stopgap spending bill House Republicans rolled out this week. The Maryland Democrat has scaled back her plans to substitute a governmentwide omnibus package and is focused instead on writing a hybrid bill that will include full-year budgets for at least several major Cabinet departments beyond Defense and Veterans Affairs.” David Rogers in Politico.
Obama’s new, big, behind-the-scenes push for a ‘grand bargain.’ “After more than two years of failed negotiations with GOP leaders, President Obama is for the first time reaching out directly to rank-and-file Republicans who have expressed a willingness to strike a far-reaching budget deal that includes higher taxes. In a flurry of meetings and phone calls over the past few days, Obama has courted more than half a dozen Republicans in the Senate, telling them that he is ready to overhaul expensive health and retirement programs if they agree to raise taxes to tame the national debt.” Lori Montgomery and Rosalind S. Helderman in The Washington Post.
@sam_baker: Congress is gonna call it a week on Weds. a.m. so there’s no chance of being at work when it might snow. Y’know, like any American worker
House Republicans are moving further right on spending… “[I]f you look beyond the rhetoric and focus on the policy, House Republicans are proposing much harsher spending cuts this year than they did last year. On fiscal issues, the party has moved far to the right since the election…That means that even as the party’s national tacticians try to move away from being the party of spending cuts, they’ll have even harsher and more dramatic spending cuts to answer for.” Ezra Klein in The Washington Post.
@noamscheiber: WSJ says Obama preparing to blame GOP if no deal on budget is evidence he doesnt want 1. But isnt it also a good strat if he *does* want 1?
…While House Dems retreat after opposing GOP budget bill. “House Democratic leaders have decided against uniting their party’s rank and file in opposition to a Republican spending bill that would fund the government. House Minority Whip Steny Hoyer (D-Md.) said the GOP’s continuing resolution (CR) both threatens the economy and violates the spending levels agreed to under the 2011 Budget Control Act (BCA). But in an acknowledgment that the Democrats are all but powerless to block the CR on the House floor, Hoyer said leaders would not pressure their troops to oppose it.” Mike Lillis in The Hill.
Where the sequester is being felt. “The schools are among 1,600 public schools on Native American reservations and military bases that are feeling the impact of federal cuts now, months before the rest of the country’s classrooms see the effect of reduced dollars from Washington…Leaders of schools on other reservations and military bases said they already reduced their current school budgets in anticipation of the sequester, letting job openings go unfilled, trimming professional development, dropping bus routes, cutting guidance counselors.” Lyndsey Layton in The Washington Post.
…One of those places is the White House. “The White House has canceled tours until further notice, the White House Visitors Office confirmed, citing sequester cuts…All tours for March 9 and onward have been canceled and will not be rescheduled due to ‘staffing reductions resulting from sequestration,’ the office says.” Rachel Weiner in The Washington Post.
Quick take: Where the sequester became absurd. Sarah Kliff in The Washington Post.
…And where the sequester will be slow to bite. “Furloughs for government meat inspectors are months away, Agriculture Secretary Tom Vilsack said Tuesday, and disruptions related to spending cuts would be staggered if the government pulled back on inspections…Mr. Vilsack’s comments, made at a congressional hearing, are the latest example that disruptions caused by the automatic spending cuts known as the sequester, which went into effect on March 1, may be slow-moving.” Bill Tomson in The Wall Street Journal.
It’s the same at EPA. “The Environmental Protection Agency on Monday formally notified its employees of planned furloughs of up to 13 discontinuous days, a number in the mid-range of what agencies have announced to date in response to sequestration…The notices trigger a 30-day waiting period before the unpaid time can begin.” Eric Yoder in The Washington Post.
KLEIN: A smart way to avoid sequestration. “To White House aides, the Republican stance on taxes at this point is more of a religious creed than a policy argument. They’re right about that. But the Democratic obsession with a balanced deficit-reduction package occasionally flirts with the same mistake, in reverse.” Ezra Klein in Bloomberg.
SULLIVAN: Learning to live with a ‘wait-and-see’ attitude on sequestration. “The public is divided over the projected impact of the deep federal spending cuts that began kicking in on Friday, two surveys taken since that time show. Among those with an opinion, the cuts are viewed more negatively. But a substantial part of the public remains on the fence about their projected impact.” Sean Sullivan in The Washington Post.
BARTLETT: The worst possible way to cut spending. “Contrary to popular belief, Democrats don’t disagree that many programs could be cut substantially without harming government’s core mission. The problem is twofold. First, they disagree with Republicans on which programs are wasteful. Second, Republicans tend to believe that any program they disagree with, philosophically, is, per se, money wasted.” Bruce Bartlett in The New York Times.
Music recommendations interlude: The Alan Parsons Project, “Games People Play,” 1980.
ORSZAG: The diploma gap between rich and poor. “When people get more education, they become more productive and help strengthen the entire U.S. economy. So it is discouraging to see that students from wealthy families are increasingly more likely to graduate from college than are those from poor families. This perpetuates inequality from one generation to the next and limits the economic benefits that could come if a wider swath of the population earned college degrees. The widening gap in college completion rates is documented in a paper by economists Martha Bailey and Susan Dynarski of the University of Michigan. Looking at children born in the early 1960s, the researchers found that only 5 percent of children from families in the lowest-income quartile completed college, while 36 percent of those from families in the highest-income quartile did.” Peter Orszag in Bloomberg.
PORTER: The best way to save money on retirement programs. “[W]hat if there were a way for the government to ease the strain that the aging place on the budget while actually increasing their income in retirement, at little or no cost to their benefits? A well-designed reform would even improve the nation’s rate of economic growth. The way to do it is simply to encourage older workers to spend a larger share of their increasing life spans in the work force.” Eduardo Porter in The New York Times.
GENACHOWSKI: The broadband engine of economic growth. “As Washington continues to wrangle over raising revenue and cutting spending, let’s not forget a crucial third element for reining in the deficit: economic growth. To sustain long-term economic health, America needs growth engines, areas of the economy that hold real promise of major expansion. Few sectors have more job-creating innovation potential than broadband, particularly mobile broadband.” Julius Genachowski in The Wall Street Journal.
SARGENT: Another fight over the debt ceiling? “Believe it or not, it’s already time to start posing that question. Remember, the temporary authorization of the debt ceiling hike House Republicans agreed to came in mid January, and it was a three month extension. That means we’ll be needing to raise the debt ceiling again next month.” Greg Sargent in The Washington Post.
SAMUELSON: The Amtrak fantasy. “The reality is that Amtrak has been a waste of taxpayer money since its creation in 1970. It doesn’t significantly reduce congestion, fuel use or greenhouse gases. Amtrak is too small to have any appreciable effect in any of these areas…If Amtrak vanished, hardly anyone would notice except Amtrak’s workers and its small number of daily riders.” Robert J. Samuelson in The Washington Post.
New York, New York interlude: Beautiful, old, large photos of the city on this Tumblr.
2) Republican disorder on immigration policy
Republicans split on citizenship question. “Jeb Bush’s newly announced opposition to giving illegal immigrants a shot at U.S. citizenship laid bare a fundamental tension among Republicans as they try to find their comfort zone on the divisive issue. Democrats have largely pushed to include a path to citizenship in the latest campaign to overhaul immigration laws, and while some Republicans want to embrace that position, others would prefer to create a new class of immigrants who would be granted legal residency but have little chance of becoming full citizens.” Sara Murray in The Wall Street Journal.
Jeb Bush is back in the spotlight — and thinking about 2016. “He has long favored giving illegal immigrants a chance to gain citizenship and has frequently voiced concern that Republicans who expressed a more restrictive view were alienating Hispanic voters. The position he lays out in his book puts him more in line with his party’s base — the kind of thing a potential presidential contender would be mindful of. The shift stunned even Bush’s closest allies and suddenly put the former governor out of step with many Republicans, including a fellow Miamian, Sen. Marco Rubio (R), who has been trying to push the GOP toward a citizenship plan.” Peter Wallsten and David Nakamura in The Washington Post.
Explainer: A helpful summary of the ideas in Jeb Bush’s new book, “Immigration Wars.” Suzy Khimm in The Washington Post.
WonkTalk: Jeb Bush’s flip-flop on immigration. Dylan Matthews and Suzy Khimm in The Washington Post.
Senate GOP reaffirms stance, shrugs off Jeb Bush. “Senate Republicans involved in touchy negotiations to overhaul immigration laws reaffirmed their commitment Tuesday to establishing a path to citizenship for those now living in the United States illegally — despite a surprising defection on the key issue from former Florida Gov. Jeb Bush. But two key members of that group acknowledged for the first time Tuesday that they may not have a bill ready to introduce until April, after Congress’s two-week Easter recess. The eight-member group had been aiming to advance a bill in March.” Rosalind S. Helderman in The Washington Post.
Old skills interlude: Ropemaking in Britain.
3) Dow sets nominal record
The Dow set a record yesterday. “The Dow Jones Industrial Average jumped to a record Tuesday, marking a key milestone in the long slog to recovery from the financial crisis. Stocks rose from the opening bell and held most of their gains for the rest of the day. The Dow finished at 14253.77, topping the previous record set in October 2007. With Tuesday’s gain of nearly 126 points, the Dow has more than doubled since its nadir in March 2009 and is already up 8.8% for 2013.” Tom Lauricella in The Wall Street Journal.
…But the high is fake. “Huzzah! Or not. That number doesn’t adjust for inflation. As CNBC’s Jeff Cox writes, “in inflation-adjusted dollars, the Dow would need to hit 15,731.54 to break the record.” In fact, in inflation-adjusted terms, the Dow is still well below it’s 2000 high.” Ezra Klein in The Washington Post.
Businesses are reporting expansion. “American service companies grew in February at the fastest pace in a year, buoyed by higher sales, more new orders and solid job growth. The gain suggests higher taxes have yet to slow consumer spending on services. The Institute for Supply Management said on Tuesday that its index of nonmanufacturing activity rose to 56 in February from 55.2 in January. Any reading above 50 indicates expansion.” The Associated Press.
College grads see lower unemployment, even when young. “If you look at all recent college graduates in their 20s, the unemployment rate drops sharply. It is especially impressive when compared with the jobless rate for all high school graduates in the same age group…[T[he unemployment rate for people in their 20s with college degrees or more education was 5.7 percent (for those whose highest credential was no more than a bachelor’s, the number was 5.8 percent). For those with only a high school diploma or G.E.D., it was more than twice as high, at 16.2 percent.” Catherine Rampell in The New York Times.
Meanwhile, housing continues to improve. Thank the ‘short sale.’ “The number of American homes that end up in foreclosure has started to decline, a welcome development that partly reflects an improving housing market. But a look at data that tracks distressed home sales reveals another reason why foreclosures are becoming less prevalent: More homeowners are turning to so-called short sales—where they sell their homes for less than what they owe in mortgage debt and the bank typically eats the difference.” Conor Dougherty in The Wall Street Journal.
…But why has Congress left housing to Fannie and Freddie? “Here’s how strange things have gotten in the world of housing finance. Fannie Mae and Freddie Mac, along with their regulator, are doing more to dismantle themselves than Congress can be bothered to do. Monday their regulator, Ed DeMarco of the Federal Housing Finance Agency, said that a new company will be formed that will do much of the back-office work of both firms, setting the stage for whatever Congress decides to do next to overhaul the mortgage sector.” Neil Irwin in The Washington Post.
My father’s eyes, and his father’s, and… interlude: The facial evolution of the human species.
4) Paul Ryan is getting more ambitious on Medicare
Paul Ryan proposes to fast-forward on Medicare changes. “Ryan — the House Budget Committee chairman — has privately been floating the idea of allowing his changes to Medicare to kick in for Americans younger than 56. In previous budgets, those 55 and older were exempted from his plan to turn Medicare into a premium-support — or voucher — program.” Jake Sherman and Jonathan Allen in Politico.
Some Republicans are opposing it. “House Republican leaders, faced with the daunting task of writing a budget that would eliminate deficits within 10 years, are backing away from a proposal to revamp Medicare for more Americans than previously suggested. House GOP centrists are balking at the idea, and in a meeting with them Tuesday, Mr. Ryan said he would leave it to his party colleagues to decide whether to raise the age cutoff to 56—or even higher—in the budget for the fiscal year that starts Oct. 1 that he is unveiling next week, according to a GOP aide familiar with the meeting.” Janet Hook, Kristina Peterson, and Corey Boles in The Wall Street Journal.
Florida might not expand Medicaid after all. “When Florida Gov. Rick Scott endorsed the Medicaid expansion last month, it was a huge turnaround: He had initially been one of the health law’s harshest critics. While that was a major moment for the Affordable Care Act, it did not secure the Sunshine State’s participation in a Medicaid expansion expected to cover 1.3 million Americans. One less-noticed factor in Florida — or in any other state — is that it’s not just the governor who has to get on board with expanding Medicaid. The state legislature generally has to sign off on the program and authorize the new spending it would entail.” Sarah Kliff in The Washington Post.
The GOP doesn’t want provider cuts to health spending. “Key Republican lawmakers reassured hospitals Tuesday that they would not push to overhaul Medicare’s flawed doctor payment formula with more provider cuts. Reps. Kevin Brady (R-Texas) and Charles Boustany (R-La.) said structural changes to Medicare should help pay to repeal Medicare’s sustainable growth rate (SGR), a major priority in the healthcare world.” Elise Viebeck in The Hill.
There’s no precedent for dialing back Medicaid dollars. “Legally, there’s nothing to stop them: Congress could pass a law that fiddles with these numbers. But such a move would, it turns out, be unprecedented. At least in the Medicaid program, there just isn’t a history of the federal government “dumping” new spending on the states.” Sarah Kliff in The Washington Post.
The link you’re going to send to everyone right now interlude: Mind-blowing kinetic art.
5) Government and energy intersect
Longread: How about a longread to start Thursday? We thought so. Read Vince Beiser on the oil-and-gas boom in Pacific Standard.
The several-fronts strategy on climate change begins at Energy and EPA. “Now that President Obama has selected his top climate and energy policymakers, having nominated Massachusetts Institute of Technology physicist Ernest Moniz as energy secretary and Environmental Protection Agency air and radiation administrator Gina McCarthy to head EPA, the question still looms: how much can they get done using executive authority alone? The answer: quite a lot, but it will involve taking some political risks. So here’s a list of some of the options McCarthy and Moniz will take, assuming both of them win confirmation.” Juliet Eilperin in The Washington Post.
Oil-and-gas production is rising, but it’s no thanks to the feds. “The study by the nonpartisan CRS concluded that while overall United States oil-and-gas production has increased since 2007, it has declined considerably on federal lands. The findings play into GOP arguments that the domestic U.S. energy boom has occurred in spite of Obama. They have urged the White House to loosen restrictions on energy drilling in hopes of driving economic activity, generating federal revenues and creating jobs.“ Zack Colman in The Hill.
Reading material interlude: The best sentences Wonkblog read today.
How to punish robots when they inevitably turn against us. Dylan Matthews.
Arkansas bill would outlaw one out of ten abortions. Sarah Kliff.
Why the Dow Jones’ latest high is fake. Ezra Klein.
No precedent for feds to dial back Medicaid dollars. Sarah Kliff.
Where the sequester debate turned for the absurd. Suzy Khimm.
Why has Congress left housing to Fannie and Freddie? Neil Irwin.
FL might not expand Medicaid after all. Sarah Kliff.
GOP moves further right on spending. Ezra Klein.
A summary of Jeb Bush’s new book. Suzy Khimm.
WonkTalk: Jeb Bush’s immigration flip-flop. Suzy Khimm and Dylan Matthews.
Gun advocates split with NRA over background checks. Tom Hamburger and Sari Horwitz in The Washington Post.
Boehner: I will return soon to ‘Hastert rule.’ Russell Berman in The Hill.
After sequester, Obama approval rating wiggles lower. Aaron Blake in The Washington Post.
House centrists want to eliminate the straight ticket party voting option. Pete Kasperowicz in The Hill.
More and more Americans work remotely. Neil Shah in The Wall Street Journal.
Wonkbook is produced with help from Michelle Williams.