Wonkbook: Everything you need to know about the Senate Democrats’ budget

March 14, 2013

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Wonkbook's Number of the Day: $975 billion. That's the total amount Senate Democrats want to raise in new tax revenues over 10 years. Much more below. 


(Photo by Melina Mara/ The Washington Post)

Wonkblog's Graph of the Day: Domestic migration within the U.S., July 2011 to July 2012.

Wonkbook's Top 5 Stories: 1) A primer on the Senate Democrats' budget; 2) Obama visits House Republicans; 3) Ohio weighing Medicaid expansion; 4) strong economic data on retail sales; and 5) a wonk's guide to the papacy.

1) Top story: Everything you need to know about the Senate Democrats' budget

The Senate's Democrats release their budget proposal. "The Senate budget plan, drafted by Sen. Patty Murray, D-Wash., blends about $1 trillion in modest cuts to health care providers, the Pentagon, domestic agencies and interest payments on the debt with an equal amount in new revenue claimed by ending some tax breaks. But because Democrats want to restore $1.2 trillion in automatic spending cuts over the same period — cuts imposed by Washington’s failure to strike a broader budget pact — Murray’s blueprint increases spending slightly when compared with current policies." The Associated Press.

Read: The Senate Democrats' 2014 budget, and the "Chairman's Mark" budget tables.

What the think tanks are thinking: Here's the latest from the Committee for a Responsible Federal Budget.

The Senate Democrats' tax ask: $975B. "Senate Democrats will propose raising $975 billion in new taxes over the next decade in the budget they will release this week, setting up a sharp contrast with a House Republican plan to balance the budget over 10 years without new tax increases...Her plan would raise $975 billion in new revenue in the next decade by closing tax breaks that benefit upper-income households and corporations." Kristina Peterson in The Wall Street Journal.

The spending cuts / tax increases ratio in the Democratic plan? One-to-one. "Senate Democrats called Wednesday for raising taxes by almost $1 trillion over a decade and reducing federal spending by the same amount...The Democrats' budget also includes their plan for replacing the across-the-board spending cuts, known as the sequester, that began March 1. The cuts would be replaced with a mix of new revenue, and other more-targeted spending reductions. The GOP budget plan would leave the sequester cuts in place." Kristina Peterson in The Wall Street Journal.

@mattyglesias: I see alleged “vagueness” of Murray budget as a virtue. Ryan routinely oversteps Budget Committee’s role.

...And the budget poses some challenges to Obama. "[A] big swath of Democratic lawmakers is digging in its heels and vowing to protest any reduction in promised benefits. That sentiment was on display Wednesday, as Senate Budget Committee Chairman Patty Murray (D-Wash.) announced a budget blueprint that proposes only minor trims to Medicare and Medicaid." Lori Montgomery in The Washington Post.

KLEIN: It's vague and conservative. "The surprise when comparing the House Republicans’ budget and the Senate Democrats’budget is just how much more conservative the Democratic effort is. I don’t mean ideologically conservative, of course. I mean conservative in the sense that the dictionary defines it: 'disposed to preserve existing conditions, institutions, etc., or to restore traditional ones, and to limit change.'" Ezra Klein in The Washington Post.

DIONNE: Patty Murray versus Paul Ryan. "Yes, the numbers gap is large, and so is the philosophical divide: Poorer Americans pay a big part of the price for Ryan’s cuts; Murray leans primarily on revenue from wealthier Americans to move closer to balance. Ryan claims to reach balance in 10 years. Murray and the Democrats rightly argue that rushing to balance is less important than keeping an eye on economic growth and job creation. So Murray includes $100 billion in her plan to support infrastructure projects and job-training programs." E.J. Dionne in The Washington Post.

@MichaelSLinden: Murray budget actually raises a little less than advertised compared to straight "current law" baseline ($923 billion).

YGLESIAS: Timidity in the Democratic budget. "Ryan’s budget is almost frighteningly ambitious...Murray’s budget for the Democrats is the reverse. In distributive terms, she taxes the rich to preserve programs for the poor and middle-class. But it’s also the reverse conceptually—a de minimisscheme aimed at addressing the budget challenge with as little change as possible." Matthew Yglesias in Slate.

Music recommendations interlude: Wilco, "Spiders," 2004.

Top op-eds

BOEHNER: The outreach is nice. Now what about the leadership? "If we’re going to find bipartisan solutions, the president will have to move beyond the same proposals and Democratic dogma. For all of Washington’s focus on the president’s outreach to Republicans, it’s his engagement with members of his own party that will determine whether we succeed in dealing with the challenges facing our economy." John Boehner in The Washington Post.

FRANKEL: Two economic centennials. "This year marks the 100th anniversaries of two distinct institutional innovations in American economic policy: the introduction of the federal income tax and the establishment of the Federal Reserve. They are worth commemorating, if only because we are at risk of forgetting what we have learned since then." Jeffrey Frankel in Project Syndicate.

FIRESTONE: Continuing resolution, continuing dysfunction. "The “continuing resolution,” now a seemingly permanent method of paying for the United States government, is also a continuing symbol of Congressional dysfunction...That dysfunction is on full display this week as members of Congress struggle to agree on a new stopgap measure for the second half of this fiscal year, beginning March 27. And that’s because lawmakers — mostly Republicans — are using the legislation as an opportunity to score ideological points rather than simply do their basic jobs." David Firestone in The New York Times.

WESSEL: Baby steps on the deficit. "The U.S. confronts two big economic problems: Unemployment today, deficits tomorrow. Congress can't seem to figure out how to tackle them both...Congress seems to have almost given up on attacking unemployment directly. Instead, it is focused on cutting spending or raising taxes. But doing that too fast will hurt the economy. Don't believe that? Ask the British. Or Federal Reserve chief Ben Bernanke, who makes the point every time he goes to Capitol Hill." David Wessel in The Wall Street Journal.

HOWARD: A model medical program. "We certainly need to slow the growth of health-care costs, especially for Medicare. Fortunately, the program has an in- house model for how to do this: Part D, the Medicare drug benefit passed in 2003. Part D gets high marks for controlling costs, protecting the elderly and driving the right kinds of health-care innovations...Medicare Part D has cost more than 30 percent less than initially projected by the Congressional Budget Office in 2004 -- $304 billion compared with $449 billion." Paul Howard in Bloomberg.

CROOK: Liberals, embrace the ownership society. "[A]n equity component in government-backed saving for retirement could be the best idea liberals have had since the earned-income tax credit (oh, sorry, that started out as a conservative idea as well). The insurance component shouldn’t be neglected, but recasting the Social Security system so that it provides workers with a growing fund of equity over the course of their working lives -- an investment that they own -- would directly counter the drift of income from workers to capital." Clive Crook in Bloomberg.

KLEIN: The gross obsession with White House tours. "The furor over the White House tours is an unusually vivid example of this grossly unequal responsiveness. There’s been much less concern over the pain the sequester will cause than the political pain the sequester will cause, and much less attention to the pain that is happening outside Washington, DC...[T]he effort here isn’t to make sure no one hurts. It’s to make sure no one with the political capital to do something about it hurts. As such, the minor inconveniences of the politically powerful have become a national crisis, even as some of the politically powerless are losing not just a White House tour, but the very roof over their heads." Ezra Klein in The Washington Post.

Demolition interlude: If a building is demolished in a city and nobody notices, it doesn't make...sound or dust.

2) Obama visits House GOP

Obama visits the House Republicans"Lawmakers said the president’s support for changing entitlements included possibly means-testing expensive retiree health programs and adjusting the way inflation is measured, which would have the result of reducing Social Security benefits over time. In a key exchange, House Ways and Means Committee Chairman Dave Camp (R-Mich.) asked if Republicans could go ahead and move forward with entitlement changes with which Obama agrees, the president made clear he would take those moves only in exchange for additional tax revenues, according to Rep. Cory Gardner (R-Colo.)." Ed O'Keefe in The Washington Post.

...It's the first time they've met since 2011. "[T]he president’s rare meeting with House Republicans in the basement of the Capitol yielded little in the way of movement on either side of the partisan divide...Obama’s overture to the GOP is part of an unusual series of meetings this week with lawmakers: He started Tuesday with Senate Democrats and will continue Thursday with sessions with Senate Republicans and House Democrats. But it’s unclear whether the meetings will move the mark." Jake Sherman and Jonathan Allen in Politico.

...And Obama's ability to compromise with the GOP is limited. "President Barack Obama, working to restart talks in Congress on a broad deficit-reduction package, is wrestling with how deeply to immerse himself in negotiations out of concern that his involvement could impede a compromise...Given the disconnect, the White House suggests the president may step back once he is assured a critical mass of Senate Republicans has been persuaded to engage in talks." Peter Nicholas in The Wall Street Journal.

Our deficits aren't as bad as Washington thinks. "The CBO’s irresponsibility scenario made sense in recent years, when the Bush tax cuts, sequestration and other unresolved fiscal policies made current law a faulty guide to future deficits. But the CBO’s alternative fiscal scenario has become a hindrance to sensible policy making. It misinforms the public (and Congress) about the severity of future deficits, contributes to an air of panic, and, perhaps worst of all, gives Congress an excuse for fiscal irresponsibility, because irresponsibility is already priced-in to the budget projections." Ezra Klein in The Washington Post.

It's not clear why we should hate deficits so much in the first place. "The hawks are worried about interest rates. High levels of debt, the theory goes, suggest that the country holding that debt might not be able to pay it back. That risk leads bond purchasers to demand higher interest rates. And since government debt is generally the safest asset you can buy, that in turn means interest rates for everything from mortgages to credit cards to business loans shoot up. That means businesses are less likely to borrow money to invest in big projects and purchases, and consumers are less likely to borrow money to buy houses, cars and so on. This phenomenon is known as “crowding out,” and it’s quite bad for the economy." Dylan Matthews in The Washington Post.

Humorous interlude: Jay Leno on Bloomberg's failed sugary drink ban.

3) Ohio considers Medicaid expansion

Ohio is considering the Medicaid expansion. "Ron Amstutz has one of the most important roles right now in implementing the Affordable Care Act: He leads a small committee that will get the first say on whether Ohio expands Medicaid to 684,000 residents." Sarah Kliff in The Washington Post.

How much does an MRI cost in D.C.? Anywhere between $400 and $1,861. "Castlight is a relatively new company that works in the business of health price transparency. They sell software to employers, whose workers  can then compare the costs of various health-care providers...Castlight’s first study looked at the price of colonoscopies and found a huge variation. The same doctor’s fees could vary five-fold depending on which hospital he performed the procedure at." Sarah Kliff in The Washington Post.

WonkTalk: The wild variation in health care pricesBrad Plumer and Sarah Kliff in The Washington Post.

Is a doctor shortage coming? "With 12 new schools opening and existing ones growing, enrollment is on track to produce 5,000 more graduates a year by 2019. But medical educators are cautioning that those efforts won't do anything to alleviate a doctor shortage unless the number of medical residency positions rises as well. The number of federally funded residencies has been frozen since 1997." Melinda Beck in The Wall Street Journal.

The best adorable animals interlude of all time: The penguin bloopers reel.

4) Good economic news on retail sales

Retail sales rise, despite fiscal tightening. "Consumers shrugged off smaller paychecks and higher gasoline prices, and stepped up spending in February, skipping extras such as meals out but tapping tax-refund checks for cars and other long-postponed purchases. Retail sales rose 1.1% to a seasonally adjusted $421.4 billion, the Commerce Department said Wednesday. January's increase was revised up to 0.2% from a 0.1% earlier estimate." Brenda Cronin and Shelly Banjo in The Wall Street Journal.

...And what that tells us about the economy. "When Congress allowed payroll taxes to rise at the start of 2013, ensuring that all American workers’ after-tax pay would fall (most by two percent), it was reasonable to worry that the consumer-driven economy would take a damaging blow. Never mind...[T]hink about that in the context of other recent evidence. Friday’s jobs report was quite good, and it followed a series of solid jobs numbers. Employers didn’t sweat the fiscal cliff in December. They didn’t sweat the sequester in February. Housing market indicators—construction, prices, sales—are all pointing up. Put it all together and it’s hard to escape the conclusion that the U.S. economy is finally starting to gain some traction." Neil Irwin in The Washington Post.

Philosophical interlude: A podcast series on the history of philosophy from beginning to end.

5) Why wonks need to know about the pope

Habemus papam: Cardinal Bergoglio of Argentina, now Pope Francis. "The cardinals of the Roman Catholic Church broke Europe’s millennium-long stranglehold on the papacy and astonished the Catholic world Wednesday, electing Jesuit Cardinal Jorge Mario Bergoglio of Argentina as the 266th pope. The choice, on the second day of deliberations in a papal conclave, opened a direct connection to the Southern Hemisphere at a critical juncture when secularism and competing faiths are depleting the church’s ranks around the globe and dysfunction is eroding its authority in Rome." Jason Horowitz in The Washington Post.

What policy wonks should know about the new pope. "Francis also seems to be an opponent of austerity, most notably during his time as spiritual leader of Argentina when the country defaulted on its debt in 2002...How involved Pope Francis will be in the austerity debates in the United States, Europe, and elsewhere remains to be seen. But if the record of him and other Argentine leaders is any indication, he won’t look too kindly to cuts in social spending." Dylan Matthews in The Washington Post.

The pope will be one of the U.S.'s largest employers. "[T]he church plays a massive role in the U.S. economy — spending some $170 billion in 2010, according to recent estimates by The Economist, with much of that going to health care services...Catholic institutions themselves employ over 1 million people in the United States. That means the church is one of the nation’s largest employers, behind only Walmart. It employs far more people than General Electric or McDonald’s or GM or the U.S. Postal Service." Brad Plumer in The Washington Post.

Ross Douthat's notes on the new pope. "His age would suggest a kind of caretaker pope, but his name (evoking not only Francis of Assisi but the great Jesuit Francis Xavier as well) suggests a mix of humility and purifying zeal; his rich biography, meanwhile, offers enough material for multiple narratives, multiple hopes, and (of course) multiple lines of attack from the church’s many critics." Ross Douthat in The New York Times.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

What's the best way to design a carbon tax? Legislators want to knowBrad Plumer.

Should we be releasing more immigrants from detention? Suzy Khimm.

The gross obsession with White House toursEzra Klein.

No, printing money won't help solve the U.S. debt issuesNeil Irwin.

Our deficits aren't as bad as Washington thinksEzra Klein.

The pope as mega-employerBrad Plumer.

What does the new pope think about economicsDylan Matthews.

Read: Senate Democrats' 2014 budgetBrad Plumer.

The Senate Democrats' budget is vague, conservativeEzra Klein.

Ohio considering Medicaid expansionSarah Kliff.

D.C. hates deficits. Why it does is less clearDylan Matthews.

Washington should be worrying about health care, education, infrastructureEzra Klein.

Need an ankle x-ray? There's a $1200 price difference between doctors in D.C. alone, and WonkTalk follow-upSarah Kliff and Brad Plumer.

Boom! Retail sales are way up. The economy might be a lot stronger than we thoughtNeil Irwin.

Et Cetera

Obama's approval rating and public support on issues have declined since the inaugurationJon Cohen and Karen Tumulty in The Washington Post.

Meet Scott Prouty, the bartender who filmed Romney's "47 percent" commentsRachel Weiner in The Washington Post.

Senators add gun-rights protections to continuing resolutionJennifer Steinhauer in The New York Times.

Americans are moving more frequently than they have since the recessionNeil Shah in The Wall Street Journal.

Obama meets with Organizing for Action group. Philip Rucker in The Washington Post.

Obama says Keystone decision coming soon. But will it be a yes or a no? Juliet Eilperin in The Washington Post.

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

Wonkbook is produced with help from Michelle Williams.

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Dylan Matthews · March 13, 2013