Wonkbook: Looks like there won’t be a shutdown

March 21, 2013

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: 104. That's the number of Republican representatives who voted for the Republican Study Committee's budget proposal. The RSC proposal was the more conservative alternative to Rep. Paul Ryan's plan. More below. 

(AP Photo/Carolyn Kaster)
(AP Photo/Carolyn Kaster)

Wonkblog's Graph of the Day: Why is health spending rising? Mainly Old people, not health care cost inflation.

Wonkbook's Top 5 Stories: (1) Backing away from a shutdown; (2) Fed holds its stimulus; (3) visas shift from families to workers in Senate plan; (4) who's behind gun control legislation; and (5) health care math is hard.

1. Top story: No shutdown -- probably

Senate passes continuing resolution. A House vote is expected today. "The final Senate vote, 73 to 26, came days later than leaders had hoped. Passage was slowed by a familiar disagreement about how many amendments the chamber should consider for a bill that outlines spending priorities for every federal agency for the final six months of the fiscal year." Rosalind S. Helderman in The Washington Post.

Congress steps back from a shutdown. "So, what good is the Senate’s CR if it only makes marginal tweaks to sequestration? Basically, it decouples the bigger budget from a potential government shutdown, acknowledging that there’s really no chance that Congress will come up with a deal to replace sequestration and find a resolution on bigger fiscal issues before March 27. Like every other budget bill that Congress has passed since the August 2011 debt-ceiling bill, it puts off the hardest decisions for another day." Suzy Khimm in The Washington Post.

Poli-sci funding took a big hit. "The Senate voted Wednesday to bar the use of National Science Foundation funds for political science research not deemed essential to national security or economic interest...The amendment defunding political science was adopted in a voice vote that surprised many observers. Ending federal funding for political science research has been a longtime cause for some Republicans in Congress, including the measure’s sponsor, Oklahoma Senator Tom Coburn, and the effort has failed many times in the past." Libby A. Nelson in Inside Higher Ed.

Democrats tried to see if they could get the GOP to pass the RSC budget plan. They wouldn't. "Hundreds of House Democrats voted 'present' Wednesday on a conservative budget proposal in hopes of prompting passage of the spending plan with Republican votes. But the proposal failed on a vote of 104 to 132, with 171 lawmakers voting 'present.'" Ed O'Keefe in The Washington Post.

Meet the economists unworried by sequestration. "Most economic forecasters predict the spending cuts the federal government has enacted this year will slow economic growth. A few insist the opposite, that sequestration won’t hurt the economy much on balance and may already be sowing the seeds of faster growth next year." Jim Tankersley in The Washington Post.

In between the lines interlude: The saddest bit of legislative text we've seen all week.

Top op-eds

CHEN: How changes to Obamacare can cut the deficit. "[T]here are several smaller provisions in the law that could be changed to generate savings. A favorite bipartisan target is the law’s Prevention and Public Health Fund, which is nicely named but has paid for seemingly unrelated projects such as the construction of sidewalks and playgrounds. The law originally set aside $15 billion for this fund from 2010 to 2019, but Obama has twice proposed cutting the fund and actually did cut it by $5 billion in 2012." Lanhee Chen in Bloomberg.

WESSEL: Washington is the economic drag. "Housing is on its way back. Consumers are spending more readily. Nearly two-thirds of U.S. private industries are hiring. The stock market is up. The U.S. economy is healing, albeit slowly. And then there's Washington...Nearly all reputable economic forecasters agree that this combination means the federal government will subtract from growth this year." David Wessel in The Wall Street Journal.

LIGHT: An opportunity to overhaul the federal bureaucracy. "[T]he sequester has given Congress and President Obama a once-in-a-generation opportunity to close this "implementation gap" and rebuild trust in government. They can do so by setting targets for the most aggressive bureaucratic overhaul since former President Herbert Hoover took the helm of a blue-ribbon commission in 1947 that streamlined or consolidated dozens of agencies and cut layers of fat between the top and bottom of the federal government." Paul C. Light in The Wall Street Journal.

BERNSTEIN: Republicans should marginalize the fringe. "Do Republicans really want to improve their image and convince voters that they aren’t a bunch of kooks? Yes, there are plenty of long-term projects that might help with that. But the easiest first step would be to marginalize the fringe. There’s nothing particular inherent in either conservative thought or the Republican Party that attracts crazies, but the flat-out truth over the last twenty or thirty years is that Democrats have been much more aggressive in policing their own." Jonathan Bernstein in The Washington Post.

GLAESER: The waste problem with infrastructure spending. "When I hear free-spending national leaders call for more infrastructure investment, I think of Detroit’s absurd People Mover monorail gliding above empty streets. That’s unfair, I know. Yet the city’s epic tragedy, which entered a new stage last week when Mayor Dave Bing lost financial control, provides broader perspective on the potential consequences of mixing economic distress with bad policy making." Edward Glaeser in Bloomberg.

DINAPOLI AND DE BLASIO: Companies, show us the money. "[I]f she really wants to make a difference, [Mary Jo] White, a former federal prosecutor, should tap into some of that good will in her first days in office and push forward a vital proposed rule on corporate disclosure that the S.E.C. has been considering for over a year and a half.... The reform, suggested in a petition to the S.E.C. by 10 legal scholars in August 2011, would be simple: it would mandate that publicly held corporations disclose their political spending." Thomas P. DiNapoli and Bill de Blasio in The New York Times.

Woah interlude: Dashboard camera + time lapse = drive lapse.

2. Fed holds position, even as economy strengthens

Fed to maintain stimulus, despite some economic gains. "Employment has been increasing at a healthy clip for the last few months, but the Federal Reserve is not ready to relax just yet...Mr. Bernanke’s remarks suggested that the Fed would reduce its asset purchases if job growth continued at the current pace, the first time he has said that the central bank is likely to reduce the amount of monthly purchases before it stops buying entirely. But such a change remains at least a few months away, and quite possibly longer." Binyamin Appelbaum in The New York Times.

Read: Text of the Fed's monetary policy statementThe New York Times.

What the Fed expects for 2013. "New economic projections released by the central bank reflected the Fed's caution at the moment. Fed officials downgraded their forecasts for economic growth this year and next from their projections in December, though they also predicted that unemployment would move a bit lower than previously expected. The economy this year will grow between 2.3% and 2.8%, Fed officials projected, and the unemployment rate will fall slightly to between 7.3% and 7.5%." Jon Hilsenrath and Victoria McGrane in The Wall Street Journal.

@mattyglesias: Ben Bernanke would rather have a horse-sized unemployment problem than a duck-sized inflation problem.

What Bernanke would say if he didn't have to be polite. "[On Cyprus:] It’s bonkers, isn’t it? I mean, after all this time and effort spent trying to instill confidence in European banks, NOW they’re going to undermine it with haircuts on deposits? Sheesh. I asked my friend Mario [Draghi] the other day, “What are you doing, man?” And he was like “Oh, don’t worry, we’ll figure it out. We always do.” And, well, I sure hope he’s right. But not much I can do about it." Neil Irwin in The Washington Post.

Insta-commentary: Neil Irwin's live blog of the Fed press conferenceThe Washington Post.

Forecasts for growth in the first quarter of 2013 are rising. "Heading into that meeting, the average forecast of economists polled by Macroeconomic Advisers called for gross domestic product to increase by 1.5%, at an annual rate, in the first quarter. In the wake of better-than-expected news on jobs, consumer spending and manufacturing, the average forecast has risen 2.3%. Macroeconomic Advisers' own forecast, which it updates more frequently than most other firms as new data flow, now stands at 2.9%." Justin Lahart in The Wall Street Journal.

Wonktalk: Ducks, horses, and Ben BernankeEzra Klein and Neil Irwin in The Washington Post.

...And the sudden rise of housing demand is taking builders by surprise. "The housing turnaround seems to have caught almost everyone in the business by surprise. As desirable as the long-awaited improvement may be, the unusually low level of homes for sale is creating widespread problems for buyers and sellers alike, leading to bidding wars and bubblelike price jumps in places that not long ago were suffering from major declines...In many areas, builders are scrambling to ramp up production but face delays because of the difficulty of finding construction workers and in obtaining permits from suddenly overwhelmed local authorities." Catherine Rampell in The New York Times.

3. Visas shift from families to workers in Senate plan

Visas for high-skilled workers could double under Senate plan. "A Senate immigration plan would dramatically increase the number of high-skilled foreign workers allowed into the country and give permanent legal status to an unlimited number of students who earn graduate degrees from U.S. universities in science, technology, engineering or math, according to people familiar with the negotiations...The number of visas available would approximately double from the current limit of 65,000 per year." Peter Wallsten in The Washington Post.

...But Democratic senators work in defense of family visas. "Seven Democratic senators are asking a bipartisan group of colleagues to reconsider plans to eliminate some categories of family visas as the group finalizes a comprehensive overhaul of immigration laws...The Washington Post reported last week that the senators are planning to eliminate those categories to help clear a back load of 4.3 million family visa applications, while also making it easier for some foreign workers to enter the country. Those family members could still apply for visas but would need other qualifications such as work skills and English proficiency to increase their chances. Senate aides said no decisions have been finalized." David Nakamura in The Washington Post.

Explainer: Republicans' amazing before-and-after on immigration reformRachel Weiner in The Washington Post.  

'Why is immigration reform so slow?' A key Senate chairman asks. "Sen. Pat Leahy (D-Vt.) said he had been urging President Obama to bring forward legislation for months but understood his decision to hold off while a bipartisan group of eight senators quietly works on their own proposal. However, Leahy said that group has now missed several deadlines as well. He had hoped members of his committee–the first stop for any immigration legislation–would be able to review a bill over the two-week congressional recess that begins next week, then begin committee work in April." Rosalind S. Helderman in The Washington Post.

Religious conservatives have been a major force in favor of reform. "Advocates of a far-reaching overhaul of the nation’s immigration system are hoping to use their allies on the religious right to prod the Republican Party to embrace reform. They aim to use a broad consensus among religious leaders and institutions to promote a rewrite of immigration laws as a moral imperative, mobilizing conservatives to pressure the Republican politicians they have long supported on the basis of other issues." Rosalind S. Helderman in The Washington Post.

Urban interlude: Life in Warsaw, Poland, a mini-documentary.

4. The relationships behind gun control legislation

Biden, Bloomberg to meet for gun-policy discussion. "Mr. Biden and Mr. Bloomberg have been among the most prominent voices in a campaign for greater gun controls that has gained momentum, since 20 children and 6 staff members died in the shooting at Sandy Hook Elementary School in December. The two have met several times in the three months since the attack." Ravi Somaiya in The New York Times.

The Manchin-Coburn relationship, and why it's key to gun control. "For weeks, the two have been negotiating over a bill to require background checks for all gun purchases, an expansion of the current system. But prospects for a deal appear to be dimming...[T]he lawmakers haven't been able to agree on how to enforce the background checks. Mr. Coburn has objected to a requirement for private sellers to keep a paper record of a sale. Republicans worry the records could be used to build a registry and track gun owners." Kristina Peterson in The Wall Street Journal.

How the assault weapons ban died. "Its political demise stems from a confluence of realities: the lobbying prowess of the National Rifle Association; stiff resistance from lawmakers in both parties; serious questions about the efficacy of the ban in stemming gun violence; and the lack of support from gun safety groups, including one led by Ms. Gifford, that are much more invested in a background check measure, which has become the central goal of many groups and lawmakers." Jennifer Steinhauer in The New York Times.

Meanwhile, NY is already having trouble with its new gun control laws. "The gun-control law, approved in January, banned the sale of magazines that hold more than seven rounds of ammunition. But, Mr. Cuomo said Wednesday, seven-round magazines are not widely manufactured. And, although the new gun law provided an exemption for the use of 10-round magazines at firing ranges and competitions, it did not provide a legal way for gun owners to purchase such magazines. As a result, he said, he and legislative leaders were negotiating language that would continue to allow the sale of magazines holding up to 10 rounds, but still forbid New Yorkers from loading more than 7 rounds into those magazines." Thomas Kaplan and Danny Hakim in The New York Times.

...And Colorado inks new gun control laws. "The governor of Colorado signed bills Wednesday that put sweeping new restrictions on sales of firearms and ammunition in a state with a pioneer tradition of gun ownership and self-reliance...The bills require background checks for private and online gun sales and ban ammunition magazines that hold more than 15 rounds." Aaron Blake in The Washington Post.

The link you're going to send to everyone right now interlude: The Awkward Chatbot.

5. Health-care math is hard

Old people, not health inflation, drive our deficits. "[I]n the coming decades, new spending is almost entirely driven by health-care programs. But what’s really driving the spending in those programs is the aging of the population, not the rise in health-care costs." Ezra Klein in The Washington Post.

Will Arkansas's Obamacare math add up? "The Congressional Budget Office estimated last year that private insurance plans cost about 50 percent more than the public program, $9,000 vs. $6,000 in 2022 dollars...While the Obama administration has some leeway in determining what counts as “comparable,” it’s difficult to see a 50 percent price differential fitting inside the definition. But Arkansas doesn’t think that 50 percent number is right at all. It recently brought on a team of actuaries to run through the question: How much more does it cost to move 210,000 Arkansas residents into private insurance coverage? The answer they came up with: Not much at all. In fact, the costs might come out even." Sarah Kliff in The Washington Post.

Can you get Obamacare? Consult this insanely complicated chart. "Why on earth would the federal government create such a complex form to obtain a public benefit? For me, at least, the flowchart below provides a bit of an answer. It comes from the National Association of Insurance Commissioners, which represents the regulators who oversee each state’s insurance market. It is an attempt to draw up the most basic, simple questions to determine eligibility for insurance subsidies or Medicaid." Sarah Kliff in The Washington Post.

Hill tries to figure out if it gets Obamacare benefits. "[V]ague language in this part of the law — which was passed three years ago this Saturday — has led to a slew of quirks and questions. Staffers who work in lawmakers’ personal offices go into exchanges — but those who work for committees don’t. And the lawmakers themselves get Obamacare — unless they are among the roughly 40 senators and 115 House members on Medicare." Jennifer Haberkorn in Politico.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

How to halve U.S. gasoline use by 2030Brad Plumer.

A very clear explanation for why the euro zone keeps explodingEzra Klein.

Wonktalk: Horses, ducks, and Ben Bernanke. Neil Irwin and Ezra Klein.

Can you get Obamacare? Try to use this chartSarah Kliff.

"Blunter Ben Bernanke" and decoding the evasiveness of monetary policymakersNeil Irwin.

Paul Ryan wants to cut income taxes. Bobby Jindal wants to kill them dead. Dylan Matthews.

Liveblog: Yesterday's Fed presserNeil Irwin.

Can Arkansas make its healthcare math work? Sarah Kliff.

Congress moves another step away from the government shutdown ledgeSuzy Khimm.

Et Cetera

Pediatrics association backs gay marriage, saying children raised better in married householdsShirley S. Wang in The Wall Street Journal.

Sens. Rubio and Paul compete for the spotlightJonathan Weisman in The New York Times.

Sen. Durbin wants to create a panel on Social Security changesSiobhan Hughes in The Wall Street Journal.

The impact of single-parenthood on the wages of the sonsBinyamin Appelbaum in The New York Times.

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

Wonkbook is produced with help from Michelle Williams.

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