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.
No one knows how the shutdown will end. But there is an increasingly popular theory for how the debt-ceiling will be resolved.
It goes something like this: Senate Democrats will move a clean bill to raise the debt ceiling. They'll be joined by a handful of Senate Republicans who are furious over the shutdown, furious at Sen. Ted Cruz, and genuinely scared that the debt ceiling might be breached.
The question is whether they could reach 60. The early signs look favorable. On Monday, Sen. Mark Kirk, an Illinois Republican, said he'd vote for a clean debt-ceiling increase, and he'd also vote to break any filibuster against one. “Assume this is a bellwether for 3-4 other members at least," says one Republican Senate aide.
Sen. Lisa Murkowski, an Alaska Republican, said she'd oppose a filibuster against proceeding a clean debt-ceiling bill. John McCain is considered a likely yes, and that means Lindsey Graham and Kelly Ayotte might also vote in favor.
If they all come through, that's five Republicans. Democrats only need one more to hit 60.
At that point the Senate would have a clean, bipartisan bill to raise the debt ceiling and the House might have...nothing. "Speaker John Boehner doesn’t yet have his debt-ceiling proposal finalized," Robert Costa reported on Monday.
Even if Speaker John Boehner could scramble to get something to the floor the fact would remain that the Senate would have a bipartisan bill preventing default that President Obama would sign and the House would have something that's certain to lead to default.
But can the House be jammed? It's happened before. The fiscal cliff bill, for instance, came from the Senate and got pushed through the House -- even though Boehner had to pass it with Democratic votes. More recently, the "jam the House" theory has fallen on harder times: It failed on immigration and, so far, it's failed on the continuing resolution.
House Republicans don't want to fold completely, of course. But it's possible, given the beating they're taking on the shutdown, that they won't want to risk an actual default. One possible endgame with the debt ceiling, then, is that it gets lifted even as the shutdown continues, perhaps because Boehner and Ryan persuade House Republicans that the shutdown is their real leverage and a default is something Democrats want them to do because it will destroy the Republican Party for a generation. It's possible to imagine the Senate's debt-ceiling bill passing even as their reopen-the-government bill languishes.
House Republican aides I consulted thought it mattered if the Senate passed a clean debt-ceiling increase for two reasons. One is that if the Senate didn't pass a clean debt-ceiling increase it would embolden House Republicans. They would see weakness on the Senate side and, if they could pass something out of the House, they could argue they were the only chamber that had a viable solution.
The other reason it matters is that if House Republicans really can't figure out a solution and really can't find a way to turn the polls or negotiate with President Obama, it would provide a vehicle that more mainstream Republicans could ultimately flee to. "Plan beats no plan," as Timothy Geithner used to like to say.
But for that to have much chance of happening, the Senate has to pass a clean debt-ceiling bill first.
Wonkbook's Numbers of the Day: 45 percent, 24 percent, and 35 percent. Those are how many say in a new Post-ABC poll that they approve of how President Obama, Republicans, and Democrats, respectively, are handling the budget fight.
Wonkbook's Quote of the Day: "Think about how dumb that is: You shut down the government the same day that Obamacare is being implemented," said Rep. Devin Nunes (R-CA).
Wonkbook's Graph of the Day: US set to surpass Russia as world's largest oil-and-gas producer.
Wonkblog Daily Default Dashboard: Level 2, "Something's not quite right."
Wonkbook's Top 5 Stories: 1) Senate to raise debt ceiling, House to stay put; 2) how HealthCare.Gov broke; 3) the Fed's hawks; 4) Zichal out; and 5) new NSA problems.
1) Top story: Who the shutdown hurts
Why Washington is failing, in 13 reasons. "At this point, it's almost cliche to say Washington isn't working. But the truth is harsher: Washington is actively failing. It's failing to craft policies that make the country better. And it's failing to avoid disasters that make the country worse. It's nice to imagine these failures are temporary or aberrational. It's comforting to believe that they're the result of bad people, or dumb people, or incompetent people. But the truth is more unnerving: The American political system is being torn apart by deep structural changes that don't look likely to reverse themselves anytime soon. A deal to reopen the government won't fix what ails American politics." Ezra Klein in The Washington Post.
Senate may vote to lift debt ceiling. "Democrats said they will attempt to force Republicans to agree to a long-term $1 trillion debt-limit increase to ensure that the government does not reach a point this month where it may be unable to pay its bills, risking its first default. They said they also may accept a short-term bill, perhaps lasting only weeks, if necessary to avoid going over the brink." Zachary A. Goldfarb and Ed O'Keefe in The Washington Post.
...But the House won't this week. "House Republicans have no plans to try to pass a bill to hike the nation’s borrowing limit this week, according to Republican aides. Instead, Speaker John Boehner’s (R-Ohio) chamber will use the week to continue to pass targeted spending bills in an attempt to reopen parts of the currently shuttered government. Those bills have been rejected by Senate Democrats and President Barack Obama." Jake Sherman in Politico.
@ianbremmer: Why now: 7% of GOP House members are in districts that voted Obama. In '95 shutdown, 35% of GOP were in districts that had voted Clinton
If we hit the debt ceiling, can Obama choose which bills to pay? "[T]here are a few big problems with this "prioritization" plan: For one, it could prove extremely difficult for the Treasury Department to prioritize payments in this way and avoid default. This is murky terrain, both logistically and legally. Second, even if the Obama administration could put bondholders first, breaching the debt ceiling would still cause massive disruptions elsewhere in the U.S. economy." Brad Plumer in The Washington Post.
...But the financial industry is terrified of prioritization. "In recent meetings with Republican lawmakers and Obama administration officials, chief executives of the nation's largest financial institutions said putting some payments ahead of others would create insurmountable uncertainty for investors, drive up borrowing costs and cause market disruptions, according to people familiar with the meetings." Deborah Solomon and Dan Strumpf in The Wall Street Journal.
@jonathanweisman: If investors spooked by #shutdown are fleeing to Treasuries for safe harbor, where will they go at debt ceiling when the harbor dried up?
Who's winning the shutdown? The Senate chaplain. "[N]owhere have senators found criticism more personal or immediate than right inside their own chamber every morning when the chaplain delivers the opening prayer...“Save us from the madness,” the chaplain, a Seventh-day Adventist, former Navy rear admiral and collector of brightly colored bow ties named Barry C. Black, said one day late last week as he warmed up into what became an epic ministerial scolding. “We acknowledge our transgressions, our shortcomings, our smugness, our selfishness and our pride,” he went on, his baritone voice filling the room. “Deliver us from the hypocrisy of attempting to sound reasonable while being unreasonable.”...“Remove from them that stubborn pride which imagines itself to be above and beyond criticism,” he said. “Forgive them the blunders they have committed.”" Jeremy W. Peters in The New York Times.
Interview: This cancer patient’s treatment is on hold because of the government shutdown. Sarah Kliff in The Washington Post.
Look: This one photo shows how humiliating the government shutdown is for the United States. Zachary A. Goldfarb in The Washington Post.
Post/ABC News poll: GOP is getting blamed for the shutdown. "Political scientists who've studied gridlock-driven shutdowns at the state level found much the same thing: The executive benefits and the legislature is punished...Asger Lau Andersen, David Dreyer Lassen and Lasse Holbøll Westh Nielsen tallied up 167 state shutdowns since 1988. But then they went a step further and tried to isolate the fiscal mismanagement they had on the next election. They succeeded. Voters respond to budgetary chaos, and they do so angrily and predictably." Ezra Klein in The Washington Post.
Primary source: Poll details.
The government shutdown isn't anywhere near over. "Asked whether Obama should agree to a shutdown deal that includes changes to his health care law, the "yes" responses among Republicans, Independents, and Democrats went 77 percent-40 percent-18 percent. Asked whether the GOP should agree to a deal to fund government without health care changes, the R-I-D responses were practically palindromic: 14 percent-43 percent-75 percent." Derek Thompson in The Atlantic.
Is Obamacare still the point? "Suddenly, even as everyone in Washington focuses on the government shutdown and debt ceiling standoff, fewer than ever want to talk about the issue that launched those fights in the first place: Obamacare...In other words, there’s plenty of talk about process and politics — and virtually none about the policy that sparked the showdown." Reid J. Epstein in Politico.
...And what's going on with the Republican Party? "The struggle has exposed a rift between the party’s confrontational, populist, tea party wing and its traditional business and establishment wing. These tensions reflect fundamental questions about the direction of a party whose rightward shift over the past decade has helped intensify the political conflict and changed the calculus of governance generally. The conservative movement is not deeply divided over philosophy and policy" Dan Balz in The Washington Post.
Government shutdown unlikely to damage economy, but debt limit could be catastrophe. "Economists warned that some effects will linger, with consumers feeling spooked and pockets of the economy afflicted by closed national parks or a slowdown in government-related business. But the collective impact of a scaled-back shutdown is expected to be small, and many economists have already shifted to sounding the alarm over a significantly scarier scenario: the likelihood that a paralyzed Congress will allow the nation to default on its debts." Ylan Q. Mui and Marjorie Censer in The Washington Post.
Shutdown starts to crimp trade. "All pesticide imports to the U.S. have been halted, according to the Environmental Protection Agency, which must approve them but has had more than 90% of its staff furloughed. Some U.S. technology companies can't fill overseas orders because they cannot obtain U.S. Department of Commerce authorization to export. Steel imports are stranded at customs-clearance warehouses awaiting paperwork...More than 40 government agencies, including the EPA, the Department of Agriculture and the Department of Commerce, are involved in trade shipments, said Ms. Rowden. Fourteen agencies have "release and hold" authority that trumps clearance from U.S. Customs and Border Patrol, she said." Betsy Morris, Don Clark, and Mike Esterl in The Wall Street Journal.
@joebrusuelas: It's not the direct effects of the shutdown that carry biggest risk to the economy. It's the indirect effects that will hit cap ex & hiring
Can business take the Republican Party back from the Tea Party? "At what point could the extremism from this faction of the Republican party cause blowback from the rest of the party? And will the latest confidence-rattling showdown by the source of a new wave of such blowback?...A handful of high-profile losses would change the asymmetry problem facing Republican lawmakers if they began to conclude that they could just as well face a primary challenge for being too absolutist and extreme as they could for being too weak-kneed and compromise-oriented." Neil Irwin in The Washington Post.
Why Silicon Valley has been silent on the shutdown. "That "what, me worry?" attitude partly has to do with the predominant way companies are funded in the tech world: Not by banks, whose lending behaviors tend to be affected by macroeconomic conditions, but by venture capitalists and angel investors who have much more freedom with their cash. Also, he says, start-ups are moving so fast that even paralysis in Washington won't get in their way." Lydia DePillis in The Washington Post.
@JamesFallows: Shutdown hamstrings the NTSB. But, who cares. Market will find a solution to transport safety.
...But not Beijing. "China called on the U.S. to take necessary steps to avoid defaulting on government debt, in the first official comment on the shutdown impasse from Washington's largest foreign creditor. Chinese Vice Finance Minister Zhu Guangyao warned Monday that failure by the U.S. to raise its debt ceiling would have global ramifications. "Because of this, [w]e naturally are paying attention to financial deadlock in the U.S. and reasonably demand that the U.S. guarantee the safety of Chinese investment there," Mr. Zhu said, according to a report on the website of the official Xinhua news agency." Josh Chin in The Wall Street Journal.
PEARLSTEIN: A face-saving plan to end the Obamacare shutdown stalemate. "Even the president has acknowledged that there are bound to be glitches in implementing an initiative as large and complicated as Obamacare. So why not agree now to a thorough review of the program once we have some experience with it? The process could begin after two years with a rigorous evaluation by a respected group of independent experts such as the Institute of Medicine. By the end of 2015, the institute could forward its findings to a special joint committee of Congress, reflecting the partisan makeup of the new Congress. The panel would have the authority to propose any legislative changes it deems necessary, including outright repeal, within 90 days of receiving the advisory group’s report." Steven Pearlstein in The Washington Post.
DOUTHAT: The problem with the White House's "no negotiations" strategy. "It makes it sound like the very idea of negotiating around the debt ceiling is unprecedented (which it isn’t) and a threat to the constitutional order (which it hasn’t been), and makes it seem like the Republican Party’s grave sin is the politicization of the debt ceiling per se(even though both parties have regularly politicized it), rather than the fact that the G.O.P. is trying to enter into debt ceiling negotiations in pursuit of politically-impossible goals." Ross Douthat in The New York Times.
SEIB: Why Democrats won't budge. "Republicans have several, sometimes conflicting goals in the current government-shutdown impasse. Democrats, by contrast, have just one. It's called "break the fever." Breaking the fever is code for ending the cycle of recurring, last-minute crises over spending bills and increases in the nation's borrowing limit—the debt ceiling. The White House believes these crises give outsize power to a minority of conservative House Republicans who don't have the strength to push their agenda into law but can, in a crisis, stop the action. More important, Democrats are convinced they must break the cycle now, or see much of the Obama second-term agenda sink away." Gerald F. Seib in The Wall Street Journal.
WILENTZ: Obama and the debt. "[The historical] record clearly shows that Congress intended the [14th] amendment to prevent precisely the abuses that the current House Republicans blithely condone...The Republican Senate leader, Benjamin F. Wade of Ohio, declared that by placing the debt “under the guardianship of the Constitution,” investors would be spared from being “subject to the varying majorities which may arise in Congress.”" Sean Wilentz in The New York Times.
Music recommendations interlude: Peggy Lee, "Fever."
ORSZAG: Are hospitals more efficient than they seem? "A new study suggests, however, that hospitals actually do gain patients when they provide better value. Economists Amitabh Chandra of Harvard University, Amy Finkelstein and Adam Sacarny of the Massachusetts Institute of Technology, and Chad Syverson of the University of Chicago examined how 5,000 hospitals treated some 3.5 million patients who suffered heart attacks. About a third of the patients died within a year of their heart attack, and the researchers used the variation in survival rates across hospitals to approximate the quality of care provided." Peter Orszag in Bloomberg.
MCARDLE: What engineers mean when they say 'infrastructure.' "The second thing to remember is that you should avoid the temptation to read “infrastructure” and start imagining whatever sort of infrastructure you think would be swell -- nicer airports, a high-speed rail line between the Hamptons and the Outer Banks, solar panels on every federal building. The ASCE is actually a bit cagey in its main report about where it proposes to spend the money, but if you dig around a bit, you see that it wants the bulk of the money to go to “surface transportation.” And if you look at the section on surface transportation, you’ll find that ASCE wants to spend the bulk of that money on … highways." Megan McArdle in Bloomberg.
Science interlude: Self-sustaining nuclear fusion?
2) How HealthCare.Gov broke
Why did HealthCare.Gov stall out? It had to do with a software crash. "The technical problems that have hampered enrollment in the online health insurance exchanges resulted from the failure of a major software component, designed by private contractors, that crashed under the weight of millions of users last week, federal officials said Monday. Todd Park, President Obama’s top technology adviser, said the failure occurred in the part of the Web site that lets people create user accounts at the beginning of the insurance sign-up process. The crash prevented many people from viewing any of their insurance options or gaining access to information on what federal subsidies might be available." Michael D. Shear and Robert Pear in The New York Times.
Obamacare is knock, knock, knockin' on California's door. "No place has done more to embrace the health-care law than California. In stark contrast to the 26 states that have chosen not to expand Medicaid, excluding millions of poor people from the law’s potential benefits, California is among those extending free health insurance to families whose incomes are as much as $26,951 for a family of three. Officials here got a head start on the Medicaid expansion by enrolling hundreds of thousands of eligible people into county-run health programs. Many of those enrollees will be transferred to the state’s Medicaid program in January." Michael A. Fletcher in The Washington Post.
Measuring Obamacare enrollment is actually kind of tricky. "[E]ven with those initial numbers, deciding who counts as an Obamacare enrollee can be tricky business. That's because there are a number of steps in the application process for health insurance under the Affordable Care Act. And states are using lots of different metrics to determine how well their new insurance marketplaces are going." Sarah Kliff in The Washington Post.
We're not getting federal enrollment data until November. "The Obama administration is not planning on releasing enrollment numbers on Obamacare until November, senior administration officials said Monday, as they continued to insist that delays with the healthcare.gov website were entirely the result of high volume. 'We will release monthly data when it is available,' a senior administration official told CNN. 'We have not given an exact date, but it will be after end of month and we will work with states to collect their data to have a good picture of what's happening across the country.'" Jake Tapper in CNN.
What everyone is getting wrong about HealthCare.gov. "Healthcare.gov's problems are almost certainly occurring at a deeper level in the system, making it very difficult, if not impossible, for an outsider to gauge how serious those problems are...It is much more likely that Healthcare.gov's problems are related to the more expensive operations involving the insurance application process itself. Checking users' eligibility and filing their applications requires integration with a separate and more complex set of systems." Tom Lee in The Washington Post.
Coding issues are creating trouble for HealthCare.Gov. "The website is troubled by coding problems and flaws in the architecture of the system, according to insurance-industry advisers, technical experts and people close to the development of the marketplace. Among the technical problems thwarting consumers, according to some of those people, is the system to confirm the identities of enrollees. Troubles in the system are causing crashes as users try to create accounts, the first step before they can apply for coverage." Christopher Weaver, Shira Ovide and Louise Radnofsky in The Wall Street Journal.
And you thought you had seen it all interlude: "Harold Hackett has sent out over 4,800 messages in a bottle from Prince Edward Island...and since 1996 he has received over 3,100 responses from all over the world."
3) Who's pushing the Fed to the exits?
Tense negotiations inside Fed muddle markets. "A small group of Fed officials has been privately pushing Fed Chairman Ben Bernanke to plan an exit from his signature program, said several people familiar with the closed-door deliberations. But glimmers of a weakening economy prompted the Fed in September to keep the program going—surprising markets primed by months of central-bank suggestions that a wind-down was nearing...Privately, Mr. Stein and two other governors, Jerome Powell and Elizabeth Duke, were a driving force behind efforts to limit the program's growth, according to people involved in the deliberations. All three supported Mr. Bernanke's efforts to charge up a weak economy but were uneasy about the program's potential side effects and the growing size of the Fed's holdings." Jon Hilsenrath in The Wall Street Journal.
When Ben Bernanke speaks, the world listens — and pays for it. "Officials at the International Monetary Fund are nervous that a shift in Fed policy may wreck the economies of one or more countries around the world. In the latest of a series of papers on the topic, the IMF estimated Monday that $404.4 billion fled from global bond and stock investments when Bernanke said at a congressional hearing: “If we see continued improvement and we have confidence that that is going to be sustained, then we could, in the next few meetings, take a step down in our pace of purchases.”" Howard Schneider in The Washington Post.
Oh my god this is so great interlude: librarian-shaming.tumblr.com.
4) Zichal out
Obama’s climate adviser plans to step down. "The White House’s senior energy and climate adviser, Heather Zichal, is leaving the administration, officials said Monday, despite the president’s entreaties to stay...In an effort to keep Zichal on board, White House officials raised the possibility of her chairing the Council on Environmental Quality in the event that its chair, Nancy Sutley, would leave, according to people familiar with the decision who demanded anonymity in order to discuss sensitive personnel issues." Juliet Eilperin in The Washington Post.
US claims title of world’s biggest oil-and-gas producer, feds say. "The United States will vault past Russia this year to clearly become the world’s top producer of oil and natural gas combined, according to a new federal estimate. An Energy Information Administration (EIA) report Friday notes that apples-to-apples comparisons between nations' data are “not always easy,” and that the U.S. and Russia were “roughly equivalent” in 2011 and 2012." Ben German in The Hill.
Shell opens Iraqi oil field. "[It] opened Iraq's Majnoon oil field in the south of the country on Sunday, aiming to reach 175,000 barrels a day in the coming weeks and passing a big milestone for both Shell and Iraq...Majnoon, located near the city of Basra in southern Iraq, is one of four major fields that the country is developing with foreign companies and is vital to its ambitious plan to increase its output to at least 6 million barrels per day from the current production level of 3.2 million...Iraq signed a series of service contracts with major oil companies such as Shell, Exxon Mobil Corp., Total, BP PLC, and Eni SpA at the end of 2009 to develop its oil fields." Summer Said in The Wall Street Journal.
Journalism interlude: Fox News has some interesting new digs.
5) A different sort of NSA problem
Meltdowns hobble NSA data center. "Chronic electrical surges at the massive new data-storage facility central to the National Security Agency's spying operation have destroyed hundreds of thousands of dollars worth of machinery and delayed the center's opening for a year, according to project documents and current and former officials. There have been 10 meltdowns in the past 13 months that have prevented the NSA from using computers at its new Utah data-storage center, slated to be the spy agency's largest, according to project documents reviewed by The Wall Street Journal." Siobhan Gorman in The Wall Street Journal.
Obama administration decides NSA spying is ‘essential,’ but oversight of NSA is not. "While the National Security Agency (NSA) has largely escaped the government shutdown, the panel investigating NSA spying practices has effectively been frozen. Politico reports that as of Friday, the five-member Review Group on Intelligence and Communications Technologies lost its staff to the furlough associated with the government shutdown. The group, which is largely comprised of intelligence community and White House insiders, was initially scheduled to remain running during the furlough. However, former acting CIA director Michael Morell declined to attend a scheduled meeting Tuesday, citing the shutdown." Andrea Peterson in The Washington Post.
Reading material interlude: The best sentences Wonkblog read today.
This one photo shows how humiliating the government shutdown is for the United States. Zachary A. Goldfarb.
The 13 reasons Washington is failing. Ezra Klein.
How scared should you be about the debt ceiling? Introducing the Wonkblog Daily Default Dashboard! Zachary A. Goldfarb and Darla Cameron.
Why Silicon Valley has been silent on the shutdown. Lydia DePillis.
The Supreme Court is asking more questions than it once did. Adam Liptak in The New York Times.
Wonkbook is produced with help from Michelle Williams.