Wonkbook: The shutdown is a total disaster for the GOP

October 11, 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.

(Photo by Jim Lo Scalzo/EPA)
(Photo by Jim Lo Scalzo/EPA)

Thursday's Wall Street Journal/NBC News poll hit the Republican Party like a bomb.

It found, as Gallup had, the Republican Party (and, separately, the Tea Party) at "all-time lows in the history of the poll." It found Republicans taking more blame for the shutdown than they had in 1995. It found more Americans believing the shutdown is a serious problem than in 1995.

Even worse for the GOP is what the pollsters called "the Boomerang Effect": Both President Obama and Obamacare are more popular than they were a month ago. Obamacare in particular gained seven points. (More poll highlights here, full results here.)

It's hard to overstate the magnitude of the GOP's strategic failure here: Obamacare's launch has been awful. More than a week after the federal insurance marketplaces opened, most people can't purchase insurance on the first try. But Republicans have chosen such a wildly unpopular strategy to oppose it that they've helped both Obamacare and its author in the polls.

This could've been a week when Republicans crystallized the case against Obamacare. Instead it's been a week in which they've crystallized the case against themselves.

And for what? In 2011, when Republicans last tried serious hostage taking, they managed to drive down both their numbers and President Obama's numbers. But even if they could manage that now -- and while the NBC/WSJ and Washington Post/ABC News polls both showed some improvement in Obama's numbers, an AP poll showed deterioration -- this isn't 2011.

In 2011, President Obama was going to be on the ballot against a Republican candidate who wasn't involved in the mess in Washington. The congressional GOP's kamikaze mission made sense as a way to aid an outsider challenger like Mitt Romney. But Obama won't be on any more ballots. Congressional Republicans will be. At this point, it's not a kamikaze mission. It's just suicide.

Senior Republicans -- who never wanted to be in this mess in the first place -- are increasingly desperate to get out. On Thursday, House Republicans floated a six-week delay of the debt ceiling and Senate Republicans floated a proposal that would reopen the government and raise the debt ceiling in return for repeal of the medical-device tax and a handful of other minor concessions.

Democrats didn't jump at either proposal. Their position is no policy negotiations until the government is reopened and the debt-ceiling is raised and they're seeing nothing in the polls to change their mind.

The problem for Republicans right now is they still believe they need to get something, anything, in return for funding the government and paying the bills. They promised their base concessions and they feel they need to deliver. But as of yet, they're still not prepared to give anything up -- at least not anything Democrats see as a concession.

The hope was that the pain of the shutdown and the Democrats' fear of the debt ceiling would give the GOP leverage. But all Democrats are seeing is a disaster for the GOP. And at this point, the GOP is seeing it, too.

Wonkbook's Number of the Day: 20.4 million. That's the number of Americans who make an annual income less than half of the government's official poverty line.

Wonkbook's Quote of the Day:  “He didn’t say yes. He didn’t say no,” said House Budget Committee Chairman Paul Ryan.

Wonkbook's Graph of the Day: Our graphics team has done some awesome work on how the shutdown affects departments.

Wonkbook's Top 5 Stories: 1) the shutdown sapped the debt ceiling; 2) bit by bit, understanding Obamacare's tech failure; 3) Yellen the prepared; 4) the CIA missed Snowden; and 5) extreme poverty on the rise.

1) Top story: A shutdown a day keeps the debt ceiling away

Where yesterday's talks between Obama and Republicans leave off? "President Obama opened talks with House Republicans on Thursday about their plan to lift the federal debt limit through late November, raising hopes that Washington would avert its first default on the national debt. But after a 90-minute meeting at the White House, the two sides remained at odds over how and when to end the government shutdown — now in its 11th day — with Obama insisting that Republicans reopen federal agencies before negotiations over broader budget issues can begin...In the Senate, top Republicans began crafting a proposal that would reopen the government and raise the federal debt limit for as long as three months — an approach closer to the terms Obama has set to end the standoff. The developments meant that bipartisan negotiations were suddenly underway on two separate tracks Thursday after weeks of stalemate. Major questions remain, however, about the path ahead." Lori Montgomery and Paul Kane in The Washington Post.

...Read the White House's official statement. "The President had a good meeting with members of the House Republican Leadership this evening; the meeting lasted approximately an hour and a half. The President, along with the Vice President, Treasury Secretary Lew, Denis McDonough and Rob Nabors listened to the Republicans present their proposal.  After a discussion about potential paths forward, no specific determination was made.  The President looks forward to making continued progress with members on both sides of the aisle.  The President’s goal remains to ensure we pay the bills we’ve incurred, reopen the government and get back to the business of growing the economy, creating jobs and strengthening the middle class." Ezra Klein in The Washington Post.

Graph: Turns out the stock market rises when catastrophic debt default is off the tableNeil Irwin in The Washington Post.

What Obama was asking during those talks. "Obama repeatedly pressed House Republicans to open the government, asking them “what’s it going to take to” end the shutdown, those sources said. He questioned why the government should remain closed if both sides agreed to engage in good-faith negotiations on the budget, according to a Democratic source briefed on the meeting." Jake Sherman, Burgess Everett, and John Bresnahan in Politico.

@JimPethokoukis: ObamaCare is alive, the debt ceiling crisis is dead

Treasury gave Congress a 'Lew-down' on what's going to happen if we break the debt ceiling. "Mr. Lew, in testimony to the Senate Finance Committee, was careful not to reveal how the Treasury Department would proceed if the borrowing limit wasn't raised in time...Given current spending and tax levels, the government would probably have to cut spending by at least 30%—or $100 billion—a month if the borrowing limit wasn't increased. Mr. Lew said the government might have to choose between paying Social Security and veterans benefits, and said Medicare and military pay could also be affected. "There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets," he said." Damian Paletta and Jeffrey Sparshott in The Wall Street Journal.

Primary source: Lew's prepared testimonyNeil Irwin in The Washington Post.

Caught up? Good. Here's what's happening today. "Congress and President Obama headed for a weekend on the brink after the first set of bipartisan talks emerged Thursday ahead of next week’s deadline to give the Treasury more borrowing authority and continue the effort to reopen the federal government. The key moment Friday may come when Obama hosts Senate Republicans at the White House, finishing his meetings with all members of all four congressional caucuses this week...11:15 a.m., Senate Republicans head to the White House. Minority Leader Mitch McConnell (R-Ky.), who has jumped into bipartisan talks on the Senate side, leads the 46-senator GOP caucus to a meeting with Obama." Paul Kane in The Washington Post.

Chart: How the debt standoff could end, in one flowchart from NomuraNeil Irwin in The Washington Post.

Did the shutdown just save the world? "The idea was that if House Republicans got their shutdown Oct.1, they would be feeling enough political pain by Oct. 17 that they wouldn't dare add to it by breaching the debt ceiling. And that's exactly what happened." Ezra Klein in The Washington Post.

Interview: Tom Coburn: ‘The president doesn’t have the confidence of Congress that he’ll do what he says.’ Ezra Klein in The Washington Post.

Senate Republicans would like to find a longer-term solution. Can that happen? "A large group of Senate Republicans is approaching influential Senate Democrats in an attempt to find a bipartisan, longer-term solution to the shutdown and debt ceiling logjam. The Republicans are floating various proposals based off the rough framework provided by Sen. Susan Collins (R-Maine) earlier this week...Ideas being exchanged include a one-year extension of government funding at sequestration levels with more agency spending flexibility, a long-term debt limit increase of more than a year and a repeal of Obamacare’s medical device tax, changes to the Independent Payment Advisory Board and income means testing for Obamacare subsidies." Burgess Everett, Seung Min Kim, and John Bresnahan in Politico.

@BobCusack: All of President Obama's meetings Friday are closed press, including meeting w/ small biz owners on shutdown. Negotiation time.

The Republicans want to take away Treasury’s ‘extraordinary measures’. Wait, what? "[T]hey have in mind a bill that would also permanently remove some of the extraordinary tools that the Treasury Department has that enables it to delay the day of reckoning when the United States comes up against the debt ceiling...One of the dirty secrets of the Treasury's cash management function is that very few people on earth understand how it really works, and almost all of those people work for the Treasury. So Republicans on Capitol Hill have felt that they don't have reliable information on when exactly they really, really need to raise the debt ceiling and when Jack Lew & Co. have more tools in their bag of cash management tricks." Neil Irwin in The Washington Post.

Should Obama just ignore the debt ceiling? These law professors think so. "Buchanan and Dorf spend a lot of time in their paper looking at possible rules for when the administration is trapped in a constitutional bind like this...Their basic argument is that, caught in this situation, the president should try to "minimize the unconstitutional assumption of power" and "preserve, to the extent possible, the ability of other actors to undo or remedy constitutional violations." Ignoring the debt ceiling is likely the least harmful route here, partly because it's the simplest and least disruptive." Brad Plumer in The Washington Post.

@DouthatNYT: Why, it's almost as if the longer the shutdown goes on, the worse the polling gets for the party that's blamed for it.

Republicans walk into a poll. "The latest NBC/WSJ poll is just a disaster for the GOP. By a 22-point margin, the public thinks the Republican Party is more to blame for the shutdown than President Obama. NBC's Mark Murray notes that that's "a wider margin of blame for the GOP than the party received during the poll during the last shutdown in 1995-96."" Ezra Klein in The Washington Post.

Explainer: How the shutdown affects departmentsDarla Cameron, Josh Hicks and Masuma Ahuja in The Washington Post.

It's pretty awful being furloughed. "The paycheck federal workers have been dreading hit bank accounts across the region Friday, representing salaries cut in half for most idled employees. The next payday will be all zeros, and with furloughs dragging on, civil servants are settling into a financial crouch, slashing expenses, canceling vacations, tapping retirement savings and taking second jobs...Federal workers say they were hugely relieved by last week’s House vote to guarantee the missed pay after the furlough’s over. But that hasn’t eased their anxiety over the bills stacking up in the meantime." Steve Hendrix in The Washington Post.

Explainer: Nine ways the shutdown will get more painful as it drags onBrad Plumer in The Washington Post.

...And the effects of the shutdown ripple out beyond federal workers. "In Pittsburgh, Tim Russell was on the cusp of living his dream: After two years of work, after lining up federal and state licenses and buying equipment to make rum, he started making his first batch last week. Then the federal Alcohol and Tobacco Tax and Trade Bureau closed shop. With no one to approve the “Maggie’s Farm Rum” labels, Russell can’t sell a drop. On Alaska’s Upper Kenai River, the silver salmon and rainbow trout are huge and plentiful, but Fred Telleen’s fly fishing guide service this week has been reduced to processing cancellations and refunds, because the Kenai National Wildlife Refuge is closed. Telleen lost $1,100 on Monday alone. In Bridgeport, Conn., Renate Seymour, an office manager at a factory, suddenly had to make alternative arrangements for her 4-year-old grandson, Jeremiah, who can no longer attend Head Start because classes shut down when the government closed up." Marc Fisher and Holly Yeager in The Washington Post.

@philipaklein: I believe polls finding GOP being damaged by shutdown. Then again, I believed polls finding Romney would lose.

...What CFOs are saying about the shutdown. "As companies begin reporting third-quarter financial results this week, executives are warning that a long-term government shutdown could crimp their businesses, especially if they are close to federal installations or have customers near the poverty line. Scores of companies in nearly 200 public filings have already cautioned investors that their businesses could suffer from the shutdown." Maxwell Murphy and James Willhite in The Wall Street Journal.

BLINDER: The Republicans' flirtation with disaster. "What damage have we endured already from the partial government shutdown? Several private firms estimate that each week of shutdown trims the GDP growth rate for the fourth quarter of 2013 by something around 0.15 to 0.2 of a percentage point—with virtually all of that made up in the first quarter of 2014. If you don't care about messing up the lives of about 800,000 government employees, plus tens of millions of Americans who depend on their services, that may not seem like much. But there is also a less tangible, though perhaps more durable, cost of making the United States of America look clownish in the eyes of the world." Alan S. Blinder in The Wall Street Journal.

@jimantle: Remember: This strategy was supposed to produce a backlash against Democrats who wouldn't defund Obamacare.

KLEIN: Is the U.S. political bubble about to burst? "The markets’ faith in the U.S. is long-standing and not easily dislodged. The dollar has been the world’s reserve currency for decades, with the foreigners who hoard our cash providing essentially interest-free loans to the U.S. Treasury. The global appetite for Treasury bills produces similar gains, with purchasers -- including foreign governments buying in bulk -- lending the U.S. government money at minimal, even effectively negative, rates. The result is a huge economic advantage for the United States. All this comes from a deep confidence that the U.S. political system will make sound decisions -- a confidence, at this point, that few of the system’s participants share and one that’s hard to square with the evidence of the past few years." Ezra Klein in Bloomberg.

SILVER: 6 big takeaways from the shutdown. "Democrats face extremely unfavorable conditions in trying to regain the House. Even if the shutdown were to have a moderate political impact — and one that favored the Democrats in races for Congress — it might not be enough for them to regain control of the U.S. House. Instead, Democrats face two major headwinds as they seek to win back Congress. First, there are extremely few swing districts — only one-half to one-third as many as when the last government shutdown occurred in 1996. Some of this is because of partisan gerrymandering, but more of it is because of increasingly sharp ideological divides along geographic lines." Nate Silver in FiveThirtyEight.

KRUGMAN: Dealing with default. "A report last year from the Treasury Department suggested that hitting the debt ceiling would lead to a “delayed payment regime”: bills, including bills for interest due on federal debt, would be paid in the order received, as cash became available...Some advocates of prioritization seem to believe that everything will be O.K. as long as we keep making our interest payments. Let me give four reasons they’re wrong...[P]rioritizing interest payments would reinforce the terrible precedent we set after the 2008 crisis, when Wall Street was bailed out but distressed workers and homeowners got little or nothing. We would, once again, be signaling that the financial industry gets special treatment because it can threaten to shut down the economy if it doesn’t." Paul Krugman in The New York Times.

@jpodhoretz: Gee, what do you think we would be talking about right now if this hadn't happened? The disastrous Obamacare rollout maybe?

MATTHEW C. KLEIN: Why prioritizing payments is a threat to democracy. "It would transfer the power to determine the funding of government programs from Congress to the executive branch. A rump of representatives could collaborate with a president to use the debt ceiling and the prioritization process to defund whatever programs they disliked, irrespective of what the rest of America’s legislators wanted." Matthew C. Klein in Bloomberg.

Music recommendations interlude: M. Ward, "Rave On," 2009.

Top opinion

WAGNER AND WEITZMAN: Why you really need to care about uncertainties in climate science. "What is scarier still is the uncertainty about the truly extreme outcomes. Our own calculations estimate that there is a roughly 5 percent to 10 percent chance that the eventual average temperature could be 6 degrees Celsius higher, rather than 3. What this would mean is outside anyone’s imagination, perhaps even Dante’s. We can obsess about all of these scenarios. A rise of three degrees would be bad enough. But when you factor in the uncertainty, there is even more reason to put global warming on an even more sharply decreasing path...Imprecise truths are the most inconvenient ones. We know enough to act now. What we don’t know should prompt us to even more decisive action." Gernot Wagner and Martin L. Weitzman in The New York Times.

REINHARDT: The dubious case for occupational licensing. "Organized medicine invariably opposes wider scopes of practice and independent practice of nonphysician health professionals, ostensibly not to protect economic turf but to protect the quality of patient care. Curiously, one rarely finds those to be protected by this paternalism vocally on organized medicine’s side. Not many economists today are buying the medical profession’s position on this issue. More typically, economists lean toward Friedman’s more cynical view. They regard professional licensure of any kind – almost always proposed by the very professionals or occupations to be licensed – mainly as a means to endow the licensees with monopolistic market power." Uwe E. Reinhardt in The New York Times.

SOLTAS: Yellen and Obama have some very different views on monetary policy. "Janet Yellen, at long last President Barack Obama's nominee for the next chairman of the Federal Reserve, is also something else: His first appointment focused on jobs and economic growth. It's a sad fact that, five years into his presidency, Obama has shown little interest in nudging monetary policy toward growth -- or even just appointing growth-minded policy makers. Yellen changes that. She has been outspoken about the need for the central bank to support a U.S. economic recovery with accommodative monetary policy -- and, in particular, to reduce unemployment. Meanwhile, Obama has been an outspoken, if not well-argued, advocate for the hawkish view that continued easing creates risks of financial bubbles and instability." Evan Soltas in Bloomberg.

OLAH AND COX: A chemistry breakthrough, an energy revolution. "Thanks to recent developments in chemistry, a new way to convert carbon dioxide into methanol—a simple alcohol now used primarily by industry but increasingly attracting attention as transportation fuel—can now make it profitable for America and the world to reduce carbon-dioxide emissions...[R]esearchers have discovered how to produce methanol at significantly lower cost than gasoline directly from carbon dioxide. So instead of capturing and "sequestering" carbon dioxide—the Obama administration's current plan is to bury it—this environmental pariah can be recycled into fuel for autos, trucks and ships." George A. Olah and Chris Cox in The Wall Street Journal.

PUZDER: Obamacare is pushing workers into part-time jobs. "The evidence that ObamaCare is having a negative impact on hiring is unequivocal, abundant and consistent with common sense...Between Jan. 1 and June 30, according to the Bureau of Labor Statistics, the economy added 833,000 part-time jobs and lost 97,000 full-time jobs, for net creation of 736,000 jobs. In reality, the economy overall added no full-time jobs. Rather, it lost them." Andrew Puzder in The Wall Street Journal.

NOONAN: Now is the time to delay Obamacare. "[T]he real story of last week, this week and the future, the one beyond the shutdown, the one that normal people are both fully aware of and fully understand, and that is the utter and catastrophic debut of ObamaCare. Even for those who expected problems, and that would be everyone who follows government, it has been a shock...The Republicans should press harder than ever to delay ObamaCare—to kick it back, allow the administration at least to create functioning websites, and improve what can be improved." Peggy Noonan in The Wall Street Journal.

Genius interlude: 360-degree views of the offices of Nobel Prize laureates.

2) Understanding Obamacare's tech failure, bit by bit

This is the first really exact account of what's wrong at HealthCare.Gov. "Much of the problem stems from a design element that requires users of the federal site, which serves 36 states, to create accounts before shopping for insurance, according to policy and technology experts. The site, healthcare.gov, was initially going to include an option to browse before registering, but that tool was delayed, people familiar with the situation said. The decision to move ahead without that feature proved crucial because, before users can begin shopping for coverage, they must cross a busy digital junction in which data are swapped among separate computer systems built or run by contractors including CGI Group Inc., the healthcare.gov developer; Quality Software Services Inc., a UnitedHealth Group Inc. unit; and credit-checker Experian PLC. If any part of the web of systems fails to work properly, it could lead to a traffic jam blocking most users from the marketplace. That's just what happened: On Oct. 2, officials identified a bottleneck where those systems intersect at a software component sold by Oracle Corp. that still hasn't been cleared." Christopher Weaver and Louise Radnofsky in The Wall Street Journal.

California embraces Obamacare, and it looks like it's working so far. "With enthusiastic backing from state officials and an estimated seven million uninsured, California is a crucial testing ground for the success of President Obama’s health care law. It is building the country’s largest state-run health insurance exchange and has already expanded Medicaid coverage for the poor. Officials hope that the efforts here will eventually attract more than two million people who are currently uninsured...The Obama administration is heavily invested in California’s success. It has poured more than $910 million into the effort because California’s uninsured represent an estimated 15 percent of those without insurance nationwide." Jennifer Medina in The New York Times.

...But Florida isn't embracing Obamacare, and things are already a mess. "[T]he State Legislature roundly rejected the law, refusing to create a state insurance exchange and punting it to the federal government to run the new insurance market. It also rejected $51 billion in federal funds that was available over 10 years to expand Medicaid coverage for the state’s poor. As the day neared for consumers to enroll in insurance plans, state officials announced that so-called navigators — a group assigned to help people sign up — would be barred from state health offices just like all other outside groups. But blame this week shifted to the federal government. Its Web site remains so error-prone that the overwhelming majority of Floridians who have tried to buy affordable health insurance have had little luck." Lizette Alvarez in The New York Times.

Part of this has to do with the fact that state exchanges are working but the federal government's isn't. "After quadrupling its server capacity, New York now says users aren't experiencing major delays, and officials believe any technical issues have been fixed. The state says 58,283 people completed applications for health insurance through its exchange as of Wednesday morning...Maryland, which is running its own exchange, has a similar requirement to the federal exchange. Its site temporarily crashed last week. State officials said they largely fixed that problem but were still grappling with others, including a cost calculator that they said might underestimate the out-of-pocket medical costs consumers would face. State officials appeared to be more nimble than the federal government. California's exchange, called Covered California, had to be taken down over the weekend for software fixes but got back up quickly." Amy Schatz, Josh Dawsey, and Jennifer Corbett Dooren in The Wall Street Journal.

Blue Cross is winning the most new health-insurance enrollees. "What is not yet clear is whether the Blues plans are offering low prices to gain customers, only to raise prices in later years. And while people may be drawn to their strong brand name, the Blues are offering some plans that are very different from the ones people have through employers, with many fewer choices of doctors and hospitals. The Blue Cross plans, including the profit-making ones run by WellPoint, also have the most to lose if they do not participate in the exchanges. Because so much of their existing business comes from selling policies to individuals and small groups, unlike the national insurers that cater to large employers, they cannot risk having their existing customers switch to a competitor." Reed Abelson in The New York Times.

A graph that Wonkbook really doesn't like interlude: Hey, Mr. TV Producer, what's with the stupid?

3) Yellen comes through as incredibly well prepared in every Fed transcript

How Janet Yellen will handle her confirmation hearing. "Janet Yellen often shows up for policy meetings at the Federal Reserve armed with carefully prepared statements mapping out her positions on key issues. Her speeches are often backed up with precisely footnoted documents. She rarely strays from her prepared text...Ms. Yellen has spent far less time on Capitol Hill than some of her predecessors. Her 2010 appearance was a confirmation hearing for her current position as Fed vice chairwoman. In 1996, she discussed consumer-lending trends." Kristina Peterson and Jon Hilsenrath in The Wall Street Journal.

Watch this: It's a good backgrounder on Yellen with some video clips of Yellen speakingThe New York Times.

Emerging markets, though, still fear the Fed's taper. "The episode revealed major weaknesses in many developing economies and drove the International Monetary Fund to slash its growth forecasts for many, including India, Mexico and Brazil. Now, authorities in those countries are racing against time to bolster their economies before the Fed acts. Many of them are gathered here in Washington this week for meetings held by the International Monetary Fund and the World Bank." Ian Talley and Mitsuro Obe in The Wall Street Journal.

The story that you'd have otherwise missed today: U.S. doing big rethink of how it releases economic data. "Federal officials are discussing changes to how the government releases sensitive economic data, seeking to bring the system in line with fast-moving financial markets. While the talks are preliminary, officials are driven by their growing concern about leaks and their unease that high-speed trading firms can trade on market-moving numbers before other investors, say people familiar with the discussions. The talks have covered a number of options, including eliminating the current system, which releases data via embargoed news releases to the media; building a single, technologically secure facility for all government agencies to use to distribute data; and publishing economic data directly on the Internet." Brody Mullins and Colleen McCain Nelson in The Wall Street Journal.

The Labor Department finally gets its act together and fixes initial-claims figures. "The number of Americans applying for unemployment benefits rose by 66,000 last week to a seasonally adjusted 374,000, an increase largely caused after California processed a huge backlog of claims and after the partial government shutdown prompted some companies to cut jobs...A government spokesman said about half the weekly increase occurred in California, where officials processed applications that had been delayed several weeks by a computer upgrade. One-quarter of the increase reflected applications from employees at government contractors and others affected by the shutdown." The Associated Press.

Lawsuit claims NY Fed fired regulator who raised questions about Goldman Sachs. "In the spring of 2012, a senior examiner with the Federal Reserve Bank of New York [Carmen Segarra] determined that Goldman Sachs had a problem. Under a Fed mandate, the investment banking behemoth was expected to have a company-wide policy to address conflicts of interest in how its phalanxes of dealmakers handled clients. Although Goldman had a patchwork of policies, the examiner concluded that they fell short of the Fed’s requirements...Before she could formalize her findings, Segarra said, the senior New York Fed official who oversees Goldman pressured her to change her view." Jake Bernstein in The Washington Post.

Oh my god this is so great interlude: All the bloopers in "It's Always Sunny in Philadelphia," seasons 2-7.

4) How did Snowden slip through the cracks?

CIA knew about Snowden in 2009 but said nothing to the NSA. "Just as Edward J. Snowden was preparing to leave Geneva and a job as a C.I.A. technician in 2009, his supervisor wrote a derogatory report in his personnel file, noting a distinct change in the young man’s behavior and work habits, as well as a troubling suspicion. The C.I.A. suspected that Mr. Snowden was trying to break into classified computer files to which he was not authorized to have access, and decided to send him home, according to two senior American officials. But the red flags went unheeded...The supervisor’s cautionary note and the C.I.A.’s suspicions apparently were not forwarded to the N.S.A. or its contractors, and surfaced only after federal investigators began scrutinizing Mr. Snowden’s record once the documents began spilling out, intelligence and law enforcement officials said." Eric Schmitt in The New York Times.

Members of Congress warn about ‘fig leaf’ legislation meant to protect the NSA. "Senator Ron Wyden (D-Ore.), among the most vocal opponents of NSA surveillance, voiced concerns about the issue during a Cato Institute conference Wednesday. Wyden, along with fellow Senators Mark Udall (D-Colo.), Richard Blumenthal (D-Conn.) and Rand Paul (R-Ky.), introduced a reform package in recent weeks...Senate Intelligence Committee Chair Dianne Feinstein (D-Calif.) is among those with legislative proposals that would codify NSA's bulk collection domestic phone records." Andrea Peterson in The Washington Post.

Twitter interlude: Musicians read mean tweets about themselves live on television.

5) Extreme poverty on the rise

Poverty has stopped rising since the recession, but... "Forty-four percent of America's poor are considered to be in "deep poverty"—defined as an income 50% or more below the government's official poverty line. That percentage of Americans in deep poverty is up from 42% before the recession and near the highest level since data became available in 1975, according to the Census Bureau's Current Population Survey. Last year, 6.6% of Americans, or 20.4 million people, were classified as in deep poverty, up from 4.5% in 2000, when the economy was strong. The share of Americans in deep poverty has climbed over the past four decades, nearly doubling from 3.7% in 1975...Economists cite several reasons for the rise in deep poverty, including cutbacks on cash assistance for very low-income families with children since the welfare overhaul of the 1990s and the nation's lackluster economic recovery and still-high unemployment rate since the 2007-09 recession." Neil Shah in The Wall Street Journal.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

The Republicans’ worst poll yetEzra Klein.

Obama to Boehner: NoEzra Klein.

Turns out the stock market rises when catastrophic debt default is off the tableNeil Irwin.

Should Obama just ignore the debt ceiling? These law professors think soBrad Plumer.

Tom Coburn: ‘The president doesn’t have the confidence of Congress that he’ll do what he says.’ Ezra Klein.

Nine ways the shutdown will get more painful as it drags onBrad Plumer.

How the debt standoff could end, in one flowchartNeil Irwin.

Treasury secretary: We spent 224 years building our credit. Only Congress can act to protect itNeil Irwin.

The Republicans want to take away Treasury’s ‘extraordinary measures’. Wait, whatNeil Irwin.

The shutdown just saved the worldEzra Klein.

California just passed America’s first law expanding abortion access since 2006Sarah Kliff.

Et Cetera

Important weekend longreads: The last days of Bush-CheneyPeter Baker in The New York Times. And inside The Guardian, a newspaper long on ambition and short on resourcesKen Auletta in The New Yorker.

At some colleges, tuition is falling. But so is aid. Really, what's happening is less price discriminationMelissa Korn in The Wall Street Journal.

Pension and medical costs undermine fiscal health of U.S. citiesMichael A. Fletcher in The Washington Post.

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

Wonkbook is produced with help from Michelle Williams.

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Brad Plumer · October 10, 2013