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 Washpost dot com. To read more by Ezra and his team, go to Wonkblog.
Wonkbook's Number of the Day: 16. That's how many days Congress has to raise the debt ceiling. A new report from Treasury Secretary Jacob Lew says the U.S. will hit it on February 7.
Wonkbook's Graph of the Day: The U.S. government keeps predicting we’ll drive more than we actually do.
Wonkbook's Top 5 Stories: (1) Obamacare's weak mandate; (2) look, ma, no safety net; (3) production grows, but not employment; (4) Supreme Court might regret leaving gay marriage to the states; and (5) the path to better elections.
1. Top story: The individual mandate might not be strong enough
Why Republicans are focusing on 'risk corridors.' "Conservative wonks and Republican lawmakers are coalescing around a new strategy to sabotage Obamacare by repealing a temporary piece of the law designed to hold down premiums in the event of major market disruptions. The provision -- called "risk corridors," but dubbed the "Obamacare bailout" by the law's opponents -- seeks to stabilize costs by creating a pot of money that takes in funds from insurers who enroll healthier customers and uses it to pay out insurers who enroll sicker customers. It's a safety valve that sunsets after 2016. The repeal push is clever messaging in a sense because it lets conservatives snatch the mantle of populism from liberals against wealthy insurance companies. But it comes with its share of dangers, too." Sahil Kapur in Talking Points Memo.
Explainer: What are "risk corridors"? Louise Radnofsky and Jennifer Corbett Dooren in The Wall Street Journal.
Study: Young adults lack incentive to buy Obamacare coverage. "The conservative American Action Forum (AAF) released a study on Tuesday saying that the individual mandate penalty may never be substantial enough an incentive to get young adults to buy into the ObamaCare exchanges. The study finds that after accounting for cost-sharing and subsidies in 2014, it would still be cheaper for 86 percent of young adults to forgo coverage and to pay the individual mandate instead. That percentage decreases to 71 in 2015, and 62 in 2016, as the individual mandate penalty goes up." Jonathan Easley in The Hill.
A program bigger than Covered California. "[I]t's puzzling that nearly no one fussed over another huge figure: the 680,000-plus residents who signed up for the state's Low Income Health Plan -- perhaps the biggest element of Obamacare that got the smallest share of attention...A recent report suggested that ED utilization was flat-- or even fell -- among LIHP enrollees, although more comprehensive data suggests that there was a short-lived spike. But that should be within expectations, suggested Gerald Kominski, director of UCLA's Center for Health Policy Research." Dan Diamond in California Healthline.
@ddiamond: If you report on what experts call the “most underreported story” in Obamacare, is it still underreported? Asking for a friend.
Obamacare's gap, as seen in western North Carolina. "[F]or nine out of ten of the people she talks with, she says, it seems as if there’s nothing she can do. They’re too poor to qualify for affordable health insurance in North Carolina, because they're in what’s called “the coverage gap:” They don’t earn enough to qualify for a subsidy under the health law, and they can’t get Medicaid because North Carolina is one of the 23 states that decided not to expand the program under the health law. The expansion covers childless, low-income adults who previously didn't get qualify for Medicaid. “I take someone who’s working poor, I ask them to come see me, and then I find out that not only are they poor, but they’re too poor for me to help. It’s almost as if I wished I hadn’t seen them,” says Buckner, who grew up in the area." Jenny Gold in Kaiser Health News.
Explainer: Thirteen charts that explain how Roe v. Wade changed abortion rights. Sarah Kliff in The Washington Post.
Target is dropping insurance for some because of Obamacare. That could be good news for workers. "A hypothetical 25-year-old Target sales floor leader, for example, who earns $15 an hour and works 29 hours per week would qualify f0r a monthly health-care subsidy of $96 if Target does not offer insurance. The worker could not access that subsidy if Target did offer coverage -- but the worker would then, of course, have access to that employer plan. Generally speaking, those who will get the best deal here are the workers with the lowest salaries because, for the first time, their premium will be directly tethered to the amount of money they earn." Sarah Kliff in The Washington Post.
FEYMAN: Why risk corridors don't give bailouts. "[P]erhaps the most important point here is this: any conservative reform plan for universal coverage will have to use similar methods of risk adjustment. The point here is simple – if you want insurers to participate more broadly in the individual market, you’ll need to offer a carrot to offset the unavoidable uncertainties. And railing against risk corridors now will make them a hard sell further down the road. Risk adjustment mechanisms get you the buy-in of insurers, but they also helps keep premiums at manageable levels while insurers develop enough experience to properly price plans on their own. This helps encourage people to enroll in these plans, which in turn helps insurers develop the necessary pricing experience – resulting in a virtuous cycle." Yevgeniy Feyman in Forbes.
@daveweigel: This is Rubio's chance to demand the end of the Obamacare risk corridors in any debt limit deal. #giggity
PONNURU: Do conservatives want to bail out Obamacare? "If conservatives wanted to make the premiums on the exchanges as low as possible, they would be for toughening the individual mandate to get more healthy people to join the pool. They’re against that idea, because they don’t think shoring up Obamacare is worth the conscription of more social resources. They should follow that logic in this case, too. " Ramesh Ponnuru in Bloomberg.
Music recommendations interlude: Ornette, "Crazy," remix, 2011.
KLEIN: Pining for LBJ, we got Christie. "Christie has been a beneficiary of LBJ nostalgia. He’s a tough Republican governor in a blue state facing a Democratic legislature. He yells at people who oppose him. He swaggers across the national stage...We like our elected leaders to be stronger than the formal powers we give them. So they are tempted to exert power through informal means that we don’t always approve of when they’re exposed. The alternative is a disappointed electorate -- and more LBJ nostalgia." Ezra Klein in Bloomberg.
YGLESIAS: Can America afford innovation? "To many conservatives, recent attention paid to income inequality is at best a distraction from the real challenge of growth and innovation. But in reality these issues are inextricably linked. The development of new and better kinds of products is key to producing long-term economic growth. But determining what kind of products to develop and bring to market hinges crucially on whether or not people will be able to buy them...Innovative product ideas languish in semi-obscurity or simply can’t get financing because in general we don’t have the kind of broadly rising incomes that would support new products." Matthew Yglesias in Slate.
BEUTLER: The right is a bunch of aging white radicals. "When it became clear about a year ago that Republican leaders would have a much harder time advancing immigration reform than they realized — that GOP activists and conservatives were livid about the idea that Republicans were going to help illegal immigrants gain citizenship — it started to look like the party had an insoluble problem on its hands. Watching Republicans attempt to broaden their appeal to growing, traditionally Democratic constituencies has been like watching someone try to cover a bedroom floor with a poorly cut carpet, fastening it into one corner but pulling it out of the others in the process." Brian Beutler in Salon.
CHAIT: I have seen the future of the Republican Party, and it is George W. Bush. "If and when Republicans regain the White House, profligacy holds the key to their ideological salvation. Liberating themselves from austerity will allow them to back away from their brutal campaign of confiscating food stamps, Pell grants, and low-income tax credits, and still hand out tax cuts for the 1 percent. Tax cuts for one and all! That, after all, was the Bush formula: small elements of programmatic reform for low-income workers, stapled onto the agenda of The Wall Street Journal editorial page, all costs deferred." Jonathan Chait in New York Magazine.
KRISTOF: Modern family matters. "First is to expand family planning so that teenagers and young adults don’t have babies they don’t want and are ill-prepared to care for. Four out of five teenage pregnancies are unintended, according to the Guttmacher Institute. It’s promising that a randomized trial found that the Carrera pregnancy prevention curriculum in low-income schools reduced teen births by half. Family-planning initiatives save taxpayer money now spent on health care and the safety net, yet, after inflation, America’s investment in Title X family planning has fallen some 70 percent since 1980. That’s crazy." Nicholas "D." Kristof in The New York Times.
MULLIGAN: Why we should pay jurors more. "Many people summoned for jury duty search desperately for excuses. Their efforts increase the burden on the court system, which has to summon and process a large number of people in order to empanel its juries. The court system might alleviate these problems by following the example of the modern military: recruit people for service by paying them far more than minimum wage...Taking property and drafting citizens into government service without market compensation have many of the same economic problems: they fail to spread the burden of supporting government activity, they encourage socially wasteful avoidance behaviors, and enforcement runs the risk of special treatment for the politically connected." Casey B. Mulligan in The New York Times.
Mother Earth interlude: A meteor crater in India.
2. Look, ma, no safety net!
States cutting weeks of aid to the jobless. "The rest of the country is now following North Carolina’s lead. A federal program supplying extra weeks of benefits to the long-term unemployed expired at the end of 2013, and congressional Democrats failed in an effort to revive it. About 1.3 million jobless workers received their last payment on Dec. 28. Starting on Jan. 1, the maximum period of unemployment payments dropped to 26 weeks in most states, down from as much as 73 weeks. With that move, the country’s safety net for jobless workers has undergone a sudden transformation, from one aimed at providing modest but sustained protection to workers weathering a tough labor market to one intended to give relatively short-term aid before spurring workers to accept a job, any job." Annie Lowrey in The New York Times.
Food banks anticipate cuts to food stamps. "Food banks across the country are making similar preparations, increasing efforts to prepare for the increased demand even as donations decline. Moreover, they say, they do not have enough staff to meet all the requests...“We are going to increase our efforts to get more donations and try to serve as many people as possible, given our resources,” said Nancy E. Roman, executive director at the food bank. “But make no mistake, if the food stamp program is cut, we’re going to see much longer lines of people seeking help with their food budgets, and we can’t help them all.”" Ron Nixon in The New York Times.
Explainer: 10 startling facts about global wealth inequality. Ezra Klein in The Washington Post.
Must-read debate: The American Prospect is opening a conversation on the "future of the social safety net." Kit Rachlis in The American Prospect.
Visit with pope in Rome will give Obama a chance to spotlight economic inequality. "A decision to visit Pope Francis at the Vatican in late March provides President Obama with an opportunity to highlight the problem of economic inequality, an issue he has placed at the forefront of his second-term agenda. Administration officials announced the trip Tuesday, saying Obama will travel to Rome after a pair of summits in Belgium and the Netherlands...A trip to the Vatican gives the president a chance to frame one of his signature domestic issues in largely moral terms. But the journey also highlights the continuing disagreements between the Obama administration and the Catholic Church over issues such as abortion rights and same-sex marriage." Juliet Eilperin in The Washington Post.
Tumblrs interlude: Awesome people hanging out together.
3. Production without employment
Why hiring lags even as factories hum. "Companies large and small have balked at hiring and expanding since the financial crisis, fearing the halting recovery would falter. The U.S. added just 74,000 jobs in December, according to the Labor Department, far fewer than economists had expected. Other indicators suggest executives have become more optimistic in recent months. A Business Roundtable survey of CEOs in December showed 39% expected to boost capital spending over the next six months, up from 27% in the third quarter, though hiring expectations were little changed. Much depends on whether that optimism translates into action, and whether companies choose approaches that keep a lid on hiring." Theo Francis in The Wall Street Journal.
Guess who's driving consumer spending? "Morgan Stanley drilled down into more than 100 categories of consumer spending and found the strongest growth in durable goods (products designed to last at least three years), particularly luxury goods...The findings reflect a two-track recovery for the U.S. economy. The wealthy, buoyed by stock market gains and rising real estate prices, were willing and able consumers last year. Households relying on income from wages and salaries were hit harder by higher taxes at the start of the year, tamping down demand." Jeffrey Sparshott in The Wall Street Journal.
Lew sends Congress yet another warning about the debt limit. "Treasury Secretary Jacob J. Lew warned Congress on Wednesday that the government would most likely exhaust its ability to borrow in late February, setting up yet another fiscal showdown with Republicans, and this time earlier than congressional leaders had anticipated. In a letter to Speaker John A. Boehner and the other top three congressional leaders, Mr. Lew said a surge of February spending, mainly tax refunds for 2013, would leave the Treasury with little room to maneuver after the official debt limit is reached on Feb. 7." Jonathan Weisman in The New York Times.
American oil demand rebounds. "In November the US government’s Energy Information Administration began publishing weekly data that suggested US oil consumption was running 4-5 per cent higher than a year ago. For some products such as propane and propylene, which are used in petrochemical plants and agriculture, growth was in the double digits...For a country where oil demand was thought to be in structural decline, as car engines have become more efficient and heavy industries move offshore, the numbers were startling - so startling they were widely dismissed. But as more reliable monthly data has followed, some observers believe something big is stirring in the oil market." Ajay Makan and Gregory Meyer in The Financial Times.
Crude exports face obstacles. "That there is even a debate on easing or ending the 40-year-old near-total ban on U.S. crude-oil exports is a remarkable turnabout for the U.S.'s energy situation, where dependence on foreign oil has been a key driver of policies in several presidential administrations. The resolution of the debate carries important implications on the profit potential of exporters and the ability to avoid a production glut that could slow the shale boom...The IEA said Tuesday that surging U.S. production could hit a wall if the export ban stays in place, making additional production less economically attractive. The growing volumes "that cannot leave North America are increasingly posing a challenge to industry," the report said." Alicia Mundy and Ben Lefebvre in The Wall Street Journal.
More Tumblrs interlude: Distractions in space.
4. The Supreme Court is going to have to straighten this mess out
Same-sex newlyweds sue Utah. "The legal saga in Utah over same-sex marriage grew even more complicated on Tuesday as four couples who had married during the brief window they could do so sued the state over its recent decision not to recognize their marriages or provide any new state benefits to same-sex newlyweds. The American Civil Liberties Union of Utah, which filed the lawsuit on their behalf, said that Utah’s decision had thrown hundreds of new marriages into uncertainty, depriving gay couples of the ability to obtain health care coverage as spouses, to adopt children together legally or to make medical decisions if a spouse or family member were to fall ill." Jack Healy in The New York Times.
...And Florida. "Six same-sex couples in Florida have filed a lawsuit challenging the state’s ban on gay marriage on grounds that it violates fundamental guarantees of the US Constitution, including a right to marry regardless of sexual orientation...The 21-page complaint seeks to overturn two Florida laws, passed in 1977 and 1997, limiting marriage to opposite-sex couples. It also seeks to invalidate a 2008 amendment to the Florida constitution defining marriage as “the legal union of only one man and one woman as husband and wife.”" Warren Richey in the Christian Science Monitor.
Meanwhile, Indiana moves one step in the other direction. "A hotly debated proposal to add a gay marriage ban to Indiana’s constitution passed its first hurdle of the 2014 legislative session Wednesday when a House committee voted in favor of the measure. A panel of 13 lawmakers on the House Elections and Apportionment Committee voted 9-3 along party lines to send the amendment, known as House Joint Resolution 3, to the full House. The vote came after about four hours of passionate testimony." Barb Berggoetz and Tony Cook in The Indianapolis Star.
Transgender students in California get new options. "School districts in California are grappling with a newly enacted, first-of-its-kind law that spells out rights for those students who don't identify as being the gender of their birth. California law AB 1266, the first such statewide legislation in the country, grants students who identify themselves as transgender the right to choose the sports teams and extracurricular activities—as well as the bathrooms and locker rooms—that correspond to their gender identities." Alejandro Lazo in The Wall Street Journal.
Fantasy economics interlude: This is the Wonkblog equivalent of your football roster.
5. The path to better elections
Bipartisan election commission releases list of suggested fixes. "Concluding a six-month review, the Presidential Commission on Election Administration said in its report that jurisdictions should expand online voter registration and early balloting, update electronic voting equipment as first-generation voting machines grow obsolete, and share voter registration records across state lines to protect against fraud. The 112-page report also suggests improvements in the more traditional ways Americans have cast ballots. Those include increasing the number of schools used as polling places, simplifying voting for members of the military and other Americans living overseas through better access to state Web sites and insuring that polling places are close to voters’ homes." Scott Wilson in The Washington Post.
Literary interlude: Zelda Fitzgerald wrote. Who knew?
Miami Beach mayor: Take your tech start-up gospel, and shove it. Lydia DePillis.
10 startling facts about global wealth inequality. Ezra Klein.
Snowden denies that he was a spy for Russia. Charlie Savage in The New York Times.
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Wonkbook is produced with help from Michelle Williams.