Wonkbook: Can’t we just get rid of the employer mandate already?

February 11

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Evan Soltas. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.


(Photo by Andrew Harrer/Bloomberg)

Wonkbook's Number of the Day: $175.1 billion. That's how much cash the "extraordinary measures" used by the Treasury Department, such as delaying payments to federal retirement funds, frees up to avoid the debt ceiling.

Wonkbook's Graph of the Day: The latest debt-ceiling struggle is already driving up interest rates on Treasury bills.

Wonkbook's Top 5 Stories: (1) employer mandate delayed again; (2) Republicans still on hunt for debt-ceiling strategy; (3) the idea of 'fractal inequality'; (4) the NSA's deadly call; and (5) labor giveth and labor taketh away.

1. Top story: Can't we just get rid of the employer mandate already?

The White House is relaxing the employer mandate again. "The Treasury Department on Monday rolled out more tweaks to the health-care law's requirement that all large employers -- those with 50 or more workers -- provide insurance coverage to their workers. This is the part of Obamacare that was supposed to take effect at the start of 2014, but was delayed by the White House this past summer as the White House was facing significant push back from employers. In today's final rule, the Obama administration is essentially relaxing the employer mandate for 2015 -- in a big way for medium-sized businesses, and a smaller way for the largest employers." Sarah Kliff in The Washington Post.

In Arkansas, 'private option' Medicaid plan could be derailed. "Facing pressure from conservative challengers in the May primary, several Republicans who supported the plan last year are now considering switching their vote when the Legislature votes to reauthorize its financing, possibly as soon as next week. The defection of just one Republican could kill the program, state officials said...The threat to the Arkansas plan, known as the private option, underscores how the Affordable Care Act is an increasingly potent issue not just in congressional races, but also in state legislative contests." Abby Goodnough in The New York Times.

Interview: Arkansas Gov. Mike BeebePhil Galewitz in Kaiser Health News.

Explainer: The labor-market effects of ObamacareJérémie Cohen-Setton in Bruegel.

Having a grocery store nearby doesn’t make people eat healthier. "[W]hile Philadelphia residents are noticing the new grocery options, they're not actually eating any healthier, according to a new study in the journal Health Affairs. The paper is important because it's one of a small handful of academic studies that looks at what happens to eating habits before and after new grocery options become available. And it shows that, six months after two grocery stores opened in Philadelphia food deserts, there was no noticeable difference in body-mass index or fruit and vegetable consumption." Sarah Kliff in The Washington Post.

@jimantle: Idea: Turn Obamacare exchanges into places where you can take back parts of the law you don't like, get something else.

HealthCare.gov to be out of service. "HealthCare.gov will be out of service for two and a half days beginning on Feb. 15 — the last day people can sign up to obtain coverage that begins on March 1. The Centers for Medicaid and Medicare Services announced in a blog post on Monday that the ObamaCare website would be down so the Social Security Administration can conduct its annual systems maintenance activities. The site will be out of order from 3 p.m. on Feb. 15 until 5 a.m. on Tuesday — a period that coincides with the long holiday weekend." Jonathan Easley in The Hill.

BLINDER: Is Obamacare a job-killer? Not at all. "One of the principal objectives of health-care reform is to slow down cost increases, thereby reducing the burdens on both businesses and the federal budget. And health-care costs have indeed slowed dramatically. The following little tidbit is buried deep in the CBO report, and has gotten little attention: CBO "lowered their estimate of average premiums for insurance coverage through exchanges in 2014 by about 15 percent." Let me repeat that: 15% lower, just since last May. That's huge. No one attributes the entire slowdown in health-care costs to ObamaCare—which, after all, is barely under way. But many experts do attribute part of it to changes in Medicare that are in the ACA and to preparations for other aspects of the new law. If the recent past is prologue, the pro-growth effects via lower health-care costs will swamp any antigrowth effects via labor supply." Alan S. Blinder in The Wall Street Journal.

@Avik: Obamacare would be working great if it weren't for all those saboteurs in the White House who refuse to implement it.

KLEIN: AOL's Armstrong needs Obamacare. "The great mystery of U.S. health care is why the country’s CEOs didn’t demand a single-payer system a long time ago. It’s an unending distraction -- and cost drag -- for companies to employ expensive human-resources divisions to negotiate with insurers and hospitals, manage health-care costs, and field questions and concerns from employees. Companies that are great at making cars or buildings or accounting software can’t survive if they’re not also successful at managing health insurance." Ezra Klein in Bloomberg.

JINDAL: Obamacare is anything but compassionate. "Obamacare’s incentive structure places a greater emphasis on expanding coverage to these able-bodied adults — the vast majority of whom could be working or preparing for work — than helping the individuals with disabilities Medicaid was initially created to serve." Bobby Jindal in Politico.

@IvanTheK: Obamacare opponents will decry the delay of certain employer mandates, because they hate the law. Yeah, that makes sense.

COHN: Are conservatives now arguing that Obamacare doesn't do enough? "Liberals settled on something like Obamacare, which they realize will reach only about half of the uninsured for now, because they had literally spent decades trying to do something more ambitious—only to fail, thanks in no small part to conservative opposition. And while conservatives like to say they have better ideas for reforming health care, their proposals inevitably result in many fewer people getting coverage—or those getting coverage getting significantly less financial protection. As best as I can tell, most conservatives simply believe that the costs of significantly expanding coverage are too high to justify the benefits." Jonathan Cohn in The New Republic.

Music recommendations interlude: The Cave Singers, "Swim Club," 2011.

Top opinion
BERNSTEIN: A question for Yellen. "If any of the committee members or their staffs are reading this, I’d like to suggest a question for the new chief: What data would prompt the Fed to slow or suspend its unwinding of monetary support? It’s a question that touches on the two countervailing forces swirling around the Fed: one, to provide less monetary stimulus by unwinding its much-increased balance sheet and increasing the federal funds rate, and two, to be highly data-driven and apply more monetary stimulus to support the fits-and-starts recovery when it needs it, with a particular emphasis on labor market slack." Jared Bernstein in The New York Times.

RODRIK: Death by finance. "[F]inancial globalization has been greatly oversold. Openness to capital flows was supposed to boost domestic investment and reduce macroeconomic volatility. Instead, it has accomplished pretty much the opposite...[F]loating exchange rates are flawed shock absorbers. In theory, market-determined currency values are supposed to isolate the domestic economy from the vagaries of international finance, rising when money floods in and falling when the flows are reversed. In reality, few economies can bear the requisite currency alignments without pain." Dani Rodrik in Project Syndicate.

TOOBIN: Holder v. Roberts. "In five years as the nation’s top law-enforcement officer, Holder has engaged in few of the morally clear-cut struggles that helped define the Kennedy and Katzenbach eras; and he hasn’t enjoyed the victories that his predecessors could claim." Jeffrey Toobin in The New Yorker.

BROOKS: The American precariat. "One of the oddities of the mobility that does exist is that people are not moving to low-unemployment/high-income areas. Instead they are moving to lower-income areas with cheap housing. That is to say, they are less likely to endure temporary housing hardship for the sake of future opportunity. They are more likely to move to places that offer immediate comfort even if the long-term income prospects are lower. This loss of faith is evident in other areas of life. Fertility rates, a good marker of confidence, are down." David Brooks in The New York Times.

PONNURU: Obama is doing it wrong on free trade. "If Obama negotiates a free-trade deal in the Pacific, he will have to hit up his fellow Democrats in Congress again to approve it. It might have been better for the president to dispense with trade-promotion authority altogether: to get an agreement and then move straight to a vote. That way he wouldn't have to make so many requests, and create so many chances to be turned down." Ramesh Ponnuru in Bloomberg.

Today I learned interlude: "The great Eskimo vocabulary hoax."

2. Republicans still in search of debt-ceiling strategy

House GOP homes in on debt-ceiling plan tied to military pension benefits. "House Republican leaders spent Monday trying to finalize a plan to increase the Treasury’s borrowing authority and avoid a federal default by urging GOP lawmakers to rally behind a proposal that ties a debt-ceiling increase to a plan to restore full pension benefits for some military veterans. House Speaker John A. Boehner (R-Ohio) called a “special conference meeting” in the Capitol basement, trying to find the right policy mix that would attract enough Republican and Democratic support for the measure to be approved, possibly as soon as Wednesday. Republicans exiting the meeting stressed that Boehner’s team had made no final decision and that the proposal’s fate remained uncertain." Robert Costa and Paul Kane in The Washington Post.

GOP debt ceiling bill includes 'doc fix' fund. "House Republicans late Monday released the text of legislation to deal with the debt ceiling, which also deals with the "doc fix" issue relating to Medicare physician reimbursements. GOP leaders said the bill would come up for a vote on Wednesday...The four-page bill suspends the debt ceiling until March 15, 2015. That would allow the government to continue borrowing without limit, and the new debt ceiling would be whatever the debt is at the end of that date." Pete Kasperowicz in The Hill.

It's a gamble. "The vote is tentatively scheduled for Wednesday, but top Republicans concede the bill might never make it to the floor — they won’t bring up a bill that won’t pass. Republicans cannot pass it by themselves, and Democrats likely won’t help push it over the edge. Senior Senate sources say it is likely a non-starter in their chamber — they’ve constantly advocated for a debt-limit hike without extraneous policy provisions. On Monday, the Senate advanced a fix to military cost of living adjustments on its own, by a whopping 94-0." Jake Sherman and Ginger Gibson in Politico.

U.S. Treasury acts to avoid debt-ceiling breach. "The U.S. Treasury on Monday said it would suspend investments in federal worker retirement funds, the latest emergency measure the government is taking to stay under the federal debt ceiling. Treasury Secretary Jacob Lew, in a letter to lawmakers, said the government would halt investments in the Civil Service Retirement and Disabilities Fund and the Government Securities Investment Fund...Taken together, the moves free up a little less than $175.1 billion that the Treasury can use to stay under the borrowing cap, the Treasury said." Jeffrey Sparshott in The Wall Street Journal.

Literary interlude: How Iowa flattened literature.

3. What 'fractal inequality' is, and why you should care

Even among the richest of the rich, fortunes diverge. "[W]e know the economic fortunes of the 99 percent and 1 percent have diverged over the last three or four decades. But the fortunes of the 1 percent and the 0.1 percent, or the 0.01 percent, or the 0.001 percent, have diverged even more. Economists have taken to calling it “fractal inequality.” It is not just that the rich have pulled away from the average American. It is that the richer you are, the more you have pulled away...[A]bout two in five income earners who make it into the top 0.1 percent in a given year are executives, managers or supervisors. And one in five comes from the world of finance." Annie Lowrey in The New York Times.

Yellen’s first testimony provides chance to set out Fed outlook. "Janet Yellen’s first testimony as chairwoman of the US Federal Reserve is a crucial chance to stamp her authority on her new role, just as a research paper highlighted the extent of her challenge with forward guidance about monetary policy. The House Financial Services committee on Tuesday will probably press Ms Yellen about weaker data on the US economy, turmoil in emerging markets and the Fed’s plans for forward guidance now that the unemployment rate, at 6.6 per cent, has almost hit the Fed’s 6.5 per cent threshold for considering a rate rise. It will give her a chance to set out the central bank’s outlook as there has been little real communication since December’s press conference." Robin Harding in The Financial Times.

How's the labor market doing? Well, it depends on which data you consider. "According to the household survey, in January 1,717,000 more people were working than were working in October, adjusted for a small change due to changes in population estimates that are made each January. That is an average monthly gain of 572,000...Meanwhile, the establishment survey reported that total employment rose by 462,000 jobs from October 2013 to last month, an average of 154,000. That was the smallest three-month increase since the summer of 2012." Floyd Norris in The New York Times.

Fate of Fannie and Freddie lies with the courts. "Investors, meanwhile, are betting on the side of the plaintiffs. Some classes of Fannie's and Freddie's preferred stock, a form of senior equity, have doubled over the past six months. While shares are still trading at deep discounts from where they stood before the companies were bailed out, many hedge funds and other speculators began amassing the shares when they traded at even deeper discounts over the past five years." Nick Timiraos in The Wall Street Journal.

Explainer: Eight things ‘Downton Abbey’ can teach us about the modern economySteven Mufson in The Washington Post.

The one place where economic confidence is positive is, you guessed it, D.C. "For the past two years, D.C. has been the only place in the nation where economic confidence was positive in Gallup’s annual state-level survey. And it’s routinely leagues ahead of even the most optimistic state. In 2013, D.C. scored a 19 on Gallup’s economic confidence index. Massachusetts was the leader among states, at -1, while confidence was worst in West Virginia, which scored a -44. The 2013 scores are based on nearly 180,000 interviews nationwide over the course of the year. The index ranges from -100 to 100 and is based on how respondents rate the economy currently and whether they see things improving or getting worse." Niraj Chokshi in The Washington Post.

This is 100-percent true interlude: How to fake your way through Hegel.

4. The NSA's deadly call

The NSA's secret role in the U.S. assassination program. "[T]he National Security Agency is using complex analysis of electronic surveillance, rather than human intelligence, as the primary method to locate targets for lethal drone strikes – an unreliable tactic that results in the deaths of innocent or unidentified people. According to a former drone operator for the military’s Joint Special Operations Command (JSOC) who also worked with the NSA, the agency often identifies targets based on controversial metadata analysis and cell-phone tracking technologies. Rather than confirming a target’s identity with operatives or informants on the ground, the CIA or the U.S. military then orders a strike based on the activity and location of the mobile phone a person is believed to be using." Jeremy Scahill and Glenn Greenwald in The Intercept.

Will the White House’s big data privacy initiative distract from the NSA debate? "The White House is studying how the growth of "big data" will affect online privacy. Every day, Americans create data points about themselves that are increasingly being collected, analyzed and used by private and public actors alike. These data points can be reveal relationships or personal information from shopping choices to health-care information, but are also used to commercialize services and perform research. But some civil liberties advocates worry that the initiative is an attempt to shift focus away from the National Security Agency's controversial spying programs." Andrea Peterson in The Washington Post.

Historical interlude: World War I in six minutes.

5. Labor giveth and labor taketh away

Why Volkswagen is helping a union organize its own plant. "The German company is campaigning for the UAW, not against it, in a kind of employer-union partnership America has seldom seen. What gives? Well, VW is kind of different, as automakers go. It understands how having a union can boost productivity and allow it greater flexibility in adjusting to downturns. It should know: The rest of its plants are unionized too." Lydia DePillis in The Washington Post.

Labor battle rages on at Kellogg plant. "To the locked-out workers, Kellogg is yet another American company seeking to knock middle-class workers down a few pegs and chip away at their pay and benefits. But to Kellogg, the Memphis plant is a high-cost operation with above-market wages that badly need to be brought under control to make the plant competitive." Steven Greenhouse in The New York Times.

Sociology interlude: Marriage hits record low.

Wonkblog Roundup

How the U.S. government spends millions to get people to eat more pizzaBrad Plumer.

The White House is relaxing the employer mandate againSarah Kliff.

Having a grocery store nearby doesn’t make people eat healthierSarah Kliff.

Eight things ‘Downton Abbey’ can teach us about the modern economySteven Mufson.

Why Volkswagen is helping a union organize its own plantLydia DePillis.

Et Cetera

Auto insurers' marriage discounts face scrutinyLeslie Scism in The Wall Street Journal.

California wins more time to fix its overcrowded prisonsIan Lovett in The New York Times.

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

Wonkbook is produced with help from Michelle Williams.

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