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.
Wonkbook's Number of the Day: 10 and 25. Those are the two income tax brackets in the new Republican plan. There's an additional surtax on very high earned incomes -- and so capital income goes untaxed.
Wonkbook's Graph of the Day: The ups and downs of our military budget.
Wonkbook's Top 5 Stories: (1) Holder says don't defend; (2) changing the Defense budget; (3) Obamacare's 'exchange in a box'; (4) the U.S. hates statistics; and (5) the EPA's legal problem.
1. Top story: Can state attorneys general abandon state laws?
Holder sees way to curb gay marriage bans. "Attorney General Eric H. Holder Jr. on Monday injected the Obama administration into the emotional and politicized debate over the future of state same-sex marriage bans, declaring in an interview that state attorneys general are not obligated to defend laws that they believe are discriminatory. Mr. Holder was careful not to encourage his state counterparts to disavow their own laws, but said that officials who have carefully studied bans on gay marriage could refuse to defend them." Matt Apuzzo in The New York Times.
@ByronYork: The Holder NYT interview is truly disturbing. No limiting principle for laws/constitution that AG can ignore. Just what he thinks is right.
Support for gay marriage hits 50 percent in Ohio. "When Ohioans passed the ban a decade ago, they did so by a wide margin. It passed with 62 percent support and majorities in all but one of the state’s 88 counties. But in the Monday poll from Quinnipiac University, support for same-sex marriage there hit 50 percent for the first time, compared with similarly worded questions over the past few years. Support for same-sex marriage now leads by wide margins among Democrats, Independents and women. Men narrowly oppose it." Niraj Chokshi in The Washington Post.
Fate of Arizona anti-gay measure rests with Jan Brewer. "To veto or not to veto: It's up to Arizona Gov. Jan Brewer. She must decide if she is going to sign into law legislation that would allow business owners, as long as they assert their religious beliefs, to deny service to gay and lesbian customers. If she approves it, the state could face litigation and a boycott, potentially harming Arizona's economy and tourism industry as well as next year's Super Bowl. If she opts for a veto, she increases her support among conservatives." Leigh Ann Caldwell in CNN.
Uganda criminalizes being gay. "“Homosexuals are actually mercenaries,” he said. “They are heterosexual people, but because of money they say they are homosexuals. These are prostitutes because of money.” Museveni added, “There’s now an attempt at social imperialism, to impose social values. We’re sorry to see that you (the West) live the way you live, but we keep quiet about it.” The “anti-homosexuality” law carries a penalty of 14 years for a first-time offense and life imprisonment for those convicted of “aggravated homosexuality.”" Jonathan Capehart in The Washington Post.
Jason Collins, first openly gay player in the NBA, plays again for the Nets. "Jason Collins, a 35-year-old center, signed a 10-day contract with the Nets on Sunday afternoon and played against the Lakers hours later, appearing in an N.B.A. uniform for the first time since last spring, when he announced that he was gay. The signing represents a significant step toward transforming North American professional sports into a more welcoming environment for gay athletes. Until Sunday night, no N.B.A. game had taken place with an openly gay player on the floor. The N.F.L., Major League Baseball and the N.H.L. — the continent’s other three traditional major sports leagues — have never had a publicly gay participant." Andrew Keh in The New York Times.
Banning gay football players from the NFL? "Jack Burkman, the CEO of Burkman LLC, said Monday that he would push Republican lawmakers to support the measure, which he put together after college football star Michael Sam announced that he is gay...The absence of any actual details -- from the language of the bill to the names of potential supporters -- gave the announcement the unmistakable whiff of a publicity stunt." Sam Stein in The Huffington Post.
ANTLE: Letting the market promote pluralism. "The same logic would seem to apply to participation in same-sex marriage services. If we can allow conscientious objectors to refuse to fight in wars, we can surely make some allowance for people to who don’t want to bake cakes, provide floral arrangements, or take photos at a particular wedding. A case could also be made that same-sex couples should prefer to send their business to vendors who share their values." W. James Antle III in The American Conservative.
Music recommendations interlude: Nicole Atkins, "Maybe Tonight."
BERNSTEIN: Lessons from the stimulus. "Not all recessions are created equal, and we needed to be more mindful of the possibility that a bursting housing-debt bubble had uniquely threatening characteristics relative to, say, an equity bubble (like the dot-com bubble that led to the 2001 recession) or a supply-shock recession (for example, the disruption of a critical input like oil)...The loss of wealth (in home equity) from a bursting housing bubble also had much more pervasive negative impact on demand, as homeowners, unlike owners of large stock portfolios, are spread throughout the income scale." Jared Bernstein in The New York Times.
PONNURU: What stimulus defenders don't understand. "That reason has to do with the Federal Reserve. To the extent that the central bank has a target for inflation (or nominal spending), and has the power to hit that target, the Fed constrains the power of fiscal policy. If Congress tries to stimulate the economy during a slump, for example, the Fed will offset that stimulus by loosening money less. Some of this offsetting will actually be automatic, based on market expectations that the Fed will stay on target." Ramesh Ponnuru in Bloomberg.
YGLESIAS: Ben Bernanke's biggest mistake. "In an actual debate of data versus Texas bagel stories, the data should have won in a landslide. But perversely, the committee spent almost no time debating monetary policy options. Instead everyone agreed to wait and see on monetary policy while mostly focusing their discussion on their view of the Lehman bankruptcy and problems in the banking sector. This was a fascinating topic but, as almost everyone emphasized, one fraught with uncertainties in light of the rapidly developing situation. The basic economic outlook, by contrast, was not fraught with uncertainties. The labor market was definitely getting worse. Inflation and forward-looking inflation expectations were definitely heading down. The dollar was definitely heading up." Matthew Yglesias in Slate.
KRUGMAN: Health care horror hooey. "Even supporters of health reform are somewhat surprised by the right’s apparent inability to come up with real cases of hardship. Surely there must be some people somewhere actually being hurt by a reform that affects millions of Americans. Why can’t the right find these people and exploit them? The most likely answer is that the true losers from Obamacare generally aren’t very sympathetic. For the most part, they’re either very affluent people affected by the special taxes that help finance reform, or at least moderately well-off young men in very good health who can no longer buy cheap, minimalist plans" Paul Krugman in The New York Times.
COHN: Republicans hate insurer bailouts, except when it's their insurer bailout. "For the last few weeks, Republicans and their allies have been in high dudgeon about Obamacare’s so-called risk corridor program, in which the federal government will subsidize insurers that take heavy losses for the next three years...[H]ow can they simultaneously insist government keep paying higher fees to Medicare insurers, given the case for them is a lot more dubious?...[T]he current Republican position makes no sense whatsoever, unless the GOP's real priorities are (a) opposing anything the Obama Administration supports (b) sucking money away from the traditional, government-run Medicare program (c) stopping programs and spending that benefits the non-elderly uninsured." Jonathan Cohn in The New Republic.
Another leap for mankind interlude: It's hard to pick a hammer up off the moon in an astronaut suit, apparently.
2. How the Defense budget is changing
Hagel's military budget focuses on changing threats. "The Pentagon road map, sure to face fierce resistance from lawmakers in both parties, calls for reducing the military's reliance on manpower-heavy troop buildups, investing instead in more agile special forces and cyberwarriors...Mr. Hagel wants to pare back the size of the active-duty military by 13% and the reserves by 5% in coming years. But he would boost the size of Special Operations forces by nearly 6% by adding about 3,000 personnel to the kinds of teams that killed Osama bin Laden in Pakistan." Dion Nissenbaum and Julian E. Barnes in The Wall Street Journal.
Charts: The ups and downs of our military budget. Danny Vinik in The New Republic.
Pentagon officials say they accept the risks of a smaller army. "Many defense experts interviewed Monday said that given the budget realities, the decision to cut back on the Army made sense, even with the increased risk. One goal of reducing personnel costs, for example, is to find more money for training and weapons. Given that President Obama has said he wants to move away from a permanent war footing, budgetary gains would come from not having to carry a large land-war invasion army when the country is no longer engaged in such invasions." Helene Cooper and Thom Shanker in The New York Times.
Obama’s meeting with governors hits rough patch with talk of National Guard cuts. "Obama and members of his Cabinet welcomed all but a handful of top state leaders, in town for a National Governors Association meeting, to a roughly hour-long joint news conference at the White House to discuss a variety of issues, including funding for the National Guard, health care, energy development and a possible increase in the minimum wage...Iowa Gov. Terry Branstad (R) said he and others were concerned about reductions in funding because the National Guard plays such a crucial role in responding to emergencies in states." Juliet Eilperin in The Washington Post.
TV mashups interlude: "Full House of Cards."
3. Obamacare's 'exchange in a box'
Connecticut plans to market health exchange expertise. "Connecticut has been so successful in getting people to sign up for health insurance through its online marketplace that it is setting up a consulting business to help other states build and operate websites where people can compare and buy private insurance policies. And the Obama administration has encouraged the effort, in the hope that more states will run their own exchanges in 2015 or 2016. Kevin J. Counihan, the chief executive of the Connecticut exchange, said Monday that it would license or franchise its technology, selling an “exchange in a box” to other states. It would offer a package of basic services, with an option for states to buy more" Robert Pear in The New York Times.
Longread: How to bring the price of health care into the open. Melinda Beck in The Wall Street Journal.
Pediatrics groups are threatened by the rise of retail clinics. "Retail health clinics that are popping up in drugstores and other outlets shouldn't be used for children's primary-care needs, the American Academy of Pediatrics said, arguing that such facilities don't provide the continuity of care that pediatricians do. While retail clinics may be more convenient and less costly, the AAP said they are detrimental to the concept of a "medical home," where patients have a personal physician who knows them well and coordinates all their care...Retail clinics also are generally open seven days a week, don't require an appointment, accept more types of insurance than doctors do and charge 30% to 40% less for similar services, studies show." Melinda Beck and Timothy W. Martin in The Wall Street Journal.
Poll: Economists have no idea if Obamacare is going to hurt the economy. Zachary A. Goldfarb in The Washington Post.
GOP running from health-care-law label but not health-care-law money. "In the bitterly partisan debate over the Affordable Care Act, few House members criticized the proposed legislation as harshly or as often as then-Rep. Mike Pence. But now, nearly four years after the measure passed on a party-line vote, Pence, now Indiana’s governor, is asking the federal government for ACA money to expand a program that provides coverage to low-income Hoosiers. But he wants to do it outside the confines of the health-care law." Reid Wilson in The Washington Post.
Greatness interlude: What if U.S. power just went global rather than gone?
4. Government retreats as statistician
Import-export data on the chopping block. "The Labor Department is weighing cuts to a program tracking import and export prices, in a cost-saving move that could alter major gauges of U.S. inflation and economic output, according to people familiar with the matter. Economists and policy makers use the data to measure import inflation, trade flows and overall economic activity. The figures "are principal economic indicators," said one person briefed on the potential cuts. A decision to cut the data could be announced as early as this week, the person added." Jonathan House in The Wall Street Journal.
This year’s crazy weather is freezing the economy. "Economists at Goldman Sachs have tried to figure out exactly what’s been going on, writing up the findings in a recent report. They've found the cold, snowy weather to be a factor in slowing down housing growth, hiring and retail sales. Goldman estimates that the weather subtracted 0.2 percentage points of economic growth during the fourth quarter of 2013 and 0.5 percentage points of economic growth in the first quarter of this year." Zachary A. Goldfarb in The Washington Post.
House GOP tax plan would cut top rates but also hit high earners with a surtax. "Under the proposal, set for release Wednesday, the vast majority of taxpayers would see little change in the ultimate size of their tax bills, according to a nonpartisan congressional analysis of the legislation. But the tax system would be dramatically simpler, with seven existing brackets collapsed into just two, set at 10 percent and 25 percent. In addition, the plan would impose a 10 percent surtax on certain types of earned income over roughly $450,000 a year. The surtax would hit many salaried professionals, such as attorneys and accountants, while dodging farmers and manufacturers — as well as the super-rich, whose income often is derived primarily from interest and investments." Lori Montgomery in The Washington Post.
Interview: Why Robert Gordon thinks growth is over — and what we can do about it. Zachary A. Goldfarb in The Washington Post.
Automakers ditch steel for aluminum. "Carmakers’ shift to aluminum has raised apprehension among steel makers, which have been fighting an increasingly uphill battle simply to maintain their business. Now, they are trying to respond, making lighter, stronger steel in a bid to retain one of their most important customers, the automakers...Steel makers, which have been riding a wave of prosperity as the economy has recovered, have a lot to lose. Automakers account for about 20 percent of annual sales overall for American steel makers, the second most important source of revenue after the construction business." Jaclyn Trop in The New York Times.
A $400 gas bill? It’s on its way. "Utilities are warning homeowners that they are about to get hit with a double whammy — higher natural gas prices and consumption, both of which have been driven to five-year peaks by the Arctic cold that gripped much of the country in recent weeks. Con Edison in New York estimated that the typical home-heating customer would see a gas bill this month of $388, which would be nearly 17 percent above last February. Older homes, like many in the Washington area, are much less energy efficient and could run up even steeper bills." Steven Mufson in The Washington Post.
Some kind of wonderful interlude: A defense of Internet linguistics.
5. The EPA's legal problem
Supreme Court divided on whether EPA has overreached on greenhouse gas rules. "Liberal justices seemed ready to defer to the agency’s interpretation about how to protect the environment from greenhouse gases under a contested portion of the Clean Air Act. Conservative justices were skeptical of how the agency had to essentially rewrite some of the law’s requirements to avoid “absurd” results. But the justices also wondered whether it would make much difference in the long run. All sides agreed that the EPA has the power to regulate greenhouse gases, but they differed on how the agency should go about it. Even if the government lost, some justices said, it would make only a small difference in the number of facilities that could be regulated." Robert Barnes in The Washington Post.
The EPA's problem gets a bit tricky. "One part of the Clean Air Act, she said, seemed to require that such emissions be regulated. But another part set the emission thresholds so low that even schools and small businesses would be covered. The agency’s solution was to raise those thresholds, and the resulting standards covered far fewer sources...Justice Samuel A. Alito Jr. suggested that the agency’s revision of numerical standards in a statute was without precedent in “the entire history of federal regulation.”" Adam Liptak in The New York Times.
Supreme Court declines to hear gun law challenges. "The Supreme Court disappointed gun rights activists once again Monday, declining to review two cases involving the rights of those under 21 to own handguns. Activists had urged the court to accept the cases, saying there has been a “massive judicial resistance” to expanding gun rights following the Supreme Court’s decision in 2008 that there is a right to gun ownership for self-defense at least within one’s home." Robert Barnes in The Washington Post.
Thomas gets a chance to break precedent (if not silence). "[O]n March 5, the court will consider a request to overrule a 1988 securities-fraud decision. If the court does so, it will do away with most class actions for securities fraud...In a 1994 concurrence, he wrote that “considerations of stare decisis have ‘special force’ in the area of statutory interpretation.” According to the plaintiffs in the new case, the Supreme Court has not overruled a statutory precedent in an area in which Congress has been active since 1961, in a tax case. But lawyers for the defendants said the 1988 decision was entitled to “lessened precedential weight” because it was “largely a procedural and evidentiary construct.”" Adam Liptak in The New York Times.
Here’s why the government wants a national data breach law. Danielle Douglas.
Warren Buffett reveals the one stock fund you need to invest in. Jia Lynn Yang.
How economists haze each other. Ylan Q. Mui.
Poll: Economists have no idea if Obamacare is going to hurt the economy. Zachary A. Goldfarb.
Could the United Auto Workers get a do-over in Chattanooga? Lydia DePillis.
Q&A: Why Robert Gordon thinks growth is over — and what we can do about it. Zachary A. Goldfarb.
A $400 gas bill? It's on the way. Steven Mufson.
This year’s crazy weather is freezing the economy. Zachary A. Goldfarb.
One of Washington’s wealthiest is giving $20 million to a top conservative think tank. Zachary A. Goldfarb.
The backstory of @GSElevator. Andrew Ross Sorkin in The New York Times.
Got tips, additions, or comments? E-mail us.
Wonkbook is produced with help from Michelle Williams.