Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. 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: 2.5 million. That's the number of public comments that the State Department received regarding the once-again-delayed Keystone XL pipeline project.
Wonkbook’s Chart of the Day: The richer you are, the older you'll get, as these charts show.
Wonkbook's Top 5 Stories: (1) Obamacare is not just one number; (2) Revisiting the BP spill, four years later; (3) rising wages and the Fed's plans; (4) the latest Keystone XL punt; and (5) the economic side of Obama's Asia trip.
1. Top story: Obamacare is more than just an enrollment number
8 million is not the only Obamacare magic number that counts. "It’s not that 8 million isn’t a significant number. It is. The surge of people who signed up in the new health insurance exchanges surpassed both White House targets and expectations. It seemed unimaginable six months ago. But the exchanges aren’t the only way people can get covered under the Affordable Care Act. And it’s by no means the only number people will keep fighting about. For the White House, the enrollment numbers are a political and psychological win. For the law’s critics, 8 million is a dubious statistic that doesn’t tell the whole story about people who lost insurance or have to pay more because of President Barack Obama’s law." Brett Norman, Jennifer Haberkorn and Kyle Cheney in Politico.
Still, that 8 million number will go up. "Enrollment in ObamaCare's new health insurance exchanges is likely to grow past eight million, as some states are still letting people sign up for insurance beyond this year's official enrollment deadline. At least eight states and the District of Columbia are still allowing people to register for health plans, according to news reports and an April 14 analysis by consulting firm Avalere Health." Elise Viebeck in The Hill.
Way more than 8 million people have signed up. Sarah Kliff in Vox.
Obamacare is not an iPhone; it's more like an Android. Ezra Klein in Vox.
The debate is shifting to the law's cost and quality impacts. "With more than 8 million Americans now dependent on medical coverage through Obamacare, the law may finally be cemented into the foundation of U.S. society. The response easily beat a Congressional Budget Office prediction of 6 million, and the agency says it expects at least 7 million more people will enroll in private plans after the sign-up period for 2015 opens in November. Between now and then, politicians will try to make the law’s effects on consumers a key issue in the November congressional elections." Alex Wayne in Bloomberg.
The recent surge in health spending is creating some unease. "It’s back. For years, because of structural changes in the health care delivery system and the deep economic downturn, the health care 'cost curve' -- as economists and policy makers call it -- had bent. Health spending was growing no faster than spending on other goods or services, an anomaly in 50 years of government accounts. But perhaps no longer. A surge of insurance enrollment related to rising employment and President Obama’s health care law has likely meant a surge of spending on health care, leaving policy experts wondering whether the government and private businesses can control spending as the economy gets stronger and millions more Americans gain coverage." Annie Lowrey in The New York Times.
Long read: What the rising health spending means for the economy and Obamacare. Jonathan Cohn in The New Republic.
Don't expect drastic Obamacare insurance hikes as some Obamacare critics had predicted. "The next great frontier of conservative hyperbole concerns premiums for 2015, with critics warning that costs will double or even triple next year. As of this week, we have good evidence to the contrary. Health insurance premium rates are expected go up just 7 percent -- a rate of increase much lower than what critics were predicting. And the nonpartisan Congressional Budget Office is predicting that premium hikes will be relatively modest." Lucia Graves in National Journal.
Other health care reads:
Democrats confront vexing politics on Obamacare. Jonathan Martin in The New York Times.
GOP responds to 'War on Women' label by...attacking Obamacare. Beth Reinhard and Kristina Peterson in The Wall Street Journal.
Obamacare’s high-risk pools are closing for real this time. Jason Millman in The Washington Post.
Time's running out for states to get their own ACA exchanges. Carla K. Johnson in the Associated Press.
Health care site flagged in Heartbleed review. Julie Pace in the Associated Press.
BEUTLER: Obamacare successes destroying GOP midterm strategy. "In a recent article, conservative political analyst Sean Trende examined how an election that looks so ripe for Republicans could go sour. 'The way this could occur is fairly straightforward: The Affordable Care Act improves; there’s no massive rate shock for premiums in September or October; and the economy slowly gains ground. This should propel President Obama’s job approval upward, lifting the collective Democratic boat.' As Danny Vinik has noted, none of this is remotely implausible. And if something along these lines begins taking shape, Republicans would have to revisit the idea that they can just block Democratic legislation, scream 'Obummercare!' and let a friendly electoral map do all the work.." Brian Beutler in The New Republic.
THE NEW YORK TIMES: How to run on health care reform. "The Republican attack machine, fueled by millions of dollars from the Koch brothers, has Democrats so rattled about the health reform law that many don’t want to talk about it. They’re happy to run on equal pay for women, or a higher minimum wage, or immigration reform -- all of which provide important contrasts with a do-nothing Republican Party -- but they haven’t said much about the biggest social accomplishment of the Obama administration." Editorial Board.
KRUGMAN: Sweden turns Japanese. "Three years ago Sweden was widely regarded as a role model in how to deal with a global crisis. The nation’s exports were hit hard by slumping world trade but snapped back; its well-regulated banks rode out the financial storm; its strong social insurance programs supported consumer demand; and unlike much of Europe, it still had its own currency, giving it much-needed flexibility. By mid-2010 output was surging, and unemployment was falling fast. Sweden, declared The Washington Post, was 'the rock star of the recovery.' Then the sadomonetarists moved in." Paul Krugman in The New York Times.
CASSIDY: Is the U.S. really an oligarchy? "The paper is a provocative one, and there’s sure to be a lot of debate among political scientists about whether it wholly supports the authors’ claims....There can be no doubt that economic élites have a disproportionate influence in Washington, or that their views and interests distort policy in ways that don’t necessarily benefit the majority: the politicians all know this, and we know it, too. The only debate is about how far this process has gone, and whether we should refer to it as oligarchy or as something else." John Cassidy in The New Yorker.
CROOK: Why Piketty's lavishly praised book on inequality is wrong. "Over the course of history, capital accumulation has yielded growth in living standards that people in earlier centuries could not have imagined, let alone predicted -- and it wasn't just the owners of capital who benefited. Future capital accumulation may or may not increase the capital share of output; it may or may not widen inequality. If it does, that's a bad thing, and governments should act. But even if it does, it won't matter as much as whether and how quickly wages and living standards rise. That is, or ought to be, the defining issue of our era, and it's one on which 'Capital in the 21st Century' has almost nothing to say." Clive Crook in Bloomberg View.
LAZEAR: Allowing the deductibility of capital investment would spur growth and raise wages. "April always brings complaints about the pain of paying taxes -- and the complaints are justified....The hidden cost of the tax system is the biggest of all -- namely, the slower economic growth that results from taxing investment, which impedes the formation of capital and hinders productivity and wage growth. An easy way to remove the impediment to growth is to move toward a consumption tax by allowing the full and immediate deductibility of capital investment. The argument rests on two points. First, consumption taxes are better for economic growth than are income taxes. Second, allowing full expensing (immediate deductibility) of investment turns the current tax system into a consumption tax." Edward P. Lazear in The Wall Street Journal.
SUROWIECKI: Biotech's hard bargain on drug prices. "Price restrictions have always been a political non-starter here, but at some point the math of the situation will be hard to resist. According to a study by the research group I.S.I., by 2018 spending on 'specialty drugs' like Sovaldi could account for half of all drug spending in the U.S. Furthermore, one traditional argument against price controls is looking weaker: biotech companies claim that prices need to be high to reward risky and expensive innovation, but the fact that they’re churning out drugs and profits so consistently seems to undermine that claim. Biotech, in other words, may become the victim of its own success: the bigger the profits, the bigger the likelihood of regulation." James Surowiecki in The New Yorker.
TEITELBAUM: Is the U.S. losing the science and tech race? "Spurred in part by Sputnik and President Kennedy's call for catching up to the Soviet Union in the space race, America produced a large new generation of scientists and engineers. Initially, they found ready and exciting employment, but once the U.S. beat the Soviets to the moon in 1969, political passion and public funding dwindled. It may be that we are now in the middle of another such cycle of alarm, boom and bust. This time it would be wise to evaluate the alarms soberly, proceeding with more caution than in the past. None of this should be taken as justification to weaken efforts to improve science and math education at the K-12 and community college levels." Michael S. Teitelbaum in the Los Angeles Times.
YouTube interlude: The history of YouTube, explained in song.
2. BP oil spill revisited: What we know (and don't know) four years later
Four years later, BP stands tall and proud as Gulf still recovering. "The state of the Gulf of Mexico four years after the worst oil spill in U.S. history is as unclear as a marsh soaked with petrochemicals. The state of BP, on the other hand, is powerful and proud, with the British energy giant showing little tolerance for criticism over the incident. A spate of reports and press releases...sketch a picture of a region still awash in oil and tar, with fish and wildlife struggling to survive and thousands of people suffering from both economic and physical or mental distress. Those assessments stand in stark contrast to BP's declaration last week that 'active cleanup' is complete and ongoing restoration work 'is helping the Gulf return to its baseline condition'...An official accounting of the spill's impacts won't come until at least next year, when the government completes a Natural Resource Damage Assessment as part of its continuing litigation against BP and its partners over the spill." Mike Magner in National Journal.
Photos: A grim photographic tribute to the Deepwater Horizon disaster. John Metcalfe in The Atlantic Cities.
One former federal official says we're on course to repeat the mistakes of the past. "The United States is 'on a course to repeat' the same mistakes that led to the devastating Deepwater Horizon disaster four years ago, a former top offshore drilling regulator warned Thursday." Jennifer A. Dlouhy in the Houston Chronicle.
Long read: Scientists are still trying to understand the spill's environmental impacts. "Scientists are still struggling to understand how the oil and the dispersant chemicals used to break it down into tiny droplets have affected the environment of the deepwater Gulf of Mexico and the Louisiana shoreline and wetlands where a large amount of oil was deposited. 'In many regards, we were fortunate,' said Oregon State University marine biologist Jane Lubchenco, director of the National Oceanic and Atmospheric Administration at the time of the spill....'The caution is that we still don’t fully know the true nature, the true extent of the damage, which is why it’s so important that the ongoing damage assessment efforts continue.'" Mark Schleifstein in The Times-Picayune.
Explainer: Clarifying myths and misconceptions about the Gulf oil spill. "Does oil stick around in the ecosystem indefinitely? What was the deal with the deformed fish? Can anything bad that happens in the Gulf be blamed on oil?" Hannah Waters in Smithsonian Magazine.
But BP is refusing to pay for some Gulf spill impact studies. "BP is refusing to pay a large bill for US government-led studies into its 2010 oil spill in the Gulf of Mexico, including research into its impact on dolphins, whales and oysters. Documents seen by the Financial Times show that the US government last year requested $148m from BP to fund studies this year in to the effect of the spill. But the company refused to pay for most of them arguing that it should not be forced to finance studies that it is not allowed to see. The disagreement shows how the arguments over the clean-up of the gulf are emerging as a central issue in the multibillion-dollar legal actions still facing BP." Ed Crooks in The Financial Times.
And not everyone is happy with BP's payouts. "Four years after the Deepwater Horizon spill, oil is still washing up on the long sandy beaches of Grand Isle, Louisiana, and some islanders are fed up with hearing from BP that the crisis is over....The British oil major has paid out billions of dollars in compensation under a settlement experts say is unprecedented in its breadth. Some claimants are satisfied, but others are irate that BP is now challenging aspects of the settlement. Its portrayal of the aftermath of the well blowout and explosion of its drilling rig has also caused anger." Jemima Kelly in Reuters.
BP says 'active cleanup' complete? Try telling that to the Coast Guard. "The Coast Guard is crying foul at BP’s statement this week that active cleanup efforts to remove oil along the Gulf Coast shorelines have ended. While BP claims it has reached a 'milestone' in the cleanup process, the Coast Guard says it’s 'far from over.'" Collin Eaton in the Houston Chronicle.
The seafood industry remains chilled. Doug MacCash in The Times-Picayune.
Other energy/environmental reads:
Fuels from corn waste not better than gasoline for global warming, study says. Dina Cappiello in the Associated Press.
Conservative heavyweights have solar industry in their sights. Evan Halper in the Los Angeles Times.
Animals interlude: Cat videos can help improve the world! Here's how.
3. Why rising wages matter to the Fed's plans
Wage inflation threatens Fed interest rate plans, say economists. "High long-term unemployment in the US may fail to hold down inflation, creating a challenge for Federal Reserve plans to keep interest rates low well into 2015, according to economic analysis. A growing body of research from high-profile economists, including Alan Krueger, who chaired President Barack Obama’s council of economic advisers until August, suggests that wage inflation could soon rise because short-term unemployment is almost back at normal levels. If such wage pressures start to show up this year, they could force the Fed to consider earlier interest rates rises even while the unemployment rate remains relatively high. However, Fed chairwoman Janet Yellen has rejected the idea that long-term unemployment will fail to hold down inflation." Robin Harding in The Financial Times.
Minimum wage battles are coming to the forefront in the states. "A wave of efforts to raise the minimum wage at the state and local level will run through November, when voters in eight states could consider ballot measures to raise hourly rates higher than the current $7.25 federal rate. This is the second year in a row that states have picked up the pace of increasing the minimum wage, after President Barack Obama's proposal to increase the federal rate to $10.10 an hour stalled in Congress. Since the year began, these states have approved minimum wages that are higher than the current federal level: Connecticut ($10.10), Delaware ($8.25), Maryland ($10.10), Minnesota ($9.25) and West Virginia ($8.75). The District of Columbia raised its rate to $11.50." Pamela M. Prah in Stateline and The Washington Post.
Think $10.10 is high? Look at what Switzerland may do. "The Swiss will vote in a national referendum May 18 on whether to create a minimum wage of 22 francs ($25) per hour, or 4,000 francs a month. While about 90 percent of workers in Switzerland already earn more than that, employers say setting Switzerland’s first national wage floor would push up salaries throughout the economy. When adjusted for currency and purchasing power, it would be the highest minimum in the world." Catherine Bosley in Bloomberg.
Other economic/financial reads:
Long-term unemployed struggle to find — and keep — jobs. Ylan Q. Mui in The Washington Post.
Study: Tax hikes could actually grow the economy. Matthew Yglesias in Vox.
Banks cling to bundles holding risk. Gretchen Morgenson in The New York Times.
Mortgage lenders ease rules for home buyers in hunt for business. Nick Timiraos and AnnaMaria Andriotis in The Wall Street Journal.
Economics interlude: A crash course on economics in a 300-word speech.
4. Obama administration punts on Keystone XL (yet again) — what it means
Obama administration postpones decision on Keystone XL. "The Obama administration has -- again -- postponed a decision on the proposed Keystone XL pipeline by giving eight different agencies more time to submit their views on whether the pipeline from Canada’s oil sands to the Texas Gulf Coast would serve the national interest. The 90-day period for interagency comments was supposed to end May 7, but the State Department extended that deadline, citing 'uncertainty' created by a Nebraska Supreme Court ruling that could lead to changes in the pipeline route." Steven Mufson in The Washington Post.
Explainer: Overview of the Keystone XL debate. Brad Plumer in Vox.
The decision now rests in the hands of Nebraska jurists. "The focus of the Keystone XL debate has shifted from a fierce lobbying war in Washington to Lincoln, Nebraska, where the state Supreme Court has been asked to weigh a legal challenge to the pipeline....If the seven-member state Supreme Court upholds a lower court decision, TransCanada Corp. (TRP), the Calgary-based company that wants to build Keystone, will need to apply to the Nebraska Public Service Commission. The commission by law has seven months for its pipeline reviews. The State Department said the possibility of a new route coming out of that process justified hitting the pause button." Jim Snyder in Bloomberg.
How the latest delay could shake up the oil sector. "Oil sands producers already sell their crude at a discount due in part to a transportation shortage that has hit producers such as Suncor Energy Inc and Cenovus Energy Inc. But more pipeline delays could aid oil-by-rail developers like Gibson Energy and Canexus Corp that are racing to fill a gap left by a lack of export pipeline capacity." Patrick Rucker in Reuters.
Don't expect this decision to quell the political wrangling. "Democrats sweating this year's elections may be hoping that the Obama administration's latest delay to the proposed Keystone XL pipeline will take a politically fraught issue off the table for the midterms. Fat chance. An indefinite extension of the government's review of the contentious oil pipeline, announced late Friday by the State Department, almost certainly pushes a final decision past the November elections, keeping the project in a politically expedient holding pattern. But it is doing little to quell posturing over the project, which has taken on a life of its own as climate change activists battle with energy advocates from both parties." Josh Lederman in the Associated Press.
Top Democrat: Delay wasn't a product of politics. Jennifer Epstein in Politico.
Explainer: The Keystone XL decision left three key stakeholder groups scrambling. Andrew Restuccia in Politico.
Justin Bieber interlude: Sorry, Bieber haters, but the White House isn't deporting him.
5. The economic importance of President Obama's Asia trip
Obama seeks boost for flagging trade agenda in Asia-Pacific trip. "The White House is intensifying efforts to wrap up the Trans-Pacific Partnership (TPP), which would expand trade from the Pacific Rim to Latin America, but is struggling to break a stalemate with Japan over market access. The pact is also facing staunch opposition from congressional Democrats. Obama is looking to build momentum for the deal during a four-nation Asia trip. The key meetings will come Wednesday and Thursday, when Obama and Japanese Prime Minister Abe Shinzo are expected to review the status of outstanding negotiating issues in Japan’s sensitive auto and agricultural sectors." Vicki Needham in The Hill.
Where's the beef (and pork)? "Beef and pork are among the most controversial agricultural issues dividing Washington and Tokyo. Japan sees a recently concluded free-trade agreement with Australia as a template, but U.S. officials say Tokyo’s agreement with Australia doesn’t open its markets to a sufficient degree. Japan is also coming under pressure to increase or eliminate its quotas on U.S. shipments of rice and wheat. The lack of good news in Washington this week may disappoint major business groups, which back the TPP and a separate set of trade talks with the European Union." William Mauldin and Mitsuru Obe in The Wall Street Journal.
It's all part of a broader, and long-delayed, 'pivot' to Asia for the president. "President Barack Obama is heading to Asia this week with a simple message: The pivot is real. The Marine Corps is beefing up its deployments to Guam and Australia. The Navy is sending more ships to Japan. And Obama, who leaves Tuesday, could use his stop in the Philippines to announce that Manila and Washington have finally agreed on new U.S. military rotations there....The White House’s problem is that even after years of talking about the strategic 'rebalance' to the western Pacific, the president and his administration still face a wall of skepticism from regional governments and critics inside Washington. Obama and his top officials love to talk about focusing on Asia, the argument goes, but they do not walk the walk." Philip Ewing in Politico.
Slight problem: The Ukraine crisis. "President Obama is traveling to Asia this week under the cloud of the Ukraine crisis, which threatens to put Asian allies on edge about U.S. security commitments and create yet another distraction from the administration's much-delayed 'pivot' to the region." Peter Sullivan in The Hill.
Other foreign policy reads:
More Russia sanctions on the way? Christopher Condon and Elisa Martinuzzi in Bloomberg.
Iran says nuclear dispute with the West "virtually resolved." Ramin Mostaghim and Patrick J. McDonnell in the Los Angeles Times.
(Lack of) music interlude: Pharrell's "Happy," with the music edited out.
Why ‘trust and safety’ are no longer free on UberX and Lyft. Emily Badger.
The health-care debate hasn’t changed in 20 years, new Clinton documents show. Jason Millman.
Here’s how many times Easter will fall on 4/20 in the next 1,000 years. Christopher Ingraham.
How Democratic and Republican morals compare to the rest of the world. Christopher Ingraham.
Driverless vehicles will force us to rethink car ownership. Emily Badger.
Obamacare’s high-risk pools are closing for real this time. Jason Millman.
More homeowners no longer need to be in foreclosure, and they may not even know it. Dina ElBoghdady.
The British want to stop Starbucks from dodging taxes. It won’t work. Jia Lynn Yang.
GOP sees wedge issue in Common Core. Jonathan Martin in The New York Times.
How Washington is preparing for a future of wireless everything. Brian Fung in The Washington Post.
Feds quietly toughen standards for immigrant asylum seekers. Franco Ordoñez for McClatchy.
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Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.