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Wonkbook’s Number of the Day: 23 percent. That's how much lower average annual wages are for jobs created during the recovery compared to jobs lost during the Great Recession, per a new report by the United States Conference of Mayors.
Wonkbook’s Chart of the Day: This chart shows the politics of U.S. large cities — and their strong leftward political leanings.
Wonkbook's Top 4 Stories: (1) Obamacare Medicaid expansion news; (2) setting the stage for the midterms; (3) the jobs we're creating; and (4) national security food fights.
1. Top story: The ever-expanding Medicaid expansion
Another argument against the Medicaid expansion just got weaker. "We learned late last week that the decision by 24 states to reject Obamacare's Medicaid expansion comes as a startling cost....So how are states justifying their decisions to leave that much federal money on the table? One of their main arguments is that the federal government will eventually renege on its generous funding commitment to the Medicaid expansion. But based on the 49-year history of the Medicaid program, that claim doesn't hold up, according to Urban Institute researchers in a finding that hasn't received as much attention." Jason Millman in The Washington Post.
ICYMI: 7.2 million have signed up for Medicaid or CHIP since Oct. 1, when Obamacare open enrollment began. David Morgan in Reuters.
Many still signing up for Medicaid anyway in non-expansion states. "The reason is a phenomenon that health experts like to call the 'welcome mat effect' or the 'woodwork effect.'...Many people who were always eligible for the program have finally decided to sign up. There was no policy change that gave them new access to insurance, but new online marketplaces and all the public conversation around new insurance options encouraged them to apply and get benefits they were always eligible for. There are quite a lot of uninsured people in the country who fall into this category. A 2012 study in the journal Health Affairs estimated that, in some states, fewer than half of all eligible people were enrolled in their state’s programs." Margot Sanger-Katz in The New York Times.
Red states feel pressure to expand Medicaid. "Pressure is building on states to go along with the expansion of Medicaid benefits under the Affordable Care Act as new studies and financial reports from health care companies point out stark differences between states treating more poor Americans and those that aren’t....A report last week from The Robert Wood Johnson Foundation-funded Urban Institute said states that haven’t expanded will 'miss out' on more than $420 billion in federal dollars between now and 2022. In addition, the states that don’t expand are losing out on increased employment in the health care industry from newly insured patients who have help paying for services." Bruce Japsen in Forbes.
Waiting (and waiting) for Medicaid in Tennessee. "Five other states — Idaho, New Jersey, Pennsylvania, Texas, and Wisconsin — also decided to send applicants for public health insurance programs for low-income people to the new federal website. Tennessee is the only one that shut down its own system at the same time. As of Jan. 1, a state bulletin announced, residents...were directed to apply online....Tennessee’s approach seems to have been driven in part by antipathy to Obamacare on the part of the Republican-led state legislature....Civil rights lawyers say the state’s reliance on healthcare.gov has been disastrous for thousands of people, especially pregnant women and newborns." John Tozzi in Bloomberg Businessweek.
Consumers' next Obamacare challenge: Tax forms. "The health care law’s benefits are rolling out, but its major math problems start next year as the IRS tries to ensure that millions of Americans are correctly calculating their benefits and that those who don’t have coverage are penalized unless they qualify for an exemption....The insurance exchanges and employers must send consumers details about their health plan and benefits or exemptions in time for them to file a tax return. If any of that information is delayed or wrong, tax refunds could be delayed....Last month, the Obama administration released drafts of the forms employers and individuals will have to fill out. But those leave unanswered many questions about how it’ll all work." Paige Winfield Cunningham and Mackenzie Weinger in Politico.
Chart: Obamacare enrollment next year will be confusing, too. Sarah Kliff in Vox.
How Obamacare is trying to find ways to deliver better health care. "While the focus of the federal law is to expand access to medical care, it also established the Patient-Centered Outcomes Research Institute to fund...studies...to evaluate the benefits and harms of different treatment options to better inform health care decisions....Before there was...PCORI, 'there was a disconnect between how health care research was being conducted and what patients actually needed,' said Dr. Jerry Krishnan, a researcher at the University of Illinois....The law also provides $10 billion in funding to the Center for Medicare and Medicaid Innovation through 2019 to conduct similar comparative effectiveness research." Judy Peres in the Chicago Tribune.
Center for Medicare and Medicaid Innovation has its skeptics. "The law created the Center for Medicare and Medicaid Innovation to launch experiments in every state, changing the way doctors and hospitals are paid, building networks between caregivers and training them to intervene before chronic illness worsens....Supporters say CMMI promises to eventually save taxpayers far more than that $10 billion....Policy experts have long recommended such research....But information is limited even for programs whose results have been announced.... It’s early, officials say....There’s also the political risk of revealing investments that aren’t working. HHS officials concede that some projects will fail, but, Conway said, even those will produce good information — on what doesn’t work." Jay Hancock in Kaiser Health News/The Washington Post.
As those initiatives get money, hospitals feel cutback in research funding. "Some experts fear the health overhaul also could cut into the money available to fund studies traditionally carried out at academic medical centers. Such institutions typically make money by treating privately insured patients in a fee-for-service environment where sophisticated, high-tech procedures carry hefty price tags. That money then can be used to cover the costs of publicly insured or uninsured patients as well as research projects. But that environment is changing....This trend comes on top of another: The federal government's allocation for medical research has remained static for many years, meaning budgets have been eroded in real dollars." Judy Peres in the Chicago Tribune.
Wide variation in ACA premium changes next year, but modest rise on average. "Data compiled by...PricewaterhouseCoopers found modest changes in premiums for 27 states and the District of Columbia, with the increases mostly falling short of dire predictions for ObamaCare’s second year. The average national increase of 7.5 percent is 'well below the double-digit increases many feared,' HRI Managing Director Ceci Connolly wrote in an email. The highest proposed rate increase so far came in Nevada, where consumers with Time Insurance Co. might see their insurance premiums rise by 36 percent. Some consumers in Arizona, on the other hand, could see rates drop by 23 percent." Elise Viebeck in The Hill.
Other health care reads:
Freshway contraceptive coverage bar allowed by court. Andrew Zajac in Bloomberg.
Admitting-privileges laws have created high hurdle for abortion providers to clear. Sandhya Somashekhar in The Washington Post.
Massachusetts pioneered Obamacare — and is still having trouble making it work. Sarah Kliff in Vox.
Ebola test drug’s supply ‘exhausted’ after shipments to Africa, U.S. company says. Lenny Bernstein and Brady Dennis in The Washington Post.
Plan to disclose Big Pharma's payments to doctors hits a speed bump. David Armstrong in Bloomberg Businessweek.
COHN: Walmart thinks it can fix American health care. "If you’re already a Walmart shopper, this might not seem like a big deal. You’ve probably seen clinics inside the stores before. But these new health centers are different. Previously, Walmart simply leased out space out to local hospitals, the way it frequently does to local banks or to Starbucks. With the new clinics, Walmart will be operating the facilities directly — paying for the supplies, hiring and managing staff, and taking in payments. The company has apparently decided that it can provide convenient, low-cost medical care—not just for minor injuries and illnesses, but even for more serious and chronic conditions. Am I petrified? No. If anything, I'm a little optimistic." Jonathan Cohn in The New Republic.
SUMMERS: Ending presidents’ second-term curse. "Would the U.S. government function better if presidents were limited to one term, perhaps of six years? The unfortunate, bipartisan experience with second terms suggests the issue is worthy of debate. The historical record helps makes the case for change. Why the record is not dispositive, however, is suggested by the term 'lame duck.' As the phrase suggests, leaders nearing the end of their time in office lose the ability to influence other actors by offering future rewards and punishments or by making deals in which they commit to future actions. If this is the main reason second terms are difficult, then removing the possibility of reelection could simply pull the problems forward into first terms." Lawrence Summers in The Washington Post.
SALAM: A better immigration compromise. "If we wanted to increase employment-based immigration without also increasing overall immigration levels, in keeping with public opinion, one logical approach would be to limit family reunification, e.g., limiting the extent to which extended family members would be eligible for family-sponsored admissions. The Senate bill does narrow family reunification to a modest degree by eliminating family-sponsored admissions for siblings and adult married children of U.S. citizens over the age of 30, but it could go further in this direction by, for example, setting stronger expectations for self-support." Reihan Salam in National Review.
FELDSTEIN AND RUBIN: Fed's systemic-risk balancing act. "We are not expressing a view on whether there are current financial excesses that are potentially destabilizing...or whether the Fed should raise rates now to deal with such possible risks. But we do think it imperative that Fed policy makers have a realistic view of the breadth of the possible systemic risks and of the tools that are available to deal with such risks. The macroprudential tools that the Fed has discussed relate primarily to making banks more resilient, and that is obviously very important. But the possible systemic risks extend to a vast number of other institutions and asset markets, and there the issues around macroprudential regulation become much more complicated." Martin Feldstein and Robert Rubin in The Wall Street Journal.
FRUM: The illusion of a libertarian moment. "The libertarians interviewed by Robert Draper talk about their movement’s exciting, bold ideological vision. Yet the true secret to its post-2008 appeal is just the opposite. Those conservatives who succumb to libertarianism do so in despair, not hope. Instead of competing to govern the state, many now feel that their only hope is defend themselves — with arms if necessary — against an inherently and inevitably hostile and predatory state. Conservatives who still want to compete, win, and govern must trust that this despair will pass. The 'libertarian moment' will last as long as, and no longer than, it takes conservatives to win a presidential election again." David Frum in The Atlantic.
GLUCK: Another hole in the Halbig verdict. "It is no secret that the people bringing the challenge to the Obamacare subsidies in the Halbig and King cases...are some of the same people who brought the 2012 constitutional challenge to the Affordable Care Act before the high court. What's less known, however, is that in the 2012 constitutional case, these same challengers filed briefs describing Obamacare to the court in precisely the way they now say the statute cannot possibly be read. Namely, they assumed that the subsidies were available on the federal exchanges and went so far as to argue that the entire statute could not function as written without the subsidies. That’s a far cry from their argument now." Abbe R. Gluck in Politico Magazine.
FELDMAN: Brady's death isn't murder 33 years later. "The government would have to overcome major legal hurdles to charge John Hinckley Jr. in the murder of James Brady some 30 years after the fact. But if that were the morally right thing to do, it would be worth trying, despite the improbability of success. Is it? The answer is no — but not for the reasons you might think. It doesn’t have to do with Hinckley’s guilt or Brady’s heroism or Ronald Reagan’s presidential status. The reason not to prosecute Hinckley lies in the kind of criminal justice system we want to have: one that doesn’t seek solely to punish the guilty, but rather to punish the guilty subject to the requirements of basic fairness." Noah Feldman in Bloomberg View.
Animals interlude: Cats can orient themselves during a fall to land properly. Watch what happens to them in weightlessness.
2. An early look at the forces shaping the 2014 midterms
The 2014 election is about everything and nothing on the policy agenda. "No single item has emerged to overtake the economy in the top spot. Immigration has rocketed into the mix, with the crisis of children from Central America at the U.S.-Mexico border....Other items that are rated as highly as immigration include dissatisfaction with the way the government is working (16 percent), the economy (15 percent) the related concern of jobs (14 percent) and health care mentions (8 percent)....Gallup catalogues more than 40 other separate items mentioned by 6 percent or fewer as the top problem. So is this just the way midterm elections usually play out — an election with no national candidates, no driving issue, but rather a series of local and state concerns? Not according to Gallup." Peyton M. Craighill in The Washington Post.
The public that hates everything about Washington. "Polls from major networks, researchers and newspapers agree: America’s in a bad mood. In just one week, polls found politicians of all stripes are hitting approval numbers with record lows. The president finds himself roughly as popular as a trip to the dentist. The entire Democratic Party gets the thumbs down. Oh, and so does the Republican Party. But it doesn’t stop there. Americans are also bummed out about the future in general, especially the economy. Things are so low that even an old favorite, sugar, polled poorly." Lucy McCalmont in Politico.
Obama expects Supreme Court vacancies, says he needs a Democratic Senate to help him fill them... "Obama said Democrats need to hold onto the Senate because a faction of the Republican Party 'thinks solely in terms of their own ideological purposes and solely in terms of 'how do they hang onto power?' And that's a problem. And that's why I need a Democratic Senate. Not to mention the fact that we're going to have Supreme Court appointments and there are gonna be a whole host of issues that many people care about that are going to be determined' by whether or not Democrats control the Senate. Obama said Democrats are 'congenitally disposed' toward not voting in midterm elections." Katie Zezima in The Washington Post.
...but Republicans' Senate chances keep rising. "Walsh’s decision not to run takes what was an uphill climb for Democrats and turns it into something close to a no-chance race....Montana joins the contests for open seats in West Virginia and South Dakota in that category, meaning that, unless something drastically changes, Republicans should have three takeovers in the bank — a nice head start going into Election Day. That means the party needs three more pickups to gain the Senate majority. And it has more than enough seats in play to do it. Democratic-held seats in Alaska, Arkansas, Colorado, Iowa, Louisiana and North Carolina are competitive at this point." Chris Cillizza in The Washington Post.
A 2014 wave? more like a ripple. "When you add it all up, it looks like 2014 is shaping up to be the unengaged election, with a combination of safe congressional seats and low interest equaling small changes. Republicans likely will pick up some seats, but right now 2014 doesn’t look like a big change election. Voters may be angry, but anger doesn’t necessarily equal enthusiasm. In 2014 anyway, it may equal apathy." Dante Chinni in The Wall Street Journal.
On campaign trail, Dems embracing GOP policy stances. "Faced with a treacherous political environment, many Democrats are trotting out campaign ads that call for balanced budgets, tax cuts and other more traditionally GOP positions. Some of them are running in congressional districts that just two years ago broke sharply for President Barack Obama....Whether the Democrats running in those districts can survive what party strategists acknowledge is a deteriorating national political environment will largely hinge on how well they can appeal to more conservative voters." Alex Isenstadt in Politico.
House GOP prepares messaging-oriented legislation. "In the memo obtained by CQ Roll Call, McCarthy told his conference that the House would likely vote on a 'consolidated energy package … that will, among other things, open federal lands, support the Keystone XL pipeline, and prevent environmental regulations that are killing American-made energy.' McCarthy also signaled that House Republicans would be repackaging their already-passed, 40-plus jobs bills into a single piece of legislation. The tactic is designed to put pressure on Senate Majority Leader Harry Reid and the other Democrats who control the Senate." Emma Dumain in Roll Call.
Congressional productivity isn't just about the number of laws enacted. "A three-dimensional look at the changing numbers, size and content of laws over the last three decades (1983-2012) reveals the following: the number of public laws has dropped 62 percent, the number of pages per statute has increased by 52 percent and minor laws (suspensions) have jumped from 35 percent to 79 percent of all laws. Put another way, Congress is shying away from more substantive, controversial legislation today in favor of passing home crowd pleasers." Don Wolfensberger in Roll Call.
Explainer: When it comes to being hated, Congress jumped the shark a long time ago. Al Kamen and Colby Itkowitz in The Washington Post.
GOP civil war to rage on. "The establishment claims it won the 2014 primary season. But maybe not the war....When the crowing stops, veteran GOP operatives will find themselves right where they were before: back in hand-to-hand combat with movement conservatives, fighting for the heart and soul of the Republican Party. While individual races were won, the biggest challenge facing Republicans — party unity — is still unresolved even as they head into 2016 presidential season." Anna Palmer in Politico.
Time-lapse video interlude: Hyper time-lapse videos.
3. What kind of jobs are we creating?
More jobs than ever, but worse pay. "From early 2010 through mid-2014, while the economy gained a little more than 9 million jobs, the fastest growth came in the low-paying accommodation and food sector; this year the average annual wages in the sector are just under $21,000. Only the fifth-fastest-growing sector since 2010 has been a high payer: professional, scientific, and technical employment, with average annual wages in today’s dollars of about $87,000. For job-gaining sectors as a whole, the weighted average of pay has been just $47,171 a year. The 'wage gap,' in the report’s terms, is a shortfall of 23 percent, which is even bigger than the 12 percent gap following the 2001 recession." Peter Coy in Bloomberg Businessweek.
What the report also found: Income inequality grows in metro areas. "Income inequality appears to have grown in more than 2 in 3 metropolitan areas from 2005 to 2012, according to one rough measure....The report confirms what state-level data have consistently shown: the income divide is growing. (Relatedly, economic insecurity has spread like a virus through the nation over teh past several decades.) Nationally, the top fifth of earners have steadily accounted for a larger and larger slice of the income pie....And the same was true among metro areas in recent years, the report finds. " Niraj Chokshi in The Washington Post.
For largest U.S. companies, jobs growth has lagged profits, revenues. "Firms reaped the benefits of globalization, technology, and other ways to operate more productively....The data highlight a central question....Has the nation's ability to generate well-paying jobs in manufacturing and other sectors been fundamentally scarred by changes in the global economy that may predate the 2008-2009 economic crisis but were more starkly revealed in its aftermath. The answer could have major implications for economic policy decisions, such as how long the Fed keeps interest rates at very low levels to stimulate jobs growth." Howard Schneider in Reuters.
Fed's No. 2 official sounds like a dove in speech. "Federal Reserve Vice Chairman Stanley Fischer said Monday the jury was still out on whether the Great Recession had permanently damaged U.S. economic growth, suggesting he still sees a strong role for monetary policy to support the American recovery....Mr. Fischer noted disappointing rebounds across advanced economies had led many observers, including the Fed itself, to trim their long-term expectations for America’s growth potential....Mr. Fischer acknowledged a shrinking labor force and weak investment trends might lend some support to the thesis, espoused by Harvard economist Lawrence Summers and others, that the U.S. economy has undergone a permanent downward shift or 'secular' slowdown. However, he seemed to be more optimistic." The Wall Street Journal.
Other economic/financial reads:
Why are men leaving the labor force? Uri Berliner in NPR.
Can family-leave policies be too generous? It seems so. Claire Cain Miller in The New York Times.
Top housing official to step down by year's end. Dina ElBoghdady in The Washington Post.
Profile: When she talks, banks shudder. Binyamin Appelbaum in The New York Times.
Robin Williams interlude: In remembrance of the late actor-comedian, check out these scenes featuring some of his best roles.
4. Russia's ineffectual ban on food imports
As Russia bans food imports, many U.S. exporters shrug. "If Russian President Vladimir Putin wants to strike a blow against U.S. agriculture, blocking pistachios is not a terribly effective means to do so. The nuts are among a broad array of foods included in a 12-month import ban Russia imposed last week....'The impact is going to be minimal,' says Jim Zion, managing partner of Meridian Nut Growers....Poultry producers can tell a similar story....High beef and pork prices have made chicken a cheaper meat option for consumers around the world, further lessening Russia’s importance as a market....The story is not quite as benign for agricultural interests in Europe....The greatest damage may be to Russian food shoppers." Justin Bachman in Bloomberg Businessweek.
What's left on the menu in Russia? "Moscow's sweeping sanctions on European food have sent Russian restaurateurs, retail chains and food producers scrambling for alternative supplies and bracing for Soviet-style shortages. The tit for tat trade restrictions — a response to U.S. and EU sanctions imposed over Russia's actions in Ukraine — have hurt farmers in the West for whom Russia is by far the biggest buyer of EU produce. But they will also hit consumers at home, isolating them from world trade to a degree unseen for more than two decades. Creamy French cheeses, Australian Ribeye steak and seafood risottos are heading off the menu at restaurants after the ban on imports of all fish, meat and dairy produce." Olga Petrova and Alissa de Carbonnel in Reuters.
First lady Obama gets key allies in Congress' food fight: military officials. "For the top military brass, the obesity epidemic is increasingly seen as a threat to national security. About 75 percent of young adults are not eligible to serve in the military because of obesity, lack of education and/or criminal records....The organization strongly backed the 2010 Healthy Hunger-Free Kids Act, a bipartisan law that overhauled the National School Lunch Program and set new health standards for all food sold in schools. Now, the admirals and generals are gearing up for a back-to-school campaign to ensure that Congress doesn’t weaken the standards this school year — or in 2015, when the law is set to be reauthorized." Helena Bottemiller Evich in Politico.
Other foreign policy reads:
Oil prices holding steady despite Iraq air strikes. Cristina Silva in International Business Times.
Adorable interlude: Watch as this baby elephant tries to stand up for the first time.
Income inequality appears to be getting worse in more than 2 in 3 metro areas. Niraj Chokshi.
Why riots erupted in one of the most segregated metro regions in the country. Emily Badger.
The real reason Obama’s second term, like his predecessors’, has gone so badly. Zachary A. Goldfarb.
Another argument against the Medicaid expansion just got weaker. Jason Millman.
Name That Data answers: week four. Christopher Ingraham.
How student debt crushes your chances of buying a home. Dina ElBoghdady.
Campuses prepare for new sexual assault regulations. Mary Beth Marklein in USA Today.
U.S. agency warns consumers about bitcoin risks. Josh Boak in the Associated Press.
Keystone XL pipeline's climate impact could be 4 times worse than U.S. estimated, study says. Maria Gallucci in International Business Times.
White House launches digital team for online upgrades. Juliet Eilperin and and Nancy Scola in The Washington Post.
U.S. Postal Service loses $2 billion in second quarter, despite price hikes. Elvina Nawaguna in Reuters.
Obama vow to speed deportations at odds with public opinion. Rebecca Elliott and Jon Herskovitz in Reuters.
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Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.