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Wonkbook's Number of the Day: $2.4 trillion. That's the amount in deficit reduction sought by the latest Simpson-Bowles plan. When added to the deficit reduction achieved thus far, it would mean $5.1 trillion in total savings and revenues. That's less than the original Simpson-Bowles plan -- on an apples-to-apples basis, that plan would save well over $6 trillion -- but more than the White House is currently asking for.
Wonkblog's Graph of the Day: Senate retirements could reach a 40-year high.
Wonkbook's Top 5 Stories: 1) Welcome to Sequester Week; 2) Bowles and Simpson have a new plan; 3) why you might need to worry about the economy; 4) Biden goes for gun control; and 5) Obama's immigration plan is leaked.
1) Top story: Sequester Week begins
We're a week away from the sequester. "The fight between President Obama and congressional Republicans over the automatic spending cuts that start next week is shifting from one about stopping them to one about assigning blame if they happen. Obama on Tuesday surrounded himself with firefighters and other first responders at the White House, where he said Republicans would be at fault if the spending reductions take effect and cost the jobs of emergency personnel. The campaign-style event marked the beginning of what aides described as an intensifying push to pressure Congress to postpone the cuts — or to blame Republicans in Congress if it doesn’t." Zachary A. Goldfarb in The Washington Post.
Read: The full transcript of President Obama's remarks on the sequester. Politico.
If the sequester is inevitable, why is Obama still talking about it? "[I]t would be a mistake to assume that Obama’s emphasis on the need to avert the sequester means that he believes that a deal can be made to do that between now and March 1. He doesn’t...[W]hat the president is doing with his repeated public emphasis on the sequester is laying the groundwork to win the political argument over the cuts in a few weeks time." Chris Cillizza in The Washington Post.
@davidaxelrod: Some of same folks who say mental health programs, not new laws, will cut gun violence, back sequester that would end MH services for 350K.
Lawmakers are scrambling to protect their own districts from sequestration harm. "In some lawmakers’ minds, there’s no stopping the sequester. So they’re making a plea to the Obama administration: Just don’t cut in my backyard. With the automatic budget cuts set to strike all aspects of the federal government March 1, members of the House and Senate are beseeching administration officials — both in private and during public hearings — to spare key programs and employment hubs back home." Scott Wong in Politico.
Explainer: Understanding the sequester, in four graphs. Chris Cillizza in The Washington Post.
Here's how it would go down. "While the effects may ultimately be significant, many are unlikely to be felt immediately, officials said Tuesday after the president’s remarks. Rather, they will ripple gradually across the federal government as agencies come to grips in the months ahead with across-the-board cuts to all their programs. Administration officials insisted that government contractors and state governments will begin receiving word quickly about programs that must be reduced or terminated." Michael D. Shear and Michael Cooper in The New York Times.
@Goldfarb: Challenge for GOP: They oppose sequester, but want to balance budget over 10 years. Will require much deeper cuts than sequester.
RNC chief Jim Gilmore supports fewer cuts, more growth. "Jim Gilmore is a conservative Republican, a former governor in a purple state and a man who has developed, in the last several years, a deep and emotional concern over the condition of the U.S. economy. And he’s frustrated – because, he says, Republicans in Washington seem to care more about cutting federal spending than sowing the seeds of rapid economic growth." Jim Tankersley in The Washington Post.
@justinwolfers: The odds of the sequester biting are now 50% according to
@macroadvisers. Will knock GDP this year down 0.6%, leading unemployment to stall.
BOEHNER: By the President's own hand. "What they might not realize from Mr. Obama's statements is that it is a product of the president's own failed leadership...President Obama was determined not to face another debt-limit increase before his re-election campaign. Having just blown up one deal, the president scuttled this bipartisan, bicameral agreement. His solution? A sequester...So, as the president's outrage about the sequester grows in coming days, Republicans have a simple response: Mr. President, we agree that your sequester is bad policy. What spending are you willing to cut to replace it?" John Boehner in The Wall Street Journal.
DRUM: There is no possible sequester deal to be made. "Am I leaving out some possible permutation here? I can just barely imagine a small-ball deal, maybe one that's 100 percent spending cuts, maybe one that includes some kind of semi-hidden revenue increase. But that's about it. Every other possibility is substantially worse than the status quo to either Democrats or Republicans." Kevin Drum in Mother Jones.
MILBANK: Grand bargain on life support. "The grand bargain may not be dead, but it has been given its last rites.On Tuesday morning, as President Obama and House Republicans were abandoning hope of reaching a compromise to avoid across-the-board spending cuts on March 1, the indefatigable duo of Erskine Bowles and Alan Simpson made one more attempt to float a bipartisan compromise. They were literally shouted down." Dana Milbank in The Washington Post.
Music recommendations interlude: Barenaked Ladies, "It's All Been Done," 1998.
BARTLETT: Who pays the corporate income tax? "[T]he actual burden of the corporate tax may fall on any of the groups that receive such flows; namely, customers, workers and shareholders, the ultimate owners of the corporation...The Treasury economists conclude that 82 percent of the corporate tax falls on capital and 18 percent on labor." Bruce Bartlett in The New York Times.
GLAESER: Use the EITC. Not the minimum wage. "U.S. President Barack Obama wants to raise the federal minimum wage to $9 an hour from $7.25 as a way to alleviate the pain of poverty and make work more attractive for the poor. These are worthy goals, but they should be paid for by taxpayers nationwide, not just by the businesses that employ lower-wage workers...The great appeal of raising the minimum wage is that it appears to reduce inequality without increasing budget deficits. That seductive glimmer is the policy’s greatest flaw. We should have a debate about how much to spend to promote opportunity. We shouldn’t embrace policies that make politicians look caring without requiring them to pay the cost of justifying higher taxes." Edward Glaeser in Bloomberg.
LEVIN: Old and rich? Less help for you. "Democrats want to close the budget gap by having the government lean more heavily on the wealthy, while Republicans want to close it by having the government spend less money. Both sides should agree at least to spend less money on the wealthy — via means testing. It may surprise some Americans to learn that the United States spends quite a lot on the affluent." Yuval Levin in The New York Times.
SOLTAS: How to get Amtrak back on the rails. "The U.S. Postal Service, an independent federal agency, announced plans this month to end Saturday mail delivery to cut costs. Amtrak, the nation's passenger-train service and a supposedly private company, might like to cut services, too, but it can't. In practice, it's tightly controlled. Strangely enough, it has less managerial discretion than an actual branch of the government...Republicans have in mind a smaller role for rail transit, and Democrats a larger one, but they ought to be able to agree on ways to make Amtrak work better, whatever its size. " Evan Soltas in Bloomberg.
PARKER: Moderates must retake the Republican Party. "There are now so many RINOs wandering the barren plains that, banded together, they might even form a critical mass. A base, if you will." Kathleen Parker in The Washington Post.
LLOSA: Immigration reform for tomorrow. "Lawmakers and their constituents need to understand three things. First, the number of immigrants needed to fill jobs in the U.S. -- from picking fruit to writing computer code -- is impossible to predict. Second, the U.S. would not be overrun by undocumented workers if a more flexible system was adopted, rather than setting predetermined immigration caps. Third, current immigrants do not pose an economic or cultural danger to the U.S., just as those of the 19th and early 20th centuries, equally maligned at the time, did not." Alvaro Vargas Llosa in Bloomberg.
MEYERSON: Jumpstarting wage growth with the minimum wage. "Wages today constitute the lowest share of both corporate revenue and the nation’s economy since World War II, while profits make up the highest share of gross domestic product in decades. The decline of labor income and the rise of capital income are nothing new." Harold Meyerson in The Washington Post.
Wintry interlude: The chemistry of snowflakes.
2) The latest Simpson-Bowles plan
Simpson, Bowles offer deficit-reduction plan. "Deficit hawks Alan Simpson and Erskine Bowles on Tuesday proposed a detailed plan for rewriting the tax code and implementing deep new spending cuts, hoping to offer a path to compromise for Democrats and Republicans...The new $2.4 trillion Simpson-Bowles proposal would identify $600 billion in spending reductions through changes to health-care programs such as Medicare and Medicaid...Another $600 billion in deficit-reduction would come from curbing or ending a number of tax breaks." Damian Paletta in The Wall Street Journal.
The plan: Read it here.
Interview: Ezra Klein talks to Erskine Bowles on the new Simpson-Bowles plan. The Washington Post.
Lunar interlude: A gravity map of the moon.
3) Want to worry about the economy?
Janet Yellen explains the weakness of the economic recovery. "This is a very good speech by Janet Yellen, the vice chair of the Federal Reserve. Yellen’s core question is simple: 'deeper recessions are usually followed by stronger-than-average recoveries.' But 'this recovery has been significantly weaker than past experience would have predicted.' Why?" Ezra Klein in The Washington Post.
Walmart is freaking out about the economy. Should the rest of us? "On Friday, Bloomberg published a couple of internal e-mails from Wal-Mart executives panicking about the company’s worst sales start in seven years — “a total disaster,” as one put it. The execs attributed Wal-Mart’s slump to the payroll tax hike that kicked in on Jan. 1, cutting the median family’s take-home pay by about $1,000 this year. So if Wal-Mart is struggling, does that mean everyone else should worry?" Brad Plumer in The Washington Post.
Forecasters keep thinking growth is right around the corner. They're always wrong. "Throughout the halting economic recovery that began in 2009, the formal economic projections released by the Congressional Budget Office, White House Council of Economic Advisers, and Federal Reserve have displayed quite a consistent pattern: This year may be one of sluggish growth, they acknowledge. But stronger growth, of perhaps 3.5 percent, is just around the corner, and will arrive next year." Neil Irwin in The Washington Post.
Meanwhile, this economy is locking out anyone without a college degree. "If recent trends continue — with employers increasingly demanding that job candidates show up to their interview with a sheepskin in hand — we should expect that the wage and employment advantage conferred upon college grads will only grow." Catherine Rampell in The New York Times.
Gas prices are rising, too. "The average price of a gallon of regular gasoline has jumped 45 cents in the past 31 days, according to AAA, the fastest run-up since 2005. Retail gasoline prices have climbed for 33 days in a row. A month ago, a gallon of regular gasoline cost $3.30; on Tuesday it stood at $3.75 nationwide...[It's] the result of refinery closures and maintenance, lower oil production by Saudi Arabia, market anxiety about tensions in Iran and Iraq, and guarded optimism about the prospects for economic recovery in the United States, Europe and China." Steven Mufson in The Washington Post.
And is the banking system healthy? "On paper, the nation’s banks are making a comeback: More money is being set aside in case of trouble, there are fewer losses on loans and there is less reliance on volatile funding. Too bad the markets don’t seem to care. Despite the strides banks have made to repair their balance sheets since the financial crisis, their stocks are trading below book value. Wall Street remains skeptical about the overall health of these institutions, even as profits have soared in the past year." Danielle Douglas in The Washington Post.
Equipping the Fed for a future crisis. "The federal government has generally responded to the financial crisis by expanding the power of regulators, most of all the Federal Reserve. But in an interesting speech this month, William C. Dudley, president of the Federal Reserve Bank of New York, argued that Congress has not gone far enough. Mr. Dudley’s concern is about a little-noticed piece of the 2010 Dodd-Frank Act that actually reduced the central bank’s authority in one crucial area: its ability to provide emergency funding to strapped financial firms." Binyamin Appelbaum in The New York Times.
Memes interlude: Because we somehow haven't done a "Harlem Shake" video here in Wonkbook.
4) Biden talks gun control
Biden to talk more on gun control. "Vice President Biden will travel to Danbury, Conn., later this week to promote the gun-control agenda crafted by the Obama administration in the wake of the Sandy Hook Elementary School massacre. Biden will deliver remarks at an event on Thursday at Western Connecticut State University." Felicia Sonmez in The Washington Post.
Instead of writing gun control legislation, Missouri is making such legislation illegal. "Missouri’s coming up with novel ways to fight for gun rights. A state lawmaker has introduced a bill that would make proposing any legislation that restricts or limits gun rights a Class D felony. Got that? State Rep. Mike Leara, a Republican from St. Louis County, is defending the Second Amendment by trying to ban any new attempts at gun control in Missouri." Diane Reese in The Washington Post.
In memoriam interlude: Armen Alchian, a great economist.
5) Here's Obama's immigration plan
Undocumented immigrants would face a 13-year wait for citizenship, in Obama's plan. "A draft of the White House immigration bill was leaked over the weekend, detailing a path to citizenship for undocumented immigrants that would take about 13 years after the passage of the bill to complete, policy experts say." Suzy Khimm in The Washington Post.
Read: The leaked plan. The Miami Herald.
Obama reaches out to GOP on immigration. "President Obama placed phone calls Tuesday afternoon to three GOP senators involved in an eight-member bipartisan group working on the issue. Obama spoke separately to Republican Sens. Marco Rubio (Fla.), Lindsey O. Graham (S.C.) and John McCain (Ariz.) about their efforts to negotiate a bill, White House officials said." Rosalind S. Helderman in The Washington Post.
Breakfast interlude: The "World's Okayest Mom" mug.
The rise of means-testing, in one infographic. Ezra Klein.
Health insurance stocks tanked yesterday. Here's why. Sarah Kliff.
How the ultra-rich are pulling away from the 'merely' rich. Dylan Matthews.
Under Obamacare, who even counts as a tobacco user? Sarah Kliff.
Interview: Erskine Bowles. Ezra Klein.
Janet Yellen on the weak economic recovery. Ezra Klein.
Jim Gilmore is calling for growth-oriented fiscal policy. Jim Tankersley.
Obama's immigration plan leaked. Suzy Khimm.
The gorilla in the CT scan. Sarah Kliff.
What you need to know about Simpson-Bowles. Ezra Klein.
Forecasters: the perennially wrong optimists. Neil Irwin.
The best sentences we read today. Ezra Klein.
Experts examine education achievement gap, present recommendations. Lyndsey Layton in The Washington Post.
The Supreme Court will hear a case on the constitutionality of limits on individual campaign contributions. Robert Barnes in The Washington Post.
House Dems want to end the antitrust exemption for health insurance. Sam Baker in The Hill.
Who needs the White House press corps? David Weigel in Slate.
Medicare benefit structure under examination. Elise Viebeck in The Hill.
Wonkbook is produced with help from Michelle Williams.