But though there’s been some grumbling among House Republicans, perhaps what’s most surprising is how quiet that grumbling has been. The Republican Study Committee didn’t swing into opposition of a deal, for instance. The National Review, which might have served as a locus for anti-deal sentiment, instead featured a post by its editor, Rich Lowry, proclaiming $33 billion in cuts “quite an accomplishment” and warning that “it’d be foolish in my view to push it all the way into a shutdown that would be a high-risk and low-reward proposition, since the future of the country doesn’t depend on how many billions are shaved in discretionary spending this year or policy riders of six-month duration.”
Rather, Lowry says, the future of the country depends on the long-term cuts in Paul Ryan’s budget and the sort of fiscal constraints that the GOP could demand as its price for raising the debt ceiling. And we’re starting to get some detail on these: Ryan looks like he’s going to spare Social Security but go for $1 trillion in cuts to Medicaid. Senate Republicans are closing ranks behind a Balanced Budget Amendment (which, as you’ll see later in Wonkbook, has not impressed Bruce Bartlett). If all goes well for Boehner, he’ll be able to cut some sort of deal on H.R.1 and smoothly transition to pushing these sort of long-term measures. And you can see Lowry previewing his argument: no reason to waste a shutdown on discretionary spending. If you’re going to go nuclear, better to do it in service of the big stuff.
Housekeeping: “High Five” and “Fab Five” were definitely the most popular suggestions to replace “Top Stories.” I also liked “Starting Five” and “Gang of Five.” But the winner, from Gary Scott, managed to flatter the odd hours Dylan, Michelle and I keep to bring Wonkbook out. So, introducing:
Five in the morning
1) House Republicans are split on backing a budget deal, report David Fahrenthold and Paul Kane: “No deal. Yet. One day after Vice President Biden outlined a potential agreement to stave off a government shutdown, Republicans on Thursday said it won’t be that easy. Some seemed to object to the idea of a compromise, of any sort. Others took issue with the specific compromise Biden floated on Wednesday. It would cut $33 billion from the federal budget, the largest one-time reduction in U.S. history. And some said that was nowhere near enough...The key is how deep Republican rejectionism runs. It might actually help Boehner now, by giving him leverage for a better deal. But if he ever does strike a bargain with Democrats, it could turn on him.”
2) USAID says the cuts to foreign aid in H.R.1 would “lead to” the deaths of 70,000 children, reports Josh Rogin: “’We estimate, and I believe these are very conservative estimates, that H.R. 1 would lead to 70,000 kids dying,’ USAID Administrator Rajiv Shah testified before the House Appropriations State and Foreign Ops subcommittee. ‘Of that 70,000, 30,000 would come from malaria control programs that would have to be scaled back specifically. The other 40,000 is broken out as 24,000 would die because of a lack of support for immunizations and other investments and 16,000 would be because of a lack of skilled attendants at birth.’”
3) The White House is trying to tamp down reports that it’ll agree to limit EPA powers, reports Robin Bravender and Darren Samuelsohn: “The White House is trying to put out the fire from an AP report saying the Obama administration may agree to some Republican riders rolling back the EPA’s power on key environmental initiatives. In a statement to POLITICO, the White House repeated its opposition to environmental budget riders, but didn’t issue a direct veto threat...An AP story Wednesday night quoted a Democratic congressman saying the administration said some restrictions on EPA regulations would have to make it into a final budget deal with Republicans. It’s unclear what EPA regulations would be included: GOP riders on the H.R. 1 spending bill targeted carbon dioxide emissions, mountaintop mining and Chesapeake Bay cleanup standards, among others.”
4) The GOP’s 2012 budget will largely spare Social Security from cuts, reports Erik Wasson: “House Budget Committee Chairman Paul Ryan (R-Wis.) will largely give Social Security a pass in his highly anticipated budget while proposing a significant overhaul of Medicare and Medicaid, according to sources briefed on the plan. The 2012 budget resolution, which committee Republicans are still finalizing, is scheduled to be unveiled on Tuesday. It will not back specific benefit cuts to Social Security or suggest raising the retirement age, sources said. Instead, it will lay out the problems with the program and suggest authorizing committees tackle the specifics. It also will propose ‘trigger’ thresholds for Social Security that, once reached, would ask the president to propose a way to fix the program.”
5) Medicaid, however, will not be so lucky reports Jonathan Allen: “House Republicans are planning to cut roughly $1 trillion over 10 years from Medicaid, the government health insurance program for the poor and disabled, as part of their fiscal 2012 budget, which they will unveil early next month, according to several GOP sources. Though Budget Committee Chairman Paul Ryan has yet to lock in his final numbers, he made clear to POLITICO in February that he intends to target Medicaid and Medicare for savings. While Medicaid is easiest to win consensus on, Medicare is the biggest debt driver. It’s not yet clear how much Ryan hopes to cut from Medicare, and he and GOP leaders have been reluctant to discuss their plans for the other entitlement behemoth: Social Security. But they’ve made clear that they don’t consider Social Security to be as pressing an issue as Medicare and Medicaid.”
Kitsch cover interlude: The Arcade Fire play “Girls Just Want to Have Fun” by Cyndi Lauper.
Got tips, additions, or comments? E-mail me.
Still to come: Subprime bonds are popular again; a bunch of past presidential advisers are calling for deficit reduction; Jeb Bush is growing increasingly influential on education reform; Bruce Bartlett is not impressed with the GOP’s Balanced Budget Amendment; and an elephant befriends a dog.
Congressional Democrats are considering proposing tax increases, reports Alexander Bolton: “Senate Democrats are discussing plans to introduce tax policy changes that they say would raise federal revenues and broaden the budget debate beyond discretionary spending cuts. Democrats feel they have been boxed by Republicans into a debate over cutting discretionary spending, which accounts for a mere 12 percent of the federal budget. Democratic senators say they have been fighting on the defensive, scrambling to protect social spending -- such as that for the Women, Infants and Children nutrition program, Planned Parenthood and NPR -- from GOP-proposed cuts. Democrats want to take the offensive and propose higher tax rates for millionaires, companies that move factories overseas and wealthy people who make charitable contributions.”
Subprime bonds are popular again, report Matt Wirz and Serena Ng: “Subprime and other residential mortgage bonds that helped trigger the financial crisis are back in vogue with long-term investors, in the latest sign that American credit markets are healing after the worst downturn in a generation. The prices on a representative slice of the subprime bond market have doubled from 30 cents on the dollar at the low point of the crisis to roughly 60 cents today. Their comeback underscores how investors have regained the courage to take on more risk as the economy recovers, pushing up the prices of a broad swath of riskier assets, from commodities to junk bonds to stocks...The attraction of bonds underpinned by subprime home mortgages is fat yields, at a time when the Federal Reserve has pushed interest rates on the safest investments to among the lowest levels in history.”
A group of past presidential advisors is pushing for debt reduction, reports Lori Montgomery: “On Thursday, a powerful group of leaders in the business, academic and economic communities sent letters to the White House and Capitol Hill urging policymakers to work together to reduce the deficit by overhauling government retirement programs and an inefficient federal tax code...One of the missives was signed by 64 economists and budget experts from both parties, including former Federal Reserve Board chairman Paul Volcker, former Clinton Treasury secretary Robert Rubin and several senior officials from the George W. Bush White House, including economic adviser Lawrence Lindsey and Council of Economic Advisers chairman Greg Mankiw.”
Regulators are under pressure to reign in compensation at Fannie and Freddie: http://wapo.st/gTfWu6
The Fed has released names of banks that benefited from crisis loans, reports Neil Irwin: “The Federal Reserve lent vast sums of money to a long list of banks during the financial crisis, according to newly released documents, supporting institutions gigantic and minuscule, and those based throughout United States and from many corners of the globe...The new documents -- 900 files totaling 29,000 pages, obtained through a Freedom of Information Act lawsuit by Bloomberg and Fox Business -- show an institution that had become the global lender of last resort. In addition to some of the biggest Wall Street firms and hundreds of smaller U.S. banks, the Fed’s emergency lending supported the U.S. branches of foreign banks, including one partly owned by the Libyan government.”
Mortgage deal negotiations have begun in earnest: http://on.wsj.com/hUNz0U
Republicans’ job creation plan makes no sense, writes Paul Krugman: “There’s a fallacy of composition here: since workers at any individual company may be able to save their jobs by accepting a pay cut, you might think that we can increase overall employment by cutting everyone’s wages. But pay cuts at, say, General Motors have helped save some workers’ jobs by making G.M. more competitive with other companies whose wage costs haven’t fallen. There’s no comparable benefit when you cut everyone’s wages at the same time. In fact, across-the-board wage cuts would almost certainly reduce, not increase, employment. Why? Because while earnings would fall, debts would not, so a general fall in wages would worsen the debt problems that are, at this point, the principal obstacle to recovery.”
Default is unconstitutional, writes Thomas Geoghegan: http://politi.co/eM4dxD
Republicans’ proposed constitutional limit on spending is idiotic, writes Bruce Bartlett: “The gross domestic product is not a concept defined in law and is revised constantly; from time to time, the Bureau of Economic Analysis revises the GDP data all the way back to 1929. And of course, the 18 percent figure is totally arbitrary; the proposal effectively assumes that all federal outlays consist of funds that are appropriated annually, rather than consisting primarily of mandatory programs such as Social Security, Medicare and interest on the debt. Even if Congress was willing to cut mandatory spending, it is practically impossible to do so quickly unless it is willing to reduce the monthly checks going to current retirees and other actions difficult to contemplate. In short, this is quite possibly the stupidest constitutional amendment I think I have ever seen.”
Informative animation interlude: How imperial borders in the Middle East have changed, from 3000 B.C.E. to 2006 C.E.
The administration has unveiled new rules for a type of managed care that could reduce Medicare costs, reports Amy Goldstein: “The Obama administration proposed rules Thursday for using the influential Medicare program to spur a controversial form of managed care emerging around the country that nudges doctors and hospitals to save money by coordinating treatment for their patients. The rules are designed to carry out the first broad changes in the delivery of care under the year-old federal law intended to overhaul the nation’s health-care system. The proposal lays out a path for hospitals, doctors and other care providers to form teams called accountable care organizations (ACOs) that can become responsible for all the medical needs of a group of older Americans on Medicare.”
Jon Cohn explains how ACOs work: “Imagine you’re in your 50s and you’re relatively healthy, although you have allergies and have recently developed high blood pressure. Then you probably have a general doctor or nurse practitioner, an allergist, and a cardiologist. When you twisted your ankle playing tennis, you also saw an orthopedist, got MRIs at a local screening center, and saw a physical therapist for several weeks. You might have driven all over town to see these different professionals. And it’s quite possible they communicated with each other very little, except for a handful of phone calls and memos. The idea of ACO is to give you one-stop shopping, ideally in one physical setting where you can get most of your health care. Here, the generalists and specialists are in constant contact with each other, handling your chronic condition (in this case, high blood pressure) with a coordinated strategy. When you have some kind of acute episode or emergency, the professionals have your records right in front of them: They know everything from your drug allergies to your complete medical history.”
Arizona might charge obese Medicaid patients more: http://on.wsj.com/fnFdik
A health reform program has already gone broke, reports Jennifer Haberkorn: “The health reform law’s Early Retiree Reinsurance Program is so popular it’s going to have to retire -- early. One of the Affordable Care Act’s most popular programs will no longer accept applications after April 30, according to a CMS memo to congressional staff obtained by POLITICO Thursday. The program was given $5 billion in the health care overhaul and was supposed to stay open no later than 2014, when the exchanges come online. But it is apparently about to run out of funds. Administration officials said that employers already enrolled in the program will continue to receive their approved funds, which have to be used by December 2013. The program will not technically close until then, the officials said.”
The Vermont House has passed a single-payer bill: http://bit.ly/hMzAoo
Jeb Bush is becoming a leader in education reform, reports Nick Anderson: “At the core of the Jeb Bush agenda are ideas drawn from his Florida playbook: Give every public school a grade from A to F. Offer students vouchers to help pay for private school. Don’t let them move into fourth grade unless they know how to read. Through two foundations he leads in Florida and his vast political connections, Jeb Bush is advancing such policies in states where Republicans have sought his advice on improving schools. His stature in the party and widening role in state-level legislation make him one of the foremost GOP voices on education. ‘He is the standard-bearer,’ said Michael J. Petrilli of the Thomas B. Fordham Institute, a conservative-leaning education think tank.”
At least one FCC commissioner is against the AT&T/T-Mobile merger: http://wapo.st/ihXWmw
Florida is facing huge cuts in unemployment benefits, reports Lizette Alvarez: “The Florida House of Representatives approved a bill in March that would establish the deepest and most far-reaching cuts in unemployment benefits in the nation. Like the law signed in Michigan on Monday, the measure would reduce the number of weeks the unemployed could collect benefits from the standard 26 weeks to 20. But the House proposal in Florida -- in a high-unemployment state that already has some of the lowest benefits -- takes it one step further by tying benefits to the unemployment rate. If the rate falls, so do the number of weeks of benefits. If the rate dips below 5 percent, the jobless would collect only 12 weeks of benefits, the lowest level.”
Detroit automakers are adding jobs: http://nyti.ms/gNRNg2
Adorable animals being friends interlude: An elderly elephant befriends a dog.
I try to explain what a clean-energy standard is, and why we’re talking about one: “That brings us to a clean-energy standard. It works like a renewable-energy standard — we tell utilities that they have to produce 80 percent of their energy from clean sources by 2035 — but includes non-renewables that are, in theory, clean. Like clean coal. But it’s a pale imitation of everything that came before it: worse for emissions, for the deficit, for our international strategy. Oh, and it’s less market-based than any of the others, too. For one thing, a CES only covers electricity, which means it’s only catching about a third of emissions. For another, it targets “emissions intensity” rather than “total emissions.” If we say the economy can only emit X tons of carbon, that holds down the carbon we pump into the atmosphere. If we say that only 20 percent of our energy can come from dirty sources, well, one way to slip under the limit is to increase the amount of energy we produce. It’s the difference between trying to lose weight by cutting calories and trying to lose it by cutting the percentage of your calories that come from junk food.”
U.S. nuclear regulators have allowed plants to phase out equipment that could have prevented the Japan accident: http://bit.ly/fMJxlB
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.