Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

Wonkbook's Number of the Day: 14.5 million. That's the number of vehicles automakers sold in 2012, the highest sales total since 2007 and a 9 percent gain in December alone, according to a story by Bill Vlasic in The New York Times

Wonkblog's Graph of the Day: States passed second-most abortion restrictions ever in 2012

Today in Wonkbook: the economy; energy; the 113th Congress; the debt ceiling and fiscal battles; and implementing the Affordable Care Act.

Top story: The 113th Congress begins

John Boehner reelected as House speaker. "John A. Boehner was narrowly reelected speaker of the House on Thursday, giving him a another chance to lead the chamber -- a task that has been difficult for him over the past two years. The Ohio Republican survived a mini-rebellion among the most conservative members of the GOP caucus to win his second term as speaker…In an emotional speech after his victory, the speaker did not mention the opposition. Instead, he described his personal ethos of not being someone who seeks media attention. It was an acknowledgment of what some of his GOP colleagues consider one of Boehner’s problems." Paul Kane in The Washington Post.

Read: House Speaker John Boehner’s address to the opening session of the 113th Congress (Transcript).

Who voted against Boehner for speaker and why? "Twelve Republicans voted against John Boehner’s second term as speaker Thursday, making for a very tense final few minutes of the vote…Below is a look at the defectors, whom they voted for, and our best guess as to why it wasn’t Boehner." Aaron Blake in The Washington Post.

Explainer: 5 reasons why being Speaker of the House ain’t what it used to be.

113 brings more women to the Capitol. "The new Congress includes a record number of women (101 across both chambers, counting three nonvoting members), as well as various firsts for the numbers of Latinos and Asians as well as Iraq and Afghanistan war veterans. But it was the rise of the female legislator -- 20 in the Senate and 81 in the House -- that had the Capitol thrumming with excited potential on Thursday." Ashley Parker in The New York Times.

House Democrats also crossed a pretty incredible diversity threshold. "House Democrats became the first caucus in the history of either chamber not to have a majority of white men. It was a watershed moment for the Democratic Party, which has adopted diversity as one of its chief selling points and has marketed itself as the party that looks more like a fast-changing United States" Rosalind S. Helderman in The Washington Post.

Check it out: Meet the new members of Congress.

Look: The opening day of the Congress, in photos.

The date for filibuster reform: Jan. 22. Probably. "Thursday was the first day of the 113th Congress. And it came and went without filibuster reform. So is filibuster reform dead? Nope. Majority Leader Harry Reid is just making the first day of the session last far longer than the typical 24 hours. The way this technically works is that Reid is “recessing” rather than ‘adjourning” for the day. The Senate is a weird place. But the filibuster reform debate is still on the way. Reformers tell me that the expected deadline is Jan. 22, or thereabouts." Ezra Klein in The Washington Post.

Toles cartoon: Congress's pork diet.

ROBINSON: The clown Congress. "Adding injury to insult, the pathetically unproductive 112th Congress slunk out of existence without even holding a House vote on $60 billion in emergency relief funds for communities ravaged by Hurricane Sandy. If our government cannot even provide aid and comfort to citizens whose lives have been devastated by natural disaster, what can it do? We are a nation of optimists, so our reflexive tendency is to believe that the 113th Congress,which convened Thursday, must be better. I suppose it might. I fear it might not." Eugene Robinson in The Washington Post.

Weird interlude: Abandoned Soviet amusement park in Berlin.

Top op-eds

KATYAL AND ROBERTSON: FTC is right not to regulate Google. "The FTC’s settlement -- to drop its antitrust inquiry after the company agreed to make voluntary commitments to change its practices -- has provoked criticism that Google is getting off easy. These objections are wrongly placed. The FTC’s approach to resolving the Google case is innovative and pro-consumer. It skillfully uses the commission’s enforcement powers in a manner geared to fast action, flexible thinking and enforceable commitments, rather than to burdensome litigation and sclerotic consent orders." Neal Katyal and J. Robert Robertson in Bloomberg.

SOLTAS: Why we shouldn't raise the federal minimum wage. "Liberal arguments for increasing the minimum wage have a fundamental flaw: They restrict the set of policy choices to either a minimum wage increase or doing nothing. That means they overlook the single most important federal policy for the poor: the Earned Income Tax Credit…Democrats who want to address income inequality would be much better served by increasing the EITC rather than the minimum wage. Alternatively, if Republicans shifted strategy and suggested an increase in the EITC as a counteroffer to Democratic minimum-wage proposals, they would have the clearly stronger argument on merits." Evan Soltas in Bloomberg.

GOLDHILL: To fix healthcare, make patients into consumers. "I agree with the left that we need a true cradle-to-grave safety net for every American. But the right is correct that we are unlikely to build a good, affordable system of care unless we leave most of it to market incentives. Rather than see these two ideas as being in conflict, we need to understand how they can support each other. I’ve argued that the only way to restore normal functioning and incentives in health care is for patients to regain their status as customers. If we could ensure that every American had lifetime protection against the cost of managing a true health catastrophe, it should give us the confidence to rebuild our health-care marketplace." David Goldhill in Bloomberg.

Burning interlude: The world's largest bonfire.

The economy finishes strong

2012, economically, ended on a high note. "The economy appears to have ended the year on a high note despite hand-wringing in Washington over the 'fiscal cliff,' according to data released Thursday. Businesses kept hiring, and consumers opened their wallets for cars and holiday gifts -- seemingly shrugging off the shenanigans in the nation’s capital." Ylan Q. Mui in The Washington Post.

ADP: Happy New Year! We gained 215,000 jobs in December. "The ADP figures for December came out Thursday morning and are rather encouraging. ADP estimates that we gained 215,000 jobs in December, far outpacing any recent months’ gains, and it also revised its November number from 118,000 jobs added to 148,000." Dylan Matthews in The Washington Post.

@spbaines: Very amused that so many people think the purpose of ADP is to estimate the NFP, rather than give a picture of the economy.

It was an especially good year for car sales. "Automakers on Thursday reported their strongest sales year since 2007, posting solid December results in the United States and promising more growth in 2013. Sales of new cars and trucks increased 9 percent in December, a gain that put total sales for 2012 at about 14.5 million vehicles -- the industry’s best performance in five years, according to the research firm Autodata." Bill Vlasic in The New York Times.

@conorsen: It's lazy and hackish to say it's all about policy, but Fed/Congressional policy > macro data in 2013.

The Fed isn’t very bullish on ’13, and five other takeaways from the new minutes. "The Federal Reserve released minutes of its Dec. 12 policy meeting Thursday afternoon, offering a window into how leaders of the central bank viewed the economy and monetary policy at the end of the year. This was the meeting, you’ll recall, where the Fed said it expects to keep easy money policies in place until either unemployment declines to 6.5 percent or inflation is forecast to rise above 2.5 percent. Here are the key points from that Federal Open Market Committee meeting." Neil Irwin in The Washington Post.

Interview: The FOMC's December minutes.

Fed officials aren't sure how long they want to continue monetary stimulus. "Just a few months after announcing a campaign to reduce unemployment, Federal Reserve officials are already debating how soon to stop it, reflecting persistent internal divisions about the effort’s value…The Fed announced after the meeting that it would keep buying assets until the pace of job creation improved substantially, part of an effort to increase the impact of its policies by announcing economic objectives rather than end dates. But the account shows that many members of the 12-person committee continue to think in terms of end dates, partly because they are worried about the potential costs." Binyamin Appelbaum in The New York Times.

@BCAppelbaum: If the Fed were a sailboat, it would be very good at tacking.

An amazing mea culpa from the IMF’s chief economist on austerity. "Consider it a mea culpa submerged in a deep pool of calculus and regression analysis: The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth…That it comes under the byline of fund economic counselor and research director Olivier Blanchard is significant. Fund research is always published with the caveat that it represents the views of the researcher, not the institution itself. But this paper comes from the top, and attempts to put to rest an issue that has been at the center of debate about how fast countries should move in their efforts to tame large debts and deficits." Howard Schneider in The Washington Post.

Read: The IMF paper, "Growth Forecast Errors and Fiscal Multipliers".

Tim Geithner to leave Treasury by end of month. "Bloomberg and Politico have reported that Treasury Secretary Tim Geithner will leave his post with the Obama administration by the end of January…Bloomberg quoted a source saying White House Chief of Staff Jack Lew remains the leading contender for the Treasury job." Josh Hicks in The Washington Post.

@pdacosta: Several FOMC members thought Fed would need to slow or stop asset buys well before the end of 2013; a few saw QE until end 2013.

Why we need a currency war with China (and Denmark and Singapore … ) "In a new working paper, Joe Gagnon and Fred Bergsten at the Peterson Institute argue not just for import tariffs like those [Sen. Chuck] Schumer advocates, but for a full-frontal assault on countries that are manipulating their currencies, including many more targets than just China, which is actually getting better relative to past manipulation. Specifically, they want the U.S. to offer the eight worst currency manipulators -- China, Denmark, Hong Kong, Korea, Malaysia, Singapore, Switzerland and Taiwan -- an ultimatum." Dylan Matthews in The Washington Post.

@bencasselman: In fairness, now that we're in the world of endless cliffs, it would be hard for Geithner NOT to leave before it's all resolved.

Forget the market rally. The fiscal cliff deal is still a drag on growth. "The stock market surged the day after Congress passed a fiscal cliff fix, with the Dow rallying more than 300 points on Wednesday. But economists point out that the deal will still cause some drag on the economy in 2013, and some analysts have released more pessimistic projections for growth this year…Altogether, JPMorgan estimates that the fiscal cliff deal will subtract about 1 percentage point from growth in 2013, according to its appraisal of the Senate version of the bill, which closely mirrors the final legislation. That’s mostly attributable to the payroll tax hike, rather than to the agreement to raise taxes on the wealthiest earners, which both JPMorgan and IHS agree will have a very limited effect on growth this year." Suzy Khimm in The Washington Post.

@JeffreyYoung_HC: "Get that $1 trillion platinum coin out of your mouth or you'll destroy the world economy and also choke, Senator Baby!"

The world is becoming less scary, in four charts. "All kinds of analysts spent a lot of time during the fiscal cliff standoff fretting about what the markets would do. At what stage, we wondered, would there be wild fluctuations on Wall Street that may give lawmakers more sense of urgency toward a deal? At the very end, those fears seemed to be becoming a reality." Neil Irwin in The Washington Post.

@pourmecoffee: Basically our economy is the James Bond franchise now, with an ever more ridiculous death scenario and escape in every sequel.

Longread: Frank Portnoy and Jesse Eisinger discuss what's inside America's banks: "For the past four years, the nation’s political leaders and bankers have made enormous -- in some cases unprecedented -- efforts to save the financial industry, clean up the banks, and reform regulation in order to restore trust and confidence in the American financial system. This hasn’t worked. Banks today are bigger and more opaque than ever, and they continue to behave in many of the same ways they did before the crash."

@JoshZumbrun: Truth is, Fed is waiting to see labor data, so we'll learn more from jobs report than from today's minutes (and this will be true all year)

KROSZNER: The new tell-all Fed. "[T]he fewer surprises and mixed messages in communication there are, the more likely the Fed’s efforts to shore up the American economy will be effective. In this regard, the central bank’s newest strategy of talking about itself -- and notably, of its decision to tie its interest-rate moves to an unemployment threshold -- is a great step forward in economic stewardship. Now, everyone knows what criteria Fed officials are using to guide future policy." Randall S. Kroszner in The New York Times.

Music recommendations interlude: Toto, "Hold the Line," 1979.


The fiscal cliff deal helped wind power. But our wind policy is still insane. "Congress extended a key tax credit for wind energy for another year -- at a cost of some $12 billion over 10 years. Not only that, but Congress made a small tweak: Wind producers won’t have to finish their projects by 2013 to qualify for the production tax credit. They’ll just have to begin building this year. That’s a crucial change that could give the U.S. wind industry a boost in the decade ahead. Yet even with the tax credit renewal, the wind industry is still likely to slump in 2013. And that’s partly because congressional support for wind is extremely erratic." Brad Plumer in The Washington Post.

Biodiesel credit also renewed. "The Congressional budget deal brokered this week kept tax breaks in place for a variety of industries, but biodiesel got something even better: a retroactive reinstatement of a dollar-a-gallon credit going back to January 2012, when it lapsed. With the credit in place, production will be about 1.6 billion gallons this year, estimated Ben Evans, a spokesman for the National Biodiesel Board, a trade association. Without the credit, the industry would have sold only 1.3 billion gallons, he said." Matthew L. Wald in The New York Times.

U.S. electricity use on wane. "The Energy Information Administration is projecting that electricity use in the U.S. will rise an average of just 0.6% a year for industrial users and 0.7% for households through 2040…In response to tepid demand, electricity production in the U.S. fell in 2008 and 2009, amid the recession, then ticked up slightly in 2010 before falling again in 2011." Rebecca Smith in The Wall Street Journal.

Europe's coal renaissance. "While coal production and use plummet in America, in Europe 'we have some kind of golden age of coal,' says Anne-Sophie Corbeau of the International Energy Agency. The amount of electricity generated from coal is rising at annualised rates of as much as 50% in some European countries. Since coal is by the far the most polluting source of electricity, with more greenhouse gas produced per kilowatt hour than any other fossil fuel, this is making a mockery of European environmental aspirations. How did it happen?" The Economist.

DUENWALD: Fiscal cliff deal gives wind power a lift, but only for now. "The trouble is, the extension is brief, and it's impossible to predict whether there will be another one next year. This has been the problem with the wind-power tax credit all along: It locks the industry into a perpetual cycle of boom and bust…What's needed to allow the wind industry some stability is a thoughtful approach for the long term, one that guides wind power gradually toward a subsidy-free future. The tax credit should be ensured, but phased out over five years or more -- ideally via a mechanism that accounts for the difference in price between wind power and natural gas-fired power." Mary Duenwald in Bloomberg.

Adorable animals interlude: Fox stuck in plant pot.

The debt ceiling and the fiscal battles

How the fiscal cliff deal will affect the economy and deficits. "While the legislation that President Obama signed into law on Tuesday night averts the worst effects of the fiscal cliff and is a step toward raising revenue needed to cut the deficit, most economists would say it is an incomplete solution at best. Here are three ways -- and six charts -- showing what the fiscal cliff deal does and doesn’t accomplish." Zachary A. Goldfarb in The Washington Post.

Step 1: Corporate tax giveaways. Step 2: Outcry. Step 3: Profit! "Pundits on both left and right were outraged when they realized a whole flotilla of corporate tax giveaways were buried in the fiscal cliff deal, ranging from a tax break for race-car track owners to electric-scooter makers…But the animus against the narrowly targeted tax breaks — known on the Hill as 'tax extenders' -- could actually help corporations in their effort to land a much bigger prize than temporary giveaways: comprehensive corporate tax reform." Suzy Khimm in The Washington Post.

After fiscal cliff deal, IRS issues withholding rules. "Hours after President Barack Obama signed the bill averting the fiscal cliff, the Internal Revenue Service issued new guidelines for employers on how much to withhold from workers' paychecks this year. Employers should start using the revised withholding tables as soon as possible, but not later than Feb. 15, the IRS said Thursday. Most employers will be able to comply with that deadline without trouble, according to the American Payroll Association, a trade group." John D. McKinnon in The Wall Street Journal.

KRUGMAN: Battles of the budget. "For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society -- Social Security, Medicare and Medicaid -- and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war. The fight over the fiscal cliff was just one battle in that war." Paul Krugman in The New York Times.

WEST: Debt ceiling fight could be a train wreck. "While lawmakers can be proud that they exceeded the expectations of many by not allowing a massive growth shock, the real story of the fiscal cliff is one of opportunity cost…Trouble is, the Biden-McConnell troupe is likely a one-hit wonder. House Republicans feel they were fleeced by their Senate counterparts; it’s hard to see the House abdicating responsibility to the Senate again in the near future…It’s too early to say that the debt limit negotiations will necessarily be a train wreck, but the last few weeks provide little reason to be too optimistic that politics will soon change for the better." Sean West in Bloomberg.

STRASSEL: Why the debt ceiling fight will go sour. "On to Round Two, which will center on the debt ceiling due to hit in February. Republicans are convinced they can win this one. Their thinking? The president can't use the threat of higher middle-class taxes to force the GOP to yield. Without the middle class as a hostage in the negotiations, they believe, the debt-ceiling debate will be entirely on spending and Mr. Obama's failure to confront the nation's $16 trillion debt." Kimberley Strassel in The Wall Street Journal.

BARRO: Why we might go off the platinum coin cliff. "In general, the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve's control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination. This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government's bills, in lieu of issuing debt." Josh Barro in Bloomberg.

Science Wonkbook doesn't pretend to understand interlude: "Atoms Reach Record Temperature, Colder than Absolute Zero".

Implementing the Affordable Care Act

Plans for health insurance exchanges approved by White House for seven more states. "The Obama administration on Thursday approved plans by seven states to create health insurance exchanges, the new marketplaces at the heart of the Affordable Care Act. With this final round of approvals, the White House has signed off on blueprints by 17 states and the District to operate their own exchanges in 2014, as long as they continue to meet certain benchmarks over the course of the next year." Sarah Kliff in The Washington Post.

The White House calls Utah’s Obamacare bluff. "For months now, Utah has put the White House in a sticky spot on Obamacare. Unlike most Republican-governed states, Utah has been eager to run a health insurance exchange. In fact, it already has one: When the Affordable Care Act passed in 2010, Utah was one of two states running a marketplace where consumers could compare and purchase coverage (Massachusetts was the other). Unlike most Democratic-governed states, though, Utah did not want to set up the kind of exchange that that the health-care law envisioned." Sarah Kliff in The Washington Post.

Read: "Request to Run Utah's Version of a State-Based Health Exchange".

Here comes a health-care union. "The nation's largest nurses union said Thursday it would team up with a union representing other health-care workers, seeking to make the combined entity the dominant labor group in the fast-growing health-care sector…The California Nurses Association and the National Union of Healthcare Workers said the affiliation was aimed at preventing hospital chains from scaling back benefits for employees and fighting for workplace standards needed to improve patient care." Kris Maher in The Wall Street Journal.

EMANUEL: End-of-life care. "It is conventional wisdom that end-of-life care is an increasingly huge proportion of health care spending. I’ve often heard it said that people spend more on health care in the year before they die than they do in the entire rest of their lives. If we don’t address these costs, the story goes, we can never control health care inflation. Wrong. Here are the real numbers. The roughly 6 percent of Medicare patients who die each year do make up a large proportion of Medicare costs: 27 to 30 percent. But this figure has not changed significantly in decades. And the total number of Americans, not just older people, who die every year -- less than 1 percent of the population -- account for much less of total health care spending, just 10 to 12 percent." Ezekiel Emanuel in The New York Times.

Animation by hand interlude: Jake Fried's "The Deep End".

Et Cetera

In an excellent weekend longread, Kevin Drum explains the connection between lead and crime. Mother Jones.

Another longread for this weekend: Ada Calhoun examines the political consequences of "do-it-yourself" abortions. The New Republic.

The 10 juiciest tidbits from the ‘fiscal cliff’ talks. Ezra Klein in The Washington Post.

Think tank to study privatizing most Postal Service operations. Lisa Rein in The Washington Post.

White House pushes forward on immigration ahead of bigger reform fight. David Nakamura and Tara Bahrampour in The Washington Post.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams