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Wonkbook's Number of the Day: -0.4%. That's the annualized rate of growth in real per capita disposable income, averaged over the last five years. Despite the economic recovery, that's the worst reading since the measure began in 1964. For comparison, the normal annual growth in incomes is +2.2%. More on the economy below. 

Joshua Roberts/Bloomberg
Joshua Roberts/Bloomberg

Wonkblog's Graph of the Day: Disability insurance trust fund to run out around 2018, the earliest projection among such programs.

Wonkbook's Top 5 Stories: 1) Dems, GOP plan next act for budget debate; 2) Obama tries to renew gun control push in speech; 3) growth in economy, but pain in incomes; 4) your health, and what the government has to do with it; and 5) feds go green as states go back.

1) Top story: Entitlement cuts may be coming in Obama's April budget

Mark your calendars, wonks: Obama will release his budget on April 10. "President Obama will release his fiscal 2014 budget on April 10, more than two months after it was due, White House principal deputy press secretary Josh Earnest said Thursday. The budget will give a detailed overview of the president’s priorities and his sense of the economy and nation’s fiscal challenges in his second term. It will propose tax hikes and spending cuts to help tame borrowing – though it will also propose fresh spending on programs like early education for children from poor and moderate income families." Zachary A. Goldfarb in The Washington Post.

@robertcostaNRO: Obama told GOP that his budget will reflect what he campaigned on, and, in the words of a source, "what he campaigned on." GOPers groan

Will it hit entitlements? "The White House is strongly considering including limits on entitlement benefits in its fiscal 2014 budget—a proposal it first offered Republicans in December. The move would be aimed in part at keeping alive bipartisan talks on a major budget deal. Such a proposal could include steps that make many Democrats queasy, such as reductions in future Medicare, Medicaid and Social Security payments, but also items resisted by Republicans, such as higher taxes through limits on tax breaks, people close to the White House said." Damian Paletta in The Wall Street Journal.

@mattyglesias: Fussy point, but if we’re going to reindex Social Security shouldn’t we use the PCE deflator instead of chained CPI?

Meanwhile, the Senate pushes the CBO to use "dynamic scoring" -- and why that matters a lot. "Here’s one Republican victory that went virtually unnoticed in the slew of budget votes last week: The Senate told the Congressional Budget Office it should...[use] a model called “dynamic scoring,” which assumes that tax cuts will pay for at least part of their cost by generating more economic activity...The amendment originally failed in committee on a party-line vote, but Portman eked out a narrow 51-48 victory in the final series of budget votes that started around 3 a.m. on Saturday." Kelsey Snell and David Nather in Politico.

@ezraklein: The WH doesn't trust the GOP on tax reform: They think R's promise revenue but come back with tricks like dynamic scoring.

Boehner releases major budget memo. "In a message sent Thursday to rank-and-file House Republicans, Boehner (R-Ohio) recaps how he believes his conference has reframed the national debate on taxes and spending in the first few months of 2013...“We made the decision to center the spending debate on sequestration rather than on the debt ceiling or legislation to keep the government running, denying the president the ability to hide behind straw men in his reluctance to control spending,” the message reads." Ed O'Keefe in The Washington Post.

Music recommendations interlude: Laura Marling, "My Manic and I," 2011.

Top op-eds

DELONG: Don't let the economy keep bleeding. "In the 12 years of the Great Depression – between the stock-market crash of 1929 and America’s mobilization for World War II – production in the United States averaged roughly 15% below the pre-depression trend, implying a total output shortfall equal to 1.8 years of GDP. Today, even if US production returns to its stable-inflation output potential by 2017 – a huge “if” – the US will have incurred an output shortfall equivalent to 60% of a year’s GDP...[M]y conclusion is that I should stop calling the current episode the Lesser Depression. Yes, its shape is different from that of the Great Depression; but, so far at least, there is no reason to rank it any lower in the hierarchy of macroeconomic disasters." J. Bradford DeLong in Project Syndicate.

FELDMAN: Why judicial moderation won't work for gay marriage. "[T]he problem with this gradual strategy envisioned by court observers and attributed to Kennedy is that it would create anomalies leading to a nightmarish barrage of new litigation...To understand the mess that would result if the court struck down DOMA without finding a general right to same-sex marriage, consider what would happen if the federal government recognized marriages performed in states that allow gay couples to marry while continuing to deny marital status to couples in other states." Noah Feldman in Bloomberg.

SOLTAS: The health care market needs price transparency. "How could government help the health-care market work better?...[R]equire large hospitals and medical providers who receive dollars from Medicare, Medicaid or federal research grants to collect and publish basic price data...California, Florida, Massachusetts, Minnesota, New Hampshire, New Jersey, and Wisconsin have all done versions of this on a smaller scale...The federal government is uniquely placed to push this forward." Evan Soltas in Bloomberg.

KRUGMAN: Cheating our children. "Yes, we are cheating our children, but the deficit has nothing to do with it...[T]he [deficit scolds] have a new line: We must bring down the deficit right away because it’s “generational warfare,” imposing a crippling burden on the next generation. What’s wrong with this argument? For one thing, it involves a fundamental misunderstanding of what debt does to the economy...Yet there is, as I said, a lot of truth to the charge that we’re cheating our children. How? By neglecting public investment and failing to provide jobs." Paul Krugman in The New York Times.

ROBINSON: Maximum mayhem and gun law. "Is this supposed to be the price of the Second Amendment? Is this the kind of America we want?..[I]t’s hard for me to accept that the right to “keep and bear arms” extends to the kind of arsenal that Adam Lanza — and his mother, Nancy, whom he also killed — assembled and kept in their home...Given that guns are enshrined in the Constitution, there may have been no way to keep firearms out of the Lanza home. But if the federal ban on military-style assault weapons had not been allowed to expire, we might have seen less carnage in Newtown. Lanza probably wouldn’t have been able to get off so many shots in so little time. He wouldn’t have been able to fire so many rounds without pausing to reload." Eugene Robinson in The Washington Post.

BROOKS: The empirical kids. "I’m teaching at the Jackson Institute for Global Affairs at Yale, and one terrifically observant senior, Victoria Buhler, wrote a paper trying to capture how it feels to be in at least a segment of her age cohort...Buhler argues that the group she calls Cynic Kids 'don’t like the system — however, they are wary of other alternatives as well as dismissive of their ability to actually achieve the desired modifications. As such, the generation is very conservative in its appetite for change...Rather, the Cynic Kids have embraced the policy revolution; they require hypothesis to be tested, substantiated, and then results replicated before they commit to any course of action.'" David Brooks in The New York Times.

Woody Allen interlude: 44 minutes of his trademark stutter.

2) Obama speaks on gun control

In speech, Obama renews push for gun control. "President Obama delivered a forceful and emotional plea to lawmakers Thursday to pass his gun-control agenda, saying “shame on us if we’ve forgotten” the elementary school massacre in Newtown, Conn. Frustrated by the slow pace of progress on Capitol Hill, Obama urged passage of universal background checks and other gun-control measures while flanked by mothers of shooting victims in the East Room of the White House. He also repeatedly invoked the Dec. 14 shooting at Sandy Hook Elementary School as a cause for action." Philip Rucker in The Washington Post.

Read: A full written transcript of Obama's speech. Politico.

Watch: A tape of Obama's speechThe New York Times.

The President's appeal on guns was moral. "President Obama made an emotional appeal today for members of Congress to put aside political concerns when it comes to gun control and instead vote their consciences...While Obama did touch on the political end of the gun debate — he noted that expanded background checks are wildly popular with the public — the core of his case was an emotional one. That focus seems to be a tacit acknowledgment that Newtown changed the political dynamics surrounding guns less than many people thought it might in the immediate aftermath of the tragedy." Chris Cillizza in The Washington Post.

New ads feature families of Newtown victims. "A new ad from the pro-gun control group Mayors Against Illegal Guns features family members of the people killed at Sandy Hook Elementary in Newtown, Conn. The 60-second and 90-second ads will run in Connecticut in the Hartford media market as that state’s legislature considers new gun laws." Aaron Blake in The Washington Post.

Watch: The short version of the ad "Newtown."

Sen. Grassley is working on a rivaling gun-control bill. "[A spokesperson] said the new legislation is still in the works and wouldn’t comment on what it might entail. Grassley, in the past, has supported a bipartisan measure cracking down on straw purchasing and illegal trafficking of firearms and legislation meant to increase safety in schools. A Republican-sponsored bill would also likely focus on measures aimed at keeping guns out of the hands of the mentally ill...Grassley and a majority of Republicans also oppose any ban on assault weapons and limits on high-capacity magazines. They argue the record keeping needed to implement universal background checks is a deal breaker because it amounts to a federal registry." Jonathan Easley in The Hill.

Sen. Rubio joins group threatening to filibuster gun control. "Earlier this week, GOP Sens. Rand Paul (Ky.), Mike Lee (Utah), and Ted Cruz (Texas) wrote a letter to Senate Majority Leader Harry Reid (D-Nev.) pledging to “oppose the motion to proceed to any legislation that will serve as a vehicle for any additional gun restrictions.”" Jonathan Easley in The Hill.

The Internet is for artists interlude: onesurrealistaday.com.

3) Growth in economy, pain in incomes

The economy grew 0.4 percent in the fourth quarter of 2012. "Although the increase marks a relatively weak performance, it was better than the most recent estimate of 0.1% growth. Business spending, particularly on construction, was the primary reason behind the higher estimate of fourth-quarter gross domestic product, the broadest measure of all goods and services produced in the economy. Fixed business investments rose 13.2% during the fourth quarter and much of that was concentrated in building power and communication infrastructure." Sarah Portlock and Eric Morath in The Wall Street Journal.

Median income is down 7.3 percent since the start of the recession. "For the first time in over a year, median annual income fell by a statistically significant amount from the previous month, according to a report from Sentier Research. Median annual household income in February 2013 was $51,404, about 1.1 percent (or $590) lower than the January 2013 level of $51,994. The numbers are all pretax, and are adjusted for both inflation and seasonal changes." Catherine Rampell in The New York Times.

...And is that income drop a threat to consumer spending and the recovery? "On Friday, investors will finally get a clearer snapshot with the Commerce Department's monthly report for February...Economists polled by Dow Jones Newswires see personal-consumption expenditures having increased by 0.6% in February. That would be a big improvement over January's 0.2%...Over the past five years, real per capita disposable income has shrunk by 0.4% at an annualized pace—the worst such reading since this data series began in 1964. The average during this period has been a 2.2% annualized increase." Spencer Jakab in The Wall Street Journal.

S&P 500 closes at record nominal high. "The S&P 500, a bellwether for the US economy and professional investors, closed at a record high on Thursday, completing a strong recovery from the depths of the financial crisis...Since hitting an intraday low of 666.79 in March 2009, the S&P has rallied 135 per cent, boosted by aggressive monetary easing by the Federal Reserve and record US profits from the index’s 500 constituents." Michael Mackenzie in The Financial Times.

...So, what do strong stock markets say about monetary policy? "Investors nudged the broad, widely followed Standard & Poor's 500-stock index into record territory Thursday for the first time since 2007. The index is closely tracked by professional investors and its four-year recovery since 2009 reflects a growing belief that the Federal Reserve's continuing support for markets and the economy will overcome modest U.S. growth and lingering economic and political weakness in Europe." E.S. Browning in The Wall Street Journal.

It's a bad time to be an inflexible worker. But does that explain the weak labor market? "Various economists have gone to extensive efforts to ask whether this weak labor market is driven by not by an overall shortage of demand, but rather by something peculiar to the job market at this point in time...Economists at the Federal Reserve Bank of New York have a new piece up at their Liberty Street Economics blog that takes another whack at the idea that structural problems are behind the nation’s labor market woes. Rather than specific skills, could the unemployment problem be traced to some American workers ability to adapt to a workplace that requires creativity and flexibility?" Neil Irwin in The Washington Post.

Meet Jeb Hensarling, the head of the House financial services committee. "The new chairman of the House financial services committee wants to limit taxpayers' exposure to banking, insurance and mortgage lending by unwinding government control of institutions and programs the private sector depends on, from mortgage giants Fannie Mae and Freddie Mac to flood insurance. Banks and other large financial institutions are particularly concerned because Mr. Hensarling plans to push legislation that could require them to hold significantly more capital and establish new barriers between their federally insured deposits and other activities, including trading and investment banking." Patrick O'Connor in The Wall Street Journal.

The Jobs Act has fallen short. "Now, nearly a year after its enactment, major portions of the act are in limbo, and other parts have failed to measure up to the grandiose job-creation promises.The act underscores how difficult it can be for Washington to spur job creation, even when there’s strong bipartisan consensus on a plan...The measure is a grab bag of ideas cobbled together for greater impact. It allows private firms to raise money by advertising to the general public for the first time in decades, raise up to $1 million in capital from investors via the Internet, and temporarily skirt some of the federal disclosure and accounting rules as they go public." Dina ElBoghdady in The Washington Post.

70s interlude: The decade, from EPA photography.

4) Your health, and what the government has to do with it

Here comes a major Supreme Court case on drugs. "On Monday, the court took up a really important health policy case, one with billions of dollars riding on the verdict. The lawsuit centers on a practice known as “pay for delay,” where pharmaceutical companies essentially pay a settlement to a competitor to hold off on bringing a generic version of their drug onto the market...The FTC has argued in court that this pay for delay agreement, and others like it, violate anti-trust laws and increase consumers’ medical costs." Sarah Kliff in The Washington Post.

Interview: Harold Pollack on what 'This American Life' missed on disability insuranceBrad Plumer in The Washington Post.

Wonktalk: Does disability insurance need reform? Brad Plumer and Dylan Matthews in The Washington Post.

California to see big rises in premiums as a result of health law. "Premiums for California consumers who buy their own insurance could on average be sharply higher next year because of the new federal health law, but government subsidies will offset the impact for lower-income people, according to a new report. The report, written by actuarial consulting firm Milliman for Covered California, the agency created by the state government to set up its new health-insurance marketplace, is likely to draw close attention amid a broader debate over the law's effect on insurance rates. The report estimates that for currently insured people whose income is too high to qualify for subsidies, premiums could go up on average 30% next year." Anna Wilde Matthews in The Wall Street Journal.

Want to buy private coverage with Medicaid dollars? Good luck. "Tennessee wanted to pursue a plan like that of Arkansas, one where it would use the Medicaid expansion dollars to buy private insurance coverage. And while Arkansas received a preliminary go-ahead from HHS, Gov. Bill Haslam had a quite different experience: He says that Health and Human Services would not support his plan to expand Medicaid and, as a result, he will not move forward...But some of the other points in the Tennessee proposal might have raised eyebrows in the Hubert Humphrey Building...[T]he governor wanted Medicaid beneficiaries to pay the same cost-sharing as other exchange enrollees. Medicaid experts I’ve spoken with have made it clear that such an approach wouldn’t fly: Even if they receive private coverage, the Medicaid agency would need to ensure they aren’t spending more out of pocket than they would in the public plan." Sarah Kliff in The Washington Post.

Interview: Mark Kleiman on why we need to solve our alcohol problem to solve our crime problemDylan Matthews in The Washington Post.

Maps: The landscape of abortion restrictionsSarah Kliff in The Washington Post.

Congress lines up in opposition to Medicare Advantage cuts. "The federal Medicare agency on Thursday met more bipartisan resistance to its proposed cuts in Medicare Advantage payments. Lawmakers have written to the agency in droves to protest the cuts — a 2.2 percent reduction in next year's payments, on top of cuts included in President Obama's healthcare law that have not yet taken effect...The agency's current interpretation is well within its legal authority, the CRS said, but the agency could probably also justify changing its mind." Sam Baker in The Hill.

The link you're going to send to everyone right now interlude: The Twitter tongues of New York City.

5) Feds moving towards green, as states walk away

Meanwhile, the Obama administration is moving forward with policies to clean gasoline. "The Environmental Protection Agency will move ahead Friday with a rule requiring cleaner gasoline and lower-pollution vehicles nationwide, amounting to one of President Obama’s most significant air pollution initiatives, according to people briefed on the decision. The proposed standards would add less than a penny a gallon to the cost of gasoline while delivering an environmental benefit akin to taking 33 million cars off the road...[They] would reduce the amount of sulfur in U.S. gasoline by two-thirds and impose fleet-wide pollution limits on new vehicles by 2017." Juliet Eilperin in The Washington Post.

States look to end their renewable-energy mandates. "Legislatures in half the states that require electric utilities to buy renewable energy are considering proposals to roll back those mandates. The policies have helped fuel a huge expansion of U.S. solar and wind capacity in recent years. Now debates are arising, especially in Republican-held statehouses, about whether they increase costs for customers. There is no federal rule requiring utilities to purchase renewable energy, but mandates require it in 29 states. This year, legislators in at least 14 of those states have introduced bills that would water down or repeal renewable-energy mandates" Ryan Tracy in The Wall Street Journal.

Sen. Whitehouse is heartened by show of support for carbon tax. "Sen. Sheldon Whitehouse (D-R.I.) sees a glass half-full in last week’s symbolic Senate referendum on taxing industrial carbon emissions to fight climate change. The liberal Democrat’s pro-carbon tax amendment to a nonbinding budget plan failed with 41 votes, showing that proposals to impose a price on greenhouse gas emissions lack political traction." Ben German in The Hill.

House GOP energy plan: Drill more, mine more. "Scalise and the subcommittee’s chairman, Rep. Ed Whitfield (R-Ky.), said their top priorities included immediate approval of the Keystone XL pipeline extension; increasing oil and gas drilling on federal lands; reforming federal rules to make it easier to export oil and gas; and forcing federal agencies to take the full costs of their actions into account when adopting regulations." Juliet Eilperin in The Washington Post.

Report finds some wind energy programs duplicative. "Most of the 82 federal programs designed to support wind energy had “overlapping characteristics,” and several “provided some duplicative financial support,” according to a Government Accountability Office report released Thursday. The report said the initiatives amounted to $2.9 billion of obligated expenses and at least $1.1 billion of subsides for wind power in 2011. Most of those subsidies financed construction and use of turbines, the report said. The efforts spanned nine agencies, including the Energy (DOE), Interior, Agriculture (USDA), Commerce and Treasury departments." Zack Colman in The Hill.

...But is the sky the limit for wind power? "Several scientists now say it's actually possible to have so many turbines that they start to lose power. They steal each other's wind...Harvard physicist David Keith says that's possible..."If we're going to scale wind power up to supply a significant fraction of the global energy demand — say 10 percent of global energy demand as we get towards midcentury — then these effects begin to matter," he says...The answer has become a kind of puzzle for atmospheric scientists. Just what, they ask, is the "saturation point" for wind power? That is, when is the wind so dirty that there's no point in building one more turbine?" Christopher Joyce in NPR.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Lots of interesting interviews: Dylan Matthews talks with Mark Kleiman, Brad Plumer with Harold Pollack, and Ezra Klein with Chana Joffe-Walt.

Why Ark. got cleared, and Tenn. didn't, to use Medicaid dollars to buy private insurance. Sarah Kliff.

The landscape of abortion restrictions, in one must-see mapSarah Kliff.

Wonktalk: Does disability insurance need reformBrad Plumer and Dylan Matthews.

The scariest chart on European economiesBrad Plumer.

Does worker inflexibility explain the weak job market? Neil Irwin.

Money, drugs and the Supreme Court: The multi-billion dollar case you haven’t heard ofSarah Kliff.

Et Cetera

Looking for a fun weekend longread? Meet the I.P.O. man, who sold his fate to investors for $1 per shareJoshua Davis in Wired.

Obama order establishes bipartisan voting commissionPeter Baker in The New York Times.

2020 census to be done onlineCarol Morello in The Washington Post.

Poll: 43 percent back a path to citizenshipKevin Robillard in Politico.

Dispute over guest-worker program puts immigration talks at risk of delayDavid Nakamura in The Washington Post.

Sen. Lisa Murkowski says her views on gay marriage are "evolving." Rachel Weiner in The Washington Post.

Retirements contributing to largest Senate turnover in decadesMicah Cohen in The New York Times.

Defense Dept. reduces furlough days from 22 to 14Lisa Rein in The Washington Post.

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

Wonkbook is produced with help from Michelle Williams.