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We're going to spend a fair amount of time covering the war of words and commercials and campaign events over Obamacare as we get closer to the law's October 1st launch date. But to put a marker down, almost nothing anybody says about this law between now and then matters. Really.
That's been true for years now. Look at this graph of the Kaiser Family Foundation's health-care tracking poll. Really study it. Opinions on Obamacare have been basically stable since 2010. That's been true despite all the rhetoric and all the elections and all the Supreme Court decisions and all the ads. The law has been slightly unpopular for three years. There's never been a sustained period in which it became popular, or very unpopular.
The most notable trend on that graph, in fact, is that over the last six months or so, both the "favorable" and "unfavorable" numbers have fallen and "don't know/refused" has risen. So that's been the main outcome of this war for public opinion: A slightly larger proportion of the country is confused about the Affordable Care Act. Congrats, spinmeisters.
This speaks to a broader truth about political rhetoric: The things people in Washington say always have less influence than people in Washington think. It's true when presidents are talking. It's true during national campaigns. And it's even truer for the continuing, bitter war over the health-care law, which everyone but real obsessives has tuned out.
And even if that wasn't true -- even if the communications campaign mattered more in moving public opinion -- it still wouldn't really matter. Jonathan Bernstein puts it well: "The Affordable Care Act isn’t going to be put up for a referendum. To the extent it matters to voters — and very few people will ever vote on just one issue, health care included — there’s no election where Obamacare could make a difference for over a year."
He puts this well, too: "The best argument for the Affordable Care Act will be successful implementation. And the best argument against it will be if a train wreck really happens."
The Affordable Care Act has until the end of 2014 to prove itself or really, truly fail before either outcome can have a serious electoral impact. It has until 2017 before it faces even the slightest chance of repeal, or even real revision. The political communications campaigns both parties will launch between now and then are just people in Washington keeping busy.
The one exception to this is if Republicans really do decide to shut down the government if the Obama administration won't defund Obamacare. But even given how self-destructive the party has been in recent years, I simply don't believe they're that self-destructive. I mean, Marco Rubio can't possibly believe what he's saying here will fly -- can he?
Wonkbook's Number of the Day: 1 percent. That's a consensus estimate for GDP growth in the second quarter. That's slow -- no matter how you look at it. We'll have the data on Wednesday.
Wonkblog's Graph of the Day: Median forecast for quarterly annualized growth in GDP.
Wonkbook's Top 5 Stories: 1) underwhelmed by economic growth; 2) and economic policy is stuck in the molasses, too; 3) Obamacare in Mississippi; 4) small-bore immigration refom; and 5) Senate confirms Comey, lines up ATF director.
1) Top story: More slow growth ahead?
Economic slowdown is expected but is seen as fleeting. "Experts estimate that the economy grew at an annual rate of under 1 percent in the second quarter, half the already tepid pace of growth in the first quarter of 2013. Much of that weakness stems from the tax increases and automatic cuts in government spending that went into effect earlier this year, headwinds that should gradually ease in the quarters to come unless Washington makes things worse...“We could be anywhere from minus 0.5 percent to plus 1.5 percent,” he said. “I wouldn’t be surprised if we saw a negative number.”" Nelson D. Schwartz in The New York Times.
Debate: Who should lead the Fed? The New York Times.
City governments begin hiring again. "Monthly jobs data from the Labor Department show local governments, which make up about 65% of the overall government workforce, added workers in seven of the past eight months, the longest such streak in five years. So far this year, 46,000 new jobs have been created on a seasonally adjusted basis. Local-government employment through June stood at 14.08 million, the highest level in more than a year and a half, though still well below a peak of 14.61 million in mid-2008...In local governments, rebounding tax revenue, voter-approved tax hikes in some communities and a recovery in the broader U.S. economy are fueling hiring." Mark Peters and Stephanie Banchero in The Wall Street Journal.
Lurch in mortgage rates affects pending home sales. "The National Association of Realtors said Monday that its index of pending home sales fell 0.4% in June from a month earlier to a reading of 110.9. The pace of sales was still strong, with the slight drop coming after pending sales reached a six-year high in May. Pending sales in June were 10.9% higher from a year ago. However, the Realtors group said the June drop was likely a sign a rise in mortgage rates from May is starting to scare away some prospective buyers. The group said some people appeared to pull out of contracts for homes after rates rose sharply form when they initially signed." Josh Mitchell in The Wall Street Journal.
US says JPMorgan manipulated energy prices. "The U.S. Federal Energy Regulatory Commission (FERC) staff has found "eight manipulative bidding strategies" used by a JPM affiliate in 2010 and 2011, the regulator said." Reuters.
Bernanke must testify on AIG. "The deposition, scheduled for Aug. 16, will be part of a lawsuit brought by a company run by former AIG Chief Executive Maurice "Hank" Greenberg that alleges the huge rescue package had elements that were unconstitutional. Mr. Bernanke's sworn testimony will mark a break from past precedent and a coda to his tenure, which is expected to wind up at the end of January, when his current term as Fed chairman expires. It is highly unusual for sitting top regulators to be compelled to testify in a private lawsuit." Leslie Scism in The Wall Street Journal.
Yellen vs. Summers -- who'd be the tougher regulator? "Regulatory reform is likely to continue on its current path if Janet Yellen, the Federal Reserve Board's vice chairman, is tapped to lead the central bank. The future is decidedly murkier if Larry Summers wins the post." Donna Borak in American Banker.
@JimPethokoukis: JPMorgan's Feroli weighs on Summers vs. Yellen: "With either candidate the risk of a large policy mistake is quite low, in our view"
THE NEW YORK TIMES: We endorse Janet Yellen for Fed chair. "[N]o one else can match Janet Yellen’s combination of academic credentials and policy-making experience. And no one ever confirmed to the job has come to it with as deep a grounding in both the theory and practice of monetary and regulatory policy as Ms. Yellen would bring." The New York Times Editorial Board.
@ObsoleteDogma: The case for Yellen is simple. The zero bound is likely to with us now & whenever the next recession hits.
TAYLOR: Rules-based monetary policy, Summers, and Yellen. "Yellen rationalizes the departure from rules-based policy, she at least wants to get back to rules-based policy in normal times, largely because that will help, in her view, maintain greater macroeconomic stability...Summers rationalizes the recent discretionary deviations from rules-based policy as due to special factors, but his words reveal less willingness to endorse a rules-based policy strategy, even in normal times, with a preference that government officials should simply “act more wisely” in their discretionary interventions." John B. Taylor on his blog.
KONCZAL: Beyond Bernanke. "Monetary intervention is one of the more complex areas of public policy, but a simple children’s story can summarise what awaits the next chair. They will need to answer the important Goldilocks question: was Mr Bernanke’s response to the Great Recession too hot, too cold or just right?...Mr Bernanke was reacting to the worst macroeconomic crisis in 70 years. Whoever comes next will be required to help the Fed internalise and act on what it has learnt from the Great Recession. That lesson has to be that policy was too tight – and only a dramatic shift can prevent the next crisis." Mike Konczal in The Financial Times.
DAVIDSON: What's an idea worth? " Measuring productivity is central to economic policy — it’s especially crucial in the decisions made by the Federal Reserve — but we are increasingly flying blind. It’s relatively easy to figure out if steel companies can make a ton of steel more efficiently than in the past (they can, by a lot), but we have no idea how to measure the financial value of ideas and the people who come up with them." Adam Davidson in The New York Times.
Music recommendations interlude: Susie Suh, "All I Want," 2006.
EMANUEL: Don't give up on healthcare cost control. "Repealing the S.G.R. is the best leverage the government has with the country’s doctors. Physicians seem otherwise not strongly inclined to adopt payment reform or modernize the health care delivery system. But we can give doctors what they want — the end of the S.G.R. — and restrain spending at the same time. We should link the repeal of the law to a timeline that moves Medicare off the inflationary fee-for-service payment system, which is the reason we need a formula to limit spending in the first place." Ezekiel J. Emanuel in The New York Times.
BARR: Keep financial regulation out of US-EU trade talks. "The United States and the European Union have embarked on a new round of trade talks, which holds out the promise of deepening the two sides’ already robust economic relationship. But the talks should not be used to weaken US financial reforms that are just taking root...[T]he financial industry is pushing the talks as a way to overturn the pesky – and highly effective – rules being implemented in the US under the Dodd-Frank Act." Michael S. Barr in Project Syndicate.
PEARLSTEIN: Don Draper, your antitrust lawyer is on line 2. "What has emerged more recently, with mergers like Omnicom and Publicis, is something of a corollary, the “failing business model defense.” The thrust of this argument is that otherwise unacceptable levels of concentration should be allowed as new technology and new business models effectively redefine the boundaries of the “relevant market.” In the case of Omnicom and Publicis, you can be sure that $1,000-an-hour antitrust partners in New York and Washington are already working hard to flush out this concept with the help of high-priced economists in Cambridge, Princeton and Palo Alto." Steven Pearlstein in The Washington Post.
WEIGEL: How Sen. Ted Cruz accidentally saved Social Security from cuts. "The last few times the deal-makers got here, they were undone by conservatives who didn’t want to bend on taxes. Things change: The austerity crowd may be undone, one more time, by conservatives who view the coming vote to fund the government—deadline Sept. 30—as the “last chance” to defund the Affordable Care Act...So the threat to Obamacare doesn’t actually scare the left. To them, it feels like the demands conservatives have made on taxes in every round of the Debt Wars. Their refusal to raise taxes, even on Social Security, has effectively checkmated the administration on its entitlement plans. The shrinking deficit has made it easier for progressives to defend entitlements as they are." David Weigel in Slate.
GERSON: The Republicans' divide on immigration. "[King] is the GOP challenge in miniature: how to appeal to an increasingly diverse nation when the behavior of a small but vocal portion of its coalition is both offensive and clueless...The congressman has confronted Republicans with a question in its starkest form: Is this a party that trades in stereotypes to feed public resentment of outsiders?...Only a party that generally regards human beings as sources of ambition, enterprise and future wealth will be a source of inspiration to the whole country." Michael Gerson in The Washington Post.
Futuristic interlude: Newt Gingrich hangs out with a parrot, records it on Google Glass.
2) Policy stuck in molasses, too
Obama economic proposals face long odds in Congress. "President Barack Obama's program for boosting the middle class, which he is laying out in a series of speeches through September, faces long odds in a Congress that showed little interest when he proposed similar ideas earlier this year. In addresses that continue Tuesday with an appearance in Tennessee, Mr. Obama says he will put forward new ideas on boosting the economy, but he is also returning to proposals he first advanced in his State of the Union address in February." Corey Boles in The Wall Street Journal.
So is a grand bargain (still) out of reach? "White House chief of staff Denis McDonough has met frequently with Republican senators in the hopes of finding consensus on an overarching fiscal deal. But the two sides are stuck in the same-old tax-and-spending debate — Democrats want to raise revenue, while Republicans refuse. The lack of progress underscores a growing belief in Washington: The long-sought grand bargain could very well be out of reach during the Obama presidency." Manu Raju and John Bresnahan in Politico.
At the 11th hour, a languid Congress. "The last week before the August recess is usually full of late nights, last-minute deal-making and achievements to take home to constituents. This week, the House will not even show up until Tuesday evening. The most pressing business is student loans. Congress is likely to give final approval to legislation that ties student loan interest rates to the market-set rate of Treasury bonds, lowering interest rates at least in the short term." Jonathan Weisman in The New York Times.
In mourning interlude: NPR's Scott Simon tweeted the loss of his mother.
3) Obamacare in Mississippi
Even Mississippi may go in on Obamacare. "After suffering through a high-profile intraparty squabble with the governor and averting a near disaster for the state’s insurance marketplace, Mississippi Insurance Commissioner Mike Chaney is giving another go at running an Obamacare exchange. This time, the Republican commissioner is looking to run just the state’s exchange for small businesses while letting the feds oversee the new insurance marketplace for individuals — an option the Department of Health and Human Services only recently made available to states reluctant to do the entire lift." Jason Millman in Politico.
Obamacare Spin 101: How to make premiums seem really cheap – or insanely expensive. "The two headlines have completely different connotations. One makes it seem like Marylanders are getting a great deal under Obamacare, and the other makes the law seem like a pretty lousy deal. And they’re both based on the exact same facts. It’s true that Maryland’s premiums are lower than the rest of the country’s, and that one carrier was allowed a 25 percent increase. Does one headline better capture the experience that Marylanders will have in 2014, whether they’ll actually feel like they’re getting a great or lousy deal?" Sarah Kliff in The Washington Post.
N.C. Gov. McCrory signs anti-abortion bill into law. "North Carolina Gov. Pat McCrory (R) signed legislation limiting abortion access into law Monday night, as abortion rights protesters waged a 12-hour vigil across the street from his executive mansion. In a statement, McCrory said critics were exaggerating the impact of the law, which will make abortion clinics adopt some of the regulations that apply to ambulatory surgery centers, require pregnant women to take an initial dose of abortion medication under a doctor’s supervision in a clinic, allows health-care providers to opt out of performing abortions if they object, eliminates abortion insurance coverage for city and county employees and bars state residents from paying for the coverage through state health exchange plans." Juliet Eilperin in The Washington Post.
Undersea interlude: Sharks in their non-tornadic natural state.
4) Immigration reform goes small-bore
A narrow border-security agreement could pave the way for broad immigration reform. "In mid-May, as most of Congress was consumed with the troubles at the Internal Revenue Service and the Senate was conducting closely watched hearings on a sprawling, contentious immigration reform bill, something remarkable happened in the House Homeland Security Committee. With little fanfare, the committee unanimously passed a border-security plan as part of its immigration reform effort...The committee vote was the most hopeful sign to emerge from the House that some kind of immigration deal with the Senate is possible." Ed O'Keefe in The Washington Post.
Menu for House Republicans: Immigration reform à la carte? "The House is still fumbling around on how its members will tackle immigration reform. But two key House committees have at least laid out a menu of some options for the full chamber to consider when it begins voting on immigration bills this fall. Reflecting GOP wishes for a piecemeal strategy, each bill passed one at a time and, except for one, no Democrats voted in favor of them." Seung Min Kim in Politico.
White House ties immigration reform to farms. "An immigration overhaul of the kind supported by President Obama would help ensure a stable, predictable work force for the nation’s agricultural industries, a new report released by the White House argues. The 20-page document is the latest effort by Mr. Obama’s administration to try to document what it says are the benefits of providing a pathway to citizenship for the approximately 11 million illegal immigrants, some of whom toil in the fields across the country." Michael D. Shear in The New York Times.
Read: The report.
House GOP shrugs off immigration pressure from Latinos. "When Democratic U.S. Rep. Ed Pastor tries to persuade Republican colleagues to back comprehensive immigration reform, he says the responses are predictable. Many confide they'd like to support it, but given that a majority of GOP House members represent white districts, they lack a large Hispanic constituency clamoring for change. If they were to support reform, they fear, a primary challenger would use it as a club...The simple political math is that while Republicans on a national scale want to court Latinos, members of the House GOP represent few of those Latino voters." Rebekah L. Sanders in The Arizona Republic.
Your world interlude: Falling 150,000 feet.
5) First the FBI, now the ATF?
Senate confirms James Comey to head FBI. "The Senate confirmed James Comey to head up the FBI with an 93-1 vote Monday. Sen. Rand Paul (R-Ky.) – the only senator who voted nay – lifted his hold on the nominee to succeed FBI Director Robert Mueller late Monday afternoon, minutes before the vote, after receiving more information from the agency on the domestic drone program...Democratic Sens. Ron Wyden and Jeff Merkley of Oregon, longtime critics of surveillance on Americans, voted present." Priya Anand in Politico.
Senate vote likely this week on ATF pick. "Senate Majority Leader Harry Reid launched another confirmation effort this week over President Barack Obama’s nominee to be ATF director – with what looks like an unlikely assist from the National Rifle Association. Reid filed for cloture on the nomination of B. Todd Jones to lead the Bureau of Alcohol, Tobacco, Firearms and Explosives as soon as Monday, which would prompt a Wednesday cloture vote for the Minnesotan. The NRA has told people involved in the confirmation effort that it will remain neutral on the Jones nomination, sources said Monday, allowing Democrats from gun-friendly states and Republicans to vote for Jones without hurting their standing with the gun rights organization." Reid J. Epstein in Politico.
Reading material interlude: The best sentences Wonkblog read today.
In defense of Congress’s summer ‘vacation.’ Ezra Klein.
Don Draper, your antitrust attorney is on line 2. Steven Pearlstein.
Obama says the Voting Rights Act isn't dead. Jackie Calmes in The New York Times.
State Dept.: Keystone XL jobs impact 'negligible.' Zack Colman in The Hill.
House Republicans reveal new IRS targeting ‘allegations.’ Josh Hicks in The Washington Post.
Wonkbook is produced with help from Michelle Williams.