Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. To subscribe by e-mail, click here. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.
Wonkbook’s Number of the Day: 57 percent. That's the percentage of Obamacare exchange enrollees who were previously uninsured, an estimate much higher than other recent ones.
Wonkbook’s Chart of the Day: How much America loathes Congress, in one chart.
Wonkbook's Top 5 Stories: (1) The new House GOP leadership; (2) in the long-term unemployed, a two-pronged crisis; (3) tech-heavy legal news; (4) cracks in the political climate dam?; and (5) Obamacare and the uninsured.
1. Top story: How the new GOP leadership will affect key policy debates
No surprise: McCarthy and Scalise win. "House Republicans on Thursday overwhelmingly elected Rep. Kevin McCarthy to be majority leader and Rep. Steve Scalise to be majority whip, elevating a pair of lawmakers who promised a more open and conservative approach to running the chamber. But the new team will quickly have to confront some of the old challenges of trying to hold together a fractious GOP caucus going into the final stretch of legislation before the 2014 midterm elections. McCarthy, a congenial Californian aligned with his party’s business-friendly establishment, said he hoped to make the House GOP more effective....Scalise, a Louisianan who leads an increasingly populist caucus of conservatives, promised to hold the party true to its core principles." Paul Kane and Ed O'Keefe in The Washington Post.
Explainer: Why McCarthy and Scalise won. Bob Cusack in The Hill.
With November ahead, they must tack to right on key policy measures. "Boehner, McCarthy and Scalise will have to work hard to keep their conservative wing satisfied if they want to remain in their jobs. The new leadership team immediately faces a series of upcoming legislative deadlines, including replenishment of the Highway Trust Fund, which will run out of money for new highway construction projects by late August....Congress also must resolve disputes over annual spending bills needed to keep government agencies open past the Sept. 30 fiscal year-end....Immigration reform legislation is all but dead in the House." David Lawder in Reuters.
Explainer: What has changed in the GOP in the last nine days? Chris Cillizza in The Fix.
Immigration: It's probably still dead, but McCarthy's shown mixed feelings. "McCarthy has to walk a fine line on immigration. Even Bakersfield's Republican mayor and the local chamber have joined the calls for an immigration overhaul. But the last summer when the issue was the hottest here, local Tea Party groups were also running ads attacking him for being too soft....In that recent local interview, McCarthy quickly went on quickly to say that any immigration deal would come only after the border is secure." Kirk Siegler in NPR.
McCarthy is pragmatic, but likely to delegate in certain policy areas. "No one has ever accused Mr. McCarthy of being steeped in the fine details of policy, and Republicans say he is likely to delegate substantive policy matters to committee chairmen, which they may prefer. But the role of majority leader is also to adjudicate fights between committee chairmen over legislative turf, and being everyone’s best friend forever does not always help." Jennifer Steinhauer in The New York Times.
One of those areas of delegation: Export-Import Bank. That's bad news for the bank. "McCarthy (R-Calif.) said Wednesday he would defer to House Financial Services Committee Chairman Jeb Hensarling (R-Texas) on the Export-Import Bank if made majority leader. The commitment is a blow to the fate of the bank, which has served as a key point of contention between establishment Republicans and their more conservative counterparts. Hensarling has been a vocal advocate of killing the bank, which expires at the end of September, calling it 'crony capitalism.'" Peter Schroeder in The Hill.
One top priority for McCarthy: energy. "Two days before Mr. Cantor’s primary defeat, Mr. McCarthy said in an interview with the Wall Street Journal his top priority this upcoming session is to address energy issues. Chief among his targets, Mr. McCarthy has said, is the Obama administration’s decision to regulate greenhouse gases without congressional approval. Mr. McCarthy also plans to introduce legislation that would allow states to buy back federal land in their jurisdiction, which would spur greater energy development by bypassing federal regulations." Michelle Hackman in The Wall Street Journal.
Interview: McCarthy's views on energy/environmental policy. Amy Harder in The Wall Street Journal.
Why McCarthy would be bad for the EPA. "The Environmental Protection Agency is already facing a war on multiple fronts as it works to review its smog standards this year. Environmentalists have vowed to fight to get the standards as low as possible to get maximum health benefits, while industry groups have been lining up to fight what they say is the most costly environmental regulation to come out of the administration. And now Eric Cantor's upset loss has put one of the ozone rule's congressional critics — ... next Majority Leader Kevin McCarthy — in position to keep fighting it from the top." Jason Plautz in National Journal.
Oil refiners could be a big winner. "At least three refiners — Shell Oil Co., Phillips 66 and Valero Energy Corp. — have refineries in or near both the California and Louisiana districts the lawmakers represent....The refineries near their backyard are likely to help inform the way they view the renewable fuel standard, questions about crude exports and even taxes on the sector." Jennifer A. Dlouhy in the Houston Chronicle.
Wind power could be a big loser, despite its big presence in his district. "A source close to McCarthy told Greenwire he is not in favor of renewing the production tax credit, which expired at the end of last year. Extending the $23-per-megawatt-hour credit has been the top priority for wind, geothermal and other energy companies." Nick Juliano in Greenwire.
Why is Silicon Valley so high on McCarthy? "McCarthy preaches a tax-cut mantra tech loves, choosing Facebook in 2011 to decry the burden of over-regulation. He has reinforced a need for high-skilled foreign workers, backed surveillance reform legislation, promoted free trade and helped push through a patent bill last year that industry desired. But the Bakersfield native’s accessibility, more than his voting record, have drawn admiration from the tech industry." Jessica Meyers in Politico.
As whip, Scalise could be a unifying force but could also help push policy rightward. "The highly conservative and Tea Party-backed wing of the Republican party will for the first time have a real voice within the party’s leadership in the House. This might force John Boehner, the House speaker, and Mr McCarthy to take an even tougher line in negotiations with the White House than they have in the past on issues ranging from immigration to taxes and spending. But it might also prevent the sort of public infighting and open rifts that have defined House Republicans since they swept into power on the back of the Tea Party wave in 2010." James Politi in The Financial Times.
Still, not much to cheer about for the tea party. "The preferred Tea Party candidate, Marlin Stutzman of Illinois, appeared as though he would finish a distant third....Still, the establishment candidate, Peter Roskam of Illinois, didn’t win either. In the political taxonomy of Capitol Hill, Scalise is a curious figure....the fourth-most-conservative member of the House GOP caucus. He’s also chairman of the Republican Study Committee....But most Tea Party folks don’t view Scalise as one of their own because he’s been close to Boehner....If you’re a Republican House member who is...incredulous that Cantor’s defeat at the hands of the Tea Party hasn’t done more to further the cause, this is about the very least you could have hoped to get." Joshua Green in Bloomberg Businessweek.
Other political reads:
Public's faith in Congress hits a new historic low. Rebecca Riffkin in Gallup.
IRS to propose specific limits on nonprofits' political activities. Josh Hicks in The Washington Post.
A move to unite tea party, social conservatives. Beth Reinhard in The Wall Street Journal.
KRUGMAN: Let's not lose perspective on the VA scandal. "It’s a real scandal; some heads have already rolled, but there’s surely more to clean up. But the goings-on at Veterans Affairs shouldn’t cause us to lose sight of a much bigger scandal: the almost surreal inefficiency and injustice of the American health care system as a whole. And it’s important to understand that the Veterans Affairs scandal, while real, is being hyped out of proportion by people whose real goal is to block reform of the larger system." Paul Krugman in The New York Times.
WARSH AND DRUCKENMILLER: An asset-rich, income-poor economy. "The aggregate wealth of U.S. households...just hit a new high of $81.8 trillion. That's more than $26 trillion in wealth added since 2009. No wonder most on Wall Street applaud the Fed's unrelenting balance-sheet recovery strategy. It's great news for those households and businesses with large asset holdings, high risk tolerances and easy access to credit. Yet it provides little solace for families and small businesses that must rely on their income statements to pay the bills. About half of American households do not own any stocks and more than one-third don't own a residence. Never mind the retirees who are straining to make the most of their golden years on bond returns." Kevin Warsh and Stanley Druckenmiller in The Wall Street Journal.
MURDOCH: Immigration reform can't wait. "Like others who want comprehensive immigration reform, I worried that Mr. Cantor's loss would be misconstrued and make Congress reluctant to tackle this urgent need. That would be the wrong lesson and an undesirable national consequence of this single, local election result. People are looking for leadership — those who stand for something and offer a vision for how to take America forward and keep our nation economically competitive. One of the most immediate ways to revitalize our economy is by passing immigration reform." Rupert Murdoch in The Wall Street Journal.
THE ECONOMIST: Leviathan as capitalist. "The implication...is not so much that Mr Fukuyama was wrong about the market in 1989 but that he was premature. The development of state capitalism over subsequent years has undoubtedly been extraordinary. But there are good reasons for still hoping that it is a way-station to a more fully private economy, not a new form of capitalism. The best SOEs have demonstrated that they can thrive without the guiding hand of the state—and the worst have proved that, however many market disciplines you impose upon them, they will still find a way of turning state capitalism into its ugly sister, crony capitalism." Schumpeter in The Economist.
THERNSTROM: Why innovation does matter to climate policy. "What is lost in the caricature of a technology-first approach that we hear from Chait is that the concept does not mean all research and development, no demonstration or deployment. The idea of an innovation-first approach is rather to scale up research, development, and demonstration efforts, focusing first on institutional and regulatory reforms that would enhance our capabilities and building from there. This is not an excuse to do next-to-nothing on climate; it is a real path — perhaps the only one — to deep emissions reductions over time. There is plenty of room for common ground here, if people of good faith could only work together to explore it. " Samuel Thernstrom in National Review.
PENNINGTON: What will it take for us to care about the shooting epidemic? "The debate over gun policy in our country is caught in a deadly cycle. A mass shooting makes the news; we ask what law could have prevented it; we debate to a stalemate; then we move on to the 'next thing.'...We have to destroy this cycle. We don’t need one law or one regulation to reduce gun violence. We need a whole system of laws that work together to cut the obscene number of dead and wounded in half, and then in half again. One regulation is a single thread. We need many threads, woven together into a gun violence prevention safety net—one that catches thousands of moms and dads and kids before they fall through the gaping holes in our country’s gun safety policy." Doug Pennington in Politico Magazine.
'Game of Thrones' interlude: The Brady Bunch remix.
2. The long-term unemployment crisis is also a public health crisis.
Why Yellen won't give up on long-term jobless. "The biggest question about the economy today is whether the millions of people on the margins of the work force will rejoin it. Alan Krueger, former chair of the President's Council of Economic Advisers has found that the long-term unemployed rarely do — which would mean there isn't as much slack in the economy as we think, and inflation will pick up. But Fed researchers dispute this, and their own work shows that the short-term and long-term unemployed exert equal downward pressure on wages....Though Yellen admitted that 'it's conceivable there is some permanent damage' to the long-term unemployed, she was still optimistic that a faster recovery would pull more people back into the labor force. It's an empirically supported hope." Matt O'Brien in The Washington Post.
It's hard to get off your couch when you're unemployed. "That deep divide between those with jobs and those without them reveals itself not just in well-known statistics on hiring and income but in the day-to-day details of how people live their lives. The unemployed have higher rates of depression, obesity and suicide. In interviews, they frequently report that the social and emotional impacts of joblessness — isolation from friends, the loss of a daily routine, feelings of uselessness — can be as hard as the financial toll....Overall, the unemployed spent more time sleeping, watching television and taking classes than the employed, and less time eating out and going to parties. They spent about an hour and a half a day, on average, on activities related to finding a job, including career-related education." Ben Casselman in FiveThirtyEight.
ICYMI: Read our roundup of recent labor-related data. Puneet Kollipara in The Washington Post.
The health problems faced by the long-term unemployed. "Is it news to say that being unemployed for a long period is bad for your health?...For the long-term unemployed...there are higher rates of several dangerous health problems, which suggests that the unemployment crisis is also a public-health crisis. These numbers, released by Gallup on Wednesday, show that the longer someone is unemployed, the more likely they are to be obese or require treatment for high blood pressure....As Gallup notes, there are probably multiple factors at play here: Some unemployed people may do things that cause more health problems, but others may have existing health issues that make it harder for them to find or keep work." Mark Berman in The Washington Post.
Primary source: Obesity linked to long-term unemployment. Gallup.
One idea to help the long-term unemployed and boost social mobility: Moving people with vans. "Those vans could help relocate some of the more than 3 million Americans who have been out of work for more than six months to states with relatively low unemployment rates, such as Texas and North Dakota. Or the vans could transport entire families to places where low-income kids historically have a better chance of moving up the income ladder as they age. The concept of encouraging unemployed workers to move enjoys bipartisan support." Nancy Cook in National Journal.
Jobless-claims and factory data point to a strengthening economy. "The number of Americans filing new claims for jobless benefits fell last week and factory activity in the mid-Atlantic region accelerated in June, more evidence the economy was strengthening after a disastrous first quarter....Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week ended June 14, the Labor Department said on Thursday. The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 3,750 to 311,750, not far from a seven-year low touched in May." Lucia Mutikani in Reuters.
Leading economic indicators rise. "The index of U.S. leading indicators rose in May for the fourth straight month, showing the economy will gain momentum following a slowdown at the start of 2014. The Conference Board’s gauge, a measure of the outlook for the next three to six months, increased 0.5 percent after a 0.3 percent gain in April, the New York-based group said today." Michelle Jamrisko in Bloomberg.
Other economic reads:
Global economic danger from Iraq-related gas-price rise low for now. Meagan Clark in International Business Times.
We're all crony capitalists, whether we like it or not. Neil Irwin in The New York Times.
When minimum-wage laws count small franchisees as big businesses. Patrick Clark in Bloomberg Businessweek.
'Star Wars' interlude: The Battle of Hoth, the homemade remake.
3. A roundup of tech-heavy legal news
Supreme Court limits software patents. "A unanimous Supreme Court narrowed the reach of software patents Thursday. The Court ruled that simply involving a computer in an idea doesn't mean it's patentable. The justices tossed out several patents belonging to Alice, an Australian financial services company, and the ruling could invalidate other similar patents. But the Court didn't go as far as many patent critics had hoped, declining to strike down all software patents. Critics argue that a rise in litigation (especially over software patents) is suppressing innovation and limiting consumers' access to technology." Brendan Sasso in National Journal.
The court's fine line between IP and innovation concerns. "If the court had upheld the patent, the problem of proliferating patent lawsuits would continue unabated. The number of software patents granted annually has soared from about 2,000 in 1980 to more than 40,000. They account for nearly half of all patent lawsuits in recent years. If the court struck down a broad swath of patents, it could have rendered thousands of existing ones extinct and created havoc for some of the nation's leading business and software companies. Nearly 3 million Americans work for software and information technology companies, which generate more than $250 billion in annual revenue. So the court did neither of those things. Rather, it ruled narrowly and along the lines of its past precedents." Richard Wolf in USA Today.
Good news for tech companies, bad news for patent trolls. "The decision is based on precedent set in previous patent cases....In each case, the court ruled that companies can’t patent abstract ideas, and it held to that conviction with this ruling. That’s good news for a lot of tech companies, and bad news for patent trolls and other companies that are using similar patents to extract licensing fees from firms that create software applications touching on similarly abstract ideas. Aside from that, today’s ruling hasn’t changed much for companies that hold software patents. The court didn’t choose to invalidate all software patents, and declined to put in place new procedural rules that would make it easier for companies to defend against patent infringement allegations." Blair Hanley Frank in GeekWire.
Patent rulings' year of discontent in the high court. "Although the Supreme Court often takes cases in order to reverse lower court rulings, the rate of reversal of the Federal Circuit has prompted considerable debate within patent law circles. Some lawyers suggest it signals the Supreme Court has concerns over how the Federal Circuit is handling patent law, which is increasingly important to the economy due to the rise of the technology industry....The majority of this term's Supreme Court rulings delivered blows to so-called patent trolls, defined as companies that hold patents only for the purpose of suing firms seeking to develop new products. The software patent ruling was one of them....Now the question is whether the Supreme Court will go on taking as many patent cases." Lawrence Hurley in Reuters.
That Facebook threats case isn't really about Facebook. "Because Elonis’s writing occurred on Facebook, media coverage of the Supreme Court’s decision to take the case has described it as a matter of online speech, or, more specifically, Facebook threats, and whether they deserve First Amendment protection. 'Do threats on Facebook count?' asked MSNBC. According to Eugene Volokh, a UCLA law professor specializing in First Amendment and cyberlaw, however, that’s not really what’s at stake here....What’s at issue in the Elonis case is something broader: how to define what counts as a threat, whatever the medium." Drake Bennett in Bloomberg Businessweek.
The Aereo Supreme Court decision could upend the future of TV. "If Aereo wins...suddenly, broadcasters would have to worry about a flood of customers starting to watch live TV over the Internet. As we've seen in the publishing industry, the minute content moves online, advertising rates start to fall. And as TV networks' ad revenue craters, they wouldn't be able to make up the shortfall by charging Aereo retransmission fees. That's a double whammy....Meanwhile, the alliance of convenience between broadcasters and cable companies would start to crumble....Finally, a ruling for Aereo could prompt calls by the content industry to revise the Copyright Act." Brian Fung in The Washington Post.
While you weren't looking, the House voted to curb NSA surveillance powers. "Defying the Obama administration, a bipartisan veto-proof House majority voted to rein in NSA surveillance of Americans late Thursday. The 293-123 vote on the amendment...had majority support in both parties, although a number of leaders in both parties and chairmen opposed it....The amendment would prohibit the National Security Agency and the CIA from placing surveillance backdoors on commercial tech products and prohibit warrantless collection of Americans’ online data. Its future in the Senate is unclear, but it’s a sign the House believes a recently passed House bill to roll back the NSA doesn’t go far enough." Steven T. Dennis in Roll Call.
Explainer: What are 'backdoors' anyway? Timothy B. Lee in Vox.
Other tech reads:
Lawmakers push quick passage of anti-Web tax bill. Julian Hattem in The Hill.
How New York could put an end to Comcast's merger with Time Warner. Brian Fung in The Washington Post.
FCC finds Web speeds as advertised. Julian Hattem in The Hill.
Animals interlude: Look at how well-behaved these dogs are.
4. When might shifting public opinion push Congress on climate policy?
Four former GOP EPA administrators suggest dam about to break on climate policy. "The current Republican Party line casts skepticism on the science linking human activity to global warming and staunchly opposes legislative or administrative carbon caps. But in a roundtable with reporters, all four former officials reiterated the need for action on climate change, regardless of the political situation in Congress. And, citing an NBC News/Wall Street Journal poll that found 61 percent of Americans back action to combat climate change, they predicted the political dam would break....Whether the message from the retired administrators reaches the less politically shielded legislators remains to be seen." Jason Plautz in National Journal.
Nope, it's not reaching fellow Republicans not so far. "Four Republican former administrators of the Environmental Protection Agency had a message for the Senate on Wednesday on climate change: It's real, it's bad and the United States should do something about it. But their fellow Republicans at the hearing largely ignored that position, instead repeating a variety of arguments about why the U.S. should not address the greenhouse gas emissions causing the planet to warm up." Kate Sheppard in The Huffington Post.
A government shutdown looming over EPA climate rules? "If early Republican enthusiasm is any indication, the upcoming Sept. 30 deadline to keep the federal government open could turn into an all-out war over President Barack Obama's executive actions to combat climate change. As TPM reported earlier this week, senior House Republicans are considering using appropriations legislation to block the Environmental Protection Agency's new restrictions on coal-fired power plants, aimed at cutting climate-warming pollution by 30 percent by 2030. On Tuesday, numerous Senate Republicans expressed strong support for the idea." Sahil Kapur in Talking Points Memo.
Some Republicans are talking a bit differently about climate change. "These days, it takes careful parsing to pinpoint what Republican candidates believe about climate change....Certainly, base-wary Republicans haven't gone all-in yet. Their adjustment, however, is no accident: While the science itself is largely the same, the politics of its legitimacy has turned against Republicans in all but the reddest of states. It's a separate debate from the economic-focused one about the potential loss of jobs from the regulations — one Republicans are convinced they'll win — but it's nonetheless an issue rearing its head in the midterm elections." Alex Roarty in National Journal.
Chart: Summertime blues? The U.S. is seeing red on the temperature gauges. Climate Central.
Other energy/environmental reads:
The new oil crisis: Exploding trains. Kathryn A. Wolfe and Bob King in Politico.
Here's how the Keystone XL pipeline bill will likely die. Zack Colman in the Washington Examiner.
Science interlude: Watch a mountaintop get blown off in the name of deep space science.
5. How many uninsured are getting Obamacare? Maybe more than once thought?
Maybe most Obamacare enrollees were previously uninsured after all. "About six in 10 people who bought their own health insurance through Affordable Care Act exchanges were previously uninsured, according to a new survey providing one of the first comprehensive looks at the insurance landscape after the health care law's first open enrollment period. And although a large majority of people who purchased exchange coverage received financial help from the federal government to pay their premiums, affordability remains a major concern for people buying their own coverage, according to the Kaiser Family Foundation survey....The Kaiser findings contradict other surveys that found most people who bought exchange coverage already had insurance. " Jason Millman in The Washington Post.
Charts: Why will most Obamacare plans be more expensive? Adrianna McIntyre in Vox.
Cities in states expanding Medicaid could see big drops in the uninsured. "Expanding Medicaid under the new health care law would do a lot to slash the number of uninsured people, at least in some of the nation’s largest cities, according to a new report. A review of 14 diverse big cities finds that the cities in states that are expanding the low-income health care program under the Affordable Care Act will see roughly twice the decline in the number of insured compared to cities in states not opting for the expansion, according to an analysis by the Robert Wood Johnson Foundation and the Urban Institute. Three states are still debating whether to implement the expansion, while 21 have declined it, according to a count from last week by the Kaiser Family Foundation." Niraj Chokshi in The Washington Post.
Obamacare supporters seek to sign up more young people in special-enrollment period. "Young Invincibles, a non-profit group, said its effort is designed to educate millennials about the important life events that can qualify them for the marketplaces at any time. Transitions like graduating college, getting married, having a baby and moving can make people eligible for new health coverage under the Affordable Care Act....Special enrollment periods highlight one reason it is difficult to get a full snapshot of the exchanges' enrollment in their first year. People are constantly coming in and dropping out of the system based on their life circumstances." Elise Viebeck in The Hill.
Other health care reads:
Warnings on Obamacare website overlooked, GOP report says. Alex Wayne in Bloomberg.
Medical marijuana's strange political bedfellows. Lucia Graves in National Journal.
Up to 75 CDC scientists may have been exposed to anthrax. Sabrina Tavernise and Donald G. McNeil Jr. in The New York Times.
Food interlude: What is the best way to cut a cake?
Why stock markets keep shrugging off crisis after crisis. Rebecca Robbins.
Why a guy making $100,000 a year can’t get a bank account. Danielle Douglas.
What America’s changing bread preferences say about its politics. Roberto A. Ferdman.
Most Obamacare exchange enrollees were previously uninsured, survey finds. Jason Millman.
Janet Yellen isn’t giving up on the long-term unemployed. Matt O'Brien.
This is what happens when a campaign finance scholar runs for governor. Max Ehrenfreund.
It’s time to declare QE3 effectively over. Ylan Q. Mui.
New proposal would make same-sex partners eligible under Family and Medical Leave Act. Juliet Eilperin in The Washington Post.
Detroit pension fix could serve as model for other cities struggling with public-worker retirement. Angelo Young in International Business Times.
Field test of Common Core exams went well, officials say. Lyndsey Layton in The Washington Post.
House Ways and Means Committee subpoenaed in insider-trading case. Matt Apuzzo in The New York Times.
Long read: How Credit Suisse got off easy. Lynnley Browning in Newsweek.
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