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: 51.2 million. That's the number of people living under forced displacement worldwide, the first time the number has topped 50 million since World War II.
Wonkbook’s Chart of the Day: The jobs where you could be making more money, in one chart.
Wonkbook's Top 5 Stories: (1) The U.S. plan to stem the border crisis; (2) election-year child care efforts; (3) drug news roundup; (4) a new round of financial regulations; and (5) what's next for NSA and software patents.
1. Top story: The administration's plan to address the child-migrant crisis
A flawed, overburdened immigration legal system means few immediate consequences. "Thousands of immigrant children fleeing poverty and violence in Central America to cross alone into the United States can live in American cities, attend public schools and possibly work here for years without consequences. The chief reasons are an overburdened, deeply flawed system of immigration courts and a 2002 law intended to protect children's welfare....Driving the dramatic increases in these immigrants is the recognition throughout Honduras, Guatemala and El Salvador that children who make the dangerous trip can effectively remain in the U.S. for years before facing even a moderate risk of deportation." Alicia A. Caldwell in the Associated Press.
Here's what the administration is doing. "The steps, aimed at those entering from Mexico, include adding more immigration judges to process a backlog of asylum claims and to more quickly deport adults whose cases are rejected. New detention facilities are also being opened for families awaiting hearings, and ankle monitoring bracelets will be used to keep tabs on them, officials said. The moves mark a recognition by the administration that the unexpected influx of tens of thousands of immigrant children has become a serious humanitarian and political crisis. Since October, 52,000 unaccompanied minors and 39,000 adults with children have been apprehended along the Mexican border — a much higher proportion than normal." David Nakamura in The Washington Post.
Additional funding is going toward repatriating migrating youths. "Officials further announced $9.6 million in additional support to El Salvador, Guatemala and Honduras to help them receive and reintegrate people who are sent back. In an effort to address the causes of flight from Central America, the administration said it would launch a $40 million program to improve security in Guatemala and a $25 million program to provide services to youth in El Salvador who are vulnerable to organized crime." Mark Felsenthal in Reuters.
One side effect of the crisis: Easier drug smuggling by cartels. "The arrival of large groups of women and children on the U.S. side of the Rio Grande is pulling agents away from their patrol stations elsewhere along the border, creating gaps in coverage that the traffickers can exploit, according to Chris Cabrera, the Border Patrol union representative here. The smugglers wait on the southern banks of the Rio Grande as migrant groups as large as 250 wade across at dusk and turn themselves in to the Border Patrol, he said. Then groups of single men proceed to cross under cover of darkness....The most recent statistics...show that narcotics seizures have fallen across the entire border with Mexico this year, with the drop being larger in Texas than the average." Joshua Partlow and Nick Miroff in The Washington Post.
How the crisis is changing the immigration debate. "In recent weeks, Democrats have pointed to images of the children sleeping in crowded holding rooms to emphasize the humanitarian costs of border policies that have left millions of undocumented immigrants in legal limbo. Republicans, meanwhile, have cited the crisis as evidence that President Obama must drastically bolster border security to deter future waves of migrants from crossing illegally. The patrol agents have lent weight to the GOP argument, warning in congressional hearings and on cable news shows that resources to combat drug and weapons trafficking have been diverted to handling the immigrant children. Judd told a House panel that the crisis is straining the border patrol 'to the breaking point.'" David Nakamura in The Washington Post.
Children wouldn't qualify for legalization under proposed reforms. "Vice President Joe Biden flew to Guatemala today to meet with the presidents of Guatemala and El Salvador on the issue. During the flight, he discussed the matter by phone with Honduran President Juan Orlando Hernandez, according to a statement issued by Biden’s office. Biden is using the trip to stress to the Central American public that newly arriving migrants won’t qualify for legalization under proposed U.S. immigration legislation, according to Ricardo Zuniga, a senior director on the White House National Security Council. The vice president is making clear that they won’t qualify for Obama’s executive order deferring deportation of undocumented immigrants who arrived as minors, Zuniga said." Mike Dorning in Bloomberg.
The "warehouse of humanity" where children are processed. "The scene looks like a warehouse of humanity. And that's exactly what it is....The children...sit in fenced off areas or lie on mattresses placed on up against the other with a look of intense boredom on their faces. They are divided in holding areas by age and gender....Border Patrol isn't the only government agency on site. The Federal Emergency Management Agency now is running the entire operation....But as sad as it is, the children are clothed and fed. They are clean. and the federal Public Health Service is on site conducting medical examinations and giving vaccinations....Officials are doing their best to accommodate dietary needs....Once every other day, the children here get to go outside for recreation." Michael Kiefer in The Arizona Republic.
Other immigration reads:
Border agency's watchdog under investigation for coverup. Marisa Taylor and Franco Ordoñez in McClatchy Newspapers.
DOUTHAT: Immigration reform: An open invitation to children? "If comprehensive reform has been cast as a no-brainer, the Dream Act has been portrayed as a test of basic moral fitness: To oppose welcoming these young men and women is to oppose all that’s decent, humanitarian and just. Now we’re getting a lesson in why reality is never quite so black and white. Over the last two years, a crisis has developed on our Southern border: a children’s migration of increasing scale, in which thousands of unaccompanied minors from Central America have made the dangerous journey to the U.S.-Mexico border, many apparently motivated by the belief that some sort of legal status awaits them. The numbers are striking, and so is the timing." Ross Douthat in The New York Times.
PAULSON: Financial-crisis lessons for climate change. "For too many years, we failed to rein in the excesses building up in the nation’s financial markets. When the credit bubble burst in 2008, the damage was devastating. Millions suffered. Many still do. We’re making the same mistake today with climate change....I feel as if I’m watching as we fly in slow motion on a collision course toward a giant mountain. We can see the crash coming, and yet we’re sitting on our hands rather than altering course....The solution can be a fundamentally conservative one that will empower the marketplace to find the most efficient response. We can do this by putting a price on emissions of carbon dioxide — a carbon tax." Henry M. Paulson Jr. in The New York Times.
BLINDER: 'Pikettymania' and inequality in the U.S. "But if there is to be a national debate on what to do about inequality in the United States, I'd like to see the focus put elsewhere: namely, worrying more about the bottom than the top, and focusing on income inequality rather than on wealth inequality. The two are related, of course: The portion of wealth inequality that is not derived from inheritance is largely a consequence of huge income disparities. Related, but different." Alan S. Blinder in The Wall Street Journal.
CHAIT: Republicans finally admit why they hate Obamacare. "It is true that Obamacare is far more helpful to people lower down the income scale....But at least conservatives are now representing their true bedrock position on Obamacare. It is largely a transfer program benefitting people who either don’t have enough money, or pose too high a health risk, to bear the cost of their own medical care. Conservatives don’t like transfer programs because they require helping the less fortunate with other peoples’ money." Jonathan Chait in New York Magazine.
MANKIW: How inherited wealth helps the economy. "Is inherited wealth making a comeback?...Inherited wealth has always been with us, of course, but Mr. Piketty believes that its importance is increasing....The bottom line is that inherited wealth is not an economic threat. Those who have earned extraordinary incomes naturally want to share their good fortune with their descendants. Those of us not lucky enough to be born into one of these families benefit as well, as their accumulation of capital raises our productivity, wages and living standards." N. Gregory Mankiw in The New York Times.
DESPRES: How Congress brought the measles back. "In 2000, the Centers for Disease Control and Prevention made a stunning declaration: Measles — a disease that once infected 3 million to 4 million Americans each year, and killed 500 of them — had been eliminated in the United States. It was a victory decades in the making, the product of a highly effective vaccine and a strong public health system. But today, measles is back. Just this month, the CDC reported more cases in the country in the first six months of 2014 — 477 — than during that same period in any year since 1994. Public health has taken a giant, 20-year step back, and we have Congress to thank." Sarah Despres in Politico Magazine.
Animals interlude: Duck stampede!
2. Election-year efforts to put the 'care' back in child care
Child-care issues move to political forefront. "A high-profile White House 'working families' summit Monday will focus on issues such as child care, paid family leave and equal pay between men and women. Politicians in both parties are also rolling out new...legislation amid predictions that such issues will be prominent in the 2014 midterm and 2016 presidential campaigns. Paid leave and child care are emerging as centerpiece issues for many Democrats, part of their broader attempt to portray Republicans as hostile to issues important to women....Republicans, meanwhile, are pushing for additional tax breaks for working parents and other family-friendly proposals in hopes of attracting support from independents and Democrats." Zachary A. Goldfarb and Juliet Eilperin in The Washington Post.
Chart: Here's how few people in America have paid family leave. "Just 11 percent of Americans employed by private industry have access to some sort of paid family leave. For state and government employees, 16 percent can take paid family leave. The U.S. federal government provides no paid family leave to its employees, though they can use their sick days or vacation days that they've saved up. This state of affairs places America in a very small group." Rebecca J. Rosen in The Atlantic.
More numbers on paid maternity leave. "185 countries provided paid maternity leave....Seventy-eight of those countries also provide paternity leave. While the 1993 Federal Medical Leave Act provides as much as 12 weeks of leave for a worker to care for a new addition...or an ill family member, there is nothing that guarantees that time off is paid. In fact, only California, New Jersey, and Rhode Island offer paid family leave. just nine more states even have defined family-leave laws. Most estimates find that only half of the working population is eligible for medical leave under the FMLA. People who are left out include couples whose marriages aren't recognized, part-time workers, and people who are simply unable to afford taking time off without pay.But there seems to be broad support for paid leave in the United States." Tanya Basu in The Atlantic.
What about the federal government? Nope. "There’s paid sick leave, paid annual leave — and there’s planning ahead....For other federal employees, pregnancy often means unpaid leave....The conference comes two decades after Congress last changed federal leave standards in 1993 with the Family and Medical Leave Act. It promised workers a job-protected three months of unpaid leave for childbirth as well as familial and personal illnesses. While the law does not cover more than 40 percent of workers in the U.S., most federal workers fall within the law’s parameters _ as long as they have been in the job for a year. To expand protections, Obama supports the Federal Employees Paid Parental Leave Act, which would require four weeks of paid parental leave." Stephanie Haven in McClatchy Newspapers.
Where are children the healthiest? Look to Vermont. "Across a range of metrics, the Green Mountain State excels, according to...the Centers for Disease Control and Prevention. Fewer than one in four Vermont children are overweight or obese. More than 81 percent have access to medical and dental care . Nearly 99 percent have health insurance. And one-third of all Vermont children report exercising at least 20 minutes a day. Vermont’s relatively small and prosperous population makes it easier than in some other states for officials to reach out to potentially vulnerable children, said Cathy Hess, managing director for coverage and access at the National Academy for State Health Policy. What’s more, Vermont has been a pioneer in children’s health reform." Reid Wilson in The Washington Post.
Why inequality might make children drop out of high school. "Here's a depressing fact: As the gap between poor and middle-class incomes grows, the less likely it is that low-income students, particularly boys, will graduate from high school. Now, there isn't a perfect relationship between inequality and dropouts. But a state's 'lower-tail inequality' — the difference between its 50th and 10th income percentiles — and its intergenerational mobility together explain a good deal of its graduation rate. You can see this in the chart below from Melissa Kearney and Phillip Levin's new paper: the more inequality, the more dropouts. The question is whether this is just a correlation, or something more." Matt O'Brien in The Washington Post.
SALAM: Expanding the child-care credit can help conservatives achieve their goals. "We’re in the middle of a serious tax policy debate that could have a huge impact on where the right goes next....I’d like to focus on how an expanded child credit might shape the political terrain as the baby boomers continue to retire in large numbers, entitlement programs come under heavy strain, and liberals and conservatives jockey for position....I realize that many conservatives find the idea of an expanded child credit discomfiting. But its political potential is undeniable. If you want to ease the way for tax reforms that would encourage savings and investment, restrain the future growth of government, and broaden the conservative coalition, the child credit appears to be what you’ve been looking for." Reihan Salam in National Review.
Other labor reads:
Two-thirds of U.S. states still haven't recovered jobs lost in the recession. Ben Leubsdorf in The Wall Street Journal.
Are the long-term unemployed finally catching a break? Rich Miller, Steve Matthews and Michelle Jamrisko in Bloomberg.
Photography interlude: The most stunning photos of bees.
3. Drugs of the beneficial, increasingly legal and still-illegal kind
A U.S. drug-benefit program for hospitals? "The 340B drug-pricing program lets thousands of hospitals, community health centers and family-planning clinics buy outpatient prescription medications from manufacturers at an estimated 25 to 50 percent discount. Participants can then charge higher rates to insured patients and keep the additional revenue. But growth in the 20-plus year-old program — sparked in part by the Affordable Care Act...is signaling alarms among drug makers and some members of Congress. They say that some facilities should not be eligible and that the money they receive from the discounts is not always plowed back into patient care. Administration officials have promised to propose clearer rules...but a recent federal district court ruling has put into question whether they have that authority." Mary Agnes Carey in The Washington Post and Kaiser Health News.
How health plans are pressing down drug prices. "In dealing with health plans, drug companies are facing a new imperative — bargain or be banned. Determined to slow the rapid rise in drug prices, more health plans are refusing to cover certain drugs unless the companies charge less for them. The strategy appears to be getting pharmaceutical makers to compete on price....Executives of pharmacy benefit management firms say they must do something to cope with rising prices, particularly for so-called specialty pharmaceuticals....Many other countries control drug prices in some manner, so drug companies have become dependent on increasing prices in the United States to grow." Andrew Pollack in The New York Times.
A push to expand access to an opioid antidote. "Until the past few years, naloxone has been used mostly by paramedics, hospitals and drug-treatment programs. But as opioid deaths surge...government officials, nonprofit groups and community activists are pressing hard to get naloxone into the hands of police officers, firefighters and especially addicts’ family members and friends....Nearly two dozens states and the District have enacted legislation making it easier for opioid users’ friends and family to get the antidote. Community-based naloxone distribution programs have existed in the United States since 1996, providing the drug to more than 50,000 people and reversing more than 10,000 overdoses....But for years, those groups operated without much support from governments or society." Brady Dennis in The Washington Post.
Related: The White House is holding a summit on opiate addiction, and new numbers show the problem isn’t getting better. Katie Zezima in The Washington Post.
As medical marijuana laws ease, pot scientists brace for abuse. "The only marijuana available for research in the U.S. is locked down by federal regulators who are more focused on studies to keep people off the drug than helping researchers learn how it might be beneficial. Marijuana is a trend that 'will peak like tobacco then people will see their error,' said Nora Volkow, director of the National Institute on Drug Abuse, which serves as the gatekeeper for U.S. marijuana research through its oversight of a pot farm that grows the only plants that can be used in clinical trials. Meanwhile, marijuana advocates say NIDA’s control over research has made almost impossible their ability to test the drug against ailments such as pain, cancer-related nausea and epilepsy." Anna Edney in Bloomberg.
Progressive libertarians, rejoice! Medical marijuana has strange political bedfellows. "The Senate is set to consider two key amendments on medical marijuana....One amendment, introduced Wednesday by Sen. Rand Paul of Kentucky, mirrors an amendment passed recently in the House that would stop the Drug Enforcement Administration from using federal funds to go after medical-marijuana operations that are legal under state law....The backdrop is, DEA and numerous U.S. attorneys have been raiding medical-marijuana dispensaries in states where clinics are operating in full compliance with state law. Medical marijuana is legal in 22 states and the District of Columbia. The other amendment, introduced Wednesday by Sen. John Walsh of Montana, would keep the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives from spending appropriated money to deny medical-marijuana patients the right to own firearms." Lucia Graves in National Journal.
Next up on the medical pot legalization list: New York state. Niraj Chokshi in The Washington Post.
Other health care reads:
HHS’s Burwell makes management changes, including creating an Obamacare exchange CEO position. Amy Goldstein in The Washington Post.
McAuliffe vetoes Virginia budget that bars Medicaid expansion, vows to expand it himself. Laura Vozzella, Michael Laris and Rachel Weiner in The Washington Post.
Sanctions common against doctors with odd billing. Charles Ornstein in ProPublica and NPR.
VA bill was easy sell, but some senators feel sticker shock. Laura Sullivan in NPR.
Baby interlude: Dog teaches baby to crawl.
4. What you need to know about the new round of financial reforms
SEC head advocates bond-market reforms. "White said that the [bond market] is plagued by decentralization, insufficient competition and underuse of technology....One proposal would establish a 'best execution rule' for the municipal securities market, similar to those governing stock markets. The proposed rule...could potentially require municipal securities brokers to work as quickly as possible to get their clients the best prices. Another reform would require dealers to disclose any extra fees they charge in 'riskless principal' transactions....White said her office is also working on a proposal to make pre-trade pricing information for corporate and municipal bonds traded electronically or by other alternative networks more widely available to the public." Rebecca Robbins in The Washington Post.
How would big banks be affected? "The practice of dealers showing clients different prices for the same securities on electronic bond-trading platforms has drawn SEC scrutiny. The agency is concerned that smaller investors are being penalized, a person with direct knowledge of the inquiry said in March. Disseminating more information will have a cost associated with it, especially for the biggest banks that derive a significant portion of their income from bond trading and sales. It’s historically been more profitable to trade bonds than stocks because the debt markets are less transparent, making it easier for brokers to take a bigger fee for each exchange." Lisa Abramowicz, Michael J. Moore and Sam Mamudi in Bloomberg.
Banks speed up shift to foreign-exchange and rates trading automation. "Banks including Barclays and UBS are accelerating a shift towards automation in foreign exchange and rates trading as they move to slash costs and reduce the risk of further price manipulation scandals. Senior bankers are aiming to minimise human intervention because traditional trading over the phone has come under an intense regulatory spotlight. Authorities around the globe are investigating alleged manipulation of benchmarks such as currency fixes and interbank lending rates." Daniel Schäfer and Martin Arnold in The Financial Times.
In splintered equity markets, manipulators find cloak. "Rogue traders are benefiting from the splintered U.S. equity market by spreading their buy and sell orders across multiple exchanges, according to a top U.S. regulator. Traders pepper one venue with quotes in an attempt to move a security’s price, while sending other orders to different markets to profit from the change, said Thomas Gira, executive vice president of market regulation at the Financial Industry Regulatory Authority....Gira’s comments refer to trading practices where orders are placed and quickly canceled in an effort to create false — and illegal — impressions of supply and demand." Doni Bloomfield in Bloomberg.
What does the looming BNP Paribas settlement hold for other banks? Probably not much. "The harsh settlement is all about the US projecting its power overseas via financial services. It is not a precedent for how the authorities will deal with other types of bank abuses." Yves Smith in Naked Capitalism.
Just for good measure...ICYMI: High-frequency trading rebates under scrutiny in Senate. Silla Brush and Cheyenne Hopkins in Bloomberg.
Other financial reads:
IMF seeks reprofiling middle ground between bailouts and defaults. David Wessel in The Wall Street Journal.
How to fix a boring meeting interlude: Stand-up desks, according to science.
5. What's next for the NSA and software patents?
House votes to curb NSA 'backdoor' U.S. data searches... "The House on Friday passed a defense spending bill with an amendment that would bar the National Security Agency from conducting warrantless searches of its databases for Americans’ communications records. Although the NSA is permitted to acquire without individualized warrants the communications of foreigners overseas, it has also been allowed to search those records for the communications of Americans in what some lawmakers have called a 'backdoor search loophole.' The amendment, adopted late Thursday night by a wide margin, would ban that practice. The provision would also prohibit the government from requiring companies to alter their hardware or software products to assist the NSA or CIA with electronic surveillance." Ellen Nakashima and Andrea Peterson in The Washington Post.
...as administration breathes new life into phone-data program. "The controversial National Security Agency program that gathers information on telephone calls made by millions of Americans has been extended for nearly three additional months, the Obama Administration announced Friday afternoon. President Barack Obama has endorsed storing some of the so-called metadata with telephone companies instead of the NSA and querying it on a case-by-case basis when needed for terrorism investigations. Legislation to facilitate that approach passed the House in May, but the Senate is still studying the issue." Josh Gerstein in Politico.
Supreme Court's software-patents decision doesn't answer a bigger question. "Experts are a little put out by the decision....While the court struck down what was universally said to be a bad patent, it didn't do much to say what kinds of software should be patentable. In other words, the court decided the most basic conflict in the case, but more or less declined to offer guidance for other, future cases....What many were hoping for was some kind of legal test from the court that would help businesses determine what kinds of software could be patented. Designing such a test would have been complicated, and maybe even impossible. But at the very least, maybe the court would agree to clarify what, if anything, about software should be considered an 'abstract idea'? No luck." Brian Fung in The Washington Post.
Other tech reads:
Limited wireless spectrum has connected-car advocates at odds with expanded-Wi-Fi supporters. Alex Brown in National Journal.
'Jurassic Park' interlude: More like "Jurassic Bark"!
Taxi medallions have been the best investment in America for years. Now Uber may be changing that. Emily Badger.
A guide to the Supreme Court’s upcoming birth control decision. Jason Millman.
The mysterious case of America’s plummeting milk consumption. Roberto A. Ferdman.
Meet the filmmaker taking on the "unsustainable" student loan system. Jonnelle Marte.
Why inequality might make kids drop out of high school. Matt O'Brien.
10 maps that show how much time Americans spend grooming, eating, thinking and praying. Christopher Ingraham.
Skeptics aside, Obama steams toward Pacific trade deal. William Mauldin in The Wall Street Journal.
U.S. regulators in driver's seat over vehicle safety. Robert Wright in The Financial Times.
Student debt takes its toll on some homebuyers. Josh Mitchell in The Wall Street Journal.
Cities in South, West to grow faster. Kathleen Madigan in The Wall Street Journal.
If you're going to the Grand Canyon this summer, leave the family drone at home. Mark Berman in The Washington Post.
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Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.