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Wonkbook’s Number of the Day: $486 billion. That's the federal government's deficit in the 2014 fiscal year. Measured as a share of the economy that's smaller than the average deficit going back to the 1980s.
Wonkbook’s Chart of the Day: Did U.S. partisan conflict really hit a four-year low? New Fed index says yes.
Wonkbook's Top 4 Stories: (1) Ebola outbreak's growing global costs; (2) what the Fed minutes say; (3) the new HealthCare.gov; and (4) court battle update.
1. Top story: The rising global costs of Ebola
First, what happened yesterday: First U.S. Ebola patient passes away. "Duncan’s case attracted international headlines over the past week, revealing gaps in the readiness of U.S. hospitals to deal with Ebola’s arrival here and demonstrating how easily the virus could slip undetected from the epicenter of the outbreak in West Africa to virtually anywhere in the world. His death also renewed questions about whether the hospital’s decision to initially send Duncan home before admitting him days later not only put others at risk for infection, but also hurt his chances for survival....Government officials on Wednesday outlined new screening measures for travelers entering the country from West Africa in coming days. They include temperature-taking and questions about exposure to Ebola patients." Mark Berman, Brady Dennis and Lena H. Sun in The Washington Post.
Explainer: What you can expect from new airport screening measures. Ben Mutzabaugh and Bart Jansen in USA Today.
Odds were stacked against Duncan, experts say. "Murphy notes that Duncan's care was hardly ideal. Duncan developed symptoms of Ebola Sept. 24, four days after arriving in the USA. He sought care at Texas Health Presbyterian Hospital, but doctors sent him home with antibiotics. He was not admitted to the hospital until Sept. 28. Such delays can be deadly, Murphy said....Dallas officials mishandled the situation at multiple points, Murphy said, including quarantining Duncan's family for days in a contaminated apartment....Public health officials should learn from the case, Osterholm said, and be prepared to temporarily relocate families such as these." Liz Szabo in USA Today.
The costs of treating someone with Ebola. "The care provided Ebola patient Thomas Eric Duncan may have cost as much as half a million dollars, a bill Texas Health Presbyterian Hospital Dallas is unlikely to ever collect....He had been on a ventilator, was given an experimental medicine and began receiving dialysis when his kidney’s failed Oct. 4, the hospital has said. His treatment included fluids replacement, blood transfusions and drugs to maintain blood pressure. There’s also the cost of security, disposing of Ebola-contaminated trash and equipment to protect caregivers." Alex Wayne in Bloomberg.
Chart: Stock of Chimerix, maker of experimental drug used on Duncan, tumbles after his death. Andrew Khouri in the Los Angeles Times.
World Bank: Fear of Ebola could lead to 'catastrophic' economic effects exceeding $32B. "That single dollar amount doesn't fully convey the extraordinary human toll....Yet the World Bank's estimate is a reminder that sickness and death are only part of what could be a developing regional crisis. Already, farmers are abandoning their fields, and local authorities are restricting shipments of goods, according to the report. Fear of Ebola is spreading much faster than the virus itself, with what the report describes as potentially 'catastrophic' economic consequences, including food shortages....The authors are optimistic that neighboring countries will be able to contain outbreaks, in which case the economic effects would be limited." Max Ehrenfreund in The Washington Post.
Projected economic costs could vary widely depending on level of success in response. "The report estimated the costs of two scenarios: —more than $9 billion if the disease is rapidly contained in the three most severely affected countries. —$32.6 billion if it takes a long time to contain Ebola there and the disease spreads to neighboring nations. One way to ease the impact, the report said, was be if immediate action halted the outbreak and calmed fears. Concerns about the disease are causing neighboring countries to close their borders, and airlines and businesses to suspend commercial activities in the three worst-affected countries." Deb Riechmann in the Associated Press.
IMF: The Ebola outbreak will hurt African economic growth. "Sub-Saharan African economies need to better prepare for the risks of the Ebola outbreak, wider budget shortfalls and security threats from militant groups, according to the World Bank and International Monetary Fund....The Ebola outbreak will cut economic growth in the worst-affected nations of Guinea, Sierra Leone and Liberia by 2.1 percentage points to 3.4 percentage points, the World Bank said....The World Bank lowered its forecast for economic growth in sub-Saharan Africa to 4.6 percent this year compared with 5.2 percent in April. The IMF cut its 2014 economic outlook for the region to 5.1 percent from an earlier estimate of 5.4 percent." Rene Vollgraaff in Bloomberg.
John Kerry: Other countries must do more. John Kerry in The Washington Post.
Kerry: We still need airlines to keep operating in West Africa. "Some lawmakers have been pushing for a ban on commercial airline flights between the U.S. and Ebola-stricken nations following the diagnosis of the disease in a man who flew from Liberia to Texas with a connection in Washington, D.C. However, Kerry said Wednesday during a joint press conference with his British counterpart that it would be counterproductive to stopping the spread of Ebola to cut off flights entirely." Keith Laing in The Hill.
But European airlines arecanceling flights to West Africa, hampering relief efforts. "You can book to travel on British Airways (BA) from London Heathrow to Roberts International airport in Monrovia, but the direct flight will take nine hours — and at least 25 weeks — to arrive in the Liberian capital. In August BA suspended flights to Liberia and Sierra Leone, citing public health concerns amid the spread of ebola in the region. Now, the U.K. carrier has announced its decision to maintain that suspension through the end of March 2015. BA isn’t alone; there are now so few airlines flying into the area that key workers are being forced onto wait lists and lengthy journeys with multiple stopovers." Catherine Mayer in Time Magazine.
Chart: Airline stocks tumbled after the first Ebola case in Spain was confirmed. Business Insider.
Explainer: What you need to know about Ebola and air travel. Matt Pearce in the Los Angeles Times.
Ebola's rising cost of another kind in Liberia: orphans. "In a country still recovering from 14 years of civil war, Ebola is posing a new threat to children, with challenges never seen here before. Some children have been forced to leave homes where relatives are infected, cleaving families into the sick and the well. Others face stigma if parents or siblings contract the disease, or they are shunned if they get it themselves and are fortunate enough to survive. And Liberia has a new wave of orphans, like the one caused by the war. The Liberian government and Western aid agencies are scrambling to respond with makeshift arrangements." Lenny Bernstein and Gail Sullivan in The Washington Post.=
U.S. general: $750 million military cost for first six months in Liberia. "U.S. military efforts to construct treatment facilities, set up more labs and conduct testing and training in Africa to deal with the Ebola crisis are expected to cost $750 million over six months, the Army general who commands U.S. troops in Africa said Tuesday. Gen. David Rodriguez said the U.S. has been asked to set up four more testing labs, in addition to the three already there. He said three or four highly trained U.S. troops work in each of the labs. The U.S. troops in the labs are testing specimens drawn by local hospitals and health care workers....The troops do not come in contact with the actual sick patients, but handle only the samples." Lolita C. Baldor in the Associated Press.
What about the costs of rolling out a vaccine? "Politically, ordering vaccines without knowing if they'll work is a hard sell. Marie-Paule Kieny, an assistant director-general at WHO, notes that there will be plenty of criticism if vaccine is purchased as an insurance policy and then not used....Many are looking to the United States government to foot the bill, or the majority of it, but no commitment has yet been made. A U.S. government official who is involved with these discussions and asked not to be named says the government is helping to set up the efficacy studies as quickly as possible, and says their results should be awaited 'before large sums of money need to be invested in scale up of production.'" Jon Cohen Kai Kupferschmidt in Science.
GIUGALE: The economic impact of Ebola. "To put things in perspective, more than half of the twenty million population of Guinea, Liberia, and Sierra Leone live in poverty — real poverty. Their average annual incomes range from just over $400 to less than $700. They have lived through violence and civil wars. But, in recent years, thanks to a mix of mineral discoveries and better governance, they were finally beginning to climb the development ladder. Ebola is now putting all of that into question. How bad is the initial economic impact, and how bad could it get? Answering those questions is more art than science." Marcelo Giugale in The Huffington Post.
COHN: Ebola security theater won't solve the problem. "A secondary goal of the new steps is to calm the American psyche and there's a case for that. If it takes some extra vigilance and a quick temperature check to make the American people feel safe, and if it doesn't divert precious resources, it’s probably a price worth paying — in much the same way that security theater in the airports, following September 11, made it possible for the flying public and eventually the rest of the public to return to some form of normalcy. Still, nobody should be under the illusion that these efforts get at the real problem, which is the outbreak in West Africa and the toll it is taking there." Jonathan Cohn in The New Republic.
MARTIN AND HERTEL-FERNANDEZ: How Sweden fights inequality: not by taxing the rich. "There seems to be an obvious solution to rising inequality: higher taxes. But there's an inconvenient fact here. The way most advanced, industrial countries have made real gains on inequality is through relatively regressive taxes that fund programs that reduce inequality. In fact, America's tax system is already unusually progressive by international standards. Our ongoing research suggests that this unusual relationship is not a coincidence....Countries with highly progressive taxes that disproportionately hit the rich — like the United States — tend to have the stingiest welfare states." Cathie Jo Martin and Alexander Hertel-Fernandez in Vox.
SHELLENBERGER AND NORDHAUS: The problem with energy efficiency. "Finally, in the late 19th century, the electric light bulb emerged. Along the way, demand would rise for these new technologies and increase as new ways were found to use them. This led to more overall energy consumption. From outer space, you can see the results of this long progression of illumination. More and more of the planet is dotted with clusters of lights. There is no reason to think that the trend lines for demand for LED lighting will be any different, especially as incomes rise and the desire for this cheaper technology takes hold in huge, emerging economies." Michael Shellenberger and Ted Nordhaus in The New York Times.
FELDMAN: Amazon workers are today's coal miners. "You'd think the question of what activities count as part of the workday would've been solved by now, 70 years later....This conflict at the heart of the case clarifies why the issue won't go away. It's not just that the struggle between wage-labor and capital is eternal, though that's part of the equation. It's that there’s a fundamental tension between our intuitive sense of what is fair and the logic of free markets, in which both sides are assumed to agree voluntarily. Choosing between the two is a challenge relived on every difficult policy question. Whatever the Supreme Court decides today, 70 years from now, our grandchildren will probably still be fighting about it." Noah Feldman in Bloomberg View.
LANE: Why gay marriage didn't suffer the same backlash as abortion. "The public generally favored some form of legal right to abortion at the time of Roe, but that didn’t stop a dedicated minority from building a pro-life movement after the ruling came down. Those of us who expected a greater backlash failed to anticipate that, even though gay marriage and abortion are both 'social issues,' the former lacks the latter’s power to galvanize opposition — even on the right. Whereas the antiabortion cause draws energy from a narrative of harm rooted in the undeniably difficult physical realities of surgical pregnancy termination...opponents of gay marriage struggle to describe its harms except in abstract terms of symbolism and tradition." Charles Lane in The Washington Post.
LEWIS: The key to keeping cyberspace safe? An international accord. "Getting the rule of law in cybersecurity requires collective action, nationally and internationally, and for now, that still requires U.S. leadership. Unfortunately, this may be impossible in Washington today. The political consensus that let this society build superhighways and the Internet is fractured. Until a new political consensus is forged, progress in cybersecurity will be slow. Cybersecurity is a good test of whether the United States has the resolve and the skills to maintain the world order it created decades ago. We may fail, in which case cybersecurity will be just another part of a larger unraveling of international peace. While Washington struggles to redefine its social contract, we should expect uncertain responses, half-measures and more hacking." James Andrew Lewis in The Washington Post.
DOMENICI: A Pell Grant injustice for young offenders. "College-ready juveniles could be taking online college classes right now, preparing themselves for a successful transition upon release — if the Education Department would simply clarify that these juveniles are eligible for Pell Grants. Aside from being unjust, the misapplication of the Pell Grant ban isn’t even smart policy. Public opinion widely supports the notion that one goal of juvenile justice systems should be rehabilitation. Juveniles generally are held in secure settings for relatively short periods before returning to the community, and the best way to support their successful transition to college...is to enable them to start taking classes while in confinement." David Domenici in The Washington Post.
Determined dog interlude: This dog won't stop jumping for a cookie.
2. Why the Fed didn't change its rate guidance
Fed didn't alter rate guidance over concerns that it would be misread. "The Fed statement...repeated that officials expected they would keep short-term interest rates near zero for a 'considerable time' after the end of their bond-buying program. The minutes said several officials objected to the phrase because they thought it suggested the central bank would wait longer to raise interest rates than they thought likely. In addition, 'the concern was raised' that the current phrasing might be misinterpreted as linking the likely first rate increase to a particular calendar date, rather than clarifying that it would depend on the economic data, the minutes said." Pedro Nicolaci da Costa in The Wall Street Journal.
Explainer: We read the Fed minutes, so you don't have to. Ylan Q. Mui in The Washington Post.
The Fed is looking for a new way to say the same thing. "Most officials...said that they were far from satisfied with the economy’s progress. And the account said some officials expressed concern that the slow growth of other major economies would start to weigh on the United States. The Fed sees a need to replace its guidance that it plans to keep short-term rates near zero for a 'considerable time' after the end of its bond-buying campaign. The account suggests that officials are trying to find a new way to say the same thing. Most officials want to preserve the general perception that a first increase is most likely around the middle of the year. But they also are going out of their way to emphasize that the timing could change if job growth either exceeds or disappoints their expectations." Binyamin Appelbaum in The New York Times.
The Fed is also worried about impact of strengthening dollar. "Federal Reserve officials want to tie an interest-rate rise to U.S. economic progress, but the minutes of their last policy meeting show they are struggling with how to come to grips with the dual threats of a stronger dollar and a global slowdown. The minutes expressed concern the rising dollar could slow a needed rebound in inflation. They also highlighted economic turmoil in Europe and Asia, another factor behind the bank's keeping policy accommodation in place for the near future....Since the meeting, Fed officials have increasingly flagged the dollar's rise as hindering a rebound." Michael Flaherty and Jonathan Spicer in Reuters.
What the dollar's rise tells us about global economy. "The dollar is on an absolute tear, rising sharply over the last few months against other major currencies. And American policy makers seem largely comfortable with the shift....Even as officials will surely start to get an earful from American exporters, they can take solace in the fact that the rally is being driven by a long-awaited pickup in domestic economic activity. And the United States, they are concluding, has more to gain from Europe and Japan getting their policies right and getting their economies on track than it has to lose from American companies facing a less advantageous exchange rate for the time being." Neil Irwin in The New York Times.
The Fed should learn from the 1990s. "There are two lessons here. The first is that the Fed shouldn't raise rates before wage inflation picks up. And the second is that it shouldn't until wage inflation actually turns into price inflation, which, unlike before, isn't a given. Now, between 1965 and 1987, wage inflation explained about half of core inflation due, in large part, to widespread cost-of-living-adjustment contracts among union members. But as organized labor has declined and fallen, this relationship has broken down. As you can see below, wage inflation barely explains any of core inflation, since the Fed finished its Great Disinflation in 1988." Matt O'Brien in The Washington Post.
Fed gauge of labor market activity hits six-year high. "Activity increased to minus 0.53 in September from minus 0.57 the prior month, the Kansas City Fed said. A separate measure of momentum declined to 1.12 from 1.26, still near the record 1.32 level recorded in May. The two measures together make up the Kansas City Fed Labor Market Conditions Indicators, which are calculated from 24 data points....With the unemployment rate falling faster than policy makers had forecast this year, Fed Chair Janet Yellen and other officials have said the drop overstates progress toward full employment and that a broader array of gauges is needed to give a fuller picture of employment." Jeff Kearns in Bloomberg.
Chart: U.S. job market recovery uneven by region. Steve Matthews and Alexandre Tanzi in Bloomberg Businessweek.
Banks need overhaul to resume leading to boost growth, IMF says. "Some large banks are not profitable enough to increase lending, hindering the flow of credit needed to lift economic growth particularly in Europe, the International Monetary Fund said. While large financial institutions have become healthier after being required to clean their balance sheets and hold more capital, they also carry the burden of nonperforming loans and litigation costs while facing acute competition, the IMF said. They’ve also moved away from the risky activities that generated higher returns, it said." Sandrine Rastello in Bloomberg.
Related: IMF: Shadow banking could "compromise global financial stability." Ryan Tracy in The Wall Street Journal.
Other economic/financial reads:
AIG's risks seen by Geithner as requiring tougher terms. Andrew Zajac and Christie Smythe in Bloomberg.
Science interlude: Watch these chemistry reactions scored to music.
3. Meet the new HealthCare.gov
Officials introduce a new and improved HealthCare.gov. "Federal health officials on Wednesday unveiled what they described as a cleaner website and a more logical sign-up process for insurance under the health-care law as they prepared for the next open enrollment period, which begins Nov. 15....Officials said Wednesday that the enrollment process has been streamlined, and that new customers may face as few as 16 steps — compared to as many as 76 last year....In preparation for the next open-enrollment period, the health officials told reporters, they have spent more than five weeks testing the enrollment process. Last year, they said, they spent 10 days testing it. But they said they have only done one day of end-to-end testing so far." Amy Ellis Nutt in The Washington Post.
Explainer: Highlights of the new HealthCare.gov rollout. Sam Baker in National Journal.
But sign-ups are just one step. "The other steps are arguably some of the more challenging pieces to get right. Many shoppers, for example, got stuck last year in the identity verification process....This happens prior to the application process and, while officials did not demonstrate this part of the website...they say they are confident it can perform better than last year....This year there will be millions of people who are trying to renew their policies or switch to a new plan. When Obamacare was in its first year, in 2014, those people didn't exist. So Health and Human Services is also working on an infrastructure to accommodate renewers." Sarah Kliff in Vox.
ICYMI: HealthCare.gov's transparency problems. Margot Sanger-Katz in The New York Times.
ACA tax credits are shrinking for some small employers. Thanks, sequester.. "Due to rules surrounding the sweeping budget cuts, small tax-exempt employers, such as charitable nonprofits and trade groups, will see a 7.3 percent reduction in the tax credit they can receive next year on coverage purchased through the health care law’s new online insurance marketplaces, according to updated guidance released by the Internal Revenue Service. Officials noted that the reduction will remain 'unless and until a law is enacted that cancels or otherwise impacts the sequester.' Though minor, the revision could render the small-business health insurance exchanges...all the less appealing to a subset of small employers." J.D. Harrison in The Washington Post.
GOP eyes lame-duck showdown over ACA risk corridors. "A group of Senate Republicans have their eye on another Obamacare showdown in the lame-duck session....They point to a legal opinion from the Government Accountability Office that said additional funding authority would be needed to make payments to insurance companies under the risk-corridor component of the Obamacare health care exchanges. The Republicans say taxpayers could be on the hook for bailing out insurance companies that suffer losses." Niels Lesniewski and Steven Dennis in Roll Call.
Men dominate largest payments from drug firms. "Few women are on the list of doctors paid the most money by drug and medical device companies last year, according to a ProPublica analysis of new data released by the federal government. More than 90 percent of the 300 doctors who collected the most money for speaking and consulting are men, based on information from the new government database, called Open Payments. By comparison, men accounted for about 68 percent of active physicians in the United States in 2012....What we found adds to a growing body of evidence that male and female doctors are paid differently and may in fact practice medicine differently, though the reasons for the discrepancy are not completely clear." Charles Ornstein in The New York Times.
ICYMI: The new database has problems, including $1.1 billion in missing information. Charles Ornstein in ProPublica.
Other health care reads:
Why Americans are drowning in medical debt. Olga Khazan in The Atlantic.
Astronomy interlude: Gorgeous views of the blood moon.
4. Another day of high-powered court battles
When do work shifts actually end? SCOTUS divided. "The Supreme Court on Wednesday pondered when the working day ends for hourly employees at an Amazon.com warehouse: when the worker punches the time clock, or later, when he clears a security check to make sure he hasn’t stolen anything. Several justices seemed to think it was the former. But others seemed sympathetic to a lawsuit filed by workers at a Nevada facility arguing that enduring the wait to go through security...was part of the job, and they should be paid for it. The implications are great: there are more than a dozen class-action suits filed against Amazon and others who believe security checks are necessary to make sure none of their inventory walks out with the workers." Robert Barnes in The Washington Post.
The same-sex marriage court battles will continue. "Leading opponents of same-sex marriage vowed on Wednesday to push ahead with their legal fight, noting that several federal appeals courts had not yet ruled on the issue and that the Supreme Court could still decide to leave it up to the states. Even as the list of states authorizing same-sex marriage swells, the opponents noted Justice Anthony M. Kennedy’s order on Wednesday to temporarily block a federal appeals court ruling striking down the marriage restrictions in Idaho. The temporary order came as a surprise to many advocates on both sides of the issue, since the Supreme Court on Monday had allowed similar decisions from three other appeals courts to take effect." Erik Eckholm in The New York Times.
SCOTUS lets N.C. voter law proceed. "It was the second time in 10 days that the court had allowed a controversial change in voting laws to take effect in advance of next month’s midterm elections. By a 5 to 4 vote, the court said Ohio’s plan that cut back on early voting could move forward. In that case, Justices Stephen G. Breyer and Elena Kagan joined Ginsburg and Sotomayor in disagreement. The North Carolina legislature in 2013 imposed strict voter identification requirements, cut a week off early voting, prohibited local election boards from keeping the polls open on the final Saturday afternoon before elections, eliminated same-day voter registration and barred votes cast in the wrong precinct from being counted at all." Robert Barnes in The Washington Post.
GAO: voter ID laws cut turnout among youth, blacks. "States that toughened their voter identification laws saw steeper drops in election turnout than those that did not, with disproportionate falloffs among black and younger voters, a nonpartisan congressional study released Wednesday concluded. As of June, 33 states have enacted laws obligating voters to show a photo ID at the polls, the study said. Republicans who have pushed the legislation say the requirement will reduce fraud, but Democrats insist the laws are a GOP effort to reduce Democratic turnout on Election Day. The report by the Government Accountability Office...was released less than a month from elections that will determine which party controls Congress." Alan Fram in the Associated Press.
Holder wants a broad review of police tactics. "Holder told the group that what happened in the St. Louis suburb put a national spotlight on the rift between police and citizens in many cities. 'The events in Ferguson reminded us that we cannot and we must not allow tensions, which are present in so many neighborhoods across America, to go unresolved,”'Holder said at the meeting held by the U.S. Conference of Mayors. He said the Justice Department’s broad review of police techniques, tactics and training should be expanded 'to provide strong, national direction on a scale not seen since President Lyndon Johnson’s Commission on Law Enforcement nearly half a century ago.'" Andrew DeMillo in The Washington Post.
Other legal reads:
Why are police using military-grade weapons in high schools? Molly Knefel in Rolling Stone.
Food interlude: School lunches around the world.
Why more and more cities are refusing to help the government deport immigrants. Emily Badger.
The Fed needs to learn from its successes in the 1990s. Matt O'Brien.
The legal system hasn’t adapted to what Jennifer Lawrence calls a "sex crime." Max Ehrenfreund.
Hardly anyone uses heroin. So why do we keep freaking out about it? Christopher Ingraham.
The Fed minutes: We read them so you don’t have to! Ylan Q. Mui.
Whites think discrimination against whites is a bigger problem than bias against blacks. Michael A. Fletcher.
Fear of Ebola could have “catastrophic” economic costs, World Bank predicts. Max Ehrenfreund.
How Airbnb just changed the housing laws in San Francisco. Emily Badger.
The only place where people go to sleep after midnight: Brooklyn. Roberto A. Ferdman.
Why drawing congressional districts by race is a terrible idea. Christopher Ingraham.
Aides knew of possible White House link to Cartagena, Colombia, prostitution scandal. Carol D. Leonnig and David Nakamura in The Washington Post.
Cyberattack on JPMorgan raises fear at White House, on Wall Street. Michael Corkery, Jessica Silver-Greenberg and David E. Sanger in The New York Times.
U.S. fuel economy hits new high in 2013 model year. Ros Krasny in Reuters.
School superintendents standing by Common Core State Standards. Lyndsey Layton in The Washington Post.
Survey: Millennials like government work but don't stay long. Lisa Rein in The Washington Post.
Efficiency worth more than renewables. Louise Downing in Bloomberg.
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