Sept. 28, 2012

Welcome to Wonkbook, Ezra Klein and Evan Soltas’s morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

Wonkbook dashboard

RCP Obama vs. Romney: Obama +3.0%; 7-day change: Obama +3.0%.

RCP Obama approval: 49.3%; 7-day change: +1.8%.

Intrade percent chance of Obama win: 67.2%; 7-day change: +8.2%.

Top story: A problem ‘entitled’ Romney

Mitt Romney is in deep trouble after a video surfaces of him describing 47 percent of Americans as ‘dependent’ and ‘entitled.’ “During a private fundraiser earlier this year, Republican presidential candidate Mitt Romney told a small group of wealthy contributors what he truly thinks of all the voters who support President Barack Obama. He dismissed these Americans as freeloaders who pay no taxes, who don’t assume responsibility for their lives, and who think government should take care of them.” David Corn in Mother Jones.

Watch: The leaked video.

The damning quote: “There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what...These are people who pay no income tax.”

@DouthatNYT: As with Obama’s “bitter clingers,” Romney’s “47 percent” line is useful window into what each party’s donor class wants to be told.

New details: where Romney said what he said. “The reported host of a private $50,000-a-plate fundraiser that has come to haunt Mitt Romney this week is a prominent Florida private equity manager who has attracted media attention for partying with the rich and famous. Marc J. Leder, the co-founder of Sun Capital Partners of Boca Raton, Fla., was named by Mother Jones journalist David Corn Monday night as the host of a Romney fundraiser.” Dan Eggen in The Washington Post.

Watch, also: Romney’s damage-control press conference on remarks in video.

KLEIN: The policy behind Romney’s remarks. “[T]his argument is, in a way, a very clever policy two-step that's less about who pays taxes now and more about who is going to pay to reduce the deficit in the coming years. Here's how it works. Part of the reason so many Americans don't pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans…Republicans are arguing that these Americans they have helped free from income taxes have become a dependent and destabilizing ‘taker’ class who want to hike taxes on the rich in order to purchase more social services for themselves. The antidote, as you can see in both Paul Ryan and Mitt Romney's policy platforms, is to further cut taxes on ‘job creators’ while cutting the social services that these takers depend on.” Ezra Klein in The Washington Post.

@Noahpinion: “How dare you pay no taxes! Let’s cut taxes!” – Romney

And why they are misleading. “Over the past few years, Republicans have developed a habit of railing against the 47 percent of Americans who don't pay any federal income taxes. It's a fairly misleading talking point, but it keeps resurfacing. And now Mitt Romney has picked up on it…There is no fair accounting in which 47 percent of Americans take no ‘personal responsibility and care for their lives.’…The United States has a mildly progressive tax system, it's true. In general, the rich pay more than the poor. But all groups contribute.” Brad Plumer in The Washington Post.

Let the Tax Policy Center explain: Here’s why “about 46″ percent didn’t pay federal income tax in 2011.

@AlecMacGillis: Good news for Mitt Romney: since we know that a lot of the 47 percent don’t vote, he should have this thing in the bag.

What Romney gets right. “[H]am-handed, principled, offensive, or otherwise, Romney's words were clearly one thing: true…According to the Tax Policy Center, a partnership of the liberal Urban Institute and the Brookings Institution, 46.4 percent of American filers pay ‘zero or negative’ income tax…Paying no income tax is one thing. Being ‘dependent on government’ is another…According to the Census Bureau, 49 percent of Americans live in a household that receives a government entitlement for ‘health care’ through Medicaid or Medicare, ‘food’ through stamps, disability, Social Security, or a ‘housing’ assistance program…But what about the harder question: Is Mitt right to say that those people are more likely to support Obama? For the most part, yes. Crunching the Tax Policy Center's figures, you find that 82.8 percent of those who pay no income tax live in households with income under $33,542. And according to Gallup, among those with incomes under $36,000, Obama has a massive, 15-point lead.” Alex Klein in The Daily Beast.

@EWErickson: Dammit! I’m just now seeing these Romney secret videos. We need that guy on the campaign trail!

@petersuderman: What Romney said is a message that part of the conservative base likes and wants to hear. Romney obliged.

Who is Romney’s ‘taker class’? “[H]alf of the households that do not pay federal income tax do not pay it because they are simply too poor…Put bluntly, these are not households shirking their tax liabilities. The pool consists mostly of the poor, of relatively low-income working families and of old people. The tax code is specifically designed to reduce the burden on them.” Annie Lowrey in The New York Times.

CHAIT: Romney’s remarks shouldn’t be written off. “[T]hey reveal something vital about Romney, and they disqualify his claim to the presidency…To think of Romney's leaked discourse as a "gaffe" grossly misdescribes its importance. Indeed the comments' direct impact on the outcome of the election will probably be small…Instead the video exposes an authentic Romney as a far more sinister character than I had imagined. Here is the sneering plutocrat, fully in thrall to a series of pernicious myths that are at the heart of the mania that has seized his party…[H]e put himself forward as the hopeful president of the top half of America against the bottom.” Jonathan Chait in New York Magazine.

@grossdm: If you are too young to have seen Monty python’s great upper class twit of the year skit, don’t fret. You’ve got the Romney campaign

BROOKS: What the comments say about Romney. “Romney, who criticizes President Obama for dividing the nation, divided the nation into two groups: the makers and the moochers…This comment suggests a few things. First, it suggests that he really doesn't know much about the country he inhabits…It suggests that Romney doesn't know much about the culture of America. Yes, the entitlement state has expanded, but America remains one of the hardest-working nations on earth…It says that Romney doesn't know much about the political culture…Romney's comments also reveal that he has lost any sense of the social compact.” David Brooks in The New York Times.

@felixsalmon: You think Romney even notices his social security taxes? They’re a rounding error!

CHAIT: The remarks are broadly in line with a right-wing cult of selfishness. “The idea is that the United States is divided into two classes–the hard-working productive elite, and the indolent masses leeching off their labor by means of confiscatory taxes and transfer programs. You can find iterations of this worldview and this moral judgment everywhere on the right…In these disparate comments we can see the outlines of a coherent view of society. It expresses its opposition to redistribution not in practical terms–that taking from the rich harms the economy–but in moral absolutes, that taking from the rich is wrong. It likewise glorifies selfishness as a virtue. It denies any basis, other than raw force, for using government to reduce economic inequality. It holds people completely responsible for their own success or failure, and thus concludes that when government helps the disadvantaged, it consequently punishes virtue and rewards sloth. And it indulges the hopeful prospect that the rich will revolt against their ill treatment by going on strike, simultaneously punishing the inferiors who have exploited them while teaching them the folly of their ways. There is another way to describe this conservative idea. It is the ideology of Ayn Rand.” Jonathan Chait in The New Republic.

Gaffes have slammed the news cycle. But they haven’t hit the poll numbers. “[I]t's worth taking a step back to say that there is little evidence that missteps — whether minor or major — have an obvious and immediate impact on polling in this race…So, it's worth taking the immediate analysis of what it all means for Romney — including this one — cum grano salis. Caveats dispatched, we do think there are at least two real impacts of Romney's brutal past two weeks — even if they are not evident in polling. The first — and most important — is that this story will serve as a major distraction for a Romney campaign who just today announced its plans to re-boot itself by offering more specifics on what he would do on the economy if elected president…The second way the leaked video impacts the race is that it fuels the ‘gang who can't shoot straight’ narrative that Politico began with its story and that the Romney campaign was hoping to quickly extinguish with its conference call Monday morning.” Chris Cillizza in The Washington Post.

Some graphs on gaffes and poll numbers.

Romney’s new strategy is to get specific — or at least seem so. “Mitt Romney tried on Monday to give new direction to his campaign, unveiling an advertising drive intended to address a sense among undecided voters that they do not have a clear idea of where he would take the country if elected president. With just 50 days left until Election Day, it was an abrupt shift from a strategy that until now had been focused almost entirely on criticizing President Obama and, in particular, Mr. Obama's handling of the economy.” Jim Rutenberg and Ashley Parker in The New York Times.

KLEIN: Even before the comments, the Romney campaign was in trouble: “Romney is behind and has been there for quite some time. According to the Real Clear Politics average of head-to-head polls, Romney hasn't led the race since October 2011. The closest he came to a lead in the polls this year was during the Republican National Convention, when he managed to ... tie Obama. Romney is also behind in most election-forecasting models. Political scientist James Campbell rounded up 13 of the most credible efforts to predict the election outcome: Romney trails in eight of them. He's also behind in Nate Silver's election model, the Princeton Election Consortium's meta-analysis, Drew Linzer's Votamatic model and theWonkblog election model. But I didn't realize quite how dire Romney's situation was until I began reading "The Timeline of Presidential Elections: How Campaigns Do and Don't Matter," a new book from political scientists Robert Erikson and Christopher Wlezien.” Ezra Klein in The Washington Post.

BARRO: This could cost Romney the race. “You can mark my prediction now: A secret recording from a closed-door Mitt Romney fundraiser, released today by David Corn at Mother Jones, has killed Mitt Romney’s campaign for president. On the tape, Romney explains that his electoral strategy involves writing off nearly half the country as unmoveable Obama voters…This is an utter disaster for Romney. Romney already has trouble relating to the public and convincing people he cares about them. Now, he’s been caught on video saying that nearly half the country consists of hopeless losers.” Josh Barro in Bloomberg.

PONNURU: The Right’s misplaced blame. “The underlying idea is that the more people rely on the federal government, the more they will support government activism and the party that favors it…More recently, many conservatives have expressed worry that the growth in the percentage of Americans who pay no federal income tax will make the electorate more supportive of big government…As an explanation for electoral trends, though, this theory doesn't hold up. One major reason for the growth of the federal government in recent years has been that entitlement spending per beneficiary has increased, and so has the number of beneficiaries as people have retired. Yet senior citizens — who benefit from federal programs, on average, far more than younger people — have become more Republican over that same period…[And] Americans with low incomes…shifted toward Republicans even as food stamps, unemployment benefits and the like continued to increase.” Ramesh Ponnuru in Bloomberg.

Perhaps this is just the GOP’s new strategy? ”Calling a GOP victory in the 2012 presidential election antithetical to the party platform, top Republicans revealed a new long-term political strategy Tuesday: reelecting Barack Obama and making his life even more of a living hell than it already is…’If we are going to make the president a haggard shell of a human being by the time he leaves the White House, we need four more years of never compromising, four more years of miring every piece of legislation in unnecessary procedural muck, four more years of pretending we want to work with the president and then walking away from the table at the last second,’ McConnell added. ‘Four more years! Four more years! Obama 2012!’” The Onion.

Top op-eds

HAIDT AND HETHERINGTON: Political polarization is actually a problem. “America is not united and it is getting less and less unitable with each passing decade. You can see us coming apart in three simple graphs…The trend has been steady, continuing right up through the imminent departure from the Senate of Olympia Snowe, one of the last remaining moderate Republicans. On the bright side: it is mathematically impossible for congress to get much more polarized. The second graph shows that it's not just politicians who are moving further apart; it's us — the public — as well…[we find] increased hostility toward the other party, accelerating in recent years.” Jonathan Haidt and Marc J. Hetherington in The New York Times.

GLAESER: In politics, it’s short-term versus long-term. “Should voters blame President Barack Obama for America's current economic malaise? The Mitt Romney campaign, hard as it tries, will find it difficult to convince moderates that Obama completely mishandled the short-term stimulus. Their better argument is that the president focused too much on the immediate crisis, and did too little for the future…More generally, it is hard to argue that the stimulus package — $772 billion as of Sept. 12 — was too large given the depths of the recession. But it is fair to claim that the administration failed to couple short-term palliatives with a more sustainable, long-range economic plan.” Edward Glaeser in Bloomberg.

SUNSTEIN: The entire premise of Sorkin’s ‘The Newsroom’ is wrong. “The remedy for easing such polarization, here and abroad, may seem straightforward: provide balanced information to people of all sides. Surely, we might speculate, such information will correct falsehoods and promote mutual understanding. This, of course, has been a hope of countless dedicated journalists and public officials. Unfortunately, evidence suggests that balanced presentations — in which competing arguments or positions are laid out side by side — may not help. At least when people begin with firmly held convictions, such an approach is likely to increase polarization rather than reduce it…Balanced presentations can fuel unbalanced views…What explains this? The answer is called ‘biased assimilation,’ which means that people assimilate new information in a selective fashion…People tend to dismiss information that would falsify their convictions. But they may reconsider if the information comes from a source they cannot dismiss…What matters most may be not what is said, but who, exactly, is saying it.” Cass Sunstein in The New York Times.

SOUMERAI AND KOPPEL: Electronic medical records have been overhyped. “[A] comprehensive evaluation of the scientific literature has confirmed what many researchers suspected: The savings claimed by government agencies and vendors of health IT are little more than hype…With a few isolated exceptions, the preponderance of evidence shows that the systems had not improved health or saved money. For instance, various studies found the percentage of alerts overridden by doctors — because they knew that the alerted drug interactions were in fact harmless--ranging from 50% to 97%…Why are we pushing ahead to digitize even more of the health-care system, when the technology record so far is so disappointing? ” Stephen Soumerai and Ross Koppel in The Wall Street Journal.

SOLTAS: What the Fed’s next move will be. “Fed watchers say the change in direction is unfinished. Though the Fed has tied policy to progress in the labor market, the target itself remains unclear…The next step is for the Fed to more clearly define its target, and it appears it may do just that in future FOMC meetings. What would a better defined target look like?…[What's to come] likely is a definition of the Fed’s policy target that is clarified in increments…What seems most likely — and most similar to the evolution of forward guidance — is that the Fed will reapply its economic projections as policy targets…With this strategy, the FOMC could say that it views these projections as generally consistent with the qualitative economic outcome it desires. (It should further affirm that it considers a wider set of data in monetary policy decisions.) The Fed, in essence, would ‘target the forecast’ by using monetary policy to pursue these objectives in a balanced way.” Evan Soltas in Bloomberg.

ROSEN: How Romney’s tax plans could get the rich to pay more. “One essential issue has been mostly absent in the debate, however, and that is the effect the Romney proposal could have on economic growth. This is an odd omission, because the primary motivation behind the proposal is to promote growth…The basic question that arises here is, how much would the Romney proposal increase growth? Both economic theory and historical experience suggest that, in any income tax system, lowering marginal rates and broadening the base enhance growth. However, no one knows for sure the precise magnitude of the effect…Assuming that current tax policy is the starting point, a modest 3 percent increase in incomes generated by the more efficient tax system would lead to about $14.7 billion in additional taxes from people whose incomes are $200,000 and above…The crucial lesson is that higher rates of economic growth under Romney's plan would be big enough to matter.” Harvey S. Rosen in Bloomberg.

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

Still to come: What the payroll tax cut expiring could do to the economy; a middle road on Medicaid; the Congress has lots to do and not a lot of time to do it; bad news in natural gas and nuclear energy; and how there’s only 11 minutes of action in the average NFL game broadcast.

Economy

Expiration of the payroll tax cut would be a $125b blow to the economy. “In February, President Barack Obama joined Democrats and Republicans on Capitol Hill in championing a payroll tax holiday that would help boost the moribund economy. But now, that tax break has fallen largely off the radar — and ending it could take $125 billion out of the economy next year alone…Michael Feroli, the chief U.S. economist for JPMorgan Chase, estimated in an April report that ending the payroll tax holiday would suck $125 billion out of the economy next year. In comparison, expiration of the Bush-era rates costs the economy about $280 billion and the sequester cuts to defense and domestic programs $98 billion, according to Feroli's analysis.” Seung Min Kim in Politico.

Trade debate increases Sino-American tensions. “Political pressures in both the U.S. and China are straining ties between the two superpowers. President Barack Obama, under attack by Republican nominee Mitt Romney for being soft on China, said Monday he is asking the World Trade Organization to rule that Beijing is illegally subsidizing autos and auto parts…Chinese leaders, meanwhile, are under internal pressure to appear tough and please the military during China’s own leadership transition, which gets under way this fall. They are facing off with Japan and other regional powers over ownership of several Pacific islands…There is every reason to believe that tensions will continue to simmer. ‘Particularly at a time of leadership transition, nobody wants to appear soft on any external actor--not Japan, not the U.S.,’ said Bonnie Glaser, an expert on Chinese security issues at the Center for Strategic and International Studies.” Keith Johnson and Carol E. Lee in The Wall Street Journal.

A different sort of padding interlude: There’s only 11 minutes of action in the average NFL game broadcast.

Health Care

Some states are seeking a middle ground on Medicaid expansion. “A handful of states are considering only partially expanding their Medicaid programs under the federal health-care overhaul — a new twist on how states are interpreting the Supreme Court’s ruling on the law. Indiana, New Mexico and Wisconsin are among the states asking the federal government to let them omit from the Medicaid expansion residents whose incomes put them just above the poverty level. The states hope to take advantage of provisions in the Affordable Care Act that offer a federal subsidy to help these residents buy private insurance, starting in 2014.” Louise Radnofsky and Christopher Weaver in The Wall Street Journal.

Urgent care centers are booming. “Since 2008, the number of facilities has increased from 8,000 to 9,300…Growth is expected to increase even faster in 2014, when the Affordable Care Act starts to bring health-care coverage to as many as 30 million Americans, many of whom do not have regular doctors…A 2010 Rand Corp. study found that almost one in five visits to hospital emergency rooms could be treated at urgent care centers, potentially saving $4.4 billion annually in health-care costs.” Phil Galewitz in Kaiser Health News and The Washington Post.

Domestic Policy

The farm bill may not make it through Congress. “Milk and mayhem are the rule this week as the House farm bill debate spirals downward and Republicans prepare to go home Friday without acting on the bipartisan five-year plan reported in July. To save face, the GOP leadership is toying with a three-month extension of the current 2008 farm law due to expire Sept. 30.” David Rogers in Politico.

Senators are ‘literally’ almost out of time before the pre-election recess. “The Senate will be out entirely Tuesday, leaving Wednesday and Thursday as likely the only two days left before the election recess. Senate Majority Leader Harry Reid (D-Nev.) hasn't formally announced a schedule, but the House has decided to adjourn at the end of this week so that members can campaign for the Nov. 6 election.” Ramsey Cox in The Hill.

GOP wants to scrap calorie caps on school meals. “Rep. Steve King (R-Iowa) has introduced legislation that would repeal a U.S. Department of Agriculture rule that puts a cap on the number of calories in school lunches served to children. King’s No Hungry Kids Act, H.R. 6418, would eliminate new USDA guidelines that say children in kindergarten through fifth grade can be served meals containing up to 650 calories, while meals for sixth through eighth graders can have 700 calories, and meals for high schoolers can have 850 calories…USDA announced the new policy earlier this year, and was set to start phasing it in during the current school year. When it announced the plan in January, USDA’s release included remarks from first lady Michelle Obama.” Pete Kasperowicz in The Hill.

Alarmism interlude: The best (or arguably worst) Newsweek covers of all time.

Energy

Growth in electric vehicles is set to flatline without further government support. “The U.S. electric vehicle market will be stuck in neutral unless the federal government revamps tax incentives and helps states do the same, according to a think tank report released Monday. Though projections show electric vehicles could make up as much as 33 percent of the U.S. new vehicle market between 2020 and 2030, the federal government can do more to make that a reality, the Carnegie Endowment for International Peace report said. The government should change a tax credit for purchasing electric vehicles into a rebate, the report said. The current system favors wealthier people because credits only offset tax liabilities, the report said. The federal government also should boost grants and loans to industry, add vehicle charging infrastructure and increase basic research funding in academia and at the national laboratories, the report said.” Zack Colman and Ben Geman in The Hill.

Energy Dept. dragging heels on export plans for natural gas. “The Obama administration on Monday once again delayed release of a report on expanding liquefied natural gas exports…Commissioned by the Energy Department to examine the economic impact of LNG exports, the report by an unidentified third-party contractor is now expected to be completed by the end of the year…The department, which has said it will not make any decision on allowing further LNG exports until the analysis is completed, had previously pledged to release the report by late summer…It was the second delay of the report, which was initially expected in March…Natural gas exports to all but a handful of countries with Free Trade Agreements with the United States require approval from the department.” Ayesha Rascoe in Reuters.

Nuke regulators accused of cover-up. “An engineer with the Nuclear Regulatory Commission (NRC) says the agency has withheld documents showing reactor sites downstream of dams are vulnerable to flooding, and an elevated risk to the public’s safety…Perkins, in a letter submitted Friday with the NRC Office of Inspector General, said that the NRC ‘intentionally mischaracterized relevant and noteworthy safety information as sensitive, security information in an effort to conceal the information from the public.’…The report concluded that, ‘Failure of one or more dams upstream from a nuclear power plant may result in flood levels at a site that render essential safety systems inoperable.’” Zack Colman in The Hill.

Keystone pipeline may need OK from Native American reservations. “TransCanada's plan to dig a trench and bury part of its $7 billion, 1,700-mile Keystone XL pipeline right through this land has unearthed a host of Native American opposition, resentments and ghosts of the past. Winning support in Indian country is one of the last hurdles for the project, which is touted as a key to North American energy security. The question is whether gaining tribal support is a courtesy, as the company puts it, or a legal obligation…[M]any Native Americans in the United States — and their lawyers — insist that there are legal obligations under 19th-century treaties that affirmed sovereign status of Native American tribes, which do not pay state or federal taxes and which have their own governing councils and police forces.” Steven Mufson in The Washington Post.

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