on. This bill would simply be a two-week version of the reckless measure the House passed last weekend. It would impose the same spending levels in the short term as their initial proposal does in the long term, and it isn't going to fool anyone." Er, perhaps things are going better behind the scenes?

This isn't just about the spending bill. The stakes are higher even than that. At this point, no one side really knows how the power dynamic between the House and the Senate will shake out. House Republicans feel their preferences should take priority because they won the last election. Sharp cuts to non-defense discretionary spending are nothing more than their due. Senate Democrats counter that they still control not just the Senate, but also the White House -- the House Republicans are a minority partner in this play, and don't get to decide what the government does or doesn't do merely because they control one of the three major legislative checkpoints. An uncompromising force is meeting an unimpressed object. But this won't get settled in an arm wrestling bout, and it's looking less and less likely that it'll get settled in negotiations, either. Unfortunately, it seems increasingly possible that this will ultimately get decided when both sides put their theory to the test and take their case to the people during a government shutdown.

Top Stories

The House GOP wants $4 billion in cuts in a two-week stopgap spending bill, report Felicia Sonmez and Paul Kane: "A stopgap government-funding measure being crafted by House Republicans would cut federal spending by $4 billion over two weeks in March, GOP aides said Wednesday. Senate Democrats criticized the plan as a 'hardening' of House Republicans' earlier-stated position that they will reject any stopgap measure that does not reduce federal spending. The measure currently keeping the government running is set to expire on March 4; if Congress doesn't act before then, a government shutdown could ensue. Senate Democratic leadership staffers sat down earlier Wednesday with aides to House Speaker John Boehner (R-Ohio) in their first formal meeting to discuss the way forward on funding the federal government."

The facts and figures on a government shutdown: http://wapo.st/hIm4p1

Tim Geithner says the administration wants a five-year deficit reduction deal, reports David Wessel: "Treasury Secretary Timothy Geithner on Wednesday said the Obama administration was hoping for a bipartisan deal to reduce budget deficits over the next five years or so, but stopped short of predicting an agreement could be reached this year. Staking out a position at odds with Republicans, Mr. Geithner said reducing the deficit to 3% of gross domestic product need not include restraints on benefit programs, known as entitlements...That approach would put the burden of near-term deficit reduction on economic growth, cuts in annually appropriated domestic and security spending and higher tax revenues. Republican leaders have vowed to tackle entitlement spending."

The Indiana GOP is dropping an anti-union bill, reports Thomas Burton: "The speaker of Indiana's House of Representatives said he and Republican colleagues are dropping a controversial labor bill that caused Democratic representatives to flee to Illinois, but the Democrats said they're not returning to Indiana for now. Republican House Speaker Brian Bosma said the so-called right-to-work legislation is dead and will not be reintroduced during this session of the Indiana House. Democrats felt so strongly about that bill that they went to Urbana, Ill., Tuesday so that Republicans couldn't achieve a quorum to vote on the bill. The legislation would allow workers at unionized companies to refrain from being part of the union and paying union dues...In the view of the Democrats and many union leaders, it is an attack on the existence and financial clout of unions."

The Wisconsin battle has brought the union movement together, report Kris Maher and Melanie Trottman: "Leaders of major public and private sector unions have agreed to set aside longstanding divisions and turf battles and coordinate in a campaign to counter challenges to their political and contract-bargaining power in a growing number of states. The plan requires each union to commit a certain amount of money to fund a $30 million campaign. Funds will be dedicated to paid media, lobbying, work-site leaflets, and a range of other campaign items, including opposition research into groups that unions believe could be funding state efforts to restrict union rights, such as the Koch Brothers, and the Scaife and Walton Foundations."

The Obama administration wants to force a compromise requiring banks to reduce mortgage principals, report Nick Timiraos, Dan Fitzpatrick, and Ruth Simon: "The Obama administration is trying to push through a settlement over mortgage-servicing breakdowns that could force America's largest banks to pay for reductions in loan principal worth billions of dollars. Terms of the administration's proposal include a commitment from mortgage servicers to reduce the loan balances of troubled borrowers who owe more than their homes are worth, people familiar with the matter said...If a unified settlement can be reached, some state attorneys general and federal agencies are pushing for banks to pay more than $20 billion in civil fines or to fund a comparable amount of loan modifications for distressed borrowers, these people said."

Radio session interlude: The Decemberists play "All Arise!" for NPR.

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

Still to come: Last year's foreclosure mess is nearing a resolution; states opposed to health care reform are fighting the administration's attempt to move ahead with implementation; federal agencies are updating plans for a government shutdown; Obama and green activists are in conflict on permits for renewable energy; and a corgi hangs out with a baby goat.

Economy

State and federal officials are nearing a settlement on the foreclosure mess from last year, reports Brady Dennis: "State and federal officials, who have been negotiating with financial firms over how to address widespread abuses in foreclosure practices, are moving closer to a settlement that could force banks to reduce the principal on mortgages for some borrowers who owe more than their homes are worth. An official familiar with discussions between the government and the financial industry said the settlement also could require that banks increase their efforts to modify mortgages for distressed borrowers and pay penalties that could be used as restitution for homeowners who have wrongfully faced foreclosure...Multiple state attorneys general and nearly a dozen federal agencies are involved in the discussions"

The Treasury official behind AIG's turnaround is leaving: http://wapo.st/fj8i7t

Chris Christie isn't quite the brave truth-teller he's selling himself as, writes Matt Miller. "'Look,' Gov. Chris Christie said to a packed house the other day. 'We have to get real. We're going to double the number of people on Social Security and Medicare as the boomers retire. Even with aggressive cuts in the growth of these programs, taxes are going to have to rise. We've already got trillions in unfunded liabilities here. The math doesn't work without higher federal taxes.'...Maybe you heard about this. And about how all of Washington swooned. But of course I made this up. The 'truth-teller' du jour (who unveiled a tough New Jersey budget Tuesday that sensibly asks public workers to pick up more of their health and pension costs) did not have the guts to speak this particular truth. Christie merely said that Social Security's retirement age would have to be raised and Medicare would need to be tweaked lest it bankrupt us - things that less sexy pols, such as Democrats Dick Durbin and Mark Warner, have noted without anyone fainting in admiration.

A government shutdown could backfire for Republicans, writes Jamelle Bouie: "Compared to 1995, today's GOP is far more anti-government and far more ideological than it was under Gingrich. These Republicans support deep spending cuts as a matter of conviction and appear willing to shutdown the government over their vision. With that in mind, it's worth noting how this ended for Gingrich and his Republicans. President Clinton refused to back down -- to conservative chagrin -- and the huge public outcry forced Republicans to compromise. The standoff severely damaged the GOP's credibility with the public and was partly responsible for Clinton's re-election in 1996. If we have to relive a government shutdown, then let's hope that history repeats itself for Barack Obama."

Delaying foreclosures doesn't help homeowners, writes Joseph Mason: http://on.wsj.com/gcNFpf

Global imbalances will dissipate with time, writes Jagdish Bhagwati: "Economists inevitably generalize from the current situation, so that today’s Chinese and German current-account surpluses and America’s deficit, for example, are seen as being here to stay. But history is littered with surplus countries that became deficit countries. One of my teachers when I was a student at Oxford, Donald MacDougall, a man who had once been Prime Minister Winston Churchill’s adviser, wrote a book entitled The Long-Run Dollar Problem, which suggested that the dollar was what the International Monetary Fund called a 'scarce currency.' By the time the book appeared, however, the problem had vanished."

Cold fun in the wintertime interlude: A giant snowman / slide.

Health Care

States are resisting the Obama administration's attempt to move ahead with health care reform implementation, reports Tim Grieve: "The 26 states who came out on the winning end of a federal court decision invalidating the health care reform law say an Obama administration request for clarification is nothing but 'wishful thinking.' The administration has asked U.S. District Judge Roger Vinson to clarify his order invalidating the Affordable Care Act. But in a brief filed Wednesday night, the states say the administration is effectively seeking a stay of Vinson's order - and that it hasn't met the standards for one...The states ask Vinson - who's indicated that he'll rule quickly - to 'make clear' that he 'does not mean to entertain a subsequent stay motion with the attendant further delay.'"

Under a new plan, young patients will have priority for kidney transplants: http://wapo.st/gN4DtL

All judges agree the individual mandate is not a tax, reports Julie Rovner: "So far, the five U.S. District Court judges who have ruled on the merits in the various lawsuits against the Patient Protect Act haven't agreed on much. But they do agree on one thing: The penalty for people who don't get health insurance starting in 2014 is NOT a tax. That may make things tough for the Justice Department, because arguing that the penalty IS a tax has been Plan B. It's the argument Justice will pull out of its pocket if it doesn't prevail on its main argument, which is that the requirement for most people to have health insurance falls under the 'Commerce Clause' of the Constitution. Unfortunately for Justice, legislators' active avoidance of the 'T' word during the drafting of the health law is so far working against them in court."

Half the country thinks health care reform has been repealed, or isn't sure: http://bit.ly/ekHQOS

Domestic Policy

Federal agencies and contractors are drawing up plans for a shutdown, reports Ed O'Keefe: "Federal agencies continued reviewing shutdown plans Wednesday in anticipation of a possible closure of the federal government that could begin as early as next week. Most of this week's planning probably revolves around determining which employees would need to work...A series of memos written by Attorney General Benjamin Civiletti in the closing days of Jimmy Carter's administration still dictate how agencies should make those determinations. Federal programs drawing funds from annual appropriations should continue to operate if there is a 'reasonable and articulable connection between the function to be performed and the safety of human life or the protection of property,' Civiletti wrote."

A group of law professors wants the Supreme Court to adopt a code of ethics: http://wapo.st/fKWMhk

Obama is stepping back from state union battles, reports Jonathan Weisman: "President Barack Obama, after initially lending his support to organized labor, has stepped back from the fights spreading in state capitals from Wisconsin to Tennessee, leaving union officials divided about his tactics. Democratic officials said that with Mr. Obama heading into battles over the federal budget, a plunge into the fray over public-sector collective bargaining could weaken his position as a deal-maker in Washington...For their part, many union leaders worry that White House involvement could harm their case that the protests and political actions in the capitals of Wisconsin, Ohio and Indiana are grassroots, organic movements."

Wisconsin's governor wants other governors to join him in battling unions: http://wapo.st/fCYasi

Arizona is passing yet more anti-immigration legislation, reports Jennifer Epstein: "An Arizona state Senate panel passed a pair of bills on Tuesday that would block illegal immigrants from driving, getting married or sending their kids to school and would also challenge birthright citizenship for the children of undocumented parents. The Senate’s appropriations committee became the first state Legislature panel in the country to approve a bill that would end birthright citizenship for children born in the United States to illegal immigrant parents -- a measure that, if passed, could set up a showdown that might ultimately land in the Supreme Court. It also passed another bill, which would block undocumented children from attending public or private schools and colleges and universities, bar illegal immigrants from buying or driving a car and forbid them from getting a marriage certificate in the state."

Corgis are excellent interlude: A corgi hangs out with a baby goat.

Energy

Obama and environmental activists are fighting over permits for renewable energy, reports Patrick Reis: "The Obama administration wants to double the amount of renewable power permits awarded this year but is running into a potential problem: environmentalists. Partly driven by the presidential election, the Interior Department has set a goal of approving permits for 9,000 megawatts’ worth of renewable energy on public lands by the end of 2011. That’s more than twice what Interior approved in 2010 through its Fast Track program for a dozen renewable projects. Environmental groups can ill-afford to fight forms of energy that they are promising will keep the lights on without contributing to climate change...But there is already grumbling at the margins that one side or the other isn’t holding up its end of the bargain."

The EPA is easing air pollution rules: http://wapo.st/e2balQ

Federally-backed solar projects are running into legal trouble, reports Todd Woody: "Just weeks after regulators approved the last of nine multibillion-dollar solar thermal power plants to be built in the Southern California desert, a storm of lawsuits and the resurgence of an older solar technology are clouding the future of the nascent industry. The litigation, which seeks to block construction of five of the solar thermal projects, underscores the growing risks of building large-scale renewable energy plants in environmentally delicate areas. On Jan. 25, for instance, Solar Millennium withdrew its 16-month-old license application for a 250-megawatt solar station called Ridgecrest, citing regulators’ concerns over the project’s impact on the Mohave ground squirrel."

The House GOP is using the Libya crisis to push offshore drilling: http://bit.ly/fUn4Fs

The White House unveiled a report defending a "clean energy standard", reports Ben Geman: "A White House economic report unveiled Wednesday seeks to rebut GOP claims that President Obama’s energy proposals amount to 'picking winners and losers' among energy technologies and are too costly. The energy chapter of the annual Economic Report of the President touts Obama’s proposed 'clean energy standard' (CES) that would require utilities to supply increasing amounts of power from low-carbon sources. The report delivered to Congress says a 'clean standard' would complement the White House push for increased spending on green-energy research and development (R&D) without playing favorites."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

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Feb. 24, 2011