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The latest push for a grand bargain

Ezra Klein's Wonkbook

March 7, 2013

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’s Number of the Day: $10.4 billion. That’s the amount in additional funding for defense programs that has been included in the House’s version of the continuing resolution. The Senate will take up the House bill soon and propose amendments. More below.

Wonkblog’s Graph of the Day: The ADP’s forecast for job creation: 198,000.

Wonkbook’s Top 5 Stories: 1) It’s official: Obama wants a grand bargain; 2) continuing resolution clears House; 3) what the ADP and the Fed can tell us about the economy; 4) background checks get stuck in gun-legislation morass; and 5) the Rand Paul filibuster and what it means on national-security policy.

1) Top story: The new push for a grand bargain

With passage of continuing resolution, Obama’s push for grand bargain gains steam. “The House took its first step to avert a government shutdown as President Obama began a series of rare meetings with Republican lawmakers on Wednesday, reviving chances for a long-term deal to reduce the federal deficit…With a government shutdown now unlikely, Obama is focusing on a new round of talks that the White House hopes could break the fiscal impasse…There appears to be a growing desire among leaders at both ends of Pennsylvania Avenue to reach an accord that has eluded them. At the dinner, Obama and the Republicans spoke about the opportunity to work together through the budget and debt ceiling debates over the next four to five months, according to attendees.” Rosalind S. Helderman and Philip Rucker in The Washington Post.

Obama’s plan: Engage with the Republicans. “While the White House is still intent on hammering House Republicans they view as unreachable, Obama increasingly sees a path out of gridlock through the Senate GOP conference, whose members want to prove their party is capable of big, meaningful bipartisan deals that belie the ‘Party of No’ label…It represents an abrupt switch from the combative tone adopted by Obama and his staff since the election.” Glenn Thrush, Carrie Budoff Brown, and Manu Raju in Politico.

Paul Ryan, Patty Murray hold the keys to any budget deal. “After two years of anxious, high-wire negotiations over the federal budget, an exhausted Washington is about to hand the mess back over to the experts: the chairmen of the House and Senate Budget committees. Over the next few weeks, Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) will roll out competing proposals for taming the national debt. If lightning strikes, both sides hold out hope that a Ryan-Murray conference committee could become the forum for litigating the partisan dispute over taxes and spending.“ Lori Montgomery in The Washington Post.

Obama’s just now starting to call rank-and-file Republicans? “These stories raise the question of why Obama hasn't been making these efforts all along. This is the fifth year of his presidency. How can it be that the White House doesn't have stronger relationships with key, non-leadership Republicans? Why is it so rare to hear he's having key Republicans over for dinner? Why is it news that he's making calls to GOP senators?” Ezra Klein in The Washington Post.

Why it won’t take much more for Ryan to balance the budget. “[H]ow can Ryan balance the budget in 10 years without adding major new spending cuts to his budget? Simple. All he needs to do is take advantage of the Congressional Budget Office's new and much-rosier deficit projections and, ironically, the fiscal cliff deal's tax increases…All this, by the way, is assuming Ryan's budget abandons sequestration. But if it holds to those targets -- which are significantly lower than what Ryan's last budget advocated -- then Ryan can easily clear the balanced-budget hurdle.” Ezra Klein in The Washington Post.

Obama went out to dinner last night with Republicans. “In a rare move, President Obama has invited a group of Senate Republicans to dine with him Wednesday evening just up the street from the White House at the Jefferson Hotel, continuing a charm offensive aimed at striking a deal on fiscal issues with rank-and-file lawmakers instead of congressional leaders. Senators and their aides confirmed that Wednesday's dinner list includes Sens. Tom Coburn (Okla.), John McCain (Ariz.), Pat Toomey (Pa.), Lindsey Graham (S.C.), Kelly Ayotte (N.H.), Dan Coats (Ind.), Bob Corker (Tenn.), John Hoeven (N.D.) and Ron Johnson (Wis.).” Ed O’Keefe in The Washington Post.

Music recommendations interlude: “Crown of Love,” Arcade Fire, 2004.

Top op-eds

KLEIN: Why we need to worry about wealth inequality. “There's a strong case to be made that what we worry about when we worry about economic inequality makes much more sense in terms of wealth than income. Take social mobility…Political power works similarly…And then there's the role of wealth in creating income inequality…This might all be cheering if the trends in wealth inequality were different than the trends in income inequality. But they're not.” Ezra Klein in The Washington Post.

DIONNE: A way out of our budget wars. “Obama's lieutenants argue that, while Republicans are aware that the president is seeking new revenue through tax reform, many did not fully grasp the extent to which he has offered significant long-term spending cuts…Senior administration officials note that Obama cannot stray too far from his existing offer, which was already a compromise, without losing the Democratic votes a deal would need. But his framework, they believe, could create a basis for negotiation with Republican senators.” E.J. Dionne in The Washington Post.

BLOW: The real sequester danger. “The lesson, as applied to our present dilemma, is that alarmism erodes credibility, but real danger can still lurk. The pain of the sequester is that kind that lurks: a slow, creeping disaster mainly affecting those Americans on the fringes who are barely inching their way back into a still-bleak job market -- or hopelessly locked out of it -- and poor Americans too old or too young to participate in it. That is how the effects should always have been framed: not as a danger to air travelers and contractors, but as a prowling danger to the most vulnerable in our flock.” Charles M. Blow in The New York Times.

SOLTAS: Why the sequestration hype was wrong. “It was hard, in the week before the sequestration took effect, to avoid the ceaseless warnings and doom-filled prophecies coming from the White House. Well, they were wrong. The sequestration won’t be devastating. It will be slow, boring, and local. That’s the message sent by the flurry of reports from federal agencies as they detail their plans to cope with their budget cuts under sequestration. One reason the effects won’t be sudden is the labor rules in the Code of Federal Regulations.” Evan Soltas in Bloomberg.

BARRO: What’s the purpose of the Ryan budget? “If you took the House Republican approach to fiscal policy and adjusted it so that it started cutting Medicare now, collected more revenue, and did not impose severe cuts in Medicaid and discretionary spending, you would be left with something much closer to President Barack Obama’s budget than Paul Ryan’s budget…It would be much easier to get Democrats to adopt the handful of good structural ideas out of Ryan’s plan than to get him to abandon the misprioritization of goals that makes his plan so ugly.” Josh Barro in Bloomberg.

COATES: The good, racist people. “In modern America we believe racism to be the property of the uniquely villainous and morally deformed, the ideology of trolls, gorgons and orcs. We believe this even when we are actually being racist…The idea that racism lives in the heart of particularly evil individuals, as opposed to the heart of a democratic society, is reinforcing to anyone who might, from time to time, find their tongue sprinting ahead of their discretion.” Ta-Nehisi Coates in The New York Times.

Dancing politicians interlude: Mitch McConnell campaign team does the Harlem Shake.

2) Continuing resolution clears House

The House passes the continuing resolution. “The House on Wednesday moved to put aside the threat of a partial government shutdown this spring, sending to the Senate a bill that funds government operations through Sept. 30, the end of the fiscal year. The legislation, approved 267-151, is necessary to keep the federal government open after current funding runs out on March 27. It would keep in place automatic spending cuts known as the sequester for all federal agencies, while giving the Defense and Veterans Affairs departments more flexibility in setting their spending priorities. The Senate is expected to take up the legislation next week. Senior Democratic aides said the Senate isn’t likely to make changes to the bill that would derail its final approval in Congress.” Corey Boles in The Wall Street Journal.

The House’s CR protects the military and national security. But not much else. “The changes include $10.4 billion more funding for defense operations and maintenance ‘to prepare our troops for combat and peace-time missions, flight time and battle training,’ according to a statement from House Appropriations Committee chairman Hal Rodgers (R-Ky.)…The House CR also would give federal agencies more leeway to protect certain defense, border security and immigration enforcement efforts from the automatic cuts.” Suzy Khimm in The Washington Post.

Explainer: How they voted on the continuing resolution. Aaron Blake in The Washington Post.

Customs and Border Protection to be one of the first issuing furlough notices. “U.S. Customs and Border Protection will issue official notice on Thursday of plans to furlough employees for up to 14 days, according to internal communications from the agency…Other cost-saving measures for Customs and Border Protection will include reducing overtime and implementing a hiring freeze.” Josh Hicks in The Washington Post.

Did Obama cry wolf on the sequester? “[T]here is some -- emphasis on some -- polling data that suggests that the lack of truly bad things happening in the wake of the sequester deadline has shifted blame from squarely on congressional GOPers to more of a split verdict…Obama's over-playing of his hand in the days leading up to the sequester have provided Republicans with an opportunity to get back on something-close-to-level ground when it comes to negotiating the shape of a bigger deal.” Chris Cillizza in The Washington Post.

Americans support spending cuts in the abstract but oppose them in practice. “The general idea of slicing government spending is popular, with majorities of Republicans, independents and Democrats all saying they support an across-the-board five percent reduction in federal outlays…The large support for cutting government spending stands in stark contrast deep public opposition to decreasing spending on particular programs…In short: the American public likes the idea of cutting federal spending; what they don't like are actual cuts in federal spending.” Jon Cohen and Sean Sullivan in The Washington Post.

Fact check: A round-up of all the claims about the sequester. Glenn Kessler in The Washington Post.

Humorous interlude: Conan O’Brien on the ‘snowquester.’

3) What ADP and the Fed tell us about the economy

ADP jobs report beats expectations. “Private-sector jobs in the U.S. increased by 198,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc…Economists surveyed by Dow Jones Newswires expected ADP to report a smaller gain of 175,000 private jobs. The January job gain was revised up to 215,000 from 192,000 reported a month ago.” Kathleen Madigan in The Wall Street Journal.

Graph: The ADP forecast versus job creation as measured by the Bureau of Labor Statistics. Brad Plumer in The Washington Post.

The Fed’s Beige Book was also filled with good news. “Stronger auto sales, better hiring and a continued housing recovery helped the American economy grow in January and February throughout the country, according to a survey released Wednesday by the Federal Reserve. The survey noted that 10 of the Fed's 12 banking districts reported moderate growth, while the Boston and Chicago districts reported slow growth. The survey, called the beige book, provided anecdotal information on economic conditions through Feb. 22.” The Associated Press.

The stock market is back. But the economy isn’t. Blame Congress. “[T]he biggest reason to discount the importance of the stock market reaching a new high is this: It hasn't been matched by a similar increase in the incomes and job prospects of Americans…As long as the central bank is the only entity in Washington doing anything to try to strengthen growth, no one should be surprised if Wall Street keeps rallying and the real economy is slow to keep up.” Neil Irwin in The Washington Post.

WonkTalk: Are happy days here again? Dylan Matthews and Neil Irwin in The Washington Post.

A housing-market recovery? Thank the immigrant family next door. “All told, the number of foreign-born homeowners in the U.S. has increased each decade since 1990. Immigrants, who represent about 13% of the U.S. population, accounted for 39% of net growth in homeowners between 2000 and 2010. They will represent 36% of that growth in the 2010-2020 span, the report projects.” Miriam Jordan in The Wall Street Journal.

Employers are very slow to hire. “The number of job openings has increased to levels not seen since the height of the financial crisis, but vacancies are staying unfilled much longer than they used to -- an average of 23 business days today compared to a low of 15 in mid-2009, according to a new measure of Labor Department data by the economists Steven J. Davis, Jason Faberman and John Haltiwanger…[F]or a large majority of positions where candidates are plentiful, the bigger problem seems to be a sort of hiring paralysis.” Catherine Rampell in The New York Times.

Meanwhile, “too-big-too-fail” is also “too-big-too-jail.” “U.S. Attorney General Eric H. Holder Jr. told lawmakers that some financial institutions have become "so large" that it makes it "difficult for us to prosecute them." Holder's admission bolsters criticisms that federal prosecutors are deeming some banks "too big to jail," a charge that lawmakers and consumer advocates have routinely made in the wake of recent bank settlements. Although the government has issued record multimillion-dollar fines in these cases, critics say without criminal charges, the agreements amount to a slap on the wrist.” Danielle Douglas in The Washington Post.

Things Wonkbook can’t do interlude: Type as fast as this guy.

4) Background checks get stuck

Push for background checks appears stalled. “An effort by Democratic senators to get significant Republican support for expanding background checks of gun purchasers has hit snags, in another sign that firearm-control legislation is likely to focus on a handful of narrower measures that enjoy bipartisan support…Broader steps--such as limiting the capacity of gun magazines or banning certain military-style semiautomatic weapons--have little support among Republicans in the Senate and face further resistance in the GOP-controlled House. Even background checks for private firearm sales such as those at gun shows--an area thought to be ripe for consensus--are proving slippery.” Kristina Peterson in The Wall Street Journal.

Schumer says gun legislation will keep moving forward. “Continued disagreements over whether to keep records of private gun sales prompted Sen. Charles E. Schumer (D-N.Y.) to move ahead Wednesday without the support of the Democrats and Republicans he's been meeting with for weeks in hopes of striking a deal to expand the national background check system, with limited exceptions…Schumer said he will reintroduce a proposal mandating background checks on all gun sales, private or commercial, on Thursday at a Senate Judiciary Committee hearing…Early on, Schumer agreed to change his original proposal to permit limited exceptions for the transfer of firearms between family members and close friends.” Ed O’Keefe and Sari Horwitz in The Washington Post.

Graham wants to restrict gun sales to the mentally ill. “Three senators potentially facing tough re-election challenges next year introduced NRA-endorsed legislation Wednesday that would bar more people from buying guns due to mental illness. The bill would add people who plead not guilty by reason of insanity to the electronic background check system that determines if someone can purchase a gun. It adds a list of additional disqualifiers, including being deemed a risk and having a court find the personally mentally disabled.” Ginger Gibson in Politico.

Math interlude: The ellipse from random points, an example of order from chaos.

5) Rand Paul’s filibuster

Rand Paul conducts talking filibuster of CIA Director nominee John Brennan. “One of the oldest and most storied traditions of the Senate made a sudden return to Capitol Hill on Wednesday when a junior senator seized control of the chamber with an hours-long filibuster involving rambling speeches aimed at blocking a vote on President Obama's choice to lead the CIA. Led by Sen. Rand Paul (R-Ky.) with help from other junior senators, the filibuster was aimed at drawing attention to deep concern on both sides of the aisle about the administration's use of unmanned aerial drones in its fight against terrorists and whether the government would ever use them in the United States.” Ed O’Keefe and John Brennan in The Washington Post.

Video: Watch highlights of Rand Paul’s filibuster. Ed O’Keefe and Aaron Blake in The Washington Post.

Another problem with Brennan? The CIA’s past support for enhanced interrogation. “Mr. Brennan, whose nomination is expected to be eventually approved by the Senate, will take charge at the agency where he worked for 25 years just as it faces a sweeping indictment of its now-defunct interrogation program -- a blistering, 6,000-page Senate study that includes incendiary accusations that agency officials for years systematically misled the White House, the Justice Department and Congress about the so-called enhanced interrogation techniques like waterboarding that were used on Qaeda prisoners. By the account of people briefed on the report, it concludes that the program was ill-conceived, sloppily managed and far less useful in obtaining intelligence than its supporters have claimed.” Scott Shane in The New York Times.

A good day for the filibuster. “This is the highest purpose of the filibuster: Allowing a passionate minority to slow down the Senate and make their case to both their colleagues and the American people. If more filibusters went like this, there'd be no reason to demand reform. And if there is reform, it needs to hold open the possibility for filibusters like this.” Ezra Klein in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Chicago’s murder rate is falling. Can that continue? Dylan Matthews.

Arkansas against Roe v. Wade. Sarah Kliff.

The case for worrying about wealth inequality. Ezra Klein.

A great day for the filibuster, and for its reformers. Ezra Klein.

House CR protects defense and national security, but not much else. Suzy Khimm.

ADP: U.S. added 198k jobs. Brad Plumer.

Better Place was supposed to revolutionize electric cars. What went wrong? Brad Plumer.

Why is Obama calling Republicans now, after five years in office? Ezra Klein.

Stock market soars. Economy still on ground. Why? Neil Irwin.

Hospitals want to delay a key Obamacare program. Sarah Kliff.