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The budget battles begin

Ezra Klein's Wonkbook

March 11, 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 Numbers of the Day: 6 and 1.3. For male workers in the top half of the income distribution who retire at 65, life expectancy has risen by six years over the past three decades. But for male workers in the bottom half of the income distribution retiring at 65, life expectancy has risen by only 1.3 years. More below.

Wonkblog’s Graph of the Day: Temporary work visas issued per year and by type.

Wonkbook’s Top 5 Stories: 1) Congress moves towards a budget, and maybe a grand bargain; 2) will economic growth fizzle again?; 3) working on the guest-worker program; 4) your money or your life (expectancy) ; and 5) no data for background checks.

1) Top story: A budget, maybe — and a grand bargain, possibly

Opening bids are on the table in the next budget debate. “Congress opens a new chapter in the budget debate this week with the introduction of dueling blueprints from two lawmakers who illustrate their parties’ vastly different approaches to the role of government. Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), heads of the Senate and House budget committees, will propose budget resolutions that set tax and spending targets for the entire federal government starting Oct. 1. Their work marks an attempt to steer Congress back toward its traditional role of passing a budget each year…The blueprints, from the parties’ budget chiefs, cement how far apart Democrats and Republicans are on tax and spending policy.” Janet Hook and Kristina Peterson in The Wall Street Journal.

@ByronTau: Rep. Gardner on Obama and GOP: “I don’t think we’re going to be doing the Harlem Shake anytime together.”

Obama walks a narrow path in search of a grand bargain. “President Obama will go to Capitol Hill this week to try to salvage a big deficit-reduction deal, battling not only Republican resistance but also complaints from Democrats that he mishandled his last attempt…He plans to meet separately this week with Senate Democrats, Senate Republicans, House Democrats and House Republicans. White House officials said the consideration of budget plans by the House and Senate in coming weeks would provide a natural forum to explore what deal might be possible this year” Richard W. Stevenson and John Harwood in The New York Times.

…And here’s what Ryan wants. “The 2012 Republican vice-presidential candidate made his comments as he pitched a budget proposal that would wipe out the deficit in 10 years rather than in more than 20, as he proposed last year. He said the more ambitious timetable would "not really" require much deeper cuts than those outlined previously, because of recent events. They include a rise in tax rates for the very wealthy enacted in January, and budget sequestration that took effect this month.” David Brown and Sean Sullivan in The Washington Post.

@jbarro: Remember when Paul Ryan wanted to create a huge unfunded liability by guaranteeing a minimum return on Social Security private accounts?

Some Republicans still wary despite Obama appeals. “Republicans on Sunday expressed hope that President Obama's recent outreach to Congressional Republicans will lead to substantive negotiations, but cautioned that only time will tell whether it will…Obama is set to meet with Republican and Democratic leaders on Capitol Hill this week, as debate over the budget is set to heat up.” Sean Sullivan in The Washington Post.

…And the Senate GOP is careful. “As the White House tries to circumvent party leaders and talk to rank-and-file Republican senators, those same senators are saying they're not prepared to freelance without the buy-in from their party's leaders on a deficit-reduction package. The hesitance -- expressed by a host of senators whom Obama has personally reached out to in recent days -- underscores the steep climb for a major deficit deal despite the renewed optimism in Washington.” Manu Raju in Politico.

Lobbyists think a big deal is coming. And they’re getting ready to fight it. “An army of lobbyists has been mobilizing in the halls of Congress over recent months in anticipation of what could be a monumental struggle later this year over reforming the tax code. While the standoff over sequester spending cuts and other budget battles have been grabbing headlines, momentum has quietly been building toward a once-in-a-generation push to overhaul federal taxes, an effort that would likely affect nearly every family and business.” Jerry Markon in The Washington Post.

@mattyglesias: If only Obama had listened to Peggy Noonan & Jeff Sachs and passed a stimulus bill with infrastructure projects and green energy subsidies.

DIONNE: Is the partisan ice thawing in Washington? “Just when our politics seemed destined to freeze into a brain-dead brand of partisanship, party lines started cracking up…[I]t has been a long time since a group of Republicans said so many gracious things about Obama. My hunch is that this is the beginning of a real negotiation…The softening of party lines should not be confused with the coming triumph of a timid centrism. On the contrary, the new drone discussion has been driven by an alliance between forces well to both the right and the left of center.” E.J. Dionne in The Washington Post.

Music recommendations interlude: Mount Moriah, “The Letting Go.”

Top op-eds

KRUGMAN: Dwindling deficit disorder. “People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.” Paul Krugman in The New York Times.

CELLUCCI AND KELLY: The NAFTA approach to immigration reform. “Take the final logical step of the North American Free Trade Agreement--and allow the citizens of the U.S., Canada and Mexico to work legally in any of the three countries, making the U.S. border as open to workers as it has been for nearly two decades to goods and investment. In one market-based move, which President Obama could negotiate with America’s Nafta partners and submit to the Senate for ratification, the U.S. could solve a huge part of its immigration problem while breathing new life into North American trade.” Argeo Paul Cellucci and Stephen R. Kelly in The Wall Street Journal.

KLEIN: Revenge of the sources. “If you look at who's turning out copy for major media outlets but isn't being paid, it's not, by and large, professional journalists, or even wannabe professional journalists. The former typically won't write without pay and editors generally don't want to publish the latter. It's people who, in another world, would be sources for professional journalists. It's academics and business consultants and market analysts and former politicians. They have the expertise that makes editors -and readers -- trust them. They have good ideas for articles. They have day jobs that are happy to subsidize the time they spending working for media exposure. And they're often very good writers.” Ezra Klein in The Washington Post.

GOLDHILL: How Medicare’s low prices are inflating health costs. “Medicare has been a primary driver of the explosion of health-care costs in the United States despite -- and perhaps because of -- the low prices it pays…Faced with buyers focused on volumes -- such as private insurers -- the health-care industry prices high; when dealing with buyers focused on prices -- such as Medicare and Medicaid -- the focus shifts to raising volumes, especially of more-costly procedures.” David Goldhill in The Washington Post.

KHEMKA: Online education isn’t the future yet. “Higher education certainly needs a shake-up. In the US, it costs up to $100 per student to deliver an hour of instruction…While Moocs are unlikely to prove a silver bullet for students or universities, combining their efficiency and scalability with the credibility of a traditional university education is compelling for both.” Karan Khemka in The Financial Times.

FISHER AND ROSENBLUM: Ending too-big-to-fail. “First, we would roll back the federal safety net--deposit insurance and the Federal Reserve’s discount window--to apply only to traditional commercial banks, and not to the nonbank affiliates of bank holding companies or the parent companies themselves…Third, we recommend that the largest financial holding companies be restructured so that every one of their corporate entities is subject to a speedy bankruptcy process.” Richard Fisher and Harvey Rosenblum in The Wall Street Journal.

Baby names interlude: The name “Ezra” is more popular in the United States than at any time since at least 1880.

2) Will economic growth fizzle again?

The economy’s looking better. But it’s not smooth sailing. “At a time when every sign of economic progress seems to come with a “but,” February’s jobs report was something both welcome and rare: an unambiguously positive set of data…The question, then, isn’t whether the report was positive, but whether it signaled the start of a sustained period of healthier jobs growth. Recent history urges caution. This is the third time since the recession that hiring has accelerated; both of the previous two times, growth fizzled after a few months.” Ben Casselman in The Wall Street Journal.

Obama warns that job gains could be derailed by austerity. “Switching from the adversarial tone he has used to pressure Republican leaders in recent weeks, the president appealed to what he called the vision both parties share for the country.” Alexander Bolton in The Hill.

Explainer: Key economic data coming this week. Amrita Jayakumar in The Washington Post.

Wall St. finds all of this news very exciting. “Wall Street is hopeful that American companies, after years of gaining ground at the expense of their employees, will start to succeed because of the rising fortune of those workers. Less than a week since the Dow Jones industrial average hit its all-time high, the broader Standard & Poor's 500-stock index is on track to surpass its own 2007 high. The reason, in no small part, is because of investor confidence in the growing economic strength of American households.” Nathaniel Popper in The New York Times.

Architectural tourism interlude: The New York State Capitol, newly renovated and restored, looks stunning.

3) The problem with the guest-worker program

Senators struggle over work visas. “The little-loved visa system for low-wage temporary workers is shaping up as one of the toughest tangles facing senators in their bid to overhaul U.S. immigration laws. With just weeks until the Senate group expects to unveil its legislation in early April, work-visa programs have emerged as one of the most contentious issues…At issue are two main programs that provide a supply of temporary foreign workers to American businesses, one for agricultural laborers and one for nonagricultural workers. The talks share some of the same sticking points: how big the programs should be and how much to pay workers.” Sara Murray in The Wall Street Journal.

…But does more immigrant workers mean more risk of exploitation? “The most vocal opponents of immigration reform say it's not just the fear of losing jobs to foreign workers that fuels their cause, but also a genuine concern for the welfare of immigrants who are likely to be exploited by employers who want cheap labor to pad their bottom line. It's a concern that pro-immigration advocates say they share -- and that a new controversy over foreign student labor at McDonald's has pushed into the spotlight.” Suzy Khimm in The Washington Post.

Poetic interlude: Ever wondered what Robert Frost’s voice sounded like?

4) Your money or your life (expectancy)

Research ties economic inequality to life expectancy. “[Here's] the starkest outcome of the nation's growing economic inequality: Even as the nation's life expectancy has marched steadily upward, reaching 78.5 years in 2009, a growing body of research shows that those gains are going mostly to those at the upper end of the income ladder. The tightening economic connection to longevity has profound implications for the simmering debate about trimming the nation's entitlement programs.” Michael A. Fletcher in The Washington Post.

What your doctor isn’t telling you. “In 2007, a study in the New England Journal of Medicine found that the radiation from CT scans -- the tests regularly used to detect internal injuries or signs of cancer -- is likely responsible for 2 percent of cancer cases in the United States…There's a burgeoning movement in medicine right now to cut back on unnecessary treatment or overuse of care. Much of this has been led by a group called Choosing Wisely, which has collaborated with dozens of medical societies to come up with lists of procedures that doctors themselves don't think they ought to be using. One of their key messages is that more care isn't necessarily better; all medicine comes with some level of risk.” Sarah Kliff in The Washington Post.

AZ Gov. Jan Brewer campaigns for Medicaid expansion. “[I]n their push to win over Republicans, the governor's advisers have found that they have no single persuasive argument, and at times, no chance at all for persuasion. To make their case, they are pressing the idea that expanding Medicaid, the federal and state program that provides health care to poor and disabled people, is the best way to stabilize the state's health care system, already buckling under the weight of caring for uninsured patients. They invoke the burden borne by the insured, whose high premiums cover, in part, the cost of treatment that goes unpaid.” Fernanda Santos in The New York Times.

The link you’re going to send to everyone right now interlude: Meet Bonnie Flood, George W. Bush’s painting instructor.

5) To do background checks, we need data. We don’t have the data.

Congress wants to flesh out its mental illness data base for background checks. “Lawmakers grappling with ways to keep guns from the hands of the mentally ill are faced with a central question: How to entice states to report such cases without trampling on the Constitution?..[E]ven gun-control advocates doubt the federal government has the authority to compel states to share those records. They said Congress can provide financial incentives - both payments and penalties - to encourage such reporting. But a federal mandate would likely prove unconstitutional.” Mike Lillis in The Hill.

Gun control laws advancing in Colorado. “[T]he Democratic-controlled State Senate gave preliminary approval to a package of gun bills. At its heart are measures that would require universal background checks for private gun sales and limit ammunition magazines to 15 rounds. Other measures would create a fee for background checks; require those convicted of domestic abuse to surrender their firearms; and require residents applying for permits to carry concealed weapons to take in-person training classes, outlawing the handful of online-only courses now offered in the state.” Jack Healy in The New York Times.

…In Texas, you can actually do concealed carry in the statehouse. “Just as Texas has long embraced its guns, so has the Capitol. Legislators have walked the terrazzo hallways, attended committee hearings, met with constituents in their offices and voted on the floors of their respective chambers while armed with licensed high-powered pistols tucked beneath their suits or slipped into their boots or purses…[O]f the 181 members of the State House and Senate, dozens have concealed-carry permits and routinely have their weapons with them in the building, current and former lawmakers said. Jerry Patterson, the state land commissioner and a former senator who wrote the concealed handgun law, put the number at around 35 legislators.” Manny Fernandez in The New York Times.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Most Americans approve of foreign drone strikes. John Sides.

Can energy policy have it all: halting climate change and solving energy poverty? Brad Plumer.

Interview: Sen. Sherrod Brown on breaking up the big banks. Mike Konczal.

Revenge of the sources. Ezra Klein.

What your doctor isn’t telling you. Sarah Kliff.

Derek Khanna wants you to be able to unlock your cell phone. Ezra Klein.

Do more immigrant workers mean more potential for exploitation? Suzy Khimm.

Et Cetera

Gridiron Dinner: The White House has a copy of President Obama’s remarks.

The prediction market Intrade has shut down. Derek Thompson in The Atlantic.