April 12, 2 013

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.

After a 68 to 31 vote, the Senate is now engaged in its most timeless debate: Is this watered-down, over-compromised, possibly ineffective bill better than nothing?

This time, the debate is about the gun bill. And in particular, it’s about these numbers: “In a survey from 2004, prisoners who had been locked up for gun crimes explained how they had acquired their firearms in the first place. Some 39.5 percent said ‘family or friends.’ Another 37.5 percent answered, ‘the street or black market suppliers.’”

That’s from Brad Plumer, and it cuts to the core of the issue. The Manchin/Toomey bill would extend background checks — with record keeping — to purchases at gun shows and over the internet. But “family or friends” and “the street or black market suppliers” would be exempt.

"[The proposed bill] would not require background checks for most of those transactions." Philip Cook, a criminologist at Duke University, told Plumer. "So it is a step forward, but a small step."

Would a tighter bill have much mattered, though? “The street or black market suppliers” aren’t going to submit to background checks one way or the other. Choking off their supply of guns is the only possible approach.

That’s why it’s important to remember what’s in the gun package beyond universal background checks. The Hadiya Pendleton and Nyasia Pryear-Yard Anti-Straw Purchasing and Firearms Trafficking Act, which is also being considered, would make it a felony to purchase a gun on behalf of someone else who is prohibited from owning it. The penalties range from 15 to 25 years.

In theory, this part of the package could be strong where the background checks are weak. The street has to get its guns from somewhere, after all. Someone with a clean record can buy 60 guns at a gun show and then begin selling them at a healthy mark-up on the street. With no records of the gun-show sales, and weak laws around private sales, the police have little ability to crack down on these suppliers.

The potential one-two punch of this package would be to create background checks and records for the gun show and internet sales and stiff penalties for the people who buy guns legally and then privately sell them to folks who commit crimes with them. The fact that there was a background check at the initial point of sale will help the police track the gun supplier. The fact that there are now strong laws against privately selling guns to people you have cause to believe shouldn’t have them will help police make those sorts of sales a very dangerous proposition for the seller.

The NRA, of course, wants this part of the law substantially weakened. As George Zornick explains, “they want to criminalize only straw purchases where authorities can prove the straw purchaser knew the customer wouldn't pass a background check or was going to commit a crime. Mayors Against Illegal Guns has said that's a ‘ridiculous’ standard that would keep many straw purchasers from being prosecuted.”

Not every bill that’s an improvement on the status quo is better than nothing. A law that claims to have solved a problem only to prove completely ineffective in the real world can undermine the belief that the problem can even be solved. If we expand background checks and straw purchaser regulations but do so in ways that make them ineffective, that will be taken as proof, in many quarters, that the underlying ideas, rather than the underlying law, is the problem.

This bill is already on the bubble of being too weak to really be worth it. If the NRA gets its way on the straw purchaser provisions, that may well be the tipping point.

Wonkbook’s Number of the Day: -11.5 million. That’s the change in the number of people who receive health insurance through their employer between 2000 and 2011, according to the Robert Wood Johnson Foundation. In 2000, 70 percent of Americans did; as of 2011, 60 percent do. More on health reform after Obamacare below.

Wonkblog’s Graph of the Day: Homeowners get huge favoritism, relative to renters, from Washington.

Wonkbook’s Top 5 Stories: 1) Senate begins debate on gun control; 2) the Obama budget’s echoes; 3) after Obamacare, what’s next for health reform?; 4) a bipartisan movement, or moment?; and 5) economists forecast 3.1 percent GDP growth for first quarter.

1) Top story: Welcome to the gun debate

Senate begins debate on gun legislation. “The Senate voted 68 to 31 on Thursday to begin debating legislation to curb gun violence, launching what many expect will be weeks of deliberations on the most significant proposals to overhaul the nation's gun laws in two decades…Debate will begin in earnest next week, when Reid said he will move to vote on a bipartisan agreement to extend the current background-check requirements to include any sale that takes place at a gun show or that is advertised in print or online.” Ed O’Keefe in The Washington Post.

Explainer: How they voted in the Senate. Ed O’Keefe in The Washington Post.

Explainer: Here’s what’s in the bill. George Zornick, the Nation.

How gun-policy experts grade the Senate bill. “In theory, experts say, closing [the private-sales] loophole could go a long way toward curbing gun violence in the United States…Some academics who have studied gun violence have argued that universal background checks can be an effective means of reducing crime. The checks make it much harder for high-risk groups -- from felons to domestic-violence perpetrators to the severely mentally ill -- from buying or acquiring firearms in the first place.” Brad Plumer in The Washington Post.

@pourmecoffee: DictioNRAry: Tyranny /'tir?ne/ (n) – Checking to see if purchasers are dangerous on some but not all gun sales.

How Sen. Toomey joined the background check talks: the backstory. “Toomey (R-Pa.) only emerged as a key player in recent days, but he first instructed his staff in March to reach out and determine how far along Sen. Joe Manchin III (D-W. Va.) was on a proposal to expand gun background checks to virtually all gun purchases. The process ended late Tuesday as Toomey and Manchin staffers hammered out the particulars of a deal over sandwiches from Taylor Gourmet -- a staple for Philadelphia transplants working in Washington.” Ed O’Keefe in The Washington Post.

@EJDionne: 68 Senate votes to move forward on a gun safety bill: a huge victory. Celebrate. And keep organizing. More work to be done, but this is big.

How changing political geography affects the gun debate. “The rapid growth of suburbs in historically gun-friendly states is forcing politicians to cater to the more centrist and pragmatic views of voters in subdivisions and cul-de-sacs as well as to constituents in shrinking rural hamlets where gun ownership is more of a way of life…[S]hifts can be seen in other states [like Pennsylvania] with fast-growing suburbs, including Georgia, Virginia, Arizona and Colorado.” Philip Rucker and Paul Kane in The Washington Post.

Music recommendations interlude: Ben Harper, “Diamonds on the Inside,” 2003.

Top op-eds

BROOKS: Obama budget is bold. “I generally come to celebrate, not criticize, this budget. Obama has the guts to take on special interests in his own party. He works hard to reduce inequality. He understands that entitlement programs represent a fundamental threat to the sustainability of the welfare state. He understands that politics can only work if the president transcends his base and builds a majority coalition.” David Brooks in The New York Times.

BLINDER: A high grade for the budget. “In appraising any budget, I’d emphasize four criteria: credible numbers, sensible priorities, appropriate macroeconomics, and putting spending and taxes on reasonable trajectories for the future…Lately, however, we seem to be simply obsessed with bringing down the deficit, period. Unemployment be damned. President Obama’s budget happily resists that obsession. In that respect, his budget stands head and shoulders above the House Republican budget which, by rushing to a nearly-balanced budget in just two years, practically guarantees another recession.” Alan Blinder in The Wall Street Journal.

WESSEL: Why this budget is different. “This year’s arrives after House Republicans have passed a budget outline (heavy on spending cuts) and after Senate Democrats have passed an alternative (lighter on spending cuts, heavier on tax increases). Mr. Obama steers between them, a Clintonesque attempt at “triangulation.” Past Obama budgets were so bland they didn’t even include things the president said he favored. In this year’s, the president takes a step down trails that past budgets avoided.” David Wessel in The Wall Street Journal.

SOLTAS: Why emission bonds, not a carbon tax or cap-and-trade, could be the best climate policy. “Nicolaus Tideman and Florenz Plassmann, economics professors at Virginia Tech and SUNY Binghamton respectively, have an ingenious solution. In a paper published in 2010, they say polluters should be made to buy a special 30-year, zero-interest bond from the government for every unit of pollution they emit. The government would set the principal at a reasonable upper-limit estimate of the per-unit cost of pollution. The bond’s redemption value, though, would be set in the future. Bondholders would receive what is left of the principal after subtracting the actual cost of the pollution as determined by an independent agency at the bond’s maturity.” Evan Soltas in Bloomberg.

KRUGMAN: The lust for gold. “One of the central facts about modern America is that everything is political; on the right, in particular, people choose their views about everything, from environmental science to gun safety, to suit their political prejudices. And the remarkable recent rise of "goldbuggism," in the teeth of all the evidence, shows that this politicization can influence investments as well as voting.” Paul Krugman in The New York Times.

Extraterrestrial interlude: How to cry in outer space.

2) Highlights from the Obama budget

Obama brings pitch for budget to business leaders. “Attendees included members of the Financial Services Forum, who were in Washington as part of the organization’s Spring meeting. CEOs from top financial firms including Citigroup, Goldman Sachs, Bank of America and Wells Fargo were in attendance…In comments introducing his budget on Wednesday, Obama stressed the need to improve hiring as corporate profits grew.” Justin Sink in The Hill.

The three best ideas in the Obama budget. “[P]re-K for all, or at least for almost everybody. Let's not understate how hard this will be: The evidence is clear that high-quality pre-K is perhaps the most significant investment we can make in a child's future, but making sure the pre-K is of high quality is not easy to do.” Ezra Klein in The Washington Post.

WonkTalk: The White House’s war on smoking. Sarah Kliff and Brad Plumer in The Washington Post.

…But funding pre-K with a cigarette tax hike might not work out fiscally. “In its 2014 budget, the White House is proposing to spend $66 billion over the next ten years on universal preschool. This would be paid for by increasing the federal tax on cigarettes to $1.95 a pack, which will raise $78 billion over ten years. That sounds politically appealing, but it's also not sustainable in the long run.” Brad Plumer in The Washington Post.

…Also, cigarette taxes actually have big impacts on smoking rates, especially for youth. “Researchers have conducted over 100 studies that have "clearly and consistently demonstrated that higher cigarette and other tobacco product prices reduce tobacco use," Frank Chaloupka, a professor at the University of Illinois in Chicago, writes. While tobacco is an addictive substance, demand tends to be surprisingly elastic: Price increases have reliably shown to decrease cigarette purchases…CBO data suggests that a cigarette tax is more successful at reducing tobacco use among shorter-term smokers, vs. older Americans who may have been smokers for a longer period of time.” Sarah Kliff in The Washington Post.

What chained CPI really means. “Chained-CPI does mean that Social Security beneficiaries will see their benefits cut. Imagine a person born in 1936 who retired in 2001, at age 65…Their initial benefit would have been $1,538 a month, or $18,456 a year. Under existing law, they would have gotten a series of cost-of-living adjustments (COLAs). By 2013, COLAs would have increased this person's annual benefit to $24,689.49. However, under chained CPI, it would be $23,820.19, a decrease of $869.30. That's a 3.5 percent cut in benefits.” Dylan Matthews in The Washington Post.

Why it’s so hard to compare budgets. “In an ideal world, everyone would use the same economic assumptions. For that matter, they'd use the exact same categories. But budget world is not an ideal world…[I]t shouldn't be this hard to compare basic statements of public policy. The OMB shouldn't use an adjusted baseline, the House and Senate budget committees shouldn't construct their own baselines, and they certainly shouldn't use different economic assumptions. It doesn't have to be this hard.” Dylan Matthews in The Washington Post.

Adorable animals interlude: Coffee for squirrels.

3) Health reform continues after the Affordable Care Act

Employer-based health coverage in decline, study finds. “The Robert Wood Johnson Foundation (RWJF) reported Thursday that the share of people with employer-based coverage fell from about 70 percent in 2000 to about 60 percent in 2011. These figures mean that about 11.5 million people who once received health insurance through their jobs no longer do.” Elise Viebeck in The Hill.

HHS wants $1.5B to run insurance exchanges. “Obama’s budget for the year beginning Oct. 1 seeks $1.5 billion to run exchanges in the 26 states that have refused so far to set up their own exchange, as well as the seven states that are partnering with the federal government to run an exchange. The budget also assumes that the administration will collect $450 million in user fees, such as those levied on health plans that participate in the federal exchanges. The budget request and anticipated user fees will amount to about $2 billion for the federal exchanges.” Mary Agnes Carey in Kaiser Health News.

Obamacare expanded health access. Now supporters want another bill to tackle costs. “The group released Thursday morning a five-pronged proposal that it will now begin reaching out to other health-care stakeholders. Much of it does indeed look familiar to those who have followed the health-care debate. It proposes tethering doctors' payments to value, factoring cost-effectiveness into what treatment plans cover and setting better quality metrics to measure what counts as top-notch health care.” Sarah Kliff in The Washington Post.

…And more Republicans come forward with reforms that don’t involve repeal. “Republicans on a prominent House committee proposed a series of Medicare reforms Thursday, including the much-discussed possibility of unifying the program’s deductibles for hospital and medical care…The House GOP’s premium-support proposal was noticeably absent from the document, which focused on reforming Medicare’s physician payment formula, introducing a catastrophic cap on out-of-pocket expenses, and increasing means-testing within the program.” Elise Viebeck in The Hill.

Super nerdy interlude: Nintendo a cappella.

4) A bipartisan movement, or moment?

Senators line up for bipartisan deficit effort. “Republican and Democratic senators are considering resurrecting a gang of deficit-busting lawmakers with an eye on a grand bargain with President Barack Obama…A revival of the group could see the return of veteran negotiators like Sens. Dick Durbin (D-Ill.) and Mike Johanns (R-Neb.). But they could also tap new blood like Sens. Susan Collins (R-Maine), Lamar Alexander (R-Tenn.), Johnny Iskason (R-Ga.) and Mary Landrieu (D-La.), or budget supercommittee members Rob Portman (R-Ohio) and Toomey.” Ginger Gibson in Politico.

What’s with all of this cooperation? “Lawmakers in Congress, long locked in stalemate and saddled with a “do-nothing” label, are now working across party lines on major legislation including immigration, guns and other perennially stalled issues…These bursts of bipartisanship aren’t being spearheaded by congressional leaders alone. They are fueled in large part by a wider range of junior members who are surfacing in odd-couple formations..That is a break from the top-down style of legislating that has dominated over the past two years as party leaders huddled with the president on budget deals, tax policy and other fiscal measures.” Janet Hook in The Wall Street Journal.

Senators report on second Obama dinner. “President Obama threw his second dinner party of the year for Republican senators Wednesday night, but if the first such venture in March yielded a few rounds of "Kumbaya," the second was apparently more "Hit the Road Jack."…Mr. Obama's continuing charm offensive is aimed at finding some bipartisan accord with the Senate on major deficit reduction legislation, an agreement that could isolate House Republican leaders and drive them back to the bargaining table. But the window for that so-called Grand Bargain is extremely narrow.” Jonathan Weisman in The New York Times.

The Hastert rule is being broken. “In a largely unnoticed vote on Tuesday, the House passed legislation without the support of a majority of Republicans, the fourth time in 2013 that the so-called "Hastert Rule" was broken by the majority party…Such votes are fairly rare: the most recent vote was the 36th time it has happened since 1991.” Derek Willis in The New York Times.

…But Boehner says he doesn’t care. “House Speaker John Boehner (R-Ohio) signaled Thursday that he may continue to bypass a House Republican rule that has required any legislation being voted upon to have the support of a majority of the GOP conference…He said at a news conference Thursday that he will continue to try and follow it in spirit, but also suggested he might well violate it for upcoming votes on guns, immigration and the budget."Listen: It was never a rule to begin with," Boehner said.” Aaron Blake in The Washington Post.

Urban interlude: How NYC uses its subways.

5) Economists forecast 3.1 percent growth in Q1

Why economists think weak growth in Q4 was a hiccup, not a trend. “[E]conomists in the latest Wall Street Journal forecasting survey see the economy picking up as 2013 progresses amid continued strength in the housing market and consumer resilience…The 49 respondents, not all of whom answer every question, on average estimate that GDP expanded 3.1% in the first quarter at a seasonally adjusted annual rate, up from a prior prediction of 2.2% expansion.” Phil Izzo in The Wall Street Journal.

…One reason: jobless claims are falling. “Initial claims for state unemployment benefits dropped 42,000 to a seasonally adjusted 346,000, the Labor Department said on Thursday, unwinding a jump in the previous week that appeared related to difficulties adjusting the data for seasonal variations…Economists said the jobless claims data suggested that the slowdown in job creation reflected seasonal hiring being brought forward rather than underlying weakness in the labor market.” Reuters.

…But retail sales are meh. “Retailers posted tepid sales for a second month in a row, with March blasted by cold weather and a still-uncertain consumer, much like February. Retailers were also up against strong figures from the year before…Together, the 11 retailers tracked by Thomson Reuters posted a 1.9% rise in same-store sales, or sales at stores open more than a year. The March figure fell short of an expected 2.2% increase, and was the lowest showing since late summer 2009.” Karen Talley in The Wall Street Journal.

But is easy money creating a wave of bubbles? “[T]he IMF wants to ensure that everybody is thinking about these risks. But it also doesn't see much evidence that they've become so heightened that central banks should be backing away from their policies now. "MP-plus appears to have contributed to financial stability, as intended, but risks associated with it will likely strengthen the longer it is maintained," the report said.” Neil Irwin in The Washington Post.

Fannie, Freddie extend refinancing program. “The Home Affordable Refinance Program, or HARP, allows homeowners with loans backed by the mortgage-finance companies to refinance even if they don’t have any equity. So far, more than two million homeowners have refinanced under the program. HARP had been set to expire at the end of this year, but the Federal Housing Finance Agency said Thursday that the program would now run through 2015.” Nick Timiraos in The Wall Street Journal.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Yes, Bitcoin is volatile — but it has its defenders. Brad Plumer.

Why comparing budgets is so maddeningly tough. Dylan Matthews.

 

How Obama's tobacco tax would drive down smoking rates. Sarah Kliff.

Experts grade the Senate gun bill: 'A step forward, but a small step.' Brad Plumer.

WonkTalk: The White House's war on smoking. Brad Plumer and Sarah Kliff.

Funding preschool with a cigarette tax is unsustainable. Brad Plumer.

Is easy money creating a new wave of bubbles? Neil Irwin.

Here's what chained-CPI really means: Up to $849 less for someone who retired in 2001. Dylan Matthews.

The three best ideas in Obama's budget. Ezra Klein.

Obamacare expanded health access. Now supporters want another bill to tackle costs. Sarah Kliff.

Et Cetera

Poll: Most women see workplace discrimination. Colleen McCain Nelson in The Wall Street Journal.

How House Democrats want to do immigration reform. Julia Preston and Ashley Parker in The New York Times.

The U.S. wants to move much faster on free-trade talks. Reuters.

Lawmakers question use of consultants in foreclosure review. Danielle Douglas in The Washington Post.

Antiabortion measures are gaining force among states. Juliet Eilperin in The Washington Post.

The G8 wants to craft a fuller, better response plan to climate change. Ben German in The Hill.

Hydrofracturing regulation is “imminent,” Interior Dept. says. Ben German and Zack Colman in The Hill.

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

Wonkbook is produced with help from Michelle Williams.

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