May 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: $6.3 trillion. That’s how much a new study from the Heritage Institute and authors Robert Rector and Jason Richwine says immigration reform will cost the government on net. It’s fueling the immigration-reform debate, particularly internally among Republicans. But there are more than a few problems with that number. Much, much more on immigration below.

Wonkblog’s Graph of the Day: No, there’s no trade-off in the long run between more immigration and lower standards of living.

Wonkbook’s Top 5 Stories: 1) gun control’s second push; 2) the cost of immigration reform; 3) can we slow healthcare cost increases?; 4) the young and unemployed; and 5) natural gas exports get presidential nod.

1) Top story: Can gun control rise again?

Gun control debate may return as Republicans show new willingness to talk. “Capitol Hill aides Monday declined to identify the two Republicans who have approached Democrats about restarting the debate on the issue. But Sens. Johnny Isakson (R-Ga.) and Jeff Flake (R-Ariz.) signaled through their spokesmen that they would be open to debating the background check proposal again if Democrats make significant changes.” Ed O’Keefe and Philip Rucker in The Washington Post.

What’s changed in the fight for new gun laws? “Gun-control groups scored modest public relations victories last week as they engaged senators of both parties who voted against a bipartisan plan to expand the national gun background-check system. Activists pushed senators to explain their votes in public settings in their home states, part of a new campaign to keep the issue of gun-control alive as long as necessary -- which could mean the midterm elections in 2014.” Ed O’Keefe in The Washington Post.

@kjhealy: Give a man a gun, you get publicity for a day, local markets only. Print a man a gun, you get national publicity for maybe 48 hours.

Reid: Background checks are picking up new votes. (Sen. Ayotte might have changed her mind.) “Reid told Las Vegas Review Journal reporters that Manchin called him recently to say that he thinks he has "a couple more votes" for the legislation. The Post has learned that at least two Republican senators who voted against the bipartisan proposal have approached Democrats in recent days about possibly restarting debate on the issue, according to two senior Senate aides familiar with the talks” Rachel Weiner in The Washington Post.

Biden: Gun control will wait on immigration reform. “Vice President Joe Biden on Monday acknowledged what everyone involved in gun control has been saying privately for weeks: Any votes for expanded background checks must wait at least through the summer while the Senate debates immigration reform. Biden offered the White House timeline to a group of about 20 representatives from faith-based organizations, three people who attended the meeting told POLITICO. The vice president's words mark the first time the White House has revealed a timeline that has been widely discussed among gun control advocates and senior aides to senators who are pushing background checks.” Reid J. Epstein in Politico.

NRA, celebrating recent gains on guns, faces long-term challenges. “On the surface, the gun-rights group seems stronger than ever with tens of thousands enthusiastic participants, record high membership and effusive approval for the path taken by the its leader, Wayne LaPierre. Beneath the surface, however, some of the NRA's allies are uneasy, saying publicly and privately that the organization is facing long-term -- and even short-term -- challenges on a scale it has not faced before. Those challenges include changing demographics and patterns of gun ownership; a new willingness of gun-state lawmakers, particularly Democrats, to buck the NRA; and the rise of an organized and well-funded gun-control movement.” Tom Hamburger in The Washington Post.

BEGALA: At what cost, opposition to gun control? “Sure, the polls say 90 percent of Americans support expanded background checks. But have you ever seen anyone lose his or her seat for voting against gun control? I've seen more than I care to recall lose their seat for supporting it…Until now, for politicians from conservative states, the math on guns was simple: even if only 10 percent oppose gun safety, you can guaran-damn-tee every one of them is going to vote against you. The folks who tell pollsters they're for gun safety? Well, they may be more likely to base their vote on taxes or the deficit or party loyalty.” Paul Begala in The Daily Beast.

Music recommendations interlude: Will and The People, “The Game.”

Top op-eds

BROOKS: Beyond the fence. “[I]mmigration opponents are effectively trying to restrict the flow of conservatives into this country…[I]mmigration opponents are trying to restrict assimilation. The evidence about this is clear, too…[I]mmigration opponents are trying to restrict love affairs…[I]mmigration opponents are trying to restrict social mobility…[I]mmigration opponents are trying to restrict skills…[O]pponents of reform are trying to hold back the inevitable.” David Brooks in The New York Times.

MILBANK: No poor and huddled need apply. “Latinos have been suspicious of Republicans in part because they assume that conservatives' desire to crack down on illegal immigration may extend to legal immigration as well. Republicans invariably proclaim that they are big fans of legal immigration. But the Heritage doctrine undermines that, because it would sharply curtail Hispanic immigration -- legal and illegal alike.” Dana Milbank in The Washington Post.

KLEIN: Money played a small role in 2012 elections. “The simple fact is that if you had followed the election simply be reading stories about money in politics, then those stories -- which included a lot of very alarming quotes from people in this room -- would've led you far astray. You would've done much worse than my simple, stupid model did in June.” Ezra Klein in The Washington Post.

SOLTAS: The best safety net for the economy is a stronger one for the poor. “In a new working paper, Ricardo Reis of Columbia University and Alisdair McKay of Boston University…find that stabilizing aggregate disposable income plays a "negligible role" in stabilizing the economy as a whole. Transfer payments can indeed stabilize output, they find, but mainly through a different channel — not by changing disposable income in the aggregate, but by changing its distribution. Fiscal policy, in other words, is all about inequality…Transfer payments yield the highest amount of stabilization per dollar when focused on people who can’t effectively insure themselves against macroeconomic volatility — namely, people with little savings to draw on and limited opportunities to borrow…They also find — this is a surprise — that fiscal policy as currently designed does little to stabilize the economy.” Evan Soltas in Bloomberg.

EMANUEL: Health exchanges need to enroll young men. “There is, however, one key aspect of the exchange rollout that needs more attention: enrollment…Here is the specific problem: Insurance companies worry that young people, especially young men, already think they are invincible, and they are bewildered about the health-care reform in general and exchanges in particular. They may tune out, forego purchasing health insurance and opt to pay a penalty instead when their taxes come due. The consequence would be a disproportionate number of older and sicker people purchasing insurance, which will raise insurance premiums and, in turn, discourage more people from enrolling.” Ezekiel J. Emanuel in The Wall Street Journal.

SUNSTEIN: Buying insurance should be easy. “The first lesson is that complex forms and requirements can seriously undermine federal and state programs. Consider the Free Application for Federal Student Aid, completed by 14 million households every year. The Fafsa, as it is called, includes more than 100 questions. It is almost as long as the Internal Revenue Service's Form 1040. Evidence demonstrates that the student-aid form has had a substantial, negative effect on college attendance, merely because it is so difficult to complete.” Cass R. Sunstein in Bloomberg.

GANERIWALA: Should we give a tax break to muni bonds? “The municipal bond market has functioned effectively for much of U.S. history, and one important reason was the agreement reached between states and the federal government a century ago that the interest on these bonds would never be subject to the income tax. Tax exemption was an integral part of the debate on the adoption of the 16th Amendment, which authorized the federal government to tax income.” Manju Ganeriwala in The Wall Street Journal.

FRENKEL AND WU: Republicans should love the ‘Common Core.’ “The Republican National Committee is opposed to the Core Standards on the grounds that education is the prerogative of the states and their school districts. But this argument ignores the fact that mathematics represents objective, timeless and necessary truths. These truths apply uniformly and equally to any citizen, regardless of geographic location. Fractions mean the same thing in Iowa and Alabama as they do in California and Texas.” Edward Frenkel and Hung-Hsi Wu in The Wall Street Journal.

STEVENSON AND WOLFERS: Reinhart-Rogoff’s lesson for economists. “[P]erverse incentives have made both the narrow and the broad forms of replication exceedingly rare in economics. As a result, we don't actually know how reliable most economic studies are. Replication rarely leads to career success. "Ideas" people — those exciting scholars generating new insights into how society functions — are the stars of the profession. Those who do the grindingly difficult work of checking whether the stars' insights are actually true rarely get recognized. Who can name an economist who achieved fame through replication?” Betsey Stevenson and Justin Wolfers in Bloomberg.

Speaks for itself interlude: “The Definitive History of the Colors of Crayola.”

2) Will immigration reform really cost $6.3 trillion?

Heritage puts a $6.3T price tag on immigration reform. “The report states that legalizing current illegal immigrants would cost $9.4 trillion over a lifetime and pay just $3.1 trillion in taxes, resulting in a net cost of $6.3 trillion. And the authors of the study, Robert Rector and Jason Richwine, say that's a conservative estimate…At a press conference Monday morning, the new head of the Heritage Foundation, former senator Jim DeMint (R-S.C.), said that bill would be a huge burden and would also be unfair to legal immigrants.” Aaron Blake and David Nakamura in The Washington Post.

Read: The report, “The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer,” by Robert Rector and Jason Richwine.

…Here’s why that figure is wrong. “[D]oes the Heritage estimate hold up? Not really. They make a lot of curious methodological choices that cumulatively throw the study into question. It's likely that immigrants would pay a lot more in taxes, and need a lot less in benefits, than Heritage assumes, and that other benefits would outweigh what costs remain.” Dylan Matthews in The Washington Post.

…And some conservatives are very unhappy with Heritage for it. “Hours after Mr. Rector presented his findings at a news conference at the Heritage Foundation in Washington, Haley Barbour, a Republican leader and former governor of Mississippi, convened his own press call to dismiss the study…Grover Norquist, the conservative anti-tax crusader, has also spoken out in recent days to pre-emptively dispute Mr. Rector's claims.” Julia Preston in The New York Times.

…But these are only symptomatic of wider fissures in the Right over the issue. “Leading conservatives engaged in a bitter public fight Monday over the costs of overhauling the nation's immigration system, exposing a rift within the Republican Party days before the Senate is set to begin debating a comprehensive reform proposal…Conservative opposition helped sink a comprehensive immigration bill in 2007, but advocates contend that the politics have changed because Republicans are eager to expand their appeal to Latinos and Asian Americans in the wake of last year's election.” David Nakamura in The Washington Post.

The Heritage Foundation’s argument comes down to high school. “The Heritage Foundation is out with a new report contending that illegal immigration imposes huge costs on U.S. taxpayers. You could easily read it as a treatise on Why Every American Kid Should Finish High School (And Then Keep Going)…By the authors' own logic, that same critique applies to any American, native- or foreign-born, who drops out of high school or doesn't pursue higher education. Thus the broadest conclusions from the study aren't about immigrants. They're about the state of economic opportunity in the United States.” Jim Tankersley in The Washington Post.

How the GOP will attack immigration reform: death by many amendments. “With the committee expected to spend at least three weeks on the legislation, Republican critics could offer hundreds of amendments to try to reshape the overhaul. They include proposals that could lengthen the timeline for a pathway to citizenship and that could tamper with an already fragile deal negotiated between business and labor groups for a guest worker program. Anticipating an onslaught, Democrats are preparing a robust defense in an effort to keep the legislation largely intact. For the bipartisan group of eight senators who drafted the legislation and now hope to shepherd it through committee and onto the floor, each amendment is a potential hurdle.” Ashley Parker in The New York Times.

…But the most important amendment comes from Democrats. “The most controversial amendment -- which will come from Democrats -- will likely be one to allow U.S. citizens to sponsor a same-sex partner for a green card. Most Judiciary Democrats support the measure, but Republicans on and off the committee have warned that including it could kill the bill altogether.” Seung Min Kim in Politico.

The Gang of 8 is trying to figure out how to get a supermajority in the Senate. “Senate immigration negotiators are targeting as many as two dozen Republicans for a show-of-force majority -- which they believe may be the only way a reform bill will have the momentum to force the House to act. Reform proponents are looking for votes far beyond the usual moderate suspects to senators in conservative bastions such as Utah, Georgia and Wyoming. The senators landed on the list because they're retiring, representing agricultural states, anxious to get the issue behind the party, important to persuading skittish House Republicans or all of the above.” Carrie Budoff Brown in Politico.

…And Sens. McCain and Graham don’t want same-sex provisions in immigration reform. “Two Republican members of the Senate Gang of Eight on immigration said Monday that they won't support including provisions that would allow the bill to cover same-sex couples. Sens. John McCain of Arizona and Lindsey Graham of South Carolina told reporters that they oppose the amendment, which would allow gay Americans to sponsor their foreign-born partners for green cards.” Seung Min Kim in Politico.

Workers claim bias as farms rely on immigrants. “[A]nother group is increasingly crying foul -- Americans, mostly black, who live near the farms and say they want the field work but cannot get it because it is going to Mexicans. They contend that they are illegally discouraged from applying for work and treated shabbily by farmers who prefer the foreigners for their malleability.” Ethan Bronner in The New York Times.

Chilly interlude: What it’s like to ride an icebreaker around Antarctica.

3) Will low healthcare cost inflation persist?

Slowdown in health care costs may endure even as economy rebounds. “In a new study in Health Affairs, Michael E. Chernew of the Harvard Medical School and his co-authors estimate that rising out-of-pocket payments, like deductibles and copays, account for about 20 percent of the decline in health spending. Other major factors include lower Medicare payment rates, the less-rapid development of new medical treatments -- especially prescription drugs -- and changes in the way that insurers pay health care providers.” Annie Lowrey in The New York Times.

Debate: Does the Medicaid expansion still make sense in light of the Oregon study? The New York Times.

House to shine spotlight on Medicare payment methods. “The House Ways and Means Committee’s Health panel will take a fresh look Tuesday at replacing Medicare’s payment system for doctors. Lawmakers from both parties are pushing for a permanent replacement sometime soon, buoyed by a steep price cut from the Congressional Budget Office…The hearing begins at 10 a.m.” Sam Baker and Elise Viebeck in The Hill.

…And a new study finds that merging the coverage plan would save billions. “Combining Medicare coverage under a unified benefit could save $180 billion over 10 years while lowering out-of-pocket costs for beneficiaries, according to a new study. Researchers with the Commonwealth Fund, a non-profit research foundation, proposed a simplified Medicare program in which beneficiaries receive hospital, physician, drug and supplemental coverage in a single package. ”Medicare Essential” would lowers costs and create rewards for beneficiaries who choose efficient and high-quality medical providers, researchers said.” Elise Viebeck in The Hill.

The GOP is readying a new, major assault on Obamacare. “For the third time, Republicans are trying to make the law perhaps the biggest issue of the elections, and are preparing to exploit every problem that arises. After many unsuccessful efforts to repeal the law, the Republican-led House plans another vote soon. And Republican governors or legislatures in many states are balking at participating, leaving Washington responsible for the marketplaces.” Jackie Calmes in The New York Times.

Will Obamacare push workers into part-time? “The motivation to move even more workers into part-time positions is relatively straightforward. Employers can dodge the requirement to purchase health benefits and not pay a fine to the federal government. All of a sudden, they're off the hook for an insurance policy that, on average, costs $9,562 to provide -- and they don't have to pay a fine. We haven't seen many employers move forward with such a change. A recent survey from the Federal Reserve Bank of Minneapolis found that 4 percent of companies it surveyed had moved to a larger, part-time workforce in response to the Affordable Care Act.” Sarah Kliff in The Washington Post.

Obamacare could lower premiums in New York, new study finds. “[T]he state is actually expecting some big changes likely to lower health premiums, according to a new analysis prepared for the New York Health Benefits Exchange…[W]The health care law will shake up New York's individual market in an especially interesting way. It will require New Yorkers to purchase health coverage, a requirement that doesn't exist right now…Deloitte expects that this influx of healthier consumers into the market will mean that the average person buying her own policy will have health care costs that are 13.9 percent lower than those of the current population buying now.” Sarah Kliff in The Washington Post.

Book club interlude: Wonkblog will discuss the first section on Friday.

4) The young and unemployed

Obama to launch campaign-style jobs tour in Austin. “Obama is planning a campaign-style "Middle Class Jobs & Opportunity Tour" across the country, beginning Thursday in Austin, a magnet for new tech jobs. The push seems designed to help jump-start the president's second term… White House officials hope that Obama, by campaigning outside of Washington, can galvanize the public and pressure Congress to back his legislative agenda, including economic measures he outlined in February's State of the Union address.” Philip Rucker in The Washington Post.

Where can the young find a job? “When you look at the three regions that are doing better, you quickly notice they are among the country's best educated. According to the Census Bureau, the 10 states with the greatest share of bachelor's degree holders are, in descending order: Massachusetts, Colorado. Maryland, Connecticut, New Jersey, Virginia, Vermont, New York, New Hampshire and Minnesota. And the District of Columbia has a higher share than any state does. Many of those also have relatively high employment rates for people 25 to 34.” David Leonhardt in The New York Times.

Should Fannie and Freddie merge their mortgage bonds? “The head of the Mortgage Bankers Association on Monday called for federal policy makers to merge the mortgage-backed securities issued by Fannie Mae and Freddie Mac which would represent one of the most significant steps toward replacing the two government-controlled finance companies with something new…David Stevens, chief executive of the Mortgage Bankers Association, said at the group’s annual market conference in New York that a low interest-rate environment would be the easiest time for policy makers and the companies to work with investors to transition to a single security.” Nick Timiraos in The Wall Street Journal.

The ‘Millionaires’ Party’ and its dissidents. “If millionaires were a political party, that party would make up less than 10% of the country, but it would have a filibuster-proof super-majority in the Senate, a majority in the House, a 5-4 majority on the Supreme Court, and a man in the White House. If the Millionaires' Party ever gets its act together, watch out.” Ezra Klein in The Washington Post.

Dodd-Frank is finally being implemented. But will that be enough? “It's been three years since then and regulators are now implementing the new capital rules. However, the capital requirements are coming under increasing criticism, both for the level of capital and the way banks are allowed to calculate it. And one group in particular is demanding more action: members of the Congress who left it to the regulators in the first place.” Mike Konczal in The Washington Post.

Senate backs bill to force collection of sales tax on Internet purchases. “A bipartisan coalition in the Senate easily passed legislation on Monday to force Internet retailers to collect sales taxes for state and local governments, sending the issue to the House, where antitax forces have vowed to kill it. But the 69-to-27 vote in the Senate will give the measure significant momentum.” Jonathan Weisman in The New York Times.

Surprisingly SFW interlude: This judge, handling a case over pornography law, starts his decision off with a quotation from Star Trek. We kid you not.

5) Natural gas exports move forward

Why does Obama favor an expansion of natural gas exports? “The Financial Times reports that President Obama is likely to weigh in on the side of more exports. Why is that? Administration officials reportedly think that the trade and geopolitical benefits of increasing exports outweigh the possible downsides…The United States has been concerned for quite some time about China's chokehold on the global supply of rare-earth metals -- and has been appealing to the World Trade Organization to rule against China's various export restrictions. Those arguments sound a lot less convincing if the Department of Energy is rejecting licensing applications for natural gas exports at the same time.” Brad Plumer in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Why Sterling Cooper Draper Pryce would be a bad stock. Neil Irwin.

Heritage says immigration reform will cost $5.3 trillion. Here's why that's wrong. Dylan Matthews.

'If the Millionaires' Party ever gets its act together, watch out.' Ezra Klein.

Obamacare could lower premiums in New York, new study finds. Sarah Kliff.

We got way too excited over money in the 2012 elections. Ezra Klein.

The surprising reason why Obama favors natural-gas exports. Brad Plumer.

Dodd-Frank is finally being implemented. Will that be enough? Mike Konczal.

Will Obamacare lead to millions more part-time workers? Companies are still deciding. Sarah Kliff.

The Heritage Foundation's argument on immigration is really about high school. Jim Tankersley.

Et Cetera

Tuesday longread: “The Rise of the Machines,” by Gavin Mueller. Jacobin.

You might have wondered, “How does the CBO forecast federal expenditures and receipts?” Now you know. Congressional Budget Office.

Obama goes golfing with Republicans to spur discussion. Philip Rucker in The Washington Post.

The GOP wants to end the practice of ‘monuments to me.’ Pete Kasperowicz in The Hill.

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

Wonkbook is produced with help from Michelle Williams.

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