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Newt Gingrich explains how the GOP's Obamacare tactics backfired

Ezra Klein's Wonkbook

Aug. 20, 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.

The opening session of the Republican National Committee’s Boston confab featured ex-Speaker Newt Gingrich scolding his fellow Republicans on their failure to come through on the “replace” side of “repeal-and-replace.”

“If we're going to take on the fight with Obamacare, we have to be able to explain to people what we would do to make your life better," he said.

That’s a task Republicans have clearly failed at. One of the more interesting polling wrinkles of the past few years is that the persistent unpopularity of the Democrats’ signature health-care initiative hasn’t helped the GOP take the lead on the broader issue. A recent poll by the Morning Consult found a 10 percent edge for Democrats on health care. Even the conservative polling group Rasmussen continues to find a Democratic edge.

The public doesn’t like what the Democrats did. But they really don’t like what they think the Republicans will do.

Of course, as Gingrich correctly points out, the Republicans have no idea what is it is they’ll do — save for undoing what it is the Democrats did. But for all Gingrich’s bluster on the subject, the simplest way to understand that policy vacuum is to understand Gingrich’s pre-Obamacare health-care plan: It was Obamacare.

“We should insist that everyone above a certain level buy coverage (or, if they are opposed to insurance, post a bond),” he wrote in his 2008 book, ‘Real Change.’ “Meanwhile, we should provide tax credits or subsidize private insurance for the poor."

So that’s an individual mandate plus tax subsidies to purchase insurance. That’s the core of Obamacare. And it’s no surprise Gingrich supported it. Lots of Republicans did. Gov. Mitt Romney had even signed a plan like that into law in Massachusetts.

Conservative elites had two options when Democrats began to adopt their policy ideas: Declare victory or declare war. Key figures like Gingrich could’ve stepped before the cameras and chortled about Democrats giving up on single payer and slinking towards conservative solutions. For Hillary Clinton to run in 2008 with Bob Dole’s health-care plan was an amazing moment in American politics. For Barack Obama to reverse himself on the individual mandate and embrace the Heritage Foundation’s approach to personal responsibility was further proof that Democrats had lost the war of ideas here. Republicans could have declared victory and, by engaging constructively, pushed the final product further towards their ideal.

They chose war instead. And that meant eradicating any trace of support for the policies they had come up with.

That effort was extraordinarily successful. Republicans quickly convinced themselves they had always been at war with Oceania — excuse me, the individual mandate. But plausible health-care plans are hard to come by. Even the plans that weren’t exactly like Obamacare were too similar to Obamacare for comfort. And so, five years later, even leading Republicans haven’t really come by another one. There’s a gaping hole where the party’s health-care plan is supposed to go. Of course the public doesn’t trust Republicans on the issue. Republicans don’t even know what they’d do.

"We are caught up right now in a culture — and you see it every single day — where as long as we are negative and as long as we are vicious and as long as we can tear down our opponent, we don't have to learn anything,” Gingrich said at the RNC.

But that stops short of the reality: On health care, Republicans have erected a culture in which they have to unlearn things, too. And Gingrich has been part of that effort.

Wonkbook’s Number of the Day: 60 percent. That’s the percentage of regulatory deadlines in the Dodd-Frank Act which have been missed, according to law firm Davis Polk & Wardwell LLP.

Wonkbook’s Graph of the Day: The economic gap between blacks and whites hasn't budged for 50 years.

Wonkbook’s Top 5 Stories: 1) financial regulation’s delays; 2) checking the economic pulse; 3) the surveillance debate is very, very real; 4) “replace,” but with what; and 5) Caldwell to Justice?

1) Top story: Waiting for Dodd-Frank

Obama to regulators: Get Dodd-Frank done. “Mr. Obama “stressed the need to expeditiously finish implementing the critical remaining portions of Wall Street reform to ensure we are able to prevent the type of financial harm that led to the Great Recession from ever happening again,” according to a White House statement after the meeting. Regulators have been slowed by industry lobbying, agency disagreements, budget constraints and legal challenges. Just 38.9% of the rules required by the 2010 Dodd-Frank financial law--many of which were supposed to be in place by July 2012--were finished by July 1, according to law firm Davis Polk & Wardwell LLP, and more than 60% of the law’s deadlines for rules have been missed.” Andrew Ackerman, Jamila Trindle, and Michael R. Crittenden in The Wall Street Journal.

…And Fed to banks: More capital, now. “The Federal Reserve said some of the largest U.S. banks are stumbling in efforts to assess their own potential risks and financing needs, raising the possibility that banks could be pushed to increase their capital or curtail dividends and share buybacks to satisfy regulators…Most large banks have made progress in evaluating and preparing themselves to withstand a severe economic downturn, the Fed said in a study released Monday. But it said there is “still considerable room for advancement” in the so-called stress tests run by some individual firms. The study didn’t identify any firms by name, but it is a shot across the bow from Fed officials, who have increasingly tied strong capital plans that meet the Fed’s muster to a banks’ ability to reward investors with share buybacks and dividends.” Michael R. Crittenden in The Wall Street Journal.

Did JPMorgan commit bribery by hiring the kids of Chinese politicians? “The Securities and Exchange Commission's anti-bribery unit is reportedly taking a particular look at the bank's hiring of the son of the chief of a state-controlled financial conglomerate (and former No. 2 official of China's bank regulator), and the daughter of the state-controlled China Railway Group. The investigators, it appears, are looking into whether hiring the children of high Chinese officials was a back-door way of winning business from state-controlled firms. JPMorgan, for example, handled the public offering of the China Railway Group's stock.” Neil Irwin in The Washington Post.

This graphic gets the Fed chair race exactly wrong. “The graphic suggests an open inclusive process with a neutral President Obama receiving input from an array outside experts and stakeholders. The reality is precisely the opposite: It's been a narrow process dominated by current and former White House staffers who almost all share their boss's inclination to choose Larry Summers…Missing from the graphic is pretty much everyone who is influencing the decision. Jason Furman, Obama's chief economist, is absent. So is Treasury Secretary Jack Lew. And ex-Treasury secretary Tim Geithner. And National Economics Council head Gene Sperling. And ex-CEA Chair Alan Krueger. The list goes on -- but it's almost entirely composed of people who served in this White House, and almost entirely composed of people leaning towards Summers.” Ezra Klein in The Washington Post.

HOENIG: Safe banks don’t mean slow economic growth. “A review of real-world data since 1999 on the relationship between equity and loan levels for the eight US globally systemic banks found no evidence that higher capital leads to lower loan volumes over the long run. Indeed, banks with thick capital cushions are better able to maintain lending during a crisis - a key factor influencing the speed of the recovery. The US has an opportunity to promote financial stability by making commercial banking safer. It will lead the world by doing this. It is time to compete in the global economy from a position of strength once again. The US is a market economy, and we know that capital is a source of strength, not a burden.” Thomas Hoenig in The Financial Times.

BERNSTEIN: Breaking out of a cramped economic policy debate. “Whether it's Tea Partiers opposing Medicare cuts, politicians protecting tax-advantaged investment income, or the Justice Department intervening in such a way as to preserve market competition, you'd be very hard pressed to draw neat lines between those who seek more or less intervention. When you drill down, it's usually more a matter of who wins and who loses.” Jared Bernstein in The New York Times.

Special movie recommendation interlude: Wonkbook saw Zodiac (2007) last night. Spectacular.

Top opinion

KLEIN: Why Obamacare is good for young people. “Health insurance isn't like other forms of insurance. It's not protection against the unlikely; it's insulation against the inevitable. Most people never use their fire insurance. Almost everyone uses their health insurance. Eventually. The key is that not everyone uses their health insurance at the same time, or with the same frequency. Sick people use it more than healthy people. The elderly use it more than the young. Women use it more than men.” Ezra Klein in The Washington Post.

SUNSTEIN: Are 1,000 heads better than one? “Researchers have long known that crowds can be misled if their members influence one another. But the new research goes far beyond this simple point. Lev Muchnik, a professor at Hebrew University of Jerusalem, and his colleagues used a website that aggregates stories and allows people to post comments, which can in turn be voted "up" or "down."…After seeing an initial up-vote, the first viewer became 32 percent more likely to give an up-vote himself. What's more, this effect persisted over time. After a period of five months, a single positive initial vote artificially increased the mean rating of comments by 25 percent. It also significantly increased "turnout" (the number of ratings).” Cass R. Sunstein in Bloomberg.

KINSLEY: My proposal for a national newspaper. “At one point about a decade ago, Tribune moved the Washington bureaus of all its papers into the same suite of offices. Executives promised the alarmed journalists that there were no plans to merge the bureaus, that this was just a real estate transaction. Then, of course, they merged the bureaus: a perfectly sensible thing to do. They could stop there, but the cool thing would be to merge the papers themselves, into a truly national newspaper with substantial local coverage for--when you add it up--a large part of the nation. Most of the heavy lifting, in terms of national and international coverage, would probably be supplied by Los Angeles Times journalists. But to salve sensitive egos, all of these papers could change their names to The National Tribune, or possibly The American Tribune.” Michael Kinsley in The New Republic.

PONNURU: Raising kids? Then your taxes are too high. “The tax credit for children offsets a small portion of this bias against parenting. Tax reform shouldn't scale back the child credit. It should expand it. The economist Robert Stein has suggested that for the government to be neutral with respect to the decision to have children — neither discouraging nor encouraging it — the child credit, now $1,000 a child, would have to be expanded fourfold or more. The point of the child credit isn't to get people to have kids they don't want. It isn't even primarily to make it easier for them to start families and raise larger families if they want. It's to reduce the unfair tax burden they face.” Ramesh Ponnuru in Bloomberg.

Retro interlude: The last Beatles photo shoot.

2) Checking the economic pulse

U.S. manufacturers gain ground. “The U.S. deficit on trade of manufactured goods in this year’s first half shrank to $225 billion from $227 billion a year earlier, according to data compiled by Ernest Preeg, an economist and trade expert at the Manufacturers Alliance for Productivity and Innovation, an industry-funded research group in Arlington, Va. The improvement, while slight, came after years of ballooning deficits as the U.S. lost manufacturing business to China, South Korea and other nations.” James R. Hagerty in The Wall Street Journal.

Consumer confidence slips from 6-year high. “Consumer confidence ebbed in August and residential construction rose less than expected in July, potentially dimming hopes of an acceleration in economic activity in the second half of the year. Data reported on Friday suggested that a recent jump in interest rates, in anticipation of the Federal Reserve's tapering its bond purchases as early as next month, was starting to weigh on households. The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment slipped to 80.0 from July's six-year high of 85.1. August's reading was the lowest in four months.” Reuters.

State unemployment rates show uneven recovery. “28 states and the District saw their unemployment rates rise over the last month, though the longer-term picture is rosier. Since July 2012, the unemployment rate has fallen in 36 states and the District. The monthly report released this morning shows states that were hit the hardest during the Great Recession have rebounded the fastest, though they are nowhere near pre-recession levels. ” Reid Wilson in The Washington Post.

Explainer: Are the rich getting too much of the economic pie? Derek Thompson in The Atlantic.

The architect of Walmart's D.C. defense: Obama's chief economist. “Wal-Mart spokesman Steve Restivo put out an e-mail with a two word subject line: "Jason Furman." As in, Obama's newly appointed head of the Council of Economic Advisors…Furman hasn't responded to an e-mail query on how he feels about being used as Wal-Mart's biggest talking point. But Wal-Mart's progressive opponents can't be happy.” Lydia DePillis in The Washington Post.

Government workers are grounded by deep cuts. “Most government travel budgets have been cut this year by 30 percent, the result of an administration directive forcing managers to make difficult policy decisions about whom to send, where to send them and for how long. The result, agency officials say, is a government that cannot conduct essential business and is embarrassing itself abroad…For now, thousands of employees at scores of agencies are staying put, deskbound by the shrunken travel budgets. Many workers are under orders to trade in plane reservations for car rentals and even bus tickets. The reductions are hitting all pockets of the bureaucracy, including those where travel is considered essential.” Michael D. Shear and Ron Nixon in The New York Times.

Charts: The economic gap between blacks and whites hasn't budged for 50 years. Brad Plumer in The Washington Post.

The U.S. has a $7.25 minimum wage. Australia's is $16.88. “Minimum wage advocates love to point to Australia's $16.88 an hour minimum as evidence that a very high wage floor needn't stifle a country's growth. After all, Australia hasn't had a recession in 20 years. But Australia is hardly an outlier. Most developed countries have a higher minimum wage than we do.” Dylan Matthews in The Washington Post.

Fast-food workers call for nationwide walkout Aug. 29. “Emboldened by an outpouring of support on social media, low-wage fast-food and retail workers from eight cities who have staged walkouts this year are calling for a national day of strikes Aug. 29. The workers -- who are backed by local community groups and national unions and have held one-day walkouts in cities such as New York, St. Louis and Detroit -- say they have received pledges of support from workers in dozens of cities across the country. The workers are calling for a wage of $15 an hour and the right to form a union. Organizers of the walkout say cashiers, cooks and crew members at fast-food restaurants are paid a median wage of $8.94 an hour.” Michael A. Fletcher in The Washington Post.

Arsenal doesn't want to pay more for top talent. Just like Corporate America. “Arsenal is one of the handful of clubs that competes year-in and year-out for the Premier League title. Last year it finished fourth in the league, but fans looked toward this season with big hopes: The club had a lot of money to spend to hire new star players, and its managers promised to spend it. Except, they didn't. Arsenal targeted several players but couldn't land any of them. Other teams acquired new stars, but in each case, Arsenal wasn't willing to pay the demanded price for big talent.” Jim Tankersley in The Washington Post.

Federal aid tapped by 57 percent of college students. “The share of undergraduates who used federal student aid to help pay for college jumped to 57% in 2011-12 from 47% in 2007-08, according to a report set to be released by the Education Department on Tuesday. The increase in federal loans, grants and work-study jobs coincides with the wider trend of climbing tuition costs and underscores the expanding use of federal aid for higher education across all income levels. The average federal aid amounts for undergraduates came to about $8,200 a recipient in 2011-12.” Caroline Porter in The Wall Street Journal.

Your daily inspiration interlude: Yes, you can make a success out of your emergency landing.

3) When the surveillance debate stops being polite and starts getting real

Obama administration asks Supreme Court to allow warrantless cellphone searches. “If the police arrest you, do they need a warrant to rifle through your cellphone? Courts have been split on the question. Last week the Obama administration asked the Supreme Court to resolve the issue and rule that the Fourth Amendment allows warrantless cellphone searches…[A]s the storage capacity of cellphones rises, that position could become harder to defend. Our smart phones increasingly contain everything about our digital lives: our e-mails, text messages, photographs, browser histories and more. It would be troubling if the police had the power to get all that information with no warrant merely by arresting a suspect.” Timothy B. Lee in The Washington Post.

Watch: The Washington Post’s Barton Gellman on the NSA. Ruth Tam in The Washington Post.

Roberts names judge to panel that hears rare appeals of surveillance court rulings. “Chief Justice John G. Roberts Jr. appointed a longtime federal judge to the panel that reviews rare government appeals when a special court that oversees the nation's surveillance system turns down a Justice Department request. Roberts appointed Judge Jose A. Cabranes of the U.S. Court of Appeals for the 2nd Circuit in New York to the panel, called the Foreign Intelligence Surveillance Court of Review. Cabranes, 72, was appointed to the federal bench in 1979 by President Jimmy Carter and was elevated to the circuit court in 1994 by President Bill Clinton.” Robert Barnes in The Washington Post.

David Miranda, schedule 7 and the danger that all reporters now face. “We are not there yet, but it may not be long before it will be impossible for journalists to have confidential sources. Most reporting - indeed, most human life in 2013 - leaves too much of a digital fingerprint. Those colleagues who denigrate Snowden or say reporters should trust the state to know best (many of them in the UK, oddly, on the right) may one day have a cruel awakening. One day it will be their reporting, their cause, under attack. But at least reporters now know to stay away from Heathrow transit lounges.” Alan Rusbridger in The Guardian.

No, Glenn Greenwald didn't 'vow vengeance.' He said he was going to do his job. “The Reuters report focused on Greenwald's "they will be sorry" comment and implied that Greenwald would be publishing more documents in response to the government's decision to detain his partner. Greenwald took issue with the framing, saying the Reuters report neglected to include key context, including the questions that prompted his comments” Andrea Peterson in The Washington Post.

Trains are for socialists, so superfast trains are for… interlude: Maglev in Japan.

4) The question remains, “Replace” with what?

Study: Employer mandate delay to have minor effect on Obamacare. “The Obama administration's decision to delay a requirement that employers provide their workers with health insurance "will have relatively few consequences" on the overall rollout of ObamaCare. That's the finding of a new study by the Rand Corporation, a nonprofit research organization, that looked at the effects of the administration's July decision to delay by a year a crucial provision of the healthcare reform law.” Julian Hattem in The Hill.

Gingrich: Republicans just aren’t serious on the ‘replace’ part of ‘repeal and replace.’ “Saying that most Republican lawmakers have "zero answer" for how they would replace "Obamacare," Gingrich also said, "We are caught up right now in a culture — and you see it every single day — where as long as we are negative and as long as we are vicious and as long as we can tear down our opponent, we don't have to learn anything." He termed that approach "a very deep problem." "If we're going to take on the fight with Obamacare, we have to be able to explain to people what we would do to make your life better," Gingrich, a former U.S. representative from Georgia and House speaker, later told reporters. "It can't just be going back to the world that led to Obamacare."” John McCormick in Bloomberg.

Paul Bunyan is now selling health insurance. “With just over a month left until the health insurance marketplaces launch, more and more states are going live with campaigns to convince residents to purchase coverage. The latest effort comes from Minnesota, which has turned to none other than local lumberjack hero Paul Bunyan as the face of its campaign. His enormous blue ox, Babe, will also have a starring role.” Sarah Kliff in The Washington Post.

New abortion restrictions are 0 for 8 in courts. “Four states' statutes attacked the core of the U.S. Supreme Court's rulings that a woman has a right to the procedure before a fetus is viable. Efforts to bar abortions after six, 12 and 20 weeks of pregnancy were halted in North Dakota, Arkansas and Idaho. An appeals court struck down Arizona's 20-week ban. Laws imposing restrictions on doctors were blocked in North Dakota and two other states.” Andrew Harris in Bloomberg.

What a Princess Cruise taught me about Obamacare. “[M]uch more relevant to this this article, I learned that, at least on this tiny, floating slice of America (approximate population: 3,000) there was one question about Obamacare that surfaced more frequently than any other: Is the law actually going to work?” Sarah Kliff in The Washington Post.

College interlude: Make a half court shot, get free tuition for half a year.

5) Caldwell to Justice?

Obama said to consider Caldwell for U.S. criminal chief. “Leslie Caldwell, former head of the Justice Department's Enron Task Force, has emerged as the lead candidate to become the department's criminal chief, two people with knowledge of the matter said. Caldwell, a partner at Morgan, Lewis & Bockius LLP, is in the final stages of the nomination vetting process, said the people, who asked not to be named because the selection process is confidential. They said Caldwell will likely be offered the job after the process is finished, which could be as soon as next month.” Phil Mattingly and Greg Farrell in Bloomberg.

Ken Cuccinelli isn't alone. Lots of conservatives want to shrink America's prisons. “Few people would question Ken Cuccinelli's right-wing credentials. The outspoken attorney general of Virginia, now running for governor, has staked out firmly conservative stances on everything from abortion to gay rights to transportation funding. But there's one big exception here -- crime. Cuccinelli seems to be highly skeptical of harsher sentences and endlessly expanding America's prison system, which now puts 2.4 million people behind bars. And that sets him apart from the Republicans of yesteryear.” Brad Plumer in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

The economic gap between blacks and whites hasn't budged for 50 years. Brad Plumer.

Ted Cruz is a Canadian. That's a terrible reason to prevent him from being president. Dylan Matthews.

The more sex you have, the more money you make. Lydia DePillis.

Why Obamacare is good for young people. Ezra Klein.

Ken Cuccinelli isn't alone. Lots of conservatives want to shrink America's prisons. Brad Plumer.

What a Princess Cruise taught me about Obamacare. Sarah Kliff.

Arsenal doesn't want to pay more for top talent. Just like Corporate America. Jim Tankersley.

This graphic gets the Fed Chair race exactly wrong. Ezra Klein.

Did JPMorgan commit bribery by hiring the kids of Chinese politicians? Neil Irwin.

The U.S. has a $7.25 minimum wage. Australia's is $16.88. Dylan Matthews.