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John Boehner took on the professional right wing — and won

Dec. 13, 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: 96 percent. That's the share of Americans who say the last Congress was no better than average. 51 percent said it was one of the worst ever.

Wonkbook's Graph of the Day: Here's how unemployment insurance will soon shrink, in two simple maps.

Wonkbook's Top 5 Stories: (1) the budget deal passes the House; (2) buying time for Obamacare; (3) Fischer is the Yoda of central banking; (4) Congress won't block Iran talks; and (5) overhauling the NSA.

1. Top story: Will Republicans silence their right wing?

Boehner attacks tea party groups as House approves budget deal. "After years of placating conservative groups that repeatedly undermined his agenda, House Speaker John A. Boehner (R-Ohio) took direct aim at some of his tea party critics Thursday, accusing them of working against the interests of the Republican Party. Calling the groups "misleading" and without "credibility," Boehner pointed to the string of bipartisan deals that passed the House on its last legislative day of 2013 as the sort of "common ground" that should provide a new path for congressional work. The House voted 332 to 94 on Thursday night to approve a two-year budget outline that would reduce the chance of another government shutdown and end the cycle of crisis budgeting that has been the scourge of Washington for much of the past three years." Paul Kane and Ed O'Keefe in The Washington Post.

Roll call: How the House voted. The Washington Post.

The Republicans are falling out of love with outsider groups. "For the first time since they took back the House in 2010, a strong majority of Republicans have rejected the political absolutism encouraged by the professional right that mired Congress in gridlock for years and culminated in a government shutdown this fall. Speaker John Boehner could barely contain his glee as he knocked the outsiders for the second time in two days on Thursday afternoon...The right-wing groups say they've lost no clout. Heritage Action's Dan Holler said that the budget deal passing isn't a signal of any lessening of outside conservative groups and that they will continue their strategy." Anna Palmer and Jake Sherman in Politico.

@TheStalwart: Boehner nuking the right wing. Stanley Fischer joining the Fed. Incrementally positive things on the American policy landscape.

Why Boehner let loose. "Kevin Madden, a GOP strategist who worked on the Romney campaign, said he thinks Boehner knows that the shutdown has changed things. Republicans have improved their standing in public polls so quickly because of the disastrous rollout of the Affordable Care Act, to the point where they are back to being favored on generic congressional ballots. It's clear, Madden said, that Boehner doesn't want to risk that goodwill with another shutdown-type situation precipitated by those groups." Brett LoGiurato in Business Insider.

@samsteinhp: I can't recall Boehner being as visibly happy as he is now whacking Heritage, Club for Growth, FreedomWorks, others...

Counterpoint: Maybe Republicans aren't winning on spending, after all. "Loren Adler of the Committee for a Responsible Federal Budget argues that this is a bit simplistic. You can't just look at overall spending levels -- you also have to look at the mix of spending. Ryan's original budget wanted to increase defense spending while dramatically cutting everything else, from health to transportation to housing to environmental programs. And that's not quite where we're we've ended up. The latest budget deal struck between Ryan and Patty Murray would have far less spending on defense and far more spending on domestic programs than Ryan and the House GOP originally proposed." Brad Plumer in The Washington Post.

@j_strong: 66% of RSC members voted FOR the Ryan budget deal

SCHEIBER: Democrats won this deal. "The Murray-Ryan deal isn't really about the sequester. It's a two-year truce on fiscal self-sabotage--and, more to the point, a bet on who benefits from such a truce. Republicans believe the Obama administration (and really the entire Democratic Party) will collapse under the weight of its irredeemable health care law if we just getin through the next two years without a political catastrophe like the recent government shutdown. Democrats believe the economy will pick up momentum and solve a lot of their political problems, not to mention a good chunk of the deficit, if we can just put an end to gratuitous spending cuts while the recovery is still fragile. So the question becomes: who got the better side of this bet? And that answer to that, I think, is Democrats." Noam Scheiber in The New Republic.

BEUTLER: Who got this budget deal wrong? "It's been pretty clear since January, when Republicans once again declared the tax code off limits, and very clear since the summer, that a lowest-common-denominator budget deal was the only kind of deal this Congress could pass. But first Republicans had to abandon the fantasy that they could force Obama to make larger, unreciprocated concessions. Once the government shutdown ended, and Republican leaders had accepted the perils of deploying uncompromising tactics, it wasn't too hard to figure out where this was headed." Brian Beutler in Salon.

Music recommendations interlude: Ben Folds, "Not the Same," 2001.

Top opinion

KLEIN: Obamacare exposes Republican hypocrisy on health care. "This gets to a truth about Republican health-care policy ideas, which is that many of them are horrendously unpopular. That's not because they're bad ideas...hey're aiming at the least popular policies in the law -- which just so happen to also be the exactly policies that they support. We'll see whether Obamacare withstands the onslaught. But either way, once the assault is over, what kind of health policy will Republicans be left with? How can they propose anything that will cancel plans or raise deductibles or tighten networks? How can they propose anything at all?" Ezra Klein in The Washington Post.

CHAIT: The Heritage uncertainty principle. "Conservative health-care-policy ideas reside in an uncertain state of quasi-existence. You can describe the policies in the abstract, sometimes even in detail, but any attempt to reproduce them in physical form will cause such proposals to disappear instantly. It's not so much an issue of "hypocrisy," as Klein frames it, as a deeper metaphysical question of whether conservative health-care policies actually exist." Jonathan Chait in New York Magazine.

FELDSTEIN: Helping low-wage workers. "[H]iking the minimum wage is not the right policy to alleviate poverty. A better approach would be to integrate the existing minimum wage with current welfare transfer payments. This would lead to higher incomes for low-wage workers and increased employment...Consider a woman who receives $10,000 a year from various transfer programs but can only find occasional part-time work at the $7.25 minimum wage. Her $10,000 a year of transfer benefits is equivalent to $5 an hour based on 2,000 working hours per year. If she had the option of treating up to half of that $5 as an offset to the minimum wage--just as workers who receive tips can offset part of the minimum-wage floor because of their tip income--she could legally take any job that paid at least $4.75 an hour. If she finds a job paying $5 an hour, she might earn an extra $10,000 a year." Martin Feldstein in The Wall Street Journal.

D'ANDREA TYSON: New and old advice on the minimum wage. "For a good overview, look to a paper by Arindrajit Dube of the University of Massachusetts, Amherst; T. William Lester of the University of North Carolina, Chapel Hill; and Michael Reich of the University of California, Berkeley. Using two decades of data and side-by-side comparisons of bordering counties in the United States, they find that higher minimum wages raise the earnings of low-wage workers and have negligible effects on employment levels. According to their estimates, an increase of 10 percent in the minimum wage would have a statistically negligible effect on employment in industries and occupations employing minimum-wage workers." Laurea D'Andrea Tyson in The New York Times.

RHEE: How America is failing its kids. "Correcting for that inequity among schoolchildren is exactly what Common Core seeks to do. A student in Wyoming might have done all of her homework and even earned straight As in math but could transfer to a school in Georgia and find herself a year behind her peers in terms of what she's expected to know. Worse still, she might graduate high school and enroll in college unprepared for the demanding coursework. The result is that too many of our children are not being adequately prepared to compete in an increasingly global economy." Michelle Rhee in Politico.

Things you wouldn't think are funny but are interlude: These photos of the East German secret police.

2. Obamacare buys time

Obama administration extends state high-risk pools through January. "With some high-risk patients still struggling to gain health insurance, the Obama administration is extending a health law program that covers more than 100,000 Americans with preexisting conditions. Obama administration officials said Thursday that the state-based "high risk pools" set up in 2010 will continue to offer coverage to existing members through the end of January rather than ending at sunset on Dec. 31." Sarah Kliff in The Washington Post.

Obamacare's deadlines are changing. Again. "With deadlines fast approaching and some HealthCare.gov shoppers still stuck, the Obama administration is proposing new ways to guarantee coverage to those hoping to gain insurance in January. Health and Human Services announced Thursday some additional flexibility for those still hoping to buy coverage -- and many more steps that the agency urged, but did not require, health insurers to take. The government had previously delayed the deadline for enrolling in coverage that starts Jan. 1, moving it back from Dec. 15 to Dec. 23 after the Web site's tumultuous launch made it difficult for many to shop. While that deadline will stay the same, shoppers will now have until Dec. 31 to pay their first month's premium." Sarah Kliff in The Washington Post.

Is it a problem that Obamacare is seeing more delays than O'Hare? "Why do Republicans even bother trying to delay Obamacare? President Barack Obama's doing it all by himself...Obama's not doing the things Republicans have suggested -- push off centerpieces like the individual mandate, or even put the entire law on hold for a year. But piece by piece, the Obama administration keeps giving itself extensions on smaller parts of the law, because there's always some piece that isn't quite ready." David Nather and Joanne Kenen in Politico.

Can HealthCare.gov handle last-minute enrollments? "About 85,000 people with a history of serious illnesses, who are enrolled in high-risk insurance pools created under the health care law, will get a month's reprieve before they lose that coverage. It remains to be see whether the system can handle the inevitable, last-minute surge of customers--or whether the administration and insurers will be able to fix mistakes in applications filed in October and November, when the system was transmitting error-prone data to carriers. These and other "January 1" problems have been worrying a lot of health care advocates." Jonathan Cohn in The New Republic.

What separates the liberal from the conservative on Obamacare. "The real difference between left and right now is the "other stuff" Obamacare does to the insurance market. And what's that other stuff? It's "guaranteed issue" and "community rating"--the requirements that insurers sell to anybody, regardless of pre-existing condition, with varying rates or benefits. It's the creation of a minimum standard for coverage, so that all plans must cover at least 60 percent of the typical person's medical bills and include a set of "essential health benefits" from hospitalization to mental health to rehabilitative services to maternity care. It's the availability of generous tax credits...And it's the individual mandate...By and large, liberals support these measures, although they might quibble or have reservations with some of the specifics. Conservatives are generally skeptical." Jonathan Cohn in The New Republic.

Awesome science interlude: GIFs of violent chemical reactions.

3. Fischer is the Yoda of central banking

Stanley Fischer as economist and central banker. ". Fischer's record shows he has supported an activist central bank in the past to help the economy, even though he has expressed some skepticism about the Fed's vigorous efforts to spur growth and bring down unemployment in recent months...Mr. Fischer was one of the first central bankers to cut interest rates during the 2008 crisis. He also took the controversial step of intervening in currency markets to help Israeli exporters and build up the country's foreign-currency reserves, bolstering confidence in the economy...In one instance Mr. Fischer persuaded reluctant finance ministry officials to buy corporate bonds to ease volatile swings in Israeli corporate debt markets spurred by real estate companies with activities in distressed housing markets abroad." Jon Hilsenrath and Joshua Mitnick in The Wall Street Journal.

Young Stanley Fischer and the Keynesian counterrevolution. "During the 1970s, it gradually became orthodox among economists to regard governments as impotent in the face of recessions...Young economists like Mr. Fischer accepted that economic theories needed to be built from patterns of individual behavior. They even accepted the premise that individual behavior was rational. But they did not accept that the aggregation of rational acts would produce the best result for the community. Mr. Fischer's 1977 paper was one of the first attempts to prove this point. It rested on the idea that prices are sticky, meaning that people do not adjust the prices of goods or labor as quickly as reason would dictate. As a result, some transactions do not occur. And therefore, there is room for government to help." Binyamin Appelbaum in The New York Times.

No, holiday sales aren't a total disaster. "For the entire month of November retailers did just fine. Overall sales rose 0.7 percent over October, better than analysts had forecast. Excluding volatile autos, the number was up 0.4 percent. Exclude gasoline, autos, and building materials, all similarly volatile, and everything else was up 0.5 percent. There were particularly strong results among auto dealers (up 1.8 percent) and restaurants and bars (up 1.3 percent). Things were weaker among grocery stores (down 0.3 percent) and gasoline stations (down 1.1 percent)." Neil Irwin in The Washington Post.

This is a terrifying time to be unemployed. "About 1.3 million current beneficiaries will lose aid. Also affected are an estimated 1.9 million more who would have been eligible for the program in the first half of 2014 after their state benefits ran out. Democrats in Congress are pushing for an extension, which would cost the government an estimated $25 billion through 2014, while providing a modest lift, according to the Congressional Budget Office, to overall economic activity." Annie Lowrey in The New York Times.

Explainer: Here's how unemployment insurance will soon shrink, in two simple maps. Brad Plumer in The Washington Post.

The Fed doesn't think it's a good idea to replace dollar bills with coins. "A working assumption has been that coins would be cheaper, in the long run, for the government. They cost more to make but last much longer than paper money. The Government Accounting Office estimated the move could save $4.4 billion over the next 30 years. Others have been doubtful that such savings would materialize, as Wonkblog's Brad Plumer details here. Now, researchers at the Federal Reserve are weighing in, and they, too, find that getting rid of $1 bills entirely wouldn't be the panacea that some analysts have claimed. The most important points of the new working paper, by Michael Lambert, Shaun Ferrari and Brian Wajert, boil down to this: Coins aren't all they're cracked up to be." Neil Irwin in The Washington Post.

Maps maps maps interlude: An NY/NJ regional transit map. Can I hear a woot?

4. Congress won't block Iran talks

White House wins delay on Iran sanctions. "Lawmakers in the House and Senate will not vote on new sanctions this year, following a White House campaign to stall legislative action for at least six months while the U.S. and other nations negotiate a comprehensive deal over Tehran's nuclear program...The House had been set to vote on a sanctions resolution Friday, before leaving for winter break, but administration officials persuaded a top House Democrat to rescind his support. Senate leaders have no plans to vote on new Iran sanctions before the end of this year's legislative session." Carol E. Lee and Jay Solomon in The Wall Street Journal.

...And the White House cracked down on firms doing business in Iran. "Under pressure from Congress to demonstrate that it is not easing up on sanctions on Iran's oil sector or on its nuclear and missile programs, the Obama administration on Thursday announced an expanded list of companies and individuals that it said it would target to block their trading activities around the world." David E. Sanger and Michael R. Gordon in The New York Times.

Strange interlude: Ten Germans try to say the word "squirrel".

5. Overhauling the NSA

Presidential task force recommends NSA overhaul. "A presidential task force has drafted recommendations that constitute a sweeping overhaul of the National Security Agency, according to people familiar with the recommendations. The panel's draft proposals would change the spy agency's leadership from military to civilian and limit how it gathers and holds the electronic information of Americans. The task force, for example, proposed that the records of nearly every U.S. phone call now collected in a controversial NSA program be held instead by the phone company or a third-party organization, these people said. The panel also suggested the imposition of stricter standards before allowing NSA permission to search the data, these people said." Siobhan Gorman in The Wall Street Journal.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

96 percent of Americans think this Congress is at or below average. Ezra Klein.

The dark side of the West's oil and gas boom. Brad Plumer.

Counterpoint: Maybe Republicans aren't winning on spending, after all. Brad Plumer.

Obamacare's deadlines are changing. Again. Sarah Kliff.

The Fed doesn't think it's a good idea to replace dollar bills with coins. Neil Irwin.

Lululemon has much bigger problems than its Chairman's gaffes. Lydia DePillis.

Here's how unemployment insurance will soon shrink, in two simple maps. Brad Plumer.

Obama administration extends state high-risk pools through January. Sarah Kliff.

No, holiday sales aren't a total disaster. Neil Irwin.

Obamacare exposes Republican hypocrisy on health care. Ezra Klein.