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What you need to know about the omnibus appropriations bill

Ezra Klein's Wonkbook

Jan. 14, 2014

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. Send comments, criticism, or ideas to Wonkbook at Washpost dot com. To read more by Ezra and his team, go to Wonkblog.

Wonkbook's Number of the Day: $1.1 trillion. That's the headline number for this year's omnibus appropriations bill. Wonkbook has the must-know highlights from the legislation below.

Wonkbook's Graph of the Day: How Obamacare enrollment has progressed over time, the age breakdown, and the plan-level breakdown.

Wonkbook's Top 5 Stories: (1) a summary of the 2014 omnibus; (2) few young people enrolled in Obamacare plans; (3) unemployment benefits need offset; (4) no recess appointments, no filibuster; and (5) Virginia moves towards equality for same-sex couples.

1. Top story: What you need to know about the omnibus appropriations bill

Lawmakers unveil massive $1.1 trillion spending bill in bipartisan compromise. "The spending bill puts flesh on the bones of a bipartisan budget deal struck in December, when Republicans and Democrats agreed to partially repeal sharp spending cuts known as the sequester. As a result, the Pentagon will avoid a roughly $20 billion cut set to hit on Wednesday and domestic agencies -- which have already absorbed sequester reductions -- will receive a bump up in funding of similar size." Lori Montgomery in The Washington Post.

Primary source: Here is the text of the bill. (Warning: Large PDF.)

Your best resource: See this catch-all page by Congressional Quarterly. They've broken down the omnibus into spending categories, providing news summaries, key documents, and press statements.

Summary: Who won in this spending bill? Who lost? Ed O'Keefe in The Washington Post.

The House will also vote on a three-day continuing resolution today. "To avert any threat of a shutdown, the House first will take up Tuesday a three-day extension of the current stopgap continuing resolution due to expire Wednesday. The leadership expects to move quickly next to the larger omnibus bill, and the hope is to send it on to President Barack Obama before the new deadline of Saturday, Jan. 18...Any such large omnibus -- really 12 bills in one -- is risky. But there appears to be a genuine hunger now to build on the December budget deal and not risk another government shutdown akin to last October's." David Rogers in Politico.

@StevenTDennis: Every page of the omnibus spends $2 per American on average.

U.S. posts December budget surplus of $53 billion. "Federal revenue climbed by 8% to $664.60 billion in the first three months of the latest fiscal year. Individual income and payroll taxes accounted for the bulk of the increase, largely a result of higher tax rates that kicked in during the 2013 calendar year. Spending fell 8% in the first quarter to $838.20 billion, in large part because of improving finances at Fannie Mae and Freddie Mac. The two companies paid $39.57 billion to the Treasury at the end of last year." Jeffrey Sparshott in The Wall Street Journal.

Highlights from the omnibus

Spending bill rolls back funding for controversial Obamacare programs. "The bill reduces the Prevention and Public Health (PPH) fund by $1 billion. The PPH fund was originally a $15 billion program aimed at supporting prevention and public health activities, but has suffered a handful of cuts since its inception, and has been a primary target for House Republicans attempting to dismantle portions of the law. Because the entirety of the money in the PPH fund isn't earmarked for specific activities, Republicans have called it a "slush fund" that Health and Human Services (HHS) can access without restraint." Jonathan Easley in The Hill.

@samsteinhp: under the omnibus, joe biden gets $90k in "official entertainment expenses" h/t @jbendery #boccecourt

Preschool, Head Start funding to get new emphasis in education funding. "Head Start, which provides early childhood education to children from low-income and homeless families, would receive $8.6 billion under the legislation, an increase of $612 million over enacted fiscal 2013 levels...[T]he bill would allow the Education Department and HHS to jointly administer a new $250 million competitive grant program through the end of the calendar year for states to develop or expand high-quality preschool programs for 4-year-olds from families at or below 200 percent of the poverty level." Carolyn Phenicie in Congressional Quarterly.

@ChadPergram: Size of omnibus spending bill is around 1,500 pages.

Defense is getting trimmed. "The 2014 defense appropriations bill would give the Pentagon $92.9 billion in total procurement funds, down nearly $8 billion from the 2013 amount. The Defense Department would get more than $7 billion for research and development projects, an area senior officials have been warning gets too few monies" John T. Bennett in Defense News.

@Goldfarb: First an omnibus. Then earmarks. Soon we'll be back to a functioning congress!

Omnibus spending bill blocks key Obama energy regs. "One of the more notable provisions prohibits a move by the U.S. Export-Import Bank and Overseas Private Investment Corporation to cut financing for power plants that don't curb carbon emissions...The revised environmental procedures would prevent financing for power plants unless they adopt carbon capture, allowing some flexibility with the world's poorest countries...Other energy riders in the omnibus bill include a ban on the administration's light bulb efficiency standard. Manufacturers have already started phasing in the 2007 ban on bulbs that don't meet energy efficiency standards in 2012...The bill also includes a provision ensuring that the controversial Yucca Mountain nuclear waste dump in Nevada be able to continue and be maintained for future use."Laura Barron-Lopez in The Hill.

Music recommendations interlude: The Beatles, "Taxman."

Top opinion

KLEIN: What liberals get wrong about single payer. "Yet the problem with the Affordable Care Act isn't the insurance industry. In fact, the main benefits of nationalized health care can be achieved in systems with hundreds, even thousands, of for-profit insurers...In the United States, insurers negotiate with hospitals and drug companies on their own -- and they pay more as a result. In fact, because of their weak negotiating position they frequently use whatever price Medicare is paying as a baseline and then, because they lack the power to strike a similar deal, add a percentage on top." Ezra Klein in The Washington Post.

BLINDER: How government wages war on the poor. "If it seems strange to claim that the federal government has become more anti-poor than anti-poverty, consider these recent or current policies...Emergency unemployment compensation ended for 1.3 million jobless Americans just after Christmas. Unless it is restored, as Democrats are now struggling to do, another 3.6 million will lose their benefits this year. Scaling back unemployment compensation is a highly efficient way to create more poor people. Never has the government terminated such benefits while jobs were so scarce. Last month's acclaimed bipartisan budget deal included cuts in food stamps, though not nearly as much as Republicans sought." Alan S. Blinder in The Wall Street Journal.

PONNURU: Fight poverty the conservative way. "Rubio offered three interesting ideas in his speech. The first was to modify the earned income tax credit so that more of it goes to the single and childless poor, and so that beneficiaries get a little of its value in every paycheck rather than in one lump-sum payment. The program already helps to keep people in the labor force, and Rubio's change might make it easier for beneficiaries to spend the money prudently." Ramesh Ponnuru in Bloomberg.

SCHEIBER: Here comes the anti-government left. "[D]e Blasio and Warren stand for two distinct, if overlapping, worldviews. And one is likely to be far more successful at a time of near-record distrust of government...De Blasio's rhetoric sounds more leftist, implying a relentless competition between underclass and overclass. But the substance of Warren's agenda is far more radical. She wants to upend a fundamentally corrupt system, one in which big banks and other interests have coopted the apparatus of government." Noam Scheiber in The New Republic.

COHN: Everything is not quite hunky-dory in Obamacare yet. "Story one is about people who signed up for insurance and are trying to use it. Some are showing up at drugstores, physician offices, and hospitals--only to discover that insurers don't have records of their enrollments...Story two is about whether people signing up for insurance are paying their premiums. Significant fractions are not...Story three is about small businesses and changes coming to their insurers. Most small businesses have renewed existing policies, rather than opt for new ones. But next year they won't have that option--and many will have to give up current plans." Jonathan Cohn in The New Republic.

YGLESIAS: Welfare works. "Anna Aizer, Shari Eli, Joseph Ferrie, Adriana Lleras-Muney, and a team of research assistants took a detailed look at kids who grew up in Mothers' Pension households and drew some conclusions about the long-term benefits of modest cash transfers. The program is old enough that almost all the kids whose moms received money are dead now, allowing the researchers to conclude definitively that it increased life expectancy. What's more, World War II draft records show that poor kids whose moms received pensions were substantially healthier, had more years of schooling, and earned higher incomes than similar kids whose moms didn't get pensions." Matthew Yglesias in Slate.

WEIGEL: Wait, are Republicans really saying that government can fight poverty? "[H]earing Republicans talk about poverty as a problem the government can fix by distributing money is much more radical than anything they've said about immigration...I tried to attend all of this week's poverty-o-ramas in person, and I heard a completely different melody coming from the GOP. Most of the time. Excising Cantor, who was really continuing a series of small-scale reform speeches that he's given since 2012, here's what everyone said and how new it was." David Weigel in Slate.

STIGLITZ: Advanced malaise. "A disproportionate share of the jobs now being created are low-paying - so much so that median incomes (those in the middle) continue to decline. For most Americans, there is no recovery, with 95% of the gains going to the top 1%...America's new problem is long-term unemployment, which affects nearly 40% of those without jobs, compounded by one of the poorest unemployment-insurance systems among advanced countries, with benefits normally expiring after 26 weeks." Joseph E. Stiglitz in Project Syndicate.

PLUMER: The case for an antibiotics tax. "In a recent articleTheir logic goes like this: Every time someone uses antibiotics, they increase the chance that the relevant bacteria will develop resistance to the drug. That's a cost to society that's not currently included in the market price of antibiotics. So one thing to do would be to impose a user fee on these drugs to account for this cost in The New England Journal of Medicine, economists Aidan Hollis and Ziana Ahmed suggest that a simple tax or "user fee" on antibiotics used by the livestock industry would be a far more effective way to prevent overuse of these drugs..." Brad Plumer in The Washington Post.

EICHENGREEN: A requiem for global imbalances. "The start of 2014 marks ten years since we began fretting about global imbalances, and specifically about the chronic trade and current-account imbalances of the United States and China. A decade later, we can happily declare that the era of global imbalances is over. So now is the time to draw the right lessons from that period." Barry Eichengreen in Project Syndicate.

BROOKS: The leadership revival. "How do you translate the poetry of high aspiration into the prose of effective governance? This is the common problem today. Most people go into public life for the right reasons, but government doesn't work. The quality of the people is high, but the quality of leadership is low." David Brooks in The New York Times.

Bon voyage interlude: Rep. George Miller, leading Democratic voice on education, set to retire.

2. For Obamacare, time is still young

Health-insurance sign-ups by young adults are off pace seen as key to new law's success. "According to the report, released by Health and Human Services Secretary Kathleen Sebelius, 24 percent of the nearly 2.2 million people who enrolled in the marketplaces through the end of December are between the ages of 18 and 34. One-third are 55 to 64 years old. The figures mean that the proportion of young adults is lagging behind what both government and outside health-policy analysts have said will be required for the exchanges to remain stable. Analyses have concluded that, to prevent health plans' premiums from rising and some insurers from potentially dropping out, roughly two in five Americans in the plans should be young adults." Amy Goldstein and Sandhya Somashekhar in The Washington Post.

...Why Obamacare might be alright nonetheless. "Is 24 percent of sign-ups coming in among young adults bad news for the Affordable Care Act? It is, obviously, lower than the targeted 40 percent. At the same time, it's also higher than where Massachusetts's young adult enrollment started back in 2006, when the state expanded coverage. It saw young adult enrollment steadily grow, over the course of open enrollment, to make up a larger chunk of overall sign-ups." Sarah Kliff in The Washington Post.

Graphs: How Obamacare enrollment has progressed over time, the age breakdown, and the plan-level breakdown. Haeyoun Park, Derek Watkins and Wilson Andrews in The New York Times.

CMS replaces executives who departed after HealthCare.gov troubles. "In a letter to employees, CMS Administrator Marilyn Tavenner said the agency promoted Tim Love to serve as chief operating officer and appointed Dave Nelson as its new chief information officer. Love, who previously served as CMS's No. 2 operating officer, replaces former COO Michelle Snyder, who retired in December." Josh Hicks in The Washington Post.

Obamacare's narrow networks are going to make people furious -- but they might control costs. "[This is] policy idea that's central to Obamacare's approach to controlling costs, but anathema to many health-care consumers: "Narrow networks." Just the name itself, a narrow network, sounds like a miserable, restrictive health plan that you would just as well avoid. But health-care experts love narrow networks, pointing out that they underpin some of the country's most successful health plans...Less choice in a health plan typically means lower premiums. First, the insurance plan can decide to only sign contracts with the hospitals that charge lower prices...Second, insurance plans that work with a smaller handful of providers would have more leverage to demand even lower prices from these hospitals and doctors." Sarah Kliff in The Washington Post.

Supreme Court won't look at reinstating Arizona's 20-week abortion ban. "The Supreme Court declined Monday to revive an Arizona law that prohibited most abortions after a pregnancy had reached 20 weeks. The court, as is its custom, gave no reason for declining to review a decision by the U.S. Court of Appeals for the 9th Circuit that the law was unconstitutional because it violated standards established by the justices 40 years ago in Roe v. Wade." Robert Barnes in The Washington Post.

Congratulations interlude: Rep. Sean Maloney to wed longtime partner.

3. Senate needs offset for unemployment insurance extension

A vote on unemployment benefits is expected today. "Majority Leader Harry M. Reid (D-Nev.) announced Monday afternoon that the Senate will vote Tuesday to end formal debate on the measure. He signaled that there is still no agreement between Democrats and Republicans to hold votes on several GOP amendments designed to pay for the $6.5 billion in unemployment benefits...A robust bipartisan vote of support likely would compel House Republican leaders to take up the issue. Speaker John A. Boehner (R-Ohio) has said he is willing to debate extending the benefits so long as they are paid for." Ed O'Keefe in The Washington Post.

People who have lost benefits are about to drop out of the labor force in a massive exodus. "North Carolina cut benefits last summer, and if the results were replicated nationally, then almost all 1.3 million people whose benefits expired at the start of 2014 will drop out of the labor force within months. That would reduce the labor-force participation rate a full 0.8 percentage points, to 62 percent. And since you have to search for work to count as unemployed, the unemployment rate would fall by the same amount, to 5.9 percent..[T]he false drop in the unemployment rate will also create a problem for monetary policy...[T]he rash of labor-force dropouts means that a 6.5-percent unemployment rate is no longer consistent with their objectives." Evan Soltas in Bloomberg.

Stanley Fischer saved Israel from the Great Recession. Now Janet Yellen wants him to help save the U.S. "At one of their dinners a few years ago, Federal Reserve Chairman Ben S. Bernanke looked around at some fellow titans of finance. "Do you know what everyone at this table has in common?" he mused. "They all had Stan Fischer as their thesis adviser." Stanley Fischer, who Barack Obama nominated on Friday to be Janet Yellen's vice chairman of the Federal Reserve, is one of the most accomplished economists alive." Dylan Matthews in The Washington Post.

Charts: When economic growth stopped reducing poverty, and why inequality and poverty are closely connected problems. Jared Bernstein in The New York Times.

Map: How does your state rank on the minimum wage? Jennifer Kirby in The New Republic.

Fed may restrict banks' commodities trading. "Federal Reserve officials will ask for comments on whether it should restrict the trading of physical commodities by banks, according to people familiar with the matter. The question of whether banks' trading of oil and metals is skewing markets and threatening the financial system has taken on new life in the past 12 months with critics arguing the activity should be prohibited." Gina Chon and Tom Braithwaite in The Financial Times.

Growth in largest economies could accelerate in early 2014. "According to the indicators--which are based on information available in November--economic growth is set to pick up in the U.S., U.K. and Japan, and is also likely to accelerate in the euro zone. While the currency area's recovery will continue to be led by Germany, there are also signs that France and Italy will return to growth in coming months." Paul Hannon in The Wall Street Journal.

Americans believe housing prices will rise, poll says. And they're ready for it. "[A] new survey released Monday by the New York Fed shows that the volatility in the markets [from the taper] barely made a blip in consumers' minds. The amount of uncertainty that households have over home prices remained flat through the second half of last year...There was a slightly larger impact on Americans' expectations for home prices. In June, they forecast prices would rise more than 4 percent. In December, that number was down to 3.9 percent." Ylan Q. Mui in The Washington Post.

There is no great stagnation interlude: Robots teaching themselves to walk.

4. No recess appointments, no filibuster, no problem

Senate confirms Obama's final pick to serve on key federal court. "Senators voted 55 to 43 to confirm Robert L. Wilkins to serve on the U.S. Court of Appeals for the D.C. Circuit, which is widely considered the second-most influential federal court in the nation because it handles most cases regarding White House activities and federal rules and regulations and often is a stepping stone for future Supreme Court justices...With those four picks now seated, Democratic appointees will hold a 7 to 4 majority on the bench." Ed O'Keefe in The Washington Post.

Supreme Court questions Obama's recess appointment power. "Supreme Court justices across the ideological spectrum seemed inclined Monday to find President Obama lacked the constitutional authority to make high-level government appointments at a time he said the Senate was not available to provide its advice and consent. The Constitution provides the president the ability to make such appointments when the Senate is in recess. But when Obama made appointments to the National Labor Relations Board in January 2012, the Senate was holding pro forma sessions every three days precisely to thwart the president's ability to exercise the power." Robert Barnes in The Washington Post.

Movies interlude: How 'Her' will change UI design.

5. Gay marriage is knocking on Virginia's door

Democratic Virginia lawmakers press gay rights bills. "Democratic lawmakers took up the cause at a morning news conference, backing measures repealing the state's constitutional ban on gay marriage, banning discrimination in housing, allowing civil unions, recognizing same-sex marriages from other states and banning gay conversion therapy...With the state House still dominated by Republicans and the Senate divided, it appears unlikely that Democrats will be able to roll back some of the more controversial measures passed in recent years, notably the constitutional amendment banning gay marriage. Even trying, however, could put Republicans in the vulnerable position of having to defend politically damaging positions." Rachel Weiner in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

India has eradicated polio. Dylan Matthews.

Tired of prices rising on Orbitz? Now there's a hedge. Lydia DePillis.

After years of decline, U.S. carbon emissions rose 2 percent in 2013. Brad Plumer.

One in four Obamacare enrollees are young adults. That's below the target. Sarah Kliff.

The case for an antibiotics tax. Brad Plumer.

Obamacare's narrow networks are going to make people furious -- but they might control costs. Sarah Kliff.

What liberals get wrong about single payer. Ezra Klein.

Americans believe housing prices will rise, poll says. And they're ready for it. Ylan Q. Mui.

Stanley Fischer saved Israel from the Great Recession. Now Janet Yellen wants him to help save the U.S. Dylan Matthews.

Obamacare's Spanish-language Web site is 'written in Spanglish.' Ezra Klein.