May 8, 2014

Welcome to Wonkbook, Wonkblog's morning policy news primer by Puneet Kollipara. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.

Wonkbook's Number of the Day: 26 percent and 38 percent. Those are the percentages of American 12th graders who scored below grade level on math and reading tests, respectively, in 2013.

Wonkbook's Chart of the Day: This chart shows how hospital readmission rates are declining.

Wonkbook's Top 5 Stories: (1) Burwell's Obamacare challenges; (2) what we heard from Yellen; (3) Obama's uphill climate game-change effort; (4) can the tea party bounce back?; and (5) financial-crisis lessons revisited.

1. Top story: Obama's HHS pick has a tough job ahead, but her confirmation may not be one of them

Burwell's first task? Ward off new crises. "Sylvia Mathews Burwell, President Barack Obama's nominee for U.S. health secretary, will need all her skills as a crisis manager to steer the law known as Obamacare away from troubled waters during this year's congressional election campaign. If confirmed by the Senate, her first task would be to get the upper hand on two issues that could spiral out of control for Democrats just before the November elections: rising health insurance costs and the potential for a new wave of policy cancellations for small businesses. Both issues are grist for the Republican campaign mill to win control of the Senate by making the November 4 poll a referendum on Obamacare." David Morgan in Reuters.

How the GOP will try to attack Obama's HHS pick. "There probably won't be many complaints about Burwell herself....Republican senators have signaled they will focus much of their questioning on the Patient Protection and Affordable Care Act....Republicans will question the law's impact on insurance premiums and the extent to which it has caused people with coverage to lose their plans or access to preferred doctors. In the past, Republican lawmakers also have vented frustrations over the Obama administration's unilateral changes to the law and its slow response to requests for information on enrollment and other issues." Alex Wayne in Bloomberg.

Another GOP line of attack flopped this week. "Health insurance companies say the number of people who paid their Obamacare premiums will be higher than House Republicans implied. The House Energy and Commerce Committee said last week that, based on information it received from insurers, only 67 percent of people who signed up for private coverage through Obamacare's exchanges had gone on to pay their first month's premium....But this week, in written testimony to the same committee, insurers say the 67 percent figure was premature--and that they warned the committee not to draw sweeping conclusions from the information it requested." Sam Baker in National Journal.

Background reading: Most paying up, but some duplicate enrollments. "Most of the people choosing health plans under the Affordable Care Act -- about 80 percent -- are paying their initial premiums as required for coverage to take effect, several large insurers said Tuesday on the eve of a House hearing about the law. But the health insurance industry said the total of eight million people who signed up included 'many duplicate enrollments' for consumers who tried to enroll more than once because of problems on the website." Robert Pear in The New York Times.

The GOP's Obamacare hearing didn't go so well. "The discussion was not always favorable to the healthcare law, as it touched on health plan cancellations, the potential for premium increases in 2015 and problems that still plague the back end of HealthCare.gov....But Republicans were visibly exasperated, as insurers failed to confirm certain claims about ObamaCare, such as the committee's allegation that one-third of federal exchange enrollees have not paid their first premium." Elise Viebeck in The Hill.

Video: The Obamacare website still isn't fixed. The Weekly Standard.

Hospitals are cutting down on their deadly mistakes, HHS says... "People are human, hospitals are staffed by humans, so it's no surprise that mistakes happen in hospitals. But it looks like hospitals are getting better at cutting down on their own errors. The rate of hospital-acquired conditions -- complications that develop during a patient's stay -- dropped nine percent between 2010 and 2012....That translates to 15,000 fewer deaths in hospitals, a $4.1 billion savings in avoidable costs and a total of 560,000 'patient harms' avoided in 2011 and 2012, HHS says. For reference, a Journal of Patient Safety study last year estimated anywhere between 210,000 and 400,000 hospital deaths tied to preventable harm each year." Jason Millman in The Washington Post.

...but don't be so quick to give Obamacare all the credit. "The Obama administration credited the new quality initiatives created by the federal health law. But some of the improvements in patient safety preceded that law. Even with the improvements, one out of eight patients is injured during their time in the hospital." Jordan Rau in Kaiser Health News.

Employers eye moving sickest workers to exchanges. "Can corporations shift workers with high medical costs from the company health plan into online insurance exchanges created by the Affordable Care Act? Some employers are considering it, say benefits consultants....It's unclear how many companies, if any, have moved sicker workers to exchange coverage, which became available only in January. But even a few high-risk patients could add millions of dollars in costs to those plans. The costs could be passed on to customers in the form of higher premiums and to taxpayers in the form of higher subsidy expense." Jay Hancock in NPR.

Other health care reads:

Lawmakers propose incentives for end-of-life planning. Randi Belisomo in Reuters.

Fact-check: A roundup of Obamacare attacks. Glenn Kessler in The Washington Post.

Medications cut violence among mentally ill in study. Shirley S. Wang in The Wall Street Journal.

CHAIT: Springtime for Obamacare? "I am not asking opponents of the law to abandon their philosophical opposition to national health insurance. I am not even asking them to concede that the law is certain to work generally as intended. They still have many predictions of doom that cannot be falsified for years and years to come. And some parts of the law will continue to go wrong, just as the launch of the website did. But if they truly believe the arguments they have made -- that the law not only should not but cannot work -- shouldn't they be expressing, at minimum, some serious doubts?" Jonathan Chait in New York Magazine.

HILTZIK: The insurers speak. "Things continue to get tough for the Obamacare dead-enders, those increasingly lonely opponents whose only comeback against the flow of good news about the Affordable Care Act is to conjure up absurd arguments against it...or, if all else fails, make stuff up....The committee, fans will recall, recently issued an utterly bogus report claiming that of all enrollees on the federal ACA website, only 67% had paid their first month's premiums. That's important because health insurance coverage isn't official until the first payment is made.... The committee, vowing to get to the bottom of things, called the insurers to testify. Almost unanimously, they told the commitee: You're all wet." Michael Hiltzik in the Los Angeles Times.

P. KLEIN: Will Romneycare's benefits apply to Obamacare? "It will take many future studies of the implementation of Obamacare to determine whether the nation as a whole can achieve the type of reduction in mortality that the authors detected in Massachusetts. But, no doubt, the Massachusetts study offers the most compelling evidence to date that increasing health insurance coverage translates into fewer deaths....It's important to note, however, that this doesn't answer the broader philosophical questions concerning whether the federal government has a role in guaranteeing access to health coverage or whether the goal of expanding insurance justifies infringing on personal liberty." Philip Klein in the Washington Examiner.

COHN: The non-payment non-story. "All that fuss about people not paying their Obamacare premiums? It's looking more and more like a non-story....It's true that the Administration hadn't released such data. But it was also true that complete data wasn't yet available--as the House committee report made very clear....Republicans have had plenty of chances to embarrass Democrats over Obamcare and, given the law's very real shortcomings, they'll be sure to have plenty more. But on Wednesday, it seems, Republicans mostly succeeded in embarrassing themselves." Jonathan Cohn in The New Republic.

ROY: Romneycare improved health outcomes -- thanks to private-sector coverage. "The left has systematically ignored the mountains of clinical evidence showing that the Medicaid program doesn't actually make people healthier. Given that Obamacare is designed to achieve half of its coverage expansion via Medicaid, you can understand why: if Medicaid doesn't make people healthier, a significant chunk of Obamacare is wasted money. But the other chunk of Obamacare--the one that expands coverage using subsidized private-sector coverage--could indeed have an impact on health outcomes." Avik Roy in Forbes.

Top opinion

SAMUELSON: The disturbing decline in Americans' mobility. "In 2013, only 11.7 percent of Americans had moved in the previous year, with 7.5 percent staying in the same county and 2.3 percent remaining in the same state. A mere 1.6 percent left for a different state. These changes began in the late 1980s and seem to have accelerated in the 2000s. Aside from a general couch-potato attitude -- a reluctance to move -- many theories have been advanced to explain this shift....They're mostly wrong, argues a new study....A better explanation, they assert, is the job market. Jobs do cause people to move, but jobs are not as plentiful as before and wage premiums are lower. So people move less." Robert J. Samuelson in The Washington Post.

THE FINANCIAL TIMES: Obama's Keystone XL climate conundrum. "Unfortunately, US environmentalists are fixated with stopping the Keystone XL pipeline -- a decision Mr Obama keeps postponing. In reality, Canadian oil sands will still arrive in the US by road and rail, and be exported to China and other markets. Mr Obama should approve the pipeline. But he should make it clear there will be an escalating cost to consumption of oil sands and other carbon-intensive fuels. The White House lacks the power to set up a carbon market in the US....But the more Mr Obama acts as though a carbon market is inevitable, the sooner it is likely to happen." Editorial Board.

CASSELMAN: How boomers' retirements will affect the economy. "The recession may have delayed the inevitable for a time. The financial crisis wiped away billions in retirement savings, forcing many Americans to work longer than planned. But the stock market has since rebounded, and there are signs that more Americans are at last feeling confident enough to leave the workforce. The labor force participation rate for older Americans -- the share of those 55 and older who are working or actively looking for work -- has fallen over the past year after rising through the recession and early years of the recovery. Roughly 17 percent of baby boomers now report that they are retired, up from 10 percent in 2010. Now that the wave has begun, nothing is likely to stop it." Ben Casselman in FiveThirtyEight.

LANE: The jury is out on mass incarceration. "Though the U.S. prison population of 1.5 million in 2012 was far larger than that of any other country, both in absolute terms and as a percentage of population, the era of ever-increasing 'mass incarceration' is ending. The number of state and federal inmates peaked in 2009 and has shrunk consistently thereafter, according to the Justice Department. New prison admissions have fallen annually since 2005....This is not, however, the impression one would get from a new 464-page report from the prestigious National Research Council, which, like other think-tank output and media coverage of late, downplays recent progress in favor of a scarier but outdated narrative." Charles Lane in The Washington Post.

'Sesame Street' interlude: Cookie Monster in "The Cookie of Oz."

2. What we found out from Yellen's latest comments

Yellen hopeful on economic growth but cites housing risks. "Janet L. Yellen, the Federal Reserve chairwoman, told Congress on Wednesday that the economy was growing at a decent rate and that the Fed intended to continue the stimulus campaign that it considered at least partly responsible. Central bankers are paid to worry, and Ms. Yellen also delivered a laundry list of things that could go wrong: The housing recovery has stalled, geopolitical tensions are rising, some asset prices are perhaps a little too high. But the overall tenor of her testimony was upbeat. The economy, she said, is shaking off a grim winter. The labor market is slowly improving." Binyamin Appelbaum in The New York Times.

Primary source: Yellen's testimony.

@morningmoneyben: Shorter Yellen: Still thinks econ will improve but increasingly worried about drag from slowing housing market.

Explainers:

The 4 big messages from Yellen's testimony. Matt O'Brien in The Washington Post.

All you need to know about Fed policy in 3 questions. David Wessel in The Wall Street Journal.

Citing unemployment and inflation, Yellen says Fed won't lift pedal from gas just yet. "'A high degree of monetary accommodation remains warranted,' Yellen said....'Many Americans who want a job are still unemployed,' and inflation is below the central bank's 2 percent target, she said. Yellen highlighted weaknesses in the labor market, such as the number of long-term unemployed, even as the economic outlook improves." Jeff Kearns and Craig Torres in Bloomberg.

@BCAppelbaum: Yellen is repeatedly declining invitations to repeat her "six months" definition of "considerable time."

Yellen also worries that Ukraine crisis may weigh on U.S. economy. "While she offered few new clues on the direction of interest rates, Yellen broke ground in outlining the risks facing the economic recovery. Her mention of geopolitical tensions as a 'prominent risk' suggested the Fed was worried the Ukrainian conflict could weigh on the U.S. economy, while her assessment of housing signaled the sector's slowdown was also a gnawing concern." Michael Flaherty in Reuters.

@BCAppelbaum: Must be election season. Congress has stopped asking Yellen to be nice to insurance companies. Today it's all inflation and unemployment.

The Fed probably isn't too worried about the drop in productivity. "U.S. nonfarm productivity fell at its fastest pace in a year in the first quarter as harsh winter weather restrained output, leading to a jump in labor-related production costs. The drop in productivity, which mirrored a sharp decline in economic growth, is temporary and Federal Reserve officials are likely to shrug off the spike in labor costs, analysts said....Productivity declined at a 1.7 percent annual rate, the biggest drop since the first quarter of 2013, the Labor Department said on Wednesday." Lucia Mutikani in Reuters.

It's just one survey, but... "Gallup's U.S. Job Creation Index continued to climb to +25 in April from +23 in March. The index in April is one point shy of the all-time high found in January 2008, the first month Gallup began tracking hiring daily. The index is based on employee reports of hiring and layoffs at their workplaces." Rebecca Riffkin in Gallup.

Other economic reads:

Did the U.S. economy just turn negative? Matthew Philips in Bloomberg Businessweek.

Long read: Manufacturing's comeback -- Numbers fabricate complicated-yet-rosy outlook. David Harrison in Roll Call.

Political sparring over unemployment insurance reaches new high. Sarah Mimms in National Journal.

How the jobs report paints an overly rosy picture of the labor force. Breanna Deutsch in The Daily Caller.

Feel-good story interlude: A homeless man gets a home.

3. Can Obama change the game on climate?

Obama climate change push faces lukewarm public. "In releasing the report, Mr. Obama has argued for urgency, which he is expected to do again in a speech Friday. Facing dim prospects for legislation on Capitol Hill, the president is asking people to pressure Washington to act on climate change....But a raft of polls shows that the president faces a steep challenge. While most people say there is evidence that the Earth is warming, climate change consistently ranks near the bottom when voters are asked to assess public-policy priorities." Colleen McCain Nelson in The Wall Street Journal.

Video: Obama heats up climate debate. Gerald Seib in The Wall Street Journal.

Chart: On climate, Republicans and Democrats are from different continents. David Leonhardt in The New York Times.

How the president hopes his TV effort will change things. "The broadcast blitzkrieg, dubbed Weather from the White House, is designed to highlight the new National Climate Assessment. The Administration calls it the loudest alarm bell to date about the way heat-trapping gases are already re-shaping weather patterns around the country....Polls suggest for now that support is tepid at best. When NBC and the Wall Street Journal asked Americans to rank 15 possible priorities for the government this year, climate change was dead last. Democratic political consultant Chris Lehane says in trying to change that, the administration is wise to bring the issue to people's doorsteps." Scott Horsley in NPR.

Obama's biggest climate-related decision may not be Keystone XL. "Lehane has been active in one of the most high-profile climate fights: the battle over the proposed Keystone XL pipeline, which would carry oil from the Canadian tar sands to the Gulf Coast. Opposition to Keystone has become a rallying cry for some climate activists. But former White House climate advisor Jason Bordoff says it's not the biggest policy decision facing the administration....By far the biggest dent would come from new EPA rules aimed at limiting pollution from coal-fired power plants." Scott Horsley in NPR.

Obama can't hold out much longer on those coal-related rules. "Within weeks, President Barack Obama's administration is set to unveil unprecedented emissions limits on power plants across the U.S., much to the dismay of many Democratic candidates who are running for election in energy-producing states. Fearful of a political backlash, they wish their fellow Democrat in the White House would hold off until after the voting. But Obama can't wait that long." Josh Lederman in the Associated Press.

The prospects for the Senate's Keystone XL push look increasingly grim. "The possibility of a vote was always unclear and depended on whether Democrats and Republicans could reach agreement over amendments to an energy bill that had been moving in tandem with the Keystone bill. But as the week wore on and Majority Leader Harry Reid admitted to changing his opposition to a vote, the chances that a vote would occur seemed favorable. That changed Wednesday afternoon." Michael Catalini in National Journal.

The GOP's strategy in the amendments spat: electoral gains. "Senate Republicans want to vote on energy proposals that could bolster their party's candidates in the November election. Their problem: Majority Leader Harry Reid won't let them." Kathleen Hunter in Bloomberg.

When colleges ditch coal investments, it's barely a drop in the bucket. "If the students at Stanford University believe they sent the coal industry a strong message this week, they should think again. The school's decision to eliminate coal from its portfolio did not send shock waves through the industry. In fact, representatives say it will have no financial impact on the industry at all. Nor will it curb the growing demand around the world for coal-generated electricity." Yuki Noguchi in NPR.

Other environmental/energy reads:

Lloyd's calls on insurers to take climate risks into account. Julia Kollewe in The Guardian.

White House calls in Al Roker for a climate assist. Kate Sheppard in The Huffington Post.

Using weathercasters to deliver a climate message. Coral Davenport in The New York Times.

U.S. orders railroads to disclose oil shipments. Jad Mouawad in The New York Times.

Vt. GMO bill expected to face legal challenges. Jane Lindholm in NPR.

Animals interlude: Rescued ducklings follow a man around.

4. The tea party isn't giving up just yet

Is this the end of the GOP civil war? "This has become a familiar scene in American politics: the fractured GOP wracked by the demands of a cranky right-wing base. But Tuesday might be remembered as the night it changed. To a degree not seen before since the advent of the Tea Party five years ago, the Republican establishment took on the warring factions that have given the GOP so many ulcers in recent years--and won. With 94 percent of the vote counted Tuesday night, Tillis had cleared the 40-percent runoff threshold, taking 45 percent of the vote to his nearest competitor's 27 percent." Molly Ball in The Atlantic.

Not if the tea party has anything to say about it. "A day after a series of defeats in primaries in North Carolina and Ohio, Tea Party activists there and across the nation dismissed the results, insisting that rumors of their demise death were greatly exaggerated....National Tea Party groups pointed out that they were not much involved in the elections on Tuesday, and that regardless, the results should be viewed in the context of a five-year long running contest that has the GOP establishment still running scared." David Freedlander in The Daily Beast.

Establishment candidates' policy stances are moving closer to the tea party. "Tea party-aligned candidates may lack traction in GOP primaries, as Tuesday's results from North Carolina and Ohio suggest, but the movement is showing its power by shaping the 2014 campaign agenda and pushing Republicans to the right. Many GOP incumbents and candidates backed by party leaders have embraced tea-party priorities, especially the call to repeal the 2010 health law and slash government spending. That has put those candidates in a stronger position to deflect challenges from the right than in the past two election cycles." Janet Hook in The Wall Street Journal.

Analysis: N.C. GOP nominee for Senate may have prevented at least a bit of polarization in the Senate. John Sides in The Washington Post.

Other political reads:

Money, politics and pollution in North Carolina. Jonathan M. Katz in The New Yorker.

How the establishment conquered North Carolina, and where it goes next. Sean Sullivan in The Washington Post.

Tea party faces uphill climb in Georgia's crowded U.S. Senate primary. Paul Kane in The Washington Post.

Stunt interlude: Epic pool dunk.

5. What have we learned since the financial crisis?

Both progress made and threats remain post-financial crisis, regulators say. "Some of the same weaknesses that contributed to the disastrous 2008 financial crisis persist today, the Financial Stability Oversight Council said in its 2014 annual report to Congress. The report, released on Wednesday, highlights what it called 'the considerable progress we have collectively made to improve the strength and resiliency of the financial sector.' But Janet L. Yellen, the chairwoman of the Federal Reserve, said at Wednesday's open meeting of the council: 'Our job is not done. We must continue our collective efforts to monitor risks, address vulnerabilities and build a stronger and safer financial system.'" Annie Lowrey in The New York Times.

Regulators also see growing financial risks outside traditional banks. "U.S. regulators have spent the past six years forcing banks out of businesses seen as risky. Now, they are beginning to worry that they have pushed some financial activity into the shadows and outside their legal reach. Regulators on the Financial Stability Oversight Council on Wednesday said they are monitoring new practices by nonbank financial firms--including mortgage-servicing companies, insurers and asset managers--over concerns that their activity could pose an emerging threat to the financial system." Ryan Tracy in The Wall Street Journal.

Post-recession financial literacy languishing. "The financial know-how of most Americans stinks, roughly five years after the global financial recession officially ended....Educators and academics say financial-literacy education remains a tricky endeavor....Now, researchers at the University of Arizona are trying to change this by conducting a multiyear study into the way young adults develop and gain financial knowledge. (The latest results will come out this June and will focus on the way twentysomethings navigate the tough job market and its effect on their finances.)" Nancy Cook in National Journal.

Other financial reads:

Why changing a Dodd-Frank provision has an uphill battle in the Senate. Michael Catalini in National Journal.

Consumer credit up most in a year. Reuters.

3-D printer interlude: A 3-D printer that prints any color of makeup.

Wonkblog roundup

Hospitals are cutting down on their deadly mistakes, HHS says. Jason Millman.

Political data, once the reserve of presidential campaigns, is spreading to local races. Brian Fung.

They put Old Bay on everything in Maryland. Soon you will, too. Christopher Ingraham.

The four big economic messages from Yellen's Congressional testimony. Matt O'Brien.

Obama's former Medicare chief on why he wants to bring single-payer to Massachusetts. Jason Millman.

Workers would rather save up for retirement than pay for health care. Jonnelle Marte.

Et Cetera

Democrats hedge on pushing for deportation changes. Laura Meckler in The Wall Street Journal.

Expert report says states should use single drug for injections. Sari Horwitz in The Washington Post.

FCC commissioner asks for delay in net-neutrality rules. Edward Wyatt in The New York Times.

House panels sell alternate realities on NSA reform. Dustin Volz in National Journal.

Congress faces highway funding battle as gridlock looms. David Lawder in Reuters.

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Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.

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