Jan. 9, 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: 10 percent. Any hikes of health insurance premium rates greater than 10 percent must receive approval from the federal government, following a statute in the Affordable Care Act. Could such rate hikes be justified? Wonkblog’s Sarah Kliff takes a look at Anthem Blue Cross’ approved rate hikes to understand their causes.

Wonkblog’s Graph of the Day: Talking about the deficit? Talk about these charts.

Today in Wonkbook: Are doctors ready for the Affordable Care Act?; what are ‘extraordinary measures,’ and why is the Treasury Department taking them on the debt ceiling; some like it hot, others prefer to stop global warming; should the federal government track sales of ammunition?; and AIG says thanks for the bailout but maybe we’ll sue.

Top story: Four out of five Medicare doctors to fail quality test

Study finds many Medicare docs are about to get slapped with penalties. ”More than 80 percent of Medicare providers will face penalties for failing to meet quality thresholds if current performance trends continue, according to a new study. The Harvey L. Neiman Health Policy Institute found Tuesday that fewer than one in five Medicare providers meet the program’s Physician Quality Report System (PQRS) standards and are eligible for related bonus payments.” Elise Viebeck in The Hill.

Republicans can’t stop IPAB, but they can slow it down. ”When legislators created IPAB, they seemed to have a sense that it wouldn't be popular -- cutting Medicare spending rarely is. So they wrote in all these provisions that would make it really, really hard to write the board off…There are all sorts of special rules that govern the debate, ones that prevent legislators from changing the IPAB's recommendation and limits on the length of debate. There's even a provision that tells legislators they cannot repeal this specific part of the Affordable Care Act, saying that it ‘shall not be in order’ to ‘repeal or otherwise change this subsection.’” Sarah Kliff in The Washington Post.

@afrakt: What Congress is doing to Medicare by nips, tucks, and Band-aids is stupid and harmful. Best argument for the IPAB.

Conn., health insurance capital, moves ahead with exchange. ”Five health plans -- including all the major insurers in the state's individual and small group markets -- have told Connecticut's health insurance exchange that they plan to offer policies in the state's new online marketplace this fall. Exchange officials said Monday that Aetna, United Healthcare, Anthem, ConnectiCare and a new nonprofit co-op owned by the Connecticut State Medical Society have filed letters of intent to sell coverage, exchange officials said Monday.” Phil Galewitz in Kaiser Health News.

Can this 17-percent health insurance premium rate hike be justified? ”Anthem Blue Cross of California recently landed on the front page of the New York Times for its steep rate increases, some as high as 22 percent. Those big rate increases have raised one big question: Could such big price hikes possibly be justified? The answer turns out to be yes: Anthem has successfully convinced the federal government that three of its double-digit rate increases are reasonable. The health-care law requires insurers to submit all rate increases over 10 percent to the federal government for review.” Sarah Kliff in The Washington Post.

@sarahkliff: The United States now spends $2.7T on health care. That’s 17.9 percent of our economy.

ORSZAG: The smart healthcare strategy behind the fiscal cliff. ”One little-noted provision I was encouraged to see tucked in last week's fiscal-cliff legislation is Section 601(b): an incentive for doctors to expand their use of something called clinical data registries. These registries collect information on patient characteristics, patterns of care and outcomes that can be crucial to evaluating what medical techniques and strategies work and which ones don't.” Peter R. Orszag in Bloomberg.

PORTER: Healthcare and profit shouldn’t mix. ”Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery. A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system -- patients, for instance.” Eduardo Porter in The New York Times.

Music recommendations interlude: Peter Gabriel, “Solsbury Hill,” 1977.

Top op-eds

CHAIT: The eternal folly of the bipartisan debt fetish. “What is beyond dispute is that Obama's negotiating position is exactly the same as the centrists. If they believed that the $600 billion in revenue Obama secured, on top of the $1.5 trillion in spending cuts agreed to in 2011, was enough revenue, and Obama was demanding an excessively revenue-heavy solution to the deficit issue, then obviously they should argue as much. But they do not believe that. In fact, the Bowles-Simpson plan would raise far more revenue than Obama is asking for. One party stands completely in accord with their position, and it has not happened entirely because the other party stands against it. Why, then, don't they say this?” Jonathan Chait in New York Magazine.

MEYERSON: The fiscal cliff deal helped the rich. “How much do the newly enacted tax hikes on the wealthiest Americans actually affect them? Hardly at all. Almost all of the debate that convulsed Capitol Hill in December concerned the reinstatement of the highest marginal tax rate on earned income -- that is, on wages and salaries. But as Fitzgerald said, the rich are different from you and me, and one of the primary ways they're different is that they don't get their income from wages and salaries.” Harold Meyerson in The Washington Post.

NYT: The new foreclosure settlement isn’t good enough. “Since there are no reliable analyses to identify wronged borrowers -- which was the ostensible purpose of the self-reviews -- there is also no clear way to apportion the $3.3 billion among 3.8 million borrowers covered by the settlement. Some borrowers may get big sums while others get nothing, or millions could receive token payments. But given the extent of foreclosure abuses and the amount of money available, the individual reimbursements will be paltry compared with the harm of losing one's home in an abusive process. If, say, half of the potentially eligible borrowers received a payment, each would get roughly $1,700 on average.” New York Times editorial board.

YGLESIAS: Mint the coin. ”Geithner can have the Mint create a $1 trillion coin. Then he can walk it over to the Federal Reserve and deposit it in the Treasury's account. Then the government can keep sending out the checks--to soldiers and military contractors, to Social Security recipients and doctors who treat Medicare patients, to poor families getting SNAP and to FBI agents--it's required by law to send--and the checks will clear. It's a simple, elegant solution.” Matthew Yglesias in Slate.

SOLTAS: The end of liberal and conservative political projects. ”If you take a long view of U.S. politics, the current political moment comes down to just two facts. First, President Barack Obama's re-election means that most of the provisions of the Affordable Care Act will probably be permanent. It will be the largest expansion of health insurance in a half-century. Second, the tax burden on middle-class Americans has been cut nearly in half since 1980. The fiscal-cliff deal made that almost entirely permanent. The average American now gives less of his income to the federal government than at any time since perhaps the 1940s or1950s.” Evan Soltas in Bloomberg.

Impossibly gourmet interlude: What sort of dinosaur meat would taste best?

Debt ceiling countdown

The ‘extraordinary measures’ Treasury is taking to prevent default right now. ”The federal government once again may resort to a financial maneuver involving federal employee retirement savings to stave off a default, and the Thrift Savings Plan once again is seeking to assure investors that there would be no personal cost to them. The Treasury Department has said it can use several short-term maneuvers, including one involving the Thrift Savings Plan's government securities fund, to buy time during the debt ceiling standoff.” Eric Yoder in The Washington Post.

Whose taxes will Obama try to raise now? ”The White House insists the next debt deal must have just as much tax revenue as spending cuts. President Obama hasn't specified exactly what he will demand in the next round of negotiations, but budget experts like Chuck Marr of the Center on Budget and Policy Priorities predict that ‘the most live option’ would be a proposal that Obama had included in his original 2013 budget: limiting the tax write-offs for the wealthiest taxpayers, usually referred to as a ’28 percent cap.’ But even it passed, it wouldn't be enough to revenue to meet the White House's likely target for tax savings.” Suzy Khimm in The Washington Post.

Sen. Corker plans new entitlement reform bill. ”Chained CPI would be a change that could slow the inflation-related growth of entitlement programs. It would allow inflationary effects on prices to be reduced by considering how people substitute one product for another when faced with higher prices. Medicare means-testing would allow Medicare payments to be reduced for people who can afford to pay for their own healthcare.” Pete Kasperowicz in The Hill.

Former head of U.S. Mint supports the platinum-coin option. ”Tuesday morning, I got an e-mail from Philip Diehl, the former Mint director and Treasury chief of staff who, with Rep. Mike Castle, wrote the platinum coin law and oversaw the minting of the first coin authorized by the law. It's worth publishing in full.” Ezra Klein in The Washington Post.

Read: Federal revenues this quarter are up 11 percent as compared to last year, says the CBO.

Thank the White House for the corporate tax breaks in the fiscal cliff deal. ”[L]obbyists pushing the additional tax breaks appear to have had a key ally: President Obama, who during his re-election campaign had touted the need to increase the nation’s investment in alternative energy sources such as wind…So the package – with its $222 million credit for the rum industry, a $78 million write-off for the owners of NASCAR auto racing tracks and tax credits for the film industry that could total $248 million, among other things – survived intact, like a holiday bonus to Washington’s lobbyists.” Patrick Temple-West, Marcus Stern and Susan Cornwell in Reuters.

In memoriam interlude: Ezra’s tribute to Richard Ben Cramer.

Some like it hot. Others prefer to stop global warming.

2012 was the hottest year on record in the U.S. ”We already knew it was a blazing hot year in the United States -- the heat waves, the droughts, the wildfires -- but NOAA's National Climatic Data Center has made it official. All told, 2012 was the hottest year on record for the lower 48 states, shattering the previous record set in 1998 by nearly 1?F. It was mainly the Midwest and Great Plains getting hit by unusual heat, but just about every part of the mainland United States (save for the Pacific coast) saw temperatures that were well above the average over the previous three decades.” Brad Plumer in The Washington Post.

Read: NOAA’s “State of the Climate 2012″ report.

After rig mishap, U.S. orders new assessment of Arctic drilling. ”The Interior Department on Tuesday ordered "an expedited, high-level assessment" of oil and gas activities in Alaska's Arctic waters following a violent storm that drove Shell's drilling rig, the Kulluk, aground last week and revived debate over the company's plans to explore for oil in the Chukchi and Beaufort seas…The Interior Department remains focused on ensuring safe drilling rather than barring drilling off Alaska's coast. A special Interior Department panel of government, industry and environmental experts is working on safety guidelines for offshore drilling.” Steven Mufson in The Washington Post.

Germany is reducing its solar subsidies. ”Chancellor Angela Merkel has cut solar-power subsidies to reduce the burden on consumer electricity bills of Germany's renewable-energy expansion. Still, the above-market tariffs remain at levels that allow developers to profit, while component prices have continued to drop amid an oversupply.” Stefan Nicola in Bloomberg.

Under the sea interlude: First-ever video of a live giant squid in its deep domain.

Should we track ammo sales?

Calif. weighs bill to track ammo sales. ”California state Assemblywoman Nancy Skinner on Monday announced Assembly Bill 48, which would require ammunition sellers to obtain licenses, check buyers’ identification and report sales to the California Department of Justice. Ammunition sales currently aren’t tracked in the state…If passed, the bill would give California more oversight of ammunition sales than any other state in the nation. Few states currently regulate or oversee ammunition sales, with state laws typically targeting guns instead. In New Jersey as well as the District of Columbia, ammunition sellers must keep sales records; and in D.C., Massachusetts and Washington state, they must hold licenses, according to the Law Center to Prevent Gun Violence.” Vauhini Vara in The Wall Street Journal.

Senator: Background checks for ammo purchases. ”Connecticut's senior senator said Tuesday he would introduce legislation to require background checks for all buyers of gun ammunition, part of a medley of gun-related proposals Congress is considering in the wake of last month's mass shooting at a Connecticut elementary school. Sen. Richard Blumenthal (D-Conn.) said he wants to require all buyers of ammunition to undergo instant background checks through the FBI's systems. Blumenthal, a former state attorney general, said the measure would keep ammunition from falling into the hands of felons, drug addicts, domestic violence perpetrators or the mentally ill.” Philip Rucker in The Washington Post.

N.Y. also contemplating tight gun control. ”Gov. Andrew M. Cuomo, pushing New York to become the first state to enact major new gun laws in the wake of themassacre in Newtown, Conn., plans on Wednesday to propose one of the country's most restrictive bans on assault weapons…[H]e wants to broaden the number of guns and magazines covered by the law while also making it harder for gun makers to tweak their products to get around the ban.” Thomas Kaplan in The New York Times.

Biden will meet with an NRA rep. ”James J. Baker, the director of federal relations for the N.R.A.'s lobbying arm, will attend the meeting on Thursday, according to Andrew Arulanandam, a spokesman for the organization. The meeting will also include representatives from other gun rights and hunting organizations.” Michael D. Shear in The New York Times.

Gun control may be crowding out immigration reform from the political agenda. ”President Barack Obama promised immigration reform leaders that their cause would top his second-term agenda, making January their month. But immigration advocates are beginning to worry that their fight could slip behind a cause that wasn't even an issue during the election: gun control.” Anna Palmer in Politico.

Dave, Dave, what are you doing, Dave interlude: Teaching computers to detect human emotion.

AIG: Thanks for the bailout. The bailout was unconstitutional.

AIG is considering a suit against the federal government. ”Fresh from launching a branding campaign to try to rechristen itself as a paragon of patriotism, the giant insurer American International Group is reportedly weighing a step that would remind America just why everyone got so darn mad in the first place. The board of AIG, according to the New York Times, is weighing whether to join a $25 billion lawsuit against the U.S. government for forcing unacceptably high losses on shareholders in its bailout. The argument is that this violated the Fifth Amendment's prohibition on the government seizing private property without just compensation.” Neil Irwin in The Washington Post.

The banks are winning, but that might not be a bad thing. ”In their battles to put the mistakes of the past behind them and to be under as few restrictions as they believe they need to do business, the major global banks are winning…The biggest headlines in the United States were over Monday's announcement of multibillion-dollar agreements for the big banks to resolve disputes stemming from bad lending practices during the housing boom…Perhaps more significantly, over the weekend, international bank regulators meeting in Basel, Switzerland, said they will relax rules on how much liquidity the titans of global finance must maintain.” Neil Irwin in The Washington Post.

Consumer debt rises on cars, education. ”The Federal Reserve said Tuesday that consumers increased their borrowing in November by $16 billion from October to a seasonally adjusted record of $2.77 trillion. Borrowing that covers autos and student loans increased $15.2 billion. A category that measures credit card debt rose just $817 million.” The Associated Press.

Payroll tax hike wipes away a year’s worth of wage gains. ”The good news: Many Americans saw their paychecks get fatter in 2012, as average weekly earnings rose 2.4 percent over the course of the year. The bad news: The expiration of the payroll tax cut this January will basically wipe away all of last year's gains.” Brad Plumer in The Washington Post.

Linguistic interlude: Parlez-vous deux langues? Congratulations, you have a more efficient brain than most people.

Et Cetera

The case for decriminalizing heroin. Dylan Matthews in The Washington Post.

Moderate Republican group wants some Democratic members. Rachel Weiner in The Washington Post.

Meet Jeffrey M. Lacker, the Federal Reserve Open Market Committee’s serial dissenter. Binyamin Appelbaum in The New York Times.

What’s Obama’s agenda on trade in his second term? Howard Schneider in The Washington Post.

GAO says Postal Service should pre-fund pensions. Joe Davidson in The Washington Post.

More people are packing boxes and moving to different areas of the U.S. Josh Mitchell in The Wall Street Journal

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

tWonkbook is produced with help from Michelle Williams.

http://view.ed4.net/v/WUOQBH/EW8QEZ/B5DUQIJ/18WK0P/MAILACTION=1&FORMAT=H