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: 1.7 million. That's the
number of documents Edward Snowden took, according to a leak of details from a Department of Defense report.
Wonkbook's Graph of the Day: Here's the graph the Fed is thinking about right now.
Rising yields on two- and three-year Treasuries show that markets think
monetary policy will tighten far more quickly than promised.
Wonkbook's Top 5 Stories:
(1) the year for NSA reform; (2) how you finish the two biggest trade
deals in U.S. history; (3) the mess of the UI extention; (4) what good
news on Obamacare sounds like; and (5) Bridgeghazi.
1. Top story: Could NSA reform end up the biggest policy issue of 2014?
Behind the
scenes, White House preoccupied by NSA surveillance controversy. "[I]n
public, President Obama has focused this week on income inequality,
touting initiatives to help the poor and unemployed. But in private, the
president and his top aides have spent more time dealing with another
issue. Obama met Thursday with a bipartisan group of lawmakers to update
them on his review of the National Security Agency's vast surveillance
program. A day earlier, he huddled separately with top
intelligence officials and a White House advisory panel on privacy
issues and civil liberties. He also called German Chancellor Angela
Merkel, whose mobile phone had been tapped by the NSA, and invited her
to Washington...[H]is top lawyer, White House Counsel Kathryn Ruemmler,
met with privacy advocates Thursday, and executives from the nation's
largest Internet companies were scheduled to visit the White House on
Friday."
David Nakamura in The Washington Post.
What Obama is about to propose for the NSA. "President
Barack Obama is leaning toward extending broad privacy protections to
non-U.S. citizens and is seriously considering restructuring the
National Security Agency program that collects phone-call data of nearly
all Americans, officials familiar with the process said on
Thursday. Mr. Obama plans to unveil these and other changes to
surveillance programs as soon as next week, the officials said."
Siobhan Gorman and Carol E. Lee in The Wall Street Journal.
@mattyglesias: Time for someone at the NSA to leak all their info on this [Christie bridge scandal] and unify our scandals.
Intel panel: DOD report finds Snowden leaks helped terrorists. "Edward
Snowden's leaks about National Security Agency programs have put U.S.
troops at risk and prompted terrorists to change their tactics,
according to a classified
Pentagon report. House Intelligence Committee Chairman Mike Rogers
(R-Mich.) and ranking member Rep. Dutch Ruppersberger (D-Mich.) said
that the Pentagon report found a significant portion of the 1.7 million
documents Snowden took were related to current U.S. military
operations."
Jeremy Herb in The Hill.
Obama, lawmakers discuss whether to end NSA collection of Americans' phone records. "President
Obama met Thursday with senior lawmakers on opposing sides of a debate
about whether to end the National Security Agency's collection of
Americans' phone data. The 90-minute meeting came in the wake of a
report by a presidentially appointed
review group that concluded that the program, which gathers billions of
phone call toll logs, "was not essential" to preventing terrorist
attacks. The group recommended that the data be held instead by the
phone companies or a private third party"
Ellen Nakashima in The Washington Post.
@ChadPergram:
PATRIOT Act author Jim Sensenbrenner after Obama mtg: I'm not so sure
that the president thinks we need legislation (to reform the NSA)
NSA and GCHQ activities appear illegal, says EU parliamentary inquiry. "The
51-page draft report, obtained by the Guardian, was discussed by the
committee on Thursday. Claude Moraes, the rapporteur asked
to assess the impact of revelations made by the whistleblower Edward
Snowden, also condemns the "chilling" way journalists working on the
stories have been intimidated by state authorities."
Nick Hopkins and Ian Traynor in The Guardian.
@interfluidity:
so, suppose a guy like Chris Christie--let's just say with staff like
Chris Christie's--headed an executive branch that included the NSA.
As automakers tap smartphone technology, concerns grow about use of drivers' data. "The
growing alliance between Silicon Valley and Detroit has executives in
both places excited over the technological
and money-making opportunities. But the fast-emerging trend also has
raised questions about whether consumers will be able to control the
massive trove of personal data that cars are expected to generate in the
coming years. U.S. laws are vague about who can harness all that
information. Can law enforcement use the data to prove that a driver was
speeding? Will hackers be able to get personal data from Web-connected
cars? Can consumers stop Google from tracking them as it seeks to sell
targeted
ads?"
Cecilia Kang and Michael Fletcher in The Washington Post.
FRIEDERSDORF: The NSA leaks are about democracy, not just privacy. "[T]here
is inherent value in citizens being given access to information when it
informs their judgments about public policy. Information of this sort
is a prerequisite for meaningful civic participation. There ought to be a
strong presumption in favor of
making it public, especially when the policy at issue is as significant
and controversial as targeted killing...The unstated assumption behind a
lot of national-security-state defenders and Snowden critics is that
the public has no proper role in deciding any of these questions,
because the information needed to make sound judgments is properly
classified."
Conor Friedersdorf in The Atlantic.
Music recommendations interlude: This is a
great YouTube playlist of all the Seventies songs in the movie "American Hustle."
Top opinion
KRUGMAN: The war over poverty. "The
narrative went like this: Antipoverty programs hadn't actually reduced
poverty, because poverty in America was basically a social problem -- a
problem of broken families, crime and a culture of dependence that was
only reinforced by government aid. And because this
narrative was so widely accepted, bashing the poor was good politics,
enthusiastically embraced by Republicans and some Democrats, too. Yet
this view of poverty, which may have had some truth to it in the 1970s,
bears no resemblance to anything that has happened since."
Paul Krugman in The New York Times.
SUNSTEIN: A new War on Poverty needs correct facts. "[S]ome
programs have especially big impacts. All by itself, for example, the
earned income tax credit reduced child poverty by no less than 5
percentage points in 2012. Food and nutrition programs had almost as
large an effect. In 1967, the impact of such programs was close
to zero."
Cass R. Sunstein in Bloomberg.
ABRAMOWITZ: Political independents don't really exist. "[T]he
large majority of independents are "closet partisans" who consistently
support only one party's candidates. They call themselves independents
and many of them register as independents when given an opportunity, but
they vote like partisans...87 percent of independent
Democrats (i.e., independents who lean Democratic) voted for Barack
Obama while 86 percent of independent Republicans voted for Mitt Romney.
Moreover, 78 percent of independent Democrats voted a straight ticket
for president, House of Representatives and U.S. Senate, as did 72
percent of independent Republicans."
Alan Abramowitz in Politico.
Opinion interviews: A health industry expert on 'the fundamental problem with Obamacare.' Robert Laszewski speaks with Ezra Klein.
This sociologist has a plan to make America more like Sweden. Lane Kenworthy talks with Dylan Matthews.
The Washington Post.
RITHOLTZ: The best housing program you've never heard of. "Of
all of the various government housing programs run by various federal
agencies, [the Home Affordable Refinance Program] is the most effective
and efficient
one out there...[A]fter HARP was modified in 2011, refinances increased
significantly. The total number of avoided foreclosures has passed 3
million. What does the HARP 2.0 program actually do? It takes people who
are underwater in a variety of expensive, or ill-advised or even
predatory mortgages, and allows them to refinance their homes into
traditional conforming 30-year fixed mortgages. A broad assortment of
"interest-only" mortgages, 2/28 teaser rates, adjustable-rate
interest-only loans
are eligible under the program."
Barry Ritholtz in Bloomberg.
BROOKS: Movement on the right. "I'd
invite you, for example, to cast your eye over the new issue of
National Affairs, the right-leaning policy journal edited by Yuval
Levin. You'll find nine different articles that hang together coherently
around what could well be the dominant style of conservatism of the
coming years. This is the
conservatism of skeptical reform. This conservatism is oriented, first,
around social problems, not government...But the emerging conservatives
begin their analysis by looking at concrete problems: how to help the
unemployed move to where they can find jobs; how to help gifted students
from poor families reach their potential. If you start by looking at
these specific matters, then even conservatives conclude that, in
properly limited ways, government can be a useful tool. Government is
not the
only solution, but it is also not the only problem."
David Brooks in The New York Times.
COHN: The young are alright. "Thanks
to analysis from Jonathan Gruber, the MIT economist who was an
architect of both the Massachusetts and federal reforms, we know that
enrollment was slow to get rolling in Massachusetts--and that,
relatively speaking, healthy people came into the system late. Now
Gruber has done a new
analysis, breaking down enrollment specifically by age, and provided it
to the New Republic...Over the course of the first year, the proportion
of young people (in this case, ages 19 to 34) who had obtained health
coverage through the Massachusetts insurance exchange grew. In other
words, they were more likely to sign up late."
Jonathan Cohn in The New Republic.
TYSON: For once, a bit of optimism has arrived. But let's be real: it's just a bit. "Optimism
about the future should also be tempered by recognition of where the
economy is today and what it has lost since the recession. Even with
more rapid growth this year, output and employment will remain far below
prerecession trend lines
for several years. Output fell 8 percent relative to its noninflationary
potential in 2008-9 and is now around 10 percent lower than what was
judged to be its potential in 2007."
Laura D'Andrea Tyson in The New York Times.
This is just great interlude: Now you too can have a business card like Chen Guangbiao.
2. How you finish the two biggest trade deals in U.S. history
Trade bill to open debate on globalization as Congress demands more oversight. "Lawmakers
have proposed a bill that would narrow the Obama administration's room
to negotiate new free-trade agreements,
demanding that sensitive issues such as currency ma-nipu-la-tion be
covered in future treaties and deepening congressional oversight of the
process. The legislation, introduced Tuesday by three of the top
lawmakers on U.S. trade policy, would give the administration a green
light to complete new trade pacts covering an important swath of Asia
and Latin America and all of the European Union -- the most significant
such agreements in a generation...The measure requires that future
treaties set
ground rules for how countries manage their currency values -- a
sensitive issue for any sovereign state that may be difficult to build
into a trade agreement with countries as diverse as Japan and Peru. It
also asks for limits on the role of state-owned enterprises, and it
would allow any member of Congress to attend trade negotiating
sessions."
Howard Schneider in The Washington Post.
Explainer: What is "trade promotion authority" or "fast track"? Lydia DePillis in The Washington Post.
More economists are taking the 'glass half-full' view on U.S. growth. "Record
exports and the smallest trade deficit in four years. Healthier
consumer spending, including the strongest annual increase in automobile
sales since 2007, spurred by a booming
stock market and an improving housing sector. And a slow but steady
pickup in job creation that has pushed unemployment to its lowest level
since 2008. The confluence of all these forces in recent weeks has
prompted economists to sharply revise their expectations for growth in
late 2013 and early 2014, and prompted hopes that a more sustained
economic expansion has finally arrived...The newfound optimism will face
its first test on Friday, when the Labor Department reports the latest
data on
unemployment and job creation in December."
Nelson D. Schwartz in The New York Times.
Jobless claims fall by 15,000. "Initial
claims for jobless benefits, a measure of layoffs, decreased by 15,000
to a seasonally adjusted 330,000 in the week ended Jan. 4, the Labor
Department said Thursday. That was the lowest level in more than a
month. Economists had expected 335,000 new claims for the week...The
four-week
moving average for claims, which evens out bumpy week-to-week data, fell
by 9,750 to 349,000."
Eric Morath in The Wall Street Journal.
Federal Reserve faces prospect of bond market showdown over rates. "Bond
traders are bringing forward their expectations of when the Federal
Reserve will start to tighten policy, leading to a jump in short-term US
borrowing costs. Recent economic data have pointed to a gathering
American recovery, and could result in a
showdown between policy makers and the Treasury market....[T]he upbeat
tone of recent economic data is testing the bond market's belief that
the central bank is in no hurry to start tightening policy after the
gradual withdrawal of QE is completed, probably later this year."
Michael Mackenzie in The Financial Times.
What should we call Chris Christies bridge scandal? interlude: Bridgeghazi? Bridgegate? Blagojebridge? WikiLanes?
3. The fight to extend unemployment benefits has turned into a real mess
Showdown vote ahead on Senate Democrats' bill to extend jobless benefits. "Democrats
offered a roughly $18 billion proposal that would extend the benefits
through most of 2014, and Senate Majority
Leader Harry M. Reid (D-Nev.) scheduled a showdown vote on the new
proposal for next Monday...The new Democratic plan would extend the
emergency unemployment program until mid-November (the original proposal
was for three months). "
Paul Kane in The Washington Post.
Here are some more key policy details. "The
law that expired in December provided federal aid to supplement the 26
weeks of unemployment benefits provided by most states. The expired law
provided up to 47 weeks of additional payments; the new Reid proposal
would scale that back to a maximum of 31 weeks. To partially offset the
cost, the
bill included a proposal--similar to one backed by President Barack
Obama and a broader one introduced by Mr. Portman--to eliminate a kind
of "double dipping" by cutting off Social Security disability benefits
to people if they are also collecting unemployment benefits. Most of the
cost of the bill, some $17 billion, would be offset by postponing for
one year the expiration of across-the-board spending cuts, known as the
sequester, that apply to mandatory spending programs, including payments
to health providers under Medicare."
Janet Hook in The Wall Street Journal.
Jobless benefits are not a priority for House Republicans. "House
Republicans are showing little appetite, urgency and interest in
extending the program, and are hinting that they are content to let the
issue disappear if the Senate fails to pass its own legislation...Some
Republicans think the nation is awash with
unoccupied jobs, others are wary of shuffling more government money to
the unemployed and nearly every GOP lawmaker wants to see seismic
changes to the way benefits are administered."
Jake Sherman in Politico.
Reid is burning bridges trying to get the bill through -- and to an extent that it's hurting the bill. "With
his strong-armed change to the filibuster rule and an iron-fisted
control of the Senate floor, Senator Harry Reid has engaged in the
greatest consolidation of congressional power since Newt Gingrich ruled
the House, unleashing a
bitterness that may derail efforts to extend unemployment insurance. Mr.
Reid of Nevada, the majority leader, on Thursday dismissed all proposed
Republican amendments to the unemployment extension, even those drafted
by Republicans who had handed Democrats a victory on Tuesday by voting
to take up the bill."
Jonathan Weisman in The New York Times.
<strong">Trains are a cool hobby interlude:
Check out these cool ones in history.
4. What good news on Obamacare sounds like
Obamacare is giving a big boost to Georgia's health IT industry. "Politically,
Georgia is fighting the health law at every turn. Gov. Nathan Deal, a
Republican, has chosen not to expand Medicaid, and the state's insurance
commissioner
publically vowed to obstruct the Affordable Care Act. But that doesn't
mean Georgia isn't seeing a financial benefit from the law. Take the
company called PreMedex. Founder and president Van Willis knows that
just a few years ago, a company like his would've been a hard sell --
impossible, even. The two-year-old company contracts with hospitals and
doctors' offices to call patients after they're discharged. Under the
Affordable Care Act, hospitals are penalized if Medicare patients are
readmitted within a month for several specific illnesses."
Jim Burress in Kaiser Health News.
Maryland's plan to upend healthcare spending. "The
Obama administration is set to announce Friday an ambitious health-care
experiment that will make Maryland a test case for whether aggressive
government regulation of medical prices can dramatically cut health
spending. Under the experiment, Maryland will cap hospital spending
and set prices -- and, if all goes as planned, cut $330 million in
federal spending. The new plan, which has been under negotiation for
more than a year, could leave Maryland looking more like Germany and
Switzerland, which aggressively regulate prices, than its neighboring
states. And it could serve as a model - or cautionary tale - for other
states looking to follow in its footsteps."
Sarah Kliff in The Washington Post.
Medicaid is nearly free health care. Will people move for that? "[S]hould
we expect a widespread migration from the states who fail to expand
Medicaid into those that are participating? New research suggests it's
unlikely: Previous expansions of the public program, coupled with the
geographic clustering of non-expansion
states, suggest that cases like Workman's will be the exception rather
than the rule..."The takeaway, I think, is that as states are
considering whether to expand Medicaid it's unlikely they'll see an
influx of beneficiaries if they expand," says Aaron Schwartz, a doctoral
candidate at Harvard who published the new paper in the journal Health
Affairs. "Based on past experience, we don't see any effects on
migration.""
Sarah Kliff in The Washington Post.
Survey: Most of the uninsured haven't been to HealthCare.gov yet. "The
survey from Enroll America, a nonprofit with close ties to the Obama
administration that is aiming to sign people up, found seven out of 10
uninsured people in the United States haven't visited an ObamaCare
online exchange yet...In addition, 81 percent said
they didn't know March 31 is the open enrollment deadline, after which
they would be subject to the individual mandate penalty, if they remain
uninsured. Sixty-nine percent said they weren't aware that tax subsidies
and financial help might be available for them, and 59 percent said
they didn't know anything about plans that may be available in their
state."
Jonathan Easley in The Hill.
Obamacare will cover breast-cancer drugs. "Certain
medications that are intended to prevent breast cancer will be fully
covered under Obamacare, in new guidance set to be issued by the
Department of Health and Human Services Thursday morning. Women at
increased risk of breast cancer can receive so-called chemoprevention
drugs, including
tamoxifen and raloxifene, without a co-pay or other out-of-pocket
expense."
Amanda Terkel in The Huffington Post.
White House stops short of veto threats on House healthcare bills. "The
Obama administration stopped short Thursday of threatening to veto
House bills to require officials to tell people if their personal data
has been compromised through ObamaCare, and to require weekly reports on
the health law's implementation. The White
House said in two Statements of Administration Policy that it opposed
both bills, one of which is set for a Friday vote in the House...Weekly
reporting requirements on both enrollments and the operation of the
HealthCare.gov website would require "unfunded, unprecedented, and
unnecessary reporting requirements" on the health insurance exchanges,
it said in one statement."
Pete Kasperowicz in The Hill.
Writerly interlude: John McPhee on structure.
5. We're calling this Bridgeghazi, right?
Christie apologizes for scandal, fires deputy chief of staff, ousts top political aide. "A
contrite New Jersey Gov. Chris Christie apologized Thursday for a
scandal that threatens his political future, announcing that he had
fired a senior aide and
banished his top campaign adviser for their roles in days of traffic
jams orchestrated to punish a small-city Democratic mayor. Christie at
once accepted responsibility as the state's chief executive but also
insisted he had no involvement in shutting down a pair of access lanes
to the heavily trafficked George Washington Bridge over four days in
early September. The Republican governor said he was "blindsided" by
this week's release of e-mails and text messages detailing his office's
role in
the plot to create severe gridlock in Fort Lee, N.J."
Robert Costa and Philip Rucker in The Washington Post.
U.S. attorney's office reviewing GWB lane closings to see whether federal law violated. "U.S.
Attorney Paul J. Fishman has been asked to review the lane closures at
the George Washington Bridge in Fort Lee last September to determine
whether federal laws were violated. The review, prompted by a referral
from the Port Authority
Office of Inspector General, is considered a preliminary look to
determine if a full-blown investigation is warranted. If a criminal
investigation is undertaken, charges ranging from interfering with the
right of state travel to obstruction of justice to criminal negligent
homicide could be lodged, legislators and legal experts said on
Thursday. Another outcome: lawsuits filed by commuters or business
owners who were impacted by the massive traffic snarl."
Peter Sampson and Karen Sudol in The Bergen, N.J. Record.
Firing of Stepien deprives Christie of a key counselor. "In
Chris Christie's circle of advisers, few were as close to the governor
as Bill Stepien. He managed both of the New Jersey Republican's winning
campaigns for governor, helped shape Christie's tough-guy-on-your-side
image and was expected to take a top role in an
eventual White House bid. But when Christie cut him loose Wednesday
evening, the governor didn't so much as speak to him. Christie's
decision to oust Stepien and another top adviser implicated in the
burgeoning scandal over George Washington Bridge lane closures
demonstrated the blunt force that Christie is willing to use to contain a
crisis, even if it means exiling members of his innermost circle."
Matea Gold and Robert Costa in The Washington Post.
Reading material interlude: The best sentences Wonkblog read today.
Wonkblog Roundup
Maryland's plan to upend health care spending.
Sarah Kliff.
Congress is considering whether to allow Obama to finish two massive trade deals.
Lydia DePillis.
NASA wants to keep the International Space Station going until 2024. Is that a good idea?
Brad Plumer.
Three insane ways marketers will reach you in the future.
Lydia DePillis.
This sociologist has a plan to make America more like Sweden.
Dylan Matthews.
A health industry expert on 'the fundamental problem with Obamacare.'
Ezra Klein.
Medicaid is nearly free health care. Will people move for that? Sarah Kliff.
Et Cetera
How legalizing pot squeezes police funds for fighting drugs.
Zusha Elinson in The Wall Street Journal.
Got tips, additions, or comments? E-mail me.
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