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Wonkbook: State aid delayed; EPA regs face lawsuit; GOP targets health care funding; oil spill larger than thought


Concern over the deficit can be an oddly capricious affliction, particularly in the United States Senate. On days when the senators are arguing over how many of the Bush tax cuts to extend, the choice is between all of them, at a cost of more than $4 trillion to the deficit, or most of them, at a cost of more than $3 trillion. But then there are days when the body considers things like Medicaid and education funding and deficit concerns suddenly dominate. That's what happened last night, when the Congressional Budget Office estimated that the state aid bill needed about $5 billion more in offsets to be deficit neutral, and so Harry Reid had to yank the legislation back in order to find them. Didn't anyone tell him that Mondays are deficit days up there?

Moving on, conservatives and business interests are planning lawsuits to stop the Environmental Protection Agency from regulating greenhouse gas emissions; the GOP is planning to attack health care reform by gradually cutting off funding; new estimates show the Gulf oil spill to be far larger than originally thought; and George Packer takes you on a tour of the strangest institution in the land.

It's Tuesday, and that's okay. Welcome to Wonkbook.

Top Stories

EPA greenhouse gas regulations must survive a formidable legal challenge to take effect, reports Darren Samuelsohn: "Through federal lawsuits, two conservative attorneys general, a major coal company and the U.S. Chamber of Commerce are leading the charge to overturn the Environmental Protection Agency’s ability to write its own climate rules...'I don’t know if its backyard barbeque grills or hitting small business,' said Robert Stavins, a Harvard University economist who has been working on climate rules for several decades. 'But there will be some regulation that looks silly that just becomes a poster child for the right. And it could lead to less, rather than more, national enthusiasm on climate policy. And people on the right recognize that.'"

Congressional Republicans are planning a death by a thousand cuts for health care reform, reports Jennifer Haberkorn: "Republicans have proposed a bill to deny funding to any part of the law. But a more likely scenario is to choke off funding for pieces of the legislation that they find particularly troublesome, such as the requirement to buy insurance, changes to Medicare and the provision most cited by House Minority Leader John Boehner of Ohio: the 'army of new IRS agents' to implement new requirements for business."

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The GOP delayed the state aid package over deficit qualms, reports David Rogers: "Just hours before a scheduled cloture vote Monday, the Congressional Budget Office informed Senate leadership that it was still about $5 billion short of offsetting the full $26.1 billion cost of the package...Reid was left to hastily table his bill Monday while staff prepared a substitute that could be voted on Wednesday."

George Packer details the Senate's dysfunctions, and the difficulties of reforming it: "Newcomers like Udall seem to think that the Senate has grown so absurd and extreme that some kind of reform is inevitable. Perhaps they need more time to plumb the depths of the institution’s intransigence. According to Sarah Binder, a change in rules is extremely unlikely; Republicans would be implacably opposed to, say, weakening the filibuster, and so would some Democrats, especially long-serving ones. 'I would oppose that,' Chris Dodd said, adding of the freshmen, 'These are people who have never been in the minority.' For older Democrats, who have put in their years, grown adept at working the rules, and now chair powerful committees, the reform impulse could be a threat."

The oil spill gushed 12 times faster than previously estimated, and totals 4.9 million barrels, report Joel Achenbach and David Fahrenthold: "The new figures indicate that the roughly 800,000 barrels of oil that BP managed to capture with its various containment strategies -- a riser insertion tool, a 'top hat,"'and flaring from a surface rig -- represented only about one-sixth of the crude that surged into the gulf over the course of nearly three months. In all, about 1.2 million barrels of oil have been accounted for, either burned, captured or skimmed off the ocean's surface. That's about a quarter of the new estimate for the total spill."

Acoustic pop interlude: Robyn sings "Show Me Love".

Still to come: Geithner defends FinReg on Wall Street; the dispersant used in the Gulf is less toxic than was believed; Virginia follows Arizona on immigration enforcement; and Japan breaks new ground in creepy robot-making.


Tim Geithner has been tasked with defending FinReg to Wall Street executives, reports Brady Dennis: "He acknowledged the 'frustrating, glacial pace' of federal rule-writing and vowed that regulators would move 'as quickly as possible' to put new rules in place. He also said regulators would not 'simply layer new rules on top of old, outdated ones.'...He urged them to end hidden fees and not to push people into loans they can't afford. He urged banks to have the courage to increase lending. He implored firms to change executive pay 'so you are not rewarding them for taking risks that could threaten the stability of the financial system.'"

Factory growth is slowing around the world:

The Fed is considering injecting money into the bond market, reports Jon Hilsenrath: "The central bank's $2.3 trillion portfolio has nearly tripled in size since 2007. Buying new bonds with this stream of cash from maturing bonds--projected at about $200 billion by 2011--would show the public and markets that the Fed is seeking ways to support economic growth. It could also be a compromise that rival factions at the Fed support, as officials differ about whether and how to address a subpar recovery."

Robert Gates wants $100 billion in defense savings over five years:

The SEC faces hard tradeoffs in settling on penalty amounts, reports Zachary Goldfarb: "Two competing factors have been at play. On the one hand, the agency wants headline-grabbing settlement numbers that send a message that regulators will be tough on companies that do bad things. On the other hand, the agency is cognizant that it's a company's shareholders, who might have been harmed in the first place, who ultimately pay when the agency assesses a fine."

Federal workers are voting on SAVE ideas for cutting the deficit:

The United Auto Workers are gearing up to unionize plants of Toyota and other foreign automakers:

Robert Reich believes Obama has gone far enough to gain enemies, but not far enough to help workers noticeably: "It accomplished as much as it possibly could with a fragile 60 votes in the Senate, a skittish Democratic majority in the House, and a highly-disciplined Republican opposition in both chambers. Yet Bismarck's dictum about politics as the art of the possible is not altogether correct. The real choice is between achieving what's possible within the limits of politics as given, or changing that politics to extend those limits and thereby more assuredly achieve intended goals. The latter course is riskier but its consequences can be more enduring and its mandate more powerful, as both Lyndon Johnson and Ronald Reagan demonstrated."

Michael Kazin argues liberals can't overcome anti-tax sentiment easily: "The only time income taxes were popular was when few Americans had to pay them. In 1914, the first year the 16th amendment went into effect, fewer than 400,000 people filed returns and, except for a brief period when the U.S. was engaged in World War I, only the wealthy had to do so until the 1940s. The highest rate was less than ten percent. This changed dramatically during World War II when the need for revenue was both urgent and insatiable. By 1945, most citizens were paying some tax--a grievance which helped Republicans win control of both houses of Congress a year later."

Cartoon lecture interlude: Philip Zimbardo looks at how our perception of time affects our lives.


The EPA says the dispersant used in the Gulf was not as toxic as originally thought, reports Siobhan Hughes: "Previously, the EPA had said Corexit 9500A was among the most toxic chemicals and had ordered BP PLC to find a less toxic alternative. BP insisted that Corexit 9500A was the best option. The dispersant is made by Nalco Holding Co. Corexit 9500A and most other oil-dispersant mixtures were also less toxic to the fish than oil alone, suggesting the use of dispersants was 'a wise decision,' Paul Anastas, the EPA's assistant administrator for research and development, told reporters Monday. 'The oil itself is the hazard that we're concerned about--it's enemy No. 1.'"

Government support for fossil fuels dwarfs that for green energy, reports Alex Morales: "Governments last year gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices known as feed-in tariffs and alternative energy credits, the London-based research group said today in a statement. That compares with the $557 billion that the International Energy Agency last month said was spent to subsidize fossil fuels in 2008."

New drilling regulations could be cost-prohibitive for some rig operators, reports Guy Chazan: "Legislation designed to prevent a repeat of the Deepwater Horizon accident sets minimum safety standards for well design and requires oil companies to use an enhanced type of blowout preventer, or BOP, the device which failed to control BP PLC's rogue well. But many drilling rigs are too small to accommodate newer and bigger BOPs, and it will cost billions of dollars to upgrade them all."

The Midwest's grid is expanding for wind power:

The Senate oil spill response bill will set up citizens' councils in the Gulf and Arctic, reports Jim Carlton: "A provision to set up Regional Citizens Advisory Councils along both the Gulf Coast and Alaska's Arctic coast is included in the Securing Health for Ocean Resources and Environment Act, sponsored by Sen. Jay Rockefeller (D., W.Va.), whose Committee on Commerce, Science and Transportation acted on the measure Tuesday. It would mandate that the councils--which give communities the power to question drilling and production activities--be set up with funding from the industry, as happened when councils in Prince William Sound and Alaska's Cook Inlet were established 20 years ago."

The failure of an energy bill is the Senate's fault, argues Michael Tomasky: "In the case of energy, the Democrats were not unanimous in their support for a large bill, as they had been on health care. Certain moderates (Nebraska’s Ben Nelson) feared the legislation on the grounds that it would lead to a hike in rates or taxes, while otherwise liberal senators from the sootier, fossil-fuel-dependent states (Jay Rockefeller of West Virginia) were against it. But the Democrats probably had fifty-one or fifty-two votes for it, possibly more. In other words, they had a majority. But in today’s Senate, a majority is not enough."

Daniel Gross defends the electric car: "We're in a period of slack demand and low capacity utilization, with lots of empty factories, buildings, and stores. Companies are sitting on hoards of cash. In a time like this, they need special inducements--bribes, incentives, tax breaks--to make large new investments. In such a climate, the government has to give industry a nudge to get off its rear. And there are signs that the $2.4 billion in grants that the Department of Energy made to spur electric vehicle production is doing just that."

Terrifying android interlude: A limbless humanoid robot controllable over long distances.

Domestic Policy

Virginia's attorney general has ordered police officers to check the immigration status of all stopped drivers, report Anita Kumar and Rosalind Helderman: "Cuccinelli's opinion is less stringent than the portion of an Arizona law that was stopped by a federal court last week. Under that law, Arizona authorities were required to question people who they have a 'reasonable suspicion' are illegal immigrants. 'Our opinion basically said that Virginia law enforcement has the authority to make such inquiries so long as they don't extend the duration of a stop by any significant degree,' Cuccinelli (R) said at a news conference Monday."

A judge is allowing Virginia's lawsuit against health care reform move forward:

The Senate is confirming Obama's lower court nominees at a snail's pace, reports Laura Litvan: "Obama has submitted to the Senate 63 trial court nominations and 22 for the appeals courts. At the same point in his first term, George W. Bush had nominated 83 trial judges and 32 for the appeals courts, according to Russell Wheeler, a scholar at the Brookings Institution in Washington. The Senate has confirmed nine Obama appellate nominees, three fewer than for Bush at a comparable point for the former Republican president. The Senate has confirmed 27 of Obama's nominees to be trial judges, compared with 51 for Bush."

Children conceived in vitro are being denied Social Security survivor benefits:

A new study indicates that health care reform will make Medicare more sustainable, reports Ricardo Alonso-Zaldivar: "Medicare spending will keep increasing, only not as fast. Under the law, spending will rise by 5.3 percent a year on average over the next decade, compared to 6.8 percent without the cuts. The Medicare trust fund will remain solvent until 2029, a gain of more than a decade from 2017. However, critics say trust fund solvency will only improve on paper, since actual savings from the Medicare cuts would have been spent to provide coverage for more than 30 million uninsured Americans."

Charter schools are minority students' best bet, write Paul Peterson and Martin West:"For the past four years, Harvard's Program on Education Policy and Governance, together with the journal Education Next, has surveyed a nationally representative cross-section of some 3,000 Americans about a variety of education policy issues. In 2010, we included extra samples of public-school teachers and all those living in zip codes where a charter school is located...Support for charters among African Americans rose to 49% in 2009, up from 42% in 2008. This year it leapt upward to no less than 64%. Among Hispanics support jumped to 47% in 2010, from 37% in 2008."

Closing credits: Wonkbook compiled with the help of Dylan Matthews and Mike Shepard. Photo credit: Julie Dermansky/The Washington Post Photo

By Ezra Klein  |  August 3, 2010; 6:26 AM ET
Categories:  Wonkbook  
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Next: Double counting


Health care (transformation) is one of the best issues this current administration has done thus far. With this change individuals will have the opportunity to seek professional and quality health care services. Who would want to return to the days of the horse and buggy, b/w tv sets, manual typewriters, pac man, you get the point? That's about how old the health care system was in the USA. Each day the news is filled with social tragedies in which lives are taken at the hands of known acquaintences and/or family members. Our society is stricken with the institutions of white collar crime permeating throughout this great nation and greed which tends to strike at the very fabric of our country. If you are looking for affordable health insurance check out . I hope everyone will soon recognize and use the resources made by this transformation to seek professional medical attention as the need arises rather than turning to illegal and criminal activities to resolve their issues.

Posted by: caryblair | August 3, 2010 7:08 AM | Report abuse

"A new study indicates that health care reform will make Medicare more sustainable, reports Ricardo Alonso-Zaldivar"

It's not a "study", it's basically a press release from the White House. And it is blatantly dishonest, because they are doing exactly what the CBO said not to do, and double-counting the Medicare savings.

Though I do love this sentence:

"However, critics say trust fund solvency will only improve on paper, since actual savings from the Medicare cuts would have been spent to provide coverage for more than 30 million uninsured Americans."

It is not "critics" that say that, it is the CBO and CMS.

Posted by: ab_13 | August 3, 2010 12:02 PM | Report abuse

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