Wonkbook: Voters don't care about the deficit; lame duck looks lame; junior Dems pushing on filibuster reform
Here's the dirty little secret that Washington's politicians know but its elites want to deny: Voters don't really care about the deficit. And don't take it from me. Take it from them: A CBS News poll found that only four percent want the new Congress to put deficit reduction first. That was far behind economy/jobs (56 percent) and health care (14 percent).
This is why the Simpson-Bowles proposal is getting lots of attention from budget wonks and policy writers but few endorsements from active politicians -- even the ones who served on the commission. It's also why we're having a discussion about cutting taxes by somewhere between $3 trillion and $4 trillion without putting so much as a penny towards offsets. And think Democrats' traction against the tax cuts for the rich represent deficit concerns? I don't. It's about class resentments, particularly the feeling middle-class folks have that the wealthy have gotten too much in recent years.
That's not to say voters like the deficit. They don't. And it's not to say they wouldn't like to see it go down. They would. But at the expense of other people, not themselves. Here's Wonkbook's prediction: We've just had an election that many people will tell you was about the deficit. But over the next two years, Congress will pass legislation increasing the deficit by vastly more than it did in the last two years. Any takers?
Housekeeping: You'll notice a new section today for health care. As the politics of repeal and/or revision heat up, and so too does the work of implementation, we're going to start covering that more closely. And because both health care and domestic policy have more life in them than energy legislation does right now, they'll both come before it from here on out. Finally, many thanks to Dylan Matthews who kept Wonkbook going while I was on vacation.
POLL: Only 4 percent of voters want the new Congress to prioritize deficit reduction: http://bit.ly/bCTlMO
Congressional Democrats are expecting to accomplish less than they'd hoped during the lame duck session, reports Lisa Mascaro: "Democratic leaders are pressing an agenda that would extend middle-class tax cuts, fund the government and perhaps repeal the ban on openly gay men and women serving in the military...Republicans must weigh the political costs of promoting a limited lame-duck agenda that obstructs Democratic initiatives. Their preference is to focus these next few weeks on immediate fiscal matters. They intend to block what could be the last opportunity in years to repeal the 'don't ask, don't tell' ban on openly gay military personnel as well as a Democratic-led attempt to extend unemployment benefits to jobless Americans."
Junior Democrats in the Senate are pushing ahead with filibuster reform, reports J. Taylor Rushing: "Sen. Tom Udall said he will force a motion on the first day of the next Congress to have Vice President Joe Biden adopt new rules for the two-year session. Then, Udall said, he will seek consensus among senators from both parties to lower the 60-vote threshold for procedural motions. Only a simple majority of 51 votes would be necessary for such a move, and Udall said he expects support from some Republicans...Tom Udall is correct there will be some GOP support for the effort. Sen.-elect Dan Coats (Indiana), who knows the Senate well from his 10-year tenure from 1989 to 1999, said in a Fox News interview this month that he endorses filibuster reform."
Obama is prioritizing free trade deals -- but finding them harder than he'd hoped, report Jonathan Weisman and Elizabeth Williamson: "The White House is increasingly betting on a revival of U.S. exports to revive a moribund job market and might also be acknowledging tensions with business that contributed to Democrats' midterm election losses...[but] The trip was a rough one for the president. The U.S. was unable to persuade other countries to agree to measures it maintains are necessary to promote growth. Other nations slammed the U.S. Federal Reserve's decision last week to pump $600 billion into the economy. Mr. Obama didn't complete a long-stalled trade deal with South Korea, under pressure from trade antagonists led by Ford Motor Co. and U.S. trade unions."
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Mid-2000s flashback interlude: Bloc Party play "Like Eating Glass" on Later with Jools Holland.
Still to come: Banks and hedge funds are investing in private lawsuits that they think will pay off; Nancy Pelosi is not interested in reforming the mortgage-interest tax deduction; Max Baucus is ready to compromise with the GOP on health-care reform; BP has now paid more than $500 million to the federal government for the Gulf cleanup; and a bricklaying machine that can "print" roads.
Banks and hedge funds are starting to invest in lawsuits, reports Binyamin Appelbaum: "Most investments are in the smaller cases that fill court dockets. Ardec Funding, a New York lender backed by a hedge fund, lent $45,000 in June to a Manhattan lawyer hired by the parents of a baby brain-damaged at birth. The lawyer hired two doctors, a physical therapist and an economist to testify at a July trial. The jury ordered the delivering doctor and hospital to pay the baby $510,000. Ardec is collecting interest at an annual rate of 24 percent, or $900 a month, until the award is paid. Total investments in lawsuits at any given time now exceed $1 billion, several industry participants estimated."
The Fed will allow banks to pay out bigger dividends: http://on.wsj.com/aIU5lT
The Bowles-Simpson deficit plan has prompted debate over the mortgage interest deduction, reports David Kocieniewski: " House Speaker Nancy Pelosi blasted the commission’s suggestions, saying it would force middle-class homeowners to subsidize tax breaks for the wealthy. Officials in the real estate and mortgage industries warned that ending the deduction could cripple an already ailing housing market...But tax policy experts say that for all its popularity, the value of the deduction in public policy is debatable. It was intended to encourage homeownership, but housing economists point out that countries like Canada and Australia, which do not allow mortgage interest deductions, have homeownership rates similar to those of the United States.”
We need a better word than "bailout", writes Robert Shiller: http://nyti.ms/a6EnvC
David Leonhardt challenges you to balance the federal budget: "By 2030, the needed deficit cut will equal about 5.5 percent of annual economic output. By comparison, domestic discretionary spending -- all of it, including Head Start, college financial aid, the F.B.I., medical research and airline safety -- will add up to about 3 percent of economic output, according to Congressional Budget Office projections. Military spending will equal about 4 percent. So the solution will have to revolve around tax increases and changes to health care and Social Security."
Play with Leonhardt's interactive deficit-reduction tool: http://nyti.ms/bLo4RF
Obama should be more aggressive in legislative battles, writes Paul Krugman: "Mr. Obama could and should be hammering Republicans for trying to hold the middle class hostage to secure tax cuts for the wealthy. He could be pointing out that making the Bush tax cuts for the wealthy permanent is a huge budget issue -- over the next 75 years it would cost as much as the entire Social Security shortfall. Instead, however, he is once again negotiating with himself, long before he actually gets to the table with the G.O.P. Here’s the thing: Mr. Obama still has immense power, if he chooses to use it."
The Fed's plan will not lead to runaway inflation, writes Alan Blinder: http://on.wsj.com/dxhPgW
Civil engineering interlude: A bricklaying machine that can "print" roads.
Sen. Max Baucus is defending his strategy for passing health care reform, and saying he'll compromise further with Republicans going forward, reports Matt Gouras: "The high-ranking Democrat...can't escape his prediction last summer that the health care bill needed GOP votes if it was going to last the years. At the time, liberals hammered him for trying to get Republicans on board. 'And I was right,' Baucus said...Baucus told The Associated Press in an interview Friday that unpopular provisions could be on the chopping block or subject to more negotiation due to the new Congress – perhaps even the personal mandate that Baucus still believes is needed to ensure charitable care isn't shifted onto others. On Friday, he unveiled legislation to strip a tax provision in the bill small businesses complained was burdensome."
Medicare's cost control measures are hardly "Soviet", writes Uwe Reinhardt: http://nyti.ms/dsIJY7
Massachusetts' health care reform has worked at cutting hospital costs, writes Tony Dokoupil: "A new study by the National Bureau of Economic Research is the first to track hospital costs in Massachusetts, where a 2006 law became a model for national reform. It finds that 93 percent of people in the Bay State are now insured. But despite an influx of patients, total hospital costs haven’t grown more than usual. New efficiencies probably helped: thousands fewer patients now use the ER for routine care or show up because of a preventable condition. And the average length of a hospital stay is down an hour per person. But University of Pennsylvania economist John Kolstad, who coauthored the study, speculates that the real heroes could have been insurers, who bargained with hospitals."
Health-care reform is bedeviled by selfish seniors, writes James Suroweicki: "The very people who currently enjoy the benefits of a subsidized, government-run insurance system are intent on keeping others from getting the same treatment. In part, this is because seniors think of Medicare as an 'entitlement'—something that they have a right to because they paid for it, via Medicare taxes—and decry the new bill as a giveaway. This is a myth: seniors today get far more out of Medicare than they ever put in, which means that their medical care is paid for by current taxpayers. There’s nothing wrong with this: the U.S. is rich enough so that the elderly shouldn’t have to worry about having health insurance; before Medicare, roughly half of them didn’t have it. But the subsidies that seniors get aren’t fundamentally different from the ones that the Affordable Care Act will offer some thirty million Americans who don’t have insurance. Opposing the new law while reaping the benefits of Medicare is essentially saying, 'I’ve got mine—good luck getting yours.'"
Obama endorsed a Congressional earmarks ban, reports Abby Phillip: "At the conclusion of his second weekend in Asia, President Barack Obama said in his weekly address Saturday that, although opening new markets is the 'single greatest tool for getting our fiscal house in order,' members of Congress should give up wasteful earmarks. 'I agree with those Republican and Democratic members of Congress who’ve recently said that in these challenging days, we can’t afford what are called earmarks,' he said...Some, including South Carolina Sen. Jim DeMint and several tea party-backed candidates, want a complete ban on the spending, which lawmakers add to sometimes-unrelated legislation."
The GOP will vote on an earmarks ban this week: http://nyti.ms/b6fCRc
The food safety bill will get a vote in the lame duck session, reports J. Taylor Rushing: "The bill by Majority Whip Dick Durbin (D-Ill.) passed the Senate’s Health, Education, Labor and Pensions (HELP) Committee on Nov. 18, 2009, with a 16-0 bipartisan vote. It had already passed the House in July 2009 on a 283-142 vote. But it was then forced onto the Senate’s back burner while the upper chamber grappled for most of this year with healthcare reform and financial regulation reform. Now, with the midterm elections in the past, Majority Leader Harry Reid (D-Nev.) plans to bring it forward for a procedural vote on Wednesday that leaders expect will pass."
The food safety bill will be, at best, moderately effective, writes Tom Philpott: "The best we can hope for from it is a step, probably a small one, in the right direction. It won't affect the meat supply, for example, which is one of the prime sources of hazard in the food system...So in that regard, the bill seems a bit toothless. The bill would increases inspections -- if still to a too-low level -- and give the FDA authority to declare mandatory recalls, when now 'the agency can only ask nicely,' as Elanor puts it."
The new Congress threatens welfare funding, writes Monica Potts: http://bit.ly/9YOm5m
History lesson interlude: An animation of Europe's shifting borders, from 1000 onward.
BP has paid back $518 million to the federal government for the Gulf cleanup, reports Lisa Rein: "The Government Accountability Office, in a report on the spill released Friday, reviewed the financial risks facing a trust fund Congress authorized in 1990 after the Exxon Valdez incident to pay cleanup expenses incurred by federal agencies. The pot of money, called the Oil Spill Liability Trust Fund, is financed by an 8-cents-per-barrel tax on petroleum. Auditors said there was about $1.6 billion in the fund as of the end of September. But to limit the government's exposure, the law caps at $1 billion the amount agencies can draw from it for cleanup costs - even if the oil company responsible for a spill pledges to reimburse the government for all costs."
The sea level will rise about three feet this century: http://nyti.ms/ahqNMG
The International Energy Agency says peak oil occurred in 2006, reports John Collins Rudolf: "According to a projection in the agency’s latest annual report, released last week, production of conventional crude oil -- the black liquid stuff that rigs pump out of the ground -- probably topped out for good in 2006, at about 70 million barrels a day. Production from currently producing oil fields will drop sharply in coming decades, the report suggests. The agency does not see energy doom on the horizon, however. By its estimation, after a short dip in production, crude production will reach an 'undulating plateau' of about 68 million barrels a day between 2020 and 2035."
The solar energy market is growing more competitive: http://nyti.ms/9KGrR2
Republican senators are alleging the White House tampered with an oil spill report, reports John Broder: "The senators, members of the Environment and Public Works Committee, called for hearings into the matter, contending that the White House had manipulated science for political ends, a claim Democrats frequently made about the George W. Bush administration. The Interior Department’s inspector general issued a report this week asserting that officials in the office of Carol M. Browner, the White House coordinator for energy and climate change policy, had changed some wording and moved some sentences in an agency report that ended up misrepresenting the views of the technical experts."
Climate hawks shouldn't expect much from EPA regulations, writes David Roberts: http://bit.ly/9b58Eg
Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.
| November 15, 2010; 6:46 AM ET
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