Wonkbook: $32 billion in cuts; decreased mortgage backing; efficiency initiative
Matthews is writing Wonkbook while Ezra is traveling.
House Republicans have proposed $32 billion in cuts, reports Lori Montgomery: "House Republicans pledged Thursday to slice more than $32 billion from agency budgets over the next few months, firing the opening shot in a battle over government spending that is likely to dominate debate heading into the 2012 presidential campaign. The figure, announced by House Budget Committee Chairman Paul Ryan (R-Wis.), represents an unprecedented rollback that would force some domestic agencies to immediately slash spending by as much as 20 percent, independent budget analysts said...A group of conservative Republicans is demanding even deeper cuts and vowing to offer a plan to slash $100 billion from agency budgets when House leaders bring a spending bill to the floor Feb. 14."
The White House will propose reducing government backing for mortgages, report Zachary Goldfarb and Brady Dennis: "The Obama administration is likely to recommend reducing the size of mortgages eligible for government backing, according to current and former officials, a move that could make getting a home loan in high-priced areas such as the Washington region more expensive. Administration officials, who are preparing a white paper on overhauling the nation's housing finance system, are looking at scaling back the support provided during the mortgage crisis to help the ailing real estate market...The report, which will in part address the fate of the troubled mortgage giants Fannie Mae and Freddie Mac, is scheduled to be released as soon as next week."
President Obama unveiled a new energy efficiency plan in a speech yesterday: "Today, here at Penn State, I’m announcing what we’re calling the Better Buildings Initiative, and it’s a plan to dramatically improve the energy efficiency of America’s businesses over the next decade...What we’re saying to people is if you’re willing to make your buildings more energy-efficient, we’ll provide new tax credits and financing opportunities for you to do so. And this plan would build on the HOMESTAR program we proposed last year, which would have provided rebates of up to $3,000 for homeowners to make their own homes more energy-efficient. And these are upgrades that could save families hundreds of dollars each year in energy costs."
Music video interlude: The Go! Team's "Ready to Go Steady".
Still to come: Tim Geithner's talks on corporate tax are getting mixed reactions; Virginia's attorney general wants quick Supreme Court review of health care reform; Harry Reid may ask for earmarks next year; public health groups are backing EPA action on climate change; and two corgis play tetherball.
Stakeholders are skeptical that Tim Geithner's corporate tax talk will result in action, reports Brady Dennis: "Timothy F. Geithner can't seem to talk enough these days about corporate tax reform. From D.C. to Davos, the Treasury secretary has chatted up chief executives and academics, bankers and labor groups, Republicans and Democrats, all in the name of fixing a tax code that most everyone agrees could use a major overhaul...Some of those who attended the powwows have left with the impression that little real action lies ahead...Others, however, see an administration determined to pursue real changes."
Tim Geithner says Sen. Pat Toomey's default-avoidance ideas would be "quite harmful if enacted".
Ben Bernanke thinks the unemployment recovery will take years, reports Neil Irwin: "The economy is poised to grow more rapidly this year, Federal Reserve Chairman Ben S. Bernanke said Thursday, dismissing fears that rising fuel prices will trigger broad-based inflation. But he emphasized that it will still take several years before the unemployment rate comes down to normal levels. Speaking at the National Press Club and, in a rare step, taking questions from journalists, Bernanke gave a mixed assessment of the nation's economic prospects but left little doubt that he views getting the job market on track as the top priority for the Fed."
Behavioral economics supports government welfare spending, writes Mike Konczal: "Shouldn’t loss aversion, overconfidence, time-inconsistent discounting and difficulty following statistical probabilities lead a behavioral person to be made better off by universal health care and old age pensions? The probability of managing an individual investment portfolio as well as estimating the chances and subjective experience of being destitute in old age is difficult to estimate individually and the tail risk of the loss that occurs in poverty would be particularly painful. The same statement should be true for health care."
A new paper suggests another economic crisis could come in four years, writes Annie Lowrey:
Tax expenditures should be capped alongside spending, writes Howard Gleckman: "If Congress is going to freeze direct spending, why shouldn’t it also cap those tax subsidies that are essentially identical to spending? These tax expenditures are effectively spending programs run through the revenue code. They include the tax exclusion for employer-sponsored health insurance, the mortgage interest deduction, tax-free interest on state and local bonds, and dozens of others. Think of it this way: Congress could write you a check for, say, $300, to help underwrite your monthly mortgage payment, or it could give you a deduction that cuts your taxes by the same $300. Economically, it makes no difference. "
Adorable animals being athletic interlude: Two corgis play tetherball.
Virginia's attorney general wants the Supreme Court to review it now, reports Rosalind Helderman: "Virginia will ask that the U.S. Supreme Court immediately review the state's constitutional challenge to the federal health-care overhaul, a rare legal request to bypass appeals and ask for early intervention from the nation's highest court, Attorney General Ken T. Cuccinelli II said Thursday....The Justice Department will oppose the motion, saying that the case should be fully heard by lower courts before the Supreme Court takes action. The high court has granted such requests infrequently, and many experts said they think Cuccinelli's filing is a longshot."
The administration's head of health care IT is leaving.
The Obama administration is advising states on how to save money on Medicaid, reports Robert Pear: "Fearing wholesale cuts in Medicaid by states with severe budget problems, the Obama administration told governors on Thursday how they could save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud. However, the administration refused to say whether it would allow states to adopt stricter eligibility standards that would, in effect, throw low-income people off the Medicaid rolls and eliminate their insurance coverage...Governors said the ideas, though constructive, were not nearly enough."
If the individual mandate is unconstitutional, so is Social Security privatization, writes Jonathan Cohn.
Harry Reid might request earmarks next year, reports Manu Raju: "It turns out Senate Majority Leader Harry Reid may seek earmarks next year, after all. Speaking to reporters Thursday in the Capitol, Reid responded to the earmark ban announced by the Senate Appropriations Committee this week, saying it amounts to a 'one-year moratorium' necessary to 'get the appropriations bills done, and with [President Barack Obama’s veto threat] hanging over, we can’t get them done,' he said. Asked if he might seek earmarks in 2012, Reid told POLITICO, 'Sure.'"
A quarter of for-profit college students who take out loans default on them.
The GOP spending plan includes billions in defense spending, reports Tim Fernholz: "House Republicans...have included a surprise cut of $16 billion for defense and other security programs...Because House appropriators have the authority to set specific limits for all categories of discretionary spending, they could choose to ignore Ryan's call to allocate some of the cuts to security programs. Alternatively, the security cuts could simply hit programs that Defense Secretary Roberts Gates has already targeted for cancellation, such as the Marine Corps' Expeditionary Fighting Vehicle produced by General Dynamics and the Army's surface-launched advanced medium-range air-to-air missile developed by Raytheon."
Patent reform has hit a wall.
Simpsons interlude: Every McBain movie clip, edited together.
Public health groups are backing the EPA's climate regulations, reports Andrew Restuccia: "A coalition of public health organizations in the coming weeks plans to step up efforts to oppose legislation that would block or delay Environmental Protection Agency climate rules. The American Lung Association recently hired Peter Iwanowicz, a former New York state environmental official, to head up a new campaign to pressure lawmakers to reject efforts to limit EPA's authority to regulate greenhouse gas emissions. Iwanowicz is working to build a coalition of public health groups to inform lawmakers about the health risks of increased levels of pollutants like carbon dioxide in the atmosphere."
The government is backing an $1 billion plan to make gasoline from wood.
Events in Egypt may spur Senate action on energy, reports Darren Goode: "The heads of the Senate Energy and Natural Resources Committee said today that rising tensions in Egypt should spur action on reducing foreign oil imports. But what was evident at a hearing in the panel this morning on the outlook of the energy and oil market was that the direct effect of Middle East protests on oil and gas prices is murky at best and may be short-lived...Energy and Natural Resources ranking member Lisa Murkowski (R-Alaska) said the rising tensions in Egypt and elsewhere in North Africa should be 'a wake-up call' for the United States to pursue an energy policy 'that promotes all forms of energy' domestically."
A GOP House member is backing anti-EPA legislation despite voting for cap and trade in 2009.
Dylan Matthews is a student at Harvard and a researcher at The Washington Post.
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