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Posted at 8:37 AM ET, 02/21/2011

Wonkbook: Rare holiday edition

By Ezra Klein

Usually, Wonkbook doesn't go out on federal holidays. But we'd forgotten it was a federal holiday. And it seemed silly to waste the work. So here's a special, blog-only, edition of Wonkbook.

Top Stories

A House budget vote this weekend raised the likelihood of a government shutdown, reports Paul Kane: "The prospect of a government shutdown appeared more possible Saturday after the House passed a budget measure in the pre-dawn hours that cuts $61 billion - and was immediately rejected by Senate Democrats and President Obama...The debate over the size and scope of the government now moves to the Senate, where leaders have already said that the House plan cuts way too deep and that they are planning a far more modest proposal. But with the Senate out of session all next week, senators have left themselves just a few days to take up a bill before March 4, when the stop-gap measure that is currently funding the government expires. Given the tight time frame, it's unlikely the two chambers can agree on a compromise."

Ed O'Keefe reminds us what a shutdown looks like in practice: "Budget disagreements between Bill Clinton and Republicans prompted these incidents in 1995 and 1996, as federal agencies halted operations and stopped paying workers. For more than 20 days, about 260,000 federal employees in the D.C. area stayed home, or reported for duty only to be sent packing hours later...Agencies retroactively paid workers once the doors reopened, but many government contractors - paid separately by private employers - earned nothing during the shutdown...Obama also warned against suggestions of a shutdown. 'This is not an abstraction,' he said at his news conference last week. 'People don't get their Social Security checks. They don't get their veterans payments. Basic functions shut down. And it - that, also, would have an adverse effect on our economic recovery.'"

Nancy Pelosi has proposed legislation avoiding a shutdown by extending current spending rates for another mont -- but Boehner isn't interested, reports Jonathan Allen: "House Minority Leader Nancy Pelosi introduced a stopgap spending bill Friday night that would fund the government at current levels through March 31, laying down a Democratic marker against Republican efforts to cut from the budget...The government will run out of the authority to spend money on March 4 if Democratic leaders at the White House and in Congress can’t reach a compromise with House Republicans. House Speaker John Boehner (R-Ohio) has said that he won’t accept even a short-term bill that doesn’t cut from current levels, while Pelosi and her Senate counterpart, Majority Leader Harry Reid (D-Nev.), have taken the position that a stopgap measure should fund the government without any reduction."

A moderate Republican is trying to broker a deal in Wisconsin, report Douglas Belkin and Kris Maher: "With Wisconsin Gov. Scott Walker maintaining a hard line on his budget bill and Democratic senators refusing to return to Madison to vote, attention is turning to a group of moderate Republican senators to negotiate a compromise to the stalemate that has drawn thousands of protesters to the state capital for a sixth straight day. The proposal, written by Sen. Dale Schultz and first floated in the Republican caucus early last week, calls for most collective bargaining rights of public employee unions to be eliminated - per Mr. Walker's bill - but then reinstated in 2013...But with Democratic senators indicating they are willing to remain away from the capital indefinitely, state government remains shut down with no end in sight."

Surf pop interlude: Brian Wilson plays "Heroes and Villains" live.

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

Still to come: Combined federal, state and local debt exceeds that following World War II; the House spending bill blocks funding for health care reform implementation; unions are warming to the Obama administration after its response to the Wisconsin crisis; the House bill includes riders obstructing EPA climate regulations; and scientists try to build a brain in a computer.

Economy

Combined federal, state, and local debt has reached post-WWII levels, reports Steven Mufson: "The daunting tower of national, state and local debt in the United States will reach a level this year unmatched just after World War II and already exceeds the size of the entire economy, according to government estimates. But any similarity between 1946 and now ends there. The U.S. debt levels tumbled in the years after World War II, but today they are still climbing and even deep cuts in spending won't completely change that for several years... The key factor in the rapid drop in government debt, said Harvard University economist Kenneth Rogoff, was fast economic growth... But today the U.S. economy is in a polar opposite condition."

The Senate Democratic leadership is split on including Social Security in deficit talks: http://on.wsj.com/eHtzyX

The G20 has approved vague language on correcting global economic imbalances, reports Damian Paletta: "Negotiators from the world's leading economies haggled all night over seemingly technical details regarding how to measure global economic imbalances. They eventually produced a 53-word sentence intended to appease all sides--and open to interpretation by all sides...Negotiators from the world's leading economies haggled all night over seemingly technical details regarding how to measure global economic imbalances. They eventually produced a 53-word sentence intended to appease all sides--and open to interpretation by all sides...Officials acknowledged that it could create as much confusion as it does attention."

Ben Bernanke defended US monetary policy at the G20 conference: http://wapo.st/gRqChQ

We seem much more comfortable defaulting on debt to teachers than to banks, writes Ezra Klein: "There's been a lot of concern lately that states or municipalities will default on their debt. This is considered the height of fiscal irresponsibility -- an outcome so dire that some are considering various forms of federal support. But the talk that states or cities will default on their obligations to teachers or DMV employees? That's considered evidence of fiscal responsibility. And perhaps it's a better outcome, as defaulting to the banks makes future borrowing costs higher, and can hurt the state economy in the long-run. But it's not a more just outcome."

The Wisconsin governor's union bill isn't about spending, it's about reducing worker power, writes Paul Krugman: "Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes. So it’s not about the budget; it’s about the power. In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others...Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions."

The NFL is a model monopoly, writes Steven Pearlstein: http://wapo.st/gVXBK6

Taxes on harmful activities are one of the best ways to close the deficit, writes Robert Frank: "A tax on any activity not only generates revenue, but also discourages the activity. The second effect, of course, underlies the claim that taxes inhibit economic growth. That’s often true of taxes on useful activities, a primary source of current tax revenue. Job creation, for example, is discouraged by the payroll tax, and investment is discouraged by the income tax, which is also a tax on savings. But the reverse is true when we tax activities that cause harm to others...Taxes levied on harmful activities kill two birds with one stone. They generate desperately needed revenue while discouraging behaviors whose costs greatly outweigh their benefits."

Bipartisan negotiations, not budget proposals, will be the main vehicle for deficit reduction, write Erskine Bowles and Alan Simpson: "A bipartisan process is where this must start....The real test is whether he follows through on these good intentions. He has to provide the leadership necessary to create an environment in which it is possible to begin serious negotiations on the tough choices ahead. Building trust and mutual respect is critical to reaching a principled compromise on real fiscal reform. To accomplish something significant, a process has to be formed that puts the right people in the room - leaders who are willing to work together constructively and who are empowered to represent the administration and both parties in Congress. That cannot happen if all involved are not confident that others are negotiating in good faith.

Old technology and older music interlude: A "floppy disk organ" plays Bach's "Toccata and Fugue".

Health Care

The spending bill passed by the House strips funding to implement health care reform, reports David Nather: "The House voted Friday to block funding for the health care law in several ways...As expected, lawmakers approved Rep. Denny Rehberg’s amendment to the continuing resolution, which bars all payments to 'any employee, officer, contractor, or grantee of any department or agency' to implement the law...But they also gave unexpected victories to Steve King of Iowa, approving broader measures to deny any implementation funds in the continuing resolution and block salaries to enforce the entire law. And another measure by Jo Ann Emerson of Missouri to block funding for the Internal Revenue Service to enforce the individual mandate - the wildly unpopular requirement for everyone to get health coverage starting in 2014 -- was also approved."

The Obama administration has reversed a Bush-era rule allowing health workers to refuse to offer treatments for reasons of conscience: http://on.wsj.com/gHjSDI

Sen. Kent Conrad wants to revisit the pharmaceutical industry's deal with the administration, reports Alexander Bolton: "Conrad said he 'personally' liked the idea of empowering the secretary of Health and Human Services to negotiate prescription drug prices on behalf of Medicare beneficiaries. Finding savings in the Medicare prescription drug benefit, however, could run afoul of a deal President Obama cut with the drug industry in 2009. The administration pledged not to support collective bargaining on behalf of Medicare beneficiaries in exchange for $80 billion worth of discounts from the drug industry for seniors. Other Democrats are leery about reopening a contentious debate over healthcare reform, Medicare and Medicaid."

Health care reform will make the individual insurance market less of a nightmare, writes Donna Dubinsky: http://nyti.ms/ihSeT6

Domestic Policy

Union leaders are warming to Obama after his response to Wisconsin, report Glenn Thrush and Abby Phillip: "Obama’s strongly-worded opposition to GOP plans to repeal the collective bargaining rights of Wisconsin public state employees, which he termed an 'assault' on workers’ rights, has gone a long way towards repairing the relationship between the president and his union allies after two years of mutual disappointment and friction...'The president has been accused of watching situations to see how they develop so I think the fact that he issued a clear, clean, quick statement was critical for the relationship. It helps enormously,' said former SEIU president Andy Stern, a key Obama labor ally who served on his deficit commission."

Wisconsin's teacher's union is ordering members back to work: http://wapo.st/ht4x1q

The House spending bill cuts everything from cancer research to border security, reports Philip Rucker: "With both chambers in recess until the week of Feb. 28, Senate Democrats are mounting a public relations blitz this week highlighting specific cuts in the House bill that may be unpopular with the public, such as funding for cancer research. Democrats are also seizing on some line-item cuts to paint Republicans as 'schizophrenic' in their 'indiscriminate budget cutting,' a senior Democratic leadership aide said. For instance, the bill would cut at least $272 million in border security and immigration enforcement, including fencing and surveillance technology. A Democratic analysis shows this would scale back the number of agents patrolling the Mexican border from 21,370 to 20,500."

A new bill would bar the government from shutting down the Internet: http://politi.co/hTVEqq

Obama's proposed cuts to community anti-poverty programs are indefensible, writes Bob Herbert: "Community action agencies were established decades ago to undergird the fight against poverty throughout the U.S., in big cities, small towns, rural areas -- wherever there were people in trouble. It’s the only comprehensive antipoverty effort in the country, and the need for them has only grown in the current long and terrible economic climate. President Obama’s proposal to cut the approximately $700 million grant by 50 percent is an initiative with no upside. The $350 million reduction is meaningless in terms of the federal budget deficits, but it is enough to wreck many of these fine programs and hurt an awful lot of people, including children and the elderly."

We're straight-up building Skynet now interlude: Henry Markram tries to create a full computer model of the human brain.

Energy

The House spending bill strips funding for EPA climate regulations, reports Darren Goode: "House Republicans led a charge late into the night Friday against Obama administration decisions to regulate greenhouse gas emissions, block mountaintop removal mining and allow increased use of ethanol in gasoline. The continuing resolution faces an uphill climb in the Senate and a veto threat from President Barack Obama, but the myriad votes against the administration's energy and environmental initiatives this week will likely not be the last. Rep. Mike Simpson (R-Idaho), chairman of the Interior-EPA Appropriations subpanel, said the strong support for riders blocking the Environmental Protection Agency will build momentum for future attempts to pass more permanent pushbacks on the agency's regulations."

The EPA is beginning its regulatory review: http://bit.ly/hJ7BVq

Sen. Jeff Bingaman's retirement could hurt future clean energy efforts, reports Darren Goode: "The retirement of Sen. Jeff Bingaman -- the low-key New Mexico Democrat known for his ability to strike centrist deals with Republicans -- raises questions about the long-term impact his departure will have on the development of energy policy in future Congresses...For the last decade, Bingaman has been the top Democrat on the Energy panel, working in an unusually close bipartisan manner with Republicans...Bingaman’s decision probably will not affect his agenda this Congress, though it at least means the absence of fundraising and other distractions a reelection effort would bring. 'Perhaps it will provide more time for him to try and move these bipartisan clean energy bills through the Senate,' said Dan Weiss, a senior adviser at the Center for American Progress Action Fund."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.

By Ezra Klein  | February 21, 2011; 8:37 AM ET
 
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Next: What's an elite education worth? (Part II)

Comments

I think we should be more forthcoming when discussing the budgetary impact of these Wisconsin policies.


The fiscal impact of any legislation signed by Governor Scott Walker is only on the magnitude of $100 million.

The existing biennial deficit as measured before Governor Scott Walker took office is somewhere between $2.5 and $3.6 billion, depending on which expenses are counted.

For example, Governor Jim Doyle, big friend of transportation and infrastructure that you liberals are, borrowed about $500 million from state transportation funds and used it for healthcare instead.

He also borrowed about $200 million from state medical malpractice funds that Wisconsin courts have ordered Governor Scott Walker to pay back.

Posted by: krazen1211 | February 21, 2011 10:08 AM | Report abuse

Modest proposal:

Eliminate President's Day as a Federal Holiday and replace it with Election Day in November.

It would be a far better honor to Washington, Lincoln, et. al, to give everyone the day off to go vote and/or participate in the elections than to go to another sale in February.

Posted by: jnc4p | February 21, 2011 10:19 AM | Report abuse

"Sen. Jeff Bingaman's retirement could hurt future clean energy efforts, reports Darren Goode:"

Thank God, a few less jobs will go to China!

Posted by: johnmarshall5446 | February 21, 2011 11:05 AM | Report abuse

"The Wisconsin governor's union bill isn't about spending, it's about reducing worker power, writes Paul Krugman"

Damn, this is two weeks in a row when Krugman has been dead on right about something. Wonder how long he can continue this way?

Posted by: johnmarshall5446 | February 21, 2011 11:08 AM | Report abuse

--*calls for most collective bargaining rights of public employee unions to be eliminated*--

The public actions of the Wisconsin union members firmly establish that said members are unfit to enjoy the *privileges* afforded them under collective bargaining statutes, irrespective of the fact that collective bargaining statutes represent an illegitimate granting of power in the first place.

Posted by: msoja | February 21, 2011 11:46 AM | Report abuse

@msoja:

"Illegitimate" in what sense?

Posted by: eggnogfool | February 21, 2011 12:25 PM | Report abuse

--*"Illegitimate" in what sense?*--

Collective bargaining statutes violate the principles of private property and free association. They grant privileges to unions that are granted to no other entity in the country. The U.S. was founded on the principle that all would be treated equally under the law, but unions are carved out special considerations, contra to that principle. Hence, illegitimate.

Posted by: msoja | February 21, 2011 12:43 PM | Report abuse

Jennifer Rubin schools the boy Klein:

http://voices.washingtonpost.com/right-turn/2011/02/ezra_klein_writes_theres_been.html

Posted by: msoja | February 21, 2011 1:14 PM | Report abuse

""Illegitimate" in what sense? "

Public sector bargaining rights are not granted by the US Constitution or the Wagner Act of 1935.

They were granted by various state legislators to consolidate political power and to generate a source of funding.

Posted by: krazen1211 | February 21, 2011 1:24 PM | Report abuse

@msoja/krazen:

States don't have the right to pass laws?

Or what specific part of the constitution precludes such state legislation?

If you are making a Vinson-esque "the text of the Constitution cannot be reconciled with my views about government, and is therefore incorrect" you won't find me very receptive,

but if you actually have a point besides "I don't like it", please specify.

Posted by: eggnogfool | February 21, 2011 1:38 PM | Report abuse

"but if you actually have a point besides "I don't like it", please specify."

That's what the protestors are doing, right?

States have the right to either bar public sector unions (Virginia) or compel them (New York). What they do is up to them.

However, there is no reason not to examine the rationale of the Virginias and New Yorks of the nation.

We should also point out, of course, that Virginia's statute in 1993 barring unionization was signed by a Democratic governor with broad majorities.


We should also point out that Democrats in the US House and Senate tried to trample on Virginia's statute by passing the Public Safety Employer-Employee Cooperation Act, even though Virginia has stated they want nothing to do with unions. The PSEECA would have forced Virginia to bargain with police and firefighters collectively.

Thankfully it did not pass.

Posted by: krazen1211 | February 21, 2011 2:48 PM | Report abuse

i think it's a good thing for people to protest laws they 'don't like.' (which is what the unions/teachers are doing)

what i disagree with is declaring laws to be 'illegitimate' simply because you don't like them. (which is not what the unions/teachers are doing)

Posted by: eggnogfool | February 21, 2011 3:03 PM | Report abuse

--*States don't have the right to pass laws?*--

People can vote themselves all sorts of things, and they are, actively. Much of it violates their fellows' rights. It's the end days of the republic, and of the freedom that people enjoyed for so long.

Just because you can, does not legitimize what you do. Plainly, the collusion between governments and unions is a disaster, on all sorts of levels.

Posted by: msoja | February 21, 2011 3:09 PM | Report abuse

"what i disagree with is declaring laws to be 'illegitimate' simply because you don't like them. (which is not what the unions/teachers are doing)"

How about illegal violations of the Constitutional Quorum Clause?

Posted by: krazen1211 | February 21, 2011 3:18 PM | Report abuse

@msoja:
"Just because you can, does not legitimize what you do."

If you do it as an democratically elected official within the confines of your nation's liberal constitution, and your country grants people the freedom to leave at any time of their choosing,

then yes, I think "because you can" does legitimize whatever you do.

Posted by: eggnogfool | February 21, 2011 4:07 PM | Report abuse

I don't know if Americans are the MOST ignorant of their own history of any people, but they certainly are trying to lead the league. It is a fact however that relatively nothing is taught about labor history in our schools and the movie industry almost never makes films about it except the bad side, so I guess it's understandable.

If you have health insurance at work, no matter where you are, or what your occupation, thank the unions.

If you work only a 40 hour week, thank the unions.

If you company goes bankrupt, and you're unpaid wages have priority over lien holders, so that you don't get left out, thank the unions.

If you've ever been paid overtime for any job in your life, thank the unions.

If you think that using organized crime to intimidate workers is ancient history, look up Frank Perdue.

Only an ignorant fool, of which there are several writing on this board, think that union benefits only go to the union members, OR that if the unions are busted, companies won't try to take advantage of ALL
workers.

For a preview of a post-union world, go see how the workers have faired in any of the PE/LBO company takeovers the last 20-30 years.

And, if you have even the slighest fairness about you, you might ask how a worldwide near depression, that was caused solely and exclusively by fraud in Wall Street, and the real estate industry, is now being used as an excuse to break public sector unions.

Crazy world isn't it?

Posted by: johnmarshall5446 | February 21, 2011 6:04 PM | Report abuse

--*OR that if the unions are busted, companies won't try to take advantage of ALL
workers.*--

Union participation in the private sector is bordering on negligible. Where is the catastrophe you posit?

On the other hand, union participation in the government sector is at an all time high, and things are looking fairly grim.

Just coincidence?

Posted by: msoja | February 21, 2011 6:18 PM | Report abuse

--*and your country grants people the freedom to leave at any time of their choosing,*--

Leaving isn't an option for most people, nor does such an option bear on the moral or political worth of legislation.

Further, U.S. citizens are not free to leave. The government will insist on extracting several pounds of flesh if one tries.

http://www.highbeam.com/doc/1G1-181770662.html

Posted by: msoja | February 21, 2011 6:50 PM | Report abuse


When you're shopping quotes from lenders, beware of points that they'll try to impose on your refi. Each point is a fee of 1% on the amount you borrow. I worked with "123 Mortgage Refinance" search online for them. I would strongly recommend them since they got me 3.24% rate on my mortgage refinance.

Posted by: ellielewis55 | February 22, 2011 4:01 AM | Report abuse

popular websites like printapons and retail me not has coupons for pretty much any shopping site I've gone to most of the coupons are valid drops down with coupons without me having to search for them

Posted by: patsygwhite | February 22, 2011 5:44 AM | Report abuse

Dos anyone think that the Dems will shutdown the gov now that the House gave them the $ to keep it operating.

Yes?
No?

Posted by: illogicbuster | February 22, 2011 8:05 AM | Report abuse

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