The most consistently disappointing firework I got during the fourth of July holiday growing up was the commonly termed “black snake.” You know, those little tubes that, when lit, silently unfurl into a longer grayish-black tube with some pitiful smoke. It’s got to be the most banal response to setting something on fire.
That was the general political reaction to yesterday’s minimum wage estimates from the Congressional Budget Office. More smoke than flame, it produced some prior-confirming from John Boehner and defensiveness on the part of Democrats. Similarly, on the blogs, one could find the usually derp-logic, some astute political comeback as well as those understandably ‘wait a minute’ caveats. This is almost a given whenever the CBO releases a report on a politically contentious matter, and is especially true when the actual literature itself “has never persuaded anyone” to change their mind.
Still, the left-of-center skepticism towards the agency’s estimates on that level of job loss isn’t unfounded. Read the rest of this entry
The non-partisan Congressional Budget Office released an estimate on Tuesday of the income and employment effects from proposals that would wage the minimum wage. Several members of Congress and the President have called for raising the historically low federal minimum.
Prompted by several inquires from Congresspersons the CBO provides their best guess on what would happen if the wage was raised to either $9.00 or $10.10 an hour by 2016.
Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.
In other words, there are (shocker) trade-offs. Specifically, the agency finds that a raise to $10.10 an hour (and then indexed to inflation) would, among other, smaller, effects: reduce employment by ~500,00 jobs, or by about 0.3 percent of total employment; substantially increase average weekly earnings for 16.5 million low wage workers; and would lift nearly 1 million Americans above the federal poverty level.
Zachary Goldfarb has a broader overview (with more charts!) if you’re interested. If you’ve spent any time at all following the never-ending minimum wage debate then these results probably won’t surprise you, and neither will the predictable reactions from pundits or politicians. It’s the type of report that perfect for disagreement, which probably explains why the agency didn’t include an estimate for the number of minds this report will change.¹
¹This is a joke.
Monday marked the 5th anniversary of the 2009 stimulus package — The American Recovery and Reinvestment Act (ARRA) plus related follow-up legislation. This week the Obama Administration will release its own report card and Time’s journalist Mike Grunwald received an advanced copy. To my eye he has always had a compelling argument for the overall effectiveness of the ARRA. Though I haven’t his definitive New New Deal (it’s on my perpetual to-read list), his accompanying article in Time was quite thorough.
Here’s his summary of the White House’s assessment:
The main conclusion of the 70-page report — the White House gave me an advance draft — is that the Recovery Act increased U.S. GDP by roughly 2 to 2.5 percentage points from late 2009 through mid-2011, keeping us out of a double-dip recession. It added about 6 million “job years” (a full-time job for a full year) through the end of 2012. If you combine the Recovery Act with a series of follow-up measures, including unemployment-insurance extensions, small-business tax cuts and payroll tax cuts, the Administration’s fiscal stimulus produced a 2% to 3% increase in GDP in every quarter from late 2009 through 2012, and 9 million extra job years, according to the report.
Of course there are quite a few aspects of the ARRA than can be substantively criticized, in its design or implementation, but Grunwald also reminds us that through the fall of 2008 (and as late as January of ’09) there was a bipartisan consensus that spending a large amount of money to stimulate the economy was obviously a no-brainer. That was before the idea became both a political convenient tautology — re; the stimulus was a failure because the government cannot stimulate — and a swag-bag for political ads by a minority party that relished its role as backseat driver during the largest economic collapse since the Great Depression.
The headline number of the new enrollment data released by HHS on Wednesday was that nearly 3.3 million people have selected plans through either the state-based (SBM) or federally-facilitated (FFM) Marketplaces since Healthcare.gov launched last October. More still: youth enrollment is up by a few percentage points; the vast majority have qualified for financial assistance; most folks are choosing silver plans, etc.
Feel free to check yesterday’s post if you haven’t already, but there’s a lot more beneath those glances. The data I didn’t delve into were the updated Medicaid/CHIP determinations buried in Appendix C (page 48) of the report. The number of individuals determined to be eligible for either program, through both SBMs and FFMs, are around 3.2 million.
One of the metrics to look for in these data is where eligibility has been determined in states that have so far refused the Medicaid expansion. A point of interest for health care researchers, and Governors with tight budgets in states opting out, has been to what extent general knowledge and outreach of the new health care law would coax previously eligible, yet still uninsured, residents into existing Medicaid programs — a phenomenon generally termed the “woodwork” effect. Read the rest of this entry
This post has been updated.
Nearly 3.3 million Americans have enrolled through the private health insurance exchanges established by the Affordable Care Act since October of last year. That number comes from a Department of Health and Human Services report released late Wednesday detailing new enrollment data. While some experts had accurately expected a slight drop off from December, last month actually beat expectations with over 1.1 million plan selections — a 53 percent increase over the previous three months.
According to the National Journal, with two months left to go, the law is a little bit over halfway towards the Congressional Budget Office’s post-Healthcare.gov estimate of 6 million enrollees by March 31st. One other particular detail from January was much-welcomed by officials, as the number of young adults (ages 18-34) selecting plans grew by three percentage points between January and the previous three months combined.
You may have missed it late Tuesday but the debt ceiling was quietly suspended until March of next year by the Republican-controlled House of Representatives. Unable to muster a consensus around which policy change to attach to lifting the debt ceiling this time, and with only the briefest of grumbling opposition, the Temporary Debt Limit Extension Act secured enough Republican ayes (28) to guarantee passage at 221-201. That included a good chunk of the leadership team, notably excluding Paul Ryan, and with Democrats providing the rest of the votes.
Raising the ceiling, which will allow the federal government to pay for previously authorized appropriations, has been the source of much well-warranted angst since the GOP took back control of the House in the 2010 midterm elections. Such tactics got the newly resurgent House GOP a slew of badly designed deficit measures in 2011 (i.e., the Budget Control Act) but the initial success was never repeated, and last fall’s shutdown fiasco seemed to finally discredit playing chicken with the government’s obligations. The passage of a suspension last night, following on the heels of the Ryan-Murray budget compromise, marks the end of a Tea Party-driven era of high-stakes debt limit negotiations over the full faith and credit of the United States. Read the rest of this entry
The Obama administration is partially delaying the employer mandate contained in the Affordable Care Act, again. The news dropped late Monday as a part of a final regulatory ruling from the Treasury Department. This follows on the heels of late summer’s delay for all eligible businesses through 2014. The health care law generally requires companies to offer comprehensive, affordable, health insurance coverage or face a penalty if they employ more than 50 full-time workers.
According to the Department’s fact sheet, this change is more limited in scope and only affects two types of firms: medium-sized business with between 50 and 99 full-time employees will not be subject to the law’s coverage requirements for another year; large businesses will still have to offer insurance beginning in 2015, but will only be required to cover 70 percent of full-time employees until 2016 — when the baseline 95 percent must be met to satisfy the mandate.
It’s easy to be cynical about this latest delay, for supporters and detractors of the law alike. Of course it’s also entirely valid to assume politics are involved, whether through pressure from the business community or election-year sensitivity from an administration invested in Democrats keeping control of the Senate. Whatever your reaction the new delay shouldn’t have much of an effect policy wise. Read the rest of this entry
The now all to familiar dance around raising the debt ceiling is playing again in Washington. The drop dead date has come and gone. Treasury Secretary Jack Lew has begun the machinations which move money hear and there, and technically avoid default. Some say Lew can do this for weeks, so there is no urgency to resolve the ceiling limit. Hmmm.
Just exactly what type of law is the debt ceiling law anyways? Why would a country have such legislation?
In the wisdom of past Congresses, the notion that there needed to be some financial reigns put on the Federal Government. Government was spending too much and borrowing to cover the gap between what it spent and what it received in tax revenues. So Congress put a cap on what Government could borrow. Unfortunately, Congress did little or nothing about what Government could spend even though it had put in place legislation which put a limit on borrowing. What?
Congress acted as if they were not part of the Government. They acted as if government spending was being done by someone else. Hmmm.
The term balanced budget appears to be a foreign language word for Congress. Congress routinely passes unfunded legislation, each time emphasizing the urgency and need for a spending bill but remaining silent or vague on how the government will fund the measure.
The second category of abuse is labeled “entitlements”. This class of legislation specifies government spending, in perpetuity, and unrelated to whether there are sufficient tax dollars to cover. So for example, with Medicare and Medicaid, we have an aging population (more people collecting for longer periods than having paid in taxes) and increasing healthcare costs (rising faster than anticipated in original legislation) are driving a year after year deficit regardless of whether Congress passes a balanced budget on discretionary spending. Hmmm.
So for strong supporters of a truly balanced budget, one can understand their frustration. What one cannot understand is the logic that says “we, Congress, have authorized the Government to spend all this money which even if we could stop today would continue as a matter of law, so we have decided not to pay our bills when they come due”. Isn’t that what third world countries do?
One can agree to disagree on whether specific Government spending is wise, and one can also agree or disagree on whether the tax code is sufficient and fair to cover the money spent. What seems to avoid comprehension is on what basis does Congress think it is not obligated to pay for what it has spent?
More simply said, if the Country is not to borrow, than why are not taxes being increased immediately to cover these deficits? Why is Congress not acting to really eliminate deficits?
Explanations quickly drift to “politics”. Blame it on politician A or B, or Party R or D, or ideology C or P. There are plenty of excuses and explanations. It must be a tough problem because not since Bill Clinton was President has there been a balanced budget.
Back to the Debt Ceiling Increase standoff. The best explanation is the immense frustration felt by many “R’s” and “C’s” because they cannot get agreement on a balanced budget that meets their principles. Apparently, they reason that if we can’t get our way, then we will scorch the earth.
Allowing the Country to default on its debt is truly playing with fire. It is far worse than shutting down the government by refusing to authorize spending. Those favoring default are simply not sufficiently competent to govern.
The Republican Party and especially its conservative wing must get a grip on itself. Regardless of how unworkable their plan of no new taxes and deep entitlement cuts might be, Republicans will serve the Country far better trying to enact that plan than to block increasing the debt limit and pushing the Country into default.
Republicans ask, “well why won’t the President negotiate with us to achieve reductions in entitlements in return for an increase in the debt ceiling”?
The simplest answer is double jeopardy. Only a few weeks ago, Congress passed a budget for discretionary spending. Why wasn’t taxes and entitlements tied into that budget? For what ever the reasons it wasn’t. Congress in essence said with its budget “we accept the consequences”. Raising the debt ceiling is the first and most obvious consequence.
When Republicans shut down the Government last fall, the world didn’t end but a lot of Americans were inconvenienced. The shut down was a poor negotiating strategy because the “inconveniences” were not related to the Republican negotiating goals. Blocking the debt ceiling increase will have a similar blow back, only far worse.
What drives these conservatives screams that they are unfit to govern. Hmmm, maybe that’s the silver lining.
I’m old enough to remember when we were discussing the Grand Ole Party taking health care reform seriously with the Patient CARE Act proposal. That was last week. This week the muddled debate over the Affordable Care Act’s labor supply effects from the took center stage. In effect, the red meat of returning to “Obamacare is a jobs killer” proved too tempting a rhetorical fruit not to bite and discard whatever tentative seriousness held sway over the blogosphere — especially given that their latest reform idea would encounter similar labor supply issues.
Such a quick turnaround is perhaps evidence in favor of Jonathan Chait’s point from Thursday; that while the “game has been changed…the disintegration of the latest GOP health-care plan shows, the Republican Party is not yet remotely prepared to play it.” I’ll reiterate that I still think the Senate GOP proposal is a meaningful leap over a very small hurdle. If this weeks response is any indication, though, like Chait does it’s probably best to see it as ‘a’ moment, certainly not ‘the’ moment Republicans accepted the post-ACA status quo.
That being said, the most recent monthly tracking poll from The Morning Consult indicates that at some point, at the very least politically, Republicans will have to return to this issue of seriousness. Read the rest of this entry