Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. (This is a special Columbus Day edition to track developments on the federal-government shutdown and the debt ceiling.) To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.
Until now, the shutdown fight has been entirely about Republican demands. Over the weekend, Republicans learned Democrats have some demands, too.
On Friday night, and even into Saturday morning, a Senate deal looked close at hand. The agreement would be based on a proposal by Sen. Susan Collins (R-Maine) to pass a bill funding the government for six months and raising the debt ceiling in return for a delay of the medical device tax and some other miscellanea.
But Senate Democratic leadership killed the idea on Saturday. Why? Because the bill funded the government for six months.
Why? It all comes down to sequestration.
Collins's bill funds the government at sequestration levels. And even though Senate Democrats had already passed a bill funding the government at sequestration levels for six weeks, they decided that six months is too long. Six months would mean allowing sequestration's 2014 cuts to trigger.
Democrats really, really hate sequestration. And they believe it will be much worse in 2014 than it was in 2013. It would be going too far to say they have a plan for stopping it. But they believe that agreeing to it for six months means giving up on stopping it.
Agreeing to it for six weeks, however, means there's an opportunity to revisit it in a month-and-a-half. Democrats hope the Republican leadership will, by that time, be so terrified of another shutdown that they'll be eager to cut some kind of deal.
And if they're not? Senate Democrats admit they're not going to shut down the government over sequestration. But maybe the tea party will force another government shutdown, further wounding Republicans in 2014. Or maybe there'll be another short-term CR, which will mean another chance to revisit sequestration a few weeks later.
As Democrats see it, with sequestration in place, spending isn't going any lower. So they may as well set up as many opportunities as possible to push it higher.
This strategy puts the Democrats in the awkward position of explaining why they'll accept a six-week CR but not a six-month CR. Refusing to reopen the government because the Republicans want to keep it open for too long is a hard argument to make.
The rejection of the Collins deal is also infuriating and uniting Senate Republicans. "I know we can't complain too much about our self-inflicted wounds, but the Democrats have gone too far," fumed Sen. Lindsey O. Graham (R-S.C.). "What's happened over the last couple of days is the other side of the aisle has gotten a tick too cute," said Sen. Bob Corker (R-Tenn.). Even some Senate Democrats are continuing to work with Collins.
To Senate Minority Leader Mitch McConnell (R-Ky.), the Democrats' position here is an opportunity. "There is a bipartisan plan in place that has the support of Democrat and Republican senators," McConnell said Sunday. "It would reopen the government, prevent a default, provide the opportunity for additional budget negotiations around Washington's long-term debt, and maintain the commitment that Congress made to reduce Washington spending through the Budget Control Act -- the law of the land. It does all this while maintaining our commitments to reduce spending, cutting an Obamacare tax and improving anti-fraud provisions in the law. It's time for Democrat leaders to take 'yes' for an answer."
Wonkbook's Number of the Day: 15.5 million. That's the number of Americans with high-deductible health plans in 2013. It's up from 1 million in 2005. A "high deductible" is defined as $1,250 or more for individual coverage per year.
Wonkbook's Quote of the Day: "These are generally catastrophic economic events," said Professor Eugene N. White, an economics historian at Rutgers University in New Brunswick, N.J., of a sovereign default. "There is no happy ending."
Wonkbook's Graph of the Day: The U.S. Treasurys curve, 1990-2010, in 3-d.
Wonkbook's Top 5 Stories: (1) what you need to know about the fiscal mess; (2) Obamacare, the other mess; (3) the Nobel in economics; (4) the 'bed mandate'; and (5) the sunlight from Snowden.
1. Top story: A top-of-the week update on the shutdown and the debt ceiling
Senate leaders' talks on shutdown, debt limit stall as sides await market's reaction. "What started as a mad dash to strike a deal to lift the federal debt limit slowed to a crawl over the weekend as stalemated Senate leaders waited nervously to see whether financial markets would plunge Monday morning and drive the other side toward compromise. Republicans seemed to think they had more to lose. After talks broke down between President Obama and House leaders, GOP senators quickly cobbled together a plan to end the government shutdown now entering its third week and raise the $16.7 trillion debt limit. Senate Minority Leader Mitch McConnell (R-Ky.) then asked Majority Leader Harry M. Reid (D-Nev.) to elevate negotiations to the highest level." Lori Montgomery and Rosalind S. Helderman in The Washington Post.
...But will the bitter rift between McConnell and Reid endanger a deal? "[I]f the two wily 70-somethings who are trying to resolve the current crisis make a deal once again, they will do so despite an increasingly bitter and distant relationship that some say is so fraught with animosity that it endangers their talks...On the Senate floor, their rhetoric has grown so heated that their colleagues recently held the equivalent of an intervention. Off the floor, their relationship has been marked by personal slights...Some longtime friends fear that Reid and McConnell's relationship has become so frayed that a deal might not materialize before Thursday." Paul Kane in The Washington Post.
...Well, we don't have any deal from them yet. "The disagreement extended the stalemate that has kept much of the government shuttered for two weeks and threatens to force a federal default. The core of the dispute is about spending, and how long a stopgap measure that would reopen the government should last. Democrats want the across-the-board cuts known as sequestration to last only through mid-November; Republicans want them to last as long as possible." Jonathan Weisman in The New York Times.
@pourmecoffee: Welcome to Simple Solutions Sunday! Government closed. Open it. Debt ceiling reached. Raise it. I hope you enjoyed Simple Solutions Sunday.
Senate Democrats want to reopen the fight over sequestration. "Democrats made plain that one of their top priorities was to diminish the next round of across-the-board spending cuts, known as the sequester, due to take effect early next year. Many Republicans, including Senate Minority Leader Mitch McConnell (R., Ky.), oppose retreating from those cuts. That set up a clash that seemed almost as intense as the one that caused budget talks between House Republicans and President Barack Obama to collapse Friday." Janet Hook in The Wall Street Journal.
...And that's why the Collins budget plan collapsed. "On Friday night and Saturday morning there was real interest, including from some in the Senate Democratic leadership, in the deal proposed by Sen. Susan Collins to reopen the government and raise the debt ceiling in return for 1) keeping the sequester's spending levels, 2) delaying the medical device tax, and 3) strengthening income verification under the Affordable Care Act. But as Saturday wore on the skeptics won out." Ezra Klein in The Washington Post.
@dandrezner: This month, I was worried about massive GOP overreaching on gov't shutdown/debt ceiling. This week, I'm worried about mild Dem overreaching.
...Obama and Democrats, united by shutdown, looking for gains beyond it. "They are gambling that if they can hang together and remain tough to the end, they stand a chance to break a dangerous cycle that has taken hold in Washington one of legislating through brinkmanship, which has brought the government and the financial system to the edge of disaster at least four times over the past three years." Karen Tumulty in The Washington Post.
@bdomenech: Combo of Senate Rs not caring about debt ceiling (Toomey, Coburn, etc.) and Reid thinking it's politically advantageous is dangerous indeed.
The underlying issue, of course, is what it's always been: revenue. "Republicans refuse to raise additional tax revenue, and until they do, Mr. Obama will not support even his own tentative proposals for reducing spending on fast-growing social benefit programs, chiefly Medicare. During a White House meeting with Senate Republicans on Friday, he reiterated that the two go hand in hand, according to people who were there." Jackie Calmes in The New York Times.
@ezraklein: What's worrying is Senate Dems don't exactly have a plan for ending this fight (save GOP caves) or replacing sequestration
The House has given up. "Senate leaders began negotiations Saturday aimed at reopening federal agencies and avoiding a government default after every other effort to end Congress's impasse crumbled in the previous 48 hours...It was a dramatic turnabout from Thursday morning, when Boehner's leadership team signaled that it would support increasing the debt ceiling until almost Thanksgiving with the only demand being that Obama negotiate over a broader budget framework in the interim...The president, however, rejected Boehner's offer because it did not address reopening the government, which has been closed since Oct. 1. Instead, the White House grew interested in the Senate talks over Collins's plan because of its longer debt-ceiling window." Paul Kane and Lori Montgomery in The Washington Post.
...But will the House give it another go? "With just four days to go until the U.S. government reaches its borrowing limit, House Republican leaders are considering whether to move their own short-term debt limit bill in the early part of this week, according to GOP sources...House Republican leadership aides say if some compromise isn't unveiled by Reid and McConnell on Monday, Speaker John Boehner (R-Ohio) and other top GOP lawmakers could move to pass their own six-week extension of borrowing authority on Tuesday." Jake Sherman and John Bresnahan in Politico.
...Here's the GOP's latest poison pill, on the other hand. "The National Review's Robert Costa reports that House Republicans are preparing a six-week debt-ceiling extension that includes the Vitter amendment (see here for more on that bit of health-care trolling), strengthened income verification under Obamacare, and Rep. James Lankford's 'Government Shutdown Prevention Act.'...The bill creates an automatic CR for any regular appropriations bill not completed before the end of the fiscal year. After the first 120 days, auto-CR funding would be reduced by one percentage point and would continue to be reduced by that margin every 90 days...If Lankford wanted to incentivize both sides to come to a deal he'd propose a bill that paired automatic spending cuts with automatic tax increases. That way, both Democrats and Republicans would have reason to come to an agreement." Ezra Klein in The Washington Post.
Banks are dumping T-bills. "With Washington's fiscal standoff still unresolved, large financial firms have been unloading investments once considered pristine, suggesting a wild week ahead for markets. Banks are dumping short-term government debt, usually one of the most plain-vanilla investments available, amid fears that Congress and the White House won't reach an agreement by Thursday to raise the debt ceiling...Senior Treasury officials convened by phone Sunday afternoon to discuss the evolving market conditions, an agency official said...The Securities and Exchange Commission is monitoring bank capital levels and the amount of short-term Treasurys held by financial firms, among other things." Damian Paletta and Dan Strumpf in The Wall Street Journal.
@mattyglesias: Fundamental illogic of debt ceiling denialism if a breach has no consequences, why should Obama make concessions? Why not abolish it?
World should 'de-Americanize', says China following default fears. "In China, Xinhua, the official government news agency, said that as American politicians continued to flounder over a deal to break the impasse, "it is perhaps a good time for the befuddled world to start considering building a de-Americanised world"...Xinhua attacked America's pre-eminent position in the world, adding that "such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated"." Philip Sherwell and Malcolm Moore in The Telegraph (UK).
The U.S. would be the first major Western sovereign default since 1933 Germany. "Reneging on its debt obligations would make the U.S. the first major Western government to default since Nazi Germany 80 years ago. Germany unilaterally ceased payments on long-term borrowings on May 6, 1933, three months after Adolf Hitler was installed as Chancellor. The default helped cement Hitler's power base following years of political instability as the Weimar Republic struggled with its crushing debts. "These are generally catastrophic economic events," said Professor Eugene N. White, an economics historian at Rutgers University in New Brunswick, New Jersey. "There is no happy ending."" John Glover in Bloomberg.
@damianpaletta: Some perspective: at this point in the 2011 debt ceiling talks, everyone said the sky was falling as well. They still got a deal in time.
The IMF and World Bank are getting nervous about the U.S. "Leaders at World Bank and International Monetary Fund meetings on Sunday pleaded, warned and cajoled: the United States must raise its debt ceiling and reopen its government or risk "massive disruption the world over," as Christine Lagarde, the fund's managing director, put it...Many leaders at the World Bank and I.M.F. meetings said they believed the impasse would be resolved before Thursday, when the government would be at severe risk of not having enough money to pay all its bills on any given day going forward." Annie Lowrey and Nathaniel Popper in The New York Times.
@TheStalwart: No matter how much I hate debt ceiling brinksmanship, I just can't stand outside leaders telling us what to do.
Debt-ceiling breach would push economy into free fall, without a government safety net. "Economists roundly agree that no matter which course Obama chooses, a drop in federal spending that large would exert a huge drag on economic growth. And in contrast to what happens during a usual downturn the safety net expands to help the vulnerable assistance to seniors and low-income people could be delayed or reduced if Congress doesn't raise the debt ceiling. Officials may also have insufficient funds to operate major parts of the government that are open in a shutdown, such as the Federal Aviation Administration or the FBI." Zachary A. Goldfarb and Jim Tankersley in The Washington Post.
SUMMERS: In shutdown debate, focus should be on growth instead of deficit. "Current and future budget deficits are now a second-order problem relative to other, more pressing issues facing the U.S. economy. Projections that there is a major deficit problem are highly uncertain. And policies that indirectly address deficit issues by focusing on growth are sounder in economic terms and more plausible in political terms than the long-term budget deals much of the policy community is obsessed with...If even half the energy that has been devoted over the past five years to "budget deals" were devoted instead to "growth strategies," we could enjoy sounder government finances and a restoration of the power of the American example." Larry Summers in The Washington Post.
SATCHER: What if a flu breaks out and the CDC can't track it? "As director of the U.S. Centers for Disease Control and Prevention during the last government shutdown, in 1995-1996, I can attest to the very real potential for unnecessary pain, suffering and death when the work of public-health officials is curtailed. As a consequence of the current shutdown, the CDC has been required to furlough two-thirds of its staff, leaving only 4,000 people to conduct vital public-health responsibilities. This translates into reduced protection for Americans." David Satcher in Bloomberg.
KLEIN: Is America a bubble? "The markets' faith in the U.S. is long-standing and not easily dislodged. The dollar has been the world's reserve currency for decades, with the foreigners who hoard our cash providing essentially interest-free loans to the U.S. Treasury. The global appetite for Treasury bills produces similar gains, with purchasers -- including foreign governments buying in bulk -- lending the U.S. government money at minimal, even effectively negative, rates. The result is a huge economic advantage for the United States. All this comes from a deep confidence that the U.S. political system will make sound decisions -- a confidence, at this point, that few of the system's participants share and one that's hard to square with the evidence of the past few years. The simple fact is that Congress is getting worse at avoiding the traps it sets for itself." Ezra Klein in Bloomberg.
YORK: A counterfactual history without the shutdown. "[W]at if Republicans had put together a major campaign of ads, events, townhalls, speeches, hearings, web documentaries, publications, tweets, handouts, and more, involving Republican officials from the local level to influential governors to top leaders in Congress, to showcase the problems of Obamacare as October 1 approached?...But it didn't happen. The GOP chose instead to embark on its ill-fated drive to defund Obamacare. When that failed, Republicans made progressively weaker demands that the White House delay or somehow limit Obamacare, and those failed, too." Byron York in The Washington Examiner.
COLLENDER: Will the debt ceiling be raised in time? Flip a coin. "One of the biggest problem with the current shutdown/debt ceiling situation is that no one has any assurance that the person they're negotiating with has any authority to agree to anything. The president can't be sure congressional Democrats will go along with what he might agree to with Republicans, Boehner absolutely knows there is no guarantee that House and Senate Republicans will follow his lead and Senate Minority Leader Mitch McConnell (R-KY) won't be followed blindly by Senate Republicans. In other words, even if there were a deal it not clear who could agree to it." Stan Collender in his blog.
KRUGMAN: The Dixiecrat solution. "For a long time, starting as early as 1938, Democrats generally controlled Congress on paper, but actual control often rested with an alliance between Republicans and conservative Southerners who were Democrats in name only...And right now we have all the necessary ingredients for a comparable alliance, with roles reversed. Despite denials from Republican leaders, everyone I talk to believes that it would be easy to pass both a continuing resolution, reopening the government, and an increase in the debt ceiling, averting default, if only such measures were brought to the House floor. How? The answer is, they would get support from just about all Democrats plus some Republicans, mainly relatively moderate non-Southerners. As I said, Dixiecrats in reverse." Paul Krugman in The New York Times.
SCHEIBER: The inevitable Republican concession. "Senate Majority Harry Reid is going to strike a deal with his Republican counterpart Mitch McConnell at some point in the next few days. The deal will reopen the government for a medium length of timepossibly till January 15, when the next round of sequester cuts kick ingiving the two sides time to replace the sequester with something more appealing. The deal will also raise the debt ceilingmaybe for as little as a few months, maybe until after the 2014 election. Reid will give up almost no concessions in return for any of this, with the exception of one or two symbolic items, and he'll probably get some higher-than-sequester level of government funding (a top Democratic priority) for a month or two starting later this year. Pretty much every Democrat in the Senate will vote for the deal, along with at least five and maybe as many as 20 Republicans." Noam Schieber in The New Republic.
MANKIW: A parable for Washington. "A classic result in social psychology, called the Robber's Cave experiment, sheds light on the current dysfunctional political dynamic. It was conducted in 1954 by the psychologist Muzafer Sherif. Mr. Sherif took a group of 22 boys, 12 years old, to a summer camp in Robber's Cave State Park in Oklahoma...In the second week of camp, the Eagles and the Rattlers were brought together for competitive team activities like baseball and tug-of-war. Even though the boys had similar backgrounds, the competition was far from friendly. Taunting, name-calling and vandalizing the other team's property were common...In short, group identity and competition led to irrational and self-righteous hostility. Doesn't that sound like the political rhetoric we hear on the daily news?" N. Gregory Mankiw in The New York Times.
BOSKIN: Create another Simpson-Bowles. "This time a commission to fix wasteful spending might work. The commission must consist of highly respected, high-ranking officials from both partiesthe likes of Paul Volcker, Alice Rivlin, George Shultz and James A. Baker III who have no recent policy to defend. Then make Congress vote up or down on the recommendations (as they do on base closings), so voters can hold their officials accountable...[F]or every $2 of savings from reducing waste and inefficiency, ease up to $1 of the sequester spending caps. Lest projected savings evaporate before they occur, the 2-for-1 rule would apply only after the fact." Michael J. Boskin in The Wall Street Journal.
LUCE: Our sclerosis. "The longer the US squabbles over the basic legitimacy of government, the less hope there is of making it relevant for the 21st century...Mr Obama is on course to leave government in a weaker condition than when he found it. That is not the legacy he sought. Preventing default will not be enough. Mr Obama needs to make the case for what is essential." Edward Luce in The Financial Times.
DIONNE: Press harder from the left. "The key in politics is to snatch victory from the jaws of victory...Future negotiations must be premised on getting rid of sequester cuts that are hobbling our economy and on matching future cuts with new revenues...The president and his allies seem determined to seize this moment and not squander a triumph built on a willingness to stand firm against right-wing radicalism. Obama can't slip back into the style of deficit wrangling that so weakened him in 2011." E.J. Dionne in The Washington Post.
Music recommendations interlude: Arcade Fire, "Neighborhood #3 (Power Out)," 2004.
BASU: The end of poverty. "World Bank research predicts that if all countries grow at the same rates that they did over the past 20 years, with no change in income distribution, world poverty will fall to 7.7% by 2030, from 17.7% in 2010. If they grow faster, at the average rates recorded in the 2000's, the poverty rate will fall to 5.5%. In a new paper, David Dollar, Tatjana Kleineberg, and Aart Kraay analyze empirically the relationship between growth and poverty. Their comprehensive study draws on high-quality survey data from 118 countries and reaches a clear conclusion: the bulk of poverty eradication that took place in recent decades was driven by economies' overall income growth. More specifically, 77% of the cross-country variation in the income growth of the poorest 40% of the population reflects differences in average income growth." Kaushik Basu in Project Syndicate.
SUROWIECKI: Why CEO pay keeps going up. "Transparent pricing has perverse effects in other fields. In a host of recent cases, public disclosure of the prices that hospitals charge for various procedures has ended up driving prices up rather than down. And the psychological causes in both situations seem similar. We tend to be uneasy about bargaining in situations where the stakes are very high: do you want the guy doing your neurosurgery, or running your company, to be offering discounts?...Sunlight is supposed to be the best disinfectant. But there's something naïve about the new S.E.C. rule, which presumes that full disclosure will embarrass companies enough to restrain executive pay. As Elson told me, "People who can ask to be paid a hundred million dollars are beyond embarrassment."" James Surowiecki in The New Yorker.
STIGLITZ: Inequality is a choice. "[N]ew research by a World Bank economist named Branko Milanovic, along with other scholars, points the way to some answers [about inequality]...From 1988 to 2008, Mr. Milanovic found, people in the world's top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income." Joseph E. Stiglitz in The New York Times.
British comedy interlude: How to play chess properly.
2. Obamacare, the other mess
From the start, signs of trouble at HealthCare.Gov. ""These are not glitches," said an insurance executive who has participated in many conference calls on the federal exchange. Like many people interviewed for this article, the executive spoke on the condition of anonymity, saying he did not wish to alienate the federal officials with whom he works. "The extent of the problems is pretty enormous. At the end of our calls, people say, 'It's awful, just awful.' " Interviews with two dozen contractors, current and former government officials, insurance executives and consumer advocates, as well as an examination of confidential administration documents, point to a series of missteps financial, technical and managerial that led to the troubles...[T]he government was so slow in issuing specifications that the firm did not start writing software code until this spring, according to people familiar with the process." Robert Pear, Sharon LaFraniere, and Ian Austen in The New York Times.
Glitches on health-care sites prompt increased interest in paper applications. "It is a slow and labor-intensive substitute for what was supposed to be a snappy online application, similar to Amazon or Travelocity. But faced with a flood of people eager to get health benefits for the first time, what had been considered Plan B has become the plan at least until the sites are operating more reliably, according to consumer guides and community groups...Insurance companies are steering people to their own Web sites, promising a smoother experience than healthcare.gov. Advocacy groups that planned to encourage people to enroll this month are also holding back, treating this period as an educational time instead. In the case of the paper applications, the work-around could have significant consequences. Processing paper is likely to create more delays and will further complicate a process that was supposed to be one-stop shopping." Lena H. Sun and Sandhya Somashekhar in The Washington Post.
How much does Obamacare cost? It depends on the state. "The feds will spend just about $10,000 subsidizing health insurance costs for a poor, middle-aged man who lives in Georgia - and just $3,000 buying the same guy in nearby Tennessee a near-identical plan. This is the weird world of financing the Affordable Care Act, where the prices that the insurers charge for health care directly impact how much Obamacare will cost the federal government." Sarah Kliff in The Washington Post.
The rise of the deductible. "The practice of upfront payment for non-emergency care has been spreading in the U.S. as deductibles rise. Now, the advent of the Patient Protection and Affordable Care Act is likely to accelerate that trend. Many of the plans offered through the law's insurance exchanges have low initial premiums to attract customers, while carrying significant deductibles and other out-of-pocket cost sharing. The second-lowest tier of Obamacare plans in California, for example, carries a $2,000 annual deductible. Hospitals say they need to charge patients prior to treatment because Americans are increasingly on the hook for more of their own medical costs. And once care is provided, it's often difficult for hospitals to collect...Overall, the number of people with high deductible plans rose to 15.5 million in 2013 from 1 million in 2005, according to America's Health Insurance Plans, the industry's lobbying group in Washington. The Internal Revenue Service largely defines high deductible health plans as those with an annual deductible of $1,250 or more for individual coverage." Stephanie Armour in Bloomberg.
And you thought you had seen it all interlude: A capella in a German train station.
3. And the Nobel in economics goes to...
Eugene Fama, Lars Peter Hansen and Robert Shiller won the Nobel prize in economics. "Beginning in the 1960s, Eugene Fama and several collaborators demonstrated that stock prices are extremely difficult to predict in the short run, and that new information is very quickly incorporated into prices. These findings not only had a profound impact on subsequent research but also changed market practice. The emergence of so-called index funds in stock markets all over the world is a prominent example."
Who were the contenders for the Nobel economics prize? "If the award is for work on financial crises, banks, liquidity and regulation, Douglas Diamond of the University of Chicago Booth School of Business and Philip Dybvig, of the Olin School of Business at Washington University, St. Louis, are headliners. In 1983, the pair wrote a seminal paper spelling out why bank runs happen...Another name cited for finance and regulation is Jean Tirole, of the Toulouse School of Economics, who has done work on industrial organizations, antitrust and the regulation of corporations... 2013 is the year for behavioral economics, contenders include Robert Shiller, of Yale, who challenged the idea that financial markets are completely efficient." Brenda Cronin in The Wall Street Journal.
Explainer: Economic data coming your way this week. Amrita Jayakumar in The Washington Post.
The government shutdown will delay the Fed's taper. "In the latest Wall Street Journal survey of economists none of the 46 respondents expected the Fed to announce a change to its bond purchases at its Oct. 29-30 meeting. In the survey a month earlier, two-thirds had expected at least some reduction in September or October. The latest survey, conducted this month after the shutdown started, showed 37 out of 46 economists now expecting a Fed pullback on the bond-buying program to begin in December or January." Sudeep Reddy in The Wall Street Journal.
In Washington state, home of the highest minimum wage, a push to raise it further. "If a majority of the voters here say yes to a referendum known as Proposition 1 when their mail-in ballots start arriving this week, a minimum wage of $15 an hour would be required for many businesses in SeaTac, more than twice the federal minimum of $7.25. The measure would lift wages for thousands of workers at one of the nation's busiest airports, Seattle-Tacoma International, which is within city limits. But business and labor leaders say the economic and political implications, with local democracy going where state and federal legislators mostly fear to tread, could be equally profound." Kirk Johnson and Steven Greenhouse in The New York Times.
Corporate-profit growth slows. "Prospects for a recovery in U.S. corporate profits this year are dimming after third-quarter earnings growth slowed and the federal government's shutdown hindered trade and threatened to crimp consumer spending. Earnings rose an estimated 1.4 percent for Standard & Poor's 500 Index companies last quarter, trailing gains of 3.8 percent in the previous three months and an average 10 percent over 15 years. Analysts have reduced the quarterly estimate by 75 percent since June, according to data compiled by Bloomberg. Higher payroll taxes weighed on shoppers at retailers such as Wal-Mart Stores Inc., and industrial companies such as Caterpillar Inc. (CAT) confronted slowing sales at a time when there was little room left to boost profit through cost-cutting." Thomas Black in Bloomberg.
Oh my god this is so great interlude: How aging changes the face.
4. The 'bed mandate'
Controversial quota drives immigration detention boom. "In the past five years, Homeland Security officials have jailed record numbers of immigrants, driven by a little-known congressional directive known on Capitol Hill as the "bed mandate." The policy requires U.S. Immigration and Customs Enforcement (ICE) to keep an average of 34,000 detainees per day in its custody, a quota that has steadily risen since it was established in 2006 by conservative lawmakers who insisted that the agency wasn't doing enough to deport unlawful immigrants. But as illegal crossings from Mexico have fallen to near their lowest levels since the early 1970s, ICE has been meeting Congress's immigration detention goals by reaching deeper into the criminal justice system to vacuum up foreign-born, legal U.S. residents convicted of any crimes that could render them eligible for deportation." Nick Miroff in The Washington Post.
Immigration-reform groups turn pressure to Obama. "Impatient for an immigration overhaul, many U.S. activists are shifting their focus from Congress to President Barack Obama, whom they blame for a deportation policy that has been removing immigrants from the country at the rate of about 1,100 a day, substantially more than under the Bush administration...Activists said they plan to disrupt operations at the Phoenix office of Immigration and Customs Enforcement, or ICE, on Monday. The federal agency runs a controversial national program that enlists local law enforcement to identify undocumented immigrants for potential deportation." Miriam Jordan in The Wall Street Journal.
States back off from enacting immigration laws. "A state guest-worker program that was supposed to go into effect this summer in Utah might have helped McMullin and other farmers searching for workers. But lawmakers delayed the program for two more years because they wanted to see whether Congress would pass an immigration overhaul first. Utah mirrors a national trend of states holding back on passing immigration laws in hopes that the federal government will act on the issue, according to a study released this fall by the National Conference of State Legislatures." Cindy Carcamo in The Los Angeles Times.
Old, old, old interlude: The very first known melody.
5. The sunlight from Snowden
Effort underway to declassify document that is legal foundation for NSA phone program. "In the recent stream of disclosures about National Security Agency surveillance programs, one document, sources say, has been conspicuously absent: the original and still classified judicial interpretation that held that the bulk collection of Americans' data was lawful. That document, written by Colleen Kollar-Kotelly, then chief judge of the Foreign Intelligence Surveillance Court (FISC), provided the legal foundation for the NSA amassing a database of all Americans' phone records, say current and former officials who have read it." Ellen Nakashima and Carol D. Leonnig in The Washington Post.
Reading material interlude: The best sentences Wonkblog read today.
The GOP's latest poison pill. Ezra Klein.
The cost of Obamacare varies wildly by state. Sarah Kliff.
Is America a bubble? Ezra Klein.
Why Senate Democrats rejected the Collins deal. Ezra Klein.
Will this deal end the shutdown? Ezra Klein.
"My baby was shot with a gun that was bigger than he was." Harold Pollack.
The Tea Party thinks it hates Wall Street. It doesn't. Mike Konczal.
The story you'd have otherwise missed: By most metrics, this is actually the least activist Supreme Court in years. Adam Liptak in The New York Times.
Republicans' opportunity to take the Senate is going, going, gone. Jeremy W. Peters in The New York Times.
Wonkbook is produced with help from Michelle Williams.