Crack Babies: A Tale from the Drug Wars

Retro Report: “In the 1980s, many government officials, scientists, and journalists warned that the country would be plagued by a generation of ‘crack babies.’ They were wrong.”

Is Now the Time to Expand Social Security?

Brad Plumer looks at a new study from the New America Foundation making the case that amid talks of entitlement reform — including raising the retirement age and changing the way the government adjusts programs for inflation — there is a strong case for expanding, rather than shrinking, the Social Security program.

“The major proposal in the report is to add a brand new benefit to Social Security, called Part B, which would provide a flat $11,699 per year to all retired workers. This would come on top of regular Social Security, which would also be protected from any further cuts. The net effect is that the new Social Security program would replace a far bigger chunk of a worker’s lifetime earnings than the current program does.”

“The net cost: About 5 percent of GDP… Hiking taxes by 5 percent of GDP is far outside the bounds of what either party is contemplating. And if Congress was willing to raise taxes by 5 percent of GDP, there would undoubtedly be lots of debate about whether expanding Social Security was really the best investment it could make.”

US Growth is Hard to Stop

– Timothy Taylor has this chart showing “the persistence of per capita economic growth in the U.S. economy over the last couple of centuries.”

“In a logarithmic graph, a straight line shows that the same percentage rate of growth is continuing from year to year… Future growth prospects depend on investments in human capital, physical capital, and new technology, along with a market-oriented environment that provides incentives for such investment and innovation.”

“Sometimes I meet a true skeptic about the future of economic growth, who views the entire economy as a house of cards that might tumble down tomorrow. Maybe they will prove to be correct! But I sometimes point out that when you are arguing that a remarkably persistent pattern of growth of the last several centuries is about to end suddenly, history is not on that side of the argument.”

Obama Plans to Scale Down Drone Strikes

Marc Ambinder: “Ironically, the era of high-profile kinetic strikes may be coming to a close. The administration has begun to shift its thinking away from killing the bad guys and towards helping host nations solve problems through creative and non-kinetic means. This suggests, to me, that President Obama recognizes the consequences of collateral damage, and that while it may resort to ‘drone’ strikes when necessary, it will renew its efforts to capture and detain wanted terrorists, and then try them, either here in the United States or in the country where they were captured. He blew his chance during his first term, not standing up for his Attorney General Eric Holder when Holder wanted to try the 9/11 conspirators in federal court. Obama has three years to rectify his error. Putting military action back in military hands is a first step.”

Grim Prospects for DOMA

After a lengthy oral argument in United States v. Windsor on the constitutionality of the Defense of Marriage Act that included nearly an hour of debate on whether the Supreme Court could even rule on the case, Lyle Denniston believes that the “law may be gone, after a seventeen-year existence.”

“Justice Anthony M. Kennedy seemed persuaded that the federal law intruded too deeply into the power of the states to regulate marriage, and that the federal definition cannot prevail… Kennedy also seemed troubled about the sweeping breadth of DOMA’s Section 3, noting that its ban on benefits to already married same-sex couples under 1,100 laws and programs would mean that the federal government was “intertwined with citizens’ daily lives.’ He questioned Congress’s very authority to pass such a broad law.”

“But, if the Court were to do that based on states’ rights premises, the final ruling might not say much at all about whether same-sex couples were any closer to gaining an equal right to marry under the Constitution. There did not appear to be a majority of Justices willing to strike down the 1996 law based on the argument that the Obama administration and gay rights advocates have been pressing: that is, the law violates the Fifth Amendment guarantee of legal equality in general.”

North Dakota Adopts Strictest Abortion Law in the Coutry

North Dakota Gov. Jack Dalrymple “signed three anti-abortion bills into law…giving final approval to the strictest abortion laws in the nation and setting the stage for a potentially high-profile and expensive court challenge,” the Bismarck Tribune reports.

The law “requires a physician to determine whether there’s a detectable heartbeat prior to performing an abortion… A heartbeat is able to be detected as early as six weeks. It is a far cry from the current federal protections relating to the time when a fetus has the ability to survive outside of the womb, approximately 24 weeks.”

New York Times: “Most legal scholars have said the law would violate the Supreme Court’s finding in Roe v. Wade that abortions were permitted until the fetus was viable outside the womb, generally around 24 weeks… Without judicial intervention, the three bills are scheduled to take effect Aug. 1… The signings come on top of a resolution approved by the North Dakota Legislature last week to amend the State Constitution to assert that life begins at conception, a move that would give a fetus the rights of a person and outlaw virtually all abortions. The so-called personhood measure…will go on the ballot next year.”

Court Set to Hear DOMA Challenge

The Supreme Court will sit for a second round of oral arguments on same-sex marriage today, providing nearly two hours to consider the constitutionality of the federal Defense of Marriage Act defining marriage as between one man and one woman.

Amy Howe walks through the main issues in the case, including the question of whether the Supreme Court can hear the case in the first place: “Attorney General Eric Holder announced that the President regarded the law as unconstitutional and had instructed the Department of Justice not to defend the statute any longer. Several House Republican leaders, in their role as part of the House’s Bipartisan Legal Advisory Group (BLAG), then stepped in to defend DOMA in court… the Court asked the parties to address not only the question of DOMA’s constitutionality, but also whether it could even review the case in the first place. On the latter question, it appointed a ‘friend of the court,’ Harvard law professor Vicki Jackson, to argue that it did not… she argues that BLAG does not have a right to appear in court to defend DOMA because even the full Congress wouldn’t have the right to do so.”

Greg Stohr has more: “the central question is whether the law violates the constitutional guarantee of equal protection. Depending on how the court approaches the cases, reaching the answer may involve several steps. An important preliminary question is whether laws discriminating against gays should be given ‘heightened scrutiny,’ a stricter standard that judges already use in cases involving race or gender discrimination. Should the court invoke heightened scrutiny, it almost certainly will strike down both laws.”

Although the two same-sex marriage cases are being argued this week, the Supreme Court will likely issue its opinion in both cases in late June.

The Tax Hike No One Noticed

Brad Plumer explains why the expiration of the payroll tax cut at the start of the year has not affected consumer behavior.

“One possibility is that many workers aren’t even aware that their taxes have risen yet… A full 48 percent of Americans haven’t noticed the change at all… In particular, low-income Americans were least aware of the change, with 59 percent not noticing any difference.”

“So what does this mean going forward? There are a few possibilities. 1) Once most Americans realize that their disposable income has shrunk — by $1,000 this year, on average — they could cut back on spending significantly… 2) Most Americans will continue to maintain their current levels of spending anyway, even though they have less take-home pay. They’ll simply borrow more to make up the difference… 3) People will eventually notice the payroll tax hike, but… the U.S. economy has reached escape velocity and the payroll tax hike can’t pull it back down.”

Don’t Trust the Long-Term Projections

Ezra Klein uses the announcement of a new technology that “knows when you’re about to have a heart attack” to explain why he pays no heed to predictions of exploding long-term health care costs.

“This particular device might prove, for one reason or another, to be bunk. Many seemingly magical inventions do. But it’s not alone… every major health device company knows there’s billions and billions to be made here.”

“Consider how dramatically these devices will change medicine. Right now, the medical industry is fundamentally reactive. Something goes wrong, and we go to them to fix it. This will make medicine fundamentally proactive… This is why I don’t put much stock in projections of health-care spending that run 30 or 50 or 75 years into the future.”

The Inevitable Housing Bubble

Karl Smith: “Some time in the near future it is very likely that credit standards for homebuyers will fall. This will allow homebuyers to make larger offers and it will allow young people to buy a home even when they lack a down payment. This rapid increase in the number of buyers and their purchasing power will likely drive home prices into a bubble. Likely not as large as 2005, but it’s not out of the question that the bubble could be even larger.”

“We might think – ‘didn’t lenders learn their lesson?’… A perfectly competitive market in mortgage lending could not help but go into bubble… the lenders will be encouraged to loosen standards because if any lender loosens standards then he or she will gain market share… If a lender… goes with the flow she probably will not be punished when everything goes bad. If she refuses to go along with the flow then she will be punished for making low returns while everyone else is profiting from the bubble.”

“To my knowledge neither the government, the lending industry nor we as a society have done anything that promises to prevent this.”

There Should Be Even More Outside Campaign Spending

Tim Kane makes the case that the $1 billion spent by outside groups in the 2012 elections has made the political system healthier and more diverse.

“What is exciting is that such extra-partisan ideological viewpoints are able to be expressed in the new political infrastructure. What is often called ‘third party’ politics is in fact extra-party politics: activity and expenditures made outside the 2-party system… Do you think the election laws should be reformed to make the RNC and DNC happy?”

“To be sure, much of the IE money goes for partisan candidates, but that should not obscure the diversity and partisan-blindness of it by nature. Pro-life expenditures will just as happily support red or blue candidates, so long as those candidates are aligned on their core issue… Total U.S. advertising is approaching $300 billion. So are elections really being ‘bought’? Or perhaps should we hope for more money to be spent on politics than on fast food?”

President Obama's Second Inaugural Address

President Obama gives his second inaugural address at noon EST to lay out his vision for the next four years.

Politico has a live feed.

A Big, Wonky Thank You!

You have made today the highest traffic day for Wonk Wire yet and we hope you will keep coming back as the conversation in Washington, D.C. and around the country shifts from the elections to implementing policy agendas.

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Election Results Roundup

As the polls close and projections begin to roll in for president and Congress, be sure to check back to this post throughout the night for policy commentary.

Wonkblog is footnoting the results.

Keep an eye on Nate Silver’s FiveThirtyEight blog for statistical analysis as votes come in.

Matthew Yglesias highlights a smart take on the Bush tax cuts by projected Senator-elect Angus King (I). Said King, “We should consider pegging the sunset of these tax cuts to something non-arbitrary, like a certain amount of GDP growth, or a lower level of unemployment.”

President Barack Obama has won re-election.

Election Day 2012

The presidential and congressional elections are into their final 24 hours. After you vote on Tuesday, be sure to check back on Wonk Wire for election returns and discussion of the policy implications of the results.

Not convinced voting is worthwhile? Interfluidity explains why, despite claims by economists to the contrary, “voting is rational behavior and it can, under some circumstances, be a moral virtue.”

Meanwhile, Brad Plumer breaks down the reasons why as many as 50 million eligible voters probably won’t vote tomorrow.

When Government Reschedules Halloween

If you were wondering what it looks like when government reschedules Halloween, New Jersey Gov. Chris Christie issued an executive order doing just that in response to Hurricane Sandy.

New Jersey will celebrate Halloween this year on November 5.

Wonk Wire Back Online

Apologies to all our readers for the slow day. Wonk Wire was knocked offline by Hurricane Sandy, but now we are back and providing all your domestic policy news and analysis.

Romney Will Cripple Medicaid

Matthew Yglesias argues that it is unrealistic for Mitt Romney to believe that his Medicaid reform plans will “usher in a bright new era of innovation.”

“In the real world, what happens if you’re given less money to cover people with and more flexbility about what to do with it what you’re going to do is simply cover fewer people. In particular, care for the elderly and disabled are likely to get hammered over the long-term thanks to productivity issues. Medical technology does advance and that sometimes leads to great new things—pills that treat illnessness, machines that help us test for disease—but the foundation of long-term care for the elderly and the disabled is human attention. People who need help caring for themselves on a day-to-day basis need help from other human beings.”

Romney's True Economic Doctrine

Paul Krugman tries to get at the “true economic doctrine Romney and his inner circle have in mind.”

“The official line has been that the five-point program will create scads of jobs. This has a couple of problems. First, the program is vacuous — for the most part it’s a statement of desired outcomes, not policies. Second…the studies claimed as justification for the 12-million jobs number actually don’t say at all what the campaign asserts.”

“The answer is actually pretty clear: CONFIDENCE. The Romney notion is that we’d be having a rip-roaring recovery right now, except that Job Creators feel that Obama is looking at them funny. And so all Romney has to do is show up, and happy times will be here again. No, seriously: in Boca Raton Romney declared that simply by being elected he could start a boom, ‘without actually doing anything’… The true plan is to provide an economic stimulus in the form of Romney’s awesome awesomeness; the cover story is the pretense of having an actual program.”

Underemployment is Not Such a Big Issue

FT Alphaville takes a deeper look at the recent employment data from the Bureau of Labor Statistics and finds that underemployment may not be as big of an issue as many have portrayed.

“The above part-time data is compiled by the Bureau of Labor Statistics, which defines part-time as anything less than 35 hours per week… The OECD data indicates that the share of part-timers (working less than 30 hours per week) is already back to the 2007 levels, around the 12.6 per cent mark… This suggests that many of those included in the BLS data are working somewhere between 30 and 35 hours per week… Which is still not great, but a considerably smaller cause for alarm than the BLS data alone would have you believe.”

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Early Look at the Republican Platform

Politico has a draft of the Republican Party platform that is likely close to the one that will be released tomorrow during the Republican National Convention. The document has since been taken down from the GOP website.

Closing the Budget Deficit Will Wreck the Global Economy

Karl Smith worries that closing the US budget deficit as the world enters a glut of savings could lead to major bubbles and bursts.

“Well, the US Government is on a path to borrow a lot of money. In some ways this is convenient as the World is on a path to save a lot of money. Yet, suppose the US Government reforms its ways and ends its rising deficit. The world will still wish to save, but the US Government will not be there to borrow. The result is a world with an ever increasing propensity towards bubbles. Indeed, if things simply continue along their current path and the US decides to cut the deficit then we should expect bubbles far greater than the ones we have experienced in the past.”

“Thus we should be very worried about the consequences of closing the US budget deficit, not just now, but over the long term. The US budget deficit bedevils policy wonks. But, far better is the devil you know, than the devil you don’t.”

Supreme Court Roundup

Check this post for the results of today’s Supreme Court opinions.

The Court has summarily overturned Montana’s strict campaign finance law limiting corporate election contribution in a 5 to 4 decision. Here is the one-page per curiam decision and the dissent from Justice Breyer.

The Court ruled 5 to 4 that mandatory rules that sentence a juvenile to life in prison without the possibility of parole violates the Eighth Amendment. Here is the opinion by Justice Kagan, with a concurring opinion by Justice Breyer, a dissenting opinion by Chief Justice Roberts, a dissenting opinion by Justice Thomas, and a dissenting opinion by Justice Alito.

The Court has invalidated most of the key provisions of SB 1070, the Arizona immigration law, saying they are preempted by federal law in a 5 to 3 ruling. This does not include one of the most controversial provisions that requires police officers to check a person’s immigration status if there is a “reasonable suspicion” that they are in the country illegally after they are stopped for a separate crime; however, the Court did not preclude overturning this provision based on racial profiling claims that were not included in this case. Here is the opinion by Justice Kennedy, with Justice Scalia concurring and dissenting in part, Justice Thomas concurring and dissenting in part, and Justice Altio concurring and dissenting in part. Justice Kagan did not take part in the case because she oversaw the federal government’s role in the case as Solicitor General.

The Court will not rule on the health care reform law today

The remaining decisions, including health care, will be announced on Thursday. Be sure to check back on Wonk Wire this week for commentary on today’s rulings and the rest of the term.

Big Day on Wonk Wire

Today is the last scheduled day of the Supreme Court’s term, with a number of blockbuster opinions still to be issued. It is possible that the Court will add one or more additional days this week to issue opinions.

SCOTUSBlog’s daily live blog has great up to the minute news on the rulings, Felix Salmon has a Twitter list of the best people to follow on the decisions, and check back on Wonk Wire for roundups of analysis and commentary throughout the day.