Good morning, everyone. Here are some of the stories on the issues affecting the U.S. economy.
Ignore the deficit
That's the advice from Larry Summers in an interview with NPR's Steve Inskeep. "The most important issue facing the country not is not looming budget deficits," Summers says. "It is maintaining substantial economic growth going forward." He sees low interest rates as an opportunity to invest "in growing our economy." (That awful phrase again.) He agrees that the U.S. spends too much on entitlements, but the reason to rein in spending is not to reduce projected deficits but to enable public investments in infrastructure and education. I doubt Summers' views on cutting future spending to increase current spending will find much support among either Republicans or Democrats on the House-Senate committee tasked with crafting a budget agreement. (See next item.)
First do no harm
Long-time Washington watcher Stan Collender doesn't expect much from the budget negotiations that get underway this morning. For starters, there is no agreement on the problem. The default position of Republicans is a second round of automatic spending cuts early next year. The alternatives -- cuts to Medicare and Social Security -- are unacceptable to Democrats. The cyclical deficit is shrinking. Neither side is looking for a grand bargain. And there's not much time: six weeks, to be exact. Stan, tell us what you really think about prospects for a long-term agreement on taxes and spending?
Yesterday, it was Marilyn Tavenner, head of the Centers for Medicare and Medicaid Services, who testified before the House Ways and Means Committee on the implementation of Obamacare. Today it's Health and Human Services Secretary Kathleen Sebelius' turn. She will face members of the House Energy and Commerce Committee, who last week gave the third degree to contractors responsible for the Healthcare.gov website. (You can watch the replay here.) Secretary Sebelius is certain to be drilled on the insurance cancellation notices individuals are receiving in light of the president's repeated assurances that "If you like your health-care plan, you will be able to keep your health-care plan. Period."
Fantasizing the end of Obamacare
Tyler Cowen writes the Obamacare denouement, circa 2014. Here's a sample: "Come January 1, hundreds of thousands of Americans will lose their individual coverage packages for not meeting ACA standards. Most of them won't have ready replacements. This will be a big mainstream media story, not just a FoxNews story. There will be easily identifiable victims, expressing sorrow or rate or both in front of the camera. Left-wing bloggers will express outrage that Republicans express outrage over the existence of individuals with no insurance coverage. Republicans will express outrage that left-wing bloggers express outrage, etc." Can you guess how it ends?
More than uncertainty?
Reporters who cover the Federal Reserve seem to expect some sort of key insights to be revealed in the statement released at 2 p.m. today. I'm not sure why. Yes, there's the usual fascination over the choice of adjectives -- "modest" or "moderate" to describe the pace of economic growth -- and the compelling phrasing of "downside risks." But what new light is the Fed going to shed on the economic outlook when it's pretty much in the dark? Absent confidence in the forecast, what sort of clarification can policy makers provide? I
suspect "uncertainty" will dominate the thinking, discussion and outcome.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)