Good morning, all. Today's reading list is heavy on numbers and in subject matter: the budget and health care. Everyone's favorite topics. Here goes.
Now for some official numbers
The Obama administration reported that some 106,000 people enrolled in a new health care plan in October, one-quarter of them via the federal government portal covering 36 states. The remaining 79,000 signed up on state-run exchanges. Almost 1 million people have applied but have yet to select a plan, according to Health and Human Services Secretary Kathleen Sebelius. "The level of interest in strong," she said. Unfortunately, the website's ability to handle it is weak. Obamacare has a long way to go if it's going to catch up to the hundreds of thousands of people who have received cancellation notices from their insurers. The White House says a decision on how to assist those with cancelled policies is imminent. The only possible fix, given the math of Obamacare, is a government subsidy for those who got dumped. And there's no way Republicans will sign on to that.
No progress on the budget
Congressional Budget Office director Douglas Elmendorf reiterated the long-term fiscal challenges facing the U.S. when he talked with the House-Senate conference committee yesterday. (The budget in charts.) U.S. publicly held debt, already at a post-World War II high of 72.6 percent of GDP, is headed to 100 percent in 25 years. And that doesn't take into account the depressing effect of a high debt burden on economic growth. The 29-member committee, charged with producing a budget in a month, met formally for the second time yesterday. What's the rush? They still have a full month to iron out all their differences. There's no sign of progress yet, according to the Hill. Meanwhile, the CBO was busy working on 103 ways to reduce the deficit.
Spending cuts or revenue growth?
The Mercatus Center's Veronique de Rugy and Jason Fitchner have some easy-to-read charts and commentary on how to eliminate the gap between federal spending and revenues. Can the U.S. grow its way out of debt? Not likely, unless 7 percent nominal GDP growth is in the cards for the next 10 years. Under those circumstances, revenues alone would close the fiscal gap. Using CBO estimates, de Rugy and Fitchner show that slowing the growth of spending to 2 percent a year would close the gap by 2020. A spending freeze would produce balance by 2017. Bottom line? "Modest decreases in federal spending yield much more bang for the buck than relying solely on economic growth to resolve our fiscal woes," the economists write. That's a solution that "is fully within policymakers’ control, unlike increasing the growth rate of GDP."
Yellen on paper
Janet Yellen appears before the Senate Banking Committee at 10 a.m. today. Her prepared testimony was posted on the Fed's website yesterday afternoon. It was short and to the point. Both the labor market and economy are performing below potential. Inflation is below target. The Fed "has more work to do." She didn't say what that would entail, but it doesn't sound as if Yellen will be leading the charge to wind down the Fed's asset purchases.
The Grey Lady turns left
University of Michigan professor Mark Perry compares a New York Times editorial on the minimum wage from 1987 to one this week. The then-and-now comparison is curious. Back then, the Times concedes that raising the minimum wage would raise unemployment. The editors called the minimum wage a "fundamentally flawed" way to overcome poverty. Fast forward to 2013, and low wage workers "deserve" a higher minimum wage. American worker productivity can easily support it, the editors write. Nothing about the effect on unemployment. Times change, and so does the slant, clearly.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)