

Republican presidential candidate Mitt Romney speaks in Des Moines. (Win McNamee/GETTY IMAGES)

Four years ago, Mitt Romney won 30,021 votes in the Iowa caucuses. In the 2008 field, that was only good enough for second place, and he went on to lose New Hampshire to Sen. John McCain. Last night, Romney won 30,015 votes in the Iowa caucuses. His total barely budged. But this time, it was good enough: Willard Mitt Romney won the Iowa caucuses, and later today, he's being endorsed by Sen. John McCain.

But boy, was it close. Romney edged out Rick Santorum by eight votes. For comparison's sake, Buddy Roemer got 49 votes. Which makes this something less than a resounding victory for either Romney or Santorum. Romney didn't improve on his vote total from 2008. Santorum didn't win in the state where he had spent virtually all of his time over the last year. Which means Romney still hasn't broken through with Republican voters, but Republican voters, at least in Iowa, have not found an anti-Romney they like better.

The oft-made comparison is to Iowa's 2004 caucuses, where Democrats famously "dated Dean, married Kerry". But Kerry's win that year was actually pretty resounding: 38 percent of caucusgoers, compared to Dean's 18 percent. Romney's vote total shows considerably less enthusiasm. Republicans dated Bachmann, Perry, Cain, Gingrich, Paul and Santorum, but they settled for Romney.

And they're likely to continue settling for Romney. It's possible there will be some upsets along the way, of course. But it's hard to see any other candidate really making a run at the nomination. Republicans are likely to end up with Romney as their nominee. The guy who was next-in-line is now first-in-line.

That, however, will come with some headaches. Romney has arguably been the frontrunner through the entire election. But he's never gotten the sort of scrutiny a frontrunner tends to attract. Rather, the media coverage has tended to swarm the succession of shiny, new, and very controversial not-Romneys. As Time's Adam Sorensen tweeted when Gingrich was in the lead, "It's like how Earth is protected from mass extinctions by Jupiter's huge asteroid-attracting mass. Newt is Jupiter."

Soon enough, it's just going to be Romney out there. And he's going to start getting hammered with questions about why he won't release his tax returns and where exactly his claim to have created 100,000 jobs at Bain Capital comes from and why, when he was at Bain, he fired this nice-seeming guy being interviewed on the television.

That's the odd thing about Romney's campaign thus far: he's managed to be the frontrunner without really being treated like the frontrunner. Someone else -- someone more interesting, someone who sold more papers and made for better cable news segments -- always had the momentum, and so there was always an excuse to cover them. But whatever Santorum is, he's not Jupiter. At this point, there is no Jupiter. Or, perhaps more precisely, Romney is Jupiter. And he's about to get hit with a lot of asteroids.

Top stories

1) Dan Balz breaks it down : "The close finish here among Romney, former senator Rick Santorum (Pa.) and Rep. Ron Paul (Tex.) could be a blessing for the former governor. Although Santorum and Paul proved the doubters wrong with their strong showings Tuesday, neither appears to have the capability yet to go the distance in a long nomination contest. The candidates who many GOP strategists once believed might be able to give Romney a run — Texas Gov. Rick Perry and former House speaker Newt Gingrich (Ga.) — badly trailed the leaders. Romney advisers have been saying privately over the past few days that any outcome putting Gingrich and Perry in the lower half of the field would be ideal, no matter the order of finish among the top three. But Romney’s lackluster percentage underscored the absence of enthusiasm among many Republicans for the candidate long seen as the party’s likeliest nominee. Despite being the nominal front-runner for the past year and judged overwhelmingly by Iowa Republicans as having the best chance of defeating President Obama in November, Romney did no better Tuesday than he did four years ago."

@AriMelber: Romney did best among voters from households that make over $100k a year - winning 36% of them to Santorum's 23%

@jpodhoretz: More people are tweeting this caucus than are voting in it. Literally.

2) The results highlight Republican's ideological divide reports Jim Rutenberg: "All year long the story of the Republican race for president was Mitt Romney and a rotating cast playing the role of Someone Else. On Tuesday night, Someone Else was played by two candidates: Rick Santorum, the longtime champion of social conservative issues that were supposedly taking a backseat in this jobs-centric presidential race, and Ron Paul, the noninterventionist Texan who represents an almost 180-degree turn from the Republican Party’s direction...But more than anything else, the Iowa caucuses cast in electoral stone what has played out in the squishy world of polls and punditry for the last 12 months: The deep ideological divisions among Republicans continue to complicate their ability to focus wholly on defeating President Obama, and to impede Mr. Romney’s efforts to overcome the internal strains and win the consent if not the heart of the party."

3) The Fed will begin to publish interest rate forecasts reports Steven Mufson: "The Federal Reserve took another step in its gradual march toward greater openness by agreeing to disclose its board members’ expectations about future interest rates, according to newly released minutes of the Fed’s December meeting. The measure is designed to increase certainty and predictability about the Fed’s current policy of low interest rates — and thus encourage economic activity among investors and consumers. Every quarter, starting with the late January meeting, Fed officials on the Open Market Committee will disclose their own projections for the federal funds rate at which banks can borrow money over the next few years. The Fed committee members will also release their forecasts for the “likely timing” of the first increase in the federal funds target rate. And Fed officials will provide “qualitative information” about their expectations regarding the size of the Fed’s holdings of bonds and other securities, which the central bank has used to help stimulate the economy."

4) The White House may use recess appointment for CFPB head reports Laura Meckler: "White House attorneys have concluded they have the legal authority to make a recess appointment despite Republican efforts to block the move, Democrats said Tuesday, and administration officials say they reserve the option to install Richard Cordray as head of the new Consumer Financial Protection Bureau without Senate approval. Some expect that appointment to come as early as Wednesday, when President Barack Obama goes to Mr. Cordray’s home state of Ohio to talk about the economy. He’ll be at Shaker Heights High School outside Cleveland. Mr. Cordray’s nomination has stalled in the Senate due to opposition from Republicans, who say they will not confirm anyone to the post until changes are made to the bureau’s structure. Mr. Obama and his aides have signaled for weeks that he would use his authority to bypass the Senate by giving Mr. Cordray, former Ohio attorney general, a recess appointment. Last month, the Senate voted 53-45 to take up the Cordray nomination, falling short of the 60 votes needed to move ahead."

Top op-eds

1) The tie in Iowa is a win for Romney writes Ed Kilgore: "As of this writing, Rick Santorum and Mitt Romney are very nearly tied for first place in the Iowa caucuses, and Ron Paul is close enough to make it a functional three-way tie. But no matter who eventually 'wins,' Mitt Romney has already won in terms of Iowa’s impact on the overall nominating process...Romney’s likely nomination is nearly as unlikely as John McCain’s four years ago. But as the Iowa results indicate, the conservatives who could have stymied him couldn’t find another Goldwater or Reagan, and couldn’t even convince Iowa’s savvy caucus-goers to unite on an alternative. The fact that all three 'tickets out of Iowa' ultimately belonged to Mitt is a sign that the GOP’s ascendant hyper-conservative wing has lost altitude and will likely find itself anxiously supporting a nominee it does not want or trust."

@RichLowry: How very underwhelming

2) The GOP race is down to two writes Jonathan Bernstein: "\What matters is the spin over the next few days, and it doesn’t seem to me that the exact order of finish will affect that very much. Media biases — in favor of new things, unexpected things, and for keeping the race alive — should all help Rick Santorum become the big story coming out of Iowa as long as he finished at least third. But there’s another factor, too, and that’s what to watch for tomorrow and over the next few days: How do those Republican Party actors who don’t currently support a candidate choose to spin Iowa? Practically none will be talking up Paul. So will they push a pro-Romney or a pro-Santorum spin? That’s not going to depend on the finish in Iowa; it’s going to depend on their political preferences and interests. And the answer to that will probably determine whether Romney can wrap up the nomination by the end of January or whether we’ll have a tougher two-candidate race (with Paul hanging around) that could go on for a while."

3) Romney wouldn't govern like a moderate writes George Packer: "The great puzzle of the Republican campaign is that, in an era of unprecedented ideological fervor, the party will almost certainly nominate the candidate who is the blandest, least ideological, and least trusted by conservatives of them all (that would be Mitt Romney—Jon Huntsman doesn’t count as long as he’s in the low single digits)...It would be a mistake, though, to believe that, long after Iowa, once the horse race is over, and if he’s elected, Romney could suddenly flip a switch, clear the air of the toxicity left behind by the Republican field, and return to being a cautious centrist whose most reassuring quality is his lack of principles. His party wouldn’t let him; and, after all, how a candidate runs shapes how a President governs."

4) The global economy needs more inflation write Menzie Chinn and Jeffry Frieden: "The American and European debt crises have dragged on for years now. Yet none of the heavily indebted countries -- not the United States, not the peripheral eurozone borrowers -- has been able to use a traditional weapon to fight the debt crisis: inflation...We're not proposing a lot of inflation -- just enough to reduce the debt burden to more manageable levels, which probably means in the 4 to 6 percent range for several years. The Fed could accomplish this by adopting a flexible inflation target, one pegged to the rate of unemployment. Chicago Fed President Charles Evans has proposed something very similar, a policy that would keep the Fed funds rate near zero and supplemented with other quantitative measures as long as unemployment remained above 7 percent or inflation stayed below 3 percent. Making the unemployment target explicit would also serve to constrain inflationary expectations: As the unemployment rate fell, the inflation target would fall with it."

5) The U.S. must cut entitlements writes Alan Greenspan: "The emerging fight over the future of the welfare state, a paradigm without serious political challenge in eight decades, is accentuating the centre’s decline. The welfare state has run up against a brick wall of economic reality and fiscal book-keeping. Congress, having enacted increases in entitlements without visible means of funding them, is on the brink of stalemate. As studies by the International Monetary Fund have demonstrated, trying to solve significant budget deficits mainly by raising taxes has tended to foster decline. Contractions have also occurred where spending was cut as well, but to a far smaller extent. The only viable long-term solution appears to be a shift in federal entitlements programmes to defined contribution status.”

Brooklyn rock interlude: Craig Finn plays “Jackson” for the AV Club.

Got tips, additions, or comments? E-mail me.

Still to come: Manufacturing continues to expand; California’s pre-existing condition plan grows; a desegregation lawsuit heads to court, high-speed rail hits a roadblock; and baby pandas play in the snow.

Economy

New jobless data paints a mixed picture for Europe report Todd Buell and Jonathan House: "A sharp divergence in year-end jobless tallies issued by Germany and Spain put into high relief the challenges facing European Union policy makers to stabilize their currency union without impoverishing the bloc's poorer members. Germany's seasonally adjusted jobless total dropped by 22,000 in December for a 6.8% unemployment rate, the data showed, following a downwardly revised drop of 23,000 in November…Spain's labor office told a different story, with jobless claims rising by a modest 1,897 to just over 4.2 million. The labor ministry didn't provide an unemployment rate, but the most recent data from the EU's Eurostat agency showed Spain had a 22.8% unemployment rate in October, by far the highest of the euro zone."

@ryanavent: By Nov, Obama may be able to say he's added more private jobs than Bush and cut public jobs, while Bush added 10x as many public jobs as pvt

The manufacturing sector grew in December reports Shannon Bond: " The US manufacturing sector expanded in December at the fastest pace in six months, adding to signs of firmer economic growth in the final quarter of 2011. The Institute for Supply Management’s purchasing managers’ index rose to 53.9, the highest since April, from 52.7 in November, topping expectations of an increase to 53.5. Readings above 50 indicate expansion. The report ‘suggests improvement in the overall macroeconomic environment or at least sentiment’, said Holden Lewis, industrial analyst for BB&T Capital Markets. But he added that with ‘flattish’ economic conditions around the globe, the improving trend would have to continue into January and February to suggest a more meaningful recovery."

Spain will introduce more austerity measures report David Roman and Christopher Bjork: "The Spanish government said Monday it will introduce more austerity measures this week on top of a swath of spending cuts and tax increases approved last week, as it scrambles to contain a budget deficit that may have surpassed 8% in 2011...On Friday, the right-leaning government proposed about €8.9 billion in spending cuts for 2012 that ranged from trimming public-sector employment to curbing subsidies for political parties. It also said it would raise some €6 billion by raising taxes. Also Monday, Finance Minister Luis de Guindos said the budget deficit for 2011 may be above 8% of gross domestic product, overrunning an estimate given just days ago of just below 8%. The previous Socialist government had targeted a budget deficit of 6% of GDP."

America's real problem is long-term deficits writes Bruce Bartlett: "In our personal lives, we all understand that debts may take different forms. They aren’t limited only to credit cards or loans taken out from banks; they consist of various promises and financial obligations as well. So, too, with the federal government. The national debt, which is the object of almost obsessive attention these days, is like a bank loan. It is an important part of national indebtedness, but only a small part. The vast bulk of the true debt is in the form of commitments to pay future benefits to retired federal employees, veterans, and Social Security and Medicare beneficiaries…Altogether, the Treasury reckons the government’s total indebtedness at $51.3 trillion – five times the size of the national debt. This would be an unbearable burden if it had to be paid by the current generation out of current resources, for it approximately equals the entire net worth of American households."

Equipment sales offer hope for a recovery writes Peter Orszag: "It’s been a hard slog for the U.S. economy since the financial crisis of 2008. Yet the type of investment most closely correlated with productivity growth has been booming. That’s right: Despite widespread concern about weak business investment, companies have been pouring money into equipment and software -- everything from tools and tractors to word-processing programs. In the third quarter of 2011, private-sector investment in equipment and software accounted for more than 60 percent of total growth in gross domestic product. Since the official end of the recession in the spring of 2009, the share of GDP devoted to such investment has risen more rapidly than in any recovery in the post-World War II era."

Interspecies friendship interlude: A dog licks the face of a laughing baby.

Health Care

California's program for patients with preexisting conditions is expanding writes Anna Gorman: "Despite a slow start, California's push to extend health coverage to those with preexisting medical conditions — a three-year stopgap effort until federal healthcare reform fully kicks in — has enrolled more than 6,000 patients...California was the last state to offer the coverage. But the number of applicants jumped after an aggressive marketing campaign and a drop in premiums. Now, with a higher-than-expected influx of federal dollars for 2012, the state plans to continue publicizing the plan. To be eligible, applicants must be U.S. citizens who have been uninsured for six months and have been denied coverage because of a preexisting condition."

@daveweigel: So, President Romney's HHS Secretary? Ideas?

Medicare should tie payments to evidence of effectiveness write Ezekiel Emanuel and Steven Pearson: "If you want to know what is wrong with American health care today, exhibit A might be the two new proton beam treatment facilities the Mayo Clinic has begun building, one in Minnesota, the other in Arizona, at a cost of more than $180 million dollars each. They are part of a medical arms race for proton beam machines, which could cost taxpayers billions of dollars for a treatment that, in many cases, appears to be no better than cheaper alternatives. Proton beam therapy is a kind of radiation used to treat cancers. The particles are made of atomic nuclei rather than the usual X-rays, and theoretically can be focused more precisely on cancerous tissue, minimizing the danger to healthy tissue surrounding it. But the machines are tremendously expensive, requiring a particle accelerator encased in a football-field-size building with concrete walls. As a result, Medicare will pay around $50,000 for proton beam therapy for a patient with prostate cancer, roughly twice as much as it would if the patient received another type of radiation...The higher price would be worth it if proton beam therapy cured more people or significantly reduced side effects. But there is no evidence showing that this is true."

Domestic Policy

@AdamSerwer: Wow. Sounds like Iowa has really turned against the drug war.

Lawsuit challenges Maryland's desegregation efforts reports Ashby Jones: "More than a half-century after the U.S. Supreme Court outlawed segregation in public education, a court will decide if Maryland is doing enough to support the state's historically black public colleges and universities. A lawsuit brought by a group largely made up of students and alumni from these schools, and headed to trial Tuesday in a Baltimore federal court, accuses the state of repeatedly failing to fulfill promises to desegregate the schools...The suit is the first ever challenging Maryland's efforts in desegregating higher education, and the first anywhere in the U.S. since the mid-1990s, when the state of Alabama agreed to pay $160 million to several historically black universities."

Santorum wants the tax code to reward traditional marriage reports Suzy Khimm: " Rick Santorum’s socially conservative brand has helped him break through with a last-minute surge in Iowa. But his agenda isn’t restricted to reimposing ‘Don’t Ask, Don’t Tell,’ outlawing gay marriage nationwide, or promoting prayer in public schools. Santorum also wants to use the federal tax incentives to promote traditional marriage and families. ‘Tax policy as social policy’ is the most distinguishing characteristic of Santorum’s tax reform platform. The Pennsylvania Republican wants to reduce taxes by tripling the child tax credit, which currently stands at $1,000 per child. Santorum also wants to reduce federal taxes that penalize married couples. Under the current tax code, some spouses who earn about the same salary on the middle-to-upper end of the spectrum pay more in taxes by filing jointly as a married couple than they would as individuals. Justin Wolfers explains further: ‘The U.S. has a household-based taxation system which subsidizes married families when one person stays home and taxes most people extra if they choose to marry and both work full-time. The average tax cost of marriage for a dual-income couple is $1,500 annually.’"

Adorable animals being seasonal interlude: Baby pandas play in the snow.

Energy

Solar thermal technology is headed for the grid reports Matthew Wald: "If solar energy is eventually going to matter— that is, generate a significant portion of the nation’s electricity — the industry must overcome a major stumbling block, experts say: finding a way to store it for use when the sun isn’t shining. That challenge seems to be creating an opening for a different form of power, solar thermal, which makes electricity by using the sun’s heat to boil water. The water can be used to heat salt that stores the energy until later, when the sun dips and households power up their appliances and air-conditioning at peak demand hours in the summer. Two California companies are planning to deploy the storage technology: SolarReserve, which is building a plant in the Nevada desert scheduled to start up next year, and BrightSource, which plans three plants in California that would begin operating in 2016 and 2017. Together, the four projects will be capable of powering tens of thousands of households throughout a summer evening."

California's high-speed rail has hit a roadblock reports Vauhini Vara: "California's ambitious plan for a high-speed rail system hit a big roadblock Tuesday, as an independent panel urged lawmakers to deny authorizing the issuance of $2.7 billion in bonds to kick off the $98.5 billion project...Moving ahead "represents an immense financial risk" for California, the group said in its report, echoing concerns from critics who say the project could leave state taxpayers on the hook for billions of dollars in future costs. The panel appeared to leave the door open to supporting state funding in the future, if the rail authority addresses its concerns. While the report isn't binding, it puts pressure on California lawmakers as they decide whether to release billions of dollars in state bonds for the project...The proposed plan, which has attracted the support of Gov. Jerry Brown, called for breaking ground this year by spending $6 billion in federal and state funds to lay track for high-speed trains in the rural Central Valley, as an initial step in a broader project for a bullet train linking San Francisco to Southern California."

This generation's gift to the next is climate change writes Dean Baker: "It is remarkable how efforts to reduce the government deficit/debt are often portrayed as a generational issue, while efforts to reduce global warming are almost never framed in this way. This contrast is striking because the issues involved in reducing the deficit or debt have little direct relevance to distribution between generations, whereas global warming is almost entirely a question of distribution between generations...The main factor that will determine the economic wellbeing of our children and grandchildren will be the strength of the economy that we pass down to them. This will depend, in turn, on the quality of the capital and infrastructure we pass onto them, along with the level of education we give them, the state of technical knowledge we achieve and the state of the natural environment."

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.