This will be the first Wonkbook lede that isn’t about economic or domestic policy. It’s just about right and wrong. Over the weekend, the Obama administration forced the State Department spokesperson PJ Crowley to resign. The reason? He’d told the truth.

You may only hazily remember the name “Bradley Manning.” He’s the young soldier accused of passing thousands and thousands of classified documents to Wikileaks. I say “accused” not because his guilt is so doubtful, but because he has not yet stood for trial. At the moment, he is simply incarcerated. And in an apparent act of revenge, his captors are subjecting him to sleep deprivation, prolonged time in isolation and continuous nude spot-checks -- conditions that Daniel Ellsberg calls “right out of the manual of the CIA for ‘enhanced interrogation’.”

Asked about Manning’s treatment at a speech in Cambridge recently, Crowley made the obvious points: it’s “ridiculous and counterproductive and stupid.” This made life difficult for the administration, and so Crowley -- rather than the officials responsible for putting Crowley and every other administration member into the position of defending Mannin’s treatment -- was forced to resign. The message of this is horrendous. “Crowley’s firing will make it even less likely in the future that decent public servants will speak out against such needless sadism,” writes Andrew Sullivan.

The Obama campaign was only three years ago, but it had strong opinions on this sort of thing. “To lead the world, we must lead by example,” Candidate Obama said in October of 2007. “We must be willing to acknowledge our failings, not just trumpet our victories. And when I’m President, we’ll reject torture - without exception or equivocation.” But now we find there is both exception and equivocation -- and the administration is purging those within its ranks who publicly say it should be otherwise. This is a moment in which both those who serve in the administration and those who support it need to ask whether the Obama administration is keeping sight of its values now that it holds power. The tradeoff between security and moral purity is always more difficult for a president than a candidate, but as we saw in the Bush administration, the pendulum can swing too far towards security, in a way that does little to make us safer and erodes who we are. Crowley’s firing is a sign that that may be happening to the Obama administration.

Top Stories

Washington is growing more hospitable to a grand budget bargain, report Janet Hook and Naftali Bendavid: “Don’t look now, but an adult conversation has begun on the federal budget deficit...The political climate is growing more hospitable to the kind of grand bargain needed to rein in the rest of the budget--potentially encompassing the tax code, the defense budget and entitlement programs, such as Medicare and Social Security... Robert Reischauer, former director of the Congressional Budget Office, said he believed that chances of a broad deal have increased a hundred fold in recent months--though only from 0.1% to 10%. Still, he said: ‘The ball moved forward a lot more--and a lot more rapidly--than I thought it would.’... Cuts in entitlement programs, untouchable just months ago, are being pursued by both House Republicans and Senate Democrats, in very different ways.”

Mitch McConnell says no GOP Senator will vote to raise the debt limit in the absence of a broad deficit-reduction deal: http://on.wsj.com/gO9Lfw

The Japanese nuclear crisis is endangering political support for nuclear power in the US, reports John Broder: “The fragile bipartisan consensus that nuclear power offers a big piece of the answer to America’s energy and global warming challenges may have evaporated as quickly as confidence in Japan’s crippled nuclear reactors. Until this weekend, President Obama, mainstream environmental groups and large numbers of Republicans and Democrats in Congress agreed that nuclear power offered a steady energy source and part of the solution to climate change, even as they disagreed on virtually every other aspect of energy policy. Mr. Obama is seeking tens of billions of dollars in government insurance for new nuclear construction...Now, that is all in question as the world watches the unfolding crisis in Japan’s nuclear reactors and the widespread terror it has spawned.”

Current projections suggest the unemployment rate at the 2012 election will be 7.7 percent, reports Phil Izzo: “The U.S. jobless rate will be 7.7% in November 2012, the highest level for a presidential election month since Jimmy Carter defeated Gerald Ford in 1976, according to the average forecast of economists in the latest Wall Street Journal survey...While the 7.7% rate in November 2012 would be the highest in seven presidential election cycles, analysts point out that it is often the overall trend--rather than the level of joblessness--that determines an incumbent’s fate. President Carter was defeated in 1980 by Ronald Reagan when the unemployment rate was 7.5%, lower than the level when he was elected but up from 5.6% earlier in his term. Meanwhile, President Reagan was re-elected in 1984 with the rate at 7.2%, but that was down sharply from the peak of 10.8% recorded in 1982.”

Acoustic version interlude: The Pixies play “Here Comes Your Man” at the Newport Folk Festival.

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

Want Wonkbook delivered to your inbox or mobile device? Subscribe!

Still to come: Republicans begin their push to dismantle Fannie and Freddie this week; the GOP wants to emulate welfare reform on health care; immigration hardliners in state legislatures are losing ground; labor unions are starting to challenge the EPA; and Ferris Bueller, reimagined.

Economy

Republicans are introducing legislation to dismantle Fannie and Freddie this week, reports Nick Timiraos: “Republican lawmakers are preparing this week to introduce a series of legislative proposals to gradually reduce the role of Fannie Mae and Freddie Mac. The effort represents a tactical shift from the comprehensive approach for a speedier wind-down of the mortgage-finance giants that Republicans backed during last year’s negotiations on the Dodd-Frank Act. That legislation would have started cutting the government’s ties to the mortgage giants or begin winding them down in two years...The decision to take a piecemeal approach with individual bills reflects the challenge in forging a political consensus--even among Republicans--around overhauling the nation’s housing-finance infrastructure.”

House conservatives could derail a short-term spending bill, report Margin Cogan and Jake Sherman: “House conservatives have a new object of ire in their war on spending: the short-term spending resolution Republican leaders hope to pass this week. It’s not so much the bill itself as what it represents: the prospect of Republicans spending the rest of the fiscal year squabbling with Democrats on piecemeal spending cuts that neither make a true dent in spending nor show long-term progress in their No. 1 priority. In the House Republican Conference, freshmen and conservatives warn that there must be resolution soon on a budget funding measure that extends through the end of the fiscal year, so that the lawmakers can move on to bigger targets: the fiscal year 2012 budget and the tricky vote on the debt ceiling.”

China won a WTO battle against the US: http://on.wsj.com/eYmvh9

Administrators will start reducing government support for mortgages soon, reports Dina ElBoghdady: “The government’s effort to scale back its role in housing could show up in small ways soon. In April, the Federal Housing Administration plans to raise the annual premium it charges borrowers by a quarter of a percentage point. In October, the maximum size of loans that the federal government backs is scheduled to drop to $625,500 from $729,750...Federally backed loans make up an outsize share of home purchases - about 90 percent - through Fannie, Freddie and the FHA. Taxpayers have kicked in more than $130 billion to cover Fannie and Freddie losses during the housing crisis, and they could be on the hook for more if the FHA depletes its cash reserves, which are already lower than the level required by law.”

We could learn a lot from Britain’s move toward “happynomics”, writes Roger Cohen: http://nyti.ms/hY0Jv2

The proposed mortgage settlement is hardly a “shakedown”, writes Paul Krugman: “Look at the complaint filed by Nevada’s attorney general against Bank of America. The complaint charges the bank with luring families into its loan-modification program -- supposedly to help them keep their homes -- under false pretenses; with giving false information about the program’s requirements (for example, telling them that they had to default on their mortgages before receiving a modification); with stringing families along with promises of action, then ‘sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions’; and, in general, with exploiting the program to enrich itself at those families’ expense...The only real question is whether the proposed settlement lets them off far too lightly.”

Access to government data improves lives, writes Richard Thaler: http://nyti.ms/e2ePQH

Globalization is behind rising inequality, writes Steven Pearlstein: “Companies in the tradable sector, under the pressure of global competition, are busily outsourcing low- and mid-skilled work to other countries to become more competitive and more productive. The higher-skilled Americans who remain in those firms share in the benefits of that shift through wages and salaries that started higher and have been growing faster. In the untradable sector, the story is one of rapidly rising employment but not so rapid a rise in output, which has translated into stagnant wages and benefits, both because of the slower growth in productivity and the increased competition in the labor market from all those workers laid off by the tradable sector...Unless we find a way to dramatically increase the size and scope of the tradable sector, Spence says, we’re in for an extended period of slow job growth and rising inequality.”

Congress could kill hundreds of thousands of jobs without much deficit reduction to show for it, writes Ezra Klein: “What I wish I could tell you is that all this wrangling is likely to produce what economists say we need: growth now and a plan to tackle long-term deficits soon. But the reality is quite the opposite, I fear. There’s a good chance politicians will destroy hundreds of thousands of jobs this year without doing anything at all about our long-term deficit problems. There’s a win-win on the table here, but there’s also a lose-lose—and it looks like Washington may choose the latter.”

We’re not broke, writes E.J. Dionne: “The phrase is designed to create a sense of crisis that justifies rapid and radical actions before citizens have a chance to debate the consequences. Just one problem: We’re not broke. Yes, nearly all levels of government face fiscal problems because of the economic downturn. But there is no crisis. There are many different paths open to fixing public budgets. And we will come up with wiser and more sustainable solutions if we approach fiscal problems calmly, realizing that we’re still a very rich country and that the wealthiest among us are doing exceptionally well.”

Recut trailer interlude: Ferris Bueller’s Day Off done as an indie film.

Health Care

The GOP wants to replicate welfare reform’s approach with health care, reports Julie Rovner: “If Republicans are successful in repealing last year’s health law, they want to replace it with legislation that would give states far more discretion about how to cover people, according to a top Senate Republican. ‘There are some things that Washington can do better. National security is one of them,’ said Sen. Orrin Hatch of Utah, currently the top Republican on the Senate Finance Committee and former chairman of the Senate Health, Education, Labor and Pensions panel. ‘But health care is not.’ In a speech to the conservative Hudson Institute, Hatch said the GOP ideal for health overhaul would look more like the welfare overhaul of the mid-1990s. That law ‘took ideas from the states - not just Washington - and gave them considerable flexibility to operate their own programs,’ he said.”

Health care reform supporters are weighing alternatives to the individual mandate: http://politi.co/dFNdup

Attacks on Donald Berwick set an ugly precedent for coming health care fights, write Harold Pollack and Christopher Lillis: “Berwick serves a Democratic administration, but you can bet that policy experts in the next Republican administration will receive similar rough handling. Imagine what skilled Democratic operatives could do to any Republican nominee who had genuine private-sector ‘experience in the areas of health plan operations and insurance regulation,’ say because they worked for an insurer or an HMO...Politics is a rough business. Some rough and tumble personal criticisms come with the territory. Still, the long-run consequences of blocking a highly-qualified official such as Berwick are quite damaging -- especially at this critical point in time.”

Domestic Policy

Pushes for tougher state immigration laws are losing steam, reports Julia Preston: “Under newly fortified Republican control, many state governments started the year pledging forceful action to crack down on illegal immigration, saying they would fill a void left by the stalemate in Washington over the issue. Now, with some legislatures winding down their sessions, the lack of consensus that has immobilized Congress has shown up in the legislatures as well, and has slowed -- but not stopped -- the advance of bills to penalize illegal immigrants. No state has passed a law that replicates the one adopted last April in Arizona, which greatly expanded the powers of police officers to question the immigration status of people they stop.”

Detroit is converting a third of its schools into charters: http://on.wsj.com/dZij73

The Wisconsin union bill has been signed into law, report Kris Maher and Douglas Belkin: “Wisconsin Gov. Scott Walker signed a bill into law Friday eliminating most collective-bargaining rights for the state’s public employees, while boosting how much they will pay for their benefits and making it tougher for public unions to retain members. Mr. Walker said the law will save workers’ jobs and help get the state on a better financial footing. He rescinded layoff notices to 1,500 state employees Friday, and said the bill would save $30 million through June. ‘What we’ve effectively done is protect middle-class jobs and middle-class taxpayers,’ Mr. Walker said in an interview Friday. ‘When people realize that I think there’s going to be incredible support.’”

Florida’s federal rail funds are up for grabs: http://on.wsj.com/e92Gd8

We need common sense gun control, writes Barack Obama: “First, we should begin by enforcing laws that are already on the books. The National Instant Criminal Background Check System is the filter that’s supposed to stop the wrong people from getting their hands on a gun. Bipartisan legislation four years ago was supposed to strengthen this system, but it hasn’t been properly implemented. It relies on data supplied by states - but that data is often incomplete and inadequate. We must do better. Second, we should in fact reward the states that provide the best data - and therefore do the most to protect our citizens. Third, we should make the system faster and nimbler...We owe the victims of the tragedy in Tucson and the countless unheralded tragedies each year nothing less than our best efforts.”

Adorable mutant interlude: A tortoise with two heads and five legs.

Energy

Labor unions are beginning to take on the EPA, reports Stephen Power: “The Obama administration’s environmental agenda, long a target of American business, is beginning to take fire from some of the Democratic Party’s most reliable supporters: Labor unions. Several unions with strong influence in key states are demanding that the Environmental Protection Agency soften new regulations aimed at pollution associated with coal-fired power plants. Their contention: Roughly half a dozen rules expected to roll out within the next two years could put thousands of jobs in jeopardy and damage the party’s 2012 election prospects. ‘If the EPA issues regulations that cost jobs in Pennsylvania and Ohio, the Republicans will blast the President with it over and over,’ says Stewart Acuff, chief of staff to the president of the Utility Workers Union of America. “

EPA administrator Lisa Jackson has appeared before Congress more than any other agency head: http://wapo.st/emQYUv

Obama countered critics of his oil policy Friday, reports Michael Shear: “President Obama on Friday rejected criticism from Republicans that his administration was blocking domestic oil production and said his government was prepared to encourage new drilling in the face of rising gas prices. ‘Any notion that my administration has shut down oil production might make for a good political slogan, but it doesn’t match up with reality,’ Mr. Obama said during a wide-ranging news conference in which he also addressed the earthquake in Japan and the uprisings in the Middle East. Republicans in Congress said this week that the White House was responsible for the rising price of gasoline. Speaker John A. Boehner of Ohio on Thursday proposed new efforts to expand domestic oil production...In his news conference, Mr. Obama said his administration was moving to encourage more drilling on land and offshore.”

Democrats are highlighting the GOP’s proposed cuts to tsunami monitoring following Japan’s quake: http://politi.co/dQvj2M

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.