Archive for May, 2011

Failed But Symbolic

Posted on May 31, 2011. Filed under: Uncategorized |

By Caren Z. Turner

Memorial Day… aside from the burgers and brews and barbeques, we remember those who have served our country and lost their lives. The corridors of the Cannon House Office Building commemorate those who have died in the ten years of war in Afghanistan and beyond. Like sentries, their young faces are posted on easels outside the offices of numerous members of Congress. The call to withdraw troops from Afghanistan grew a bit louder last week as a bipartisan vote called for troop withdrawal.

Many of our greatest problems are not halfway around the world, they are halfway down the block. And rather than nation building in Afghanistan, we need to do some more nation building right here in the US.” Rep. Jim McGovern, Floor Statement 5/26/2011. The measure failed.

Another failed but symbolic vote was taken yesterday night. This one was designed to demonstrate that the House of Representatives does NOT have the votes to increase the debt ceiling without decreasing spending. The vote should give the Republicans considerable leverage for their meetings at the White House tonight. For detailed information about the debt ceiling click here.

The Presidency? A new effort to draft Paul Ryan is underway. Jon Huntsman’s candidacy is picking up steam. Herman Cain, former CEO of Godfather’s Pizza, as well.

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GOP Presidential Hopefuls Reflect The Party’s Move To The Right

Posted on May 31, 2011. Filed under: Uncategorized |

By Carl Chancellor

Like the classic Abbott and Costello routine “Who’s on First,” keeping up to the minute with the ever changing line-up of Republican presidential wannabes will challenge even the most ardent political watcher.

It wasn’t so long ago that Donald Trump was all the political rage. That was, of course, before the human publicity machine “fired” himself and bowed out of the race. Likewise, Mississippi Gov. Haley Barbour, Indiana Gov. Mitch Daniels, and former Arkansas Gov. and Fox News host Mike Huckabee, all once highly touted as possible Republican nominees, withdrew their names from consideration. While GOP-wish list darlings– New Jersey Gov. Chris Christie and Jeb Bush, the onetime governor of Florida and the brother of former President George W. Bush, thus far appear to be putting their presidential aspirations on hold at least for the foreseeable future.

At the moment, the still unsettled field seeking the Republican nomination for the right to challenge President Obama in 2012 includes a group of conservatives who reflect the party’s rightward drift— from former Govs. Mitt Romney of Massachusetts, Tim Pawlenty of Minnesota, Jon Huntsman of Utah and of course, Sarah Palin of Alaska, House Speaker Newt Gingrich and Tea Party favorite Rep. Michele Bachmann (Minnesota). And least we forget, pizza magnate Herman Cain and Rudy Giuliani, the combative ex-mayor of New York, who like Romney failed to win the party nod in 2008, have added their names to the GOP presidential mix as well.

The most recent name to emerge is that of Texas Gov. Rick Perry, he of the proven fundraising track record and solid conservative credentials, who has said he would consider entering the race.

While there will be divergence on specific issues, the ideological divide between these GOP presidential hopefuls is narrow. On the whole, they are more than moderately conservative and come out strongly in support of the established Republican playbook—spending cuts, lower taxes and limited government regulation. Likewise, on the social issues side of the political ledger, they all have gone on record opposing abortion, gun control and gay marriage.

When it comes to handicapping the potential Republican nominees there is only one sure bet: there will be no centrist Republican candidate heading the party’s ticket in 2012, thanks in large measure to the influence of the Tea Party movement. Already, many wannabe GOP nominees have found it necessary to distance themselves from previously held positions that would not now pass the conservative smell test. The Associated Press recently noted that Pawlenty and Romney “have backed away from earlier embraces of regional ‘cap-and-trade’ programs to reduce greenhouse gas pollution” as part of an overall climate policy.

The GOP drift to the right is underscored by a recently released survey conducted by the Pew Research Center.

“The most visible shift in the political landscape is the emergence of a single bloc of across-the-board conservatives…The long-standing divide between economic, pro-business conservatives and social conservatives has blurred,” Pew reports. “Today, Staunch Conservatives take extremely conservative positions on nearly all issues – on the size and role of government, on economics, foreign policy, social issues and moral concerns. Most agree with the Tea Party and even more very strongly disapprove of Barack Obama’s job performance. A second core group of Republicans – Main Street Republicans – also is conservative, but less consistently so.”

Playing to increasingly conservative Republican voters will be crucial to securing the GOP nomination, but will the eventual GOP candidate be able to politically pivot to win independent voters who will again be decisive in the general election?

What the Pew report makes clear is that independent voters, which the researchers broke into three groups, are extremely diverse and have very little in common.

“Libertarians and Post-Moderns are largely white, well-educated and affluent. They also share a relatively secular outlook on some social issues, including homosexuality and abortion,” Pew reports. “But Republican-oriented Libertarians are far more critical of government, less supportive of environmental regulations, and more supportive of business than are Post-Moderns, most of who lean Democratic.

“Disaffecteds, the other main group of independents, are financially stressed and cynical about politics. Most lean to the Republican Party, though they differ from the core Republican groups in their support for increased government aid to the poor,” the report went on to observe.

Again according to AP, the Pew report notes that independents who “played a determinative role in the last three national elections,” will have even more clout in 2012. They comprised 30 percent of the national electorate in 2005, Pew found. They now make up 37 percent.

The challenge for both Republicans and Democrats is appealing to a growing number of Americans choosing not to identify with either party. This should prove a much easier task for President Obama since he is not facing a primary challenge and can concentrate on winning independents. For Republicans, however, it’s a daunting proposition. The eventual GOP presidential nominee will have to win the party’s conservative base while not moving too far right and risk alienating those all important independents.

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The Debt Ceiling Debate, From Washington to Wall Street

Posted on May 31, 2011. Filed under: Uncategorized |

By Scott Orr

The raging fight over the need to raise the federal government’s debt ceiling may, at first blush, look like your typical game of political brinksmanship, with the Republicans and Democrats drawing lines in the sand and waiting for the other to blink.

But there is another player in this high stakes game, one that could help shape the 2012 elections and the future of both parties. Wall Street is in the thick of what may appear as a strictly Washington row. And lawmakers are playing close attention as they seek to determine how far they can push the gambit before Wall Street revolts.

For months now, the Congress has known what’s at stake if the debt limit is not raised by August 2, the date Treasury Secretary Timothy Geithner has said the government will no longer be able to pay it obligations. Both sides say that will not happen, but the Republicans are holding the debt ceiling legislation hostage as they try to extract spending cuts of $2 trillion over the next 10 years.

But some experts believe the economic damage could begin much earlier than the August 2 default date, as investors around the world begin to question the United States’ credit worthiness. And the consequences of that damage would be political as well as economic, as Wall Street decides who it will back in 2012.

Wall Street money generally backs winners: it helped Obama win the White House in 2008 after tiring of George W. Bush’s economic stewardship and it helped Republicans make big gains in 2010 amid concern about over-regulation by the Obama administration. This is why Obama has been courting Wall Street and the Republicans in Congress are taking Wall Street’s temperature on the issue.

Rep. Paul Ryan, a Republican of Wisconsin and House Budget Committee Chairman, told CNBC recently that “lots” of Wall Street players aren’t concerned about a debt default so long as it lasts just a few days.

“I think most people think that’s nuts,” Nigel Gault, the chief U.S. economist forecaster at IHS Global Insight, told McClatchy Newspapers. Still, this kind of thinking is fueling Republican hardliners in their zeal to slash federal spending in the name of deficit reduction. At the same time there is fear among mainstream GOP leaders about overreaching on the issue.

The Washington Post reported the other day that House Speaker John Boehner (R-Ohio) “has had conversations with top Wall Street executives, asking how close Congress could push to the debt limit deadline without sending interest rates soaring and causing stock prices to go lower.”

Congress has raised the debt ceiling 10 times since 2001 and economists agree that failing to raise the limit would be a disaster, with a reinvigorated recession being the least of the worries. Stock markets would plummet, credit would seize up, the government’s credit rating would drop and interest rates would soar, they say.

We believe Congress should settle the issue now, instead of risking long-term damage to the economy for the sake of political gain.

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Obama and Osama

Posted on May 3, 2011. Filed under: Uncategorized |

Evolution of a Presidency?

I don’t know about you, but I was shocked to learn that President Obama commenced and implemented the successful surgical strike that resulted in the capture and demise of Osama bin Laden. Since the debates with Hilary Clinton, I’ve contended, as have many, (both Democrats and Republican Members of Congress) that the President is bystander in chief. Frankly, I’m pleased to be dead wrong. Rather than Professor Obama, we can finally see Commander in Chief Obama. Instead of the passivity or inept actions of the 444 days of the Iranian Hostage Crisis that tainted Jimmy Carter’s Presidency, Obama acted in a deliberate and meticulous fashion.

Thank you to our Navy Seals, especially the spy novel style Joint Special Ops Command, (JSOC). In a rare display of national unity, both Republicans and Democrats praised Obama’s leadership. Can’t wait to see the movie!

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“That’s Where the Money is”

Posted on May 2, 2011. Filed under: Uncategorized |

Bank robber Willie Sutton, when asked why he robbed banks, once famously replied “because that’s where the money is.”

Now we’re not comparing President Obama’s fund raising operation to bank robbery, but there is a certain symmetry between Sutton’s remark and Obama’s recent efforts to cozy up to Wall Street. Let’s face it, President Obama has not exactly been Wall Street’s best friend, in turn bashing the financial sector as greedy and backing stricter government regulation.

In fact, feelings were so raw that one hedge fund manager said in a widely circulated email that he and his colleagues felt a bit like battered wives: “I am sure, if we are really nice and stay quiet, everything will be alright and the president will become more centrist and that all his tough talk is just words… I mean, he really loves us and when he beats us, he doesn’t mean it.”

So it was a bit surprising that dozens of Wall Streeters turned out at $38,500 each for a fund raiser the other day that netted the president’s reelection campaign between $2 million and $3 million. Obama wants to raise $1 billion for the campaign, a goal he is unlikely to reach without help from the financial services industry.

While some key Wall Street players who helped Obama in 2008 have reportedly turned their back on him – like Steven Cohen, Dan Loeb, and Kenneth Griffin – others have remained loyal. Bankers Orin Kramer and Evercore’s Ralph Schlosstein attended a recent Obama fundraiser and former New Jersey Gov. Jon Corzine, the ex-head of Goldman Sachs, hosted the fund raiser at his home that included a number of Wall Street bigs.

“People are worried about the future of the American dream,” President Obama told 60 donors at Corzine’s Manhattan digs, according to the New York Times’ Helene Cooper.

“Everybody here almost by definition has lived out that American dream,” he said. “The question is, will that same story be told by our children and grandchildren?” the president asked. “Will it be told by the folks who do all the work here in New York City and across the country?”

In the end, whether or not Wall Street warms to Obama’s reelection bid will depend on how the economy progresses between now and next year. While the economy has shown signs of awakening, high gasoline prices, severe storms and budget cuts could keep it from the kind of explosive growth that would surely propel Obama to a second term.

Federal Reserve Chairman Ben S. Bernanke, during his first ever press conference last week, said the Fed expects the economy to maintain solid growth in the 3 percent range this year, despite sub-par growth of less than 2 percent during the first quarter of the year. Still, he sounded at least a bit encouraging, noting that while the cost of gas and food have increased in recent months, the increased fuel costs have not yet been passed along to consumers and inflation trends do not appear troubling.

But the trends report most critical to handicapping Obama’s reelection chances is most likely the Federal Election Commission report for next quarter, which won’t be here until the summer. That’s when we’ll learn if Obama’s strategy is paying off where the money is.

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Budget Cuts Can Leave Scars

Posted on May 2, 2011. Filed under: Uncategorized |

The most important issue in the 2012 presidential election is also the most politically dangerous: the size of the federal budget deficit.

Everyone agrees that at $1.5 trillion per year and growing, the deficit is the Damocles’ sword hanging over America’s economic come-back. The solutions are simple: cut spending, raise taxes, or do both. But simple and politically easy are not the same thing, as America is about to find out.

Raising taxes? We can take that one off the table right now. As Walter Mondale proved in 1984, running for president by being honest about the need to raise taxes is like defending yourself against a right hook by leaning into it.

So that leaves cutting spending, an idea that took on new currency recently as President Obama and congressional Republicans crafted a budget deal that avoided a government shutdown. Obama, wisely, is now casting himself as a budget hawk who has more cuts up his sleeve.

Republicans, facing an incumbent many believe has the inside track to victory, may well find themselves in the politically risky position of running on a platform of cutting the federal deficit by drastically reducing spending. That sounds like a winning platform, right? Well it could be, until you get under the covers and start pointing out exactly where those cuts might be made.

Many Republicans are embracing a bold budget outline proposed recently by Rep. Paul Ryan (R-Wis.), one that does not spare Medicare, Social Security, and other popular entitlement programs that have long been considered the third rail of American politics.

Many believe the 2012 presidential race is President Obama’s to lose. So far, there has been little electricity about any of the GOP candidates, the economy is picking up slowly and his approval ratings are improving. In fact, at near 50%, they are about the same as Ronald Reagan’s were at this point in the 1984 reelection cycle, and he won in a landslide.

So it would seem the GOP will be forced to decide how audacious it can be in proposing budget cuts. Expect a surgical approach, not one that makes any hard decisions about Medicare or Social Security.

We’d like to see a serious debate about federal spending, one that includes a discussion of reform for the big entitlement programs, as part of the coming campaign. This, of course, is not going to happen.

We’ve been around national politics a long time and we can always hope, but at the moment it looks like the campaign will remain focused on important issues like birth certificates and Donald Trump’s hair.

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