Wednesday, June 29, 2011

CQ Roll Call Daily Briefing: Thinking Globally

CQ Roll Call Daily Briefing

Wednesday, June 29, 2011

Today In Washington

THE WHITE HOUSE: Obama is about to begin a news conference in the East Room that’s sure to be dominated by questions about his objectives and bottom lines in the deficit-and-debt negotiations, as well as his assessments of Afghanistan and Libya. (It’s  the president’s first full-blown session with the press since March and was arranged only last night. The timing likely will upstage the Senate Republicans’ rollout of their balanced budget constitutional amendment, also set to start at 11:30, as well as a 12:30 speech by John Brennan to detail the administration’s counterterrorism strategies.)

The president may make some budget decisions in his Oval Office meeting at 3 with Reid, Durbin, Schumer and Murray, as well as at a 4:30 session with Geithner; in two days the Treasury secretary plans to announce that he’s shifting (but only by a day or two either way) his Aug. 2 prediction for the breaching of the debt ceiling.

The rest of Obama’s day is packed with public events: He’ll welcome the WNBA champion Seattle Storm to  the Rose Garden at 1:50, make an LGBT Pride month speech in the East Room at 5:45 and host a small dinner party at 7 for Gates on his last night as secretary of Defense.

THE SENATE: Convened at 9:30 and within the hour will pass legislation trimming the roster of presidential appointments subject to confirmation. Senators will then adopt some changes to their own rules in order to expedite their process for considering nominees.

Senators rejected, 44-55, an amendment designed to block $108 billion in the International Monetary Fund’s lending authority — a tiny bit of good news for French Finance Minister Christine Lagarde the morning after she was picked to head the IMF.

THE HOUSE: In recess this week, its second “district work period” of the month.

A NUDGE AND A FUDGE: The IMF today urged Congress to move “expeditiously” rather than wait until the 11th hour to raise the U.S. debt ceiling above $14.3 trillion, warning that much more delay could prompt a spike in interest rates that would harm not only the American economy but also world financial markets.

The recommendation came in IMF’s annual report on the U.S. economy, which was written before the fund’s board chose Lagarde as the new managing  director. (She will be returning to Washington — where she graduated from the all-girls’ Holton-Arms in Bethesda in 1974 after an internship with Bill Cohen, then a freshman House Republican from Maine — to take the IMF corner office starting on Tuesday.) But the timing is propitious because last night Boehner reversed course on his preferred timing for a deficit-cut-for-debt increase deal. The Speaker, who had been urging an agreement by July 4 as a way to provide “certainty” to the markets, declared he no longer views the deadline as being five weeks from now. “Dealing with this debt problem and this deficit problem is far more important than meeting some artificial date created by the Treasury secretary,” he told Fox News.

It may well be the case that Boehner is working to ease the pressure on the negotiations, which appear to be in a particularly tenuous and fragile state. Or he may be trying a bit of reverse psychology by suggesting lawmakers should feel free to take more time this summer to get to a deal. That’s because, once they look at the calendar and realize that they’re  due to begin their four-week summer break on Aug. 5, many if not most senators and House members are likely to redouble their efforts to get to “yes” before then.

THE REVENUE SIDE: For the next couple of days though, any meaningful back-channel talks between people in the White House and at the Capitol are being overshadowed by a flotilla of trial balloons — several of which have to do with tax increases that go well beyond the move to end the break on corporate jet purchases.

Senate Budget Chairman Kent Conrad is promoting a big bargain in which his side would get behind extensive and lost-lasting reductions in the amount of money raised through the alternative minimum tax if Republicans would acquiesce in some of the president’s loophole-closings.

And more and more Republicans continue to make clear that their “no new taxes” call is not an absolute — especially if any tax hikes are described with more euphemistic terms like “revenue enhancements” or “increased user fees” or “reduced tax expenditures” (which has the added benefit of sounding a bit like a spending cut). Jon Kyl (a member of the on-hiatus Biden summit team) has made clear that he’d back new user fees and that he’s only opposed to “most tax increases” — the ones harmful to economic growth. John Cornyn (who is running the Senate GOP campaign team) says taxes should at least be up for consideration in the talks. And Tom Coburn (of the late, lamented Gang of Six) says he could support as much as $1 trillion in new revenue — if it was paired with $8 trillion in cuts.

Coburn is also the author, with Joe Lieberman, of a plan to cut $600 billion in Medicare spending over the next decade — in part by gradually raising the eligibility age by two years,to 67, and assessing higher premiums on wealthier seniors. Democrats are rejecting it out of hand — but look for that to change in the next week.

THE POTENTIAL BELLWETHER: If House Ways and Means Chairman Dave Camp goes ahead and publicly announces his support for an emerging trade deal with Senate Democrats and the White House — which would pair approval of the South Korea, Colombia and Panama trade deals with a renewal of the Trade Adjustment Assistance worker training program — it would be an enormously good opening for a summer of compromise.

TRAIL TIPS: (1) Michele Bachmann is spending another day in South Carolina after drawing the largest crowd yet for a 2012 GOP presidential candidate in the second primary state. More than 400 showed up for a rally outside an aquarium in Myrtle Beach last night. (Her introductory music was “American Girl,” even though Tom Petty asked her yesterday to stop using his song.) But the level of scrutiny she’s faced since her recent surge in the polls continues to intensify: A former congressional chief of staff, Ron Carey, has an op-ed in the Des Moines Register describing Bachmann’s House office as “wildly out of control.” NBC reported that her husband Marcus Bachmann has collected $137,000 in Medicaid payments for his therapy practice since 2005, while the L.A. Times reported that a family farm in which she is a partner has recently received nearly $260,000 in federal crop subsidies.

(2) He may be the Washington Republican establishment’s favorite non-candidate for president, but Chris Christie is less than beloved back home. A Bloomberg poll of New Jersey voters out today finds 51 percent don’t back him for a second term in 2013. His favorable rating is 43 percent, 10 points below his unfavorable number. His education spending cuts were opposed by 65 percent — while 51 percent oppose his cancellation of an $8.7 billion rail tunnel to New York.

(3) It was one year ago this week that the House Ethics Committee cleared Laura Richardson of wrongdoing in relation to a foreclosure dispute over a house she owns in Sacramento. But now the watchdog group CREW (Citizens for Responsibility and Ethics in Washington) is bypassing the ethics panel and has asked the FBI to investigate the third-term Democrat from suburban Los Angeles. The complaint is based on a cache of e-mails suggesting she illegally forced her congressional staff to work on her campaign, required them to perform personal errands, intimidated them into making political contributions, solicited contributions on federal property, improperly used appropriated funds and made false statements to Congress. Richardson’s office is denying any impropriety, but the congresswoman has told reporters in California that House Ethics investigators have been interviewing her employees for the past few months.

HAPPY BIRTHDAY: Republican Rep. Virginia Foxx of North Carolina (68) and Democratic Rep. Collin Peterson of Minnesota (67). Jonah Frank King, first child of CNN congressional correspondent Dana Bash and CNN national correspondent John King (1 day).

— David Hawkings, editor

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