Friday, July 08, 2011

CQ Roll Call Daily Briefing: Not What He Wanted

CQ Roll Call Daily Briefing

Friday, July 8, 2011

Today In Washington

THE WHITE HOUSE: “We still have a long way to go and a lot of work to do to give the American people the economic security they need,” Obama said in a Rose Garden appearance arranged after this morning's surprisingly poor unemployment report.

He has more opportunities to comment on the 9.2 percent jobless rate and the budget negotiations in a series of interviews starting now with TV anchors in Milwaukee, Pittsburgh, Seattle and Raleigh-Durham.

His only other scheduled appointment today was an off-camera meeting with Pelosi in advance of this weekend’s budget talks.

THE HOUSE: Convened at 9 and will be through legislating for the week within the hour, after passing a $649 billion defense appropriations bill that would boost military spending 3 percent in the coming fiscal year. A series of roll calls is now under way on a final passel of amendments — including one that would stop the Pentagon's process for repealing "don't ask, don't tell." It was adopted 236-184.

This afternoon the House will open its fifth spending bill debate of the year, on energy and water programs, but no amendments will be considered before 2 on Monday.
 
THE SENATE: Not in session; next convenes at 2 on Monday.

THE NUMBERS: Republicans said the abysmal jobs report today proved their point that now is no time to be raising taxes. Democrats pointed to the same news as evidence it’s no time to be cutting federal spending, either. Both sides signaled their hope that a big budget deal could give businesses the confidence they need to start hiring again — although getting such a deal without deep spending cuts or some new revenue remains an impossibility on the balance sheet and at the legislative level.

The economy generated only 18,000 net jobs in June, the fewest in nine months, the Labor Department said. The unemployment rate rose one-tenth of a percentage point to its highest rate of the year. Businesses added only 57,000 jobs, and even that feeble gain was largely offset by a cut of 39,0000 government positions. (In the past eight months, federal, state and local governments have cut a combined 238,000 jobs.)

The economy typically needs to add 125,000 jobs every month just to keep up with the increasing population. And at least twice that many new jobs are needed to bring down the unemployment rate. It has been above 8 percent for 29 months, the longest streak since the 1930s, and it's never been so high so long after a recession ended.

Obama urged Congress to clear the patent overhaul and endorse the three pending trade liberalization agreements this summer, in addition to reaching a budget deal, as a way to spur some job creation.

ENDLESS SUMMER: The House’s next recess, planned for the week of July 18, was officially canceled this morning.

The GOP leadership said lawmakers should plan to be in town for votes starting that Tuesday evening and lasting until that Friday afternoon. Unlike Reid, who was unable to make much use of this week’s scrapped senatorial break, the House majority’s leadership has arranged for one marquee fiscal policy measure to be on the floor — a balanced-budget amendment to the Constitution — even though there’s no chance of votes in two weeks on a more meaningful and immediate budget plan.

DWINDLING OPTIONS: Senior congressional aides from both parties and top administration officials are working feverishly today to prepare their bosses’ “hard bargaining” positions for Sunday’s meeting at the White House. Once everyone lays out their purported bottom lines, Obama and Boehner will be able to decide relatively quickly if they have any reasonable chance of persuading the congressional rank-and-file to “jump off the cliff” with them on a $4 trillion deficit reduction deal that includes a dramatic revamp of the tax code and significant curbs in entitlements.

Political reality, logistical limits and past patterns of brinkmanship still point toward a decision to abandon talks of such a grand bargain in favor of what Obama laid out as either Option 2 or Option 3 during yesterday’s meeting with the elite eight of the congressional hierarchy: 10 years of projected deficit reduction worth either $2 trillion or $3 trillion coupled with a debt ceiling increase that carries the Treasury past Election Day 2012.  

Yes, six of the lawmakers in the room said they’d like to try for the big deal. But the two who said they’d rather cut to the chase on a smaller option were Kyl and Cantor — the current Senate GOP whip and the former House GOP whip, and also the party’s two delegates to the Biden talks. Their sense of what can be sold to the troops is arguably better than any of the others’, and they said a deal premised on a tax revamp yielding $1 trillion in revenue could not pass. And it will be pretty difficult to argue with that realpolitik view — because unless a solid majority of House and Senate Republicans is on board from the start, the required near-majority of Democrats will never materialize.

Beyond that, it would be enormously risky for the Speaker — in terms of his chances for success this summer and his standing within his caucus after that — to press ahead with any deal not supported fully and frontally by his principal deputy and potential rival. Whether he goes for the history books or just a slightly-bigger-than-stopgap deal, Boehner is putting his career on the line as much as the president is.

DON’T FORGET ABOUT THE PAPERWORK: There’s also the mundane but important matter of the calendar. Even if the outlines of a deal are hatched this weekend (and more likely there will only be a pledge to get to a deal), and even if the numbers behind big categories of savings and revenue are nailed down in the next week, turning all that into legislation will take another week of round-the-clock staff work.

And that’s assuming that, if there is a big tax rewrite, there will be an agreement that buys a couple of months for those details to be drafted and debated separately. (Consider just one potential provision that might be tough to write into legislative language quickly: Changing the way the government measures inflation to what’s known as the “chained CPI” methods — which most economists consider a more accurate system, and which could save $112 billion over 10 years from Social Security alone while raising $87 billion in revenue, because it would change the indexing of tax brackets).

All that means that the week of July 25 — one week before the Treasury’s default deadline — is the earliest realistic time for legislation getting debated and voted on in the House and Senate. And to meet that timetable, all the legislative niceties that Republicans in the House have pledged themselves to (hearings, markups, sunshine for the bill text etc.) would have to be more or less totally abandoned.

SECURITY MONEY: So much for all that urgent and bipartisan concern six months ago (after Gabby Giffords was shot) about the safety of members and their aides — especially when they’re back home meeting with constituents. The annual spending bill for congressional operations that started moving through the House yesterday would freeze the budget of the Capitol Police, which had sought a 12 percent increase, and cut 10 percent from the budget for the sergeant at arms, who also has a hand in protecting lawmakers. The personnel and overhead allocation to each member and committee, meanwhile, would be trimmed 6 percent. (The bill allows senators to set a different set of internal overhead priorities if they want.)

“We are told to increase security in our district offices. But how are we supposed to pay for it?” asked Michael M. Honda of California, the top Democrat on the Legislative Branch Appropriations Subcommittee.

Today marks exactly half a year since Giffords was shot while meeting constituents in front of a Tucson grocery store, and to mark the occasion the White House said it was almost ready to propose some limited new steps to promote gun safety – probably by the end of the month. The proposals aren’t likely to include a call for legislation but would be carried out by executive order, for example by dictating tighter background-check procedures.

TRAIL TIPS: (1) New York state Assemblyman David Weprin can start looking for a place to live on Capitol Hill starting in two months, but he probably doesn’t want to sign a lease longer than 15 months. He will be formally anointed today as the choice of Democratic power brokers in Brooklyn and Queens (Rep. Joe Crowley first among them) in the Sept. 13 special election to succeed Anthony Weiner — which is tantamount to winning the contest. Weprin signaled right away that he’d bring the same sort of rhetorical flair, if not the same personal habits, to Washington as his predecessor — at least until the 9th District is carved up in redistricting next year. “I’ve never tweeted in my life and I don’t spend any time in the gym,’ the nominee declared yesterday.

(2) There’s an outside chance that Republicans could score an upset in the next special congressional election, on Tuesday in the suburban Los Angeles seat that used to belong to Jane Harman. Based on traditional voting patterns (Obama 64 percent, for example), Democratic City Councilwoman Janice Hahn should be a virtual shoo-in. But GOP businessman Craig Huey has shown considerable strength in the campaign —and has been aided by a highly unusual campaign tactic of Hahn’s: She has focused her own advertising on her little-known opponent while not mentioning her own party affiliation in any of her four TV spots. ( Neither national party is spending significant money on the race, another sign that it is viewed as Hahn’s to lose).

SENDOFF: An unexpected break in the Florida weather allowed Atlantis to lift off essentially on time from Cape Canaveral at 11:29 on NASA’s final shuttle mission.

HAPPY BIRTHDAY: John Dingell, the Democrat who’s the longest-serving House member ever (he’s represented Michigan since 1955), is only its third-oldest current member. He turns 85 today.

Three Republicans celebrate tomorrow: Sen. Lindsey Graham of South Carolina (56), House Ways and Means Chairman Dave Camp of Michigan (58) and Rep. Scott Garrett of New Jersey (52).

— David Hawkings, editor

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Thursday, July 07, 2011

CQ Roll Call Daily Briefing: Eight Is Enough?

CQ Roll Call Daily Briefing

Thursday, July 7, 2011

Today In Washington

THE WHITE HOUSE: After an hourlong strategy session with senior administration officials, Obama and Biden began meeting at 11 with the top eight congressional leaders: Republicans Boehner, McConnell, Cantor and Kyl, and Democrats Reid, Pelosi, Durbin and Hoyer. How long they all stay in the Cabinet Room will offer a clue about the productiveness and substance of their deficit-reduction talks.

The only other event on the president’s schedule is entirely ceremonial: At 3:35 he’ll accept the credentials of the new ambassadors from the Philippines, Vietnam, the Czech Republic and the Dominican Republic.

THE HOUSE: Convened at 10 and at noon will resume debate on the annual defense appropriations bill. A cluster of votes on amendments debated last night will be held early in the afternoon, and the last roll calls of the day will come by 7 — even if that means consideration of several proposals to limit the U.S. role in Libya (and then passage of the $649 billion package) is put off until tomorrow.

THE SENATE: Convened at 9:30 and has voted, 74-22, to break a filibuster and formally begin debating the non-binding and vaguely-worded measure urging millionaires to accept a bigger share of deficit reduction. Reid then declared it the final legislative action of the canceled-recess week.

THE REAL VICTORY: The meeting now under way is Obama’s final opportunity (unless he’s re-elected) for talking congressional leaders into playing budgetary long ball. For different reasons, neither the Republicans nor the Democrats are likely to take him up on his offer of trying one more time for a grand bargain that curbs the spread of red ink by $4 trillion during the next decade.

But even if talk about such a big deal is silenced this afternoon — and replaced, as expected, by a shared commitment to getting a handshake in the next two weeks on a $2.5 trillion deficit-reduction-and-debt-increase deal — the president will be able to claim the higher ground (in the public’s eye, at least) on the issue of fiscal policy. And it will come at a particularly important moment, politically: The June unemployment numbers come out tomorrow, and there’s little expectation they’ll show any dramatic improvement. Obama will probably have little trouble convincing the electorate, at least for a while, that his side went every extra mile in pursuit of the most meaningful deal possible for improving the economy and creating jobs over the long term — and that Republican recalcitrance was the only thing dictating a much more modest and temporary target.

The truth is somewhat different. To get to $4 trillion, the president and his party would have to accept some long-term curbs on both Medicare and Medicaid, and at least consider some smaller Social Security cost-of-living increases and a later retirement age for people who aren’t yet beneficiaries. (And although Obama is declaring himself willing to consider all of that, too many in his congressional rank-and-file are signaling they would be totally spooked at the electoral consequences, or else totally furious at the president for moving so quickly to give away the store and jeopardize the Democratic Party’s base among the poor and elderly.

At the same time, the GOP would have to sign on to a sweeping overhaul of the tax code that might generate fully a quarter of so much deficit reduction. (That would mean lots of closed loopholes, curtailed breaks and trimmed tax expenditures — all paired with some lower corporate rates.) Even though Boehner confirmed this morning that he was open to such an idea during their weekend back-channel talks, an absolute majority of the Speaker’s party would be virulently opposed to such an enormous and complicated revenue move. (And the rest would be so wary of the idea that it would take weeks to bring them aboard.) Boehner’s rank-and file, after all, is still focusing instead on such seemingly anodyne, but ultimately complex and limited, budget solutions as the flat-rate spending-cut plan advocated by the tea party movement.

THE SETUP: For the markets and corporate America, today’s best news will be that the small-ball option ($1 trillion in projected spending cuts, no new revenue at all and a debt ceiling increase lasting less than nine months) is going to be taken off the table, and that all the energy will be spent on a deal that creates budgetary and borrowing stability at least until after the next election.

The Biden talks have brought such a deal much closer to reality than many realize, because those negotiators identified fully $2 trillion in spending reductions: Half from future defense and domestic discretionary accounts, $300 billion in non-health-care entitlements such as farm subsidies, $400 billion in savings from health care entitlements and the rest from projected savings on debt interest payments. All that’s left is for Obama to convince the GOP that $4 in reductions for every $1 in revenue is the best they’ll get when they control only one of the three places that have a say in legislation — and so they should jump at the chance to accept $400 billion or so in additional revenue.

The opening seems to be there, now that Cantor is talking about accepting the closing of “loopholes” and Kyl has gone so far as to say his side has identified as much as $200 billion it’s willing to close.

DRAWING A LINE: Any serious discussion of entitlement changes would be somewhat bolstered (and significantly complicated) by a Pew Research Center poll released this morning. It found widespread worry about the finances of Social Security, Medicare and Medicaid — and a majority supporting either major changes or a complete overhaul for all three. But relatively few support benefit cuts as part of such a revamp.

Sixty percent agreed it is more important to keep Social Security and Medicare benefits as they are, while 32 percent said it’s more important to reduce the deficit. Among Republicans, the split was 50 percent for the benefits status quo and 42 percent for curbing red ink, and among independents, the split was 53 percent to 38 percent. On Medicaid, just 37 percent support allowing states to limit eligibility as a budget-cutting move; 58 percent say no one who’s labeled poor now should lose their health care.

TRADE-OFFS: What seemed only last week like an imminently swift and sweeping trade-legislation deal is both narrowing and slowing down, starting this morning.

Both Senate Finance and House Ways and Means convened to endorse the trade liberalization deals with Colombia, Panama and South Korea that have stalled since they were cut by the Bush administration. But only the Senate panel will package those agreements with legislation maintaining a 2009 expansion of the Trade Adjustment Assistance program, which gives money and retraining to Americans who lose their jobs because of foreign competition — a sweetener that Democrats and Obama view as essential to getting their support for the trade pacts.

Chairman Dave Camp at Ways and Means has decided not to allow the TAA language to catch a ride on the trade deals. Instead, he will propose separate legislation sometime later this year. It’s a seemingly clear shift from what he agreed to only a few days ago as part of a handshake deal with the White House and Finance Chairman Max Baucus. Camp says he’s deferring to Boehner, who doesn’t want the trade pacts complicated or perhaps doomed by legislation that many in the GOP view as too expensive and unnecessary. But, without the TAA language, it’s very likely the trade deals will not secure enough Democratic votes to get through the House.

ROAD TO ... SOMEWHERE: The other big split between the GOP House and the Democratic Senate that’s becoming clearer today is over how much to spend on highways, rail lines, ports and mass transit in the next few years.

Environment and Public Works Chairwoman Barbara Boxer is unveiling a Senate bill that would spend $12 billion more in the next two years than is available in the federal highway trust fund, with the difference to be made up somehow in the future. Transportation Chairman John Mica is going to propose surviving only on what’s projected to go into the trust fund (mainly the federal gasoline tax) for the next six years, because his fellow Republicans in the House would “vote down a Mother’s Day resolution if it had extra spending on it.” (But both will propose using federal loan guarantees to boost private investment in transportation projects.)

The budgetary differences suggest an extremely tough time ahead for any effort to rewrite surface transportation policy, which has been limping along for two years under a series of temporary extensions. The only solace roadbuilders and city officials are taking is that at least the two chairmen have decided to start the process in a somewhat coordinated way — and at a time that allows lawmakers to tell the folks back home that they’re doing something that will sooner or later relieve the summertime congestion choking so many cities and suburbs.

HAPPY BIRTHDAY: Democratic Rep. Judy Chu of California (58).

— David Hawkings, editor

Become a Facebook fan at facebook.com/DavidHawkingsDC. Or follow me on Twitter at twitter.com/davidhawkings.

Copyright 2011 CQ Roll Call Inc. All rights reserved | Privacy Policy

Wednesday, July 06, 2011

CQ Roll Call Daily Briefing: The Show Must Go On

CQ Roll Call Daily Briefing

Wednesday, July 6, 2011

Today In Washington

THE WHITE HOUSE: Obama is meeting with Biden and Geithner now to prepare for tomorrow’s budget negotiating session with congressional leaders. (Invited are Boehner and Cantor, Pelosi and Hoyer, Reid and Durbin, and McConnell and Kyl.)

At 2 the president may test-market his bargaining position when he offers verbal answers (there’s not even a 140-word limit) during his first Twitter town hall meeting. The 140-character questions, which are supposed to focus on the economy, were screened in advance and will be presented by Twitter co-founder Jack Dorsey; 30 longtime followers of the president’s Twitter account were invited to the East Room to watch.

THE HOUSE: Convenes at 2 to begin a freewheeling debate on dozens of possible amendments to the annual military appropriations bill, which would allocate $530 billion for the regular programs of the Defense Department (a 3 percent increase) plus $119 billion for the wars in Iraq and Afghanistan. (The last vote of the day will be by 6:30, assuring more defense deliberations tomorrow.)

The bill affords critics of the U.S. role in Libya ample opportunity to try to proscribe Obama’s options, but not before the next fiscal year starts in October. Some amendments would block money from being spent on either the NATO bombing campaign or CIA efforts to engineer Qaddafi’s ouster. Another would compel the president to get congressional authorization before spending more money.

THE SENATE: Convened at 10 to spend the day debating a non-binding measure urging people earning above $1 million a year to “make a more meaningful contribution to the deficit reduction effort.” (There will be a break from 12:30 to 2:15 p.m. for the weekly party caucuses.) The senatorial Libya debate was put on hold last night because the GOP insisted that the canceled-recess session should be devoted to the budget.

LINE ’EM UP: Tomorrow’s meeting will afford most of the participants little more than an opportunity to be photographed one more time sitting with the president at a polished wood table. It will be the final set piece of this summer’s budget showdown. After it’s over, Obama and Boehner and their aides will be free to stop meeting in secret, because all sides will understand it’s really up to them to decide what’s feasible — and that they have somewhere between 16 days (the fungible deadline for a handshake) and 26 days (the immovable deadline before a default) to get it done.

Tomorrow’s only news will be agreement on what “something big” ought to mean: It’s very likely that the president, who laid down that marker yesterday, and congressional leaders of both parties will concur a deal is still possible on about $2.5 trillion in deficit reduction over the next decade, and a parallel amount of new borrowing authority that would keep the Treasury under its debt ceiling until the winners of the 2013 election take office.

That is of course more than double what had become the (McConnell-driven) default expectation in recent days: $1 trillion in cuts, no new revenue and postponing the debt limit crisis for a few months only. But it’s still far short of $4 trillion, which so many economists and independent commissions say has to be the target for any meaningful effort to forestall long-term budgetary bleakness. (Kent Conrad is ready to unveil a Senate budget resolution today that would hit that $4 trillion mark — a largely symbolic move that satisfies the senator’s own desires for something bold that’s nonetheless a politically risky move for his fellow Democrats, not only because of the tax increases involved but also because the GOP could force a vote on the measure at almost any time.)

It’s now clear that too little time is left to negotiate neither a budget package that big (which would have to include substantial tax increases and substantial curbs to Medicare, Medicaid and social scrutiny) nor the sort of mutual non-aggression pact that would be essential to getting it through Congress. The campaign organizations run by Patty Murray, Jon Cornyn, Steve Israel and Pete Sessions all would have to forswear making 30-second ads lambasting lawmakers for their votes in favor of such a tough-love package. And such a sweeping disarmament treaty would itself be enormously difficult to come by, because it would transform the nature of the 2012 election and upend the politics of attack ads that has come to define today’s campaigns. (Of course, nothing could stop free-spending independent groups from lambasting at will.)

SOMETHING FOR EVERYBODY: Driving toward the mid-sized option, however, would have to include an unwritten understanding that each side would be free to spin it as best it could — to their own benefit and to the detriment of the other side.

For Obama, that would mean declaring that he had done what he promised to do in 2008 and helped bridged the endemic animosity between the parties — a claim that is essential if he wants to hold on to the support of the independents and swing voters who proved his margin of victory last time.

For congressional Republicans, it would mean a deal allowing them to boast that they got Democrats to concede that something significant had to be done to rein in Medicare (and as a result the Democrats would loose their ability to make the Ryan budget their main bludgeon). The party’s attack ads would excoriate Democrats who voted “no” on a historic bipartisan deal because of their big government orthodoxy.

For congressional Democrats, it would mean a deal allowing them to boast that they got the GOP to concede that additional revenue had to play some small role (no more than 20 percent) in mopping up part of the red ink (and as a result Democrats would gain the ability to say they took away some tax breaks for corporate interests). The party’s attack ads would excoriate Republicans who voted “no” on a historic bipartisan deal because of their no-new-taxes orthodoxy.

A PRIME GOP TARGET: The EPA’s budget would be cut 18 percent and the Interior Department’s 7 percent under the seventh appropriations bill produced this year by the House Appropriations Committee. The draft was released this morning and will be considered by the Interior-Environment Subcommittee tomorrow.

Altogether the bill would dictate $27.5 billion in discretionary spending, an 8 percent cut. The committee boasted that climate change programs would be cut 22 percent, the land acquisition budget would be reduced to one-fifth its current size and the bill would tighten purse strings to choke off money for several regulatory efforts. “Americans are sick to death of excessive government spending and regulation that is pushing us further and further away from economic recovery,” House Appropriations Chairman Hal Rogers said.

DIALED IN: Half a dozen House Republicans are being tarred for their “ethical failures” by a targeted telemarketing campaign launched today by the Democratic Congressional Campaign Committee. (Each robocall describes allegations reported in the local media, and all the members have denied any impropriety.)

Voters in Scott Tipton’s district will be told of a Denver Post report suggesting he spent thousands of taxpayer dollars on vendors working with a company that employs Tipton’s daughter and is owned by his nephew. The calls in David Rivera’s Florida district say he’s under investigation by two state agencies for payments he received from his mother’s company. Also in Florida, calls describe an investigation into campaign contributions from employees at a car dealership Vern Buchanan once owned. Calls in New Hampshire aimed at Charlie Bass highlight his ties to and investments in the biomass industry. Voters in the state’s other district will be asked if they’re aware of “troubling new questions” about Frank Guinta’s campaign’s finances. And Steve Fincher’s Tennessee constituents are being told he “admits” not disclosing all his debts and assets.

HAPPY BIRTHDAY: No one from Congress passes a milestone today, but half a dozen celebrated yesterday: GOP Sen. Roger Wicker of Mississippi (60), neighboring House Democrats Nita Lowey of New York (74) and Jim Himes of Connecticut (45), and House Republicans David Dreier of California (59), Todd Akin of Missouri (64) and John Fleming of Louisiana (60).

— David Hawkings, editor

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Copyright 2011 CQ Roll Call Inc. All rights reserved | Privacy Policy