Obama, Republicans Choose Their Weapons for 2012 Duel; Which Way Forward for GOP on National Security?; MF Global Scandal Picks Up Steam

Tax Standoff Sets Up a Vicious Election Cycle

“There are still too many Republicans in Congress who have refused to listen to the voices of reason and compromise that are coming from outside of Washington. They continue to insist on protecting $100 Billion worth of tax cuts for the wealthiest 2 percent of Americans at any cost, even if it means reducing the deficit with deep cuts to things like education and medical research; even if it means deep cuts to Medicare.”

-- President Obama in remarks chiding Republicans for the failure of the debt-ceiling Super Committee to come up with an alternative to $1.2 trillion in across-the-board cuts.

“Throughout the process, Republicans made a series of serious, good-faith offers that included tax reforms that would lead to new revenue and more economic growth. The GOP proposals would get rid of special-interest tax breaks and loopholes and replace the current tax code with a system that would lower tax rates for every single American and help create jobs.”

-- House Speaker John Boehner in a USA Today op-ed.

Republicans got what they wanted: an all-cuts package to offset the final $1.2 trillion of the historic $2.6 trillion debt-ceiling hike approved in August.

President Obama got what he wanted: a chance to again say that Republicans again refused to raise taxes on top earners.

Yes, many Republicans are worried about the prospect of $600 billion in cuts to defense spending. But the cuts aren’t going to kick in for 13 months and would be spread out over nine years, so there is time to undo what the so-called “sequestration” process would do.

And yes, Obama doesn’t like the idea of Medicare cuts beyond those he is already seeking, especially just at the moment his health law would be kicking into gear. But he too will have 13 months to change direction.

Both sides got what they wanted because both sides believe that they will be vindicated in the 2012 election and have the upper hand in a last-ditch dive to prevent a fiscal and economic catastrophe.

But Americans are increasingly getting the feeling that this kind of brinksmanship is bad for them and that for all the talk about being “the adult in the room” there just isn’t anybody in charge.

Lawmakers will have seven weeks from Election Day to January 1, 2013 in which to address the expiration of the current tax rates, the imposition of defense cuts, and what will no doubt be a pile of dangling legislative work. The feds may have already burned through the debt ceiling of $16.4 trillion by then, and certainly the government will be operating on life-support continuing resolutions at best.

Obama is betting that having just been re-elected, with a still-Democratic Senate and a less Republican House, he will be able to jam through a tax increase package. Obama will have run on the plan and, if he wins re-election by even the thinnest margin, will have both the voters and time on his side and can get the upper-income tax increase that he has been seeking since he was in the Senate.

Republicans believe that they can take control of the Senate and possibly also the White House, leaving the lame-duck president with little choice but to accede to the wishes of the electorate and sign off on an 11th-hour raft of tax and budgetary rewrites. (Or would he veto, forcing a fiscal shock, and making his successor wait until Jan. 20 to try to clean up the mess with retroactive legislation?)

Either way, a year from now, there is going to be one hell of a mess to clean up in Washington as the world – credit raters, investors, enemy powers – watch to see if our government can free itself in time to change course. Meanwhile, Americans will be watching what will be the equivalent of somebody trying to fix the throttle on a speeding locomotive headed for a washed-out bridge.

Rewriting the tax code and doing budgetary work long undone is work that is hard under good circumstances but will be next to impossible with so many variables. When these daredevils are doing their work it will have been almost four years since the federal government had a proper budget.

Power Play is not part of the Gergenesque chorus today lamenting the “wasted opportunity” of the Super Committee, because there was no opportunity. When you have a president and like-minded Democrats who believe that it would be immoral not to raise taxes to pay for more government spending and conservative Republicans who believe it would be immoral to give a profligate government one more cent - it is not a fiscal disagreement, it is a fundamental split on the role of government. This is not a budgetary debate, it is a moral one.

But, as we will see in the weeks to come on the usually routine matters of again avoiding the still un-imposed Clinton-era reductions to Medicare and funding the government at current rates, this schism will continue to increase the dysfunction of Washington and further increase the disdain of Americans for their government.

So ask yourself this: Which side is more likely to prosper in such an environment? Sounds a lot more like the party that includes libertarians than the party that includes socialists.

But whatever happens, just pray that there is a clear winner. Because given the awfulness that is to come in what promises to be the single nastiest presidential campaign in modern memory, a split decision – say a 50-50 tie in the Senate, a still stout House GOP majority and Obama re-elected with a plurality – might not leave anyone with the strength to ram through a deal or the goodwill to cobble one together.

And that’s when the locomotive could really run off the rails.

 

 

GOP Needs a Line on National Security

“I would not spend a lot of time waiting for the U.N. I will tell you that my position on the U.N. is if they continue to go around as they, the Palestinians state tried to do, that we need to sit down as a country and have a conversation about is the continued funding of the United Nations in the best interest of America.”

-- Texas Gov. Rick Perry, R-Texas, in the “center seat” on “Special Report with Bret Baier” when asked if he would seek U.N. authorization before instituting a no-fly zone over Syria.

One of the core Republican advantages with voters has been as the party of military strength.

While it was Republican presidents who extricated the country from the bloody police actions in Korea and Vietnam, Democrats fled from their long tradition of military interventionism after the youth revolt of 1968.

By 1980, the party that had been most in favor of an aggressive military posture since 1917 had given up on the idea and the party that had most been in favor of well-armed isolationism all along was preaching intervention.

The confusion could not be made more manifest than by George W. Bush who ran on an end to Clintonian nation building but, post 9/11, became the greatest force for interventionism since Woodrow Wilson himself.

So, with America resigned to a long war with Islamist radicals at home and abroad and not paying much attention to the more conventional threats posed by China and, more urgently, Russia, what is the path for the GOP on foreign policy?

At a CNN debate tonight, conducted in Washington with conservative co-hosts the Heritage Foundation and the American Enterprise Institute, the potential nominees will have a chance to find their lane on maters martial.

Barack Obama has covered a lot of the turf with his goldilocks approach. He’s for surges, but with timetables. He’s pulling out of Iraq, but launching new attacks in seemingly every miserable nation you can think of. And if you have any thought about calling him weak or waffling, he’ll point you to his trophy heads of Usama bin Laden and Muammar al Qaddafi.

For a time, the old impulses of the Republican Party were reasserting themselves strongly as candidates voiced support for the end of Afghan nation building and a Paulist pledge to focus their energies here at home.

But, the GOP deeply invested itself in the interventionist approach in the previous year, and there was considerable blowback from the Republican establishment about anything that sounded like a repudiation of the Bush “forward strategy of freedom.”

Mitt Romney jumped back quickly, embracing a hawkier than hawkish stance in an ooh-rah kind of speech at the Citadel. When Jon Huntsman looked like a credible threat, Romney was hedging his bets about Afghanistan to deal with Huntsman’s politically attractive stance in favor of a rapid wind-down there. But with Huntsman unable to resist taunting the very voters whose support he needs, Romney has looked to shore up his status as the hawkish candidate, just as erstwhile contender Tim Pawlenty tried to do.

Rick Perry hedged a bit at first on Afghanistan and has now embraced what might be called the first Bush doctrine of “with us or with the terrorists” topped with a healthy dollop of U.N. bashing. Perry, the only veteran other than Ron Paul in the race, would allow for a drawdown in Afghanistan but would do so in a way that flexes U.S. military might. But Israel seems to be the only foreign policy issue that much arouses Perry other than his Tex-o-centric concern about the collapse of Mexico.

Foreign policy has been the glaring deficiency for Herman Cain. He is now trying to undo the damage done by first saying that he would simply defer to generals about what to do in places like “uz-beki-beki-beki-stan-stan” and then famously floundering when trying to produce his talking points about the U.S. intervention in the Libyan civil war. Cain has tried to articulate a Reaganesque approach of “peace through strength and clarity” but as Cain showed in the CBS debate two weeks ago, he still struggles with the specifics.

New frontrunner Newt Gingrich has a lot of ideas about foreign policy, but he’s hard to classify as either interventionist or non-interventionist. Gingrich is a big fan of using technology and advanced espionage to snuff out problems before they begin, but he has been uneven on the big questions at hand. He had his famous muddle on Libya, but has also held on Afghanistan that the U.S. “get out as rapid as possible with the safety of the troops involved,” but also blasted Obama for pulling out the troops too quickly. The two views aren’t contradictory but are confusing without a Newt-length explanation.

Everybody has some de-conflicting to do on the issue, but what voters might get to see tonight is where the new GOP stands on issues of war and peace.

 

 

Corzine Scandal Deepens

Jon Corzine helped craft the Recovery Act. It’s not coincidental that the things he did here turned out to be the exact same things the recovery act has because way back in the transition period before we were sworn in, when Barack Obama and I were literally sitting at a desk in a high rise in Chicago beginning to plan how we would try to get this economy out of a ditch, literally the first guy I called was Jon Corzine. Not a joke. Not a joke. Because first of all, he’s the smartest guy I know in terms of the economy and on finance.”

-- May 7, 2009 campaign speech by Vice President Joe Biden for then-Gov. Jon Corzine of New Jersey.

Power Play understands how you could lose $1.2 billion, but not how anyone could lose $1.2 billion.

The investment firm MF Global, formerly led by former Democratic star Jon Corzine, may have mislaid as much as $1.2 billion, up from the earlier estimates of half that much. But you can’t just lose track of that kind of cash in your couch cushions. The money went somewhere and the question arises: Who took it?

What had previously been more of an embarrassing story about part of the president’s financial and economic brain trust, former Goldman-Sachs boss Corzine, could have overseen such a towering failure is now morphing into a bona fide scandal.

With people throwing around terms like “bilked” and “fraud,” federal investigators are stepping up their efforts and House Republicans are getting in the game with an investigation of their own.

Corzine, who led the company until the beginning of this month, had been very bullish on the direly downgraded debt of faltering European countries. His assumption, presumably, was that when a massive bailout arrived, the bonds would rise and he would be rewarded. You didn’t need to be an Obama insider to see that the administration is lining up to help prop up the Euro.

It is perfectly permissible to be a bad investor (in fact, good investors encourage it) but it is not permissible to not be able to explain where the lost monies went. That law dates back to the oldest form of investment fraud – pocketing cash and then blaming bad luck when you inform your customers that all the money is gone.

Corzine is going to have to answer some unhappy questions that may involve the unhappiest of all defenses for a onetime master of the universe: pleading incompetence.

Between MF Global and MF Global and Solyndra, Obamanomics have gotten a pair of pretty serious black eyes. Republicans will be doing all they can to keep the swelling up.

 

 

And Now, A Word From Charles

“I think it's quite remarkable what we just heard from the president. His own secretary of defense had said last week in testimony that if the sequester on defense goes in effect, it will have a devastating effect on the military, and essentially, endanger the security of the United States.

Here is the president a week later said he will insist on the sequester, the automatic cut in defense, unless he gets his way. And he was AWOL on this deal. He was not only in Asia when the crunch hit. He was not only uninvolved in these negotiations, but it was clear he had no interest in any serious outcome. The Republicans offered, Senator Toomey offered an increase in tax revenue, which was supposedly one thing that the Democrats said they had to have. And Democrats rejected it.”

-- Charles Krauthammer on “Special Report with Bret Baier.”

Power Play, the political note, is taking a Thanksgiving hiatus for the rest of this week and will return on Monday. The Web show, “Power Play with Chris Stirewalt,” will be online today and Wednesday but dark on Thursday and Friday in observance of the great American holiday.

Thanks especially for you, readers and viewers, for your steadfast support. Power Play wishes for you both bounty and the time to enjoy it. God bless.

Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as digital politics editor based in Washington, D.C.  Additionally, he authors the daily "Fox News First" political news note and hosts "Power Play," a feature video series, on FoxNews.com. Stirewalt makes frequent appearances on the network, including "The Kelly File," "Special Report with Bret Baier," and "Fox News Sunday with Chris Wallace."  He also provides expert political analysis for Fox News coverage of state, congressional and presidential elections.