Debt Drama in House Today
House GOP Sets the Floor on Debt Ceiling
“I don’t think a lot of people outside of Washington – and maybe some of the people here – really understand how hard this is. This may give them some idea.”
--Senior GOP congressional aide discussing with Power Play today’s vote on an unconditioned, $2.4 trillion increase in the federal borrowing limit.
In case Democrats need any convincing of how difficult it is going to be to obtain President Obama’s requested increase in the federal borrowing limit, House Republicans will remind them today.
More than 100 House Democrats recently signed a letter demanding that Speaker John Boehner bring forward a vote for an increase in federal debt levels without any conditions for cuts or future spending curbs. Imagine their surprise when Boehner agreed and will serve up a bill that would provide enough borrowing to cover all of president Obama’s spending requests for next year without any preconditions.
The legislation will go down to a bipartisan trouncing. Even many of those Democrats who were seeking such a “clean” vote will now oppose the plan on the grounds that it was not offered sincerely. One Democratic communicator described the vote to Power Play as “cheap theatrics” worthy of the cast of “Jersey Shore.”
But the political reality is that increasing the nation’s swollen $14.3 trillion debt is a political loser. Voters hate it and lawmakers don’t even get anything new to give away since the money is going to cover existing obligations.
The point of today’s exercise is twofold:
First, it is designed to rob Democrats of the chance to say Republicans are playing politics with the nation’s credit limit. By offering the vote, Republicans will demonstrate that there is now broad, bipartisan agreement that more debt must be matched with cuts. That will set the new bar for ongoing negotiations.
Second, the vote will help demonstrate to the world beyond the beltway, especially on Wall Street, the gravity of the situation. While the Obama administration’s repeated warnings about a potential default have mostly been cast aside by creditors and investors, the actual consequences of an impasse – gridlock on the Hill ahead of budget season and a partial government shutdown – are not the kinds of things that makes brokers bubble with confidence.
Republicans have scheduled a night vote so as not to spook markets with a defeat (and to deny any Democratic-allied investment firms the chance to make mischievous moves). This highlights the Republican educational effort here. The financial sector – which has never understood Washington very well – needs some convincing about how serious the situation is. Used to dealing with corporate machinations arranged around profit alone, financial types often find the motivations of lawmakers confusing.
Seeing the starkness of this number may help convince the Wall Street club to start leaning on Democrats for more concessions, quicker, to get the deal done. If Democratic patrons like Goldman Sachs start demanding swifter action, the White House and Senate Democrats will step it up.
Palin’s Bus Tour Titillates Press Corps
“Yes. I think the Republican field is already quite strong. It’s going to change up a lot, and I think there will be more strong candidates jumping in. Truly, there is still a lot of time for folks to make up their minds and jump in and get their campaigns together.”
-- Sarah Palin, in a New York Times video blog, when asked by a reporter if is she was happy with the Republican presidential candidates who are “out there so far.”
There’s a lot to be said for managed expectations.
In her first press scrum in many months, Sarah Palin gaggled with reporters in Gettysburg, Pa. as her family bus tour/fundraising effort/relevancy project/water-testing/etc. came to town.
Reporters who have spent months talking about her inelectability and problems dealing with the media found Palin quick and cogent, prompting shock in some quarters. Rather than the belabored analysis that came with her last trip to center stage (campaigning for 2010 candidates), her bus tour has been greeted by something more akin to the whirlwind speculation that greeted her introduction as a vice presidential candidate.
This is evidence of why, whatever Palin ultimately decides to do, she will continue to fight an asymmetrical media war. She will pop up, take her shots and then move on. The fascination (positive and negative) with her is so intense that she can’t remain a stationary target.
As to the only Palin question of real significance – “Will she or won’t she” – Power Play is prone to take the governor at her word when she says she hasn’t made up her mind yet.
But, remember everything that fans and haters alike see as evidence of a run – the PAC fundraising, the increased visibility, the Arizona estate, the biopic – would be just as useful in a role as a kingmaker/party reformer heading into the 2012 campaign. Natural Palin endorsees, like Texas Gov. Rick Perry, will find a more potent ally in what promises to be a grueling primary campaign.
Whatever she does in the future, this is the right time for Palin to shake up her organization, update her brand and increase her relevancy.
War Powers Showdown Brewing
“Last week, the 60-day deadline for the president to gain congressional approval for our military engagement in Libya under the War Powers Resolution came and went. The media scarcely noticed. The bombings continued. We had a hearing on Capitol Hill on the subject, but the administration refuses to bother with the legality of its new war. It is unclear if Mr. Obama will ever obtain congressional consent, and astonishingly it is being argued that he doesn't need it.”
-- Rep. Ron Paul, R-Texas, in a statement on the Libyan war under the heading “Enabling a Future American Dictator.”
The African Union is pushing hard for a cease-fire in the Libyan civil war and there are many at the UN who seem to agree the time has come.
It may be that Col. Muammar al-Qaddafi and his tribal allies are not looking to face the next escalation of the NATO war effort on behalf of the rival eastern tribes and Islamists who have been in revolt since February. It may also be that seeking a truce ahead of assault runs by western helicopter gunships will further enhance the Libyan dictator’s claims of victimhood.
Al Jazeera’s video of what appears to be Western forces on the ground with the rebels will certainly help Qaddafi’s claims at Turtle Bay that he is just another Third World guy getting pushed around by the First World powers.
Whatever is bringing the crazy colonel to the table, it increases the pressure on the U.S. and NATO. Because President Obama opted to enter the war without congressional authorization, American involvement (and, by extension, Western participation) hangs heavily on a March resolution by the U.N. allowing the use of force for humanitarian purposes.
With Libya broken on tribal lines and the Brits and French getting ready to start close-quarters helicopter war as the rebels try to break through the stalemated battle lines, this doesn’t look very much like what the U.N. originally authorized.
But that was back when Obama spoke for the conventional wisdom that said the conflict would be “measured in days, not weeks.” It was easier to get people to look the other way at Turtle Bay and in Congress when the promise was that rebels would rout Qaddafi and then use the nation’s oil wealth to build a new desert Democracy.
When George Will and Ron Paul are on the same page on the subject of the illegality of American involvement in the Libya war, it suggests that the American right is coming to the conclusion that Obama must be made to obey the War Powers Resolution.
Past presidents have belittled the measure, but until Obama, none have chosen just to flout the law. The White House has argued that the American involvement is too small to require congressional authorization, but that doesn’t seem to be washing.
Democrats are getting increasingly riled up about Afghanistan and find the administration’s two-year-plus drawdown plan there to be unacceptable. While today’s papers have the administration already celebrating the budget dividends from its 2014 plan (talk about counting your doves before they hatch), the truth is Democrats are deeply uneasy about the ‘Surge-Retreat II’ embraced by the president.
If the White House can’t deal with the open hostility of conservatives on Libya, it will embolden liberal skeptics of his Afghan plan.
The White House will soon need to run a full-court press with allies like Sen. John McCain and Secretary of State Hillary Clinton to get congressional authorization for the war.
Home Prices Reinforce Economy Jitters
"We keep expecting the economy to perform along norms that are very difficult to achieve when you have this much private debt and public debt."
-- Carmen Reinhart, an economist at the Peterson Institute for International Economics, talking to the Wall Street Journal about the stagnant American economy.
There are about 14.3 million vacant homes in the United States, some 3 million more than before the ‘Panic of 2008.’
The vacancies persist despite some of the lowest home prices in a decade. While the steady stream of foreclosures has helped keep prices depressed, many banks are still unwilling to lend, wages have stayed stagnant and unemployment has remained at a generational high.
The hope was that housing prices had hit bottom, but today’s report, from real estate trackers Case-Shiller, showed the steepest drop in prices in more than 16 months.
This comes as markets are bracing for what promises to be a disappointing second quarter of the year. And the two feed off of each other. If homeowners don’t have equity, they don’t sell and they don’t reinvest the money in home improvements and larger homes.
There is lots to discuss by way of what will govern President Obama’s 2012 chances, but a stagnant or backsliding economy is the dominant one.
Weiner Wags Wage War on Twitter
"We've retained counsel to explore the proper next steps and to advise us on what civil or criminal actions should be taken. This was a prank. We are loath to treat it as more, but we are relying on professional advice."
-- Dave Arnold, spokesman for Rep. Anthony Weiner, D-N.Y.
Power Play takes no position on the claims and counterclaims that have gone back and forth ever since someone posted a lewd photo on the Twitter account of New York Democrat Rep. Anthony Weiner.
His accusers, led by conservative agent provocateur Andrew Breitbart, suggest that Weiner mistakenly posted a picture of some bulging boxers when he really meant to send it secretly to a co-ed in Washington state.
Weiner says his accounts were hacked and that the photo was posted to discredit his efforts (including those efforts to discredit conservatives like Justice Clarence Thomas).
This latest battle between the left and right sides of the Internet will likely rage on for days to come. Weiner seems to have little choice now but to call on criminal authorities to investigate the alleged hack, meanwhile liberal bloggers are busy deconstructing the conservative claims against him.
Whatever happens, politicians ought to heed the cautionary tale of Weiner-gate: Lawmakers who try to exploit social networking run the same risks as lawmakers who try to exploit traditional media. Plus, they do it in a Wild West atmosphere where shootouts can happen without warning.
And Now, A Word From Charles
“Petraeus would have been the logical candidate to be the chairman of the Joint Chiefs. After all, he's the most outstanding general we've had in decades... But the real thing that happens now in the Department of Defense is going to be implementing the deep cuts that Obama is going to insist on. … (Petraeus) is at the Central Intelligence Agency and Obama will get his way on defense cuts, which I think will be deeply injurious to the country.”