Time to Panic for Obama
-- The net number of new jobs created in June according to the Bureau of Labor statistics.
The June jobs report is a disaster.
With only 18,000 new jobs added, the report shows that the economy is grinding to a halt as employers pull back. Economists had forecast a gain of 125,000 jobs, far below the more than 200,000 needed just to keep unemployment rates stable, but at least a sign that the doldrums of spring had ended.
The baseline unemployment rate is back up to 9.2 percent and is held there only by the large number of Americans whose unemployment has gone on so long that it has become a terminal condition.
Investors desperate for good news had glommed on to good retail sales numbers and the 125,000-job forecast to keep the rally running on Wall Street, but as has always been the case in the quasi-recovery since the Panic of 2008, those hopes were cruelly dashed.
Senior White House Adviser David Plouffe was right when he said that the 2012 election won’t be determined by the unemployment rate but rather the way people feel about the economy. His point, inartfully phrased, was that a high unemployment number won’t be fatal to the president’s chances if people feel that things are getting better, as they did in 1984.
Today’s number suggests that people feel pretty awful about the economy and that those feelings are going to get worse.
President Obama’s sudden veering on a debt deal and about-face on his “bumps in the road” approach to the recovery suggests that the administration is entering a desperation phase on the subject of the economy.
While it is fine to try to blame his predecessor for the problem, Obama knows that by Election Day, voters will have known only bad times during his entire tenure in office. The Panic of 2008 was a shock that drove voters to Obama, but four years of a crummy economy will drive them away for good.
Once Again, Obama Relies on Pelosi
"Do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in our country. We are not going to balance the budget on the backs of America’s seniors, women and people with disabilities.”
-- House Minority Leader Nancy Pelosi talking to reporters about an effort by President Obama to include Social Security changes in a debt deal.
House Minority Leader Nancy Pelosi gets some serious stroking today as President Obama brings her to the White House in a bid to allay her concerns about a debt deal in the works with Republicans.
Pelosi is a venerated figure on the left for her success in advancing the Obama agenda during the two years of one-party rule in Washington.
When the Democratic Senate shut down and Obama lost heart, Pelosi plunged ahead with bills that would have charged fees for emissions most Democrats say cause global warming, and for a health law that would have created a new government-run insurance program.
Had it not been for Pelosi’s iron will, Democrats would have fallen farther short of their ambitious goals at the start of the Obama era.
But Pelosi is also very conscious of her own status, she of the fresh-cut flowers and military jet fleet. So today, Obama is giving her the status symbol of a one-on-one meeting at the White House to plead for a deal on debt.
Liberals are in despair that Obama is even considering minor changes to entitlement programs, like a possible recalibrating of cost of living adjustments for Social Security recipients.
It was bad enough for the Keynesian set that Obama had submitted to Republican demands that any increase to the nation’s $14.3 trillion debt limit be predicated on cuts in spending. Liberals refer to this as Obama’s “Hooverism,” and warn that such an approach will drive the economy into a deeper slough.
But for Obama to suggest that any change is necessary to Social Security, even a marginal one that would be phased in a decade from now, is a repudiation of yet another Democratic tenet – that the New Deal and Great Society programs will not be in fiscal distress for decades, and if they ever were in trouble, any repairs should be made by making rich people pay more.
Obama’s decision to put an entitlement reform filigree on the debt deal refudiates those talking points and drains some of the potency from the best liberal talking point for 2012: “Congresswoman Susie Creamcheese voted to end Medicare…”
What the left wants right now is a tax hike on the wealthy to fund more spending on government programs, which most Democrats believe would spur the faltering economy. Knowing that Republicans would block that, the left wants to see Obama at least hold the line.
Obama’s best chance for a deal right now is to trade some entitlement tweaks and cuts to spending over the next 12 years in exchange for more borrowing power and some kind of a tax package that closes loopholes.
Republicans are currently sanguine on the deal because if Obama’s 12-year plan goes down, they have a $1.5 trillion short-term package ready to go at a moment’s notice. They’re willing to go along for the ride if there is a tax simplification in it for them, but if it’s a tax increase or the long-term entitlement cuts are just too fake to sell to voters, Republicans can just fall back on the mini-deal.
If Obama is going to try to get the kind of big win he needs on this deal, he will need Pelosi to pacify the anguished liberals in Congress and send a message to the American left that this is as good a deal as they are likely to get.
Once again, Obama needs Pelosi to pull his fat out of the fire. He had better remember to have some cut flowers out in the Oval Office.
EPA Fires Back in Carbon War
“This is a war now. We now know that the EPA won’t quit and the president won’t stop them. But Congress won’t quit either. We’re going to have to fight this out.”
-- Aide to a Democratic House member talking to Power Play about a new move by the EPA to crack down on energy producers.
Energy suppliers are warning of brownouts and serious job losses as the EPA pushes ahead with an effort to crack down on coal-fired power plants.
The new regulations issued Thursday will dramatically increase the existing regulations on potential contaminants released by burning coal, including mercury.
The energy industry says that the levels are far below the point at which human harm is a concern and that the new rules are part of an effort by the agency to make the use of coal unaffordable. Industry leaders say that this is an effort to enforce previously defeated global warming regulations by another means.
Utilities have already begun to shut down coal-fired plants, which make up about half of the nation’s energy supply, in advance of the new regulations. That means hardship in the job-short Rust Belt but also fewer sources of power for the energy-short East Coast.
“If these regulations go into full implementation, you’ll see rolling brownouts in the summer months within the next few years,” said one coal-industry executive to Power Play. “This means the lights going out in Manhattan.”
While a long legal fight will rage over the new regulations, Congress is now looking for a way to clamp down on EPA Administrator Lisa Jackson right now.
In 2010, Jackson was defeated in her bid to regulate carbon dioxide outright when a bipartisan group of lawmakers threatened to strip the agency of the authority to set global warming standards.
But with the administration looking to make an end-around play, lawmakers on both parties are threatening a more serious consequence – massive funding cuts for the agency until Jackson drops her effort.
While President Obama could veto any such slashing, Jackson’s move sets up an unpleasant political battle in swing states crucial to the president’s re-election effort, including Pennsylvania, Ohio, Michigan and Missouri.
"Iran is very directly supporting extremist Shiite groups which are killing our troops. There is no question they are shipping high-tech weapons in there…that are killing our people. And the forensics prove that."
-- Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, talking to reporters.
With the U.S. looking to pull back overseas, the NATO alliance looking weaker than ever and the Muslim world still simmering with revolution, Iran is stepping up its game.
NATO forces face an open-ended commitment to the civil strife in Libya, where rebel leaders concede that they will not be able to topple leader Muammar al-Qaddafi and his fellow tribesmen from their control of the western portion of the country.
The war in Afghanistan continues to go poorly as military gains in the field are offset by security and diplomatic setbacks. Lately, there has been resistance from Pakistanis about using that country’s port on the Indian Ocean to support the ongoing war in Afghanistan. As Pakistan continues to devolve toward Islamism, such difficulties will only grow. President Obama is seeking to undo his double surge in Afghanistan and the rest of NATO is clamoring for a speedy retreat from the region.
Meanwhile, the most important U.S. ally in the Middle East, Saudi Arabia, has seen its influence wane as a succession of its pro-Western allies have been toppled by revolutions in a movement once optimistically called the “Arab Spring.”
In the middle of it all, Iran is continuing to expand its influence.
Aside from its soon-to-be-active nuclear program, Iran is exerting its influence more and more heavily in the places where more moderate influences are waning, particularly its neighbors in Afghanistan and Iraq.
Afghanistan is an opportunity to bedevil the United States and position itself as the dominant regional power in the eastern Muslim world. But oil-rich Iraq is the big prize, and with a Shiite majority and a porous border along flat terrain, it is also the easiest place to expand.
On Thursday, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, told reporters that Iran was behind the attacks in Iraq that killed 15 American servicemen in June.
As the Obama administration looks for a way to extend the U.S. military commitment in Iraq past the end-of-year-deadline, the growing power of Iran will be the central argument for violating the animating principle of Obama’s national political career.
IRS Ditches Political Probes After Dems Join the Fray
“Until further notice, examination resources should not be expended on this issue.”
-- Memo from Steven Miller, deputy IRS commissioner for services and enforcement, telling agents to drop their investigations of donations to outside political groups.
In February, the Treasury Department notified donors to the conservative political juggernaut American Crossroads that they might have run afoul of gift tax laws and be subject to serious penalties and public disclosures.
On Thursday, the agency announced that it would no longer be pursuing such investigations. Carry on. Nothing to see here.
What changed? The only observable difference in the world of soft-money, outside-expenditure groups between then and now is the wholesale embrace of the practice by the Obama Democrats. Former aides to President Obama and other Democratic operatives have launched a four-pronged effort aimed at re-electing the president, holding the Senate, retaking the House and a brain room devoted to digging dirt on Republicans to share with the other three.
The IRS may have determined that the regulations on which it was basing its pursuit of the Koch family and other objects of liberal rage were not reliable, and that any effort to punish them was not worth the agency’s time.
But coming, as it does, after the president has developed a personal interest in seeing wealthy donors unmolested for their political activities, the move is sure to arouse suspicions on the right.
Next week, Power Play, the morning political note, will be in the capable hands of FOX News colleague Wes Barrett. For the same period, Power Play, the Web show, will be helmed by a rotation of generous colleagues including Shannon Bream, Mike Emanuel, Carl Cameron, James Rosen and Juan Williams.
And Now, A Word From Charles
“If you don't have a structural change in any of the entitlements -- for example, if you synchronized the retirement age, the eligibility age of Medicare with the age for Social Security, the Medicare age is inexplicably lower. If you do something like that and then you index that age to longevity, that's a real change. Otherwise it's smoke and mirrors.”
***Today on “Power Play w/ Chris Stirewalt”: Rep. Kevin Brady, R-Texas, A.B. Stoddard of the Hill and Democratic communicator Jason Schechter. Tune in at 11:30 am Eastern at http://live.foxnews.com/ ***