Reid Faces Tough Trail on Debt Hike; NASA’s Farewell not Fond; GOP Beats Up Obama on Gas Prices; Trump Flops in Vegas
Senate Dems Get More Demanding on Debt Deal
“As catastrophic as it would be to fail to raise our debt ceiling, it’s even more irresponsible to not take this opportunity to own up to our unsustainable spending path.”
-- Statement from Sen. Mark Udall, D-Colo., announcing his refusal to grant an administration-requested increase in the nation’s $14.3 trillion borrowing limit without spending curbs.
Senate Democrats are increasingly vocal about their opposition to the increase in federal borrowing power sought by President Obama unless it is attached to sharp limits on spending.
The administration is talking about spending curbs, but is afraid of making the vote conditional because of fiscal uncertainty and the chance of a partial government shutdown.
The government only has about $50 billion in borrowing power left. The Treasury Department has started rearranging its cash reserves to slow the rate of borrowing from its usual $4 billion a day. In the previous week, the government only borrowed about $20 billion as Secretary Tim Geithner deploys cash hoarded for just such an occasion.
Geithner can keep that up until July, but soon thereafter it means shutting down parts of the government in order to meet interest payments on existing debt. The president doesn’t want any kind of a shutdown and is therefore not eager to see a lengthy negotiation over debt cap.
Plus, with the economy faltering and inflation on the rise, the president believes the government’s lenders will charge higher interest rates (which could further hamper growth and potentially weaken the dollar even more) if there is a debt stalemate. Fiscal hawks argue that the interest rate crunch is more likely if the government ignores the current fiscal crisis and increases borrowing unconditionally.
Senate Majority leader Harry Reid, though, has something of a revolt on his hands when it comes to the debt ceiling. Sens. Joe Manchin of West Virginia, Mark Udall of Colorado, Kent Conrad of North Dakota, Mark Pryor of Arkansas and others have been taking increasingly sharp stands in favor of steep conditions on the debt hike.
What the White House is looking to avoid is a big battle now. The president’s men need to save their bargaining chips for the major budget battle that is looming at the end of the fiscal year. They are not looking for members of their own party to trade things away on a debt vote. Remember, the administration’s original position was that the debt hike should be immediate and unconditional.
House Republicans have let the Democratically controlled Senate know that their team will have to serve something up. The GOP is generally opposed to any increase, and seems unfazed by the prospect of a partial summertime shutdown.
But with Reid’s 53-member caucus at loose ends over how to structure the debate and the Gang of Six negotiations for a grand, bipartisan compromise on debt and deficits seemingly stalled, the majority leader will have a very difficult time accommodating the president’s demands.
The administration is sending Vice President Joe Biden to help Reid put together some sort of deal, but the demands being made by members of the Democratic caucus would cause serious headaches for the administration, especially knowing that Republicans will again be squeezing the president on spending when the fiscal year ends in September.
Reid needs all 53 of his members and seven Republicans to pass something, and it looks increasingly likely that the concessions will have to be pretty deep to get there. In the fight over spending for the current fiscal year it was John Boehner who was on the spot, but since this is a Democratic request and because political pressures and ideological splits are rending his caucus, the pressure is on Reid this time.
Adding to Reid’s woes is the fact that his opponent in this budgetary battle, Majority Leader Mitch McConnell excels at procedural guerrilla war and will make even a cagy tactician like Reid pay dearly for every vote. Obama did more for Reid in 2010 than any other candidate in his party. Now it’s time for Reid to earn his keep.
Obama Marks A Farewell, Not Frontier, for NASA
“[President Obama’s space plan] would make this country dependent on yet-to-be developed ‘commercial crew’ services of unknown cost and safety, with no government-backup system available.”
-- Rep. Gabrielle Giffords at a March 2010 hearing on the president’s proposed NASA budget.
Today’s scheduled launch of the Space Shuttle Discovery is getting a lot of attention for its attendees, President Obama, the first lady and Rep. Gabrielle Giffords, the Arizona Democrat badly injured in a Jan. 8 shooting.
But for NASA, an agency that has fallen on hard times of late with a budget squeeze and a muddled mission, the occasion is a sad one. The final flight of the Discovery is the second-to-last flight for the 30-year-old Shuttle program and part of winding down of the agency’s role in sending payloads into orbit.
Obama will be only the third president to attend a launch (the events are often scrubbed for weather reasons and carry the risk of disaster, so presidents have often stayed away), and his attendance is surely more to honor Giffords and her husband, the commander of the Discovery crew, than to highlight the program itself.
Obama’s strategy for NASA essentially ends what has been the most visible part of the agency – blasting stuff into space. Obama, and his pick to lead the agency, Charles Bolden (he of the Muslim scientific outreach), are privatizing the launch portion of NASA’s mission as part of a plan they say will save money now and lead to deep-space exploration in the future.
The reaction from the spaceflight community and Congress, including from Giffords who was the chairwoman of the House committee that oversees NASA, was swift and sharply negative. Aside from meaning the loss of thousands of jobs in Florida, the plan also means that the U.S. will intentionally give up the capacity to put payloads into space.
NASA has been in a decades-long stall and increasingly seemed to be operating for the sake of itself. In 2004, President George W. Bush tried to push toward a manned mission to Mars, but the cost of such a project, especially given the expense of maintaining the American commitment for the floating hostel that is the International Space Station, proved prohibitive.
GOP Pumps Up Pressure on Gas Prices
“If the White House and Democrats are serious about lowering gas prices, they will work with us to pass this legislation and respond to the American people, who are demanding action to increase American energy.”
-- Statement form House Speaker John Boehner in a statement announcing a three-bill package that would roll back Obama administration curbs on offshore oil drilling.
President Obama is feeling intense political discomfort from high gasoline prices, and Republicans are looking to increase the pain with a legislative package aimed at the president’s offshore drilling crackdown.
The price of gas has doubled since Obama took office and economists suggest that the only thing that will keep it from heading to $5 will be if the faltering economy (damaged by gas prices themselves) brings a reduction in demand.
House Republicans are highlighting a chart (http://tinyurl.com/428dxsj) that shows the soaring prices under Obama and highlighting Republican claims that Obama’s’ oil policies have worsened the problems.
Obama and his fellow Democrats (along with many in the press) seem surprised that they aren’t getting more pushback in their effort to end billions in tax breaks for oil companies. Speaker John Boehner and now House Budget Committee Chairman Paul Ryan have both said they are open to the idea as part of an overall tax-code simplification coupled with across-the-board rate reductions.
But ending those breaks is part of Ryan’s budget plan passed by the House last month. A revenue-neutral tax simplification (fewer breaks but lower rates) is, in fact, one of the only areas of common ground between the Obama White House, the president’s debt commission and House Republicans. The details are difficult, but tax simplification is so hot right now.
What’s not so hot is Obama’s plan to eliminate the tax breaks and take the money to subsidize green-energy initiatives. Take the money to finance a rate reduction and simplify, yes. Take the money for Obama pet projects, no.
Obama’s existing strategy on energy prices is that the U.S. can “ride out” the current spike and should instead focus on spending money on programs that will reduce oil consumption in the future.
But when people are paying so much at the pump, it’s hard to convince them to suffer now for the greater good. High gas prices hit middle class suburbanites – the most important electoral group for President Obama – very hard. They have little elasticity in their household budgets and mostly drive considerable distances to work (where their wages have stagnated).
The Republican legislative push to roll back Obama’s gulf drilling ban and open new territory for exploration won’t reduce gas prices in the short term, but would help lower future pressure on oil commodities. The House should easily pass the plan and it will draw considerable bipartisan support in the Senate, enough that Majority Leader Harry Reid might be forced to offer some compromise alternative to keep his increasingly rebellious caucus in check.
That means Obama could actually see legislation that challenges his clampdown on drilling imposed in the wake of the 2010 BP spill in the Gulf. If he signs, he will further dispirit environmental activists who believe Obama’s ardor for the earth is insufficient. If he vetoes, Americans getting pummeled by high prices (made higher by increased warm-weather demand) will wonder why.
Trump Jumps the Shark
“Listen mother****ers, we’re going to tax you 25 percent.”
--Donald Trump in a Thursday night speech to supporters in Las Vegas about his plan for a tariff on Chinese goods.
In the latest FOX News poll, taken before President Obama was forced to address the place of his birth, Donald Trump was in a tie for third with Sarah Palin, Newt Gingrich and Ron Paul among Republican voters.
The FOX News poll is particularly instructive because it drills deeper into the field than most pollsters bother to do (pizza mogul Herman Cain rocking a 4 percent) and still produces a 13 percent undecided.
With the first debate less than a week away, it’s very clear that this is anybody’s game. It’s also clear that the mainstream media mania for a Trump candidacy will soon fade whatever Trump’s antics and that Republican voters will move on to more serious considerations.
America may be ready for a president who talks tough, but not for one who punctuates his stump speeches with multiple f-bombs.
And Now, A Word From Charles
“Even if you had a mild decrease in the amount of government spending, this is still an economy where the government is stimulating with a $1.65 trillion deficit. That is the largest in history of the galaxy. If that isn't enough, then what is enough?”