Today's Power Play: Dems Stumble Home

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In the category of unforced political errors, the Democratic decision to skip town with tax hikes still looming is a doozy.

Democrats will close up shop in Congress and head back to their districts without having reassured Americans who now understand that a wave of higher taxes is heading in their direction nor having satisfied those who want to see the rich get soaked.

It says something about the scope and priorities of the Obama agenda that the last big item that his party took up was dealing with a $700 billion tax hike. It also says something about the increasingly fractious relationship between the White House and Democrats in Congress.

President Obama still had enough stroke in his own party to prevent Congress from passing the only tax bill that could have won a majority: extending all the Bush tax cuts for at least another year. But the Democratic frustrations with the political perspective of an administration that would discuss a tax hike in an election year is evident and growing.

One aide to an electorally embattled Democrat told Power Play about the sacrifices asked of moderates by the White House: "It's never enough."

Obama might have given members a great way to head home by assenting to the extension of the tax cuts, but held firm on the grounds of deficit reduction and the need to reduce income disparities.

But having led a spending charge that committed the federal government to $11 trillion in new spending, Obama's new assertions of fiscal rectitude ring hollow with Blue Dogs and swing-state moderates who now go home to explain why they came back without dealing with the tax rates. A reasonable question for constituents to ask will be: "Why aren't you back in Washington keeping the IRS off me?"

Obama's plan was too cutesy. He planned to trap Republicans into voting against middle class tax rate extensions because tax cuts for the wealthy and small businesses were not included.

But by failing to communicate with his own party on the subject, Obama launched a fall offensive without adequate forces. Rather than vote for any kind of tax increase in an election year, dozens of Democrats in the House and several in the Senate dug in their heels.

But Obama stubbornly would not cede his position on the need for more taxes on high earners.

The complaint of the fed up voter this year is that Washington dithered while America burned. Lawmakers fought about peripheral matters and focused on unrelated partisan proposals like the president's national health care plan instead of dealing with the two top issues in voters' minds: the economy and federal spending.

And to close out the two-year run, Congress choked on addressing whether or not most working Americans are going to get whacked by a giant tax bill. It shows Democrats as ignoring the plight of constituents and, by leaving so much uncertainty, actually hurts the economy.

And many voters understand what a lame duck means: lawmakers freed from political consequences.

President Obama has been letting his testy side show with questioners at his backyard campaign events, with crabby liberal supporters and with anxious Democrats in Congress.

The great failings of the great grassroots Obama political organization built in 2007 and 2008 is that it only grows one way - from the top down.

Scandal Sheets - Whitman Gets Maid Service; Giannoulias Fudged Bank TimelineWhitman's Untidy Housekeeping

Gloria Allred was there with the crying, scorned woman. The cameras were on. The questions were breathless. But this was not another of Tiger Woods' paramours, instead it was Nicky Diaz Santillan, former housekeeper to California Republican gubernatorial nominee Meg Whitman.

Santillan claims Whitman knew she was an illegal immigrant when she was hired in 2001 and that the federal government had alerted Whitman to Santillan's status in 2003. The tearful Sataillan claimed that Whitman only fired her after she got into politics in 2009.

Whitman said she paid Santillan $23 an hour for 9 years and fired her when Santillan told her about her status.The question for Whitman now is the same as it was for Tiger then: Are there more to come?

Bank Work Haunts Giannoulias

Illinois Democratic Senate nominee Alexi Giannoulias qualified for a huge tax deduction by telling the IRS he worked 500 hours at his family's bank in early 2006.

But he's told voters he was largely gone from the bank by then, suggesting that the institution's failure was none of his doing.

The $2.7 million deduction reduced Giannoulias' income to the point that he paid no federal income taxes last year.

The disclosure Wednesday is the latest example of Giannoulias' role at the now-failed Broadway Bank, which went bust after making questionable loans to, among others, several mob figures.

Giannoulias told the Chicago Tribune he was merely wrapping up old responsibilities, which required about 30 hours a week.

Opponent Mark Kirk's camapaign said that not only does it show Giannoulias was part of the family business after he said he was gone, but that Giannoulias was gaming the tax code to protect his personal wealth.

The Day in Quotes

"Your taxes haven't gone up in this administration."

-- A visibly irritated President Obama to a small-business owner at an Iowa backyard event who complained about the president's proposed tax increase for high-income earners."When the gavel falls tonight, members of Congress are literally as I said, adjourning the Congress to go home so they can work to save their jobs with not having lifted a finger to protect the jobs of millions of Americans from taxes and a tax increase in January."

-- Rep. Mike Pence (R-IN) "On the Record with Greta Van Susteren."

"I don't think it's smart politics or smart fiscal policy. The smart politics is for the middle class to know that we're there for them ... and the fiscal policy is that we have an opportunity to show that we're serious about the deficit too."

-- Rep. Raul Grijalva (D-AZ), co-chairman of the Congressional Progressive Caucus, expressing disappointment to The Hill that his party's leaders wouldn't allow a vote on a looming tax hike before midterm elections.

"It is both a political and a governmental mistake. To me, it is a classic example of what's wrong with Washington.''

-- Rep. Mike Capuano (D-MA) on the decision by Democrats to not act on pending tax increases.

"We should have gotten into it earlier. We made a mistake by not doing so.''

-- Rep. Barney Frank (D-MA) on the decision to delay on taxes.

"Because we're Democrats.''

-- Sen. Chris Dodd (D-CT) when asked by a reporter why his party couldn't agree on a tax plan.

"Frankly, when Reagan was president...the economy went through a very tough time. And even though now everybody remembers him as a great communicator, at the time, everybody was saying, "Oh, the country is falling apart." We had inflation and high unemployment. But we got our way -- we found our way through it."

-- President Obama when asked at a Richmond, Va. backyard campaign stop whether he had been a successful president.

"Jon Stewart...apparently is going to host a rally called something like Americans in favor of return to sanity, or something like that."

-- President Obama, expressing solidarity with a backyard questioner who complained of the acrid atmosphere in Washington.

"I want to get the g-damn thing over with."

-- Rep. Charles Rangel (D-NY) lamenting the decision by fellow Democrats to punt his ethics case until after the November elections.

"If there are short-term political costs to be paid, we need to pay them."

-- Obama campaign manager David Plouffe talking to the Wall Street Journal about looming Democratic losses in Congress resulting from members' votes on health care and global warming legislation.

"From Day One, we didn't drink the Kool-Aid."

-- John Foster, campaign manager for Rep. Walt Minnick (D-ID), explaining to the Wall Street Journal why Minnick resisted the Obama agenda.

"That's why I fought and voted against the Bush Wall Street bailout, the failed Pelosi trillion-dollar stimulus and Obama's government takeover of health care."

-- Rep Michelle Bachmann (R-MN) in a new campaign ad.

"You know, W.W.E. is scripted entertainment."

-- Connecticut Republican Senate nominee Linda McMahon, quoted by the New Haven Independent, when asked by a supporter whether the former wrestling executive had really kicked a grappler in the crotch.

"Mr. Soros believes that he can be most effective by funding groups that promote progressive policy outcomes in areas such as health care, the environment and foreign policy. So he has opted to fund those activities."

-- Michael Vachon, adviser to billionaire currency speculator George Soros, to the New York Times on why his boss is not bankrolling Democratic candidates in the same way he did in 2008 and 2006.

"Because you see that if it weren't for faith, when all logic said it's time to quit, we pursued, we marched on, because we knew God was not releasing us to quit."

-- Republican Delaware Senate nominee Christine O'Donnell in an interview with the Christian Broadcasting Network.

"While I would have been honored to represent Delaware in the U.S. Senate, I do not believe that seeking office in this manner is in the best interest of all Delawareans."

-- Rep. Mike Castle (D-DE) in a statement declining to run as a write in candidate for Senate after his primary loss. Polls show Castle's bid would have helped GOP nominee Christine O'Donnell.

"F--- him!"

-- New York Republican gubernatorial nominee Carl Paladino commenting on New York Post columnist Fred Dicker outside of a New York State Business Council dinner as aides pulled Paladino away. The two clashed over Dicker having a photographer get a picture of Paladino's 11-year-old daughter by a former mistress.

Obama's Day

President Obama has a midday huddle with Democratic leaders from the House and Senate - a last minute strategy discussion before Congress adjourns. In the evening, he will attend a fundraising dinner for the Democratic National Committee at a private home in Washington.

Obama is also scheduled to drop by a Hip-Hop/R&B concert being hosted by the DNC at Constitution Hall as part of the party's Gen44 initiative (as in the generation inspired by Obama, the 44th president). The young Democrats' event will feed into Saturday's mass demonstration by an alliance of liberal, labor and racial advocacy groups.

Vice President Biden is scheduled to fly to Omaha for a fundraiser for House candidate Tom White, one of only a handful of Democrats with any hope of unseating an incumbent Republican, Rep. Lee Terry.

Biden then flies on to New Mexico to stump for Lt. Gov. Diane Denish, who is struggling in her bid to succeed term-limited and scandal-scarred Gov. Bill Richardson. Republican Susanna Martinez leads in recent polls.

Trail Riders - GOP Plays for Keeps in WV; Bobby J Back in the 2012 Game?; Krauthammer on the Merits of Competence

Follow the MoneyThe National Republican Senatorial Committee has committed $1.2 million to support the candidacy of businessman John Raese in West Virginia. Raese was shown with a 2-point lead over Democratic Gov. Joe Manchin in a Rasmussen poll out Wednesday.

President Obama will attend a fundraiser for the Democratic National Committee in the North New Jersey town of Cresskill on Oct. 8.

Sen. John McCain (R-AZ) is donating $1 million left over from his 2008 presidential campaign to help Senate Republican candidates.

Sen. Al Franken (D-MN) will host a fundraiser in Boston on Oct. 11 for New Hampshire Democratic Senate nominee Paul Hodes.

2012 Watch - Jindal Heads to New Hampshire

Louisiana Gov. Bobby Jindal will campaign in New Hampshire for gubernatorial candidate John Stephen on Oct. 14.

Unlike other big-name GOPers to come in to campaign for Stephen - Gov. Haley Barbour (D-MS), Gov. Tim Pawlenty (R-MN) and former Gov. Mitt Romney (R-MA), Jindal is facing a reelection bid next year and has more to risk from talk of a presidential bid.

When asked by reporters this week about his potential 2012 ambitions, Jindal was adamant: "That is just wishful thinking from those who want my job."

Ad Watch - Princess Lisa

With a new CNN poll showing Alaska Sen. Lisa Murkowski gaining traction with her write-in bid, Alaska Sen. Lisa Murkowski is getting pelted with a new ad that plays on old resentments of her 2002 appointment to the Senate by her father, then-Gov. Frank Murkowski.

The spot from conservative group Let Freedom Ring doesn't name Joe Miller, who beat Murkowski in last month's primary, but he is the intended beneficiary.

Here's the script:

NARRATOR: "Once upon a time in Alaska there lived a royal family with a King named Frank. One day, King Frank gave his daughter Lisa a very special present: a Senate seat. The people were not so happy that King Frank gave her the Senate seat because really, it wasn't his to give away. But they were polite people, and they let Princess Lisa keep it for a while. Then the People decided that Lisa had kept it long enough.

But Lisa was outraged. She wanted to keep the people's seat.

BRAT: (Girl's Voice screaming and crying) "It's mine. It's mine. Daddy gave it to ME!" (Trailing off shrieking and crying little girl's voice) "...mine mine mine"

NARRATOR: "But this seat doesn't belong to Lisa. It belongs to the people of Alaska. America doesn't have royalty."

BRAT: (in background) "It's mine, it's mine. They can't have it. I want it. I WANT IT."

STORYTELLER: Not pretty. In fact, pretty ugly, Lisa.

And Now, A Word From Charles

"This is, I think, really a strong issue that Republicans could employ. They can argue it isn't only that the Democrats have governed ideologically left or ineffectively in not solving economic issues, but also, simply incompetently. They have not passed a single appropriation, and they will not. And also on the tax issue, here they are after two years and they cannot tell you what your rates will be on January 1st. That is shear incompetence, apart from ideology and ineffectiveness."

-- Charles Krauthammer on "Special Report with Bret Baier" discussing the Democratic decision to adjourn without a budget or a vote on the soon-to-expire Bush tax cuts