Wednesday, July 8, 2009

Sarah Palin -- Smart or Crazy?, Some Pause for the Prez, 2nd Stimulus?, Healthcare?

First and foremost, let me apologize for the length of time between recent posts. As I mentioned in my last post, I was out of town for a few days over the holiday and regrettably came down with some ugly flu symptoms. Fortunately, I'm back at least to about 70 or 80% of normal and ready to talk some politics. So let's get to it.

Ex-Governor Sarah Palin (R-AK)
The question around political circles since Sarah Palin's unexpected and seemingly odd resignation has come down to the classic one-word question: why? A cunning political move to free her up to run for President in 2012? An escape from ethics probes that would damn her? Caribou Barbie yielding under the pressure?

Probably more than one of the above. My assessment is that a combination of Presidential ambition and personal finances.

Let's examine the political implications first. Governor Palin could not have effectively run for re-election in 2010. Think about it -- she'd have to campaign hard in Alaska (and frankly, risk losing, with dropping popularity there) all the way through November, be resworn into office in January 2011 if she won and then immediately start campaigning for President. It would look horrible, not to mention the fact that having a home base in Alaska is absolute nomansland for waging a national campaign and would have created a logistical and public relations nightmare. So why she was out in 2010 is easy.

So why not serve out the term? First of all, because only bad things were going to happen in Alaska. Her popularity was diminishing, she was already receiving local scorn for national appearences and doing good things for Alaska doesn't really help you win a Republican Presidential nomination process. Secondly, money. As a sitting Governor, Palin cannot accept fees for public speaking appearences. Also, by Alaska law, she must pay the cost of fighting ethics complaints out of her own pocket. And there have been a ton of ethics complaints. Palin is calling dirty pool on the ethics complaints and she may well be right, but the law makes no stipulation for whether the complaints are fair -- she has to pay out of personal funds. Resign and those ethics complaints go away and she is free to accept $25K a pop speaking engagements.

Make no mistake about it, I absolutely believe Palin is running in 2012 and I don't count her out for a second. A couple of liberal friends of mine couldn't believe I held this point of view as they considered her a lightweight.

But consider this: she drew bigger crowds and more passion than John McCain in 2008 and she is a darling among social conservatives who are the biggest block that shows up to vote in Republican primaries and caucuses. There are few credible 2012 nominees left: Jindal crashed and burned in his first national appearence, Sanford and Ensign are embroiled in nasty affairs and there isn't a single viable candidate that I can see in congress. Palin, Mike Huckabee, Mitt Romney and Minnesota Gov. Tim Pawlenty are the only top-tier candidates that I see. And Huckabee and Romney don't have real day jobs either, so it's no disadvantage against them for Palin to be out of office.

I'm not calling her a favorite yet, but I did take a bet from one of my friends who offered me 10:1 odds against her winning the nomination. I think she is better than a 10:1 shot. But a lot can happen in the 3 years between now and when the nomination will be decided. A white knight (or white elephant) could show up. Palin could be forgotten. Obama could be so popular that no A-listers decide to run. But as I've said many times, don't count the most charismatic, attractive and freshest face on the GOP scene out of this. Not by a long shot.

Presidential Approval -- Storm Clouds Forming?
President Obama continues to slowly slip in public opinion polls. The latest daily tracker is below.

As of today, his approve minus disapprove stands at 20.7%, his lowest score yet (although still 13.5% higher than his vote spread last November.) He has precious few upward ticks in the trend which seems to have been steadily but slowly downward.

Looking at the monthly averages, President Obama finished June down 2.9% from May and is on pace to shed about the same again in July, although he may lose more as the pace of decline has been more rapid in the past week.

The breakdown by poll-type is even more sobering:
Adult Americans: +26%
Registered Voters: +22%
Likely Voters: +5%

According to the one "likely voter" model poll -- the Rasmussen Poll, President Obama is actually slightly behind where he was in November. Now, I have questions about why the Rasmussen numbers are so far off the registered voter numbers from respected firms like Quinnepiac -- a 5 point spread wouuld be more typical than a 17 point spread, but in the absence of another likely voter model, we go with what we've got.

So what's causing this decline? As James Carville said in 1992, it's the economy, stupid. Independents are starting to fear that we are spending a ton of money to little effect. They know we passed a $787 billion stimulus package and that since then unemployment has continued to soar all the way up to 9.5%. The stock market is up from its lows but way off its highs and has a case of the jitters the past couple of weeks. There are whispers about a second stimulus and the Vice President out there saying the administration "misjudged" the economic crisis. Thanks for the brilliant spin, as usual, Joe. I need to amend my column on Obama's cabinet duds to include the Vice Presidency, because he is clearly Dud #1 amongst Obama's staff picks, way ahead of mini-Dud Tim Geithner.

Stimulus Update
The reality is that it is crazy to talk about a second stimulus at this point -- we've barely scratched the surface on the first one. Here's the latest spend updates.

So...we've authorized 35% of the bill's spending ($174.9 billion as of last week) and spent only 12% ($60.4 billion as of last week.) $60.4 billion in spending. The process has been slow, but not unexpectedly so. Leveraging public money to fund private job creation is a compliacted and long process if you want to do it right. This plan needs time to work. It does cause one to question whether the quicker tonic would have been to go the route FDR went -- simply hire people on the government payroll. While it is arguable whether FDR's massive public works programs ultimately helped pull the economy out of the depression, they absolutely did blunt the impact of unemployment. In fact, unemployment dropped every month of FDR's first year in office and never returned to its peak. Would that President Obama could say so now.

Bottom line is -- the President will be judged in both the 2010 mid-terms and his 2012 re-election campaign on two central themes: did he fix the economy? and did he keep his promises?

Economic conditions right now aren't his concern although they may cost him some political capital. We've already highlighted that Presidential approval at this stage is not particularly instructive to re-electability. But if unemployment is still approaching double digits in 2010, prepare for a donkey bloodbath. And if it's still that way in 2012, get comfortable with the idea of a President Palin or Romney.

Hope for Compromise on Health Care Reform?
It's getting dicey as we all knew it would. There is general alignment in the Democratic caucus and among Republican moderates that broadening access to health care is a worthy legislative goal. It's pricey (although not as pricey as it sounds, as covered in a previous post) and no one can agree how to pay for it.

The Democratic leadership would be wise to listen to Sen. Olympia Snowe (R-ME) and take taxing employer-provided healthcare benefits off the table. It would be massively unpopular and make a liar out of President Obama, who has repeatedly claimed that "if you like your health care, you will be able to keep it". Taxing employer benefits would surely lead to large reductions in employer-provided benefits. The purist in me says that might be a good thing as the tax-incentive induced employer-provided system is part of the problem. But the pragmatist in me knows the country isn't ready to completely flip the current model on its head. Let's keep working on Medicare cost cuts, world-class perscription drug prices and look at sin taxes and exemption phase-outs to fill the gaps. But let's get the middle class comfortable with the notion that they will have to bear some of the burden. We simply can't fund this with just taxes on those making over $250K -- there isn't enough money there to get.

Appropriations Rolls On
The house is on a break-neck pace moving through appropriations bills and even the Senate is moving along. At this pace, Congress might actually get all the bills passed before the new fiscal year starts in October, a feat rarely accomplished in the past 12 years. I guess it helps to have one party in power in both the legislative and executive branches.

The House has already passed appropriations for: the Legislative Branch, the Commerce and Justice Departments, the Homeland Security Department, the Defense Department, the Interior Department and is actively debating the bill for the Department of Agriculture and FDA.

The Senate, which has to go second on all the bills and always moves more slowly has passed appropriations for the Legislative Branch and is debating the Homeland Security Department.

The Democrats are, of course, mostly carrying the day in the debates (when you have all the votes, you win most of the votes), but the GOP is winning some small victories, such as an ammendment introduced by Sen. Demint to appropriate money for building a larger border fence with Mexico, which pulled in enough Democratic moderates to pass.

Lots of roll call votes to keep up with -- I'll keep you posted.

Thanks for reading. If you like this site, share it with your friends.

No comments: