Friday, August 28, 2009

The Late Senator Edward Kennedy, Can Obama Rediscover His Mojo?, Can You Be Pro-Stimulus and Anti-Deficit

Senator Edward Kennedy (R-MA)
The passing of Senator Edward Kennedy is an historic end to an era of prominence for the Kennedy family in New England and across the country. The "lion of the Senate" served for 47 years, longer than all but two men, the late Sen. Strom Thurmond (R-SC) and the current President Pro Tempe of the Senate, Sen. Robert Byrd (D-WV). His passing reminds me of my own internal conflict about the man called Teddy by his friends and the broader divide in America that it reveals.

Senator Kennedy was a deeply flawed man. A famous drunk, who was four times convicted of DUI in his youth, Teddy was twice kicked out of Harvard for cheating. Once considered the black sheep of the Kennedy family, Teddy rose to prominence after the death of his progressive-hero brothers, President John F. Kennedy and sure-to-be President Bobby Kennedy, both dead far too early at the hands of killers' bullets.

The event that more than any other defined Senator Kennedy as a villainous figure in the minds of many on the right and some on the center occurred July 18th, 1969, when Senator Kennedy drove off a bridge killing Mary Kopenche and then failed to report the death until nearly nine hours later, the next morning. There is much unknown about the famous Chappaquiddick incident (named for the island on which it occurred.) Was Mary in the car as part of an extramarital affair? Had Kennedy been drinking that night? Where was he really headed that evening (he claimed to be headed to a ferry but there are inconsistencies in both the location and the timeline)? Given Kennedy's history, it is not unreasonable to assume the worst about all of those questions. Some have even suggested that the killing was an intentional murder, although the evidence of this is scant. At the end of the day, however, they don't really matter. Senator Kennedy killed a woman and failed to make the feintest effort to get emergency services on the scene, who could have at least had a chance to save her life. It was the most morally repungnant behavior from every possible angle that one could imagine.

Despite Chappaquiddick, Senator Kennedy easily won re-election in Kennedy-friendly New England and went on to possibly the most accomplished Senate career in U.S. history. His friends span the ideological spectrum -- his close friends included former President George Herbert-Walker Bush and the very conservative Sen. Orrin Hatch (R-UT). He fought relentlessly for social justice, health care and the underrepresented. He reached across the aisle to get things done rather than grandstand, including being a key player in President George Walker Bush's crowning piece of social policy, No Child Left Behind.

So what are we to make of this dichotomy? For me, I can appreciate the accomplishment, but can't forgive the crime. I've never been a fan of royal families in our Republic, and there is little doubt that Senator Kennedy would have done jail time and never been heard from again if he had another name. The hubris and entitlement of the Kennedy clan has always annoyed me, the latest example being Caroline Kennedy's aborted attempt to be handed Hillary Clinton's Senate seat with zero qualifications.

Senator Kennedy may have been an advocate in the Senate for those who needed one and a great legislator, but he was still a meager man. Some will say that I would be best not to criticize the deceased, but I have to call them like I see them. The guest list at Kennedy's funeral proves that I am probably in the minority -- those who knew him seemed to all love him, left and right.

Looking for Some Mojo -- Will Obama Slip Below November?
Same old story from the past two months. President Obama's approval has slipped to a new low since taking office, with the daily tracking at +9.7%.

President Obama can still take solice in a few facts:
(1) His poll numbers have never, for a single day, been below his margin of victory in November (although he is flirting with the lines, only 2.5% ahead of his November margin)
(2) Congress will be back in session in a couple of weeks and the town halls will stop
(3) President Clinton had even lower numbers at this stage in his Presidency and went on to win re-election by a wide margin (9%)
(4) Opinion is fickle -- President's routinely gain and lose double digits in a matter of months

If you are on the other side, you can rejoice in these fact:
(1) No post-World War II except Clinton was less popular at this stage in his term
(2) While this may not be predictive of 2012, the history with Clinton would indicate a good shot at a resounding GOP comeback in congress in 2010
(3) President Obama's daily numbers are still below his monthly numbers, meaning that at least in the short-term, he is likely to continue to see decline

The monthy numbers are below:

If current trends were to hold, sometime in September, President Obama would drop below his November margin and sometime around this November he would drop below the all-critical zero line. Not too strong a negotiating position to try to push a health care bill through Blue Dog Democrats. Of course, as I've said, if unemployment starts falling, don't be surprise if these numbers reverse fast, regardless of the environment in Washington.

Pro-Stimulus and Anti-Deficit?
I've been loaded down with e-mail from conservatives and liberals alike questioning how I could have been in favor of an almost $800 billion stimulus bill and at the same time be bemoaning the size of the deficits over the next 10 years.

Allow me to explain -- a fiscal stimulus is designed to jump start a damaged economy. By spending large sums of money quickly, the government can light a fire under economic growth and reduce unemployment. This, in turn, yields greater long-term tax revenues that repay the initial investment. Now, you could certainly quibble with some of the details of the stimulus bill that passed -- I would have liked to see more infrastructure (roads, bridges, electrical grid, etc.) and less lower-order stimulus (state aid, etc.), but the concept of a stimulus is one that I'm firmly behind.

Of course a big stimulus increases this year's and next year's deficit. That is not my concern -- you should run deficits in a recession to try to jump start the economy. My concern is the STRUCTURAL deficit that continues over the next 8 years. Still being $900 billion in the whole every year 10 years from now is not acceptable. President Obama needs to come clean with the need for either dramatic entitlement reform, dramatic tax increases or some combination of both. He shouldn't attempt to do it now -- fixing the economy is job one, but we need to be doing it in 2011 and to do so, we should at least be talking about the need for future reform now.

Speaking of stimulus, the latest figures are as follows:
Of the $499 in spending:
$208.0 billion has been authorized (41.7%)
$84.6 billion has been spent (17.0%)

To date, since the bill was enacted, we have averaged about $3.15 billion in stimulus spending per week. At this pace, it would take over 3 years to complete spending on the bill. It is clear to me that this is not fast enough. The pace has picked up somewhat recently (the last 5 weeks have averaged $3.44 billion), but it needs to move much faster. The economy is continuing to get healthier, but unless the pace picks up, we may have protracted high unemployment even with the economy likely growing again in Q3 (albeit at a shaky 1 or 2%.)

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Tuesday, August 25, 2009


A Friggin' Huge Number
Nine trillion dollars. That's how much the government will spend that it doesn't have over the next ten years. $30,000 for every man, woman and child in the United States. This, which we had all suspected but was confirmed by the White House Office of Management and Budget today. I couldn't have fathomed in the heady days of the late 1990s when we were running surpluses and talking about having the federal debt paid off by about now, but here we are. It is sobering and very concerning. Debt levels this high suck financial capital out of our economy and create a very real risk of rising inflation and ballooning interest rates as we print money to continue to service our debt. A financial collapse could loom if our creditors in China and Saudi Arabia decide to stop gobbling up our debt. It is an untenable, unsustainable situation. Our debt, already 70% of our GDP, could balloon to over 100% of our GDP.

How Did We Get Here?
How did this incredible crash from better than balanced budgets to eye-popping deficits happen? There were several contributing factors....

(1) The Bush Tax Cuts
Quote me Laffer curves all you want. Laffer may have been right that beyond a point, tax increases no longer increase government revenues -- surely if a government is taxing 90% of income and it hikes it to 100%, it won't see an increase -- but we were not at that point. The proof is in the revenue explosion that occurred in the 1990s after the Clinton tax hikes that led to a balanced budget. The Bush tax cuts cost us $150 billion per year.

(2) The Iraq and Afghanistan Wars
The wars have been phenomenally expensive as we have had the costs not only of deployed troops but of hundred of thousands of private contractors from Blackwater, Halliburton and others. Annual cost: close to $200 billion

(3) Medicare Perscription Drugs
An amazingly quiet bill in retrospect, President George W. Bush signed into law early in his Presidency a perscription drug benefit as part of Medicare. Liberals panned it as a give-away to big pharma. Conservatives shunned it as an exploding entitlement. Yet the broad bi-partisan middle passed it. Whoever was right it costs about $150 billion / year.

(4) Entitlement Explosion
Health care spending is rising at double the rate of inflation....and the number of people on the Medicare roles is rising even more rapidly as the retirement-age population grows and life expectancy extends.

Social Security is rising in cost too, due to life expectancy and population demographics but at a less alarming rate.

So where are we?

Today 2019
Entitlements 2.0 trillion 3.0 trillion
Defense 0.7 trillion 0.9 trillion
Interest 0.3 trillion 0.8 trillion
TARP* 0.3 trillion none
Domestic Discretionary 0.6 trillion 0.7 trillion
Total Spending 3.8 trillion 5.4 trillion
Revenues 2.2 trillion 4.3 trillion
Deficit 1.6 trillion 1.1 trillion

* TARP expenditures were close to $0.7 trillion but are estimated at $0.3 trillion because the government received tangible assets in return for the money -- losses under the program are estimated at $0.3 trillion

What Do We Do?
As you can see from the spending above, any discussion of domestic discretionary spending is largely irrelevant. Yes, there is waste in earmarks, as Sen. John McCain (R-AZ) and others have often pointed out. But the spending, in total budget terms is a pittance at 16% of the current budget and 13% of the 2019 budget. We can get more efficient, but we aren't going to wholesale eliminate government least not yet.

Interest is an output of our debt level and current interest rates. The only way to control it is to reduce other spending and thereby reduce debt.

This leaves us with the three whoppers: taxes, entitlements and defense spending. Taxes will HAVE ot go up. Entitlements will HAVE to be reformed -- higher retirement ages, lower benefits, etc. Defense will have to be reduced.

So what to do specifically?
(1) Defense
* Find a way out of Iraq (yes, we still have lots of troops there) and Afghanistan
* Cancel all the Military-Industrial giveways like next-generation fighter plans and nuclear subs
* Increase the number of reservists and decrease the number of active-duty troops
No other country on earth spends on defense like we do. Can we really afford to keep being the global police force?

(2) Taxes
* Let the Bush tax cuts expire...all of them
* Enact real cap and trade where ALL carbon is auctioned and there are no give-aways to big coal
* Hike gas taxes by $1/gallon
* Raise capital gains tax to coincide with income taxes
* Phase-out 401K deductibility for high-income individuals

(3) Entitlements
* Move to a cash-balance program for Social Security that automatically adjusts as life-expectancy changes or move the retirement age to 70 and index to life expectancy
* Require Canada-equivalen tpricing for Medicare perscription drug benefits, ban pharma ads while we are at it
* Move Medicare eligibility to 70
* Comprehensively fix health care inflation and confront rationing questions head on

None of these are pleasant solutions and many are probably politically infeasible today. There are many other good ideas that could be used as substitutes. But the notion that we can fix this without making tough and painful choices is just wrong. The longer we wait to act, the worse it will get. And if we pass the brink and T-bill rates spike and we are forced to print money to service the debt, the recession of 2008/2009 will seem like the good old days.

Mr. President, I know Health Care Reform is a part of the solution, but let's be honest, you haven't provided us with a real, candid assessment of what you intend to do about the deficit. Ignoring it won't make it go away. And it will mar your presidency if you don't take it head on.

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Friday, August 21, 2009

Hypocrites Abound, Rewind to November, The Coming Economic Boom That Will Change Everything

All for People's Rights...As Long As They Are Our People
When liberal activists began protesting the Iraq war, conservatives condemned the protests as un-American and sought to demonize the protesters. The Bush-backers stated that protesting the President in a time of war was wrong. They condemned comparisons of Bush to Nazi leader Adolf Hitler.

Liberals mouth-pieces, on the other hand, glorified the protests as the most true form of patriotism, a passionate expression of free speech and the very basis of Democracy. They even half-way supported the Hitler analogy -- not explicitly, mind you, but made it clear that they understood with Bush's politics how people could feel that way.

My, how times have changed.

Conservative protesters shouting down their Representatives and Senators are hailed from the right as champions of democracy and true Americans and condemned by the left as un-American and conspiratorial. This time, it is the right that is half-way supporting the Hitler analogy and the left that is calling it across the line.

Do these people just have really short memories or do they think we do?

Protests are a proud demonstration of American democracy. No one should try to stifle the airing of anyone's opinion, right or left. The right to protest should be protected, bar none.

That doesn't make protesters right. I support the right of the Klan to have a march, but I think their views are heinous. The right to speak doesn't imply the right to have me listen.

The debate would be so much more reasoned if we could agree to the principle that everybody should be allowed to protest...that it is both their right and their duty when they feel their country has gone awry. Let's instead discuss the MERITS of their protests. And in both cases, the comparison to Hitler was ridiculous and overblown.

On the merits, comparison of either George W. Bush or Barack H. Obama to Adolf Hitler is not particularly useful, because to any half-way informed person, clearly neither man is Hitler. If you believe that either one's grand ambition is to kill Jews, Catholics and gypsies to bring the Aryan Nation to its full potential and to take over Europe, please stop reading this blog right now and go back to first grade.

In the case of the right-wing protesters, please at least get your extreme analogies right. Hitler was about as far from a socialist as you can get. If you want to pick an extreme figure to compare Obama too, at least be intellectually consistent enough to pick a communist instead of a facist.

So, let's let the right's one of the few tools that the party out of power has to make their voices heard. And then let's resolve to do what we believe is the right policy.

On a realated note, I was entertained to see Rep. Barney Frank (D-MA) take on protesters at his town hall. Far from the timid response that many deer-in-the-headlights Democrats have shown, Rep. Frank fought back. Some say he was talking down to his constituents. I think when somebody asks you why you support Nazi policies, you are well within the principles of decorum to ask them what planet they spend most of their time on.

It's Just Like Election Day...
The protests we are seeing are symptomatic of the great partisan divide in this country. The red states and blue states (or more accurately, red regions and blue regions) that we have been talking about this whole decade. On election day, Barack Obama won a "huge" victory by modern 7.2% of the vote. That means almost 47% of voters did not vote for him. And those percentages were a hell of a lot larger in places like South Carolina, Utah, Oklahoma and Kentucky.

For a brief period after his election, as is often typical with new Presidents, the country unified. Hopeful of the President's promise of post-partisanship, his decrying of the red state-blue state phenomenon, they looked for a new era of cooperation and solution.

Then reality set in. Democrats are Democrats because they support Democratic policies. Republicans are Republians because they support Republican policies. If we have had complete bi-partisanship, we wouldn't need two parties. The two we do have clearly disgaree on a number of major issues facing our country.

So after a little post-election euphoria, the poll numbers for President Barack Obama look awful close to how they did on election day...still favorable, but hardly a unification of the whole country:

In his monthly averages, we see a continuation of the same slide.

The real question is: will the President hold steady at near the totals he had on election night or will he continue to decline into unpopularity?

The fate of health care reform and the economy will likely determine that. And on at least one of those fronts, things are looking up.

The Coming Boom
It is completely unmistakable now...the global recession has ended. Germany, France and Japan all are growing economies again. We won't know how the U.S. economy fares in the third quarter, but I would be willing to be a substantial sum of money that it is already growing again as well. Productivity, the engine of long-term economic growth, has been shooting up over the last two years.

Yes, we face problems. Unemployment is still WAY too high, the budget deficit is WAY too large (more on that in my next blog) and consumers are still wary of spending money. But rest assured, things are going to look much better a year from now than they do today. Don't be too surprised when the economy turns if the protests get a little quieter too.

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Next Up: A look at the deficit and debt, my thoughts on Tom Ridge's allegations and our regular update on the stimulus bill.

Tuesday, August 18, 2009

Health Care -- Have the Dems Lost All Control?, 2010 Continuing to Look Up for GOP

If you have only been reading my blog for the past month, you might draw the conclusion that I am aligned with conservatives. I've advocated giving up the public option on health care, I've noted crashing poll numbers for President Obama and I've noted the improving prospects for the GOP in 2010. Those of you who have read this blog longer know otherwise. I am an Independent, but have voted more with the Democrats than the GOP at least over the past 10 years. I voted for President Obama, John Kerry and Al Gore (but not Bill Clinton.) The last Republican that I supported for federal office was Arlen Specter in 2004, who is now a Democrat. But, I'm not a party hack and I call them like I see them. And the Democrats are having a really bad summer.

Health Care -- Is It Already Dead?
President Obama and Secretary of Health and Human Services Kathleen Sebelius say that they didn't shift their position on the public option over the weekend, but clearly they did. They shifted the discussion from a public option being a central tenant of health care reform to a position of willingness to compromise. It was a shift that they needed to make -- a full federal option appears to be DOA in the Senate and public co-operatives would largely achieve the same policy goal while being significantly more acceptable to moderates in both parties.

Predictably, the left-wing factions of the Democratic Party has nearly had a stroke over the past 48 hours. House progressives are threatening to vote against any bill not containing a public option.

Health care is certainly not dead yet and Democrats hold sizable majorities in both houses of congress, but I can't figure out what bill could pass.

All of which points to what I think is now a fair and relevant question -- can the Democratic party govern? In 1977, Democrats took control of both houses of congress and the Presidency. They failed to achieve a single lasting policy accomplishment and were run out of town as Republicans swept into control of the Presidency and the Senate in the 1980 elections. They didn't get another shot until 1993, when Bill Clinton took office with majorities in both houses. After a botched attempt at health care reform that failed, Democrats were crushed in the 1994 elections, with Republicans seizing control of both houses of congress. It wasn't until this year, when President Obama took office, that they got another shot at full control of government.

And so far....Presidential popularity bordering on free fall, health care and limbo and infighting galore. You have to go back to Lyndon Johnson and the Great Society to find a case where the Democrats were in control of both the legislative and executive branches and got major things done.

So can they govern? We'll see. We have a proud history of splitting tickets in this country. Republicans haven't had much more success in governing -- in the past 60 years, they've held control for only 4 years (from 2003 to 2007, although they were just 1 Senate seat shy from 2001 to 2003) and it basically ran them out into the wilderness that they found themselves in this year.

So it may be that we are just conservative as a nation, in the traditional sense of the word. We don't like big changes all at once, which is what one party in power tends to produce. We backlash towards the middle as we are doing now. President Clinton learned this lesson in 1994 and adapted, embracing welfare reform and balanced budgets. He won a resounding re-election in 1996 (by a larger popular vote margin than President Obama held this past November.) President Obama may likewise adapt. Or he may find a way not to have to, as FDR did (Lyndon Johnson was so unpopular by the end of his term that he did not seek a second full term.)

Regardless, the short-term news looks bad for Democrats and good for the GOP. Let's look at how the congressional races are evolving.

2010 Projections
Here are our changes from just a couple of weeks ago:
Illinois -- moves from lean Democratic hold to Toss-Up -- even with Burris out the likely match-ups are polling dead even

Delaware -- moves all the way from Likely Democratic Hold to Lean GOP Pick-up as Rep. Mike Castle surprisingly leads Beau Biden in 2 new polls

Pennsylvania -- Sen. Arlen Specter (D) falls further -- polls are all over the map but are trending GOP, for now we'll move this from Lean Democratic Hold to Toss-up

New York (Gillebrand) -- moves from Safe Democratic Hold to Likely Democratic Hold -- this one really all depends on if Pataki runs. If he does, we have a race. If he doesn't, Gillebrand is a lock to win the rest of her term.

Missouri -- moves from toss-up to Lean Democratic Pick-up -- Democrats lead by 1 to 9% in two recent polls.

So, we now have:
Safe Democratic Holds (7)
Hawaii, Maryland, New York (Schumer), Oregon, Vermont, Washington, Wisconsin

Likely Democratic Holds (4)
New York (Gillebrand), Indiana, Nevada, North Dakota

Lean Democratic Holds (2)
California, Arkansas

Lean Democratic Pick-ups (3)
New Hampshire, Ohio, Missouri

Toss-ups -- Democratic Controlled (2)
Illinois, Pennsylvania

Toss-ups -- Republican Controlled (0)

Lean GOP Pick-ups (3)
Colorado, Delaware, Connecticut

Lean GOP Holds (3)
Kentucky, North Carolina, Georgia

Likely GOP Holds (6)
Florida, Alaska, Arizona, Iowa, Kansas, South Dakota

Safe GOP Holds (6)
Alabama, Idaho, Louisiana, Oklahoma, South Carolina, Utah

Which leaves us with:
Projected GOP Pick-up of 0 to 2 Seats -- Central Projection is +1 Seat
Best Case for the GOP (all leans) -- +7 seats
Best Case for the Dems (all leans) -- +6 seats

On the house side, generic ballot is all over the map right now, ranging from +6 for the Dems to +5 for the GOP (from our friends at Rasmussen, who have consistently had outlier polls that are more favorable to the GOP this year -- I just don't know if they are right or if everyone else is.) Throwing out the high and low polls gives us a range of +1% GOP to +3% Dems or a projection range of:
Projected GOP Pick-up of 17 to 35 Seats -- Central Projection is +22 Seats

Even in a very dark summer for the Dems, the GOP still has a structural problem in the Senate. From my first projection to now, I can't see any path to the GOP taking the Senate in 2010. They would need to not only win all of the presently close states (which includes winning California, Connecticut, Illinois and Delaware), they would also need 3 out of 4 in Likely Democratic states, which include popular Sen. Evan Bayh (IN), Senate Majority Leader Harry Read (NV), popular Sen. Byron Dorgan (ND) and Gillebrand's seat in New York. Seems highly, highly unlikely.

In the House, on the other hand, they could potentially get to the 41 seats that they need if Dems keep driving off a cliff. Of course, they face a structural challenge with the way districts are drawn there too. They lost the popular vote in the House by 10% in 2008. If you subtracted 10% from the margin of every Democrat who ran in 2008, the GOP would gain only 22 seats and they need 41 to reclaim a majority. In fact, using that math, they would need to win the popular vote nationally by about 5% to retake the House. Of course, that's exactly where the Rasmussen poll has them, right now.

Thanks for reading. I know August is a slow time for politics and I appreciate you tuning in to hear my thoughts. Please visit often and tell your friends. Also, note the Google search bar at the bottom of the page, which accesses the Google site. You can bookmark this site as your home site and use that bar for all your web-searching needs.

Sunday, August 16, 2009

Assessing the Recession

This is most likely the third worst economic period in modern United States History (accurate information isn't available for the 1700s and 1800s.) If, in fact, as I have been predicting and the data seems to be showing, we are either at the end or near the end of the recession, now is a good time to look at the historical place it holds.

Let's look at the 3 major metrics worthy of consideration: economic growth, unemployment and stock market performance.

These 3 metrics measure very different things.

Economic growth (or more accurately GDP contraction) is probably the purest metric - simply put, it measures the changes in the value of the output of our economy. A healthy economy would grow by at least 3-4% per year, enough to cover the growth in population and provide a modest increase in the average standard of living.

Unemployment is a key measure of the real pain that people feel in an economic downturn. It is important to track in addition to GDP contraction because some recessions that were not incredibly severe overall that led to a great deal of pain to the average person (case in point would be the 1981-1982 "double-dipper".)

The stock market, as measured by the S&P 500 index, is basically a measure of the health of corporations and the level of panic in the investor community. It will tend to exaggerate recent recessions as the stock market has become more volatile.

Let's look at the metrics for the 2008/2009 recession:
GDP Contraction Peak to Trough:
3.9% (through Q2 of 2009)
Rank: 3rd (behind the Great Depression and the post-WWII bust)
Worst Case: 26.6% contraction -- the Great Depression
% of Worst: 14.7%

Peak Unemployement:
9.5% (June 2009)
Rank: 3rd (behind the Great Depression and the 1981-1982 Recession)
Worst Case: Approximately 25% -- the Great Depression
5 of Worst: 38%

Stock Market Decline (S&P 500 Peak to Trough):
57% (March 2009)
Rank: 1st
Worst ever -- worse than the famous stock market crash in 1929.

What you see is a picture of an economy that was very bad, but nowhere close to as bad as the Great Depression (which had almost triple the unemployment and seven times as much economic contraction.) The overreaction of Wall Street is obvious from these statistics -- ownership of companies in the US did not become 57% less valuable in 2008.

What you see now are more reasonable valuations for US companies as the world has realized that the bottom did not, in fact fall out.

So, what do we need to look for going forward?

Two things:
(1) A return to positive GDP growth in Q3 -- my ratings all pre-suppose that the economy is done contracting. There is ample evidence to support this point of view, including a 1.0% annualized contraction rate in Q2, far less than the 5-6% contractions we had seen the prior two quarters. But it is not a sure thing. If the economy continues to contract in Q3, we could be in for a lot more pain.

(2) Unemployment. Jobs, jobs, jobs. That will be how the public perceives any recovery. We are at a historically high level of unemployment still. See the histogram below and you can understand that we are very much at recession-rates of unemployment.

Mean unemployment: 5.6%
Median unemployment: 5.5%
25th Percentile ("Economic Boom"): 4.5%
75th Percentile ("Economic Bust"): 6.6%

As you can see, our current rate of 9.4% is still way outside of the norm. It is almost half again as much as a "normal" rate of 5.5% to 5.6%. It is greater than in 97.5% of the months that have occurred since the start of 1948. Getting unemployment down under that 6.6% threshold is critical...but may not come any time soon. Employment recovery tends to lag GDP recovery as companies are slow to hire back after tough economic times. President Obama would be lucky if it is back down that low by election day 2012, congressional Democrats likely won't be so lucky in 2010.

All-in-all, there is light at the end of the economic tunnel. But that probably doesn't make you feel any better if you are unemployed.

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Friday, August 14, 2009

Health Care Scuffles Continue -- Is This Summer the Time the Wheels Come Off the Democratic Wagon?

Health Care Protests Continued
It's sort of a perfect storm. Congress is in recess, so there is very little of the ordinary political news -- no bills passed, no new laws signed, etc. Conservative anger has been growing over the passing months as President Obama first signed into law a large stimulus, then has continually proposed greater government involvement in both big ways (health care and the environment) and small ways (regulating the tobacco industry, promoting fair pay practices, etc.) The town halls of congressional Democrats were a natural ground to release that anger. Couple that with careful organization by conservative groups and you have 24/7 news cycle after 24/7 news cycle devoted to the "town hall protests".

President Obama was already reeling from an awful July before the August congressional recess and has suffered from slumping poll numbers (more on that later), and now this. It isn't that the protestors themselves represent a large cross-section of society -- to my eyes they are all largely conservatives who weren't inclined to support Obama in the first place. No, the President's problem is that independents watch the news too, and after seeing days of angry protests, many, especially those more passively involved in the political process, will surely assume that where there is smoke, there is fire.

So what should the President do? As I recently noted, he is going to have to give some ground -- probably give up the formal "public option" in favor of either creating co-ops for the uninsured or allowing the uninsured to buy into the privately-run government health insurance program. This should bring some moderate voices along to speak to the merits of such a proposal.

The President also needs to re-establish control of the dialogue. The sanitized, heavily screened town halls may be a start to that, although I think the public is inherently suspicious when they see Representatives and Senators getting grilled and Democratic-friendly crowds coo-ing to the President. This tactic was ineffective when President Bush attempted to use it around Social Security and likely won't help President Obama too much either.

What the President really needs is national forums. Go on Meet the Press. Hold primetime press conferences. Show up on the Daily Show. Talk where people are listening and where you have some control of the tenor of the discussion.

Finally, grit it out. Congress will be back in session after Labor Day and these town halls will stop. The story will fade. Get ready to get back to the negotiating table. Invite Republicans to the White House to form a compromise.

Most of all, understand that you probably won't get everything that you want.

About Those Slumping Poll Numbers....
The decline in the President's popularity has continued into August. It isn't that he is unpopular, every point on the line since he was sworn in through today show him more popular than he was on election day. It's that his trend continues to be in the wrong direction:

By poll type we see:
Adult Americans: +17%
Registered Voters: +14%
Likely Voters: +5%

The President's monthly averages (which smooth out the noise), show three distinct periods in his term so far:
January through March -- the wear-off of the post-election euphoria that the nation was feeling. Obama's numbers feel from somewhere in the heavens (+48%) to at least our known atmosphere (+33%)
March through June -- relative stability as the President slips slightly from +33% to +27%
June through now -- a rapid, concerning decline from still-very-popular (+27%) to reasonably popular (+15%)

So what does the future hold? Probably nothing good in the near-term. The President's numbers have fallen in 8 out of 14 days so far in August, with his latest numbers (+13.6%) lagging his month average. Whether this decline continues or is abated largely depends on the fate of health care legislation and public perception of the economic recovery.

Stimulating That Economy
Clearly getting unemployment down is something that would help the President greatly. There is still a lot of muscle yet to be used in the stimulus bill.

Of the spending provisions:
Authorized: $200.0 billion (40.1%)
Spent: $77.1 billion (15.5%)

With 84.5% off the spending left to do, the stimulus still has the chance to do a lot of good towards improving the employment situation -- but they have to get going. Of the spending to-date, the tilt is definitely still more towards stabilizing activities (transfer payments to states) than to employment-building activities (such as construction and energy efficiency spending). My benchmark -- the Department of Transportation infrastructure spending has just crossed the $1.5 billion threshold, out of about $51.2 billion authorized in the bill or about 3%. These construction projects are really just getting going, so hopefully there will be an impact in the coming months.

On the tax side (keep in mind $288 billion in the bill was for tax cuts), all have been in effect since May. Many extend through 2009 and 2010 including:
The $400 "Making Work Pay" Tax Credit
Expansion of the Child Tax Credit
Expanded College Credit
Increased Earned Income Tax Credit
Home Energy Efficiency Credit
Deduction of Sales Tax for Car Purchases
Various Business Tax Credits

Some Other Provisions are for 2009 Only:
Alternative Minimum Tax Adjustment
First-Time Home Buyer Credit
Unemployment Benefit Tax Exemption

In total, about $86 billion of the tax cuts are for 2009 only, whereas the remaining $202 billion stretch over at least 2 years. Since the cuts have been in effect by May, this means that about 25% of the impact of the tax cuts have ocurred already, a pace ahead of the spending.

More to come as I continue to assess the state of the economy and unemployment.

Is the President starting to age in front of our eyes already? It looks that way to me.

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Sunday, August 9, 2009

Does the GOP Renaissance Begin in 2009? Cash for Clunkers: A Program That Works, Time to Compromise on Health Care

The Road to GOP Recovery Runs Through the I-95 Corridor
As many political observers (including myself) have noted, if the GOP is going to make a lasting comeback from its current status as a severe minority, that comeback will need to start at the state level. I've never been as fatalistic on the state of the GOP as some have. Some believe that the GOP has become a permanent minority, a regional party with no pull outside of the South. This is a very short-term view of the world. This is the party that was talking about a permanent MAJORITY less than a decade ago. Political ebbs and flows are natural. But being a party with no representation in New England, marginalized in the Northeast and losing steam in the moderate south (read Virginia, North Carolina and Florida) is not a good place to be. And the state level is where the GOP can rebuild its candidate field.

The Democratic takeover of congress was partly a backlash against the Bush administration. But it was also because Democrats had some fantastically good candidates -- Jim Webb in Virginia, Kay Hagan in North Carolina and so forth. Locally developed candidates with compelling stories who understood local politics. Likewise, the GOP needs to shed the weight of Dick Cheney and Newt Gingrich and grow some new leaders that will inspire independents. And this work can begin in 2009.

There are only two elections of significance in 2009 -- the Virginia and New Jersey Governor's races. In Virginia, the GOP has a chance to retake a swing state that has been turning from red to purple to blue in the past few years. The Democrats control every office worth having at this point and President Obama won the state reasonably handily in 2008. A GOP win would quell the Democratic momentum in Virginia and provide a launching pad for future national candidates. New Jersey, on the other hand, would be a real prize. My (current) home state is a true blue state and no GOPer has won major statewide office (Senator or Governor) since moderate Republican Christie Todd Whitman was Governor in the 1990s.

And the news is good for the GOP so far in both cases:
In Virginia -- McDonnell leads Deeds by 8 to 15%, depending on which poll you prefer.
In New Jersey -- Christie leads incumbent Corzine by 8 to 14%, again depending on the poll.

While it is still relatively early and few people are strongly engaged in the election yet, these are massive margins. They are bigger than any margin that Barack Obama held throughout the 2008 cycle over John McCain. The New Jersey one is especially significant given the huge margin Democrats have in party registration in that state (Virginia does not register by party, but is obviously much more of a swing state.)

The betting public is betting against the Dems too. Corzine has dropped to a 2:1 dog in Intrade betting. The Virginia betting is actually marginally closer, with McDonnell just better than a 3:2 favorite. The early polls would indicate that theses betting odds may even be a little generous to the Dems.

I remain undecided in the 2009 New Jersey race. I, like many in New Jersey am extremely frustrated with the lack of leadership in cutting through the wasteful and bloated bueracracy in New Jersey, the continued corruption in contracting and the tax burden, currently the highest combined in the nation. A state with such a strong tax base should not have these problems and Gov. Corzine has done a poor job addressing them. Chris Christie, on the other hand, presents downright caveman-era views on social issues, opposing the legal status of basically all abortions and opposing gay rights. I'm also not yet inspired that he is the guy who can actually get the fixes above done -- although Corzine has been given a chance and clearly isn't that guy. I'll be watching the campaign, but I'm definitely deeply conflicted on this race.

Cash for Clunkers Renewed -- Best Piece of Stimulus Yet
Ford is reporting profits again, unemployment has dropped slightly as automakers are rehired and dealers are reporting shortages of small, gas-efficient cars as buyers storm dealerships to trade in old vehicles for newer, more efficient vehicles, thanks to a $4,500 federal tax credit. The economy is stimulated, the environment is helped and people get new cars. What's not to love?

Apparently, a lot, to the GOP. The program will be extended with another $2 billion in funding (initial funding had been wiped out by massive demand), but without much GOP help. The Senate passed the extension by a 60-37 vote with only 6 GOP votes for and 3 Dems opposing. The House vote was more bipartisan with a 316-109 (with 2 voting "Present") vote, including 77 Republicans. Overall, the bill gets a partisanship index of .65 (fairly bipartisan).

The GOP compaints centered around the price tag and meddling in the free markets. But weren't these the same Republicans that complained (with some legitimacy) that elements of the stimulus bill were not stimulative enough? Does the GOP want real stimulus or just no stimulus at all? Cash for clunkers is working and working well. I'm glad the program will get to continue.

Health Care: Why the Democrats Must Give Ground
Health care has been at an standstill. Both houses of congress missed the President's deadline to pass a bill before the August recess. Blue Dog Democrats are still worried. Senate GOP members threaten a fillibuster. The Democrats face a crucial choice -- stick to your guns on funding a so-called "public option" or compromise to get a bill passed. If the Democrats stick to their guns, even if they get the votes in the House, they will undoubtedly have to use budget reconciliation to dodge a GOP fillibuster in the Senate.

Democrats have to ask themselves -- holding strong majorities in both houses of congress, do they really want to use parlimentary procedure to ramrod through a bill with zero GOP support and conservative Democrats in opposition? I think they would be wrong to do so. Ducking the checks on power in the Senate is a dangerous game and the tone in Washington is turning very ugly, strongly in opposition to the President's promise of post-partisanship in Washington.

To get a bipartisan bill, Democrats need to give up the public option. Take the GOP idea to let people buy into the federal government health insurance program instead. The critical aims of the program are still the same. They will blunt GOP criticism and might pick up a few votes along the way.

Site Update
This site finished July with 216 visitors, marking 6 consecutive months that the site has had 200 or more visitors since I started tracking this in late January. After a spike in June due to an ad that I placed on, traffic basically returned to its previous level. I'm actually very satisified with this, given that there were relatively few posts in July because of my travel. As of this writing, August has had 45 visitors so far in the first 8 days of the month.
February -- 235 Visitors
March -- 257 Visitors
April -- 221 Visitors
May -- 210 Visitors
June -- 366 Visitors
July -- 216 Visitors

Next up -- a look at the state of the appropriation bills in congress.

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Friday, August 7, 2009

Sotomayor In, Martinez Out, Health Care Turns Ugly, First 200 Days?, Economic Upturn?

Sotomayor Confirmed
In a vote that held absolutely no drama, the Senate this week voted to confirm Sonia Sotomayor to the Supreme Court by a vote of 68-31. With this vote, she becomes the first ever Latina Supreme Court Justice (and arguably the most powerful Latina in U.S. history) and only the third-ever woman Supreme Court Justice (following Sandra Day O'Connor who was appointed by Reagan and Ruth Bader Ginsberg who was appointed by Clinton.) Her "yea" total of 68 falls short of the 70-75 votes that I had been predicting she would receive and points to a troubling trend in court appointments. Confirmation votes are becoming increasingly partisan, as illustrated by Sotomayor, whose harshest critics would concede is highly qualified to be on the court and whose lower court decisions have been well within the mainstream. When Antonin Scalia, by far the most conservative justice of this generation, was appointed by Reagan, he was confirmed without dissent. Likewise for Ginsberg during the Clinton administration. Sure, Bork was shot down, but he was well outside of the mainstream. Sure, Thomas was only voted in 52-48, but he was very marginally qualified and came with some heavy sexual harrassment baggage. It is really only in the past 10 years that political philosophy alone became a reason to vote against a nominee.

Frankly, it's the fault of the Democrats. Samuel Alito was clearly a strongly qualified nominee whose views, while conservative, were certainly not outside of the mainstream. His confirmation was all but assured. Yet Democrats, including then-Senator Obama, led a stream of "nay" votes to symbolically protest his conservative philosophy. What comes around goes around, as they say.

Not that I forgive members of the GOP, who were somehow outraged by the votes against Alito but had no problem returning the favor to Sotomayor. Shame on you, Sen's Hatch (R-UT), McCain (R-AZ) and Sessions (R-AL). You sold out your principles for cheap political points. At least some members of the GOP showed philosophical consistency on this issue, notably Sen's Lindsay Graham (R-SC), Lamar Alexander (R-TN), Dick Lugar (R-IN) and departing GOP Sen's Martinez, Gregg (at least we think he is departing) and Bond (moderates Snowe and Collins also voted for confirmation, but I suspect they more or less supported Sotomayor's judicial philosophy to begin with.)

Is this all an acadmeic discussion given that Sotomayor got confirmed? With the same party in control of the Presidency and the Senate, it is for now. But it certainly isn't hard to imagine a situation down the road where those powers are split and it creates an unbreakable gridlock where the Senate refuses to confirm qualified candidates becacuse they don't like their judicial philosophies. That is not a healthy state of affairs.

Martinez to Resign
Sen. Mel Martinez (R-FL), who had already announced that he would not seek re-election, has now announced that he will resign his seat early. Some will probably look for a secret plot around this, but I actually think that this is a straight-forward case of a guy tired with his job. His resignation has no real impact on the political situation there -- Gov. Charlie Crist (R) will appoint a "field-filler", a man or woman who will vote Republican but has no designs on running for re-election, maintaining the existing balance of power in the Senate. Crist will still be the overwhelming front-runner to win the seat in 2010. This really has marginal geo-political effect. Good for Sen. Martinez for leaving a job he doesn't like and spending time with his family.

Healthcare Turns Ugly
Town hall meetings crashed by conservative protestors shouting down congressmen, outbursts of violence, nazi imagery? This is all WAY over the top for a debate on the health care system. If conservatives are outraged at greater government involvement in the economy and health care, I'm not sure the best way to convince others is to display violence and hate. GOP leaders need to get out in front of this and condemn the violence. Regrettably, few have and some are attempting to legitimize these strong-arm tactics. My hope is that the public will be smarter and see these people for who they really are -- thoughtless thugs.

We absolutely need to have a debate in this country on the degree of government involvement in health care. This kind of desparate behavior does nothing to advance that debate.

Are we going to have grades every 100 days?
Okay, 100 days has always been a benchmark for a new President. But a set of 200 day report cards? With hostages coming home from North Korea, two wars still going on in Iraq and Afghanistan, a significant and energetic debate over health care and the enviroment going on, do we seriously have time to assign letter grades on every issue, arbitrarily averaged based on whoever happened to be watching CNN and had access to text-messaging during a given 7 minutes? Does this add anything to the discussion?

I refuse to participate. I'll give out grades after President Obama has finished his first year. Giving him a grade on health care or the environment while the crux of his policies are still being debated in congress is just silly.

Okay, I know what you are going to say...I publish a polling update every week or two. I'd love to tell you how that is different, but I have no good explanation.

Signs of Real Recovery?
GDP decline slowed to -1.0% in the second quarter of 2009, unemployment dropped ever-so-slightly in July from 9.5% to 9.4% and Wall Street is surging. I've been saying for a long time that the recession would end this summer, but it's still nice to see some signs it is coming true.
Now is the time that the stimulus bill really needs to get going -- the system is stabilized but unemployment is still high -- getting people back to work needs to be priority #1.

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Tuesday, August 4, 2009

2010 -- Looking Up a Little for the GOP, 2012 Too, Did Obama Bait and Switch?

2010 Projection Update
Things are looking up for the GOP in the least a little bit. History tells us that the party in Presidential power tends to lose seats in the mid-term elections, the most notable exception being the 2002 mid-terms, which came in the aftermath of September 11th and a highly popular President George W. Bush (yes, there was, in fact, a time that George W. Bush was a very popular President.)

The Senate first:
Here are the key changes:
Pennsylvania -- moves from Likely Democratic Hold to Lean Democratic Hold
Recent polls show likely GOP nominee and one-time primary challenger Pat Toomey surprisingly close to incumbent Sen. Arlen Specter (D) in general election polling. This is one the Democrats should hold, but Pennsylvania is still somewhat of a swing state.
Kentucky -- moves from Lean Democratic Pick-up to Lean GOP Hold
Sen. Jim Bunning (R) is out of the race and the Kentucky GOP can breath a sigh of relief. The state party is damaged, but let's face it, Kentucky is still a pretty darn red state.
Connecticut -- moves from Tossup to Lean GOP Pick-up
The Democratic party's best shot at holding this seat is probably for Sen. Chris Dodd (D) to retire. He is heavily damaged following the AIG flap and polling well behind. It is unknown how recent revelations that Dodd has cancer will factor into his decision around re-election.

So this leaves us with:
Safe Democratic Holds (8)
Hawaii, Maryland, New York (2), Oregon, Vermont, Washington, Wisconsin
Likely Democratic Holds (4)
Delaware, Indiana, Nevada, North Dakota
Lean Democratic Holds (4)
California, Arkansas, Illinois, Pennsylvania
Lean Democratic Pick-ups (2)
Ohio, New Hampshire
Toss-ups (Democratic Controlled-0)
Toss-ups (Republican Controlled-1)
Lean GOP Pick-ups (2)
Colorado, Connecticut
Lean GOP Holds (3)
North Carolina, Georgia, Kentukcy
Likely GOP Holds (6)
Florida, Alaska, Arizona, Iowa, Kansas, South Dakota
Safe GOP Holds (6)
Alabama, Idaho, Louisiana, Oklahoma, South Carolina, Utah

So, the likely projection range is:
No Change to Democrats +1
Best Case for Democrats (all leans): +6
Best Case for GOP (all leans): +6

Okay, so this isn't exactly wonderful news for the GOP, but there is slight movement in their direction. The bad news is that they still face a tough map (more seats to defend and more seats to defend in swing states) and there is no credible route to retake the Senate. If President Obama keeps having bad months, though, they could cut into the majority considerably.

In the House:
Latest generic polling has dropped to Democrats +1%, which gives us a range (projecting based on 2008 polling and actual results) of:
GOP +20 to GOP +28

20 to 28 seats would be a respectable mid-term pick-up for the GOP but will still fall considerably short of the 40 seats that they would need to gain to retake the House.

So, the situation has improved somewhat for the GOP. As of this point, they are poised to hold their own in the Senate and perhaps halve the majority in the House. If I were the GOP leadership, I'd be focusing my efforts on the House. It's a long-shot, but if President Obama is unpopular, they have an outside chance at narrowly retaking the body, or at least significantly narrowing the margin and increasing their influence. In the Senate, they should be happy if they can pick-up 1 seat to give them a fillibuster-potential minority.

2012 -- The Campaign Has Been On for...About 197 Days
Don't kid yourself, we are in a perpetual Presidential campaign. It's very, very early, obviously and this is probably more speculative chatter than real projeciton, but here is the latest:
For the primary nomination, the latest polling has Mitt Romney and Mick Huckabee in a dead-heat for the lead (22% and 21% respectively) with Sarah Palin showing a close third (at 19%). Newt Gingrich is a distant fourth (at 5%) and no one else even registers 5%.

This is notable for a few reasons:
(1) Huckabee being tied for the lead shows that he has some staying power. He is a smart, likeable, funny and articulate guy who happens to be radically conservative (sorry, but if you don't believe in evolution, you are a radical.)
(2) Palin was running first or tied with Romney immediately after the election. Her star has faded somewhat with the passage of time and her resignation but still remains a potent force.
(3) Gov. Bobby Jindal (R-LA) has dropped off the national map entirely (he was at 9% in earlier polling) following his disaster of a response speech to President Obama's address to a joint session of congress. He may still be a rising star, but he is plenty young still -- 2016 seems more likely than 2012.

In potential national match-ups, Rasmussen has released a couple of polls.
Romney vs. Obama -- Dead Even
Palin vs. Obama -- Obama +6%

Now, as I've noted in the past, Rasmussen polling has been a little strange this year. Their Presidential Approval poll has consistently shown radically lower approval of President Obama than every other major poll. Having said this, their 2008 Presidential tracking poll was pretty close (+6% Obama vs. a +7.2% actual result) and they have a pretty good track record.

If Mitt Romney is even with President Obama today and Sarah Palin is closer than John McCain was in November, it is a very good sign for the GOP's prospects in 2012. I'll cover a point-counterpoint on handicapping the 2012 race in a future post.

Did President Obama Bait and Switch?
In the last couple of weeks, several prominent conservative commentators, most recently Peter Berkowitz in the American Spectator have accused President Obama of a bait-and-switch - proposing himself as a moderate in the 2008 campaign and turning out to be a liberal.

I frankly don't understand what factual basis exists for these claims. Clearly, President Obama has been the most liberal President in the past 30 years in his first six months in office. Yes, he spoke of post-partisanship and unity in the campaign. But what specific policies does President Obama not advocate then that he advocates now?

Berkowitz states that President Obama presented a much more moderate view of health care than he poses now. I actually think the reverse is true. President Obama was very clear in primary debates that he favored a public option and universal coverage. In fact, President Obama attacked Hillary Clinton's healthcare plan for NOT requiring all people to have coverage.

Conservatives have said the stimulus bill with extremely liberal. But President Obama called for a large stimulus bill from the campaign trail in the aftermath of the meltdown of the financial markets.

Conservatives are upset with Cap and Trade. But President Obama always endorsed Cap and Trade.

So, disgaree with the President if you are so inclined, but I don't think he could have been clearer from the trail. According to, President Obama has broken 7 promises that he made from the campaign trail, out of 515 and none of those relate to health care, energy or government spending.

If there is one area where President Obama has proven to be different from the campaign trail, it is in foreign policy...he has proved far more conservative. We still have over 100,000 troops in Iraq. We'll still have over 50,000 after his 18 month deadline. Frankly, I'm not sure what policy difference exists between the Obama Administration and what would have existed under a McCain Administration.

Where the GOP DOES have a fair criticism of the Obama Administration is on transparency. In fact, 3 of the 7 broken promises pertain to this area. We have not had all bills posted to the White House website for public comment for 5 days before signing. Rules for lobbyists coming into government are still too loose. No question, President Obama gets low marks in these areas.

President Clinton -- Still a Badass
I'll talk later about policy with North Korea, but for now, just a big thanks to former President Bill Clinton for bringing two innocent American reporters home.

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Saturday, August 1, 2009

Reflections from Down Under, President Obama -- Happy to See July End

Back from Australia
I made the long return trip from Australia last night (actually over about 30 hours prior to Friday night.) It was primarily a business trip, but I can't go two weeks without discussing politics, so I thought I'd share some observations:
* Australia is about the most pro-American country on the globe...they like us, but definitely like Obama better than Bush.
* Australia has a model private/public health insurance model -- a basic policy that is publicly funded and more generous private policies. Everyone there seems to love their model and can't understand why we can't do something similar.
* The Aussie economy is in great shape relative to the globe's. This appears to be in large measure to their lack of globalization -- your Aussie souvenir T-shirts are made in Australia as are the rental cars you drive.
* I need to go back when I can be a tourist -- the wildlife and culture are amazing there

President Obama's Awful Month of July
In my opinion, July has been by far the worst month of President Obama's term so far. His poll numbers show declines and with good reason. In July, we saw health care reform stall in both houses of congress, the June unemployment report show a 25-year high 9.5% unemployment and the stimulus bill coming under fire. Then, the normally buttoned-up and polished President stepped deep into the dog doo with the "acted stupidly" remark. All-in-all, not so good.

In the long view, it wasn't a total disaster. Sonia Sotomayor is still a lock for confirmation, with 7 GOP senators already announcing support and no Dems dissenting at this point, the stimulus is starting to get rolling at a faster pace and the prospects for economic improvement are getting better.

But lower poll numbers definitely mean less political capital and the President is going to need a lot of that to get health care and energy policy implemented. Prospects look tough, but not completely zero with control of both houses of congress still firmly in the hands of a Democratic party, although the Blue Dogs still don't appear aligned with the leadership on these issues.

The latest tracking of our composite of non-partisan polls is below:
At 15.5% overall approve-disapprove, President Obama is at the lowest mark of his Presidency, but still ahead of his 7.2% margin in last November's election. A breakdown by poll type is below:
Adult Americans: +19%
Registered Voters: +16%
Likely Voters: +7%

According to the likely voter polling, if an election were held today, it would look a lot like it did last November. For the first time in this administration, we have more than 1 likely voter poll. The Rasmussen Poll had been the only LV poll available and it had consistently shown far lower numbers than the others (it shows Obama at +1% today.) Now we have polls from GWU/Battleground and NPR that both show Obama at +11%, which indicates to me that there are either sample problems with the Rasmussen poll, or with everyone else. All the more reason to use aggregate numbers that average out the disparate methodologies.

President Obama's by-month numbers look as follows:

President Obama finished July with a +19.5% average, his lowest number yet (each successive month has been lower than the last so far.) July's drop, at 7.4%, is his second-largest drop, with an 8.4% decline in March being the largest. But March was while the "first 100 days" shine was still coming off. We are into a more steady-state now and losing 7.4% is a bad, bad month. A couple more like this and we will be talking about an unpopular President.

Policy Updates
(1) Economic Stimulus
As of this week's release:
Authorized: $191.9 billion (38.5%)
Spent: $70.2 billion (14.1%)

This puts average weekly spending since the stimulus bill was signed February 17th at just under $3 billion. At this pace, it would take over 3 years to exhaust the stimulus. Clearly, the pace needs to pick-up. I still believe the benchmark is 40% spent by year-end. We appear to be behind schedule to hit that mark. Benchmark Transportation spending has crossed $900 million (I'm sure you've seen some signs about projects funded by the act, as I have), but is still behind where it will need to be to create a number of jobs that will have a real impact.

The legislative part of this is done, this is about executive execution. Let's get moving, cabinet heads!

(2) Energy Policy / Cap and Trade
Still stalled in the Senate. No vote scheduled.

(3) Healthcare
Moved beyond the August recess. Just barely passed out of the House committee and both houses of congress appear poised to debate the issue in September. It appears that there is some hope for a fragile majority in both houses, which could provide for a narrow passage if Democrats employ reconciliation to stifle a fillibuster attempt in the Senate. Blue Dogs in the House and moderates like Ben Nelson (D-NE) hold the keys in the Senate.

Upcoming....Some Actual Election Predictions
Congress is headed to recess, so in my next blog, I'll take a look at the latest numbers for the 2010 mid-terms as well as the far-out hypotheticals in 2012.

Thanks for bearing with me during my long trip out of town and thanks as always for reading.