Wednesday, September 30, 2009

Might the Senate Have the Lead in Health Care?, No GOP Monopoly on Stupidity, Chris Daggett for Governor

Could the House Hold Up Health Care?
With the Senate apparently ready to move a bill, possibly by tomorrow, there is a real possibility of a floor debate on the Baucus bill, or some combined variant of the three health care bills that have passed out of Senate committees. It appears likely that the bill will pass the Finance committee with complete or near complete Democratic support and at most 1 Republican votes (Senator Olympia Snowe of Maine is the only possibility and she has been mum on her final vote to this point.)

The path forward in the Senate is tenuous to be sure -- other than Snowe and possibly moderate Republican Maine counterpart Susan Collins, there is very little prospect for any GOP support on the floor and an assured opposition fillibuster attempt. This essentially means that Democrats will need to hold at least 58 and at most 60 of the 60 Democratic and Independent Senators, including moderates such as Ben Nelson of Nebraska and Joe Lieberamn of Connecticut.

All that said, there is a very real chance that the Senate may be in the lead here. In the House, Speaker Nancy Pelosi (D-CA) continues to promise a floor vote "soon", but the nature of the bill and the coalition to pass it remain very unclear...liberals such as Pelosi seem unwilling to accept a bill without a public option and Blue Dogs remain firmly opposed to such an option. Without bridging this divide, it seems very difficult to make the math add up.

So will we get a health care bill this year? I still think it is more likely than not -- Democrats and the White House have far too much invested to just let it fall apart...but this late in the debate, there are a lot of unanswered questions.

Stupidity Knows No Party
Well, it didn't take the Democrats too long to have their own Joe Wilson moment. Rep. Alan Grayson's (D-FL) statement that "If you get sick in America, the Republican plan is this: die quickly" is a disgraceful and unfortunate statement that lowers the level of debate.

I happen to be to the left of almost everyone in congress on health care reform, preferring an Australian or French-style system with guaranteed, government funded basic coverage for all and unsubsidized, taxed private alternatives for higher levels of coverage. But I don't think that those who legitimately believe in a lower level of government involvement are trying to kill our citizens.

Such a statement is just as absurd as ex-Governor and current pain-in-the-ass Sarah Palin's assertion that the Democratic plan would set up "death panels".

Democrats would do well and do good by taking the high road here. A unequivocal condemnation of Rep. Grayson's statement is in order.

Let's try to have an adult discussion.

Daggett for Governor
As a resident of New Jersey, I have agonized for months about my vote in the upcoming Governor's race.

On the one hand, we have incumbent Governor Jon Corzine, who has failed on many accounts. He has failed to tackle corruption and pay-to-play effectively. He has failed to dent the bloated and ineffective New Jersey bueracracy. He has failed on making New Jersey a more business-friendly climate. He has failed at property tax reform, with oppressive property tax rates still choking the middle class and putting the American Dream out of reach for millions of New Jersians. And, to top it all off, Governor Corzine epitomizes the Goldman-Sachs wing of the Democratic party that I have come to abhor in the financial crisis of the past year.

On the other hand, we have Republican challenger Chris Christie. A Bush Justice Department veteran (1 strike against him already!), Christie would veto gay marriage, outlaw abortion and appears to have a one-point government reform plan -- cut spending blindly and hope it all works out.

To me, both choices were untenable. I couldn't figure out which of the two evils was lesser.

Fortunately, I don't have just two choices.

Chris Daggett is a serious man with common-sense views. He has presented a common-sense plan to reform the tax structure in New Jersey, reducing reliance on property taxes and reducing corporate taxes by eliminating sales tax exemptions that benefit few working New Jersians and are a major source of revenue leakage. Daggett favors common-sense individual liberties, including support of gay marriage and abortion rights. And Daggett has real credentials with decades of executive experience in state government.

I realize that the odds are very high Daggett will not win. Some will say I am throwing away my vote. I personally think voting for Corzine or Christie would be throwing away my vote.

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Friday, September 25, 2009

It's a Crazy World, Waffling on Afghanistan?, More Obama Polls, Tracking NJ and VA, Health Care Plods Along, MA Senate Controversy

There has been a ton going on this week in the world of politics, so I'll get right to it....

Nutcases, Radicals and Dictators -- Oh, My! If there is one thing that the UN and G20 meetings has confirmed, it is that there are still a lot of crazies in the world....and that we need to keep an eye on the ones who could potentially get their hands on nuclear weapons.

From the re-emergence of Libya's nutty-again dictator Muammar al-Qaddafi, who, apparently has quite an axe to grind with just about everyone in the world, to Iran's illegitimately elected (probably), nuclear-ambitious, holocaust-dening, always-nutty Mahmoud Ahmadinejad, the world is quite a scary place.

Of the two, while Qaddafi's rambling, long speech garnered the eye of the media, it is Ahmadinejad and Iran's nuclear ambitions that deserve our attention. A nuclear Iran is a scary prospect indeed. While Iran lacks the technological capability to launch a nuclear weapon that could reach U.S. territory, they could certainly turn the middle east into a crater, Israel included.

A much harder line is needed with Iran. President Obama is right to declare their actions unaccceptable, but the world needs to stand together to do much more than talk. Iran should have zero access to capital, equipment or trade unless and until it abandons its nuclear ambitions. They are simply too great a risk. What purpose does the UN serve if NOT to stop rogue nations like Iran from acquiring the ultimate destructive weapon?

At the G20, a slightly more sane gathering of nations, things were considerably tamer. Sure, we had the normal protests from the usual anti-globalization radicals, but the tone inside was considerably more business-like. That said, no real break throughs came out of the session. The leaders declared it a success and agreed to some underlying principles on things like regulation of the financial markets and pollution control. Nothing really meaty though.

The international schedule has been crowded as of late, particularly with the aftermath of a global recession. Unfortunately, I fear the world is just nibbling at the edges of the causes of the near-collapse of the global economy. No one has addressed in a serious way, how to eliminate the risk posed by "too big to fail" institutions, which are at the root of the severity of the recession. And it appears unlikely they will as the crisis has passed.

Is Obama Shooting Straight on Afghanistan? From the onset of his campaign for President, Barack Obama made it clear that he viewed the war in Afghanistan as a "war of necessity" as opposed to the Iraq war, which he viewed as a "war of choice". He relentlessly criticized the Bush Administration for failing to commit adequate resources to Afghanistan and for taking its eyes off the ball by focusing so much troop strength in Iraq.

It is concerning, then, that the President seems reluctant to send more troops and appears to have held back the recommendation of Gen. Stanley Mcchrystal to send at least 10,000 additional troops to the country.

Is Obama caving in to the left-wing of his party?

The worst solution in Afghanistan is to maintain the status quo. We could have a reasoned debate about whether a continued American presence makes sense (I tend to think it does, although we need a great deal more clarity on the mission objectives and conditions for exit), but EITHER commiting more troops OR exiting the theater are preferable to maintaining the status quo. We learned our lesson in Vietnam, that half-pregnant wars do not work.

Let's hope President Obama takes a clear position in the next couple of weeks and if he chooses to continue to leave troops in Afghanistan, that he commits a sufficient number to do the job.

More Obama Polling

It is remarkable, given everything that has happened over the first 8 months of his Presidency, that President Obama continues to enjoy popularity at or above his November totals. The hope and change President has seemed far less inspirational and a lot less visionary over the past few months than many had hoped. Yet, on his ultimate scorecard he is still faring pretty well.

President Obama has continued to hold on to the modest gains that he had achieved following his late-August lows. He has yet to have a polling day below his November margin of 7.2%.

In the monthly data, President Obama actually has a chance for September to be the first month that he gains ground. His average as of today is +12.0%, just slightly below his August average of +12.3%, but his daily numbers are tracking above the average, so it certainly looks that, at worst, President Obama will have a flat month in September. Not a bad recovery after the disaster over the summer.

NJ/VA Governor Updates
It's getting down to crunch time in the 2009 elections, and the only ones of significance are the fights for Governor in New Jersey and Virginia. The GOP would still have to be considered a favorite to take both seats, but things continue to get closer.

In Virginia -- my latest analysis of polls puts this at a 4.4% margin for Republican Robert McDonnell over Democrat Creigh Deeds, while the RCP average has an identical margin. This is practically a pick 'em in a state race with over a month to go and Deeds closing at a pretty good clip (we were talking mid-double digits a couple of months ago.)

In New Jersey -- my latest analysis still has it a 7.5% margin for Republican Chris Christie over incumbent Gov. Jon Corzine (D) while the RCP average shows it a 6.6% race. This one is tightening too, although not as fast.

I'd been predicting from the get-go that Corzine would close in New Jersey, given its history of flirting with Republicans but electing Democrats. Could I have had this backwards? Might the DEMs pull it out in now-purple Virginia and get scortched in still-deep-blue New Jersey?

Health Care Bills Moving, But Not Too Fast
In the House, Nancy Pelosi is slowly moving towards a showdown on the floor sometime in the next month, basically negotiating only with Democrats. It appears likely that the bill will make it to the floor with a public option in it, as Pelosi has expressly rejected both co-ops and the "trigger" mechanism as alternatives. The problem Democrats face in the House, is that it is not clear that they can cobble together enough Democratic votes to pass a bill with the public option, and they will certainly get no GOP votes. It's also not clear that a bill that excludes a public option would attract enough liberal support. Back to the same problem -- the Dems are not on one page.

The Senate prospects, unbelieveably, actually look brighter than in the House. Despite lots of partisan committee votes, it appears that the Baucus bill will make it to the floor without major changes and with no obvious Democratic defections. If the Senate passes a bill without a public option, it will put major pressure on Pelosi and company to get the liberal wing in line and line up behind a similar bill.

Still a long tricky way to go on this one.

Hypocrites in Massachussetts
Governor Deval Patrick (D) has named Paul Kirk to fill in as an interim Senator until a special election is held in January to select the late Sen. Edward Kennedy (D). He made this appointment after the legislature rushed through a bill, changing the law to allow such an appointment. The Governor waived a normal protocol that laws in the state be deferred for 90 days before taking effect, prompting a GOP court challenge, which appears to have at least initially failed.

Gov. Patrick and company were probably within their legal rights here. But that's not the point. The point is the hypocracy that they delayed in making the change in the law.

Massachussetts had previously had a law which allowed temporary appointments to the Senate. In 2004, when Sen. John Kerry (D) was seeking the Presidency, the legislature promptly changed the law to allow only selection by special election, guarding against a GOP Senator from then-Gov. Mitt Romney (R). Now, when a 60th Democrat is needed for health care reform, they switch it back. Changing the rules of election to serve a specific political outcome is wrong and should be condemned.

And while we are on the topic, shouldn't we have a uniform selection of laws across the country for how Senators are selected in the event of a vacancy?

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Sunday, September 20, 2009

Is the Stimulus Still Necessary?, Sloppiness on Capital Hill, Addressing Access but Not Cost

As we approach the end of the government's fiscal year (which runs from October 1st to September 30th), it seemed like an appropriate time to review fiscal priorities and policies.

If the Economy is Growing Again, Do We Still Need the Stimulus?

As I'd been predicting for some time and the consensus of the political and economic world has now confirmed, the economy appears to have resumed a modest level of growth in the third quarter of this year (the quarter than began July.) Consumer spending and industrial production are up. Capital investment is back. The stock market has rebounded. And new unemployment claims are falling.

So, do we still need a stimulus?

First, let's review where we are.
As of the latest report from the government, here is where the provisions of the stimulus bill stand:
(1) Appropriations -- $499 billion total allocated
Authorized: $237.7 billion (47.6%)
Spent: $98.0 billion (19.6%)

(2) Tax Cuts -- $288 billion total allocated
Tax Relief Provided -- $62.5 billion (21.75)

In total, between the tax cuts and the outlays, $160.5 billion of the stimulus funds have been paid out, representing 20.4% of the amount authorized in the bill.

So, if the economy is recovering, do we really need to spend the other $626.5 billion? Would the money be better unspent to attempt to reduce the deficit.

Unequivocally, I believe that we must continue down the current path, for several reasons.
(1) Government Commitments
Projects which have been authorized but not spent would have a chilling impact if canceled. Private contractors have made hiring and investment decisions on the basis of these decisions and the government is obliged to honor them.

Similarly with the tax cuts, people have made decisions to buy homes, upgrade the energy efficiency of their homes, purchase automobiles and made financial decisions on the basis of the tax cuts in 2009 and 2010. Repealing them now would be operating in bad faith.

(2) Not Yet V-Shaped
Yes, growth has returned. But it is tenuous growth. The economy is clearly not booming and is in fragile shape. Pulling spending out of the stimulus is not the way to ensure that the economy finds firm footing.

(3) We Need to Do a Lot of This Anyway
The "emergency" provisions of the stimulus such as direct payments to states to cover shortfalls are already spent. Most of what is left is infrastructure spending including upgrading roads and bridges, green investment in government building and schools, computerizing government record-keeping systems and other investments, which, on balance are extremely good and needed things to do. Part of the complexity of the stimulus is that it wasn't just a direct infusion into the economy, it was kind of a roadmap for how we would upgrade productivity over the next decade. Not a bad thing to keep doing.

(4) It's Unemployment, Stupid
Unemployment still languishes at 9.7%, it's highest level since 1982. On of the major charges behind the stimulus bill was to contain unemployment. Sustained high unemployment damages consumer spending and confidence, and perhaps, just as importantly, is a major political problem for Democrats.

The American Recovery and Reinvestment Act was a massive expenditure at a time when the deficit was already projected to be at unsustainable levels. But it was a necessary short-term choice. In the near-term, the federal debt is not a big concern, Treasury Yields (the rate of interest the government has to pay to borrow) are at historical lows, meaning there is still plenty of liquidity to fund government operations.

We desperately need to get the deficit under control during President Obama's first term. But let's finish fixing the economy first -- ultimately economic growth leads to tax receipts, so if we don't fix the economy, nothing that we will do to fix the deficit will work.

Why Can't Congress Meet a Deadline?
In a continuation of a horrible legislative practice, it appears that we will likely see none of the major appropriations bills hit the President's desk by the time the new government fiscal year starts on October 1st. The cumbersome legislative process involved in annual appropriations involves both houses of congress passing a version of each appropriations bill, then a conference committee of Representatives and Senators compromising on the differences in the bills, a "conference report" that contains these agreements then being passed by both houses and the final appropriations bill signed by the President.

Over the past couple decades, the habit has been to pass budgets later and later in the fiscal year, using "continuing resolutions", partial funding for the functions of government for a short period of time, to bridge the gap.

This is understandable when power in Washington is split and Republicans and Democrats have to have tough negotiations to agree to spending priorities. In fact, for the fiscal year we are finishing, President Bush never signed budget bills -- this was left to the messy omnibus bill that President Obama signed that was widely criticized for being laden with pork.

There is no excuse with one party in control. It is simply dereliction of duty not to get budgeting done on time. Use of continuing resolutions is a poor practice because it leaves government agencies without spending priorities or an understanding of what programs will have continuing funding throughout the year. Below is the status of the bills. The Senate is really just getting into the debate, with the Transportation bill next on the docket. Looks like we will miss all the deadlines again.

Improved Access? Maybe. Improved Cost? Not So Much.
The very compromised Baucus Health Care Bill, which still appears to have zero GOP support, despite giving in on what looks to me like every major point (public option -- gone, protections against illegal immigrants -- in, spending -- reduced), will likely still help improve access to health care for Americans most at risk.

Eliminating exclusions for pre-existing conditions, prohibiting dropping insured people who are current on their premiums simply because they become sick and providing subsidies for those not poor enough for Medicaid but not rich enough to buy insurance on their own are all good things that will help improve access to our system.

But there is really very little in this bill that addresses the most dangerous part of health care in this country, it's very high and rising cost. There are many contributing factors to this, but here are what I consider to be the key ones:
(1) Perscription Drug Costs
No allowance to import drugs from Canada. No "most favored nation" clause, as I have suggested, for drug pricing. This looks like a giveaway to big Pharma -- more insured patients but no controls on what they can charge, even if it is many multiples of what they charge other industrialized nations that have government-run health insurance.

(2) Insurance Company Overhead and Profit
One in three healthcare dollars pays for insurance company overhead and profit. This spending adds zero value to the health care system. Medicare and Medicaid has less than a third of that overhead, as do nationalized healthcare systems. Without some provision to control the amount of money sucked out by insurance companies, we will continue to suffer from higher costs for care. Co-operatives may help some, but I doubt they are the full solution.

(3) Defensive Medicine
The GOP has this one right -- we need tort reform not just to reduce the cost of tort, but to reduce the prevalence of "defensive medicine" -- procedures that are likely unnecssary that are performed just to prevent a future law suit. Baucus is silent on this.

We may make a step forward on access, but I fear we are not going to make much progress on cost with this bill. Without reforms to cost, Medicare and Medicaid spending will cripple the government over the next 20 years. We will have to take it up eventually, but it looks increasingly unlikely that it will happen this year.

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Wednesday, September 16, 2009

More Evidence of the Old Normal, I Finally Tackle Van Jones, Corrupt Incorrigible ACORN

President Obama's Poll Numbers -- It Is What It Was
Continuing evidence of a theme that I have been citing for several weeks...we are basically the same divided nation that we were last November and well before then. You have to look all the way back to 1984 the find a Presidential contest to find a popular vote margin in the double digits (Ronald Reagan's thrashing of Walter Mondale.) The "decisive" margins of the last 20 years include George H-W. Bush beating Michael Dukakis by 7%, Bill Clinton beating Bob Dole by 9% and Barack Obama beating John McCain by 7%.

Given this, it is any real surprise that President Obama's popularity has settled in at around 10%?

For a brief period of time, the nation was united behind a leader promising hope and change. In the end, those who voted for him, generally like the path he has charted, those who voted against him generally don't. Kind of makes sense.

President Obama's daily numbers have hit 2 low points, on August 30th and September 11th, which each showed his approve minus disapprove at 8.7%, very close to his 7.2% margin last November. The past few days, following his health care speech, he has seen a modest rebound, to 12.8% in yesterday's data.

The monthly data, which smooths out the short-term bumps, we see a stabilization in September after two awful months in the summer.

These numbers reinforce the partisan divide in congress - members from conservative districts win by opposing the President, members from liberal districts win by supporting him. And the Blue Dogs straddle the line.

A Belated Commentary on Van Jones
Much as it pains me to say it, the Glenn Beck's of the world had this one right. It took me a while to bring myself to write that earlier sentence. No man who supported an inquiry into President Bush under the hypothesis that the former President was complicit or even a co-conspirator in the 9/11 attacks deserves to be in an appointed role in government. There is zero evidence to support such a theory. Those on the left who continue to offer this theory are as bad as the birthers on the right. I'm glad Mr. Jones removed himself from public office. The Obama Administration should have done a better job vetting to begin with. It doesn't appear that Mr. Jones' views were a secret.

Just the latest appointment embarrassment from the very complicated but apparently ineffective vetting process. Do better, Mr. President.

ACORN Revealed
Charges last fall that ACORN was involved in voter fraud were fairly tentative. The charges, which centered around clearly fake registrations filed by ACORN employees failed to prove anything other than if you offer money for a filled out voter registration form, you'll get some pretty bad voter registration forms.

Far more disturbing are the documentary shots revealed this week of ACORN employees attempting to aid a man and a woman, posing as pimp and hooker in forging their taxes, even offering advice about how to categorize underage foreign sex slaves to maximize tax benefits (I only wish I were kidding or exaggerating.) And apparently, the corruption is rampant, at least 3 ACORN offices yielded similar results.

Enough with this corrupt organization. Evil is evil, whether it is rooted in the left or in the right. The Senate has voted to ensure that ACORN does not receive public funds. Good for them. The President has condemned ACORN's actions. Also correct. about seeing a few people thrown in jail? Conspiracy to defraud the Federal Government is still a felony.

The Baucus Bill
Senator Max Baucus (D-MT) has put forward the closest thing to an "Obama Healthcare Bill' that I have seen and...surprise, surprise, the Republicans from the "gang of six" are nowhere to be found. It is clear to me, for both political reaons (see above) and ideological ones (the GOP just isn't interest in an expanded government role in health insurance), this is going to be a partisan debate. The question is whether DEM's can peel off a GOP Senate member or 2 (I'm thinking of you Susan Collins and Olympia Snowe) while holding on to enough liberals in the House to actually pass a bill. It still looks like a lot of needle-threading.

I remain hopeful -- if ever there was a broken, overpriced system in need of reform, our health care system is it. The dual GOP arguments that government insurance will be awful but will also competitively crush private insurance are such an inherent contradiction that I don't even know where to start. Our system is expensive, inefficient and denies all but the most catastrophic care to almost 15% of the population. We all benefit by fixing this.

But we might not, just like we didn't in the 1970s when Richard Nixon and then Jimmy Carter supported universal health care or in the 1990s when Bill Clinton did. The system has continued to get worse since then. The rest of the first world has solved this problem. If the Democratic Party can't figure out how to do it with healthy majorities in both houses, then they deserve to lose lots of seats in 2010....and they will. If they get a law passed, they may still lose seats, but they will deserve the thanks of the next generation.

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By the way...the site visit counter at the bottom of the page has not been working for several days. The website that houses the counter appears to be down. If you are interested, we've had 82 visitors to the site this month as of this writing.

Sunday, September 13, 2009

The Speech, The Outburst, The Partisanship

Our President Can Give a Speech...But Can He Get a Bill?
In case we had all forgotten the 2008 campaign, we were reminded again on Wednesday night that President Obama is, quite clearly in my mind and not by a close margin, the greatest speech-giver of our generation. The President was lucid, decisive and inspiring in his speech. I have no doubt that to the extent that the speech was watched, it will move the needle, at least temporarily, on public opinion of health care reform.

There are plenty of legitimate things to quibble about regarding health care reform: the continued lack of details from the White House, the lack of serious bi-partisan outreach (more on that later), the lack of clarity around how we are going to pay for all of this without either killing the upper class or breaking his pledge on middle class taxes. But, I've got to give credit where credit is due, and this was another exercise in rhetorical genius from President Obama.

But speeches don't pass bills, politicans do, and there is little evidence that this did much to change the political realities of health care reform. And I'm left with the same principle question that I had before the speech: what combination of reforms can bridge the gap between liberals and Blue Dogs to actually pass a bill?

The Outburst
If you didn't watch the speech live and simply tuned in to news reports today, all you probably heard about was the outburst from Rep. Joe Wilson (R-SC), who shouted out "you lie!" while President Obama was attempting to debunk the claims that have been made by some on the right that proposed health care reform legislation would provide coverage to illegal immigrants.

Dealing very quickly with the substance of the remark, I find Wilson's assertion to be clearly false. The non-partisan rated his remark "false" as does basic common sense -- a bill that provides a combination of employer mandates and tax credits simply does not aim to provide illegal immigrants with benefits, since they cannot be legally employed and do not file federal taxes as they have no social security number. Could some illegal immigrants with forged documents perhaps receive coverage under the program? Sure, it's possible. But to say that this is somehow the intent of the bill is ridiculous.

As far as the outburst itself is concerned, the primary point is not about the veracity of the remark. Certainly, there are members of both political parties who have believed that Presidents have lied in the past...Wilson clearly seems to believe what he said, many on the left clearly believed that President Bush lied in the run-up to the Iraq Wars, many on the right I'm sure believed that President Clinton lied about everything from extramarital affairs to his real estate dealings.

No, the point of all of this is one of basic decorum and standards of behavior. Saying that the President is not telling the truth is perfectly legitimate political expression -- in a newspaper column, a blog, even a tweet. You can say it in an interview with CNN and Fox News. What is not acceptable is to insult the Office of the President with an outburst in the most formal of settings. We simply don't do that, because we respect the INSTITUTION of the Presidency too much, even if we don't happen to be enamored with its current occupant.

In other countries, different social norms apply. In Britian, the House of Commons routinely has outburst at the Prime Minister's Question and Answer sessions -- this is a proud part of their tradition of political theater (and actually quite entertaining if you ever catch it on PBS.) But we are not the Brits. And in the United States of America, you simply do not do what Wilson did.

Wilson has apologized and President Obama has accepted. Good enough for me. Wilson also released a webcast attempting to raise money the same day seemingly using the outburst as a selling point. Pretty sleezy, but I can understand it, given that his opponent raised almost half a million dollars immediately following the outburst. My inclination is that we should just let this story die. No formal censure, as some have suggested, is necessary. This was a question of very poor behavior, but it isn't an ethics or legal violation.

No Bipartisanship in Sight
Perhaps the part of President Obama's speech that most strained credibility for me was the notion that he still wants to reach a bipartisan solution. He offered up the token of taking up Senator John McCain (R-AZ)'s ideas around health insurance portability. Complete tokenism. There is no evidence of a serious bipartisan outreach or any indication that there will be a bill supported by any members of the GOP other than perhaps Sen. Olympia Snowe (R-ME).

There are two clear paths here: the President could pursue a truly bi-partisan reform bill that would be very limited. For instance, he could probably pass a bill that includes prohibiting pre-existing condition exclusions, does tort reform and creates health insurance co-ops and get broad GOP support. Or, he could go for a bill with a Government insurance alternative, mandates employer coverage and heavily subsidizes premiums for the lower-class and pass it with only Democratic votes. Both approaches have some merit.

What President Obama cannot credibly do is to pass a bill that is largely chock full of Democratic ideas and call it an attempt at bipartisanship. Bipartisanship by its very nature means compromise -- the two parties are not one party because they fundamentally disagree on things. To get a bipartisan bill, you have to attempt to split the difference. And the White House doesn't appear interested in doing this. They don't have to. They won the election. But you can call it bipartisanship if what you mean is "I want Republicans to vote for my Democratic bill."

Is Obama Reading This Blog?
I suggest President Obama should give ground on the public option -- two days later he does just that. I suggest that he should offer up tort reform as the basis for a compromise -- a week later he does so in a major speech.

Is someone from the White House reading this space? I'd be very flattered if they are, although I suspect that there are simply some very bright people in the White House who come sometimes come up with some of the same ideas that I do.

August a Low for Our Ratings
August was a significant slump for readership of this space. This site drew 171 hits in August, by far our lowest total to date (we had never had a month with less than 200 hits prior to last month.) It's disappointing, but not terribly surprising as August tends to be a lull for political sites and politics in generally.

Hopefully a lot of you that took a break from this space in August are back reading again. I do my best to bring you interesting political analysis and commentary without there ever being a charge to you, the reader.

If you like this site, and especially if you work in the White House or know anyone who does, please recommend us. And your comments, as always, are welcome.

Sunday, September 6, 2009

A Check-in on Obama's Promises, 2010 Updates, Ridiculous Protest?

Is Obama Doing What He Said?
Today marks President Obama's 230th day in office, 15.7% of his term now having been completed. Time for a check-in on if he is doing what he promised.

The continuing cry from conservatives around the country is that President Obama ran as a moderate and has governed as a liberal. I've written about this fallacy before -- to me, President Obama clearly ran as a liberal on POLICY issues (his views on taxation, health care, climate change and such were all well known early in the primaries), but ran as a post-partisan "uniter". On the post-partisanship question, he has failed more than he has succeeded, with the hallmark legislation of his administration passing in a partisan fashion and prospects for a highly bi-partisan piece of health care reform legislation floundering. That being said, I've noted by way of the partisanship index, that for all the rancor in Washington, there are actually a number of smaller pieces of legislation that have been quietly getting done in a very bipartisan manner. On balance though, it would be hard to credibly say that President Obama has changed the tone in Washington.

On the policy front, the emperical evidence indicates that President Obama is headed largely down the path that he committed to. First, on major policy inititaives: the stimulus, healthcare reform and carbon control legislation are all exactly along the lines of what President Obama articulated on the campaign trail. His policy in Iraq, is, if anything, more Conservative than how he ran -- combat troops are staying longer and 50,000 "non-combat" (whatever that means), troops are staying 2 years longer than he committed on the campaign trail. In Afghanistan, President Obama campaigned on escalating military efforts and he is certainly headed down that path.

Looking at the raw numbers, the latest, independent, assessment gives President Obama the following scores on the 516 promises that they documented from the 2008 campaign:
Of the 516 promises, 59 have some sort of "final" disposition (they have either been kept, broken or compromised.) At 11.4% of his 516, this is slightly behind scheduled, if he is going to deal with all his promises in his 4 years in office.

Of the 59, 41 of the promises are rated "kept", 11 are rated "compromise" and 7 are rated "broken". Giving 1 point for kept promises and half a point for compromises, this gives President Obama a promise keeping rating of 79%.

Of the 457 that do not have a final disposition, 91 are rated "in the works", meaning President Obama clearly still supports them and is working towards implementation. 12 are rated "stalled" meaning that the President has not outright broken them, but appears to have either passed on opportunities to implement changes or has made it clear that it is not a policy priority. The remaining 354 are rated "no action", which simply means that the issue hasn't really come up yet.

This gives us the following rates:
(1) Promises Dealt With (11.4% of total)
Kept: 69%
Compromised: 19%
Broken: 12%
Overall Score: 79%

(2) Promises To Be Dealt With (88.6% of total)
In The Works: 20%
Stalled: 3%
No Action: 76%

Kept: 8%
In The Works: 18%
Compromised: 2%
Stalled or Broken: 4%
No Action: 68%

% Promises Completed (1 pt for Kept, 1/2 pt for In the Works or Compromised): 18%
% of Term Completed: 16%

Not too bad a record, all things considered. Of course, we don't have comparability with other Presidents, based on the relative newness of, which is a fantastic project for holding politicans accountable. It would be hard to imagine a modern President who would have better ratings at this stage in his Presidency, though.

2010 Updates
Not a ton of new news in the races, but the trend definitely seems to be heading towards the GOP. Here is the latest news:

Nevada -- two new polls again possible opponents show Sen. Harry Reid (D) trailing two possible opponents, although both were withing the margin of error. This is enough to take the race all the way from a likely DEM hold to a toss-up. You could make a case to take it to a Lean Republican Pick-up, but I'll wait for some more information to confirm it -- I don't like to move races three notches in one update unless there is more information than this.

New York -- no change to the rating...yet. Incumbent Sen. Kirsten Gillebrand (D) is crushing Rep. Peter King (R) in statewide polls, but is in a dead heat with Gov. George Pataki (R). I'm going to leave this a likely DEM hold for now, as it is unclear that Pataki will run, but it would move to a toss-up if Pataki announces that he is in.

Massachussetts -- we initiate coverage with the death of Sen. Edward Kennedy (D). It is very unclear who the candidates will be, but in this heavily blue state, I'm initiating this one as a likely DEM hold.

Illinois -- no change in the rating as this one remains a toss-up. New polls show Kirk and Giannoulis in a deat heat, confirming that this will be a hot race.

Pennsylvania -- remains a toss-up for now, but may shift back in the blue column. Polls show incumbent Sen. Arlen Specter (D) beating former Rep. Pat Toomey (R) in a general election. But he has to first get past a primary challenge. If Sestak unseats Specter in the primary, however, Toomey leads in the general. Specter is leading primary polilng now. Democrats would be wise to stick with him or they may give this seat up.

Florida -- more evidence that Gov. Charlie Crist (R) is way ahead in this one. He continues to hold double digit leads in new polls. This one stays a likely GOP hold.

All of which leaves us with:
Safe DEM Holds (7)
Maryland, New York (Schumer), Oregon, Vermont, Washington, Hawaii & Wisconsin

Likely DEM Holds (3)
North Dakota, New York (Gillebrand), Massachussetts

Lean DEM Holds (2)
Arkansas, California

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

Toss-ups -- GOP Held (0)

Toss-ups -- DEM Held (3)
Nevada, Illinois, Pennsylvania

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

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

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

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

Which leaves us with a projection of:
GOP Pick-up of 0 to 3 seats (central projection +1 seat)
GOP pick-up of 11 seats is needed to gain a majority

In the House, polls are all over the map. The Rasmussen Poll (which this year has almost always been the most GOP-leaning poll on all subjects), shows the GOP at +7%, whereas the Ipos-McClatchy poll shows the DEMS at +8%. Neither of these scenarios seems plausible right now. Taking a "margin of error overlap" approach to all the polls, my guess is that we are somewhere between GOP +1% and DEMS +2%. The sample-weighted average of all polls shows Dems +0.7%.

Based on this, my current projection is:
GOP Pick-up of 16 to 34 seats (central projection is +17 seats)

I'm not sure what to do about the Rasmussen polls going forward if the current trend of them being 10-15% more Republican than all the other polls continues. On the one hand, I could throw them out as an outlier. On the other hand, I don't really know whose sampling methodology is right and perhaps Rasmussen has found a formula that the other guys have missed that will prove to be more accurate. Without emperical evidence to validate polls versus results, it is difficult to know. And Rasmussen was well within the mainstream last November (+6% for Obama vs. an actual result of +7.2%.) My inclination is to leave them in the averages and hope to continue the trend from last November, where a large group of sample-weighted polls lead to a very reliable results.

The President Can't Talk to School Kids?
Even Democratic hypocrites (and there are plenty of them) would never have dreamed of protesting President George W. Bush reading to school children. Yet, conservatives across the nation are protesting President Obama speaking to school children, claiming some sort of political indoctrination. That's right, folks, the Orwellian plan of the Obama Administration is to indoctrinate third graders by having the President talk to them about achieving their goals while sending secret subliminal messages that will make them force their parents to support universal health care. What a joke.

President Reagan actually made a blatantly political speech to school kids in the 1980s, speaking out against the evil of taxes, and nobody protested or threatened to pull their kids out of school. All indications are that President Obama's speech will be a heck of a lot more benign than this. If these protestors are serious, than I fear for the type of education their kids are getting at home.

I'm not one to liberally throw the race card around, but does it strike anyone else that these protestors don't so much have a problem with the President addressing school kids, but perhaps with a BLACK President addressing school kids. Shame on them.

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Friday, September 4, 2009

2009 Update, Is Obama at Turning the Corner?, Mixed Economic Signals

2009 -- Still Looking Good for the GOP, But Small Reasons to Hope for the DEMS
Will the GOP sweep the New Jersey and Virginia governor races in 2009? It still looks likely, but perhaps slightly less likely than it did a few weeks ago -- especially in New Jersey.

Let's begin in Virginia. McDonnell still leads Deeds by 8 to 15%, depending on which poll you believe. Deeds has scarcely led at all since his come-from-behind win over the much better known Terry McAullife, leading only one poll (an early June Rasmussen poll.) The Real Clear Politics average shows McDonnell at +9.8%, my own sample-weighted methodology puts it at +9.0%. Either way, this one still seems to be a likely GOP pick-up, as Virginia does not historically turn left at the last minute.

In New Jersey, unpopular Gov. Jon Corzine (D) still trails upstart conservative Republican Chris Christie by 5-10% depending on your poll. The RCP average shows Christie +6.5%, my own methodology has Christie doing even better at +7.9%. But this actually shows a significant tightening, as Christie led by double digits throughout all of July and the first half of August. I see a familiar pattern that has played out many times in New Jersey over the past 20 years -- tax-angry voters initially favor the Republican outsider, then, on closer reflection, swing back to their natural blue tendencies. I'll rate this as lean GOP pick-up for now, but I wouldn't be surprised at all if I were calling this a pick 'em by October and projecting a close Corzine win by November.

All-in-all, the GOP has nothing but upside (they are fighting for two seats currently held by Democrats) and still seem poised to take at least one and possibly both of them. But the possibility of massive routs that would have an impact on national policy seems to be waning.

Stabilizing Obama
After almost two months of solid free-fall that cut Obama's approve minus disapprove from +28.3% on June 27th to a low of +8.7% on August 30th, the President's scores have been spiking int he past few days and sit at +11.7% as of September 3rd, a full 3 point improvement in 4 days. This has largely been driven by significant improvements in the Gallup (+9% in 4 days) and Rasmussen (+7% in 4 days) tracking polls, which show wildly divergent overall results (Rasmussen has Obama at -1% today, Gallup at +17%), but a similar trend. Whether this is just a blip, a stabilization or the beginning of a recovery in Obama's numbers remains to be seen. But he still hasn't crossed the 7.2% margin of his November victory...yet.

In his monthly totals, you can see just how big a toll the summer took on Obama's numbers. In 2 months, his monthly averages (which flatten out the spikes and dips) dropped by 14%. September has started slightly lower than August, but for the first time in a long time, the President's daily numbers are ahead of his monthly numbers, which would typically project an increase in his monthly numbers, at least in the short term.

Can We Be Recovering with Unemployment Spiking?
The BLS today announced that the unemployment rate in July had surged by 0.3% to (another) 26-year high of 9.7%. Include underemployed and workers who have given up and you have 16.8%.

So how can I be saying we are in recovery?

As I've said before, unemployment languishes for long after a recession ends (and make no mistake, I believe this one ended this summer.) It is likely the unemployment rate will reach low double digits before it starts declining, towards the end of the year. And the decline may be slow. We "only" lost a little over two hundred thousand jobs in July, which would typically equate to a 0.1% bump in unemployment. The rate went up more, because more of those "given up" workers who don't count in the official tally, have no re-entered the work force. Expect more of the same. But note the stock market actually rallied today on the news, which was slightly better than expected.

Protracted unemployment still poses a huge political issue for the President. The explanation above is not something that President Obama can easily give in a way that is accepted by people. As long as people are out of work and hurting, they won't feel the recession is over.

So, let's get moving on this stimulus!

Latest numbers from
Estimated Tax Cuts Paid Out: $62.5B (21.7%)
Spending Authorized: $217.0B (43.5%)
Spending Completed: $88.8B (17.8%)

$4.2 billion in stimulus spending happened last week, far above the average since the bill was passed. Still, at that pace, it would take 98 more weeks, almost two years at that pace, to complete spending. That won't be acceptable unless unemployment falls.

Inflation, Pfft
Among the dizzying theories about the end of the recession (is it V-shaped? Or W-shaped? or U-shaped? Or square-root shaped?), one that I don't buy at all is the theory that all this government spending and loose monetary policy will lead to massive inflation.

Inflation occurs when demand significantly outstrips supply of something. With unsold business inventories, house prices way off peak, oil at under $70/barrel and factories way under capacity, I can't see what that thing will be, at least for the next several years.

Sure, the Fed has to be careful to tap the brakes when the time comes...but that time is probably 18 months from now. Inflation risk is very small in the near-term.

Clearly the investing public things so too. The 10-year bond is yielding under 3.5% and the spread between 10-year and 30-year bonds is only 0.7%, implying very little investor fear about inflation, even over longer time horizons. TIPS, which pay a fixed rate over inflation, are yielding 1.8% plus CPI on a 10-year bond, meaning that the investing community has pegged 10-year inflation at a 1.7% rate (the spread between Treasuries and TIPS, which contain all the same risk-aspects, save for the inflation factor.) Hardly the late 70s and early 80s. Inflation may come out higher than that, but inflation under 5% is generally not an inhibitor of economic growth. And I'm not worried that the market is THAT wrong.

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Wednesday, September 2, 2009

On Health Care: We Are Nuts, High Drama in Front of Congress, The Remarkable Revelations of Tom Ridge

We Are Crazy and Ill-Informed

I'm sorry, but somebody has to say it -- on health care reform, we have no clue. We make insane claims like "we have the best health care system in the world" without any basis in fact. We fear the socialized systems of the likes of Great Britian (public system) and Canada (public insurance, private system) on the basis of scare ads about waiting for surgeries.

I'm in Toronto this week and today I conducted my own informal survey. I spoke to 17 people, all employed, all Canadian citizens about their health care. I asked them 3 questions:

(1) How do you like the health care system in Canada?

(2) If given the choice, would you prefer to get care in the US or in Canada?

(3) What do you think of the current debate in the US over health care reform?

The results?

(1) All 17 think that the current health care system in Canada is "good" or "great"

(2) Not 1 would even consider switching to getting their care from the US system

(3) Let me share some quotes:

"You guys are nuts!"

"Has anyone from the US even BEEN to Canada or Great Britian?" (I pointed out that I was there talking to them)

"How can the US be debating whether they should care for sick poor people or not?"

Long story short: our current debate falls WELL short of what we SHOULD be talking about. We SHOULD be talking about a complete government takeover of the health insurance industry. But we aren't, because we are uninformed and poorly traveled.

High Drama Next Wednesday

Next Wednesday, President Obama has announced that he will give a speech to a joint session of congress on this very topic. Not a ton is known about his speech, other than that David Axelrod has committed to the press that the President will be much more clear about what he wants to see in a reform bill.

Word behind the scenes is that the White House has been quietly negotiating with Sen. Olympia Snowe (R-ME) around a potential bi-partisan bill that would exclude a public option. As much as I believe what I said above about the need for a much larger role for government in health insurance, this is a wise move. A public option isn't going to happen. Let's get what we can.

All the Moderates Betray Bush

I had meant to write about this earlier, but I seem to have missed the news cycle. Former Homeland Security Secretary Tom Ridge makes allegations in his new book that during his time in Washington, Dick Cheney attempted to influence him to raise the terror alert level artifically to help with the 2004 campaign. I have to admit to being very unshocked.

This does play out as part of a broader theme for the Bush administration. The moderates that he brought onto his team over his 8 years: Christie Todd Whitman, Colin Powell and Tom Ridge have all distanced themselves considerably from the administration. Whitman quit with a ton of nobility after refusing to have a wrong interpretation of the Clean Air Act of 1991 crammed down her throat. Powell, regrettably, stayed on and pushed an Iraq war that he clearly had opposed inside the administration. He later endorsed Barack Obama in 2008. And now Ridge let's out serious allegations about the operations of the Bush White House.

Oh well...we never really believed Bush was a uniter not a divider, did we?

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