Thursday, December 31, 2009

My Favorite 10 Political Stories of 2009

It's the end of the year, time to look back at the year in politics. I have no scientific criteria for choosing these stories, but my general criteria are the historic significance of the event, the political impact, the national impact and the cultural impact.

Here are my top 10:
10. Arlen Specter switches parties
In a complete about-face, longtime Pennsylvania Senator Arlen Specter switched from the GOP to the Democrats. His official reasoning was fairly tortured...he was okay being a Republican for the last 8 years but all of sudden this spring they became to rightist? This story was at least 6 years in the making as the right has been attempting to ouster Specter, who was (and I think still is?) both fiscally and socially moderate. And the Democrats were more than happy to have vote number 60, although Specter wasn't given all of his seniority for his time as a Republican. Specter's departure from the GOP essentially left the Maine duo of Susan Collins and Olympia Snowe as the last true Senate GOP moderates.

9. The Blago Affair
Chicago corruption is nothing new, but Blago took it to a whole new level. His refusal to leave office, his flaunting his nose at party leaders by appointing Roland Burris to the Senate (who, incidentally, was needed to cast the 60th vote for Health Care cloture), his omnipresence in the media. It just doesn't get any better than this if you follow politics.

8. Sarah Palin quits as Alaska Governor and Hits the Blogosphere and Book Circuit
A bizzarre departure for the Alaska Governor...why did she quit again? She didn't like Freedom of Information requests? At any rate, the Ex-Governor quickly rekindled her GOP star, attacking health care "death panels", selling books like crazy and generally infuriating the left and revving up the tea baggers.

7. The Tea-Party Movement
Whether you think it is a Fox News conspiracy or an organic uprising of populists, the tea-party movement and the crashing of town halls this summer had an undeniable impact on the trajectory of both the health care debate and the political tone in America.

6. GOP wins in New Jersey and Virginia
Our only significant political contests saw Bob McDonnell and Chris Christie sweep into office amidst both national concenrs that Democrats were overreaching and local races that saw them square off against weak opponents. The GOP shows it still has life in it headed into 2010.

5. Fort Hood Shootings
Those awful events reminded us both of the heroics of our soldiers and the fragility, as well as the continued tensions between the Islamic religion and our culture.

4. Attempted bombing on a Northwest Flight
Lest we forget that there are still people in the world that want nothing more than to kill Americans, we were reminded this December after a failed bombing attempt on a Detroit bound Northwest flight from Amsterdam. We are also reminded again that all of the airport security added since 2001 has been costly window-dressing and that we can NEVER be absolutely safe in a free society.

3. The Government Takes Over GM
The biggest car maker in the United States becomes majority owned by the government after one of the largest and quickest bankruptcies in US history.

2. Senate passes Health Care reform on a party line vote
The most significant piece of social welfare legislation since LBJ's great society moves a step closer to reality. Call it socialism or call it human rights, but it's hard to argue its significance.

1. Barack Obama sworn in as President
Less than 8 years after September 11th, a man with the middle name Hussein was sworn into office. Less than 50 years after the end of segregation an African-American is sworn in as President, buoyed by victories in 3 southern states. I said it on election night and I'll say it again...only in this country would this even have been a possibility.

Lots of honorable mentions:
Joe Wilson's "You Lie!"
The Stimulus Bill Passing
Edward Kennedy's Death
New York's 23rd
Goldman Sach's bonuses
and many, many more.

Happy New Year! Lots of races to cover headed into 2010. We are closing in on the Massachusetts special election, the Illinois Senate primary and much, much more. 470 races of national significance next year! I look forward to spending the next 365 days talking with you about it.

Sunday, December 27, 2009

Scouring the World for Rare Senate Polls, Terrorism in the Air, Obama Approval Holds In Its New Range

If They Are Out There, I Will Find Them....2010 Senate Updates

A break from the House and the Senate gave me a much-needed chance to search far and wide for polling data on the upcoming Senate races. If you have never attempted to assemble polling data, it's a bit like a treasure hunt. Some of the data, the stuff that I rely on the most, is easy to find. The big polling houses: Gallup, Rasmussen, Research 2000, Quinnipiac, they all make their polls very easy to locate and this is sufficient for 80% of the races. Come November of next year they will probably all be polling all of the competitive races. But the far harder finds are the Des Moines Register and WHAS polls that I present today. It isn't that it is hard to find a poll from's that who knew to look for it -- I had no idea WHAS did polling. This also presents some risk around the quality of the poll performed, as I have no idea what the credentials of the pollster who conducted these polls is, but in the absence of other data, you go with with you've got.

All of this background explained, I'm going to first go through every race for which I could not locate ANY polling. In almost every case this appears to be due to the fact that the race is not expected to be competitive:
Oregon, Vermont and Washington -- rated "Safe Democratic Holds"
Indiana -- rated "Likely Democratic Hold"
(not rated safe due to the redish purple battlefield in Indiana)
Georgia -- moved from "Lean Republican Hold" to "Likely Republican Hold" -- no serious opposition has been mounted against Isakson.
Kansas -- Likely Republican Hold
(this is not categorized as "Safe" because the seat is open)
South Dakota -- moved from "Likely Republican Hold" to "Safe Republican Hold" -- Republican state, Republican incumbent, likely Republican year = Republican victory
Alabama, Idaho, Oklahoma, South Carolina and Utah -- all rated Safe Republican Holds

Now, we'll run through all the states that DID have at least some polling data. I'll give you the rating, if it's a change and the most recent poll or two:
Safe Democratic Holds (6)
Massachusetts - moved from LIkely Democratic Hold to Safe Democratic Hold for the January special election to replace Ted Kennedy. Democrat Coakley is up by 30 points in the latest poll from Suffolk.
Maryland -- Incumbent Barbara Mikulski is up by 36 points against a generic opponent in a September Gonzalez Research poll.
New York (Schumer) -- popular incumbent Chuck Schumer leads by a whopping 76 points in a November Sienna poll. Not likely to be a real competitive race.
(Oregon, Vermont and Wisconsin listed above)

Likely Democratic Holds (4)

Wisconsin -- moves down from Safe Democratic Hold to Likely Democratic Hold as a Public Policy Polling report shows ex-Governor Tommy Thompson within 9 points of Feingold in a hypothetical match-up. No word on if Thompson is running.
Hawaii -- moves down from Safe Democratic Hold to Likely Democratic Hold as a December 17th Research 2000 poll shows longtime incumbent Daniel Inoyue's lead at only 11%.
California -- latest Rasmussen poll from November shows incumbent Barbara Boxer with a 9 point lead.
(Indiana listed above)

Lean Democratic Holds (3)
Illinois -- moved from a Toss-up to a Lean Democratic Hold as December 11th Rasmussen poll shows Giannoulis up by 3 points. You have to go all the way back to April to get an earlier poll, which showed the race a tie.
New York (Gillebrand) -- latest match-up vs. Pataki shows Gillebrand at +5 points (Mason Dixon -- November). She trailed Guliani, who has declared he is not running and is up by 30 points or so on Rep. Peter King.
Arkansas -- a series of just-released Rasmussen polls show incumbent Blanche Lincoln anywhere from down 7 points to up 16 points against a whole host of potential opponents. I'll need more clarity around the field before feeling good about rating this race, but keeping it at a Lean Democratic Hold feels like it makes the most sense for now.

Lean Democratic Pick-up (2)

Missouri -- A December 17th Rasmussen poll shows Carnahan up by 2 points. Two other recent polls have shown 1 points and 3 points respectively as the margin.
New Hampshire -- really old data here...the most recent poll I could find from July 15th (a Research 2000 poll) shows Hodes up by 5 points. Two other polls around that time showed similar margins, but a heck of a lot has changed in 5 months, so I'd like some new numbers to feel good about projecting this race.

Toss-ups (2 -- both Democratically controlled)

Delaware -- Biden leads Castle by 5 points in a November 11th Susquehana poll. Other polls around the same time, most notably the Rasmussen poll, showed Castle with a modest lead (2 points.) Feels like a toss-up to me.
Pennsylvania -- still far too close to call between Specter and Toomey, in a rematch of the Republican primary from 5 years ago. The latest poll, a December 18th Quinnipiac survey, showed it dead even.

Lean GOP Pick-Up (3)

Colorado -- A December 11th Rasmussen poll shows possible challengers to Sen. Bennett leading him by margins ranging from 4 to 9 points, confirming early polls that show him trailing in the low to mid single digits.
Nevada -- more trouble for Majority Leader Harry Reid as he trails two possible opponents by 6 points in a December 12th Rasmussen poll.
North Dakota -- the shocking move of the week as this falls all the way from a Likely Democratic Hold to a Lean GOP Pick-up and if the poll I saw is right, it probably should move further. A December 21st Rasmussen poll shows Hoeven leading Dorgan by a stunning 22 points. Byron Dorgan may be among the most at-risk Democrats this year, in an utter surprise given his long service.

Lean GOP Hold (4)

Kentucky -- GOP candidates lead Democratic candidates by 2 to 7 points in a series of possible match-ups to replace embattled Sen. Bunning, according to an August 19th WHAS poll.
Ohio -- Portman leads by 2 to 7 points against possible Democrats in a December 10th Rasmussen poll.
North Carolina -- This goes from a Likely GOP Hold to a Lean GOP Hold. Burr leads in his bid for re-election by 5 to 7 points against possible challengers in December 17th polls from Public Policy Polling and Citivas. Both are partisan polling houses, which I normally ignore, but since I have PPP (a Democratic house) and Citivas (a Republican house) saying almost exactly the same thing, it stands to reason that they are fairly accurate.
Arizona -- This also moves down from Likely GOP Hold to Lean GOP Hold. McCain leads in his re-election bid by 2 points in a
November 20th Rasmussen poll. There are several polls that show him trailing by double digits to Janet Napolitano, but it is highly unlikely that she will run, given her gig at Homeland Security.

Likely GOP HOld (5)

Alaska -- Lisa Murkowski leads by anywhere from 8 to 29 points according to a December 18th Research 2000 poll. Actual opponent will determine if this race is competitive, but she will likely win either way.
Louisiana -- incumbent Vitter leads by 10 points in an October 7th Rasmussen poll.
Florida -- Crist leads by 6 and Rubio leads by 14 in a December 17th Rasmussen poll. It is amazing how as Rubio has attacked Crist, Crist's numbers have fallen not only against Rubio in the primary but by some 20 points in the general election.
(Georgia and Kansas mentioned above)

Likely GOP Pick-Up (1)

Connecticut -- Dodd trails by 6 to 13 points against likely opponents in a December 10th Rasmussen poll, confirming earlier polls.

Safe GOP Hold (7)

Iowa -- moves from a LIkely Hold to a Safe Hold as Charles Grassley leads by 27 points in his re-election bid, according to a November 16th Des Moines Register poll.
(South Dakota, Alabama, Idaho, Oklahoma, South Carolina and Utah mentioned above)

So with all of this movement, what is left when we sort all this out?

Projection: GOP +2 to 4 Seats
GOP Best Case (Win All Leaners): GOP +9 Seats
DEM Best Case (Win All Leaners): DEM +2 Seats

Same old story, even with all those movements -- no path to 51 votes yet for the GOP (this would require a pick-up of 11 seats)

In the House, still projecting a near even split. No significant new polls since my last update -- my next update, I'll relook at the projecting, but for now it is still GOP +41 seats, or a 218-217 majority for the GOP.

Obama Not Dropping Anymore

President Obama's approval polls seem to have leveled out at an approve minus disapprove of 3 to 5 points. The latest couple weeks of tracking is below.

Similarly, his monthly number for December has stabilized in the mid-4's. Much has been made of how his numbers are among the worst of Post-World War II Presidents...and they are. Only Clinton and Reagan had comparably bad numbers at this point in their Presidencies. It's worth noting that all 3 (Obama, Clinton and Reagan) came into office during recessions. It's also worth noting that Clinton and Reagan's parties got whacked in the mid-term elections, but that the Presidents then both went on to easy re-election. We'll see if history repeats itself.

Next Up -- 2009 Year in Review.

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Thursday, December 24, 2009

On To The Conference, Happy Holidays!

Senate Wraps Up, Conference Debate Likely in New Year

The Senate today wrapped up what seemed like an endless string of procedural votes, including filibuster ending votes and points of order with a 60-39 vote on final passage of health reform legislation. This has become the familiar party-line margin by which all of the recent significant votes have occurred.

Congress is now headed to recess for the next couple of weeks (until approximately January 12th) and the President is headed to Hawaii for vacation, so the political news is going to get fairly scarce the next couple of weeks.

When everyone returns, the painful work of reconciling the House and Senate bills will begin. It appears that Speaker Nancy Pelosi has ruled out my recommendation that the House simply adopt the Senate bill as is to avoid another fight for 60 in the Senate as liberal Democrats in the House want a chance to fight for some of the House provisions (the public options, the high-end income tax and the more liberal rules for joining Medicaid.) Social conservatives in the House, led by Bart Stupak, also want an opportunity to fight to include the more conservative House language which totally precludes abortion coverage in federally subsidized plans versus the somewhat more liberal Senate provision which allows the plans to contain abortion coverage, provided the abortion coverage is paid for with individual premiums and not the federal subsidy.

In the end, other than on the abortion issue, the final bill is going to HAVE to look a lot like the Senate bill. The public option has zero chance of survival in the Senate, with Senators Nelson and Lieberman clearly on record opposed. The House bill is also far more expensive, a fact that would potentially scare off additional moderates such as Lincoln and Webb.

The Democrats are talking about the goal of getting a bill to President Obama for signature prior to the State of the Union, which will take place either the last week in January or the first week in February. This seems optimistic, but it all depends on how quickly and how much liberals will be willing to give.

Health care is not done, but a sense of momentum is certainly on the Democrats' side at this point.

Happy Holidays

It's Christmas Eve and hopefully all of you, regardless of you religious or political stripes have time to spend with your families, appreciating what is really important.

As always, I want to thank all of those who will work over the holidays so that the rest of us can enjoy our holiday. Thank you to all our soldiers, police officers and movie theater workers.

I've been digging up hard to find polls on some of the Senate races and I'll update my projections over the holidays.

Thanks for reading and have a great holiday.

Monday, December 21, 2009

As Partisan As They Come in the Senate, 2010 Updates

60-40 to Proceed

It is actually extremely rare that a vote in either house of Congress falls completely along party lines. In my last post, you saw that there hasn't been a single piece of legislation this year that passed strictly along party lines. Even the most contentious bill to date, the stimulus bill, garnered 3 GOP Senators voting in the affirmative, as well as some Democrats in the House voting negative.

But a straight-up, party line vote is what happened last night on the motion to bring the Reid "Manager's Amendment" to the floor. 60-40. All Democrats voting aye, all Republicans voting no (Independents Bernie Sanders and Joe Lieberman, also voted aye, Sanders being a Democrat in everything but name and Joe Lieberman being, well, Joe Lieberman.) And expect those vote totals at least 4 more times between now and Christmas. The remaining steps for the DEM's to move this forward are:
(1) Motion to Invoke Cloture to END Debate on the Reid Amendment (60 votes required)
(2) Adoption of the Reid Amendment (51 votes required)
(3) Motion to Invoke Cloture on the BIll (60 votes required)
(4) Passage of the BIll (51 votes required)

Expect 60-40 votes to abound.

2010 -- More Confirmation of the Same Story Line

Actually a fair amount of polling the last 3 weeks, but very little movement in the key races. Only one change.

In Florida -- Rubio has pulled even with Crist in the primary. If Rubio wins the primary, this is a pick 'em race. Crist holds a double digit lead in the general if he wins. This race moves from Safe GOP Hold down to Likely GOP Hold.

Other races with polls of note but no changes:
Connecticut -- Dodd is down by 13% in the latest poll, his worst margin yet. This one remains a Likely GOP Pick-up.
Illinois -- Giannoulis leads by 3% in the single new poll available I leave this one a Toss-Up for now, but another poll in that range would tilt it back into the blue column.
Pennsylvania -- after months of conflict polling data, the latest Quinnipiac poll shows this one, you guessed it, a dead heat. Specter appears now to be comfortable ahead in the Democratic primary. We'll keep it a Toss-Up.
Delaware -- polls are still split in the likely race between Rep. Mike Castle and Beau Biden, with the latest poll showing Castle with a 2 point lead. We leave it a toss-up.
Missouri -- Carnahan has a 2 point lead in the latest poll. This is the sixth straight poll in this race that shows the Dems with a 1 to 3 point lead. It isn't much, but it is consistent enough to keep this a Lean DEM Pick-up.
Ohio -- a pair of Rasmussen polls shows Republican Portman still ahead in the narrow single digits against both possible Democratic challengers. This remains a Lean GOP Hold.

Also of note:
The Kentucky and Georgia races are still categorized as Lean GOP Holds. This is primarily because of polling last year that showed them up for grabs and no new data since then. Given the general direction of polling in the past year (towards the GOP, away from the DEMs) and the fact that Sen. Bunning is not in the Kentucky race (his massive unpopularity was certainly dragging on the GOP in this race), these seem like races that could be more safely in the GOP column than I have them now. I hope that there will be some kind of polling to give me some direction on these races, but for now, in the absence of new data, I'm leaving them where they are.

This leaves us with:
Safe DEM Hold (7)
Hawaii, Maryland, New York (Schumer), Oregon, Vermont, Washington, Wisconsin

LIkely DEM Hold (4)
California, Indiana, North Carolina, Massachusetts*

* Special election in January

Lean DEM Hold (2)
Arkansas, New York (Gillebrand)

Lean DEM Pick-up (2)
Missouri, New Hampshire

Toss-up -- DEM Controlled (3)
Illinois, Pennsylvania, Delaware

Lean GOP PIck-up (2)
Colorado, Nevada

Likely GOP Pick-Up (1)

Lean GOP Hold (3)
Kentucky, Ohio, Georgia

Likely GOP Hold (8)
North Carolina, Alaska, Arizona, Iowa, Kansas, South Dakota, Louisiana, Florida

Safe GOP Hold (5)
Alabama, Idaho, Oklahoma, South Carolina, Utah

Projection: GOP +1 to 4 Seats
GOP Gets All Leaners: GOP +10 Seats
DEM Gets All Leaners: DEM +4 Seats

The GOP would need to gain 11 seats to win control of the Senate, assuming that Independents Bernie Sanders (VT) and Joe Lieberman (CT) continue to vote for the Democratic leadership. If the GOP were to win 10 seats, the Senate would be split 50/50 and Vice-President Joe Biden would cast the deciding 51st vote for the DEMs.

In the House,
The latest generic polling puts our averages of averages at GOP +3.0%. The span is still wide, with polls varying anywhere from DEM +3% to GOP +7%. At the 3.0% level this would project:

GOP Pick-up of 41 Seats

This would be just enough to put the GOP in the narrowest possible control of the House. This is worth noting as it is the first time that I have projected a 2010 GOP takeover of the House, albeit this one is very close. Time will tell whether this is a trend or just an outlier in the data, but it is certainly good news for the GOP. With control of the House, they could effectively block any Democratic legislation from passage and because tax and spending bills must originate in the House, they could prevent such bills from even being discussed in the Senate.

Now, a 218-217 majority is hardly ironclad control. The reality is that it would throw control of Congress to the most moderate members of the House. And that might not be such a bad thing. But it is proof positive that if President Obama wants to get Health Care Reform and Cap and Trade done, it has to happen with this congress.

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Sunday, December 20, 2009

The Senate Deal: Ben Nelson for Sale, Copenhagen -- Yawn, Bipartisanship Behind the Scenes

A Good Deal for Nebraska, A Bad Day for Principle
As I analyze the Reid "manager's amendment" that contains the deal struck with Sen. Ben Nelson (D-NE) for the all-critical 60th vote to invoke cloture on the Health Care bill, I am astounded. It changes nothing fundamentally relative to the level of spending in the bill (one of Senator Nelson's expressed concerns.) Amazingly, it also changes nothing substantial relative to abortion funding, Nelson's expressed primary concern. In fact, Rep. Bart Stupak, who led the charge in the House to completely prohibit abortion funding, has expressed that the Senate compromise is unacceptable from his perspective.

What is contained in the compromise is a massive giveaway to the state of Nebraska. Nebraska gets better treatment in the bill than any other state, with federal subsidies for insurance coverage above and beyond what the other 49 state receive. This is pretty disgraceful for a guy who claimed to be holding up the bill on principle. Majority Leader Reid, faced with no other path to passage, gave Nelson what he wanted, similar to how he bribed Sen. Mary Landrieu (D-LA) to vote for cloture, although this example is a far bigger giveaway.

These compromises are bad policy, but hardly anything new to get things done in Washington. Anyone remember all the pork giveaways to conservative Republicans to get TARP funded? All those Republicans who opposed a $700 billion bill as too large then voted for a $750 billion bill? Nothing new, but still disappointing.

By my count, the Senate now faces 5 votes before Christmas. The first "test vote" at 1 AM Monday morning will be to bring the Health Care bill back to the floor. There will then be a vote to invoke cloture on the Reid amendment, followed by a vote on passage of that amendment, then a vote on cloture for the final bill and a final vote on the bill. If everything works according to Reid's timetable, the 5th and final vote will take place on Christmas eve.

It appears that the Democrats have the votes now to survive these 5 votes. Things will then turn to the House-Senate negotiations early in the New Year to develop a conference report. The likelihood, in my estimation, is that the more conservative aspects of each bill will survive -- the exchanges in the Senate bill instead of the public option in the House bill, the stricter abortion provision in the House bill versus the looser standard in the Senate bill. Liberals will have to swallow hard and cast a vote for the "best they can get" as this is the only viable path that I see towards passage in the new year.

One liberal, former Vermont Governor and Former DNC Chairman Howard Dean is not playing along with the "best we can get" theory, as he has been all over the media railing against the compromise bill. He has some valid criticisms. As I've said before, the cost containment in the bill is virtually non-existant at this point. It does expand coverage, but there is no question that we will back to the table within a few years dealing with an insolvent Medicare system. I wish that there were much better provisions for cost containment: public/private competition, most favored nation prescription drug pricing, tort reform, etc. But, on balance, expanding coverage to many people who don't have it and backstopping those who do is a good thing. And the bill IS funded, unlike the prescription coverage plan of the Bush years. The bill is a long, long way from perfect or even great, but it is, on balance, better than the status quo.

Copenhagen -- Meaningless Deal

I haven't written before about the Copenhagen conference, so I'll share my thoughts briefly. A non-binding deal is meaningless. Kyoto was binding and still nobody followed it. Climate change is not going to be sparked by international diplomacy, it is going to be sparked by standards imposed by dominant economic powers. This would include Cap and Trade in the U.S. and trade policies that discourage exporting nations such as China from continuing to indiscriminately spew carbon. Cap and Trade will be on the top of the docket whenever Congress gets done with Health Care. You will recall, the House has already passed a Cap and Trade bill and the Senate, which looked earlier this year like a dead end, has shown signs of life, with Sen. Lindsey Graham (R-SC) boldly working across party lines to try to forge a compromise. Clearly, the compromise will be more conservative than the House bill. But it does look like there is at least some chance that something will happen on this front in 2010.

No chance for trade penalties on China for their carbon emissions. Too many T-Bills in the bank account there.

It's Really Been Quite Bi-Partisan...Really!

All the partisan fighting over Health Care reform has once again led the prevailing political wisdom to be that Washington is hopelessly divided on party lines and leaves you with the impression that every bill passes on a party-line vote.

Not so, as it turns out. I've analyzed the 115 laws that President Obama has signed into law and it turns out that we see a surprisingly level of bipartisanship.

First, let me remind you of the measure I use for the bipartisanship of a bill. I take the vote on final passage of the bill in each house of congress and take the absolute value of the percentage of Democrats who vote for it minus the percentage of Republicans who vote for it. The House and Senate are then each weighted 50% in the final ranking. The votes of Independents are ignored as are "Present" votes or absences by members of either party.

To give you an example of how this works, a bill that passes with all Democrats voting for and all Republicans voting against would have an index of 1.000 and be categorized as Completely Partisan. A bill that is approved unanimously would have an index of 0.000 and be categorized as Perfectly Bipartisan. So would a bill that splits both parties evenly, for instance, attracting 51% of the votes of both parties for with 49% of the votes of both parties against. Keep in mind, this is not a measure of the bill's margin of passage, just the extent to which party membership correlated with the vote.

Of the 115 new laws made in the Obama Administration, fully 89 were completely bipartisan, every one of those 89 passing without a single dissenting vote. Now, this paints an overly rosy picture as this includes the naming of 34 federal buildings (giveaway gestures that almost always pass without opposition) and the 4 bills which created commemorative coins or awarded congressional medals (who opposes commemorative coins for the Girl Scouts of America, after all?). The other 51 laws contained provisions that in many cases were important, such as reform the acquisition process for Department of Defense weapons systems to funding the Airport and Airway Trust Fund. They were good laws, but not particularly controversial.

Moving up the scale, I'll list the 26 laws that were not approved without dissent:
Highly Bipartisan Laws (8)

Arnold Palmer Gold Medal -- 0.003
Veterans Health Care Reform and Transparency Act -- 0.003
Extension of Small Business Act Funding -- 0.006
HIV/AIDS Care Expansion Act -- 0.026
Worker, Home Owner and Business Assistance Act -- 0.036
Supplemental Appropriations for Military Operations in Iraq and Afghanistan -- 0.153
Mortgage Foreclosure Prevention Act -- 0.203
Financial Fraud Enforcement Act -- 0.205

Mostly Bipartisan Laws (8)

Credit Card Holder Bill of Rights -- 0.273
Public Lands Management Act -- 0.282
Highway Trust Fund Replenishment -- 0.410
Digital TV Transition Delay -- 0.413
Omnibus Appropriations for Fiscal 2009 -- 0.414
Supplemental Appropriations for Military Operations in Iraq and Afghanistan -- 0.452
Fiscal 2010 Appropriations for Department of Energy and Water Development -- 0.463
Tobacco Regulation and Smoking Prevention Act -- 0.485

Somewhat Bipartisan Laws (6)

Fiscal 2010 Appropriations for Department of Homeland Security -- 0.520
Edward M. Kennedy Serve America Act -- 0.529
Cash for Clunkers Extension -- 0.625
Fiscal 2010 Appropriations for Department of Agriculture, FDA and Rural Development -- 0.666
Fiscal 2010 Appropriations for Department of Defense Construction -- 0.704
Fiscal 2010 Appropriations for Department of Interior (also contained a continuing resolution) -- 0.727

Partisan Laws (2)

Children's Health Insurance Program Expansion -- 0.771
Fiscal 2010 Legislative Branch Appropriations (also contained a continuing resolution) -- 0.838

Highly Partisan Laws (2)

Lilly Ledbetter Fair Pay Act -- 0.945
American Recovery and Reinvestment Act -- 0.950

As you can see from the above, only 2 laws were passed essentially with Democratic support only (the stimulus bill and the fair pay act) and only 2 others failed to attracted substantial numbers of Republicans (the SCHIP expansion and the Legislative Branch Appropriations.) The media coverage of Washington this year, centered first on the stimulus and now on Health Care, both bills which are falling heavily along party lines. But, in the background, lots of good bipartisan work is still happening in Washington.

It's good not to lose perspective on these things...the conflict is sexy, but the bipartisan bills usually have a bigger impact.

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Saturday, December 19, 2009

An 11th Hour Deal?, Plodding Along With the Recovery Act

Health Care Deal, Part 2?

Senator Charles Schumer (D-NY) has announced that a deal has been struck between Senator Ben Nelson (D-NE) and Majority Leader Harry Reid (D-NV) to secure Nelson's vote to invoke cloture on the health care bill. Now, it's understandable if we are all a little skeptical, given that this comes a week after the first "deal" between liberals and moderates was announced, and then promptly criticized by Sen. Joe Liebermand (I-CT) and Nelson as unacceptable.

I get the sense that this time things are different. First of all, Senator Nelson himself was the person with whom the negotiations took place. Secondly the deal appears to deal with the abortion issue, whereas the first "deal" dealt only with a compromise on the public option. I think this deal is the real deal.

Which is not to say that passage is assured. The Democrats could still lose another Senator from the center (Jim Webb being an unofficially undecided vote who apparently was not involved in these negotiations) or from the left (Roland Burris, for instance, has indicated that he might vote down a bill that doesn't have a strong enough public option, although he has moderated his tone in recent weeks.) And the Democrats still have a calendar problem -- it is razor thin to try to even get to a cloture vote by December 24th, and you have to believe that Republicans will continue to use every tactic available to them to slow things down. Today, the Senate is working through the Defense Appropriations Bill (the last regular appropriations bill of the year, at long last), hamstrung by the fact that the previous continuing resolution expired at midnight and non-essentially Defense operations are technically unfunded at the moment (which is okay on a Saturday, but pretty bad come Monday if a bill isn't signed.)

Finally, even assuming Senate passage of the bill, there is still the whole conference much will liberals in the House be willing to give ground to keep Nelson on board?

But, despite the remaining obstacles, Democrats are far closer to passage than I expected them to get this year, assuming this deal is real.

What exactly the deal contains is not yet clear. The Reid "manager's amendment" that makes all these changes is posted online at the link below:

It is almost 400 pages long, so I haven't had time to digest it yet, but I'l provide full analysis as soon as I can.

How Much Does H.R. 1 Matter?

It is the crowning political achievement for the still-young (although looking older) President Barack Obama -- the American Recovery and Reinvestment Act. The $787 billion stimulus bill, the heart of a brutal political fight last winter and spring and the largest economic stimulus ever passed in absolute dollar terms (although certainly FDR had a larger stimulus program relative to the size of the economy), this bill is certainly the most significant legislation signed into law of the 115 bills the President Obama has signed in the past 334 days.

But, does it matter? It was (unwisely) advertised as keeping unemployment below 8% (unemployment stands at 10.0% today, down slightly from last month's high of 10.2%). The number of jobs even its strongest advocates claim to "save" or create is dwarfed by the overall job losses in the economy. And in many ways, the actions under TARP and the massive expansion of the Fed's balance sheet, gobbling up everything from bonds to mortgage-backed securities to keep easy money flowing in the economy, contributed far more money to stabilizing the economy (TARP was $700 billion, the Fed's balance sheet has ballooned to over $2 trillion.)

Finally, the stimulus is now pretty unpopular. People don't tend to be particularly patient where unemployment is concerned (ask George Herbert-Walker Bush, who went from 91% to 38% approval in about a year, thanks to an unemployment rate nowhere near as bad as this one.)

Actions under the stimulus bill have been slow as well. The government will miss my benchmark of having 40% of the funds distributed in the 2009 calendar year. The latest government report, as of December 11th:
Tax Cuts: $92.8 billion paid out of $288 billion authorized (32.2% spent)
Spending: $152.6 billion paid out of $499 billion authorized (30.6% spent)
Total: $245.4 billion spent out of $787 billion authorized (31.2% spent)

A quarter of a trillion dollars is a lot of money to have spent this year, but is a small piece of the $3 trillion or so that all of the sources above add up to that has been pumped into the economy since the start of the financial crisis.

So was the stimulus even worth doing?

Absolutely. As amazed as you might be by this, I actually think the bill looks better in retrospect. The coordinated actions of the federal government, while imperfect, have had a huge impact in staving off a massive depression and spurring positive economic growth in the third quarter (and almost surely the fourth quarter as well.)

(1) TARP for Banks
Without TARP (credit goes to President George W. Bush on this one for alienating the base of his party to do what needed to be done), it is very likely that Citigroup and Bank of America would have gone bankrupt, causing such a severe contraction of credit that we would likely be mired in depression for years. The banks are paying back the money with interest, meaning that on top of saving the economy, the bank-funding portion of TARP is actually turning out to be a good financial investment for the government.

Yes, the final plan looked nothing like what Hank Paulson described to congress when the bill was passed, whereby the government was supposed to buy the bad assets, not invest in the banks and certainly the original approach was better in many ways, but the government quickly determined it was not feasible in the timeline with which they needed to act.

(2) TARP for AIG
This was a bad deal. A big chunk of money was poured into insurance giant AIG ($180 billion in total) and short of a miracle, I see no path to recovering all that money. I have also been highly critical of this funding in the past -- you don't need to bail out the guy insuring the loan if you bail out the guy making the loan. There was a legitimate interest in protecting the stakeholders in other divisions of AIG (seniors who depending on a fixed annuity from AIG for retirement income, for instance), but this could have been accomplished by severing those portions of AIG and providing much smaller levels of funding to keep them afloat.

(3) TARP for the Auto Industry
Okay, so President Bush got this wrong initially, pumping more money into a losing business model. President Obama initially made the same mistake, before realizing that bankruptcy was the ONLY path to survival for GM and Chrysler. These bankruptcies should have come months earlier without the thrown-away federal money, but the structure of providing bridge capital to these companies in exchange for large equity stakes was ultimately the right way to go. Without these actions, two industrial giants would have collapsed entirely, sending manufacturing into a deadly tailspin (you think 20% unemployment in Detroit is bad, try 50%!)

(4) Ben Bernake's Management
Federal Funds rates of 0.25%, the lowest in history have spurred short-term borrowing rates as low as 4% for many consumers and even lower short-term borrowing rates for businesses. Money has been made historically extremely cheap. You think the credit crunch is bad now, try to the same environment with interest rates at 1.5x or 2x this level.

The Fed sopping up other securities to the tune of $2 trillion is another mechanism to inject liquidity into the monetary system. In essence, it amounts to the government printing money and using it to suck up debt. This would be a really bad move in an economy with even moderate inflation, but inflation risk has been extremely low to date.

(5) The Stimulus
While it doesn't look like a ton of money in the grand scheme of 1-4, the stimulus has done several very important things. First, it stabilized state governments, who can't deficit spend in a recession, avoiding massive layoffs of government workers. Second, it has started to provide infrastructure employment, which has a halo effect on economic growth beyond the immediate employment impact of those projects. Third, it has provided support for two key industries, the auto industry and the home-building industry through cleverly designed, highly effective tax subsidizes. Fourth, lest we forget, for the most part, the infrastructure spend is by and large things that NEED to be done anyway. In fact, I would argue that there wasn't ENOUGH investment in roads, bridges, rail and green energy in the bill.

The stimulus is structured to be a slow-burn: stabilizing state governments and providing the tax subsidizes immediately, but putting out the infrastructure spending on a much slower calendar. This is a politically-losing structure, at least in the short-term, but may be the right move in the long-term.

Working together, all these things have staved off disaster. I freely admit that looking out over the abyss, I did not see the magnitude of this crisis. Fortunately, Bernake, Paulson, Geithner and company did and the coordinated effort of the federal government is an example of government actually doing a massive program well.

There is a ton of mess to clean up:
(1) Unwinding all the TARP investments in banks. This has started, but getting all that money back is a slow process.
(2) Unwinding the AIG investment. This could take years as AIG is still in no position to pay.
(3) Unwinding the auto industry investment. GM owns a huge stake in GM (as the controlling owner) and a smaller stake in Chrysler. Unwinding this will take a stock offering that fetches a price enabler the government to recover its money.
(4) Unwinding the Fed balance sheet. This should start immediately, but in a measured way. The risk of inflation is starting to return as the economy sputters back to life. Acting too late on this could have terrible effects on our currency and the value of savings. The indications from the Fed so far is that it may take too long to act.
(5) Returning interest rates to normal levels. When the fourth quarter GDP figures come out, if they continue in the 2-3% growth range, I would argue that slowly bumping up rates should begin immediately. The currently low rates are great for borrowers, but are killing savers and people living off interest income, mostly seniors. They also risk allowing a surge in inflation, which would further destroy individual assets Historical norms put this rate around 3%. Bumping it to 0.5% in the spring wouldn't be so bad, would it? Alas, the Fed seems unlikely to touch rates until at least early 2011, at which point, the risk of inflation may be significant.

I was overcritical of men like Bernake and Geithner. Bernake deserves a second term at the Fed, having, on balance, made mostly the right moves. Geithner, for all his flaws, has done important work to stabilize the economy and deserves to stay on the job.

Here's to a better economy in 2010.

Friday, December 18, 2009

Will President Obama Get His Christmas Wish?, Polls Stabilize, What Are We Going to Do About the Deficit?

Race to 60 -- It's All About Senator Nelson

Amazingly, after months of protracted debate, ugly town halls, tea parties, negotiation, accusations and discussion the fate of health care legislation in the US Senate, one of President Obama's top two domestic priorities (the economy being the other) appears to rest completely in the fate of classically moderate Senator Ben Nelson (D-NE). Sure, there are other variables. Olympia Snowe (R-ME) could jump back in the fold with the public option gone and support passage. Jim Webb (D-VA) could jump ship and torpedo things. Joe Lieberman (I-CT) could get unhappy all of a sudden again. Heck, Robert Byrd (D-WV) is still very ill and could be unable to vote.

But by far the most likely scenario is: 57 Democrats and 2 Independents support the bill, 40 Republicans oppose it, Ben Nelson casts the deciding vote on whether or not to break the filibuster. And he knows it.

Senator Nelson's primary concerns have been #1 abortion and #2 the cost of the bill. My sense is that a favorable CBO opinion could solve #2, but I'm not sure Senator Nelson is in the mood for anything less than absolute victory on #1, which would mean a full extension of the Hyde amendment to any government-subsidized program, essentially barring abortion coverage on subsidized policies. The Democrats will probably have to give him what he wants to get a bill passed.

Meanwhile, the GOP is becoming more brazen with their delay tactics. It looks like we are in for a lot of out loud bill reading as they continue to use every available legislative tactic to delay, torpedo, pick your word, the bill. The GOP is bolstered by polls that the public doesn't support the plan (although, they appear to support almost all of its provisions, in yet another example of the "we don't understand, so we fear" dynamic in American politics) and is already smelling blood in 2010.

My odds on passing a bill by Christmas? 2:1 against. But I'm not taking or placing any bets...the situation is too fluid.

President Obama Stabilizes

The slide in President Obama's approval numbers appears to have been arrested, at least for now. This is a continued pattern of what we have seen in the past 11 months, periods of declining popularity followed by periods of stability. For now, he has stabilized with slightly more people approving of his job performance than disapproving. Honestly, if an election were held today, this means he would probably win. But his slide has been massive since early in his Presidency and he has yet to show any capability to regain "disapprovers" once he has lost them.

The pattern actually looks quite a bit like Bill Clinton's numbers in 1993, which has to strike fear in Democratic hearts as to the potential results of the mid-terms.

Little movement in the monthlies from my last post, but when you stand back and look at the path over the past 11 months, you do get the sense that the President needs to get in better control.

Deficits Galore

Okay, myself and most major economists would give the President a pass on the deficit last fiscal year and this fiscal year. We were in a risky economic situation, which is exactly the time that you should be running large deficits to stimulate the economy. But the budget that passed out of Congress contains huge increases in discretionary spending, entitlements are increasing at massive rates on their own as the baby boomers start to retire and defense spending is likely only to increase as we escalate in Afghanistan. The President doesn't get a free pass in Fiscal 2011, so what should he do?

#1 Let the Bush tax cuts expire. All of them. The tax cuts for those over $250K will no doubt expire, but President Obama has ruled out rolling back the other tax cuts.
#2 Freeze discretionary spending. Probably not going to happen
#3 Accelerate exit from Iraq -- saves big money. Could happen.
#4 Lift the income cap on Social Security taxes. Odds are against, but could happen.
#5 Raise the retirement age for both Medicare and Social Security by 3 years. Zero chance of happening.

These 5 things alone would put us on the path to stability, but as I handicap above, few of them will happen. What is far more likely is very modest deficit reductions based on an improving economy and the piece of the Bush tax cuts that do expire that cause President Obama to declare we are on the right path, when in fact we will still be headed for wreckage.

Times like these make me appreciate the courage of President George Herbert-Walker Bush who did the right thing (raised taxes) even though it infuriated his own party, alienated moderates and probably cost him re-election. He did it because he knew it was best for the country. That's a real leader. Anybody can promise more spending and lower taxes. Courage is making the tough calls to raise taxes and cut spending. And we haven't seen much courage in the past two administrations.

President Clinton also had the courage to raise taxes...on upper income earners, on gasoline. He, combined with a GOP congress that didn't want to give him a dime for social programs, balanced the budget. Pretty powerful stuff. Maybe we'll get to a good dynamic like that in 2010 if the GOP takes back or makes major inroads into the House. The 90s weren't so bad, I'd take a do-over. Heck, I might even vote GOP in 2010 if I don't see a credible, serious deficit reduction plan from President Obama that makes real sacrifices (I'm not holding my breath.)

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Monday, December 14, 2009

What Deal?, Senate Passes the Minibus

The Health Care Deal That Never Was
I must admit I'm baffled. Senator Harry Reid announces a deal between liberals and moderates on the public option. This weekend the house of cards came crashing down as Sen. Ben Nelson (D-NE) expressed reservation, as did Sen. Mary Landrieu (D-LA) and Sen. Joe Lieberman (I-CT) expressed unequivocal outright opposition. All of which begs the question -- how could a deal be struck between liberals and moderates without these three in the room? Just exactly what the heck is going on here?

Liberals are reportedly furious at Lieberman for basically completely ruling out the Medicare buy-in compromise, even in advance of the CBO cost estimate. But should they really be surprised? Lieberman has been outspoken in his opposition to a public option from the get-go, so if he wasn't a part of the deal-making, they have no one the blame but themselves.

Yes, Lieberman is a hypocrite. He campaigned on the public option in 2000 and supported it on camera as recently as 2006. Yes, he is looking like a bit of a narcissist these days as he frequently grabs media attention and conservative love as he lurches to the right (endorsing John McCain, praising Sarah Palin, for war in Iraq and the surge, against the public option), as well as ocassional liberal deal-brokering (the stimulus plan.) But he is hardly an unknown commodity at this point.

Can the Dem's still get a deal? Looks like not with the public option in. This means access but no real mechanism for cost containment. We'll get more people insured, but we'll be having this debate again in a few years when the whole thing is all to unaffordable...just like the much more expensive perscription drug plan (oh wait, we don't talk about that cost.)

$800 billion? Socialism! $600 billion -- That's Just the Biz
Politics are a funny thing. The Senate quietly busted through an attempted GOP filibuster and passed the Minibus spending package on Sunday, the same bill passed by the house last week. It is a $600 billion bill that has thousands of earmarks and that I doubt anyone in congress has actually read (given that it was just written late last week!) So...we can get this pork-laden minibus done in a few days, but health care, a bill of a similar size, but spread over 10 years, instead of 1, we can't get done in 11 months? Heck, the stimulus bill spends more in 3 years than health care will cost in 10. The perscription drug plan passed by a GOP congress costs almost twice as much.

I guess some things just become lightning rods. Back to funding that honey bee research.

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Friday, December 11, 2009

The Sort of Health Care Deal, Dirty Tricks and Bad Government, The Closely Divided Nation, A Tale of Two Tales

Democrats Strike a "Broad Agreement"

You have to give Senator Reid this...he is trying like hell to keep his caucus united behind health care reform. The announcement this week of a "broad agreement" between liberal and moderate Democrats on the public option potentially paves the way for passage of a health care bill from the Senate this year...maybe. Assuming Sen's Lieberman, Webb, Landrieu, Lincoln and Nelson are all on board with the agreement (Lieberman and Nelson being by far the most staunch critic of the public option, Webb and Nelson being the two Senators who have mostly voted with the GOP on recommit motions thus far and Senator Lincoln being among the most vulnerable to attack from the right on this issue in 2010), it settles one of the two key issues that has divided the Democratic caucus.

The agreement, in essence, would dissolve the public option in its present form and replace it with a hybrid system, whereby those 55 to 64 would be able to buy into the Medicare system (in essence, creating a "public option" for them, complete with the accompanying cost controls), while those 54 and under would be able to buy into a program that is managed by the government but provided by a private provider or private providers, similar to the government employees insurance program. It gives the public option liberals the 55 to 64 year old population on the public rolls and gives public option opponents the fact that no new government-run program is created.

The compromise is actually better in my eyes than the original legislation. The public option as originally designed in the Senate bill did little to curb costs as it would only allow the government to negotiate with providers, the same as any insurance company and would likely include only a pool of high-risk individuals, those who couldn't find a deal in the private market. The Medicare compromise allows the government to leverage its power to legislate compensation levels for people in the program and is a much more powerful carrier, since the program already contains basically everyone 65 and up. Providers could, as always refuse to treat people on Medicare, but rejecting providing care for all seniors is worlds different from rejecting providing care for a relatively smaller group of high-risk individuals. As has been the case with Medicare so far, I would guess most providers would play ball, which would mean favorable pricing and therefore cost containment. None of this helps the 54 and under crowd, but I'll take something over nothing.

But, the public option is not the only source of division in the Democratic caucus. The Senate also rejected the amendment offered by Senator Nelson this week that would have strengthened the prohibition of the inclusion of abortion coverage in the health care bill.

The bill, as presently written, prohibits use of government subsidies to pay for abortion coverage, but allows for abortion to be in the overall coverage schemes provided by private insurers, provided the portion of the coverage that covers abortion is funded through the out-of-pocket portion of the premium. In other words, if there is a $500/month health policy and the individual pays $100/month of that premium with the government picking up the rest of the tab, the policy could provide abortion coverage as long as the cost of that coverage is not more than $100/month. Nelson and other anti-abortion advocates (as well as some that favor abortion rights but are wary of funding abortions with federal dollars) object to the provision as currently written, since virtually all policies would have an individual contribution sufficient to fund abortion coverage, meaning that virtually all federally subsidized policies would be free to offer coverage for abortion services.

Senator Nelson's amendment would have expressly prohibited providing abortion coverage for subsidized policies. Essentially, it would require someone wanting abortion coverage to pay for a separate policy to insure abortions, although that could, theoretically come from the same company. It is very similar in language to the House amendment that Bart Stupak successfully pushed through in the House version of the bill. The senate rejected the amendment 54-45, with Republican Senators Susan Collins and Olympia Snowe joining the majority of Democrats to defeat the amendment, which won the support of the remaining Republicans plus 7 Democrats.

Senator Nelson has said that he will not support the final bill with the abortion amendment, so assuming that Reid has agreement with all the Democrats on the public option, he will still need to win over either Nelson or one Republican (presumably Olympia Snowe) to carry the day and get his 60 votes.

Victory is in sight for Reid, but is still not assured. The Democrats would be wise to give ground on the abortion is unlikely that the bill could get back through the House without the provision anyway.

Which brings me to one more point...if the Democrats do get a bill through the Senate, why not vote on that bill in the House unamended and skip the conference committee process? Let me explain...ordinarily when the House and Senate pass differing versions of legislation, a conference committee from the two bodies melds the two bills into a final bill that is then revoted on by both houses. But that is not how it HAS to work. Given that any final bill would have to look essentially the same as the Senate bill, if one passes, why not just have the House adopt the Senate bill as is? It would shorten the process, dodge another tough fight in the Senate and get a bill to the President by year's end (assuming the Senate is able to move something by then, which is far from assured.)

The Senate is taking a break from health care for a few days while the CBO scores the Reid compromise. In the meantime, they are going to take up a truly awful example of:

Bad Government, Plain and Simple

I've written extensively on how fouled up the appropriations process has been this year and ever year in recent memory. It is the middle of December and the majority of agencies still don't have a budget for the fiscal year that started in October, but rather, have been operating on a series of continuing resolutions, which provide short-term extensions of last years budget into this year. So, basically, the departments have been operating tactically, unsure of what longer term projects will be approved and which will not. Not a great practice.

Enter the Minibus. A bill was shoved through the House this week by a 221-202 vote (all Republicans voting "no", joined by 28 Democrats) that would cover appropriations for the Departments of Transportation, Housing and Urban Development, Commerce, Justice, Labor, Health and Human Services, Veterans Affairs and State in one fell swoop, leaving only the Department of Defense budget to be dealt with at a later date. The Senate will likely vote next week, before the present continuing resolution expires on December 18th.

So shouldn't I be happy that Congress is finally moving the ball on appropriations? Hell no! This massive bill was shoved through with almost no debate, with some of the departments not even having an initial bill that was debated in both houses of congress with an opportunity for amendment. The bill was voted on less than 24 hours after it was printed, leaving zero time for public examination of the legislation, which probably contains poor provisions and irresponsible earmarks that we may never even hear about until after it is law.

Yes, finally passing a budget is good. Doing it in the dark rather than in the sunlight is not. There are plenty of working days for congress to do its job before the fiscal year starts. This type of mess happens when they fail to show any type of discipline with the calendar. And one has to wonder if some members don't like it better this way....rammed through bills are easier to cram in pet provisions.

Democrats should be ashamed. Unfortunately, this issue is complex and mundane enough that it will likely garner little coverage or public outcry, as the whole budgeting process as failed to do, just like every year.

On the President, a Closely Divided Nation

It's obvious that they love President Obama in Europe still. The latest Nobel Peace Prize winner (nope, not going to rehash that debate) is a rock star overseas. He used to be a rockstar here. Now he seems all too human. On the question of whether the President is doing well, Americans are sharply divided, and getting closer and closer to even.

President Obama's aggregate approve minus disapprove numbers have tracked below his 7.2% November vote margin every day since November 29th, his first days below this benchmark threshold. This means that his coalition has shrunk since November. He has yet to have a day where his disapproves exceed his approves yet, but judging by the pattern, if he doesn't start getting some good news, it may be just a matter of time.

His monthly averages, with smooth out the bumps, show a decline of almost 4% from his November numbers to December, which would put him on track to have his worst month since August, when angry town halls and tea party protests dominated the news.

The Rest Is Still Unwritten...

The President's declining poll numbers bring me to my central thought about the Obama Presidency thus far...the road has not yet forked. What I mean by that is I can clearly imagine two distinct narratives being told at the mid-terms in November 2010. Here they are:

"A brutal night for the Democrats as the drag of unpopular President Barack Obama leads the Republicans to retake the House of Representatives and make significant inroads into the Democratic majority in the Senate. The President, who has been plagued by persistent double digit unemployment following his failed stimulus package as well as attacks on his ineffectiveness as a leader as he failed to get either health care reform or environmental legislation passed. His foreign policy is seen as an extension of the policy failures of the Bush administration as casualties mount in Afghanistan and Iraq slips back into civil unrest. Many Democrats are now wondering aloud how they elected a man of such little executive experience and what this will all mean for the future of the party."


"A discouraging night for Republicans as they not only fail to make inroads in the House, but lose key seats in the Senate with Democratic wins in Ohio and Missouri. Buoyed by a dropping unemployment rate and a victory on health care, the Democrats now hold the seats to pass legislation virtually at will. President Obama's popularity, at its height, is bolstered by the sense that he is the among the most accomplished first year Presidents in history, having passed not only the most sweeping Health Care reform policy since Lyndon Johnson, but having pulled the country out of the worst economic conditions since the Great Depression, as unemployment falls below 8%. President Obama is also bolstered by strong international support for his policies, which have ended the Iraq war while stabilizing Afghanistan and driving the Taliban into hiding."

Which narrative will we tell? Probably somewhere in between. The point is, we don't really know yet whether the President will get his way on key legislation or whether what he has done on the economy and in the foreign policy arena will work. But the stakes for the performance of the economy, the success of the President's Afghanistan strategy and the fate of Health Care legislation are immense. And not just for the Democrats.

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Saturday, December 5, 2009

2010 Election Updates -- Democrats Still Holding On, At Least for Now

Below are the latest updates for the 2010 election. Let me qualify them by saying that generally speaking, my projections are going to be a lagging indicator, at least until we get heavy into the election season. This is because, while we have a number of tracking polls that release new polling data on President Obama's approval rating every day (Gallup, Rasmussen, etc.), 2010 Senate polls and generic House ballot polls are a little harder to come by. What that means is that to the extent that President Obama's sliding approval ratings impact Senate and House races, we may not see the full effect in these projections for a couple of weeks. As I always do, I want to use real polling data to project results, not a projection on top of a projection. Plus, it is difficult to tell from national Presidential polls what the impact on state-level races will be.

With all of those qualifiers, despite the headwinds the Democrats face, they are actually faring reasonably well, at least in the Senate. Of course, less is at stake in the Senate in 2010 than in the House -- only a little over a third of the seats are up, of course, and to a large extent, the map is favorable to the Democrats, since this is essentially a replay of the 2004 Senate elections, while the Democrats made their large gains in the 2006 and 2008 races, which won't repeat until 2012 and 2014 respectively.

So, here are the latest projections:

2010 Senate

A few changes to report here and they are mixed in direction -- I will report on those changes, as well as other races that do have not changed in projection but have new polling data:
Connecticut -- moves from Lean GOP Pick-up to Likely GOP Pick-up. As improbable as it would have sounded just a year ago, this dark blue state now shows Chris Dodd behind by 10 to 11% in the latest polls. He is in big, big trouble.

Delaware -- moves from Lean GOP Pick-up to Toss-up-- a new Susquehenna poll has Beau Biden up by 5%. Castle (who is running) has led in other recent polls, so this is not enough to tip this race back into the blue column, but certainly puts the outcome back up in the air.

New Hampshire -- moves from Toss-up to Lean DEM Pick-up -- Hodes leads anywhere from 1 to 5% in three new polls. While these leads are small, the breadth and direction of the polling, puts this one back marginally in the blue column.

New York (Gillebrand) -- remains a Lean DEM Hold -- she is anywhere from down 2% to up 5% versus Pataki and way up on Rep. Peter King. If Pataki is in, this is a toss-up, if Pataki is out, this is a safe hold.

Illinois -- remains a toss-up. The race to replace the embattled Sen. Roland Burris, appointed by disgraced ex-Gov. Blago is a dead heat in the last poll we have.

Pennsylvania -- remains a toss-up. Specter is up 5% in one poll, down 2% in another -- still no clear direction in this race.

Missouri -- remains a Lean DEM pick-up -- DEM's are up from 1 to 3% in a variety of polls. This one is razor-close, but is still directionally in the DEM column.

Ohio -- remains a Lean GOP Hold -- Portman is up 3 to 5% in the latest two polls.

Florida -- remains a Safe GOP Hold -- while Crist is taking some heat from the right, he is still heavily favored in the Republican primary and is up 17 to 31% in general election polls. If Crist starts to fall behind in the primary, I will re-evaluate. Republicans would be crazy not to nominate him.

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

Likely DEM Holds (4)
California, Indiana, North Dakota, Massachusetts*
* Special election to be held in January

Lean DEM Holds (2)
Arkansas, New York (Gillebrand)

Lean DEM Pick-ups (2)
Missouri, New Hampshire

Toss-up -- DEM Controlled (3)
Pennsylvania, Illinois, Delaware

Toss-up -- GOP Controlled

Likely GOP Pick-up (1)

Lean GOP Pick-up (2)
Colorado, Nevada

Lean GOP Hold (3)
Kentucky, Georgia, Ohio

Likely GOP Hold (7)
North Carolina, Alaska, Arizona, Iowa, Kansas, South Dakota, Louisiana

Safe GOP Hold (6)
Florida, Alabama, Idaho, Oklahoma, South Dakota, Utah

Which leaves us with a projection of:
GOP Pick-up of 1 to 4 seats (central projection -- GOP +2 seats)

So, depending on the toss-ups, the new Senate would have 54 to 57 Democrats, plus 2 independents. Democrats would lose their filibuster breaking super-majority, but would retain a healthy margin.

The best case scenario for the GOP, that they take all the leaners, would lead to a GOP pick-up of 8 seats, leading to a new Senate with 50 Democrats, 48 Republicans and 2 Independents. This would still ensure Democratic control as the 2 Independents vote with the Democratic caucus and Vice-President Joe Biden is the tie-breaker in the event of a 50/50 split regardless.

In the House,
Generic polls are still all over the place, but I rely on my faith that aggregation produces the best results, reducing the impact of individual poll bias. The averaging shows:
GOP +0.5%

This leads to a projection of: GOP +30 Seats
Republicans would need a gain of 40 seats to regain control of the House. They don't have this kind of margin yet (unless you believe the more favorable polls that have their generic margin greater.) While it may seem kind of odd that an aggregation of polls that shows the GOP getting more votes wouldn't lead to a GOP majority, this has to do with the way the districts are drawn, which is marginally favorable to the Democrats, thanks to their greater control of redistricting after the 2000 census. This is the last election cycle that uses those districts, congressional seats will be reapportioned and redrawn for the 2012 election, following the 2010 census.

At present, the GOP would need to be at about +3% in order to retake the House. Still a tall order, but they are getting a whole lot closer than they were, even a few months ago.

It continues to appear that the GOP has a shot at taking the House in 2010, but little chance of retaking the Senate. Retaking the House would be huge for the GOP as they would essentially have the power to stop all tax and revenue bills, which constitutionally must pass the House before they are even considered in the Senate.

We have a long way to go before the 2010 mid-terms, so a lot could change in either direction. But the mid-terms are shaping up to be a very exciting set of races.

Friday, December 4, 2009

On Job Summits, Employment and Stimulus, President Obama's Shrinking Coalition, Analyzing the Early Senate Health Care Votes, Goldilocks vs. DC

Where Are The Jobs?

President Obama's highly covered and largely window-dressing "jobs summit" with business leaders has come and gone and the basic question on the mind of the population remains the same -- when will we return to a reasonable level of employment?

Why do I call the summit window-dressing? Because I don't need a summit to know when private industry will start hiring. Private industry will start hiring when their leaders believe that hiring a person will increase their bottom lines. Factories hire people when they believe they can sell more goods profitably and need more people to make them. Service industries hire people when they believe they can sell more services and need more people to provide them. Period. This isn't because business is evil, it is simply because businesses exist to make money. Ask yourself this -- if the President asked you to give money to other people for nothing in exchange, would you? If so, assume he's asking and I'll send my address. And businesses are no different.

So why has unemployment remained high? Because productivity in businesses is surging and sales are still somewhat soft. When productivity goes up, I need less people to do the same amount of work and I don't hire people. Businesses learned how to be more efficient in the recession because they had to in order to survive and consequently employment has lagged. This is very typical in a recession and believe it or not, is a good thing for the long run. Higher productivity means higher output and more wealth when businesses do grow by enough to hire.

But all is not bleak on the jobs front. The monthly BLS report this week showed that private payrolls dropped by only 11,000 jobs last month, the smallest decline in two years (since December 2007, to be precise.) 11,000 is basically a wash. A wash doesn't help bring down a double-digit unemployment number, but it does mean, that for the first time in two years, employment is no longer getting worse. We have a huge hole to dig out of, obviously, but this is as bad as it is going to get employment-wise. And that's great news.

The BLS report also showed unemployment dropping from 10.2% to 10.0%, but ignore that number. You aren't really dropping unemployment until employment grows. This drop was all about people dropping out of the workforce, not about people finding jobs. When the job growth number is 308,000 in a month, the amount that would be needed to drop the unemployment rate by 0.2% organically. We still have almost an 8 million job gap to reach a normal unemployment level of 5%.

So what's a government to do? Odd as it sounds, the best policy is probably to stay the course. The stimulus is actually working, having helped to swing GDP growth positive in the third quarter and it appears it will continue in positive territory in the fourth quarter. There is still plenty of stimulus money left...the latest government report shows:
Tax Cuts -- $92.8B out of $288B spent (32.2%)
Spending -- $144.8B out of $499B spent (29.0%)
Total Stimulus -- $237.6B out of $787B spent (30.2%)

So there is still plenty of life left in the stimulus, which is doling out a slow but steady feed into stabilizing the economy.

Of course, political winds are pushing the President to look like he is doing something, so I expect a series of small initiatives -- more unemployment benefit extensions, some small tax credits, some more infrastructure spending. But that, too, will be window dressing.

The economy is slowly recovering, but people are impatient and Democrats are scared. Expect more saber-rattling from the GOP and more jobs bills from the DEMs.

The Shrinking Obama Cult of Personality

When President Obama was elected President, it appeared that the old political order had been broken. Sure, he carried the Gore / Kerry parts of the country. He swept the Northeast, dominated the mid-west and carried the west coast. But he also won states that neither Kerry nor Gore was close in -- Virginia, Indiana, North Carolina. Heck, he was darn close in Montana -- not a lot of old faithful Democrats there.

As the President's poll numbers have slowly slid, I've continued to point out that he had at least maintained the coalition that gave him a 7.2% margin of victory in the national popular vote on election day.

Now, for the first time, that coalition is broken. His numbers have fallen below his vote totals from last November for the past five days. He is still in positive territory, but the recent trend has to scare the White House.

Judging by his monthly trend, we continue to see a pattern: A few months of stability, followed by a few months of decline. This was okay when he was riding high, but he is getting into dangerous territory now. The public is turning and the White House has yet to show an ability to win them back. He still has the Democratic loyalists and some of the Independents, but the Indies appear to be leaving a little every month.

So what does all this mean?

First, Democrats have more and more reason to be scared of a rout in 2010. As goes President Obama, so they will go. Forget all politics is local. Most politics for national offices is national. See 2006 and 2008 if you don't believe me. Updates on my 2010 projections in my next blog.

Second, President Obama doesn't have a lot of capital left to leverage against the scared moderates, like Sen. Blanche Lincoln (D-AR), who is up for re-election next year. This makes getting things like Health Care Reform through the Senate extremely difficult.

Early Health Care Votes

In the elusive search for 60 votes to break a filibuster in the Senate and move a bill forward, we have some early indications of the dividing lines, based on the votes on early amendments. Here is a recap:
(1) Roll Call Vote 355 -- on Sen. Mikulski's (D-MD) amendment to ensure women's preventative services were covered from dollar one in the bill
Vote: 61-39 for
Democrats voting no: Nelson (NE)
Republicans voting aye: Collins (ME), Snowe (Me)

(2) Roll Call Vote 356 -- On Sen. Murkowski's (R-AK) amendment to remove women's preventative services from the list of services that the government health board could provide requirements for
Vote: 59-41 against
Democrats voting aye: Nelson (NE)
Republicans voting no: none

(3) Roll Call Vote 358 -- On Sen. John McCain's (R-AZ) motion to send the bill back to committee
Vote: 58-42 against
Democrats voting aye: Nelson (NE), Webb (VA)
Republicans voting no: none

(4) Role Call Vote 360 -- On Sen. Thune's (R-SD) amendment to strike a number of the provisions in the bill, including the public option
Vote: 51-47 for (note: because of Senate procedural rules, this amendment required 60 votes)
Democrats voting aye: Bayh (IN), Carper (DE), Lincoln (AR), McCaskill (MO), Nelson (NE), Udall (CO), Warner (VA), Webb (VA)
Republicans voting no: none

(5) Role Call Vote 362 -- On Sen. Hatch's (R-UT) motion to send the bill back to committee
Vote: 57-41 against
Democrats voting aye: Nelson (NE), Webb (VA)
Republicans voting no: none

As you can see from the above, the Democrats have their work cut out for them. An outright majority in the Senate appears to oppose the public option in its present form. Two Democrats -- Nelson and Webb, appear to want to ditch the health care debate entirely for now. Only two Republicans, Collins and Snowe, show ANY inclination to break with their party on ANY issue in this debate.

If Harry Reid figures out a way to get to 60 within these constraints, he would indeed be a genius. This bill could still happen, but it appears the only path to success is going to be to ditch the public option (completely or near completely), give in on the abortion issue and find a way to get liberals to accept that as the best that they are going to do.

Stay tuned...

This Porridge is Too Hot and Too Cold

Oh, the pains of a centrist policy in a polarized Washington. Democrats hate the new Afghanistan policy because we are sending more troops. Republicans hate it because we have defined a date to start leaving (at least a soft date.) It seems nobody much likes President Obama's new Afghanistan strategy. Which is, frankly, probably the best endorsement of the policy available.

The good news for the Obama Administration is that there is zero chance that either party will band together to deny him funding for the war. He will get his policy in the Afghanistan war. Like I said before, I just pray he has it right.

Site Update

We had 353 visitors to the site last month, our high water mark for 2009. It only stands to reason that November means elections and elections means visits to prognosticating sites like this one. But thank you sincerely for reading. I hope you find this site interesting and thought-provoking. As always, I welcome your comments and suggestions.

Tuesday, December 1, 2009

President Obama's War

10 months into his Presidency, the war in Afghanistan is President Barack Obama's war. Tonight marked a crucial inflection point in our strategy and in how future history books will be written about the long, protracted war in Afghanistan.

On an emotional note first, I found the speech somewhat flat. Recalling the passion that I felt after September 11th to get the evil that killed thousands of innocent Americans for no reason other than that they were in the wrong building on the wrong day, I thought the President missed an opportunity to provide emotional clarity for why we must be in Afghanistan. He mentioned this history, but his words failed to stir me and he has certainly shown a capability to stir and inspire in the past. He felt almost hurried in his delivery and there were a couple of points where he appeared to audibly trip over his words, perhaps a testament to the late finalization of the speech (word was, he continued to work on it in the hour leading up to its delivery.)

On the content, I feel better about the speech, although far from great. President Obama highlighted the risks of the Taliban and an Al Queda unconstrained. He made clear our goals -- dismantle the power base of these two organizations and build a sustainable security infrastructure in Afghanistan. He made clear that more troops were needed to accomplish this mission. He set a clear timeline for withdrawal.

But the speech was short on the specifics of the strategy. I don't leave hearing the speech with a sense of clarity around HOW these additional troops would help us clear these hurdles. The timeline seemed arbitrary -- why draw down after 18 months? Why not 12 months or 24? Why set a rigid timeline? Shouldn't this all be really clear after the length of his deliberations? Doesn't this sound a bit too much like the vaguely aspirational speeches that Bush used to give about Iraq? What about Pakistan? Can Karzai actually govern outside of Kabul?

The speech was also intensely political at times. There were the thinly veiled swipes at Bush Administration policy, which seem unnecessary at this stage of the game. There was also his reference to the 98-0 vote in the Senate and the 420-1 vote in the House to authorize the war. The message? Fellow Democrats -- we got in this together and we are still in this together.

I certainly believe that our prospects for success in dismantling terrorist networks in Afghanistan and establishing a stable (if only marginally Democratic) government are improved with the higher troop levels. Let's face it -- this is the first time we've really not given the military a shot to win this thing resource-wise before. But victory is still far from assured. And the President will have to have the fortitude to withstand public opinion (increasingly opposed to the war), the scrutiny of his own party (he will find few defenders in the Democratic caucus, except amongst the Joe Lieberman's and Jim Webb's of the world) and the emotional toll of bodies continuing to come back in coffins. I certainly respect him for listening to the moderate voices in his cabinet. I just hope for all of our sakes that we have the strategy to pull this off.

One thing is clear...this is the first issue on which President Obama now completely owns the success or failure. The economy? That was wrecked before he got here. Iraq? He was opposed to getting in and now is getting us out. Health care? We don't have a bill and even if we get one, it won't take effect in large measure until 2013 or 2014.

But this one he owns. If we are in a quagmire at this time next year, it belongs to the President. If Afghanistan is stable, it is to his credit.

You could argue that this was President Obama's first true Presidential moment -- Harry Truman's buck stopped with him tonight.

I pray he has this one right.