Chris Christie - Scandal or Unholy Media Alliance?, What Does Obamacare Success Look Like?

Chris Christie, New Jersey Politician
Just as the narrative was going the way Chris Christie wanted it - a resounding re-election of a relatively conservative Republican in the blue state of New Jersey, bipartisan praise for his efforts around Hurricane Sandy, the national media beginning to talk about him as the presumptive frontrunner for the GOP nomination in 2016, things took an ugly turn.

It started with the Fort Lee bridge scandal.  Christie crony David Wildstein, who had been appointed to a senior role at the Port Authority has been revealed to have intentionally caused traffic jams in Fort Lee by closing lanes on the George Washington Bridge in order to get back at the Democratic Mayor of Fort Lee for not endorsing Christie.

This story has several complex dimensions, so let me lead with some of my major observations:
First, that Wildstein intentionally took action to harm Fort Lee for political reasons is unquestionable based on the communications that have gone public.  It is also unquestionable that Wildstein is a close ally of Christie and that the role in the Port Authority was created for him as a reward for his loyalty.

What is not clear - and may never be clear - is whether Christie himself was aware of the actions being taken at the Port Authority.  Christie had a very well run press conference where he apologized, expressed embarrassment, fired Wildstein and promised full disclosure and reform.  All correct actions.

If all that is ever proven is that Christie appointed Wildstein as a political appointee and that Wildstein went rogue ordering the bridge delays, then it is a small mark against Christie for choosing poor friends, but hardly a major scandal.  That Wildstein was a political crony may be blown up, but the fact is, most political appointees are loyalists to the politicians that appoint them, so this is nothing new.  Some Democrats have argued that Christie created an environment where such actions were viewed as okay - this may or may not be true but it is a pretty thin argument absent any evidence of Christie's involvement in these types of operations.

So, by itself, Fort Lee as it stands will probably not have legs into the spring and summer.

The allegations made this weekend by the Mayor of Hoboken are a different animal.  Her allegation was that she received a direct message from Lt. Governor Kim Guadagno that Hoboken would not receive promised Hurricane Sandy relief unless she supported a private development deal supported by the Governor.

Mayor Zimmer's allegations have not yet been proven, but if true, are much worse than the Fort Lee mess for a few reasons.  One, she is claiming direct involvement of the Governor.  Second, what she alleges would essentially mean the Governor's office was leveraging public funds to support private investments of his friends, a far more serious allegation than simple political payback.  Third, it strikes at the heart of one of Christie's signature achievements, Hurricane Sandy restoration.

We have much to learn - as things stand now, there is no direct evidence of the Governor's involvement in either scandal.  Absent some form of proof, these allegations carry little more weight than conspiracy theories.  But rest assured, every media outlet in the country is looking for such proof.

The most fascinating angle of these stories is the amount of national attention that has been paid to these stories - they have been lead stories for national news outlets across the political spectrum for weeks.  Why?

One of the reasons is journalistically reasonable - that Christie is the presumptive front-runner for the GOP nomination and therefore scandals involving him elevate from local to national news.  But there is something else going on here - an unholy (or holy, depending on your point of view) alliance between the hard right and the hard left.  You see, Christie is a target from both sides of the political spectrum.  The right wing dislikes him because he is a relative political moderate in the party these days and doesn't want to see him get the 2016 nod, favoring more conservative candidates such as Rand Paul or Ted Cruz.  The left dislikes him because he is the presumptive frontrunner for the GOP nod in 2016 and they want to take him down a peg for a potential national election - particularly since they fear his chances of success a lot more than the far right candidates that they feel confident they can beat.  So both MSNBC and Fox News have been pounding away relentlessly at these stories and the more mainstream press has followed suit.

What all of this means for Chris Christie's political future is uncertain.  It all depends on what facts come out about his involvement.  At the very least, it momentarily halts his momentum towards 2016 and opens the air for other credible candidates to emerge.  Somewhere, Jeb Bush is smiling.

Obamacare - How Do You Measure Success?
When President Obama set out to do health insurance reform, his goal was to cover uninsured Americans.  His original goal was to cover everyone through a combination of public plans, including Medicare, an expanded Medicaid, SCHIP and a "public option" on insurance place markets and private plans through a combination of employer provided and privately purchased plans.

It was clear from the outset with the compromises made to secure passage of Obamacare that the bill would not cover 100% of Americans.  First, the public option was taken off the table.  Second, the penalties for not holding insurance were made modest enough that everyone knew some would not participate in the market.  Third, the medicaid expansion was made optional for states, meaning that in Republican-controlled states that chose to reject the expansion, there would be an automatic gap in the market.

So how are we to measure the success of Obamacare?

The internal benchmark set by the Obama administration was the coverage of 7 million people in the marketplaces by the close of open enrollment at the end of this March.  Additionally, 9 million new people would be covered by Medicaid, adding 16 million in total to the rolls of the insured.

By that measure, Obamacare is gathering steam.  Marketplace enrollment through December reached 2.2 million people - short of the internal benchmark set by the Obama administration of 3.0 million by that point in time, but a huge boost from the early months, when major issues with the website plagued enrollment.  Medicaid enrollment is up 3.9 million for the year so far, although it is impossible the way the numbers are reported to tease out how much of that is due specifically to Obamacare and how much is due to other factors like economic changes.

By these benchmarks, Obamacare certainly doesn't look like a disaster - it looks like a piece of governance that is building steam and covering more people.

The initial reactions of sticker shock also seem to be fading.  I did a quick search for insurance policies in Las Vegas, using the Nevada exchange (I picked Nevada because they have an easily searchable exchange, are a mid-sized state and have a sizable number of uninsured, so they are an ideal target of Obamacare), reveal the following unsubsidized rates for a 40-year old non-smoker:
Cheapest "Bronze" Plan - $182.50/mo
Cheapest "Silver" Plan - $237.13/mo
Cheapest "Gold" Plan - $259.97/mo
Cheapest "Platnium" Plan - $320.27/mo

These rates, to me at least, are astoundingly cheap.  The Platnium plan that is $320.27/mo plan provides primary care doctor's visits for $5 apiece and specialist visits for $25 per visit, both with no coinsurance.  Generic prescriptions have a $0 copay, formulary brand name has a mere $15 copay.  The calendar year deductible on the plan is $400 and coinsurance on things like major surgery is only 10% after the deductible, with preventative and prenatal care carrying no deductible and no coinsurance.  Best of all, the out-of-pocket maximum is only $2,000, meaning that beyond the cost of the premium, you are never going to pay more than $2,000 for health care.  Those rates assume that you use the provider network, there are higher rates for going out-of-network, very typical of all insurance policies.

In short, for $320.27/mo, if I lived in Las Vegas, I could get a phenomenally better insurance policy than the very good policy that I current get from my employer.  And keep in mind that if my income is less than 400% of the poverty level, I would get a subsidy against this rate.

By this measure, Obamacare plans seem phenomenally good at cost and benefit.

I picked a middle-of-the-road scenario - a tobacco user would pay a higher premium (although such premiums are capped at a 50% premium to the non-user) and if I lived in a smaller state, there might be less competition and higher prices.  If I'm 60, that same policy shoots up to $680/mo, if I'm 25 it is only $251/mo.

The ultimate success will not be measured by my view of the value of the policies, however.  I think the best metric, which we won't know for some time, is the NET change in the number of uninsured people.  Critics have rightly pointed out that the raw enrollment numbers don't tell us how many people who would have bought insurance anyway from private companies are enrolled.  It also doesn't account for the impact of policy cancellations.

It is WAY too soon to judge the success of Obamacare one way or another.  But we are definitely way past the point where it is about a non-functioning website, which I always believed was a short-term question.

If you like this site, tell your friends.

I'm Back! Let's Get Down to Electing!

First of all, a brief note on my absence from the blogosphere these past couple of months.  My closest friend passed away recently and I have been preoccupied with things that take precedence over discussing the issues of the day.  That is all behind me now (although he will certainly never be forgotten) and it is comforting to come back to a topic that I love: American Politics.

In my absence, I missed most of the budget and debt ceiling fight.  I don't have a lot to add that hasn't already been said - the Republican Party got its head handed to it by having an awful, unachievable strategy.  Their failure in the stand off was about as complete as a failure can be in the political arena.  Having said that, I suspect that the electoral impact of the fight will be far less than most Democrats are hoping.  November 2014 is a LONG time away in political terms and I suspect that this won't be a game-changer with the likely outcome still being Republicans retaining the House and the Democrats narrowly holding the Senate.

I also missed the disaster of an early roll-out of Obamacare.  And it has been a disaster.  0 points for execution.  I will simply make three points around this:
(1) The rollout woes, while important, are not the determination of the success of the program or whether it was a good idea or not.  You can have a great idea poorly executed or an awful idea well executed.  This one is probably more like a mediocre idea poorly executed.
(2) To Republican piling on to the Obamacare solution on premium subsidies, I'm curious - how does Medicare Advantage work?  What about the Paul Ryan budget proposal on Medicaid?  Seems like premium support is pretty much a conservative idea.  A much simpler, liberal idea would have been single-payer.  Single-payer has its own drawbacks, but to bemoan Obamacare's complexity as liberal governance is disingenuous at best and an outright lie at worst.
(3) The "if you like your insurance you can keep it" quote will haunt Obama much more than the poor performance of the website.  There are legitimate reasons under the public-private model advanced in Obamacare to cancel existing policies that don't meet the bill's standard.  But Obama knew this a long time ago.  His promise was an outright lie, and people are likely to remember the lie long after they forget the website hassles.

On to the elections.  Up tonight, we have:
(1) New Jersey Governor - incumbent Republican Chris Christie will absolutely cruise to double digit victory tonight, buoyed by strong support from moderates and independents (including myself.)  The 2016 standard-bearer of sane Republicans (along with possibly Jeb Bush) will have the bully pulpit of the Governor's mansion to speak from.  It will be an epic crushing by a red politican in a blue state.  Take note Republicans - sane candidates like Christie win - wing nuts lose.
Polls close at 8 PM Eastern
Prediction: Christie +24.1% (no, I'm not joking!)

(2) Virginia Governor - Terry McAulife
In what has now become the nation's hottest swing state, one of the ugliest contests between two of the worst candidates for governor in recent memory will draw to a close with former DNC chair Terry McAulife edging out wing nut Republican Ken Cuccinelli (see above about who wins and loses) by solid single digits but failing to win an outright majority as a bunch of fed-up voters dump the two major parties and vote for the Libertarian, Robert Sarvis.  Sarvis is polling in the high single digits, but historically in state races, independents tend to underperform their polling as people break back to the parties late.  It's a non-statistical guess, but I'd wager that Sarvis' election-day support dwindles down to 5-6%.
Polls close at 7 PM Eastern
Prediction: McAulife +6.4%

(3) New York City Mayor
Democrat Bill DeBlasio will cruise to a 30, 40, maybe 45 point victory.  The margin doesn't matter.  The outcome is assured.
Polls close at 9 PM Eastern
Prediction: DeBlasio +41.2%

Lots of other stuff on the ballot including marijuana taxation in Colorado and a minimum wage hike in New Jersey.  I'll keep you posted throughout the night.

20 minutes until the first returns....

Reflections from a Camden City Bus

My life can be a little self-contained.  Sure, I'm well traveled, having visited 6 continents and lived in 7 states.  I've lived in the slow-moving small town south, in the hyper aggressive big city northeast, in the laid back west coast and many places in between.

But most of my life follows a particular pattern.  I hang out in upper-middle class neighborhoods.  I eat at nice restaurants.  I work in an office and I live in a neighborhood where I forget to lock my doors a lot of days and it doesn't worry me when I do.

Sometimes, random events in life disrupt your routines in ways that you don't expect.  And sometimes you learn things from that seemingly random disruption that you would have never learned as a part of your routine.

Such was the case on Saturday night.  My wife and I had just had a fun day in New York City and were riding a comfortable evening BoltBus (a very nice Greyhound bus line in the Northeast US that provides direct transit between major cities, for those of you from elsewhere) back to the New Jersey Philadelphia suburbs.  Late in the ride, it became evident that we had accidentally boarded the wrong bus as we whizzed by our stop at the Cherry Hill Mall (if you aren't form New Jersey, Cherry Hill is the famous destination of Harold & Kumar in Harold & Kumar Go to White Castle, despite the fact that there has never been a White Castle in Cherry Hill.)  The driver informed us that we were on the "express" bus and that he wasn't allowed to stop until 30th street station in New Jersey.

With a car at Cherry Hill Mall and a physical presence at 30th street station in Philadelphia, I quickly scoured the internet for a transportation plan to rectify the situation.  What I found was the 406 bus from Philadelphia to Cherry Hill, which was not a direct route but got me back to the car.  Off we went!

The 406 bus route winds through part of Philadelphia, a large portion of Camden and ultimately on to Cherry Hill.  It goes through some pretty rough urban neighborhoods in Camden and basically the entire ridership of the bus on this particular Saturday night consisted of myself, my wife and a group of Camdenites that didn't own cars.  They were mostly working class or unemployed and all African-American.

"They let Zimmerman off!" proclaimed a heavy-set woman on the bus part way into the ride, sharing the news that broke that day.  I could not have been in a better location to gauge and understand the black community's response to the verdict.

What impressed me on bus 406 was how complex and nuanced that response was.  There were no calls for violence and retaliation.  To be sure, it was a more liberal than average crowd and most disagreed with the verdict, but the responses were rational.  One man said, "I get he might not have been guilty of murder, but he had to be guilty of SOMETHING.  I mean, the 911 operator told him to stop following Treyvon and he didn't."  fair enough.  Another man recalled growing up in rural South Carolina and how they "castle law" there allowed his mother to shoot a crack addict that was breaking into their storage shed without fear of retaliation.  "Okay, that makes sense" said another passenger, "but Treyvon wasn't on Zimmerman's property.  It's different if someone comes on your property."  So it is.  "Why does everyone assume that a black boy in a hoodie is a criminal?" asked one woman, "well, I heard a bunch of black kids had broken into homes nearby" said another man on the bus, "that doesn't make it right!" shot back the woman.  No, it doesn't.

The discussion quickly turned into a broader political discussion and talked turned to Chris Christie.  "Chris Christie cost my wife a ton of money", said a man whose wife was a teacher in the Camden Public Schools, "He raised the fares on this bus!" exclaimed another man, referring to the New Jersey Transit fare hikes that Christie pushed through as part of his push to eliminate the budget gap, his first year in office, "couldn't rich people just afford to pay a little bit more in taxes?"  "Yeah" said another man, "but they'd never pay, they'd just move to Pennsylvania" reflecting a frequent talking point of the GOP in the state.  "I like Christie" declared a woman with a young child, "but only because he is pro-life."

Black voters and the black community in general tend to get painted as a monolith.  They are obviously a voting block that has gone heavily (and increasingly) Democratic in the past two election cycles.  What was reconfirmed for me that night in Camden was that such a view is a dramatic oversimplification.  Black voters, like any group, have a complex set of political leanings that run the gambit of electoral politics.  Their views are varied and nuanced.  Some even vote Republican, but almost none are straight-line liberals.

Perhaps rather than choosing political sides in things like the Treyvon Martin case, both parties would be better served by taking a little time to understand the underlying social nuances in a case like this.  And Republicans would certainly be wise to start inviting them to their party.

By the way, I agree with the man on the bus.  Treyvon Martin does not appear from the evidence to have been guilty of murder.  But he was guilty of SOMETHING, most likely criminally negligent homicide, a less severe felony.  Had the prosecutor charged him with this more appropriate crime, perhaps the outcome would have been different.  Or perhaps not.

If you like this site, tell your friends.

Our Elected Leaders Punt Yet Again On Real Deficit Reduction, Boehner Narrowly Holds On To Speaker Job, Christie Goes Ballistic

The Fiscal Cliff Deal Isn't Much of a Deal at All
I guess there are things that all sides can claim victory in the fiscal cliff "deal" that was negotiated early in the new year, which was primarily a by-product of discussions between Vice President Joe Biden and Senate Minority Leader Mitch McConnell.

For Republicans, they can feel good that for 99.2% of Americans, the tax cuts that President Bush pushed for in 2001 and 2003, that the vast majority of Democrats and even some Republicans opposed at the time, have no become a permanent reality.  They are law forever.  They can also feel good that the military cuts that were part of the sequestration deal last year are now put off, albeit for only two months.  They can also feel good that they will get another bite at the spending apple in short order with the pending fights over the second half Fiscal 2013 budget and the debt ceiling coming up directly.

For Democrats, they can feel good that they successfully raised taxes on the wealthiest 1% (actually the wealthiest 0.8%, to be precise, but you get the point), that they averted the fiscal cliff cuts for domestic programs, albeit for only two weeks, that unemployment insurance was extended for another year, that renewable energy tax credits were extended for another year and that they really didn't have to agree to any spending cuts to get the deal done.

As for me, I don't feel particularly good about any of this.

Let's introduce a reality into the equation.  The deficit last year was $1.128 trillion.  We took in $2.435 trillion in taxes, 46% from individual income taxes, 35% from Social Security and Medicare Taxes, 10% from Corporate Taxes and 9% from the miscellaneous set of other federal taxes that the government collects, such as excise taxes on gasoline, cigarettes, alcohol, permitting costs, etc. We spent $3.563 trillion, 45% on Social Security and Medicare/Medicaid, 23% of Defense and Military expenses, 10% on unemployment and other income security measures (such as subsidized school lunches), 6% on interest on the national debt and 16% on everything else.

So what did the fiscal cliff "deal" do?  It allowed the temporary payroll tax reduction on Social Security to lapse, which effectively boosts Social Security payroll tax income by 19%, since the total tax (including both employer and employee) rises from 10.4% to 12.4%.  This raises about $120B per year in additional revenue, versus the last two years.

The cliff deal also raised income taxes from 35% to 39.6% for individuals making over $400K and married couples making over $450K and raises capital gains and dividend taxes on those individuals from 15% to 20%, as well as capping deductions on those over $200K/$250K.  Collectively, this raises about $60B per year in additional revenue.

So, all else being equal (and it is obviously not because not everything else is static, but everything else is pretty well in balance), we took a $1.128 trillion deficit and solved 16% of it.  On the 2012 basis, this woud give us about $2.615 trillion in revenue, not quite enough money to fund Social Security, Medicare/Medicaid, Defense and interest on the debt, if you cancelled every single other government program (no FAA, no SEC, no EPA, no FDA, no USDA, no OSHA, no federal court system, no power at the White House, etc.)

In other words, this was a totally and grossly insufficient bill to solve the structural problem that we had.

It amazes me that Democrats now accept 99.2% of the Bush tax cuts that they once opposed, and that we have never been able to afford.  It also amazes me that they reject out of hand even the most modest GOP proposals to rain in entitlement spending, such as shifting the chained CPI for Social Security increases, which would save a ton of money over time and make the system much more stable while having only a gradual effect on today's seniors. 

It also astonishes me that the GOP continue to fight for low taxes without a serious, specific proposal on how they would cut spending.  Since today's revenues don't even cover Defense, Entitlements and Interest and they want even lower revenues than today, to be credible to me, they would need to present a budget that makes deep, deep cuts in Defense and Entitlements to even get close to balance.  They have not, as of yet and, in fact, most have strongly opposed defense cuts, while skirting the issue of entitlements.

Let's not forget also the underlying dynamics that make the future budget reality worse.  The population is getting older and health care costs are still rising (albeit the rate of health care inflation has slowed from the pace of the past decade) so entitlement costs will rise faster than revenues.  Interest rates are at 200 year historic lows, meaning that it is highly probable that interest rates and therefore interest expense will rise in the future, especially with a rising federal debt.  There are some positives - unemployment insurance costs are likely to drop as the economy improves along with some other social programs and the wind-down in Afghanistan will save some on the military budget.  But in balance, the trajectory is towards a worse budgetary situation, not a better one.

Both parties to date are taking unserious positions.  There are only four levers to manage our current situation:
(1) Raise Taxes of Some Form in Meaningful, Broad Way
You can't tax the 1% and get us into balance.  To make a meaningful impact on the deficit, you would need to raise taxes on the majority of the population in some form, either in the form of higher income tax rates, higher payroll taxes or a national sales or VAT tax.
(2) Structural Reforms to Entitlements
Higher participation ages, lower benefits, etc.  You have to "bend the curve" on entitlement spending.
(3) Meaningful Cuts to Defense
We spend 5 times the next nearest country (China) on our military.  Would we be unsafe at 3 times their spending?
(4) Default in Some Way Shape or Form
This is a nuclear option that would cause a depression.  There are two ways to do this - either simply don't pay the bills which would be an utter disaster to financial markets that would immediately spark a deep financial and economic crisis or print money to pay the bills (i.e. have the fed buy up and forgive treasury debt),  which would likely spark hyper-inflation.  Neither of those options is at all appealing, even compared to 1-3.

My other disappointment (or maybe I should be happy, since I didn't love the deal) with the cliff deal is that it doesn't really solve anything.  The federal budget still expires March 1st, so there is another, immediate fight over spending.  Sequestration cuts still hit March 1st also.  And, approximately the end of February, the federal government won't be able to pay its bills unless congress increases the debt ceiling.  In other words, get ready for more melodrama, stern rhetoric and down-to-the-wire posturing that solves nothing before another 11th or 12th hour deal that doesn't do nearly enough.

My final disappointment is in President Obama's inability to lead or paint a vision.  He wasn't even a participant in most of the talks that cut the deal.  He has painted no clear vision for how we get where we need to go with the budget and seems to have no sense of urgency about reducing the deficit.  Joe Biden showed far more leadership that the President in this case, and even Biden's leadership was just to cut a deal in the end, not to really solve the problem.

Prepare to be disappointed again in the coming year.

Boehner Holds On With 2 Votes to Spare
John Boehner will be the House Speaker for the next two years, after successfully beating back dissent from about 8% of his caucus.  While there was no Republican actively running against Boehner, a cast of 17 Republicans (excluding Boehner, who did not vote, as is tradition) either cast protest votes, voted "present" or did not vote.  Some were clear protest votes, for the likes of Alan West (who isn't in the House any more as he lost re-election) and Colin Powell (who has never been in the House), some were semi-serious votes, including 3 for Majority Leader Eric Cantor, who many of the far right view as more sympathetic to their cause than the pragmatic Boehner.  Boehner needed an outright majority in order to not force a second ballot on the issue, which required 218 votes.  The 220 he received was sufficient - barely, to keep him with the Speaker's gavel for the next two years.

All of this supports what I have long said about Boehner - he is a conservative but not a wing nut as many think.  He is hemmed in by a caucus that is well outside the mainstream.  The fact that he almost lost his Speakership simply for supporting the deal he did speaks volumes about where the right-wing in the House sits.  Heck, a significant number of House Republicans even opposed the Hurricane Sandy aid package that was finally passed on Friday (more on that in a second.)

My advice to Boehner?  You know you are never going to be the darling of the right wing, so take your re-election as an opportunity to try to go solve the problems.  The hard-liners will hate it, but they already don't support you.  So cement your legacy and get something done.

Chris Christie Lets Loose on the House GOP
The fiscal cliff deal on January 2nd was the last thing the outgoing House of Representatives did before disbanding to make way for the new House, which was sworn in yesterday.  This greatly upset lawmakers from New York and New Jersey, who had been hoping for and believed they had secured agreement for aid for the battered coastal areas impacted by Hurricane Sandy.

Why the House didn't take the issue up before disbanding is inexplicable to me.  Perhaps John Boehner couldn't swallow asking his conservative members to vote on a spending package right on the heels of a painful vote on the fiscal cliff.  But, come on, when did relief for people made homeless by a hurricane become a partisan issue?

Christie was specific, and named names in his criticism, stating:
"There is only one group to blame for the continued suffering of these innocent victims, the House majority and their speaker, John Boehner."

Boehner scrambled to pull a vote together on the bill, with an initial aid package rapidly set for a vote yesterday and the balance to be voted on January 15th.  The initial package passed the House 354-67, with all 67 "no" votes coming from Republicans.  It is shocking to me that there were 67 members of the new House majority willing to vote no on this bill.  The bill passed the Senate, which always seems much more reasonable an bi-partisan, without a single "no" vote.

The initial aid package contained only $9B, the bigger $51B package is to come in the January 15th vote.  Could that package be in serious jeopardy, given the delay and vote on the first bill?  If it is, it would be utter political suicide for the House GOP.  Nothing makes you look like a wing nut like pushing hard to keep tax cuts on capital gains for people making millions of dollars and then opposing federal funds to help people made homeless by a hurricane.

If you like this site, tell your friends.

The Good, The Bad and The Ugly of the RNC

The slickly-produced 3-day Republican National Convention is now done, culminating with Mitt Romney's unexpectedly passionate acceptance speech.  Before action moves to the Democratic National Convention on Monday, I thought I'd reflect on what worked well, what worked poorly and what was just plain ugly at the convention.

The Good (and Very Good)
(1) Condoleezza Rice
Rice gave far and away my favorite speech of the convention.  First, she has a grace and a presence that is seldom seen in political circles.  She spoke from the heart and even declined to use a teleprompter, choosing instead to speak from memory.  Her personal story is compelling and her views on national security, while all (including myself) may not agree, are always stated with intellectual force and thoughtful logic.  She hit the rare duo of giving an intellectual and honest speech and arousing the passion and love of the crowd.

(2) Chris Christie
The night that Christie spoke was also the night of Ann Romney's personal speech about her husband.  Most pundits concluded that Ann Romney's speech was highly effective and that Christie's was mediocre.  Let me go on record and say that I think most pundits are nuts.

Ann Romney's speech may have done something to personalize the sometimes-wooden GOP nominee, but it was largely generic platitudes.  No disrespect to the Romneys, who seem to have a truly loving marriage, but the fact that Ann Romney loves Mitt is hardly a surprise or a differentiating factor, and certainly not something anyone should vote based on.

Christie's speech was pointed and passionate without being caustic (as he has often been accused) or deceiving.  His story of effective governance in New Jersey is almost all true.  His line that "real leaders don't listen to polls, real leaders change polls" will probably be the one line from the 3-day convention that I will remember for a long time and I thought struck a chord with an increasingly cynical electorate.  He represented the future of the GOP well.

(3) The Personal Narratives of Mitt Romney's Life
The stories, told by others, of the personally generous things that Mitt Romney has done to help children with cancer, a single mother with a leaky roof and many others personalized Romney for me in a way that Ann Romney's speech failed to do.  I write a lot about politics and am not particularly prone to being emotionally swayed by politics, much less so by a heavily produced political convention, but I honestly walked away from those speeches believing Mitt to be a good person.

(4) The First Half of Mitt's Acceptance Speech
Mitt was fired up, patriotic and optimistic, possibly the three most important elements a candidate has to possess to be a winner on the national stage.  He was believable and while he took President Obama head on, he did it in a reasonable way, steering clear of ridiculous allegations.  His singular question "If you felt that excitement when you voted for Barack Obama, shouldn't you feel that way now that he's President Obama?" I thought was a simple and fairly damning indictment of the Obama Administration - those who voted for President Obama (myself included) are certainly a heck of a lot less excited about the President now than when he was a candidate.

Poor
(1) The Second Half of Mitt Romney's Speech
When he began to talk policy, Mitt utterly lost me, and I would wager, many independent voters.  When he says a top priority of his will be to "repeal and replace Obamacare", I am still struck with two thoughts.  #1 - Why are you so passionate about repealing a bill that is based on the one you created in your home state and that you wrote in early 2009 in a USA Today editorial should be anational model?  And #2 (and more importantly, once I get past his big flip-flop) - replace it with what?  What is the Romney healthcare plan?

Secondly, lowering taxes, increasing defense spending, protecting existing entitlement benefits for those retired and those slated to retire in the next 10 years and balancing the budget is a mathematical impossibility.  Let me put it more simply - it is a lie.  Mitt Romney is right to call President Obama on the carpet for not halving the deficit as he had promised to do in the 2008 campaign.  But Mitt's plan is far more dishonest.

Finally, his foreign policy indictment of the President was, to me, bizarre.  Lack of support for Israel is a legitimate issue.  But Romney will be more free trade and yet impose sanctions on China?  Does any credible economist or foreign policy expert think these two promises are reasonable?  He would have done more with Iran?  What exactly?  Go to war?  Romney would be wise to steer clear of foreign policy, as I think it is possibly Obama's strongest story.

One small but subtle final point - how can Romney simultaneously claim that we need to shrink the federal payroll but oppose defense cuts, in part, because they would "cost jobs" (his words in his convention speech)?  Does it get any more hypocritical than that?

(2) Paul Ryan
The big idea, serious policy guy told a dishonest set of hackish talking points.  I had some hope when Ryan became the VP pick that we were going to have a serious discussion about the size of government and the best way to reduce the deficit.  After his speech, I think I can kiss that goodbye and officially label him an opportunist, not a serious thinker.

His indictment of Obama for a shuttered GM plant has been ravaged by the fact-checking organizations.  Blaming the President for a factory whose closure was announced during the Bush administration is a joke.

His attack on Obama for reducing Medicare spending is absurd when his own budget contained identical cuts, as well as much deeper ones in Medicaid.  Claiming now that he and Romney are going to be the protector of entitlements is a funny thing to say for someone who has hardly been an advocate for our entitlement programs in the past.

All the points above about Romney's speech apply just as much to Ryan's as well.

The Ugly
 (1) Clint Eastwood
Might have been better to have him record a video or at least get him to agree to stick to a script.  The rambling, off-message rant from Eastwood the night of Romney's big speech was an ugly distraction.  I'm not sure exactly what Eastwood was advocating, but I think he said Romney would have brought troops home from Afghanistan faster?  I almost felt sorry for the guy, he was so lost and incoherent.

Overall, it was a solid convention.  It is too early to have a good poll read on the impact, although the last 2 cycles, convention impacts have been a lot more muted, thanks to the early exposure of 24 hour news networks.  If Romney can get a 2-3% bump out of this, I think his team would consider it to be a success.  Even that will be hard to measure with the DNC happening so close behind.  I will try to get a read on the polls early in the week, before the DNC begins in earnest, to measure the Romney bounce.

If you like this site, tell your friends.

Why Bipartisanship Will Prevail on Financial Reform, Will Supreme Court Nominee Be a Non-Event?, The Remarkable Chris Christie

Why Bipartisan Talks on Financial Reform Will Succeed
We will get a financial reform bill and it will be bipartisan in nature. No, it probably will not be a 100-0 vote in the Senate, but there is a high probability of a 75-25 vote at the end of the day. A far cry from the long, drawn out, bitterly partisan debate over health care, Senate discussions have been downright collegial. So what gives? Several things about the dynamics of the issue and the times create a perfect bipartisan storm.

(1) No one wants to be on the side of the banks
Unlike with health care reform, where Republicans could credibly claim to be defending the 80% of Americans that have good health care, there is not much of a constituency for the financial status quo. Sure, the big banks like it. But Americans are livid about bankers taking huge risks, going broke, taking tax payer money, then paying out big bonuses a year later. Supporting some kind of reform is just good politics.

(2) Failure would be ugly for both sides
Think about it...the banking meltdown is the single biggest crisis that the country has had since September 11th. To go run for re-election saying you voted to uphold the status quo is hardly a winning formula.

(3) Everybody has taken the cash
Both the GOP and the DEMs have taken big bucks from the big banks. Do they really want this to be a campaign issue for their challengers in the fall?

(4) They aren't that far apart
Neither side, apparently, favors fundamentally changing the system by breaking up banks considered "too big to fail" and neither side is unhappy with the status quo. Unlike with health care, where there was a fundamental difference in the views on the proper role of government, the GOP and the DEMs largely agree that more regulation is needed, but not radically more.

A Supreme Court Cakewalk?
All indications point towards moderation and bipartisanship in President Obama's Supreme Court pick as well. The President has been holding bipartisan meetings to go over potential candidates, clearly looking to find someone middle-of-the-road enough to get through without a tough fight.

You know, it's an odd thing. In the aftermath of health care, the GOP was making sounds like it was armageddon for any bipartisanship. Yet, the period following that bill actually appears poised to be one of the most bipartisan in years. Lindsey Graham is even working with the DEMs to craft a compromise immigration reform bill...not that I think that it will actually become a reality this year.

I Admit, I'm Impressed
This blog is devoted to national politics, so I generally try to stay away from discussing local New Jersey politics unless it is a relevant national story. The early days of the administration of Governor Chris Christie (R) certainly fit the bill of a national story, with national conservative commentators such as George Will writing extensively about his administration.

I did not vote for Governor Christie, as frequent readers will know (I supported Independent Tom Daggett in the 2009 election.) We do not see eye-to-eye at all on social issues and in spite of the failure of ex-Governor Jon Corzine, I couldn't bring myself to vote for him.

But, I am impressed with his administration so far. Faced with over a 2 billion dollar current year deficit (9% of New Jersey's total budget) and a projected 10 billion dollar deficit next year (35% of that budget), the new Governor has taken quick, decisive and mostly correct action. He has eliminated state aid for wealthy school districts. He has cut excess services. And now he is taking on the public unions, which have incredibly generous benefit packages which cost astronomically more than their counterparts in the private sector.

Living in one of the school districts that was impacted by the state cuts, it was interesting to watch the local reaction. The school board here responded in part with budget cuts, but in large measure by proposing property tax increases. The voters responded by voting down the property tax increases in municipal elections this week and electing an anti-tax activist to the school board.

If the people behind the tea party movement want to gain real credibility, Christie is a role model. Fiscal responsibility resonates with the public, even in blue New Jersey. People are tired of government waste and high taxes. They just aren't on board with the nutsos running the tea party movement in this country. Moderate pragmatists like Chris Christie should be the role model for the new GOP. Let's hope they pay attention and remember.

If you like this site, tell your friends.

Governor's Race Spotlight, Appropriations Malaise Continues, Countdown to a Healthcare Deadline

Down to the Wire in New Jersey and Virginia
We are 16 days from the elections for governor in New Jersey and Virginia, two races that because of their off-year nature (these are the only two states that elect their governors in odd-numbered years) always receive a disproportionate amount of attention.

So let's check out where we stand;
In, New Jersey, we now have an extremely close race.

I'll break down the numbers a few different ways.

The most commonly used average in political circles is the "RealClearPolitics" or RCP, an average generated by the site realclearpolitics.com which uses a pure average of recent polling data. I personally think there are potential issues with this average as there are vast differences in the polling sample of different polls and therefore their accuracy. In the New Jersey race for instance, there is a current New York Times Poll that sampled 475 voters and a Quinnipiac poll that sampled 1,264 voters. Clearly, in my mind, the Quinnipiac poll should be given more weight because they talked to more people. So my methodology has always been to combine the poll results into one "megapoll" by aggregating the responses. The effect of this is that the Quinnipiac poll has 2.66 times the weight in this example. If the poll numbers are all similar, this is an academic point, but if the poll numbers vary widely, this becomes an important distinction.

The second set of numbers I'm going to look at are with and without polling results from the firm Rasmussen Reports. My practice has always been to look at polling results from all non-partisan polling firms (I exclude results from partisan-affiliated firms such as Strategic Vision for the Republicans and PPP for the Democrats as they inherently run the risk of polling bias). Rasmussen Reports has been a respected, independent polling firm. Their results in the 2008 election were in line with those of other polls as well as relatively close to the final results. However, it is difficult to ignore that their methodology has deviated significantly this year from that of other polling firms. Their Presidential Approval polls have been regularly showing a 10 to 20% gap versus all other Presidential Approval polls. To me, this calls into question the sampling methodology that they are using. Now, we don't have emperical results to validate this -- it is possible that Rasmussen has it right and everyone else has it wrong, but we won't know, at least until we get some election results. So, for completeness, I'm looking at numbers with and without the Rasmussen results.

Finally, we'll look at the numbers both way based on the "median" poll. This theory is to throw out high and low outlier polls until we get to the poll that is "in the center" of the numbers. If there are two polls, in the center, we will take a pure average of the two, as is typical in median calculations.

Averaging all three of these methodologies is how we did the Presidential prediction model last year, which had some pretty darn good results.

So, based on all of this, NJ stands as follows:
All Non-Partisan Polls Without Rasmussen
Weighted Average Christie +1.1% Christie +0.2%
Pure Average (RCP) Christie +0.8% Corzine +0.3%
Median of Polls Christie +1.0% Christie +1.0%
Average of Averages Christie +1.0% Christie +0.3%

So, with or without the Rasmussen polls, any way you slice and dice the data, this one is extremely close. Christie holds a tiny lead over Corzine, but Corzine has been closing fast with a huge spending blitz, and as we've discussed before, New Jersey tends to tilt blue at the very end. This one rates a Toss-Up going into the final 16 days.

As a reminder, I endorse Independent Chris Daggett in this race. His current polling shows as following:
All Non-Partisan Polls Without Rasmussen
Weighted Average 13.6% 15.0%
Pure Average (RCP) 13.6% 15.0%
Median of Polls 14.0% 14.0%
Average of Averages 13.7% 14.3%

Okay, so Daggett is extremely unlikely to win. 14% is a pretty respectable showing against two well-funded, establishment candidates.

In Virginia,

Utilizing the same methodology:
All Non-Partisan Polls Without Rasmussen
Weighted Average McDonnell +8.7% McDonnell +9.3%
Pure Average (RCP) McDonnell +8.8% McDonnell +9.3%
Median of Polls McDonnell +8.5% McDonnell +9.0%
Average of Averages McDonnell +8.7% McDonnell +9.2%

Note that in this case, the Rasmussen Reports poll actually helps Democrat Craigh Deeds.

Any way you cut it, this is a Likely GOP Pick-up.

As a side note, I'd like to endorse moderate Democrat and likely loser Craigh Deeds for the post. Deeds is a reasonable guy who will pursue the same type of centrist policies that the Virginia Democratic Party of Mark Warner, Tim Kahne and Douglas Wilder has long been known for. Regrettably, it does not appear that he will get the change.

I'll keep up with regular updates as the races progress over the next couple of weeks.

Why Is This So Hard and Who Is to Blame?
Job number one of Congress is to pass a budget for the federal government each year. Why else do we have a Congress but to determine the size and spending priorities for the executive branch?

So why can't we seem to get this done in anything resembling an on time fashion?

Okay, I admit that this is better than last year, when the Democratic Congress and President Bush couldn't find any common ground and kicked the can down the road for 6 months until finally passing a pork-laden omnibus spending bill that President Obama signed. But we have a Democratic Congress and a Democratic President. Nobody is even hinting that Obama is picking any fights or threatening any vetos. So why are we almost three weeks into Fiscal 2010 (which started in October) and we still don't have most of a budget?

The chart below shows the current status of all the major appropriations bills:
As you can see, the only bill to actually become law so far has been the legisilative branch appropriations bill, which also contained a continuing resolution, which kept the government open by extending Fiscal 2009 spending policies for one month (through October 31st.) Beyond that, two bills have been passed by congress and are expected to be signed by the President shortly. Still, massive chunks of the federal budget remain an unknown.

So who is to blame? Harry Reid and the Senate Democratic leadership. As you can see from the chart above, the House of Representatives (where all the bills have to start out, per the constitution) passed every major appropriations bill by the end of July. This left all of August and September for the Senate to pass its versions, the conference committees to get together and iron out the differences and both houses to pass the conference report.

The Senate simply didn't get the job done. There are STILL 8 major cabinet departments for which the Senate has not passed a version of appropriations. At this pace, we are sure to have another continuing resolution for some departments while the Senate continues to work at a snails pace.

How sad and incompetent. Can you imagine running a household budget without knowing what your paycheck is going to be? That's what we are asking of the cabinet secretaries at the moment. Think about how many poor decisions, large and small are probably being made as a result of this.

Health Care Looms Large
The wide consensus in Washington is that for health care legislation to happen during this congress, it would need to pass this year, as the session in 2010 will undoubtedly be difficult to navigate with mid-term congressional elections looming large.

Congress has a "targeted adjournment" date of October 30th, meaning that they were originially shooting for October 30th to be the last day that the chambers met for the year. Clearly, this isn't going to happen, as there is a ton of unfinished business to deal with this year. However, even using December 31st as the marker of the end of this year's congress, there isn't much time left to pass a health care bill.

There are 74 days left in the year, during which congress would have to:
(1) Pass health care bills through both the House and the Senate
(2) Iron out differences in a conference committee
(3) Pass the conference report in both houses
(4) Pass all the remaining budgetary items (a ton as you can see from above)

This is to say nothing of dealing with Cap and Trade, which has passed the House, but still must be dealt with in the Senate and a conference report passed, if something is to happen this year.

Recall, that President Obama articulated three goals for this year:
(1) Legislation to stabilize the economy
(2) Universal healthcare
(3) Environmental reform including cap and trade

#1 was accomplished early, at least as the administration defined it (we have and will again debate how effective the stimulus has been), with the American Recovery and Reinvestment Act signed into law on February 17th.

#2 and #3 both seem very elusive. The odds of getting Cap and Trade done this year seem like they are less than 25% and health care still seems a 50/50 shot at best.

The trouble for the Obama Administration is that if the can gets kicked down the road, not only will it be tough to do something in 2010, it will get even harder in 2011 and 2012, where, if my projections hold, he will face a congress that, while still a Democratic majority in both houses, is to the right of the existing congress.

Tall hills to climb. Time for some leadership, Mr. President.

Stimulus Update
To date, $288.5 billion of the stimulus funds have been authorized (57.8%) and $116.0 billion spent (23.2%). The tax cuts, which took effect in May, will automatically roll through December, 2010.

The adminsitration's figures show a ton of jobs "saved or created" by the bill -- almost 16 million. All of this is pretty fuzzy math and I would pay it much credence.

The real measure of the effectiveness of this bill, which was as much an investment and reshaping of the US economy as it was a stimulus bill, will be in the economic growth rates over the next 3 years. We will need time to assess whether the bill worked or not.

President Obama's Promises
Today is day 272 of the Obama Administration. He is 18.6% of the way through his elected term as President.

So how is he coming against the long list of promises he made?

According to the tracking at politifact.com, President Obama had 505 documented promises during the campaign.

Of those 505, he has kept 47 of them, partially kept 12 of them and broken 7 of them. This means that about 13% of his promises have been acted on in some way and giving him half a point for the partially kept promises, a full point for kept promises and no points for broken promises, of the ones he has acted on he is doing what he said 80% of the time.

Not bad. But those were the easy promises. The hard ones are still in the unacted column. And, with almost 19% of his term gone and only 13% of his promises acted on, he is falling significantly behind schedule if he is going to do everything he said in his term.

Of course, you could look at those promises as 8 years worth of promises rather than 4. But that would be rather presumptuous. We are a long way from understanding the dynamics of the 2012 elections yet.

I appreciate you reading. If you like this site, tell your friends.

A Tale of Two Governor's Races, Health Care Finance Comittee Vote Tuesday, Budgeting Rolls On, Don't Call It a Stimulus!, Tracking Site Visits

The Only Legal Left Turn in New Jersey, Right Turns on Red Allowed in Virginia Those who live or visit my home state of New Jersey know full well the odd road design that persists throughout the state. In many places, left turns are simply not allowed on New Jersey roads. In their place, New Jersey has designed a series of "jug-handles", right lane off-ramps that loops around to take traffic to the left.

While left turns are not legal on the roads in my state, they are all the norm in statewide races over the course of the past 20 years. The cycle goes thusly: New Jersians get mad every cycle about high property taxes, government corruption and runaway spending. They flirt with Republican candidates who surge out to double digit leads in early polls. The media swarms around how "blue" New Jersey may elect a right-winger to a major statewide office. Slowly as the election approaches, the Democrat runs a series of ads portraying the Republican as an enemy of education, a token of the social right and an incapable leader. Everyone is suddenly shocked as the polls tighten to break even. Then, on election night, the Democrat wins by a solid margin.

Is the cycle repeating? You betcha.

New polling in the New Jersey Governors race? My average: Christie +1.7%. RCP average: Christie +1.8%. Both the closest the race has been all year.

A Corzine win in November? I sure wouldn't bet against it.

Virginia, by contrast, was one of the first states to legalize right turns on red. And right turns in politics are the norm, although the state has certainly had a purplish hue of late, with wins by Barack Obama, Mark Warner, Tim Kahne and Jim Webb as proof of a new, sudden, Democratic dominance.

It is not to be this year. The latest in the Governor's race there? My average: McDonnell +9.6%. RCP Average: McDonnell +8.5%.

Put this one in the bank for the GOP. Deeds is toast, barring a major, late-breaking scandal.

The Baucus Bill -- It Saves Money and Will Get a Vote on Tuesday Maybe Max Baucus is crazy like a fox. After being scorned by the left for dropping a public option and shunned by the right, who universally turned their back on Baucus' compromise Health Care proposal, it may ultimately be proven that he has successfully threaded the needle to navigate a health care bill out of committee.

The CBO analysis of the amended Baucus bill gave it two major talking points: it's new expenditures are well below the $900 billion over 10 years that President Obama had set as a target in his address to the nation. And, perhaps more importantly, the CBO projects that the Baucus bill will REDUCE the deficit by $80 billion over that time period while covering 94% of Americans.

Now will these points cause Republicans en masse to endorse the bill? Absolutely not. There are 1, maybe 2 Republicans in the Senate that appear "gettable", our favorite moderate Senators from Maine, Olympia Snowe and Susan Collins. But it does give cover for the 58 Democrats and 2 Independents to support the bill with less fear of reprecussion about runaway spending.

Now, this debate is obviously still far from over. Assuming the bill survives the committee vote (I predict it will pass with all Democrats voting "aye" and Sen. Snowe joining but no other Republicans), it will have to be "melded" with the other bills coming out of the various Senate comittees and then brought to the floor where it will be ammended, attacked and fillibustered. But make no mistake about it, this is a big step towards getting a bill through the Senate.

No word on when a bill will make it to the House floor, although Speaker Pelosi still says "soon", whatever that means.

Still Working Through a Budget
The Senate and to a lesser extent the House and the conference committees continue to slowly make progress on appropriations. The latest bill to move completely through the congress, the Agriculture bill, passed in a slightly less partisan fashion (although still not particularly bi-partisan) than the first bill, the Legislative Branch appropriations bill.

The meat of the spend (Defense, DOD/DOE Construction, etc.) are still moving through the process. I'd be hopeful that congress gets done by the time the first continuing resolution expires October 31st, but given the pace so far, I'm not counting on it.
A Stealth Stimulus?
The Obama Administration is walking a tightrope on the stimulus. On the one hand, the White House is feeling the heat of needing to show more progress on job creation. On the other hand, proposing a second stimulus would be tantamount to admitting that the first stimulus was either a failure or insufficient, something the President has been unwilling to do.

So what is the White House doing? Quietly proposing small "stimulating" activities -- continuing to extend unemployment benefits, extended the first-time home buyer credit. This kind of small ball stimulus is a play straight out of the Clinton playbook -- do small, managable initiatives that you can tout the success of if conditions improve and are small enough not to draw public outrage if they fail. It is, frankly, a very un-Obama strategy, as the President has thus far shown a preference for the big, bold and splashy. But it might be a wise move until unemployment starts dropping.

Extending unemployment has hit a snag, however, as Senators from states with higher unemployment rates argue with Senators from states with lower unemployment rates. The key issue is whether all unemployment benefits should be extended for a shorter period of time or benefits in states with high rates be extended for a shorter period of time. Obviously which state you are in drives your opinion there.

Afghanisoon
I've received a number of e-mails on my relative lack of coverage of the debate within the White House around the strategy in Afghanistan. I HAVE written previously about the choices facing President Obama and the need to commit, one way or another, to a clear strategy of either "all-in" or "all-out". I don't really have a lot more to say on the topic until the President reaches decision, which I will critique in full. Two options, Mr. President, you need to choose one.

Who's Reading This?
1,581 people since February, according to the tracking. I initiated tracking of site visitors in late January, which was largely just as the political season was slowing down, post-innauguration. From there, the number of visitors held relatively constant from February-May, spiked up in June when I did some advertising on electoral-vote.com (still one of the best political sites on the web) and has slowly declined since then, to a low of 140 visitors in September.
So is the readership drying up for this site? Not really. It's the political slow season, I haven't advertised, and as you can see from the green line, a lot of the decline has been driven by my posting less as I have been busy with the business of life and traveling a lot.

For those of you who read frequently, thanks for reading. And let people know about us. There is never a charge and I try very hard to bring you analysis that you won't find anywhere else on the web, at any price. From innovative poll-aggregation techniques (which I believe are provably more accurate than sites like realclearpolitics) to tracking of the budgeting process (which is scarcely mentioned on many political sites) to commentary, I think people will like what they find here, regardless of their political stripes.

As always, I welcome your thoughts and suggestions.

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.

If you like this site, tell your friends.

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?

If you like this site, tell your friends.

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 recovery.gov:
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.

If you like this site, tell your friends.