Showing posts with label Appropriations Bill. Show all posts
Showing posts with label Appropriations Bill. Show all posts

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 issue...it 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."

or

"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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Sunday, November 8, 2009

The Next Year in Politics

The 2009/2010 Schedule
The 2009 elections are now behind us and there are a mere 359 days until election day 2010. There is a heck of a lot of unfinished business in congress as well as a lot of mid-term primaries and campaigning that will commence shortly.

Let's take a look at the legislative calendar first.

There are 4 major categories of legislation that the congress will need to deal with in the next 359 days:

(1) Fiscal 2010 Appropriations

The status of Fiscal 2010 appropriations is below. The House finished its work on preliminary bills in late July (as it is supposed to.) Many of the bills have been slowly slogging through the Senate, which has been very slow to follow. Of the 17 major departments and categories requiring annual appropriation:
* 6 have been signed into law
* 5 have passed the House and the Senate and await work from a conference committee
* 6 have only had a version passed by the House with the Senate yet to act



The current continuing resolution (the second one passed) allows the 11 departments who are not yet funded to continue operating under Fiscal 2009 policies until December 18th, therefore this is the new "deadline" for congress to act on the remaining pieces of legislation. Of course, congress can always pass another continuing resolution and keep kicking the can down the road.

(2) Cap and Trade
The House has already passed a cap and trade bill, the Senate has been bogged down in various committees trying to construct something that could get 60 votes. There are recent signs of life and compromise on this bill, with Sen. Lindsey Graham (R-SC) helping to craft a compromise that would bring along moderate members of teh GOP. Clearly whatever clears the Senate will be far more conservative than the bill that passed the House, but the President has some hope of getting something that fulfills this domestic policy priority passed in the next 3 or 4 months.

(3) Universal Health Care
Again, et tu, Harry Reid? The House on Saturday passed its sweeping, trillion-dollar bill. The Senate has no clear path to a 60-vote supermajority, although clearly it is going to require a much more conservative approach than the House. Reverting to a "trigger mechanism" is likely as are other concessions to centrists Lieberman, Snowe and Nelson. If those three get on board with a bill, it will pass. If they oppose it, it will get killed by the a "super minority" of 41+ votes.

(4) Fiscal 2011 Appropriations
In all my writing about Fiscal 2010, I should remind everyone that we are scarcely more than 10 months away from the start of Fiscal 2011 and that the House really needs to start taking up the 2011 bills by June or so. There will be a strong incentive for Democrats to get appropriations passed on time this year, since the incoming congress in 2011 seems highly likely to be more conservative than the outgoing one in 2010.

(5) Other Domestic Policy Priorities
Remember immigration?
How about Gays in the Military?
Entitlement reform? (yeah, right)
If we are going to add any new domestic policy priorities, it has to happen in a narrow window.

So how much time is left to do all of this?
Well..
Congress takes a break in November for Thanksgiving, in December and January for Christmas and New Year's, extended breaks in the spring and summer for district work periods and holidays and...let's face it, EVERYONE on both sides of the aisle wants to get home by next August to campaign for re-election.

So the window is fairly narrow.

The House clearly won't be the problem -- both the rules in the House and the nature of the Democratic majority make the House by far the easier of the two bodies to get legislation through. The Senate, as it usually is, will be the bottleneck. Stay tuned to see how things play out.

Election 2010

Don't kid yourself, the 2010 elections are upon us. Let's look first at the Senate.
Since my last update there has not been a ton of polling as pollsters had focused heavily on the 2009 races. Therefore, there are no changes to my projections. As a starting point, there are 39 Democrats, 22 Republicans and 2 Independents who are not up for re-election and will be returning to the Senate in 2011.

In addition, there are 7 Democratic seats that I consider very safe:
Hawaii, Maryland, New York (Schumer), Oregon, Vermont, Washington and Wisconsin

There are also 6 GOP seats that I consider very safe:
Florida, Alabama, Idaho, Oklahoma, South Carolina and Utah

Add these in and you have 46 Democratic seats, 28 GOP seats and 2 Independent seats that are either guaranteed or highly unlikely to change hands over the course of the next year.

You can see from this the challenge the GOP will face, even in a pro-GOP year. With 48 Democratic or Democratic caucusing (Independents Lieberman and Sanders) seats basically out of play, trying to get to 51 will be very difficult.

The next category, the Likely Holds -- seats where one party is ahead by 10%+ bring further clarity.

They include 4 Democratic seats:
California, Indiana, North Dakota and Massachusetts*
* Special election schedule for January

And 6 GOP seats:
Alaska, Arizona, Iowa, Kansas, South Dakota, Louisiana

Factoring in these seats, we have:
50 Democrats, 34 GOP seats and 2 Independent seats that are likely to return.

Which leaves us with 14 races likely to be hotly contested:
Lean Democratic Hold (2) -- New York (Gillebrand)and Arkansas (Lincoln)
Lean Democratic Pick-up (1) -- Missouri (Bond's vacant seat)
Toss-up (4) -- Illinois (Obama/Burris open seat), Pennsylvania (Specter), New Hampshire (Gregg open seat), Ohio (Voinovich open seat)
Lean GOP Pick-up (4) -- Colorado (Bennett), Delaware (Biden/Kaufmann open seat), Connecticut (Dodd) and Nevada (Reid)
Lean GOP Hold (3) -- Kentucky (Bunning open seat), North Carolina (Burr) and Georgia (Isakson)

So my current projection, if we split the toss-ups evenly, gives us 55 Democrats, 43 Republicans and 2 Independents. If the GOP sweeps the toss-ups, that gets them to 45 seats. In their best-case scenario, where they sweep the toss-ups and take all the leaners (which is tough, but not inconceivable), they get to 48. They don't get to 51 votes (what they would need for the majority, with Vice President Joe Biden holding the tie-breaking vote if it hits 50/50) under any scenario that I can envision. If they were somehow to bust Democratic double-digit leads in the "likely hold" seats for the DEMs, they could get to 52, but that would require beating Evan Bayh in Indiana, Barbara Boxer in California, winning a special election in Massachusetts AND beating Byron Dorgan in North Carolina. Every single one of these events seems highly unlikely.

On the House side, all 435 seats are up, so the outcome has much more potential to shift. Current aggregated generic polling has the Democrats at +3% (although polling continues to vary widely depending on the poll you believe), short of the 7% they were polling going into 2008 or the 10% that they actually took the congressional vote by in 2008. These numbers would imply a GOP pick-up of 15 to 17 seats, short of what they would need to gain a majority by a significant amount, but a good pick-up for a mid-term. These numbers could shift dramatically if President Obama's poll numbers continue to fall.

Ironically, the Blue Dogs that have been pushing for more moderate policies and generally causing the Democratic leadership pain are the ones most at risk. That's the weird thing about the structure of House races -- the moderate seats are the ones that change hands in swing years.

I'll be with you every step of the way, tracking the races. It's going to be a fun year for elections as obviously much more is at stake than in 2009.

Some Side Notes

Based on 2009 election results, where Rasmussen was indeed more accurate than the majority of other polls, I will include their polling at full weight going forward, until empirical evidence suggest that I shouldn't.

Recovey.gov reports that as of last week, $123.5 billion in spending and $83.8 billion in tax cuts have been paid out as a result of the stimulus or about 26.3% of the bill's total reach. Given that we have lost 7 million jobs since the start of the recession and the total claim of the stimulus bill was to attempt to "save or create" (whatever that means) 3 million jobs, there is some credence to liberals like Thomas Friedman who feel we are drastically under stimulating. But the political reality is that there is no will to do more, at least explicitly. Small scale moves like extending unemployment benefits again (which the President signed into law this week) or small projects embedded into appropriations bills (of which there are plenty) may happen. Perhaps the Cap and Trade bill would be a good time to include a bunch of infrastructure spending to upgrade our electrical grid and build green power? It might accomplish two goals at once...

Politifact.com's latest grading of the President's promise keeping, shows of the 513 promises that it is tracking:
52 have been kept
14 compromised (half-kept)
7 broken
440 to be acted on (in the works, stalled or no action)

So, the President has acted on 14.2% of his promises. Of those he has acted on, he has been true to his work 80.8% of the time. His term is 20% over, so he is obviously behind schedule if he is going to do everything he promised. But his consistency of approach is actually pretty good compared to history.

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Friday, October 30, 2009

Latest Calls for Election Day, Finally Primetime for Health Care, The Middle Path on Afghanistan?, More Can Kicking, Presidential Approval

New Jersey, Virginia & New York-23
I will make my final projections in the 3 major November races on Monday. I don't project "ties" in my predictions, so at this point, I've eliminated the toss-up category -- every race will have a prediction, however close it is. As I still don't know what to do with Rasmussen polling data, I've elected to average the "Rasmussen" and "non-Rasmussen" averages, essentially giving the Rasmussen polling 50% weight. This is a departure from my Presidential Approval tracking where Rasmussen is given full weighting. I will make future calls on inclusion or exclusion of Rasmussen polls based on their accuracy in predicting these races. As always, polls sponsored by partisan groups are excluded from the analysis. For prediction purposes, only polls conducted within the past 7 days are included.

I have not been covering the New York mayoral races, as I generally cover only races for federal offices (House, Senate, the President) and Governor's races, but suffice it to say that Mayor Bloomberg appears to be extremely safe for a third term.

Let's get down to the races I'm covering:
New Jersey
Including Rasmussen
Weighted Average: Corzine +0.5%
Unweighted Average: Even
Median: Christie +0.5%
Average of Averages: Even

Excluding Rasmussen
Weighted Average: Corzine +1.3%
Unweighted Average: Corzine +0.6%
Median: Even
Average of Averages: Corzine +0.6%

My Projection: Lean DEM Hold, Corzine +0.3%
This one is ever-so-close and will depend on many factors: Democratic turn-out, the Daggett factor and late-breaking undecideds. It could obviously move in either direction in the last few days. The Corzine surge appears to have died out for now and we have settled in at about as close as they come.

Virginia
Including Rasmussen
Weighted Average: McDonnell +13.7%
Unweighted Average: McDonnell +14.3%
Median: McDonnell +14.0%
Average of Averages: McDonnell +14.0%

Excluding Rasmussen
Weighted Average: McDonnell +13.9%
Unweighted Average: McDonnell +14.5%
Median: McDonnell +15.5%
Average of Averages: McDonnell +14.6%

My Projection: Likely GOP Pick-up, McDonnell +14.3%

This one isn't close -- not even remotely. The GOP is back in Virginia. McDonnell beats Deeds.

New York-23
I like an adequate polling base to make a statistical projection, so I will share what is available. The one non-partisan poll conducted in the past week, a Research 2000 poll, showed Owens, the Democrat at 33%, Hoffman, the upstart Conservative party candidate at 32%, and Scozzofava, the "official" GOP candidate at 21%.

In the R2000 poll, Hoffman has gained 9 points in the past week, picking up almost all of them from Scozzofava after receiving high-profile endorsements from the likes of former Alaska Governor Sarah Palin and current Minnesota Governor Tim Pawlenty.

This is a race Hoffman SHOULD win. Owens is stuck in the low 30s and the only way he can hold on to win is if Hoffman and Scozzofava more or less split the 60%+ of voters who intend to vote for some sort of Republican and Conservative.

In spite of the one non-partisan poll showing Owens in the lead,

My Prediction: Lean Conservative Pick-up

Showtime on Health Care Reform
With the unveiling of the House version of Health Care reform by Speaker Nancy Pelosi and the implicit promise that it will hit the floor sometime late next week, after months and months of debate, town halls, hand wringing, Blue Dogs, liberals, Republicans, lobbyists, speeches and the like, it is FINALLY showtime.

The Pelosi bill is more liberal than the proposed Reid bill in the Senate, including a public option without an opt-out provision for individual states, but is less liberal than those on the left had hoped, allowing only for the public option to negotiate with providers versus perscribing that reimbursement rates be tied to Medicaid.

Many issues remain unresolved in the House version: what kind of public options survives, what to do about abortion coverage opposed by a group of pro-life Democrats (as well as Republicans), etc. But it appears highly likely that some kind of reform will pass the House.

The path through the Senate continues to be far less clear. It is obvious that moderate Republican Senator Olympia Snowe is not on board with the opt-out public option, although she might support a "trigger mechanism" for a future public option. Independent Joe Lieberman has agreed to vote to begin debate in the Senate, but has threatened to support a fillibuster if the public option isn't pulled. As no other Republican has indicated any inclination to support the bill, the Democrats will need one of those two, along with moderate Democratic Senator Ben Nelson in order to pass a bill.

Clearly Harry Reid doesn't have this all figured out yet and the plan appears to be to let things develop on the Senate floor, which will likely lead to some high drama.

I'll be tuned in, bag of popcorn in hand when the Senate debate finally begins. No word yet on when this hits the Senate floor, although it would be logical for them to follow the House, where Democrats should have an easier (although not easy) go of it.

More Than 0, Less Than 40K?
Inside reports out of the Obama Administration indicate that the President is leaning towards sending additional troops to Afghanistan, but something less than the 40,000 requested by General Stanley McChrystal. This is not too surprising, given the history of the President's rhetoric on the subject..."war of necessity" and all, but what is still not clear to me is what the
mission objective will be for those additional troops.

I hope the President decides soon (taking your time is fine, but this is getting ridiculous) and that whatever he decides that he articulates a clear objective for the troops over there. We owe our brave soliders that.

Another Continuing Resolution
The federal government will keep its doors open until December 18th, assuming the President, today or tomorrow, signs the Interior Department appropriations bill. The conference report on that bill had another continuing resolution tacked on to it which gives the vast swath of agencies (see below) that still don't have a budget for the year, the capability to continue operating for another 7 weeks.

As the Senate has not yet even taken up several of the appropriations bill, we may again get deep into the budget year before the Fiscal 2010, which started October 1st, gets settled. It also appears likely, given the delay, that several of those bills will be combined into a so called "minibus" appropriations bill covering multiple agencies.

Think having a State and Defense department budget might be important during the middle of two wars? Apparently congress doesn't.

President Obama -- Scraping the Lows
I don't want to overplay a one-day drop, but today President Obama hit his second-lowest aggregate polling of his Presidency at an Approve minus Disapprove of +8.8% (his all-time low was on September 11th, when he was at +8.7%.) Still just slightly better than his November vote total of +7.2%, but his numbers took a turn down in the past week. Whether it is a bump in the road or a start of a new trend remains to be seen.


The President's monthly numbers don't show the same decline, primarily because he actually bumped up in approval early in the month before dropping late. October is almost over, so these won't change much...we'll see how November shapes up.


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Friday, October 23, 2009

Crunch Time in NJ & VA, Why Hate Crime Laws Are Bad for Democracy, Obama Approval and Appropriations Updates

Down to the Wire in NJ and VA -- One Toss-up, One Almost-Sure GOP Gain
As the campaigns wind down in a flurry of ad spending, we are getting a clearer picture of the two Governor's races this November: New Jersey still looks like a down-to-the-wire Democratic Hold, Virginia a sure-thing GOP pick-up.

Let's look at the numbers:
New Jersey
Including Rasmussen (Excluding Rasussen)
Weighted Average of Polls = Christie +0.4% (Corzine +0.2%)
Unweighted Average of Polls = Christie +0.2% (Corzine +0.4%)
Median of Polls = Christie +1.0% (TIED)
Average of All Averages = Christie +0.5% (Corzine +0.2%)

Anyway you dice this one, this is still damn close. My only reason for continuing to predict a Corzine hold is my sense of history in New Jersey. Maybe it will hold this time, maybe it won't. Officially, this is still a toss-up.

Virginia
Including Rasmussen (Excluding Rasussen)
Weighted Average of Polls = McDonnell +11.6% (McDonnell +13.6%)
Unweighted Average of Polls = McDonnell +12.0% (McDonnell +13.7%)
Median of Polls = McDonnell +11.0% (McDonnell +14.0%)
Average of All Averages = McDonnell +11.5% (McDonnell +13.8%)

Craigh Deeds is toast. Mark this a Likely GOP Pick-up.

Hate Crime Laws Are Un-American
Long-time readers of this blog know that I am a tireless advocate for the rights of LGBT Americans (that's Lesbian, Gay, Bisexual and Transgendered for those of you less familiar with the group.) I have called the ban on gays in the military "the worst law in the land". I've forcefully advocated for the right of marriage for gay couples. I've argued for increased employment protections for LGBT's.

So it may surpise many of you to learn that I fervently oppose the hate crime measure attached to the Department of Defense construction appropriations bill which makes crimes against gay people a hate crime.

It is not because I in any way shape or form advocate, appreciate or sympathize with violence against LGBT's. Attacking someone for their sexual orientation is abhorant and if there is a god, I hope there is a special place in hell reserved for those who commit such crimes.

Having said this, ALL hate crime laws are dangerous, on face.

Let's consider what exactly the laws do. They separate crimes such as assualt and murder into multiple categories of punishment. The severity of that punishment is based on your motivation to commit the crime -- that is, what we believe was in your mind and motivated you to commit the crime. As evidence of what we think is in your mind, we take your stated biases, your words as evidence of your higher order crime.

Once we start punishing crimes based on what people THINK veruss what they DO, we are all in trouble. Who decides what thoughts are motivators deserving of higher punishment and which ones deserve only the ordinary punishment?

Attacking a person for being gay is obviously wrong. But attacking people without provocation is always wrong. The nature of the punishment should depend on the severity of the crime, period. What you were thinking has nothing to do with it.

Presidential Approval -- Still About the Same
In a consistent theme of the past few weeks, President Barack Obama's approvals continue to hover just above his election result in November. The country is just about the same amount divided it was back then. Conservatives hate his policies, liberals, for the most part, approve of them. Moderates are split. Same as 2000, same as 2004, same as 2008.


On a monthly basis, President Obama continues to show more or less constant over the past 3 months. He still has some political capital left, but no longer inspires any fear in the GOP, which has continued to be emboldened by the prospect that Obama is not immune to public disapproval.


Ever-So-Slight Progress on Appropriations
The President has signed the Agriculture bill, making it only the second bill of the new fiscal year to become law. Three other bills -- the Energy Bill, the Homeland Security Bill, and the DOD Construction bill, which also included the LGBT hate crimes measure are on his desk awaiting signature. All are expected to be signed. As late in October as it is, we are all but assured of another continuing resolution at month's end. At least one more month without a real federal budget. Sloppy, sloppy, sloppy.

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Sunday, October 18, 2009

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.

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Thursday, October 8, 2009

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.

Friday, October 2, 2009

2009/2010 Updates, Budgeting Slogs On, Obama Loses in Copenhagen

The 2 Governor's Races
With less than a month to go, the Governor's races in Virginia and New Jersey are drawing to a close and the GOP continues to lead in both races.

(1) Virginia -- tilting back to the red
Last week it appeared that the race had significantly tightened, with 2 separate polls showing that Deeds had cut the race to a 4 point battle, certainly a margin that he could hope to overcome down the home stretch.

This week, however, the task looks more daunting for the DEMS as McDonnell holds 9% and 14% edges in Rasmussen and Survey USA polls. Now, Rasmussen polls are fairly suspect at this point as they have been consistently showing a more favorable view to the GOP than other independent polls (although, they could well be right and everyone wrong.) No one has raised any questions about Survey USA polls, although their auto-dialing system has produced exaggerated margins in the past.

Regardless, McDonnell takes a 7.2% edge in our weighted average of non-partisan polling, wheres the RCP average shows an identical 7.2% edge.

(2) New Jersey -- Corzine still not surging
As I've written previously, I have been half-way expecting this one to flip left at the very end (although if Corzine gets it done, it will be without my vote.) The polls are beginning to bear this out, with 3 different polls showing this one much closer than it was a few weeks ago.

Christie's led is down to 4.3% in my numbers, 3.8% in the RCP average.

Incidentally, my vote in the race, Independent Chris Daggett, is averging 9.1% in my numbers and 8.8% in the RCP average.

I think Corzine is probably better than even money to take this one in the end, with the history in New Jersey of a late-race DEM surge and the race being this close at the end. Some Daggett supporters (I suspect he draws disproportionately from the left) may also gravitate back to Corzine as the race tightens. Not me.

The 2010 Congressional Races
Not a lot of new news in this race. Only two changes:
Florida -- moves from Likely GOP Hold to Safe GOP Hold. With Gov. Charlie Crist (R) up as much as 20% in some polls, this one is a lock for the GOP.
New York (Gillebrand) -- moves from Likely DEM Hold to Lean DEM Hold -- Pataki is within 3% in a new poll, showing he is well within striking distance...assuming he runs, which looks more and more likely.

Other updates that did not alter ratings:
Connecticut -- new polling confirms Dodd is behind by 5+% -- this one remains Lean GOP Pick-up
Pennsylvania -- Arlen Specter looks to be in good shape to take the Democratic nomination -- general election polls are all over the place -- anywhere from Specter -1% to Specter +8% -- this one is close to moving back in the DEM column, but the data are so scattered I'm leaving it as a Toss-up for now.
Ohio -- a lone Rasmussen poll shows Portman +2%, but others are showing Brunner up by 4 to 5% -- this stays Lean DEM Pick-up for now, but I'll keep an eye on it.

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

Likely Dem Holds (3)
Indiana, North Dakota, Massachussetts*

Lean Dem Holds (3)
Arkansas, California, New York (Gillebrand)

Lean Dem Pick-Ups (3)
New Hampshire, Ohio, Missouri

Toss-ups (3)
Nevada, Illinois, Pennsylvania

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

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

Likely GOP Holds (5)
Alaska, Arizona, Iowa, Kansas, South Dakota

Safe GOP Holds (7)
Florida, Alabama, Idaho, Louisiana, Oklahoma, South Carolina, Utah

* Massachussetts special election is in January, not November

Which Projects:
GOP Pick-up of 0 to 3 Sets With all toss-ups going DEM, we'd have the exact same 58-40-2 make-up in the Senate we do today. If they all go GOP, we'd have 55-43-2.

If the GOP were to take ALL the LEAN seats (best case), we'd have a 49-49-2 Senate which would still be Democratic controlled thanks to independent Senators Joe Lieberman and Bernie Sanders caucusing with the Democrats.

If the DEMs were to take ALL the LEAN seats (best case), they'd have a 64-34-2 advantage.

In the House, it is very hard to call again, I show a Dem +0.2% edge, RCP hs a Dem +3.3% edge and the polls go all the way from Dems -2% to Dems +8%.

With what we have, I centrally project:
GOP Pick-up of 17 to 22 Seats
Still significantly shy of what they would need to retake the House, but as I said, this one is dicey to call at this point.

Appropriations Slog
The budgeting process slogs on, with congress attaching a continuing resolution to the Legislative Appropriations Bill that extends current budgetary policy until October 31st, a necessary step since they failed to get a single other bill through the process in time for the start of the government's fiscal year October 1st. The Legislative Bill was pretty sharply partisan (see below.)

I'm very disappointed that with a single party in control of congress and the white house that we didn't do better than this. This practice has long been far too accepted by both parties. Doing budgets ahead of time is pretty necessary if we are going to have any kind of fiscal discipline. Let's hope this continuing resolution is the last and Congress finishes its work on the budget this month.

Rio De Janiero Stomps the US
No, not in a soccer match, in its bid to get the 2016 Olympics. President Obama had put a lot of political capital on the line to try to get the games for Chicago, even flying to Copenhagen to pitch the city. It was all for naught as the US wasn't even a finalist, edged out by both Rio and Madrid.

Congratultions to Rio De Janiero. And sorry about the PR black-eye, Mr. President.

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Sunday, September 20, 2009

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

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

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

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

So, do we still need a stimulus?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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Sunday, July 19, 2009

Aussie, Aussie, Aussie!

I'm traveling through Australia on business for the next two weeks. Once I get adjusted to the jet-lag and caught up a little on the news, I will be posting blogs remotely. For now, I appreciate your patience -- I have basically been traveling all weekend and haven't had much chance to get caught up on the news.

Suffice it to say:
(1) Sotomayor is still a lock for confirmation
(2) Health Care reform appears to be in big trouble (more on that in my next blog)
(3) The budgeting process continues in congress
(4) President Obama is still popular, but has continued to show diminished strength in his ratings in July

More to come very soon!

Wednesday, July 8, 2009

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

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

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

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

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

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

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

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

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

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


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


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

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

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

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

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



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

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

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

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

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

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

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

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

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

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

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Thursday, June 25, 2009

Another Political Affair, Stimulus Update, Congress Heads to Recess

Just Another Couple All-Too-Human Politicians
I had intentionally withheld comment on the affair revelation of Senator John Ensign (R-NV) as I generally find it extremely distasteful to psychoanalyze the personal lives of politicians. But, the revelation this week of Gov. Mark Sanford (R-SC) that he has also been having an affair with a woman in Argentina, not to mention the bizarre set of circumstances surrounding it, compels me to make a few observations about the political implications of these revelations.

First, let me state unequivocally that I feel the personal affairs of these men should be none of our business. We we elect leaders, we hire people to do a job, whether it is Governor, Senator or President. It is not a fair or reasonable expectation that we hold them accountable for everything that happens in their personal life. Relationships and marriage are complex enough, that far be it from me to presume to be able to judge the personal decisions of someone that I have never even met.

In the case of Governor Sanford, there is clearly a job-performance issue in that no one in government knew his whereabouts for days. It's a bad thing, for sure, but absent the affair, I'm not sure it would be damning. And Senator Ensign had an affair that did not impact his job in any way.

Having stated my personal views, let me also state that I fully understand that this is not how the game is played. While I don't agree with it, it is abundantly clear that such things obviously have an impact on political futures. This is especially true in the Republican Party, where those who strongly promote "traditional values" and appeal to Christian Conservatives add the element of personal hypocrisy in addition to the gory details.

The reality is that both men are finished as far as national ambitions are concerned. Senator Ensign was considered a rising star in the party and Governor Sanford had been considered a 2012 prospect. No more. Senator Ensign may or may not retain his job in the future (he isn't up in 2010), Governor Sanford is almost certainly done in politics after his term expires at the beginning of 2011.

I never loved either of these guys politically, but I feel sorry for them personally. The standards that we hold our politicians to are ridiculous. How many Fortune 500 CEO's would pass the same tests? Something has to give before every potential great leader steers clear of politics and all we are left with is blowhard ideologues. Remember, "Honest" Abe Lincoln got his nickname for repaying a debt to a hooker and John F. Kennedy had more affairs than years as President. Would we be better off if we had disqualified them from office?

Stimulus Update
Latest numbers from the Feds:
Authorized: $152.4 billion (30.5%) up $5.2 billion from last week
Spent: $52.9 billion (10.6%) up $4.0 billion from last week

The gap between authorized projects and spent money continues to grow. Transportation spending continues to lag with only $370 million spent so far, but $153 million of that is in the past week, so the pace has definitely accelerated.

Congress Heads to Recess -- Health Care Very Much in Question
Congress is headed to its 4th of July recess with a lot of unfinished business to complete this summer. There is the nomination of to the Supreme Court of Judge Sonia Sotomayor. There are all of the appropriations bills for the fiscal year that starts in October and there is that whole health care issue, which will likely wind up being intertwined with a heated debate over the HHS appropriations bills.

So far, appropriation actions have been taken as follows:
Senate -- no action on any bills (all bills must originate in the House, per the constitution)
House:
(1) Commerce & Justice
After Democratic leaders decided to limit amendments and debate, the GOP cried foul but was basically powerless to stop the movement of the bill (House rules do not give nearly the latitude to stall to the minority that Senate rules do.)

Final Vote: 259-157
Date Passed: June 18th
Partisanship Index: 0.83 (fairly partisan)

(2) Legislative Branch
A tiny bill in the grand scheme of things, but subject of much grand-standing about congressional spending.

Final Vote: 232-178
Date Passed: June 19th
Partisanship Index: 0.78 (fairly partisan)

(3) Homeland Security
A bill with lots of amendments but surprisingly high bipartisanship

Final Vote: 389-37
Date Passed: June 24th
Partisanship Index: 0.21 (highly bipartisan)

(4) Defense
Few amendments and broad bipartisanship

Final Vote: 389-22 with 1 voting "Present"
Date Passed: June 25th
Partisanship Index: 0.07 (highly bipartisan)

(5) Interior
Consideration begins tomorrow

Yet to be debated: Health and Human Services (likely to include Universal Healthcare debate), Veterans Affairs, Agriculture, Defense, Education, Energy (likely to include Cap and Trade debate), Housing and Urban Development, Labor, Transportation and Treasury.

That's a lot of work to do since both houses have to pass a bill then repass the conference report. And major, game-changing debates to be had. But, hey, Congress never got a budget in place last year, so at least things are moving along.

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