Wednesday, February 11, 2009

The Daily Strike-2/11/09-Obama's Best Day

Today was a very good day for the President, most notably on the stimulus package. Welcome to the Daily Strike.

STIMULUS FIGHT NEARING AN END: Today, House and Senate negotiators agreed to a final version of the American Recovery and Reinvestment Act. The deal was announced by several Senators in the mid-afternoon. The Senators present included Republican moderates Snowe, Collins and Specter. As I mentioned earlier, unless there are any Democratic defections, the bill has enough votes to meet the 60 vote threshold in the Senate.

After this press conference however, additional negotiations apparently went on behind closed doors in the Speaker's office. Speaker Pelosi had been conspicuously absent at the press conference. She was not happy that money for school construction had been cut in the final package. Apparently, the moderates who negotiated the Senate deal decided to include school construction funding as part of a broader package of aid to states. The Speaker, just awhile ago, announced that she WOULD support the plan. There weren't immediate details out as to whether Pelosi got her wish, but there are indications that she did not. She's a tough woman (I'm a former intern), and I wouldn't be surprised if she held a (frankly, well-deserved) grudge against Harry Reid for capitulating on this.

The funny part about all of this is that none of the negotiation went on in an actual House-Senate conference, it was all hashed out behind the scenes by House and Senate Democrats, White House Chief of Staff Rahm Emanuel, and the three Republican moderates (who are suddenly the most powerful people in the country). The members only met for a formal conference AFTER the agreement was put in place, as a formality. Once this conference is complete (which it could be by now), the conference report (final version of the bill) will be sent to both the House and Senate for final approval. Early word was that the House could pass the bill tomorrow, and the Senate would follow suit on Friday. I haven't heard any additional information, and the House leadership has not posted tomorrow's schedule.

My guess is that the final plan doesn't sway many members one way or another. The bill will pass the House with between 245-250 votes. What I would look for are a couple of Republican defections. One name I can think of is Michigan Rep. Fred Upton, who traveled with Obama to Indiana. Michigan has been especially hard hit by the recession, and Upton has had a moderate streak in the past. Other suspects for crossover votes include Rep. Castle, a moderate from Delaware, and a couple of others. I'd be surprised if more than 3 or 4 Republicans crossed over. So much of their long-term political strategy hinges on strong opposition to this bill, and then praying that it fails. The Senate vote should be the same as it was yesterday, 61-37, unless a couple of Republican pragmatists decide to cross over. The obvious suspects are Richard Lugar of Indiana, who Obama is friendly with and who supported the State Children's Health Insurance Bill, and George Voinovich, who had previously been involved in Senate negotiations. I wouldn't bet money on either of them voting for it.

But let's take a step back for a second and imagine being told two years ago that the Congress was about to approve an $800 billion spending bill that contains money for clean energy, health care, unemployment assistance and food stamps, infrastructure investment and aid to states, you wouldn't have believed it. It's really happening! Every President seems to have an early economic bill that puts his stamp on the economy. Reagan had his giant tax and spending cuts, Clinton had deficit reduction, Bush had his tax cuts, and Obama has a massive government spending bill! There are problems with this compromise for sure, but after the dust settles, we should appreciate what the President has been able to achieve in three short weeks.

THE CONFERENCE REPORT: So what exactly is in this bill? The final size of the bill will be about $789 billion, less than both the original House and Senate version. The biggest cut were on some of the Republican add-ins to the Senate bill. They let go of a tax credit for home buyers that cost $35 billion, and another tax credit for auto purchases. If Republicans aren't gonna vote for the bill anyway, why include their ideas? The other significant cut was in the size of the "make work pay" tax cut for middle-class families. Previously, each couple would have gotten 1,000 and single person would have gotten 500, but those numbers have been cut to 800 and 400 respectively. Overall, the bill is 65 spending, and 35 percent tax cuts.

The bill also includes a temporary fix for the Alternative Minimum Tax (which I don't think is very stimulative), $150 billion for infrastructure improvement (even though it's a small portion of the bill, that's a huge investment in historical terms) and $90 billion in medicaid funding for states.

THE POLITICS: A new poll out today from USA Today and Gallup shows the stimulus bill gaining in popularity. According to this poll, 59 percent approve of the bill while 33 percent disapprove. Interestingly, Obama's name is mentioned in the question (coincidence?). Today, Obama helped sell the bill at a construction site in Richmond, VA with Governor Tim Kaine. He mentioned that the Caterpillar Construction Company would rehire 22,000 workers if the stimulus bill was passed. Great strategy to mention tangible results of the bill. Overall, Obama must be happy with how the last week has gone. It seems like his campaign-style appearances and prime time press conference have been well received (at least with the data that is currently available).

OTHER BUSINESS: Obama also had a good day getting some of his nominations moved in the Senate. The full Senate voted to confirm Deputy Defense Secretary William Lynn. Lynn's nomination had been held up because he had lobbied for defense contractor Raytheon. Obama was forced to waive his new rule banning lobbyists from serving in his administration. Much of the objection had come from the ranking Republican on the Armed Services Committee, some guy named John McCain. The full Senate approved Lynn 93-4, with no votes coming from Republicans Cornyn (TX), Corker (TN), Grassley (IA) and surprisingly, Obama's strong ally Democratic Senator Claire McCaskill of Missouri. She has a contrarian and populist streak in her; she also voted against Treasury Secretary Timothy Geithner. My guess is that she has a lot of populist in her and doesn't appreciate having a defense lobbyist moving to the Pentagon.

Two key nominations were approved in committee. Finally, Labor Secretary nominee Hilda Solis passed the Senate Health, Education, Labor and Pensions committee, with only two dissenting votes. She could get voted on by the full committee this week. Also, CIA Director nominee Leon Panetta, who has had faced questions about his lack of intelligence experience, unanimously passed the intelligence committee. He also could be voted on later this week.

THE STRIKES FAVORITE CONGRESSIONAL DISTRICT: NY 20's will be voting on a new representative to replace newly sworn Senator Kirsten Gillibrand on March 31st. The election was called by New York Governor David Paterson. The candidates are set. For Republicans, it's well-known assemblyman James Tedisco, and for Democrats its venture capitalist Scott Murphy. The charismatic Tedisco has a huge advantage (I think) in this conservative-leaning district. I predict that the Democrats will lose this seat, and their House majority will shrink to 256-179.

That's it for a long strike today, we'll update you tomorrow to see if the stimulus moves closer to Obama's desk!

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