Monday, February 23, 2009

The Daily Strike-2/23/09-AWK-ward

A busy day at the White House, as the President hosted a couple of key meetings. Welcome to the Daily Strike!

WHITE HOUSE: Today, President Obama played host to two key meetings. The first was with the nation's 50 governors, who were in town attending that National Governor's Association meeting. Obama struck a pretty harsh tone against critics. He said that while concerns about the size and scope of the package were "legitimate," governors who are sniping on items that make up 1 to 3 percent of the bill appear to be "playing politics." Without mentioning anyone by name (man would that have been fun), Obama apparently looked in the direction of Louisiana Governor Bobby Jindal, Mississippi Governor Haley Barbour, South Carolina Governor Mark Sanford and Texas Governor Rick Perry. All of these Southern Governors have threatened to reject stimulus money.

What a great lesson for students of political science. The governors can yap all they want in their home states, but when you're at the White House, the President of the United States can criticize you in front of a large media audience without any chance for rebuttal. Two notable absences from the meeting were Alaska governor Sarah Palin, and former Commerce secretary nominee Bill Richardson of New Mexico.

The next meeting of the day was the so-called "Fiscal Responsibility" summit, attended by administration officials, a bipartisan delegation from Congress, and a whole host of "community leaders," ranging from representatives of the AFL-CIO to economists at far right think tanks like the American Enterprise Institute and The Heritage Foundation. Overall, the crowd at the White House probably topped 100. The summit began with a speech by the President, in which he had some choice words for his predecessor:

"The casual dishonesty of hiding irresponsible spending with clever accounting tricks, the costly overruns, the fraud and abuse, the endless excuses -- this is exactly what the American people rejected when they went to the polls," he said.

"We'll eliminate the no-bid contract that have wasted billions in Iraq. We'll end the tax breaks for companies shipping jobs overseas, and we'll stop the fraud and abuse in our Medicare program. And we will reinstate the pay-as-you-go rule that we followed during the 1990s, the rules that helped us start this new century with a $236 billion surplus," he said.

That was a reference to Bush's various accounting schemes, which made the projected deficit appear smaller than it actually was. The attendees broke into various "work groups" after the President's opening address to address topics ranging from long-term entitlement spending to the budget process.

Next was the extraordinarily awkward question and answer session. Apparently, Obama was in the front of the room at the podium while lawmakers sat below him as if they were members of the press core. Obama called on John McCain for the first question. McCain asked Obama (in what I think is sort of an f-you question) why the President's new helicopters cost as much as Air Force One. Obama joked that he had never ridden in the helicopter, and thought that the one he had now worked just fine. He later answered a question from Rep. Joe Barton (R-TX) about why the stimulus process wasn't bipartisan. Obama answered that "On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive…the minority has got to then come up with those ideas and not just want to blow the thing up.”

If I was a Republican critic of the President, which I'm not, I would mention that it's somewhat ironic to hold a fiscal responsibility summit a week after signing the largest spending bill in American history. But since I'm not that short-sighted, it's much easier to understand. The President knows that we need to spend money now to help people during a deep recession, but in the long term, we must decrease the federal deficit to avoid accumulating unsustainable debt and enduring high inflation.

COMMERCE SECRETARY: The other big news of the day is that Obama will likely nominate former Washington Governor Gary Locke to be the next Secretary of Commerce (take three on this post for the President). The Big Picture and I unfortunately remember Locke for giving an extraordinarily lackluster response to President Bush's State of the Union in 2003. Responding to a speech in which the President peddled false evidence of weapons of mass destruction in Iraq, the best we could come up with was a dull-sounding governor. Thank God that the Democrats have expanded their bench since then. Of course none of this means that Locke won't be a fine Secretary of Commerce.

OMNIBUS BUDGET BILL: House Democrats have finally released their version of an omnibus spending bill which will fund the government through September 30th. The bill encompasses nine unfinished appropriations bills that Bush and Congressional Democrats could not agree on last year. This package adds $20 billion to current budget levels. Most of the additional funding is intended to forestall Bush administration cuts. Some of the domestic beneficiaries of the new bill will be the labor, education and health departments, food subsidies to women and children and the Federal Transit Administration. The bill will come to the full house for a vote on Wednesday. I expect that Republicans will raise objections to additional spending after last week's stimulus package. Ultimately, the bill will pass by a safe margin in the Democratic House. The Senate package could be voted on late this week or early next week. Passage there will be more difficult, although Senate Republicans were involved in negotiations last year that produced some of the increases included in this bill. Obama will probably sign whatever the Democrats produce. His real interest is the Fiscal Year 2010 budget, which he unveils Thursday. With this budget, he'll have a chance to radically change spending priorities and revenue sources.

ECONOMY: Today, the Dow dropped to its lowest level since 1997. A project for my loyal readers (for the comments section) is to see how many citations you can find of Republicans blaming the stock market drop on Obama. The winner will receive a shout out.

Also, the government is negotiating with Citibank regarding a possible partial nationalization. The administration has tried to assure the markets that the government is not interested in nationalizing banks. But with balance sheets the way they are, I find it pretty likely that some form of bank nationalization will take place in the near future.

That's it for us today. Tomorrow we'll do a short Daily Strike in the early evening covering some important Senate votes on DC voting rights and the labor secretary nominee Hilda Solis. We'll then come back with full coverage of the President's address to Congress in a special Late Night Strike.

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