The Weekly Strike-10/26-11/1

Good morning and welcome to the Weekly Strike. I apologize for no entry on Friday. I hope you all survived in my absence. The House passed a bill authorizing new programs for the Coast Guard. That's about all you need to know. Now to the week in politics...

HEALTH CARE: Once again we'll be on the lookout this week for signs of progress on health care legislation in the House and Senate. On the House side, it's still unclear whether Speaker Pelosi has 218 votes for the "robust" public option, which would provide for reimbursements to providers at Medicare rates plus 5%. It appears that the public option itself may have 218 votes, but some members may vote against the bill for other reasons. That is why Congressional deal making is such an arduous, and frustrating process. If Pelosi can round up the votes in the next couple of days, she can send the bill for a final scoring to the Congressional Budget Office, and possibly call for a vote as early as next week. Speaker Pelosi has promised to allow members 72 hours to "read the bill" before voting.

It's possibly we could see a Senate bill unveiled this week as well. Numerous Democratic Senators claim that they are withing striking range of the 60 vote threshold on a bill that includes a national public option with a provision allowing states to opt-out. Rumors swirled that the White House was cool to this plan, because it might cause Emperor (Senator) Snowe (R-ME) to renege on her support of the bill. But if Majority Leader Reid (D-NV) can round up the votes for this proposal, the White House would certainly be thrilled and supportive.

It seems like most of the negotiation stories we hear in the media have been centering around the public option. Yet, there are still many areas where important work remains to be done. Most notably, Congress still has to choose how to pay for the bill. Both the House and the Senate bills are expected to squeeze $500 billion out of Medicare to pay for most of the bill. The House bill will likely raise about $300 billion in revenue by imposing a surtax on the wealthy, while the Senate will raise the same revenue through an excise tax on expensive insurance plans. I'm more supportive of a progressive tax on the wealthy, but if I were a betting man, I would guess that the excise tax (or something close to it) will eventually be the chief revenue source in the bill. Taxing expensive plans would encourage employers and individuals to seek lower cost plans, which would help bend the cost curve of health expenses in the long-run.

Of course, we'll keep you fully up-to-date on the health care bills as they meander through Congress.

THE WHITE HOUSE: The President starts his week with a key meeting on Afghanistan. As if the President didn't have enough to worry about here at home, both Iraq and Afghanistan suffered major tragedies this weekend. A bombing of government buildings in Iraq killed 147, and helicopter crashes in Afghanistan killed 14 American soldiers. Today's meeting will be another in a series of "Af-Pak" strategy sessions with the national security team. Earlier this weekend, the Pentagon conducted war exercises to try and gauge the impact of sending additional troops to Afghanistan. Under one scenario, the Pentagon tested sending 44,000 troops to mount a major full-scale counter-insurgency effort. This would be a plan in line with the recommendation by General Stanley McCrystal. The Pentagon also tested a scenario in which 10-15,000 troops were sent over for a more limited counter-insurgency mission. I don't know much about military affairs, but I wonder if these exercises are reliable predictors of what might happen. I sure hope so.

The President then travels to Florida today for a series of events. This afternoon, the President will address service members in Jacksonville. Tonight, he will attend a fundraiser for Congressional Democrats. Tomorrow, the President will make a major announcement on a new "smart grid" electricity initiative under the stimulus package. He then travels to Virginia to campaign (most likely in vain) for Democrat Creigh Deeds, who is trailing badly in next week's Gubernatorial election.

Later in the week, we could see a very important announcement on a new Presidential proposal to deal with financial institutions that are "too big to fail." We'll give you details on this proposal when it comes out.

THE HOUSE: The House will consider suspension bills today and tomorrow. On Wednesday, the House will consider a bill to improve access to capital for small businesses. We usually see small business legislation every couple of weeks in the House, as members try to keep up their pro-small business bona fides. I expect this bill to pass easily, as it should. Next up is a conference report on the Department of Interior Appropriations bill. This would be the 5th of 12 appropriations bills to be conferenced and sent to President Obama. Because there are so many outstanding appropriations bills, the House will vote on a continuing resolution Friday to fund the federal government past the October 31st deadline (a deadline imposed by the last continuing resolution, which passed in September).

THE SENATE: The Senate's schedule is far more ambitious than it should be, given the snail-like pace the Senate has moved at since it came back from the August recess. Tomorrow, the Senate will vote to cut off debate on a measure to extend unemployment benefits. The House already passed an extension in September. The debate is not really on the extension itself, but whether it will be offset by spending cuts in other programs. I hope Congress acts on an extension quickly, because there could be nothing more crushing during a recession for families than running out of unemployment benefits through no fault of their own.

Next, the Senate will try to finish two appropriations bills by the end of the week, which I would say has about a 10% chance of happening. The Commerce, Justice and Related Agencies bill will come up first, followed by the Military Construction and Veterans Affairs bill. If the Senate can somehow finish these two bills this week, they will have completed their version of 10 out of the 12 appropriations bills. Finally, the Senate will concur with the continuing resolution as soon as the House completes its work Thursday or Friday.

That's it for now, see you tonight!