Sen. Rand Paul (R) of Kentucky is shown through the blue glow reflecting from stage light framing as he hosts a town hall meeting, in Murray, Ky, in this January file photo. He talked about Actress/activist Ashley Judd's activism in a radio interview Wednesday. (John Wright/The Paducah Sun/AP/File)
Rand Paul slams Ashley Judd as too liberal for Kentucky. Is he right? (+video)
Is actress/activist Ashley Judd positioned too far to the political left to get elected as a senator for Kentucky? That’s the charge one of her potential political opponents is making. Sitting Sen. Rand Paul (R) of Kentucky, in a radio interview Wednesday, said that Ms. Judd is “way too ... liberal for our country” and lives much of the time in the United Kingdom with her Scottish husband, race-car driver Dario Franchitti.
“I heard she lives in Scotland; I thought she was running for Parliament,” Senator Paul joked during his WMAL appearance.
He went on to point out that Judd has long opposed mountaintop-removal coal extraction, in which summit ridges are scraped off to allow easy access to coal seams beneath. Environmentalists say this method is polluting and destructive, but it is widespread in Appalachia, where mining is an economic mainstay.
“She hates our biggest industry, which is coal, so I say, good luck bringing the ‘I hate coal’ message to Kentucky,” Paul said.
In terms of the politics here, Paul has a point. Whether she’s too liberal for Kentucky may be an open question: Lots of Kentuckians don’t like their mountaintops ripped up, either. But her political involvement to this point has certainly focused on national issues as opposed to state concerns. That can be a problem in statewide elections.
Even incumbents get into trouble when voters think they’ve lost touch with home concerns. Remember Richard Lugar? He’s the most senior Republican in the Senate, or was. He got beat in 2012’s GOP primary, partly because of perceptions that he’d gone native in D.C.
Judd’s spoken out on a long list of causes that, however worthy, are national as opposed to Kentuckian in scope. She’s big on protecting young women against sex trafficking, for instance. She’s been a global ambassador for YouthAIDS, a group dedicated to raising awareness of this scourge among those ages 15 to 24.
She’s filmed public-service announcements for World Malaria Day and abortion-rights groups.
Yes, Paul isn’t exactly focused like a laser on local issues, either. He’s the emerging voice of the libertarian wing of the Republican Party. But prior to running for the Senate in 2010, he’d been head of a state antitax group, the Kentucky Taxpayers United, for decades.
As we recently pointed out, Judd is also involved in state-level politics – but not in Kentucky. She was a delegate to the 2012 Democratic National Convention from the Volunteer State, and she read out Tennessee’s vote totals during the roll call.
During that mini-speech, she spoke proudly about her adopted home: At the moment, she lives on a Tennessee farm when she’s not in Scotland. She promoted it as “home of former Vice President Al Gore,” among other things. We’re pretty sure that clips of this speech might find their way into GOP attack ads if she does decide to run for the Kentucky Senate seat.
To sum up, if she wants to jump into electoral politics, Judd’s got to do some bridge-building back in the state where she grew up and her family has deep roots. She’s getting talked up as an opponent for Senate minority leader Mitch McConnell in 2014, but if she decides she needs more time, she could run against Paul in 2016.
Some conservatives have another suggestion for someone they paint as a Hollywood liberal.
“Maybe Judd should think about running in California,” writes Ed Morrissey on the right-leaning Hot Air website. “She could hardly be worse than Barbara Boxer.”
Former White House Deputy Chief of Staff Karl Rove is seen at the Republican National Convention in Tampa, Florida in Aug. (Eric Thayer/Reuters)
Is Karl Rove's media career kaput?
Is Karl Rove’s media career kaput?
This question arises as a result of reports that Mr. Rove has been benched by his main television outlet, Fox News. According to New York Magazine, top Fox officials have ordered that producers must get permission before putting Rove or fellow GOP pundit Dick Morris on air. It’s all part of an effort by head honcho Roger Ailes to freshen story lines and change the network’s cast of characters, writes New York’s Gabriel Sherman.
It didn’t help that Rove and Mr. Morris both predicted a big election victory for Mitt Romney. Both were way off compared with the new gold standard of punditry, New York Times polling guru Nate Silver. Also, there was that awkward on-air moment when Rove insisted that Fox was wrong to call Ohio for President Obama. He insisted it was way too early to make the call. The president ended up winning the Buckeye State by three percentage points.
“Multiple sources say that Ailes was angry at Rove’s election-night tantrum when he disputed the network’s call for Obama,” writes Mr. Sherman.
What’s going on here? Is former Fox fave Rove to be replaced by David Petraeus, the disgraced former CIA chief and military general whom Mr. Ailes urged to run for president? Mr. Petraeus needs a job, after all, and a stint as a network talking head would be lucrative and easy. Ex-New York Gov. Eliot Spitzer resurfaced as a pundit after his own peccadilloes drove him from office. Petraeus could do the same thing.
Well, we don’t know about that, but we’d put up money that Rove will be back and bigger than ever before this election cycle is out.
First off, as the New York Magazine story noted, part of the reason for Rove’s banishment has nothing to do with him. The election is over and the demand for electoral punditry has plummeted. Sure, there’s the “fiscal cliff” stuff, but that’s not nearly as popular with viewers. Trust us – we do “fiscal cliff” stories, too. The GOP primaries generated way more readers.
As the midterms approach next year, electoral politics will again rise in importance. Look for Rove to appear more on Fox then.
Second, Rove is a sharp guy. Liberals feeling shivers of schadenfreude at his current situation forget that he helped elect George W. Bush – twice – and since then has not been shy about criticizing Republicans for stuff he does not believe is in the best long-term interests of the party. Remember Christine O’Donnell, the “I am not a witch” Senate candidate from Delaware? Rove from the start called her unelectable. He tried hard to push Todd Akin out of the Missouri Senate race after Mr. Akin's controversial comments on rape. Plus, he’s still got a column in The Wall Street Journal from which to continue to spread his views.
Last, Rove is more than a pundit. He’s a player. He’s head of a "super political-action committee," Crossroads GPS, which continues to push Republican priorities in the wake of November’s loss. As recently as Wednesday, Crossroads released an ad hitting Mr. Obama’s “fiscal cliff” priorities, for instance.
Will donors angry at the GOP’s loss in the presidential race stop paying for such ads? It’s possible. But Rove works hard at maintaining support, both from top donors and the grass roots. Look at his Twitter feed: He spoke at the Kansas Livestock Association in late November. He’s got an upcoming appearance in Missouri at the Creve Coeur Club. He may be off Fox for awhile, but more than likely he’s coming soon to a stage in a state near you.
President Obama gestures as he speaks about the fiscal cliff at the Business Roundtable, an association of chief executive officers, in Washington, Wednesday. The president warned Republicans not to create another fight over the nation's debt ceiling, telling business leaders it's 'not a game that I will play.' (Charles Dharapak/AP)
Still playing offense, White House seeks to rewrite debt ceiling rules
The Obama administration believes the White House should have the ability to raise the nation's debt ceiling unless Congress leaps a very high bar to block it.
Currently, Congress must approve any increase in the amount of debt the United States government can take on – meaning a simple majority in the House and (usually) 60 votes in the Senate. Under a proposal floated Wednesday by the Obama administration, the bar for congressional intervention would be much higher: Lawmakers would need a veto-proof majority to block a debt-limit increase.
Such a change “would lift the periodic threat of default from the U.S. economy and remove politics from future debt limit debates, while preserving Congress’ essential role in spending, revenue and borrowing decisions,” Jenni LeCompte, a Treasury spokeswoman, wrote in a blog post Wednesday.
If Congress were to approve the president's changes to the debt-ceiling process, future increases would occur in a way similar to how Congress resolved the debt increase in the summer of 2011. Under a plan originally proposed by Senate minority leader Mitch McConnell, President Obama asked for a debt-limit increase, and Congress could vote to disapprove of it. But if Congress could not come up with a veto-proof majority to halt an increase in the debt ceiling, the national debt limit would rise.
In the future, the Treasury said, the process to raise the debt limit would work as follows:
The president asks Congress for a debt-ceiling bump, and both chambers have 15 days to pass a resolution expressing their disapproval. If they do, the president can then decide whether to block his own debt-ceiling hike by signing the legislation or, more likely, vetoing the bill. If the bill is vetoed, a two-thirds majority of both chambers of Congress is needed to override him.
Treasury dubs the entire matter the “McConnell Provision,” but the Senate minority leader himself dismisses it. The original idea, he says, came at a particular moment – specifically, one at which Republicans won concessions from Democrats in the form of a boatload of spending cuts.
“The debt ceiling was raised last year only after the White House agreed to at least $2 trillion in cuts to Washington spending, and agreed to be bound by the timing and amount set by Congress – not [the president’s] own whim,” says Don Stewart, a spokesman for Senator McConnell. “The president wants to have the ability to raise the debt ceiling whenever he wants, for as much as he wants, with no responsibility or spending cuts attached. This is an idea opposed by Democrats and Republicans alike; it's a power grab that has no support here.”
No one disputes that McConnell’s office designed the debt-ceiling mechanism used in the summer of 2011.
"I decided to make [the president] own" the debt ceiling, McConnell told journalist Bob Woodward, according to Mr. Woodward’s book "Price of Politics." "We thought he ought to own it. It's part of my job to protect my members, if I can, against having to vote for it."
Congress's role is of direct concern because America will hit its new debt ceiling some time in the first quarter of 2013.
Republicans see the debt ceiling as a leverage point from which to extract spending cuts from Democrats.
Democrats and a growing group of business leaders view politicizing the debt ceiling as unnecessarily threatening the nation’s credit rating and deflating business confidence.
“I want to send a very clear message to people here,” Mr. Obama told a group of business leaders Wednesday. “We are not going to play that game next year. If Congress in any way suggests that they're going to tie negotiations to debt-ceiling votes and take us to the brink of default once again as part of a budget negotiation, which, by the way, we have never done in our history until we did it last year, I will not play that game because we've got to, we've got to break that habit before it starts.”
Actress Meryl Streep uses her iPhone to get a photo of her and Secretary of State Hillary Rodham Clinton following the State Department Dinner for the Kennedy Center Honors gala Saturday, at the State Department in Washington. (Kevin Wolf/AP)
New polls fuel speculation about Hillary Clinton in 2016
Hillary Rodham Clinton hasn’t decided whether to run for president in 2016. Even if she does, she may not make it official for some time. But Mrs. Clinton is already becoming something of a campaign juggernaut.
Two new polls out this week highlight just how formidable a candidate Clinton might be. According to a new ABC News/Washington Post poll, 57 percent of all Americans would support Hillary Clinton for president – including 66 percent of all women. She even wins support among 23 percent of Republicans.
Likewise, a Siena College poll of New Yorkers released Wednesday found a 75 percent approval rating for Clinton – her highest ever in that poll – with 54 percent saying they wanted her to run for president. (Thirty-nine percent said they want the state’s governor, Andrew Cuomo – another rumored 2016 hopeful – to take the plunge).
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Obviously, it’s very, very early, and presidential polls this far out are admittedly pretty meaningless, largely reflecting name recognition. And there’s no question that much of the warmth surrounding Clinton these days stems from her nonpartisan role as secretary of State, for which she wins plaudits from Democrats and Republicans alike (The ABC/Post poll found 40 percent of Republicans approved of the job she’s done at State). Were she to become an actual candidate again, that bipartisan goodwill could quickly fade.
Still, the combination of Clinton’s strong personal appeal and starpower, along with her still-active network of fundraisers and supporters, could easily clear the Democratic field.
As Washington remains mired in the slow-moving, eat-your-broccoli "fiscal cliff" negotiations, it's clear that speculation about Clinton’s future has become the capital’s most entertaining subplot.
She got a brief round of attention over the weekend for an instantly viral photo of her and actress Meryl Streep taking pictures of themselves together on Streep’s iPhone at the Kennedy Center Honors gala (ABC News called it the “picture of the night”). It was yet another item from the Hillary-Clinton-is-a-real-person file – for which the media seem to have an insatiable appetite – highlighting Clinton's fun side.
Even more buzzed-about was the slick video tribute shown at the Saban Forum, a Middle East conference. The film featured gushing praise for Clinton from current and former world leaders, from Benjamin Netanyahu to Tony Blair. As New Yorker editor David Remnick wrote, in a post titled “Hillary Clinton is running for president”: “The film was like an international endorsement four years in advance of the Iowa caucus and the New Hampshire primary.”
Watching it, we were struck by the effort to portray Clinton as a Margaret Thatcher type of leader – a woman with a backbone of steel who’s not afraid to take on thorny challenges. Mr. Blair highlighted her “strength and toughness.” Mr. Netanyahu called her “strong and determined.” Her former Senate colleague John McCain noted, “she has a smile, she’s friendly – and yet, beneath that friendship is a person with very firm convictions.”
In some ways, the video was so heavy-handed – the soundtrack featured Bruno Mars crooning “you’re amazing … just the way you are” in the background –that it came across as an almost deliberate attempt to tweak reporters. It even featured a “wink, wink” kind of ending, with Netanyahu saying, “I don’t think we’ve heard the last of Hillary Clinton,” and with Blair adding, “I just have an instinct that the best is yet to come.”
She may, indeed, be preparing to run. Or she may just be toying with us. Either way, she seems to be having fun.
Speaker of the House John Boehner (R) of Ohio, and the House GOP leadership speak to reporters following a closed strategy session at the Capitol in Washington, Wednesday. (J. Scott Applewhite/AP)
Why might Republicans cave in 'fiscal cliff' talks?
Are Republicans preparing to cave in their “fiscal cliff” talks with President Obama? That’s what some media reports now suggest. Wednesday’s New York Times, for instance, says senior GOP leadership aides are contemplating whether to abandon their opposition to higher tax rates for the wealthy. Conservative political correspondent Byron York of The Washington Examiner says flatly that retreat will happen. The only questions are when and what sort of reductions in Medicare, Medicaid, and other big entitlement programs Republicans might demand in return.
“A Republican offer to allow a top rate increase in exchange for entitlement cuts would turn the spotlight on the Democrats’ entitlement dilemma,” Mr. York writes.
Republicans and Mr. Obama have been at loggerheads over the taxes-for-the-rich question almost from the moment the latter took office. After all this time, and so much rhetoric, why would the GOP give up now on the central issue in the fiscal cliff talks?
FISCAL CLIFF 101: 5 basic questions answered
In arms control terms, one reason might be that the administration has conveyed a credible threat of escalation. In other words, Obama has threatened to go ahead and plunge off the “cliff” and allow automatic tax increases and spending cuts to occur if the rich’s tax rates don’t rise – and top Republicans believe him.
They believe him not because they think he’s a tough hombre but because they understand that the White House fears the “cliff’” less than they do. Many Democrats would be happy to see the Bush-era tax cuts expire, while many Republicans would see that as a catastrophe. Plus, if Obama and House Speaker John Boehner plunge arm-in-arm over this fiscal Reichenbach Falls, more voters would blame the GOP for intransigence than the administration. That’s what polls show, anyway.
Conservative analyst William Kristol frames it this way in an essay for The Weekly Standard: “Might it be prudent for Republicans to acquiesce, for now, to a modified version of Obama’s proposal to keep current income tax rates the same for 98 percent of Americans, while also insisting on maintaining the reduced payroll tax rate of the last two years ... and reversing the dangerous defense sequester? That deal would be doable, wouldn’t wreck the country, and would buy Republicans time to have much needed internal discussion and debates about where to go next.”
But before Democrats start planning their tax-rate victory parties, we’ve got a couple of comments. The first is that it’s one thing for the GOP leadership to give in. It’s another for such a compromise deal to pass the House. As Mr. Kristol notes in the essay cited above, many rank-and-file House Republicans have pledged to never vote for a tax increase, and they might not be in the mood to start now.
Speaker Boehner, in a press conference Wednesday, made something of the same point.
“If you look at the plans that the White House has talked about thus far, they couldn’t pass either house of the Congress,” he said.
Second, all the stories about Republicans preparing to fall back might be coming from a few Republicans who think that’s the party’s best course of action and are trying to convince their colleagues of that fact. They call this “floating a trial balloon,” and the current run of tax stories might be a big, helium-filled rubber sphere vulnerable to tea party adherents with darts.
After all, with a few exceptions, the Republicans who speak on the record about raising tax rates on the rich are either moderates (Sen. Olympia Snowe of Maine), lawmakers who have promoted this for some time (Sen. Saxby Chambliss of Georgia), or pundits (Kristol).
In public, the Republicans who count still deny they’re thinking of retreat. “An obsession to raise taxes is not going to solve the problem. What will solve the problem is doing something about the entitlements, taking on the wasteful spending in Washington,” said House majority leader Eric Cantor at Wednesday’s GOP press conference.
FISCAL CLIFF 101: 5 basic questions answered
This video image shows former Kansas Sen. Bob Dole (r.) wheeled into the Senate Chamber on Capitol Hill in Washington, Tuesday, Dec. 4, by his wife, Elizabeth Dole. Mr. Dole paid a rare visit to the Capitol in support of a United Nations treaty on disability rights. (Courtesy of CSPAN2/AP)
GOP rift over 'fiscal cliff': Are 'Dole Republicans' on the rise?
Former Sen. Bob Dole of Kansas paid a rare visit to the Capitol Tuesday in support of a United Nations treaty on disability rights.
While that effort ultimately proved in vain – the treaty was defeated by conservative Republicans – Mr. Dole’s appearance in some ways served as a timely symbol of the larger battle going on within the GOP.
The former GOP majority leader, who has recently been hospitalized, just so happened to visit at a time when his party is struggling with a sharp, public rift over the “fiscal cliff.” Lines have been drawn between traditional “establishment” members – call them Dole Republicans – who tend to be more pragmatic and inclined to compromise, and tea party types determined to hold the line on taxes and spending.
FISCAL CLIFF 101: 5 basic questions answered
Dole was a key player in Washington’s last big, bipartisan deficit-reduction deal: He helped construct the 1990 agreement in which President George H.W. Bush famously broke his “no new taxes” pledge in return for promised concessions from Democrats on spending and entitlement reform. That bill proved to be instrumental in reducing the deficit in coming years – though Mr. Bush never got credit, since he lost reelection to Bill Clinton, a fate conservatives have linked ever since to Bush’s tax heresy.
Since then, the party has shifted further to the right, with most Republican lawmakers signing on to Grover Norquist's pledge to never raise taxes. But lately, there have been signs of a possible countershift, as more Republicans appear open to the notion of tax hikes in some form.
As Washington wrestles with dire choices on taxes and spending, the big question is whether, in the current GOP, old-school dealmakers like Dole are little more than a dying breed – or if they may, in fact, become ascendant once more.
Certainly, in recent years, it has seemed more like the former. One after another, members of the old guard – like outgoing Sen. Richard Lugar of Indiana and former Sen. Bob Bennett of Utah – have been ousted by challengers on the right, largely over fiscal matters. But in some cases (such as Senator Lugar’s), those primary challengers wound up leading the GOP into embarrassing losses – which has lately led to new cries for the reassertion of a stronger pragmatic wing.
In an opinion piece in Monday’s New York Times, former Republican National Committee research director David Welch wrote: “Republicans must now identify those who can bring adult supervision back to the party.... Dare I say it, or should I just whisper the word? We need 'the Establishment.' "
While conservative groups like the antitax Club for Growth are still threatening to fund primary challenges against lawmakers who don’t hold the line on taxes, those representing the more establishment wing – like GOP strategist Karl Rove – are now indicating they may play a bigger role in primaries as well, Mr. Welch notes.
House Speaker John Boehner’s decision Monday to strip several conservative House members of plum committee assignments may also reflect a new assertion of strength in the party’s pragmatic wing.
The intraparty battle is far from over, of course, and the ultimate winner may not be known for some time. But at the moment, there seems to be at least some political wind at the back of the Dole Republicans. And that in itself is not insignificant.
Actress Ashley Judd (c.) gives a pep talk to volunteers for the Obama for President campaign at the Fredericksburg, Va. office on Oct. 21. (Robert A. Martin/The Free Lance-Star/AP)
Ashley Judd for Senate: Could she win? (+video)
It’s true: Kentucky Democrats are talking up actress/activist Ashley Judd as a possible candidate for Senate in 2014. Ms. Judd, an eighth-generation Kentuckian, was a delegate to the Democratic National Convention this summer and is a big fan of President Obama, so it’s not like this is a completely wacky idea. So far, Judd isn’t saying “yes” to a run, but she isn’t saying “no,” either.
“I cherish Kentucky, heart and soul, and while I’m very honored by the consideration, we have just finished an election, so let’s focus on coming together to keep moving America’s families, and especially our kids, forward,” Judd told Us Weekly last month.
Charlie Cook’s Political Report website lists Judd as a possible Democratic nominee in the Kentucky race, so the D.C. punditocracy is paying some attention to this scenario as well.
If she runs, the GOP opponent would be none other than Senate minority leader Mitch McConnell, one of the top Republican lawmakers in the United States. Democrats would love to knock off Senator McConnell, in part because in 2010 he said the most important thing the GOP could achieve would be “for President Obama to be a one-term president.”
Would Judd have a chance against such an experienced and hard-nosed politician?
Well, she’d certainly attract a lot of attention. As a genuine star who has portrayed Marilyn Monroe (in 1996’s “Norma Jean & Marilyn”) and costarred in a Cole Porter biopic (2004’s “De-Lovely”) and a movie about the tooth fairy (2010’s “Tooth Fairy”), she’d have little trouble raising money from Hollywood liberals. Plus, this is a plot that’s played out on the national stage before. Two words: Al Franken. Senator Franken (D), a professional comedian, knocked off incumbent Norm Coleman in Minnesota in 2008.
So Democrats can dream, can’t they?
Yes, they can. But eventually they’ll have to open their eyes and see that Judd’s prospects of beating McConnell aren’t good.
First, it’s Kentucky, not Minnesota. It’s a Republican state. Mitt Romney took 61 percent of the vote there a month ago to Mr. Obama’s 38 percent. The aforementioned Charlie Cook Political Report already judges the 2014 Senate contest to “lean Republican.”
One reason Judd’s name is coming up is because other prominent Kentucky Democrats don’t want to run and get beat.
Second, Judd’s not just a Democrat, she’s a Hollywood Democrat. Her own grandmother recently called her a “Hollywood liberal.” The GOP has long experience in painting such folks as out-of-touch celebrity nitwits who want to nationalize health care while forcing everyone to drive electric cars with a top speed of 55 miles per hour.
(Yes, Judd is married to a race-car driver. But he’s Scottish and thus foreign, so that might be a wash, electorally speaking.)
Last, there’s the matter of bluegrass allegiance. It’s true that Judd’s family has deep Kentucky roots. But the state from which she was a delegate to the 2012 Democratic National Convention wasn’t Kentucky. It was Tennessee! She and husband Dario Franchitti split their time between a Tennessee farm and a home in Scotland. We’d bet that in Kentucky, the former domicile would be a much bigger political problem for her than the latter.
Senate Majority Leader Harry Reid, D-Nev., and Senate Democratic leaders meet with reporters after talks with Treasury Secretary Timothy Geithner on the fiscal cliff negotiations, at the Capitol in Washington, Nov. 29 (J. Scott Applewhite/AP)
Going over the 'fiscal cliff': why more are sounding ready to take the plunge
The back-and-forth over the so-called 'fiscal cliff' sounds a lot like "Groundhog Day" right now, as, day after day, each side accuses the other of failing to bring a serious proposal to the table, leaving the impression of a process that’s basically stalled.
And while we still tend to think that a deal will be struck before year’s end (Congress being essentially like newspaper journalists, needing the threat of an imminent deadline to get anything done), we’ve also been struck by the small-but-growing chorus of so-called “cliff divers” – partisans on both sides arguing that going over the cliff might actually be the most palatable option.
In many cases, of course, this kind of talk may just be part of the game of chicken, designed to scare the other side into making concessions.
But increasingly, some seem to be genuinely concluding that going over the cliff would in fact be the best choice – better than what they fear is shaping up to be a disastrous, hastily constructed deal on taxes and spending that would then be much harder to undo.
Initially, it was mostly those on the left voicing this argument – in part because that would actually accomplish one of their chief goals: ending the Bush tax cuts for the wealthy (and, the thinking goes, Democrats could then come back and reinstate the middle-class tax cuts in 2013). As far back as last summer, Sen. Patty Murray (D) of Washington said in a speech at the Brookings Institution: “I will absolutely continue this debate into 2013, rather than lock in a long-term deal this year that throws middle-class families under the bus.”
Lately, a number of voices on the right have been making essentially the same case. “Our preferred strategy here would be to accept the sequester now, knowing that Congress is not going to do something more rational – they’re not going to take on more fundamental spending reforms – and push off increasing taxes,” Matt Kibbe, president of the conservative advocacy group FreedomWorks, told MSNBC Monday morning.
Likewise, outgoing GOP Rep. Joe Walsh of Illinois, who has close ties to the tea party, told Bloomberg last week: “The thing that would be much worse would be to craft a bad deal that would do anything that raises taxes. Doing what’s right over the next couple weeks is more important than doing something that would harm our economy in the name of meeting a silly deadline.”
One other indication that the once “unthinkable” option may be becoming more widely “thinkable” is the shift in the language describing it. There’s been a deliberate effort in recent weeks to rebrand the fiscal “cliff” as more of a fiscal “slope,” with a number of lawmakers, as well as prominent investors like Warren Buffett, arguing that, counter to all the doomsday predictions, the US economy wouldn’t go off the rails in January if Congress failed to act. “It’s not like something cataclysmic happens on Dec. 31,” Sen. Bernie Sanders of Vermont told Politico last week.
That’s because many of the automatic cuts wouldn’t actually go into effect for another few months at least – giving lawmakers additional time to work out a solution in the new year. Likewise, the Internal Revenue Service would have some flexibility about when to implement the new tax rates, and could even retroactively reverse any tax hikes, if a deal is reached later on.
Of course, no one knows exactly how the markets would react if Congress did allow the country to go over the cliff (and most analysts agree the immediate consequences would not be good). But the rise in those arguing that any broad economic effects would likely be gradual – and more changeable – than has been often represented may be helping to make such an outcome more likely.
President Obama speaks at the Rodon Group, which makes toys as K’NEX and Tinkertoys, Friday, Nov. 30, in Hatfield, Pa. The visit comes as the White House continues a week of public outreach efforts, while also attempting to negotiate a deal with congressional leaders. (Susan Walsh/AP)
'Fiscal cliff' proposal: Is Obama trying to peeve GOP?
What’s the point of President Obama’s new proposal to end the “fiscal cliff” financial crisis? This question arises because Republicans seem genuinely startled and annoyed by the details of the plan. In their view, it’s a Democratic wish list instead of a starting line for serious negotiations.
Senate minority leader Mitch McConnell of Kentucky told The Weekly Standard he “burst into laughter” after hearing Treasury Secretary Timothy Geithner outline the plan. “Nothing good is happening” in the fiscal cliff talks, Senator McConnell said.
Let’s back up and examine Mr. Obama’s offer. As expected, it calls for $1.6 trillion in tax increases over 10 years. The president has long said that’s his dollar goal for new revenue and that raising rates on the top 2 percent of taxpayers is the only way to raise enough cash to get there.
FISCAL CLIFF 101: 5 basic questions answered
But the proposal also calls for $50 billion in immediate stimulus spending, according to the GOP. This would pay for some new national infrastructure, the continuation of extended unemployment benefits, and a deferral of looming reductions in Medicare physician reimbursements.
(We’ll note that this last detail, the “doc fix,” is something that both parties have agreed to for years. Whether it counts as new stimulus spending is thus open to interpretation.)
Obama’s plan also calls for eliminating congressional votes to raise the debt ceiling – a shift in institutional balance of power that lawmakers of both parties might resist.
But what really appears to peeve Republicans is the lack of specificity on spending cuts. The White House proposal identifies some upfront reductions in some programs, but only in vague terms, they say. It does propose $400 billion in long-term savings from Medicare and other entitlement programs, but only as a goal. Specifics are deferred for later negotiations.
“Unfortunately, many Democrats continue to rule out sensible spending cuts that must be part of any significant agreement that will reduce our deficit,” said House Speaker John Boehner after Thursday’s meeting with Secretary Geithner.
Democrats say the other party is just acting the diva. Obama has talked publicly about pretty much all this stuff, they say, so nobody should pretend to be surprised.
But even some liberals say the list is loaded up with most of their favorite proposals. In this sense, it’s a compendium of many things the administration has been pushing. This could mean the White House is not trying to woo the GOP with upfront concessions. Instead, Obama appears to believe he’s entering these talks in a position of strength.
“This opening bid will cheer liberals – it strongly suggests the White House is willing to push Republicans very hard, in the belief that it has all the leverage,” writes left-leaning Greg Sargent in his Plum Line blog at the Washington Post.
Some on the right say all this means Obama has also decided he’s not that worried about actually reaching a deal. Instead, he’s decided that allowing automatic spending cuts and tax increases to kick in on Jan. 1 will only increase his leverage. The logic of this view runs this way: Polls show a majority of voters will blame the GOP if the United States dives over the cliff. The administration can then say any resultant weakness in the economy is Republicans’ fault, and Democrats would do better in the 2014 midterms than they would have otherwise.
Obama is “either indifferent about going over the cliff or now actively wants it to happen, and since he knows he can count on the press to scapegoat Republicans when it does, he’s decided to shoot for the stars with his ‘offer’ and see how desperate Boehner is,” writes conservative blogger Allahpundit on the Hot Air website.
However, our favorite guess here stems from game theory, which focuses on strategic decisionmaking. Perhaps the administration is trying to enter fiscal cliff talks in a position to both reach a deal and get most of what it wants.
One way to do this might be to lard up opening positions with lots of stuff you’d be willing to discard. This way, the other side gets “victories” when you agree to strike them, allowing it to save face in the final deal.
Opening positions are just that – openings. In that sense, the administration’s proposal could be both unrealistic and the opening to a solution.
Vice President Joe Biden pushes his cart after shopping at Costco in Washington, D.C., Thursday. Biden went shopping for presents and to highlight the importance of renewing middle-class tax cuts so families and businesses have more certainty about the nation's fiscal direction. (Susan Walsh/AP)
Joe Biden goes shopping at Costco. Why there? (+video)
Why did Vice President Joe Biden go shopping at Costco Thursday morning? He’s got a day job, after all. We’d have thought he might have spent the a.m. holed up in his White House office plotting strategy for “fiscal cliff’ talks. Or maybe preparing a greeting for Mitt Romney, who’s lunching Thursday with President Obama.
But no, Mr. Biden was out setting an example for holiday shoppers by priming the pump at the grand opening of the first Costco in Washington, D.C. Among other things, he bought cookies, children’s books, an apple pie, fire logs, and a 32-inch Panasonic TV. He tried some food samples. He declined to purchase a new set of tires.
“Hey man, I don’t need tires,” he said, according to the pool report. “I don’t drive anymore.”
QUIZ: Are you a smart shopper?
No, we’re not making that tire thing up. Sometimes reality needs no improvement.
Anyway, we can think of several serious reasons that a man who’s a heartbeat away from the most powerful job in the world might spend a few minutes checking out pallets of dress shirt three-packs.
The first is an obvious one: He’s rewarding a supporter. Costco co-founder Jim Sinegal endorsed the Obama ticket, held a fundraiser at his New York home, and even spoke at the Democratic National Convention. Mr. Sinegal was present Thursday as Biden appeared at Costco’s door. Undoubtedly he was pleased at all the free publicity about the new store he’s getting because of his administration friends.
But this wasn’t just an economic/political quid pro quo. Our second point is that the administration tries to promote Costco as an example of how US businesses should treat employees. Costco’s people are well paid (for retail), and the firm offers good health insurance. Sinegal himself took home $350,000 in the last year he served as CEO, which sounds like a lot but is about one-third of the average for firms of Costco’s size.
That’s why the DNC got him onstage in Charlotte, N.C. His speech didn’t get that much attention, as he’s not exactly a rousing orator, and it went on late. Maybe Biden’s visit is a way of trying to raise those issues again.
“At our company, we recognize that job creation requires time and investment and commitment to the long term,” Sinegal said in his convention speech.
Last, Biden may just have been boosting D.C. Or an area of the city underserved by retail, in any case. The new Costco that the VP visited looms on a cliff in the northeast part of the city near the Anacostia River and the border with Maryland. It’s a lower-income area called Fort Lincoln, where local officials have put together a new shopping area named the Shops at Dakota Crossing. Costco is the first big tenant to open. Shoppers Food Warehouse and Marshalls are supposed to follow.
D.C. officials have long lamented that city residents who don’t live in the prosperous northwest quadrant have few retail options and must drive to Virginia or Maryland to shop. In visiting Costco, Biden brought attention to a place where D.C. residents can spend their bucks in D.C. – keeping jobs and tax revenue within the city.
QUIZ: Are you a smart shopper?
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