Capital Briefs: April 21-25

A MATTER OF TRUST:  No matter what the outcome of the critical Pennsylvania Democratic presidential primary April 22, the rancorous nomination battle with Barack Obama appears to have taken its toll on Hillary Clinton. According to a just-completed Washington Post/ABC News poll, only 39% of voters nationwide consider the New York senator “honest and trustworthy”—down from 52% in the same poll in May of ’06. Among Democrats, while 81% rated Clinton “honest and trustworthy” two years ago, 63% do so in the latest poll. Also, while 50% of independents thought her honest in ’06, 37% think so now.  And while 23% of Republicans felt Clinton was honest in ’06, that figure dropped to 16% last week, the survey found. A Reuters-Zogby poll last week also showed Clinton now trailing Obama by 51% to 38% as the presidential favorite of Democrats nationwide.

MAN BITES DOG: Conservatives are congratulating ABC-TV’s George Stephanopoulos and Charlie Gibson for their sharp questioning of both Senators Clinton and Obama in the Philadelphia debate last week. Obama appeared to fare worse. He fumbled responses on why he keeps putting on and off, mostly off, an American flag lapel pin and was still less than clear about his perplexing relationship with the Rev. Jeremiah Wright.

The most damaging question came from Stephanopolous about the Illinois senator’s relationship with William Ayers. Stephanopolous pointed out that Ayres was part of the Weather Underground which, among many of its curious pursuits in the 1970s, bombed the Pentagon and the Capitol. “He’s never apologized for that,” said Stephanopoulos. “And, in fact, on 9/11 he was quoted in the New York Times as saying, ‘I don’t regret setting bombs; I feel we didn’t do enough.’”

So how come, Stephanopoulos demanded, an “early organizing meeting for your state senate campaign was held at his house and your campaign has said you are friendly?” Obama floundered here, too.

CAPITAL GAINS TAX: Stephanopoulos and Gibson went after both candidates on the tax issue as well, forcing them to admit they are going to steeply raise taxes, though precisely who would pay was unclear. But Gibson’s tutorial on a specific tax, capital gains, knocked Obama for a loop.

Obama suggests he wants to raise the tax to 28%, almost double the current 15% rate. But when Bill Clinton took it down to 20% and George Bush to l5 %, said Gibson, the revenues went up. “And in each instance, when the rate dropped, revenues from the tax increased,” he told Obama. “The government took in more money. And in the 1980s, when the tax was increased to 28%, the revenues went down. So why raise the tax at all?” He also noted that 100 million people now own stock. Obama flailed again, insisting he would raise it “for purposes of fairness.”

SHADEGG LEADS CHARGE ON MORTGAGE CRISIS: At a time when conservatives are growing increasingly uncomfortable with suggestions from both the Administration and Democratic congressional leaders that might force taxpayers to shell out over $200 billion to underwrite the subprime mortgage crisis, Rep. John Shadegg (R.-Ariz.) last week offered a more homeowner-based solution. Under Shadegg’s Homeowner Empowerment Act of 2008 (H.R. 5776), individuals would be permitted to access their retirement savings accounts without paying the usual penalties, in order to make their mortgage payments. An estimated $17.5 trillion is currently in U.S. retirement accounts and 44.5% of working households participate in some form of retirement savings account.

CARTER FOR NO ONE NOW: Two weeks after he strongly hinted he would back Barack Obama for the Democratic nomination, Jimmy Carter last week said on ABC-TV’s “This Week” program that he will not be endorsing any time soon. “The only thing I know is that I have not made an endorsement, and don’t intend to, until the time of the convention,” Carter told interviewer George Stephanopolous. The former President, who is a convention superdelegate from Georgia, also showed that he had not forgotten his own renomination battle with Ted Kennedy 28 years ago. Asked whether the present nomination battle is hurting the Democratic Party, Carter instead spoke of his own fight with Kennedy in 1980 and told Stephanopolous, “You may or may not remember that on the reviewing stand at the convention, after I clearly defeated Sen. Kennedy two-to-one, he refused to shake my hand, ostentatiously, and made it clear to his supporters that he was not supporting me. So, you know, that was a situation that I think, I hope was unique in American Democratic politics. And I don’t have any doubt, at this point, that no matter who wins at the Democratic convention, that the other candidate and all of the Democratic delegates will fully support the one who is finally chosen.”

NO SUBPRIME SOLUTION FROM IMF CHIEF:  Days before the recent meeting of the International Monetary Fund and  the World Bank in Washington, the IMF managing director  created a stir when he suggested in an interview with the Financial Times that “the need for public intervention is becoming more evident” to deal with the mounting international economic crisis that centers on subprime mortgages.  But when pressed as to precisely what he meant, Dominique Strauss-Kahn would not elaborate.  “Do you remember what [former Federal Reserve Board Chairman] Alan Greenspan once said?” Strauss-Kahn told HUMAN EVENTS Political Editor John Gizzi when Gizzi asked him whether his controversial “public intervention” comment meant a worldwide effort along the lines of the British rescue of Northern Rock and the U.S. bailout of Bear Stearns:  “He said if you didn’t understand what I said, I probably did not express myself correctly.”  Gizzi’s question was a follow-up to a question from an FT reporter about why the “public intervention” comment was not mentioned in the press communique following Strauss-Kahn’s closed-door meeting with finance ministers and bank governors attending the meeting.  But the former Socialist finance minister known throughout his country as “DSK” wasn’t taking the bait.  “Don’t look—you won’t find it [in the communiqué],” shot back Strauss-Kahn.  He added that housing prices are still falling and the housing market analysis is bleak and that any response to it “has to be done by the U.S. government.”  However, the IMF chief concluded, “I will not make any more comment on this.”  When Gizzi read the IMF chief’s “public intervention” comment to White House Press Secretary Dana Perino, she said she had not read it, declined comment, and then offered a spirited defense of the President’s policy on the subprime crisis to provide help to those who are truly in a bad situation but not those who simply made a bad investment.