Vol. 42, No. 13a
- Portman leaves OMB, plans a future run for office in Ohio
- Bush gives himself a boost with spending bill veto threats
- Liberal wing of House Democrats upset with Speaker Pelosi
- Bloomberg makes first serious move toward a White House run
- Wyoming Democratic governor set to name Republican to fill Thomas’s seat
- A troop reduction in Iraq is expected by the end of the year, but not a total pullout and certainly not a military victory. That means troops will still be on the ground in Iraq for the ’08 election, and that is not good for the GOP.
- The private outlook for ’08 by Republican leaders is gloomy — not a Democratic blowout, but probable Democratic wins for President, Senate and House, with the best GOP chance being in the race for President. It may be premature, but Republican insiders are already talking about the outlook for 2010.
- Former Massachusetts Gov. Mitt Romney is expected to post big fundraising numbers for this quarter, using the technique of borrowing general election funds as Sen. Barack Obama (D-Ill) has done.
- Backers of Obama’s campaign are overjoyed by his strong start but feel he should start defining himself more clearly. Everybody knows Hillary Clinton for better or for worse, but who is Obama?
OMB Director: Budget Director Rob Portman announced his departure from the administration yesterday. Portman hopes to return to Ohio with plans for a future run for office — for governor in 2010 or perhaps a later Senate race.
Not surprising but still interesting is the choice of former Rep. Jim Nussle (R-Iowa) for the position. Nussle departs the presidential campaign of Rudy Giuliani, who only recently decided to bail out of the Ames, Iowa, straw poll in August. Although Nussle asserted weeks ago that the straw poll was of no significance whatsoever, he is now departing the campaign just afterward to enter a lame-duck administration.
This is a double-whammy for Giuliani, whose South Carolina campaign chairman was indicted on cocaine charges. That development is good news for Sen. Lindsey Graham (R-S.C.), who had faced a possible primary from the man, Thomas Ravenel.
The Democratic 110th Congress continues in its determination to fight for left-wing causes on every bill of any significance. Committee leaders have floated a raft of business-hostile proposals, including tax hikes and the so-called “Blackstone Bill,” which would force a much higher tax rate on private equity firms that go public, and a bill increasing taxes on hedge fund managers that stay private. With proposals that are likely or certain to be vetoed, congressional Democratic leaders are setting themselves up for a do-nothing label by inviting the presidential veto.
Appropriations: President Bush has found the rare issue to give himself a boost — the threat that he could veto most or all of this year’s appropriations bills, mostly because they overspend beyond his requests. His bold stand comes immediately after a small band of conservative House Republicans tied up the House floor and forced Democrats to adopt transparency on earmarks.
- Currently, there are plans to veto nine of the bills as shaped by the House. The only three likely to get signed are the Legislative Branch funding bill, the Financial Services bill (which actually falls short of the administration’s spending request), and the Military Construction and Veterans’ Affairs bill. In the case of this last bill, House conservatives warned Bush that it is too politically significant to be vetoed for overspending, even though it overspends by 30 percent.
- Bush plans to veto the Homeland Security appropriations bill nearing final passage, followed by vetoes of eight more money bills sent him by the Democratic-controlled Congress. The Homeland Security bill, as passed by the House, increases spending by 14 percent over the previous year, compared with seven percent requested by the administration. Bush also objects to this measure because it applies higher wages under the Davis-Bacon Act to workers covered by the bill.
- Bush next plans vetoes of the Energy-Water and Interior-Environment bills. The remaining vetoes would be on Labor, HHS and Education; Transportation and HUD; Commerce, Justice and Science; Agriculture and Rural Development; State and Foreign Operations (partly because the House bill omits the so-called Mexico City anti-abortion language); and Defense.
- Republican Study Committee Chairman Jeb Hensarling (R-Tex.) last week collected signatures of 147 House Republicans, one more than needed, pledging to sustain spending-bill vetoes, and the number is growing.
Energy Bill: Although the stated reason for President Bush’s veto threat against Senate Democrats’ energy bill is the language concerning so-called “gas gouging,” the real problem with the bill is much deeper.
- An attempt by Sen. Herb Kohl (D-Wis.) yesterday to “outlaw” OPEC by amendment was derided by Energy Chairman Jeff Bingaman (D-N.M.) as a “feel-good” amendment. But, in fact, the entire energy bill is a “feel-good” bill. It does nothing to produce new energy. It disadvantages proven and economically viable sources of energy in favor of sources that are economically non-viable without massive subsidies and mandates.
- The immediate result of passage would be higher energy prices for consumers, passed along by oil companies. Plus, the effect of existing ethanol mandates has been a massive increase in not just energy but also corn prices, which in turn boosts prices for meat (animals eat corn), candy (which, because of the government’s sugar-subsidy program, mostly contains high-fructose corn syrup instead of sugar) and soybeans (since the land is all being planted with corn).
- When it comes to energy, the public is upset over rising gasoline prices — not the failure of oil companies to invest in alternative sources of energy. U.S. demand for oil is at a record high, and gas prices are close to a record high, meaning that there is no public clamor for an energy bill that does not increase domestic production of oil. This makes empty the threats of political destruction against Republicans by Sen. Chuck Schumer (D-N.Y.) and others. The clamor for ethanol, gasified coal, biofuels, solar and wind power comes almost exclusively from special interests that stand to gain from tax provisions and are otherwise economically unworkable. Democrats are showing a tin ear with this bill that could hurt them politically. They forget that no one votes the environment.
- The Senate’s energy bill would effectively raise taxes on oil companies (and, thus, oil consumers) in two ways. First, it would impose a 13 percent “severance tax” on domestic drillers in the Gulf of Mexico. This is an excellent way to increase the percentage of oil imported to the United States from the Middle East. Attempts by Sen. Jim Bunning (R-Ky.) to undo this provision were turned back in committee. Second, the energy bill would remove from oil companies a tax credit that is enjoyed by other American manufacturing employers.
- The high price of gasoline is not simply a function of high oil prices. The problem is actually a bottleneck in refining capacity. Currently, refiners are even more hesitant than usual to invest in more refining capacity as the government ponders massive subsidies and mandates for ethanol and biofuels and takes away oil subsidies. In fact, capacity utilization is at a seven-year low, and there is no serious talk of increasing capacity.
Democrats: The powerful left wing of the House Democratic Caucus is unhappy with Speaker Nancy Pelosi (D-Calif.) for being too attentive to a handful of moderate members, especially those elected last year from normally Republican districts.
Protesting liberals grumble that Pelosi has been too cautious setting policy during six months in the majority, especially regarding the Iraq War. The response is that Democrats will revert to minority status in the House if they stray too far to the left.
Some liberal Democratic House members returned after the Memorial Day recess to tell colleagues how they were assailed by normally staunch supporters during town meetings, complaining not nearly enough had been done to end the Iraq intervention.
Bloomberg: The idea that New York City Mayor Michael Bloomberg will make an independent run at the presidency should be taken seriously. His decision yesterday to bolt the Republican Party is definitely significant, and given his lame duck status as a second-term mayor, it clearly has nothing to do with city politics. It has nothing to do with the already damaged Republican Party label, either.
Bloomberg was never really a Republican. A life-long Democrat, he ran on the GOP line in 2001 to avoid the crowded Democratic mayoral primary. When he delivered the University of Oklahoma commencement address May 11, he engaged in a long, private discussion about 2008 politics with the university president, former Gov. and Sen. David Boren (D-Okla.).
According to New York political sources, the two discussed a role Boren might play in an independent Bloomberg campaign for President — generating speculation about a Bloomberg-Boren ticket. In introducing Bloomberg for his commencement speech, Boren praised the mayor’s record stabilizing his city’s budget and strengthening its economy after the 9/11 attack.
Boren was governor of Oklahoma before serving 16 years in the U.S. Senate. A moderate Democrat, he clashed with President Bill Clinton and left the Senate in 1994 to take the University of Oklahoma post. He declined Ross Perot’s offer of the Reform Party vice presidential nomination in 1996 but said he might be open to a 2000 draft.
Fred Thompson: New polls bear out our view that former Tennessee Sen. Fred Thompson (R) is on the rise. With the news of one poll’s putting him ahead of the whole pack, Thompson has climbed to $31 on the futures market, just barely ahead of Giuliani and former Massachusetts Gov. Mitt Romney. Sen. John McCain (R-Ariz.) slipped from $12 to $8 since last week.
How viable is Thompson as a candidate? Republicans may want to be cautious about giving frontrunner status to someone who has not been tested in a single debate and has not won a single difficult election. Thompson is “the man who was not there” — he is where he is because no one like him existed in the field before now. He reaps the benefits of the political vacuum on the GOP side. His support rolls in both from undecided voters and from the reluctant supporters of the big three candidates: McCain, Giuliani and Romney. Because he is more viable than the minor candidates, Thompson will also draw a few points from their backers.
Although his “flip-flop” problem is not as dramatic as Romney’s, it still exists on the issue of abortion. No one has grilled him on it yet, but Thompson’s view has changed in the last 11 years (not in three years, like Romney’s).
The Democratic National Committee is evidently afraid of Thompson, or else its operatives at least perceive enough fear among Democrats that they can be frightened by him into giving money. The DNC sent out a fundraising appeal that demonizes the senator-turned-actor for his lobbying career. “In the real world, Thompson has made a fortune in a decades-long career as a Washington lobbyist,” reads the e-mail, referring to him as “lobbyist Thompson.” It also attacks him for raising money for I. Lewis “Scooter” Libby‘s defense fund and for saying he would pardon Libby if he were President.
Georgia-10: As we anticipated, former state Sen. Jim Whitehead (R) ran roughshod over the opposition in the race to replace deceased Rep. Charlie Norwood (R-Ga.). But as he took only 44 percent of the vote, he must now win a runoff.
Amusingly, left-leaning commentators were writing this week that a 35 percent showing by the Democrat in the multi-candidate field would be par and that a better showing than that would signify trouble for the GOP in 2008. The Democrat, dot-com businessman James Marlow, received a pathetic 20 percent of the vote and appeared at press time to have come in third in the special jungle primary election, just behind medical doctor Paul Broun (R). There will now probably be a runoff between two Republicans with similar conservative philosophies. Likely Whitehead.
Illinois-18: Independent-minded Republican Rep. Ray LaHood (Ill.) will leave Capitol Hill after 30 years as a House member and staffer if offered the presidency of his alma mater, Bradley University, in his hometown of Peoria. LaHood’s liability in seeking the post is that he has no degree higher than a bachelor’s.
A LaHood fund-raising coffee scheduled for last Wednesday on Capitol Hill was called off last Monday with a terse e-mail: “Cancelled Till Further Notice.” LaHood felt that it would be “a little unseemly” to raise campaign money while he awaited Bradley’s decision, though that is common practice by congressional colleagues facing similar situations.
LaHood was chief of staff for House Minority Leader Bob Michel (R-Ill.) and later a close associate of former Speaker Dennis Hastert (R-Ill). But he was one of only three House Republicans who did not sign the 1994 Contract with America. Although he voted for the Iraq War and against the Democrats’ attempts this year to cut funding, he upset the White House recently when his frank criticisms of the war’s handling ended up in the newspapers.
Wyoming: The Wyoming Republican Party has drawn-up its short-list to fill the state’s empty Senate seat following the death of Sen. Craig Thomas (R). It looks like a three-man list, but it is actually a two-man list. On it are state Sen. John Barrasso, former state Treasurer Cynthia Lummis, and former Assistant U.S. Atty. Gen. Tom Sansonetti.
Gov. Dave Freudenthal (D) now has five days to select Thomas’ successor from that list, but the presence of Lummis on the list is something of an oddity. Lummis accused Freudenthal in 2003 of threatening the state auditor with the words, “If you cross me, I’ll cut your head off and you won’t know it till it hits the ground.” The governor denied everything. Thanks to their personal clash, he is considered unlikely to support her. The other two candidates are very conservative (Sansonetti, a former Thomas chief of staff, could be the sentimental favorite) and likely to enjoy broad GOP support. Barrasso may be the most capable of keeping the seat.
Whoever receives the appointment will have to defend the seat immediately in November 2008. Lurking in the background is moderate rancher Gary Trauner (D), who nearly defeated Rep. Barbara Cubin (R) for the state’s at-large House seat last year. Trauner could run for Senate this time, and he could pose a real threat to whoever receives the governor’s appointment. The only other Democrat who could win is probably the governor himself.
Significantly, the state party did not put state House Majority Leader Colin Simpson (R), son of former Sen. Alan Simpson (R), on the short list. Had they done so, Simpson’s vote could have overridden President Bush’s veto of subsidies for embryonic stem-cell research in the Senate. Simpson could run a primary against Cubin next year.
|Robert D. Novak|