ENPR: Week of August 15, 2007

August 15, 2007
Washington, DC
Vol. 42, No. 17a

To: Our Readers


  1. A cut in interest rates in a few months planned by the Federal Reserve to pick up the domestic economy seems to be derailed by the global credit crunch. The Fed may flinch at being put in the position of bailing out greedy hedge-fund managers.
  2. While prominent Republicans hope the departure of Karl Rove will ease up Democratic congressional pressure on the GOP, Democrats in fact will keep pressure on Rove even though he is out of government. The investigative furor on Capitol Hill will continue.
  3. Discontent with the GOP leadership is growing within the slender band of Republican reformers in both the House and Senate. They are considering but have not decided whether to go public.
  4. The big test for Fred Thompson will come in his first Republican presidential debate in September. His own aides tell us he will have to perform well out of the box for the money to start flowing.

White House

Rove Departure: The sudden departure of White House Deputy Chief of Staff Karl Rove is a relief to many Republicans and a bittersweet moment for his detractors. No intrigue appears to lie behind his departure.

  1. Rove’s title, "deputy chief of staff," does not even come close to describing the influence he had. Rove was one of the most effective and most powerful presidential aides in history. His influence within the administration was notorious, and his success on the political battlefield was impressive, 2006’s losses notwithstanding. He was key to turning Texas Republican in the 1990s, making it the first Democratic domino in the South to fall. On the national level, the Rove-Bush team went three for four.

  2. He was the favorite target of a scandal-hungry press and of angry Democrats — the Newt Gingrich of his day, in that respect. Many Republican officials felt he was a millstone around the party’s neck, drawing attacks and bad press coverage and dragging the party front. In fact, he was probably more of a lightning rod. The party in the White House will always be attacked, Democrats will always attack Republicans and conservatives will always be treated poorly by the media. Changing the face on the target will do very little to remove the bulls-eye from the GOP’s back. It may take a while, but a new GOP bete-noir will be chosen.

  3. The relief at his departure among Republican officials may in truth be a hope that White House meddling may end. There was no dividing line between the White House and the Republican Party under Rove — a fact manifested in the RNC e-mail addresses famously used by top White House officials. Rove has not shied from barking orders at Republicans at every level. He has been very public and very direct since the 2006 elections in blaming GOP losses on insubordination by House and Senate candidates — for example, Jim Leach (Iowa) refused White House help, Melissa Hart (Pa.) wouldn’t run the campaign Rove told her to, and J.D. Hayworth (Ariz.) took the wrong side, i.e. anti-Bush, on immigration. Rove’s influence was annoying to more independent-minded or strong-willed Republicans.

  4. Rove’s legacy will continue to shake out over the next few years, but if Democrats win the White House and hold Congress in 2008, the legacy could be this: By sacrificing principle for politics (expanding Medicare, singing campaign finance reform, refusing to veto bloated spending bills and broadening the federal role in education, to name a few), Rovian politics earned short-term gains while (along with Iraq) undermining the foundation of the Republican Party.

  5. Rove has shown no signs of joining forces with one of the Republican presidential campaigns, but his track record of success makes it clear he will be tapped for advice by GOP politicos for years to come.

Republicans 2008

Iowa Straw Poll: Former Arkansas Gov. Mike Huckabee was the biggest winner in Saturday’s Republican presidential straw poll, but the non-binding ballot was mostly unimportant. By winning handily, former Massachusetts Gov. Mitt Romney cemented his standing at the front of the GOP field. The poll weeded out former Wisconsin Gov. Tommy Thompson, who was never too much of a factor, anyway.

  1. Huckabee’s second-place finish was not really a surprise. It was clear that the real competition in the straw poll was for the No. 2 spot, and the contestants were Huckabee and Sen. Sam Brownback (R-Kan.). The two had similar messages (emphatically socially conservative), and they were fighting over a similar portion of the electorate (the Christian right). Going into Ames, it was a toss-up between these two, and so the loss is a letdown for Brownback.

  2. Huckabee garnered more votes than he paid for (almost all attendees at the straw poll have their $35 admission paid by the candidate of their choice), and he beat Brownback on half Brownback’s budget. This is partly due to Huckabee’s being more charismatic than Brownback, and partly due to the fact that evangelical Christians (Huckabee’s strength) are more politically active than conservative Catholics (Brownback’s strength).

  3. Huckabee’s claims that he is now "in the first tier" are overblown. However, he has jostled ahead of Brownback and is currently the point man for the Christian conservative bloc of GOP voters, an important and underserved part of Republican primary voters. (Huckabee and Brownback combined for more votes than Romney won.) The chief upside of the second-place finish for Huckabee has been the glowing media attention he has garnered. Affable and sincere — and more important, seemingly harmless — Huckabee is treated well by the media that certainly don’t share most of his views.

  4. Romney’s big win was something of a tour de force, showing off his two major strengths: money and organization. The absence of Sen. John McCain (R-Ariz.) and former New York City Mayor Rudy Giuliani (R) doesn’t diminish that. Their absence did diminish media attention to the straw poll. The fact is Romney is in the best position of all the candidates to win the nomination, as his cash and the Iowa and New Hampshire polls show.

  5. Brownback’s third-place finish is a disappointment, and it could diminish his role in the race. To date, he has been the leader on the abortion issue, forcing Romney to take a strong pro-life stance and making Giuliani uncomfortable on the topic. He will need strong debate performances between now and January to reassume that leadership role. He certainly missed his best chance to insert himself into the top tier. This much hasn’t changed: If his fundraising can keep up a decent pace, Brownback will stay on until the caucuses in January, and then likely drop out.

  6. Representatives Tom Tancredo (R-Colo.) and Ron Paul (R-Tex.), finishing fourth and fifth, respectively, fared as expected. Rep. Duncan Hunter‘s (R-Calif.) anemic ninth-place finish could drive him out of the race.

  7. The low turnout at the straw poll is an ominous indicator of a constant theme this cycle: Republican morale is low.


Federal Reserve: Federal Reserve Chairman Ben Bernanke, for now, is showing a steady hand amid the stock market tumbles last week spurred by a not-surprising train wreck among sub-prime mortgages.

  1. The Fed never seriously intended an emergency rate cut, despite some political pressure for the Fed to cut interest rates immediately to prevent a real bust in housing and in the markets that are so heavily invested in mortgage-backed securities. Fed rate cuts counter to market forces run a long-term risk of causing inflation. More importantly, such a move could have appeared as panic, offsetting any psychic benefits the rate cut would have.

  2. The short-term infusion of capital by the Fed has many of the advantages of a rate cut (keeping credit and investment capital available when some feared the collapse of the mortgage-backed security market), while being temporary. That means it’s a fairly risk-free measure by Bernanke.

  3. If things get much worse in the economy, it would change the agenda on Capitol Hill and probably shake up the 2008 elections.

House 2008

Illinois-14: Rep. Dennis Hastert (R), the former speaker of the House, announced this week he would not seek another term. This announcement, not surprising, sets off a scramble, especially among Republicans.

Jim Oberweis (R), a well-connected wealthy businessman, could get the blessing of Hastert’s team, especially because Hastert’s chief of staff, Mike Stokke (R), is not likely to run. State Sen. Chris Lauzen (R) will run for the seat, but he is not popular with Hastert’s machine.

Three Democrats have lined up to run in this district, which voted 55 percent for George Bush in 2004. Businessman Bill Foster and attorney Jotham Stein are running, as is Hastert’s 2006 opponent, John Laesch. Any Democrat will have a tough time winning here. Likely Republican Retention.

Governor 2007

Kentucky Governor: Gov. Ernie Fletcher (R) owed his 2003 victory in part to the corruption of outgoing Democratic Gov. Paul Patton. Similarly, former Atty. Gen. and former Lt. Gov. Steve Beshear (D) is poised take the governor’s mansion on the strength of Fletcher’s corruption problems — possibly using Fletcher’s same lines from 2003.

Fletcher was indicted last year on three misdemeanor charges related to corruption in hiring. In 2005, many of his political hires were indicted as well, and Fletcher pardoned nine of them. In August 2006, Fletcher reached a plea agreement in which prosecutors dropped charges in exchange for Fletcher’s admission of "wrongdoing by his administration" and his acceptance of responsibility for the "inappropriate action."

Despite some calls for him to step aside in this election, Fletcher ran for re-election and won a contested primary (over former Rep. Anne Northup among others) without needing a runoff. Beshear handily won his primary, beating expectations and avoiding a runoff by securing 40.9 percent of the vote (he needed 40 percent). As his running mate, Beshear has tapped Daniel Mongiardo, who nearly defeated Sen. Jim Bunning (R) in 2004.

Fletcher’s big primary win gives him some hope, showing that he is a strong campaigner. He is good at staying on message and is improving on the stump. Recently, he has begun hammering away at Beshear’s call for a referendum to allow state-run casinos to boost state revenues. (A recent poll showed voters evenly divided on the issue.)

Beshear, for his part, may be the perfect man for the job of beating Fletcher. An establishment Democrat with many statewide races under his belt (although mostly losing ones), Beshear knows his role is to play it safe, and he is capable of doing so. If Beshear doesn’t misstep, Fletcher will have a tough time climbing out of the hole he has dug himself.

While Kentucky is considered part of the South, it is, in many ways, a Midwestern state. It is unsurprising therefore, that in the last couple of years Democrats have utterly halted the GOP’s momentum (almost electing a Democratic senator in 2004 and defeating a Republican incumbent House member in 2006), mirroring Democratic gains across the Ohio River in Ohio and Indiana.

Beshear leads in nearly all polls and is the favorite. But with three months to go and the advantages of incumbency, a comeback is not out of the question. Leaning Democratic Takeover.

Louisiana Governor: Rep. Bobby Jindal (R) is the clear frontrunner in this open-seat contest, but a real race could develop. The "jungle primary" (with all candidates of all parties on the same ballot) will be on October 20. If no candidate receives a majority, the top two candidates move on to a runoff November 17. The scandal and disgrace of Jindal’s mentor, Sen. David Vitter (R), could complicate things.

Retiring Gov. Kathleen Blanco (D) would have almost certainly gone down to defeat if she had sought a second term, with her post-Hurricane Katrina performance (low-lighted by her crying on national television) an unredeemable stumble. Her missteps may prove to be just one more factor in the state’s realignment. As happened in Georgia, Mississippi, South Carolina and Alabama in 2000 through 2004, Louisiana — a conservative state by most measures — may be finally aligning its party loyalties with ideology. That spells trouble for Democratic hopes to hang on to the governor’s mansion.

Jindal is the odds-on favorite, and he even has a chance of winning without a runoff. Some early polls have placed him at more than 60 percent, while others put him right around 50 percent. Jindal lost to Blanco in 2003 — a fairly positive race that served him well, building his statewide name recognition. In 2004, Jindal easily won election as the 1st District’s congressman. Running on a platform of conservative reform, Jindal is part of a small, but increasingly important, new breed of Louisiana Republican — young, unafraid of conservative ideology and independent of the state’s corrupt political machinery. Politicians such as Jindal were the catalysts for the GOP takeovers elsewhere in the Deep South.

On the flip side, Louisiana’s leading new-breed conservative — and formerly Jindal’s chief booster — has been Sen. David Vitter, now known to have frequented a prostitute. At the least, this deprives Jindal of a very important backer. Democrats are trying to use Vitter’s sins — and his close ties to Jindal — against the front-runner, but so far this has not worked.

Jindal has been running statewide television spots longer than the other candidates — who have only recently jumped visibly onto the stage. This gives Jindal an advantage, but it also suggests that some of his broad support could be shallow and that once the voters are more focused on the race, the lagging candidates could gain.

The chief challenger in the race is state senator Walter Boasso (D). Boasso has climbed in his own polls recently from 6 percent in May to 13 percent in late July. In that stretch, he laid down $1.3 million in television ads. Boasso has been banking on Bush’s unpopularity and portraying Jindal as a stooge of Bush and Vitter.

The other Democrat on the radar screen is Public Service Commissioner Foster Campbell (D). Campbell is the only statewide office holder of the group, but he still lags.

Jefferson Parish businessman John Georges (R) could play GOP spoiler, forcing a runoff. Georges is a millionaire, and he spent $2 million of his own money earlier this month on a television buy. He still has at least $5 million more sitting around — a war chest equal to Jindal’s. His lower name recognition and Jindal’s popularity currently act as a real ceiling to his support.

Louisiana, more than any state in the country, is shifting towards the GOP amid nationwide Republican decline. This is in part due to the belated realignment and in part due to Hurricane Katrina. The storm, its aftermath and New Orleans’ poor state of preparedness may be a Republican problem in most of the country, but it’s a Democratic problem in this state with a Democratic governor, decades of Democratic machine politics and a Democratic mayor in New Orleans. Leaning Republican Takeover.