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Capital Briefs September 29

WILL OFFSHORE BAN EXPIRE? Eventually dwarfed by the mortgage bailout drama but nonetheless significant was the partial Democratic capitulation on Capitol Hill to Republican and constituent demands that the 26-year-old ban on offshore drilling and Western shale oil extraction be allowed to expire when the current fiscal year ends September 30. House Speaker Nancy Pelosi omitted a continuation of the ban from the House version of the continuing Resolution to keep the government going after that date. House GOP Leader John Boehner (Ohio) told reporters that the end of the ban as a win “for Americans struggling with record gasoline prices.” House Democrats privately believe that temporary capitulation on this issue was relatively unimportant and that the next Congress could reimpose a ban next year. Also Senate Leader Harry Reid (D.-Nev.) hopes to include a continuation of the ban in the Senate version of the continuing Resolution. (See “Legislative Lowdown.”)

FBI ON WALL STREET: As Congress moved closer to a $700 billion bailout of Wall Street, the FBI began investigating mortgage titans Fannie Mae and Freddie Mac, Lehman Brothers, and AIG, all at the center of the bailout controversy. Bureau sources say they are being investigated for possible fraud. The word of the investigation of the “Financial Four” came days after FBI Director Robert Mueller told reporters that 24 corporate lenders were already under investigation for misrepresenting their assets or other forms of fraud. Mueller, however, declined to name any of them.

OBAMA’S TREASURY CHIEF? As Democrats began to regain some confidence their candidate might make it to the White House after all, the liberal American Prospect magazine floated two fresh names to be secretary of the Treasury under a President Obama: Timothy F. Geithner, president of the Federal Reserve Bank of New York (who approved a $29 billion loan for Bear Stearns until the federal buyout was worked out), and Sheila Bair, chairman of the Federal Deposit Insurance Corporation (FDIC), who believes in refinancing sub-prime loans at affordable rates rather than foreclosing on the borrowers. Geithner is a veteran of Henry Kissinger’s staff and the Clinton Treasury Department, while Bair (who was a Bush appointee to the FDIC) is a former Senate staffer for Bob Dole.

HOW LONG BAILOUT DEBATE? That’s what members wondered late last week, as skepticism over the administration’s $700 billion financial bailout package mounted on Capitol Hill. Before Secretary of the Treasury Hank Paulson revealed the details of the package, National Republican Congressional Committee Chairman Tom Cole (R.-Okla.) told HUMAN EVENTS’ Political Editor John Gizzi that “it’s certainly a possibility” Congress could well stay in session until mid-October to consider the package. “The Democrats would like to get out of town, all right, so voters won’t be reminded of who’s in charge here,” said Cole, “While I would like the time to campaign, I prefer we take time to make a good decision. So if we have to stay here, we’ll stay here.” Rep. George Radanovich (R.-Calif.) told Gizzi that he and his GOP colleagues in the House “are growing increasingly leary about doling about $700 billion to people who caused the problem in the first place and no one calls supporting this thing something that has to be done overnight.”

CASH ON HAND: For all the talk of Democrats’ having a financial edge on Republicans this year, the National Republican Senatorial Committee, although still behind, is narrowing its cash disadvantage. The NRSC reported on September 1 that it had $26.8 million in cash on hand, after raising $5.2 million and spending $3.8 million during the previous month. In contrast, the Democratic Senatorial Campaign Committee had $33.67 million on hand, having raised $4.36 million and spent an eyebrow-raising $13.69 million during the previous month. Much of that was deployed on television ads in North Carolina, Oregon, Mississippi, and Colorado — states in which Republican-held Senate seats are major targets. NRSC Chairman John Ensign told HUMAN EVENTS that Sarah Palin has been a major factor in the renewed enthusiasm among NRSC donors. “I’d have her campaign for all of our candidates,” Ensign said, “and everyone would have her.”

AFTER THE BAILOUT NEWS: In the wake of early reports about the proposed $700 billion bailout of financial institutions last week, Barack Obama was clearly the beneficiary. According to a Diageo Hotline Poll completed on the Monday following the announcement of the proposed bailout, the Obama-Biden ticket was leading McCain-Palin among likely voters nationwide by 47% to 42%, with 9% undecided. The results represented a five-point gain for the Democratic ticket from the weekend, when the same survey showed Obama and McCain in a statistical tie. Diageo Hotline also showed that 55% of likely voters now consider the economy the most important issue in the ’08 campaign — an 11- point jump from September, when 44% rated the economy the top issue.

KEEPING A CLOSE WATCH: Signs are growing stronger that the turnout in November will be a modern high. The just-completed Gallup Poll showed that 43% of likely voters are watching the election campaign “very closely” — up from 30% who were watching it “very closely” at this time a year ago and the 36% watching “very closely” at this time in ’04. The same survey showed that another 44% are watching it “somewhat closely,” and, these results according to the Gallup organization, “significantly exceed anything Gallup has measured since it began asking that question in 1995.”   

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