Rick Perry: I support constitutional amendments to ban gay marriage and abortion

posted at 5:25 pm on August 3, 2011 by Allahpundit

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Two caveats to his otherwise strict support for the Tenth Amendment, both of which happen to serve the agenda of social conservatives whose votes he’s depending on. He backed away from his “states’ rights” defense of legalizing gay marriage last week; here’s the inevitable climbdown on abortion too, which he described as a states’ rights issue a few days ago. Follow that last link and re-read the post to see why it was predictable. I’m surprised he didn’t anticipate the tension his Tenther rhetoric on these issues would cause with his base, which he could have defused by mentioning his support for the amendments straightaway. There’s nothing necessarily inconsistent in that position: You can be a strong federalist and still condone federal solutions for exceptionally grave evils like slavery which the states, for various reasons, can’t be trusted to police as diligently as they should. That’s the core of the pro-life argument for an anti-abortion amendment — it’s a matter, literally, of life and death. What’s Perry’s argument, though, for why gay marriage qualifies as an “exceptionally grave evil” warranting a nationwide ban? Is smoking, say, an evil sufficiently grave to require a constitutional amendment outlawing it? (Don’t answer that, liberals.) He’s not in a legal trap here but he is in a philosophical one. And a political one, of course, as the press will use this to throw him off his economic message. Specify, please, which behaviors are so pernicious that we can’t risk letting parochial state legislatures deal with them.

Incidentally, as with Fred Thompson four years ago, the media’s “Perry as GOP savior?” hype is already being replaced by the “Perry as overhyped flop?” counter-narrative. Here’s Politico’s new piece wondering whether a tea-party-flavored Bush soundalike can get traction with the current conservative base. (One state Republican chairman compares Perry to “Will Ferrell doing a George W. Bush imitation.”) And here’s CNN noting that Perry’s upcoming prayer event, which can accommodate 71,000 people, has had just 8,000 registrants thus far. I doubt Perry cares — the real audience for that event is in Iowa, not Texas — but they’ll build that counter-narrative with any available brick. Exit question via Democratic pollster PPP: Does the GOP need Romney to win?

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Tea Party won the first skirmish of a long, long fight

posted at 2:05 pm on August 3, 2011 by Ed Morrissey
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Did anyone win in the recently concluded deal that reduced the upward trajectory of federal spending?  In my column for The Week, I argue that Barack Obama certainly was the big loser, having blown an opportunity that he himself cultivated for months to demonstrate leadership.  While the deal doesn’t feel like a win to Tea Party activists at the moment, I argue that they won an important opening skirmish:

    Reid gave up on tax hikes, not because he got tired of talking about them, but because there isn’t any appetite for tax hikes on Capitol Hill — thanks to the power and influence of the Tea Party. The cuts mandated in this compromise might be paltry, especially at first, but they represent a step in the right direction. For the first time in perhaps decades, Congress will approach budget shortfalls by looking at where spending can actually be reduced rather than where revenue can be raised.

    That is a remarkable paradigm shift, and one worthy of celebration after a decade of exploding deficits from Congresses controlled by both parties. Without the Tea Party, that paradigm shift would never have occurred. Indeed, without the Tea Party and their victorious candidates, the debt-ceiling increase would have been a routine vote noted only by a few bloggers and the back pages of most newspapers.

    Understandably, most Tea Party activists see this as business as usual and not the kind of transformative, instant change they envisioned. But just as Rome wasn’t built in a day, it will take much more than one vote or one budget to build the kind of limited, fiscally responsible America that these activists desire. The expansion of the federal government has gone on for decades, and it will take many battles and victories, small and large, to reverse it. This is a long journey, and the Tea Party helped push the nation into taking a step in the right direction.

There are two dangers in incremental victories, which are closely related to one another.  The first is that they tend to discourage activists who want big, unmistakable, validating victories.  However, those will only come with big, unmistakable majorities in Congress and a different President in the White House.  Given the relative weight of the Tea Party caucus on Capitol Hill in this Congressional session makes the win here even more remarkable. It’s very important to remember that our political system is heavily weighted against radical change in the short term, and that lasting change takes patience and long-term planning.

The second danger is that the activists will turn on each other and on their nominal allies.  If that happens, they will lose the ability to grow their standing in Congress.  Worse, they will alienate those who want to work towards the same general goals but who may differ on tactics and time lines.  That will bring incremental progress to a halt, while at the same time pushing activists into giving up altogether.  We need to avoid a “Mission Accomplished” mentality, but more importantly recognize that incremental progress is not futile.

Meanwhile, on the other end of the ledger, Barack Obama comes out as the biggest loser in this fight.  I give an explanation for that in my column, but two media reports today confirm this as a consensus position.  First, The Hill takes us inside the negotiations, where John Boehner apparently ordered the President out of negotiations at one point:

    GOP aides and lawmakers, speaking on background, portrayed Boehner as the calm negotiator who repeatedly exasperated President Obama.

    Boehner last month asked the networks to televise his response to Obama’s address to the nation, a request which infuriated the White House, Republican sources said.

    On July 23, they claim, the White House called Minority Leader Nancy Pelosi (D-Calif.), telling her not to participate on a call with Boehner, Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). Pelosi informed Reid, who declined to participate, and the call was canceled, the Republican sources said. (A Pelosi spokesman could not be reached for comment.)

    Later that day, the four leaders met with Obama at the White House. At one point, GOP officials said, the Democratic and Republican leaders asked Obama and his aides to leave the room to let them negotiate.

Reid reneged on the agreement that was reached at that point under pressure from the White House, according to the Hill’s account based on their GOP sources.  Obama had to send Joe Biden into the final negotiations instead.  But it’s not just Republicans who are painting Obama as a bumbling negotiator, as the LA Times reports:

    Moreover, many Democrats — including some ordinarily sympathetic to the president — feel part of the problem is of Obama’s own making. …

    Given the acrimony and the high-stakes deadline, the impasse posed a severe test of Obama’s negotiating skills. On the fly he sought to improve his relationship with Boehner, inviting the speaker to play a round of golf early in the talks. But White House officials believe that personalities aren’t at the root of congressional paralysis. …

    Others are more critical, comparing Obama unfavorably with presidents who made broad use of their executive powers in times of crisis: Harry Truman, who nationalized the steel industry in 1952 in the face of a steel strike, for example, or John F. Kennedy, who denounced steel executives for price increases and threatened them with an antitrust investigation.

    “I am just sorely upset that Obama doesn’t seize the moment,” Sen. Tom Harkin (D-Iowa) said as the final deal was coming together. “That’s what great presidents do in times of crisis. They exert executive leadership. He went wobbly in the knees.”

The White House apparently hopes that the deal will eventually be popular enough for Obama to benefit, but the problem with that idea is that Obama had nothing to do with the eventual deal.  His only stated demand — higher taxes — got taken off the table more than a week before the compromise.  At the end, Obama ended up accepting a Congressional diktat rather than leading the path to a solution.  Obama ended up as little more than a spectator at his own leadership opportunity, and everyone knows it

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10 dirt-cheap housing markets

Youngstown, Ohio. Median price: $55,400
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Youngstown, Ohio. Median price: $55,400
A Youngstown mansion costs just $150,000
• Where is America's cheapest real estate?

If you're hunting for a real estate bargain, look no further: Here are 10 cities where the typical home costs less than $82,000.

The nation's cheapest major housing market is the area in and around Youngstown, Ohio. There, the median home price barely breaks $55,000, according to the National Association of Realtors. We're not talking about hovels in slums; these are well-kept homes in nice suburban or city settings priced at levels to make consumers in pricey coastal markets ache with envy.

Want something even nicer. There is a seven bedroom, 4,800 square foot home -- 19 rooms total -- well kept and in the historic district on the market for $150,000. That's not a misprint.

Take your time house hunting: That could save you some dough. Fiserv, the provider of real estate information and analysis, is forecasting a further home price decline in 2011 totaling nearly 12% for the year.

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What about us? Responsible homeowners left out in the cold

Responsible borrowers who have good credit and make their payments on time are being told that the only way they can refinance is if they start defaulting on payments.
No relief for the responsible
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No relief for the responsible

Consider it yet another cruel irony of the housing bust: While hundreds of thousands of mortgage borrowers have been able to squat in their homes without making a single mortgage payment in months or even years, many responsible homeowners who have good credit and consistently meet their monthly obligations haven't been able to refinance in order to avoid losing their homes.

Many of today's homeowners purchased their homes during a time of easy credit, when mortgage products, like interest-only loans and option adjustable-rate mortgages were issued to the marginally qualified. And many were told that -- if they made their payments faithfully -- they could easily refinance out of these products into affordable fixed-rate loans once the payments started to balloon.

But that day has never come for some borrowers -- no matter how good their payment record or credit score.

Many lenders are refusing to refinance underwater mortgages -- loans that are higher than the value of the home -- because it would mean big losses for them if the borrower defaults, said Mark Zandi, chief economist for Moody's Analytics.

According to data submitted to federal regulators and analyzed by the Wall Street Journal, nearly 27% of mortgage applicants were denied mortgages in 2010, up from 23.5% a year earlier.

The cruelest twist? Lenders typically wait until a homeowner is in default before they are willing to modify their mortgage.

For some homeowners, the clock is ticking. In 2011, $1 trillion in adjustable rate mortgages are scheduled to reset. And many are scrambling to refinance their mortgages while rates are still low -- to no avail.

"What's breaking my heart is the people making payments every month who can't refinance their mortgages, through no fault of their own," said Senator Barbara Boxer (D-Calif.).

She has co-sponsored a bill, the "Helping Responsible Homeowners Act," for borrowers who want to refinance but are in "negative equity," owing more on their mortgages than their homes are worth.

Boxer's legislation also requires banks to offer interest rates comparable to what they're giving to borrowers who are not underwater. And it bans risk-based fees for mortgages issued by Fannie Mae or Freddie Mac that can be as much as 2% of the loan principal.

Here are four responsible homeowners who are currently trying to refinance their loans.

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Awww: Obama campaign to blame debt negotiations for lower fundraising this summer

posted at 12:45 pm on August 3, 2011 by Ed Morrissey

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You know how it is when you keep putting off important tasks, like mowing the lawn, taking out the trash, and resolving budget standoffs with Congress. If you don’t handle them when you’re supposed to do so, they end up getting resolved at the most inconvenient times:

President Barack Obama’s campaign expects to raise tens of millions of dollars less this summer than it did in the spring because negotiations over the nation’s debt limit forced Obama to cancel several fundraisers.

Obama’s campaign said Wednesday it canceled or postponed 10 fundraisers involving the president, Vice President Joe Biden andWhite House chief of staff Bill Daley in the past month because of the debt talks, scrubbing events in California, New York and elsewhere.

Only weeks after the president’s campaign reported collecting a combined $86 million with the Democratic National Committee, Obama’s team is trying to lower expectations about its fundraising juggernaut while signaling to its army of volunteers and activists that they need to fill the void. Obama is coming off a bruising battle with congressional Republicans over raising the government’s debt ceiling and is expected to face a formidable challenge from Republicans in 2012 against the backdrop of a weakened economy.

“We’re going to raise significantly less in the third quarter than we did in the second quarter,” said Jim Messina, Obama’s campaign manager. “We will not be able to replace all of these events just because of his busy schedule. We always knew that he had his job and we had to do this around his schedule, and the truth is we just have to deal with canceling a month’s worth of events.”

Well, if Congress had addressed the debt ceiling and deficit reduction during 2010, Obama wouldn’t have had to spend three whole weeks in Washington negotiating with John Boehner. Democrats failed to pass a budget for FY2011 while they had large majorities in both chambers of Congress. Harry Reid refused to raise the debt ceiling in December during the lame-duck session, specifically because Reid wanted Republicans to get their hands dirty on the debt ceiling.

Obama doesn’t have any excuses, either. Almost as soon as Reid bailed on raising the debt ceiling, Obama’s team began raising the specter of default. What did Obama do to avoid the problem? In February, Obama submitted a budget request that increased the rate of deficit spending. When that flopped, Obama promised to produce a plan to reduce the deficit, using a national address in April to underscore the point. And then …. nothing. No plan, no specifics, just nothing until July, when Republicans offered plan after plan and Obama refused to accept them until utterly forced to do so.

If the President had done his job in February or even April, then none of this would have been necessary. Instead, Obama chose to lead from behind. If that caused him to miss fundraisers, it’s no one’s fault but his own. And that might be a much bigger reason for lower fundraising numbers this summer, fall, and winter

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Biden to Gabby Giffords: “Welcome to the Cracked Head Club”

posted at 8:30 pm on August 2, 2011 by Allahpundit
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Via Breitbart TV. Since we’re grooving on insane left-wing double standards today, here’s the second thing this guy has said in the past 24 hours that would have become a national media scandal had his party affiliation been different. And before one of our three lefty readers wonders — no, this isn’t a Fox scoop. Other reporters heard Biden say it, including one from the Boston Globe. Which raises the question, what’s the dumbest part of this? That he’d joke about a cracked skull with Gabby Giffords, who may very well prove to be permanently disabled from having “joined the club”? Or that he found it amusing enough to share the anecdote with reporters later on? Free advice for conservatives and independents: Do not attempt this “joke.” Not only is it tone-deaf and callous, but you won’t get graded on the curve afterward. (“Oh, that Joe!”)

Giffords herself, you’ll be glad to know, is coming along well enough that Debbie Wasserman-Schultz thinks she can make it back to Congress. But reports early this morning that she’s planning to run for reelection turned out to be wrong. They’re hopeful that she’s well enough, but it’s still wait-and-see.

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Bottom-lining the debt deal

posted at 2:00 pm on August 2, 2011 by Steve Eggleston
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There’s been a lot of numbers and rhetoric tossed about on what the debt deal (shortened to The Deal, not because I like it, but because it makes the phrase stand out) does and doesn’t do. However, I don’t believe anybody has done an exploration of the absolute effect is. It’s high time to do so.

Baselines matter

First, the base from which the reductions are to be needs to be established. While that base has been established to be a “modified” version of the March 2011 Congressional Budget Office extended-baseline scenario, a quick review of which is part of the CBO’s review of the President’s FY2012 budget proposal.

The extended-baseline scenario assumes the CBO’s estimates, based on current law and not necessarily current policy, of direct spending (which, among other things, ends the Medicare “doc fix”) and revenues (which, among other things, assumes that all of the Bush tax rates expire at the end of 2012 and the Alternate Minimum Tax is no longer “indexed” to keep middle- and lower-income Americans from being caught in that trap), and that every top-line category of discretionary spending that does not explicitly end in FY2010 is increased at the rate of inflation.

The bottom line on that is that, on $39.03 trillion in revenue and $45.77 trillion in outlays, there would be $6.74 trillion in deficit spending. However, there are a couple of “wrinkles” that were added to that in the baseline used.

Normally, that would include spending on what used to be known as (and is still called by the Republicans on the House Budget Committee) the Global War on Terror. However, every entity, from the White House to the House of Representatives to the Senate Democrat leadership, agrees that, instead of spending $1,589 billion over the next 10 years as the extended-baseline scenario calls for, $545 billion will be spent. While the CBO excluded the entirety of that at the request of Congress as it is not part of this bill, I will add the $545 billion back in, using the House budget spending by year, as there is no difference year-to-year between the President’s and the House of Representatives’ budgets.

Also, the CBO, at the request of Congress, has figured in the effects of the final FY2011 continuing resolution. That is another $122 billion reduction in spending.

Taking the full effect of those modifications into consideration, the federal government would take in $39.03 trillion in revenue, spend $44.60 trillion, and run a 10-year deficit of $5.57 trillion.

There are a couple of other “baselines” that one could choose. The President’s budget, according to the CBO, would take in $36.70 trillion in revenue, spend $46.17 trillion, and run a 10-year deficit of $9.47 trillion. That budget already includes all of the modifications above.

An “Alternate Fiscal Scenario” from the CBO, which assumes various spending and revenue options, including those outlined above, are affirmatively extended rather than allowed to expire or otherwise not happen and last outlined in percentage-of-GDP form in June, would also need to be adjusted by the above adjustments. Once that is done, it would presume $35.05 trillion in revenues, $46.81 trillion in spending, and $11.76 trillion in deficits.

Meanwhile, the House budget, which keeps all of the Bush tax rates, indexes the AMT, and does some further tax cuts, envisions $34.87 trillion of revenues, $39.96 trilion of spending, and $5.09 trillion of deficit spending. Like the President’s budget, it already includes all the modifications above.

The first 2 years – $63 billion in scorable deficit reduction versus the “adjusted” CBO baseline

Like the CBO, I cannot and will not attempt to score the effects of a potential $1.2 trillion in “trigger” cuts, $1.5 trillion in “commission” cuts, or adoption of a Balanced Budget Amendment. However, I have actually read the bill, and the discretionary spending caps are, unlike the $1.2 trillion-$1.5 trillion in “additional cuts”, actual hard numbers, not nebulous percentages or “reduction” numbers”. Therefore, actual bottom-line spending comparisons can be made against any base. As the CBO used an adjusted version of their March 2011 baseline, I added the (all-but-)agreed-to spending levels on the GWOT to do so.

Using the adjusted CBO baseline, there would be, between FY2012 and FY2013, $5.65 trillion in revenue, $7.34 trillion in spending, and $1.69 trillion in deficit spending. Adopting The Deal l would knock the spending down to $7.28 trillion and deficits down to $1.63 trillion.

By way of comparison, the President’s budget would have $5.44 trillion in revenue, $7.51 trillion in spending, and $2.07 trillion in deficits. That’s an additional $233 billion in spending and $438 billion in deficits versus The Deal.

The House budget would have $5.39 trillion in revenue, $7.09 trillion in spending, and $1.69 trilllion in deficits. While spending in the House budget would be $190 billion less than The Deal and $253 billion less than the adjusted CBO baseline, the deficit would be slightly higher than The Deal and insignifiantly less than the adjusted baseline as, instead of the Bush tax rates expiring at the end of 2012 (1/4th the way through 2013) and the AMT “indexing” not happening, both would continue as they have the past 8 years.

The “out” years – $855 billion in “scorable” deficit reduction – if The Deal holds

I will preface this that there is a significant amount of debt service savings from the reductions in spending on the GWOT that were scored in the two budgets that were not scored separately in even the CBO analysis of the Senate proposals. Judging by the CBO scoring of the Senate proposal versus the House proposals and The Deal, that is roughly $220 billion in reduced spending over the 10 years not reflected in either the adjusted CBO baseline or The Deal.

Also, the bulk of the $1.2 trillion-$1.5 trillion in additional deficit reduction, or any adoption of a Balanced Budget Amendment, will happen in this time frame. As noted above, that cannot be properly scored as yet.

With that said, the adjusted CBO baseline anticipates $33.39 trillion in revenues, $37.26 trillion in spending, and $3.87 trillion in deficits between FY2014 and FY2021. The Deal changes the spending to $36.41 trillion and the 8-year deficit to $3.02 trillion.

The President’s budget is a veritable blowout of spending, especially deficit spending. On $31.26 trillion of revenue, there would be $38.67 trillion of spending and $7.40 trillion of deficits.

While the House budget would continue to spend less at $29.48 trillion, its reduced expectation of revenue of $32.87 trillion would result in $3.39 trillion in deficits.

What about tax hikes?

While The Deal does not explicitly address taxes, I’ve got bad news for everybody (or at least everybody who thinks a non-WWII record level of revenues as a percentage of GDP in 2021 is a bad idea) on that front. Any attempt to either extend any part of the Bush tax rates beyond 2012 or keep “indexing” the AMT will be scored as a deficit increase. The back-of-the-envelope numbers on the various proposals are that the “scored” increase would be about $2.5 trillion for the Obama “hold those under $200K/$250K harmless” plan, $3.5 trillion for full extension of the Bush tax rates, and $4.2 trillion to continue the entirety of the current tax structure.

What about S&P and Moody’s?

Again, baselines matter. Unfortunately, neither S&P nor Moody’s appear to have mentioned from which baseline they wanted the “$4 trillion in deficit reduction”. It has been said that Cut, Cap and Balance, even before adoption of the Balanced Budget Amendment, would have met that. However, I have not seen any CBO score on that.

Moreover, up until the Congressional leadership decided to start talking to each other instead of with President Obama, it was widely assumed the $4 trillion that was being talked about was against the President’s budget and its $9.47 trillion 10-year deficit spending. The House budget, and the Cut, Cap and Balance bill that, after higher spending in FY2012 compared to that, used percentage-of-GDP spending levels based on that budget, would easily have cleared that hurdle.

Going against the President’s budget, The Deal, with $4.65 trillion in 10-year deficit spending, also would very easily clear that hurdle, even before the “trigger”/commission/BBA. Moody’s has already said they would maintain a negative outlook on the US soverign debt, while S&P is making noises that they will downgrade the debt. I have to wonder what more those credit rating agencies want.

Revisions/extensions - I really need to proofread these opii. Corrected a typo. I hope there isn’t more.

This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look

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Obama in Pennsylvania virtual tie with … Rick Santorum?

posted at 1:22 pm on August 2, 2011 by Ed Morrissey
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Bad news comes out of the must-carry state of Pennsylvania today for Barack Obama and his re-election hopes.  Not only has Obama fallen far below water in his approval rating in the latest Quinnipiac poll, he has now dropped into a tie against a potential Republican nominee.  No, this isn’t a generic Republican, either:

    The protracted slugfest over raising the national debt limit leaves President Barack Obama with a 54 – 43 percent disapproval among Pennsylvania voters, but he scores better than Republicans or Democrats in Congress, according to a Quinnipiac University poll released today. …

    Pennsylvania voters say 52 – 42 percent that Obama does not deserve to be reelected. Matching the president against possible Republican challengers shows:

        Former Massachusetts Gov. Mitt Romney with 44 percent to Obama’s 42 percent;
        Former Pennsylvania Sen. Rick Santorum with 43 percent to Obama’s 45 percent;
        Obama leads Minnesota U.S. Rep. Michele Bachmann 47 – 39 percent;
        Obama tops Texas Gov. Rick Perry 45 – 39 percent.

The internals of the poll look even worse for Obama.  The overall deserves-re-election number is 42/52, a very bad number in Democrat-heavy Pennsylvania, where Democrats account for half of all registered voters.  Independents split almost exactly the same at 42/51, and the only region in which Obama has a majority for re-election is Philadelphia.  Even among union households, which should be Obama’s bread and butter, he only gets a narrow 48/45 split, roughly a virtual tie.

The head-to-head numbers are simply embarrassing for a Democratic President in Pennsylvania, especially against a former Keystone State Senator who got blown out in his last statewide election.  There is another reason to worry, too, in that series.  Obama doesn’t get to 50% against any Republican in head-to-head matchups, usually a big red flag for incumbents.  The best he does is 47% against Michele Bachmann.

If Obama is doing this badly in Pennsylvania, it strongly suggests a big opening in the Rust Belt for Republicans next year.  Democrats in Michigan have a similar registration advantage, but not in Ohio, Indiana, or even Wisconsin, which have similar demographics as Pennsylvania and all of which Obama carried in 2008.  Obama has a big, big problem in this region, and losing Pennsylvania might just be the beginning of his woes.

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Open thread: Senate to vote on House-passed debt deal at noon Update: Senate passes debt deal, 74-26 Update: President ends this saga, signs debt deal

posted at 11:20 am on August 2, 2011 by Tina Korbe

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After a dramatic night in the House of Representatives last night, the disappointment of a debt deal that passed the House heads to the Senate, where it faces seemingly fewer obstacles than it faced in the House.

But that doesn’t mean passage will be “easy.” Senate Majority Leader Harry Reid has said no amendments will be allowed and the plan requires a supermajority of 60 votes to pass. One notable “no” vote will come from Senate Budget Committee ranking member Sen. Jeff Sessions (R-Ala.). The senator who has been sounding the warning bell about an eleventh hour deal for months — and who has kept the count as to how many days the Senate has gone without passing a budget resolution (825!) — explains why he can’t support the deal:

“We’re getting pretty far away from the traditions of this body when you don’t publicly debate a budget, you create a committee of limited numbers of people to produce legislation that can’t be amended,” Sessions says in the video. “For those reasons, I feel like as a Senator and the ranking member on the Budget Committee who’s wrestled with this for some time, I would not be able to support the legislation. Though, I truly believe it is a step forward, and I respect my colleagues who’ve worked hard to try to bring it forward.”

Sen. Mike Lee (R-Utah), whose name has become almost synonymous with the push for a balanced budget amendment, is still a “no” vote, as is Sen. Ron Johnson (R-Wis.), while Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. John McCain (R-Ariz.) remain “yes” votes, of course.

Senate Democrat opposition to the deal doesn’t rival Democrat opposition in the House, where Rep. Emanuel Cleaver created news by calling the deal a “sugar-coated satan sandwich” and House Minority Leader Nancy Pelosi implied it also features “satan fries on the side.” But I’ll keep an eye out for any likely “no” votes from the left side of the aisle.

Again, though, the bill is broadly expected to pass. Bill Hemmer just said the guidance Fox News has received suggests the Senate will give it at least 70 votes — so it won’t even be close. After that, attention will turn to the 12-member special commission.

Meanwhile, rumors of a downgrade despite the deal continue to circulate.

Update I: Reid is on the Senate floor right now, saying, “We were on the brink of disaster, but, one day before the deadline, we were able to avert that disaster. … There’s principally one winner through all of this: the American people. … The result of this Tea Party direction of this Congress has been very disconcerting. It stopped us from arriving at a conclusion much sooner. …”

Update II: Bill Hemmer just tweeted and AP reports that 60 senators have already voted “yes” for the deal, which means it passes. But the roll call continues. Guy Benson tweets that four Democrats have voted “no” so far: Sen. Frank Lautenberg (N.J.), Sen. Robert Menendez (N.J.), Sen. Tom Harkin (Iowa) and Sen. Bernie Sanders (VT).

Update III: The deal has passed, 74 to 26. Three more Dem “no” votes: Sen. Kirsten Gillibrand (NY), Sen. Jeff Merkley (Ore.) and Sen. Ben Nelson (Neb.). Now awaiting the president’s speech from the Rose Garden …

Update IV: In his Rose Garden speech, the president issued veiled instructions to the deficit-reduction joint committee created by the debt deal — instructions that amounted to, “Raise taxes.” For more, see my upcoming post in just a bit.

Update V: The president just signed the debt deal. Aaaannnddd … it’s over. For now.

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New ObamaCare mandate: no co-pays on contraceptives

posted at 12:45 pm on August 2, 2011 by Ed Morrissey
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The ObamaCare bill has resulted in an explosion of ambiguity and arbitrary rulings, mainly focused at first on temporary waivers for some insurers and employers on requirements for meeting the threshold of payouts to premiums.  The Department of Health and Human Services stopped issuing waivers under pressure from Congress to explain their methodology, but a new ruling by Kathleen Sebelius will likely prompt even more protests.  The Obama administration ordered insurers to cover prescription contraceptives and a range of other “women’s wellness” services and products without co-pays:

    Health insurance plans must cover birth control as preventive care for women, with no copays, the Obama administration said Monday in a decision with far-reaching implications for health care as well as social mores.

    The requirement is part of a broad expansion of coverage for women’s preventive care under President Barack Obama’s health care law. Also to be covered without copays are breast pumps for nursing mothers, an annual “well-woman” physical, screening for the virus that causes cervical cancer and for diabetes during pregnancy, counseling on domestic violence, and other services.

    “These historic guidelines are based on science and existing (medical) literature and will help ensure women get the preventive health benefits they need,” said Health and Human Services Secretary Kathleen Sebelius.

    The new requirements will take effect Jan. 1, 2013, in most cases. Tens of millions of women are expected to gain coverage initially, and that number is likely to grow with time. At first, some plans may be exempt due to a complex provision of the health care law known as the “grandfather” clause. But those even plans could face pressure from their members to include the new benefit.

Let’s put this in its proper context.  Thanks to this new mandate, insurers will eat hundreds of millions or perhaps billions of dollars in additional costs each year.  Guess how they will recoup those costs?  Premiums will rise across the board, meaning that everyone will pay the additional cost as well as the specific patients getting the services and products.

Does this solve some sort of pressing gap in society?  Not really.  As the Huffington Post report notes, contraceptive use is already nearly universal.  The report quotes a government study that shows 90 million prescriptions for contraceptives are dispensed annually.  Clearly, there is no big gap in access due to having co-pays for the Pill.  If poor women had problems paying the additional cost, then HHS could have ordered Medicaid to end co-pays, a power that was already within their jurisdiction before ObamaCare’s passage.

So where does this end?  Do we next mandate an end to co-pays on Lipitor because cholesterol is a problem in American health?  I can tell you that the co-pays on that medication are higher than on most and probably represent more of a barrier to access than co-pays on the Pill, let alone access to breast pumps and counseling on domestic violence.

This is a preview of life under ObamaCare.  This edict got handed down from the mountain purely for political purposes.  The Obama administration wants to bolster its standing with women ahead of the next election; this mandate will probably get featured in an endless series of campaign ads.  “President Obama protects women!” the copy will read.  In the meantime, rational provider-patient cost sharing on non-critical products and services will be discarded, forcing the rest of us to eat the cost in higher premiums.  It’s the ultimate in arbitrary exercises in authority.

And people wonder why employers, who have to price the costs of adding positions, aren’t hiring any more.

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Palin: House passage of debt deal is a victory for the Tea Party

posted at 12:00 pm on August 2, 2011 by Tina Korbe

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It seems to be the new talking point: The deal is a victory for conservatives not because of what it does (which is, not much!), but because it supposedly represents a change in the direction of the debate. Once, Washington discussed what to grow. Now, Washington discusses what to cut. Even former Alaska Gov. Sarah Palin has echoed the theme — but with qualifications. The Wall Street Journal Washington Wire reports:

    Former Alaska Gov. Sarah Palin said Monday’s House vote to lift the debt ceiling was a victory for the tea party, proving that conservative activists had shifted the conversation in Washington.

    “We shall take this victory and make sure our politicians in office today are learning from this victory,” Ms. Palin said Monday night on Fox News, where she is a paid contributor. “It’s not a 100% pure genuine victory. We just handed the most liberal president, I believe, in U.S. history a $2.4 billion debt increase.” …

    Ms. Palin didn’t fully embrace the deal, saying she had plenty of problems with the compromise  between the White House and congressional leaders, including Republican House Speaker John Boehner. In the past, the former governor said she was not convinced America would face a default if lawmakers did not raise the debt ceiling by Aug. 2.

Meanwhile, Rep. Steve King (R-Iowa), one of the founders of the Tea Party Caucus in Congress (along with GOP presidential candidate Rep. Michele Bachmann), says the deal can’t possibly be touted as a win.

“The Tea Party is not calling this a victory,” Rep. Steve King (R-Iowa) said today on Fox News. “I’m certainly not.”

It’s perplexing, really — the way so many conservatives changed their minds at the last minute. About a week ago, Palin called for any supposedly small-government freshman who voted for a debt ceiling increase to face a “contested” primary. Now, she’s silent on the subject of the 59 House freshmen who voted for the deal. And what about the 59 freshmen who voted that way in the first place? What accounts for their support? What accounts for Boehner’s comment that he got “98 percent” of what he wanted, when he clearly didn’t?

The effort to spin this compromise as a conservative victory is impressive — and it makes sense. No one wants to declare themselves diminished politically. And this deal enables leadership to tout its ability to garner votes, to prevent default, etc., etc. etc. But it’s still just a political victory. It’s not a solution. And to rest too much on the laurels of maybe-no-tax-hikes and at-least-it’s-not-a-clean-debt-ceiling-increase obscures the distance the country still has to go. Better to stay focused on the facts: The nation is still spending money it doesn’t have (we’re borrowing about $2 million every minute of every day!). The government is still growing (keep in mind the cuts are to increases in spending over the next 10 years).

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Europe Pushes to Revive UN Resolution Condemning Syria’s Assad

August 01, 2011, 1:28 PM EDT
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    UN Security Council Will Meet to Discuss Violence in Syria
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    Syrian Military Extends Hama Assault on First Day of Ramadan
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    Emerging Stocks Fall for Third Day on U.S., Europe Debt Concern


By Flavia Krause-Jackson and Bill Varner

Aug. 1 (Bloomberg) -- U.S. and European allies today are seeking to resuscitate efforts at the United Nations to pressure Syrian President Bashar al-Assad to halt the bloodiest crackdown yet on anti-government protesters.

In response to a German call, the UN Security Council will meet today at 5 p.m. in New York to discuss the escalating violence in Syria, where security forces killed more than 150 people over the last two days. China, Russia, Brazil, South Africa and India -- which has taken over the council’s rotating monthly presidency -- have blocked adoption of a draft resolution first circulated on May 25.

The attack on Hama, accounting for the bulk of the deaths, is among the most vicious episodes in the uprising that began more than four months ago and was unleashed at the start of the holy Muslim month of Ramadan. The Security Council must urgently respond to the ongoing crackdown by referring the situation to the International Criminal Court, Amnesty International said today in a statement.

“I would like to see a UN Security Council resolution to condemn this violence,” U.K. Foreign Secretary William Hague told BBC Radio 4. Still, getting the UN’s decision-making body to act will be “difficult work,” he said.

French Foreign Minister Alain Juppe said that “in these horrifying circumstances, France hopes more than ever that the United Nations Security Council will shoulder its responsibilities by speaking out loud and clear, as the United Nations secretary-general has done several times.”

President Barack Obama, in a strongly phrased criticism of Assad, said yesterday that the U.S. will “increase our pressure on the Syrian regime, and work with others around the world to isolate the Assad government.”

Russia Toughens Stance

In a sign of that Russian opposition to some form of UN action may be thawing, the Foreign Ministry in Moscow put out its toughest statement yet on Syria, saying the use of force against civilians and government representatives is “unacceptable” and “should be stopped.” Officials in Moscow have been reluctant to speak on what they see as a domestic matter.

“There is no real change in the Russian position on Syria, but this statement serves as a kind of insurance policy for Moscow to take further steps at the UN,” Fyodor Lukyanov, an analyst at the Council on Foreign and Defense Policy in Moscow, said by telephone.

Ramadan

Government forces resumed their assault on Hama today on the first day of Ramadan, shelling it early this morning and destroying four buildings, while also attacking the eastern city of Deir al-Zour and the town of Bukamal, Mahmoud Merhi, head of the Damascus-based Arab Organization for Human Rights, said by telephone.

At least 10 people were killed today, Merhi said, while Syrian state television said yesterday that an army colonel and two other soldiers were killed by armed men in Deir al-Zour.

The latest assault came as opposition forces vowed to step up their campaign against Assad during Ramadan. Family and community groups typically gather for evening meals during the month to break their fasts and more people attend special services at mosques. That may make it easier for opposition leaders to organize daily rallies along the lines of those held for the past four months after Friday prayers.

The government “has been very frightened by Ramadan’s onset,” Joshua Landis, a Syria specialist who directs the Center for Middle East Studies at the University of Oklahoma in Norman, said in a telephone interview. “The unfolding crackdown is going to fuel people’s anger.”

No Military Intervention

German Foreign Ministry spokesman Martin Schaefer told reporters in Berlin that it remained to be seen whether the violence over the weekend will prompt reluctant partners to change their position.

“There is no prospect of a legal, morally sanctioned military intervention; therefore we have to concentrate on other ways of influencing the Assad regime and trying to help the situation in Syria,” Hague told the BBC. “It is a very frustrating situation.”

At least 2,000 protesters have been killed since the demonstrations began in mid-March, according to Merhi and Ammar Qurabi of the National Organization for Human Rights.

The unrest poses the biggest challenge to Assad’s rule since he inherited power from his father, Hafez al-Assad, 11 years ago. Assad has blamed the protests on foreign-inspired plots, while conceding that some demonstrators have legitimate demands and pledging political changes.

The European Union imposed an asset freeze and travel ban on five Syrians “responsible for and associated with repression,” Catherine Ashton, the EU’s foreign-policy chief, said in an e-mailed statement, without identifying the people.

--With assistance from Brian Parkin in Berlin, Massoud A. Derhally in Dubai, Ilya Arkhipov in Moscow, Patrick Henry in Brussels and Gregory Viscusi in Paris. Editors: Terry Atlas, Leslie Hoffecker

To contact the reporters on this story: Flavia Krause-Jackson at the United Nations at fjackson@bloomberg.net; Bill Varner at the United Nations at wvarner@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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‘Dire’ Finances Forces Rhode Island City Into Bankruptcy

August 01, 2011, 1:00 PM EDT
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By Michael McDonald and David McLaughlin

(Updates with Moody’s report in fifth paragraph.)

Aug. 1 (Bloomberg) -- Central Falls, Rhode Island’s poorest city, filed for Chapter 9 bankruptcy protection as it struggles to meet its pension obligations.

The petition was filed today after state officials failed to persuade unionized police, firefighter and municipal retirees to accept voluntary benefit concessions, according to a statement from Robert Flanders, a judge appointed to oversee the city’s finances. Flanders said he asked the court to reject existing collective-bargaining agreements with the unions.

“The current situation is dire, and necessitates decisive steps to put the city back on a path to solid financial footing and future prosperity,” Governor Lincoln Chafee, who joined Flanders in announcing the bankruptcy petition today, said in the statement. “We will be exploring all options to provide quality services at an affordable cost to all taxpayers.”

Central Falls, a city of about 18,000 located about 6 miles (9.7 kilometers) north of Providence, is the fifth municipal entity to file for bankruptcy this year, compared with six in all of 2010, according to data compiled by Bloomberg. The filing followed last week’s move by lawmakers in Jefferson County, Alabama, to postpone a vote on proceeding with what would be the biggest U.S. municipal bankruptcy.

Out of Assets

The Central Falls pension plan was expected to run out of assets by October without additional funding or significant concessions from both current employees and retirees, according to a June 17 report from Moody’s Investors Service. The rating company at the time lowered the city’s credit grade one level to Caa1, its 17th-highest of 21, from B3.

The pension’s obligations were $48 million greater than the fair value of its assets as of June 30, 2010, according to data compiled by Bloomberg. Central Falls in fiscal 2011 continued its practice of not making its required contribution to the municipal pension and drew on existing plan assets to pay benefits, Moody’s said.

Central Falls has about $21 million of outstanding debt, New York-based Moody’s said. The city’s per-capita income is 50 percent of Rhode Island’s, according to the company.

Gina Raimondo, the state’s treasurer, released a statement today saying she doesn’t expect the bankruptcy filing “to hinder the state’s ability to access the bond markets in the coming months.”

Frank Bailey, a U.S. bankruptcy judge in Massachusetts, will oversee the bankruptcy for the city, according to a court filing.

The case is In re City of Central Falls, 11-13105, U.S. Bankruptcy Court, District of Rhode Island (Providence).

--With assistance from Martin Z. Braun in New York Editors: Mark Tannenbaum, Andrew Dunn

To contact the reporters on this story: Michael McDonald in Boston at mmcdonald10@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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‘Embarrassed’ Corporate Leaders Quiet on Debt-Ceiling Fight

August 01, 2011, 12:44 PM EDT

More From Businessweek

Debt-Limit Agreement to Likely to Pass, Republican Leaders Say

Obama Says Congressional Leaders Approve Debt-Limit Increase

Balanced Budget Amendment May Create More Problems Than It Fixes

Obama Talks With Party Leaders on Debt Limit Amid Standoff

Congress Heads Into Weekend Deadlocked on Plan to Avert Default

By Mark Drajem

(Updates with comment from Donohue in 19th paragraph.)

Aug. 1 (Bloomberg) -- With the U.S. government on the verge of a historic default, the country’s largest business lobbying group took to the halls of Congress last week to press lawmakers to support the Panama Free-Trade Agreement.

The U.S. Chamber of Commerce sponsored a “door knock,” with 80 members handing out Panama hats to tout a trade deal with a nation that has a smaller economy than Akron, Ohio. To critics, the Chamber event illustrates what has been a deafening silence from U.S. executive suites on the gridlock in Washington over raising the federal $14.3 trillion debt ceiling.

“They haven’t done nearly enough to sound the alarm,” said Jim Kessler, vice president for policy at Third Way, a Washington research group that describes itself as advocating “moderate policy” and has executives from Morgan Stanley and Goldman Sachs Group Inc. on its board. Executives “think this is all Washington theater, and it will all get done in the end.”

The Chamber, which last week began to issue almost daily pleas for the debt ceiling to be raised, today urged lawmakers to approve the package worked out by President Barack Obama and congressional leaders over the weekend. In the months leading up to the crisis, company lobbyists and executives had mostly steered clear of the fight.

At a closed-door meeting with Chamber lobbyist Bruce Josten last month, Democratic Senators Mark Begich of Alaska and Mark Warner of Virginia upbraided the group and its member companies for not twisting arms hard enough to get a compromise package worked out, according to two people familiar with the discussion who spoke on condition of anonymity because the meeting was private.

‘Wishy-Washy’

Begich contrasted the lobbying, television advertisements and political giving the Chamber invested fighting off health- care legislation in 2009 and 2010 with its “wishy-washy” approach on the debt ceiling.

“I’m amazed,” Begich said in an interview July 27. “They spent millions saying that health care would be the end of all business in America, but the end of all business in America is in five days from now.”

On the debt debate, corporations have kept their lobbying money on the sidelines. Of the 10 companies with the largest lobbying expenditures in 2011, two said they were lobbying on the debt ceiling during the first six months of this year, according to disclosure forms filed with the Senate: insurer Blue Cross/Blue Shield, the third-largest lobbyist, and drugmaker Pfizer Inc., the ninth-largest.

Buffett, Cote

None of the other companies mentioned the issue. Together those 10 spent more than $90 million on lobbying from January through June, according to data compiled by the Center for Responsive Politics, a Washington research group.

With notable exceptions such as Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., and David Cote, chairman and chief executive of Honeywell International Inc., CEOs generally have shied away from speaking out individually on the issue.

“It’s unfortunate that the business interests have not stepped forward as loudly as they should have,” Bill Daley, the White House chief of staff, said in an interview with Bloomberg Television July 26. “You’ve had a silence from the business community to the political establishment over the last number of years that’s been unfortunate.”

Warren Bennis, a professor of business at the University of Southern California who has written about corporate leadership for four decades, says CEOs may have been silenced by positions advocated by some Republicans, such as Tea Party enthusiasts who support an increase in the debt limit only if it’s accompanied by greater spending cuts than the increase and doesn’t raise taxes.

‘Embarrassed’ by Republicans

“They’re caught,” Bennis said in an interview July 29. “They tend to be Republican and they are embarrassed by what they see from Republicans,” Bennis said. “It’s a real stalemate and CEOs want to stay clear of it.”

After negotiations between Republicans and Obama broke down, chief executives of companies such as General Electric Co., BlackRock Inc. and Citigroup Inc. started to push harder for a breakthrough last week, mainly by signing group letters sent to Congress and the administration.

Goldman Sachs Chairman and CEO Lloyd Blankfein and JPMorgan Chase & Co. chief Jamie Dimon were among 14 financial executives who signed a July 28 letter by the Financial Services Forum, a Washington trade group that represents the largest banks.

On July 27, the Business Roundtable sent House lawmakers a letter supporting a bill pushed by Republican Speaker John Boehner that would cut $915 billion in spending over 10 years in exchange for a two-step process of raising the debt ceiling and considering a balanced-budget amendment. Today, the Washington- based group backed the compromise package as well.

115 Associations

Some 115 associations, but no individuals, were listed as signees. The Washington-based Roundtable says on its website that it was “founded on the belief that businesses should play an active role in the formation of public policy.”

The Boehner bill passed the House on July 29, only to fail in the Democrat-controlled Senate later the same evening. After weekend negotiations, Obama said last night that leaders of both parities in the House and Senate reached an agreement to raise the debt ceiling and cut the deficit. The Senate and House may vote as early as today on the compromise.

“We have a great deal of hard work ahead of us to restore our economy and put our nation’s finances on a sounder footing,” U.S. Chamber President Thomas Donohue said today in a statement. “This agreement takes us a step in the right direction and is the right thing to do.”

‘Shaking Their Heads’

Some corporate leaders interviewed by Bloomberg reporters before the weekend talks that produced the compromise said lawmakers should just agree to raise the limit and move on.

“When I talked to my colleagues, they’re all shaking their heads basically in dismay,” Albert Stroucken, CEO of Owens Illinois Inc., the world’s largest producer of glass bottles, said in an interview.

“I am surprised we’ve gotten this deep and it’s unresolved,” Rockwell Automation Inc. Chief Financial Officer Ted Crandall said in an interview as negotiations intensified last week. He declined to say which plan under debate the company may prefer.

Walter Robb, co-CEO of Whole Foods Market Inc., also lamented that “the atmosphere is so hyper-partisan” in Washington. He hasn’t spoken out publicly on the debt issue himself, he said in an interview, because “we’re grocers and we’re really just concentrated on growing the business.”

At United Parcel Service Inc., CEO Scott Davis and Chief Financial Officer Kurt Kuehn wouldn’t discuss which debt reduction approach they might prefer, said Norman Black, a spokesman for the world’s biggest package-delivery company.

No Interest

“Neither Scott nor Kurt have any interest at this point in addressing specific plans, nor have they tried to study all the specifics of some of the proposals that are out there.” Black said in an interview. Executives at 18 other companies contacted by Bloomberg declined to comment or didn’t return phone calls and e-mails seeking comment.

Berkshire Hathaway’s Buffett, one of the CEOs quoted most often on the debt issue, spoke out on the matter as early as last April, saying at the company’s annual shareholder meeting that it was “most asinine” for lawmakers to consider not raising the debt limit.

“If you don’t get a deal you are putting a gun to your head,” Buffett said in a Bloomberg Television interview July 8. “Nothing may happen, but we don’t have a parallel with it in the past.”

Cote, Honeywell’s CEO, served on Obama’s debt commission and has called for reducing the deficit through tax increases as well as spending cuts in interviews on NBC’s “Meet the Press,” Bloomberg Television and other programs and in op-ed articles.

‘Job Destruction’

“For a bunch of people down there who spend all their time talking about job creation, they’re actively on a path to job destruction right now,” Cote said in an interview with Bloomberg News on July 28.

The Chamber of Commerce says it has been pushing in a series of letters this year for Congress to agree to raise the cap. Chamber President Thomas Donohue in April warned that the debt ceiling was a bigger risk to the economy than a possible government shutdown, and vowed to press lawmakers to act.

What the group hasn’t done is mobilize local members to knock on doors in the Capitol, the kind of retail-level pressure for which it is famous in Washington.

“It is almost impossible to do things like that when there is no proposal to rally behind or oppose,” Blair Latoff, a spokeswoman for the Chamber, said in an e-mail. Comparing the debt ceiling to the lobbying on the trade deals with Panama, South Korea and Colombia is comparing “apples and oranges,” she said.

There is still “the expectation by the business community that Washington is going to figure this out,” said Ron Bonjean, a lobbyist who was an aide to Dennis Hastert when he was House speaker.

Unlike the lobbying frenzies over health-care legislation and overhauling the financial system in the previous two years, companies just want a deal, Bonjean said in an interview.

“How they get it done, they don’t care.”

--With assistance from Rachel Layne in Boston, Thomas Black in Dallas, Leslie Patton in Chicago, Natalie Doss in New York and Jack Kaskey in Houston. Editors: Joe Winski, Steve Geimann

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.ne

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Progressive caucus co-chair: There’s no way I’ll support this horrible deal; Update: Reid approves deal

posted at 5:15 pm on July 31, 2011 by Allahpundit
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I call upon these hardline, hostage-taking ideological fanatics to compromise for the good of America.

    “This deal trades peoples’ livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it. Progressives have been organizing for months to oppose any scheme that cuts Medicare, Medicaid or Social Security, and it now seems clear that even these bedrock pillars of the American success story are on the chopping block. Even if this deal were not as bad as it is, this would be enough for me to fight against its passage…

    Republicans have succeeded in imposing their vision of a country without real economic hope. Their message has no public appeal, and Democrats have had every opportunity to stand firm in the face of their irrational demands. Progressives have been rallying support for the successful government programs that have meant health and economic security to generations of our people. Today we, and everyone we have worked to speak for and fight for, were thrown under the bus. We have made our bottom line clear for months: a final deal must strike a balance between cuts and revenue, and must not put all the burden on the working people of this country. This deal fails those tests and many more.

    The Democratic Party, no less than the Republican Party, is at a very serious crossroads at this moment. For decades Democrats have stood for a capable, meaningful government – a government that works for the people, not just the powerful, and that represents everyone fairly and equally. This deal weakens the Democratic Party as badly as it weakens the country. We have given much and received nothing in return. The lesson today is that Republicans can hold their breath long enough to get what they want. While I believe the country will not reward them for this in the long run, the damage has already been done.

His proposed solutions? Either a clean debt-ceiling hike, which will do nothing to check the growth of spending that’ll eventually utterly destroy that “capable, meaningful government” he loves so much, or the Fourteenth Amendment option, which would add a constitutional crisis and total fiscal uncertainty to the country’s current basket of political goodies. Even so, it’s awfully nice of him to toss this grenade and complicate the Democrats’ messaging in case Boehner can’t get enough Republicans to push the deal through the House. Fun fact about the Congressional Progressive Caucus: It’s the largest on the left with fully 75 members, which means if they vote as a bloc tomorrow then Pelosi and Hoyer are already down to fewer than 120 Democrats who might be willing to help Obama out by voting with Boehner.

As for the GOP’s remaining core objection to the deal, it’s a byproduct of the progressives’ core demand highlighted above:

    Defenders of the plan will say that the defense cuts may never come about, or that if the committee makes some cuts but not enough, only the remainder would be subject to a 50-50 sequestration. This is no small consolation to House and Senate pro-defense lawmakers who fear that the committee won’t do its job and that draconian defense cuts will follow.

    Why would Republicans give so much on defense? An adviser close to the talks says: “This is the only thing Democrats are getting. It was more important than taxes.” If so, and national defense cuts are now a “get” for the Democratic Party regardless of our national security needs, this is shameful. And if Republican negotiators give in, then the Democrats are going to have to come up with lots and lots of votes to make sure the bill passes both houses.

According to HuffPo’s Sam Stein, all Democratic leaders had signed off on the deal as of 4:30 p.m. ET, which I guess means Pelosi thinks she really can deliver “lots and lots of votes.” She had better: Fox News’s Chad Pergram says he’s already hearing from conservative/tea party House members that they can’t support this deal either, which means Boehner will need a broad centrist coalition to get things done.

Stand by for updates, as usual.

Update: Reid’s office says he’s onboard, provided that the caucus approves the package. Bernie Sanders replies by calling it “grotesquely immoral” and “bad economic policy.” And here’s something fun from Chuck Todd: “The holdup on announcing the deal appears to be uncertainty of how House gets to 216.”

Update: In case you’re worried about the Super Commission recommending tax increases:

    Republicans favorable to the deal feel as though they have three safeguards against the committee recommending tax increases and Congress going along: 1) The members appointed by Boehner and McConnell, who will presumably not be Gang of 6 types (McConnell would be wise to appoint Kyl, Sessions, and Toomey); 2) a tax increase would not get through the House and probably not have 50 votes in the Senate; 3) the baseline dynamic mentioned earlier.

That doesn’t solve the problem with heavy defense cuts in the trigger, but presumably the GOP thinks it can undo those with separate legislation before the cuts kick in.

Update: Desperate times:

    Progressives and the CBC plan presser on Monday to ask Obama to invoke 14th Amendment to avoid debr crisis. 11 am.

Update: A GOP side explains to James Pethokoukis why it’ll be so hard for the Super Commission to try to raise taxes:

    It has an undefined mandate of deficit reduction but the way that is constructed would essentially make it impossible to raise taxes. Anything scored by CBO is based on current law. Current law assumes that taxes are going to go up by three-and-a-half trillion dollars next year [over ten years]. So anything you do to the tax code, unless it starts off with a $3.5 trillion tax increase, it’s going to be adding to the deficit … It’s almost impossible for them to touch taxes because if they do, almost anything will be scored as a tax cut, making it that much more difficult to reach the $1.5 trillion that they need to get to.

That’s the “baseline dynamic” mentioned in Rich Lowry’s post quoted above.

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Open thread: Senate to vote on debt bill at 1 p.m., or maybe not; Update: Reid’s bill filibustered, 50/49; Update: Deal all but done? Update: Reid signs off on debt ceiling agreement

posted at 12:09 pm on July 31, 2011 by Allahpundit
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They’re supposed to vote at 1 p.m., but according to Plouffe and another “Democrat familiar with the situation,” there’s still no bill. What’s the hold up? In all likelihood, they’re haggling over the “triggers” that’ll happen if the new Super Commission can’t agree on, or Congress won’t accept, new deficit reduction proposals later this year. Jen Rubin’s hearing the following from a Republican source on the Hill:

    The second tranche works like this: If a new congressional commission introduces a plan totaling at least $1.5 trillion in cuts by Thanksgiving and it’s passed by Christmas there are no across-the-board cuts. Or, if a balanced budget amendment is passed and sent to the states, then across-the-board cuts are avoided. However, if there is no commission package passed AND the BBA is not passed and sent to the states, then across-the-board cuts of $1.2 trillion including Medicare and defense (the details of which aren’t final) go into effect. If the across-the board-cuts go into effect, the debt ceiling is only raised $1.2 trillion (likely insufficient to keep the government operating for long), meaning “we could do this all over again, depending on economic growth.” In other words, if we went to sequestration the total debt ceiling increase would be $2.1 trillion in two doses.

So there’s the BBA concession: Democrats can avoid new cuts in the second stage entirely if they pass the amendment. As for the automatic Medicare/Pentagon reductions, that’s obviously designed to make both sides in Congress think twice before rejecting the Super Commission’s recommendations. The precise formula for that is still being negotiated too. According to Jake Tapper, the White House wants fully 50 percent of the automatic cuts to affect the Pentagon and 50 percent to be spread across various other discretionary programs. GOP hawks won’t go for that, especially since the only alternative might be approving a Commission package that includes new revenues.

As I write this, the Senate has just begun its session and Reid is insisting that they’re “cautiously optimistic” about a deal but not there yet. Here’s your thread for tracking today’s drama. Exit question: How many Republican and Democratic votes will this bargain get in the House? Progressives are reportedly already murmuring about balking because of the lack of revenue in the deal, which means Boehner will need a majority of his previous Republican majority on yesterday’s vote to get this through. (Here’s one vote forecast.) I wonder if they’ll do it on the first try or, a la TARP, if it’ll take a market panic and subsequent re-vote to get it done. Stand by for updates.

Update: The post-deal spin starts before the deal is even struck:

    “I don’t think we’ve been hurt at all,” McConnell said on CBS’ ‘Face the Nation’.

    “The American people wanted us to do something about out-of-control spending and … the debt ceiling is going to produce what many people would believe is a complete change in the trajectory of the federal government beginning to get spending under control,” said McConnell, who is likely to be largely responsible for any package that wins muster with Congress.

Update: John Bolton sounds the alarm for hawks:

    Every indication is that the debt-ceiling negotiations are leaving the defense budget in grave jeopardy. By exposing critical defense programs to disproportionate cuts as part of the “trigger mechanism,” there is a clear risk that key defense programs will be hollowed out.

    While the trigger mechanism comes into play only if the Congressional negotiators fail to reach agreement on the second phase of spending cuts, it verges on catastrophe to take such a national security risk.

    Defense has already taken hugely disproportionate cuts under President Obama, and there is simply no basis for expanding those cuts further. Republican negotiators must hold the line, since the Obama Administration plainly will not.

Update: Senate Republicans will huddle at 1:45.

Update: Turns out we did have a 1 p.m. vote after all. Now that there’s a deal in the works, Reid evidently decided that it wouldn’t panic markets if he introduced his current bill and let the GOP filibuster. Which they did: The vote was 50/49 (Reid voted no in order to preserve his right to reintroduce it, so they actually had 51 votes in favor.) Why he bothered forcing a vote, I simply don’t know. I guess it lets him use the “obstructionist Republicans” talking point for a few more hours, but that’ll evaporate as soon as there’s a deal. Oh well.

Stand by for the roll. At least two Dems voted no on this thing, intriguingly.

Update: Here we go. Via Fox reporter Chad Pergram, three Democrats voted no: Manchin, Ben Nelson, and of course Reid himself. So how’d they get to 50? Er, Scott Brown voted yes.

Update: Lefty Greg Sargent wonders how Republicans managed to use the threat of hitting the debt ceiling as leverage over Democrats when even most Republicans concede that it’s a scenario to be avoided at all costs.

Update: Ace is thinking about “trigger” gamesmanship down the line:

    Republicans let the automatic cuts happen, but then immediately propose reinstating most of the money to Defense.

    This winds up causing automatic cuts to domestic discretionary, but no big cuts to Defense; most Democrats would probably have to vote for this.

    But it has a bad effect: We’d have approved $2.1 trillion in debt ceiling increase while only (guestimating) cutting, say, $1.6 – $1.7 trillion in cuts.

I.e. the GOP could try a defense version of “doctor fix.” Assuming Medicare is also part of the trigger, though, Democrats would respond by demanding that that money be reinstated too — and Republicans would have to vote for it to block the left’s “Paul Ryan and his conservative friends want to kill your grandma” election messaging.

Update: Come to think of it, if Medicare’s part of the trigger, then Democrats will follow Ace’s scheme to reinstate that money later even if the GOP doesn’t try the same move for defense. (Again, they do this all the time in “doctor fix.”) And even if the GOP does try the same move, why would Democrats care? They want to protect entitlements much more passionately than they want to see the Pentagon’s budget slashed, so they’d agree to reinstate the Pentagon’s money as the price of reinstating Medicare. The fundamental problem here, as always, is that Democrats don’t care about cutting spending. If there’s nothing built into this deal that prevents reinstating the money that would be cut when the trigger kicks in — and I’m not sure how there could be procedurally — then the trigger isn’t worth much.

Update: Dick Durbin identifies another reason why Democrats aren’t crazy about this deal, especially the cuts up front.

Update: Even some tea partiers are ready for compromise.

Update: Tapper says they’ve almost got it worked out:

    The agreement looks like this: if the super-committee tasked with entitlement and tax reform fails to come up with $1.5 trillion in deficit reduction that passes Congress, the “neutron bomb” goes off, — as one Democrat put it — spending cuts that will hit the Pentagon budget most deeply, as well as Medicare providers (not beneficiaries) and other programs.

    If the super-committee comes up with some deficit reduction but not $1.5 trillion, the triggers would make up the difference…

    And the debt ceiling will be raised by $2.4 trillion in two tranches: $900 billion immediately, and the debt ceiling will be raised by an additional $1.5 trillion next year – either through passage of a Balanced Budget Amendment, which is unlikely, or with Congress voting its disapproval.

That’s the same as what Jen Rubin reported this morning. After the Super Commission announces its plan for deficit reduction, Congress has three options: (1) enact that plan, (2) pass a BBA and avoid any further immediate cuts entirely, or (3) do nothing and let across-the-board cuts go into effect, which would hit both Medicare and the Pentagon. That’s the last piece of this to be negotiated — how much of those cuts would be to defense specifically as opposed to being truly across-the-board? The harder the military would be hit, the more pressure the GOP will be under to avoid those cuts by passing the Super Committee plan, which could of course include taxes. And that’s not the only tax pressure: “Democrats say –- if tax reform doesn’t happen through the super-committee, President Obama will veto any extension of Bush tax cuts when they come up at the end of 2012, further creating an incentive for the super-committee to act.”

It sounds like the House will vote on this tomorrow before the Senate will. That struck me as backwards at first blush, since having the Senate rubber-stamp it first will put pressure on the House to follow suit. But since the House will have a harder time with this than the Senate, the thinking presumably is that the House needs to be free to tweak the bill to get the votes if need be.

Update: How many Democratic votes will this thing get in the House? Don’t answer until you’ve read this. Boehner may need his caucus to carry the load yet again. One key liberal objection, as Weigel notes, is that tax hikes aren’t one of the triggers that would kick in if Congress rejects the Super Committee. The GOP simply won’t agree to that, which is why Democrats are demanding heavy Pentagon cuts as a lesser substitute.

Update: Byron York on Obama’s nuclear weapon:

    As the hours to Tuesday’s deadline tick away, President Obama will have increasing leverage in his negotiations with Republicans. The president has a nuclear weapon which he has not used thus far in the crisis but will certainly use if the issue remains unresolved in the next 24 hours. That weapon is an address to the nation in which a sober-faced Obama reluctantly lays out what government spending will continue past the debt deadline and what spending will not continue. Many insiders, both Republican and Democrat, believe Obama has been badly overexposed at times in the debt battle, but that would be a speech everyone watches. The president would be the man dealing with disaster (even if it is one he helped create), while he dispatches aides and surrogates to blame it all on GOP radicalism.

True, one last eleventh-hour bid to panic the public might shake loose the last few votes they need to pass this thing. But see the previous update. I’m not so sure the GOP is his big problem this time.

Update (Tina Korbe): Fox News is now reporting that Harry Reid has signed off on the latest iteration of the debt ceiling increase agreement, pending caucus approval.

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