PA-GOV: Fumo’s corruption creates opportunities for GOP

In March, I wrote about the GOP opportunities that follow from the conviction of South Philly machine Democratic State Senator Vincent Fumo. The recent news of Democratic corruption out of New Jersey (mayors, rabbis, and body-parts, oh my!) and the emerging consensus that this fundamentally damages Jon Corzine’s already difficult re-election, when combined with outrage at farcically light sentencing creates real opportunities for Republicans.

Let’s go over the facts and see how much this helps Pennsylvania Republicans in 2010:

1. Pat Meehan, one of the Republican candidates for Governor got the initial indictments against Fumo. Tom Corbett, the other one, has his own story to tell about indicting Fumo and his operation. If Chris Christie ends up winning in New Jersey, there will be a ready-made media narrative comparing New Jersey to Pennsylvania.

2. That narrative will be a little emphasized because southern New Jersey is almost entirely in the Philadelphia media market. It will be non-national political news relevant to both parts of the the Philly media market.

3. Corruption is the sort of thing that suppresses Democrat-leaning independent turnout in formerly Republican suburbs in Bucks and Montgomery countes, and, to a lesser extent, in Chester and Delaware counties. And the South Philly turnout operation that Fumo was so effective at selling is probably somewhat reduced in effectiveness. Democrats can’t win statewide without huge margins out of southeast Pennsylvania. You couldn’t build a better script for reducing those margins.

Grab the popcorn. This will be fun to watch.

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Obama’s new rule: When the math doesn’t work, reject math and shoot the messenger

We now have a pattern on our hands. When the math behind Barack Obama’s health care plans doesn’t work, Obama attacks math. Now, he doesn’t do it directly. He gets Peter Orzsag to debase his intellect for Obama’s political ends. First, he did it with the IMF score. Then this week he pressured the CBO scorers early this week after their math provided defeat after defeat to his healthcare dreams. And then this weekend, Orzsag has attacked Doug Elmendorf, the CBO director.

Case 1: The IMF. At a G-20 meeting earlier this year, Barack Obama came away empty-handed. The only success was to send money to the IMF. $100b. This wasn’t going to pass on its own, so they attached it to the Supplemental that paid for our troops. And claimed that $100b leaving the treasury costs nothing. According to the Politico, Orzsag had a totally unprecedented meeting with the OMB scorers putting political pressure on them to cook the books. Only a little comment at the time. Oh … and no one bought Orzsag’s nonsense, and the amount became a focus of attention as a bailout of European banks.

Case 2: CBO Whitehouse meeting. Earlier this week, the President meant with the Director of the CBO. According to Jake Tapper, there was a lot of pushback against the unprecedented nature of the meeting:

Said Senate Minority Leader Mitch McConnell, R-Kentucky: "I noticed that the CBO director was sort of called down to the White House yesterday. It strikes me as somewhat akin as the owner of the team asking the umpires to come up to the owner’s box."

McConnell said that "if the CBO is to have credibility, they’re the umpire. They’re not players in this game."

CBO is tasked with providing “objective, nonpartisan, and timely analyses to aid in economic and budgetary decisions on the wide array of programs covered by the federal budget.”

Case 3: Keith Hennessey puts it nicely, "CBO Kills the President’s Medicare Comission Proposal". You see, the CBO found that Obama’s great plan to limit costs was to create a commission only saved $2b. One half of one percent of the total cost. So what happens? Orzsag goes after Elmendorff in all but name:

A final note is worth underscoring. As a former CBO director, I can attest that CBO is sometimes accused of a bias toward exaggerating costs and underestimating savings. Unfortunately, parts of today’s analysis from CBO could feed that perception. For example, and without specifying precisely how the various modifications would work, CBO somehow concluded that the council could "eventually achieve annual savings equal to several percent of Medicare spending…[which] would amount to tens of billions of dollars per year after 2019." Such savings are welcome (and rare!), but it is also the case that (for good reason) CBO has restricted itself to qualitative, not quantitative, analyses of long-term effects from legislative proposals.  In providing a quantitative estimate of long-term effects without any analytical basis for doing so, CBO seems to have overstepped.

What is going on is crystal clear. The CBO is not caving to extended political pressure. After weeks of Pelosi "scolding" and Baucus aides "expressing frustration" it has come to open attacks on the CBO, its director, and the institution’s integrity.

Well. I have to say, finally Barack Obama is bringing change I can believe in. Chicago-style change.

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Indiana budget in surplus

Most state budgets are in crisis. The Big Picture’s Barry Ritholtz notes that state tax revenue has fallen sharply the last two quarters. The left wing Center for Budget and Policy Priorities notes that "[a]t least 48 states addressed or are facing shortfalls in their budgets for the upcoming year."

Not Indiana. Under Mitch Daniels’ leadership the state reported a $1.3b surplus. The State Auditor Tim Berry noted that they even raised school funding:

Berry stood in front of charts Friday that show Indiana increased school funding, avoided a tax hike, and maintained a surplus of about 10%. […]

"Measures that were taken early on by Governor Mitch Daniels to restrain spending have amounted for a large amount of these fiscal reserves," Berry said.

The Louisville paper notes that tax revenue was even down $1.2b below projections:

The state had $1.33 billion in its main checking account and reserves when the fiscal year ended June 30. That’s roughly the same as one year ago, even though state taxes brought in $1.2 billion less than originally projected.

How’s that for successful governance? No wonder there is a draft movement for Mitch Daniels for President.

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Indiana budget in surplus

Most state budgets are in crisis. The Big Picture’s Barry Ritholtz notes that state tax revenue has fallen sharply the last two quarters. The left wing Center for Budget and Policy Priorities notes that “[a]t least 48 states addressed or are facing shortfalls in their budgets for the upcoming year.”

Not Indiana. Under Mitch Daniels’ leadership the state reported a $1.3b surplus. The State Auditor Tim Berry noted that they even raised school funding:

Berry stood in front of charts Friday that show Indiana increased school funding, avoided a tax hike, and maintained a surplus of about 10%. […]

“Measures that were taken early on by Governor Mitch Daniels to restrain spending have amounted for a large amount of these fiscal reserves,” Berry said.

The Louisville paper notes that tax revenue was even down $1.2b below projections:

The state had $1.33 billion in its main checking account and reserves when the fiscal year ended June 30. That’s roughly the same as one year ago, even though state taxes brought in $1.2 billion less than originally projected.

How’s that for successful governance? No wonder there is a draft movement for Mitch Daniels for President.

(Crossposted from The Next Right)

Dem Senate candidates afraid to support card check?

Brian pointed to the bizarre reposition of Rep. Charles Melancon (D-LA) on card-check. But this points to a broader pattern. Senators running in 2010 in potentially contests Senate seats are afraid to take a position on the issue.

For example, in Colorado, appointed Senator Michael Bennet is “stuck in neutral” on card check, according to the Denver Post. In Arkansas, Blanche Lincoln won’t support it. Pennsylvania’s Arlen Specter is famously wrapped around the axle on it.

With card-check, cap-and-tax-and-trade, and Obamacare in the pipeline, how much soon until these Senators back away from the President?

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MA-GOV: Dems split, opportunity for Republicans?

Something amusing is happening in Massachusetts. Barack Obama-wannabe Democratic Governor Deval Patrick is looking to run for re-election. The Democratic State Treasurer Tim Cahill probably can’t win a Democratic primary against him, so what does he do? He becomes an independent.

State Treasurer Tim Cahill this week will change his political party designation from Democrat to unenrolled, the first step in mounting an independent challenge to Democratic governor Deval Patrick in the 2010 general election, two advisers said today.

The thing is, this might create an opportunity for Republicans. A 3-way race could be winnable, even in a state as blue as Massachusetts. This leaves an opening for someone like Charlie Baker, who has both political or business experience. Baker would have to step down as the CEO of a health care company, a subject that happens to be one of the state’s major problems:

The centerpiece of Massachusetts’ 2006 health reform bill is Commonwealth Care, a government program that provides free and subsidized insurance plans to low- and moderate-income patients. It’s spending has doubled in the last two years, jumping from $630 million in 2007 to an estimated $1.3 billion in fiscal year 2009.

Last year, rising costs lead Commonwealth Care officials to approve a 12 percent rate increase, meaning that basic insurance costs will cut even deeper into the incomes of most participating patients.

Alternatively… Mitt Romney could run. He won once. He made the problem, but has complained that it wasn’t implemented as he would have.  He could run, win, and fix it… I’d even endorse him.

But probably not. Probably we will have to support Charlie Baker in his fight to save his state.

European Election: Victory for the right

Between June 4 and June 7, citizens of 27 European countries voted in a new 736 seat European Parliament. The European Parliament website contains provisional results. This parliament and this election may have a significant impact on a number of patterns in international politics and business. It is worth summarizing some of the results.

Going into the elections, there were several questions. First, would the center hold? With caveats, it did. Second, what impact would the global economic downturn have? Signficantly, the socialists were rejected, to the benefit of the right. Third, how strong would the anti-EU sentiment be in the UK? Very, and this could have some complicating results for the larger European project. And fourth, what does this tell us about the upcoming election in Germany and, potentially, the UK? Labour in trouble in the UK. Probably still good news for the Christian Democrats in Germany.

So, let’s start with the core details, the results, mostly cribbed from the BBC, with additional notes, which are all after the jump.

Party Votes MEPs Notes
+/- % % +/- Total
EPP -1.4 33 -18 264 Net would be positive, without loss of Tories
Socialists -4.1 23 -26 177 Half of loss due to France
Liberal +1.6 11 +5 91
No Group +3.4 13 +43 71 Tories + Czech ODS and others
Green +1.3 7 +9 50
Left -0.6 5 -2 35 Far-left/Communist and others
UEN +1.6 3 +2 25 Far right/fascist and others
Ind/Dem -1.8 2 -15 21

In answer to the first question, the center significantly held. The European Peoples’ Party (EPP), the party of the center-right, dominated the evening. They had allied with the “European Democrats” to form the EPP-ED parliamentary group that had led the last parliament. the “European Democrats” were, primarily the British Conservatives (”Tories”) and the Czech ODS party. The Tories won 24 seats, up 1 from the previous Parliament, while ODS won 9.  In other words, the old EPP-ED coalition won 297 seats, up 15 from the previous Parliament, while the Liberals added 5, and the Socialists lost 26. Net loss for the center is 6, or less than 1%.  Now this fudges some details like why the Tories and ODS left, but we will get to that.

The center holding is even more remarkable when you look at particular countries. For examples, in France, the socialists lost 13 seats, but Sarkozy’s UMP picked up 11 of those. The Greens also picked up 8, all but 1 of their net gain. In Spain, which has the highest unemployment in the Eurozone, the Socialist government lost 2 seats, with the EPP and the Liberals each picking up one of them. Similarly, in Germany, the EPP lost 7 seats, but the very free market Free Democrats/Liberals picked up 5 of those.

To summarize what happened and to answer the second question, a pro-free market polarity carried the day. Between the EPP and the Liberals, while the Socialists were roundly defeated in nearly every country. In a time of economic unrest, Europeans turned to the right for answers to economic questions.

This is not to say that there were not significant shifts. The most obvious is the underlying cause of the “European Democrats” leaving the EPP-ED, concern about the scope of the European project. In European politics, opposition to EU expansion and the broader European project occupies a similar role as the immigration debate does here. The European Union is the most obvious mechanism of loss of national identity. It is taking people’s money, it is allowing poorer workers who don’t share language and customs from the East, it is more unaccountable and its politicians are in Brussels, not national capitals, etc. The Tories and Czech ODS are openly more skeptical of the European Project. In the UK, the anti-EU UK Independence Party picked up a seat and the far-right British National Party picked up 2. In Austria, Romania, and the Netherlands, this shift has been most clear. There is a clear anxiety about the European project out there that has even  been suggested by German Chancellor Angela Merkel in her recent statement about the European Central Bank.

The clearest manifestation that this anxiety will take will be in how the Lisbon Treaty process is resolved. The Lisbon Treaty is the “Constitutional Treaty” that failed in French and Dutch elections several years ago, and recently in Ireland. In recent months, the Polish and Czech Parliaments have approved it, although the Presidents have refused, so far, to sign the bills. Ireland still has to put it on the ballot again, and, importantly the UK has to do something. The collapse of the Labour Party in the UK, combined with a majority of the vote in the UK for either anti-EU parties (BNP and UK) or skeptic parties (Tories), means that the British government has a crisis on their hands. The old Tony Blair promise of a referendum on a new “constitution” may become politically necessary. The UK may be the block to Lisbon, not Ireland. And all this is prior to the analysis of what The Economist calls “record abstention.”

Finally, the upcoming national elections. The UK Labour Party was crushed. Manuevering has started to remove Gordon Brown, even if Labour Party rules offer no mechanism to allow it. In Germany, Angela Merkel and her preferred allies took 48% of the vote, and a clear majority of the European Parliament seats. Unless something changes, a new, more free market approach is likely coming after the next German election in September. In France, even though Nicolas Sarkozy is no longer personally popular, the Socialists continue to be discredited as a party of opposition.