James Pethokoukis

Politics and policy from inside Washington

Live blogging President Obama’s news conference

Jul 22, 2009 23:48 UTC

My quick spin: I think he made a better case That Something Needs to Be Done than Dem Plan Needs to be Done …also hammers deficit and control cost issue.  He was still making diagnosis rather than why his treatment is the best …did not advance argument.

8:53 Question about Henry Gates and what it says about race in America ..makes funny joke about getting shot if he tried to break into the White House if he forgot his key … then gets serious …says he doesnt know what role race plays into this ..says police acted stupidly …brings up Driving While Black/Latino issue

8:51 Questions mentions Mayo clinic problems with House proposals. POTUS: Mayo was initially critical and concerned but MedPac idea has brought it back into the fold

8:49  where is tort reform?  mentions Mayo which is disappointed in Obamacare

8:47 says government needs to be a constraint on greedy insurance companies making profits in tough times

8:46  he cant really mean to say public option will be like what Congress gets …c’mon ..maybe in selection process but not in substance …it would bankrupt America

8:43:  …more on bank issue … says banks making profits is a good thing “this is America” …but frowns at no change of behavior … risk and bonuses … says too big too fail could cause even more risk ..”if shame does not work” then will count on informed shareholders to force change … TBTF worriers like Simon Johnson must be screaming at their TVs …no Bull Moose Obama

8:41 Q: harder line on Wall Street? Fee on risky activities (Goldman Sachs) POTUS: WS took too much risk, peddling loans they knew could not be paid back, and all of us are paying the price … says he prevented collapse by continuing Bush policies …seen a stabilization in the financial system

8:39 Transparency issue …POTUS confuses photo ops for transparency ..and TARP mention!

8:36 not cutting medicare benefits, just reworking spending … mentions AARP again ..

8:33 makes case he is reducing deficit from some previous baseline ..and cutting F-22 …and talking about what a bad hand he was dealt …poisoned chalice alert!

8:32 now explaining why we need to spend money now …aggregate demand management! ..again, acts like stimulus package stabilized economy …. evidence?

8:31 30 minutes in and the average person would still have no idea how their HC would change or how new system would work

8:30 Sacrifice, Mr. POTUS?  Fewer inefficient tests and stuff that doesn’t work … skirts around care rationing issue …you dont want that stuff anyway, he says

8:28  throws an olive branch to GOPers, think it will be at least slightly bipartisan

8:25  new version of chicken in every pot: nutritionist  in every home :)

8:24 Q: how may covered? what’s the minimum that POTUS will accept? POTUS: not 100 percent unless single payer system …shooting for 97%, 98% … lots of water to be wrung out

8:21 IMHO: those candles behind him look like a set a from Vincent Price’s House of Horror

8:19 Q: Why the rush? POTUS: 1)people suffering now; 2) no deadlines, no action … “stars are aligned and it’s important to take advantage of that” ..wont sign a bill that reduces HC inflation

8:17 “folks havent seen a lot of laws coming out of Washington that help them” Indeed!

8:15  he does make the status quo sound pretty sucky … finally starts hammering on the wage issue ..that healthcare care costs eat ito wages

8:14 i think he just said he was open to middle class tax hikes ..as long as they didnt shoulder total burden …did he really mean to say that?

8:13 using first question to repeat and amplify opening statement .. still likes idea to limit deductions as a payfor

8:12 POTUS should have a few charts with him; why dont they do that?

8:11 Question Time

8:11 POTUS is at his best when he goes classy and takes the high road

8:10 the touching personal stories begin

8:09  says just a few issues left to work out ..and hits Kristol and DeMint!

8:05 POTUS says what is in it for us …any downsides?

8:04 says economy isnt ready to compete ..vs. whom? says healthcare will help competitiveness, easy anxiety and control deficit

8:03 takes credit for stabilizing the economy but doesn’t say how

8:02 the POTUS

It all begins here at 8:00 PM EST


Very Simple, he didn’t sell it and he came across as a “liar.”

Posted by James Clayton | Report as abusive

Paging Alan Frumin! Why reconcilliation may be no Dem silver bullet for healthcare reform

Jul 22, 2009 20:44 UTC

Trying to push healthcare reform through the Senate (via the reconcilliation process) with just 51 votes is problematic at best for the Dems. This, from my pal Rich Lowry:

Just talked to Sen. Judd Gregg, who has taken a preliminary look at how much of a health-care bill could be moved through the budget reconciliation process in the Senate, thus making it unnecessary to get 60 votes. He thinks big parts of it won’t qualify. This involves parliamentary arcana, so bear with me. The Byrd rule determining what qualifies for reconciliation says, among other things, that a provision must have more than a merely incidental budgetary impact, i.e. it has to be a real budgetary measure and not a policy change that you hope to hustle through reconciliation just because it’s easier. Looking at the Kennedy bill as a test case, Gregg thinks the public option clearly wouldn’t meet this test. It’s essentially a policy event, not a budget event. Neither would the so-called “gateways” or exchanges, the insurance market reforms (guaranteed issue, etc.), or the 84 new authorized programs in the bill. What most obviously meet the test are the tax increases and the Medicare cuts. Ultimately, the Senate parliamentarian makes the call. But it’s clear that reconciliation isn’t the simple expedient for pushing through health-care legislation that some are portraying it to be.

Me: The Senate parlimentarian is Alan Frumin. Here is a bit on him from The Hill:

Frumin was criticized in 2003, first by Republicans after he ruled that they couldn’t use reconciliation rules to consider a $350 billion tax cut bill. A few weeks later, he piqued Democrats by dismissing as out of order several of their amendments to a Defense Department authorization  bill.

Frumin, who normally sits below the presiding officer on the Senate dais, has worked in the parliamentarian’s office since 1977. He went to college at Colgate, has a law degree from Georgetown and has co-authored a book on Senate rules.

Budget experts believe Frumin can take the heat.

“He’s known for being substantively rigorous and he understands the value of precedent,” said Stan Collender, a partner at Qorvis Communications and a former Democratic budget aide. “He’s not likely to just come up with a ruling that’s completely off the wall. He’s known to do his job really well and tries to call it pretty straight.”

4 reasons why a second stimulus is a bad idea

Jul 22, 2009 18:47 UTC

Wells Fargo/Wachovia economist John Siliva makes his case:

1) A second stimulus would add fuel to the already recovering economy and would create the false impression that all is now back to the “happy days” of an overleveraged consumer and strong growth. Therefore, estimates of top-line revenues are likely to overstate the true sustainable future pace of sales in a deleveraged economy.

2) A second stimulus would likely add to inflation/interest rate pressures and, thereby, higher interest rates and the cost of capital down the road.

3) A second stimulus would further raise doubts on the ability of our nation to control future spending/deficits and lead to a depreciation of the currency and possible loss of our near-exclusive role as the world’s reserve currency.

4) A second stimulus would further hide the negative impacts of the numerous micro policy proposals in place and thereby obscure, for a short time, the economic losses from the misallocation of public resources.


Meanwhile the list of distinguished economists who disagree continues to grow:

http://www.cepr.net/index.php/press-rele ases/interactive-press-releases/economis ts-who-make-the-third-stimulus-honor-rol l/

Posted by Mark A. Sadowski | Report as abusive

How Obama redefines the ‘Chicago School of Economics’

Jul 22, 2009 18:35 UTC

Joel Kotkin writes a great, great piece for The American on why Red State economies have better long-term prospects than Blue State economies. But this excerpted hunk is especially insightful:

Many in the true blue states greeted Barack Obama’s election like the coming of a Messiah who would redress these serious problems.  … Yet hopes that Obama would emphasize such basic infrastructure now have been dashed. Instead, the stimulus has been largely steered to social service providers, “green” industries, and academic research.

This skewed allocation of resources reflects the administration’s roots in contemporary Chicago. It derives from a pattern of rewarding core constituencies as opposed to lifting up the whole economy.

The financial bailout reflects one part of this. Money lavished on bankers and lawyers, most of them in New York and Chicago, represents relief to what is now a core Obama constituency. Indeed the whole Troubled Asset Relief Program mechanism is being run by what Simon Johnson, a former chief economist at the International Monetary Fund, has described as a “wonderfully closed circle.”

This approach, notes University of Illinois political scientist Dick Simpson, comes naturally for an administration dominated by veterans of the Chicago machine. Politicians in the Windy City do not worry much about opposition—49 out of 50 aldermen are Democrats—and follow policies adopted by the small central cadre.

But machine politics do not necessarily work out so well for the rest of population. “The principle problem is that the machine is not subject to democracy,” notes Simpson, who remains hopeful for the Obama presidency. “There’s massive patronage, a high level of corruption . . . There’s a significant downside to authoritarian rule. The city could do much better.”

To be sure, there has been considerable gentrification in Chicago, as in many cities. Chicago’s “revival” also has been a classic case of blue-state economics, driven largely by a now fading real estate boom, the financial industry, a growing college and university population, and tourism. But overall, from the point of view of most middle and working class residents, Chicago’s political system has proved inefficient and costly. This can be seen in demographic trends that show Chicago as the only one of few large U.S. cities to lose population. At the same time, the middle class, particularly those with children, continue to flee to the suburbs.

Bad economy overwhelming Obama’s agenda

Jul 22, 2009 17:42 UTC

Just how much trouble is President Obama and his economic agenda in?  Allies will point to the president’s still-robust 55 percent approval rating, according to pollster Gallup, but that number has been declining steadily from a high of 65 percent in early March. (He’s actually a point lower than George W. Bush at similar points in their presidencies.) And while the House of Representives has passed historic cap-and-trade legislation, the bill seems to be going nowhere in the Senate and the president may have little to crow about at the December climate change conference in Copenhagen. Even his plan for a consumer financial protection agency looks like it’s in doubt. Then, of course, there’s healthcare reform, which Obama again will be making the case for during a prime-time news conference tonight.

But no matter how cleverly Obama makes his points or how skillfully he wrangles the Washington press corp, his efforts may be futile as long as unemployment continues to rise and sap American economic confidence. Here are the numbers that should worry team Obama: A recent AP-GfK poll found 54 percent of Americans think the country is on the wrong track, the same as in January and up ten points from mid-April. A recent Diageo/Hotline poll found 55 percent of American think the country is on the wrong track, the same as in early March and up 12 points from early June. A CBS poll has the wrong track number at 57 percent, up from 48 percent in early May and the same as in early March.

The trend is clearly not Obama’s friend, particularly with unemployment expected to continue to rise to at least 10 percent and stay elevated for some time. The outlook is dire enough that economist Gluskin Sheff economist David Rosenberg, formerly of Merrill Lynch, has speculated that Obama might turn to extreme economic measures to juice the economy and his political fortunes: “We are sure that as the unemployment rate makes new highs and increasingly poses a political hurdle in a mid-term election year, that it would make perfect sense, for a country that always operates in its best interest — even if it may not be in everyone’s best interest — to sanction a U.S. dollar devaluation as a means to stimulate the domestic economy.”

That would certainly have the potential for worrying financial markets mightily. But as for now it’s tough to find much investor concern over Obama’s troubles or his bogged down agenda. The Dow has scored seven-straight winning sessions for the first time since April 2007, gaining nearly 10 percent over that span. With fear of a depression subsiding — see Larry Summers new favorite metric, the plummeting number of Google searches on “economic depression”, for evidence — political gridlock may again be good.


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Did the Blue Dogs just rollover on healthcare?

Jul 22, 2009 17:38 UTC

Pelosi seems upbeat, but Arkansas Democrat Mike Ross less so:

The Blue Dogs share the President’s goal of providing the American people with quality, affordable health care reform that’s deficit neutral, and we have put forth a number of substantive policy proposals over the past several months aimed at achieving this goal.

We are making progress; however, we have a long way to go. The Blue Dogs will continue to work constructively with the administration, Chairman Waxman and members of the House and Senate to produce a bill that we can ultimately support.

Why you should or should not bet against healthcare reform

Jul 22, 2009 10:14 UTC

jamespethokoukiscropThe chances of sweeping healthcare reform have dropped dramatically over the past month or so.  (I still think the president will have something to sign by year end.) Mark Halperin of The Page gives his reasons why healthcare reform still has a good chance of happening, though what “healthcare reform” means is left undefined — and that is kinda important:

1. Reid, Pelosi, and the applicable committee chairs all are still on board (no one has taken their marbles and left, in part because the White House congressional affairs office has a great ear and many eyes).

2. Senators Grassley and Snowe haven’t given up.

3. Rahm Emanuel knows what’s possible.

4. If he can get a bill to conference committee, the press will start implicitly cheering more for success, and stop obsessing over every setback.

5. The health care industry and business community are still largely supportive.

6. Labor unions are likely to give in (maybe) at one or two critical moments.

7. Obama is not rattled.

And this article from The Hill makes some counterpoints:

If Democrats in the lower chamber do not pass a healthcare reform bill before the recess, it would be seen as a major step backward from the legislative timetable President Obama initially outlined. As recently as last week, leading Democrats were predicting they would pass bills through the House and Senate before adjourning for the summer. … In another blow to the Democrats’ healthcare reform efforts, the U.S. Chamber of Commerce on Tuesday launched an advertising campaign targeting a key aspect of Obama’s healthcare plan — a government-run “public option.” Another powerful industry group, America’s Health Insurance Plans, stated on Tuesday that a “government-run plan is a roadblock to reform.” … Hoyer on Tuesday confirmed that opposition was not limited to the Blue Dogs. … “It’s the spending and the cost. The [Congressional Budget Office score] last week was really a hit across the bow,” said Rep. Baron Hill (D-Ind.), a Blue Dog leader and member of the Energy and Commerce Committee. … Some members want to wait to see what the more conservative Senate will do so that members don’t have to make tough votes on issues, like raising taxes, that are difficult to get through the upper chamber. Complicating the healthcare reform effort is the fact that the Senate Finance Committee still hasn’t released its bill or indicated how it will be offset.


You hear how much different healthcare plans will cost but,nothing about “how much more it will cost if we do nothing.”

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Jindal’s GOP healthcare reform alternative

Jul 22, 2009 09:59 UTC

Bobby Jindal takes a shot at a Republican alternative for healthcare reform in the WSJ today: 1) IT-driven consumer choice; 2) health savings accounts; 3) medical lawsuit reform; 4) insurance reform; 5) pools for small business; 6) pay for performance rather than procedures; and 7) tax credits to help low-income working Americans buy health insurance. Fine, fine, I guess. But wouldn’t it better to describe how a real plan would work in people’s day to day lives and what it might cost or how it might reduce costs? Does this really change the debate at all, or merely show Jindal as wonky potential presidential contender?


Instead of a 1,018 page bill that nobody has read, can we not “reform” the qualifications for Medicare and Medicaid to include all less fortunate “AMERICANS” ?
This way, instead of creating another huge governmental waste program, we can use these already existing programs.
I cannot see any reason that any “AMERICAN” cannot qualify for these programs.
Just let your state and federal elected officials know that you are tired of supporting foreigners in our nation illegally !

Posted by JOHN F. KOSTRUBAL | Report as abusive