Washington Extra – Whose party?

September 15, 2010

As a Brit I never like to write too much about the Tea Party, but today I have no choice.
Every week that goes by the movement seems to gain more momentum. On Tuesday, our poll showed Democratic heavyweight Harry Reid clinging to a narrow lead in Nevada against Tea Party insurgent Sharron Angle. That night, Republican establishment favorite Michael Castle was knocked off his perch in the Delaware primary by upstart Christine O’Donnell. Today, our Reuters/Ipsos poll shows one of the Tea Party’s most well-known favorites, Marco Rubio, opening a clear lead in the race for a Senate seat from Florida. With just six weeks to go until the elections, Rubio leads state Governor Charlie Crist, now running as an independent, by 40 percent to 26 percent, with Democrat Kendrick Meek trailing behind.

But who is going to benefit?

Republicans are hoping the surge in enthusiasm for a right-wing agenda will get their supporters to the polls, and right now there is a definite “enthusiasm gap” between Republicans and Democrats in terms of their likelihood to vote.

Democrats are still hoping that “Tea Partiers” will simply be too right-wing for voters to accept in many states. The contest in Nevada is a critical one, with Reid hoping he can cling to his slightodonnell lead against Angle, a lead he might not have against a more centrist candidate. More to the point, some Dems could scarcely contain their glee this morning after O’Donnell’s victory, calling her an “ultra right-wing extremist” who will be rejected by Delaware voters, and arguing they might now just keep control of the Senate as a result.

But Rubio’s performance shows it may not be that simple. The son of Cuban immigrants, he has softened his rhetoric since winning the Republican nomination  and has apparently picked up plenty of centrist voters along the way. The poll numbers show a big swing in his favor since mid-August, when another Reuters/Ipsos poll showed Crist marginally ahead.

Finally today, take a look at Kim Dixon’s analysis of how the tax policy espoused by both sides of the aisle would really affect small businesses and hiring, a story that cuts through some of the rhetoric around this debate. There’s an interesting story too about more privacy problems for Google after the company fired an engineer for apparently spying on teenagers’ accounts. And tomorrow, look out for Treasury Secretary Tim Geithner testifying on China on the Hill, where anger over the yuan’s value and calls for retribution are mounting. The issue puts the administration in a tight spot as the elections loom, as I am sure they will be reluctant to be drawn into a damaging dispute with Beijing.

CORRECTS spelling of Kendrick.

Here are our top stories from today…


Tea Party Republican has big lead in Florida: Reuters/Ipsos poll

Republican candidate Marco Rubio has opened a clear lead in a Florida Senate race, becoming the latest Tea Party favorite to benefit from voter anger at Washington, a Reuters/Ipsos poll found. Six weeks before November 2 congressional elections, Rubio leads state Governor Charlie Crist, an independent, by 40 percent to 26 percent among likely voters, the poll found. Democrat Kendrick Meek trails at 21 percent.

For more of this story by Steve Holland, read here.


US Republicans take stock after Tea Party stunner

Divided Republicans pointed fingers and promised to regroup after a stunning Tea Party upset in Delaware dealt a blow to their hopes of recapturing Senate control in November. Conservative upstart Christine O’Donnell’s defeat of popular nine-term U.S. Representative Michael Castle in a Senate primary ended the career of one of the last Republican moderates in Congress and set off a round of Democratic celebrations.

For John Whitesides’ full story, click here.

U.S. industry, lawmakers urge action on China’s yuan

U.S. industry and senior Democrats ratcheted up pressure on Congress for a tough new trade law to punish China for what they see as an undervalued currency that threatens American jobs and profits. The chorus of complaints is part of a renewed drive for a bill that would slap duties on Chinese imports to force Beijing to let its yuan currency rise, an election-year bid by lawmakers to show voters they are serious about reviving the struggling economy.

For more of this story by Doug Palmer and Paul Eckert, read here.

For a Q+A on the issues, click here.

House’s Hoyer willing to compromise on tax cuts

Steny Hoyer, leader of the Democratic majority in the House of Representatives, showed willingness to compromise over the looming expiry of trillions of dollars in Bush-era tax cuts. Republicans demand, with the support of some Democrats, that tax cuts for families earning more than $250,000 a year be renewed alongside those for the less wealthy, creating an impasse with just weeks until the congressional election.

For more of this story by Thomas Ferraro, here.


Analysis: Small business at heart of tax debate

Democrats and Republicans are trading blows over tax policy, but they can agree on one thing: they all love their small businesses. Small businesses are an engine of job growth and evoke a warm image of hard-working folks laboring to keep the American dream alive. They have also become ammunition for both sides of a debate about whether to extend Bush-era tax cuts for the wealthiest Americans, which expire at year-end along with tax cuts for all income groups.

For more of this story by Kim Dixon, read here.

Industrial output growth slows

Industrial output slowed last month and a regional measure of factory activity touched a 14-month low in September, pointing to a cooling in manufacturing as the boost from an inventory build-up fades. The reports were consistent with other data suggesting the U.S. economy is stuck in a soft spot, but they also showed the manufacturing sector continued to expand and offered nothing to suggest a new recession was brewing.

For more of this story by Lucia Mutikani and Emily Kaiser, read here.

Google hit with new privacy problems, fires engineer

Internet search and advertising giant Google Inc fired an engineer in July for violating users’ privacy, the company said. The engineer, David Barksdale, was accused of accessing information about teenagers he had met in a Washington state technology group, according to gossip website Gawker, which first reported the incident on Tuesday. Google would not confirm details of the firing.

For more of this story by Diane Bartz, read here.


Regulator questions push for covered bond law

A top banking regulator questioned the need for legislation intended to speed development of a covered bonds market. Supporters of boosting this market argue it would provide a safer and more stable method for banks to raise funds and in turn provide credit to consumers for mortgages and other loans.

For more of this story by Dave Clarke, read here.

U.S. senator says time to reform freight rail

Freight railroads use market power to overcharge certain shippers and policy must change to ensure fair pricing, a Senate committee chairman said. Freight railroads are some of the healthiest companies in the economy, and should no longer benefit from a law enacted years ago to restore their viability, Commerce Committee Chairman John Rockefeller said in a statement accompanying a staff report.

For more of this story by John Crawley, read here.

What we are blogging…


O’Donnell slams Republican “cannibalism”

Fresh off an upset victory in Delaware, Tea Party candidate Christine O’Donnell slammed the Republican establishment for “cannibalism” during the primary election but predicted she could win in the general election even without their support. O’Donnell, an upstart who knocked off nine-term Representative Michael Castle in Tuesday’s Republican Senate primary election, made the rounds of the morning TV shows to tout her victory against the mainstream candidate.

For Deborah Charles’ full blog, read here.


From elsewhere…

Goldman sued by women claiming gender bias

Goldman Sachs Group Inc was hit with a gender bias lawsuit by three women who said Wall Street’s most profitable bank maintains an “outdated corporate culture” that systematically deprives women of pay and promotions available to men. The plaintiffs are seeking class-action status on behalf of women who have worked as Goldman managing directors, vice presidents and associates in the last six years. It seeks punitive and other damages, and an end to gender bias at Goldman.

For more of this story by Grant McCool and Jonathan Stempel, read here.


For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credits: REUTERS/Rebecca Cook (Tea Party member Scott Niemi at a Michigan rally February)  REUTERS/Tim Shaffer (O’Donnell celebrates at her campaign victory in Dover)

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