Tales from the Trail

Then came social issues and ‘morality’…

RTR2CNMS_Comp-150x150The Tea Party’s November victories and the ensuing Republican drive for spending cuts are in large part the result of a political strategy that focuses tightly on fiscal and economic matters, while minimizing rhetoric on moral questions and social topics. But for how much longer can Republicans keep a lid on the culture war?

The 2012 presidential race, though lacking in declared GOP candidates, may be about to pry open a Pandora’s box bearing the name of social issues that have long divided Republican and independent ranks. And such an occurrence could work against the interests of fiscal conservatives, just as the GOP girds itself for a showdown with Democrats over spending cuts and the debt ceiling later this spring.RTXXP42_Comp-150x150

Former Pennsylvania Senator Rick Santorum, one of those Republicans who are running for president without actually running for president, tells NBC’s Today show that social conservatism is what built America and made it strong.

And if a recent NBC/Wall Street Journal poll shows 65 percent of GOP primary voters preferring candidates who focus more on the economy and the deficit, and less on social issues?   ”I think we can walk and chew gum at the same time,” he replies.

Even the battle of the budget shows signs of becoming a Republican morality fight.

Obama has his “Sputnik moment,” will it succeed like JFK’s?

Trying to get the U.S. economy back on track may sometimes seem a bit like reaching for the stars. Well, President Barack Obama today declared that America is facing a “Sputnik moment.”  

Speaking at a community college in North Carolina, Obama said innovation, training and education were vital to economic recovery, giving clean energy technology as an example of a promising area for job creation. “If this is truly going to be our Sputnik moment we need a commitment to innovation that we haven’t seen since President Kennedy challenged us to go to the Moon.” SPACE SPUTNIK

Obama, who was not born at the time of Sputnik, was trying to make the point that the country needs the same drive to tackle its economy that was used when it responded to the Soviet Union winning early challenges in the space age.

Washington Extra – Chicken and ducks

USA-HEALTHCARE/The wrangling continues over the Bush-era tax cuts. President Barack Obama said he was confident Democrats and Republicans could break the deadlock and reach a deal soon. But with time running out, there is something of a game of chicken being played by the two sides. Each is watching to see who blinks first, and with the economy still struggling, both know the stakes are high.

 

Texas Republican Congressman Jeb Hensarling warned of the risks of failure:  “In a lame duck session, a lame duck Congress should not turn our economy into a dead duck economy.”

 

Let’s just hope they don’t duck the issue.

 

Here are our top stories from Washington today…

 

White House memo outlines new anti-leak measures

The White House has set up a special anti-WikiLeaks panel after the embarrassing flood of State Department cables leaked by the website, and its proposals include teams of inspectors who would prowl government agencies looking for ways to tighten security. A four-page draft memo circulated by the White House says President Obama’s national security staff has created an “Interagency Policy Committee for WikiLeaks.”

The Lunchbox Index

GERMANYThe Dow, the FTSE, the Hang Seng — all these are economic indices of a sort. But in Washington, there’s another index that might offer a more intimate picture of people under economic pressure, and it’s as near as the office fridge. Let’s call it the Lunchbox Index.

Decades ago, lunching out used to be an integral part of the Washington working day, with expense account palaces like the long-gone Sans Souci filled to capacity with the great, the good, the powerful and, yes, journalists pumping their sources.

That still goes on, but more often than not, lunch is a meal to be grabbed on the fly, close to a phone and a computer. Even a take-out lunch can be costly: soup or a sandwich is easily $6, a substantial salad $10. Want a cookie for dessert? That’ll be $3, please. Even those who can afford the time to go out to lunch might have second thoughts about paying $20 or more for a daily mid-day meal.

Did GOP victory boost economic optimism?

USA-TAX/It’s not exactly a tsunami of euphoria. But Republican victories in the midterm elections may have helped goose economic optimism, at least among …well… Republicans.

A new Gallup survey finds that Republicans grew more optimistic during the first week of November, as Tea Party candidates led a GOP charge that captured the House and narrowed the Democratic majority in the Senate.

Republicans grew 13 points rosier on the Gallup Economic Confidence Index, compared with October, and that change appeared strong enough to drive an increase in optimism across the board.

Washington Extra – Down but not out

How the Democrats could have done with those numbers a week ago, or more precisely how they could have done with three or four months of numbers like that. The U.S. economy created a net 151,000 jobs in October, hiring hitting its fastest pace in six months. It is a sign that the economy is regaining momentum after a desperately sluggish summer, and might have lifted President Barack Obama’s mood a little too as he makes the long trip to India. USA/

They were subjected to some bitter attacks from their opponents, and even had their detractors within their two parties. Both suffered cruel defeats this week, but if you thought you had seen the back of Nancy Pelosi and Christine O’Donnell, think again. The Republican from Delaware, who ended her remarkably upbeat concession speech with an invocation to have a “party”, has already announced she is pursuing a book deal and will still be fighting against the Democrats. Shades of Sarah Palin perhaps.

Pelosi, meanwhile, says she now wants her old job back, that of House Minority leader. Defeated or not, who would bet against her?

Washington Extra – I see your gauntlet, and raise you a gauntlet

On Friday, President Barack Obama threw down the gauntlet to Republicans on taxes, effectively daring them to vote against a tax cut for the middle classes, just so that they can give an average of $100,000 in tax cuts to millionaires.

boehner_MitchOver the weekend, Republican leader of the House John Boehner seemed to shirk the challenge, but on Monday, Senate minority leader Mitch McConnell picked up the gauntlet and threw it right back. McConnell has promised to introduce legislation “today” to ensure that “no one in this country pays higher income taxes next year than they are right now.” There are no Republicans who support a tax hike, he said, effectively daring Democrats to vote for higher taxes when the economy is in the mire.

Washington Extra is not sure who will blink first. But whichever side you take in this debate, one thing is for sure: this “wrestling match,” as Obama called it, or game of high-stakes political poker if you prefer, does the economy no good at all.

Obama finds reality of change is no quick fix on economy

President Barack Obama has come face-to-face with the reality of change (his campaign slogan) and found it is slow moving when the economy is involved.

OBAMA/“My analysis is that we came in with great excitement and people hoping that we could turn the corner really quickly. And we couldn’t,” Obama said in an interview with ABC’s “Good Morning America.”

“This is a hard set of problems that we’re facing. And so, folks have now seen a year and a half of unemployment above 9 percent. And long-term unemployment at record levels. And so, people are hurtin’ out there. And they’re anxious and they’re fearful,” he said.

You take that back, Mr. President!

Republicans are lining up to throw punches at President Barack Obama.

The Democratic president has been trading verbal barbs with House Republican Leader John Boehner over economic and fiscal policy. Obama on Wednesday took several swipes at Boehner and charged that it was the Republicans who took the country into deficit when they were running things in Washington. USA-STIMULUS/

Boehner retorted that Obama should freeze all tax rates and cut “federal spending to where it was before all the bailouts, government takeovers, and ‘stimulus’ spending sprees.” Boehner is in line to become House Speaker if Republicans seize control of Congress in November elections.

Other Republicans also jumped in the fray. Boehner’s House Republican lieutenants Eric Cantor and Mike Pence issued statements backing Boehner, saying non-security spending should be cut to 2008 levels. 

Washington Extra — Not another stimulus

On Wednesday, President Barack Obama plans to announce his latest package of plans to stimulate the sagging U.S. economy, most of which are already known. It was hardly a surprise to see Republicans quickly positioning themselves to block the plans, but more disappointing to the White House must have been the cautious response even from the president’s fellow Democrats on the Hill, who simply said they were looking at the proposals.wallst Even more damning, perhaps, was the verdict from the financial markets, which greeted the news with a big yawn. Both the Dow and the S&P indices ended the day more than one percent lower, dragged down by fresh growth worries in Europe. Economists on Wall Street said the plans would not do enough for small businesses or to solve the Democrats’ biggest economic and political problem: finding work for the 14.9 million unemployed. There are big questions, too, about how the plans will be paid for. “If he chooses to take away a corporate tax break to pay for this proposal, the net gain is zero,” said Andrew Busch at BMO Capital Markets. “This is likely why U.S. stocks are not seeing much of a bounce on the news.”

Last week White House economic adviser Christina Romer left town with a plea for a new deficit-financed economic stimulus. Today it was the turn of former budget chief Peter Orszag to go public with his prescription for the economy and taxes, views which differ from those of his former boss. Orszag suggested that the Bush-era tax cuts should be extended for all Americans for another two years in an effort to spur the economy, with a promise they will be allowed to expire altogether at the end of 2012. It is a view which makes some economic sense, but is unlikely to get much traction with a president likely to be campaigning for re-election that same year.

Some interesting interviews on the first day of the Reuters Aerospace and Defense Summit here in Washington. The CEOs of Lockheed Martin and of Boeing’s defense wing said both companies were well aligned for the new reality of huge fiscal deficits and tight defense budgets. Both men expressed strong support for the administration’s recently announced export control reforms, as well as new plans to extend and expand tax credits on research and development. Lockheed Martin’s Robert Stevens said he also saw the global security environment changing significantly in coming decades: withdrawals from Iraq and Afghanistan, coupled with threats from the Korean peninsula, Iran and China meant resources were likely to be shifted away from land and towards air and naval defense systems.