President Obama

Setting Priorities

Up for possible consideration and Congressional debate next year: a jobs bill and the budget; climate change and energy legislation; education and transportation bills;  Wall Street and banking reform; important discussions about Afghanistan, Iraq, Iran and our new detainee policy; immigration reform; The Doha trade round and other international agreements; things we haven't considered yet; the contentious and difficult end game on health care reform, and at some point ways the federal government can better align our income and expenditures.  And of course there is much more than just this list.

Due to a hotly contested election year Congress will likely have half or fewer of the legislative days they had in 2009.  So, after watching what happened this year, do we really believe the President and Congress can tackle all of these in 2010, and do them well, allot the amount of time each issue deserves?  If not, what goes then?

Increasingly, it appears that the effective management of the Congressional calendar will be one of the most important issues challenging Washington next year.  Can the two chambers and the White House do a better job at bringing their party together to avoid the any one of these issues becoming the health care of 2010, eating up the calendar for months on end, preventing attention and action on other vital matters?  Or do our leaders have to admit to us that despite all that needs to be done - given the enormity of the challenges facing us - that only a few things can be done and done well in 2010?

Am fascinated by this dynamic, and interested to see how the President, Senator Reid and Speaker Pelosi approach this early next year.   Replicating what happened on health care this year on even a single issue next year could be a disaster for the governing party.   Will the three leaders try a different approach?

Politics Daily Looks at Immigration, Latinos

Jill Lawrence of Politics Daily takes an interesting look this morning at the politics of Hispanics and immigration reform.  It includes this passage, which starts with a reference to President Obama's speech to the Congressional Hispanic Caucus Institute last week:

in a speech punctuated with the phrase "todos somos Americanos" (we are all Americans), Obama also reiterated his commitment to fixing what he called a broken immigration system. If anything, he said, the health debate "underscores the necessity of passing comprehensive immigration reform and resolving the issue of 12 million undocumented people living and working in this country once and for all."

The two commitments amount to a strategy: Prove you're tough on enforcement before asking Congress to approve a path to legal status for millions of undocumented immigrants. There's every probability that most conservatives will resist that idea in 2010 as mightily as they have for the past few years. But if comprehensive immigration reform passes with few or no GOP votes, Obama and his party will have a lock on the Latino vote at least through 2012. If the immigration debate inspires anti-immigrant sentiment or candidates, congressional Democrats could benefit from heightened Latino turnout in 2010.

Latinos still rate Obama very high in polls, suggesting they understand his reasons for delaying action on immigration. But 2010 is their limit. "The disappointment of Latino voters will be profound" if immigration reform doesn't happen next year, NDN president Simon Rosenberg, whose group studies the Latino vote, told me. If Obama and his party delay the bill further, or their efforts look half-hearted, he added, "there will be costs. It will not be pain-free."

Kos Weekly Track Shows Democratic Erosion Continues

There is mounting evidence that President Obama will need to return from his vacation with a new game plan. 

Update: Found this nugget from last week's national Pew Poll:

Although the Obama administration and some economists have touted the early signs of an economic recovery, the public is, if anything, more gloomy about the economy than it was two months ago. Ratings of the national economic situation remain dismal, with 52% saying the economy is in poor shape, and 38% saying its condition is “only fair.” People’s assessments of their own financial situation are less negative, but the number describing their finances as “poor” ticked up from 22% in June to 26% today.

The most notable change in economic views is the decline in the number of people who expect their financial situation to improve over the next year. The June survey found a nine-point increase in optimism since February (from 54% to 63%). In the current survey, the proportion expecting their financial situation to improve has fallen back to 55%.  Much of the change since June has occurred among middle- and upper-income people. There was no rise in the percentage who think their situation will worsen; instead, the number expecting things to stay the same has grown.

My recommendation to President Obama - spend much more time talking about what is clearly the number one issue to voters today, the economy; do more to help improve economic conditions for every day people; and use Labor Day and the G20 meeting as hooks to restart an important conversation with the American people about their economic future.

Sotomayor and Our Changing Politics

First, as someone who has been encouraging our nation's leaders to better understand and adapt to the rapid growth of our Hispanic population, today is a very satisfying day.  Despite her incredible qualifications as a judge, Sonia Sotomayor was not a safe or easy pick.  I applaud President Obama, and the Senate, for having the courage and confidence for giving her a chance to serve on the highest court of the land.   When she was chosen a few months ago I released this statement:

"President Obama's historic pick of Judge Sonia Sotomayor to serve on the Supreme Court is an acknowledgment and affirmation of the great demographic changes taking place in America today. Driven by years of immigration, our nation is going through profound change. The percentage of people of color in the United States has tripled in just the past 45 years, and America is now on track become a majority-minority nation in the next 30-40 years. The movement of our nation from a majority white to a more racially complex society is perhaps the single greatest societal change taking place in our great nation today. And if the Supreme Court is to have the societal legitimacy required to do its work, its Justices must reflect and speak to the people of America of the 21st century. The pick of Judge Sotomayor, a highly qualified, twice-Senate confirmed Latina to serve as one of the nine judges overseeing our judicial system, will not only put a thoughtful and highly experienced judge on the Supreme Court, it will go a long way toward making the Supreme Court one that can truly represent the new people and new realities of 21st century America."

Second, I am not surprised that a large majority of the Republicans in the Senate voted against her.  As I discussed at our immigration event earlier this week (see this writeup on the right-leaning site CNS), racial intolerance has been at the very core of the Republican Party's political strategy and ideological argument since Lyndon Johnson, the Voting Rights and Civil Rights Acts of the mid 1960s.  It became known as the Southern Strategy, and it was this most conscious exploitation of racial fear - Welfare Queens, Tax and Spend, Willie Horton, now criminals crossing the border - that perhaps more than anything else fuelled what we have called the Conservative Ascendancy in recent years.  

We also know today, however, that the conditions which created the opportunity for the success of the Southern Strategy have become a relic of 20th century politics.  But the current Congressional Republican leadership, all brought up and schooled in the successful eara of the Southern Strategy, knows no other politics. They are like an aging baseball pitcher whose fastball no longer pops, or a tv sitcom long past its prime.  They throw that pitch and it gets hit out of the park, that funny joke now falls flat, and these same racial conceits thrown around during the Sotomayor hearings bounce off an America whose people and attitudes towards race are very different from the America of the Southern Strategy era. 

Today's Republican Party is an almost entirely white party in an America which is now one-third non-white.  They are an aging party, holding on to a politics while once successful no longer works in the much more racially diverse America of the 21st century.  And this lack of diversity and long history of racial intolerance has taken its toll on the Republican brand with this fastest growing non-white part of the population, Hispanics.  In a tracking poll taken last week the favorable/unfavorable ratings for the Democratic Party with Hispanics was 53-31; the Republican Party 4 percent favorable, and 85 percent unfavorable.  The ratio for Congressional Democrats with Hispanics 46-34; for Congressional Republicans 5 percent favorable and 83 percent unfavorable.  4 and 5 percent! These are truly incredible numbers. 

As I said in my remarks on Tuesday I think that for the Republicans to get back in the game they will have to do more than just change their racial tune, elect a few more minorities, and begin this long process of modernizing their approach to race.  They will have to eventually acknowledge and repudiate their intolerant past, and their shameful exploitation of racial fear as a national political strategy. But today that day seems a long way off, and I have no doubt that the father of the Republican Party, Abraham Lincoln, if still alive today, would be holding his head down, ashamed of what his once proud Party had become. 

For more on the issues in this essay see this backgrounder, On Judge Sotomayor and America's Changing Demography.

Next Generation Thinking about the Mortgage Mess

In a post a few weeks ago I argued that policymakers were going to have to attack our core economic challenges we face with much more creativity and vigor than we have seen so far.   The Times today has an excellent op-ed by Daniel Alpert which offers up some such next generation thinking about how to get out of the mortgage mess - a critical part of any emerging national economic strategy - equal in size and scope to the problem itself.   

It begins: 

BY providing financial institutions with enough capital to survive (and even thrive) over the past year, the federal government prevented the global economy from grinding to a halt. But it may also have unwittingly encouraged banks to slow the resolution of delinquent, defaulted and underwater loans secured by homes and commercial real estate. Such “extend and pretend” behavior does little except delay losses — which helps explain the recent crop of prediction-beating, market-rallying bank earnings reports — while prolonging and worsening the damage done by bad loans.

Just this week, the White House met with a gaggle of mortgage company executives to discuss why their loan modification programs have been so ineffective. In fact, a recent study by the National Bureau of Economic Research illustrates that these programs haven’t been ineffective so much as unused: only 8 percent of seriously delinquent borrowers have received any form of mortgage modification and fewer than 3 percent of such borrowers received a concession on principal or interest payments from their lender. By contrast, about 50 percent of those seriously delinquent loans had foreclosure proceedings initiated against them. That’s a record rate of 1.9 million foreclosure filings in the first half of this year.

Banks, of course, typically lose more money by foreclosing on a home than by renegotiating the principal of a loan — but, as foreclosure timelines often run 12 to 18 months, that loss takes far longer to show up on their balance sheets. As a result, banks are pushing the mess (and the attendant additional losses) well into 2010 while they maintain the fiction that borrowers will be able to repay severely underwater loans in full. Banks are even beginning to turn down borrower requests for immediate “short sales,” in which homeowners sell for whatever they can get and then give all proceeds to the lender, because this, too, means that the bank must record a principal loss at once, rather than down the road.

The sheer magnitude of the debt bubble — doubling to $11 trillion in home loans and adding tens of trillions in total American debt in the past decade — along with the collapse of real estate prices, make it extremely unlikely that any of these houses will recover their value soon enough to mitigate the losses embedded in banks’ balance sheets. And by stretching out the time over which banks will continue to have their capitalization hit by losses, banks cannot soon fulfill their mission of providing new capital for the recovery and growth of the economy. Fearing for their own solvency, banks are instead salting away enormous, record-setting reserves.

To put the bubble behind us, we need to place mortgage lenders on a path to settling up with underwater homeowners. One of the few viable ways to do this is for banks to accept the voluntary surrender of deeds and then lease the homes back to their former owners. The former homeowners should then retain a right to purchase their homes back at fair market value, after, say, five years, during which time they would need to get their financial affairs in order.

Congress could pass legislation, within the bounds of constitutional protection of contracts, that would require lenders to provide such a lease-back arrangement to any borrower who wants one. The former homeowners would pay rents set in accordance with local rates (which in almost all cases would be considerably lower than the total of their former bubble-era mortgage payments, taxes and insurance premiums).

Count me as one of those who believe that for the national to see broad-based prosperity in the years ahead the banks will have to take some kind of "haircut" on consumer debt. Restructuring, deleveraging, or whatever we are going to call the process of lessening the debt load of consumers will at some point become seen as a requirement for the future success of the American economy and not some malevolent form of "moral hazard."  Until American consumers can get back in the economic game "recovery" will be more wish than reality. 

News from Iran, Honduras Tonight

Important news breaking late tonight. 

From Iran the new Vice President bows to the Supreme Leader and steps down.  In Honduras Zelaya re-enteres the country, which Secretary Clinton describes as "reckless."

Interesting times these are.

Hais, Winograd Pen Roll Call Op-Ed on Health Care Reform, Political Generations

Prolific NDN Fellows Hais and Winograd have a timely op-ed running in the print and on-line editions of Roll Call today.  It begins:

Millennials, Americans younger than 28, provided President Barack Obama most of his popular vote margin over Sen. John McCain (R-Ariz.) in 2008. Millennials are not interested in letting ideological posturing stand in the way of “getting stuff done,” as Obama likes to say, especially in an area as crucial as health care.

Like the members of other generations, almost all millennials (90 percent, according to a Pew Research Center poll in May) believe that it is time that health care is made more accessible and affordable for all Americans. However, only a third of millennials, in contrast to about half of those in older generations, are concerned about the impact of greater governmental involvement in the health care system (36 percent vs. 47 percent). And millennials are far less likely than older generations to prefer once again deferring health care reform to avoid higher taxes or larger deficits.

The fundamental question that Members of Congress from older generations will need to answer during this summer’s health care debate is just how much they want to accomplish as opposed to scoring political points or pursuing ideological agendas.

For the whole piece visit here.   We will be publishing a longer version of the essay later today, so check back this afternoon for more.

The CBO Weighs In

The Congressional Budget Office, powerfully, weighed into the health care debate yesterday:

Congress's chief budget analyst delivered a devastating assessment yesterday of the health-care proposals drafted by congressional Democrats, fueling an insurrection among fiscal conservatives in the House and pushing negotiators in the Senate to redouble efforts to draw up a new plan that more effectively restrains federal spending.

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes" necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory -- or cost curve -- of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, "The curve is being raised." His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation's bleak budget outlook even worse.

Elmendorf's blunt language startled lawmakers racing to meet Obama's deadline for approving a bill by the August break. The CBO is the official arbiter of the cost of legislation. Fiscal conservatives in the House said Elmendorf's testimony would galvanize the growing number of Democrats agitating for changes in the more than $1.2 trillion House bill, which aims to cover 97 percent of Americans by 2015.

A lot of Democrats want to see more savings, said Rep. Mike Ross (D-Ark.), who is leading an effort to amend the bill before next week's vote in the Energy and Commerce Committee. "There's no way they can pass this bill on the House floor. Not even close."

Going to be interesting to see how the White House and the Congressional Leadership respond over the next few days to the new information from the CBO.  Given the continued weakness in the economy, and the worsening long term fiscal picture that follows the recession caused decline in government revenue, those promoting health care reform will have to be persuasive that reform will both help create jobs and improve the long term fiscal prospects of the nation.  Given how weak the economy is now, until it improves I worry that any health care bill which can be painted as one that could push us further into recession now, or help drive us further from solvency in the future, will be a hard sell.

Rob Shapiro makes a similar case in his weekly column yesterday.

The Latest on Honduras

In the first successful military overthrow of a government in Central America in 16 years, Honduras’ military deposed the country’s President yesterday.  After the overthrow of President Manuel Zelaya, the Honduran Congress designated Roberto Micheletti as his successor.

The New York Times writes about Hemispheric unity during this time of crisis, and others comment on talks held by regional leaders and the Latin American response in the wake of the coup.  Much attention has been placed on the U.S. reaction – below you'll find the statement issued by President Barack Obama.  For the latest news analysis on the situation in Honduras, click here.


Office of the Press Secretary


For Immediate Release                                          June 28, 2009

Statement from President on the situation in Honduras

"I am deeply concerned by reports coming out of Honduras regarding the detention and expulsion of President Mel Zelaya. As the Organization of American States did on Friday, I call on all political and social actors in Honduras to respect democratic norms, the rule of law and the tenets of the Inter-American Democratic Charter. Any existing tensions and disputes must be resolved peacefully through dialogue free from any outside interference."



The G8 Condemn Iran, the Mullahs Harden

From the NYTimes:

TEHRAN — Despite new criticism from President Obama, the Iranian authorities showed no sign Friday of bending to domestic or foreign pressure, saying that the disputed presidential vote on June 12 was the “healthiest” in three decades.

The uncompromising words emerged as the Group of Eight countries, including the United States, fired a fresh broadside Friday, saying they “deplored” the post-election violence and demanding that the “the will of the Iranian people is reflected in the electoral process.”

In Washington, President Obama accused Tehran of violating “universal norms, international norms,” and saying that the bravery of the Iranian people is “a testament to their enduring pursuit of justice.”

“The violence perpetrated against them is outrageous,” the president said, with German Chancellor Angela Merkel by his side. “And despite the government’s efforts to keep the world from bearing witness to that violence, we see it, and we condemn it.”

The president also conceded that the crackdown would complicate his plans to have a dialogue with Tehran, saying: “There is no doubt that any direct dialogue or diplomacy with Iran is going to be affected by the events of the last several weeks.”

Chancellor Merkel, too, was harshly critical of the Iranian leadership, declaring in German that Iranians should be able to demonstrate peacefully and to have their votes count. “The rights of human beings, of individuals, of citizens are indivisible the world over and also apply, therefore, to the Iranian people,” she said.

But there seemed little likelihood that the Iranian authorities would be swayed by the harsh words, as a senior cleric called for demonstrators to be punished “ruthlessly and savagely.”

At Friday prayers at Tehran University, a senior cleric, Ayatollah Ahmad Khatami, referred to the demonstrators as rioters and declared, “I want the judiciary to punish leading rioters firmly and without showing any mercy to teach everyone a lesson.”

Reuters quoted him as saying that demonstrators should be tried for waging war against God. The punishment for such offenses under Islamic law is death, Reuters said.

The cleric’s remarks represented a significant hardening of official rhetoric as the authorities confronted the biggest political challenge since the Islamic Revolution in 1979. Yet. because Ayatollah Khatami is not regarded as a high-profile figure, it was not clear how much weight his words carried.

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