Fight Lines: Scrambled politics, tricky paths on financial reform

By Rick Klein: If you can get your mind out of outer space for long enough… There’s a debate set to pick up that’s very much here on earth. The terrain is tricky to navigate — but just might be hospitable with the right kind of politics. It’s an intriguing fight that seeks to solve a problem years in the making. Everyone agrees that it’s a problem, and something is almost certain to get done about it. And there’s a window open to make that something rather big — though surely it can be big enough to fail. President Obama on Wednesday meets with bipartisan, bicameral congressional leadership on financial regulatory reform. (Stop us if you’ve heard this one before…) To the White House, the choice is clear — “whether to stand with the American people or stand on the side of the status quo.” The realities of the debate are somewhat less clear — and this has lingered long enough for Republicans to scramble the politics all over again. The latest Republican stand seeks to align the GOP against a cycle of bailouts; remember, no one has a monopoly on populism. And cue the classic set-up for a debate in the era of Obama — the left already thinks the president has given too much ground, and won’t want to stand for bending to the further demands of a Republican or two. But after a few days of looking presidential on the world stage, right here at home — and with some pre-SCOTUS maneuvering room offering itself up — it’s a big opportunity for a president who’d like to get something else big done, and soon. Emboldened, and in power: “Wall Street giants Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley had been pressing hard in recent days to dilute provisions of the bill that would change the rules for derivatives trading. But the Obama administration, which has made this one of its priorities for the financial-regulatory bill, has pushed back hard and appears to be succeeding,” Damian Paletta and Scott Patterson write for The Wall Street Journal.  That’s drawing Republican complaints that the pending rewrite of the rules of finance will put the economy at risk.” Digging in — Senate Minority Leader Mitch McConnell, R-Ky.: “The fact is this bill wouldn’t solve the problems that led to the financial crisis. It would make them worse.” The New York Times’ David M. Herszenhorn and Sewell Chan: “Mr. McConnell’s comments offered a first glimpse at a Republican strategy carefully calibrated for a highly competitive midterm election year. In many ways it is a political high-wire act, as the Republicans seek to oppose the Democrats’ bill while not appearing to side with the banks at a time when popular anger at Wall Street is high.” From the populist front: “Senate Republicans unveiled a fresh attack yesterday against a regulatory revamping of the US banking industry, contending that Democrats’ proposals to curb the reckless practices that contributed to the 2008 economic meltdown would create a ‘perpetual taxpayer bailout of Wall Street banks,’ ” The Boston Globe’s Matt Viser reports. “The GOP wants to avoid handing President Obama another major victory following last month’s passage of the health care overhaul. At the same time, with polls indicating that voters support tighter Wall Street regulations, Republicans don’t want to leave themselves exposed to allegations that they are defending the investment industry,” Viser writes. “The Republican attacks drew a quick rebuke from the White House and pushed an issue long viewed as ripe for bipartisan agreement deeper into partisan territory,” Politico’s Carrie Budoff Brown and John Bresnahan report. “The sharp turn in the tone of the debate suggests Democrats might have to struggle to peel off more than a handful of Republican votes, if that. … Republicans are gravitating toward a strategy that defies the conventional wisdom held by Democrats — that the GOP, from a political standpoint, cannot throw up uniform opposition to Wall Street reform as it did with health care reform.” The frame — via Jen Psaki, deputy White House communications director, at the White House blog: “The reality is that there’s a clear choice in this debate: to stand with American families or stand on the side of the big Wall Street banks and their lobbyists who are defending the status quo. Opponents of reform are protecting the big banks at the expense of American families — so they’re going to do whatever they can to keep the present system in place and leave the American taxpayer with the bill.” Worries, on the left: “Republicans have been looking for a way to oppose Senate Democrats on financial reform without looking like patsies for the Street. And now they think they’ve found it — by trying to make Democrats look like patsies for the Street,” Robert Reich writes at Huffington Post. A storyline the White House likes: “The revolving door is an oft-noticed phenomenon here, but in recent years, the migration from Congress to the financial services firms that are trying to stave off greater federal regulation has become more pronounced,” The New York Times’ Eric Lichtlbau reports. Another storyline the White House likes: “Banking executives pushed back Tuesday against pressure from lawmakers and housing advocates to cut the loan balances of millions of homeowners who owe more than their homes are worth,” Renae Merle reports in The Washington Post. Yet one more in that category: “Top White House officials last week pressed the chief executive officers of Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. to stop lobbying against a financial-regulatory bill advancing in Congress, according to people who attended the meeting,” Bloomberg’s Julianna Goldman and Alison Vekshin report. “President Barack Obama’s senior adviser David Axelrod and National Economic Council Director Lawrence Summers met with Goldman Sachs CEO Lloyd Blankfein, JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan and about 12 other executives at an April 6 event in Washington hosted by the Financial Services Forum, said the people, who declined to be identified because the meeting was private.” For President Obama out of the nuclear summit — and at the end of nuclear week — looking like he wanted to look. New York Times headline: “Obama Puts His Own Mark on Foreign Policy Issues.”  “If there is an Obama doctrine emerging, it is one much more realpolitik than his predecessor’s, focused on relations with traditional great powers and relegating issues like human rights and democracy to second-tier concerns,” Peter Baker writes. “He has generated much more good will around the world after years of tension with Mr. Bush, and yet he does not seem to have strong personal friendships with many world leaders.” Washington Post headline: “Obama Comfortable as Head of Nuclear Summit Before World Leaders.” “The approach marked a shift for Obama as he seeks to translate his popularity abroad into concrete support from fellow leaders for his foreign policy agenda, most urgently now in his push for stricter sanctions against Iran,” Scott Wilson writes. “Obama used the summit and its sidelines to elevate the arcane issue of nuclear materials security, once the province of scientists and think tanks, to a higher rank on the international security agenda.” McClatchy’s Jonathan S. Landay and Margaret Talev: “It also was a chance for Obama to show U.S. voters another side of him. The public’s impression of him could improve if they view him as effectively exerting leadership on the world stage. The summit featured imagery of Obama surrounded by nearly four dozen other world leaders at the largest international conference since the World War II era, and produced results.” Out of the summit: “President Obama heralded progress made in drafting sanctions against Iran as punishment for its nuclear weapons program, even as he downplayed expectations for what the sanctions could accomplish,” ABC’s Jake Tapper reports. “Sanctions aren’t a magic wand,” the president said. “What sanctions do accomplish is, hopefully, to change the calculus of a country like Iran, so that they see that there are more costs and fewer benefits to pursuing a nuclear-weapons program. ” So much we didn’t hear about… Dana Milbank, in his Washington Post column: “In the middle of it all was Obama — occupant of an office once informally known as ‘leader of the free world’ — putting on a clinic for some of the world’s greatest dictators in how to circumvent a free press. The only part of the summit, other than a post-meeting news conference, that was visible to the public was Obama’s eight-minute opening statement, which ended with the words: ‘I’m going to ask that we take a few moments to allow the press to exit before our first session.’ ” Michelle Obama, flying solo: A surprise trip Tuesday to Haiti, on her way to Mexico City, for the first foreign trip she’s taking as first lady without her husband. “Obama, who has been somewhat of a homebody since coming to the White House, with relatively little travel on her public calendar, made the unannounced visit before her scheduled trip to Mexico this evening for a three-day visit,” ABC’s Karen Travers and Yunji de Nies report. “The first lady’s agenda for the three-day trip mixes policy and community outreach with cultural events and social time with Zavala. An Obama administration official said the first lady’s trip is the kick-off to her international agenda, which will focus on engaging the world’s youth in conjunction with President Obama’s broader vision of global engagement. Others see the trip also as a key example of the power of the position of first lady.” “At an elementary school where she is scheduled to visit on Wednesday, Mexican students were busy practicing songs and dance moves for the first lady and were delighted that the visit meant that their bathroom was getting a new coat of paint,” The New York Times’ Marc Lacey reports. Up in the air — high in the air: Neil Armstrong makes this week’s NASA speech a little more interesting. Armstrong joined in an open letter with the commanders of Apollo 13 and Apollo 17 to decry what they view as “devastating” new policies for the space agency: “Without the skill and experience that actual spacecraft operation provides, the USA is far too likely to be on a long downhill slide to mediocrity.” ABC’s Jake Tapper, on “Good Morning America” Wednesday: “They say in space no one can hear you scream, but that’s not the case down here.” But adjustments are being made, and President Obama “has the second man to walk on the moon, Buzz Aldrin, on his side,” Tapper reported. In advance of Thursday: “President Obama will announce plans Thursday to revise and retain one element of the discarded Constellation rocket and space capsule system, commit to selecting a rocket capable of carrying astronauts to deep space within five years and allocate $40 million to put together a job-retraining program for Florida space workers who will lose their positions when the space shuttle is grounded next year,” The Washington Post’s Marc Kaufman writes. Battle lines, in space: “The administration’s plan has been cheered by so-called New Space advocates who believe that traditional NASA programs are too big, too expensive and too slow and that turning to entrepreneurs will spur a vibrant new space industry. But even many of those who support the new strategy say the administration has not done a convincing job of explaining it,” The New York Times’ Kenneth Chang reports. “President Barack Obama will revamp NASA’s planned Orion crew capsule, speed up development of a massive deep space rocket and perhaps consider adding more shuttle flights beyond their scheduled retirement this year, a senior White House official said Tuesday,” the Houston Chronicle’s Stewart M. Powell reports. “Obama will ‘outline a broad vision for NASA that unlocks our ambitions and expands our frontiers in space,’ ultimately reaching Mars, the official said in a telephone interview as he previewed the speech Obama will deliver Thursday at Florida’s Kennedy Space Center.” Elsewhere in Florida… Charlie Crist, cracking a door open just a bit, again: “Hounded by conservative activists as too liberal, Florida Gov. Charlie Crist is being advised by some close supporters to abandon his lagging Republican primary bid for a U.S. Senate seat and run instead as an independent,” Peter Wallsten and Valerie Bauerlein report in The Wall Street Journal. “In an interview Tuesday, Crist campaign manager Eric Eikenberg appeared to leave the door open to an independent bid. He said Mr. Crist would ‘qualify for office” but declined to affirm he would qualify for the ballot as a GOP candidate.”
Look for fireworks on the Hill Wednesday: Attorney General Eric Holder gives his long-delayed testimony before the Senate Judiciary Committee — his first appearance since November — at 9:30 am ET. Republicans have a full plate to present him with — trial locations, the Christmas Day bomber, transparency, decision-making… Politico’s Kasie Hunt: “Attorney General Eric Holder will face a barrage of attacks Wednesday from Republican senators who say he’s made ‘dramatic mistakes’ on everything from paperwork to high-stakes terrorism trials. There’s no reason to believe Holder’s job is in jeopardy, but his session before the Senate Judiciary Committee may be the toughest public hearing in his tenure as attorney general.” “Everything from Mr. Holder’s handling of a controversial pardon during his tenure as deputy attorney general in the Clinton administration to his recent handling of terrorism cases has provided fodder for the GOP,” the Washington Times’ Ben Conery reports. “In the most recent example, it was revealed last month that Mr. Holder did not disclose during his Senate confirmation process Supreme Court briefs he filed in a notable terrorism case. The briefs, which he signed, challenged the George W. Bush administration’s power to detain indefinitely an American citizen, Jose Padilla, initially held as an ‘enemy combatant’ and later convicted in federal court of conspiring to kill people in an overseas jihad and to support overseas terrorism.” One fewer ally: “Chairman Patrick J. Leahy (D-Vt.) will miss the showdown Senate Judiciary Committee hearing Wednesday in which Republicans plan to challenge Attorney General Eric H. Holder Jr.’s handling of terrorism policies, committee aides said Tuesday morning,” The Washington Post’s Spencer S. Hsu writes. “Leahy will instead return to Vermont to attend the funeral of a close family friend.” Unbending…. “Six pages of the contract [Sarah] Palin’s handlers sent to Cal State Stanislaus were unearthed in a dumpster by students there this week, and one of the many requirements that must be met for the former vice presidential hopeful: two unopened bottles of still water and ‘bendable straws’ must be waiting on a wooden lectern,” ABC’s Matthew Mosk reports. “That was just one item among the pages of elaborate demands that must be met to land a contract for Palin to come speak at an event. More costly were the requirement for her travel — the venue must supply her with business or first class commercial airfare, or with a private plane.” In New York — officially out, at last: “Former New York Republican Gov. George E. Pataki has decided not to mount an election challenge against Democratic Sen. Kirsten Gillibrand this fall,” The Wall Street Journal’s Michael Howard Saul reports. “Instead, he said in an interview Tuesday that he would create a new national organization aimed at building support to repeal the recently enacted health-care overhaul.” On 2012: “It’s way too early for anyone to make a decision unequivocally that they will or will not run.” In Florida: “There was no Massachusetts Miracle in South Florida Tuesday,” the Palm Beach Post’s George Bennett reports. “Democrat Ted Deutch won the nation’s first congressional election of 2010, allowing his party to retain the overwhelmingly Democratic Palm Beach-Broward District 19 seat that ‘fire-breathing liberal’ Robert Wexler represented for 13 years.” Also in Florida — with health care done, next up for Rick Scott: “Well, Bill McCollum’s life just got more complicated. Currently Florida’s attorney general, McCollum was expected to the … Republican nominee for governor, and the odds-on favorite to win. Rick Scott, who financed a great deal of television commercials spelling out the potential negative consequences of Obama’s health care plan, just announced he’s running for governor,” National Review Online’s Jim Geraghty reports. Down in Texas — Republicans feel good about their chances, coming off a pair of run-offs for House seats: “Republicans Bill Flores and Quico Canseco won congressional runoffs Tuesday, giving the GOP well-heeled challengers in two potentially competitive Texas seats this fall,” Politico’s Jessica Taylor writes. “Flores, a wealthy former oil executive, defeated businessman Rob Curnock 64 percent to 36 percent and will face Democratic Rep. Chet Edwards in November. Canseco, who beat former CIA officer William Hurd 53 percent to 47 percent, will face Democratic Rep. Ciro Rodriguez.”
Bucking up the Blue Dogs: “Six Democratic lobbyists with deep ties to the Blue Dog Coalition, including former Reps. Bud Cramer (Ala.) and Charlie Stenholm (Texas), unveiled Tuesday a new nonprofit called the Blue Dog Research Forum,” Roll Call’s Anna Palmer reports. “In a letter to Rep. Stephanie Herseth Sandlin (D-S.D.), who co-chairs the Blue Dog Coalition, Cramer and Stenholm wrote that they were establishing the organization to ‘ensure there will always be a forum in Washington to mark that middle ground when it comes to issues affecting the country’s fiscal health.’ ” Teeing up Tax Day: “The Bipartisan Policy Center (BPC) will host a panel discussion, ‘Reforming Our Tax Code: A Bipartisan Solution,’ with Senators Ron Wyden (D-OR) and Judd Gregg (R-NH) … Wednesday, April 14, 2010, the day before tax day.  Senators Wyden and Gregg will discuss their recently introduced legislation, ‘The Bipartisan Tax Fairness and Simplification Act of 2010.’ The discussion will be moderated by BPC Advisory Board Member and former Senate Majority Leader Tom Daschle (D-SD).”
The Kicker: “Now, all of a sudden, the momentum is with the Republicans. And that’s — thank God — that’s the way people have spoken, you know? That’s our democracy.” — Sen. Joe Lieberman, I-Conn., to Newsmax. “The Speaker Reserves the right to change the flight plans at any time.” — Sarah Palin’s contract with Cal State Stanislaus, which called for a first class plan ticket or a private plane, in addition to bottled water with “bendable straws.”
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