(White) House Rules

WASHINGTON, Dec. 3, 2004 — -- 48 Days Until Inauguration Day

Another day of Big Casino, long-term budget storylines that you can either allow to MEGO you or on which you can engage.

The Note -- as part of our not-for-credit tutorial on the President's twin domestic agenda items of Social Security and tax reform -- recommends full engagement.

This stuff is big and it matters in policy and politics.

So consider:

1. Read every word of Edmund Andrews' New York Times' story on Gregory Mankiw (the White House Council of Economic Advisers topper) and his suggestion regarding Social Security: "The benefits now scheduled for future generations under current law are not sustainable given the projected path of payroll tax revenue . . . " LINK

Mr. Mankiw, speaking at a Washington talk-a-thon that Mr. Andrews was smart enough to attend, didn't come right out and say that the point of moving to a personal savings account Social Security plan is to take pressure off of the trust fund by lowering the guaranteed minimum benefits for future retirees, but the keen Mr. Andrews (listening between the lines) closed his eyes, and practically heard just that.

2. The Wall Street Journal's John McKinnon and Jackie Calmes -- in their report on the President's December 15-16 economic pow-wow -- have these must read paragraphs:

"At a private retreat this week, congressional Republican leaders warned Bush aides about the uncertain prospects on Capitol Hill for much of the president's ambitious agenda. House and Senate Republicans expressed particular concern about the president's plans to revamp Social Security, given the opposition of most Democrats and of AARP, the largest and most active organization of seniors in the country."

"Republicans also took issue with the administration's prioritizing. While the president apparently wants to tackle tax overhaul in 2006 -- after trying to carve private retirement accounts from Social Security payroll taxes in return for new limits on guaranteed benefits -- some lawmakers would rather reverse the order. House Majority Leader Tom DeLay of Texas, for example, suggested tax overhaul should be Mr. Bush's top priority, according to people familiar with discussions at the retreat. Senate Finance Chairman Charles Grassley of Iowa has said Mr. Bush should have a tax plan to Congress by March if the White House expects to get something passed . . ."

"Republican lawmakers, with an eye already on the 2006 congressional midterm elections, are concerned, among other things, about how they can get Social Security and tax reform -- two big and risky pieces of legislation -- passed amid heightened hostility with Democrats. On Social Security, one Republican retreat attendee said, 'unless there's a buy-in on the part of Democrats -- a good number of Democrats and high-profile Democrats -- there's a real reluctance to go down this road . . .'"

"The three-day Republican retreat, at a Virginia conference center near Washington, brought together senators and House members, along with top Bush strategist Karl Rove, White House budget director Joshua Bolten and other administration officials. Mr. Bolten warned of cuts in some domestic programs as part of the administration's efforts to bring spending under control."

3. The Journal also has a must-read Sarah Lueck story on whether those looking for budget savings can find them in Medicare and/or Medicaid. Trust us enough to read the whole thing, but a single paragraph and killer quote sum up the piece's overall take:

"'Show me the money,' says Alec Vachon, a Republican consultant. 'Where is there any kind of substantial Medicare savings that can make a serious impact on the deficit? Ten billion dollars, what does that buy you? That's lunch at La Colline,' a restaurant on Capitol Hill."

4. The Journal's Washington Wire, by the estimable John Harwood, has two Big Casino items.

First, "CONSERVATIVES PRESS for Gramm at Treasury. The former Texas senator isn't close to Bush, but the Republican right believes it has little to show from Cabinet shuffle so far. He also might bring more lobbying clout than Snow, who some lawmakers complain has been ineffectual. Facing 'giant tasks' on tax and Social Security overhaul, "we have to be geared up," says the Heritage Foundation's Dan Mitchell. Other prospects if Snow departs: White House Chief of Staff Card and budget director Bolten. Insiders say it is unlikely Bush would tap Greenspan."

Second, after a summary of just-passed Bush budget cuts affecting science spending, the Wire has this: "That was 'a nice visit to the church of fiscal discipline,' says a Congressional deficit hawk, 'but we have to keep going.'"

5. The Washington Post's Jonathan Weisman, hidden in the business section, has a truly fascinating piece on the ideological and theoretical underpinnings of the Bush macro economic agenda, and it includes this:

"To pay for . . . cuts in investment taxation, the administration is eyeing two large funding sources: eliminating the tax deductibility of employer-provided health insurance and eliminating the deductibility of state and local taxes." LINK

Again, read the whole darn article if you want to be a Big Casino Playa.

6. Walter Shapiro's USA Today column is all about Big Casino, as the Upper West Sider attempts to put it all in meaningful language that will engage real people. LINK

We swear we didn't make these two paragraphs up:

"This red-ink reality was one of the budgetary horror stories brandished at a conference Thursday sponsored by the Government Accountability Office. Comptroller General David Walker, who heads the GAO, assembled more than 60 experts (including former Federal Reserve chairman Paul Volcker, former Commerce secretary Pete Peterson and Josh Bolten, the director of the Office of Management and Budget) for a discussion of the gathering threat caused by the government's fiscal irresponsibility."

"With the election over and no participant quoted without permission, this GAO forum featured a candid bipartisan dialogue that would be impossible in a more politicized environment. The dominant theme, expressed by Republicans and Democrats, was a sense of fatalism that the debt problem would grow much worse before politicians are galvanized to take action."

7. The New York Times' ed board wants ("demands," really) a full accounting of the Social Security transition costs -- or else!!! LINK

Now, after all the spinach, those of you who read The Note for the pure spectacle of American politics are surely due some dessert.

We can't actually offer you that here, but we can tell you where it is being served up today -- heaping platters of cookies an pie and ice cream.

In the hometown of Ed Rendell, Arlen Specter, and Mike Feldman today, at the Annenberg School at the University of Pennsylvania in Philadelphia, most of the leading figures in the Bush and Kerry campaigns are gathering to talk all day long about what happened and why in 2004 at the presidential campaign level.

In a full day of meetings, the two sides will get to hear in detail (mostly for the first time) what was going on behind the scenes in the other camp.

Sadly, for those in need of instant gratification, this year's sessions are supposedly completely media and public free, to encourage a free and full and frank exchange. Check out the way the school's website "touts" the proceedings. LINK

In any case, a transcript will be made (we think) and someday, perhaps we'll be let in on the jokes and history.

Per usual, the school has drawn, as we said, the bulk of the key players on both sides (including Bob Shrum, who presumably will be wearing a scarf -- lucky or otherwise -- on this brisk day; and/but not including, we are told, Karl Rove).

The participants are drawn by a desire to help the nation understand electoral history; a desire to hear the behind-the-scenes stuff from their colleagues across the aisle who were living parallel lives during those intense months; and perhaps, just perhaps, a desire to pocket the $10,000 honoraria that this event pays out to most/many.

Note: we would have come for free!!!

President Bush will introduce Bernie Kerik this morning as his nominee to succeed Secretary Ridge -- it will have happened by the time many of you read this, shortly before 10:00 am ET.

The President will sign the Individuals with Disabilities Education Improvement Act into law before lunch and the Internet Tax Nondiscrimination Act after lunch. On Saturday, he meets with President Musharraf of Pakistan at the White House and then goes to the Army-Navy football game in Philadelphia. On Sunday, he and Mrs. Bush will attend the Kennedy Center Honors.

The Washington Democratic Party has until 8:00 pm ET today to come up with the $750,000 needed to start the process of a statewide recount for the gubernatorial race. As of yesterday, they had over $500,000, nearly half of which came from a donation from the Kerry campaign.

On Saturday, voters in two Louisiana congressional districts will pick their members for the 109th Congress. Polls are open from 7:00 am ET to 9:00 pm ET. (Returns can be seen here after the polls close: LINK)

The AP's Adam Nossiter previews. LINK

Welcome Bernie Kerik. LINK, LINK, LINK, LINK, LINK, LINK, and LINK.

(The Washington Times' Joseph Curl reports Rudy Giuliani was the first pick to replace Ridge -- but the former mayor declined the position and recommended Mr. Kerik, according to a Republican source. LINK)

Welcome Mike Johanns. LINK, LINK, and LINK

(Some say Nebraska's Lt. Gov. Dave Heineman (R) now has a much better shot at remaining governor in 2006 -- as the field of the Republican Cornhusker Senate candidates has shifted. LINK

Farewell John Danforth. LINK and LINK

The Washington Post's Pincus and Ricks report that "President Bush is beginning a last-ditch effort to get intelligence restructuring legislation passed" and that Gen. Myers is satisfied that his concerns have been addressed. LINK

The Wall Street Journal's David Cloud writes, "Mr. Bush is expected to offer the most-direct assurances so far that the compromise bill now blocked in the House would protect the Pentagon's role in intelligence-gathering, even though it shifts overall control to a new national intelligence director, according to aides familiar with its contents."

Sen. Susan Collins (R-ME) flatteringly put the bills passage in the lap of the President himself, saying, "I am basing my optimism on the incredibly persuasive powers of the president of the United States, the commander in chief, who wants this legislation." LINK">LINK

Roll Call reports that Hastert, Collins and Lieberman are at a standoff. "I don't want to say I would never make any changes [to the bill], but I feel as if we've gone as far as we can go, that we've compromised as much as we can," Collins told reporters in the Senate Daily Press Gallery.

USA Today's Martin Kasindorf ponders amending for Arnold. LINK

The Des Moines Register's Jane Norman marks the end of Gov. Vilsack's reign at the DGA. LINK

Note that the Democratic governors yesterday endorsed the national chair/general chair DNC chair model, and said that they would ultimately endorse a candidate (or two) for the post(s). Note also that Howard Dean was at the meeting at the swanky Mandarin Hotel trying to drum up support, and Note that a lot of his former colleagues (and some newish governors) were at best lukewarm about the prospect of a Chairman Dean.

In short, the DNC chair race remains WIIIIIIIDE open.

The Columbus Dispatch's Mark Niquette reports, "Accusing Secretary of State J. Kenneth Blackwell of "stalling," the Green and Libertarian parties asked a federal court yesterday to order that Ohio begin a statewide recount of presidential election results immediately." LINK

The AP's John McCarthy Notes Kerry's campaign has joined the lawsuit by third-party presidential candidates seeking a recount in Ohio, though they do not question Kerry's loss. LINK

The Washington Post's Edsall and Willis report, "The GOP and the Democrats broke all previous fundraising records this year, but for the first time since the mid-1970s, the [DNC] raised more money than the [RNC]." LINK

The Washington Post's Dan Morgan reports that the House staffer who put the controversial (and extracted) personal income tax form access language in the omnibus has revealed himself and pronounces himself shocked at the fuss. LINK