Tuesday, January 22, 2008; 1:00 PM
K Street columnist Jeffrey Birnbaum will be online to discuss the intersection of business, politics and government on Tuesday, Jan. 22, at 1 p.m. ET.
A list of Birnbaum's columns can be found here.
A transcript follows.
Jeffrey Birnbaum: Hello everyone. Thanks for writing in. The hot news today involved the markets and the soon-to-be-proposed stimulus legislation. My column is about organized labor's worry that it won't get much into that legislation. But, in fact, every interest in town has the same concern. That could lead to a feeding frenzy if the congressional leaders aren't careful. What do you think about that prospect? Is it real? Is is a problem, if it's real? Might more stimulus be better than less? Write in often. Let's begin.
Fairfax, Va.: When I look at the Republican field, there's only one candidate, John McCain. I know he had a hard time earlier in the year but he's over that now and there's only one Republican who is qualified to be president. The voters will get around to that. Isn't that the way it usually works.
Jeffrey Birnbaum: Well, McCain certainly has come back from the political dead. He did not have much hope over the summer. He was low on money and support. He got rid of a lot of his staff. But the GOP field, at least according to a lot of Republican voters, was weak and he looks at least at the moment like the strongest candidate in it. That could change. It's changed about a million times so far. Every time you turn around there's another leader in the polls. Well, it is McCain's turn and we'll see if he can beat Rudy in Florida and carry a bunch of states on Super Tuesday, Feb. 5. That will be the test, and a big one it is.
Wilmington, Del.: The economy is going straight down now. That's what most people are worried about. Does that mean the presidential candidates and the lobby groups will pull out all their solutions to that and talk about them more on the national scene?
washingtonpost.com: Fed Cuts Key Interest Rate as Asian Markets Drop for Second Day
Jeffrey Birnbaum: Yes, that is exactly what's happening. Every interest worth its retainer has lobbed a suggestion into the in box of senior lawmakers and the Bush administration. The danger is that the decision makers might listen too closely and try to include everything on everybody's wish list. Saying "no" will the hard part, don't you think?
Washington, D.C.: Why should labor get so much say anyway?
Jeffrey Birnbaum: My column today does not say that labor SHOULD get more. It just notes that organized labor is worried that it not being heard. In fact, it does appear that labor may not get one of the things it most wants--increased spending on infrastructure. Early drafts of stimulus bill appears to have left that out. The AFL-CIO and other labor groups will not be happy--and they have not been as happy you might imagine they would have been. Stay tuned on this one.
Washington: Hillary Clinton stole her victory in Nevada, in my view. Obama should complaint to the authorities and take that election back. It's time he took the offensive against the Clinton machine.
Jeffrey Birnbaum: Obama is certainly fighting back if last night's debate was any indication. I don't see how Clinton stole the Nevada caucus; Clinton has been suggesting that it was Obama that was dealing improperly. But in any case, the Clintons are playing hard ball these days. They don't want to lose the South Carolina primary to Obama, which is a strong possibility this Saturday. But Obama is starting to jab back. He probably needs a right hook that connects to make any difference, though.
Alexandria: I saw that the lobby for stock brokers finally got a new CEO. That's a group that's been having trouble. Will that end finally now that a person is in charge?
Jeffrey Birnbaum: You're right. SIFMA, the lobby group for stock and bond traders, selected Tim Ryan, an investment banker, as its new CEO. SIFMA, which is relatively new, got rid of two previous chief executives in short order, which gave the organization a rough start. But Ryan has both Wall Street and Washington experience and might finally put the place on a straight path. Certainly, those industries need a strong voice given what's been going on in the markets lately. Ryan will be based in New York so we'll see how much influence or interest he has in legislation and regulation.
New York: Why is Fred Thompson still in the race? I thought if he lost in South Carolina he would drop out. At least he should.
Jeffrey Birnbaum: You still might be right. Thompson needed to show that he had strength in his native South to stay alive in the race. He did not do that in South Carolina. I would not be surprised if he endorsed John McCain right before the Florida primary next Tuesday to give him the lift he would need to beat Rudy there. Thompson could later collect on that good deed if McCain wins the GOP nomination.
Washington, D.C.: Why is having a movie night such a big deal?
Jeffrey Birnbaum: You are referring to my column today, which talked about the screenings and meals held regularly at the Motion Picture Association of America. Public Citizen, the liberal advocacy group, wants them to stop because it says they are now-prohibited gifts to lawmakers and their staffs. The new lobby law, Public Citizen says, has banned such affairs. MPAA disagrees and is continuing with its private film events. They say they are "widely attended" and also have a serious educational component to them. As a result, they are allowed under the old law and the new law. This matters because if MPAA's event goes away so will a lot of entertaining that goes on in the capital. That could change the way Washington works. As it turns out, despite all the hype, the new lobby law did not do much to change behavior in town. All the exceptions that allowed wining and dining to go on under the old law, are still in affect now. Shhhh! Don't tell the public. They might get mad.
Long Beach, Calif.: Speaking as a 17 yr veteran, former financial consultant I can happily tell you it is impossible for there to be TOO MUCH stimulus.
The entire middle class is near disaster if the underpinnings keeping their next paycheck a possibility come unhinged. This is because most of america is one paycheck away from financial disaster. And THAT is caused by politicians encouraging everyone to go spend like Paris Hilton on a drinking binge to drive the economy because we do not MANUFACTURE anymore. Americans are wiping out their already paltry savings.
The answer is to keep the boat afloat by stimulating the economy with direct infusions of cash, by re-setting adjustable mortgage rates across the board to 6%, and lower. By eliminating pre-payment penalties across the board. By repealing the tax rebates to the billionaires (the top 1% of income earning americans) we can help pay for the stimulus.
If the economy fails it won't matter how much debt we have - we'll be toast. If we save the economy with aggressive action, we can pay off the debt later.
The risk of inflation is 0% at this point. When Bernanke raised the rates it was only the cost of oil that was an inflationary pressure.
Jeffrey Birnbaum: That's a very broad and deep suggestion. Not even the liberal Democrats would go that far. But, who knows? It might work. What do you, dear reader, think of that approach? Too much? Should there be limits due to a worry about inflation?
Princeton, N.J.: It seems to me that most of our present economic problems are because of lack of regulation, not only on the lending industry, but also on the bundlers of the bad loans, on the people who rated these securities and on the banks and other institutions that bought them. While some of this was undoubtedly due to the Republican hatred of regulation, a lot of it belongs to the lobbyists for effectively fighting it. Yet another argument for controlling lobbying?
Jeffrey Birnbaum: Maybe it's an argument for more regulation. I'm not sure that restraining lobbyists would do much. I also doubt that anyone actually could restrain lobbyists in the manner you imply. People can push on government all they want. Maybe lawmakers and executive branch officials need to push back a little harder. Agreed?
Reading, Pa.: Sir :
In your opinion how likely is a world depression? It seems obvious with the tremendous amount of our tax money Bush has been throwing away on the war in Iraq and with the subprime mortgage crisis that we would have a recession but all these Polyannas tried to pretend it wouldn't happen and are only now admitting it now that we are smack dab in the middle of it. So When will we hear the truth -- when we're all selling apples on the corner ?
Jeffrey Birnbaum: I tend to be an optimist about these things. I think the U.S. is in a recession and that the world economy is in for a contraction as well. But that is far short of a depression. Slow growth or negative growth is certainly possible for a year or so, giving time to unwind the huge amount of unsellable mortgage securities that are out there. But economic management is much better these days than in the 1920s and 1930s. Neither the Federal Reserve nor Congress will allow things to disintegrate so badly that the world tumbles into prolonged poverty. I believe in cycles and there will be an upside at the end of the coming trough.
Washington, D.C.: Who are the better known lobbyists/firms for the repeal of the Death Tax?
Jeffrey Birnbaum: Patton Boggs has long had clients that want to repeal the estate tax. The National Federation of Independent Business and American for Tax Reform have also been at the forefront, I believe.
Boston: Labor, labor, labor. They are losing members and are not so important anymore. No reason for them to be listened to by Democrats.
Jeffrey Birnbaum: That's not what labor says. Organized labor believes it is largely responsible for the Democratic majority in Congress and is demanding that it be listened to. Whether the Democrats do so, is not clear. If unemployment insurance is beefed up and extended will be one indication. But keep your eye on infrastructure spending. Labor wants that increased; Bush doesn't. If the Democratic Congress can deliver some of that, then labor can be declared a winner. If not then . . .
New Haven, Conn.: The feeding frenzy over the stimulus legislation is a disgrace. How many special interests have tried to fit their way into the bill and will they make it?
Jeffrey Birnbaum: Well, a lot. I do have to say, though, that some groups are not really trying to hard. They realize that tiny favors probably won't be much appreciated in a big broad bill like this one. They might lose more friends than make them if they try to get their own little giveaway item. But stranger things have happened. If any one group gets a special gift, then the floodgates will open. So far, the travel industry, the construction industry, and many others have already been trying--waiting for the moment to pounce.
D.C.: Rudy is waiting until Florida. That does not make sense to me. He has not won anywhere or even tried. Yet he thinks he can take the country by storm by winning in one big state. Can you explain that strategy to me?
Jeffrey Birnbaum: I think you just explained it pretty well. Rudy hopes to win in Florida and show that he has big support in big states--just in time for a whole bunch of big state contests on Feb. 5, Super Tuesday. Only problem is that the polls who McCain ahead in places that include Rudy's own home state of New York. That can't be good news for the nation's mayor. It could be do or die for him in the Sunshine State.
Princeton, N.J.: I hate this terminology "death tax." If it were a tax on death, someone who dies of cancer would pay a different tax than someone who died in an accident. The tax depends on the size of your estate, not how you died. It is paid by fewer than 1% of the richest estates. Furthermore this notion of double taxation is absurd. Funds are taxed when they change hands. That is what is happening here. Also 80% of the money in estates that pay any tax is investment income which has NEVER been taxed and will NEVER be taxed if the estate tax is repealed. Finally, if you say you call it the "death tax" because it is paid at one's death, I suppose you call the income tax the "April 15th tax."
Jeffrey Birnbaum: So there. Take that Mr. Death Tax killer.
Manchester, N.H.: It has been quiet up here since the primary passed. Do you think that this state will still be first in the nation next time or will the media beat that honor out of us?
Jeffrey Birnbaum: I do think that New Hampshire will keep its first in the nation primary status. There could be some regional primaries afterward, by then. But New Hampshire takes its responsibility seriously and I doubt that anyone will be able to knock it off its perch.
Woodbridge, Va.: Will hiring Rep. Baker to be their CEO help the Managed Funds Association? They were considered a non-player in last year's Blackstone/carried interest debate.
Jeffrey Birnbaum: Well, it couldn't hurt. With a former member of Congress at its helm at least it will know how to get into the game for a change.
Jeffrey Birnbaum: Thanks for writing in everyone. That was a lively, wide-ranging chat. Let's do it again in a couple week. Thanks and cheers!
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