Post Politics Hour: Earmarks, the Economy and More

Acknowledging it's an 'imperfect' bill, President Barack Obama said he will accept a $410 billion spending package but insisted it must signal an 'end to the old way of doing business.' Video by AP
Paul Kane
Washington Post Congressional Reporter
Thursday, March 12, 2009; 11:00 AM

Don't want to miss out on the latest in politics? Start each day with The Post Politics Hour. Join in each weekday morning at 11 a.m. as a member of The Washington Post's team of White House and Congressional reporters answers questions about the latest buzz in Washington and The Post's coverage of political news.

Washington Post congressional reporter Paul Kane, was online Thursday, March 12, at 11 a.m. ET to discuss final approval of the $410 billion spending bill and President Obama's decision to sign it plus all the rest of the latest news from Capitol Hill to the White House.

A transcript follows.

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Archive: Post Politics Hour discussion transcripts


Paul Kane: Good morning, folks, sorry, fell a couple minutes behind schedule, I'll make up for it on the back-end of this chat. Things have slowed down in terms of the public, legislative calendar here on the Hill. The Senate is considering some nominations, the House taking up some noncontroversial legislative items.

But the hearings are heating up, Secretary Geithner is before the Senate Budget Committee, and reform-minded lawmakers are not happy with yesterday's earmark announcements from Obama and Democratic leaders.

Meanwhile, Tiger Woods is back on the PGA Tour, I played a little golf myself last weekend, so all must be right with the world again. On to your questions. --pk


New York, N.Y. : Is there going to be a congressional bailout for Madoff's fleeced investors? Is there a precedent for this, aside from the 9/11 fund? How about all the suppliers who will go belly up if and when GM and Chrysler go out of business, or the millions who have lost their investments and retirement funds because the banks and the entities who give ratings to financial instruments, to be polite, dropped the ball? (putting aside the issue of criminality). Aside from the prominence of Madoff's victims, is there any rational basis for protecting this mostly well-heeled group and ignoring the millions more middle class victims of the financial bubble who are not prominent, and who weren't rich enough to invest with Madoff?

Paul Kane: Legally speaking, there's no precedent for bailing out folks like the Madoff investors, not that I know of, nor one that CNN legal analyst Jeffrey Toobin is aware of; I was just watching Toobin break down the legal aspects of this on TV, and he said those investors are just outta luck. Fraud cases like this, they recover what they can recover, and in this case there is about $900 million, plus his Manhattan condo (valued at $7m, I hear). So, considering they lost roughly $50 billion, best they can hope for is pennies on the dollar.


Florissant Valley, Mo.: Paul, can I weigh in on this new amendment to make all "replacing a senator" elections popular? Has anyone done a study of the caliber of appointed replacements versus elected ones? Mel Carnahan's wife, Hubert Humphrey's wife and other appointed folks down the years suggest that when the pols get together and pick, the result isn't all that much worse than leaving it to the so-called voice of the people. Remember Churchill's comment: "The best argument against democracy is a five-minute chat with an average voter." Are we any more enlightened today than when he made the comment? I doubt it. Thanks

Paul Kane: Well, I don't think there has been any study on the senatorial effectiveness of appointees as legislators. Politically speaking, handicappers like Stu Rothenberg and Charlie Cook have done studies on the re-election rates of appointees and found that they're just as likely to loose in their first bid before the voters as they are to win. So the idea of getting a leg up as an appointed incumbent is oftentimes not helpful politically speaking. Mrs. Carnahan lost 2 years after being appointed to fill her late husband's slot (Mel Carnahan, 2 weeks after dying in a plane crash, still beat GOP Sen. John Ashcroft). Yet in '06, Bob Menendez cruised to victory for a full 6-year term after he was appointed 10 months earlier by Gov. Jon Corzine, who'd left the Senate to take over Drumthwacket. (That's New Jersey's governor's mansion, I just love saying that name every chance I get. What a weird name.)


Seattle, Wash.: Who is less effective at pushing his agenda now? GOP Chair Michael Steele or Pres. Obama?

Paul Kane: Um, seriously?

I know Obama's having some road-bump issues right now, but the guy in his first 50 days passed a $787 billion stimulus bill, signed into law 2 measures that had been stalled by the previous president (SCHIP and Lily Ledbetter), reversed a 6-year course in Iraq to widespread praise, reversed course on stem cell research funding and cleared the decks of last year's annual spending bills by signing into law an 8% increase in funding for domestic agencies that Democrats have said went starved under the previous administration.

Look, it's been ugly at times for Obama, but he's wracking up the wins.


Raleigh, N.C.: Isn't media coverage of earmarks incomplete? First, no one bothers to explain the need for federal agencies to have actual budgets, rather than operating on successive continuing resolutions. Secondly, it's so easy to demonize "earmarks" when the truth is these are the bases for congressional reelection. Without fighting and getting projects for one's district, why should the member be elected or reelected? I'm tired of commentators throwing around terms like "pork" and "earmarks," as well as politicians acting horrified.

Paul Kane: These are all worthy points, but it's worth noting that the republic also lasted 200 years without earmarks making up much of the legislative talk. In the early '90s there were only about 500 earmarks, now there are more than 14,000 (down a few thousand from their hey-day in the middle of this decade).

So, if earmarks are so important and so valid, how did the republic survive without them and still win the Cold War, defeat the Facists, and become the world's leading economic engine?

I think there's a pretty good argument that we could go on an earmark diet. Obama blinked at the opposition of congressional leadership. It's that simple.


New York City: Just curious, Paul -- has anyone out there taken Bush's plan from 2005 to privatize social security and gamed it out using the current economic climate to see what would have happened? Or is it just conventional wisdom that certain people would be hanging from lamp posts by now as the revolution was in full swing?

Paul Kane: PK Rules of Life, No. 1: Never ask a question that you really don't want to know the answer to, lest you find out how bad things could be.


Richmond, Va.: Thank you for taking our questions.

While I am supportive of the stimulus that bolsters banks to prevent a giant financial "black hole" from sucking everything into it if there is a complete collapse, I am becoming more and more turned off by the rampant spending. Everything from the Omnibus Bill, earmarks, to bailing out mortgages, to giving the auto industry billions when it may not do a lick of good, etc...., has me INCREASINGLY concerned. I know those making $250,000 plus are going to pay for all this, but there is hardly an unlimited supply of those folks and there is no evidence their numbers are increasing. In fact, I suspect one could start to make the case those in the $250k plus category are decreasing....anyway....Do you see a growing backlash with all this spending? Or am I just a cheap American this morning who needs to lighten up ?

Paul Kane: Gee, you know something, you raise a good point. The Obama budget plan is based on the idea that, in large part, those making more than $250,000 will get hit with higher taxes/fees, etc.

Well, there must be a lot fewer of those people now than there were 2 years ago when this economic plan was hatched. Forbes is reporting that the number of billionaires went from something like 1,100-plus, world wide, to fewer than 800.

FYI: Bill Gates reclaimed his spot as the world's richest man, as his pal -- and Wash Post board member -- Warren Buffet lost a ton in the market.


Burke, Va.: The Hill is reporting that President Obama made two more appointments that required waivers from ethics rules concerning lobbyists: Obama grants two more lobbyists waivers (The Hill, March 10)

How many waivers have been granted by the Obama administration to date? Can reporters or members of the public view these waiver documents? These waivers were granted under a "public interest" exemption of the executive order on ethics; what other types of exemptions are allowed?

Paul Kane: well, I don't know about where we can see the waivers, but the final line in this story spells out there was just 1 other waiver:

"Obama has made about 800 appointments to the executive branch so far. The only other waiver was granted to Bill Lynn, a Defense Department appointee who worked as a lobbyist for Raytheon, the defense contractor."


Arlington, Va.: What's the status of the ethics investigation of Rep. Rangel? Is there a time limit on these things?

Paul Kane: No time limit on these investigations. Some can drag on for years, the way the Packwood investigation did with Senate ethics in the '90s. Others move incredibly quick, the way the House ethics investigation into the handling of the Mark Foley IM/text messaging with teenage pages moved to completion in just 2 months.

With Rangel, it could be a while, because the initial portion of the investigation was based around stories in the Post about his fundraising from his congressional office for a university wing named after him, and also his cut-rate rent deals in a Harlem apartment building. But with each new revelation, Rangel has asked for everything to be considered, this has added many layers to it.


Alexandria. Va.: Paul, on the issue of earmarks: do you have the sense that the public is especially concerned about earmarks, or even has a solid understanding of what an "earmark" is?

Once I heard that they amount to something like 2 percent of the budget, I know I have been sort of bewildered at the fuss some are making about them, especially since many of the projects cited do seem like basically reasonable ones. I'm thinking, "you're throwing a hissy fit about -- the way in which mostly worthy projects that make up a miniscule percent of the budget are appropriated --?" It makes folks like McCain seem like cranks more than serious leaders in times like these...just one take.

Paul Kane: This is the take that most lawmakers take, for sure. Especially Capitol Hill's earmarkers-in-chief, the congressional leadership: Nancy Pelosi, Steny Hoyer, Harry Reid, Dick Durbin, Mitch McConnell. All of them used their perches on the appropriations committees as step-ladders to the leadership.

This issue has only gained traction in recent years because of the series of corruption probes that have resulted in more than 20 people -- 2 members of congress, more than 10 former staff, a couple administration officials, a few lobbyists, a defense contractor -- in federal prison. All of them used the earmark system as their 'gateway drug', to use McCain's phrase, into their schemes. Those were Republican scandals, and now a Dem scandal is brewing with investigations into the PMA Group lobbying firm and its connections to senior House Dems.

This got cut from my story in today's paper, but Henry Waxman -- a hero to the left -- said he was continuing his personal prohibition against earmarks because they are so corrupting. He told me that the people entering his office seeking earmarks went through the roof earlier this decade, and he saw one reason: lobbyists, who were ginning up the requests to begin with.

"Every one of them had a lobbyist with them on retainer, who probably sold them on it in the first place," Waxman said.


Ben Israeli: Hey Paul Top of the morning to ya!

I read the other day that there were some factions within the Republican Party that wanted to have Michael Steele removed from his position as head of the RNC chair. After his interview came out yesterday in GQ where he said abortion should be an individual choice and another embarrassing apology about it this morning do you think it's game over man for Michael Steele. The Reconstructionist (GQ Magazine)

Paul Kane: I haven't closely followed Steele's perils at the RNC, but The Fix has been all over it. I don't know if he's toast or not, but that does seem like a drastic step.

Steele Steps In It (Again) (The Fix, March 12)

Trent Lott, the greatest vote counter in the history of Congress, used to say, "You gotta HAVE the vote to HAVE the votes." Until such a vote is held, who knows. And the corollary to Lott's theory is, You gotta have SOMEONE to beat SOMEONE. Absent a real challenge to Steele from someone else, how can he be voted out?


re: Waivers: Not sure what the Hill is counting as waivers, but Politico reports that Obama has made more than a dozen "exceptions" to his lobbyists rules Politico

Paul Kane: Again, I'm not keeping tabs on all of this, but feel free to link to the Politico count on the waivers as well.


Montgomery Village, Md.: Paul -- So has Burris weathered the storm and will he be staying until 2010? Has he pulled a "Vitter"? Not much chatter about Burris, it seems.

Paul Kane: Yep. It's hard to see how Burris would leave office now before the end of 2010. The Senate ethics committee is conducting its own inquiry, but those usually take a long, long time to complete. Even if they find that Burris lied under oath in Illinois to the legislative committee, it's unclear they would move to force him out of office. This time a year from now he might already have lost the Democratic primary, at which point the mood to force him out would be nil. Plus, the precedent is not strong for removing him for something along those lines.


To Richmond: For the 139th time -- people making over $250k are NOT getting their taxes raised this year. That only happens in 2011, two YEARS from now, when the recession will have passed.

Plus, not for nothing -- it's only in Obama's PROPOSED budget, which hasn't actually passed yet.

Paul Kane: Yeah, ok, it's in 2011, but the taxes being raised on those folks are supposed to finance a lot of things. And let's hope the recession is over then, let's hope we've moved toward real economic growth.


Reading, Pa.: Paul: How vulnerable is Arlen Specter especially as Pennsylvania seems to be shifting blue? Is there a chance that since Specter is somewhat chummy with President Obama (Super Bowl party invite, breaking ranks on stimulus bill, etc.) that the Dems will take it easy on Arlen when reelection time rolls around?

Paul Kane: Oh no, not at all. Of incumbents, Specter has the biggest bulls-eye on his back for Democrats. They intend to go after his seat in strong manner. Joe Torsella, a close friend of Gov. Rendell's, is currently in the race for Dems, but doesn't have much name recognition. Some of the House members -- Murphy, Sestak, Schwartz -- are considering the race as well.

Another name to watch: state Rep. Josh Shapiro. He's the deputy speaker of the state House and, full disclosure, grew up about a mile from me in Upper Dublin Township outside Philly, although I never met him until he worked down here on Capitol Hill.

The real hunger for Dems in the Specter race is fueled by the fact that former US Rep. Pat Toomey is again challenging Specter in the GOP primary. Roll Call did an analysis of the PA vote yesterday and found that the GOP has lost many registered voters in Specter's base of southeast PA, making him even more vulnerable to a GOP primary challenge.

Dems believe that, if Toomey won the primary, they could more easily defeat him in the general election. If Specter gets through the primary, he's still the favorite.


Fair Lawn, NJ : I've read the Sen. Dodd is rather unpopular because of a mortgage that he got which might or might not have been a sweetheart deal, and because he was head of the Banking Committee during the bailout. But what about Chuck Schumer? Has there been a better cheerleader for deregulation of the financial services industries that have all but brought down the country's economic system? Do you see any plausible competition emerging against this extremely well-financed candidate, in either party?

Paul Kane: After 30 years or so in Congress, Dodd has somehow become best known in Connecticut for 3 things: 1) he ran a terrible presidential campaign that included him moving his family physically to Iowa; 2) he was a "Friend of Angelo", getting a VIP mortgage from Countrywide, the mortgage company that led the way in the subprime market and helped trigger this financial crisis; and 3) he co-authored the $700 billion bailout program last fall known as TARP.

That's a tough run for Dodd. I think the TARP issue is his biggest problem, the mortgage simply being a way to bring up TARP. But he's a tough pol and it's a long ways till election day. He's steeling himself for battle, he at least knows he's got to make amends, he won't get caught off-guard, the way Georg Allen did in '06 and Elizabeth Dole did in '08.


New York, N.Y.: Gotta face facts here: Obama indicated throughout his campaign that in order to fund things like health care, the very wealthiest Americans might have to pay slightly more in taxes, via the expiration of President Bush's tax cuts for those earners in 2011 (as Richmond so wisely reminds us). Under this plan, the wealthiest 2 percent of Americans would be subject to the same income tax rate they paid in the 1990s -- when, it should be remembered, the rich got richer and the economy did quite well. Isn't it a bit odd to see all this angst -- especially from reporters -- over the idea that Barack Obama's plans to do something he said he would do AND something the American public supported and voted for en masse?

Paul Kane: Correction: Obama campaigned on a pledge to end the Bush tax cuts on the wealthiest as soon as he entered office. Pelosi wanted him to live up to this pledge and include the higher taxes in the first budget, but he backed down for fear of raising taxes during a recession.

I've no angst over him living up to his plan. I've got angst about the entire economy. None of his campaign assumptions were built on the current (lack of) foundation in the economy. I've got angst over the fact that no one seems to know what to do next.

I'd be saying the same things if McCain's folks were in charge.


Indianapolis, Ind.: Got your tickets for opening night at the Bank?

Paul Kane: Nope, can't make it up to Philly for the debut of the defending world champion Phillies. However, I've got my tix for their first appearance here in DC, April 13, the Monday after Easter. It's an afternoon game here at Nats Park. Should be a great time and a nice distraction from the heated legislative battles that will come a week later, when Congress returns from a 2-week recess in April. by the end of that month the budget fight will likely be fully engaged.


Care to re-phrase, Paul?: You wrote: "PK Rules of Life, No. 1: Never ask a question that you really don't want to know the answer to, lest you find out how bad things could be."

Not so sure that's a great rule of thumb for a news reporter.....?

Paul Kane: Dude, these are my own personal rules of life that I live by day to day. Not with my professional career. All I ever do is ask questions to people who answer things that they NEVER should answer.

As much as we think in our cynical worlds that all politicians are liars, many of them really don't like lying and tell you stuff that they shouldn't. One lawmaker I know has this funny habit, when I ask him a tough, leading question, he doesn't lie, he doesn't dodge the issue. He just kinda smiles and looks down. It's his way of saying, Yeah, you're right but I'm not going to answer you.


Flo Valley, Mo.: Remind me. Did Chris Matthews pass on the PA race? Thanks

Paul Kane: Oh yes, Matthews bailed on the race and re-upped with MSNBC. Thank god, I couldn't stand a race with that much hot air blasting about, Matthews v. Specter. (Disclosure: his nephew Jim was my high school class president, great guy.)


Pennsylvanian: Who's your pick for the next permanent music director of the Philadelphia Orchestra, which is currently in turmoil? Link: Notes of Distress and Discord From the Esteemed Philadelphia Orchestra (Post, March 11)

Paul Kane: Is this a joke? Am I on Candid Camera?

You meant to ask who the Eagles were gonna take 1st in the NFL draft, right?

I've never been to the Philly Orchestra. Glad it's there, we need the culture. Just not for me.


Salinas, Calif.: Paul, Re: earmarks. "Obama blinked at the opposition of congressional leadership. It's that simple." Could it be more a matter of getting the stimulus passed and on its way to the electorate and leaving earmark reform for future battles? I don't see it quite as simple as just backing down to congressional pork meisters.

Paul Kane: The part about blinking was not meant to refer to signing the stimulus legislation. That, he had to do, but it was in his supposed reform proposal that Obama blinked. Robert Gibbs two weeks ago vowed to change "the rules of the road going forward". In reality, Obama's proposal does not do a single thing to curb the number of earmarks, nor does it do anything to address the connection of campaign contributions to earmarks.

Both of those are the concerns that Obama raises, yet his proposal doesn't do anything to address this. No, it won't shave the federal deficit to curb earmarks, but it might break the ways and tone of Washington.

Which was the central plank of his campaign platform.

On that score, Obama backed down from a fight yesterday. It's that simple.


Paul Kane: Alright folks, the Harry Reid-Durbin-Schumer-Patty Murray press conference starts in 10 minutes. I gotta run to that now. Thanks for all the questions, and I'll see you later this month.


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