(Cliff Owen)

To some degree, this is the difference between being a congressional opposition party and a presidential candidate. One role is about defense. The other is about offense. But as Romney found out yesterday, the way Republicans have played defense is going to make life very difficult for those Republicans who want to play offense.

Romney didn’t pass an individual mandate in Massachusetts because he was more liberal than most in the Republican Party. He passed an individual mandate because he was more effective than most in the Republican Party. Almost all the GOP health-care plans introduced during the 1990s and early-Aughts included an individual mandate. Newt Gingrich supported one, and so did Bob Dole and President George H.W. Bush. But Romney did a better job than they did. He actually managed to pass his plan. He played offense more effectively. This was seen, at the time, as a great credit to him. Conservative icon Jim DeMint praised Romney’s health-care plan repeatedly in 2008.

But now he’s stuck. The GOP has turned against the individual mandate, and so his past as the mandate’s most effective proponent is a liability. Rather than running on health-care reform, he has to run from it. But Romney isn’t alone. Cap-and-trade used to be a Republican idea, too. Tim Pawlenty, Newt Gingrich and Jon Huntsman all proposed cap-and-trade plans in recent years. And all of them now have to grovel, excuse and apologize. But what happens once that process finishes?

Running for president is about having solutions to national problems. But a number of the GOP’s most persuasive policy ideas have now been corrupted by Obama’s embrace, and the GOP hasn’t had the time to replace them. So they’re left with two problems: First, many of their most credible candidates will have to twist themselves into pretzels to disavow their past support for sensible policies. But second, and perhaps more importantly, when one of their candidates makes it through that gauntlet and has to begin playing offense against President Obama, he or she is not going to have much to work with. The party is stuck in the defensive mode of the last two years, and it’s not at all clear that they’ll be willing to give a candidate leeway to be offensive, because being offensive in a presidential campaign means speaking about what government can, and occasionally even should, do.

Five in the morning

1) Mitt Romney took to Powerpoint to explain how his universal health care plan is different from Obama’s, reports Karen Tumulty: “On Thursday, the former management consultant who is also a putative front-runner for the 2012 Republican presidential nomination turned to an old and reliable ally: the PowerPoint presentation. He was attempting to lay to rest criticism of the landmark health-care law he put into place as governor of Massachusetts, and to make a convincing case for how he would do things differently if he were elected president...The 2006 Massachusetts law made that state the first in the country to guarantee medical coverage to nearly every one of its citizens. It was also a model -- as critics of Romney on both the left and right rarely miss an opportunity to point out -- for the new federal law that has become Exhibit A in the conservatives’ case against President Obama.”

Conservatives were not gentle, notes Steve Benen. “The initial reviews from some on the right weren’t positive. Jonah Goldberg joked that Romney appeared to be auditioning for ‘David Axelrod’s job’; Peter Suderman said Romney made ‘a much better case for ObamaCare than against it’; and Jennifer Rubin said, ‘The only idea dumber than this speech was strapping the Irish setter to the top of the car.’”

Watch Romney’s speech: http://cs.pn/iDLWvo

Scroll down for a special section rounding up reactions to the speech.

2) Mitch McConnell wants a Medicare overhaul -- but no taxes -- as part of a debt limit package, reports Lori Montgomery: “The top Senate Republican sought Thursday to clarify his party’s stance on Medicare heading into high-stakes talks with the White House, telling President Obama he wants ‘significant’ changes to the program in exchange for lifting the legal limit on government borrowing. After the entire Senate Republican caucus met with Obama at the White House, Minority Leader Mitch McConnell (Ky.) said he would not insist on a controversial House GOP plan that would partly privatize the popular health program for the elderly. But with Medicare and Medicaid projected to be the major drivers of future borrowing, he said tighter eligibility requirements and reduced benefits must be part of any deal.”

Ever wonder why Republicans hate taxes so, so, so much? Here’s what you’ll hear if you ask some of them: http://wapo.st/kwDVyx

3) Some House conservatives aren’t taking the debt limit deadline seriously, report Naftali Bendavid and Janet Hook: “A growing number of House Republicans are expressing doubt about the need to raise the federal debt ceiling by Aug. 2, as the Treasury Department insists is necessary, sharply raising the political and economic stakes as congressional leaders try to secure a deal to raise the nation’s borrowing limit...Many conservatives, including some GOP freshman who campaigned in 2010 against raising the debt limit, say he is exaggerating the danger. They note that Mr. Geithner has already postponed the deadline once, and they insist the U.S. can find ways to shift its money around and cut some spending immediately to avoid cataclysmic consequences.”

4) Ben Bernanke is urging Congress to raise the debt limit, reports Brady Dennis: “Federal Reserve Chairman Ben S. Bernanke warned lawmakers Thursday that they are risking grave consequences by continuing their game of chicken over the nation’s legal limit on government borrowing. ‘I think using the debt limit as a bargaining chip is quite risky,’ Bernanke said at a Senate Banking Committee hearing, adding that failure to raise the limit in the coming days could cause a spike in interest rates and severe instability in the financial markets. Republican leaders have vowed not to raise the debt ceiling unless it is done along with significant cuts in federal spending. The national debt is set to reach its limit of $14.3 trillion early next week, although Treasury Secretary Timothy F. Geithner has said he could use certain “extraordinary measures” to keep paying the nation’s bills through Aug. 2.”

5) Regulators are set to hike car mileage standards, reports Peter Whoriskey: “Over the next few months, regulators are scheduled to set the next round of U.S. fuel economy standards for manufacturers. Among the proposals under consideration is one that would lift average fuel economy under the law to as much as 62 mpg by 2025. The preeminent issue in the debate is how much the price of cars -- gas, hybrids, plug-ins or whatever inventors come up with-- would rise if regulations dictate such standards. On one side are automakers, which warn that the highest targets could add as much as $10,000 to the price of a new car...On the other side are environmentalists, who dismiss the automakers’ cost estimates as bloated and argue that the costs of investing in fuel efficiency are tiny compared with the effects of global warming and dependence on foreign oil.”

Americans abroad interlude: The Hold Steady play “Constructive Summer” in Cologne.

Got tips, additions, or comments? E-mail me.

Still to come: A special section rounding up reactions to Romney’s speech; Biden’s negotiations are headed toward a “down payment” for debt reduction; some House freshmen are eating their words on Medicare cuts; the IRS wants to tax big political contributions; oil executives faced a grilling in the Senate; and a corgi sleeps in a bucket.

Romney’s speech

Mitt Romney is in a real pickle. My take: “Poor Mitt Romney. For all the flak he gets as multiple-choice Mitt, he can’t quite bring himself to disown what he knows to be good policy. His big health-care speech today featured as thoroughgoing a defense of the individual mandate as I’ve heard in months. The White House would’ve been wise to take notes. But what’s Romney to do? He thinks the mandate makes sense as a way to deal with free riders. Saying otherwise, he told the Michigan crowd, might help him in the Republican primary, but it ‘wouldn’t be honest.’ But ending on that note wouldn’t be wise. So Romney is also saying that it’s un-American for the federal government to pass and impose an individual mandate. A violation of the 10th Amendment, don’cha know. His problem, of course, is that he didn’t mention the 10th Amendment when he, like so many other Republicans, was praising, passing and selling both state-based and national individual mandates in the 1990s and early-aughts. So how exactly is he going to sum this up for the Republican primary? ‘The individual mandate is great policy, but as president, I pledge to oppose it’? ‘I believe in states’ rights first and a functional health-insurance market second’?”

Mitt Romney is having a lively debate with himself on health care, writes Dana Milbank: “From China this week came the rare news that twin girls had been born with a single body and two heads. Here in America, though, we have an even more unusual case: Two people conjoined in the body of a 64-year-old man. His name is Mitt Romney. One head of Romney defends his health-care reform in Massachusetts, the model for President Obama’s version, which also uses an ‘individual mandate’ to force people to buy health insurance — an idea that enrages conservatives. The other head of Romney denounces Obama’s health-care reform as a ‘power grab,’ a ‘government takeover of health care’ and an ‘economic nightmare.’”

Romney can’t hide behind federalism, writes Phillip Klein: “The broadest argument Romney employed is the federalism one, that his was a state-based approach, and ObamaCare is a one-sized fits all Washington solution. As I’ve noted before, this is flawed for several reasons, one being that 20 percent of the cost of the Massachusetts plan is paid by federal taxpayers due to the Medicaid expansion. But beyond that, we judge candidates based on what they actually did when they were in office, and Romney supported all the key principles of ObamaCare in the law he signed...While constitutional differences exist between what’s done at the federal level and state level, in both cases it means the government is violating personal liberty by compelling the purchase of something. Romney’ federalism dodge doesn’t get him away from this. And his forceful defense of the mandate, complete with a slide (7) touting the mandate with his campaign logo and slogan on it, isn’t likely to endear him to conservative primary voters.”

Mitt Romney’s great sin is being a technocratic problem solver, writes Jon Cohn: “That Romney would cite “Value-Based Insurance Design” as an example of how to reform health insurance speaks to his intellectual sophistication and managerial skill. It’s a trait that runs through his career in the private and public sectors, where he frequently demonstrated an ability to grasp a problem, analyze it, and come up with a solution. Unfortunately, that citation also speaks to Romney’s essential political dilemma. If you read the Affordable Care Act and turn to section 2713(c), you’ll find a provision calling upon Medicare to experiment with—wait for it—VBID. And if you paid attention to President Obama’s deficit reduction proposal a few weeks ago, you may recall that Obama proposed letting the agency in charge of Medicare introduce VBID more quickly. Does this make Romney a closet socialist? Hardly. Does it mean he wants to give government the power to ration? Please...No, his mention of VBID simply means he’s a problem-solver with moderately conservative values and an open mind about policy. But try telling that to the Republican base, which has decided that anything that looks remotely like Obamacare is evil.”

Mitt Romney’s great sin is being a technocratic problem solver, writes Jennifer Rubin: “The Wall Street Journal editorial board accused Mitt Romney of being a technocrat and not a conservative. In his speech in Ann Arbor, Mich., today, Romney proved the editorial board correct...Romney proudly defended his plan and the individual mandate that is now the object of the entire Republican Party’s ire. His explanation — mandates were designed to stop the free-rider problem — is exactly the justification for the same feature in ObamaCare. The mandate, conservatives believe, is an infringement on individual freedom.

Romney preferred to take the beating now rather than later, writes Greg Sargent: “After watching Mitt Romney’s painful speech on health care — in which he strongly defended Romneycare’s individual mandate while denouncing Obamacare as tyranny — I think I’ve got his game plan figured out. Romney knows he’s going to take a massive beating on health reform, so he has decided to get it out of the way now, in hopes it fades as an issue by the time the 2012 GOP primary gets going in earnest.”


Biden’s negotiations are leaning toward a debt “down payment”, report Carrie Budoff Brown and Julie Mason: “The White House and lawmakers are negotiating a budget package that would serve as a ‘significant down payment’ toward cutting the deficit by $4 trillion over the next decade, Vice President Joe Biden said Thursday. The remarks suggest the bipartisan group is working on a more limited plan than the comprehensive package offered in December by the White House fiscal commission. The Biden-led talks may not aim at solving all of the country’s budget challenges in time for a crucial summer vote to raise the debt limit. Instead, they could act as an initial step toward bigger deficit-cutting goals...If Republicans want Democrats to consider changes to Medicare, then Democrats will insist that Republicans look at taxes, Biden said.”

John Boehner doesn’t want to get specific on cuts, reports Jake Sherman: “What does Speaker John Boehner want out of the debt ceiling vote? It’s now unclear, as Boehner is avoiding any specifics, dodging questions three days after calling for ‘trillions’ in cuts. Here’s a snapshot: In a Thursday briefing with the Capitol Hill press corps, Boehner said he didn’t ‘want to tie myself down’ on budget process reforms, refused to ‘lock myself into’ a time frame for the trillions of dollars in savings he’s seeking. He declined to respond to whether tax increases and offsetting the debt limit hike are completely non-negotiable bargaining positions. To be sure, Boehner went to New York on Monday to tell Wall Street -- and online viewers -- that he wanted to essentially offset an increase in borrowing capability with cuts of a greater magnitude.”

The revolving door at the SEC is twirling pretty fast, reports David Hilzenrath: “From Capitol Hill to academia and the SEC inspector general’s office, observers of the agency have voiced concern that the revolving door can make the SEC a more docile protector of the public interest. A study to be released Friday by the Project on Government Oversight (POGO), based on hundreds of SEC documents obtained through the Freedom of Information Act, sheds new light on the relationship between the regulators and the regulated. Over the past five years, 219 former SEC employees filed disclosures with the SEC saying that they planned to represent clients or employers in dealings with the agency, POGO found. Many of those former SEC employees were appearing before the agency on multiple matters; altogether, they filed almost 800 disclosure statements, the private watchdog group reported.”

The US Attorney for Manhattan is cracking down on financial crime, reports Jerry Markon: “The Justice Department official credited with bringing down hedge fund billionaire Raj Rajaratnam is a wisecracking, self-effacing, Bruce Springsteen-loving prosecutor who is deadly serious about what he views as rampant insider trading on Wall Street. Preet Bharara, the U.S. attorney in Manhattan, has been hailed by some in the financial media as the ‘sheriff of Wall Street.’ His office has ramped up white-collar enforcement, charging nearly 50 people in an insider trading crackdown that led to Wednesday’s conviction of Rajaratnam, founder of the Galleon hedge fund, on 14 counts of fraud and conspiracy. Yet some who know Bharara, while crediting him with aggressive enforcement, say he is following the tradition of an office known for policing Wall Street.”

Battling cap proposals are just causing more gridlock, writes David Brooks: “Republicans and a few moderate Democrats are rallying behind a spending cap plan, co-sponsored in the Senate by the Republican Bob Corker and the Democrat Claire McCaskill. In its simplest form, the bill would cap federal spending at 20.6 percent of gross domestic product, the recent historic average. If spending rose above that, automatic cuts would ensue. Democrats like Harry Reid, the Senate majority leader, support a deficit cap plan. If deficits got bigger than, say, 3 percent of G.D.P., then a mixture of spending cuts and tax increases would ensue. Liberal Democrats hate the spending cap. As the population ages, it would force future Congresses to transform Medicare. Conservative Republicans hate the deficit cap. It would force big tax increases.”

Goldman Sachs deserves a criminal trial, writes Matt Taibbi: “They weren’t murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it. Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is.”

Everything -- including a tax overhaul -- should be on the table for debt reduction, writes Frank Wolf: “Americans for Tax Reform, led by Grover Norquist, has engaged in bullying tactics designed specifically to stop Coburn’s call for eliminating the ethanol subsidy. The tax code will never be overhauled if any attempt to eliminate a tax expenditure -- spending through the tax code -- is equated with a tax increase. Look, too, at the $14.2 billion in profits posted by General Electric, of which $5.1 billion came from operations within the United States. Not only did GE pay no federal taxes, it also claimed a tax benefit of $3.2 billion, initially designed as short-term tax breaks to spur economic growth. Once a tax cut is enacted, it is nearly impossible to eliminate (see the ethanol subsidy). If these are not examples of why everything must be included in our budget discussions, I don’t know what is.”

Corgis are excellent interlude: A corgi falls asleep in a bucket.

Health Care

Many House freshman backing Ryan ran against Medicare cuts last fall, reports Marin Cogan: “]Rep. Adam] Kinzinger sang a different tune: He criticized the Democratic health care overhaul, saying it would amount to $500 billion in cuts over 10 years, removing 4 million patients from Medicare and putting 15 million on Medicaid, according to local news reports. But now Republican freshmen have to defend their own votes on Medicare and say they’re hoping to use their outsider status to change the tone in Washington. Their struggles on this issue are the latest sign of how the ambitious freshman class is adjusting to the realities of governing. Among the 41 Republican freshmen who signed a letter to the president calling for him to stop the ‘Mediscare’ tactics, several benefited from Medicare attacks against the Democratic incumbents they beat last year.”

A no-new-taxes pledge is a death trap for seniors, writes Paul Krugman: “Over the long term, health care spending has consistently grown faster than the economy, raising the costs of Medicare and Medicaid as a share of G.D.P. Cost-control measures -- the very kind of measures Republicans demonized last year, with their cries of death panels -- can help slow the rise, but few experts believe that we can avoid some ‘excess cost growth’ over the next decade. Between an aging population and rising health costs, then, preserving anything like the programs for seniors we now have will require a significant increase in spending on these programs as a percentage of G.D.P. And unless we offset that rise with drastic cuts in defense spending -- which Republicans, needless to say, oppose -- this means a substantial rise in overall spending, which we can afford only if taxes rise.”

Domestic Policy

Big political donors could have to pay gift taxes, reports Stephanie Strom: “Big donors like David H. Koch and George Soros could owe taxes on their millions of dollars in contributions to nonprofit advocacy groups that are playing an increasing role in American politics. Invoking a provision that had rarely, if ever, been enforced, the Internal Revenue Service said it had sent letters to five donors, who were not identified, informing them that their contributions may be subject to gift taxes depending on whether the donations exceeded limits under the tax laws. These advocacy groups have been drawing more scrutiny, from President Obama as well as others, as they have proliferated and funneled vast sums of money in support of campaigns and causes, without having to publicly disclose their donors.”

Ron Wyden wants to keep the tax man’s hands off the Internet, reports Jennifer Martinez: “State and local government officials have been scouring for ways to pump money into underfunded public coffers, and many are starting to look at taxing Internet commerce with dollar signs in their eyes. But Sen. Ron Wyden (D-Ore.) told POLITICO he wants to ensure local jurisdictions don’t turn to taxing digital goods and services -- such as smartphone applications or iTunes songs -- as a way to ‘make a quick buck.’ With Sen. John Thune (R-S.D.), Wyden plans to introduce a bill Thursday called the Digital Goods and Services Tax Fairness Act of 2011, which would prevent state and local governments from imposing ‘multiple and discriminatory’ taxes on the sale of services and products delivered through the Web.”

Nancy Pelosi backs Obama’s new corporate disclosure rule, reports Felicia Sonmez: “House Minority Leader Nancy Pelosi (D-Calif.) said Thursday that she supports the Obama administration’s proposal to require companies bidding for federal contracts to reveal their political donations...She noted that last year she supported the House-passed DISCLOSE Act, which would have restricted corporate spending on elections...The executive order being drafted by the White House would enact similar restrictions on donors, although, as Pelosi noted Thursday, it ‘only narrow(s) it to those who have contracts with the government.’ Pelosi’s statement puts her at odds with the number-two House Democrat, Minority Whip Steny Hoyer (D-Md.), who earlier this week told reporters that he opposes the administration’s draft executive order.”

Obama should use his executive powers to reform immigration, writes Roger Simon: “Right now, U.S. Immigration and Customs Enforcement can cut some slack to illegal immigrants through a policy called ‘deferred action.’...Let’s say you are fighting in Afghanistan and your spouse gets picked up in a raid and is found to have entered the United States illegally years ago. Should we really deport her? While you are fighting for America? ICE has the discretion to leave illegal immigrants in the United States on a year-to-year basis...Under Morrison’s plan, when you change jobs, you would get checked by a new electronic system to see whether you are in the U.S. legally. If you just arrived in the U.S. illegally, you would get sent back. If you are here illegally but have a work history, you would get to stay until Congress decides what to do with you.”

The federal suit against Arizona’s immigration law doesn’t hold up, writes Larry Dever: “The administration’s suit makes several claims. For one, it argues that only the federal government has jurisdiction over immigration. But that’s a strange argument, given that federal agencies regularly work with state and local governments on cross-border crimes. Senior officials at the Departments of Justice and Homeland Security have also argued that state and local law enforcement officers are able to make arrests only for criminal, rather than civil, violations of immigration law. Criminal violations include aiding illegal immigration or re-entering the country after deportation; civil violations include overstaying a visa or simply being here illegally. But this places an absurd burden on my deputies and me.”

Community interlude: A montage of Donald Glover crying.


Senate Dems grilled oil execs yesterday, reports Steven Mufson: “With the price of regular gasoline just shy of $4 a gallon nationwide, the Senate Finance Committee grilled senior executives of the five biggest oil companies Thursday about whether they really need tax incentives that some Democrats on the panel said the nation can no longer afford. Citing the importance of closing the yawning federal budget deficit, Chairman Max Baucus (D-Mont.) said, ‘This is going to be incredibly difficult.’ He added, ‘Everyone’s going to have to give in a little bit.’ But the oil executives denounced efforts to eliminate tax benefits for the petroleum industry, saying that if Congress wants to boost revenue and lower gasoline prices, it should open up more federal land and waters for exploration to generate more production, taxes and royalty payments.”

John Huntsman is walking back his support for cap and trade, reports Darren Samuelsohn: “Jon Huntsman is backing away from his support for a cap-and-trade system for Western states that he once championed as Utah governor. ‘It hasn’t worked,’ the potential GOP presidential candidate told Time Magazine in his first extended interview since leaving his post as U.S. ambassador to China. ‘And our economy’s in a different place than five years ago.’ Until the economy recovers, Huntsman added, ‘this isn’t the moment’ to implement it. While in Salt Lake City, Huntsman took plenty of heat from Utah GOP lawmakers when he partnered with seven other Western states and four Canadian providences to form the Western Climate Initiative, which calls for a 15 percent greenhouse gas emissions reduction from 2005 levels by 2020.”

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.