Tuesday, December 09, 2003

DEAN CASH MACHINE: Ex-Gov. Howard Dean (D-Vt.) tapped into his massive grassroots Internet campaign to raise more than $50,000 for Rep. Leonard Boswell (D-Iowa) this week. On a phone call Thursday with reporters, Dean campaign manager Joe Trippi said Dean will consider raising money for other lawmakers: "It's hard to find members of Congress who don't want money raised for them." Trippi said he doesn't know who is next on the list for Dean's largess, but indicated that there is a large number of interested candidates. The earliest Dean could show his ability to make a difference with his money is in January, when voters in Kentucky's sixth congressional district will hold a special election to succeed GOP Rep. Ernie Fletcher, the governor-elect.

BOXER REBELLION: Former California Secretary of State Bill Jones has filed election papers to challenge two-term Democratic Sen. Barbara Boxer next year. Republican politicians and pollsters view Jones -- the last Republican to hold statewide office until Gov. Arnold Schwarzenegger (R) took over last month -- as the party's best hope to unseat Boxer. The Fresno Republican spent the past several weeks soliciting White House support. That may be a tough challenge: Jones supported Arizona Sen. John McCain over President Bush in the 2000 GOP primary.

MIXED NUMBERS: When the campaign season began in earnest, the Democratic presidential candidates collectively made what appears to be a strategic mistake: They predicted that President Bush will be more vulnerable on the economy and less vulnerable on Iraq. That gamble seems to have backfired. While the administration's expectations in Iraq have fallen, the economy appears to be humming along. Consumer demand remains high; quarterly GDP rates are expected to continue rising; and the Dow Jones and Nasdaq are flirting with 10,000 and 2,000, respectively. All that's missing are the jobs. Despite modest recent gains, Bush remains open to sustained attacks on unemployment.

But now two of the most potent job-creation areas - the manufacturing and industrial sectors - are poised for strong recoveries. Despite gains in services and retail, these widget-churning sectors have been the slowest to respond so far. But thanks to continued strong consumer spending and considerable manufacturing downsizing during the slowdown, inventories are shockingly low. Since September, factories have been churning out more and more goods to restock those bare shelves, and American workers are being pushed to the breaking point: Wednesday saw a remarkable four-week 9.2 percent productivity rate. This pace can't hold, and come 2004, financial analysts expect some serious expansion.

But this isn't necessary good news for Team Bush. In the short run, the Democrats' key argument against Bush's economic stewardship will still likely hold true: Unemployment is rising. What's more, the stronger the economy rebounds, the higher it will likely rise. That's because as firms expand and the good times loom, more and more Americans who gave up on finding a job over the last three years will decide to look again. But since many of them won't find jobs immediately, the unemployment rate will still continue to rise - never mind the new hiring.

Bush has until mid-summer to show that that jobless number climbs down. As political analyst Charlie Cook notes, one of the best determinants for whether an incumbent president is reelected is the state of the economy in the second-quarter of an election year as measured by GDP, change in real disposable income and unemployment. And of those, it's that last two that are particularly important - a bad GDP hurts, but a good one generally fails to resonate with voters personally. Thanks to low interest-rates, tax cuts, a heavy-dose of Keynesian spending and the economic improvements those have spurred, Bush will be inured on the disposable-income front. But with enough noise from Democrats on rising unemployment numbers, the carping may be enough to sow doubts among swing-voters.

MASS EXODUS: Even though it's only been two weeks since the Medicare reform bill passed, some of the key players in the negotiations have already resigned. Centers for Medicare and Medicaid Services chief Tom Scully and one of his aides, Tom Grissom, have quit. Colin Ruskey, a top Senate Finance Committee health aide, joined the firm Alston & Bird this week - where former Senate Majority Leader Bob Dole (R-Kan.) hangs his hat. Expect more key figures to follow suit in the next several weeks. Lobbying firms will monitor the implementation of the bill closely and pay a high price for administration and congressional representatives who helped craft the landmark legislation.

FRIENDS AGAIN: Expect Democrats and the AARP to get over their differences over the prescription drug benefit in an attempt to reduce the cost of prescription drugs next year. But a GOP-led Congress, the pharmaceutical industry's lobbying machine and savings for seniors through a prescription drug discount card will doom the effort.

LOTT'S RULES OF ORDER: Look for Senate Rules Committee Chairman Trent Lott (R-Miss.) to push for a broad review of the chamber's rules when Congress returns in January. Lott, who says the rules haven't been reviewed in years and believes some may be antiquated, is likely to attempt to eliminate secret holds, which lawmakers have long employed anonymously to delay or defeat nominations and legislation.

OUT OF ENERGY: The 1,200-page national energy bill is dead for the year, and although supporters are only two votes short of passing the legislation, energy lobbyists aren't confident they can be found short of another disaster like the Aug. 14 blackout. Look for the groups with goodies in the bill - such as the ethanol, coal, oil and gas, nuclear and renewable industries - to try to break out their language and attach them to other legislative vehicles, after spending the last three years trying to pass a comprehensive energy policy.

GEPHARDT CONTROVERSY: Democratic presidential hopeful Richard Gephardt (Mo.)
faces a revolt of union leaders as he tries to diffuse an escalating controversy about recent alleged actions of one of his senior advisers. Two powerful union presidents who have endorsed former Gov. Howard Dean (D-Vt.) maintain that the Gephardt aide, Joyce Aboussie, threatened to retaliate if they campaigned for Dean in Missouri. Gephardt's campaign has so far declined to respond directly, but this issue will not fade away. Look for Aboussie to resign or apologize in the next week.

SOUTHERN WOOING: Expect Democratic presidential hopefuls to ratchet up their
wooing of Congressional Black Caucus members for endorsements as the primaries draw near. For example, with South Carolina hosting a crucial primary following New Hampshire and Iowa, black voters are anticipated to make up nearly 50 percent of Democratic primary voters. For months now, Sen. John Edwards (D-N.C.) has been talking up his feelings about race based on his upbringing in a small southern town. So far, four members of the black caucus have endorsed Edwards: Reps. Eddie Bernice Johnson (Texas), Mel Watt (N.C.), Al Wynn (Md.), and Frank Balance (N.C.).

HOUSE HOUSEKEEPING: House Administration Committee Chairman Bob Ney (R-Ohio) said his committee will focus on revamping committee hearing rooms after Congress returns from its December recess. The panel will discuss "how will we get the rooms to the 21st century," Ney said in a late October interview.

The Hill, "E-Notes" "Tip Sheet"--December 5, 2003


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