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Monday, September 26, 2011

House kills spending bill with disaster aid (AP)

WASHINGTON – In a rebuke to GOP leaders, the House on Wednesday rejected a measure providing $3.7 billion for disaster relief as part of a bill to keep the government running through mid-November.

The surprise 230-195 defeat came at the hands of Democrats and tea party Republicans.

Democrats were opposed because the measure contains $1.5 billion in cuts to a government loan program to help car companies build fuel-efficient vehicles. For their part, many GOP conservatives felt the underlying bill permits spending at too high a rate.

The outcome sends House Speaker John Boehner, R-Ohio, and his leadership team back to the drawing board as they seek to make sure the government doesn't shut down at the end of next week. It also raises the possibility that the government's main disaster relief program could run out of money early next week for victims of Hurricane Irene and other disasters.

Earlier Wednesday, Rep. Eric Cantor of Virginia, the No. 2 Republican in the House, had confidently predicted the measure would pass.

The Federal Emergency Management Agency has only a few days' worth of aid remaining in its disaster relief fund, lawmakers said. The agency already has held up thousands of longer-term rebuilding projects — repairs to sewer systems, parks, roads and bridges, for example — to conserve money to provide emergency relief to victims of recent disasters.

The looming shortage has been apparent for months, and the Obama White House was slow to request additional money.

The White House, a vigorous advocate of greater fuel efficiency for U.S.-made cars, welcomed the result of Wednesday's vote.

"We are pleased that the House of Representatives today rejected efforts to put politics above the needs of communities impacted by disasters," the White House communications director, Dan Pfeiffer, announced on his Twitter account.

The underlying stopgap funding measure would finance the government through Nov. 18 to give lawmakers more time to try to reach agreement on the 12 unfinished spending bills needed to run government agencies on a day-to-day basis for the 2012 budget year.

Forty-eight Republican broke with GOP leaders on the vote; six Democrats voted for the measure. Some of the Republicans also came from manufacturing states like Michigan, which benefit from the loan program.

The measure was originally designed by GOP leaders to pass with bipartisan support. Last week, Democratic Whip Steny Hoyer of Maryland and Rep. Norm Dicks of Washington, the top Democrat on the House Appropriations Committee, said publicly that they would vote for it reluctantly.

The underlying stopgap measure was opposed by conservative Republicans unhappy with the spending rates set by the measure, which are line with levels set by last month's budget and debt pact with President Barack Obama. That measure provides about 2 percent more money for Cabinet agency budgets than Republicans proposed when passing a nonbinding budget plan in April. More than 50 Republicans recently wrote to Boehner calling on him to stick to the earlier GOP budget.

"This bill was designed to pass with Democrat votes, in part based on assurances from Reps. Dicks and Hoyer," said Erica Elliott, spokeswoman for GOP Whip Kevin McCarthy of California. "Frankly, it's shocking as many Republicans voted for it as did."

Senate Democrats, who muscled through a stand-alone $6.9 billion disaster aid measure last week, called upon House GOP leaders to add additional disaster funding to whatever future stopgap measure rises from the rubble of Wednesday's vote. Unless Congress passes stopgap legislation by midnight on Sept. 30, much of the government will shut down.

"Consider making the disaster relief more robust" in the next bill, said Sen. Mary Landrieu, D-La. "Please talk to the Democrats."

Landrieu said FEMA Director Craig Fugate told her Wednesday that the agency's disaster relief fund may run dry on Tuesday. That would mean that there's no money to provide shelter, cash assistance or other help to victims of Irene, thousands of fires across Texas and northeastern states flooded by Tropical Storm Lee.

In the House, Democrats rallied against the measure because of the accompanying $1.5 billion in cuts to an Energy Department program that subsidizes low-interest loans to help car companies and parts manufacturers retool factories to build vehicles that will meet new, tougher fuel economy standards.

Democrats say cutting the loan program could cost up to 10,000 jobs because there wouldn't be enough money for all pending applications.

They estimated that $3.5 billion of loan subsidies has supported loans totaling $9.2 billion that created or saved 41,000 jobs in Tennessee, California, Indiana, Michigan, Delaware, Illinois, Kentucky, Missouri and Ohio. Ford Motor Co. and Nissan Motor Co. have already received loans; Chrysler Group LLC is awaiting final approval of a loan.

Republicans countered that $4 billion remains in the loan fund, plenty to tackle the 11 loan applications closest to being approved. They also noted that Democrats didn't complain loudly when identical cuts sailed through the House when it passed the FEMA budget in June as part of a homeland security spending bill.

"The loan program ... has had excess funds for years," said House Appropriations Committee Chairman Harold Rogers, R-Ky. "All entities in final loan stages will still get the funding they've worked for."

For his part, Dicks said he was persuaded by fellow Democrats that fighting against the loan program cuts was worth the risk of taking down the must-pass stopgap measure.

"Our people feel very strongly about it. It has created jobs," Dicks said in an interview. "It's working, and so they want us to fight against (the cut)."


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Feinstein sues treasurer, bank over campaign fraud (AP)

LOS ANGELES – Sen. Dianne Feinstein's campaign filed a lawsuit Friday against a bank that handled accounts for a prominent Democratic campaign treasurer accused of looting millions of dollars from the war chests of local, state and federal politicians.

The lawsuit, filed in Los Angeles Superior Court, names First California Bank, treasurer Kinde Durkee, Durkee's firm and two business associates, including her husband, who is a partner in her business. The filing comes two days after state financial regulators launched an investigation into how the bank managed the dozens of accounts Durkee maintained at First California, based near Los Angeles in Westlake Village.

"A fraud of the scale alleged herein could not have occurred, and did not occur, without the knowing involvement of First California Bank," the lawsuit reads. "In exchange for fees and profits, First California Bank intentionally ignored dozens of red flags, ignored its duties and obligations under state and federal law and allowed Durkee to perpetuate the scheme."

The bank's chief marketing officer, Diane Dickerson, said the company had not been served with the lawsuit and could not comment. Durkee's attorney, Daniel Nixon, also did not return a call.

The longtime treasurer, who controlled more than 400 accounts, was charged earlier this month with mail fraud by federal prosecutors who alleged she siphoned nearly $700,000 from a state candidate's campaign to pay her credit cards, a mortgage, business bills and her mother's care at an assisted-living facility. She then shifted funds from other candidates' accounts in an elaborate shell game to cover up the wrongdoing, prosecutors allege.

She admitted to authorities that she had been misappropriating her clients' money for years, according to the criminal complaint.

The scope of the scandal remains unclear even weeks after Durkee's arrest, but Feinstein estimates in the court papers filed Friday that she lost "millions of dollars" from at least two campaign committees, Feinstein for Senate and Fund for the Majority.

The complaint spells out several examples of alleged wrongdoing, including two instances of illicit transfers from Feinstein's campaign accounts this summer.

In the first, Durkee transferred $80,000 from one of the senator's accounts in two transactions and then re-deposited the same amount in the account three weeks later, the lawsuit alleges.

In the second, she took $100,000 from another Feinstein account and re-deposited it the same day, the court papers allege.

She has not been able to determine her exact losses because First California has refused to give her access to her accounts without a letter absolving the bank of any responsibility — which Feinstein won't sign, said Bill Carrick, her lead strategist.

The bank announced last week that it was seeking to have a judge sort out who owns the money in dozens of hopelessly co-mingled Durkee-controlled accounts — essentially putting a freeze on the money.

"I think our point of view is we want a full accounting of all these bank accounts so we know what happened and then we want to be reimbursed for everything that was wrongfully taken," Carrick said. "All of this happened inside that bank so they had full knowledge .... of this whole scheme."

The growing implications of Durkee's arrest have put the spotlight on an insular political culture that allowed one person to hold the purse strings for a clientele that left no levels of the party unscathed, from local mayoral candidates and small Democratic clubs to state politicians to federal lawmakers such as Feinstein.

Dozens of small Democratic clubs and medium-sized political action committees also may have been wiped out.

Durkee got most of her clients through word-of-mouth within the party. Smaller clubs were often steered toward her independent firm, Durkee & Associates, by local party bosses because she offered grass-roots groups her services at free or dramatically reduced rates.

She has been released on bond and is scheduled to make a court appearance Oct. 19 in Sacramento.

More charges are possible, authorities have said.


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50 Democratic House Seats in Play for 2012 After N.Y. Special Election (ContributorNetwork)

The National Review reports, based on the results of the special election in the New York 9th Congressional District, as many as 50 Democratic House seats may be vulnerable in next year's election.

This is not to say that the Republicans will pick up all 50, but the National Review provides a list of seats that are as favorable or more so for a GOP turnover for 2012.

The widespread vulnerability of House Democrats, even after the political tsunami of 2010, parallels the predicament President Obama is facing in formerly safe states. Coupled with the fact Democrats have to defend over 20 Senate seats, 2012 is shaping up to be a history-changing year.

Political strategists charged with deploying resources in a nationwide election always take note of four kinds of House seats. There are seats one's party holds that are safe, seats one's party holds that are vulnerable, vulnerable seats the opposition party holds, and safe seats held by the other party. The best situation to be in is to have few of one's own seats vulnerable and as many of the other party's seats as possible vulnerable.

The Democrats are in the worst of all situations. They have to defend many vulnerable seats and do not have many Republican seats ripe for a pickup. Resources such as money, paid campaign workers, and volunteers have to be spread very thin to defend vulnerable seats. Some very vulnerable seats may have to be given up as hopelessly lost.

Coupled with the president having to campaign in previously safe states and defend many Senate seats, one can see the Democrats are bracing for a bloodletting they have not seen in their history. It is a combination of 1980, when another weak president was suddenly at bay in the face of a conservative Republican candidate, and 1994, when congressional Democrats found themselves suddenly an endangered species.

The stakes cannot be higher. The prospect of a Republican president with a large majority in the House and a healthy majority in the Senate, with a mandate to execute a kind of hope and change the Democrats never imagined, must keep people in that party awake at night.

Source: After NY-9, 50 Democrat-Held House Seats Could Be Competitive, Jim Gergahty, National Review, Sept, 15, 2011

Results of New York Election Points to Obama Vulnerability, Mark R. Whittington, Yahoo News, Sept. 14, 2011


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Sunday, September 25, 2011

RNC surpasses DNC in August fundraising (AP)

WASHINGTON – The Republican National Committee raised about $8.2 million in August, far outpacing its Democratic rival in a typically slow fundraising month.

The Democratic National Committee reported that it raised $5.4 million last month, including $1.4 million for the Obama Victory Fund, a joint fundraising account by the DNC and Obama's campaign.

The DNC finished the month with $16.6 million in cash and $11.1 million in debt.

The RNC ended August with $9.3 million in cash and $15.9 million in debt. Republicans said it was the largest amount of money the RNC has raised during the month of August in a non-election year.

August is usually a difficult month for fundraising because many donors are on vacation and events are limited.


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Congress delays budget fight until Monday (Reuters)

WASHINGTON (Reuters) – The Congress set the stage for another last-minute budget showdown as lawmakers delayed action on a broad spending bill until Monday, shortly before disaster relief funds will run out completely.

This time, the brinkmanship threatens to disrupt assistance to victims of floods, wildfires and other natural disasters in one of the most extreme years for weather in U.S. history.

That money could run out as soon as Tuesday, but Republicans and Democrats appeared no closer to a solution after a week of legislative maneuvering.

A billion-dollar dispute over an electric-vehicle program favored by Democrats is preventing Congress from passing a trillion-dollar bill that would replenish disaster funds and ensure the government keeps running past October 1, the start of the new fiscal year.

"Everyone, once in a while, needs a little cooling off," Senate Democratic Leader Harry Reid said. "We'll come here Monday and more reasonable heads will prevail."

Reid spoke after the Democratic-controlled Senate, by a vote of 59 to 36, rejected a version that had passed the Republican-led House of Representatives.

Lawmakers have tried to lower the temperature on Capitol Hill after a series of acrimonious budget battles rattled markets, spooked consumers and disgusted voters.

Still, the stark partisan divide over spending that has dominated Washington this year once again threatened Congress' ability to pass even the most basic legislation.

The bill in question would give the Federal Emergency Management Agency more disaster relief money and ensure that the government can continue operating while Congress debates a full 2012 budget.

Failure to act by then would force the government to suspend everything from space exploration to river dredging. It also would disrupt a flood-insurance program, delivering a further hammer blow to the troubled housing market.

ADDING TO UNCERTAINTY

Analysts and lawmakers said a government shutdown remains unlikely at this point as Congress now routinely resolves budget disputes at the last possible minute. But the wrangling adds further uncertainty to markets that are already on edge.

"Something like this is just a reminder of a lack of policy response by government, not only here in the U.S. but across the globe, in coming up with solutions to the financial and economic problems that we face," said Gary Pollack, managing director at Deutsche Bank Private Wealth Management.

Democrats and Republicans remained at odds over a $1.5 billion cut to an electric vehicle program championed by President Barack Obama.

Republicans proposed the cut to partially offset the added disaster costs to avoid adding to the nation's fiscal woes.

Democrats point out that Congress usually exempts disaster money from normal budget rules. They say the cut would threaten thousands of manufacturing jobs at a time when the country is struggling with 9.1 percent unemployment.

The Senate is scheduled to vote on Monday on a version of the bill that would restore the car loan program. The chamber's top Republican, Mitch McConnell, predicted it would fail.

The dispute throws into question lawmakers' ability to find common ground on the more painful choices they will have to confront in the coming months as a special bipartisan committee searches for trillions of dollars in budget savings.

"Any delay that occurs because of inaction in the Senate will only imperil needed disaster relief for these thousands of families all across our country," House Speaker John Boehner, the top Republican in Congress, said at a news conference.

Boehner has so far declined to give ground to Democrats as he seeks to control a rebellion from his party's conservative Tea Party faction, which is pressing for deeper spending cuts.

Democrats have shown an increased reluctance to compromise after a year of bruising budget battles has left their liberal supporters feeling like they have already given away too much.

Budget fights in Congress earlier this year pushed the government to the brink of a shutdown in April and the edge of default in August, leading to a cut in the country's top-notch AAA credit rating.

(Additional reporting by Donna Smith, Susan Cornwell and Thomas Ferraro in Washington and Karen Brettell, Rodrigo Campos and Richard Leong in New York; editing by Ross Colvin and Eric Walsh)


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Obama Proves He's a Typical Tax-and-Spend Democrat (ContributorNetwork)

COMMENTARY | President Barack Obama today removed all doubts about his tax and spend roots proposing $1.5 trillion in new taxes over the next decade on the wealthiest Americans, while proposing a similar amount of cuts.

The problem with Obama's proposal is that is cannot pass. Since it generates revenue, the Constitution requires the bill to originate in the House of Representatives. The Republican majority in that chamber will never pass a bill like that. House Speaker John Boehner, R-Ohio, has been clear throughout the year that there will be no new taxes passed by the Congress and was quick to condemn the new tax proposal shortly after Obama's speech.

Multiyear budget cuts are a political fantasy in Washington. No action of this Congress is binding on another Congress, so any deal to cut spending in future years would have little weight after the next Congress is elected. Budget cuts projected over a 10-year span are simply political theater that would never see the light of day by time they roll around.

Obama said deficit savings cannot be accomplished by budget cuts alone. Wrong!

Every budget submitted to Congress has the opportunity to reflect significant budget cuts. But Obama is especially astute at creating programs that have future effective dates either when he is safely re-elected to a second term or so far into the future that it would have no effect on his presidency. Those aren't the type of cuts the federal budget needs right now.

Obama clearly punted on the issue of Social Security, Medicare and Medicaid reform. His proposal would trim provider-related reimbursements, but not touch beneficiary costs or benefits. There can be no meaningful reduction in deficit spending without looking at these type of mandatory spending programs regardless of how politically hot they may be.

Some of Obama's proposals warrant consideration. He forecasts $1.1 trillion in savings from ending the Iraq and Afghanistan wars. It's about time. The U.S. has never fought a war for 10 years -- sustaining that fight has broken the U.S. treasury. If he can bring the troops home - and avoid handing out foreign aid to the same countries -- he will accomplish that part in future savings.

Congress will have to consider these proposals -- not just the super committee charged with finding budget cuts before Thanksgiving. Because of that, there is no chance it will ever become law.


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Republican legal group files ethics complaint against Debbie Wasserman Schultz (Daily Caller)

Democratic Rep. Debbie Wasserman Schultz of Florida is the subject of a new ethics complaint filed in the Office of Congressional Ethics. The Republican National Lawyers Association (RNLA) filed the complaint in response to a video the Democratic National Committee (DNC), which Wasserman Schultz chairs, released last week.

As The Daily Caller previously reported, the DNC ad promoting President Barack Obama’s American Jobs Act appeared to violate House ethics rules that prevent footage of floor proceedings from being used for political purposes. The 30-second ad, however, featured only footage of the president’s recent speech to a joint session of Congress — not speeches of members of Congress themselves.

Normally, that wouldn’t be a problem for the DNC. But since Wasserman Schultz is a member of Congress, some say the House ethics rules now apply to the DNC.

“This carefully orchestrated political campaign is consistent with a disturbing pattern of President Obama’s misuse of official resources for political purposes,” read the RNLA’s complaint. “Now it appears he has not only misused the resources of his own office, but he has engaged Representative Wasserman Schultz in the misuse of coverage of House proceedings, in direct violation of her ethical duties as a Member of Congress.”

The rule in question is House Rule 5, clause 2(c)(1), which says, “Broadcast coverage and recordings of House floor proceedings may not be used for any political purpose.”

Additionally, House Rule 11, clause 4(b) says that “radio and television tapes and film of any coverage of House committee proceedings may not be use, or made available for use, as partisan political campaign material to promote or oppose the candidacy of any person for public office.” (RELATED: Does a new DNC ad violate House ethics rules?

According to the Office of Congressional Ethics website, once a complaint is filed, two board members may conduct a preliminary review – a process that takes 30 days – to determine if all information available provides a reasonable basis that a violation occurred.

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