John Edwards

Republican moderates balk at Bush tax cut

Resistance from McCain, Snowe, Chafee and others could spell trouble for the president's radical proposal.

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Republican moderates balk at Bush tax cut

One day after President Bush proposed a $674 billion tax cut that would principally benefit the affluent, a corps of moderate Republicans delivered a curt response: In a time of imminent war and rising deficits, the tax cut is too big and will not pass without significant change.

The unusual public opposition from moderates in his own party and from centrist Democrats who supported his 2001 tax cut appeared to get the attention of the White House, and spokesman Ari Fleischer was already signaling Wednesday that Bush was ready to compromise. And while some analysts had suggested that Bush’s first draft was designed mainly to score points with big GOP contributors, some past allies in the Senate said Bush had no choice but to back down.

Sen. Olympia Snowe, R-Maine, a member of the Senate Finance Committee, said she was pleased with some of the smaller-ticket items in the Bush plan, like the acceleration of the child-care tax credit and some targeted business cuts. But she balked at the $364 billion centerpiece of Bush’s plan — the elimination of the tax on corporate dividends — citing the worrisome federal deficit.

“We must seek the balance needed to build bipartisan support on a stimulus plan that will stimulate the economy while also remaining fiscally responsible,” she said. “At a time of growing federal deficits, it is especially important that this plan be right-sized without putting our future at risk.”

Snowe was among the 60 senators who supported Bush’s $1.3 trillion tax cut in May 2001, handing the president one of his first major legislative victories. That cut sailed through Congress, with 12 Democrats joining 48 Republicans in voting for the bill. But the initial resistance on Capitol Hill to Bush’s new stimulus package may be the best measure of just how dramatically the country’s economic and political landscapes have changed in two years.

The events of Sept. 11, 2001, triggered enormous spikes in defense spending and the largest reorganization of the federal government since the New Deal. Though the nation had enjoyed a $127 billion budget surplus in 2001, expenses shot past revenues to create an expected deficit of $165 billion in the current budget year. And many moderate Democrats who last fall seemed cowed by the threat of tough election battles now seem to be liberated and willing to criticize the president’s new tax-cut package openly. Self-inflicted wounds from the 2002 midterm elections also remain fresh, and Senate Democrats seem more eager to draw sharp differences between themselves and the White House, particularly on domestic policy.

One influential Bush critic — this one a Republican — appeared ready to vote against another Bush tax-cut plan. “It is middle-income Americans that have kept our economy afloat by buying houses and automobiles,” said Sen. John McCain of Arizona on MSNBC’s “Hardball.” “I believe that they deserve the majority of the break, not the higher-income level of Americans.”

Sen. Lincoln Chafee, R-R.I., has scheduled a press conference Thursday to announce his opposition to the president’s proposal to accelerate the 2001 tax cuts. That may not come as a huge surprise since Chafee and McCain were the only two Republicans to vote against the 2001 Bush tax cut.

“I would like to see a more balanced approach than the plan laid out by the president today,” said Sen. Jim Jeffords, I-Vt., who voted for the 2001 tax cut, his last vote before bolting the GOP. “We need a plan that focuses more on the needs of people on Main Street rather than the needs of Wall Street.”

Similar concerns were voiced by Sen. John Breaux, D-La., who also supported the 2001 cuts. Breaux cited the effect the new tax cuts would have on the federal deficit as his reason for balking at the new proposal.

“Bear in mind tax cuts are not free,” Breaux told the Los Angeles Times. “We have to pay for them by increasing the size of the deficit. And we have a lot of other competing demands for dollars this year. Who knows what Iraq is going to cost? Who knows what Medicare reform and prescription drugs are going to cost?”

In reality, Bush has a little cushion to work with. The tax-cut bill will only need 50 votes to pass, and with 51 Republicans in the Senate, he can afford to lose some of the Democrats who voted for the 2001 tax cut. But opposition from Snowe and other Republicans is a more pressing problem for the White House.

“The president understands that we have a system in our country — the president proposes, and it’s Congress’s responsibility to the American people to discuss it, to hold hearings and to exercise its judgment on the president’s package,” Fleischer said Wednesday. “I think he has shown over the last two years a very successful track record of fighting for what he believes in and working well with Congress to get it enacted. And that’s exactly what he intends to do this time.”

With bipartisan opposition to the plan already evident, there is some question about how much of this proposal will actually survive the legislative centrifuge. For now, though, the die-hard supply-siders are thrilled. One of those happy tax cutters is Veronique De Rugy, an analyst with the libertarian Cato Institute based in Washington. She says she has been critical of administration proposals in the past — such as bills to boost education spending and federal farm subsidies — but she couldn’t be happier with the latest White House proposal.

“I wasn’t expecting something so bold,” she says. “No one was expecting them to come with such a big cut in the tax on dividends.” Early speculation was that the administration would propose cutting the dividend tax to 20 percent.

But the very boldness of the White House proposal has led others to speculate that Bush is simply staking out ground to begin the stimulus package negotiations. By starting big, the argument goes, any future “compromise” will provide a bigger tax cut in the end.

“That’s very often the case,” De Rugy says. “When you think about Reagan and the original tax reform act of ’86, there was a huge gap between what was initially proposed and what we ended up with.”

But Bush’s critics have made that claim before, and more often than not, the White House has been successful in getting most, if not all of what it asks for. One need look no further than the last Bush tax-cut plan for proof.

Bush will also have a tougher time rounding up bipartisan support this time around. Bipartisan support has always been aggressively sought by the administration, but some of the Democratic senators who supported Bush’s first cut, like Sens. Jean Carnahan of Missouri, Robert Torricelli of New Jersey and Max Cleland of Georgia, are gone. Other Democratic supporters, like Sen. Dianne Feinstein of California and Louisiana’s two Democratic senators, have already expressed their displeasure with the president’s initial proposal. A spokeswoman for Sen. Max Baucus, D-Mont., said he is still reviewing the president’s plan, but that “clearly, he thinks it’s too big.”

Facing what promised to be a tough reelection fight, Sen. Mary Landrieu, D-La., supported the first Bush tax cut. But with her political future secure for another six years, she is now openly calling for radical changes to the president’s plan.

“Unfortunately, the president’s package is very short on stimulus,” Landrieu said. “The only stimulus I can see in it is actually stimulating some of his special-interest groups that are going to help fund his campaign … To claim that is a stimulus package is really being much less than genuine.”

Landrieu said she would support a “payroll tax holiday” — a cut championed by many Democrats as an alternative to the Bush proposal — which she says would provide a more immediate spike to the economy. A cut in the payroll tax — the tax used to fund Social Security and Medicare — is aimed at providing relief for all workers, including low-wage earners who may not make enough money to pay federal income taxes. Many Democrats have proposed payroll tax cuts that would be paid for out of general revenues, so that Social Security funding would not be cut.

Landrieu’s comments underscore some of the new political realities in Republican-run Washington. On a personal level, Landrieu has survived her election challenge, and is less shy about criticizing a president who remains popular in her home state. But Landrieu was also precisely on message with her call for a reduction in payroll taxes.

While House Democrats presented a united alternative to the Bush stimulus plan, efforts to stay on message in the Senate are sure to be complicated by the fact that at least three Senate Democrats are running against each other for the Democratic Party’s presidential nomination. It may well be more, as Sen. Bob Graham, D-Fla., and Christopher Dodd, D-Conn., contemplate their political futures.

Three presidential wannabes — Sens. John Kerry, D-Mass., John Edwards, D-N.C., and Joe Lieberman, D-Conn. — sent notice Tuesday that Bush’s plan is unacceptable, each touting their own economic alternative. Though he did not vote on the last tax cut — perhaps worried about being labeled a tax-and-spend liberal — a more emboldened Kerry said Tuesday that Bush’s plan “is just more evidence that he doesn’t understand what ails our slumping economy and refuses to do the things that will put Americans back to work. While largely ignoring the needs of the middle class, the president is practicing bad economics and even worse ideological class warfare.”

Kerry has put forth an economic plan that also calls for a cut in the payroll tax. Edwards touted his $120 billion stimulus package, which includes an energy tax credit of $500 per family, and provides block grants to states. Lieberman touted his $150 billion proposal, which he says “would give businesses an immediate incentive to invest in new information technology, rev up the burgeoning biotechnology and nanotechnology industries, [and] send a new rebate to the 34 million taxpayers who didn’t get one in 2001.”

So while the White House begins a full-frontal assault to sell its big-ticket stimulus package, a muddled list of Democratic counterproposals and their ambitious sponsors will all be vying for a little attention as the long debate over tax cuts begins again.

Anthony York is Salon's Washington correspondent.

Al, we hardly knew ye

On "Saturday Night Live," Gore finally seems human. Sunday on "60 Minutes" he proves it, and pulls out of the 2004 race.

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The best gag during Al Gore’s stint as host for “Saturday Night Live” came when the former vice president of the United States sat naked from the waist up in a hot tub interviewing Joe Lieberman (played by Chris Parnell), recreating, a la “The Bachelor,” the selection process for his 2000 running mate.

The sketch, with its perfect caricatures of the “contestants” — a slavish John Edwards (Chris Kattan) and a boorish John Kerry (Seth Myers) — showcased a strange, new Al Gore. How best to describe it? He seemed less like an android than ever before.

It had the reckless feel of the best political appearances on “SNL,” from Jesse Jackson’s angry reading of “Green Eggs and Ham” to John McCain’s recent crack at a Streisand medley. Jackson and McCain, though, are self-styled mavericks who challenge convention, rather than strive to seem presidential. When McCain belted out an off-key “Evergreen,” he had already said that he never planned on another presidential run.

Gore, meanwhile, had seemed back on the campaign trail.. Watching him demurely tangle arms in a champagne toast with Parnell’s Lieberman while soaking in a sudsy bath, anyone who has ever watched five minutes of “Meet the Press” had to be thinking: This is hilarious, but does he think this makes us wish he was leading the war on terror? At the same time, my Salon colleague Jake Tapper was at a party thrown by an ex-Clinton official, and the crowd gathered around the TV. At the sight of the topless Gore, the wife of an Edwards adviser immediately pronounced: “That’s it. He’s not running.”

Sure enough, word would spread within the news cycle: Gore was out. On “60 Minutes,” he told an incredulous Leslie Stahl that “I want to contribute to ending the current administration,” but that “my best way of contributing to that result may not be as a candidate this time around.” He could have compared his favorability numbers with Bush’s (19 percent to 65 percent, according to a recent New York Times poll) and figured his best chance would be in 2008.

But it sounds like other Democratic Party members had taken a look at those numbers, the dismal sales of his book, or maybe the hostile reviews of his recent reemergence in the public eye by even liberal commentators, and concluded that the public that had given him the popular vote two years ago didn’t want him around much. He told Stahl that he thought “there are a lot of people within the Democratic Party who felt exhausted by [2000]. Who felt like, OK, I don’t wanna go through that again. And I’m frankly sensitive to that — to that feeling.”

So should that make you feel sad? If you like Al Gore mostly because he is not George W. Bush, whom you really really hate, well then go ahead, feel sad. (Minutes after the news broke, a spam e-mail to members of the media urged us to consider: “Was Gore Threatened?”) Supporters will also point out that in recent months Gore seemed the only Democratic leader willing to get his hands dirty, loudly questioning a possible war with Iraq, and going after Trent Lott when Tom Daschle and fellow Senate Democrats looked the other way.

But critics, including — maybe especially — those on the left, could just as eagerly claim it was all more posturing, that Gore could play the heartless, bloodless pol as well as anybody. He was the guy, after all, who used his keynote speech at the 1996 Democratic National Convention to melodramatically recount the tragic death of his sister Nancy to lung cancer — and advance his ticket’s popular attack on the tobacco industry. He was the guy who, having won the popular vote, took 18 months to come out swinging against Bush. Certainly Gore was unfairly savaged sometimes, but that never made him a saint. He tried to manipulate the media as much as anybody; he was just really bad at it.

Maybe that’s why he was so good on “SNL” — freed from the ugliness of campaigning, he could relax, be comfortable in his own skin. In the second-best sketch, played with “The West Wing” cast, Gore becomes unnaturally attached to the Oval Office set. Ultimately, Martin Sheen, Allison Janney and the rest of the cast fail to lure him away and leave him sitting at the fake presidential desk, until someone finally turns the lights off on him.

It seemed a little maudlin and overstated at the time, but now it suddenly seems poignant. And that doesn’t seem like a bad way to go out.

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Kerry Lauerman

Kerry Lauerman is Salon's Editor in Chief. Follow him on Twitter: @kerrylauerman.

Will David Frasca be the FBI fall guy for 9/11?

Director Mueller mostly won over Congress this week. But in mapping the missed signals before the terror attacks, most roads lead to counterterror chief Frasca -- and at least one senator is miffed.

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FBI director Robert Mueller’s appearance before a Senate committee Thursday helped solidify his support among Democrats and Republicans on Capitol Hill, despite calls from the Wall Street Journal and a slew of conservative talk show hosts for his resignation. But the search for a fall guy at the FBI continues, and FBI counterterrorism chief David Frasca has come under increased congressional and media scrutiny as probes into the Sept. 11 attacks get underway.

At a Senate Judiciary Committee hearing Thursday, Sen. John Edwards, D-N.C., raised concerns that Frasca, head of the FBI’s Radical Fundamentalist Unit, intentionally misled Senate Judiciary Committee staff in a January briefing about the case of Zacharias Moussaoui.

Frasca and Spike Bowman, the bureau’s associate general counsel for national security affairs, met with Judiciary Committee staff in January to brief them about the Moussaoui case. “Based upon that briefing, I actually felt reassured about the vigor with which the Moussaoui investigation had been conducted,” Edwards said. But he added, “There are some things that have come to light since that time that I was not told about.”

Moussaoui is the French citizen who has been dubbed the “20th hijacker,” was arrested on an immigration charge after the INS discovered his visa had expired, shortly before Sept. 11. But FBI headquarters blocked local agents’ efforts to pursue their investigation of Moussaoui.

Edwards told FBI director Mueller Thursday, during Mueller’s appearance before the Judiciary Committee, that Frasca and Bowman failed to mention the existence of the Phoenix memo — in which Phoenix agent Kenneth Williams urged headquarters to search the nation’s flight schools for possible terrorists — and “did not mention that the Minneapolis office had some serious concerns about the handling of the Moussaoui matter by FBI headquarters,” during that January briefing.

Those “serious concerns” came to the forefront last month when FBI whistleblower Coleen Rowley penned an angry letter to Mueller that has since sent shockwaves through Congress’ investigation into the Sept. 11 attacks. Though Rowley’s memo was not written until May, Minneapolis agents had expressed their dissatisfaction with headquarters before the Sept. 11 attacks.

“The agents in Minneapolis who were closest to the action and in the best position to gauge the situation locally did fully appreciate the terrorist risk/danger posed by Moussaoui,” Rowley wrote. She said the FBI supervisory special agent in Washington involved in the Moussaoui case “seemed to have been consistently, almost deliberately thwarting the Minneapolis FBI agents’ efforts.”

Without naming names, Rowley was clearly pointing toward Frasca, and other media accounts named Frasca as the agent who interfered with Rowley’s efforts.

Frasca made headlines on his own this week when he told a closed Judiciary Committee meeting that, although the Phoenix memo was addressed to him, he did not see the memo until October.

But sources familiar with Frasca’s testimony say Frasca was cooperative with the committee’s probe, and that it remains unlikely that either the FBI inspector general or the committee will recommend disciplinary action against him. “The impression on both sides was that he answered all of the relevant questions forthrightly,” said one source familiar with the committee’s inquiry. “There was a feeling that the committee had a good enough understanding of what happened, and that he’s taken the necessary steps to address that.” The source said Frasca was “unlikely to be called again” to testify before the committee.

But it was clear Thursday that Edwards wanted to tweak Frasca in front of Frasca’s boss. The face-off between Mueller and Edwards Thursday was a vintage sparring match between two seasoned prosecutors. When Mueller told Edwards, “I’m not certain to what extent [Frasca and Bowman were] aware of the Phoenix [memo]” at the time of the January briefing, Edwards came back with a jab of his own.

“Do you know whether the Phoenix memo, in fact, was addressed to Mr. Frasca?” Edwards asked

“I believe it was,” Mueller replied.

Edwards stopped short of directly accusing Frasca of trying to keep information from the committee staff, but made sure his annoyance with Bowman and Frasca was duly noted.

“If some or all of that information was available to Mr. Frasca and Mr. Bowman, and they were here for the purpose of briefing us about the Moussaoui case, the Moussaoui investigation, what had been done, what had not been done — do you think it was appropriate for them not to tell us about those things?” Edwards asked Mueller, almost rhetorically.

“I’m not certain they had that in the back of the mind when they were doing the briefing. But absolutely, I believe — I believe when they came up that they tried to be honest and straightforward. I don’t think they were hiding anything at all,” Mueller said.

The exchange highlights a level of institutional mistrust between Congress and the FBI that will persist as Congress ramps up its probe of the Sept. 11 attacks. Many members of Congress, from both parties, have been frustrated by what they call the FBI’s reluctance to share information with legislators on the Hill. Though FBI inspector general Glenn Fine said Thursday that Frasca knew about the Phoenix memo “in the fall of last year,” Congress was not told of the memo’s existence until last month.

Senate Judiciary Committee chairman Pat Leahy, D-Vt., took the tone of a dour father admonishing a child when asking Fine about the FBI’s failure to turn over the Phoenix memo sooner.

“You got that in September. Is that correct?” Leahy asked.

“I believe it’s Sept. 28,” Fine responded.

“And you gave it to the joint committee two weeks ago?” Leahy asked.

“We gave the results of our preliminary inquiry on, I think, May 22. Correct,” said Fine

“About six months later — more than that,” Leahy pointed out. He paused, glaring sternly at Fine, who stared back at Leahy. A short but awkward silence permeated the hearing room, until Leahy moved on.

The questioning by Edwards and Leahy Thursday cuts to the heart of one of the major challenges Mueller faces in reforming the FBI — and one of the major questions asked by Rowley in her letter to Mueller: Will the FBI’s investigation, led by Fine, result in a thorough probe, and necessary disciplinary action, of those within the FBI who may have made mistakes regarding the Phoenix memo and the Moussaoui case before Sept. 11?

The signs thus far have been mixed. Before the Rowley memo surfaced, Mueller himself sought to deflect criticism away from the bureau and any of his individual subordinates.

“The agent in Minneapolis did a terrific job in pushing as hard as he could to do everything we possibly could with Moussaoui,” Mueller said at a May 8 hearing of the Judiciary Committee. “But did we discern from that that there was a plot that would have led us to Sept. 11? No. Could we have? I rather doubt it.”

That, of course, was before the Rowley memo directly challenged Mueller’s statements. Just three weeks later, Mueller modified his statements slightly about the possibility that more diligent pursuit of Moussaoui could have led to the Sept. 11 plot. “I cannot say for sure that there wasn’t a possibility we could have come across some lead that would have led us to the hijackers,” he said.

Mueller said that while he understands there is a desire for him to crack heads, he is taking a measured approach to any rebuke of anyone inside the FBI. “Before disciplinary action is taken the inspector general ought to look at that conduct and determine whether or not disciplinary action is appropriate,” he said. “Each of the individuals who were involved in this ought to have a right to express what motivated them, what was their thinking, what was available to them to do their job — before the ultimate determination is made. And I’ve asked the I.G. to go through it and do that.”

The fight over information is sure to continue as Congress probes the intelligence failures surrounding Sept. 11. Many in the Senate, for example, have pushed the FBI to make the Phoenix memo public, a request the bureau has continually rebuffed. Thursday, the FBI released a slightly redacted version of the letter Rowley wrote to Mueller, but that was only after the tidal wave of media coverage, and after Time magazine published an edited version on the Rowley letter. The FBI’s first reaction was to stamp the letter “classified.” On copies from the FBI handed out Thursday, each page was stamped with the word “secret,” crossed out with a single line through the word.

Despite the sparring over information, members of the Judiciary Committee still expressed their support for Mueller this week, and said they were confident he was the right man to lead the overhaul of the FBI.

“I think he’s got very strong support,” said Sen. Dianne Feinstein, D-Calif. “To a great extent, he’s been the victim of some unfairness. He came into the job a week before 9/11, and then suddenly he’s blamed for all the pitfalls of that agency. He’s bringing in some of his own people, and that’s a good sign.”

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Anthony York is Salon's Washington correspondent.

Dueling horror stories

Congressional advocates of competing patients rights bills stage rival Capitol Hill press events as the health war heats up.

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Dueling horror stories

In blinding sunlight on the white stone steps of the Capitol Tuesday morning, members of Congress jostled one another to get close to a sexy thing. This being Washington, that sexy thing was the patients bill of rights, the controversial legislation that will allow patients to sue HMOs and insurance companies for denied claims that result in health woes or death.

Politically, the patients bill of rights is where the action is for the immediate future, a crucial test of whether the Senate’s new Democratic leadership can advance its agenda, and how effectively the Bush White House will fight back. Witness, for example, the hot behind-the-scenes debate over the role Rep. Greg Ganske, R-Iowa, would play at the press conference.

Ganske, a plastic surgeon, is the primary Republican sponsor of the patients bill of rights in the House. But he’s also a declared opponent of potentially vulnerable Sen. Tom Harkin, D-Iowa, in the 2002 election.

Thus some Democrats questioned whether Ganske should be allowed to participate, even though he’s been leading the bipartisan charge on the matter, going so far as to rebuff President Bush’s February request that he remove his name from the bill until a compromise with the White House could be reached. (The request was honored at the time by Rep. Charlie Norwood, R-Ga., who threw up his hands in frustration just two weeks ago and rejoined the bipartisan team last Wednesday.)

But after the preposterous partisan objection to Ganske’s presence was brushed aside, there was still the matter of tending to Harkin’s needs. So Harkin spoke at the press conference, even though he has played no role in drafting the Senate version of the bill, which was crafted by Sens. Edward Kennedy, D-Mass., John Edwards, D-N.C., and John McCain, R-Ariz. Harkin even spoke before Ganske. Plenty of senators who hadn’t played a role in the creation of the bill were present at the press conference, but the only speakers were Senate Majority Leader Tom Daschle, D-S.D., who is bringing the bill to the floor, the three senators and three House members who crafted the bill, and Harkin.

But lots of pols wanted in on the action. Even Sen. Hillary Rodham Clinton, D-N.Y., arrived on the scene, stylishly late. Politicians rarely wear sunglasses at public appearances — it gives the wrong image — but Clinton’s a different breed of cat. Mondo Hollywood, she made like Gwyneth at Cannes, waving to the crowd and shaking hands with the little people scattered around her, her cool shades keeping her even more remote and aloof than usual.

Such scenes come naturally to the high-profile patients bill of rights, the bill that pits trial lawyers and doctors against HMOs and insurance companies, not to mention McCain vs. Bush, who has pledged to veto the Kennedy-McCain-Edwards bill as it exists now.

A rivalry of more immediate consequence, however, was that between Daschle and Senate Minority Leader Trent Lott, R-Miss. On Monday, Lott and Assistant Minority Leader Don Nickles, R-Okla., said they would use parliamentary tools to prevent the bill from hitting the floor for debate. In response, at the Tuesday morning press conference Daschle not only promised to bring the Kennedy-McCain-Edwards bill to the floor, but also threatened to hold the Senate in session until a bill is passed.

“I intend to put my colleagues on notice this morning: There will be no July 4 recess,” Daschle said. “There will be no break until this bill is passed in the United States Senate!”

“To my friends and colleagues: Happy July 4,” McCain quipped.

Most Democrats support the Kennedy-McCain-Edwards bill. Most Republicans support its rival, the Bush-backed bill offered by Sens. John Breaux, D-La., and Bill Frist, R-Tenn. Much of the fight is being waged in the battlefield of public relations, to win the small but significant swath of moderates from both parties in the House and Senate.

Thus the health insurance lobby and business interests have launched a multimillion-dollar TV advertising campaign against the Kennedy-McCain-Edwards bill. With rumors swirling that the interests opposing the bill might spend up to $15 million in advertising against their bill, the Kennedy-McCain-Edwards coalition girded for action on Tuesday.

On the Capitol steps stood Congress members, surrounded by real Americans, cheering their patients bill of rights and deriding the rival bill as a sign of the pending healthcare apocalypse.

“I made a promise to a young man and his mother, a young man who lost both hands and both feet because an HMO made a medically negligent decision when he should have been allowed to go immediately to the closest emergency room,” said Ganske. “And I made a promise to that young mother and to that little boy that we would not stop working until we get this patients bill of rights signed into law, so help us!”

But opponents of Kennedy-McCain-Edwards also grabbed for the spotlight on Tuesday. Near the Capitol steps conference, under the shade of oak, Branford pear and gingko trees, roared a dueling press conference. This one featured Congress members surrounded by real Americans, cheering their patients bill of rights. “The most important patient protection is access to affordable healthcare,” said Nickles, speaking in favor of Breaux-Frist. “As it stands now, the bill the Senate will be debating does more harm than good. I can’t support something that drives healthcare costs up sharply, overturns the good work states have already done on this issue or bankrupts employers who provide health insurance to their employees.”

Both bills would give patients the ability to sue HMOs or insurance companies for coverage decisions that adversely affected the health or life of a patient. But the bitter fight being waged involves details about that right to sue. Thursday, Bush aides invited Congress members involved in the debate over to 1600 Pennsylvania Ave. to try to negotiate a compromise, but there emerged two major sticking points.

One, the Kennedy-McCain-Edwards bill sets the cap for punitive damages at $5 million, while the Breaux-Frist bill caps such awards at $500,000. Neither side would budge. (The House bill, offered by Ganske and Rep. John Dingell, D-Mich., has no cap at all.) Second, under the Kennedy-McCain-Edwards bill, states would keep their patient protection laws, and lawsuits against HMOs or insurance companies would be heard in state courts, which tend to offer larger awards. Breaux-Frist, on the other hand, would supercede state laws. Again, neither side would budge.

A third point of contention was voiced Tuesday. “All you folks write about is the right to sue HMOs!” Sen. Rick Santorum, R-Penn., admonished reporters at the press conference in support of the Breaux-Frist bill. “You never write about the issue of suing your employers! But when it comes to suing the employer it is a whole new game! This is a disaster! Write about the issue! Please! This is about employers being sued! Please write about it! Please!”

Santorum’s opponents on this issue insist that employers would only be liable if they had a direct hand in a specific decision that denied coverage to the patient whose health was adversely affected as a result.

“Our bill protects employers from liability,” McCain said. “I repeat: Our bill protects employers from liability. This is a priority, I believe, that all of us share. We stand ready to negotiate and discuss any issue with the opponents of this bill.” But the real Americans McCain’s opponents trotted out hammered home their talking points and made it appear that compromise was impossible.

Paul Braun, a milk hauler from Heckler, Ill., said that passage of the patients bill of rights — which would indisputably raise insurance costs — could force him to raise fees for the farmers whose milk he hauls. He said he’d like to have either of his state’s senators — Democrat Dick Durbin, in favor of the Kennedy-McCain-Edwards bill, or Republican Peter Fitzgerald, who has yet to take a position on either bill — explain to his farmer clients “why they have to pay for increased lawsuits.”

Other small business owners followed Braun, each bemoaning what the higher costs of health insurance would do to their ability to provide such insurance to their employees. (None mentioned that the Breaux-Frist bill would raise insurance costs, too, although not as much.) Shuttled to the press conference by various business interests — where they stood with Santorum, Frist, Nickles and Sens. Phil Gramm, R-Texas, and Judd Gregg, R-N.H. — all of them spoke convincingly about increased costs.

But in terms of P.R. value, they couldn’t compete with the boy who lost both hands and both feet because of an HMO, so movingly described by Rep. Ganske.

Or Steve Grissom, the young North Carolinian with leukemia, whose HMO denied him the oxygen his physician prescribed. And on and on, as C-Span 2 cameras rolled and supporters of Kennedy-McCain-Edwards stepped to the mike. If Breaux, Frist, Lott & Co. want to wage P.R. war, they’re going to have to do a little better than a milk hauler worried about rising health care costs. Unless, of course, that’s all they have.

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Jake Tapper is national correspondent for Salon.

The mystery of the docile Democrats

How long will they keep jumping through Ringmaster George's hoops?

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The mystery of the docile Democrats

In a phone call last week, I tell former Sen. Bob Kerrey, D-Neb., recently appointed president of the New School in New York, that President Bush has just officially nominated über-conservative attorney Ted Olson to be his solicitor general.

“Jesus,” Kerrey says.

Olson may be a brilliant and capable attorney, but he’s a harsh partisan. His nomination is the equivalent of a President Al Gore picking Alan Dershowitz. Olson’s most recent foray in the public light was to work his magic before the U.S. Supreme Court before its controversial 5-4 decision that handed Bush the presidency. Perhaps even more controversially, Olson — one of Kenneth Starr’s best friends — was also one of President Clinton’s chief antagonists as head of the “Arkansas Project,” the multimillion-dollar investigation into Clinton’s pre-White House days as funneled through American Spectator magazine. He represented Whitewater witness David Hale, and coached Paula Jones’ attorneys before their Supreme Court argument.

“He shouldn’t be confirmed,” Kerrey says. “If this guy had been funded by the American Socialist party during the Reagan administration, and had attacked Ronald Reagan over and over and then a Democrat nominated him, the Republicans wouldn’t vote to confirm him.”

But Kerrey’s voice is probably the only one you hear criticizing the Olson nomination.

Some would use this as further evidence that the Democratic Party has gone AWOL. The perfect symbol for the Democratic Party’s impotence, they say, is the fevered, passive hope — what its members whisper about away from the TV cameras and NPR microphones — that the recently hospitalized Sen. Strom Thurmond, R-S.C., 98, might soon die, and be replaced with a Democratic senator by South Carolina’s Democratic governor.

“Obviously, it’s a hard time for Democrats,” says former Clinton domestic policy director Bruce Reed, who just became president of the Democratic Leadership Council. “We didn’t win the election and we don’t control the agenda. It remains to be seen how good we are at defense now that we’ve lost our goalie.”

“Bush is acting like he won 60 percent of the vote and 340 electoral votes on top of it,” Kerrey says. “He’s pressing way beyond his mandate.”

But who’s to stand in his way? “They’re trying to get their sea legs,” Kerrey says of his former colleagues.

To many liberals, the Democrats just seem like wimps — “Why the Democrats Are Getting Rolled,” reads the headline of the New Republic. The frontline reports are grim: A recent New York Times story reports: “Democrats said they felt all the more leaderless because of the lingering strains between Mr. Gore and Mr. Clinton, which have been heightened by the controversies over gifts and pardons.” The analyses are rude: “It’s been painful to watch the Democrats roll over and play dead for George W. Bush since his coronation,” reads an op-ed in the Christian Science Monitor.

But while it’s clear that Bush’s first four weeks as president have gone fairly well (as first four weeks usually do), the notion that Bush is romping and the Democrats — now without control of the House, Senate or White House for the first time since Eisenhower — are taking a dive is a rather simplistic analysis and drives Democrats on the Hill crazy.

Rep. Barney Frank, D-Mass., is clearly irritated at any notion that Democrats are “getting rolled.” While media speculation had scores of Democrats jumping ship in droves, as in 1981, to support the Republican president’s tax cut, Frank says: “How many Democrats are in favor of his tax plan? One: Zell Miller, the accidental senator.” (Former Georgia Gov. Miller had retired from public life until Democrats begged him to serve as the replacement for the late Sen. Paul Coverdell, a Republican, who died last year.)

Frank begins rattling off a list: “Ashcroft was the bitterest fight, the most substantial opposition to block a Cabinet nomination since John Tower. … Dick Gephardt is in the middle of a big fight over election reform in the House.” Also, Bush is and will increasingly be on the defensive over the patients bill of rights and campaign finance reform, Frank assures.

“This whole notion that we’re not fighting him is journalistic bullshit,” Frank says.

Instead, what Democrats say is: We’re biding our time for the big battles — like, say, when Bush announces his budget next week.

But until then, they are clearly fumbling. The real question for the Democrats: What’s their choice?

They do have a convenient target to blame: the president and his legacy of outgoing blunders. (Kerrey says: “Every time you see [a Democrat] on the weekend shows, the first question is, ‘Do you think Clinton should have pardoned Marc Rich?’” Says Sen. Evan Bayh, D-Ind.: “It’s a sizable diversion.”)

But there’s been internal confusion, as well. For instance, Frank says, a couple of weekends ago, at the Democratic Caucus retreat, former Treasury Secretary Robert Rubin spoke against the Bush tax cut. But Rubin told his fellow Democrats that he couldn’t do so publicly, since as a former secretary of the treasury he thought it inappropriate to intrude too politically into the matter.

Democrats objected to this; they wanted him out there slamming the tax cut. They pointed out that former Treasury Secretary James Baker III didn’t seem to have too many attacks of conscience when he was demagoguing on Bush’s behalf down in Tallahassee, warning of crashing markets and the pending apocalypse if Gore didn’t immediately concede. On Sunday, Feb. 11, Rubin’s op-ed, “A Prosperity Easy to Destroy,” appeared in the New York Times.

But one well-placed New York Times op-ed does not an effective message make, and Democratic opposition to the Bush tax cut has yet to gel. Even Frank allows that the Democrats are “trying to figure out what’s the best way to oppose the Republican tax plan.”

“There’s significant division on how to proceed,” Kerrey says. “There’s a split in the party as to whether Gore was too populist or not populist enough, instead of uniting around the idea that Gore really won the election and Bush is claiming a mandate he doesn’t have.” (Which is what Kerrey thinks they should be doing.)

“At the moment, there’s not a single, coherent message,” groused an executive at a leading liberal political action committee last week. “Which is what Bush has done so brilliantly. We, on the other hand, have different kinds of objections, different kinds of alternate proposals.” On Feb. 7, he says, the liberal “Progressive Caucus” held a press conference to denounce the Bush tax cut, and each of the half-dozen speakers from the liberal wings of the House and Senate had his or her own specific idea and criticism. “There is a bit of a vacuum in terms of coherent message and message discipline,” says this executive. “And Bush has both of those in spades.”

But even when the Democrats do speak in one voice, the Democrats’ press conferences have had limited effect. The press conference against the Bush tax cut proposal held two weeks ago, for instance, by the designated congressional leaders of the party — Minority Leader Tom Daschle, D-S.D., and House Minority Leader Rep. Dick Gephardt, D-Mo. — didn’t seem to make much noise.

Why? Well, there’s the fact that Clinton’s taking up all the airtime. But also it’s because Daschle’s claim — “If you make over $300,000 a year, this tax cut means you get to buy a new Lexus. If you make $50,000 a year, you get to buy a muffler on your used car. That’s the difference. That’s what we’re talking about here. A Lexus versus a muffler” — wasn’t fully accurate. That “make over $300,000″ number works only if you ramp it up to over $1 million. A family making $300,000 would gain about a $10,000 tax cut — not bad, but hardly Lexus cash.

So, yes, the message needs to be accurate. And they need to settle on one distinct plan, which they apparently have now done. Internally, within the Democratic caucus, they have been divided over whether they should offer big tax cuts of their own, or channel the surplus toward deficit reduction, or pay for new popular government programs like a prescription drug benefit for seniors. It wasn’t until last week that the caucus decided on its one-third/one-third/one-third plan, in which the surplus will be split evenly among all these priorities.

“Conrad’s going to play point man on this,” says a senior Senate Democratic aide, referring to Sen. Kent Conrad from North Dakota, the only Democrat on both the budget and finance committees. “This will be our most visible endeavor against the president.”

Neither Conrad nor Daschle nor Gephardt has emerged as a compelling spokesman against the president. It’s early yet, of course. Maybe Conrad will prove scintillating; maybe Bayh or Sen. John Edwards of North Carolina will emerge as a star, but right now there does seem to be something of a charisma deficit on the left side of the aisle. If you thought Al Gore was wanting in the sex-appeal department, wait till you see his demon spawn, extras from “Night of the Barely-Living Dead.”

And image is important. “The Bush people — and I credit [communications adviser] Karen Hughes with this — are brilliant at packaging,” says the liberal advocacy group executive. “They’ve done a marvelous job on taking the offensive on their issues, with message discipline in a way we haven’t seen in the last eight years.”

Frank, though, says that Bush has had less success than is widely believed, losing a few of these battles — but he’s a skilled politician. “Bush is very smart,” Frank says. “You don’t see the fights — he gives up better than a lot of people.” The ill-fated nomination of Linda Chavez as labor secretary, and the inclusion of a firm commitment to school vouchers in his education plan were both examples of political liabilities that he quickly dropped when he realized public sentiment was against him.

And Democrats vow that Bush will be even less successful when he has to get specific. Bayh, the newly elected chairman of the Democratic Leadership Council, says voters can expect to see more Democratic spine when the tax plan truly hits the Hill. As opposed to the nomination of John Ashcroft, which was greeted with 42 Democrats’ voting nay, but eight defections. Bayh says that the “42″ number — which can support a filibuster in the case of a future Supreme Court nomination — is far more significant than the eight.

Bayh also points out that moderate Republicans like Sens. Jim Jeffords of Vermont and Lincoln Chafee of Rhode Island “are expressing doubts about the tax plan.” Still, while deferring vote-counting and party cohesion matters to Tom Daschle, Bayh vows that there won’t be eight Democrats peeling off on the Bush tax cut.

“The real test is going to come not just from ‘changing the tone,’ but trying to make progress on substance,” says Bayh.

But the Democrats are, frankly, still trying to figure this Bush guy out. Sure, in terms of the size of his tax cut, the Ashcroft and Olson nominations, the executive orders against family planning abroad, Bush sure seems like he’s governing from the far right.

Bayh, for one, wonders about that. “The question is, is this a negotiating tactic or are these positions where he’s going to remain?” Bayh asks. “It may be that he’s taking these positions for bargaining purposes we can strike a compromise from; we don’t know yet. You know, we’re less than a month into this. We don’t know how he’s going to operate yet.”

“He seems to want to secure the far right, put some capital in the bank there,” Bayh says, but wonders “if he did that so as to give himself more leeway to get to the center later on.”

Indeed, some members are trying their darnedest to divine Bush’s actual intentions. Rep. Joe Hoeffel, for instance, is a Democrat who represents much of Montgomery County, Pa. — a crucial swing area of the country, wealthy leafy Republican suburbs whose voters went for Gore. And Hoeffel is intrigued by what he sees as a possible indication that Bush is willing to compromise on the size of his tax cut.

The “$1.6 trillion” tax cut actually has a $2.4 trillion price tag, Hoeffel says, repeating one of the more recent Democratic talking points. You start out with $1.6 trillion, then tack on $200 billion to make it retroactive to Jan. 1, as Bush has said he wants. Then you tack on another $400 billion in lost interest payments on the national debt. Then there’s another $200 billion in adjusting the alternative minimum tax. (This is a tax once added to make sure that wealthy people paid something. But it wasn’t inflation adjusted, and — especially with Bush’s proposed tax cut, it’s one that is now hitting middle-income folks in a way it wasn’t supposed to.)

“But Bush keeps saying, ‘No, it’s $1.6 trillion, $1.6 trillion, $1.6 trillion,’” Hoeffel says. “I think he’s signaling that he’s willing to compromise, to make it less expensive, to make adjustments down the road.”

Which may be one of the more fundamental points: As believers in government, Democrats are, in general, less inclined to throw out the baby with the bath water. And there seem to be a number of Democrats who actually want to get something accomplished with Bush. Not on the tax cut, which Hoeffel says he will almost definitely vote against in its present form, but on education.

“Just a few years ago, Republicans wanted to demolish the Department of Education,” Hoeffel says. “Bush is proposing 85 percent of what the DLC was proposing a year ago through [Sen. Joseph] Lieberman and [Rep.] Cal Dooley” — a California Democrat. “Bush’s plan is night and day to where Bob Dole was, and we’re aware of that.”

And yet … Democrats do point to opportunities where Bush has feet of clay. For all his praise of Bush’s political skills and his appreciation of the fact that Bush came to the Democratic retreat, Hoeffel says that he was “surprised that he was so ill-prepared on the issues.” It was clear to all, Hoeffel says, that Bush didn’t know anything about the latest debate about the census, and the use (and potential benefits and pratfalls) of statistical sampling. Worse, Bush didn’t seem to fully understand his executive order cutting off U.S. aid to international family planning agencies.

“I don’t think he’d understood what he’d done,” Hoeffel says. “He seemed to think that he’d cut off money to fund abortions overseas, when of course that was already illegal.”

Bush, of course, has yet to be asked about this matter: He hasn’t held a formal press conference as president. Which could be at least part of the reason why he’s doing so well and the Democrats aren’t.

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Jake Tapper is national correspondent for Salon.

Money talks, but voters talk back

In the first billion-dollar congressional campaign in history, money talked, but the voters talked back.

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Money talked on Nov. 3rd, in the first billion-dollar congressional election in history (when total spending by candidates, parties and independent groups is included). But in several key states — most notably Wisconsin, which reelected campaign-finance reform crusader Sen. Russ Feingold — the voters talked back. That’s the bottom line of the election returns.

Much has been made of the Democrats’ five-seat gain in the House of Representatives, but the real winner in Congress was the incumbent party. Ninety-eight percent of House incumbents won reelection, as did 90 percent in the Senate. And with just a few exceptions, the winners spent more money than the losers. In 94.9 percent of races in the House, the victors had the biggest war chest; in the Senate, 93.9 percent of the races were won by the top spender.

And the financial disparities were often huge. According to the Center for Responsive Politics, in more than 60 percent of the races in the House, one candidate outspent the other by more than 10-to-1. Together, the Republican and Democratic parties raised record amounts this year — $458 million reported so far, 55 percent more than in the last midterm election, in 1994. Some Senate candidates spent almost $20 million on their races, while a few House candidates topped $5 million. As with past elections, the biggest sources for this cash were a tiny elite mostly representing business interests: Wall Street, bankers, tobacco, insurance, real estate, oil and gas companies, telephone utilities, and so on.

With results like these, the last thing wealthy special interests and the politicians who do their bidding want to see is reforms that will open up the political process by reducing the role of big money in politics. Fueling public cynicism about the chances for change, they were able to block even the modest proposals for campaign finance reform that surfaced in the last Congress. But out in the states, there are numerous signs that opponents of reform are playing with fire.

The biggest news for reformers was the upset reelection of Wisconsin Sen. Feingold, co-sponsor of the McCain-Feingold reform legislation that was defeated in the Senate. Feingold chose to play by the rules and values embodied in his bill, despite the fact that it put him at a death-defying political disadvantage. He ran for reelection with a self-imposed limit on how much he would spend ($1 per voter in his state) and vocally refused efforts by his own party to spend soft money on his behalf. Republican Mitch McConnell, the leading opponent of campaign finance reform in the U.S. Senate, and the man who controlled the purse strings of the Republican Senatorial Campaign Committee, made no bones about trying to take his arch-nemesis out. “Don’t worry about campaign finance reform. Feingold’s going to be dead meat by Christmas,” he told another GOP senator.

As much as $2 million in soft money-funded ads savaging Feingold were dumped into the state. But the scrappy senator turned that fact into a winning issue, saying that the key question in the race was “whether we can really have a system where out-of-state interests can come in and essentially try to purchase a Senate seat.” In the last week of the campaign, undecided voters rejected the big-money assault, going for Feingold by more than 3-to-1, and he narrowly won reelection.

But Feingold’s wasn’t the only race where a candidate’s campaign finance profile made a difference. In North Carolina, Sen. Lauch Faircloth endured a barrage of media stories this summer detailing the favors he did for campaign contributors. Headlines like “Senator for Sale” fueled voter disenchantment with the Republican incumbent, who had stood with McConnell in voting against campaign finance reform. His Democratic opponent, John Edwards, a newcomer to politics who refused PAC contributions and attacked the role of special interests in campaigns, rolled to a surprise victory on Tuesday. And in the biggest surprise of election night, Reform Party gubernatorial candidate Jesse Ventura made much of his lack of support from moneyed interests, going so far as to run a TV commercial showing a Ventura pro wrestling doll beating up on “Evil Special Interest Man.” Ventura benefited from a Minnesota law giving him limited public financing while capping his opponents’ overall spending. He has said he favors full public financing of major-party candidates who take no private money.

Perhaps the best campaign finance reform news came from ballot initiative victories in Arizona and Massachusetts, which showed that, given a real opportunity to register their disgust with the status quo, voters support sweeping reform. By margins of 51 percent in Arizona, the home state of Barry Goldwater, and 66 percent in Massachusetts, citizens adopted “Clean Money, Clean Elections” proposals — voluntary campaign finance systems in which candidates who agree to take no or little private money and agree to spending limits receive full and equal amounts of public financing for their campaigns. Unlike more incremental reform proposals, these new laws will substantially block special interest influence, limit campaign spending, free candidates from the money chase and put voters back in the driver’s seat.

It’s important to note how broad the support for real reform runs. In both Arizona and Massachusetts, coalitions of Democrats and Republicans, liberals and conservatives, business people and labor leaders, came together to push for the Clean Money, Clean Election initiatives. Including Maine, which was first to enact a Clean Money system in 1996, and Vermont, whose legislature embraced it in 1997, there are now four states — large and small, east and west, liberal and conservative — that have embraced the idea that public officials should be elected with public funds, instead of being beholden to private, special interest donors.

Support for campaign reform also showed up in other ballot questions: in Florida, where voters reinforced the state’s existing system of public financing by putting it into the state constitution; in Suffolk County on Long Island, N.Y., where two-thirds of the voters backed a referendum that will give candidates who voluntarily abide by spending limits substantial public matching funds; and in Akron, Ohio, where religious groups championed a successful initiative to limit private contributions to candidates to $100 and to cap how much they can raise from outside the city.

No review of the impact of the campaign finance issue would be complete without noting Sen. McConnell’s monomaniacal opposition to any whiff of reform support within his own party — something that may have doomed two Republican Senate candidates. In Washington state, Linda Smith lost to incumbent Democrat Patty Murray, hindered by a lack of funds. Because Smith has been a vocal supporter of political reform as a member of the House of Representatives, she got no support from McConnell’s NRSC. And in South Carolina, where Bob Inglis narrowly lost to incumbent Democrat Fritz Hollings, there are reports that the NRSC again held back because McConnell was offended by Inglis’ principled refusal to seek PAC contributions.

All of these results show that the issue of campaign finance reform is alive and kicking. No more can it be said that no one has ever won or lost a political campaign because of their position on the issue. Nor can anyone still doubt the viability of Clean Money campaign finance reform. The new conventional wisdom must be that it is members of Congress — not campaign finance reformers — who are out of touch with the sentiments of voters.

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Ellen S. Miller is executive director of Public Campaign, a nonpartisan, nonprofit organization devoted to comprehensive campaign finance reform.

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