THE PLAN FOR GOP RECOVERY. The first step, as the Republican Party is learning, is to admit you have a problem. One thing is already clear: Recovery won’t be quick, easy, or painless, as National Journal’s Tim Alberta and Jim O’Sullivan report. There are no Band-Aids capable of closing the wounds opened by years of self-mutilating politics. The GOP faces complex problems that require comprehensive solutions. Read more
FILIBUSTER REFORM IS BOTH BIG AND SMALL. The changes to the filibuster that were approved overwhelmingly by the Senate Thursday would seem, at first blush, to be relatively small. Yes, the minority party will still be able to block a bill unless the majority party musters 60 votes to proceed. And yes, many liberals wanted to see reforms go further to speed up the legislative process. But for such a hidebound place, where any change comes hard, there is something to applaud. As Sen. Elizabeth Warren, D-Mass., tells The New York Times, “It’s some change in a Senate committed to no change. So that’s important.” Read more
KERRY’S TASK: ADDRESSING AL-QAIDA REBORN. In her dramatic testimony on Wednesday, outgoing Secretary of State Hillary Rodham Clinton appeared to concede, at long last, what Mitt Romney and many Republicans tried to argue during the 2012 presidential campaign: Al-Qaida is not close to being defeated. Quite the contrary, it has been reborn. National Journal’s Michael Hirsh writes that Sen. John Kerry, D-Mass., who is widely expected to sail through his confirmation process, will need to address these realities when he takes the helm. “Kerry said America had to ‘assert a new role in a world of increasing failed and failing states,” Hirsh writes. “ Yet as his outgoing predecessor admitted, there is as yet no strategy for that.” Read more
DEBT CEILING DEAL DIDN’T END THREATS TO ECONOMY. Pushing off the debt-ceiling battle until mid-May still poses major risks for the economy and may even heighten the severity of the economic impact, National Journal’s Nancy Cook reports. Prolonging the debate and putting it at the end of the spring’s fiscal-fight queue, after the sequester and the question of funding the government, only keeps investors and markets nervous for a longer period of time. Moreover, the idea of defaulting is scary because no one is quite sure exactly what would happen. It’s the no-man’s-land of fiscal policy. Read more
FRUSTRATED AIDES LEAVING CAPITOL HILL. An unusually large number of senior aides in the energy and environment policy space have left in the past few months. Among them are the chief energy adviser to House Majority Leader Eric Cantor, R-Va.; the senior energy aide to House Speaker John Boehner, R-Ohio; staff directors for both the Democratic chairman and the top Republican on the Senate Energy and Natural Resources Committee; and most of the Republican staff on the Senate Environment and Public Works Committee. Many of these departures are part of the natural churn brought on by changes in committee assignments and members’ retirements, and all the aides offer different reasons for leaving. But in interviews with National Journal’s Amy Harder, many of them cite the Hill’s partisanship and the constant political-campaign atmosphere. Read more
WITH TOUGH ROAD AHEAD FOR FEINSTEIN GUN BILL, MANCHIN IN TALKS WITH NRA. The assault weapons ban introduced Thursday by Sen. Dianne Feinstein, D-Calif., will have a tough time making its way through a Congress tied so thoroughly to the gun lobby, The New York Times reports. Majority Leader Harry Reid has already said he is skeptical of the bill. At the same time, Sen. Joe Manchin, D-W.Va., said Thursday he was working with the National Rifle Association on a bill to implement universal background checks, The Hill reports. Facing a tough 2014 reelection, Manchin is looking at ways to address the president’s agenda on gun violence without angering his constituents. However, the NRA has backed away from some of what Manchin proposed on background checks. Read more
BIPARTISAN SENATE GROUP TO PUSH HIGH-SKILL IMMIGRANT BILL. A group of Democratic and Republican senators plan to introduce a bill that would make it easier for certain types of immigrants who work in technology to gain visas, The Hill reports. The bill, co-sponsored by Sens. Orrin Hatch, R-Utah, Marco Rubio, R-Fla., Chris Coons, D-Del., and Amy Klobuchar, D-Minn., “proposes to increase the cap for H-1B visas to 115,000 from the current cap of 65,000,” writes The Hill. “It would also create a ‘market-based H-1B escalator’ that would allow for additional visas to be made available to foreign workers if the cap is hit early during a particular year.” Read more
CRAPO: CORDRAY APPOINTMENT ‘PREMATURE.’ Sen. Mike Crapo, R-Utah, the ranking member on the Banking Subcommittee on Securities, Insurance and Investment, lambasted President Obama for tapping Richard Cordray to serve as the head of the Consumer Financial Protection Bureau, saying that the bureau itself still needed to be restructured and noting that 44 Republican senators had signed a letter in 2011 vowing opposition to any nominee until changes to the bureau were made. “Until key structural changes are made to the bureau to ensure accountability and transparency, I will continue my opposition to any nominee for director,” Crapo said in a statement.THREE MONTHS AFTER SANDY, AID BILL SET FOR FINAL VOTE. Almost three months after Superstorm Sandy pounded the Northeast coast, lawmakers hope to complete an aid package next week for those affected. The Senate approved its own Sandy aid package Dec. 28, but House Speaker John Boehner unexpectedly pulled the bill from the House calendar and it was left unfinished when the 112th Congress adjourned for good. Last week, the House took the issue up again, passing a package of more than $50 billion in aid. The Senate will take up the bill on Monday. Read more
MARY JO WHITE FOR SEC CHAIR. In a Thursday ceremony, President Obama tapped attorney Mary Jo White to lead the Securities and Exchange Commission. White is known for her work as the U.S. attorney in Manhattan, where she pursued white-collar-crime and complex securities- and financial-fraud cases. Obama also renominated Richard Cordray to serve as the head of the Consumer Financial Protection Bureau. Cordray was promoted to the position last year with a recess appointment. In choosing White, the administration is signaling its plans to take a tougher stance with Wall Street, a response to liberal attacks that it has been too lenient with an industry that they argue brought the economy to its knees. Read more
EPA CHIEF CONFIRMATION FIGHT COULD TAKE CLIMATE CHANGE TO HILL. President Obama’s second Inaugural Address left no doubt about his desire to put climate change front and center in his second term. He’s likely to pursue his agenda through executive actions rather than legislation, at least initially. That could put the Environmental Protection Agency at the center of a political battle, as Senate Republicans use the process of confirming a new head of the agency as a chance to weigh in on or block what they see as regulatory overreach in pursuit of climate-change goals. Read more
GRANHOLM FOR LABOR SECRETARY? If President Obama is very concerned about income inequality, he should consider naming Jennifer Granholm as his next Labor secretary, argues National Journal's Jill Lawrence. The Current TV host and former two-term Michigan governor would be a highly symbolic choice, given that her Republican successor recently signed a law making Michigan — birthplace of the organized labor movement — a right-to-work state. She would also be a practical choice. It was during Granholm’s tenure that the auto industry, with Obama’s bailout, began its comeback. She is also favorably viewed in the labor community for looking to clean energy as a source of manufacturing jobs. Read more
KERRY: OBAMA’S DIPLOMAT. Over nearly three decades in the Senate and especially during the past four years of the Obama administration, Sen. John Kerry, D-Mass., has often played the role of the calm diplomat and the closer in negotiations. Now, he hopes to use that experience as the next secretary of State. Kerry will arrive at State with several advantages, including his close ties to the White House and a high profile as a former presidential candidate. “Kerry sees himself as a diplomat, someone who can engage in smart, effective diplomacy to get results,” Brookings Institution fellow Shadi Hamid said. “He will be comfortable in that negotiation role of sitting down with leaders and trying to hammer things out.” Read more
BID-RIGGING PROBE AT USAID. The Justice Department is looking into potential contract-rigging allegations at USAID, the agency that distributes foreign aid, the Associated Press reported. The investigation involves the general counsel at the agency and the deputy administrator, who may have interfered with an internal investigation in what is being described as a canceled contract. As the AP reports: “The original investigation focused on whether Lisa Gomer, USAID general counsel, may have ‘wired’ a contract last May so the winner of the solicitation would be the agency's retiring chief financial officer, David Ostermeyer.” But the AP notes that Deputy Administrator Donald Steinberg may have tried to interfere with USAID’s inspector general, an independent watchdog within the agency. Read more
KERRY HEARING FREE OF SPEED BUMPS. Sen. John Kerry, D-Mass., President Obama’s nominee to replace current Secretary of State Hillary Rodham Clinton, testified before the Senate Foreign Relations Committee at a confirmation hearing Thursday. Kerry, who had chaired that very committee the past four years, is not expected to face significant resistance in the confirmation process. And the hearing did nothing to suggest otherwise. Kerry expressed a “strength at home means strength abroad” approach to foreign policy, and added that foreign policy couldn’t be done “by drones and deployments alone.” A protester criticizing U.S. action in the Middle East briefly interrupted the proceedings, but Kerry remained unfazed, citing his early years in Washington during significant opposition to the Vietnam War. Read more
MALI REBELS SPLIT AFTER ‘PUNISHING’ AIRSTRIKES FROM FRENCH. A possible turning point occurred Thursday in the ongoing clash between French forces and Islamist rebel groups in northern Mali. After a round of “punishing” airstrikes, according to the Associated Press, one of the rebel groups indicated a willingness to negotiate an end to their siege and possibly even fight against their former allies. The conflict has become more notable in the U.S. since the White House admitted to providing military assistance to French forces and Secretary of State Hillary Rodham Clinton mentioned the region as a new hotbed for al-Qaida-linked extremist groups in her testimony before the Senate this week. Read more
U.N. TO INVESTIGATE U.S. DRONE PROGRAM’S LEGALITY. Arguments over the legality of the U.S. drone program have raged for years, and the United Nations will be the next to weigh in on the issue, reports Wired. The organization will investigate what “applicable legal framework” is used in targeted killings. Afghanistan is the only internationally recognized “conflict zone” out of several countries where drone strikes have occurred, and currently, the U.S. uses a legal premise for its drone program based on a 2001 act of Congress that is unrecognized by many other nations. Read more
POST- U.N. SANCTIONS, N. KOREA VOWS NUCLEAR TEST ‘TARGETED’ AT U.S. North Korea announced plans Thursday to launch a variety of satellites and long-range rockets, and to conduct a nuclear-weapons test “targeted” at the U.S., “the sworn enemy of the Korean people.” The statement came on the heels of a new round of United Nations sanctions and a U.N. condemnation of a Dec. 12 North Korean rocket launch. No timetable was given for the coming tests, which, if successful, would be the nation’s first nuclear test since leader Kim Jong-un came to power in December 2011 following the death of his father, Kim Jong-il. Read more
GOP PLOTS PATH BACK TO POWER. With President Obama’s second inauguration still ringing in their ears, Republican national party leaders are hunkering down for three days of soul-searching in Charlotte, N.C. The most obvious hurdle on the path back to power will be improving the party’s image among minorities, women and young voters, who constitute a growing share of the electorate and rejected GOP nominee Mitt Romney as out of date and out of touch. On Thursday, Newt Gingrich blasted Romney at the conference for his “47 percent” remarks that alienated large segments of the electorate. Read more
LAUTENBERG BASHES BOOKER’S PERFORMANCE. Days after Democratic Sen. Frank Lautenberg of New Jersey compared Newark Mayor Cory Booker to one of his disobedient children who needs a spanking, he again criticized the two-term mayor’s job performance. “He’s got a lot of work to do — a lot of work that should have been done and hasn’t been done,” Lautenberg told National Journal. He described Newark as a “city in desperate need of attention,” adding that “maybe if the mayor can solidify the fact that he wants to improve Newark by being there, things would be different. But he’s free to do as he wants to do.” Read more
CHRIS CHRISTIE WINS OVER MARK ZUCKERBERG. In a sign of New Jersey GOP Gov. Chris Christie’s strength heading into his 2013 reelection campaign, he has won over the founder of Facebook. Mark Zuckerberg will be holding a February fundraiser for the governor at his Palo Alto, Calif., house, Christie strategist Mike DuHaime confirmed to National Journal. “We have not asked for any help beyond the fundraiser at this point,” DuHaime wrote in an e-mail. “Governor Christie is very appreciative of the support.” Read more
FOR OBAMA, SOCIAL EQUALITY WILL COME EASY, ECONOMIC EQUALITY NOT SO MUCH. Equality was the North Star in President Obama’s Inaugural Address this week. But the speech defined the idea around two distinct poles, and his path to progress is much clearer on one than the other, writes NJ’s Ronald Brownstein. Obama argued that fidelity to America’s founding beliefs requires a widening circle of economic opportunity and social tolerance. On this point, he had the wind of history at his back. The process is often circuitous and, as Obama noted, fiercely contested, but America through its history has consistently razed legal barriers and eventually welcomed the contributions of groups once marginalized or even scorned. But the president’s prospects are much murkier on expanding economic opportunity and reversing inequality. Read more
THE WANING OF THE WAXMAN-BERMAN MACHINE. The path to power and political office in Southern California once ran through Reps. Howard Berman, D-Calif., and Henry Waxman, D-Calif., two liberal Los Angeles-area lawmakers who have been friends for half-a-century. In their heyday, the two dished out campaign cash, forged alliances, drew districts for friends (and themselves), and developed microtargeting techniques before a word for it even existed, as National Journal’s Shane Goldmacher reports. “When I was a kid, I remember reading and hearing about the Waxman-Berman machine and what a powerhouse they were in Democratic politics,” says recently retired GOP Rep. David Dreier, who had represented Southern California for 30 years in the House. Read more
KERRY GIVES NO HINTS ON KEYSTONE PERMIT. Sen. John Kerry, D-Mass., gave no indication of his intentions for the Keystone XL pipeline at his confirmation hearing for secretary of State on Thursday, Bloomberg Businessweek reported. The State Department must review the proposed pipeline because it crosses an international border and will decide whether to issue the project a permit this spring. “It will not be long before that comes across my desk, and I will make the appropriate judgments about it,” Kerry said at the hearing. Read more
CLIMATE, ENERGY WOULD BE KERRY PRIORITIES. Kerry did make clear that climate change and energy policy would be high priorities in his State Department, the Washington Post reported. In his opening statement, the Massachusetts senator, whose career has been marked by climate advocacy and support for renewable energy, referred to climate change as a “life-threatening” issue. In response to comments from Sen. John Barrasso, R-Wyo., arguing against strong environmental policies, Kerry said, “the solution to climate change is energy policy. You want to do business and do it well in America, we got to get into the energy race.” He also called the clean-energy industry “a job-creator.” Read more
COURT DECLINES TO REVIEW EPA CROSS-STATE AIR RULING. The U.S. Court of Appeals in Washington declined on Thursday a request by the Environmental Protection Agency to review an August ruling that struck down an agency regulation capping sulfur-dioxide emissions in 28 states, Bloomberg reported. The move lets stand the 2-1 decision that found EPA had overstepped its legal authority in issuing the regulation. Per the ruling, EPA will enforce an older rule for interstate pollution while it formulates an acceptable alternative to the regulation that has been struck down. Read more
PETROLEUM LOBBY ARM QUADRUPLES SPENDING. The American Fuel and Petrochemical Manufacturers spent $2 million in the last quarter of 2012, a fourfold increase over its fourth-quarter spending in 2011, The Hill reported on Thursday. The group has been busy lobbying on behalf of the proposed Keystone XL pipeline and in opposition to a mandate that requires the industry to blend billions of gallons of biofuel into its products, among other initiatives. Despite the lobby’s increased efforts, the EPA has rolled out a number of emissions rules the group had sought to block, according to The Hill. Read more
ECONOMY & BUDGET
ON GEITHNER’S LAST DAY, TALK OF ‘TRAGIC TENSION.’ It’s Timothy Geithner’s last day on the job, and in an interview with The New Republic, the outgoing Treasury Secretary reflects on his tenure, including attempts to chip away at financial reforms such as the Dodd-Frank Act, which he surmises: "does not have much political force now." He is also philosophical about the efforts of the government to avert a meltdown while at the same time punishing wrongdoers. “My own view was that it was going to be very hard, if not impossible, to design a financial rescue that was going to be effective in protecting all the innocent victims hit by the crisis and still satisfy the completely understandable public desire for justice and accountability," he said, adding: "Those things were in direct and tragic tension, never resolvable at that time." Read more
COULD LEW’S CITIGROUP BACKGROUND HURT HIM? Not much is known about Treasury Secretary nominee Jacob Lew’s time at Citigroup. There, as Chief Operating Officer, he oversaw some of the bank’s most toxic assets, also serving during the financial crisis, when the back accepted a massive taxpayer-financed bailout. Senate Republicans, already smarting from the tough line Lew has taken in budget negotiations, are ready to press him on his ties to Wall Street, The Washington Post reports. “The Treasury secretary can’t owe anyone on Wall Street any favors. He has to be independent from special interests and put taxpayers first,” Sen. Chuck Grassley, R-Iowa, said in a statement. He intendeds to question Lew about a $940,000 bonus he received just before the bank bailout. Read more
WHY NEW-HOME SALES NUMBERS ARE IMPORTANT. The new-home sales numbers are out at 10 a.m., and they will be a good read on just how well the economy is doing. As USA Today’s John Waggoner writes: “Why the focus on new homes? Because they require considerable labor to construct, which is good for the economy and the hard-hit construction sector. Rising new-home sales also mean more work for people in the raw materials and manufacturing sectors: It takes a heap of plumbing to make a house a home.” The consensus number for sales is 385,000, which would be the highest since April 2010, but some expect it to be higher. Earlier this week, the existing home sales report was a disappointment, though numbers were up for 2012 overall. Read more
COMMISSIONER WHO WROTE DODD-FRANK RULES TO RESIGN. Jill Sommers, a commissioner with the Commodity Futures Trading Commission, will be stepping down from her post at some point after the first quarter, the commission announced today. Sommers, one of two Republicans on the five-member commission, told Bloomberg News that she had been mulling the decision “for months,” and that her departure was not “abrupt.” As Bloomberg reports, “CFTC has spent more than two years writing Dodd-Frank Act rules to bolster oversight of the $639 trillion swaps market and the futures industry after a shortfall in customer funds at failed brokerage MF Global Holdings Ltd.” The agency is preparing final rules regarding trading platforms, after issuing rules on data reporting. Read more
MARCH FOR LIFE DESCENDS ON WASHINGTON. The annual March for Life will bring thousands of antiabortion activists to the city today in a rally on the National Mall and a demonstration on the steps of the Supreme Court. House Speaker John Boehner will address the crowd by video, and Sen. Rand Paul, R-Ky., and Reps. Diane Black, R-Tenn., and Chris Smith, R-N.J., will join former Sen. Rick Santorum, R-Pa., in speaking to the crowd at the noon rally.
KAISER: AMERICANS WANT EXCHANGES. A full 55 percent of the public, including majorities of Republicans and Democrats, say state-based health insurance exchanges should be a top priority for their state government, according to a survey conducted by the Kaiser Family Foundation, the Robert Wood Johnson Foundation, and the Harvard School of Public Health. “Governors are largely splitting along partisan lines on the exchanges, but the public is not. People like the idea,” said Drew Altman, President and CEO of the Kaiser Family Foundation. As of right now, just 18 states and the District of Columbia have decided to create their own exchange, and seven others will partner with the federal government for their exchange.
AHA REPORT HIGHLIGHTS ECONOMIC IMPACT OF HOSPITALS. A new report from the American Hospital Association estimates the economic impact of hospitals, noting that the health care sector has grown and added jobs, even in times of recession. Hospitals, according to the report, employ nearly 5.5 million people and are the second-largest source of private-sector jobs. They also spend more than $702 billion on goods and services from other businesses, a figure which leads the AHA to estimate every dollar spent by a hospital supports $2.30 of additional business activity.
PRICE TO COCHAIR HEALTH CAUCUS. Rep. Tom Price, R-Ga., will cochair the Congressional Health Care Caucus in the 113th Congress, according to Rep. Michael C. Burgess, R-Texas, the outgoing chairman. “As a fellow physician and Member of the Ways & Means and Budget committees, Dr. Price is an influential member of the House, always striving to develop policies to improve the health care system for the American people,” Burgess said in a release.
(YOU DON’T NEED TO KNOW. Former Rep. Tom Tancredo, R-Colo., may be done in Congress, but that joint he’s about to light isn’t to celebrate the end of his tenure. He’s just holding up his end of a bet. Tancredo — normally a staunch conservative force — was actually a proponent of Colorado’s referendum to legalize marijuana in the last election. So much so, in fact, that he appeared in a promotional film to support it. In it, Tancredo agreed to a bet that he would smoke pot if it passed (he didn’t think it would). But Tancredo is a man of his word; he told Fox News that he’ll be toking up soon. Read more)
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