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• Wednesday, May 3, 2006 | 2:00 p.m. ET
From Mark Murray and Huma Zaidi

  1. Other political news of note
    1. Animated Boehner: 'There's nothing complex about the Keystone Pipeline!'

      House Speaker John Boehner became animated Tuesday over the proposed Keystone Pipeline, castigating the Obama administration for not having approved the project yet.

    2. Budget deficits shrinking but set to grow after 2015
    3. Senate readies another volley on unemployment aid
    4. Obama faces Syria standstill
    5. Fluke files to run in California

Bush outlines an economic agenda
Addressing the American Council of Engineering Companies convention this morning, President Bush outlined an ambitious economic agenda for a White House in desperate need of a victory to rally the GOP base ahead of this year's midterm elections. While Bush said he would work with Democrats and Republicans to accomplish this agenda, he criticized Democrats for failing to do much to help the economy, calling them "pessimistic" and "consistently wrong" in their economic outlook and policies.

Bush called the economy "powerful, productive, and prosperous," although polls show that many Americans might disagree. But in order to sustain economic growth, he said, Congress must work together to complete a lengthy agenda that includes passing earmark reform, cutting unnecessary programs from the budget, passing medical-malpractice reform, approving the line item veto bill, and last (but certainly not least), extending the tax cuts. "The best way to reduce our deficit is to keep pro-growth economic policies" -- i.e., tax cuts -- "in place so the economy expands," Bush said. Democrats, of course, would point out that 1) the deficit has only grown in the wake of Bush's tax cuts; and 2) that Bill Clinton, who raised taxes in 1993, proved that there's another way to reduce the deficit.

• Wednesday, May 3, 2006 | 11:20 a.m. ET
From Mark Murray

Spinning Ohio
With the results from yesterday's Ohio primaries already in, the spin war between Democrats and Republicans has begun, especially over what will be a couple of the most competitive House races in November. Democrats celebrated the primary victories by congressional candidates Charlie Wilson (who will now face GOP candidate Chuck Blasdel) and Zack Space (who will square off against vulnerable GOP incumbent Bob Ney). "Now that the strongest candidates have emerged in Ohio, Democrats are 100 percent on offense," Democratic House campaign committee chair Rahm Emanuel said in a statement.

But Republicans were quick to argue that Democrats are the underdogs in these contests. The National Republican Congressional Committee distributed a memo this morning ridiculing Wilson's inability to acquire the 50 valid signatures needed to get on the ballot (which forced him to win as write-in candidate). Meanwhile, the Ney campaign released its own memo, contending that Space wasn't the Democrats' preferred candidate, and that he enters the general election at a financial disadvantage.

Yet these races and others (in Ohio and across the country) will likely be decided more by turnout and voter enthusiasm than by press releases; indeed, turnout was reportedly low in Ohio's competitive GOP gubernatorial primary -- an ominous sign for Republicans. According to the crosstabs in the latest NBC News/Wall Street Journal poll, 57% of Democrats and 59% of Kerry voters say they are extremely interested (registering a 10 on a 1-to-10 scale) in the November elections, compared with only 46% of Republicans and 47% of Bush voters who say this.

• Wednesday, May 3, 2006 | 9:25 a.m. ET
From Elizabeth Wilner, Mark Murray, Huma Zaidi and Holly Phillips

First glance
President Bush returns to a GOP talisman today, hoping that key committee chairmen, appropriators, and dissenters within his party's ranks on Capitol Hill will fall in line and that the base's heart will start beating faster. Bush gives a speech on taxes and spending at an American Council of Engineering Companies convention at 11:25 am. In his remarks, he may publicly nudge GOP lawmakers to close the deal on their agreement in principle to extend his tax cuts on most dividends and capital gains until 2010. The package would also temporarily spare 15 million middle-class Americans from the alternative minimum tax. Right now, a deal hinges upon an agreement on a second set of tax breaks.

The recent NBC/Wall Street Journal poll shows that among a list of issues currently up for consideration on Capitol Hill, extending the tax cuts ranks fairly low on people's priority lists for Congress: 39% said it's most important for Congress to ban earmarks before adjourning, while 32% said it's most important to pass immigration reform, and extending the tax cuts ranked a distant third at 10%. That said, when asked if they would favor or not favor extending the Bush tax cuts, 50% said they would favor it, with 29% of them strongly favoring it.

Bush also can be expected to repeat his call for line-item veto authority, for earmark reform, and for a $92 billion emergency supplemental bill from the Senate. Not coincidentally, the Senate today is expected to pass a bill that's considerably fatter than that, thanks to non-emergency spending projects. The House has already passed a $92 billion bill, and Bush has threatened to veto any legislation that hits his desk which exceeds that limit. Also today, House GOP leaders may struggle to pass a lobbying reform measure that would curb the very earmarks that are weighing down the supplemental.

House Speaker Dennis Hastert and Majority Leader John Boehner, in an unusually sharp written statement yesterday, charged that the Senate bill "represents a huge spending spree, but the big losers will be the American taxpayers stuck with the tab... The House used fiscal restraint and stayed within the President’s request for true emergency spending." (That said, the two were at odds on the proposed $100 gas tax rebate. Per NBC's Mike Viqueira, Boehner told reporters that the idea is "insulting." "Trying to satisfy voters with a $100 voucher is insulting," he said -- twice. Of his talks with constituents last weekend back in southern Ohio, he reports that they thought it was "stupid." Just minutes later, when asked for his own assessment of the rebate, Hastert said that he could be for it if it means getting the Arctic National Wildlife Refuge open for drilling.)

Not only have the White House and GOP Hill leaders decided that a return to the themes of tax cuts and fiscal responsibility will give them a boost in the midterm elections, but Bush has pledged to halve the deficit by the time he leaves office. One way to achieve that would be to cut entitlement spending, but the GOP-run Congress has rejected his call to cut Medicare spending in the midterm election year.

Later in the day, Bush takes part in a photo op with recipients of the 2005 Presidential Award for Excellence in Science and Mathematics Teaching, which sounds like it could turn into a chance for Bush to promote his competitiveness agenda, at 12:35 pm. And he meets with German Chancellor Angela Merkel at 5:10 pm.

Vice President Cheney is in Lithuania, the first stop of his tour of Eastern Europe.

And the Republican party got its second African-American nominee for governor of this cycle last night: Ken Blackwell of Ohio joins Lynn Swann of Pennsylvania. Abramoff-tainted GOP Rep. Bob Ney easily won his primary, but speculation persists that he may drop out of the race and allow his party to replace him with a cleaner, stronger nominee. Freshman Rep. Jean Schmidt (R) survived her primary challenge. National Democrats' preferred candidate in another targeted district won the party's nomination via a write-in campaign. But analysts will look beyond the horse-race results to turnout for any signs of fatigue among the GOP base as the NBC/Journal poll suggests that Democrats are more motivated to turn out this year.

It's the economy...
The New York Daily News says that “[t]ight petroleum supplies amid soaring demand could drive crude oil prices above $100 a barrel by this winter, energy experts warned yesterday. That could translate into gas prices of more than $5 a gallon at the pump and spike home heating oil an additional 30%, analysts said."

In the House, votes are expected today on a GOP bill that would put some teeth in the Federal Trade Commission's ability to investigate and punish those found guilty of gas price-gouging, as NBC's Mike Viqueira puts it. There's also a House Commerce Committee hearing on the prospect of "giving" the Administration the authority to raise CAFE standards for passenger cars. Several Senate Democrats and a group of farmers and business owners will hold a press conference at 11:00 am to "call for immediate help to Americans struggling with the ripple effect of high gas prices, and for a real plan to put America on a path toward energy independence," per the release.

Democratic leaders yesterday charged “that big oil companies are ‘raking in outrageous profits’ while transportation costs for the average family continue to rise. The average U.S. household with children will spend $3,343 on transportation fuel this year, up by $1,440 since 2001, according to a report issued by minority leaders Rep. Nancy Pelosi (Calif.) and Sen. Harry Reid (Nev.).” – New York Post

The Washington Times covers divisions within the GOP over all their various proposals to offer relief from high gas prices.

The Los Angeles Times notes that the $100 gas tax rebate "also failed to impress Edward P. Lazear, chairman of the president's Council of Economic Advisors, who" yesterday called it "problematic."

The Wall Street Journal, covering Lazear's first speech in his new job, says he "tackled two issues frequently cited by critics of the Bush administration’s economic record: wage growth and income inequality. The average weekly wage has risen under President Bush, but not quite as fast as inflation... Mr. Lazear... said wages will catch up to productivity gains in the months ahead, boosting average pay." He was "less optimistic on income inequality, which has steadily widened over the last two decades as income gains have risen for highly skilled workers but remained flat for those at the bottom."

Another mention for the "but" side of the Bush Administration's assertion that "the US economy is strong:" "Auto sales slumped in April... as the Big Three auto makers reported significant declines in the face of rising gasoline prices."

On the other hand, the Dow Jones Industrial Average hit yet another high.

More on the Bush/GOP agenda
Yesterday, GOP lawmakers agreed in principle "to a $70 billion package of tax cuts that, if enacted, would hand President George W. Bush a political victory to tout before the November mid-term elections... [C]ongressional aides said the tentative accord won't be signed until Senate Finance Committee Chairman Charles Grassley... and House Ways and Means Committee Chairman Bill Thomas... agree to details of a second tax measure that will include provisions removed from the first, including a research tax credit." The story notes, "The agreement in principle could collapse if lawmakers are unable to nail down how they will move the second tax measure." - Bloomberg

The Washington Post notes that the "compromise is sure to spark a new round of recriminations from Democrats, who say the Republican Party continues to favor wealthy investors over lower- and middle-income workers, without regard to a budget deficit that is expected to reach $370 billion this year."

The debate during a Senate Budget Committee hearing yesterday on the line-item veto suggested that opponents are balking at the prospect of giving the White House more authority over Congress.

Senate Judiciary Committee chair Arlen Specter says he plans to hold hearings next month to look into a Boston Globe report that Bush has issued over 750 signing statements to bypass laws. Specter "said he intends to call administration officials to explain and defend the president's claims of authority, as well to invite constitutional scholars to testify on whether Bush has overstepped the boundaries of his power."

Security politics
The Wall Street Journal points out that, "[g]iven the attention paid to earmarks, little Senate debate thus far has focused on the Iraq war funded in the" emergency supplemental bill.

House Majority Leader John Boehner wants a resolution on the floor that will allow extended debate on the war in Iraq, NBC's Viqueira reports. Although it's unclear what form the measure would take, Boehner appears to be talking about simply providing members with an opportunity to take a day or two to state their feelings on the war. The point wouldn't necessarily be to call for a specific course of action, Viq says, but to provide a jumping-off point for members to air their views. About 60 members, including the about a half-dozen Republicans, have already called for 17 hours of debate on the war, but Boehner says that initiative has nothing to do with what he's planning or why he's planning it. He did not provide a date for the debate, Viq says, but wasn't optimistic about having it before the Memorial Day recess.

The immigration debate
The Minutemen Project, which advocates tighter immigration controls, kicks off a coast-to-coast caravan in Los Angeles today; it's expected to wrap up in Washington on May 12.

A New York Times analysis notes that the immigrant-rights movement “showed on Monday that it could build an organization, mobilize hundreds of thousands of people across the country and wield economic power. But the protesters do not appear to have achieved their primary goal: changing votes in Congress.”

But, per the Sacramento Bee, “Republicans and Democrats began showing signs of give-and-take. Bush convened a special afternoon meeting with GOP leaders to discuss the next steps in reworking the nation's immigration policy, while Senate Minority Leader Harry Reid softened a position that had stymied lawmakers several weeks ago.”

The Washington Post reports on how state legislatures "around the nation are considering hundreds of proposals dealing with illegal immigration, reflecting the exasperation of many local officials with Congress's failure to contend with" undocumented workers. "The multistate approach... threatens to create a maze of laws and regulations."

Voters in Herndon, VA yesterday "unseated the mayor and two Town Council members who supported a bitterly debated day-labor center for immigrant workers in a contest that emerged as a mini-referendum on the turbulent national issue of illegal immigration." The proposed day-labor center drew national attention because it figured prominently in the Virginia governor's race last year and because of its proximity to Washington. – Washington Post

Disaster politics
First Lady Laura Bush is in Clamette, LA and Biloxi, MS today to promote a library recovery initiative.

The Times-Picayune has the details of Mayor Ray Nagin's new evacuation plan. His opponent in this month's mayoral election, Lt. Gov. Mitch Landrieu, charged that Nagin took too long to draw it up.

A new book on Hurricane Katrina by historian Douglas Brinkley, scheduled for release this month, slams Nagin's response during the disaster. "Brinkley's harshest critiques are saved for Nagin, whom he paints variously as fastidious, frightened, irresponsible, out of touch and, at times, unstable. Notably, the named sources for several unflattering anecdotes include two of Nagin's opponents in the April 22 mayoral primary, Lt. Gov. Mitch Landrieu and Audubon Nature Institute chief Ron Forman." Excerpts of the book will be released on Friday in Vanity Fair. – Times-Picayune

The AP previews the Administration's bird flu plan: “States, cities and businesses should not expect to be rescued by the federal government if a flu pandemic strikes, warns a draft of the latest national response plan, one already under fire from critics who say federal preparations are moving too slowly… A draft of the document… provides little new information on government preparations -- but instead offers an acknowledgment that even the most draconian steps would almost certainly fail to keep a flu pandemic from penetrating U.S. borders.”

The White House warns that the list of lobbyist Jack Abramoff's visits they're scheduled to release to a public watchdog group before May 10 may not be complete, reports the AP.

Louisville, KY businessman Vernon L. Jackson "is scheduled to plead guilty today to giving Rep. William J. Jefferson (D-La.) hundreds of thousands of dollars in bribes to promote his high-tech business ventures in Africa, according to court records and people familiar with the case... Jackson would become the second person to plead guilty in the inquiry of the New Orleans congressman. Jefferson, 58, has not been charged and has denied wrongdoing." – Washington Post

Two developing political scandals in New Mexico may, with help from the GOP, undercut Democratic Attorney General Patricia Madrid's challenge to vulnerable Rep. Heather Wilson (R). Madrid "is not directly implicated in either scandal," but "her role as the state’s top law enforcement official is under intense scrutiny in both matters. Republicans have charged that she did not act quickly enough or aggressively enough in either case."

Members of Congress are taking far fewer privately sponsored trips, USA Today notices.

The midterms
The Hill reports that House Democratic leaders "are planning to review their caucus rules to eliminate any ambiguities in issues of seniority and leadership" in case they win back the majority in November. "The possibility of returning to the majority... has some worried about problems that could arise in the transition to power."

The Republican National Committee state chairs' meeting is about to begin in Colorado Springs; RNC chair Ken Mehlman is en route. Democratic National Committee chair Howard Dean today addresses the American Jewish Committee’s 100th Annual Conference Luncheon.

The New York Times takes its turn looking at how Democrats are targeting several GOP-held House seats in the Northeast.

In Florida’s Senate race, embattled Katherine Harris (R) is up with her first statewide TV ad, in which she says: “There’s a big difference between Bill Nelson (D) and me. I never give up, and I never give in.”

The Senate race in New Jersey is beginning to heat up, as Republican Tom Kean Jr.'s campaign is up with a web ad blasting Sen. Bob Menendez (D) for grandstanding on gas prices ("Higher gas prices for us; headlines for Menendez"), while the Democratic Senate campaign committee has created a new Web site --- TooJuniorforJersey.com -- lampooning Kean's youth and his ties to Bush and Cheney.

In Ohio, with 89% of precincts reporting, Ken Blackwell defeated Jim Petro, 56%-43%, in the GOP gubernatorial primary, and will face Ted Strickland (D) in November. The Columbus Dispatch: “Ohioans will elect either the state’s first black [Blackwell] or first ordained minister [Strickland] as governor this fall.”

The Cleveland Plain Dealer: “Both winners have a lot more campaigning to do to inspire voters, if yesterday's turnout is any indication of interest in their candidacies. Only about a quarter of Ohio's 7.6 million registered voters were expected to vote.”

Meanwhile, Charlie Wilson won the Democratic primary -- as a write-in candidate -- to fill Strickland’s House seat. “In capturing more than 60 percent of the vote in a three-way race, Wilson vindicated himself after a nearly fatal mistake when he failed to secure the required 50 valid signatures to get on the primary ballot." Wilson "will face state Rep. Charles R. Blasdel … in what promises to be an extremely contentious and expensive general election campaign fight.” Democratic lawyer Zack Space won the right to challenge vulnerable Rep. Bob Ney (R). – Columbus Dispatch

After a campaign that turned nasty in its final days, Rep. Jean Schmidt defeated former Rep. Bob McEwen in her Republican primary. While McEwen's campaign conceded last night, the campaign plans on challenging results in one county. – Cincinnati Enquirer

And the debut of the "all-electronic election" yesterday was marred with problems, reports the Cleveland Plain Dealer. "Glitches with optical scan machines prevented the planned counting of 17,000 absentee ballots. Workers planned to begin hand-counting votes on the ballots at midnight and expected to be at it for hours. And because new touch-screen voting machines did not function properly at first in some polling locations, voters had to fill out paper ballots, which also were to be hand-counted early today."


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