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Tuesday, August 30, 2005 | 9:25 a.m. ET
From Elizabeth Wilner, Mark Murray and Huma Zaidi

First glance
With damage to the nation's oil production from Katrina only just beginning to be assessed, the White House yesterday got out in front of growing speculation that President Bush might decide to tap the Strategic Petroleum Reserve.  Energy Secretary Samuel Bodman said in a written statement that the Administration is waiting to see the extent of the damage to the oil supply, and that as early as "last week," they began considering whether or not to tap the SPR.

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Tapping the reserve, which Bodman had suggested earlier this summer might be necessary due to hurricane damage, would provide the Administration with a visible means of offering Americans some relief from high gas prices after the energy bill Bush signed into law before going on vacation contained incentives for conservation but didn't address current prices.  Still, there are questions about just how much real, immediate relief would come from tapping the SPR.  Analysts say that the reserve, which Bush ordered filled to capacity after September 11, contains enough oil to meet all US fuel needs for about a month -- but also that tapping it will not ease the bottleneck at refineries.

Today Bush makes remarks commemorating the 60th anniversary of V-J Day at a naval air station in San Diego at 12 noon.  He's also expected to ask Americans to show the same resolve they did during World War II in supporting the war in Iraq.  In Crawford today, Camp Casey will be dismantled, with press conferences marking the removal of the crosses, etc.  Tomorrow, NBC's Clint Houston reports, the Cindy Sheehan-inspired Bring Them Home Now Tour will launch three buses from Crawford, each carrying military and Gold Star families, veterans of the Iraq war, and veterans of previous wars.  The buses will take different routes across the country and converge in Washington on September 21 in time for an anti-war confab a few days later.

And today also brings a showdown at the National Press Club over John Roberts' nomination to the Supreme Court: The Alliance for Justice, one of the leading interest groups opposed to Roberts' nomination, will state the obvious by formally announcing their opposition at the club at 10:00 am.  The group also will release a 110-page report outlining their case against Roberts; details of the report are below.  Progress for America, the lead pro-Roberts 527 organization, will hold an event at the club at 12 noon to release their new TV ad and lay out the GOP's "Ginsburg precedent" argument -- i.e., basically that Roberts, like Clinton nominee Ginsburg, should be able to refrain from answering questions from the Judiciary Committee about what positions he'd take on certain issues that might come before the Court.

Katrina, oil and gas
Bloomberg has economists saying that the "jump in fuel prices caused by production and supply bottlenecks after Hurricane Katrina would do more to slow the U.S. economy than the demand-driven price increases of the past two years...  Even under the best of circumstances, where the price of crude hovers between $65 and $70 a barrel and then ends the year at about $60 a barrel, growth would be reduced by about a half percentage point in the year's last three months."  Also: "The dislocations may ripple well beyond fuel supplies.  More than a quarter of the nation's waterborne exports are shipped through Louisiana's five major ports.  The state is also the nation's largest handler of grain for export to world markets..."

Bloomberg also notes in an accompanying story on insurance estimates, "Insurers such as American International Group Inc., spared the worst of Hurricane Katrina, still face $16 billion of claims from what may prove the second most-expensive storm in U.S. history" after Andrew.

"Though damage" to US oil production "isn't yet known," the Wall Street Journal says, "experts believe it might be extensive and could conceivably cripple production for months.  Katrina was rated a Category 5 hurricane, with winds of 175 mph, as it swept through the gulf's most prolific offshore producing region, though it weakened as it hit land...  Hurricane damage is difficult to assess quickly."

The Washington Post says Bodman's suggestion that the Administration might tap the SPR "helped deflate some of the speculation that had pushed oil prices over $70 during the night in electronic trading...  But Fadel Gheit, an oil and gas analyst at Oppenheimer & Co., said the shock to oil and gasoline markets will come not from a disruption in the supply of crude, which a release from the reserve could alleviate, but from bottlenecks at refineries that turn it into gasoline."

The Financial Times says the "acting OPEC Secretary-General told an energy conference in Oslo on Tuesday that if economic fundamentals, rather than perceptions of shortages, dominated the oil markets, there could be price stability...  He also backed a proposal by Sheikh Ahmad al-Fahd al-Sabah, the OPEC President, on Monday, to raise output by 500,000 barrels per day at a meeting in September in an attempt to help cool oil prices."

USA Today says investors yesterday "were scooping up select oil refiners and insurance brokers poised to benefit from higher oil and insurance prices.  Meanwhile, they sold shares of oil refiners and casino operators with large operations in the area, in addition to insurers facing enormous claims.  While the storm caused significant damage, the influence on stocks was muted as estimates for damages were downgraded during the day."

The Los Angeles Times points out that Hawaii embarks on Thursday on "a radical experiment to cap gasoline prices, a move being keenly watched nationwide by legislators and consumer groups eager to rein in record fuel costs...  Lawmakers are hoping that the new system will curb price surges and spur competition among service station owners.  However, there already are signs that the new caps might not lower prices for island motorists - at least not immediately...  Gasoline price limits haven't been tried in this country since the early 1970s..."

The Houston Chronicle looks at the Bush family history in responding to natural disasters, noting that the current president has been far swifter than his father.

Roll Call reports on the Louisiana congressional delegation's readiness to act as soon as they're allowed back into the Katrina-ravaged area of the state.

More on the economy
More out of the big economic conference in Jackson Hole, WY: Bloomberg contemplates that the new Fed chief may have to nudge the Fed "toward greater openness to compensate for his biggest shortcoming: He won't be Alan Greenspan...  Participants said whoever takes the helm may need to earn credibility quickly by giving greater guidance on the Fed's price goals, strategy and forecasts."  The story lists the three "most likely" to succeed Greenspan as "R. Glenn Hubbard, 46, dean of Columbia Business School, Harvard University economist Martin Feldstein, 65, and current CEA Chairman Ben Bernanke, 51, a former Fed governor."

The folks at economic research firm International Strategy & Investment, in a memo to their investor clients, note two key recent developments in the economic landscape which have gone somewhat unnoticed: "First, we may be seeing an historic downshift in auto prices.  It appears that GM's one-time employee-pricing deals are morphing into permanent price cuts...  Second, Northwest mechanics," who are currently striking, "appear to be losing and other unions are bracing for the fallout.  This... could be an important loss for organized labor," the pro-investor analysts note, "and... one that doesn't have anything to do with outsourcing, i.e., it reflects domestic competition."

USA Today notes that Northwest "strikers are getting little support from the rest of organized labor, and no help from the other unions at Northwest.  It's not surprising that AMFA is mostly alone.  It has been a maverick within organized labor from its birth in 1960."

National security politics
The San Diego Union Tribune previews Bush's speech this morning and adds, "Secretary of Defense Donald Rumsfeld joined Bush for the San Diego leg of his trip...  Just steps from the grounds of the Hotel del Coronado, anti-war protesters stretched along the road, holding their candles" and signs.

Cindy Sheehan had an odd, little-noticed interview yesterday morning on NPR's Talk of the Nation.  When asked about her earlier meeting with President Bush, she said, "Do we have to talk about this?...  I have two minutes..."  Hearing Sheehan say she had "two minutes," the interviewer noted that "we thought we had more time with you today."  Sheehan responded, "Hello?  I didn't hear your question?"  And then said shortly afterward: "I have to go now, thank you."  After she hung up, the interviewer explained to listeners that Talk of the Nation had arranged to speak with Sheehan for the whole hour, and he apologized for the interview being cut short.

Bush offered some rare comments on illegal immigration during his Medicare events yesterday in Arizona and California.  The Washington Post reports that in Arizona, he "defended his administration's efforts to control the nearby border with Mexico after a surge of criticism from across the political spectrum," and that he promised "residents an increasingly robust federal campaign that will deploy more agents and provide more detention space."  In California, Bush also "drew strong applause in Rancho Cucamonga when he vowed to enforce border control."

The Washington Times notes that Bush "did not mention his guest-worker proposal that would allow millions of illegal aliens to stay in the United States...  Mr. Bush plans a push on his second-term agenda priorities next month, including immigration.  His guest-worker proposal would allow as many as 11 million illegal aliens to hold jobs Americans won't take and apply for legal entrance into the United States while remaining in the country.  But the president is considering... limiting guest-worker visas to those illegal aliens who came to the United States before February 2004.  Those who arrived later would be deported."

Bush's comments "were an apparent response to some state officials and conservatives in his own party who say the administration has failed to adequately address human trafficking from Mexico into the United States," says the Los Angeles Times -- which also notices GOP Gov. Arnold Schwarzenegger's absence from Bush's event today in California due to what Schwarzenegger's office said was a scheduling conflict: he's meeting with Los Angeles Mayor Antonio Villaraigosa.  "Still, Schwarzenegger opted to meet a Democratic mayor rather than a president from his own party."

More on the Bush agenda
The New York Times notes that Bush, for the first time in weeks, mentioned Social Security reform during his speech yesterday in Arizona.

With school starting, the Wall Street Journal wonders whether "the education dividend President Bush hoped to bequeath his party is gone for good...  Today the president's signal education achievement, the No Child Left Behind Act, is mired in controversy across the political spectrum.  Democratic-leaning 'blue states' and Republican-leaning 'red states' are both complaining -- the former claiming inadequate funding and the latter resentful of what they consider federal mandates.  A senior White House official says Democrats have regained a significant edge in public regard on education."

In advance of their September 8 meeting, the Boston Globe's Canellos considers how the President's tax reform commission could deepen the divide red and blue states.

The Roberts nomination
As we've suggested before, Democrats are split over the Roberts nomination in the same way they're split over Iraq, with interest groups and activists sounding much more strident and oppositional than many of the party's comparably cautious lawmakers.  A string of events planned by the anti-Roberts groups this week might be almost as much about reaching out to Democratic Senate Judiciary panelists as it is about outlining opposition to the nominee.  One source involved in organizing interest group opposition to Roberts worries that the short period of time between the hearings and Judiciary Committee vote -- the vote is expected to happen the week after the hearings wrap up -- won't leave ample time to try to educate and lobby Democratic Judiciary members.

The committee's ranking member, Sen. Patrick Leahy (D), met with Roberts for the second time yesterday.  At the press avail afterward, NBC's Mike Viqueira reports, Leahy maintained he hasn't decided how he will vote on the confirmation, but also said that anyone who ultimately votes in Roberts' favor "has the duty to present why people should not be afraid of Judge Roberts" as a conservative.  In previous, more severe comments, Leahy had charged that Roberts had "radical" views.

Asked what kind of pressure he might be feeling from liberal interests, Leahy replied, "I'm a Vermonter.  The only interest I serve is Vermont.  I am always taking positions that might upset people on either the left or the right."  He then noted, to laughter among the press, that his opponent "got over 20% last time."

Leahy also said he wants to know what Roberts thinks about a Justice Department memo regarding torture of detainees held in US military prisons, Viqueira reports.  And he again noted the missing documents from Roberts' time in the Reagan Administration, which are believed to contain detail on Roberts' position on affirmative action.  Leahy said the White House has offered to supply their notes on the missing records, but that that isn't good enough.

As mentioned above, the anti-Roberts Alliance for Justice will release a "pre-hearing report" at their presser today.  The report runs 110 pages and was written by a team of a dozen lawyers, some of whom took leaves of absence from their practices to work with the group, Alliance spokesperson Julie Bernstein tells First Read.  The event is the first of a series by Roberts’ critics: civil rights groups will hold a presser tomorrow, and law professors on Thursday.  As for next week, the source involved in organizing Roberts’ critics says that some groups are taking a wait-and-see attitude toward the hearings themselves, and will simply stay flexible enough to quickly respond to whatever comes out of those hearings each day.

The Alliance notes in the executive summary of its report that Roberts' professional qualifications "say nothing about his views on the law," and quotes Judiciary chair Arlen Specter (R) noting "the importance of judicial philosophy."  Roberts' relatively short record on the bench, the group argues, makes it "necessary to look to his service as a politically appointed legal advisor and policy-maker in the administrations of" Reagan and Bush 41.  And there, the group sees "common threads" allegedly showing that Roberts "holds a troublingly limited view of the federal government’s authority to enact key worker, civil rights and environmental safeguards and... of the vital role our courts and our government play in safeguarding individual rights, especially civil and women’s rights.  By contrast, he holds an expansive view of presidential power and law enforcement authority."

The latest Roberts document dump shows his support for "legislation permanently barring the use of employment quotas to redress discrimination and prohibiting the busing of students to foster the integration of schools...  Roberts is already on record as a critic of the" Equal Employment Opportunity Commission.  – Washington Post

The New York Times notes Roberts' criticism of the founder of Bob Jones University, who had charged that the Administration wasn’t supportive enough of a friend in an immigration dispute.  “‘The audacity of Jones's reply is truly remarkable, given the political costs this administration has incurred in promoting the interests of fundamental Christians in general and Bob Jones University in particular,’ Mr. Roberts wrote.  ‘A restrained reply to his petulant paranoia is attached for your review, telling Jones, in essence, to go soak his head.’”

The Wall Street Journal notes today that lawyers for a Saudi prisoner asked the federal appeals court in Washington "to throw out a ruling denying Geneva Conventions protection to Guantanamo Bay detainees because... Roberts voted on the case while privately pursuing a Supreme Court nomination with the White House."

Indicted lobbyist Jack Abramoff pleaded not guilty yesterday to federal charges of conspiracy and wire fraud stemming from his purchase of a Florida casino cruise line five years ago.  "A hearing Tuesday could set a schedule for trial."  The Florida case is separate from that being pursued by federal prosecutors in Washington.  – Washington Post

Kentucky Gov. Ernie Fletcher (R) yesterday issued a blanket pardon to current and former aides charged in an inquiry regarding whether state personnel law was broken because hiring decisions were based on politics rather than merit.   Fletcher said state Attorney General Greg D. Stumbo, a Democrat, “was carrying out a political vendetta, and compared most of the charges that have been brought to violations of fishing laws.”   - New York Times

2005 and 2006
(And 2008.)  Virginia Gov. Mark Warner (D) will announce today on WTOP that, as expected, he will forgo a challenge to GOP Sen. George Allen, which leaves both men (despite what Allen Senate aides say) to focus on boosting their respective 2008 prospects.  – Washington Post

The Richmond Times-Dispatch covers Sen. Joe Lieberman’s fundraiser with Virginia gubernatorial candidate Tim Kaine (D).   “Lieberman… described himself and Kaine as ‘independent Democrats'...  The Lieberman visit, coupled with new television advertising..., seemed intended to reinforce efforts by Kaine to burnish the moderate image he has worked to project since entering statewide politics in 2001.”

The Washington Times looks at how the national GOP is quietly backing liberal Republicans Jeanine Pirro and William Weld in their respective US Senate and gubernatorial campaigns in New York.  "...[A]cross the country, Republican state party chairmen are sounding big-tent themes for the New York candidates."

The New York Daily News reports that Pirro is expected to announce endorsements soon from Rudy Giuliani and George Pataki.

Harvard Pilgrim Health Care chief executive Charles Baker announced yesterday that he will not seek the GOP nomination for governor of Massachusetts, leaving Lt. Gov. Kerry Healey as the lone contender, reports the Boston Globe.  "Baker's decision marks a major shift in the political dynamics of the 2006 race and a setback for the Democrats, who had hoped for a divisive, resource-draining primary fight among Republicans."


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