updated 9/20/2005 10:14:52 AM ET 2005-09-20T14:14:52

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First glance
Hurricane relief, gas prices, Iraq -- and now ethics re-emerges as a potential problem for the Administration upon the first indictment of a Bush official for dealings with lobbyist Jack Abramoff.  David Safavian, who worked in the Administration until his abrupt resignation last week, was arrested yesterday on charges of making false statements and obstructing a federal probe into his dealings with Abramoff.  Safavian has been accused of concealing from investigators that Abramoff was seeking to do business with the government when Safavian, then a General Services Administration official, joined Abramoff on a golf trip to Scotland back in 2002.  Abramoff was also seeking Safavian's help in procuring 40 acres of federally controlled land for a private school Abramoff helped found.

  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

President Bush might expedite his own recovery from Hurricane Katrina by getting out in front of (New Orleans Mayor Ray Nagin and) Hurricane Rita.  Bush's already scheduled return to the Gulf Coast today now includes a briefing on Rita in New Orleans at 2:15 pm ET.  Prior to that, he meets with Gulfport, MS officials and business owners at 12 noon ET, and after the briefing, he visits a recovering New Orleans business at 3:20 pm ET.

Bush still can't get out in front of high gas prices, however, beyond loaning out oil from the Strategic Petroleum Reserve, which doesn't solve the nation's refinery issues.  The price of oil is now fluctuating according to Rita's course, shooting up yesterday in anticipation of the storm potentially wreaking further damage to Gulf Coast fuel production.

As we wrote last week upon the release of the new NBC/Wall Street Journal poll, hurricane relief and gas prices are two-thirds of the thorny trifecta confronting the White House, with Iraq being the other third.  Bush is seeking to make the case that a strong economy, bolstered by additional tax cuts and targeted deregulation, will pay for hurricane relief.  He argues that people are already paying too much for gas for him to raise taxes to fund the recovery.  But as long as gas prices remain high, how does Bush convince Americans that the economy is strong?  We saw from the poll that gas prices are weighing extremely heavily on the public's views on that front, not only ranking as their top concern but also causing a sharp increase in pessimism about the country's economic outlook over the next year.

Worth noting is that, per NBC/Journal pollster Bill McInturff, taxes and tax cuts are one issue which continues to unify Republicans at a time when the poll shows that more moderate Republicans are starting to peel away from Bush on Iraq.  Even Sen. John McCain (R), who is now proposing that the Medicare prescription-drug benefit be scrapped and replaced with something much leaner, as NBC's Ken Strickland reports below, says that rolling back the Bush tax cuts isn't necessary.  Democrats have yet to make a tax-cut rollback a rallying cry.

The Fed announces its decision on interest rates at 2:15 pm.  While there seems to be an unusual degree of debate among analysts, the betting favors another rate hike, which would be the Fed's 11th straight.  Analysts predict there will be serious scrutiny of the accompanying Fed statement, which is expected to contain new language.

Ethics
Jack Abramoff's reemergence with the indictment of David Safavian gets widespread coverage.  Choose your poison:
Bloomberg
Washington Post
New York Times
Dallas News

Hurricane economics
"Crude oil fell, dropping 1 percent in New York, as concern eased that Hurricane Rita would hit the key refining and production areas in Texas and Louisiana," Bloomberg reports this morning.  "Prices jumped 7 percent yesterday on concern the storm would pile more damage onto Hurricane Katrina's destruction in the Gulf of Mexico."

The Wall Street Journal on Rita: "Landfall on the Gulf Coast is expected by this weekend.  Some oil companies are preparing to shut down facilities and evacuate workers.  Analysts believe the storm could cause markets to gyrate all week.  The storm's approach is slowing efforts to fix infrastructure damaged by Katrina."

Another Journal story says the "Texas and western Louisiana coastlines endangered by Rita are home to 26% of U.S. refining capacity.  While that could lead the industry to shut down more capacity than was closed by Katrina, the outages aren't expected to last of long, as the facilities at risk are farther inland and on higher ground."

"AAA's daily survey showed a nationwide average of $2.805 Monday for a gallon of unleaded, down 8.2 cents over the weekend and lowest since $2.68 Sept. 1," says USA Today -- which also notes, "Those numbers could turn fast.  Frenzied traders bid up the price of oil $4.39 a barrel, to $67.39 at the close of New York trading.  Wholesale gasoline for delivery next month zoomed nearly 25 cents to about $2.03 a gallon.  Oil prices and, more immediately, wholesale gas prices determine what you pay at the pump...  Rita jitters might halt a further drop in retail gas prices rather than sending them zooming again."

Bloomberg also says that "anecdotal reports" from local and regional business leaders "will take on more significance at today's Fed meeting on interest rates because policy makers have little hard data on the impact of the country's worst natural disaster."

Hurricane politics: Spending
White House spokesperson Scott McClellan yesterday dismissed House GOP conservatives' call for a delay in the implementation of the new Medicare prescription-drug law in order to offset hurricane relief spending.  The Los Angeles Times reminds us that the bill passed the House "by only 5 votes after the Republican leadership kept voting open almost three extra hours to twist the arms of the reluctant rank and file."

NBC's Strickland reports that McCain is going further than House conservatives with an idea on how to offset the rising cost of relief -- by suggesting scrapping altogether the "broken entitlement program [that] isn't going to work" and replacing it with something much leaner.  "I believe we could eliminate that and come back with a very scaled back version of helping with prescriptions drugs for the truly needy," McCain said, noting that the existing program will cost $700 billion over 10 years.  And while acknowledging the country must pay "whatever it takes" to rebuild the Gulf states, McCain also believes there are tens of billions to be found in legislation laden with congressional pet projects: "Whack $25 billion dollars of pork out of the highway bill.  We could whack several billion dollars more out of the energy bill, but then that's not going to be enough."

That said, Strickland, notes, McCain doesn't think it's necessary to roll back Bush's tax cuts.  He also seemed doubtful that Congress would tighten its own fiscal belt, and said that for meaningful cuts to emerge from the Hill, the President must "demand it."

In the Q&A after his speech on Katrina and poverty before a Democratic audience yesterday, former Sen. John Edwards (D) said Bush has shown "no inclination to worry, in any way, about where money" to pay for Katrina relief efforts is going to come from.  Edwards: "Last Thursday, I heard no meaningful discussion from him or anybody about how he intends to pay for these things.  And so, I don't think we're gonna get -- from the White House -- any kind of leadership on this issue."  He also said that it is "impossible to believe that in this environment" -- with the Iraq war and Katrina -- that Congress would try to repeal the estate tax.

Hurricane Politics: The Bush agenda
First, the Administration lifted Davis-Bacon rules on prevailing wages.  Now the New York Times says the Labor Department has temporarily suspended government requirements that contractors working to rebuild the Gulf Coast have an affirmative actions plan.  “While employment lawyers said it was not clear how strong an impact the exemption would have, the move comes as President Bush has tried to address the perception of unfairness in the government's response to the hurricane.”  The Labor Department responds that the suspension lasts for only three months and is designed to reduce paperwork requirements in Katrina’s aftermath.

The results of the latest Gallup survey echo those of the NBC/Journal poll in showing that Bush's ratings on hurricane relief, Iraq and the economy have "dropped to his lowest yet...  Assessments of his personal qualities also fell: For the first time, a majority says he isn't a strong and decisive leader."  And: "The survey shows signs of friction between the two most pressing concerns on Bush's agenda: the Iraq war and Katrina recovery."  Bush's new Gallup job approval is 40%.

The Washington office of economic research firm ISI advises, "Presidential approval does matter to the policy outlook.  As a general rule (with lots of exceptions), Congress represents narrow constituencies and will thus produce more parochial outcomes, while presidents of either party will reflect the national interest...  Under one-party government, legislation still can pass, but it may reflect more of a maintenance agenda rather than major initiatives."

As Bush prepares to meet with his Social Security commission tomorrow and, presumably, tout his proposals to reform the program, Roll Call says that Senate leaders are doing little to quell a notion, floated" last week by the GOP House campaign committee chair, "that any measure offering personal investment accounts under the government’s retirement security program would be dead on arrival in the Senate."

NBC's Mike Viqueira reports that protesters in wheelchairs yesterday forcibly occupied the offices of several Hill leaders, rallying against the proposed $10 billion in Medicaid cuts planned for the fall, and worried about the effect of Katrina-related funding shortfalls on federal programs for the disabled.  Chanting, "I'd rather be arrested that die in a nursing home!" as they were led away by Capitol Police, members of the organization ADAPT found their way into the inner offices of House Speaker Dennis Hastert, Majority Leader Tom DeLay, Energy and Commerce chairman Joe Barton, and Senate Majority Leader Frist.  They also appeared outside the offices of House Minority Leader Pelosi and Senate Minority Leader Reid.  Arrests were made at the Barton and Frist offices, Viq reports.

The Alaska Wilderness League, MoveOn, and representatives of other non-profit groups hold a rally in Washington at 11:00 am to protest oil drilling in ANWR.

The AP says that "religious disaster-relief groups" are already lobbying Capitol Hill, "hoping the dramatic example of how they quickly got aid to Hurricane Katrina survivors... will build new momentum for President Bush's drive to expand federal funding for faith-based groups...  Critics are alarmed by this latest push, saying the work of churches after the natural disaster -- while heroic -- does not resolve the complex constitutional questions surrounding Mr. Bush's faith-based proposals.  But religious leaders contend that, with such overwhelming need, lawmakers must act quickly."

More hurricane politics
At the same time, the Los Angeles Times looks at how the Administration's hurricane response has affected Bush's ties to African-American clergy.  The apparent verdict: some damage, but possibly only temporary.  Some ministers and GOP conservatives "contend that the Katrina relief response, though tarnishing the GOP image in the short term, could foster a Republican-led battle against poverty that would give the party a list of new selling points for African American voters who have long viewed Democrats as the best advocates for the downtrodden."

On cue, the Hill Democratic leadership and African-American religious leaders hold a media avail in the Capitol at 10:50 am to talk about hurricane relief.

Rutgers political science professor Ross Baker writes in USA Today that "it is more than partisanship that has impeded Congress' ability to avert or probe causes of disasters.  The perverse arrangement of committees supervising agencies responsible for disaster relief also impairs the lawmakers.  [FEMA] and the Coast Guard have their operations monitored by two committees.  Fear on the part of congressional committee chairmen of losing control over federal agencies to other committees makes a mockery of accountability."

After Michael Brown's performance as FEMA chief kick-started a debate over the qualifications of some Bush appointees, the Washington Post front-pages a report that the Administration "is seeking to appoint a lawyer with little immigration or customs experience to head the troubled law enforcement agency that handles those issues," the US Immigration and Customs Enforcement agency, "prompting sharp criticism from" some quarters.  Former federal prosecutor Julie Myers just married Michael Chertoff's chief of staff and is the niece of the chairman of the joint chiefs.

NBC's Chris Donovan reports that former President Carter, who created FEMA in 1979 on the advice of the National Governors Association, told an audience at American University that he set out three specific conditions at the time: 1) that FEMA would be headed by a highly qualified professional with experience; 2) that it would remain completely independent, and not submerged in another department; and 3) that it would be adequately funded.  “All three of these have been violated in the past few years," Carter said yesterday.  He suggested that it was not time “to look back and blame,” but to correct the defects that he thinks have evolved.

The Washington Post says Kerry-Edwards' criticism of Bush yesterday echoed that of former President Clinton.  The Post notes that Kerry's critique of Bush was sharper, and that Kerry was the only one of the two to get a response from the Republican National Committee.

In an interview, Kerry told the Boston Globe that his "sadness" over Katrina and "frustration" over Iraq prompted him to make the speech.

In a story about Edwards' speech, nonpartisan political analyst Charlie Cook tells the Raleigh News & Observer that "the country's newfound focus on poverty in Katrina's aftermath makes Edwards look prescient with his campaign depiction of 'two Americas' divided into haves and have-nots."

SCOTUS politics
The New York Times writes that the White House is “reshuffling” its list to fill the O’Connor vacancy -- “with a new emphasis on finding someone who will hold up under the pressure of what is expected to be fierce confirmation battle."

The Hill reports on a new split within the GOP over John Roberts' careful testimony last week between "those on the right who communicate regularly with the White House" and those "whose view of Roberts was shaped by the recently completed hearings...  Though it is extremely unlikely that conservatives who are voicing concerns about Roberts behind the scenes would oppose his confirmation by the Senate, they are sending a message to President Bush that his next nominee to the Supreme Court should have a clear record and be unafraid to express boldly his or her beliefs."

The Hill does its version of the "tough decision faced by Senate Democrats running for president" when it comes to the Roberts vote.

The politics of national security
Bush nominated UN Ambassador John Bolton for real yesterday, seeking to extend his term beyond his recess appointment.

Again, bear in mind that Bush is looking for some foreign policy successes beyond Iraq.  The Boston Globe says the joint US-North Korea statement that North Korea would give up its nuclear weapons program "reflected a dramatic turnaround for the Bush administration, which had broken off the direct talks with North Korea begun by the Clinton administration when Bush came into office in 2001...  In a major concession in the agreement, for example, the United States agreed that North Korea has a right to peaceful nuclear energy -- something it fiercely criticized the Clinton administration for supporting in the 1990s."

The Washington Post says of the compromise, "For the Bush administration, analysts said, the agreement was welcome at a time when the war in Iraq has lost support at home and negotiations with Iran over its nuclear programs have sputtered.  In addition, the president's approval ratings are low in the wake of his administration's response to Hurricane Katrina."

Still, the AP reports that "North Korea said today that it would not dismantle its nuclear-weapons program until the United States first provides an atomic energy reactor, casting doubt on its commitment" to follow through on the deal.

2005 and 2006
Last week, we noted how Bush's sagging popularity might be affecting Doug Forrester (R) in New Jersey's gubernatorial race.  Could the same thing be happening in Virginia?  Per a new Mason-Dixon poll, Bush's job approval rating in the state has fallen to 42% -- down from 58% in 2004.  In addition, the survey shows just 7% suggesting that Bush's endorsement of Jerry Kilgore (R) makes it more likely that they will vote for Kilgore, while 18% say his endorsement makes it less likely they will vote for him.  Seventy-two percent say it makes no difference.  The nonpartisan Cook Political Report's Jennifer Duffy wonders if Bush's lower standing might impact GOP turnout in this race -- and future ones.  "If they can't get it done there [in Virginia], it doesn't bode well for a lot of other places in 2006."

In that Virginia race, the Richmond Times-Dispatch reports that Jerry Kilgore (R) is up with a new TV ad that hits Democrat Tim Kaine’s tenure as Richmond mayor.  “The 30-second spot, which surfaced over the weekend, is Kilgore's response to a commercial by Kaine - featuring a large knife slicing a brightly decorated cake - that depicts Kilgore as an enemy of public schools…  In contrast with the new ads by Kilgore and Kaine, independent H. Russell Potts Jr. has started airing a whimsical commercial to boost his name-recognition, one that features supporters banging on pots and pans.”

The Newark Star-Ledger, meanwhile, previews tonight’s first televised debate between Jon Corzine (D) and Doug Forrester (R) in the race for New Jersey governor.

And the New York Daily News writes that a new canvass of ballots in New York’s Democratic mayoral primary gave victor Fernando Ferrer 40.15% -- above the 40% threshold he needed to avoid a runoff.

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