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First Thoughts: A potential way out

A potential way out… But can conservatives accept it?... Marlin Stutzman quote suggests that will be an uphill effort… Stunt Men: Wednesday was all about manufactured outrage and PR stunts… Obama talks about the markets… Senate Republicans slam Cruz… Obama to speak on economy and budget debate in Maryland at 10:40 am ET… The states that have expanded Medicaid vs. the states that haven’t… And Wendy Davis officially announces her gubernatorial bid in Texas.

*** A potential way out: Here’s what we can report on last night’s Obama-Biden-Boehner-Pelosi-Reid-McConnell meeting at the White House: It was more informational than confrontational. President Obama reiterated his position that he isn’t negotiating over government operations or the debt ceiling, while House Speaker John Boehner explained his political position and why the House GOP is making the demands it is. But the meeting -- including the remarks afterward -- also hinted a potential way out of this budget standoff. “We sent four different proposals to Senate. They rejected all,” Boehner said. “They will NOT negotiate.” One way to look at that comment is to portray Democrats as the unreasonable side in this debate. But there’s another way to look at it -- Boehner is cautioning his House GOP conference that Democrats aren’t going to negotiate and there’s little more he can do. Then, in his interview on CNBC’s “Kudlow Report,” Senate Minority Leader Mitch McConnell blasted Obama and the Democrats, but he also emphasized that government spending has gone down due to the 2011 Budget Control Act, which included the sequester. “The Budget Control Act … has actually reduced government spending for the first time since the Korean War for two years in a row.”

House Speaker John Boehner leaves after a meeting with President Barack Obama October 2, 2013 at the White House in Washington, D.C. /

*** But can conservatives accept that way out? And then note what Nancy Pelosi and Harry Reid said after the White House meeting: Democrats have already agreed to the Republicans’ budget number. ”I don't know why they haven't accepted their own number,” Pelosi said. “We stood on steps to say we're making a firm offer that we will accept the 988 [figure]. Most of us don't like 988.” In other words, you could look at the comments from Boehner/McConnell/Reid/Pelosi as an agreement on this point: The status quo is a win for Republicans and conservatives. Government spending has been cut; deficit is going down; Democrats have agreed to the GOP’s spending number. But here’s the question: Can Boehner and GOP leaders sell that message to the base?

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*** “We have to get something out of this”: This is where Rep. Marlin Stutzman’s (R-IN) amazing and revealing quote comes into play. “We’re not going to be disrespected,” the Tea Party congressman said, per NBC's Frank Thorp. “We have to get something out of this. And I don’t know what that even is.” Let that quote sink: Stutzman is admitting that conservatives don’t even know what they want out of this fight. As we said yesterday, the deeper a hole you did, the harder it is to get out because suddenly you get this war mentality where you can’t fathom “surrendering” to the other side’s terms. And what Boehner seems to be almost BEGGING Democrats for is a fig leaf of something so that Republicans can get “something” out of this. If there is a “something” that Democrats MIGHT offer, keep an eye on the medical-device tax. It’s a way for Senate Democrats to recruit Senate Republicans to make a statement to House Republicans. Reid can say it is NOT connected to the shutdown, but they pass it as a stand-alone, send it to the House, and let Boehner spin it any way he wants to simply get the government open.

*** Stunt Men: The other thing that happened yesterday was all the manufactured outrage and P.R. stunts. RNC Chair Reince Priebus held a press conference outside the World War II Memorial saying that the RNC would cover the costs for keeping the memorial opening over the next 30 days. Republicans jumped all over a Harry Reid quote trying to make it sound like he didn’t want to help cancer patients when the actual video appears to disprove that. And that came after Democrats on Tuesday hit Republicans for neglecting to fund the NIH. Pretty cynical stuff all around. But here’s the thing about PR stunts: They help you win a news cycle, but they don’t help you win the bigger argument. And the side that’s manufacturing the most outrage and employing the most PR stunts is usually losing. Just ask the Romney campaign… By the way, guess who wasn’t talked about the Reid comments or the WWII memorial issues yesterday -- the six folks in the White House meeting last night.

*** Obama talks about the markets: In his interview with CNBC’s John Harwood, President Obama said something that caught our attention: He talked about the impact the budget standoff could have on the markets and then he took it to another level, almost goading the markets to react negatively. “I tend not to make judgments on the base of the stock market. Obviously, since I came into office, the stock market has done very well. The biggest concern that I have day to day, though, is how is this impacting middle-class families.” But Obama went on to say, “[W]hat we can say unequivocally at the moment is that Washington is having a negative impact on the lives of ordinary people. And that may manifest itself in terms of the stock market going down.” Finally, in direct response to the lack of reaction from Wall Street and whether they were reacting appropriately, the president said: “No, I think this time is different. I think they should be concerned. And I had a chance to speak to some of the financial industry who came down for their typical trip. And I told them that it is not unusual for Democrats and Republicans to disagree. That’s the way the founders designed our government. Democracy is messy. But when you have a situation in which a faction is willing potentially to default on U.S. government obligations then we are in trouble. And if they are willing to do it now (shutdown), then they’ll be willing to do it later (debt ceiling).” This is a dangerous game for the president to play here: he either is asking the stock market to react negatively or if they don’t, he’s showing the president has no sway over the markets. Is either a good position for the president to be in?

*** Senate Republicans slam Cruz: Remember when we told you that Senate Republicans were a potential weak link for the GOP in this budget standoff? Well, just look at these anonymous quotes from Senate Republicans about Ted Cruz and his role in this fight after a private GOP lunch. “It was very evident to everyone in the room that Cruz doesn’t have a strategy – he never had a strategy, and could never answer a question about what the end-game was,” said one senator who attended the meeting, per Politico. “I just wish the 35 House members that have bought the snake oil that was sold could witness what was witnessed today at lunch.” Another quote: “He kept trying to change the subject because he never could answer the question,” the senator said. “It’s pretty evident it’s never been about a strategy – it’s been about him. That’s unfortunate. I think he’s done our country a major disservice. I think he’s done Republicans a major disservice.” As we’ve said before, the Senate Republicans likely are going to end up being the ones to end this standoff. The question is when do enough of them decide enough is enough.

*** Other moving parts in the budget debate: President Obama delivers remarks at a construction company in Rockville, MD at 10:40 am ET to highlight the effects a shutdown and potential default could have on the U.S. economy, per the White House… MoveOn.org has launched a campaign, which includes a 30-second TV ad, demanding that House Republicans bring a clean funding bill to the floor… And the DNC has released highlights of news coverage that it believes portrays the GOP in a negative light in this budget debate.

*** The states that have expanded Medicaid: In another page out of our health-care explainer, today we look at which states have expanded Medicaid and which states are still considering it. The federal health-care law allows that states can expand eligibility for Medicaid for those making up to $15,800 a year individually or $32,500 for a family of four. But just 24 states and DC have decided to do so -- and take the millions of dollars provided by the federal government to do so. (States get 100% federal funding in the first three years, and 90% funding after that.) The states participating are: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, DC, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Dakota, Oregon, Rhode Island, Vermont, Washington, West Virginia. Meanwhile, four states are still considering it: Ohio, Pennsylvania, New Hampshire, and Tennessee.

*** And the states that haven’t: The New York Times takes a look at the states that have rejected Medicare expansion, saying they are home “to about half of the country’s population, but about 68 percent of poor, uninsured blacks and single mothers. About 60 percent of the country’s uninsured working poor are in those states. Among those excluded are about 435,000 cashiers, 341,000 cooks and 253,000 nurses’ aides. ‘The irony is that these states that are rejecting Medicaid expansion — many of them Southern — are the very places where the concentration of poverty and lack of health insurance are the most acute,’ said Dr. H. Jack Geiger, a founder of the community health center model. ‘It is their populations that have the highest burden of illness and costs to the entire health care system.’” The Times goes on to say, “The disproportionate impact on poor blacks introduces the prickly issue of race into the already politically charged atmosphere around the health care law. Race was rarely, if ever, mentioned in the state-level debates about the Medicaid expansion. But the issue courses just below the surface, civil rights leaders say, pointing to the pattern of exclusion.”

*** Netanyahu says don’t trust Rouhani; Kerry responds it would be “diplomatic malpractice” not to try: In an interview with NBC’s Andrea Mitchell, Israeli Prime Minister Netanyahu said that the West shouldn’t trust Iran’s new president, Rouhani, in negotiations over that country’s development of nuclear weapons. “It's one thing to say one thing. It's the other thing, what they do. And I look at what they do, not at what they say... I think there is a difference. And the difference is in style. And I've said that Ahmadinejad was a wolf in wolf's clothing. And Rouhani is a wolf in sheep's clothing. But it doesn't mean we should let him pull over-- pull-- the eyes-- or rather pull the wool over our eyes.” Secretary of State John Kerry reacted to Netanyahu’s comments, saying: “It would be diplomatic malpractice not to examine every possibility of whether you can achieve that before you ask people to take military action to prevent action.” 

*** Davis officially announces gubernatorial bid: Lastly, today is the day when Wendy Davis announces her gubernatorial bid in Texas. And Texas Right to Life has released radio ads (in both English and Spanish) hitting her on abortion. The question for Davis in this race is whether she can expand her narrative BEYOND abortion, especially given that Texas such a red state.

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