Economy & Budget

Lawmakers are engaged in a messaging war on top of the spending debate and Republicans may be losing that fight.

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The abortion issue could break up a budget deal, and how these lawmakers will vote could be the difference.

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Senate Minority Whip Jon Kyl (R-Ariz.) on Tuesday said a process should be agreed to in dealing with the estate tax before the Senate takes up future legislation. Read more...

House Oversight and Government Reform Committee ranking member Darrell Issa (R-Calif.) slammed on Tuesday President Obama's mid-year budget review for making "assumptions that defy logic as much as his spending defies gravity."

The administration announced today that it increased the projected budget deficit to $9 trillion over the next decade from $7.1 trillion and estimated unemployment would pass 10 percent.

The fifth-term Republican implied that the estimate could be even worse, accusing the White House of using faulty assumptions to draft its estimate.

"Adding insult to gimmickry, President Obama's budget continues to assume that Congressional Democrats will allow 'stimulus' pet projects to expire, that a government take-over of health care will be budget neutral and that the economy will return to a roaring 3.2 percent growth next year," Issa said in a release.

He also hit at the administration's economic policies, saying that the Obama administration "vastly underestimated every aspect of our financial crisis: from unemployment to deficits, from mythical 'jobs saved or created' to projected economic growth."

Cross-posted to the Twitter Room

Senate Majority Leader Harry Reid (D-Nev.) sent a letter to Transportation Secretary Ray LaHood encouraging his department to "expedite reimbursements" to auto dealers participating in the "Cash for Clunkers" rebate program in order to further stimulate car sales.

"This program has had a significant stimulative effect on the sale of cars in the U.S., and dealers have submitted hundreds of thousands of vouchers for processing," Reid wrote in the letter. "In order to capture a sale...dealers have been forced to effectively finance the CARS vouchers for buyers until the dealers are reimbursed by the federal government."

The Nevada Democrat warned that slow reimbursements could hurt sales at participating dealerships.

Reid also took to Twitter to publicize the announcement:

Sent a letter to Sec LaHood urging him to expedite reimbursements to auto dealers participating in Cash for Clunkers http://bit.ly/Ck4TC

Full text of the letter is below:

Dear Secretary LaHood:

I am writing to request that the Department of Transportation take additional steps to expedite reimbursements to U.S. automobile dealers for vouchers issued to consumers under the Car Allowance Rebate System (the "CARS" or "cash for clunkers" program).

As you well know, this program has had a significant stimulative effect on the sale of cars in the U.S., and dealers have submitted hundreds of thousands of vouchers for processing. In order to capture a sale but also make use of the CARS incentive, dealers have been forced to effectively finance the CARS vouchers for buyers until the dealers are reimbursed by the federal government, placing a strain on dealers' balance sheets that, if prolonged, could eventually offset some of the benefits of the program. Indeed, I was disappointed to learn of reports that many dealers are no longer participating in the program due to these concerns.

I recognize the CARS program's success perhaps has placed unexpected burdens on the Department, and I appreciate your decision earlier this week to increase the number of staff devoted to processing voucher submissions. I also appreciate your public remarks this week assuring dealers that properly submitted vouchers will be honored and appropriate notice provided to announce the termination of the CARS program, thus preventing the program from running out of money before all vouchers could be honored.

Notwithstanding these assurances, I believe that even more certainty must be provided to dealers who participate in the program to ensure its continued success. For example, the Department should consider implementing a policy providing that all properly submitted vouchers will be reimbursed within five business days, and continue adding staff and devoting resources as needed to meet this timeline. By adopting such a guideline, dealers will be more willing to place their capital at risk to carry the cost of CARS vouchers until reimbursement, and more dealers will continue participating in the program, thereby maximizing the program's objectives.

I appreciate your consideration of this matter and look forward to your response.

Sincerely,
Harry Reid (D-Nev.)

Cross-posted to the Twitter Room

A member of the White House Economic Recovery Advisory Board indicated that an economic recovery is just around the corner.

Laura Tyson, an adviser to President Barack Obama, said "we may have hit stability, we may be in the beginning of an upturn" on Saturday. Tyson cited the latest jobs report in making her remarks.

Tyson also said that more stimulus funds would be injected into the economy in the coming months.

Nobel-prize winning economist Paul Krugman added that the jobs report showed "It's quite possible, though not certain, that retrospectively, we'll say that the recession ended in July or August, maybe September," said in a separate interview with Bloomberg News.

The U.S. Labor Department reported last week that job losses amounted to 247,000 in July, less than the 320,000 jobs that economists expected to disappear.

In June, 443,000 Americans joined the ranks of the unemployed. The unemployment rate fell to 9.4 in July from 9.5 percent in June, the first time the figure declined in 15 months.

The Alaska state legislature will take up the last remnant of Sarah Palin's gubernatorial term on Monday; a measure overriding her veto of federal stimulus dollars directed toward the state.

Alaska Rep. Mike Hawker (R) told the Anchorage Daily News that he believes enough lawmakers will vote to strip the veto blocking stimulus money intended for energy cost relief. Seventy-five percent of legislators need to vote for the override to secure its passage.

Members of the legislature will vote in a special session Monday.

When she originally vetoed the funds, Palin argued that accepting the money would allow the federal government to compel Alaskan localities to adopt building codes.

Below are web videos of President Barack Obama and the Republican weekly address. This week, Virginia gubernatorial candidate Bob McDonnell spoke on behalf of the Republicans, highlighting his rising star in the party.

President Obama used his address to hit back at critics of healthcare reform legislation and re-take ownership of the debate. McDonnell said Obama's proposals on climate change, union card-check, and heat insurance reform will only lead to a plunge in unemployment.

Read The Hill's coverage of Obama and McDonnell's addresses.

President Obama:



McDonnell:

The National Republican Congressional Committee (NRCC) on Thursday called House Speaker Nancy Pelosi (D-Calif.) a "puppeteer" seeking to "pull Betsy Markey's strings on healthcare and defend failed economic policies."

Markey, a freshman Colorado representative, has three Republicans vying for her seat in 2010.

The NRCC highlighted remarks Markey gave in late June expressing concerns that healthcare spending will spiral out of control if Congress does not find a way to tamp down costs.

"As Pelosi ventures to Colorado, she will surely attempt to take control of Betsy Markey's strings and convince her to jump on board with the Democrats' plan to take over the healthcare industry," said an NRCC release.

On her visit to Colorado, Pelosi plans to tour a healthcare clinic that received federal stimulus dollars to create electronic medical records.

"It is obvious that Pelosi is using the stimulus as a pawn to direct attention away from dwindling support on healthcare," said NRCC Communications Director Ken Spain in the release.

"With 12,500 jobs lost in the state from May to June, Coloradans should now have even more significant concerns with trusting their healthcare with the likes of Nancy Pelosi and Betsy Markey," he added.

Sen. Claire McCaskill (D-Mo.) has cooled her once vigorous opposition to an extension for the money-starved "Cash for Clunkers" program, saying that she now considers the matter a "tough call."

"This is a tough call, but at least wanted to let eveyone (sic) know that I'm studying all of it and trying to make a decision that is not rushed, but thoughtful," McCaskill wrote on her blog Tuesday.

Last week, the centrist Democrat tweeted that she "will vote no on any extension of Cash for Clunkers program."

Now McCaskill has taken a more measured approach. She reached out members of the auto industry to discuss issues facing a prolonged version of the program. McCaskill tweeted late Tuesday night:

Still getting info on C4C. Phone calls to Mo car deaers today getting their view.Need to know how many deals are in the pipeline.

Also worried about inventories.Chrysler dealer today told me inventory low,& we could be pushing his customers to foreign if we extend.

Will push tomorrow for GM, Chrysler,& Ford available inventory,and if we extnd can progrm be closed down without penalizing dealer/consumer?

Of course the cash for clunkers program is popular, we're giving away money. My concerns are first, that we... http://tumblr.com/xbx2kx50y

The junior senator linked to the aforementioned blog post, saying "I realize all car sales, both foreign and domestic, are good for the economy, but I hate the idea that there may not be a level playing field for the next few weeks because of inventory issues."

Yesterday, Senate Majority Leader Harry Reid (D-Nev.) said that the upper chamber will extend the "Cash for Clunkers" program before recess commences over the weekend. Reid made his remarks after the Senate Democratic Caucus lunched with President Barack Obama.

Cross-posted to the Twitter Room