Economy & Budget

National Democrats are sending in the reinforcements for members of Congress who supported their agenda but who face tough reelection battles in 2010.

Organizing for America (OFA), the field arm for the Democratic National Committee, will air a series of radio ads promoting the decisions of vulnerable members of Congress who endorsed healthcare reform legislation and the stimulus package.

Some House Democrats supportive of President Obama's agenda, especially those who hail from swing districts, have faced hostile crowds at town hall meetings since August recess began.

"Thanks to the support of these members and others like them - we will reform the health insurance system in this country and make other critical policy changes to get our economy back on track," OFA director Mitch Stewart said in the release.

In a release issued on Tuesday, the DNC announced it will place health insurance reform ads in the districts of 19 House Democrats:

Rep. Steve Driehaus (Ohio)
Rep. Kathy Dahlkemper (Pa.)
Rep. Ann Kirkpatrick (Ariz.)
Rep. Gabrielle Giffords (Ariz.)
Rep. Jerry McNerney (Calif.)
Rep. Ed Perlmutter (Colo.)
Rep. Suzanne Kosmas (Fla.)
Rep. Alan Grayson (Fla.)
Rep. Tim Walz (Minn.)
Rep. Martin Heinrich (N.M.)
Rep. Dina Titus (Nev.)
Rep. Dan Maffei (N.Y.)
Rep. Eric Massa (N.Y.)
Rep. Mary Jo Kilroy (Ohio)
Rep. John Boccieri (Ohio)
Rep. Zack Space (Ohio)
Rep. Charlie Wilson (Ohio)
Rep. Glenn Nye (Va.)
Rep. Steve Kagen (Wisc.)

Of the 19 members, 15 appeared on the National Republican Congressional Committee's (NRCC) list of 70 targeted districts in the 2010 House elections. The only exceptions are Giffords, Perlmutter, Walz, and Wilson.

The featured ads are entitled "Standing Up" and tout the congressmen and women's support for President Obama's healthcare agenda and their vote allowing the renewal of the State Children's Health Insurance Program (SCHIP).

OFA also cut a series of ads called "To the Rescue" which will run in the districts of four congressmen who backed the stimulus package: Reps. Allen Boyd (Fla.), Travis Childers (Miss.), Ben Chandler (Ky.), and Earl Pomeroy. All but Boyd were included on the NRCC target list.

At least one Rust Belt lawmaker will not back an extension of the bankrupt "Cash for Clunkers" program in light of Congress' efforts to fast track an extension and additional funding for the auto voucher service.

Sen. Claire McCaskill (D-Mo.), who is a centrist Democrat, tweeted her opposition to the program's renewal on Thursday:

I will vote no on any extension of Cash for Clunkers program.

The junior senator did not state any reasons for her decision as of this post.

The House this morning introduced stand alone legislation that would allocate $2 billion from the stimulus package toward funding an extending "Cash for Clunkers."

After only six days of operation, the program burned through $1 billion of vouchers given to potential car buyers who seek to trade in their low mileage vehicles for more fuel efficient ones.

UPDATED [1:53pm]: McCaskill offered an explanation for her stance, tweeting Friday:

We simply cannot afford any more taxpayr $ to extend cash for clunkers. Idea was to prime the pump, not subsidize auto purchases forever.

We put a billion $$ in cash for clunker program.That's 250,000 cars. We weren't sure how long it would last,but a billion of your $ is alot.

Cross-posted to the Twitter Room

Florida Gov. Charlie Crist (R) said that the stimulus was working in his home state, bucking other national Republicans who have sharply criticized the measure. Crist, however, said that he did not anticipate the need for a second stimulus bill.

"It's pretty incredible that 26,000 teachers will continue to work for Florida's children because of these additional monies...And that's really the point. This is to help people, Crist told the Miami Herald, referring to thousands of teachers' jobs saved by federal stimulus funds.

''I don't anticipate the need for more. The numbers we've heard today are pretty significant," said Crist, denying the need for a second stimulus.

Crist welcomed stimulus funds when the bill first passed whereas other Republican governors, such as the embattled Mark Sanford (R-S.C.), threatened to refuse the funds.

Crist is running for an open Senate seat being vacated by Mel Martinez (R-Fla.) in 2010.

The National Republican Senatorial Committee backed the governor, a move that angered many conservatives who are putting their hopes behind former Florida House Speaker Marco Rubio (R). The 38-year-old is running as a conservative insurgent.

Crist raised dramatically outraised Rubio in the second quarter $3 million to $340,000. Rubio raised over $140,000 in small online contributions.

The independent Congressional Budget Office (CBO) said that President Obama's policies will do more to boost the economy over the next five years than current policies, but Obama's plans would do less to help the economy in the years after.

The president's policies would increase GDP by as much as 1 percent more than the baseline policy from 2010 to 2014. But the baseline policy would boost GDP more than Obama's proposals by anywhere from 0.3 percent to 1.9 percent from 2015 to 2019.

CBO Director Douglas Elmendorf, however, noted that the CBO's economic models aren't "well-suited" to projecting the effects of policy changes beyond five years.

The estimates came in a paper released Tuesday that slightly revised the budget office's deficit projections.

The deficit under Obama will reach $1.8 trillion this year and $1.4 trillion next year. It will fall to $633 billion in 2013, but will then rise in the years beyond, CBO's latest projections said. The CBO
said that the deficits over 10 years will add up to $9.1 trillion in debt, though that number is approximately $130 billion lower than the estimate the office gave in March.

Read the whole CBO study here.

President Obama outlining $17 billion in budget cuts, this morning, calling for a new era of fiscal accountability as his administration fills out the details of his budget proposal.

"We can no longer afford to spend as if deficits do not matter and waste is not our problem," the President said, taking an implicit shot at his predecessor. "We can no longer afford to leave the hard choices for the next budget, the next administration--or the next generation."

Obama defended his cuts against Republican critics, who argue that $17 billion is just a drop in the bucket.

"That's a lot of money, even by Washington standards," Obama said.

The administration released the details of its budget today, outlining how much should be spent on specific programs. The full budget can be found here.

Obama pointed to a number of specific programs that will head to the chopping bock, including a Department of Education office in Paris, the National Literacy Institute, a new engine for the Joint Strike Fighter, and a long-range radio navigation system.

"This system once made a lot of sense, before there were satellites to help us navigate," the President said.

As Republican accuse the President of runaway spending, Obama replied that his administration will pare back on spending by the end of his first term.

"[B]y the end of my first term we will cut the deficit in half," he said. "Over the next decade we'll bring non-defense discretionary spending to its lowest level as a share of Gross Domestic Product since 1962."

Chrysler will not pay back either the original government bailout loan nor the funds the government provided to maintain operations during bankruptcy proceeding.

One of the company's financial "assumptions" in its bankruptcy filing is that the government will forgive both the original $4 billion loan from the Bush administration, the $300 million fee from the loan and the latest installment of $3.2 billion that the Obama administration provided to prop up the company during bankruptcy.

From CNN Money:

An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans, though a portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.

"The reality now is that the face value [of the $4 billion bridge loan] will be written off in the bankruptcy process," said the official, who added that the 8% equity stake that Treasury will be receiving as part of the company's reorganization is meant to compensate taxpayers for the lost money.

"While we do not expect a recovery of these funds, we are comfortable that in the totality of the arrangement, the Treasury and the American taxpayer are being fairly compensated," said the official.

A leading credit union trade association came out against a compromise draft proposal on a controversial measure that would allow judges to rewrite the terms of home mortgages. Senate Democrats, led by Senate Majority Whip Dick Durbin (D-Illinois), have been trying to strike a deal with a handful of financial industry players, but the issue has been stalled in the upper chamber for more than a month. The policy, known as "cramdown" in the industry, is strongly opposed by major parts of the industry. The board of the National Association of Federal Credit Unions on Wednesday unanimously opposed the cramdown policy.

After the jump, read the letter that the association's president, Fred Becker, wrote to Durbin.

--Silla Brush

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Leaders of the Senate Finance Committee are using North Korea's nuclear test to press President Obama to move forward with a controversial trade agreement with South Korea.

The deal is opposed by some U.S. automakers and organized labor, and Obama has offered few signals that he intends to pick it up anytime soon.

Finance Chairman Max Baucus (D-Mont.) and ranking Republican Charles Grassley (Iowa) urged Obama to "begin the hard work of winning broad approval" of the deal in a letter dated Monday. They also offered their full support for the deal, while acknowledging that work still needed to be done to satisfy automakers and U.S. beef produces, who face restrictions on exports to South Korea.

Read the whole letter after the jump.

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Woops.

The White House just issued the following statement applauding the House and Senate for passing the president's $3.55 trillion budget. There's only one problem: The Senate hasn't voted yet, only the House has.

No, this is not a re-post from earlier. For the seventh time, Rep. Jeff Flake (R-AZ) has introduced a "privileged resolution" asking for an ethics investigation into the relationship between earmarks and campaign contributions.

The resolution makes specific reference to a "raided firm," leaving little doubt that Flake's target is the now-defunct PMA Group, an appropriations lobbying group with close ties to Rep. John Murtha (D-PA) that was raided by the FBI in February.

No sooner did the House vote to table the motion last night than Flake re-introduced the same resolution.

"It