A New Congress, Politics, Challenges and Opportunities

When the new Congress convenes this week the bipartisanship of December’s lame duck session will be a distant memory. President Barack Obama, Republicans and Democrats will enter into a new environment without the “luxury” of a deadline to force all parties to compromise for the good of the country. While there are some from across the political spectrum who believe the deals fashioned were not in the country’s best interest; nonetheless, the deals struck offer a glimmer of hope entering the new congressional season.

Challenges will begin immediately as the incoming House Republicans initiate a series of new rules designed to make the congressional process more transparent and to regularly have the Constitution read to emphasize the fact that the growth and reach of the Federal government has exceeded that which is allowed by the Constitution.

Additionally, Republicans plan to hold oversight hearings to force administration officials to appear before Congress and explain to Members and the public (the hearings will be aired live) how policies were developed and decisions made. The intent is to expose the administration to public scrutiny and prevent it from continuing to pursue its agenda.

The real battle will be over budget. An agreement still needs to be reached on the FY 2011 budget. This debate will be merged with the request to raise the debt ceiling to allow the government to continue to function. Raising the debt ceiling has never been an issue but it will be a major issue for the fiscal conservative wing of the Republican Party.

Republicans scored a major victory during the lame duck session in ensuring a continuing resolution was extended only to March 4. This strengthened their position to pursue budget cuts; however, the ensuing debate will generate enough fireworks to rival those displayed during the annual Fourth of July celebration. Veteran Republicans understand they need to be careful not to challenge the president so aggressively and without the willingness to compromise. There are incoming Republicans freshmen itching for a showdown with the president on the budget and some have arrived with the intent to shut down the government. That approach comes with the same risks realized by the party in its last showdown with a former Democratic President. In the 90s Republicans aggressively challenged former President Bill Clinton on the budget, forced a government shutdown and paid a heavy political price for it. The same could occur this year.

During the lame duck session Obama utilized the bully pulpit of the presidency very effectively to persuade members to pass the Bush era tax cuts, enact the START treaty and repeal “don’t ask, don’t tell”. Obama demonstrated, as former presidents Bill Clinton and Ronald Reagan demonstrated after the mid-term elections of 1994 and 1982 respectively, the president is most effective when he rises above the partisan fray and promotes issues and ideas which are more important than the politics surrounding them.

The country is neither as conservative as Tea Partiers would like nor as liberal as the left would prefer. Republicans must realize the election results were not a mandate to change the Obama policies of the last two years. The public mandate is to stop the partisan bickering so both parties can work together to solve our nation’s problems.

Hispanics True Winners of 2010 Census

Hispanics will prove to be the biggest winners when the full impact of the 2010 census is evaluated. Republicans clearly gained leverage when the results were announced as Red states had the largest population growth in the last decade. However, in most states the growth is a direct result of the rise in the Hispanic population.

Hispanics accounted for over 60 percent of the growth in Texas, Florida, California, Connecticut, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Nebraska, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island and West Virginia. Of these states Texas gained four congressional seats and Florida gained two seats. Other states gaining seats included Arizona, Georgia, Nevada, South Carolina, Utah and Washington. Even in states that lost seats the Hispanic population grew, for example, Hispanics in Illinois grew 90 percent. Other states losing seats included New York and Ohio (which lost two seats each), Iowa, Louisiana, Massachusetts, Missouri, Michigan, New Jersey and Pennsylvania which lost one seat each.

Clarissa Martinez De Castro, who works for the National Council of La Raza (a Hispanic civil rights group based in Washington, DC), was quoted in The Washington Post as being concerned with the public’s perception of Hispanics. She said 90 percent of the Hispanics counted were 18 years of age or younger and are United States citizens. As that group matures, they will become a potent political force in the country regardless of their party of choice. Their political affiliation of choice will likely be formed by their parents who voted overwhelmingly Democratic in the November 2010 election.

President Obama is expected to pursue comprehensive immigration reform which will meet firm opposition from Republicans, and some Democrats, in both chambers. House Republicans will address immigration as a jobs issue so as not to appear to be anti-Hispanic. Given the growth of the Hispanic community and its tendency to vote for Democrats, Republicans will be careful to not allow their short-term gains be negated in the future by initiatives perceived as anti-Hispanic. They could shoot themselves in the foot and relinquish their gains before the end of the decade.

Interesting Read

2010 Congress

Austerity is first order for Boehner's installation as House speaker
By Philip Rucker
The Washington Post

John Boehner's leadership style is 'anti-Pelosi'
By Richard E. Cohen
Politico

Two new rules will give Constitution a starring role in GOP-controlled House
By Philip Rucker and Krissah Thompson
The Washington Post

What Republicans have done -- and what they need to do
By Ed Hornick
CNN

Tea-party activists question if rebel political movement has changed for worse
By Amy Gardner
The Washington Post

Spending showdowns will test new Congress
By Charles Babington
The Associated Press

Life of the Party
By Deborah Solomon
The New York Times

One for the Books
By Ronald Brownstein
The National Journal

'The Wussification of America': Parting Shots From Gov. Ed Rendell on the NFL and More
By Jim O'Sullivan
National Journal

The Fix's 11 big questions for 2011
By Aaron Blake
The Washington Post

Incoming Congress girds for warfare
By Jonathan Allen
Politico

Mitch McConnell's iron grip slips
By Glenn Thrush & Manu Raju
Politico

Not such a lame-duck session: What Congress passed, Obama signed in week
CNN

Daughter says Newt Gingrich's 'serious' about 2012
By Jennifer Epstein
Politico

Housing and Community Development

Obama administration steps up monitoring of banks that miss TARP payments
By Zachary A. Goldfarb
The Washington Post

How a mortgage clearinghouse became a villain in the foreclosure mess
By Ariana Eunjung Cha and Steven Mufson
The Washington Post

A Push to Privatize Pennsylvania Liquor Stores
By Katherine Q. Seelye
The New York Times

In California, Few Signs of Transition
By Jennifer Medina
The New York Times

Wisconsin State Workers Fret, as G.O.P. Takes Over
By Monica Davey
The New York Times

Entrepreneurs Ask Santa for Loans, Lower Taxes
By Sarah E. Needleman
The Wall Street Journal

Immigration

Political Battle on Illegal Immigration Shifts to States
By Julia Preston
The New York Times

Immigration Overhaul Is Unlikely Without a Shift in Public Attitudes
By Peter Brown
The Wall Street Journal

Lamar Smith avoids hard line on immigration
By Carrie Budoff Brown
Politico

The GOP's census dilemma: Embrace immigration or gerrymander
By Edward Schumacher-Matos
The Washington Post

2010 Census

Behind Census Figures Showing Boom in Nevada, a Story of Bust
By Adam Nagourney
The New York Times

With census growth, Hispanic groups target redistricting to up political clout
By Krissah Thompson
The Washington Post

Census data realigns congressional districts in key political states
By Sandhya Somashekhar and Aaron Blake
The Washington Post

Census shows slowing US growth, brings GOP gains
By Hope Yen and Charles Babington
The Associated Press

Texas Hispanics set to challenge status quo in reapportionment
By David Mildenberg and Darrell Preston
Bloomberg News

Reapportionment winners and losers
By Aaron Blake
The Washington Post

Read more »

Republicans Flex Muscle in Lame-Duck Session

The congressional lame duck session will come to a close soon now that the legislation to extend various tax cuts including the Bush tax cuts and unemployment benefits has passed the House and will be signed by the president. The next step will be to approve a FY 2011 spending measure.

A lame duck session became necessary because the outgoing Congress did not pass any of the 12 appropriations bills that fund the government. However, that earlier passed CR expires at 12:01 a.m., Sunday, December 19th. Therefore, if Congress does not act pass a new funding measure by that date the federal government will be forced to shut down.

While there were critics of the lame duck session, many members of Congress argued that besides the CR, Congress had to use the session to pass an extension of unemployment benefits. Although states pay for the first 26 weeks of unemployment benefits, the federal government funds 34 to 53 weeks of "emergency benefits" and another 13 to 20 weeks of "extended benefits," thus allowing the long-term unemployed up to 99 weeks of benefits. Now that the measure has passed Congress can move on to completing the appropriations bill. Finding a compromise on the budget may prove a trickier task because any agreement will be tied to the politics of the November elections.

Because of the length of the discussion on the tax extensions, there is less time to debate and resolve differences for FY2011 budget. Time is on the side of the deficit hawks. The less time for a FY2011 debate, the more likely a short-term CR funding the government into January or February at the latest will be passed.

Congress has three options: pass a year-ling continuing resolution (CR), pass an omnibus bill which contains all 12 appropriations bills combined into one, or pass a short-term CR until the new Congress convenes in January.

The House passed a year-long CR and now the Senate must pass a bill which must then go to conference. The House bill keeps funding at the FY2010 level which is a cut in real dollars. The Senate tried to pass an omnibus bill with a slight increase in funding and approximately $8 billion in earmarks. Republicans prefer enacting a FY2011 spending bill that will only last through the end of January after they are in control of the House of Representatives. Republicans prefer to begin their charge to reduce Federal budget with current spending versus waiting for the FY 2012 budget. When they take control, Republicans are committed to changing the way appropriation bills are voted on in their chamber. They want to decide the budgets by agency versus bills grouped by committee jurisdiction.

If Republicans establish a new appropriations process, it will make it easier for Republicans to go after agencies they typically oppose like the departments of education, housing, Health and Human Services and the Environmental Protection Agency. It will create open warfare in the House and gridlock with the Senate. Democrats have no interest in changing the way the Senate operates. As a result, negotiations to agree on appropriations bills will be contentious and time-consuming. It will also make it harder for advocates to defend the programs administered by these departments. These programs will be under greater scrutiny and become more vulnerable during a time of economic distress.

Housing, education and other programs to benefit the needy have wide, but not deep support in Congress. Consequently, it is “easier” to justify cutting these programs than it is to cut funding for defense, veterans or agriculture subsidies.

When Pork Is Not a Pig

The desire of conservative activists in Congress to place a moratorium on earmarks has resulted in some interesting measures under consideration to ensure representatives are bringing home the bacon without being accused of “pork barrel” spending. House Republicans are discussing ways to redefine earmark spending to get around the ban singled for by the conservative wing of the party. Veterans Members of Congress are concerned that local projects will not be funded as a result.

As reported by Politico there is discussion underway to possibly exempt certain projects such as transportation and water. This will allow members to demonstrate to their constituents they are addressing pressing local needs. Even Tea Party leader Michele Bachman (R-MN) is against an outright ban. It is interesting how quickly the newcomers are conforming to the Washington way of doing business. The newcomers are quickly learning political rhetoric gives way to practical reality of politics after the election. It will be interesting to monitor this development next Congress.

The Spirit of the Deficit Commission’s Final Report Will Hover over Congress Next Year

In spite of the failure of the Deficit Reduction Commission to have a super majority approve the recommendations submitted to tackle the nation’s growing debt, the spotlight is now on congressional leaders to make the politically difficult decisions in the next session of identifying program cuts and tax increase to reduce the nation’s long-term debt.

The commission was three votes short of the majority needed to force Congress to act on its final recommendations which included cuts to popular initiatives like the mortgage deduction, defense programs, reductions in entitlement benefits and targeted tax increases.

The commission’s failure to secure 14 votes does little to minimize the impact their recommendations will have on funding issues the next Congress. Republicans campaigned on the promise they would control government spending and make the tough decisions necessary to reduce the Federal debt. The report stated unequivocally that drastic measure must be taken to address the nation’s current fiscal situation.

The Commission, co-chaired by former Republican Senator Alan Simpson (WY) and Erskine Bowles, the former Chief of Staff to President Bill Clinton, submitted its report with the belief that the nation must directly confront the real issues which must be addressed. They took their charge to heart and did not spare any program or department or allow sentimentality influence their recommendations. The recommendations included:

1. Enact tough discretionary spending caps and provide $200 billion in illustrative domestic and defense savings in 2015.

2. Pass tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.

3. Address the “Doc Fix” (a scheduled cut in Medicare payments to doctors) not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, and long-term measures to control health care cost growth.

4. Achieve mandatory savings from farm subsidies, military and civil service retirement.

5. Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.

The panel’s emphasis on identifying a range of cuts to federal programs will draw a microscope around congressional action as it affects the deficit. For example, MSNBC’s First Read reported the irony that the cost of the agreement between Obama and Republicans - extending the tax cuts for two years, extending unemployment benefits and the other tax cuts in the agreement – will cost approximately $1 trillion which is more than the costs of the stimulus (approximately $800 billion).

It begs the question: how serious are both parties in reducing the deficit?


Interesting Read

Omnibus includes $8B in earmarks
By Scott Wong
Politico

The GOP Strategic Advantage
By Bill Connelly
Crystal Ball

2012 hopefuls challenged by tax deal
By Alexander Burns
Politico

Oversight Panel Slams Home-Rescue Efforts
By Jim Tankersley
National Journal

The Stages of Political Grief
By Charlie Cook
National Journal

Just weeks after 2010 election, Republicans lining up for 2012 Senate races
By Chris Cillizza
The Washington Post

In Entrepreneurship We Trust
By Alan McCormick
Forbes Magazine

Redistricting Reform is Tough Task Every Time
By Tricia Miller
Roll Call

Census Figures to Be Released Soon
By Kyle Trygstad
Roll Call

Wooing Joe Lieberman for 2012
By Manu Raju
Politico

Straight Talk on Immigration
By Ruben Navarrette
Real Clear Politics

Unusual methods helped ICE break deportation record, e-mails and interviews show
By Andrew Becker
Center for Investigative Reporting

Incoming GOP freshmen rapidly embracing big-money fundraisers
By Dan Eggen
The Washington Post

A Whole New Name Game
By Ianthe Jeanne Dugan
The Wall Street Journal

Pension Woes Prompt GOP Move
By Michael Corkery
The Wall Street Journal

Maybe the government would earn more of our trust if it leveled with us more and invaded our privacy less.
By Matthew Dowd
The National Journal

What the Bowles-Simpson plan left out
By Robert J. Samuelson
The Washington Post

Newt Gingrich's inner circle
By Chris Cillizza
The Washington Post

Mike Huckabee wants some respect
By Jonathan Martin & Ben Smith
Politico

House Rule
Will John Boehner control the Tea Party Congress?
by Peter J. Boyer
The New Yorker

2012 Hopefuls Gave Big to 2010 Candidates
Donation Strategies Differ for Palin, Pawlenty, Romney
By Steve Peoples
Roll Call

Tea Partyers Shredded Fundraising Playbook
By Steve Peoples
Roll Call Staff

First, Admit You Have a Problem
By Charlie Cook
The National Journal

Read more »

Deficit Reduction Reports Hovers over Lame Duck Session

Amidst all of the drama within both parties – Tea Party versus establishment Republicans, liberals versus conservative/moderate Democrats, make no mistake the 800 pound gorilla settling in Washington is the draft report issued by the bipartisan National Commission on Fiscal Responsibility and Reform. President Barack Obama creates the commission to seek recommendations on ways to reduce Federal spending and control future deficits.

The Commission, co-chaired by Former Republican Senator Alan Simpson (WY) and Erskine Bowles, the former Chief of Staff to President Bill Clinton, submitted a preliminary report with five basic recommendations:

1. Enact tough discretionary spending caps and provide $200 billion in illustrative domestic and defense savings in 2015.

2. Pass tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.

3. Address the “Doc Fix” not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, and long-term measures to control health care cost growth.

4. Achieve mandatory savings from farm subsidies, military and civil service retirement.

5. Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.

In issuing the report, the co-chairs did not spare any program or department in the Federal government nor did the commission concern itself with the political ramifications of the recommendations made. For example, it calls for cuts to military, some paring down of the mortgage income deduction, some tax increases and measures to control Social Security benefits.

To no one surprise, it was met with bipartisan denunciation; however, both co-chairs stressed the importance of being honest with the measures needed to control Federal spending and future deficits. The current economic situation, the election results and this report is going to finally force the powers that be in Washington to confront the hard reality of what it will take to turn the nation’s financial situation around.

It is going to be interesting to watch the debate unfold on controlling federal spending. While Republican calls for reduced spending have been focused on domestic programs the truth is ALL federal spending must be curtailed to some degree to contain the spiraling deficits. Both parties are to blame for the deficit and both parties and now must agree to the pain required to fix it.

Housing Budget Unclear

Congress has returned for its lame duck session with a final decision on this year’s Federal budget still unclear. The debate over the future of the Bush tax cuts is generating the bulk of media attention; however, local providers of housing and community development programs still don’t know what their budget will be for next year. While there will be fireworks aplenty, expect Congress to reach an agreements on a number of issues including some type of extension of the Bush tax cuts and a temporary spending measure to keep the Federal government operating through the early part of 2011.

These programs will face an uphill fight next year securing any increases and will likely struggle to maintain current levels. Fiscal conservatives will seek cuts to domestic programs and will probably target public housing dollars. Vouchers will be affected as well; however, private landlords will carry enough sway to keep any cuts to a minimum. During downturns in the economy, landlords like participating in the voucher programs because of the certainty that the government will pay a large portion of the rent. When the economy improves some landlords may be less committed because of the higher rents they can secure in the open market.

Congressional Panel Urges Review of Factors Affecting Foreclosure Crisis

A congressional panel overlooking the mortgage irregularities in the foreclosure process is urging its colleague to review the situation closely to avoid greater damage to the financial markets. Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation states that financial institutions and securitization servicers should not proceed with foreclosures unless all of the proper documents are in order.

It has been found that banks are foreclosing properties without proper documentation casting doubts about the legitimacy of the actions. There is uncertainty over whether in some cases banks had the authority to foreclose. This has also raised questions over who has ownership of the loan and the property in question.

The panel calls on policymakers to monitor what is occurring and offered these recommendations:

• The Department of Treasury should closely monitor the impact of foreclosure irregularities.

• Treasury and the Federal Reserve should stress test banks to evaluate their ability to weather a crisis related to mortgage irregularities.

• Policymakers should evaluate system-wide consequences of documentation irregularities.

The panel is concerned that the implications of the confusion of foreclosures could reverberate to banks of all sizes. As disturbing as the potential implications of documentation irregularities may be for “too big to fail” banks, the consequences would not be limited to the largest banks in the market. Other concerns of the panel include not placing Fannie Mae and Freddie Mac at too much risk to underwrite these mortgages; homeowners losing confidence in the housing market; and, the public may lose faith in due process.

Interesting Reads

Housing and Community Development

GOP targets mortgage bailouts
By Sean Lengell
The Washington Times

Foreclosure takes toll on increasing number of children
By Dina El Boghdady
The Washington Post

Lame-Duck Game of Chicken
By David Broder
The Washington Post

Will Republicans Get Serious on Spending?
By Steve Chapman
The Chicago Tribune

Guns used to kill police officers: Where they come from and how they get in the hands of criminals
By Cheryl W. Thompson
The Washington Post

Politics

A Forecast That Obama Could Love
By Jeff Sommer
The New York Times

Obama Returns to an Unpredictable Congress
By Jackie Calmes and David M. Herszenhorn
The New York Times

Sober suggestions from Obama's debt commission
By David Broder
The Washington Post

Five myths about Sarah Palin
By Matthew Continetti
The Washington Post

The Palin Network
By Robert Draper
The New York Times Magazine

Political divide between coasts and Midwest deepening, midterm election analysis shows
By T.W. Farnam
The Washington Post

Romney, Weighing Run, Leans on State PACs
By Michael Luo
The New York Times

Murkowski victory a stinging rebuke to Palin and extreme partisans
By John P. Avlon
CNN Contributor

Junior Democrats in Senate seek to change the way chamber does business
By Shailagh Murray
The Washington Post

Truth or Consequences
By Evan Thomas
Newsweek

Read more »

On to the Next Round

The election is over and now both Republicans and Democrats will chart a course over the next two years with the intent to win the 2012 presidential elections. Since only one side can win the ultimate prize, the White House, drama will take center stage in Washington, DC. Here is what we know about the election:

The Republicans elected in both the House and Senate are more fiscally conservative than their predecessors and are chomping at the bit for a show down with President Barack Obama to reduce Federal spending. Republicans in both chambers are talking tough about cutting non-defense programs to the 2008 levels. Republicans have been soliciting recommendations from the public on which programs to cut. The site, America Speaking Out, allows citizens to recommend where they would like to see funding cut. The recommendations from citizens will only strengthen their resolve to reduce federal spending.

Republicans must assess how to incorporate these conservatives into a broader agenda which achieves substantive results. If they can accomplish that, they set the stage for their party presidential nominee to have a chance at victory in the 2012 presidential election. It will not be easy. Pursuing a balance budget agenda will be difficult for Republicans to accomplish if only domestic programs are under consideration for reduction. To truly reduce federal spending, there is a consensus that cuts to defense spending, Medicare and Social Security must be included. These are popular programs with strong voting constituencies who have historically punished politicians who broach cuts to these programs. However, some Republicans, such as Senator-elect Ron Paul (R-KY), have said those are on the table for discussion. This can become a dicey issue for Republicans to navigate and could be their Waterloo.

Republicans increased their numbers in the Senate to be major players in any legislative initiative up for discussion in that chamber. If consensus can’t be reached on issues in the Senate, gridlock will occur. Sen. Mitch McConnell (R-KY), Senate Minority Leader, has stated the Republicans number one agenda is to ensure Obama does not get reelected. That does set the stage for compromise; it only sharpens the ideological divide.

The remaining Democrats in the House and Senate are more liberal as a whole. Many of the party’s losses were in districts held by conservative Democrats. This reduces the number of “moderate” members willing to compromise with Republicans on issues. It also limits the number of Democrats Republicans can target for support on issues such as reducing federal spending. We can expect Democrats to now become the united opposition Republicans were over the last two years.

Republicans gained enough governor seats and captured state legislatures to reshape the future congressional map, increase the likelihood Republicans will maintain their current numbers in Congress and make the president’s road to reelection a bumpier one. Governors are heavily involved in the redistricting process in most states. Expect future Congress’ to be more conservative. Additionally, in controlling the political operations in their state, Republican governors can create structural barriers to deliver benefits to voters and campaign effectively. The changing demographics in many states also illustrate the difficult path Obama must follow to get reelected. States Obama carried in 2008 stand to lose seven seats in the House meaning there will be fewer electoral votes available in those states.

What does this mean?

Legislative action will be the exception while gridlock will be the rule. The political and philosophical make up of each party in Congress creates a bad mix for compromise. Tea Party conservatives are adamant about reducing federal spending and are willing to buck the party leadership to accomplish that goal. They are equally adamant about not compromising with Obama. Any sign of compromise by the Republican leadership will be met with revolt from these individuals. The House Republican leadership has more leeway to not compromise; however, Republicans can’t be viewed by the voters as obstructionist. They need substantive accomplishments to have any credibility and sustain momentum going into the 2012 election. The Senate is the chamber where compromise must be reached but it is unlikely either party will be able to reach consensus on fiscal issues. With all eyes focused on the 2012 presidential election, the ability and/or failure to compromise is risky for both parties.

Funding for existing programs will be reduced or eliminated. Funding for new initiatives is probably unrealistic unless it enjoys strong bipartisan support. The election results demonstrated the American public is not supportive of increased federal funding for new initiatives when the economy is faulting, jobs are being lost and homes are being foreclosed. Any initiative undertaken must focus on economic growth and will probably come at the expense of other programs. President Obama’s support of a three-year freeze on domestic spending and his willingness to seek further cuts leaves little room for negotiation if defense, Social Security and Medicare are not on the table. Even if they are included, other programs will bear a disproportionate burden of cuts due to the popularity of the big three program.

Expect an increase in demand for services provided by the government, nonprofits, churches and other private groups. Until the economy improves the demand for services will increase with fewer resources to provide those services. More people will need assistance to offset long-term job loss, foreclosure, underemployment, health care needs and other unforeseen situations. When Obama took office most economic experts did not expect the economy to turn around until 2012 at the earliest. But when the economy does improve a combination factors will likely keep wages down. First, fewer jobs will be available. As a result, it will continue to be a buyer’s market. In other words, there will be more workers than the number of available jobs. Older workers who lost their retirement money need to remain in the workforce for an extended period of time. Second, the level of internet purchasing will reduce the need for retail employment which is typically the entry point for young and low-skilled workers and increasing a source of income for the elderly. Third, housing prices will remain deflated reducing the principle vehicle used to create wealth in this country.


What can be done in the interim?

Organizations dependent on government and private funding will need to reevaluate its operations and make hard decisions about structure and scope of services. These groups must decide if portions of its work should continue as is, be consolidated with another program or be eliminated. For nonprofits, in particular, this will be a difficult task. Nonprofits are mission driven; however, economic pressures will force them to make these choices. Demands will increase while available revenue will probably continue to decrease.

The fundraising model currently employed by non-profits in particular needs to be revisited. During a time of fiscal austerity, groups which can demonstrate tangible results will increase the group’s chances of securing support from funders. It will be critical for nonprofits to work with existing funding sources to identify ways in which it can remain attractive to private funders. Nonprofits and public entities that can successfully demonstrate its recipients, or clients, are achieving self-sufficiency as a result of its programs will prove to be more successful in the future.

Look for funding formulas for state and local governments to be revisited as well. The Census will cause the government to revisit how funds are distributed. Deeper targeting of the resources meant to low and moderate income households could be both good and bad to entities serving these households. Changes to funding formulas could create strange bedfellows in certain parts of the country.

Interesting Read

For Obama, the daunting challenges of 2012 start at once
After a tough midterm election, the president must focus on righting the economy and recovering the voting coalition he has lost if he hopes to avoid becoming a one-term president.
By Peter Nicholas and Christi Parsons,
Los Angeles Times

Republicans prepare to take power
By Jake Sherman & Richard E. Cohen
Politico

The Republican Landslide
By Fred Barnes
The Weekly Standard

Fasten Your Seat Belts: Campaign 2012 Is Here
By Jim O'Sullivan
National Journal

Why? Why? Why?
Was it a referendum? A plunge after a surge? A search for political balance? Yep.
By Charlie Cook
National Journal

Wave gives GOP upper hand in drawing election map
GOP enjoys big gains in Great Lakes region as redistricting begins
By Tom Curry
MSNBC

Republicans signal a hard-line stance after election success
By Tom Cohen
CNN

Hispanics emerge as key 2012 wild card
By Ben Smith & Carrie Budoff Brown
Politico

The Mama Grizzly Scorecard
by Shushannah Walshe
The Daily Beast

Republicans tear up President Obama's map
By Ben Smith & Jonathan Martin
Politico

People

The rise and fall of Nancy Pelosi
By John Bresnahan
Politico

John Boehner inherits troubled House
By Richard E. Cohen
Politico

Mitch McConnell's power expands greatly in minority
By Manu Raju
Politico

5 myths about George W. Bush
By Julian Zelizer
The Washington Post

Don't underestimate Palin for 2012 run
By Ed Rollins
CNN

DeMint: 'I Think I've Found My Role'
National Journal

Bachmann to Seek GOP Conference Chair
The Minnesota Republican and tea party favorite says she will challenge the leadership's choice.
By Billy House
National Journal

Read more »

One Chapter Ends, Another Begins

The drama surrounding the current election season will come to a close November 2nd and the ensuing results will usher in the next chapter of our country’s political history. Beyond the numbers, time will tell which political party, which individuals and which movement was victorious. However, for the country to expect anything less than more partisanship is naïve and unrealistic.

Post-Election Partisanship

The partisanship will begin the moment the results are tallied. If predictions are correct, history will stay true to form and the party of the president in power, Democrats, will suffer losses. The size and severity of those losses are debatable at this time. The estimate of Democratic losses in the House of Representatives ranges from 40 to 75. It is possible, but unlikely, Republicans will gain the 10 seats necessary to control the Senate but it is not unrealistic for them to gain as many as eight seats. One of those seats could be the one held by Sen. Harry Reid (D-NV) the current Senate Majority Leader.

Posturing will begin the minute the polls close. Republicans will make it clear they intend to put a halt to or delay any of President Barack Obama’s initiatives. Fireworks will begin to fly during the congressional lame duck session which is expected to begin approximately a week after the election. Among the issues to be debated during that session is the extension of the Bush tax cuts, extending unemployment benefits and passing a 2011 budget for federal agencies. Republicans will use this session to flex their muscle and lay the groundwork for next year’s congressional session.

Gridlock will be the rule not the exception

Don’t expect much congressional action next year or during the early months of 2012. Make no mistake, beginning November 3rd every political action is geared to building momentum for Democrats to keep or for Republicans to reclaim, the White House. Nothing will come easy for either party as each tries to exert its will on the other.

In victory, the Republicans will have more to lose than the president. They contend to know how to right the ship they helped steer aground. They will no longer be able to simply be obstructionist but must become legislators. In legislating they will need to compromise which may not sit well the increased number of “true” conservatives, including Tea Party candidates, expected to march into office. There is enough infighting within the party to cause trouble for itself as it navigates an agenda for the next year or two. Realistically, Congress will have 2011 and the first three to four months of 2012 to enact legislative initiatives. In the spring of 2012 presidential campaigning will be in full swing.

The country will learn a great deal about President Obama’s leadership abilities, his toughness and political astuteness in the next 12 to 15 months. How he handles himself will determine his prospects for reelection. If he handles himself well, he will have the party behind him heading into the reelection campaign of 2012. If not, he will likely be challenged from within the party.

State Elections are Where the Action Is

Keep your eyes on the state elections. The party in control of the statehouse will heavy influence the political representation of that state for the next 10 years. The future composition of Congress and the federal largess enjoyed by congressional districts hang in the balance of these elections.

Interesting Read

Late Senate polls show GOP trending up slightly
By Aaron Blake
The Washington Post

Spin cycle: What will top Dems say?
By Alexander Burns & Jonathan Martin
Politico

The Five Faulty Theories that Led Obama and Democrats to Disaster
By Fred Barnes
The Weekly Standard

The Next Two Years
By William Kristol
The Weekly Standard

Next for GOP leaders: Stopping Sarah Palin
By Mike Allen & Jim Vandehei
Politico

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