Around the Bigs: Even the media bigs who have been President Obama’s biggest cheerleaders find little economic cheer this morning, as a growing list of indicators point to an economy that is barely growing and in many sectors is either stagnant or even declining. That paints a bleak picture that immensely complicates Obama’s 2012 prospects.
Wall Street Journal: “Stocks suffered their biggest declines since the middle of last year, as several downbeat reports prompted fears the economic recovery is running out of steam. The Dow Jones Industrial Average closed down 279.65 points, or 2.2%, to 12290.14, the biggest point drop since June 4, 2010.” Later, the Journal cites lower than expected job growth, slowing manufacturing production, dropping car sales, and another debt downgrade for Greece as the causes for the slide.
New York Times: In an Economic Memo, Binyamin Appelbaum writes, “No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent. Seventeen months before the next election, it is increasingly clear that President Obama must defy that trend to keep his job. ”
Washington Post: Under the header “Manufacturing slowdown the latest sign the recovery is faltering,” WaPo reports: “The economic recovery is faltering, and Washington is running out of ways to get it back on track. Two bright spots over the past few months — manufacturing and job creation by private companies — both slowed in May, according to new reports Wednesday. The data come amid other reports of falling home prices, declining auto sales, weaker consumer spending and a rising pace of layoffs.”
Wall Street Journal: Stanford economics professor John Taylor makes the case for “Debt Limit Chicken” arguing that less government spending is good for the economy: “If politicians just increase the debt limit now without simultaneously correcting that rapid spending growth, then they will be expected to do so in the future. In contrast, if they tie any increase in the debt limit to a halt in the explosion of spending, then people will give them better odds that they will control spending in the future. Linking the debt limit vote to spending thus establishes a precedent and valuable credibility.”
Wall Street Journal: The editors place the blame for the housing market’s continued decline squarely on government policy: “Since the housing market began to turn in 2007, Washington has tried to keep prices from falling with every policy gimmick known to politics: Foreclosure mitigation, more guarantees from the FHA, higher guarantee thresholds from Fannie Mae and Freddie Mac, Fed purchase of mortgage assets, and the $8,000 home buyer’s tax credit promoted by the White House and Georgia Republican Senator Johnny Isakson. Their main result, other than subsidizing some Americans at the expense of others, has been to sustain the housing recession over a longer period of time. The price decline would have been sharper without them, but the recovery would have happened sooner.”
New York Times: According to a new survey by the National Governors Association, despite rebounding revenues, states still are spending more money than they are taking in taxes. Medicaid expansion is the biggest spending driver.
New York Times: A National Academy of Sciences has found that Medicare uses inaccurate and unreliable data to pay doctors and hospitals. The study was commissioned to win Midwestern votes for Obamacare. Lawmakers were concerned that Medicare payments to their states were to low to recruit good health care providers. But this study concluded the opposite; that payments to urban areas should increase while payments to rural areas decrease.
Washington Post: Libyan rebels are finding it difficult to prosecute a war where they do not have control over their sides greatest firepower: “After more than three months of stalemate, the rebels’ quest to remove Gaddafi from power depends almost entirely on a NATO force that they do not control and that insists its mandate is restricted to protecting civilians. Rebel commanders can only ask NATO for help, then wait and hope.”
CNN: A CNN/Opinion Research Corporation poll, found that 58 percent of Americans oppose House Budget Committee Chair Paul Ryan’s, R-Wisc., plan, while only 35% support it. CNN Polling Director Keating Holland adds: “Opposition is highest among senior citizens, at 74 percent, suggesting that seniors are most worried about changes to Medicare even if those changes are presented as ones that would not affect existing Medicare recipients.”
AP: The Obama Health and Human Services Department rejected Indiana Gov. Mitch Daniels ban on Medicaid funding for Planned Parenthood yesterday. Medicaid Administrator Donald Berwick writes in the letter: “Medicaid programs may not exclude qualified health care providers from providing services that are funded under the program because of a provider’s scope of practice.” The letter does not threaten to fine Indiana, but that is the next step should the Daniels administration fight Obama and Berwick.
AP: The president’s National Economic Council admitted Wednesday that the federal government will lose about $14 billion on their $80 billion bailout of General Motors and Chrysler.
On the Issues:
Debt limit: House Speaker John Boehner, R-Ohio, told reporters yesterday that he wants a debt limit deal done by the end of June.
Libya: House Leadership pulled a bill sponsored by Rep. Dennis Kucinich, D-Ohio, yesterday that called for President Obama to withdraw U.S. forces from Libya. According to The Hill, there was growing concern among GOP vote counters that Kucinich’s bill might pass.
Oversight: House Government Reform and Oversight Chair Darrell Issa, R-Ca., has called Elizabeth Warren to testify before his committee for a full day. This comes after Warren bolted a separate Oversight hearing after just one hour of testimony.
GOP field: Pew asked Americans for a single word to describe the candidates running for the Republican presidential nomination, and the number one response: “unimpressive.” “Disappointed” was second, “weak” was third, and “good” was fourth.
Huntsman: George Will makes a foreign policy themed pitch for Jon Huntsman: “Huntsman’s economic policies are Republican orthodoxy. …He believes significant savings can be found in the process of making the defense budget congruent with more judicious uses of U.S. military assets. … he faces the worthy but daunting challenge of bringing Tea Party Republicans — disproportionately important in the nominating process — to a boil about foreign policy.”
Ryan: Ryan confronted Obama over his use of the word “voucher” to describe Ryan’s Medicare reform plan yesterday at a meeting between the House GOP and the White House. Obama did not apologize and instead accused the Republicans of using the same tactics: “The demagoguery comes from both sides,” Obama said.
Huckabee: Former Arkansas Gov. Mike Huckabee told reporters yesterday that he was open to a vice presidential spot, should someone offer it to him. He is not considering running for the nomination himself.
Utah Senate: According to The Salt Lake Tribune, Rep. Jason Chaffetz, R-Utah, has told several Utah political insiders that he plans to run against Sen. Orrin Hatch, R-Utah, next year.
Erick Erickson calls on GOP presidential hopefuls to take a more active leadership role in the debt limit fight: “It is time for the Republican Presidential candidates to start forcefully and constantly demanding bold change in exchange for the debt ceiling increase. Yes, some of them will say this is a matter they should not get involved in, but the nation they inherit, or not, cannot wait for their election or defeat.”
The Weekly Standard‘s Mark Hemingway makes the case that Obamacare did end Medicare as we know it: “Obamacare is bureaucrats setting dubious price controls that are very likely to limit access to medical care. (Say it with me, Obamacare fans: Having insurance coverage does not mean that a doctor will treat you.)”
The Corner‘s Daniel Foster responds to liberal claims that budget cuts caused Alameda County firefighters to watch a man drown: “Even if the Alameda firefighters were “handcuffed by policy,” they are not the only fire-rescue game in town. So don’t tell me “budget cuts” let this man kill himself.”
Greg Sargent promotes a Anzalone Liszt poll showing that Democrats have increased their advantage on Medicare over Republicans. Sargent’s takeaway is that “Dems agree to Medicare benefits cuts at their peril.” This is part of increasing pressure from the left to keep Medicare out of any deal forged by the Gang of Biden.
ThinkProgress blares “Taxes Are Lower Under Obama Than Reaga”n and then details some tax rates that are lower today then when Reagan was President. Obama used this talking point with Republicans in their White House meeting yesterday. It is the left’s answer to the right’s refrain that “we have a spending problem, not a revenue problem.”
Talking Points Memo flags video of Florida Senate candidate Mike Haridopolos being dropped by a conservative radio talk show host for not taking a position on the Ryan plan. TPM titles the post “Sign of the Trend,” showing just how eager the left is trying to create the narrative that Republicans are running from the Ryan plan.