‘Tis the Season of Surprises

As I wait for Congress to come back this week, I am hopeful they will finish their work by December 16^th. There is a lot to be done in the next three weeks. Congress has to finish all the regular FY12 appropriations. I have learned even when negotiations appear to be done, how Congress passes the final product remains to be seen, particularly with a bulk of conservative Republicans anxious to make a stand on spending. These are going to be the most important three weeks of the year for our programs.

Congress has to deal with a handful of extenders  – extension to the payroll tax holiday, unemployment benefits and a variety of other so-called extenders. Each one adds to the deficit. I think the unemployment tax will pass. I think the payroll tax holiday will pass. But I think there will be some heartburn before it is all completed.

Along with finishing their work, both parties want to leave for the December holidays having reinforced their political position for the 2012 elections. We may see some surprises crop up as Members promote their campaign platforms for next year’s elections. The surprise items may not get passed but they will get introduced.  The latest example being touted right now is to pay for unemployment benefits with a surtax on millionaires. The tax may not fly – the surtax on millionaires certainly has not passed Congress all year – but the idea resonates with voters.

All of this makes this an interesting but uneasy time of year. Watch for surprises to pop up yet. 

The Consequences of Failure

When I started hearing the word around Washington on Saturday that the Super Committee was most likely headed toward failure, one thought surfaced in my mind. This current political gridlock is forcing us down a difficult road. Funding is going to get very tight, even more so than today. I do not know where we are going to be in one or two or three years from today regarding discretionary spending for domestic programs.  We are in debt $15 trillion. If the Super Committee had agreed on the best possible deal, the national debt and deficit would still be astronomical for the next ten years, roughly a trillion dollars. The squeeze on domestic discretionary spending is going to become increasingly worse.

The second thought that came to mind was that there will be further consequences following a reinforced perception that Washington is broken. I predict one consequence will be an increased consideration of a 2012 election third party candidate. I have heard this idea a lot lately but I think it is difficult to organize so late in the game. With intensified frustration toward both parties, I speculate that people will revisit this idea and give it more consideration.

The failure of the Super Committee highlights the stark difference between the two parties and between their differing philosophies of governing. It very much appears that revenues are the sticking point in these failed negotiations. If you simply let the Bush tax cuts expire at the end of 2012, there is $4 trillion. Besides being a nasty year politically, 2012 will continue to highlight the differences between what the Republicans want to do if they are in the majority after the election versus what the Democrats want to do if they are in the majority.

Leadership and Emerging Leaders

Recently, I have spent time with Mitch McConnell. He is an extremely able leader of his party. I find him forthcoming, insightful and a real gentleman. Within the last couple of years, I have dealt with him regularly. I have come to admire him as a Senate leader. I also admire and genuinely like Harry Reid. His leadership skills and his passion for baseball impress me.

I am spending time right now figuring out what to do with the NCAF Emerging Leaders in the upcoming year. I would like to meet with them at our March conference. I hope to meet up with them in St. Pete’s as well. I have grown to like but also need the ability to have frank discussions behind closed doors. The Emerging Leaders provide me with the opportunity for these types of conversations. I hope I am giving to the Emerging Leaders and that they are receiving something from me. I am certainly receiving things I need from them.

In addition, we are in the process of planning our March conference. It is early to start thinking about it but I have fun with this planning process, particularly thinking about who to invite. That part is an intellectual process that I thoroughly enjoy and find fun. I have been thinking about what books I have read that I have really enjoyed. I am excited to invite a few authors I have enjoyed reading recently. Some of them may be a surprise to Community Action.

The Failure of the Super Committee

As I wait to receive official notice that the super committee has failed to find at least $1.2 trillion in savings over the next ten years, I am stunned. I clearly thought that the risks to our economy, our credit worthiness, our country and the institution of Congress were great enough to force the super committee to devise some sort of deal, if only minimal. Now it looks like it is not going to happen.

What this does is create a number of unknowns. First, what is going to be the market reaction? What will happen to our stock market and the world stock market? Second, I have heard well known economists raise the concern that a failed super committee may possibly lead to a downgrading of US credit rating – again. Third, there is going to be a lot of maneuvering to protect defense spending from sequestration in the next thirteen months. Many assume that Congress will figure out a way to spare the Pentagon or at least lighten the impact on the defense budget. There is a strong majority in Congress that will agree with that thinking. This will lead to increased pressure on cutting domestic discretionary spending.

The consequence of this failure – if indeed the super committee does fail – is that the general public will feel with some finality that both government and Congress are broken. I predict that Congressional approval ratings, now in the single digits, will drop even further. This cannot be good for the White House. It is not good for the country. Our world reputation will be affected. I am absolutely stunned at what appears to be a failure. This will significantly impact the 2012 elections, while staging harder choices both fiscally and politically down the road.

Participating in the Electoral Process

This is always an awkward time of year in the world of politics. Members and potential candidates are calling for campaign contributions. I find it especially difficult when they call around the holidays. I wonder if they feel as awkward as I do. We are able to respond to the avalanche of requests with pennies on the dollars. I have said it before, there are rumblings about big money in politics. I continue to hear about how Karl Rove’s American Crossroads has $500 million to spend on the 2012 elections. That shakes my faith in the electoral process.

We have been discussing CAP PAC fundraising in our office recently. NCAF staff have been kicking around ideas for how to raise money for CAP PAC. Ideas have included talent shows, baseball games, drag shows, 5K runs, more bicycle rides. We are really hoping that some CAPs will organize fun and  creative CAP PAC fundraisers. Next year, I hope to see some event organized in most states or regions. I look forward to participating in these events. I know of at least one region that is thinking about planning a bicycle ride. I am already training.

Champions in Congress

Senator Chris Coons of Delaware called me last week. Delaware has a small Community Action program, with one CAP in the state. A couple of months ago, I went to meet with Coons, who was elected in 2010. He requested to meet with me and I went for what was scheduled as a 30 minute meeting. I ended up staying a full hour, just he and I talking. It was a good meeting during which I became aware of the depth and quality of Chris Coons. He recently called me again expressing interest in being a champion for the Weatherization program. We spoke for a while and talked about the long term direction of the program. I was impressed with the amount of time he took to talk with me about Weatherization. I am excited that a Member of the potential stature of Coons wants to invest in the program.

My conversation with Coons reminded me of the truly remarkable people currently in the Senate. Coons is one of many. Sheldon Whitehouse of Rhode Island. Sherrod Brown of Ohio. Lamar Alexander of Tennessee. Rob Portman of Ohio. These are just some of the names that come to mind. There are a good number of great individuals in Congress right now. Not all support our programs but one does not necessarily have to support our programs to qualify as a great individual. Unfortunately, I think the media has really done a disservice of trashing Congress. I see a much different side to these people.

Avoiding Partisan Rhetoric

In my work, I constantly hear partisan comments. Whether, they come from lobbyists, Members of Congress, political consultants or fundraisers, they are common utterances in DC. These days though, in this red hot political environment, there is a constant barrage of partisan comments. One party versus the other, one individual versus another, leadership versus leadership. All this is to say that I like the bi-partisan position we have taken. I have thought about this a lot recently. A very conservative House member – who is important to our programs – recently said to me he used to feel that all Community Action agencies were “lefty groups.” He believed all Community Action people were Democrats. He no longer sees us that way. He sees us as bipartisan. He is growing more and more comfortable with our programs and with Community Action. The partisan rhetoric so common today makes me flinch at times. I attended a dinner not too long ago where I found myself gritting my teeth listening to the conversation seeped in this partisan rhetoric. I think one of the keys to the survival and long term success of Community Action is for Members of both parties to embrace our programs. I want Members of both parties to view us as fair and bipartisan, serving all people. We cannot do this promoting the tainted partisan rhetoric so often used.

Still Optimistic about the Super Committee

I am anxious to see what happens with the super committee regarding deficit reduction and the debt. The mood swings in DC right now regarding the super committee are unbelievable. One minute, there is the sentiment that the committee will get the work done and the next, there is no way they will be able to agree to any recommendations. Everyone has their opinion. Everyone has an idea of what ought to be cut and what ought to be raised. There are, though, at least two sentiments that unite everybody in Congress.

First, there will be fall out for the institution of Congress (and subsequently the institution of government) if the super committee fails to present a package of cuts. A failed super committee will only fuel the country’s anger toward Congress for not being capable of dealing with the problem. How will they tackle the many other problems of the country? Second, the automatic cuts that will result if the super committee fails are unacceptable. Whether they are liberal or conservative, Democratic or Republican, or believe that the super committee will succeed, everyone agrees that the automatic cuts will not be good.

The tainted image of the nation and the institution of Congress are at stake, stained in the eyes of the world and the American electorate.  While these are at stake, I remain optimistic. I thought the CR would work out in April and it did. In fact, I won some bets with Members of Congress on that prediction.  I think the Institution will succeed, despite the political pundits.

Continuing Resolution

I am watching as the minibuses are starting to come together this week. Congress successfully completed the conference on agriculture, transportation and commerce bill. They actually added money in for a few programs. The next conference will be regarding defense and HHS programs. I believe the next continuing resolution will be for a month. I have some remaining degree of optimism that it will come together painlessly. The biggest hurdle in front of us will be how to deal with whatever the super committee does or does not do.

Congress is dealing with issues that are leagues above our pay scale – the deficit, the debt, continuing resolutions, final 2012 appropriation bills and the super committee. I like our position with Congress right now. We have Members fighting to get credit for the funding success of CSBG. I will give it to anybody that wants to help or believes in our program. Second, we have Members that want to take credit for funding LIHEAP. It is better to have people who want to be the champion of LIHEAP instead of wanting to take credit for cutting the program. Third, we have Members calling me to ask to be champions of Weatherization. We are in good position and I believe we are making progress.

Working on Appropriations for the Rest of 2011

In the last week and a half, I spoke with a number of key Members involved with appropriations about the outlook of our programs. I have a feeling things are going to get ugly at the end of this year as we try to get the FY 2012 appropriation bills into decent shape. We need to lift LIHEAP above where the House and Senate currently have it funded. That goal is becoming more difficult than I had anticipated. There simply is not the additional $8 or $9 hundred million dollars for the program. At this point, every penny is being counted and LIHEAP is a big-ticket item. It would be a bit easier if the White House were better on LIHEAP or more supportive of the program.

Although CSBG is in the House and Senate bills at virtually the same number, we cannot rest easy right now. I recently had breakfast with a key Senate ally. I left the meeting with the concern that everything is not quite buttoned down and that CBGS may face additional cuts.

There is a lot of work left for us to do to protect our programs. Even though we have worked well in the House and Senate, in this environment we are not home and secure just yet. We have six weeks of work in front of us. I came back on Sunday from a weekend policy retreat and found I was just a bit shaken with all the obstacles I see before us. We have a lot to navigate the next 6-7 weeks. I still anticipate 2012 will be a cruise control type of year with not much being done in Congress.

Tax the Rich Rhetoric

I have grown weary of all the attention given to the surtax on millionaires and billionaires. The rhetoric highlights the class warfare that both sides accuse the other of launching. I look at this super heated political discourse, including the 99% argument, and I grow increasingly uncomfortable. I gained recent insight, though, into how this rhetoric resonates with Republicans. According to pollsters, voters feel the very well-off should pay more. Republicans tell me that Democrats have a winning argument with this issue. Twelve months remain to the 2012 election. The fact that Republicans talk to me about this issue and how it polls suggests that this rhetoric will be with us for the next 12 months.

Recently, a number of Members – Democrats, politically astute Members of both the House and Senate, with whom I enjoy both political and legislative relationships – shared their thoughts with me about the 2012 election. They all conjectured that President Obama has a very difficult path to re-election. Ironically, many Republicans think their party’s path to the election is even more difficult. I tend to think the jobs and unemployment are a serious handicap to incumbents in both Congress and the White House.

All Eyes on the Super Committee

The Republicans and Democrats have different expectations for the work of the super committee. Democrats want a big deal, along the lines of $4 trillion. Republicans want a smaller deal, around $1.2 trillion. Senate Democrats appear to have filled their line-in-the-sand with concrete and now insist that 50% new revenue and 50% spending cuts be included in any deal. Spending cuts includes defense and entitlements. Republicans are not there yet. They have made movement on revenues but not a lot on defense. A number of Republican Senators are urging their colleagues to deal with Social Security and Medicare entitlements on a separate track, outside of the super committee.
My level of optimism regarding the super committee reaching a deal has fluctuated. I am a bit more pessimistic today, after a large number of meetings held last week.  My estimation that a deal will be reached has dropped below 50%. I was more optimistic before. After last week’s meetings, particularly those toward the end of last week, I see that it will be difficult to have the committee reach a deal that can pass in Congress and have the support of leadership in both chambers and both parties. The defense industry and many lobbyists are concerned about sequestration and the automatic cuts beginning in FY 2013 if the super committee is not able to do its work.

Current Political Environment

The current political environment is fascinating. I was amused this past week when I listened to Democrats and Senior Republicans discuss their predictions for the outcomes of the 2012 elections. Democrats I spoke with predicted that they would retain control of the Senate by a margin of 52-48. A Senate Republican Leader told me he predicted Republicans would take control of the Senate in the 2012 elections by a…you guessed it…52-48 margin. While the parties differ on the outcomes of the election, they share two common sentiments. First, the Senate will be narrowly divided. Second, if Obama loses re-election, the Democrats will not remain control of the Senate.

The story gets a bit more complicated. Senate and House Democrats are increasingly frustrated and, in some cases bordering on anger, that Obama is running his re-election campaign against Congress. President Obama is bashing Congress and his criticisms are theoretically directed at Republicans in Congress. His comments are catching Congressional Democrats in the crossfire though. On the one hand, you have a president who is campaigning against Congress. On the other hand, the fate of Congressional Democrats is linked to the success of the president’s re-election efforts.

Energy Conference and Innovative Initiatives

We had a successful Energy and CIF Conference last week. In the future, we want to focus on innovation and innovative ideas. As I said at the conference, this is a difficult yet potentially exciting time for Community Action. I am convinced there is a need for innovation in Community Action and I know we can fill that need. NCAF’s initiative with Goldman Sachs is exciting. I anticipate that we will be able to take this program nationally. New Jersey’s effectiveness with the launch of the solar program will determine what happens in forty-nine other states.  The outcome will also be significant for the impact on certain circles of the Administration as well. We will keep a special eye on and our prayers focused on the special demonstration project in New Jersey with the Goldman Sachs project.

Flow of Funding to CAPs

The release of LIHEAP dollars last week is a good thing. We are now looking for first quarter CSBG dollars to be released. We are really focused on the flow of funds to local agencies, particularly during this disjointed and disruptive funding process. Current funding has been appropriated via a continuing resolution. There is talk that there will be another CR that lasts until December 19^th. Republicans and Democrats have suggested this will result in a slow release of funds from the departments.

PAC Fundraising

The lack of transparency and the size of donations made to committees and super PACs are disturbing trends. Someone told me recently about a single private citizen who made a contribution to a political committee for a truly staggering unbelievable amount. Enormous contributions are made from large corporations and wealthy individuals to super PACs and committees on a regular basis. I run across it now very regularly on both sides. This bothers me. This steady drip, drip, drip undermines our democracy. It makes whatever we do, and whatever any everyday citizen does, seem fruitless.

We are in the midst of a very difficult battle for the future of Community Action. The stakes are high and there is no clear end in sight. NCAF cannot compete with corporations in raising millions of dollars yet we need to continue fighting for our communities and the people who rely on our services. I want to ramp up our CAP PAC fundraising efforts in 2012. I hope we can have roughly ten events planned next year. Events that demonstrate the healthy, innovative, vibrant, resilient character of Community Action. Think about organizing an event in your state. I hope some of you are interested and will choose to take up the challenge.

Presidential politics

I hosted a Preconference event at our Energy Conference last week. About 60 people from around the country attended. I did a little informal polling of the group. I asked how many had voted for Obama in 2008. Nearly everyone raised their hand. I asked how many are satisfied with the direction that the country is heading. About 10% raised their hands. I asked how many anticipate voting for Obama, regardless of who the other candidate is. About half raised their hand. The conversation that followed mirrored what I hear from people around the country lately. People are concerned about the current economic situation, jobs, wages, the divisiveness of politics. This is consistent with what I am hearing around the country and what national polls reflect.

In preparation for the conference last week, I examined a lot of data on satisfied and dissatisfied voters and voters’ perspectives on the direction the country is moving – on the right or wrong track. I segmented the data into key battleground states. What I found is that, despite conventional wisdom, I think President Obama has a very tough road to re-election. I often hear people state that he matches up well against the prospective Republican field candidates. That may be true. But the dissatisfaction on the Democratic side is quite high. I think about how many local elected officials tell me how distressed communities still are. I hear people from within and outside Community Action that share their dissatisfaction and concern over the state of our country. This suggests to me that President Obama cannot be easily labeled as a favorite for re-election.

The little difference between Republicans and Democrats

In the past week, I spent time with a number of key House Democratic leaders and a very important House Republican. It is interesting how close these key individuals are on issues and spending matters, while the gap between their parties is so wide. In conversations with Democratic leaders, they discuss willingness to compromise on critical issues, domestic spending, military spending, entitlements, the super committee. Yet, politics locks them into resisting reforms or medications on some of those programs, particularly on the entitlements side. I spent Friday and Saturday with a very senior House Republican, a Member critical on spending issues. He favors many things being on the table for discussion and reaching an overarching deal that might be in conflict with the politics of his own caucus-- Such as a deal on entitlements and even defense spending. Individually there is common ground but party politics and 2012 election politics make an agreement at this point elusive.

There is a good chance this year will have an ugly ending while Congress deals with wrapping up the final 2012 spending levels. There are appropriators who know what is going on but getting the vast majority of new House Republicans to support final 2012 spending packages in order to pass them this year will be a mighty stretch. Congress is facing two big fights yet – 2012 appropriations and recommendations from the super committee.