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The Washington Report – February 21st, 2014
21 Feb 2014

The Washington Report – February 21st, 2014

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This week’s Washington Report! To sign up for the direct email, click here.


Today in Congress. Nada. Lawmakers are back in their districts this recess week. Meanwhile, Governors began to arrive in D.C. for the four-day winter meeting of the National Governors Association (NGA).

Obama’s 2015 Budget… Deficits and Debt, SO Yesterday…What you need to know about the Defense Budget…Answers to questions about Ukraine you were too embarrassed to ask and more of the week’s highlights.

The Capstone National Partners Team (John Rogers, Alan MacLeod, Steve Moffitt, Diane Rogers, Erik Oksala, Kate Venne and Joyce Rubenstein)

If you want to connect with us, find us on TwitterFacebook and LinkedIn.

DEFICITS AND DEBT … SO YESTERDAY AP writes, “Just four years ago, deficits and debt were an explosive political combination, propelling Republicans to control of the House and fueling the budget fights that would ensue over the next three years. Today, they are an afterthought — a dying ember in Washington’s political and policy landscape.” Washington Post reports, “With the 2015 budget request (due in early March), Obama will call for an

END TO THE ERA OF AUSTERITY “As part of that strategy, Obama will jettison the framework he unveiled last year for a so-called grand bargain that would have raised taxes on the rich and reined in skyrocketing retirement spending. A centerpiece of that framework was a proposal … to use a chained consumer price index (chained CPI) which backers say is more “accurate” than the traditional CPI and would reduce the annual growth in Social Security benefits.

Bye-Bye Chained CPI The idea infuriated Democrats and never gained much traction with rank-and-file Republicans, who also were unwilling to contemplate tax increases of any kind.”

THE NUMBERS The budget will call for $56 billion in new spending on domestic and defense priorities.” The Wall Street Journal reports that “It’s been widely reported that the Pentagon had been asked by the White House OMB to outline how it would spend an additional $26 billion if Congress provided the money.

WHITE HOUSE STAYS VAGUE ON OFFSETS Politico writes that officials said the new expenditures would be “paid for by closing tax loopholes and mandatory spending reform.”


WHAT YOU NEED TO KNOW ABOUT THE NEXT DEFENSE BUDGET NJ writes, “March 4 is the date to watch for Washington’s defense wonks. That’s when the Pentagon plans to release its budget request for next year. And when the document drops, it will sound the starting gun for a slew of battles over military spending. The budget deal Congress passed in December eased some of the Pentagon’s pain from the sequester, which was intended to slice $500 billion from defense accounts over a decade. But don’t be fooled: The battles over next year’s defense budget are far from settled. They will be perhaps the most contentious yet, and for the military, the stakes will be higher than ever. The DoD is running out of ways to cushion the blow from budget cuts, and this time, the ax will fall closer to the core. Here’s what to know: 1. The budget deal hardly rectifies sequestration for the DoD in fiscal 2015. 2. A rumored $26 billion dollar “wish list” tees up a political minefield. 3. The Pentagon’s financial cushions are pretty tapped out. 4. The wartime budget may turn into a slush fund. (INTERESTING FACT:  The cost per troop in Afghanistan in FY14 skyrocketed to over $2 million, from a remarkably stable $1.3 million in previous years, h/t Todd Harrison at the Center for Strategic and Budgetary Assessments).  5. The Pentagon could bust the budget caps next time. The Pentagon is contemplating a $535 billion budget in 2016, some $36 billion over the sequester cap for that year. That’s a sign the Pentagon may not be willing to make the really hard decisions this year.”


MILITARY FAILS AT PREVENTING MENTAL ILLNESS USA Today writes, “The military has produced dozens of programs aimed at preventing mental illness among troops during the wars in Iraq and Afghanistan, but there’s little evidence that most of them work, a blue-ribbon panel of scientists said in a report released Thursday. The findings … come as about 1,000 Iraq- and Afghanistan-era veterans are being diagnosed with PTSD each week, according to data from the VA. The scientists in the study singled out for prominent criticism the largest and costliest program, the Army’s Comprehensive Soldier and Family Fitness Program which began in 2009 amid increasing cases of suicide and mental illness. It has cost $125 million to teach coping skills to a million soldiers. The panel cited other internal Army studies that showed no preventive benefits for combat troops who had received the training compared with those who did not for conditions such as PTSD, anxiety, depression and substance abuse.”


War leaves the wounded both with scars we see and those we cannot.  Check out our own Diane Rogers’ Blog post on a personal encounter with the realities of war.


JOHN BOEHNER RETIRMENT??? Breitbart News reports, “John Boehner’s purchase of an $835,000 condo in Marco Island, Fla. has increased chatter that the House speaker is planning his exit strategy from Washington when the 113th Congress draws to a close later this year. His office quickly sought to downplay this idea … message sent.

A COINCIDENCE? Politically speaking, the timing of Boehner buying a condo in Florida days after he broke with his conference to push — and vote for — a clean debt-ceiling increase, is hard to simply dismiss. Even if Boehner sided with the conservative bloc of his conference on every issue between now and November, he would likely face a real fight to be renominated as speaker in the 114th Congress given how close he came to being forced to a second ballot in the 113th.

THE POLITICAL PRAGMATIST [Boehner] is someone who grasps, at a very personal level, the importance and power of going out on your own terms.

THAT SAID…A leader’s decision of when to step aside is deeply personal and, as such, difficult for handicappers to predict. Still, context always matter in politics. And the context of Boehner’s purchase seems to send a clear signal that he is making plans for what’s next — whether that’s next year or in a few (more) years.

PALACE INTRIGUE The Washington Examiner writes about the behind the scenes jockeying for leadership positions among House Republicans, even as Speaker John Boehner says he has no plans to step down: “[T]here remains considerable speculation that Boehner will retire, and members … are quietly exploring their options and laying the foundation for a leadership bid.”


WISCONSIN A probe that led to convictions of six former aides and allies of Wisconsin Gov. Scott Walker (R) was back in the spotlight Wednesday. So was Walker with the release of 27,000 pages of documents related to the investigation. As the National Review reports, “Despite Democrats’ best attempts to call this “Walker’s Chris Christie moment,” the fact remains that after two years of investigation, prosecutors came up with nothing to link Walker to any kind of illegal activity.”


RARE SIGHTING:  SCIENTISTS-TURNED-MEMBERS-OF-CONGRESS According to a Congressional Research Service profile of the 113th Congress – One Physicist, One Microbiologist, Six Engineers, nineteen Physicians, two Dentists, two Veterinarians and three Psychologists. “In short, even under a very broad definition of scientist, only about three dozen members fall into the category. Compare that to the 214 members from both chambers who have worked in business. Or the 211 who have a background in law. There you have it: scientific proof of the dearth of scientists in Congress.”


EDWIN EDWARDS: GOVERNOR, CONVICT, REALITY TV STAR – CONGRESSMAN? “I’m looking at it, and we’ll see when I can make a determination one way or the other.” — Former Louisiana Gov. Edwin Edwards (D), on running in LA-06. Edwards, 86, served eight years in federal prison following a racketeering conviction. (Baton Rouge Advocate) One of the most quotable pols in recent history, here’s one for the record books (and offensive on so many levels) from 1983:
“The only way I can lose this election is if I’m caught in bed with either a dead girl or a live boy.” (He won!)


THE SUPREMES NJ reports, “Next week the Supreme Court will examine the administration’s interpretation of the Clean Air Act to regulate carbon emissions from stationary sources.”


NUCLEAR POWER IS BACK NPR reports, “Energy Secretary Ernest Moniz announced a $6.5 billion loan guarantee Wednesday for building nuclear reactors in Georgia, underscoring the White House’s plan for an “all of the above” energy strategy. The two reactors will be the first built in this country in nearly three decades.”


SIMPLE MATH Bloomberg writes, “Wal-Mart is weighing the impact of additional payroll costs against possibly attracting more consumer dollars to its stores, according to a company spokesman. Increasing the minimum wage means that some of the 140 million people who shop at the chain weekly would ‘now have additional income,’ Tovar said. In the mid-2000s, Wal-Mart backed an increase in the federal minimum wage that eventually took effect in 2007. The Senate plans a vote on raising the federal minimum wage in the coming weeks, and House Democrats are expected to launch a discharge petition on the issue next week.

WALMART REDUX A spokesman later clarified to The Hill, saying the mega-retailer is “neutral” on the minimum wage bill.”

President Obama’s “quest to raise the federal minimum wage to $10.10 an hour would eliminate about 500,000 jobs by 2016 but increase pay for millions of Americans and lift nearly a million out of poverty, a CBO report found. The estimates released Tuesday by the nonpartisan budget office add fuel to the debate among economists and politicians about the impact of raising the minimum wage from the current $7.25 an hour.” (Wall Street Journal)



DEEP DIVE — STAY WITH ME — QUESTIONS ABOUT UKRAINE YOU WERE TOO EMBARRASSED TO ASK The Washington Post reports, “Ukrainians have been protesting since Nov. 21, when President Viktor Yanukovych rejected a deal for closer integration with the European Union, instead drawing the country closer to Russia. In Kiev, the capital, there are violent clashes between protesters and security forces, with more than 70 killed. On Tuesday, the prime minister resigned. What’s happening in Ukraine can be confusing for those who don’t know the history that led up to – and, in some crucial ways, explains – this crisis. Here, then, are the most basic answers to your most basic questions. First, a disclaimer: this is not an exhaustive or definitive account of Ukraine’s story, just some easy-to-understand background.

UPDATE Today, opposition leaders reached a deal with the country’s beleaguered president to form a new government and hold an early election.  Stay tuned.

1. What is Ukraine? Ukraine – not “the Ukraine” – is in Eastern Europe, between Russia and Central Europe. About the area of Texas with less than twice the population, its history goes back thousands of years.

2. Why are so many Ukrainians protesting? The protests started, mostly in the capital of Kiev, when President Yanukovych rejected an expected deal for greater economic integration with the European Union. The deal was popular with Ukrainians, particularly in Kiev and that part of the country. But this is about much more than just a trade deal. Symbolically, Yanukovych’s decision was seen as a turn away from Europe and toward Moscow, which rewarded Ukraine with a “stimulus” worth billions of dollars and a promise of cheaper gas exports. But this is about more than just geopolitics. Yanukovych and his government, since taking power in 2010, have mismanaged the economy and have been increasingly seen as corrupt. In 2004, there had been mass protests against Yanukovych when he won the presidential election under widespread suspicions of fraud; those protests, which succeeded in blocking him from office, were called the “Orange Revolution” and considered a big deal at the time. But now he’s back. The protests had actually been dying down until Jan. 16, when Yanukovych signed an “anti-protest law” that also deeply restricts free speech, the media (especially from criticizing the government), driving in a group of more than five cars, even wearing a helmet. Protests kicked back up with a vengeance, not just in Kiev but in a number of regional capitals, outright seizing government administration buildings in some.

3. I heard this was about Ukrainians wanting ties with Europe and their government selling out to Moscow. Is it? That’s sort of true. About half of Ukrainians say they want the European Union deal. But another third say they’d prefer integrating with the Russian-dominated Eurasian Customs Union. Here’s the thing you have to understand: Ukraine is deeply divided by language, history and politics. It’s not just that Ukraine has two halves that predominantly speak different languages. They have different politics – and different visions for their country. In some ways, this crisis is about popular anger against a president who mishandled the economy and whose attempts to quash protests have edged into authoritarianism. But it’s also about Ukraine’s long-unresolved national identity crisis. This story is often framed as Ukraine being pulled by Moscow on one end and Europe on the other. But Ukrainians themselves are doing a lot of the pulling: a 22-year tug-of-war between two halves and two identities.

4. Wow, How did Ukraine get so divided? Ukraine was conquered and divided for centuries by neighboring powers: the Polish, the Austrians and most of all the Russians. The Russification of Ukraine began 250 years ago with Catherine the Great. She and subsequent Russian rulers focused overwhelmingly on the east, which also happens to be some of the most productive farmland in the world. Then came Joseph Stalin. In the 1930s, the Soviet leader “collectivized” peasants into state-run farms, causing several million Ukrainians to die of starvation. After the famine, Stalin repopulated the devastated eastern farmlands by shipping in ethnic Russians.

5. So I get that Russia used to rule Ukraine but doesn’t anymore. Why do I hear so much about its role in all this? Russian President Vladimir Putin has been highly aggressive in pushing Ukraine to reject the European Union and, he hopes, instead join the Moscow-led Eurasian Customs Union, which consists of a few other former Soviet states. That included threatening to impose economic sanctions on Ukraine. In 2004 and 2006, when the pro-Western Yushchenko was in power, Russia shut off natural gas exports to Ukraine over political disputes, doing serious damage to the economy. A few weeks after Yanukovych rejected the E.U. deal, Putin offered Ukraine a stimulus package worth $15 billion and a 33% price cut for Russian natural gas. That will make it much tougher for Yanukovych to walk away from Putin’s embrace, particularly given how much of the popular discontent is driven by the poor economy.

6. Why does Russia care so much about Ukraine? There are surface reasons – cultural connections, shared history with so many Russians, as a source of food and a transit hub for Russian energy exports it’s economically and strategically important. And deeper reasons – Russia’s self-image as a great power. The WSJ calls it President’s Putin’s chance to rebuild a “Greater Russia.”

7. Why haven’t the U.S. or Europe fixed this? Actually, it’s not clear what the West could do.  The danger is that any Western action strong enough to make a difference risks triggering a backlash that would make things worse. If the West gets too aggressive about pushing Yanukovych, then the country’s eastern, Russian-facing half might see it as foreign meddling not so different from Russia’s involvement. Ultimately, the deeper issues here are Ukraine’s troubled economy and its unresolved national identity. Outside countries (including Russia) can certainly help with the former, but the latter can be solved by only Ukrainians.

8. Is it time for the Ukraine to split up? The Atlantic writes, “one expert thinks the country would be better off if it were partitioned.”


PANDORA KNOWS WHOM YOU VOTE FOR NJ writes, “The music-streaming service can tell with 75% to 80% accuracy how people will vote, based on their location and music preferences, and they’re giving that information to political advertisers.”


FACEBOOK’s $19 billion splurge on WhatsApp is the biggest acquisition of a venture-capital back company.  Ever. And the largest internet deal since Time Warner merged with AOL in 2001 (that didn’t turn out well).

BUT, THERE’S A METHOD TO THIS MADNESS So called “over-the-top” messaging services (where text messages are sent using data rather than carriers’ SMS systems) are surging in popularity, thanks mainly to WhatsApp. According to Analysys Mason, a wireless research firm, such apps are now used by more than half of all smartphone users globally, with WhatsApp dominating the market with a 45% share of its market. The number of mobile messages sent over the internet rather than SMS surpassed 10 trillion last year. And the volume is expected to double again this year, reaching nearly 37.8 trillion messages by 2018 (labeled in the chart below as “OTT IP messaging.”) ALL THIS EXPLAINED IN TWO CHARTS.



WAFFLE HOUSE AMERICA The Fix writes, (info originated at DeadSpin), “The split is clear. If you have a Waffle House in your state, you are more likely to support a Republican for president.  If you don’t, you won’t.  

IS THIS AT ALL MEANINGFUL? Not so much, but totally useful when playing Trivia. The Waffle House franchise began in Georgia in 1955 (hence it has the most restaurants of any state) and, not surprisingly, grew most aggressively in the nearest geographic/regional areas of the South and Southwest.  The south has been solidly Republican territory since — at least — the 1994 midterms (and arguably considerably earlier) so it’s possible that this is a coincidence rather than any conclusion. But, at the least, the remarkable overlay between Waffle House America and the Romney States of America speaks to the remarkably divided state of the country. The self-sorting/silo-ing of America extends beyond what we read, watch and listen to — it extends all the way to what we eat.”

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