In it, but not of it. TPM DC

We reported earlier this week that K Street's biggest financial players are urging the Treasury Department to assuage their concerns with the executive compensation limits that were added to the new stimulus law by Senate Democrats.

But Bloomberg adds an interesting wrinkle in its story today on the narrow room for Treasury to maneuver around the new compensation caps:

It's unclear whether the rules will apply to Public-Private Investment Fund, the Treasury's effort to remove the toxic assets clogging banks' balance sheets. The fund would offer government financing to help induce private investors such as hedge funds to purchase illiquid securities.


It's understandable that the executive-pay caps' applicability to hedge funds would be uncertain -- after all, their involvement in Treasury chief Tim Geithner's new public-private fund has yet to be fully determined. But Geithner has committed to spending some amount of taxpayer money in an attempt to coax private equity giants into buying devalued, mortgage-backed assets.

Whether or not that public money comes as part of the Troubled Assets Relief Program, it seems that the new executive-compensation limits are intended to apply to hedge funds who participate. Congress even included a sliding scale (read about it here) that would limit the pay caps based on how much each company received in taxpayer-funded benefits. If private equity succeeds in wiggling around the rules, one suspects that banks not participating in the TARP's capital purchase program will be next.

The Coleman campaign has just filed a very interesting motion in the election trial, changing their position for the fourth or fifth time on whether to count rejected absentee ballots -- and demanding that votes they've already stipulated as legal should be thrown out.

A review of the back-story is necessary. You might remember that the campaigns agreed during a statewide review of rejected absentee ballots that a group of 933 ballots were in fact legal and should be counted. Those ballots were counted on January 3, and they gave Al Franken a net gain of 176 votes. The Coleman campaign then started crying foul that some of these votes were really illegal and had to be thrown out.

When those votes were counted, numbers were affixed to the ballot envelopes and the ballots themselves, a just-in-case measure for if they would have to be thrown out again later on. Coleman later dropped this claim, and the election court's order to formalize this also commanded the Secretary of State's office to redact those numbers, in order to protect the secret ballot.

But now Coleman wants an order to stop the redactions, and to declare that some of these votes must be identified and thrown out. (ed. note: It is now too late to completely do this. See late update below.)

So Coleman was originally against counting them, then for it, then against it, then for it, and now against it, in that order.

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We reported yesterday on the three Democratic lawmakers who visited the Gaza Strip yesterday, becoming the first government representatives to touch down in the area in more than three years.

Two of the three, Reps. Brian Baird (WA) and Keith Ellison (MN), have released a longer statement on what they saw in Gaza. They make a powerful plea for greater U.S. recognition of the human toll exacted by last month's outbreak of violence between Gaza and Israel. From Baird and Ellison's release:

If this had happened in our own country, there would be national outrage and an appeal for urgent assistance. We are glad that the Obama administration acted quickly to send much needed funding for this effort but the arbitrary and unreasonable Israeli limitations on food and repair essentials is unacceptable and indefensible. People, innocent children, women and non-combatants, are going without water, food and sanitation, while the things they so desperately need are sitting in trucks at the border, being denied permission to go in.


The two Democrats will head to the Israeli side of the border today.

As we begin the noble quest to fill out the Hypocrimap of GOP stimulus-lovers, I must point out an important caveat.

The economic recovery law includes a "waiver" to ensure that states receive their share of the measure's $54 billion in federal money for education. But when you see Republicans clamoring for their state to get that waiver authority, it's not a simple case of GOPers hypocritically scrambling for cash they voted against -- despite a report from Politico suggesting as much.

The stimulus restricts access to the $54 billion pot to those states that have maintained education budgets at or above 2006 levels. The "waiver" provision was added at the urging of states that wanted to get help from Washington while keeping their education budgets stunningly low. In several cases, as Dana Goldstein observes, the states in question could have boosted their schools budgets through targeted tax hikes, but chose not to.

In order to secure the "waiver" for stimulus cash, state lawmakers -- both Republican and Democratic -- have to request it from the Obama administration. So when you see Florida GOPers joining the push for a state waiver, it's merely pragmatic support for maintaining low schools budgets during lean years. The other states aiming for education waivers are Nevada and California.

Biden: Bush Policies Gave Al Qaeda A Recruitment Tool Speaking yesterday at CIA Headquarters, Joe Biden told the assembled employees that the new administration will "reverse the policies that in my view and the view of many in this agency caused America to fall short of its founding principles and which gave Al Qaeda a powerful recruiting tool."

Today: Obama And Biden Talking Up Stimulus To Mayors President Obama and Vice President Biden will be speaking today at the White House to a group of mayors from across the country, to discuss the implementation of the stimulus bill. Mayors who will be in attendance include San Francisco's Gavin Newsom, New Orleans' Ray Nagin, Dallas' Tom Leppert (a Republican) and others.

Hillary On Global Listening Tour The Washington Post reports that Clinton's first overseas trip has essentially become a global listening tour, in an effort to repair America's image abroad. "My trip here today is to hear your views, because I believe strongly that we learn from listening to one another," she told students at Tokyo University earlier this week. "And that is, for me, part of what this first trip of mine as secretary of state is about."

New York Post Apologizes For Chimp Cartoon The New York Post has now apologized for the controversial "chimp" cartoon, but they're still, um, sticking to their guns. "It was meant to mock an ineptly written federal stimulus bill. Period," the paper says. But they do acknowledge that some have seen it as a racist depiction: "This most certainly was not its intent; to those who were offended by the image, we apologize."

Appointed Senators Hitting The Trail -- Except Burris Three of the four appointed Senators are spending the Congressional recess touring their states and discussing the economy, mostly in preparation for re-election -- and even Delaware's Ted Kaufman, who is serving as a caretaker, is meeting with constituents to discuss the issues. The one exception seems to be the embattled Roland Burris, who has canceled his public events and is holding private meetings to figure out his next move.

Report: Cornyn Approaches Pataki For New York Senate Race The Associated Press reports that NRSC chairman John Cornyn has approached former New York Governor George Pataki to run in the special Senate election in 2010. Pataki served three terms as governor of a Democratic state, so he could be a strong candidate if he runs, though his popularity did go down in the home stretch of his administration.

GOP Candidate In Gillibrand's Seat Won't Say How He Would Have Voted On Stimulus Bill The stimulus bill is quickly becoming a big issue in the special election for Kirsten Gillibrand's former House seat -- namely, a refusal by Republican candidate Jim Tedisco to say how he would have voted had he been in the House. Tedisco has criticized the bill, but has responded to queries about his bottom-line vote by saying it's a "hypothetical question."

A funny thing has happened in the Minnesota election trial today -- they're actually making real progress!

After the judges handed down key rulings over the past week that finally established real rules -- they had heard enough from prior witnesses to rule what kinds of ballots would be admitted, and what standards to apply for any new pleas -- the campaigns are very quickly going through the motions with the election officials who do come through.

So far today they have fully examined -- that is, the witness is sworn in, direct-examined, cross-examined, re-direct-examined and excused -- election officials from several different counties, plus four municipalities in Hennepin County (Minneapolis) where the cities run elections. They also finished up an interview of another county official, which had begun yesterday afternoon.

Judge Denise Reilly even thanked and congratulated the parties for getting through "nine and a half" officials.

Who knows, at the rate they're now going they might actually be done by 2012.

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I'm not sure I agree with my boss's assessment of Washington.

You could argue that the entrenched interests stopped the Reagan and Bush administrations from doing what they would have liked, too.

I tend to think the town is more wired for inertia than anything, an entropy that stymies the ambitious goals of every president from Reagan to Obama. But I'm less despairing about it changing, too because crisis provokes change.

One sign of the crack is the Chamber of Commerce. They supported the stimulus plan and the morning after Obama's address to Congress next week, they'll be holding a panel discussion on how the money will be dispensed. Of course, the Chamber will fight Obama on the Employee Free Choice Act and any number of other issues but it's telling that they're not battling him on this.

On another matter I hear the Hilda Solis vote in the Senate could come as soon as Tuesday or at least an effort to invoke cloture and get it moving. It'd be nice to get the cabinet done by March.

The latest Fox News poll shows an interesting way that respondent perceptions can be manipulated for a desired result -- in this case, to focus on those big-spending Democrats in Washington.

In the latest poll, three questions in a row referred to the stimulus bill as "the economic stimulus and spending plan," with two of them listing an $800 billion price tag. It should be noted that the poll falsely says the bill "includes spending nearly $800 billion dollars of taxpayer money," omitting the fact that the bill's price tag includes $350 billion in tax cuts.

Then question 19: "Do you think the economic recovery legislation that passed last week is better described as a stimulus bill or a spending bill?"

The answer was Stimulus 31, Spending 52.

On the other hand, many other questions show results roughly in line with the AP/GfK poll earlier today: Voters widely approve of Obama, just barely approve of Congressional Dems, widely disapprove of Congressional Republicans, and narrowly approve of the stimulus bill. Voters say Obama genuinely sought to work in a bipartisan way with Republicans while the GOP did not return the favor, etc.

Not surprisingly, though, people think the imaginary bill that spends $800 billion in taxpayer money is too big.

... because they may come out of your nose in the course of uproarious laughter. Here's the headline on a new interview from the Austin American Statesman: "Bush rules improved the environment, says former EPA administrator".

And the money quote from Richard Greene, a regional director in the Bush-era EPA who's attempting to defend the agency's environmental enforcement record:

[D]uring the course of the Bush administration, the rules and regulations governing the operations of American business and industry were tightened and improved more than they have ever been. The tendency by some in the media, to pick one or two out of thousands of regulations and to conclude the agency didn't achieve its missions, is just bewildering to me. There were one or two things of controversy. Every one of those items you mentioned, the agency has a response to. The Bush administration even gets reversed in court because it overreached in regulatory rule-making initiatives, in federal appeals.


Yes, judges have overturned Bush environmental rules as overreaching ... in their readiness to violate the Endangered Species Act.

In Rolling Stone's new interview with Speaker Nancy Pelosi (D-CA), she embraces the notion of "collateral benefit" for major financial corporations that are benefiting from the $700 billion TARP bailout.

The "collateral benefit" idea was first elucidated by Barney Frank (D-MA), chairman of the House Financial Services Committee. As Frank explained it to PBS last month, the inextricable intertwining of ordinary Americans' livelihood with Wall Street's livelihood makes it impossible not to help big banks while saving the U.S. economy:

[Y]ou can't help the whole system without some incidental benefits to people that want help. It is the reverse of something terrible that we have learned to live with, collateral damage. That's in a war. ... We have the reverse of this. We have something called collateral benefit. That is, you want to get the credit system functioning again, but you can't create a whole new one from scratch. You have to work with what you have got. So one effect of helping the credit system is you are going to provide some collateral benefit, literally to people you would rather yell at.


Frank's "collateral benefit" theory makes no attempt to get at why more and more Americans have entrusted their financial future to the market over the past two decades, thereby making it impossible to save the economy without keeping Wall Street afloat.

But conservatives know the source of this cultural shift -- themselves. Right-wing strategists have long attempted to solidify a long-term Republican majority through promoting stock ownership. Listen to conservative godfather Grover Norquist, telling Frontline in 2005:

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