In it, but not of it. TPM DC

TPMDC has reported on how indignant Republicans are that Democrats are considering filibuster-proofing the coming climate change bill by making it part of the budget -- remember, 25 GOPers signed a letter nixing that option last week -- but the GOPers on the Senate environment committee are taking it to a new level.

In a letter to their fellow senators today, the environment panel's Republicans throw every rhetorical weapon in their arsenal at the Obama administration for putting revenues from carbon regulation in its budget. What they're afraid of is what the energy industry has called the "nuclear option," a budget item for climate change that would fast-track the bill to passage.

And to help strangle that option, the Republicans have renamed cap-and-trade emissions limits. They're now being christened an "energy tax," which creates a nice opening to slam Democrats as tax-hikers. Read the full letter after the jump, and fear the ominous "energy tax" ...

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Minnesota DFL spokesman Eric Fought has given TPM this statement about the comments by Coleman attorney Joe Friedberg, that Coleman will likely lose the election trial and then appeal:

"It's refreshing to have someone aligned with former Senator Coleman actually telling the truth. Mr. Friedberg is right -- Al Franken received more votes on Election Day. That was proven in a fair and accurate recount and will be proven once again at the conclusion of this meticulous and fair contest.

"When the results of the recount became evident, Coleman's legal team claimed that they were focused on the contest because that was where they could make their case. Now that they have failed to make their case in the courtroom, they claim that they will make their case in the appeals process. Clearly, there isn't a case to be made. Senator-elect Franken needs to be seated so he can move on to do the people's business."

The non-partisan Congressional Budget Office (CBO) dealt a bad blow to the Obama administration's budget today, releasing projections that show the expected 10-year deficit to hit $9.3 trillion -- that's $2.3 trillion more than the White House's budget estimated last month.

In the age of trillion-dollar financial bailouts, one might ask, what's a couple of more trillions between friends? It means a lot to congressional Democrats, who are preparing to release their own budget outlines next week and need a large new deficit figure like they need a hole in the head.

To get an idea of the kind of heated (and rather hypocritical, coming from George W. Bush's party) rhetoric that's already coming out from GOPers on this issue, listen to Sen. Chuck Grassley (R-IA):

CBO's word is the gospel. Congress and the administration need to get the message. The buck stops with the American taxpayer. People can afford only so much government spending, even for the worthiest-sounding causes.

And here's how House Minority Leader John Boehner (R-OH) put it:

This report should serve as the wake-up call this administration needs. We simply cannot continue to mortgage our children and grandchildren's future to pay for bigger and more costly government.

To some extent, this is nothing new. Former President Clinton took a similar hammering in 1995 from then-GOP House leader Newt Gingrich when the Congressional Budget Office (CBO) came out with numbers that differed sharply from the White House's.

And that tale had at least a quasi-happy ending, with the nation heading into the black by the time Clinton left office. But in these recessionary times, the best President Obama can hope for is keeping his promise to halve the budget deficit over the next five years.

For a taste of how Democrats aim to counter-punch in the coming clash over the budget, check out the White House's official talking points on the new CBO figures. TPMDC has obtained a copy, which is posted after the jump.

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Sen. Chris Dodd (D-CT) just spoke to home-state voters about his sudden emergence as the scapegoat for the watering-down of his executive pay amendment to the stimulus bill -- and the Banking Committee chairman was openly angry with the Treasury Department for not owning up to its role in the flap earlier this week.

Dodd defended his role in ensuring that Wall Street compensation limits made it into the stimulus. The senator expressed disappointment that Treasury let him twist in the wind until yesterday evening, when Secretary Tim Geithner admitted that officials from his department requested that Dodd's amendment be changed to grandfather in existing bonus contracts.

We'll have the video of Dodd's comments for you soon, but here's his key quote:

I wouldn't go around and change my own amendment within days of that if I didn't think it was merely technical in nature.

And so I'm angry about it and angry that, in a sense, I've been held up as sort of responsible for all of this, when, in fact, I responded to what I thought was a reasonable request at the time [from Treasury] ... it turned out to be far more than that.

But this back-and-forth over the executive pay amendment isn't the only issue that could put Dodd at odds with Geithner and White House economic adviser Larry Summers.

As I mentioned earlier today, Dodd has been openly skeptical of consolidating future financial regulatory power at the Federal Reserve, preferring to run broader regulation out of the FDIC -- and that position may not sit well with Geithner, the former head of the New York Fed, as well as Summers, who is widely tipped to be the next Fed chairman.

Late Update: Here's the video of Dodd.

Michael Steele will be speaking tonight to the Colorado Republican Party -- his first public appearance since he stopped doing interviews amid a series of gaffes about:

• Calling Rush Limbaugh an "entertainer" whose rhetoric is "incendiary" and "ugly" -- and then apologizing to Rush and praising his leadership.

• Declaring that he was "in the business of ticking people off."

• Saying in the GQ interview that abortion is an individual choice, then quickly backing off after it was published. This one really got the base angry -- for example, his former RNC rival (and then a supporter) Ken Blackwell said Steele needed to re-read the Bible.

• And just for extra comedic value, Steele said he was a fan of Frank Sinatra and the "Pack Rats."

Dick Wadhams, the chairman of the Colorado GOP, told the Denver Post that Steele's comments about abortion being an individual choice "have been a topic of conversation," but that he hasn't gotten any "angry phone calls" about it. "I think he was real quick to clarify what he said," said Wadhams.

The question that many people will be looking out for: Will Steele end up clarifying anything he says tonight?

On CNBC this morning, host Mark Haines -- who is catching heat this morning for arguing that Wall Street can't "be run well" by anyone making under $250,000 -- was at it again defending the need for high executive bonuses in order to keep Wall Street running.

But Haines' interviewee, Rep. Brad Sherman (D-CA), pushed right back at the host's conspicuously pro-Wall Street line.

When Sherman observed that "most people on Main Street do not" agree that AIG can't be put into government receivership (an assertion supported by recent polling on nationalization), Haines replied: "And what do the people on Main Street know about running a financial system?"

To which Sherman quipped: "What do AIG executives know about running a financial system? They only know how to destroy one."

Video of the exchange is below, and a full transcript is posted after the jump.

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As frustration with Sen. Chris Dodd (D-CT) reaches a fever pitch, both on the Hill and among his home-state voters, it's worth taking a step back and asking why some fellow Democrats left him to flail this week while they scrambled for cover from AIG anger.

Here's one potential answer, gleaned from months of watching the still-evolving debate over broader financial regulatory reform: depleting Dodd's political capital positions the Federal Reserve for a major increase in power by next year -- handing a plum position to Larry Summers, who has long been tipped as the next Fed chairman. As the WSJ put it:

Mr. Summers is widely seen as having ambitions beyond his current job. He originally wanted to be Treasury secretary, several Democrats say. He has long been described as a possible chairman of the Federal Reserve -- a job that could come open as soon as 2010, if Mr. Obama chose not to reappoint Ben Bernanke when his term runs out.

But why would kneecapping Dodd help those in D.C. who want regulatory power consolidated at the Fed?

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Jim Tedisco, the Republican candidate in the March 31 special election for Kirsten Gillibrand's old House seat, is now distancing himself from Rush Limbaugh.

"Rush Limbaugh is meaningless to me," Tedisco told an editorial board meeting of the Oneonta Daily Star. "The only constituency I'm worried about are the residents of the 20th Congressional District."

This race is going down to the wire, with a poll from a week ago showing Tedisco with only a four-point lead, after he'd previously led by 12.

This isn't exactly optimism from Team Coleman.

Two days ago, lead Coleman lawyer Joe Friedberg appeared on a local talk-radio show in Minnesota, for a wide-ranging interview on everything from criminal defense to college football -- and oh yeah, that his client is going to lose the trial and then appeal:

Friedberg: We've been trying this case with the appeal record in mind, and that's where we're going. And it's gonna be a very quick appeal, and then I'll know whether or not it worked.

Rosenbaum: Well, when you say a quick appeal, are you confident that you're gonna lose the case in front of the three-judge panel? By losing the case, I mean Norm ends up with less votes.

Friedberg: I think that's probably correct -- that Franken will still be ahead, and probably by a little bit more. But our -- you know, our whole argument was a constitutional argument. And it's an argument which is really suited for the Minnesota Supreme Court, not for the trial court. So we'll see whether we were right or not.

On the bright side, the normally Democratic Friedberg did say that he promised Norm Coleman that in case there's a new election, he will vote for Norm this time.

Late Update: Professor Rick Hasen from Loyola Law School has this review of the Coleman legal argument: "In the end, Coleman doesn't have a strong equal-protection argument. Then again, most of us thought George W. Bush didn't, either."

It seems that House Democratic leaders have settled on an interesting compromise in the debate over whether to use budget reconciliation rules to pass health care reform -- effectively shielding any future bill from a Senate filibuster.

The House budget will include a filibuster-proofing rule that only kicks in if Dems and the GOP cannot reach a health reform compromise by the time Congress breaks for its month-long August recess, the WaPo reports this morning.

That means that if Republicans can make good on their kumbaya rhetoric and reach common ground with the president's party by August, a longer debate and the ability to attempt a filibuster would be within their reach. But the House's intriguing plan might be a moot point if the Senate doesn't agree, since both chambers need to agree on a budget plan by next month.

And with Senate Budget Committee Chairman Kent Conrad (D-ND) openly pooh-poohing the reconciliation option, that agreement on filibuster-proofing is anything but a foregone conclusion.