Are We Governable?

We certainly aren’t acting like it. It’s time to reflect when good people — well liked on both sides of the aisle and certain to be reelected — bow out. Senator Evan Bayh’s (D-IN) retirement announcement yesterday was a shocker. Read his statement. I would lift up:

“After all these years, my passion for service to my fellow citizens is undiminished, but my desire to do so by serving in Congress has waned. For some time, I have had a growing conviction that Congress is not operating as it should. There is too much partisanship and not enough progress — too much narrow ideology and not enough practical problem-solving. Even at a time of enormous challenge, the peoples’ business is not being done.”

He cited the failure to pass the bipartisan deficit reduction commission and the failure to pass the jobs bill as evidence. He’s fed up and has decided he can be more effective elsewhere.

Senate Majority Leader Harry Reid (D-NV) was understandably livid to be informed of Bayh’s decision at 11:30 a.m., just after it leaked to the press. This put him and Senate Democrats at a huge disadvantage, both in terms of immediate public relations and in terms of the appearance that the Democrats are on the run going into November’s election. Former Senator Dan Coats (R-IN) has a good chance to wrest the seat from the Democrats. Delaware and North Dakota will almost certainly flip to the Republicans, Charlie Cook lists five other Democrats in tight races: Lincoln (AR); Bennet (CO); (IL) Burris retiring; Reid (NV); and Specter (PA). He also lists four currently Republican seats that are tossups because of the retirements of Bond (MO); Bunning (KY); Gregg (NH); and Voinovitch (OH). Right now it doesn’t look like the Republicans will pick up more than five or so, but that could change. The Senate is currently 59D-41R, so it would take a 10 seat pickup to flip it.

No matter what happens in November, the Senate is likely to fail to do the people’s business. Action is desperately needed on a wide range of issues. Here’s my short list of Senate actions required by the end of April:

1. Jobs bill
2. Deficit Reduction Commission
3. Already expired:

a. Estate Tax, currently repealed, but jumping to 2001 law in 2011
b. 71 other expired tax provisions, including the R&D tax credit

4. About to expire:

a. Highway authorization
b. flood insurance
c. postponement of the 21% cut in Medicare physician reimbursement rates

5. Defense supplemental to fund the Iraq and Afghanistan wars
6. budget resolution
7. Confirm non-controversial judges and other presidential appointees on “hold” for reasons having nothing to do with their qualifications.

We also desperately need financial reform and health reform this year, or else we risk another AIG and skyrocketing health insurance premiums.

Unfortunately, we’re going to test the theory that no action is better than action that confers partisan advantage.

About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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