In the USA...
November 7, 2012
How a Race in the Balance Went to Obama
By ADAM NAGOURNEY, ASHLEY PARKER, JIM RUTENBERG and JEFF ZELENY
Seven minutes into the first presidential debate, the mood turned from tense to grim inside the room at the University of Denver where Obama staff members were following the encounter. Top aides monitoring focus groups — voters who registered their minute-by-minute reactions with the turn of a dial — watched as enthusiasm for Mitt Romney spiked. “We are getting bombed on Twitter,” announced Stephanie Cutter, a deputy campaign manager, while tracking the early postings by political analysts and journalists whom the Obama campaign viewed as critical in setting debate perceptions.
By the time President Obama had waded through a convoluted answer about health care — “He’s not mentioning voucher-care?” someone called out — a pall had fallen over the room. When the president closed by declaring, “This was a terrific debate,” his re-election team grimaced. There was the obligatory huddle to discuss how to explain his performance to the nation, and then a moment of paralysis: No one wanted to go to the spin room and speak with reporters.
Mr. Romney’s advisers monitored the debate up the hall from the Obama team, as well as at campaign headquarters in Boston. Giddy smiles flashed across their faces as their focus groups showed the same results.
“Boy, the president is off tonight,” said Stuart Stevens, the senior Romney strategist, sounding mystified, according to aides in the room. Russ Schriefer, a senior adviser, immediately began planning television spots based entirely on clips from the debate. As it drew to a close, Gail Gitcho, Mr. Romney’s communications director in Boston, warned surrogates heading out to television studios: “No chest thumping.”
The Oct. 3 debate sharply exposed Mr. Obama’s vulnerabilities and forced the president and his advisers to work to reclaim the campaign over a grueling 30 days, ending with his triumph on Tuesday. After a summer of growing confidence, Mr. Obama suddenly confronted the possibility of a loss that would diminish his legacy and threaten his signature achievement, the health care law. He emerged newly combative, newly contrite and newly willing to recognize how his disdain for Mr. Romney had blinded him to his opponent’s strengths and ability to inflict damage.
After watching a videotape of his debate performance, Mr. Obama began calling panicked donors and supporters to reassure them he would do better. “This is on me,” the president said, again and again.
Mr. Obama, who had dismissed warnings about being caught off guard in the debate, told his advisers that he would now accept and deploy the prewritten attack lines that he had sniffed at earlier. “If I give up a couple of points of likability and come across as snarky, so be it,” Mr. Obama told his staff.
As his campaign began an all-out assault on Mr. Romney’s credibility and conservative views, the president soon was denouncing Mr. Romney’s budget proposals as a “sketchy deal” and charging that the Republican nominee was not telling Americans the truth.
Mr. Obama recognized that to a certain extent, he had walked into a trap that Mr. Romney’s advisers had anticipated: His antipathy toward Mr. Romney — which advisers described as deeper than what Mr. Obama had felt for John McCain in 2008 — led the incumbent to underestimate his opponent as he began moving to the center before the debate audience of millions of television viewers.
But as concerned as the White House was during the last 30 days of the campaign, its polls never showed Mr. Obama slipping behind Mr. Romney, aides said. The president was helped in no small part by the tremendous amount of money the campaign built up, which had permitted him to pound his Republican rival before he had ever had a chance to fully introduce himself to the nation.
That was just one of several ways that Mr. Obama’s campaign operations, some unnoticed by Mr. Romney’s aides in Boston, helped save the president’s candidacy. In Chicago, the campaign recruited a team of behavioral scientists to build an extraordinarily sophisticated database packed with names of millions of undecided voters and potential supporters. The ever-expanding list let the campaign find and register new voters who fit the demographic pattern of Obama backers and methodically track their views through thousands of telephone calls every night.
That allowed the Obama campaign not only to alter the very nature of the electorate, making it younger and less white, but also to create a portrait of shifting voter allegiances. The power of this operation stunned Mr. Romney’s aides on election night, as they saw voters they never even knew existed turn out in places like Osceola County, Fla. “It’s one thing to say you are going to do it; it’s another thing to actually get out there and do it,” said Brian Jones, a senior adviser.
In the last days of the campaign, Mr. Romney cast himself as the candidate that he may have wanted to be all along: moderate in tone, an agent of change who promised to bring bipartisan cooperation back to Washington, sounding very much like Barack Obama in 2008.
But he could never overcome the harm that Mr. Obama’s advertising had done over the summer or the weight of the ideological baggage he carried from the primary. On Tuesday night, a crestfallen Mr. Romney and his family watched as the television networks showed him losing all but one battleground state.
Even as the networks declared Mr. Obama the winner, Mr. Romney, who had earlier told reporters he had written only a victory speech, paused before the walk downstairs from his hotel room in Boston. It was 11:30 p.m., and Romney field teams in Ohio, Virginia and Florida called in, saying the race was too close for the candidate to give up. At least four planes were ready to go, and aides had bags packed for recount battles in narrowly divided states. Bob White, a close Romney friend and adviser, was prepared to tell the waiting crowd that Mr. Romney would not yet concede.
But then, Mr. Romney quietly decided it was over. “It’s not going to happen,” he said.
As Ann Romney cried softly, he headed down to deliver his speech, ending his second, and presumably last, bid for the White House. Four decades earlier, his father and inspiration, George Romney, a former Michigan governor failed in his own such quest.
By the end of the 30 days, after Air Force One carried Mr. Obama on an almost round-the-clock series of rallies, the president had reverted back to the agent of change battling the forces of the status quo, drawing contrasts between himself and Mr. Romney with an urgency that had been absent earlier in the race. Mr. Obama had returned, if not to the candidate that he was in 2008, as a man hungry for four more years to pursue his agenda in the White House.
A Difficult September
As the summer came to a close, the Romney campaign was stuck in a tense debate over how to rescue a struggling candidacy. On some nights, it did not even bother with the daily tracking poll. Why waste money on more bad news? Mr. Obama’s attack on Mr. Romney’s role at Bain Capital, the private equity firm he founded, was in full swing, the Democratic convention had been an unequivocal boost for the president, and a videotape had surfaced that caught Mr. Romney at a private fund-raiser saying that 47 percent of the nation did not pay taxes, a line that reinforced Democrats’ efforts to portray him as an out-of-touch elitist.
“We had struggled pretty dramatically in September,” said Neil Newhouse, Mr. Romney’s pollster. “The 47 percent remark came out, and that was on top of the bounce that Obama got from his convention, so needless to say September was not our best month. It showed in our data. It was grim.”
There was, advisers decided, one last opportunity on the horizon: the presidential debate in Denver.
Mr. Stevens argued that Mr. Obama’s dislike of Mr. Romney would lead the president to underestimate him. “They think there’s something intellectually inferior there,” he said later. Mr. Romney’s advisers also believed that Mr. Obama had demonized Mr. Romney to such an extent that their candidate would benefit when judged against the caricature.
In August, Mr. Romney began testing out one-liners on friends flying with him on his campaign plane. On issue after issue, Mr. Romney led discussions on how to frame his answers, to move away from the conservative tone of his primary contests in front of the largest audience he would have as a candidate.
Senator Rob Portman of Ohio was recruited to play Mr. Obama, and he embraced the role, even anticipating how the president would open his first debate, which fell on his wedding anniversary. “I’ve got to tell you, tonight’s a really special night,” Mr. Portman said, playing Mr. Obama. “I see my sweetie out there, boy, 20 years ago.”
(Mr. Romney’s advisers broke out in laughter when the real Mr. Obama opened with a similar line, and nodded approvingly when a very prepared Mr. Romney countered with a gracious response that even Democrats said put Mr. Obama off balance.)
Nothing had been left to chance: Mr. Romney put on full makeup and did his final practice in a room set up to replicate, down to the lighting and temperature, the hall where he would meet Mr. Obama.
On the Sunday before the debate, a group of top advisers and elected Republican officials from across the country, calling themselves the War Council, gathered in Boston to reassure Mr. Romney after his rough month — essentially saying “this is a place in the race, but it isn’t a destiny” as Beth Myers, a senior adviser, put it — and to boost his confidence. George W. Bush phoned Mr. Romney, too. Pointing to his own history, he predicted that Mr. Obama would fumble, according to aides.
Democrats advising Mr. Obama saw the same peril for the president in the first debate that Mr. Romney’s aides did. Ronald A. Klain, a Democratic strategist who has overseen debate preparation for presidential candidates for nearly 20 years, warned Mr. Obama at his very first debate session, a PowerPoint presentation in the Roosevelt Room on a sweltering day in mid-July, that incumbent presidents almost invariably lose their first debate.
“It’s easier for a candidate to schedule the time to prepare; it’s easy for the challenger to get away; the president has competing needs,” Mr. Klain told Mr. Obama, according to aides who witnessed the exchange.
Ken Mehlman, who had managed Mr. Bush’s re-election campaign in 2004, ran into one of Mr. Obama’s advisers at a party, and warned him that presidents are not used to being challenged, and unlike candidates, are out of practice at verbal jousting. Mr. Romney had gone through 20 debates over the past year.
Mr. Obama showed no interest in watching the Republican debates. But his aides studied them closely, and concluded that Mr. Romney was a powerful debater, hard to intimidate and fast to throw out assertions that would later prove wrong or exaggerated. At one debate, Gov. Rick Perry of Texas criticized Mr. Romney for having praised Arne Duncan, the education secretary, days earlier. Mr. Romney flatly denied it, leaving Mr. Perry speechless.
At the White House, Mr. Obama’s communications director, Dan Pfeiffer, took note of that moment, intending to mention it to Mr. Obama. He would later fault himself for failing to fully understand “the magnitude of the challenge” Mr. Romney’s debate style presented.
Mr. Obama displayed little concern. When he went to a resort outside Las Vegas for several days of debate preparation in September, his impatience with the exercise was evident when he escaped for an excursion to the Hoover Dam.
Mr. Klain and David Axelrod, a senior strategist, told Mr. Obama that he seemed distracted, but he shrugged them off. “I’ll be there on game day,” he said. “I’m a game day player.”
Shortly after the debate began, Mr. Obama’s aides realized they had made their own mistakes in advising Mr. Obama to avoid combative exchanges that might sacrifice the good will many Americans felt toward him. In Mr. Obama’s mock debates with Senator John Kerry, a Massachusetts Democrat, Mr. Kerry drew Mr. Obama into a series of intense exchanges, and Mr. Axelrod decided that they were damaging to the president.
In 90 minutes, Mr. Obama crystallized what had been gnawing concerns among many Americans about the president. He came across, as Mr. Obama’s advisers told him over the next few days, as professorial, arrogant, entitled and detached from the turmoil tearing the nation. He appeared to be disdainful not only of his opponent but also of the political process itself. Mr. Obama showed no passion for the job, and allowed Mr. Romney to explode the characterization of him as a wealthy, job-destroying venture capitalist that the Obama campaign had spent months creating.
The voter-analysis database back in Chicago noted a precipitous drop in perceptions of Mr. Obama among independent voters, starting that night and lasting for four days, long before the public polls picked it up. Voters who had begun turning to Mr. Obama were newly willing to give Mr. Romney another look.
What was arguably the most dismal night of Mr. Obama’s political career could hardly have come at a worse time: Early voting was already under way in some states. Absentee ballots were on voters’ coffee tables that very night.
After the debate, Mr. Obama called Mr. Axelrod on his way back to the hotel room. He had read the early reviews on his iPad.
“I guess the consensus is that we didn’t have a very good night,” Mr. Obama told Mr. Axelrod.
“That is the consensus,” Mr. Axelrod said.
For the next 30 days, Mr. Romney and his advisers tried to capitalize on Mr. Obama’s mistakes. And Mr. Romney continued his drift toward the center, softening his language on abortion and immigration from the positions that had defined him during the Republican primaries. It was something that the White House had expected he would do. Perhaps most important, the debate gave him a swagger, confidence and presidential bearing that had been absent.
Mr. Romney soon recognized the scope of his accomplishment. He flew from Denver to Virginia for a rally the next day, and as the motorcade headed toward the event, there was so much traffic that Mr. Romney and his top advisers thought there must have been an accident. In fact, the roads were jammed with people on their way to see him.
A Storm’s Effect
It was clear that Hurricane Sandy was going to upend Mr. Obama’s final week of campaigning, but aides in Chicago were determined to squeeze in one more visit to Florida. It almost became a calamity.
To get ahead of the storm, the president flew to Orlando on Oct. 28, the evening before a morning event. But overnight, the storm intensified and accelerated. Well before dawn, the Air Force One crew told the president’s advisers that if he was going to beat the storm back to Washington, he had to leave at once. His aides blanched at the image of Mr. Obama stuck in sunny Florida as the storm roared up the Eastern Seaboard.
The White House announced the change of plans at 6:45 a.m. The president returned to the White House at 11:07 a.m. and went directly into the Situation Room, canceling his political events. The decision was costly to a campaign so dependent on organization: Mr. Obama used his rallies to collect supporters’ telephone numbers and e-mail addresses.
Once the storm struck, it was more of a problem for Mr. Romney. It put him in the position of struggling to explain the skepticism he had expressed during the Republican primaries about a federal role in disaster relief. Even worse, the hurricane pushed him off the stage at a crucial time.
In Boston, Mr. Romney’s aides broke out in a chorus of groans as they watched on television as Gov. Chris Christie of New Jersey offered effusive praise of the president’s handling of the disaster. They viewed it as a self-serving act of disloyalty from a man whom they had expected to deploy that very weekend on Mr. Romney’s behalf. The praise of Mr. Obama from a Republican governor came at the same time Mr. Romney had been portraying Mr. Obama as partisan and polarizing.
The same week, the president’s campaign released an advertisement in which another Republican, Colin Powell, a former secretary of state, endorsed Mr. Obama. The ad, Mr. Obama’s aides said, produced a spike of support from independent voters. (Mr. Obama’s aides grabbed the clip from a television interview with Mr. Powell, deciding not to chance asking him for permission).
Mr. Romney was finding Ohio, a state central to his victory, a stubborn target, as Mr. Obama benefited from the auto industry rescue he championed and that Mr. Romney had opposed. The Romney campaign sought to undermine Mr. Obama with an advertisement misleadingly implying that Jeep was moving jobs from Ohio to China. By every measure, the ad backfired, drawing attacks by leaders of auto companies that employed many of the blue-collar voters that Mr. Romney was trying to reach.
The futility of that effort was apparent outside the sprawling Jeep assembly plant in Toledo, which had just had a $500 million renovation for production of a new line of vehicles, a project requiring 1,100 new workers.
“Everyone here knows someone who works at Jeep,” Jim Wessel, a supply representative making a sales visit. He said no one would believe the ad. Speaking of Mr. Obama’s efforts to rescue the auto industry, he said,“I can just tell you I’m glad he did it.”
Mr. Romney was running out of states. He made an impulsive run on Pennsylvania, chasing what his aides said were tightening polls there. Mr. Romney had spent little time or money there before roaring in during the campaign’s final hours.
On the last weekend of the race, Mr. Romney scheduled a rally in Bucks County. Supporters began arriving at 2 p.m. But his plane was delayed, and as the hours rolled on — and the temperatures dropped — dozens of people were temporarily blocked by the Secret Service as they sought to leave. Mr. Romney arrived to an unpleasant scene: clusters of angry, cold supporters.
That Tuesday, Mr. Romney lost the state by 5 percentage points and watched Mr. Obama hold a 50,000-vote lead in Florida — a state that he had once been confident of winning.
Michael Barbaro, Michael D. Shear and Peter Baker contributed reporting.
November 7, 2012
Little to Show for Cash Flood by Big Donors
By NICHOLAS CONFESSORE and JESS BIDGOOD
At the private air terminal at Logan Airport in Boston early Wednesday, men in unwrinkled suits sank into plush leather chairs as they waited to board Gulfstream jets, trading consolations over Mitt Romney’s loss the day before.
“All I can say is the American people have spoken,” said Kenneth Langone, the founder of Home Depot and one of Mr. Romney’s top fund-raisers, briskly plucking off his hat and settling into a couch.
The biggest single donor in political history, the casino billionaire Sheldon Adelson, mingled with other Romney backers at a postelection breakfast, fresh off a large gamble gone bad. Of the eight candidates he supported with tens of millions of dollars in contributions to “super PACs,” none were victorious on Tuesday.
And as calls came in on Wednesday from some of the donors who had poured more than $300 million into the pair of big-spending outside groups founded in part by Karl Rove — perhaps the leading political entrepreneur of the super PAC era — he offered them a grim upside: without us, the race would not have been as close as it was.
The most expensive election in American history drew to a close this week with a price tag estimated at more than $6 billion, propelled by legal and regulatory decisions that allowed wealthy donors to pour record amounts of cash into races around the country.
But while outside spending affected the election in innumerable ways — reshaping the Republican presidential nominating contest, clogging the airwaves with unprecedented amounts of negative advertising and shoring up embattled Republican incumbents in the House — the prizes most sought by the emerging class of megadonors remained outside their grasp. President Obama will return to the White House in January, and the Democrats have strengthened their lock on the Senate.
The election’s most lavishly self-financed candidate fared no better. Linda E. McMahon, a Connecticut Republican who is a former professional wrestling executive, spent close to $100 million — nearly all of it her own money — on two races for the Senate, conceding defeat on Tuesday for the second time in three years.
“Money is a necessary condition for electoral success,” said Bob Biersack, a senior fellow at the Center for Responsive Politics, which tracks campaign spending. “But it’s not sufficient, and it’s never been.”
Even by the flush standards of a campaign in which the two presidential candidates raised $1 billion each, the scale of outside spending was staggering: more than $1 billion all told, about triple the amount in 2010.
Mr. Obama faced at least $386 million in negative advertising from super PACs and other outside spenders, more than double what the groups supporting him spent on the airwaves. Outside groups spent more than $37 million in Virginia’s Senate race and $30 million in Ohio’s, a majority to aid the Republican candidates.
The bulk of that outside money came from a relatively small group of wealthy donors, unleashed by the Supreme Court’s Citizens United decision, which allowed unlimited contributions to super PACs. Harold Simmons, a Texas industrialist, gave $26.9 million to super PACs backing Mr. Romney and Republican candidates for the Senate. Joe Ricketts, the owner of the Chicago Cubs, spent close to $13 million to bankroll a super PAC attacking Mr. Obama over federal spending.
Bob Perry, a Texas homebuilder, poured more than $21 million into super PACs active in the presidential race and the Senate battles in Florida and Virginia, where Democrats narrowly prevailed. A donor network marshaled by Charles and David Koch, the billionaire industrialists and conservative philanthropists, reportedly sought to raise $400 million for tax-exempt groups that are not required to disclose their spending.
Mr. Adelson’s giving to super PACs and other outside groups came to more than $60 million, though in public Mr. Adelson did not seem overly concerned about the paltry returns on his investment.
“Paying bills,” Mr. Adelson said on Tuesday night when asked by a Norwegian reporter how he thought his donations had been spent. “That’s how you spend money. Either that or become a Jewish husband — you spend a lot of money.”
Flush with cash, Republican-leaning groups outspent Democratic ones by an even greater margin than in 2010. But rather than produce a major partisan imbalance, the money merely evened the playing field in many races.
In several competitive Senate races, high spending by outside groups was offset to a large extent with stronger fund-raising by Democratic candidates, assisted at the margins by Democratic super PACs. For much of the fall, Mr. Obama and Democratic groups broadcast at least as many ads, and sometimes more, in swing states than Mr. Romney and his allied groups, in part because Mr. Obama was able to secure lower ad rates by paying for most of the advertising himself. Mr. Romney relied far more on outside groups, which must pay higher rates.
Haley Barbour, a former Mississippi governor who helped Mr. Rove raise money for American Crossroads and its sister group, Crossroads Grassroots Policy Strategies, said that without a blitz of coordinated anti-Obama advertising in the summer, the campaign would not have been as competitive.
“I believe that some of that money actually kept Romney from getting beat down by the carpet-bombing he underwent from the Obama forces,” Mr. Barbour said. “I did look at it more as us trying to keep our candidates from getting swamped, like what happened to McCain.”
Some advocates for tighter campaign financing regulations argued that who won or lost was beside the point. The danger, they argued, is that in the post-Citizens United world, candidates and officeholders on both sides of the aisle are far more beholden to the wealthy individuals who can finance large-scale independent spending.
“Unlimited contributions and secret money in American politics have resulted in the past in scandal and the corruption of government decisions,” said Fred Wertheimer, the president of Democracy 21, a watchdog group. “This will happen again in the future.”
But on Wednesday, at least, the nation’s megadonors returned home with lighter wallets and few victories.
As the morning wore on at Logan Airport, more guests from Mr. Romney’s election-night party at the Boston Convention and Exhibition Center trickled in, lugging garment bags and forming a small line at the security checkpoint.
“It’s going to be a long flight home, isn’t it?” said one person, who asked not to be identified.
The investor Julian Robertson, who held fund-raisers for Mr. Romney and gave more than $2 million to a pro-Romney super PAC, arrived with several companions. Mr. Robertson spotted an acquaintance: Emil W. Henry Jr., an economic adviser and a fund-raiser for Mr. Romney, to whom Mr. Robertson had offered a ride on his charter.
“Aww, group hug,” Mr. Henry said.
Ashley Parker contributed reporting.
November 8, 2012
With Obama Re-Elected, States Scramble Over Health Law
By ABBY GOODNOUGH and ROBERT PEAR
After nearly three years of legal and political threats that kept President Obama’s health care law in a constant state of uncertainty, his re-election on Tuesday all but guarantees that the historic legislation will survive.
Now comes another big hurdle: making it work.
The election came just 10 days before a critical deadline for states in carrying out the law, and many that were waiting for the outcome must now hustle to comply. Such efforts will coincide with epic negotiations between Mr. Obama and Congress over federal spending and taxes, where the administration will inevitably face pressure to scale back some of the costliest provisions of the law.
Mr. Obama faces crucial choices about strategy that could determine the success of the health care overhaul: Will the administration, for example, try to address the concerns of insurers, employers and some consumer groups who worry that the law’s requirements could increase premiums? Or will it insist on the stringent standards favored by liberal policy advocates inside and outside the government?
But for now — with Democrats retaining control of the Senate and Mitt Romney’s vow to “repeal and replace” the law no longer a threat — supporters are exulting.
“For our district and for our country, the debate on Obamacare is over,” declared Bill Foster, a Democrat elected Tuesday to the House from a suburban Chicago district.
Many supporters feel one of Mr. Obama’s most important tasks will be to step up efforts to promote and explain the law to a public that remains sharply divided and confused about it. In exit polls on Tuesday, nearly half of voters said the law should be either partly or fully repealed.
“There is still a tremendous amount of disinformation out there,” said Jeff Goldsmith, a health industry analyst based in Virginia. “If you actually are going to implement this law, people need to know what’s in it — not just the puppies-and-ice-cream parts, but ‘Here are the broader social changes intended and how they can help you.’ ”
Already, advocacy groups eager for the law to succeed have shifted into a higher gear. One such group, Families USA, held a conference call on Thursday with about 300 advocates around the country to strategize about next steps, said Ronald F. Pollack, the group’s executive director. Enroll America, a sister organization, will hold focus groups next week in Ohio, Pennsylvania and Texas to collect ideas for a public education campaign.
Much depends on the states as they decide in the coming weeks and months whether to build online marketplaces known as insurance exchanges, where individuals and small businesses can shop for health plans, and whether to expand their Medicaid programs to reach many more low-income people.
The clock is ticking on the exchange question in particular: states have until next Friday to decide whether they will build their own exchange or let the federal government run one for them. Some states have asked the administration for more time.
So far, only about 15 states and the District of Columbia have created the framework for exchanges through legislation or executive orders; three others have committed to running exchanges in partnership with the federal government. A number of Republican governors, including those in Arizona, Idaho, New Jersey, Virginia and Tennessee, had said they would decide after the election, giving themselves only a 10-day window before the deadline.
“I would expect that starting today there are a significant number of fascinating conversations going on behind closed doors in state capitols all over America,” said John McDonough, a professor of public health at Harvard who helped draft the law.
With deficit-reduction talks beginning in Washington next week, some observers believe that the law’s most expensive provisions — like federal subsidies to help families with incomes up to 400 percent of the poverty level pay their insurance premiums — could be scaled back in the name of deficit reduction.
“We know folks on the Hill are talking about this already,” said David Smith, an analyst at Leavitt Partners, a consulting firm that advises states on the law. “There are a lot of competing factors, but they have to find the savings and we believe health care will be one of the places where they will go.”
Another target for budget-cutters could be the planned expansion of Medicaid to people with incomes up to 133 percent of the poverty level — a crucial step toward the law’s goal of insuring about 30 million Americans.
When the Supreme Court upheld the health care law in June, it ruled that states do not have to participate in the expansion. For those that do, the federal government would pay the full cost for the first three years, starting in 2014, and gradually decrease its share to 90 percent in 2020 and beyond. As part of a deficit-reduction deal, Mr. Smith said, the Obama administration could agree to reduce the federal share.
In the nearer term — perhaps within weeks — the Department of Health and Human Services is expected to issue a torrent of federal regulations and informal guidance to carry out the law. Without these rules, insurance executives said, it is virtually impossible for them to devise the health plans that will be offered in every state through insurance exchanges.
The marketing of those health plans begins in October 2013, for coverage starting Jan. 1, 2014, the date by which the law requires most people to have insurance or pay a tax penalty. But state insurance regulators say they need to start reviewing the new products — for compliance with federal and state laws — much earlier, in the first few months of 2013.
Justine G. Handelman, a vice president of the Blue Cross and Blue Shield Association, said insurers were still waiting for the administration to define “essential health benefits” and provide details of “insurance market reforms” and consumer protections at the heart of the law.
The law says, for example, that rates for older subscribers cannot be more than three times the rates for young adults. But, Ms. Handelman said, the administration has not said how those ratios will be calculated. Will the government compare premiums for a 64-year-old and a 19-year-old? Or will it compare the rates for different age groups — 55 to 64 and 19 to 25, for example?
Although there is no deadline for states to indicate whether they will expand Medicaid, hospitals and other stakeholders are already lobbying the states to do so. Hospitals will see reimbursement rates trimmed under the health care law, and expanding Medicaid would bring new paying customers to help cover their losses.
Some states are worried about the cost, regardless, and have talked about pursuing a partial expansion instead. Whether the Obama administration would allow that is one of the many questions awaiting answers.
While the prospect of repeal appears dead, Professor McDonough predicted that Republicans in Congress would still seek to delay the fulfillment of the law’s major components — the mandate that most Americans carry health insurance by January 2014, for example, and the premium subsidies. That would be “a trap,” he said, because the Senate could theoretically flip to Republican control in November 2014, presenting “a new set of opponents to blockade implementation.”
Brett Graham, a partner at Leavitt Partners, said that he did not think a delay was likely, but that the Obama administration, realizing it may be impossible for many states to be ready by January 2014, might redefine what they need to do by then.
“Part of this is redefining what the expectation is,” he said, “and we fully expect them to do that.”
November 8, 2012
Congress Sees Rising Urgency on Fiscal Deal
By JONATHAN WEISMAN
WASHINGTON — Senior lawmakers said Thursday that they were moving quickly to take advantage of the postelection political atmosphere to try to strike an agreement that would avert a fiscal crisis early next year when trillions of dollars in tax increases and automatic spending cuts begin to go into force.
Senator Bob Corker, Republican of Tennessee, said he had begun circulating a draft plan to overhaul the tax code and entitlements, had met with 25 senators from both parties and “been on the phone nonstop since the election.”
Senator Olympia J. Snowe, the Maine Republican who will retire at the end of the year, made it clear that she intended to press for a deal to avert the so-called fiscal cliff and get serious on the deficit, lame duck or not.
“The message and signals we send in the coming days could bear serious consequences for this country,” she said. “It could trigger another downgrade. It could trigger a global financial crisis. This is a very consequential moment.”
Senator Charles E. Schumer of New York, the No. 3 Senate Democrat, extended an olive branch to Republicans, suggesting Thursday that he could accept a tax plan that leaves the top tax rate at 35 percent, provided that loophole closings would hit the rich, not the middle class. He previously had said that he would accept nothing short of a return to the top tax rate of Bill Clinton’s presidency, 39.6 percent.
“If you kept them at 35, it’s still much harder to do,” Mr. Schumer said, “but obviously there is push and pull, and there are going to be compromises.”
The nonpartisan Congressional Budget Office underscored the stakes in a report Thursday that framed Washington’s dilemma. It said that if automatic spending cuts go into force and all the Bush-era tax cuts expire, the nation would slip into recession next year and unemployment would rise to 9.1 percent, from October’s rate of 7.9 percent. But simply canceling those deficit-reduction measures would risk a financial crisis that would make matters worse, the report said.
The accelerated activity in Washington showed that members of Congress believed the election had amplified the imperative to strike a deal. Still, signs that the two sides are open to some compromise are no guarantee that they can reach an agreement after warring for two years. Many Republicans will continue to resist any proposal that can be read as increasing taxes, and many Democrats will balk at changes in entitlement programs and spending cuts.
Lawmakers also have a wary eye on the electoral landscape. Senator Mitch McConnell of Kentucky, the Republican leader and a crucial player in budget talks, is up for re-election in 2014 and may resist any deal that could foster opposition back home.
But members of Congress clearly see recent events creating an opening in the postelection session of Congress, when some retiring and defeated lawmakers could have a freer hand on voting for legislation, absent political consequences. Republicans were weakened by losing seats in both the House and the Senate, while Democrats are eager to move to issues like immigration, which animated Latino voters and helped deliver victory on Tuesday. “The conditions are there to act,” Mr. Corker said. “I think the environment is different now.”
Even conservative Republicans are signaling newfound flexibility. Aides said that on a conference call of House Republicans, a number of lawmakers spoke up to say they needed to give their leaders breathing room and avoid brinkmanship.
The budget office report suggested that allowing the Bush-era tax cuts to expire for households earning more than $250,000 a year — a position strenuously opposed by Congressional Republicans — would have relatively modest economic impacts, versus many of the other components of the fiscal cliff.
“House Republicans must end their intransigence on tax cuts for the very wealthy and sit down on a bipartisan basis to finish the work of this Congress,” said Representative Sander M. Levin of Michigan, the ranking Democrat on the House Ways and Means Committee.
A separate C.B.O. report released Thursday threw cold water on Republican beliefs that a simplified tax code that lowered income and payroll taxes and closed loopholes to make up for lost revenue would substantially close the deficit by boosting economic growth. Such a plan would raise about $100 billion a year by 2020, far less than Democrats say is necessary, the report said.
The forces arrayed against a budget deal remain powerful, and the gap between the parties — at least in their public postures — is wide. Liberals, backed by Senator Harry Reid of Nevada, the majority leader, say Social Security should not be part of any deal. Senator Bernie Sanders, independent of Vermont and a standard-bearer for the left, said Thursday that virtually all deficit reduction should come from tax increases on the rich, closing loopholes that have allowed profitable corporations to avoid paying any corporate income taxes and cutting military spending.
Mr. Corker said many Senate Republicans were willing to agree to a deal that raises more revenue through an overhaul of the tax code, and that additional revenue must be generated by taxation, not just economic growth. In a speech Thursday in his home state of South Carolina, Senator Lindsey Graham said that fellow Republicans should hold the line on tax rates, but that they had to accept that a reformed tax code would raise more revenues. Only then, he said, can they expect Democrats to negotiate changes to entitlement spending.
Speaker John A. Boehner, Republican of Ohio, has said he will agree only to a deal that lowers the top income tax rate from the current 35 percent, not from the top rate that is scheduled to kick in on Jan. 1, 39.6 percent. He said that additional revenue would be generated by economic growth spurred by a simpler tax code, not by higher taxes.
Spinning revenue from tax cuts like that, Mr. Schumer said, is a “Rumpelstiltskin fairy tale.”
Conservatives are not giving in.
“We will certainly face many battles in Congress in the coming months that will give us the opportunity to clearly articulate the failures of liberalism and the common sense of conservative alternatives,” Senator Jim DeMint, Republican of South Carolina, said Thursday on Facebook. “We must not shrink from the fight on Capitol Hill.”
Andrew Siddons contributed reporting.
This article has been revised to reflect the following correction:
Correction: November 9, 2012
An earlier version of this article misspelled the given name of a contributing reporter. He is Andrew Siddons, not Andrews.
November 8, 2012
Speaker ‘Confident’ of Deal With White House on Immigration
By JENNIFER STEINHAUER
WASHINGTON — Fresh off an election in which Hispanic voters largely sided with Democrats, Speaker John A. Boehner said Thursday that he was “confident” Congress and the White House could come up with a comprehensive immigration solution.
Immigration reform is “an important issue that I think ought to be dealt with,” Mr. Boehner, an Ohio Republican, said in an interview with Diane Sawyer on “ABC World News.”
“This issue has been around far too long,” he said, “and while I believe it’s important for us to secure our borders and to enforce our laws, I think a comprehensive approach is long overdue, and I’m confident that the president, myself, others, can find the common ground to take care of this issue once and for all.”
The words conveyed a new sense of urgency from Mr. Boehner, who said earlier this year that he thought it would be politically impossible to tackle a Republican proposal on the Dream Act, which sought to open a path to citizenship for some students in the United States illegally.
According to exit polls by Edison Research, President Obama won 71 percent of the Hispanic vote compared with Mitt Romney’s 27 percent, a gap greater than Mr. Obama’s 36-point advantage with those voters over John McCain in 2008.
Though Mr. Boehner did not elaborate on his ideas, nor give a time frame, many lawmakers want to tackle immigration legislation in the next session of Congress. The lame-duck session starting next week will be devoted to dealing with pressing tax and deficit issues.
Mr. Boehner’s comments caught the attention of Senate Democrats.
“This is a breakthrough to have the speaker endorse the urgency of comprehensive immigration reform,” said Senator Charles E. Schumer of New York in a statement. “Democrats in the Senate look forward to working with him to come up with a bipartisan solution.”
Just seven months ago, when Senator Marco Rubio, Republican of Florida, first floated his compromise version of the Dream Act, Mr. Boehner called the idea “difficult at best” to take up in the House, saying “the problem with this issue is that we are operating in a very hostile political environment.”
But, after the election, Republicans could be more open to taking their cues from Mr. Rubio, whom many see as their best hope for helping to expand their voter base and guide the way on immigration.
Obama to make economy statement Friday
By Agence France-Presse
Thursday, November 8, 2012 20:13 EST
WASHINGTON — US President Barack Obama will make Friday his major first post-election intervention in the looming showdown with Republicans over debt and spending, with an on-camera White House statement.
A White House official told AFP that the remarks, in the presidential mansion’s ornate East Room, would focus on “the action we need to take to keep our economy growing and reduce our debt.”
Obama is expected to weigh in on the cresting row with Republicans over expiring tax cuts, looming automatic spending reductions and reducing the deficit, which experts warn could spark a recession if not defused.
The president says Americans sent a message to Washington by returning him for a second term on Tuesday, and that both parties should put aside partisan interests to focus on the economy first.
Obama campaigned for re-election on the idea that the wealthiest Americans should pay higher taxes, and will feel he has a mandate for such an approach.
But Republicans refuse to countenance any tax hikes and insist on cuts to spending on social programs that many Democrats cherish.
John Boehner, the Republican speaker of the House of Representatives, has laid down the terms of his party’s negotiating approach to the row, known as the “fiscal cliff.”
He said Republicans were ready to make a short-term fix to avert the spending cuts and higher taxes slated to come into law on January 1.
But Boehner said a longer-term deal to cut the country’s debt and deficit burden would have to rely on a shakeup of the tax code — cutting loopholes and special breaks — to boost government revenues rather than Democrat-favored tax increases.
“Mr President, the Republican majority here in the House stands ready to work with you to do what’s best for our country,” Boehner said Wednesday.
“What we can do is avert the cliff in a manner that serves as a downpayment on and a catalyst for major solutions enacted in 2013 to begin to solve the problem.”
Boehner made clear that a comprehensive long-term plan for debt reduction was unlikely in the next seven weeks of the outgoing “lame duck” Congress, but that a short-term compromise could be achieved.
That was a challenge to Obama, who has previously opposed calls for a short-term fix that would just mean “kicking the can down the road.”
November 8, 2012
Colorado Democrats Elect State’s First Gay Speaker
By DAN FROSCH
DENVER — Democratic lawmakers in Colorado sustained a wrenching defeat in the final days of the legislative session last spring. A bill that would have allowed civil unions for same-sex couples was blocked from getting a full vote in the State House of Representatives by Republican leaders, who knew Democrats had the votes to pass it.
But this week, Democrats here regained control of the House, buttressed by a favorably redrawn legislative map and simmering anger over the civil unions debate.
And on Thursday, punctuating the moment, Democratic lawmakers elected the state’s first openly gay speaker of the House.
The new speaker, State Representative Mark Ferrandino, a Democrat from Denver, was a co-sponsor of the civil unions bill and has vowed to bring it back when the session resumes in January.
“Twenty years ago, Amendment 2 passed in Colorado,” an emotional Mr. Ferrandino said after his election, referring to a 1992 state constitutional amendment passed by voters that banned laws protecting gay men and lesbians from discrimination. “And now we have our first openly gay speaker. I think that is an amazing turnaround for our state. It speaks volumes for how much we’ve grown.”
Amendment 2, which led some to call Colorado “the hate state,” was ultimately ruled unconstitutional by the United States Supreme Court. A separate 2006 amendment to the state Constitution defined marriage as being only between a man and a woman.
Mr. Ferrandino said that the economy and education were legislative priorities, but that in terms of expanding rights for gay men and lesbians, “civil unions is the thing we really are pushing for.”
California and Rhode Island have openly gay House speakers, according to the Gay and Lesbian Victory Fund, which supports gay candidates. And a lesbian lawmaker will most likely become speaker in Oregon, said Denis Dison, a spokesman for the group.
Over the past two years, Republicans have controlled Colorado’s House of Representatives by a single vote, forcing Democrats to seek their support on contentious legislation like on civil unions.
This year, even a special legislative session called by Gov. John W. Hickenlooper, a Democrat, in a last-ditch effort to pass civil unions could not resolve the heated impasse over the issue.
But Democrats now have a 37-to-28 majority in Colorado’s House and outnumber Republicans, 20 to 15, in the Senate.
Colorado, which is split among Democrats, Republicans and unaffiliated voters, also supported President Obama for a second time on Tuesday.
And despite its reputation as a swing state, Colorado has been trending toward the Democrats in recent years, nudged by a growing number of Latinos, who now make up 20 percent of the state’s population and who supported Mr. Obama in overwhelming numbers, according to exit polls.
“I give the Obama machine a great deal of credit,” said State Representative Frank McNulty, a Republican from Highlands Ranch and the departing House speaker. “They were devastatingly efficient.”
Mr. McNulty, who was instrumental in blocking the civil union vote in May, said Democrats had successfully been identifying like-minded voters for the last six years.
“What they have is a machine,” he said.
With their newfound power, Democrats also believe they can pass another prized piece of legislation, one that would allow state colleges and universities to offer discounted tuition to illegal immigrants.
Colorado lawmakers and immigrant rights advocates have tried to pass such legislation in recent years without success.
November 8, 2012
Ethics in Play, Voters Oust Incumbents Under Scrutiny
By ERIC LIPTON
WASHINGTON — It turns out that ethics really do matter here in Washington, at least according to some of the nation’s voters.
In races around the country, an unusually large number of lawmakers facing charges of wrongdoing were unceremoniously ousted from their jobs on Tuesday — which is quite rare, because more than 90 percent of the incumbents seeking re-election to Congress typically return for another term.
The list of those who lost this year includes Representative Laura Richardson, Democrat of California, who was reprimanded in August by the House Ethics Committee for illegally forcing her staff to help her run for re-election and then obstructing the investigation by altering or destroying evidence. There is Representative David Rivera, Republican of Florida, who last month was charged by the Florida Commission on Ethics with concealing a $1 million consulting contract with a Miami gambling business while serving in the State House.
Of those defeated, perhaps the one with the highest profile was Representative Shelley Berkley, Democrat of Nevada, who was seeking a seat in the United States Senate. Her opponent was the only Republican Senate candidate to win in a state that President Obama also won.
Ms. Berkley spent much of her campaign on the defensive after the House Ethics Committee opened a formal investigation into allegations, first raised in The New York Times, that she may have used her office to benefit her husband’s Las Vegas medical practice, in part by intervening with federal officials to prevent the closing of a kidney transplant center that his practice helped run.
Others defeated were Representative Joe Baca, Democrat of California, whose family ran a charity that took donations from corporations and other groups that have appealed to him for help in Congress, and Representative Joe Walsh, Republican of Illinois, who had long been plagued by financial questions, including about tax liens, a foreclosure on a condominium and failing to pay child support.
The ethics issues were not the only matters in the race. But in a number of cases, they appeared to play a role.
“Politicians ignore ethics issues at their own peril,” said Melanie Sloan, who runs a Washington-based nonprofit group that annually publishes a report titled the “Most Corrupt Members of Congress.” “Americans are overwhelmingly cynical about their government, but they still expect ethical conduct from their congressmen.”
In total, 11 of the lawmakers included in the “Most Corrupt” report over the last two years, out of a total 31 featured, have been defeated or are retiring, including New Hampshire’s only two House members: Representatives Charles Bass, a Republican, and Frank Guinta, a Republican.
For lawmakers facing Congressional ethics inquiries, there is at least one advantage to a political career cut short: the House and Senate ethics committees lose jurisdiction over them once they leave office, so no charges can be brought.
But there is a precedent for at least releasing reports on investigations even after lawmakers make their exit. The Senate ethics committee released a report about Senator John Ensign, Republican of Nevada, who helped his former chief of staff get a job as a lobbyist after Mr. Ensign had an affair with the aide’s wife. Mr. Ensign stepped down in April 2011, just before he was going to have to testify under oath to ethics investigators.
The hard luck this year started during the party primaries, when some incumbents under ethics clouds fell to challengers. They included Representatives Jean Schmidt, Republican of Ohio, who improperly allowed a Turkish-American group in Ohio to pay her legal fees, and Silvestre Reyes, Democrat of Texas, who is currently the subject of an ethics investigation and has been accused of paying nearly $600,000 to himself or his family from campaign funds. Also defeated in a primary was Representative Cliff Stearns, Republican of Florida, who was publicly accused by a Florida court clerk of trying to bribe a political rival into ending his campaign.
The list of winners on Tuesday included other lawmakers facing allegations of wrongdoing, like Representative Jesse L. Jackson Jr., Democrat of Illinois, who has been on medical leave for months and is also under investigation by federal authorities in the possible misuse of campaign money.
The Chicago Sun-Times reported on Wednesday that Mr. Jackson may be negotiating a plea deal. He is the subject of a separate House ethics committee inquiry into whether a longtime supporter improperly tried to secure him an appointment to the United States Senate after Mr. Obama was elected president.
Representative Robert E. Andrews, Democrat of New Jersey, who is accused of using $13,000 in campaign funds to pay for a family trip to Scotland for a wedding, also survived Election Day.
Ken Boehm, co-founder of the National Legal and Policy Center, a Virginia-based group that has filed ethics complaints, said some lawmakers under investigation come from districts dominated by one party. “These are people who it appears believe they are above the law and immune from defeat,” he said.
This article has been revised to reflect the following correction:
Correction: November 9, 2012
An earlier version of this article misstated the party affiliation of Representative Frank Guinta. He is a Republican, not a Democrat.
November 8, 2012
In Michigan, a Setback for Unions
By STEVEN GREENHOUSE
Hoping to set a precedent for other states, Michigan’s labor unions spent months pushing a referendum to amend the state’s Constitution to prohibit the legislature from ever enacting a law that would curb the powers of public employee unions.
But this push to enshrine collective bargaining rights in the Constitution was roundly defeated in Tuesday’s election, 58 to 42 percent — an embarrassing loss for labor in a state known as a cradle of American unionism.
While union leaders have been quick to claim success in other Election Day contests, from the re-election of President Obama to the defeat of a California proposal that would have limited their ability to spend union dues in political campaigns, they have been largely silent on the Michigan loss.
Some political experts say the measure was voted down for the same reason that the four other ballot initiatives to amend Michigan’s Constitution were defeated: voters were wary of tinkering with their state’s Constitution.
But business leaders and some labor analysts say that the unions overreached by trying to pass sweeping language that would have potentially overturned all or parts of other state laws and perhaps cost taxpayers hundreds of millions of dollars.
“Voters were afraid of amending the Constitution to give that much power to organized labor and make them a superlegislature above their representatives,” said F. Vincent Vernuccio, director of labor policy at the Mackinac Center for Public Policy, a conservative research center. He said many Democrats and even some private sector union members saw the measure as “a power grab by government unions.”
Union leaders do not concede that they were overreaching. They mostly fault a hard-hitting advertising campaign by business-backed groups that opposed the measure, known as Proposal 2.
Karla Swift, president of the Michigan A.F.L.-C.I.O., said that business heavily outspent labor in a blitz of ads during the two weeks before Election Day. Campaign spending reports showed that before then, the labor side had spent $21.5 million to promote the proposal while business groups and conservative donors had spent $23.4 million.
“It’s very hard to stay in the game against a campaign of lies and distortions,” Ms. Swift said. She said the other side’s advertisements were inaccurate in claiming that Proposal 2 would bar school districts from firing teachers who had committed crimes.
Michigan unions did succeed with a separate referendum campaign to overturn a law that allowed the state to appoint emergency managers to run financially distressed communities, including revising or scrapping union agreements.
But they appear to have misjudged the level of public support for entrenching union rights in the state Constitution, even in a state that is home to influential unions like the United Auto Workers.
Dale Belman, a professor of labor relations at Michigan State University, said that voters were uneasy with a proposal that would do so much, from barring right-to-work legislation to superseding state laws that barred communities from negotiating with public employee unions about specific issues.
“It was broad and ambiguous and not sufficiently well-defined,” he said. “With this loss, now there is some concern whether unions have proved their weakness.”
Richard K. Studley, president of the Michigan Chamber of Commerce, said the union-friendly measure would have damaged the state’s business climate. And he said voters rejected the proposal because they feared that it would hit their already squeezed wallets.
“The heart of the proposal was an unprecedented provision to retroactively repeal up to 170 different laws, many of them cost-saving measures,” he said. “Many taxpayers were stunned to learn that the cost of such repeals could be $400 million to local school districts.”
The proposal was defeated even though Mr. Obama won the state, 54 to 46 percent, attracting 2.5 million votes. Proposal 2 garnered 600,000 fewer votes, indicating that many Democrats turned against labor on this issue.
Bob King, the U.A.W.’s president, said he was surprised by a survey that found that 55 percent of Michigan voters who said they supported collective bargaining nonetheless said they had voted no on Proposal 2.
“Obviously we didn’t get our message out clearly enough to the general public,” he said. He said unions did not do a good enough job responding to what he said were the other side’s misstatements, such as claims that the proposal would bar schools from screening the employees they hired.
“The intent of the constitutional amendment was to stop the legislature’s overreach over the past 18 months,” he said, noting that the Republican-dominated legislature had passed laws that barred bargaining on several issues, including how to evaluate teachers.
The Service Employees International Union had pushed a separate referendum to amend the Constitution to guarantee home-care aides the right to bargain collectively, a move many conservatives denounced for increasing costs for employers and ensuring several million dollars in dues for the union. That measure lost 57 to 43 percent.
Unions had more success with the referendum to repeal the year-old emergency manager law. That measure, pushed by the American Federation of State, County and Municipal Employees, won 52.3 percent to 47.7 percent.
Union leaders said they were upset that emergency managers appointed to run financially troubled communities had the power to rewrite union agreements for public sector workers like teachers and firefighters.
Michael Traugott, a political scientist at the University of Michigan, said voters had overturned the law because many thought “it seemed undemocratic to put a person in place with all those powers.”
After their membership and bargaining clout declined in recent decades, the nation’s unions were badly stung when the Wisconsin and Ohio legislatures enacted laws in 2011 to restrict the ability of government employees to bargain collectively.
In Ohio, unions engineered a successful effort to repeal that state’s law last November, but unions failed in their push to recall Wisconsin’s governor, Scott Walker, in a vote last June.
Gary N. Chaison, a professor of industrial relations at Clark University, said organized labor would have had a lot to celebrate if it had triumphed on Proposal 2 in Michigan.
“If they had won, they could have claimed that they had reversed the trend that began in Wisconsin,” he said. “Combined with the Obama victory, they could have said that labor has come roaring back in the political arena.”
Rep. Issa allegedly violated House ethics rules with anti-Obama video
By Eric W. Dolan
Thursday, November 8, 2012 16:37 EST
The D.C.-based group Citizens for Responsibility and Ethics in Washington (CREW) has accused Rep. Darrel Issa (R-CA) of using official government resources on a political ad attacking President Barack Obama, a violation of House ethics rules.
Issa, the chairman of the powerful House Oversight Committee, on November 2 uploaded a video to YouTube that attack Obama over State Department dinner spending. The video, entitled “Obama State Dinners: Spend Like He Says, Not Like He Does,” was uploaded on the Oversight Committee’s official YouTube channel and also promoted by Issa’s official Twitter account.
“The attack ad offers no information about any action whatsoever by the House Committee on Oversight and Government Reform,” CREW Executive Director Melanie Sloan wrote in a complaint filed Thursday with the Office of Congressional Ethics.
“Further, it makes no attempt to put the costs of the two state dinne