by Charlie Gasparino Info
Charlie Gasparino is a senior correspondent for Fox Business Network. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His latest book, Bought and Paid For, is about the Obama administration and Wall Street.
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Big Republican wins on Tuesday would set up key showdowns between the party and the president on the Bush tax cuts, financial regulation, and health care. Charlie Gasparino on what to expect.
Plus, join Howard Kurtz and The Daily Beast team for a live chat on the elections tonight at 8 p.m. EST and read your election guide.
If, as widely predicted, the Republicans take control of the House and make major gains in the Senate, Barney Frank from Boston, the liberal head of the House Banking Committee, will be replaced by Spencer Bachus, the soft-spoken but staunchly conservative ranking member from Alabama. Speaker Pelosi from San Francisco will be making room for Speaker Boehner from the 8th District of Ohio. Senate Republican leader Mitch McConnell will likely wield as much power as Harry Reid—that is, if the current Senate leader survives Tuesday’s election against Tea Party favorite Sharron Angle—which means that Richard Shelby, who voted against the massive bank bailouts of 2008, will be more than a match for any Democrat who runs the Senate Banking Committee. (With Chris Dodd retiring, the betting is on Tim Johnson from South Dakota.)
All this may not add up to a sea change in economic policy, but a clear and fundamental shift in the government’s approach to business is certainly in the cards. Broadly, it will pit a more business-friendly, particularly small-business-friendly, legislative branch against the Obama administration and its plans to raise taxes, heap mandates on entrepreneurs, and increase the size and the reach of government. But the real battles will likely be waged on five issues where the ideological differences between both sides are most stark.
1. Extending the Bush tax cuts and a government shutdown. It’s Democratic Party dogma to end them and Republican Party dogma to keep them alive, and if the economy remains weak, President Obama will have an increasingly difficult time making the argument that it’s good public policy to let the rates expire for people making more than $250,000 a year—thus taxing entrepreneurs, small businesses, and the so-called rich. Yet the president has shown little interest in a compromise that would allow the cuts to remain in effect even until the economy recovers from anemic growth and 9.6 percent unemployment. The Republicans will hammer home the foolishness of “destimulating” the economy when it obviously needs stimulus and will insist that budget cuts come before the government raises taxes. The conventional wisdom is that barring huge gains by the Republicans, the president will get his way and the Bush tax rates, at least on the upper brackets, will expire early next year. But there’s talk among House Republicans about using the public’s growing dissatisfaction with raising taxes to stage a showdown with the president early next year. This battle, some in Washington tell me, could lead to a government shutdown. The last time that happened, in 1995, President Clinton used the shutdown to make former House Speaker Newt Gingrich look like an obstructionist. The Republicans now say they’ve learned from their mistakes; they will try to show that Obama is really the obstructionist with his failure to cut spending while he raises taxes on small business.
If, as widely predicted, the Republicans take control of the House, Speaker Pelosi from San Francisco will be making room for Speaker Boehner from 8th district of Ohio. (J. Scott Applewhite / AP Photo)
2. Dodd-Frank Part II. Depending on the size of the new GOP majority—or even if there is one—Republicans will be cranking up the pressure on the administration to remake parts of the alleged “landmark” financial-reform bill. Expect some significant changes to the legislation if the Republicans take control of the Senate as well as the House, people both in Washington and on Wall Street acknowledge—changes that the president and his Wall Street-friendly economic team might just go along with. (Remember that for all Obama’s banker-bashing, the most onerous parts of financial reforms came from members of Congress, not from Treasury Secretary Tim Geithner, a longtime Wall Street friend.) If Republicans merely take the House, as is widely predicted, fundamental change will be replaced by spirited debate on issues like “Too Big to Fail”—the Republicans say it needs to be explicitly outlawed in the legislation—and bank capital standards, which they say are too onerous and are preventing banks from lending when the economy needs small businesses get loans to expand and start hiring again.
12 November 1, 2010 | 10:38pm Twitter Emails
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DEMAGOGUERY: That's the term that David Stockton, Reagan's first OMB director, called the continual plea by the GOP to cut taxes as a political theme on 60 Minutes last night. The simple matter (and we must simplify complex notions these days so that more people "get it") is we can't move to cut deficits and balance the budget and allow the rich to continue to have tax cuts. Excuse me, Charlie, the "so-called" rich, as you suggest. Even Bill Gates Sr and Jr are pushing for a special income tax for the wealthy in Washington state because they know we can't afford the govt we need and fool the public into thinking that we can cut taxes and get good quality teachers and education to compete against the rest of the world. I like you ,Charlie, but get real on this one.
Charlie, as usual, has no clue what to expect. We are a ways from sanity. If this election proves anything, it will likely prove that divisive politics indeed works, for the politicians. So, we could well see several more decades of what we have seen for the last 2 yrs. It won't matter which Party is in power. Until the American people tell them otherwise, they will excise that philosophy.
Charlie does have more than a clue....it's you who has no clue..\The American people will be doing the telling all day today, at the polls...and hopefully the American people will also kick ass if the newly elected congress and senate fail to look after the interests of the country. Today we'll see "change we can believe in", exercising our election power to dump the morons who were elected last time, both democrats and republicans.
CA IS THE MODEL, AND IT AIN'T GOOD. California has been paralyzed in its budget decisions by divided rule. Passing a budget requires a 3/4th vote. Republicans will not compromise on the "no-new-taxes" thing and even after Schwartzeneger has made deals which include the Republican leadership, the hardline GOPers won't go along with the program. The result is gridlock and the inability to make any realistic deal on policy. The Tea Partiers will have the same effect on national Republicans, and rather than compromise (forget about David Gergen, Joe Scarborough and all the other GOPers who think that "moving to the middle" is in the cards), we're going to get gridlock.
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