Washed It!

With their eyes on the 2012 election, Republicans are preparing to maximize conflict with Democrats over healthcare in the new Congress and minimize potential compromises, according to GOP strategists, lawmakers and lobbyists.

That strategy is setting the stage for a bitter stalemate on Capitol Hill over the next two years as the president and senior congressional Democrats dig in to defend their signature achievement.

But Republican leaders and strategists think a renewed battle over healthcare will help the party expand its electoral gains and drive President Obama from the White House.

“Republicans have successfully challenged the healthcare legislation once,” said GOP strategist Frank Luntz. “They’ll do it again.”

Luntz, a leading architect of the Republicans’ successful campaign to cast the healthcare legislation as a ” Washington takeover,” said Democrats would suffer further if they tried to defend the law. “Democrats have more to lose,” he said.

In practical terms, the GOP approach will probably mean little congressional input over how the law is actually implemented. The Obama administration will retain broad authority to refine the law on its own, working with businesses, consumer groups, healthcare providers and state regulators, healthcare experts say.

While lawmakers deadlock on Capitol Hill, GOP leaders already have a target list of Democratic senators who are up for reelection in two years in traditionally red states including Missouri, Montana, Nebraska and Virginia.

“The next couple of years, in some ways, become about the 2012 elections,” Republican healthcare lobbyist Dean Rosen said last week at an Alliance for Health Reform briefing in Washington.

The GOP tactics mirror those deployed by Democrats after their 2006 electoral sweep.

Then, Democratic House and Senate leaders who had won majorities on a promise to challenge President George W. Bush’s Iraq war strategy bullied congressional Republicans by repeatedly forcing them to vote to support the unpopular war.

The Democrats’ legislative campaign ultimately collapsed. Bush used his veto pen to block legislation mandating troop withdrawals. Within a year, the Bush administration’s effort to stabilize Iraq with a troop surge showed signs of success.

Many Democrats think they too will be vindicated as the public sees more of the benefits of the new healthcare law.

Whit Ayres, a longtime GOP pollster, warned that Republicans risked a backlash if voters perceived them as more interested in scoring political points than in responding to voters’ concerns.

“There is no particular love for the Republican Party in the electorate,” he said at a recent Health Affairs forum. “Republicans are going to have to earn [voters'] support and earn their respect, and the way you do that is by governing responsibly.”

Most of the healthcare law’s major benefits — including its guarantee of coverage to all Americans — do not go into effect until 2014. And there are few signs the law is getting more popular.

In the interim, Republicans, who think the law was crucial to their electoral gains, are increasingly confident they can showcase its shortcomings and further weaken already tepid public support for Democrats.

“They are looking for ways to be very aggressive,” said Michael Franc, who works closely with congressional Republicans as head of government relations for the conservative Heritage Foundation.

Republicans provided a preview of their strategy before the midterm election as House GOP leaders forced Democrats to vote in June and September on proposals to repeal provisions of the healthcare law.

GOP leaders have indicated they intend to do more when they control the flow of legislation in the House next year, with likely votes to defund the law and excise controversial parts such as cuts in Medicare spending and a new mandate requiring Americans to get health insurance.

Republicans are spoiling for a healthcare fight

They’re called “floating cities,” massive cruise ships that resemble skyscrapers and offer all the amenities of high-end resorts — spas and casinos, Broadway shows and amusement parks, fine dining and luxury shopping.

But the Carnival Splendor also offers a cautionary tale about just how vulnerable these mega-ships can be. Left powerless by an engine fire shortly after embarking on a seven-day cruise to the Mexican Riviera, the Splendor is expected to be towed into port in San Diego late Thursday. If the ship cannot make sufficient speed under tow, it is possible it will be taken to Ensenada, company officials said.

An early morning fire in the generator compartment Monday knocked out several of the ship’s operating systems and left the nearly 4,500 passengers and crew members without air conditioning, hot food and telephone service. Even the flush toilets were down for a while.

With communications largely cut off, it’s unclear what kind of hardship passengers have had to endure. But Carnival Chief Executive Gerry Cahill acknowledged in a statement that passengers were dealing with an “extremely trying situation.”

“Conditions on board the ship are very challenging, and we sincerely apologize for the discomfort and inconvenience our guests are currently enduring,” he said.

The “gourmet delicacies” of the “Manhattan chic” Pinnacle Steakhouse were replaced by 70,000 pounds of bread, canned milk and other emergency supplies, which were flown from the North Island Naval Air Station at Coronado to the U.S. aircraft carrier Ronald Reagan and then helicoptered out to the Splendor, stranded 160 miles southwest of San Diego. The company is paying the military for the food and supplies, officials said.

“There are significant risks as these ships get bigger and bigger,” said Kendall Carver, president of International Cruise Victims. “This one held over 4,000 people. The new ones owned by Royal Caribbean hold over 6,000 passengers and 2,000 crew members, over 8,000 people. A fire on a ship like that would be disastrous.”

The Carnival Splendor experienced its problems relatively close to several major ports, making rescue possible in only a few days.

“If it was hundreds of miles out, and you had a fire that wasn’t suppressed, and you had rough weather, you’d have a complete disaster,” said Jim Walker, a Miami-based attorney who specializes in cruise line litigation.

Although the $40-billion cruise ship industry — and its vessels — has been growing, it has been dogged in the last decade with controversies over passenger health and safety. Carver helped start International Cruise Victims after his daughter, Merrian, disappeared while on an Alaskan cruise in 2004.

The organization has pushed for stiffer laws regulating the cruise ship industry; just four months ago, President Obama signed into law tougher new rules for reporting crimes at sea, improving ship safety and training staff to collect evidence of crimes. The changes will go into effect in 2012.

But the new law makes only passing mention of fire safety issues, even though “the most serious event that can happen on a cruise ship is a main space fire, which is what happened on the Splendor,” said Mark Gaouette, former director of security for Princess Cruises and author of the recently released “Cruising for Trouble.”

On a Navy ship, Gaouette notes, every person has a fire-fighting role, and the crew is trained constantly in how to respond to a fire. On a cruise ship, “two-thirds to three-quarters of the population are passengers. They become problems and liabilities in a major fire. They have to be shepherded to safe areas.”

Statistics are hard to come by for incidents on cruise ships, but Gaouette said the website cruisebruise.com lists eight major fires on cruise ships in the last five years, compared with just three in the previous seven years.

“As cruise ships become larger and their number increases on the high seas,” he said, “the threat of fire and other risks to passengers will increase proportionally.”

On the Splendor at 6:30 a.m. Monday, the 3,299 passengers were evacuated from their cabins and told to go to the ship’s upper deck. They were later allowed to return. By afternoon, the U.S. Coast Guard had dispatched three cutters and an HC-130 Hercules helicopter to the ship’s aid. The Mexican navy sent aircraft and a 140-foot patrol boat.

The Coast Guard has remained in contact with the ship throughout the ordeal, officials said. Whether the ship goes to San Diego or Ensenada, the company has promised to transport passengers back to Long Beach.

Miami-based Carnival Cruise Lines has promised a full refund for passengers and a complimentary future cruise equal to the amount paid for this voyage, which was scheduled to visit Puerto Vallarta, Mazatlan and Cabo San Lucas. The company, which along with its brands has 98 ships worldwide, announced that the Nov. 14 seven-day cruise from Long Beach to the same ports has been canceled.

“The safety of our passengers and crew is our top priority, and we are working to get our guests home as quickly as possible,” said Cahill of Carnival Cruise Lines. Carnival Corp. reported revenues of $13.2 billion in 2009.

A spokeswoman for the Cruise Lines International Assn. did not respond to requests for comment. The organization’s website says the U.S. Coast Guard calls cruising “one of the safest modes of transportation, and the industry is constantly striving to improve its safety procedures. Over the past two decades, an estimated 90 million passengers safely enjoyed a cruise vacation.”

But that is little comfort to Lynnette Hudson, whose father died of smoke inhalation during a fire on the Star Princess, which is operated by Carnival, in 2006. It was his first cruise, she testified to Congress, and he was celebrating his 72nd birthday.

Hudson pushed for the more stringent standards that were signed into law this summer and is still fighting for stiffer laws. “I think if there’s a major fire on a cruise ship, they’re not prepared,” she said in an interview. “They don’t have sufficient training.”

maria.laganga@latimes.com

tony.perry@latimes.com

Times staff writer Richard Marosi contributed to this report.

Stranded cruise ship offers lesson in huge vessels’ vulnerabilities

In one declarative night, California on Tuesday confirmed its status as a political world unto itself, zigging determinedly Democratic while most of the rest of the country zagged Republican. Voters not only restored the governor’s office to Democratic hands, they may have given Democrats a sweep of statewide offices, though uncounted ballots could still shift one race.

Driving much of the success — and distancing the state from the national GOP tide, according to exit polls — was a surge in Latino voters. They made up 22% of the California voter pool, a record tally that mortally wounded many Republicans.

Latinos were more likely than other voters to say it was the governor’s race that impelled them to vote, and they sided more than 2 to 1 with Democrat Jerry Brown over Meg Whitman, the Republican whose campaign had been embroiled in a controversy over illegal immigration. Once at the polls, they voted for other Democrats as well.

California Republicans had multiple reasons for head-shaking on Wednesday. For decades, the state party has squabbled over whether success would come more easily to candidates running as conservatives or those who presented a more moderate face to the state’s sizeable bloc of independent, centrist voters. This year they tried both. Senate candidate Carly Fiorina ran a firmly conservative race and Whitman took a more moderate road.

Holding their coastal strength, Democrats ran away with their big counties. Brown carried Los Angeles County, home to 25% of the state’s voters, by 31 points, giving him almost 60% of his lead. Republican candidates, including Whitman, did better than Democrats in their traditional interior California strongholds. But the strong Republican counties tend to be heavier on acreage than voters.

On Tuesday each hit a double-digit dead end, as Fiorina lost to Democratic Sen. Barbara Boxer and Whitman came in a distant second to Brown.

Democratic successes in the midst of 2010’s national Republican renaissance marked a sharp turnabout from how the state behaved during the last major Republican year, in 1994. That year, as Republicans took back Congress, they won in California as well, picking up five of seven statewide offices, including the governorship, and adding legislative seats. This time, Democrats picked up a legislative seat despite Republican gains nationally, and were waiting for uncounted ballots to see whether they lost a congressional seat or two.

The difference between then and now rests on the changes in the California electorate. Those changes also explain the gulf that now exists between California and the nation. California in 1994 was more white and proportionately less Democratic than it is today, thus more similar to the country today. Nationally, non-whites made up only 22% of the Tuesday electorate; in California they made up 38%. Latinos nationally represented 8% of the national electorate, just shy of a third of their power in California. The California and national exit polls were conducted by Edison Research for a consortium of news organizations, including television news networks and the Associated Press.

Tellingly, Latinos in California had a far more negative view of the GOP than other voters — almost 3 in 4 had an unfavorable impression, to 22% favorable. Among all California voters the view of Republicans was negative, but at a closer 61% negative and 32% positive. Latinos had a strongly positive view of Democrats, 58% to 37%, whereas all voters were closely split, 49% to 45%.

“The brand name is still a tremendous liability,” said Allan Hoffenblum, a former Republican consultant who runs a nonpartisan election-tracking publication. “People of color are just turned off by the Republican Party.”

Despite their efforts to appeal to Latinos, Whitman and Fiorina came under fire throughout the campaign for their views on illegal immigration. Fiorina supported Arizona’s anti-illegal immigrant law. Whitman, while opposing that measure, was pressed in her primary into talking about how she would be “tough as nails” toward illegal immigrants. The closing month of the campaign featured a controversy over Whitman’s firing of her illegal immigrant housekeeper; shortly before the election she said she favored the woman’s deportation.

Not surprisingly, Latino voters drawn to the polls because of the governor’s race went lopsidedly for Brown, 73% to 18%.

State Republican Party Chairman Ron Nehring said the election results confirmed that party leaders and candidates needed to build stronger relationships with non-whites, and not just before an election.

“The reality is that Democrats have strong relationships with urban and immigration communities that Republicans have not had, and that must change,” he said. “It is not only a matter of politics; it is a matter of mathematics.”

But Nehring stressed that he was not advocating a change in Republican policy. “Republicans have stressed for decades that we support legal immigration and oppose illegal immigration,” he said. “Despite saying that, that message has not resonated. It is not only a matter of how we talk about this issue, but how other people hear us.”

Views of the parties appeared strongly entrenched in California, however. Tellingly, the biggest vote-getter among Republicans was attorney general nominee Steve Cooley, who came into the race from a nonpartisan post as Los Angeles County’s district attorney and took pains Tuesday night to de-emphasize his party membership. Even with that, he was narrowly trailing Democrat Kamala Harris in a race so close it may not be decided for many days.

As election day dawned, Democrats outnumbered Republicans in California by 2.3 million voters, a gap that has been growing. Gov. Arnold Schwarzenegger was able to pull significantly from Democratic-leaning groups, including independent voters and women, but Tuesday’s candidates were not able to replicate that success.

Brown, for example, drew 600,000 more votes than the 2006 Democratic gubernatorial nominee, Phil Angelides. But Whitman drew 1.8 million fewer votes than Schwarzenegger had in 2006.

A persistent problem for Republicans in California, but an accelerant for them nationally, were views about Obama. Nationally he had a negative job-approval rating; in California, that flipped to a positive rating by 10 points. The results suggest that while Obama may not throw as large a shadow as he did with his record victory in California in 2008, he remains a formidable candidate in the state for 2012.

Asked whether Tuesday’s results suggested that Republicans would simply cede the state in 2012, Nehring demurred. “I think it is premature to make that determination,” he said.

But other Republicans suggested that their best chance for relevance in two years would be a continuation of the unsettled national environment that did not quite reach the California state line.

“You never say never,” said Hoffenblum. “Who would have predicted two years ago that Barack Obama and the Democrats would have crashed as quickly as they did? The temperature of the times is not normal.”

cathleen.decker@latimes.com
California went its own way

The political center, where swing voters reside and compromise happens, is suddenly a much smaller part of the Washington landscape.

There were the usual kind words and olive branches extended on Wednesday. But nothing could hide the fact that the two parties have deep and abiding differences on nearly every issue facing Congress. The composition of the House and Senate may have changed, but not Washington: The place may be more polarized than ever.

That could make it exceedingly difficult to accomplish anything of great magnitude between now and the next presidential election in November 2012.

The clearest indication of the growing partisan gap was Tuesday’s rout of the Blue Dog caucus, a group of moderate and conservative Democrats who urged the party to adopt a more business-friendly and fiscally conservative agenda. Fewer than half of its 54 members will be returning next year after incumbents were ousted in Pennsylvania, Ohio and a few Democratic pockets of the Deep South. Their absence will likely push the 190 or so remaining House Democrats even further left.

On the Republican side, the victory of dozens of insurgents backed by the “tea party” movement means the emboldened GOP majority will be even more conservative and confrontational than the one that harried President Obama over the last two years.

These lawmakers, and the legion of activists who plan to monitor their performance, have called for drastic changes, including eliminating the Department of Education, privatizing parts of Social Security and repealing the healthcare law just now starting to take effect.

After the presidency, the most difficult job in Washington may soon fall to Rep. John A. Boehner of Ohio, the Republican leader who will likely be the next House speaker. He must balance an agenda that satisfies his fervent tea party caucus without scaring off the voters — politically independent, largely nonideological — who delivered the GOP its big win Tuesday.

It was something Newt Gingrich, the House speaker after the last big GOP landslide in 1994, failed to manage when he led a similar class of zealously partisan freshmen. President Clinton, who had to argue after the so-called Republican Revolution that he was still relevant, romped to reelection just two years later.

Extensive polling, including thousands of voter interviews conducted Tuesday, shows that neither party is well regarded. The election was the third in a row in which 20 or more House seats changed hands, a level of upheaval unseen in more than half a century; these days, voters seem willing to discard unwanted politicians like so much used tissue.

But that hasn’t stopped both sides from claiming to speak for a majority of Americans. A mandate is in the eye of the beholder, and Jenny Beth Martin, national coordinator of the Tea Party Patriots, an online conservative network, seemed to speak for many when she suggested compromise was a good thing — so long as others were doing the compromising.

“We hope that rather than having the gridlock, that the House and Senate will work together to find a way to be responsible with our money again and the other side will move to the center,” Martin said. “Because our side is the center.”

Boehner and Senate Majority Leader Harry Reid of Nevada, who may soon be dueling each day on Capitol Hill, said much the same thing. Both nodded toward the notion of compromise, with qualification.

“We hope President Obama will now respect the will of the people, change course and commit to making the changes they are demanding,” Boehner said. “To the extent he is willing to do this, we are ready to work with him.”

Reid, fresh off reelection in Nevada, said “the time for politics is now over.” He then suggested Republicans “must take their responsibility to present bipartisan solutions more seriously. Simply saying ‘no’ will do nothing to create more jobs, support our middle class and strengthen our economy.”

None of which bodes well for a new era of comity and bipartisan cooperation.

“If you’re a betting person, I would bet on less rather than more being accomplished in Washington,” said Geoff Garin, a longtime Democratic strategist.

If politicians look to the people for guidance, as they presumably should, they are likely to come away confused.

Voters say they hate gridlock, but many also seemed to hate the prolific legislative output of the Obama administration and the Democratic majorities in the House and Senate. Asked what lawmakers should make their top priority in the next Congress, nearly 4 in 10 said reducing the federal deficit. A like number said spending money to create jobs, a move that would increase the deficit. (Two in 10 said cutting taxes, which would also increase the debt.)

On a more fundamental level, voters sent similarly contradictory signals. Nearly 8 in 10 said in a Pew Research poll that lawmakers’ unwillingness to work together was a major problem. But in a subsequent survey, nearly half said they admired a politician who sticks to principle rather than compromising.

Clearly, voters are conflicted. More than ever, they have a government in Washington to match their mood.

mark.barabak@latimes.com

kathleen.hennessey@latimes.com
Midterm election’s big loser is the political center

With Republicans expected to win control of the House in Tuesday’s election, President Obama scheduled a press conference for Wednesday in what was expected to amount to a mid-course correction to deal with the power shift on Capitol Hill.

Obama is expected to try to reach out to Republicans, who have campaigned against his economic stimulus plan, healthcare overhaul and other policies. But if the GOP gains seats in the House and Senate, as expected, heavy partisan conflict is anticipated, especially as the parties gear up for the 2012 reelection campaign.

“This election’s going to be a referendum on Obama’s policies,” Mississippi Gov. Haley Barbour, chairman of the Republican Governors Assn., said on MSNBC on Tuesday. “What is the president’s response going to be?”

Citing the GOP’s pledge to cut spending aggressively, Barbour added: “Hopefully, the president is going to be willing to come forward and say, ‘I recognize we have to do that; let’s work together.’ ”

But Democrats question Republicans’ sincerity, noting Senate Republican leader Mitch McConnell of Kentucky recently said that his top priority was to make “Obama … a one-term president.”

Pennsylvania Gov. Ed Rendell, a former Democratic National Committee chairman, offered his own advice to the White House. “We’ve got to use the president more. He’s a great communicator,” he told MSNBC. “If tonight turns out to be better than expected for Democrats, it’s because the president got energized in the last month.”

If Republicans win control of the House, Obama will still be setting the agenda, Barbour said. “The Republicans are not going to be running the government, but they will have much more of a say than we’ve had for these two years,” he said on MSNBC.

But signaling the conflict that awaits the administration and the new Congress, Barbour said Republicans were going to try to repeal the healthcare reform bill. “If they can’t repeal it, they’re going to try to change it so that you wouldn’t recognize it,” he said on NBC’s “Today.” “They’re going to be faithful to what the voters vote for tonight.”

Fellow Republican Tommy Thompson, a former Wisconsin governor, however, told CNBC: “When it’s all said and done, you’re not going to be able to repeal healthcare because President Obama is not going to sign it, and they don’t have enough votes to override a veto. So why push a cart uphill when you know it’s not going to be able to get to the top?”

richard.simon@latimes.com
Obama’s response: President plans post-election press conference

Democrats fought Republicans on Saturday in a campaign battle that stretched coast to coast, pushing against an epic tide of anger, frustration and economic anxiety that could sweep the GOP to control of one and possibly both houses of Congress.

Driving deep into once-solid Democratic territory, Republicans spent the last weekend of the midterm election campaign targeting House seats in blue-state bastions such as California, New York and Massachusetts. Democrats poured tens of millions of dollars into a last-ditch effort to save dozens of threatened incumbents, writing off others whose chances appeared beyond hope.

With spending near the $4-billion mark, a record for a midterm contest, there was little escaping the last blast of campaigning. Candidates and others with a stake in Tuesday’s outcome — including, most prominently, President Obama — staged rallies while hundreds of thousands of volunteers knocked on doors and manned phone banks, urging supporters to the polls.

In Philadelphia, the first stop on a final campaign swing, Obama said all the progress of the last two years could be rolled back if Republicans seize control of Congress.

“We can’t move backwards now. We’ve got to keep moving forward,” Obama told an audience of Democratic volunteers at Temple University. “And that’s all going to be up to you. So I want everybody to get out there, knock on doors, make phone calls, volunteer, talk to your friends, talk to your neighbors.”

Rep. John A. Boehner of Ohio, the likely House speaker if Republicans take over, used the party’s weekly radio address to jab at the president and Democrats and to promise a change from the last time Republicans ran Congress. He promised smaller government and greater accountability.

“We’ve tried it President Obama’s way,” Boehner said. “We’ve tried it Washington’s way. It hasn’t worked.”

All the while, a torrent of TV and radio advertising provided a loud and surly campaign soundtrack, blaring virtually around the clock. In some states, every last minute of TV ad time was sold out.

All 435 U.S. House seats are up on Tuesday. Republicans need a gain of 39 to win control of the House, which they lost in 2006. Despite a public show of optimism, based on healthy Democratic turnout in some early voting, party strategists privately echoed Republicans who have suggested a change in power was highly likely. The only question, both sides agreed, was the magnitude of Republican gains and whether it approaches — or surpasses — the 52-seat GOP landslide in 1994, the last time Democrats controlled Congress and the White House.

Voters will cast ballots for 37 of 100 U.S. Senate seats. Democrats were confident they would keep the majority, albeit narrowly, and Republican strategists conceded the likelihood. The GOP needs to convert 10 seats to take over and many handicappers predicted the party would fall short, as contests in Connecticut and West Virginia seemed to tip the Democrats’ way and as Sens. Barbara Boxer in California and Patty Murray in Washington appeared to shore up support.

The last time either party gained at least 10 Senate and 40 House seats in a single election was in 1958.

Also on the ballot Tuesday are the governorships of 37 states, including California, Florida, New York and Texas. Republicans seem poised to gain about a half-dozen governor’s seats and take control of several statehouses, which could have significant implications for races in 2012 and beyond, as legislators redraw the boundaries used to elect members of Congress.

Midterm contests are typically a referendum on the president and almost always cost his party congressional seats. This year appears no different. If anything, the achievements of Obama and congressional Democrats — passing massive economic stimulus and healthcare bills, rescuing the auto industry, cracking down on Wall Street — sharpened the opposition, giving birth to the “tea party” movement that promised to usher a number of insurgents into Congress.

Compounding problems for the president and his party, this year’s races were run in a brutal economic climate, following the worst downturn since the Great Depression. At nearly 10%, the jobless rate is the second highest it has been for a midterm election in the last 50 years.

“If unemployment was 7.4%, or even 8.1%, but dropping, and people clearly perceived that things were getting better, then Democrats would take some losses,” said Tim Hibbitts, an independent pollster in Oregon. “But not the potential catastrophe they’re facing.”

A look at the national map showed the party’s dire circumstances.

Of 100 or so House seats that looked at least marginally competitive, Democrats were on the defensive in all but a handful. Some of the party’s most durable incumbents — including committee chairmen Barney Frank of Massachusetts, Ike Skelton of Missouri and John M. Spratt Jr. of South Carolina — were in trouble or, at the least, facing their toughest reelection fight in years.

Seats that would normally be out of Republican reach, in districts Obama easily carried two years ago, were in the toss-up category or leaning Republican, leading some independent analysts to forecast GOP gains of as many as 70 seats or more.

A swing of even 60 seats would be the largest midterm shift since 1938.

Both parties campaign to the finish line

The Justice Department on Wednesday asked a federal appeals court in San Francisco to quickly set aside a judge’s order that bars enforcement of the military’s “don’t ask, don’t tell” policy, saying the judge’s “extraordinary decision” went too far, too fast.

The 25-page motion says the appeals court should lift the judge’s order Wednesday.

U.S. District Judge Virginia Phillips in Southern California, acting on a suit brought by the Log Cabin Republicans, declared the “don’t ask” policy unconstitutional last month. On Oct. 12, she then ordered the Pentagon to stopping enforcing the policy, which it did.

The Justice Department said it has a duty to defend the laws enacted by Congress, even though President Obama is urging Congress to repeal the law and to allow openly gay men and women to serve in the military.

The government said the “sweeping injunction against a duly enacted Act of Congress” was wrong as a matter of law. It is “at odds with basic principles of judicial restraint requiring courts to limit injunctive relief to the parties before the court, and is contrary to decisions of other courts, which have sustained the constitutionality of the statute.”

Moreover, the judge’s order suspending enforcement of the military’s “don’t ask” policy has caused “confusion and uncertainty” at the Pentagon and among gays and lesbians in the ranks, the government said.

If an appeals court reverses the judge and affirms the constitutionality of the law, it “would create tremendous uncertainty about the status of service members who may reveal their sexual orientation in reliance” on the judge’s order suspending the law, the government said.

For all these reasons, it said a three-judge panel should issue an emergency order lifting the injunction.

If the 9th Circuit refuses to lift the judge’s order, the government could then seek an emergency stay from the U.S. Supreme Court.

david.savage@latimes.com
Justice Department asks appeals court to overturn ‘don’t ask’ injunction

WASHINGTON — Overcoming months of gridlock, the Senate approved a small-business bill on Thursday that handed President Obama an election-year victory but showed just how difficult it had become for lawmakers to agree on the best way to help the sluggish economy and create jobs.

The measure passed by a 61-38 vote, with just two Republicans crossing party lines to support the bill, which would create a $30-billion small-business lending fund and provide $12 billion in tax breaks to help companies invest and hire. The bill now heads to the House, where it is expected to pass swiftly.

Yet the months-long impasse over the bill to aid small businesses, which have been hard hit during the economic downturn and are championed by both parties as engines of the recovery, highlights the partisan divisions before the fall midterm election.

“It tells you the depth of the gridlock and dysfunction that unfortunately has gripped the Congress,” said Sen. Evan Bayh (D- Ind.). “Hopefully, some of that will abate after the election.”

The bill enjoyed bipartisan support at the outset, but the addition of the $30-billion small-business lending fund to give credit-starved firms access to capital created insurmountable partisan divisions.
Republicans quickly opposed the lending fund as a “mini-TARP” — reminding voters of the unpopular Troubled Assets Relief Program that was the cornerstone of the 2008 federal bank bailout.

Republicans filibustered in July, demanding the chance to offer more amendments — including those unrelated to the legislation. Democrats shelved the bill as the debate dragged on and other legislation took priority.

Those expected to champion the bill from the business community — the U.S. Chamber of Commerce and the National Federation of Independent Businesses — instead focused on using the legislation as a vehicle to overturn an onerous business reporting requirement in the new healthcare law.

“All of a sudden it became a partisan exercise again,” said Sen. Orrin Hatch (R- Utah). “It’s amazing to me how difficult it is to work together around here, even when we want to. It’s almost like an arrogance of power: We’re going to teach those Republicans.”

Republican Sen. George LeMieux of Florida and Sen. George Voinovich of Ohio, neither of whom are seeking re-election, joined 57 Democrats and two independents to pass the measure.

The House passed a version of the bill earlier this year, and at one point over the summer, frustrated House lawmakers walked across the Capitol to stage a quiet sit-in at the Senate chamber to protest the delays on this and other jobs bills.

“While I am grateful for this progress, it should not have taken this long to pass this bill,” Obama said on the eve of Senate action. He has promised to sign the legislation quickly.

The bill offers $12 billion in tax breaks to businesses to encourage investment, entrepreneurship and hiring.

Businesses also would be able to write off more of their costs of buying equipment or making shop improvements. Those who are self-employed could deduct healthcare costs from the self-employment tax. The bill would also continue to waive Small Business Administration loan fees that had been cut as part of the 2009 recovery package.

The $15-billion cost of the bill is offset by closing tax loopholes and increasing tax-reporting requirements and penalties.

Democrats estimate the legislation could create 500,000 jobs.

Amendments earlier in the week sought to lift a much-criticized healthcare tax reporting requirement that both Democrats and Republicans agree needs to be fixed. But the amendments failed as senators could not agree on a way to recoup the $17 billion in revenue that would be lost by doing away with the provision.

Republicans also made two procedural moves on Thursday to attach tax credits for research and development and biodiesel development, but both were rejected.

lmascaro@tribune.com
Senate approves Obama’s small-business aid package

WASHINGTON — Rep. John Boehner, the senior Republican leader in the House, signaled Sunday he was willing to compromise on the increasingly divisive issue of taxes, announcing he would reluctantly support extending new tax cuts for the middle class even if that meant cuts for the wealthy would expire.

But Boehner, of Ohio, also made it clear he still thought ending the Bush tax cuts for the wealthy was “bad policy” because he believed those cuts helped to stimulate the economy and create jobs. And he said he did not necessarily agree that renewed lower tax rates for families making less than $250,000 a year was the best way to go either.

Nevertheless, Boehner, interviewed on CBS’ “Face the Nation” program, said, “If the only option I have is to vote for some of those reductions, I’ll vote for it.”

“If the only option I have is to vote for those at 250 and below,” he added, “of course I’m going to do that. But I’m going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”

The Obama administration is pushing for a permanent tax-rate cut for middle-class Americans, and last week the president singled out Boehner for criticism during a speech in Parma, Ohio, saying the Republican offered “no new ideas” and was following the “same philosophy that led to this mess in the first place: Cut more taxes for millionaires, and cut more rules for corporations.”

The president also has warned that extending the cuts for the wealthy enacted under President George W. Bush would increase the budget deficit by $700 billion over the next 10 years.

To that end, senior White House advisor David Axelrod encouraged Republicans to join Democrats to support permanent cuts for middle-class Americans while ending those for the wealthy by the end of this year.

“We agree on the middle-class tax cuts,” said Axelrod, speaking on NBC’s “Meet the Press.”

“Let’s not hold them hostage while we debate whether we’re going to give this very small number of [wealthy] people a tax cut that we can’t afford.”

The issue of tax cuts is all the more volatile now in the runup to the midterm congressional elections in November. Many public-opinion polls show that most Americans favor letting the tax cuts for the wealthy run out by year’s end, noting that much of the economy has continued to stall.

But some Democrats in both the House and Senate, concerned over losing control of Congress this fall, wonder if it would be smarter to lower middle-class tax rates now but keep the cuts for the wealthy in place, at least until the economy improves.

Boehner said he would prefer that plan – lowering rates for the middle class but also maintaining the cuts for the wealthy. “I’ve been making the point now for months that we need to extend all the current rates for all Americans if we want to get our economy going again,” he said. “And we want to get jobs in America.”

In another development Sunday, House Majority Leader Steny Hoyer said that although Democrats will “probably” lose some seats, he remained confident they would continue to run the House after the November elections.

“We’re going to hold the House,” the Maryland Democrat predicted on CNN’s “State of the Union” show. “Our candidates are feeling good.”

Yet Hoyer also acknowledged that the Democratic Party may not be able to support all of its candidates, especially those trailing by large margins. ‘If there are candidates that are very substantially behind and can’t make it,” he said, “clearly we will have to make some tough judgments.”

richard.serrano@latimes.com
Boehner willing to compromise but says ending tax cuts for wealthy is ‘bad policy’

President Obama drew a sharp contrast with Republicans Wednesday over what was shaping up as a key issue in the midterm congressional elections: the extension of tax cuts for top earners, which he said were unsustainable.

Obama’s remarks, delivered in the traditional electoral battleground state of Ohio, sounded every bit like the speeches he gave there two years ago during his first election bid. Originally billed as a policy speech, Obama only briefly outlined his new plan for $180 billion in spending — including $50 billion in infrastructure investments and a permanent extension of research-and-development tax credits.

Instead, he used the debate over Bush-era tax breaks to make a populist pitch, shaping the coming congressional midterm election as a choice between Democrats who support policies to advance the middle class and Republicans who would return to policies that created only “the illusion of prosperity.”

As he did so, Obama mentioned House Minority Leader John Boehner (R-Ohio) by name eight times, as the White House sought to elevate the man who would become speaker of the House if Republicans gained a majority this fall.

“Make no mistake: He and his party believe we should … give a permanent tax cut to the wealthiest 2% of Americans,” Obama said. “With all the other budgetary pressures we have, with all the Republicans’ talk about wanting to shrink the deficit, they would have us borrow $700 billion over the next 10 years to give a tax cut of about $100,000 each to folks who are already millionaires.”

“So let me be clear to Mr. Boehner and everybody else,” he continued. “We should not hold middle-class tax cuts hostage any longer.”

Obama’s plan calls for extending tax cuts for households earning less than $250,000 a year, while allowing the marginal rates for higher earners to increase as scheduled Dec. 31.

“For those who claim that this is bad for growth and bad for small businesses, let me remind you that with those tax rates in place, this country created 22 million jobs, raised incomes, and had the largest surplus in history,” he said.

Obama also, as he had done often since Congress broke for its summer recess, urged Republicans to pass a package of small-business tax credits that had been stalled in the Senate, a holdup he said was delaying hiring.

Obama said Republican obstruction was emblematic of a strategy aimed at allowing the GOP to “sit on the sidelines and let Democrats solve the mess.”

“They’re making the same calculation they made just before the inauguration: If I fail, they win,” he said. “Well, they might think this will get them where they need to go in November, but it won’t get our country where it needs to go in the long run.”

Earlier Wednesday, Boehner announced two Republican alternative economic proposals for the September session. Foremost among them was a two-year extension – which he termed a freeze – of all current tax rates.

Republicans also would seek to cut non-security spending to 2008 levels, which they estimated would save $100 billion in its first year.

In January, Obama had proposed a three-year budget freeze that the White House said would save $250 billion over the next decade.

“We can’t deal with the deficit until we’re willing to get our arms around spending and have a strong economy,” Boehner said in an interview with ABC’s “Good Morning America” on Wednesday. “And you can’t have a strong economy if you’re raising taxes on the very people that you expect to invest in our economy to begin hiring people again.”

The Ohio Republican also seemed to welcome the direct confrontation with the Democratic president.

“Here’s the White House worrying about what I’ve got to say instead of working together to get our economy going again and to get jobs back in America,” he said.

Under election-year pressure, even Democrats have expressed reservations about Obama’s new proposals. Sen. Michael Bennet, seeking election to a full term this November in Colorado, said in a statement Wednesday morning that he opposed “additional spending in a second stimulus package.”

mmemoli@tribune.com
Obama blasts continued tax cuts for the rich