Election 2009: New Jersey’s Got Somethin’ For Ya

Just when you thought it was safe to go outside again, there are elections looming.  Not just the 2010 elections that are suddenly being chattered about: actual elections, coming up in November.  Both New Jersey and Virginia hold their gubernatorial elections in “off” years, and if ever there was an off year — here we are.  (There’s also an election coming up in the Northern Mariana Islands — who wants to volunteer to do some on-site reporting with me?)

For those who don’t live with the New York Times constantly imprinted on their eyeballs, I thought I’d do a quick run-down of who’s who and what’s what in these two races, starting with New Jersey this Tuesday and moving to Virginia next Tuesday, with a promise to revisit, at least briefly, each week until these contests get decided.

So: On to the Garden State!

In New Jersey, weighing in at an estimated personal net worth of $300 million dollars (in 2005 money), we have current governor Jon Corzine facing off against Republican challenger Christopher J. Christie¹, a former U.S. Attorney under  Corzine is pretty unpopular in New Jersey right now, where hard times have forced, well, hard budgeting. 

The seminal quick-read piece on Corzine is New York Magazine’s 2005 profile, “The Deal He Made,” which describes Corzine both as one of the most liberal, idealistic members of the Senate, when he was there, and as a guy who’s learned fast and well about the dirty realities of New Jersey politics.  In his first term as governor, Corzine has had to deal with a budget deficit that forced him to cut 3,000 state jobs, raise taxes on the wealthiest Jerseyites, and institute a sales tax increase (and a government shutdown in 2006).  Imagine how popular you’d be in New Jersey if you’d cut that many state jobs (and therefore, state services).  Now imagine you’re also the guy who once proposed dramatic increases of toll-road fees, and you’ll have the dismal re-election prospects of Jon Corzine pretty well pictured.  He currently trails Christie by 10 percent (47-37) in a Quinnipiac poll.

New Jersey is supposed to be a pretty safely blue state, right?  Well, not if Chris Christie has his way.  Democrats have a strange, dirty history in NJ, and it’s finally time to clean house — at least, this is the former prosecutor’s platform.  He had a 130-0 win record for convictions against public officials, bolstering his credibility as a corruption fighter.  It doesn’t hurt that Corzine was in office during a very memorable sweep of corrupt officials — 44 people were charged in July, including “three New Jersey mayors, two state assemblymen and five rabbis.”  A member of Corzine’s staff had his home raided.  (I don’t hold Corzine responsible for the rabbis, but the others — keep an eye out, Jon, eh?).  Christie v. Corzine, in that context, starts to look like David vs. the guy who mugged David at gunpoint with a Saturday Night Special.

Christie defeated conservative Steven Lonegan in the primaries and has had a pretty easy road for a while, attacking an unpopular governor whose party is mired in corruption (just today, a former state senator received a 2-year prison sentence on corruption charges).  He is, however, a New Jersey politcian himself, and his résumé is not without the predictable black marks: as U.S. Attorney, Christie got into the habit of handing out monitoring jobs, which are amazingly lucrative, to friends and family.  Essentially, after a firm was convicted of corruption, someone had to be appointed to watch over the firm.  Christie frequently appointed his friends or political contributors, including such luminaries as John Ashcroft (heard of him?), who won a $52 million no-bid contract to monitor a medical prosthetics company under Christie’s watch.  Christie’s response has been pretty dumb: since the money is actually paid by these companies, not by the government, there’s no conflict, he says.  Sure.  Sounds like business as usual.

The news of the last few weeks has been about Mr. Christie’s apparently improper loan to a close aide.  The loan, which Marcy Wheeler argues was below market value and therefore counts as a gift, was given to Michele Brown, an assistant U.S. Attorney during and after Christie’s tenure.  The controversy about the loan is two-fold: first, Christie failed to report his interest payments on his taxes (which, since they totaled a couple hundred dollars a year, isn’t terribly sexy); second, he continued to receive payments from Ms. Brown even after leaving the office, establishing a financial tie between a candidate for governor and a woman in a leadership position in an office pursuing dozens of legal cases against state officials, including some in the current governor’s office.  Brown has resigned her position, and Christie has apologized.  So far, the controversy doesn’t seem to be taking much of a bite out of his lead, but expect Jon Corzine’s relentless campaign ad machine to make the most of it.

Where does that leave us?  Well, we’re two full months (oy! where’s my summer gone?) from Election Day, and Jon Corzine’s trailing.  Corruption is not the worst charge one can level at a New Jersery politician, so the recent Christie scandal may not do anything to narrow the gap.  Corzine’s big advantage — his ability to spend his way to the top — may not be as big as it used to be, since one assumes he’s been hit hard in the market over the last year or so.  Yet it seems implausible that a Republican will end up governing New Jersey, so — I expect a turn around, late this month.  I expect Corzine to hitch his star to a major proposal — maybe even to try and make the national health care debate a part of the story in New Jersey — and to have a surprisingly positive appearance at the gubernatorial debate in October.  He has the money to pay for coaches, after all.  Oh, and he’s got one more thing going for him:

A sitting president willing to join him on the campaign trail.

So that’s where we stand.  Tune in next week for a tour of Viriginia, which is for lovers and, in this race, a guy whose name always makes me think of “The Office.”

^{1 Question: Why do parents do this?  Chris Christie?  It’s not like he married into that name.  What happened, one of his parents turned to the other and said, “How about Michael?” and the other went, “Gee, I dunno, make it something easier to remember.”  See also: Dave Davies, John H. Johnson, and my high school principal, whose name I’ll withhold so my detention records never hit the big time.}

The Week Ahead: Hello, September

As summer winds down, I’m trying to get a bit more discipline into my days.  One of the things I want to do is get better at marking what’s happening each week, with an intent to, y’know, revisit the things happening.  I thought today sounded like a promising day to start, because I can really ease into it — because surprisingly little is happening, officially, this week.

Congress:
Out of session and, like me, mourning Ted Kennedy.  Most members are back home relaxing with family, friends, and the strangers they want to vote for them.  Some are holding town hall meetings this week.  If you’re in Arkansas, for instance, you can catch Democrat Senator Blanche Lincoln holding three town hall meetings this week.  She’s not been a big fan of a public option so far, and she faces re-election in 2010.  Should be an interesting show.  Check the official home pages of your senators and representative for a schedule of public events, usually listed under press releases.

Many members will also be firing up their pens — and those of their hard-working staff members — to pen “God Bless the Working Man” columns for the Sunday papers next week.  Keep an eye out — should be particularly interesting to hear from those who killed the Employee Free Choice Act this year.

The White House:
President Obama arrived home from vacation yesterday (best story about this is from The Borowitz Report: “Bush Questions Brevity of Obama’s Vacation“).  My question: Did he have to kick Joe Biden out of his chair?

The President has no public events scheduled today, and the lead story at the White House blog is Michelle Obama’s garden.  Joe Biden is meeting with General Ray Odierno today.  One does hope the president might stop by.

Expect a statement at some point on the California wildfires.

Other Events:
Massachusetts Governor Deval Patrick will hold a press conference at 3 p.m. Eastern to discuss Ted Kennedy’s vacant Senate seat.

Wildfires raging in California will likely draw comment from the Interior Secretary and, if my bet is correct, the exterior Secretary of Global Warming, Mr. Gore, about the necessity of better forestry planning and attention to the environment.

The report of outgoing commander of NATO and American forces General Stanley McChrystal will leak widely and kick up more discussion of whether a troop increase is necessary in Afghanistan.  Expect some Democrats to grab this as an issue that seems safer to take a position on than Health Care; expect many Republicans to think the same thing.

Somewhere, expect both Tim Geithner and Ben Bernanke to order an expensive bottle of wine, perhaps to share, in celebration over the New York Times’s front page story about how the bank bailouts have made us a $4 billion profit.  With that kind of money, we could’ve bought Spider-Man.

Two U.S. Journalists Sentenced to 12 Years’ Hard Labor in North Korea

Euna Lee and Laura Ling, journalists working for the Current TV network, have been sentenced to 12 years of hard labor for allegedly crossing into North Korea’s territory while doing a story on human trafficking.  The trial has been going on since Thursday — but it’s also been news since the two women were detained in mid-March.

The great hope for the trial was that the women would receive stunning (but smaller than this) sentences, and then the sentences would be commuted in exchange for some act toward North Korea by either the U.S. or South Korea.  That the sentence is greater than expected (and having been handed down by the highest court, it can’t be appealed) doesn’t bode well.

The sentence was delivered the same day that Secretary of State Hillary Clinton mentioned the administration is considering interdicting North Korean air and sea shipments that could carry weapons.  The administration is also, apparently, considering placing North Korea back on the list of states who sponsor terror — the old Axis of Evil list, if you will.

Secretary Clinton who apparently sent a letter personally apologizing for the Lee and Ling’s possible border crossing and requesting the two women be released, also said today that the administration is working to keep the Lee/Ling issue separate from its own political work with North Korea, calling their detention an issue of “human rights,” not politics.  I agree that this should be separate from political actions, but it’s ridiculous to think that it can be.  These women are American journalists, working on a piece that would have doubtlessly cast North Korea in a dark (and deserved) light.  That their sentence came down — and that it was so harsh — at the same time the U.S. is considering harsher consequences for North Korea’s bad behavior must be part of the whole picture.

So it comes down to that movie-tested line: The United States of America does not negotiate with terrorists, or with kidnappers.  There are arguments that can be made that North Korea’s detention of Lee and Ling makes the government a sponsor of both.

Now we wait.  We wait to see if it’s true that the U.S. doesn’t negotiate.  We wait to see if this is in any way a ruse on North Korea’s part, an attempt to get more attention, an attempt to seem merciful if the women are let go, an attempt to scare other journalists away from its borders.  We wait, and we hope — which is precisely the position that is most frustrating in these situations, and precisely, I suppose, the position that a mature democracy has to take.

None of that helps these two women.  None of it helps their terrified families, none of it shortens the gut-wrenching sensation that must accompany a sentence of 12 years’ hard labor.  My thoughts are with them, and the many hundreds of journalists who risk similar fates every year to bring us valuable stories from the darkest reaches of the world.  Theirs is work that should be honored, and protected, worldwide.

The Ultimate Beat Sweetener: The 31 Year Old “Dismantling G.M.”

The New York Times had a piece up over the weekend about Brian Deese, a 31-year-old law school student (on break, apparently) who according to their headline is “in charge of dismantling G.M.”

This story caught on, as just about any section-front story from the NYT seems likely to do.  I’ve seen it linked copiously (and I’ve done it myself), and it’s currently the top e-mailed and blogged story in the business section at NYTimes.com.

But here’s my question: Can they prove their headline?

The story includes a quote from Steven Rattner, “one of the leaders of President Obama’s automotive task force,” about Deese’s grad-school beard.  It has a quote from Larry Summers about his intelligence.  It cites “several people who were present for the debate” as saying that Deese spoke out against liquidation for Chrysler, and says he wrote a very persuasive memo about the bad that Chapter 7 could cause.  But the only one who seems to say that Deese was ever the guy in charge of the taskforce is Deese.  In fact, the White House doesn’t list Deese as a member of the Auto Task Force at all.  He’s listed as an economic adviser to the president at the White House Web site, but there’s no more formal designation that I can find.  So to say he’s running it is a pretty substantial leap.

And the Times seems to get that, but much further down in its story:

Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues. But it took the support of Mr. Rattner and Ron Bloom, senior advisers to the task force charged with restructuring the automobile industry, to help turn Mr. Deese’s positions into policy.

Normally, I kind of enjoy mindless profiles of major Washington players — they’re what Matthew Yglesias calls beat-sweeteners, pieces journalists write both to inform the public and to make their own jobs easier.  But this one seems particularly damaging, as it implies that the administration is leaving some very big decisions in the hands of a guy whose total automotive industry experience is apparently sleeping in the parking lot of a G.M. plant on his way to volunteer for the Obama campaign.

I’m wondering whether I could get a few friendly quotes dropped into the paper and turn myself into the point girl on, say, Health Care or NASA or something.  Who wants to try?

Jindal Wins: LA Loses Stimulus Funds

Governor Bobby Jindal’s rejection of $98 million in stimulus funding allocated to expand unemployment benefits in Louisiana will, apparently, stand, as a Louisiana House committee voted 6-3 today against a resolution to override Jindal’s wishes.

The House Labor Committee voted 6-3 against House Concurrent Resolution 8 by Democratic Rep. Rickey Hardy that would have been the first step in sidestepping the Republican governor’s decision. Committee Chairman Avon Honey, a Democrat, sided with opponents of the measure.

Hardy, D-Lafayette, said unemployed workers need the expanded benefits to help them take care of their families and cope with the national recession.

“Surely we can agree that we would like to see our citizens benefit from the money being offered by the federal government… It’s their money and they want it now,” he said.

The stimulus money would give unemployment benefits to thousands of people who normally wouldn’t be eligible for them, like certain part-time workers and people who leave jobs because of domestic abuse or a family member’s disability, and it would expand benefits to some others, including those with dependents.

Jindal opposed Louisiana getting the money because “it does come with strings attached,” according to his spokesman, namely that the increase in benefit allowance could increase businesses’ unemployment tax levels down the road.

Louisiana’s unemployment rate was 5.8 percent in March.  That’s not one of the highest rates in the country — it’s in fact half of what unemployment is in Oregon — but what that number hides is that government spending is a big part of the reason (h/t publius) that Louisiana’s unemployment rate has been steady to begin with:

NEW ORLEANS — Years before Washington spent $787 billion on a national stimulus bill, it staged an unintended trial run in Louisiana, a huge injection of some $51 billion for which historians find few, if any, precedents in a single state.

The experiment is still playing out, but some indicators suggest that what occurred in Louisiana — dumping a large amount of reconstruction money into a confined space in the three and a half years since Hurricane Katrina — has had a positive outcome. The state’s unemployment rate of 5.7 percent in February was considerably below the national average of 8.1 percent, and it was the only state to see a drop in unemployment from December to January. It was also the only state with an increase in non-farm employment in February.

So Jindal and state lawmakers can rest easily, almost happily, on that cushion of federal aid that’s keeping their unemployment low when they refuse to expand benefits.  In so doing, Jindal can throw down an impressive political gauntlet for whomever chooses to challenge him in 2012.  Look forward to a lot of, “Louisiana kept its unemployment low without taking needless monies from the government” ads.  (And then, let’s hope, look forward to rebuttals about the $1 billion he’s planning to add to the state’s budget this year thanks to that same stimulus).

Trust Fund, Baby: Paris Hilton and Social Security

Today, the Obama administration’s official Bearers of Bad News, fresh off the fun of Swine Flu and Stress Tests, announced that Social Security will deplete its trust fund by 2037, four years earlier than expected.  Scarier than that, in 2017 — just eight years from now — Medicare’s hospital insurance trust fund will run out of money.  That’s the fund that pays for inpatient hospital services, home health, skilled nursing facilities, and hospice care for those over 65.  So, not anything millions of seniors depend on or anything.

^{Glenn Francis/PacificProDigital.com}

Government trust funds are the same as “regular” trust funds.  They represent a surplus of income from one party that’s designed to support the life of another party.  So, either great-grandpa struck it rich in the hotel business, in which case you start drawing down your ~$30 million trust fund at 18, or great-grandpa paid payroll taxes every month, in which case a trust fund built from that contribution lets Social Security and Medicare provide services after age 65.

When a trust fund runs out for a big government program, it’s the same as when it runs out for a spoiled rich kid.  You aren’t instantly broke or on the street, and 2037 will likely be the end of neither Social Security nor Paris Hilton.  Money will still come in, but expenditures will be limited to income and to what other people will loan out.  So Social Security will still be getting tax income when it runs out of trust fund money, but not enough to cover the number of people expected to be drawing SS in 2037, just as a sudden depletion of available trust fundery (estimated at between $1-$4 million a year) would probably reduce the benefits available in life to Paris Hilton. 

Ms. Hilton could probably make up for the lost income by living on her AmEx Black for a while, just like Medicare and Social Security could probably live on government debt for a while — but eventually everyone reaches a limit.  Membership has only so many priviledges.

The government has the same options that Paris Hilton does to treat a shortfall: Raise revenue or reduce benefits.  Here’s the finding of the Doomsday Club:

The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.

[…]

Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

A 53 percent cut in benefits for Medicare.  It’s much easier to say that Ms. Hilton should spend less at Hermès than it is to tell seniors that they should consider skipping six months’ worth of medications, or a necessary surgery or, you know, food.  So the government’s solution will be the same as Ms. Hilton’s, most likely: Raise revenue.  While it’d be nice if the government could make money simply by showing up at a club, right now the only way it’s going to get that money is through an increase on taxes.

Now, who is it that has to say yes to raising taxes?  Oh yeah: Congress.  If John Boehner’s late-April op-ed in the Washington Times is right, I’d say right now there’s about the same chance of a tax increase being passed by the Senate as there is of Paris Hilton being elected to the Senate.  Actually, her chances may be higher.  Stranger things have happened in California.

Really, this is an issue that has to go before Congress, and predictions are some kind of Medicare fix will hit the deck this year or next.  I can’t imagine anyone voting to cut Medicare benefits by half, but five years ago I couldn’t imagine anyone giving George W. Bush a second term.

So perhaps it’s time to look into a government reality show franchise, before all of our seniors are living very, very simple lives.

Battleground Pennsylvania: Ridge v. Specter?

Just yesterday, it was early 2009 and there was no need to start worrying our pretty little heads about 2010 elections yet, right?  That’s just for Nate Silver to worry about.

Then, suddenly, this weekend, Pennsylvania kind of exploded.

This is all the aftermath of Specter switching parties, of course — but it seems like a move meant to make things calmer for his election bid has done exactly the opposite.

For one, it sounds like Tom Ridge is considering jumping into the Pennsylvania 2010 Senate race.  Roll Call reported this weekend that someone close to Ridge is saying he’s going to get involved, and also that moderate GOP forces are leaning on him to do so.

Ridge was governor from 1995-2001, when he joined the Bush administration’s Homeland Security Office.  When it was elevated to a cabinet-level agency, he became its first secretary, serving there from 2003-2005.  He has since been on the board at Home Depot and a tech firm that was sold to Lockheed Martin, and runs Ridge Global LLC, a firm that seems to specialize in security planning — think big events and college campus plans.  He’s usually considered a “moderate” Republican, where you could easily replace “moderate” with “pro-choice.”  Of more interest in this contest might be that Ridge has been publicly calling waterboarding torture since January 2008.

In short, he hasn’t kept his nose spotless since leaving office — the major pay he earned helping make a company tasty for Lockheed might look ugly upon closer inspection — but he’s probably well-positioned to be a serious contender in this fight.  Ridge was a popular governor (he had a 63 percent approval rating when he left office), and if he positions himself as a moderate alternative to Pat Toomey, the guy who scared Arlen Specter out of the party, he might do well with precisely the coalition that Specter has depended upon in past races.

It’s not even a sure thing that Specter will be the Democratic nominee.  President Obama has said he’ll support Specter, but you’ve gotta wonder how enthusiastic that support will be if Specter continues voting down the President’s preferred legislation and nominees.  His continued and, I think, non-sensical opposition of EFCA in particular is enraging the left — and that led to what I see as the Lighting of the 2010 Penn Fuse this weekend, when Representative Joe Sestak (D-Penn.) appeared on John King’s “State of the Union.”  There’s pretty much only one reason Sestak would appear on a Sunday talk show: to warn Specter, and the party, that he’s coming for them.  And he delivered:

SESTAK: What I need to know is, what is he running for? And second, how will he use his leadership, which didn’t seem to work in the Republican Party, to better shape us? If he has the right answer, so be it. We move on.

But I hate to tell you, we’re in a very critical moment, John. Health care for everyone in an affordable, accessible way. Overseas, we are in a real challenge with Pakistan and Afghanistan as we redeploy from Iraq. Where is he on that?

Energy, education, is Pennsylvania — it is such an elder state, how do we retain the youth there so we can be all we can be? That’s what I have to hear. What are you running for? And that’s what I got in for after I left the military three years ago.

Sestak isn’t the only Democrat considering the race; Jack Wagner, the current state auditor general, is said to be considering a run — and his campaign Web site is kind enough to point out (again, and again, and again) that he won more Pennsylvania votes than Barack Obama — and any other candidate — in the 2008 election.  Auditor General might sound obscure to many non-Pennsylvanians, but the AG before Jack Wagner was a guy who now goes by U.S. Senator Bob Casey.

It seems to early to guess what the race will center on issues-wise, but just the fact that the GOP is looking for a more moderate candidate while the Dems — with Sestak — are seeking someone further to the left says this promises to be a race that says a lot about where the parties want to go (and whether they’re going to get there) in 2010 and beyond.

Remember just yesterday, when it was too early to even think about this stuff? 

Me either.  Keystone State 2010: Game on!

Photostreaming the Presidency

The White House released about 300 new photos to its Flickr Photostream this week.  They are — well, they’re remarkable.  And people have been marking on them, over and over and over again.  The comments being offered at Flickr range from the funny to the absurd, and in between, there are thank yous and little notes of inspiration — and, because it’s the Internet, of course, there are trolls.  The whole stream reads, in fact, like the real story of the first 100 days — frustration, hope, confusion, charm, pride, ire, all of it.  

Pete Souza is the White House photographer.  He was also an official photographer during President Reagan’s term, and has published two books of photos drawn from those times.  He recently gave an interview to John King on CNN, and said, “I look at my job as a visual historian. The most important thing is to create a good visual archive for history, so 50 or a hundred years from now, people can go back and look at all these pictures.”

And from these pictures, in 50 years, I think people will be able to piece together a pretty accurate story of how things were in the White House in 2009.

His work here is stunning not just in quality, but in access.  (There’s already been a little kerfluffle on the Internet today about these photos — one exposed the cover-sheet to a Classified Secret CIA fax).  More stunning than even that is that these photos are up on Flickr, and under a Creative Commons License.  As long as you give credit, you can view them, link to them, download them, share them on your blog or Facebook page, alter them, make them your wallpaper — or just marvel at them, as many times as you want.

I’ve marvelled quite a bit already.  The total slideshow takes… well, I don’t know how long it takes.  It felt like about five minutes but was probably closer to 30.  Here’s a few that caught my eye.  Clicking on any of these photos will take you directly to their Flickr pages, from where you can read the comments or follow through the rest of the stream.

Obama at a budget meeting, January 29, 2009:

The President and the First Lady, Feb. 26, 2009:

Secretary of State Clinton and President Obama, April 9, 2009.  It was in the low 60s that day.

Obama and his daughters, March 3, 2009:

Obama and David Axelrod leaving a Town Hall in Costa Mesa, Calif. on March 18:

Rahm checks the news, April 24, 2009.  The original is large enough to confirm that, yes, that’s USA Today.

All photos by Pete Souza.

And if these left you feeling too hopeful, the White House released photos from the president’s Pandemic Flu meeting today, too.

Supreme Court Justice Souter to Retire

NPR is reporting that Justice David Souter plans to resign in June, at the end of the Court’s current term:

Factors in his decision no doubt include the election of President Obama, who would be more likely to appoint a successor attuned to the principles Souter has followed as a moderate-to-liberal member of the court’s more liberal bloc over the past two decades.

In addition, Souter was apparently satisfied than neither the court’s oldest member, 89-year-old John Paul Stevens, nor its lone woman, Ruth Bader Ginsburg, who had cancer surgery over the winter, wanted to retire at the end of this term. Not wanting to cause a second vacancy, Souter apparently had waited to learn his colleague’s plans before deciding his own.

Souter, who’s 69, was appointed by President George H.W. Bush in 1990 and was expected to join the conservative majority — but has, instead, consistently voted with the liberal wing, including on decisions as important as Planned Parenthood v. Casey, where his written opinion argued for upholding Roe v. Wade.  Just yesterday, Souter defended the federal law that provides broader oversight to voting rights.

It’s very interesting timing, of course; the Democrats now have a new member, who sits on the Senate Judiciary Committee.  The upcoming nomination battle should prove a real test of Arlen Specter’s principles.  Specter voted to confirm Samuel Alito to the Court in 2005 despite Specter’s own pro-choice views.  That shows a willingness to put party before principle that, honestly, might work out nicely for the Democrats — unless Specter wants to make a point of his independence by opposing a new appointee, in the same way he seems to be standing firm on his opposition of Dawn Johnsen for OLC.  Further than that, Specter said his votes for Alito and Roberts were based on believing they were qualified for the jobs — which would seem to set him up to vote for any liberal candidate that Obama brings forward.

Just by the numbers, though, Specter’s vote on the committee might matter less than the totals on the Senate floor.  With any luck, the Democrats will have added another member — Al Franken — to the fold by the time the vote hits the floor, and it seems possible they might be able to recruit a Republican-lite other than Specter, should he decide to defect, to fight any filibuster threat.

The next question, of course, is who Obama will select — and when he’ll name the nominee.  Salon offered a nice list of 10 probables in November, and Sonia Sotomayor still seems to be the favorite.  Beyond that — I’d love to see Elena Kagan in the spot, but I imagine the administration doesn’t want to fight a Supreme Court battle at the same time they have to look for a new solicitor general.  On that one, I assume there will be wild — one might say pandemic — speculation in the next few days.

Luckily, the president has nothing else going on right now, and it’s not like the Court matters, so I’m sure this will be easy, quick, and painless.  Right?

A Hot Wheels Primer to Chrysler Bankruptcy Day

Remember Hot Wheels?  I used to have a few, many of which I raced and then crashed off the roof of my Barbie dream house.  They were great, simple toys, and they were even better because they were such exact replicas of the real versions that there was a certain satisfaction in playing with them.  It made me feel like I really understood cars.  I didn’t, of course, but it did offer some insight into the basics: for instance, don’t drive a car off the roof.

I think Hot Wheels cars can be useful again for getting a surface understanding of the Chrysler deal.  Specifically, the Dodge Viper:

It glitters!  Ah, the good old days.

Anyway.  As you may remember, today (April 30) is the deadline for Chrysler to return to the government with a viable restructuring plan.  If it does, it gets a cookie — in the form of about $8 billion in additional government financing to see it through.  If the plan is unsatisfactory, Chrysler heads to bankruptcy.

The good news from this week and weekend is that Chrysler managed to get a Treasury-approved deal worked out with the United Auto Workers.  The New York Times reports that members approved on Wednesday “a complex deal that changes work rules, cuts benefits and gives the union a 55 percent stake in Chrysler as partial funding for its retiree health care trust.”  A deal with Fiat is expected to be signed, well, right now, or by tomorrow, that will offer Fiat a 20 percent stake up front, with management control, and a possible expansion to 35 percent equity going forward.  Welcome to the new Chrysler:

But though the UAW has agreed to this deal, and Fiat seems on the verge of agreement, the whole thing is being held up by Chrysler’s lenders.  I wrote about this earlier, when the Wall Street Journal reported that J.P. Morgan Chase was leading the charge not to forgive any of Chrysler’s debt.  Well, now it turns out that JPMC and the other three largest lenders to Chrysler have agreed to take a significant cut in what they’re owed.  Here’s what’s currently outstanding to lenders at Chrysler:

That’s a total of $6.9 billion.  The Treasury Department has worked out a deal where the lenders — all 46 of them — would get $2.25 billion, cash, in exchange for relieving Chrysler of its debt.  That means the four biggest debt-holders would see a $1.5 billion return on their $4.8: a total loss of $3.3 billion.  The other lenders would see $350 million on their owed $1.1 billion — a total loss of $750 million.

And yet it is these smaller lenders that are holding up the process, not the four big banks.  Why?  As the Wall Street Journal and Felix Salmon tell it, the big banks bought Chrysler debt at full price, back in the day (I do not know what day); the smaller lenders, including hedge funds, bought the debt at a huge discount, once it became much riskier that Chrysler wouldn’t be able to pay up.  If Chrysler goes into bankruptcy, they stand at the front of the line to get money back — and they might stand to make a profit, whereas the big banks are going to lose something either way.

It’s these smaller lenders, the hedge fund folks, who are currently torpedoing the talks.  You might wonder, as I did, why this even matters — if the four biggest lenders are on board, isn’t it enough to have their votes?

Well, apparently the proceedings here are more like the Senate than the House: Rhode Island gets the same number of votes as California.  The guy who holds $1 million in Chrysler debt has the same say as the guy holding $1 billion.  That’s not just some weird fairness decision — it’s apparently because the Obama administration is worried about legal challenges to the deal if everyone doesn’t agree.

So, where does that put Chrysler today?  I’m guessing it puts Steve Rattner, the Car Czar, locked into a small room with crappy coffee and at least eight very unhappy bankers, until midnight eastern time.  And if they can’t work out a deal, what will Chrysler look like?

Oh, OK, nothing quite so dramatic, probably.  Strangely, the Obama administration is of two minds on this one.  At his press conference, the president said he’s “hopeful” that Chrysler could go through a “very quick type of bankruptcy.”  But The Wall Street Journal reports Treasury is singing a different tune:

Treasury officials remain concerned that a Chapter 11 filing could lead to a loss of control of the car maker’s future. Some Chrysler creditors could argue in court that the company is worth more to them in liquidation than they are granted in the Treasury’s deal, which offers the creditors about 29 cents on the dollar in cash. Some of the creditors have signaled they are prepared to fight the matter in court.

Whether this is going to end that badly or not, we might not know for a while.  But whether that direction is likely… well, that we should hear within the next twenty hours.

Beep, beep.