Photograph by Andrew Harrer/Bloomberg

The platform being built on the west front of the U.S. Capitol in preparation for the inauguration ceremony of President Barack Obama in Washington on Dec. 11, 2012.

Nine in 10 members of the U.S. House and Senate who sought new terms in office this year were successful, improving their record for re-election even as public approval of Congress sank to all-time lows.

The Bloomberg Government Barometer shows that 90 percent of House members and 91 percent of senators who sought re-election in 2012 were successful, exceeding the incumbent re-election rates of 2010, when 85 percent of House members and 84 percent of senators seeking re-election were successful. For senators, this year’s re-election percentage was the highest since 2004.

Voters were more likely to return their own representatives to office even though the public had a dim view of the legislative branch as a whole. Congress had a 21 percent approval rating on Oct. 15-16 after reaching all-time lows of 10 percent in February and August, according to Gallup polls. Just 10 percent of Americans said that members of Congress have high or very high honesty and ethical standards, according to Gallup data for Nov. 26-29.

“It wasn’t a ‘throw the bums out’ election, it was a ‘throw the bums in’ election,” John J. Pitney Jr., a professor at Claremont McKenna College in Claremont, California, said in an interview.

In the 435-member House, 391 members sought new terms and 351 were re-elected. In the Senate, 21 of 23 senators seeking to extend their tenure were successful. The results contrast with 2010, when more than 50 Democrats lost in a Republican wave that formed at the midpoint of President Barack Obama’s first term.

Original post is Voters Threw `the Bums’ Back In by Political Capital.

Photograph by Win McNamee/Getty Images

Ralph Reed, president of the national Faith and Freedom Coalition, addresses the Faith and Freedom Coalition on June 3, 2011 in Washington.

Ralph Reed, who helped build the Christian Coalition in the 1990s, says House Republicans should fight to retain charitable tax deductions and child tax credits as they negotiate with President Barack Obama on avoiding automatic spending cuts and tax increases in January.

“You’d better start figuring out a way to be for middle-class families with children instead of looking like all you care about is a guy’s capital gains tax,” Reed said in an interview today at Bloomberg Government”s Washington offices.

He has conveyed that message to House Republican leaders — telling them that social conservatives “shouldn’t be trapped into this stained glass ghetto of ’we’re the people that you talk to about abortion and same-sex marriage, but we don’t know the first thing about economic policy or fiscal policy.’”

Reed, 51, left the Christian Coalition in 1997 and started a nonprofit organization called the Faith and Freedom Coalition three years ago. The Georgia-based group raised at least $10 million and spent much of its money developing a database of and reaching out to evangelical voters, Reed says.

Between coalitions, he worked as a political consultant, including for President George W. Bush’s campaigns, and unsuccessfully ran for lieutenant governor of Georgia. He was tangled, though not criminally charged, in the Jack Abramoff lobbying scandal for his work on behalf of Indian tribes with casino interests.

Reed remains chairman and chief executive officer of Century Strategies LLC, an Atlanta-based consulting firm he founded in 1997.

Original post is `Stained Glass Ghetto’ A Trap for Republicans, Ralph Reed Warns by Political Capital.

Photograph by Victor J. Blue/Bloomberg

David Rubenstein, co-chief executive officer of Carlyle Group LP.

Written with Jason Kelly

What would David Rubenstein do?

That was the question posed to the private-equity tycoon and former Carter administration policy wonk today in Washington, as the town stares down a so-called fiscal cliff that, if breached, would probably throw the country back into recession.

“The election results change everything,” Rubenstein, co-founder and co-CEO of Washington-based Carlyle Group, said in a lunchtime discussion with Jason Kelly, managing editor for Bloomberg Link, at Bloomberg Government’s offices in the capital. “Once the election was over, I think Republicans recognized that the president had more ability to persuade members of Congress that his way was more likely to be the prevailing way.”

A lifelong Democrat who served as deputy assistant for domestic policy to President Jimmy Carter, Rubenstein said he sees four elements of revenue increases in an eventual fiscal bargain: higher marginal tax rates — “though probably not as high as 39 percent,” a bump in the capital gains tax to 20 percent, a dividend tax rate between 20 percent and 25 percent and a higher estate tax.

Spending cuts, Rubenstein said, will probably be negotiated “down the road.”

As the chief fundraiser for Carlyle, which oversees $157 billion, Rubenstein travels to about 50 countries a year. Everywhere he goes, he said, the first question people ask him is not about Carlyle, but about the fiscal cliff.

“The markets would be in chaos” if the U.S. failed to resolve the $607 billion of spending cuts and tax increases that are set to start in January unless Congress acts to avoid them, Rubenstein said.

Still, according to the global investor, “people have taken the view that this will get resolved. The markets believe a deal will get done.”

Original post is Rubenstein: Markets Expect No Cliff by Political Capital.

Photograph by Roger Wollenberg/Getty Images

Speaker of the House John Boehner, Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi, and Senate Minority Leader Mitch McConnell emerge from the White House on Nov. 16, 2012.

One might think, given all the debate over tax increases and spending cuts and averting a “fiscal cliff” at year’s end, that the White House’s pursuit of a $4-trillion, 10-year solution suggests the government’s habit of deficit spending could be cured.

One might be wrong.

“It will take almost $6 trillion in deficit reduction during the next decade to make a minimum down payment that puts the nation on a sounder fiscal footing.”

This is the conclusion of a Bloomberg Government study that examines the ratio of federal debt to the nation’s gross domestic product.

That ratio stands at about 73 percent today.

The “most likely” package to come out of the negotiations over averting the fiscal cliff of automatic tax increases and spending cuts scheduled at year’s end — that $4 trillion agreement — would allow the ratio of debt to GDP to grow to 80.2 percent, the BGov study shows. The study, written by BGov Director of Research Robert Litan and three other analysts, shows that it would require a $5.9-trillion, 10-year deficit reduction plan to hold the debt-to-GDP ratio at today’s level.

And holding course is not the most prudent course.

“`A 60 percent debt-to-GDP ratio is considered the financially sound level for countries to maintain,” Litan and company write. That would require a $9-trillion plan, more than double what’s likely to come out of the cliff talks.

Original post is Fiscal Cliff Deal No Deficit Solution by Political Capital.

Photograph by Win McNamee/Getty Images

University of Denver students Zach Gonzales, left, and Dia Mohamed stand in for President Barack Obama and Mitt Romney during a dress rehearsal for tomorrow's presidential debate on October 2, 2012 in Colorado.

More than 2.4 million ballots were cast the last time Coloradans voted for a president.

So whose policies matter to the electorate in the state that will host the first presidential debate of the season, one of few states which the candidates are most heavily contesting?

Taxes on high-income earners? President Barack Obama’s plan to roll back the Bush-era tax cuts on incomes above $200,000 for individuals affect about 79,000 filers in the state, or just 3 percent of the population, according to a Bloomberg Government Study released today. Those millionaires who might pay more under a separate proposal known as the Buffett Rule? There are about 4,300 in the state.

Challenger Mitt Romney wants to eliminate taxes on capital gains, interest and dividends for households with income of less than $200,000. That helps about 36 percent of Colorado households, according to the study by BGOV senior economic analyst Nela Richardson and legislative analyst Melissa Avstreih.

Overall, Colorado’s economy is in decent shape. The state lost 61,000 jobs in the last four years, a 2.6 percent decline. Its most recently reported unemployment rate is about 8.2 percent, slightly higher than the national average. Romney would reduce the federal workforce by 10 percent through attrition, which could cost the state 4,000 jobs.

About 21 percent of Colorado’s mortgage holders are underwater, about the same as the national average. About 6 percent of the state’s mortgages are seriously delinquent or in foreclosure, compared with 12 percent nationally.

Avstreih and Richardson also reviewed the potential effects of sequestration, the automatic spending cuts set to begin in January.

Defense contracts in the state could be slashed by $590 million, and Medicare providers could have their payments reduced by $210 million under the automatic cuts unless Congress and the president agree on an alternative deficit reduction plan. The election could determine whether such a deal is possible.

Original post is Colorado: What’s at Stake This Year by Political Capital.

David Chavern, chief operating officer of the U.S. Chamber of Commerce, said today: “I don’t love China-bashing.”

“Without regard to what party you are, picking fights with trading partners probably isn’t the best way to have expansion of the global trading system” said Chavern, who also serves as executive vice president of the largest business lobbying organization in Washington.  ”In terms of the China-bashing that everybody seems to love, we think has a long-term negative effect in terms of the debate.”

What he does favor, Chavern said at a Bloomberg Government Breakfast in Washington, is investing in education.

“We favor federal activism in the area of education,” he said. “We are not producing the people we need for this economy.”

He noted, for example, that wherever he goes he is told it is hard to find skilled welders.

Brian Wingfield contributed to this post

Original post is Chamber’s Chavern: ‘Activism’ in Education, not ‘China-Bashing’ by Political Capital.

Photograph by Brian Cahn/Zuma Press

Tim Pawlenty stumps for Mitt Romney at the opening of Romney's Las Vegas campaign headquarters.

Party unity?

Not in campaign contributions.

The Republican National Convention is a chance to bring together Republicans from Portland, Maine, to Portland, Oregon, and from Manhattan, New York, to Manhattan, Kansas, to gather around the party’s presidential nominee.

Also-rans have had some opportunities to address convention-goers, from Newt Gingrich hosting a series of seminars called Newt to Rick Santorum’s Tuesday evening address, and to exhort their supporters to rally around nominee Mitt Romney.

One place we  haven’t seen such unity is in campaign contributions.

Bloomberg Government made an analysis of itemized donors giving to all Republican candidates during the party’s primary election season.

Of the over quarter-million people who contributed amounts above the disclosure threshold — the $200-and-up contributions that require a donor’s identity — 56 percent donated to Romney. Which means more than four in 10 gave to someone else.

Romney has had varying levels of success among different groups of donors.

With Minnesota’s Tim Pawlenty, who dropped out early in the process and quickly endorsed Romney,  20 percent of his donors gave to Romney. Texas Governor Rick Perry saw 16 percent of his donors give to Romney, Jon Huntsman 14 percent,  Gingrich just over 5 percent and Santorum 3 percent. Ron Paul’s supporters? Less than a quarter of one percent.

Specifically, the supports of other candidates who have money to Romney:

Santorum 3.47%

Perry 15.89%

Pawlenty 19.74%

Paul 0.25%

McCotter 9.46%

Huntsmen 13.68%

Gingrich 5.21%

Cain 9.41%

Bachmann 7.66%

Original post is Romney Draws Small Share of Money from Party Primary Rivals’ Donors by Political Capital.

Photograph by Brendan SmialowskiAFP/Getty Images

A view of an iPad and iPhone Facebook screen.

While most people still turn to traditional sources of media for news, the laptop, tablet and smart phone are catching up.

”There has been a significant movement toward new media,” said David Lauter, chief of Tribune Co.’s Washington bureau, detailing the findings of a new survey that has found 40 percent turning to their electronic devices for news.

One in four say they use Facebook on a daily basis to find information about politics.

With a gentle wind stirring around the Republican Party’s convention hall in Tampa and a sporadic drizzle falling from an overcast sky,  the survey sponsored by Bloomberg, the University of Southern California’s Annenberg Center on Communication, Leadership and Policy and the Institute of Politics at Harvard University’s John F. Kennedy School of Government was rolled out today at one of many events Bloomberg and its partners are sponsoring across the river from the Republican National Convention.

Younger voters turn more heavily to the likes of Comedy Central’s The Daily Show, this survey found, yet they still count on traditional sources. The  survey ranked trust in news sources, and found local TV newscasts outranking Jon Stewart — with Twitter trailing behind.

Younger voters rely on social media heavily. Asked about what they have learned on Facebook, 58 percent said it was news they already had heard somewhere else, and about one-third were finding news. It could be, Lauter said, that people are going to social media to confirm what they already have heard.

A majority of those surveyed said they had first heard the news of Rep. Paul Ryan’s selection as a running mate for Mitt Romney on TV, while younger voters tended to have heard about it online.

“

Original post is Facebook, Comedy Central: Gain on Traditional, More-Trusted Sources by Political Capital.

Photograph by J. Scott Applewhite/AP Photo

House Budget Committee Chairman Paul Ryan works with Republican members of the committee on Capitol Hill in Washington before introducing his "Path to Prosperity" debt-reduction plan.

“House Budget Committee Chairman” may sound like a top-tier power position to people outside the Beltway. Insiders know the committee as something much different: a place where nothing important happens very often.

However, Paul Ryan’s addition to the Republican presidential ticket has suddenly thrown the spotlight on the work of the Budget Committee. As chairman, Ryan was the architect of several wide-ranging budget proposals, creating a large record of his positions spanning the full breadth of the federal government.

Before his selection as Mitt Rommey’s running mate, Ryan’s position as the 5th Ranking Republican on the Ways & Means Committee — which plays a crucial role in creating legislation on taxes, trade and Medicare — was arguably as important as his Budget chairmanship.

The Budget Committee’s main product – the annual congressional budget resolution — is usually done with debate before summer arrives. The committee’s work for the rest of year consists mainly of holding little-watched hearings on fiscal and monetary policy.

Even if the House and Senate reach agreement on a budget resolution — an increasingly rare accomplishment — the document doesn’t have the force of law and never goes to the president for his signature. Instead, it’s a nonbinding blueprint for taxes and spending.

It’s a document where big ideas often go to die.

Ryan’s addition to the Republican ticket has breathed new life into his work on the Budget Committee. Robert Litan, director of research for Bloomberg Government, and Christopher Payne, a senior economic analyst for BGov, have explained in detail how Ryan’s record on the committee dramatically raises the stakes for the upcoming election.

“With his pick of U.S. Representative Paul Ryan as his running mate, Mitt Romney now agrees with President Barack Obama on at least one thing: this election is about big choices,” Litan and Payne write on BGov.com

As vice president, Ryan would be in a far stronger position to turn the big ideas in his Budget Committee blueprints into actual policy.

And as the record of his Budget Committee work becomes clearer, Ryan’s new inside track to the White House has energized the bases of both political parties.

Original post is House Budget: A Document Where Big Ideas Often Go to Die by Political Capital.

Photograph by Luke Sharrett/The New York Times via Redux

A campaign stop by President Barack Obama at Rollins College in Winter Park, Fla., on Aug. 2, 2012.

There is good news and bad news for the president in the numbers.

President Barack Obama’s 2012 campaign fundraising is the second most successful machine ever.

The first: Obama’s 2008 machinery.

The president also has spent much of his re-election money — $400 million spent since the beginning of last year, by The New York Times’ count, including $86 million for advertising. And now Republican Mitt Romney and his party and the super-PACs supporting him are out-raising the president.

Yet, for all this effort, the campaign still is relatively young. Romney has been involved in a general election campaign for just a few months. A lot of Republican money stayed on the sidelines in the party’s primaries, and that is flowing now — giving Romney a temporary boost.

Romney’s biggest donors are going to max out. If they are cutting a check for $5,000, then they’re done with direct donations to the campaign. (They also can give as much as $50,000 to a joint committee raising money for the campaign and party committees, minus that $5,000 if they’ve written the campaign a check.) Obama has a large pool of small donors that he can keep going back to, many of whom register for auto-debit payments where they give a gift of $20 or $30 a month.

News of Romney’s fund-raising edge will help Obama. Leading up to the end of the monthly deadline for reporting contributions, Obama’s campaign was issuing numerous e-mails like Vice President Joe Biden’s saying the only way they’ll lose is if they are outspent. It’s one thing for the party to cry poor, or the campaign to cry poor, but when on-the-fence donors, or other donors, see this story they will open up their checkbooks and/or credit cards.

At  the Rally at Panther Stadium, aka Bank of America Stadium, in Charlotte on Thursday night of the Democratic National Convention the first week of September,  there probably will be signs and messages asking people to donate via text or smartphone to the campaign. People watching at home and in the arena can text $10 to $50 to the campaign, $10 most likely, and that can start to add up quickly.

The bad news for Obama:

Most Americans do not donate. The 2008 election was an aberration for participation with hundreds of thousands of small donors giving. These small donors are, from anecdotal evidence, not mobilized as much this time around and are struggling with the increased cost of consumer goods.

Romney’s running mate may bring in even more money. When Senator John McCain, the Republican nominee in 2008, announced Sarah Palin as his running mate, money poured into the McCain campaign. She excited the small donor base of the Republican Party. Before Obama, the most successful small-donor fundraisers were Ronald Reagan, George Bush and Gary Bauer.

If Romney can pick someone who can have the Palin effect, that could be a problem for Obama — though the candidates most often mentioned in news accounts as the announcement nears, former Minnesota Governor Tim Pawlenty and Ohio Senator Rob Portman, lack that star fundraising lustre.

Obama is losing the money race among the super-PACs. Priorities USA, founded by Bill Burton and other former Obama staffers, is not competitive with Romney’s supporting committee or the American Crossroads committees co-founded by Bush operative Karl Rove.

At the end of the day, Obama is not where he wants to be in 2012, but it’s not the end of the world and he’s going to be more than competitive.

Original post is In the Biggest Money — for Obama: Good News, Bad News by Political Capital.