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First Thoughts: McConnell's parachute

Breaking down Mitch McConnell’s parachute (or Hail Mary punt)… At first glance, the politics might look good for the GOP (because McConnell’s plan forces three votes and gives Obama all the responsibility for raising the debt ceiling)… But it could hurt the GOP with its base, and it exposes GOP leaders for punting on the deficit when they had the ability to reduce it… Did Obama win the argument?... The president’s good (but not jaw-dropping) 2ndQ haul… GOP presidential candidates largely irrelevant in the debt-ceiling fight… Gingrich and Santorum campaign in South Carolina… Hahn wins in CA-36… Favored Dem challengers win their WI recall primaries… And the surprise FEC report of the cycle goes to GOP Senate candidate Josh Mandel.

*** McConnell’s parachute: The best way to view Senate Minority Leader Mitch McConnell’s proposal yesterday (which would give Obama the ability to raise the debt ceiling without Congress’ full approval) is as a parachute. Another way to view it: a Hail Mary...punt. It enables President Obama and Wall Street to escape from default. And more importantly, it provides an escape for Speaker John Boehner, since he can't figure out which pledge to ask his members to break -- the 1-to-1 ratio of deficit reduction to debt ceiling raise, or not raising taxes. Make no mistake: Everyone at yesterday’s White House meeting (Obama, congressional Dems, congressional Republicans) seems to be on board with McConnell’s last-ditch proposal. And, folks: The grand bargain is now DEAD-dead. McConnell made that clear in his floor speech yesterday.

*** Looking at the politics: At first glance, the politics of the proposal might look good for the GOP. They get to force Democrats -- three times -- to vote to raise the debt ceiling between now and Nov. 2012, according to the proposal. Also, it forces Obama to assume just about all the responsibility for the increase, and it gives Republicans a free vote to look tough without assuming responsibility. But once the debt-ceiling crisis is averted, will those votes garner a lot of national attention? What’s more, many observers will probably conclude that the debt ceiling was increased simply because Republicans just changed the rules. But most of all, McConnell’s gambit could hurt him and the GOP with the grassroots. Outside of Grover Norquist and the Wall Street Journal editorial page, conservatives aren’t too happy (see: Jim DeMint, Erick Erickson, and Bill Kristol.) McConnell may have rescued John Boehner from having to put his speakership on the line, but in doing so, he took a pretty potent arrow that could have long-term consequences. McConnell is the ultimate tactician, pure and simple; it's his gift and his burden.

*** The GOP cares about low taxes and shrinking government, not the deficit: Yet perhaps the biggest takeaway from McConnell’s proposal is that it exposes Republicans leaders for not acting on the deficit and debt when they had the power to do so, and when they had a Democratic president willing to do things that probably won't be seen for a generation. When Obama put $4 trillion in deficit reduction on the table (as long as Republicans added revenues to the mix), they walked away. And when they had Democrats tying spending cuts to the debt increase, they ended up punting. Here’s the lesson we’ve all learned: What the GOP cares about is low taxes and shrinking government. The deficit and debt are only means to that end.   

*** Obama won the argument? One more point on the McConnell plan: It's also a concession of sorts that Republicans realize they can't "win" this stalemate. They only lose badly or lose honorably. The president had painted McConnell and Boehner (especially) into a corner.

*** Obama’s good (but not jaw-dropping) number: Obama's campaign team this morning announced that it and the DNC raised a combined $86 million for the 2nd quarter, exceeding their combined $60 million goal for the quarter. The campaign itself raised $47 million (which is the true apples-to-apples comparison), and that's more than he raised in the 2nd quarter of 2007 (about $35 million), and it's more than the whole 2012 GOP field combined, minus Bachmann's yet-unannounced haul (about $35 million). Yes, most of the focus was raising money for the DNC, but Obama's $47 million isn't the jaw-dropping amount some, including us, were expecting. In the second quarter of ‘07, Obama and Hillary Clinton combined raised more than $60 million. The best news for Obama: More than 550,000 donors contributed to the campaign with an average of $69 per donation, which means that Obama's small-money army is there and can give again -- and again and again. (In fact, it says that 98% of its donations were $250 or less.)

*** 2012 vs. 2008 (so far): One thing we’re learning from the 2012 fundraising numbers: There’s been no inflation rate. Obama didn’t raise SIGNIFICANTLY more than he did at this point in 2008. And Romney even raised LESS than he did in his first full quarter in the ’08 cycle. This could be a few things: burned-out activists, tough economy, negative Washington stories.

*** GOP candidates largely irrelevant in the debt-ceiling debate: The Wall Street Journal yesterday had Republicans criticizing Romney for being MIA on the debt-ceiling fight. But here’s a simple truth: All the GOP presidential candidates essentially have been largely irrelevant in this big debate. Yes, Bachmann has said she’ll vote against any debt increase. And, yes, Pawlenty and Rep. Ron Paul are opposed to raising it, too. And Santorum wants a balanced-budget amendment in exchange for raising it. But none of these Republicans has truly influenced the debate. And that’s one of the big differences between this presidential cycle and 2008. Four years ago, several sitting senators were running for president (Obama, McCain, Clinton, Biden, Dodd, Brownback), and they had a voice in the big legislative fights on Capitol Hill (like Iraq and TARP). But this time around, most of the candidates are ex-governors (Romney, Pawlenty, and Huntsman), who are standing on the sidelines. The exceptions are Bachmann and Paul, and they aren’t players in these debt meetings.

*** On the 2012 trail: The campaign activity remains in South Carolina: Santorum is in Myrtle Beach and Spartanburg… And Gingrich stops in Charleston and Rock Hill.

*** Hahn wins in CA-36: As expected, Democrat Janice Hahn defeated Republican Craig Huey in yesterday’s special congressional run-off in California. And also as expected, it wasn’t a rout. “Hahn, a Los Angeles City Councilwoman and member of a political dynasty, earned about 55% of the vote to Huey's 45% when all ballots were counted late Tuesday,” USA Today writes. “She succeeds Democrat Jane Harman, who resigned to run a Washington think tank, in California's 36th District.” The LA Times adds, "Although Hahn was considered the favorite because of Democrats' 18-point registration lead in the largely coastal district, the race was believed to be tightening because Huey poured more than $800,000 of his own money into his campaign to rally "tea party" members and others discontented with Washington."

*** Favored Dems win primaries in WI: Meanwhile, in Wisconsin yesterday, all of the favored Democrats won their primaries, setting up Aug. 9 recall clashes against six GOP state senators. Per the Milwaukee Journal Sentinel, “Six fake Democratic candidates put up by the Republican Party to buy time for Republican state senators subject to recalls accomplished that job Tuesday, but none of them did the unexpected and knocked off a real Democrat. Candidates backed by the Democratic Party won all six Senate primary elections, all but one of them by substantial amounts. They'll all go on to face the Republican incumbents on Aug. 9, in an attempt by Democrats to regain control of the state Senate and put the brakes on Gov. Scott Walker's agenda.”

*** The surprise FEC report of the quarter? That distinction belongs to Ohio state Treasurer Josh Mandel (R), who’s running for U.S. Senate. Mandel raised more than $2.3 million for the quarter -- more than Sen. Sherrod Brown’s haul.

***Wednesday’s “The Daily Rundown” at 9:00 am ET: Latest on debt talks with DCCC Chairman Rep. Steve Israel (D-NY)… National Journal’s Jonathan Rauch on the “Law of 14” for politicians seeking the presidency or vice presidency… Former Reps. Martin Frost (D-TX) and Tom Davis (R-VA) join the Washington Post’s Ruth Marcus to talk debt dealings and 2012...

Countdown to Wisconsin recall general/primaries for Dem senators: 6 days
Countdown to Wisconsin recall general for GOP senators: 27 days
Countdown to Iowa GOP straw poll: 31 days
Countdown to Wisconsin recall general for Dem senators: 34 days
Countdown to NV-2 special election: 62 days
Countdown to Election Day 2011: 118 days
Countdown to the Iowa caucuses: 208 days
* Note: When the IA caucuses take place depends on whether other states move up

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