SUMMERS WITHDRAWS; PUSH FOR YELLEN TO LEAD FED RESERVE GATHERS STEAM.

N.Y. TIMES

With as many as five Democrats on the Senate Banking Committee ready to vote “no” on Lawrence H. Summers for the position of chairman of the Federal Reserve, the White House’s favored candidate faced long odds in winning Senate confirmation. On Sunday, Mr. Summers pulled out of contention, citing a potentially “acrimonious” battle that could harm the economy and Mr. Obama’s presidency.

In its search for a new Fed chairman, the White House had for months centered on Mr. Summers, who smarted after being passed over for the position when Mr. Obama decided four years ago to name Ben S. Bernanke to a second term as chairman. This time, with Mr. Obama determined to replace Mr. Bernanke after eight years in office, the administration considered Mr. Summers, who worked intimately with them during the financial crisis, by far the best candidate. Mr. Summers, a former Treasury secretary to President Clinton was Mr. Obama’s chief White House economic adviser through the height of the financial crisis and recession in 2009 and 2010. In those years he formed a bond with Mr. Obama and others in the White House despite a tendency toward arrogance.

But a number of Senate Democrats, rather than waiting for the nomination process to play itself out, raised concerns as soon as his name surfaced this summer: his reputation for being a divisive and abrasive colleague, his perceived role in coddling Wall Street and the lax regulation of derivatives, and complaints that he did not support smaller community banks as much as the nation’s giant financial institutions, among other issues.

The Senate Banking Committee consists of 12 Democrats and 10 Republicans. Every Democrat in the no column would have to be balanced with a yes vote from a Republican to win the support of the committee. By Mr. Merkley’s count, Mr. Summers might have needed as many as five Republican votes.




Ms. Janet Yellen, the Fed’s vice chairwoman, told friends in recent weeks that she did not expect to be nominated as the next chairman of the Federal Reserve. Although she had been the Fed’s vice chairman since 2010 and would make history as the first woman to hold the job, President Obama’s aides made clear throughout the summer that he wanted Lawrence H. Summers, his former chief economic adviser. Now, she has again become the presumptive front-runner, as she had been for much of the spring. Senate Democrats, for their part, have made their thoughts on her known. Despite lukewarm Republican support, she would almost certainly sail out of committee and clear a full Senate confirmation vote, too.

Supporters of Mr. Summers, including many of the president’s closest advisers, had raised some concerns about Ms. Yellen in recent months. Perhaps most potently, they said that institutions benefited from fresh leadership and argued that Ms. Yellen’s crucial role in creating the Fed’s current policies could inhibit her ability to make necessary changes.

Some presidential advisers also argued that Mr. Summers brought crisis management experience and a working knowledge of financial markets that Ms. Yellen lacks — although so did Ben S. Bernanke when President George W. Bush selected him as chairman.

 

Nonetheless, the president’s advisers insisted throughout the summer that Mr. Obama was not averse to Ms. Yellen but simply more comfortable with Mr. Summers. Administration officials and supporters acknowledged that the president would enrage his party’s base if he were now to reject Ms. Yellen and forfeit the chance to name the first woman to the most influential economic job in the world.She has long argued that markets benefit from regulation to prevent abuses and limit disruptions of economic growth. She also played a leading role in shaping what has become the conventional wisdom that central banks, for the sake of job growth, should seek to moderate rather than eliminate inflation.

 

Most important, she has led a committee devoted to improving the Fed’s communications with its primary audience, investors, and with the broader public, a goal she shared with Mr. Bernanke. Under Ms. Yellen, the committee built an internal consensus for changes, including Mr. Bernanke’s regular news conferences and the declaration that the Fed thinks 2 percent annual inflation is just right.

Tough Work for Obama to Win Votes for Strike Against Syria.

GREG SARGENT WASHINGTON POST

If you look at the various whip counts floating around on where the House is on the Syria resolution, it certainly looks like it could very well go down. They mostly show there are far more Members against strikes or leaning against them than have declared support for them.
But it may be premature to count out the possibility that it could still pass, for a number of key reasons.
This post will focus mostly on the state of play among House Democrats, since it’s very hard to say right now what’s going on with Republicans, because we can’t be sure how many will ultimately vote No solely to stick it to the President.
After talking to House Dem aides, here is their view of the factors that really matter right now:

Please Note: this is based on aides who want to find a way to get to Yes, so factor that into your evaluation of the below. The goal is to portray how this is viewed by them.

1) President Obama will give a national address Tuesday night. He will give interviews on Monday to the three network news anchors, as well as to anchors from PBS, CNN, and Fox, more evidence of a "full court press" strategy ahead of pivotal congressional votes on military strikes in Syria.
2) The majority of Members still have not gotten a classified briefing, sources tell me. Aides say this will change next week, on Monday, when Members are set to be briefed en masse by White House officials....

 3) The real state of play is not what it seems. Aides believe that many of those who say they are leaning No are not necessarily at that point. Aides believe there’s a lot of pressure on Dems — given the unpopularity of strikes with constituents, as reflected in the polls, and given some of the pressure being directed to offices by liberal groups — to downplay the possibility of a Yes vote later. So aides think the whip counts don’t tell the real story.

4) There are sizable blocs of Dems who can still get to yes. Dem aides believe they probably need around 120-130 Dems for the resolution to pass, because they think they’ll get around 90-100 Republicans (with most voting No). They think that they can get there. This would draw on Yes votes from 40 or so hawkish, interventionist Dems types who will be persuadable by groups like AIPAC; plus a sizable bloc of moderate Dems who aren’t too worried about the Dem base and will be genuinely gettable; plus some more votes drawn from around several dozen hard-to-classify Dems who are more focused on domestic affairs. Dem aides think they can get the numbers they need even if around 60 progressive Dems prove ungettable.

To be clear, there’s no question the White House still faces a very tough road ahead. [See below} As I noted here earlier, it’s not clear the White House will be able to successfully address the concerns of those who simply don’t accept the underlying premise of Obama’s argument. The resolution absolutely could still go down. But the view from some on the inside is that it still has a decent chance.

E.J. Dionne makes the case that a coalition of reluctant Democrats, skeptical-but-responsible Republicans, and hawkish GOP interventionists could still put a vote over the top:

Ultimately, after intricate negotiations, the balance of power among all these factions will almost certainly give the president the congressional victory he needs to take action — in part because majorities in both houses know that an Obama defeat on Syria would be devastating to American foreign policy.

Harry Reid, the Senate majority leader, and Dianne Feinstein, the chairwoman of the Senate Intelligence Committee,

GREG SARGENT WASHINGTON POST

CONSTITUENTS GIVING CONGRESS EARFUL ABOUT SYRIA: The Post details that multiple members of Congress say they are getting strong pushback from constituents who want them to oppose any strike on Syria. The key point here is that this gives Members a strong incentive to say they are currently leaning against supporting a use-of-force resolution.
What still remains to be seen is whether the White House can persuade them — perhaps with more classified briefings — that the underlying rationale for strikes is so compelling that they should buck their own constituents. It’s going to be an uphill climb, to be sure.

CHRIS CILLIZZA WASHINGTON POST

Perhaps just as important as all the phone calls from the opposition, these anecdotes all suggest that there is very little in the way of a counterbalance — i.e. people vocally urging their members to vote ‘yes.’
The takeaway message for all these members of Congress, then, is that voting “yes” will win you very few political friends, but voting “no” will alienate a whole bunch of people who are passionate, able and willing to make your phone ring off the hook. For your average risk-averse politician, that matters.
The polls make clear that taking action in Syria is not popular among really any segment of the population, but even the margins in those polls under-sell the vehemence of the opposition. And in politics, enthusiasm can mean just as much as (or more than) general sentiment.
As of now, there are very few in the House who are committed to supporting military action (24 out of 435 members). And given nearly half of the House is either against military action or skeptical, the White House needs to bring basically all of the purely undecided members on-board.

A House vote is likely the week of Sept. 16.

GREG SARGENT WASHINGTON POST  (Cont'd)

[But] For the reasons I mentioned yesterday, I continue to think it’s premature to predict certain defeat in the House for the use-of-force resolution against Syria. ABC News’s Rick Klein seems to agree, noting that a very hard sell from the White House — which you can expect will be directed at Congress — could ultimately prevail, even though right now the votes just aren’t there.
But it’s not too early to make the case that if Congress does sink the resolution, Obama should heed it. And he probably will.
Peter Baker has a must-read getting inside the thinking of the White House, which is looking at the coming Syria vote as a test of whether Congress will support any proposed use of force during the rest of his presidency. Paradoxically, this gives Obama a good reason not to act on Syria if Congress says No:

Although Mr. Obama has asserted that he has the authority to order the strike on Syria even if Congress says no, White House aides consider that almost unthinkable. As a practical matter, it would leave him more isolated than ever and seemingly in defiance of the public’s will at home. As a political matter, it would almost surely set off an effort in the House to impeach him, which even if it went nowhere could be distracting and draining.

----

If Congress does say No, and if Obama listens ...it will set in motion a very interesting experiment. The roar of Obama-is-weak punditry — casting Obama as a lame duck who can’t get Congress to do anything, with grave consequences for the rest of his agenda –  will be deafening, with few willing to point out that heeding Congress’ word is the right thing to do for the country....

GREG SARGENT WASHINGTON POST

.... Commentators will widely argue that this shows the president is a badly weakened lame duck who can’t bend Congress to his will, putting his second term agenda in further doubt.
It’s worth distinguishing between how Congress will view such an outcome and how the public might view it.

If Congress says No, and Obama announces that he will abide by the vote — arguing that the people have spoken, that democracy and the rule of law will prevail, and that our country will be stronger for it — then it’s very possible that the Dem base will rally behind him. Remember, the Progressive Change Campaign Committee and other liberal groups strongly supported Obama’s decision to go to Congress, even though they oppose his proposal to attack Syria. If Obama heeds Congress, the liberal base — and liberal lawmakers — would likely have Obama’s back. Independents, who have tilted strongly against an attack, might be supportive, too.

And so, several questions for the political science egghead types and anyone else who cares to answer. Do voters really perceive situations like these in the same terms pundits and Congressional lawmakers do, i.e., in terms of what they tell us about presidential strength or weakness? Do voters really expect presidents to bend Congress to their will, or do they see Congress as its own animal and don’t hold presidents accountable for its behavior?...



Larry Summers


OTHER NEWS FROM DC

* DEMS TO OPPOSE SUMMERS FOR FED CHAIR: The Wall Street Journal scoops that three key Dems on the Senate Banking Committee will vote No if Obama nominates Larry Summers for Fed chair: Sherrod Brown, Elizabeth Warren, and Jeff Merkley. A source familiar with Brown’s thinking confirms to me he’s a No.
Since Dems only hold a two-vote majority on the committee, that would mean Obama would need GOP support to get him to the full Senate, which, given recent history, seems unlikely — even though Fed chair picks are traditionally given wide bipartisan support. I’ve long thought a Summers pick all but guarantees Obama a big public fight with Senate Dems representing the liberal wing of the party. It’s now clear he’d get one.