Ten Political Flash Points for 2011

The Debt Ceiling and a Government Shutdown

Federal spending continues to outpace government revenue by more than a trillion dollars a year.

Today the legal debt ceiling is $14 trillion, which is expected to be exceeded in the first half of 2011. House Republicans vow to repeal the “Gephardt Rule” that allows the House to raise the debt limit automatically without a specific vote of approval. If the Republicans prevail, there will be an up-and-down vote on raising the debt ceiling. The run-up to the vote is likely to intensify negotiations with the White House to use the debt ceiling as leverage to compel lower federal spending. If the debt ceiling is not passed, government programs will lack funds to operate.

Medicare, Social Security, even our military could be at a standstill. Obama and the Democrats will dare the Republicans to vote down the debt ceiling. It will be instructive to see who blinks first.

Ron Paul Challenges the Federal Reserve

Outspoken libertarian Rep. Ron Paul (R-TX), a long-time critic of the Federal Reserve Board, will become the new chairman of the House Subcommittee of Domestic Monetary Policy -- which has congressional oversight of the Fed. Paul plans to challenge the central bank’s policy of secrecy by holding open hearings on the institution and its policies. He also will investigate the Fed’s bank examinations and its use of its emergency authority and audits. The new chairman also is expected to denounce the current Fed policy of “monetary easing,” which Paul worries will lead to hyper-inflation -- a concern expressed by many economists.

Transparency in Government

Secrecy in the executive branch has been a bipartisan sport ever since the growth of big government. Expect a House full-frontal attack on government secrecy and on the Obama administration's lack of transparency.

The president is vulnerable, as his first official presidential act was to issue an executive order promising an “unprecedented level of openness in government.”

Expect dramatic oversight hearings, particularly from the powerful House Committee on Oversight and Government Reform led by Rep. Darrell Issa (R-CA). Issa and his allies are expected to seek new measures to force transparency in governmental actions and decision-making. Look for numerous House subpoenas of Obama administration records and the convening of many oversight hearings.

Bailouts of Bankrupt Democratic States

California’s soon-to-be Governor Jerry Brown has not spelled out exactly how he intends to bail out California from its record $28 billion budget gap. But he may ask President Obama to bail out the state, a plea once issued by his predecessor Arnold Schwarzenegger. Other Democrat state governors from electorally rich New York and Illinois will be watching to see if they too can appeal to Washington for cash.

Expect the Republican House and vulnerable deficit hawk Democrats to reject any bailout of the states.  Expect big state employee unions to lobby for it. And look to see it become a major issue in the 2012 presidential race.

More Scrutiny of Attorney General Holder

Expect the new House Judiciary Committee Chairman Lamar Smith to aggressively subpoena the Department of Justice for internal documents on many of the controversial policies pursued by Attorney General Eric Holder. Holder perhaps is the weakest Obama administration member, and may be the first to resign.

He has come under fire from the left and right for his anti-terror policies. These include his hiring of attorneys who once defended terrorists, his inability to close Guantanamo Bay, the loss of his first anti-terror trial in New York, and his decision to try September 11 mastermind Khalid Sheikh Mohammed in a civilian court. The House and Senate also are expected to continue their probes into the Justice Department’s dismissal of the 2008 voting rights violations by the New Black Panther Party. Late this year the U.S. Civil Rights Commission released a blistering report on the department’s handling of the case, charging Holder with politicizing its civil rights deliberations. The Department’s inspector general also is expected to release a report about whether political considerations led to the dismissal. Central to the case is whether the Obama Justice Department was treating civil rights cases in racially biased ways, favoring minorities over whites. If Holder resigns, expect Republicans to use confirmation hearings as a forum to further probe the Department's controversial decisions.

Expect a wild year.