A Hard 2008
By Charlie Cook
© National Journal Group Inc.
Sept. 11, 2007

When Senate Minority Leader Mitch McConnell (R) said earlier this year that his party would be fortunate to break even in the 2008 elections — holding onto 49 seats — the shock of a party leader sounding anything but optimistic was jarring.

The way this is playing out, Republicans would be very lucky to break even in the Senate next year.

But as events have unfolded over the last eight months, it would be a major accomplishment for Republicans to break even in the Senate. Things are looking uglier, and this is happening to a party that lost virtually every break in the last election.

First there are the open seats. The first retirement was that of GOP Sen. Wayne Allard in Colorado, a state that once tilted Republican but has been edging closer and closer toward Democrats. While former Rep. Bob Schaffer might be able to hold the seat for Republicans in fending off Democratic Rep. Mark Udall, the odds look worse than 50-50.

Right before Labor Day, Republican Sen. John Warner of Virginia announced he was retiring, and the conventional wisdom is that popular former Democratic Gov. Mark Warner will announce his candidacy this week.

Mark Warner would be considered an almost prohibitive favorite over another former governor, Republican Jim Gilmore, who left the job somewhat inauspiciously. A much more competitive race could be waged by GOP Rep. Tom Davis, who could cut into growing Democratic margins in Northern Virginia and the Tidewater region.

A possible GOP fight over whether to have a convention or a primary (a decision the state party makes) and then another fight between Davis and Gilmore would waste time and resources in a state that has become more mid-Atlantic than Southern.

The state GOP will have to choose between their hearts (Gilmore) or their heads (Davis), and the answer is far from clear.

Now comes the most recent GOP retirement -- Nebraska Sen. Chuck Hagel. Jon Bruning, the state's Republican attorney general, entered the race long before Hagel's Monday announcement, and the GOP field is likely to grow.

The $64,000 question is whether former Democratic Sen. Bob Kerrey runs. Kerrey, president of the New School in New York City, conducted a poll several months ago and is said to be undecided but seriously looking at the race. Kerrey would be the best shot for Democrats, but there are other reputable potential contenders, including Omaha Mayor Mike Fahey, waiting in the wings should Kerrey decline to enter the fray.

Putting aside the mess involving GOP Sen. Larry Craig in Idaho, where Republicans can be expected to end up with a reasonably strong appointed incumbent, no other retirements are expected. But at least four incumbents either have or are very likely to have significant opposition and that number could rise to a half-dozen or more.

In New Hampshire, former Democratic Gov. Jeanne Shaheen is expected to challenge GOP Sen. John Sununu, and the state has been turning further from Republicans. In 2006, Democrats won both congressional seats and held the governorship.

Next door in Maine, Democratic Rep. Tom Allen, who holds one of the two House seats in that state, is challenging GOP Sen. Susan Collins, another top Democratic target. While Collins doesn't seem quite as vulnerable as Sununu, it is still a real problem for the GOP.

Then there is GOP Sen. Norm Coleman in Minnesota.

While he is widely considered vulnerable, a huge question mark hangs over whether the Democrats will field a strong challenger.

Competing for the Democratic nomination are wealthy trial lawyer Mike Ciresi, who lost the Democratic Senate nomination to former Sen. Mark Dayton in 2000, and former Air America radio host and comedian Al Franken, who has put together a professional effort and is raising significant money but enters the race with high negatives. There is little doubt that a strong Democrat can beat Coleman, but the question is whether the party will nominate one.

Finally there is Oregon GOP Sen. Gordon Smith, who is facing a challenge from state House Speaker Jeff Merkley. Whether this ends up a top- or second-tier race is unclear. Oregon is a problematic state for the GOP, but Smith runs smart and solid campaigns.

Then there are the two question marks: Will legal or political problems trip up Alaska GOP Sen. Ted Stevens or New Mexico GOP Sen. Pete Domenici, who are 84 and 75 years old, respectively?

Stevens is under scrutiny by the FBI as part of an investigation into influence buying in the state. For Domenici, questions have been raised about the propriety of a phone call from him to a U.S. attorney over the status of an investigation of Democratic political figures, and whether Domenici had anything to do with that U.S. attorney being subsequently sacked.

New Mexico looks tougher for Republicans, and now that they are in the minority in the Senate, Domenici doesn't have the clout he wielded just a year ago.

Taken together, that is nine potential problems for Republicans, compared to possibly two for Democrats: Sens. Mary Landrieu in Louisiana and Tim Johnson in South Dakota.

It appears that McConnell was right. The way this is playing out, Republicans would be very lucky to break even in the Senate next year.

-- Charlie Cook is a NationalJournal.com contributing editor, weekly columnist for National Journal magazine and the founder and publisher of the Cook Political Report. This column also runs in CongressDailyAM when Congress is in session. His e-mail address is cookreport@nationaljournal.com.

Reprinted with permission from National Journal, Sept. 11, 2007.

Copyright 2007 by National Journal Group, Inc. All rights reserved.

NAHB Efforts to Address Mortgage Credit Crunch

MEMORANDUM

DATE:            September 21, 2007
TO:                 NAHB Executive Board
                       State and Local Executive Officers
FROM:           Brian Catalde, 2007 NAHB President

RE:                 NAHB Efforts to Address Mortgage Credit Crunch

At our recent Fall Board of Directors meeting in Seattle, the mortgage credit crunch issue was front and center. Our board adopted comprehensive policy calling on the Federal Reserve Board, the Administration, Congress and federal regulators to take prompt action to calm and stabilize financial markets, to inject liquidity into the nation's mortgage markets and to develop solutions to the subprime and foreclosure problems without restricting credit to the broader housing market.

At the board meeting, I outlined a three-pronged strategy for NAHB to pursue on the legislative, regulatory and public affairs front. I am pleased to report that less than two weeks after we left Seattle, we have seen important progress in all these areas as Washington policymakers have responded to our concerns. The Federal Reserve Board has cut interest rates, some needed reforms are moving through Congress and federal regulators are providing Fannie Mae and Freddie Mac more flexibility to address the subprime crisis. I want to emphasize upfront that these developments are an important first step in our battle, and that your association will continue to work tirelessly until the housing market turns around.

Regulatory Action — Fed Cuts Rates

On the regulatory front, the Federal Reserve announced on Sept. 18 that it was cutting its federal funds and discount rate by one-half of a percentage point. This action sends a strong signal to financial markets and consumers that the Fed intends to keep the economy moving forward, which will help stabilize the housing market. By lowering borrowing costs, the Fed action should help ease the credit crunch in mortgage markets and potentially forestall foreclosures on loans that are scheduled to reset in the near future, thereby preventing homes from going back on the market at a reduced price. Still, it will take about six months for the full effects of the rate cuts to be felt by consumers.

In the weeks leading up to the Fed announcement, NAHB's Economics team provided the Fed with regular updates on the health of the housing sector and the need to act decisively to bolster housing and the economy. As many of you heard in Seattle, I led a delegation of a cross-section of builders who met with Fed Chairman Ben Bernanke on Sept. 5 to discuss the state of the nation's housing industry. Bernanke heard first-hand accounts of how the sharp housing slowdown was affecting our members and their local economies and why bold action was needed to restore liquidity at the short end of the financial markets.

The data provided by NAHB and the face-to-face meeting with Bernanke were no doubt a factor in the Fed's decision-making process to move aggressively to cut short-term rates by one-half of a percentage point. As The Washington Post noted in its front page headline: "Fed Cuts Key Rate More Than Expected."

The Fed assuredly has heard our message, and Chairman Bernanke has reinforced this personally through his public statements to the Congress yesterday -- and through the earlier statement by the Fed's Federal Open Market Committee – that the "tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally."

OFHEO Takes a Modest Step

Also on the regulatory front, the Office of Federal Housing Enterprise Oversight (OFHEO) announced on Sept. 19 that it will allow both Fannie Mae and Freddie Mac to raise their portfolio limits by two percent annually so that they can invest more than $20 billion  in subprime mortgages. Though this is a positive step forward, it falls short of what we asked for and what we believe is needed. NAHB has been pushing – and continues to push -- for OFHEO to allow both Fannie and Freddie to raise their portfolio cap by 10 percent to buy more subprime loans, to help keep borrowers from foreclosure and to keep mortgage money flowing. Last month, NAHB and other industry groups sent a letter to OFHEO seeking this change, and NAHB CEO Jerry Howard met with OFHEO Director James Lockhart to discuss this issue in early September.

Jerry and I also met this month with the CEOs of Fannie Mae and Freddie Mac and delivered a blunt message. We called upon them to bring all of their resources to bear on bringing more liquidity to the mortgage markets and helping to relieve the credit crunch on a sustained basis for the duration of the crisis.  We are keeping the pressure on here with ongoing communications into both Mudd and Syron  and leadership meetings planned to take place in the coming weeks.

Legislative Front — A Good Week in Congress

 Good news also came out of Congress this week. By a strong bipartisan margin of 348 to 72, the House-approved FHA reform bill H.R. 1852, the Expanding American Homeownership Act  of 2007. This legislation is an important step forward to address problems in the subprime mortgage market and to help creditworthy borrowers obtain home loans at prices and terms they can afford. Of note, lawmakers approved an NAHB-supported amendment offered by Reps. Barney Frank (D-Mass.), Gary Miller (R-Calif.) and Dennis Cardoza (D-Calif.) that would enable more creditworthy borrowers to purchase an FHA-insured home in many high-cost metropolitan markets.

A companion  FHA reform bill was approved by the Senate Banking Committee on Sept. 19, where the real challenge is to move this legislation quickly. We will be pushing hard to get this bill to the Senate floor as soon as possible.

The House Ways and Means Committee is also considering a change to the tax laws to eliminate any tax penalties home owners might face when banks renegotiate the terms of a home loan and forgive a portion of the outstanding mortgage. This legislation is one of the policy provisions approved at our board meeting in Seattle, and we will continue to urge lawmakers to promptly move this bill forward in both the House and the Senate.

Finally, NAHB placed ads in Roll Call and the National Journal weekly news magazines calling on Congress to do its part in easing the credit crunch by enacting FHA and GSE reform and adopting the tax law changes mentioned above.

Public Affairs Blankets the Media

In order to make progress, it is important that we get our message out not only to Washington policymakers, but also to members of the media. NAHB's Public Affairs staff has been busy sounding the drumbeat and making sure that our association stands out as the "voice of the housing industry" on this issue. With the Fed's rate cut announcement coming within an hour of NAHB's Housing Market Index (HMI) release (which showed builder confidence at its lowest point ever), Public Affairs was able to leverage coverage of the Fed rate cut stories to include not only NAHB's opinions on the central bank's move, but also how it tied to housing and our HMI index.

In the past three days alone, NAHB has appeared or been quoted in more than 50 major print, broadcast and wire outlets across the country. These include USA Today, the Wall Street Journal, The Washington Post, Associated Press, Reuters, Dow Jones, The Seattle Times, the Dallas Morning News, the Atlanta-Journal Constitution, San Francisco Chronicle, St. Louis Post-Dispatch and the Philadelphia Inquirer. Additionally, NAHB CEO Jerry Howard did an interview with CNBC and BBC America's The World Tonight on our view of the Fed rate cut, and NAHB Public Affairs Committee Chairman Andrew Chaban was interviewed by Bloomberg regarding what builders are seeing on the ground. Television coverage included eight national segments on Bloomberg, CNN and CNBC. 

Shortly, you will be receiving a detailed set of talking points and other background materials that Public Affairs and Economics are preparing to help get our message out to the media on the mortgage credit crunch issue and why now is a good time to buy a home. The talking points will also be tailored to address different regional conditions. 

Finally, I want to stress that while these are important steps forward, we have a long way to go. My fellow Senior Officers and the entire staff at NAHB understand that there is no easy, quick fix to this crisis. We are all in this for the long haul, and pledge to do all in our power to help get housing moving forward again.

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Strong Participation Needed to Win in This Challenging Political Environment

BUILD-PAC’s overall goal for the 2007 to 2008 election cycle is to raise $5 million in voluntary contributions.  In order to be successful and reach its goal, BUILD-PAC can no longer rely on the same 2% of NAHB members who contribute each year.  BUILD-PAC needs the support and commitment of all NAHB members in order to convey NAHB’s message to Capitol Hill.

While contributions are appreciated by candidates and Members of Congress, the perception we give them is that 98% of NAHB members simply do not care enough to be involved in the political environment.  Thus, increased member participation is BUILD-PAC’s top priority in this election cycle and this can only be accomplished by peer-to-peer fundraising.

Peer-to-peer contacts are typically accomplished in face-to-face settings on an individual basis and in small group meetings.  Individual contacts are capable of producing a 60% to 80% positive response.  These individual or small group meetings allow not only for an opportunity to increase PAC funds but also provide an opportunity to educate fellow members on BUILD-PAC’s efforts to elect pro-housing candidates to Congress.

NAHB Senior Officers and BUILD-PAC Officers understand the importance of this program and completed training in August prior to the launch of the pilot program in six states.  Shortly after the Fall Board of Directors Meeting several enthusiastic NAHB members and Executive Officers from California, Connecticut, Florida, Illinois, Pennsylvania and Tennessee were selected to participate in the pilot BUILD-PAC Champions training session in Washington, D.C.  The Champions had the opportunity to meet with Congressman Adam Putnam (R-FL), who spoke to members about the value of PACs and the importance of political involvement.  These members will continue the program back in their homes states through October 31.    [return to top]

Multifamily Leadership Achieves New Level of Success

BUILD-PAC would like to recognize the Multifamily Council for its recent success.  The entire Multifamily Council Board of Trustees has committed to contribute to BUILD-PAC in the 2007 to 2008 election cycle.  This demonstration of unity and commitment from Multifamily Council leadership is exactly what BUILD-PAC needs to reach its 2008 cycle goal of $5 million.  The Multifamily Council recognizes the importance of BUILD-PAC and its role in fighting for NAHB legislative success on Capitol Hill. Thank you again to all those who have committed to participate.[return to top]

BUILD-PAC Across The Country

The summer months were very busy for BUILD-PAC.  Several states hosted BUILD-PAC fundraisers across the country!  These events ranged from receptions with Congressmen to several golf tournaments.  State events are crucial to not only reaching the PAC goals but also increasing NAHB member participation.  These events provide a great forum to educate other NAHB members on the importance of BUILD-PAC.  If your state has yet to plan an event, please contact BUILD-PAC staff and get more information today!

Thank you to the tremendous fundraising efforts made in each state this summer.  The following states recently hosted BUILD-PAC fundraisers:

• Connecticut - Golf Reception
• Georgia - Golf Reception
• Kansas - Golf Reception
• Michigan - Reception with Congressman Thaddeus McCotter
• Nebraska - Golf Reception
• Oklahoma - Golf Reception
• Oregon - Golf Reception
• Vermont - Cocktail Hour
• Vermont - Golf Tournament

The following states have BUILD-PAC fundraising events scheduled for this fall:

• Alaska - Gold Key Reception
• Colorado – Dinner Reception with Senate Candidate
• Nevada – New Contributor Campaign
• Virginia – Golf Reception

Do you want to host a BUILD-PAC event in your state? Find out how easy it is and receive help from BUILD-PAC staff!

• BUILD-PAC staff can help with the “nuts and bolts” of putting your event together
• BUILD-PAC can reimburse you for some costs incurred
• BUILD-PAC staff can provide a list of past and current contributors
• BUILD-PAC can provide prizes and give-a-ways
• BUILD-PAC Officers will travel to your event
• BUILD-PAC staff will travel to event
• Contact BUILD-PAC staff today Rachel Sullivan 800-368-5242 ext 8289 or rsullivan@nahb.com  or Betsy Savage 800-368-5245 ext 8510 or esavage@nahb.com

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Contributor Club Members Enjoy Seattle’s Best

Gold Key Club Chair Mike McGowan and fellow Gold Key Members enjoyed a lively reception filled with dinner and dancing at the Experience Music Project Museum at the 2007 Fall Board of Directors Meeting in Seattle, Washington. Members were given free reign over much of the interactive museum,  trying various musical instruments and viewing costumes from famous movies, such as Star Wars and Batman.  2007 BUILD-PAC Chairman, Charlie Kasko, thanked the Gold Key members in attendance and stressed the importance of BUILD-PAC being the voice of the housing industry on Capitol Hill. 

The 2007 Capitol Club Fall Board dinner celebrated the induction of five new Capitol Club members since the Spring Board of Directors’ meeting. Capitol Club members enjoyed a variety of wines from across the state of Washington while 2007 BUILD-PAC Chairman Charlie Kasko and 2007 Capitol Club Chair Barbie Wickman-Byrd expressed the importance of continuing to support BUILD-PAC and its efforts to enact pro-housing legislation on Capitol Hill.  During this time of uncertainty, the commitment of Capitol Club members is making even more of an impact on the housing industry than ever before.  Thank you for your dedication to BUILD-PAC.  [return to top]

Thank You New Contributor Club Members!

BUILD-PAC is excited to announce the new contributors club members since the June BUILD-PAConnection.  Thank you for your outstanding commitment to BUILD-PAC! 

 New Capitol Club Members ($5,000 Annually)

• Sherwood R. Bailey, Miss.
• Norman Barber, Ga.
• Harry Basham, Mont.
• Steve Bunce, D.C.
• Russell Burton, Colo.
• Taylor Burton, Ala.
• Kimberly R. Chambers, Mont.
• John C. Conchenour, Wash.
• Lynn Corder, Ala
• Lex Costas, S.C.
• David Covill, Mont.
• KC Cox, Texas
• Fred Dallenbach, Ky.
• Scott Davis, Mont.
• Willie Delfs, Iowa
• Tony Denorfia, Conn.
• Charlie Gant, Miss.
• Nick Geranois, Mont.
• Eugene Graf IV, Mont.
• Don Halle, Miss.
• Jerry Hattox, N.M.
• Linda Hebert, Calif.
• Stan Helgeson, Mont.
• M Gary Henley, Texas
• George Hess III, Colo.
• Larry Higgins, Kan.
• Ron Hill, Mont.
• Kevin Holland, Texas
• Doug Hollyhand, Ala.
• John Hubbard, Texas
• Mike Jarrett, Mont.
• Wes Keller, Alaska
• Thomas Kenney, Md.
• Don Klausmeyer, Kan.
• Ken Krajsa, N.D.
• Tammy Lynch, Fla.
• Michael McCalvy, Minn.
• CJ Mead, N.M.
• Jeff Metke, Ore.
• J Martin Milstead, Miss.
• Randy Neary, Idaho
• Wayne Nelson, Mont.
• Steve Noble, Minn.
• Tom O’Connor Sr., Wash.
• Meredith Oliver, Fla.
• Angela O’Neil, Ala.
• Jeffery Orleans, Pa.
• Kenneth Ormand, S.C.
• Robert Parrish, Fla.
• Dennis Pawlak, Wis.
• Janet Pereira, Mo.
• Terry Pope, N.C.
• Ashley Richards Jr., Maine
• Tim Rosencrans, N.D.
• Eric Roset, Mont.
• Greg Schaffer, Wis.
• Criag Schoenfeld, Iowa
• Jeremy Shea, Mont.
• Robert Simmons, Va.
• Fred Sleight, Idaho
• Greg Smith, Miss.
• Monica Sommerfeldt Lewis, Wis.
• Dave Sproul, Kan.
• Edward P. Taczanowsky, Ariz.
• Tim Thorton, Ga.
• Greg Tomlinson, Texas
• Mark Ulrich, Utah
• Manny Valencia, Idaho
• Adrian Vaughn, Mont.
• Elizabeth Verna, Conn.
• Kirk Wickline, Texas
• Shawn Woods, Mo.
• Jim Yurina, Wash.

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Who We Support

If you would like to view candidates who BUILD-PAC has supported in the 2007-2008 election cycle go to www.nahb.org/buildpac.  You will need to log on to the NAHB Web site.

For more information on BUILD-PAC's disbursements, contact BUILD-PAC Communications Manager, Meghan Everngam at (800) 368-5242, ext. 8259 or meverngam@nahb.com.

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Get to Know the BUILD-PAC Staff

Denise Mills Oorbeek
Staff Vice President, BUILD-PAC
(W) 202-266-8459
(F) 866-314-4602
E-mail:  doorbeek@nahb.com

Erika Park
Director of Fundraising and Compliance, BUILD-PAC
(W) 202-266-8514
(F) 866-314-4602
E-mail:  epark@nahb.com

Rachel Sullivan
Fundraising Manager, BUILD-PAC
(W) 202-266-8289
(F) 866-314-4602
E-mail:  rsullivan@nahb.com
Main Staff Contact for Capitol Club and Platinum Club

Elizabeth “Betsy” Savage
Fundraising Manager, BUILD-PAC
(W) 202-266-8510
(F) 866-314-4602
E-mail:  esavage@nahb.com
Main Staff Contact for Gold Key Club

Cara Mason
Membership Fundraising Manager, BUILD-PAC
(W) 202-266-8486
(F) 866-314-4602
E-mail:  cmmason@nahb.com
Main Staff Contact for Council Fundraising and Associate Membership

Meghan Everngam
Communications Manager, BUILD-PAC
(W) 202-266-8259
(F) 866-314-4602
E-mail:  meverngam@nahb.com

Bridget Driggs
Staff Assistant, BUILD-PAC
(W) 202-266-8114
(F) 866-314-4602
E-mail:  bdriggs@nahb.com[return to top]

CONTRIBUTE ONLINE TODAY!

If you would like to make your BUILD-PAC contribution online, go to www.nahb.org/buildpac.  You will need to log on to the NAHB Web site.

Thank you.[return to top]