Will Sarah Palin run for president as Tea Party candidate? (The Christian Science Monitor)

Washington – Sarah Palin may or may not be inching closer to an actual presidential run.

But watching her appearances in Iowa and New Hampshire over the long weekend, Decoder was reminded of how savvy her political instincts can be. Palin’s attacks on “crony capitalism” and the “permanent political class” may sound like just another set of talking points, but they tap directly into a very real vein of frustration among voters with the political system as a whole - a frustration that could create an opening for an unconventional, possibly even a third party, candidate.

It got us wondering: What if Palin decided to buck ties to the GOP and run as a Tea Party candidate instead?

Palin herself opened the door to just such a possibility back in June, when she told conservative TV host Sean Hannity that although a year ago she would never have even considered it, “conditions have changed in this last year.”

And it might not be so crazy. Current polling shows levels of approval for both parties at historic lows. The new NBC/Wall Street Journal poll out this morning found that 54 percent of voters want to throw out every member of Congress. And while the tea party is much more closely aligned with Republicans than Democrats, the original movement was first fueled by anger toward President George W. Bush.

More broadly, the notion that this campaign is unfolding amid a unique set of challenges that could give rise to a legitimate third-party bid is generating steam from a variety of quarters.

The group Americans Elect is working to get space on presidential ballots in all 50 states ahead of a national nominating convention for an independent ticket to be held on the Internet next summer.

And while the group has its work cut out for it, it has drawn support from media types like New York Times columnist Thomas Friedman, who wrote in a recent column that the nation’s current set of challenges calls for a

a€?new, hybrid politics that mixes spending cuts, tax increases, tax reform, and investments in infrastructure, education, research and production. But that mix is not the agenda of either party. Either our two parties find a way to collaborate in the center around this new hybrid politics, or a third party is going to emergea€|a€

The desire among voters to do something dramatic, something that would turn the entire system on its head, is clearly out there. The question is, which candidate (or potential candidate) is best poised to capitalize on it?

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Read Martin Peretz’s piece in The New Republic about why third-party candidacies don’t work.

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Tea party takes its turn in debt battle (AP)

WASHINGTON – The White House weighed in with a veto threat Monday against a tea party-backed plan to let the government borrow another $2.4 trillion, a measure conditioned on big and immediate spending cuts and adoption by Congress of a constitutional amendment to balance the federal budget.

At the same time, President Barack Obama said the two sides are "making progress" after a series of back-channel conversations with Republicans like House Speaker John Boehner of Ohio and Majority Leader Eric Cantor of Virginia, with whom Obama met on Sunday morning.

Boehner called the veto threat "unfortunate," and in a statement Monday said Obama's threat "should make clear that the issue is not congressional inaction, but rather the President's unwillingness to cut spending and restrain the future growth of our government."

"If we are going to raise the debt limit and avoid default, the White House must be willing to demonstrate more courage than we have seen to date," Boehner said.

A Boehner aide said the "cut, cap and balance" plan is still "the best path forward" and declined to characterize the hush-hush talks with Obama. Another spokesman, Brendan Buck, said "there is nothing to report in terms of an agreement or progress."

The House set to pass the plan on Tuesday but it's sure to stall in the Senate, where majority Democrats say it would lead to decimating budget cuts and make it harder to pass tax increases on the wealthy. The White House weighed in Monday, calling the bill an "empty political statement" that President Barack Obama would veto.

And even if the scheme could pass, there's no way Congress will adopt a balanced budget amendment, which requires a two-thirds vote in both House and Senate.

Tea party lawmakers are insisting on the effort to try to put their stamp on the debate over the so-called debt limit, and GOP leaders — lacking other ideas that might win a majority in the Republican dominated House — were quick to give their OK at a spirited closed-door meeting on Friday.

Major rating agencies such as Moody's and Standard and Poor's have signaled they're poised to lower the nation's coveted Triple-A credit ratings if no agreement is reached on the nation's debt.

On Monday, Moody's issued a report suggesting that the U.S. could eliminate the threat to its credit rating by removing the legal limit on the debt.

Tuesday's House vote on the cut, cap and balance plan comes after more than a week of White House talks with congressional leaders failed to produce a breakthrough. The tally will be held exactly two weeks before an Aug. 2 deadline to avoid a potentially devastating default on U.S. obligations like payments to bondholders and senior citizens receiving Social Security.

The plan doesn't actually include any spending cuts; rather, it endorses a spending cap on agency operating budgets for next year that the House is already working toward. The new plan promises to cut $35 billion more from so-called mandatory programs like farm subsidies, food stamps and Medicaid, the health program for the poor and disabled, but doesn't say where they would fall.

In a statement, the White House warned that such an approach could force significant cuts in education, research, Medicare and Social Security, and "put at risk the retirement security for tens of millions of Americans."

After the House exercise and a failed Senate vote on a balanced budget amendment to the Constitution, Plan B appears to be to have the Senate vote to give Obama sweeping power to order increases in the debt limit totaling $2.5 trillion over the coming year without approval by lawmakers.

The hope appears to be that after trying it their way, enough House Republicans will be able to stomach the emerging Senate plan to allow it to pass, though it's plain there will have to be plenty of Democrats voting for it as well to make up for dozens of unyielding lawmakers unwilling to abandon their tea party promises.

For their part, Senate Republicans are demanding a vote this week on a balanced budget constitutional amendment, though they have zero chance of winning the required 67 votes in a chamber where they control just 47.

Public opinion polls show that voters like the idea of a balanced budget, but the government faces such massive budget gaps — it now borrows more than 40 cents of every dollar it spends — that the cuts required to eliminate the deficit were too draconian for even the GOP-dominated House to endorse balancing the budget anytime soon. The House Republican budget still leaves deficits in the $400 billion range after 10 years.

The immediate issue is allowing the government to continue to borrow from investors and foreign countries like China to pay its bills — which include a $23 billion batch of Social Security payments set to go

The report Moody's issued Monday said the need for the U.S. to raise its debt limit by enacting legislation creates the possibility of default that wouldn't exist otherwise. Removing the legal limit on the debt would eliminate the risk that threatens the government's credit rating, the report said. "We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty," said the Moody's report.

With the deadline just over two weeks away and with a recent round of White House talks failing to generate a breakthrough, Sen. Mitch McConnell, R-Ky., the cagey leader of his party in the Senate, has proposed a plan that would allow Obama to automatically win a large enough increase in the debt to keep the government afloat until 2013 unless both House and Senate override him by veto-proof margins.

McConnell's plan has political advantages but has come under assault from many conservatives eager to take advantage of the current opportunity to use the need to lift the debt ceiling to force deficit cuts now. But Republicans refuse to consider any tax revenue increases demanded by Obama and Democrats to balance any budget package, and Democrats won't go along with significant cuts to benefits programs like Medicare and Medicaid unless tax increases on the wealthy are a part of the package.

That leaves lawmakers well short of the $2 trillion-plus in deficit cuts required to offset a debt increase that's big enough to solve the problem through next year's elections.

Majority Leader Harry Reid, D-Nev. wants to add a plan to create yet another deficit panel, comprised entirely of lawmakers and evenly divided between the two parties, that would try to break the deadlock by the end of the year.

It's also expected that a package of spending cuts, perhaps in the $1.5 trillion range over the coming decade, would be attached to the McConnell-Reid measure, perhaps in the House.

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Associated Press writers Erica Werner and Ben Feller contributed to this story.

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Mexico's former ruling party set to win state votes (Reuters)

ECATEPEC, Mexico (Reuters) – Mexicans voted for new governors in three states on Sunday in races slated to be big wins for the main opposition party and a blow to President Felipe Calderon ahead of next year's presidential election.

The key ballot is in the populous State of Mexico, where the vote is seen as a popularity test for the outgoing governor, Enrique Pena Nieto, an early favorite to win back the presidency for the Institutional Revolutionary Party, or PRI.

The PRI hopes the telegenic Pena Nieto, 44, will be a fresh face for the party whose 70-year rule was dogged by accusations of vote-rigging and corruption before losing power in 2000.

Pena Nieto backs the PRI's gubernatorial candidate, Eruviel Avila, the popular former mayor of the state's largest municipality Ecatepec, where voters turned out despite heavy rains from Tropical Storm Arlene that flooded neighborhoods and closed down streets.

Polls show Avila far ahead of the candidates running for Calderon's conservative National Action Party, or PAN, and the leftist Party of the Democratic Revolution, PRD.

"The PAN or the PRD has never come here to help, Eruviel is the only one who has been giving us a hand," 58-year-old housewife Maricarmen Trejo said as she headed to the polls.

The PRI never lost power in the State of Mexico, a bastion of old-style machine politics where opponents accuse the government of using public funds to sway voters.

Opinion polls show the PRI also likely to sweep gubernatorial races in the states of Coahuila and Nayarit, further bolstering its platform for a comeback after a decade on the sidelines during two consecutive PAN governments.

Both states have seen a dramatic rise in drug killings over the past year, a critical liability for Calderon who has staked his term on fighting powerful cartels since taking office in late 2006. With drug violence surging over the past four years -- more than 40,000 deaths to date -- some voters are fed up.

"The violence is always getting closer, you see it touching your family, your neighbors," Israel Segura, 33, a vendor in Ecatepec said.

DRUG MONEY IN CAMPAIGNS

National protests over the past few weeks, led by a crusading poet whose son was killed by drug gangs, has turned up the pressure on Calderon to respond to victims complaints. Security for the first time is overtaking the economy as voters' top concern.

Worries about drug cartels backing candidates are swirling as the country gears up for the 2012 election.

In a rare admission by a politician, former PAN cabinet member Xochitl Galvez told the El Universal daily that she had been offered large sums of money by a cartel while running for governor of the central state of Hidalgo last year.

She did not win the race and said she refused the cash offer but did not say anything at the time out of fear.

"The offer was very clear," Galvez told the newspaper.

A messenger from the drug cartel said, "'I have instructions to give you 50 million pesos ($4.3 million), you are several points down with only a few weeks until the elections. With that money you can pay off all the leaders (so they support you.)'"

Hidalgo is also set to elect 84 new mayors on Sunday.

(Additional reporting by Mica Rosenberg; Writing by Mica Rosenberg; Editing by Paul Simao)

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Thaksin party wins Thai election by a landslide (Reuters)

BANGKOK (Reuters) – Thailand's opposition won a landslide election victory on Sunday, led by the sister of former Thai prime minister Thaksin Shinawatra in a triumph for red-shirt protesters who clashed with the army last year.

Exit polls showed Yingluck Shinawatra's Puea Thai (For Thais) party winning a clear majority of parliament's 500 seats, paving the way for the 44-year-old business executive to become Thailand's first woman prime minister.

"I'll do my best and will not disappoint you," she told supporters after receiving a call of congratulations from her billionaire brother, who was ousted in a 2006 coup and lives in Dubai to avoid jail for graft charges that he says were politically motivated.

"He told me that there is still much hard work ahead of us," she told reporters.

With nearly all votes counted, Yingluck's party won a projected 261 seats with Prime Minister Abhisit Vejjajiva's Democrat Party taking 162, according to the Election Commission.

Abhisit conceded defeat. "I would like to congratulate the Puea Thai Party for the right to form a government," he said.

Exit polls by Bangkok's Suan Dusit University showed Puea Thai doing even better, winning 313 seats compared to just 152 for the Democrats, dismal enough to threaten Abhisit's job as party leader.

Yingluck's supporters were jubilant, erupting in roars and cheers as television broadcast the exit polls.

"Number one Yingluck," some shouted. "Prime Minister Yingluck" screamed others, as party members slapped each other on the back.

"Yingluck has helped us and now Puea Thai can solve our problems and they'll solve the country's problems," said Saiksa Chankerd, a 40-year-old government worker.

The results were a rebuke of the traditional establishment of generals, old-money families and royal advisers in Bangkok who loathed Thaksin and backed Abhisit, an Oxford-trained economist who struggled to find a common touch.

"People wanted change and they got it," said Kongkiat Opaswongkarn, chief executive of Asia Plus Securities in Bangkok. "It tells you that a majority of people still want most of the things that the ex-prime minister had done for the country in the past."

The size of Puea Thai's victory could usher in much-needed political stability after six years of sporadic unrest that featured the occupation of Bangkok's two airports, a blockade of parliament, an assassination attempt and protests last year that descended into chaotic clashes with the army.

"Chances of blocking Puea Thai in the near term are severely limited," said Roberto Herrera-Lim, Southeast Asian analyst at political risk consultancy Eurasia Group. "The instability everyone has been worried about now looks less likely. The military will have to be pragmatic now."

RED SHIRT VILLAGES

Yingluck was feted like a rock-star by the red shirts who designated entire communities in Thailand's rugged, vote-rich northeast plateau as "red shirt villages" to help mobilize supporters, each festooned with red flags and Thaksin posters.

"This win is very important because it will determine Thailand's destiny," said Kwanchai Praipana, a red-shirt leader in Udon Thani province, where the movement had set up hundreds of red villages in recent weeks.

The red shirts accuse the rich, the establishment and top military brass of breaking laws with impunity -- grievances that have simmered since the 2006 coup -- and have clamored for Thaksin's return.

Thaksin said he would "wait for the right moment" to come home. "If my return is going to cause problems, then I will not do it yet. I should be a solution, not a problem," he told reporters in Dubai.

Thaksin, a former telecommunications tycoon, scored landslide election wins in 2001 and 2005 and remains idolized by the poor as the first politician to address the needs of millions living beyond Bangkok's bright lights.

Yingluck electrified his supporters, ran a disciplined campaign and promised Thaksin-style populist policies, including a big rise in the national minimum wage and free tablet PCs for nearly one million school children.

Abhisit had warned of instability if Yingluck won, blaming the red shirts for unrest last year in which 91 people, mostly civilians, were killed. They cast Thaksin as a crony capitalist, fugitive and terrorist who condones mob rule.

But Abhisit's denial that troops were responsible for a single death or injury last year was mocked even in the Democrat stronghold of Bangkok. A web-savvy generation could, with a few mouse-clicks, watch videos on Youtube showing military snipers firing on civilians, eroding his credibility.

Abhisit's backers want Thaksin to serve a two-year prison term. They dismiss Yingluck as a simple proxy for her brother.

Throughout the six-week campaign, the two sides presented similar populist campaigns of subsidies for the poor, improved healthcare benefits and infrastructure investment including high-speed rail systems across the country -- a style of policymaking known in Thailand as "Thaksinomics."

The clear majority should make it easier for the opposition to execute those promises but could also fan inflation if they pursue a plan to lift the minimum wage to 300 baht ($9.70) per day -- a roughly 40 percent increase.

The election is Thailand's 26th since it became a democracy in 1932, ending seven centuries of absolute monarchy. Since then, it has seen 18 military coups or coup attempts.

Opinion polls had predicted Puea Thai would win about 240 seats, short of a majority. In that scenario, smaller parties would have been crucial, possibly helping the Democrats stay in power if they had managed to form a coalition government.

Yingluck said her party was in talks with Chart Thai Pattana, a smaller party with a projected 20 seats, to join hands in parliament and provide some breathing space.

($1 = 30.795 Thai Baht)

(Additional reporting by Vithoon Amorn, Ploy Ten Kate, Apornrath Phoonphongphiphat and Praveen Menon; Editing by Nick Macfie and Brian Rhoads)

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