Morning Bulletin – Monday, Feb. 9, 2009

A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:

STIMULUS UPDATE: It's a campaign flashback this week as President Barack Obama hits the road – and the airwaves – to sell his $800 billion-plus economic stimulus plan to Americans and to rebut Republican criticism of the plan.

As the Senate readies for Tuesday's final vote on its version of the bill, the president heads to Elkhart, Indiana today for a town meeting-style event at Noon ET.

Why Elkhart? A White House official tells CBS News, "it is one example of how dramatically the job losses have hit this country" with an unemployment rate that has tripled since December 2007.

"Elkhart today hosts President Barack Obama, who's on his first sojourn outside Washington since his inauguration. ... Nowhere is it needed more than in this Northern Indiana city," writes the Indianapolis Star's Will Higgins.

"Elkhart (population: 53,000) leads the nation in unemployment. According to Labor Department statistics released last week, the area's jobless rate hit 15.3 percent in December, up 10 percentage points in a year. The cause: The recreational vehicle industry, long the backbone of Elkhart's economy, is in a deep funk. Just last week two RV makers announced another 600 layoffs."

Tonight, President Obama will hold his first prime time press conference at the White House – 8pm ET – and tomorrow, he's back on the road with a town meeting in Florida.

The trips and the press conference "show that Obama and his advisers are worried about a looming Senate vote on the stimulus bill, which failed to gather meaningful Republican support during rare weekend debate," writes the Associated Press' Mark S. Smith.

"The question-and-answer sessions with citizens and later with news reporters will allow Obama to appeal directly for grass-roots backing of his plans. Both trips were added to Obama's schedule as difficulties with the legislation on Capitol Hill increased. Originally, aides had insisted his time would be better spent in Washington to shepherd the bill rather than traveling the more traditional presidential route around the country, pressuring lawmakers from his bully pulpit.

"The $827 billion Senate version of the plan was expected to pass the Senate on Tuesday. However, it must be reconciled with the House version, which totaled $820 billion in spending and tax cuts. With Senate and House negotiators preparing to deal, Obama is likely to push for a bill on his desk for his signature by mid-month."

FINANCIAL BAILOUT ANNOUNCEMENT TOMORROW: The long-awaited plan from the Obama Administration on how the remaining $350 billion of the financial bailout package will be spent will be unveiled by Treasury Secretary Timothy Geithner tomorrow.

The Wall Street Journal's Deborah Solomon and Damian Paletta outline the expected plan: "Treasury Secretary Timothy Geithner is expected to announce that the government will become a partner with the private sector to purchase banks' troubled assets, according to people familiar with the matter. ...

"Other likely elements of the plan, subject to last-minute changes, include: An expansion of the Fed's Term Asset-Backed Securities Loan Facility to include assets beyond the student-loan, auto-loan and credit-card debt it was set up to absorb. ...

"A second round of cash injections in financial firms but with tougher terms, such as a requirement to modify troubled mortgages and better track the federal funds. ... Giving the Federal Deposit Insurance Corp. power to help dismantle troubled financial firms beyond the depository institutions over which it now has authority. ...

"Having the FDIC guarantee a wider range of debt that banks issue to fund loans is also a likely element of the plan, said people familiar with the matter. ... More help for homeowners, at a cost of between $50 billion and $100 billion."

"Administration officials said the plan, to be announced Tuesday, was likely to depend in part on the willingness of private investors other than banks — like hedge funds, private equity funds and perhaps even insurance companies — to buy the contaminating assets that wiped out the capital of many banks," reports the New York Times' Floyd Norris.

"The officials say they are counting on the profit motive to create a market for those assets. The government would guarantee a floor value, officials say, as a way to overcome investors' reluctance to buy them.

"Details of the new plan, which were still being worked out during the weekend, are sketchy. And they are likely to remain so even after Treasury Secretary Timothy F. Geithner announces the plan on Tuesday.

"But the aim is to reduce the need for immediate federal financing and relieve fears that taxpayers will pay excessive prices if the government takes over risky securities. The banks created those securities when credit and home prices were booming a few years ago.

"Besides devising a way to bring private investors into the bank bailout, the Treasury plan is expected to inject more capital into some banks and to give many homeowners relief from immediate foreclosures. It also is expected to increase financing for a Bush administration program intended to encourage investors to finance such things as student loans and credit card debt."

WHO WILL BE HHS SECRETARY?: With Tom Daschle's withdrawal for consideration as Health and Human Services Secretary, the old Washington parlor game was fired up again last week as the handicapping of potential nominees began.

The two names being reported – Gov. Kathleen Sebelius, D-Kansas, and Gov. Phil Bredesen, D-Tenn. (both term-limited and unable to run for re-election in 2010) – are being considered, CBS News has learned. However, an administration official cautions that reports about Sebelius being the "top candidate" are "premature."

In addition, The Tennessean's Theo Emery reports that "Bredesen and his aides have repeatedly said that he had not been contacted by the White House" however, "Three administration staff members did not respond to questions about his status over the weekend." http://www.tennessean.com/article/20090209/NEWS0201/902090349


ALSO ON TODAY'S SCHEDULE: First Lady Michelle Obama visits the Interior Department and delivers remarks at 2pm ET.


ECONOMIC STIMULUS

Wall Street Journal's Greg Hitt, "Senate Nears Vote on Stimulus Bill": "Senate Democrats are confident they can push for a final vote on a revamped, $827 billion economic-stimulus package early this week, setting the stage for fresh battles as Democratic congressional leaders and the White House try to meld competing House and Senate bills.

"After cutting deals Friday with three moderate Republicans to pare the cost of the package, Senate Democrats, who control the chamber with a 58-41 majority, are confident of attracting the 60 votes needed to close off debate Monday. If approved as expected, the package would go to a vote Tuesday. ...

"The Senate plan and the $819 billion House plan are now roughly the same size and contain similar mixes of business and individual tax cuts, including proposals to help businesses claim new tax refunds by carrying back losses into prior tax years. The plans also provide for increasing government spending, raising funding for unemployment benefits, food assistance for the poor, and job-creating investments in bridge and highway construction, among other things. ...

"Differences between the two plans will be resolved in a conference of House and Senate leaders. Preparations for that process have already begun. Votes on the final package could come by late this week."

Washington Post's Alec MacGillis and Perry Bacon Jr., "GOP Sees Positives in Negative Stand": "Three months after their Election Day drubbing, Republican leaders see glimmers of rebirth in the party's liberation from an unpopular president, its selection of its first African American chairman and, most of all, its stand against a stimulus package that they are increasingly confident will provide little economic jolt but will pay off politically for those who oppose it.

"After giving the package zero votes in the House, and 0with their counterparts in the Senate likely to provide in a crucial procedural vote today only the handful of votes needed to avoid a filibuster, Republicans are relishing the opportunity to make a big statement.

"Rep. Pete Sessions (R-Tex.) suggested last week that the party is learning from the disruptive tactics of the Taliban, and the GOP these days does have the bravado of an insurgent band that has pulled together after a big defeat to carry off a quick, if not particularly damaging, raid on the powers that be."

Politico's Jonathan Martin and Manu Raju, "Big stimulus risk for both sides":" The risks for Obama are considerable. He and the Democrats will have no one else to blame if the package fails to boost the economy. Obama himself has said his first term can be judged on whether it succeeds, whether it creates or saves the 3 million to 4 million jobs he promises.

"And if the economy fails to show marked signs of improvement — a possibility indeed — Republicans will have a megabillion-dollar 'I told you so' in their pockets, just in time for the 2010 midterm elections and Obama's own reelection bid in 2012. ...

"Yet Republicans are gambling themselves — and perhaps with even higher stakes. Still seeking a way forward from their Election Day thumping, they risk appearing out of touch as the unemployment rate jumps to 7.6 percent and a popular new president is appearing to seek their support to address the crisis. By turning their backs on him and opposing action at a time when millions of Americans are in need, they may invite a 'party of no' bull's-eye on their backs."

Sen. Arlen Specter, R-Pa. (up for re-election in 2010), writes an op-ed in The Washington Post, "Why I Support the Economic Stimulus": "I am supporting the economic stimulus package for one simple reason: The country cannot afford not to take action. ...

"The legislation known as the "moderates" bill, hammered out over two days by Sens. Susan Collins, Ben Nelson, Joe Lieberman and myself, preserves the job-creating and tax relief goals of President Obama's stimulus plan while cutting less-essential provisions -- many of them worthy in themselves -- that are better left to the regular appropriations process. ...

"'In politics,' John Kennedy used to say, 'nobody gets everything, nobody gets nothing and everybody gets something.' My colleagues and I have tried to balance the concerns of both left and right with the need to act quickly for the sake of our country. The moderates' compromise, which faces a cloture vote today, is the only bill with a reasonable chance of passage in the Senate."

Washington Post's Robert O'Harrow Jr., "If Spending Is Swift, Oversight May Suffer": "The Obama administration's economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.

"The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards. But under the terms of the stimulus proposals, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight. ...

"The stimulus plan presents a stark choice: The government can spend unprecedented amounts of money quickly in an effort to jump-start the economy or it can move more deliberately to thwart the cost overruns common to federal contracts in recent years."

FOREIGN POLICY

NY Times' Nicholas Kulish and Helene Cooper, "Holbrooke Says Afghan War 'Tougher Than Iraq'": "The war in Afghanistan will be 'much tougher than Iraq,' President Obama's special representative to Afghanistan and Pakistan said at a security conference here on Sunday. 'There is no magic formula in Afghanistan,' the envoy, Richard C. Holbrooke, warned an audience of European policy makers and military planners. 'There is no Dayton agreement in Afghanistan,' he added, referring to the peace accord he negotiated to end the war in Bosnia. 'It's going to be a long, difficult struggle.'"

LA Times' Christine Spolar, "Biden sets conciliatory international tone"

Politico's David S. Cloud and Josh Gerstein, "Biden trip yields few tangible returns"

Washington Post's Shankar Vendantam, "Obama Confidant Plans to Meet Azerbaijani Leader": "David Plouffe, who managed Barack Obama's presidential campaign and was cited by Obama as the "unsung hero" in his ascendancy to the White House, is expected to meet this week with Azerbaijan's president, who has been accused of undermining democracy in that oil-rich country. Plouffe does not work for the White House, but he remains close to top White House officials."

MINNESOTA SENATE RECOUNT

St. Paul Pioneer Press' Rachel E. Stassen-Berger, "Coleman ballot list heavy on GOP turf": "Much of Republican Norm Coleman's hope for victory in the U.S. Senate race rests on his lists of about 4,700 rejected absentee ballots. After a two-month recount, Coleman sued to overturn Democrat Al Franken's 225-vote lead.

"A central claim of his case: Thousands of potentially valid absentee ballots haven't been counted. Inside and outside the courtroom, Coleman's attorneys have repeatedly said they didn't 'cherry-pick' the ballots. That is, the ballots made it to the list because the legal team honestly believes they are valid and should be counted. But a Pioneer Press analysis of the counties and cities the ballots come from shows those areas overwhelmingly favor Coleman."

2010 ELECTIONS

Politico's Josh Kraushaar, "Dems work to pick out pickups": "Democrats have defeated so many vulnerable Republicans over the past four years that there are few obvious targets left for them to pursue in 2010. Following consecutive elections where the party picked up a net of 52 Republican-held seats, the Democratic Congressional Campaign Committee suddenly finds itself in the unusual position of having to scrape to identify pickup opportunities next year. There are only five House Republicans left representing districts that Democratic presidential nominee John Kerry carried in 2004 — a prime indicator of potential vulnerability — and three of them are already looking at leaving to run for statewide office."

Washington Post's Chris Cillizza, "Looking With Interest at 2010 Money"

ALSO:

Washington Post's Howard Kurtz, "Obama Meets the Press, But Cautiously"

Wall Street Journal's Naftali Bendavid, "Partisan Divide Haunts Obama's Push on Policy": "The partisan divide marking the economic-stimulus debate in Congress shows the difficulties facing Barack Obama's grand vision of bipartisan governing, and suggests that he is destined to battle for his programs the old-fashioned way -- hoping to win near-unanimous votes from his own party and just enough from the opposition to squeak through. ...

"Coming items on Mr. Obama's agenda -- rescuing banks, overhauling health care, rewriting energy policy -- are no less contentious than the stimulus package. The record so far suggests that even if President Obama and Republican leaders cultivate good relations, that won't prompt the two sides to make major compromises and meet in the middle. Instead, deep ideological divides and narrow votes could be the norm."

Washington Post's Henri E. Cauvin, "Steele Defends Payment to Sister": "Michael S. Steele, the new chairman of the Republican National Committee, said yesterday that there was nothing improper in a payment of more than $37,000 to his sister's company for work on his 2006 Senate campaign and that he would work with the FBI 'to clear up my good name.'"