Morning Bulletin – Monday, Feb. 2, 2009
A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:
In a letter to the committee's chairman and ranking Republican, Daschle apologized and promised to answer any and all questions they have.
"As you can well imagine, I am deeply embarrassed and disappointed by the errors that required me to amend my tax returns. I apologize for the errors and profoundly regret that you have had to devote time to them. I will be happy to answer any Committee members' questions about these issues," Daschle wrote in the two-page letter dated Feb. 1.
The Washington Post's Ceci Connolly and Paul Kane report that during his meeting today, Daschle "will also inform lawmakers that in addition to the $140,000 in back taxes and interest he paid on Jan. 2, he intends to send the U.S. Treasury an additional $6,000 to cover Medicare taxes on the driver. Questions about the Medicare tax liability arose only Friday, [Daschle spokeswoman Jenny] Backus said, and Daschle agreed to pay the money."
Daschle, in his letter to the committee, explained how he discovered and remedied the tax problem.
"Last fall, when I was being considered for this position, the Presidential Transition Team's vetters reviewed my records. During the course of those reviews, the vetting team flagged charitable contributions they felt were deducted in error. When my accountant realized I would need to file amended returns, he suggested addressing another matter I had raised with him earlier in the year: whether the use of a car service offered to me by a close friend might be a tax issue. In December, my accountant advised me that it should be reported as imputed income in the amended returns.
"At about the same time, the friend's company, a consulting client, informed my accountant of a clerical error it had made on the Form 1099 it provided to me and reported to the IRS for 2007. In an effort to ensure full compliance and the most complete disclosure possible of my personal finances, we remedied these issues by filing amended tax returns with full payments, including interest. We provided all this information to the Committee in addition to the completed Committee questionnaire and my responses to your staff's questions. I disclosed this information to the Committee voluntarily, and paid the taxes and any interest owed promptly. My mistakes were unintentional."
The New York Times' David D. Kirkpatrick laid out the relationship that led to these tax problems: "Mr. Daschle agreed to become the founding chairman of 'a world-class executive advisory board' of 'industry and regulatory experts' for a new investment firm run by [former Yes Networks CEO Leo] Hindery...
"The Daschle-led board ... would help provide a 'collective depth of industry knowledge and expertise that will allow us to pursue unique and high-value opportunities.' In addition to lending the prestige of his name, Mr. Daschle traveled to help raise money from investors for Mr. Hindery's new venture, said Jenny Backus, a spokeswoman for Mr. Daschle.
"And in exchange, over the next four years the firm compensated Mr. Daschle with over $2 million, and Mr. Hindery lent Mr. Daschle the use of a chauffeured limousine in Washington. Ms. Backus said that when Mr. Hindery was not in Washington he lent his car to Mr. Daschle as a favor to a friend."
"Supporters of Mr. Daschle said Sunday that the questions on his flights would be cleared up when Mr. Daschle meets with committee members Monday to answer outstanding questions about his nomination," write Jonathan Weisman and Melanie Trottman of the Wall Street Journal.
"'That's going to prove to be not much about not much,' said Sen. Kent Conrad (D., N.D.), a Finance Committee member briefed on the Daschle nomination. ... Some senators on Sunday raised questions about Mr. Daschle's tax issues, but only a handful suggested that the problems could imperil his confirmation. Mr. Daschle's close ties with the Senate, as a former Senate majority leader, appear likely to pull him through."
In a letter to the Clerk of the U.S. House, dated Jan. 29, Solis amended her "Financial Disclosure Forms for the years 2004-2007," which suggested she received pay for her work with the pro-union American Rights at Work organization. Solis said that although she was a "Board Member and Treasurer" of the group from 2004-07, she "received no compensation" for her work.
"In documents dated Jan. 30 and viewed by The Wall Street Journal, Ms. Solis, whose nomination hearing was in early January, responded to written, follow-up questions from Sen. Mike Enzi (R. Wy.) about Ms. Solis's service as a board member and treasurer of union-advocacy group American Rights at Work.
"Mr. Enzi said the group allocates money and resources to lobby Congress on the Employee Free Choice Act. Mr. Enzi wanted to know how Ms. Solis would reconcile her service in the group with House ethics rules against members lobbying, or advising on lobbying, Congress or the White House. 'I have never participated in lobbying, or advised anyone on lobbying, either Congress or the Executive Branch on behalf of American Rights at Work,' Ms. Solis replied. ...
"Sen. Enzi also asked Ms. Solis if, in light of her fiduciary duties as treasurer for American Rights at Work, she would recuse herself for two years from any discussion or debate, administrative decisions, or other matters related to the Employee Free Choice Act. She responded 'no,' explaining that she isn't a registered lobbyist."
"When Obama's interest in Gregg became known Thursday, it created some Republican angst because Democrats are tantalizingly close to a filibuster-proof majority," writes Christi Parsons of the L.A. Times.
"They hold 56 seats, and the Senate's two independents caucus with them. Democrat Al Franken holds a slim lead in Minnesota's disputed election, and if it stands, he would become the 59th Democratic vote. Under Senate rules, 60 votes are required to limit debate and hold off a filibuster. New Hampshire's governor, a Democrat, holds the power to appoint a replacement for Gregg.
But Senate Minority Leader Mitch McConnell (R-Ky.) said he wasn't worried. 'Whoever is appointed to replace him will caucus with Senate Republicans,' McConnell said on CBS' 'Face the Nation.'"
The Boston Globe's Lisa Wangsness suggests a possible replacement for Gregg in the Senate: "A new name is circulating among New Hampshire politicians as a likely pick to replace US Senator Judd Gregg if he is appointed Commerce Secretary: J. Bonnie Newman, a Republican with close ties to both Gregg and the state's Democratic governor, John Lynch, and extensive Washington experience. ...
"She was chief of staff to Gregg when he was a congressman in the 1980s, and she was one of the first Republicans to publicly endorse Lynch in his 2004 challenge of then-Republican Governor Craig Benson, and co-chaired Republicans for Lynch. She has held a number of high-profile positions in higher education, including several important posts at the University of New Hampshire (including interim president) and executive dean of Harvard's John F. Kennedy School of Government. She has also led the New Hampshire Business and Industry Association."
Other names being tossed around include Lynch allies former GOP Gov. Walter Peterson, former GOP House Speaker Doug Scamman, as well as Democratic U.S. Reps. Paul Hodes and Carol Shea-Porter.
SENATE STIMULUS DEBATE BEGINS TODAY: "Big fights loom this week as the Senate opens debate on its version of the stimulus, a package of tax cuts and spending with a price tag approaching $900 billion," write the Wall Street Journal's Greg Hitt and Brody Mullins. "Republicans are preparing alternative proposals that would shift the emphasis away from spending. One proposal calls for cuts in the two lowest income-tax rates and strengthened aid to distressed homeowners, among other measures. At the same time, a Democrat-backed amendment being readied would increase infrastructure spending in the bill by between $20 billion and $30 billion, boosting support for mass transit, highways and bridges, and wastewater-treatment plants, among other things. ...
"Roughly two-thirds of the stimulus package involves spending measures, covering everything from jobless benefits and food assistance for the poor to investments in roads and bridges, intended to create jobs. Democratic leaders in the House and Senate hope to hold the cost of the package below the $1 trillion level, not wanting to give Republicans any additional fodder to criticize the initiative, congressional aides said. The House passed its version of the package, costing $819 billion, last week."
Video: Sen. John McCain, R-Ariz., said on CBS' "The Early Show" this morning that there's "too much unnecessary spending, not the right kind of tax cuts and no endgame. ... After the economy recovers we should be on a path to a balanced budget. We're laying the biggest deficit on future generations in America's history."
Senate Minority Leader Mitch McConnell, R-Ky., wasn't so bullish on the plan during an interview yesterday with "Face the Nation's" Bob Schieffer, saying he doubted it could pass without significant changes: "I think we need to exercise some discipline here. And I think it may be time, Bob, for the president to kind of get a hold of these Democrats in the Senate and the House, who have rather significant majorities, and shake them a little bit and say, look, let's do this the right way... I can't believe that the president isn't embarrassed about the products that have been produced so far."
During a pre-Super Bowl interview with NBC's Matt Lauer, President Obama added, "I am confident that by the time we actually have the final package on the floor that we are going to see substantial support."
The Democratic Congressional Campaign Committee launched radio ads today "in 28 targeted Republican [House] districts," criticizing them on their opposition of the stimulus plan, according to a press release.
"The ads focus on the Republicans out of step priorities by putting bank bail outs and building schools in Iraq before the needs of the Americans in the struggling economy. ... In addition to the strategic radio ads in 28 Republican districts, the DCCC will also begin a grassroots initiative which includes targeted e-mails to 3 million voters and nearly 100,000 person-to-person telephone calls."
The Washington Post's Paul Kane lays out the details and differences in the House and Senate stimulus plans: "The Senate will open debate today on a nearly $900 billion economic stimulus plan that is similar in size and scope to the package the House passed... But senators in both parties hope to alter the legislation... If many of these changes are accepted in the Senate ... it could complicate the effort to work out differences between the two bills. ...
"How many changes will the Senate make? 'Maybe none, but we're going to try to make a case,' said Sen. Charles E. Grassley (Iowa), the top Republican on the Finance Committee. Grassley's key mission is trying to ensure that the funding formula for $87 billion in aid to governors for Medicaid is favorable to rural states such as Iowa, but the effort faces an uphill battle against a Democratic leadership team stocked with lawmakers from New York, California and Illinois.
"The largest difference between the two measures is the Senate's inclusion of a tax break to prevent upper-middle-income families from slipping into the alternative minimum tax, which was created 40 years ago to make sure that the nation's wealthiest families were not able to shield their earnings from the Internal Revenue Service. ...
"The largest tax cut in each bill is Obama's 'Make Work Pay' provision, a credit of $500 per individual and $1,000 per family. The House version costs $145.3 billion, about $3.5 billion more than the Senate plan, because it makes the credit available to people with higher incomes. The Senate includes a $300 payment this year to retirees, disabled individuals and veterans, and other low-income Americans, a nearly $17 billion provision that is not in the House legislation."
TODAY'S SCHEDULE: President Obama will meet with the Vice-Chair of the National Governors' Association, Gov. Jim Douglas, R-Vt., at 11am ET. Later, he holds meetings with Defense Secretary Robert Gates and will meet with congressional leaders at 4:45pm to talk stimulus.
At 3pm ET, Michelle Obama and Education Secretary Arne Duncan speak about education at the Department of Education.
At 4pm ET, Vice President Joe Biden will attend the ceremonial swearing in of Secretary of State Hillary Clinton at the State Department. Secretary Clinton also has lunch with Treasury Secretary Timothy Geithner today at the State Department to discuss the global economy.
Attorney General Nominee Eric Holder is expected to be officially confirmed in the Senate. A vote is scheduled for 6:15pm ET.
Chicago Tribune's John McCormick and Dan Mihalopoulos, "White House Chief of Staff Rahm Emanuel is interested in potentially returning to Chicago someday to reclaim the congressional seat he held until a month ago, a candidate running to replace him said Sunday.
"When 11 Democrats at the first 5th Congressional District forum were asked whether they have had direct or indirect conversations with Emanuel about being a 'place holder' for the seat, only state Rep. John Fritchey (D-Chicago) said he had. 'I spoke with Rahm maybe a week or two after he had accepted the job of chief of staff,' Fritchey said. 'At that time, he had commented to me that he may be interested in running one day again for the seat. I told him that should I be fortunate enough to run, and should I be fortunate enough to win the seat, I would look forward to campaigning against him.'"
Washington Times' Christina Bellantoni, "Obama's exec orders have loopholes": "President Obama's first moves earned him triumphant headlines: 'Obama Freezes Pay, Toughens Ethics and Lobbying Rules,' and 'Obama sets new course.' But some of his biggest accomplishments are twinned with the word 'but': Lobbyists are banned, but exceptions can and will be made; orders on ending torture and secret prisons contain loopholes and provisos. Call it the fine print, an exception, a waiver, but there have been caveats to many of Mr. Obama's first actions. The lobbying issue has drawn the most ire, especially since Mr. Obama spent so much time blasting lobbyists on the campaign trail."
NY Times' John Harwood, "With Disputes Brewing, Biden Turns to Senate"
ALSO:
4732106Wall Street Journal's Jonathan Weisman, "Summers Carves Out a Powerful Role": "With a slew of high-profile hires, President Barack Obama's chief economic adviser is raising the clout of the White House National Economic Council -- as well as the prospects of internal conflict in the Obama administration.
"Lawrence Summers's effort may lift the NEC to a level of prominence unmatched since President Bill Clinton created the body in 1993 to give economic issues equal weight with national-security matters. White House aides say that is an appropriate response to the economic challenges facing the nation. But Mr. Summers has raised concern outside the White House that clashes with the Obama cabinet on policy and personality may be inevitable as Mr. Summers transforms a policy-coordinating council into a center for policy making."
LA Times' Robin Abcarian, "Hi, I'm Jill. Jill Biden. But please, call me Dr. Biden": "In 2007, at 55, Jill Biden did earn a doctorate -- in education, from the University of Delaware. Since then, in campaign news releases and now in White House announcements, she is 'Dr. Jill Biden.' This strikes some people as perfectly appropriate and others as slightly pompous, a quality often ascribed to her voluble husband."
Politico's Amie Parnes & Ted Johnson, "What Hollywood wants from Obama": "They acted as surrogates, stumped on the campaign trail and held lavish fundraisers at their homes.
They donated heaps of cash, led voting drives and made insanely viral Web videos. And last month, they descended on Washington to celebrate with their publicists, their Prada and — finally — their president. So what do celebrities want from President Barack Obama now? More than they're likely to get. Although Obama threw a star-studded inaugural festival, he's no Bill Clinton — so don't expect Lincoln Bedroom sleepovers for Ted Danson or parties with Barbra Streisand. Indeed, during his inaugural address, Obama spoke dismissively of those who 'seek only the pleasures of riches and fame.'"