Morning Bulletin – Wednesday, Feb. 4, 2009
A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:
"Firms that want to pay executives above the $500,000 threshold would have to compensate them with stock that could not be sold or liquidated until they pay back the government funds," an administration official told the Associated Press' Jim Kuhnhenn.
Other restrictions to be proposed include: "Long-term compensation restrictions even for companies that don't receive government assistance; Requiring top executives at financial institutions to hold stock for several years before they can cash out; Requiring nonbinding 'say on pay' resolutions — that is, giving shareholders more say on executive compensation; A Treasury-sponsored conference on a long-term overhaul of executive compensation."
"He didn't offer excuses and I don't think there is an excuse and what became apparent was that not only could this be a distraction, but I don't want my administration to be sending a message that there are two sets of rules: one for prominent people and one for ordinary folks who have to pay their taxes everyday." (Click here to see the whole interview)
So what is the fallout from the Daschle episode – and the other folks Mr. Obama nominated whose problems were discovered after their nominations?
"[T]he problems called into question the thoroughness of Obama's vetting process as the Democrat's team pushed to put his Cabinet and White House team in place at a lightning-quick pace after last fall's election," writes the Associated Press' Liz Sidoti.
"The problems also threatened to undercut Obama's promise to change business as usual in Washington; previous presidents have faced similar problems with their nominees. Even as he works to stabilize the rapidly worsening economy and plan for a troop decrease in Iraq and increase in Afghanistan, Obama's most immediate objective now is to move on from what the White House called an 'embarrassment.'
"He must quickly find someone with Daschle's health care expertise and Washington connections who can sail through the confirmation process and make good on the president's pledge to move toward universal health care coverage in his first 100 days. That certainly won't be easy given that Daschle is considered a major authority on the issue and has spent some three decades in Washington, most in the Senate, where he once was majority leader. He was going to have played two roles for Obama as the White House health czar, with a West Wing office, and as the secretary of the Health and Human Services Department."
Washington Post's Ceci Connolly writes, "The embarrassing departure of any Cabinet choice complicates the work of the White House. But the announcement yesterday that Daschle was withdrawing his nomination and also resigning from the health czar job created especially for him was a particularly damaging blow to the new administration. ...
"Democrats close to the White House said that they are now at a loss for who will fill the void, given that Daschle was the only real contender contemplated by the president.
"'There were no other names,' said one administration ally who was not permitted to speak on the record about the Daschle saga. 'The game plan changes when you need to swap out your quarterback,' said Dan Mendelson, a former Clinton administration official who now owns a health consulting company. 'Congress writes the laws.
The Obama administration really understands that.' Senate Finance Committee Chairman Max Baucus (D-Mont.) emphasized yesterday that his staff will resume its work crafting health legislation. Even so, many Democrats and health aides were shell-shocked."
The Wall Street Journal's Jonathan Weisman, Laura Meckler and Naftali Bendavid report, "The biggest impact could be on Mr. Obama's pledge to overhaul the nation's health-care system. Mr. Daschle had been chosen not just to lead HHS, but also to head a newly created office on White House health reform. His very appointment has been seen as boosting the chances for major action this year.
"Further, the White House is essentially starting from scratch. Unlike with other Cabinet posts, where several names were considered, it was clear even before Election Day that Mr. Daschle was Mr. Obama's choice for HHS.
"The Obama administration had hoped to launch its health-care effort as soon as next month, with a high-profile event at the White House. The legislation Mr. Obama envisions would improve quality of care, control spiraling costs and help provide insurance for all Americans."
The New York Times' Peter Baker and Robert Pear add, "Since Mr. Daschle was the only person the president seriously considered for the health job, his advisers were left scrambling to find an alternative.
"Advocates of universal coverage pressed the case for former Gov. Howard Dean of Vermont, a medical doctor, but Mr. Obama just replaced him as chairman of the Democratic National Committee and he might be a provocative choice to Republicans.
"Democrats close to the White House said attention was focusing on governors, who by nature of their jobs run state Medicaid programs, particularly Gov. Kathleen Sebelius of Kansas. Other possibilities include Govs. Edward G. Rendell of Pennsylvania and Jennifer M. Granholm of Michigan and former Gov. John Kitzhaber of Oregon, all Democrats.
"Ms. Sebelius was an early supporter of Mr. Obama's campaign while Mr. Rendell and Ms. Granholm joined after the primaries. Mr. Kitzhaber is a former emergency room physician who pushed through health care changes while in office."
"[T]he Daschle crash was only the latest episode amid several in recent days on a similar theme: Ushering a new era of accountability, civility, and ethics in Washington looks easier from the outside than from the inside," writes Politico's Jeanne Cummings.
"Old Washington is colliding with the new White House on other fronts, as well. The president's attempts to create a rapport with Republicans have been met more often than not with rebukes. And Obama's own Democratic colleagues in the House have complicated his effort to shepherd through Congress a nearly $900 billion stimulus bill that he'd hoped would be on his desk on Inauguration Day."
STIMULUS UPDATE: "Senate Democratic leaders conceded yesterday that they do not have the votes to pass the stimulus bill as currently written and said that to gain bipartisan support, they will seek to cut provisions that would not provide an immediate boost to the economy," report the Washington Post's Shaleigh Murray and Paul Kane.
"The legislation represents the first major test for President Obama and an expanded Democratic Congress, both of which have made economic recovery the cornerstone of their new political mandate. The stimulus package has now tripled from its post-election estimate of about $300 billion, and in recent days lawmakers in both parties have grown wary of the swelling cost. Moderate Republicans are trying to trim the bill by as much as $200 billion, although Democrats working with those GOP senators have not agreed to a specific figure."
"We have to act. We have to act now. We have to act in a way that is responsible and we have to make sure that our overarching focus is on putting people back to work," Mr. Obama told CBS News' Katie Couric yesterday.
"[W]e have an urgent situation right now. This is an extraordinary time. I think the American people because they're feeling it day-to-day. Understand this, I'm not sure that Washington does at times - we're still getting our paychecks, we're not being laid off. But you go out into any city or town in America right now and they are scared. So what I would say is let's try to make sure we stay focused on solving the problem and we've got to act relatively quickly."
"The Senate on Tuesday pushed the cost of the economic stimulus package above $900 billion by adding billions for medical research and tax breaks for car buyers," writes David M. Herszenhorn of the New York Times.
"Angling to spur automobile sales as part of the economic stimulus package, the Senate voted to add an $11 billion provision to the bill that will allow most Americans to claim a tax deduction for the sales tax and any loan interest on the purchase of a new car between Nov. 12, 2008, and the end of 2009.
"The vote ... came as the Senate began to act on what is expected to be a long list of amendments to the stimulus measure. The House last week approved an $820 billion version of the bill, which is the top priority of President Obama and Democratic leaders in Congress. Mr. Obama has said the final bill should not cost more than $900 billion.
"Later, by voice vote, the Senate added $3.5 billion for the National Institutes of Health, bringing the total price tag to just over $900 billion with additional increases to come. Far more contentious debate is expected later in the week when Senate Republicans plan to put forward major changes to the bill, including efforts to bolster the housing market and to cut back spending initiatives in favor of broader and deeper tax cuts. Democrats have said they are open to changes, but to what extent is still unclear."
ALSO ON TODAY'S SCHEDULE: President Obama will officially sign the bill passed in Congress last week that extends children's health care coverage. Also, Mr. Obama will hold a meetiing with Secretary of State Hillary Clinton and Middle East envoy George Mitchell. He'll also hold separate meetings with Senate Democrats and Interior Secretary Ken Salazar before attending a cocktail reception with Congressional leaders at the White House.
Michelle Obama continues her tour of federal agencies and will deliver remarks at the Department of Housing and Urban Development.
Hillary Clinton holds a town hall meeting with State Department employees; she also meets with former British Prime Minister Tony Blair.
CHENEY
4697423Politico's John F. Harris, Mike Allen and Jim VandeHei, "Cheney warns of new attacks": "Former Vice President Dick Cheney warned that there is a 'high probability' that terrorists will attempt a catastrophic nuclear or biological attack in coming years, and said he fears the Obama administration's policies will make it more likely the attempt will succeed.
In an interview Tuesday with Politico, Cheney unyieldingly defended the Bush administration's support for the Guantanamo Bay prison and coercive interrogation of terrorism suspects. And he asserted that President Obama will either backtrack on his stated intentions to end those policies or put the county at risk in ways more severe than most Americans—and, he charged, many members of Obama's own team—understand.
"'When we get people who are more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,' Cheney said."
BLAGO
"Well, you know, I've been wanting to be on your show in the worst way for the longest time," Blagojevich responded excitedly.
"Well, you're on in the worst way, believe me," cracked Letterman. Watch the interview here.
ECONOMIC STIMULUS
NY Times' Edmund L. Andrews, "Both Parties Move to Aid Homeowners": "Four months after Congress tried to rescue the economy with a $700 billion bailout for the financial industry, Republicans and Democrats are suddenly competing to bail out financially struggling homeowners
"Having spent hundreds of billions of dollars rescuing financial institutions, only to see the economy spiral even deeper into crisis, liberal and conservative economists and lawmakers are pushing to redirect the economic stimulus bill to what they say is the core problem: the housing market.
"Senate Republicans are seeking new tax breaks and up to $300 billion in mortgage subsidies to attract homebuyers. Democrats want to spend at least $50 billion on federal programs aimed at reducing mortgage foreclosures. The Obama administration is hammering out its own plan to spend $50 billion to $100 billion to prevent home foreclosures.
"And later this month, Democrats hope to pass a measure that would give bankruptcy judges the power to reduce monthly mortgage payments for homeowners who are in default."
Wall Street Journal's Neil King Jr. and John W. Miller, "Obama Risks Flap on 'Buy American'": "President Barack Obama risked a backlash within his own party by criticizing "Buy American" provisions in the huge stimulus bill that would ensure that most of the big infrastructure money goes to U.S. suppliers. The measures, highly popular among congressional Democrats and trade unions, have come under heavy criticism from U.S. trade partners, some of whom threatened this week to file legal actions against the U.S. if the measures become law."
Wall Street Journal's Jennifer Levitz and Phillip Shishkin, "Stimulus Brings Out City Wish Lists: Neon for Vegas, Harleys for Shreveport"
FOREIGN POLICY
Wall Street Journal's Chip Cummins, Roshanak Taghavi and Jay Solomon, "Plans Emerge for New Troop Deployments to Afghanistan": "Senior U.S. commanders are finalizing plans to send tens of thousands of reinforcements to Afghanistan's main opium-producing region and its porous border with Pakistan, moves that will form the core of President Barack Obama's emerging Afghan war strategy.
"Mr. Obama is likely to formally approve additional deployments this week, and Pentagon officials hope the full complement of 20,000 to 30,000 new troops will be on the ground by the end of the summer, pushing the U.S. military presence to its highest level since the start of the war in 2001. U.S. commanders said the moves are part of a push to beat back the resurgent Taliban and secure regions of Afghanistan that are beyond the reach of the weak central government in Kabul. Unlike Iraq, where violence has typically been concentrated in cities, the war in Afghanistan is being increasingly waged in isolated villages and towns.
"Virtually none of the new troops heading to Afghanistan will go to Kabul or other major Afghan cities. By contrast, when the Bush administration dispatched 30,000 new troops to Iraq as part of the so-called surge, the bulk of the new forces went to Baghdad."
Washington Post's Karen DeYoung, "Obama Seeks Narrower Focus in Afghan War": "As President Obama prepares to formally authorize the April deployment of two additional combat brigades to Afghanistan, perhaps as early as this week, no issue other than the U.S. economy appears as bleak to his administration as the seven-year Afghan war and the regional challenges that surround it.
"A flurry of post-inauguration activity -- presidential meetings with top diplomatic and military officials, the appointment of a high-level Afghanistan-Pakistan envoy and the start of a White House-led strategic review -- was designed to show forward motion and resolve, senior administration officials said. But newly installed officials describe a situation on the ground that is far more precarious than they had anticipated, along with U.S. government departments that are poorly organized to implement the strategic outline that Obama presented last week to his National Security Council and the Joint Chiefs of Staff.
"With a 60-day deadline, tied to an April 3 NATO summit, Obama has called for a more regional outlook and a more narrowly focused Afghanistan policy that sets priorities among counterinsurgency and development goals. ... The problem confronting the administration is how to fill in Obama's broad strokes while fighting a war that, by all accounts, is going badly."
NY Times' Nazila Fathi and William J. Broad, "Iran Launches Satellite in a Challenge for Obama"
Washington Post's Glenn Kessler, "Clinton Warns Iran to Comply With Mandates"
Washington Post's Blaine Harden, "With Obama in White House, North Korea Steps Up Big Talk": "Stinging insults, sudden cancellations of military agreements and dark warnings of 'unavoidable' war are spilling out of North Korea almost daily.
"On Tuesday, news media reports here and in Japan said North Korea is preparing to test-launch a long-range missile capable of carrying a nuclear warhead. The target for much of this bluster and saber rattling is the government of South Korea, which has stopped giving its heavily armed communist neighbor unconditional aid.
"Last year, the new South Korean president, Lee Myung-bak, ended his predecessors' 'sunshine policy' toward the isolated North. For nearly a decade, that policy had soothed nerves on the Korean Peninsula by giving the truculent but poor government of Kim Jong Il large amounts of food, fertilizer and trade concessions, all without conditions and without asking questions about nuclear weapons, missile proliferation or human rights abuses.
"Chronically hungry North Korea has received virtually no food or fertilizer from Lee's government -- and nerves seem to be rubbed raw, at least within the North Korean leadership. ... The real audience for the North's heightened belligerence may be the Obama administration. A senior official at North Korea's de facto embassy in Japan suggested in an interview that Pyongyang wants to grab the attention of the new leadership in Washington and pressure it, using threats of regional war, to lean on Lee."
NY SENATE SEAT
"But the governor is unlikely to face the legal scrutiny or numerous investigations that Mr. Spitzer did, even though he has acknowledged that the information about Ms. Kennedy should not have been released. Ethics specialists say that because Mr. Paterson's search for a new senator was essentially a political matter, not an official state government process, launching an investigation into his conduct or that of his aides would be difficult."
MINNESOTA SENATE RECOUNT
Minneapolis Star Tribune's Pat Doyle and Kevin Duchschere, "Senate recount trial judges put 4,800 more ballots in play": "In a ruling that keeps alive Republican Norm Coleman's chances of overturning Minnesota's U.S. Senate recount, a three-judge panel on Tuesday allowed him to bring evidence to trial that as many as 4,800 absentee ballots were wrongly rejected and should now be counted.
"The decision expands the evidence that can be considered in the recount trial, giving Coleman the opportunity to put more ballots into play in his effort to erase a 225-vote lead for DFLer Al Franken. The Franken campaign had tried to limit Coleman to bringing evidence on only 650 absentee ballots that he cited specifically when he filed his lawsuit challenging the recount results. In the ruling, the judges said they will focus on rejected absentee ballots cast by voters who complied with the requirements of Minnesota election law or failed to comply because of mistakes by local elections officials."
2010 RACES
Associated Press' Charles Babington, "GOP faces tough Senate races next year": "Democrats, who were in the Senate minority only three years ago, now see a chance to push their majority above 60 in the 100-member chamber.
"That's a crucial number because it would allow them to cut off Republican filibusters and control Senate actions with minimal GOP interference. To be sure, Democrats have their own concerns, and their optimism may prove unfounded 21 months from now. They have untested appointees in Colorado, Illinois and New York who must run next year to keep their seats.
"And a president's party often proves unpopular in his first midterm election, as Democrats and then-President Bill Clinton learned in 1994. But for now, Democrats feel they have good odds to pick up Senate seats for the third straight election. ...
"The Republican woes start with five retiring senators who had decent-to-good chances of winning re-election: George Voinovich of Ohio, Kit Bond of Missouri, Mel Martinez of Florida, Sam Brownback of Kansas and Gregg. All but Kansas are states closely contested in every recent election."