Morning Bulletin – Tuesday, Feb. 17, 2009
A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:
Why Denver? "The president arrives in Denver today to whip the economy into shape. So is Colorado the 'before' picture, or the 'after" picture?' the Denver Post's Michael Booth and Aldo Svaldi ask.
"President Barack Obama will sign the $787 billion stimulus package at the Denver Museum of Nature & Science at a time when Colorado represents a little of both. Home prices have shrunk and unemployment bumped up; Colorado-based companies have seen their stock prices plummet, and declining sales-tax revenues plague local governments. Conversation on the street or in the typical coffeehouse tends to turn to joblessness, fears of salary cuts, investment losses and health care costs.
"But Obama will make his grand national gesture in a state where two of his pet industries of the future are thriving on new ideas and ambition, and which are ready to spend money as soon as he caps his pen. The stimulus includes billions in credits and grants meant to promote green-energy production and independence from Middle East oil. Democratic Gov. Bill Ritter has long made those ideas key to his vision of creating Western jobs."
"The choice of the museum is symbolic — an array of solar panels was installed on its roof last June that today are providing from 3 to 5 percent of the building's power," adds Kevin Vaughan of the Rocky Mountain News.
"[I]t was apparent that he chose Denver in part to highlight efforts made in recent years to develop Earth-friendly energy in a way that also drives economic growth. And it appeared that Obama planned to make an example of the ways the stimulus plan, which passed with almost no Republican support, would affect real people and real companies."
AUTO BAILOUT: "As General Motors Corp. and Chrysler race to submit plans today for assuring their long-term survival, President Obama's decision to have his top economic advisors bird-dog the auto industry bailout shows how high the stakes have become -- for Detroit, for Washington and for the nation's economy," write the Los Angeles Times' Jim Puzzanghera and Martin Zimmerman.
"With job losses escalating and the just-passed $787-billion economic stimulus bill only today being signed into law, the last thing the president or the economy needs is for one or more of the U.S. automakers to collapse. And the problems that forced former President Bush reluctantly to agree to a $17.4- billion short-term bailout for GM and Chrysler in December-- plummeting car sales and the deepening overall recession -- have worsened in the weeks since."
"But GM's recovery plan and one from Chrysler LLC, due today as a condition of a $17.4 billion federal loan package, are not expected to include key money-saving concessions from the United Auto Workers and bondholders. Despite long negotiations over the weekend and Monday, neither automaker was expected to reach agreements by today's deadline, sources said. The loan terms call for GM and Chrysler to restructure their payments into a UAW-run retiree health care trust and to reduce their unsecured public debt by two-thirds."
"The companies' plans are expected to detail thousands of job cuts, fresh plant closings and other measures aimed at surviving the worst market in decades," add the Detroit Free Press' Justin Hyde and Tim Higgins.
"Neither firm will embrace bankruptcy as a solution, despite pressure from outside experts and some members of Congress. GM appears likely to join Chrysler in asking for additional money to withstand a U.S. recession with no end in sight."
"In using Arizona as the backdrop to announce his housing plan, Obama is choosing a state hit hard by foreclosures. In January, more than 4,500 homes in Arizona were repossessed, the third highest number in the nation, according to RealtyTrac, a company that collects foreclosure data. Last month, California ranked first," reports the Los Angeles Times' Peter Nicholas.
"Obama has dropped hints about the broad outlines of his housing plan, estimated to cost $50 billion to $100 billion. Speaking in Elkhart [Ind.] last week, he said he would push for a new law that allows judges to rewrite the terms of a mortgage for homeowners who land in bankruptcy court."
The "plan to reduce the flood of home foreclosures will include a mix of government inducements and new pressure on lenders to reduce monthly payments for borrowers at risk of losing their houses, according to people knowledgeable about the administration's thinking," adds the New York Times' Edmund L. Andrews.
"The plan, to be announced Wednesday, is expected to include government subsidies for reducing a borrower's interest rate, which a lender would have to match with its own money.
"But officials cautioned that subsidies for lower interest rates would not in themselves help many troubled homeowners, because lenders were still likely to view many of those borrowers as bad risks and refuse to restructure their loans. As a result, they have been casting about for sticks as well as carrots to persuade the lenders to take part. Exactly what kind of pressure Mr. Obama would bring to bear remains unclear. One possibility is a stepped-up effort to enact legislation that would give bankruptcy judges new power to restructure mortgages and reduce a borrower's payments. ...
"Administration officials refused to say on Monday exactly what carrots and sticks they intended to invoke as part of their plan. But Mr. Obama's top advisers are keenly aware that a long series of voluntary loan-modification programs, championed by the Bush administration, made no dent in the flood of foreclosures that began in 2007."
By the way, Sen. John McCain, R-Ariz., is expected to be in Phoenix tomorrow as well – but not for the president's event. According to the Arizona Republic's Scott Wong, "President Barack Obama is planning to stay Tuesday night at the new $325 million Intercontinental Montelucia Resort & Spa in Paradise Valley, local sources familiar with the visit said. The White House and the resort would not confirm the stay.
ECONOMIC STIMULUS
Bloomberg News' Matthew Benjamin and Julianna Goldman, "Obama's Economic Stimulus Bill Most Ambitious Since Roosevelt": "President Barack Obama today signs into law one of the largest pieces of legislation in U.S. history, a $787 billion behemoth that combines massive tax breaks and government spending designed to resuscitate the moribund U.S. economy. The size of the new law and its speed moving through Congress -- it was approved within weeks of Obama's inauguration -- place it among the most significant legislative accomplishments since President Franklin Roosevelt overhauled the U.S. government in his first 100 days, historians and political analysts say."
Wall Street Journal's Naftali Bendavid, "McCain Says Bipartisanship Is Lacking": "At a dinner hosted by Barack Obama on the eve of his inauguration, John McCain said of the new president: 'His success will be our success.'
"In an interview in his Senate office, Mr. McCain said Democrats have simply tried to pick off a few Republicans to support their agenda, rather than sitting down and negotiating. 'So it's not what both he and I had promised the American people,' he said. Mr. McCain appeared especially irritated by House Speaker Nancy Pelosi's comment on the stimulus package: 'Yes, we wrote the bill. Yes, we won the election.' Mr. McCain said, 'That I was not very aware of as the theme of President Obama's campaign.'"
Associated Press' Liz Sidoti, "GOP tries to restore image of fiscal discipline": "Seeking political traction, Republicans are using the economic stimulus package to try to restore an image of fiscal discipline tarnished by a free-spending GOP Congress under former President George W. Bush. The return to what many Republicans consider their small-government, tax-cut roots is driving unity in a party that now lacks power in the White House and in the Democratic-controlled House and Senate."
NY Times' Jackie Calmes, "Obama Gains G.O.P. Support From Governors": "In the states, meanwhile, many Republican governors are practicing a pragmatic — their Congressional counterparts would say less-principled — conservatism. Governors, unlike members of Congress, have to balance their budgets each year. And that requires compromise with state legislators, including Democrats, as well as more openness to the occasional state tax increase and to deficit-spending from Washington.
"Across the country, from California's Arnold Schwarzenegger to Florida's Charlie Crist and New England's Jim Douglas in Vermont and M. Jodi Rell in Connecticut, Republican governors showed in the stimulus debate that they could be allies with Mr. Obama even as Congressional Republicans spurned him."
Wall Street Journal's Jonathan Weisman and Naftali Bendavid, "Obama Strategy: Keep Lawmakers Close": "After two presidencies marked by friction, if not outright hostility, between the White House and Congress, Mr. Obama has shown himself to be senator-in-chief, consulting closely with congressional leaders and committee chairmen at every turn. The approach has already sparked criticism even from some Democrats that Mr. Obama isn't forceful enough in leading the government. Republicans charge that his coziness with Democratic leaders has come at the expense of bipartisanship."
Washington Post's Alec MacGillis, "After Stimulus Battle, Liberals Press Obama": "As President Obama prepares to sign a $787 billion economic stimulus package today amid gales of Republican criticism of its cost, he is also facing quieter misgivings from liberal Democrats who say the bill does not go far enough -- and who are already looking ahead to future legislation that they hope will do more.
"Liberal Democrats recognize the package's scale and accomplishment, and they have defended it against Republican attacks. But they also wonder whether Obama could have used the opportunity of a large congressional majority and a moment of economic emergency to pass a bigger package, with a better chance of boosting the economy and with more of his priorities intact.
"As Obama moves on to issues such as health care and energy, liberals are debating how to ensure that the stimulus outcome does not define the outer boundaries of his agenda, so that future legislation is not limited, as the stimulus was, by the demands of centrist senators such as Susan Collins (R-Maine), Olympia J. Snowe (R-Maine) and Ben Nelson (D-Neb.)."
4761667Politico's Patrick O'Connor and John Bresnahan, "Hoyer to Pelosi: Stand up to Senate": "House Majority Leader Steny H. Hoyer (D-Md.) is pushing Speaker Nancy Pelosi (D-Calif.) to take a harder line with the Senate after a trio of Republican senators forced Congress to trim billions from the $787 billion economic stimulus package. ...
"[A]fter last week's stimulus votes, Hoyer called on Senate Majority Leader Harry Reid (D-Nev.) to force Senate Republicans to mount actual filibusters if they want to stand in the way of bills 'so that the American people can see who's undermining action.'
"And in a private conversation with Pelosi, aides say Hoyer reminded the speaker that they'd talked previously about tolerating Senate strong-arming on the stimulus and on children's health insurance — two Democratic priorities — but then holding their own on future legislation. Pelosi expressed some agreement, aides said, and she has asked her staff to perform an after-action report about negotiations over the massive package of spending and tax cuts. But at the same time, Pelosi has voiced public sympathy for the plight Reid faces in the Senate; with just 58 members caucusing with the Democrats — 59 if Al Franken prevails in Minnesota — Reid is always going to need some Republican support to overcome GOP filibuster threats."
Associated Press' Patrick Walters, "Cities may have to wait longer for stimulus money": "Ever since Barack Obama was elected, Mayor Michael Nutter and his big-city counterparts nationwide have held out hope that a promised economic stimulus package would inject much-needed cash directly into their battered municipal budgets. But most of the funding in the $787 billion package approved by Congress is being filtered through federal, state and county programs — not directly to cities. That leaves Nutter and other city leaders worried about how much they will get — and how long it will take after Obama puts his signature on the stimulus bill."
Politico's David Rogers, "Obama plots huge railroad expansion": "The $787.2 billion economic recovery bill — to be signed by President Barack Obama on Tuesday — dedicates $8 billion to high-speed rail, most of which was added in the final closed-door bargaining at the instigation of White House chief of staff Rahm Emanuel. It's a sum that far surpasses anything before attempted in the United States — and more is coming. Administration officials told Politico that when Obama outlines his 2010 budget next week, it will ask for $1 billion more for high-speed rail in each of the next five years."
NY Times' Sam Dillon, "For Education Chief, Stimulus Means Power and Risk"
FINANCIAL BAILOUT
Wall Street Journal's Shefali Anand, "Treasury Pads Coffers in Bailout"
FOREIGN POLICY
Associated Press' Philip Elliott, "Obama returns to Washington, Afghan decision near": "President Barack Obama plans to make a decision soon about sending additional troops to Afghanistan, his chief spokesman said Monday. White House press secretary Robert Gibbs said the administration continues to review its policy toward Afghanistan, some seven years after U.S.-led forces toppled the Taliban-led government. Gibbs cautioned that no firm timetable had been set, nor had administration officials settled on how many — if any — new troops would be involved."
4804423LA Times' Paul Richter, "North Korea greets Hillary Clinton with threat": "North Korea threatened Monday to test a missile capable of reaching the United States, as Secretary of State Hillary Rodham Clinton began consultations with regional leaders on the security threat from the reclusive state, the global economic crisis and other issues. In an apparent attempt to command attention, North Korea hinted that it will test-launch a Taepodong 2 missile from its eastern coast. ... At an appearance today with Japanese Foreign Minister Hirofumi Nakasone, Clinton responded that a missile launch by Pyongyang 'would be very unhelpful in moving our relationship forward.'"
Washington Post's Glenn Kessler, "Clinton, in Tokyo, Warns N. Korea on Missile Launch"
"The summit, set for Feb. 24, provides Aso with a foreign- policy victory after his public support tumbled below 10 percent and ruling party colleagues cast doubt on his leadership ability ahead of national elections. Clinton chose Japan as the initial stop on her first overseas tour, which will also include meetings in Jakarta, Seoul and Beijing."
SEN. ROLAND BURRIS
4804552Chicago Tribune's Rick Pearson, John Chase and Ray Long, "Burris inquiries urged": "Illinois Atty. Gen. Lisa Madigan led a growing chorus of Democratic officials Monday calling for a deeper investigation of U.S. Sen. Roland Burris' explanation about how he was appointed by now-ousted Gov. Rod Blagojevich.
"Burris has maintained there was nothing inconsistent between his testimony before state lawmakers and a recently filed affidavit outlining more extensive contact with Blagojevich insiders than he had previously disclosed. But Illinois Republicans pressed their call for a perjury investigation by the county prosecutor in Springfield and on Monday, Democrats expressed increasing discomfort over Burris' evolving explanation of efforts to get the seat."
Wall Street Journal's Douglas Belkin and Greg Hitt, "Burris Defends Actions, Fights Calls to Leave Senate": "With Congress out of session, how the Senate might act is an open question. As a practical matter, a threshold issue is whether the Senate would have standing to act against Mr. Burris, and whether the actions at issue took place before he was sworn into office. If the Senate does have standing to act, the issue could be referred to the Senate Select Committee on Ethics, which would review any complaint that might be filed."
Politico's Manu Raju, "Dems hold breath on Burris": "[N]ow that Burris finds himself in the midst of the Blagojevich controversy — he's admitted he had contacts with the governor's brother that he didn't acknowledge before — Senate Democrats are once again needing a fix from Illinois.
"Convinced that Burris would be a weak candidate if he runs for election in 2010, some Washington Democrats — and some back home in Illinois — hope that an investigation in Illinois will either force Burris to resign or inflict such damage that he can't mount a serious run when the time comes.
"A spokesman for Senate Majority Leader Harry Reid (D-Nev.) said Reid is reviewing a new affidavit from Burris in which the freshman senator admits to the previously undisclosed conversations with Blagojevich's brother. But, the spokesman suggested, Reid won't do anything about Burris pending 'any action by Illinois legislative leaders after they review the matter.'
"Although Burris has insisted that his new affidavit is consistent with his previous statements, neither Reid nor any other Democratic leader in Washington has come to his defense in the days since the affidavit was made public. The silence, says one Chicago Democratic insider, 'speaks volumes about the job [Burris] has in front of him to convince his own party to nominate him.'
Chicago Sun-Times' Maureen O'Donnell and Natasha Korecki, "Is it perjury or not?": "Roland Burris has given three different statements at three different times about the contact he had with representatives of Rod Blagojevich before the governor appointed him to the U.S. Senate seat vacated by President Obama. Burris' most recent -- and detailed -- affidavit amends his previous testimony.
"He disclosed he was hit up for campaign cash and fund-raising by the governor's brother, Robert. (Burris said he refused, to avoid the appearance of trading money for a Senate seat.) Former federal prosecutor Patrick Collins, appointed to head a state ethics commission by Gov. Quinn, said the events warrant a review by a prosecutor.
"He said a key question would be what prompted Burris to amend his affidavit. If a probe occurred, a prosecutor could ask U.S. Attorney Patrick Fitzgerald for recordings between Burris and Robert Blagojevich, Collins said: 'I don't see how this doesn't get a serious look by an experienced, independent prosecutor.' Former Cook County prosecutor Irv Miller said he wouldn't approve perjury charges if the case were brought to him. There may be inconsistencies in Burris' statements, but key questions put to Burris by a House impeachment panel were asked in meandering fashion, rather than the specific, 'Isn't-it-a-fact?' style of a prosecutor, he said. 'You need a specific question and a specific answer,' Miller said. 'They couldn't prove it beyond a reasonable doubt.'"
MINNESOTA SENATE RECOUNT
Minneapolis Star Tribune's Pat Doyle, "Coleman asks court to reconsider ruling on rejected ballots"
ALSO:
NY Times' Scott Shane, "Justice Dept. to Critique Interrogation Methods Backed by Bush Team": "The Justice Department's ethics office is in the final stages of a report that sharply criticizes Bush administration lawyers who wrote legal opinions justifying waterboarding and other harsh interrogation methods, according to department and Congressional officials. The report, by H. Marshall Jarrett, who leads the department's Office of Professional Responsibility, would be the first accounting for legal advice that endorsed interrogation techniques historically considered by the United States and other Western countries to be illegal torture. Attorney General Eric H. Holder Jr. will have to decide whether to approve the findings and whether to make them public."
Washington Post's Carrie Johnson, "Senators Seek Ethics Findings": "Two Senate Democrats urged the Justice Department yesterday to quickly release its findings of an ethics investigation into legal opinions under President George W. Bush that paved the way for waterboarding prisoners and other harsh interrogation practices."
Associated Press' Michael J. Sniffen, "Despite Obama pledge, Justice defends Bush secrets": "Despite President Obama's promise of more open government, the Justice Department is resisting pressure to release documents the Bush administration kept secret about domestic wiretapping, data collection on travelers and U.S. citizens, and interrogation of suspected terrorists. In half a dozen lawsuits, Justice lawyers are defending Bush administration decisions to withhold records from the public.
"They have opposed formal motions or spurned out-of-court offers to merely delay these cases until the new administration rewrites Freedom of Information Act guidelines and decides whether the new rules might allow the public to see more.
"In only one case has the Justice Department agreed to suspend a FOIA lawsuit until the disputed documents can be re-evaluated under the yet-to-be-written guidelines. That case involves negotiations on an anti-counterfeiting treaty, not the more controversial, secret anti-terrorism tactics that spawned the other lawsuits as well as Obama's promises of greater openness."
NY Times' Eric Schmitt, "Re-evaluation of National Security Ordered": "The homeland security secretary, Janet Napolitano, is re-evaluating the largest federal program for testing the country's ability to respond to terrorist attacks, one of several Bush administration initiatives she has ordered to come under review.
"As governor of Arizona, Ms. Napolitano sent a searing two-page letter to her predecessor as secretary, Michael Chertoff, complaining that a $25 million national exercise in October 2007, which she and 23,000 other federal, state and local emergency workers participated in, was too expensive, too long in planning and 'too removed from a real-world scenario.'
"Now, in her first weeks as head of the Homeland Security Department, Ms. Napolitano has ordered a review of that program and several others, including cybersecurity, a strategy for protecting the border with Canada, and the vulnerability of power plants and other critical infrastructure.
"The directives implicitly raise questions about how well the Bush administration prepared the nation's defenses against a terrorist attack. But they also reflect what homeland security analysts say is Ms. Napolitano's desire to apply her practical experiences as a border-state governor to several important homeland security policies."
Wall Street Journal's Elizabeth Williamson, "Congressional Junkets Defended as Work-Based": "Republican members of the House of Representatives took a break earlier this month from bashing the Democrats' $800 billion stimulus bill and journeyed here to the Homestead Resort, an 18th-century mountain spa, where the diversions include golf, skiing, skeet shooting and falconry. Republican lawmakers paid for their travel and lodging, mostly with campaign funds. Staffers' bills and the rest of the tab was picked up by the Congressional Institute, which is funded by 54 'patrons,' including General Electric Co. and the National Association of Home Builders. About 45 lobbyists attended a dinner on opening night. ...
"A few days later, as the stimulus bill inched forward, Democrats held a two-day issues conference at the Kingsmill Resort & Spa in Williamsburg, Va., a property owned by brewer Anheuser Bush-Inbev NV and whose spa is known for its hops and chamomile massage. Taxpayers helped foot the bill, which was paid partly with money appropriated for congressional office expenses. ... The sour economy and public outrage have put a damper on corporate junkets to posh resorts, especially for banks that took taxpayers' money as part of the financial rescue plan. But as they fume over inflated salaries and lavish travel by executives whose companies are on the federal dole, members of Congress are getting a raise, and making travel plans."
"Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects. ...
"The roots of California's inability to address its budget woes are statutory and political. The state, unlike most others, requires a two-thirds majority vote in the Legislature to pass budgets and tax increases. And its process for creating voter initiatives hamstrings the budget process by directing money for some programs while depriving others of cash. In a Legislature dominated by Democrats, some of whom lean far to the left, leaders have been unable to gather enough support from Republican lawmakers, who tend on average to be more conservative than the majority of California's Republican voters and have unequivocally opposed all tax increases.
"And then there is Governor Schwarzenegger, whose budget woes far outweigh those of his predecessor, Gray Davis, whom he drummed from office in a 2003 recall that stemmed from the state's fiscal problems at the time. The governor has failed to muster votes among lawmakers in his own party, whom he often opposes on ideological grounds, resulting in more scorn from Democrats.
"Furthermore, Republican leaders in the Senate and the Assembly who have agreed to get on board with a plan have been unable to persuade a few key lawmakers to join them. The package needs at least three Republican votes in each house, to join with the 51 Democrats in the Assembly and the 24 Democrats in the Senate. For months Republicans have vowed not to raise taxes, which in California means no increase in either the sales, gas or personal income tax."