Morning Bulletin – Wednesday, March 18, 2009
A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:
Mr. Obama's westward trip comes as the latest CBS News poll shows his approval rating holding steady at 62 percent.
However, some cracks are appearing: his approval number is dropping in Ohio – from 67 percent in early February to 57percent now, according to a Quinnipiac University poll out this morning.
"The bonuses that the American International Group awarded last week were paid to 418 employees and included $33.6 million for 52 people who have left the failed insurance conglomerate, according to the office of the New York attorney general," report the New York Times' Jackie Calmes and Louise Story.
"Those payouts are expected to come under intense scrutiny Wednesday as Edward Liddy, the chief executive of A.I.G, testifies before Congress amid mounting public outrage about the bonuses, which were paid out after nearly $200 billion in taxpayer funds were pumped into the company.
"The company paid the bonuses, including more than $1 million each to 73 people, to almost all of the employees in the financial products unit responsible for creating the exotic derivatives that caused A.I.G.'s near collapse and started the government rescue to avoid a global financial crisis. The information adds to the firestorm confronting the Obama administration and Congress since the weekend disclosure that A.I.G., almost 80 percent owned by the government, paid out $165 million in bonuses."
"The Obama administration said Tuesday it would seek to recoup from American International Group Inc. the $165 million in bonuses paid to employees of the bailed-out insurance titan as it tried to contain a national furor over the payments," add the Wall Street Journal's Jonathan Weisman, Naftali Bendavid and Deborah Solomon.
4842248"White House officials are looking to use an executive-pay provision inserted into the recently passed stimulus law. The administration has seized on language that would allow the Treasury secretary to claw back payments if they were 'inconsistent with the purpose' of the Troubled Asset Relief Program or 'otherwise contrary to public interest.'
"In a letter to Congress Tuesday, Treasury Secretary Timothy Geithner said the Treasury planned to use the law to deduct the cost of the bonuses from the government's pending $30 billion cash infusion, and will also extract additional penalties from AIG operating funds. With angry emails and letters pouring into Congress, a number of legislators had earlier expressed support for a special tax on the so-called retention bonuses paid to 73 AIG employees. Recipients of the funds, at AIG's financial-products subsidiary, include 11 people who no longer work for the company."
"Senior White House officials said last night that President Obama did not learn that bonuses worth $165 million were to be paid to executives of American International Group until Thursday, one day before they were issued and two days after his Treasury secretary was informed that the payments were going forward," write the Washington Post's Shalaigh Murray, Paul Kane and Michael D. Shear.
"Obama aides defended Timothy F. Geithner's handling of the situation yesterday, with White House press secretary Robert Gibbs saying the president has 'complete confidence' in the Treasury chief."
4841009However, the Associated Press' Laurie Kellman writes that the AIG bonus flap has put a "cloud" over Geithner.
"For the time being, Geithner, formerly president of the New York Federal Reserve Bank, remains a key player in the gargantuan task of slowing the worst economic downturn since the 1930s. But his future could soon be as murky as the economy's. His short tenure has been shaky at a time when the new president and the Democratic-led Congress are trying to project confidence to the markets and the nation. When asked, Democrats issued statements of support for Geithner that ranged from concise to vague, but none called for his resignation."
In his letter to Senate Majority Leader Harry Reid, Geithner acknowledged "that there is considerable outrage in the Senate, as there is throughout the country, about the bonuses" and he promised "We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of retention rewards just paid ... In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments."
BUDGET: Mr. Obama's trip to California comes at a time when the debate over his budget blueprint is gearing up, as evidenced by the president's comments Tuesday.
"The White House has begun a full frontal assault to get President Obama's first budget through Congress. During an appearance on Tuesday at the Eisenhower Executive Office Building, Mr. Obama took a swipe at Republican critics of his $3.6 trillion budget and its agenda for health care, energy, taxes and economic recovery," reports the New York Times' Helene Cooper and Carl Hulse.
"'If there are members of Congress who object to specific policies and proposals in this budget, then I ask them to be ready and willing to propose constructive, alternative solutions,' Mr. Obama said.
"The state that is home to one in eight Americans has been ravaged by recession, a housing meltdown and double-digit unemployment," adds the Associated Press' Michael R. Blood.
"The public is seething over $165 million in post-bailout bonuses paid to executives at American International Group Inc. — an issue certain to overshadow the two-day visit. His first appearance as president in a state that was a getaway for his predecessors could instead become a political test for Obama, whose administration has been trying to find its voice on the economy. His schedule includes a stop on Jay Leno's stage in Burbank after town hall-style meetings in Orange County on Wednesday and downtown Los Angeles on Thursday."
Meantime, the Washington Post's Lori Montgomery reports, "Senior members of the Obama administration are pressing lawmakers to use a shortcut to drive the president's signature initiatives on health care and energy through Congress without Republican votes, a move that many lawmakers say would fly in the face of President Obama's pledge to restore bipartisanship to Washington.
"Republicans are howling about the proposal to expand health coverage and tax greenhouse gas emissions without their input, warning that it could irrevocably damage relations with the new president. 'That would be the Chicago approach to governing: Strong-arm it through,' said Sen. Judd Gregg (R-N.H.), who briefly considered joining the Obama administration as commerce secretary. 'You're talking about the exact opposite of bipartisan. You're talking about running over the minority, putting them in cement and throwing them in the Chicago River.'
"The shortcut, known as 'budget reconciliation,' would allow Obama's health and energy proposals to be rolled into a bill that cannot be filibustered, meaning Democrats could push it through the Senate with 51 votes, instead of the usual 60. Presidents Ronald Reagan and Bill Clinton both used the tactic to win deficit-reduction packages, while George W. Bush used it to push through his signature tax cuts.
"Administration officials say they have not made a final decision about whether to use the maneuver. But White House budget director Peter R. Orszag said yesterday that it is 'premature to be taking it off the table.' Meanwhile, key administration officials, including White House Chief of Staff Rahm Emanuel, are pushing for reconciliation instructions in the budget proposal that Democrats are scheduled to unveil next week, congressional sources said."
The Politico's David Rogers reports that Capitol Hill is warning the president to change his budget plans, "Senate Budget Committee Chairman Kent Conrad warned Tuesday that significant 'adjustments' are needed in the White House's spending plans and said he will oppose any effort to employ special deficit-reduction procedures to expedite the administration's health care and climate-change initiatives.
"The North Dakota Democrat said he is committed to helping President Barack Obama on both fronts. But his comments reflect the steep climb ahead for the new administration as the House and Senate Budget Committees prepare to take up Obama's proposals next week. New economic estimates this week from the Congressional Budget Office are expected to aggravate the deficit picture already facing lawmakers, especially for 2009. 'I'm expecting significant change. It is going to require adjustments,' Conrad said after seeing some of the preliminary numbers. 'I think all of us have a very good sense that they will be more adverse.'"
The Times' Jeff Zeleny looks at the campaign-style tactics Mr. Obama is employing as he tries to build support for his budget: "Anyone who donated $5 (or significantly more), knocked on doors or even ordered a T-shirt from the Obama store likely received an e-mail in recent days to sign a pledge supporting the president's economic plan and domestic agenda for education, health care and energy.
"But rallying behind the budget is hardly as captivating as campaigning for a candidate, which raises questions about the effectiveness of the effort. 'There will be some trial and error,' said David Plouffe, the campaign manager for Mr. Obama who is helping oversee the Organizing for America project. 'It is not a political campaign, where the ultimate goal is one 'yes' vote on Election Day,' he added, 'but simply the conversation — making sure these important debates do not happen solely on cable TV among Washington politicians, but are occurring on doorsteps and diners.'"
BUSH'S FIRST POST-PRESIDENCY SPEECH
"Former President George W. Bush, making his first public speech since leaving office in January, says he wants Barack Obama to succeed and that it's 'essential' to support the new leader," reports the Associated Press' Rob Gilles. "Bush declined to critique the Obama administration in Tuesday's speech, saying the new president has enough critics and that he 'deserves my silence.'"
Politico's Mike Allen has more on Mr. Bush's remarks:
LATER THIS WEEK: President Obama will be a guest on Jay Leno on Thursday night.
AIG FALLOUT
Time Magazine's Jay Newton-Small, "The AIG Bonuses: Getting Mad and Getting Even"
Washington Post's David Cho and Binyamin Applebaum, "AIG Firestorm Raises Alarm For Other Firms"
NY Times' David Leonhardt, "Paying Workers to Fix Their Own Mess"
The Hill's Ian Swanson, "AIG staff: We deserve this money"
Wall Street Journal's Sudeep Reddy and Naftali Bendavid, "AIG Bonuses Spur Taxpayer Outrage"
LA Times' Jim Puzzanghera and Janet Hook, "AIG bonus flap may cost recipients"
BUDGET
Politico's Ben Smith and Manu Raju, "Some Dems want brake in Obama plans": "There is rising doubt among Democrats — particularly moderates already concerned about the big costs and deficits called for in Obama's budget — that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda."
Wall Street Journal's Corey Boles and Martin Vaughan, "White House Official Boosts Cap and Trade Revenue Estimate": "A top White House economic adviser told Senate staff a proposed cap and trade system could raise 'two-to-three times' the administration's existing $646 billion revenue estimate, according to five people at the meeting. This could mean the cap and trade system could actually generate between roughly $1.3 trillion and $1.9 trillion between fiscal years 2012 and 2019. Jason Furman, deputy director of the National Economic Council, offered the estimate at a Feb. 26 meeting on Capitol Hill with a bipartisan group of staffers, most of whom are attached to the Senate Finance Committee, according to five Senate aides who attended the meeting. They spoke on condition they wouldn't be identified by name."
NY Times' David M. Herszenhorn and Ron Nixon, "Old Problems Resurface in New Earmark Rules"
OBAMA ADMINISTRATION
CBS News' Brian Montopoli, "Obama Taps Moderate Judge, Brings ABA Back Into Fold"
NY Times' Katharine Q. Seelye, "An Official Is Reinstated, White House Announces"
NY Times' Jad Mouawad, "Obama Tries to Draw Up an Inclusive Energy Plan"
VETERANS' BENEFITS
Washington Post's Ann Scott Tyson, "Veterans Groups, Lawmakers Denounce Private Insurance Proposal"
The Hill's Roxana Tiron, "Emanuel to meet with veterans groups"
MINNESOTA SENATE RECOUNT
St. Paul Pioneer Press' Rachel E. Stassen-Berger, "Coleman, Franken go on a final ballot roundup"
Minneapolis Star Tribune's Pat Doyle, "If Franken wins, he wants Coleman to pay court costs, some lawyers' fees"
FUTURE RACES
Wall Street Journal's Kris Maher and Brody Mullins, "Unionizing Fight Focuses on 3 States": "The battle over a bill that would ease union organizing is zeroing in on lawmakers in three states -- Pennsylvania, Arkansas and Colorado. Business and labor are pressuring three key senators who are up for re-election in 2010, sparing little expense as they ratchet up television and radio ads, and recruit well-connected lobbyists."
San Francisco Chronicle's Carla Marinucci, "GOP turns on itself, risks losses in midterms"
2009 NY-20 Special Election: Politico's Andy Barr, "N.Y. race first test for GOP"
2010 PA Senate: The Hill's Aaron Blake, "Specter won't rule out run as an Independent"
2010 PA Senate: The Bulletin's Bradley Vasoli, "Democrats Are Courting Specter"
REPUBLICAN PARTY
NY Times' Adam Nagourney, "A Testing Time for R.N.C. Chief"
Anchorage Daily News' Sean Cockerham, "Palin PAC mistakenly confirms she'll keynote fundraiser"
ALSO:
Former RNC spokesman Alex Conant on "The 5 biggest myths about Obama": "1. Obama is bold. Actually, he is overly cautious. ... 2. Obama is a great communicator. Cut away the soaring rhetoric in his speeches, and the resulting policy statements are often vague, lawyerly and confusing. ... 3. Obamaland is a team of rivals. ... 4. Obama is smooth. Despite being deliberate, Obama is surprisingly gaffe-prone. ... 5. Obama has a good relationship with the media."
Politico's Nia-Malika Henderson and Carrie Budoff Brown, "A year after race speech, silence"
NY Times' Judy Battista, "Obama Names Steelers' Owner Ambassador to Ireland"
Pittsburgh Post-Gazette's Ed Bouchette, "Steelers to lose personal touch with Dan Rooney in Dublin"
CBS News' Mark Knoller, "Foreign Service Group Opposes Rooney Pick"
Politico's Victoria McGrane, "Congress to assist Madoff victims"
NY Times' Robert Pear, "Team Effort in the House to Overhaul Health Care"
LA Times' Peter Wallsten and David G. Savage, "Conservatives invoke Obama in Voting Rights Act challenge"