Politics Today: Meeting with the Financial "Fat Cats"
Politics Today is CBSNews.com's inside look at the key stories driving the day in politics, written by CBS News Political Director Steve Chaggaris:
** Appealing to bank executives for more lending...
** Lieberman and Nelson foil the Dems' latest health care plans...
** Obama defends his timetable for Afghanistan...
"Mr. Obama will meet with some of the country's top bankers, including Goldman Sachs Group Inc.'s Lloyd Blankfein, J.P. Morgan Chase & Co.'s Jamie Dimon, and Bank of America Corp.'s Ken Lewis. The meeting had been expected to be cordial, but recent rhetoric out of the White House suggested that the administration could take a tough stance."
"Administration officials described the meeting as a continuation of discussions the president initiated early in his tenure and the latest push for lenders to take greater responsibility as the nation combats an economic crisis that began on Wall Street," add the AP's Philip Elliott and Daniel Wagner.
"Specifically: Wall Street should fall in line with Obama and back a proposal for a consumer protection agency that cleared the House last week."
Politico's Mike Allen and Eamon Javers: "Facing White House pressure to increase lending, bank CEOs plan to tell President Barack Obama in a meeting on Monday that they are ready to 'step up' and take additional steps to promote economic recovery, industry officials tell Politico.
"'Every CEO that's participating is ready to a) listen and b) step up,' said an industry executive familiar with plans for the meeting. 'Everybody's goal is to come out of the meeting with actionable, constructive and measurable things that the industry can do to spur recovery.'
"Obama will take a measured tone with the bankers, telling them he wants to have a candid and constructive conversation and doesn't want to vilify anyone, according to administration officials. But the president will tell the banks that they have a special responsibility to help spur recovery because of the extraordinary bailout assistance they received last year."
"After stating that the financial crisis was 'caused in part by completely irresponsible actions on Wall Street,' Mr. Obama suggested that some banks paid TARP bailout money back to the government specifically to free themselves from government-mandated constraints on executive compensation.
"'I think in some cases that was a motivation,' said Mr. Obama. 'Which I think tells me that the people on Wall Street still don't get it. They don't get it. They're still puzzled, why is it that people are mad at the banks?'"
"Obama convened a similar meeting with bank executives in March, and the need for a replay highlights the lack of progress in the interim," writes the Washington Post's Binyamin Applebaum. "The banking industry has reduced lending for five consecutive quarters, even as it has regained profitability thanks to vast public aid.
"The administration's success in rescuing banks stands in starker contrast every day with the financial problems of many Americans, most of all the lack of new jobs, and Democrats made restless by the disparity are mounting pressure on the White House."
BREAKING: "Citigroup Inc. reached an accord with the Treasury Department and regulators to repay $20 billion of bailout funds," reports Bloomberg News' Bradley Keoun.
"Citigroup will sell $20.5 billion of capital and debt, the New York-based bank said in a statement today. The bank will sell $17 billion of common stock, with an over-allotment option of $2.55 billion, and $3.5 billion of tangible equity units. The U.S. Treasury will concurrently sell as much as $5 billion of common stock it holds.
"Chief Executive Officer Vikram Pandit has pressed for an exit from the Troubled Asset Relief Program to avoid being the only large bank left on 'exceptional assistance,' a Treasury designation reserved for companies including American International Group Inc. and General Motors Corp. that are surviving on taxpayer aid. Bank of America Corp. exited last week after paying back $45 billion of bailout funds."
Treasury Department statement: "We are pleased that Citigroup is moving ahead with plans to pay the taxpayers back. Treasury has repeatedly stated that the United States never intended to be a long term shareholder in private companies. As banks replace Treasury investments with private capital, confidence in the financial system increases, government's unprecedented involvement in the private sector diminishes, and taxpayers are made whole.
"While much work lies ahead to improve lending and spur job creation, today's announcement by Citigroup takes us another step in the right direction. In conjunction with Citigroup's announced equity offering, Treasury intends to sell up to $5 billion of its common equity position in Citigroup through a secondary offering. Treasury expects to sell the remainder of its shares in an orderly fashion within six-12 months from today subject to an initial 45-day 'lock-up' period after the secondary offering.
"We also welcome Citigroup's continued commitment to strengthen lending and their on-going efforts to modify mortgages and keep more families in their homes."
"At the same time, Christina Romer, chairman of the White House Council of Economic Advisers, said she would not consider the recession truly at an end until employment returns to levels last seen at the end of 2007 when the recession began.
"Her view was technically at odds with that of Lawrence Summers, director of the White House National Economic Council, who said third quarter growth of the gross domestic product — the measure of economic activity — marked a statistical end to the recession.
"But the pair did agree with forecasts that the economy would begin producing more jobs in the spring, a trend that could lower the nation's jobless rate from 10 percent."
Romer's and Summers' "comments came as the White House and Congress work out the details of a job-creation bill," adds the Wall Street Journal's Elizabeth Williamson. "Many Republicans and some Democrats have voiced growing concern over the federal deficit, which stood at $1.4 trillion for the year ended Sept. 30.
"Congress also is debating this month whether to raise the $12.1 trillion ceiling on the federal debt to ensure the U.S. doesn't default. Toward that end, some moderate Democrats in the Senate said Sunday that they were considering supporting a short-term increase in the government's borrowing authority, a move that could defuse a looming conflict on the issue at least until spring."
Bloomberg News' Brian Faler, "Congress Sends Obama Measure With 12 percent Average Budget Increases": "Congress gave final approval to a $450 billion spending bill for government agencies providing an average 12 percent budget increase for many programs amid what polls show is mounting public concern over federal deficits.
"The Senate voted 57 to 35 yesterday to forward the measure to President Barack Obama. The measure combines six annual appropriations bills needed to fund federal agencies for the fiscal year that began Oct. 1. The House last week approved the 1,092-page bill, along with 1,351 pages of explanatory documents, which would replace a stopgap measure funding most agencies through Dec. 18.
"Republicans, criticized as spendthrifts during former President George W. Bush's administration, attacked the increases in the bill drafted by Democrats, forcing the Senate to debate the matter into the weekend."
NY Times' John Harwood, "Create Jobs? Reduce Deficit? Obama's Political Quandary Grows"
"Senate Majority Leader Harry Reid has been courting Sens. Ben Nelson and Joe Lieberman, but remarks by both men on Sunday's political-talk programs show that they remain unpersuaded.
Mr. Lieberman, Connecticut independent, said a provision allowing people aged 55 to 64 to buy into Medicare, which was added to the bill to substitute for a 'public option' insurance plan, is still a bad deal that adds to the federal budget deficit.
"'The opposition to it has been growing as the week has gone on. And though I don't know exactly what's in it, from what I hear, I certainly would have a hard time voting for it because it has some of the same infirmities that the public option did,' Mr. Lieberman said on CBS' 'Face the Nation.' 'It will add taxpayer costs. It will add to the deficit. It's unnecessary.'..
"Mr. Nelson, Nebraska Democrat, also criticized the Medicare proposal as 'the forerunner of single-payer, the ultimate single-payer plan, maybe even more directly than the public option,' which would allow a government-supported insurance plan to compete with the private sector."
"Senate Democratic leaders, including Mr. Reid and Senator Charles E. Schumer of New York, said they had been mindful of Mr. Lieberman's concerns in the last 10 days and were surprised when he assailed major provisions of the bill on television Sunday," report the NY Times' Robert Pear and David M. Herszenhorn. "He reiterated his objections in a private meeting with Mr. Reid.
"A Senate Democratic aide, perplexed by Mr. Lieberman's stance, said, 'It was a total flip-flop, and leaves us in a predicament as to what to do.'
"Democrats are desperately trying to round up 60 votes and conclude Senate debate on the health care bill before Christmas.
"Mr. Reid could not immediately figure out how to achieve that goal at a meeting he held Sunday with senior Democratic senators and White House officials, including Mr. Obama's chief of staff, Rahm Emanuel, according to Senate Democratic aides."
"'I think it's going to pass out of the Senate before Christmas,' Mr. Obama said in the interview.
In order for the Senate to pass it by Christmas, reports Politico's Chris Frates, "Democrats must work out compromises on long-standing problems like the public option and abortion while dealing with more recent intraparty spats, like whether to allow consumers to buy Food and Drug Administration-approved drugs from other countries, an issue that stalled last week and remains stuck on the Senate floor.
"Most insiders agree that Democrats have until Thursday to work out their differences if they want to pass a bill by Dec. 23. It will take at least five or six days after Democrats move to end debate before they can vote on the bill. Democrats expect to begin the endgame early this week and still sound optimistic that they can get it done."
"The next 48 hours will be critical to the fate of health-care reform in the Senate, as Democratic leaders struggle to settle disputes that stand in the way of holding a final vote this year on the massive package," adds the Washington Post's Shailagh Murray.
"By mid-week, Senate Majority Leader Harry M. Reid (D-Nev.) must begin the process of ending debate on the $848 billion bill or risk missing his deadline of final passage by Christmas, pushing the contentious health-care debate into early 2010.
"Reid must secure 60 votes to defeat the series of procedural votes that Democrats expect their GOP opponents will force. But with little time to spare, he is still struggling to convert a handful of holdouts.
"Most of the undecided lawmakers have refused to commit until the Congressional Budget Office delivers a cost analysis on the coverage alternatives offered last week by a group of five liberal and five conservative Democrats to replace the government insurance option originally included in the legislation."
LA Times' James Oliphant and Kim Geiger, "A look at the Senate's healthcare compromise"
NY Times' Robert Pear, "Long-Term Care Is Latest Issue in Health Care Debate"
USA Today's Richard Wolf, "Medicare 'buy-in': A bargain or burden?"
NY Times' Adam Nagourney, "McCain, Distanced from Race, Raises Senate Voice"
5869074AFGHANISTAN: "President Obama said in a taped interview that military officials should know by the end of December 2010 whether a strategy to secure population centers in Afghanistan is meeting its objectives," writes the NY Times' Derrick Henry.
"'If the approach that's been recommended doesn't work, we're going to be changing approaches,' Mr. Obama said in the interview that aired on CBS's '60 Minutes' Sunday night…
"Under Mr. Obama's strategy, the additional 30,000 troops he added to forces in Afghanistan would begin withdrawing in July 2011 as part of a transition phase…
"Mr. Obama said that he had set the 2011 deadline to put Afghan officials on notice that the United States does not intend to carry the entire burden of securing the nation.
"'That's not what the American people signed off for when they went into Afghanistan in 2001,' Mr. Obama said. "They signed up to go after Al Qaeda.'
CBS News "60 Minutes", "Obama Defends Afghanistan Timetable Plan"
Washington Post's Griff White, "Afghan promises to insurgents often empty"
Meantime, "Senior U.S. officials are pushing to expand CIA drone strikes beyond Pakistan's tribal region and into a major city in an attempt to pressure the Pakistani government to pursue Taliban leaders based in Quetta," report the LA Times' Greg Miller and Julian E. Barnes.
"The proposal has opened a contentious new front in the clandestine war. The prospect of Predator aircraft strikes in Quetta, a sprawling city, signals a new U.S. resolve to decapitate the Taliban. But it also risks rupturing Washington's relationship with Islamabad.
"The concern has created tension among Obama administration officials over whether unmanned aircraft strikes in a city of 850,000 are a realistic option. Proponents, including some military leaders, argue that attacking the Taliban in Quetta -- or at least threatening to do so -- is crucial to the success of the revised war strategy President Obama unveiled last week.
"'If we don't do this -- at least have a real discussion of it -- Pakistan might not think we are serious,' said a senior U.S. official involved in war planning. 'What the Pakistanis have to do is tell the Taliban that there is too much pressure from the U.S.; we can't allow you to have sanctuary inside Pakistan anymore.'"
"President Barack Obama's negotiators at the United Nations meetings for a new climate treaty instead are focused mainly on short-term finance through 2012, the official said. The U.S. and European Union have called for $10 billion a year to assist developing nations through that period. The White House has pledged to pay its 'fair share.'
"Long-term aid for the developing nations most vulnerable to rising temperatures and sea levels is one of the biggest sticking points in the talks set to wrap up Dec. 18. Negotiators last week weren't able to agree on the issue, leaving the final resolution for ministers and heads of government who will arrive this week, including Obama and Chinese Premier Wen Jiabao."
Politico's Glenn Thrush, "Arrests, rattled nerves in Copenhagen"
LA Times' Jim Tankersley, "Climate negotiators eye the 'forgotten 50%' of greenhouse gas pollutants"
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