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Morning Bulletin – Friday, March 20, 2009

A roundup of news, schedules, and key stories from CBS News Political Director Steve Chaggaris:

(AP)
Fresh from a two-day California swing, President Obama's back in Washington and will speak to the National Conference of State Legislators at 12:35pm ET. He'll be joined by Vice President Joe Biden.

Later, Mr. Obama meets with Gov. Arnold Schwarzenegger, R-Calif., New York Mayor Michael Bloomberg and Gov. Ed Rendell, D-Pa., to talk about transportation infrastructure funding.

WEST COAST ROUNDUP: "He got caught in traffic on the 110. He bantered with Jay Leno. And he sought to reassure people worried about the sagging economy and the spiraling national debt," writes the Los Angeles Times' Peter Nicholas.

"President Obama ended a two-day swing through Southern California on Thursday, a trip that exposed him to both celebrity and everyday struggles. Like many people navigating the freeways at midday, he was briefly tied up in traffic, his motorcade wheezing along at 10 mph as he made his way from west of downtown Los Angeles to Burbank. But he also got to trade quips on 'The Tonight Show' with Leno, mixing a sober assessment of the AIG bonus scandal with details about his life inside the White House."

(AP Photo/Gerald Herbert)
"The appearance on 'The Tonight Show with Jay Leno' was itself a sign of just much the culture has changed in America, where comedy and politics often mix," the Wall Street Journal's Laura Meckler and Lauren A.E. Schuker point out.

"While late-night TV appearances are now standard operating procedure for presidential candidates, Mr. Obama was the first sitting president to appear on a late-night comedy show, NBC said. 'I hope my old social studies teacher is watching,' Mr. Leno said, marking the moment. 'The president of the United States is here. That's pretty cool.'"

However, "President Barack Obama might have rolled a gutter ball" last night, reports the Associated Press.

"Toward the end of the interview on Thursday, Obama told host Jay Leno he's been practicing at the White House's bowling alley but wasn't happy with his score of 129. Leno complimented Obama on the score, but the president quipped, 'It was like the Special Olympics or something,' which prompted laughter from the audience.

"Deputy Press Secretary Bill Burton said the president's offhand remark was not meant to disparage the Special Olympics, only to poke some fun at the commander-in-chief's bowling skills. 'He thinks that the Special Olympics are a wonderful program that gives an opportunity to shine to people with disabilities from around the world,' Burton told reporters flying back to Washington with Obama aboard Air Force One."

Otherwise, "Mr. Obama held his own with the comedian, countering Mr. Leno's thrusts about the executive bonuses at the American International Group by saying that 'the only place where I think this might work is Hollywood,'" reports the New York Times' Helene Cooper.

"Mr. Obama did not explicitly endorse the bill passed by the House on Thursday that would tax bonuses paid to those whose companies got large amounts of federal bailout money, saying 'the money's already gone out.' 'I think the best way to handle this is to make sure you've closed the door before the horse gets out of the barn,' he said. When Mr. Leno asked whether someone should go to jail for the economic debacle, Mr. Obama replied, 'Most of what got us into trouble was perfectly legal.'"

"In his appearance with Mr. Leno, Mr. Obama walked a tightrope between projecting good humor and projecting a presidential air. For instance, he looked taken aback when Mr. Leno joked that the president had laid the problems of the banking sector at the doorstep of the Treasury secretary, Timothy F. Geithner. 'I love how you say it's his problem,' Mr. Leno said.

"Mr. Obama stared at him for a few seconds, stone-faced. Then he broke into a laugh, as if finally getting the joke. 'All of this is my responsibility,' Mr. Obama said. 'I'm trying to break a pattern in Washington where everybody's always looking for someone to blame.' Mr. Obama's best line was a swipe at the Beltway crowd. 'In Washington, it's a little like 'American Idol,' except everybody is Simon Cowell,' he said, referring to the ornery British judge on the Fox program."

(AP)
AIG FALLOUT: So, who in government knew what and when about the AIG bonuses? The New York Times' Edmund L. Andrews and Jackie Calmes report, "Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight.

"Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off. Career staff officials at the Treasury, Fed and Federal Reserve Bank of New York exchanged e-mail messages about the A.I.G. bonus program as early as late February, according to a person familiar with the matter. A.I.G. itself revealed the bonus plan in regulatory filings last September.

"In November, when the bailout of A.I.G. was restructured, Treasury and Fed officials negotiated the terms under which A.I.G. could make the retention payments. And in December, Democratic lawmakers sought a hearing about the payments. ...

"A.I.G. executives have insisted that they informed the New York Fed about the bonus plan, and that they assumed the New York Fed was informing the Treasury. Treasury officials have suggested that the New York Fed and the Federal Reserve Board in Washington failed to alert the Treasury staff until March 5. And Fed officials said that they not only alerted the Treasury staff weeks earlier, but discussed the issue with them via e-mail. Despite the interagency discussions in February about A.I.G.'s ill-starred bonus plan, as well as Mr. Geithner's exchange on the matter in a hearing, Mr. Geithner continued to insist on Thursday that he had not really understood the magnitude of the bonuses until one week ago."

"'I was informed by my staff of the full scale of these specific things on Tuesday, March 10,' Mr. Geithner said in an interview with CNN on Thursday. 'As soon as I heard about the full scale of these things, we moved very actively to explore every possible avenue — legal avenue — to address this problem.'"

(APTN/White House handout)
IRAN: President Obama sent a videotaped message to Iranians this morning saying, "My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States, Iran and the international community. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect," he says in the video with Farsi subtitles. Today is the Iranian holiday Nowruz, or "new day," marking the first day of spring.

Full video here.

BUDGET: As Congress gears up for fights over Mr. Obama's budget proposal, the Los Angeles Times' Janet Hook reports that his budget "faces new hurdles."

"The chairman of the Senate Budget Committee on Thursday projected deficits far higher than the Obama administration had calculated, possibly as much as $1.6 trillion higher over the next 10 years.

"The nonpartisan Congressional Budget Office is expected to issue a similar assessment today. That bad news, combined with other recent developments, portends a rocky road for the Obama budget, which was initially hailed by congressional Democrats for promoting such liberal priorities as expanded access to health insurance and curbs on global warming.

"In the three weeks since the budget was unveiled, fiscally conservative Democrats have raised concerns about proposed spending increases. Leaders of the House and Senate tax-writing committees have criticized some of Obama's proposed tax increases on wealthier Americans. And influential Democrats are backing away from using a legislative shortcut that may be Obama's best hope for passing his far-reaching health and energy policies."

To help fight the budget fight, the president has dusted off what brought him success in November – his campaign tactics – reports the Associated Press' Philip Elliot.

(AP Photo/Gerald Herbert)
"Turning to his vast political network for the first time since the November election, President Barack Obama is asking his supporters to use election-style tactics to help him push his $3.6 trillion budget proposal. Obama turned to his list of names — it numbers almost 14 million — to try to overwhelm Capitol Hill with phone calls and other direct contact with lawmakers, a test of how well his grass-roots network might be used as a tool in running the country. At the same time, he went on the stump in California and on television with the same style and fervor that earned him the presidency. At stake: a federal budget carrying the bulk of Obama's campaign promises and, politically, the enthusiasm that energizes his online community."

ALSO TODAY: At 10:30am ET, First Lady Michelle Obama plants a vegetable garden on the South Lawn, the first since Eleanor Roosevelt's garden during World War II, per the New York Times.

Vice President Joe Biden swears in Ron Kirk as U.S. Trade Representative at Noon ET.

CBSNews.com's Washington Unplugged features an interview with White House economic adviser Austan Goolsbee. Watch here at 2pm ET:

COMING UP: Mr. Obama sits down with CBS' "60 Minutes"; that interview will air Sunday night. Next week, the president will hold another prime time news conference on Tuesday at 8 p.m. ET. Also, Treasury Secretary Geithner will testify before the House Financial Services Committee on Tuesday and Thursday.

AIG FALLOUT

Associated Press' Stephen Ohlemacher, "House passes bill taxing AIG and other bonuses"

NY Times' Lynnley Browning, "A.I.G. Sues U.S. for Return of $306 Million in Tax Payments"

NY Times' James Barron and Russ Buettner, "Scorn Trails A.I.G. Executives, Even in Their Driveways"

BUDGET / STIMULUS

Anchorage Daily News' Sean Cockerham, "Palin rejects over 30% of stimulus money": "Gov. Sarah Palin is refusing to accept more than 30 percent of the federal economic stimulus money being offered to Alaska, including dollars for schools, energy assistance and social services. The news Thursday drew anger from those who accused Palin of putting her national political aspirations ahead of the state's interests, and admiration from others who say she has courage to turn down money that would expand government. The state Legislature will have an opportunity to override her decision."

Washington Post's Philip Rucker, "Beefy Resume for a Giant Job: Policing Stimulus Spending"

LA Times' Ken Bensinger, "Bailout for car parts makers a hopeful sign for Detroit"

HEALTH CARE

(AP Photo/David Zalubowski)
Tom Daschle, who withdrew from consideration as Health and Human Services Secretary earlier this year, writes an op-ed about health care reform in today's Washington Post: "It was flattering to hear people say that I was somehow essential to health reform. But I always knew that wasn't true. Yes, it is disappointing that I will not be inside the administration, pushing for health reform. But that doesn't mean I won't be pushing for it.

"The people who will decide whether reform happens are the ones in that report. They're in our firehouses and community centers and living rooms. They're also the people who decide elections. That's why smart politicians should listen to these voices, not to the worn-out slogans and scare lines of old Washington debates. These Americans are telling us we can't wait any longer: The time for health-care reform is now."

Washington Post's Lori Montgomery and Ceci Connolly, "GOP Pressed on Health Care": "House Democrats, in consultation with the White House, will give Republican lawmakers until September to reach a compromise on President Obama's signature health-care initiative -- otherwise, they will use a shortcut to move the measure through Congress without Republican votes."

Wall Street Journal's Jonathan Weisman and John D. McKinnon, "Democrats Angle for Health-Care Edge"

Boston Globe's Foon Rhee, "Harvard prof will head health technology effort"

FOREIGN POLICY

Washington Post's Glenn Kessler, "Campaign Vow to Call Armenians' Deaths "Genocide" to Be Tested"

Wall Street Journal's Matthew Rosenberg, "U.S. Courts Former Warlords in Its Bid for Afghan Stability"

The Hill's Jordy Yager, "Pelosi urges Obama to step up aid to battle Mexican drug cartels"

FUTURE RACES

NY-20 Special Election (3/31/09): Oneonta Daily Star's Tom Grace, "Tedisco: I'm focused on local interests"

2010 CO Senate: Politico's Josh Kraushaar, "Colorado GOP is slow off the mark"

2010 CT Senate: CQ Politics' Emily Cadei, "Dodd May Be Dodging GOP Bullets in 2010 Race"

2010 CT Senate: NY Times' Raymond Hernandez and Thomas Kaplan, "Dodd Draws Voters' Ire for His Bonus Role"

2010 CT Senate: Associated Press' Andrew Miga, "Dodd's political stock tumbles in Connecticut"

2010 IL Senate: Chicago Tribune's Mike Dorning, "Burris defense fund: Embattled Illinois senator setting up defense fund, source says"

2012 Presidential: Politico's Kenneth P. Vogel, "Romney rakes it in, doesn't dole it out"

ALSO:

Minneapolis Star Tribune's Bob Von Sternberg, "Biden takes 'the plan' to the people"

Politico's Jim VandeHei and Mike Allen, "Obama struggles as communicator": "Of all the pitfalls Barack Obama might face in the presidency, here is one not many people predicted: He is struggling as a public communicator. The sluggish and unsteady response to the uproar over AIG bonuses highlights a larger problem of his White House: Obama's surprisingly uneven campaign to educate people about the economic crisis and convince Washington and the broader public that he is in command of circumstances."

Time Magazine's Bobby Ghosh, "What's Behind Dick Cheney's New Attacks?"

Washington Post's Garance Franke-Ruda, "Obama Earned Nearly $2.5 Million From Books in 2008"

Newsday's Verne Gay, "Why President Obama skipped 'Meet the Press'"

CBS News' Mark Knoller, "Michelle Obama Opens Up To D.C. High Schoolers"

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