4989608At 10:30 a.m. ET, President Obama unveils more details of his proposed FY 2010 budget today but the part of the announcement the White House has been enthusiastically touting is the result of their "line-by-line" scrubbing of the budget, resulting in 121 budget cuts totaling $17 billion.
Those figures, however, have landed with a bit of a thud.
The Washington Post's Lori Montgomery and Amy Goldstein write that it's "a tiny fraction of next year's $3.4 trillion budget. The plan is less ambitious than the hit list former president George W. Bush produced last year, targeting 151 programs for $34 billion in savings.
"And like most of the cuts Bush sought, congressional sources and independent budget analysts yesterday predicted that Obama's, too, would be a tough sell. 'Even if you got all of those things, it would be saving pennies, not dollars. And you're not going to begin to get all of them,' said Isabel Sawhill, a Brookings Institution economist who waged her own battles with Congress as a senior official in the Clinton White House budget office.
"'This is a good government exercise without much prospect of putting a significant dent in spending.' Administration officials defended their approach, saying the list of program reductions and terminations is just the start of a broader effort to cut spending and rein in a skyrocketing budget deficit, which is projected to approach $1.7 trillion this year. They also noted that the list does not include more than $300 billion in savings Obama proposes to squeeze from federal health programs and use to finance an expansion of coverage for the uninsured."
"Obama's proposed cuts are about one-fiftieth the size of this year's $787 billion economic stimulus package — all of which was added to the deficit. The overall budget is $3.6 trillion," adds USA Today's Richard Wolf.
"The roster of cuts won't be easy for Congress to swallow. Lawmakers from the potent California, New York and Florida delegations are sure to fight the elimination of the State Criminal Alien Assistance Program, which gives money to states to help defray the cost of incarcerating illegal immigrants who commit crimes. President George W. Bush tried and failed to kill the $400 million program several times," writes the Associated Press' Andrew Taylor.
The New York Times' Jackie Calmes adds, "'None of this is going to be easy,' said Peter R. Orszag, the director of the Office of Management and Budget. That is certainly true for roughly half of the savings that administration officials say will come from military programs. Those savings proposals are mostly known, having been outlined in April by Robert M. Gates, the secretary of defense, as part of a comprehensive reordering of military spending priorities — to the howls of some lawmakers and the military industry. Among Mr. Gates's targets are missile defense programs, the Army's Future Combat Systems, Navy shipbuilding, the advanced F-22 fighter jets and a state-of-the-art helicopter fleet for the president."
"In an outcome more positive than many investors had expected, the tests concluded that the banks have enough capital in reserve but may need to strengthen the ability of those holdings to absorb losses. The report is expected to show clear distinctions among the nation's largest banks, according to sources familiar with the findings. J.P. Morgan Chase will not require additional capital, clearing the way for the bank to repay the government's investment. Bank of America and Wells Fargo also do not need more money, but will be required to strengthen their reserves, potentially by converting tens of billions of dollars of other forms of capital to common equity, the most dependable form of capital. Bank of America will need to increase these holdings by about $34 billion and Wells Fargo by $15 billion, sources said. Citigroup, the weakest of the giants, will be required to raise about $5 billion in new capital and take additional steps to strengthen its reserves.
4883225"The formal unveiling of the results scheduled for this afternoon marks the end of a months-long process designed by the Obama administration to restore confidence in the banking industry, in part by forcing some banks to accept additional capital."
"As a group, the 19 banks are likely to be forced to add tens of billions of dollars to their front-line cushions of capital to guard against a deeper-than-expected recession," report the Los Angeles Times' Jim Puzzanghera and E. Scott Reckard.
"But that could be accomplished in a number of ways short of raising cash, and Treasury Secretary Timothy F. Geithner -- expressing confidence Wednesday that the banks would need little more in the way of federal bailout funds -- predicted the results would be 'reassuring.' The stock market also expressed confidence Wednesday in a heartening outcome. Shares of banking companies shot up, leading the overall market higher. The Dow Jones industrial average climbed 101.63 points, or 1.2%."
Treasury Secretary Geithner, in a New York Times op-ed, outlined how they tested the banks.
"This is just a beginning, however. Our work is far from over. The cost of credit remains exceptionally high, and businesses and families across the country are still finding it too hard to borrow to meet their needs. We are continuing to execute our programs to relieve the burden of legacy assets, help small businesses and community banks, and tackle the mortgage and foreclosure crisis. The ultimate purpose of these programs is to ensure that the financial system supports rather than impedes economic recovery. We have not reached the end of the recession or the financial crisis, but the bank stress tests should advance the process of repairing our financial system and provide a better foundation for recovery."
"Now on the verge of making his first appointment, Obama, 47, is relying on a circle of advisers that includes White House Counsel Gregory Craig, deputy counsel Cassandra Butts, Vice President Joe Biden, a former chairman of the Senate Judiciary Committee that confirms high-court nominees, and a fellow Harvard Law School graduate: his wife, Michelle. As a one-time professor of constitutional law at the University of Chicago, Obama is bringing greater personal knowledge and expertise to the decision than any recent president. ...
"Obama has indicated his nominee will be expected to side with the more liberal members of the court who tend to favor abortion rights and support affirmative action. ...
Both the Los Angeles Times and Washington Post take a deeper look at Sotomayor:
4993195LA Times' James Oliphant and David G. Savage, "Supreme Court watchers eye Sonia Sotomayor"
Washington Post's Keith B. Richburg, "N.Y. Federal Judge Likely on Shortlist"
SPECTER SWITCH: "Senator Arlen Specter, Republican-turned-Democrat of Pennsylvania, has rapidly discovered that switching parties is not as simple as checking a new box on a voter-registration card," writes the New York Times' David M. Herszenhorn.
"After a week and a day as a Democrat, Mr. Specter is viewed with suspicion by his new Democratic colleagues, with general disdain by his old Republican friends, and with an odd mix of amusement and pity all around. 'I am sure this is an awkward time for Senator Specter,' said Senator Tom Harkin, Democrat of Iowa. 'It's a transition.' He quickly added: 'Time heals all wounds.'
"Mr. Specter also issued a statement on Wednesday insisting that he would ultimately regain his seniority on Senate committees, which Democrats for now have stripped away. But there are no guarantees. So it goes for Mr. Specter, a political chameleon who started out as a Democrat, spent 43 years as a Republican and abruptly switched parties last week in a naked bid to save his political career."
"Pity Arlen Specter," adds the Washington Post's Dan Balz. "A week ago he was standing in the White House, a newly minted Democrat, the toast of the town (or at least the portion controlled by the Democrats). President Obama promised to watch his back. Vice President Biden said he'd do the same. Today he looks like just another embattled politician trying to find his way around town. His former party is glad to be rid of him. His new party has put him through the equivalent of a ritual hazing. And having ducked a Republican primary, he may yet have to fight hard in 2010 to retain his seat in the Senate.
"There is a certain justice in all of this. For years, Specter has driven his minders mad. 'Independent' barely describes his modus operandi. 'Predictably unpredictable' might be the better term. Specter has intellect and experience, but a team player he is not."
"Specter first won his Senate seat in 1980, riding into D.C. on the back of the Reagan Revolution, and I'd suspect we'd find few who disagree that Reagan's GOP of the 1980's was more conservative than today's iteration. To that end, I think one could reasonably argue that contrary to the storyline Specter and his allies on the left would have us believe - that it was the GOP who left Specter - the Senator's decision was based on the simple fact that he couldn't win a Republican primary.
"What Specter's defection really underscores is an allegiance by many to the 'Party of Incumbency' rather than to the Party they claim to represent, be it Republican or Democrat. It's this kind of soulless pragmatism that turns people off to politics and helps perpetuate a ruling class more loyal to themselves than to the people who elected them. That same allegiance to power over principle is what has been largely responsible for devastating the Republican brand, and until more in our Party start governing like they campaign, it is my belief we will have great difficulty regaining the trust of the American electorate."
TODAY'S WHITE HOUSE SCHEDULE: At 12:45pm ET, President Obama the President will meet with Rev. Al Sharpton, Mayor Michael Bloomberg, and former Speaker Newt Gingrich in the Oval Office to discuss education reform.
"The president invited the three political leaders – whose ideology spans the political spectrum – to discuss how all sides can work together to close the racial and economic gaps in American education," reports the New York Times' Jeff Zeleny.
"The meeting ... comes one week before the 55th anniversary of the Supreme Court ruling that banned school segregation. The Brown v. Board of Education decision, announced on May 17, 1954, ordered schools across the country to be integrated. But five decades after that historic ruling, education in the United States remains unequal along class and racial lines. The meeting at the White House on Thursday, according to people familiar with the agenda, is intended to address the disparity. It is an interesting set of participants, with Mr. Gingrich, a Republican, Mr. Bloomberg, a former Republican and former Democrat turned independent now, and Mr. Sharpton, a Democrat.
"The private meeting comes on the same day that Mr. Obama will announce his intention to extend the school voucher program in the District of Columbia. The program provides scholarships to about 1,700 poor students so they can attend private schools, but it was scheduled to end this year, creating uncertainty for the students already enrolled. While Mr. Obama remains opposed to voucher programs, an administration official said, he has agreed to extend the District of Columbia program so students' learning would not be entangled in a political fight."
ALSO TODAY: First Lady Michelle Obama "will attend a morning presentation and meeting with representatives from Corporate Voices for Working Families," per a White House release. Corporate Voices for Working Families is a leading national business membership organization representing the private sector on public and corporate policy issues involving working families.
Vice President Biden will receive the 2009 Delaware History Makers Award at Noon ET today in Wilmington, Del. At 3:30 PM, the Vice President Biden will travel to Lodi, New Jersey to talk about the president's economic stimulus plan. Biden will be joined by Gov. Jon Corzine, D-N.J., as well as Sens. Frank Lautenberg and Robert Menendez, D-N.J., Rep. Steven Rothman, D-N.J., Mayor of Lodi Marc Schrieks and other New Jersey officials.
Washington Post's Scott Wilson, "Obama Stresses Joint Action Against Taliban Push in South Asia"
LA Times' Paul Richter and Christi Parsons, "U.S., Afghanistan and Pakistan vow joint effort against militants"
NY Times' Helene Cooper, "In Public and Private, a Diplomatic Approach to Pakistan"
GITMO / CIA INTERROGATIONS
LA Times' Janet Hook, "Democrats face hard time over Guantanamo"
Washington Post's Carrie Johnson, "Experts Say Authors Of Memos May Avoid Professional Sanctions"
Washington Times' S.A. Miller, "Senator, bucking leaders, to seek Gitmo funds"
Portland Press-Herald's Matt Wickenheiser, "Maine legalizes same-sex marriage"
Washington Post's Keith B. Richburg, "Maine and N.H. Move to Expand Gay Rights"
NY Times' Jesse McKinley, "Group Renews Fight for Same-Sex Marriage in California"
NY Times' Sheryl Gay Stolberg, With Gay Issues in View, Obama Pressed to Engage"
ECONOMY / STIMULUS / BAILOUTS
NY Times' Mary Williams Walsh, "More States Start Pension Inquiries"
Wall Street Journal's Laura Meckler, "White House Begins Effort to Bridge the Divide on Abortion"
Washington Post's Karen DeYoung, "In Frenetic White House, A Low-Key 'Outsider'"
MINNESOTA SENATE RECOUNT
CBSNews.com's Brian Montopoli, "Franken, Biden Meet in Washington"
The Hill's Reid Wilson, "RNC officials reach accord, though mistrust continues"
Politico's Andy Barr, "Rush to Powell: Go be a Democrat"
The Hill's Aaron Blake and Reid Wilson, "Band of centrists forming for Senate GOP in 2010"
Politico's Josh Kraushaar, "GOP relies on Specter-like recruits"
2009 VA Governor: Richmond Times-Dispatch's Jeff E. Schapiro, "McAuliffe takes on Republicans in House of Delegates"
2010 AK Governor: Political Wire, "Palin Popularity Plunges in Alaska"
2010 MD Governor: Washington Post's John Wagner, "O'Malley May Face Democratic Challenger"
2010 OK Governor: Tulsa World's Barbara Hoberock, "Watts hasn't decided about governor's race"
2010 FL Senate: Politico's Manu Raju and Josh Kraushaar, "GOP optimistic that Crist will run"
2010 IL Senate: Toronto Star's Mitch Potter, "Quiet Kennedy eyes political stardom"
2010 LA Senate: Associated Press' Kevin McGill, "Porn star may take on family values La. senator"
2010 NH Senate: CQ Politics' Ana K. Ota, "GOP Committees Deal Could Falter if Gregg Opts Not to Retire"
2010 NC Senate: Raleigh News & Observer, "Durham lawyer eyes Burr seat"
2010 PA Senate: Allentown Morning Call's John L. Micek and Scott Kraus, "Ridge could decide soon on run for state Senate seat"
NY Times' Rebecca Cathcart, "Schwarzenegger Urges a Study on Legalizing Marijuana Use"
Associated Press' Holbrook Mohr, "Jackson, Miss., mayor dies after losing primary"
Associated Press' Beth Fouhy, "Bristol Palin promotes abstinence in Big Apple tour"
NY Times' Gail Collins, "Bristol Palin's New Gig"