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Morning Bulletin – Tuesday, March 24, 2009

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

(AP Photo/Gerald Herbert)
On the heels of the AIG bonus flap and as he continues to deal with the country's financial and economic crises, President Obama readies for his second prime time news conference tonight. He expected to talk about the crises and his budget blueprint at the top before being grilled by the press corps.

Also expect Mr. Obama "to use Tuesday's prime-time news conference to continue an effort that began over the weekend: cooling the anti-AIG ferocity, now that it threatens to undermine his efforts to bail out the nation's deeply troubled financial sector," reports the Associated Press' Charles Babington.

(AP)
Speaking of grilled, at 10am ET, Treasury Secretary Timothy Geithner – fresh off his, by most accounts, successful, re-launch of the administration's toxic assets plan – will face members of the House Financial Services Committee. Geithner will be joined by Federal Reserve Chairman Ben Bernanke. Expect plenty of grandstanding from members over the AIG bonuses.

During his opening remarks, Geithner "will lay out the need for legislation to grant the federal government new regulatory powers to deal with financial institutions whose failure would pose serious risks to our financial system," according to an administration source.

"With such 'resolution authority,' the government could have intervened in the case of AIG and taken aggressive action to reorganize or wind down the company in a way that stabilized the interconnected web of the global financial system. The authority would grant the government new powers to sell or transfer assets and components of the company, including renegotiating or dissolving executive compensation agreements and addressing risky derivatives portfolios. Resolution authority is a key element of the Administration's plan to address systemic risk in our financial system to ensure that we never find ourselves facing a situation like AIG again."

According to the administration source, Geithner will say: "We must ensure that our country never faces this situation again. To achieve that goal, the Administration and Congress have to work together to enact comprehensive regulatory reform and eliminate gaps in supervision. All institutions and markets that could pose systemic risk will be subject to strong oversight, including appropriate constraints on risk-taking. Regulators must apply standards, not just to protect the soundness of individual institutions, but to protect the stability of the system as a whole."

AIG FALLOUT: "For the first time since he became president, a significant number of Americans are expressing disapproval of Barack Obama's actions in a specific area: His handling of the AIG bonus situation," according to a CBS News poll released last night.

(CBS)
"Despite the middling reviews for his handling of the bonuses, however, the president continues to get high marks overall for his job performance and his handling of the economy. Forty-two percent of those surveyed disapprove of the president's handling of the AIG bonuses, while roughly the same percentage - 41 percent - approve. Another 17 percent don't know or aren't sure. Yet President Obama's overall job performance rating appears unaffected by the AIG fallout. Sixty-four percent approve of the president's performance, roughly the same as last week. And ratings for the president's handling of the overall economy are actually up slightly: Sixty-one percent now approve, up from 56 percent last week."

The conservative group, American Issues Project, is up with a new ad running on national cable hammering Mr. Obama and Democratic Congressional leaders on the AIG bonuses.

"The Obama administration says it's shocked – shocked! – to learn AIG passed out $65 million in bonuses. But who wrote the law protecting these bonuses? Obama's own Treasury Department. Then they gave AIG $30 billion more of your money," an announcer says over still photos of the president and Geithner. Then using pictures of Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and Senate Banking Committee chairman Chris Dodd, D-Conn., the ad continues: "Congressional liberals, committed to spend $1 billion every hour and don't even read their own bills. They take huge contributions from AIG and give AIG billions back. Is this change you can believe in?"

Meantime, that House bill to tax the AIG bonuses 90%? Screeching halt in the Senate, it seems. "A confluence of events has slowed momentum for congressional action on bonuses handed out to firms receiving federal bailout money, which ignited a public furor and had President Obama chiding and cautioning Congress against any hasty moves," report CQ Politics' Phil Mattingly and Richard Rubin.

"The Senate will not move forward without unanimous consent to proceed with the legislation (S 651, HR 1586) before the April 6 congressional recess, according to Jim Manley a spokesman for Majority Leader Harry Reid, D-Nev. With several Republicans leery of the legislation and Obama expressing strong reservations, it is becoming increasingly likely consideration will be put off until the next Senate work period."

"Finance Committee Chairman Max Baucus (D-Mont.), who introduced a Senate version of the bill Thursday, said yesterday that it is 'unclear at this point' when the measure will be considered. He initially hoped to pass his legislation in a matter of days but said White House officials and other senators were offering 'a lot of ideas' for modifying his proposal. But he added that no consensus has emerged on the specifics of the bill, as opposed to the unified outrage over the bonuses," add the Washington Post's Shalaigh Murray and Paul Kane.

BUDGET: "President Obama will go to Capitol Hill this week to try to persuade skeptical Senate Democrats to support the administration's first budget request after an analysis showed that the spending plan would drive the nation deeply into debt over the next decade," reports the Washington Post's Lori Montgomery.

"Obama will address Senate Democrats on Wednesday, when budget committees are scheduled to meet in the House and Senate to consider the $3.6 trillion spending plan for the fiscal year that begins in October. Centrist Democrats in both chambers have expressed concerns about the proposal, which would force the nation to borrow nearly $9.3 trillion over the next 10 years to fund the president's priorities in health care, education and other areas, according to an analysis released Friday by the nonpartisan Congressional Budget Office. That is $2.3 trillion more than the White House had previously estimated."

"White House press secretary Robert Gibbs said again Monday that it's too early to say whether Democrats will use the budget process to ram through the president's legislative agenda. But Senate Republicans — and even some Democrats — have a message for the Obama administration: Don't even think about it," write Politico's Manu Raju and Jonathan Martin.

"Sen. Orrin G. Hatch (R-Utah) said Monday that using budget reconciliation to obviate the need for 60-vote supermajorities 'would be a mess.' Sen. Bob Bennett (R-Utah) said doing so would "sour" relations in the Senate. Senate Minority Whip Jon Kyl (R-Ariz.) said the White House risks turning legislation into a 'purely partisan exercise.' And a senior Republican Senate aide said the GOP could respond to such a move by going 'nuclear' — essentially shutting down the Senate through the use of parliamentary maneuvers such as forcing the reading of bills and amendments and prohibiting committees from meeting for more than a few hours at a time."

What about last weekend's push by supporters of Mr. Obama's presidential campaign to drum up support around the country for his budget by knocking on doors?

"President Barack Obama's army of canvassers fanned out across the nation over the weekend to drum up support for his $3.55 trillion budget, but they had no noticeable impact on members of Congress, who on Monday said they were largely unaware of the effort," report McClatchy Newspapers' David Lightman and William Douglas.

"'News to me,' said Rep. Lloyd Doggett, D-Texas, a House Budget Committee member, of the canvassing. Later, his staff said that his office had heard from about 100 voters."

ALSO TODAY: President Obama meets with Australian Prime Minister Kevin Rudd at 11am ET.

In preparation for his upcoming European trip at the end of the month, Mr. Obama penned an op-ed, "A time for global action," that's running in 31 newspapers around the world. "We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation. Now, the leaders of the Group of 20 have a responsibility to take bold, comprehensive and coordinated action that not only jump-starts recovery, but also launches a new era of economic engagement to prevent a crisis like this from ever happening again," the president begins. Full op-ed here.

THIS WEEK: Treasury Secretary Geithner will speak to the Council on Foreign Relations in New York City on Wednesday.

On Wednesday night, Mr. Obama will headline the first fundraiser of his presidency this month, appealing to donors large and small even as the economy struggles through the worst recession in generations," write Bloomberg News' Hans Nichols and Jonathan D. Salant.

(AP)
"Obama's appearance at the Democratic National Committee's March 25 event at the Warner Theatre in Washington, with tickets ranging from $100 to $2,500 per person, will be an early test of his ability to keep up the record-breaking fundraising he achieved during the campaign. That may be difficult. While the president's approval rating remains above 60 percent in most polls, the U.S. is mired in the most severe financial crisis since the Great Depression. Those circumstances may close some checkbooks and force Obama to tone down his partisan appeals for cash at a time when he is trying to persuade Americans he is focused on fixing the economy."

AIG / FINANCIAL BAILOUT

NY Times' Jackie Calmes, "Rescue Plan, With Some Fine Print, Dazzles Wall Street"

Wall Street Journal's Monica Langley, "Obama Dials Down Wall Street Criticism"

LA Times' Peter Nicholas and Peter Wallsten, "On economic matters, Obama lacks a secretary of Selling It": "The first time Treasury Secretary Timothy F. Geithner was sent out as point man to sell the Obama administration's financial rescue plan, the Dow Jones industrial average plunged 382 points. And Geithner's subsequent efforts as a center-stage spokesman were less than resounding successes.

4861593"On Monday, the administration took a different approach. Geithner largely confined himself to conducting a pen-and-pad-only news conference that excluded TV and effectively reduced the secretary from point man to staff briefer. The Dow soared nearly 500 points.

"Wall Street clearly liked the meaty details he laid out. But beyond the substance of the rescue plan, the administration's shift to a lower profile for Geithner reflected a worrisome fact: Aside from President Obama, the administration has yet to find a commanding figure who can carry economic policy messages and inspire confidence in White House prescriptions.

"In assembling his economic team, the president gave first priority to technical skill and intellectual achievement. So far, none of his senior advisors has shown the extra ability to inspire as well -- both on Wall Street and Main Street. Because the programs are complex, costly and politically unpopular, the dearth of administration officials who can dominate the stage is becoming a serious handicap."

McClatchy Newspaper's Kevin G. Hall, "Geithner's last shot: If this doesn't work, is nationalization next?"

Washington Post's Binyamin Applebaum, "Some Experts Say Rescue Program Might Not Work"

Wall Street Journal's Jesse Drucker and Carrick Mollencamp, "AIG's Bonus Unit Now in IRS's Sights"

NY Times' Mary Williams Walsh and Carl Hulsez, "$50 Million in A.I.G. Bonuses to Be Repaid"

Wall Street Journal's Sudeep Reddy and Michael R. Crittenden, "Rescue Agencies Now in Scramble"

OBAMA ADMINISTRATION

Wall Street Journal's Laura Meckler, "Health-Care Battle Set to Focus on Public Plan": "Congress is poised for a battle over whether an ambitious health-care overhaul should include a new government-run health plan to compete with private companies in the effort to cover the uninsured.

"The proposal for a public health plan inspires passion on both sides, as it gets to the heart of what government's role should be in the health-care system. Democrats typically see more government involvement as a good way to check the private sector and help control costs. Republicans fear the government will have unfair power over the market.

"The matter is likely to come to a head first in the Senate Finance Committee, where Chairman Max Baucus (D., Mont.) has pledged to write a bipartisan bill. His partner, Sen. Charles Grassley of Iowa, the top Republican on the panel, is adamantly opposed to the provision for a public health-care plan. As such, aides in both parties say it's unlikely a public plan will be included in the legislation now being negotiated. The House of Representatives, on the other hand, is likely to include the provision in its version of the bill, expected in late spring or early summer, aides say. That suggests the issue would have to be worked out in negotiations between the chambers later this year."

Washington Post's Neil Irwin, "Obama Makes Senior Picks at Treasury Dept."

LA Times' Julian E. Barnes and Paul Richter, "U.S. plans to boost civilian aid to Pakistan"

Washington Post's William Branigin, "Obama Lays Out Clean-Energy Plans"

MINNESOTA SENATE RECOUNT

Minnesota Star Tribune's Pat Doyle, "FEC says donors can pay Coleman, Franken legal bills"

FUTURE RACES

Politico's Josh Kraushaar, "GOP sees signs of life in Northeast"

Washington Post's Philip Rucker, "Campaign Finance Challenged – Bill To Overhaul System Would Ban Lobbyist Donations"

2010 CA Governor: Wall Street Journal's Stu Woo, "San Francisco Mayor Starts Statewide Bid"

2010 NY Governor: Albany Times Union's Irene Jay Liu, "Poll: Paterson sinks lower"

2010 IL Senate: Associated Press' Deanna Bellandi, "National Republicans see chance in Illinois"

2010 PA Senate: Allentown Morning Call's Scott Krause, "Specter tells business leaders union vote will be 'on the merits'"

2012 President: Associated Press' Chris Blank, "Huckabee likens abortion to slavery at Missouri fundraiser"

2012 President: NY Times' Jeff Zeleny, "It's Never Too Soon to Think About 2012"

ALSO:

LA Times' Richard Simon and Mark Z. Barabak, "Pelosi's role diminishes under Obama": "For two years, alongside Sen. Majority Leader Harry Reid of Nevada, she fashioned the party's agenda on Capitol Hill, fought a rear-guard action against the Bush administration and, more broadly, helped define what it means to be a Democrat. Now, however, it's gotten crowded at the top.

"Under President Obama, a breakthrough figure in his own right, the party has a new face, an ambitious platform and a commanding voice -- and Pelosi is discovering what it means to be back in a lesser role, with someone else setting the party's agenda and establishing its priorities. The San Francisco Democrat says she is comfortable with her new position, after years of battling President George W. Bush. ... But, inevitably, tensions have emerged."

The Hill's Molly K. Hooper, "Go back into hiding, GOP begs Dick Cheney"

Boston Globe's Maria Sacchetti, "Obama's aunt back in Boston for deportation hearing"

Politico's Jonathan Martin, "Obama seeks filter-free news"

Washington Post's Paul Farhi, "Consider This: NPR Achieves Record Ratings"

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