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Morning Bulletin – Wednesday, March 4, 2009

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

(AP Photo/Gerald Herbert)
President Barack Obama will sign a presidential memo this morning at 10 a.m. ET that will change how government contracts are doled out. An administration source tells CBS News that the memo "will dramatically reform the way that we do business on contracts across the entire government" and that beginning today, White House Budget Director Peter Orszag "will work with cabinet officials and agency heads to develop tough, new guidance on contracting by the end of September."

The administration official added that maximizing "transparency and accountability" in the government contracting process will save "up to $40 billion per year."

"During last week's White House meetings on the nation's financial future, lawmakers and officials bluntly told top Obama aides that government contracts needed to be handled in a better way," reports the Associated Press' Philip Elliot.

"The president's own fleet of Marine One helicopters became an illustration of out-of-control spending. Arizona Sen. John McCain, Obama's Republican rival during last year's presidential election, dryly told Obama, 'Your helicopter is now going to cost as much as Air Force One.'"

HOUSING PLAN: Details of Mr. Obama's mortgage rescue plan are expected to be unveiled today. "The Obama administration intends to limit the loan-modification portion of its $75 billion mortgage rescue plan to homeowners who have lost jobs, suffered a pay cut or face higher mortgage payments, according to two people briefed on the program," reports Bloomberg News' Dawn Kopecki.

"Treasury and housing officials, who announced the plan Feb. 18, are scheduled to release terms today. The program will lean heavily on government-seized finance companies Fannie Mae and Freddie Mac and require strict verification of financial hardship, said the people, who declined to be identified because details were still private."

"Details of the Obama administration's housing rescue plan are expected Wednesday, and banks and other servicers are bracing for a flurry of demand for both loan modifications and refinancing," adds USA Today's Stephanie Armour.

"The $75 billion housing plan is expected to help up to 9 million homeowners rework mortgages to avoid foreclosure. Major lenders such as Wells Fargo are staffing for an increase, but a lack of manpower could mean more lengthy delays for homeowners seeking help. Under the housing plan, homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac will be able to refinance through those institutions. To help homeowners remain in their properties, lenders will be responsible for lowering interest rates. All that is expected to mean even more business for servicers."

Wall Street Journal's Jessica Holzer and Patrick Yoest, "Hoyer Anticipates Mortgage 'Cramdown' Vote Thursday": "U.S. House Majority Leader Steny Hoyer said he was hopeful a measure to allow strapped borrowers to have their mortgage debts reduced in bankruptcy will hit the House floor Thursday. A vote on the legislation was postponed last week after centrist Democrats began to balk at the measure, which would boost substantially debtors' leverage in negotiations with their creditors. After pushing a set of changes last week, Democrats are now weighing further restrictions to the legislation to appease the party's business-friendly wing."

FUTURE OF GOP: This can't be good for new Republican National Committee Chairman Michael Steele: "Steele is coming under fire from his own GOP troops to shut up and focus on his job of organizing the party and raising money, not fighting with his own political kind," reports U.S. News and World Report's Paul Bedard.

"Several Republican advisers to Congress and the previous Bush administration told Whispers that they are worried that the war of words is fracturing the party when it should be healing the division between conservatives and moderates in the wake of the 2008 election.

"'What is amazing is that Steele was elected because of his communications skills, and it is those skills that are damaging the Republican Party. Before people begin to completely judge him as worthless, Steele needs to focus and knuckle down on building a strong foundation at RNC so we can begin rebuilding our majority,' says a top GOP strategist who has worked for House and Senate Republican leaders.

"'If his implosion continues, RNC members are likely to call a special session to dump him for an effective chairman. There is not much patience for failure.'"

Politico's Mike Allen and Andy Barr, "Steele trap? GOP fears grow"

Meantime, Mr. Obama's campaign manager David Plouffe writes in the Washington Post, "Minority Leader Limbaugh": "The 2008 election sent many messages. At the top: Americans wanted to turn the page on the politics of division and partisan pettiness, and they wanted a government -- and country -- that would put the middle class first. Watching the Republicans operate this past month, it would appear that they missed that unmistakable signal. Instead, Rush Limbaugh has become their leader."

Politico's Jonathan Martin, "Inside the Dems' anti-Rush plan"

Washington Post's Perry Bacon Jr., "GOP Seeks Balance With Conservative Icon Limbaugh"

EARMARKS: The fight over earmarks in the $410 billion omnibus bill for FY '09 is not only irking Sen. John McCain, R-Ariz., whose amendment to remove the pork from the bill was defeated yesterday: NY Times' David M. Herszenhorn, "Senate Defeats Effort to Remove Earmarks"

(AP Photo)
Today, Sen. Evan Bayh, D-Ind., writes an op-ed in the Wall Street Journal, "Deficits and Fiscal Credibility": "This week, the United States Senate will vote on a spending package to fund the federal government for the remainder of this fiscal year. The Omnibus Appropriations Act of 2009 is a sprawling, $410 billion compilation of nine spending measures that lacks the slightest hint of austerity from the federal government or the recipients of its largess. The Senate should reject this bill. If we do not, President Barack Obama should veto it. ...

"The omnibus debate is not merely a battle over last year's unfinished business, but the first indication of how we will shape our fiscal future.

"Spending should be held in check before taxes are raised, even on the wealthy. Most people are willing to do their duty by paying taxes, but they want to know that their money is going toward important priorities and won't be wasted. Last week I was pleased to attend the president's White House Fiscal Responsibility Summit. It's about time we had a leader committed to addressing the deficit, and Mr. Obama deserves great credit for doing so. But what ultimately matters are not meetings or words, but actions. Those who vote for the omnibus this week -- after standing with the president and pledging to slice our deficit in half last week -- jeopardize their credibility."

San Francisco Chronicle's Zachary Coile, "Congress spending vote stirs earmarks debate"

Washington Post's Paul Kane, "President Walks Tightrope on Earmarks"

As for President Obama's $3.55 trillion earmark-free-so-far budget for FY '10, moderate and conservatives are getting a bit uncomfortable with the amount of spending as they continue to dig through the budget's blueprint.

"Moderate and conservative Democrats in the Senate are starting to choke over the massive spending and tax increases in President Barack Obama's budget plans and have begun plotting to increase their influence over the agenda of a president who is turning out to be much more liberal than they are," reports Politico's Manu Raju.

"A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress."

HEALTH CARE: Tomorrow, Mr. Obama convenes a bipartisan health care forum to go over his ideas for reforming the health care system and "he'll tout his plan as one that will lower health care costs and improve quality — stressing improvements for people who have insurance as a step toward covering everyone else," reports Politico's Carrie Budoff Brown.

"In Obama's vision, he can't get help for the uninsured without getting support for his program from the population as a whole, and congressional Democrats agree. ...

"That strategy is one among many that mark a break from Bill Clinton's unsuccessful approach to health care reform 15 years ago. More broadly, Thursday's White House Forum on Health Reform signals the start of Obama's rush to define the sprawling and complicated debate on his terms before critics do it for him, another lesson learned from Clinton's approach.

"He will use the platform to lay out his eight principles on health reform, which place greater emphasis on the quality and cost of health care than on universal coverage. The list is deliberately succinct: Clinton sent a 1,342-page bill to Congress that critics picked apart for months. There is also an inside-Washington game at play. By bringing insurance companies, consumer advocates, corporations and labor unions to one table — and opening the discussion to the media — Obama intends to send a message to Capitol Hill and beyond that he will be more transparent and inclusive than Clinton was."

Meantime, "Sen. Max Baucus, chairman of the Senate Finance Committee and one of the most influential voices in Washington on health care, promised yesterday to introduce comprehensive health-care legislation in June, certainly before the chamber's August recess," writes the Philadelphia Inquirer's Michael Vitez.

"He said that he planned to introduce a bipartisan bill with Sen. Charles E. Grassley (R., Iowa) that would adopt a mix of public and private solutions and that he hoped 70 senators would approve it. ...

"Baucus said it was too early to be specific about exactly how things would work under the legislation. He spent last year holding hearings and writing a white paper, "A Call to Action," which he said was similar to Obama's and close to the new Massachusetts plan now providing near-universal coverage to residents there."

ALSO TODAY: President Obama will host House and Senate committee chairmen for dinner at the White House tonight.

Treasury Secretary Timothy Geithner continues his three days of congressional hearings where he's defending the president's budget plan. He'll testify to the Senate Finance Committee at 10am ET. White House Budget Director Peter Orszag testifies before the House Ways and Means Committee.

British Prime Minister Gordon Brown addresses a joint session of Congress at 11am ET, becoming only the fifth British prime minister to do so.


LA Times' Maura Reynolds and Jim Puzzanghera, "Obama's words do little to spur Wall Street"

Washington Post's Neil Irwin, "As Markets Slump, U.S. Tries to Halt Cycle of Fear"

Washington Post's Lori Montgomery, "Obama Officials Defend Budget"

NY Times' Michael Cooper, "Stimulus Spurs Road Projects, Big and Small"


Washington Post's Michael D. Shear and Philip Rucker, "Picks for Key Government Posts Play Long Waiting Game"


NY Times' Mark Landler, "Clinton Meets West Bank Palestinian Leaders"

Bloomberg News' Viola Gienger and Gwen Ackerman, "Clinton Takes Two-State Mideast Pursuit to West Bank"

Washington Post's Karen DeYoung, "Obama Team Seeks to Redefine Russia Ties"

NY Times' Ellen Barry, "Russian Welcomes Letter from Obama"

Wall Street Journal's Yochi J. Dreazen, "U.S. Strategy in Afghan War Hinges on Far-Flung Outposts"

Chicago Tribune's Paul Richter, "Warily, U.S. reaches out to Syria"

Washington Post's Dana Milbank, "Obama Gives Brown a Chilly Reception at White House"


Wall Street Journal's John D. McKinnon, "GOP Attacks Climate Plan as Too Costly"

McClatchy Newspapers' Renee Schoof, "Obama reverses Bush change to Endangered Species Act"


CQ Politics' Emily Cadei, "More Questions Than Answers in Minnesota Senate Case"


Chicago Sun-Times' Lynn Sweet, "Quigley wins despite being massively outspent"


CA Gov. 2010: LA Times' Steve Lopez, "Mayor's next race won't be a cakewalk"

NY Gov. 2010: CQ Politics, "Approval Rating Plummets for New York's Paterson"

SC Gov. 2010: Southern Political Report's Hastings Wyman, "South Carolina's 2010 governor's race taking shape"

2012 President: NY Daily News' Olivia Smith, "Bobby Jindal, potential GOP candidate in 2012, defends speech, tackles Rush Limbaugh on Larry King"


Wall Street Journal's Kris Maher, "President Tells Unions Organizing Act Will Pass"

Politico's Patrick O'Connor, "Dems yank DC vote bill in House"

Times of London's Philip Webster, "Ted Kennedy to be knighted"

McClatchy Newspapers' Lisa Zagaroli, "FEC to fine Edwards over '04 campaign contributions"

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