After winning Congressional approval for his very expensive stimulus plan, President Obama is now turning his attention to the budget deficit, vowing to reduce it by 50% by 2012. Over the weekend, media reports were generally favorable to the leaked details of Obama's plan, casting it as a response to a growing fiscal emergency not of his own making. The two network newscasts that aired last night led with reports touching on the President's plan. ABC World News reported, "Obama hopes to get control by slashing the federal deficit in half over the next four years." The "first fight is likely to be over his plan to raise taxes. He'll allow the Bush tax cuts for those making more than $250,000 a year to expire in 2010, and there's talk of increasing the capital gains tax rate." NBC Nightly News noted that "the reason" the Administration is "trying to set expectations" for the budget is that "the deficit number is going to be very high, $1.3 trillion. But they pledge to cut it in half by the end of the President's first term."
USA Today reports the President "will host a 'fiscal responsibility summit' at the White House on Monday and will give a prime-time speech to Congress on Tuesday before unveiling a budget overview Thursday." White House spokeswoman Jen Psaki "confirmed that the administration pegs the current deficit at $1.3 trillion, or 9.2% of the overall economy, and projects that in four years the deficit will be down to $533 billion, or 3% of the economy as measured by the gross domestic product." As part of his plan, Obama will propose "using mandatory, across-the-board spending cuts to offset any new initiative that expands the government's red ink," reports the Wall Street Journal. The move steps up "a campaign to persuade Americans he is serious about the budget deficit."
The Politico says the President "is set to deliver the worst fiscal news since the Great Depression." Peter Orszag, director of the White House budget office, tells the Financial Times, "The president is committed not only to addressing healthcare costs the key to our long-term fiscal future but also to reducing our medium-term deficits to a sustainable level without resorting to the budget gimmicks that have been used too often in the past." Additional reports and columns on the deficit plan run in the New York Times, The Politico, McClatchy, the Washington Times, the Christian Science Monitor, the Chicago Tribune, the Washington Post, the AP, the Financial Times, the New York Times , the Washington Post, and The Hill. Obama's deficit plan was first reported over the weekend, and was the lead on ABC and ran early in CBS' broadcast. Print coverage appeared in the New York Times, the Washington Post, the AP, Bloomberg News, the New York Times, and the Washington Times.
Spending Bill Includes 9,000 Earmarks The President's emphasis on fiscal restraint may not be echoed in Congress. The Washington Times reports Congress returns to Washington this week to consider "a roughly $410 billion omnibus appropriations bill that would fund most of the federal government for the rest of the fiscal year." McClatchy says "the bill will contain about 9,000 earmarks totaling $5 billion."
Media reports this morning suggest talks between the Federal Government and Citigroup could result in the Feds' acquisition of a large ownership stake in the troubled bank. The Wall Street Journal says the government "could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said." The AP notes the WSJournal story, while the Financial Times reports that "according to its proponents, the injection of common stock would bolster Citi's capital base while at the same time allaying market fears of a nationalisation."
The Washington Post notes "the government already has invested $45 billion in Citigroup and promised to limit its losses on a portfolio of more than $300 billion of loans and other troubled assets. But investors remain nonplussed, and the company's stock price has dropped 71 percent this year." On NBC Nightly News, CNBC's Trish Regan said, "Investors are worried about nationalization of a couple of major US banks. Specifically Citigroup and Bank of America. And this is despite the fact that on Friday the administration made it very clear that banks should remain, they said, in the private sector. Nonetheless, the feeling is, is that these banks are in trouble."
Meanwhile, the network newscasts continued to note Wall Street fears about bank "nationalization." ABC World News reported, "The Treasury Department has begun those so-called stress tests, checking the real value of the banks' bad assets, those toxic mortgages on the books, before deciding whether to give the banks more government money." The New York Times reports the Administration "will begin taking a hard look at the financial condition of the country's 20 biggest banks this week to judge whether they could hold up even if the downturn worsens further than policy makers already expect. These reviews" or "stress tests," are "heightening a dilemma for Obama aides about how candid they should be about the health of banks like Citigroup and Bank of America."
Republican governors appear split on the wisdom of accepting the funds allocated to the states in the $787 billion stimulus package. On Sunday, a group of mostly Southern governors, notably Gov. Bobby Jindal who will deliver the GOP response to the President's Tuesday address to Congress and Gov. Mark Sanford of South Carolina, criticized the funding for what they see as Federal mandates included in the bill. Meanwhile, Governors Charlie Crist of Florida and Arnold Schwarzenegger of California embraced the Federal aid. The Christian Science Monitor reports "at least half a dozen Republican state executives" have "said they may reject some, even all, of the money their states would get under a stimulus package." The Wall Street Journal reports Democratic and Republican governors "were able to agree on one thing: Their economies are falling off a cliff."
The governor carried out their debate on the merits of the stimulus funding on the Sunday talk shows. Gov. Jindal, on NBC's Meet the Press, said, "The $100 million we turned down was temporary Federal dollars that would require us to change our unemployment laws. That would've actually raised taxes on Louisiana businesses." On Fox News Sunday, South Carolina Gov. Mark Sanford said he did not want to accept the unemployment assistance because "at times it sounds like the Soviet grain quotas of Stalin's time -- X number of jobs will be created because Washington says so."
Florida Gov. Charlie Crist, also appearing on NBC's Meet The Press said, "It's not a matter of bucking the party, it's a matter of helping the people. I really view it as an issue of what can I do that's best for the people of Florida."
In an AP story, California Gov. Arnold Schwarzenegger said "governors, Congress, the White House - everyone has to play together during these tough times, rather than playing politics and making attacks." Schwarzenegger on ABC's This Week said, "I'm more than happy to take his money or any other governor in this country that doesn't want to take this money, I take it, because we in California... need it." The Los Angeles Times and The Hill also report the story, with additional reporting appearing in the Washington Post, The Hill, AFP, the New York Times, and the Washington Post.
Debate Sparks 2012 Preview A subtext to the GOP governor's debate over the stimulus funding is the 2012 presidential race. ABC World News says "three of President Obama's harshest Republican critics," including Govs. Jindal, Sanford, and Tim Pawlenty of Minnesota, were "asked if they are setting themselves up to challenge him in four years." Stuart Rothenberg, Rothenberg Political Report: "They're trying to keep their options open for running for president in 2012, and they understand that this vote could define them." The AP contrasts the Southern governors Jindal, Sanford, and Barbour, with the "coastal moderates," Crist and Schwarzenegger. In "the middle is another likely 2012 contender," Pawlenty, "who has criticized the stimulus bill but nonetheless plans to accept the money for his state."
In a "The Fix" column titled "Well Before the 2012 Season, Obama Kicks the GOP a Political Football," the Washington Post relates, "One month into the Obama presidency, the race for the 2012 GOP nomination appears very much underway," with "the most obvious sign of the early campaigning" coming "in response to the economic stimulus proposal Obama signed last week." The Politico reports, "Speculation about who will run for the Republican presidential nomination in 2012 is already rampant, but Sunday show hosts had zero luck pinning anyone down on the issue."
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The Washington Times reports the District of Columbia House Voting Rights Act of 2009, which would grant one full House seat for the District and one for Utah is expected to be debated in the Senate on Monday, "then come up for a crucial preliminary vote Tuesday." A final Senate vote could come by Friday. The Washington Post reports on the front page of the Metro section that some are cautiously optimistic about the potential for the passage of the bill, though some will oppose it because they believe it "could be a first step in giving the District two senators," which would add significantly to the Democrats' power base in the Senate. The Wall Street Journal adds that if the bill does pass, "it faces a trip to the Supreme Court to decide whether it passes constitutional muster."
The Christian Science Monitor reports that the "drumbeat is getting louder for Sen. Roland Burris (D) of Illinois to resign," with Illinois Gov. Pat Quinn adding "his voice to those who say too many questions have been raised about the circumstances that led to Senator Burris's appointment for him to remain in office."
The Tampa Tribune reports, "For months, political analysts and...friends" of Florida Gov. Charlie Crist (R) "have said it's unlikely he'd leave the governor's office after only one term to run for the Senate, but "now the soothsaying is swinging the other way." Experts "think a Senate run could help ignite the national political career he's known to aspire to."
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The Hill reports Alaska Gov. Sarah Palin (R) "is uncharacteristically shunning the spotlight this week in an apparent effort to repair damage to her political stature back home," where she has taken "a number of hits" during this month, on issues such as "her...flying to Washington for the white-tie Alfalfa Club dinner," Troopergate-related developments, and an order by state officials that Palin "pay $18,000 in back taxes on travel expenses she incurred while commuting between her home in Wasilla and the state capitol, Anchorage."
The Minneapolis Star Tribune, in a report on the month-old Minnesota Senate recount trial, relates, "A series of court rulings have dealt" Republican Norm Coleman "long odds for overturning DFLer Al Franken's 225-vote lead," as the three-judge panel hearing the case has "been only partly receptive to Coleman's bid to expand the field of ballots as he seeks more votes, and they brushed aside his claim of systemic problems with Minnesota elections."
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Jay Leno: "And at his trial this week, the Iraqi journalist...who threw his shoes" at former President George W. Bush "said he rehearsed the attack for two years." Well, "how embarrassing is that? Guy practiced for two years and he still missed?
Jay Leno: "I talked to one of my old high school buddies the other day. ... He did something so stupid. Apparently, he bought a house he could afford. He really should have bought one twice as big and let the taxpayers" take care of it. But "he was living within his means. What an idiot."
Craig Ferguson: "Arnold Schwarzenegger is taking time off as the Governor of California to shoot a part in an upcoming movie. The movie's about a terrible disaster. And it's called "Arnold Schwarzenegger is the Governor of California.'"
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