Media reports are describing a widespread populist reaction to the AIG bonus story, with the President moving to reassure the public that the government shares its outrage. As part of that effort, Obama yesterday announced that his Administration will try to recover the $165 billion in taxpayer funds which, as ABC World News put it, were used to pay "bonuses to executives of the very division that virtually destroyed the company." The story led all three network newscasts and dominated the evening cable shows and the front pages of this morning's major newspapers. Some commentators worry the political firestorm will make it harder for Congress to offer additional aid to troubled financial firms, hurt the President's public standing and even derail his broader domestic agenda.
On its front page, for example, the Washington Post runs a story on the AIG bonus controversy headlined "Anger Over Firm Depletes Obama's Political Capital," in which it reports that President Obama's "apparent inability to block executive bonuses...has dealt a sharp blow to his young administration." On CNN's The Situation Room, Wolf Blitzer asked, "Why didn't the administration do something a lot sooner?" The Politico says AIG is "truly 'too big to fail,'" yet "in many ways, it's also one of the hardest bailouts for Obama to defend."
On its front page, the Wall Street Journal says Obama "needs to convince Americans he shares their mounting fury." The AP reports Obama tried to join the "wave of public anger.'" However, the Chicago Tribune says "Obama's sharp comments were a reversal from this weekend, when administration officials said they had carefully reviewed AIG's contracts and determined they could not block the bonuses." USA Today reports Obama "must decide how to continue with plans to rescue the economy...in the face of growing public disgust with corporate America." On ABC World News, George Stephanopoulos said "right now they know there's no chance Congress would approve any more money in the foreseeable future to help the banks."
McClatchy notes that administration officials, including Larry Summers, "previously indicated that the bonuses appeared to be protected by contract law." The Los Angeles Times also says it is "unclear what the White House could do legally to stop the bonuses." The New York Times, however, reports on its website that a White House official "disclosed" last night that "the administration would use a pending $30 billion installment for AIG to recoup the $165 million." In a separate article, the New York Times says, "The administration seemed to leave open the possibility that the company would effectively be repaying taxpayers with taxpayer money." Dana Milbank, in his column for the Washington Post, says Obama "was left looking like a pitiful giant as his aides explained that there was absolutely nothing they could do to stop the obscene payouts." According to The Politico, Obama "finds himself in what for him is a relatively unfamiliar place -- on defense." The Financial Times notes the President's "remarks came as Andrew Cuomo, New York attorney-general, opened an investigation into the bonuses."
Roll Call says members of Congress are "calling for all manner of reprisals." AFP notes that House minority leader John Boehner said Obama "must spell out an 'exit plan' to wind down his administration's hefty market interventions." In a rare semi-defense of the bonuses, Sen. Tom Coburn, on CNBC's The Kudlow Report, argued, "How do you keep good people if you don't pay them properly?" The Washington Times notes a CBS News poll "shows just 37 percent of Americans approve of government bailouts of banks and financial institutions, while 53 percent disapprove."
President Obama's announcement of a new initiative to increase the availability and decrease the expense of credit for small business owners was favorably reported by a wide range of media -- but generally it received second billing to the AIG bonus controversy. USA Today reports the President's plan "aims to boost small-business owners by giving their companies increased tax breaks, better access to loans and reduced loan fees."
In contrast to the extensive coverage afforded the AIG story, the story was briefly reported by two networks last night, ABC and CBS. ABC World News reported, "President Obama has unveiled plans to help small businesses. The White House is changing the existing loan program to make it easier for small businesses to borrow money at low interest rates." The CBS Evening News reported, "The $15 billion initiative would reduce lending fees, expand loan guarantees, and provide temporary but significant tax breaks for entrepreneurs."
The Financial Times reports the Obama Administration "has sought to draw a deliberate distinction between small business and the titans of the financial sector, amid increasingly vehement rhetoric aimed at financial sector recipients of government bail-out funds." Indeed, The Hill reports President Obama's economic policies "so far have favored small businesses over multinationals, though the administration denies it is trying to split the business community." Obama has "sought to invigorate small businesses through tax cuts and other policies designed to help small firms survive the recession." But the President has been "much less generous with multinationals, which are the target of a $210 billion tax hike in the budget."
Fox News' Special Report reported that the White House is "struggling against the reality of bailout fatigue turning into bailout blowback. To quiet the storm, the White House highlighted the use of taxpayer dollars to help businesses." The AP reports President Obama "heaped praise on the little guys of American industry, often overshadowed in the blitz of government bailouts."
In one of the few reports to raise questions about the soundness of the proposal, the Washington Post reports "some critics said the government is relying on a broken program that may end up benefiting big banks and lenders more than small businesses." Another critical report ran on Fox News' Special Report, which said the Obama Administration "is right to be worried about small business, but the help it extends today with one hand, it plans to take away later with the other, because under the administration's budget, taxes on small business income would increase in 2011."
In a more typical report, the Los Angeles Times noted Cynthia Blankenship, "head of the Independent Community Bankers of America, who appeared with Obama and Treasury Secretary Timothy F. Geithner as they unveiled the program," said, "'This is an incredible tool for community banks nationwide to help jump-start the economy and the credit markets." Bloomberg reports the Administration "is seeking to restore confidence in the economy and build public support for Obama's strategy in battling a recession that has pushed the unemployment rate to 8.1 percent last month."
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McClatchy reports on "a new poll by the independent Pew Research Center for the People & the Press," which "has found that ...Obama's popular support is eroding, with his approval rating dropping below 60 percent." The Pew poll "finds Obama's approval rating falling to 59 percent from 64 percent in February. It also finds the ranks of Americans who disapprove of the president's job performance rising, to 26 percent from 17 percent." The Hill reports the Pew survey also finds "more voters -- 44 percent -- say Obama is leaning toward liberals in his party, while three in 10 say he is sticking with centrists, a flip since a January survey found just a third saying Obama leaned to the liberal wing and 44 percent said he was more centrist." Bloomberg News notes "a March 12-15 survey conducted for CNN by Opinion Research Corp. found Obama's approval rating dropped 3 points from late last month and 12 points from early February."
The Politico reports that "on a variety of fronts in recent days, the Obama White House and some of its closest special-interest and think tank partners have embarked on a campaign to promote the president's budget and the far-reaching ideological objectives embedded in it. The campaign features daily and, in some cases, hourly coordination between the West Wing and Capitol Hill; mobilization of Obama's campaign database of 10 million supporters; and a sharply political message disseminated by Obama surrogates at the Democratic National Committee and other groups sympathetic to his agenda." Likewise, the Chicago Tribune says, "Obama's millions of campaign supporters are receiving e-mails urging them to call members of Congress. Groups allied with the White House are running ads scorning the president's opponents. States that were closely contested in the 2008 election are again getting visits from Barack Obama." The Tribune notes that on Thursday, Obama "will even...appear on 'The Tonight Show.'"
However, the Washington Times notes that President Obama "had as many as 5,000 full-time staffers during the general election," but "many Obama enthusiasts have come to the capital hoping to help the president and, after months of trying, have wound up frustrated."
The AP reports "Wall Street financier" Steven Rattner, "a top adviser to President Barack Obama's auto industry task force," said yesterday that "bankruptcy is not the goal of the administration's efforts to restructure General Motors and Chrysler but stressed that the government cannot solve all of the industry's woes." Rattner "said he expected more work would be done on the restructuring beyond the March 31 deadline. ... 'We have every intention to keep these companies in private shareholders' hands and allow them to function as members of our free enterprise society,' he said." According to the Wall Street Journal, "By emphasizing that bankruptcy was not a preferred option, and by removing any threat of putting the auto makers in default by recalling the loans, Mr. Rattner's team will ease some of the pressure that has been on GM, Chrysler and their constituents to make immediate and sweeping concessions." Meanwhile, the Detroit Free Press is reporting that "advisers to the committee representing General Motors Corp.'s bondholders said this evening they had pitched a plan to reduce GM's debt, making the statement after criticism from President Barack Obama's auto task force." Rattner "said Monday that bondholders were being 'quite difficult' in talks." The Financial Times says GM "is preparing a fresh barrage of discounts and other promotions to coax Americans into buying more cars." The Detroit News reports Chrysler CEO Bob Nardelli "told employees today that the automaker is viable as a stand-alone company."
Wealthy Detroit Suburbs Face Cash Crunch The Wall Street Journal, in an article titled, "Detroit's Pain Begins To Spread Into Wealthy Suburbs And Schools," reports that the auto industry's "slump" is "quickly enveloping more white-collar workers and sweeping through the wealthy suburban communities where they live."
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The Wall Street Journal that with the Minnesota Senate race dragging on "with no clear end in sight" and "few independent analysts" seeing an ultimate victory for Norm Coleman (R), the GOP can still "claim a kind of strategic victory by blocking" Al Franken's (D) "path to the Senate, which requires 60 votes to pass controversial items," two more than they currently have.
The Hill reports, "Democrats want" Pennsylvania Sen. Arlen Specter (R) "in their ranks - and they've been sending in their big guns to lobby him to make the switch," including Pennsylvania Gov. Ed Rendell (D), Vice President Biden and Pennsylvania Sen. Bob Casey Jr. (D).
The Wall Street Journal reports, "As Washington wrestles with a once-in-a-generation financial meltdown," Connecticut Sen. Chris Dodd (D), chair of the Senate Banking Committee, "has as much riding on the outcome as anyone on Capitol Hill," and "Already, a growing anti-industry backlash presages a tough re-election fight for Mr. Dodd next year -- a remarkable development given his popularity in a solidly Democratic state."
The Hill reports Alaska Gov. Sarah Palin (R) will be in DC in June to give a "keynote address at the annual Republican Senate-House dinner, according to national Republicans," and The Politico adds the dinner is "one of the marquee events for the campaign committees each year, and Republicans are hoping that Palin's presence will be a huge draw." However, the Anchorage Daily News reports that Palin spokesman Bill McAllister said Palin had not yet committed to the event.
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The AP reports that Mitt Romney (R) is set to hold a Boston fundraiser on April 16 for Louisiana Gov. Bobby Jindal (R), a potential rival for the 2012 GOP nod.
Roll Call reports that over the weekend, KY6 Rep. Ben Chandler (D) "left open the possibility of challenging" Kentucky Sen. Jim Bunning (R), while the AP reports that Kentucky Lt. Gov. Daniel Mongiardo (D) is stepping up his challenge to Bunning, unveiling a new website.
The New Hampshire Union Leader reports that NH1 Rep. Carol Shea-Porter (D) said yesterday she will not run for Senate this cycle, opening a clear path for NH2 Rep. Paul Hodes (D), though other candidates may enter the contest.
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Jay Leno: "Well, you've probably heard of this. The insurance company AIG has done it again. They announced they're giving their executives another $165 million in bonuses. ... So they...bankrupt the company, took $170 billion of our dollars, and they're giving out bonuses. You know the main thing they want to reward their people for? Convincing the Treasury Department to give out $170 billion to a failing company so they can give out bonuses for a job well done. It's very well thought out."
Jay Leno: "Treasury Secretary Timothy Geithner was called before Congress again. Geithner defended himself against criticism, saying he inherited this crisis. In fact, he said when the economy started this downturn he was busy in the private sector cheating on his taxes. He didn't have time."
David Letterman: "Do you remember a woman by the name of Sarah Palin? She is the governor of Alaska" and she ran for vice president. Well, "you remember that...one of her" daughters, "a very young girl," was "pregnant and was going to get married to the young man that knocked her up." And the young man "was saying that, 'You know, we're just not ready for marriage.' And I thought, well, that makes sense because their mother really wasn't ready to be vice president either."
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