President Obama's planned announcement of his plan for the auto industry received heavy media attention today. The Administration's plans to force Rick Wagoner to step down as CEO of GM was often presented as an indication of the severity and scope of the problem and to show the Administration's sensitivity to public anger over bailouts. ABC World News reported "the Administration itself asked Wagoner to step down as part of its plan to restructure the auto industry, which will be announced by the President tomorrow." The Detroit Free Press reports it "wasn't clear today who would replace Wagoner, or why the government had asked him to leave." The New York Times says on its front page that Wagoner's ouster "caught Detroit and Washington by surprise."
In contrast to the Free Press and New York Times, Detroit News reports, "Most industry insiders were not entirely surprised, given the political mood." Similarly, USA Today reports Wagoner's "opposition to bankruptcy as an option for GM could have played a factor in his ouster." In a front-page article, the Financial Times reports that a person close to GM said that "the government intervention made it likely GM would file for bankruptcy protection sometime in the next few weeks."
On CBS's Face The Nation, President Obama said, "We want to have a successful U.S. auto industry, but it's got to be one that is realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is. And that's going to mean a set of sacrifices from all parties involved."
In a front-page article, the Washington Post reports that the Administration "said yesterday that it would withhold additional federal aid to the auto industry unless the ailing companies undertake changes they so far have been unwilling or unable to make." Similarly, in a front-page article, the Wall Street Journal reports that, in "one of the most dramatic government interventions in private industry" during this economic crisis, "the Obama administration used the threat of withholding more bailout money to force out" Wagoner.
The AP reports, "If a Chrysler-Fiat union cannot be completed, Washington plans to walk away" and "leave Chrysler destined for a complete sell-off. No other money is available." In a front-page article, the Washington Times reports the Administration "is prepared to escort both companies through a kind of quick bankruptcy procedure that senior officials described as 'surgical' and may take no longer than 30 days."
The Politico reports "Industry sources had said the White House planned very tough medicine in Monday's announcement." The Detroit News reports, "Obama told four key Michigan members of Congress during a Sunday night conference call that he would grant unspecified additional aid to GM for 60 days and Chrysler for 30 days, according to a person familiar with the call."
The New York Times reports the Obama Administration went into sales mode on Sunday, with President Obama and a number of senior economic and military leaders blanketing the morning talk show circuit to advance the administration's efforts on the economy and the war in Afghanistan."
Treasury Secretary Timothy Geithner made his first appearances on the weekend talk shows, appearing on NBC's Meet the Press and ABC's This Week. Media sources noted Geithner defended his interventionist approach to dealing with the economic crisis, and his update on the remaining Troubled Asset Recovery Program funds.
The AP reports Secretary Geithner "defended his approach to fixing the country's economic mess Sunday, saying 'the market will not solve this' while disclosing a bailout fund for battered banks has $135 billion left and might need more." Geithner "used his first Sunday talk show appearances to promote President Barack Obama's massive government spending plan to ease credit, help borrowers and inject billions of dollars into the financial sector." On NBC's Meet the Press, Secretary Geithner said, "We can leave it as it is, hope banks will earn their way out of this process over time, and I am certain that would create the risk of a deeper, longer recession. Again, the classic lesson of financial crises, governments wait to act, they wait too late, and that means more damage to the economy, higher deficit in the future, greater cost for the taxpayer. We're not prepared to take that approach."
The Washington Times reports Secretary Geithner said the Federal Government "has spent all but $135 billion of the Wall Street bailout fund established by Congress last year." While "downplaying speculation that he and the Obama administration would ask Congress for more money to help failed banks, Mr. Geithner didn't dismiss the possibility either."
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US News Weekly's Katherine Skiba says the moderates "are calling for a 'return to fiscal sanity' and insist that Obama's budget needs to be modified to reflect 'the ever worsening fiscal reality.' One item unlikely to survive: Obama's middle-class tax cut of $400 per worker or $800 per couple."
Michael Barone, in his column for US News Weekly, says, "Roadblocks. That's what Barack Obama has been encountering on the audacious path toward a European-style welfare state he has set out in his budget and other proposals." Senate Budget Committee Chairman Kent Conrad "has apparently decided that cap-and-trade is off the table for this year."
Karen Tumulty, in Time, writes that Senate Finance Committee Chairman Max Baucus (D-MT) "has been surprising almost everyone, most notably by the zeal with which he is tackling what could be the toughest challenge of all: overhauling the health-care system to provide coverage for the more than 45 million Americans who lack it and to bring soaring costs under control. Indeed, Baucus' proposal, unveiled in an 89-page white paper eight days after the election, was even more ambitious than Obama's."
US News Weekly's Robert Schlesinger says the Obama campaign's "powerful grass-roots apparatus has been transplanted into the Democratic National Committee and is now called Organizing for America. It recently got its first marching orders, sending volunteers door-to-door around the country, campaign style, on behalf of the president's budget."
Krugman Is "Obama's Toughest Liberal Critic" Evan Thomas, in a cover story for Newsweek, says New York Times columnist Paul Krugman "has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. ... Though he was a scourge of the Bush administration, he has been critical, if not hostile, to the Obama White House." Newsweek also publishes a "sampling" of Krugman's New York Times columns.
Justin Fox, writing for Time, says that when Geithner "rolled out his long-awaited plan for buying up toxic mortgage loans and securities on March 23, reaction was split. Financial markets cheered," while "the chattering classes mostly grumbled, with...Krugman gloomily leading the way."
In his New York Times column Monday, Krugman says the US economy's "claims of financial soundness - claims often invoked as we lectured other countries on the need to change their ways - have proved hollow. Indeed, these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along."
Geithner Responds To Krugman's Criticism Michael Hirsh, in an article for Newsweek, says Geithner "prides himself on proceeding methodically -- the markets be damned. He's dismissive of critics. ... Among those critics is Krugman, who says the plan is another rich giveaway to Wall Street that won't make banks more solvent. Geithner scoffs at their proposed alternative, what he calls 'preemptive nationalization of the big institutions,' saying his critics have no idea what they're talking about." US News Weekly's Rick Newman says, "The Geithner Must Go momentum has clearly stalled."
As he prepares to attend the G20 summit this week, President Obama granted an interview to the Financial Times, in which he reached out to allies and called for global unity to confront the current financial crisis. Media analyses, however, suggest the President will face steep diplomatic hurdles during his trip. McClatchy, for example, reports Obama faces "a tough sell," because while "publicly, European and world leaders will embrace Obama...privately, they likely will say no to some of his requests." Likewise, the Wall Street Journal reports "It was supposed to be the inauguration of a Global New Deal," but "it is already clear that the summit will mostly fall short."
USA Today said while the President "is ready to take on the world economy...whether the world is ready for his remedy remains in doubt." The AP says "Obama's first European trip could dampen his hopes that a new diplomatic style will convert once-reluctant allies into cooperative global partners." On its front page, the Los Angeles Times says Obama "faces leaders from both Europe and Asia who have already rejected some of his most important proposals for rescuing the global economy -- including his call for more stimulus spending."
In an analysis titled "Obama Heads Back To Europe, Challenges In Tow," the New York Times reports "strategists in both parties say Americans, too, remain interested in watching Mr. Obama on the world stage." In his interview with the Financial Times, Obama emphasized "the need for G20 leaders to be singing from the same song sheet: 'The most important task for all of us is to deliver a strong message of unity in the face of crisis,' he says."
Asked to comment on the meme that the war in Afghanistan is now "Obama's war," because he has had a chance to present his own strategy, President Obama, on CBS's Face The Nation, said, "I think it's America's war. It's the same war that we initiated after 9/11 as a consequence of those attacks on 3,000 Americans...and the focus over the last seven years I think has been lost. What we want to do is to refocus attention on Al Qaeda." President Obama went on to say he will not "simply assume that more troops always results in an improved situation. ... Just because we needed to ramp up from the greatly under-resourced levels that we had doesn't automatically mean that if this strategy doesn't work, that what's needed is even more troops."
During the interview, the Washington Post reports, the President, "stuck to discussing a battle against al-Qaeda and said little about the Taliban." The Chicago Tribune, meanwhile, notes that "invoking a lesson of Vietnam," Obama also "said Sunday that stepped-up military operations in Afghanistan against Al Qaeda and its Taliban allies do not represent 'an open-ended commitment of infinite resources.'"
Asked about the President's plan during an interview with Fox News Sunday, Defense Secretary Robert Gates said, "I think the near-term objectives have been narrowed. I think our long-term objectives still would be to see a flourishing democracy in Afghanistan, but I think what we need to focus on...is making head way and reversing the Taliban's momentum and strengthening the afternoon army and police, and really going after Al Qaeda, as the President said."
USA Today (reports, "The additional troops Obama is sending to Afghanistan will focus not on battling Taliban insurgents face-to-face, but on improving security in far-flung villages such as Bakwa by winning the trust of the local population, one farmer at a time." The Washington Post reports, "The convergence of three factors" in Afghanistan "is raising concerns that the country's fragile equilibrium could collapse under so many contradictory pressures." The concerns include "a major new thrust of U.S. military and political involvement, an expected answering surge in attacks by Islamist fighters, and tensions over an upcoming presidential election in August."
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New York's Adirondack Daily Enterprise reports a Siena Research poll shows Scott Murphy (D) now leads Assemblyman Jim Tedisco (R) 47%-43% in the run up to Tuesday's NY20 special election, turning around a 12-point deficit. Meanwhile, The Washington Post reports this morning that the DNC is only spending $10,000 airing a TV ad touting Murphy that features President Obama's image, and that its purpose it to "ensure" that the White House and DNC "won't get blamed if Murphy comes up short" and "Producing an ad, any ad, gives them political cover."
The AP reports that Arizona Sen. John McCain (R) "isn't committing to supporting his vice presidential pick, Alaska Gov. Sarah Palin, if she runs for president in 2012, saying on NBC's Meet the Press yesterday that "he has great affection for Palin and her family," but also cited "three other governors -- Utah's Jon Huntsman, Louisiana's Bobby Jindal and Minnesota's Tim Pawlenty as potential candidates."
Minnesota's Norm Coleman (R) is primarily making headlines these days for his still-contested recount against Al Franken (D), but the Minneapolis Star Tribune reported, "The former finance chief of a Texas company controlled by Nasser Kazeminy, a close friend of" Coleman's, "said in a deposition last week that Kazeminy ordered $100,000 in fees be paid to a Minneapolis insurance agency where Coleman's wife was employed."
The Atlanta Journal-Constitution reported over the weekend that Georgia Secretary of State Karen Handel (R) on Friday joined Lt. Gov. Casey Cagle (R) and Insurance Commissioner John Oxendine (R) in the growing field to replace term-limited Gov. Sonny Perdue (R). Meanwhile, the Atlanta Journal-Constitution later reported former Gov. Roy Barnes (D) is also considering running again for his old job.
On its front page, the Lakeland Ledger reported that Florida Chief Financial Officer Alex Sink (D) has become "more aggressive" as she seeks to increase her public profile prior to a potential gubernatorial bid.
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Jay Leno: "President Obama has announced a task force to review the tax code. He's concerned there are too many loopholes and too many people manipulating the system to avoid paying taxes. And that's just in his administration."
Jay Leno: "President Obama said this week that things will get worse before they get better. That's something you never hear before the election, you know? 'Let me tell you, if I get elected it's going to get a lot worse!'"
Jimmy Fallon: "Looking back at his presidential run this week, John McCain said that he got a lot of votes because of Sarah Palin. And weirdly enough, that's the same thing President Obama said."
Jimmy Fallon: "President Obama said yesterday that he believes that Osama bin Laden is plotting new attacks against the United States. Obama came up with this theory when he picked up any newspaper from the last eight years."
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