Next Stop: Help With Housing

By Dan Froomkin
11:57 AM ET, 02/13/2009

I'm taking President's Day off. Posting will resume Tuesday morning.

Remember what started this whole mess in the first place? Even as President Obama' s massive stimulus bill faces its final test in Congress today, the White House is looking ahead to its next big move: addressing the foreclosure problem that is at the heart of the economic downturn.

Obama told an audience of more than 80 American chief executives this morning that passing the stimulus "is a critical step, but as important as it is, it's only the beginning of what I think all of you understand is going to be a long and difficult process of turning our economy around. To truly address this crisis, we will also need to address the crisis in our financial sector to get credit flowing again to families and businesses. And we need to confront the crisis in the housing sector that's been one of the sources of our economic challenges. I'll be discussing that extensively soon."

Renae Merle writes in today's Washington Post: "The Obama administration is considering a proposal to help distressed homeowners by subsidizing lenders who cut the interest rate on mortgages, according to sources familiar with the discussions.

"The sources cautioned that the administration is still weighing several options for addressing the country's growing foreclosure problem. The Treasury Department has set aside $50 billion for a homeowner relief program, which officials said was likely to be announced within the next week....

"The initiative would include both carrots and sticks for lenders, said lawmakers briefed by the administration. For example, it would probably endorse legislation to allow bankruptcy judges to change the terms of mortgage loans, a measure opposed by the industry. But the program would also include legal protections for lenders that modify loans but fear being sued by investors. Government subsidies could be among the inducements for lenders, the lawmakers said."

Today, though, Obama was pitching his stimulus package to the business leaders. It "will ignite spending by businesses and consumers, make the investments necessary for lasting economic growth and prosperity, and save or create more than 3.5 million jobs over the next two years," he said.

Meanwhile, Congress just last night finally Web-published copies of the actual bill. And, man, This thing really is huge. If you want to peruse it, you're much better of using ProPublica's reader-friendly version.

Shailagh Murray and Paul Kane, writing in The Washington Post, spend a little time looking at the things that vanished in conference from one version or another -- you know, $300,000 for a Justice Department program to fight violence against women, $65,000 for a watershed construction project, and, yes, $20 billion in school construction.

But consider what's there:

"Broadband investment totaling $7.2 billion would target poor and rural areas. The Department of Homeland Security would receive $1 billion to upgrade airport baggage and checkpoint screening. In a victory for rail advocates, the bill includes $9.3 billion to develop high-speed trains and to improve Amtrak....

"Public housing provisions total nearly $10 billion. Nearly $15 billion would go to clean-water and environmental protection projects. Minus the construction money, education programs would receive nearly $100 billion in new funding, including $12 billion for special education, boosting the federal share for education services to the highest level ever, according to the Senate Appropriations Committee.

"The bill would make a significant down payment on Obama's health-care and energy agendas. It would provide nearly $20 billion to adopt uniform medical-records technology, portrayed as a job-creating exercise and part of the foundation for broader health-care reform. It also includes more than $40 billion for energy-efficiency programs and new energy technologies, including $11 billion to upgrade the national electricity grid.

"Individuals who have lost their jobs during the ongoing recession would receive health-care and unemployment assistance. The bill would provide a $20 billion increase in the food stamps program and $2.1 billion to expand Head Start.

"On the tax side, the bill calls for a two-year $400 credit to working individuals and $800 to working couples, distributed through a payroll tax deduction or claimed as a lump sum for the 2009 and 2010 tax years. Social Security recipients would receive a one-time $250 payment."

And that's just for starters. It's quite the list.

Michael A. Fletcher writes in The Washington Post: "President Obama on Thursday touted the $789 billion economic stimulus package nearing congressional approval, telling workers at a huge manufacturing plant here that 'a new wave of innovation, activity and construction will be unleashed all across America' once the plan is enacted."

Christi Parsons writes in the Los Angeles Times: "Obama offered his best case for optimism, promising that the largesse of the recovery plan ready for congressional approval will help companies such as Caterpillar weather the recession. Congress is moving toward passage this weekend.

"'When they finally pass our plan, I believe it will be a major step forward,' the president said. 'I'm not the only one who thinks so,' he said, pointing out Caterpillar Inc. Chief Executive Jim Owens in the crowd.

"Obama said Owens told him that once the money starts flowing, 'this company will be able to rehire some of the folks who were just laid off.'

"'That's a story I'm confident will be repeated across the country,' the president said.

"After the event, however, the Associated Press reported that Owens said he didn't expect quick improvement. 'The reality is we'll probably have to have more layoffs before we can start hiring again,' he said."

And what, exactly, was the White House's role in shaping the bill?

Carl Hulse and Jeff Zeleny write in the New York Times: "The negotiations over the largest economic rescue plan since the New Deal offered a window into how the relationship between the White House and Congress will take shape over the next four years, with a West Wing filled with more alumni of the House and Senate than any recent administration....

"By combining this intimate familiarity with Congress and its personalities with a speed-dial approach to negotiations, administration officials and lawmakers say they have achieved a series of rapid victories, putting them on the verge of winning approval of an economic plan that retains Mr. Obama's original core principles. The president has already signed into law an expansion of children's health care and a wage antidiscrimination law and avoided a showdown over bank bailout funds...

"Some lawmakers believe it was a mistake for the administration to cede so much responsibility to House Democrats for putting the initial bill together. It resulted in a measure that came under fire from Republicans and even some Democrats for focusing too heavily on traditional Democratic spending priorities, and it had to be stripped of some initiatives like contraception and restoring the National Mall after critics highlighted the spending....

"But White House officials pointed to several reasons why they did not consider writing their own bill and sending it to Congress for fast-track approval by the Democratic majority.

"Mr. Obama, they said, had not even taken office when the House began working on the legislation. Moreover, they said, if the new administration put a full plan on the table, it would inevitably have been picked apart by both parties. And Mr. Obama directed his staff members to set a respectful tone, keeping in mind that Republicans would be needed on future issues like energy and health care reform.

"But after the House and the Senate each had worked through the bill, the White House stepped in aggressively this week and took control of the measure."

Indeed, Richard Wolf writes for USA Today: "A $790 billion economic stimulus plan that is headed toward final approval in Congress today came together quickly this week because the Obama administration offered a detailed compromise to 'make this the president's plan,' White House chief of staff Rahm Emanuel said.

"To persuade Democrats and Republicans to make concessions, Emanuel said the White House put 'some skin in the game' by offering to trim its major tax cut. Instead of saving individuals $500 and couples $1,000 this year and next, the accord calls for $400 and $800....

"Obama also agreed to accept a $70 billion tax cut aimed at middle-class families who are threatened by the alternative minimum tax, although it lacks much stimulative effect. 'It was the price for getting a deal done,' Emanuel said."

So does this mean Obama gets to celebrate? Republicans obviously don't think so. And neither do some liberals.

Paul Krugman writes in his New York Times opinion column: "Mr. Obama's victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama's postpartisan dreams."

On that last point, Krugman writes that "it's now clear that the [Republican] party's commitment to deep voodoo — enforced, in part, by pressure groups that stand ready to run primary challengers against heretics — is as strong as ever. In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration's tax cuts is more Bush-style tax cuts.

"And the rhetorical response of conservatives to the stimulus plan — which will, it's worth bearing in mind, cost substantially less than either the Bush administration's $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq — has bordered on the deranged."

Don't miss my earlier post on the withdrawal of Republican Judd Gregg as commerce secretary nominee -- and what it says about Obama's hopes for bipartisanship.

Krugman concludes: "I don't know about you, but I've got a sick feeling in the pit of my stomach — a feeling that America just isn't rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice."

The New York Times editorial board writes that "the $789 billion stimulus and recovery package that Congress approved this week could have accomplished more than it did.

"The bill is, for the most part, a step in the right direction. But political wrangling, including President Obama's futile pursuit of bipartisanship, rendered it smaller and less focused than it needed to be....

"The administration's next shot at advancing its economic aims will be Mr. Obama's first budget. The new president should stop courting Republicans who have shown no interest in compromise or real economic fixes. The budget resolution is immune from filibustering. If every Republican wants to vote against it, Mr. Obama should leave them to explain that decision to voters who are in danger of losing their jobs or their houses or both."

John Judis writes for the New Republic: "There are many good things to say about the stimulus bill. But all in all, it wasn't as good as it could be: It's probably too small and too skewed toward tax cuts, and particularly cuts for upper-income people who won't necessarily spend them. The bank bailout is, well, a mystery, but at best a political fiasco."

His proposed solution is for strident leftist critics to stop holding back -- and start agitating for Obama to go well beyond where he would even ideally like to go.

Truth Commission Watch

By Dan Froomkin
11:54 AM ET, 02/13/2009

Senate Judiciary Committee Chairman Patrick Leahy writes on Huffingtonpost.com: "We have just emerged from a time when White House officials often acted as if they were above the law. That was wrong and must be fully exposed so it never happens again....

"I have set up a petition at BushTruthCommission.com, and I hope you will sign it to urge Congress to consider establishing a truth and reconciliation commission to investigate the Bush-Cheney administration's abuses....

"Rather than vengeance, we need a fair-minded pursuit of what actually happened. The best way to move forward is getting to the truth, finding out what happened, so we can make sure it does not happen again."

Meanwhile, Joe Conason writes for Salon that Obama should "consider the creation of a presidential commission whose aims would be purely investigative -- and encourage the participation of those implicated in the abuses of the past by promising a complete pardon to anyone who testifies fully, honestly and publicly.

"With that gesture, he would acknowledge the importance of uncovering the facts, no matter how ugly, while magnanimously binding up the nation's wounds. He could leave the issue of criminal prosecution to international authorities that can act without any partisan taint. And he could seek truth without vengeance."

The Wall Street Journal editorial board, by the way, is celebrating what it calls Obama's embrace of Bush's policies on secrecy and rendition: "President Obama has done a masterful job disguising his Administration's growing antiterror maturity, but this week produced further evidence that he is erring on the side of keeping the country safe rather than appeasing the political left. The Justice Department filed to dismiss a federal appeals case involving rendition, embracing an argument developed by...the Bush Administration.

"In other words, the anti-antiterror lobby is being exposed as more radical than its putative banner carrier. As Mr. Obama is learning, the left's exertions to disarm the country's counterterrorism arsenal are as dangerous now as they were prior to his election."

Quick Takes

By Dan Froomkin
11:52 AM ET, 02/13/2009

Chris Soghoian writes for CNET that President Obama's vaunted BlackBerry could conceivably let enemies track the president's real-time physical location.

Robert Burns writes for the Associated Press: "President Barack Obama's go-slow approach to missile defenses in Europe is stirring speculation that he is planning either to deep-freeze the costly project he inherited from the Bush administration or use it as a bargaining chip in broader security talks with Russia."

Christi Parsons and Ray Long write for Tribune from Springfield, Ill.: "President Barack Obama returned Thursday to the city where he and Abraham Lincoln both first served the state and launched their national political careers, marking the Great Emancipator's 200th birthday by calling on Americans to draw strength from his example as they soldier through tough times."

Philip Elliott writes for the Associated Press: "President Barack Obama is getting away from Washington for a few days to his home in Chicago, leaving behind Cabinet headaches and a partisan divide over his economic stimulus package."

Matthew Richardson and Nouriel Roubini write in a Washington Post opinion piece: "The U.S. banking system is close to being insolvent, and unless we want to become like Japan in the 1990s -- or the United States in the 1930s -- the only way to save it is nationalization."

Lori Stahl writes in the Dallas Morning News: "Former President George W. Bush's first public speaking engagement since leaving office will be a lunch speech in Canada next month. Invitations are in the mail now, but the event is not open to the public. Bush, who has been at his Crawford ranch since leaving the White House Jan. 20, will 'share his thoughts on his eight momentous years in the Oval Office,' the invitation promises."

Irreconcilable Differences

By Dan Froomkin
9:59 AM ET, 02/13/2009

In happier times: Obama introduces Gregg as commerce secretary nominee on Feb. 3. (AP)

The voters sent President Obama to Washington with a mandate to change the way this town works. But yesterday's decision by GOP Sen. Judd Gregg to withdraw as the commerce secretary nominee is the latest sign that the Republican Party has no interest in going along.

Obama, while aggressively pursuing a traditionally Democratic agenda, has nevertheless said that in the long run he and Republicans can find a considerable amount of common ground around shared values and pragmatism.

But Gregg's withdrawal is yet more evidence either that Obama underestimated the ideological gulf between the elected officials of the two parties, or that Republicans are getting more rather than less hostile towards efforts to reach out. Or both.

Consider that in the 10 days since Obama publicly introduced Gregg as his nominee -- several weeks after Gregg apparently approached the White House with the idea -- the president's positions haven't changed. Gregg cited concerns about the stimulus package and direction of the 2010 Census in his initial statement yesterday. But Obama's views on the stimulus have been consistent for a long time.

The census is a traditionally thorny political issue, with Democrats being much more keen than Republicans on ensuring minorities and the poor are properly counted. And the White House last week did indicate it would increase its oversight -- possibly because of concerns about Gregg's history of supporting census budget cuts. But in a news conference yesterday, Gregg clarified that the census was "only a slight catalyzing issue. It was not a major issue."

So what did change? Republicans, who found themselves in disarray after their resounding defeats in the 2008 elections, have been feeling increasingly emboldened -- and defined -- by their opposition to Obama's presidency in general, and his massive stimulus package in particular.

And while Gregg was personally gracious towards Obama in his public statements, Republican leaders welcomed the senator back to their fold as a returning hero, his decision a rebuke to Obama's agenda and the president's attempts to co-opt the GOP.

The AFP reports that Obama told reporters aboard Air Force One late yesterday that his crusade for bipartisanship would continue.

"I am going to keep on working at this," he said, adding that Americans were "desperate" for their leaders to find common ground.

"I am an eternal optimist."

The AP reports that Obama even joked about what happened at a dinner honoring Abraham Lincoln's 200th birthday last night: "In 1854, Lincoln was simply a Springfield lawyer who'd served just a single term in Congress," Obama said as he tried to imagine Lincoln writing about national unity.

"Possibly in his law office, his feet on a cluttered desk, his sons playing around him, his clothes a bit too small to fit his uncommon frame, maybe wondering if somebody might call him up and ask him to be commerce secretary ..."

But the fact remains that Gregg's departure is a setback for Obama in any number of ways, not just because it frustrates his ideas of bipartisanship. It distracts from his focus on addressing the financial crisis and adds to the sense that he is having a peculiarly hard time filling his Cabinet.

Anne E. Kornblut and Michael D. Shear write in The Washington Post: "Saying he 'made a mistake,' Republican Sen. Judd Gregg withdrew yesterday as the nominee for commerce secretary, dealing a fresh blow to President Obama's quest to fill out his Cabinet and dramatically undercutting his efforts to forge a new bipartisanship in the capital....

"Senior Obama officials portrayed the latest personnel debacle as reflecting badly on Gregg alone, insisting they are still on course to change the tone in Washington and implement the president's policies. But aides acknowledged that it is now clear that Obama has not been rewarded for reaching across the aisle, and they said he feels no imperative to replace Gregg with another Republican."

Kornblut and Shear write that White House officials pointed "to Gregg's seemingly peculiar decision to accept a job that would, by definition, require him to adhere to the positions that he later claimed drove him away....

"'I think what ended Judd Gregg's hope of and desire of being the commerce secretary wasn't anything any Democrat said or did, but what Republicans said and did,' a senior administration official said, speaking on the condition of anonymity. Democratic officials said they believed Gregg would have potentially faced rough questioning from Republicans during his confirmation hearings as they worked to find the GOP's footing as an opposition party."

But as Kornblut and Shear note: "The episode underscored how burdensome Cabinet selection has become for the new administration, which has watched nearly half a dozen of its top appointees withdraw or face embarrassing scrutiny over the past several weeks."

And the snark, of course, is inevitable. Al Kamen writes in The Washington Post: "With Sen. Judd Gregg's rediscovery yesterday that he was actually a Republican and that President Obama favored a stimulus package, Obama may be en route to setting a new world indoor record for top-tier nomination withdrawals."

Martin Kady II and David Rogers write in Politico that Gregg publicly took the blame. "'The fault lies with me,' Gregg told Politico. He refused to discuss any conversations he had with Obama, saying, 'I may have embarrassed myself, but hopefully not him.'"

Gregg told reporters of Obama: "I immensely respect him. I know he's going to be a strong and effective and good president. But for me, I just realized as this issues started to come at us and as they started to crystallize, that it really wasn't a good fit."

But Paul Kane writes in The Washington Post: "Despite Gregg's assurances that he was to blame, leading Republicans said the move amounted to a repudiation of Obama's liberal agenda and a rebuke of his bipartisan outreach....

"'He was uncomfortable philosophically with the position he would be put in,' said Senate Minority Leader Mitch McConnell (R-Ky.).

"McConnell said that he had spoken regularly with Gregg since he decided to accept the nomination and that in recent days Gregg increasingly indicated doubts about taking the job. McConnell said he expects Gregg to receive a 'standing ovation' when he walks into the next gathering of the Senate Republican Conference....

"After recusing himself from Senate procedures since his nomination Feb. 3, Gregg will return for the stimulus vote, expected today. He has refused to say how he will vote. His Republican friends expect him to oppose the measure, giving them the symbolic victory of a former Obama insider voting against the legislation."

Charles Mahtesian writes for Politico: "Judd Gregg was all but dead to his Republican colleagues just a few days ago, another collaborator drinking the Obama Kool-Aid.

"But the New Hampshire senator's surprise decision to remove himself from consideration as President Barack Obama's Commerce secretary Thursday has provided the GOP with a new rallying cry, and a new hero against a foe who just a few weeks ago seemed almost unassailable.....

"By citing reservations about the economic recovery package, Gregg reinforced widespread GOP criticism about wasteful spending that has less to do with reviving the economy than rewarding Democratic constituencies. And by noting his differing view on the census, Gregg breathed life into Republican charges of a White House power grab over a critical Commerce Department function.

"Both issues are part of an emerging GOP case against Obama and the ruling Democratic Party: Strip away the new face, the lofty rhetoric and the promises of post-partisanship and you'll find the same big-spending party of old, bent on politicizing government to consolidate its hold on power....

"In its diminished but highly concentrated form — the result of two elections that all but purged the party of its wayward moderates — the GOP is showing signs it's regained its mojo, and some see Judd Gregg's withdrawal as a pivotal moment in the building process."

And here's one more thing to keep in mind: Who really cares about The Commerce Department, anyway? Gregg made more news yesterday than he would have during his entire tenure.

Charles Babington writes for the Associated Press: "Quick, who headed the Commerce Department under President George W. Bush?

"No disrespect to Carlos M. Gutierrez, but commerce secretary is not one of Washington's more glamorous jobs...

"Over the long run, Obama's difficulty in filling the Commerce post may prove little more than a time-consuming distraction when he needs to focus on the economic crisis.

"'Let's be honest,' White House Chief of Staff Rahm Emanuel told reporters Thursday night. 'Will the economic recovery or Judd Gregg be a bigger discussion point a week from now?'"

Here's the official White House reaction yesterday: "Senator Gregg reached out to the President and offered his name for Secretary of Commerce. He was very clear throughout the interviewing process that despite past disagreements about policies, he would support, embrace, and move forward with the President's agenda. Once it became clear after his nomination that Senator Gregg was not going to be supporting some of President Obama's key economic priorities, it became necessary for Senator Gregg and the Obama administration to part ways. We regret that he has had a change of heart."

Here's what Gregg said when Obama introduced him as the commerce nominee on Feb. 3: "We are, as you noted, in the middle of a very difficult economic time. People are worried about their jobs. They're worried about how they're going to pay their bills. They're worried about how they're going to send their kids to college. And you've outlined an extraordinarily bold and aggressive, effective and comprehensive plan for how we can get this country moving.

"This is not a time for partisanship. This is not a time when we should stand in our ideological corners and shout at each other. This is a time to govern and govern well."

Gregg's decision spurred predictably fighting words from Karl Rove, who wrote in a Washington Post survey of pundits: "What Judd Gregg showed today is that he's not willing to swap his integrity for a place in the Cabinet."

Rove didn't let facts get in the way of his narrative, either: "[W]hen the administration set aside its own principles of 'temporary, targeted and timely' stimulus measures to embrace a big spending measure full of programs that Gregg has opposed since coming to Congress, New Hampshire's senior senator realized that he was window dressing and that the administration had a greater interest in grabbing his Senate seat in 2010 than in listening to his counsel today."

Obama's stimulus measure was, of course, well-defined by the time Gregg signed on; and he said yesterday he's not running for re-election anyway.

In that same Post survey, Larry J. Sabato writes: "The Gregg withdrawal can be a watershed. It's been a grand and noble experiment, but now the Obama administration should abandon aggressive bipartisanship. The president deserves great credit for reaching out to Republicans in Cabinet appointments, frequent consultation and some substantive compromise on the stimulus bill. President Obama read public opinion correctly: Americans want civil debate between the parties, and that aspect of bipartisanship should be continued.

"Yet pleasantries should never be exchanged at the cost of an electoral mandate."

Andrew Sullivan blogs for the Atlantic: "When Judd Gregg approached the Obama administration to see if he could be a part of it, he was assuming that his own party wasn't going to adopt a policy of total warfare against the newly elected president in a time of enormous economic peril. Between that moment and the current all-out ideological assault on Obama, his position became untenable."

Damon Linker blogs for the New Republic: "I wonder: What will these folks do when and if the polls show that Obama's approval ratings remain high? Will they then recognize how far out of synch they are with the mood of the country? Or will they burrow deeper into denial, indulging in endless fantasies of Obama's self-immolation?"

And plenty of progressives, who weren't happy about Gregg's nomination in the first place, are anything but brokenhearted. Chris Bowers blogs for OpenLeft: "You know, I have never seen so many Democratic activists so happy about what is apparently a major defeat for Democrats. Every blog post, and virtually every comment I read, is ecstatic."

Axelrod Bristles at Bushies' Criticism

By Dan Froomkin
9:52 AM ET, 02/13/2009

Youch! Here's a clip from Washington Post reporter Lois Romano's interview with senior White House adviser David Axelrod, who takes issue with former vice president Cheney's assertion that President Obama's policies are putting the nation at increased risk of a devastating attack, former senior adviser Karl Rove's endless commentary, and former chief of staff Andrew Card's declaration that by foregoing a suit jacket in the Oval Office, Obama and his aides were insufficiently respecting the presidency. (Here's the full transcript.)

Romano initially asked about Cheney's comments. Said Axelrod: "I was disappointed in the vice president's comments, not because he stated the obvious -- that there are threats that are grave -- but that he suggested that somehow the president's decisions on torture and Guantanamo would increase the likelihood of that. You know, one of the things that I've been impressed by is the graciousness that President Bush has shown during this transition period...When he left, he wished us the best, and I think that he meant that -- but apparently, the memo didn't circulate around the White House, because I've seen what I consider tasteless comments by the vice president, amazing comments by Karl Rove. You know, the last thing I think we're looking for at this juncture is advice on fiscal integrity -- or ethics -- from Karl Rove. I mean, anyone who's read the newspapers for the last eight years would laugh at that....

"I've never seen anything really like it."

And, finally, Axelrod said: "Andy Card, saying that we were somehow denigrating the presidency because we were wearing shirtsleeves in the Oval Office -- well we're wearing shirtsleeves because we have to roll up our sleeves and clean up the mess that we've inherited."

Cartoon Watch

By Dan Froomkin
9:50 AM ET, 02/13/2009

Tom Toles, Dan Wasserman, John Sherffius, and Rob Rogers on bipartisanship, Jimmy Margulies on the daily embarrassment.

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