History > 2009 > USA > Politics > White House /
at his White House news conference on Monday
where he discussed the Democratic stimulus plan
and opposition to it by
Ruth Fremson/The New York Times
Taking on Critics, Obama Puts Aside Talk of Unity
Obama Issues Ultimatum to Carmakers
March 31, 2009
The New York Times
By SHERYL GAY STOLBERG and BILL VLASIC
WASHINGTON — President Obama announced what amounts to a do-or-die ultimatum
for the struggling automobile industry on Monday, laying out strict standards
that the carmakers must meet to get more government aid and declaring that the
industry must survive because it is “like no other, an emblem of the American
A failure of leadership “from Washington to Detroit” over the years has led the
industry to the brink of collapse, the president said, and in more recent days
both General Motors and Chrysler have failed to come up with plans adequate to
justify the billions more in government help that they are requesting.
“And so today, I am announcing that my administration will offer G.M. and
Chrysler a limited period of time to work with creditors, unions and other
stakeholders to fundamentally restructure in a way that would justify an
investment of additional tax dollars; a period during which they must produce
plans that would give the American people confidence in their long-term
prospects for success,” the president said at the White House.
Speaking a day after the White House pushed out the chairman of G.M., Mr. Obama
said Chrysler has been instructed to form a partnership with the Italian
automaker Fiat within 30 days as conditions for receiving another much-needed
round of government aid.
The president said he was designating Edward Montgomery, a former deputy labor
secretary, to oversee the auto-recovery effort. His mission will be
far-reaching, to cut through government red tape and identify initiatives to
support those communities hit hard by the industry’s troubles.
Other salient features of the latest plan to pull Detroit out of its
decades-long skid include a tax break, being started by the Internal Revenue
Service at once, for auto purchases made between Feb. 16 and the end of 2009;
incentives for people to turn in older, less fuel-efficient vehicles and buy
more energy-efficient cars, and government-backed warrants to assure customers
that they have nothing to fear by buying a car from G.M. or Chrysler.
While the president’s announcement embodies firm government control of the car
industry, at least for the time being, he said, “These companies — and this
industry — must ultimately stand on their own, not as wards of the state.”
Mr. Obama said his administration has been working closely with the Canadian
government, which was to announce its own “specific commitments” later Monday.
Both G.M. and Chrysler have extensive operations north of the border.
The concept of encouraging people to buy more fuel-efficient cars, which has
been tried with considerable success in Europe, will require the cooperation of
Congress. Mr. Obama said he would work with lawmakers to identify portions of
the recently enacted multibillion-dollar stimulus package that could be trimmed
to finance the purchase-incentive idea — and make it effective at once.
General Motors, in a statement released after the president’s comments, said
that over the next 60 days, the company would try to “address the tough issues
to improve the long-term viability of the company, including the restructuring
of the financial obligations to the bond holders, unions and other
“Our strong preference is to complete this restructuring out of court,” G.M.
said. “However, G.M. will take whatever steps are necessary to successfully
restructure the company, which could include a court-supervised process.”
The president tried to project optimism as he summoned images of Detroit’s
mighty past, even as he spoke of decades of complacency and problems left for
another day “even as foreign competitors outpaced us.”
“Well, we have reached the end of that road,” he said. “And we, as a nation,
cannot afford to shirk responsibility any longer.”
The president did not mention Ford, the other company in Detroit’s Big Three.
While it has had problems, Ford has not yet found it necessary to seek
The president envisioned an auto industry much different, almost surely smaller,
and more nimble. Yet in doing so, and voicing confidence that the industry can
travel that road, he recalled an earlier Detroit that “built an arsenal of
democracy that propelled America to victory in the Second World War, and that
powered our economic prowess in the first American century.”
The decision to ask G.M.’s chairman and chief executive, Rick Wagoner, to resign
caught Detroit and Washington by surprise, and it underscored the Obama
administration’s determination to keep a tight rein on the companies it is
bailing out — a level of government involvement in business perhaps not seen
since the Great Depression.
“This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to
this company; rather, it’s a recognition that it will take a new vision and new
direction to create the G.M. of the future,” Mr. Obama said.
The president made clear that some form of bankruptcy, or something close to it
— a quick, court-supervised restructuring, as officials described it in advance
— could still be an option for G.M. or Chrysler or both. “What I am not talking
about is a process where a company is broken up, sold off, and no longer
exists,” the president said.
Mr. Obama’s auto industry task force, in a report released Sunday night
assessing the viability of both companies and detailing the administration’s new
plans for them, concluded that Chrysler could not survive as a stand-alone
The report said the company would get no more help from the government unless it
can finalize a proposed alliance with the Italian automaker Fiat by April 30. It
must also reduce its debt and health-care obligations.
If a deal is reached between Chrysler and Fiat, the administration says it would
consider another loan of $6 billion to Chrysler.
G.M., on the other hand, has made considerable progress in developing new
energy-efficient cars and could survive if it can cut costs sharply, the task
force reported. The administration is giving G.M. 60 days to present a
cost-cutting plan and will provide taxpayer assistance to keep it afloat during
Although some observers of the auto industry have attributed Detroit’s troubles
in part to generous wages and health benefits for assembly line workers, the
president made no mention of those factors. “The pain being felt in places that
rely on our auto industry is not the fault of our workers, who labor tirelessly
and desperately want to see their companies succeed,” he said. “And it is not
the fault of all the families and communities that supported manufacturing
plants throughout the generations.”
Rather, he said, there has been a failure of leadership.
Along with Mr. Wagoner’s ouster, the task force said most of the company’s board
would be replaced over the next few months. In a statement Monday, Mr. Wagoner
said he had been urged to “step aside” by administration officials, “and so I
His resignation is the latest example of the government taking a hands-on role
in making major decisions at companies it is bailing out. The government has
already pushed banks to make management changes and sharply reduce or eliminate
their dividends, and it also is directing many of the decisions at the troubled
insurance giant American International Group, which is nearly 80 percent owned
by the government after its rescue.
In deciding to urge Mr. Wagoner to step down, the Obama administration seemed
mindful of the public’s growing outrage over bailouts of private companies, as
well as the bonuses paid to employees of A.I.G.
Mr. Obama is well aware that he cannot afford to give the appearance of using
tax dollars to reward executives who have done a poor job, and he began
signaling as early as last week that he would take a tough stance with the
The plan Mr. Obama announced on Monday will also include government backing of
warranties for G.M. and Chrysler cars and trucks, to give consumers enough
confidence to buy them, even if one or both are forced into bankruptcy.
Mr. Wagoner has presided over a steep drop in G.M.’s domestic market share,
which has led to tens of billions of dollars in losses. His critics have said
that management’s failure to move aggressively to address the company’s problems
contributed to its dire financial situation.
G.M. and Chrysler have almost exhausted the combined $17.4 billion in federal
aid they have received since December. G.M. has asked for up to $16.6 billion
more, and Chrysler has requested another $5 billion.
Bondholders are under pressure to convert two-thirds of the $27 billion owed
them into G.M. stock, while the United Auto Workers union is being asked to
substitute stock for 50 percent of their health care benefits for retirees. Both
groups have resisted those changes.
Administration officials say they have enough money to offer the assistance they
envision under plans already approved by Congress. Even so, Mr. Obama may face
skepticism on Capitol Hill and from the public.
As part of the companies’ original agreement for the loans, both were required
to submit restructuring plans. Mr. Wagoner’s removal underscores how much more
G.M. needs to cut than was proposed in the plan the company submitted.
Administration officials stressed that the company needed a fresh approach and
leadership changes; they said Steven Rattner, the former investment banker who
co-chairs the auto task force, delivered the news to Mr. Wagoner.
Frederick A. Henderson, G.M.’s president, will succeed Mr. Wagoner on an interim
basis as chief executive; Kent Kresa, a board member, will assume the
chairmanship. Members of the auto panel spoke with Mr. Henderson recently and
came away with a favorable impression of him, people familiar with the panel’s
G.M. collapsed last fall when new-vehicle sales in the United States plummeted
to their lowest level in 25 years. G.M. lost more than $30 billion in 2008, and
has been subsisting on government loans since the beginning of the year.
The administration briefed lawmakers on the plan Sunday night. Afterward,
Representative Thaddeus G. McCotter, Republican of Michigan, whose district is
just outside Detroit, expressed frustration over the ousting of Mr. Wagoner and
with administration officials for not being clearer about the potential job
losses that lie ahead.
“Why would you ask Rick Wagoner to resign when you are giving G.M. 60 days to
meet a new target, but you aren’t saying what the new goal is yet,” Mr. McCotter
said in an interview.
Sheryl Gay Stolberg reported from Washington and Bill Vlasic from Detroit.
Micheline Maynard and Nick Bunkley contributed reporting from Detroit and David
M. Herszenhorn from Washington.
Obama Issues Ultimatum
to Carmakers, NYT, 31.3.2009,
Obama Unveils Afghan Plan to Add Troops and Set Goals
March 26, 2009
The New York Times
By PETER BAKER and THOM SHANKER
WASHINGTON — President Obama said on Friday that he plans to further bolster
American forces in Afghanistan, increase aid to Pakistan, and for the first time
set benchmarks for progress in fighting Al Qaeda and the Taliban in both chaotic
In strikingly ominous tones, Mr. Obama warned — just as President George W. Bush
did repeatedly over the years — of intelligence estimates that al Qaeda “is
actively planning attacks on the U.S. homeland from its safe haven in Pakistan.”
“The situation is increasingly perilous,” he told government officials, top
military officers and diplomats in remarks at the White House.
He added, “We have a clear and focused goal to disrupt, dismantle and defeat al
Qaeda in Pakistan and Afghanistan, and to prevent their return to either country
in the future.”
But President Obama promised neither to write a “blank check” nor to “blindly
stay the course” if his risky new strategy does not achieve its ambitious goals.
In imposing conditions on the Afghans and Pakistanis, Mr. Obama is replicating
an approach used in Iraq two years ago both to justify a deeper American
commitment and prod shaky governments in the region to take more responsibility
for fighting insurgents and building lasting political institutions. The new
strategy, officials said, will send 4,000 more troops to train Afghan security
forces on top of the 17,000 extra combat troops that he already ordered to
Afghanistan shortly after taking office.
For now, Mr. Obama has decided not to send additional combat forces, they said,
although military commanders at one point had requested a total of 30,000 more
American troops. Even so, the strategy he endorsed on Friday effectively gives
Mr. Obama full ownership of the war just as its violence is spilling back and
forth across the border with Pakistan.
He called on Congress to approve legislation authorizing $1.5 billion in aid to
Pakistan every year over the next five years for strengthening its democratic
institutions and for basic infrastructure improvements like building roads and
Prominent Democrats in Congress expressed support for the president’s approach.
House Speaker Nancy Pelosi of California said the president’s plan “is wisely
centered on dismantling al Qaeda and denying safe havens in both Afghanistan and
Pakistan to those who would attack the United States.”
Reaction was favorable on the other side of the Capitol as well.
“We’ve said for some time that we must refocus our resources on threats like Al
Qaeda and the Taliban in the Afghanistan-Pakistan border region,” Senator Harry
Reid of Nevada, the majority leader, said in a statement. “I strongly support
the president’s decision to do just that.”
Senator John Kerry of Massachusetts, the chairman of the Senate Foreign
Relations Committee, issued a statement calling the president’s approach
“realistic and bold in a critical region where our policy needs rescuing.” Mr.
Kerry and the committee’s ranking Republican, Richard G. Lugar of Indiana, will
introduce the legislation authorizing the $1.5 billion in aid to Pakistan.
Senator Russell D. Feingold, a Wisconsin Democrat who sits on the Foreign
Relations Committee, said he, too, was encouraged, particularly by Mr. Obama’s
focus on Pakistan. But Mr. Feingold said he was concerned that the new strategy
“may still be overly Afghan-centric when it needs to be even more regional.”
He said the bombing in Pakistan on Friday made it clear that “we need to fully
address the inextricable links between the crisis in Afghanistan and the
instability and terrorist threats in Pakistan.”
A Republican, Senator Olympia J. Snowe of Maine, also praised the president’s
“Today, the president presented Congress and the American people with an honest
assessment of our strategic position in Afghanistan and underscored that
America’s core mission must be redefined,” she said.
But Ms. Snowe said increased American aid must be “carefully targeted,” that the
Pakistan and Afghanistan must be pressured to do their part.
On Thursday, Senator Carl Levin, Democrat of Michigan and the chairman of the
Armed Services Committee, emerged from a briefing with Defense Secretary Robert
M. Gates to declare that in his judgment the administration’s review “was right
Although the administration is still developing the specific benchmarks for
Afghanistan and Pakistan, officials said they would be the most explicit demands
ever presented to the governments in Kabul and Islamabad. In effect, Mr. Obama
would be insisting that two fractured countries plagued by ancient tribal
rivalries and modern geopolitical hostility find ways to work together and
transform their societies.
American officials have repeatedly said that Afghanistan has to make more
progress in fighting corruption, curbing the drug trade and sharing power with
the regions, while they have insisted that Pakistan do more to cut ties between
parts of its government and the Taliban. Mr. Obama telephoned President Hamid
Karzai of Afghanistan and President Asif Ali Zardari of Pakistan on Thursday to
share the main elements of the strategic review.
Setting benchmarks for Pakistan could be particularly difficult. For years, the
United States has simply paid bills submitted by the Pakistani government for
counterterrorism operations, even during truces when its military was not
involved in counterterrorism. Pakistan has resisted linking its aid to specific
performance criteria and officials acknowledged that developing those criteria
could be problematic.
The key elements of Mr. Obama’s plan, with its more robust combat force, its
emphasis on training, and its far-reaching goals, foreshadow an ambitious but
risky and costly attempt to unify and stabilize Afghanistan and Pakistan. Mr.
Obama is unveiling his approach at a time when the conflict is worsening, the
lives of the people are not visibly improving, and the intervention by
American-led foreign powers is increasingly resented.
He said that “an uncompromising core of the Taliban,” the fundamentalist party
that America and its allies ousted seven years ago, must be defeated militarily,
but that other opposition forces “who have taken up arms because of coercion, or
simply for a price,” must be drawn back into the fold.
The goals that Mr. Obama has settled on may be elusive and, according to some
critics, even naïve. Among other things, officials said he planned to recast the
Afghan war as a regional issue involving not only Pakistan but also India,
Russia, China, the United Arab Emirates, Saudi Arabia and the Central Asian
His plan envisions persuading Pakistan to stop focusing military resources on
its longstanding enemy, India, so it can concentrate more on battling insurgents
in its lawless tribal regions. That goal may be especially hard to achieve given
more than a half century of enmity — including a nuclear arms race — between
Pakistan and India.
All told, the 21,000 additional American troops that Mr. Obama will have
authorized almost precisely matches the original number of additional troops
that President George W. Bush sent to Iraq two years ago, bringing the overall
American deployment in Afghanistan to about 60,000. But Mr. Obama avoids calling
it a “surge” and resisted sending the full reinforcements initially sought by
Instead, Mr. Obama chose to re-evaluate troop levels at a series of specific
moments over the next year, officials said. Approaching the issue in increments
may be easier to explain to members of Mr. Obama’s own party who fear he is
getting the country as entangled in Afghanistan as Mr. Bush did in Iraq.
Mr. Obama is framing the American commitment as a counterterrorism mission aimed
at denying havens for Al Qaeda, with three main goals — training Afghan security
forces, supporting the weak central government in Kabul and securing the
population. While the new strategy calls for expanding Afghan security forces
more rapidly, it does not explicitly endorse the request from American
commanders to increase the national police and army to 400,000.
At the same time, Mr. Obama would need more than the $50 billion in his budget
plan for military operations and development efforts. Asked on Thursday by
lawmakers whom he briefed on the plan about the prospect of reconciliation with
moderate members of the Taliban, officials said Mr. Obama replied that he wanted
to sift out hard-core radicals from those who were fighting simply to earn
Senator Levin, who was part of a bipartisan group that pressed Mr. Bush to set
benchmarks for Iraq two years ago, embraced the idea of doing the same again for
Afghanistan. “There is a determination to set some benchmarks for Afghanistan,
and that will be incredibly important,” Mr. Levin said. “We haven’t had them in
Dennis C. Blair, the administration’s director of national intelligence, said on
Thursday that the United States still lacked intelligence about the power
structures inside the country and other basic information necessary for a
counterinsurgency campaign. “We know a heck of a lot more about Iraq on a
granular level than we know about Afghanistan,” he said.
Speaking with reporters, Mr. Blair estimated that up to three quarters of the
Taliban’s rank and file in Afghanistan could be peeled away from the Taliban’s
leadership, most of whom are hiding in sanctuaries across the border in
David E. Sanger and Mark Mazzetti contributed reporting.
Obama Unveils Afghan
Plan to Add Troops and Set Goals, NYT, 26.3.2009,
Obama Turns to Web to Bypass News Media
March 26, 2009
Filed at 7:41 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- Call it Round Two of the news conference,
with a big Internet twist.
President Barack Obama took questions from the White House press corps on
Tuesday in a prime-time, East Room session that represented the most formal and
time-honored of president-and-reporter interactions. On Thursday, he is taking
to that same room for another public grilling -- this time by regular folks
armed with questions submitted via the Internet and in person, as part of a
political strategy to engage Americans directly.
''It's a way for the president to do what he enjoys doing out on the road, but
saves on gas,'' press secretary Robert Gibbs told reporters Wednesday.
By 7 a.m. Thursday, the White House Web site had already logged more than 77,000
Obama used the Internet to build a grass-roots movement that delivered the
presidency and raised unheard-of money. Now in power, he is employing the same
online network and style to speak -- unfiltered -- with Americans.
The president already has taken that tactic on the road, spending two days on
the West Coast last week at town hall-style meetings and appearing on Jay Leno's
late-night talk show. It offered easier questions and a chance to get his
message to the widest possible audience.
''It's not a whole lot different than were we in California doing the meeting,''
Gibbs said. ''It's just we'll have people hooked up from a lot of different
places all over the country, but he'll be able to do all that from the East
Already, the White House is connecting the old-school press conference with the
new-media event. It will be an easy contrast between skeptical reporters and
Political operatives say the White House's strategy is a way to reach a
demographic key to Obama's election.
''In the new world of online media, formal press conferences are just one
element or program to get the message out -- to those, usually older, who watch
such things on TV. The online version he is doing is an alternative way to get
out the same message, in this case on the budget, targeted toward a different
audience, usually younger,'' said Morley Winograd, a former adviser to Vice
President Al Gore who now runs the Institute for Communication Technology
Management at the University of Southern California.
''In both cases the questioners are just props -- or, in some cases, foils --
for the star, Obama, to deliver his message. But in the latter case, they get to
self-nominate instead of be selected by elites,'' Winograd said.
In a way, it's part campaign-style politics and part ''American Idol,'' said
political strategist Simon Rosenberg.
''Barack Obama is going to reinvent the presidency the way he reinvented
electoral politics,'' said Rosenberg, president of the New Democrat Network and
a veteran of presidential campaigns. ''He is allowing everyday people to
participate in a way that would've been impossible in the old media world.''
Obama's campaign allowed supporters to organize themselves to go door-to-door
and raise money. Because of that, many felt an ownership of the campaign and
devoted countless hours to giving Obama the Democratic Party's nomination and
then the presidency.
Obama's aides are taking that step forward, incorporating tools that let
visitors to the White House Web site pick the questions Obama will answer,
turning the president's Thursday event into a democratic press conference.
''Average people get to shape the outcome, like 'American Idol,''' Rosenberg
said. ''This is not a couch-potato age. Average people are expecting to be part
of the process.''
Yet the process lends itself to softer questions and ones the White House is
eager to answer, Republicans noted.
''The president is going back to the safe confines he was always most
comfortable with, in this case a friendly audience where the focus is on the
sale rather than the substance,'' GOP strategist Kevin Madden said.
Obama remains a popular figure, although the country and Congress are reluctant
to embrace his budget proposals. Aides say that the more the president talks
about his plans -- and frames his budget proposal through real-world needs --
the more Americans would be swayed.
In that vein, Obama aides want to keep the questions about energy, health care
and education, the three key priorities in his first budget document. Some of
the questions will be from the Web site, others via YouTube and some from an
audience of about 100 people representing teachers, nurses and small-business
''The president just thinks it's another opportunity to talk directly with the
American people about the challenges that we have, the choices and the decisions
that we're making, and the path that we're taking to get us back to prosperous
days,'' Gibbs said.
On the Net:
White House online town hall:
Obama Turns to Web to
Bypass News Media, NYT, 26.3.2009,
Watershed Moment on Nuclear Arms
March 25, 2009
The New York Times
During the 2008 campaign, President Obama promised to deal
with one of the world’s great scourges — thousands of nuclear weapons still in
the American and Russian arsenals. He said he would resume arms-control
negotiations — the sort that former President George W. Bush disdained — and
seek deep cuts in pursuit of an eventual nuclear-free world. There is no time to
In less than nine months, the 1991 Start I treaty expires. It contains the basic
rules of verification that give both Moscow and Washington the confidence that
they know the size and location of the other’s nuclear forces.
The Bush administration made little effort to work out a replacement deal. So we
are encouraged that American and Russian officials seem to want a new agreement.
Given the many strains in the relationship, it will take a strong commitment
from both sides, and persistent diplomacy, to get one in time.
When President Obama meets Russia’s president, Dmitri Medvedev, in London on
April 1, the two should commit to begin talks immediately and give their
negotiators a deadline for finishing up before Dec. 5. For that to happen, the
Senate must quickly confirm Mr. Obama’s negotiator, Rose Gottemoeller, so she
can start work.
Mr. Bush and then-President Vladimir Putin signed only one arms-control
agreement in eight years. It allowed both sides to keep between 1,700 and 2,200
deployed warheads. Further cuts — 1,000 each makes sense for the next phase —
would send a clear message to Iran, North Korea and other wannabes that the
world’s two main nuclear powers are placing less value on nuclear weapons.
Mr. Obama and Mr. Medvedev should also pledge that these negotiations are just a
down payment on a more ambitious effort to reduce their arsenals and rid the
world of nuclear weapons. The next round should aim to bring Britain, France and
China into the discussions. In time, they will have to cajole and wrestle India,
Pakistan and Israel to the table as well.
There is a lot President Obama can do right now to create momentum for serious
change. We hope his expected speech on nuclear weapons next month is bold.
He can start by unilaterally taking all of this country’s nuclear weapons off of
hair-trigger alert. He should also commit to eliminating the 200 to 300
short-range nuclear weapons this country still has deployed in Europe. That
would make it much easier to challenge Russia to reduce its stockpile of at
least 3,000 short-range weapons. These arms are unregulated by any treaty and
are far too vulnerable to theft.
Mr. Obama must also declare his commitment to include all nuclear weapons in
negotiated reductions — including thousands of warheads that are now held in
reserve and excluded from cuts. And he must make good on promises to press the
Senate to ratify the Comprehensive Test Ban Treaty (opponents are already
quietly organizing) and the international community to adopt a pact ending
production of weapons-grade nuclear fuel.
Mr. Obama must reaffirm his campaign pledge to transform American nuclear policy
that is still mired in cold war thinking. His administration’s nuclear review is
due by year’s end. It must make clear that this country has nuclear weapons
solely to deter a nuclear attack — and that this administration’s goal is to
keep as few as possible as safely as possible. The review must also state
clearly that the country has no need for a new nuclear weapon and will not build
Two decades after the fall of the Berlin Wall, Russia and the United States
together still have more than 20,000 nuclear weapons. It is time to focus on the
21st-century threats: states like Iran building nuclear weapons and terrorists
plotting to acquire their own. Until this country convincingly redraws its own
nuclear strategy and reduces its arsenal, it will not have the credibility and
political weight to confront those threats.
Watershed Moment on
Nuclear Arms, NYT, 25.3.2009,
Obama to Critics: I'll Bend, but Not Break
March 25, 2009
Filed at 5:58 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- With Congress pushing back against his proposals for
energy, taxes and other matters, President Barack Obama is taking a
He will compromise on certain details if he must, he signaled at his news
conference Tuesday evening, but not on the heart of his key initiatives.
His strategic retreats are a nod to political reality. He is angling to avoid
confrontations he probably can't win, but to sacrifice no more than is
On energy, for instance, influential Democratic lawmakers have joined
Republicans in opposing Obama's bid to reduce greenhouse gases through a program
that would let companies buy and sell a limited number of permits to pollute.
''When it comes to cap and trade,'' the president said, using the proposal's
nickname, ''the broader principle is that we've got to move to a new energy era.
And that means moving away from polluting energy sources towards cleaner energy
''I think cap and trade is the best way,'' Obama said, but he stopped well short
of insisting on it.
He did not retreat on contentious issues on which he holds the upper hand.
Lifting a federal ban on embryonic stem cell research, he said, was the ''right
thing to do'' despite criticisms from various quarters. Asked why he hasn't
asked Americans to do more to weather the economic crisis, he said, ''I think
folks are sacrificing left and right.''
Obama was less certain and dismissive on topics in which he faces potentially
bruising battles with Congress. For example, he minimized a Senate leader's
proposal to end Obama's signature tax cut for most working families after 2010.
''When it comes to the middle-class tax cut,'' the president said, ''we know
that that's going to be in place for at least the next two years.''
''If Congress has better ideas in terms of how to pay for it, then we're happy
to listen,'' he said.
Obama said the main thrust of his massive budget proposal is moving the nation
in the right direction to turn around the ailing economy. ''This budget is
inseparable from this recovery,'' he said, ''because it is what lays the
foundation for a secure and lasting prosperity.''
He said he expects ''serious efforts at health care reform,'' but not lawmakers'
approval of every proposal in his $3.6 trillion budget. ''We never expected,
when we printed out our budget, that they would simply Xerox it and vote on
it,'' he said.
Obama used the 55-minute news conference's last question, on Middle East peace
efforts, to summarize his strategy of pressing his main goals while letting
critics nibble at the margins if they must.
''When it comes to domestic affairs,'' he said, ''if we keep on working at it,
if we acknowledge that we make mistakes sometimes, and that we don't always have
the right answer, and we're inheriting very knotty problems, that we can pass
health care, we can find better solutions to our energy challenges, we can teach
our children more effectively, we can deal with a very real budget crisis that
is not fully dealt with in my -- in my budget at this point, but makes
The closest he came to smugness was in noting that once-fierce criticism of
Treasury Secretary Timothy Geithner has abated this week.
''It was just a few days ago or weeks ago where people were certain that
Secretary Geithner couldn't deliver a plan,'' Obama said of proposals to bail
out the financial sector. ''Today, the headlines all look like, 'Well, all
right, there's a plan.' And I'm sure there will be more criticism, and we'll
have to make more adjustments, but we're moving in the right direction.''
Obama's bend-not-break strategy will get a test Wednesday, when he travels to
the Capitol to meet privately with Senate Democrats. Some of them are his most
troubling critics on energy, health care, taxes and spending.
Obama to Critics: I'll
Bend, but Not Break, NYT, 25.3.2009,
In a Volatile Time, Obama Strikes a New Tone for Crisis
March 25, 2009
The New York Times
By PETER BAKER and ADAM NAGOURNEY
WASHINGTON — For just under an hour on Tuesday night, Americans saw not the
fiery and inspirational speaker who riveted the nation in his address to
Congress last month, or the conversational president who warmly engaged
Americans in talks across the country, or even the jaunty and jokey president
who turned up on Jay Leno.
Instead, in his second prime-time news conference from the White House, it was
Barack Obama the lecturer, a familiar character from early in the campaign.
Placid and unsmiling, he was the professor in chief, offering familiar arguments
in long paragraphs — often introduced with the phrase, “as I said before” —
sounding like the teacher speaking in the stillness of a classroom where
students are restlessly waiting for the ring of the bell.
The session in the East Room came at a volatile moment for the new president as
he sought to quell Democratic misgivings about his ambitious economic agenda and
deflect strong Republican opposition. Speaking past the reporters in the room to
the tens of millions of viewers tuning in at home, he tried to reassure the
nation that he could solve the crisis that has gripped the economy for more than
“We’re beginning to see signs of progress,” he said, calling for a “renewed
confidence that a better day will come.”
As balky senators from his own party began carving some of the signature
proposals out of his budget, Mr. Obama signaled that he could compromise in the
short term on a middle-class tax cut and a cap on carbon emissions. But he
indicated that he would stand firm on four top priorities, insisting that
Congress make progress in those areas.
“We never expected when we printed out our budget that they would simply Xerox
it and vote on it,” Mr. Obama said, expressing flexibility about the details as
long as his central goals were met. “The bottom line is that I want to see
health care, energy, education and serious efforts to reduce our budget
At a time of anger and anxiety in the country, Mr. Obama showed little emotion.
He rarely cracked a joke or raised his voice. Even when he declared himself
upset over the $165 million in bonuses paid this month by the American
International Group despite its taxpayer bailout, his voice sounded calm and
unbothered. “I’m as angry as anybody about those bonuses,” he said, adding that
executives needed to learn that “enriching themselves on the taxpayers’ dime is
To a certain extent, Mr. Obama’s demeanor could have been calculated — an
effort, aides said, to lower the temperature after a supercharged week and nudge
the country toward what Mr. Obama considers the more pressing issues of fixing
the banking system and reviving the economy. Even after excoriating the A.I.G.
executives, he cautioned that “the rest of us can’t afford to demonize every
investor or entrepreneur who seeks to make a profit.”
The only time he seemed irritated came when he was asked why the attorney
general of New York, Andrew M. Cuomo, seemed to have more success getting A.I.G.
executives to return some bonuses than his own administration. Pressed on why he
did not express outrage immediately upon learning of the bonuses, Mr. Obama said
sharply, “Well, it took us a couple of days because I like to know what I’m
talking about before I speak.”
Even on one of the most polarizing subjects in American life, race relations,
Mr. Obama deviated little from the median. Asked about his impact as the first
African-American president, he said the nation experienced “justifiable pride”
at his inauguration.
“But that lasted about a day,” he said, in perhaps his only joke of the night.
“Right now the American people are judging me exactly the way I should be judged
and that is, are we taking the steps to improve liquidity in the financial
markets, create jobs, get businesses to reopen, keep America safe?”
He showed his usual comfort with a wide array of subjects, even as he excluded
the nation’s big newspapers from the questioning in favor of a more eclectic
mix. He signaled that the new conservative government in Israel could make
achieving a peace deal more difficult. He expressed patience about dealing with
Iran. And he defended his proposal to increase the tax burden on the wealthy.
This was Mr. Obama as more enervating than energizing, a reminder of the way he
could be in his early days as a presidential candidate, before he became defined
by rapturous crowds.
“He doesn’t seem to emote any real urgency or anger,” said Matthew Dowd, a
former Republican strategist who has often been complimentary of the new
president. “So at times it comes across as a bit distant and intellectual.”
Joe Trippi, a Democratic consultant, said: “He said all the right things. But
sometimes his confidence makes him seem flat.”
Still, the news conference came as Mr. Obama is moving from the flush of his
inauguration into the grind of Congressional negotiations and shifting public
Over the past month, he has gone from offering near apocalyptic views of the
economy to expressing optimism in its underlying strength.
Appearing on “60 Minutes,” he laughed in talking about the problems he faced,
leading his interviewer to ask if he was punch-drunk.
That was not a question that seemed pertinent Tuesday. He did demonstrate an
ability to take a punch, though, and to deliver one. Even beforehand,
Republicans criticized his economic agenda, noting that it would amass more debt
than the 43 previous presidents combined. Representative John A. Boehner of
Ohio, the House Republican leader, called for “a do-over” on the budget.
“I just think that this might be the most irresponsible piece of legislation
I’ve seen in my legislative career,” Mr. Boehner said.
Mr. Obama fired back hours later: “Some of the Republican critics have a short
memory, because as I recall, I’m inheriting a $1.3 trillion deficit, annual
deficit, from them.”
But his Democratic allies are more immediately troublesome as they busily
dismantle his budget and rewrite it to their own taste. Mr. Obama, who is
scheduled to visit Capitol Hill on Wednesday to meet with Senate Democrats,
indicated that plans for a middle-class tax cut and a market-based cap on carbon
emissions did not necessarily have to be included in the final version of the
Instead, he said he could pursue them independently. The $787 billion stimulus
plan already passed by Congress authorized a $400 tax credit for two years, so
he has time to find ways to finance it permanently. And he suggested that
Congress could take steps toward alternative energy in the budget without
necessarily incorporating the so-called cap-and-trade system because committees
could work on that separately.
Throughout his time in public life, Mr. Obama has confronted questions about
whether he was too detached, too analytical, too intellectual. In the campaign,
he was as likely to be compared to Adlai E. Stevenson as he was to John F.
Kennedy. And if there is a pattern to Mr. Obama, it is to lumber through periods
like this and then become intense and animated at the first sign of trouble.
Over the long term, Mr. Obama’s calm has served him well, in particular at the
critical moment in the campaign when the economy began its steep slide. “That is
one of the things people like about him,” Mr. Trippi said.
Sheryl Gay Stolberg contributed reporting.
In a Volatile Time,
Obama Strikes a New Tone for Crisis, NYT, 25.3.2009,
Mr. Obama and the Rule of Law
March 22, 2009
The New York Times
As much as it needs to happen, we never expected President Obama to
immediately reverse every one of President George W. Bush’s misguided and
dangerous policies on terrorism, prisoners, the rule of law and government
secrecy. Fixing this calamitous mess will take time and care — and Mr. Obama has
taken important steps in that direction.
But we did not expect that Mr. Obama, who addressed these issues with such
clarity during his campaign, would be sending such confused and mixed signals
from the White House. Some of what the public has heard from the Obama
administration on issues like state secrets and detainees sounds a bit too close
for comfort to the Bush team’s benighted ideas.
There are times when the president seems to be making a clean and definitive
break. On his second day in office, he ordered the closing of the prison at
Guantánamo Bay and directed his cabinet to formulate new policies on detaining
and interrogating people suspected of terrorist acts or of supporting
Last week, the administration notified a federal court hearing appeals by
Guantánamo inmates that it was dropping Mr. Bush’s absurd claim that he could
declare anyone an “enemy combatant” and deprive that prisoner of judicial
process. The administration affirmed its commitment to the laws of war, the
Geneva Conventions and long-standing military doctrine.
But the break does not always seem complete enough. Even as they dropped the
“enemy combatant” terminology, Mr. Obama’s lawyers did not seem to rule out
indefinite military detentions for terrorism suspects and their allies. They
drew a definition of association with Al Qaeda that is too broad (simply staying
in a “safe house,” for example). Worse, they seemed to adopt Mr. Bush’s position
that the “battlefield” against terrorism is the planet. That became the legal
pretext for turning criminal defendants into lifelong military captives.
On Thursday, we were delighted to see Attorney General Eric Holder reverse the
Bush policy on releasing documents under the Freedom of Information Act. Mr.
Bush’s first attorney general, John Ashcroft, directed the government to assume
that documents should not be released and to find pretexts to keep them secret.
Mr. Holder directed all agencies to presume that “in the face of doubt, openness
prevails.” And he said the policy applied to pending lawsuits against the Bush
administration for refusing to disclose information.
It was great news, but also recalled our distress that the Justice Department
had abandoned transparency just last month in a case before the United States
Court of Appeals for the Ninth Circuit. The case involves five men who were
seized and transported to American facilities abroad or countries known for
The Obama administration advanced the same expansive state-secrets argument
pressed by Mr. Bush’s lawyers to get a trial court to dismiss the case without
any evidence being presented. Even the judges seemed surprised, asking whether
the government wanted a delay to reconsider its position.
The Obama team should have taken the delay. It should now support bipartisan
legislation to fix this problem by expanding judges’ powers to examine evidence
the government wants to keep secret and decide whether to admit it based on
facts rather than claims of presidential power. It is hard to fathom what signal
Mr. Obama is trying to send by stifling cases that must be heard.
On the filing in the Guantánamo appeals, administration officials say — quite
rightly — that they took an important step by declaring that their treatment of
prisoners would be based on the law and not theories about executive power. They
said that they had a deadline to file the document and that its discussion of
prisoner policies pertained only to the Guantánamo inmates.
These arguments are persuasive for now. The test is whether they will be fully
reflected in the results of the continuing policy reviews — and we assume they
will. It is vital for Mr. Obama’s team to be as thorough and detailed as
possible, ensuring that American policy respects the limits so clearly laid out
by the nation’s laws and Constitution.
Mr. Obama also should stop resisting an investigation of Mr. Bush’s policies on
terrorism, state secrets, wiretapping, detention and interrogation. We know he
is struggling with many Bush-created disasters — in the economy, in foreign
policy and on and on. But understanding all that has gone wrong is the only way
to ensure that abuses will truly end. That investigation should be done calmly
rather than under the pressure of some new, shocking revelation.
Former Vice President Dick Cheney is still proclaiming that waterboarding
detainees prevented another attack. Among other things, an investigation would
examine that assertion — for which Mr. Cheney offers no evidence, and which
others have challenged.
Everyone wants to move forward. The only way to do that, and make sure the
system of justice is working properly, is to know exactly how Mr. Bush broke it.
Mr. Obama and the Rule
of Law, NYT, 22.3.2009,
Has a ‘Katrina Moment’ Arrived?
March 22, 2009
The New York Times
By FRANK RICH
A CHARMING visit with Jay Leno won’t fix it. A 90 percent tax on bankers’
bonuses won’t fix it. Firing Timothy Geithner won’t fix it. Unless and until
Barack Obama addresses the full depth of Americans’ anger with his full arsenal
of policy smarts and political gifts, his presidency and, worse, our economy
will be paralyzed. It would be foolish to dismiss as hyperbole the stark warning
delivered by Paulette Altmaier of Cupertino, Calif., in a letter to the editor
published by The Times last week: “President Obama may not realize it yet, but
his Katrina moment has arrived.”
Six weeks ago I wrote in this space that the country’s surge of populist rage
could devour the president’s best-laid plans, including the essential Act II of
the bank rescue, if he didn’t get in front of it. The occasion then was the Tom
Daschle firestorm. The White House seemed utterly blindsided by the public’s
revulsion at the moneyed insiders’ culture illuminated by Daschle’s post-Senate
career. Yet last week’s events suggest that the administration learned nothing
from that brush with disaster.
Otherwise it never would have used Lawrence Summers, the chief economic adviser,
as a messenger just as the A.I.G. rage was reaching a full boil last weekend.
Summers is so tone-deaf that he makes Geithner seem like Bobby Kennedy.
Bob Schieffer of CBS asked Summers the simple question that has haunted the
American public since the bailouts began last fall: “Do you know, Dr. Summers,
what the banks have done with all of this money that has been funneled to them
through these bailouts?” What followed was a monologue of evasion that,
translated into English, amounted to: Not really, but you little folk needn’t
worry about it.
Yet even as Summers spoke, A.I.G. was belatedly confirming what he would not. It
has, in essence, been laundering its $170 billion in taxpayers’ money by paying
off its reckless partners in gambling and greed, from Goldman Sachs and
Citigroup on Wall Street to Société Générale and Deutsche Bank abroad.
Summers was even more highhanded in addressing the “retention bonuses” handed to
the very employees who brokered all those bad bets. After reciting the requisite
outrage talking point, he delivered a patronizing lecture to viewers of ABC’s
“This Week” on how our “tradition of upholding law” made it impossible to
abrogate the bonus agreements. It never occurred to Summers that Americans might
know that contracts are renegotiated all the time — most conspicuously of late
by the United Automobile Workers, which consented to givebacks as its
contribution to the Detroit bailout plan. Nor did he note, for all his supposed
reverence for the law, that the A.I.G. unit being rewarded with these bonuses is
now under legal investigation by British and American authorities.
Within 24 hours, Summers’s stand was discarded by Obama, who tardily (and
impotently) vowed to “pursue every single legal avenue” to block the bonuses.
The question is not just why the White House was the last to learn about bonuses
that Democratic congressmen had sought hearings about back in December, but why
it was so slow to realize that the public’s anger couldn’t be sated by Summers’s
legalese or by constant reiteration of the word outrage. By the time Obama
acted, even the G.O.P. leader Mitch McConnell was ahead of him in full (if
David Axelrod tried to rationalize the lagging response when he told The
Washington Post last week that “people are not sitting around their kitchen
tables thinking about A.I.G.,” but are instead “thinking about their own jobs.”
While that’s technically true, it misses the point. Of course most Americans
don’t know how A.I.G. brought the world’s financial system to near-ruin or what
credit-default swaps are. They may not even know what A.I.G. stands for. But
Americans do make the connection between their fears about their own jobs and
their broad understanding of the A.I.G. debacle.
They know that the corporate bosses who may yet lay them off have sometimes been
as obscenely overcompensated for failure as Wall Street’s bonus babies. As The
Wall Street Journal reported last week, chief executives at businesses as
diverse as Texas Instruments and the home builder Hovnanian Enterprises have
received millions in bonuses even as their companies’ shares have lost more than
half their value.
Since Americans get the big picture of this inequitable system, that grotesque
reality dwarfs any fine print. That’s why it doesn’t matter that the disputed
bonuses at A.I.G. amount to less than one-tenth of one percent of its bailout.
Or that CNBC — with 300,000 viewers on a typical day by Nielsen’s measure — is a
relatively minor player in the crash. Or that Edward Liddy had nothing to do
with A.I.G.’s collapse, or that John Thain, of the celebrated trash can, arrived
after, not before, others wrecked Merrill Lynch.
These prominent players are just the handiest camera-ready triggers for the
larger rage. Passions are now so hot that even Bernie Madoff’s crimes began to
pale as we turned our attention to A.I.G.’s misdeeds, just as A.I.G. will fade
when the next malefactor surfaces.
What made Jon Stewart’s takedown of Jim Cramer resonate was less his specific
brief against CNBC’s cheerleading for bad stocks than his larger indictment of
the gaping economic inequality that defined the bubble. As Stewart said, there
were “two markets” — the long-term market that Americans earnestly thought would
sustain their 401(k)’s, and the fast-moving, short-term “real market” in the
back room where high-rolling insiders wagered “giant piles of money” and brought
down everyone with them.
No one is more commanding on this subject than our president. In his town-hall
meeting in Costa Mesa, Calif., on Wednesday, he described the A.I.G. bonuses as
merely a symptom of “a culture where people made enormous sums of money taking
irresponsible risks that have now put the entire economy at risk.” But rhetoric
won’t tamp down the anger out there, and neither will calculated displays of
presidential “outrage.” We must have governance to match the message.
To get ahead of the anger, Obama must do what he has repeatedly promised but not
always done: make everything about his economic policies transparent and hold
every player accountable. His administration must start actually answering the
questions that officials like Geithner and Summers routinely duck.
Inquiring Americans have the right to know why it took six months for us to
learn (some of) what A.I.G. did with our money. We need to understand why some
of that money was used to bail out foreign banks. And why Goldman, which
declared that its potential losses with A.I.G. were “immaterial,” nonetheless
got the largest-known A.I.G. handout of taxpayers’ cash ($12.9 billion) while
also receiving a TARP bailout. We need to be told why retention bonuses went to
some 50 bankers who not only were in the toxic A.I.G. unit but who left despite
the “retention” jackpots. We must be told why taxpayers have so little control
of the bailed-out financial institutions that we now own some or most of. And
where are the M.R.I.’s from those “stress tests” the Treasury Department is
giving those banks?
That’s just a short list. In general, it’s hard to imagine taxpayers shelling
out billions for a second bank bailout unless there’s a full accounting of every
dime of the first, and true transparency for the new plan whose rollout is
becoming the most attenuated striptease since the heyday of Gypsy Rose Lee.
Another compelling question connects all of the above: why has there been so
little transparency and so much evasiveness so far? The answer, I fear, is that
too many of the administration’s officials are too marinated in the insiders’
culture to police it, reform it or own up to their own past complicity with it.
The “dirty little secret,” Obama told Leno on Thursday, is that “most of the
stuff that got us into trouble was perfectly legal.” An even dirtier secret is
that a prime mover in keeping that stuff legal was Summers, who helped torpedo
the regulation of derivatives while in the Clinton administration. His mentor
Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how
the risk of derivatives might multiply “under extraordinary circumstances.”
Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was
pushed out of Harvard’s presidency at the bubble’s height, you have to wonder
how he can now sell the administration’s plan for buying up toxic assets with
the help of hedge funds. It will look like another giveaway to his own insiders’
club. As for Geithner, people might take him more seriously if he gave a
credible account of why, while at the New York Fed, he and the Goldman alumnus
Hank Paulson let Lehman Brothers fail but saved the Goldman-trading ally A.I.G.
As the nation’s anger rose last week, the president took responsibility for
what’s happening on his watch — more than he needed to, given the disaster he
inherited. But in the credit mess, action must match words. To fall short would
be to deliver us into the catastrophic hands of a Republican opposition whose
only known economic program is to reject job-creating stimulus spending and root
for Obama and, by extension, the country to fail. With all due deference to
Ponzi schemers from Madoff to A.I.G., this would be the biggest outrage of them
Has a ‘Katrina Moment’
Arrived?, NYT, 22.3.2009,
Obama Makes Pitch for Budget Priorities
March 21, 2009
Filed at 11:12 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- President Barack Obama demanded Saturday that any budget
passed by Congress must cut the deficit, overhaul health care, invest in
education and reduce U.S. dependence on foreign oil.
After a week dominated by outrage over enormous corporate bonuses at bailed-out
companies, Obama used his weekly radio and Internet address to turn the focus
back on his budget proposal and getting it through Congress.
But even as he outlined his four major requirements for a spending plan that
would top $3.6 trillion, there was growing unease on Capitol Hill over a budget
that congressional auditors say will generate $9.3 trillion in red ink over the
''I realize there are those who say these plans are too ambitious to enact,''
Obama said. ''To that I say that the challenges we face are too large to ignore.
I didn't come here to pass on our problems to the next president or the next
generation -- I came here to solve them.''
Republicans, however, slammed Obama's budget as a breathtaking spending spree.
As states and families are struggling to cut spending, the president's budget
''spends too much, taxes too much and borrows too much,'' said Gov. Haley
Barbour of Mississippi, in the weekly Republican address.
Obama spent two days in California this week taking his sales pitch directly to
the people. The campaign took him from town-hall meetings to Jay Leno's ''The
Tonight Show'' set in an effort to garner support for a budget that will pay for
his priorities. At the same time, he is promising to cut the deficit in half by
the end of his four-year term.
His message, however, was drowned out for much of the week by revelations that
American International Group Inc. paid out $165 million in bonuses to employees,
including to traders in the financial unit that nearly caused the insurance
giant's collapse. The public outrage was followed by congressional efforts to
impose punitive taxes on those payouts.
In his Saturday message, Obama contended that ordinary Americans are more
concerned about having a paycheck and being able to pay their college or medical
bills more than they are about ''the news of the day in Washington.''
And those are the concerns, he said, that he addresses in his budget, calling it
an economic blueprint for the future. It is, he said, ''a vision of America
where growth is not based on real estate bubbles or over-leveraged banks, but on
a firm foundation of investments in energy, education and health care that will
lead to a real and lasting prosperity.''
With a nod to Capitol Hill, he said the specific dollar amounts in his budget
plan will likely change, but in the end his four priorities must be met.
Those are plans to boost investments in clean energy technologies, including
wind and solar power; increased funding for childhood education programs,
affordable college costs and higher standards for schools; health care reform
that will lower costs, including Medicare and Medicaid; and a scrutiny on
domestic spending that will lead to cuts in the deficit.
''The American people sent us here to get things done, and at this moment of
great challenge, they are watching and waiting for us to lead,'' Obama said.
''Let's show them that we are equal to the task before us.''
On the Net:
Obama address: http://www.whitehouse.gov
Obama Makes Pitch for
Budget Priorities, NYT, 21.3.2009,
White House Memo
As the Public Simmers, Obama Lets Off Steam
March 21, 2009
The New York Times
By JEFF ZELENY
WASHINGTON — To win the White House, Barack Obama grew adept at navigating
obstacles. But few of those challenges tested his communications and political
skills as much as this week’s outbreak of populism, in which he sought to
contain, control and, finally, channel the searing outrage over bonuses paid by
companies being kept afloat by the government.
By week’s end, after making a dozen public appearances in settings from the East
Room in the White House to the stage of “The Tonight Show,” Mr. Obama had run
the gamut from saying he inherited the problems to accepting the blame. And he
tried to keep his options open as he waited to see if the fury subsided,
pointedly not promising to sign a measure making its way through Congress that
seeks to get back the bonuses by imposing a new tax on them.
Along the way, he turned to anger, an emotion rarely used in his presidential
“I don’t want to quell anger. I think people are right to be angry. I’m angry,”
Mr. Obama said, his voice reaching a peak seven days after learning of the
bonuses given to employees of the American International Group. “What I want to
do, though, is channel our anger in a constructive way.”
While Mr. Obama never explicitly said how he believed that anger should be
channeled, he essentially suggested that Americans should follow his lead: let
off a little steam and move on. He wants to prevent the disgust over the A.I.G.
bonuses from derailing his agenda and the broader concerns about the economy.
The tornado of populism that swept through Washington this week presented the
kind of challenge that forced him to improvise as he worked to catch up with
public opinion. As administration officials struggled to reconcile precisely
when they learned about the bonuses, Mr. Obama sought to stop the
finger-pointing by declaring, “The buck stops with me.”
It is not clear whether the spasm of anger set off by news of the bonuses paid
to A.I.G. executives was a one-week affair or a sign of a larger political shift
driven by a sense that American-style capitalism in the last several decades has
become fundamentally unfair.
Either way, the White House initially underestimated the controversy that the
bonuses would create, advisers said, which is why the president waited to
address it directly. It was a pattern that became familiar during his
presidential campaign: detecting trouble on the horizon, failing to act swiftly
before finally moving to reclaim control of the message.
“Washington can get stuck on one thing,” said David Axelrod, a senior adviser to
the president. “The most important thing that we’ve learned is to keep your eye
on the ball and not get so bogged down in the frenzy of the moment that you lose
sight of your objectives.”
In the Oval Office on Friday evening, Mr. Obama recorded an interview with “60
Minutes,” the final piece of business in a frenzied week of television
interviews and public events in Washington and California. Even if support for
some of his policies has waned, Mr. Obama remains popular, so his schedule is
purposefully packed so he can be seen as the face of the administration.
But the frequent appearances by the president also helped showcase a day-by-day
— or hour-by-hour — shift in how Mr. Obama responded to the outrage at the
“Part of the president’s job is communicating to the American people through a
difficult period of time,” said Rahm Emanuel, the White House chief of staff.
“We understand their frustration, but we’re not going to govern out of anger.”
As Mr. Obama grappled with a response to the A.I.G. bonuses, there was not a
consensus among his advisers about what he should say. By Wednesday afternoon,
he was borrowing a line from President Harry S. Truman — “The buck stops with
me” — in answering a reporter’s question.
Some of his aides said that the phrase took them by surprise, but it was those
words that were repeated on the television news.
“Presidents have never gotten in trouble when they say, ‘The buck stops with me’
or ‘I wish we could have done that better,’ ” said Bob Shrum, a longtime
Democratic strategist. “I’m perfectly willing to be critical of him on some
things, but I think he handled this about as well as he could have.”
While the early analysis suggested that Mr. Obama was suffering a near
cataclysmic week, at least politically speaking, his advisers argued that the
long-term view would be far less dire. Like his presidential campaign, which is
often seen as an exercise in political perfection when viewed through the
rearview mirror, the real-time evolution was often perceived as a much bumpier
“It’s a hell of a difficult time to be president, that’s for damned sure,” said
Bill Carrick, who has advised Democratic candidates for decades. “There are a
lot of moving parts here. I don’t think it’s going to be easy to apply the rules
of campaign discipline to this.”
On Saturday night, when many commentators who criticized his performance this
week will be attending the annual white-tie Gridiron dinner in Washington, Mr.
Obama will not be seated at the head table as most of his predecessors have
been. He will be at Camp David watching the N.C.A.A. basketball tournament and
preparing for another week that begins on Monday morning in the Oval Office.
As the Public Simmers,
Obama Lets Off Steam, NYT, 21.3.2009,
US Endorses UN Gay Rights Text
March 18, 2009
Filed at 3:54 p.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- The Obama administration on Wednesday formally endorsed a
U.N. statement calling for the worldwide decriminalization of homosexuality, a
measure that former President George W. Bush had refused to sign.
The move was the administration's latest in reversing Bush-era decisions that
have been heavily criticized by human rights and other groups. The United States
was the only western nation not to sign onto the declaration when it came up at
the U.N. General Assembly in December.
''The United States supports the U.N.'s statement on human rights, sexual
orientation and gender identity and is pleased to join the other 66 U.N. member
states who have declared their support of the statement,'' said State Department
spokesman Robert Wood.
''The United States is an outspoken defender of human rights and critic of human
rights abuses around the world,'' Wood told reporters. ''As such, we join with
other supporters of this statement, and we will continue to remind countries of
the importance of respecting the human rights of all people in all appropriate
The Associated Press reported on Tuesday that the administration would endorse
Gay rights groups hailed the move.
''The administration's leadership on this issue will be a powerful rebuke of an
earlier Bush administration position that sought to deny the universal
application of human rights protections to lesbian, gay, bisexual and
transgender (LGBT) individuals,'' said Mark Bromley of the Council for Global
Equality, which promotes equal rights for homosexuals.
''This is long past overdue and we are encouraged by the signal it sends that
the rights of lesbian, gay, bisexual and transgender people will now be
considered human rights,'' said Rea Carey, the executive director of the
National Gay and Lesbian Task Force.
Human rights groups had criticized the Bush administration when it refused to
sign the statement when it was presented at the United Nations on Dec. 19. U.S.
officials said then that the U.S. opposed discrimination on the basis of sexual
orientation but that parts of the declaration raised legal questions that needed
According to negotiators, the Bush team had concerns that those sections could
commit the federal government on matters that fall under state jurisdiction. In
some states, landlords and private employers are allowed to discriminate on the
basis of sexual orientation; on the federal level, gays are not allowed to serve
openly in the military.
But Wood said a ''careful interagency review'' by the Obama administration had
concluded that ''supporting this statement commits us to no legal obligations.''
When it was voted on in December, 66 of the U.N.'s 192 member countries signed
the nonbinding declaration, which backers called an historic step to push the
General Assembly to deal more forthrightly with anti-gay discrimination. It was
endorsed by all 27 European Union members as well as Japan, Australia and
But 70 U.N. members outlaw homosexuality -- and in several, homosexual acts can
be punished by execution. More than 50 nations, including members of the
Organization of the Islamic Conference, opposed the declaration.
Some Islamic countries said at the time that protecting sexual orientation could
lead to ''the social normalization and possibly the legalization of deplorable
acts'' such as pedophilia and incest. The declaration was also opposed by the
US Endorses UN Gay
Rights Text, NYT, 18.3.2009,
Obama to Sign Spending Bill, Push for New Rules
March 11, 2009
Filed at 6:14 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- President Barack Obama plans to sign a
massive spending bill to keep the federal government running, but he is cracking
down on lawmakers' penchant for stuffing such legislation with billions of
dollars in pet projects.
Obama could sign the $410 billion spending package as early as Wednesday,
although he remains ''troubled'' by the so-called earmarks in the bill that
Republicans and moderate Democrats have eviscerated as unworthy pork-barrel
spending. The president was to announce earmark reforms on Wednesday.
White House officials in recent weeks have dismissed criticism of the earmarks
in the bill, saying the legislation was a remnant of last year and that the
president planned to turn his attention to future spending instead of looking
White House spokesman Robert Gibbs said Obama wouldn't be the first president to
sign legislation that he viewed as less than ideal. Asked whether Obama had
second thoughts about signing the bill, Gibbs' reply was curt: ''No.''
''This is necessary to continue funding government,'' Gibbs said. ''It
represents last year's business. Although it's not perfect, the president will
sign the legislation, but demonstrate for all involved rules moving forward that
he thinks can make this process work a little bit better.''
It's that process that administration official planned to focus on Wednesday,
not a bill signing that might take place in private. Aides said the
administration would move to introduce new ''rules of the road'' that could
allow Obama greater sway over lawmakers, particularly on politically
embarrassing spending that generated mockery from pundits and rival politicians.
During his presidential campaign, Obama promised to force Congress to curb its
pork-barrel-spending ways. Yet the bill sent from the Democratic-controlled
Congress to the White House on Tuesday contained 7,991 earmarks totaling $5.5
billion, according to calculations by the Republican staff of the House
While the White House would say only that Obama would announce new rules on
earmarks on Wednesday, it was clear he wanted to rein in spending, particularly
on the pet projects lawmakers inserted into the spending bill.
The 1,132-page bill has an extraordinary reach, wrapping together nine spending
bills to fund the annual operating budgets of every Cabinet department except
Defense, Homeland Security and Veterans Affairs. Among the many earmarks are
$485,000 for a boarding school for at-risk native students in western Alaska and
$1.2 million for Helen Keller International so the nonprofit can provide
eyeglasses to students with poor vision.
Most of the government has been running on a stopgap funding bill set to expire
at midnight Wednesday. Refusing to sign the newly completed spending bill would
force Congress to pass another bill to keep the lights on come Thursday or else
shut down the massive federal government. That is an unlikely possibility for a
president who has spent just seven weeks in office.
The $410 billion bill includes significant increases in food aid for the poor,
energy research and other programs. It was supposed to have been completed last
fall, but Democrats opted against election-year battles with Republicans and
former President George W. Bush.
The measure was a top priority for Democratic leaders, who praised it for
numerous increases denied by Bush. It once enjoyed support from Republicans.
But the bill ran into an unexpected political hailstorm in Congress after
Obama's spending-heavy economic stimulus bill and his 2010 budget plan, which
forecast a $1.8 trillion deficit for the current budget year.
The bill's big increases -- among them a 14 percent boost for a popular program
that feeds infants and poor women and a 10 percent increase for housing vouchers
for the poor -- represent a clear win for Democrats who spent most of the past
decade battling with Bush over money for domestic programs.
Generous above-inflation increases are spread throughout, including a $2.4
billion, 13 percent increase for the Agriculture Department and a 10 percent
increase for the money-losing Amtrak passenger rail system. The measure also
contains a provision denying lawmakers the automatic cost-of-living pay increase
they are due next Jan. 1.
On the Net:
Taxpayers for Common Sense:
House Appropriations Committee:
Obama to Sign
Spending Bill, Push for New Rules, NYT, 11.3.2009,
Obama Outlines Plan for Education Overhaul
March 11, 2009
The New York Times
By DAVID STOUT
WASHINGTON — President Obama called for sweeping changes in
American education on Tuesday, urging states to lift limits on charter schools
and improve the quality of early childhood education while also signaling that
he intends to make good on his campaign promise of linking teacher pay to
Having secured tens of billions of dollars in additional financing for education
in the economic stimulus package and made clear his intent to seek more in his
budget, Mr. Obama used a speech here to flesh out how he would use federal money
and programs to influence policy at the state and local level.
His proposals reflected his party’s belief that education at all levels was
underfinanced in the Bush years and that reform should encompass more than
demands that schools show improved test scores. But they also showed a
willingness to challenge teachers’ unions and public school systems, and to
continue to demand more accountability.
The president said it was time to erase limits on the number of charter schools,
which his administration calls “laboratories of innovation,” while closing those
that are not working. He said 26 states and the District of Columbia now had
caps. Teachers’ unions have opposed charter schools in some places, saying they
take away financing for public schools, while supporting them in others.
Putting limits on charter schools, even in places where they are performing
well, “isn’t good for our children, our economy or our country,” Mr. Obama said.
In his recent budget message, he said that he hoped to double financing for
charter schools eventually, another campaign promise, and that the Department of
Education would help create “new, high-quality charter schools” while supporting
the closing of those guilty of “chronic underperformance.”
He called on states to impose tougher curriculum standards, and in an echo of
language often used by President George W. Bush, he chided states that he said
were “low-balling expectations for our kids.”
Saying he would “cultivate a new culture of accountability in America’s
schools,” Mr. Obama said states and school districts should weed out bad
But he also pledged to pursue programs that would provide more incentives and
support for teachers and indicated he would back a program in up to 150 school
districts that would reward teachers “with more money for improved student
The teacher-pay provision and his support for more charter schools could
complicate Mr. Obama’s ability to win support for his plan in Congress and in
state legislatures, where teacher unions hold considerable sway with Democrats.
Mr. Obama acknowledged the partisan divisions about how to proceed, even as he
appealed to all sides to compromise.
“For decades, Washington has been trapped in the same stale debates that have
paralyzed progress and perpetuated our educational decline,” Mr. Obama said, in
a speech here to the Hispanic Chamber of Commerce. “Too many supporters of my
party have resisted the idea of rewarding excellence in teaching with extra pay,
even though we know it can make a difference in the classroom. Too many in the
Republican Party have opposed new investments in early childhood education,
despite compelling evidence of its importance.”
Union leaders reacted cautiously to the speech. Dennis Van Roekel, president of
the National Education Association, said his union’s 3.2 million members
“welcome the vision” laid out by the president.
Randi Weingarten, president of the 1.4-million-member American Federation of
Teachers, said her union embraced “the goals and aspirations” outlined by Mr.
Obama. “As with any public policy,” Ms. Weingarten said, “the devil is in the
details, and it is important that teachers’ voices are heard as we implement the
While unions generally dislike linking pay to specific measures of performance
like rising test scores, there have been some successful experiments around the
country with plans that take account of performance, especially in districts
where unions are deeply involved.
The address on Tuesday was the first step in laying out the president’s agenda
to improve schools, officials said, with more specifics to be outlined to
Mr. Obama noted that the recently enacted stimulus package called for spending
some $5 billion on the Early Head Start and Head Start programs — an investment
that he said would be rewarded by lower welfare rolls, fewer health care costs
and less crime, as well as better classroom performance. He said he would ask
Congress to finance a program that would provide grants to states that improve
their early childhood programs.
His speech elated advocates of charter schools. “With 365,000 students on
charter waiting lists, there is no excuse for state laws that stifle the growth
of these schools,” Nelson Smith, the president and chief executive of the
National Alliance for Public Charter Schools, said in a statement.
Jeff Zeleny contributed reporting.
Obama Outlines Plan
for Education Overhaul, NYT, 11.3.2009,
Science and Stem Cells
March 10, 2009
The New York Times
We welcome President Obama’s decision to lift the Bush
administration’s restrictions on federal financing for embryonic stem cell
research. His move ends a long, bleak period in which the moral objections of
religious conservatives were allowed to constrain the progress of a medically
Even with this enlightened stance, some promising stem cell research will still
be denied federal dollars. For that to change, Congress must lift a separate ban
that it has imposed every year since the mid-1990s.
Mr. Obama also pledged on Monday to base his administration’s policy decisions
on sound science, undistorted by politics or ideology. He ordered his science
office to develop a plan for all government agencies to achieve that goal.
Such a pledge should be unnecessary. Unfortunately, for eight years, former
President George W. Bush did just the opposite. He chose scientific advisory
committees based on ideology rather than expertise. His political appointees
aggressively ignored, distorted or suppressed scientific findings to promote a
political agenda or curry favor with big business.
This cynical approach seriously hampered government efforts to address global
warming and encourage sound family planning practices, among other issues.
President Obama was appropriately cautious, warning that the full promise of
stem cell research remains unknown and should not be overstated. Some of the
benefits, he said, might not appear in our lifetime or even our children’s
lifetime. But scientists hope that stem cell therapies may eventually lead to
treatments or cures for a wide range of degenerative diseases, such as
Parkinson’s and diabetes, and Mr. Obama rightly promised to pursue the research
In one of his first acts as president, Mr. Bush restricted federal financing for
embryonic stem cell research to what turned out to be 20 or so stem cell lines
that had been created prior to his announcement. Those lines are too limited in
number, variety and quality to allow the full range of needed research.
With the end of the Bush restrictions, scientists receiving federal money will
be able to work with hundreds of stem cell lines that have since been created —
and many more that will be created in the future. The full range of additional
research allowed won’t become apparent until new guidelines governing what
research can qualify for federal support are issued by the National Institutes
Other important embryonic research is still being hobbled by the so-called
Dickey-Wicker amendment. The amendment, which is regularly attached to
appropriations bills for the Department of Health and Human Services, prohibits
the use of federal funds to support scientific work that involves the
destruction of human embryos (as happens when stem cells are extracted) or the
creation of embryos for research purposes.
Until that changes, scientists who want to create embryos — and extract stem
cells — matched to patients with specific diseases will have to rely on private
or state support. Such research is one promising way to learn how the diseases
develop and devise the best treatments. Congress should follow Mr. Obama’s lead
and lift this prohibition so such important work can benefit from an infusion of
Science and Stem
The Big Dither
March 6, 2009
The New York Times
By PAUL KRUGMAN
Last month, in his big speech to Congress, President Obama argued for bold
steps to fix America’s dysfunctional banks. “While the cost of action will be
great,” he declared, “I can assure you that the cost of inaction will be far
greater, for it could result in an economy that sputters along for not months or
years, but perhaps a decade.”
Many analysts agree. But among people I talk to there’s a growing sense of
frustration, even panic, over Mr. Obama’s failure to match his words with deeds.
The reality is that when it comes to dealing with the banks, the Obama
administration is dithering. Policy is stuck in a holding pattern.
Here’s how the pattern works: first, administration officials, usually speaking
off the record, float a plan for rescuing the banks in the press. This trial
balloon is quickly shot down by informed commentators.
Then, a few weeks later, the administration floats a new plan. This plan is,
however, just a thinly disguised version of the previous plan, a fact quickly
realized by all concerned. And the cycle starts again.
Why do officials keep offering plans that nobody else finds credible? Because
somehow, top officials in the Obama administration and at the Federal Reserve
have convinced themselves that troubled assets, often referred to these days as
“toxic waste,” are really worth much more than anyone is actually willing to pay
for them — and that if these assets were properly priced, all our troubles would
Thus, in a recent interview Tim Geithner, the Treasury secretary, tried to make
a distinction between the “basic inherent economic value” of troubled assets and
the “artificially depressed value” that those assets command right now. In
recent transactions, even AAA-rated mortgage-backed securities have sold for
less than 40 cents on the dollar, but Mr. Geithner seems to think they’re worth
much, much more.
And the government’s job, he declared, is to “provide the financing to help get
those markets working,” pushing the price of toxic waste up to where it ought to
What’s more, officials seem to believe that getting toxic waste properly priced
would cure the ills of all our major financial institutions. Earlier this week,
Ben Bernanke, the Federal Reserve chairman, was asked about the problem of
“zombies” — financial institutions that are effectively bankrupt but are being
kept alive by government aid. “I don’t know of any large zombie institutions in
the U.S. financial system,” he declared, and went on to specifically deny that
A.I.G. — A.I.G.! — is a zombie.
This is the same A.I.G. that, unable to honor its promises to pay off other
financial institutions when bonds default, has already received $150 billion in
aid and just got a commitment for $30 billion more.
The truth is that the Bernanke-Geithner plan — the plan the administration keeps
floating, in slightly different versions — isn’t going to fly.
Take the plan’s latest incarnation: a proposal to make low-interest loans to
private investors willing to buy up troubled assets. This would certainly drive
up the price of toxic waste because it would offer a heads-you-win,
tails-we-lose proposition. As described, the plan would let investors profit if
asset prices went up but just walk away if prices fell substantially.
But would it be enough to make the banking system healthy? No.
Think of it this way: by using taxpayer funds to subsidize the prices of toxic
waste, the administration would shower benefits on everyone who made the mistake
of buying the stuff. Some of those benefits would trickle down to where they’re
needed, shoring up the balance sheets of key financial institutions. But most of
the benefit would go to people who don’t need or deserve to be rescued.
And this means that the government would have to lay out trillions of dollars to
bring the financial system back to health, which would, in turn, both ensure a
fierce public outcry and add to already serious concerns about the deficit.
(Yes, even strong advocates of fiscal stimulus like yours truly worry about red
ink.) Realistically, it’s just not going to happen.
So why has this zombie idea — it keeps being killed, but it keeps coming back —
taken such a powerful grip? The answer, I fear, is that officials still aren’t
willing to face the facts. They don’t want to face up to the dire state of major
financial institutions because it’s very hard to rescue an essentially insolvent
bank without, at least temporarily, taking it over. And temporary
nationalization is still, apparently, considered unthinkable.
But this refusal to face the facts means, in practice, an absence of action. And
I share the president’s fears: inaction could result in an economy that sputters
along, not for months or years, but for a decade or more.
The Big Dither, NYT,
Obama Tries to Start Conversation on Health Care
March 5, 2009
By THE ASSOCIATED PRESS
The New York Times
Filed at 3:04 a.m. ET
WASHINGTON (AP) -- President Barack Obama has invited to the White House more
than 120 people who hold a wide range of views on how to fix the world's
costliest health care system, one that still leaves millions uninsured.
A broad group of doctors, patients, business owners and insurers were to gather
for a forum Thursday in hopes of building support for big changes in health
care. Republicans are invited, and they're expected to speak up.
''The president wants to engage with Congress in a transparent and bipartisan
fashion,'' said Melody Barnes, who heads White House domestic policy.
Among the invitees are some who helped kill the Clinton administration's health
care overhaul in the 1990s. Everyone is supposed to be on his best behavior, but
will that last?
''This is a different day, '' said Chip Kahn, a hospital lobbyist who opposed
President Bill Clinton's plan and was to attend Thursday's gathering. ''I think
among most of the stakeholders, everyone wants to see this work. There is a
tremendous feeling that it's time.''
Now president of the Federation of American Hospitals, Kahn worked for the
insurance industry in the Clinton years.
The difference this time, Obama argues, is that health care costs have become
unsustainable, particularly in a sinking economy. The U.S. spends $2.4 trillion
a year on health care, yet an estimated 48 million Americans lack coverage.
Obama's goal is health coverage for everyone.
Barnes said Obama is determined to pass health care legislation this year, and
while he wants it to be bipartisan, he will not be deterred by obstruction from
interest groups or ideological partisans.
''The president will make clear this has to be a bipartisan effort,'' Barnes
said. ''As for people who are there to set up hurdles, from his perspective that
isn't tolerable. It's crucial to families, businesses and our nation's budget
that we address the issue of exploding costs.''
Senate Republican leader Mitch McConnell of Kentucky released a letter to Obama,
saying his party is ready to work with the administration on health care, but
warning that reforms should not lead to a government-run system, and must
balance coverage expansions with curbs on costs.
In support of Obama's efforts, liberal activists have mobilized to keep the
pressure on Congress to pass legislation this year.
''It would be a mistake to dismiss this as a gabfest,'' Drew Altman, president
of the Kaiser Family Foundation, said about Obama's meeting. ''It's an effort to
keep the momentum going. The details are not going to be worked in two or three
hours at a White House summit.''
There were concerns Wednesday about some of those details.
Senate Finance Committee Chairman Max Baucus, D-Mont., who will play a leading
role in writing health care legislation, raised questions about the proposed
$634 billion ''down payment'' for expanded coverage that Obama included in the
2010 budget he released last week.
On the Net:
Obama Tries to Start
Conversation on Health Care, NYT, 5.3.2009,
For Young President, Flecks of Gray
March 5, 2009
The New York Times
By HELENE COOPER
WASHINGTON — Well, that didn’t take long. Just 44 days into the job, and
President Obama is going gray.
It happens to all of them, of course — Bill Clinton still had about half a head
of brown hair when he took office but was a silver fox two years later, and
George W. Bush went from salt and pepper to just salt in what seemed like a
blink of an eye.
But so soon? “I started noticing it toward the end of the campaign and leading
up to inauguration,” says Deborah Willis, who, as co-author of “Obama: The
Historic Campaign in Photographs,” pored through 5,000 photographs of the first
head over the last year.
Mr. Obama’s graying is still of the flecked variety, and appears to wax and wane
depending on when he gets his hair cut, which he does about every two weeks. His
barber, who goes by only one name, Zariff, takes umbrage with bloggers who
alternately claim Mr. Obama, 47, is dyeing his hair gray (to appear more
distinguished) or dyeing it black (to appear younger). “I can tell you that his
hair is 100 percent natural,” Zariff said. “He wouldn’t get it colored.”
And for all of his 16 years giving Mr. Obama his “quo vadis” haircut — black
parlance from the 1960s for close-cut locks — Zariff said he is not about to
start ribbing Mr. Obama. “We do not tease about the gray at all,” he said.
For a guy who prides himself on projecting a stress-free demeanor, the changes
above his temples are speckled evidence that perhaps the psychological and
physical strains of the job — never mind the long process of winning it — are in
fact taking something of a toll. (Experts say stress can contribute to whitening
Mr. Obama seems to have noticed it at least as far back as last summer. “I’ve
been running for president for about 19 months now,” he told supporters at a
campaign event in Virginia in August. “Folks are noticing that I’ve got a lot
more gray hair now than when I started.”
But with the economy struggling, two wars raging and countless other pressures
facing him, the president is very likely to see additional signs of wear and
tear in the mirror each morning.
“Presidents age two years for every year that they’re in office,” said Dr.
Michael F. Roizen, co-founder of RealAge, a Web site that tells you how much
older your body really is because of all that smoking and drinking you have been
Rapidly lightening locks are just one sign that the job is getting to America’s
presidents. Many of them (Theodore Roosevelt, Woodrow Wilson, Franklin Delano
Roosevelt) also developed hypertension. Mr. Clinton had to have heart surgery
after leaving office.
Mr. Obama’s aides have not been giving him any grief. But since he has what is
probably the most photographed hair in the world right now, noted authorities in
coping with his condition are freely offering their advice.
The onetime basketball star Walt Frazier said in a telephone interview on
Wednesday that Mr. Obama should start dyeing his hair, as Mr. Frazier does (and
as Ronald Reagan was widely assumed to do). Reprising a Just For Men television
commercial that featured Mr. Frazier and the former New York Mets star Keith
Hernandez doing commentary on a poor graying schlub who gets “Rejected!” when he
approaches a woman at a bar, Mr. Frazier had these words for Mr. Obama: “No play
for Mr. Gray.”
For Young President,
Flecks of Gray, NYT, 5.3.2009,
Sharper Downturn Clouds Obama Spending Plans
February 28, 2009
The New York Times
By PETER S. GOODMAN
The economy is spiraling down at an accelerating pace, threatening to
undermine the Obama administration’s spending plans, which anticipate vigorous
rates of growth in years to come.
A sense of disconnect between the projections by the White House and the grim
realities of everyday American life was enhanced on Friday, as the Commerce
Department gave a harsher assessment for the last three months of 2008. In place
of an initial estimate that the economy contracted at an annualized rate of 3.8
percent — already abysmal — the government said that the pace of decline was
actually 6.2 percent, making it the worst quarter since 1982.
The fortunes of the American economy have grown so alarming and the pace of the
decline so swift that economists are now straining to describe where events are
headed, dusting off a word that has not been invoked since the 1940s:
Economists are not making comparisons with the Great Depression of the 1930s,
when the unemployment rate reached 25 percent. Current conditions are not even
as poor as during the twin recessions of the 1980s, when unemployment exceeded
10 percent, though many experts assert this downturn is on track to be
Rather, economists are using the word depression — a subjective term with no
academic definition — to describe a condition of broad and extreme economic
distress that remains stubbornly in place for much longer than a typical
This is more than a matter of semantics. As the government determines its
spending plans, readying another infusion of cash for troubled banks while
contemplating an additional bailout for the auto industry, the magnitude of
those needs will hinge on the extent of the damage.
Mark Zandi, chief economist of Moody’s Economy.com, now places the odds of “a
mild depression” at 25 percent, up from 15 percent three months ago. In that
view, the unemployment rate would reach 10.5 percent by the end of 2011 — up
from 7.6 percent at the end of January — average home prices would fall 20
percent on top of the 27 percent they have plunged already, and losses in the
financial system would more than triple, to $3.7 trillion.
Allen Sinai, chief global economist at the research firm Decision Economics,
sees a 20 percent chance of “a depressionlike possibility,” up from 15 percent a
“In the housing market, the financial system and the stock market, we’re already
there,” Mr. Sinai said. “It is a depression.”
Yet, in drawing up the budget, the White House assumed the economy would expand
by a robust 3.2 percent in 2010, with growth accelerating to 4 percent over the
next three years.
“It’s a hope, a wing and a prayer,” Mr. Sinai said. “It’s a return to a sanguine
view of the economy that is simply not justified.”
If, as is widely anticipated, the economy grows more slowly than the White House
assumes, revenue will be lower, forcing the government to cut spending, raise
taxes or run larger deficits.
Economists also criticized as unrealistically hopeful the assumptions by the
Federal Reserve as it began so-called stress tests to gauge the health of the
nation’s largest banks. In testimony, Ben S. Bernanke, the Fed chairman, said
that the nation’s unemployment rate would most likely reach 8.8 percent next
“That forecast just doesn’t seem realistic,” said Dean Baker, co-director of the
Center for Economic and Policy Research in Washington, “and I don’t think it
helps the Fed’s credibility to make these sorts of forecasts right now.”
As federal regulators estimate potential losses at banks, the harshest
assumptions they are testing entails the unemployment rate topping out at 10.3
percent — the highest level since 1983, but hardly the worst case.
By Mr. Baker’s reckoning, the unemployment rate may exceed 12 percent — the
highest level since tracking began in 1948.
“We continue to see across-the-board numbers coming in worse than we expected,”
Mr. Baker said.
By Mr. Zandi’s estimation, in the most likely case, the unemployment rate will
reach 9.3 percent next year. The distress in the financial system, the job
market and real estate have become inextricably intertwined.
As troubled banks remain hesitant to lend, even healthy companies are laying off
workers. As more Americans lose jobs, they are cutting spending, depriving
businesses of revenue, and falling behind on house, car and credit card
payments, multiplying losses in the financial system. As more homes land in
foreclosure and would-be buyers fail to secure mortgages, housing prices fall
further, adding to the losses of the banks — a downward spiral.
Many economists expect that the labor data to be released next Friday will show
that as many as 700,000 jobs disappeared in February, lifting the unemployment
rate near 8 percent and pushing total job losses to more than four million since
the recession began in December 2007.
Given the brutal forces at play, some experts question the administration’s
decision to publicize the bank stress tests, as opposed to conducting them
“It invited the interpretation that this was the beginning of triage for the
banks, that we were going to start lining them up and shooting them,” said Alan
S. Blinder, a former vice chairman of the Federal Reserve and a professor at
Princeton. “There are some things in the bank supervisor role that you just keep
Others argue that the tests could sow needed assurance. “The stress test could
create transparency,” said Alan D. Levenson, chief economist at T. Rowe Price in
As the gruesome data accumulates, this much is already clear: Transparency is
not for the squeamish.
Mr. Levenson noted that the weakening economy was destroying demand for goods
and services even faster than the $787 billion stimulus program could replace
Sharper Downturn Clouds
Obama Spending Plans, NYT, 28.2.2009,
With Pledges to Troops and Iraqis, Obama Details Pullout
February 28, 2009
The New York Times
By PETER BAKER
CAMP LEJEUNE, N.C. — President Obama declared Friday that the United States
has now “begun the work of ending this war” in Iraq as he announced the
withdrawal of most American forces by the summer of next year while leaving
behind as many as 50,000 troops for more limited missions.
Nearly six years after American troops crossed the border into Iraq to topple
Saddam Hussein, Mr. Obama said “renewed cause for hope” produced by improved
security would allow Americans to begin disentangling militarily and turn the
country over to the Iraqis themselves.
“Let me say this as plainly as I can,” the president told thousands of Marines
stationed here. “By August 31, 2010, our combat mission in Iraq will end.”
The “transitional force” he will leave behind will no longer participate in
major combat missions but instead train and advise Iraqi security forces, hunt
down terrorist cells and protect American civilian and military personnel
working in Iraq. Mr. Obama promised that all of them will leave as well by
December 2011 in accordance with a security agreement with Iraq negotiated by
President George W. Bush before he left office last month.
At the same time, Mr. Obama vowed to continue the American commitment to
building a new Iraqi society and to resettling millions of displaced Iraqis
still away from home — elsewhere in their own nation or in neighboring
countries. And he promised to escalate diplomatic involvement in the broader
region, including new lines of communication with Iran and Syria.
“Every nation and every group must know — whether you wish America good or ill —
that the end of the war in Iraq will enable a new era of American leadership and
engagement in the Middle East,” the president said. “And that era has just
The announcement marked a sharp turning point in the American venture in Iraq,
one that signaled a shift in the once-fiery political debate at home and in the
nation’s priorities abroad. The choice of Camp Lejeune, the largest Marine base
on the East Coast, symbolized the transition because 8,000 troops from here will
soon ship out to Afghanistan as part of a 17,000-troop buildup ordered by Mr.
The reaction to the Iraq drawdown plan indicated an emerging consensus in the
United States that it is time to begin getting out. While some leading
Congressional Democrats grumbled about the size of the residual force, the
drawdown largely won support across party lines, including from leading
Republicans like Senator John McCain of Arizona, who lost year’s election to Mr.
Obama after a fierce debate over Iraq.
Speaking on the Senate floor on Friday before the president’s speech, Mr. McCain
credited the opportunity to pull troops out to the surge that Mr. Bush ordered
two years ago with his support. But he cautioned that Iraq remains fragile,
urging Mr. Obama to remain flexible and listen to military commanders.
“With these factors in mind, I believe the president’s withdrawal plan is a
reasonable one,” Mr. McCain said. “Given the gains in Iraq and the requirements
to send additional troops to Afghanistan, together with the significant number
of troops that will remain in Iraq and the president’s willingness to reassess
based on conditions on the ground, I am cautiously optimistic that the plan as
laid out by the president can lead to success.”
Former Bush aides also offered support for the plan, calling it the logical next
step after the president’s agreement with Iraq to withdraw all forces by the end
of 2011. “The specific timing is only slightly different but consistent with the
goal of helping Iraq become self sufficient in providing its own security,”
Gordon D. Johndroe, who was Mr. Bush’s last national security spokesman, said in
an interview. “This is possible because of the success of the surge.”
Mr. Obama called Mr. Bush from a holding room at Camp Lejeune just before going
on stage in the base gymnasium to make the announcement, aides said. He called
Prime Minister Nuri Kamal al-Maliki of Iraq from Air Force One on the flight
from Washington to brief him on the withdrawal plan.
In Baghdad, Yassen Majeed, an adviser to Mr. Maliki, said the prime minister “is
very comfortable with the plan.”
“The Prime Minister assured the American president that the security situation
in Iraq is stable and his forces are ready to take over all the responsibilities
from the American side.”
But others there were more cautious, including Sunni lawmakers worried about
their the possible erosion of their influence in the Shiite-dominated
Several noted with approval Mr. Obama’s statement that the Iraqi government
would only have American support as long as it remained non-sectarian. “All
Iraqis want the American to withdraw from Iraq as soon as possible,” said Adnan
al-Dulaimi, a senior Sunni politician. “We’re just afraid of the vacuum that
this withdrawal may cause.”
During his speech, Mr. Obama credited troops who “got the job done” but gave no
credit to the troop surge and associated strategy shift that he opposed in
January 2007. He praised Ambassador Ryan Crocker as an “unsung hero” and Gens.
David H. Petraeus and Ray Odierno as the “finest generals,” without mentioning
Mr. Bush. His only implicit reference to his predecessor came when he said Iraq
had taught painful lessons about how and when America should go to war.
“We have learned that we must always weigh the costs of action, and communicate
those costs candidly to the American people,” he said. He added: “We must use
all elements of American power to achieve our objectives, which is why I am
committed to building our civilian national security capacity so that the burden
is not continually pushed on to our military. We have learned that our political
leaders must pursue the broad and bipartisan support that our national security
policies depend upon, which is why I will consult with Congress and in carrying
out my plans. And we have learned the importance of working closely with friends
and allies, which is why we are launching a new era of engagement in the world.”
To that end, Mr. Obama also introduced Christopher Hill, a veteran diplomat, as
his ambassador to Iraq.
The president’s plan to disengage will pull out most of the 142,000 troops in
Iraq by August 2010, or 19 months after his inauguration and three months longer
than he promised on the campaign trail. From 35,000 to 50,000 troops will remain
until December 2011. While the Bush team once envisioned a long-term peacetime
presence along the lines of Germany and South Korea, Mr. Obama’s aides rejected
“The path we’re on here, the path is not towards any sort of Korea model,” said
a senior administration official, briefing reporters under ground rules
requiring that he not be identified. “The path is towards reducing, in a fairly
substantial way, U.S. forces in 2010 and then down to what’s currently
anticipated, down to zero, by the end of 2011.”
Mr. Obama’s withdrawal plan will still leave the vast bulk of American forces in
Iraq through the end of this year to let ground commanders have the forces they
want to guard against any resurgence of violence surrounding parliamentary
elections in December and any subsequent transition of power. The drawdown would
then accelerate early next year.
Officials said Mr. Obama agreed to the longer-than-promised timeframe and the
gradual approach after consulting military commanders and the Joint Chiefs of
Staff. The military presented three options to the president — one that would
fulfill his 16-month campaign time frame, a 19-month middle ground, and a
23-month option that General Odierno, the ground commander in Iraq, thought
would present the lowest risk.
The administration convened interagency working groups to evaluate the risks and
benefits of the different options and ultimately Mr. Obama became convinced by
General Odierno that he needed more than 16 months to get through the elections
safely. “The president found that very compelling,” a top official said.
At the same time, the Joint Chiefs were concerned about leaving troops there too
long because of the strain on the overall armed forces and the need to reinforce
the mission in Afghanistan.
The final 19-month plan had the support of all of Mr. Obama’s national security
team, officials said, including Defense Secretary Robert M. Gates and Adm. Mike
Mullen, the Joint Chiefs chairman, who were both held over from the Bush
administration. Officials said Generals Odierno and Petraeus, the Middle East
commander, were also comfortable with the plan.
But senior Democrats, while happy that most troops will be withdrawn, are not
completely satisfied. Congressional leaders in recent days have criticized the
size of the residual force, even though Mr. Obama said consistently during last
year’s campaign that he would leave troops behind for limited missions.
Senator Harry Reid of Nevada, the Senate majority leader, who complained
Thursday that a 50,000-member residual force was too big, put out a more
tempered statement Friday, calling Mr. Obama’s plan "sound and measured," while
adding that he still wants to keep "only those forces necessary for the security
of our remaining troops and the Iraqi people."
A person briefed on the closed-door White House briefing for Congressional
leaders said Representative Nancy Pelosi of California, the House speaker, was
particularly upset about the residual force. She kicked off the public criticism
on Wednesday by saying she did not understand “the justification” for 50,000
By contrast, Republicans seemed more amenable to the plan. During the Thursday
evening session with Mr. Obama, Mr. Gates, Admiral Mullen and Vice President
Joseph R. Biden Jr. in the State Dining Room, Mr. McCain said he thought the
withdrawal plan was thoughtful and well prepared, according to several people
who were present.
Representative John A. Boehner of Ohio, the House Republican leader, and other
senior Republicans were likewise generally supportive, while advocating
flexibility to preserve security gains of the last two years, according to
Representative John M. McHugh of New York, the ranking Republican on the House
Armed Services Committee, said Mr. Obama had reassured him that he would revisit
the plan if circumstances changed.
“The president’s objective to withdraw U.S. combat forces from Iraq is one that
we should pray for, plan for and work toward,” Mr. McHugh said. “However, I
remain concerned that the security situation in Iraq is fragile, and we should
work to mitigate any risks to our troops and their mission.”
Mark Santora contributed reporting from Baghdad.
With Pledges to Troops
and Iraqis, Obama Details Pullout, NYT, 28.2.2009,
Obama’s Speech at Camp Lejeune, N.C.
February 27, 2009
The New York Times
Following are the prepared remarks of President Obama about withdrawing from
Iraq at Camp Lejeune, N.C., on Feb. 27, 2008, as provided by the White House.
Good morning Marines. Good morning Camp Lejeune. Good morning Jacksonville.
Thank you for that outstanding welcome. I want to thank Lieutenant General
Hejlik for hosting me here today.
I also want to acknowledge all of our soldiers, sailors, airmen and Marines
serving in Iraq and Afghanistan. That includes the Camp Lejeune Marines now
serving with – or soon joining – the Second Marine Expeditionary Force in Iraq;
those with Special Purpose Marine Air Ground Task Force in Afghanistan; and
those among the 8,000 Marines who are preparing to deploy to Afghanistan. We
have you in our prayers. We pay tribute to your service. We thank you and your
families for all that you do for America. And I want all of you to know that
there is no higher honor or greater responsibility than serving as your
I also want to take this opportunity to acknowledge Ryan Crocker, who recently
completed his service as our Ambassador to Iraq. Throughout his career, Ryan
always took on the toughest assignments. He is an example of the very best that
this nation has to offer, and we owe him a great debt of gratitude. He carried
on his work with an extraordinary degree of cooperation with two of our finest
Generals – General David Petraeus, and General Ray Odierno – who will be
critical in carrying forward the strategy that I will outline today.
Next month will mark the sixth anniversary of the war in Iraq. By any measure,
this has already been a long war. For the men and women of America’s armed
forces – and for your families – this war has been one of the most extraordinary
chapters of service in the history of our nation. You have endured tour after
tour after tour of duty. You have known the dangers of combat and the lonely
distance of loved ones. You have fought against tyranny and disorder. You have
bled for your best friends and for unknown Iraqis. And you have borne an
enormous burden for your fellow citizens, while extending a precious opportunity
to the people of Iraq. Under tough circumstances, the men and women of the
United States military have served with honor, and succeeded beyond any
Today, I have come to speak to you about how the war in Iraq will end.
To understand where we need to go in Iraq, it is important for the American
people to understand where we now stand. Thanks in great measure to your
service, the situation in Iraq has improved. Violence has been reduced
substantially from the horrific sectarian killing of 2006 and 2007. Al Qaeda in
Iraq has been dealt a serious blow by our troops and Iraq’s Security Forces, and
through our partnership with Sunni Arabs. The capacity of Iraq’s Security Forces
has improved, and Iraq’s leaders have taken steps toward political
accommodation. The relative peace and strong participation in January’s
provincial elections sent a powerful message to the world about how far Iraqis
have come in pursuing their aspirations through a peaceful political process.
But let there be no doubt: Iraq is not yet secure, and there will be difficult
days ahead. Violence will continue to be a part of life in Iraq. Too many
fundamental political questions about Iraq’s future remain unresolved. Too many
Iraqis are still displaced or destitute. Declining oil revenues will put an
added strain on a government that has had difficulty delivering basic services.
Not all of Iraq’s neighbors are contributing to its security. Some are working
at times to undermine it. And even as Iraq’s government is on a surer footing,
it is not yet a full partner – politically and economically – in the region, or
with the international community
In short, today there is a renewed cause for hope in Iraq, but that hope rests
upon an emerging foundation.
On my first full day in office, I directed my national security team to
undertake a comprehensive review of our strategy in Iraq to determine the best
way to strengthen that foundation, while strengthening American national
security. I have listened to my Secretary of Defense, the Joint Chiefs of Staff,
and commanders on the ground. We have acted with careful consideration of events
on the ground; with respect for the security agreements between the United
States and Iraq; and with a critical recognition that the long-term solution in
Iraq must be political – not military. Because the most important decisions that
have to be made about Iraq’s future must now be made by Iraqis.
We have also taken into account the simple reality that America can no longer
afford to see Iraq in isolation from other priorities: we face the challenge of
refocusing on Afghanistan and Pakistan; of relieving the burden on our military;
and of rebuilding our struggling economy – and these are challenges that we will
Today, I can announce that our review is complete, and that the United States
will pursue a new strategy to end the war in Iraq through a transition to full
This strategy is grounded in a clear and achievable goal shared by the Iraqi
people and the American people: an Iraq that is sovereign, stable, and
self-reliant. To achieve that goal, we will work to promote an Iraqi government
that is just, representative, and accountable, and that provides neither support
nor safe-haven to terrorists. We will help Iraq build new ties of trade and
commerce with the world. And we will forge a partnership with the people and
government of Iraq that contributes to the peace and security of the region.
What we will not do is let the pursuit of the perfect stand in the way of
achievable goals. We cannot rid Iraq of all who oppose America or sympathize
with our adversaries. We cannot police Iraq’s streets until they are completely
safe, nor stay until Iraq’s union is perfected. We cannot sustain indefinitely a
commitment that has put a strain on our military, and will cost the American
people nearly a trillion dollars. America’s men and women in uniform have fought
block by block, province by province, year after year, to give the Iraqis this
chance to choose a better future. Now, we must ask the Iraqi people to seize it.
The first part of this strategy is therefore the responsible removal of our
combat brigades from Iraq.
As a candidate for President, I made clear my support for a timeline of 16
months to carry out this drawdown, while pledging to consult closely with our
military commanders upon taking office to ensure that we preserve the gains
we’ve made and protect our troops. Those consultations are now complete, and I
have chosen a timeline that will remove our combat brigades over the next 18
Let me say this as plainly as I can: by August 31, 2010, our combat mission in
Iraq will end.
As we carry out this drawdown, my highest priority will be the safety and
security of our troops and civilians in Iraq. We will proceed carefully, and I
will consult closely with my military commanders on the ground and with the
Iraqi government. There will surely be difficult periods and tactical
adjustments. But our enemies should be left with no doubt: this plan gives our
military the forces and the flexibility they need to support our Iraqi partners,
and to succeed.
After we remove our combat brigades, our mission will change from combat to
supporting the Iraqi government and its Security Forces as they take the
absolute lead in securing their country. As I have long said, we will retain a
transitional force to carry out three distinct functions: training, equipping,
and advising Iraqi Security Forces as long as they remain non-sectarian;
conducting targeted counter-terrorism missions; and protecting our ongoing
civilian and military efforts within Iraq. Initially, this force will likely be
made up of 35-50,000 U.S. troops.
Through this period of transition, we will carry out further redeployments. And
under the Status of Forces Agreement with the Iraqi government, I intend to
remove all U.S. troops from Iraq by the end of 2011. We will complete this
transition to Iraqi responsibility, and we will bring our troops home with the
honor that they have earned.
As we responsibly remove our combat brigades, we will pursue the second part of
our strategy: sustained diplomacy on behalf of a more peaceful and prosperous
The drawdown of our military should send a clear signal that Iraq’s future is
now its own responsibility. The long-term success of the Iraqi nation will
depend upon decisions made by Iraq’s leaders and the fortitude of the Iraqi
people. Iraq is a sovereign country with legitimate institutions; America cannot
– and should not – take their place. However, a strong political, diplomatic,
and civilian effort on our part can advance progress and help lay a foundation
for lasting peace and security.
This effort will be led by our new Ambassador to Iraq – Chris Hill. From his
time in the Peace Corps, to his work in Kosovo and Korea, Ambassador Hill has
been tested, and he has shown the pragmatism and skill that we need right now.
He will be supported by the courageous and capable work of so many American
diplomats and aid workers who are serving in Iraq.
Going forward, we can make a difference on several fronts. We will work with the
United Nations to support national elections, while helping Iraqis improve local
government. We can serve as an honest broker in pursuit of fair and durable
agreements on issues that have divided Iraq’s leaders. And just as we will
support Iraq’s Security Forces, we will help Iraqi institutions strengthen their
capacity to protect the rule of law, confront corruption, and deliver basic
Diplomacy and assistance is also required to help the millions of displaced
Iraqis. These men, women and children are a living consequence of this war and a
challenge to stability in the region, and they must become a part of Iraq’s
reconciliation and recovery. America has a strategic interest – and a moral
responsibility – to act. In the coming months, my administration will provide
more assistance and take steps to increase international support for countries
already hosting refugees; we’ll cooperate with others to resettle Iraqis facing
great personal risk; and we will work with the Iraqi government over time to
resettle refugees and displaced Iraqis within Iraq – because there are few more
powerful indicators of lasting peace than displaced citizens returning home.
Now, before I go any further, I want to take a moment to speak directly to the
people of Iraq.
You are a great nation, rooted in the cradle of civilization. You are joined
together by enduring accomplishments, and a history that connects you as surely
as the two rivers carved into your land. In years past, you have persevered
through tyranny and terror; through personal insecurity and sectarian violence.
And instead of giving in to the forces of disunion, you stepped back from a
descent into civil war, and showed a proud resilience that deserves respect.
Our nations have known difficult times together. But ours is a bond forged by
shared bloodshed, and countless friendships among our people. We Americans have
offered our most precious resource – our young men and women – to work with you
to rebuild what was destroyed by despotism; to root out our common enemies; and
to seek peace and prosperity for our children and grandchildren, and for yours.
There are those who will try to prevent that future for Iraq – who will insist
that Iraq’s differences cannot be reconciled without more killing. They
represent the forces that destroy nations and lead only to despair, and they
will test our will in the months and years to come. America, too, has known
these forces. We endured the pain of Civil War, and bitter divisions of region
and race. But hostility and hatred are no match for justice; they offer no
pathway to peace; and they must not stand between the people of Iraq and a
future of reconciliation and hope.
So to the Iraqi people, let me be clear about America’s intentions. The United
States pursues no claim on your territory or your resources. We respect your
sovereignty and the tremendous sacrifices you have made for your country. We
seek a full transition to Iraqi responsibility for the security of your country.
And going forward, we can build a lasting relationship founded upon mutual
interests and mutual respect as Iraq takes its rightful place in the community
That leads me to the third part of our strategy –comprehensive American
engagement across the region.
The future of Iraq is inseparable from the future of the broader Middle East, so
we must work with our friends and partners to establish a new framework that
advances Iraq’s security and the region’s. It is time for Iraq to be a full
partner in a regional dialogue, and for Iraq’s neighbors to establish productive
and normalized relations with Iraq. And going forward, the United States will
pursue principled and sustained engagement with all of the nations in the
region, and that will include Iran and Syria.
This reflects a fundamental truth: we can no longer deal with regional
challenges in isolation – we need a smarter, more sustainable and comprehensive
approach. That is why we are renewing our diplomacy, while relieving the burden
on our military. That is why we are refocusing on al Qaeda in Afghanistan and
Pakistan; developing a strategy to use all elements of American power to prevent
Iran from developing a nuclear weapon; and actively seeking a lasting peace
between Israel and the Arab world. And that is why we have named three of
America’s most accomplished diplomats – George Mitchell, Dennis Ross and Richard
Holbrooke – to support Secretary Clinton and me as we carry forward this agenda.
Every nation and every group must know – whether you wish America good or ill –
that the end of the war in Iraq will enable a new era of American leadership and
engagement in the Middle East. And that era has just begun.
Finally, I want to be very clear that my strategy for ending the war in Iraq
does not end with military plans or diplomatic agendas – it endures through our
commitment to uphold our sacred trust with every man and woman who has served in
You make up a fraction of the American population, but in an age when so many
people and institutions have acted irresponsibly, you did the opposite – you
volunteered to bear the heaviest burden. And for you and for your families, the
war does not end when you come home. It lives on in memories of your fellow
soldiers, sailors, airmen and Marines who gave their lives. It endures in the
wound that is slow to heal, the disability that isn’t going away, the dream that
wakes you at night, or the stiffening in your spine when a car backfires down
You and your families have done your duty – now a grateful nation must do ours.
That is why I am increasing the number of soldiers and Marines, so that we
lessen the burden on those who are serving. And that is why I have committed to
expanding our system of veterans health care to serve more patients, and to
provide better care in more places. We will continue building new wounded
warrior facilities across America, and invest in new ways of identifying and
treating the signature wounds of this war: Post-Traumatic Stress Disorder and
Traumatic Brain Injury, as well as other combat injuries.
We also know that service does not end with the person wearing the uniform. In
her visits with military families across the country, my wife Michelle has
learned firsthand about the unique burden that your families endure every day. I
want you to know this: military families are a top priority for Michelle and me,
and they will be a top priority for my administration. We’ll raise military pay,
and continue providing quality child-care, job-training for spouses, and
expanded counseling and outreach to families that have known the separation and
stress of war. We will also heed the lesson of history – that those who fight in
battle can form the backbone of our middle class – by implementing a 21st
century GI Bill to help our veterans live their dreams.
As a nation, we have had our share of debates about the war in Iraq. It has, at
times, divided us as a people. To this very day, there are some Americans who
want to stay in Iraq longer, and some who want to leave faster. But there should
be no disagreement on what the men and women of our military have achieved.
And so I want to be very clear: We sent our troops to Iraq to do away with
Saddam Hussein’s regime – and you got the job done. We kept our troops in Iraq
to help establish a sovereign government – and you got the job done. And we will
leave the Iraqi people with a hard-earned opportunity to live a better life –
that is your achievement; that is the prospect that you have made possible.
There are many lessons to be learned from what we’ve experienced. We have
learned that America must go to war with clearly defined goals, which is why
I’ve ordered a review of our policy in Afghanistan. We have learned that we must
always weigh the costs of action, and communicate those costs candidly to the
American people, which is why I’ve put Iraq and Afghanistan into my budget. We
have learned that in the 21st century, we must use all elements of American
power to achieve our objectives, which is why I am committed to building our
civilian national security capacity so that the burden is not continually pushed
on to our military. We have learned that our political leaders must pursue the
broad and bipartisan support that our national security policies depend upon,
which is why I will consult with Congress and in carrying out my plans. And we
have learned the importance of working closely with friends and allies, which is
why we are launching a new era of engagement in the world.
The starting point for our policies must always be the safety of the American
people. I know that you – the men and women of the finest fighting force in the
history of the world – can meet any challenge, and defeat any foe. And as long
as I am your Commander-in-Chief, I promise you that I will only send you into
harm’s way when it is absolutely necessary, and provide you with the equipment
and support you need to get the job done. That is the most important lesson of
all – for the consequences of war are dire, the sacrifices immeasurable.
You know because you have seen those sacrifices. You have lived them. And we all
“Semper Fidelis” – it means always being faithful to Corps, and to country, and
to the memory of fallen comrades like Corporal Jonathan Yale and Lance Corporal
Jordan Haerter. These young men enlisted in a time of war, knowing they would
face great danger. They came here, to Camp Lejeune, as they trained for their
mission. And last April, they were standing guard in Anbar. In an age when
suicide is a weapon, they were suddenly faced with an oncoming truck filled with
explosives. These two Marines stood their ground. These two Marines opened fire.
And these two Marines stopped that truck. When the thousands of pounds of
explosives detonated, they had saved fifty Marines and Iraqi police who would
have been in the truck’s path, but Corporal Yale and Lance Corporal Haerter lost
their own lives. Jonathan was 21. Jordan was 19.
In the town where Jordan Haerter was from, a bridge was dedicated in his name.
One Marine who traveled to the ceremony said: “We flew here from all over the
country to pay tribute to our friend Jordan, who risked his life to save us. We
wouldn’t be here without him.”
America’s time in Iraq is filled with stories of men and women like this. Their
names are written into bridges and town squares. They are etched into stones at
Arlington, and in quiet places of rest across our land. They are spoken in
schools and on city blocks. They live on in the memories of those who wear your
uniform, in the hearts of those they loved, and in the freedom of the nation
Each American who has served in Iraq has their own story. Each of you has your
own story. And that story is now a part of the history of the United States of
America – a nation that exists only because free men and women have bled for it
from the beaches of Normandy to the deserts of Anbar; from the mountains of
Korea to the streets of Kandahar. You teach us that the price of freedom is
great. Your sacrifice should challenge all of us – every single American – to
ask what we can do to be better citizens.
There will be more danger in the months ahead. We will face new tests and
unforeseen trials. But thanks to the sacrifices of those who have served, we
have forged hard-earned progress, we are leaving Iraq to its people, and we have
begun the work of ending this war.
Thank you, God Bless you, and God Bless the United States of America. Semper Fi.
Obama’s Speech at Camp
Lejeune, N.C., NYT, 27.2.2009,
Indictment of Enemy Combatant Is Unsealed
February 27, 2009
Filed at 2:09 p.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- Federal authorities have unsealed an indictment against
alleged al-Qaida sleeper agent Ali al-Marri, moving him into the civilian court
system as the Obama administration considers a new strategy for handling terror
Al-Marri has been held in a Navy brig outside Charleston, S.C. for more than
five years since President George W. Bush declared him an enemy combatant.
He will now be transferred to Peoria, Ill., to face trial in a civilian court on
a charge of providing material support to al-Qaida and a related conspiracy
count. The charges carry a maximum prison sentence of 15 years each.
Al-Marri has a case before the Supreme Court challenging the president's
authority to arrest terror suspects in the United States and hold them
indefinitely without charges.
Now that he has been indicted, Justice Department officials said they would ask
to have the Supreme Court case dismissed.
Al-Marri's transfer is the first signal of how the Obama administration is
likely to handle accused terrorists, a significant shift from the strategy of
the Bush administration.
Since shortly after the Sept. 11, 2001, terror attacks, government lawyers
argued that the president has the wartime authority to send the military into
any U.S. neighborhood, capture a citizen -- or legal resident like al-Marri --
and hold him in prison without charge, indefinitely.
With al-Marri's indictment, President Barack Obama ordered the military to turn
al-Marri over to the Justice Department, when requested by Attorney General Eric
Holder. It was not immediately clear when that handover would take place.
Holder said in a statement the charges show the government's ''resolve to
protect the American people and prosecute alleged terrorists.''
The attorney general said the Obama administration ''will hold accountable
anyone who attempts to do harm to Americans, and we will do so in a manner
consistent with our values.''
The government has said al-Marri is an al-Qaida sleeper agent who has met Osama
bin Laden and spent time at a terrorist training camp in Afghanistan.
A legal U.S. resident when he was arrested, al-Marri has been held in solitary
confinement at the brig since 2003.
Al-Marri was arrested in late 2001 as part of the FBI's investigation of the
Sept. 11 attacks. Prosecutors at first indicted him on charges of credit card
fraud and lying to the FBI, not terror charges.
In June 2003, Bush said al-Marri had vital information about terror plots,
declared him an enemy combatant and ordered him transferred to military custody.
Indictment of Enemy
Combatant Is Unsealed, NYT, 27.2.2009,
Obama’s Budget Plan Sweeps Away Reagan Ideas
February 27, 2009
The New York Times
By DAVID LEONHARDT
The budget that President Obama proposed on Thursday is nothing less than an
attempt to end a three-decade era of economic policy dominated by the ideas of
Ronald Reagan and his supporters.
The Obama budget — a bold, even radical departure from recent history, wrapped
in bureaucratic formality and statistical tables — would sharply raise taxes on
the rich, beyond where Bill Clinton had raised them. It would reduce taxes for
everyone else, to a lower point than they were under either Mr. Clinton or
George W. Bush. And it would lay the groundwork for sweeping changes in health
care and education, among other areas.
More than anything else, the proposals seek to reverse the rapid increase in
economic inequality over the last 30 years. They do so first by rewriting the
tax code and, over the longer term, by trying to solve some big causes of the
middle-class income slowdown, like high medical costs and slowing educational
After Mr. Obama spent much of his first five weeks in office responding to the
financial crisis, his budget effectively tried to reclaim momentum for the
priorities on which he campaigned.
His efforts would add to a budget deficit already swollen by Mr. Bush’s policies
and the recession, creating the largest deficit, relative to the size of the
economy, since World War II. Erasing that deficit will require some tough
choices — about further spending cuts and tax increases — that Mr. Obama avoided
But he nonetheless made choices.
He sought to eliminate some corporate subsidies, for health insurers, banks and
agricultural companies, that economists have long criticized. He proposed
putting a price on carbon, to slow global warming, and then refunding most of
the revenue from that program through broad-based tax cuts. He called for
roughly $100 billion a year in tax increases on the wealthy — mostly delayed
until 2011, when the recession will presumably have ended — and $50 billion a
year in net tax cuts for the nonwealthy.
The history of the United States economy over the last 70 years can be roughly
divided into two periods: the decades immediately after World War II, when
inequality plummeted, and the past three decades, when global economic forces
and government policies caused it to soar. Mr. Obama is setting out to begin a
third period that looks more like the first than the second.
That agenda starts with taxes. Over the last three decades, the pretax incomes
of the wealthiest households have risen far more than they have for other
households, while the tax rates for top earners have fallen more than they have
for others, according to the Congressional Budget Office.
As a result, the average post-tax income of the top 1 percent of households has
jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4
million. Pay for most families has risen only slightly faster than inflation.
Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked to
tell a hypothetical story to distill the trend. The increase in inequality, Mr.
Summers would say, meant that each family in the bottom 80 percent of the income
distribution was effectively sending a $10,000 check, every year, to the top 1
percent of earners.
Mr. Obama’s budget reflects that sensibility. Budget experts were still sorting
through the details on Thursday, but it appeared that various tax cuts and
credits aimed at the middle class and the poor would increase the take-home pay
of the median household by roughly $800.
The tax increases on the top 1 percent, meanwhile, will most likely cost them
$100,000 a year.
“The tax code will become more progressive, with relatively higher rates on the
rich and relatively lower rates on the middle class and poor,” said Roberton
Williams, a senior fellow at the Tax Policy Center in Washington. “This is
reversing the effects of the Bush policies,” he added, and then going even
And just as Franklin D. Roosevelt’s tax increases on the wealthy followed a
stock market crash, which had already depressed their incomes, Mr. Obama’s
proposals — if they become law — would too. The combination has the potential to
reverse a significant portion of the inequality trends of the last few decades.
But for the country to repeat the post-World War II pattern, the incomes of most
families would also have to begin rising at a faster rate than they have since
the 1970s. That outcome remains deeply uncertain. Economists who study economic
growth say the American economy is unlikely to grow nearly as fast in coming
years as in the 1950s and ’60s.
Mr. Obama would try to lift the incomes of the middle class and poor through two
main channels, administration officials said. The first is an overhaul of health
care, meant to reduce the insurance premiums now taking a large bite out of many
The details remain vague, but the budget begins paying for investments that
would eventually allow Medicare officials to refuse to pay for medical treatment
that does not show evidence of improving health. If successful, that change
would vastly reduce the government’s long-term budget deficit. It is also likely
to bring down private health costs, since insurers typically follow Medicare’s
The other channel is education. Over the last three decades, the pay of college
graduates has risen significantly faster than the pay of less-educated workers.
Mr. Obama aims to move workers into the first category by increasing federal
financial aid and simplifying the myriad of aid programs. In recent years, the
United States has lost its standing as the country in which the largest share of
young adults graduates from college.
“Low- and middle-income kids often don’t aspire to college,” Peter Orszag,
director of the Office of Management and Budget, said Thursday. “They hear
‘$40,000 tuition’ and think that’s impossible.”
There are still many outstanding questions about Mr. Obama’s efforts, starting
with whether Congress will pass a budget that looks anything like his.
His proposals on health care are likely to meet stiff opposition from some
doctors and insurers. Spending more money on financial aid — absent other
changes to the education system — may not lift the graduation rate very much.
And if the economy remains weak into next year, as many forecasters expect,
Congressional Republicans will try to pin the blame on the looming tax increases
on the affluent.
Whatever happens, though, it has been a long time since any president has tried
to use his budget to shape the government and the economy quite as much as Mr.
Obama did on Thursday. On that score, he and President Reagan have something in
Obama’s Budget Plan
Sweeps Away Reagan Ideas, NYT, 27.2.2009,
Obama Plans Major Shifts in Spending
February 27, 2009
The New York Times
By JACKIE CALMES and ROBERT PEAR
President Obama’s new budget blueprint estimates a stunning deficit of $1.75
trillion for the current fiscal year, which began five months ago, then lays out
a wrenching change of course as he seeks to finance his own priorities while
stanching the flow of red ink.
By redirecting enormous streams of deficit spending toward programs like health
care, education and energy, and paying for some of it through taxes on the rich,
pollution surcharges, and cuts in such inviolable programs as farm subsidies,
the $3.55 trillion spending plan Mr. Obama is undertaking signals a radical
change of course that Congress has yet to endorse.
The deficit he inherited, a shortfall of more than $1 trillion as the current
fiscal year began, has continued to swell in recent months with additional bank
bailouts, the first wave of spending from a newly enacted stimulus plan and the
continuing costs of the wars in Iraq and Afghanistan.
The administration, as it had announced, will try to cut that amount sharply by
2013, when Mr. Obama’s first term ends, to $533 billion, even as it escalates
spending on crucial priorities.
“There are times when you can afford to redecorate your house,” Mr. Obama said
on Thursday morning as he released an outline of the budget for the next fiscal
year, which begins in October, “and there are times when you have to focus on
rebuilding its foundation.”
His administration will attempt to close the large fiscal gap even while
starting a major health-care initiative intended to substantially extend
coverage; to do so, it foresees increasing taxes on the wealthiest Americans and
using revenue from a new program: selling carbon credits to manufacturers as
part of a cap-and-trade plan meant to slow climate change.
Further savings would come from such items as a proposal to phase out government
payments to crop producers making more than $500,000. Additional revenues are
posited from a tightening of tax-code enforcement.
"Having inherited a trillion-dollar deficit that will take a long time for us to
close, we need to focus on what we need to move the economy forward, not on
what’s nice to have," Mr. Obama said. The budget plan projects the deficit
falling to $1.17 trillion in 2010 and down to Mr. Obama’s goal of $533 billion
in 2013, then increasing again to $712 billion by 2019. Mr. Obama takes credit
for $2 trillion in deficit reduction over 10 years, three quarters of which
comes from lower expenses in Iraq and Afghanistan and most of the rest from tax
increases on the wealthy and revenues from a market-based cap on greenhouse gas
The forecasts are also founded on optimistic assumptions that the recession will
end by next year and quickly produce stronger growth than was seen in the last
decade. After the economy shrinks this year, the Obama team assumes that the
gross domestic product adjusted for inflation will increase by 3.2 percent next
year and then 4 percent or more the following three years, a rate nearly twice
the average of the Bush years.
The budget projects slightly lower spending on the Iraq and Afghanistan wars to
$130 billion in the 2010 fiscal year, then a much larger drop beginning in
fiscal 2011, when Mr. Obama wants to have combat forces out of Iraq. The basic
military budget in 2010 would be $534 billion in 2010.
Mr. Obama promised to include the full costs of the wars in all his budgets,
saying that because of “dishonest accounting” past budgets have “not told the
whole truth about how precious tax dollars are spent. Large sums have been left
off the books, including the true cost of fighting in Iraq and Afghanistan.”
The deficit, which at 12.3 percent of gross domestic product is expected to
touch its highest level since 1945, could grow this year if the economy worsens
significantly and a new infusion of capital into distressed banks is ordered;
the administration has estimated that this might call for adding $250 billion to
the cost of the bailout already approved by Congress.
"No part of my budget will be free from scrutiny or untouched by reform," Mr.
Obama said, in a nod to critics who have suggested that the economic rescue
package includes runaway waste.
"I don’t think that we can continue on our current course," he added.
Republicans quickly signaled deep skepticism about President Obama’s approach.
Representative Eric Cantor of Virginia, the House Republican whip, said
Democrats should not “spend imaginary money” or increase taxes at a difficult
“It is not just misguided but dangerous to raise taxes on small businesses and
families that can’t afford to pay them,” Mr. Cantor said. “In fact, a majority
of those penalized by the proposed tax increase in this budget are small
The new proposal for the coming fiscal year and beyond includes many ambitious
and costly programs that would have to be approved by Congress, including some
that Republicans and fiscal hawks are likely to oppose.
The tax proposal to help pay for health care, coming after recent years in which
wealth has become more concentrated at the top of the income scale, introduces a
politically volatile edge to the Congressional debate over Mr. Obama’s domestic
The president also proposed, in the 10-year budget outline he released Thursday,
to use revenues from the centerpiece of his environmental policy — a plan under
which companies must buy permits to exceed pollution emission caps — to pay for
an extension of a two-year tax credit that benefits low-wage and middle-income
The combined effect of the two revenue-raising proposals, on top of Mr. Obama’s
existing plan to roll back the Bush-era income tax reductions on households with
income exceeding $250,000 a year, would be a pronounced move to redistribute
wealth by reimposing a larger share of the tax burden on corporations and the
most affluent taxpayers.
Universal health care is worth that price, Mr. Obama said.
"We must make it a priority to give every single American quality, affordable
health care," he said. "With this budget we are making a historic commit to
comprehensive health-care reform."
The officials said the increase in revenues, estimated at $318 billion over 10
years, would account for about half of a $634 billion “reserve fund” that Mr.
Obama will set aside in his budget to address changes in the health care system.
The other half would come from proposed cost savings in Medicare, Medicaid and
other health programs.
In a document summarizing its proposals, the White House said it would finance
coverage for the uninsured in part by “rebalancing the tax code so that the
wealthiest pay more.”
To narrow the deficits, the president proposed $636.7 billion in tax increases
on the wealthy over the next 10 years, largely by reversing tax cuts passed by
President George W. Bush on taxpayers who make $200,000 or more, or $250,000 for
married couples. The top income tax bracket would return to 39.6 percent from 36
percent and capital gains and dividends for those over the income limits would
be taxed at 20 percent.
The White House also proposed tax provisions that would raise $353.5 billion
over 10 years by repealing credits and reductions for oil and gas companies,
toughening tax collections and other changes in tax law.
On the other side of the ledger, Mr. Obama would cut taxes for lower- and
middle-class Americans by $770.1 billion over 10 years and for businesses by
Among the most challenging areas for reducing spending are in the Pentagon’s
accounts, which have been running at record levels as the wars continue, the
military expands, and the costs of building new weapons escalates.
While the budget outline requests a small increase in basic military spending,
the Obama administration has made it clear that it intends to shift some of the
money from huge cold war-style weapons systems to smaller programs focused on
fighting insurgents in Iraq and Afghanistan and new threats to the nation’s
Internal debate over which programs to cut is still so intense that Defense
Secretary Robert M. Gates has taken the unusual step of requiring even the
members of the Joint Chiefs of Staff to sign agreements not to leak the details.
But some clues have emerged, and military consultants say it seems clear that
expensive missile defense systems and parts of the Army’s vast modernization
effort will be cut back. Some also say that plans for a new Navy destroyer are
likely to be scrapped.
In the short term, the White House said it would ask Congress in coming weeks
for another $75.5 billion for the wars on top of the $65.9 billion already
approved to get through the rest of the current fiscal year. It builds $130
billion in expenses for the wars into the 2010 fiscal plan but keeps it separate
from the base Pentagon budget.
Beyond the assumption that cost of the wars fall over the next decade, the
budget blueprint outlines few cuts in big-ticket spending. The most significant
involve paring agricultural subsidies for wealthier farmers and eliminating
intermediary costs for student loan programs. The blueprint also projects $316
billion in savings over 10 years from increasing efficiency and competitive
bidding in Medicare and Medicaid programs.
Few individual departments, though, will see their budgets actually go down in
2010. Just 3 of the 15 cabinet departments will be cut from 2009 to 2010 —
Energy, Health and Human Services and Justice. But energy and health are also
getting huge infusions of money from the $787 billion economic recovery
legislation just signed into law.
The State Department gets the biggest increase, rising from $36.7 billion this
year to $51.7 billion next year, although Mr. Obama will not be able to keep his
promise to double foreign aid.
The Obama budget promises a comprehensive effort to address global warming,
slash oil imports and create a new “green” economy that produces millions of new
jobs. The White House estimates that the effort, built around a cap-and-trade
program to limit greenhouse gas emissions, will produce $150 billion over 10
years beginning in 2012 to finance renewable energy projects and potentially
hundreds of billions of dollars more that will be returned to families,
communities and businesses that suffer hardship as the result of higher energy
However, Congress is in the early stages of debating global warming legislation
program, and any revenue from it is still largely speculative.
The Department of Energywill have much more to spend, thanks in part to money
from the stimulus package for research, weatherization programs and
modernization of the electric grid this year and beyond. Also included in the
current year are several billion dollars in aid for American automakers to
design and build high-mileage cars. The Department of Interior budget grows
slowly, with new money for park maintenance, endangered species protection and
renewable energy projects.
At the Environmental Protection Agency, the budget projects a 34 percent
spending increase for 2010, with much of the money devoted to clean water
projects, a Great Lakes restoration program and across-the-board increases for
regulation, research and enforcement.
Because utilities and other businesses would presumably pass on the costs of
carbon payments to customers, Mr. Obama will propose to use most of the revenue
from the greenhouse gas emission permits to finance an extension of the new
“Making Work Pay” tax credit beyond the two years covered in the economic
That tax relief, the administration will argue, will offset households’ higher
costs for utilities and other products and services from businesses’ passing on
their permit expenses.
That tax credit will annually provide $400 to low-wage and middle-income workers
or $800 to couples; Mr. Obama would like to increase those figures to $500 and
$1,000. The credit phases out for those with incomes above $75,000 a year and
for couples with incomes of more than $150,000; no benefit would go to
individuals with more than $100,000 income and couples with $200,000.
The tax credit will begin showing up in the form of lower withholding for
eligible workers beginning April 1.
The remainder of the projected revenue from the permits will finance Mr. Obama’s
campaign promise to provide $15 billion a year over 10 years to subsidize
research and development of alternative energy sources, officials said. The
stimulus package included a multibillion-dollar down payment to develop a
national electricity grid to harness and distribute energy from such sources,
including wind farms.
Behind the numbers in Mr. Obama’s first budget is one of the most far-reaching
domestic agendas in years, and at a time when the president and Congress are
already grappling with an economic crisis worse than any in decades. The
environmental permits would not take effect until 2012, at which point the
administration expects the economy to have recovered. Similarly, some of the tax
increases would not take effect until 2011.
Peter Baker, John M. Broder and Brian Knowlton contributed reporting from
Washington, and Christopher Drew from New York.
Obama Plans Major Shifts
in Spending, NYT, 27.2.2009,
Obama Seeks Higher Taxes on Rich to Pay for Plan
February 26, 2009
Filed at 2:16 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- President Barack Obama is asking Congress to raise taxes
on the wealthy and cut Medicare costs to provide health care for the uninsured
while making the just-enacted $400 tax cut for most workers permanent.
In a budget blueprint easily exceeding $3 trillion for 2010, Obama proposes
setting aside $634 billion over the next decade to expand government subsidized
health coverage -- a little more than half the money needed to ensure that every
American gets medical care.
Obama is also expected to ask Congress for an additional $75 billion to cover
the costs of wars in Iraq and Afghanistan through September.
The disclosures came from three administration officials, who spoke on condition
of anonymity because the budget won't be made public until Thursday.
All told, the deficit for the ongoing 2009 budget year would reach $1.75
trillion, up from a $1.5 trillion estimate revealed just days ago by the White
House. The increase seems to reflect concerns that more money may be needed to
rescue banks and other companies.
Obama's budget proposal would effectively raise income taxes and curb tax
deductions on couples making more than $250,000 a year, beginning in 2011. By
not extending former President George W. Bush's tax cuts for such wealthier
filers, Obama would allow the marginal rate on household incomes above $250,000
to rise from 35 percent to 39.6 percent, said an administration official.
Individuals making more than $200,000 would pay the higher rate.
The plan also contains a contentious proposal to raise hundreds of billions of
dollars by auctioning off permits to exceed carbon emissions caps Obama wants to
impose on users of fossil fuels to address global warming. Some of the revenues
from the pollution permits would be used to extend the ''Making Work Pay'' tax
credit of $400 for individuals and $800 for couples beyond 2010 as provided in
the just-passed economic stimulus bill.
About half of what officials characterized as a $634 billion ''down payment''
toward health care coverage for every American would come from cuts in Medicare.
That is sure to incite battles with doctors, hospitals, health insurance
companies and drug manufacturers.
Some of the Medicare savings would come from scaling back payments to private
insurance plans that serve older Americans, which many analysts believe to be
inflated. Other proposals include charging upper-income beneficiaries a higher
premium for Medicare's prescription drug coverage.
To raise the other half, Obama wants to reduce the rate by which wealthier
people can cut their taxes through deductions for mortgage interest, charitable
contributions, local taxes and other expenses to 28 cents on the dollar, rather
than the 35 cents they can claim now. Even more money would be raised if the top
rate reverts to 39.6 percent as Obama wants.
That proposal is deeply controversial, particularly with colleges and nonprofit
institutions that depend on wealthy donors and with lawmakers representing
high-tax states such as New York and New Jersey.
And Obama's promise to phase out direct payments to farming operations with
revenues above $500,000 a year is sure to cause concerns among rural Democrats.
Even after all those difficult choices -- cutting about $2 trillion from the
deficit over 10 years, administration officials say -- Obama's budget still
would leave the federal government heavily in the red, with deficits remaining
above $500 billion over the second half of the decade.
The budget deficit for 2010 would hit $1.2 trillion and gradually ease to $533
billion by 2013, administration officials say. That's about 3 percent of the
size of the economy, a level the administration says it can maintain through the
second half of the decade.
''I think they make pretty good progress the first five (years) given where we
are,'' said Senate Budget Committee Chairman Kent Conrad, D-N.D. ''Then they
kind of are stuck at 3 percent of GDP.''
Sen. Max Baucus, D-Mont., chairman of the Finance Committee, called Obama's
proposal to tax the wealthy to finance health care reform a starting point. But
he wants to also examine taxing as people's income some of health insurance
benefits provided by employers -- an idea rejected by Obama in last year's
Obama's $634 billion head start on health care could easily double as lawmakers
flesh out details in coming months on how to provide medical coverage to all of
the 48 million Americans now uninsured while also trying to slow increases in
health care costs. Those costs now total $2.4 trillion a year and keep rising
even as the economy is shrinking.
Independent experts say providing coverage for all could easily cost more than
$1 trillion over 10 years, a figure the Obama administration does not dispute.
But the administration also is demanding that any further costs be offset with
tax hikes or further spending cuts under stricter pay-as-you-go budget rules.
Budget documents provided to The Associated Press show that Obama will not lay
out a detailed blueprint for a health care overhaul, but a set of broad policy
principles and some specific ideas for how to raise a big chunk of the money.
The principles include guaranteeing people a choice of insurance plans and
doctors and continuing employer-based coverage. Americans also should be able to
take their health care benefits with them when they change jobs, an
administration official said.
The budget plan also recommends a long-term fix to update the alternative
minimum tax for inflation. That could add $150 billion to the deficit by 2013,
according to congressional estimates. The AMT was originally designed to make
sure the wealthy paid at least some taxes, but it threatens to ensnare some 24
million middle- to upper-income taxpayers next year.
The budget would freeze the estate tax at current levels rather than allowing it
to permanently expire next year. That would exempt individuals' estates of $3.5
million or less from the 45 percent estate tax rate, with a $7 million exemption
Obama is also expected to seek about $534 billion for the Defense Department,
administration officials said, an increase over this year's base figure of $513
Neither figure includes the full cost of fighting the wars in Iraq and
Associated Press writer Anne Gearan contributed to this report.
Obama Seeks Higher Taxes
on Rich to Pay for Plan, NYT, 26.2.2009,
Obama's gamble: Big plans have big risks
24 February 2009
By Richard Wolf
WASHINGTON — Until Tuesday, President Obama was already dealing with the
worst economy since the Depression: failing industries, teetering banks, a stock
market sliced in half and millions of people losing their homes.
Now he's added overhauling the nation's health care system to his to-do list
— a challenge that has vexed presidents from Harry Truman to Bill Clinton. Not
to mention weaning America off Middle East oil, fixing its schools, bolstering
Social Security and declaring war on deficits and debt.
"The only way this century will be another American century is if we confront at
last the price of our dependence on oil and the high cost of health care, the
schools that aren't preparing our children and the mountain of debt they stand
to inherit," Obama said in his first address to Congress Tuesday. "That is our
It's a high-risk strategy, doing everything at once. Obama is doing it for
two reasons: The economy is in free fall, and the voters gave him a sizeable
mandate in November.
"We've never seen an administration get out of the starting blocks as rapidly or
try to clear as many hurdles in the first 50 yards," says Robert Reischauer,
president of the Urban Institute and former director of the Congressional Budget
Office. "But moving at a more moderate pace I don't think decreases the risk
appreciably, because then you're going to be driven by events, reacting to
crises. He is trying to be proactive."
That won praise even from Republicans on Tuesday. "The president deserves much
credit for his willingness to tackle health care reform, the budget deficit,
Social Security and the recession all at once," said Rep. Dave Camp, R-Mich.,
while warning against tax increases.
The challenge for Obama is all the greater because he's presiding over an
incomplete government. Nearly all departments and agencies are without key
political appointees who will design and implement policy, because they've yet
to be nominated or confirmed.
Three Cabinet-level departments still lack leaders, including the Department of
Health and Human Services following the withdrawal of former Senate Democratic
leader Tom Daschle over personal tax problems. The White House has slowed the
nomination process and stepped up its vetting of candidates to avoid additional
public relations calamities.
On the other hand, Obama is helped by his willingness to name many veterans of
the Clinton administration to his top echelon of advisers. And if he needs
advice on the pitfalls of overhauling health care, Hillary Rodham Clinton is
down the street at the State Department.
Her advice could come in handy on what not to do. Her health care effort failed
in 1994 due largely to the Clinton administration's decision to craft its own
plan, rather than work with Congress. It took most of 1993 to do that, delaying
the legislative process well beyond President Clinton's honeymoon period.
The last three presidents who represented a party that reclaimed the White House
used their first budgets to make major changes, something Obama hopes to do in
the budget outline he unveils Thursday. Republican Ronald Reagan cut spending
and taxes. Democrat Bill Clinton pushed through a major deficit-reduction deal
that helped lead to budget surpluses. Republican George W. Bush focused almost
single-mindedly on his massive tax cuts.
"History suggests that particularly when the White House changes parties … the
president has a window to make bigger changes than he may be able to get later
in his term," says Robert Greenstein, founder of the liberal Center on Budget
and Policy Priorities.
With the country in economic crisis, Obama is betting that Americans are more
prepared to fix the nation's problems than they have been: 46 million people
uninsured and soaring costs for others, dependency on fossil fuels from foreign
lands, a debt approaching $11 trillion due to unsustainable government benefits.
The risk is obvious: failing.
"Clinton paid a price for not succeeding on health care," says Steve Elmendorf,
who was chief of staff to former House Democratic leader Richard Gephardt. "So
if you go out and announce, 'I'm going to do X on health care' and you don't
succeed, you pay a price."
Obama's gamble: Big
plans have big risks, UT, 24.2.2009,
Remarks of President Obama to Congress
24 February 2009
Madame Speaker, Mr. Vice President, members of Congress, and the first lady
of the United States:
I've come here tonight not only to address the distinguished men and women in
this great chamber, but to speak frankly and directly to the men and women who
sent us here.
I know that for many Americans watching right now, the state of our economy is a
concern that rises above all others. And rightly so. If you haven't been
personally affected by this recession, you probably know someone who has — a
friend; a neighbor; a member of your family. You don't need to hear another list
of statistics to know that our economy is in crisis, because you live it every
day. It's the worry you wake up with and the source of sleepless nights. It's
the job you thought you'd retire from but now have lost; the business you built
your dreams upon that's now hanging by a thread; the college acceptance letter
your child had to put back in the envelope. The impact of this recession is
real, and it is everywhere.
But while our economy may be weakened and our confidence shaken; though we are
living through difficult and uncertain times, tonight I want every American to
We will rebuild, we will recover, and the United States of America will emerge
stronger than before.
The weight of this crisis will not determine the destiny of this nation. The
answers to our problems don't lie beyond our reach. They exist in our
laboratories and universities; in our fields and our factories; in the
imaginations of our entrepreneurs and the pride of the hardest-working people on
Earth. Those qualities that have made America the greatest force of progress and
prosperity in human history we still possess in ample measure. What is required
now is for this country to pull together, confront boldly the challenges we
face, and take responsibility for our future once more.
Now, if we're honest with ourselves, we'll admit that for too long, we have not
always met these responsibilities — as a government or as a people. I say this
not to lay blame or look backwards, but because it is only by understanding how
we arrived at this moment that we'll be able to lift ourselves out of this
The fact is, our economy did not fall into decline overnight. Nor did all of our
problems begin when the housing market collapsed or the stock market sank. We
have known for decades that our survival depends on finding new sources of
energy. Yet we import more oil today than ever before. The cost of health care
eats up more and more of our savings each year, yet we keep delaying reform. Our
children will compete for jobs in a global economy that too many of our schools
do not prepare them for. And though all these challenges went unsolved, we still
managed to spend more money and pile up more debt, both as individuals and
through our government, than ever before.
In other words, we have lived through an era where too often, short-term gains
were prized over long-term prosperity; where we failed to look beyond the next
payment, the next quarter, or the next election. A surplus became an excuse to
transfer wealth to the wealthy instead of an opportunity to invest in our
future. Regulations were gutted for the sake of a quick profit at the expense of
a healthy market. People bought homes they knew they couldn't afford from banks
and lenders who pushed those bad loans anyway. And all the while, critical
debates and difficult decisions were put off for some other time on some other
Well that day of reckoning has arrived, and the time to take charge of our
future is here.
LIVE BLOG: Obama addresses Congress, nation
Now is the time to act boldly and wisely — to not only revive this economy, but
to build a new foundation for lasting prosperity. Now is the time to jumpstart
job creation, re-start lending, and invest in areas like energy, health care,
and education that will grow our economy, even as we make hard choices to bring
our deficit down. That is what my economic agenda is designed to do, and that's
what I'd like to talk to you about tonight.
It's an agenda that begins with jobs.
As soon as I took office, I asked this Congress to send me a recovery plan by
President's Day that would put people back to work and put money in their
pockets. Not because I believe in bigger government — I don't. Not because I'm
not mindful of the massive debt we've inherited — I am. I called for action
because the failure to do so would have cost more jobs and caused more
hardships. In fact, a failure to act would have worsened our long-term deficit
by assuring weak economic growth for years. That's why I pushed for quick
action. And tonight, I am grateful that this Congress delivered, and pleased to
say that the American Recovery and Reinvestment Act is now law.
Over the next two years, this plan will save or create 3.5 million jobs. More
than 90% of these jobs will be in the private sector — jobs rebuilding our roads
and bridges; constructing wind turbines and solar panels; laying broadband and
expanding mass transit.
Because of this plan, there are teachers who can now keep their jobs and educate
our kids. Health care professionals can continue caring for our sick. There are
57 police officers who are still on the streets of Minneapolis tonight because
this plan prevented the layoffs their department was about to make.
Because of this plan, 95% of the working households in America will receive a
tax cut — a tax cut that you will see in your paychecks beginning on April 1st.
Because of this plan, families who are struggling to pay tuition costs will
receive a $2,500 tax credit for all four years of college. And Americans who
have lost their jobs in this recession will be able to receive extended
unemployment benefits and continued health care coverage to help them weather
I know there are some in this chamber and watching at home who are skeptical of
whether this plan will work. I understand that skepticism. Here in Washington,
we've all seen how quickly good intentions can turn into broken promises and
wasteful spending. And with a plan of this scale comes enormous responsibility
to get it right.
That is why I have asked Vice President Biden to lead a tough, unprecedented
oversight effort — because nobody messes with Joe. I have told each member of my
Cabinet as well as mayors and governors across the country that they will be
held accountable by me and the American people for every dollar they spend. I
have appointed a proven and aggressive Inspector General to ferret out any and
all cases of waste and fraud. And we have created a new website called
recovery.gov so that every American can find out how and where their money is
So the recovery plan we passed is the first step in getting our economy back on
track. But it is just the first step. Because even if we manage this plan
flawlessly, there will be no real recovery unless we clean up the credit crisis
that has severely weakened our financial system.
I want to speak plainly and candidly about this issue tonight, because every
American should know that it directly affects you and your family's well-being.
You should also know that the money you've deposited in banks across the country
is safe; your insurance is secure; and you can rely on the continued operation
of our financial system. That is not the source of concern.
The concern is that if we do not re-start lending in this country, our recovery
will be choked off before it even begins.
You see, the flow of credit is the lifeblood of our economy. The ability to get
a loan is how you finance the purchase of everything from a home to a car to a
college education; how stores stock their shelves, farms buy equipment, and
businesses make payroll.
But credit has stopped flowing the way it should. Too many bad loans from the
housing crisis have made their way onto the books of too many banks. With so
much debt and so little confidence, these banks are now fearful of lending out
any more money to households, to businesses, or to each other. When there is no
lending, families can't afford to buy homes or cars. So businesses are forced to
make layoffs. Our economy suffers even more, and credit dries up even further.
That is why this administration is moving swiftly and aggressively to break this
destructive cycle, restore confidence, and re-start lending.
We will do so in several ways. First, we are creating a new lending fund that
represents the largest effort ever to help provide auto loans, college loans,
and small business loans to the consumers and entrepreneurs who keep this
Second, we have launched a housing plan that will help responsible families
facing the threat of foreclosure lower their monthly payments and re-finance
their mortgages. It's a plan that won't help speculators or that neighbor down
the street who bought a house he could never hope to afford, but it will help
millions of Americans who are struggling with declining home values — Americans
who will now be able to take advantage of the lower interest rates that this
plan has already helped bring about. In fact, the average family who re-finances
today can save nearly $2000 per year on their mortgage.
Third, we will act with the full force of the federal government to ensure that
the major banks that Americans depend on have enough confidence and enough money
to lend even in more difficult times. And when we learn that a major bank has
serious problems, we will hold accountable those responsible, force the
necessary adjustments, provide the support to clean up their balance sheets, and
assure the continuity of a strong, viable institution that can serve our people
and our economy.
I understand that on any given day, Wall Street may be more comforted by an
approach that gives banks bailouts with no strings attached, and that holds
nobody accountable for their reckless decisions. But such an approach won't
solve the problem. And our goal is to quicken the day when we re-start lending
to the American people and American business and end this crisis once and for
I intend to hold these banks fully accountable for the assistance they receive,
and this time, they will have to clearly demonstrate how taxpayer dollars result
in more lending for the American taxpayer. This time, CEOs won't be able to use
taxpayer money to pad their paychecks or buy fancy drapes or disappear on a
private jet. Those days are over.
Still, this plan will require significant resources from the federal government
— and yes, probably more than we've already set aside. But while the cost of
action will be great, I can assure you that the cost of inaction will be far
greater, for it could result in an economy that sputters along for not months or
years, but perhaps a decade. That would be worse for our deficit, worse for
business, worse for you, and worse for the next generation. And I refuse to let
I understand that when the last administration asked this Congress to provide
assistance for struggling banks, Democrats and Republicans alike were infuriated
by the mismanagement and results that followed. So were the American taxpayers.
So was I.
So I know how unpopular it is to be seen as helping banks right now, especially
when everyone is suffering in part from their bad decisions. I promise you — I
But I also know that in a time of crisis, we cannot afford to govern out of
anger, or yield to the politics of the moment. My job — our job — is to solve
the problem. Our job is to govern with a sense of responsibility. I will not
spend a single penny for the purpose of rewarding a single Wall Street
executive, but I will do whatever it takes to help the small business that can't
pay its workers or the family that has saved and still can't get a mortgage.
That's what this is about. It's not about helping banks — it's about helping
people. Because when credit is available again, that young family can finally
buy a new home. And then some company will hire workers to build it. And then
those workers will have money to spend, and if they can get a loan too, maybe
they'll finally buy that car, or open their own business. Investors will return
to the market, and American families will see their retirement secured once
more. Slowly, but surely, confidence will return, and our economy will recover.
So I ask this Congress to join me in doing whatever proves necessary. Because we
cannot consign our nation to an open-ended recession. And to ensure that a
crisis of this magnitude never happens again, I ask Congress to move quickly on
legislation that will finally reform our outdated regulatory system. It is time
to put in place tough, new common-sense rules of the road so that our financial
market rewards drive and innovation, and punishes short-cuts and abuse.
The recovery plan and the financial stability plan are the immediate steps we're
taking to revive our economy in the short-term. But the only way to fully
restore America's economic strength is to make the long-term investments that
will lead to new jobs, new industries, and a renewed ability to compete with the
rest of the world. The only way this century will be another American century is
if we confront at last the price of our dependence on oil and the high cost of
health care; the schools that aren't preparing our children and the mountain of
debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come
to view these documents as simply numbers on a page or laundry lists of
programs. I see this document differently. I see it as a vision for America — as
a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It
reflects the stark reality of what we've inherited — a trillion dollar deficit,
a financial crisis, and a costly recession.
Given these realities, everyone in this chamber — Democrats and Republicans —
will have to sacrifice some worthy priorities for which there are no dollars.
And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I
reject the view that says our problems will simply take care of themselves; that
says government has no role in laying the foundation for our common prosperity.
For history tells a different story. History reminds us that at every moment of
economic upheaval and transformation, this nation has responded with bold action
and big ideas. In the midst of civil war, we laid railroad tracks from one coast
to another that spurred commerce and industry. From the turmoil of the
Industrial Revolution came a system of public high schools that prepared our
citizens for a new age. In the wake of war and depression, the GI Bill sent a
generation to college and created the largest middle-class in history. And a
twilight struggle for freedom led to a nation of highways, an American on the
moon, and an explosion of technology that still shapes our world.
In each case, government didn't supplant private enterprise; it catalyzed
private enterprise. It created the conditions for thousands of entrepreneurs and
new businesses to adapt and to thrive.
We are a nation that has seen promise amid peril, and claimed opportunity from
ordeal. Now we must be that nation again. That is why, even as it cuts back on
the programs we don't need, the budget I submit will invest in the three areas
that are absolutely critical to our economic future: energy, health care, and
It begins with energy.
We know the country that harnesses the power of clean, renewable energy will
lead the 21st century. And yet, it is China that has launched the largest effort
in history to make their economy energy efficient. We invented solar technology,
but we've fallen behind countries like Germany and Japan in producing it. New
plug-in hybrids roll off our assembly lines, but they will run on batteries made
Well I do not accept a future where the jobs and industries of tomorrow take
root beyond our borders — and I know you don't either. It is time for America to
Thanks to our recovery plan, we will double this nation's supply of renewable
energy in the next three years. We have also made the largest investment in
basic research funding in American history — an investment that will spur not
only new discoveries in energy, but breakthroughs in medicine, science, and
We will soon lay down thousands of miles of power lines that can carry new
energy to cities and towns across this country. And we will put Americans to
work making our homes and buildings more efficient so that we can save billions
of dollars on our energy bills.
But to truly transform our economy, protect our security, and save our planet
from the ravages of climate change, we need to ultimately make clean, renewable
energy the profitable kind of energy. So I ask this Congress to send me
legislation that places a market-based cap on carbon pollution and drives the
production of more renewable energy in America. And to support that innovation,
we will invest fifteen billion dollars a year to develop technologies like wind
power and solar power; advanced biofuels, clean coal, and more fuel-efficient
cars and trucks built right here in America.
As for our auto industry, everyone recognizes that years of bad decision-making
and a global recession have pushed our automakers to the brink. We should not,
and will not, protect them from their own bad practices. But we are committed to
the goal of a re-tooled, re-imagined auto industry that can compete and win.
Millions of jobs depend on it. Scores of communities depend on it. And I believe
the nation that invented the automobile cannot walk away from it.
None of this will come without cost, nor will it be easy. But this is America.
We don't do what's easy. We do what is necessary to move this country forward.
For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By
the end of the year, it could cause 1.5 million Americans to lose their homes.
In the last eight years, premiums have grown four times faster than wages. And
in each of these years, one million more Americans have lost their health
insurance. It is one of the major reasons why small businesses close their doors
and corporations ship jobs overseas. And it's one of the largest and
fastest-growing parts of our budget.
Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the
last thirty days than we have in the last decade. When it was days old, this
Congress passed a law to provide and protect health insurance for eleven million
American children whose parents work full-time. Our recovery plan will invest in
electronic health records and new technology that will reduce errors, bring down
costs, ensure privacy, and save lives. It will launch a new effort to conquer a
disease that has touched the life of nearly every American by seeking a cure for
cancer in our time. And it makes the largest investment ever in preventive care,
because that is one of the best ways to keep our people healthy and our costs
This budget builds on these reforms. It includes an historic commitment to
comprehensive health care reform — a down payment on the principle that we must
have quality, affordable health care for every American. It's a commitment
that's paid for in part by efficiencies in our system that are long overdue. And
it's a step we must take if we hope to bring down our deficit in the years to
Now, there will be many different opinions and ideas about how to achieve
reform, and that is why I'm bringing together businesses and workers, doctors
and health care providers, Democrats and Republicans to begin work on this issue
I suffer no illusions that this will be an easy process. It will be hard. But I
also know that nearly a century after Teddy Roosevelt first called for reform,
the cost of our health care has weighed down our economy and the conscience of
our nation long enough. So let there be no doubt: health care reform cannot
wait, it must not wait, and it will not wait another year.
The third challenge we must address is the urgent need to expand the promise of
education in America.
In a global economy where the most valuable skill you can sell is your
knowledge, a good education is no longer just a pathway to opportunity — it is a
Right now, three-quarters of the fastest-growing occupations require more than a
high school diploma. And yet, just over half of our citizens have that level of
education. We have one of the highest high school dropout rates of any
industrialized nation. And half of the students who begin college never finish.
This is a prescription for economic decline, because we know the countries that
out-teach us today will out-compete us tomorrow. That is why it will be the goal
of this administration to ensure that every child has access to a complete and
competitive education — from the day they are born to the day they begin a
Already, we have made an historic investment in education through the economic
recovery plan. We have dramatically expanded early childhood education and will
continue to improve its quality, because we know that the most formative
learning comes in those first years of life. We have made college affordable for
nearly seven million more students. And we have provided the resources necessary
to prevent painful cuts and teacher layoffs that would set back our children's
But we know that our schools don't just need more resources. They need more
reform. That is why this budget creates new incentives for teacher performance;
pathways for advancement, and rewards for success. We'll invest in innovative
programs that are already helping schools meet high standards and close
achievement gaps. And we will expand our commitment to charter schools.
It is our responsibility as lawmakers and educators to make this system work.
But it is the responsibility of every citizen to participate in it. And so
tonight, I ask every American to commit to at least one year or more of higher
education or career training. This can be community college or a four-year
school; vocational training or an apprenticeship. But whatever the training may
be, every American will need to get more than a high school diploma. And
dropping out of high school is no longer an option. It's not just quitting on
yourself, it's quitting on your country — and this country needs and values the
talents of every American. That is why we will provide the support necessary for
you to complete college and meet a new goal: by 2020, America will once again
have the highest proportion of college graduates in the world.
I know that the price of tuition is higher than ever, which is why if you are
willing to volunteer in your neighborhood or give back to your community or
serve your country, we will make sure that you can afford a higher education.
And to encourage a renewed spirit of national service for this and future
generations, I ask this Congress to send me the bipartisan legislation that
bears the name of Senator Orrin Hatch as well as an American who has never
stopped asking what he can do for his country — Senator Edward Kennedy.
These education policies will open the doors of opportunity for our children.
But it is up to us to ensure they walk through them. In the end, there is no
program or policy that can substitute for a mother or father who will attend
those parent/teacher conferences, or help with homework after dinner, or turn
off the TV, put away the video games, and read to their child. I speak to you
not just as a President, but as a father when I say that responsibility for our
children's education must begin at home.
There is, of course, another responsibility we have to our children. And that is
the responsibility to ensure that we do not pass on to them a debt they cannot
pay. With the deficit we inherited, the cost of the crisis we face, and the
long-term challenges we must meet, it has never been more important to ensure
that as our economy recovers, we do what it takes to bring this deficit down.
I'm proud that we passed the recovery plan free of earmarks, and I want to pass
a budget next year that ensures that each dollar we spend reflects only our most
important national priorities.
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by
the end of my first term in office. My administration has also begun to go line
by line through the federal budget in order to eliminate wasteful and
ineffective programs. As you can imagine, this is a process that will take some
time. But we're starting with the biggest lines. We have already identified two
trillion dollars in savings over the next decade.
In this budget, we will end education programs that don't work and end direct
payments to large agribusinesses that don't need them. We'll eliminate the
no-bid contracts that have wasted billions in Iraq, and reform our defense
budget so that we're not paying for Cold War-era weapons systems we don't use.
We will root out the waste, fraud, and abuse in our Medicare program that
doesn't make our seniors any healthier, and we will restore a sense of fairness
and balance to our tax code by finally ending the tax breaks for corporations
that ship our jobs overseas.
In order to save our children from a future of debt, we will also end the tax
breaks for the wealthiest 2% of Americans. But let me perfectly clear, because I
know you'll hear the same old claims that rolling back these tax breaks means a
massive tax increase on the American people: if your family earns less than
$250,000 a year, you will not see your taxes increased a single dime. I repeat:
not one single dime. In fact, the recovery plan provides a tax cut — that's
right, a tax cut — for 95% of working families. And these checks are on the way.
To preserve our long-term fiscal health, we must also address the growing costs
in Medicare and Social Security. Comprehensive health care reform is the best
way to strengthen Medicare for years to come. And we must also begin a
conversation on how to do the same for Social Security, while creating tax-free
universal savings accounts for all Americans.
Finally, because we're also suffering from a deficit of trust, I am committed to
restoring a sense of honesty and accountability to our budget. That is why this
budget looks ahead ten years and accounts for spending that was left out under
the old rules — and for the first time, that includes the full cost of fighting
in Iraq and Afghanistan. For seven years, we have been a nation at war. No
longer will we hide its price.
We are now carefully reviewing our policies in both wars, and I will soon
announce a way forward in Iraq that leaves Iraq to its people and responsibly
ends this war.
And with our friends and allies, we will forge a new and comprehensive strategy
for Afghanistan and Pakistan to defeat al Qaeda and combat extremism. Because I
will not allow terrorists to plot against the American people from safe havens
half a world away.
As we meet here tonight, our men and women in uniform stand watch abroad and
more are readying to deploy. To each and every one of them, and to the families
who bear the quiet burden of their absence, Americans are united in sending one
message: we honor your service, we are inspired by your sacrifice, and you have
our unyielding support. To relieve the strain on our forces, my budget increases
the number of our soldiers and Marines. And to keep our sacred trust with those
who serve, we will raise their pay, and give our veterans the expanded health
care and benefits that they have earned.
To overcome extremism, we must also be vigilant in upholding the values our
troops defend — because there is no force in the world more powerful than the
example of America. That is why I have ordered the closing of the detention
center at Guantanamo Bay, and will seek swift and certain justice for captured
terrorists — because living our values doesn't make us weaker, it makes us safer
and it makes us stronger. And that is why I can stand here tonight and say
without exception or equivocation that the United States of America does not
In words and deeds, we are showing the world that a new era of engagement has
begun. For we know that America cannot meet the threats of this century alone,
but the world cannot meet them without America. We cannot shun the negotiating
table, nor ignore the foes or forces that could do us harm. We are instead
called to move forward with the sense of confidence and candor that serious
To seek progress toward a secure and lasting peace between Israel and her
neighbors, we have appointed an envoy to sustain our effort. To meet the
challenges of the 21st century — from terrorism to nuclear proliferation; from
pandemic disease to cyber threats to crushing poverty — we will strengthen old
alliances, forge new ones, and use all elements of our national power.
And to respond to an economic crisis that is global in scope, we are working
with the nations of the G-20 to restore confidence in our financial system,
avoid the possibility of escalating protectionism, and spur demand for American
goods in markets across the globe. For the world depends on us to have a strong
economy, just as our economy depends on the strength of the world's.
As we stand at this crossroads of history, the eyes of all people in all nations
are once again upon us — watching to see what we do with this moment; waiting
for us to lead.
Those of us gathered here tonight have been called to govern in extraordinary
times. It is a tremendous burden, but also a great privilege — one that has been
entrusted to few generations of Americans. For in our hands lies the ability to
shape our world for good or for ill.
I know that it is easy to lose sight of this truth — to become cynical and
doubtful; consumed with the petty and the trivial.
But in my life, I have also learned that hope is found in unlikely places; that
inspiration often comes not from those with the most power or celebrity, but
from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed
out of his company, took a $60 million bonus, and gave it out to all 399 people
who worked for him, plus another 72 who used to work for him. He didn't tell
anyone, but when the local newspaper found out, he simply said, "I knew some of
these people since I was 7 years old. I didn't feel right getting the money
I think about Greensburg, Kansas, a town that was completely destroyed by a
tornado, but is being rebuilt by its residents as a global example of how clean
energy can power an entire community — how it can bring jobs and businesses to a
place where piles of bricks and rubble once lay. "The tragedy was terrible,"
said one of the men who helped them rebuild. "But the folks here know that it
also provided an incredible opportunity."
And I think about Ty'Sheoma Bethea, the young girl from that school I visited in
Dillon, South Carolina — a place where the ceilings leak, the paint peels off
the walls, and they have to stop teaching six times a day because the train
barrels by their classroom. She has been told that her school is hopeless, but
the other day after class she went to the public library and typed up a letter
to the people sitting in this room. She even asked her principal for the money
to buy a stamp. The letter asks us for help, and says, "We are just students
trying to become lawyers, doctors, congressmen like yourself and one day
president, so we can make a change to not just the state of South Carolina but
also the world. We are not quitters."
We are not quitters.
These words and these stories tell us something about the spirit of the people
who sent us here. They tell us that even in the most trying times, amid the most
difficult circumstances, there is a generosity, a resilience, a decency, and a
determination that perseveres; a willingness to take responsibility for our
future and for posterity.
Their resolve must be our inspiration. Their concerns must be our cause. And we
must show them and all our people that we are equal to the task before us.
I know that we haven't agreed on every issue thus far, and there are surely
times in the future when we will part ways. But I also know that every American
who is sitting here tonight loves this country and wants it to succeed. That
must be the starting point for every debate we have in the coming months, and
where we return after those debates are done. That is the foundation on which
the American people expect us to build common ground.
And if we do — if we come together and lift this nation from the depths of this
crisis; if we put our people back to work and restart the engine of our
prosperity; if we confront without fear the challenges of our time and summon
that enduring spirit of an America that does not quit, then someday years from
now our children can tell their children that this was the time when we
performed, in the words that are carved into this very chamber, "something
worthy to be remembered."
Thank you, God Bless you, and may God Bless the United States of America.
Remarks of President
Obama to Congress, UT, 24.2.2009,
Obama Stressing Fiscal Responsibility on Budget
February 23, 2009
Filed at 8:12 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- President Barack Obama is bringing together dozens of
advisers and adversaries to discuss how to curb a burgeoning federal deficit
laden with Social Security, Medicare and Medicaid obligations.
Obama's summit at the White House on Monday is the first meeting toward a
strategy to address the long-term fiscal health of the nation. The gathering
also comes as Obama prepares ambitious plans to cut the federal deficit by half
within four years.
''It will require doing all we can to get exploding deficits under control as
our economy begins to recover,'' Obama said in his weekend Internet and radio
address. ''That work begins on Monday, when I will convene a fiscal summit of
independent experts and unions, advocacy groups and members of Congress to
discuss how we can cut the trillion-dollar deficit that we've inherited.''
Even before it began, some of its 130 invited participants cautioned against
''It can either be a nice press event. Or it can be a substantive event,'' said
Republican Sen. Judd Gregg, whom Obama appointed as commerce secretary before
the New Hampshire lawmaker balked. ''History tells us it will be the first.
We've had these meetings before. There's always a lot of people willing to point
out the problem.''
Yet, he said, there is seldom anyone willing to make the difficult decisions to
solve those problems.
As the nation's economy continues its downward spiral, Obama's advisers are
keeping their focus on the broader fiscal troubles that have sent millions to
unemployment rolls. Taken in context, the summit is but one part of the White
House's larger approach to the coming weeks focused on Obama's priorities for a
first term, including a State of the Union-style address on Tuesday.
That speech is not likely to include plans to deal with long-crumbling
The Senate's top Republican, Mitch McConnell of Kentucky, said a solution
already exists in legislation written by Gregg and his Democratic counterpart on
the Budget Committee, Sen. Kent Conrad of North Dakota.
Their measure would create a bipartisan commission to deal with Social Security,
Medicare and Medicaid. The entitlement programs face eventual bankruptcy,
although experts differ on how urgently each is threatened.
Many House Democrats, however, remain opposed to a commission, including Speaker
Nancy Pelosi. Obama has indicated he's open to the idea -- and many others -- as
a way to move toward a viable solution.
McConnell said any movement would be a step toward getting a handle on the
''So I hope what the meeting at the White House is about tomorrow is about
sobering up here and beginning to rethink the kind of debt that we're laying on
future generations,'' McConnell told CNN's ''State of the Union'' program on
That comes hand-in-hand with the president's plans to deal with the deficit.
Obama plans to cut the federal deficit in half by the end of his first term,
mostly by scaling back Iraq war spending, raising taxes on the wealthiest and
streamlining government. The goal is to halve the federal deficit to $533
billion by the time his first term ends in 2013.
He inherited a deficit of about $1.3 trillion from his predecessor, President
George W. Bush.
Meanwhile, Peter Orszag, director of the federal Office of Management and
Budget, said Monday he believes the new fiscal plan will lure some Republican
support -- in contrast to the stimulus bill that got only three GOP votes in
He said he thinks some Republicans will back the plan because of proposals to
overhaul the expensive U.S. health care system.
''Health care clearly is the key to our fiscal future,'' he said on CNN, ''so we
need to get health care costs u nder control and we want to do that this year.''
Obama Stressing Fiscal Responsibility on
Budget, NYT, 23.2.2009,http://www.nytimes.com/aponline/2009/02/23/washington/AP-Obama-Economy.html
Mr. Obama’s Foreclosure Plan
February 19, 2009
The New York Times
The anti-foreclosure plan announced by President Obama on Wednesday is a
decisive break from the Bush administration’s disastrous
protect-the-banks-but-not-the-homeowners policy. The president has promised that
it will help as many as nine million American families refinance their mortgages
or avoid foreclosure. That’s a good start, but given the dire state of the
economy, we fear it still may not be enough.
For two years, while house prices cratered and mortgage defaults soared, the
Bush administration stubbornly refused to compel the mortgage industry to clean
up the bad loans that had been made so recklessly; it even refused to give banks
any incentives to do so. Some two million families lost their homes to
The Obama plan will provide up to $75 billion, mostly from the bank bailout
fund, to help lenders and borrowers come to new terms. That could allow up to
four million at-risk homeowners stay in their homes.
Most of the money will go for incentive payments to encourage lenders to modify
troubled loans and for subsidizing lower interest rates to reduce borrowers’
monthly payments. (After five years, the interest rate will begin to gradually
adjust upward again.)
Equally important, Mr. Obama is coupling the incentives to bankers with a big
stick — support for a change in the law that would allow bankrupt homeowners who
cannot come to new affordable terms with a lender to have their mortgages
modified under court protection. Mr. Bush stubbornly opposed that idea, too.
The plan will also provide help for homeowners who may be struggling, but not
delinquent, making it easier for them to refinance their loans to lower rates.
Loans that are owned or backed by Fannie Mae and Freddie Mac — about half of all
mortgages — will be eligible for refinancing even for homeowners who have less
than 20 percent equity in their homes.
That will allow up to an estimated five million homeowners to trade their
current mortgages for loans with lower rates, making repayments easier and
possibly heading off future defaults.
The truly worrisome part of the Obama plan is that it does not forcefully
address the fact that some 13.6 million homeowners — and counting — are stuck in
mortgages that have balances that are higher than the value of their properties.
Reducing the interest rates on the loans may make their mortgages affordable —
for now. But if a family has a setback, like unemployment or illness, even the
new lower payment may prove too onerous. Without an equity cushion to fall back
on, default and foreclosure may be impossible to avoid. Similarly, if the family
has a big expense — for a new roof or new plumbing — it would not make sense to
plow more money into a home in which they have no equity. In those
circumstances, declaring bankruptcy may be a homeowner’s only option.
Mr. Obama must fight for bankruptcy reform legislation that is expansive enough
to accommodate borrowers who cannot make payments for reasons beyond their
control. It will be a tough fight. The mortgage industry — which has carefully
cultivated friends on both sides of the political aisle — will press for a bill
that makes it as difficult as possible for borrowers to seek bankruptcy
protection. Mr. Obama must not back down.
Mr. Obama’s Foreclosure
Plan, NYT, 19.2.2009,
Recovery Measure Becomes Law and Partisan Fight Endures
February 18, 2009
The New York Times
By SHERYL GAY STOLBERG and ADAM NAGOURNEY
DENVER — President Obama signed the $787 billion stimulus bill into law on
Tuesday as leaders of both parties moved to position themselves for a political
battle over who was responsible for the economy’s problems and whether the
legislation was the solution.
In his second consecutive week of taking to the road for campaign-style
appearances to build support for his agenda, Mr. Obama signed the measure here
in the city where he was nominated, and delivered a speech that signaled in part
the White House effort to gain political advantage. He listed initiatives in the
bill, focusing on education and energy conservation, and offered examples of
spending that would help specific states.
“Now,” he said, “I don’t want to pretend that today marks the end of our
economic problems. Nor does it constitute all of what we’re going to have to do
to turn our economy around.
“But today does mark the beginning of the end: the beginning of what we need to
do to create jobs for Americans scrambling in the wake of layoffs, the beginning
of what we need to do to provide relief for families worried they won’t be able
to pay next month’s bills, the beginning of the first steps to set our economy
on a firmer foundation, paving the way to long-term growth and prosperity.”
Even as Mr. Obama was signing the bill, Republicans were denouncing it as a
waste of money. They asserted that it would not turn the economy around and that
they were unified in “disagreement with Congressional Democrats and President
Obama,” in the words of Michael Steele, the Republican national chairman.
The division between the two parties over the bill’s political repercussions was
almost as stark as that over its substance. Leaders of the Democratic Senate and
House campaign committees said in interviews that they would try to ensure that
Republicans paid a price in 2010 for having opposed the measure. Not a single
Republican in the House voted for the bill, and only three Republicans backed it
in the Senate.
Over the next few days, 30 first-term House Democrats will hold events in their
districts highlighting how spending there can protect and create jobs and
otherwise benefit those harmed by the downturn.
Representative Chris Van Hollen of Maryland, chairman of the Democratic
Congressional Campaign Committee, said of the Republicans: “Who am I to give
these guys advice? But I do think they made a mistake. From our perspective, we
are investing in confidence and success, and they are banking on fear and
failure. I think that is a dichotomy that does not work for them.”
Rahm Emanuel, Mr. Obama’s chief of staff, said Republicans had undercut
themselves with the vote.
“This is the party that just decided to vote against tax cuts,” Mr. Emanuel
said. “You have a lot of members on the line who voted against tax cuts, and
they also voted against important measures on health care and energy, and we
know both areas are highly valued by the American public. If you are the party
of action versus the party of inaction, the party of action wins.”
Republican leaders moved just as quickly to portray the bill as a boondoggle.
Republican aides said they would seize on every instance of potential abuse as a
way of stirring public doubt about the measure.
Mr. Steele said that he foresaw a “slight bump” in the economy because of the
enormous amount of money to be spent, but that he did not expect it to be
lasting. He disputed Mr. Van Hollen’s argument that Republicans would be in
political trouble if the economy improved.
“I’m telling the party leadership around the country, don’t believe the hype,”
he said. “There will be a slight uptick, it will flat-line, and it will continue
to go down.”
At least some Republicans have calculated that if the Obama plan does not work,
they will be able to say they warned against it. And if it does, they can hope
that voters will have moved on to other issues before the next Congressional
elections, in less than two years.
“The American public,” said the House Republican whip, Representative Eric
Cantor of Virginia, “is not going to be waking up one morning four years from
now and say: ‘What a great economy! It all goes back to that vote that the
Democrats passed on the stimulus bill.’ ”
In the meantime, Republicans argued, their nearly unanimous opposition to the
bill has helped them reconnect with their identity as a party of limited
government after years of what even Mr. Steele described as excessive spending
under President George W. Bush.
Ed Rogers, a Republican lobbyist and former White House official, said his party
benefited in particular because the administration had never effectively tied
the legislation to Mr. Obama’s popularity, instead allowing it to be defined as
a product of Congressional Democrats doling out wasteful spending.
“From the Republican point of view,” Mr. Rogers said, “there was never anything
other than the House Democrat wish list tinkered with by the Senate. It was
never the Obama Recovery Act.”
Mr. Obama used the Denver appearance to invoke the themes of hope and
opportunity that he effectively employed during the presidential campaign.
“Our American story is not, and has never been, about doing easy things,” he
said. “It’s about rising to the moment when the moment is hard.”
Sheryl Gay Stolberg reported from Denver, and Adam Nagourney from Washington.
Peter Baker contributed reporting from Washington.
Recovery Measure Becomes
Law and Partisan Fight Endures, NYT, 18.2.2009,
Congress, White House Near Final Deal on Stimulus
February 11, 2009
Filed at 12:25 p.m. ET
The New York Times
WASHINGTON (Reuters) - U.S. lawmakers and the White House were moving toward
a final deal on Wednesday for what could be a stimulus plan of under $800
billion that Democrats say is crucial to rescuing the struggling U.S. economy.
"We're close. I expect to have it done by 3 p.m. (2000 GMT)," said Senator Max
Baucus, one of the negotiators on the package of tax cuts and government
spending designed to pull the U.S. economy out of its deep recession.
Senator Arlen Specter, a moderate Republican whose support is key to passage,
said $789 billion "sounds pretty close" to the overall price tag, while
Democratic Senator Ben Nelson added, "The target was actually lower than that."
House and Senate negotiators were expected to emerge from closed-door meetings
later on Wednesday and gather in a public session to sign off on a compromise
bill that would then be sent to the full House and Senate for final passage.
Once that happens, possibly by week's end, President Barack Obama would promptly
sign the legislation into law.
"I've heard white smoke is imminent but I haven't seen it yet," said Senate
Republican leader Mitch McConnell.
McConnell has been an outspoken critic of the bill, saying it contains too much
government spending that would not stimulate the economy.
But Democrats who control both houses of Congress have mostly rebuffed
Republicans, saying the combination of tax cuts and spending to rebuild roads,
bridges and other projects in the bill would create or save up to 4 million
Democrats are working with three moderate Republican senators so that the bill
could speed through the Senate.
Alone, the stimulus package is unlikely to fix the U.S. economy because it does
not address financial sector problems. As long as banks face losses and struggle
to raise money, lending and growth will suffer.
The Obama administration hopes to address this through a bank rescue program
unveiled by Treasury Secretary Timothy Geithner on Tuesday. Wall Street plunged
as traders expressed disappointment there were not more details.
Nelson said he thought some money for education had been increased in the
stimulus compromise, adding that lawmakers were scaling back money for tax
incentives to encourage auto and home buying.
Sen. Susan Collins, a Maine Republican, said lawmakers intended to keep in a
one-year fix to a quirk in the tax law that threatens to ensnare the middle
class in a tax intended for the richest. Other specifics were not yet available.
One House Democratic aide said the sides were finding it easier to agree on tax
cuts than on the more complicated list of spending priorities contained in the
The House has passed a bill costing about $820 billion, while the Senate's
version will cost $838 billion.
House Speaker Nancy Pelosi says her chamber's legislation would create more
jobs, fulfilling Obama's pledge to create or save up to 4 million jobs through
construction and investment projects and tax cuts to put money in consumers'
But Senate Majority leader Harry Reid, hamstrung by more difficult Senate
procedures, cut out some spending that Republicans objected to in order to get
the required 60 votes.
Apart from three senators, all Republican lawmakers have opposed the bills as
written so far. Democrats had scant hopes of attracting many more of their votes
for a bill Obama says needs to be enacted quickly to avert a "catastrophe."
Various business groups support the Democratic-written legislation. The U.S.
Chamber of Commerce, for example, supports "many of the pro-growth tax
initiatives in the bill, as well as the spending-side provisions to provide
stimulus, create jobs and get Americans back to work."
(Editing by Alan Elsner)
Congress, White House
Near Final Deal on Stimulus, NYT, 11.2.2009,
Taking on Critics, Obama Puts Aside Talk of Unity
February 10, 2009
The New York Times
By PETER BAKER
WASHINGTON — President Obama has made a show of reaching across the aisle
since taking office, inviting three Republicans into his cabinet and wining and
dining other opposition leaders. But by Monday, he sounded like a candidate back
on the trail, railing against the status quo and dismissing critics as apostles
of a failed philosophy.
Three weeks into his tenure, Mr. Obama acknowledged that his effort to change
the political climate in Washington had yielded little. He made clear that he
had all but given up hope of securing a bipartisan consensus behind his $800
billion economic recovery package, arguing that the urgency of the economic
crisis had at least for now outweighed the need for unity.
“I’m happy to get good ideas from across the political spectrum, from Democrats
and Republicans,” he said at the Monday night news conference. “What I won’t do
is return to the failed theories of the last eight years that got us into this
fix in the first place, because those theories have been tested and they have
failed. And that’s part of what the election in November was all about.”
The sharp tone at the news conference and at a whooping election-style rally in
Indiana earlier in the day signaled a shift by the White House in the fractious
debate over his package of spending and tax breaks.
With no Republicans in the House voting for the economic plan and just three in
the Senate, Mr. Obama on Monday began a week of barnstorming stops that will
also take him to Florida and Illinois to create momentum behind his program.
Gone were the soothing notes of the last three weeks. Authoritative and
unsmiling, gloomy rather than inspirational, Mr. Obama cast the nation’s economy
in dire light and offered a barbed point-by-point critique of the Republican
argument that his plan would just create more government jobs and authorize a
raft of new wasteful spending.
“It’s a little hard for me to take criticism from folks about this recovery
package after they presided over a doubling of the national debt,” he said at
the news conference. “I’m not sure they have a lot of credibility when it comes
to fiscal responsibility.”
As Air Force One took him to Elkhart, Ind., where the unemployment rate has
tripled to more than 15 percent in the last year, Mr. Obama and his aides sought
again to reclaim the mantle of change, a theme central to his election victory.
His advisers depicted the president as the champion of people neglected by
“One thing that we learned over two years is that there’s a whole different
conversation in Washington than there is out here,” said David Axelrod, the
president’s senior adviser. “If I had listened to the conversation in Washington
during the campaign for president, I would have jumped off a building about a
year and a half ago.”
Robert Gibbs, the White House press secretary, decried what he called a “myopic
viewpoint in Washington,” disconnected from the troubles of the country.
“It’s illuminating because it may not necessarily be where cable television is
on all of this,” Mr. Gibbs said. “But you know, we’re sort of used to that. We
lost on cable television virtually every day last year. So you know, there’s a
conventional wisdom to what’s going on in America via Washington and there’s the
reality of what’s happening in America.”
In case Republicans doubted who was in charge, Mr. Obama wrapped himself in the
mantle of his election victory. At Concord High School in Elkhart, he basked in
the roar of a crowd that chanted, “Obama, Obama.” To Obama aides nostalgic for
the simpler days of the campaign trail, it had a familiar feel, even if the
music had changed from Stevie Wonder to “Hail to the Chief.”
The point was reinforced when the White House distributed poll numbers
indicating that twice as many Americans support Mr. Obama on the economy as they
do Congressional Republicans.
But Mr. Obama’s aides disregarded other surveys showing that a bare majority
approves of the package of spending and tax breaks. Republicans pointed to their
alternative call for deeper tax cuts as a more effective way to get money
quickly into the economy.
“It is not too late to craft a bipartisan plan that creates more jobs and helps
get our economy back on track, and Republicans stand ready to work with the
president to do this,” Representative John A. Boehner of Ohio, the House
Republican leader, said after the news conference.
For his part, though, Mr. Obama seemed to suggest it was too late, and that the
time for bipartisanship lay further down the road. He said he recognized that
some Republicans had good-faith doubts about his program, but he also
characterized some of the opposition as an effort to “test” the new president.
He vowed to continue trying to build alliances with the other party in the hope
that it “will pay some dividends over the long term,” and added: “As I continue
to make these overtures, over time, hopefully that will be reciprocated.”
Taking on Critics, Obama
Puts Aside Talk of Unity, NYT, 10.2.2009,
Obama Warns of ‘Catastrophe’ Unless Bill Passed
February 10, 2009
The New York Times
By SHERYL GAY STOLBERG and HELENE COOPER
WASHINGTON — President Obama took his case for his $800 billion economic
recovery package to the American people on Monday, as the Senate cleared the way
for passage of the bill and the White House prepared for its next major hurdle:
selling Congress and the public on a fresh plan to bail out the nation’s banks.
Warning that a failure to act “could turn a crisis into a catastrophe,” Mr.
Obama used his presidential platform — a prime-time news conference, the first
of his presidency, in the grand setting of the White House East Room — to
address head on the concerns about his approach, which has by and large failed
to win the Republican support he sought.
“The plan is not perfect,” Mr. Obama said in an eight-minute speech before
taking reporters’ questions. “No plan is. I can’t tell you for sure that
everything in this plan will work exactly as we hope, but I can tell you with
complete confidence that a failure to act will only deepen this crisis.”
The news conference was the centerpiece of an intense and highly orchestrated
campaign by the administration to wrest control of the stimulus debate from
Republicans and reframe it on Mr. Obama’s terms.
Earlier Monday, the president took his message on the road, traveling to one of
the most economically distressed corners of the nation, Elkhart, Ind. — a city
whose hard luck story, including an unemployment rate of 15.3 percent, he
invoked hours later at the White House as he sought to highlight the severity of
problems facing ordinary Americans.
“If there’s anyone out there who still doesn’t believe this constitutes a
full-blown crisis,” Mr. Obama said, “I suggest speaking to one of the millions
of Americans whose lives have been turned upside down because they don’t know
where their next paycheck is coming from.”
As he has since the outset of his presidency, Mr. Obama sought to draw sharp
distinctions between himself and his predecessor, on both domestic and foreign
He took a swipe at the economic policy championed by George W. Bush through good
times and bad, saying that “tax cuts alone can’t solve all of our economic
problems.” He also criticized President Hamid Karzai of Afghanistan, a close
ally of Mr. Bush. Yet he echoed Mr. Bush when he said the most “sobering moment”
of his adaptation to the presidency has been writing letters to families of
Mr. Obama’s tone was for the most part serious and businesslike, and he was
pointed in rebutting Republican criticisms of his economic plan, saying he was
not willing to take advice from “the folks who presided over a doubling of the
And while his answers were frequently lengthy, he steered clear of disclosing
any details of the forthcoming bank bailout and housing plans or foreign policy
On Monday evening, the stimulus bill advanced in the Senate by a vote of 61 to
36; three centrist Republicans and two Independents joined 56 Democrats to move
the legislation forward, with a vote on final passage expected Tuesday. But the
bill passed by the Senate differs substantially from its counterpart in the
House, and the two versions will have to be reconciled before Mr. Obama can sign
the legislation into law.
“There have been a lot of bad habits built up here in Washington,” Mr. Obama
said, explaining why he thought so few Republicans have voted for the plan,
despite overtures that included inviting them to the White House and putting
three Republicans in his cabinet.
The past few weeks have been rocky ones for the fledgling Obama administration,
as Republicans have successfully cast the stimulus plan as an exercise in
pork-barrel spending. The news conference and presidential road trips were an
effort by the White House to tap into Mr. Obama’s considerable rhetorical
skills, in effect putting him back onto the campaign trail.
In Indiana on Monday, Mr. Obama sounded as much like a candidate as a president,
scolding what he said were greedy Wall Street bankers and taking aim at the
Republicans whose support he was still trying to attract, even as he conceded he
was not 100 percent certain that every single item in his plan would create
“We can’t posture and bicker and resort to the same failed ideas that got us
into this mess in the first place,” Mr. Obama told the enthusiastic crowd that
packed into a high school gymnasium, where he took questions from the crowd that
he said had not been screened. He added: “You didn’t send us to Washington
because you were hoping for more of the same. You sent us there to change
Leading Democrats said Monday that it was critical for the new president to take
back the debate.
Senator Kent Conrad, Democrat of North Dakota and chairman of the Senate Budget
Committee, said Mr. Obama had to persuade Americans that the recession is
“substantially more serious” than was apparent even a few weeks ago and that “it
is going to take a series of steps, not just one economic recovery package” to
To that end, Mr. Obama began Monday’s news conference by laying out the stark
economic facts facing the country, beginning with the 598,000 jobs lost last
month alone — a figure, Mr. Obama said, that is ‘’nearly the equivalent of
losing every job in the state of Maine.”
At several points, Mr. Obama made clear that more action would be needed in the
future — starting with the next steps to bail out ailing financial institutions,
and with unknown measures yet to come. Mr. Obama’s treasury secretary, Timothy
F. Geithner, is set to introduce the next $350 billion installment of the
financial rescue package on Tuesday, but Mr. Obama said he could not yet
estimate how much more money might be needed to get the credit markets operating
“We don’t know yet whether we’re going to need additional money, or how much
additional money we’ll need,” he said. Saying he had not come to Washington
“ginned up” to spend billions of taxpayer dollars, the president said that
pushing a stimulus package “wasn’t how I envisioned my presidency beginning.”
But he said his first priority was to arrest a downward economic spiral and put
an end to what he called Wall Street’s profligate ways.
“The party is now over,” he said.
He said he had a fundamental disagreement with those Republicans who argued that
government could not solve the economic crisis.
On foreign affairs, Mr. Obama took aim at Mr. Karzai, who administration
officials have been criticizing more strongly — and publicly — of late for
failing to crack down on corruption and drug trafficking, which they say is
fueling the Taliban insurgency. Afghanistan’s “national government,” Mr. Obama
said, “seems very detached from what’s going on in the surrounding community.”
He also said that he was reviewing a Bush policy that barred the news media from
or photographing the coffins of soldiers killed in Iraq and Afghanistan, but
that he had not yet determined whether to lift it.
On Iran, a nation Mr. Bush labeled a rogue state, Mr. Obama said he was “looking
at areas where we can have constructive dialogue where we can directly engage
“My expectation,” he said, “is that in the coming months we will be looking for
openings that can be created where we can start sitting across the table face to
Peter Baker contributed reporting from Elkhart, Ind.
Obama Warns of
‘Catastrophe’ Unless Bill Passed, NYT, 10.2.2009,
President Seeks Grass-Roots Support for Stimulus
February 9, 2009
Filed at 8:59 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- President Barack Obama faces a barrage of questions on his
plans to reinvigorate the economy with a massive stimulus bill and additional
billions in bailout money for the financial markets.
Trips Monday and Tuesday to cities hurting under the economic meltdown and a
prime-time news conference Monday night show that Obama and his advisers are
worried about a looming Senate vote on the stimulus bill, which failed to gather
meaningful Republican support during rare weekend debate. The
question-and-answer sessions with citizens and later with news reporters will
allow Obama to appeal directly for grass-roots backing of his plans.
Both trips were added to Obama's schedule as difficulties with the legislation
on Capitol Hill increased. Originally, aides had insisted his time would be
better spent in Washington to shepherd the bill rather than traveling the more
traditional presidential route around the country, pressuring lawmakers from his
The $827 billion Senate version of the plan was expected to pass the Senate on
Tuesday. However, it must be reconciled with the House version, which totaled
$820 billion in spending and tax cuts. With Senate and House negotiators
preparing to deal, Obama is likely to push for a bill on his desk for his
signature by mid-month.
To focus on the stimulus bill, the Obama administration postponed to Tuesday the
unveiling of the second part of the $700 billion bailout of the financial
industry. Instead, Obama focused on campaigning for the stimulus bill with his
trips to areas hit hard by the economic crisis.
Two key players in crafting the version now before the Senate -- Maine
Republican Susan Collins and Nebraska Democrat Ben Nelson -- said Monday morning
they believe this is the best that can be achieved in the current circumstances.
''This bill is not perfect,'' Collins acknowledged in a nationally broadcast
interview. ''We're not claiming that. But in fact I think this bill will help to
create 3.5 million jobs. ... We're facing a crisis and it makes no sense to have
a partisan divide.''
She said the measure on balance is ''a good bill. It is needed and I think it
will make a difference.''
Appearing with Collins on NBC's ''Today'' show, Nelson said, ''I think the
things we have focused on will help turn this economy around.''
The House and Senate bills overlap in many ways, but the Senate bill has a
greater emphasis on tax cuts, while the House bill devotes more money to states,
local governments and schools. The differences are likely to mean difficult
negotiations when House and Senate conferees meet later in the week to try to
reconcile the two measures.
The Senate stripped $108 billion in spending, including $40 billion in aid to
state governments for education and other programs. The bill retained items that
also probably won't do much for the economy, such as spending $1 billion to fix
problems with the 2010 Census.
Still, the bill retained the core of Obama's plan to combine hundreds of
billions of dollars in spending to boost consumption by the public sector with
tax cuts designed to increase consumer spending. Much of the new spending would
be for victims of the recession, in the form of extending unemployment insurance
through the end of the year and increasing benefits by $25 a week, free or
subsidized health care, and increased food stamp payments.
''The president's top man on the economy is the president,'' Larry Summers, the
chairman of the White House National Economic Council, said on ''Fox News
Sunday.'' Summers added: ''He listens to advice from all of us, and he sets his
For his first direct pitch to citizens, Obama scheduled a town hall meeting in
Elkhart, Ind. He was to return to Washington for the news conference Monday
night. On Tuesday he plans to visit Fort Myers, Fla., an area hit hard by
''Americans across this country are struggling, and they are watching to see if
we're equal to the task before us. Let's show them that we are. And let's do
whatever it takes to keep the promise of America alive in our time,'' Obama said
in his weekly radio and Internet address.
The Elkhart-Goshen region in northern Indiana saw its unemployment rate soar to
15.3 percent in December, up a whopping 10.6 percentage points from December
2007. The region has been bruised by layoffs in the recreational vehicle
industry. Hundreds of workers have lost their jobs at RV makers such as Monaco
Coach Corp., Keystone RV Co. and Pilgrim International.
White House spokesman Robert Gibbs said the meeting would give the president a
chance to hear Americans' concerns about the bill, which was set to have a key
vote in the Senate on Monday afternoon.
''I think this is another chance for the president to talk directly to the
American people about what he thinks is at stake,'' Gibbs said. ''Watching
millions lose their jobs, and having in front of Congress -- and hopefully in
front of him soon -- a plan to save or create millions more jobs and get people
back to work, putting money in people's pockets, getting help for state and
local governments so they don't have to lay off firefighters or teachers or
Grass-Roots Support for Stimulus, NYT, 9.2.2009,
U.S. Plans to Curb Executive Pay for Bailout Recipients
February 4, 2009
The New York Times
By EDMUND L. ANDREWS and VIKAS BAJAJ
WASHINGTON — The Obama administration is expected to impose a cap of $500,000
for top executives at companies that receive large amounts of bailout money,
according to people familiar with the plan.
Executives would also be prohibited from receiving any bonuses above their base
pay, except for normal stock dividends.
President Obama and Treasury Secretary Timothy F. Geithner plan to announce the
executive compensation plan on Wednesday morning at the White House.
The new rules would be far tougher than any restrictions imposed during the Bush
administration, and they could force executives to accept deep reductions in
their current pay. They come amid rising public fury about huge pay packages for
executives at financial companies being propped up by federal tax dollars.
Executives at companies that have already received money from the Treasury
Department would not have to make any changes. But analysts and administration
officials are bracing for a huge wave of new losses, largely because of the
deepening recession, and many companies that have already received federal money
may well be coming back.
Crucial details remained unclear on Tuesday night, including whether the
restrictions would apply to all companies that receive money under the so-called
Troubled Asset Relief Program, or TARP, or whether they would apply only to the
“exceptional” companies that were being rescued from collapse.
Under the Treasury’s $700 billion rescue program, most companies that have
received money so far have been considered “healthy” rather than on the brink of
But five of the biggest companies to get help — Citigroup, Bank of America and
the American International Group, General Motors and Chrysler — were all facing
acute problems. And top executives at those companies made far more than
$500,000 in recent years.
Kenneth D. Lewis, the chief executive of Bank of America, took home more than
$20 million in 2007. Of that, $5.75 million was in salary and bonuses.
Vikram Pandit, who became chief executive of Citigroup in December of 2007 and
previously held other senior positions at the bank, made $3.1 million.
Richard Wagoner, the chief executive of General Motors, made $14.4 million, much
of it in stock, options and other non-cash benefits. He earned a $1.6 million
“That is pretty draconian — $500,000 is not a lot of money, particularly if
there is no bonus,” said James F. Reda, founder and managing director of James
F. Reda & Associates, a compensation consulting firm. “And you know these
companies that are in trouble are not going to pay much of an annual dividend.”
Mr. Reda said only a handful of big companies pay chief executives and other
senior executives $500,000 or less in total compensation. He said such limits
will make it hard for the companies to recruit and keep executives, most of whom
could earn more money at other firms.
“It would be really tough to get people to staff” companies that are forced to
impose these limits, he said. “I don’t think this will work.”
President Obama last week branded Wall Street bankers “shameful” for giving
themselves nearly $20 billion in bonuses as the economy was deteriorating and
the government was spending billions to bail out some of the nation’s most
prominent financial institutions.
“If the taxpayers are helping you, then you have certain responsibilities to not
be living high on the hog,” Mr. Obama said Tuesday, in an interview with “NBC
Mr. Obama’s new rules are coming just as he is expected to ask for additional
sums of money, beyond the $700 billion already authorized, to prop up the
financial system, even as he pushes Congress to move quickly on a separate
economic stimulus package that could cost taxpayers as much as $900 billion.
If the new pay limit applies to all companies that receive Treasury money, it
would be almost as tough as a $400,000 limit proposed last week by Senator
Claire McCaskill, Democrat of Missouri.
Senator McCaskill, reacting to reports of extravagant perks and bonuses at
companies like Merrill Lynch and Citigroup, had blasted Wall Street executives
as “a bunch of idiots” who were “kicking sand in the face of the American
The banks that have received bailout funds already are subject to limits on
compensation, but the Bush administration intentionally left them lax. The top
five executives at banks that get an equity infusion from the government are
restricted from offering golden parachutes, as rich severance packages are
called, and any compensation above $500,000 is not tax deductible to the
Companies that received emergency money, like Citigroup, faced somewhat tougher
restrictions, including a requirement to reduce the bonus pool for the top 50
executives by 40 percent. But even those restrictions come nowhere near the
In a letter to Congress last month, Lawrence H. Summers, director of Mr. Obama’s
National Economic Council, suggested that the new pay restrictions would apply
to all companies that get Federal help.
Without mentioning a particular dollar limit, Mr. Summers wrote that “executive
compensation above a specified threshold amount be paid in restricted stock or
similar form that cannot be liquidated or sold until the government has been
Eric Dash contributed reporting.
U.S. Plans to Curb
Executive Pay for Bailout Recipients, NYT, 4.2.2009,
Obama Seeks to Weather Fallout of Nomination Woes
February 4, 2009
Filed at 4:08 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
WASHINGTON (AP) -- His infant presidency already shaped by mounting national
troubles, President Barack Obama now faces an added challenge: weathering the
fallout of a spate of nomination glitches.
''I screwed up,'' Obama said repeatedly after two top nominees withdrew their
names from consideration, saying they wanted to avoid becoming distractions for
the president as he seeks to move ahead with an ambitious agenda. ''I'm
frustrated with myself, with our team.''
In a series of Oval Office interviews with TV network anchors Tuesday, he took
the blame for the nomination missteps and vowed to live up to the new era of
responsibility he mapped out during his inauguration speech just two weeks ago.
Earlier, over the course of a few hours, Obama's close friend Tom Daschle
abandoned his bid to become health and human services secretary and the
administration's point man on reforming health care, and another high-profile
nominee -- Nancy Killefer -- stepped down from a newly created position charged
with eliminating inefficient government programs.
Personal tax failures dogged both, and Daschle's woes only grew over the past
five days; he also faced questions about potential conflicts of interest related
to his work with health care interests. All that set the stage for potentially
difficult Senate confirmation battles that could further damage and embarrass
Daschle and Killefer were only the latest nomination woes for the president.
Treasury Secretary Timothy Geithner had tax troubles, too, but the Senate
ultimately confirmed him. And, last month, Obama's initial choice for Commerce
secretary, Bill Richardson, stepped aside amid a grand jury investigation into a
state contract awarded to his political donors. The president named Sen. Judd
Gregg, R-N.H., to the post Tuesday.
Taken together, the problems called into question the thoroughness of Obama's
vetting process as the Democrat's team pushed to put his Cabinet and White House
team in place at a lightning-quick pace after last fall's election. The problems
also threatened to undercut Obama's promise to change business as usual in
Washington; previous presidents have faced similar problems with their nominees.
Even as he works to stabilize the rapidly worsening economy and plan for a troop
decrease in Iraq and increase in Afghanistan, Obama's most immediate objective
now is to move on from what the White House called an ''embarrassment.''
He must quickly find someone with Daschle's health care expertise and Washington
connections who can sail through the confirmation process and make good on the
president's pledge to move toward universal health care coverage in his first
That certainly won't be easy given that Daschle is considered a major authority
on the issue and has spent some three decades in Washington, most in the Senate,
where he once was majority leader. He was going to have played two roles for
Obama as the White House health czar, with a West Wing office, and as the
secretary of the Health and Human Services Department.
Among possible options: Kansas Gov. Kathleen Sebelius and others with state and
national leadership credentials, including Howard Dean, the physician and former
Vermont governor who just stepped down as the national Democratic Party
chairman, Pennsylvania Gov. Ed Rendell and Ohio Gov. Ted Strickland.
Despite the loss, the White House promised to move ahead with health care
reform. It was set to showcase a first step Wednesday when Obama signs
legislation to expand health coverage for uninsured children of low-income
''We'll miss Sen. Daschle's leadership,'' said White House senior adviser David
Axelrod, ''but this issue has great power of its own.''
''I don't think the effort slows down for health care reform, and I think Sen.
Daschle and others would admit that the effort is far bigger than any one
individual,'' added presidential spokesman Robert Gibbs. He said that work on
reforming health care already is under way by many people in the administration
and it won't stop while a replacement nominee is sought.
Democratic leaders in Congress also promised to push forward.
''We're going to do health care reform,'' Senate Majority Leader Harry Reid,
D-Nev., said flatly after the nomination withdrawal. Still, his No. 2 in the
Senate, Illinois' Dick Durbin, said, ''It really sets us back a step.''
Obama Seeks to Weather
Fallout of Nomination Woes, NYT, 4.2.2009,