A SUMMARY OF WHAT’S IN THE MAJOR U.S. NEWSPAPERS / Fed May Become Great Overseer

By Daniel Politi

All the papers give front-page play to the massive economic stimulus package that will come up for a vote in the House today, which USA Today says is President Obama’s “first test of the bipartisanship he pledged in his campaign.” Obama visited Capitol Hill yesterday to urge Republican lawmakers to support the $825 billion stimulus plan, but most Republicans are still unconvinced even as they were careful to praise the president for listening to their concerns. The New York Times goes with a two-story lead examining the stimulus package’s effect on education as well as a look at how the bill would provide Democrats a fast-track way to fund many initiatives that have long been priorities for the party. The Wall Street Journal points out that the Senate version of the bill is now getting close to reaching the $900 billion mark.

 

The Washington Post leads with a look at how Obama’s advisers are discussing several options to prop up the nation’s financial system. They’re all bound to be unpopular and, as a bonus, there’s absolutely no guarantee that any of them will work. It seems the White House will try a combination of several programs instead of hoping that one plan provides the magic touch, which raises the risk that the response will be seen as haphazard. None of the ideas being discussed is new: a federal protection against losses backed by mortgages and loans, a new institution to buy up toxic assets, and an injection of taxpayer money into troubled firms in exchange for ownership, which could result in “nationalization in all but name.” The

 

Los Angeles Times leads with data that show more than 236,000 homes went into foreclosure in California last year, which is more than the previous nine years combined, and a record 404,000 borrowers defaulted on their payments. While previous foreclosures could mostly be blamed on people who took on mortgages they couldn’t afford, now it looks like many of those who are defaulting are doing so because of the loss of a job or income in a state that now has 9.3 percent unemployment.

Obama spent almost three hours yesterday in separate meetings with House and Senate Republicans where he urged them to come together to support the stimulus package. “I do hope that we can all put politics aside and do the American people’s business right now,” Obama said. But Republican lawmakers were unconvinced. Republican lawmakers said the plan was too expensive and complained that Democratic congressional leaders had shut them out of the process. The White House made it clear that it is ready to compromise on some issues, and Democrats said they would drop a provision from the House bill that would have increased funding for contraception and family planning services. The administration also suggested it would agree to a $69 billion proposal that would allow millions of Americans to avoid having to pay the so-called alternative minimum tax, which was folded into the Senate version of the bill.

 

The package that House members are expected to vote on today includes $550 billion in spending, and $275 billion in tax cuts. Obama once again told Republicans he’s willing to consider including more tax cuts for small businesses, but most GOP lawmakers signaled that wouldn’t be enough to change their minds. Regardless, the Democratic majority in Congress makes it virtually certain that the package will be approved. Even if he didn’t win them over yesterday, Obama may have wanted to build goodwill for a later date. The WP notes inside that the stimulus “represents the first step” in a “complex process that could cost many hundreds of billions in additional funding, and is likely to require Republican cooperation.”

The WP‘s Dana Milbank says that while Obama “ushered in the post-partisan era” last week, it now looks like “the post-post-partisan era is already upon us.”

 

In one of its lead stories, the NYT details that the $150 billion in new federal spending on “nearly every realm of education” would “more than double the Department of Education’s current budget.” This massive influx of aid has the potential to dramatically change the role that the federal government plays in education, an area normally controlled by state and local governments. Many are also raising concerns about how school districts will be able to spend so much money so quickly and wonder what will happen when the money ends in two years.

 

The NYT also notes that the stimulus package isn’t simply a way to provide a boost to the economy, but also a way for Democrats to rewrite “the social contract with the poor, the uninsured and the unemployed, in ways they have long yearned to do.” Quite simply, the package would allow Democrats to quickly fund programs without hearings or a protracted debate.

 

That’s not to say all Democrats are happy with the stimulus package. In a front-page piece, the WP says some Democrats think Obama is losing a golden opportunity to remake the American economy. Some say the plan should be split into two parts, one to provide immediate stimulus and the other, which would take longer to formulate, to look into ways that the economy can be transformed. “We need to think of it as a first step,” Rep. Jay Inslee said. “The question is: Are we going to step up to the plate to sustain this effort?” The problem is that many Democrats fear that the appetite for new initiatives will wane after the stimulus bill passes.

 

“It’s raining money,” said Republican Rep. Michael C. Burgess. And all that cash has resulted in what the WSJ calls “a rough-and-tumble competition” between lobbyists from a variety of industries, including concrete, asphalt, shoes, and cattle, to name a few.

 

A key question of the stimulus package is how quickly the massive cash infusion will be able to make its way through the economy. The Congressional Budget Office released a report yesterday saying that 64 percent of the money would be spent within the first 18 months, but also noted that due to interest payments its total cost could be more than $1 trillion.

 

The NYT‘s David Leonhardt writes while that pace may be “slower than ideal … it isn’t terrible.” Overall, the package “does pretty well by several important yardsticks.” But the “one major flaw” that Leonhardt identifies is that it just isn’t very original. Obama came into office pledging to change Washington, and the package could have gone a long way to change the way the government spends money. In the end, we’re mostly getting a bunch of spending on existing programs. While that may reflect “the realities of political negotiations … it still is a missed opportunity in a few instances.”

Amidst all the hoopla surrounding Republican resistance to the stimulus package, it may have been easy to miss what a rare sight it is to see a president travel to Capitol Hill and even talk to reporters from the same spot where senators often hold their news conferences. When a president needs to talk to lawmakers, he usually does it on his turf. For a second “it might have seemed that Mr. Obama was back in the Senate,” notes the NYT.

 

Another day, another lobbyist joins the Obama administration. USAT gives big play to news that Treasury Secretary Timothy Geithner chose a former Goldman Sachs lobbyist, Mark Patterson, as his chief of staff. The announcement came on the same day as Geithner announced new rules that aim to prevent the influence of lobbyists on the department. Patterson signed a pledge to recuse himself from issues relating to his former employer, undoubtedly a difficult proposition considering that Goldman Sachs received $10 billion from the financial bailout program, which, of course, is overseen by the Treasury.

 

The NYT gets word that the Obama administration intends to be much tougher on Afghan President Hamid Karzai. Whereas the Bush administration largely saw Karzai as an ally, he “is now seen as a potential impediment to American goals in Afghanistan,” reports the NYT, largely due to the rampant corruption that is present in his government. The new administration plans to focus on working more with provincial leaders while concentrating on waging the war against insurgents and leaving much of the nation-building to European allies. Yesterday, Defense Secretary Robert Gates called Afghanistan “our greatest military challenge” and warned against overly ambitious goals.

 

Most of the papers front the death of John Updike, the two-time Pulitzer Prize winner for fiction who published more than 50 books over a career that spanned five decades. Although in recent years he had concentrated more on essays and art criticism, he will best be remembered as a chronicler of the middle class in America’s small towns and suburbs. Updike “was arguably this country’s one true all-around man of letters,” writes the NYT‘s Michiko Kakutani, “a literary decathlete in our age of electronic distraction and willful specialization.” The WP‘s Henry Allen says Updike “remains arguably the American writer who has evoked reality brilliantly more often than any other.” He was 76 and had lung cancer.

 

In the NYT‘s op-ed page, David Swensen and Michael Schmidt write that newspapers should take a cue from colleges and universities and become “nonprofit, endowed institutions.” Not only would it save newspapers, but the change would also shield them “from the economic forces that are now tearing them down.” In addition, it would promote journalistic independence since newspapers would no longer face pressures from advertisers or stockholders. “Enlightened philanthropists must act now or watch a vital component of American democracy fade into irrelevance.”

 

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