White House Update

White House Update
Thursday, April 23

The President’s meeting today with 13 executives from the credit card industry underscores one of the administration’s most vexing dilemmas: trying to stabilize the banks while getting the struggling U.S. economy back on its feet.

Here’s the dilemma: the White House acknowledges that a sound banking system is one of the bedrocks of the American economy. To be sound, banks have to have, and are shoring up, their capital position. But at the same time, they’re being asked to step up lending.

Obama told the executives today that the interest rates and fees they charge are “unfair” and says they need to be more “consumer friendly.” The banking industry’s response – although they didn’t say this to the President’s face today – has been along these lines: “We HAVE been consumer friendly; TOO consumer friendly. We flooded the market with cheap credit for much of this decade and now a lot of customers can’t pay it back.”

The President himself knows all too well about credit card debt. At the White House news briefing this afternoon, Press Secretary Robert Gibbs told reporters that up until recently – obviously before the multi-million dollar book sales – Obama himself was in the red.

But the high levels of credit delinquency, personal bankruptcies, auto repossessions and, of course, mortgage foreclosures, appear to support the banks’ point. No question, millions of Americans are hurting – but for people with a proven inability to pay, who are already up to their necks in debt, is more debt the answer?

In short, that is the banking industry’s position – and the President’s dilemma.


WITHER IRAN?

Another dilemma for the West Wing - surprise, surprise: the Middle East. During talks Tuesday with Jordan’s King Abdullah, the President said he wants to see Israel, the Palestinians and neighboring Arab countries – like Jordan – to step efforts to forge some kind of peace agreement. The White House envoy to the region, former Senate Majority Leader and architect of the Northern Ireland peace agreement, George Mitchell, says he is cautiously hopeful.

To nudge things along, Obama will invite Israeli Prime Minister Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas and Egyptian President Hosni Mubarak to the White House for talks in the next few weeks. But not all at once.

But Obama’s priorities are not Israel’s. Netanyahu said earlier this week that he will not participate in talks until the President makes headway on Israel’s number one issue: stopping Iran’s nuclear program. To drive that point home this morning, the President was told by Israeli Ambassador Sallai Meridor to confront Iran “before it’s too late.”

Meridor made the comments at a Holocaust memorial service on Capitol Hill. Also speaking: a top official of the U.S. Holocaust Memorial Museum, Joel Geiderman, who was even more blunt, reminding Obama about Iran’s pledge to destroy Israel. He warned the President to ignore that threat at America’s “own peril.”

The White House also faces a dilemma with the Palestinians. Abbas’ Fatah faction has seen its power eroding, to the benefit of the Islamist militant group Hamas. Hamas controls the Gaza Strip, but the administration has so far maintained the Bush policy of refusing to deal with – branding it a terrorist group.


TORTURE LATEST

At the briefing, Gibbs appeared to distance himself from comments made this morning by Defense Secretary Robert Gates, who said he supported the release of sensitive memos on detainee interrogation methods. Gates said he viewed the disclosure as inevitable.

Gibbs’ response: "I have not seen Secretary Gates's full remarks." Gibbs inferred that a lot of people have different opinions on the subject. He added "The problem...isn't the existence of a paragraph or a term in a memo…It is the very existence of their use."

FIRST 100 DAYS (94 and counting)

Conflicting editorials in the Wall Street Journal and Washington Post.

The Post’s David Broder says Obama has gotten off to a good start: The "President has shown - and it is important - a mastery of the art of managing the presidency." He lauds Obama’s He lauds his “good organizational and management skills” and says in sum, “A bravura performance on Obama's part."

The Journal’s Daniel Henniger counters, focusing on the president’s grip-and grin with Venezualan President Hugo Chavez as symbolic of White House weakness. He writes: "The weirdly ebullient Mr. Obama did not...show reserve." He adds: "The Obama people seem to believe that talking top guy to top guy is the yellow brick road to progress" and that "There appears to be no coherent strategy beyond "talk to our enemies."

WEST WING NOTES

…the President will hold a prime-time news conference next Wednesday at 8pm, EDT; it is the 100th day of his presidency.

…it was “Take Your Daughters to Work Day” at the White House, but Malia and Sasha Obama didn’t make the 60-secnd commute to the Oval Office with Dad. First Lady Michelle Obama did speak to 160 kids – of administration, household and Secret Service employees. Mrs. Obama said: She doesn’t miss cooking, the new dog, Bo, is “crazy” and says one of the best parts about being First Lady is that she gets to do a lot of “fun stuff.”

White House Update

Immigration Redux
Immigration is regarded as a “second-tier” issue in the West Wing (education, health care and energy being the administration’s top priorities), but the president still wants a “comprehensive solution” to the problem and a bill to be crafted this Fall. The centerpiece of any legislation would be putting the estimated 12 million illegals in the U.S. on the path to eventual citizenship. But Press Secretary Robert Gibbs told reporters this afternoon that illegals would be put in “the back of the line” and made to wait. Gibbs also suggested that they learn English. The White House also warned that it wants to step up the crackdown on employers who flaunt the law by hiring illegals. If all of this sounds familiar, it is: President George W. Bush tried, and failed, to pass comprehensive immigration legislation in 2007. Analysts warn with the economy in rough shape, the task of passing a sweeping immigration bill may prove to be infinitely more daunting.

War Funding Flip Flop?
The President is also asking for an additional $83.4 billion for military and diplomatic operations in Iraq and Afghanistan. Obama opposed such funding two years ago when he was in the Senate. The request would finance the additional 17,000 troops for the Afghan theater bringing the number of American servicemen and women there to 55,000, a 59% increase. Meantime: the Congressional Research Service says the funding request would push the costs of both wars to nearly $1 trillion since the Sept. 11, 2001, terrorist attacks.

Housing Confab
President Obama claims that his administration’s policies (along with actions by the Federal Reserve) have lowered mortgage rates to historic lows, giving millions of Americans the opportunity to refinance their homes. Critics say the rates are artificially low, but the administration says it will do whatever is necessary to get the housing industry moving again. Meeting in the Roosevelt Room with the president was Treasury Secretary Geithner, Housing and Urban Development Secretary Donovan – and homeowners from the Washington DC area who seemed pretty nervous in their high-powered surroundings. Reporters asked about the Somali pirate situation and were rebuffed by the president: “Guys, we’re talking about housing now…”

Quick Hits
…Did the President bow when meeting Saudi King Abdullah at last week’s G20 summit? “No,” Press Secretary Robert Gibbs said. “He bent over to shake his hand…”
…Next Thursday (Apr. 23) the White House sponsors “Bring Your Child to Work Day.” Will Malia and Sasha accompany Dad on his 60-second commute to the Oval?
…The East Wing has released the White House Easter egg design. They have an environmental theme…
…First Lady Michelle Obama was seen puttering around in the new White House garden this afternoon. With her: Agriculture Secretary Tom Vilsack, a White House chef and students from Bancroft Elementary. They planted seeds – 55 kinds of fruits and vegetables, except for beets. The President doesn’t like beets…

Unemployment high in March, Officials say

By Michael Ruhl, University of New Mexico – Talk Radio News Service

A day after President Barack Obama's budget was passed by a Congress boiling with partisanship, the Bureau of Labor Statistics released a report showing unemployment at its highest since 1983. There are now 13.2 million Americans out of work.

The pouring rain in Washington mirrored the sobered mood in the room, as the Joint Economic Committee heard the testimony of Keith Hall, the Commissioner of the Bureau of Labor Statistics.

March was one of the worst Months on record for unemployment, and when asked outright, Hall told the committee that there were no "bright spots" in the report.

National unemployment climbed to 8.5 percent in March, rising from the level of 8.1 percent in February and 7.6 percent in January.

Hall said that two-thirds of the job loss has happened in the past 5 months. Every state is in recession for the first time in 30 years, according to Carolyn Maloney (D-NY).

Official unemployment numbers do not encompass underemployed Americans or those who have officially left the workforce. It is reported that 16 percent of the country is out of work or underemployed. One in four of those unemployed have been out of work for more than six months, and of those, half have been looking for work for over a year, Hall said.

Maloney highlighted that last month, 8,000 jobs were lost in the news publishing industry. Those losses total 70,000 job cuts since Dec. 2007, Hall said, adding that most job losses have been see in the manufacturing, construction, and temporary services industries. The only area to see any growth in March was the Healthcare industry, Hall said.

Ranking Committee member Senator Sam Brownback (R-KA) noted that the impact of the ongoing recession was not severe for almost a year after it began in December 2007. Brownback attributed recent dramatic jumps in job losses over the past five months to the lockup in the credit markets and the government bailouts that followed.

The Federal Reserve believes that unemployment will peak at 8.8 percent this year, but Ranking House Committee Member Kevin Brady (R-TX) said that the unemployment rate is already higher than what the administration anticipated for 2009. Brady said that the Obama Administration's "optimistic assumptions" would not get the country out of its current mess.

President Obama’s Economic Stimulus package was passed by Congress earlier this year, and saw an unprecedented amount of money placed into public works meant to put people back to work. Obama has pledged the legislation will save or create three to four million jobs over the next two years.

Read the report here: Bureau of Labor Statistics Report

Official: The Great Depression is history

Bank runs and soup lines that once stretched around the neighborhood during the Great Depression of the 1930s remain atypical today, even during the worst economic crisis of the last 70 years. “The current economic recession is unquestionably severe, it pales in comparison with what our parents and grandparents experienced in the 1930s,” said Christina D. Romer, the Chair of the President’s Council of Economic Advisors. Even at the worst point in the current recession, unemployment has only reached 8.1 percent, which stands in stark contrast to the nearly 25 percent seen during the 1930s. Therefore, Romer believes, that no matter how severe the economic recession is presently, America is no where close to entering another depression.


Romer attributed the cause of the current recession to modern innovations such as derivatives, which led to a direct relationship between asset prices and severe stress in financial institutions. “A reliance on such insecure and volatile assets caused the failure of financial institutions, which led a drying up of credit, which America so desperately needs,” said Romer.


Additionally, Romer complimented the Obama administration for passing the American Recovery and Reinvestment Act, and called it the “biggest and boldest countercyclical fiscal action in history.” Also, Romer noted the lack of bank runs and attributed this to the Federal Deposit Insurance Company, which was created as part of the New Deal.


Remaining optimistic, Romer stated that due to the quick and well-conceived response of the Obama Administration, “there is every reason to believe that we will weather this trial and come through stronger than before.” Senator Sherrod Brown (D-Ohio) echoed such beliefs, when he exclaimed that “the United States recovered from the Great Depression and we will recover from today’s recession.”

“The most fiscally irresponsible budget in American history"?

Coffee Brown, University of New Mexico, Talk Radio News

House Minority Leader John Boehner (R-Ohio), Republican Whip Eric Cantor (R-Va,), Rep. Paul Ryan (R-Wis.), and Rep. Mike Pence (R-Ind.) presented the broad outline of the Republican budget counter-proposal, stating that details would be forthcoming next week.
Boehner said the President’s proposal “spends, taxes, and borrows too much,” adding “I think it’s completely irresponsible. Our plan curbs spending, creates jobs, and cuts taxes, while controlling the debt.”

Pence called it “the most fiscally irresponsible budget in American history,” saying it calls for “more spending, more government, more bailouts.”

He said the “national energy tax” (Cap-and-Trade) would cost every American household more than $3,000 per year. The increase on marginal tax rates would fall most heavily on small business owners, he said. “We believe it is our obligation to offer a better solution if we are in disagreement,” he finished.

Cantor said the Republicans had presented an alternative stimulus plan and housing plan and were preparing an alternative energy plan as well. He accused the President of turning from a centrist campaign to “ambushing” and “strong-arming” Congress toward a “more ideological” agenda.

Ryan promised the details of the plan next Wednesday on the House floor, calling the president’s version “reckless and irresponsible. It’s a budget that doubles the national debt in 5 and 1/2 years, and triples it in ten and 1/2 years. It’s a budget that increases our national debt and our borrowing more than in all prior presidencies.”


The pamphlet accompanying the announcement was 18 pages long and contained no specifics, but outlined broad policies, such as promoting nuclear power, encouraging enrollment in private insurance plans, reducing spending, reducing taxes, liberalizing exploration for oil in areas currently protected for environmental reasons, and ending “bailouts.”