2009/02/09

Morning News Roundup - February 10, 2009




President Obama declared last night in his first prime-time news conference that the task of saving and creating jobs is more important than cultivating the bipartisan cooperation he promised to bring to Washington, and he pressed his case for the massive economic stimulus plan working its way through Congress.
Warning that inaction could "turn a crisis into a catastrophe," Obama rejected criticism from Republicans about the legislation's effect on the federal deficit, noting that government debt had ballooned on his predecessor's watch. Although he called for lawmakers to break out of their "ideological rigidity," he was unapologetic as he pushed a package with a cost of more than $800 billion that has so far drawn only nominal Republican support.
"I can't afford to see Congress play the usual political games. What we have to do right now is deliver for the American people," Obama said just hours after the legislation narrowly cleared a key procedural hurdle in the Senate, where it is likely to gain final passage today.
..."So, you know, we can differ on some of the particulars, but again, the question I think that the American people are asking is: Do you just want government to do nothing, or do you want it to do something? If you want it to do something, then we can have a conversation," he said. "But doing nothing -- that's not an option, from my perspective." Obama defended the role of government in the recovery process, saying that "with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life."
The president fielded 13 questions from reporters in his first wide-ranging session since he took office, touching briefly on foreign policy, his long-range agenda and sports.
...In a brief foray into foreign policy, Obama said with regard to Iran that the administration "will be looking for openings that can be created where we can start sitting across the table, face-to-face diplomatic overtures" with the Islamic republic. He said that "there's been a lot of mistrust built up over the years, so it's not going to happen overnight" and that "even as we engage in this direct diplomacy, we are very clear about certain deep concerns" about Iranian links to militant groups and possible pursuit of a nuclear weapon.
In stark contrast to former president George W. Bush, Obama did not say that the United States would refuse to tolerate a nuclear-armed Iran. Instead, he all but invited Iran to signal that it, too, is interested in talks. "Now it's time for Iran to send some signals that it wants to act differently, as well, and recognize that, even as it has some rights as a member of the international community, with those rights come responsibilities," he said.
The news conference ended a day of action on the stimulus package: Obama traveled to Elkhart, Ind., to promote the legislation as it made its way toward the Senate floor, clearing a procedural hurdle by a vote of 61 to 36 that set the stage for final passage today.
...Asked about a new proposal to establish a truth and reconciliation commission to investigate the potential misdeeds of the Bush administration, Obama demurred, saying he has not yet seen its details.
... Obama's remarks on partisanship -- a gridlock he once vowed to break as part of his signature campaign promise -- were perhaps most striking. ..."In terms of the historic record here, the Republicans were brought in early and were consulted. And you'll remember that, when we initially introduced our framework, they were pleasantly surprised and complimentary about the tax cuts that were presented in that framework.
...Obama swiftly dismissed claims of fiscal irresponsibility, saying: "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. I'm not sure they have a lot of credibility when it comes to fiscal responsibility."
...Obama will add a new twist when he travels today to Fort Myers, Fla.: He will be introduced at his town hall meeting by Gov. Charlie Crist, one of the few Republicans who are backing the plan in the face of conservative complaints about its size and scope and that it does not rely more heavily on tax cuts. Crist issued a joint statement with Obama yesterday in which he praised the president for continuing to "work hard to reignite the U.S. economy."




(Bloomberg) -- President Barack Obama signaled he would be open to seeking an expansion of the $700 billion financial-rescue program should the plan fail to restore stability to the U.S. banking system.
“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we’ve seen how successful we are at restoring a sense of confidence in the marketplace,” Obama said in a news conference last night in Washington.
Treasury Secretary Timothy Geithner today will announce an overhaul of the bank-bailout fund. The plan, which so far won’t seek additional government money, is designed to support about $1.5 trillion in new lending and handling of distressed assets. It has three main components: more capital for banks, financing for as much as $1 trillion of consumer and business loans, and public financing for investors willing to buy the distressed assets, people familiar with the matter said.
...“The financial system is working against recovery, and that’s the dangerous dynamic we need to change,” Geithner said in remarks prepared for delivery today. “Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged.”
Geithner, whose announcement is scheduled for 11 a.m. in Washington, will also rename the $700 billion TARP fund, which will be known as the Financial Stability Plan. Among the plan’s other components is $50 billion for measures to stem mortgage foreclosures, Republican and a Democratic congressional aides said after Treasury officials briefed lawmakers and staff members yesterday.
“We are going to have to work with the banks in an effective way to clean up their balance sheets so that some trust is restored within the marketplace,” Obama said in his first prime-time news briefing. At “any given bank they’re not sure what kinds of losses are there. We’ve got to open things up and restore some trust.”
...“The American people have lost faith in the leaders of our financial institutions” and are skeptical of the rescue spending so far, Geithner will say today.
...“To kick-start new lending, the Financial Stability Plan will expand a Federal Reserve program for consumer and business loans to as much as $1 trillion from the current $200 billion. The Term Asset-Backed Securities Lending Facility will be backed by as much as $100 billion of Treasury funds in case of losses.



Obama warning on Pakistan 'haven'
US President Barack Obama has said his administration will not allow "safe havens" for militants in Pakistan's tribal region bordering Afghanistan.
Mr. Obama's comments at his first White House prime-time news conference came as his envoy to the region, Richard Holbrooke, arrived in Pakistan.
Mr Holbrooke, who said he was there to "listen and learn" about the region, began key meetings on Tuesday.
Mr Holbrooke earlier said the situation in Pakistan was "dire".
..."My bottom line is that we cannot allow al-Qaeda to operate," he said. "We cannot have those safe havens in that region."
Mr Obama added: "We're going to have to work both smartly and effectively, but with consistency in order to make sure that those safe havens don't exist."
The US president said he had appointed Mr Holbrooke as a special envoy for Pakistan and Afghanistan to give a new focus to dealing with terrorism.
"I've sent over Richard Holbrooke - one of our top diplomats - to evaluate a regional approach," he said. "We are going to need more effective coordination of our military efforts with diplomatic efforts, with development efforts, with more effective coordination with our allies in order for us to be successful."
Mr Obama said he had no schedule for the withdrawal of US troops from Afghanistan.
"I do not have yet a timetable for how long that's going to take. What I know is... I'm not going to allow al-Qaeda or Osama Bin Laden to operate with impunity, planning attacks on the US homeland."
Mr Holbrooke met Pakistani Foreign Minister Shah Mehmood Qureshi on Tuesday and will later meet President Asif Ali Zardari and Prime Minister Yusuf Raza Gilani.
...The envoy is likely to restate the need for Pakistan to do more to tackle militants and express concern over the recent release of disgraced nuclear scientist AQ Khan from house arrest.
Pakistan in turn has repeatedly criticised US drone attacks on militants in its territory.
...Mr Holbrooke will stay in Pakistan until Thursday and is due to visit Afghanistan and India.


From Reuters UK


By Joseph Nasr
JERUSALEM (Reuters) - Israelis voted on Tuesday in a tight election race, with right-wing opposition leader Benjamin Netanyahu bidding to oust the centrist party of Foreign Minister Tzipi Livni.
The short campaign was overshadowed by Israel's January war with Palestinian militants in Gaza. The key issue facing voters is which leader can best assure the security of the state while chances of a peace deal seem remote.
Likud party leader Netanyahu, once a clear frontrunner in opinion polls, has lost ground to Livni since the 22-day war last month in which 1,300 Palestinians and 13 Israelis were killed. The two leaders were locked in a statistical dead heat.
Livni has led the stalled peace talks with Palestinians on a two-state solution which U.S. President Barack Obama wants to resume. Netanyahu has vowed not to cede Arab East Jerusalem, where Palestinians want to site the capital of a future state.
"It'll be a big day. We'll have a good victory," Netanyahu said in Jerusalem where he cast his vote.
Ultra-rightist Avigdor Lieberman, a potential spoiler for Netanyahu, has soared in the polls. His Yisrael Beiteinu party pledges to get tougher with Palestinians, including Israeli Arab citizens, and keep Jewish settlements in the occupied West Bank.
...Defense Minister Ehud Barak of the once dominant Labor party was trailing in fourth place, though his poll numbers have more than doubled since the Gaza war. He reminded voters that Labor was the only genuine left-wing party in the race.
...In Gaza, where 1,300 people were killed in the 22-day Israeli offensive, Palestinians said they were sure it would make no difference to their lives whoever wins the election. And in the occupied West Bank, from which Israel barred Palestinians traveling, there was similar indifference.
The election could be determined by how smaller parties do. Up to 15 percent of voters were undecided in the final days of campaigning, pollsters said. Some 5.3 million people are eligible to vote, in 9,000 polling stations nationwide.
"The trend we've seen the last few days indicates a very close battle," said pollster Rafi Smith of the Smith Research Center. "No one has jumped ahead and it's tough to call."
Israelis vote by party, and parliament seats are allocated by proportional representation to national party lists. The party with most votes usually is called to form the government.
...Prime Minister Ehud Olmert, the outgoing leader who quit in a corruption probe in September, would stay on as caretaker premier until a new cabinet is sworn in.
Foreign Minister Livni, 50, formerly of the Mossad intelligence agency, would be the first female prime minister since Golda Meir in the 1970s.
Netanyahu, 59, a former finance minister, and Barak, 66, a former general, have served previously as premiers.
....The left-leaning Haaretz newspaper said Netanyahu and Livni were not ideal candidates but threw its weight behind Livni given her support for the peace process with Palestinians --- "the most important issue at stake."
Underscoring the enduring conflict, Israel has closed the doors to the occupied West Bank, denying Palestinians entry to the country for the duration of the election, the army said. Some 16,000 police were deployed nationwide for extra security.

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