For a quiet day, there was surprising consensus among editors about the top news — big-time bankers who got government bailout money are going to get their paychecks slashed.

The coverage was fairly straight, but there was a certain glee about the way the story made its way to the top spot in most newspapers.

“Pay slashed at bailout firms,” the Wall Street Journal headlined its story.

“U.S. will order pay cuts at firms with bailout aid,” The New York Times  said.

“Obama ‘pay tsar’ to order deep cuts,” the Financial Times reported.

The networks were less charitable. CBS’s “The Early Show” flashed the headline “Big cuts for big shots” during its report, while ABC’s “Good Morning America” flashed the headline “Payback: Government to limit exec. salaries.”

According to unnamed Obama administration officials cited in most of the stories, the president’s adviser on executive compensation, Ken Feinberg, will soon recommend a plan that would cut overall compensation in half and would slash cash salary payouts by an average 90 percent.

The plan would apply to those big banks and auto firms that received large amounts of bailout money from the federal government.

The bailout was extremely controversial with the public and triggered public anger after it was revealed that employees at some of the firms were continuing to draw multi-million dollar salaries and huge bonuses.

Under Feinberg’s plan top earners at AIG’s financial products unit, which was blamed for risky bets that threatened the stability of the insurer, would not get more than $200,000 in individual pay.

The unit became a symbol of Wall Street insensitivity after AIG decided to pay employees in the unit $165 million in retention bonuses despite having taken $180 billion in taxpayer funding.

Critics of the bailout welcomed Feinberg’s plan to crack down on soaring executive pay.

“The public has a lot of questions about whether or not these dollars that were given to banks were wasted and whether or not they were squandered on bonuses and, you know, high executive compensation,” Ryan Alexander of Taxpayers for Common Sense told CBS News.

But others expressed concern that government decisions to hold down pay could lead to an exodus of top talent from the firms.

“Now that politicians have gotten the taste for trying to control the pay at some firms, what’s to stop them from imposing those rules on everyone,” Dan Mitchell, a senior fellow at Cato Institute, told CBS.

He told ABC’s “Good Morning America” the decision could lead to top positions at the companies being occupied by “second rate people” and reduce the dynamism of the U.S. economy.

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Photo credit: Reuters/Keith Bedford (Protest in New York’s Times Square last year over government bailout of financial industry)

President George W. Bush threw a lifeline to the U.S. auto industry Friday.
 
The president announced a $17.4 billion government loan program for two ailing U.S. carmakers and gave them until March 31 to prove they can become viable.
 
“There’s too great a risk that bankruptcy now would lead to a disorderly liquidation of American auto companies,” Bush said in an address from the White House.
 
“My economic advisers believe that such a collapse would deal an unacceptably painful blow to hardworking Americans far beyond the auto industry.”
 
The U.S. stock markets opened higher on the news. Some of Bush’s fellow Republicans in Congress, who helped kill a recent bailout effort there, expressed frustration.
 
Rep. Tom Price of Georgia said it was “deeply disappointing that the administration has chosen to use taxpayer dollars to delay the inevitable need to fundamentally restructure these companies.”
 
The Bush announcement came as President-elect Barack Obama was getting ready for his fifth news conference in as many days.
 
The Democratic president-elect is expected to announce his picks for labor secretary, transportion secretary and U.S. trade representative at the 2:15 p.m. EST conference.
 
Retiring Illinois Rep. Ray LaHood, a Republican, is being tapped as the transportation secretary. Former Dallas Mayor Ron Kirk, a partner at a Houston law firm, is the trade representative, and California Rep. Hilda Solis is the labor secretary choice.
 
Morning television focused on the severe weather across parts of the country and the death of Mark Felt, the former FBI official who was the mysterious “Deep Throat” source for Washington Post reporters during the Watergate investigation.
 
Felt, the No. 2 official at the FBI at the time, provided guidance to reporters Bob Woodward and Carl Bernstein as they pieced together the scandal that ultimatedly prompted the resignation of President Richard Nixon.
 
Felt, who was 95, kept his role in the story a secret for 30 years, finally making his part known in a 2005 Vanity Fair article written by his family lawyer. The New York Times called him “the most famous anonymous source in American history.”

Meanwhile, Bush attended the unveiling of his portrait at the Smithsonian’s National Portrait Gallery.

“I suspected there would be a good-size crowd,” he said, “once the word got out about my hanging.”

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Photo credit: Reuters/Jim Young (Bush at unveiling of his portrait at National Portrait Gallery); Reuters/Lou Dematteis (Felt at his home in 2005)

President-elect Barack Obama is almost done with his first chore.

Obama, who takes office on Jan. 20, holds a news conference in Chicago on Wednesday to announce he has picked former Iowa Gov. Tom Vilsack to head the agriculture department and Colorado Sen. Ken Salazar as interior secretary.

With those selections, Obama moves closer to filling the last of the Cabinet posts in his administration, with nominees for transportation, labor and U.S. Trade Representative still to be named. 

It is a rapid pace for the next president, who has moved faster than his recent predecessors in making Cabinet selections. He hoped to have most of them out of the way before he heads to Hawaii on vacation at the end of the week. 

Detroit’s Big Three automakers hope Bush administration officials move as fast, as they wait for word on a bailout that could keep them solvent. 

Senior Democratic lawmakers said on Monday they expected action from the Bush administration as early as Wednesday on financing that would likely take the stricken companies through early 2009. 

But the administration said on Tuesday a decision was not imminent. The Senate failed last week to approve a $14 billion bailout package for Detroit, leaving the Bush administration as the only option for immediate help.

The network morning news shows were filled with talk about the cold and wintry weather hitting large stretches of the country and the resolution in Florida of one of Americas’s best-known unsolved crimes –  the kidnap and killing 27 years ago of Adam Walsh, the 6-year-old son of John Walsh, who led a movement to protect children from predators and became a leading voice for missing children.  Florida police announced the killer was Ottis Toole, a longtime suspect who died in prison in 1996.

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REUTERS/Kimberly White (former Iowa Gov. Tom Vilsack)

REUTERS/Larry Downing (Colorado Sen. Ken Salazar)

REUTERS/Chip East (Snow in New York City)

The futures of Detroit’s reeling Big Three automakers and Illinois’ disgraced Gov. Rod Blagojevich hovered in a sort of suspended animation on Tuesday, with both awaiting final word of their fates. 

The carmakers have hope. Blagojevich’s hopes may be running out.
 
Illinois lawmakers approved an inquiry on Monday into whether Blagojevich should be impeached on charges he tried to sell the U.S. Senate seat vacated by President-elect Barack Obama. The state’s attorney general has gone to court to have him removed.

But Blagojevich has denied doing anything wrong and shown no willingness to resign his $177,000-a-year post. 

The Democratic-led House shelved a bill, backed by Republicans, to hold a special election in April to elect a new senator to replace Obama. The body then adjourned until Jan. 12, leaving the 21-member impeachment committee to meet through the holidays, if necessary. 

The carmakers hope they won’t have to wait that long, with lawmakers and other sources saying the Bush administration could act as early as Wednesday to approve their bailout from the $700 billion fund established in October to stabilize the financial services sector. 

The duel dramas in Illinois and Detroit have overshadowed the presidential transition of Obama, who is nearing completion on his Cabinet selections before he heads to Hawaii for the Christmas holidays at the end of the week.

 
Obama will hold another news conference at 11:45 a.m. EST (1645 GMT) on Tuesday to announce he has chosen Chicago superintendent of schools Arne Duncan to be his nominee for secretary of education. 

He also will meet with members of his economic team, including his nominee for treasury secretary and his pick to run the National Economic Council.

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Photo credit: Reuters/Carlos Barria (Chrysler trucks); Reuters/Scott Olson (File photo of Illinois Gov. Blagojevich); Reuters/Steven Carrera (Obama speaks at news conference)

Gulp.
    
Senate brinksmanship kills a proposed $14 billion bailout for Detroit’s struggling “Big Three” automakers, so eyes turn back to the White House. 
    
The Senate is due back in session at 10 a.m. Eastern for what could be a quick round of final recriminations.
    
Analysts say the most immediate hope for help for GMC, Chrysler and Ford is now the Bush administration, which could possibly decide to use financial bailout funding to help the massive car manufacturers — if there’s any money left.
    
Bush, who had resisted this idea in the past, is headed to Texas A&M University where he is due to deliver a commencement address. The White House said this morning it was willing to consider steps to avoid an auto apocalypse.
    
There’s finger pointing in every direction — the UAW union, recalcitrant Republicans, overreaching Democrats, and the lame-duck White House — but nobody seems sure what happens next for companies which say they are responsible for one out of 10 U.S. jobs.
    
Stock futures were down, indicating that benchmark U.S. indexes could open down about 3 percent or more amid a worldwide sell-off. 
    
Meanwhile, whatever attention is left is fixed firmly on Illinois Gov. Rod Blagojevich, who is still in office three days after being charged with corruption in connection with allegations that he sought to “sell” the vacant U.S. Senate seat of President-elect Barack Obama.
    
Lots of people seem to want the man out — Obama described himself as “appalled” — but there’s no word on whether Blagojevich  intends to resign. Obama, who has sought to distance himself from the Democratic governor, has no public events scheduled today.

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REUTERS/Yuri Gripas (Bush on South Lawn)

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It’s a tale of two cities, Washington D.C. versus Chicago.
 
With President-elect Barack Obama holding frequent news conferences in Chicago to appoint members of his cabinet and lay out his plans for the future and President George W. Bush keeping a low profile in Washington, Americans could be forgiven for thinking they have a new executive capital.

Today the focus will be on both Washington, where a $14 billion bill to bail out the United States’ struggling automakers will be debated in the Senate, and Chicago, where Obama will announce former Senate leader Tom Daschle as the country’s next health secretary.
 
Obama is due to hold a news conference at 11 a.m. EST (600 GMT) to name Daschle, a Democrat from South Dakota, and give more specifics about his plan to provide affordable healthcare to all Americans. Daschle faces the Herculean task of revamping America’s ailing healthcare system.
 
A new Wall Street Journal/NBC news conference  poll found that 73 percent of adult Americans approve of the way Obama has handled his preparations for becoming president on Jan. 20, while 38 percent say they have a more favorable impression of him since the Nov. 4 election.
 
Obama is likely to face more questions at the news conference on the scandal involving Democratic Illinois Gov. Rod Blagojevich, who was arrested on Tuesday and charged with attempting to sell Obama’s Senate seat. Obama has called on the governor to resign.

Illinois’s Lieutenant-Governor Pat Quinn told NBC’s Today breakfast television show that Blagojevich would be impeached if he did not resign. Quinn, who is next in line to replace Blagojevich, said he had not spoken to the governor since the summer of 2007.
 
In Washington, the Senate is due to debate a proposal giving $14 bln in emergency loans to struggling auto-makers after it was passed in the House of Representatives by 237-170 votes on Wednesday night. But it is expected to face stiff opposition from skeptical Republicans who want greater accountability from the carmakers in exchange for the loans.
 
Democrats in Congress and the White House want the measure passed urgently, fearing that the collapse of the auto industry would fuel unemployment and deepen the recession.
 
The U.S. Labor Department reported on Thursday that the number of workers filing claims for jobless benefits jumped to a 26-year high last week. Data last week showed employers cut half a million jobs in November, the largest number in 34 years.
 
But it was not all doom and gloom on the morning TV shows, which perhaps not surprisingly, found time to show pictures of the January 2009 cover of men’s magazine GQ. The cover shows a naked Jennifer Aniston wearing just a necktie.

REUTERS/Jeff Haynes (Obama at a news conference)

REUTERS/Kevin Lamarque (Bush speaks at Naval Academy)

There’s nothing like a sexy political sleaze story, especially one ridden with “f—ing” expletives, to distract from the plight of the United States’ ailing auto industry.
 
A $15 billion rescue package for the industry may be voted on in the House of Representatives today after the White House and congressional Democrats reached an agreement in principle late on Tuesday night.
 
But morning TV shows paid the bailout scant attention as they replayed U.S. Attorney Patrick J. Fitzgerald’s news conference announcing that he was charging Illinois Gov. Rod Blagojevich with corruption over, among other things, an alleged plan to sell the Senate seat vacated by President-elect Barack Obama.
 
Not surprisingly Blagojevich’s use of expletives in conversations taped by the FBI featured prominently, “Bleep ‘em,” Fitzgerald quoted the governor as saying in one conversation. “And the word ‘bleep’ was not the word he used,” he added helpfully, just in case there was any doubt.
 
Back in Washington, the House of Representatives Financial Service Committee will hold a hearing at 10 a.m. EST on how the Treasury Department has handled the $700 billion Troubled Assets Relief Program, or TARP.
 
The Wall Street Journal reported that a congressionally appointed panel that oversees TARP is expected to release a report highly critical of how it has been handled.
 
Acting Comptroller General Gene Dodaro of the Government Accountability Office and Neel Kashkari, the Treasury Department point man on the financial rescue package, will testify.
 
Wall Street is seen opening higher, with shares of automakers expected to remain in focus. But there was more grim econmic news. A new survey said the economy was likely to shrink 1.1 percent next year as job losses mount.

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Tis the season to be, er, generous with taxpayers’ money.

The White House and Democrats in Congress are busy putting the finishing touches to a whopping $15 billion Christmas present for the U.S. auto industry. The two sides have been haggling for several days over the terms of the bailout to rescue the “Big Three” Detroit car manufacturers but are now reported to be close to agreement.

 House of Representatives Speaker Nancy Pelosi told NBC’s “Today” breakfast television show that if Congress approved the agreement a “car czar” charged with restructuring the industry could be appointed as soon as this week. She said she favored former Federal Reserve Chairman Paul Volcker for the post although he may already have his hands full — President-elect Barack Obama has named him as his senior adviser on jolting the economy out of recession.

 Obama has been critical of the Bush administration’s efforts to tackle the mortgage foreclosure crisis that has seen hundreds of thousands of Americans lose their homes. The issue will be under the spotlight at 10 a.m. EST (1500 GMT), when the House of Representatives Oversight and Government Reform Committee holds a hearing on the role of mortgage giants Fannie Mae and Freddie Mac in the financial crisis.

 More gloomy housing data may come from the National Association of Realtors, which issues its Pending Home Sales Index for October and monthly Housing Forecast at 10 a.m. EST (1500 GMT).

U.S. Secretary of State Condoleezza Rice travels to Panama City on Tuesday for a one-day meeting of foreign and commerce ministers that have negotiated free-trade deals with the United States. It will be attended by ministers from Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Panama and Peru.

 But the political meeting likely to grab the most media attention on Tuesday will be taking place in Chicago, where Obama is due to meet Nobel laureate and former Vice President Al Gore to discuss energy and climate change.

Obama and Gore, who has indicated he is not interested in a position of climate “czar” or any cabinet post, will talk about how energy and climate policies can stimulate the economy and create jobs, a statement from Obama’s office said.

Washington is focused on one issue this morning — how to stop the U.S. auto industry from driving off a cliff.
 
The Senate reconvenes on Monday, and congressional aides say it may consider as early as Tuesday legislation on a $15 billion deal to rescue America’s “Big Three” automakers from oblivion.
 
Democratic negotiators in Congress modified their draft proposal on Sunday, a congressional aide said, and planned to get it to the White House for consideration.
 
The New York Times and Washington Post reported that Democrats were considering creating an oversight board made up of five cabinet secretaries and the head of the Environmental Protection Agency and led by an independent chairman or “car czar”.
 
The board would oversee the restructuring that the car giants have agreed to in exchange for the short-term loans. The Post said the board would develop broad restructuring goals for the companies but could not compel them to act.
 
Investors appeared confident on Monday that the automakers will be thrown a financial lifeline. Shares of General Motors shot up 22.5 percent to $5 before the bell, and Ford shares climbed 19.5 percent to $3.25.
 
U.S. stock index futures also rose on hopes that President-elect Barack Obama’s plan for major infrastructure investment will help get the economy back on its feet.  

Elsewhere in Washington, President George W. Bush will attend a Christmas reception for children at the White House before visiting the National Counterterrorism Center in McLean, Virginia.

With the images of death and destruction in Mumbai last week fresh in everyone’s minds, U.S. President-elect Barack Obama is set on Monday to name his national security team. 
 
At a 10:40 EST (1540 GMT) news conference in Chicago, Obama is expected to name former rival Hillary Clinton as his secretary of state and nominate Defense Secretary Robert Gates to stay on in that role. In addition he is expected to name Arizona Gov. Janet Napolitano as homeland security secretary, Eric Holder as attorney general and adviser Susan Rice as ambassador to the United Nations.
    
After a series of three straight news conferences last week focused on the ailing U.S. economy, Obama will switch gears today as he will likely face questions about India and Pakistan and his proposed policies toward the two nuclear-armed nations.     
    
U.S. Secretary of State Condoleezza Rice will travel to India on Wednesday. She has been in contact with the foreign ministers of India and Pakistan in recent days to ease tensions between the states.

    
Indian investigators said the militants who attacked Mumbai underwent months of commando training in Pakistan, raising tensions between the neighboring nations as recriminations mounted in India. 

In an interview with the Financial Times , Pakistan President Asif Ali Zardari has appealed to India not to punish his country for the Mumbai attacks, saying militants have the power to precipitate a war in the region.
    
In economic news back home, stocks appeared set to fall after poor manufacturing figures from China and a raft of economic data expected in the U.S. this week.

Though retailers reported a solid start to holiday shopping with consumers spending more on bargains over the Thanksgiving weekend, overall holiday sales are likely to be worse than thought.

The Big Three U.S. automakers will try a second time this week to pursuade Congress to give them $25 billion to rescue their struggling industry. The Financial Times reported that GM, which owns Saab, and Volvo-owner Ford had approached Sweden’s government for financial help.