It’s on front pages, news shows and all over the Web: outrage at the bailout of AIG, the troubled insurance giant that — so far — has gotten $173 billion in U.S. taxpayer money and has given out $165 million in bonuses to the very executives who brought the company to its knees.

A quick Web search of “AIG outrage” for March 2009 gets 190,000 hits, ranging from Al Jazeera (”Outrage against AIG set to mount”) to USA Today (”AIG bonus outrage plays Treasury officials for saps”). Part of the outrage stems from the Obama team’s contention that there’s nothing they can legally do to stop these bonus payments.

Barney Frank, a Massachusetts Democrat who heads the House Financial Services Committee, came up with a plan in an interview on NBC’s “Today”: AIG’s execs can keep their bonuses but they don’t have to keep their jobs. “These people may have a right to their bonuses but they don’t have a right to their jobs foever,” is how Frank put it.

At the White House, President Barack Obama and Treasury Secretary Timothy Geithner are set to talk with small business owners about a plan to make it easier for them to borrow money.

Outside the Beltway, the mood turns from outrage to madness — the college basketball kind of madness that comes in March when the NCAA unveils its tournament field. The national championship is April 6 in Detroit.

Photo credits:
The American International Group building in New York, March 2, 2009 file photo. REUTERS/Shannon Stapleton/Files

Duke’s guard Jon Scheyer (R) passes under the basket as Florida State guard Jordan DeMercy defends during men’s NCAA basketball action in Atlanta, Georgia March 15, 2009. REUTERS/Tami Chappell

One decent laugh line in President Barack Obama’s address to Congress had to do with Vice President Joe Biden and his new assignment in the financial crisis. Obama gave Biden the task of overseeing the recovery process. The Capitol Hill audience broke up when the president announced Biden’s new task:

“With a plan of this scale comes enormous responsibility to get it right and that’s why I’ve asked Vice President Biden to lead a tough, unprecedented oversight effort, ’cause nobody messes with Joe.”

That was last night. This morning, Biden made the rounds of the morning talk shows. On NBC’s “Today” program, he said his wife Jill — shown in the gallery during Tuesday’s nationally televised speech — was skeptical about the “nobody messes with Joe” line. But then he got down to business, telling the “Early Show” on CBS television that his first move is to meet with Cabinet members “to make sure I know specifically … what resources they have available, how they’re going to distribute those resources, how we’re going to follow the money.”

It’s a full day at the White House, with Biden’s recovery meeting followed by a late morning news conference by Obama to introduce former Washington state Governor Gary Locke as the new nominee for commerce secretary (the two previous nominees, New Mexico Governor Bill Richardson and Republican Senator Judd Gregg of New Hampshire, withdrew their names from contention).

Then the president meets with Treasury Secretary Timothy Geithner and the top banking honchos from Capitol Hill in the Oval Office, and he’s scheduled to make remarks about the meeting in late afternoon. In the evening, Obama and first lady Michelle Obama host Stevie Wonder at a White House honoring the pop music great, who is to receive the 2nd annual Gershwin Award for Lifetime Achievement from the Library of Congress.

Photo credit: REUTERS/Pablo Martinez Monsivais/Pool (President Obama addresses Congress, as Vice President Joe Biden and House Speaker Nancy Pelosi applaud, February 24, 2009)

When Treasury Secretary Timothy Geithner made his long-awaited speech on Tuesday to unveil the administration’s bank rescue plan, the stock market tanked. Traders said the nearly five percent drop was caused by a lack of specifics in Geithner’s announcement that the government would spend up to $2 trillion to mop up bad bank assets and revive lending.

The main newspapers had banner headlines about the biggest one-day drop for Dow industrials since Dec. 1.

So what will happen today when Geithner heads to Capitol Hill to testify before the Senate Budget Committee? The market will also be watching as top Wall Street CEOs appear in a hearing with the House Financial Services committe to defend their use of $176 billion in taxpayer funds.

President Barack Obama continues his push for the $800 stimulus bill outside of Washington, traveling today to nearby Springfield, Virginia to talk about how jobs will be created with the new plan.

Meanwhile, his emissaries push forward in their efforts to help lawmakers on Capitol Hill hammer out a compromise agreement between the House and Senate versions of the stimulus bill. Obama wants to have the final version on his desk by Feb. 16.

On a lighter note: morning talk shows are all raving about top dog Stump — a mellow, 10-year-old Sussex spaniel who made history as the oldest dog to win “Best in Show” at the Westminster Kennel Club Dog Show. Stump showed that age was no boundary — he came out of retirement and overcame a long illness to win the coveted award at the dog show.

For more Reuters political news, click here.

-Photo credit: Reuters/Eric Thayer (Boards on the floor of the New York Stock Exchange on Feb. 10);  Reuters/Shannon Stapleton (Stump sits with handler after winning Westminister Dog Show)

A trillion dollars is a million million dollars or 12 zeros after the one.

And that’s how much apparently every program costs to save the U.S. economy these days.

Treasury Secretary Timothy Geithner outlined what he called “a new financial stability plan” to help restart the flow of credit, strengthen banks, and  “provide critical aid for homeowners and for small businesses.”

His proposal included a program in which the FDIC, the Federal Reserve, and the private sector would establish a fund, using government financing, to deal with bad assets weighing on financial firms.

“We believe this program should ultimately provide up to $1 trillion in financing capacity, but we plan to start it on a scale of about $500 billion, and we will expand it based on what works,” Geithner said.

Another piece of his plan would commit up to $1 trillion (there’s that number again) to support consumer and business lending with the Treasury and Federal Reserve working together to “kick-start the secondary lending markets.”

All that is separate from the economic stimulus legislation being fought over on Capitol Hill right now,  which is running about $800 billion (add $200 billion and that’s another trillion). 

Geithner, who came to the job with a bit of a tax issue in his past, showed that he was well aware of the math for his proposed economic rescue programs.

“Now, many of the programs I’ve discussed involve very large numbers,” he said.

And again.  “But I want to be candid:  This strategy will cost money, it will involve risk, and it will take time.”

“But as costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families and for businesses and for our nation,” he said.

Click here for more Reuters political coverage

Photo credit: Reuters/Jim Young (Geithner unveils financial rescue plan)

White House press secretary Robert Gibbs made the rounds of the morning television talk shows today to reiterate what his boss said last night in his first presidential news conference: Congress must pass an economic stimulus package to help avoid dire consequences.

Gibbs said on NBC’s “Today Show” that Obama was willing to “do whatever it takes, with Democrats or Republicans to make sure that he gets something on his desk quickly that gets help to the hands of the American people.”

Obama continues his road show today, traveling to Florida where he is expected to focus heavily on the home foreclosure crisis that’s hit the United States — particularly hard in Ft. Myers, Florida .

While he travels the Senate is due to hold a final vote on the $838 billion stimulus bill around noon. If the bill passes, as expected, the House and the Senate will start negotiating a final compromise deal.

While Obama’s away his treasury secretary, Timothy Geithner will lay out the administration’s new plan to stabilize the financial sector.

Gibbs refused to give any details of the plan, deferring to Geithner who will speak at 11 a.m. EST (1600 GMT).

But many details of the plan have already leaked out. Sources have said Geithner will lay out a rescue plan that will rely on public and private funds to take $500 billion of bad assets off banks’ books. The plan would also expand a Federal Reserve program that aims to ease credit to consumers and small businesses to $1 trillion.

Baseball’s Alex Rodriguez made the front page of many newspapers — including a big photo in the Wall Street Journal — for admitting he took banned drugs while playing for the Texas Rangers from 2001-2003.

The first fan was asked about A-Rod’s admission last night and he called it “depressing” and said the news tarnishes an entire era in baseball.

For more Reuters political news, click here.

- Photo credits: REUTERS/Kevin Lamarque (White House Press Secretary Robert Gibbs at a White House briefing)  REUTERS/Fred Thornhill (Alex Rodrigeuz during a game against Torotno in August)

Tom Daschle doesn’t want to be a distraction. Nancy Killefer doesn’t want to be a distraction. Timothy Geithner has already been a distraction.

What these three high-profile nominees to President Obama’s White House have in common, besides not wanting to be distractions, is that they apparently don’t know how to do their taxes. Daschle, the former senator and Obama’s choice for health secretary, and Killefer, a former assistant Treasury secretary and nominee to oversee the government’s budget, have withdrawn their nominations because of tax indiscretions. Geithner has been confirmed but his path to the top of Treasury was also marred by tax troubles that some fear may come back to haunt him.

Besides begging the question why do smart people not know how to do their taxes, it also throws a shadow over Obama’s quest to have a fast, smooth transition to power.

The real question is whether nominees should withdraw their nominations when tax troubles surface. If the transgression isn’t enough to throw them in jail, why should they lose the opportunity to serve in the White House?

It is said that death and taxes are the two things in life that one cannot avoid.

So when not one, not two, but three of President Barack Obama’s picks for his new administration turned up with tax problems, it raised questions about how people in the higher echelon of government managed to make such a mess of their annual obligations.

Some non-profit citizens groups say it’s the classic case of different standards for the “haves” and the “have nots”.

“If you make a mistake they come down on you like a hammer; these people apparently not. I guess it’s OK when you’re rich,” Leslie Paige, spokeswoman for Citizens Against Government Waste, said.

Timothy Geithner, former president of the New York Federal Reserve Bank, won Senate confirmation as U.S. Treasury secretary despite failure to pay some taxes.

Tom Daschle, a former Senate majority leader, paid about $140,000 in back taxes for making mistakes on tax returns. He withdrew from being considered as health secretary on Tuesday.

Daschle’s action followed on the heels of Nancy Killefer withdrawing from the nomination to be deputy director of the Office of Management and Budget because of a tax issue. She was a former Treasury official and former chair of the Internal Revenue Service oversight board.

The professional backgrounds of the three nominees left people scratching their heads over how it was possible they could have made such mistakes on their taxes.

Paige saw it as symbolic of the disconnect between the powerful and the average person in handling the labyrinth of “kafkaesque” tax laws.

“People in an elite situation, they game that situation, and they can afford to game it,” she said. “There’s a sense the tax system is to be avoided, and if you have enough lawyers and accountants you can avoid it.”

Pete Sepp, spokesman for the National Taxpayers Union, said Geithner’s tax problem was the most serious of the three.

“Granted, wealthier individuals tend to have more complicated financial situations but that’s why they hire high priced accountants,” Sepp said.

For more Reuters political news, click here

Photo credit: Reuters/Jeff Haynes (Obama and Daschle at news conference in Chicago)

WASHINGTON - Don’t rub your eyes. Despite the early hour, you weren’t seeing things when White House Press Secretary Robert Gibbs somehow managed to be in two places at once.

He showed up on ABC and NBC morning television shows at the same time to talk about how President Barack Obama has no hard feelings toward Republicans who refused to vote for the economic stimulus, and in fact had them over to the White House last night for a cocktail party among other guests.

It was a neat trick, Gibbs being questioned on different channels by different TV personalities about the same issue at the same time.

The party must have made for some interesting conversation over drinks, or perhaps it was all smiles since Obama got the bill passed and Republicans had their (no) say.

More bad economic news. U.S. weekly jobless claims rose by 3,000 to 588,000 and U.S.  durable goods orders posted another decline in December, falling 2.6 percent.

Obama to meet with Treasury Secretary Timothy Geithner this afternoon. Economic concerns dominate the Washington landscape. The Federal Reserve can’t cut interest rates much more or it would have to pay banks to take money.

 And one word on the health front from the FDA - Peanuts. Throw out anything made with peanuts processed by Peanut Corporation of America in Georgia over the last two years.

For more Reuters political news, click here

Photo credit: Reuters/Jason Reed (Obama walks with Gibbs between meetings with Republicans on Capitol Hill)

For the second Tuesday in a row, President Barack Obama heads up to Capitol Hill. Last week it was to be inaugurated. Today it’s to woo Republican lawmakers and try to build momentum for the $825 stimulus package.

Faced with growing economic problems, as more big companies lay off workers and troubles mount in the housing and financial sectors, Obama will meet with House and Senate lawmakers to build support before debate begins on Capitol Hill on the stimulus package.

He will have separate meetings with the House Republicans and Senate Republicans in the early afternoon. The White House says the meetings are to “seek input” on the stimulus plan. The House and Senate are expected to approve the package by the middle of next month regardless of whether Republicans embrace it.

The Congressional Budget Office issued a report late on Monday saying the stimulus package falls billions of dollars short of Obama’s goal to pump most of the money into the economy quickly.

Timothy Geithner, who was approved by the Senate as Treasury Secretary, was sworn in on Monday night and he vowed quick action to help fix the economy.

On the morning talk shows: A California woman will now have to feed and dress one extra baby. She shocked doctors — who had expected her to have seven babies – by giving birth to octuplets.

For more Reuters political news, click here.

- Photo credit: Reuters/Larry Downing (Geithner’s wife Carole watches as he is sworn in as Treasury Secretary)

The inauguration celebrations are over and the clean up begins as Barack Obama prepares for his first full day of work. 

It’s a big job. The recession shows no signs of easing and Wall Street ushered in the new presidency with a record Inauguration Day slide. Obama’s choice for treasury secretary, Timothy Geithner, will likely be asked at his Senate nomination hearing about the state of the economy and the new administration’s plans to shore up banks sagging under the burden of bad investment decisions.

Obama’s first day in the Oval Office is expected to be busy. He begins with the National Prayer Service at the National Cathedral and plans an open house for the public at the White House in the afternoon. He will also meet with economic advisers to discuss his proposed economic stimulus plan and proposals for dealing with bad bank assets.

Obama will also meet with Defense Secretary Robert Gates and other military advisers.

Major newspapers and morning talk shows full of stories about the inauguration and the record crowd that braved the cold to witness history. A lot of discussion about Michelle Obama’s wardrobe as well.

Photo credit: Reuters\Jason Reed  (First Lady Michelle Obama pulls up the train of her dress dancing with her husband on inauguration night)