Tales from the Trail

President Obama makes no small plans. One day after announcing the biggest budget deficit since World War Two, Obama flies to a Marine base in North Carolina to announce a withdrawal timetable for troops in Iraq.

Obama envisions an end to combat operations by August 2010, though a force of around 50,000 will remain. That’s too many for House Speaker Nancy Pelosi, a fellow Democrat, but former Republican presidential rival John McCain thinks it’s about right.

The Iraq news should provide a welcome change of focus from the economy, which continues to be terrible. Government data showed the U.S. economy contracted more sharply than estimated in the fourth quarter, with gross domestic product falling at an annual rate of 6.2 percent. The Treasury Department has said it will convert its $25 billion stake in Citigroup to regular shares, giving it 36 percent ownership of the troubled banking giant. Citi’s shares are down 19 percent in premarket trading.

What about the other troubled banking giant? Bank of America CEO Ken Lewis flew to New York yesterday so state attorney general Andrew Cuomo could press him to release a list of employees who got bonuses in 2008. Lewis said he cooperated, but the AG’s office said otherwise.

How did Lewis get to the meeting? He flew in a $50 million private jet, according to ABC News.

After a day of foreign policy, attention returns to the economy on Friday.

President Barack Obama and Vice President Joe Biden will meet with Democratic and Republican congressional leaders to talk about the economy. They will also hold a budget meeting and Obama will meet with Treasury Secretary-designate Timothy Giethner who won backing from the Senate Finance Committee on Thursday.

One of Obama’s concerns has been to make sure CEO pay stays in check. A big item in the news today is that former chief executive of Merrill Lynch John Thain — once a darling of Wall Street for selling Merrill to Bank of America — was ousted from the bank, which has been promised a $20 billion captial injection from the government.

Many of the morning television shows focused on Thain’s rampant spending decorating his office. News organizations are calling “corporate pig out” for spending more than one million dollars on redecorating. One example: an $87,000 rug. He also speeded up the payment of bonuses to Merrill executives just before the merger closed with Bank of America.

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- Photo credit: Reuters/Punit Paranjpe (Thain at news conference in Mumbai in May)