Tales from the Trail

First draft: Stimulus and tighter auto standards

After Republican leaders expressed doubts about the stimulus package over the weekend, President Barack Obama pushes forward this week with efforts to build public support for his $825 billion economic recovery plan.

The push comes as more bad news is expected on the economic front with many U.S. companies expected to report earnings this week.

Obama outlined his stimulus plan in his radio address on Saturday and he is due to talk about jobs, energy independence and climate change at the White House at 10:30 a.m. (1530 GMT).

The White House event should result in more Bush reversals. Administration officials said Obama will direct the Environmental Protection Agency to reconsider a request by California — which was denied under the Bush administration — to impose its own strict limits on automobile carbon dioxide emissions.

If the EPA reverses the previous ruling, more than 12 U.S. states could proceed with plans to impose strict CO2 limits. California wants to reduce emissions by 30 percent by 2016.

The First Draft, Monday, Dec. 22

President-elect Barack Obama may release a report Monday detailing the contacts between his staff and scandal-tainted Illinois Gov. Rod Blagojevich. 
 
ABC News says Obama is expected to release the report sometime Monday. The Washington Post says it is due out Monday or Tuesday. 
USA-OBAMA/ 
Blagojevich has been charged with trying to sell the Senate seat that was vacated by Obama after his election to the presidency in November. 
 
The governor has power to appoint someone to serve out the remaining years of the term. 
 
Obama’s staff finished the report last week but its release was held up at the request of the U.S. attorney who is investigating Blagojevich.
 
ABC said Sunday the report found that Obama chief of staff Rahm Emanuel spoke once with Blagojevich and four times with Blagojevich’s chief of staff, John Harris. ABC said the report cleared Emanuel of doing anything or saying anything wrong.
 
The fiery Continental Airlines accident in Denver, with a dramatic escape by passengers and crew, dominated the morning TV news. The icy U.S. weather ran a close second.
 
Temperatures weren’t a problem for the president-elect, who is relaxing in Hawaii for the holidays.
 
President George W. Bush has a holiday-related schedule Monday. He visits a project for the needy in Washington and later meets with wounded troops at Walter Reed Army Medical Center. 
 USA-BLAGOJEVICH/
Caroline Kennedy’s bid to become a senator was back in the news on morning TV. Kennedy is trying to win appointment to the U.S. Senate seat being vacated by Hillary Clinton, who is becoming Obama’s secretary of state.
 
New York Gov. David Paterson is considering a number of names, including the daughter of assassinated President John F. Kennedy. 
 
New York’s Republicans objected mightily to her consideration, with Rep. Peter King questioning her lack of political experience.
 
Stock futures were little changed Monday in what was expected to be a light trading week ahead of the Christmas holiday.
 
For more Reuters political coverage, click here.

Photo credit: Reuters/Hugh Gentry (Obama plays golf in Hawaii Sunday); Reuters/Jeff Haynes (Blagojevich at a news conference Dec 19)

The First Draft: Tuesday, Dec 16

USA-ECONOMY/

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. 
AIRLINES UNITED

The First Draft: Friday, Dec 12

BUSH/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.

Click here for more Reuters political news. 

REUTERS/Yuri Gripas (Bush on South Lawn)

Blagojevich corruption scandal becoming headache for Obama

The messy corruption scandal involving Illinois Gov. Rod Blagojevich is threatening to become a major headache for President-elect Barack Obama.
 
For a second day Wednesday, Obama was forced to respond to developments in the case involving Blagojevich, who was charged Tuesday with trying sell the U.S. Senate seat vacated by the president-elect after his victory in November.BLAGOJEVICH/INVESTIGATION
 
Blagojevich’s arrest dominated U.S. media, overshadowing congressional efforts to hammer out a $15 billion bailout package for the troubled auto industry and pushing Obama’s work to finish assembling his new Cabinet out of the limelight.
 
Editorial pages expressed amazement at Blagojevich’s evident brazenness in his desire to make money out of the opportunity to fill Obama’s Senate seat.
 
“We have seen a lot of political hubris, scratch-my-back politics and sheer stupidity over the years,” The New York Times editorialized. “But nothing could prepare us for the charges brought Tuesday against Gov. Rod R. Blagojevich of Illinois.”
 
The charges raised questions about how Obama’s Senate seat could be filled without the taint of the pending criminal case.
 
Obama joined other politicians Wednesday in calling for Blagojevich to resign, and he backed the idea of having the Illinois Legislature call a special election to fill the post.
 
“The president elect agrees … that under the current circumstances it is difficult for the governor to effectively do his job and serve the people of Illinois,” Obama spokesman Robet Gibbs said in an email.
 
It was the second time in as many days that Obama has tried to put distance between himself and his fellow Chicago Democrat. On Tuesday he denied having talked to Blagojevich about the Senate seat.
USA-OBAMA/
But the president-elect declined to say whether aides might have spoken to the governor or his staff, adding that it would be inappropriate to discuss the case further since it is under investigation.
 
Prosecutors said there was no indication at all of any Obama involvement.
 
But the scandal refused to go away. Obama adviser David Axelrod had to issue a statement retracting his comment last month that Obama had spoken to Blagojevich about the Senate seat, saying he had been wrong.
 
And news reports Wednesday said associates of Rep. Jesse Jackson Jr. of Illinois, one of Obama’s national campaign co-chairs, may have discussed the Senate seat with Blagojevich.
 
Jackson denied any wrongdoing. “I did not initiatiate or authorize anyone at any time to promise anything to Gov. Blagojevich on my behalf. I never sent a message or an emissary to the governor to make an offer, to plead my case or to propose a deal about a U.S. Senate seat,” he told a news conference.
 
What do you think? Is Obama being hurt by the Illinois corruption case? Will this cause problems for his first days in office?
 
For more Reuters political news, click here.

Photo credit: Top: Reuters/John Gress (Blagojevich, left, Obama and Chicago Mayor Richard Daley during a rally in Chicago in April 2007); Bottom: Reuters/Jeff Haynes (Obama talks to media at his transition office office Dec. 9)

The First Draft, Wednesday, Dec. 10

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.

For more Reuters political news, click here.