The Los Angeles Timesleads, and the New York Times off-leads, on the Pentagon's unexpected decision to award a $40 billion contract for aerial refueling tankers to a U.S.-European partnership between Northrop Grumman and Airbus rather than to Boeing. The NYT and the Wall Street Journal lead with news from Wall Street, where a series of negative economic and financial reports sent shares tumbling. The Washington Post leads local, reporting on the Virginia Supreme Court's ruling that a regional transport authority has no legal right to impose taxes to fund transit projects.
The Air Force says that its decision to pass over Boeing for a massive air-tanker contract was a no-brainer, with the Northrop-Airbus proposal offering better value and better performance across the board. Still, the decision riled many who believe military hardware ought to be entirely homegrown: "This isn't an upset," one analyst gasped to the NYT. "It's an earthquake." The Post reports that the Pentagon took painstaking efforts to ensure its selection process would withstand scrutiny—essential not least because, as the WSJ notes, previous plans to award a similar contract to Boeing were shelved after negotiations were found to have been conducted illegally. A protracted congressional battle is now expected; the LAT reports that both Boeing and Northrop have already spent hundreds of thousands of dollars hiring lobbyists to argue their case.
Things are looking bleak on Wall Street: The NYT reports that a new study suggests financial institutions could lose up to $600 billion amid continuing turmoil in the global credit markets. The news spooked already wary investors, fueling sell-offs that saw both the S&P 500 and the Dow Jones slump more than 2.5 percent. The WSJ argues that the stock market is stuck in a rut and ponders the wisdom of the massive write-downs being posted by financial firms: it's unclear whether current accounting rules make matters better or worse. Meanwhile, billionaire investor Warren Buffet takes a swipe at America's financial firms in his latest letter to investors: "You only learn who has been swimming naked when the tide goes out," he wrote. "And what we are witnessing at some of our largest financial institutions is an ugly sight."
Hillary Clinton upped the ante yesterday ahead of Tuesday's crucial primary votes in Texas and Ohio, running provocative TV ads that the NYT says "all but declared Senator Barack Obama unprepared to serve as commander in chief." The ads show children sleeping while an international crisis brews and a phone rings, unanswered, in the White House; the announcer says that only Clinton has the experience "to lead in a dangerous world" and asks: "Who do you want answering the phone?" The LAT notes that Clinton staffers hope the ad will rally female voters in a repeat of the last-minute surge that helped Hillary to victory in New Hampshire. With everyone—includingSlate's John Dickerson—noting parallels to Walter Mondale's 1984 "red phone" ad, Obama countered with an ad of his own, arguing that Clinton had already fluffed her "red phone" moment by backing the war in Iraq.
The Post reports that behind the scenes, Clinton strategists were yesterday trying to downplay the necessity of winning both Texas and Ohio in Tuesday's vote. Still, the WSJ notes that if Hillary fails to pick up both states—or if Texas' complex primary-caucus hybrid ends in tears—she'll likely face pressure to step aside for the good of the party. Bob Herbert picks up the theme in the NYT: "Tuesday's elections may decide the nominee. But if they don't, the wisest heads in the party will be faced with the awesome task of preventing a train wreck that would ruin what was supposed to have been a banner year."
All the papers quote an unnamed "senior White House official," who said yesterday that the Bush administration would resume withdrawing troops from Iraq following a short pause this summer. "This is not a stall tactic," the official said. "I fully expect further reductions this year, in '08, and so does the president." There's no indication, though, of how many troops will be withdrawn; the NYT speculates that Bush might order only token withdrawals, leaving the final decision to his successor.
Under pressure from the United States, Turkey yesterday announced that it had withdrawn its troops from northern Iraq, bringing to a close an eight-day offensive against Kurdish guerrillas. It's hard to gauge the operation's impact; the NYT notes that Kurdish and Turkish spokesmen gave contradictory accounts, each claiming their side had killed hundreds of enemy fighters while incurring minimal losses. The Post notes that U.S. officials were skeptical about the Turkish statement, since a full withdrawal would take several days to complete.
Everyone gives big play to the British defense ministry's decision to recall Prince Harry from military service in Afghanistan; the move came after the Drudge Report broke a media embargo that had kept the prince's deployment secret for 10 weeks. The Post notes that even Britain's much-derided tabloid editors considered the leaked report "a cheap hit"; the LAT is more critical of the British media's complicity in concealing Harry's presence on the front lines. Still, as the NYT notes, the press pack were careful to commit only to covering up the rowdy prince's military activity: "If Prince Harry had managed to find a nightclub in Kabul, that news would have been acceptable to report," one tabloid editor sighed.
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