A Treasury Department plan to grant new market-stabilizing powers to the Federal Reserve.

A summary of what's in the major U.S. newspapers.
March 29 2008 6:10 AM

No More Alphabet Soup

The New York Times and the Los Angeles Times lead with a Treasury Department plan to grant broad new market-stabilizing powers to the Federal Reserve. The plan is part of a larger attempt to simplify the nation's "alphabet soup" of financial regulatory agencies. The Washington Postfronts that story but leads with another Bush administration proposal—a plan to bail out homeowners struggling to pay their mortgages after the values of their homes have dramatically decreased. The proposal encourages lenders to let homeowners refinance their property for a more affordable rate, forgiving a portion of their debt in exchange for financial backing from the federal government. The Wall Street Journal tops its world-wide newsbox with U.S. forces' launching of airstrikes in Basra, Iraq, as Iraqi forces faced a strong resistance from Shiite militias.

The Treasury Department's proposal comes after a year of study by Treasury Secretary Henry M. Paulson, the LAT reports, and would overhaul a system built piece-by-piece over the past century and a half. The plan, which requires detailed approval by Congress, would consolidate the current jumble of regulatory agencies—including the Securities and Exchange Commission—into three overseeing institutions. The NYT predicts Democrats' response, saying they'll likely complain that it does not go far enough toward limiting the activities that caused the current financial crisis. An LAT quote from one prominent Democrat, New York Sen. Chuck Schumer, confirms that premonition: Schumer says that Democrats agree with "large parts" of the proposal in "broad outlines" but that it does not address "the full spectrum of complex new financial securities." Both the WP and the LAT credit the NYT for breaking the story on its Web site late Friday.

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The WP leads with a second Bush administration proposal addressing the credit crunch—a plan to rescue homeowners who face foreclosure because falling prices mean they now owe far more than their homes are worth. Details are still being finalized, but the administration has revealed that the plan resembles one proposed two weeks ago by Democratic Rep. Barney Frank (legislation the WSJ says has "little hope of passing in its current form"). Under the proposal, the Federal Housing Authority would urge lenders "to forgive a portion of those loans and issue new, smaller mortgages in exchange for the financial backing of the federal government." If successful, the Post explains, the plan would mark the first time the White House has committed federal funds to assist individual borrowers.

The NYT, WP, and LAT all front Sen. Patrick Leahy's call for Sen. Hillary Clinton to drop out of Democratic race for president and avert a bloody nomination battle with Sen. Barack Obama. The NYT serves up Sen. Clinton's behind-closed-doors analysis—she told Democratic allies that she is the girl being "bullied out" of the race by the rough boys. Democratic National Committee Chairman Howard Dean set out to calm "increasingly anxious" Democrats, the WP reports, by taking a television tour and setting a "target date" of July 1 for finalizing the party's nomination. (Dean was suspiciously short on details as to how the "target date" will be met.) The LAT explains the "growing anxiety" in the party as Sen. Clinton reaping what she sowed—a self-focused, "complex and difficult" relationship with fellow Democrats that is coming back to haunt her candidacy. Clinton hopes to right her campaign with victories in Pennsylvania, where she enjoys a comfortable lead in the polls.

U.S. forces launched airstrikes in Basra in the midst of heavy fighting between U.S. and Iraqi soldiers and Shiite militiamen, according to the WSJ's world-wide newsbox. The NYT reports that the campaign was initially handled by Iraqi security forces, who asked American forces to step in when they were unable to control the situation. Washington Post correspondent Sudarsan Raghavan fleshes out the day of sudden violence with a sprawling report from Sadr City, where he was trapped 19 hours alongside the Mahdi army of Shiite cleric Moqtada al-Sadr. Raghavan's riveting account includes real-time interviews with Abu Mustafa al-Thahabi, a military adviser to the Mahdi army. Neither the NYT nor the WP can resist subtle philosophizing about what the pitch battles in Iraq "underscore."

Spring brings baseball to LAT's Column One, which observes the early rehearsals of the Florida Marlins' new plus-sized male cheer team, the Manatees. The Miami-based team's latest attempt at fighting perennial low-attendance, the Manatees weigh in from 225 to 435 pounds, and most of them still can't dance after weeks of practices. Or maybe they're too busy making hot dog jokes and staring at the team's more traditional cheerleaders—the Mermaids—to remember the steps. The LAT's humorous, understandably skeptical account is perhaps best captured by the response of one Manatee's 8-year-old daughter: "Oh, daddy, no!"

Elsewhere in the lighthearted Saturday copy, a WP op-ed belatedly debunks Sen. Hillary Clinton's "3 a.m. Phone Call" ad by providing a history of presidential slumber. The experts—including Henry Kissinger—say they can't remember any decisions that had to be made in the middle of the night, and even when presidents are woken, they can usually take the report and go back to sleep. "After all, if it's the end of the world, there's nothing the president can do about it. If it isn't, it can almost always wait till breakfast."

David Sessions is a former Slate intern. He is currently a blogger at Politics Daily.