Souter plans to retire this summer; Chrylser files for bankruptcy.

Souter plans to retire this summer; Chrylser files for bankruptcy.

Souter plans to retire this summer; Chrylser files for bankruptcy.

A summary of what's in the major U.S. newspapers.
May 1 2009 6:44 AM

Souter Calls It Quits

The Los Angeles Times, USA Today, Washington Post, and the Wall Street Journal's world-wide newsbox lead with late-breaking word that Justice David Souter plans to retire this summer, creating the first Supreme Court vacancy during President Barack Obama's administration. Souter, 69, was appointed by President George H.W. Bush in 1990 but quickly turned into one of the biggest disappointments for conservatives as he became a reliable member of the court's liberal wing. The vacancy will be the first for a Democratic president in 15 years, and everyone notes Obama will be under intense pressure to appoint a woman since Justice Ruth Bader Ginsburg stands alone among the nine justices.

The New York Timesoff-leads the Souter news butleads with Chrysler filing for bankruptcy protection yesterday. Chrysler has now become "the first major American automaker to seek bankruptcy protection since Studebaker did so in 1933," details the paper. The WSJ specifies that it's the sixth-largest Chapter 11 filing. In what the NYT describes as "yet another extraordinary intervention into private industry by the federal government," President Obama announced a plan to create a new ownership structure for the automaker that would give the company a "new lease on life." Obama wasn't shy about pointing fingers, saying that the government was eager to avoid bankruptcy but its efforts were thwarted by a group of investment firms and hedge funds, which the president referred to as "a small group of speculators."

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Souter will apparently tell his colleagues today about his plans to retire. All the papers note that Souter's decision to retire is not surprising. He's hardly the oldest justice, but Souter has often made it clear he has a visceral distaste for Washington life and would rather spend time reading books in his isolated cabin in New Hampshire. He has also complained about some aspects of the court's work and had even told friends last year that if Obama won the election, he would be the first to retire. Adding to the speculation, Souter hadn't hired law clerks for the new term that begins in October.

Confirmation battles can often be highly partisan affairs, but Obama has a clear advantage since his party holds a strong majority in the Senate. But Obama might end up deciding to go with an uncontroversial choice, seeing as though Congress already has a full plate this year. Everyone speculates about possible selections, including Elena Kagan, dean of Harvard Law School, whom Obama selected to be solicitor general, and two federal appeals court judges, Sonia Sotomayor and Diana Pamela Wood.  Other names are likely to be on the shortlist, including Georgia Chief Justice Leah Ward Sears. Sotomayor would appear to hold a particular edge since she would give Obama the opportunity to appoint the first Hispanic justice to the Supreme Court. But, of course, this is all just speculation for now. The only thing that seems virtually certain is that Obama will pick someone who's young and could serve for decades.

Administration officials insist Chrylser's bankruptcy will be a quick process that could be completed in two months. The idea is that Chrysler would emerge as a stronger company. But many experts say that time frame might be overly optimistic, particularly considering the unpredictable nature of bankruptcy court. Chrysler said it will shut down most of its plants next week and keep them that way until the bankruptcy process is over. Under the current plan, the U.S. government would put around $8 billion into Chrysler to keep it going during bankruptcy and to help it emerge from the process in an alliance with Fiat. That is on top of the $4 billion the government lent Chrysler in January. After bankruptcy, Chrysler's new majority owner would be the United Auto Worker's retiree health fund that will end up with 55 percent of the company. Fiat will begin owning a 20 percent stake in the company but that could increase to 35 percent and the Italian automaker could eventually end up with a controlling stake. The U.S. government will get 8 percent and the Canadian government 2 percent.

The auto rescues have recently "placed Obama in the odd position of salesman-in-chief," notes the WP. "If you are considering buying a car, I hope it will be an American car," Obama said yesterday.  Still, the move clearly sends a message to General Motors and its lenders that the government is not afraid of bankruptcy if the different stakeholders can't reach an agreement.

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Administration officials and lawmakers were quick to criticize the lenders that refused to accept the government's proposal to receive 33 cents on every dollar owed. "They were hoping that everybody else would make sacrifices, and they would have to make none," Obama said. Rep. John Dingell, D-Mich., called them "rogue hedge funds" and "vultures," noting that they "will now be dealt with accordingly in court." Some analysts insist that Wall Street may be an easy target during the financial crisis but the hedge funds are "doing what they're supposed to do," one expert said, noting that if they were to accept less than what the law entitles them to receive it could make them vulnerable to lawsuits from investors. A group of these smaller lenders fought back against the government characterization and said the bigger stakeholders that had accepted the offer had all received billions of dollars from the Treasury's Troubled Assets Relief Program. "We have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds," the lenders said in a statement.

The WP's Steven Pearlstein feels no sympathy for the lenders—"[s]ince when did any of these guys ever worry about fairness?"—and points out that the one group that "can claim to have been treated unfairly in this process ... is us taxpayers." While the UAW will get 55 percent in return for accepting lower wages and $4.6 billion in cash that had been promised, and Fiat will get up to 35 percent for "management oversight and technology that it has already developed," the U.S. and Canadian government will get a mere 10 percent in return for loans worth $15 billion. "You don't have to be an investment banker to see that that is hardly sufficient compensation for a loan so risky that there isn't a private lender in the world willing to make it."

The NYT takes a front-page look at Mexico's first death from the swine flu, which may help explain "why this country's death toll from the virus is higher than any other's." Adela Maria Gutierrez waited more than a week to seek medical help after she began to feel sick, and by the time she got to the hospital she was "barely able to breathe, her extremities blue from a lack of oxygen." Many experts say that part of the problem is that Mexicans are so used to subpar treatment in health care facilities that they go see a doctor only in extreme circumstances. There are still many things that aren't understood about this new deadly strain of the A/H1N1 virus, and one of them is why no one who had contact with Gutierrez when she was ill tested positive for the same virus. "I don't have a theory," the undersecretary of health for the state of Oaxaca said. "I just don't know."

The WP fronts news that a federal agent who traveled to Mexico with President Obama probably contracted swine flu during the trip. Marc Griswold has since recovered, but "he and his family have watched in shock as his illness has sparked national security concerns, severely strained his relationship with his brother and put his family at the center of rumors and panic." His daughter has had to endure mean jokes at school, and some family members now refuse to talk to him out of anger that he may have infected some of them. "We're not the Typhoid Mary family, for goodness' sake," Griswold said. The news prompted assurances from the White House that the president "has not experienced any symptoms."

The number of cases around the world continued to rise. The World Health Organization said there were 257 confirmed swine flu cases, although that is most certainly an underestimate, considering that later in the day the Mexican health minister said there were 260 confirmed cases in the country alone. U.S. health officials said they have confirmed 111 cases in the country, although still just one death. USAT takes a front-page look at how the panic "was spreading far more rapidly than the virus—particularly in America's schools." Even in places where there are no confirmed cases, school officials are often playing it safe and closing down or canceling activities. As of last night, almost 300 schools had been closed. The 172,000 affected students are certainly a tiny minority, but some health officials insist that for the most part these extreme measures are an overreaction that only help fuel panic.

In its attempt to prevent people from panicking, the administration suffered a setback from one of its own who went off-message yesterday. Not surprisingly, that person was Vice President Joe Biden. In a morning talk show, Biden began espousing his opinions about the swine flu "almost as if he hadn't gotten talking points," notes the LAT. Biden said he had told family members to stay away from confined spaces, such as planes and trains. Shortly afterward, Biden's office clarified that the vice president meant to say that only those who are feeling sick should avoid crowded places. "The gaffe was a reminder of Biden's penchant for the impolitic comment, a sometimes embarrassing habit that can have greater consequences now that he is vice president," points out the LAT. (In Slate's "XX Factor" blog, Hanna Rosin deftly observes that "the problem is not that what Biden said isn't true. … It's that it gives the impression that public officials, trading on inside information, are telling their families something they aren't telling the rest of us.")

The WP's Lisa de Moraes points out that "[t]he 'Been in Office 100 days' episode of Obama's series of prime-time appearances" had the lowest numbers of viewers yet for the president. Officially, 28.8 million viewers watched the president on Wednesday, a 45 percent decline from his February address to a joint session of Congress that attracted 52.4 million viewers, and a 29 percent drop from his March news conference. "Any other series, a plunge like that would have network suits sending stern memos calling for the addition of a wacky next-door neighbor to the show," she writes. "Or at least an adorable puppy."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.