Bin Laden releases audiotape; higher interest rates could slow economic recovery.

A summary of what's in the major U.S. newspapers.
June 4 2009 6:27 AM

Bin Laden Steals Headlines as Obama Mideast Trip Begins

The New York Times, Los Angeles Times, and the Wall Street Journal's world-wide newsboxlead with President Obama's arrival to the Middle East, where he will travel through four countries in five days. As the administration finalized plans to make sure the president's speech in Cairo this morning reaches as many people as possible, Osama Bin Laden released a new audiotape accusing Obama of planting new seeds of "hatred and vengeance" in the Muslim world. The NYT also points out that senior Israeli officials vied for his attention by complaining that Obama was ignoring "old understandings" by taking a harder line on settlements. The WSJ focuses on how administration officials tried to lower expectations for Obama's speech in Cairo, saying that it won't offer any new initiatives on the Israel-Palestine peace process or the U.S. relationship with Iran.

The Washington Postleads with Federal Reserve Chairman Ben Bernanke warning lawmakers that they need to start planning to balance the budget because sustained deficits could deepen the nation's economic woes. Many economists have been expressing growing concern that long-term debt could drive up interest rates, making it more expensive for the government, and everyone else for that matter, to borrow money. The rate has already been increasing at a formidable pace, and the U.S. Treasury now has to pay 3.5 percent to borrow money for 10 years, which is still low by historical standards but up from 2.9 percent three months ago. USA Todayleads with a new report by the Bureau of Economic Analysis that says 16.2 percent of Americans' income comes from a federal or state benefit program, such as unemployment insurance and food stamps. It represents the highest percentage since the government began to keep track in 1929. The government will spend around $2 trillion on benefits this year, which comes out to an average of $17,000 for each household. Advocates of social programs say the figures demonstrate that the "safety net" is working as it should.

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Shortly after Obama landed in Saudi Arabia, Al Jazeera aired two separate audiotapes that purported to be from Bin Laden and his Egyptian deputy, Ayman al-Zawahiri. Bin Laden said Obama is following in President George W. Bush's footsteps by "antagonizing Muslims" and warned Americans there would be "consequences." U.S. officials said they couldn't confirm the tape's authenticity, but it would mark the first public statement by Bin Laden in three months. He hadn't been heard from in so long that Pakistani officials had been speculating he might be dead. The LAT notes that while the tape was a vivid reminder of the challenges the White House will face in the region, it also suggests terrorist organizations may be afraid that Obama's popularity could translate into fewer supporters for their causes. That fear is being compounded by the fact that al-Qaida has come under fire from former followers and many fellow Muslims who say the terrorist group is indifferent to the suffering that its tactics have caused.

Obama's speech in Cairo makes good on a promise the president made long ago to give a major address from a Muslim capital. The White House is going through unusual lengths to make sure the speech reaches as wide an audience as possible, including setting up a Web site where people can sign up to receive the address via text message in four languages. The White House described it as its broadest outreach to date.

The NYT takes a look at Obama's preparation for the speech and how it "offers a case study in the president's approach to a delicate issue." In a shocking development, it turns out Obama and senior administration officials have spent "months" soliciting opinions "from a wide variety of experts," including several prominent Muslim business leaders. Obama seems to have been tinkering with the speech until the last minute, working on it on Air Force One, "long after most of his advisers had fallen asleep" and even told advisers last night that he wanted to think about it some more and wouldn't deliver the final version until dawn.

Remember that whole bowing noncontroversy? Well, you can rest easy because the NYT reports that while Obama "exchanged a light embrace and a double kiss" with Saudi Arabia's King Abdullah, he "did not bow as he did at their first meeting in London."

Inside, the NYT reports that senior Israeli officials said they had "clear understandings" with the previous administration that they could continue to build settlement housing in the West Bank as long as it was within certain limits. The officials said Israel agreed to join the so-called road map in 2003, which stated that all settlement activity had to be stopped, only after discussing the issue clearly with Bush officials and clarifying the exceptions. "Not everything is written down," one of the officials said. But a former senior White Hosue official called the Israeli claims an "overstatement."

The NYT off-leads a look at how it's not just the United States that is finding itself in the situation of having to pay higher interest rates to borrow money at a time when many countries are trying to increase spending to boost the economy. These increasing rates are not just bad news for governments but could also slow down the economic recovery by increasing rates on companies and consumers. "For now, the cost of more debt is the price government is willing to pay to spend its way out of recession," notes the NYT. But the more this debt increases, the more investors fear that the Fed, along with other central banks, will choose to pay for government borrowing by essentially printing more money.

The LAT is alone in fronting Obama's turn on health care when he made it clear yesterday that he is open to the idea of requiring most Americans to get medical insurance, provided there are exemptions for small businesses and the poor. During the presidential primaries last year, Obama vociferously criticized Hillary Clinton's proposed mandate, calling it a plan to "go after people's wages." But in a letter to Senate Democratic leaders, he said he was receptive to proposals for "shared responsibility." Obama also emphasized that he supports creating a new government-run health care plan to give people an alternative to private insurance. "This will give them a better range of choices, make the healthcare market more competitive and keep insurance companies honest," Obama said in the letter.

In its business section, the LAT says Obama's push for a health care overhaul will get a boost from a new study that says medical bills, in addition to associated problems such as lost wages for the sick, "contributed to 62% of all bankruptcies filed in 2007." An earlier study from 2001, which Obama has cited numerous times, found that these expenses contributed to 55 percent of bankruptcies in 2001. The survey also makes it clear that medical insurance really doesn't offer much protection since 78 percent of those bankruptcy filers were covered. "Health insurance is not a guarantee that illness won't bankrupt you," one of the authors of the study said.

The WP's E.J. Dionne Jr. says it's "remarkable how successful" Rush Limbaugh and Newt Gingrich "are in setting what passes for the news agenda." The fact that their views get picked up so often means that "Obama is regularly cast as somewhere on the far left end of a truncated political spectrum." While Democrats "are complicit" in this, the media are also to blame for "treating far-right views as mainstream" while largely ignoring elected officials who criticize Obama from the left. Everyone likes to talk about how the media are in love with Obama, but "there is a deep and largely unconscious conservative bias in the media's discussion of policy. The range of acceptable opinion runs from the moderate left to the far right." Many would like to think that the far-right elements are weakening the Republican Party. "But guess what?" writes Dionne. "By dragging the media to the right, Rush and Newt are winning."

The LAT fronts a look at how in the middle of all the people who are suffering financial hardship because they joined the ranks of the recently unemployed, there are also those who are fully enjoying their "funemployment." Those who describe themselves as happily jobless are generally single and young. They live with their savings, unemployment checks, severance packages, or their parents' money and "do not spend their days poring over job listings." Instead they go to the beach, travel cheaply, volunteer, and drink lots of margaritas. "Experts say it's both a reflection of the country's cultural narcissism—and attitudes of entitlement and self-centeredness—and a backlash against corporate America and its 'Dilbert'-like work environment," notes the paper. "Recession gives people permission to be unemployed," said one expert. "Why not make use of the time and go do something fun?"

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