The Wall Street Journalleads with the preparations for bankruptcy filing at CIT Group after the company failed to obtain a government guarantee to help it borrow. CIT is desperately pressing its case to the government in the looming shadow of a $1 billion payment due in mid-August. The Los Angeles Timesleads with General Motors' emergence on the other side of bankruptcy as a smaller company that is promising to innovate and place a "steely" focus on its customers. The Washington Post leads with AIG's request for the government to bless the millions of dollars in bonuses it promised to its top executives by 2010. The insurance giant doesn't need federal approval but is reluctant to deliver the long-promised bonuses without "political cover" from the Obama administration. The New York Times leads with a government review released yesterday that declares the Bush administration's warrantless-wiretapping program inferior to other intelligence-gathering methods in effectiveness and timeliness.
After failing to get a borrowing guarantee from the government, CIT Group, a major lender to almost a million small and midsize businesses, hired a law firm to begin bankruptcy preparations. As of March 31 the company had $68 billion in liabilities, meaning a bankruptcy would catastrophically affect thousands of borrowers. CIT is actively involved in a discussion with the FDIC, which oversees the government's debt-guarantee program and has not yet reached a decision on the lending giant's application. The agreement would allow CIT, which currently has a "junk" credit rating, to sell low-interest bonds.
Meanwhile, AIG is wrangling with President Obama's "compensation czar" to get political approval for another $250 million in executive bonuses that were promised before the current administration even began. The next wave of bonuses, due by March 2010, are aimed at retaining executives from AIG Financial Products, the division that "wrecked" the company last year with complex credit contracts. AIG bonuses became a symbol of outrage directed at Wall Street when the company gave them out earlier this year; they're hoping a presidential blessing will cut down on the drama this time.
General Motors emerged from bankruptcy yesterday with the government owning 60 percent of the company and its CEO promising that "business as usual is over." He announced a new top-level management structure, and said the company would soon experiment with selling cars on eBay in California. The LAT declares the 39-day bankruptcy "remarkable" for its scale and brevity; the WP notes that it is one of the largest bankruptcies in U.S. history.
Intelligence officials who spoke to the NYT could scarcely remember a single incident in which the National Security Agency's wiretapping program "contributed to successes against terrorists." A new government report seems to corroborate their memories: It reveals that, while the program did uncover some valuable information, it rarely played much of a role in the FBI's "overall counterterrorism efforts." The report also "hints" that the administration pressured the NSA to keep the program going: Threat assessments prepared every 45 days to gain permission to continue the program became known inside the agency as "scare memos" because they strained to identify particular threats that could be used to justify the wiretapping.
Congressional Democrats have figured out how to pay for overhauling the health care system: wring it out of wealthy Americans. Individual taxpayers making more than $280,000 per year, and couples making more than $350,000, will be asked to hand over $550 billion in the next 10 years to pay for legislation currently in the House ways and means committee. The final bill, the WSJ adds, is likely to cost more than $1 trillion. The NYT calls the bold support for tax increases "perhaps the clearest expression yet of the mandate that Democrats believe they won last November."
Peggy Noonan unsentimentally eulogizes Sarah Palin's political career on the WSJ op-ed page, writing that Palin was "out of her depth in a shallow pool." At times, Noonan almost seems to be responding to another columnist who, writing earlier this week, saw a classic American storyline in Palin's whirlwind rise to fame: "America doesn't need Sarah Palin to prove it was, and is, a nation of unprecedented fluidity."
A cool interactive art project has led to 30 pianos being scattered around London, encouraging inhabitants of Britain's capital to come out and provide free music. The pianos, which cost Bristol artist Luke Jerram about £14,000 (about $22,000) to set up, have "resoundingly disproved the stereotype that [Londoners] are genetically incapable of spontaneous acts of public exuberance."
TODAY IN SLATE
More Than Scottish Pride
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Why Do Some People See the Virgin Mary in Grilled Cheese?
The science that explains the human need to find meaning in coincidences.
Happy Constitution Day!
Too bad it’s almost certainly unconstitutional.