The papers on the economy's second-quarter recovery.

A summary of what's in the major U.S. newspapers.
Aug. 1 2009 5:54 AM

Coming Out of the Nosedive

The New York Times and the Washington Post lead with, and the Los Angeles Timesand Wall Street Journalfront, the government's announcement that the U.S. economy contracted at a much slower pace in the second quarter of 2009, laying ground for growth in the next half of the year. The LAT leads with a House committee's 31-28 passage of a health care bill that sets the price tag at $1 trillion over 10 years and incorporates conservatives' demands for more exemptions. The WSJ leads with the House's other major accomplishment of yesterday afternoon: a motion to put $2 billion into a car-repurchase program known as "cash for clunkers."

The United States' gross domestic product shrunk only 1 percent from April-June, a decrease of more than 5 percent from the first quarter and a slight improvement on predictions of a 1.5 percent contraction. The smaller contraction means the economy will likely grow in the second half of this year, but all the papers worry that consumer spending, responsible for about 70 percent of all economic activity, will remain on lockdown. The upturn is mostly the work of an 11 percent increase in government spending, a reality the NYT observes could wear on President Obama and the Democrats if they have to keep spending to fuel the recovery. And there's no good news on the job front yet: Double-digit unemployment looms for at least several more months.

All four papers give prime placement to Congress' emergency salvation of "cash for clunkers," a new program that offers consumers up to $4,500 to give up their old car for a more fuel-efficient model. The program "burned through" $1 billion in its first week, as dealers experienced a surge in sales but had technical difficulties reporting them through the Department of Transportation's Web site. It was originally scheduled to run through October.

In another significant move in the House yesterday, a health care bill emerged from the energy and commerce committee that is "sure to draw fire from a variety of interests, but also shows the beginnings of a consensus," the NYT reports. Voting after 9 p.m. last night, five Democrats joined all 23 Republicans in opposing the bill. Rep. Mike Rogers, R-Mich., complained that members of his party were only allowed to "pick the color of the lipstick on this pig." Democrats will now "fan out" over the country to help Obama sell the plan during the August recess, hoping to combat the impression that the overhaul is a government takeover.

In a separate front-page story, the WP reports on a conservative talk-radio campaign to brand the Obama proposal as "death care." Obama has called for controls on excessive medical bills, and right-wing pundits are telling listeners that his plan to counsel senior citizens about cost-effective treatment amounts to "euthanasia."

A WSJ essay dives into the growing tensions between the United States and Israel, indicated by the fact that only 6 percent of Israelis view President Obama as "pro-Israel," while 88 percent saw George W. Bush that way. The relationship has always had its share of friction, but now Iran forms the core of Israel's nervousness. Obama is trying out a pro-engagement critique of the Bush administration that Israel sees as naive. "U.S.-Israel tension will grow as Israel watches the clock tick and sees its options narrowed to two: live with an Iranian bomb, or strike Iran soon to delay its program long enough for real political change."

The heavily blogged feud between MSNBC's Keith Olbermann and Fox News Channel's Bill O'Reilly was so intense that network executives had to step in and pull the two apart. Officials from both networks attended a Charlie Rose-hosted meeting in May to defuse tensions between their channels. The feud increased ratings for both prime-time shows, but executives were apparently relieved to have it behind them.

For only the second time in 140 years, the temperature failed to reach 90 degrees in New York City in June or July. If August follows a similar pattern, this will be the city's coolest summer on record.

A NYT editorial argues that President Obama and Congress have "an obligation to make a down payment on high-speed-rail corridors across the nation."

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