White House wants to overhaul immigration detention system and mortgage giants.

A summary of what's in the major U.S. newspapers.
Aug. 6 2009 6:41 AM

Pressing Reset Button on Freddie and Fannie

The New York Timesleads with word that the Obama administration will announce a new plan to reform the detention system for immigration violators. Detention centers have often been criticized for mistreating detainees and, most poignantly, failing to provide them with proper medical care while often allowing them to linger behind bars for months or years. The Washington Postleads with word that the White House is considering pressing the reset button on Fannie Mae and Freddie Mac to free the two mortgage giants of hundreds of billions of dollars in troubled loans. Nothing has been decided yet, but this is one of the proposals that the administration will be considering as it decides what to do with the companies that were effectively nationalized in September and have since been given $85 billion in direct federal aid.

The Wall Street Journalleads its world-wide newsbox with, and the Los Angeles Timesdevotes its top nonlocal spot to, the two American journalists who returned to California yesterday after being detained in North Korea since March. The LAT focuses its front-page piece on how former President Bill Clinton's image has been reinvigorated as a result of the successful diplomatic mission. USA Todayleads with a University of Utah analysis that predicts the percentage of households that own homes will drop to around 63.5 percent by 2020, a rate not seen since 1985. Home ownership reached a peak of almost 70 percent in 2004 and 2005, but has since dropped to 67.4 percent.

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Overhauling the detention system for immigration violators could take years, but those in charge describe it as an ongoing effort to provide a more suitable environment for the noncriminals facing deportation. The Obama administration wants to consolidate the system that currently has contracts with more than 350 local jails and private prisons, possibly into government-run centers. Oversight will also be increased to try to avoid some of the bad press the system has received, and families will no longer be sent to a former state prison near Austin that has come under particular criticism.

The plan currently under consideration to remake Fannie Mae and Freddie Mac sounds quite familiar. The troubled loans—or toxic assets—held by the mortgage giants would go into government-backed financial institutions, or "bad banks," and allow Fannie and Freddie to get a fresh start. Then the government could decide to join the two firms into one government agency that perhaps would step away from the mortgage finance market. Or maybe they will maintain the same structure. Nothing has been decided yet, but it seems clear the Obama administration wants to make sure the private-public hybrid nature of the companies isn't causing them to take on unnecessary risk that could, once again, threaten the financial system.

Now that Euna Lee and Laura Ling are back on American soil, it's becoming more evident that there's still a lot that isn't known about the circumstances surrounding their arrest. Did they actually cross the border into North Korea? Did they realize how dangerous it was? How did the cameraman escape? But everyone made clear that yesterday was not the time for those types of questions as the two journalists were just happy to be home after 140 days in captivity. The welcome-home scene was emotional, and even though Ling did say a few words of thanks, the families made it clear the two journalists aren't ready to talk about their ordeal quite yet.

During her public statement in the airport hangar, Ling described how surprised she was to see the former president in North Korea. "We were shocked, but we knew instantly in our hearts that the nightmare of our lives was coming to an end." That was undoubtedly the high point for Clinton, a former member of his administration tells the LAT. "Talk about affirmation," the former administration official said. "This is the love he needs." Clinton barely spent 24 hours in North Korea, but "it redefined—and in some cases, reinvigorated—several relationships at the heart of American politics," notes the LAT. While this was clearly a victory for the Obama administration, it also helped Clinton rehabilitate his image, which had been badly damaged during last year's bruising primary battle. He may not have had to do much in Pyongyang beyond sticking to the script, but by all accounts his first real job in the Obama administration was a huge success.

At the same time, Clinton's mission to North Korea was also a stark reminder of the former president's ability to overshadow his wife, as well as his vast rolodex of financial and political contacts, which have raised uncomfortable ethical questions in the past. As the Post details in a front-page piece, Clinton asked wealthy business contacts to help carry out the mission and got wealthy Hollywood producer Steve Bing to foot the bill for the plane that took him and his entourage to North Korea.

The WSJ and NYT both devote separate stories to looking at how Clinton and former Vice President Al Gore were reunited yesterday. The two men had a bitter falling out after serving together for eight years, but they hugged yesterday after Clinton got off the plane. Both papers describe the encounter in detail, but the WSJ certainly takes the cake by describing it so meticulously  that it almost sounds sexual. It first looked like they were "destined for a routine handshake" and Gore apparently hesitated at first when Clinton pulled him "into a bear hug." The embrace lasted a full five seconds, and included six pats on the back—two from Gore and four from Clinton—as well as "two right-handed strokes," courtesy of the former president.

The administration continued to emphasize that Clinton's trip was a private one and didn't change anything about U.S. policy toward North Korea. But others aren't so sure. USAT talks to several analysts who think this could mark the beginning of a better relationship between the two countries. "It's almost like when China invited our ping-pong team to Beijing," said one. In a front-page piece, the NYT takes a look at how administration officials are trying to determine whether Clinton's trip has opened up new opportunities for nuclear talks. And despite the this-changes-nothing insistence, analysts say North Korea is clearly going to expect at least some form of payback for this, and the United States response to that expectation could set the tone for future relations between the two countries.

The WSJ has the most details about what was discussed in Clinton's meeting with North Korean leader Kim Jong-il, and, as expected, it seems clear that the fate of the journalists wasn't the only topic. Clinton apparently talked to Kim about ending his nuclear program and said he could reap ample rewards if he released South Korean and Japanese nationals who have been kidnapped. Many think Kim saw the meeting with Clinton as the first step into direct negotiations with the United States. But one South Korean official takes it even further and says Kim's ultimate goal is to have some sort of summit with Obama.

The WP fronts word that the bipartisan group of senators from the finance committee is making progress on health care negotiations. The senators will brief Obama on the progress of their talks. So far, the bill that would emerge from these discussions would come under $1 trillion, nix the government insurance option, tax generous health care benefits, and expand Medicaid, among other measures. It's still not clear whether they'll be able to reach a deal by the Sept. 15 deadline that the committee's chairman has set. But even if they don't, the Post says Democrats are already analyzing the compromises that have been made to see how they can unite members of their party behind certain measures that could win a few Republican votes.

The NYT takes a look at how it became crystal clear yesterday that the White House made a deal with the drug industry even as it has been insisting that lawmakers were writing legislation from scratch. After House lawmakers suggested they could extract more cost savings from drug companies, the administration was forced to come out and say that it had previously agreed it wouldn't ask the industry for more than $80 billion in savings in exchange for their support. It was an embarrassing admission that angered some Democratic lawmakers, particularly considering it came from an administration that has made a big deal of shunning lobbyists. But if the White House had failed to acknowledge the deal, it could have angered a powerful ally that is spending millions on an advertising campaign to support reforming the system.

Paula Abdul's decision to leave American Idol leads the LAT's Mary McNamara to ask, "What is a reliable train wreck actually worth?" Abdul first joined the show because of her singing career, "but what she actually brought to the show was, well, insanity." She tried to portray herself as the nice one, "but the role that worked best for her was the ditsy, possibly drunken sidekick." American Idol has been the vanguard in reality programming, and "Paula provided the first taste of what the citizenry now gorges itself on: live-action breakdowns." But apparently it was decided that her "reliable unreliability" wasn't worth "as much as the milquetoast stoicism of Ryan Seacrest."

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