The Washington Postleads with word that the two top intelligence officers in the country expect that President-elect Barack Obama won’t keep them around for very long, even though they appear eager to stay in their current jobs. There seems to be a consensus building among Democratic leaders that Director of National Intelligence Mike McConnell and CIA Director Michael Hayden should be let go, mostly because of their support for harsh interrogation techniques and warrantless eavesdropping. The Los Angeles Timesleads with the latest effort to put a brake on home foreclosures that could help several hundred thousand homeowners who have mortgages that are owned or guaranteed by Fannie Mae or Freddie Mac. It will do little for the vast majority of troubled borrowers who are at risk of foreclosure, but there are hopes that lenders will use it as a guide to deal with the rising number of delinquent borrowers.
The New York Timesand the Wall Street Journal’s worldwide newsbox lead with Democratic leaders in Congress making it clear that they intend to pass legislation to help Detroit’s Big Three during the lame-duck session that starts next week. The move sets “the stage for one last showdown with President Bush,” notes the NYT. Democrats insist automakers should be allowed to tap into the $700 billion bailout package, but Bush administration officials have said the money would be best spent on financial institutions. USA Todayleads with two analyses that show those on Medicare prescription drug plans will pay an average of 43 percent more in monthly premiums next year than they did in 2006, when the program began. While the Medicare drug program is costing the government less than was originally estimated, seniors are seeing the cost of premiums and drug co-payments increase each year.
Obama’s transition team isn’t talking much, but both Hayden and McConnell interpret the fact that the president-elect hasn’t reached out to them as a sign that they will both be out of a job soon. And they’re not happy about it. Of course, they’re not saying anything publicly, but they have plenty of unnamed intelligence officials speaking on their behalf. And it’s not a personal issue, mind you. Both Hayden and McConnell think their departures could be seen as a politicization of intelligence offices. The two officials also say that Obama will have enough on his plate with the economic crisis and so should rely on their experience with national security issues. Even though neither was directly involved in the controversies regarding the failure to find weapons of mass destruction in Iraq and the harsh interrogation techniques, many Democrats are pushing Obama to make a clean break from the past.
Under the mortgage-modification program announced on Tuesday, a borrower must have missed at least three payments in order to qualify for a new loan with monthly payments that will not exceed 38 percent of the homeowners’ income. By offering a simplified process to determine who is eligible for a mortgage modification, officials hope to get things moving quickly. But many were quick to criticize the plan, saying that while Fannie Mae and Freddie Mac own or guarantee almost 60 percent of all single-family residential mortgages, due to their higher lending standards the two giants hold only 20 percent of seriously delinquent mortgages. For its part, the WP is more optimistic that major lenders will extend this formula to their own loans.
Sheila Bair, the chairwoman of the Federal Deposit Insurance Corp. who has been one of the loudest proponents of getting the government involved to help people stay in their homes, quickly said the new mortgage-modification plan “falls short of what is needed.” The NYT points out that Bair had said she was close to reaching an agreement with the Treasury Department on a plan to spend $50 billion to modify mortgages, but Treasury officials ended the discussions abruptly last week. The NYT sees yesterday’s announcement as the “clearest sign” yet that the administration is moving away from proposals that would have the government refinance a large number of mortgages.
The WSJ points out that the current situation with the Detroit automakers is just what Obama’s aides “had hoped to avoid, potentially giving the president-elect responsibility for an emergency” before he can do anything about it. But time is not on the side of the Big Three. General Motors has warned it could face a cash shortage by the end of the year, and yesterday its stock fell to its lowest point since 1943. Besides giving the automakers access to the $700 billion pie, Obama also wants to speed up delivery on the $25 billion for fuel-efficient cars and emergency loans from the Federal Reserve.
The NYT gets word that Democratic leaders want to take up the issue with Bush so if he refuses to bail the automakers out then he can get blamed if one of the companies fails. The WSJ suggests that a clear sign of whether Democrats are really interested in helping the automakers rather than making a political point will be whether they present the issue individually or as part of a bigger economic stimulus package. Republicans have long been reluctant to support another big stimulus package, but Democrats are likely to convince enough GOP lawmakers to come around to their side if the issue is solely the Big Three.
The WP fronts a look at the debate over whether GM should just be allowed to go bankrupt. Of course, GM says bankruptcy is not an option and insists that its collapse would affect industries far beyond General Motors. But while buyers might not be eager to buy a car from a bankrupt manufacturer, bankruptcy protection would give GM the flexibility to impose new changes that could help it turn around.
The NYT takes a front-page look at how lobbyists have descended on the Treasury Department as many companies and associations are clamoring for their own piece of the $700 billion bailout package. The National Marine Manufacturers Association, for example, wants boat-financing companies to get help, and a Hispanic business group representing plumbers and home-heating specialists wants its members to get hired to take care of any houses the government may end up owning if it buys distressed mortgages. Bankers, and particularly community bankers, are concerned that this push to include different types of companies in the bailout could end up diluting the effort to stabilize the financial system.
USAT fronts, and everyone covers, Obama’s transition team announcing a set of rules that restricts the way lobbyists can participate in the transition. Lobbyists will not be able to work in the subject area they had previously lobbied and will be barred from donating money for the transition. If someone becomes a lobbyist after working on the transition, they’ll be forbidden from lobbying the administration for 12 months. John Podesta, a transition co-chair, recognized that some qualified people might be left out but said that was a price Obama is willing to pay.
Even though it might be true that the restrictions are “the strictest, the most far-reaching ethics rules of any transition team in history,” as Podesta said, there are a few loopholes. The rule applies only to registered federal lobbyists, though many lobbyists don’t have to register. As a candidate, Obama once said that lobbyists “won’t find a job in my White House,” but lobbyists are free to work on the transition as long as it’s not in policy areas where they have lobbied.
The LAT says the failure to impose an all-out ban on lobbyists is merely the latest example of how Obama is turning to seasoned Washington veterans in an apparent effort to avoid rookie mistakes. This is more than clear in his transition team, which “is rife with officials from the Clinton administration.” As a candidate, Obama loved to criticize the Democratic establishment and often portrayed himself as an alternative to the politics of the past. But now it’s “starting to look as though Sen. Hillary Rodham Clinton’s family empire is living on.”
The WP fronts a look at how many students in the Washington region are taking both the ACT and SAT to improve their chances at their college of choice. Still, no matter how obsessed Washington-area students are with college admission tests, they can’t even come close to what South Korean students experience. The WSJ fronts a piece looking at how the whole country gets involved when high-school seniors take the nine-hour college entrance exam. Many offices open late to leave the roads clear for students, planes can’t land or take off when students are going through the listening portions of the tests, and parents get together to participate in overnight prayer sessions.
