In it, but not of it. TPM DC

Rep. Brad Sherman (CA), a senior Democrat on the House Financial Services Committee, told TPMDC today that the Obama administration could have prevented excessive bonuses from being paid out at AIG -- but it missed the chance.

Sherman told me in an interview today that the Treasury Department wouldn't have to be withholding $30 billion in aid from AIG until the company restructures its bonus payments, because Congress already had given Treasury the authority to prevent those bonuses from being paid.

Referring to the original bailout Congress passed in October, Sherman told me:

We had a provision in there that said Treasury was supposed to establish, by regulation, standards for executive compensation. We required that to be done -- had it been done, it would have been binding, whether [or not] these contracts had been signed earlier. It's entirely within the power of the federal government to have contracts modified [at companies receiving public aid]. Nixon had contracts modified by the federal government. We gave a similar power to Treasury.


Sherman voted against the bailout, he explained, because he didn't believe that Treasury would use the power given to it by Congress. As it turned out, the department ultimately exercised its executive compensation powers last month, but the final regulations were riddled with loopholes -- and only applied to companies receiving "extraordinary" assistance from the government in the future, a standard that no company has officially met so far.

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Chuck Ardo, the press secretary for Governor Ed Rendell (D-PA), reaffirms to TPM that Rendell has been trying to get GOP Senator Arlen Specter to switch parties -- and has not succeeded.

"The governor has had both public and private conversations with Senator Specter about switching parties," Ardo told TPM via e-mail. "The Senator's response has been a resounding 'no!'"

When asked about Rendell's statement that both Joe Biden and Dem Senator Bob Casey are also lobbying Specter to switch, Ardo said he does not have any personal knowledge of that.

A Biden spokesperson told TPM that they are not commenting on his private conversations with Specter, while Casey's spokesperson denied that Casey has had any discussions with Specter about this.

Here's yet another sign that Washington media is still wired to a great extent for a playing field of GOP dominance. During today's White House press conference, CBS correspondent Chip Reid asked Robert Gibbs if it was appropriate for him to attack Dick Cheney:



Reid: Can I ask you, when you referred to the former Vice President, that was a really hard-hitting, kind of sarcastic response you had. This is a former Vice President of the United States. Is that the attitude -- is that the sanctioned tone toward the former Vice President of the United States from this White House now?

Gibbs: Sometimes I ask forgiveness rather than for permission, Chip. But no, I hope my sarcasm didn't mask the seriousness of the answer with which I addressed Ed -- that for seven-plus years, the very perpetrators that the Vice President says he's concerned about weren't brought to justice.


Now let's consider the full context here. Dick Cheney did an interview with CNN in which he went out of his way to repeatedly attack the new White House, saying they were putting the country at risk of a new terror attack. But the question here is whether it's appropriate for the Obama Administration to fire back in response -- that it's Obama's people who are accused of showing insufficient respect to the office?

During this afternoon's White House press conference, Robert Gibbs positively lambasted Dick Cheney -- both for the attacks that Cheney lodged against PResident Obama in yesterday's CNN interview, and for Cheney's own record in office:



Gibbs was asked about Cheney's line that the Obama Administration is making the country less safe. "Well, I guess Rush Limbaugh was busy," Gibbs said, prompting of the reporters to laugh out loud. "So they trotted out their next-most popular member of the Republican cabal."

Gibbs then elaborated on Obama's responsibilities as president to fight terrorist -- and the failures that came before him:

"I think the President saw over the seven-plus years the delay in bringing the very people to justice that committed terrorist acts on this soil and on foreign soil. That delay in seeking swift and certain justice was what he decided to change through his executive order. In changing the legal architecture by which these terrorists would finally be brought to justice. I think the American people will in this administration see those actors brought to the swift and certain justice that was not brought to them in the previous administration."


As for Cheney's criticism of Obama on the economy: "I think not taking economic advice from Dick Cheney would be maybe the best possible outcome of yesterday's interview."

And later on, Gibbs stated again his response to Cheney's national-security criticism: "For seven-plus years, the very perpetrators that the Vice President said he's concerned about weren't brought to justice."

The new Pew Poll takes on the "Obama is doing too much" meme:

So far, do you think Barack Obama is ...

Trying to address too many issues at once - 35% Focusing on too few issues - 4% Doing about right - 56%


As one might expect, the "too many issues" response is being driven by 53% of Republicans, with 37% of GOPers saying he's doing about right. It would make perfect sense for Republicans to think Obama is doing too much -- quite a lot of them don't like what he's doing to begin with.

The poll also contains an interesting piece of data about Republican attitudes: Not only is disproval of President Obama going up as the honeymoon effect wears off -- which was to be expected -- but approval of their own GOP Congressional leaders is going down, too.

In the Pew poll from a month ago, Republican respondents approved of the GOP leadership by a 55%-33% margin. But now, that numbers is down to 43%-37%. Among all respondents, the GOP leadership's approval is at 28%-51%, down from 34%-51%, so they're definitely not succeeding politically right now.

Overall, Obama's approval has gone from 65%-17% in February to 59%-26% now. Republican disapproval of Obama has gone up from 41% to 56%, disapproval among independents has gone from 14% to 27%, and Democratic disapproval has gone from three percent to...five percent.

I just spoke with Rep. Alan Grayson (D-FL), a freshman on the House Financial Services Committee who's become a fast-rising star thanks to his tenacious advocacy for transparency in bailout lending by the Federal Reserve.

Grayson joined fellow Democrats as well as Republicans in blasting AIG for its refusal to give up hundreds of millions of dollars in bonus payments. He painted the government's choice as a stark one, using the metaphor of treating a wound versus amputating a limb.

"It's not clear to me at all that we're taking the correct approach by allowing AIG to continue to operate, regardless of who owns it," Grayson told me. "At this point, ownership is becoming an amorphous concern when comes to a company that borrows millions and millions without any prospect of paying it back. ... Do we continue to allow the bleeding or not?"

Converting AIG from a ward of the state in all but name to an outright arm of the government would be a politically controversial move, given the level of apprehension in Washington over calls to nationalize failing banks.

But Grayson views the dilemma facing lawmakers as a common-sense decision: AIG executives who made more than a million dollars while running the company into the ground should immediately be fired. "The people who caused the problem are not going to be able to solve it," he said.

Asked if the Obama administration understands the need for swift and meaningful action to reclaim AIG's bonus payments, Grayson's answer was an unequivocal yes. President Obama "didn't come out and talk about soybean price supports," the Florida congressman quipped, referencing the White House's remarks today on AIG.

Grayson's perspective echoes what I've heard from Democratic aides on the Hill, who continue to view Congress and the administration as on the same page in pushing for prompt pushback against AIG -- still, no one in the Obama camp has followed Congress' lead in calling for heads to roll at the company.

There is one question, however, on which the freshman Democrat was openly skeptical of the administration. Grayson pointed out that the White House budget included a $250 billion "placeholder" pot of money, the purpose of which is an open secret in the Capitol.

"We all know it's going to be doled out by the administration to companies like AIG," Grayson said, unless Congress moves to prevent it. Whether Democrats have the political will to deny another bailout request from the president remains to be seen.

Michael Steele has taken the GOP's global-warming denial to a new height: "We are cooling. We are not warming. The warming you see out there, the supposed warming, and I use my finger quotation marks here, is part of the cooling process."

That quote comes from Steele's little-noticed appearance as a guest-host on Bill Bennett's radio show the Friday before last, which was just dug up and posted by Sam Stein.

Steele also continued to make threats against pro-stimulus Republicans, as well. "Those first principles, with respect to how we as Republicans, as conservatives view the economy, view wealth creation, have to be adhered to, they have to be supported," he said. "And those who don't put their reelection in harms way."

This really does show how Steele is the gift that keeps on giving: Even when he's stopped doing media appearances, we get previous ones like this or the GQ interview popping up in the interim.

The Service Employees International Union (SEIU) and the Change to Win labor federation are wasting no time in seizing the political moment as anger flares over AIG's commitment to its own executives' bonus payments.

The unions, along with several other partners, are launching takebacktheeconomy.org and planning protests on Thursday at the regional offices of bailed-out banks in more than 100 cities. The goal of the day: pressuring Wall Street into substantively changing its bonus-happy culture.

But there is a bigger goal for the day, one that goes beyond expressing anger at corporate abuse of power. The labor movement sees an opportunity to link the Employee Free Choice Act (EFCA), the union organizing bill that is its No. 1 priority this year, to the growing tide of post-bailout populism.

Two of the banks to be closely targeted on Thursday are Citigroup and Bank of America, both of which have lobbied hard against EFCA while taking taxpayer money.

One labor official said that unions are "hoping this is going to be a real outlet, hoping we can seize this moment in time to advance EFCA" as voters connect the corporate influence that helped bring about the bailout with the influence that's keeping EFCA from achieving the necessary level of support in the Senate.

Late Update: After the jump, you can read the full letter that SEIU sent out today announcing the Thursday protests.

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Larry Smar, the communications director for Senator Bob Casey (D-PA), told TPM in an e-mail that Casey has not attempted to get GOP Senator Arlen Specter to switch parties, after Dem Governor Ed Rendell said in an interview that Casey, Joe Biden and himself have all tried to talk Specter into it:

The Governor may have been referring to the green jobs event in Philadelphia last month when the Vice President, the Governor and Senators Casey and Specter were on stage together and there was some public joking about Specter changing Parties. Senator Casey has had no private conversations with Senator Specter about switching Parties.


Biden's press office has replied that they are not commenting on his private conversations with Specter, and Specter's office pointed RNN-TV, which did the Rendell interview, to previous comments in which Specter said he was prepared to run for re-election in 2010 as a Republican.

President Obama addressed the growing controversy over AIG's retention bonuses this afternoon. Excerpts from his remarks can be found here, but it's notable that he did not signal much of a change in his administration's approach.

Obama said he has asked Treasury Secretary Tim Geithner to use the "leverage" of the taxpayers' investment in AIG to press for the return of the retention bonuses -- which is exactly what Congress has been pressing for all weekend.

But using "every legal avenue" to recoup the money may not be enough, as AIG's lawyers have already advised the company that it's legally obligated to pay out the bonuses. And Obama said that Geithner would continue "to resolve this matter with the new CEO, Edward Liddy," who has already made it pretty clear that he wants the bonuses paid. (And at least one senior Democrat, Rep. Elijah Cummings [MD], is already calling for Liddy's resignation.)

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