In it, but not of it. TPM DC

Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernanke are testifying before the House Financial Services committee as you read this. We'll be following today's hearing pretty closely, both because we (ahem) value your readership, but also because the hearing's shaping up to be much more interesting than originally anticipated.

Two big stories broke yesterday, both of which Josh wrote about over at the mother ship. Suddenly there's much more at stake than the question of when Geithner knew about the AIG bonuses. There's now also the questions of the extent to which the administration has handed over the shaping of bailout possibility to the bad financial actors themselves, and of the possibility that the administration will seek extraordinary power going forward to seize distressed non-bank financial institutions like hedge funds and investment firms. That could have huge ramifications for the government's power over regular banks, which often own such institutions, and, depending on the scope of the legislation, for much smaller institutions as well.

Stay tuned.

The new CBS poll shows how Tim Geithner's public image has held up in the face of some really bad press coverage. Overall, his numbers aren't great -- but they're not nearly as bad as you might expect:

How much confidence do you have in Treasury Secretary Tim Geithner's ability to handle the nation's financial crisis - a lot, some, not much, or none at all?

A lot 13%
Some 41%
Not much 20%
None at all 15%

So a 54% majority of respondents have some level of confidence in Geithner, but it's hardly an emphatic vote of support.

As is to expected, Democrats are the most confident, Republicans the least confident, and independents correspond closely to the top-line numbers.

In today's flurry of positive press about the stock market's 7% uptick in response to Treasury Secretary Tim Geithner's bank rescue plan, one name stands out: Bill Gross, chairman of the vast PIMCO bond fund.

Bloomberg, Time magazine, the Financial Times, and other outlets all picked up Gross' punchy declaration that the Geithner plan is "win-win-win." Reuters even touted as an "exclusive" its report that Pimco would be participating in Geithner's public-private initiative to buy up toxic mortgage-backed assets.

There's only one problem with this: Gross is practically duty-bound to love the plan, since it was partly his idea. As the WaPo reported on Sunday: (emphasis mine)

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Geithner, Bernanke To Face House Committee Today Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke will be appearing at a 10 a.m. ET hearing of the House Financial Services Committee. The two are expected to be grilled by members of both parties over the AIG bonuses.

Obama's Day Ahead -- And Press Conference Tonight President Obama will be making a call at 9:40 a.m. ET from the Oval Office, accompanied by middle school students from the Washington area, to congratulate the astronauts on the International Space Station and the Space Shuttle Discovery. At 11 a.m. ET, he will be meeting in the Oval Office with Australian Prime Minister Kevin Rudd, to discuss such issues as the financial crisis, climate change, Afghanistan and Pakistan, and arms control. At 8 p.m. ET, Obama will hold a news conference from the East Room.

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Scott Murphy, the Democratic candidate in the March 31 special election for Kirsten Gillibrand's former House seat, is focusing on a clear set of messages in the home stretch: The stimulus, the stimulus, and the stimulus -- and Rush Limbaugh.

Murphy's campaign today held an event with local officials and small-business owners, promoting the benefits of the stimulus plan for the district's local infrastructure -- and of course, to excoriate Republican opponent Jim Tedisco for saying he would have voted against the plan.

And the Murphy camp just sent out an announcement for tomorrow's event in Ballston Spa, with this teaser line: "While Career Albany politician Jim Tedisco has apologized to Rush Limbaugh who openly called for our President to fail, he has refused to apologize to voters for saying 'No' to saving or creating 76,000 jobs Upstate, and 'No' to the largest middle class tax cut in history."

For more on the Rush Limbaugh stuff, check out this amusing link. There is a necessary correction to the Murphy camp's line: Tedisco wasn't quite apologizing to Rush, so much as he was denying he'd said anything bad in the first place.

We know that Wall Street is warming to Treasury Secretary Tim Geithner's new plan to encourage private sector purchases of toxic assets -- but what does Congress think?

Only a few senior lawmakers have emerged today to weigh in on Geithner's proposal, suggesting that Congress knows it can inspire market fluctuations using nothing but candid commentary on the financial crisis. But here's how the measured reaction from the Hill shook out.

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If you've been reading Elana's reporting, you know that many Republicans and some Democrats are opposing the Obama administration's mostly-implicit threat to put health care reform and cap and trade legislation into the budget resolution to immunize them from the filibuster.

Judd Gregg--the ranking Republican on the Senate Budget Committee who came thiiis close to becoming Barack Obama's Commerce Secretary before deciding he'd rather block the president's agenda at almost every turn--compared the idea of passing the bills through the reconciliation process to "running over the minority, putting them in cement and throwing them in the Chicago River." (This, of course, despite his long record of supporting the controversial measures President Bush rammed through the budget.)

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You might get the feeling that Michael Steele is going out of his way to please the religious right -- to the point of really laying it on thick -- in the wake of his flap over abortion.

The RNC just sent out a press release announcing the appointment of former Microsoft executive Todd Herman as the RNC's new media director. This is a key part of Steele's efforts to get the Republican Party tuned in to digital media and its place in modern politics.

Now take a look at the very last sentence: "He currently lives in Washington State, where he works at his most important roles: Christian, husband and father."

If the Campaign for America's Future is taking the lead in opposing the formation of the "Moderate Dems Working Group", then the group Third Way is their foil. When the group was announced last week, Third Way released a statement which read, in part, "We are pleased that a new working group of moderates has emerged in the Senate that is seeking to fulfill the mandate of transformational change, and we are pleased to have been asked to contribute ideas and policies to this vital group."

And that should come as no surprise. Three of Third Way's honorary Senate co-chairs (Evan Bayh, Tom Carper, and Blanch Lincoln) are also leaders of the new working group.

Matt Bennett, a Third Way spokesperson told me "we're very involved.... We were disappointed that the Campaign for America's Future came out against it." He says the group knew that Harry Reid's support would be forthcoming and disputes that the working group will stand athwart the president's agenda.

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House Minority Whip Eric Cantor (R-VA) has just released his official reaction to the Treasury Department's new toxic-asset-purchasing plan. And in an illustration of the GOP's sudden populist shift, Cantor attacked the proposal as a giveaway to big business:

As described, the plan seems to offer little incentive for private investors to participate unless the subsidy is made so rich that it comes at the expense of the taxpayer. In its current form, Secretary Geithner's plan is a shell game that hides the true cost of the program from the taxpayers that will be asked to pay for it. Six months after Congress debated the first TARP, it is inexcusable that taxpayers still have not been told their true exposure.

Disturbingly enough, Cantor's criticism of the Treasury plan echoes that of Paul Krugman, who wrote this morning:

The only way to argue that the subsidy is small is to claim that there's very little chance that assets purchased under the scheme will lose as much as 15 percent of their purchase price. Given what's happened over the past 2 years, is that a reasonable assertion?

Now, Cantor's party has yet to emerge with any coherent alternative to the Obama administration's plan -- and the GOP certainly isn't embracing anything like Krugman's pitch for greater government involvement in winding down truly insolvent banks. But when a leading conservative politician and a leading progressive economist are sending the same signals, it's safe to say that the day has taken a turn for the Carroll-esque.

Late Update: A GOP source emails to note that House Republicans did offer a plan of their own to right the markets. In September, Cantor proposed an insurance fund that would charge banks a premium in exchange for guaranteeing toxic mortgage-backed securities.

I'm certainly aware of that concept, but would argue that it's far from a viable alternative to Geithner's current tack. Time economics columnist Justin Fox explained at the time that insuring toxic assets would have the same risk of inadvertent subsidy that Cantor decried today, because setting premium levels for the banks would still require setting (likely inflated) prices for the securities being insured.

The Times also cited Cantor as admitting that the GOP plan "could only work in conjunction with a direct purchase of troubled debt by the Treasury" -- a situation in which government would be playing the same role that Geithner envisions the private sector at least partially playing. So my reference to the lack of a "coherent alternative" included the mortgage-backed-securities insurance idea.