In it, but not of it. TPM DC

As I reported earlier, at today's House Financial Services hearing, Spencer Bachus (R-AL), the committee's ranking member, made an interesting allegation. He suggested that, though AIG had spent billions of dollars in bailout money to make its major counterparties whole, some smaller institutions (including U.S. banks) had been asked to accept 20 or 30 cents on the dollar for secured loans they'd made to AIG subsidiaries.

This obviously raises several questions. For instance: Which institutions got stiffed? Why were they asked to take a hit when bigger institutions never were? What was the nature of the loans they made? Unfortunately, these turn out to be difficult questions to answer.

What we do know is this: Before today's hearing, Bachus sent letters both to Barney Frank and to Timothy Geithner about this very issue. I've gotten a hold of the former letter, but haven't yet been able to get my hands on the latter.

You can read the whole letter to Frank here, but the key paragraph reads:

I have been informed that, in contrast with its treatment of foreign banks, AIG is now attempting to force many of its creditors that are U.S. banks to accept severe reductions in the debt owed to them. I am told in some cases that these U.S. banks are being asked to accept reductions of over 70% of the debt owed to them.


Which is basically what Bachus said at the hearing. It's also fairly unspecific. The other letter allegedly contains more detail. But, perhaps because of that, nobody's being all that forthcoming with it. At least not yet.

We'll try to get a hold of it, but until then we'll keep our eye on what Bachus and the committee minority have to say publicly about the matter.

Jim Tedisco, the Republican candidate in this Tuesday's special election for Kirsten Gillibrand's old House seat, appears to be going positive with this new ad in the home stretch:



The ad has inspiring music, nice visuals, a message of change, and praise of the candidate -- and no mention of his opponent, Democrat Scott Murphy.

This comes right after several days of some pretty rough attack ads, some from Tedisco's campaign itself and some from the NRCC, plus Murphy and the DCCC. But in the final days of the campaign, a positive appeal can be a good thing -- first you poison the public against your opponent, and then you come in as the guy people can trust.

A new Research 2000 poll gives Chris Dodd a five-point lead, 45%-40% over former Rep. Rob Simmons -- a somewhat surprising result, given the current media coverage over the AIG bonuses, and Dodd's role in putting in the loophole that restricted executive pay but didn't make it retroactive.

A Quinnipiac poll from two weeks ago, before the bonuses ever became an issue, gave Simmons a one-point edge of 43%-42%. Granted, we are in apples-and-oranges territory when reviewing polls from different outfits, but one would have expected worse numbers for Dodd after the AIG story broke.

Of course, Dodd is helped by the fact that he's in a state that in recent years has voted Democratic for everything except the governorship (plus a recent Senate win by the Connecticut for Lieberman Party). So it's not a bad field for him to be playing on.

White House spokesman Robert Gibbs had some fun with the House Republicans' detail-free budget alternative during his on-camera briefing with reporters today:



QUESTION: ... House Republicans unveiled what they described today as their alternative to the president's budget. I wonder if anyone here has had a chance to brief you on that on -- if you're aware that it doesn't actually contain any numbers.

GIBBS: I did -- I -- it took me several minutes to read it. (LAUGHTER) I will note that ... there's one more picture of a windmill than there is of a chart of numbers. There's -- just for your knowledge, there's exactly one picture of a windmill.

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CNN reports that former McCain/Palin staffers are now very unhappy with Sarah Palin and her latest antic: Declaring at an Alaska GOP dinner last week that none of her staffers had been the sort of people she would want to pray with.

Palin told an anecdote of her final preparations before her debate with Joe Biden. Check out the 4:00 mark here:



"So I'm looking around for somebody to pray with, I just need maybe a little help, maybe a little extra," said Palin. "And the McCain campaign, love 'em, you know, they're a lot of people around me, but nobody I could find that I wanted to hold hands with and pray."

One anonymous staffer expressed his outrage to CNN. "It's about us people who were on the plane, who showed extreme loyalty to Palin, continually getting thrown under the bus or slapped in the face by her comments, whether she means it or not," the staffer said, adding that this is the kind of thing that would "cause you to question not only your loyalty but her judgment as a leader."

This whole thing might have gone unnoticed, but for one thing: The Alaska GOP has posted the entire speech on YouTube.

Uh-oh, Sen. Judd Gregg (R-NH) ... it looks like Majority Leader Harry Reid (D-NV) may just ignore your warning not to play "hide the reconciliation ball" during the upcoming congressional budget talks.

Reid told reporters earlier today that he would not rule out using "reconciliation" language to shield health care reform from a Republican filibuster later this year. Roll Call reports the Democratic leader's response: "Let's see what happens in the next three weeks, in the next month ... We need to do health care, and we are going to do health care."

For those of you who are just getting up to speed on the budget debate, here's a quick recap:

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Organized labor is now making a big push for Democratic candidate Scott Murphy in the home stretch of the special election for Kirsten Gillibrand's old House seat.

SEIU local 1199 has now launched this ad, attacking GOP candidate Jim Tedisco for opposing the stimulus bill, praising Murphy for supporting it -- and making sure to remind viewers that President Obama endorses Murphy:



According to the latest FEC filing, SEIU 1199's political action fund is spending $75,000 on this ad buy.

Financial executives have spent so much time testifying before Congress these days that earlier this week, The Hill offered CEOs a Dos-and-Don'ts guide to staying on lawmakers' good side. Something tells me that the good folks at the Security Traders Association of New York (STANY) haven't read it.

In a letter to the Senate Banking Committee today, the STANY offers a hilariously hyperbolic plea for rejection of the 90% tax on bailout bonuses that the House passed last week. You can read the full letter right here, but here are some key passages ...

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MSNBC's Contessa Brewer had much the same reaction to the House GOP's alternative budget as did our own Elana Schor. "Where's the beef?" She sounded off in what her co-anchor called a "rant", but what might have better been described as an accurate assessment of the Republicans' budgetless budget.

Nouriel Roubini has weighed in. So have Simon Johnson, Brad DeLong, and Paul Krugman.

Now you, the taxpayers, are being asked for your comments on the government's new bank rescue plan -- not by the Treasury Department, but by the FDIC. Are you disturbed by the re-branding of toxic mortgage-backed securities as "legacy assets"? Are you ready to get past this bonuses business and put your trust in the Obama administration? Here's the link to submit your reaction in detail.

The full release on the public comment period is posted after the jump.

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