History > 2008 > USA > Politics (X)

Obama Defers to Bush,

for Now, on Gaza Crisis

December 29, 2008
The New York Times
By STEVEN LEE MYERS
and HELENE COOPER

WASHINGTON — When President-elect Barack Obama went to Israel in July — to the very town, in fact, whose repeated shelling culminated in this weekend’s new fighting in Gaza — he all but endorsed the punishing Israeli attacks now unfolding.

“If somebody was sending rockets into my house, where my two daughters sleep at night, I’m going to do everything in my power to stop that,” he told reporters in Sderot, a small city on the edge of Gaza that has been hit repeatedly by rocket fire. “And I would expect Israelis to do the same thing.”

Now, Mr. Obama’s presidency will begin facing the consequences of just such a counterattack, one of Israel’s deadliest against Palestinians in decades, presenting him with yet another foreign crisis to deal with the moment he steps into the White House on Jan. 20, even as he and his advisers have struggled mightily to focus on the country’s economic problems.

Since his election, Mr. Obama has said little specific about his foreign policy — in contrast to more expansive remarks about the economy. He and his advisers have deferred questions — critics could say, ducked them — by saying that until Jan. 20, only President Bush would speak for the nation as president and commander in chief. “The fact is that there is only one president at a time,” David Axelrod, Mr. Obama’s senior adviser, told CBS’s “Face the Nation” on Sunday, reiterating a phrase that has become a mantra of the transition. “And that president now is George Bush.”

Mr. Obama, vacationing in Hawaii, talked to Secretary of State Condoleezza Rice on Saturday. “But the Bush administration has to speak for America now,” Mr. Axelrod said. “And it wouldn’t be appropriate for me to opine on these matters.” As the fighting in Gaza shows, however, events in the world do not necessarily wait for Inauguration Day in the United States.

Even before the conflict flared again, India and Pakistan announced troop movements that have raised fears of a military confrontation following the terrorist attacks in Mumbai. North Korea scuttled a final agreement on verifying its nuclear dismantlement earlier this month, while Iran continues to stall the international effort to stop its nuclear programs. And there are still two American wars churning in Iraq and Afghanistan. All demand his immediate attention.

Mr. Obama’s election has raised expectations, among allies and enemies alike, that new American policies are forthcoming, putting more pressure on him to signal more quickly what he intends to do. In the case of Israel and the Palestinians, Mr. Obama has not suggested he has any better ideas than President Bush had to resolve the existential conflict between the Israelis and Hamas, the Palestinian group that controls Gaza.

“What this does is present the incoming administration with the urgency of a crisis without the capacity to do much about it,” said Aaron David Miller, a scholar at the Woodrow Wilson Center in Washington and author of “The Much Too Promised Land,” a history of the Israeli-Palestinian peace efforts. “That’s the worst outcome of what’s happening right now.”

The renewed fighting — and the international condemnation of the scope of Israel’s response — has dashed already limited hopes for quick progress on the peace process that Mr. Bush began in Annapolis, Md., in November 2007. The omission of Hamas from any talks between the Israelis and President Mahmoud Abbas, who controls only the West Bank, had always been a landmine that risked blowing up a difficult and delicate peace process, but so have Israel’s own internal political divisions.

Mr. Obama might have little to gain from setting out an ambitious agenda for an issue as intractable as the Palestinian-Israeli conflict. But the conflict in Gaza, like the building tensions between India and Pakistan, suggests that he may have no choice. “You can ignore it, you can put it on the back burner, but it will always come up to bite you,” said Ghaith al-Omari, a former Palestinian peace negotiator.

For Mr. Obama, the conundrum is particularly intense since he won election in part on promises of restoring America’s image around the world. He will assume office with high expectations, particularly among Muslims around the world, that he will make an effort at dealing with the Arab-Israeli conflict.

Early on as a candidate, Mr. Obama suggested that he did not necessarily oppose negotiations with groups like Hamas, though he spent much of the campaign retreating from that position under fire from critics.

By the time he arrived in Israel in July, he suggested he would not even consider talks without a fundamental shift in Hamas and its behavior, effectively moving his policy much closer to President Bush’s. “In terms of negotiations with Hamas, it is very hard to negotiate with a group that is not representative of a nation-state, does not recognize your right to exist, has consistently used terror as a weapon, and is deeply influenced by other countries,” he said then.

Mr. Obama received an intelligence briefing on Sunday and planned to talk late on Sunday to his nominee for secretary of state, Hillary Clinton, and his choice as national security adviser, James L. Jones, according to a spokeswoman, Brooke Anderson.

One option would be for an Obama administration to respond much more harshly to Israel’s policies, from settlements to strikes like those this weekend, as many in the Arab world and beyond have long urged. On Sunday, though, Mr. Axelrod said the president-elect stood by the remarks he made in the summer and, when asked, noted the “special relationship” between the United States and Israel.

Otherwise, Mr. Obama could try to pressure surrogates to lean on Hamas, including Egypt, which shares a border with Gaza. He can try to build international pressure on Hamas to stop the rocket attacks into Israel. He can try to nurture a peace between Israel and Mr. Abbas on the West Bank, hoping that somehow it spreads to Hamas. All have been tried, and all have failed to avoid new fighting.

“The reality is, what options do we have?” Mr. Miller said.
 

Jackie Calmes contributed reporting from Honolulu.

Obama Defers to Bush, for Now, on Gaza Crisis, NYT, 29.12.2008, http://www.nytimes.com/2008/12/29/washington/29diplo.html

Washington Memo

Obama Follows

a Tradition of Testifying for Prosecutors

December 26, 2008
The New York Times
By PETER BAKER

Every president for more than three decades has had to talk with federal prosecutors at one time or another. President-elect Barack Obama may have set a land-speed record by giving his first interview to investigators even before taking the oath of office.

Mr. Obama sat down last week with four investigators looking into the suspected effort to sell his former Senate seat. As a witness, rather than a target, Mr. Obama seems to have had an easier time with the experience than some of his predecessors. But it is certainly not the way he wanted to begin his presidency.

“Here the guy hasn’t even gotten his tuxedo for the ball yet and already there’s a prosecutor who wants to talk him,” said Robert S. Bennett, one of Washington’s most prominent lawyers, who has represented members of Congress, cabinet secretaries and even President Bill Clinton in all manner of politically charged cases. “It’s the era that we live in.”

Another reflection of the era is that Mr. Obama and his team evidently made no effort to avoid the interview. In the past, some presidents have cooperated with prosecutors or court proceedings only reluctantly, delaying or trying to limit the parameters of their involvement while expressing concern about their prerogatives as the head of the executive branch. But in recent years, the practice has grown so commonplace that Mr. Obama’s aides said there was never any debate about whether he would answer questions.

“There was absolutely no hesitation whatsoever about making him available — none,” said one person involved in the transition.

With no known legal exposure himself, of course, that was an easier decision for Mr. Obama. As a political matter, Mr. Obama, coming into office on promises of transparency and reform, may have had little choice but to cooperate, even if it meant disclosing the sorts of internal deliberations that presidents often guard jealously, like whether he wanted an adviser to serve on the White House staff or in the Senate.

In addition, a president-elect could have a harder time making a legal argument about shielding confidential discussions than a sitting president does.

The concept of executive privilege, while not explicitly mentioned in the Constitution, has been recognized by courts over the years, though it can be outweighed in compelling circumstances like a criminal investigation. It is a matter of some debate among lawyers whether, as president-elect, Mr. Obama would have any claim to executive privilege.

Mr. Obama was interviewed last Thursday at his Chicago transition office by two assistant United States attorneys and two agents from the Federal Bureau of Investigation looking into alleged efforts by Gov. Rod R. Blagojevich of Illinois, a Democrat, to profit from his appointment of Mr. Obama’s successor to the Senate. Mr. Obama was accompanied by his personal lawyer, Robert F. Bauer, and an associate, but not by Gregory B. Craig, who has been designated the new White House counsel, Obama advisers said.

The United States attorney in Chicago, Patrick J. Fitzgerald, who is leading the investigation into Mr. Blagojevich, did not attend. The two-hour interview was not recorded or conducted under oath, although one F.B.I. agent and Mr. Bauer’s associate took copious notes, and it is a felony to lie to federal investigators even without being sworn in.

Mr. Obama answered every question posed and his lawyers made no objections, according to one adviser to the president-elect.

Two of Mr. Obama’s aides were interviewed separately, and he made no effort to block his advisers from answering questions, as some past presidents have done. Rahm Emanuel, the incoming White House chief of staff, brought his lawyer, W. Neil Eggleston, a prominent Washington lawyer who was White House associate counsel under Mr. Clinton. Valerie Jarrett, named a senior presidential adviser, was accompanied by Vincent J. Connelly, a Chicago lawyer who was an assistant United States attorney.

Mr. Eggleston declined to comment Wednesday, and Mr. Connelly did not respond to an e-mail message.

The precedent of presidents’ agreeing to be interviewed by law enforcement authorities can be traced back 200 years to when Thomas Jefferson offered to provide testimony for use at the treason trial of his former vice president, Aaron Burr. James Monroe provided answers at the White House to questions for the court martial of an appointee. Ulysses S. Grant wanted to testify at the corruption trial of his secretary, but was talked out of it by his cabinet. Instead, he gave a deposition, presided over by the chief justice of the United States, at the White House.

But those were rarities until Watergate. Ever since, every president has been called to talk with the authorities, either as a witness or a subject. President Gerald R. Ford provided videotaped testimony in the trial of a woman who tried to assassinate him. President Jimmy Carter gave depositions or testimony in several proceedings against others. After leaving office, Ronald Reagan provided videotaped testimony in the Iran-contra trial of an aide while the elder George Bush was interviewed about the scandal while still vice president.

Mr. Clinton provided sworn testimony at least 10 times, according to David E. Kendall, his lawyer in the Whitewater and Monica Lewinsky investigations. His testimony to the grand jury about his relationship with Ms. Lewinsky became the basis for an article of impeachment passed by the House but later rejected by the Senate. The current President Bush was interviewed by Mr. Fitzgerald for 70 minutes about the leak of a C.I.A. officer’s name.

With all that recent history, Mr. Obama had little choice but to agree to an interview, legal veterans said.

“You could probably delay it as a good defense lawyer,” said Mr. Bennett, who managed to push off Paula Jones’s sexual harassment lawsuit against Mr. Clinton until after his 1996 re-election. “You could ask a court if there isn’t any other alternative. What if he submits an affidavit? Why don’t you send him written questions and see if his answers work?”

But Mr. Obama eventually would have to cooperate, Mr. Bennett added.

“In the real world, at the beginning of an administration, he wouldn’t want to start that way,” Mr. Bennett said. “He can see the headlines — here’s the guy who talks about openness and transparency.”

While Mr. Bennett said he was skeptical that a president-elect could claim executive privilege, Mr. Kendall said he thought Mr. Obama would clearly be covered because he was in the process of building a White House administration. But he agreed that ultimately Mr. Obama would have had to talk with investigators.

The important thing, Mr. Kendall said, would be to give the president-elect enough time to prepare with his lawyers so his testimony is as accurate as possible. If a president-elect, with so many issues on his plate, made an innocent mistake of recollection in his discussion with investigators, Mr. Kendall said, it would only cause more problems.

“This one doesn’t feel to me like one where there’s particular peril for the president-elect,” he said. “But you never know. And you have to have the time to adequately prepare it.”

    Obama Follows a Tradition of Testifying for Prosecutors, NYT, 26.12.2008, http://www.nytimes.com/2008/12/26/us/politics/26testify.html

Editorial

The World According to Cheney

December 23, 2008
The New Yorlk Times
 

Vice President Dick Cheney has a parting message for Americans: They should quit whining about all the things he and President Bush did to undermine the rule of law, erode the balance of powers between the White House and Congress, abuse prisoners and spy illegally on Americans. After all, he said, Franklin Roosevelt and Abraham Lincoln did worse than that.

So Mr. Cheney and Mr. Bush managed to stop short of repeating two of the most outrageous abuses of power in American history — Roosevelt’s decision to force Japanese-Americans into camps and Lincoln’s declaration of martial law to silence his critics? That’s not exactly a lofty standard of behavior.

Then again, it must be exhausting to rewrite history as much as Mr. Cheney has done in a series of exit interviews where he has made those comments. It seems as if everything went just great in the Bush years.

The invasion of Iraq was exactly the right thing to do, not an unnecessary war that required misleading Americans. The postinvasion period was not bungled to the point where Americans got shot up by an insurgency that the Bush team failed to see building.

The horrors at Abu Ghraib were not the result of the Pentagon’s decision to authorize abusive and illegal interrogation techniques, which Mr. Cheney endorsed. And only three men were subjected to waterboarding. (Future truth commissions take note.)

In Mr. Cheney’s reality, the crippling budget deficit was caused mainly by fighting two wars and by essential programs like “enhancing the security of our shipping container business.”

Well, no. The Bush team’s program to scan cargo for nuclear materials at air, land and sea ports has been mired in delays, cost overruns and questions about effectiveness. As for the deficit, the Congressional Budget Office has said the Bush-Cheney tax cuts for the wealthy were the biggest reason that the budget went into the red.

Some of Mr. Cheney’s comments were self-serving spin (as when The Washington Times helpfully prodded him to reveal that even though the world might have seen Mr. Bush as insensitive to the casualties of war, Mr. Cheney himself made a “secret” mission to comfort the families of the dead.)

Mr. Cheney was simply dishonest about Mr. Bush’s decision to authorize spying on Americans’ international calls without a warrant. He claimed the White House kept the Democratic and Republican Congressional leadership fully briefed on the program starting in late 2001. He said he personally ran a meeting at which “they were unanimous, Republican and Democrat alike” that the program was essential and did not require further Congressional involvement.

But in a July 17, 2003, letter to Mr. Cheney, Senator John Rockefeller IV, then vice chairman of the Senate Intelligence Committee, said he wanted to “reiterate” the concerns he expressed in “the meeting today.” He said “the activities we discussed raise profound oversight issues” and created “concern regarding the direction the Administration is moving with regard to security, technology and surveillance.”

Mr. Cheney mocked Vice President-elect Joseph Biden for saying that he does not intend to have his own “shadow government” in the White House. Mr. Cheney said it was up to Mr. Biden to decide if he wants “to diminish the office of vice president.”

Based on Mr. Cheney’s record and his standards for measuring these things, we’re certain a little diminishing of that office would be good for the country.

    The World According to Cheney, NYT, 23.12.2008, http://www.nytimes.com/2008/12/23/opinion/23tue1.html

As Outlook Dims, Obama Expands Recovery Plans

December 21, 2008
The New York Times
By JACKIE CALMES

WASHINGTON — Faced with worsening forecasts for the economy, President-elect Barack Obama is expanding his economic recovery plan and will seek to create or save 3 million jobs in the next two years, up from a goal of 2.5 million jobs set just last month, several advisers to Mr. Obama said Saturday.

Even Mr. Obama’s more ambitious goal would not fully offset as many as 4 million jobs that some economists are projecting might be lost in the coming year, according to the information he received from advisers in the past week. That job loss would be double the total this year and could push the nation’s unemployment rate past 9 percent if nothing is done.

The new job target was set after a meeting last Tuesday in which Christina D. Romer, who is Mr. Obama’s choice to lead his Council of Economic Advisers, presented information about previous recessions to establish that the current downturn was likely to be “more severe than anything we’ve experienced in the past half-century,” according to an Obama official familiar with the meeting. Officials said they were working on a plan big enough to stimulate the economy but not so big to provoke major opposition in Congress.

Mr. Obama’s advisers have projected that the multifaceted economic plan would cost $675 billion to $775 billion. It would be the largest stimulus package in memory and would most likely grow as it made its way through Congress, although Mr. Obama has secured Democratic leaders’ agreement to ban spending on pork-barrel projects.

The message from Mr. Obama was that “there was not going to be any spending money for the sake of spending money,” said Lawrence H. Summers, who will be the senior economic adviser in the White House.

Mark Zandi, chief economist of Moody’s Economy.com, who was an adviser to Senator John McCain’s presidential campaign, said, “My advice is, err on the side of too big a package rather than too little.” In an interview, Mr. Zandi, who lately has advised Democratic leaders in Congress, also said he would probably soon raise his own recommendation of a $600 billion stimulus.

Besides new spending, the Obama plan would provide tax relief for low-wage and middle-income workers of roughly $150 billion, Democrats familiar with the proposal said. The government would probably reduce the withholding of income or payroll taxes so that most workers received larger paychecks as soon as possible in 2009, an Obama adviser said.

The sorts of jobs Mr. Obama would propose to create involve construction work on roads, mass transit projects, weatherization of government buildings and installation of information technology in medical facilities, among others.

The outlines for Mr. Obama’s emerging plan, which he is developing in consultation with Congress, including some Republicans, were mostly settled last Tuesday when he met for four hours with economic and policy advisers. Mr. Obama and his family left Saturday for a two-week vacation in Hawaii, his native state, but the advisers will take his guidance — including instructions to be “bolder,” according to one — and complete a draft in time for his return on Jan. 2.

The new Congress convenes on Jan. 6. The House and Senate, with larger Democratic majorities, will work to pass a bill for Mr. Obama to sign shortly after his inauguration, on Jan. 20.

The Obama blueprint covers five main areas of spending and tax breaks: health, education, infrastructure, energy, and support for the poor and the unemployed.

Mr. Summers said the president-elect set short- and long-term themes in choosing the plan’s components: “Creating jobs for people who need them, and doing things that need to be done to lay the foundation for an economy that works for middle-class families.”

At the meeting on Tuesday, Ms. Romer also laid out recommendations from private sector analysts and liberal to conservative economists for a government stimulus that ranged from $800 billion to $1.3 trillion over two years. Those consulted included Martin Feldstein, a conservative economist and longtime Republican presidential adviser, who is at the low end, and Lawrence B. Lindsey, a Federal Reserve governor and Bush administration economist, who has recommended up to $1 trillion.

Even before the election, Mr. Feldstein was publicly arguing that whoever was elected should immediately begin working with Congress on a big spending package. Since then, Mr. Feldstein has also been revising his assessment upward as the economy weakened further. “Without action,” he wrote in an e-mail exchange, “the economy will continue to decline rapidly.”

Many decisions about the details have not been made, or are tentative pending consultations with Congress. Several hundred billion dollars could go to states and cities to finance public works and subsidize their health and education programs so that local governments do not have to raise taxes and cut essential programs, steps that would be counterproductive economically.

The Obama team has a list of $136 billion in infrastructure projects from the National Governors Association that consists mostly of transit construction but also includes port expansions and renewable energy programs. For education, besides money to build and renovate schools, Mr. Obama will call for money to train more teachers, expand early childhood education and provide more college tuition aid.

Federal money to local governments would come with a “use it or lose it” clause under Mr. Obama’s plans, advisers say. The president-elect will also propose to direct some money to public and private partnerships for major projects like a national energy grid intended to harness alternative energy sources such as wind power.

For those “most vulnerable” because of the recession, as the Obama team describes the needy and jobless population, the president-elect will propose expanding the length of unemployment compensation, as well as food aid and additional support.

With millions more Americans losing their health care coverage, either through job losses or because they can no longer afford to pay for insurance, Mr. Obama will propose major new spending to subsidize states’ share of Medicaid and their children’s health programs, and to expand health care coverage for those who lose insurance from their employers.

Mr. Obama plans a down payment on his campaign promise to help pay for hospitals and other medical providers to computerize their health records to save billions in paperwork and administrative costs. He might also propose subsidies to train more nurses, both to create jobs now and address a looming shortage in the health professions.

Mr. Obama has spoken in recent days with the Senate majority leader, Harry Reid, and the House speaker, Nancy Pelosi. Last week, Mr. Reid’s office sent an e-mail message to senators saying that in conversations with the Obama transition team, “we have communicated our willingness to work within these parameters as closely as possible and urge all offices to do the same.”

    As Outlook Dims, Obama Expands Recovery Plans, NYT, 21.12.2008, http://www.nytimes.com/2008/12/21/us/21stimulus.html?hp

The Reckoning

White House Philosophy Stoked Mortgage Bonfire

December 21, 2008
The New York Times
By JO BECKER, SHERYL GAY STOLBERG and STEPHEN LABATON

“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.” — President Bush, Oct. 15, 2002

WASHINGTON — The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”

It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.

The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.

Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.

“How,” he wondered aloud, “did we get here?”

Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed.

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone.

He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

Mr. Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Mr. Bush chose to oversee them — an old prep school buddy — pronounced the companies sound even as they headed toward insolvency.

As early as 2006, top advisers to Mr. Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Mr. Bush and his team misdiagnosed the reasons and scope of the downturn; as recently as February, for example, Mr. Bush was still calling it a “rough patch.”

The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.

“There is no question we did not recognize the severity of the problems,” said Al Hubbard, Mr. Bush’s former chief economics adviser, who left the White House in December 2007. “Had we, we would have attacked them.”

Looking back, Keith B. Hennessey, Mr. Bush’s current chief economics adviser, says he and his colleagues did the best they could “with the information we had at the time.” But Mr. Hennessey did say he regretted that the administration did not pay more heed to the dangers of easy lending practices. And both Mr. Paulson and his predecessor, John W. Snow, say the housing push went too far.

“The Bush administration took a lot of pride that homeownership had reached historic highs,” Mr. Snow said in an interview. “But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.”

For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security. The housing market was a bright spot: ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.

Lawrence B. Lindsay, Mr. Bush’s first chief economics adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Mr. Bush meet housing goals.

“No one wanted to stop that bubble,” Mr. Lindsay said. “It would have conflicted with the president’s own policies.”

Today, millions of Americans are facing foreclosure, homeownership rates are virtually no higher than when Mr. Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions.

As the economy has shed jobs — 533,000 last month alone — and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.

Never once, Mr. Paulson said in a recent interview, has Mr. Bush overruled him. “I’ve got a boss,” he explained, who “understands that when you’re dealing with something as unprecedented and fast-moving as this we need to have a different operating style.”

Mr. Paulson and other senior advisers to Mr. Bush say the administration has responded well to the turmoil, demonstrating flexibility under difficult circumstances. “There is not any playbook,” Mr. Paulson said.

The president declined to be interviewed for this article. But in recent weeks Mr. Bush has shared his views of how the nation came to the brink of economic disaster. He cites corporate greed and market excesses fueled by a flood of foreign cash — “Wall Street got drunk,” he has said — and the policies of past administrations. He blames Congress for failing to reform Fannie and Freddie. Last week, Fox News asked Mr. Bush if he was worried about being the Herbert Hoover of the 21st century.

“No,” Mr. Bush replied. “I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing.”

But in private moments, aides say, the president is looking inward. During a recent ride aboard Marine One, the presidential helicopter, Mr. Bush sounded a reflective note.

“We absolutely wanted to increase homeownership,” Tony Fratto, his deputy press secretary, recalled him saying. “But we never wanted lenders to make bad decisions.”

A Policy Gone Awry

Darrin West could not believe it. The president of the United States was standing in his living room.

It was June 17, 2002, a day Mr. West recalls as “the highlight of my life.” Mr. Bush, in Atlanta to unveil a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.

Mr. West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment — just the sort of creative public-private financing Mr. Bush was promoting.

“Part of economic security,” Mr. Bush declared that day, “is owning your own home.”

A lot has changed since then. Mr. West, beset by personal problems, left Atlanta. Unable to sell his home for what he owed, he said, he gave it back to the bank last year. Like other communities across America, Park Place South has been hit with a foreclosure crisis affecting at least 10 percent of its 232 homes, according to Masharn Wilson, a developer who led Mr. Bush’s tour.

“I just don’t think what he envisioned was actually carried out,” she said.

Park Place South is, in microcosm, the story of a well-intentioned policy gone awry. Advocating homeownership is hardly novel; the Clinton administration did it, too. For Mr. Bush, it was part of his vision of an “ownership society,” in which Americans would rely less on the government for health care, retirement and shelter. It was also good politics, a way to court black and Hispanic voters.

But for much of Mr. Bush’s tenure, government statistics show, incomes for most families remained relatively stagnant while housing prices skyrocketed. That put homeownership increasingly out of reach for first-time buyers like Mr. West.

So Mr. Bush had to, in his words, “use the mighty muscle of the federal government” to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.

Concerned that down payments were a barrier, Mr. Bush persuaded Congress to spend up to $200 million a year to help first-time buyers with down payments and closing costs.

And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down. Republican Congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as Mr. West did. Many economic experts, including some in the White House, now share that view.

The president also leaned on mortgage brokers and lenders to devise their own innovations. “Corporate America,” he said, “has a responsibility to work to make America a compassionate place.”

And corporate America, eyeing a lucrative market, delivered in ways Mr. Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment.

“This administration made decisions that allowed the free market to operate as a barroom brawl instead of a prize fight,” said L. William Seidman, who advised Republican presidents and led the savings and loan bailout in the 1990s. “To make the market work well, you have to have a lot of rules.”

But Mr. Bush populated the financial system’s alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
 

Like Minds on Laissez-Faire

The president’s first chairman of the Securities and Exchange Commission promised a “kinder, gentler” agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general’s report.

As for Mr. Bush’s banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.

The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina’s attorney general, said, “They took 50 sheriffs off the beat at a time when lending was becoming the Wild West.”

The president did push rules aimed at forcing lenders to more clearly explain loan terms. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.

In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Mr. Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not finalize the new rules until last month.

Among the Republican Party’s top 10 donors in 2004 was Roland Arnall. He founded Ameriquest, then the nation’s largest lender in the subprime market, which focuses on less creditworthy borrowers. In July 2005, the company agreed to set aside $325 million to settle allegations in 30 states that it had preyed on borrowers with hidden fees and ballooning payments. It was an early signal that deceptive lending practices, which would later set off a wave of foreclosures, were widespread.

Andrew H. Card Jr., Mr. Bush’s former chief of staff, said White House aides discussed Ameriquest’s troubles, though not what they might portend for the economy. Mr. Bush had just nominated Mr. Arnall as his ambassador to the Netherlands, and the White House was primarily concerned with making sure he would be confirmed.

“Maybe I was asleep at the switch,” Mr. Card said in an interview.

Brian Montgomery, the Federal Housing Administration commissioner, understood the significance. His agency insures home loans, traditionally for the same low-income minority borrowers Mr. Bush wanted to help. When he arrived in June 2005, he was shocked to find those customers had been lured away by the “fool’s gold” of subprime loans. The Ameriquest settlement, he said, reinforced his concern that the industry was exploiting borrowers.

In December 2005, Mr. Montgomery drafted a memo and brought it to the White House. “I don’t think this is what the president had in mind here,” he recalled telling Ryan Streeter, then the president’s chief housing policy analyst.

It was an opportunity to address the risky subprime lending practices head on. But that was never seriously discussed. More senior aides, like Karl Rove, Mr. Bush’s chief political strategist, were wary of overly regulating an industry that, Mr. Rove said in an interview, provided “a valuable service to people who could not otherwise get credit.” While he had some concerns about the industry’s practices, he said, “it did provide an opportunity for people, a lot of whom are still in their houses today.”

The White House pursued a narrower plan offered by Mr. Montgomery that would have allowed the F.H.A. to loosen standards so it could lure back subprime borrowers by insuring similar, but safer, loans. It passed the House but died in the Senate, where Republican senators feared that the agency would merely be mimicking the private sector’s risky practices — a view Mr. Rove said he shared.

Looking back at the episode, Mr. Montgomery broke down in tears. While he acknowledged that the bill did not get to the root of the problem, he said he would “go to my grave believing” that at least some homeowners might have been spared foreclosure.

Today, administration officials say it is fair to ask whether Mr. Bush’s ownership push backfired. Mr. Paulson said the administration, like others before it, “over-incented housing.” Mr. Hennessey put it this way: “I would not say too much emphasis on expanding homeownership. I would say not enough early focus on easy lending practices.”

‘We Told You So’

Armando Falcon Jr. was preparing to take on a couple of giants.

A soft-spoken Texan, Mr. Falcon ran the Office of Federal Housing Enterprise Oversight, a tiny government agency that oversaw Fannie Mae and Freddie Mac, two pillars of the American housing industry. In February 2003, he was finishing a blockbuster report that warned the pillars could crumble.

Created by Congress, Fannie and Freddie — called G.S.E.’s, for government-sponsored entities — bought trillions of dollars’ worth of mortgages to hold or sell to investors as guaranteed securities. The companies were also Washington powerhouses, stuffing lawmakers’ campaign coffers and hiring bare-knuckled lobbyists.

Mr. Falcon’s report outlined a worst-case situation in which Fannie and Freddie could default on debt, setting off “contagious illiquidity in the market” — in other words, a financial meltdown. He also raised red flags about the companies’ soaring use of derivatives, the complex financial instruments that economic experts now blame for spreading the housing collapse.

Today, the White House cites that report — and its subsequent effort to better regulate Fannie and Freddie — as evidence that it foresaw the crisis and tried to avert it. Bush officials recently wrote up a talking points memo headlined “G.S.E.’s — We Told You So.”

But the back story is more complicated. To begin with, on the day Mr. Falcon issued his report, the White House tried to fire him.

At the time, Fannie and Freddie were allies in the president’s quest to drive up homeownership rates; Franklin D. Raines, then Fannie’s chief executive, has fond memories of visiting Mr. Bush in the Oval Office and flying aboard Air Force One to a housing event. “They loved us,” he said.

So when Mr. Falcon refused to deep-six his report, Mr. Raines took his complaints to top Treasury officials and the White House. “I’m going to do what I need to do to defend my company and my position,” Mr. Raines told Mr. Falcon.

Days later, as Mr. Falcon was in New York preparing to deliver a speech about his findings, his cellphone rang. It was the White House personnel office, he said, telling him he was about to be unemployed.

His warnings were buried in the next day’s news coverage, trumped by the White House announcement that Mr. Bush would replace Mr. Falcon, a Democrat appointed by Bill Clinton, with Mark C. Brickell, a leader in the derivatives industry that Mr. Falcon’s report had flagged.

It was not until 2003, when Freddie became embroiled in an accounting scandal, that the White House took on the companies in earnest. Mr. Bush decided to quit the long-standing practice of rewarding supporters with high-paying appointments to the companies’ boards — “political plums,” in Mr. Rove’s words. He also withdrew Mr. Brickell’s nomination and threw his support behind Mr. Falcon, beginning an intense effort to give his little regulatory agency more power.

Mr. Falcon lacked explicit authority to limit the size of the companies’ mammoth investment portfolios, or tell them how much capital they needed to guard against losses. White House officials wanted that to change. They also wanted the power to put the companies into receivership, hoping that would end what Mr. Card, the former chief of staff, called “the myth of government backing,” which gave the companies a competitive edge because investors assumed the government would not let them fail.

By the spring of 2005 a deal with Congress seemed within reach, Mr. Snow, the former Treasury secretary, said in an interview.

Michael G. Oxley, an Ohio Republican and then-chairman of the House Financial Services Committee, had produced what Mr. Snow viewed as “a pretty darned good bill,” a watered-down version of what the president sought. But at the urging of Mr. Card and the White House economics team, the president decided to hold out for a tougher bill in the Senate.

Mr. Card said he feared that Mr. Snow was “more interested in the deal than the result.” When the bill passed the House, the president issued a statement opposing it, effectively killing any chance of compromise. Mr. Oxley was furious.

“The problem with those guys at the White House, they had all the answers and they didn’t think they had to listen to anyone, including the Treasury secretary,” Mr. Oxley said in a recent interview. “They were driving the ideological train. He was in the caboose, and they were in the engine room.”

Mr. Card and Mr. Hennessey said they had no regrets. They are convinced, Mr. Hennessey said, that the Oxley bill would have produced “the worst of all possible outcomes,” the illusion of reform without the substance.

Still, some former White House and Treasury officials continue to debate whether Mr. Bush’s all-or-nothing approach scuttled a measure that, while imperfect, might have given an aggressive regulator enough power to keep the companies from failing.

Mr. Snow, for one, calls Mr. Oxley “a hero,” adding, “He saw the need to move. It didn’t get done. And it’s too bad, because I think if it had, I think we could well have avoided a big contributor to the current crisis.”

Unheeded Warnings

Jason Thomas had a nagging feeling.

The New Century Financial Corporation, a huge subprime lender whose mortgages were bundled into securities sold around the world, was headed for bankruptcy in March 2007. Mr. Thomas, an economic analyst for President Bush, was responsible for determining whether it was a hint of things to come.

At 29, Mr. Thomas had followed a fast-track career path that took him from a Buffalo meatpacking plant, where he worked as a statistician, to the White House. He was seen as a whiz kid, “a brilliant guy,” his former boss, Mr. Hubbard, says.

As Mr. Thomas began digging into New Century’s failure that spring, he became fixated on a particular statistic, the rent-to-own ratio.

Typically, as home prices increase, rental costs rise proportionally. But Mr. Thomas sent charts to top White House and Treasury officials showing that the monthly cost of owning far outpaced the cost to rent. To Mr. Thomas, it was a sign that housing prices were wildly inflated and bound to plunge, a condition that could set off a foreclosure crisis as conventional and subprime borrowers with little equity found they owed more than their houses were worth.

It was not the Bush team’s first warning. The previous year, Mr. Lindsay, the former chief economics adviser, returned to the White House to tell his old colleagues that housing prices were headed for a crash. But housing values are hard to evaluate, and Mr. Lindsay had a reputation as a market pessimist, said Mr. Hubbard, adding, “I thought, ‘He’s always a bear.’ ”

In retrospect, Mr. Hubbard said, Mr. Lindsay was “absolutely right,” and Mr. Thomas’s charts “should have been a signal.”

Instead, the prevailing view at the White House was that the problems in the housing market were limited to subprime borrowers unable to make their payments as their adjustable mortgages reset to higher rates. That belief was shared by Mr. Bush’s new Treasury secretary, Mr. Paulson.

Mr. Paulson, a former chairman of the Wall Street firm Goldman Sachs, had been given unusual power; he had accepted the job only after the president guaranteed him that Treasury, not the White House, would have the dominant role in shaping economic policy. That shift merely continued an imbalance of power that stifled robust policy debate, several former Bush aides say.

Throughout the spring of 2007, Mr. Paulson declared that “the housing market is at or near the bottom,” with the problem “largely contained.” That position underscored nearly every action the Bush administration took in the ensuing months as it offered one limited response after another.

By that August, the problems had spread beyond New Century. Credit was tightening, amid questions about how heavily banks were invested in securities linked to mortgages. Still, Mr. Bush predicted that the turmoil would resolve itself with a “soft landing.”

The plan Mr. Bush announced on Aug. 31 reflected that belief. Called “F.H.A. Secure,” it aimed to help about 80,000 homeowners refinance their loans. Mr. Montgomery, the housing commissioner, said that he knew the modest program was not enough — the White House later expanded the agency’s rescue role — and that he would be “flying the plane and fixing it at the same time.”

That fall, Representative Rahm Emanuel, a leading Democrat, former investment banker and now the incoming chief of staff to President-elect Barack Obama, warned the White House it was not doing enough. He said he told Joshua B. Bolten, Mr. Bush’s chief of staff, and Mr. Paulson in a series of phone calls that the credit crisis would get “deep and serious” and that the only answer was big, internationally coordinated government intervention.

“You got to strangle this thing and suffocate it,” he recalled saying.

Instead, Mr. Bush developed Hope Now, a voluntary public-private partnership to help struggling homeowners refinance loans. And he worked with Congress to pass a stimulus package that sent taxpayers $150 billion in tax rebates.

In a speech to the Economic Club of New York in March 2008, he cautioned against Washington’s temptation “to say that anything short of a massive government intervention in the housing market amounts to inaction,” adding that government action could make it harder for the markets to recover.

Dominoes Start to Fall

Within days, Bear Sterns collapsed, prompting the Federal Reserve to engineer a hasty sale. Some economic experts, including Timothy F. Geithner, the president of the New York Federal Reserve Bank (and Mr. Obama’s choice for Treasury secretary) feared that Fannie Mae and Freddie Mac could be the next to fall.

Mr. Bush was still leaning on Congress to revamp the tiny agency that oversaw the two companies, and had acceded to Mr. Paulson’s request for the negotiating room that he had denied Mr. Snow. Still, there was no deal.

Over the previous two years, the White House had effectively set the agency adrift. Mr. Falcon left in 2005 and was replaced by a temporary director, who was in turn replaced by James B. Lockhart, a friend of Mr. Bush from their days at Andover, and a former deputy commissioner of the Social Security Administration who had once run a software company.

On Mr. Lockhart’s watch, both Freddie and Fannie had plunged into the riskiest part of the market, gobbling up more than $400 billion in subprime and other alternative mortgages. With the companies on precarious footing, Mr. Geithner had been advocating that the administration seize them or take other steps to reassure the market that the government would back their debt, according to two people with direct knowledge of his views.

In an Oval Office meeting on March 17, however, Mr. Paulson barely mentioned the idea, according to several people present. He wanted to use the troubled companies to unlock the frozen credit market by allowing Fannie and Freddie to buy more mortgage-backed securities from overburdened banks. To that end, Mr. Lockhart’s office planned to lift restraints on the companies’ huge portfolios — a decision derided by former White House and Treasury officials who had worked so hard to limit them.

But Mr. Paulson told Mr. Bush the companies would shore themselves up later by raising more capital.

“Can they?” Mr. Bush asked.

“We’re hoping so,” the Treasury secretary replied.

That turned out to be incorrect, and did not surprise Mr. Thomas, the Bush economic adviser. Throughout that spring and summer, he warned the White House and Treasury that, in the stark words of one e-mail message, “Freddie Mac is in trouble.” And Mr. Lockhart, he charged, was allowing the company to cover up its insolvency with dubious accounting maneuvers.

But Mr. Lockhart continued to offer reassurances. In a July appearance on CNBC, he declared that the companies were well managed and “worsts were not coming to worst.” An infuriated Mr. Thomas sent a fresh round of e-mail messages accusing Mr. Lockhart of “pimping for the stock prices of the undercapitalized firms he regulates.”

Mr. Lockhart defended himself, insisting in an interview that he was aware of the companies’ vulnerabilities, but did not want to rattle markets.

“A regulator,” he said, “does not air dirty laundry in public.”

Soon afterward, the companies’ stocks lost half their value in a single day, prompting Congress to quickly give Mr. Paulson the power to spend $200 billion to prop them up and to finally pass Mr. Bush’s long-sought reform bill, but it was too late. In September, the government seized control of Freddie Mac and Fannie Mae.

In an interview, Mr. Paulson said the administration had no justification to take over the companies any sooner. But Mr. Falcon disagreed: “They absolutely could have if they had thought there was a real danger.”

By Sept. 18, when Mr. Bush and his team had their fateful meeting in the Roosevelt Room after the failure of Lehman Brothers and the emergency rescue of A.I.G., Mr. Paulson was warning of an economic calamity greater than the Great Depression. Suddenly, historic government intervention seemed the only option. When Mr. Paulson spelled out what would become a $700 billion plan to rescue the nation’s banking system, the president did not hesitate.

“Is that enough?” Mr. Bush asked.

“It’s a lot,” the Treasury secretary recalled replying. “It will make a difference.” And in any event, he told Mr. Bush, “I don’t think we can get more.”

As the meeting wrapped up, a handful of aides retreated to the White House Situation Room to call Vice President Dick Cheney in Florida, where he was attending a fund-raiser. Mr. Cheney had long played a leading role in economic policy, though housing was not a primary interest, and like Mr. Bush he had a deep aversion to government intervention in the market. Nonetheless, he backed the bailout, convinced that too many Americans would suffer if Washington did nothing.

Mr. Bush typically darts out of such meetings quickly. But this time, he lingered, patting people on the back and trying to soothe his downcast staff. “During times of adversity, he bucks everybody up,” Mr. Paulson said.

It was not the end of the failures or government interventions; the administration has since stepped in to rescue Citigroup and, just last week, the Detroit automakers. With 31 days left in office, Mr. Bush says he will leave it to historians to analyze “what went right and what went wrong,” as he put it in a speech last week to the American Enterprise Institute.

Mr. Bush said he was too focused on the present to do much looking back.

“It turns out,” he said, “this isn’t one of the presidencies where you ride off into the sunset, you know, kind of waving goodbye.”

Kitty Bennett contributed reporting.

    White House Philosophy Stoked Mortgage Bonfire, NYT, 21.12.2008, http://www.nytimes.com/2008/12/21/business/21admin.html?hp

A Portrait of a Politician: Vengeful and Profane

December 10, 2008
The New York Times
By SUSAN SAULNY

CHICAGO — Little in Gov. Rod R. Blagojevich’s background prepared the people of Illinois for the man who was revealed in the criminal complaint that dropped like a bombshell here on Tuesday. Delusional, narcissistic, vengeful and profane, Mr. Blagojevich as portrayed by federal prosecutors shocked even his most ardent detractors.

“I almost fell over,” said Cindi Canary, executive director of the Illinois Campaign for Political Reform and a frequent critic of the governor. “I was speechless and sickened. In all of the millions of indictments I’ve read over the last years, I can’t remember anything as vile as this.”

Mike Jacobs, a Democratic state senator and former friend of the governor, suggested that Mr. Blagojevich may have lost his grip on reality.

“I’m not sure he’s playing with a full deck anymore,” Mr. Jacobs said. “I think he brought a lot of this on himself. He’s so gifted, but so flawed in a number of fundamental areas. It’s like he dared the feds to come get him.”

Drama and suspicion have long surrounded Mr. Blagojevich, a 51-year-old Democrat known locally for his quirky love of Elvis and a big black signature hairstyle of his own. Though he ran for office as a reformer, he has been embroiled for years in a federal investigation into hiring fraud that included multiple departments under his purview.

More recently, his reputation was left badly damaged after the corruption trial of the political fund-raiser Antoin Rezko, who was convicted in June of fraud and bribery among other charges. Mr. Blagojevich’s name and administration surfaced again and again during Mr. Rezko’s highly publicized trial in Chicago. The governor’s approval rating, according to The Chicago Tribune, had sunk to 13 percent.

Yet, despite what looked like his lead role over many years in a political theater of the absurdly corrupt, Mr. Blagojevich, the seemingly earnest son of a Serbian steelworker, was not charged with any wrongdoing. Rumors swirled, and denials were issued.

Tuesday changed all that. It was not simply the extortion and venality with which he was charged that left mouths gaping, but the ruthlessness and grandiosity revealed in the federal wiretap transcripts, even as he knew he was being investigated.

“You might have thought in that environment that pay to play would slow down,” the United States attorney in Chicago, Patrick J. Fitzgerald, said at a news conference announcing the charges. “The opposite happened: it sped up. Governor Blagojevich and others were working furiously to get as much money from contractors, shaking them down, pay to play, before the end of the year.”

In the words of Dick W. Simpson, head of the political science department at the University of Illinois, Chicago, and a former city alderman: “It’s over the top, even for the governor.”

Ms. Canary, the reform advocate, said she was trying to figure out the pathology that might explain such actions because they are not part of the classic style of Chicago corruption.

“He was raised in the old Chicago ward system where the most important principle is loyalty,” she said. “It’s about protecting one another, spreading perks, and earning personal power. It’s not about huge personal enrichment.”

But that, according to the 76-page criminal complaint, seems to be exactly what Mr. Blagojevich, who cast himself as a man of the people, was after.

Whatever his current motivation, he came into office with a very different persona. As a young congressman representing the North Side of Chicago, Mr. Blagojevich was pegged as a rising star with a populist touch. Undistinguished as a lawmaker but with proven likability in and out of Chicago, he seemed hellbent on pushing reform and cleaning house in a state with an embarrassingly overt culture of political corruption.

Running on a do-good theme as a candidate of change, he swept into the governor’s office earlier this decade mainly on promises that he would be different, that he would restore integrity to the governor’s office after the previous chief executive, George Ryan, was sentenced to six and a half years in federal prison for racketeering and fraud.

“Tonight, ladies and gentlemen, Illinois has voted for change,” he told a crowd at his victory party on election night in 2002.

Back then, it was not a secret that Mr. Blagojevich had big dreams for himself that included the White House. The federal complaint suggested that he was disenchanted with being “stuck” as governor, and had his eyes still trained on the presidency — in 2016, since 2008 was a lost cause.

Kent Redfield, a professor of political science at the University of Illinois at Springfield, said Mr. Blagojevich had clearly come into office believing he was destined for bigger things, and may have been tripped up by that ambition.

“The combination of arrogance and stupidity that would prompt him to continue in these types of behaviors is just stunning,” Dr. Redfield said. “There’s no feedback loop or reality check.”

Mr. Blagojevich had grown increasingly isolated in recent years, particularly from his own state’s Legislature and even from his father-in-law, Dick Mell, a powerful longtime Chicago alderman who showed him the political ropes as a younger man.

The governor was rarely seen around his offices in Chicago and Springfield, preferring instead to spend time at home on the North Side.

“I believe he became a prisoner of his own home,” Mr. Jacobs said.

Dr. Redfield said he had little sympathy for a man who regarded “the state of Illinois like it’s a big Chicago ward, where a U.S. Senate seat is like granting a zoning variance or liquor license.”

He added: “The damage to the state, it’s going to take a long time to dig out.”

    A Portrait of a Politician: Vengeful and Profane, NYT, 10.12.2008, http://www.nytimes.com/2008/12/10/us/10blago.html?hp

Obama Warns of Further Economic Pain

December 8, 2008
The New York Times
By BRIAN KNOWLTON

WASHINGTON — Saying that the United States economy was likely to worsen before it improves, President-elect Barack Obama on Sunday pledged to pursue a recovery plan “equal to the task ahead,” including the creation of a vast public-works program not just built around bridge and highway projects, but on creating “green jobs” and disseminating new technologies.

Even if the current economic crisis looks nothing like the Great Depression, Mr. Obama said, “This is a big problem, and it’s going to get worse.”

In a pre-taped interview with NBC’s “Meet the Press,” Mr. Obama said that the survival of the domestic automobile industry was important; yet he said that any bailout should be tied to a reinvention and streamlining by Detroit to create an industry “that really works.”

With Congress expected to act within days on the automakers’ urgent pleas for help, Mr. Obama said the auto industry had made “repeated, strategic mistakes,” but that “I don’t think it’s an option to simply allow it to collapse.” He reiterated his position about the auto industry during a news conference later in the day.

“I think Congress is doing exactly the right thing by asking for a conditions-based assistance package that holds the auto industry’s feet to the fire,” he said. Asked whether the automakers’ top executives should lose their jobs if they fail to perform, Mr. Obama took a tough position.

“If this management team that’s currently in place doesn’t understand the urgency of the situation and is not willing to make tough choices and adapt to new circumstances,” he said, “then they should go.”

As his transition team formulates its plans for recovery from one of the deepest economic declines in decades, Mr. Obama promised far tougher regulation of the financial sector.

“As part of our economic recovery package, what you will see coming out of my administration right at the center,” he said, “is a strong set of new financial regulations, in which banks, ratings agencies, mortgage brokers, a whole bunch of folks start having to be much more accountable and behave much more responsibly.”

He also said that he was disappointed that the current administration had not moved more decisively to ease the plight of troubled home owners, and said he would make it a top priority to help them.

The president-elect reiterated his pledge to give tax cuts to 95 percent of Americans, and he said that the days of the rich benefiting disproportionately while the middle class loses ground were a “real aberration.” He would not say whether he favored raising taxes quickly on the wealthiest Americans, or waiting for the Bush tax cuts to expire in 2011, to the same effect.

With jobs evaporating and the recession deepening, the biggest news Mr. Obama made over the weekend, laid out in an address on Saturday, probably came in the details he offered for the recovery program he is trying to fashion with congressional leaders in hopes of being able to enact it shortly after being sworn in on Jan. 20.

It would be, he told NBC, “the largest infrastructure program in roads and bridges and other traditional infrastructure since the building of the federal highway system in the 1950s.”

His address followed a report on Friday indicating that the country lost 533,000 jobs in November alone, bringing the total number of jobs lost over the past year to nearly 2 million.

Mr. Obama would not put a dollar value on his proposed works program, but said the key in deciding which projects to fund would be not “the old, traditional politics” but in determining how the government would get “the most bang for the buck” while assuring accountability.

Mr. Obama’s wide-ranging NBC interview was aired a few hours before an afternoon news conference at which he said he would nominate General Eric Shinseki as the new secretary of veterans affairs. The general had a falling out with the Bush administration after saying before the invasion of Iraq that the occupation would require hundreds of thousands of American troops.

“He was right,” Mr. Obama told NBC’s Tom Brokaw. Mr. Obama sidestepped Mr. Brokaw’s question about the pace of a troop withdrawal from Iraq, saying he would confer with . generals on a plan “for a responsible drawdown.” He has hinted that his planned 16-month withdrawal of combat troops might be adjusted based on the generals’ advice.

He reiterated his intention to pursue “tough but direct” diplomacy with Iran over its nuclear program.

And, at a time of considerable tension with Russia, he said that his administration would “reset U.S.-Russia relations” — without offering any elaboration of how he planned to do that.

Despite the bleak economic picture awaiting him, Mr. Obama sought to project an air of determined optimism.

“I am absolutely confident,” he said during his afternoon news conference, “that if we take the right steps over the coming months, that not only can we get the economy back on track, but we can emerge leaner, meaner and ultimately more competitive and more prosperous.”

Peter Baker and John M. Broder contributed reporting.

    Obama Warns of Further Economic Pain, NYT, 8.12.2008, http://www.nytimes.com/2008/12/08/us/politics/08obama.html

Obama Hauls in Record $750 Million for Campaign

December 5, 2008
The New York Times
By MICHAEL LUO

President-elect Barack Obama brought in nearly $750 million for his presidential campaign, a record amount that exceeds what all of the candidates combined collected in private donations in the previous race for the White House, according to a report filed Thursday with the Federal Election Commission.

Underscoring the success of his fund-raising, Mr. Obama reported that he had nearly $30 million in the bank as of Nov. 24, despite spending furiously at the end of his campaign.

Mr. Obama, who became the first major-party nominee to bypass public financing since the system began in the 1970s, spent more than $136 million from Oct. 16 to Nov. 24, the period covered in the report. By comparison, his Republican opponent, Senator John McCain, who was limited to the $84 million allotted to him from the Treasury under public financing, spent $26.5 million during that time, according to his latest campaign finance report. Although Mr. McCain had $4 million left over, he had $4.9 million in debt, the report said.

Mr. Obama reported taking in $104 million in contributions. Assuming most of that money came in before Election Day, Nov. 4, it appears his fund-raising stepped up significantly as the campaign drew to a close. In the first half of October, he raised just $36 million.

An exact figure is difficult to calculate because of vagaries in the way fund-raising numbers are reported. But it appears that Mr. Obama raised over $300 million for the general election alone — more than triple what Mr. McCain had at his disposal from public financing.

When Mr. Obama decided after he clinched the Democratic nomination to forgo public financing, campaign officials said they needed to raise at least twice as much as they would receive in public money, with a goal of raising three times as much, to make it worth the added time away from campaigning that he needed to devote to fund-raising.

Mr. Obama’s fund-raising total — fueled by both small donors giving incremental amounts online and large donors who were wined and dined and given the chance to mingle with him — appeared to more than validate his campaign’s gamble.

Indeed, it could very well mark the epitaph to the public financing system, which critics have long declared is badly in need of updating to stay relevant in presidential elections.

At a minimum, it sets an imposing bar for any potential Republican challenger to Mr. Obama in 2012.

“Assuming Obama runs again and his fund-raising prowess is sustained, then it will be a daunting undertaking for any opponent,” said Kenneth Gross, a campaign finance lawyer at Skadden, Arps, Slate, Meagher & Flom.

In one illustration of the scope of Mr. Obama’s fund-raising haul, all the candidates running for president in 2004, including President Bush and Senator John Kerry, the Democratic nominee, together collected less than $650 million, not counting the money received under public financing during the primary and the general elections, according to Federal Election Commission figures.

Mr. McCain collected less than $220 million for the campaign’s primary phase, compared with the more than $410 million that Mr. Obama did in that period.

In the final two months of the race, the Obama campaign spent nearly $170 million on television advertising, compared with $61 million by the McCain campaign, according to the Campaign Media Analysis Group, which tracks advertising spending.

Mr. McCain had hoped that money raised by the Republican National Committee, which was able to spend on his behalf under certain restrictions, could help compensate for his financial disparity with Mr. Obama. But the R.N.C. only spent another $31 million on advertising, which left Mr. McCain still facing a large deficit on television.

Obama officials said their final tally of individual contributors surpassed 3.95 million, including 547,000 new contributors in the period covered by their latest finance report.

It is unclear what Mr. Obama plans to do with the leftover money. In 2004, when Mr. Kerry reported that he had more than $14 million remaining in his account for the primaries, some Democratic officials reacted in anger and disbelief that he had not spent all of his resources. Kerry officials said they had reserved some money to pay for a recount or legal challenges.

That type of second-guessing is less likely this time because Mr. Obama won. He has several options for his remaining cash, Mr. Gross said, like transferring it to the Democratic National Committee or another party committee, or rolling it over to his 2012 re-election campaign.

What is not an option for Mr. Obama is to help Senator Hillary Rodham Clinton with paying off the debt from her campaign for the Democratic presidential nomination.

According to reports filed last month, Mrs. Clinton is still struggling to retire about $7.5 million, and she faces fund-raising constraints should Congress approve her as secretary of state in the Obama administration. Mr. Gross said the most the Obama campaign could transfer to her was $2,000.

    Obama Hauls in Record $750 Million for Campaign, NYT, 5.12.2008, http://www.nytimes.com/2008/12/05/us/politics/05donate.html?hp

Editorial

Gloom, but Not Doom

December 4, 2008
The New York Times

There’s been a fair amount of hand-wringing since the nation’s intelligence community surveyed the world of 2025: America losing dominance; China and India rising; fierce competition for water, food and energy; increased danger that terrorists will get a nuclear weapon.

That’s all sobering. But the headlines from “Global Trends 2025: A Transformed World,” published by the National Intelligence Council, are not the whole story.

President-elect Barack Obama is inheriting a world that is more complicated and more frightening than the one George W. Bush found in 2001. But while the trends may be apparent, the end results are not inevitable. Decisions Mr. Obama and other leaders make will matter more.

Take the assertion that the world is on a path to a multipolar system with China, India and Russia plus various businesses, tribes, religious groups — even criminal networks — vying for influence.

Commentators have been predicting this dreaded multipolarity since the end of the cold war. And Vice President Dick Cheney and former Deputy Defense Secretary Paul Wolfowitz notably vowed to do everything they could to head it off — up to and including ensuring that close European allies never aspired to power and influence to rival the United States.

That arrogance and bullheadedness has instead weakened this country — creating new enemies and making it harder to win cooperation on important challenges, like the fight against the Taliban and Al Qaeda in Afghanistan. If there is one clear lesson from the last eight years, it is that bullying other countries — and jockeying for zero-sum gains — doesn’t work.

It also is the new conventional wisdom that this will be the century of China or India. But both face serious economic, demographic and other challenges — including the threat of terrorism, as the Mumbai attacks so tragically demonstrated.

A relative decline in power also does not mean that the United States will not remain powerful. This country can and must continue to lead. There will be a particular premium on quick, nimble and farsighted decision-making and cooperation.

Giving rising powers a bigger role — in the United Nations Security Council, for instance — could help persuade them to take more responsibility for problems like terrorism, climate change, nonproliferation and energy security.

The report suggests that Al Qaeda’s indiscriminate use of violence and its failure to focus on problems like poverty and unemployment could diminish its appeal. But other extremist groups that curry favor with social programs will likely have more staying power. The next administration will have to counter their influence by promoting economic development in the Middle East as well as a lasting peace between Israelis and Palestinians. Warnings that terrorists will have an easier time acquiring nuclear, biological and advanced conventional weapons argue for serious new initiatives to control the spread of these horrifying weapons.

Mr. Obama appears to understand the challenges. So do some of the experts who are expected to be part of his administration, including Susan Rice, his choice for ambassador to the United Nations, and James Steinberg, reported to be on the short list for deputy secretary of state. As members of a group called the Phoenix Initiative, they spent several years formulating a concept of American strategic leadership for the 21st century.

Their report on the concept states that “leadership is not an entitlement; it has to be earned and sustained. Leadership that serves common goals is the best way to inspire the many different peoples of the world to make shared commitments.” That is a good place to start.

    Gloom, but Not Doom, NYT, 4.12.2008, http://www.nytimes.com/2008/12/04/opinion/04thu1.html

Military Analysis

Afghan Strategy Poses Stiff Challenge for Obama

December 2, 2008
The New York Times
By MICHAEL R. GORDON

WASHINGTON — One of the most difficult challenges President-elect Barack Obama’s national security team faces is Mr. Obama’s vow to send thousands of American troops to help defeat the Taliban in Afghanistan.

Military experts agree that more troops are required to carry out an effective counterinsurgency campaign, but they also caution that the reinforcements are unlikely to lead to the sort of rapid turnaround that the so-called troop surge in Iraq produced after its start in 2007.

After seven years of war, Afghanistan presents a unique set of problems: a rural-based insurgency, an enemy sanctuary in neighboring Pakistan, the chronic weakness of the Afghan government, a thriving narcotics trade, poorly developed infrastructure, and forbidding terrain.

American intelligence reports underscore the seriousness of the threat. From August through October, the average number of daily attacks by insurgents exceeded those in Iraq, the first time the violence in Afghanistan had outpaced the fighting in Iraq since the start of the American occupation in May 2003. Almost half of the insurgents’ attacks were directed against American and other foreign forces, while the remainder were focused on Afghan security forces and civilians.

“Afghanistan may be the ‘good war,’ but it is also the harder war,” said David J. Kilcullen, a former officer in the Australian Army who recently left his job as Secretary of State Condoleezza Rice’s senior adviser on counterinsurgency issues.

During the Bush administration, the Afghan conflict has taken a back seat to Iraq, where the American military struggled to combat a virulent insurgency and tamp down an explosion of sectarian violence. According to the latest data from the military command in Baghdad, violence in Iraq has been rolled back to the levels of early 2004.

But violence in Afghanistan has climbed. The 267 allied military deaths this year are the most ever. (The monthly total peaked at 46 in June and August but dropped to 12 in November, partly because of seasonal variations in the fighting, according to a count by icasualties.org.)

Declaring Afghanistan to be the central front in the struggle against terrorism, Mr. Obama talked during the campaign of sending at least two more combat brigades to Afghanistan — in effect staking the reputation of his new national security team on the outcome of that war, which appears to be stalemated, at best.

Mr. Obama and his aides have yet to outline a strategy for precisely how many reinforcements would be sent and how specifically they would be employed.

But the Pentagon is already planning to send more than 20,000 additional troops in response to a request from Gen. David D. McKiernan, the top commander in Afghanistan. Pentagon officials say that force would include four combat brigades, an aviation brigade equipped with attack and troop-carrying helicopters, reconnaissance units, support troops and trainers for the Afghan Army and the police.

The first of the combat brigades is to deploy in the eastern part of Afghanistan, while the rest of the brigades are expected to be sent to southern and southwestern Afghanistan. All told, it would increase the number of American troops in Afghanistan to about 58,000 from the current level of 34,000, and add to the approximately 30,000 other foreign troops who are operating there under a NATO-led command.

The Pentagon schedule for sending the troops bears little resemblance to the 2007 buildup in Iraq. Pentagon officials said it would take 12 to 18 months to deploy the reinforcements. (In contrast, more than five brigades were sent to Iraq for the surge within five months.)

Poor roads and limited military infrastructure in Afghanistan complicate the task of deploying the troops.

In addition, Defense Secretary Robert M. Gates has emphasized that Afghan troops, not American or NATO troops, should ultimately shoulder the burden of fighting the war.

Military officers say that some general lessons can be carried over from the counterinsurgency operations in Iraq, like the paramount importance of protecting the population.

But for all the difficulties the American military has confronted in Iraq, the conditions there were more conducive in some important ways to a successful surge than in Afghanistan.

“Afghanistan is not Iraq,” said Ali A. Jalali, a former Afghan interior minister, who projects that it will take 10 years to establish stability in the country. “It is the theme park of problems.”

One major difference is that Iraq is a heavily urbanized society. When President Bush announced the Iraq troop surge, the insurgent group Al Qaeda in Mesopotamia was focusing its attacks on Baghdad. By deploying five additional combat brigades in and around the city, the United States was able to concentrate its combat power in the area that its primary foe had chosen as the main arena.

In Afghanistan, while there are important cities like Kandahar that experts say need to be protected, much of the population lives in rural areas.

“Fifty percent of Afghans continue to live in villages of 300 persons or less, and 75 to 80 percent live in a rural environment,” said J. Alexander Thier, an expert on Afghanistan at the United States Institute of Peace, a government-financed research center. “The insurgency is rural-based.”

Another critical difference pertains to the local army and the police who fight alongside the Americans.

When the buildup began there were more than 300,000 Iraqi soldiers and police officers. The quality of the Iraqi troops was uneven, and they depended on the Americans for airstrikes, artillery and some logistical support. But the Iraqi security forces demonstrated with their March offensive in Basra that they were able to deploy over long distances; and they have now expanded to more than 500,000.

In contrast, Afghanistan has a minuscule military for a nation with a population of 32 million — several million more than Iraq — and a territory that is a quarter larger than Iraq. The Afghan Army is nearly 70,000 strong, and the Afghan police number about 80,000, though many police officers are regarded as corrupt or ineffectual.

According to current plans, the Afghan Army is to be expanded to 134,000 troops over the next four or five years, at a cost to the United States and other foreign nations of some $17 billion. American officials have been looking at ways to accelerate that growth and perhaps expand it even further. To improve the Afghan forces, American brigades are expected to partner with them and conduct joint operations.

The conflict in Afghanistan is also complicated by a haven for militants just across the border in Pakistan, where a sympathetic Pashtun population is in control and has been able practically to ignore the Pakistani central government.

For the military effort in Afghanistan to succeed, the Pakistani military would have to establish control of much of that lawless territory: a formidable task that would require a new emphasis on counterinsurgency by the Pakistani military and a greater willingness on the part of Pakistani leaders, who may be distracted by the flare-up of tensions with India after the attacks in Mumbai last week.

For all that, the political weakness of the Afghan government may be American officials’ biggest worry.

While Iraq is rife with sectarian tension and political rivalries, Iraqis have a tradition of a strong centralized state. In Afghanistan, power has long been decentralized and distributed, and there is broad dissatisfaction with President Hamid Karzai, who is expected to campaign for re-election next year.

“In Afghanistan, there is no memory of a centralized state,” said Marvin G. Weinbaum, a former analyst in the State Department’s Bureau of Intelligence and Research and a scholar at the Middle East Institute. “What they do have is a memory of a central government of limited scope and limited reach. Their expectations were driven up by our rhetoric and our proposals, and now somehow we have to find a way to meet those expectations.”

Another reason sectarian violence declined so drastically in Iraq was the alignment of Sunni tribes with American forces. The Sunni Awakening in Anbar Province was under way before the surge, but the arrival of additional troops reinforced the effort there and encouraged the growth of Awakening movements in other parts of Iraq.

In Afghanistan, the tribal network is far more fragmented, and commanders are wary of building up the strength of one tribe for fear of alienating a rival tribe.

General McKiernan said in a recent address to the Atlantic Council that he was trying to develop a “bottom up” approach in which tribal elders, religious figures and other community leaders would form local councils that would be given the authority and resources to help with security. American officials have been trying to win Mr. Karzai’s support for the effort, which would establish community national guard units in local districts to supplement the efforts of the Afghan Army and the police.

There has been much debate in recent weeks about the usefulness of talking with Taliban insurgents and encouraging them to put down their arms. But the prevailing view among senior American military officers is that such efforts are unlikely to be fruitful until the United States and its allies have more military leverage. Many insurgents, intelligence analysts say, have little motivation to reconcile with the Afghan government now, because they believe that the government is weak and that they are on the winning side.

Surveying the battlefield, even advocates of troop increases are forecasting a long struggle. The directors of the multinational Counterinsurgency Training Center in Kabul, Col. John Agoglia of the United States Army and Lt. Col. Trent Scott of the Australian Army, say that more American and international troops are needed to protect the Afghan population and hold ground that can eventually be handed off to expanded and better trained Afghan forces. But they have some sobering advice for the commanders of newly deploying units.

“They must deploy prepared for a long fight,” Colonels Agoglia and Scott said in an e-mail message. “They must think long term and realize that victory is unlikely on their watch. They must build a solid foundation on which their successors build on gains made.”

    Afghan Strategy Poses Stiff Challenge for Obama, NYT, 2.12.2008, http://www.nytimes.com/2008/12/02/world/asia/02strategy.html?hp

Editorial

Mr. Obama’s Team

December 2, 2008
The New York Times
 

After years of watching American leadership crumble under the weight of bad decisions made in a White House shuttered to all debate, President-elect Barack Obama’s national security team is a relief.

Starting with the selection of Hillary Rodham Clinton, his former rival, as secretary of state, the president-elect has displayed his usual self-confidence. Declaring that he prizes “strong personalities and strong opinions,” Mr. Obama, who has limited foreign-policy experience, showed that he wants advisers with real authority who will not be afraid to disagree with him — two traits disastrously lacking in President Bush’s team.

Mr. Obama reached deeper into the Washington establishment — but in a bipartisan way — and asked Defense Secretary Robert M. Gates to stay on and appointed Gen. James L. Jones, the former NATO commander who advised both Mr. Obama and Senator John McCain, as his national security adviser.

But Mr. Obama made it clear that his administration would follow a new course, reaffirming plans to remove American combat troops from Iraq within 16 months, committing to rebuild America’s tattered alliances and rejecting Mr. Bush’s over-reliance on military might and bullying. Mr. Obama declared his intention to use “all elements of American power: our military and diplomacy, our intelligence and law enforcement, our economy and the power of our moral example.”

We have long admired Mrs. Clinton for her determination and her judgment and believe she will bring both to her new office at a critical time. She already has international stature, knows world leaders and has served on the Senate Armed Services Committee.

As Mr. Obama said, she is “tough and smart and disciplined.” Certainly, her selection indicates a radical break with the disastrous way that Vice President Dick Cheney ran so much of foreign and national security policy out of the vice president’s office.

Another failing of the Bush administration was that neither the president nor his two secretaries of state were “closers” who could set a foreign-policy goal (Israeli-Palestinian peace, for instance) and then develop and execute a strategy to achieve it. We have more faith that the Obama-Clinton duo will do so.

Despite their debates in the presidential primaries, they share a broader vision, including a recognition that American troops must be extracted from Iraq so they can concentrate on Afghanistan, where the Taliban and Al Qaeda are resurgent. Mr. Gates, never a member of the hawkish neo-conservatives that drove the United States into Iraq in the first place, shares that view.

To avoid conflict with his wife’s position, former President Bill Clinton has agreed to publicly disclose more than 200,000 donors to his foundation and to vet his future speaking engagements and business activities with government lawyers. We wish he had done this sooner, and hope those lawyers will err on the side of caution in approving new assignments (no more speaking fees from Kazakhstan, for instance).

Both the selection of Mr. Gates and the appointment of General Jones should ease Mr. Obama’s early relations with the Pentagon. The military’s leaders tend to lean Republican and often mistrust presidents who do not have any military service, as they initially did with Mr. Clinton. When the United States is fighting two wars, good ties with the military are crucial. Mr. Obama seems to have already scored points by reaching out to important commanders, like Gen. David Petraeus.

There is no underestimating the challenges facing Mr. Obama, and he will need a strong team to help him. The choices announced on Monday are a strong start.

    Mr. Obama’s Team, NYT, 2.12.2008, http://www.nytimes.com/2008/12/02/opinion/02tue1.html

Obama Unveils His National Security Team

December 2, 2008
The New York Times
By DAVID STOUT

WASHINGTON — President-elect Barack Obama called for “a new dawn of American leadership” on Monday as he formally introduced his national security team, led by Senator Hillary Rodham Clinton as his nominee for secretary of state.

“We will strengthen our capacity to defeat our enemies and support our friends,” Mr. Obama said in Chicago. “We will renew old alliances and forge new and enduring partnerships.”

The new president said he was sticking to his goal of removing American combat troops from Iraq within 16 months, which he called “the right time frame,” and that this would be accomplished with safety for the troops and security for the Iraqi people.

He introduced his team one by one, starting with Senator Clinton, his former bitter rival for the Democratic presidential nomination; then Defense Secretary Robert M. Gates, who will stay on, at least for a time, in the new administration; Gen. James L. Jones, the former NATO commander, to be national security adviser; Gov. Janet Napolitano of Arizona to be secretary of homeland security: Susan E. Rice to be ambassador to the United Nations, and Eric H. Holder Jr. to be attorney general.

All of the nominations had been expected, and the president-elect’s announcement contained no surprises. It did, however, contain some not very thinly veiled criticism of the Bush administration.

“Hillary’s appointment is a sign to friend and foe of the seriousness of my commitment to renew American diplomacy and restore our alliances,” Mr. Obama said, apparently alluding to the effects of President Bush’s Iraq policy — which the president-elect has bitterly criticized — on America’s international relationships.

And when the new president introduced Mr. Holder, he said: “Let me be clear: The attorney general serves the American people, and I have every expectation that Eric will protect our people, uphold the public trust and adhere to our Constitution.”

President Bush’s handling of the Justice Department has often been criticized, with much of the denunciation focused on former Attorney General Alberto R. Gonzales, who was portrayed by many Democrats and some Republicans on Capitol Hill as little more than Mr. Bush’s personal lawyer.

The choice of Senator Clinton to be the country’s top diplomat has drawn the most attention in recent weeks, in part because of the months-long duel between her and Mr. Obama for the nomination that once was viewed as all but certain to go to her. But the bitterness of their contest seemed all but forgotten on Monday.

“Mr. President-elect, thank you for this honor,” Senator Clinton said. “If confirmed, I will give this assignment, your administration and our country my all.”

Barring extraordinary surprises, the confirmation of Mr. Obama’s choices seems assured. For one thing, there is a tradition of giving a new president his own team of Cabinet-level advisers. Then, too, senators from both parties who will vote on whether to confirm the nominees offered warm praise in advance.

“President-elect Obama has chosen a terrific national security team to protect our security and help restore America’s rightful place in the world,” said Senator John Kerry, the Massachusetts Democrat who will become chairman of the Senate Foreign Relations Committee. He promised a “swift and fair confirmation process.”

The foreign relations committee’s leading Republican, Senator Richard G. Lugar of Indiana, described the president-elect’s choices as “excellent” in a Sunday interview on ABC. “I look forward to working with each one of them,” Mr. Lugar said.

    Obama Unveils His National Security Team, NYT, 2.12.2008, http://www.nytimes.com/2008/12/02/us/politics/02obama.html?hp

Clinton Achieves Another First Lady Milestone

December 1, 2008
Filed at 1:03 p.m. ET
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) -- Hillary Rodham Clinton's nomination as secretary of state is another milestone for a former first lady who was the first to win elective office, the first to run for president herself and now the first to be chosen for a Cabinet position.

Although she lost her White House bid this year, Clinton is continuing a climb through the ranks of public service that began even before her marriage to Bill Clinton, who would become president.

She came to Washington after graduating from Yale Law School to advise the House Judiciary Committee on the impeachment proceedings against President Richard Nixon. She earned a reputation for hard work and mastery of her research topic, but left the capital for Arkansas, where her boyfriend was running for office.

She would follow him from the Arkansas governor's office to the White House, where she was more than an average first lady handling ceremonial roles. She spearheaded the Clinton health care plan, which failed to gain congressional approval and helped Republicans win control of the Senate and House in 1994.

As her husband left office, Clinton ran for an open seat representing New York in the U.S. Senate, marking the first time a first lady ever ran for elective office. Even though she had moved only recently to the state, Clinton won with 55 percent of the vote, and she earned a reputation for reaching across the aisle to build alliances in both parties.

She entered the 2008 Democratic presidential primary as the clear front-runner, but Obama overtook her. The two fought a marathon race that didn't end until every state held a primary or caucus, with Clinton doggedly persisting even when Obama built a significant delegate lead and her chances for victory were minuscule.

Clinton backed Obama in the general election, endorsing him in symbolic Unity, N.H., and traveling across the country in support of his candidacy. A week after Obama won, he secretly met with Clinton in Chicago to discuss the secretary of state job. She agreed to take it with the support of her husband, who agreed to take several steps to avoid conflicts of interest, including disclosure of donors to his library and international foundation.

Clinton Achieves Another First Lady Milestone, NYT, 1.12.2008, http://www.nytimes.com/aponline/washington/AP-Obama-Clinton.html