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WASHINGTON (AP) — Promising to protect the United States while adhering to its core human values, President-elect Barack Obama formally unveiled his intelligence team Friday, praising their integrity, management skills and willingness to tell him the truth. “We must adhere to our values as diligently as we protect our safety with no exceptions,” Obama said.

Obama picked retired Adm. Dennis Blair as the national intelligence director and Leon Panetta to head the CIA.
He called them “public servants with unquestioned integrity, broad experience, and strong managers with the core pragmatism that we need in dangerous times.”

Obama said he has given the men the clear charge to restore the United States’ record on human rights.

“I was clear throughout this campaign and was clear throughout this transition that under my administration the United States does not torture. We will abide by the Geneva Conventions. We will uphold our highest ideals,” he said.

Obama said that the country learned “tough lessons” under the Bush administration, and he will demand intelligence assessments “grounded solely in the facts, and not seek information to suit any ideological agenda.”

Blair, a former head of the U.S. Pacific Command, pledged to uphold the standards that Obama articulated “and that the American people have a right to expect.”

Blair won high marks for countering terrorism in southeast Asia after the Sept. 11, 2001, attacks. He worked closely with foreign partners in crafting offensives that crippled the Jemaah Islamiyah terror faction in Indonesia and the Abu Sayyaf group in the Philippines.

Obama Announces CIA and national intelligence directors (Full Press Conference)

Panetta, a former congressman, White House chief of staff and budget director with no direct intelligence experience, will have the president’s “complete trust and substantial clout,” Obama said.

“He has handled intelligence daily at the very highest levels, and time and again he has demonstrated sound judgment, grace under fire, and complete integrity,” he said.

Panetta said he would work to assuage a Congress bruised from eight years of abrasive relations with the Bush administration and promised “to form the kind of partnership we need if we’re to win the war on terror.”

Obama praised the intelligence professionals working at 16 U.S. agencies even as he criticized the current administration for directing them in carrying out harsh interrogation and secret rendition policies.

“They have served in the shadows, saved American lives, advanced our interests, and earned the respect of a grateful nation,” Obama said.

Obama is also tapping John Brennan to head homeland security and counterterrorism on the National Security Council. Michael Leiter will remain on as the director of the national Counterterrorism Center. And outgoing National Intelligence Director Michael McConnell will serve on Obama’s Foreign Intelligence Advisory Board. Obama has also asked the CIA’s current deputy, Steve Kappes, to remain at the agency.

Current CIA director Michael Hayden said in a message to employees Friday that he has been asked to remain at the agency until Panetta is confirmed by the Senate.

He said he and Kappes met with and are “deeply impressed with his candor and clear commitment to the welfare of the men and women of CIA.”

McConnell said in a statement Friday he was pleased with the selection of Blair.

Blair and Panetta are both garnering substantial support on Capitol Hill, although concerns exist about each. Sen. Ron Wyden, D-Ore., told The Associated Press on Thursday that he plans to question Blair about the role he played 10 years ago in U.S. efforts to rein in the Indonesian military as it brutally cracked down on civilians in East Timor. Staff aides to other members said they would be listening closely to the answers.

Paramilitary groups sponsored by the Indonesian military with U.S. financial and political patronage slaughtered more than 200,000 East Timorese over two decades. In 1999, as civilians were being massacred, Congress and the Clinton administration cut off all military ties.

Blair, then U.S. Pacific Command chief, pushed for renewing relations with the Indonesian army, reasoning that drawing it closer would give the U.S. more leverage. Obama spokeswoman Brooke Anderson said Blair was acting in accordance with U.S. policy.

“Admiral Blair condemned the conduct of Indonesian troops in East Timor, and he conveyed that if they behaved responsibly, the U.S. was prepared to resume normal relations. If they did not, they risked further negative consequences,” she said.

The East Timor and Indonesia Action Network, a human rights group, called Blair a poor choice for intelligence director this week.

Ed McWilliams, who was political officer at the U.S. Embassy in Jakarta at the time and is now with the human rights group, told the AP “the matter raises the larger question of our cooperation with militaries and intelligence agencies which abuse human rights, are unaccountable before their own justice systems and not subordinate to civilian control.”

But McWilliams credited Blair for trying to lead a human rights delegation to Indonesia’s province of West Papua where terrible abuses were occurring. He and his delegation were blocked by security forces.

Panetta faced resistance from the Hill earlier this week because of his lack of intelligence experience, but his prospects for an easy confirmation improved this week as key senators, including incoming Intelligence Committee Chairman Dianne Feinstein, pledged their support after discussions with Obama, Panetta and Vice President-elect Joe Biden.

Source: AP

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President-elect Barack Obama plans to name former Iowa Governor Tom Vilsack as his choice for Secretary of Agriculture at a news conference Wednesday, transition aides said.

Vilsack served for two terms, from 1999 to 2007, in what is one of country’s leading hog and corn-producing states.

He briefly ran for president, but raised little money and endorsed Hillary Clinton soon after getting out, becoming one of her more prominent surrogates.

Obama’s selection of Vilsack brings to four the number of former Obama rivals from the Dem primary now in his administration, as the Iowan joins VP-elect Joe Biden, Secretary of State-designate Hillary Clinton and Secretary of Commerce-designate Bill Richardson.

Also Wednesday, Obama is expected to name Colorado Sen. Ken Salazar to head the Interior department.

With the selections, Obama has two more cabinet posts to fill: Labor and Transportation.

Source: Politico

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President-elect Barack Obama will name Arne Duncan, the superintendent of schools in Chicago, to be his Secretary of Education, a senior Democratic official and a second person close to the decision said.

Mr. Duncan is a Harvard graduate whose friendship with Mr. Obama began on the basketball court and flowered into frequent discussions of education policy.

He has seven years’ experience as chief executive of the Chicago Public Schools, the nation’s third-largest school district, where he has earned a solid reputation for confronting pressing issues in public education, like how to raise teacher quality, how to transform weak schools and when to shutter those that are irredeemably failing.

Word of the selection comes as Mr. Obama’s transition team said Monday that he would make an important announcement on Tuesday morning at the Dodge Renaissance Academy, an elementary school that Mr. Duncan and Mr. Obama visited together in October 2005.

Source: The Caucus

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SPRINGFIELD, Ill. – The speaker of the Illinois House took the first step Monday toward impeaching scandal-plagued Gov. Rod Blagojevich, appointing a committee to recommend whether he should be ousted after his arrest on federal corruption charges.

“We’re going to proceed with all due speed, but we’re going to make sure that what we do is done correctly,” said Speaker Michael Madigan, who often has clashed with fellow Democrat Blagojevich.

Once the committee makes a recommendation, the full House will formally decide whether to file impeachment charges. The Senate then would rule on the charges.

Blagojevich was arrested Tuesday on federal fraud and bribery charges, including allegations of a scheme to profit from his power to appoint a replacement for the Senate seat vacated by President-elect Barack Obama.

The state constitution gives lawmakers broad authority to impeach a governor for any reason they consider sufficient.

The governor, who remains defiant and returned to work Monday to sign a tax credit bill, had no immediate reaction to the impeachment committee, spokesman Lucio Guerrero said after Madigan’s announcement.

“Impeachment talk’s nothing new for this governor,” Guerrero said. “They’ve been talking about it for a long time.”

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Indeed, Madigan said Monday his staff has been reviewing the legal possibilities for impeachment for about a year. His office produced a memo earlier this year outlining all the arguments legislative candidates could make in favor of impeachment.

Blagojevich’s administration has been under a federal corruption investigation for years.

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WASHINGTON (CNN) — The House of Representatives handily passed a bill Wednesday night that would provide up to $14 billion in bridge loans to automakers, but Republican opposition cast doubt about the bill’s fate in the Senate later this week.

The U.S. House approved an auto bailout package Wednesday, but it could hit a roadblock in the Senate.

The stopgap measure, approved by a vote of 237 to 170, is designed to let the new Congress and incoming administration of President-elect Barack Obama craft a long-term solution. It would also give the companies time to negotiate with creditors and the United Auto Workers union on additional concessions needed to stem their ongoing losses.

Thirty-two GOP representatives voted with 205 Democrats in support of the bill while 20 Democrats and 150 Republicans opposed the bill.

In Michigan, the home of the three major U.S. automakers — Chrysler, Ford and General Motors — eight Republicans joined the six Democrats in the state’s delegation in voting for the measure. A ninth Michigan Republican, Timothy Walberg, did not vote.

Seven other Republicans that voted for the bill are from nearby Midwestern states that are also home to auto plants. However, outside of the auto belt, the bailout had little Republican support.

Even Democrats couldn’t come to complete agreement on the bill, with House and Senate Democrats going their separate ways on one of the criteria the “car czar” must consider in determining an auto company’s long-term viability plan.

House Democrats used language requiring that autos meet stricter “applicable” fuel efficiency and emissions standards — which would cover consideration of state standards such as those adopted in California and New York — while the Senate version of the bill calls for vehicles to meet “federal” standards, which are not as high as some state benchmarks.

A Senate Democratic leadership aide told CNN that Senate Republican leader Mitch McConnell told Senate Majority Leader Harry Reid Wednesday morning that the bill would never pass the Senate with the House language.

House Speaker Nancy Pelosi wanted the higher efficiency standard so that liberal Democrats who are not inclined to help the auto manufacturers would feel they had assurances that these companies would adopt and make more fuel-efficient cars, according to House Democratic aides.

However, even if language about the fuel efficiency standards is resolved, Senate Republicans still aren’t likely to flock behind the bill.

“I don’t think the votes are there on our side of the aisle,” reported Sen. George Voinovich of Ohio, one of few vocal Republican backers of the bill.

“It’s not gonna pass right now,” echoed Sen. Richard Shelby, R-Alabama, a fierce critic of the bill.

Voinovich and Shelby spoke after Senate Republicans huddled behind closed doors in the Capitol on Wednesday to weigh the merits of the bailout. Vice President Dick Cheney and White House Chief of Staff Josh Bolten attended the meeting — called “spirited” by one senator — to sell the bill the White House negotiated with congressional Democrats.

Several senators said they were concerned the so-called “car czar,” created by the legislation, would not have enough power to force the troubled automakers to restructure to become profitable.

“I have concerns about the power of the czar,” said Sen. Norm Coleman, R-Minnesota, a moderate who Democrats have hoped would vote for the bill, “that he actually has some real power. And I think that’s a concern a lot of my colleagues have right now.”

“The car czar needs the authority to create a de facto structured bankruptcy. Not consulting. Not calling meetings. He needs the capacity of a master of bankruptcy to force things to happen,” said Sen. Robert Bennett, R-Utah.

Some senators oppose any assistance to the automakers, saying they should file for bankruptcy, but White House spokeswoman Dana Perino pointed out that many lawmakers from both sides of the aisle believe that allowing “a disorderly bankruptcy could be fatal to U.S. automakers and have devastating impacts on jobs, families and our economy.”

“As a result, they also agree we should find a way to foster the companies’ restructuring so that they can become viable and profitable,” she said. “We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs.”

Other senators said they were concerned that the carmakers might never pay taxpayers back for the loans, meant to keep General Motors and Chrysler afloat until they can finalize a long-term viability plan — by March 31, according to the legislation.

GM has said it needs $4 billion by the end of the month to continue operations, and believes it’ll need an additional $6 billion in the first three months of 2009. Chrysler has said it needs $4 billion by the end of the first quarter.

Ford, which has more cash on hand than its U.S. rivals, is not expected to tap into this bailout in the coming months.

Source: CNN

Blagojevich

Blagojevich


WASHINGTON (AP) — President-elect Barack Obama is calling for the Illinois governor to resign.

Obama spokesman Robert Gibbs says the president-elect agrees with other prominent politicians in Illinois and elsewhere that “under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois.”

Illinois Gov. Rod Blagovich was arrested Tuesday, accused of scheming to enrich himself by selling Obama’s vacant Senate seat. The governor has authority to appoint the replacement.

Source: Washington Times

Hey this kid is going to be President!

Hey this kid is going to be President!

The Supreme Court this morning unceremoniously declined to hear an emergency appeal from a man who claimed President-elect Barack Obama is not qualified for the presidency because he is not a “natural-born” citizen.

Newspaper announcement of birth of Barack, which acknowledges mother and fathers marriage - see copy below

Newspaper announcement of birth of Barack, which acknowledges mother and fathers marriage - see copy below

The court without comment declined to hear “Donofrio v. Wells,” a suit that had attempted to keep Obama off the New Jersey ballot. Leo Donofrio of East Brunswick had claimed Obama had dual nationality at birth, because of his Kansas-born mother and his Kenyan-born father, who was a British subject at the time.

Births and marriage announcements Honolulu 1961

Births and marriage announcements Honolulu 1961

Just to be nonpartisan about it, Donofrio also contended that Republican Sen. John McCain (Ariz.) and Socialist Workers candidate Roger Calero also were not natural-born citizens and should have been kept off the ballot.

The case had little chance at the high court, but became the subject of a tremendous amount of speculation and debate on ideological political blogs.

Right-wing blogs were outraged when Justice David H. Souter denied Donofrio’s petition for an injunction, and left-wing blogs smelled trouble when Justice Clarence Thomas referred the matter to the full court for consideration.

In fact, both were routine procedures, as the court’s action today shows. There were no recorded dissents to the decision dismissing the case.

This hardly means the lawsuits are over. There are two other cases at the Supreme Court, neither of which has been scheduled for consideration. The most celebrated is filed by Philip J. Berg of Lafayette Hill, Pa. There are others still at lower court levels.

Berg argues that Obama was born in Kenya, not Hawaii as Obama has said and Hawaii officials confirm. Alternately, Berg argues that Obama may have renounced his citizenship as a boy in Indonesia, where he lived for a time with his mother and stepfather.

Those supporting Berg do not believe a birth certificate Obama’s campaign has produced.

Factcheck.org has done an independent investigation of the controversy.

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“FactCheck.org staffers have now seen, touched, examined and photographed the original birth certificate,” the group writes. “We conclude that it meets all of the requirements from the State Department for proving U.S. citizenship…. Obama was born in the U.S.A. just as he has always said.”

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President-elect Barack Obama in rented white tie and tails.

President-elect Barack Obama in rented white tie and tails.

OBAMA’S NEW LOOK: It’s been 15 years since President-elect Barack Obama has bought a new tux — and his inauguration is the perfect time to break that string. Obama, who during the campaign touted U.S. competitiveness and decried the plight of the American worker, plans to wear a union-made tuxedo by Hart Schaffner Marx to the inaugural balls on Jan. 20, said Bruce Raynor, general president of UNITE HERE, the main apparel union, which endorsed Obama early in the primary season.

Raynor told WWD that he was recently on a phone call with the President-elect and six other union presidents when the talk turned to what Obama would wear on the big day, which is expected to draw from 1 million to 4 million people to Washington. “As soon as he got on the phone, he told me he was working on his new tuxedo from Hart Schaffner Marx,” Raynor said. “He said after 15 years, it is time for a new one.” The Chicago-based men’s wear firm, founded in 1883, was one of the first clothing companies to enter into a collective bargaining agreement with a union in 1911. Homi Patel, president, chairman and chief executive officer of parent Hartmarx Corp. said he is working with the President-elect’s staff to determine whether Obama will wear a suit with a topcoat to the inauguration ceremony.

Source: WWD

Even Without That Task, Huge Agency Poses Challenges

With Thomas A. Daschle, as secretary of health and human services, focused health-care legislation, the agency will need strong deputies, experts said. (By Charles Dharapak -- Associated Press)

With Thomas A. Daschle, as secretary of health and human services, focused health-care legislation, the agency will need strong deputies, experts said. (By Charles Dharapak -- Associated Press)

Under the best of circumstances, overseeing the Department of Health and Human Services is an enormous undertaking. With 65,000 employees and a budget of $707.7 billion, it accounts for nearly one-quarter of all federal spending, second only to the Defense Department.

But in the Obama administration the job is taking on a second, perhaps more daunting, responsibility: shepherding health-care reform legislation through Congress.

Unlike his predecessors, Thomas A. Daschle, President-elect Barack Obama’s choice for HHS secretary, will be given an expanded role, leading administration efforts to overhaul the U.S. health system.

“This really creates a new type of secretary,” said Charles N. “Chip” Kahn III, president of the Federation of American Hospitals. In the past, “HHS was more or less a service organization to the White House,” while White House advisers drove policy initiatives.

In broad terms, Obama campaigned on the idea of reducing medical costs, improving quality and eventually achieving universal insurance coverage. He promised to cover every child and to reduce the average family’s medical bill by $2,500 a year. He advocated a greater emphasis on prevention and expanding participation in the government-subsidized Medicare and Medicaid programs.

“There are two aspects to the challenge of pushing for health reform,” said Dan Mendelson, a budget and health adviser in the Clinton administration. “One is to get the right concepts together with what Congress wants to do, and the other is managing the disparate concepts and generous egos.”

A serious restructuring of the health system will require extensive data and analytic capabilities to dissect the proposed changes and the impact they might have, said Karen Davis, president of the Commonwealth Fund, a private, nonpartisan research foundation. “Right now, there’s nothing other than the Office of the Actuary to do back-of-the-envelope estimates,” she said.

With the expectation that Daschle, a former Senate majority leader, will focus heavily on crafting and pushing legislation, there will be an even greater need for a strong No. 2. HHS is a collection of 11 agencies including the Food and Drug Administration, the National Institutes of Health, the Centers for Medicare and Medicaid Services, and the Centers for Disease Control and Prevention.

“He’ll need to have deputies who are well-versed in the agency as a whole and who can manage the ongoing operation of HHS while he leads the health reform discussions,” said Len Nichols, director of health policy at the New America Foundation. One of those will likely be Jeanne Lambrew, a veteran of the Clinton administration and a co-author of Daschle’s book “Critical: What We Can Do About the Health-Care Crisis.”

Lambrew, in a chapter of a book published by the liberal Center for American Progress outlining a proposed agenda for the incoming president, agreed that fixing the health system is a top priority. However, she noted, “these urgent problems overshadow persistent, neglected and potentially deadly infrastructure gaps in the system.”

According to her assessment, the nation’s ability to respond to natural or man-made crises is weak, as evidenced by the poor response to Hurricane Katrina. Chronic illnesses such as diabetes have been given short shrift, and little has been done to prepare for the long-term health needs of an aging population.

The Commonwealth Fund, after interviewing two dozen health leaders, issued its own set of recommendations. It urged the next administration to make a “real focus on what it takes to improve health outcomes,” as opposed to secondary issues related to insurance markets, Davis said. That means tackling childhood obesity, racial disparities and preventable illnesses.

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President-elect Barack Obama, right, with Budget Director-designate Peter Orszag, left, during a news conference in Chicago, Tuesday, Nov. 25, 2008

President-elect Barack Obama, right, with Budget Director-designate Peter Orszag, left, during a news conference in Chicago, Tuesday, Nov. 25, 2008

With the economy deteriorating rapidly, the nation’s employers shed 533,000 jobs in November, the 11th consecutive monthly decline, the government reported Friday morning, and the unemployment rate rose to 6.7 percent.

The decline, the largest since December 1974, was fresh evidence that the economic contraction accelerated in November, promising to make the current recession, already 12 months old, the longest since the Great Depression. The previous record was 16 months, in the severe recessions of the mid-1970s and early 1980s.

“We have recorded the largest decline in consumer confidence in our history,” said Richard T. Curtin, director of the Reuters/University of Michigan Survey of Consumers, which started its polling in the 1950s. “It is being driven down by a host of factors: falling home and stock prices, fewer work hours, smaller bonuses, less overtime and disappearing jobs.”

The employment report increased the likelihood that Congress, with the support of President-elect Barack Obama, will enact a stimulus package by late January that could exceed $500 billion over two years. More than half that money would probably be channeled into public infrastructure spending. Many economists consider such investments an effective way to counteract, through federally financed employment, the layoffs and hiring freezes spreading through the private sector.

“Basically $100 billion of public investment in such things as roads, bridges and levees would generate two million jobs,” Robert N. Pollin, an economist at the University of Massachusetts, said. “That would offset the two million jobs that we are now on track to lose by early next year.”

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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.

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After President-elect Barack Obama announced the selection of Hispanic New Mexico Gov. Bill Richardson into his cabinet, many Latinos are calling for more diversity.

Jim Wilson/The New York Times)

President-elect Barack Obama and Bill Richardson, the secretary of commerce-designate. (Photo: Jim Wilson/The New York Times)

CHICAGO – Bill Richardson is beardless and back in the cabinet. The governor of New Mexico and former presidential candidate appeared beside President-elect Barack Obama on Wednesday to accept his third cabinet-level post, this time as secretary of commerce.

Mr. Richardson, the first Hispanic chosen for Mr. Obama’s cabinet, made remarks in both English and Spanish as he took the assignment, signaling the importance of his selection for the new administration. Mr. Obama said he picked Mr. Richardson because of his deep experience and skills, not his ethnic heritage, but promised to produce a diverse senior team.

“When people look back and see the entire slate, what they will say is – not only in terms of my cabinet but in terms of my White House staff – I think people are going to say this is one of the most diverse cabinets and White House staffs of all time,” said Mr. Obama, who will be the first African American president. “But more importantly, they’re going to say these are all people of outstanding qualifications and excellence.”

Hispanic groups have lobbied strongly on behalf of Mr. Richardson, arguing that Hispanic voters in last month’s election helped deliver at least four states for Mr. Obama that voted for President Bush four years ago: Nevada, Colorado, Florida and Mr. Richardson’s New Mexico. Mr. Obama is also eyeing Rep. Xavier Becerra of California, a member of the Congressional Hispanic Caucus, to become the United States trade representative, a position that has had cabinet status in the past.

Mr. Richardson has served in the cabinet twice before, first as President Bill Clinton’s ambassador to the United Nations and then as his secretary of energy. Mr. Richardson had his eye on secretary of state this time around but lost out to Senator Hillary Rodham Clinton. Although the commerce slot is generally seen as a second-tier position, Mr. Obama said it would play a pivotal role in setting and executing his economic recovery agenda.

“Well, commerce secretary is a pretty good job, you know,” Mr. Obama said to suggestions that it was a consolation prize for Mr. Richardson. “It’s a member of my key economic team that is going to be dealing with the most significant issue that America faces right now and that is how do we put people back to work and rejuvenate the economy?”

As for the beard that Mr. Richardson grew after dropping his own bid for the presidency earlier this year, it was gone by Wednesday morning’s news conference. Mr. Obama, tongue in cheek, declared that a mistake. “I thought that whole western rugged look was really working for him,” the president-elect said.

thecaucus75

Jim Watson/Agence France-Presse-Getty Images)

President-elect Barack Obama presented his national security team at a news conference in Chicago on Monday. (Photo: Jim Watson/Agence France-Presse-Getty Images)

That’s a Wrap | 11:35 a.m. As they all walked off stage, Mr. Obama put his arm around Mrs. Clinton and escorted her out while the others tagged along. The entire press conference underscored that, at least for now, Mrs. Clinton is first among equals.

Iraq | 11:34 a.m. The last question was whether Mr. Obama still intended to withdraw American forces from Iraq within 16 months of his inauguration.

Mr. Obama said America is on a path to reducing forces in Iraq but didn’t answer the question directly. He said he would listen to the recommendations of commanders in the fields and that his priority would be to keep the troops safe.

All You’re Going to Get | 11:33 a.m. Asked for details of how they came together after the marathon primary, Mr. Obama wasn’t too forthcoming. He said she is tough and smart and disciplined and shares his core values and that he was “always interested” after the primary in finding ways in which they could collaborate.

“I extended her the offer and she accepted,” he said blandly, adding: “I know that’s not as juicy a story as you were hoping for, but that’s all you’re going to get.”

Reconciliation | 11:28 a.m. You knew some of those old quotes from the primary trail would come up — Mr. Obama suggested at one point that Mrs. Clinton’s global experience consisted of having tea — so how have they come to reconcile their differences?

“This is fun for the press to try to stir up whatever quotes were generated during the course of the campaign,” he says, batting away the suggestion. He directs reporters to look at the statements that Mrs. Clinton and he have made outside of the heat of a campaign. He says they share a view that America has to be safe and secure and in order to do that “we have to combine military power with strength and diplomacy,” we have to build and forge stronger alliances around the world. “I believe there’s no more effective advocate than Hillary Clinton for that well-rounded view” for how we advance America’s interests around the world.

He went on to cite her service on the Armed Services committee, she knows world leaders and she and he have discussed the “strategic opportunities” that exist out there to strengthen American’s posture in the world. “She’ll be an outstanding Secretary of State,” he says, “and if I didn’t believe that, I wouldn’t have offered her the job and if she didn’t believe I’m equipped to lead this nation, she would not have accepted.”

‘Buck Will Stop With Me’ | 11:20 a.m. Q: How can you ensure that the staff will be smoothly-functioning team of rivals?

Mr. Obama gave a lengthy answer here. He said that they have worked together before, have respect for each other and are outstanding public servants. “They would not have agreed to join my administration and I wouldn’t have asked them unless we share a core vision on what’s needed to keep the American people safe,” he said. He said his picks would not have left their current jobs if they weren’t convinced they could work together as an effective team.

He also added that he is a strong believer in having strong personalities and strong opinions. People in the White House can “get wrapped up in group think” but he said he will welcome vigorous debate inside the White House. But understand, he said, “I will be setting policy as president,” and he will be responsible for the vision this team is carrying out. “The buck will stop with me.”

Biden Speaks | 11:05 a.m. The other Obama appointees gave briefer, more perfunctory comments. Now, even Vice President-elect Joseph R. Biden Jr. is getting the chance to speak.

He’s been up on these stages with Mr. Obama several times now, but mute. He congratulates Mr. Obama for picking a “first-class team” (and makes no mention of how he and Mrs. Clinton might work together).

A Difficult and Exciting Adventure | 11:01 a.m. In reference to various crises around the world, Mrs. Clinton said that America cannot solve them without the rest of the world and the world can’t solve them without America.

In a nod to the fact that Mr. Obama will be the boss, Mrs. Clinton said that with his election, the American people have demanded a new direction at home and a renewed effort to improve American’s standing in the world.

She said that “the best way to continue serving my country” is to join Mr. Obama “at this defining moment.”

Paraphrasing President Kennedy, she said: “I am proud to join you on what will be a difficult and exciting adventure in this new century, and may God bless you and all who served with you and our great country.”

Now a Word From the Former President | 10:59 a.m. Former President Bill Clinton released the following statement:

    As an American, I am thankful that President-elect Barack Obama has asked Hillary to be Secretary of State and that she has accepted. As her husband, I am deeply proud.
    She is the right person for the job of helping to restore America’s image abroad, end the war in Iraq, advance peace and increase our security, by building a future for our children with more partners and fewer adversaries, one of shared responsibilities and opportunities.
    She has already earned the respect of foreign leaders and diplomats through her work to promote human rights and the empowerment of women through access to education, healthcare and economic opportunity. And Americans know, from her leadership in the Senate on national security, that she will always put the security, values and the interests of our people first.
    In her service to the people of New York and our nation, Hillary has demonstrated the knowledge, passion, resilience, and capacity to learn that our country needs at this critical time. She loves being a Senator from New York, but as she has in all the thirty-seven years I’ve known her, she answered the call to serve. I commend President-Elect Obama for asking her to be a part of a great national security team. America will be well-served.

Clinton Thanks New Yorkers | 10:55 a.m. When Mr. Obama introduced his other nominees, none of them spoke. But this occasion clearly called for words from Mrs. Clinton, and Mr. Obama couldn’t very well let her speak and no one else, so now they are all getting a chance to say a few words.

Mrs. Clinton gave something of a valedictory address. She thanked New Yorkers — this is her first time acknowledging to her constituents that she is leaving the Senate. She said they had prepared her for this new job because they aren’t afraid to speak their minds and they do so in many languages. She also used some phrases that Clinton-watchers have heard since her husband’s first presidential campaign in 1992, saying she wanted to help everyone achieve their God-given potential.

The Team Speaks | 10:54 a.m. Mr. Obama invites the members of his team to speak, beginning with Mrs. Clinton.

Get to Work | 10:51 a.m. Mr. Obama said his new team met this morning to discuss the situation in Mumbai. He emphasized the non-partisan nature of their task.

An American ‘of Tremendous Stature’ | 10:47 a.m. Mr. Obama introduced Mrs. Clinton first, calling her a friend, a tough primary opponent and intelligent and said she had a remarkable work ethic. He said she was an American “of tremendous stature” who would have his complete confidence and command respect in every capital around the world. “I have no doubt that Hillary Clinton is the right person to lead our State Department,” he said.

A Unique Team | 10:46 a.m. “The team that we have assembled here today is uniquely suited to do just that,” Mr. Obama said. “They share my pragmatism about the use of power, and my sense of purpose about America’s role as a leader in the world.”

The Team | 10:42 a.m. Mr. Obama’s new national security team is now on stage: Mrs. Clinton; Robert M. Gates, the current defense secretary, who will remain in that job; Gen. James L. Jones, the former NATO commander, will be national security adviser; Gov. Janet Napolitano of Arizona will be homeland security chief; Eric Holder will be attorney general; and Susan Rice, ambassador to the United Nations.

‘Looking Forward to You Advising Me’ | 10:25 a.m. As we await Barack Obama’s news conference in a few minutes (10:40 a.m. Eastern), our minds drift back to one of the wittier moments of the long debate season.

It was last December, before the Iowa caucuses, when Mr. Obama was asked how his administration would differ from Bill Clinton’s administration if he planned to appoint so many Clinton advisers.

Senator Hillary Clinton, who was off screen, piped up with a laugh: “I want to hear that!”

“Well, Hillary,” Mr. Obama responded coolly, “I’m looking forward to you advising me, as well.”

It was a brilliant comeback, but few saw it as prescient.

But here we are, less than a year later, with President-elect Obama about to name his former rival as his Secretary of State, a position in which she will indeed be advising him and representing him on some of the most important matters he will face.

For weeks, anonymous Democrats have been whispering about why Mr. Obama made this unexpected choice (“team of rivals,” “global brand,” etc.) and why Mrs. Clinton is choosing to give up her independent power base in the Senate (dead-end job) and head to State (high-profile fiefdom, her own staff, access to the president).

But today, we will hear directly from Mr. Obama about why he is picking her, and we’ll be live blogging it right here. Come back in a few minutes.

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CHICAGO (Reuters) – President-elect Barack Obama announced his top budget officials on Tuesday and promised significant spending cuts to partially offset a costly stimulus package that aims to revive the U.S. economy.

As the top two officials at the Office of Management and Budget, Peter Orszag and Rob Nabors will closely examine federal spending to cut out wasteful programs, Obama said.

“If we are going to make the investments we need, we also have to be willing to shed the spending that we don’t need,” Obama said at his second press conference in as many days.

One obvious example: Crop subsidies to farmers who make more than $2.5 million per year, Obama said.

Though he does not take office until January 20, Obama’s team of economic advisers are already working out the details of a two-year package to save or create 2.5 million jobs that could cost several hundred million dollars.

Obama himself meanwhile has dropped his former low-profile approach and spoken directly to the American people with two news conferences this week. A third Obama press appearance is scheduled for 10:45 a.m. EST Wednesday.

Bush administration officials continue to extend massive life support efforts to the ailing U.S. financial system.

The Federal Reserve on Tuesday announced a $600 billion program to buy mortgage-related debt and securities, and a $200 billion program to increase the availability of consumer debt, such as credit cards and auto loans.

Treasury Secretary Henry Paulson urged patience and said any effort will take time to work.

Orszag now heads the Congressional Budget Office and Nabors currently serves as staff director of the House Appropriations Committee. Both previously held White House positions under President Bill Clinton.

Their announcement follows on Monday’s unveiling of New York Federal Reserve Bank President Timothy Geithner as Obama’s Treasury secretary and Lawrence Summers, a former Treasury secretary under Clinton, as director of his National Economic Council.

Obama’s aides are in contact with Bush administration officials, who said they would work closely with Geithner and other incoming officials on any new rescue plans.

The scope of the economic crisis has widened since Obama’s November 4 victory over Republican John McCain, with auto companies warning that they are short on cash, unemployment numbers rising and the government bailing out yet another gigantic financial institution, Citigroup Inc.

New figures released on Tuesday showed that the U.S. economy shrank more severely during the third quarter than previously estimated as consumers cut spending at the steepest rate in 28 years. Corporate profits and business investment fell as well.

Obama has kept a low profile until this week’s news conferences, which are intended to show the priority he places on addressing the worst economic crisis since the Great Depression.

He said on Monday he has not yet decided whether to roll back President George W. Bush’s 2001 tax cuts for the wealthy, which would provide the government with much-needed revenue, or simply allow them to expire at the end of 2010 as scheduled, a move that would avoid what would likely be a bruising fight in Congress.

Source: Reuters

Treasury Secretary Henry M. Paulson Jr. spoke at a news conference at the Treasury Department on Tuesday in Washington.

Treasury Secretary Henry M. Paulson Jr. spoke at a news conference at the Treasury Department on Tuesday in Washington.

The United States government unveiled $800 billion worth of new loans and debt purchases on Tuesday, hoping another massive infusion of cash would smooth troubled credit markets and make borrowing easier for homebuyers, small businesses and students.

The Federal Reserve said it would buy up to $600 billion in mortgage-backed assets from government-sponsored mortgage giants Fannie Mae and Freddie Mac. It would buy up to $100 billion in debt directly from the companies and up to $500 billion in mortgage-backed securities.

“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Federal Reserve said in a statement.

Separately, the Fed and Treasury Department announced a $200 billion program to ease commercial lending on debt like student loans, car loans or business loans. The Fed would lend up to $200 billion to holders of asset-backed securities supported by car loans, credit card loans, student loans, and business loans guaranteed by the Small Business Administration.

The program would be seeded with $20 billion in “credit protection” from the Treasury Department, which is drawing the money from the original $700 billion bailout.

“It gives institutions liquidity and it’s clearly direct lending that will help consumers,” Treasury Secretary Henry M. Paulson Jr. said Tuesday at a news conference.The announcements came one day after President-elect Barack Obama unveiled his economic team and tried to assure Americans that he was seeking to fill any leadership vacuum, and said his economic advisers would begin working “today.” The advisers include Timothy F. Geithner, his choice for Treasury secretary. 

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Today on “Fox News Sunday,” Obama adviser David Axelrod talked to Chris Wallace about the economy and the upcoming appointments that the President-elect plans to make.
Real Clear Politics

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Foreign income makes up only a small part of Bill Clinton’s post-presidential speaking-circuit bounty.
Photo: AP

Bill Clinton’s apparent willingness to forgo foreign income in order to smooth his wife’s path into the Secretary of State’s office won’t put the couple into the poor house, publicly available financial records show.

Of the $111 million the Clintons have pulled in since leaving the White House, a little more than $8 million came from foreign sources, according to joint tax returns the couple released during Hillary Clinton’s contentious battle for the Democratic presidential nomination with President-elect Barack Obama, who is reportedly close to offering his vanquished rival the top diplomat’s post.

The Clinton’s foreign income, for which the tax returns show they claimed more than $650,000 in foreign tax credits, “was from speeches President Clinton abroad and income from the blind trust,” Jay Carson, a campaign spokesman, told Politico when the Clintons released their taxes in April.

The trust was dissolved last year, revealing that the couple had investments with Quellos, an asset manager accused of structuring offshore tax shelters.

Still, foreign income was only a small slice of Bill Clinton’s post-presidential speaking-circuit bounty, which came to nearly $52 million. The couple also collected more than $40 million for the two books each penned, including an eye-popping $15 million advance paid to Bill Clinton for his 2004 autobiography “My Life.”

If Hillary Clinton were to become Secretary of State, she would be legally barred from receiving most outside earned income, but Bill Clinton wouldn’t—provided it could be shown that it did not conflict with her duties as the nation’s ambassador to the world.

Plus, taxpayers would continue to fund the Clinton’s lifestyles to the tune of about $1.4 million a year. That’s accounting for the Secretary of State’s salary of more than $190,000 a year— a $20,000 raise from Hillary Clinton’s salary as a New York Senator—plus more than $1.2 million a year that Bill Clinton receives in presidential retirement benefits. Those include everything from a $200,000 annual pension to upwards of $50,000 for travel, about $160,000 in staff salaries and benefits and about $735,000 to rent and equip Clinton’s 8,300-square-foot Harlem penthouse office, which offers views of Central Park, the George Washington Bridge and most of Manhattan.

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It was likely that Barack Obama genuinely believed that he would take or have to take public financing. But when the primary was unexpectedly extended, the Obama team saw their money raising potential – and more they knew they were going to need fist fulls of it – if they were going to have any real chance of defeating the Republican election machine. With Al Gore’s loss in 2000 and Kerry’s Swift-Boating back in 2004 – they concluded that public financing would place serious limits on their ability to act. And they were right. John McCain promised to run an honorable campaign, and without adequate finance – Obama would likely not be President-elect – as was McCain’s plan. It is doubtful that in 2012 the Republicans will allow themselves to be hamstrung by public financing either. They might be moaning right now – but they are also learning. It was just a little TKO!

President-elect Barack Obama and vanquished rival John McCain talked Monday about reforming parts of the political process, but they skipped a good governance issue of mutual interest over which they sparred bitterly during their campaign: fixing the public financing system.

Obama this summer said he was “firmly committed to reforming the system as president,” even as his reversal of a pledge to participate in it drew fire from McCain, editorial boards and campaign finance reform advocates, all of whom accused Obama of virtually killing the system.

Stephanie Cutter, a spokeswoman for the Obama transition team, said Obama and McCain “share a common belief that the system needs to be reformed,” but she said “they didn’t speak about it today.”

Instead, a different Obama aide said, the discussion focused on “a common sense of reform being needed” on government spending, earmarks, military procurement, corporate welfare, climate change, immigration and Guantanamo Bay, among other areas.

McCain’s Senate and campaign staffers did not respond to questions about why campaign finance reform wasn’t discussed, but it clearly is a sore point for the Arizona senator and his team. They believe Obama was never held to account for his public funding flip-flop, which put him at a huge cash advantage over McCain in the final months of the campaign.

McCain did participate in the system, which limits candidates to spending only the amount of a taxpayer-funded grant. This year, the grant was $84 million for the general election. Meanwhile, Obama’s historic fundraising effort pulled in well more than $640 million for the primary and the general, allowing him to dramatically outspend McCain on ads, offices and get-out-the-vote efforts.

In the closing weeks of the campaign, McCain blamed Obama’s rejection of public financing and his prolific fundraising for “completely breaking whatever idea we had after Watergate to keep the costs and spending on campaigns under control.”

McCain told Fox News Sunday host Chris Wallace in October that Obama had “unleashed now in presidential campaigns a new flood of spending that will then cause a scandal and then we will fix it again. But Sen. Obama has broken it. And he broke his word to me and the American people when he signed a piece of paper, when he was a long-shot candidate, that he would take public financing if I would.”

That was a reference to a questionnaire Obama submitted last year to a coalition of non-profit groups advocating a reduction in the role of money in politics.

The questionnaire, from the Midwest Democracy Network, asked, “If you are nominated for president in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system?”

Obama answered “Yes.” Then, in the space provided for comments, he wrote: “I have been a long-time advocate for public financing of campaigns combined with free television and radio time as a way to reduce the influence of moneyed special interests.”

In response to another question, Obama wrote that he supported strengthening the public financing system, which was enacted after Watergate to minimize the corrupting influence of money on electoral politics.

Obama’s policy advisors still consider it a priority to revamp the public financing system, according to David Donnelly, director of Campaign Money Watch, a non-profit group that pushes for stricter campaign finance rules.

Obama’s “priorities Nos. 1, 2 and 3 are the economy, but I don’t think his commitment to (public financing) has changed,” said Donnelly. Still, Donnelly added “it’s important for him to take up this issue and show that he’s willing to follow through on his commitment.”

If Obama does champion campaign finance reform from the White House, McCain could be a key ally in Senate, predicted Donnelly, whose group during the campaign accused McCain of backing away from the issue.

McCain’s seminal legislative accomplishment was a 2002 overhaul of the campaign finance system, and for years before and after that, he sponsored legislation to revamp the public funding system. But Donnelly and other McCain critics accused McCain of shying away from campaign reform as he positioned himself for his 2008 campaign for the GOP presidential nomination.

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Stiff Republican Resistance Could Force Democrats to Wait for Obama and Their Party’s Enlarged Majority to Take Office

WASHINGTON — Congressional Democrats are scaling back plans for an economic-stimulus package as partisan deadlock clouds chances for passage of either that measure or a proposed bailout of Detroit’s auto makers until the party’s enlarged majority convenes in January.

Former auto worker Willie Daniel leaves a United Auto Workers hall in Brook Park, Ohio, on Wednesday. Like many UAW members, he took a buyout amid fears that jobs could disappear as car sales continue their steep decline.

Former auto worker Willie Daniel leaves a United Auto Workers hall in Brook Park, Ohio, on Wednesday. Like many UAW members, he took a buyout amid fears that jobs could disappear as car sales continue their steep decline.

Democratic leaders want to move legislation that would give a jobs-producing jolt to the economy. They also support proposals to toss a $25 billion financial lifeline to Detroit. But it isn’t clear either of those steps can pass before January, when President-elect Barack Obama and a new, more heavily Democratic Congress take office.

The biggest problem is in the Senate, where Democrats have only a 51-49 edge until year’s end. The Bush administration is balking at the Democratic agenda, and Republicans in the House and Senate are growing more vocal about their concerns, especially concerning the auto package.

“The financial situation facing the Big Three [auto makers] is not a national problem, but their problem,” said Alabama Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee.

In the House, Minority Leader John Boehner, the Ohio Republican, assailed the proposed aid to Detroit as “neither fair to taxpayers nor sound fiscal policy.”

Senate Banking Committee Chairman Christopher Dodd said Thursday that he knew of no Republicans who would support the $25 billion proposal by Democrats, and said he is disinclined to move a bill without bipartisan support.

“I’d want to be careful about bringing up a proposition that might fail,” given that a rescue plan would be more likely to pass under an Obama administration, the Connecticut Democrat told reporters on Capitol Hill. “There’s some political considerations that need to be made over the next few days.”

Senate Majority Leader Harry Reid of Nevada still plans to move forward next week. “Senator Reid still believes it is important to address this crisis plaguing our auto industry,” said Reid spokesman Jim Manley, adding that bipartisan cooperation will be needed. “We cannot do it without the support of Senate Republicans, who I hope will join us to pass a bill that saves the jobs and protects the livelihoods of millions of hard-working Americans.”

Mr. Dodd, meanwhile, wants to add foreclosure relief to an economic-stimulus package. He expressed frustration Thursday with efforts to help distressed homeowners by the private sector and the Bush administration, which was supposed to make foreclosure relief a top priority in the $700 billion rescue packaged enacted earlier this fall to stabilize financial markets.

“We want to see more progress,” Mr. Dodd said, adding he is prepared to legislate — “now, if possible” — to address the problem.

Read more

Two of the 63 requests for personal and professional records from a questionnaire for applicants to the Obama administration. Some requests cover applicants’ spouses and grown children.

Two of the 63 requests for personal and professional records from a questionnaire for applicants to the Obama administration. Some requests cover applicants’ spouses and grown children.

WASHINGTON — Want a top job in the Obama administration? Only pack rats need apply, preferably those not packing controversy.

A seven-page questionnaire being sent by the office of President-elect Barack Obama to those seeking cabinet and other high-ranking posts may be the most extensive — some say invasive — application ever.

Questionnaire for Job Applicants (pdf)

The questionnaire includes 63 requests for personal and professional records, some covering applicants’ spouses and grown children as well, that are forcing job-seekers to rummage from basements to attics, in shoe boxes, diaries and computer archives to document both their achievements and missteps.

Only the smallest details are excluded; traffic tickets carrying fines of less than $50 need not be reported, the application says. Applicants are asked whether they or anyone in their family owns a gun. They must include any e-mail that might embarrass the president-elect, along with any blog posts and links to their Facebook pages.

The application also asks applicants to “please list all aliases or ‘handles’ you have used to communicate on the Internet.”

The vetting process for executive branch jobs has been onerous for decades, with each incoming administration erecting new barriers in an effort to avoid the mistakes of the past, or the controversies of the present. It is typically updated to reflect technological change (there was no Facebook the last time a new president came to town).

But Mr. Obama has elevated the vetting even beyond what might have been expected, especially when it comes to applicants’ family members, in a reflection of his campaign rhetoric against lobbying and the back-scratching, self-serving ways of Washington.

“President-elect Obama made a commitment to change the way Washington does business, and the vetting process exemplifies that,” said Stephanie Cutter, chief spokeswoman for the Obama transition office.

Read on…

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WASHINGTON — Turning to campaign promises in which he pledged sweeping ethics restrictions, President-elect Barack Obama will bar lobbyists from helping to pay the costs of his transition to power or working for it in any area in which they have represented clients in the last year, his transition team said Tuesday.

Mr. Obama’s aides indicated that they expected the rules to apply to his inauguration as well as the transition, but said they had yet to make a final decision on how the inauguration would be paid for.

John D. Podesta, a co-chairman of the Obama transition, called the restraints “the strictest, the most far-reaching ethics rules of any transition team in history.”

“If someone has lobbied during the past 12 months, they’re prohibited from working in the fields of policy on which they lobbied and will have to cease all lobbying activities during their work on the transition,” Mr. Podesta said, speaking to reporters in the first official briefing by the transition team.

But the new rules do seem to leave some wiggle room. Aides to Mr. Obama, who declared during the campaign that lobbyists would not “find a job in my White House,” said the guidelines allowed for lobbyists to work on the transition in areas where they have not done any lobbying.

Further, the rules apply to lobbyists who must register with the federal government; many people who work for lobbying firms or in other areas of the influence business in Washington do not have to register, because they do not personally lobby federal officials on specific issues.

Mr. Podesta said he expected the transition to employ some 450 people and have a budget of about $12 million. Of that amount, $5.2 million will be paid by the government, with the remaining $6.8 million coming from private sources, he said. Contributions will be limited to $5,000, he said, and the transition will not accept money from political action committees.

During a presidential campaign in which he raised $650 million, Mr. Obama changed the rules of fund-raising, declining public financing and creating his own multimillion-member chain of donors. At least some of those contributors will be solicited for the transition.

As a candidate, Mr. Obama laid out more detailed and onerous ethics rules than any previous prospective president, pledging to bar appointees for two years from working on matters involving their former employers, to prohibit departing officials from lobbying his administration for its duration and to require all political appointees to disclose publicly every meeting with registered lobbyists.

The rules have led to some grumbling that at a time of immense challenges, an Obama administration could be excluding a pool of substantial talent by stopping people from working for the White House in the areas they know best.

“I’ve heard the complaint,” Mr. Podesta said, “which is we’re leaving all this expertise on the side, because we’re leaving all the people who know everything out in the cold. And so be it. This is a commitment that the American public expects, and it’s one that we intend to enforce during the transition.”

It remains unclear how the rules will affect the inauguration. President Bush raised more than $40 million for his second inauguration, mostly from companies and executives.

While aides to Mr. Obama say they are keenly aware that a lavish celebration might not be well received given the faltering economy, they indicate that the historic nature of Mr. Obama’s inauguration and the expectations of high turnout all but guarantee that the occasion, on Jan. 20, will be a huge one.

Yet in one early sign that the celebrations are likely to be somewhat scaled back, Mr. Obama canceled fireworks on election night in Grant Park in Chicago, telling his advisers that the times were too serious for that type of festivity.

“It’s going to be a balancing act,” one Obama aide said, “and I’m not sure how it’s going to be done.”

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green-job-crossroads

President-elect Barack Obama is hearing from private sector economists, and some members of his economic advisory team that Congress should consider — and he should sign into law in January — a far broader stimulus package than anyone has publicly discussed to date.

Instead of $300 billion dollars, which has been the upper limit, they are now talking about $500 billion, which is 3 to 4 percent of GDP.

These advisers are looking at analysis that says next year unemployment could top eight percent, private sector spending could drop six percent of GDP, and the Federal Reserve is basically out of room to do anything more with monetary policy.

So they argue the nation’s economy will need that injection of capital.

How? They’re talking about implementing it through infrastructure — roads and bridges. Tax cuts. Investments in so-called green-jobs and alternative energy development. Unemployment extensions. And other aid to state and local governments.

But the big question is: how do you get the stimulus without making it permanent spending that increases the deficit over the long term?

President-elect Barack Obama has made no final decisions on a stimulus package, but this is what they’re contemplating right now.

Source: ABC News

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ANCHORAGE — Gov. Sarah Palin has returned to Alaska fully recast and amplified.

Adored by many national conservatives, Ms. Palin is a prospect for a presidential run in 2012, supporters say. Caricatured by opponents, she is a candidate for political oblivion, say others.

Regardless, Ms. Palin told reporters the day after Election Day, “This has been all positive for me.”

Alaska, too, has been recast and amplified in the 10 weeks since Ms. Palin soared to national prominence as the Republican nominee for vice president, and the process has not necessarily been all positive.

Oil prices, which provide the bulk of state revenue, were well over $100 a barrel in late August when Ms. Palin left to campaign with Senator John McCain. Now they are slumming south of $60 a barrel, below the level required to balance the state budget. Increased scrutiny of Ms. Palin’s time as governor often painted an unflattering portrait of her administration. Investigative news reports have portrayed Ms. Palin as being consumed with personal matters and vindictiveness, particularly in the controversy over the firing of her public safety commissioner in what has become known as Troopergate.

Many Democrats, her allies in passing key legislation to raise taxes on oil companies and spur development of a natural gas pipeline, are outraged by her partisan attacks on now President-elect Barack Obama and on the tactics of the McCain-Palin campaign here at home.

Within the state’s Republican establishment — never Ms. Palin’s comfort zone — there is tension over the fate of Senator Ted Stevens, who was convicted last month of failing to disclose gifts and free home renovations he received. Ms. Palin called on Mr. Stevens to resign even as state Republicans urged his re-election. A preliminary vote count suggests he could win a seventh full term.

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Even if Mr. Stevens wins, he could still be forced to resign, and Ms. Palin is widely viewed as a strong candidate to win his seat in the special election that would have to be held to replace him.

Ms. Palin has largely dodged questions about her long-term political future, and as she gets back to governing full time, few people know what to expect from her in the immediate future.

“She’s coming back to a whole different world from when she left,” said State Representative John Coghill, a Republican from North Pole who is chairman of the powerful House Rules Committee. “If she comes back with a puffed up ego there’s going to be problems. But if she comes back ready to work, that will be better.”

Ms. Palin, in an interview in her office on Friday, said she was ready to work.

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“Now we kick in that fiscal conservativeness that needs to be engaged, and we progress this state with $57-a-barrel oil,” Ms. Palin said. She said the state would have to “be prudent with public dollars and provide services more efficiently than have ever been provided in the state of Alaska before.”

The price and production of oil determines state finances: taxes on oil bring in about 85 percent of state revenue. To balance the budget for the 2008-9 fiscal year, the price of oil needs to average $74 over the 12 months, said Karen J. Rehfeld, director of the state office of management and budget. If it falls below that average, the state could have to make emergency cuts or dip into a reserve account that contains several billion dollars. High prices early in the fiscal year may help keep the average up this year, but next year is another matter.

Ms. Palin, first elected governor in 2006, has governed only in times of budget surpluses, and lawmakers said they had many questions about how she would lead now.

“I just don’t know what kind of philosophy she’s going to have when she comes back,” said State Representative John Harris, a Republican and the departing House speaker.

Noting that his chief of staff, John Bitney, was once the governor’s legislative director, Mr. Harris added, “We were just trying to figure out what kind of policy things the governor may want to address and we were kind of scratching our heads, because we don’t know.”

Mr. Harris was among several lawmakers who questioned whether Ms. Palin would spend the rest of her term, which ends in 2010, positioning herself to run for national office. Would she pursue a socially conservative agenda, promoting bills to restrict abortion or gay rights, issues she largely passed on in her first two years in office because she was trying to win support from Democrats on other issues? Would she move to the center? Would she continue to rail against “the old boy network,” stoking her reformist image at the expense of her fellow Republicans, whose party has been tarnished by corruption scandals, including that of Mr. Stevens?

Ms. Palin rejected the idea that she would be playing to a larger audience.

“My actions will continue to be first and foremost in good service to the state of Alaska,” she said in the interview.

But other than suggesting that cost cuts were to come, Ms. Palin did not hint at a broader agenda.

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The governor is due to submit her 2009-10 budget next month, and neither she nor her aides offered specifics about what it might contain. The McCain-Palin campaign portrayed Ms. Palin as an energy expert, and one top priority Ms. Palin expressed well before she was selected to run for the vice presidency was to improve energy sources for different parts of the state. That includes finding cheaper sources of energy for rural villages, which often rely on inefficient diesel power, as well as for cities like Fairbanks, the state’s second largest, where utilities rely on oil and coal.

The state also faces questions over issues like financing Medicaid, increasing mining in environmentally sensitive areas and spending on transportation projects, as well as the complex negotiations involved in trying to develop the gas pipeline with the cooperation of the same oil companies whose taxes Ms. Palin has raised.

Ms. Palin’s partisanship on the campaign trail may be what most surprised people at home.

“She’s coming back to a divided state, where Democrats had supported her but they watched her for two months call the president-elect of the United States a terrorist sympathizer,” said State Representative Les Gara, Democratic of Anchorage. “She called him a socialist.”

Her partisanship also surprised some conservative Republicans, who were accustomed to feeling ignored while Ms. Palin nurtured alliances with Democrats and moderate Republicans. Now, some Republicans who have been at odds with Ms. Palin in the past are wondering if her partisan tone on the campaign trail might mean they will have her ear more than before.

“It appears that way,” said Mr. Coghill, the Republican from North Pole. Mr. Coghill said Ms. Palin’s emphasis on socially conservative issues on the campaign trail has helped persuade him that now is the time to ask Ms. Palin to actively support a bill that would require minors seeking abortions to notify their parents in advance.

“There are some people in our caucus who are skeptical” that Ms. Palin might ally herself more with Republicans now, Mr. Coghill said. “But they’re willing to take the chance, to step up and play.”

Ms. Palin suggested in the interview that how she ran for vice president would not shape how she governs Alaska.

“If anybody wants to try to criticize and say, ‘Oh, all of a sudden she’s an obsessive partisan,’ they’re wrong,” she said.

But she did allow that she thinks beyond her current role.

“Around every corner is something new,” Ms. Palin said, “so I look forward to seeing what happens next. But for now, it’s great to be back in the governor’s office.”

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