02-19-2017  10:47 pm      •     

WASHINGTON (AP) _ President Barack Obama regrouped Sunday at his Camp David retreat, preparing to unveil the administration's plans for a long-term overhaul of the stricken U.S. financial system.
The Obama administration, appearing blind-sided by and wrong-footed in its response to millions of dollars in bonus payments to employees of a giant insurance and financial company being kept afloat by taxpayer bailout money, was expected as early as Monday to detail its vision for easing the country's seized-up credit markets. The Treasury Department plans to take as much as $1 trillion in so-called toxic assets off the books of endangered banks.
Christina Romer, a top Obama economic adviser, said the government would achieve that goal by using $100 billion from the $700 billion financial rescue package to entice private investors to buy the bad assets and hold them until the system recovers. She said the Federal Reserve would inject more capital as well, but did not specify how much.
The goal: Thawing the frozen credit system which has been denying loans to businesses and consumers, compounding the country's deep recession.
Romer said the approach is one more piece in the administration's plan to revive the collapsing economy. Romer said she did not think Monday's expected announcement would cause the same kind of stock market plunge that greeted Treasury Secretary Timothy Geithner's original discussion of the plan last month.
On Tuesday, Obama will hold a nationally broadcast news conference as he seeks to regain the offensive for his ambitious agenda. Obama wants to use the country's worst economic crisis since the Great Depression of the 1930s as a vehicle also for revamping national health care, energy, education and tax policies.
But being heard above the din may prove difficult. Lawmakers are wrangling over taxing the big bonuses for employees of American International Group Inc. and concerns that Obama's budget could generate $9.3 trillion in deficits over the next decade.
"I realize there are those who say these plans are too ambitious to enact,'' Obama said in his weekend radio and Internet address. "To that I say that the challenges we face are too large to ignore. I didn't come here to pass on our problems to the next president or the next generation _ I came here to solve them.''
Over the past week, Obama sought to spread his message unfiltered to people, tapping his massive e-mail list to promote his agenda one on one and speaking to enthusiastic supporters at town hall meetings in California. But dominating all else was the disclosure that AIG had paid out $165 million in bonuses to employees, including to traders in the financial unit that took the company and the U.S. financial system to the brink of collapse.
The New York Times reported Sunday that Obama's financial regulatory proposals would include recommendations for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies. The administration was still debating details of the plan, including how broadly it should be applied and how far it should go beyond simple reporting requirements, the Times said, quoting unnamed officials.
Last week ended with more news that kept the White House on the defensive. Congressional auditors estimated the country's budget deficit in coming years would nearly double what the administration was predicting.
Sen. Judd Gregg, the top Republican on the Senate Budget Committee, declared the president's massive budget proposal would bankrupt the United States. The New Hampshire senator, who withdrew his nomination to serve Obama as commerce secretary, said Obama's spending plan would leave the next generation of Americans living in a country that was too expensive to afford.
Republicans used their Saturday response to condemn Obama's budget as a breathtaking spending spree. As states and families are struggling to cut spending, the president's budget "spends too much, taxes too much and borrows too much,'' said Mississippi Gov. Haley Barbour.
Attempting to diminish the importance of the angry noise in the capital, Obama said Saturday that people are more concerned about having a paycheck and being able to pay college or medical bills than they are about "the news of the day in Washington.''
Those are the concerns, he said, that he addresses in his budget, which he calls an economic blueprint for the future. It is "a vision of America where growth is not based on real estate bubbles or over-leveraged banks, but on a firm foundation of investments in energy, education and health care that will lead to a real and lasting prosperity,'' Obama said.
He also took the opportunity in an interview with CBS television's "60 Minutes'' to affirm his support for Geithner, roundly criticized over the bonus flap and steps to revive the economy.
In the interview set to air Sunday evening, Obama said that if Geithner offered his resignation, the answer would be, "Sorry buddy, you've still got the job.'' CBS released excerpts Saturday.
Gregg, too, backed Geithner and said _ despite criticism of the budget plan _ that the administration's financial rescue efforts were needed and appropriate.

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  • WASHINGTON (AP) — One month after the inauguration, the stretch of Pennsylvania Avenue in front of Donald Trump's White House still is a hard-hat zone. Skeletal remains of the inaugural reviewing stands poke skyward. Random piles of plywood and cables are heaped on the ground inside crooked lines of metal fencing. The disarray outside the president's front door, though not his fault, serves as a metaphor for the tumult still unfolding inside. Four weeks in, the man who says he inherited "a mess" at home and abroad is presiding over a White House that is widely described as itself being a mess. At a stunning pace, Trump has riled world leaders and frustrated allies. He was dealt a bruising legal blow on one of his signature policies. He lost his national security adviser and his pick for labor secretary to scandal. He's seen forces within his government push back against his policies and leak confidential information. All of this has played out amid a steady drip of revelations about an FBI investigation into his campaign's contacts with Russian intelligence officials. Trump says his administration is running like a "fine-tuned machine." He points to the rising stock market and the devotion of his still-loyal supporters as evidence that all is well, although his job approval rating is much lower than that for prior presidents in their first weeks in office. Stung by the unrelenting criticism coming his way, Trump dismisses much of it as "fake news" delivered by "the enemy of the people" — aka the press. Daily denunciations of the media are just one of the new White House fixtures Americans are adjusting to. Most days start (and end) with presidential tweets riffing off of whatever's on TV talk shows or teasing coming events or hurling insults at the media. At some point in the day, count on Trump to cast back to the marvels of his upset of Democrat Hillary Clinton in the November election and quite possibly overstate his margins of support. Expect more denunciations of the "dishonest" press and its "fake news." From there, things can veer in unexpected directions as Trump offers up policy pronouncements or offhand remarks that leave even White House aides struggling to interpret them. The long-standing U.S. policy of seeking a two-state solution to the Israeli-Palestinian conflict? Trump this past week offered this cryptic pronouncement: "I'm looking at two-state and one-state, and I like the one that both parties like. I can live with either one." His U.N. ambassador, Nikki Haley, the next day insisted, "We absolutely support a two-state solution." Trump's days are busy. Outside groups troop in for "listening sessions." Foreign leaders call or come to visit. (Or, in the case of Mexico's president, cancel out in pique over Trump's talk about the planned border wall.) After the president signed two dozen executive actions, the White House was awaiting a rush order of more of the gold-plated Cross pens that Trump prefers to the chrome-plated ones used by his predecessor. Trump hands them out as souvenirs at the signing ceremonies that he points to as evidence of his ambitious pace. "This last month has represented an unprecedented degree of action on behalf of the great citizens of our country," Trump said at a Thursday news conference. "Again, I say it. There has never been a presidency that's done so much in such a short period of time." That's all music to the ears of his followers, who sent him to Washington to upend the established order and play the role of disrupter. "I can't believe there's actually a politician doing what he says he would do," says an approving Scott Hiltgen, a 66-year-old office furniture sales broker from River Falls, Wisconsin. "That never happens." Disrupt Trump has. But there may be more sound and fury than substance to many of his early actions. Trump did select Judge Neil Gorsuch to replace the late Antonin Scalia on the Supreme Court, a nomination that has drawn strong reviews from conservatives. But the president is regrouping on immigration after federal judges blocked his order to suspend the United States' refugee program and ban visitors from seven Muslim-majority countries, which had caused chaos for travelers around the globe. Some other orders on issues such as the U.S.-Mexico border wall and former President Barack Obama's health care law are of limited effect. Trump says his early actions show he means to deliver on the promises he made during the campaign. "A lot of people say, 'Oh, oh, Trump was only kidding with the wall,'" the president told a group of police chiefs recently. "I wasn't kidding. I don't kid." But the Republican-led Congress is still waiting to see specifics on how Trump wants to proceed legislatively on top initiatives such as replacing the health care law, enacting tax cuts and revising trade deals. The messy rollout of the travel ban and tumult over the ouster of national security adviser Michael Flynn for misrepresenting his contacts with Russia are part of a broader state of disarray as different figures in Trump's White House jockey for power and leaks reveal internal discord in the machinations of the presidency. "I thought by now you'd at least hear the outlines of domestic legislation like tax cuts," says Princeton historian Julian Zelizer. "But a lot of that has slowed. Trump shouldn't mistake the fact that some of his supporters like his style with the fact that a lot of Republicans just want the policies he promised them. He has to deliver that." Put Senate Majority Leader Mitch McConnell, R-Ky., in the camp of those more interested in substance than style. "I'm not a great fan of daily tweets," McConnell said Friday, referring to the "extra discussion" that Trump likes to engage in. But McConnell was quick to add: "What I am a fan of is what he's been actually doing." He credits Trump with assembling a conservative Cabinet and taking steps to reduce government regulation, and promised: "We like his positions and we're going to pursue them as vigorously as we can." The challenge may be to tease out exactly what Trump wants in the way of a health care plan, tax changes and trade policy. At his long and defiant news conference on Thursday, Trump tried to dispel the impression of a White House in crisis, squarely blaming the press for keeping him from moving forward more decisively on his agenda. Pointing to his chief of staff, Reince Priebus, Trump said, "You take a look at Reince, he's working so hard just putting out fires that are fake fires. I mean, they're fake. They're not true. And isn't that a shame because he'd rather be working on health care, he'd rather be working on tax reform." For all the frustrations of his early days as president, Trump still seems tickled by the trappings of his office. When New Jersey Gov. Chris Christie visited the White House last week to discuss the national opioid epidemic over lunch, the governor said Trump informed him: "Chris, you and I are going to have the meatloaf.'" Trump added: "I'm telling you, the meatloaf is fabulous." ___Follow Nancy Benac on Twitter at http://twitter.com/nbenac
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