From NBC's Lisa Myers

On a conference call, New York Attorney General Andrew Cuomo says he has not yet received information on bonuses from Bank of America, but expects to get it today. He wants to review the information before he decides whether or how to make it public.

AIG has until the end of the day to comply with a subpoena for bonus info.

On the broader issue, Cuomo said he has been investigating the bonus practices of all TARP recipients.

He added that by withholding the bonus information, the banks are fueling a lack of confidence.

"Let the American people see," Cuomo said. "When you hide the ball, you make people suspicious."

AIG CEO Edward Liddy testified that he would like to comply with the subpoenas, but is concerned for the safety of the employees, many of whom have received death threats.

*** UPDATE *** AIG has gotten the list of names to Cuomo. Cuomo says office will conduct a "risk assessment" before releasing any names.

I have received the list of AIG FP employees who received retention payouts.  Mr. Liddy testified in Congress yesterday that he intended to comply with our subpoena and expressed concern for employee safety.  Mr. Liddy has in fact now complied with the subpoena.  We are aware of the security concerns of AIG employees, and we will be sensitive to those issues by doing a risk assessment before releasing any individual's name.  The Attorney General's Office is a law enforcement agency and is experienced in making these assessments. 

As we perform our review, we will simultaneously be working with AIG over the next few days to determine which employees received payments
and which chose to return the money they received.  

The Attorney General's Office will responsibly balance the public's right to know how their tax dollars are spent with individual security, privacy rights, and corporate prerogative. 

At this moment, with emotions running high, it is important that we proceed diligently, with care, reflection, and sober judgment.

We thank AIG for their compliance.

NBC's Chief White House Correspondent Chuck Todd wants to know what questions you'd like for him to ask President Obama during his prime time news conference next Tuesday night? Send him your ideas here.

On "The Rachel Maddow Show," Chuck describes what he's learned by reading the user-submitted questions. (VIDEO)

From NBC's Mike Viqueira

House Republicans will by and large vote against the bonus tax today.

A spokesman for John Boehner says the leader will vote against it. Also, the leader of the conservative caucus has just put out a memo to his members asking for a "nay" vote (full release below).

But House Democratic leaders have brought it up under special rules that require a two-thirds majority for passage. So now the question becomes, will it pass?

The debate and vote is scheduled for perhaps later this afternoon.

Question: Can you even stand the suspense?

GOP Conservative "action alert":
RSC Chairman Price urges all RSC Members to vote no on today's retroactive tax punishment bill (H.R. 1586, introduced by Rep. Charles Rangel, D-NY).

NOTE: The National Taxpayers Union (NTU) will score AGAINST this bill in its annual ratings of Congress. More information on other groups is forthcoming.

The legislation imposes a 90% tax for bonuses received by an employee of a company that has received funds in excess of $5 billion from the Troubled Asset Relief Program (TARP)-or an employee of Fannie Mae or Freddie Mac. The bill establishes a gross income exemption (including the bonus) of $250,000--or $125,000 in the case of a married individual filing separately.

Possible Conservative Concerns:
Two Wrongs Don't Make a Right. Most conservatives remain opposed to the massive taxpayer "bailouts" of private organizations. Without the bailouts, the taxpayers would never have been put in the position of their dollars being doled out for executive bonuses. But since the bonuses have been distributed, the solution is not to compound the problem with more inappropriate actions by the federal government. Two wrongs don't make a right.

Retroactive Tax Increase. The tax increase in the bill would be applied to bonuses paid after December 31, 2008. Many conservatives believe that retroactive tax increases are unfair and unconstitutional.

Confiscatory Tax Rate. The legislation creates a tax rate of 90%. According to the Tax Policy Center, the income tax has not had a tax rate at that level since 1963. Even before the 1981 tax cut under President Reagan, the top tax rate was 70%. Some conservatives may be concerned that this legislation establishes the precedent that the tax code can be used to impose confiscatory tax rates on other individuals.

Bill of Attainder. The bill, while not mentioning AIG by name, is clearly meant to punish AIG executives who received high bonuses--a specific group of individuals in response to public outrage over the bonuses. As Roll Call put it:

"House and Senate leaders moved at breakneck speed Wednesday to turn outrage over bonuses at American International Group and other bailed-out companies into retribution, with votes beginning today to impose punishing new tax provisions on the firms."

The author of the bill, Rep. Rangel, explains his motivation for the bill by saying that he "had an obligation to respond to the fears and anger of the people."

Given this motivation, many conservatives may believe that this legislation is a "Bill of Attainder"-a legislative action aimed at punishing individuals, explicitly prohibited by the Constitution in Article I, Section 9, Clause 3.

From NBC's Ken Strickland and Mark Murray
In a news conference today, four of the five members of the GOP leadership team pressed the administration to find out how legislation in the recently passed stimulus bill allowed the AIG bonuses to go forward.

And their criticism of President Obama went beyond AIG. "He flies off to Los Angeles tonight to be on the Jay Leno Show," Sen. Jon Kyl said. "My suggestion is that he come back -- since he's taken the full responsibility [for the AIG bonuses] -- to get his people together and say, 'All right, I want to know exactly what happened? Who did what when? And how are we going to prevent this from ever happening in the future?'"

Sen. Lamar Alexander also picked on Obama's NCAA basketball picks. "He's even found time to fill out his NCAA basketball brackets, which is a healthy thing to do in my opinion. But he picked North Carolina, and he caused the Duke coach, our Olympic coach, Coach K, to say respectfully, 'You might be spending less time on the brackets Mr. President and more time on the economy.' I think that's what we'd like to say, with respect."

(Just pointing this out, but John McCain and Virginia GOP gubernatorial candidate Bob McDonnell are sponsoring NCAA-pick contests. And Sen. Chuck Grassley is Twittering about today's tournament games.)

[/excerpt]

From NBC's Domenico Montanaro

You knew that President Obama picking UNC as the champs and Duke out in the Elite Eight was going to stir the Tobacco Road hornet's nest.

But who knew that Coach K himself would weigh in?

"Somebody said that we're not in President Obama's Final Four, and as much as I respect what he's doing, really, the economy is something that he should focus on, probably more than the brackets," Duke coach Mike Krzyzewski told the Associated Press.

Zing.

But maybe it's not surprising that Krzyzewski took his shot at this president.

After all, not only did Dean Smith, the original Carolina coaching legend, endorse Obama during the 2008 campaign (Coach K did not), but Kryzeweski landed in hot water in 2002 for hosting an on-campus fund-raiser for Republican Elizabeth Dole, then a candidate for U.S. Senate. (Dole was ousted in 2008 by now-Sen. Kay Hagan.)

*** UPDATE *** The president has responded: "I didn't pick him to go to the finals," Obama told liberal radio host Ed Schultz. "Look, he's a competitive guy, I just don't think they've got the inside game to go all the way." (Hat tip: Jonathan Martin.)

[/excerpt]

From NBC's Domenico Montanaro

You knew that President Obama picking UNC as the champs and Duke out in the Elite Eight was going to stir the Tobacco Road hornet's nest.

But who knew that Coach K himself would weigh in?

"Somebody said that we're not in President Obama's Final Four, and as much as I respect what he's doing, really, the economy is something that he should focus on, probably more than the brackets," Duke coach Mike Krzyzewski told the Associated Press.

Zing.

But maybe it's not surprising that Krzyzewski took his shot at this president.

After all, not only did Dean Smith, the original Carolina coaching legend, endorse Obama during the 2008 campaign (Coach K did not), but Kryzeweski landed in hot water in 2002 for hosting an on-campus fund-raiser for Republican Elizabeth Dole, then a candidate for U.S. Senate. (Dole was ousted in 2008 by now-Sen. Kay Hagan.)

"It wasn't as if the coach with the nasally voice of a man in need of Nyquil shouted 'Blue Devils for Dole!' in his locker room, but Krzyzewski's public politics have left his character tobacco-stained in North Carolina," sports columnist Selena Roberts wrote Nov. 3, 2002 in the New York Times. "Somehow, Saint Mike became the target of language reserved for attack ads after he dared to throw his Dookie-ness behind Dole in a tighter-than-expected United States Senate race."

She added, "Had Coach K dipped into a private university list? Had he created a tacit university endorsement by his association? The issue caused a stir from Asheville to Kitty Hawk. Even the Duke newspaper, The Chronicle, criticized the unsavory appearance of Krzyzewski's role in the reception. It was like being heckled by his own Cameron Crazies. ... Suddenly, Coach Klean had been sullied, as if his halo had been made of nothing more than tinfoil and pipe cleaners."

And it's not the first time Coach K and Smith have been linked in political controversy.

Krzyzewski "should have known the consequences of stepping into Dean Smith's sandbox," Roberts wrote. "Krzyzewski is a Durham legend, but Smith is a Carolina icon. And in a state where basketball and politics commingle as religions, Smith owns both pulpits. Some suspect that Krzyzewski came to Dole's side after Smith attached his name to Erskine Bowles, the Democrat in the Senate race. But if Smith can support Ichabod Crane in pinstripes, why can't Krzyzewski aid Scarlett in a power suit? The good folks from the University of North Carolina -- home of the Dean Dome -- point out a major difference: Smith retired from coaching five years ago."

*** UPDATE *** The president has responded: "I didn't pick him to go to the finals," Obama told liberal radio host Ed Schultz. "Look, he's a competitive guy, I just don't think they've got the inside game to go all the way." (Hat tip: Jonathan Martin.)

From NBC's Mark Murray
During the presidential campaign, one of the biggest foreign policy differences between Obama and McCain was their view about the central front in the war on terrorism -- Obama said it was in Afghanistan/Pakistan, while McCain said it was in Iraq.

McCain, in fact, didn't call for sending more troops to Afghanistan until the very day when Obama unveiled his plan to divert U.S. troops from Iraq to Afghanistan.

But now, with troops set to leave Iraq, McCain is focusing on Afghanistan. And he appears to be applying the same rhetoric to Afghanistan that he once saved for Iraq. In a Washington Post op-ed he co-authors with ally Joe Lieberman, the Arizona senator warns the Obama administration to not adopt a "minimalist" approach to Afghanistan.

"Let there be no doubt: The war in Afghanistan can be won. Success -- a stable, secure, self-governing Afghanistan that is not a terrorist sanctuary -- can be achieved. Just as in Iraq, there is no shortcut to success, no clever 'middle way' that allows us to achieve more by doing less. A minimalist approach in Afghanistan is a recipe not for winning smarter but for losing slowly at tremendous cost in American lives, treasure and security."

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Reclaiming the bully pulpit: So what do you do when the American public is outraged beyond belief at the AIG bonuses? When congressional Republicans and now even some Democrats (see: Dodd, Christopher) are blaming your administration? You get out of Washington and use a power that these people don't have: the bully pulpit. That's what President Obama did yesterday at his town hall in Orange County, CA -- an event that was planned before the news about the AIG bonuses first surfaced. At the town hall, Obama accepted responsibility over the AIG mess ("Some say it's the Democrats' fault, the Republicans' fault. Listen, I'll take responsibility. I'm the president"). He presented himself as the anti-Washington figure ("It's always good to get out of Washington for a little while"). And he struck a populist tone (describing a culture "where people made enormous sums for taking irresponsible risks that have now put the whole economy at risk"). Earlier in the day, Obama seemed to accidentally refer to "voters." It appeared the president had slipped into candidate mode. But he clearly was "fired up and ready to go," and perhaps showed that he misses the good old days of the campaign trail.

Video: Obama speaks on AIG bonuses.

*** California, Day Two: The president today will most likely pick up where he left off yesterday when he tours an electric vehicle plant in Pomona, CA, making remarks there at 1:45 pm ET; holds a town hall at 4:10 pm in Los Angeles, where he'll be joined by California. Gov. (and stimulus supporter) Arnold Schwarzenegger (R); and then tapes his appearance on "The Tonight Show with Jay Leno" at 7:20 pm. Critics, of course, are wondering whether it's appropriate for the president to be filling out NCAA tournament brackets and appearing on Leno, especially during these tough economic times. But after following the presidential election for the past two years, who didn't think Obama would be having a little fun with the NCAA tournament? 

*** Saving Private Geithner: Right before he departed to California yesterday, Obama also used the bully pulpit to perform his own rescue of sorts -- this one saving his Treasury secretary. "Tim Geithner didn't draft these contracts with AIG," Obama said.

"There has never been a secretary of the Treasury, except maybe Alexander Hamilton right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with, all at the same time." The president clearly bought Geithner some time from what was turning into a feeding frenzy for his head. What is Plan B, anyway? Whom does the congressional lynch mob that's currently eyeing Geithner want instead, if Geithner is forced to step down? Geithner's toxic asset plan, which could come out as early as today or could be unveiled next week, involves some combination of government financing for hedge funds and other folks who have the cash to buy up these questionable assets. It could mean some Wall Street titans could make money, thanks to the government. It's not a popular plan, but given the need for the government to find a private sector solution, what choice does he have?

*** Saving yourself: While Obama yesterday was accepting responsibility for the AIG bonuses and trying to save his Treasury secretary, Chris Dodd was trying to save … himself.

That's what happened when he said that it was the Treasury Department that had requested the loophole for executive bonuses that were contained in contracts before Feb. 2009. "Sen. Dodd's original executive compensation amendment adopted by the Senate did not include an exemption for existing contracts that provided for these types of bonuses," his office said last night. "Because of negotiations with the Treasury Department and the bill conferees, several modifications were made, including adding the exemption, to ensure that some bonus restrictions would be included in the final stimulus bill." Treasury sources dispute Dodd's account. Despite pointing the finger at the Obama administration, it seems as if Dodd's political problems -- he's up for re-election in 2010 and seems vulnerable -- are going from bad to worse.

*** Czar wars: Mindful that this bonus issue may have fallen through the regulatory cracks at both Treasury and the Fed, the Obama administration is asking Congress to create a new regulatory agency. Just as the FDIC has the power to shut down banks without a bankruptcy court, this new agency could take the lead on complicated cases like AIG, allowing the agency head to act as a bailout czar. Bottom line: If Congress gives Obama this new agency, it means the fogginess of who is in charge of AIG (Treasury or the Fed) gets cleared up. And that person would be the one held accountable for the NEXT problem with AIG. Speaking of problems, these bonus stories out of Merrill Lynch are only adding fuel to the populist fire, and could make Obama and Geithner's job of getting more congressionally-approved bailout money that much harder. In fact, it could mean that Ben Bernanke's Fed will have to step in and start handing out more cash. What Bernanke did yesterday seemed to single-handedly turn the market around for the day. By the way, is this the week that the Fed chairman began to show signs of having the credibility to be his own oracle of sorts -- a la Greenspan in the '90s and Volcker of the '80s?

*** Just askin': While we love the outrage soundbites for television, do the congressional theatrics regarding the AIG bonuses really serve the institution well? Yesterday's AIG show was a substantive hearing at many points. But because there was grandstanding on both sides, it did seem to trivialize the confrontation and probably make lots of folks watching wondering if this group of people really is the best and brightest to be running the country. Individually, members of Congress usually do come across as very capable people. But put three or more members together in a hearing -- especially with a TV camera on -- and they seem to, well, morph into something else.

*** Nationalize this: We're always leery of reading too much into a special election. But the contest at the end of this month to fill Kirsten Gillibrand's congressional seat has become something to watch -- not only because it's the first race of 2009, but also because it's being fought on national issues. The big one is Obama's stimulus, which Democratic candidate Scott Murphy supports and Republican Jim Tedisco opposes (although he didn't take a position until recently). Also, Tedisco now argues that Murphy's support for the stimulus means that he supports the AIG bonuses, since it included language protecting bonuses that had been agreed to before this past February; Tedisco even has a new TV ad hitting Murphy on the subject. And Tedisco is blasting Murphy's ties to Wall Street and high finance (which certainly aren't popular right now), and Murphy is countering with Tedisco's longtime service in the State Assembly. One thing is pretty clear: While Tedisco once had a sizable lead in polls, the race has now narrowed. Given that -- and given the candidates are dueling over the stimulus -- does Obama decide to swoop into the race and stump for Murphy?

Countdown to NY-20 special: 12 days
Countdown to Obama's 100th day: 41 days 
Countdown to NJ GOP primary: 75 days
Countdown to VA Dem primary: 82 days
Countdown to Election Day 2009: 229 days
Countdown to Election Day 2010: 593 days

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The Washington Post: "Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis… AIG executives said the Fed was informed three months ago by the company that it would pay $165 million by March 15 to employees working at its most troubled division. The Treasury and White House said they learned of the payments from Fed officials only days before they were due."

More: "Close coordination between the Fed and the administration is now more important than ever as they near the launch of two signature programs to rescue the financial system, which together could reach $2 trillion and are aimed at reviving consumer lending and purchasing soured assets and loans from ailing banks."

The New York Times front-pages that now has become a defining moment for Treasury Secretary Geithner. "On Wednesday, a junior Republican in Congress and some traders on Wall Street went so far as to call for him to quit or be fired. The Republican leader of the House, Representative John A. Boehner of Ohio, told a conservative talk-radio host that the secretary is 'on thin ice.' But Mr. Geithner's boss, the president, interjected a vote of 'complete confidence.'"

"'Tim Geithner didn't draft these contracts with A.I.G.,' Mr. Obama told reporters as he left for California on Wednesday. 'There has never been a secretary of the Treasury, except maybe Alexander Hamilton right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with — all at the same time.'"

But that didn't stop the New York Post's Hurt from jumping on the dump-Geithner bandwagon. "At least AIG boss Edward Liddy was man enough to show up and explain himself before Congress yesterday. Treasury Secretary Timothy Geithner -- the tax cheat and 'architect' of the AIG Ponzi scheme that Congress calls a 'bailout' -- wouldn't even untuck his tail from between his legs and show his face before Congress." And taking it a little far: "Geithner might have been stoned to death outside the committee room by angry mobs of innocent citizens infuriated that in these tough times."

The Los Angeles Times covers Obama's town hall remarks yesterday in California, where 1,300 came to hear him speak. "Obama addressed the crowd with a mix of wonky detail about the roots of the economic collapse (even using the term 'securitized mortgage instruments' at one point) and a promise that recovery was in the offing. Fielding a range of questions, he outlined his thinking on immigration, bank loans and school class size. 'I can't tell you how long it's going to take or what obstacles we'll face along the way, but I can promise you this: There will be brighter days ahead, here in California and all across America,' the president said. 'But that's only going to happen if we pull together and focus on the big things -- focus on the long term.'"

The New York Times: "Mr. Obama's trip to California was planned before the explosion over A.I.G. bonuses last weekend. But he clearly appeared to relish the opportunity to talk about something different. 'It's always good to get out of Washington for a little while and come to places like Costa Mesa, because the climate's a lot nicer and so is the conversation,' Mr. Obama said."

"The Costa Mesa visit — to be followed Thursday by trips to Los Angeles and Burbank, where he will tape 'The Tonight Show with Jay Leno' — is part of the White House effort to sell the budget to America before the expected fight in Congress. The White House announced Wednesday that Mr. Obama will hold another prime time news conference at 8 p.m. Tuesday."

The Washington Post adds, "California supported Obama in last year's election, and Republican Gov. Arnold Schwarzenegger endorsed the president's stimulus package, which will bring a state with a 10.1 percent unemployment rate more than $30 billion in federal help. But an angry populism fed by the financial crisis is rising in the country, including among moderate Republicans, whose support for Obama in this state was important to his success. Here in traditionally conservative Orange County, which he lost in last year's election, his visit was as much a show of solidarity as a sales opportunity."

In other news… Obama is considering moving federal agents to the Southwest border. 
 
The president is apparently putting immigration reform on the docket, too.

"Under intense pressure from the Obama administration and Congress, the head of bailed-out insurance giant AIG declared Wednesday that some of the firm's executives have begun returning all or part of bonuses totaling $165 million," the AP writes.

But the Boston Globe says "the concession did little to assuage indignation or alter the hearing's dynamic: a gathering of aggrieved shareholders confronting the runaway management of a company they control but seem happy to loathe."

The Washington Post's Dana Milbank writes that Liddy was a congressional punching bag yesterday.

Per NBC's Mike Viqueira, the House today will take up and bill that would tax bonuses at a rate of 90%. That rate would apply to employees of companies receiving TARP funds in excess of $5 billion, and as long as that individual's family income is below $250,000. The bill is retroactive to Jan. 1, 2009. Asked why the rate was 90% and not 100%, Ways and Means Chairman Charlie Rangel joked that "state and local governments will take the extra 10%." Viq also points out that Rangel had been quoted on Tuesday as saying that he didn't want to do what the House is set to do, on the grounds that the tax code should not be "punitive." Asked about that yesterday, Rangel said that this was the only way to go about it. The Senate will try to take up a related measure today.

Republicans seem split and confused about the plan to tax the AIG bonuses. "When is a tax hike not a tax hike?" Politico writes.

"The Senate voted 92-5 on Wednesday to confirm former Dallas Mayor Ron Kirk (D) as the United States trade representative," Roll Call reports. "With Kirk's installment as the trade representative a near lock going into its final vote, Senators focused more on embattled insurance giant American International Group during the 90 minute floor debate designated for the nomination." 
 
And the third time just may be the charm for Obama's pick for Commerce Secretary. Gary Locke sailed through his confirmation hearing yesterday.

Reid and Durbin were questioned by the Ethics Committee on the Burris appointment.

The Hill's Youngman looks at Democrats speaking out against Obama: "The Democrats' willingness to take on the new leader of their party stands in stark contrast to how GOP lawmakers dealt with President George W. Bush."

Labor groups SEIU and Change to Win will be holding events across the country today in an effort to push for the Employee Free Choice Act, universal health care, and banking reform.

Per Roll Call, DSCC Chair Sen. Robert Menendez laid out the 2010 map and "said he is encouraged by Democrats' strong early recruiting effort, a rash of retirements on the other side of the aisle and a Republican political strategy that he said is built on obstruction and 'betting on failure.'" The DSCC, Menendez acknowledged, is trying to ward off any primary challengers to Bennett (CO) and Gillibrand (NY). One place there will definitely be a primary challenge is in Illinois, but Menendez said, a seat in Illinois "will be incredibly hard for us to lose." "Other states where the Democratic field remains in flux include Ohio, Kentucky and Florida." In Missouri and New Hampshire, the most likely pick off, Dems already have their preferred candidates. 
 
The RNC "will report raising $5.1 million during the month of February when reports are filed Friday with the Federal Election Commission. The number is down slightly from the amount the party raised in January, when the RNC raised $5.77 million..."

Stu Rothenberg, writing in Roll Call, with an interesting take: "Don't be surprised if you soon hear Democrats asserting that midterm elections are referendums on incumbent presidents and that as long as President Barack Obama's numbers remain strong and the GOP brand remains weak, Democratic candidates running for high office next year have nothing to worry about. In fact, some wise Democrats are concerned about a possible disconnect between the president's popularity and voters' views of Democratic candidates next year, especially for incumbents. Their fear is that even if Obama remains personally popular, voters will not look kindly on their party's candidates for Congress and governor if the economy remains weak and the public mood is sour and frightened."

CONNECTICUT: The New York Post headline: "Dodd lied about OK of bailout execs' $$." "Dodd claimed he was bullied by the Obama administration into adding a major exception to his provision that would have blocked companies receiving federal assistance from giving generous bonuses to employees… An administration official disputed Dodd's version of the events, however, telling The Post that the Treasury Department had merely flagged the provision as one that could be vulnerable to lawsuits in the future." 
 
But, Politico writes: "A White House official, speaking on condition of anonymity, said Treasury told Congressional aides that trying to place limits on contracts already signed would create legal problems and could lead to lawsuits against the government."

OHIO: A Quinnipiac poll indicates Republicans have narrowed the gap, but Democrats hold onto an advantage in the state's Senate race. 
 
PENNSYLVANIA: Just so we're clear... "To eliminate any doubt, I am a Republican and I am running for re-election in 2010 as a Republican on the Republican ticket," Specter said in a statement released by his campaign.

From NBC's Domenico Montanaro
While most of us would say the American educational system needs vast improvements, it looks like the president exaggerated some of his claims during a speech last week, according to FactCheck.org:

"Last year, the president touted U.S. gains in education, saying that our "fourth- and eighth-graders achieved the highest math scores on record." He bragged that "African-American and Hispanic students posted all-time highs." Last week, the president said those eighth-graders weren't so great at math after all. He claimed they had "fallen to ninth place" in the world, and he bemoaned a high school dropout rate that had "tripled" over three decades. What a difference a year makes. ... 

"We certainly wouldn't argue that education can't be improved, but some of the figures Obama used painted a bleaker picture than actually exists:

• The high school dropout rate hasn't "tripled in the past 30 years," as Obama claimed. According to the Department of Education, it has actually declined by a third.
• Eighth-grade math scores haven't "fallen" to ninth place compared with other countries. U.S. scores have climbed to that ranking from as low as 28th place in 1995.
• Obama also set a goal "of having the highest proportion of college graduates in the world" by 2020. But in terms of bachelor's degrees, we're nearly there. The U.S. is already second only to Norway in the percentage of adults age 25 to 64 with a four-year degree, and trails by just 1 percentage point.

Just as Bush left out any mention of less-than-rosy assessments of the nation's education system, Obama didn't say too much about how smart our kids are. And some of his gloomy claims were just plain wrong, or misleading.

From NBC's Domenico Montanaro
In the recount we all love to hate, Democrat Al Franken wants Republican Norm Coleman to pay the costs of the seven-week, three-judge trial if Coleman ultimately loses.

The Minneapolis Star-Tribune: "Democrat Al Franken wants the judges who heard the U.S. Senate trial to force Norm Coleman to pay court costs and some opposing lawyers' fees -- a potentially expensive bill -- if the Republican loses his bid to overturn the results of the recount. ... Franken's document asks that Coleman pay the costs of the seven-week trial. And in seeking attorneys' fees for Franken lawyers... ."

This is Franken, in part, trying to put pressure on Coleman who, at this point, has to be operating on limited resources.

It also comes in the wake of revelations that a list of Coleman donors' names and credit card numbers showed up on another Web site.

"Coleman accused political opponents of hacking into his campaign website to discourage prospective donors from financing the long, expensive recount process. Several Web operators, however, said they believe the campaign mistakenly left the website open for several hours in late January," the Star-Tribune writes.

From NBC's Mark Murray
Terry McAuliffe, the former DNC chair and Hillary backer who's now running for Virginia governor, is airing a new radio ad in Richmond and Hampton Roads that targets African-American voters.

And as Politico's Ben Smith points out, the ad makes it seem like he was always supporting Obama. (Of course, during the general election, McAuliffe actively campaigned for him.)

The ad goes: "Did you know that Terry McAuliffe fought to protect voting rights and led the effort to give Democrats in our region a stronger voice in deciding the party's presidential nominee? That's right. Terry McAuliffe defended our rights and was the leader who brought us together and united the party. And in 2008 our voices were heard when we elected our president, Barack Obama."

From NBC's Mark Murray
These numbers shouldn't be surprising... A new Gallup poll -- conducted March 17 of 1,012 adults, +/-3% margin of error -- finds that 59% are outraged at the AIG bonuses, and another 26% say they're bothered by them.

In addition, a whopping 76% believe the government should try to block/recover the bonuses. Just 17% say the government shouldn't intervene.

From NBC's Domenico Montanaro
Welcome to The Colosseum.

The first member of Congress has given his thumbs down to Treasury Secretary Tim Geithner.

Rep. Connie Mack goes Chuck Grassley-light, calling for Geithner to either "resign or be fired."

Mack's statement after the jump:

"Well before Timothy Geithner became Secretary of the Treasury, he was working hand-in-hand with AIG and other financial institutions to provide them hundreds of billions of dollars of taxpayer money as one of the key architects of the financial sector bailout. I was outspoken against the bailouts then, and I'm even more outraged now. I've had serious concerns about Secretary Geithner from the moment he was nominated. In the months since, he has shown us time and again why he was the wrong choice for this critical post.

"This week's news on the AIG bonus scandal is but the latest fiasco under his watch and he has lost the confidence of the American people. Quite simply, the Timothy Geithner experience has been a disaster. The Treasury Department is in disarray.  Taxpayer dollars are being wasted. America's economy hangs in the balance. America needs and deserves a Treasury Secretary who can truly lead us forward.

"Timothy Geithner should either resign or be fired for the good of the country, and President Obama should nominate a new Treasury Secretary with the experience and leadership skills America deserves."

*** UPDATE *** Darrell Issa has now jumped on the bandwagon of calling Geithner to resign:

"As one of the chief architects of the AIG bailout, Secretary Geithner was in a position to do what any lender of the last resort would do – negotiate concessions from AIG.  Secretary Geithner either didn't know about the bonuses, and was grossly negligent, or he did know and failed to bring this to the President's attention.  Either way, the end result has been a significant waste of taxpayer dollars and he should take immediate responsibility and resign."

House Minority Leader John Boehner said Geithner's on "thin ice" on a radio program.  

From MSNBC's Norah O'Donnell

As he announced on Morning Joe today, Sen. Evan Bayh is forming a Moderate Dems Working group that will meet every other Tuesday before the Democratic caucus to discuss legislative strategies and ideas.

Per Bayh's office, the group's goal "is to work with the Senate leadership and the new administration to craft common-sense solutions to urgent national problems."

Video: Bayh is forming a 15-person working group focused on fiscal responsibility.

Here's part of a statement to be released very shortly from Bayh... The group will focus "on the upcoming budget negotiations and the importance of passing a fiscally responsible spending plan in the Senate."

More: "Leading the new group are Democratic Sens. Evan Bayh of Indiana, Tom Carper of Delaware and Blanche Lincoln of Arkansas... [O]thers joining the group are Sens. Michael Bennet of Colorado, Mark Begich of Alaska, Kay Hagan of North Carolina, Herb Kohl of Wisconsin, Mary Landrieu of Louisiana, Joe Lieberman of Connecticut, Claire McCaskill of Missouri, Ben Nelson of Nebraska, Bill Nelson of Florida, Jeanne Shaheen of New Hampshire, Mark Udall of Colorado, and Mark Warner of Virginia."

From NBC's Domenico Montanaro
The president is set to unveil his NCAA tournament picks at noon ET on ESPN. The sports network gave a tease this morning revealing Obama's Final Four picks: Louisville, Memphis, Pittsburgh, North Carolina. (We'll update when we see the full bracket.)

Since the president waded into this policy area, it's an excuse for me to do so as well.

My four: Wake, UConn, Pitt, UNC. Wake was the top seeded team in the country not too long ago. That said, of course, Louisville could roll, but that could shape up to be a good Sweet 16 game IF Wake survives Cleveland State. Beware, Gary Waters' squad is really tough. And, out on a limb, I like West Virginia to beat Kansas and Michigan St. to get to the Elite Eight. But the Midwest bracket is tough to call. UConn-Memphis would be a great game, and a contrast of styles. Memphis would have a chip on its shoulder, but the bruising of the Big East could pay off here. To win it all -- Carolina over UConn.

What are your picks?

*** UPDATE *** From NBC's Mark Murray: My picks are the exact same as Domenico's -- Wake, UConn, Pitt, and UNC. And I also have Carolina beating UConn in the finals. Looks like those first- and second-round games will determine who beats whom in our NBC pool.

*** UPDATE 2 *** Here's the president's full NCAA Bracket. (For those surprised Obama would do this, he did two during the campaign, so it should be expected. His brother-in-law is the head coach at Oregon State and basketball played a prominent role during the 2008 campaign in hoops happy states like Indiana and North Carolina.)

In his picks, Obama appears to have done what we all do -- change our minds. Some notable cross outs: going with UNC over Louisville after first picking Louisville to win it all; picking Carolina over Pitt after first writing in Pitt in the Final Four; Florida St. over Xavier; VCU over UCLA; Oklahoma over Clemson; Missouri over Marquette; and Tennessee over Oklahoma St. Obama also appears most clear-eyed on the bracket that many are calling the toughest to predict -- the Midwest. 

Here's the White House Blog post with other photos.

*** UPDATE 3 *** The president isn't the only one to fill out a bracket. Virginia Republican gubernatorial candidate Bob McDonnell released his as well. He's running a "Bracket Madness." (John McCain also promoted his bracket competition.) And, of course, he puts VCU in the Elite Eight. It is possible though -- and could have been a popular sleeper pick if they wouldn't have to play Villanova in Philly, as Mark Murray points out.

From NBC's Domenico Montanaro
We noted earlier that Dennis Kucinich's 31-year-old wife appeared on Cleveland's local news version of Dancing with the Stars. The low-budget production is complete with Cleveland Browns football players, mascots and a keyboard soundtrack.

And here's the video. (Warning: If you are easily made queasy, do not click on the link.) 

And a promo:

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Ed Liddy meets Congress: Those AIG bonuses have dominated the political news for the last three days. Now make it four, with AIG CEO Edward Liddy testifying today before a House Financial Services subcommittee beginning at 10:00 am ET. In advance of his testimony, Liddy pens a Washington Post op-ed, in which he details the past mistakes AIG made (before he came aboard), notes that total executive compensation at the firm is down, and states that he would have not approved of the retention bonuses had he been CEO at the time they were put in place. "It was distasteful to have to make these payments," he says. "But we concluded that the risks to the company, and therefore the financial system and the economy, were unacceptably high." But this piece of news, courtesy of New York AG Andrew Cuomo, might be difficult for Liddy to defend today: 52 of the 418 AIG employees who received retention bonuses no longer work for the firm. So much for retention, eh?

Video: Ed Liddy testifies before Congress today about the millions in bonuses given to AIG executives. 

*** Defending Liddy: Before today's testimony, Treasury Secretary Geithner sent a letter yesterday to Pelosi, Reid, Boehner, and McConnell, in which he defends Liddy. "I know that much of the public ire has fallen on Mr. Liddy, which is understandable, since it is his name on the door. But it also is unjustified. Mr. Liddy was put in place as the CEO of AIG last year at the request of the U.S. government to help rehabilitate the company and repay taxpayer funds. He inherited a difficult situation, including these AIGFP retention contracts, which were entered prior to his or the government's involvement in AIG. As long as he is there, we will work with him on measures to wind down AIG in an orderly way and protect the American taxpayer." Also in his letter, Geithner expresses outrage at the bonuses (but acknowledges that they would be legally difficult to prevent); recounts that he demanded Liddy to scrap hundreds of millions of dollars in future payments; and notes that he's working with the Justice Department to seek avenues to recoup the bonuses that were paid. Let's face it: This is a crucial period for Geithner. He has to get control of this AIG situation in some form, even if just rhetorically. The letter to Congress is a start, but he needs to make some sort of CEO-like move in Treasury to make a visual attempt to take the reins of the controversy.

*** One eventful week: So what did the Obama administration know about these bonuses, and when did they know it? It was only last Tuesday when Treasury officials alerted Geithner that $165 million in AIG bonuses were due to be paid out by the end of the week. On Wednesday, Geithner contacted Liddy to stop payment on the bonuses, but Liddy told him it couldn't be done. On Thursday, Geithner warned White House senior adviser David Axelrod about the bonus problem; later that day, Axelrod informed the president. On Friday and Saturday, Treasury officials worked on ways to limit or eliminate the AIG bonus money. It wasn't until Sunday when senior White House aides went public with their outrage. And finally, on Monday, nearly a week after Geithner first learned about the bonus problem, President Obama made his first public statement.

*** California dreamin': Given the AIG drama in Washington, President Obama's trip today to California -- where he will hold a town hall at 7:00 pm ET in Costa Mesa -- couldn't have come at a better time for him. The reason: It gets him out of the Washington cesspool. Per NBC's Athena Jones, White House press secretary Robert Gibbs told reporters yesterday that Obama will most likely discuss his stimulus, his budget, his home-foreclosure plan, his plan to stabilize the financial industry, and of course those AIG bonuses at tonight's town hall. In fact, we wonder if the president will not just talk about the bonuses, but go a step further to justify why the AIG bailout is necessary and vital to the world's economy. Obama might have an additional opportunity to say this when he delivers remarks at 12:30 pm ET from the White House before departing for California. Besides his trip to California, check out the rest of Obama's media blitz: He unveils his NCAA tournament brackets on ESPN (today), does Leno (tomorrow), and appears on "60 Minutes" (Sunday).
 
*** Three time's a charm? If at first you don't succeed, try again, right? Today, President Obama's third pick for Commerce secretary -- former Washington Gov. Gary Locke -- has his confirmation hearing before the Senate Commerce Committee at 10:00 am ET. Of course, Obama's previous nominees for the post, Bill Richardson and Judd Gregg, never made it this far. Speaking of Gregg, the onetime Obama cabinet pick is howling at the administration's consideration of using the budget reconciliation process, under which legislation needs only a simple majority to pass the Senate (i.e., there's no filibuster). "That would be the Chicago approach to governing: Strong-arm it through," Gregg said, per The Washington Post. "You're talking about the exact opposite of bipartisan. You're talking about running over the minority, putting them in cement and throwing them in the Chicago River." 

*** Julius Caesar Bloomberg? One of the biggest political stories that got buried during last fall's presidential election was New York Mayor Michael Bloomberg (I) persuading the City Council to nix its term-limits law to allow him to serve a third term. And yesterday, per the AP, the Justice Department cleared the final hurdle for his bid this November. Would Bloomberg's brazen move have received more attention -- and possibly criticism -- had it occurred when the world wasn't fixated on Obama vs. McCain? Or if Bloomberg were not as popular as he is right now? In any case, Bloomberg's bid for a third term this November seems to have frightened away some potential candidates, including Rep. Anthony Weiner (D), who probably would have been the favorite if Bloomberg weren't running. 

*** If you can't beat 'em, join 'em: Looking at other 2009 races, New Jersey Gov. Jon Corzine's office announced yesterday that it's suing Lehman Brothers and its accountant for "misrepresentations" that "led the Division of Investment in the Department of Treasury to purchase $182 million in Lehman securities in April and June 2008, which resulted in an estimated $118 million in losses." That's quite the gambit considering Corzine is a former chairman of mega investment bank Goldman Sachs (!). He's in trouble in his reelection bid this year with his Wall Street background being used against him. He was down 46%-37% in a recent Quinnipiac poll to former U.S. Attorney Chris Christie -- even though Garden Staters said they didn't know Christie all that well. Will voters buy it? Can Corzine, a target of populist outrage, jump on the bandwagon to reverse his fortunes?

Countdown to NY-20 special: 13 days
Countdown to Obama's 100th day: 42 days 
Countdown to NJ GOP primary: 76 days
Countdown to VA Dem primary: 83 days
Countdown to Election Day 2009: 230 days
Countdown to Election Day 2010: 594 days

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"Lawmakers channeled their raw outrage Tuesday into a competition to see who could hammer AIG the hardest for doling out $165 million in bonuses after getting a $170 billion taxpayer bailout."

AIG CEO Edward Liddy's op-ed in the Washington Post: "No one knows better than I do that AIG has been the recipient of generous amounts of government financial aid. We are acutely aware not only that we must be good stewards of the public funds we have received but that the patience of America's taxpayers is wearing thin. Where that patience is especially thin is on the question of compensation." 
 
In addition to the op-ed, here's a preview of what you'll likely hear from Liddy today during a hearing before House Financial Services: AIG management says they pushed last year for employees to give up their retention bonuses. "We suggested that early on, but there are people who feel this money was due them," a source close to the company told The Hill, adding, "It's terrible; it's disheartening."
 
"AIG could have decided to keep the money, but determined it might then have had to pay $1 billion in damages in legal fees and lawsuits, more than double what it was contractually obligated to pay the division's employees in bonuses. It also figured it would have lost the quants, something Liddy and others felt they couldn't risk." Quants are the "people who put together the computer-programmed algorithms behind the complicated hedges and trades that brought down the company." 
 
Here's the AP's preview, which also notes that Liddy will reluctantly defend the bonuses.

"The bonuses that the American International Group awarded last week were paid to 418 employees and included $33.6 million for 52 people who have left the failed insurance conglomerate, according to the office of the New York attorney general," the New York Times says. Those payouts are expected to come under intense scrutiny Wednesday as Edward Liddy, the chief executive of A.I.G, testifies before Congress amid mounting public outrage about the bonuses, which were paid out after nearly $200 billion in taxpayer funds were pumped into the company." 

The Washington Post writes, "The firestorm over bonuses paid by insurance giant American International Group has triggered alarm at other financial firms, threatening federal efforts to draw private investors into economic recovery programs. It is a critical juncture for the Obama administration. Officials at the Federal Reserve and the Treasury Department are increasingly worried that the controversy could discourage investors from joining a new government effort to revive consumer lending as well as a separate plan that relies on private money to buy toxic assets from banks, sources familiar with the matter said. Treasury officials planned to outline that second program as early as this week." 

Roll Call: "A bloc of Senate Democratic moderates is quietly maneuvering to keep open the option of vetoing two of President Barack Obama's most ambitious agenda items this year -- climate change and health care reform." This is why, as Cook's Jennifer Duffy wrote last year, 60 Democratic senators don't necessarily make 60 votes.

Too much, too soon? "Barack Obama's Big Bang Theory of Governance is starting to face its first big test among the new president's fellow Democrats," Politico's Ben Smith writes, adding, "There is rising doubt among Democrats -- particularly moderates already concerned about the big costs and deficits called for in Obama's budget -- that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda."

And John McCain didn't let Cindy go on Dancing with the Stars, but Dennis Kucinich doesn't appear to have the same sway with his 31-year-old wife. "The willowy, Brit-born redhead, who may be the only Congressional spouse to sport a tongue ring, had her debut dance Tuesday [on Cleveland's version Dancing with the Stars], partnered with Cleveland dancer Rob O'Bryant," Roll Call's Heil and Brotherton write.

"Geithner said yesterday that any bonus payments that the Treasury cannot recoup will be recovered by requiring AIG to repay the Treasury an amount equal to the remaining bonuses," the AP says. 
 
More from the AP: "Geithner sent a flurry of letters to lawmakers Tuesday night on measures he's taking -- including bringing in Attorney General Eric Holder -- to try to recover as much of the bonuses as possible. For the time being, Geithner, formerly president of the New York Federal Reserve Bank, remains a key player in the gargantuan task of slowing the worst economic downturn since the 1930s. But his future could soon be as murky as the economy's."

Meanwhile, Obama went on the attack against Republicans regarding his budget: "'Just say no' is the right advice to give your teenagers about drugs; it is not an acceptable response to what our economic policies propose by the other party."

The New York Times adds, "The strong words were the latest in a push that has come to resemble elements of the two-year-long presidential campaign. Mr. Obama may hold his second prime-time news conference as president, perhaps as early as next week, to talk up the budget. On Wednesday and Thursday, he is taking his budget show on the road to California, where he will hold two town-hall-style meetings and will even try to talk about the economy on Thursday on 'The Tonight Show with Jay Leno.'" 

The AP previews Obama's trip to California. "His first appearance as president in a state that was a getaway for his predecessors could instead become a political test for Obama, whose administration has been trying to find its voice on the economy."

2008 flashback: "It was a year ago today that Barack Obama, then a candidate for president fearing a divisive racial backlash over his pastor, took to the stage in Philadelphia and said it was time to have a new conversation about race," Politico notes, adding, "But in the year since that speech -- through campaign and convention, election and inauguration -- Barack Obama hasn't taken part in the discussion of race in America in any sustained way, the way he did that day in Philadelphia to get out of a campaign jam." 
 
"Rep. Ellen Tauscher (D-Calif.) will be tapped for a top State Department post, sources with knowledge of the pending nomination said," Roll Call reports. "Tauscher's exit would create a vacancy atop the New Democrat Coalition, a bloc of pro-business moderates emerging as a force in the new Congress." 
 
With the troubles in Madagascar, the U.S. is ordering all diplomats out of the country.

After watching almost every Obama move over the past two years, former RNC spokesman Alex Conant writes a column about the five biggest myths about Obama (he's more cautious than you think; his communication skills, beyond his speeches, aren't that great; he doesn't really have a "Team of Rivals"; he's gaffe-prone; and he doesn't have a good relationship with press).

President Bush gave his first speech since leaving the White House -- in Canada. "I love my country a lot more than I love politics," Bush said. "I think it is essential that he be helped in office." He also "declined to critique the Obama administration in Tuesday's speech, saying the new president has enough critics and that he 'deserves my silence.'" Bush said he's going to write a book about the 12 toughest decisions he had to make.
 
About 200 protestors greeted the former president. He seemed to acknowledge his unpopularity by keeping it light: "I'll sit here all day," Bush said. "I'm flattered people even want to hear me in the first place." He also joked that he's going to use his speeches to pay for his new home. "I actually paid for a house last fall. I think I'm the only American to have bought a house in the fall of 2008," he joked. 

Video: Bush received a cold reception in Canada yesterday while giving a speech in Calgary.
 
Palin's staff again shows one hand not talking to the other. The NRSC and NRCC both still insist Palin's headlining a major June fundraiser. They confirmed it with her PAC. On the other hand, her Alaska staffers say they knew nothing about it. "This is not the first time there has been confusion over a Palin address in Washington, D.C. Palin was announced as a speaker for the Conservative Political Action Committee's annual conference in February but pulled out of the event a couple weeks before, citing official duties," Roll Call writes.

NEW YORK: Yesterday, the RNC announced it was transferring another $100,000 to the New York GOP for the NY-20 special election in two weeks, bringing the RNC's total contribution to $200,000. "I am confident this additional investment will help ensure victory in the special election," RNC chair Michael Steele said in a statement. "These funds will be used to further show our commitment to re-establishing a strong GOP presence in the Northeast."

PENNSYLVANIA: Specter won't become a Democrat. But he didn't rule out running as an independent, although that doesn't sound likely. "I'm staying a Republican because I think I have a more important role to play there," he said. "I think the United States very desperately needs a two-party system… And I'm afraid that we're becoming a one-party system, with Republicans becoming just a regional party."