GOP WATCH: Go back to your bunker?
Some "Republicans are telling Dick Cheney to go back to his undisclosed location and leave them alone to rebuild the Republican Party without his input," The Hill writes. The White House first had Limbaugh, now Dick Cheney, and clearly, the administration has won both fights.

Roll Call: "Republican National Committee Chairman Michael Steele appears to have bought himself at least a modicum of breathing room from his critics for the time being, thanks in part to his decision to essentially drop out of the public spotlight and to a poor showing by the Democratic National Committee in the February fundraising race. In the first full month under Steele's watch, the RNC raised $5.1 million, which is $2 million short of the mark set by former RNC Chairman Mike Duncan in February 2007, his first full month on the job, several Republicans pointed out. But with the DNC -- which should be reaping the financial benefits from a newly minted president with high approval ratings -- reporting a haul of only $3.2 million in February, Steele's performance has been seen as positive by many in the GOP."

And "Todd Herman former Microsoft and msnbc.com employee and streaming media expert, has been named the Director of New Media for the Republican National Committee. Herman founded and ran SpinSpotter, a startup that provides tools to detect spin in news stories."

COLORADO: "Republicans firmly believe that the conservative 4th district, which had elected a Republican Member to Congress for 37 years before Markey's victory, should still be in GOP hands," Roll Call says. McCain narrowly won the district. The top GOP candidate it seems is state Rep. Cory Gardner. The state party appears ready to paint Markey as a "toady" for Nancy Pelosi. But will running against Pelosi work for a state party that has seen lots of recent losses in a growing state? 
 
NEW YORK: The DCCC launched its latest ad affront against Tedisco, accusing him of voting "against middle-class property tax relief during his 26 years in the state Legislature. 'But Tedisco DID help a wealthy mortgage executive convicted of millions in fraud ... asking the judge to go easy on him,' an announcer in the spot says. 'Then the convicted felon's company became one of Tedisco's top campaign contributors. That's Jim Tedisco. Just another Albany politician.'" The NRCC launched a Web ad hitting Murphy on his support for the stimulus. 
 
New York Gov. David Paterson takes another hit in the New York Daily News. "Now, when we need a strong governor more than at any time since the Great Depression, when we face a historic budget crisis and the possibility of a $2.50 subway fare, we have a guy who is at most half what he should be," the paper writes. When we need resolve, he waffles. When we need honesty, he fibs. When we need competence, he bungles. When we need leadership, he mumbles."

From NBC's Christopher Wilson
As reported here on First Read Friday, President Obama will be speaking at the University of Notre Dame commencement ceremony on May 17th.  While the president will also be speaking at the Naval Academy and Arizona State, those appearances haven't caused as much uproar as his trip to South Bend, Ind.
 
In today's edition of the student newspaper, The Observer, letters to the editor, which are usually reserved for debates over the color of The Shirt or whether it's proper to chant "Sucks" at sporting events -- was expanded to cover a lively debate over whether Obama should be speaking.  

"Obama choice unacceptable," read one headline, and "Obama a disgrace" shouted another.
The point of contention? The president's record on issues related to abortion, the majority of which clash with the strict anti-abortion stance of the Catholic Church. An online petition has sprung up urging people to voice their complaints to Father John Jenkins, president of the university. 
 
Jenkins said in an interview with the student paper Monday that while there are clear differences between the president and the Catholic church on some issues (abortion and embryonic stem cell research), it was a great honor to have the president accept the university's offer and that he had no plans to rescind the offer.
 
A majority of the student body is enthusiastic about President Obama coming to speak -- he won the campus' mock election 52.6% to 41.1% over Sen. John McCain -- but an active alumni base that skews more conservative than the increasingly liberal campus has been vocal about the selection of the commencement speaker.  
 
"Notre Dame students generally come from conservative backgrounds," said Mike Laskey, a recent Notre Dame graduate who wrote on the subject of ideological shifts among the student body in his position as executive director of Scholastic, Notre Dame's campus magazine. "A good college education anywhere introduces new ways of looking at the world and shakes up students' perspectives. Because students come in conservative but not strongly formed, it makes sense that many experience an ideological shift to the left." 
 
The president's decision to speak at Notre Dame also highlights the growing importance of northern Indiana in national politics. In the 2004 election, former President George W. Bush defeated Sen. John Kerry by two points in St. Joseph's County (where Notre Dame is located).
 
In 2008, Obama defeated McCain by 17 points, helping the Hoosier State go blue for the first time since 1968. *** Correction *** Democrats last won Indiana in 1964.
 
When President Obama wanted to hold a town hall on the economy to discuss his stimulus package, he visited Elkhart, an Indiana town 15 miles from the Fightin' Irish campus. 
 
In March 2005, President George W. Bush began a tour to garner support for his social security privatization plan by stopping in at the Joyce Center, the on-campus arena where Notre Dame graduations are held. President Obama will be continuing the tradition of five other sitting presidents to speak at the Notre Dame commencement ceremony, following Dwight D. Eisenhower, Jimmy Carter, Ronald Reagan, George H.W. Bush and George W. Bush. Reagan's speech in May 1981 was his first public appearance after a March assassination attempt, while President George W. Bush gave his first commencement address as president in 2001.

"We are not ignoring the critical issue of the protection of life," Jenkins told campus paper. "On the contrary, we invited him, because we care so much about those issues, and we hope … for this to be the basis of an engagement with him."

Despite the protests by some, it's worth pointing out that Obama won Catholics 54%-45% in the 2008 general election. Bush won them, 52%-47%, in 2004 over Kerry, a Catholic.

From NBC's Athena Jones

The Treasury Department released a long-awaited plan to help deal with the troubled assets at the root of the credit crunch that's crippling the economy.

The plan would use a combination of public and private money to encourage the purchase of as much as $1 trillion in bad loans, or "toxic assets" -- which the administration calls "legacy assets" from banks.

Video: Geithner explains details of the Obama administration's plans to mock up toxic assets.

"We believe this is one more element that is going to be absolutely critical in getting credit flowing again," President Obama told reporters after his daily economic briefing, where he was joined by Treasury Secretary Timothy Geithner, FDIC chair Sheila Bair, Fed chair Ben Bernanke, and other economic advisers. "It's not gonna happen overnight. There's still great fragility in financial systems, but we think that we are moving in the right direction."

Getting banks to lend again is key to future economic growth. The Public-Private Partnership Investment Program is the latest in a series of programs the administration has introduced to try to reverse a slowdown that has cost millions of jobs. The other plans include one geared toward reducing home foreclosures, another designed to help jumpstart consumer and business lending, and a third to strengthen banks' balance sheets with capital injections.

Both Obama and Geithner have highlighted some areas of progress as a result of these programs, such as signs of stabilization in the housing market.

Under the latest program, the Treasury Department -- working with the Federal Deposit Insurance Corporation and the Federal Reserve -- will use $75 to $100 billion in TARP capital, combined with capital from private investors to generate an initial $500 billion in purchasing power to buy bad assets. The value of these assets would be set by the market and any risk or gain associated with them would be shared by taxpayers and private investors.

In a Wall Street Journal op-ed today, Geithner explained that the program would provide a market for these assets that does not now exist, thereby helping to improve asset values over time, increasing banks' lending capacity, and lessening the uncertainty about the size of losses on bank balance sheets. 

If the new plan works, banks will start lending again; consumers will be able to get the money they need to buy cars and homes and send their children to school; and businesses will get financing to expand inventories, keep up with their payrolls, and start hiring new workers.

The question, though, is whether the federal financing will encourage enough private investors to take part in the program and just how quickly or extensively it will boost bank lending.

The market appeared to be responding positively to the plan, but economist Paul Krugman, a New York Times op-ed contributor and frequent Obama critic, was brutal. He wrote that the "hocus pocus" plan filled him "with a sense of despair," compared it to what he called the "cash for trash" plan proposed and abandoned six months ago by former Treasury Secretary Henry Paulson and said it would not work and would only result in further squandering Obama's credibility when time was of the essence.

"[T]he Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt," Krugman argued. "So this isn't really about letting markets work. It's just an indirect, disguised way to subsidize purchases of bad assets."

In an interview with CNBC, Geithner said the alternative to this plan would be letting these toxic assets remain on banks' balance sheets, which he argued would create a "much longer, deeper recession."

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Geithner in the spotlight: Treasury Secretary Tim Geithner steps back into the political spotlight today, and he's no doubt hoping for a better reception than his previous trips onto the political stage. Today, Geithner will outline perhaps the most important proposal to getting the economy back on track: the plan to buy up as much as $1 trillion in troubled assets and mortgages. First, he holds a pen-and-pad briefing with reporters (which began at 8:45 am ET); he'll appear in front of cameras (pool spray) with President Obama, FDIC chair Sheila Bair, and Fed chair Ben Bernanke later this morning; and he's penned a Wall Street Journal op-ed on today's plan. Of course, most of the recent chatter surrounding Geithner has been about if he'll step down. But that's about as likely as our chances of winning our NCAA pools (who else had Wake Forest going to the Final Four?). Not only did Obama tell "60 Minutes" that he'd refuse Geithner's resignation, does anyone -- no matter your political views -- really believe it's healthy for the financial system to have the president fire his Treasury secretary at this moment? Also, is it smart for a president in his first 100 days to ask Congress for a do-over on his Treasury pick? Imagine that confirmation hearing; it's political suicide. Bottom line: Common sense dictates that this is a far-fetched idea, and the focus on his future seems like a waste of time.

Video: Geithner plans to unveil a new phase of the bank rescue plan.

*** The AIG complication: What is perhaps most interesting about today's toxic-asset plan is how the AIG bonus story has made some investors wary about the plan. "Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms," the New York Times writes. "The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress." More: "Administration officials took to the airwaves Sunday to reassure investors that the public would distinguish between companies like A.I.G., which are taking government bailout money, and private investment groups that, under this latest plan, would be helping the government take troubled assets off the books of some of the country's biggest banks." Meanwhile, Paul Krugman criticizes the administration's toxic-asset plan. For those who think Krugman is turning on Obama, here's this friendly reminder: When Krugman fully embraces something Obama's doing, it will be the first time. He's been anti-Obama since the start of the Democratic primary campaign, and has barely written a positive word about him. He's a straw man for conservatives to claim liberals are turning on Obama; he's actually never embraced the president.

Video: A crucial week awaits the Obama administration as it deals with banks, budgets, toxic assets and the AIG bonuses.

*** Clawing Back The Claw Back: Speaking of the AIG bonuses, it seems that President Obama has some concerns about Congress' plan to claw them back by taxing them. Here's what he told "60 Minutes": "Well, I think that as a general proposition, you don't want be passing laws that are just targeting a handful of individuals. You want pass laws that have some broad applicability. And as a general proposition, I think you certainly don't want use the tax code to punish people." And the Washington Post notes that the administration's top economic officials "reacted coolly to congressional actions to recoup bonuses from financial firms through targeted taxes, with one adviser saying the approach may be a 'dangerous way to go.'"

*** A GOP budget alternative? Last week, GOP leaders seemed to be disinclined to produce their own alternative budget. But GOP Rep. Mike Pence now says otherwise. Pence on ABC yesterday: "The House Republicans are going to come up with a budget alternative that is going to be built on fiscal restraint and getting this economy growing again." Asked if it will be a "comprehensive alternative," Pence replied: "It's going to be a comprehensive alternative. And let me tell you, after -- it's after months of runaway spending on the federal level. I mean, we saw last -- last year's Wall Street bailout, the part of -- auto bailout, and then we saw the so-called stimulus bill, then the omnibus bill." Was Pence on message with the rest of the congressional Republican team? Is McConnell ready for a full-fledged alternative? What about Cantor and Boehner? Pence is a principled guy, and we're guessing he's pushing for a full-fledged alternative while the more politically engaged members of leadership don't want to do this. *** UPDATE *** House Republicans have pointed out to us -- correctly -- that they have said they'd produce a budget alternative. It is Senate Republicans who have been disinclined to do so.

*** Recyling TARP funds into campaign cash? Per Newsweek, some U.S. financial institutions that are currently receiving TARP funds are STILL making political contributions to Democrats and Republicans. "In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOP Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG 'counterparty.' 'This certainly appears to be a case of TARP funds being recycled into campaign contributions,' says Brett Kappell, a D.C. lawyer who tracks donations." It's amazing. We're doing a detailed analysis, which will be posted on First Read later today. But needless to say, in the month of February, thousands of dollars exchanged hands between financial institution PACs and members of Congress and the political parties. In fact, Bank of America on Feb. 17, 2009, gave $15,000 EACH to the DSCC, DCCC, NRSC and NRCC. Who's dumber here -- the banks that are cutting political checks in this environment, or the members of Congress or political parties who are asking for them? And what's the difference between an AIG using taxpayer money to fulfill bonus contracts, and Bank of America taking taxpayer money and funneling some of it BACK to Washington in the form of campaign contributions? And you wonder why the country and the press are so cynical sometimes.

*** Judge Drudge: If you're asking yourself how some of the lengthy Obama interviews -- like Leno or "60 Minutes" -- get reduced into gaffes about the Special Olympics or whether or not President Obama is laughing too much, look no farther than Drudge. As he did during the general election, he has been working overtime to paint the current president in the most negative light. So far, with Obama's approval rating in high 50s, low 60s, it hasn't worked -- yet. 
 
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In a Wall Street Journal op-ed today, Treasury Secretary Tim Geithner outlines the administration's plan to buy as much as $1 trillion in troubled assets and mortgages. "The funds established under this program will have three essential design features. First, they will use government resources in the form of capital from the Treasury, and financing from the FDIC and Federal Reserve, to mobilize capital from private investors. Second, the Public-Private Investment Program will ensure that private-sector participants share the risks alongside the taxpayer, and that the taxpayer shares in the profits from these investments. These funds will be open to investors of all types, such as pension funds, so that a broad range of Americans can participate. Third, private-sector purchasers will establish the value of the loans and securities purchased under the program, which will protect the government from overpaying for these assets."

The New York Times over the weekend: "The three-pronged approach is perhaps the most central component of President Obama's plan to rescue the nation's banking system from the money-losing assets weighing down bank balance sheets, crippling their ability to make new loans and deepening the recession."

Here are more articles on the plan.

Added Sunday's Washington Post, "Key details of the toxic asset purchasing program are not yet finalized, said officials in contact with the Treasury. Some expressed concern that the markets would expect too much out of Monday's announcement. When Treasury Secretary Timothy F. Geithner first sketched out the administration's rescue plan last month, he was criticized on Wall Street and on Capitol Hill for being too vague and creating uncertainty in the markets."

It's going to be a busy week for the Obama administration's economic folks… They are "expected to announce new proposals for financial regulation, executive pay, accounting standards, the structure of the International Monetary Fund and other issues ahead of a summit of 20 major nations in London on April 2."

The New York Times writes that some investors are taking a wait-and-see approach to the troubled-asset plan. "Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said."

Paul Krugman (not surprisingly) isn't a fan of the plan; in fact, he goes ahead and predicts its failure. "[T]he real problem with this plan is that it won't work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact."

House Majority Leader Steny Hoyer had some tough words for Geithner. He called him "very, very competent," but "I'm sure he's saying to himself at this point in time he should have acted more forcefully with the institutions involved, with AIG in particular, and said to them, 'Look, this is bad policy. You ought not to pursue it. You may have the legal authority to do it, but the reaction, if you do it, is going to be very severe,' as has happened," Hoyer said on C-SPAN's "Newsmakers."

And Eliot Spitzer is back… "In his first interview since resigning as New York governor amid a sex scandal, Eliot Spitzer said President Obama is performing 'stupendously' but said the president should be wary of pursuing knee-jerk policies on Wall Street bonuses now dominating the political discussion… Spitzer also suggested that Obama should be careful about some of the tax policies now offered to claw back the bonus money. 'As a practical matter as president of the U.S. I would call the CEO into the Oval Office and say this isn't tenable,' Spitzer said."

Some of the highlights of President Obama's interview last night on "60 Minutes": On whether Geithner should resign: "No. And he shouldn't. And if he were to come to me, I'd say, 'Sorry, Buddy. You've still got the job.' But look, he's got a lot of stuff on his plate. And he is doing a terrific job. And I take responsibility for not, I think, having given him as much help as he needs."

On Wall Street executives who might be upset with the Obama administration over executive pay: "I've told them directly, 'cause I've heard some of this. They need to spend a little time outside of New York. Because you know, if you go to North Dakota, or you go to Iowa, or you go to Arkansas, where folks would be thrilled to be making $75,000 a year without a bonus, then I think they'd get a sense of why people are frustrated."

On Afghanistan: "Making sure that al Qaeda cannot attack the U.S. homeland and U.S. interests and our allies. That's our number one priority. And in service of that priority there may be a whole host of things that we need to do. We may need to build up economic capacity in Afghanistan. We may need to improve our diplomatic efforts in Pakistan."

On former Vice President Dick Cheney's assertion that Obama's recent actions, like calling for Gitmo's closing, has made the U.S. less safe: "I fundamentally disagree with Dick Cheney. Not surprisingly. You know, I think that Vice President Cheney has been at the head of a movement whose notion is somehow that we can't reconcile our core values, our Constitution, our belief that we don't torture, with our national security interests. I think he's drawing the wrong lesson from history."

Obama continued, "I think he is, that attitude, that philosophy has done incredible damage to our image and position in the world. I mean, the fact of the matter is after all these years how many convictions actually came out of Guantanamo? How many terrorists have actually been brought to justice under the philosophy that is being promoted by Vice President Cheney? It hasn't made us safer. What it has been is a great advertisement for anti-American sentiment. Which means that there is constant effective recruitment of Arab fighters and Muslim fighters against U.S. interests all around the world."

On trying to overcome the White House "bubble": "The bubble that the White House represents is tough. And one of the things that I am constantly struggling with is how to break out of it. And I've taken to the practice of reading ten letters selected from the 40,000 that we get every night, just to hear from voices outside of my staff."

The AP, The Hill, the LA Times, and the New York Times all write up the interview.

The Hill says this is a "make-or-break week" for Obama's budget. Lawmakers from both sides were critical of some items and the House and Senate budget committees are expected to draft their own resolutions. But the most hyperbolic words were from Obama's former Commerce Secretary nominee, Judd Gregg, who said Sunday, "The practical implications of this is bankruptcy for the United States. There's no other way around it." Really? No other way around it? 
 
Some businesses must be worried about the possibility that the Employee Free Choice Act will pass, because Costco, Starbucks and Whole Foods announced an alternative. Labor unions and labor-backing congressmen rejected it.

"Rep. Debbie Wasserman Schultz (D-Fla.) told two Florida newspapers Saturday that she has secretly battled breast cancer for the past year, undergoing seven major surgeries as she worked full time in Congress and as a chief fundraiser for House Democrats." 
 
Roll Call dives into the Boehner-Cantor relationship. 
 
Charlie Rangel brushed off ethics charges against him. 
 
"Rep. Joe Crowley (D-N.Y.) has decided to seek the chairmanship of the business-friendly New Democrat Coalition, sources with knowledge of the decision said."

The Minneapolis Star Tribune: "As the candidates await a verdict from the three judges who oversaw the trial [over the Coleman-Franken recount], expectations grow that the loser will appeal to the Minnesota Supreme Court. And that has stirred speculation over the effect a continued court battle would have on the reputations and political prospects of the candidates -- especially the one who comes up short. 'It's either win or oblivion,' said Hamline University Prof. David Schultz. 'Whoever loses is viewed as the obstructionist, the person who held up Minnesota seating a senator.'"

"But Coleman has perhaps more to lose in the long term if he continues to wage an unsuccessful fight, said University of Minnesota political scientist Lawrence Jacobs. 'The longer he stays in and fights, it diminishes his chances of running for governor, which seems like a real possibility,' Jacobs said. 'In some people's eyes there's just irritation that this has gone on. That's not necessarily fair. Norm Coleman's decision to enter the [trial] is entirely legitimate and appropriate.'" 

"Senate Republicans for weeks have attacked Obama and Democrats on philosophical grounds typical of the liberal-conservative divide in Congress," Roll Call writes. "But last week, as the furor over AIG's use of taxpayer funds to pay executive bonuses boiled over, top Senate Republicans played the competence card, signaling a broader case they intend to make against the president and the Congressional majority as midterm elections near." 
 
NEW YORK: Legislators are flooding the zone in NY-20. Republican Aaron Schock made two stops for Jim Tedisco (R) on Sunday. Minority Whip Eric Cantor hosts a fundraiser for him in New York City today. New York Democratic Reps. Paul Tonko and Steve Israel were there on Sunday for Scott Murphy (D).

The latest controversy between Tedisco and Murphy -- Murphy's answer that he opposes the death penalty, even for terrorists. 
 
Paterson's days seem numbered. The New York Daily News' cover: "Clueless Dave." Subheadline: Chaos and dysfunction ruled day when gov was Senate minority leader, bombshell reports says."

From NBC's Ken Strickland
While the House acted at warp speed yesterday to pass a tax bill designed to recoup most of the bonus money given to AIG executives, expect the Senate Republicans to slow up the process next week -- some by echoing the Founding Fathers and the U.S. Constitution. 

While there was strong bipartisan support in House-passed version, it's unclear where most Senate Republicans stand. The Senate version on the tax bill would impose a 70% excise tax on all retention bonuses given since the beginning of this year. It would apply to companies that received federal bailout money, including AIG.

But is such a dramatic tax on a niche segment of the population constitutional?

"It is wrong," said Republican Judd Gregg in a statement today, "to propose to use the taxing authority of the government in a manner that is arbitrary, punitive, and targeted on a single group of people who they have deemed as having acted improperly." While not calling it "unconstitutional," Gregg's words seem to align with the sentiments in the Constitution. Addressing Congress directly it says, "No Bill of Attainder or ex post facto Law shall be passed." (Article 1, Sec 9.)

In the simplest terms, that article prohibits legislation punishing or penalizing a specific person or group without trial. In the Federalist Papers #44, James Madison wrote in 1788, "Bills of attainder, ex-post-facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation."

Gregg said Congress' authority to tax, "is one of the most powerful and important roles of a democratic government, and that power should not be used in a way that undermines its credibility and creates precedents that could lead to significant abuse." When Senate Finance Committee Chairman Max Baucus and Republican Chuck Grassley first outlined their bill, they signaled legal challenges would await. But Baucus said, "we think this will pass muster" with the courts.

It's too soon to tell if Senate Republicans will rally around the unconstitutional argument and oppose the bill. One of the GOP's most outspoken constitutional scholars, Arlen Specter, has yet to weigh in. On the Democratic side, look for comments from Senator Robert Byrd and Judiciary Committee Chairman Pat Leahy to possibly influence thinking among Democrats.

Concluding his written statement, Gregg said that the Senate bill would undermine the credibility of the U.S. tax system and "create an atmosphere where any group that offends the sensibilities of the majority may be at risk for punitive tax treatment."

"Remember," Gregg wrote, "it was the abuse of the power to tax by the British government that led to our revolution, and we should not forget that fact or those principles of fairness and equity that led to the creation of our nation in the first place."

From NBC's Athena Jones and Mark Murray
The White House just announced that President Obama will deliver commencement addresses at Arizona State (on May 13), Notre Dame (May 17), and the U.S. Naval Academy (May 22).

What do those first two addresses have in common? They're in battleground states -- Arizona and Indiana. While Obama didn't truly contest Arizona last year (because it's McCain home state), you can be certain he'll target it in 2012.

Video: Presidential prime-time address, fundraisers, Jindal's back and Meet the Press.

 

 

From NBC's Mark Murray
Republicans have seized on today's news that the budget deficit, per the Congressional Budget Office, will top $1.8 trillion this year and will reach nearly $1.4 trillion in 2010 -- more than the Obama administration's estimate.

Said Sen. John McCain in a statement: "The Congressional Budget Office report proves that the Administration has indeed engaged in a policy of generational theft. The CBO numbers show the reality of the fundamentally flawed assumptions of the president's budget and make clear what it really is: a risky, debt-ridden threat to the nation."

Here's Sen. John Thune: "These numbers are staggering and prove that spending in Washington is out of control. It is unconscionable to borrow this much money from China and force American families and small businesses to cover the cost through higher taxes."

And House Minority Leader John Boehner: "We simply cannot continue to mortgage our children and grandchildren's future to pay for bigger and more costly government. Families and small businesses across America are making difficult budget decisions each and every day during this recession, and it's time for Washington to do the same. Unfortunately, the President's budget doesn't do that."

From NBC's Domenico Montanaro
Here's a really interesting piece on Howard Dean in the Boston Globe that we didn't include in this morning's First Read, but it's worth a read. The Globe's Sasha Issenberg went to England with Dean and notes that his embrace there (literally and metaphorically) "was far warmer than anything the former Vermont governor has felt recently from his domestic allies.

"After November's landslide, Obama let Dean move on from his four-year chairmanship of the Democratic National Committee, and bitter rivalries with some in Obama's circle have kept the former practicing doctor out of the three top administration posts committed to changing the healthcare system. 'Everybody likes to think they did it all by themselves,' Dean said in an interview. 'I don't believe in the great-man theory of history. You really have to see change as a continuum. It doesn't come in packets, it comes in waves. ... I didn't think any Democrat could win unless we reorganized the party dramatically," Dean said. "There were some famous dustups between me and people who are now in the administration. I don't regret any of them.'"
 
More: "Now, unlike virtually all the other leaders of the Democratic comeback, Dean is out of office. He is easing into an exile as a Democratic version of former House Speaker Newt Gingrich, who spent the Bush years operating as a freelance visionary and policy entrepreneur, a permanent creature of the political margins credited with having successfully plotted his party's recapture of power but not long trusted to actually wield it."

It does bring up the question of Dean's legacy, his bouts with Rahm and how much credit/ire he deserves. There's nothing quite like a discussion on Howard Dean to stir the passions. Have at it.

From NBC's Mark Murray
Talking to state legislators from around the country who are meeting in DC, President Obama announced today that lobbyists who meet with the administration to discuss projects connected with the recently passed stimulus will have to submit their conversations in writing, so they can be posted on the internet.

"If any member of my administration does meet with a lobbyist about a Recovery Act project, every American will be able to go online and see what that meeting was all about," Obama said. "These are unprecedented restrictions that will help ensure that lobbyists do stand in the way of our recovery."

In his remarks, Obama also defended his $3.6 trillion budget, which contains big increases in health-care, education, and energy spending. "It's a budget that makes hard choices about where to save and where to spend. Because of the massive deficit we inherited and the cost of this financial crisis, we are going through our books line by line so that we can cut our deficit in half by the end of my first term" -- which might be more difficult to achieve under the new Congressional Budget Office's projections.

"But," he continued, "what we will not cut are investments that will lead to real growth and real prosperity." 

From NBC's Mark Murray
In remarks to community bankers today in Phoenix, AZ, Fed chairman Ben Bernanke

discussed what has dominated the news this week: executive pay for bankers.

He said  that "poorly designed" compensation policies can jeopardize the health of the banking industry. 

"Management compensation policies should be aligned with the long-term prudential interests of the institution, be tied to the risks being borne by the organization, provide appropriate incentives for safe and sound behavior, and avoid short-term payments for transactions with long-term horizons."

From Chuck Todd, Mark Murray, and Domenico Montanaro
*** A stellar performance? Outside of his crack about the Special Olympics (more on that below), President Obama's appearance on Leno last night was a big success for the White House, considering the criticism he was receiving going into the interview. As Washington resembles a zombie-horror movie -- with Congress eating banking executives, Republicans eating Democrats, and Democrats eating Democrats (Chris Dodd vs. Treasury) -- Obama gave perhaps his best explanation of the AIG crisis and those bonuses; he looked like the adult compared with Congress; and he bought his embattled Treasury secretary more time. Forty-eight hours ago, we might have agreed with House Minority Leader John Boehner that Geithner was on thin ice. But the White House has doubled down on their man. "This guy has not just a banking crisis; he's got the worst recession since the Great Depression, he's got an auto industry that has been on the verge of collapse," Obama told Leno. "And he's doing it with grace and good humor."   

Video: NBC's David Gregory takes a look back at some of President Obama's most memorable moments on "The Tonight Show With Jay Leno."  

*** But a "Special" gaffe? Yet one of the dangers of a president or political candidate embarking on a non-traditional media blitz -- especially in this 24/7 news environment where opponents are looking to pounce at every opportunity -- is making a gaffe. And Obama made one when joking to Leno about his bowling prowess, or lack thereof. "It was like Special Olympics, or something," Obama said. Uh-oh. But even before the interview aired on the East Coast, the White House apologized for the comment. "The president made an offhand remark making fun of his own bowling that was in no way intended to disparage the Special Olympics," deputy press secretary Bill Burton told reporters on Air Force One. "He thinks that the Special Olympics are a wonderful program that gives an opportunity to shine to people with disabilities from around the world." President Obama also called Tim Shriver, chairman of the Special Olympics, to apologize. The incident, in fact, reminds us of the crack Obama made about Nancy Reagan at his first news conference after winning the presidential election. Every once in a while, it seems that Obama gets into this mode where he relaxes a bit too much and, well, does what many folks do in private: make an inappropriate comment.  

*** From Leno to the Middle East: Obama's media blitz continues -- with the president delivering remarks today at 12:35 pm ET in DC to the National Conference of State Legislators, with his appearance on "60 Minutes" this Sunday (taped sometime today with Steve Kroft; we'll be spying for him), with his presidential news conference this coming Tuesday, and with his new video to Iran. That's right, coinciding with that country's ancient festival of Nowruz that marks its New Year, Obama has cut a video speaking directly to the people of Iran. "So on the occasion of your New Year, I want you, the people and leaders of Iran, to understand the future that we seek. It's a future with renewed exchanges among our people, and greater opportunities for partnership and commerce. It's a future where the old divisions are overcome, where you and all of your neighbors and the wider world can live in greater security and greater peace." Obama even speaks at the Farsi at the end. "Thank you, and Eid-eh Shoma Mobarak." The president's credibility in the Islamic world has always been an asset the White House and State Department folks have wanted to tap into. We'll see if these remarks, with the president speaking over the heads of Iran's political leadership, get traction. 

*** Things that make you go, hmmmm: Also on this Friday are a few columns and news analyses that are worth chewing on. The first is David Brooks' piece in The New York Times. "You'd think if some tiger were lunging at your neck, your attention would be riveted on the tiger. But that's apparently not how it works in the age of global A.D.D.," he writes. "As a tiger sinks its teeth into the world's neck, we focus on the dust bunnies under the bed and the floorboards that need replacing on the deck. We live in the world of Perverse Cosmic Myopia, an inability to focus attention on the most perilous matter at hand." In addition, National Journal's Kirk Victor writes that presidents always stumble; what's important is how they end up responding. "Virtually every president in the past 50 years or so has had to recover from such a disappointment in the first months of his administration. Some have been more adept than others in limiting the fallout from such failures," he notes, citing Carter, Reagan, and Bush 43. Also in National Journal, Charlie Cook seizes on a new NPR poll (conducted by GOP and Dem pollsters) showing Republicans tied with Democrats on the generic congressional ballot test.

*** To multi-task or not to multi-task? Turning back to Brooks' column… While his biggest criticism seems to be with Washington's overemphasis of the AIG bonuses, he also takes Obama to task for juggling health care, energy, and education during this economic crisis. Yet if Obama were just focused on one issue, then folks would be asking, "What's slipping through the cracks?" "Why aren't you trying to deal with health care and energy independence, since it's part of the economy going forward when you rebuild"?

*** Going door to door: This is worth keeping an eye on this weekend: Obama's Organizing for America, which is housed inside the DNC, is making its first truly big foray into creating a campaign style push for his budget. Per the DNC it will be launching a nationwide canvassing effort, in which citizens in all 50 states will participate in more than 1,000 door-to-door canvasses. And their job on pushing for the president's budget will get harder tomorrow… The Congressional Budget Office releases ITS deficit estimates based on the Obama budget, and will release those figures later today. According to sources, though, there could be a massive difference in deficit projections, giving Republicans something to seize on in their critiques of the Obama budget. The White House believes the CBO is using too low of an estimate on economic growth and that accounts for just about the entire difference in the deficit projections.

*** If Maine and Nebraska ruled the world: CQ recently looked at November's presidential election by congressional district, to see what the electoral vote count would have been if it was done by CD (like it is in Maine and Nebraska) instead of by statewide vote. As it turns out, by congressional district, Obama won by a slightly smaller margin. Indeed, he underperformed versus the current House composition. According to CQ's count, Obama won 242 congressional districts to McCain's 193. Yet Democrats presently hold a 254-to-178 advantage in the House, with three vacancies. Below, we break down where McCain and Obama overperformed, and these are probably the places where the NRCC and DCCC should be starting to find pick-up opportunities. What's amazing: Despite the belief that the Democrats have hit their high-water mark in the House, there are still some Republicans sitting in Obama districts that can be targeted. And more importantly to the House Democrats, there aren't as many Democrats sitting in Republican districts as the CW might suggest.

Most of the places where McCain overperformed were in the South and in or around Appalachia:
-- Alabama: Republicans there have a 4-to-3 advantage in House members, but McCain won 6 of 7 congressional districts
-- Mississippi: Dems have a 3-to-1 advantage in House members, but McCain won 3 of the 4
-- North Carolina: Dems have an 8-to-5 advantage, but McCain won 7 of the 13
-- Ohio: Dems have a 10-to-8 congressional advantage, but McCain won 10 of the 18
-- Pennsylvania: Dems have a 12-to-7 congressional advantage, but McCain won 10 of the 19
-- Tennessee: Dems have a 5-to-4 advantage, but McCain won 7 out of the 9
-- West Virginia: Dems have a 2-to-1 advantage, but McCain won all three

On the other hand, Obama overperformed in the North and West:
-- California: Dems have a 34-to-18 advantage (with one vacancy), but Obama won 42 out of the state's 53 congressional districts
-- Illinois: Dems have an 11-to-7 advantage in Illinois (with one vacancy), but Obama won 16 out of the 19
-- Michigan: Dems have an 8-to-7 advantage, but Obama won 12 out of the 15
-- New Jersey: Dems have an 8-5 advantage, but Obama won 10 out of the 13

Countdown to NY-20 special: 11 days
Countdown to Obama's 100th day: 40 days 
Countdown to NJ GOP primary: 74 days
Countdown to VA Dem primary: 81 days
Countdown to Election Day 2009: 228 days
Countdown to Election Day 2010: 592 days

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"Treasury Secretary Timothy Geithner acknowledged Thursday that his department 'expressed concern' to Sen. Chris Dodd (D-Conn.)

that a provision concerning bonuses in the stimulus bill could prompt lawsuits from workers at bailed-out companies -- a measure at the heart of this week's AIG bonus controversy."

It looks like folks at the Fed knew first about the bonuses (interesting that Bernanke and the New York Fed president are ducking criticism). "Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight.

Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off.

"Career staff officials at the Treasury, Fed and Federal Reserve Bank of New York exchanged e-mail messages about the A.I.G. bonus program as early as late February, according to a person familiar with the matter. A.I.G. itself revealed the bonus plan in regulatory filings last September. In November, when the bailout of A.I.G. was restructured, Treasury and Fed officials negotiated the terms under which A.I.G. could make the retention payments. And in December, Democratic lawmakers sought a hearing about the payments."

The New York Times looks at the political fallout for Dodd. "Across Connecticut, anger is erupting against Mr. Dodd, the chairman of the Senate Banking Committee, whose stature in Washington once reflected the state's beneficial ties with the financial industry. Now, he finds himself a symbol of the political establishment's coziness with tainted corporations and a target of populist wrath over their excesses."

The Hill has more on Dodd. He "suffered repeated political blows this week, weakening his already tough reelection prospects, but Democrats are standing by their candidate as he faces the first big electoral challenge of his 29-year Senate career."
 
"Democrats, rocked by public outrage over bonuses, on Thursday began blaming each other over who was responsible for the mess. The House blamed the Senate; the Senate blamed the Obama administration. President Obama, on travel in California, was relatively quiet on the issue. But Republicans blamed everyone." 
 
The RNC will be jumping in the fray. First Read has obtained a planned Web video that hits Dodd and the White House on the provision stripped out of the stimulus on bonuses.

This AP story might get some pick up: "Obama administration special envoy Richard Holbooke was on the American International Group Inc. board of directors in early 2008 when the insurance company locked in the bonuses now stoking national outrage. Holbrooke, a veteran diplomat who is now the administration's point man on Pakistan and Afghanistan, served on the board between 2001 and mid-2008."

Per NBC's Savannah Guthrie and MSNBC's Alex Johnson, "President Barack Obama said Thursday evening that he was 'stunned' to hear about the $165 million in bonuses that were paid to employees of troubled insurer AIG over the weekend, promising to do everything he could to 'get these bonuses back.' 'These financial industries are holding us hostage,' Obama said in an interview on NBC's 'Tonight Show With Jay Leno,' which NBC said was the first time a sitting president had been a guest on a late-night talk show."

Video: President Obama discusses the AIG bonuses and Treasury Secretary Tim Geithner in an appearance on "The Tonight Show With Jay Leno." NBC's Chuck Todd Reports.

More: "Obama used the visit as an opportunity to defend Treasury Secretary Timothy Geithner, who has been sharply criticized for his handling of the AIG controversy."

The New York Daily News cover: "Heeere's the prez!" Subheadline: "Obama first sitting President to visit late-night TV -- gets laughs, makes gaffe."

The New York Post sees the worst in Obama's Leno appearance. Its cover: "No joke." Subheadline: "O yuks it up on Leno as economy burns."
 
"Despite a handful of calls from Republicans for Treasury Secretary Timothy Geithner to resign, most Senate Republicans are holding their fire, arguing that with few of Treasury's top jobs still unfilled, it would be unwise and dangerous to leave a vacuum at the top," Roll Call writes. 
 
Politico says Obama "will visit NATO ally Turkey April 6-7 to attend a meeting on improving relations between the West and the Muslim world. And he will visit Mexico April 16-17, administration officials said, to discuss immigration issues, the global financial crisis and other border concerns."

The Los Angeles Times previews the Obama administration's new Afghanistan policy. "The Obama administration's plan to overhaul the Afghanistan war will include a reinvigorated effort to sap the strength and influence of Taliban leaders by luring away their foot soldiers, according to advisors involved in a painstaking strategy review. The plan is based on the assumption that top leaders of extremist groups are unlikely to switch sides wholesale and would be unreliable allies if they did. Instead, the revised military effort will focus on eroding the power of militant leaders by drawing away low-level fighters -- most of whom signed up for financial reasons."

John Kerry's brother Cam landed a job in the Obama administration.

And health-care reform advocacy group Health Care for Americans Now is running an ad in Iowa feature a Des Moines nurse urging support for "the choice to keep our private insurance or join a new public health insurance plan." It's in anticipation of a White House Regional health care forum in the state on Monday.

"Congress moved yesterday to levy punitive taxes on bonuses paid by financial firms receiving government aid, threatening to undermine federal efforts to rescue the financial system by driving away participants in the programs," The Washington Post reports. "A quickly assembled House bill was approved 328 to 93. It struck hard at Wall Street's compensation system, which has come under fire because of the $165 million in bonuses distributed last week by American International Group to executives of the troubled unit that helped lead the insurance giant to the brink of collapse. Under the legislation, those who received bonuses of more than $125,000 would surrender 90 percent of their payments to a special income tax."

The New York Times: "Despite questions about the legality of the retroactive 90 percent levy, Democrats and some Republicans said the tax on bonuses for traders, executives and bankers earning more than $250,000 was the quickest way to show angry Americans that Congress intended to recoup the extra dollars. Even backers of the measure noted it was an extraordinary step." 

The AP writes, "Gov. Sarah Palin said Thursday that she would accept only 69 percent of the estimated $930 million dollars that could flow to the state, including $514 million for capital projects and $128 million for a hike in Medicaid reimbursement… Palin's rejection of $160 million for education drew a rebuke from Anchorage Superintendent of Schools Carol Comeau, who said she was shocked and disappointed." 

The DNC made this point: "Palin's Never Seen a Federal Dollar She Didn't Want... Until Now."

Romney has raised more than half a million dollars through his PAC. He's donated to candidates about $16,000, but has spent about $200,000 on travel, expenses, staff, benefits and consulting.

COLORADO: Politico dives into the Colorado Senate race. Yet it notes that the GOP doesn't yet have a candidate to go against Michael Bennet, the replacement appointment who could be a major Republican target for 2010. 
 
NEW YORK: "The special election to replace appointed Sen. Kirsten Gillibrand (D-N.Y.) is raking in a huge amount of cash," The Hill reports. "The two men vying for the New York House seat pulled in a combined $1.85 million in just over a month and loaned their campaigns another combined $450,000, continuing the big money trend that has characterized the race of late." Democrat Scott Murphy outraised Jim Tedisco (R) slightly -- about $900,000 to $840,000. (Murphy lent himself $250,000 while Tedisco lent about $200,000.)

From NBC's Mark Murray
Reuters: "Responding to public and political outrage to the bonuses after the insurer received a government bailout up to $180 billion, lawmakers voted 328-93 for a bill to impose a 90% on bonuses for executives whose incomes exceed $250,000."

From NBC's Domenico Montanaro

Video: Twittermania sweeps the nation.

Some random pluckings from around the Congressional Twitter Web:
 
R-CA Darrell Issa Lincoln fired incompetent generals. So, Mr. President: why waver in firing Economic Field Marshall Tim "AIG Is Alright With Me" Geithner?
 
R-OK John Sullivan At a forum on small business and economic recovery - Obama's budget is a jobs killer -- plain and simple.
 
R-IL Judy Biggert Very pleased to see Administration retreated on its misguided proposal on veteran health. We owe them better than that
 
And for all Republicans' complaints about Obama's NCAA bracket, here's Chuck Grassley: R-IA Charles Grassley Bsy day in the Senate but will have staff updt me on UNI game. Go panthers. 
 
In case your staff hasn't updated you, senator, Northern Iowa was down 18-6 to Purdue with 10:45 to go in the first half.

Virginia Foxx also has a bracket and is promoting it: R-NC Virginia Foxx Join my Bracket on Yahoo Sports

It's really quite something, how some members of Congress get such "Twitter muscles." Would Issa call Geithner "Tim 'AIG Is Alright With Me' Geithner" on television? Maybe.