Friday, January 1, 2010

Debating the President's Hawaii Vacation: Should Obama Be in Washington?


















At a morning story conference for Politics Daily, our colleague Lynn Sweet mentioned that in the wake of the abortive terrorist attack aboard Northwest Flight 253 on Christmas Day, President Obama has been on the receiving end of criticism for remaining on holiday in Hawaii while details of this crisis unfolded. I covered the White House for 15 years, and remember hearing this criticismleveled at George W. Bush -- and at Ronald Reagan. As we went round the horn, Lynn suggested we all jot our thoughts down. So here they are, starting with Lynn and ending with me, Carl Cannon.

Lynn Sweet: The foiled Christmas Day terrorist attack on Detroit bound Northwest Flight 253 -- and President Obama's admission that the U.S. intelligence and screening systems failed -- is a big policy, performance, and political problem for the Obama White House. But it's not made worse by Obama continuing his vacation in Hawaii. There is no rational reason for him to have to be physically working in the White House Situation Room or the Oval Office. But telecommuting does raise questions about the optics; the Obama message machinery is calculating that the vacation hit is small compared to how he handles the overall security crisis.
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This is the second time a Hawaii vacation created trouble for Obama. Ten years ago, on Dec. 29, 1999, then-Illinois state senator Obama was in the midst of a Democratic primary for a congressional seat. Gov. George Ryan called a vote to make illegal gun possession a felony. Ryan was counting on Obama's support. The measure failed by five votes with Obama one of them. Rather than return to Illinois from his Hawaii vacation, Obama decided to stay in Hawaii because his then 18-month old Malia had the flu. Obama was blistered for missing the vote, contributing to his only election loss.

Jill Lawrence: Do you know how you get when you work seven days a week? When it's been months since you left town for a relaxed or at least a different setting where your laptop and BlackBerry don't necessarily call out to you? I know how I get and I don't want a president in that state of mind. I can't fault President Obama for wanting some down time, nor can I fault him for where he went -- back to his home state of Hawaii. He needs this time and we need him to take it. The play and family time will do him good even if he has to interrupt it five times a day to deal with the latest attempted terrorist attack.

Related: Republicans Go Bonkers Over Obama and Flight 253 by David Corn

All presidents confront the competing demands of their jobs and the mind-body imperative to slow down. Remember George H. W. Bush speeding around a Maine lake in his cigarette boat (gas per hour: 25 gallons or $200) after Iraq invaded Kuwait, threatening its oil as well as its sovereignty? And how about his son, uttering this immortal series of sentences as he stood on a green seven years ago in a striped golf shirt: "We must stop the terror. I call upon all nations to do everything they can to stop these terrorist killers. Thank you. Now watch this drive." OK, that's the theater of the absurd. But we do need to get a grip on the difference between "optics" and "reality." One reality is that presidents are never entirely on vacation. A second is that there's no good time for presidents to take vacations. A third is that our presidents must have them.

Walter Shapiro: Imagine if Barack Obama had frantically grabbed the carefully wrapped presents and hustled his puzzled daughters onto Air Force One for the rushed Christmas Day trip back to Washington as soon as he learned about the thwarted terrorist attempt on Flight 253. Then what? Obama might have looked to the media like a tough take-charge president, but he probably would have spent a frustrating day or two hanging around the White House Situation Room, waiting for reliable information about the security lapses that allowed Umar Farouk Abdulmutallab to board the flight to Detroit. In short, a panicked retreat from Hawaii might have revived that post-9/11 catch phrase "...or the terrorists will have won." My point is not to offer a permanent blank check for extended presidential vacations. A vacationing president, for the most part, is exposed to a narrower range of policy options because he has the opportunity to speak to fewer people face-to-face before he makes a major decision. The absence of the president from Washington inspires an uncharacteristic feeling of mild lassitude among staffers who are left behind. Also, as Obama has demonstrated in Hawaii, it is much easier for a vacationing president to avoid taking questions from reporters. But those are reasons for not moving the capital to Hawaii or Crawford, Texas. It is not a criticism of Obama's failure to over-react to the Christmas Day near-miss.

Melinda Henneberger: I am only now realizing how canny George W. Bush was to spend his vacations clearing brush in Crawford, so that in case of a national emergency, at least no fair-minded person couldcriticize him for having more fun than was seemly under the circumstances. Since we are forever accusing our elected officials of doing absolutely everything for PR reasons, it strikes me as unfair in the extreme that the charge against Obama now is that after a foiled terror attempt, he should have "hotfooted'' it back to D.C. for appearance's sake. And it's not like most of thosecomplaining about Obama's vacay in the state where he was, yes, born, would be even a smidge happier if he'd spent the whole of his Christmas break in a pup tent on the snow-covered South Lawn, or in a bunker with his national security team. So good for him for understanding that and staying put.

Bruce Drake: Physically being in Washington is beside the point. What Obama needed to do, and he could have done it from anywhere, is get out in front of this early to project the sense of urgency and what was being done, in the way he later did on Monday and Tuesday. The question of whether Obama should have broken off his vacation reminded me of 1981 when Ronald Reagan was president and two U.S. F-14s, flying 60 miles off the coastline of Libya, shot down two Libyan jet fighters that attacked them. Reagan was in Los Angeles during his summer sojourn and the incident occurred at 11:04 p.m. Pacific time, when he had turned in for the night. White House Counselor Edwin Meese notified Vice President Bush and National Security Council members but did not wake Reagan up until 4:24 a.m. Reagan said that was all right because no presidential decision was required. But Reagan biographer Lou Cannon wrote that Nancy Reagan, senior adviser Michael Deaver, and Chief of Staff James Baker were "furious" because they realized the "public relations importance of demonstrating Reagan had his hand on the presidential throttle." Instructively, when a Soviet jet fighter shot down a North Korea airliner with 269 people aboard in 1983, Reagan cut short his vacation at his Santa Barbara ranch and returned to Washington, perhaps because memories of the Libya incident were still fresh.

Patricia Murphy:: Should President Obama take his family on vacation to Hawaii during the Christmas holidays? Of course he should. I don't begrudge the president time off, and good for him if he has roots in a tropical paradise that also happens to be on American soil. But I do confess to being deeply troubled by Obama's business-casual demeanor in Hawaii since the terrorist attack over Detroit on Christmas Day.

In the days following the incident, Obama hit the links, attended to a friend's child's beach injury, and eventually addressed the attempted bombing from a makeshift podium wearing a vacation-friendly open-collared shirt. Even then, his response was oddly mahalo. After his advisers initially assured the nation "the system worked," he then promised that those involved in the attack would be "held accountable," a phrase that brings to mind tax evaders, not mass murderers. The next day, Obama finally gave vague, but menacing, accounts of "human and systemic failures," but he was only catching up to the American people, who were already wondering how any of this could happen.

It is clear that the intelligence community didn't "connect the dots" before the attempted bombing, but the Obama team does not seem to have connected the dots since then. Was it because they were in Hawaii on vacation? I don't know, but I would feel a lot better if somebody would put on a tie.

Carl M. Cannon: Maybe conservatives are picking on Obama for going on vacation because they are still irritated by the incessant carping against George W. Bush by liberals and in the media for his working vacations in Crawford. (I went down there twice, and believe me Bush was working -- meeting aides, working the phones, and taking one and two-day trips on Air Force One all over the country.) And, just maybe there's some truth to the old bumper-sticker saying, "Annoy a liberal: Work hard and be happy." Either way, in my view, this line of attack is ill-considered and a-historical.

The last two presidents we had who couldn't relax and took politics everywhere with them, including the golf course and the beach, were Bill Clinton and Richard Nixon. Clinton was impeached, Nixon forced to resign. The presidents who preferred Rancho del Cielo and Warm Springs, Ga., to life in the White House were Ronald Reagan and Franklin Roosevelt -- perhaps the two most successful 20th century American presidents. Reagan spent nearly a year of his two terms in office at his Santa Barbara-area "ranch in the sky." Roosevelt loved Warm Springs so much he went there to die. Presidents need their "Shangri-La," which, incidentally was the name FDR gave to the place we know as Camp David. Vacationing helps their minds and their souls, something the American people know well -- and Lord knows we want mentally healthy presidents.

U.S. takes majority stake in GMAC, giving lender $3.8 billion more in aid

The federal government said Wednesday that it will take majority control of troubled auto lender GMAC and provide an additional $3.8 billion in aid to the company, which has been unable to raise from private investors the money it needs to staunch its losses.

The Treasury Department has said for months that GMAC would need more federal money, but the decision to increase the government's ownership stake came as a surprise, cutting against the grain of the Obama administration's recent efforts to wind down its bailout of large banks.

What initially appeared to be a closing act now looks more like year-end portfolio rebalancing, with companies including Citigroup and Bank of Americaallowed to repay aid even as the government deepens its involvement in mortgage financiersFannie Mae and Freddie Mac -- and now, GMAC.

The government now owns majority ownership stakes in those three firms, General Motors and insurance giant American International Group. It also holds large stakes in Citigroup and Chrysler.

The additional aid for GMAC underscores both its struggles and its importance to the administration's efforts to revive the auto industry. GMAC, which already has taken $12.5 billion in direct federal aid along with other forms of government support, is the largest lender to General Motors and Chrysler dealerships and to their customers.

Treasury said that it will increase its stake in GMAC to 56 percent from 35 percent. The government also will hold about $14 billion in what amounts to loans that GMAC may eventually repay. The government plans to appoint four of the company's nine directors.

Wednesday's announcement is a coda to the stress test of 19 large banks conducted earlier this year. GMAC, which was required to add $9.1 billion to its capital reserves against unexpected losses, was the only bank unable to satisfy regulators by finding private investors.

"We said, if you do not go raise capital from the private markets, if you are unable to, we will put capital into you because it is important to the stability of the system," Treasury Secretary Timothy F. Geithner told the Congressional Oversight Panel earlier this month. "It was never going to be possible for GMAC. They are in a unique and difficult situation."

Congressional Republicans criticized the action Wednesday.

"The government should be releasing its grip on financial institutions, not buying more of them," said Rep. Tom Price (R-Ga.), chairman of the Republican study committee, a conservative House caucus.

GMAC was created to finance GM auto sales, but during the housing boom it focused on mortgage lending. The company, no longer owned by GM, lost $13 billion in the last three years as borrowers defaulted on those loans.

The federal aid will help GMAC sop up those losses and return to its roots. GMAC said Wednesday that it will take a pretax charge of $3.8 billion in the fourth quarter, largely reflecting the decline in the value of its mortgage-related investments. The company also said that it was exploring "strategic alternatives" for its mortgage business, Residential Capital, indicating that the business may be sold.

"The auto-finance business is our core business," GMAC spokeswoman Gina Proia said. "It's been the cornerstone of GMAC's operations, and the reason that we have investments from the U.S. government is to help support the auto industry."

The government also is helping the company replace its funding model. GMAC grew up outside the banking industry, raising money from investors to make loans, but the flow of funding dried up with the financial crisis. A year ago, the Federal Reserve gave GMAC emergency approval to create a bank, allowing it to gather deposits instead. Treasury also invested $5 billion under its bailout program for the banking industry.

In May, following the stress tests, Treasury invested another $7.5 billion in GMAC. The Treasury also tasked the company with lending to Chrysler dealers and buyers.

Regulators originally set a deadline of Nov. 9 for GMAC to raise the rest of the money required under the stress test. One week after GMAC passed that deadline without raising the required capital, the company removed its chief executive, Al de Molina, and asked regulators for more time.

Since then, GMAC's new chief executive, Michael Carpenter, has convinced the government that the company did not need to raise a full $5.6 billion in additional capital, in large part because its auto lending business suffered less than expected from the restructuring of GM and Chrysler.

Carpenter said in an interview Wednesday that the government's majority ownership stake would not impede GMAC's ability to return to profitability.

"It doesn't really change things very much at all," Carpenter said. "Their desire is to see the company be successful."

Carpenter also said he is confident that this third round of federal aid would suffice.

"If I thought we needed more capital, I would have asked for more capital," he said.

He added that the company's greatest challenge now is to regain the confidence of private investors to help fund its operations.

The federal aid package announced Wednesday involves a series of transactions.

The government is investing $3.8 billion in GMAC, increasing to $16.3 billion the total direct aid that the company has taken from taxpayers. In exchange, Treasury received securities, including preferred shares, that require the company to make regular interest payments. Both GMAC and Treasury said they expect the aid will eventually be repaid.

The government also announced Wednesday that it will exchange $3 billion of these preferred shares for common shares of GMAC stock which do not pay interest and will not be repaid, though they can be sold for a profit if the company's share price increases.

Finally, the government increased the interest rate it is charging GMAC on most of the preferred shares to 9 percent from 8 percent.

"These actions fulfill Treasury's commitments made in May to GMAC in a manner which protects taxpayers to the greatest extent possible," Treasury said in a statement.

Cerberus, the private equity firm that bought GMAC from GM in 2006, still owns a 15 percent stake in the company and could benefit if the latest round of government aid helps the company return to profitability.


Rosie O'Donnell Steps Out with New Girlfriend




Rosie O'Donnell is off the market!

The comedian and former TV talk show host – who in mid-November revealed that her longtime partner Kelli Carpenter moved out of their home two years ago – is now dating Tracy Kachtick-Anders, a Texas-based artist, O'Donnell's rep confirms to PEOPLE.

The pair were spotted walking hand-in-hand in Miami Beach on Tuesday.

Last month, when asked if she was enjoying the single life, O'Donnell, 47, told PEOPLE, "I'm not. But on we grow, so to speak."

And in October, in an interview with Examiner.com, Kachtick-Anders said, "Maybe for a future plan, I'd like a date with an inspiring woman!"

Like O'Donnell, Kachtick-Anders is active in lesbian, gay, bisexual and transgender parenting and adoption issues. She launched Open Arms Campaign, a non-profit organization to recruit and foster adoptive families that targets the LGBT community. "I have become an activist and work to educate everyone, not only about the plight of foster children," she wrote on TheRainbowBabies.com, "but also the inequality that faces LGBT people in their quest to create families." Kachtick-Anders has six children, five of whom are adopted, according to the Examiner.com.

O'Donnell, meanwhile, is gearing up for the airing on HBO in late January ofA Family Is A Family Is A Family: A Rosie O'Donnell Celebration, a documentary that challenges the traditional ideas of family.