There's a lot of empirical evidence and a lot of very knowledgeable people who believe the Obama Stimulus Plan (the general outlines of which are coming into focus) is simply not big enough -- not only in overall dollar size but also in the kinds of spending included in it. Paul Krugman has been posting on the issue at his blog, particularly in this post. And this article in the Times covers it more broadly.

The debate about spending priorities essentially comes down to how much bang for your buck you get in economic stimulus terms for tax cuts or rebates (even for middle or low income people most inclined to spend it) versus government spending, especially in the context of a dramatic economic downturn. And from what I can tell there's a lot of empirical evidence that the latter wins out by a substantial margin.

And yet the desire to get a substantial number of Republicans to vote for the bill appears to be having a big impact on the proposal's size and shape. Quite likely, leaving it too small and too tilted toward tax cuts to get the job done.

Late Update: Nate Silver has an interesting and at least partly persuasive political interpretation (thanks to TPM Reader EW for flagging it for me) of what's going on here: namely, that Obama is trying to start low and let the bidding run higher, leaving it mainly to the Senate Dems to do the heavy lifting of bidding the thing up. Remember, Obama himself did seem to hint at such a strategy earlier last week.

If we assume for the sake of the conversation that this or something like it is Obama's strategy, my reaction is two-fold.

First, the legislative process is always messy. But this is a case where you want it to be as little messy as possible. We're spending a staggering amount of money here -- and for both political and policy reasons, you want it to be focused, efficient (in terms of delivering stimulus) and focused on spending projects that will not only employee people in the medium term but spur efficiencies, economic growth and other good things for the long term. If you get deep into a lot of bidding and horse-trading you get more parochial interests in the mix which cuts against those goals. I don't say that makes it a bad idea necessarily. But it's a real concern.

Second, when I write stuff critical of Obama, either on the policy or political fronts, there's always a rush of emails saying, 'Give him a chance!' 'Leave Obama alone!' 'He's probably got a plan you don't know about!' and so on. He may. I hope he does. But all of these debates are dynamic. You never assume anything. If Nate's right about what Obama's plan is, having people pushing for something better from the outside is part of it. So under either scenario, holding your tongue makes no sense, in addition to being unethical.

Final Saturday Night Update: Here's a piece from the Post about concerns about the make-up of the bill.

The Seattle Post-Intelligencer has been published for 146 years. But it seems likely it will cease publication in 60 days. Hearst owns the paper and announced to the newsroom late Friday evening that it is putting the paper up for sale. If a buyer is not found in 60 days the PI will either become a web only publication or cease publication entirely.

It's an extremely poor climate to sell any newspaper. And as the PI's article on its own apparent demise notes, the paper has lost money every year since 2000 and lost $14 million in 2008.

Late Update: As I noted last month, the Rocky Mountain News is in a similar, though perhaps not quite as dire situation. In early December, the paper's owner Scripps, announced that it was putting the paper up for sale might sell it if it didn't find a buyer in 4 to 6 weeks -- in other words, by about now. Not surprisingly, this carnage is starting to hit first in mid-sized two paper towns (like Denver and Seattle) in which both papers have been for some time operating under Joint Operating Agreements, in which many non-editorial functions are consolidated. Here's a blog (iwantmyrocky.com) run, I think, by employees of the Rocky trying to save the paper.

Even Later Update: Here's a post from The Slog, the blog of Seattle's alt weekly, The Stranger, on how it went down Friday night.

The most popular question on change.gov, the Obama transition website, is one from Democrats.com's Bob Fertik: "Will you appoint a Special Prosecutor -- ideally Patrick Fitzgerald -- to independently investigate the gravest crimes of the Bush administration, including torture and warrantless wiretapping?"

George Stephanopoulos put the question to Obama in his interview, which is running tomorrow morning, and Obama apparently answered. So far they're just teasing it. Not completely clear if Obama addressed the question in a meaty or meaningful way or just sort of brushed it off. But I guess we'll know tomorrow.

John Bresnahan reports that Roland Burris is going to show up in Washington again next week and demand to be seated. And he's got a pretty solid argument at this point.

When Reid and Durbin spoke on this issue last week they hung almost everything on the fact that Illinois Secretary of State Jesse White had not co-signed the certificate of appointment from the governor. They said that without that signature, their hands were tied. They'd wait to hear from the state court deciding whether the signature was needed. And they strongly implied, if they didn't come right out and say, that if the signature issue were resolved they'd seat Burris as senator.

Well, now the state court has signed off, saying the signature doesn't matter. And now the Secretary of State himself has sorta kinda provided a signature. And Sen. Durbin himself (who remember is not only the second-ranking senate Dem but also Illinois's senior senator) now says that White's signature may be enough to settle the matter and get Burris seated.

And then there's one other issue to keep in mind. The senate Dems now have very little leg to stand on to deny Burris. Just yesterday Durbin was saying no way. And he's already shifted. But the clock is also ticking on Burris. The Illinois House just impeached Blagojevich yesterday. So he could be out of office by early February, if not sooner. And as soon as that happens, the new governor could appoint someone else who the senate would probably readily seat, making Burris's appointment a dead letter. So Burris needs to press the matter now or risk having Reid and Durbin roll over on the ball and run out the clock.

A new report from the Obama transition team claims their proposed stimulus package will save or create 3-4 million jobs -- but meanwhile, some economists think it still might not be a big enough plan. That and other political news in today's Election Central Saturday Roundup.

I speculated below that Senate Dems would use today's Illinois Supreme Court ruling as cover to go ahead and seat Roland Burris. But maybe not. Sen. Durbin is still saying they won't seat Burris without the secretary of state's signature certifying the governor's appointment, the very thing the court deemed unnecessary to make the appointment valid.

The one-man trainwreck that is Rod Blagojevich held another memorable presser today, quoting Tennyson and demonstrating again that no one holds him in as high a regard as he himself does:

Late Update: TPM Reader SS, ever the matchmaker:

After that presser, I'm persuaded Blago should elope with Sarah Palin. Match made in heaven (at least Jon Stewart's!).

Feds drop all criminal charges against former Reagan budget director David Stockman.

Okay, fine, Blagojevich is clearly insane. I'm sitting here at my desk, listening to him chatter on in the background about the impeachment vote. And he's going on about how his policies let someone get a liver transplant, and should he really be impeached for that? It's like some bizarre performance art. Now he's quoting Tennyson.

Here's his list of good deeds that makes impeaching outrageous.

A bill was introduced in the House Tuesday to create a Bush-era Truth Commission, the National Commission on Presidential War Powers and Civil Liberties.

We've been trying to get some answer from the House leadership -- Pelosi and Hoyer -- about whether they're inclined to support the bill or bottle it up. And so far we haven't been able to get an answer from either.

We'll keep pushing for an answer. But we thought you'd like to know.

CNBC reporting that former Treasury Secretary Robert Rubin's announcement of his resignation from the Citigroup board is imminent.

Illinois Supreme Court rules that secretary of state's certification of Roland Burris not necessary to make Blago's appointment valid.

That kicks this whole mess back the Senate, where it looks likely that the Democratic leadership will point to this ruling (.pdf) as tying their hands and go ahead and seat Burris.

NBC's CBS' Chip Reid asked Obama this morning specifically about the size of the stimulus plan and about criticism from those like Paul Krugman that the package is too small and tilted too heavily toward tax cuts:

A reader writes in with a point that had occurred to me too after reading this morning's article in the Post about Geithner's rejiggering of the TARP program -- namely, separate from the 'Stimulus Bill' proper, there's now a move afoot to reprogram the second half of TARP into something that looks a lot more like stuff you'd expect to find in a Stimulus Bill, rather than anything like what the program originally envisaged ...

I agree that the stimulus package, as currently detailed, is insufficiently aggressive or imaginative. But most reports have been underestimating its size by $350 billion.

That's because the second half of the TARP funds remain to be spent. The Washington Post reported this morning that the Obama team is planning to reprogram most of those funds. The new package will include spending a large amount of money spent on a foreclosure relief program, and a more tightly-focused approach to consumer credit markets.

No, it's not technically a stimulus package. And yes, half the money has already been wasted. But there's nothing in the stimulus package that has the potential to do as much as simply stemming the tide of foreclosures and stabilizing the real estate market. So it may well turn out that the most significant part of any turnaround comes not from passing new programs, but from spending the TARP funds in a way that will actually make a difference.

Late Update: As a side note (although it's pretty fundamental), I was more than a little chagrined to see that not only has the term "war on terror" not been retired by the new Administration, but we're going to "win" it.

From TPM Reader LG ...

One of the most insightful things I ever read from you was this, about the Iraq War/GWOT:

"For its prime promoters and cheerleaders and now-dwindling body of defenders, the war and all its ideological and literary trappings have always been an exercise in moral-historical dress-up for a crew of folks whose times aren't grand enough to live up to their own self-regard and whose imaginations are great enough to make up the difference."

I wonder if something of the same phenomenon isn't in evidence now in reactions to the economic situation. No one believes this isn 't a very serious mess, but "Great Depression II !!!" seems extreme, to say nothing of historically uninformed. I can't help but think that some of that same narcissism you identified earlier might be at work here as well.

I think we're in a genuine crisis. One that is immediate and an overlapping one that is going to stretch far into the future. But we all, and I don't exclude myself, must be ever wary of the way our own egos and excessive regard for our own short moment in history (which is an extension of our egos) can become a distorting lens.

Daschle open to allowing filibusters of health care reform.

David just linked this article below. But I'm going to do so myself because I think the piece from John Judis as well because I think it's so important. The scale and types of spending on infrastructure make me think Obama's economic planners are not getting the severity of the crisis we face. Definitely read this article. It's short, clear, will take you just a few minutes.

Judis isn't buying into the Obama stimulus package just yet either.

At a 10:30 a.m. ET press conference, Obama is expected to roll out his intelligence team of Blair/Panetta. That and the day's other political news in the TPM Election Central Morning Roundup.

At TPMMuckraker over the last few days we've been digging into the story behind the grand jury investigation of Bill Richardson. Whether Richardson himself is in any trouble -- and there's no clear evidence he is -- there's a very big story in the background. That is widespread fraud, pay-to-play corruption and bid-rigging in the municipal bond business. Here's a piece from the Times today on the same topic. This is one of those stories that's weedy and a bit hard to understand. But it looks like a big deal -- a sort of broad ranging fraud in which the financial services industry was leeching cash away from city and state governments for years.

From the rival daily, the Seattle Times ...

The future of the Seattle Post-Intelligencer appeared uncertain tonight after a local television station reported the newspaper is setting the stage for closure -- but then the managing editor of the paper said he knew of no such plans.

KING-TV reported at 5 p.m. that the P-I will be put up for sale. The information was attributed to an unnamed "source close to the deal." The television station said that neither Hearst Corporation, which owns the P-I, nor the paper's publisher was available to immediately confirm the report. However, the source said the news could be officially announced as early as tomorrow.

The P-I then reported that the paper's managing editor said he knows of no plans to sell the paper. At about 5:15 p.m., soon after the KING-TV report was aired, managing editor David McCumber told the newsroom's staffers, "If this is going on -- and I don't know that it is -- it's going on at a level that's far above me, and nobody has seen fit to clue me in. I think it's a bunch of rumor. You look at the state of this business -- it wouldn't surprise me if something was going on, but I have no knowledge of what that something is."

From the PI's own website (musta been fun to write) ...

The future of one of Seattle's two daily newspapers was called into question Thursday by a TV station report, though top leaders at both papers appeared surprised by the report.

KING 5 reported at about 5 p.m. that "a source close to the deal" said Hearst Corp., owner of the Seattle P-I, would announce as soon as Friday that it's putting the P-I up for sale.

The report, which also appeared on the station's Web site, added that "Hearst does not expect another buyer to step forward and that Seattle will likely become a one-newspaper town within the next few months."

The P-I's managing editor said he knows of no plans to sell the paper. At about 5:15 p.m., soon after the report was aired, managing editor David McCumber told the newsroom's staffers, "If this is going on -- and I don't know that it is -- it's going on at a level that's far above me, and nobody has seen fit to clue me in. I think it's a bunch of rumor. You look at the state of this business -- it wouldn't surprise me if something was going on, but I have no knowledge of what that something is."

Former FEMA Chief Brownie driven from home by wildfire.

"We never think of the fact that something like this can happen."

Here's the official TPM analysis of Norm Coleman's highly meritorious lawsuit to overturn the recount.

Yeah, what's the deal with all the talk about reining in Social Security?

Steve Rattner for Car Czar. Because what Detroit needs is more complex financial instruments.

I think we need to be hearing more from Rep. Eric Cantor (R-VA).

After a meeting with Obama economics adviser Larry Summers, Sen. Tom Harkin (D-IA) tells TPM Election Central that the Obama stimulus plan sounds like "trickle-down" to him.

Via Atrios. Why are senators negotiating with Citigroup? From the AP ...

Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.

The lawmakers aim to attach the plan to President-elect Barack Obama's economic stimulus legislation, and said Thursday the change in bankruptcy law could ease the foreclosure crisis that has dragged the economy into the worst recession in decades.

The compromise between Citigroup and Sens. Richard Durbin of Illinois, Charles Schumer and Christopher Dodd of Connecticut, would be limited to loans made before the bill is signed. Obama has said he backs the concept.

If Norm Coleman's senate term has expired and he's no longer a senator, why does he still have a senate website?

With Obama's big economics speech today we were going to finally get some details on his proposed stimulus package. Or so we hoped. In a speech long on exhortations and short on specifics, Obama demanded dramatic action from Congress immediately, or at least by next month. Some of the highlights ...

Full-size video at TPMtv.com.

"Office of Norm Coleman Is Closed"

Jon Alter chimes in on the constituency question ...

The fate of the stimulus does not turn on which constituenices will support it but on Obama's leadership skills. An interesting historical analogy might be the creation in 1933 of the Civilian Conservation Corps, to which I devote a chapter in "The Defining Moment."

Shortly after being sworn-in, FDR said he wanted to do something fast about unemployment. He told his aides that he wanted 250,000 unemployed young men--many of them hobos--working by summer, then only three months away. Labor was adamently opposed. The head of the AFL testified that it "smacked of Fascism, Hitlerism and Sovietism." (His real problem was that the wages were only $1 a day). The mayors had no interest because these were rural jobs. None of his Cabinet thought it could be done in so short a time. But Roosevelt and his Rahm Emanuel, a wonderful character named Louis Howe, were determined that this happen. They used their political capital to get it through Congress and their bureaucratic smarts to get it off the ground. It became the model of all New Deal programs, the inspiration for all non-military national service and the fastest mobilization in American history. Eventually three million men were employed and they planted three billion trees, saving the topography of the U.S. The men who came up through the CCC, like Gen. George Marshall, went on to win World War II. The camps were racially integrated, which presaged the integration of the armed forces and of American society generally.

My point is that you don't have to have all the constituencies lined up to set great change in motion. Coincidentally, 250,000 jobs is the exact number Obama has proposed for national service. We know that "green collar" jobs will be in the stimulus. But we don't know yet whether national service jobs will be included.

Senate Dems remove Norm Coleman from the senate phone book.

Andy Stern: "If Congress needs just three weeks to pass a Wall Street bailout, then we should be able to count on our leaders to pass Main Street relief with as much urgency."

From TPM Reader TD ...

My practice group works exclusively in the public sector. Obama's only constituency in Congress and the nation for bold initiatives, such as Green infrastructure, will come from states (a small handful) that are ahead of the curve on green initiatives. The biggest candidate is CA, where the Governor has already signed legislation that is more aggressive than the federal government, or likely, any other state in the Union. How much congressional representatives from CA are in line with these initiatives is not clear. Other constituencies will be politicians from states with companies heavily invested in green technologies and industries, such as wind farms, solar, and solar thermal (big energy, small footprint so far). Ironically, many of the bigger companies are based overseas.

My conclusion is that the constituency is not ideological, nor is it very deep. Politicians love Green the way they love "tough on crime." It's a great ad, and you don't have to do too much, other than build a few prisons in the latter case, and show pretty pictures of wind turbines in the former. Green initiatives have been seen as a potential boom catalyst. In a global economy that has driven down the price of oil, the national security imperatives that were the strongest political selling points, are lessened. Obama will need to make a case directly to the people and drag a disinterested Congress with him. Does he care enough? Time will tell.

The response does not address infrastructure projects, in general. The needs are great, only because our infrastructure is crumbling. Unfortunately, any coherent, broad financial stimulus for infrastructure beyond roads, airports, and stadiums (indeed) will likely be limited. How about bridges? The electric grid? Hydroelectric (ocean currents)? Nuclear? Trains, regional and light rail? The differences between the Depression and today are remarkable. Recognition of the need for federal stimulus in broad infrastructure areas will require a longer view of the recession, not just short term stimulus, and will likely not be driven by mega-bureaucracies like the WPA in the '30s. If the recession persists, I may be proven wrong.

Here's my question.

In the avalanche of writing about a massive Stimulus Bill, the one proposition (though grandly general) that's been of most interest to me is one that is heavy on infrastructure spending and spending on R&D geared toward developing a sustainable Green economy. I say this with the understanding that in our current economic plight you'll likely need a significant amount of front-loading of 'shovel-ready' projects, tax rebates, aid to states not to cut critical safety net programs in the short run, etc. But I'm not talking so much about where the bill starts, but where it's going.

But is there a constituency in Congress for that? Let's set aside for a moment whether there's a constituency in the country for that. For the moment, let's focus more narrowly in Congress.

We were talking about this in our editorial meeting today. And we didn't have any really good answers. But the key is that I don't think it really lines up in traditional left-right terms. For instance, it's not clear to me that the Progressive Caucus in the House is that constituency necessarily. I suspect it likely cuts across established factions among the Democrats, and likely brings in elements of the business community -- not surprisingly, the ones who'd get the contracts.

But I want to put this out to readers. Because I don't have a clear read on it. If Obama rolls out a bill that looks something like that, where does he go for fundamental support for it?

(Meanwhile, as I write, on TV I'm hearing Mitch McConnell and John Boehner laying out their priorities.)

Obama's big economic speech is at 11 ET this morning (excerpts here). That and the day's other political news in the TPM Election Central Morning Roundup.

A bit counter-intuitive. But okay ...

From John Harwood's CNBC interview with Obama ...

President-elect Barack Obama confirmed to CNBC Thursday that he plans to lay out a roughly $775 billion economic stimulus plan but indicated that the amount could grow once it gets taken up by Congress.

"We've seen ranges from $800 (billion) to $1.3 trillion," he said in an exclusive interview with CNBC's chief Washington correspondent John Harwood. "And our attitude was that given the legislative process, if we start towards the low end of that, we'll see how it develops."

New scrutiny for Obama's business tax cut proposals.

Over almost two years, I've learned not to underestimate Barack Obama or assume reflexively that if he's not following my idea of the best way to proceed that he hasn't thought up a much better one I hadn't considered. But it does look to me like he's ceding the initiative to Congress, which is odd since he's immensely popular and Congress is wildly unpopular.

Let's review the stakes. If Obama can pass a big, well-thought-out and clean stimulus bill in the first weeks of his administration, he will have already placed a deep imprint on the course of American politics for years and even decades into the future. If he doesn't, if it starts dragging out, not only will that not happen, which is bad in itself. But he'll also signal to a lot of people that he can be stymied even at the height of his power.

Now, before you write in, yes, it's a bit premature to be overly critical of Obama's legislative strategy two weeks before he has a presidency to strategize with. I grant you that. But the original idea was to sign the bill on inauguration day, which would have required having a bill already moving through Congress today. Now the marker is being place around mid-February. And that's being viewed as an ambitious schedule.

What's more, just watching things get under way over the last few days, there's a lot of congressional muscle flexing, institutional muscle flexing, you might say, which is understandable considering the doormat the Congress became under President Bush. But I hear a lot of chairpersons and leaders talking about running this bill through a lengthy legislative process, lots of amendments, which undoubtedly means lots of horse trading, and so on.

There are a lot of reasons President Obama doesn't want to be like President Bush, who repeatedly bum-rushed the Congress into passing his legislation by ramping up hysteria over manufactured crises. But the current situation actually happens to be a genuine crisis, which must count for something. And even though the stabilization of the stock market has calmed political tensions a fair amount, there's a lot of economic data out there suggesting we're still in the midst of a profound economic crisis.

Presidents have key windows of opportunity. And this is one of them, perhaps a defining one. So I'm surprised to see so relatively little effort to take the initiative more forcefully with Congress, let alone the greatly diminished political opposition, since left to itself the legislative branch will naturally revert to standard operating procedures I'm not sure we can really afford at the moment.

Now, perhaps they're being much cannier than I realize, working out of the camera's gaze to get the Hill kingpins invested in this legislation and do the heavy lifting for him rather than taking a more visibly forceful approach. I hope that's true and part of me thinks it may be since they're no fools. But, alas, hope is not a plan.

Late Update: One other point. To get a sense of the my implicit pessimism about the stimulus bill we're going to get, read Paul Krugman's recent posts on the topic.

So how exactly did Roland Burris walk so easily over that line Sen. Reid drew in the sand? We explain what happened in today's episode of TPMtv ...

Full-size video at TPMtv.com.

Headline of article from the Journal: "Republicans See Template for Rebound in Election of Puerto Rico's Fortuno"

Republicans' focus on recovering after sharp blows in the past two elections has put a spotlight on an unlikely star: Puerto Rico's new governor, Luis Fortuno.

As he was sworn in Friday, the Republican Governors Association was effusive. "Luis Fortuno proves that principled Republicans can appeal to voters everywhere," said the group's chairman, South Carolina Gov. Mark Sanford. "He is the type of leader the party needs to revive its base and expand its appeal."

Party leaders view Mr. Fortuno, 48 years old, as an example for Republicans as well as someone who can reach out to Hispanics and other minorities in the U.S. Republican National Committee Chairman Mike Duncan has already made overtures. At a forum Monday, Mr. Duncan said he was inspired as he watched the Fortuno inauguration in San Juan. The governor, he said, "ran a very conservative campaign in a state, a territory, that has severe economic problems right now. But he said, 'We don't need these 11,000 new government employees put on by the opposition party. We can't tax our way to prosperity. We will have family values.' "

Late Update: TPM Reader JG adds this ...

The particularly sad thing over the Fortuño enthusiasm on the Republican side is that while he's a Republican, he didn't get elected as one. He ran as the New Progressive Party candidate. Maybe that's the new GOP strategy; the party brand is so toxic, so they're going to re-launch under a different name.

Everyone is making nice now.

Ron Kampeas explains.

There's been a lot of griping recently from the Right about how there are no web-native news outlets on the right, or that they aren't seen as having a lot of credibility or that the people who write for them get no respect. And then you read that Pajamas Media, the right-leaning blog outfit started a few years back with a crazy amount of VC money just hired Joe the Plumber to be their new war correspondent in Israel.

Apparently the RNC just booted CSpan out of today's informal discussion/debate with the candidates vying to be elected party chair.

Perhaps they're going to twitter it?

This is in the background. But it's important.

As we told you last week, the Fed has initiated a program to purchase half a trillion dollars worth of mortgage debt that is purportedly clogging up the credit markets. This is essentially what the TARP program was initially supposed to do -- buy back mortgage securities. But they decided not to. And now the Fed is doing something similar, though there are important differences.

They've contracted with four financial services firms to manage the money. Under normal circumstances the fees generated by managing that much money could be huge.

Equally important, having these firms manage this money creates huge potential conflicts of interest and opportunities for self-dealing. Just to explain this in the most general terms, the companies holding these securities are sitting on assets worth only a fraction of their presumed value as recently as six months ago. The companies now managing the buy-back are in many cases the same outfits that helped saddle these companies up with these crappy investments in the first place. And they're the companies likely to be doing business with these companies again once this TARP thing is over. So the managers have all sorts of incentive to make these companies whole as opposed to driving a good bargain for taxpayers.

All of which makes it really important that we know how these four companies were chosen, how they're being paid and just how the decision-making is taking place.

So with all that in mind, last week, we went to the Fed and started asking questions. A Fed representative insisted that there'd been a formal and open bidding process. He refused to divulge any information about the value of the contracts of the successful bids. But he did tentatively agree to release the original RFP (Request for Proposals). But now they seem to have changed their minds and have stopped returning our calls.

Now, here's the key. This isn't some remote issue of good government transparency. This is about gargantuan sums of money used in a way that makes possible all sorts of rotten insider deals. And the Fed won't release even the most cursory information on how this is being done. That's a big deal.

I can't tell which is a bigger scandal -- that fact that the Fed is shifting gears and stonewalling us or that we seem to be the only ones even asking the question.

Zack Roth has more at TPMMuckraker.

An earlier version of this post incorrectly stated that the Fed program is the same as the original plan for the TARP program which was designed to buy up toxic mortgage assets.

From TPM reader M.A.:

I work at an investment bank and deal with the TARP money-managers as clients. Though the Fed has apparently been unclear about the selection process, you should know that these money managers are the four biggest players in the fixed income money management industry and particularly in mortgage backed securities. As a taxpayer I feel very comfortable about the pool of portfolio mgmt talent that these guys are bringing to bear on this project. Agreed that transparency needs to be increased as to fee structures though.

Remember that these fund managers are "buy-side" firms ... their interests are in a functioning and efficient marketplace for these securities while also retaining and creating value for the investor (the taxpayer in this case). Do not confuse their interests with the "sell-side" investment banks who created and sold these things in the first place, i.e. Merrill Lynch, UBS, Credit Suisse, Morgan Stanley, etc.

The upshot of the meeting between Roland Burris and Sens. Reid and Durbin seems to be that Harry Reid finds Burris to be a nice man.

Talking it over here and seems like Reid is walking this back from the edge of the cliff a bit, hanging their legal hat on the the Illinois court case over whether the secretary of state can legitimately withhold his signature from the certification of Blago's appointment of Burris.

Reid seems to be suggesting that the ball is in the Illinois courts, which opens the door to seating him once that legal dispute is resolved. Even the Illinois secretary of state has conceded that he can't stop the appointment.

So it looks like just a matter of time before Burris is seated.

In his press conference just now, Barack Obama softened his approach on seating Roland Burris:

"That is a Senate matter. But I know Roland Burris, obviously he's from my home state. I think he's a fine public servant. If he gets seated then I'm gonna work with Roland Burris just like I work with all the other senators to make sure that the people of Illinois and the people of the country are served."

If he gets seated, I'll work with him? That's different from his earlier statement that Burris shouldn't be seated.

Late Update: The video:

Harry Reid's office is telling us the AP story about Dems deciding to seat Burris is "wrong."

More soon.

Remember that whole Stimulus Bill thing?

Apparently Harry Reid and Senate Dems are going to concede Obama's seat to the Blago/Burris dynamic duo.

My new year's resolution for Reid and crew: calcium supplements to stiffen the spine!

Late Update: Reid and Durbin are holding presser at 11 ET. We'll see what happens there.

Later Update: Regardless of what you think about whether Burris should be seated, seating him now just substitutes one spectacle for another: the Burris circus for another Reid capitulation.

Later Update: TPM Reader JS chimes in:

I respectfully disagree. While a little spine certainly wouldn't hurt Sen. Reid, I would rather see the Wizard bestow on Reid and crew a little foresight. Reid and the rest were stupid to react so prematurely to the Blago tapes by denying his eventual Senate appointee. Reid had and has no legal case; Blagojevich is presumed innocent and indeed hasn't, and won't for some time yet, even been indicted. Reid unnecessarily painted himself into this corner and now has egg on his face. A stiffer spine in this case would only make matters worse.

Via Spack, CQ's Jeff Stein finds a cool reception to the Panetta nomination among CIA operations types.

Classic: "This is Hardball! This is where we overreact!"

(Thanks to TPM Reader FZ for the catch.)

The Obama-bashing former Aussie PM John Howard is the mystery guest preventing the Obamas from occupying the Blair House. That and the day's other political news in the TPM Election Central Morning Roundup.

Here Fred Kaplan makes the case for the appointment in Slate.

Earlier today, Elana Schor got an impromptu interview with Sen. Feinstein who seemed to soften her initial coolness toward the appointment and suggested she might be more receptive if Obama kept on the CIA's current #2 guy Stephen Kappes in his current role. And this late piece in the Times quotes unnamed transition officials saying that Pres-Elect Obama does intend to do that. So presumably everybody has enough wiggle room here to avoid any sort of big fight.

There are a lot of fairly intricate and byzantine arguments about whether or not this is a good choice. But the people who I'd want to see supporting the nomination do seem to support it. And as I said last night the nature of the opposition, even if it seems to be diminishing, makes me more inclined to support the choice.

Now that he's finally made bail, Duke Cunningham uber-briber Brent Wilkes is about to be freed from federal prison pending the outcome of his appeal.

Franken campaign rolls out new (repeatedly used) title for Norm Coleman: "former Senator Coleman".

Arlen Specter compares Eric Holder to Alberto Gonzales.

The Politico is reporting that Sen. Dianne Feinstein (D-CA), last seen getting bristly over Leon Panetta's appointment to run the CIA, says the Senate Democratic leadership was wrong not to seat Roland Burris.

Says Feinstein: "I can't imagine the secretary of state countermanding a gubernatorial appointment," Feinstein said. "The question, really, is one in my view of law. And that is, does the governor have the power to make the appointment? And the answer is yes. Is the governor discredited? And the answer is yes. Does that affect his appointment power? And the answer is no until certain things happen."

Let me first recite the catechism: Blagojevich is a joke, an embarrassment. And I think accepting the appointment from Blagojevich reflects poorly on Burris's judgment (though not in any fatal, ominous way, just a bad choice).

But Blagojevich is the governor of the Illinois. And the Governor appoints senators to vacant seats. He hasn't been convicted of anything, which is no mere technicality. And I don't think anyone has seriously claimed that this appointment is tainted by corruption.

If there was a real belief that Burris's appointment had been bought, then I think more aggressive and expansive refusal would be justified. But as I said, I don't think anyone is really suggesting that. So as awkward and untoward as the whole thing may be, I really question the wisdom and possibly also the legality of not swearing him in. Rules are rules.

I could be persuaded otherwise. And I'm not losing much sleep over Burris's plight. But rules are rules. And I'm not sure what's being accomplished with this spectacle.

Where's tort reform when we need it?

Jeb Bush not going to run for empty Florida Senate seat in '10.

Norm Coleman makes it official: He's going to sue to keep his seat.

Norm Coleman is set to speak publicly at 4 p.m. ET for the first time since the recount ended in Minnesota.

Will he concede? Vow to fight on in the courts? Try to prove he's got a better stand-up routine than Franken?

It's been clear that in addition to Sen. Feinstein, at least as aggrieved is Sen. Rockefeller, the out-going chair of the senate intel committee. When asked this afternoon whether the Panetta appointment endangered the country, the best he could manage was: "That's a provocative way to put it."

Feinstein and Rockefeller may not be on board with the Panetta pick, but former intel chair Pat Roberts (R-KS) tells TPM Election Central he's just fine with it.

Dianne Feinstein explains her reticence on Panetta.

We were trying to nail down whether the Obama transition really did brief Sen. Wyden and not Feinstein. Or was it that Wyden just got tipped off informally, perhaps even from Panetta. Turns out no. Wyden's office tells us the transition did brief and consult with him on Panetta, while apparently leaving Feinstein in the dark.

Labor lawyer and author Tom Geoghegan announces he's running for Illinois' 5th District, Rahm Emanuel's seat.

Don't know what his chances are -- he seems more like the type of guy you'd like to see in the House than the type who actually gets there. But let's see. It's important to aim high.

Subject line of a mass email I just received from Newsmax.com "Hot Sarah Palin Calendar Just Released"

See the hotness here.

FBI agents doing the background check on Bill Richardson apparently started bumping into their colleagues who were investigating those pay-to-play allegations in New Mexico.

The more we dig into this scuffle the more dimensions to the story there appear to be -- beyond the turf issues between the Senate and the executive, you've got issue of intel budgetary reform, the future of the CIA and anti-terror ops, the legacy of torture, the ability of the senate overseers to big foot intelligence operators who lack a clear political power base. Did the Obama team really brief junior members of the intel committee and not the incoming chairman? At each point, the first-bat questions yield more questions than answers.

We're digging into this in a big way today because beyond the particulars of intel policy (which are of great consequence in themselves), this strikes me as the first story of 2009 that's a real story rather than mere theater or ephemeral drama. This is going to give us our first read of the interaction between the incoming Obama administration and the senate Democrats.

As I wrote last night, my very preliminary impression is that the people whose opinions I respect most seem open to or in favor of the pick, whereas those opposing it strike me as more motivated by turf and power struggles. But that's only a very preliminary impression and we're looking for more data points, more reactions to put together a fuller picture.

Elana Schor is down at the Capitol as I write, probing different aspects of the story. And as usual, I'm eager to hear from knowledgable folks on the Hill and in the Intel world for your read about what's going on here.

For those interested in more, Laura Rozen has some more details at her new blog at Foreign Policy.

Yesterday we got a clear vision of the future of the Republican Party as six candidates debated to become the next chairman of the Republican National Committee. Who will pick up and bravely carry the beleaguered party forth into the future and beyond? More importantly, who loves Ronald Reagan the most? The answer... in today's episode of TPMtv.

Full-size video at TPMtv.com.

The new Congress sworn in today sans Franken and Burris. That and the day's other political news in the TPM Election Central Morning Roundup.

The NYT tracks down the broken shell of a former Gitmo prisoner now repatriated to Pakistan.

Daniel Levy, on what's really happening in Gaza and what to do about it.

Sen. Ron Wyden (D-OR), a less senior member of the Senate intel committee, says he was consulted in advance on the Panetta pick for CIA, so I'm starting to think that not alerting incoming chair Dianne Feinstein or outgoing chair Jay Rockefeller was not necessarily an inadvertent oversight by the Obama team.

From an observer up on the Hill ...

No one asked the Hill. Came as a suprise to HPSCI and SSCI members. Feinstein and Rockefeller wanted Steve Kappes. Members like and respect Panetta, but they want an IC professional in the post. They remember what Goss did, and fear that CIA's role will continue to diminish with a political in charge (fair or not). Some even like Panetta for Commerce, which is reportedly what he wanted originally. It's awkward.

And from a career intel professional ...

I have 29 years of experience in the intel business both in government and as a consultant / contractor to the government. I recently retired after those 29 years as a Navy Captain (Intel). I have served with many in the "national intel community" and served on the WMD commission in 2004-05. This is my cred, now for my comment.

I think there is a lot more here than is being said. I believe that Feinstein did not want someone like Panetta who has a large and independent power base and network. If you get a career guy they are a lot easier to isolate and move around. Panetta has been around for a long time and has his own network. I actually think that it is a good choice. He knows how intelligence needs to be presented to the President - that is the critical issue here.

I do not discount the notion that many in the CIA feel slighted by the creation of the DNI and not being the "premier" agency anymore, at least when one looks at the totem pole. But if you look at the PDB more than 80% of the product still originates from the DI. It is the gold standard of intelligence agencies, both here and abroad. As a old colleague once said to me: there are a lot of jewels in the crown of the United States government but there are only a few large critical ones: CIA DI, NASA, NIH, State; that is where the intellectual might of the government is.

The issue is not intell guy or non-intell guy. The big issue for Blair and Panetta is strategic or tactical orientation. We are fighting two wars and the warfighter always screams they don't have enough intel or enough of anything for that matter. The dice are so loaded for support to the warfighter that critical strategic intelligence for the President and other senior leaders goes wanting due to time constraints on collection assets.

We need a significant re-orientation away from tactical support by CIA and other National agencies and back to their primary mission - direct intelligence support to the President. The last 15 years have seen an explosion of tactical intelligence capability with the advent of UAVs (which DoD fought against for so long due to the fighter pilot mentality). National systems need to be re-oriented to national priorities and away from tactical or operational desires of the warfighter.

I think the Panetta selection is another indication of the change coming. I was concerned that the selection of Jones as National Security Advisor and Blair as DNI underscored the great concern that I have about the militarization of intelligence. The selection of Panetta, with a much wider and deeper power base than either of them, makes me hopeful in this regard. Panetta is a skilled operator, he knows how to get things done. He knows how to get a budget approved and to make the wheels of government work. He will be a force - both in the Administration and on the Hill -- much larger than any career guy could be. This is good. It gives the CIA the opportunity to re-create itself within the current structure.

I used to do a lot of intelligence reporting. But I haven't really done any to speak of in a few years. So I'm coming at this cold. But I feel instinctively suspicious of the congressional reaction to this appointment. Rockefeller is saying he's not happy. But he was a very poor ranking member and then chairman of the senate committee. So I don't think that means much. If the Obama team really didn't make a courtesy call to Feinstein, who's taking over the overseeing committee, that was a goof -- just because there's enough hard slogging getting this kind of stuff done that you don't get people ticked over stupid things. But let's not let that distract from the substance of the issue. I'm not certain what I think about this appointment yet. But on first blush, the nature of the opposition makes me more inclined to support it.

Sen. Reid's office says the Dems aren't going to try to seat Al Franken tomorrow.

I've been mulling and snooping around to find out what prompted Sen. Dianne Feinstein's chilly statement about Obama's choice of Leon Panetta to run the CIA. LAT sheds more light.

Seems like there could be a real fight over this nomination, within the Democratic party.

Al Franken declares victory:

From TPM Reader RW ...

In regards to Obama's strategy re: tax cuts, the proper move is to offer a concession so as to split the GOP. If he is able to do that at the get-go, he'll log-roll them for months. It is going to be really hard for them to oppose any measure designed to make America's economy get back on track.

Prosecutors say Bernie Madoff should be sent to the slammer without any chance of bail after they caught him trying to mail about $1 million worth of jewelry and other assets to relatives in violation of his bail.

Seems that company tied up in the Richardson grand jury investigation doesn't exactly have a squeaky clean record.

We're watching the Republican leadership's press conference on the Stimulus bill. I think I got about all I needed to know watching Mitch McConnell (R) talking and seeing a smirking Rep. Eric Cantor (R) hovering over his shoulder. McConnell's angle seemed about what you'd expect. Love the tax cuts. We'll support those. But we're just starting to demagogue your spending proposals. So good luck on that ...

From TPM Reader JZ (not that one) ...

I thought I'd point something out about the tax cut that hasn't cropped up yet.

Recall that Obama promised a tax cut for working-class and middle-class taxpayers during the campaign. It was his way of stopping the Reps on the issue. Then the Tax Policy Center (IIRC) came out with their analysis showing that the Obama plan would give more relief to middle-income taxpayers and lower. It seemed to me that this was an effective way of blunting GOP criticism on the issue--although perhaps in this election cycle it wouldn't have matter anyway.

But now it seems to me that Obama needs to follow through on this promise. Part of the whole GOP branding exercise has been to label the Dems as Those Who Will Raise Your Taxes. It's nonsense, but it has sometimes been effective. If Obama didn't come through with it, then it would be playing into the Reps hands "don't believe the Democrats--remember the Obama tax cut that he promised?" It hurt Clinton in 1993 and 1994, although of course other things did, too.

So one could read this just as a way of fulfilling a campaign promise--one that is also important in realigning the electorate.

At least that's the hypothesis.

Bill Richardson has some serious competition for worst press conference of the day, from none other than Roland Burris, who arranged to talk to reporters at Midway Airport in Chicago as he headed to Washington to try to take his seat as Illinois' junior senator:

That's what NBC is reporting.

More soon.

Late Update: NYT agrees.

Later Update: More here.

Which was more damaging about Bill Richardson's press conference: his refusal to answer any questions or a national TV feed that looked like an undercover ABSCAM tape?

Obama returned to the Hill today as President-elect:

It's going to be a few months before I stop pinching myself and just accept that he really won.

As you'd expect, the Journal editorial page is already coming up with a string of bogus insinuations about the Minnesota recount, all suggesting that the process has somehow been rigged in favor of Al Franken or even that there's some more Republican fantasy voter fraud involved. One point they don't mention though: the canvassing board, the outfit making all the key decisions has at least as many Republicans as Democrats, and may actually have more Republicans than Democrats. What's more almost every key decision has been made unanimously.

Secretary of State Mark Ritchie is an elected Democrat. He serves on the canvassing board automatically. For the rest he picked two Republican state Supreme Court Justices (justices appointed by Gov. Pawlenty (R)), one Independent judge appointed to the bench by former Gov. Jesse Ventura, and a fourth county judge who may be a Democrat or an Independent (we don't know because it was a non-partisan election).

Needless to say, the Journal doesn't mention this, but hints at it in this feeble excuse, claiming that the rest of the canvassing board has been "meek" in the face of Ritchie's "machinations."

Pretty pitiful, but standard fare from the Journal oped page.

TPM Reader CP checks in on the checks ...

You assume that economic stimulus -- i.e., short-term personal spending -- is the goal of the $300 billion tax cut Obama is reportedly planning. But I suspect Obama intends to use tax relief as a fast safety net for those in the middle class falling closer to the blades of the financial reaper. Unfortunately, haven't heard anything yet about help for the poorest of the poor, folks like me who are disabled and don't pay any taxes because we don't have any income.

I wanted to be clear in the earlier post and clarify if I wasn't sufficiently clear that these checks can be very important for families and individuals. And that's a big deal in itself. But we need both -- help for individuals and families and also macro-economic stimulus. And to the extent that these tax cuts accomplish one and not the other (which I concede is very debatable proposition) my concern is that we may be shortchanging the second because the whole pie appears to be on the low side of what we'd expected and the size of the tax cut slice is pretty big.

Bob Reich was just on MSNBC commenting on the latest stories about the outlines of the Obama stimulus plan. Bob prefaces every statement, as he must, by saying he's speaking for himself not the administration or transition team. Inevitably, though, he is part of the transition team and occupies a space to the left/Keynesian (though I'm not sure either is the best descriptor of the spectrum) part of the spectrum for the incoming administration. He was very positive on the tax cuts, which is a key tell:

Since my earlier post was more arch and cryptic, I wanted to expand on what seems to be the problem with the Obama stimulus plan, as revealed in the current round of leaks. I would point to three key issues. And I'm going to base these three on the premise -- which is by no means clear -- that the business tax cuts included in the bill aren't particularly egregious on their own terms but rather ones that make some economic sense in the situation we find ourselves in.

So with that, the three.

First, there seems to be a decent consensus that the tax rebates from last year had little stimulative effect on the economy. So while it's a good thing for families on the margin to get another $500 or $1,000, it's not clear how much bang for the buck you'll get for the money spent in terms of creating demand/consumer spending in the economy.

Second, the amount of the bill that comes in tax cuts leaves the spending side of the bill really small -- judged by the standards of what most economists seem to think is necessary, like $400 billion over two years. So it's not just the logic of the tax cuts on their own merits but the degree they're beggaring the spending side of the ledger. (A lot of this just comes down to whether or not you buy into the Keynesian premise of the whole exercise, of course. But let me note for the record that there does seem to be a decent rationale for significant tax cuts in year one of the bill, since you need to get money into the economy rapidly and there may not be enough projects that can be started quickly. That leaves the question of why so much of it is also included in year two. I fear that may be the 'tell'.)

Third, and in some ways this is the most troubling. It would be far better on many counts to bring in substantial Republican support for this bill. And I don't just mean that in the BS sense in which President Bush usually meant it, which was to say essentially, 'Of course we'd like you to vote for exactly what we want. More the merrier. But if you don't want to vote for our ideal bill, tough luck.' No, I think there's a real logic in not going the 51 votes model President Bush followed. But Obama seems to be telegraphing that to a significant degree the fundamental structure of the legislation is being built around accommodating the concerns of Republicans -- members of a political party that are about as unpopular and weak as you can get at the moment. And that sounds a lot like he's negotiating with himself, something that will embolden opposition and invite Republicans to up the ante even further.

These are just leaks. We don't have details. Some are speculating that this is part of some global head fake by the Obama folks. I hope so. But put me down as very skeptical.

Obama's picks to help Eric Holder reclaim the Justice Department:

• David Ogden, Deputy Attorney General;

• Elena Kagan, Solicitor General;

• Tom Perrelli, Associate Attorney General; and

• Dawn Johnsen, Assistant Attorney General for the Office of Legal Counsel.

With the 9th day of the Israel-Gaza conflict done, there is little prospect for a cessation of the violence any time soon. And the Sunday morning talk shows had far more questions to offer than solutions to the crisis ...

Full-size video at TPMtv.com.

Al Franken's big recount win becomes official today -- but a quirk of Minnesota law means his victory can't be certified just yet. That and the day's other news in the TPM Election Central Morning Roundup.

Here's a post on the WSJ's econ blog that you'll want to read just to get a better sense of the backstory and scope of the mess we're in.

Can someone help me come up with an argument for why the Obama stimulus plan isn't turning out to be a painful joke?

Thanks in advance.

(ed.note: I might even be serious. Not sure yet.)

(ed.note: Curious to hear what Krugman makes of this news.)

(ed.note: And now we have our answer. Krugman thinks it sounds pretty bad too.)

Shoulda kept the beard.

Al Franken, in tights, impersonating Mick Jagger. I'm just going to leave it at that.

Sen. Reid tells Coleman to concede.

(ed.note: Not sure that's who Coleman's taking his advice from. But there you go.)

I'm going to dig more into the details on this tomorrow. But this is starting to sound like a pretty big chunk of the stimulus bill is aimed at garnering GOP support.

I really hope we're not putting the cart before the horse here.

And these refundable business tax cuts sound like they could easily turn out to be giveaways without having much tangible stimulus effect on the economy.

Can we finally get this new year started?

the Franken landslide?

Just as corporations that no longer run a profit have been known to resort to innovative financial instruments to hobble along in the absence of a working business model, it seems the woebegone Senate Republicans are looking to pioneer a novel and ingenious use of the filibuster to compensate, at least in part, for their present inability to win actual elections. Sen. Cornyn (R) of Texas is the head of the Republican senate campaign committee. And if he follows through on his promise, his caucus will actually use the filibuster not to stymie legislation but to prevent the Democrats from adding another senator (Al Franken) to their ranks.

With such innovations the possibilities really are endless.

As we reported last night, the Minnesota recount is now complete. And Al Franken won by 225 votes. The Canvassing Board is slated to meet tomorrow when they're expected to certify the result. Sen. Schumer (D-NY) just released a statement in which he, not surprisingly, said Franken is clearly the winner and that he should be seated -- notwithstanding whatever post-recount legal challenges outgoing Sen. Coleman (R-MN) might attempt. That sets up a probable fight with the Republicans since Sen. Cornyn (R-TX) has promised to filibuster any effort to allow Franken to take his seat.

Richardson bowing out as Commerce Secretary nominee, says NBC. The reason? Has to focus on the investigation from his time as NM governor.

One of the most hopeful developments in the American Jewish community over recent years has been the creation of J Street, the new pro-peace, pro-two state solution lobbying organization. In The Forward, Eric Yoffe, President of the Union of Reform Judaism attacked J Street's refusal to get on board with the Gaza attack. Here J Street responds.

Former President George H.W. Bush says his son Jeb should run for president -- but probably not right now, considering how many Bushes we've already had. That and other political news in today's Election Central Sunday Roundup.