U.S. Lays Down Terms for Auto Bailout

By Lindsay Chin

WASHINGTON — The White House on Sunday pushed out the chairman of General Motors and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid
The decision to ask G.M.'s chairman and chief executive, Rick Wagoner, to resign caught Detroit and Washington by surprise, and it underscored the Obama administration’s determination to keep a tight rein on the companies it is bailing out — a level of government involvement in business perhaps not seen since the Great Depression.
President Obama is scheduled to announce details of the auto package at the White House on Monday, but two senior officials, offering a preview on condition of anonymity, made clear that some form of bankruptcy — a quick, court-supervised restructuring, as they described it — could still be an option for one or both companies.
Mr. Obama’s auto industry task force, in a report released Sunday night assessing the viability of both companies and detailing the administration’s new plans for them, concluded that Chrysler could not survive as a stand-alone company.
The report said the company would get no more help from the government unless it can finalize a proposed alliance with the Italian automaker Fiat by April 30. It must also reduce its debt and health-care obligations.
If a deal is reached between Chrysler and Fiat, the administration says it would consider another loan of $6 billion to Chrysler.

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Bankers Pledge Cooperation with Obama

By Lindsay Chin

In Washington, thirteen chief executives met and pledged to cooperate with the administration’s efforts to shore up the banking industry and broader economy. Administration officials and bankers spent considerable time addressing the more charged issue of executive pay. Both sides addressed the fact that they must defuse Americans’ anger with the industry is the White House is to gain more public support for its recovery program. The concern began when millions of dollars in bonuses paid by companies such as American International Group. American International Group was the largest insurance company in the United States before it suddenly collapsed in September of 2008. The company was bailed out by the Federal Reserve and rescue packages amounted to $150 billion dollars. Many Americans were outraged by the $165 million in bonuses paid out on Marsh 15th. American International Group’s chief executive said that he had asked employees making more than $100,000 a year and who had shared in the bonus payout to give half the money back due to the public and political disgust at the whole idea. The President stated that the industry needs to show that they get it on the compensation issue. And at least two bank executives, Lloyd C. Blankfein of Goldman Sachs and Kenneth I. Chenault of American Express asked the president to provide a pathway for them to pay back the taxpayer money that their companies have received. Many companies are doing their best to help the economy. Many economists are unswayed by the crashing economy and so should Americans.

Source 1, Source 2, Source 3

Education Top Priority

Posted by: Lisa Crowley


Where should all of the money go?

President Barack Obama just recently passed a tax-and-spending bill of $819 billion. From this amount $125 billion is set aside for education. This is a sustainable amount seeing as the Federal government doesn’t usually get involved and leaves it to the local and state government. It is said that $20 billion is allocated for school and college renovations. As the economy is seeing layoffs the government is proposing another $79 billion to the states to help them avoid educational related layoffs. In addition, more than $2 billion would go to the Head Start program, which helps children in under developed areas stay on track, $13 billion to supplemental funding for high-poverty areas, and another $13 billion for special-education programs.

In addition to this $125 to improve the schools, Obama just passed a bill that will increase the States Children’s Health Insurance Program (SCHIP). The bill increases the coverage for only children’s health care to an additional 4 million which is on top of the 7 million already covered. What is the cost? Just $33 billion over 4 ½ years.

Obama is tackling the economic recession in many different directions so what is he doing about the housing market?

Obama has supposedly set aside between $50 billion and $100 billion to fight the foreclosures. However, they do not have a plan yet to stop the housing market from further downfall. It is a very complicated situation and they want to make sure they are putting the money in the hands that need it the most and can use it in the best way. A possible plan is making the mortgages cheaper and lowering the interest rates so homeowners will not foreclose. Also if an institution receives any funding from the program they will have to develop a foreclosure prevention program.

There is a lot of money being conjured up out of nowhere to rebuild the economy. I just thought that it was interest the amount of money that got passed for the education, $125 billion, and the money being set aside for foreclosures, $100 billion. The housing market and the sub prime mortgages is a main reason how the economy became today and there is more money improving the school right now. The housing is more prevalent issue at hand and more money should be allocated there than trying to fix up the buildings.


Sources:

http://thecaucus.blogs.nytimes.com/2009/01/14/house-passes-childrens-health-bill/
http://www.biztimes.com/blogs/milwaukee-biz-blog/2008/12/23/obama-administration-should-make-housing-market-a-top-priority
http://careerjournal.com/article/SB123315486943524321.html

Obama freezes White House salaries

Posted by: Stephanie King

President Barack Obama's first public act in office Wednesday was to institute new limits on lobbyists in his White House and to freeze the salaries of high-paid aides, in a nod to the country's economic turmoil.

Announcing the moves while attending a ceremony in the Eisenhower Executive Office Building to swear in his staff, Obama said the steps "represent a clean break from business as usual."
The pay freeze, first reported by The Associated Press, would hold salaries at their current levels for the roughly 100 White House employees who make over $100,000 a year. "Families are tightening their belts, and so should Washington," said the new president, taking office amid startlingly bad economic times that many fear will grow worse.

Those affected by the freeze include the high-profile jobs of White House chief of staff, national security adviser and press secretary. Other aides who work in relative anonymity also would fit into that cap if Obama follows a structure similar to the one George W. Bush set up.
Obama's new lobbying rules will not only ban aides from trying to influence the administration when they leave his staff. Those already hired will be banned from working on matters they have previously lobbied on, or to approach agencies that they once targeted.

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