INSIDE WASHINGTON: Taxpayers to get rude surprise--By STEPHEN OHLEMACHER, Associated Press Writer

Millions of Americans enjoying their small windfall from President Barack Obama's "Making Work Pay" tax credit are in for an unpleasant surprise next spring.

The government is going to want some of that money back.

The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.

But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time.

At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.

The Internal Revenue Service acknowledges problems with the withholding tables but has done little to warn average taxpayers.

"They need to get the Goodyear blimp out there on this," said Tom Ochsenschlager, vice president of taxation for the American Institute of Certified Public Accountants.

For many, the new tax tables will simply mean smaller-than-expected tax refunds next year, IRS spokesman Terry Lemons said. The average refund was nearly $2,700 this year.

But taxpayers who calculate their withholding so they get only small refunds could face an unwelcome tax bill next April, said Jackie Perlman, an analyst with the Tax Institute at H&R Block.

"They are going to get a surprise," she said.

Perlman's advice: check your federal withholding to make sure sufficient taxes are being taken out of your pay. If you are married and both spouses work, you might consider having taxes withheld at the higher rate for single filers. If you have multiple jobs, you might consider having extra taxes withheld by one of your employers. You can make that request with a Form W-4.

The IRS has a calculator on its Web site to help taxpayers figure withholding. So do many private tax preparers.

Obama has touted the tax credit as one of the big achievements of his first 100 days in office, boasting that 95 percent of working families will qualify in 2009 and 2010.

The credit pays workers 6.2 percent of their earned income, up to a maximum of $400 for individuals and $800 for married couples who file jointly. Individuals making more $95,000 and couples making more than $190,000 are ineligible.

The tax credit was designed to help boost the economy by getting more money to consumers in their regular paychecks. Employers were required to start using the new withholding tables by April 1.

The tables, however, don't take into account several common categories of taxpayers, experts said.

For example:
_A single worker with two jobs making $20,000 a year at each job will get a $400 boost in take-home pay at each of them, for a total of $800. That worker, however, is eligible for a maximum credit of $400, so the remaining $400 will have to be paid back at tax time — either through a smaller refund or a payment to the IRS.

The IRS recognized there could be a similar problem for married couples if both spouses work, so it adjusted the withholding tables. The fix, however, was imperfect.

• A married couple with a combined income of $50,000 is eligible for an $800 credit. However, if both spouses work and make more than $13,000, the new withholding tables give them each a $600 boost — for a total of $1,200.

There were 33 million married couples in 2008 in which both spouses worked. That's 55 percent of all married couples, according to the Census Bureau.

• A single college student with a part-time job making $10,000 would get a $400 boost in pay. However, if that student is claimed as a dependent on a parent's tax return, she doesn't qualify for the credit and would have to repay it when she files next year.

Some retirees face even bigger headaches.

The Social Security Administration is sending out $250 payments to more than 50 million retirees in May as part of the economic stimulus package. The payments will go to people who receive Social Security, Supplemental Security Income, railroad retirement benefits or veteran's disability benefits.

The payments are meant to provide a boost for people who don't qualify for the tax credit. However, they will go to retirees even if they have earned income and receive the credit. Those retirees will have the $250 payment deducted from their tax credit — but not until they file their tax returns next year, long after the money may have been spent.

Retirees who have federal income taxes withheld from pension benefits also are getting an income boost as a result of the new withholding tables. However, pension benefits are not earned income, so they don't qualify for the tax credit. That money will have to paid back next year when tax returns are filed.

More than 20 million retirees and survivors receive payments from defined benefit pension plans, according to the Employee Benefit Research Institute. However, it is unclear how many have federal taxes withheld from their payments.

The American Federation of State, County and Municipal Employees union raised concerns about the effect of the tax credit on pension payments in a letter to Treasury Secretary Timothy Geithner in March.

Geithner responded that Treasury and IRS understood the concerns and were "exploring ways to mitigate that effect."

Rep. Dave Camp of Michigan, the top Republican on the tax-writing House Ways and Means Committee, said Geithner has yet to respond to concerns raised by committee members.

"So far we've got the, 'If we don't address this maybe it will go away' approach," Camp said.

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On the Net:
IRS withholding calculator:
http://tinyurl.com/3eorb

House passes credit card bill that helps consumers--By MARCY GORDON, AP Business Writer

Riding a crest of populist anger, the House on Thursday approved a bill to restrict credit card practices and eliminate sudden increases in interest rates and late fees that have entangled millions of consumers. The legislation, dubbed the Credit Card Holders' Bill of Rights, passed by a bipartisan vote of 357-70 following lobbying by President Barack Obama and members of his administration.

The measure would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18.

If they become law, the new provisions won't take effect for a year, except for a requirement that customers get 45 days' notice before their interest rates are increased. That would take effect in 90 days.

Similar legislation is before the Senate, where its prospects appear promising.

Consumer advocates and some Democrats have unsuccessfully sought for years to bring new rules to the industry.

"A big vote in the House will create an even bigger momentum as it goes to the Senate," House Speaker Nancy Pelosi told reporters.

Supporters want to put a final congressional package under Obama's eager pen by the Memorial Day holiday. They acknowledged, though, that House passage of the measure was an opening salvo and a lengthy legislative slog lies ahead, in which industry interests could prevail in getting restrictions weakened.

"The administration supports Congress' efforts to ... provide additional strong and reliable protections for consumers that ban unfair and abusive practices," the White House said in a statement following the House vote. "The nation's credit card system must have more accountability, including more effective oversight and more effective enforcement of credit card issuers who violate the law."

Obama's engagement in the issue diverged sharply from his handling of a plan to spare hundreds of thousands of homeowners from foreclosure through bankruptcy, which met defeat in the Democratic-controlled Senate Thursday on a 45-51 vote. Obama had embraced the plan, but facing stiff opposition from the banking industry, he did little to pressure lawmakers who worried it would encourage bankruptcy filings and catapult interest rates higher.

Before approving the credit card bill, the House adopted a series of amendments — some of which were pushed by the White House — that amplified the restrictions on industry practices.

The House measure incorporates Federal Reserve regulations due to take effect in July 2010 but goes further by adding restrictions for credit cards for college students as well as other changes. Payments made by card holders that exceed the minimum monthly level would have to be applied first to the portion of the remaining balance with the highest interest rate, and then to any other balances in descending order.

Consumers would have to be notified 30 days before their accounts are closed.

Double-cycle billing eliminates the interest-free period for consumers who move from paying the full balance monthly to carrying a balance.

Opponents tried vainly on the House floor to temper a fast-moving bill with amendments that would have given credit card issuers some openings to raise rates within the proposed restraints.

"We shouldn't take credit opportunities away," said Rep. Jeb Hensarling, R-Texas. "I just want consumers to have choices. I want there to be a competitive marketplace."

Hensarling and other Republican opponents endorsed the bill's requirements for clearer disclosure in the fine print of credit card agreements. But they said the legislation overall could prompt lenders to restrict credit in an already tight market to compensate for the new requirements.

That's the leading argument made by banking industry executives against the legislation.
Edward Yingling, president and CEO of the American Bankers Association, said the group "strongly believes that any additional legislative efforts should strive to achieve the right balance between enhancing consumer protection, and ensuring that credit remains available to consumers and small businesses at a reasonable cost."

"We continue to believe that more work needs to be done to achieve that balance," he said.
Supporters of the bill also drew on the economic crisis to make their case.

"Americans deserve a fair shake," said Ed Perlmutter, D-Colo. The credit card industry "has taken advantage of millions of vulnerable Americans."

Rep. Carolyn Maloney, D-N.Y., the bill's chief sponsor, said the changes were needed because "many people are turning to their credit cards because they have lost their jobs."
Boosters of the bill are tapping into rising public anger over corporate excesses and the conduct of banks and other companies receiving billions of dollars in taxpayer money.

"At a time when millions of families continue to struggle to make ends meet, additional safeguards are needed to ensure consumers are not being saddled by questionable industry practices," the powerful AARP, the lobbying group representing seniors, said in a statement supporting the bill.

Obama met at the White House last week with executives of the credit card industry and made clear he wants to sign a bill into law. He reaffirmed it as a priority at his prime-time news conference Wednesday evening, saying legislation was a must to protect consumers from "abusive fees and penalties."

The administration is advocating stricter practices that could crimp banks' revenue at the same time the government is shoring up the financial institutions with hundreds of billions of dollars in bailout aid.

The credit card changes could cost the banking industry more than $10 billion a year in interest payments, according to a study by the law firm Morrison & Foerster.

Amid the recession and rising job losses, consumers — even those with strong credit records — have been defaulting at high levels on their credit cards. Banks already battered by the mortgage and credit crises have been bleeding tens of billions in red ink from the losses.

U.S. credit card debt has jumped 25 percent in the past 10 years, reaching $963 billion in January, according to figures from the White House. The average outstanding credit card debt for households that have a card was $10,679 at the end of 2008, according to CreditCard.com, an online market.

___
House bill: H.R.627
Senate bill: S.235

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On the Net:
http://thomas.loc.gov/

Senators want to expel junk food from U.S. schools--By Christopher Doering Christopher Doering

U.S. schools with vending machines that sell candy and soda to students could soon find the government requiring healthier options to combat childhood obesity under a bill introduced on Thursday by two senators.

While school meals must comply with U.S. dietary guidelines, there are no such rules on snacks sold outside of school lunchrooms. Many are high in fat, sugar and calories.

Senators Tom Harkin and Lisa Murkowski said their bill would allow the U.S. Agriculture Department to establish "common-sense nutrition standards" for food and beverages sold in school vending machines, stores and similar outlets.

Harkin, an Iowa Democrat, chairs the Senate Agriculture Committee, which oversees school lunch and breakfast programs that cost an estimated $11 billion a year in federal money.

U.S. child nutrition programs such as school lunches and the Women, Infants and Children feeding program are due for renewal this year. An Agriculture Committee spokesman said one option would be to include the legislation introduced today as part of the broader reauthorization later in 2009.

"Poor diet and physical inactivity are contributing to growing rates of chronic disease in the United States," said Harkin, a Democrat. "We must take preventative action now."

An estimated 32 percent of U.S. children fit the government's definition of being overweight and 16 percent are considered obese, at risk for serious health problems. Murkowski, a Republican from Alaska, said the bill was a response to "the youth obesity epidemic."

Harkin and Murkowski have offered similar legislation in prior years. The measure could have a better chance of passing this year with U.S. President Barack Obama's administration recognizing obesity as a top U.S. health threat.

Consumer and health advocacy groups including the American Dietetic Association, American Heart Association and the Center for Science in the Public Interest support the legislation.
Reginald Felton of the National School Boards Association said states and local communities should determine what is sold beyond federal programs because a "one-size fits all policy" would not sufficiently address the needs on a smaller level.

He also noted that some schools rely on snack sales to help cover costs.

"It's intrusive for the federal government to establish requirements beyond the programs that they fund, particularly when states are addressing the issue," said Felton. "If local boards want to restrict they should."

(Reporting by Christopher Doering; Editing by David Gregorio)

Obama's 12 Most Important Decisions in His First 100 Days

Introduction
President Obama has been remarkably busy since he took office in January, making a series of important decisions that have, in some cases, moved the nation in a new direction from the past eight years. Whether the impact will be good or bad, here are the 12 decisions that helped shape Obama's first 100 days and could shape history.—Kenneth T. Walsh

1. The Economic Stimulus
Obama let congressional Democrats take the lead in writing the $787 billion economic stimulus package rather than submitting his own bill—a key tactical move designed to get a fast legislative victory and overcome nearly unanimous Republican opposition.

2. The Bailouts
Amid a meltdown of the financial industry, Obama moved quickly to bail out some of the nation's biggest banks and investment houses and to rescue major automakers.

3. Healthcare Overhaul
Despite the economic crisis, Obama announced his goal of quickly overhauling the healthcare system, even if it risks overloading the political system with big-ticket priorities.

4. Withdrawal From Iraq
Even though Obama promised during the campaign to withdraw troops from Iraq in 16 months, he changed the timeline to within 19 months of his taking office.

5. Sending Troops to Afghanistan
Obama announced he would send about 30,000 more troops to Afghanistan to fight terrorism.

6. Closing Guantánamo
Obama set the goal of eventually closing the detention facility for suspected terrorists at Guantánamo Bay, Cuba, which has been the site of prisoner abuse and has caused international embarrassment for the United States.

7. Cuba Policy
Fulfilling a campaign promise, Obama relaxed travel and financial restrictions on Cuban-Americans relating to Cuba.

8. Stem Cell Research
Obama reversed the Bush administration policy on federally funded stem cell research, angering some conservatives.

9. Harsh Interrogation
The new administration banned harsh interrogation techniques used under the Bush administration in questioning suspected terrorists. Some have called those techniques torture. Later, Obama released memos detailing the methods used under the Bush administration.

10. Cabinet Nominations
While building his administration, Obama botched some cabinet nominations, notably former Sen. Tom Daschle to be secretary of health and human services and informal healthcare reform "czar." Daschle's background was inadequately scrutinized, and he withdrew from consideration.

11. Clinton Aides
Despite his call for bringing "change" to Washington, Obama brought former advisers to President Bill Clinton back into the government, including former first lady and Sen. Hillary Clinton as secretary of state and former Treasury Secretary Larry Summers as chief White House economics adviser, thus choosing experience over change.

12. Somali Pirates
After Somali pirates took an American captain hostage, Obama authorized Navy SEALs to kill three pirates who were holding the American in a lifeboat off the coast of Somalia. The hostage, Richard Phillips, was rescued, and the incident demonstrated Obama's resolve.

Obama and Race Relations: Civil Rights Leaders Aren't Satisfied--By Justin Ewers

It took a remarkably long time before someone finally popped the question. At a press conference in March, two months after he had moved into the White House, Barack Obama was asked for the first time to describe how his race has affected his presidency. [See 'Obama's 12 Most Important Decisions']

Much as he had immediately after the election, when the chattering classes were gripped by speculation that the first black president might herald in a new, post-racial future, Obama refused to give in to flights of fancy. "At the inauguration, I think there was justifiable pride on the part of the country that we had taken a step to move beyond some of the searing legacies of racial discrimination in this country," Obama said, acknowledging how much his historic move to Washington had seemed to elevate the political discussion. "But that lasted about a day." [See behind the scenes photos of the Obamas]

For some, the thrill of seeing a black man in the White House has lasted a little longer. Benjamin Jealous, the recently elected president of the NAACP, says he still gets a jolt every time he walks through the security screening station in the lobby of the Department of Justice and sees photographs of Obama and the new attorney general, Eric Holder, hanging on the wall. "We're used to seeing black men's faces in the windows of post offices or on wanted posters, not in a photograph of the president and the attorney general," says Jealous. "It's all very bewildering."[Read 'Obama's Renewed Fight for Civil Rights']

A weekly community service night organized by Jesse Jackson's Rainbow PUSH Coalition in Chicago is just one of many black community gatherings throughout the country where morale went through the roof this winter. "There's been an emotional change in the group since Obama took office," says the Rev. Gregory Livingston, the coalition's national field secretary. As they have for years, a few hundred people continue to arrive every Monday looking for guidance on what to do about foreclosed homes or lost jobs. "Have their numbers changed? No," says Livingston. "But you can see it in their faces. There's a smile in their voices. They're just much more hopeful."

If there is any consensus among black leaders about the initial impact of the first black president, this seems to be it. Seeing the Obama family in the White House and watching Obama conduct himself on the world stage continue to give civil rights advocates, and many voters, a regular emotional boost. But as Obama's first hundred days came to an end, with little having changed in most people's daily lives, the first questions began to be asked about whether his presidency has had any substantive effect on lingering racial inequality.

One step back. As they have in the past, African-Americans are suffering more than most through the economic downturn: They are twice as likely as whites to be unemployed and three times as likely to live in poverty. Racial tensions, in spite of all the high-flown talk in the fall, have shown little sign of fading. Only a few weeks before Obama took office, the city of Oakland, Calif., was gripped by riots after a white transit officer killed an unarmed black man. Two months later, protesters took to the streets again when four Oakland police officers were murdered by a gun-wielding black parolee. "Obama's inauguration was a day of transformative possibility," says Jealous. "But people wake up, and Dad's still out of work and Mom's still not getting paid enough and the kids' school is still an embarrassment. There's a collective anxiety that everything can change and nothing has changed, and it's resulted in some frustration." [Read '10 Winners in the Recession']

Among young black voters, in particular, researchers say there is a growing sense that, on matters of race, the country has taken two steps forward but may be poised to take a step back. Cathy Cohen, a professor of political science at the University of Chicago, spent the first few months of the Obama administration talking to focus groups of African-Americans under 35 about their conflicted reactions to the new president. After the election, three times as many young blacks as whites said they thought elections could bring about real change. But as time has gone on, day-to-day life has begun to cloud that enthusiasm. "If you ask them, 'How do you feel about Obama?' they're effusive, very proud," says Cohen. "But you ask them if they think Obama's election will impact their interactions with the police, and to a person, they say, 'Absolutely not.' They understand it doesn't trickle down to their lives." [Read '10 More Winners in the Recession']

For all the symbolism of Obama's position in the White House, he has not yet used his bully pulpit to take on the issue of race. On several occasions, in fact, the president has seemed to deliberately shy away from the subject. When Attorney General Holder picked up the reins this winter, chiding Americans for being "a nation of cowards" on racial matters, Obama pushed back firmly. "I'm not somebody who believes that constantly talking about race somehow solves racial tensions," he said.

There is general agreement among civil rights leaders that Obama doesn't need to wade into the fray in the same way that, say, Al Sharpton has in the past. But some are beginning to worry that it is conservatives, not civil rights groups, who are seizing the political moment, using the promise of "post-racialism" to try to scale back protections for minorities in the legal system. Race is a central issue in at least four Supreme Court cases in the next term, and there has been a growing chorus on the right demanding the repeal of everything from affirmative action to the Voting Rights Act now that a black man is in the White House. [See who's in Obama's inner circle]

Some civil rights leaders are frustrated by Obama's refusal to point out how little has actually changed for the average black person--and how much minorities are struggling in the down economy. Black borrowers, for example, were more than twice as likely as whites to receive subprime loans and are losing their homes to foreclosure at much higher rates. But Obama's public pronouncements on the housing crisis have rarely reflected this disparity. "It's not clear the administration has figured out how to engage the public on race," says John Powell, director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. "A lot of the people around Obama seem to think race is the third rail, and it's best to avoid it. Their major approach is 'We're going to do something for everybody.' But that's not really a solution."

In the weeks after Obama was elected, there was a wave of excitement over his selection of Holder to be the nation's first black attorney general, and civil rights groups cheered the number of African-Americans picked to join Obama's White House staff. But as the Obama administration has moved on to the business of governing, the first critics have emerged in the black community, some of whom point out that the first black president has made the same number of black cabinet appointments as Bill Clinton did--but without Clinton's intense focus on racial inequality.

After skimming over the issue of race in both his acceptance speech in November and his inaugural in January, Obama hasn't given a major speech on race since last year. Even then, for all his eloquence, Obama was forced to speak out, these critics say, because of the controversy over the inflammatory sermons of his former pastor, the Rev. Jeremiah Wright. "There's a whole lot of space between always talking about race and never talking about race," says Michael Fauntroy, an assistant professor of public policy at George Mason University. "The only time he's ever talked about race was when his campaign was in a sling. There's a reticence on his part that I think is worrisome."

The Obama administration has taken some steps to allay these concerns, pushing legislation on workers' rights and opening a new office for urban affairs inside the White House. Still, some black leaders are beginning to grumble that the list of things Obama has not done is much longer. "If he can immediately say, 'I'm sending 30,000 troops to Afghanistan,' he can immediately do some other things, too," says Kevin Alexander Gray, a civil rights veteran who was Jesse Jackson's South Carolina campaign organizer in 1988. "Black folks are afraid to go after Barack Obama because there's such a love fest, but where's the urban plan? You haven't seen it. A white person who was in office would have to talk about disproportionate poverty. It's not his fault, but it's starting to be his fault."

Obama has been in office only a few months, of course, and even the most impatient civil rights leaders agree on at least one thing: They want him to succeed. But as the first black president moves on to his next hundred days, there seems to be an increased willingness to hold him to his own high standards. "People are still coming up to me and saying they've been inspired by Obama. But they want the change to be real. That's what people are most eager for," says Jealous. "Life hasn't changed that much, but expectations are higher."

As time goes by, they seem likely to get higher still.

100 Day Silliness--By Earl Ofari Hutchinson

Then Democratic Presidential contender Barack Obama did a prescient thing last October. He told an interviewer on a Colorado radio station that he thought the first 1000 days not the first 100 days would make the crucial difference for his presidency. Candidate Obama directly parodied the line from JFK’s inauguration address in 1961. Kennedy proclaimed the first 1000 days as the better time frame to measure how effective or bumbling an administration is. Obama and JFK were wise to cite the much longer time frame. They sought to damp down the wild public expectations that they can work quick magic and miracles in no time flat.

Obama is well aware that the 100 days burden weighs heavier on him than any other president in modern times. He’s young, liberal, untested, and black. There are still deep doubts, suspicions and loud grumbles from some about his competency and political savvy. The Mt. Everest stack of op-eds, news articles, pictorials, websites, chatrooms, national viewer polls and surveys, and CNN and MSNBC specials will dissect, peck apart his words and initiatives for the first 100 days, and nag everyone else to do the same. That put even more pressure on to show he’s a tough, resolute, effective leader.

Obama in his quip to the Colorado radio interviewer knew the silliness of fixating on the drop in the bucket 100 day time span to brand a president and his presidency as a stunning success or a miserable flop. A quick look at the presidency of his two immediate predecessors is enough to prove that. Clinton bombed badly in pushing Congress for a $16 billion stimulus package; he bungled the don’t ask, don’t tell policy regarding gays in the military, and got the first flack on his health care reform plan. Yet, the Clinton presidency is regarded as one of the most successful, popular and enduring in modern times.

Then there’s the Bush presidency. He got off to a fast start. At the 100 day mark in April 2001, his approval ratings matched Obama’s. He was widely applauded for his trillion dollar tax cutting program, his "Faith-Based" and disabled Americans Initiatives, and for talking up education, health care reform and slashing the national debt. But aside from the momentary adulation he got after the 9/11 terror attack his presidency is rated as one of the worst in modern times.

The 1000 day mark that Obama, Kennedy and other presidents have cited as the more realistic time frame is not an arbitrary number. That marks the near end of a president’s first White House term. The honeymoon is over, and the president has fought major battles over his policies, initiatives, executive orders, court appointments and programs with Congress, the courts, interest groups and the media. Battles that by then have been won or lost, or fought to a draw, and there’s enough time to gauge their impact and the president’s effectiveness.

The other big problem with the whimsical 100 day fixation is that it can force a president, in this case Obama, to feel that he must move sprint out the gate to fulfill campaign promises, pass legislation, and burnish up his media and public credentials as a top leader. This carries risks; risks of acting too hastily and making missteps that invite intense criticism.

Obama’s dash to padlock Guantanamo, announce big sweeping plans for health care, financial and banking regulation reform, his much ado about nothing handshake with Hugo Chavez, his outstretch to Iran, and Cuba, and hint at dumping nuclear weapons from the world’s arsenals has drawn heat fire from the right that he’s a reckless tax and spend, debt burdening, free market wrecker, and enemy conciliator. His mixed signals on prosecuting CIA torture cases and retaining virtually intact the faith based initiative, and ladling out billions to the banks have drawn heat from the left that he’s a backslider and Beltway politician.

Obama, though, is no different than other every other president modern era. He is pulled and tugged at by corporate and defense industry lobbyists, the oil and nuclear power industry, government regulators, environmental watchdog groups, conservative family values groups, moderate and conservative GOP senators and house members, foreign diplomats and leaders. They all have their priorities and agendas and all vie for White House support for their pet legislation, or to kill or cripple legislation that threatens their interests. They’ll applaud him when they get their way and bash him when they don’t.

Obama did another smart thing in his first presidential interview with 60 Minutes in November. He told the interviewer that he took a close look at FDR’s first 100 days and he was struck not by the avalanche of legislation and programs that FDR rammed through Congress his first 100 days but his willingness to do things that were different and that made lasting change. This will take far more than 100 days for that to happen and for it to be remembered.

Earl Ofari Hutchinson is an author and political analyst. His weekly radio show, “The Hutchinson Report” can be heard on weekly on Fridays 9:30 to 10:00 AM in Los Angeles on KTYM Radio 1460 AM and nationally on ktym.com and blogtalkradio.com

Analysis: Auto deal extends Obama's reach, risk--By JIM KUHNHENN, Associated Press Writer

In forcing a swift bankruptcy on Chrysler, President Barack Obama expanded the risk and reach of the presidency in the hope that the hidebound auto industry will find a way to remake itself.

The government's intervention with Chrysler LLC and General Motors Corp. has been far more intrusive than the way it has confronted troubled financial companies. The administration's influence now ranges from guaranteeing your brake pads to pushing for new products on the assembly line.

As Obama himself put it, "If the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same."

Despite an additional $8 billion taxpayer infusion into Chrysler, the president and his advisers say the administration has no desire to be in the auto business. And they say they don't intend to micromanage the company.

But as part of Thursday's arrangement, the government will be an investor in the new Chrysler company, and the Treasury Department will select four of its new directors, all of them presumably sympathetic with the White House's vision of what the car of the future should be.

In cutting the deal, Obama buys himself good will with an important labor force, especially in a state, Michigan, suffering hugely from unemployment. At the same time he gets to push a key policy goal, fuel-efficiency, not just as president but as a powerful company investor.

But he also is putting billions of dollars of taxpayer money at risk at a time of rising anxiety about government bailouts and soaring deficits.

Even before he got to this point, Obama had exerted unprecedented power. He rejected Chrysler's and General Motors' restructuring plans last month and forced GM's CEO, Rick Wagoner, to resign. At Chrysler, too, chief executive Robert Nardelli said Thursday he is going to leave when the bankruptcy is complete.

General Motors still has another 30 days to restructure itself, and its stakeholders may well take a lesson from the administration's dealings with Chrysler.

When Obama was not leveraging industry behavior with taxpayers' money, he was using the pulpit of the presidency to make his wishes known in no uncertain terms. In announcing the deal Thursday, he left no doubt about his anger with some Chrysler creditors who refused to accept a reduced payout for their investment.

"They were hoping that everybody else would make sacrifices, and they would have to make none," he said. "I don't stand with them."

Administration officials said they tried to sweeten the offer Wednesday night to attract more creditors, to no avail.

That could be an effort to nudge a bankruptcy judge to be tough with recalcitrant stakeholders. And by showing a willingness to stand up to some Chrysler creditors, Obama was also sending a signal to GM bondholders not to hold out for too great a return.

His tone also carried the same populist strains that he used when he railed against Wall Street bonuses.

"He's invested in terms of the taxpayers' investment, and he's invested in it politically," said Sen. Carl Levin, a Michigan Democrat who had initially objected to bankruptcy as a way to restructure the company.

While the political risks are potentially great, taking Chrysler through bankruptcy buys some short-term political running room.

For months, Republicans and some Democrats have said a Chapter 11-protected restructuring was the proper fate for the automakers. By Thursday, some past critics of bankruptcy such as Levin were hailing the deal as a new birth for Chrysler.

What's more, the public appears to tilt in favor of government interventions, at least so far. A FOX News/Opinion Dynamics Poll in March found 43 percent of respondents saying the government under Obama was taking an appropriate role in running U.S. companies. Thirteen percent said the administration was not taking a big enough role.

Despite the stigma often attached to bankruptcy, Obama took pains to portray it as a positive development. "This is not a sign of weakness," he insisted, "but rather one more step on a clearly charted path to Chrysler's revival."

To be sure, the administration's day-and-night involvement with the auto industry does not match its attempts to rescue financial institutions. That's partly because the automakers have made a desperate pitch for a government bailout, while some of the biggest financial institutions have been less enthusiastic in their desire for help.

Many major banks now say they want to return their share of a $700 billion financial rescue fund, in part to avoid restrictions that the government has imposed or threatened to impose.

At the same time, the government has always been able to influence banking behavior through regulation. And that's where Obama says he intends to address the industry's excesses. Still, banks can fight back in ways that automakers can't. On Thursday the banking industry succeeded in defeating a Senate proposal that would have let homeowners seek foreclosure relief through bankruptcy court.

So far, the two Detroit car companies are only asking how high Obama wants them to jump.

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EDITOR'S NOTE — Jim Kuhnhenn covers the economy and politics for The Associated Press.

Can Alabama Spark a Democratic Revival in the South?--By Steven Gray / Rainbow City

Late on a recent Monday afternoon, Artur Davis, the Alabama congressman, stood before a racially diverse crowd of casually dressed men and women in the vast main hall of Rainbow City's community center. The talk centered on how to bring jobs to Alabama's economically depressed northeastern corner, bolstering parental responsibility, making college more affordable, and, simply, hope. Five months earlier, Davis won reelection to a fourth term representing Alabama's 7th Congressional district, which includes the hub of the state's once-robust cotton industry. Now, he has begun his campaign to win the governor's office in Alabama in 2010 — and to usher in a Democratic revival in the South.

Davis' candidacy is a distinctive part of a coming electoral test. Between now and November 2010, in fact, nearly 40 of the nation's governor's seats will be up for grabs. One of the most intriguing battlegrounds will be the South, where Republicans dominate the governorships, 6-to-5. Democrats are emboldened by Barack Obama's victory last November, particularly in Southern states like Virginia, North Carolina and Florida — wins achieved partly because of high participation by those states' large black electorates, as well as the infusion of relatively affluent transplants who aren't beholden to the region's old-school political regimes. Now, of course, the Republican Party is struggling to move beyond its base of rural Southern white Protestants and into the Midwest and Northeast. So the governor's races quickly taking shape in Virginia, South Carolina, Georgia and in Alabama will be key tests of whether the Democrats can extend their recent gains. (Watch a video where Artur Davis and others discuss who should be TIME's 2008 Person of the Year.)

If elected, Davis would lead the Confederacy's first capital, Montgomery, where Alabama's best-known governor, George Wallace, in his 1963 inaugural address, called the state the "Cradle of the Confederacy," the "very Heart of the Great Anglo-Saxon Southland," and declared, "segregation now...segregation tomorrow... segregation forever." Davis' election would deliver another blow to what remains of the G.O.P.'s racially divisive Southern Strategy. He would also be only the third black elected governor in American history, the second from the South. Is Alabama ready for that much change? (See a graphic presentation of the American Civil War.)

Davis, 41, is keenly aware that much of his bid's appeal — and challenge — lies in his personal narrative. That's why he began his recent talk in Rainbow City, before the audience of a couple of dozen people, with a familiar anecdote. On the day before Easter Sunday, 1977, he tells the audience, his single mother, a high school teacher, brought him to Alabama's state capitol for the first time. He was awed by the place. "I never could have imagined, growing up in West Montgomery, I'd ever have a chance to travel beyond that neighborhood, much less have a chance to serve as governor of this wonderful state. I can confidently tell y'all," he continues, "I was born where both sides of the track were wrong."

What he does not mention, though, are details of his story that mark him as firmly part of the elite. He attended Harvard for both undergraduate and law school, where Barack Obama was a couple years ahead. Davis eschewed joining a New York or Washington law firm, and became a federal prosecutor, frequently handling drug cases. In 1998, he joined a prominent Birmingham law firm, Johnston Barton Proctor & Powell, where he specialized in employment and white-collar criminal cases.

The following year in Davis' life was instructive for the fledgling politician. Then just 31, Davis announced plans to challenge Earl Hilliard Sr., the first African-American elected to Congress from Alabama since Reconstruction. Davis was largely dismissed as an upstart who hadn't paid his dues by winning a lower-tier office. Despite being hailed by the Birmingham News as a "leader for the future," Davis lost. He attributed defeat to having raised barely $100,000. The next time he ran, in 2002, Davis had become adept at raising money, benefitting from donations from American Jewish groups concerned about Hilliard's views on Israel. Much of the African-American political establishment derided Davis as an elitist whose polished demeanor, Ivy League credentials and prosecutorial record made him inauthentically black. But this time, he won. One of the first congratulatory calls he received came from Obama, then an obscure Illinois state senator plotting his own U.S. Senate bid. Though they were among a handful of black men at Harvard Law at the same time, the two men hardly knew each other.

Davis quickly proved himself to be a centrist Democrat — voting, for instance, for a 2006 bill to build a fence along the U.S.-Mexican border, a measure that divided Democrats. The previous year, he followed his party in supporting a bill to halt restrictions on federal spending on embryonic stem cell research. He also showed an independent streak: Even as much of Alabama's Democratic establishment, including its black caucus, backed then-Sen. Hillary Clinton in the state's Democratic presidential primary, Davis endorsed Obama. (Obama won.) In the days after Obama's victory last November, there was talk that Davis would be the President-elect's attorney general nominee. But Davis was already weighing other options. One was running for the U.S. Senate seat long held by Richard Shelby, a Republican. Or bidding to succeed Alabama's Republican governor, Bob Riley, who is barred from seeking a third term. "The easier course for me would have been to stay in Washington until the Senate seat comes open," Davis says. But, he says, the governor's seat carries considerably more influence on issues he is most interested in. Furthermore, this governor's race is the first in nearly a quarter-century that lacks an incumbent. "An open seat, by definition, means voters are going to vote in a prospective way. That kind of election" Davis adds, "is a good fit for me."

Many Alabama politicos were surprised by Davis' February announcement to run for governor. Some hoped he'd first prove he could win a mid-level statewide office. He scoffs at such talk, and says, "I didn't go to see people in Montgomery to get permission to run for governor, and I won't. I'm trying to get permission from the people I'm seeing today — the voters." Davis says he did not expect support from the state's Democratic establishment — and that helped him decide to announce his candidacy early. He needs as much time as possible to build a campaign apparatus. He certainly has a war chest to start building that operation: nearly $1.1 million.

Inside the Rainbow City center, Davis frequently, and comfortably, mentions God. He is a Lutheran, recently married to a follower of the African Methodist Episcopal faith; he often attends a Baptist church and he describes himself as "a true ecumenist." From the crowd, there are questions, like: How would Davis, as governor, help make health insurance more available to folks who barely make $15,000 a year? And, why is Alabama consistently ranked near the bottom of the nation's education achievement tests, and what would Davis, as governor, do about it? "We pat ourselves on the back when we move from 46 to 42 in education," he tells the audience, standing in front of a large blue sign that says, in white and red ink, DAVIS 2010. There are a couple "uh-huhs" and "hmmmms" from the crowd, as the candidate makes clear Alabamans need "more of a sense of ambition than we've ever had."

Then comes a trickier issue. Despite talk of a post-racial America in the Obama era, Davis is acutely aware that the issue of race remains, and that he must manage it deftly. And so he does, at times directly, from the podium. "People say to me, 'You know, what you're trying to do is kind of difficult, right?' They mean different things when they say that. But ladies and gentlemen, I'm going to let other people talk about what we're not ready for. Or what they think we cannot do. I trust the people of Alabama — to vote with their imagination, not their fears."
In a poll commissioned by Davis' campaign, 51% of respondents said they believe Alabama is "ready" to elect a black governor in 2010, and 38% said the state is not. Davis' supporters point to those figures as evidence the state has progressed significantly on matters of race. Peggy Wallace Kennedy, George Wallace's daughter, drew headlines recently for endorsing Davis, and says, "I believe he'll be one of the best governors we've ever had." Asked what her father would say about the prospect of a black governor, she adds, "He'd just say, 'It's the future,' and I think he'd be okay with it." (Read a 1992 TIME interview with George Wallace.)

Still, exit polls during the November 2008 election showed that only 10% of white Alabamans voted for Obama, compared with 19% for the 2004 Democratic presidential nominee, John Kerry. (John McCain won Alabama last November.) That's partly why many Republicans are salivating at the prospect of Davis winning his party's nomination. At the same time, says Glen Browder, a former Alabama Democratic congressman completing a book on the South's shifting racial politics, "a lot of Democrats are scared for Artur Davis to be the nominee," partly because Republicans will likely try to pounce on his connection to President Obama. Davis will find his toughest proving grounds in the state's largely white northern hill country. "They know his candidacy doesn't make sense in the context of Alabama's history," Browder says.

To succeed, Davis believes he must take several key lessons from Obama's campaign strategy of attracting a new crop of voters. "It's people like the young professionals — black and white — who come to me and say, 'I haven't felt that politics in this state spoke to me.'" Like Obama, Davis has overcome initial skepticism among many African-Americans. So he will certainly galvanize Alabama's black voters in much the way Obama did in last November's elections. Historically, Democrats running for statewide Alabama office needed roughly 90% of black voters, and about 40% of white voters in the general election in order to succeed. Davis believes he will need fewer white voters — if blacks show up at the polls.

The Alabama of 2009 is a far different place from 1963, and from 1994, when an African-American state Supreme Court Justice, Ralph Cook, was advised not to show his image in his election campaign advertisements so as not to draw attention to the fact that he was black. "Forget race," Davis says. "There are parts of the state where people haven't seen a Democrat in a while."

Specter’s Statement on His Decision to Switch Parties

The following is a statement from Senator Arlen Specter on his decision, after four decades as a Republican lawmaker, to switch to the Democratic party.

I have been a Republican since 1966. I have been working extremely hard for the Party, for its candidates and for the ideals of a Republican Party whose tent is big enough to welcome diverse points of view. While I have been comfortable being a Republican, my Party has not defined who I am. I have taken each issue one at a time and have exercised independent judgment to do what I thought was best for Pennsylvania and the nation.


Since my election in 1980, as part of the Reagan Big Tent, the Republican Party has moved far to the right. Last year, more than 200,000 Republicans in Pennsylvania changed their registration to become Democrats. I now find my political philosophy more in line with Democrats than Republicans.


When I supported the stimulus package, I knew that it would not be popular with the Republican Party. But, I saw the stimulus as necessary to lessen the risk of a far more serious recession than we are now experiencing.


Since then, I have traveled the State, talked to Republican leaders and office-holders and my supporters and I have carefully examined public opinion. It has become clear to me that the stimulus vote caused a schism which makes our differences irreconcilable. On this state of the record, I am unwilling to have my twenty-nine year Senate record judged by the Pennsylvania Republican primary electorate. I have not represented the Republican Party. I have represented the people of Pennsylvania.


I have decided to run for re-election in 2010 in the Democratic primary.


I am ready, willing and anxious to take on all comers and have my candidacy for re-election determined in a general election.


I deeply regret that I will be disappointing many friends and supporters. I can understand their disappointment. I am also disappointed that so many in the Party I have worked for for more than four decades do not want me to be their candidate. It is very painful on both sides. I thank specially Senators McConnell and Cornyn for their forbearance.


I am not making this decision because there are no important and interesting opportunities outside the Senate. I take on this complicated run for re-election because I am deeply concerned about the future of our country and I believe I have a significant contribution to make on many of the key issues of the day, especially medical research. NIH funding has saved or lengthened thousands of lives, including mine, and much more needs to be done. And my seniority is very important to continue to bring important projects vital to Pennsylvania’s economy.


I am taking this action now because there are fewer than thirteen months to the 2010 Pennsylvania Primary and there is much to be done in preparation for that election. Upon request, I will return campaign contributions contributed during this cycle.


While each member of the Senate caucuses with his Party, what each of us hopes to accomplish is distinct from his party affiliation. The American people do not care which Party solves the problems confronting our nation. And no Senator, no matter how loyal he is to his Party, should or would put party loyalty above his duty to the state and nation.


My change in party affiliation does not mean that I will be a party-line voter any more for the Democrats that I have been for the Republicans. Unlike Senator Jeffords’ switch which changed party control, I will not be an automatic 60th vote for cloture. For example, my position on Employees Free Choice (Card Check) will not change.

Whatever my party affiliation, I will continue to be guided by President Kennedy’s statement that sometimes Party asks too much. When it does, I will continue my independent voting and follow my conscience on what I think is best for Pennsylvania and America.

Kan. gets new gov after Sebelius goes to HHS--By JOHN HANNA

Lt. Gov. Mark Parkinson, wooed from the Republican Party three years ago by Democratic Gov. Kathleen Sebelius to become her running mate, became governor Tuesday when Sebelius resigned upon her confirmation as U.S. health and human services secretary.

Parkinson, a 51-year-old former Republican legislator and party chairman, has said previously he did not expect to make major policy or staff changes, and that he won't run for a full four-year term next year.

A letter of resignation Sebelius submitted Tuesday became effective with the U.S. Senate's 65-31 vote approving her appointment by President Barack Obama. Sebelius spokesman Seth Bundy said she was traveling to Washington to be sworn in.

The resignation automatically elevated Parkinson to the state's top elected office. He was to be formally sworn in by the Kansas Supreme Court's chief justice during a 7 p.m. CDT ceremony at the Statehouse.

Fixing the budget will be Parkinson's most pressing task as the state's 45th governor. He and legislators, who return Wednesday from a break, must eliminate a projected $328 million deficit in the budget previously approved for the fiscal year that begins July 1.

Many Republicans, particularly the leaders who control majorities in the House and Senate, view Parkinson has more approachable than Sebelius. Many legislators also wonder whether he'll inspire as much loyalty among fellow Democrats as she did.

Sebelius, 60, a former state insurance commissioner and state legislator, won her first gubernatorial election in 2002. She positioned herself as a centrist and successfully wooed moderate Republican voters, gaining national attention as she won two terms in a GOP-leaning state.

Parkinson is largely unknown outside Kansas. He's best known for his high-profile party switch, which left even some Democrats wary.

Parkinson served two years in the House and four in the Senate as a Republican in the 1990s, then left politics to start a nursing home company.

He served as state GOP chairman in 1999-2003, and during the 2002 campaign derided Sebelius' pick of a former Republican for a running mate as a gimmick.

Parkinson later became a Democrat at Sebelius' urging and joined her re-election ticket in 2006; he said he had been wrong about the governor.

GOP legislators were waiting to see how Parkinson would deal with the state's budget problems. Sebelius has tried to avoid cuts in education funding and advocated suspending some planned tax breaks, tapping gambling dollars and diverting funds from cities and counties to boost state revenues.

Like Sebelius, Parkinson opposes a proposal from Sunflower Electric Power Corp. to build two coal-fired power plants in southwest Kansas. Sebelius' administration denied the utility an air-quality permit in October 2007, and she vetoed four bills, including one this year, to overturn that decision.

The transfer of power marked the fourth time a Kansas governor has resigned before his or her term has expired — but the first in which a governor left early to join a president's Cabinet.

On the Net:
Kansas governor: http://www.governor.ks.gov

BLACK AMERICANS HAVE GREATER SENSE OF URGENCY ABOUT HIV/AIDS THAN OTHER RACIAL/ETHNIC GROUPS

New national survey by the Kaiser Family Foundation provides insights into Black America's attitudes about HIV/AIDS

While concerns remain, changes in behavior among Black Americans offer reasons for hope.

Washington, D.C. April 28, 2009 Today's report by the Kaiser Family Foundation finding that Americans' sense of urgency about HIV/AIDS has fallen dramatically provides some insights into the AIDS epidemic in Black America. "This report, on the heels of last month's report by the D.C. office of AIDS showing a 4% HIV prevalence among Black residents in Washington D.C. provides some context for the AIDS epidemic in Black America", says Phill Wilson, CEO of the Black AIDS Institute. Last August, the Institute released a report finding that if Black America were a country on to itself, it would have the 16th largest epidemic in the world. "Many indicators of urgency and concern are moving in the wrong direction, including for higher risk groups," says Drew Altman, President and CEO Kaiser Family Foundation.

"There is good news and not so good news in this survey", says Wilson. "Fortunately, most of the not so good news we already knew and are working on. For example, while the percentage of Black Americans who have seen or read "a lot" or "some" about HIV/AIDS has declined, the decline is not as great as the decline in other groups. This is a tribute to the amazing job Black media is doing of keeping HIV/AIDS on the radar in Black communities. Unfortunately it also speaks to the fact that 58% of Black Americans know someone who is living with HIV/AIDS-38% of those they know are a family member or close friend.

Key findings of the survey include:

Black Americans believe we are not spending enough on the domestic AIDS epidemic and spending matters.
--68% of Black Americans believe the federal government is spending too little on the domestic AIDS epidemic and 57% believe the federal government is spending too little on the domestic AIDS epidemic compared to other diseases.
--Two thirds of Black Americans believe spending more on prevention and treatment would make meaningful progress toward ending the AIDS epidemic.

While there has been a decline in the sense of urgency about HIV in Black America. The sense of urgency remains high.
--65% of Black Americans feel AIDS is as urgent as or more urgent in Black communities today than it was a few years ago.
--34% of Black Americans believe we are losing ground in the fight against AIDS.
--51% of Black Americans are very or somewhat worried that they will become HIV positive, and 80% are worried that one of their children will get infected.
--Among Black Americans, aged 18 - 29, 40% are very or somewhat concerned about getting infected with HIV.

Black Americans are changing their behavior.
--67% of Black Americans have spoken to a doctor about HIV, and 68% have spoken to a partner.
--68% of Black Americans report having taken an HIV test compared to 57% Hispanics/Latinos, and 42% of whites.
--47% of Black Americans aged 18-29 have been tested in the last 12 months.

The Kaiser survey confirms what many Black AIDS activists have been saying for a while: We have a long way to go toward ending the AIDS epidemic in Black communities, but the stage has been set. Black people are responding to the AIDS epidemic more than ever before. If you take the Kaiser findings and combined them with lessons learned from the latest D.C. surveillance report, you have a road map-create a mass Black Mobilization focused on:

1. Increasing HIV testing
2. Increasing utilization of treatment
3. Increasing condom usage
4. Increase HIV knowledge
5. Decreasing concurrent relationships
6. Decreasing stigma

This new survey by the Kaiser Family Foundation is an important piece of the information puzzle needed to end the domestic AIDS epidemic. It illustrates how complex the HIV/AIDS epidemic is, especially in Black communities. It also helps us better understand where we need to focus our energies. With a new commitment from the Obama Administration, and new energy in Black communities, the time is right to see significant changes in the trajectory of the AIDS epidemic in Black America.

The Black AIDS Institute is the only national HIV/AIDS think tank in the United States focused exclusively on Black people. The Institute offers training and capacity building, disseminates information, interprets and recommends both private and public sector HIV/AIDS policy, and provides advocacy and mobilization from a uniquely and unapologetically Black point of view

Specter condemned Jim Jeffords' party switch in 2001--By Peter Nicholas

When the Vermont Republican became an independent, Specter lost a committee chairmanship in the Senate's resulting power shift. An angry Specter proposed a ban on such party switches.

Reporting from Washington -- When a Senate Republican left his party in 2001, elevating the Democrats to majority status, one member of the GOP was especially vocal about his displeasure: Arlen Specter.

Specter said then- Vermont Sen. Jim Jeffords' decision to become an independent was disruptive to the functioning of Congress. He proposed a rule forbidding party switches that had the effect of vaulting the minority to majority status in the middle of a congressional session.

"If somebody wants to change parties, they can do that," Specter said at the time. "But that kind of instability is not good for governance of the country and the Senate."

Now it is Specter switching parties, proclaiming himself a Democrat. While the move won't throw one party out of power, it could potentially hand the Democrats a 60-vote majority and deprive the GOP of the ability to block legislation through a filibuster.

Eight years ago, Jeffords' decision cost Specter his chairmanship of the Veterans Affairs Committee. Specter said at the time that he wanted the rule change to prevent a party switch that could decisively swing the balance of power in the Senate overnight, disrupting U.S. domestic and foreign policy.

He also said that Jeffords' move would put Senate staff members out of work as committee chairmanships changed hands, and that he had already seen "a lot of crying" among staff members worried about their future.

Donald Ritchie, associate Senate historian, said in an interview Tuesday that the Jeffords move "was terrifically disruptive. People had to move out of their offices and staffs had to change."

But Specter's proposal quickly ran into opposition. Democrats balked. Sen. Joe Lieberman (I-Conn.) called the proposal unconstitutional. (Lieberman would later leave the Democratic Party to become an independent.) The proposal was never adopted.

Ross Baker, a political science professor at Rutgers University in New Jersey, said the rule would have "deprived a senator of the free will to make a decision."

Specter's proposal, Baker said, was intended "to ingratiate himself with colleagues with whom [Specter] was on the outs" -- the Republicans. "That was one way he could do it. And it was received with the coldness it deserved."

In a statement today, Specter sought to draw a distinction between his party change and that of Jeffords, who did not seek reelection in 2006. Specter said that he would not necessarily vote in lock step with the Democrats.

"My change in party affiliation does not mean that I will be a party-line voter any more for the Democrats than I have been for the Republicans," he said. "Unlike Sen. Jeffords' switch, which changed party control, I will not be an automatic 60th vote."

peter.nicholas@latimes.com

How China, an Emerging Superpower, Will Test the Obama Administration--By Thomas Omestad

China's continuing rise as a likely future superpower will be an overriding feature of the foreign policy landscape that Barack Obama will need to maneuver through after Inauguration Day.

Though U.S. dealings with the world's most populous nation did not play a significant role in the 2008 presidential campaign, China's growing heft in international affairs—and its importance in the current global economic crisis—assure that such scant attention will not continue.

In a development unthinkable before Richard Nixon went to China in 1972, China has become a key partner of the United States. It remains under Communist Party rule but is running a mixed economy with plenty of room for capitalist enterprise, though not for what the West regards as political freedom.

The remaking of a once hostile relationship between Beijing and Washington constitutes one of the most significant diplomatic breakthroughs of modern times and means that Barack Obama will inherit a still-evolving partnership upon which American officials, consumers, and businesses have come to depend.

The gains from three decades of increasingly market-oriented reforms and historic growth of about 10 percent annually have ushered China onto the world stage. That partial transformation of a developing society was the subtext for the summer's Beijing Olympic Games. The event signified both Beijing's rising self-confidence and its willingness to carry on a measured opening to the world. "It was a watershed moment for China—their coming out to the world," says Derek Mitchell, a China specialist at the Center for Strategic and International Studies.

China now offers the world's fourth-largest economy and may surpass the size of the world's biggest economy (America's) by 2027, according to a Goldman Sachs study. It has become a key supplier of affordable manufactured goods to America and other developed countries, netting in the process the world's largest holdings of foreign reserves, at $2 trillion. It also holds about $1 trillion in U.S. government debt, a posture that helps enable U.S. deficit spending and deepens the mutual interdependence. Its recent fiscal stimulus package is being touted as a lift for a sagging world economy. Says C. Fred Bergsten, director of the Peterson Institute for International Economics, "China will be at the center of the global economic system."

That economic clout is also being reflected in ways that could spur tension during the Obama White House years: China's defense buildup, its more active foreign policy, and its rapid push for trade, energy supplies, and aid deals everywhere from the Middle East and Africa to South America and Asia.

Still, U.S.-Chinese relations have moved to a far better place than where they seemed to be headed early in George Bush's presidency. He had called China a "strategic competitor." His first foreign policy crisis, in 2001, arose when a U.S. Navy reconnaissance plane collided in midair with a Chinese fighter, killing its pilot and triggering nationalist outrage in China. The American crew members were briefly held on China's Hainan Island, until a deal for their release was negotiated.

That outcome, along with China's support for the United States after 9/11, tempered the administration's initially hard-line instincts, and pragmatism took root. Ultimately, Bush visited Beijing four times, seeing in China a partner not only in the fight against terrorism but in trying to curb the nuclear ambitions of North Korea and Iran. U.S. policy was revised to encourage China to become a "responsible stakeholder" in international politics and economics, as its role expands.

Yet U.S.-Chinese ties will, in all likelihood, be tested at times in the Obama years. Beijing's human-rights record, along with its handling of problems in Tibet, will remain recurring issues, with Beijing essentially telling Washington to mind its own business. United States support for Taiwan will also remain an irritant, with China continuing to oppose arms sales for the island, which it regards as a breakaway province wrongfully separated from the motherland during the 1949 revolution.

Obama may also find resistance if he presses his calls for China to boost domestic consumption, change the way it uses energy, and allow its undervalued currency, the yuan, to rise.

But, like Bush, he appears to embrace the view that China's cooperation will be needed on a gamut of international issues: trade, restoring economic growth, addressing climate change, fighting terrorism and nuclear proliferation, and prodding states like Sudan and Myanmar to treat their citizens better.

What is less predictable is how China's Communist Party will continue to meet the rising expectations of an increasingly vocal population. It will have to contend with rising unemployment—and perhaps social unrest—amid the economic slowdown. And looming in the background, as always, will be the question of when and how political pressures will return to challenge one-party rule over such a dramatically changing society.

Obama may well find the Chinese more focused on their own problems than the world's.

No Longer the Forgotten War, Afghanistan Will Be a Hard One for Obama to Win--By Anna Mulrine

It wasn't long ago that Afghanistan was the forgotten war. But as U.S. troop deaths there dramatically overtook casualties in Iraq in 2008, the Pentagon has turned its attention to what senior military officials now like to call the longest campaign of the long war.

And it's not going to be easy to win. One top military adviser said recently that he was always convinced America could win in Iraq—but in Afghanistan, he's not so sure. The Taliban has made a heartbreaking comeback in much of the country. And Afghan President Hamid Karzai is steadily losing the confidence of his people and of much of the senior administration here as well.
On his watch, Karzai has been unable to banish corruption—a scourge that many Afghans view as their chief burden to bear in an unstable and increasingly violent country.

In the face of a weak central government, the Taliban has stepped in, creating shadow governments in remote and not-so-remote provinces. The Taliban moves in and doles out its unique form of brutal but bribery-free justice—and Afghan locals have been begging for some system of justice for more than half a decade now. The Taliban is also bulking up in provinces that border Kabul, where insurgents have threatened to "draw a noose" around the Afghan capital.

U.S. military leaders in Afghanistan stress that the Taliban has no chance of retaking or holding any part of the country where there are U.S. troops. But there are none to speak of in many parts of the country, including the embattled southern provinces of Helmand and Kandahar.
To remedy this, more U.S. troops are on the way, to the tune of at least 20,000 more by summer. And there could be even more, which would very likely double U.S. force strength throughout the country.

Reinforcements will first go to the provinces of Wardak and Logar, which border the capital, where they will be charged with fighting to retake the "ring road," the vital stretch of highway that connects Kabul to the key southern city of Kandahar. In 2008, the road saw a dramatic increase in roadside bombs, kidnappings, and brutal violence that included the beheading of truck drivers moving vital supplies, such as food and fuel, throughout the country.
U.S. troops will also be sent to the south, where the insurgency is reasserting itself with a great deal of success. U.S. marines fought hard for more than eight months there last year, but when they left, there were no troops to replace them. Military leaders are well aware that the military has no chance of winning hearts, minds, or territory if it cannot hold the areas it clears of insurgent forces.

But the Pentagon has also been quite vocal in pointing out that these troops will not be enough to win the war. The Department of Defense has repeatedly lobbied for a greater State Department role in rebuilding Afghanistan. On a recent trip to the region, Secretary of Defense Robert Gates publicly rebuked the United Nations, saying that the U.N. special envoy in Afghanistan had not been given the resources, "both people and money, that he needs to do his job." He also noted that NATO has left Afghanistan to "bear a disproportionate part of this burden" of war. "NATO is a military alliance. It's not a talk shop," he said.

But privately, U.S. military officials don't expect NATO partners to do much more fighting than they are doing now. Officials would like to see them get more involved in training Afghan national army and police units, however. Until such units are trained and can operate independently, U.S. forces cannot leave. But Gen. David McKiernan, the commander of U.S. forces in Afghanistan, estimates—conservatively, many analysts add—that it will be at least three to four years before this is possible.

This means that Afghanistan could occupy Barack Obama for the duration of his presidency. "This is a long fight, and I think we're in it until we are successful along with the Afghan people," Gates said on his recent visit to the region. "I do believe there will be a requirement for a sustained commitment here for a protracted period of time. How many years that is, and how many troops that is, I think nobody knows at this point."

The First 100 Days: Clinton and Ford Got Off to a Rocky Start--By Kenneth T. Walsh

Not all presidents are successful in their first days in office, but some are able to move past it

It's not a perfect measure, but it's a useful one—the 100-day standard for gauging presidential effectiveness. The underlying truth is that presidents tend to be most effective when they first take office, when their leadership style seems fresh and new, when the aura of victory is still powerful, and when their impact on Congress is usually at i ts height. There is nothing magic about the number, and many presidential aides over the years have complained that it is an artificial yardstick. But it has been used by the public, the media, and scholars as a gauge of presidential success and activis m since Franklin D. Roosevelt pioneered the 100-day concept when he took office in 1933. He was faced with the calamity of the Depression—and he moved with unprecedented dispatch to address the problem. "The first hundred days of the New Deal have served as a model for future presidents of bold leadership and executive-legislative harmony," Cambridge University historian Anthony Badger writes in FDR: The First Hundred Days. In this series, U.S. News looks at the most far-reaching 100-day periods in presidential history, starting with FDR.

Some presidents got off to a rocky start in their first 100 days.

Take Bill Clinton. He won an early victory by moving a $1.5 trillion budget outline through Congress, which was controlled by fellow Democrats. But Clinton's first 100 days in 1993 were also marked by a string of political setbacks and public-relations disasters.

They included his decision to allow gays to serve in the military under a "don't ask, don't tell" standard. This meant that the military would no longer ask if its members were homosexual, and individual soldiers wouldn't be expected to volunteer the information. The decision caused a huge stir, angering people on all sides of the issue, and they turned their ire on President Clinton. Some said he went too far; others argued that he didn't go far enough. The furor diverted public and media attention away from Clinton's larger priorities, including healthcare reform and passing a budget.

Clinton also ran into trouble in naming an attorney general, over winning congressional approval of an economic stimulus package, and over disorganization at the White House. Perhaps most important, he alienated many legislators by placing his wife, Hillary Rodham Clinton, in charge of healthcare reform and not adequately consulting Congress about her proposals. His opponents were able to portray the package as a massive government intervention, and the defeat of Mrs. Clinton's plan set back the cause of healthcare reform for years.

Clinton also got into hot water over new limits on news media access to senior communications aides and over the firing of the White House travel office staffers who were replaced with Clinton friends.

One of Clinton's problems, as assessed by his budget director, Leon Panetta, was that he needed to do "a better job of picking and choosing the battles he wants to go through." This is also a criticism of President Obama today—that he is piling too much on his plate and overloading Congress.

Of course, none of this turned out to be determinative. Clinton corrected most of the early problems and won re-election in 1996 over former Republican Sen. Bob Dole.

Another president who had early problems was Republican Gerald Ford. A man whose ambitions had been limited to climbing the leadership ladder in Congress, Ford was a member of the House of Representatives from Michigan from 1949 to 1973. President Richard Nixon made Ford his vice president after Spiro Agnew resigned amid a scandal. Ford was vice president for only eight months when Nixon resigned in August 1974 because of the Watergate scandal and Ford succeeded to the top job. "Our long national nightmare is over," the new president told the country at his swearing-in.

Ford spent his first days trying to use candor and openness to contrast himself with the secretive and suspicious Nixon, and he got off to a good start. The White House even released photos of Ford making his own English muffin for breakfast, and such images helped to reassure the country that Ford wasn't an imperial president like the man he replaced. Americans liked his down-to-earth qualities.

But Ford's honeymoon ended a month after he took over when, on September 8, he pardoned Nixon for any crimes related to the Watergate scandal. Ford believed that, with the nation facing serious economic problems and lingering difficulties in extracting itself from the Vietnam War, he needed to move past the Nixon furor. But the pardon turned congressional Democrats and many everyday Americans against Ford. Many thought he had been wrong to let Nixon off the hook, and many suspected he and Nixon arranged a deal—the presidency for the pardon. Ford always denied that.

Ford never recovered his popularity, and many historians think he doomed his presidency with the pardon during his first 100 days. He lost the 1976 election to Jimmy Carter.

The irony is that today, historians see the pardon in much more positive terms—as a legitimate move to heal the nation, which was Ford's explanation in the first place.

The First 100 Days: Reagan Pushed His Agenda of Tax Cuts and Less Government--By Kenneth T. Walsh

It's not a perfect measure, but it's a useful one—the 100-day standard for gauging presidential effectiveness. The underlying truth is that presidents tend to be most effective when they first take office, when their leadership style seems fresh and new, when the aura of victory is still powerful, and when their impact on Congress is usually at its height. There is nothing magic about the number, and many presidential aides over the years have complained that it is an artificial yardstick. But it has been used by the public, the media, and scholars as a gauge of presidential success and activism since Franklin D. Roosevelt pioneered the 100-day concept when he took office in 1933. He was faced with the calamity of the Depression—and he moved with unprecedented dispatch to address the problem. "The first hundred days of the New Deal have served as a model for future presidents of bold leadership and executive-legislative harmony," Cambridge University historian Anthony Badger writes in FDR: The First Hundred Days. In this series, U.S. News looks at the most far-reaching 100-day periods in presidential history, starting with FDR. The series will run each week on Thursdays.

In November 1980, Ronald Reagan was elected president in a landslide over Democratic incumbent Jimmy Carter. Americans decided that the country, driven by economic distress and international embarrassment, needed a big change and that Reagan's conservative, government-is-the-problem philosophy was worth a try.

Reagan began with a whirl of activity. But it was different from Franklin D. Roosevelt's approach in 1933, in that the new president decided he had to set priorities and not load up the system with a plethora of bills, as FDR did during his first 100 days. Congress and the country were too divided to entrust a chief executive with the kind of extraordinary power to experiment that FDR had enjoyed, Reagan and his advisers concluded. As a result, Reagan decided to focus on economic issues first and foremost.

In February 1981, he sent to Congress what some political scientists called some of the most sweeping revisions of budget and tax policy ever attempted. The cornerstones of his plan were an across-the-board tax cut and an effort to reduce the size and growth of the federal government. Reagan had argued for years that government was getting too powerful and intrusive. This was his chance to convert his rhetoric into action, and that's what he did.

Assessing Reagan's 100 days in a U.S. News interview in 1981, political scientist Erwin C. Hargrove, author of The Power of the Modern Presidency, said, "I would give him an A—not necessarily in policy but certainly in political craftsmanship. Reagan has demonstrated, in a way that Jimmy Carter never did, that he understands how to be president. He knows that a president can deal with only a relatively small number of issues at a time. He also understands that his principal task is public leadership. Therefore, he has concentrated primarily upon economic policy and in particular on forming public opinion and developing working relationships with Congress."

In the first few weeks after Reagan submitted the proposals, they sparked enormous controversy and powerful opposition. Many critics said the president was trying to do nothing less than destroy Roosevelt's activist-government legacy from the New Deal. The critics also warned that Reagan was overestimating the revenue that his economic plans would generate and that this would set the stage for huge budget deficits later. Those warnings proved prescient, but at the time, frustrated Americans were ready to do things Reagan's way.

Reagan used his first 100 days very effectively to "undermine" his adversaries in Congress, says Princeton historian Julian Zelizer: "The president used the bully pulpit to overcome opposition among House Democrats [the Senate had gone Republican in the 1980 election], building support for the cuts. He gave a speech on television, urging citizens to write their legislators and tell them to support the cuts. House Democrats, now the sole base for the party in Washington, joined in once they saw the public pressure. In fact, they pushed for tax cuts of their own, which were rolled into the bill. . . . By the end of the bidding process, Reagan could claim victory on Capitol Hill, and his key legislation had drawn the support of his opposition."

What helped to change the dynamic, and greatly strengthened Reagan's hand, was a near tragedy—the attempt on his life by a disturbed publicity-seeker on March 30, a bit more than two months into his administration. John Hinckley's bullets, fired from a small crowd as Reagan was leaving a Washington hotel after a speech, nearly killed the 70-year-old president. But Reagan survived and, in the process, demonstrated grit, bravery, and a sense of humor.

"The shooting is probably what most Americans will remember about the 100 days," recalled former TV commentator Roger Mudd. "And because he performed under fire that day as if it had been in a movie, President Reagan made it difficult for all of us to think of him, ever again, as just another B-grade actor." Political scientist Richard Neustadt wrote in Presidential Studies Quarterly, "The Reagan case, so often cited as exceptional, is less different than it seems, although his gallant response to attempted assassination, coupled with his concentration on a nominally single target, the budget, and Democratic shock after losing the Senate, changed both public and congressional parameters for the time being."

What also helped Reagan was his powerful communication skills. As a former actor in the movies and on television, he was able to appeal directly to the public through frequent speeches and televised addresses from the Oval Office, and Americans quickly came to like him, even if many disagreed with his policies.

It took Reagan more than 100 days to get his program of tax cuts and less government through Congress, but he did succeed. And many historians say it was his first 100 days that paved the way, by enabling Reagan to bond with Middle America and show his determination to keep pushing until his program got through.

Why Obama Is Leaving the Reagan Era Behind When It Comes to Economic Policy--By Justin Ewers

When Ronald Reagan took office in 1981, he, too, referred to the fiscal crisis he inherited as "the worst economic mess since the Great Depression." After several years of sagging productivity and deteriorating confidence, millions of workers were unable to find jobs. The unemployment rate, climbing past 7 percent, was almost exactly the same as it was when Barack Obama was sworn in. Economists were fretting about the long-term consequences of the soaring national debt, then approaching $1 trillion.

While there was no Wall Street meltdown or housing crisis to confront, the Reagan-era economy, teetering on the brink of recession, was beset by another seemingly insurmountable problem: out-of-control inflation, which was making it difficult for workers to pay for goods and services. "If we get the economy in shape, we're going to be able to do a lot of things," Reagan wrote to a friend after defeating Jimmy Carter. "If we don't, we're not going to be able to do anything."

As similar as the economic challenges facing Reagan and Obama may sound, the fiscal solutions proposed by the two presidents could not be more different. In his first 100 days, Obama has gone on a Keynesian spending spree, raising taxes on the highest-income earners and pouring money into energy, healthcare, and a massive stimulus bill. Reagan took the opposite path during his first few months in office, pushing through the biggest tax cuts in history, while massively increasing the defense budget. [Take a quiz on presidents and their first 100 days.]

Mixed legacy. Politicians have been arguing ever since about which approach works better. Some pundits heralded Obama's election as the end of the "Reagan era," viewing his victory as a firm repudiation of Reagan's most recent disciple, George W. Bush. But it seems clear, after several months of bitter partisan politics, that the book is not closed on Reaganomics. "It's time for Washington to stop spending away our children's future," Jim DeMint, a Republican senator from South Carolina, said in a typical response to Obama's budget. Republicans in Congress suggested a Reaganesque array of tax cuts, instead. [Read a former Reagan chief of staff's thoughts on how Obama's first 100 days are Reaganesque.]

This lingering faith in trickle-down economics puzzles many historians, since Reagan's approach has had a decidedly mixed legacy. While Reagan's tax cuts may have helped pull the economy out of recession, they did not achieve most of their stated goals, and the huge deficits they caused contributed to the next crisis. "A lot of the time, we wish we had a clear score card with presidents, but we don't; we have a messy score card," says Julian Zelizer, a professor of history at Princeton. "That's definitely the case with Reagan."

When Reagan arrived in office in 1981, he certainly didn't believe his economic policies might someday be viewed with such skepticism. At the beginning of his first term, he was determined not just to get the economy back on track but to drastically reduce the size of the federal government. After taxes were cut, he predicted, economic activity would increase so much that tax revenues would go up, allowing the government to pay down the deficit--a radical new theory known as supply-side economics. [Read 'The First 100 Days: Reagan Pushed His Agenda of Tax Cuts and Less Government.']

With the help of conservative Democrats in control of the House, Reagan got his way, pushing a plan through Congress to cut the highest marginal tax rate from 70 percent to 50 percent and, over the next five years, all the way down to 28 percent. Reagan never made an equally substantive effort to cut spending, though, and when Congress approved several massive increases in the defense budget, huge deficits appeared. Only a month after Reagan signed his tax cuts into law, the economy slid into recession.

Many historians give Reagan high marks for the early stages of his economic recovery program, though his tax policy is not what receives the most praise. One of Reagan's top priorities when he arrived in Washington was bringing down inflation, then averaging 12.5 percent. He stoically backed the efforts of Paul Volcker, the newly appointed chairman of the Federal Reserve, to whittle away at soaring prices by restricting the money supply. But there was a steep political price to pay for this support. Fewer dollars circulating in the economy pushed unemployment past 10 percent in 1982, and as more workers lost their jobs, Reagan's popularity nosedived. After 16 months of recession, Reagan's approval rating had fallen from 68 percent to 35 percent.

Still, historians believe it was this tight-fisted approach to monetary policy, more than any other step Reagan took, that paved the way to recovery. "Reagan did break the back of the recession," says Lou Cannon, author of the biography President Reagan: The Role of a Lifetime. "But he did it by sticking with Volcker." As the 1984 election approached, the inflation rate had fallen to just over 4 percent, Volcker had begun to loosen the money supply, and the unemployment rate was dropping.

Timing is everything in politics, and Reagan's timing was good. "Suddenly, what had seemed like an insoluble problem was essentially solved," says John Sloan, a retired professor of political science at the University of Houston and the author of The Reagan Effect: Economics and Presidential Leadership. "By 1984, you had peace and prosperity, and Reagan looked terrific." Campaigning with the slogan "It's morning again in America," Reagan won re-election in a landslide.

Reagan's economic legacy didn't end there, though. Economists generally agree that the sky-high tax rates of the 1970s needed to come down, and that Reagan's policies helped lay the foundation for the economic boom that followed, including the 18 million jobs created during his presidency. But because Reagan never made any real effort to cut spending in his second term and kept his tax cuts in place, his policies also had some decidedly negative consequences. "Reagan's fiscal policy was certainly a stimulus to the economy, and if that stimulus had been removed after the economy got back to full employment, then I would have found very little to criticize," says Benjamin Friedman, an economist at Harvard who was an outspoken critic of Reagan in the 1980s. "When the economy is at less than full employment, government deficits are a good idea. That's why they're a good idea now. What's a bad idea is keeping the government in significant deficit when the economy has recovered."

Deep red. But keeping the government in deficit is exactly what Reagan did. Despite his years of lip service to balancing the budget, total discretionary spending had climbed almost 16 percent by the time he left office, dwarfing the Carter budgets he had once criticized. Revenues, limited by Reagan's tax cuts, were never able to keep pace. The result was a spiraling national debt that nearly tripled during his two terms, hitting $2.7 trillion.

Some of Reagan's aides, including William Niskanen, the former chairman of Reagan's council of economic advisers, believe there is a simple explanation for these growing deficits: Reagan's tax cuts simply did not do what supply-side economists said they would do. Because the cuts didn't substantively increase tax revenues, they didn't allow Reagan to shrink the deficit. They also didn't decrease the size of government by choking off spending. "The 'starving the beast' hypothesis is understandably popular among politicians--that you can have tax cuts without a deficit increase--but it's just empirically wrong," says Niskanen, now chairman emeritus of the Cato Institute. "That idea has destroyed for several decades the traditional Republican commitment to fiscal responsibility."

This, many historians believe, may be Reagan's real legacy. "The combination of military spending, tax cuts, and ultimately a failure to control most domestic spending led to a fiscal straitjacket by the end of the decade," says Zelizer. In 1991, Reagan's successor, George H. W. Bush, was forced to increase taxes to close huge gaps in the budget, but government debt still climbed past $4 trillion on his watch. When George W. Bush adopted a Reaganesque economic policy, with Dick Cheney, early in his first term, famously saying that "Reagan proved deficits don't matter," more tax cuts and more spending led to even more debt. By the time Obama took office, the federal government was more than $11 trillion in the red.

The lesson of Reaganomics, in other words, may be a simple one. In times of economic crisis, all roads seem to lead to the same place: deficits. The real test of a president and his economic policy, historians say, is what happens to those deficits when the economy recovers. For all of his many successes--and for all the support his ideas still enjoy on Capitol Hill--that is a test Reagan seems to have failed.

--Read "The First 100 Days: Reagan Pushed His Agenda of Tax Cuts and Less Government."

--Read about the best and worst 100 days of all time.