The Washington Postleads with word that the Federal Deposit Insurance Corp. will announce a new plan today to help stem the tide of foreclosures across the country. The new plan, which would carry a $24.4 billion price tag, could help prevent 1.5 million foreclosures in the next year by offering to share losses with companies that agree to decrease monthly mortgage payments. The New York Timesleads with the diminishing chances that Democratic lawmakers will be able to pass a bailout for Detroit’s automakers before January. While Democrats tried to put on a happy face and say that they’ll get what they want once President-elect Barack Obama takes office, some fear one of the Big Three will go under before then.
USA Todayleads with this weekend’s economic summit in Washington that will bring together leaders from 20 of the world’s top economies. Among other issues, leaders will discuss how to increase transparency and regulation as well as the best ways to stimulate economies that are on a seemingly endless downward spiral. No one really expects any immediate, dramatic action to come out of the meeting, as the leaders will focus on long-term solutions. The Wall Street Journal leads its world-wide newsbox with the Food and Drug Administration’s decision to block all products from China that contain milk. The FDA discovered traces of melamine contamination, which has sickened more than 50,000 babies in China, in several products; it now says importers must prove their goods are safe before they can be sold in the United States. The Los Angeles Timesleads with the fire that broke out last night in the upscale community of Montecito in Santa Barbara County, Calif., and has burned at least 800 acres and destroyed as many as 80 homes.
Democratic leaders appear to be widely enthusiastic about the new plan to prevent foreclosures, but FDIC Chairman Sheila Bair continues to face resistance from the Bush administration. But that may not matter that much now because, as the WP puts it, “proponents increasingly view the Bush administration as a roadblock with an expiration date.” Those who have missed at least two monthly payments would be eligible for the program. It would require lenders to decrease payments to no more than 31 percent of a borrower’s monthly income. In order to encourage companies to participate, the government would essentially offer to split the loss with any lenders that lose money from most of the modified mortgages.
If the chances for the Big Three bailout are rapidly diminishing, Democrats have pretty much given up on the idea that they’ll be able to pass any sort of economic stimulus package during next week’s lame-duck session. Still, even if they don’t have the votes, there are hints that Democrats will move ahead with the efforts to provide $25 billion to the automakers, perhaps as a way of having someone else to blame if one does go under soon. The measure would have to pass the Senate first, and Democrats would need 11 Republican votes, since neither Obama nor Vice President-elect Joe Biden is expected at the lame-duck session.
In preparation for the weekend’s meetings, President Bush defended American-style capitalism and called on world leaders not to “reinvent” the system. “Our aim should not be more government,” Bush said. “It should be smarter government.” The WP fronts a look at the measures currently under discussion and highlights a proposal to create a new regulatory body to oversee the world’s 30 largest financial institutions. The leaders of the 20 countries that will be meeting are also “close to a deal” on the creation of an “early warning system” that would aim to detect weaknesses in the financial system before they become a problem. There’s also likely to be discussion on a proposal to limit executive pay as well as pressure on Bush to drop his resistance to more fiscal stimulus packages. Obama will not be attending but is sending former Secretary of State Madeleine Albright and former Iowa Rep. Jim Leach to talk to world leaders.
The WP fronts a look at how the government takeover of Fannie Mae and Freddie Mac may be more expensive than the Bush administration publicly suggested. This is speculative, since “not a cent has been spent,” but some analysts say that because of the deteriorating conditions in the financial and housing markets, the two mortgage giants will need more than the $200 billion that was initially set aside for companies. At the time of the takeover, the Treasury Department said it was setting aside $100 billion for each merely to reassure investors and suggested that the final tab would be nowhere near that amount. Truth is, though, no one knows how much money the two companies will ultimately need since they are both at the mercy of the housing market.
During the election, Obama’s campaign was famous for not airing any of its arguments and disagreements in public. But now a public battle is being waged among some of Obama’s advisers who disagree on what to do about the huge network of supporters that the president-elect amassed during the campaign, reports the LAT. The standard operating procedure is that a new president turns over information about supporters to the party’s national committee. Some in Obama’s camp want to do just that. Others, however, say that would be the quickest way to destroy the grass-roots network that includes many political outsiders who would drop out if asked to participate in traditional partisan politics. To avoid losing the network, some say it should remain an independent entity that is “organized around the ‘Obama brand,’ ” says the LAT.
The WP points out that the Democrats’ dream of a filibuster-proof majority in the Senate is still alive. Yes, it’s very unlikely, but as of now, the Democrats have 57 seats, and there are still three races to be decided. The Alaska contest is still too close to call, though the Democrat was slightly ahead this week. In Minnesota, Democrat Al Franken is 206 votes behind Sen. Norm Coleman, and there are hundreds of lawyers in the state to oversee a process that is quickly bringing back memories of Florida. Finally, Georgia will be voting in its runoff election on Dec. 2, and both parties have come out in force to help campaign.
The WP’s Al Kamen reports “there’s increasing chatter in political circles” that Sen. Hillary Clinton is being considered for secretary of state in Obama’s administration.
The WP, NYT, and LAT all front the extraordinary news that two groups of astronomers have taken the first pictures of planets outside our solar system. One team recorded a planet orbiting the star Fomalhaut, 25 light-years away. The second team identified three planets circling a star known as HR 8799 that is 130 light-years away. The fact that so-called extrasolar planets exist isn’t news as more than 300 have been found over the last decade, but they were discovered indirectly.
The LAT fronts a look at how activists opposed to Proposition 8, which banned marriage between same-sex couples in California last week, are stepping up efforts to boycott businesses whose employees or owners gave money to the Yes on 8 campaign. The LAT’s Joel Stein says gays are going about this all wrong. Marching with an old “No on 8” sign “makes about as much sense as holding a John McCain rally next month at John McCain’s house.” Instead, Stein takes a cue from Mexican immigrants and declares Dec. 5 “No Gays for a Day day.” Stein called up Kathy Griffin, who, of course, was thrilled to accept the position as celebrity spokesperson for No Gays for a Day. “Now the rest of the world will find out what Griffin has known all along: We need our gays,” writes Stein. “If it turns out I’m wrong, and we don’t miss them, then as a married man, I can tell you this: The best way to keep them at home is to let them get married.”