Today's Papers

SCOTUS Pulls Hand Brake on Chrysler Bankruptcy

USA Todayand the New York Timeslead with, while everyone else fronts, the surprising move by the Supreme Court to temporarily block the sale of Chrysler to Fiat while it considers whether to hear an appeal of the deal. In a 53-word order, Justice Ruth Bader Ginsburg gave no hints as to whether the court will hear an appeal by three Indiana pension funds that said they were being treated unfairly in the automaker’s bankruptcy plan. By delaying the sale of Chrysler “pending further order,” the court could just be saying it needs more time to consider documents filed over the weekend. A long delay could be catastrophic to Chrysler. Fiat has the right to walk away if no deal is reached by Monday, and that could mean Chrysler might be forced to liquidate. But Fiat’s CEO said yesterday he “would never walk away” from the Chrysler deal, even if it’s not completed by Monday.

The Los Angeles Timesand the Wall Street Journal’s world-wide newsbox lead with the White House saying it was “engaged through all possible channels” to try to seek the release of the two American journalists who were sentenced to 12 years of hard labor by North Korea’s highest court. The sentencing of Laura Ling and Euna Lee complicates the already perilous relationship between North Korea and the United States. Some analysts have raised fears that the recent tensions could make it less likely that the Current TV reporters would be released quickly and they could become “the first Americans subjected to North Korea’s gulag-style prisons,” notes the WSJ. The Washington Postleads with the Obama administration’s latest efforts to keep Bush-era CIA documents under lock and key. * CIA Director Leon Panetta told a federal judge that releasing the documents related to the videotaped interrogations of CIA detainees, as well as ones that describe the rough interrogation methods, would hurt national security and help al-Qaida’s recruiting efforts.

The Supreme Court’s move to at the very least slow down the sale of Chrysler came as a bit of a shock to the White House, particularly since it came less than a week after Obama pretty much declared the automaker’s reorganization a done deal. If the justices end up agreeing with some of the claims made by the pension funds, it could also put a damper on plans to rescue General Motors and generally “weaken the government’s hand in stabilizing the troubled economy,” notes the WP. Indeed, the WSJ reports that the lawyer for the Indiana pension funds is now in talks with GM bondholders who also think they were treated unfairly and want to raise a similar challenge. A professor of corporate law tells the LAThe was “stunned” by the court’s move, even if he does think that Chrysler’s bondholders have a legitimate complaint, particularly since the United Auto Workers union appears to have received favorable treatment.

The WP tries to read into Ginsburg’s 53 words and says the language she “used in her order usually signals a delay of short duration.” The WSJ specifies that while the court sometimes issues this type of delay in death-penalty cases, it’s rare for the justices to order full emergency reviews as the creditors are requesting. But there’s little question that it could also have broad implications particularly since the appeal by the Indiana funds “reads less like a standard business brief than a plea for the Supreme Court to stand up to the Obama administration,” notes the LAT.

The LAT points out that the United States is trying to prevent the discussions over the release of the American journalists from being linked to the efforts to end North Korea’s nuclear program. But the connection seems inevitable, and many speculate that the isolationist regime will use Ling and Lee as negotiating chips to make sure the United Nations and individual countries don’t impose harsh sanctions for its recent nuclear and missile tests. “I think it very unlikely that the North Koreans would let them go without some serious extortion,” one expert said. “But giving in to that extortion would fundamentally undermine broader U.S. national security interests.” At the very least, that means their release could be delayed, and “the two women face a grim future in a brutal prison system notorious for its lack of adequate food and medical supplies and its high death rate,” notes the LAT. The WSJ says that many analysts believe the current standoff “with North Korea is among the most dangerous since the end of the 1950-53 Korean War” and “raises the potential for a miscalculation or escalation.”

The WSJ fronts word that the Obama administration appears to be backtracking from its efforts to cut down on the number of agencies that have oversight duties in the nation’s financial markets. This suggests that “the current alphabet-soup of regulators will remain mostly intact,” notes the paper. While officials have often talked about how the White House wants to streamline the oversight process, it now looks like existing agencies will be given more authority to make sure financial institutions aren’t taking on a dangerous level of risk. Although officials caution that nothing has been set in stone yet, the White House seems to have concluded that trying for a large-scale overhaul would spark internal fights and inevitably delay the whole process.

The LAT fronts a look at how Obama is in the unenviable position of trying to convince a skeptical public that the stimulus package is working even as the unemployment rate continues to increase. The money has been slow in coming—only 6 percent of the $787 billion had been spent by May 29—and two top White House advisers had said early this year that if the stimulus package were approved the unemployment rate wouldn’t exceed 8 percent. It is now 9.4 percent. While stating that the stimulus package has saved or created 150,000 jobs already, Obama also emphasized that he was “not satisfied” with the pace and said stimulus spending would accelerate in order to create or save 600,000 jobs by the end of the summer.

In the WSJ’s op-ed page, William McGurn writes that talking about jobs “saved or created” has “become the signature phrase” for the president, even though the number is utterly meaningless. The number “allows the president to invoke numbers that convey an illusion of precision,” but no one actually measures “jobs saved.” Even White House officials recognize that the numbers are, at best, an educated guess. “Now, something’s wrong when the president invokes a formula that makes it impossible for him to be wrong and it goes largely unchallenged,” writes McGurn.

In the NYT, André Aciman writes that while Obama’s speech in Cairo “was a groundbreaking event,” no one seemed to notice that the president failed to say a word about the “800,000 or so Jews born in the Middle East who fled the Arab and Muslim world or who were summarily expelled for being Jewish in the 20th century.” Even though Obama took pains to mention Islam’s “proud tradition of tolerance” for other religions, “he failed to remind the Egyptians in his audience that until 50 years ago a strong and vibrant Jewish community thrived in their midst.” For Obama to speak in Cairo about tolerance and respect without mentioning the Jews who used to live there “would be like his speaking to the residents of Berlin about the future of Germany and forgetting to mention a small detail called World War II.”

Correction, June 9, 2009: This article mistakenly referred to the Bush administration instead of the Obama administration. (Return  to the corrected sentence.)