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Deficit projections could trip up budget negotiations, but Obama keeps his 'gallows humor.' Plus, the administration seeks private investors for bad assets.

Congress: Most Democrats Undaunted By CBO Projections

• "Democrats remained undaunted in light of new estimates from CBO that projected the budget deficit would top $1.8 trillion, or 13.1 percent of gross domestic product, under initiatives proposed in the Obama plan," CongressDailyAM (subscription) reports. House Speaker Nancy Pelosi, D-Calif., "said that regardless of what was expected in the CBO projections, 'our priorities are the same.'"

• "Armed with new deficit estimates, Senate Budget Committee Chairman Kent Conrad is pressing to cut up to $28 billion, or almost half, of the increased appropriations sought by President Barack Obama for domestic and foreign aid programs in the coming year," Politico reports. "Conrad's draft budget would leave a 6 percent increase intact. But given the fixed costs" of "veterans' medical care, the International Monetary Fund and the 2010 Census, Obama initiatives could be squeezed -- if not crippled -- in some cases."


White House: Obama Wields 'Gallows Humor' On The Job

• In an interview on CBS' "60 Minutes" Sunday, Obama said "he sees 'flickers of hope' that the economy is beginning to recover, but that huge financial troubles lurk -- some of which could combine to drive the country into 'potentially depression,'" The Hill reports. "Obama said it is necessary to have a measure of 'gallows humor to get you through the day,' and that the ongoing war in Iraq, despite still being a 'pretty serious problem,' is the 'least of my problems.'"

• "Six weeks after" Obama "appointed a blue-ribbon panel to help him dig America out of its economic crisis, the board has yet to hold an official public meeting," Politico reports. "The White House initially said that the 16-member Presidential Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker, would meet 'every few weeks.'"

Politics: GOP Moves To Attacks On Competency

• "In a tactical shift aimed at capitalizing on the American International Group scandal, Senate Republicans are moving beyond policy critiques of" Obama "to charges of incompetence and mismanagement on the economy," Roll Call (subscription) reports. The move signals "a broader case they intend to make against the president and the Congressional majority as midterm elections near."


• "Despite the rising political profile of House Minority Whip Eric Cantor (Va.), Minority Leader John Boehner (Ohio) appears unaffected, showing no signs of worry that his standing in the Republican Party will be eclipsed by the young gun," Roll Call (subscription) reports. "So far, the two have avoided the political pitfalls that have torn apart predecessors such as Majority Leader Dick Armey (R-Texas) and Speaker Newt Gingrich (R-Ga.), whose relationship slowly eroded as Armey's profile grew."

Economy: Private Investors Sought To Buy Troubled Assets

• "Obama administration officials worked Sunday to persuade reluctant private investors to buy as much as $1 trillion in troubled mortgages and related assets from banks, with government help," the New York Times reports. "The talks came a day before the Treasury secretary, Timothy F. Geithner, planned to unveil the details of the administration's long-awaited plan to purchase troubled assets."

• "The president of the European Central Bank said Europe doesn't need to boost spending more to combat the global financial crisis, throwing the bank's weight behind Europe's governments in their battle with the U.S. over how to overcome the worst recession in a generation," the Wall Street Journal (subscription) reports. "Jean-Claude Trichet said that instead of pushing new measures, governments around the world should move faster on what they've already announced -- referring in part to delays and difficulties in the U.S. government's rescue of its troubled banks."

• "U.S. firms are not the only ones hoping to cash in on the $787 billion stimulus program," the Washington Post reports. "Hundreds of foreign-owned companies, many of them with significant operations in the United States, are selling their expertise in clean energy, high-speed transit and other technologies that undergird key aspects of President Obama's stimulus efforts."


National Security: Iraqi Prisoners To Be Released

• "Thousands of Iraqi prisoners being held indefinitely without charge by U.S. forces will be freed or prosecuted in Iraqi courts by the middle of this year, the U.S. commander in charge of them said on Sunday," Reuters reports. "U.S. forces are currently holding just over 13,000 Iraqi prisoners, Brigadier-General David Quantock, commander of the U.S. detention operations in Iraq, told a news conference."

• A U.S. Special Forces raid near the Afghan-Tajikistan border "that killed five people on Sunday has produced sharply conflicting accounts from the American military and local Afghan officials as to whether the dead were civilians or militants, resurrecting a sore point that has troubled the American-led war here," the New York Times reports.

• An Army inspector general's report finds that "the Army's process for determining a soldier's fitness for combat is so confusing that it increases the chance of sending ailing troops to war," USA Today reports. "There are at least 15 'inadequate, unsynchronized or conflicting' policies governing fitness... the report concludes."

World: Clinton Prepares Agenda For Mexico Visit

• "Mexico's growing problems take center stage this week as a parade of U.S. Cabinet members start to descend on Mexico City before next month's visit by President Obama," USA Today reports. "Secretary of State Hillary Rodham Clinton will arrive Wednesday and meet with Mexican President Felipe Calderón during a two-day trip... trying to find common ground on contentious issues such as border violence and trade rules."

• "Venezuela's President Hugo Chavez said on Sunday" that Obama "was at best an 'ignoramus' for saying the socialist leader exported terrorism and obstructed progress in Latin America," Reuters reports.

• "Nearly 100 people, most of them monks, were being held in a Tibetan area of northwestern China after a crowd attacked a police station there on Saturday, according to the state-controlled media," the New York Times reports. "The riot was the latest and biggest skirmish this month between ethnic Tibetans and Chinese authorities and comes as Tibet and adjoining areas face growing tensions amid a series of historically delicate anniversaries."

Technology: New Wind Turbines Will Be Safer For Bats, Researchers Say

• "There's a bandwidth gap between the United States and the rest of the developed world that President Obama wants closed, and the feds are about to ask for help devising a plan to catch up to the Japans of the world," Wired reports.

• "Researchers think they are close to solving a problem that has slowed progress in meeting America's future electricity needs -- The giant wind turbines that constitute one of the most promising alternative energy technologies also cause bats to explode," the Washington Times reports. "The problem is troubling to nature lovers, who have complained bitterly and delayed projects."

• "Her videos aren't quite viral yet and she's not tweeting, but" Clinton "is embracing new media, using the Web to promote the agency and her role as the nation's top envoy," AP reports.

Lobbying: PMA Group Suing Clients Over Fees

• "Despite the fact that the firm will be closing its doors shortly, the PMA Group has filed several lawsuits against its clients in recent weeks for failure to pay a combined $150,000 in fees the firm believes it is owed, and more suits are apparently in the works," Roll Call (subscription) reports. "The FBI raided the PMA Group offices in November and is reportedly investigating whether some of the firm's campaign contributions were improper."

• "A potential compromise for the labor movement's No. 1 legislative priority this Congress is earning harsh reviews from a number of industry-affiliated groups that have lobbied against the bill," The Hill reports. "The compromise would allow workers to bypass secret ballot elections to form a union if 70 percent of them sign authorization cards stating their intention to organize. In the current version," the threshold is 50 percent.

• "The business community is facing a tough choice: cozy up to a new coalition close to" Obama "that some fear could wind up working against their own interests or risk alienating the new White House," Politico reports. "It's a Sophie's Choice being forced by the creation of Business Forward, a new advocacy association backed by the White House and populated by Obama campaign veterans who are pushing issues that closely reflect the president's broad economic competitiveness agenda."

Health Care: Proposal To Tax Health Benefits Draws Fire

• "Senate Finance Chairman Max Baucus has taken a good bit of heat over his suggestion to tax employer-sponsored health benefits to help pay for a healthcare overhaul, and his ability to sell the hefty revenue-raiser appears to face an uphill climb even among members of his party on the committee," CongressDailyAM (subscription) reports.

• "Not long ago, when infectious-disease specialist Connie Price saw a patient hospitalized with flu at Denver Health Medical Center, she had a powerful weapon at hand: a drug that could shorten the course of the illness and lessen its misery," USA Today reports. "Now, the strength of that weapon, Tamiflu, has been undermined by a widely circulating flu strain, type A H1N1, that has developed the ability to resist the drug."

• "Here's the best-case scenario for the government's plans to spend $19 billion on computerized medical records: seamless communication among doctors and patients, and far fewer mistakes," AP reports. "And the worst-case: $19 billion goes down the drain."

Energy: States Scrambling For 'Clean Coal' Money

• "The federal government is once again dangling billions of dollars for 'clean coal' projects, sparking a high-stakes lobbying effort among different states trying to score some of the cash for local projects," the Wall Street Journal reports. The stimulus bill "designates $3.4 billion in federal funding for investment in pioneering clean-coal technology, including power plants that would capture carbon dioxide so only small amounts are released to the atmosphere."

• "In his new job as energy secretary," Steven Chu "is observing phenomena he never saw in the science laboratory," the New York Times reports. "At a recent Senate hearing, for example, he witnessed a junior cabinet member (himself) being systematically dissected by a senior senator," John McCain, R-Ariz.

• "As President Obama and Congress pump billions into energy conservation, experts warn that the promised energy savings could be undermined by consumer behavior," USA Today reports. "There is even a name for it: the Snackwell Effect."

Commentary: Banking On Geithner?

• Geithner lays out his new plan for toxic assets in Earlybird's Pundits & Editorials section while commentators assess the situation the Treasury secretary finds himself in.

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