Obama softens stance on Wall Street bonuses

President Barack Obama has praised the bosses of Goldman Sachs and JP Morgan as "very savvy" and insisted he does not "begrudge" them their success and wealth, in a significant softening of the White House's attitude towards multimillion-dollar Wall Street bonuses.

Once a staunch critic of outsized pay packets, Obama adopted a strikingly consensual tone when asked this week about a $9m (£5.8m) bonus awarded to Goldman's Lloyd Blankfein and a $17m (£11m) payday granted to JP Morgan's Jamie Dimon.

"I know both those guys, they are very savvy businessmen," Obama said in a interview with Bloomberg's BusinessWeek magazine. "I, like most of the American people, don't begrudge people success or wealth. That is part of the free-market system."

Equating the banking bosses with top sports stars, Obama agreed that Dimon's $17m pay packet was "an extraordinary amount of money" in high-street terms, but added: "There are some baseball players who are making more than that and don't get to the World Series either, so I'm shocked by that as well."

Speaking more broadly about Wall Street rewards, Obama said: "I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance."

But he praised the fact that Goldman and JP Morgan were using long-term share awards, rather than cash, to pay bonuses to their senior executives. He said this "requires proven performance over a certain period of time as opposed to quarterly earnings", adding that it was a "fairer way of measuring CEO success and ultimately will make the performance of American businesses better".

Although the White House denied any changed in direction on the issue of bonuses, Obama's comments were far less strident than his past condemnations of rewards on Wall Street. Shortly after taking office last year, he described bonus payouts by banks as "the height of irresponsibility" and said it was "shameful" that banks were paying "lavish" compensation in the middle of an economic crisis.

Obama sets up task force on childhood obesity

Washington (CNN) -- President Barack Obama signed a memorandum Tuesday establishing a new federal task force to tackle the growing problem of childhood obesity.

The task force, according to the memorandum, will have 90 days to craft a plan encouraging "optimal coordination" between the federal government and both the private and non-profit sectors, according to Obama.

Several Cabinet members, including the secretaries of Interior, Agriculture, and Health and Human Services, will serve on the task force. Its work will complement an aggressive public relations effort led by first lady Michelle Obama to raise public awareness of the issue.

Childhood obesity is "one of the most urgent health issues that we face in this country," the president said at the White House.

"We think that this has enormous promise in improving the health of our children, in giving support to parents to make the kinds of healthy choices that oftentimes are very difficult."

The administration, according to the memo, "is committed to redoubling our efforts to solve the problem of childhood obesity within a generation through a comprehensive approach that builds on effective strategies, engages families and communities, and mobilizes both public and private sector resources."

The memo notes that almost one-third of American children are overweight or obese -- a rate that has tripled among adolescents and more than doubled in younger children since 1980.

About one-third of Americans born in the year 2000 or later will suffer from diabetes at some point in their lifetime, according to the memo.

Michelle Obama will launch a national campaign against childhood obesity at noon at the White House.

Mayors, doctors and leaders in sports, entertainment and business will join the first lady as she kicks off the campaign. Members of President Obama's Cabinet will also be there.

As part of the campaign the first lady is urging families to turn off the television, drink more water and serve smaller portions.

During a speech last month at a Virginia YMCA, the first lady spoke about health issues caused by childhood obesity.

"We've seen the surge in obesity in this country is nothing short of a public health crisis, and it's threatening our children, it's threatening our families, and more importantly it's threatening the future of this nation," she said. "Higher rates of obesity are directly linked, as you've heard, to higher rates of chronic illnesses like heart disease and cancer and diabetes."

During her speech at the YMCA, Michelle Obama shared strategies she has used with her own children.

She helped her daughters stay active by limiting television watching, she said. The first lady also cut back on meal sizes and sugary drinks, and added more fruits, vegetables and water to their diet.

"It was really very minor stuff. But these small changes resulted in some really significant improvements," Obama said.

Obama invites GOP leaders to health care talk

WASHINGTON -- In the first major step to revive his health care agenda after his party's loss of a filibuster-proof Senate majority, President Barack Obama on Sunday invited Republican and Democratic leaders to discuss possible compromises in a televised gathering later this month.

Obama's move came amid widespread complaints that efforts so far by him and his Democratic allies in Congress have been too partisan and secretive.

The Feb. 25 meeting's prospects for success are far from clear. GOP leaders demanded Sunday that Democrats start from scratch, and White House aides said Obama had no plans to do so.

"If we are to reach a bipartisan consensus, the White House can start by shelving the current health spending bill," said Senate Minority Leader Mitch McConnell, R-Ky.

House Republican leader John Boehner of Ohio also threw some jabs while accepting Obama's invitation. He said he was glad the White House "finally seems interested in a real, bipartisan conversation," adding that Americans have rejected "the job-killing, trillion-dollar government takeover of health care bills passed by the House and Senate."

Banking regulation bill hits impasse in Senate

WASHINGTON -- Efforts to reach bipartisan agreement on regulations to prevent another financial meltdown have reached an impasse in the Senate Banking Committee and Chairman Christopher Dodd said Friday he will move forward with his version of the bill.

Dodd, D-Conn., has been unable to find common ground over consumer protections with Sen. Richard Shelby of Alabama, the top Republican on the committee. Nonetheless, Dodd said he will incorporate provisions into the regulatory bill that were worked out by other bipartisan teams on the panel.

The breakdown in negotiations is a setback for the bill. A priority of the Obama administration, it is intended to address weaknesses in the financial system that led to the crisis that gripped Wall Street in the fall of 2008. The legislation aims to increase consumer protections on loans and credit cards, add restrictions to previously unregulated financial products and find ways to dismantle failing firms without resorting to taxpayer bailouts. The House has already passed its version.

"While I still hope that we will ultimately have a consensus package, it is time to move the process forward," Dodd said. He is expected to introduce his bill the week of Feb. 22.

Dodd needs Republican support to win passage in the Senate. It is unclear at this point whether adding other regulatory measures supported by Republicans will guarantee him GOP votes.

Sen. Mark Warner, D-Va., said he and Sen. Bob Corker, R-Tenn., have found agreement on how to deal with companies that pose a broad risk to the financial system. He said Dodd assured him that their work will be reflected in legislation that Dodd proposes.

Obama calls for talks with GOP on health care, then vote by Congress

Washington (CNN) -- President Obama called Thursday for high-level talks with Republicans on a Democratic health care bill, then putting the resulting legislation to a vote in Congress.

"If Congress decides we're not going to do it, even after all the facts are laid out, after all the options are clear, then the American people can make a judgment as to whether this Congress has done the right thing for them or not," Obama said. "That's how democracy works."

Obama's comments were the first clear signal from the White House or Democrats in Congress on how they would proceed on a top legislative priority after losing their 60-seat supermajority in the Senate.

Republican Scott Brown was sworn as the new U.S. senator from Massachusetts earlier Thursday, leaving the Democrats one vote shy of being able to overcome filibusters of health care reform and other major initiatives.

Asked at a party fundraising event about the Democratic strategy for health care reform going forward, Obama said Democratic leaders in the House and Senate were working out differences in the separate health care bills passed by each chamber last year.

Once that was finished, Obama said, the next step would be "to call on our Republican friends to present their ideas." He proposed a meeting with Republican and Democratic leaders, along with health care experts, to go over the merged legislation.

"Their ideas, our ideas, let's go through them in a methodical way so the American people can compare," Obama said, adding: "And then I think we've got to go ahead and move forward on a vote. We've got to move forward on a vote."

At National Prayer Breakfast, Obama warns against 'erosion of civility'

President Obama bemoaned the "erosion of civility" in the nation's political debate Thursday, telling an audience at the National Prayer Breakfast that there is a growing sense that "something is broken" in Washington.

"Those of us in Washington are not serving the people as well as we should," Obama said. "At times, it seems like we're unable to listen to one another, to have at once a serious and civil debate."

Obama contrasted the sense of duty and service summoned in response to disasters such as the earthquake in Haiti with the seeming inability of the nation's policymakers to answer "the slow-moving tragedies of children without food and men without shelter and families without health care."

The president criticized a political culture where disagreement on policy quickly morphs into questioning one another's motives. Obama, a Christian who was born in Hawaii, alluded to the undercurrent of allegations that he is actually a Muslim who was born outside the United States, saying, "I am the first to confess that I am not always right. . . . But surely, you can question my policies without questioning my faith, or, for that matter, my citizenship,"

Speaking to an audience at the Hilton Washington hotel that included Vice President Biden, congressional leaders, Secretary of State Hillary Rodham Clinton and an array of religious leaders and foreign dignitaries, Obama called on leaders to step outside their comfort zones to bridge divisions and unite around their common goals.

"Challenging each other's ideas can renew our democracy," Obama said. "But when we challenge each other's motives, it becomes harder to see what we hold in common."

Obama rips Republicans for 'obstruction'

President Obama blamed the Republican Party for what he called politically motivated opposition on issues.

Washington (CNN) -- President Obama tore into the Republican opposition on Capitol Hill Wednesday, blaming the GOP for what he called politically motivated opposition on virtually every issue.

Democrats have been willing to incorporate Republican ideas on health care and other issues, he said, but Republicans have not been willing to do the same.

Addressing a gathering of Senate Democrats, Obama promised to "call (Republicans) out when (Democrats) extend a hand and get a fist in return."

Several Democrats facing tough election fights this November were given time to ask the president questions on high-profile issues such as trade and deficit reduction. Much of the president's time, however, was used to lash out at GOP tactics.

Senate Republicans, he said, have tried to employ the filibuster more over the past year than in all of the 1950s and 1960s combined. The GOP's strategy has been "20 years of obstruction packed into one," he said.

"If you want to govern, you can't just say no," he argued. "It can't be about just scoring points." The filibuster, he added, only works as intended if there is a "genuine spirit of compromise."

The president's tough rhetoric was part of a more aggressive -- and frequently populist -- White House strategy in the wake of the Democrats' recent upset loss in the Massachusetts Senate race. GOP Sen.-elect Scott Brown's victory stripped Democrats of their 60-seat Senate supermajority and raised fears among many congressional Democrats about a potential GOP landslide in the upcoming midterm elections.

The Democratic answer to the Massachusetts Senate race should not be "to do nothing" in Congress, he said. Nervous constituents want to see legislative progress, he asserted.

"We should do more, and we should do so without delay," he said.

Obama cited several examples of what he said was GOP legislative maneuvering motivated purely by political considerations. Among other things, he raised the recent example of seven GOP senators who backed a bill establishing a bipartisan deficit reduction commission, but then turned against it when the proposal came to a vote.

He also noted that a large number of bills have been subjected to Republican-led filibusters, only to receive 85 or 90 votes once the filibuster is broken and the legislation is allowed to move to a final vote.

I'm "not open to switches" solely "because it's good short-term politics," he said. I won't tolerate an "if you lose, I win" mentality.

Obama urged Senate Democrats to stop listening to what he called politically oriented cable television shows on networks such as CNN and MSNBC, and instead get out of the Washington "echo chamber."

Most people "don't care about majorities and minorities and process," he said. They just want to know if their elected representatives are "delivering for me."

The president warned fellow Democrats that the public is often misinformed on key issues such as budget deficits. Many constituents will cite foreign aid or legislative earmarks when discussing ways to reduce spending, he said, when in reality those items constitute a minuscule share of federal spending.

Balancing the budget while refusing to raise taxes and exempting entitlement programs such as Social Security and Medicare would require 60 percent cuts in virtually every other program, and "that's just not going to happen," he said.

Noting that Bill Clinton left office with budget surpluses, Obama asserted that Democrats "should have credibility" on the deficit issue. But the party is "still haunted" by debates from the 1960s and '70s when the party was stuck with the "tax and spend" label, he said.

Obama pitches aid for struggling small businesses

President Barack Obama's bid to sell his economic agenda and re-energize voters picks up in politically significant New Hampshire, where he will again promote an idea to free up money for small businesses that are hurting.

Obama travels to Nashua, N.H., on Tuesday to draw attention to a proposal highlighted in his State of the Union address last week: funneling $30 billion to local banks so they can lend small businesses money they need to grow their enterprises and create jobs.

The trip comes two weeks after Democrats suffered the stunning loss of a Senate seat in neighboring Massachusetts, and the president is working to shore up his party's standing heading into the November midterm elections to avoid heavy losses in the House and the Senate, both of which are under Democratic control.

In New Hampshire, Obama will tour a local business and hold his second town hall in six days, a format that allows him to show engagement with the public and counter a sense of "remoteness," as he has put it, that people have had with his policy agenda.

"Jobs will be our No. 1 focus in 2010," he said in excerpts of his prepared remarks, which the White House released early. "And we're going to start where most new jobs do - with small businesses. These are companies that begin in basements and garages when an entrepreneur takes a chance on his dream, or a worker decides it's time she became her own boss."

Read more: Obama pitches aid for struggling small businesses - KansasCity.com

Obama budget would cut NASA moon plan

CAPE CANAVERAL, Florida (Reuters) - President Barack Obama's proposed budget gives NASA a $6 billion 5-year boost but aborts early attempts to return to the moon and turns over space transportation to commercial companies.

The space agency's budget would grow to $19 billion in 2011 under the proposed budget released on Monday, with an emphasis on science and less spent on space exploration.

It "adds $6 billion to NASA's budget over five years and draws upon American ingenuity to enable us to embark on an ambitious 21st Century program of human space exploration," the budget proposal reads.

But the plan ends the Constellation program "which was planning to use an approach similar to the Apollo program to return astronauts back to the Moon 50 years after that program's triumphs."

The budget notes that an independent panel found the moon program was years behind schedule.

"Instead, we are launching a bold new effort that invests in American ingenuity for developing more capable and innovative technologies for future space exploration," it reads.

The new budget, which is subject to change by Congress, also extends operations at the International Space Station past its planned retirement date of 2016, suggesting such potential additions as inflatable space habitats.

Obama's proposal hands over more space operations to the commercial sector, saying it will create thousands of new jobs and hold costs down.

NASA already has spent $9 billion on Constellation and likely would owe millions more to cancel existing contracts. Prime contractors on the Ares rocket program include ATK Launch Systems, Pratt & Whitney Rocketdyne and Boeing Co.

Lockheed Martin is the lead contractor on the Orion capsule.

NASA already has contracts with Space Exploration Technologies and Orbital Sciences Corp to deliver cargo to the station. SpaceX and other firms also are developing spaceships that can carry passengers to orbit and back.

The budget also proposes a re-vamp of the Kennedy Space Center in Florida, where staff have feared major cutbacks, as part of making NASA more efficient.

"A major focus of this effort will be to create the 21st century launch facilities and infrastructure needed at Kennedy Space Center, transforming the facility to more effectively support future NASA, commercial, and other government launches," the budget reads.

Florida Senator Bill Nelson has promised to fight efforts to cut back NASA' Florida operations.

U.S. deficit could reach $1.6 trillion

U.S. President Barack Obama's proposed budget predicts the national deficit will crest at a record-breaking almost $1.6 trillion US in the current fiscal year, then start to recede in 2011 to just below $1.3 trillion.

Still, the administration's new budget to be released Monday says deficits over the next decade will average 4.5 per cent of the size of the economy, a level that economists say is dangerously high if not addressed.

A congressional official provided the information, which comes from a White House summary document circulating freely on Capitol Hill and among Washington lobbyists. The official spoke on condition of anonymity because the spending proposal is not supposed to be made public until Monday.R

Details of the administration's budget headed for Congress include an additional $100 billion to attack painfully high unemployment. The proposed $3.8-trillion budget would provide billions more to pull the country out of the recession, while increasing taxes on the wealthy and imposing a spending freeze on many government programs.

Administration projections show the deficit never dropping below $700 billion, even under assumptions that war costs will drop precipitously to just $50 billion in some years instead of more than three times that this year and next.

White House spokesman Robert Gibbs said the administration believed "somewhere in the $100-billion range" would be the appropriate amount for a new jobs measure made up of a business tax credit to encourage hiring, increased infrastructure spending and money from the government's bailout fund to get banks to increase loans to struggling small businesses.

That price tag would be below a $174-billion bill passed by the House of Representatives in December but far higher than a measure that could come to the Senate floor this week.

Gibbs said it was important for Democrats and Republicans to put aside their differences to pass a bill that addresses jobs, the country's No. 1 concern.

"I think that would be a powerful signal to send to the American people," Gibbs said in an appearance on CNN's State of the Union.

Job creation was a key theme of the budget Obama was sending Congress on Monday, a document designed, as was the president's address, to reframe his young presidency after a protracted battle over health care damaged his standing in public opinion polls and contributed to a series of Democratic election defeats.

Obama's $3.8-trillion spending plan for the 2011 budget year that begins Oct. 1 attempts to navigate between the opposing goals of pulling the country out of a deep recession and dealing with a budget deficit that soared to an all-time high of $1.42 trillion last year.
Congress debates

Obama's new budget will set off months of debate in the Democrat-controlled Congress, especially in an election year in which Republicans are hoping to use attacks against government overspending to gain seats. Obama has argued that he inherited a deficit of more than $1 trillion and was forced to increase spending to stabilize the financial system and combat the worst recession since the 1930s.

Obama's new budget was expected to repeat many of the themes of his first budget. But in a bow to worries over the soaring deficits, the administration is proposing a three-year freeze on spending for a wide swath of domestic government agencies.

Military, veterans, homeland security and big benefit programs such as Social Security and Medicare would not feel the pinch.

The freeze would affect $447 billion in spending and is designed to save $250 billion over a decade. However, it would not fall equally on all domestic agencies. Some would see budget cuts to free up spending for programs the administration wants to expand, such as education and civilian research efforts.

NASA's mission to return astronauts to the moon would be grounded with the space agency instead getting an additional $5.9 billion over five years to encourage private companies to build, launch and operate their own spacecraft for the benefit of NASA and others. NASA would pay the private companies to carry U.S. astronauts.

Obama's budget repeats his recommendations for an overhaul of the U.S. health-care system, the fight that dominated his first year in office. It proposes to get billions of dollars in savings from the Medicare program and again seeks increased taxes on the wealthy by limiting the benefits they receive from tax deductions. Both ideas have met strong resistance in Congress.

Gibbs insisted Sunday that the president's push for health care was "still inside the five-yard line," but Senate Republican leader Mitch McConnell, also appearing on CNN, said the public was overwhelmingly against the bill and the administration should "put it on the shelf, go back and start over."