Morning Must Reads

 
By setting the parameters for a new kind of examination, Treasury Secretary Time Geithner has controlled the outcome of the bank stress tests due out today all along. The goal has been to spur confidence and to prepare the ground for new regulations.

The Obama administration has obtained half of the intended effect of the tests by creating new market enthusiasm for the financial sector.

Now comes the hard part.

As writers Jim Puzzanghera and Scott Reckard explain, if the results are too reassuring, it will make the administration’s plan for lots of new oversight and for specific actions from banks more difficult. So with the threat of bad publicity and other sanctions available to him, Geithner will be looking for banks to submit voluntarily.

“Still, the results, to be released this afternoon, could trigger further dramatic changes in the U.S. banking system, including greater government control over the operation of some of the institutions that have received billions of dollars in taxpayer funds. The results also could increase pressures on some large regional banks to merge with others.

Instead of new government financing, the vast bulk of the big banks required to bolster their capital will do so by raising money from private sources, selling assets or simply exchanging one form of stock for another, Geithner said in an interview on “The Charlie Rose Show” on public television.”
 
Bloomberg – Obama Calls for $17 Billion in Budget Cuts, Resistance Likely
 
Like pardoning a Thanksgiving turkey, the call for itemized budget cuts has become a rite of the American presidency. Today, Barack Obama will take his turn by asking for $17 billion and 121 programs to be trimmed in the next fiscal year, even as he pushes a jaw-dropping $3.6 trillion budget.

There’s a little extra pressure for Obama whose campaign refrain when asked how he would pay for various programs was to say how he would go “line by line through the federal budget.” It prompted eye rolls from those familiar with the challenge of slaughtering sacred cows in Washington, but today’s pitch represents his version of keeping that promise.

But since Obama is a proponent of broad compromise and currently seems willing to do whatever is needed to have a health care plan in place by the time Democrats are running for re-election next year, expect Obama to have similar success at cost cutting as his predecessors.

“The administration’s budget-cutting efforts aren’t new and often aren’t successful. In 2008, then-President George W. Bush, working with a Democratic Congress, proposed ending or reducing 141 federal programs. Of those, 29 were terminated or trimmed for a savings of about $1.6 billion, the White House budget office said.

‘Every government program — no matter how wasteful — will be defended by its recipients and congressional champions,’ said Brian Riedl, a budget expert at the Heritage Foundation, a Washington-based research group. ‘Unless Obama puts the weight of the White House behind his spending cuts, Congress will ignore them.’”
 
Wall Street Journal – Provision to Ease Unionization Likely to Drop Out of Bill
 
Writer Kris Maher explains that the next iteration of the Card Check legislation is ready for a vote. The new plan, which is being sold by Sen. Tom Harkin, D-Iowa, says workers can still have secret ballots for union organizing votes if the election is held within three weeks of the request.

But the real issue going forward will be mandatory arbitration. Unions want federal arbitrators to resolve any contract dispute that lasts longer than four months. The compromise is that there would be an intermediate step of mediation before going to arbitration.
There may be enough support for the bill, which would still be big enough to constitute another big defeat for business.

“The issue of government arbitrators telling an employer how to run their business is not something the employer community is going to accept,” said Michael Eastman, executive director of labor policy for the U.S. Chamber of Commerce.

Bill Samuel, director of government affairs for the AFL-CIO, says the labor federation wants any final bill to include some form of arbitration to ensure that new unions eventually get a contract. “Without arbitration being triggered at some point, this bill won’t work to address the endless delays in bargaining that employers use to avoid reaching a settlement,” he said.
 
Washington Post –In Frenetic White House, A Low-Key ‘Outsider’
 
Writer Karen DeYoung gets some face time with President Obama’s surprisingly reclusive National Security Advisor, James Jones.
DeYoung explains how Jones’ shorter hours and more family-friendly approach is a bid departure from both his predecessors and the rest of the around-the-clock frenzy of the Obama White House.

The result is that arguably the most knowledgeable person on foreign policy in the administration, Jones, 65, has had trouble coalition building in the hyper-active atmosphere.

 “White House officials who cited early misgivings, more stylistic than substantive, insisted they have now disappeared. But Jones acknowledges that the road has not always been smooth, and he appears more comfortable than some of his administration colleagues in saying they still have some distance to travel.

It is ‘absolutely’ fair to say that it has taken some time for him and his colleagues to get used to each other, Jones said in an interview Tuesday. ‘From this West Wing, in particular, because this is Obama Nation, right? True? This is where the Obama election campaign came, landed, en masse.’”
 
New York Times — With Gay Issues in View, Obama Is Pressed to Engage
 
As gay-rights activists rack up victories from coast to coast, they’re wishing that President Obama was showing some more public enthusiasm for their agenda, particularly gay marriage.

But Obama won the presidency in part by saying he opposed gay marriage, and can’t join the party just yet. His fellow African-Americans are strongly opposed and the 2010 elections will include some backlash for Democrats who jumped ahead on gay marriage.

The grousing has expanded to op-eds and demands for Obama to appoint the first openly homosexual member of the Supreme Court. But as writer Sheryl Gay Stolberg points out, Obama has a plan to broadly expand the rights of gay Americans. A hate crimes bill that covers sexual preference, several key appointments for homosexuals, the beginning of the end of “Don’t Ask, Don’t Tell” and even seeking out same-sex parents for the White House Easter egg roll are all included as signs of Obama’s true desire to make the gay lifestyle part of mainstream America.

His gay supporters assure their comrades that the president will be shed of his campaign-season reticence once the rest of the country soon enough accepts gay marriage as a fact of life.

“Tobias Wolff, a law professor at the University of Pennsylvania who was Mr. Obama’s top campaign adviser on gay rights, said the president needed time to build political consensus.

‘I think he has a genuine sense,’ Mr. Wolff said, ‘that in order to move these issues forward you need broader buy-in than you are going to get if you poke a stick in too many people’s eyes.’