Passions have cooled a week after news of the AIG bonuses hit, but the anger remained as lawmakers and the Obama administration wrestled yesterday with the best way to address bonuses at bailed-out firms and excessive executive compensation.

In hearings and in the Capitol's corridors, few claimed to have figured out the best approach as they weighed reining in high pay without scaring off the financial firms whose cooperation the government needs to resolve the economic crisis.

A national debate over pay has begun, as the business community warned that the government's actions in the past week sent shock waves, and lawmakers who expressed outrage last week offered a more sober assessment yesterday.

Rep. Steve Israel (D-Huntington), who took a lead role in pursuing the 90 percent tax on AIG bonuses that the House passed last week, yesterday proposed a federal commission to foster a "rational discourse" on compensation at bailed-out firms.


Rep. Gary Ackerman (D-Roslyn Heights), who last week demanded names of AIG bonus recipients, yesterday offered apologies to some AIG employees for needless hurt brought about by "all of the roaring and chest beating."

For now, bonus tax legislation has been put off until next month in the Senate, Majority Leader Harry Reid (D-Nev.) said yesterday, claiming Congressional threats to tax bonuses led to many AIG employees giving back the money.

But some senators, who have fretted that the tax bill is unconstitutional and an affront to business, were awaiting a cue from President Barack Obama at last night's news conference.

Meanwhile, Treasury Secretary Timothy Geithner said at a House hearing yesterday he will draft rules and standards on executive pay, both for firms saved by taxpayers and across the financial world.

At the hearing, Rep. Peter King (R-Seaford) decried the "hysterical" and "retaliatory" bonus-tax law of last week and asked Geithner how firms could trust the government now.

Geithner said solving the economic crisis requires firms to take risk, and "that does require some confidence about the clarity about the rules of the game going forward."

Tomorrow, Geithner will return to discuss his plans for reforming financial regulation. But yesterday he said he would issue rules for compensation limits at bailed out firms enacted in the stimulus bill, and would then set strong, broad standards on executive pay.

He said that "it's appropriate for the country to put in place strong standards that govern compensation practice across the financial community as a whole, because as we've seen, those can have systemic consequences, create a more fragile and unstable system."

Those broader standards won an endorsement from Sen. Charles Schumer (D-N.Y.) and Sen. Kirsten Gillibrand (D-N.Y.).

But Tom Quaadman, a spokesman for the U.S. Chamber of Commerce, warned that many in business view the government as an "unreliable partner" after its actions over the past 10 days.

If a "bailout" for the banking industry sounds like a giveaway, call it a "rescue" and it might attract more support. If a "pullout" from Iraq sounds like a retreat, just call it a "drawdown."

And if the financial crisis leads to a temporary takeover of some big banks, "nationalization" would be a scary way to describe it — so try "receivership."

These days in Washington, the battle over policy and political advantage often comes down to words, labels and marketing. After eight years of a president known for mangling the language, the Obama administration is showing a keen understanding that whoever succeeds in framing an issue in words that resonate with the public is way ahead of the game.

Gov. Arnold Schwarzenegger, no slouch in the marketing department, lamented that spending on the nation's infrastructure did not have more support because "the word means nothing to a majority of people."

"We have to come up with a sexier word than infrastructure," the governor said on a recent trip to Washington.

President Barack Obama is having no problem getting his message out in a smart way, say analysts across the political spectrum.

"Words matter," Obama often said during the campaign. As president, he laces his speeches and policy statements with themes of responsibility, accountability and reform — even as he's putting off some goals, such as reforming the use of earmarks, the pet projects of members of
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Congress.

In his speech on ending the war in Iraq, Obama told an audience of Marines that he honored their sacrifice and achievements. He spoke of "achievable goals" during a "drawdown" of U.S. forces. He did not use the word "victory" or anything like George W. Bush's "mission accomplished" language.

"The president is the best political communicator of our age," said George Lakoff, a linguist, author and professor at the University of California-Berkeley who has advised Democrats and liberal groups.

"He was saying the war in Iraq is over, and telling the military they achieved their goals," Lakoff said.


Obama's ambitious agenda on energy, education and health care — with a big boost in federal spending — has Republicans warning of "European socialism." That labeling has not worked, even some GOP strategists concede.

"Socialism was a big bugaboo maybe 15 years ago, but it doesn't have much impact now," said John Feehery, who worked for former House Speaker Dennis Hastert when the GOP controlled Congress.

"Obama is masterful in his use of language to push his agenda," Feehery said. "He's so far above the field right now it's like Tiger Woods in golf."

But he couples that with a complaint: "He talks the talk of a centrist, but walks the walk of a liberal."

Lakoff, who has studied the cognitive development of the brain, says conservatives learned long ago to use language that has deep-seated emotional appeal: "family values," "pro-life," "tax relief."

But now Obama is countering with the language of progressive values: empathy, empowerment, national service. Lakoff said Obama is trying to redefine patriotism, a word that conservatives once thought was theirs.

Language battles

On Capitol Hill, the language battles are usually more specific, such as how to sell a bill or focus attention on a target.

When Rep. Ellen Tauscher, a Walnut Creek Democrat, introduced a bill last week to repeal the "don't ask, don't tell" policy barring gays from serving openly in the military, she argued passionately that it was a civil rights issue. But she also stressed that the policy has kept thousands of talented Americans from serving — and she called the bill the Military Readiness Enhancement Act.

When Taxpayers for Common Sense, a watchdog group, tried to shed light on abuses in earmark spending several years ago, they learned they had a problem.

"When I did a network interview I was told not to use the word 'earmark,' and just call it pork," recalled Steve Ellis, the group's vice president. "We realized that if you put people to sleep before you've started, you've lost."

Then the group's chief investigator, Keith Ashdown, looked into an earmark for a $300 million-plus bridge in Alaska linking a small town and an airport. He "had a couple of beers, got creative," and came up with a classic catchphrase: the "bridge to nowhere."

"That was a beautiful metaphor," Lakoff said, that captured the essence of wasteful spending.

"Earmark was kind of a goofy, wonky word, but now it's known, and has become a pejorative term," Ellis said. Under pressure, Congress now requires earmarks in spending bills — and their sponsors — to be identified.

Just don't look for the word "earmark" in a bill. Congress now calls them "congressionally directed spending items.

President-elect Barack Obama has asked President Bush and the leaders of Congress to release the remaining $350 billion in the so-called financial bailout package so that it's ready to use when he takes office next week.

The Associated Press notes that:

The request would give Obama, who takes office Jan. 20, not only the opportunity to get quick access to the money, but also to change the program's goals and conditions. The Bush administration's handling of the first $350 billion has come under widespread criticism in Congress and from watchdog organizations.

Obama and his economic team have signaled that he was eager to use the money to help reduce the number of mortgage foreclosures and that he wanted to place greater restrictions on institutions that receive the funds. The move comes as Democrats in the House of Representatives prepare to act on legislation that has some of the same aims.

In a letter to leaders of Congress, incoming National Economic Council director Lawrence Summers says Obama is requesting that the money be released because:

"The American people need to know that going forward our government has the resources to do whatever is necessary to stabilize our financial system and protect our economy from a potential catastrophe. With the first half of the rescue package now committed, President-elect Obama believes the need is imminent and urgent. We cannot afford to wait. read more

Oil, copper and corn rose for the first time in seven days after President-elect Barack Obama pledged the biggest U.S. public works program in half a century to revive the economy.

Commodities climbed on speculation spending on roads, bridges and repairing school buildings will boost raw material demand. Congress and President George W. Bush also are close to agreeing on a $15 billion rescue of U.S. automakers that may be signed this week.

“The markets are cheered by the move to bail out the automobile industry and the emphatic statements from the Obama team that are pointing to a massive stimulus package,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York.

Crude oil for January delivery rose $2.90, or 7.1 percent, to settle at $43.71 a barrel on the New York Mercantile Exchange. Futures touched $40.50 on Dec. 5, the lowest since Dec. 13, 2004.

Obama, in a television interview yesterday on NBC, reiterated his commitment to the biggest investments in the nation’s infrastructure since President Dwight D. Eisenhower created the interstate highway system in the 1950s. The U.S. president-elect takes office on Jan. 20.

A proposal unveiled today by congressional Democrats would require the president to appoint a person or board to oversee long-term restructuring of the auto industry as a condition for receiving federal aid. General Motors Corp., Ford Motor Co. and Chrysler LLC would be eligible for loans. read more

President-elect Barack Obama announced support Sunday for a short-term government bailout of the nation's carmakers that is tied to industry restructuring, and he accused auto executives of a persistent "head-in-the sand approach" to long-festering problems.

President-elect demands restructuring as key senator says GM's Wagoner should resign.

In an appearance on NBC's "Meet the Press" and later at a news conference, Obama at one point suggested some executives should lose their jobs.

A leading Congressional Democrat, Sen. Christopher Dodd of Connecticut, was more blunt. Rick Wagoner, the chief executive of General Motors Corp., "has to move on," said Dodd on CBS' "Face the Nation."

Congressional Democrats and the Bush White House had reached an agreement in principle to provide stopgap support for the U.S. auto industry, congressional and industry sources said late Friday.

The deal would keep the most troubled companies out of bankruptcy court at least through the end of March. read more

When President-elect Barack Obama talked on Sunday about realigning the American automobile industry he was quick to offer a caution, lest he sound more like the incoming leader of France, or perhaps Japan.

“We don’t want government to run companies,” Mr. Obama told Tom Brokaw on “Meet the Press.” “Generally, government historically hasn’t done that very well.”

But what Mr. Obama went on to describe was a long-term bailout that would be conditioned on federal oversight. It could mean that the government would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make — to recreate an industry that Mr. Obama said “actually works, that actually functions.”

It all sounds perilously close to a word that no one in Mr. Obama’s camp wants to be caught uttering: nationalization. read more