1. The NY Times reports Treasury would emerge with vast new power.

   The draft legislation, which will be put to a House vote on Monday, gives Treasury Secretary Henry M. Paulson Jr. and his successor extraordinary power to decide how the $700 billion bailout fund is spent…

   Mr. Paulson can choose to buy from any financial institution that does business in the United States, or from pension funds, with wide discretion over what he will buy and how much he will pay. Under most circumstances, banks owned by foreign governments are not eligible for the money, but under some conditions, the secretary can choose to bail out foreign central banks.

   Under the bill, the Treasury is to buy the securities at prices he deems appropriate. Mr. Paulson may set prices through auctions but is not required to do so.

   Rarely if ever has one man had such broad authority to spend government money as he sees fit, with no rules requiring him to seek out the lowest possible price for assets being purchased.

   The LA Times reports Paulson will have no peer.

   Buried beneath the 100-plus pages of detail that Paulson’s financial rescue plan has picked up during its 10-day journey from a Bush administration wish list to a bipartisan congressional compromise is the striking fact that the Treasury secretary got almost everything he sought — an eventual $700 billion and the authority to spend it largely as he sees fit…

   Whether that turns out to be a big problem remains to be seen, however, and for the rest, Paulson’s new powers will be almost breathtaking in their scope.

   He and his successor will have the right to buy not just mortgage-related securities at the heart of the crisis, according to the language of the bill, but under some conditions could buy any financial instrument “the purchase of which is necessary to promote financial market stability.” …

   It even gives him the politically explosive power to cut deals with foreign, not just U.S., banks in some cases.

   AlterNet has lots of pictures as Bailout Protesters Send a Strong Message from Wall Street. In the first round of voting, the House defeated, by a 205-228 vote, the Economic Enabling Act of 2008. A new vote is planned, likely timed for after another stunt by McCain. Meanwhile, stocks are cratering and oil prices have dropped sharply.

Four at Four continues with Mukasey appointing a special prosecutor, high-ranking former CIA official pleads guilty to fraud, and labor unions work to counter members’ racism against Obama.

1. The LA Times reports U.S. blames Iran for delay in Iraq pact. The United Nation mandate that authores U.S. troops in Iraq expires on December 31. Unable to work out an agreement with the Iraqis letting the U.S. stay indefinitely, the Bush administration is trying to get an extension on the U.N. mandate. The Iraqis only want the American troops until 2011.

   U.S. Ambassador Ryan Crocker claimed Iran is “pushing very hard” to block the U.N. mandate extension. Iran, of course, has denied any interference. “In an interview in Baghdad this month, however, the Iranian ambassador to Iraq, Hassan Kazemi-Qomi, made it clear that his country deeply opposes the security agreement on the table as ‘one-sided.'”

   Despite the anti-Iranian rhetoric, what really is holding up the U.N. extension is the U.S. insistence on immunity for U.S. troops. Both the Americans and the Iraqis want an agreement. “My clear sense is that the prime minister is focused on Iraqi concerns,” Crocker said, “not what Tehran or any other regional capital might be saying.”

2. The Washington Post reports Carbon is building up in our atmosphere faster than was predicted. “The rise in global carbon dioxide emissions last year outpaced international researchers’ most dire projections”.

   In 2007, carbon released from burning fossil fuels and producing cement increased 2.9 percent over that released in 2006, to a total of 8.47 gigatons…

   This output is at the very high end of scenarios outlined by the Intergovernmental Panel on Climate Change (IPCC) and could translate into a global temperature rise of more than 11 degrees Fahrenheit by the end of the century, according to the panel’s estimates…

   Moreover, new scientific research suggests Earth is already destined for a greater worldwide temperature rise than previously predicted. Last month, two scientists from the Scripps Institution of Oceanography and the University of California at San Diego published research showing that even if humans stopped generating greenhouse gases immediately, the world’s average temperature would “most likely” increase by 4.3 degrees Fahrenheit by the end of this century. Writing in the journal Proceedings of the National Academy of Sciences, they based their calculations on the fact that new air-quality measures worldwide are reducing the amount of fine particles, or aerosols, in the atmosphere and diminishing their cooling effect.

   The IPCC has warned that an increase of between 3.2 and 9.7 degrees Fahrenheit could trigger massive environmental changes, including major melting of the Greenland ice sheet, the Himalayan-Tibetan glaciers and summer sea ice in the Arctic.

Four at Four continues with gas shortages in the Southeast, suspected terrorists arrested in Germany, and a bonus story on Namibia’s sunken treasure.

1. The NY Times reports Lawmakers agree on outline of bailout. Details are yet sketchy and the Republicans seem to be planning on letting only the Democrats support the bailout, setting them up for election disaster. Despite this:

   Lawmakers in both parties said that few substantive differences and no major obstacles remained. They said the bill would authorize the full $700 billion requested by… Bush, but that Congress was intent on disbursing the money in installments.

   One plan under consideration would release $250 billion immediately, with another $100 billion available at the discretion of the president.

   They also said that there would be limits on pay packages for executives whose firms seek assistance from the government and a mechanism for the government to be given an equity stake in some firms so that taxpayers have a chance to profit if the companies prosper in the months and years ahead.

   The Hill reports the House Republicans claiming They have leverage on bailout. “Republicans in the lower chamber are balking at the bailout package, saying that Democrats will be solely responsible for the ramifications of what they see as a flawed compromise.” House Minority Leader John Boehner (R-OH) “made it clear that… House Republicans would not be a part of” the bailout since it does not deregulate Wall Street nor provide capital gains tax cuts.

   The Washington Post quotes Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, saying that “the negotiators were ‘able to accommodate the bulk’ of Democratic concerns about the plan ‘in very responsible ways’ and that “we are on track, I believe, to pass this.'”

   Frank said lawmakers “are responding, I think, to the central thrust” of the administration’s $700 billion bailout request “but adding collectively a number of things that will make people legitimately feel better about the overall vote.” Noting that some lawmakers have been invited to a meeting at the White House today “to try to break a deadlock,” Frank said he was “glad that we’ll be able to go and tell them that there’s not much of a deadlock to break.”

   This bailout has the hallmarks of a Democratic election loser.

Four at Four continues with Pakistan and U.S. troops fighting each other on the border, Afghans growing nostalgic for Taliban rule, Republican efforts in election fraud, and a bonus story about the nation’s first CO2 pollution permit auction.

For the first time, a senior Bush administration official has admitted to discussing the use of torture by the CIA.

In a written statement to the Senate Armed Services Committee, Secretary of State Condoleezza Rice acknowledged that in 2002 and 2003, she and other high-ranking White House officials discussed the use of torture, including waterboarding, and other coercive methods.

Rice’s and her legal council’s statements were released by Sen. Carl Levin (D-MI), the committee’s chairman. No specific dates were given.

At the time of the White House torture planing meetings, Rice was George W. Bush’s National Security Advisor. According to the Los Angeles Times, Rice admits Bush officials held White House talks on CIA interrogations, she and other White House officials “discussed simulated torture techniques that elite U.S. soldiers were subjected to as part of a survival training program”.  

1. McClatchy Newspapers report Iraq’s parliament approves landmark elections law. Iraq’s parliament unanimously passed the provincial elections law after months of fighting. “A debate over who will control Kirkuk, an oil-rich northern city, was the main sticking point delaying an agreement during the last legislative session.” Parliament decided to sidestep this concern, and postpone elections in Kirkuk.

   The passage of the law means elections to choose provincial and local leaders across Iraq can move forward. It’s unclear whether they will be held by the end of the year, as the United States had hoped.

   The NY Times adds “In passing the bill, the lawmakers simply delayed dealing with the two most divisive issues they faced: how to resolve a quarrel among ethnic groups over the control of the oil-rich city of Kirkuk in the north and how best to achieve political representation for Iraq’s Christians and other minorities.”

   The elections are to be held by the end of January 2009. A report on how best to resolve the Kirkuk dispute is due to the parliament by March 31.

   Meanwhile, the LA Times adds In Baqubah, an ambush on a police checkpoint leaves 22 dead. “The U.S. military said the death toll was 14 policemen; as well as eight members of the Sons of Iraq movement. Police officials in Baghdad said two colonels and a lieutenant colonel were among the dead police officers. The military said rocket-propelled grenades and machine guns were used in the attack.”

Four at Four continues with North Korea restarting its nuclear program, power from cows and the sea (but not sea cows), and a shipwreck finally being removed off Oregon’s coast.

The Morning News is an Open Thread.

Surprise! Once again I’m filling in for ek this morning. Here’s a few stories from home and around the globe. What else is happening?

USA

1. Bloomberg – Americans Oppose Bailouts, Favor Obama to Handle Market Crisis

   Americans oppose government rescues of ailing financial companies by a decisive margin, and blame Wall Street and President George W. Bush for the credit crisis. By a margin of 55 percent to 31 percent, Americans say it’s not the government’s responsibility to bail out private companies with taxpayer dollars, even if their collapse could damage the economy, according to the latest Bloomberg/Los Angeles Times poll. Poll respondents say Democratic presidential nominee Barack Obama would do a better job handling the financial crisis than Republican John McCain, by a margin of 45 percent to 33 percent. Almost half of voters say the Democrat has better ideas to strengthen the economy than his Republican opponent. Six weeks before the presidential election, almost 80 percent of Americans say the U.S. is going in the wrong direction, the biggest percentage since the poll began asking that question in 1991.

2. NYT – McCain Aide’s Firm Was Paid by Freddie Mac

   One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement. The disclosure undercuts a statement by Mr. McCain on Sunday night that the campaign manager, Rick Davis, had had no involvement with the company for the last several years. Mr. Davis’s firm received the payments from the company, Freddie Mac, until it was taken over by the government this month along with Fannie Mae, the other big mortgage lender whose deteriorating finances helped precipitate the cascading problems on Wall Street, the people said.

1. The LA Times reports Financial industry’s campaign donations could help it in bailout.

   Since 2002, the sector has contributed more than $1.1 billion to congressional candidates, with Republicans getting an edge during that period, according to federal lobbying records. The figure does not include millions more donated to the favored charities of prominent politicians and the hundreds of millions spent on lobbying. The sector is among the biggest donors overall; by comparison, another major category, lawyers and lobbyists, gave $646 million during the same period…

   In the 2008 election cycle, the list of the top recipients of donations from the financial services, insurance and real estate sectors (all likely to be affected in varying degrees by the legislation) included the leading presidential candidates….

   “If you trace the movement of Wall Street money through Washington, it pretty well tells the story behind this and any other piece of legislation,” said Lynn Turner, former chief accountant for the Securities and Exchange Commission. “The way Washington works, it is the lobbyists and the executives who hire them that get what they want. And it is the taxpayer who usually ends up getting fleeced.“

   The fix is in.

2. The Washington Post reports Japanese Banks Snap Up Wall Street Holdings.

   Major Japanese banks, fat with cash and nearly free of toxic investments, are spotting opportunity in the global financial mess and snapping up substantial holdings on Wall Street.

   Because many Japanese banks and brokerage houses have vast amounts of cash while U.S. banks are increasingly desperate for it, analysts here say more major purchases are likely in coming days and weeks as the financial crisis churns on…

   “This is a once-in-a-generation opportunity,” Kenichi Watanabe, president and chief executive of Nomura, said in a statement. He added that “our ability to capitalize on this opportunity in spite of such volatile markets reflects our financial strength.”

   Um, I thought Wall Street was having difficulty finding buyers?

Four at Four continues with declining U.S. immigration, Obama backing off campaign promises, and bonus story about ignoring the real crisis.

1. The Washington Post reports on A sense of resentment amid the ‘For Sale’ signs. “The bailout doesn’t smell right to the people” and “this may be a Main Street bailout backlash in the making… the central fact of the matter hasn’t been lost on anyone”.

   The taxpayers are on the hook for the bad judgment of others. And they say they don’t like it.

   They didn’t break it, but now they’ve bought it. Political leaders and financial titans say the bailout is necessary to save the economy, but on the ground, … people think that the bailout will reward the wrong people…

   The anti-bailout sentiment appears to cut across class lines.

   Meanwhile, the bailout is growing bigger. The NY Times reports Terms are set as bailout debate begins.

   Financial companies were already lobbying to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities as well as making foreign companies eligible for government assistance.

   That’s right, American taxpayers are being asked to bailout foreign financial firms. From the Treasury Fact Sheet:

   Asset and Institutional Eligibility for the Program. To qualify for the program, assets must have been originated or issued on or before September 17, 2008. Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets.

   As Calculated Risk remarks that not only does this taxpayer “bailout covers any securities issued on or before last week… but the second sentence is even more surprising: eligibility has been changed from ‘financial institution having its headquarters in the United States’ to ‘significant operations in the U.S.’ – and even ‘broader eligibility’ if Paulson so decides.”

   The NY Times headline reads the Two presidential candidates back bailout, but with caveats, but McCain “would press on with his plan to extend the Bush tax cuts and to cut others. Contrary to the warnings of fiscal analysts” and Obama “would press ahead with his plans to overhaul the health care system to insure more people, make college tuition more affordable, give a tax cut to the middle class and raise taxes on those making over $250,000 a year.”

   This kind of talk is silly in light, as The Hill reported on Friday, the Wall Street bailout could ‘cripple’ federal budget. “This cripples the domestic policy priorities of the next president, whoever it is, because it soaks up so much cash,” said Jim Cooper of Tennessee, a senior Democrat on the House Budget Committee and a former investment banker.

   Throw in that Peter Orszag, the head of the Congressional Budget Office, said “The nation is on an unsustainable fiscal course.” The CBO assessment made before the current surge in bailouts was announced. So taken together, any promises made now are about akin to the big stinky pile of crap that is the U.S. financial system.

Four at Four continues with the American Dream alive and well in Brazil, Viktor Bout’s extradition hearing, and the stealthy creep of conservatism on college campuses.

1. Words fail me. We the People are getting the short end of the stick here.

   The NY Times reports the U.S. acts to shore up money funds and temporarily limits short selling.

   America’s Gang of Four Federal Reserve Chairman Ben Bernanke, George Wanker Bush, Treasury Secretary Henry Paulson, and Securities and Exchange Commission Chairman Christopher Cox.

   Realizing that its case-by-case approach was not sufficient, the federal government has started to put in place a sweeping plan to restore confidence in the financial markets…

   The actions began to unfold Thursday with discussions between the Treasury, Federal Reserve and Congressional leaders on what could become the biggest bailout in United States history, a plan likely to authorize the government to buy distressed mortgages at deep discounts from banks and other institutions…

   In a move against traders who have sought to profit from the financial crisis by betting against bank shares, the Securities and Exchange Commission issued a temporary ban on short sales of 799 financial stocks, following similar action in Britain on Thursday.

   And the Treasury, moving to restore confidence in another financial bedrock, said that it would guarantee, at least temporarily, money market funds up to an amount of $50 billion in order to ensure their solvency, a startling intervention into an area that had been considered among the safest investments.

   Meanwhile, the Washington Post reports Bush Urges Congress to Enact Rescue Package

   President Bush, warning that urgent steps are needed to “to preserve America’s financial system,” asked Congress today to put aside partisan differences and enact a historic rescue package now being finalized by his administration…

   Bush also shot back at growing criticism of the administration’s role in the meltdown from Capitol Hill and both major presidential campaigns.

   “There will be ample time to debate the origins of this problem,” Bush said…

   Bush, who portrays himself as a conservative free-market advocate, also defended steps that have put billions of taxpayer dollars at risk. “Government intervention is not only warranted; it is essential,” he said.

   No accountability for the bankers and politicians responsible for this capitalist meltdown and the workers are left holding a big bag of bad debt.

Four at Four continues with news of food shortages in Afghanistan, the Pentagon’s pollution war, and a Mozart discovery.