In a press conference with Senate Minority Leader Mitch McConnell, House Minority Leader John A. Boehner acknowledged that a stimulus package was needed to address the ailing economy, but said a balance was needed.

"We can’t bring prosperity with more and more government spending," Boehner said.

The Boehner and McConnell press conference was scheduled for just minutes after President-elect Barack Obama used his most forceful language yet in pressing Congress to pass a massive economic rescue package. McConnell and Boehner have so far offered softer comments about the stimulus, while the conservative caucuses in each chamber are lining up votes to oppose the stimulus.

At several points in the press conference McConnell called the nation’s current $1.2 trillion deficit "eye-popping," and suggested that wild stimulus spending could upset the nation’s economic infrastructure.

In his speech today, Obama said he was cognizant that his $800 billion package would further balloon the deficit.

But, Boehner said, "Actions speak louder than words."

McConnell reiterated his call for a review of the nine bills fiscal 2009 that had already gone through the Appropriations Committee. He also urged oversight in any funds distributed at the state level.

In a statement, House Minority Whip Eric Cantor reiterated the GOP concern about deficit spending.

"Republicans will work tirelessly with President-elect Obama to offer serious solutions that will get our economy back on track," Cantor said. "We will stand with America’s middle class families and protect their tax dollars from efforts to spend billions on wasteful pork-barrel projects, special interest earmarks, and other nonessential items. In this economy, the government cannot waste dollars that hardworking taxpayers send to Washington."

"That’s going to happen," Leahy said at a Thursday news conference with a dozen leading law enforcement officials. "He will have an awful lot of Republican votes."

Leahy said he called the news conference after Republicans “seem intent on moving the bar” on considering Holder’s nomination. Republicans have publicly criticized Holder for failing to stand up to President Bill Clinton on the Marc Rich pardon back in 2000.

Calling Holder "a prosecutor’s prosecutor," Leahy added, "I don’t have any question about his independence whatsoever."

"Remember, it was President Clinton who made that pardon," Leahy said, adding that he was critical of Clinton’s decision at the time. "That’s a question for former President Clinton. Not for Eric Holder."

Leahy also called out Republicans for confirming former Attorney General Alberto Gonzales.

"Not a single Republican member of the Senate voted against the nomination of Alberto Gonzales," he said. "Nor has a single Republican member of the Senate said they were wrong to support that nomination.

"By whatever standard they used to make their decision to support Alberto Gonzales to be attorney general, the nomination of Eric Holder far exceeds that standard," Leahy added. "I hope there will not be a double standard applied to this well-qualified nominee. He meets fair standard by which to judge this nomination."

Confirmation hearings for Holder will begin on Jan. 15.

Yesterday Doug Frantz became the latest high-profile journalist heading into government, having been named chief investigator for the Senate Foreign Relations under chairman John Kerry.

Frantz, most recently a senior writer at Portfolio, was a top investigative reporter at the New York Times, Chicago Tribune and Los Angeles Times (where he was also managing editor).

But now he’s stepping outside the Fourth Estate for the first time in 36 years, where he worked primarily as a reporter, an occupation he described to Politico as “the best job imaginable.”

“I didn’t leave journalism easily and I’ll always think of myself as a reporter, with a notepad tucked in his back pocket and a lot of unanswered questions,” Frantz said, adding that its an “extraordinary opportunity.”

“For the last several years, my primary focus as a reporter has been on foreign affairs and national security issues and this job offers a chance to explore those areas from a completely new vantage point,” said Frantz, who co-wrote a 2007 book on A.Q. Khan’s network, “The Nuclear Jihadist.”

"And after years of pressing my face to the glass of government, and occasionally breaking a few windows, now I’ve got a chance to see how it works from the inside," he continued. "With luck and help from my colleagues, I will try to keep making a difference."

Frantz already has a working relationship with one new colleague. In 1995, he co-wrote a biography of Washington power broker Clark Clifford with David McKean, who’s just been tapped as the committee’s chief of staff.

The president-elect reiterated his proposals for what he’s billing as the American Recovery and Reinvestment Plan, but he was stark in describing the results of inaction

“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,” Obama said, speaking at Fairfax, Va.’s George Mason University and surrounded by the flags and formality of a presidential event. “More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.”

To address the problem, Obama laid out some of the goals he’ll tie to the massive spending package he hopes to sign into law next month.

He proposed: Doubling the production of alternative energy by 2012, modernizing over 75 percent of federal buildings and improving energy efficiency of 2 million homes, and ensuring that, within five years, every American’s medical records are computerized. 

But his goal was clear — to shock Americans into embracing a second round of massive economic stimulus, even though many are dubious that the first multi-billion shot in the arm actually accomplished anything for the average family. 

Obama warned that the economy “could become dramatically worse” and face unemployment above 10 percent without bipartisan support for a massive government stimulus program that would temporarily add to the record federal budget deficit but would “save or create at least 3 million jobs over the next few years.”

“It is time to set a new course for this economy, and that change must begin now,” Obama said at George Mason University in Fairfax, Va.

The speech is the most dramatic, sobering element so far in what aides promise will be a long and continuing conversation between Obama and the nation about the dire state of the economy and the necessary solutions.

Coming 12 days before his Inauguration, the speech is designed to put pressure on Congress to act within weeks on complex legislation that normally would take months of debate and hearings. But Republicans are warning against undue haste, and can be expected to refer to it in television appearances as “a trillion-dollar spending bill,” even though $300 billion of the $775 billion total — 40 percent — is slated to go for tax cuts to businesses and the middle class.

In comments aimed at leveling with Americans that the worst is yet to come, Obama says: “Only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy.” 

The president-elect acknowledges “that some might be skeptical of this plan,” but promises not to “just throw money at our problems,” but instead “invest in what works.”

“Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy,” he said. “The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.”

Obama also says his “American Recovery and Reinvestment Plan” is only the starting point for his plan to restore e economic stability. He also talks of:

—“a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes.”

—“preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. “

—And “reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.”

The transition’s précis on what it calls “a major speech on the economy” says: “He will make the case for urgent action on an American Recovery and Reinvestment Plan that will save or create over 3 million jobs while investing in priorities like health care, energy, and education that will jumpstart economic growth. This plan will represent not just new policy, but a new approach to meeting our challenges that focuses on responsibility, accountability, and transparency so that we can rebuild confidence and trust in our economy and our markets.”

Here are the excerpts released by Obama aides:

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.

In short, a bad situation could become dramatically worse.

***
There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

That is why we need to act boldly and act now to reverse these cycles. That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.
***
I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.

***

Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.

No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

“I’ve been interested to see how Caroline Kennedy will be handled and if she will be handled with kid gloves or if she will be under such a microscope,” Palin told conservative filmmaker John Ziegler during an interview Monday for his upcoming documentary film, “How Obama Got Elected.” Excerpts from the interview were posted on YouTube Wednesday evening.

“It’s going to be interesting to see how that plays out and I think that as we watch that we will perhaps be able to prove that there is a class issue here also that was such a factor in the scrutiny of my candidacy versus, say, the scrutiny of what her candidacy may be.”

Palin said she remains subject to unfair press coverage of her and her family.

“Is it political? Is it sexism?” she asked. “What is it that drives someone to believe the worst and perpetuate the worst in terms of gossip and lies?”

She observed that Katie Couric and Tina Fey have been “capitalizing on” and “exploiting” her.

“I did see that Tina Fey was named entertainer of the year and Katie Couric’s ratings have risen,” she said. “And I know that a lot of people are capitalizing on, oh I don’t know, perhaps some exploiting that was done via me, my family, my administration. That’s a little bit perplexing, but it also says a great deal about our society.”

The Alaska governor said that when she sees some of the coverage of her daughter Bristol especially “the momma grizzly rises up in me.”

Looking back on the Couric interviews, Palin said she knew things were not going well after their first session and asked the McCain campaign to pull the plug on the remaining sit downs but insisted the campaign made her go through with the rest.

“I knew it didn’t go well the first day, and then we gave her a couple of other segments after that. And my question to the campaign was, after it didn’t go well the first day, why were we going to go back for more?” she said. “Because of however it works in that upper echelon of power brokering in the media and with spokespersons, it was told to me that, yeah, we are going to go back for more. And going back for more was not a wise decision either.”

Palin criticized Couric for the way CBS “spliced it together,” saying that “so many of the topics brought up were not portrayed as accurately as they could have, should have, been.”

She also expressed frustration with Couric’s characterization of her since the interviews. After being shown a clip of Couric complaining to David Letterman that no post-election interviewer has asked Palin why she would not tell the CBS anchor what newspapers she reads, the Alaska governor responded: “Because, Katie, you’re not the center of everybody’s universe.”

“We are staying until it is done,” the California Democrat told reporters shortly before Obama’s scheduled address in Virginia on the package. House and Senate committees are now preparing drafts costing in the range of $775 billion over two years, but Obama has signaled that that price tag may grow given the state of the economy. 

Congress is slated to go home Feb. 14 for its annual Presidents’ Day recess, and that has become the deadline for final passage—now reinforced by Pelosi’s warning that lawmakers will stay in Washington if the work is not done. 

The Senate Finance Committee met behind closed doors Thursday morning to begin bipartisan discussions on what direction to take on major tax and healthcare provisions in the bill. Among the spending initiatives proposed is a plan to accelerate a planned $500 increase in annual Pell education grants for low-income college students. 

Pelosi cited a new Politico poll showing support for the Obama’s economic initiatives, but Democrats are privately more cautious, given the public skepticism after the Treasury Department’s financial markets rescue bill last fall. 

“People want to do something. They just don’t have enough insight into what that is,” Democratic pollster Peter Hart told Politico. “If this is seen as government pork, the public will rebel.” 

Hart said that Obama must be careful to learn from the mistakes made by Treasury Secretary Henry Paulson in implementing the financial rescue fund. “The biggest downside for Obama is Hank Paulson,” Hart said. “Hank Paulson has poisoned the well because of the high-handed manner that he went about this.”