Diary

MI Morning Update 12-12-08

691 DAYS UNTIL ELECTION DAY

December 12, 2008

QUOTE OF THE DAY:

"There is nothing wrong with being conservative. There is nothing wrong with having socially conservative views — I don’t object to that. But if the party wants to have a future in this country, it has to face some realities. In another 20 years, the majority in this country will be the minority."
– Colin Powell

MORNING UPDATE:

MICHIGAN STATE UNIVERSITY… was selected by the U.S. Department of Energy to receive $550 million to establish the Facility for Rare Isotope Beams, beating out Illinois-based Argonne National Laboratory. Over $1 billion of economic activity will flow into the state’s economy as a result of the FRIB over the next decade, a June report by Anderson Economic Group said. AEG said the construction of the facility and other spin-off causes would create 5,783 single-year jobs in the state.

BISBEE THINKING OF SCHAUER SEAT: Former Rep. Clark Bisbee, a Jackson Republican, said that he is considering a run to fill out the term of Senate Minority Leader Mark Schauer (D-Battle Creek) who won a seat in Congress. State Rep. Mike Nofs is the only Republican who has publicly announced his intention to run when the Governor declares a special election to fill that vacancy.

ILLINOIS TROUBLE GETS CLOSER…President-elect Barack Obama’s chief of staff, Rahm Emanuel, refused to take questions from reporters this morning about whether he was the Obama “advisor” named in the criminal complaint against Gov. Rod Blagojevich. Who knew what, when?

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TODAY’S TOP STORIES

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Senate rejects aid for auto industry

David Shepardson and Gordon Trowbridge / Detroit News Washington Bureau

WASHINGTON — Last-minute talks to save General Motors Corp. and Chrysler LLC from collapse fell apart late Thursday after Senate Republicans rejected a compromise $14 billion auto bailout deal.

Senate Majority Leader Harry Reid, D-Nev., called it "a loss for the country."

"I dread looking at Wall Street tomorrow," Reid said after the talks collapsed. "It’s not going to be a pleasant sight. This is going to be a very bad Christmas for many people."

Union balks and $14B auto bailout dies in Senate

By JULIE HIRSCHFELD DAVIS and KEN THOMAS

WASHINGTON (AP) – A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year’s end.

Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit’s beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.

The breakdown left the fate of the auto industry – and the 3 million jobs it touches – in limbo at a time of growing economic turmoil. General Motors Corp. (GM) and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. (F) says it does not need federal help now, but its survival is far from certain.


How a Governor Self-Destructed

By Steven Gray / TIME

Wednesday was Rod Blagojevich’s 52nd birthday, but you can bet it was not a happy one. After having been charged by federal authorities with trying to sell the U.S. Senate seat that President-elect Barack Obama vacated, the Illinois governor spent most of the day hidden from view inside the state office building in downtown Chicago. The few allies he had left have vanished. And anyone who might have been among the unnamed Senate candidates in the detailed charges against Blagojevich have been busy putting distance between the governor and themselves. Among those were Congressman Jesse Jackson Jr., who has hired a lawyer to accompany him to a meeting with federal prosecutors on Friday. (See TIME’s Top 10 Scandals of 2008.)

But it is Blagojevich who continues to be the target of public outrage. Talk-radio hosts in the state fielded calls from citizens who wondered how the governor could attempt anything so brazen amid what were clearly ongoing federal investigations into some of his activities. "It’s as if it didn’t register [with Blagojevich]," says Jay Stewart, executive director of the Illinois Better Government Association, in Chicago. "Even by our crass, low standards in Illinois, it’s stunning." Most polls had the governor’s approval rating in the low two digits, from 16% to about 25%, but a recent survey had Blago (as the Illinois public has grown to call him, unflatteringly) at an incredible subbasement-level 4%


Is Emanuel the adviser on gov tape?

BY FRAN SPIELMAN AND ABDON M. PALLASCH Staff Reporters

President-elect Barack Obama’s chief of staff, Rahm Emanuel, refused to take questions from reporters this morning about whether he was the Obama “advisor” named in the criminal complaint against Gov. Rod Blagojevich.

The complaint states Blagojevich wanted a promise of a high-level appointment or some other reward for Blagojevich in exchange for Blagojevich naming Obama’s friend Valerie Jarrett to replace him in the U.S. Senate.

Emanuel was uncharacteristically absent from Obama’s news conference this morning. He was spotted two hours later in the lobby of Chicago’s City Hall. He was there to listen to his two children performing in a concert with their school, Anshe Emet.


GM board hired advisers to consider bankruptcy

DETROIT (Reuters) – General Motors Corp hired outside advisers to weigh bankruptcy, but the board determined that a filing was not an option for the struggling automaker, a GM spokesman said on Thursday.

"We said all along that the board had considered bankruptcy and had concluded it was not a viable option," GM spokesman Tony Cervone said.

"The board continues to meet frequently and to weigh all options and has retained appropriate advisers for all contingencies."

GM is lobbying for a share of a $14 billion auto rescue package stalled in Congress and has warned it could run desperately short of cash by the end of this month without an emergency federal loan.


Wage issue kills Big 3 deal in Senate

S.A. Miller

Senate leaders gave up Thursday night on a $14 billion automaker bailout, sunk by the refusal of the autoworkers union to agree to the concessions that Republicans had demanded as their price for support.

After a negotiating marathon dragged into the night, Senate Majority Leader Harry Reid, Nevada Democrat, pulled the plug on efforts to tweak the bailout deal brokered by Democrats and the White House but opposed by Republicans.

The talks broke off when the United Auto Workers refused Republican demands that the union set "a date certain" by which its members would have a lower pay scale, one comparable to such manufacturers as Nissan and Volkswagen.

State doesn’t need to raise fuel taxes to work on roads

Gov. Jennifer Granholm & Co. want higher taxes to fund Michigan’s roads. She is not satisfied with her recent personal income tax rate and business tax increases.

But, tax increases are not needed. Instead, tax policy reforms would provide substantial road money and spur automobile purchases.

First, the 6 percent sales tax drivers pay in the price of gasoline should be dedicated to Michigan roads. At $2 per gallon that is an additional 12 cents per gallon, a 63 percent gasoline tax revenue increase on the current 19 cents per gallon Michigan gasoline tax.


Cox clears Cockrel of any perjury charges

Leonard N. Fleming / The Detroit News

DETROIT — Mayor Kenneth Cockrel declared accusations of perjury a "dead issue" today, after Attorney General Mike Cox closed his investigation into the mayor and found no basis to bring charges.

"I appreciate the thoroughness and swiftness of the attorney general’s decision on this," Cockrel told The Detroit News. "It’s good to have the whole manner behind me."

Cockrel predicted no residual effects of the investigation will impact his candidacy in the Feb. 24 special primary to complete the term of ousted Mayor Kwame Kilpatrick.


Blue Cross credibility takes a hit

There already were good reasons for Michigan lawmakers to postpone a decision on health insurance reform legislation until next year. The package of bills proposes significant changes, ones better considered by a new Legislature, not in this lame-duck session.

Blue Cross/Blue Shield, the state’s nonprofit health insurance giant, has been pushing Lansing to approve the bills. Blue Cross badly wants state lawmakers to change laws that determine how it sets its rates, the degree of government oversight and the ways it can generate profits.

Attorney General Mike Cox has led opposition to the legislation. He argues if the bills pass, Blue Cross would enjoy less state oversight and insurance premiums would increase dramatically.

Greek-inspired demonstrations spread throughout Europe

Paul Haven / Associated Press

MADRID, Spain — Unrest that has gripped Greece for the past six days showed troubling signs of spreading across Europe, as violence erupted in several cities.

Angry youths smashed shop windows, attacked banks and hurled bottles at police in small but violent protests Thursday in Spain and Denmark, while cars were set alight outside a consulate in France. Protesters gathered in front of the Greek Embassy in Rome on Wednesday and some turned violent, damaging police vehicles, overturning a car and setting a trash can on fire.

Authorities say the incidents have been isolated so far, but acknowledge concern that the Greek riots — which started over the police killing of a 15-year-old on Saturday — could be a trigger for anti-globalization groups and others outraged by economic turmoil and a lack of job opportunities.