A Slimmer Stimulus?

Can a bipartisan group of senators get spending on the Obama stimulus plan under control before it balloons to well above $920 billion? That was the aim of fierce negotiations behind closed doors Thursday, as a vote looms as early as today. CNNMoney.com is calling it a "big push for [a] smaller stimulus." There is consensus that a stimulus plan is needed, just one that's not quite so big. According to the New York Times, lawmakers were making progress on cuts to the stimulus package. "By early [Thursday] evening, aides said the group had drafted a list of nearly $90 billion in cuts, including $40 billion in aid for states, more than $14 billion for various education programs, $4.1 billion to make federal buildings energy efficient and $1.5 billion for broadband Internet service in rural areas," the newspaper writes, adding that more talks are scheduled for this morning.

Meanwhile, the Obama administration's rescue plan for the financial industry to be unveiled Monday is still a work in progress, the Wall Street Journal reports. The sticking point is, yet again, how to handle toxic bank assets. One idea under consideration is to extend a Fed-funded lending program to entice investors to buy assets such as mortgage-backed securities from stricken banks, the newspaper reports, adding the same Fed program has done something similar with less corrosive assets like credit card, student-loan, and small-business debt. Bloomberg reports Treasury Secretary Timothy Geithner's strategy is to skip the "bad bank" notion as it is too costly and instead extend guarantees for bank's toxic assets. Both Bloomberg and the WSJ say if the government injects any more money into the firms, it will be in the form of the purchase of preferred shares in the banks that would be later convertible into common stock.

Critics of the federal bailouts of teetering companies have some fresh ammunition. A congressional study released Friday has concluded that the Bush administration dramatically overpaid for the banks it bailed out last year, the Washington Post writes. How bad did Uncle Sam do with our money? "Investigators concluded that the Treasury under the federal bailout had invested $254 billion into companies but the preferred stock it got in return had a market value at the time of only $176 billion, or 69 percent of what the government paid," the newspaper writes. Heading the list of least value for the money were American International Group and Citigroup, Reuters reports. One such critic for how the Bush administration handled taxpayers' money is Elizabeth Warren, who heads an oversight panel of how TARP funds were distributed. Yesterday, she accused former Treasury Secretary Herny Paulson of misleading the public and shoddily managing the $700 billion fund, Reuters reports.

Bad news from News Corp. as Rupert Murdoch's media empire reported a $6.4-billion quarterly loss Thursday, the Los Angeles Times reports, as operating profit plummeted across its TV, movie, and newspapers units. The company took a large write-down of $8.4 billion, "about $3 billion of which reflected a decline in the value of the company’s newspaper unit, [an indication that] News Corp. overpaid when it bought Dow Jones just over a year ago for about $5 billion," writes the NYT, citing media analysts. The drop in advertising across TV and newspaper platforms hit News Corp. hard and Murdoch hinted yesterday that he may be forced to cut jobs, writes the Guardian. "The downturn is more severe and likely longer lasting than previously thought," said Murdoch, adding:"We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate."

Don't count on Toyota to up its advertising spending anytime soon. This morning the Japanese auto giant announced that it expects to lose $5 billion in the current fiscal year, the NYT reports. That, it continues, would be "a huge reversal for Toyota, which earned $28 billion in operating profit just last year [and] underscores how the current economic crisis has hurt [a powerhouse] which until recently seemed unstoppable as it dethroned General Motors as the world’s biggest producer of vehicles." Back in the U.S., the push to bailout GM and Chrysler is being hindered by the Obama administration's delay in naming a "car czar", the WSJ reports. A $17.4 billion federal loan agreed back in December was contingent on the two companies submitting "extensive restructuring plans and concession commitments from unions and bondholders by Feb. 17" to a yet-to-be-appointed czar who would have the authority to push the recalcitrant automakers into action. Meanwhile, the Motor & Equipment Manufacturers Association, the main trade body of U.S. auto parts suppliers, is warning of a wave of bankruptcies that "will be disruptive to every automaker worldwide" the FT reports. The MEMA is lobbying the Treasury Department for $25.5 billion in emergency aid.

Finally, it's hardly the equal footing in the workforce breakthrough for which many had been fighting. The NYT reports, "women are poised to surpass men on the nation’s payrolls, taking the majority for the first time in American history." The reason, the newspaper adds, "has less to do with gender equality than with where the ax is falling." Male workers have bit harder by the current staggering round of layoffs—82 percent of those losing their jobs are men, the newspaper reports. It all adds up to some potentially profound socioeconomic changes in America. "Women are now bearing the burden—or the opportunity, one could say—of being breadwinners,” an economist at the Center for American Progress tells the NYT.