The New New Deal

A deal is done. Congress showed remarkable speed in reaching agreement on an economic recovery plan that the Wall Street Journal says will be the nation's "largest economic rescue programs since Franklin Roosevelt launched the New Deal." The new price tag is $789.5 billion, not quite as much as the Obama administration initially dreamed up but still enough "to shower hundreds of billions of dollars in tax relief on individuals and businesses and spark an infrastructure building boom, from the nation's ports and waterways to its schools and military bases." The Financial Times reckons the speedy work by lawmakers will enable President Obama to sign the recovery package into law by his initial target date of Monday, Feb. 16.

Not everyone in the Obama administration was in an exultant mood yesterday. Treasury Secretary Timothy F. Geithner was on the defensive much of the day. Geithner defended the financial rescue plan he unveiled on Tuesday and its lack of detail in testimony to the Senate budget committee, the Washington Post reports. "I completely understand the desire for details and commitments, but we're going to do this carefully," Geithner testified, adding that the deliberate approach is necessary to "avoid putting the government in a position that 'requires quick departures and changes in strategy,' " the newspaper writes. Another reason for the delay is that Geithner "has yet to settle on the exact structure of the programs."

Meanwhile, the too-big-to-fail club had its day in Washington yesterday to answer a series of questions about how they are spending the billions in bailout cash they've received. For anybody hoping to see the country's biggest bankers (current and former) take a public scathing, it didn't happen quite that way. As the New York Times writes, it was "instead the equivalent of a slow burn," adding, "the pitchforks were tabled—for the most part." The Los Angeles Times calculates $387.5 billion out of the $700 billion TARP outlay has already been committed to faltering companies like Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley, leaving about $300 billion for homeowners on the brink of foreclosure. "I just don't believe that's enough money to fix housing and banking," Sen. Lindsey Graham  said of the remaining TARP money. "I just wish you would say that, because you're going to come up here and ask us for more money."

The bankers did dodge tough questions on bonuses, though, the NYT writes, but they faced a series of questions about why lending seems to have dried up and, of course, offered assurances that they could adequately trace where the bailout money has gone.

The clock continues to tick for Mel Karmazin's Sirius XM Radio. The WSJ this morning reports that Sirius is courting a white knight in the form of John Malone's Liberty Media. Citing sources, the newspaper writes that Sirius and Liberty Media are in advance talks for some kind of financing deal with an aim to "fend off an unsolicited takeover approach [for Sirius] from satellite entrepreneur Charles Ergen." As Sirius faces bankruptcy, Dish Network's Ergen has been buying up Sirius debt in recent days in the hopes of taking control of the satellite radio network on the cheap. The WSJ says the Sirius-Liberty negotiations remain far from resolved, and Sirius is running out of time. Meanwhile, Karmazin is trying to renegotiate a series of high-priced programming contracts with the likes of Oprah Winfrey and Major League Baseball, BusinessWeek reports. The talks aren't going well. BusinessWeek cites sources who say Karmazin's meeting with MLB didn't go his way. And the broadcast deal won't expire until 2015.

"Troubled mining group" (now there's a phrase you wouldn't have expected just one year ago) Rio Tinto has gratefully grabbed a $19.5 billion cash injection from the Chinese state-owned company Chinalco at the same time that the Anglo-Australian mining giant announced a 50 percent fall in full-year profit, the FT reports. The investment—China's largest in a foreign company—raises Chinalco's stake in Rio to 18 percent from the current level of 9 percent, writes the BBC, but it is almost certain to come under tough scrutiny by regulatory authorities. Immediately following the announcement, Australia's government moved to tighten foreign-ownership laws, reports the Sydney Morning Herald.

Finally, back to New York, where the Madoff Ponzi plot thickens. CNN reports that Bernard Madoff's wife withdrew $15.5 million out of a Madoff-related brokerage firm in Massachusetts just weeks before his arrest. This revelation comes at the same time that the WSJ reports how Madoff's scam and its blow to research funding is sending "shock waves throughout the medical and scientific communities—with far-reaching implications for everything from diabetes research to palliative care."