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Obama’s Retail Sells

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“The president can’t be the caboose on the train. He basically has to be the engine,” said Snowe, a moderate who stands to be a key ally for Democrats and was one of just three Republicans to support the economic stimulus measure. “I think the foundation can be established at the outset as they’re beginning to shape and draft legislation ... not at the end when you have to react to problems that have already been created.”

Snowe said she witnessed that problem on the stimulus bill, when the initial House measure was written with little input from Obama and was roundly criticized for funding programs that were not targeted at creating jobs or resurrecting the economy.

And she said the administration appears to be making a similar mistake on her stalled legislation, which the White House expressed serious reservations about only after the House passed a measure last week, to tax the million-dollar bonuses handed out at American International Group and other financial industry rescue beneficiaries.

“If they’re not going to accept this legislation and they have decided to abandon this type of approach, then they really have an obligation to be proactive and straightforward with what their intentions are with respect to executive compensation,” she said.

Of course, on Wall Street bonuses, the Obama Treasury Department had been very explicit during the stimulus negotiations that it did not want the legislation to affect retention bonus contracts that had already been signed. Congressional Democrats rewrote their language restricting executive compensation at the department’s request, only to be raked over the coals a month later for the change.

When a public furor erupted over the $165 million in bonuses at AIG, Obama and others in his administration initially stoked the outrage on Capitol Hill by calling the payouts outrageous and vowing to recover them on taxpayers’ behalf. But they pulled back later by saying the Congressional solution of getting the money back through punitive taxation was unconstitutional.

A Gallup Poll conducted last week showed that the public blames Congress more than Obama or even Treasury Secretary Timothy Geithner for the bonus flap.

Sen. Bob Casey (D-Pa.) said Democrats on both ends of Pennsylvania Avenue are still working out the kinks in their new governing relationship.

“You’ve already seen evidence of where there’s a disconnect ... where you’re not sure where they are or you think you know and that’s not accurate,” Casey said. “I’m not sure that as a party in Congress, in conjunction with the party in the White House, so to speak, that we were as well coordinated as we should have been on AIG.”

Casey added that problems with stimulus debate actually brought a mea culpa from the administration. “At one point the White House actually apologized and said we didn’t give you guys enough air cover ... but there was a lot of consultation on the top levels on that and the days leading up to that,” he said.

But Sen. Sheldon Whitehouse (D-R.I.) said creating good policy sometimes means taking a hit in the public relations arena and that Obama’s softer approach will ultimately pay dividends.

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