IE 11 is not supported. For an optimal experience visit our site on another browser.

'1600 Pennsylvania Avenue' for Tueday, February 3

Read the transcript to the Tuesday show

Guest Host: Savannah Guthrie

Guest: Andrea Mitchell, John Yang, Olympia Snowe, Chris Cofinis, Todd Harris, A.B. Stoddard, Jack Reed, John Harwood, Jonathan Band, Brad Adgate, Jonathan Allen High: Tom Daschle withdraws as nominee for HHS secretary.

Spec: Tom Daschle; Politics; Government

SAVANNAH GUTHRIE, MSNBC HOST:  Tonight, Tom Daschle says it was over the moment he read today‘s “New York Times.” We‘ll have a closer look at the emotional decision to withdraw his nomination over tax issues.

Plus, damage control.  Before all this happened President Obama had already agreed to five network television interviews this afternoon.  Press Secretary Robert Gibbs had a rough day as well.

Then later, the Senate stimulus debate.  Democrats are determined to win over moderate Republicans.  Including Senator Olympia Snowe of Maine.  We‘re going to talk with her live.

Our muckraker of the day has some reporting on Judd Gregg, he is the new commerce secretary nominee and may surprise you a bit.

And is Joe the Plumber really being sought out for advice by House Republicans?  That‘s all tonight on 1600 PENNSYLVANIA AVENUE.

Welcome to the show.  I‘m Savannah Guthrie in for David Shuster tonight.  It‘s been a roller coaster day as the president lost not one but two of his nominees over tax problems today.  Nancy Killefer as performance czar and Tom Daschle as health and human services secretary.  NBC NIGHTLY NEWS anchor Brian Williams interviewed President Obama today and he asked him about losing those two nominees.


BRIAN WILLIAMS, NBC NEWS ANCHOR:  “Philadelphia Inquirer” today, “Surely President Obama can find qualified people to serve in his Cabinet who are not hustling to write overdue checks to the IRS.”  You lost two nominees, two appointments today.  Did that make you angry?

BARACK OBAMA, U.S. PRESIDENT:  It made me angry and disappointed.  And it‘s something I have to take responsibility for.  I appointed the folks.  They are outstanding people.  I think Tom Daschle as an example could have led this health care effort, a difficult effort better than just about anybody.

But as he acknowledged this was a mistake.  And I don‘t think it was intentional on his part but it was a serious mistake.  He owned up to it.  And ultimately made a decision that we couldn‘t afford the distraction.  I‘ve got to own up to my mistake which is that, you know, ultimately it‘s important for this administration to send a message there aren‘t two sets of rules.  One for prominent people and one for ordinary folks who have to pay their taxes.  You know, so I‘m frustrated with myself, with our team, but ultimately my job is to get this thing back on track because what we need to focus on is a deteriorating economy and getting people back to work.


GUTHRIE:  Let‘s bring in NBC‘s Andrea Mitchell.  Andrea, you spoke to Tom Daschle this afternoon moments after we all learned of his withdrawal.  What did he tell you about the decision?

ANDREA MITCHELL, NBC NEWS CORRESPONDENT:  He was really heartbroken.  He was very emotional.  It was quite a sad moment.  I‘ve known him for a long time.  You could feel the emotion.  I couldn‘t see him over the telephone but he sounded tearful and said he read the “New York Times,” Savannah, and felt he could not continue.  That he was a distraction.  That he would never be able to get health care reform done and that the Republicans on the Hill would not permit him to.  And, you know, frankly knowing his passion for health care and the book he wrote, the interview he did on MEET THE PRESS about that issue, you know, a full extensive interview on that subject, that‘s why he came into this administration and had this special job carved out for him.  Health care czar.  Not only running Health and Human Services as big of a job that that is.  It was a really tough moment.

GUTHRIE:  Andrea, you just heard the president saying he was angry and frustrated with himself, with his team.  Should he be?  Are these rookie mistakes in the vetting process?

MITCHELL:  Well, certainly for a team as you and I were talking earlier pointed to their very lengthy questionnaire and the extensive vetting and fact they were so fast, so quick off the mark and had the transition going months and months before hand.  Surely this is a mistake.  They have to look to themselves, they have to look to their attorneys, and to all the people who were doing the vetting.  Ultimately as the president said, he took responsibility in the interview with Brian Williams we‘re going to see on NIGHTLY NEWS tonight and that it is Tom Daschle‘s acknowledged mistake for not having realized not only the tax problems but I think also the perceptual problems that he had taken, for legitimate reasons he did speeches for health industry clients and now wanted to be in charge of health care reform.  And the optics of that weren‘t great.

GUTHRIE:  Well, the Obama administration certainly had set the bar very high for itself.  And then kind of shimmied under it, right?  Have they made themselves a target here by enjoying all those headlines about these sweeping ethical rules and finding themselves on the business end of them just a few days later?

MITCHELL:  Sure.  Good point.  Because they bragged about their ethics rules, about their raising the bar.  And we dutifully wrote the stories that they were establishing new rules.  You can‘t go, you know, lobby afterwards at all.  This is - there will no longer a revolving door.  What they hadn‘t, I think, figured on was the fact some of the people they were looking at were highly experienced and perhaps uniquely qualified as Tom Daschle arguably was to both know the basics, fundamentals of health care, of the industry and to come in and know how to deal with the Hill.  As the majority leader and a very popular majority leader, he, you know, knew both sides of the Hill and could have done this probably better than anyone else.

GUTHRIE:  Andrea, we‘ve got to leave it—Well, we‘ll never know now, will we?  Andrea, thanks so much for that report.  I want to go to now to our guest from Capitol Hill, Senator Olympia Snowe, Republican from Maine and member of the Senate Finance Committee.  Senator, let me just start with the news.

Do you think Tom Daschle did the right thing by withdrawing?

SEN. OLYMPIA SNOWE, ® ME:  Well, I think he recognized it was in the best interest of the country and for the president and Andrea indicated it was a major distraction and obviously deeply troubling.  Tom Daschle I‘ve known since 1978 since we were served, we were elected together to the U.S.  House of Representatives.  So he‘s had a long and distinguished career.  But obviously this was a major setback and I think he believed this was the right thing to do.

GUTHRIE:  He had that closed-door meeting with some members of the Finance Committee last night.  He seemed to have weathered the storm.  Do you feel he had to do this?  I mean, don‘t you think he could have been confirmed and survived?

SNOWE:  Well, you know, I think he understood the difficulties of the process.  It was going to be an ongoing examination.  I was at the meeting last night.  And obviously the committee had not finalized its report.  I had reserved judgment till we could have all of the information.  The hearing was tentatively scheduled at least for next Tuesday.

So things were on its way.  But obviously I think Tom understands the Hill and understands the Senate and he recognized this would be continuing ongoing debate given I think as well the compounded effect of all these events, you know, raises questions in the minds of the American people in terms of what rules are going to be applied to everyone.

GUTHRIE:  Let me read a statement that one of your colleagues on the committee, Senator John Kerry released today.  He was disappointed that Daschle had withdrawn.  He wrote, “Today is not a good day for the cause of health care reform when the smoke clears and the frenzy has ended no one will believe this unwitting mistake should have erased 30 years of selfless public service and remarkable legislative skill and expertise on health care.”

Do you think Senator Kerry has a point there?  Do we expect perfection in nominees?  And has that sort of become the enemy of the good?

SNOWE:  I understand that.  You know, I agree we have to look at these things.  You know, very carefully.  Obviously we have an obligation to do that.  I just wonder about the process in and of itself that these issues weren‘t detected earlier so that they could have been dealt with in a much more deliberate fashion.  And so that the administration and the transition team at the time understood what was at stake with the nominees before this point.

Even with Tim Geithner we didn‘t—we were not informed of those attached transgressions until the day before his originally scheduled hearing.  So something obviously went terribly wrong in this process and we‘ll have to look at it from our standpoint and certainly the administration has to look at it from its perspective as well.

GUTHRIE:  Do you worry about the perception problem?  I know you‘re well aware Congress doesn‘t have great approval ratings.  People don‘t think much of Washington.  And stories like this that sort of underscore the narrative of what‘s going on up there.  People don‘t pay their taxes.  Do you worry about the perception problem?

SNOWE:  Yes.  Especially at this time, Savannah.  And that‘s what I‘ve heard from constituents in Maine.  They wonder what‘s going on and who exactly do these rules apply to?  Who has to abide by them?  Are certain people held by one standard and average Americans are held by another?  So yes, it does stand conflicting perceptions in terms of how things are handled here in Washington versus the rest of America.  And that‘s something we have to be concerned about given the times that we are in.  What is seen on Wall Street, for example.  The rescue plans for financial institutions.  Executive compensation and bonuses that are inconceivable that they would be given at this time.

So all, collectively, creates a damaging picture and undercuts the American peoples‘ confidence in their institutions and elected officials.

GUTHRIE:  Real quickly, Senator Snowe, on a stimulus, how much have you been courted by the Obama administration?  And are they listening to you?

SNOWE:  You know, I‘ve had a lot of conversations and will have another conversation tomorrow with President Obama.  But I‘ve had conversations with the vice president and others in the administration.  And that will be an ongoing process until the conclusion of the bill before the United States Senate.  Hopefully we can bridge the divide and create a bipartisan consensus, address some of the issues that we need to address in the stimulus package.  And that is removing unnecessary spending and is not targeted to the objectives of this legislation which is to stimulate the economy and to jumpstart economic activity and create jobs.  That‘s what it should be all about.

GUTHRIE:  OK.  All right.  Senator Snowe.  Thank you so much for your time this afternoon.

Our coverage of Senator Daschle‘s withdrawal continues here on 1600.  Coming up in a couple minutes, we‘re going to talk to Senator Jack Reid who sits on the committee that oversees health care and ask him about the potential fallout for the Obama White House.

But now let‘s bring in the panel.  Who‘s been waiting so quietly and patiently here.  Thanks for being with us.  We‘ve got Chris Cofinis, Democratic strategist, A.B. Stoddard from “The Hill”, Todd Harris, Republican.  Everybody represented.  Let‘s quick to a poll.  Was he pushed or did he leave of his own volition?  Real quick.

CHRIS COFINIS, DEMOCRATIC STRATEGIST:  I think he left on his own volition.  There‘s no question.


HILL:  I think he did too.  But that doesn‘t mean there is a question about whether he should have been pushed.

GUTHRIE:  And you, Todd?

TODD HARRIS, REPUBLICAN STRATEGIST:  I agree with Chris.  I think it was his own volition.  But I think in a matter of days because Republicans would have dragged on the confirmation process and he might have ended up getting pushed.

GUTHRIE:  What happened overnight?  Seems yesterday that he was going to survive and this morning he reads the “New York Times” and has a crisis of conscience or recognizes the political realities.  What do you think led to this?

COFINIS:  I think he didn‘t want to be a distraction.  I think when considering the enormous emotion that‘s going to be raised when you start talking about health care reform.  I think he decided himself for whatever reason he decided to put the country first and focus on the need to get health care reform, didn‘t want to be an obstacle to that.  My own concern with that is here you have a man who spent 30 years in public service.  When you weigh that versus a couple mistakes, I think we have come to the point we‘re expecting perfection, people who run for these type of positions.

GUTHRIE:  Perfection is one thing.  Not paying more than $130,000 in taxes .

COFINIS:  I agree, but to me the measure of a person or leader is when you make a mistake you own up to it and you correct it.  And that‘s what he did.

GUTHRIE:  Eventually.  OK.  Is there a larger issue about the vetting process here?

STODDARD:  Yes.  So much of this is so interesting what Senator Snowe referred to about what happened here.  What broke down.  And I think so much of this is timing.  Lucky Tim Geithner.  He‘s treasury secretary now.  Senator Daschle, what happened was he left the Finance Committee last night and he saw the total anguish and discomfort of colleagues who love him who served with him for years, who respect him and look up to him.  People meant all of them he‘s helped.  And all of them would have to vote for their friend.  They stood their shifting in their shoes and he knew that this was a very tough vote for President Obama and him to ask them to make.  I think it is the—maybe I‘m being an idealist.

But I think if you come out early on and say, here is our new nominee.  He has a problem he wanted to talk about and he‘s addressed it.  It was the timing of this.  It sort of eeped out and it was oopsy fashion.  None of us Americans have someone to loan us a chauffeured Cadillac as a gift.  And it was the timing and the perception.

And if you fix the vetting process, I think there was a way it could have been handled better.

GUTRHIE:  How much are Republicans enjoying this?  Do they see the bloom coming off the rose of the Obama administration?

HARRIS:  I don‘t think anyone—there are some people who say they want to see—Rush Limbaugh has said he wants to see the president fail.  I think most Republicans in Congress don‘t want to see him fail.  I think there‘s probably some just desserts as far as if you live by a higher standard you die by a higher standard.  But A.B. is exactly right.  That the president, as we saw, in his interview with Brian Williams said we can‘t have two standards.  We can‘t have one for my administration and one standard for the rest of the country.

But the fact is that there are two standards.  The Geithner standard and now there‘s the Daschle standard.  And it does get to the importance of timing and perception in politics because had Daschle been first maybe he would have been the one who got the pass and Tim Geithner would now be the one .

GUTRIE:  How much does Nancy Killefer enter into this?  She was the chief performance officer .

HARRIS:  Collateral damage.

GUTHRIE:  Well, right.  She was having to withdraw over some tax issues which I don‘t think we know the end of yet.  Do you think she somehow led up to this as well because there was this perception, wow, so her nomination gets blown up?  But someone like Geithner or Daschle survives because they‘re the good old boys from Washington.  Do you think that entered into it at all?

COFINIS:  Possibly.  I think for Senator Daschle, it really was a question of, listen, this country needs health care reform and it‘s a seriously challenging policy issue.  The last thing he wants, someone who fought for the issue, is in any way become an obstacle to that.  Unfortunately, I think when you lock at the breadth of experience, as well his skills, he is the right person, would have been the right person to lead this effort.  That‘s the unfortunate part of this.

GUTHRIE:  But it‘s beyond the tax issues, isn‘t it?  Don‘t you think, A.B., it was about the fact he had also spoken to some of these industry groups, made a lot of money off the health care industry that he is now seeking to reform?  Do you think that‘s the long view he took?  It wasn‘t just the tax issues that diminished him but these other influence issues?

STODDARD:  I think as the tax issue came to light, there were also these other questions from his own colleagues in the Senate Democratic Caucus about these other issues.  What did he do for Leo Hindery‘s business?  Why would he give you the car?  What are these groups you‘ve spoken for?  Will they come back when you‘re in charge of this huge sweeping policy area and affect your job?

And I think there were so many questions from both democrats and republicans he realized it wasn‘t just the car and driver and taxes he failed to pay on them.  It was the closeness.  The $5 million he‘s been able to earn in a very short time.  A number of years as leaving as a non-lobbyist.  What did he do for those people?

HARRIS:  I do think on a micro level all of those things are important.  On a macro level this isn‘t about Tom Daschle.  This is Barack Obama.  This is about the campaign Barack Obama ran saying I‘m going to bring real fundamental change to Washington.  A narrative was being created.  They always say it takes three to build a narrative between Geithner and Killefer and Daschle.  It was created they would rush to the cameras and the headlines to announce reforms but then quietly all those reforms had asterisks.

GUTHRIE:  Do you think that narrative has hardened them?

COFINIS:  This is a flip side of that narrative.  And the flip side is you have Republicans not—put aside Rush Limbaugh.  But other Republicans in the Senate gleefully looking at this and saying, oh, isn‘t this great?  The reality is this may be a one, two day story distraction.  But the country is going to measure the success of both parties based on whether they addressed the fundamental issues that matter to them.  And Republicans still have not come up with an type of an idea or agenda that‘s actually going to help improve peoples‘ lives.  They‘re getting gleeful about scoring political points.  That‘s not a long term success strategy for them.

GUTHRIE:  Fine, but real quickly, A.B., could the president have helped himself by dealing with this sooner?  I mean, all accounts today he‘s not the one who asked Daschle to go.  It‘s Daschle who said and only then did he accept the withdrawal.

STODDARD:  Right.  I think the whole vetting process has to be reexamined.  I think he should have dealt with this earlier.  It is unfortunate that as Senator Snowe pointed out that Tim Geithner tax matter was leaked out the last moment.  Oh, whoops, I forgot to tell you about this.  That kind of thing—on top of the fact he has provided a waiver for the number two in command at the Pentagon.  To his strong, strong ethics rules, strongest ever in the history of our country.

He has provided a waiver to chief of staff Tim Geithner.  There are waivers out there, there are already asterisks and caveats.  To Todd‘s points, it is a narrative that‘s thickening.  And three tax evaders on top of those waivers.

HARRIS:  Finally, I would just say we Republicans have assumed that Democrats took their marching orders from “New York Times” but this is actually the first time we‘ve actually seen an example of it.

STODDARD:  Getting lots of Republican fodder today.  Todd Harris, a good day for you, thanks for being with us.  A.B. Stoddard, Chris Cofinis, appreciate it.

There‘s more reaction on the news breaking today that Tom Daschle has withdrawn his nomination to be HHS secretary.  Up next, we‘re going to talk one-on-one with Democratic Senator Jack Reid from Rhode Island.

We‘ll ask him about that.

Plus the selling of the president.  White House lawyers trying to get a handle on who can use the image of the commander in chief.  Should other people be cashing in on all this Obama mania?  Also ahead, everyone knows what it means when a groundhog sees its shadow.  What does the future hold in the animal bites the New York City mayor‘s hand?  We‘re going to delve into that issue.  And look at those pictures a little bit more.  That‘s next on 1600.


GUTHRIE:  Welcome back to 1600.  Today is not a good day for health care reform.  Those were the words of Senator John Kerry after Tom Daschle withdrew his name to be secretary of health and human services because of those tax problems.  Joining me now, Senator Jack Reed, the Democrat from Rhode Island and member of the Senate Committee on Health, Education, Labor and Pensions.  He‘s also a member of the Banking, Appropriations and Armed Services Committee.  OK, senator.  We have got your resume.  I‘ll ask the question of the day.  Did Tom Daschle make the right decision today?

SEN. JACK REED, (D) RI:  He made a very difficult decision where he put the country and success of this president above his desire and sincere desire to serve as secretary of health and human services.  I think he made the right decision but it was a very difficult one for a very decent and honorable man.

GUTHRIE:  You know, senator, when Tim Geithner‘s tax problems first surfaced, the White House defended him saying he‘s the best person for the job at this extraordinary time.  And that because of that, the tax issues, although significant, shouldn‘t disqualify him.  Couldn‘t the same argument have been made for Senator Daschle?

REED:  I think that same argument could have been made for Senator Daschle.  The think the president would have made it, many of my colleagues would have responded to it.  But Tom Daschle made the decision because he did not want to become a distraction to the president‘s important agenda.  The recovery plan we‘re debating today and health care reform.  Again, it‘s his decision and I respect that.  I think we all respect that decision.

GUTHRIE:  Daschle combined a lot of policy knowledge on health care, having studied it for years, written a book on it, as well as a lot of, let‘s face it, practical Capitol Hill know how.  How big a loss is he to the cause of health care reform?  Today, David Axelrod, the senior adviser, saying health care is a bigger issue than one individual.  But how big a loss is this?

REED:  This is, I think, a significant loss in the sense that Tom Daschle combined create substantive knowledge of health care and great knowledge of the institutions of the House and the Senate, member of the budget committee, understood the interaction between the budget and health care legislation.

And he‘s also someone who had a great sense of the demands that health care are making throughout this country.  He did a listening tour weeks before he came before the committee for his confirmation hearings.  But this is an issue that is larger than any one individual.  And I do believe that Tom will continue to make a contribution through his writings, through his advice, through his continued presence in the capital.

GUTHRIE:  Let‘s talk about the stimulus package.  The other big issue that I‘m sure the president wishes everyone was focusing on.  The “Post” reported today that the president feels like he‘s losing the P.R. war on this.  The bill is being perceived as too partisan, laden with pet projects, the usual suspects for Democratic spending.  Are Democrats on the Hill feeling some heat from the White House on this?  What did you hear about the meeting last night when the leadership came over and met with the president?

REED:  Everyone recognizes and the American people more than anyone else that we have to get this package passed.  That the economy over the last year under Bush bled 2.6 million jobs.  That continued policies of the same is not going to work.  The president I think has combined both infrastructure investment and some tax relief particularly for working families that will provide jobs and also increase, we hope, demand and consumption in the economy.

I believe that the differences will be bridged.  In fact, I‘m encouraged because we‘ve engaged in debates and amendments, there does not appear to be a partisan degree of wrangling just for the sake of wrangling.  We‘re going to deal with these issues, we‘re going to move forward, and I hope we pass a bill this week in the Senate.

GUTHRIE:  Your colleague on the Republican side, Senator Shelby, is talking about a filibuster.  Do you think that‘s in the realm of possibility?

REED:  I think it would be a very unfortunate development.  Again, part of this legislation is not just the programs, the investments in infrastructure and jobs and future productivity of the country.  Part of it is restoring and building the confidence of the American public.  That we can deal successfully with this great financial crisis which confronted the president when he took office.

So I believe the public is with the president.  And at the end of the day we will have a bill that will begin to turn around the economic scales that are weighing heavily against American families.

GUTHRIE:  All right.  Senator Jack Reed, Democrat of Rhode Island. 

Thanks for being with us today.

REED:  Thank you.

GUTHRIE:  Coming up next, Washington battles back against Wall Street greed.  The new push to hold the banking industry‘s feet to the fire when 1600 PENNSYLVANIA AVENUE continues.


GUTHRIE:  Welcome back to 1600.  The Obama administration is going on the attack against Wall Street greed.  The White House is looking at a plan to limit executive salaries, bonuses and severance packages for companies that get substantial federal assistance.  For more on all this, let‘s bring in John Harwood, cNBC‘s chief Washington correspondent and political writer for “New York Times.”  Hi John.


GUTHRIE:  OK, so we‘ve had the corporate jet.  We‘ve had the remodeling of the office for a million dollars.  We‘ve had these big bonuses and news about that last week.  What is the Obama administration prepared to do about this and how soon? 

HARWOOD:  They‘ve got to do something to prevent taxpayers from drawing the conclusion that they‘re lavishing billions upon billions to try to prop up institutions that are going to go out and waste the money.  When I talked to Joe Biden, the vice president last week, he said President Obama and I are laying ourselves on the line for more money to rescue these institutions, and the outrage of these bonus payments, the redecorated bathrooms and all that sort of thing is too much to bear. 

So what they‘re trying to do is take the provisions that are in the existing legislation that passed the Congress last year and toughen them up.  Last year, they limited it to 500,000 dollars, the amount that companies can deduct for executive compensation.  They could actually take some of those calls in Congress to limit the compensation, itself, not just the deductibility. 

We heard discussion on Capitol Hill about limiting those salaries to 400,000.  They‘ve already got—Exactly, Claire McCaskill. 

GUTHRIE:  Are they buying that? 

HARWOOD:  I think they might do it for a certain number of executives.  They‘re going to announce their plan as early as tomorrow.  You could see some variant of what McCaskill has talked about.  John McCain also talked about a 400,000 dollar cap last fall.  People on Wall Street said that‘s crazy. 

GUTHRIE:  We can‘t live on that.  We don‘t get up for less than 400,000 dollars a day. 

HARWOOD:  Exactly. 

GUTHRIE:  Let‘s play a little portion of what Bernie Frank, the chairman of the House Financial Services Committee, talked about.  He described these really blunt conversation he‘s been having with some bailout recipients.  Listen. 


REP. BARNEY FRANK (D), MASSACHUSETTS:  As I said to a couple of bankers, here‘s this problem.  People really hate you and they‘re starting to hate us because we‘re hanging out with you.  You have to help us deal with that.  You have to avoid being stupid. 


GUTHRIE:  Is Wall Street doing any soul searching here?  Is it asking itself, why do we have this PR problem?  Or are they saying, they just don‘t understand us in Washington? 

HARWOOD:  I think there‘s a lot of mutual misunderstanding.  People on Wall Street think that politicians are idiots. 

GUTHRIE:  The feeling is mutual. 

HARWOOD:  People in Washington think the Wall Street guys are idiots.  Claire McCaskill said the other day, one of those bankers came up to her and said, you know, I‘m really not an idiot.  But they certainly live in different worlds.  The compensation is completely different.  These Wall Street guys, they get paid like TV anchors, Savannah. 

GUTHRIE:  I have no idea.  I‘m just filling in tonight.  I don‘t know what you‘ve heard. 

HARWOOD:  But it‘s a political problem because they‘re asking taxpayers to step up and salvage this system.  They‘ve got to convince the public that they‘re looking out for the public good. 

GUTHRIE:  Real quick, is there a danger of over-correcting?  Not to take up for these Wall Street bankers that everybody wants to rip on, but at a time when the economy is so fragile, and we‘re trying to get the banking system back going, is over-tinkering with it a problem? 

HARWOOD:  That‘s the challenge.  Wall Street says, we can‘t get good people if you completely interfere with how we can pay them.  They‘ve got to find the sweet spot where there‘s accountability without totally disrupting a business that—Government does not want to run financial institutions.  They want to influence them, but they don‘t want to run them. 

GUTHRIE:  Why not? 

HARWOOD:  Because they don‘t have the expertise.  They‘ve got enough trouble running government agencies. 

GUTHRIE:  OK, but people are talking about it.  John Harwood, stay tuned.  Thanks so much. 

It seems like the nation has Obama-mania, with pictures of the new president showing up everywhere, from bobble heads to comic books.  Is it all about to come crashing down on retailers looking to cash in on the commander in chief?  This is 1600 PENNSYLVANIA AVENUE.


GUTHRIE:  Welcome back to 1600 PENNSYLVANIA AVENUE.  From a yes, you can airfare sale to a Ben & Jerry‘s Yes Pecan ice cream.  Get it?  President Obama‘s personal popularity has made him the ideal, if involuntary, celebrity endorser.  Here‘s NBC News White House correspondent John Yang with more on how corporate America is cashing in on Obama-mania. 


OBAMA:  The makers of things. 

JOHN YANG, NBC NEWS WHITE HOUSE CORRESPONDENT (voice-over):  No, it‘s not your imagination.  President Obama really is everywhere.  His now familiar message and themes on buses, billboards, and commercials. 

BOB GARFIELD, ADVERTISING AGE:  You‘ve heard about the “Audacity of Hope.”  This is the commodification of hope. 

YANG:  Like this Starbucks ad. 


YANG:  Seem familiar?  It should. 


YANG:  It echoes a popular web ad that supported candidate Obama, same theme, same style, even the same musician. 

And Pepsi says its new ad campaign is, quote, all over Mr. Obama‘s bipartisan spirit of optimism.  Just wearing a Chicago White Sox cap has boosted his hometown team‘s hat sales 30 percent since election day.  The Sox are even asking the White House for permission for a special Obama-themed cap, proceeds to go to charity. 

(on camera):  After Michelle Obama wore gloves and Sasha and Malia wore outfits from J. Crew, a 400 percent increase in traffic crashed retailer‘s website, even though the girls‘ clothes won‘t be available until fall. 

(voice-over):  Anything with the president‘s name or image is flying off shelves. 

JIM WARLICK, OWNER, POLITICAL AMERICANA:  In the 28 years of selling collectibles, I haven‘t seen anything like it.

YANG:  Not all of the attention is welcome.  Michelle Obama calls these dolls, Sweet Sasha and Marvelous Malia, inappropriate. 

GARFIELD:  The economy is in trouble and advertisers are going to grab on to anything they can to try to harness some optimism. 

YANG:  Mr. Obama is even boosting a superhero.  A Spiderman comic book about the inaugural is now in its fourth printing. 

STEPHEN WACKER, MARVEL COMICS:  This is probably going to end up being one of the highest, if not the highest selling books of the last 15, 16 years, when it‘s all said and done. 

YANG:  Who knows, some of that Spidey sense may come in handy over the next four years. 

John Yang, NBC News, Washington. 


GUTHRIE:  Now, as Bloomberg first reported, the marketing honeymoon may be over.  White House lawyers are working on developing a policy that will limit the use of Obama‘s image.  But what legal control does the White House really have over the presidential brand?  Joining us now are intellectual property expert Jonathan Band, and Brad Adgate, who is director of research at Horizon Media.  Thanks to both of you. 

Jonathan, I‘ll start with you in Washington.  Does the White House have any legal bearing here?  Can they do anything about this? 

JONATHAN BAND, INTELLECTUAL PROPERTY EXPERT:  Well, as a practical matter, not really.  There are state laws that prohibit the commercialization of a person‘s likeness without their authorization.  But there‘s basically a First Amendment exception to those state laws, and certainly anything involving the president would likely fall within that First Amendment exception. 

GUTHRIE:  Well, if they did have any kind of legal basis—for example, I know Michelle Obama was none too pleased about the Sasha and Malia dolls.  What form would a challenge take?  Would they sue somebody over it? 

BAND:  Actually, with respect to the daughters, I think there‘s a stronger claim than there would be with respect to the first lady.  And with respect to the first lady—


BAND:  -- it would be a stronger claim than with respect to the president.  But I think the way they would have to proceed is, first, send a cease and desist letter.  If that didn‘t work, the White House would have to initiate legal action.  Again, at least with respect to use of the president‘s image without his authorization, I think the First Amendment would provide those folks who are using the image with a pretty strong defense. 

GUTHRIE:  Brad, let me ask you the larger question here, the advertising question.  We all know Obama is popular right now.  Does that really translate to dollars for these advertisers?  They obviously think it does. 

BRAD ADGATE, HORIZON MEDIA:  Well, yes, they do think it does help out.  But I think this is a very short-term gain.  I think you do run a lot of risk in attaching yourself with a politician.  He does have enemies.  They‘re constantly measuring his popularity.  So, while President Obama is in the 65 percent approval rating, you know, that‘s a very volatile number.  And if it takes a nose dive, I think that there‘s a risk involved. 

GUTHRIE:  Is there danger of over-exposure as well? 

ADGATE:  Well, I think the one thing that President Obama is able to do with his messages and his images and being an icon, is it can rise above the clutter.  So that a lot of times these marketers are kind of attaching on to what he‘s been saying through the years.  If you look at President Obama, he‘s done a marvelous job in marketing himself from an obscure freshman senator to a global icon.  I think these marketers are trying to attach on to that, at least for the short term. 

GUTHRIE:  Jonathan, is there any precedent for this?  It‘s hard to imagine a corollary in any recent time, a president so popular that advertisers are racing to put his image or his logo all over their wears. 

BAND:  Well, I think in the past people have used the president‘s image to some extent.  I mean, you‘ve always had mugs and buttons and so forth.  I believe this is unprecedented in the extent to which it‘s been used. 

Also, I think in the past, efforts have been made to control the use, meaning the White House, previous administrations have sent out cease and desist letters.  Usually that‘s as far as it goes.  The political blow back from initiating litigation would be pretty significant, the White House going after small businessmen and so forth. 

GUTHRIE:  You talked, Brad, about the backlash in terms of people might actually tire of Obama and not want to be thinking about politics when they‘re buying a pizza or an airline ticket or whatever.  Is there also the potential of a backlash if people think, gosh, it‘s really crass, especially the use of images of the little girls, for example. 

ADGATE:  I think they run the risk.  Right now, we think marketers—he‘s in such a honeymoon period with America and he‘s such an icon—we‘re in these 100 days.  I think this will be a very short term marketing strategy, a promotion strategy that‘s going to go on.  I would be very surprised if this is around in a year or even six months. 

GUTHRIE:  OK.  We‘ll see about that.  Brad Adgate, thanks so much, from Horizon Media, and Jonathan Band, intellectual property lawyer. 

Appreciate your perspective

Well, we have one update to bring you on this.  The company that makes Beanie Babies is retiring the names Marvelous Malia and Sweet Sasha from its Ty girls collection.  The Ty CEO says the dolls weren‘t intended to bear the likeness of the girls.  They‘ve changed their names, in deference to the wishes of the first family.  These dolls are now renamed Marvelous Mariah and Sweet Sydney.  Profits from the sales of the original dolls will be donated to charity. 

Here‘s a look at some other things that are on our radar today, on turbulent day for President Obama‘s nominees.  New Attorney General Eric Holder, who was expected to be the toughest confirmation challenge, was sworn in at the Justice Department, and promised to turn the page on the Bush era. 

Today, Iranian President Mahmoud Ahmadinejad announced the launch of the country‘s first domestically made satellite.  Secretary of State Hillary Clinton, meeting with the British foreign minister at the State Department, warned that Iran should expect consequences if it continues its nuclear program. 

And the Obamas made an unannounced trip to capital city‘s public charter school here in Washington to read to a classroom of second graders. 


OBAMA:  We were tired of being in the White House.  We decided that we had to break loose and we wanted to come and visit a second grade class, partly because we have a—


OBAMA:  We‘ve got a second grader. 


GUTHRIE:  Obama asked the second graders what they wanted to be when they grew up.  One answered president of the United States.  Obama replied, can I finish first? 

Up next, first, he was known as Joe the Plumber.  Then it was Joe the war reporter.  Now, it seems Joe Wurzelbacher has yet another job to add to his resume. 

Plus, you may have heard about it and now you can see it for yourself, New York City Mayor Michael Bloomberg attacked on Ground Hog Day by Staten Island Chuck.  We‘ve got the video.  This is 1600.


GUTHRIE:  We‘re back with a look at what‘s going on inside the Briefing Room.  He can tell you how to fix a leak and fix your TV.  But can he fix the Republican party?  As his 15 minutes of fame stretches well into overtime, Joe the Plumber was the featured guest at a strategy meeting for GOP Congressional aides.  In nothing else, the aides were hoping Joe‘s appearance would boost attendance at the Conservative Working Group weekly meeting.  No word yet on how many staffers showed for that. 

If you think former Illinois Governor Rod Blagojevich has the market corner on foul language, think again.  It appears actor Christian Bale could take the cake.  It all started last summer, when a report surfaced about an incident with Bale on the set of his upcoming movie, “Terminator Salvation.”  Now Bale, who you may know as the current star of the Batman series, reportedly lashed out when the director of photography walked on to the set while filming was going on.  Then again, lashed out may be an understatement. 

TMZ posted the audiotape on its website.  Have a listen. 


CHRISTIAN BALE, ACTOR:  Kick your (EXPLETIVE DELETED).  I want you off the (EXPLETIVE DELETED) set.  You (EXPLETIVE DELETED).  Don‘t just be sorry, think for one (EXPLETIVE DELETED) second.  What the (EXPLETIVE DELETED) are you doing?  Are you professional or not?  Do I walk around and rip down—no, shut the (EXPLETIVE DELETED) Bruce.  Do I walk—No.  No.


GUTHRIE:  OK.  TMZ‘s reporting that the film‘s executives released that audio recording to show their insurance company—they wanted to protect themselves in case Bale didn‘t finish the movie.  That‘s how that got out. 

Now an update to the story we first told you about yesterday, when ground hogs attack.  New York City Mayor Michael Bloomberg is recovering today after being bitten by a Staten Island ground hog.  Now we have video.  We want to show it to you.  Charles G. Hog or Staten Island Chuck, as he‘s known, didn‘t agree with Punxsutawney Phil.  Chuck predicted an early spring. 

But no one could have predicted what happened next.  While eating some corn on the cob, Chuck took a chunk out of the mayor, his hand, right through his glove.  He drew bit of blood.  Mayor Bloomberg wrapped the cut with a napkin until he could see his doctor.  He‘s OK.  Now we have the video.  Two days in a row for that story. 

Up next, did Senator Judd Gregg once vote to abolish the very agency he‘s been nominated to oversee?  We‘re going to have details from our Muckraker of the day when 1600 PENNSYLVANIA AVENUE continues after this. 


GUTHRIE:  Welcome back to 1600.  Today, President Obama named Republican New Hampshire Senator Judd Gregg to be his commerce secretary in a ceremony long on mutual admiration, but maybe just a little bit short on memory.  Watch. 


GREGG:  Somebody (INAUDIBLE) Democrats, they would be absolutely wrong.  We don‘t need anymore Democrats as president of the United States.  We had enough when we had Bill Clinton. 

When the president asked me to join his administration and participate in trying to address the issues of the time, I believe it was my obligation to say yes.  And I look forward to it with enthusiasm. 

Their track record, now, is such a glaring example of fraud and misdeed and misrepresentation of a shell game.  Senator Obama, for example, has proposed 158 new programs.  It is a spend-orama, an Obama-spend-orama, which is going to cause us huge problems with our tax burden. 

OBAMA:  Judd is a master of reaching across the aisle to get things done. 


GUTHRIE:  Joining us to make sense of all that is Jonathan Allen, a reporter for and our Muckraker of the day.  I feel like I should have a plaque for you. 

JONATHAN ALLEN, CQPOLITICS.COM:  Sounds a little dubious, Muckraker.  At least it‘s not as dubious as Christian Bale playing Rahm Emanuel there on that tape.

GUTHRIE:  Try to keep it clean here.  We don‘t have the bleeping technology.  Let me ask you; you reported that there was a vote in Judd Gregg‘s past, in addition to all that which we just showed, to abolish the commerce department, the very department he will now lead.  What‘s this all about?

ALLEN:  The Republican budget in 1995, the Newt Gingrich era—they had just come in.  They wrote a budget.  They tried to get rid of a lot of spending.  One of the things they assumed they would do is cut the commerce department completely, just eliminate it.  Judd Gregg voted for that, both at the budget committee level and later on the Senate floor.  His folks note that as the appropriations chairman in charge of the Commerce/Justice State Appropriations Bill, he oversaw an increase in Commerce Department funding later on.  But that also is the product of all the members of Congress having some say in that. 

GUTHRIE:  So he was against the Commerce Department before he was for it.  In fairness, he‘s not first to be nominated to head a department that he—somebody who had previously opposed it, right? 

ALLEN:  That‘s right.  Spencer Abraham was nominated by President Bush in 2001 to run the Energy Department.  He had at one point wanted to abolish the Energy Department.  These are two departments that conservatives have long wanted to see cut off the books.  They want to see some of the programs kept, some gotten rid of.  Certainly a vote from Judd Gregg‘s past that seems to fly in the face of being the commerce secretary. 

GUTHRIE:  Was this a smart political move for Obama?  We just played that montage that suggests that this is real bipartisanship. 

ALLEN:  I think it is a smart move, in terms of reaching across the aisle.  It‘s something Obama wants to do.  And it also brings somebody into the fold in Judd Gregg who is very intelligent, who knows a lot about the country‘s fiscal health and fiscal outlook, beyond what he would just do at the Commerce Department.  My guess is this is a way of getting Judd Gregg in the room for cabinet discussions, more than necessarily him being a perfect fit for Commerce. 

GUTHRIE:  Real quickly, why do you think he would want this job?  

ALLEN:  Who knows how long he wants to be a senator.  His party‘s in the minority.  He‘s in his early 60s.  He‘s been in the Senate a long time.  Maybe, this is a new chapter in his life.  Maybe, he would like to participate in the government at a different level. 

GUTHRIE:  Jonathan Allen, Muckraker of the day from 

Thank you so much. 

That‘s the view from 1600 PENNSYLVANIA AVENUE.  I‘m Savannah Guthrie in for David Shuster.  Thank you for watching.  We‘ll see you back here tomorrow night, same time, 6:00 Eastern.  Now it‘s time for “HARDBALL” with Chris.



Transcription Copyright 2009 CQ Transcriptions, LLC  ALL RIGHTS  RESERVED.

No license is granted to the user of this material other than for research.

User may not reproduce or redistribute the material except for user‘s

personal or internal use and, in such case, only one copy may be printed,

nor shall user use any material for commercial purposes or in any fashion

that may infringe upon NBC and CQ Transcriptions, LLC‘s copyright or other

proprietary rights or interests in the material. This is not a legal

transcript for purposes of litigation.>