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Republicans Adjust Attacks

Senate GOP Targets Blunders

In a tactical shift aimed at capitalizing on the American International Group scandal, Senate Republicans are moving beyond policy critiques of President Barack Obama to charges of incompetence and mismanagement on the economy.

Senate Republicans for weeks have attacked Obama and Democrats on philosophical grounds typical of the liberal-conservative divide in Congress. But last week, as the furor over AIG’s use of taxpayer funds to pay executive bonuses boiled over, top Senate Republicans played the competence card, signaling a broader case they intend to make against the president and the Congressional majority as midterm elections near.

“I think it shows a lot of things, but mainly a lack of focus. This should be job No. 1, is dealing with the economy,— National Republican Senatorial Committee Chairman John Cornyn (Texas) said. “The president’s jetting off to be on the Jay Leno show … I think it’s about job No. 1. It’s about the economy; it’s about the financial markets. You’ll hear a lot about that until we see some focus and some seriousness on job No. 1.—

Buoyed by Democratic claims of ignorance and later their attempts at shifting blame for AIG’s payout of hundreds of millions of dollars in bonuses, Republicans pounced.

Friday on the Senate floor, for instance, Republican Conference Chairman Lamar Alexander (Tenn.) subtly mocked Obama for turning the filling out of his NCAA basketball tournament bracket into a public event. Alexander suggested that doing so was a trivial use of the president’s time and shows a lack of effort and attention in addressing the nation’s economic woes.

Sen. Richard Shelby (R-Ala.), ranking member on the Banking, Housing and Urban Affairs Committee, added that the AIG situation goes to the broader question of the administration’s effectiveness at reviving the economy.

The White House first claimed there was nothing it could do about the bonuses, before shifting course and promising to do everything it could to recover the money.

Meanwhile, Banking Chairman Chris Dodd (D-Conn.) initially denied responsibility for including the provision to protect the bonuses in Obama’s $790 billion economic stimulus bill signed into law last month, before acknowledging his role. Dodd was quick to qualify, however, saying he did so reluctantly at the Obama administration’s request. Treasury Secretary Timothy Geithner on Friday conceded that the loophole was incorporated into the bill at his insistence.

All of this confusion — combined with the Democrats sniping at each other — goes to the core of the Republicans’ fresh claims that Obama and the Senate majority are failing to govern at a very basic level. AIG, they now charge, shines light on an administration that has yet to offer up a comprehensive economic recovery plan to address the housing and credit markets and the health of the nation’s banks.

“Competence comes from confidence,— Shelby said. “There’s not any confidence out there. Will [there] be? I don’t know. Geithner’s not off to a good start.—

Senate Democrats hope to shift the focus this week and protect themselves by making the issue about the GOP’s reluctance to move quickly on the majority’s preferred remedy for the outsized AIG bonuses — a hefty excise tax on both the firms that took Wall Street bailout money and the individuals receiving the bonuses.

The House approved a similar measure last week, and Senate Majority Leader Harry Reid (D-Nev.) tried to pass his chamber’s bill without debate after its introduction last week. But he was blocked by Minority Whip Jon Kyl (R-Ariz.).

Reid has vowed to try to bring the bill back up again in the latter part of this week, but Democrats said they expect Republicans to throw up more obstacles. Reid spokesman Rodell Mollineau said the Majority Leader is prepared to use procedural maneuvers to overcome any filibuster to ensure the measure comes up for a vote before the Senate takes up the budget, which is scheduled to occur the week of March 30.

“We could finish the AIG thing today, but they’re not going to let us, and that’s too bad,— Reid told reporters Thursday.

The Senate bill is co-sponsored by Finance Chairman Max Baucus (D-Mont.), ranking member Chuck Grassley (R-Iowa) and Sens. Olympia Snowe (R-Maine) and Ron Wyden (D-Ore.). Republicans acknowledged that they want to slow-walk the measure because they say it is too narrowly focused and would not rein in additional, and potentially even more outrageous, compensation packages for executives.

In playing the competence card, Senate Republicans sound eerily familiar to the charges Democrats leveled against then-President George W. Bush following Hurricane Katrina. Bush’s popularity was already beginning to suffer when the hurricane hit New Orleans in August 2005, but the president’s perceived mismanagement of the situation eliminated the credibility he had earned as an effective leader following 9/11.

In fact, one Republican political operative suggested that Obama’s decision to appear on the “Tonight Show— — the first appearance on that style of show for a sitting president — could be viewed as Obama’s Katrina moment, similar to how out of touch Bush looked when pictures aired of him viewing a devastated New Orleans from the comfort of Air Force One.

Obama remains popular, and Republicans have been unable to dent his armor with hits that his policies are too liberal. But in AIG, the GOP believes it just might have found the political arrows it has been looking for.

“The AIG situation isn’t a big deal because it is an event that allows us to highlight our objections to the president’s agenda,— a senior Republican Senate aide said. “It’s a big deal because it perfectly illustrates what many have been thinking about this administration but not expressing because everyone wanted them to get off to a good start.—

Emily Pierce contributed to this report.

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