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Obama's Leadership Style Put To Test

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U.S. President Barack Obama has been in office two months now, and the ongoing economic crisis is putting his leadership skills to the test. 

It was a challenging week for a new president focused on restoring public confidence in an economy that remains uncertain.

Mr. Obama faced an unwelcome political distraction in the form of public outrage over millions of dollars in bonus payments to executives at the troubled insurance giant American International Group, which is getting bailed out by the U.S. government.

The issue of bonuses being paid to executives working at a company that has been rescued by U.S. taxpayer funds set off a firestorm on Capitol Hill.   Members of Congress from both political parties quickly joined in the condemnation, including Democratic Congressman Gary Ackerman of New York.

"Mr. Chairman, there is a tidal wave of rage throughout American right now," he said.

Acting on that anger, the House of Representatives overwhelmingly approved a 90 percent tax on the bonus payments to AIG executives.  A similar bill will now be taken up by the Senate, although legal experts question if the bill can withstand constitutional scrutiny.

But the AIG mess threatens to shift the president's focus away from trying to restore confidence both among the public and within the financial markets.

"There is an incredible amount of anger in this country and a sense that Wall Street has really enriched itself at the expense of the ordinary person who is suffering mightily these days," said Tom DeFrank of the New York Daily News.

Mr. Obama said he understands the public anger over the AIG situation, but he's also urging the public not to lose sight of the bigger goal of bringing the national economy out of recession.

The president took his case directly to the people at town hall meetings in California Thursday and to late night television as he appeared on NBC's Tonight Show with Jay Leno, a top ranked entertainment program.

"I do think, though, that the American people are in a place where they understand it took us a while to get into this mess.  It's going to take a while for us to get out of it," the president said.

Several Republicans criticized the president's appearance on a late night comedy show as undignified.

But American University expert Allan Lichtman says Mr. Obama is using all the public relations weapons at his disposal.

"These are sober times and our president has delivered a lot of stern and sober talks to the American people.  But there is a lighter side to Barack Obama," he said.

Opposition Republicans see an opportunity in the public outrage over AIG.

House Republican leader John Boehner wants to know when the administration knew about the AIG bonuses and why it did not do more to stop them.

"And the American people have a right to ask, what are the Democrats doing here?  And the right to demand from us better solutions, and they will get them," said Boehner.

President Obama's legislative agenda has slowed somewhat since last month's passage of the economic stimulus plan.

But Georgetown University scholar Stephen Wayne says the president needs to keep the pressure on Congress to tackle complicated issues like health care, education and energy.

"He has used the crisis as an action-forcing mechanism to get Congress to move, and to move quickly, which is something congresses don't do except in times of crisis," Wayne said.

Congress did move quickly to pass the president's economic stimulus plan.  But most experts predict longer and more complicated congressional battles over issues like health care and energy independence.

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