Palin: Levi Johnston ‘Mean-Spirited,’ ‘Malicious,’ Selling ‘Body for Money’

ABC News’ Rick Klein reports: Former Gov. Sarah Palin is blasting away at the father of her grandson, issuing a blistering statement today that impugns Levi Johnston’s motives in continuing to speak out against the Palin family, and attacks his decision to pose for “Playgirl.”

In a statement issued this afternoon, Palin, R-Alaska, said: “We have purposefully ignored the mean spirited, malicious and untrue attacks on our family. We, like many, are appalled at the inflammatory statements being made or implied.”

“Trig is our 'blessed little angel' who knows it and is lovingly called that every day of his life. Even the thought that anyone would refer to Trig by any disparaging name is sickening and sad.”

Palin also attacks CBS, which aired the first part of an interview with Johnston on “The Early Show” this morning.

“CBS should be ashamed for continually providing a forum to propagate lies. Consider the source of the most recent attention-getting lies — those who would sell their body for money reflect a desperate need for attention and are likely to say and do anything for even more attention,” Palin says in the statement.

The attack comes after Johnston hinted this morning that he has damaging revelations he can make about Palin.

“There are some things that I have that are huge. And I haven't said them because I'm not gonna hurt her that way,” he said.

“I have things that can, you know — that would get her in trouble, and could hurt her. Will hurt her. But I'm not gonna go that far. You know, I mean, if I really wanted to hurt her, I could, very easily. But there's — I'm not gonna do it. I'm not going that far.”

Also in the interview, Johnston expanded on an allegation he made in an interview with Vanity Fair, that Palin regularly refers to her youngest child, Trig, as “retarded” — a charge Sarah Palin denies. Trig Palin has Down syndrome.

“I was just in shock for the first time I heard it,” Johnston told CBS. “And then she'd say it regularly. And I think she was joking, but it doesn't make it right.”

Palin’s memoir, “Going Rogue,” publishes next month.

GOP Senate Candidate: I’m Not Giving Back Joe Wilson Money

ABC News' Teddy Davis reports:

The Connecticut Democratic Party is using $8,000 worth of donations from the man whom they have dubbed Rep. Joe “You Lie!” Wilson, R-S.C., to impugn former Rep. Rob Simmons, the Connecticut Republican who is hoping to be the GOP's Senate nominee against embattled Democratic Sen. Chris Dodd.

Contacted by ABC News, Simmons indicated that he has no plans to return the Wilson funds.

“I think that was quite a long time ago, wasn't?” said Simmons who had not personally seen the press release from the Connecticut Democratic Party.

Asked about Wilson's outburst, Simmons said, “All I know from reading the newspapers, is that a representative made a comment and then apologized.”

Simmons then attempted to turn the tables on Dodd who announced earlier this week that he has decided to keep the Senate Banking Committee gavel instead of moving to become chairman of the Health Education Labor and Pensions Committee which used to be chaired by the late Sen. Ted Kennedy, D-Mass.

“Maybe Chris Dodd needs to be giving back some banker money,” said Simmons.

“I think he should begin by giving back all the banker money that he has been stuffing into his pockets this year,” he added.

Simmons says that if he were to ever become chairman of a Senate Committee, he will not accept money from the industries he is charged with overseeing.

He would, however, raise money from them if he were merely a junior member.

Bill Clinton to Raise Money for Maloney

ABC News’ David Chalian Reports: The Obama White House and Sen. Charles Schumer have worked diligently to try to clear the Democratic primary field for Sen. Kirsten Gillibrand, D-N.Y. in the Empire State, but to no avail.

And Bill Clinton appears to be complicating matters by headlining a fundraiser for Gillibrand foe Rep. Carolyn Maloney (D-NY) in Manhattan on July 20. However, an aide to the former president says that should not be perceived as an endorsement of any kind.In fact, former President Clinton also served as the headliner for a Gillibrand fundraiser back in March.

After giving some very public consideration to the race, Rep. Maloney has made her decision to challenge Gillibrand for the Democratic nomination next year, according to Paul Blank, a senior adviser to the Maloney campaign.

“When we agreed to do this event, it was a ‘thank you’ event for her House account as a way of saying thanks for all her HRC work in 2008,” said the aide to the former president who was referring to Maloney’s support for Hillary Clinton’s presidential campaign last year.

Of course, all $1.3 million sitting in her House campaign account (as of March 31, 2009) is completely transferrable to a Maloney for Senate campaign account.The Senate campaign account is expected to be created within the next two weeks timed to a formal Maloney announcement which is likely to occur prior to the July 20 fundraiser with Bill Clinton.

As Secretary of State, Hillary Clinton is unable to return all those endorsement and campaign favors by hitting the fundraising circuit for some of her strongest allies and supporters. So it is left to her husband to help fill the campaign coffers of those who came out strongest for his wife during her losing primary battle against Barack Obama.

White House Chief of Staff Rahm Emanuel recently described to reporters how he nudged his friend and former colleague Rep. Steve Israel, D-N.Y., out of the race by making clear that the full force of the White House would be behind Sen. Gillibrand.

“I just told Steve, on my back porch off the office, ‘We’re going to be involved in the primary helping her and I don’t want you to get into the race and find out after the fact,’” Emanuel said.

A Marist Poll released yesterday showed Sen. Gillibrand has her work cut out for her in the primary. In a statistical tie among Democrats, Rep. Maloney takes 38 percent of the primary vote compared to Sen. Gillibrand’s 37 percent.

To be sure, it will be much easier for Sen. Gillibrand to woo New York Democrats to her campaign with the support of President Obama, Vice President Biden, Schumer, the Democratic Senatorial Campaign Committee, and most of the New York Democratic establishment.

Nevertheless, Rep. Maloney sees an opening in an election where more than 50 percent of the electorate comes from New York City and its surrounding suburbs.Sen. Gillibrand has been carefully calibrating her positions, statements, and public schedules with an eye toward that Democratic primary electorate now that she is no longer just representing a Republican leaning upstate New York house district.

Rep. Maloney’s formal entrance into the Senate race timed to the previously scheduled Clinton fundraiser is no coincidence, and likely designed to provide the appearance of an endorsement.But reading the tea leaves of who Hillary Clinton would like to see as her elected successor in the United States Senate can be a tricky business.One adviser to Bill Clinton suggested that Rep. Steve Israel almost entered the Senate race and he too would have received a “thank you” fundraiser.

Congresswoman Open to Obama Plan on Recouping AIG Bonus Money

ABC News’ David Chalian and Rick Klein report: Despite her vote in favor of imposing a 90 percent tax on those AIG employees who received some of the $165 million in bonuses, Rep. Allyson Schwartz (D-Pa.) told us on ABC News Now’s “Politics Live” that if President Obama has a better plan to get that money back, she is prepared to hear it.

“I thought it was outrageous for AIG because they have gotten so much taxpayer dollars for them to be giving these kind of bonuses and I wanted to make it very clear, this was the option that was presented with that the only we could really get that money back for the American public was to tax it at a very high level, so I voted for it,” said Rep. Schwartz. “I do believe that we ought to get that money back one way or another. If the president has a better idea, I’m certainly open to listening to that,” she added.

Congresswoman Schwartz appeared eager to move beyond the AIG bonus controversy and instead focus on getting the president’s budget (more or less) passed through Congress.

“I can tell you that it is also our responsibility as members of Congress to make some changes, to give that feedback to the White House. I mean, this budget isn’t going to be exactly the way he presented it to us, but in terms of the broad concepts about what we believe in, that will in fact be held whole,” she said.

When asked if she thought President Obama’s health care reform initiatives should be considered as part of the budget reconciliation process — which would limit debate and only require the far easier simple majority of 51 in the Senate to pass as opposed to the 60 vote threshold required to avoid a filibuster — Rep. Schwartz toed the White House line.

“We want to work no this in a bipartisan way in the House and the Senate. If we don’t get that kind of cooperation, we don’t want to go another four, five, ten years without taking on something that is so critically important to the American people,” she replied.

FireDogLake’s Jane Hamsher: Obama Administration ‘Lighting Money on Fire’

ABC News’ Rick Klein and Jonathan Karl report: For a window into some of the liberal angst out there over bank bailouts and the AIG news, we chatted today with Jane Hamsher, founder of the liberal blog FireDogLake, about her online petition drive to press Congress to block further funds for big banks.

On “Politics Live” today, Hamsher spoke to a populist anger that crosses party lines — and that represents a real leadership challenge to President Obama.

Said Hamsher: “My concern is that the lack of political will has to do with the fact that people have no confidence in what’s happening right now. People on the right and the left are looking at all this money being shoveled to banks [by] friends of Timothy Geithner and Larry Summers . . . and they’re not seeing any accountability. They don’t know where the money’s going, they don’t know how much is gone, and it’s all non-transparent and extremely suspicious.”

“You know, the AIG executive bonuses that were just given out are just one example. There’s been no attempt to try and keep those bonuses from happening in the first place,” she continued. “So, you know, there is no public confidence in the process, and until you can restore that confidence, I think you’re just lighting money on fire.”

In this context, what are the chances of Congress approving more money for banks?

“I don’t think there’s any question right now that until they restore some confidence in the system, no one’s gonna give them that money, and I don’t think that’s a Democratic or a Republican consideration. I think that everybody feels that way this morning. The reason that this money went through to the executives yesterday — $165 million — is because that’s the deal that Timothy Geithner cut. . . . Timothy Geithner let these people get these bonuses. This was OK with him, so the fact that this morning we’re suddenly hearing the administration has problems is because the American people have problems, and nobody’s gonna want to face that.”

For many liberal voices, the sequence of events is confirming suspicions they’ve long had about Geithner. Hamsher said she wants to know when Obama himself found out about the bonuses that are set to go out to AIG executives.

“Since this deal went through because Timothy Geithner negotiated it, did Obama know about it and would he have stopped it before hand? Somebody needs to ask him, ‘was this deal OK with you or did Geithner do it without telling you, and was this something that you’re unhappy with?’ Yes, we’ve heard they all think it’s a bad deal, but they put it through anyway, so it’s a good question.”

Republican Senators Divided Over Governors Rejecting Stimulus Money

ABC News’ Z. Byron Wolf reports: Stimulus funds have only just started to filter out to the states, and already several Republican senators have said they don’t want all the money due to them in the $787 billion bill meant to kick-start the sputtering economy.

While it raises legal questions, the actions by governors in South Carolina and, according to more recent reports, Texas, largely fit into the broader Republican talking point that the new Obama administration is spending too much money in its effort to save the economy.

But not all Republicans agree. At a news conference with other Republicans announcing a GOP oversight initiative of the stimulus program, Sen. George Voinovich, R-Ohio, who opposed the stimulus and is a former chairman of the National Governors Association, said governors who are rejecting the stimulus money now should have spoken up while the stimulus was being drafted.

“My attitude is that governors should have gotten their act together and they didn’t,” he said. “The Republicans and Democrats – [Sen.] Lamar [Alexander, R-Tenn.] — I think you were chairman of the National Governors Association too. When we were chairman, I tried to get them in a room and say look, ‘Republicans, Democrats, let’s get a common thing, let’s go to the Hill and let’s do it.’ And what happened was they spoke with different voices. And now, they’re going to have to live with the program.”

This was a bit off-message for Republicans, who have been trying to make the point that Democrats, now that they’re in power, are spending too much money. The two senators joining Voinovich at the news conference, where Voinovich and Sen. John Thune, R-S.D., were introduced as the two senators who will be in charge of overseeing Republican oversight of the stimulus, immediately tried to dial back the criticism.

“I think the governors have a legitimate concern here,” Alexander said. “[S.C.] Gov. [Mark] Sanford is a Republican, but Tennessee’s governor, a Democrat, raised an issue about whether we should accept the unemployment insurance money because it might require our state to raise taxes on employers, therefore driving jobs out of the state. That’s a legitimate concern.”

Tennessee Gov. Phil Bredesen has since said he will accept all the stimulus money, approximately $4.5 billion.

Alexander was asked if the governors have the ability, constitutionally, to turn down the money.

“I don’t know the answer to that,” he said. “But it’s a very wise question by a governor because, in Tennessee, we kept our debt low because if we we don’t have to pay interest on the debt we can build schools and roads and parks. … And what Gov. Sanford, I am sure, is saying is that if I can use that money for the long-term, I will have more money every year to spend on schools and roads and parks.”

Thune said his governor has also considered turning down stimulus money that requires state matching funds and increased eligibility for programs receiving federal dollars.

“Once you’ve expanded the eligibility, I guess is what I’m saying, it will be difficult to tell people they are no longer eligible for this,” he said. “And so I think some of these governors have got some very legitimate questions about these funds and how they might be used. And if they’re going to be forced into expanding eligibility to qualify for them and create long-term budgetary problems down the road for their states, then some of them are exercising their prerogative not to accept them and I think that is probably a fair thing for them to do.”