senate

Senate’s McConnell Calls For PIPA Bill To Be ‘Shelved’

by Zach Carter on January 19, 2012

Huffington Post…

WASHINGTON — Senate Minority Leader Mitch McConnell (R-Ky.) urged Majority Leader Harry Reid (R-Nev.) late Thursday to nix an upcoming vote on Protect IP, a major anti-piracy bill that Internet experts warn poses grave dangers to the Web’s functionality. Reid, who formally supports the bill, said on Sunday that he would proceed with a vote on a revised version, despite a public statement of opposition from the White House a day earlier. “While we must combat the online theft of intellectual property, current proposals in Congress raise serious legal, policy and operational concerns,” McConnell said in a statement. “Rather than prematurely bringing the Protect IP Act to the Senate floor, we should first study and resolve the serious issues with this legislation. Considering this bill without first doing so could be counterproductive to achieving the shared goal of enacting appropriate and additional tools to combat the theft of intellectual property. I encourage the Senate majority to reconsider its decision to proceed to this bill.” The bill lost several prominent supporters, including many original co-sponsors, on Wednesday, amid high-profile online protests in which major websites Wikipedia, reddit and others blocked access to their content. Nevertheless, opponents had continued to worry they did not have the votes to prevent the bill from coming up for a vote. McConnell spokesman Don Stewart stopped short of issuing a filibuster threat, when asked if McConnell’s opposition indicated that Republicans would prevent the bill from coming up for a vote on the Senate floor. “It’s an encouragement to withdraw the bill while they study and resolve the serious issues in the bill,” Stewart said. “There seems to be bipartisan support for that point of view.” A request for comment from Democratic leadership was not immediately returned. Protect IP and its House companion, SOPA, would grant the government and corporations broad powers to shut down Web sites they believe are engaged in copyright infringement — without a trial or a traditional court hearing. Internet experts warn that the tactics deployed in these Web site take-downs would endanger cybersecurity and the technical functioning of the Web. Supporters of the legislation, which include Hollywood movie studios and major record labels, have insisted the measures are necessary to combat online piracy.

Go here to read the rest:
Senate’s McConnell Calls For PIPA Bill To Be ‘Shelved’

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , , , , , ,

{ 0 comments }

‘Jobs For Justice’ Rally Brings Thousands To National Mall

by AP on October 15, 2011

Huffington Post…

WASHINGTON — Thousands of Americans led by the Rev. Al Sharpton rallied Saturday against the backdrop of the Washington Monument, calling for easier job access and decrying the gulf between rich and poor before marching to the new Martin Luther King Jr. Memorial. The rally was intended to drum up support for President Barack Obama’s jobs plan, which died Tuesday in the U.S. Senate. But speakers used the platform for varied causes, including condemning state laws requiring voter identification at the polls and protesting the recent execution of Troy Davis, a Georgia man convicted of killing an off-duty police officer. Davis maintained his innocence until his death and attracted thousands of supporters worldwide even though courts repeatedly ruled there wasn’t enough evidence to exonerate him. Chanting for jobs and justice, many demonstrators carried banners for their labor unions and wore pins or T-shirts bearing King’s likeness. Obama is scheduled to speak Sunday at the dedication ceremony for the memorial, the first monument dedicated to a black leader on the National Mall. Sharpton, the featured speaker at the March on Washington for Jobs and Justice, blasted the Senate for its failure to pass Obama’s $450 billion jobs bill. The measure includes an extension of a payroll tax cut and unemployment benefits, as well as money to help local governments keep teachers and other workers on the job. Obama and Senate Democratic leaders plan to try to pass elements of the measure by breaking it into pieces. “If you can’t get the jobs bill done in the suites, then we will get the jobs bill done in the streets,” Sharpton said to cheers and applause. He told the crowd that King would have supported their cause “because he stood for those who were cast down and cast back.” King’s eldest son, Martin Luther King III, was also among the speakers. “Over 45 years ago, my father talked about a redistribution of wealth. In fact, that is probably why he was killed,” King said. “Because he said if America is going to survive responsibly, then it must have a redistribution of wealth.” Kathie Williams, a part-time administrator for the Howard County, Md., parks and recreation department. She’d like to find full-time work but has struggled to do so despite an active search. “No one has responded to me,” Williams said. Belinda Shade, 56, of Waldorf, Md., works as a special education school administrator but said the economy still makes her insecure. “Right now I have a job, but I don’t know what might happen tomorrow,” Shade said, later adding, “There are no jobs. People are really hurting. Everything is coming apart as a result.” District of Columbia Mayor Vincent Gray held a separate protest supporting greater autonomy for the district government – Congress must approve the local government’s budget – and joined in the larger gathering. Labor Secretary Hilda Solis and Randi Weingarten of the American Federation of Teachers were among the other speakers. Nonetheless, Sharpton said the rally was not intended as an overtly political statement or as part of the president’s re-election bid. “This is not about Obama,” he said. “This is about my mama.”

Read the original here:
‘Jobs For Justice’ Rally Brings Thousands To National Mall

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , , ,

{ 0 comments }

New Data Shows Poverty Rates In Illinois On The Rise

September 14, 2011

Some depressing statistics released by the U.S. Census Bureau Tuesday show that Illinois is currently home to more poor people than was the case nearly two decades ago. As the Chicago Sun-Times reports, more than 1.82 million people lived at or below the poverty level in Illinois last year compared to 1.69 million in the year before — percentage-wise, that’s an increase of 14.1 percent from 13.2 percent in 2009. While Illinois’ poverty rate is high, it is still lower than the current national average, which is a whopping 15.1 percent, or just more than 46 million Americans. The number is the highest-ever since the Census Bureau began reporting poverty rates in 1959. The number of uninsured Illinois residents is also on the rise. The Sun-Times reports that 1.91 million people, or 14.8 percent of the state’s population last year are without health insurance, up from 14.2 percent or 1.81 million in 2009. Relatedly, the number of long-term unemployed Illinoisans, those who have not found a job in more than 26 weeks of searching, is also at a near-record high. The Chicago Tribune reports that the poverty figures are being felt locally at food pantries, low-income resource centers and homeless shelters throughout the Chicagoland area . Bob Dolgan, a spokesman for the Greater Chicago Food Depository, said his organization, which operates some 650 shelters and pantries in the area said they’ve serviced 5.1 million individual visits during the most recent fiscal year. Three years ago, that number was only 3.2 million. As recently as 1999, the Illinois’ poverty rate was just 10.7 percent . According to a report issued late last year by the Heartland Alliance for Human Needs and Human Rights, emphasized that child poverty rates and “extreme poverty” rates — the number of those living on less than half the federal poverty threshold — has also been steadily on the rise over the past decade. The Census Bureau defines poverty as having a household income of $11,139 or less for one person and $22,314 for a family of four. Without unemployment insurance or other government assistance, the reported poverty rate would have been even higher. According to the Associated Press, University of Chicago professor Bruce Meyer said the worst still be coming down the pike in terms of poverty levels both in Illinois and nationwide as demand continues to increase for food stamps and other government assistance — a safety net that is under serious threat of drastic cutbacks given the state’s dire financial straits . Photo by gregorywass via Flickr .

Read the full article →

Back To School Shopping Fails To Boost August Retail Sales

September 14, 2011

Growth in retail sales stalled in August, hurt by a pitched battle over spending in Congress and raising fresh questions about the country’s ability to steer clear of a double-dip recession. Sales were unchanged from a month earlier, a Commerce Department report showed on Wednesday. It was a weaker reading than expected and sales growth during June and July were revised downward. Consumer confidence plunged in August after a bruising battle over the budget slammed stock prices and pushed the nation to the brink of default. “The consumer reacted to the debt ceiling, the downgrade and the equity market swoon by basically hunkering down and not spending,” said Tom Porcelli, senior U.S. economist at RBC Capital Markets in New York. Consumer spending accounts for about two-thirds of U.S. economic activity, and the data suggests growth in the first two months of the third quarter was weaker than many economists expected. Congress let a debate over spending go down to the wire early last month, nearly leaving the government unable to pay its bills. The country’s debt was then downgraded by a major rating agency. Major stock indexes opened up and Treasury debt prices fell after the head of the European Commission said it would soon present options for the introduction of euro area bonds, a move investors have seen as helping address the region’s crisis. RECESSION FEARS A Reuters poll showed economists see a nearly one-in-three chance the United States could reenter recession and many economists expect the Fed will unveil new measures to boost growth following its Sept 20-21 policy review. A separate report from the Labor Department showed U.S. producer prices were unchanged in August, held down by a drop in energy goods costs. The producer price report sends the Fed mixed signals about price pressures, with energy costs abating but core prices showing some pass-through of recent surges in energy and food costs. President Barack Obama is lobbying Congress to approve a stimulus plan delivered to lawmakers on Monday. Economic growth slowed sharply during the first half of the year, and the economy is vulnerable to potential shocks like an escalation of Europe’s debt crisis. “(The data) shows the slowdown in the economy is real,” said Steven Ricchiuto, chief economist at Mizuho Securities in New York. On Wednesday, Moody’s cut the credit ratings of two French banks because of exposure to debt from troubled Greece, while the European Commission signaled it would soon present options on how the euro zone might issue bonds jointly — a measure that would be aimed at propping up the zone’s weaker members. Treasury Secretary Timothy Geithner tried to shore up confidence in Europe’s ability to solve its crisis, saying they had the financial and economic capacity to do so. In the retail sales report, an increase in sales of electronics, gasoline and food was balanced with drops in purchases of cars, furniture and clothes. Spending at restaurants and bars also dipped. Stripping out sales of gasoline, autos and building materials, so-called core retail sales rose 0.1 percent in August, pointing to some resilience. Excluding just autos, sales also were up 0.1 percent. INVENTORY GROWTH SLOWS Business inventories rose slightly less than expected in July, suggesting firms remained cautious about future demand at the start of the third quarter. Inventories climbed 0.4 percent, following an upwardly revised 0.4 percent rise in June, the Commerce Department said in another report on Wednesday. Economists had expected a rise of 0.5 percent in July. (Additional reporting by Mark Felsenthal in Washington and Richard Leong and Emily Flitter in New York; Editing by Andrea Ricci and Neil Stempleman) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Elizabeth Warren’s Opponents Don’t Like Her Because She’s A Woman, Congressman Says

June 2, 2011

WASHINGTON — A leading House Democrat said Thursday that some opposition to making Elizabeth Warren head of the new Consumer Financial Protection Bureau is because she is a woman. Massachusetts Rep. Barney Frank, top Democrat on the House Financial Services Committee, said some of the resistance to Warren, a Harvard law professor, is because of a feeling that a woman should not tell bankers what to do. “Some people almost unconsciously think that for a woman to be in an important position regarding the titans of the financial industry is not appropriate,” Frank said at a news conference. He said while that attitude hasn’t affected the substance of the debate over Warren, “The tone has been exacerbated.” Asked about his remarks later, he did not name any people or cite any specific instances in which Warren’s gender has played a role in her treatment. At the same news conference, Rep. Lynn Woolsey, D-Calif., also said that when “the other side can’t win arguments on their merits – and I would add, especially when they’re threatened by an accomplished and articulate woman – that’s when they make it personal.” Woolsey provided no specific examples. The consumer bureau was created by last year’s financial overhaul law, which President Barack Obama signed after it passed Congress despite strong Republican opposition. Obama appointed Warren to oversee the organization of the agency, which officially goes into business on July 21, but he has yet to nominate anyone to be its director. Many Democrats and liberal groups want Obama to nominate Warren to head the bureau. Warren, credited with originating the idea for the agency, has had a hostile reception from many congressional Republicans who say she lacks a sufficient financial industry background. Republicans would be all but certain to defeat her nomination should it come to a Senate vote. Asked Thursday about Frank’s remarks, House Financial Services Committee Chairman Spencer Bachus, R-Ala., said most GOP objections are not to Warren herself but to creation of a single director for the agency. He praised her intelligence and commitment to consumer protection and called her a “straight-shooter.” Last month, Senate Republicans led by Sen. Richard Shelby, R-Ala., wrote a letter to Obama promising to block any nominee to head the bureau unless some of its powers were watered down, including giving Congress more control over the agency’s budget and replacing the director’s job with a five-member commission. Shelby is top Republican on the Senate Banking Committee. Asked about Frank’s remarks, Shelby spokesman Jonathan Graffeo said, “That’s beyond baseless. It’s just outright silly.” Frank and Woolsey, along with Rep. Carolyn Maloney, D-N.Y., were among 89 House Democrats who sent Obama a letter Thursday urging him to use his power to appoint Warren temporarily to the job the next time the Senate takes a recess. So-called recess appointments are permitted under the Constitution but last only until the end of next session of the Senate.

Read the full article →

GOP Using Outcome Of Debt Ceiling Vote To Push Through Medicare Reforms

June 1, 2011

WASHINGTON — Republicans are using the lopsided outcome of Tuesday’s failed debt ceiling vote as a means to push through Medicare reforms. Not everyone was open to the idea, pushed by Sen. Mitch McConnell (R-Ky.), that a plan by Rep. Paul Ryan to privatize the program for future seniors remain “on the table” for debt limit talks. But what was clear from Tuesday night’s vote, in which a clean debt ceiling bill went down 318 to 97, was that GOP lawmakers felt emboldened to try to push entitlement reform yet again. “There’s no way to get there without having some examination of the entitlement programs that we have,” Freshman Rep. Tim Scott (R-S.C.) said. “There’s no question that to get the House back in order, we’re going to have to do something revolutionary.” Vice President Joe Biden is leading talks with both parties over the debt limit, which was reached on May 16. The Treasury Department estimates the government would begin to default on its loans by August 2 if Congress does not vote to raise the debt limit, a move that Treasury Secretary Tim Geithner has warned have a “catastrophic economic impact.” Few details have emerged from the bipartisan debt talks, but both parties have laid down certain guidelines for what they want in a final deal. The Republican line, in particular, demands major spending cuts in the short and long term. McConnell, the leading Republican in the Senate, has said that he would not vote to raise the debt limit unless the accompanying legislation included cuts to Medicare, perhaps based on Ryan’s 2012 budget. The Ryan budget proposal, which passed the House and won 40 GOP votes in the Senate, would replace Medicare with a voucher-like system for future seniors that could lead to high costs and On Sunday, McConnell told NBC’s “Meet the Press” that the Ryan budget would be “on the table” for debt ceiling talks. “We are going to discuss what ought to be done,” he said. “I can assure you that to get my vote to raise the debt ceiling, for whatever that is worth… Medicare will be a part of it.” Some House Republicans have echoed McConnell’s sentiments, saying they will continue to push for Medicare changes as part of a deal to raise the debt ceiling. “That’s the budget the House has passed, and that’s the budget we’re going by,” said Rules Committee Chairman David Dreier (R-Calif.), though he sounded open to other ideas on Medicare. “We’re obviously in a place where we want entitlement reform.” Rep. Darrell Issa (R-Calif.), chairman of the Oversight Committee, also hedged on whether the Ryan plan should be included in the debt deal to address Medicare, telling HuffPost “Ryan’s Medicare plan has nothing to do with my committee. My committee is the committee of waste, fraud and abuse.” “I think that Ryan is critically right in knowing that you have to deal with it,” Issa added. “If you got him here and interviewed him, he would say, ‘I’m not looking at mine as the only solution, I’m happy to have a discussion about how we reform Medicare, but we have to do it.’” Others were less certain that Medicare would be a part of the final deal, although they stressed Medicare must be reformed to deal with the deficit. “We have to address the core issues on Medicare,” said Rep. Tim Murphy (R-Pa.). “Where this happens, nobody knows at the moment.” Rep. Cathy McMorris Rodgers (R-Wash.), vice chairwoman of the Republican Conference, said she is waiting to “see what they come up with,” but that entitlements are likely to be a part of the final deal. “Everything is on the table,” she said. “I think it’s important that we keep everything on the table and allow the negotiators to do their work.”

Read the full article →

Sen. Claire McCaskill: Republicans Packed Defense Spending Bill With Earmarks

May 26, 2011

By Colin Clark Editor, AOL Defense WASHINGTON — One of the Senate’s top campaigners for good government is charging House Republicans with quietly loading their new defense policy bill with earmarks that are currently banned by the GOP’s own rules. Sen. Claire McCaskill (D-Mo.), a member of the Senate Armed Services Committee, has pledged to keep all earmarks out of the Republican version of the Defense Authorization Act. In a letter to Rep. Buck McKeon (R-Calif.), the new chairman of the House committee, and its top Democrat, Rep. Adam Smith (Wash.), the Missouri senator claims the proposed bill “has obviously been structured to circumvent the earmark ban adopted by the House of Representatives.” And McCaskill writes that if she can’t keep those earmarks out of the bill, she’ll make each one public. But the McKeon is having none of McCaskill’s scorn. “Her letter is more politics than substance,” HASC spokesman Josh Holly wrote in an email to AOL Defense. McKeon instituted changes to the traditional markup process for the policy bill: The draft bill from each subcommittee was made public 24 hours before the subcommittees met. And the draft of the final bill was also put online before the full committee met. “In the words of the former Armed Services Committee Chairman Ike Skelton (D-Mo.), we would encourage the good Senator from the former chairman’s home state to ‘read the bill,’” Holly said. “All of the information which she claims was not provided to the public has been available on the committee’s website throughout the process. In fact, this is the first time in decades that copies of the legislation were provided to the public ahead of the subcommittee and full committee markups.” “Neither exact dollar amounts nor intended recipients of the earmarks can be clearly discerned,” McCaskill said in her letter. “Under the pre-moratorium rules, earmark requests were publicly posted and funded earmarks were listed in reports accompanying bills with the sponsor, amount and intended recipient all clearly detailed.” Holly’s response: “It appears that Senator McCaskill was also unaware that all of the amendments in which she has issues were adopted in a public session of the Armed Services Committee. Additionally, every amendment that was considered by the committee — not just those that were adopted — were posted on our website within 24 hours of the conclusion of the full committee markup and made available to reporters at the time of the markup.” But McCaskill claims the House committee has proposed a billion dollar “slush fund” called the Mission Force Enhancement Transfer Fund, that would take money cut from other programs and consolidate it in the fund to pay for the “pet projects” inserted into the House defense policy bill.

Read the full article →

Tax Cheats Received Billions In Stimulus Cash, Report Finds

May 24, 2011

WASHINGTON — Thousands of companies that cashed in on President Barack Obama’s economic stimulus package owed the government millions in unpaid taxes, congressional investigators have found. The Government Accountability Office, in a report being released Tuesday, said at least 3,700 government contractors and nonprofit organizations that received more than $24 billion from the stimulus effort owed $757 million in back taxes as of Sept. 30, 2009, the end of the budget year. The report said the tax delinquents accounted for nearly 6 percent of the 63,000 contractors and grantees examined and cautioned that the real number might be higher because the known tax debt does not measure such factors as income underreporting. Among the examples was an engineering firm that received a $100,000 stimulus act contract but owed $6 million in taxes. The IRS called it “an extreme case of noncompliance.” A social services nonprofit that received more than $1 million in stimulus funds owed taxes of $2 million. The GAO referred those two cases and 13 others to the IRS for further investigation. On Tuesday, a Senate Homeland Security and Governmental Affairs subcommittee will hold a hearing on the report. Federal law does not prohibit tax delinquents from getting government contracts or grants, though there are provisions that enable the government to withhold payments in some cases. While the federal government requires contractors to present documentation that their taxes are paid, some recipients escaped federal review because the money was disbursed at state or local levels. Sen. Carl Levin, D-Mich., chairman of the investigations subcommittee holding the hearing, said it’s been known for years that a few federal contractors and grantees don’t pay their taxes. He said a program to recover funds from tax delinquents has been strengthened, and “the executive branch has made it clear” that nonpayment of tax can be grounds for denying a specific contract or barring a contractor from bidding on any contract. He added that the executive branch should “get on with it” and bar “the worst of the tax cheats from the contractor workforce.” “It is a matter of basic fairness that those who take government money should be required to pay their taxes like everyone else,” said Sen. Tom Coburn of Oklahoma, the panel’s top Republican. “That such a huge amount of the stimulus money went to known tax cheats should be a wakeup call for Congress.’” The stimulus package, enacted in February 2009, funneled some $821 billion into the recession-hit economy. Of that, about $275 billion was designated for contracts and grants, of which nearly $200 billion had been paid out as of March 25, 2011. The report noted that about 35 percent of the unpaid taxes were for debts incurred prior to 2003 and that more than half of the apparent violations, $417 million, were from unpaid corporate taxes. Another quarter, $207 million, came from unpaid payroll taxes. The most serious documented case was a security firm that owed $9 million, mainly in unpaid payroll taxes from the mid-2000s. IRS records indicated that the company paid other creditors while shirking its tax obligations. The company, which received more than $100,000 in stimulus money, had a history of being uncooperative, missing deadlines and repeatedly filing appeals, according to the records. Sen. Max Baucus, D-Mont., chairman of the Finance Committee, said every unpaid tax dollar was “added to our deficit or taken from future generations, so I will certainly use the conclusions from this report to look for new ways to ensure everyone pays their fair share.” For Republican the report provided another way to criticize Obama’s recovery package. “This shows how fundamentally flawed the failed stimulus has turned out to be when Washington jams through almost a trillion dollars in spending with little scrutiny,” said Sen. Orrin Hatch of Utah, top Republican on the Senate Finance Committee. ___ Associated Press writer Stephen Ohlemacher contributed to this report.

Read the full article →

Matt Taibbi: Wall St. Has No Incentive Not To Commit Crimes

May 23, 2011

In a video interview with RT America, Rolling Stone ‘s Matt Taibbi, the author of Griftopia , says that as of now, and until the government more aggressively prosecutes financial fraud, Wall Street has a continued incentive to bend the rules in their favor. (Hat tip to Naked Capitalism .) Since the financial crisis, Taibbi has been one of Wall Street’s most outspoken critics. Earlier this month, Taibbi wrote “The People. vs. Goldman Sachs,” a sweeping investigation into the Senate report on Goldman Sachs that accused the investment bank of profiting by misleading investors. “There’s really no incentive going forward for people on Wall Street not to commit crimes,” Taibbi says in the interview. “The number one thing that came out of this whole period is that there were absolutely no consequences for any of the people that committed this widespread fraud.” Right now, Taibbi continues, Wall Street rightfully sees themselves as above the law, pointing to the billions of dollars in bank bailouts and a lack of prosecution. Still, with Goldman Sachs last week announcing it is expecting federal subpoenas for its mortgage business, Taibbi sees the current climate as the “last opportunity” for the federal government to take direct action against Wall Street for their role in the financial crisis. “Personally, I’m hopeful that they actually will do something. It’s just too late, but at least it will come eventually,” Taibbi said. Watch the interview here:

Read the full article →

Steve Cohen’s SAC Capital Investigated For Possible Insider Trading

May 21, 2011

(Reuters) – SAC Capital Advisors LLP is under investigation by a powerful Republican Senator for 20 possible instances of insider trading, the Wall Street Journal reported on Saturday, citing unnamed sources familiar with the situation. Charles Grassley, who heads the Senate Judiciary Committee, last month asked the Financial industry Regulatory Authority for details on any suspicious trading by Steven Cohen’s $13 billion hedge fund. Last week Finra provided Grassley with about 20 instances where SAC’s trades took place ahead of market-moving news or were otherwise suspicious enough to merit referral to the Securities and Exchange Commission’s enforcement staff, the Wall Street Journal said. It was not clear if the trades had been referred to the SEC, and authorities have not alleged wrongdoing by SAC or Cohen, the report said. SAC representatives and Congressional investigators met in Washington on May 10 to discuss the matter, the report said. At the meeting, SAC representatives suggested the investigators go easy on the hedge fund, saying it has internal procedures to track down and prevent illegal trading, according to the report. Also at the meeting, Washington-based SAC Capital in-house lobbyist Michael Sullivan cited Cohen’s “civic-minded interest” in purchasing a stake in the New York Mets baseball team. Spokesmen from SAC and Grassley’s office were not immediately available to comment to Reuters. (Reporting by Ann Saphir with reporting by Matt Goldstein) Copyright 2010 Thomson Reuters. Click for Restrictions .

Read the full article →

Pentagon On Joint Strike Fighter: Too Expensive, But There Is No Alternative

May 19, 2011

By Colin Clark Editor, AOLDefense WASHINGTON — The U.S. must buy the Joint Strike Fighter, but it’s not affordable right now. That was the somewhat confusing message from the Pentagon’s top acquisition official, Ashton Carter, when members of the Senate Armed Services began hammering him Thursday about the plane’s huge cost overruns over the last three years. The Joint Strike Fighter (JSF), also known as the F-35, may cost a total of more than $1 trillion dollars to design, build, buy, fly and repair through 2065, according to Pentagon documents. Under sharp questioning by Arizona Sen. John McCain, the Senate committee’s top Republican, Carter said the F-35’s costs are “simply unacceptable in this fiscal environment.” The program faces a “watershed moment” after years of cost overruns and schedule delays have piled up in the midst of one of the greatest fiscal crises in United States history, McCain said. Carter stressed to the Arizona senator that he and his Pentagon colleagues now feel they have much more information — and much more accurate information — about the program’s likely path. He and other Pentagon officials repeated their mantra that there is no alternative to buying the F-35. Carter’s comments about the program’s sky-high costs during the hearing stood in stark contrast to the much more upbeat tone of a joint statement he and other top Pentagon officials prepared for the hearing. That statement conveys the official position –- adopted by all senior military officials –- that the F-35 is “the centerpiece of the Department of Defense’s future precision attack capability.” Most of it details the current status of the program, which is actually ahead of the latest version of its testing schedule. However, as McCain noted, the program overall is 80 percent over its original cost estimate, and roughly 30 percent over the estimate of the last restructuring. Defense Secretary Robert Gates and Carter have been at pains recently to say they support the F-35. After years of getting either insufficient or lousy numbers from the program office, they say they now have “credible” cost estimates for production and operation and support. The later two are the dollars spent on fuel, the people who fly and maintain the jets and the equipment needed to repair and improve them. These sustainment costs typically makes up at least 70 percent of total expense of a major weapon system. The JSF program office, led by Vice Adm. David Venlet, is preparing the first credible stab at estimating those costs — and they are high. According to Christine Fox, director of the Pentagon’s feared Cost Assessment and Program Evaluation office, the F-35 is currently estimated to cost less to operate and maintain than the F-22, which is America’s most capable stealth fighter. The F-35 will cost about one third more to sustain and operate than the main plane it is replacing, the F-16. It will cost about same as the F-15C, she told the Senate committee. A document leaked last Thursday, the Dec. 31 Selected Acquisition Report, puts the F-35′s costs at $16,425 per flying hour. That’s more than $3,000 more per hour than the F-16C/D’s $13,466 cost. Since “affordability” has been the watchword for the F-35 since it was first conceived, these numbers pose a difficult conundrum for senior Pentagon leaders. Lockheed Martin’s CEO Bob Stevens is keenly aware of the threat they pose to the program, and he has pressed company officials to do everything possible to get the costs back on track. The company’s top man on the F-35, Tom Burbage, told the Senate Armed Services Committee in his prepared remarks that the F-35B, that Marine’s version of the JSF, will save the military an estimated $1 billion a year when it replaces three other aging aircraft. That gives some sense of how complex the F-35B is intended to be. It will serve the roles of the F-18, the Harrier jumpjet and the EA-6 currently fulfill — a conventional fighter, an attack aircraft and an electronic and cyber warfare platform all rolled into one. Launching next month, AOL Defense will provide news, insight and tools about the strategy, politics and policies that shape the defense sector. Follow Colin on Twitter for views at @colinclarkaol . Follow AOL Defense for news at @aoldefense .

Read the full article →

CHART: Oil Subsidies Repeal Blocked By Industry-Bankrolled Senators

May 19, 2011

WASHINGTON — An attempt to repeal some of the billion-dollar tax breaks enjoyed by the five biggest oil companies failed in the Senate Tuesday evening, as expected, when all but two Republicans and three Democrats voted to block its consideration. The final vote was 52 in favor, 48 against — eight votes shy of the filibuster-proof majority needed to bring the bill to the floor. All things considered, it was a fairly meek attack on the massive oil and gas subsidies that taxpayers are footing — even as consumers suffer from high gas prices and industry profits swell to near-record proportions . Tuesday’s Senate proposal was only to cut $2 billion worth of subsidies a year from the biggest five companies, and the proceeds would have gone to deficit reduction. By contrast, President Barack Obama called on Congress in January to eliminate some $4 billion a year in tax breaks to the entire industry, and put the proceeds into alternative energy investment. And the industry’s own lobbying juggernaut, the American Petroleum Institute, estimated that the total cost of all the tax and accounting changes proposed by Obama in his FY 2012 budget could have actually cost the oil and gas industry $90 billion over the next decade. Few if any of the president’s budget proposals have even made it onto the congressional agenda. In spite of a major Democratic push , the watered-down oil subsidies repeal couldn’t overcome the industry’s hold on Congress . Campaign donations from the industry are only part of the reason the bill was defeated. There’s also an army of lobbyists: The oil and gas companies have spent more than $1 billion on lobbying-related activities since 1998. But looking simply at the amount of money the industry has given senators over the years — either through political action committees or contributions by people associated with oil and gas companies — is still telling. The central dynamic of the vote was the nearly lockstep Republican opposition. While the industry has long favored Republicans with its campaign contributions, in the early ’90s it was by less than a 2 to 1 margin. Starting in the 1996 election cycle, the margin shot up to more than 3 to 1. This chart below, based on data from the Center for Responsive Politics , shows how much the industry has donated to each senator over the course of their careers. The Center for American Progress Action Fund totaled it all up and found that the 48 senators who voted with the industry received over $21 million in career oil contributions, while the other 52 senators received only $5.4 million. So each senator who opposed the subsidy repeal received on average five times as much oil money as those who voted for repeal. Oil & Gas Contributions Since 1989 For Senators Who Voted On S. 940 Powered by Tableau GRAPHIC BY JAKE BIALER OF THE HUFFINGTON POST

Read the full article →

Tom Coburn ‘Takes A Break’ From Debt Gang

May 17, 2011

WASHINGTON — Influential Sen. Tom Coburn (R-Okla.) “decided to take a break” from the bipartisan “Gang of Six” budget negotiating team Tuesday, citing an impasse in the effort to agree on substantial spending cuts. “He is disappointed the group has not been able to bridge the gap between what needs to happen and what senators will support,” said Coburn spokesman John Hart. “He has decided to take a break from the talks.” Some Democrats have been predicting the gang’s demise ever since one of its leaders, Budget Committee Chairman Kent Conrad (D-N.D.) — one of the six members — announced he’d start moving ahead with his own proposal . Conrad said Tuesday he’d announce plans to proceed soon . Coburn’s departure could all-but deep-six the Six, since Conrad’s budget plan could overtake it. And Vice President Biden also has been leading bipartisan talks aimed at conquering the deficit impasse, talks that Senate Republican leaders think are more likely to lead to Democratic concessions, said a Democratic aide close to the talks. A GOP aide confirmed the leadership pressure on the group, but noted that Coburn has a long history of resisting such advances, from backing a coup against then-House Speaker Newt Gingrich to challenging Republican leadership on earmarks. The aide said that Coburn had been extremely close to agreeing to a deal before a recent two-week recess, but returned with five new demands that hadn’t been discussed before. On Monday, the aide said, Coburn asked for an immediate $130 billion in cuts to Medicare, on top of the $400 billion that had already been agreed to. Democrats refused and Coburn left the talks as a result, said the aide. A Republican aide close to the talks said that Coburn’s additional Medicare demand stemmed from the program’s trustee’s report, which was issued Monday morning and showed it running out of money by 2024, five years sooner than had previously been forecast. But he said that characterizing the demands as new missed the point of the talks, which explicitly put everything on the table. The erstwhile Gang of Six will meet as five tomorrow, the Democratic aide said. But Coburn could still get back in, Hart suggested. “He still hopes the Senate will, on a bipartisan basis, pass a long-term deficit reduction package this year,” Hart said. “He looks forward to working with anyone who is interested in putting forward a plan that is specific, balanced and comprehensive.” Coburn may have other issues on his mind, though. Two aides close to the talks said that Democrats suspect the Oklahoman’s decision is related to pressure he has come under as a result of his involvement in the sex scandal that prompted Sen. John Ensign (R-Nev.) to resign . The watchdog group that filed the original ethics complaint against Ensign also thinks Coburn should be probed . The GOP aide rejected as ridiculous such speculation, suggesting that if he were truly concerned about the issue the best way to distract attention from it would be to achieve consensus with the Gang of Six, which is much beloved by the mainstream media. Sens. MIke Crapo (R-Idaho) and Saxby Chambliss (R-Georgia) were supposed to make one last-ditch effort to get Coburn to stay in the gang, but apparently failed. This story was updated to include additional details.

Read the full article →

Art Brodsky: Air of Inevitability Escaping From AT&T’s Takeover of T-Mobile

May 17, 2011

There was a notable hissing sound emanating from Capitol Hill at the end of last week. It was the air being let out of AT&T’s trial balloon, “The Inevitable.” Thanks to some aggressive questioning from the Senate Antitrust Subcommittee, particularly Chairman Herb Kohl (D-WI) and Sens. Amy Klobuchar and Al Franken ( both D-MN), it quickly became clear that there are lots of problems to the $39 billion takeover of T-Mobile that AT&T either hadn’t counted on, didn’t want to deal with or thought would simply be overlooked. AT&T has said repeatedly it expects the deal to be approved, and hasn’t yet mentioned any conditions. Granted, it is early in the process, but telling everyone what is expected is part of creating that air of inevitability to intimidate legislators and agency staff that will have to make the call. Adding to the environment, financial and industry analysts have said since the deal was announced on March 20 that it would be approved, albeit with some conditions. That meme, based on the performance of the Antitrust Division in big, high-profile media/telecom cases, has infiltrated much of the thinking and writing about the deal. As the hearing demonstrated, and as some reporters are starting to pick up, AT&T’s deal is not a foregone conclusion, and, in fact, the company still has a lot of explaining to do in order to justify wiping out the fourth-largest national wireless carrier. It took several minutes of questioning of AT&T Chairman Randall Stephenson for Kohl to get the simple admission that yes, T-Mobile is a competitor for AT&T. “You are competitors, right?” Kohl asked. Stephenson said T-Mobile is “part of the eco-system” of the wireless industry. Kohl, disbelieving the reply, said it was “incontrovertible” that the companies were competitors. Is T-Mobile a competitor for AT&T? T-Mobile USA President Phillipp Humm did a similar dance, all but ignoring the TV commercial Public Knowledge President Gigi Sohn played for the subcommittee at the start of the hearing, which depicted AT&T’s network as the weight around its customers, slowing them down relative to T-Mobile’s 4G network. It was hard not to have some sympathy for Humm, who had to argue his company was abandoning the U.S. and was so constrained it couldn’t possibly compete any more. Admitting abject failure for so vital and perky a company as T-Mobile in such a public forum had to be excruciating. But that’s what the home office demanded, so Humm did it. The hearing was notable not only for the tough questions tossed at Stephenson and Humm, but for the lack of tough questions posed by those who would normally be forthright in defense of the merger. While it’s true, as some commentators said, that no senator came right out and said the merger should be blocked, the questioning did reveal a lot. The onslaught of hostile questions on pricing, consumer rights accompanied by the observations of the creation of a wireless duopoly surely showed that the senators, primarily on the Democratic side, have enough serious doubts about the deal that approval by the Justice Dept. should not be a foregone conclusion. Even more interesting was the commentary from the Republicans, including from Sen. John Cornyn (R-TX), AT&T’s home-state senator on the committee. (AT&T has its headquarters in Dallas.) Cornyn issued no clarion calls for the merger to be approved forthwith. He gave no denunciations of government regulators trying to quash the free market and the fate of his great constituent company. He instead settled for some platitudes on broadband access, criticizing the broadband part of the stimulus program and feeding Stephenson some softball questions on innovation and the role of the private sector. Even then, Stephenson’s claim that there are 600 devices in the wireless market (you should pardon the expression) rang hollow, considering it kept a five-year exclusive deal on the iPhone, which is worth much more than, at least 595 of those other devices. AT&T is pumping millions of dollars into getting this acquisition through, and clearly didn’t get its money’s worth from the Senate panel. If the Senators send a letter to the Justice Department that in any way would give political cover to the Antitrust Division blocking the merger, then the deal could be in real trouble. The meme is starting to change , as reporters are starting to realize that AT&T’s conquest may be a reach too far. It may have better luck in the House, where the rhetoric can be less constrained than in the Senate. The House Judiciary Committee’s Internet Subcommittee has a hearing tentatively scheduled for May 26. The full Committee Chairman Lamar Smith is from Texas, although he is from the San Antonio area that AT&T scorned, moving its HQ from there to relocate up north. There is no shortage of highly charged members on the subcommittee, who could more than make up for the tepid response AT&T got in the Senate. The only conditions which could stifle the House hearing are the obvious facts of this case, which as Sohn, Sprint CEO Dan Hesse, and Cellular South CEO Victor “Hu” Meena testified, are anticompetitive and anti-consumer on any number of levels.

Read the full article →

Republicans Who Opposed Oil Subsidies Are Now Hedging On Repeal

May 13, 2011

WASHINGTON — Democrats trying to get political mileage out of their push to repeal multi-billion dollar subsidies to the thriving oil and gas industry are reminding balky Republicans that many of them have backed the idea before. Senate Majority Leader Harry Reid’s (D-Nev.) office released a video mash-up Friday showing several of those Republicans speaking out against the subsidies that Democrats want to cut. Under the bill, the $21 billion saved would be used to pay down the deficit. The star of the video is House Speaker John Boehner (R-Ohio), who late last month refused to defend the subsidies in an ABC News interview. His one explicit statement — that the big oil companies don’t need to get oil depletion allowances — wasn’t exactly a concession, however, as they haven’t received those allowances since 1975. Boehner’s staff quickly walked back his comments. WATCH : But other Republicans featured in the video may have more explaining to do. The video shows a clip of Sen. Susan Collins of Maine arguing against subsidies on the Senate floor in 2008 . A contemporaneous press release from the senator suggests using some of the proceeds for alternative energy. And Sen. John Thune of South Dakota is shown in April 2006 declaring, “If, in fact, [oil companies] are making such enormous profits, then perhaps they don’t need the support and the tax incentives that are given to them by the American taxpayer.” Another is Illinois Sen. Mark Kirk, who voted for repealing subsidies as a member of the House in 2007, and recently stuck by the idea . The oil subsidies were the subject of a contentious Senate hearing on Thursday. Democrats show no sign of backing off the issue, which they consider a political winner. But a solid voting Republican block — supported by a few “oil patch” Democrats — means the subsidies appear safe in this Congress. The Democrats’ video leaves out a number of other GOP senators who have also backed repealing subsidies in the past — and whose support could make passage of the repeal a close vote, at least in the Senate. A majority of the House is all but certain to oppose such a measure. Besides Collins, Kirk and Thune, Sens. Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah) Richard Lugar (R-Ind.), Lisa Murkowski (R-Alaska) and Olympia Snowe (R-Maine) also voted for an energy bill in 2007 that would have repealed some $22 billion in subsidies to pay for clean energy innovations. The oil subsidy portion of that bill was stripped before it passed the Senate. Sen. Collins’ spokesman Kevin Kelley was happy to note the senator’s previous support for repealing subsidies, but said she was still reviewing the new proposal. “While eliminating or reducing these tax breaks may be good tax policy and help with deficit reduction, the Democrats’ proposal will have no impact on the price that consumers pay at the pump,” Kelley wrote in an email. “By contrast, Senator Collins’ work with Senator Ron Wyden and Senator Maria Cantwell to curb excessive speculation in the energy futures market would have an impact on oil prices.” A spokeswoman for Sen. Murkowski emphasized that her boss only voted for ending the oil subsidies once, in a procedural move, expecting she would try to stop the repeal later. “Sen. Murkowski does not support singling out oil and gas companies for increased taxes,” she added. The other senators’ offices did not respond to email requests seeking to learn whether they would still favor repealing oil industry subsidies. The industry is estimated to have earned some $1 trillion in profits over the last decade. This story has been updated to include comment from Sens. Collins’ and Murkowski’s offices.

Read the full article →

Video: Tyler Sees `Enough Margin of Safety’ in Goldman Stock

May 13, 2011

May 13 (Bloomberg) — Jason Tyler, senior vice president at Ariel Investment LLC, discusses the outlook for Goldman Sachs Group Inc. a month after a Senate report said the firm misled clients. Tyler speaks with Erik Schatzker and Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Read the full article →

Democratic Senator Calls Big Oil Execs Selfish, Unfeeling — And Unbeatable

May 12, 2011

WASHINGTON — The unapologetic — indeed combative — testimony on Thursday by top oil executives summoned to defend multi-billion tax subsidies for their industry infuriated some Senate Democrats, one of whom accused the executives of being “profoundly out of touch” with average Americans. The heads of the Big Five oil companies, currently enjoying a windfall from high oil prices , soundly rejected a Democratic request that they renounce $2 billion in tax breaks, declaring instead that they were entitled to every penny. Exxon Mobil CEO Rex Tillerson called the attempt to roll back the subsidies “misinformed and discriminatory” and he issued a threat to the assembled members of the Senate Finance Committee: “You give me a different tax burden,” he said, “I’m going to take my capital then, since the U.S. isn’t attractive, I’ve got to go somewhere else.” It was all too much for Sen. Jay Rockefeller (D-W.Va.). “I get the feeling that it’s almost like you’re — like the five of you are like Saudi Arabia. That you’re caught up in your profits, you’re highly defensive, you yield on nothing,” he said. “I think you’re out of touch. Deeply, profoundly out of touch. And deeply and profoundly committed to sharing nothing.” Congress is facing enormous pressure to make deep cuts in essential government programs, in order to reduce the budget deficit. Americans are struggling to make ends meet — a struggle made dramatically worse by high gas prices. Meanwhile, the Big Five oil companies — Exxon Mobil, BP, Shell, Chevron, and ConocoPhillips — made about $34 billion in profits in the first three months of 2011, up 42 percent from a year ago. “The nature of your life, the nature of your international travel, the nature of the size of your profits — I don’t think you have any idea what the size of your profits does to the American people’s willingness to accept what you have to say,” Rockefeller said. Rockefeller, a five-term senator whose great grandfather built the giant Standard Oil monopoly , also called attention to the oil industry’s unparalleled clout on Capitol Hill . WATCH : “I think the main reason that you’re out of touch, particularly with respect to Americans, and the sacrifices that we’re having to look at here in terms of try to balance — trying to come close to balancing the budget — is that you never lose,” Rockefeller said to the executives. “You’ve never lost. You always prevail. You always prevail in the halls of Congress, and you do that for a whole variety of reasons, because of your lobbyists, because of your friends, because of all the places where you do business. And I don’t really know any other business that never loses,” he said. “I’ve just never seen any industry so successful, so constantly successful. I think you all have a great sense of assurance as you are sitting there. … I don’t think you feel threatened by anything that’s going on here, and I don’t know necessarily that you have any reason to feel threatened, because of the way votes line up in this present Congress. “I haven’t heard anybody say what they would be willing to do to share in our budget problem and in the total concept of what keeps America together, and that is essentially fairness. That everybody has to lose at some time. That everybody has to give something up for us to be a real country.” Democrats, starting with President Obama, have seized on oil subsidies as a potent political issue. This week, three senators unveiled legislation that would strip the Big Five of about $21 billion in tax breaks over the next decade. “Businesses should make a profit — that’s what drives our economy — but do these very profitable companies actually need taxpayer subsidies?” asked Senate Finance Committee Chairman Max Baucus (D-Mont.), as he kicked off Thursday’s hearing . “Energy incentives should help us build the energy future we want to see — not pad oil company profits.” Rockefeller’s pessimism about the repeal’s chances may be well-founded. Senate Majority Leader Harry Reid said he intends to schedule a vote on the measure next week, but no Republicans have shown any indication that they’ll vote for it — and two “oil patch” Democrats declared their opposition on Wednesday as well. “My guess is that there aren’t 60 votes to pass it,” Sen. Tom Carper (D-Del.) told the executives. But, he said, “when the vote occurs next week and we don’t get 60 votes for Senator Menendez’s proposal, that shouldn’t be the end of the conversation.” Partisan battle lines were clearly drawn from the start of Thursday’s hearing, when Sen. Orrin Hatch (R-Utah), the ranking member of the committee, accused Democrats of wanting to increase gas prices, then illustrated his view of the hearing by unveiling a photograph of a dog standing on a pony. Banter ensued, followed by Hatch’s declaration: “I know who the hores’s ass is.” Sen. Chuck Schumer (D-N.Y.) was particularly pointed in his interrogation of ConocoPhillips CEO Jim Mulva, whose company on Wednesday described the Democratic subsidy rollback as ” un-American .” Schumer demanded an apology. He didn’t get one. Describing the trade-offs the budget committee will be making, he asked Mulva, “Do you think that your subsidy is more important that the financial aid that we give to students to go to college?” Mulva did not give a direct answer. Sen. Ron Wyden (D-Ore.) brought a video clip from a November 2005 hearing, where he asked oil executives whether or not they agreed with then-President George W. Bush ‘s assertion that “with $55 [a barrel] oil we don’t need incentives to oil and gas companies to explore. There are plenty of incentives.” Back then, the executives had all agreed. “Gentlemen, you all have done, as major oil companies, a dramatic about-face this morning,” Wyden said. “In 2005 — you were there, Mr. Mulva — all of you said you did not need tax incentives to drill for oil. And today you come to say you’ve got to have them when oil is at $100 a barrel. I just think that position defies common sense.” John Watson, CEO of Chevron, told the panel: “I am an advocate for developing all forms of energy and using energy more wisely,” he said. “But it is wrong to increase taxes on oil and gas companies to subsidize other forms of energy.” Furthermore, he said: “Singling out five companies because of their size is even more troubling. Such measures are anticompetitive and discriminatory. … Don’t punish our industry for doing its job well.” Watson also warned that his company could shift its investment strategy. “To the extent that taxes are higher in the United States, we’ll look elsewhere,” he said. “The real question is not can we afford more taxes,” said Tillerson. “The real question is what do these tax changes mean to that next incremental investment decision that we’re going to make.” WATCH : * * * * * * Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to his RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

Read the full article →

Sen. Carl Levin: Time to Fight Conflicts of Interest on Wall Street

May 11, 2011

Something strange has happened to our financial system over the past years. We have always prided ourselves on having well-supervised financial markets and sophisticated financial institutions. Yet despite the preeminent role of the U.S. financial and capital markets, we have in recent years seen a significant and worrisome increase in conflicts of interests in the world of financial intermediaries and advisers, when their own economic interests and benefits increasingly clash with those of their clients, whose interests the intermediaries and advisers are paid handsomely to represent. Unfortunately, we have allowed these conflicts of interest to compromise the integrity of these very markets and to contaminate so many of the commercial relationships that form the core of our financial system — to the point that many parties and participants in these markets have come to accept a financial universe riddled with conflicts of interest as business as usual. To those who believe that financial markets can only survive and prosper in transparent, ethical and fair conditions, the pervasiveness of conflicts of interest indicates a serious and potentially fatal flaw in our economy. It is high time for us to address and correct this serious problem in the interest of reestablishing thriving financial markets that serve the legitimate capital raising and investment needs of its participants. The Senate Permanent Subcommittee on Investigations, which I chair and of which Senator Tom Coburn is the ranking Republican, spent over two years investigating the factors and causes that have contributed to our financial crisis and recently released a 639-page bipartisan report (available at levin.senate.gov ). In the course of four hearings and the review of countless documents and pieces of correspondence, we uncovered stunning evidence of rampant and blatant conflicts of interest. Time and again, we learned how financial professionals who were supposed to look out for their clients’ interests violated those very interests and instead chose to enrich themselves. Some of the structures we exposed were as impressive in their complexity as they were repulsive in their breach of the clients’ trust. There are countless examples, such as investment vehicles set up to contain highly dubious assets sold with aggressive sales tactics to clients, while the financial institution that selected the poor assets made huge profits by secretly betting against these very assets with short positions. In one case, a $2 billion security called Hudson was marketed by Goldman Sachs to clients with promotional materials representing that the firm’s interest was aligned with the security, when in fact Goldman had secretly held the short position, which resulted in Goldman enriching itself at its clients’ expense when the security tanked. When questioned about the obvious conflicts of interest, evidenced further by internal correspondence within the financial institutions describing the assets as worthless, financial industry representatives regularly claim that their clients are sophisticated investors and assume risks with open or semi-open eyes. This industry-wide retort to accusations of obviously bad and disloyal behavior is very troublesome. It seeks to establish that conflicts of interest are a necessary byproduct of complex financial transactions and that they can always be cured by means of disclosure to the client in the form of so-called risk factors or investment considerations, which most often tend to be grossly inadequate, vague, out of context and meaningless. The Dodd-Frank Wall Street Reform and Consumer Protection Act finally puts to rest the myth of conflicts of interest as perhaps an unfortunate but nevertheless unavoidable part of our financial system, and gives a forceful mandate to our regulators to use their broad powers in order to clean the Augean stables that our financial and capital markets have become. In clear provisions, the law tackles these disgraceful practices that jeopardize our markets’ integrity and long-term viability. Sen. Jeff Merkley, D-Ore., and I successfully argued for explicit provisions in Dodd-Frank prohibiting conflicts of interest and granting necessary powers to the regulators to implement the prohibitions. Together with other Senate colleagues, we were determined to send a clear signal that this gross violation of ethical standards and this colossal betrayal of clients’ trust is intolerable. Conflicts of interest are at the very core of abusive and fraudulent practices that are dangerous to effective and high-performing markets. Many existing prohibitions of dishonest or manipulative acts in the financial and capital markets are based on the same need to prevent and sanction unethical behavior. The Dodd-Frank Act has finally taken a major legislative step in addressing these appalling practices with the urgency they deserve. The financial crisis has shattered the financial security of countless Americans, many of whom have tragically lost their life savings and are facing desperate fears and anxieties about their economic survival and their children’s future. We all witnessed what happens when financial institutions entrusted with maintaining the safety and soundness of the markets fall short in their commercial and ethical duties, and we all received painful reminders that some people with the opportunity to enrich themselves will behave badly when they are not regulated and supervised. Putting an end to this supervisory and regulatory vacuum, and making an unequivocal commitment to go after conflicts of interest, is not regulatory overreaching, as some have claimed. It is a critical and long overdue step toward economic healing and healthy financial markets. The cops on the Wall Street beat must take the mandate we gave them in the Dodd-Frank Act seriously and implement it forcefully to end these conflicts of interest.

Read the full article →

Video: Sullivan Says Google Disclosed Location Data Gathering

May 11, 2011

May 10 (Bloomberg) — Danny Sullivan, editor-in-chief at Search Engine Land, talks about today’s Senate Judiciary subcommittee hearing into Apple Inc. and Google Inc.’s handling of mobile-phone user-location data. He speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Read the full article →

Video: Brookman Says More Mobile-Privacy Protections Needed

May 11, 2011

May 10 (Bloomberg) — Justin Brookman, director of the Center for Democracy & Technology, talks about today’s Senate Judiciary subcommittee hearing into Apple Inc. and Google Inc.’s handling of mobile-phone user-location data. Brookman speaks with Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Read the full article →

John Boehner: ‘Trillions’ In Spending Cuts Loom On Debt Ceiling Vote

May 9, 2011

NEW YORK — The top Republican in Congress wants trillions of dollars in spending cuts as part of must-pass legislation allowing the federal government to continue borrowing to keep it operating and meeting obligations to investors. It’s a new, ambitious marker in a battle over the budget that’s expected to consume Congress for much of the summer. House Speaker John Boehner also said that any legislation to raise the so-called debt limit beyond its current $14.3 trillion cap should be accompanied by spending cuts larger than the amount of the permitted increase in the debt. The Ohio Republican made the comments in a speech Monday night to the Economic Club of New York. Boehner’s comments come as investors and business groups have been seeking assurances that the GOP-controlled House will join with President Barack Obama and the Democratic-led Senate to enact the must-pass debt limit measure, which is needed to prevent a market-roiling, first-ever U.S. default on its obligations. Treasury Secretary Timothy Geithner says a failure to increase the federal government’s ability to borrow would have disastrous effects on the economy. “It’s true that allowing America to default would be irresponsible,” Boehner said. “But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process.” The government is headed toward a $1.6 trillion deficit this year requiring it to borrow more than $125 billion a month. It’s unclear how much of a debt limit increase is coming, but it would take a record increase in the $2 trillion range to avoid a second vote before next year’s elections. The most recent increase in the debt limit of $1.9 trillion was passed by a Democratic-controlled Congress early last year. The debt measure’s path through Congress promises to be extraordinarily difficult since the arrival of 87 House GOP freshmen – many elected with tea party backing last year – for whom the debt vote is politically treacherous. At the same time, Democrats controlling the Senate and the White House support revenue increases that are a non-starter with Republicans. Boehner’s remarks are notable since it’s virtually impossible to produce spending cuts of that size without addressing major benefit programs like Medicare, food stamps and Medicaid. And they came less than a week after Majority Leader Eric Cantor, R-Va., and other top Republicans seemed to acknowledge that political reality would probably rule out such cuts before the 2012 presidential and congressional elections. A GOP budget blueprint that passed the House last month calls for transforming Medicare from a program in which the government directly pays medical bills into a voucher-like system in which future beneficiaries – those presently 54 years old or younger – would receive subsidies for purchases of private insurance plans. Dozens of protesters gathered outside the hotel where the event was being held. “We’re not talking about billions here. We should be talking about cuts in trillions,” Boehner said. “These should be actual cuts, real reforms to these programs and not broad deficit targets that punt the tough questions to the future.” In fact, one of the options being considered by Republicans is to impose a hard cap on government spending that would be backed up with across-the-board spending cuts if the targets aren’t met. The idea is firmly opposed by the White House, which prefers a mechanism that would incorporate automatic revenue increases as well. “Tax hikes should be off the table,” Boehner said. Boehner called for “honest conversations” about the future of Medicare. He added that a failure to act could provoke a debt crisis that could require tougher cuts than anything now being contemplated. “If we don’t act boldly now, the markets will act for us very soon,” Boehner said. “We cannot let this moment pass,” he added. Separately, Senate Budget Committee Chairman Kent Conrad, D-N.D., said it may require a short-term increase in the debt limit to buy additional time for lawmakers to grapple with what is likely to be a very complicated and politically divisive budget debate. In New York, Boehner was asked whether he might consider a short-term debt measure. He did not directly respond. Democrats admit freely that the must-pass debt limit legislation is going to have to have to be accompanied with cuts to spending, and Vice President Joe Biden on Tuesday is hosting a second meeting of a group of lawmakers on deficit reduction. The group is supposed to come up with bipartisan recommendations on deficit curbs to add to the debt limit measure. Geithner has told lawmakers that while the government will officially reach the official debt ceiling in mid-May he can take advantage of bookkeeping maneuvers to stave off a first-ever default until Aug. 2. Sen. Chuck Schumer, a New York Democrat with strong ties to Wall Street, told reporters Monday that it would be a mistake to wait that long to approve the legislation since the markets could easily be roiled when the legislative process takes inevitable twists and turns. Schumer says it would a mistake for Boehner to cut it too close to the Aug. 2 deadline. “A default would be even more catastrophic than a shutdown. The consequences are much more far-reaching and disastrous for the economy,” he said. Boehner negotiated for weeks with the White House earlier this on legislation passed last month funding agency budgets through the Sept. 30 of the budget year. But that agreement was reached on the cusp of a partial government shutdown – a luxury lawmakers probably won’t have in the case of the debt-limit measure. “If America were to default, even for 24 hours, that would have an unprecedented and a catastrophic impact on global financial markets and on American markets,” said Roger Altman, a former top Treasury Department official under President Bill Clinton. “You either default or you don’t. There’s no saying, ‘I’m sorry. I didn’t mean it.’ And that makes it totally different … from a government shutdown.” ___ Andrew Taylor reported from Washington.

Read the full article →

Joe Biden, Congressional Group Begin Budget Talks

May 5, 2011

WASHINGTON — Bowing to political reality, Vice President Joe Biden on Thursday acknowledged the need to pair significant spending cuts with legislation raising the government’s borrowing limit so it can pay its bills. “They’re not technically connected, but the face of the matter is they’re practically and politically connected,” Biden said at the start of budget meetings with top lawmakers at Blair House, the guest house across Pennsylvania Avenue from the White House. As he spoke, the vice president glanced at House Majority Leader Eric Cantor, R-Va. Members of both parties say the government must address out-of-control deficits in order for Congress to go along with the unpleasant task of increasing the debt ceiling beyond the current $14.3 trillion limit. The government borrows more than 40 cents of every dollar it spends. The White House and Republicans who run the House say a deal expected this summer probably won’t produce sweeping changes to taxes and benefit programs such as Medicare and Social Security. But Cantor came to the talks with $715 billion in proposed savings from other programs, including cuts to farm subsidies and food stamps, according to an aide. The federal deficit could reach $1.6 trillion this year, so both sides are setting modest expectations. But they said the meeting offered a chance to identify even small cuts that can build toward a broader agreement. Treasury Secretary Timothy Geithner took some pressure off the talks when he told Congress this week that the government could continue to meet its obligations through Aug. 2. The government is borrowing an average of $125 billion a month. House Republicans have passed a detailed budget blueprint that aims to cut spending by more than $5 trillion over the next decade. Biden sought to flesh out a plan that President Barack Obama outlined last month that would reduce deficits by $4 trillion over 12 years. “We staked out our position in a very definite way. They haven’t,” Cantor said Wednesday. “So we need to understand where they’re coming from.” Obama’s proposal calls for about $1 trillion in higher tax revenues, a nonstarter with House Republicans. At the same time, a GOP plan to slash Medicaid and turn Medicare into a program in which future beneficiaries receive subsidies to purchase private health insurance is dead with the White House and Democrats. In addition to Cantor, the White House invited the second-ranking Senate Republican leader, Arizona’s Jon Kyl; the chairman of the Senate Appropriations Committee, Hawaii Democrat Daniel Inouye; the chairman of the Senate Finance Committee, Montana Democrat Max Baucus; and senior House Democrats Jim Clyburn of South Carolina and Chris Van Hollen of Maryland. One proposal that some Republicans hope to add to the debt ceiling bill would cap spending at about one-fifth of the size of the economy, backed by automatic cuts if Congress failed to enact legislation that keeps spending under the limit. That idea from Sens. Bob Corker, R-Tenn., and Claire McCaskill, D-Mo., is opposed by the White House. It says the plan would force drastic, across-the-board cuts to Social Security, Medicare and Medicaid while doing nothing to fix tax laws full of special breaks. “Arbitrary spending caps are nothing but a backdoor means of imposing immediate and deep cuts in Medicare and Social Security,” said Kenneth Baer, spokesman for the White House budget office. Cantor wouldn’t dismiss the idea, but he said Republicans want something concrete immediately. “All that is fine, but the history of Congress has been that anytime you put enforcement mechanisms in place like that, ultimately they’re waived,” he said. “We’re about trying to effect real cuts, real reforms this year.”

Read the full article →

Politics, Ideology Overshadow Debt Limit Talks

April 20, 2011

(Reuters) – In the looming fight over raising the debt limit, Washington will have its eye on two deadlines: July 2011 and November 2012. The first is the date by which Congress will likely have to act in order to ensure that the United States doesn’t default on its $14 trillion in accumulated debt. The second deadline is when President Barack Obama and most members of Congress will face voters. What has often been a routine, if unpleasant, vote could this year turn into a battleground in the 2012 campaign as Republicans and Democrats advance clashing ideological visions of the nation’s priorities. Fresh from pushing through the largest domestic spending cuts in history, Republicans hope to use the debt limit debate as a vehicle to win bigger cuts and satisfy conservative Tea Party activists who handed them control of the House of Representatives last year. They will also promote a deficit-reduction plan that relies on permanent spending curbs, lower taxes and scaled-back government health programs as they try to wrestle control of the White House and the Senate from Democrats. Obama and his Democrats will lay out a rival vision of deficit reduction through a mix of lower spending and tax increases for the wealthy, arguing that getting the country’s fiscal house in order does not require wholesale cuts to popular programs. The battle is likely to stretch out for months and could bring the world’s most powerful economy to the brink of default — a prospect that would have far more serious implications for investors and the U.S. economy than the government shutdown that was narrowly averted less than two weeks ago with a last-minute deal on spending reductions. “Shutting down the government is like a really bad stomach ache. The debt limit is like a heart attack,” said Norm Ornstein, a congressional analyst at the conservative American Enterprise Institute. POSTPONING D-DAY Unlike nearly every other advanced economy, the United States requires legislative approval for any increase in the amount of money it can borrow. Congress has voted to raise the debt limit 10 times since 2001 as annual budget deficits brought on by wars, tax cuts and the worst recession since the 1930s pushed the country deeper into debt. The Treasury Department estimates it will hit its current limit of $14.294 trillion by May 16, though it could use a variety of tricks to stave off default until early July. Some observers think Treasury could postpone a default for several more weeks beyond that. Whatever the final deadline, Congress isn’t likely to act much before then. “The unwritten rule of Congress is: Why do today what you can put off until tomorrow?” said Dan Ripp, an analyst at New York securities firm Bradley Woods. Though a default isn’t likely, the almost inevitable brinkmanship could unnerve investors who are already rattled by Standard & Poor’s warning that it might strip the United States of its prized triple-A credit rating unless Obama and Congress can find a way to slash the deficit within two years. That would erode the status of the United States as the world’s most powerful economy and the dollar’s role as the dominant global currency. Ripp said he wouldn’t be surprised if investors pushed up the yield on the benchmark 10-year Treasury bond by 20 or 30 basis points if the debate stretches beyond May 16. CHANGING ROUTINES In the past, the politics on a debt-limit vote have been relatively straightforward. The party in power talks about the need to ensure the continued soundness of the country’s credit and votes for an increase; the party out of power inveighs against irresponsible fiscal policies and votes against. Obama, who is now pushing to raise the debt ceiling, voted against an increase as a member of the Senate in 2006, when George W. Bush was in the White House. Nearly every single Republican in the Senate voted for a debt-ceiling increase that year. Three years later, when Democrats held power, every Senate Republican but one voted against an increase. Democrats have followed the same pattern. This year, the politics are more complicated, as House Republicans have to find common ground with the Democrats who control the Senate. Obama hopes that a consensus can be reached in bipartisan talks led by Vice President Joe Biden and that they would wrap up by late June. But another bipartisan group may be a better bet. The so-called “Gang of Six” — three Republicans and three Democrats in the Senate — have been quietly meeting over the past months in an effort to forge a deficit-reduction plan that could win support in both parties. One thing appears certain: Congress will not pass a “clean” bill, free of extraneous conditions, as Obama wants. Republican leaders say any bill that passes the House will have to include long-term spending limits, and even Democrats who control the Senate say spending cuts will need to be part of the package. “The debt limit presents an opportunity for us to make some significant reforms in the budget process,” said Republican Susan Collins, a key swing vote in the Senate. That could take the form of a balanced-budget amendment to the U.S. Constitution — but it’s unlikely to become law as it would also need to win passage in 38 of the 50 state legislatures. Hard caps on federal spending, tied to economic growth, are a more likely option. Democrats could back a limited cap that excludes benefit programs like food stamps and unemployment benefits, according to a congressional Democratic aide. But at this point, Republicans aren’t saying exactly what they want. Even if Republicans include spending limits in the package, they still might not have enough votes to pass it through the House. House Speaker John Boehner was forced to rely on Democratic votes to pass record spending cuts last week after 59 Republicans voted against the deal on the grounds that it did not go far enough. This time, Democrats might not bail Boehner out. “I don’t think the Democrats should give them any votes,” said Representative Peter DeFazio, an outspoken liberal Democrat. “People say, ‘Oh my God, it would be a financial catastrophe.’ Yes it would, but guess who’s first in line for the financial catastrophe: the people on Wall Street. … Let them pick up the phone and educate the Republicans on how destructive these threats are.” (Additional reporting by Caren Bohan; Editing by Kieran Murray) Copyright 2010 Thomson Reuters. Click for Restrictions .

Read the full article →

Oklahoma Set To Repeal Collective Bargaining Law

April 19, 2011

OKLAHOMA CITY (Reuters) – The Republican-controlled Oklahoma Senate dealt organized labor another defeat on Tuesday when it voted to repeal a collective bargaining law. The 29-19 vote means that some of the state’s fastest-growing cities no longer will be required to collectively bargain with sanitation workers and other non-uniformed workers. The measure already passed the Oklahoma House and now goes to Governor Mary Fallin, a Republican, who is expected to sign it into law. The bill would repeal a law passed in 2004, when the Oklahoma Legislature and the governorship were controlled by Democrats. The law required cities with populations over 35,000 to engage in collective bargaining with non-uniformed workers, though it did not affect Oklahoma City, Tulsa, Norman and Muskogee, which already were engaged in collective bargaining. Three Senate Republicans crossed party lines to keep the 2004 law intact, but that wasn’t enough to stop repeal. City employees affected by the bill include sanitation workers, 911 operators, mechanics, animal welfare workers, secretaries and street and water department workers. Some cities have complained the 2004 law was arbitrary in selecting cities with populations of 35,000 or more for mandatory collective bargaining. In Edmond, a thriving city of 81,000 north of Oklahoma City, city manager Larry Stevens said it cost at least $50,000 annually to collectively bargain with nonuniformed employees who voted to join a union. Repeal of the 2004 law means cities will have to decide whether they want to authorize collective bargaining with their workers. With Republicans now in charge of Oklahoma state government, organized labor has been on the defensive this year, just as it has been in Wisconsin and Ohio, where collective bargaining rights have been curbed. “We thought Oklahoma could rise above the stuff that happened in Wisconsin,” James Curry, president of the Oklahoma AFL-CIO, said of the Senate vote. “We’ve been on the defensive for several different bills.” The Oklahoma Legislature earlier passed a bill making it easier for local school districts to fire teachers by taking away their right to appeal terminations to a district court. In Oklahoma, a right-to-work state in which workers are not required to join a union to hold a job, a majority vote is required before municipal workers can be represented by a union and engage in collective bargaining. (Editing by Corrie MacLaggan and Greg McCune) Copyright 2010 Thomson Reuters. Click for Restrictions .

Read the full article →

Conservative Projected Winner In Wisconsin Supreme Court Election

April 15, 2011

MADISON, Wis. — A conservative justice has weathered attempts to link him to Wisconsin’s governor and a divisive union rights law to win re-election, according to county vote totals finalized Friday. Tallies from each of the state’s 72 counties show Justice David Prosser defeated challenger JoAnne Kloppenburg by 7,316 votes. State election officials said they will wait to declare an official winner until the deadline for Kloppenburg to seek a recount passes. She has until Wednesday to call for one. If she does, the state would pay for it because the margin between the candidates is less than a half of a percent of the total 1,497,330 votes cast. Kloppenburg issued a statement that said only that her campaign would weigh whether to request a recount and she would make an announcement no later than Wednesday. Prosser’s campaign had no immediate comment. Kloppenburg faced an uphill fight against Prosser, a 12-year court veteran and former Republican Assembly speaker. But she got a boost in the weeks leading up to the election as her supporters worked to turn anger against Gov. Scott Walker and the union rights law against Prosser. The law, which Walker wrote, strips most public sector workers of nearly all their collective bargaining rights. It also requires them to contribute more to their health care and pensions, changes that will result in an average 8 percent pay cut. Walker, a Republican, has said the law is needed to help balance the state budget and give local governments the flexibility they need to absorb deep cuts in state aid. Democrats see it as an assault on unions, which are among the party’s strongest campaign allies. Tens of thousands of people converged on the state Capitol for weeks to protest and minority Democrats in the Senate fled the state in a futile attempt to block a vote in that chamber. The law is currently tied up in the courts and hasn’t taken effect. Those legal challenges look destined for the state Supreme Court. The law’s opponents hoped a Kloppenburg upset over Prosser would tilt the court to the left and set the stage for the justices to overturn the measure. Turnout in the April 5 election shattered expectations. Unofficial returns from election night initially showed Kloppenburg had bested Prosser by 204 votes. Kloppenburg declared victory on April 6, but the next day the Waukesha County clerk announced she had forgotten to save 14,000 votes on her computer. Those new votes tipped the election to Prosser, giving him an unofficial 7,500 vote lead. The clerk, Kathy Nickolaus, worked for Prosser as a member of the Assembly Republican caucus in the mid-1990s. Democrats have demanded she resign, and authorities launch an investigation into why she didn’t immediately report the votes. State election officials are reviewing Nickolaus’ operations, but she has refused to step down, saying she made an honest mistake.

Read the full article →

Rating Agencies Repeatedly Caved To Banks’ Demands And Helped Cause Crisis, Report Finds

April 14, 2011

NEW YORK — The major credit rating agencies repeatedly sold out to Wall Street banks, so addicted to short-term profits that they repeatedly sacrificed the accuracy of their reports to maintain a competitive edge, a two-year government investigation has concluded. Rather than assess risk accurately, two major rating agencies sold their top seals of approval to their investment bank clients, blessing products that the agencies themselves knew to be undeserving, the Senate Permanent Subcommittee on Investigations concluded in a report released Wednesday. By repeatedly debasing their standards, these agencies helped banks sell shoddy securities to unsuspecting investors, inflating the value of assets that turned out to be worth far less, the report has found. The senate panel, led by Carl Levin (D-Mich.) and Tom Coburn (R-Okla.), levels a two-part charge against the rating agencies: Not only did these companies help inflate a dangerous bubble, the report says, but they also bear responsibility for popping it, as their abrupt downgrades of mortgage-linked securities in 2007 helped set off the panic that caused markets around the world to collapse. These downgrades, the report says, were the “most immediate trigger” to the financial crisis, forcing a parasitic financial apparatus of lenders, regulators, rating agencies and investment banks to reckon with the weak economic underpinnings of its profits. The basic outline of this catastrophe has been widely reported, but Wednesday’s release presents in vivid detail the roles of the key players, including those of Moody’s Investors Service and Standard & Poor’s Financial Services, the two leading rating agencies. Like the banks they served, these two rating agencies focused on short-term profits above the integrity and long-term health of their institutions, a trove of internal documents uncovered by the Senate panel show. “We are meeting with your group this week to discuss adjusting criteria for rating CDOs of real estate assets this week,” reads a 2004 email from an S&P manager, “because of the ongoing threat of losing deals.” Edward Sweeney, a spokesperson for S&P, said in an emailed statement that the company has worked to improve the independence of its ratings since the financial crisis, adding that the sudden downgrades in 2007 were a reflection rather than a cause of poor credit quality. A spokesperson for Moody’s Investors Service did not immediately respond to a request for comment. To a certain extent, the agencies were hamstrung by a system in which conflict of interest is seemingly endemic. The biggest rating agencies, whose assessments are to this day taken at face value by investors around the world, are paid by banks to rate the securities that the banks issue. Complicating matters further, these ratings have legal status: Banks and other institutional investors are required by law to hold a certain percentage of highly rated securities, which gives these institutions an additional incentive to encourage rating agencies to bestow their highest blessing. But despite the system’s flaws, the Senate panel accuses specific people of corrupting the credit rating business, leaving it a twisted version of what it had been years earlier. Brian Clarkson, who worked at Moody’s between 1990 and 2008 and eventually became the company’s president and chief operating officer, promoted this change, the report says. Starting around 2000, under Clarkson’s watch, the formerly “academically oriented” culture of Moody’s began to morph. Clarkson used intimidation tactics to encourage his employees to cooperate with the wishes of investment banks, according to testimony from Mark Froeba, a former senior vice president at Moody’s. “The fear was real, not rare and not at all healthy,” Froeba told the Senate panel. “You began to hear of analysts, even whole groups of analysts, at Moody’s who had lost their jobs because they were doing their jobs, identifying risks and describing them accurately.” People who worked at S&P and Moody’s during this time described a situation in which the companies’ independence eroded almost entirely, so that they perpetually granted the wishes of banks that requested high ratings. A 2006 email from an S&P employee cast the banks as kidnappers, saying the rating agencies “have all developed a kind of Stockholm syndrome,” meaning they sympathize with their captors. And the banks knew exactly how to play the agencies, emails suggest. In 2006, a UBS banker warned an S&P senior manager that if the rating agency didn’t go easy on it, the bank would take its business elsewhere. This habit, once it started, was nearly impossible to break. Bankers would point to precedent, saying that the agency had granted a concession in the past. With the threat of losing market share always looming, the agencies repeatedly capitulated. “I would rather not drop S&P from the upcoming deal,” a Nomura investment banker wrote in 2005, when it looked like the bank wouldn’t get the high rating it wanted. In at least one case, the two parties actually bargained for higher fees. Merrill Lynch wanted Moody’s to rate one of its securities in 2007, but the agency insisted on an unusually high fee, according to emails. Initially, there was hesitation. “Could you point us to a precedent deal where we have approved this?” a Merrill Lynch employee emailed. But after a brief email exchange, the two sides came to an agreement. “We are okay with the revised fee schedule for this transaction,” the Merill Lynch employee emailed. “We are agreeing to this under the assumption that this will not be a precedent for any future deals and that you will work with us further on this transaction to try and get to some middle ground with respect to the ratings.”

Read the full article →

Goldman Sachs Values Assets Low, Sells High To Customers

April 14, 2011

As the subprime crisis was emerging on Wall Street, Goldman Sachs sold a client a slice of a complex security at a price nearly 50 percent higher than what the firm valued it for itself, according to a new Senate report on the origins of the financial crisis. Last week, another bank settled a similar case with securities regulators who accused it of “violating basic investor protection rules.” In May 2007, Goldman sold Bank Hapoalim a $9 million slice of Timberwolf, a $1 billion instrument linked to subprime mortgages, at about 78 cents on the dollar. The Israeli-based bank did not know that Goldman’s internal valuations at the same time pegged the slice at just 55 cents on the dollar. The purchase — the Israeli lender bought it at a 42 percent premium — is similar to one made by the Zuni Indian Tribe, which bought a comparable financial instrument from Wachovia in 2007 at 90-95 cents on the dollar even though the seller of the instrument, Wachovia, valued it on its own books before the sale at just 52.7 cents on the dollar. In that case , Wells Fargo, which took over Wachovia, was ordered to pay an $11 million fine by the Securities and Exchange Commission. In announcing the settlement, SEC director of enforcement Robert Khuzami said the lender violated a basic rule: “Don’t charge secret excessive markups, and don’t use stale prices when telling buyers that assets are priced at fair market value.” In this case, the SEC declined to comment, though it’s been widely reported to be investigating such cases. Goldman Sachs declined to comment. Bank Hapoalim did not return a call seeking comment. The revelations are among a trove of findings discovered by the Senate Permanent Subcommittee on Investigations after a two-year investigation into Wall Street’s role in causing the crisis. The panel accused Goldman of deceiving clients, betting against them and profiting off their losses. In the case involving the Israeli lender, Goldman withheld its internal valuations showing the securities were losing value, declined to tell the bank and other customers that it was betting the security would lose value and profited at the expense of its clients, who didn’t know they were buying “poor quality assets at inflated prices,” according to the report. In the SEC’s case against Wells Fargo, the regulator charged that the lender sold the securities knowing the prices it charged were excessive, according to the regulatory order describing the scheme. Whether Goldman will face sanctions for its dealings with Bank Hapoalim is another matter. “If someone has a security on their books at 50 cents on the dollar, then is marking it up to 90 cents on the dollar, well that just sounds like they’re taking advantage of the person, and it’s excessive,” said Allen D. Madison, a visiting professor at the University of Idaho College of Law who studies securities law. Goldman’s alleged mark-up was smaller, though. “It’s very subjective,” Madison acknowledged. Wall Street veterans, though, say Goldman’s behavior is to be expected. There’s no price transparency, and firms are at the mercy of the biggest banks. “If there had been a transparent valuation paradigm … this never would have happened,” said Sylvain Raynes, a founding principal of R&R Consulting in New York and a structured finance expert. “You could never sell something worth 55 for 78 with full symmetry of information. If you could, I have a bridge for sale.” Raynes said firms like Goldman likely value securities based on the conditions in the market, “but only a few people are privy to these conditions in real time,” he added. Thus, investors and traders at smaller firms can often lose out. “This can only exist in a world like finance where reality is what a few people say it is,” Raynes said. A few months after the Israeli bank bought a slice of Timberwolf, Thomas Montag, a top Goldman executive, referred to the security as “one shitty deal,” according to an internal email obtained by Senate investigators. Goldman kept marketing Timberwolf to its clients after that comment.

Read the full article →

Goldman Sachs Chief Could Face Criminal Prosecution For Role In Financial Crisis

April 14, 2011

WASHINGTON — Goldman Sachs executives deceived clients in order to profit off the brewing financial crisis and then misled Congress when asked to explain their actions, concluded a top lawmaker who led a two-year investigation into Wall Street’s role in the meltdown. Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, will recommend that Goldman executives who testified before his panel, including chairman and chief executive Lloyd Blankfein, be referred to the Justice Department for possible criminal prosecution, the Michigan Democrat announced Wednesday. Members of the subcommittee will now deliberate Levin’s proposal. A Goldman spokesman said its executives were truthful in their testimony, adding that the firm disagreed with many of the panel’s conclusions. Two and a half years after a historic crisis that has yielded not a single criminal conviction of anyone who played a leading role in causing it, the prosecution of such a high-profile Wall Street executive may satisfy the public’s desire to see culprits brought to justice. Last year, the Securities and Exchange Commission settled a lawsuit it had brought against Goldman. But the firm was just one target of a sweeping, 639-page report by the Senate panel into the causes of the crisis. Hardly a fluke occurrence, the meltdown was the product of a deeply corrupt financial system, one fueled by profit-hungry banks that deceived their clients, and overseen by lax regulators who were complicit in the firms’ chronic abuse of the most fundamental rules of the game, the report concludes. The investigation found a “financial snake pit rife with greed, conflicts of interest, and wrongdoing,” Levin said. More than any other government report produced in the wake of the crisis, this account names names, blaming specific people and institutions: Goldman Sachs, Washington Mutual, Moody’s Investors Service, Standard & Poor’s, the Office of Thrift Supervision and others. It targets four types of institutions, all of which it says played key roles in causing the crisis: mortgage lenders that offered prospective homeowners booby-trapped loans; regulators that were paid by the institutions they were regulating and cooperated in widespread deception; rating agencies that gave seals of approval to products they knew to be especially risky, all in the pursuit of market share; and Wall Street banks that duped investors into buying securities that only the insiders knew were destined to go bad. “Blame for this mess lies everywhere from federal regulators who cast a blind eye, Wall Street bankers who let greed run wild, and members of Congress who failed to provide oversight,” said the panel’s ranking member, Sen. Tom Coburn, an Oklahoma Republican. Eventually, as the falling housing market helped drag the broader economy into the most punishing recession since the 1930s, this parasitic apparatus began to crumble. At that point, the key players had already pocketed their profits and were poised to pocket more, while legions of investors and homeowners had been set up for ruin. The forces behind the economic collapse were multiple, with some causes likely originating decades before the crash. But this report exposes the people who, it says, most immediately caused the crisis — whose behavior, motivated by profit above seemingly anything else, trashed the financial system, and magnified the devastation from which the real economy has yet to recover. Wall Street banks magnified the crisis and its fallout. The Senate subcommittee singled out Goldman as a particularly representative case. Investigators pored over millions of pages of internal Goldman documents and correspondence. They found evidence of traders boasting about how they sold their clients “shitty” deals, and discovered documents that detailed how the storied investment bank — which has long maintained it didn’t make a firm-wide bet against American homeowners — reversed course over a three-month period in late 2006 through 2007, shedding bets that the value of subprime mortgage-linked investments would rise. Rather, the firm went “short,” the report exhaustively documents. In Wall Street parlance, shorting an investment means betting its value will fall. Levin said his investigators found 3,400 instances of Goldman officials using the phrase “net short” in the documents they reviewed. He intimated that Goldman likely used the phrase many more times in other documents not reviewed by his panel. As of December 2006, Goldman had $6 billion in bets that the value of its subprime assets would surge, according to the panel’s report. By February of the next year, its mortgage traders had $10 billion in bets that such securities would collapse. By June, the firm was net short on subprime borrowers to the tune of $13.9 billion, according to the report. As more borrowers fell behind on their payments and as the value of securities linked to their mortgages slid, Goldman stayed “net short.” Other banks suffered. But not this one. “Tells you what might be happening to people without the big short,” Goldman’s chief financial officer David Viniar wrote in a July 2007 email to the firm’s chief operating officer, Gary Cohn. Even when these documents came to light last year, Goldman maintained it never took the position that housing-linked securities would decline, particularly considering that it was selling its clients investments that were bullish on homeowners. Goldman, too, suffered losses from housing-related investments, the firm pointed out. But Levin’s investigators don’t dispute that Goldman took losses during the financial crisis. His team asserts that while Goldman salesmen were peddling investments linked to bonds backed by subprime mortgages, its traders were betting that those securities — and others like it — would fail, and that the two teams were in contact. The assertion raises a crucial question about whether the firm violated securities rules prohibiting double-dealing. Worse, Levin said, Goldman traders attempted to manipulate the market for derivatives linked to such investments, according to the report. Internal company documents show that in May 2007, Goldman traders tried to artificially drive down the price of certain bets it wanted to make — bets that borrowers would default on their home loans. The plan was for one group of Goldman traders to peddle such securities across Wall Street “at lower and lower prices, in order to drive down the market price [of the securities] to artificially low levels,” the report notes. Due to Goldman’s size and market power, that would have driven down prices across the Street, forcing holders of such securities to record losses. The firm wanted “to cause maximum pain,” Michael Swenson, a head mortgage trader at Goldman, wrote in a May 25, 2007 email documented in the report. By that point, many Wall Street players were betting on homeowners to default. The price of placing such bets was rising. Goldman wanted a cheaper way in. As part of the plan, another Goldman unit was to buy those positions at a lower price, enabling them not only to add to their growing bet that the American homeowner would eventually default, but to do so at a lower price. Goldman initiated this plan “despite the harm that might be caused to Goldman’s clients,” according to the report. Indeed, clients began to complain of a “sudden mark-down” of their positions. A Goldman representative who showed Swenson the complaints of one hedge fund client was met with a terse response: “We are ok with that,” Swenson wrote in another documented email. “They do not have much more gun powder.” In other words, Goldman didn’t have to worry about the client because the client didn’t have the resources — the “gun powder” — to compete with Goldman, according to the report. One of the traders Swenson oversaw, Deeb Salem, laid this all out in a self-evaluation of his performance in 2007 that he sent to Goldman’s senior management. “In May, while we were remain[ing] as negative as ever on the fundamentals in sub-prime, the market was trading VERY SHORT, and susceptible to a squeeze,” Salem wrote, emphasizing that traders across Wall Street were shorting the market. “We began to encourage this squeeze, with plans of getting very short again, after the short squeezed cause[d] capitulation of these shorts.” “This strategy seemed do-able and brilliant,” he wrote. Interviewed by investigators in October of last year, Salem denied that he had tried to squeeze the market. Investigators reading his self-evaluation put too much emphasis on “words,” according to the report. Goldman abandoned the plan the next month after a rival investment bank’s hedge funds collapsed. “While we disagree with many of the conclusions of the report, we take seriously the issues explored by the subcommittee,” Goldman said in a statement. A Goldman spokesman added that the firm recently overhauled its business standards to improve transparency and disclosure and to strengthen its client relationships. Levin, who briefly described the strategy during a Senate hearing last December, said Wednesday that it was the type of “disgraceful” behavior emblematic of Goldman’s attitude at the time: Goldman first, clients last. Deutsche Bank, Germany’s largest lender and one of the biggest in the world, also came under fire for its crisis-era activities. The panel caught one of its former traders, Greg Lippmann, referring to such securities over email as “crap” and “pigs,” according to the report. Lippmann was made semi-famous by author Michael Lewis for his prescient call to short subprime securities. His unit sold some of the very securities he criticized. The banker who oversaw Lippman’s unit, Michael Lamont, told a colleague at another firm how Deutsche was rushing to sell these financial instruments “before the market falls off a cliff,” according to a February 2007 email Lamont sent. Meanwhile, buyers of the securities were never told. At one point, Lippman described the creation and selling of such instruments as a “Ponzi scheme.” He also said he would “try to dupe someone” into buying a particularly risky mortgage-linked security he himself was being asked to purchase, according to the report. He later backed off some of those comments when interviewed by Senate investigators. Levin said the German bank engaged in “disturbing activities.” During this time, the now head of enforcement at the SEC, Robert Khuzami , served as a top lawyer at Deutsche , overseeing litigation and regulatory investigations. The panel said it didn’t find anything incriminating that would implicate Khuzami in the matters under investigation. Khuzami is now in charge of pursuing financial wrongdoers. He has pledged to recuse himself from investigations involving the German lender. Goldman, for its part, sold a collection of questionable securities. Levin’s investigators uncovered four securities — complex financial instruments with names like Hudson and Timberwolf — that Goldman recommended to customers without fully disclosing key information, or saying whether the firm was betting against them. For example, in the Hudson deal, Goldman told investors its interests were “aligned” with theirs when in reality the firm held “100 percent of the short side” of that security, according to the report. Goldman was betting on Hudson to fail. Also, Goldman said the assets in Hudson were “sourced from the Street.” But investigators said Goldman selected the assets and priced them itself. Wednesday’s disclosures are similar to a case from last year, in which Goldman Sachs allegedly helped set up a mortgage-linked investment for a favored client, designing it to fail, yet selling it anyway to its other clients, reaping the favored client nearly $1 billion. The deal, named Abacus, was also targeted in the Senate report. Goldman settled the accusations with the SEC last year for $550 million. “Goldman was sticking it to their own clients,” Levin told reporters. “Goldman gained at the expense of their clients, and used abusive practices to do it.” Goldman, though, has rejected such characterizations. “Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market,” Goldman chief Blankfein said in testimony before Levin’s panel last year. “The fact is, we were not consistently or significantly net-short the market in residential mortgage-related products in 2007 and 2008.” “We didn’t have a massive short against the housing market, and we certainly did not bet against our clients,” he added. Other Goldman executives made similar claims. “That is simply not true,” Levin said Wednesday. “They clearly misled their clients and they misled the Congress,” he added, announcing that he will recommend that his panel refer all of the Goldman executives who testified before the committee for possible criminal prosecution by the Justice Department and for sanctions by the SEC for violations of securities laws. Goldman disputed Levin’s characterizations. “The testimony we gave was truthful and accurate and this is confirmed by the subcommittee’s own report,” the firm said. “The report references testimony from Goldman Sachs witnesses who repeatedly and consistently acknowledged that we were intermittently net short during 2007. We did not have a massive net short position because our short positions were largely offset by our long positions, and our financial results clearly demonstrate this point.” The investigative panel must deliberate Levin’s recommendations before making any referrals to prosecutors or regulators. Coburn, the Republican, would have to agree with Levin in order for the referrals to be made. Asked about the general lack of prosecutions of high-powered Wall Street executives, Levin replied: “There is still time.” “Hope springs eternal,” he added with a smile.

Read the full article →

Senate Panel Slams Goldman Sachs

April 14, 2011

April 14, 2011 12:38:56 AM By Kevin Drawbaugh WASHINGTON (Reuters) – In the most damning official U.S. report yet produced on Wall Street’s role in the financial crisis, a Senate panel accused powerhouse Goldman Sachs of misleading clients and manipulating markets, while also condemning greed, weak regulation and conflicts of interest throughout the financial system. Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, one of Capitol Hill’s most feared panels, has a history with Goldman Sachs. He clashed publicly with its Chief Executive Lloyd Blankfein a year ago at a hearing on the crisis. The Democratic lawmaker again tore into Goldman at a press briefing on his panel’s 639-page report, which is based on a review of tens of millions of documents over two years. Levin accused Goldman of profiting at clients’ expense as the mortgage market crashed in 2007. “In my judgment, Goldman clearly misled their clients and they misled Congress,” he said, reading glasses perched as ever on the tip of his nose. A Goldman Sachs spokesman said, “While we disagree with many of the conclusions of the report, we take seriously the issues explored by the subcommittee.” The panel’s report is harder hitting than one issued in January by the government-appointed Financial Crisis Inquiry Commission, which “didn’t report anything of significance,” Republican Senator Tom Coburn said at the briefing. More than two years since the crisis peaked, denunciations of Wall Street misconduct are less often heard on Capitol Hill, with lawmakers focused on fiscal issues. But Coburn joined Levin at Wednesday’s bipartisan briefing, firing his own sharp attacks on the financial industry. “Blame for this mess lies everywhere — from federal regulators who cast a blind eye, Wall Street bankers who let greed run wild, and members of Congress who failed to provide oversight,” said Coburn, the subcommittee’s top Republican. “It shows without a doubt the lack of ethics in some of our financial institutions who embraced known conflicts of interest to accomplish wealth for themselves, not caring about the outcome for their customers,” he said. The Levin-Coburn report criticized not only Goldman, but Deutsche Bank, the former Washington Mutual Bank, the U.S. Office of Thrift Supervision and credit rating agencies Moody’s and Standard & Poor’s. “We will be referring this matter to the Justice Department and to the SEC,” Levin said at the briefing, though he did not elaborate. A spokesman later said, “The subcommittee does not intend to reveal the specifics of any referral.” The report offered 19 recommendations for reform going beyond changes already enacted after the crisis in 2010′s Dodd-Frank Wall Street and banking regulation overhaul. Case studies from the go-go years of the real estate bubble formed the bulk of the report, which said a runaway mortgage securitization machine churned out abusive loans, toxic securities, and big fees for lenders and Wall Street. It cited internal emails by Wall Street executives that described mortgage-backed securities underlying many collateralized debt obligations, or CDOs, as “crap” and “pigs.” It said Washington Mutual — which became the largest failed bank in U.S. history in 2008 — embraced a high-risk home loan strategy in 2005 while its own top executives were warning of a bubble that “will come back to haunt us.” The U.S. Office of Thrift Supervision — which will be shut down and merged into another agency under 2010′s Dodd-Frank regulatory overhaul — logged 500 serious deficiencies at Washington Mutual from 2003-2008, but no crackdown followed, the report said. Mass downgrades of mortgage-related investments in July 2007 by Moody’s and Standard & Poor’s constituted “the most immediate cause of the financial crisis,” it said. Investment banks, it said, charged $1 million to $8 million in fees to construct, underwrite and sell a mortgage-backed security in the bubble, and $5 million to $10 million per CDO. As for Goldman, the subcommittee said, the firm “used net short positions to benefit from the downturn in the mortgage market.” It said Goldman designed, marketed, and sold CDOs in ways that created conflicts of interest with clients, while also at times providing the bank with profits “from the same products that caused substantial losses for its clients.” (Additional reporting by Lauren LaCapra and Kim Dixon; Editing Steve Orlofsky) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

How The Budget Deal Affects For-Profit College Regulations

April 10, 2011

Much of Friday’s last-minute budget gridlock centered on policy disputes over funding for Planned Parenthood and environmental regulations. But another largely unnoticed provision at play in last week’s negotiations involved rules that would regulate billions of dollars of federal student loan and grant money allotted to college programs with a track record of poor student outcomes. A spokesman for Senate Majority Leader Harry Reid (D-Nev.) confirmed on Saturday that the final deal will not include a measure that would have prevented the Obama administration from cracking down on certain schools. Last week, a bipartisan group of House members pushed for a rider in the spending bill that would block the Department of Education from implementing rules that would punish certain for-profit college and community college programs for saddling students with debts they cannot repay. Designed as a consumer protection measure, the Department of Education’s proposed “gainful employment” rules would limit federal student aid for programs with a track record of leaving students with high debt burdens. The for-profit college industry, which relies on such funds for the vast majority of its revenues, has viciously fought the regulations over the past year. “It is imperative that the final (budget bill) retain this important funding limitation,” lawmakers backing the rider, including House Education and Workforce Committee Chairman John Kline (R-Minn.), wrote in a letter to House leaders earlier this week. “These regulations are a clear example of federal overreach into the affairs of American institutions of higher education,” On the other side of the debate, more than 40 civil rights and consumer advocacy groups urged Reid to block the rider from any budget compromise. Their letter to the Senate Majority Leader said the provision would prevent the Department of Education from doing what was needed “to protect students and taxpayers from the most toxic choices.” “The Department of Education’s proposed gainful employment regulation recognizes that some current career education programs are so toxic that they doom students to a lifetime of debt burden and waste millions of precious taxpayer dollars,” the letter read. The House voted on a similar amendment to block the Obama administration from implementing gainful employment rules in its February budget bill, a measure that received overwhelming support from Republicans and more than 50 Democrats. Gainful employment rules would apply to career-focused programs at both for-profit and non-profit colleges, but the for-profit college industry has mounted an unprecedented lobbying campaign against the regulations. As drafted, the rules would track students after they leave college and evaluate them in two ways: whether they are paying down the principal on their student loans and whether they have attained an income that allows them to manage debts. Far from sweeping, a draft version of the regulations would allow degree programs for-profit colleges and other vocational schools to remain fully eligible for federal aid money even if less than half of their students are repaying the principal on their loans. Some could remain eligible even if only a third of students are in repayment. Programs that fail to meet certain requirements could lose access to federal student loan and grant money — crucial revenues for the for-profit sector. Data released by the Department of Education earlier this year showed that a quarter of all students enrolled at for-profit schools defaulted on federal student loans within three years — more than double the rate of those who attend non-profit institutions. For-profit college students make up less than 15 percent of enrollment nationwide but comprise nearly half of all student loan default rates. The Department of Education has not yet released a final version of the gainful employment rules, but is expected to do so within months.

Read the full article →

Federal Budget Deal Reached, Government Shutdown Averted At Least Temporarily

April 9, 2011

Perilously close to a midnight deadline, the White House and congressional leaders have reached agreement to cut billions of dollars in spending to avoid the first government shutdown in 15 years. House Speaker John Boehner informed the GOP rank and file of the accord, reached in grueling negotiations over several weeks, an official said. “We have an agreement,” concurred a spokesman for Senate Majority Leader Harry Reid, Jon Summers. Because drafting and then passing the broader legislation could take days, congressional leaders raced to approve a stopgap measure to prevent the onset of the first shutdown in 15 years, due to begin at midnight. Officials said it would keep the government in funds through the middle of next week. Boehner told reporters just before 11 p.m. EDT that the House would continue working. Republicans said the deal called for $39 billion in spending cuts, a measure that one official said Boehner told his rank and file marked the “largest real-dollar spending cut in American history.” Over a decade, the agreement would cut more than $500 billion from the federal budget, Boehner added, according to a participant in the meeting. The agreement marked an extraordinary reach across party lines and the first test of a new era of divided government that includes Obama in the White House, control of the Senate by fellow Democrats and a tea party-flavored Republican majority in the House.

Read the full article →

Senate Dems Reject EPA Ban

April 6, 2011

WASHINGTON — Senate Democrats have defeated a Republican effort to ban the Environmental Protection Agency from controlling the gases blamed for global warming. In a 50-50 vote, the Senate rejected a measure by Minority Leader Mitch McConnell and Sen. James Inhofe of Oklahoma. It would have repealed a 2009 finding by federal scientists that climate change caused by greenhouse gases endangers human health and prevented the agency from using existing law to regulate them. The amendment – to a small business bill – needed 60 votes to pass. The Republican-controlled House is expected to pass an identical bill later Wednesday. The White House has threatened to veto it. Senate Democrats proposed less aggressive prohibitions on the EPA. The most votes any of the three alternatives received was 12.

Read the full article →

House Republicans Maneuver For Budget Cuts As Shutdown Looms

April 4, 2011

WASHINGTON — Congressional Republicans maneuvered on two fronts Monday in the federal spending showdown, demanding Democrats agree to more than $33 billion in swift cuts to avoid a government shutdown, even as they readied a separate plan to slash deficits by a staggering $4 trillion over a decade. With little progress evident on the first track, President Barack Obama invited key lawmakers to the White House in search of a deal to avoid a partial shutdown Friday at midnight. “Time is of the essence,” said White House press secretary Jay Carney, announcing plans for the Tuesday meeting. House Speaker John Boehner of Ohio said he would attend on behalf of Republicans. But he also emphasized in a statement that the $33 billion total often cited “is not enough and many of the cuts that the White House and Senate Democrats are talking about are full of smoke and mirrors.” Boehner has said repeatedly he does not want a shutdown. Yet a new public opinion poll underscored the political dilemma confronting the leader of a conservative majority swept into power with the support of tea party supporters. In a survey by the Pew Research Center for the People & the Press, 68 percent of tea party adherents said lawmakers should stick to their principles in the budget negotiations, even if it means the government shuts down. Yet in the population as a whole, only 36 percent supported that view, according to the survey, and only 38 percent of independents, who comprise a key swing vote in any election. In remarks on the Senate floor, Majority Leader Harry Reid emphasized a similar point. Tea party Republicans, the Nevada Democrat said, “stomp their feet and call ‘compromise’ a dirty word and insist on a budget that will hurt America rather than help it.” He said a deeper-cutting House-passed bill “slashes programs for the sake of slashing programs. It chops zeroes off the budget for nothing more than bragging rights.” The House passed the legislation more than a month ago calling for $61 billion in cuts from current levels. In addition, that measure includes dozens of proposals not directly related to spending, including curbs on the Environmental Protection Agency and other federal regulatory agencies and a denial of funding to Planned Parenthood. Unlike the House, the Senate has yet to pass a spending bill to close out the current budget year, now more than half over, and Democrats are divided on how deeply to cut. In several weeks of maneuvering, Congress has agreed on a pair of stopgap bills that cut $10 billion, and Obama has signed them. While much of the leadership’s attention was focused on the Friday deadline, Republicans also looked ahead to Tuesday’s planned launch of the most far-reaching series of deficit-reduction measures in years. Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, has said the blueprint would cut in excess of $4 trillion from the budget, far more than the $2.2 trillion that Obama claimed in his own blueprint and on a par with recommendations of a bipartisan deficit commission last winter. Other officials said that under Ryan’s proposal, the annual deficit would fall below $1 trillion at the end of the coming fiscal year but would not be erased by the end of the decade. The deficit is currently projected at $1.6 trillion for the current fiscal year, and the administration estimates that under Obama’s budget, it would drop to $1.1 trillion next year and $774 billion in 2021. Republican officials said about $1 trillion in savings under their emerging plan would come from changes to Medicaid, the federal-state program that provides health care for the poor. Spending on hundreds of domestic programs – the accounts at the heart of the talks to avoid a government shutdown – would be returned to levels in effect in 2008, at a savings of hundreds of billions of dollars. One of the most significant changes would occur in Medicare, which provides health care for seniors, but would not affect current beneficiaries or workers age 55 and older. Once eligible, they would receive Medicare coverage from private insurance companies that operate plans approved by the federal government. No details were available on what level of service would be assured, or how much financial support the government would provide. At the same time, officials said Ryan intended to propose restoring at least some of the $129 billion in subsidies that Democrats cut a year ago from a private alternative to traditional Medicare that is already in existence. The Obama administration and other critics maintained that payments to private insurers exceeded the government’s cost for the traditional Medicare program. The officials who described the recommendations did so on condition of anonymity, saying they were not authorized to pre-empt a formal announcement. Republicans intend to move quickly to advance their new blueprint. They hope to have the Budget Committee approve it Wednesday and push it through the House next week. The plan is expected to serve as a rallying point for Republicans who took power in January, but it is also likely to give Democrats a ready target to attack. Democratic Leader Nancy Pelosi has drawn attention in recent days to public opinion surveys reporting widespread skepticism about fundamental changes in Medicare.

Read the full article →

Two Sets Of Facts In Budget Dispute

April 1, 2011

WASHINGTON — To hear the Democrats tell it, House Republicans are being dragged by their extreme tea party allies to shut down the government, yet agreement is near on a sensible package of spending cuts to prevent it. And according to Republicans, Democrats want a government shutdown and talks aren’t all that far along to avoid one. Welcome to divided government, where each party lays claim to its own set of facts, federal agencies face a shutdown on April 9 without a compromise and any progress toward a deal is wrapped in partisan rhetoric. “Now, here’s the bottom line. Democrats are rooting for a government shutdown,” House Speaker John Boehner said Thursday at a news conference. Republicans are “listening to the people who sent us here to cut spending so we can grow our economy. As I said from the beginning, our goal is to cut spending, not shut down the government.” Democrats have yet to outline a plan to cut spending, he added, “only rhetoric portraying the American people as extreme.” A few hours later, Sen. Chuck Schumer, D-N.Y., strode onto the Senate floor and said, “We are right at the doorstep of a deal.” “As the vice president said last night, there has been agreement to meet in the middle, around $33 billion in cuts,” he said. The New York Democrat referred to Vice President Joe Biden’s statement in the Capitol on Wednesday evening that the two sides were working on a deal containing that level of cuts. Schumer, who has taken on an increasingly visible role within his party, noted that one prominent conservative columnist had predicted that Republicans would be blamed politically if there were a shutdown. “It bothers me when I hear some on the other side of the aisle or in the tea party say we should shut down the government,” he said. Despite the daily rhetorical barrage, the two sides have shown flexibility in recent days as the deadline draws closer. At his news conference, Boehner said Republicans would fight for all the spending cuts they could. But he noted they could not “impose our will” on the Democrats and pointedly refrained from insisting on the full $61 billion contained in legislation the House passed more than a month ago. Two days earlier, Senate Majority Leader Harry Reid, D-Nev., said Democrats were willing to consider limitations on government regulators as well as other non-spending items the House seeks. In exchange, Democrats expect Republicans to scale back on their demands for spending cuts. Reid did not identify any, but other officials have said curbs on the Environmental Protection Agency and other government regulators were likely candidates. Another is a proposed ban on the use of government funds to pay for abortions for poor women living in the District of Columbia. Additionally, Boehner has made a personal priority of a measure the House passed earlier this week to reinstate school vouchers for District of Columbia students. The program is the only one in the country that uses federal tax dollars to subsidize private-school tuition.

Read the full article →

Megabank Myths

April 1, 2011

Back when it really mattered — last spring, during the debate over the Dodd-Frank financial regulation — Senator Ted Kaufman, Democrat of Delaware, emphasized repeatedly on the Senate floor that the proposed “resolution authority” (the power to shut banks) was an illusion.

Read the full article →

Senate Republicans Seek To Mandate Balanced Budget

April 1, 2011

(Reuters) – All 47 Senate Republicans, seeking fiscal discipline in big-spending Washington, proposed on Thursday an amendment to the Constitution that would require a balanced federal budget. A number of such efforts have failed over the years. But backers are hopeful this one may succeed amid an unprecedented push to trim the federal deficit, projected to hit $1.4 trillion this year. “It’s long past the time that we stop spending money we don’t have,” said Senator Lamar Alexander, a member of Republican leadership. “Requiring that we balance our national budget is a logical step in that direction.” To become law, proposed constitutional amendments must be approved by two-thirds majority votes in the House of Representatives and the Senate, and then ratified by three-quarters of the 50 states. “The whole thing is a long shot,” said Dan Ripp of Bradley Woods, a private firm that tracks Washington for investors. “The framers (of the Constitution) designed the amendment process to be difficult on purpose,” Ripp said. Under the Republican proposal, the requirement for a balanced budget would go into effect five years after ratification. It would permit limited exemptions, such as during a time of war. The proposed amendment would also require a two-thirds vote in the House and Senate to raise taxes. Since the Constitution was ratified in 1789 as the supreme law of the land, just 27 amendments have been approved, the last in 1992. A balanced budget amendment passed the Republican-led House in 1995, but fell short in the Republican-led Senate. Democrats now control the Senate, 53-47. So far, none of them have embraced the Republican balanced-budget proposal. (Reporting by Thomas Ferraro, editing by Eric Beech) Copyright 2010 Thomson Reuters. Click for Restrictions .

Read the full article →

Budget Compromise Talks Continue As Tea Party Watches

March 31, 2011

WASHINGTON — Congressional negotiators are working on a proposal for around $33 billion in spending cuts over the next six months and Vice President Joe Biden was reporting “good progress” in budget talks to prevent a government shutdown. But that’s considerably less in cuts than tea party activists demanded. The tentative split-the-difference plan would end up where GOP leaders started last month as they tried to fulfill a campaign pledge to return spending for agencies’ daily operations to levels in place before President Barack Obama took office. That calculation takes into account the fact that the current budget year, which began Oct. 1, is about half over. The $33 billion figure, disclosed by a congressional aide familiar with the talks and confirmed by Biden, used a measuring stick tied to Obama’s budget instead of a current spending freeze. The number is well below the $60 billion-plus in cuts the House passed last month, but it still represents significant movement by Senate Democrats and the administration after originally backing a freeze at current rates. “There’s no reason why, with all that’s going on in the world and with the state of the economy, that we can’t avoid a government shutdown,” Biden told reporters after a meeting in the Capitol with Senate Democratic leaders. Under Biden’s math, the White House is conceding $73 billion in cuts from Obama’s requests, which contained increases never approved by Congress. Republicans originally wanted $100 billion in cuts using the same gauge. Some tea party-backed GOP lawmakers want the original $100 billion. With a tea party rally set for Thursday on Capitol Hill, it’s unclear how many of the 87 freshmen Republicans elected last fall could live with the arrangement between top Democrats and House Speaker John Boehner, R-Ohio, who plans to meet with freshman GOP lawmakers. Both sides said the figure under consideration is tentative at best and depends on the outcome of numerous policy stands written into the bill. Boehner spokesman Michael Steel said: “There’s no agreement on a number for the spending cuts. Nothing is agreed to until everything is agreed to.” Some conservatives appear insistent on the full range of spending cuts, but others recognize that compromise is required to win Obama’s signature and support from Democrats who control the Senate. Far bigger fights are ahead on a longer-term GOP budget plan that takes a more comprehensive approach to the budget woes. Also looming is a must-pass bill to allow the government to borrow more money to meet its commitments. Republicans hope to use that measure to force further spending cuts on the president. “I don’t believe that shutting down government is a solution to the problem. Republicans and Democrats need to work out a compromise,” said Rep. Charles Bass, R-N.H. “Let’s get this over with and get on to the budget.” But Rep. Mike Pence, R-Ind., who earlier warned that “It’s time to pick a fight,” wants party leaders to hang tough. The legislation would bankroll the day-to-day operating budgets of federal agencies – including the wars in Iraq and Afghanistan – through Sept. 30, the end of the current budget year. ___ Associated Press writer Jim Kuhnhenn contributed to this report.

Read the full article →

Ohio Collective Bargaining Restrictions Prevail, But Unions Vow Fight

March 31, 2011

COLUMBUS, Ohio — Ohio lawmakers have had their chance to vote on a bill limiting collective bargaining rights for 350,000 public workers across the state. Next will be the public’s turn. Even before the contentious Senate Bill 5 – in some ways tougher than Wisconsin’s – had cleared the Legislature late Wednesday, unions and Democrats in this once-proud labor stronghold vowed to put it on November’s ballot as a referendum. “O-H-I-O! S.B. 5 has got to go!” protesters chanted ahead of a final Senate vote of 17-16 that sent the bill to Gov. John Kasich for his signature, expected this week. The vote followed a day filled with Statehouse demonstrations by about 750 people, who raucously chanted and shouted throughout the process. After a House vote of 53-44, opponents spewed expletives at House members. The vitriol wasn’t limited to the Statehouse. Leo Geiger, 34, a Republican who works as a sewer inspector for the city of Dayton, said he’s “deathly afraid that this is going to affect me, my family and the entire state of Ohio in an incredibly negative way.” He believes the bill is political payback for unions’ support of Democrats in November’s election. “I find this to be loathsome,” he said from Dayton on Wednesday night. He didn’t attend protests because he couldn’t take the time off. “I find this to be disrespectful to Ohioans and disrespectful to the process of democracy.” The measure affects safety workers, teachers, nurses and a host of other government personnel. It allows unions to negotiate wages and certain working conditions but not health care, sick time or pension benefits. It gets rid of automatic pay increases, and replaces them with merit raises or performance pay. Workers would also be banned from striking. A ballot challenge would stall implementation of the law that Republicans championed as vital to Ohio’s economic future. “This state cannot pay what we’ve been paying in the past,” House Speaker Bill Batchelder said during a news conference ahead of Wednesday’s vote. “Local government and taxpayers need control over their budgets. This bill, as amended and changed, is a bill that will give control back to the people who pay the bills.” He said House Republicans were launching a website, sb5truth.com, to correct what they see as falsehoods about the measure. Republican Gov. John Kasich has said his $55.5 billion, two-year state budget counts on unspecified savings from lifting union protections to fill an $8 billion hole. During House debate, state Rep. Robert Hagan, a Democrat from Youngstown, took issue with the notion that the bill was aimed at saving money. “Don’t ever lie to us and don’t be hypocritical and don’t dance around it as if it’s finances, because you know what it is: It’s to bust the union,” Hagan told his fellow lawmakers. Democratic state Sen. Charleta Tavares, a recent Columbus city councilwoman, called the bill “paternalistic, patronizing, disrespectful and condescending” to city leaders who balance their budgets annually, not every two years as Ohio does. Pickerington teacher Patricia Kuhn-Morgan said she was confused by connections being drawn between the bill and job creation. “As teachers, the best way we can have to job creation is to educate the public,” she said. She predicted Wednesday’s votes will hurt GOP lawmakers on Election Day. “I’ve spoken to a lot of educators who are typically straight-ticket Republicans that have said to me that they won’t ever vote for another Republican because of how this bill’s been pushed through and the democratic process has been abused,” she said as she awaited the Senate’s vote. Though protests were much larger in Wisconsin, Ohio unions claim they hold the hearts of a majority of voters in their political swing state. Wisconsin Gov. Scott Walker signed a bill this month eliminating most of state workers’ collective bargaining rights. That measure exempts police officers and firefighters; Ohio’s does not. The Ohio bill has drawn thousands of demonstrators, prompted a visit from the Rev. Jesse Jackson and packed hearing rooms in the weeks before the Senate passed the earlier version of the measure. Its reception in the House had been quieter, as unions resolved themselves to its approval and shifted their strategy to the fall ballot. Democratic state Sen. Joe Schiavoni said the way the bill had been rushed through the legislative process without union input was unfair – but he said voters would have the last word. At the ballot box, he said, “all Ohioans will get the opportunity to right the wrongs they committed in the last election, and, ladies and gentlemen, that is fair.” ___ Associated Press writers Ann Sanner and JoAnne Viviano contributed to this report.

Read the full article →

Tea Party Rallies In City Activists Love To Hate To Send GOP Message On Spending

March 31, 2011

WASHINGTON — The tea partiers who helped drive GOP gains in the last election are rallying in the city they love to hate Thursday, urging Republican House leaders – Speaker John Boehner above all – to resist the drive toward compromise in the protracted fight over the federal budget. Even, they say, if that means Congress fails to do its most important job – paying for the government. And if Boehner opts instead to agree to a deal with President Barack Obama? “You’re going to see massive amounts of (GOP) primaries” in next year’s election, said Mark Meckler of the Tea Party Patriots. If the Ohio Republican strikes a budget deal that doesn’t cut spending enough, Meckler said Wednesday, “he is going to face a primary challenge.” It’s tough talk from a member of the loosely affiliated political force that helped drive Boehner’s Republican troops into the House majority last year on a platform of smaller, more austere government. And during three months in power, Boehner’s been listening. The House passed a tea party-friendly budget that would cut hundreds of programs and eliminate others, including a costly defense project. It also would repeal the Democrats’ year-old health care law and assorted regulations on industry – all unlikely to pass the Democrat-controlled Senate. The intensifying talks are as much a test of credibility and clout for the tea party as they are a measure of Boehner’s ability to lead. There’s evidence that some of the 87 members of the freshmen class have been educated by their real bosses – their constituents – on the fact that compromise is sometimes the only path to governing. And governing is what lawmakers get paid for. “Compromise on the subject of spending is a tough sell. It doesn’t mean it’s an impossible sell,” said freshman Rep. Steve Womack, R-Ark., a member of the Appropriations Committee who won his seat with 72 percent of the vote. Though he acknowledges the voters’ mandate to cut spending, “I also live in a realistic world.” Another freshman suggested the no-compromise crowd save their powder. The current, slow-motion showdown is only over a budget to fund the rest of this fiscal year. Just wait, said Rep. Adam Kinzinger, for the fireworks over next year’s budget, as well as a must-pass bill to allow the government to borrow more money to meet its commitments. Republicans hope to use that measure to force further spending cuts on the president. “What I tell folks is: This is like Fort Sumter in the Civil War,” the Illinois Republican said Wednesday. “This is the first fight. The big battle is still ahead of us.” Such rhetoric reflects a reality that budget negotiators have assumed for weeks: That with time, those new to Capitol Hill would learn that the only way a budget passes is with spending cuts that all sides agree on. And that means reductions somewhat less than the $61 billion Republicans approved in the budget the House passed last month. Wednesday night, talks centered on $33 billion in cuts, and there was evidence that members of the broader Republican caucus weren’t balking. “I don’t believe that shutting down government is a solution to the problem. Republicans and Democrats need to work out a compromise,” said Rep. Charles Bass, R-N.H. “Let’s get this over with and get on to the budget.” The tea party rally Thursday promised political muscle and headline-grabbing rhetoric aimed at reminding lawmakers of the populist budget-cutting furor that propelled them to power. Headlining the event was to be the movement’s star and possible presidential contender Michele Bachmann, who also happens to be the top Republican fundraiser in the House. House Republican leaders weren’t expected to attend the event. But Senate Republican Leader Mitch McConnell is expected to defend the tea party movement on the Senate floor against Democrats who have suggested it has lost popularity. A new AP-GFK poll of 1,001 adults conducted March 24-28 showed that support for the movement hasn’t budged since the election. About 30 percent of respondents said they were tea party supporters, the same percentage reported in surveys since October. “If you ask me, the goals of the tea party sound pretty reasonable,” McConnell said in remarks prepared for a Senate floor speech Thursday. “These folks recognize the gravity of the problems we face as a nation, and they’re doing something about it for the sake of our future,” McConnell said. “They’re making their voices heard. And they’ve succeeded in changing the debate here in Washington from how to grow government to how to shrink it.” The senator learned about tea party power in his own backyard last year when the movement’s candidate, now-Sen. Rand Paul, won the GOP nomination over one that McConnell had endorsed. Then, in deference to the tea party’s demand for a ban on so-called earmarks, McConnell reversed years of unapologetic resistance to such a policy and lined up with its supporters. Lest lawmakers forget the lessons of 2010 as they face an April 8 deadline for the current budget, the rally Thursday is aimed at reminding them. “We’re still here,” Meckler said.

Read the full article →

GOP Taps Once-Bankrupt Congressman as Face of Fiscal Restraint

March 30, 2011

WASHINGTON — Democrats pounced on the man Republicans chose today to be their spokesman for fiscal restraint: a freshman Arkansas congressman who once filed bankruptcy over unpaid credit card bills. Rep. Rick Crawford (R-Ark.) was the lead signer of a letter endorsed by a pack of GOP freshmen demanding Senate Majority Leader Harry Reid (D-Nev.) pass a budget-cutting spending measure to fund the government for the rest of this fiscal year. “Mr. Reid, your record on spending in the Senate is one of failure,” wrote the 30 lawmakers, who also vowed to rally on the Capitol steps until the Senate passed a budget. “You have failed to pass a budget, failed to restrain spending, and failed to put our country on sound fiscal footing,” they said. But Crawford seemed an odd choice to expound on sound fiscal footing. “Really?” said Democratic Congressional Campaign Committee spokesman Jesse Ferguson. “Of all the people for House Republican freshmen to pick as their front man for a stunt about fiscal responsibility, they picked Representative Rick Crawford who couldn’t even pay his own credit card bills and went bankrupt because of it,” Ferguson said in a statement. According to press accounts during Crawford’s campaign, he declared bankruptcy in 1994 over $12,611.67 in debt – mostly for credit cards. His spokeswoman did not immediately answer requests for comment, but Crawford’s representatives at the time suggested he learned from his humbling experience, went on to be a successful businessman, and didn’t want the country to suffer a similar fate. Still, Democrats thought Crawford’s past showed GOP hypocrisy. “Tells you something about how serious House Republican freshmen are about fiscal responsibility,” said Ferguson.

Read the full article →

Leading House Dem Explains Vote To End Obama Admin’s Foreclosure Program

March 30, 2011

WASHINGTON — Eighteen Democrats in the U.S. House of Representatives sided with Republicans in a symbolic vote to terminate the Obama administration’s signature anti-foreclosure program. Among those Democrats was California Rep. George Miller, a member of House Democratic leadership and a key ally to Minority Leader Nancy Pelosi (Calif.), who voted the other way. Miller told HuffPost he made up his mind to vote to kill HAMP after considering stories from California residents who said they tried to get reduced mortgage payments under the program and wound up ripped off or otherwise abused instead. In October, California Democrats compiled a report including dozens of stories about mortgage modifications gone bad. “What we saw was just a commonality of abuse by servicers, the banks, of our constituents,” Miller said. “They were being lied to. Their documents were being lost on a regular basis. Their phone calls were not returned. They were told they’d be handed off to another person, that never took place. They were told they would be eligible in a couple months, that never took place.” Miller said the Treasury Department’s handling of the program has abetted “wholesale abuse and misinformation and lies” by the mortgage industry. Under HAMP, eligible borrowers are supposed to see their mortgage payments reduced if they successfully make lower payments during a three-month trial period. But delays and mixed signals from mortgage servicers are common. Fewer than 600,000 homeowners are in permanent modifications, according to Treasury’s data, while more than 800,000 have been kicked out of the program, which was projected to help between 3 and 4 million when President Barack Obama launched it in February 2009. Treasury argues it can’t punish servicers who violate program guidelines, citing what it believes to be the voluntary nature of HAMP. Federal bailout watchdogs, however, have repeatedly criticized that argument, on the grounds that the firms signed contracts that allow Treasury to withhold payment of taxpayer dollars for failing to comply with HAMP rules. Miller said he did not think homeowners would be better off today without HAMP. He said he cast his vote to send a signal to the Obama administration that it needs to improve the program. The Senate is not likely to pass the bill, which would face a White House veto. He was not among the Democrats who signed a letter to Treasury Secretary Timothy Geithner Tuesday with recommendations for improving the program. Their suggestions included eliminating the “dual track” system that allows servicers to move forward with foreclosures and modifications simultaneously. “The real answer, of course, is to give these people access to the courts to get the modification, but the banks obviously have returned to their former position of power in the Congress,” said Miller, apparently referring to the new Republican majority in the House of Representatives. The Democratic-controlled House passed a bill allowing bankruptcy judges to modify mortgage terms in 2009, but the measure died in the Senate . Many consumer advocates consider judicial modification — also known as “cramdown” — the best way to address the housing crisis, arguing that the mere threat of cramdown will encourage lenders to reduce principal amounts owed by borrowers. Nearly one in four U.S. homeowners with a mortgage owes more on the mortgage than the home itself is worth.

Read the full article →

Jamie Court: Google CEO for Commerce Secretary? A Bad Idea

March 30, 2011

The strong buzz in Washington, DC is that Google CEO Eric Schmidt is President Obama’s top choice for Commerce Secretary and an appointment is coming soon. The CEO who made billions collecting our personal information online and serving us up to advertisers, the guy who created online privacy problems, would head the federal agency responsible for developing and executing the administration’s online privacy policies. Part of me wants to see Schmidt appointed because he would finally have to testify before Congress. Here’s a guy who presided over the largest wiretapping scandal in American history, when Google Street View cars took data presumably from tens of millions of wi-fi networks across the world, and he has not even had to testify before Congress. Now that’s a guy who is wired. Connected all the way to the Oval Office apparently. (Consumer Watchdog made a very funny video about what Schmidt’s faux testimony would look like.) Apparently no one in the West Wing has been able to talk practically with the president, who really wants Schmidt. It’s hard to imagine how a guy who owns roughly $5.41 billion worth of Google stock could avoid a conflict of interest. There’s only one way: Schmidt will have to sell all his stock, and his part ownership of the company. You cannot place that much wealth in a blind trust when everyone knows where the wealth springs from. That’s a seeing-eye trust. The very type that exploded the career of one time Senate Majority Leader Bill Frist. Then there’s Schmidt’s crazy mistress/girlfriend stuff that’s too rich for the GOP family values crowd in the Senate not to come after on the character/family values issue. Since this is business, not personal, so I’ll let the online tabloids talk: Eric Schmidt’s ex-girlfriend sets her sights on Facebook ; Google’s CEO Demanded His Mistress Take Down Her Blog ; Is Google CEO’s Other Girlfriend Getting Indiscreet, Too? ; Google CEO Deters Mistress Tattle Tales ; Getting Cozy with Google CEO’s Mistress And His Money ; The Google CEO and His Mistress: The Tell-All Blog ; How Google CEO’s Ex Girlfriend Keeps Tabs on Him ; Google CEO Has Money for ‘Dear Friend’ of His Sometime Girlfriend There are strong policy reasons not to make America’s policy on commerce Google’s brand of business. Consumer Watchdog enumerated them in a letter to President Obama weeks ago, but we have not received a letter back, not even a Gmail. In a nut shell, Google’s brand of business is to ignore ethical mores, social customs, and the rule of law — as a federal judge ruled last week to uphold copyright laws against Google’s digital assault on them in its Digi-Book-Mart deal. The judge sided with Consumer Watchdog and other consumer groups when claiming the deal would give Google a “de facto monopoly.” Obama has shown some remarkably bad judgment at pivotal moments of his presidency. Right before the spill in the Gulf of Mexico, he agreed to include offshore drilling in his energy bill. Just after the tsunami struck Japan, his administration reiterated its support for nuclear energy. Now, on the verge of an online privacy revolution, Obama is about to appoint a CEO who is The Anti-Privacy to his chief privacy post. 90% of the public wants more online privacy. Hmmm, do you think Americans will be happy with Mr. Schmidt and the president in the end? Part of me is looking forward to this nomination since, deal or no deal with Senate leaders on the confirmation, Schmidt will be a big, bright pinata for privacy advocates when he gets to take the oath at the confirmation hearings. I’m betting there are some senators who will ask the tough questions, and finally we’ll get some answers about Google’s scandals. Google stock might even suffer the consequences. This could be one confirmation hearing where Mr. Schmidt, whose known for his verbal gaffes , could cost himself hundreds of millions of dollars with the wrong word choice. (Remember, “Google’s policy is get right up to the Creepy Line?”) If Google’s stock falls $50 or so from its $575 heights based on those hearings, Schmidt’s wealth, based on 9,372,741 shares of stock, goes down by about about a half billion dollars. Now that’s one expensive confirmation process! Jamie Court is President of Consumer Watchdog. His most recent book is The Progressive’s Guide To Raising Hell.

Read the full article →

Schumer, Cantor Go Head-To-Head Over Federal Budget

March 30, 2011

WASHINGTON — They’re a pair of flamboyant lawyers who are fond of cameras and adept at messaging, two deputies with ambitions to land, someday, on top. So the emerging political warfare led by Democratic Sen. Chuck Schumer and Republican Rep. Eric Cantor, now playing out in multimedia form over the budget impasse, can resemble a Spy vs. Spy contest over some of the most serious issues facing Congress and the nation. For them it’s not just about getting to a budget agreement, cutting spending or the deficit. In fact, neither Cantor nor Schumer is directly involved in the sensitive, secretive budget negotiations. But the snippy rhetoric is expected to intensify as the April 8 deadline – and a possible government shutdown – loom. To these two, and arguably all of the congressional Republicans and Democrats they represent, the federal budget mess is a campaign within the long 2012 re-election campaign. And that means all the responses and “pre-sponses” the Internet, the Twitter verse, television and the old-fashioned telephone allow. Tuesday provided an apt, daylong example. Reporters dialing in to a news conference-by-phone could hear Schumer, the media-savvy New Yorker tapped by Majority Leader Harry Reid to handle the party’s messaging, giving talking points on the budget to other Democratic senators. He was clearly unaware that reporters were already on the line. Schumer’s advice was familiar: Call the House Republicans’ proposed spending cuts “extreme.” “Extreme and draconian,” Schumer, 60, advised. “The subtext of this is, the only way we can avoid a shutdown is for (House Speaker John) Boehner to come up with a reasonable compromise and not just listen to what the tea party wants.” The GOP’s victory dancing began, from Cantor’s office and beyond. Within moments, Boehner’s office fired off an email with an account of the overheard conversation. Then Cantor, 47, referred to Schumer several times during the Republican’s weekly off-camera briefing. “We have seen what the motive is behind Mr. Schumer,” Cantor said. “He says every spending cut is unreasonable.” On-camera later, there was more. “I think we did find out that Chuck Schumer’s intent on playing political games,” the Virginia Republican said. Other Republicans chimed in. With a flash of smirk, Boehner twice referenced the Democrats’ “marching orders.” Rep. Kevin McCarthy, R-Calif., another Republican leader, said he wonders who’s in charge of the Senate. “Do we have a de facto leader in Schumer, who thinks he wants to engineer a political game, as many reporters could actually hear on the call?” And Rep. Jeb Hensarling quipped that it was “extremely revealing that Senate Democrats have instructed their members to use extreme language.” The exchange followed a similar back-and-forth last week, which included Schumer’s response to a Cantor speech at Stanford University – before the Republican had delivered it, and before many reporters had even obtained a copy. On Friday, a Twitter war broke out after Schumer said on MSNBC’s “Morning Joe” that “some progress” had been made between Reid and Boehner in budget talks. In one tweet, Cantor’s office didn’t even mention Reid. “Sen. Schumer and the WH (White House) continue to abandon their responsibility to get our fiscal house in order by negotiating off of the status quo,” tweeted CantorPress. For his part Tuesday, Schumer wasn’t backing off the talking points overheard by reporters. They’re the same ones he and other Democrats have been using for weeks, a point underscored when Schumer stopped talking, the conference call officially began and the senators on the line delivered prepared statements. First up: Sen. Barbara Boxer of California. “We have a very straightforward message and each of us will give it in our own words. And my words are these,” Boxer said. “We Senate Democrats are calling on Speaker Boehner to abandon the extreme right wing of his Republican caucus.”

Read the full article →

Wisconsin Judge Blocks Implementation Of Union Law

March 29, 2011

MADISON, Wis. — The showdown over Wisconsin’s explosive union bargaining law shifted from the Statehouse back to the courthouse on Tuesday, but it remained unclear when or even whether the measure would take effect. Republican lawmakers pushed through passage of the law earlier this month despite massive protests that drew up to 85,000 people to the state Capitol and a boycott by Democratic state senators. Opponents immediately filed a series of lawsuits that resulted in further chaos that might not end until the state Supreme Court weighs in. That appeared even more likely after a hearing on Tuesday, when a Dane County judge again ordered the state to put the law on hold while she considers a broader challenge to its legality. She chastised state officials for ignoring her earlier order to halt the law’s publication. “Apparently that language was either misunderstood or ignored, but what I said was the further implementation of (the law) was enjoined,” Dane County Circuit Judge Maryann Sumi said during a hearing. “That is what I now want to make crystal clear.” Sumi is set to hear additional arguments Friday on the larger question of whether GOP legislative leaders violated the state’s open meetings law during debate on the measure. She also is considering Republican claims that the law technically took effect last weekend after a state agency unexpectedly published it online. Whether she decides it did or didn’t become law on Saturday, the measure’s legitimacy will likely be decided by the state Supreme Court, which is already considering whether to take up an appeals court’s request to hear the case. The back and forth amplified the often angry debate between new Gov. Scott Walker, his Republican allies in the Legislature and the state’s public sector unions. Walker and the GOP have aggressively pushed forward their effort to remove the bargaining rights of state workers, using a surprise parliamentary maneuver to break a weeks-long stalemate to get it passed and then finding another route to publish the law after Sumi’s order blocked the secretary of state from doing so. State Department of Justice spokesman Steve Means said the agency continues to believe the law was properly published and is in effect. Wisconsin Department of Administration Secretary Mike Huebsch, Walker’s top aide, issued a statement saying the agency will evaluate the judge’s order. Earlier this month Sumi issued an emergency injunction in the case that blocked Secretary of State Doug La Follette from publishing the law. Republican leaders sidestepped the order, convincing the Legislative Reference Bureau, another state agency, to post the law on its website on Friday. The GOP declared that move amounted to publication and said the law would take effect Saturday. Dane County Democratic District Attorney Ismael Ozanne – the plaintiff in the lawsuit heard Tuesday – argued the reference bureau can’t publish a law without a date from the secretary of state. Attorneys for the state Department of Justice, which is representing the Republicans, argued the case means nothing because legislators are immune from civil lawsuits and the law is in effect. The district attorney asked Sumi to declare that the law had not been published, but she refused to rule, saying she wanted to hear more testimony. But she issued the new restraining order, warning anyone who violates this one will face sanctions. “Wisconsin working families hope that (Gov.) Scott Walker and his Republican allies in the legislature will finally begin to respect our state’s judicial process and reverse any damage they’ve done to the working families of our state, Stephanie Bloomingdale, secretary-treasurer of the Wisconsin State AFL-CIO, said in a statement. Justice Department attorneys maintain Sumi has no authority to intervene in the legislative process. And Assembly Speaker Jeff Fitzgerald, R-Horicon, said in a statement that once again Sumi has improperly injected herself into the legislative process. “Her action today again flies in the face of the separation of powers between the three branches of government,” Fitzgerald said. The law has been a flashpoint of controversy since Walker introduced it in February. The measure requires most public workers to contribute more to their pensions and health insurance. It also strips away their rights to collectively bargain for anything except wages. Walker, who wrote the law, insists the measure is necessary to help close the state’s budget deficit. But Democrats see the law as a political move to cripple unions, who are traditionally among their strongest campaign supporters. Tens of thousands of people staged almost non-stop demonstrations at the state Capitol for nearly three weeks and Senate Democrats fled the state for Illinois to block a vote in that chamber. Republicans who control the Legislature ended the stalemate by removing what they said were the fiscal elements from the plan on March 9, allowing the Senate to vote without a quorum. The Assembly passed the measure the next day and Walker signed the measure into law on March 11. Dane County Executive Kathleen Falk, a Democrat, and several unions have filed lawsuits challenging the Senate vote, arguing the final law still contains fiscal components. Those lawsuits are still pending.

Read the full article →

Eric Cantor: No Stopgap Spending Bill Beyond April 8

March 29, 2011

WASHINGTON — The No. 2 Republican in the House said Tuesday that the chamber won’t pass another short-term federal funding bill to avert a government shutdown if talks between the GOP and the White House fail to produce a 2011 spending agreement by an April 8 deadline. Majority Leader Rep. Eric Cantor of Virginia said “time is up” and that it’s up to Democrats controlling the White House and the Senate to offer significant spending cuts as part of legislation to fund the government for the rest of the budget year. “We’re going to need to see a deal struck where our members can go home and tell their constituents that we’re doing what we said we would do,” Cantor said. Cantor’s remarks to reporters suggest that Republicans could advance a stopgap bill if an agreement is struck between Democrats and the White House that would need time to draft into legislation and pass through House and Senate. Talks have mostly broken down, however, and the combatants are instead casting blame in a daily back-and-forth public relations battle. Democrats say that GOP leaders, fearing a tea-party rebellion, have pulled back from a near-agreement on an overall figure for spending cuts that would slash President Barack Obama’s budget requests for the current year by $70 billion or more. Republicans say Democrats have yet to offer sizable enough cuts and that some of the many conservative policy additions added in floor debate last month must be included in a final agreement. Current stopgap funding runs out April 8 and failure to act would precipitate a partial shutdown of every government agency, though essential workers such as military troops, FBI agents, homeland security workers and many others would remain on the job. Cantor’s comments signal that such a shutdown is increasingly likely next Friday unless the pace of negotiations accelerates sharply.

Read the full article →

Ohio Panel Approves Public Worker Union Bill

March 29, 2011

COLUMBUS, Ohio — A legislative committee in Ohio approved a measure Tuesday that would limit collective bargaining rights for 350,000 public workers and delivering a blow to unions in how they collect certain fees. The Republican-controlled House Commerce and Labor Committee voted 9-6 along party lines to recommend the bill after making more than a dozen substantive changes to the legislation that was approved by the Senate. The changes include removing jail time as a possible penalty for workers who participate in strikes and making clear that public safety workers could negotiate over equipment. A vote on the bill in the GOP-controlled House could come Wednesday. The Senate, also led by Republicans, passed the bill earlier this month on a 17-16 vote and would have to agree to any House changes before Gov. John Kasich could sign it into law. Similar limits to collective bargaining have cropped up in statehouses across the country, most notably in Wisconsin, where the governor earlier this month signed a measure into law eliminating most of state workers’ collective bargaining rights. The Ohio measure would apply to public workers across the state, such as police, firefighters, teachers and state employees. They could negotiate wages and certain work conditions but not health care, sick time or pension benefits. The measure would do away with automatic pay raises and would base future wage increases on merit. Opponents have vowed a ballot repeal if the Ohio measure passes. Democrats have offered no amendments. Instead, they delivered boxes containing more than 65,000 opponent signatures to the committee’s chairman. The legislation was met with demonstrations and packed hearing rooms in the weeks before the Senate passed the measure. On Tuesday, several hundred protesters listened to the committee’s amendments over the loudspeakers positioned around the Statehouse before they headed outside to chants of “Kill the bill!” Other changes the committee made would prevent nonunion employees affected by contracts from paying fees to union organizations and would ban automatic deductions from employee paychecks that would go the unions’ political arm. All GOP members on the House panel voted in favor of the changes, while Democrats voted against them. ___ Associated Press writer Julie Carr Smyth contributed to this report.

Read the full article →

Gambits Abound In Wisconsin Union Fight

March 27, 2011

MADISON, Wis. — Wisconsin Republicans were accustomed to getting what they wanted after the election put Scott Walker in the governor’s office and flipped legislative control to the GOP, even gaining some Democratic support for a series of economic measures in his first weeks in office. Then they took on unions. Uproar was swift and furious when Walker unveiled his plan to take away nearly all public employee collective bargaining rights, drawing tens of thousands of protesters to the Capitol and sending Senate Democrats running away from it to stall further action. Delayed but not deterred, GOP leaders found a legislative workaround and passed the measure without even needing the Democrats to be in the state. The move brought quick court action, and a temporary restraining order meant to stop the plan from becoming law while a judge decides whether steps taken to get it approved were legal. But the GOP may have outsmarted the plan’s opponents again. On Friday, in a move Democrats and unions decried as an end-run around the court order barring implementation, Republican Senate Majority Leader Scott Fitzgerald asked the nonpartisan Legislative Reference Bureau to publish the law. Publication typically means a law takes effect. If the law is in effect, the question before the courts would shift from attempting to block it to rescinding it. And the implementation date is significant because the law doesn’t apply to unions that have existing contracts. Those without contracts once the law takes effect cannot enter into new agreements. Fitzgerald defended himself against accusations he has thumbed his nose at the judiciary in a move that appeared to run afoul of the temporary restraining order. He said going to the Reference Bureau was legal because the court order only specifically barred the secretary of state from taking action. Even the Reference Bureau says its move does not put the law into effect. But Fitzgerald insists the bureau’s posting on the Legislature’s website Friday has the same effect as the secretary of state publishing it – meaning the law took effect Saturday. Fitzgerald said he didn’t consult with Walker about the move. “It is not the usual path, I admit that,” he said. “Clearly we’re in this uncharted territory again where we’d like it to be behind us so we can move forward with the budget.” Others doubt the motivations. “It seems to me they must be just offended that their power is questioned by anybody,” said Madison attorney Lester Pines, who plans to file his own lawsuit challenging the law on Monday. Democrats and unions, meanwhile, are flabbergasted. “Their actions continue to show a disregard not only for people’s rights and open government, but also the authority of the courts,” said Democratic Senate Minority Leader Mark Miller. Fitzgerald said he’s only seeking finality and resolution so local governments have certainty in knowing what the law is as they proceed with making budget decisions. The law takes away the ability of teacher and other public sector unions from collectively bargaining for anything other than wage increases no greater than inflation. It also forces them to pay more for health insurance and pensions, amounting to an 8 percent pay cut on average. The concessions are expected to save local governments about $330 million by mid-2013 and without those taking effect it will be much more difficult to absorb more than $1 billion in other cuts Walker is proposing in his pending two-year budget plan. Walker spokesmen did not return messages Saturday seeking comment. Department of Administration Secretary Mike Huebsch said Saturday that he believed the law was now in place. He said he’d begin implementing it, just as the department was required to do after any bill was lawfully published. “We are mindful that this act is continuing to be litigated, and we will continue to be responsive to the courts as the law begins to be applied,” he said in a statement. The head of the Reference Bureau and one of the Legislature’s nonpartisan attorneys both said that despite Fitzgerald’s insistence, the law is not in effect until Secretary of State Doug La Follette acts. The bill passed on March 10 and Walker signed it the next day, after less than 10 weeks on the job. Under normal circumstances, the law would take effect within the next 10 business days. But a judge issued a temporary restraining order on March 18 preventing La Follette from publishing it. That order came in response to a complaint filed by the Democratic Dane County district attorney. He alleged the state open meetings law was violated when a special legislative committee met with less than two hours’ notice March 9 to put the bill into the necessary form so it could pass the Senate without any of the 14 AWOL Democratic senators present. The state appealed and an appeals court earlier this week asked the Wisconsin Supreme Court to take the case. It has yet to say whether it will. La Follette remained adamant Saturday that the law is not in effect until he orders it published and he will not take any action because he remains under the restraining order. “I did not violate the restraining order,” La Follette said. The latest action didn’t spur any massive protests in the hours that followed it like other action had last month that motivated demonstrations of more than 85,000 people. A couple hundred protesters did return to the Capitol on Saturday morning, including one man who stood outside Fitzgerald’s office and repeatedly shouted, “I am the Senate majority leader and I am czar! You will do as I say! I am above the law!”

Read the full article →

Leahy Presses Obama To Name Key Reformer To Swaps Panel

March 25, 2011

WASHINGTON — Sen. Patrick Leahy (D-Vt.) is lobbying President Obama to appoint Sean Cota, a Vermont business owner and an advocate of the regulation of the derivatives trade, to an open seat on the powerful Commodity Futures Trading Commission. Leahy sent a letter to the president on Wednesday backing Cota’s appointment. Leahy’s pick for the panel runs Cota & Cota, a longtime family-owned home heating company based in Vermont. Cota was active in the Commodity Markets Oversight Coalition, an alliance of small businesses, consumer advocates and other “end users” of derivatives. Cota was a fixture on the Hill during Wall Street reform, articulating opposition to dark derivatives markets and serving as a counter balance to industry lobbyists who insisted that regulating derivatives and clearing them in the open on an exchange would increase the cost of hedging risk. He was part of a powerful coalition of unlikely allies who lobbied to bring derivatives trading into the sun. He’s a past chairman of the New England Fuel Institute, which lobbied on behalf of reform. Leahy is a senior member of the Senate Agriculture Committee, which has jurisdiction over CFTC nominations – a relic of the days when commodity futures were used primarily by farmers to hedge pricing risk. Some small businesses still rely on derivatives to hedge against the risk of inflation or price swings, but because most derivatives aren’t traded on exchanges similar to the stock market, small end users of swaps have little way of knowing whether they’re paying a fair price or getting gouged on fees. Leahy, a Democrat from Vermont, is also chairman of the Judiciary Committee, a powerful spot and one that controls the flow of judicial nominations that the administration wants confirmed. A White House that wants its judges confirmed can resist only a small number of entreaties from the panel’s chairman. Were Cota to be nominated, he’d face an uphill climb in a Senate that is approaching stalemate on confirmations, as Democrats lack the 60 votes needed to overcome a filibuster. The CFTC is currently led by Gary Gensler, who was initially greeted by liberal Democrats with great suspicion for his role in pushing deregulation in the 1990s and his long stint at Goldman Sachs. He has since had an ideological conversion, putting him firmly on the pro-regulatory side, and counts among his allies some of his former opponents. Cota and Gensler hold many of the same positions, but the two arrived at them by starkly divergent paths. Gensler was shocked out of his deregulatory mindset when the dark derivatives market nearly brought down the global economy. Cota, meanwhile, watched fuel prices in Vermont fluctuate over the years while the cost of hedging continued to climb. “Sean has years of experience working with me and other members of Congress on financial reform efforts,” Leahy wrote in the letter to the president, which was obtained by HuffPost. “An early voice warning of manipulation and fraud needlessly driving up the cost of energy to American consumers, Sean has testified before Congress and the CFTC nine times on commodity markets and financial derivatives. His knowledge was integral in the drafting of key commodity, swap, and derivative provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.” Spokespersons for Leahy and the White House weren’t immediately available.

Read the full article →

Senate Dems: GOP Cuts Would Cause Surge In Gas Prices

March 22, 2011

WASHINGTON — With gas prices soaring, 45 Senate Democrats signed a letter on Tuesday urging GOP leaders to abandon their proposed cuts to the budget for a key regulator that oversees the food and energy markets, part of a broader effort to reduce government spending. The letter, sent to Senate Minority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) on Tuesday, argued that Republicans should protect funding for the Commodity Futures Trading Commission, which would be cut by one-third under a defeated House GOP plan. “The CFTC serves as an important ‘cop on the beat,’ working to protect American consumers by cracking down on manipulation and other market abuses that can drive up oil prices,” the letter reads. “At a time where gas prices are rising and squeezing American families, we have a responsibility to provide our watchdogs the resources they need to fulfill their important oversight and regulatory responsibilities.” For their part, Republican leaders say the responsibility for rising gas prices rests with the Obama administration, which put a freeze on some offshore wells last year following the disastrous oil spill in the Gulf of Mexico. Boehner spokesman Michael Steel dismissed the letter from Senate Democrats as an attempt to divert the blame for the price of oil. “This is just another attempt to distract from Washington Democrats’ irresponsible opposition to increased American energy production, which would lower gas prices, reduce our dependence on foreign energy, and create American jobs,” Steel told HuffPost. “American families know talk is cheap but gas is not — and the Democrats who run Washington have no plan to help.” House and Senate leaders have struggled to reach an agreement on government funding for the remainder of the fiscal year, partly because of riders lumped in with the funding bill that would block money for Planned Parenthood, last year’s health care law, the Environmental Protection Agency and consumer financial protection. The two chambers must compromise before a current stopgap measure expires on April 8. The House Republican bill, which the Senate voted down on March 9 , would require the CFTC to lay off about a third of its staff. Some economists and consumer advocates are concerned that aggressive Wall Street speculation in energy markets is helping to drive up the price of food and gas around the world. “So long as you have money available to banks at zero cost, no long-term productive outlets for investment, and the capacity to make money by manipulating commodity pools, the situation is ripe for speculative excess,” University of Texas economist James Galbraith told HuffPost last month. Oil prices have been soaring in recent months , eclipsing $100 a barrel, which has sent the price of gas to over $3.50 a gallon and nearly $4 in California. A report prepared for the April meeting of the Group of 20 leading world economies by the Organization of Economic Cooperation and Development attributes rising prices primarily to increases in real demand, rather than financial speculation. Yet the increase in prices has also tracked speculation’s rise, prompting the U.N.’s Food and Agriculture Organization to cite “growing linkage with outside markets, in particular the impact of ‘financialization’ on futures markets” as a “root cause” of food price volatility in a September meeting. According to CFTC Commissioner Bart Chilton, the number of Wall Street bets on energy prices has increased by 64 percent since June of 2008, when heavy speculation helped push oil prices near $150 a barrel, driving gas near $5 a gallon. The CFTC has long overseen a small part of these markets, with roughly $5 trillion a year in trading. But under the Dodd-Frank financial reform bill signed into law by President Barack Obama, the agency is now responsible for policing a $500 trillion industry. CFTC Chairman Gary Gensler has said regulators will be unable to implement reforms without a significant increase in funding. The Obama administration has proposed boosting the CFTC’s annual budget by 77 percent, from $168.8 million to $298.8 million. That number is small relative to other major regulators — The Securities and Exchange Commission, another key monitor of Wall Street trading, received $1.12 billion last year. In February, Sen. John Boozman (R-Ark.) told HuffPost that speculation in commodities markets was a “legitimate concern,” arguing that it not only affected energy prices, but food prices as well. “The reality is, as commodity prices go up, there’s only a finite amount for food aid and things. People really are going to start dying,” Boozman said. As for Obama’s drilling policies, the president defended his record on drilling earlier this month, stating during a press conference that domestic oil production is at a seven-year high and the administration is willing to dip into oil reserves if necessary. Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources committee, likewise defended Obama during a floor speech last week. He said energy experts have dismissed claims that the administration’s drilling policies led to higher gas prices, arguing uncertainty in the Middle East is a more likely culprit. “First, we need to enable further expansion of our renewable fuel industry, which is currently facing infrastructure and financing constraints,” Bingaman said. “Second, we need to move forward the timeline for market penetration of electric vehicles. Finally, we need to make sure we use natural gas vehicles in as many applications as make sense based on that technology.” Democrats have made oil prices a key talking point during negotiations over the budget, arguing that Republican measures weaken efforts to expand alternative fuel sources. The House GOP budget cut funding for energy efficiency and renewable energy by $786 million from current levels and reduced the Department of Energy’s loan guarantee budget by $250 million. “We find it equally troubling that your preferred budget would cut billions of dollars in investments in critical programs focused on developing new alternative fuels and clean energy technologies, undermining our competitiveness and increasing our trade deficit with oil producing nations,” Democrats wrote in the letter. “We urge you to reverse these policies that will only set our nation backward, and put America’s independence from foreign oil even further out of reach.”

Read the full article →

Rep. Chaka Fattah: America Is a Bastion of Hope Not a Beacon of Nope!

March 12, 2011

House Republicans have taken another pound-foolish step by voting to axe a program that provides a lifeline for middle-class homeowners who face foreclosure through no fault of their own because of the predatory and economy-wrecking policies of Wall Street. The Emergency Mortgage Relief Program, which Republicans voted to de-fund in H.R. 836, replicates a successful program that I helped create as a young state legislator in Pennsylvania in the 1980s — and which was signed into law by a Republican governor. Emergency mortgage relief is not an untried or experimental program. Nor is it a grant or giveaway. The federal program, which I introduced and guided toward enactment last fall, is just now getting to roll out phase. It provides small bridge loans to mortgage holders who have lost their jobs and is modeled after Pennsylvania’s Homeowners Emergency Mortgage Assistance. HEMAP has made $223 million in such loans and actually receive some $245 million in paybacks. But profit isn’t the point here — it is about keeping the American dream of home ownership alive for law abiding citizens who have temporarily fallen behind in their solid (not subprime) mortgages. The House Republican majority has been only too happy to keep bailing out Wall Street, which has caused such mortgage misery, while it criticizes such successful efforts as keeping the American auto industry afloat. Today we witness another example of such unequal treatment: The Republican Wall Street enablers are willing to support corporations with tax dollars but unwilling to provide temporary assistance, that will be paid back, to tax-paying homeowners in their time of need. Today’s wrong-headed attempt to wipe out emergency mortgage assistance before it even hits the ground is nothing more than a political statement. It is doomed to fail, along with the rest of the Republicans’ proposed budget cuts, which in any case amount to only 1.5 percent of total spending. Senator Bob Casey will be leading the charge in the Senate to keep this program moving, as he did for enactment. President Obama has vowed to veto the bill if it ever gets to the White House. To add insult to this injury, the Republicans threw homeowner/veterans under the bus. They defeated a Democratic proposal to keep emergency mortgage relief in effect for veterans and active duty military. The whole world looks to us as a beacon of hope. We cannot become a cold-hearted nation of nope.

Read the full article →

← Previous Entries