Wheeling AP Government

Not all buy health care as commerce

2011-03-02T06:12:00.000-06:00

Politico
By: Stephen Presser
March 2, 2011 04:41 AM EST

For former Solicitor General Charles Fried and Harvard legal scholar Laurence Tribe, President Barack Obama and members of Congress who voted for the health care law, health care ranks as “commerce.” Since Congress can regulate commerce — the Constitution expressly says so — and since the individual mandate contributes to that regulatory scheme, there can be no doubt of its constitutionality.

Indeed, former House Speaker Nancy Pelosi (D-Calif.), when questioned about its constitutionality, responded, “Are you serious?”

Given that Congress has passed Medicare and Social Security, and the courts acquiesced; and given that, since the New Deal, Congress’s commerce power has been used to regulate virtually everything — including home-grown wheat and marijuana — is there a respectable argument that the health care legislation is flawed? Were federal Judges Roger Vinson and Henry Hudson smoking some home-grown product?

There are many of us who don’t think so. And many of us believe that perhaps Fried, Tribe, Obama and Pelosi are misreading the Constitution.

The real question is whether the Constitution sets limits on the powers of the federal government. True, the Constitution permits Congress to regulate commerce, but the 10th Amendment also states that the powers not granted to the federal government are reserved to the states and the people.

This has been understood, for more than two centuries, to mean that the federal government is one of limited and enumerated powers. I cannot understand how Tribe’s and Fried’s arguments could not be invoked to allow Congress to regulate and control virtually any activity. This is the point that Vinson and Hudson were making when they ruled that a line should be drawn between “activity” (like growing wheat or marijuana) and “inactivity” (like deciding not to purchase health insurance).

The law’s critics have a point when they argue that if Congress can compel us to buy health insurance (on the grounds that if we all do, it can decrease costs), there is no reason why the legislature could not compel us, on the same theory, to eat our vegetables and exercise.

Perhaps health care is commerce — though Vinson was not sure on that point. Indeed, Fried, during his recent congressional testimony, quoted sweeping statements from Chief Justice John Marshall — though this was from a case involving navigable waters, not health care.

But the real debate is over whether we have a federal government limited in its powers or not.

For more than two centuries, our Constitution has been understood to mandate that the primary regulators — those who give us our laws on contracts, torts, property, business associations and many other legal doctrines — ought to be the state and local authorities. For those are the lawmakers closest to the people.

This, in essence, is the argument of the state officials who have joined in challenging the health care law.

This Jeffersonian principle still makes a great deal of sense. If there are any constitutional limits to the federal government that remain, then, quite possibly, Vinson and Hudson have gotten it right.

It is telling that advocates of the constitutionality of the health care law have not been able to tell us what limits on the federal government remain. Perhaps they have just accepted that the federal government is now all-powerful.

Some of us still don’t think so.

Stephen Presser is the Raoul Berger professor of legal history at Northwestern University School of Law and has joined in amicus briefs challenging the constitutionality of the Patient Protection and Affordable Care Act.

Why More Immigrants Are an Answer to the Coming Boomer Entitlement Mess

2010-04-12T05:20:00.001-05:00

Robert Reich - former Secretary of Labor, Professor at Berkeley
I was born in 1946, just when the boomer wave began. Bill Clinton was born that year too. So was George W. Bush. So was Laura Bush. And Ken Starr (remember him?) And then, the next year, Hillary Clinton. And soon Newt Gingrich (known as "Newty" as a boy). And Cher. Why did so many of us begin getting born in 1946? Simple. My father was in World War II. He came home. My mother was waiting. Ditto for the others.

Sixty years later, we boomers have a lot to be worried about because most of us plan to retire in a few years and Social Security and Medicare are on the way to going bust. I should know because I used to be a trustee of the Social Security and Medicare trust funds. Those of you who are younger than we early boomers have even more to be worried about because if those funds go bust they won't be there when you're ready to retire.

It's already starting to happen. This year Social Security will pay out more in benefits than it receives in payroll taxes. The tipping point came sooner than anyone expected because the recession has kicked so many people off payrolls. But it was coming anyway. And it adds new urgency to reforming Social Security -- a task the president's commission on the nation's debt is focusing on.

So what's the answer?

Fed Chair Ben Bernanke this week listed the choices. "To avoid large and unsustainable budget deficits," he said in a speech on Wednesday, "the nation must choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above."

Bernanke is almost certainly right about "some combination," but he leaves out one other possible remedy that should be included in that combination: Immigration.

You see, the biggest reason Social Security is in trouble, and Medicare as well, is because America is aging so fast. It's not just that so many boomers are retiring. It's also that seniors are living longer. And families are having fewer children.

Add it all up and the number of people who are working relative to the number who are retired keeps shrinking.

Forty years ago there were five workers for every retiree. Now there are three. Within a couple of decades, there will be only two workers per retiree. There's no way just two workers will be able or willing to pay enough payroll taxes to keep benefits flowing to every retiree.

This is where immigration comes in. Most immigrants are young because the impoverished countries they come from are demographically the opposite of rich countries. Rather than aging populations, their populations are bursting with young people.

Yes, I know: There aren't enough jobs right now even for Americans who want and need them. But once the American economy recovers, there will be. Take a long-term view and most new immigrants to the U.S. will be working for many decades.

Get it? One logical way to deal with the crisis of funding Social Security and Medicare is to have more workers per retiree, and the simplest way to do that is to allow more immigrants into the United States.

Immigration reform and entitlement reform have a lot to do with one another.

Cross-posted from RobertReich.org

CBO chief says debt 'unsustainable'

2010-04-09T05:31:00.000-05:00

POLITICO
By: Jonathan Allen
April 8, 2010 12:12 PM EDT

The nation’s fiscal path is “unsustainable,” and the problem “cannot be solved through minor tinkering,” the head of the Congressional Budget Office said Thursday morning.

Doug Elmendorf, best known for arbitrating the costs of various health care proposals, added his voice to a growing chorus of economic experts who predict dire consequences if political leaders don’t scale back spending, increase taxes or both — and soon.

Elmendorf noted a recent CBO report that pegged an increase in the public debt from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 if President Barack Obama’s fiscal 2011 budget were to be implemented as written. As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, CBO forecasted. The last time the percentage was that high was right after World War II.

Elmendorf’s remarks to reporters at a breakfast sponsored by the Christian Science Monitor echo the recent sentiments of a pair of Federal Reserve chiefs — the current head, Ben Bernanke, and former Chairman Paul Volcker.

Volcker said earlier this week that the U.S. should consider adopting a value-added tax, an idea he described as being less toxic than it has been in the past.

“If at the end of the day we need to raise taxes, we should raise taxes,” Volcker said.

On Wednesday, Bernanke said in a speech in Dallas that the government must cut entitlements or raise taxes.

“These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off anymore,” Bernanke said.

There’s little apparent political appetite to do either.

While the president created a fiscal reform commission earlier this year, his budget calls for an extension of most of President George W. Bush’s 2001 and 2003 tax cuts and no major restructuring of the popular entitlement programs that constitute the lion’s share of the federal budget.

Elmendorf also defended his agency’s role in the health care debate, saying the back and forth between CBO and members of Congress over scoring different policy proposals is typical fare.

“I don’t think we were gamed,” Elmendorf said, describing the process on the health care law as “very similar” to that of other major pieces of legislation.

“I’m very comfortable with the numbers we released,” he said.

An analysis of the constitutional challenges to the health care reform bill

2010-03-27T07:43:00.001-05:00

A law school grad and writing colleague, Ryan Witt, just wrote a useful article that has topical importance for students:

Following the signing ceremony today health care reform is now the law of the land. As Vice President Joe Biden put it this is a "big f**cking deal" as the legislation represents the largest overhaul of the health care system in over 50 years. However as soon as the ink was dry from the President's signature some 13 states attorneys general filed lawsuits to have the legislation struck down. All of Democrats efforts will be for naught if the federal court system nullifies the law because it is unconstitutional.

So is the bill unconstitutional? The most honest answer is no knows for sure. A law like this has never been passed and therefore no clear precedent applies. Georgetown law professor Randy E. Barnett seems to give credence to the constitutional challenges to reform but others such as Professor Timothy Jost at Washington and Lee University suggest the legislation is clearly constitutional. So some very knowledgeable people have contrary opinions.

Here is a breakdown of what we do know about the Constitution as it relates to the legislation.

The Individual Mandate and the Powers of Federal Government

First the legislation does present a new case in that it proposes to force individuals to buy insurance from a private companies. If individuals do not purchase insurance they will be fined approximately $700 or 2.5% of their income whichever is greater. There are some exceptions granted based on religious objections and financial hardships.

Now there are some similar laws but nothing that goes quite this far. For example states require individuals to have insurance in order to drive a car but if individuals do not want to obey that law they simply can chose not to drive. Under health care reform everyone would need to purchase insurance. People are also automatically taxed for Social Security and Medicare but these taxes are on income and not technically a fine for not engaging in some kind of behavior.

However just because the federal government has never done something this does not mean that it is unconstitutional. The Department of Justice is likely to point to many parts of the Constitution in defending the legislation. Article 1, Section 8 proscribes the powers given to Congress. The relevant powers in this case could be:

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof"

The government's power to tax is generally interpreted very broadly by the courts so if the Obama administration was able to effectively argue the mandate was in fact a "duty" or "tax" the courts would probably approve the mandate. Of course the state attorneys generals will argue the legislation does not fall under this power since a "fine" is different in nature than a tax.

The Department of Justice could also argue that the legislation is merely an attempt to "regulate Commerce." The commerce power is certainly not unlimited but generally Congress can regulate anything which has a substantial relation to interstate commerce. The Obama administration would have a strong argument here since health care makes up over one-sixth of the economic activity of the entire nation.

A Challenge Based on the Tenth Amendment

Idaho has already passed a law which states their citizens are not bound by the health care laws. While this is likely a nice political tactic in general states can not simply exempt their citizens from federal law. For example if Missouri passed a law exempting their citizens from the federal income tax the IRS will still be able to demand my payment next year. Under the Supremacy Clause (Article VI, Clause 2 of the U.S. Constitution) federal law generally trumps state law.

A reader may have noticed how I emphasized the "generally" part of my last analysis. There are exceptions to the Supremacy Clause rule. If a power is considered "reserved" for the States under the Tenth Amendment then theoretically a federal law could be nullified if it conflicted with state law.

The problem for the attorneys general is that once again a regulation of health care seems perfectly within the federal government power either to tax or to regulate interstate commerce. Given the vast nature of Medicare and Medicaid it will be hard for the states to argue that the regulation of health care is a power reserved solely for them.

A Challenge Based on the Fourteenth Amendment

The Supreme Court has interpreted the 14th Amendment as granting substantive due process rights to American citizens. Basically what this means is that citizens have certain rights which are not explicitly enumerated in the Bill of Rights. For example the Supreme Court determined a woman has a limited right to have an abortion based upon a right of "privacy" under the Fourteenth Amendment even though privacy is never explicitly mentioned as a right in the U.S. Constitution.

In order to challenge the health care bill a U.S. citizen would have to allege the bill violates a fundamental right they have as part of the "liberty" interest under the Fourteenth Amendment. Generally something is determined to be a "fundamental right" if it is "deeply rooted in American history and traditions." A claimant would have to identify a right such as "the right to make one's own health care decisions" or "the right to abstain from purchasing insurance." They would then have to show that this right has been deeply rooted in American history and traditions. The Department of Justice would of course argue to the contrary.

Even if the court agreed that a "fundamental right" was at issue the government could still argue the legislation is constitutional. Even legislation affecting fundamental rights is constitutional if it is necessary to advance a compelling state interest. The government would argue the individual mandate is necessary to meet the compelling state interest of providing affordable health care for all or something to that effect. It would then be up to the court to determine which side was right.

The hardest step in this process would be convincing a court that a "fundamental right" was at stake. Generally the courts are reluctant to create new fundamental rights since it opens the door to challenges of all sorts of other laws. For example if a court determined an individual has a "fundamental right" not to purchase insurance it could lead to a challenge of automobile insurance laws among other things.

Conclusion:

Anyone who says they know for certain how the court system will rule on an issue this complicated does not know of what they speak. Having said that the lawsuits that seek to have health care reform overturned are facing some long odds. The Department of Justice has a large staff of experienced and qualified lawyers who have many credible legal arguments to make for the bill. I have just scratched the surface of the legal arguments they are sure to come up with in defending the legislation. A federal court is unlikely to declare such a bill unconstitutional without a really good basis for doing so. Faced with such obstacles it is hard to imagine opponents of reform succeeding in getting rid of the law through the court system.

The Real Problem with Politics is US.

2010-03-04T06:13:00.001-06:00

Must Read

http://finance.yahoo.com/expert/article/economist/225007;_ylt=Av7AhADJGnqDIRs2LmDtEmi7YWsA;_ylu=X3oDMTFma2t0NDhnBHBvcwM0BHNlYwNleHBlcnRPcGluaW9uRHluYW1pYwRzbGsDdGhlcmVhbHByb2Js

EPA delays greenhouse gas curbs

2010-02-23T05:46:00.001-06:00

By: Lisa Lerer
February 22, 2010 11:12 PM EST

Environmental Protection Agency Administrator Lisa Jackson reassured Democrats that the agency would take a cautious approach to regulating greenhouse gases, in a letter sent to coal state representatives on Monday.

An agency plan to regulate greenhouse gases from large, industrial sources has come under fierce criticism from Republicans, coal state Democrats, and industry groups.

Jackson's quick response is an attempt to keep Democrats from voting to veto the agency plan.

In her letter, Jackson said that no industrial facilities will be required to curb greenhouse gas emissions in this year. The agency would phase-in permit requirements starting in 2011. The smallest sources would not be subjected to permitting for emissions until 2016, she wrote.

But Jackson's statement didn't go far enough for some critics.

"While the delay in implementation is a small forced step in the right direction, the Clean Air Act continues to be the wrong tool for the job," Alaska Republican Lisa Murkowski said. "And [the] EPA's timeline continues to create significant and ongoing uncertainty for a business community."

Murkowski and three Democratic co-sponsors hope to bring a resolution to the Senate floor in the next month that would veto the EPA rule altogether.

West Virginia Sen. Jay Rockefeller is also currently drafting legislation that would suspend EPA action in order to give more time for Congress to act on a climate and energy bill.

"EPA actions in this area would have enormous implications and these issues need to be handled carefully and appropriately dealt with by the Congress, not in isolation by a federal environmental agency," he wrote in a recent letter to Jackson.

And last week, eight coal state Democrats signed a letter asking the agency to clarify its timetable and suspend regulations for industrial facilities until Congress can pass climate or energy legislation.

In December, the EPA officially declared greenhouse gases a danger to public health and welfare under the Clean Air Act. The decision, mandated by a 2007 Supreme Court ruling, forces to agency to begin regulating emissions across the economy.

The White House has repeatedly said that the administration would prefer to regulate the emissions through congressional legislation — but also notes that with no legislation in sight, the agency has no choice but to move forward with the new rules.

That decision has sent a broad group of actors across the political spectrum running to file petitions, lawsuits and legislation asking to suspend the regulations.

Mississippi Governor Haley Barbour, a Republican, lobbied his fellow governors to sign on to a letter to Congress asking lawmakers to pass a resolution stopping the agency from enacting "costly" regulations, at the National Governors meeting last weekend.

"While [the] EPA should offer input, complex energy and environmental policy initiatives, like greenhouse gas regulation, should be vetted and considered by Congress and States, not a single federal agency," wrote Barbour in a draft of his letter.

© 2010 Capitol News Company, LLC

The paper trail that lobbyists leave

2010-02-16T05:35:00.000-06:00

How to read the government form that all lobbyists must file.
By Matthew Murray
Fewer players in Washington, D.C., during the past decade have inspired the collective public outrage than the registered lobbyist.

Former Rep. Duke Cunningham (R-Calif.) is now serving eight years in a federal prison related to his shady dealings with a defense industry lobbyist. The exploits of now-incarcerated GOP influence peddler Jack Abramoff are the stuff of K Street legend and the subject of new movie featuring Kevin Spacey.

And while all lobbyists certainly are not created equal — there are plenty of good and bad actors — a single government document unites them all: the lobbying registration form.

Created by President Bill Clinton and a GOP-dominated House 15 years ago, the document is filed by individuals representing the legislative interests of companies, trade associations, universities, nonprofit organizations, states and local governments.

On the form, which is filed with the Secretary of the Senate and searchable online, lobbyists are required to provide contact information for their firms and clients, as well the policy issues they will be discussing with lawmakers.

Lobbyists are also required to disclose whether they've previously worked on Capitol Hill or the White House and indicate if their clients are foreign owned entities.

Ethics lawyer Robert Kelner says that prior to passage of the Lobbying Disclosure Act of 1995, lobbying registration "had been not very effective and not very widely complied with."

The law also requires lobbyists to file reports every three months stating how much money they have been paid by their clients. Registered lobbyists are also required to file a third form, which, too, is searchable on the Secretary of the Senate's Web site, that lists their campaign and charitable contributions.

Kelner says the real intrigue about lobbying records is not about the forms themselves, but about who does and does not file them – and why.

The Covington & Burling lawyer says there is a complicated legal formula to test if an individual is required to register with the Senate. But its policing is largely self-regulated and some lobbyists are perhaps creative with the math.

"There are some obvious loopholes that have been around for a long time and are pretty widely used," Kelner said.

The first loophole entails lobbyists avoiding the reporting threshold altogether by arranging their calendar so that they don't spend more than 20 percent of their time for any one particular client involved in " lobbying activity", a vague classification of tasks that includes preparing for meetings and making phone calls.

"There are a number of people around Washington, D.C., who spend quite a lot of time overall doing lobbying but ensure that they don't spend more than 20 percent of their time for any one client for lobbying, they don't have to register," Kelner said.

Another common way lobbyists avoid registration requirements, Kelner says, is to simply give themselves a new job title and avoid reaching out directly to their former colleagues in the White House and on Capitol Hill.

Typically called "strategic advisors," this new breed of lobbyist – usually former Members of Congress or their senior staff – provide expensive advice to companies and trade associations about how to best make their pitch to the federal government.

"There are certainly a number of prominent people around Washington, D.C., who portray themselves as strategic advisors rather than lobbyists, claiming that they never make a lobbying contact," Kelner said. "In a lot of those cases, there's a very real question as to whether lobbying contacts are actually being made."

Matt Murray writes for Roll Call.

Dems try to blunt SCOTUS decision

2010-02-12T05:05:00.001-06:00

Politico
By: Kenneth P. Vogel
February 11, 2010 01:21 PM EST

A pair of Democratic lawmakers on Thursday introduced the framework for legislation intended to minimize the impact of last month’s Supreme Court decision allowing unlimited corporate attack ads.

Rep. Chris Van Hollen (D-Md.) and Sen. Chuck Schumer (D-N.Y.) warned that without prompt legislative action, the decision, in a case brought by a previously obscure conservative group called Citizens United against the Federal Election Commission, would yield an explosion of corporate ads in the 2010 midterm elections and beyond.

“Overall, the Supreme Court’s decision opened the floodgates to a torrent of corporate money — that’s the bad news,” said Schumer. “The good news is, there are solutions that can help patch the dam.”

Schumer and Van Hollen sketched the outline of a package of proposals intended to limit corporate ads by increasing disclosure requirements and restricting advertising by foreign-controlled companies, recipients of bailout cash and federal contractors.

They suggested they had the support of the White House, which had been working with the lawmakers’ staffs, as well as Senate Majority Leader Harry Reid (D-Nev.) and House Speaker Nancy Pelosi (D-Calif.).

They acknowledged, though, that they did not have any Republican support, and Van Hollen specifically called out Sen. John McCain (R-Ariz.), a co-author of the seminal 2002 campaign finance overhaul that bears his name, who has distanced himself from campaign finance reform efforts in recent years as he has tacked right.

The decision also affects unions, which lean heavily Democratic. Some campaign finance experts predict the decision won’t have as much effect as Democrats fear, but others expect it could be a net advantage for Republican candidates, since corporate interests tend to favor GOP positions and candidates.

On Thursday, though, Schumer said neither party would emerge the winner as a result of the decision.

“It won’t be Republicans. It won’t be Democrats,” he said. “It will be corporate America.”

The court’s 5-4 decision partially overturned decades of law restricting political spending by corporations, unions and other organizations, on the grounds that they violated the First Amendment-guaranteed freedom of speech. The decision was so sweeping that campaign finance lawyers on both sides of the aisle said it left little room for legislative tweaks to minimize its impact without provoking the ire of the courts.

That’s why some advocates for reducing the role of money in politics quickly floated the idea of a constitutional amendment expressly stating that that corporations — and unions — were not guaranteed the same free speech rights as individuals.

Schumer and Van Hollen decided against proposing such an amendment, which would face a steeper legislative battle and would need approval by two thirds of the states, “because we need to move fast,” Schumer said.

Instead their bills, which they said they intended to introduce in both chambers the week after the coming Presidents Day recess, would restrict ad buys from U.S. subsidiaries of foreign corporations, companies that have yet to pay back TARP funds and those that receive federal contracts.

Additionally, the Schumer-Van Hollen bills would heighten requirements for companies to disclose ad buys to shareholders, the Federal Election Commission and Securities and Exchange Commission; would tighten rules prohibiting outside groups from coordinating their ads with candidates, and those requiring identification of companies that pay for ads supporting or opposing candidates. And it would attempt to guarantee access to less expensive air time for candidates being bombarded by corporate funded attack ads.

Asked afterwards which provisions would apply to unions, Schumer said “every provision would apply to unions, every single one. And to 501c3s, 4s, 5s and 527s” — nonprofit groups that have been used by operatives to air attack ads without disclosing their donors.

“The American people should know who is paying for this political advertising,” said Van Hollen. “People shouldn’t be able to hide behind these” groups.

Not included in the Van Hollen-Schumer package is a proposal backed by lawmakers including Rep. Barney Frank (D-Mass.) and which the White House has suggested it could support, that would require shareholders to vote before a corporation could spend money in elections.

“That’s a possibility down the road to be added to this, if they can devise a meaningful structure,” said Van Hollen.

Van Hollen, who has supported broader campaign finance reforms, including providing taxpayer funds for congressional elections, previously told POLITICO those efforts would take a back seat as Congress focused on stop-gap measures intended to blunt the Citizens United decision.

The absence of a so-called public financing program from the raft of proposals laid out Thursday was a disappointment for some advocates of stricter campaign finance rules.

“Voters want bold campaign reform measures,” said Nick Nyhart, president of Public Campaign, a non-profit group advocating for public financing. He called the Schumer-Van Hollen plans “good first steps, but as a package, they fall short of getting to the heart of the problem of money in politics.”

Other proponents of tougher laws said smaller bore measures like those proposed Thursday needed to come first.

“Rapid-fire action is required to curtail the worst impacts of this decision in time to impact the 2010 elections,” said Lisa Gilbert, a lobbyist who focuses on campaign finance and ethics issues for the non-profit U.S. Public Interest Research Group. “We want to pass the short term reform package first so as to halt as much of the money as possible and for lack of a better term, ‘make the world safe,’ for long-term more systemic reforms like public financing or an amendment” to the constitution differentiating corporations and unions from people for the purposes of the First Amendment.

O'Reilly/Stewart Faceoff

2010-02-08T14:23:00.002-06:00

http://www.popeater.com/2010/02/08/oreilly-stewart-edit/?icid=main|hp-laptop|dl2|link2|http%3A%2F%2Fwww.popeater.com%2F2010%2F02%2F08%2Foreilly-stewart-edit%2F

this is really kind of fun to watch stewart be serious for a couple of mins.

Courts Roll Back Limits on Election Spending

2010-01-12T06:18:00.002-06:00

January 9, 2010

By DAVID D. KIRKPATRICK
WASHINGTON — Even before a landmark Supreme Court ruling on campaign finance law expected within days, a series of other court decisions is reshaping the political battlefield by freeing corporations, unions and other interest groups from many of the restrictions on their advertising about issues and candidates.

Legal experts and political operatives say the cases roll back campaign spending rules to the years before Watergate. The end of decades-old restrictions could unleash a torrent of negative advertisements, help cash-poor Republicans in a pivotal year and push President Obama to bring in more money for his party.

If the Supreme Court, as widely expected, rules against core elements of the existing limits, Democrats say they will try to enact new laws to reinstate the restrictions in time for the midterm elections in November. And advocates of stricter campaign finance laws say they hope the developments will prod the president to fulfill a campaign promise to update the presidential campaign financing system, even though it would diminish his edge as incumbent.

Many legal experts say they expect the court to use its imminent ruling, in the case of Citizens United v. Federal Election Commission, to eliminate the remaining restrictions on advertisements for or against candidates paid for by corporations, unions and advocacy organizations. (The case centers on whether spending restrictions apply to a conservative group’s documentary, “Hillary: The Movie.”)

Even if the court rules more narrowly, legal experts and political advocates say that the 2010 elections will bring the first large-scale application of previous court decisions that have all but stripped away those restrictions. Though the rulings have not challenged the bans on direct corporate contributions to parties and candidates, political operatives say that as a practical matter the rulings and a deadlock at the Federal Election Commission have already opened wide latitude for independent groups to advocate for and against candidates.

“It will be no holds barred when it comes to independent expenditures,” said Kenneth A. Gross, a veteran political law expert at the firm of Skadden Arps in Washington.

The United States Chamber of Commerce, the goliath of the lobbying world, is expected to outline its battle plan next week for the midterms. It spent $25 million on advertisements and get-out-the-vote efforts in the 2006 elections and $36 million in 2008, and will spend far more this year, chamber officials say. And in the last election it was already probing the limits of the court’s rulings with commercials like one in New Hampshire denouncing Senator Jeanne Shaheen, a Democrat, as “a taxing machine.”

Labor unions, stalwart outside allies to the Democrats, plan to take advantage of the changing rules with their own record-setting spending, said Karen Ackerman, political director of the A.F.L.-C.I.O. But business, she argued, had more to gain.

“The corporate side will always have more to spend than the union side,” she said.

Even before the Supreme Court issues its Citizens United ruling, Democrats in the House and the Senate have begun lamenting its expected result. “Clearly, the Republican Party overwhelmingly would benefit,” said Senator Robert Menendez of New Jersey.

Representative Chris Van Hollen of Maryland vowed a “prompt legislative response” if the Supreme Court rules broadly. In the meantime, he said, the Democratic campaign committee planned to counterattack big donors to outside groups to show “they are not just disinterested citizens.”

Conservatives accused the Democrats of using the specter of corruption as an excuse to silence their opponents. “What this is about is prohibiting information from reaching the American people if it is critical of them, those poor little dears who can’t stand criticism,” said Wayne LaPierre, chief executive of the National Rifle Association.

Senator John Cornyn of Texas, chairman of the Republican Senate campaign committee, said: “It is about a nonprofit group’s ability to speak about the public issue. I can’t think of a more fundamental First Amendment issue.”

Still, Mr. Cornyn acknowledged that the expected ruling could “open up resources that have not previously been available” for the Republicans.

Democratic candidates and party committees have raised a total of $396.5 million for the midterms, with $50 million on hand and $10 million debts in public filings released this week. Republicans had raised just $204.7 million, with about $30 million on hand and about $6 million in debts, according to the nonpartisan Center for Responsive Politics.

The campaign finance system imposed after the Watergate scandal began to spring leaks in the 1990s with the large-scale exploitation of unlimited “soft money” contributions to political parties from wealthy individuals, corporations, unions and others. Congress fortified those rules by eliminating soft money with the 2002 campaign finance law known as McCain-Feingold, and since then activists and operatives have played cat-and-mouse with regulators in the search for other loopholes.

The Supreme Court began to poke new holes in the system in a 2007 ruling that outside groups could pay for critical commercials attacking individual candidates on specific issues up to the day of the election, as long as the ad did not explicitly urge a “vote for” or “vote against.”

The 2010 midterms will be the first big test of the changing rules in part because in 2008 both major party candidates — Mr. Obama and Senator John McCain — explicitly discouraged independent spending by their supporters. The Federal Election Commission had also punished previous efforts to evade the McCain-Feingold rules severely enough to discourage new attempts.

No such restraints apply this year, in part because the changing composition of the Federal Election Commission has created a deadlock blocking vigorous enforcement. “The cop is gone from the beat,” said Trevor Potter, a lawyer for the nonpartisan Campaign Legal Center who has also worked for Mr. McCain.

Campaign finance laws block outside groups from coordinating with candidates, but it is easy enough for outside allies to read in news reports where a campaign wants to spend money and what message it wants to send. Such groups also tend to favor negative commercials because they are more potent.

So if the court strikes down the restrictions on outside spending, some legal experts say, the remaining restrictions on direct contributions to campaigns would mean much less because it would be easy to support a campaign through an outside group.

“The campaign finance system would certainly be less regulated than any time since Watergate,” said Richard L. Hasen, a campaign law expert at the Loyola Law School in Los Angeles.

Copyright 2010 The New York Times Company

Democrats rip Rasmussen

2010-01-04T05:00:00.000-06:00

By: Alex Isenstadt
January 2, 2010 05:53 PM EST

Democrats are turning their fire on Scott Rasmussen, the prolific independent pollster whose surveys on elections, President Obama’s popularity and a host of other issues are surfacing in the media with increasing frequency.

The pointed attacks reflect a hardening conventional wisdom among prominent liberal bloggers and many Democrats that Rasmussen Reports polls are, at best, the result of a flawed polling model and, at worst, designed to undermine Democratic politicians and the party’s national agenda.

On progressive-oriented websites, anti-Rasmussen sentiment is an article of faith. “Rasmussen Caught With Their Thumb on the Scale,” blared the Daily Kos this summer. “Rasmussen Reports, You Decide,” the blog Swing State Project recently headlined in a play on the Fox News motto.

“I don’t think there are Republican polling firms that get as good a result as Rasmussen does,” said Eric Boehlert, a senior fellow with Media Matters, a progressive research center. “His data looks like it all comes out of the RNC [Republican National Committee].”

“Whether intended or not, Rasmussen polls have been used by conservative voices as talking points, and when that happens on one side it inevitably produces a reaction from the other,” explained Mark Blumenthal, a polling analyst and the editor and publisher of Pollster.com. “Rasmussen produces a lot of data that appear to produce narratives conservatives are promoting, and that causes a reaction.”

While Scott Rasmussen, the firm’s president, contends that he has no ax to grind — his bio notes that he has been “an independent pollster for more than a decade” and “has never been a campaign pollster or consultant for candidates seeking office” — his opponents on the left insist he is the hand that feeds conservative talkers a daily trove of negative numbers that provides grist for attacks on Obama and the Democratic Party.

Nothing, however, sets off liberal teeth gnashing more than Rasmussen’s daily presidential tracking polls, which throughout the year have consistently placed Obama’s approval numbers around 5 percentage points lower than other polling outfits.

“He polls less favorably for Democrats, and that’s why he’s become a lightning rod,” said Charles Franklin, a University of Wisconsin political scientist who studies polling. “It’s clear that his results are typically more Republican than the other person’s results.”

On Saturday, Dec. 26, for example, Rasmussen’s daily tracking had Obama’s approval at 44 percent, with a disapproval figure of 56 percent. A Real Clear Politics compilation of other pollsters, meanwhile, showed Obama with an average approval figure of 49.5 percent and disapproval of 45.1 percent.

“He’s been underpolling Obama all year,” said Boehlert. “People start thinking, ‘There’s something going on here.’”

It’s not just the data that Rasmussen’s critics object to — they also have a problem with the way the firm frames questions in its automated polls, which are the staple of its work.

In August, for example, Rasmussen asked respondents whether they agreed or disagreed with the statement “It’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.”

“Why stop there, Rasmussen? Why not add a parenthetical phrase about how tax cuts regrow hair, whiten teeth, and ensure that your favorite team will win the Super Bowl this year?” responded Daily Kos blogger Steve Singiser, who frequently writes about polls.

Democratic pollster Mark Mellman believes Rasmussen designs its polling questions to elicit negative responses about Obama and Democrats — a sentiment that is widely shared in the liberal blogosphere.

“I think they write their questions in a way that supports a conservative interpretation of the world,” said Mellman. “In general, they tend to be among the worst polls for Democrats, and they phrase questions in ways that elicit less support for the Democratic point of view.”

Democratic politicians seem equally leery of Rasmussen polling: At a news conference just prior to the 2008 election, when asked about a poll showing GOP Sen. John Sununu moving ahead of eventual Democratic winner Jeanne Shaheen, then-Democratic Senatorial Campaign Committee Chairman Chuck Schumer had a ready answer.

“Yeah, that was a Rasmussen poll,” said a dismissive Schumer.

In an interview, Rasmussen adamantly denied that he is framing his polling to appeal to a conservative audience, saying: “We certainly don’t see it that way.”

“It’s the adage that if you don’t like the message, shoot the messenger,” he added.

Rasmussen is quick to point out the accuracy of his surveys — noting how close his firm was to predicting the final outcome in this fall’s New Jersey governor’s race. (Rasmussen’s final survey in the race showed Republican Chris Christie edging out Gov. Jon Corzine 46 percent to 43 percent. Christie beat Corzine 48 percent to 45 percent on Election Day.) And he argues that he was among the first pollsters to show Obama narrowing the gap with Hillary Clinton in the 2008 Democratic presidential primary.

Last year, the progressive website FiveThirtyEight.com’s pollster ratings, based on the 2008 presidential primaries, awarded Rasmussen the third-highest mark for its accuracy in predicting the outcome of the contests. And Rasmussen’s final poll of the 2008 general election — showing Obama defeating Arizona Sen. John McCain 52 percent to 46 percent — closely mirrored the election’s outcome.

Rasmussen, for his part, explained that his numbers are trending Republican simply because he is screening for only those voters most likely to head to the polls — a pool of respondents, he argues, that just so happens to bend more conservative this election cycle.

Polling all adults — a method used by Gallup, another polling firm that conducts a daily tracking poll of Obama — Rasmussen acknowledged, is “always going to yield a better result for Democrats.”

But critics note that the practice of screening for only those voters regarded as most likely to head to the polls potentially weeds out younger and minority voters — who would be more likely to favor Democrats than Republicans.

Alan Abramowitz, an Emory University political scientist, said there was “huge concern right now” that Rasmussen was polling a universe of largely conservative-minded voters.

“How is Rasmussen selecting likely voters almost a year before the election? And why would you even screen for likely voters in measuring presidential approval?” said Abramowitz. “My guess is that it's heavily skewed toward older, white, Republican voters.”

Others assert Rasmussen is simply reflecting a more GOP-friendly political environment in his polling.

“The way he does polls is that he’s more likely to get high-energy voters,” said Tom Jensen, a pollster for the North Carolina-based Democratic firm Public Policy Polling. “I think Rasmussen favors Republicans this year, but I don’t think he inherently favors Republicans.”

“If I’m looking at public polls that are ABC News, CBS, Quinnipiac, Rasmussen, I’m paying attention to Rasmussen,” said GOP pollster Tony Fabrizio. “As a pollster, I’d much rather look at a pollster who is looking at likely voters than a pollster who is looking at adults.”

Rasmussen, of course, is hardly the only pollster to come under fire this election cycle — just the one who attracts the most sustained criticism.

Last month, conservative radio host Rush Limbaugh accused the Gallup polling organization of “doing everything they can — they're upping the sample to black Americans — to keep” Obama’s approval at 50 percent.

And PPP, which has also increased its profile in the past two election cycles, has drawn criticism from Republicans for repeatedly showing North Carolina GOP Sen. Richard Burr with low ratings heading into his 2010 reelection.

“You’d like for people to approach poll data in an intellectually honest way and not just say, ‘I don’t like this pollster because of his numbers. But that’s just the nature of partisan activism,” said Jensen, whose firm, like Rasmussen's, relies on automated polls. “I don’t think that what’s happening with Rasmussen is unusual. It’s just that sometimes when people are unhappy, sometimes you shoot the messenger.”

Franklin, the University of Wisconsin political scientist, argued that the frequency with which Rasmussen produces data makes the firm an inevitable target in the 24/7 media age.

“I really think that if Rasmussen were polling three times a month or one time a month, he wouldn’t be as much of a thorn in the side of Democrats,” said Franklin. “But because he’s polling so much, he stands out every day.”

Rasmussen says the attention that his often buzzworthy polls generate — positive or negative — is good for business.

Proving that he revels in it, Rasmussen recently posted an unusual video clip on his website — late-night comedian Jimmy Fallon deriding the pollster earlier this year in a rap song as an “outlier” whose results were “spastic.”

“We are excited by it,” Rasmussen said of the attention his firm has received.

© 2009 Capitol News Company, LLC

A comaprison of House, Senate health care bills

2009-12-27T07:48:00.002-06:00

A comparison of House, Senate health care bills

By Ricardo Alonso-Zaldivar and Erica Werner, Associated Press Writers , On Saturday December 26, 2009, 10:59 am EST
A comparison of the health care bills passed by the Senate and House:

The Senate Democratic bill (Patient Protection and Affordable Care Act):

WHO'S COVERED: About 94 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2014. Of the remaining 24 million people under age 65 left uninsured, about one-third would be illegal immigrants.

COST: Coverage provisions cost $871 billion over 10 years.

HOW IT'S PAID FOR: Fees on insurance companies, drugmakers, medical device manufacturers. Medicare payroll tax increased to 2.35 percent on income over $200,000 a year for individuals, $250,000 for couples. A 10 percent sales tax on tanning salons, to be paid by the person soaking up the rays. Cuts to Medicare and Medicaid. Forty percent excise tax on insurance companies, keyed to premiums paid on health care plans costing more than $8,500 annually for individuals and $23,000 for families. Fees for employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage.

REQUIREMENTS FOR INDIVIDUALS: Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. Those who are obligated to buy coverage and refuse to do so would pay a fine starting at $95 in 2014 and rising to $750.

REQUIREMENTS FOR EMPLOYERS: Not required to offer coverage, but companies with more than 50 employees would pay a fee of $750 per employee if the government ends up subsidizing employees' coverage.

SUBSIDIES: Tax credits for individuals and families likely making up to 400 percent of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers.

BENEFITS PACKAGE: All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage. The least generous would pay an estimated 60 percent of health care costs per year; the most generous would cover an estimated 90 percent.

INSURANCE INDUSTRY RESTRICTIONS: Starting in 2014: no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age and family size. Starting upon enactment of legislation: children up to age 26 can stay on parents insurance; no lifetime limits on coverage.

GOVERNMENT-RUN PLAN: In place of a government-run insurance option, the estimated 26 million Americans purchasing coverage through new insurance exchanges would have the option of signing up for national plans overseen by the same office that manages health coverage for federal employees and members of Congress. Those plans would be privately owned, but one of them would have to be operated on a nonprofit basis, as many Blue Cross Blue Shield plans are now.

HOW YOU CHOOSE YOUR HEALTH INSURANCE: Self-employed people, uninsured individuals and small businesses could pick a plan offered through new state-based purchasing pools. Would generally encourage employees to keep work-provided coverage.

DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Drug companies contribute $80 billion over 10 years with the majority of the money used to limit the prescription coverage gap in Medicare.

CHANGES TO MEDICAID: Income eligibility levels likely to be standardized to 133 percent of poverty -- $29,327 a year for a family of four -- for parents, children and pregnant women. Federal government would pick up the full cost of the expansion during the first three years. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid.

LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.

ANTITRUST: Maintains the health insurance industry's decades-old antitrust exemption.

ILLEGAL IMMIGRANTS: Would be barred from receiving government subsidies or using their own money to buy coverage offered by private companies in the exchanges.

ABORTION: The bill tries to maintain a strict separation between taxpayer funds and private premiums that would pay for abortion coverage. No health plan would be required to offer coverage for the procedure. In plans that do cover abortion, beneficiaries would have to pay for it separately, and those funds would have to be kept in a separate account from taxpayer money. Moreover, individual states would be able to prohibit abortion coverage in plans offered through the exchange, after passing specific legislation to that effect. Exceptions would be made for cases of rape, incest and danger to the life of the mother.

The House bill (Affordable Health Care for America Act):

WHO'S COVERED: About 96 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2013. About one-third of the remaining 18 million people under age 65 left uninsured would be illegal immigrants.

COST: The Congressional Budget Office says the bill's cost of expanding insurance coverage over 10 years is $1.055 trillion. The net cost is $894 billion, factoring in penalties on individuals and employers who don't comply with new requirements. That's under President Barack Obama's $900 billion goal. However, those figures leave out a variety of new costs in the bill, including increased prescription drug coverage for seniors under Medicare, so the measure may be around $1.2 trillion.

HOW IT'S PAID FOR: $460 billion over the next decade from new income taxes on single people making more than $500,000 a year and couples making more than $1 million. The original House bill taxed individuals making $280,000 a year and couples making more than $350,000, but the threshold was increased in response to lawmakers' concerns that the taxes would hit too many people and small businesses.

There are also more than $400 billion in cuts to Medicare and Medicaid; a new $20 billion fee on medical device makers; $13 billion from limiting contributions to flexible spending accounts; sizable penalties paid by individuals and employers who don't obtain coverage; and a mix of other corporate taxes and fees.

REQUIREMENTS FOR INDIVIDUALS: Individuals must have insurance, enforced through a tax penalty of 2.5 percent of income. People can apply for hardship waivers if coverage is unaffordable.

REQUIREMENTS FOR EMPLOYERS: Employers must provide insurance to their employees or pay a penalty of 8 percent of payroll. Companies with payrolls under $500,000 annually are exempt -- a change from the original $250,000 level to accommodate concerns of moderate Democrats -- and the penalty is phased in for companies with payrolls between $500,000 and $750,000.

Small businesses -- those with 10 or fewer workers -- get tax credits to help them provide coverage.

SUBSIDIES: Individuals and families with annual income up to 400 percent of poverty level, or $88,000 for a family of four, would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013.

HOW YOU CHOOSE YOUR HEALTH INSURANCE: Beginning in 2013, through a new Health Insurance Exchange open to individuals and, initially, small employers. It could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules.

BENEFITS PACKAGE: A committee would recommend a so-called essential benefits package including preventive services. Out-of-pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange.

INSURANCE INDUSTRY RESTRICTIONS: Starting in 2013, no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age.

GOVERNMENT-RUN PLAN: A new public plan available through the insurance exchanges would be set up and run by the health and human services secretary. Democrats originally designed the plan to pay Medicare rates plus 5 percent to doctors. But the final version -- preferred by moderate lawmakers -- would let the HHS secretary negotiate rates with providers.

CHANGES TO MEDICAID: The federal-state insurance program for the poor would be expanded to cover all individuals under age 65 with incomes up to 150 percent of the federal poverty level, which is $33,075 per year for a family of four. The federal government would pick up the full cost of the expansion in 2013 and 2014; thereafter the federal government would pay 91 percent and states would pay 9 percent.

DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Phases out the gap in Medicare prescription drug coverage by 2019. Requires the HHS secretary to negotiate drug prices on behalf of Medicare beneficiaries.

LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.

ANTITRUST: Would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price-fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.

ILLEGAL IMMIGRANTS: Would be barred from receiving government subsidies but permitted to use their own money to buy coverage offered by private companies in the exchange.

ABORTION: Private companies in the exchange could not offer plans covering abortion if those plans received federal subsidy money. Most plans in the exchange would be affected, because most consumers in the exchange would be using federal subsidy money to buy coverage. The new government plan could not offer abortion coverage. Insurance companies would be permitted to offer supplemental abortion coverage in separate plans that people could buy with their own money. Use of federal money for abortion coverage would be limited to cases of rape, incest or danger to the woman's life.

Why isn't local TV news more partisan?

2009-12-18T05:49:00.002-06:00

By David Brauer | Published Wed, Dec 16 2009 12:30 pm
If you believe the mass media are constantly devolving, here’s something to ponder:
Why hasn’t local TV news become more partisan?
After all, one only need look at cable news to see the success of tendentiousness. Fox News has become Number One with right-wing propaganda; MSNBC’s evening lineup of committed lefties ranks second. Meanwhile, Lou Dobbs-jettisoning CNN regularly finishes third or even fourth behind sibling network Headline News.
You’ll hear complaints that one of our local outlets has a systemic bias — Republicans ripping “DFL Don” Shelby or KSTP criticized as GOP water-carriers for reports like this. However, viewers don’t agree, at least when it comes to what station they watch.
According to one local researcher (identities protected so they could speak freely to my cockamamie thesis), KARE’s audience swings a tiny bit Republican, WCCO’s a tiny bit DFL and KSTP’s — surprisingly to me at least — balances out. Fox9, despite its corporate parentage, doesn’t share the network’s partisan bias, in my humble opinion.
So despite stylistic differences — KARE’s storytelling, WCCO’s probity, KSTP’s ambulance-chasing, and Fox9’s length — TV remains a monoculture, mostly fighting in the middle of the ideological playing field.
That might make for more objective and responsible newsgathering, but some would say more pack-like and less interesting. As Alan Mutter, who writes “Reflections of a Newsosaur” noted in a recent column about the Wall Street Journal’s alleged rightward turn in its news (not editorial) pages:
While the conventional reaction is to say [Journal owner Rupert] Murdoch is out of line, he may be on to something. Given the wobbly economics of the media today, conscientiously opinionated coverage may be the tonic that many newspapers and other news outlets need to revive reader interest and revenues.
I’m not saying partisan local news wouldn’t hurt America. I floated the concept to a number of current and former TV reporters, and all reacted with varying degrees of horror. Most said they didn’t get into the business to twist coverage for preconceived bias.
Some mentioned a practical consideration: they’d be forever typecast as ideologues, making it harder to get the next gig. I understand their feelings; I once contemplated starting a website to blackball all the hack CNN reporters like Casey Wian who picked up paychecks enthusiastically feeding Dobbs’ misrepresentations.
But this piece is more about bloodless business decisions. TV, more than most media, is about getting paid. So why hasn’t some station exec busted this move?
Practically speaking, KARE (which rules the ad-coveted 25/54-year-old demographic) and WCCO (which leads in total households at 10 p.m.) have little reason to experiment. But also-rans have less excuse ... or more precisely, more incentive.
KSTP, though drawing a bit closer to the leaders lately, has long been a perennial third at 10 p.m. Fox9 is fourth in most time slots. There’s also a fifth local player: KSTC, KSTP’s sibling station that started newscasts in July, and is literally an asterisk at ratings time. I guarantee Channel 45 would earn a real number if they found a local Bill O’Reilly.
So why wouldn’t one of them throw caution to the wind and go the Fox News or MSNBC route? Become the station that substitutes “death tax” for “estate tax”; setting the table for the Tea Party, if you will. You don’t have to go full demagogue; you could model yourself on, say, a well-reported opinion journal.
After all, getting 10-15 percent of the local audience makes a station the ratings champ, but fully 25 percent of the public identifies with second-place Republicans and 33 percent with the Democrats, according to Pollster.com averages. There are lots of viewers at the barbell’s ends.
Here are the reasons it hasn’t happened, according to local pros:
1. Cable is a niche, local is not. People sometimes forget how small cable news audiences really are. O’Reilly is by far the Ratings King, but his oft-celebrated audience is about half of oft-scorned Katie Couric, the lowest-ranked broadcast anchor. At 10 p.m., 40 percent of local viewers are watching the Big Four; cable news is fighting over about 5 percent of the national audience.
2. Cable is old, local is not. Current numbers show 72 percent of O’Reilly’s audience outside the 25/54 demo; it’s safe to assume most are older, since three years ago, his average viewer’s age was pegged at a Medicare-friendly 71. Local news skews much younger: even WCCO, with the highest share of older viewers, has 40-50 percent in the advertiser sweet spot.
3. Cable is consistent, local is not. Like radio, cable has no problem programming an entirely ideological day. But news is only one thing local TV stations run. The last thing they — and more importantly, their advertisers — want is steamed partisans boycotting game shows or prime time. News is a big local moneymaker, but it’s not the only one, and controversy is often taint.
4. Local quirks. As I noted above, a bit player like KSTC has by far the biggest upside should it wave the bloody shirt. But the Hubbard-owned station mostly exists to repurpose KSTP content, so altering one station would reflect on both.
5. History. The indelibility of the non-ideological dynamic can be seen by how few local stations anywhere have tried blatant partisanship. One that did, the Maryland-based Sinclair Broadcasting Group — which forced stations to broadcast a 2004 anti-John Kerry documentary and fired a journalist who complained — didn’t see any upside.
One thing not blocking the way: the Federal Communications Commission. There’s no Fairness Doctrine requiring balanced content, pros say.
So does this mean Frank Vascellaro will never be replaced by Jason Lewis? I’m not so sure. Local news-watching is trending downward, the population is aging, and the Internet’s pull may leave broadcast’s vestige with cable’s dynamic. Maybe an independent player will buy an over-the-air station and try an all-winger day. But for now, programmed bias remains either imaginary, inconsistent, or well-coded.

The White House Works It

2009-12-08T05:13:00.001-06:00

Good article on Fiscal Policy

http://online.wsj.com/article/SB10001424052748704342404574576103504531412.html?mod=WSJ_hpp_sections_smallbusiness

EPA's Carbon Proposal Riles Industries

2009-12-08T05:09:00.001-06:00

Good article on EPA and Congress

Link to Article
http://online.wsj.com/article/SB10001424052748704825504574582294106812898.html

Health care reform is constitutional

2009-10-23T11:19:00.001-05:00

Politico
By: Erwin Chemerinsky
October 23, 2009 04:59 AM EST

Those opposing health care reform are increasingly relying on an argument that has no legal merit: that the health care reform legislation would be unconstitutional. There is, of course, much to debate about how to best reform America’s health care system. But there is no doubt that bills passed by House and Senate committees are constitutional.

Some who object to the health care proposals claim that they are beyond the scope of congressional powers. Specifically, they argue that Congress lacks the authority to compel people to purchase health insurance or pay a tax or a fine.

Congress clearly could do this under its power pursuant to Article I, Section 8 of the Constitution to regulate commerce among the states. The Supreme Court has held that this includes authority to regulate activities that have a substantial effect on interstate commerce. In the area of economic activities, “substantial effect” can be found based on the cumulative impact of the activity across the country. For example, a few years ago, the Supreme Court held that Congress could use its commerce clause authority to prohibit individuals from cultivating and possessing small amounts of marijuana for personal medicinal use because marijuana is bought and sold in interstate commerce.

The relationship between health care coverage and the national economy is even stronger and more readily apparent. In 2007, health care expenditures amounted to $2.2 trillion, or $7,421 per person, and accounted for 16.2 percent of the gross domestic product.

Ken Klukowski, writing in POLITICO, argued that “people who declined to purchase government-mandated insurance would not be engaging in commercial activity, so there’s no interstate commerce.” Klukowski’s argument is flawed because the Supreme Court never has said that the commerce power is limited to regulating those who are engaged in commercial activity.

Quite the contrary: The court has said that Congress can use its commerce power to forbid hotels and restaurants from discriminating based on race, even though their conduct was refusing to engage in commercial activity. Likewise, the court has said that Congress can regulate the growing of marijuana for personal medicinal use, even if the person being punished never engaged in any commercial activity.

Under an unbroken line of precedents stretching back 70 years, Congress has the power to regulate activities that, taken cumulatively, have a substantial effect on interstate commerce. People not purchasing health insurance unquestionably has this effect.

There is a substantial likelihood that everyone will need medical care at some point. A person with a communicable disease will be treated whether or not he or she is insured. A person in an automobile accident will be rushed to the hospital for treatment, whether or not he or she is insured. Congress would simply be requiring everyone to be insured to cover their potential costs to the system.

Congress also could justify this as an exercise of its taxing and spending power. Congress can require the purchase of health insurance and then tax those who do not do so in order to pay their costs to the system. This is similar to Social Security taxes, which everyone pays to cover the costs of the Social Security system. Since the 1930s, the Supreme Court has accorded Congress broad powers to tax and spend for the general welfare and has left it to Congress to determine this.

Nor is there any basis for arguing that an insurance requirement violates individual liberties. No constitutionally protected freedom is infringed. There is no right to not have insurance. Most states now require automobile insurance as a condition for driving.

Since the 19th century, the Supreme Court has consistently held that a tax cannot be challenged as an impermissible take of private property for public use without just compensation. All taxes are a taking of private property for public use, but no tax has ever been invalidated on that basis.

Since the late 1930s, the Supreme Court has ruled that government economic regulations, including taxes, are to be upheld as long as they are reasonable. Virtually all economic regulations and taxes have been found to meet this standard for more than 70 years. There is thus no realistic chance that the mandate for health insurance would be invalidated for denying due process or equal protection.

Those who object to the health care proposals on constitutional grounds are making an argument that has no basis in the law. They are invoking the rhetorical power of the Constitution to support their opposition to health care reform, but the law is clear that Congress constitutionally has the power to do so. There is much to argue about in the debate over health care reform, but constitutionality is not among the hard questions to consider.

Erwin Chemerinsky is dean and distinguished professor of law at the University of California, Irvine School of Law.

Our Unconstitutional Census

2009-08-10T07:12:00.000-05:00

WSJ 8/10/09

California could get nine House seats it doesn’t deserve because illegal aliens will be counted in 2010.
By JOHN S. BAKER AND ELLIOTT STONECIPHER

Next year’s census will determine the apportionment of House members and Electoral College votes for each state. To accomplish these vital constitutional purposes, the enumeration should count only citizens and persons who are legal, permanent residents. But it won’t.

Instead, the U.S. Census Bureau is set to count all persons physically present in the country—including large numbers who are here illegally. The result will unconstitutionally increase the number of representatives in some states and deprive some other states of their rightful political representation. Citizens of “loser” states should be outraged. Yet few are even aware of what’s going on.

In 1790, the first Census Act provided that the enumeration of that year would count “inhabitants” and “distinguish” various subgroups by age, sex, status as free persons, etc. Inhabitant was a term with a well-defined meaning that encompassed, as the Oxford English Dictionary expressed it, one who “is a bona fide member of a State, subject to all the requisitions of its laws, and entitled to all the privileges which they confer.”

Thus early census questionnaires generally asked a question that got at the issue of citizenship or permanent resident status, e.g., “what state or foreign country were you born in?” or whether an individual who said he was foreign-born was naturalized. Over the years, however, Congress and the Census Bureau have added inquiries that have little or nothing to do with census’s constitutional purpose.

By 1980 there were two census forms. The shorter form went to every person physically present in the country and was used to establish congressional apportionment. It had no question pertaining to an individual’s citizenship or legal status as a resident. The longer form gathered various kinds of socioeconomic information including citizenship status, but it went only to a sample of U.S. households. That pattern was repeated for the 1990 and 2000 censuses.

The 2010 census will use only the short form. The long form has been replaced by the Census Bureau’s ongoing American Community Survey. Dr. Elizabeth Grieco, chief of the Census Bureau’s Immigration Statistics Staff, told us in a recent interview that the 2010 census short form does not ask about citizenship because “Congress has not asked us to do that.”

Because the census (since at least 1980) has not distinguished citizens and permanent, legal residents from individuals here illegally, the basis for apportionment of House seats has been skewed. According to the Census Bureau’s latest American Community Survey data (2007), states with a significant net gain in population by inclusion of noncitizens include Arizona, California, Florida, Illinois, Nevada, New Jersey, New York and Texas. (There are tiny net gains for Hawaii and Massachusetts.)

This makes a real difference. Here’s why:

According to the latest American Community Survey, California has 5,622,422 noncitizens in its population of 36,264,467. Based on our round-number projection of a decade-end population in that state of 37,000,000 (including 5,750,000 noncitizens), California would have 57 members in the newly reapportioned U.S. House of Representatives.

However, with noncitizens not included for purposes of reapportionment, California would have 48 House seats (based on an estimated 308 million total population in 2010 with 283 million citizens, or 650,000 citizens per House seat). Using a similar projection, Texas would have 38 House members with noncitizens included. With only citizens counted, it would be entitled to 34 members.

Of course, other states lose out when noncitizens are counted for reapportionment. According to projections of the 2010 Census by Election Data Services, states certain to lose one seat in the 2010 reapportionment are Iowa, Louisiana, Massachusetts, Michigan, New Jersey, New York, Ohio and Pennsylvania; states likely (though not certain) to lose a seat are Illinois, Minnesota, Missouri, and Ohio could lose a second seat. But under a proper census enumeration that excluded illegal residents, some of the states projected to lose a representative—including our own state of Louisiana—would not do so.

The census has drifted far from its constitutional roots, and the 2010 enumeration will result in a malapportionment of Congress.

In the 1964 case of Wesberry v. Sanders, the Supreme Court said, “The House of Representatives, the [Constitutional] Convention agreed, was to represent the people as individuals and on a basis of complete equality for each voter.” It ruled that Georgia had violated the equal-vote principle because House districts within the state did not contain roughly the same number of voting citizens. Justice Hugo Black wrote in his majority opinion that “one man’s vote in a congressional election is to be worth as much as another’s.” The same principle is being violated now on a national basis because of our faulty census.

The Census Bureau can of course collect whatever data Congress authorizes. But Congress must not permit the bureau to unconstitutionally redefine who are “We the People of the United States.”

Mr. Baker teaches constitutional law at Louisiana State University. Mr. Stonecipher is a Louisiana pollster and demographic analyst.

10 Things Your Congressperson Won't Say

2009-07-01T06:30:00.001-05:00

10 Things Your Congressperson Won't Say

1. “I can’t lose.”
When members of the U.S. House of Representatives stand for reelection, for most it’s a formality: On average, more than 90 percent of House incumbents win, according to a 2005 report by the Cato Institute. What’s behind the incumbency advantage? Campaign financing, for one thing. We taxpayers pick up the tab for incumbents’ regular offices, staff, publicity, travel, and mailings, so they needn’t raise as much money to run. Challengers, on the other hand, must come up with a fortune— and do so in dribs and drabs, since Congress caps individual contributions at $2,000.

But the biggest factor is partisan gerrymandering. Since the Supreme Court ruled in 1969 that states must ensure that each congressman represents the same number of constituents, the process of redistricting after every census has been aggressively used by state party bosses to protect their incumbents. “Because of gerrymandering, almost 90 percent of Americans live in congressional districts where the outcome is so certain that their votes are irrelevant,” concludes the Cato report. And it’s bound to get worse: In June 2006 the Court ruled that states can redraw congressional districts as often as they please.

2. “I’m above the law.”
Some people were dismayed when Capitol Police didn’t give a sobriety test to Rep. Patrick Kennedy (D-R.I.) after he rammed a Capitol Hill security barrier late one night in 2006 and emerged from his Mustang “impaired,” with “unsure” balance and “slurred” speech, according to the police report. Georgetown University law professor Paul F. Rothstein wasn’t surprised: “They always give [congresspeople] a pass.”

Why? Inside Congress author Ronald Kessler says that, historically, most officers have operated under the mistaken impression that the Constitution prohibits arresting or even ticketing congresspeople while Congress is in session. The belief was so prevalent at one time that the Justice Department issued a statement in 1976 explaining the “previous policy of releasing members who had been arrested was based on a misunderstanding of the clause in the U.S. Constitution,” which forbids only civil arrest, not arrest for a crime. Nonetheless, Capitol Police still coddle and avoid arresting members of Congress. For one thing, protecting congresspeople is part of their mission. For another, Congress controls their budget—including top cops’ salaries.

3. “Read the bills I vote on? Who’s got that kind of time?”
In a perfect world, our legislators would vote on each bill based on thorough, firsthand analysis. But that’s not how it works in Washington. Most congresspeople don’t actually read bills, relying instead on impressions gleaned from staff and lobbyists. And in many cases, they couldn’t read them if they wanted to: The 700- plus-page Deficit Reduction Omnibus Reconciliation Act of 2005, for example, surfaced after 1 a.m. and went to vote early the next morning. “That’s the way it’s done,” Rep. Rob Simmons (R-Conn.) told the Hartford Courant.

Result: Congresspeople seldom know exactly what they’re voting on. Take the 1,600-page Appropriations Bill in 2004 that had already made it through the House before it was discovered that a staffer had slipped in a provision permitting his committee to browse any tax return filed with the IRS.

There have been some attempts to get Congress to change its ways. In 2006, for example, D.C. nonprofit ReadtheBill .org persuaded some reps to introduce a resolution requiring the House to post each bill online for 72 hours before even debating it. But that resolution has been languishing in the House Committee on Rules ever since. A similar bill was introduced in 2007 by Rep. Brian Baird (D-Wash.), but it, too, has since stalled.

4. “Congress is just a stepping-stone to the big money—in lobbying.”
Congress is a pretty good gig, financially speaking. Our senators and representatives currently earn upwards of $165,000 a year—roughly four times the median U.S. household income. But it’s not nearly as lucrative as lobbying, a job congresspeople have begun flocking to once they’re out of office. “As late as the 1980s, few lawmakers became lobbyists because they considered it beneath their dignity,” writes Robert V. Remini in The House: The History of the House of Representatives. But today it’s the top career choice for former congresspeople.

According to a 2005 report by Public Citizen, since 1998 more than 43 percent of all eligible departing congresspeople went into lobbying. Take William Tauzin. The Louisiana Republican, and former chair of the Energy and Commerce Committee, left the House for a $1-million-plus-a-year job as president of Pharmaceutical Research and Manufacturers of America (PhRMA). According to press reports, PhRMA was wooing Tauzin the same month he pushed through the Medicare bill. Tauzin denies it fueled his zeal for the bill, but you can’t help wondering how the prospect of that kind of money might influence one’s judgment.

5. “My health benefits are way better than yours . . .”
Congresspeople love tinkering with our health care. They virtually created the managed-care industry, for instance, with the Health Maintenance Organization Act of 1973, which tilted the playing field in favor of HMOs, ultimately stripping many Americans of all other choices. Meanwhile, congresspeople enjoy more than a dozen options, including prized indemnity plans, which provide reimbursement without limiting the pool of medical care providers, that few workers in the public sector receive. On top of that, for an annual fee of $480, they can get just about all the medical attention they want at the Capitol Office of the Attending Physician, which has five doctors and a dozen assistants on call for routine checkups, tests, prescriptions, emergency care, and mental health services. Who’s making up the difference? Taxpayers, naturally, to the tune of $2.8 million in 2008.

What happens once a congressperson is out of office? She needn’t fret: Just five years into the job, she’s entitled to keep her regular health coverage until she’s ready for Medicare. And she doesn’t have to pay extra, as you do for Cobra, under the Health Insurance Portability and Accountability Act, which she voted for in 1996.

6. “. . . and so is my pension.”
Congress is forever changing the rules on retirement plans: limiting contributions, punishing pension underfunding, and making it hard for employers to plan ahead. In 2006 Congress passed yet another complex bill that’s wreaking more havoc, according to James A. Klein, president of the American Benefits Council. The new Pension Protection Act includes funding rules that, Klein says, “could undermine the retirement security of the very participants the bill’s trying to protect.” Indeed, less than a month after the PPA took effect, DuPont froze its pension plan and cut back on benefits.

Not that Congress is losing sleep— its members’ pensions are exempt. Most qualify for a 401(k)-style plan with a nice match, up to 5 percent of salary. After five years on the job, they’re also entitled to a regular pension, bigger than almost all other federal workers’ at the same pay and twice what a midlevel executive would expect. If elected before age 30, they can collect in full at age 50; those elected later can retire after 25 years or at age 62. Their pensions rise regularly with the cost of living and can never be taken away—short of a conviction for espionage or treason-related offenses.

7. “I enjoy great perks and gifts, and it’s all legal.”
Working on Capitol Hill comes with a lot of fringe benefits. Congresspeople enjoy taxpayer-subsidized gyms, salons and restaurants, free parking, and a nice office. They also get $1-million-plus allowances per year for staff, mail, and travel home, where they can rent another office and lease a car on your dime, according to the National Taxpayers Union.

On top of that, House ethics rules allow them to accept gifts, luxury jet rides, and free overnight trips of up to seven days abroad for meetings, factfinding missions, and speaking gigs, provided they’re related to official duties and not sponsored by lobbyists. Between 2000 and 2005, congresspeople and staff accepted 23,000 of these trips, often to vacation spots and worth nearly $50 million, according to the Center for Public Integrity. Turns out that 90 were sponsored by lobbyists—Mr. and Mrs. Tom DeLay’s infamous $28,000 golfing trip to Scotland among them.

8. “I simply can’t be fired.”
Once elected, it’s almost impossible to kick a congressperson out of office, even if he becomes mentally incompetent or is sent to prison. To oust a member of the House or Senate, it takes a vote of two thirds of his colleagues—which has happened only twice since the Civil War, and five times in all of U.S. history.

House rules do discourage a congressman from participating in committees if convicted of a crime for which he could get two years or more in jail, and his own party may force him from leadership positions even if he’s not convicted. For example, Democrats pushed Rep. William Jefferson (D-La.) off the Ways and Means Committee in 2006 because FBI agents swear they caught him accepting a $100,000 bribe and found $90,000 cash in his freezer. (Jefferson denies any wrongdoing.) But even if convicted and sent to prison, Jefferson could seek reelection from his cell, as did former Ohio Democrat James Traficant, Jr., in 2002. Traficant received only 15 percent of the vote and lost his seat—but he was still allowed to collect his full pension.

9. “Lobbyists love me because I deliver the goods.”
The reason lobbyists court lawmakers is that they have the power to help friends and hurt foes. For instance, a congressperson can create a specific tax break or other loophole for a lobbyist’s clients, giving them an unfair advantage over rivals. Congresspeople also hold the power to steer federal funds to friends by earmarking money for pet projects—a power they often abuse. Case in point: the notorious “Bridge to Nowhere,” a Golden Gate–size span between a small town in rural Alaska and a nearly deserted island, for which Rep. Don Young (R-Alaska) persuaded Congress to earmark $223 million in 2005. Similar abuses have increased dramatically in recent years, with the number of earmarks coming out of the House Appropriations Committee nearly tripling, to 15,877 earmarks worth $47.4 billion in 2005, from just 4,126 earmarks worth $23.2 billion in 1994, according to the Congressional Research Service.

10. “Rules are meant to be broken.”
Congress is notorious for breaking its own rules: Only a handful of members dock their own pay when absent for reasons other than health, for example. But it’s Congress’s failure to follow its own legislative procedures that’s truly galling. When the joint House-Senate conference committee meets to reconcile different versions of a bill, for instance, House rules forbid adding anything beyond the scope of the version the House has already approved. And once the committee comes up with a compromise bill, the House is supposed to hold at least one public meeting, giving members a written explanation of the changes and three days until the vote. But the conference committee routinely flouts these rules, often making big changes without explanation, then getting the Rules Committee to waive restrictions so they can rush bills through unread. How common is this? In one telling example, the Rules Committee issued so-called blanket waivers for all 18 bills that went through the conference committee from Jan. 4, 2005, through March 2006.

In December 2006, Speaker Hastert took it a step further by letting Sen. William Frist (R-Tenn.) add on to a bill after the conference committee was finished: 40 pages of legislation protecting makers of avian flu vaccine and similar drugs against liability even if they injured or killed patients through gross negligence. Then Hastert got the Rules Committee to make kosher what he’d done. Frist’s spokesperson claims there was “bipartisan consensus” for such an incentive, but couldn’t explain why it hadn’t made it into the text of the bill if it was so popular. Hastert’s office failed to return our calls.

URL for this article:
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Bush-era judges buck Obama on terror

2009-06-30T07:48:00.001-05:00

By: Josh Gerstein
June 30, 2009 04:13 AM EST

President Barack Obama’s claims of broad executive authority to carry out the war on terror are drawing fire from an unexpected source: federal judges nominated by President George W. Bush, who asserted the sweeping powers in the first place.

In recent weeks, three different Bush appointees considering cases relating to war-on-terror detainees have rejected arguments from Obama’s Justice Department, which adopted virtually unchanged the positions the Bush administration had staked out.

In each case, the Bush-appointed judge said the executive branch was overstepping its authority and claiming more powers than the law allowed.

“It took a while for the courts to turn on George Bush. Obama’s not getting that same period,” said Jonathan Turley, a liberal legal analyst at The George Washington University. “The fact that these are Republican appointees tends to add an exclamation point to their decisions.”

“Even Republican judges are seeing through the arguments and the idea that the war on terror justified depriving prisoners of constitutional protections,” said Jonathan Hafetz of the American Civil Liberties Union.

The irony, of course, is that Democrats railed against Bush for what many saw as a power grab in the months and years after the Sept. 11 attacks — when Bush and Vice President Dick Cheney asserted vast executive branch authority to wage wars in Afghanistan and Iraq and to hold prisoners in Guantanamo Bay and elsewhere. In the years since, courts from the Supreme Court on down have begun to pare back that authority, saying in several high-profile rulings that Bush overstepped his bounds.

Since taking office, Obama has adopted many of these broad claims to executive authority as he’s inherited the war on terror from the past administration — but he is now facing some of the same legal constraints that Bush began to encounter in his closing years in office, sometimes in sharply worded decisions that show some courts have decided it’s time to rein in executive power.

“For seven years, the Bush administration, in tandem with Congress, were able to stop any judge from actually looking at the evidence” in detainee cases, Hafetz said. “They’re finding that the emperor has no clothes and the detentions lack evidentiary support.”

In April, Judge John Bates turned aside the arguments of the Obama and Bush administrations in ruling that some prisoners at the U.S.-run Bagram Air Base in Afghanistan were entitled to challenge their detention in court if they were captured outside Afghanistan.

“Such rendition resurrects the same specter of limitless executive power the Supreme Court sought to guard against: ... the concern that the executive could move detainees physically beyond the reach of the Constitution and detain them indefinitely,” wrote Bates, who was appointed to the district court in Washington in 2001 and is a former aide to Whitewater independent counsel Kenneth Starr.

Earlier this month, San Francisco-based Judge Jeffrey White surprised many legal analysts when he refused to dismiss a lawsuit an alleged Al Qaeda operative and convicted terrorist, Jose Padilla, brought against former Justice Department attorney John Yoo over his alleged involvement in Bush’s decision to hold Padilla in a South Carolina Navy brig for more than three years.

“Like any other government official, government lawyers are responsible for the foreseeable consequences of their conduct,” wrote White, a former federal prosecutor nominated by Bush in 2002. “The specific designation as an enemy combatant does not automatically eviscerate all of the constitutional protections afforded to a citizen of the United States. ... The court finds that the complaint alleges conduct that would be unconstitutional if directed at any detainee.”

And in a ruling last week, Judge Richard Leon was anything but bashful as he second-guessed the Obama and Bush administrations’ claims that a Syrian detainee, Abdul Rahim Abdul Razak al-Janko, could be held at Guantanamo even though he was considered a spy by Al Qaeda and tortured at some length before he was captured by the U.S. in Afghanistan.

“Surely, extreme treatment of that nature evinces a total evisceration of whatever relationship might have existed!” wrote Leon, who was appointed in 2002 and served as a counsel to congressional Republicans in the Iran-Contra investigation in the ’80s.

Several legal analysts said they doubted the judges were acting out of any desire to trip up Obama. They noted, for example, that Leon began ruling for some Guantanamo prisoners last November, when Bush was still in office.

“I don’t think it’s partisan or personal,” said David Rivkin, a conservative attorney and lawyer for the administrations of Presidents Ronald Reagan and George H.W. Bush.

Rivkin called the rulings “bad” and “deeply violative of constitutional principles,” but he said the decisions from Bush judges were a logical outgrowth of Supreme Court decisions pushing the judiciary to assert itself.

“The fundamental thing is human nature: Where you sit is where you stand,” Rivkin said. “Their institutional interest — that is a far more compelling motivator of behavior than political inclinations. ... You can be a great armchair general, overseeing things happening in a faraway exotic place. You can be the one to run Bagram.”

Another analyst said the ideological lines blurred in the detainee cases. “When it comes to coercive state power, those legal issues don’t always divide neatly along liberal/conservative, partisan lines,” said Matthew Waxman, a law professor at Columbia University.

Even after the stinging defeats, the Obama Justice Department is continuing to fight at least two of the rulings. Government lawyers requested and received a stay of Bates’s decision on habeas rights at Bagram.

And in a filing just last week in another suit Padilla brought against other officials, the Justice Department all but trashed White’s decision. The government complained that the ruling in favor of Yoo “contains numerous and critical errors, ignored controlling Supreme Court and other precedent, and for these reasons should not be followed.”

Soak the Rich, Lose the Rich

2009-05-18T05:46:00.001-05:00

http://online.wsj.com/article/SB124260067214828295.html

Americans know how to use the moving van to escape high taxes.

By ARTHUR LAFFER and STEPHEN MOORE

With states facing nearly $100 billion in combined budget deficits this year, we're seeing more governors than ever proposing the Barack Obama solution to balancing the budget: Soak the rich. Lawmakers in California, Connecticut, Delaware, Illinois, Minnesota, New Jersey, New York and Oregon want to raise income tax rates on the top 1% or 2% or 5% of their citizens. New Illinois Gov. Patrick Quinn wants a 50% increase in the income tax rate on the wealthy because this is the "fair" way to close his state's gaping deficit.

Mr. Quinn and other tax-raising governors have been emboldened by recent studies by left-wing groups like the Center for Budget and Policy Priorities that suggest that "tax increases, particularly tax increases on higher-income families, may be the best available option." A recent letter to New York Gov. David Paterson signed by 100 economists advises the Empire State to "raise tax rates for high income families right away."

Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

Martin Feldstein, Harvard economist and former president of the National Bureau of Economic Research, co-authored a famous study in 1998 called "Can State Taxes Redistribute Income?" This should be required reading for today's state legislators. It concludes: "Since individuals can avoid unfavorable taxes by migrating to jurisdictions that offer more favorable tax conditions, a relatively unfavorable tax will cause gross wages to adjust. . . . A more progressive tax thus induces firms to hire fewer high skilled employees and to hire more low skilled employees."

More recently, Barry W. Poulson of the University of Colorado last year examined many factors that explain why some states grew richer than others from 1964 to 2004 and found "a significant negative impact of higher marginal tax rates on state economic growth." In other words, soaking the rich doesn't work. To the contrary, middle-class workers end up taking the hit.

Finally, there is the issue of whether high-income people move away from states that have high income-tax rates. Examining IRS tax return data by state, E.J. McMahon, a fiscal expert at the Manhattan Institute, measured the impact of large income-tax rate increases on the rich ($200,000 income or more) in Connecticut, which raised its tax rate in 2003 to 5% from 4.5%; in New Jersey, which raised its rate in 2004 to 8.97% from 6.35%; and in New York, which raised its tax rate in 2003 to 7.7% from 6.85%. Over the period 2002-2005, in each of these states the "soak the rich" tax hike was followed by a significant reduction in the number of rich people paying taxes in these states relative to the national average. Amazingly, these three states ranked 46th, 49th and 50th among all states in the percentage increase in wealthy tax filers in the years after they tried to soak the rich.

This result was all the more remarkable given that these were years when the stock market boomed and Wall Street gains were in the trillions of dollars. Examining data from a 2008 Princeton study on the New Jersey tax hike on the wealthy, we found that there were 4,000 missing half-millionaires in New Jersey after that tax took effect. New Jersey now has one of the largest budget deficits in the nation.

We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state. Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place. This is why high income-tax states have such a tough time creating net new jobs for low-income residents and college graduates.

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states "race to the bottom" and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

They're wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation -- even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Or consider the fiasco of New Jersey. In the early 1960s, the state had no state income tax and no state sales tax. It was a rapidly growing state attracting people from everywhere and running budget surpluses. Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation -- much worse than those in New Hampshire. Most of the massive infusion of tax dollars over the past 40 years has simply enriched the public-employee unions in the Garden State. People are fleeing the state in droves.

One last point: States aren't simply competing with each other. As Texas Gov. Rick Perry recently told us, "Our state is competing with Germany, France, Japan and China for business. We'd better have a pro-growth tax system or those American jobs will be out-sourced." Gov. Perry and Texas have the jobs and prosperity model exactly right. Texas created more new jobs in 2008 than all other 49 states combined. And Texas is the only state other than Georgia and North Dakota that is cutting taxes this year.

The Texas economic model makes a whole lot more sense than the New Jersey model, and we hope the politicians in California, Delaware, Illinois, Minnesota and New York realize this before it's too late.

Three unique review opportunities

2009-04-24T06:00:00.001-05:00

1. C-Span will be hosting a live call-in review program for AP
Government and Politics students on Saturday morning, May 2nd.

Students are invited to call in during the last hour of the
Washington Journal program on that morning with their review
questions. Two AP teachers will help answer these questions.

The C-Span review program will air 9-10 am, Eastern (8-9 am,
Central). Students from the Eastern/Central time zones can call
202-737-0001 with their questions; students from the Mountain/Pacific
time zones can call 202-737-0002 on May 2nd.

2. WIND AM 560 radio in Chicago will be hosting a live AP Government
review call-in show on the evening of Sunday, May 3rd from 9-11 pm
(Central.)

Students can listen to the live stream at http://
560wind.townhall.com/ by clicking the "Listen Live" link. They can
call 312-642-5600 with questions on the evening of May 3rd.

3. Students who are not able to get their calls answered during
these programs can visit www.cbs2chicago.com/school. AP teachers,
students and alums will monitor this blog and help answer last minute
questions.

Re-aligning election???

2009-04-20T08:31:00.001-05:00

The University of Virginia’s Larry J. Sabato is out today with a 296-page, paperback anthology, “The Year of Obama: How Barack Obama Won the White House.” $10.76 from Amazon. Includes Sabato’s own news-making chapter, “The Election of Our Lifetime” His précis for Playbook:

“The big idea of this book is that 2008 looks to be a realigning election—a very rare event in American history. The previous three were 1896, 1932, and 1980. Translation: The Democratic majority is going to last for a while. There have been 38 presidential elections since 1860, and Obama received the 6th highest share of the vote for a Democrat. Only FDR (four times) and LBJ (once) exceeded Obama’s percentage. There were three giant demographic shifts that powered this:

“--The young broke more than 2-1 Democratic, and it was an intense preference unlikely to fade quickly. As this group ages and replaces older voters, Democrats will benefit even more since this group’s turnout will go up.

“--The proportion of minority voters (black, Hispanic, and Asian) shot up and is likely to climb consistently every four years (mainly because of Hispanics). Democrats get about three-quarters of the votes of minorities, taken as a collective group.

“--Americans with post-graduate educations have begun to move firmly to the Democrats, not just because of Bush and the economy but also because of the GOP’s conservative stance on social issues (abortion, gay rights, etc.)

“Republicans will be in the wilderness for a while, whatever they do. If they want to shorten that time, though, they need to focus on the three populations we discuss in the book. There are many ways to increase their attractiveness, but one essential ingredient is to deemphasize social issues—as unhappy as that may make some fundamentalist Christians.”

Making Connections

2009-04-13T12:19:00.000-05:00

http://www.politico.com/news/stories/0409/21134.html

Everyone Should Pay Income Taxes

2009-04-13T05:42:00.001-05:00

It's bad for our democracy to exempt half the country.

By ARI FLEISCHER

If you thought Bernard Madoff's Ponzi scheme was bad, wait until you hear about the inverted pyramid scheme the federal government is working on. While Mr. Madoff preyed on people who trusted him with their money, the federal government has everyone's money, and the implications of its actions are worse.

David Gothard
Picture an upside-down pyramid with its narrow tip at the bottom and its base on top. The only way the pyramid can stand is by spinning fast enough or by having a wide enough tip so it won't fall down. The federal version of this spinning top is the tax code; the government collects its money almost entirely from the people at the narrow tip and then gives it to the people at the wider side. So long as the pyramid spins, the system can work. If it slows down enough, it falls.

It's also what's called redistribution of income, and it is getting out of hand.

A very small number of taxpayers -- the 10% of the country that makes more than $92,400 a year -- pay 72.4% of the nation's income taxes. They're the tip of the triangle that's supporting virtually everyone and everything. Their burden keeps getting heavier.

As a result of the 2001 tax cuts enacted by a bipartisan Congress and signed by President George W. Bush, the share of taxes paid by the top 10% increased to 72.8% in 2005 from 67.8% in 2001, according to the latest data from the Congressional Budget Office (CBO).

Contrary to the myth that Mr. Bush cut taxes only for the wealthy, the 2001 tax cut reduced taxes for every income-tax payer in the country. He reduced the bottom tax rate to 10% from 15% and increased the refundable child tax credit to $1,000 from $500 per child, both cuts that President Barack Obama says we should keep. In so doing, millions of lower income taxpayers were removed from the tax rolls, shifting the remaining burden to those at the top, even after their taxes were cut.

According to the CBO, those who made less than $44,300 in 2001 -- 60% of the country -- paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden. Their share shrank even when taking into account the payroll tax. In 2001, the bottom 60% paid 16.3% of all taxes; by 2005 their share was down to 14.3%. All the while, this large group of voters made 25.8% of the nation's income.

When you make almost 26% of the income and you pay only 0.6% of the income tax, that's a good deal, courtesy of those who do pay income taxes. For the bottom 40%, the redistribution deal is even better. In 2001, these 43 million Americans, who earn less than $30,500, made 13.5% of the nation's income but paid no income tax. Instead, they received checks from their taxpaying neighbors worth $16.3 billion. By 2005, those checks totaled $33.3 billion.

Today, Mr. Obama and many congressional Democrats want the "wealthy" to pay even more so there is more money for them to redistribute. The president says he wants the wealthy to pay their "fair share." Who can argue with that? But he never defines what that means. Is it fair for 10% to pay 70% of the income tax? Does he believe they should pay 75%, or 95%, or does fairness mean they should pay it all? It's clever politics to speak like that, but it is risky policy.

Mr. Obama is adding to this trend with his "Make Work Pay" tax cut that means almost 50% of the country will no longer pay any income taxes, up from a little over 40% today. A certain amount of income redistribution in a capitalistic society is healthy, but this goes too far. The economic and moral problem is that when 50% of the country gets benefits without paying for them and an increasingly smaller number of taxpayers foot the bill, the spinning triangle will no longer be able to support itself. Eventually, it will spin so slowly that it falls down, especially when the economy is contracting and the number of wealthy taxpayers is in sharp decline.

In addition to exempting almost 50% of the country from income taxes, today nearly every other social cause is given a loophole -- or a preference -- in the tax code. Want to buy a hybrid vehicle? You get a tax break. Do you own a solar water heater? You get a credit. Want to give to charity? You get a deduction. Own a house? There's another tax deduction for you. How about college savings, certain medical costs, and retirement savings? Yes, yes, and of course yes. Did you move, pay alimony, or "provide housing to a Midwestern displaced individual"? More deductions, credits and exemptions there too, if you qualify.

Everyone now has a sacred cow in the tax code. For my money, the most sacred thing of all is our country and its growth, but the sacred cows have turned into a pack of wolves. On both the spending and the tax side, the wolves are devouring our children's future.

Senate Budget Chairman Kent Conrad (D., N.D.) wants to cut hundreds of billions of dollars from the president's budget, but that's small potatoes given the size of the deficit. The debt problem is so big and hopeless, Congress's normal nips and tucks won't work. Something more fundamental needs to happen.

It's time to create an Economic Growth Code whose purpose is to fix and grow the economy, not redistribute massive amounts of wealth. A new tax code that creates growth and reforms our entitlement system is the only way to dig our way out of the hole we're in.

Under an Economic Growth Code, everyone in American would pay income taxes -- everyone. Such a system would be designed to foster broad-based growth for all, in contrast to the loophole-ridden system we have today. Not only is the current code flawed from top to bottom, it is used by politicians to divide the public along class lines and fails to promote prosperity.

Growth is the key to keeping the pyramid spinning, and to keep spinning the pyramid's tip needs to be broadened. Otherwise a country that was raised to believe that national bankruptcy happened elsewhere may have to think again. Given the state of the economy and trillion-dollar deficits projected as far as the eye can see, we need to return to an era of more conservative, fiscal discipline.

Congress should start by refusing to go along with Mr. Obama's promise to cut taxes for 95% of the country. With the government running an almost $2 trillion deficit, no one should have their taxes cut -- no one. Given the size of the deficit, fiscal responsibility demands nothing less.

Republicans in Congress need to develop their own version of an Economic Growth Code, an alternative tax code that directly targets the current mess and helps us to grow our way out of it. Republicans should not doodle in the margins -- they should use their minority status to launch the next big movement in policy and politics. Nothing creates revenue like growth and that's where Republicans should make their mark.

I favor the abolition of all Social Security, Medicare and estate taxes. In their place, we should create a simple income tax system that has no deductions or credits at all. The result would be a progressive, multitiered income tax in which everyone pays. The bottom 50% won't be excused from paying the cost of government and top earners will no longer have the loopholes they're used to. The middle-class, whose wages have stagnated, will benefit from economic growth. Social Security and Medicare will be funded from income taxes, ending the myth that these programs are supported through government trust funds and payroll taxes. The tax base will broaden dramatically, allowing rates to fall and helping to foster what's most important -- economic growth.

I'd also create a mechanism so tax rates go up or down for everyone -- no more dividing the country by lowering taxes for some or raising them only for others. A revenue system whose purpose is to pay the government's bills should apply fairly to one and all. If Congress wants to raise or cut taxes, it should do so for everyone.

Another benefit is that such a system will create an environment in which spending programs receive the scrutiny they deserve. It's funny what happens when everyone pays the bills; Americans may want less spending so they can pay fewer bills.

Mr. Fleischer, a former press secretary for President George W. Bush, is president of Ari Fleischer Communications.

AP Review Site

2009-04-06T14:12:00.000-05:00

www.cbs2chicago.com/school has once again converted into an online
review site to help your AP Government and Politics students prepare
for the American Government exam on May 4th.

This blog will be updated every Monday, Wednesday and Friday to
discuss the major themes of AP Government as well as a 24/7 forum for
students to interact with other AP students and AP teachers who
monitor the website.

The first topic featured at www.cbs2chicago.com/school is Separation
of Powers.

Andrew Conneen
Stevenson High School
Lincolnshire, IL

Obama's Attack Machine

2009-04-04T07:01:00.001-05:00

WSJ
By KIMBERLEY A. STRASSEL

The thing about fear is that you can see it. For an insight as to what the left today fears most, witness its attempted political assassination of Eric Cantor.

The 45-year-old Virginia congressman came to Washington in 2001, and by last year had been unanimously elected Republican Whip, under Minority Leader John Boehner. In recent months, Mr. Cantor has helped unify the GOP against much of President Barack Obama's agenda, in particular his blowout $787 billion stimulus, and yesterday, his blowout $3.6 trillion budget.

He's also one of the GOP's up-and-coming talents. Along with Wisconsin's Paul Ryan, or California's Kevin McCarthy, he represents a new guard, one that's sworn off earmarks and brought the conversation back to fiscal responsibility and economic opportunity. They've focused on party outreach, and are popular with younger voters and independents. They are big fund-raisers, part of a drive to recruit and elect more reformers. And they are on the rise.

All of which threatens the left. Democrats know their current dominance in Washington is in no small part due to public disillusionment with the GOP. They are also aware that their current tax-and-spend governance is creating plenty of opportunities for that opposition to remake itself. Thus the furious campaign -- waged by every blog, pundit, union, 527, and even the White House -- to kneecap Republicans who might help lead a makeover. Mr. Cantor is the top target.

This kicked off after the GOP's unanimous vote against the stimulus, which Democrats saw as an opening to brand Mr. Cantor as the public face of partisan opposition to the "bipartisan" president. The Virginian has in fact publicly reached out to the White House, and has been deeply involved in producing alternatives to administration policies. But never let the facts get in the way of a good smear.

Within days of the vote, the Democratic Congressional Campaign Committee was up with radio ads targeting 28 Republicans who'd voted no. Mr. Cantor was the only member of the House GOP leadership to get hit. The American Federation of State, County and Municipal Employees (AFSCME), the big union, and Americans United for Change, the pro-Obama group, launched their own ads against 18 members, again singling out Mr. Cantor. The groups also ran a national TV spot sporting a picture of the whip with text that read "just saying no" -- which earned Mr. Cantor a new liberal nickname: Dr. No.

Mr. Obama joined in at his Fiscal Responsibility Summit. As the TV cameras rolled, he deliberately turned to the whip to say: "I'm going to keep on talking to Eric Cantor. Some day, sooner or later, he's going to say 'Boy, Obama had a good idea.'"

The Rush Limbaugh flap inspired a new AFSCME and American United for Change ad, accompanied by a statement that when Rush says jump, "Eric Cantor and other Republicans say 'how high.'" At nearly the precise moment Obama Chief of Staff Rahm Emanuel made Sunday news by claiming Mr. Limbaugh was rooting for Obama "failure," George Stephanopoulos (who, take note, has daily calls with Mr. Emanuel) demanded on his own show that Mr. Cantor tell him if this was indeed the GOP strategy. David Plouffe, the president's campaign wizard, followed up with an anti-Limbaugh screed for the Washington Post, zeroing in on that "new Republican quarterback Eric Cantor, who says "the GOP's strategy will be to 'Just Say No.'"

And then there's the echo chamber. MSNBC's Keith Olbermann is so obsessed with Mr. Cantor, he can barely find time to be indignant about anything else. Talking Points Memo, Huffington Post, Think Progress and other leading liberal blogs are today all-anti-Cantor-all-the-time.

But the real ugly was unleashed a few weeks ago, when the goon squad set on Mr. Cantor's wife. An outfit called Working Families Win began running robocalls in five districts noting that Diana Cantor was a "top executive" at a bank that had received bailout funds -- the clear implication being that Mr. Cantor's vote for said bailout hinged on this fact. "In the middle of the AIG scandal, our congressman [fill in the blank] voted to make Virginia Republican, Eric Cantor, the conservative leader in Congress," it droned (incoherently and incorrectly), before demanding voters oppose the "Cantor Family Bank bailout."

At least when Chuck Schumer ran ads targeting Republicans for voting for a "bailout" that his own party brought to the floor -- and passed -- he kept his attacks on the members. And the last anyone looked, the AIG intervention was being overseen by the Obama administration, not the House minority whip. This may set a new political low, not the least because Mrs. Cantor in fact works at a subsidiary of the bank in question. Not to mention that Mr. Cantor led the initial GOP revolt against the "bailout."

The Virginian has a new, high-profile job, and that means taking some knocks. Mr. Cantor is also where he is for a reason, and has so far weathered the onslaught. But the coordinated takedown attempt is yet more proof that the Obama-led Democrats aren't nearly as interested in changing the "tone" as they are in holding on to power.

Kimberley Strassel, a member of the Journal editorial board, writes Potomac Watch every Friday. Ms. Strassel joined the Journal in 1994 and has worked as a reporter in Europe and as an editor and editorial writer in New York.

The GOP's Alternative Budget

2009-04-02T08:39:00.000-05:00

President Obama offers us the option of European big government.
By PAUL D. RYAN

Today, the House of Representatives will consider two budget plans that represent dramatically different visions for our nation's future.

We will first consider President Barack Obama's plan. To be clear, this is no ordinary budget. In a nutshell, the president and Democratic leaders in Congress are attempting to bring about the third and final great wave of progressivism, building on top of the New Deal and the Great Society. So America is placed in a special moment in our history -- brought about by the deep recession, Mr. Obama's ambitious agenda, and the pending fiscal tidal-wave of red ink brought forward by the looming insolvency of our entitlement programs. If this agenda comes to pass, it will mark this period in history as the moment America turned European.

House Republicans will offer an alternative plan. This too is no ordinary budget. As the opposition party, we believe this moment must be met by offering the American people a different way forward -- one based on our belief that America is an exceptional nation, and we want to keep it that way. Our budget applies our country's enduring first principles to the problems of our day. Rather than attempting to equalize the results of peoples' lives and micromanaging their affairs, we seek to preserve our system of protecting our natural rights and equalizing opportunity for all. The plan works to accomplish four main goals: 1) fulfill the mission of health and retirement security; 2) control our nation's debts; 3) put the economy on a path of growth and leadership in the global economy; and 4) preserve the American legacy of leaving the next generation better off.

Under the president's plan, spending will top $4 trillion this year alone, and consume 28.5% of our nation's economy. His plan would mean a $1 trillion increase to the already unsustainable spending growth of our nation's entitlement programs -- including a "down payment" toward government-controlled health care and education; a $1.5 trillion tax increase to further shackle the small businesses and investors we rely on to create jobs; a massive increase in energy costs for families via cap and trade. Moreover, the Obama plan would result in an exploding deficit, a doubling of the nation's debt in five years, and an increase of that debt to more than 82% of our nation's GDP by the last year of the budget. This approach will ultimately debase our currency and reduce the living standards of the American people.

Instead of doubling the debt in five years, and tripling it in 10, the Republican budget curbs the explosion in spending called for by the president and his party. Our plan halts the borrow-and-spend philosophy that brought about today's economic problems, and puts a stop to heaping ever-growing debt on future generations -- and it does so by controlling spending, not by raising taxes. The greatest difference lies in the size of government our budgets achieve over time (see nearby chart).

While our approach ensures a sturdy safety net for those facing chronic or temporary difficulties, it understands that the reliability of this protection and the other functions of government depend on a vibrant, free and growing private sector to generate the resources necessary for it.

Here's an outline of what we propose:

- Deficits/Debt. The Republican budget achieves lower deficits than the Democratic plan in every year, and by 2019 yields half the deficit proposed by the president. By doing so, we control government debt: Under our plan, debt held by the public is $3.6 trillion less during the budget period.

- Spending. Our budget gives priority to national defense and veterans' health care. We freeze all other discretionary spending for five years, allowing it to grow modestly after that. We also place all spending under a statutory spending cap backed up by tough budget enforcement.

- Energy. Our budget lays a firm foundation to position the U.S. to meet three important strategic energy goals: reducing U.S. dependence on foreign oil, deploying more clean and renewable energy sources free of greenhouse gas, and supporting economic growth. We do these things by rejecting the president's cap-and-trade scheme, by opening exploration on our nation's oil and gas fields, and by investing the proceeds in a new clean energy trust fund, infrastructure and further deficit reduction.

- Entitlements. Our budget also takes steps toward fulfilling the mission of health and retirement security, in part by making these programs fiscally sustainable. The budget moves toward making quality health care affordable and accessible to all Americans by strengthening the relationship between patients and their doctors, not the dictates of government bureaucrats. We preserve the existing Medicare program for all those 55 or older; and then, to make the program sustainable and dependable, those 54 and younger will enter a Medicare program reformed to work like the health plan members of Congress and federal employees now enjoy. Starting in 2021, seniors would receive a premium support payment equal to 100% of the Medicare benefit on average. This would be income related, so low-income seniors receive extra support, and high-income seniors receive support relative to their incomes -- along the same lines as the president's Medicare Part D proposal.

We strengthen the Medicaid safety net by converting the federal share of Medicaid payments into an allotment tailored for each state's low-income population. This will enhance state flexibility and sensitivity to spending growth.

In one of the most valued government programs -- Social Security -- our budget begins to develop a bipartisan solution to the program's pending bankruptcy by incorporating some of the reforms advocated by the president's budget director. Specifically, we provide for a trigger that would make small adjustments in the benefits for higher-income beneficiaries if the Social Security Administration determines the Social Security Trust Fund cannot meet its obligations. This is a modest but serious proposal which would not affect those in or near retirement, but is aimed at helping develop a consensus, across party lines, toward saving this important retirement program. We also assure that benefits for lower-income recipients are large enough to keep them out of poverty.

- Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. The proposal includes generous standard and personal exemptions such that a family of four earning $39,000 would not pay tax on that amount. In an effort to revive peoples' lost savings, and to create an incentive for risk-taking and investment, the budget repeals the capital gains tax through 2010 for all taxpayers.

On the business side, the budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%. This puts American companies in a better position to lead in the global economy, promotes jobs here at home, and strengthens worker paychecks.

We hope the administration and Democratic leaders in Congress do not distort and preach fear about our Republican plan. Some may be tempted to appeal to the darker emotions of envy and insecurity that surely run high in times like these. Yet we know Americans are stronger, smarter and prouder than this ploy assumes.

In the recent past, the Republican Party failed to offer the nation an inspiring vision and a concrete plan to tackle our problems with innovative and principled solutions. We do not intend to repeat that mistake. America is not the greatest nation on earth by chance. We earned this greatness by rewarding individual achievement, by advancing and protecting natural rights, and by embracing freedom. We intend to continue this uniquely American tradition.

Mr. Ryan, from Wisconsin, is the ranking Republican on the House Budget Committee.

Obama-DeFazio Exchange Noted

2009-03-31T07:53:00.001-05:00

[ http://www.politico.com/news/stories/0309/20684.html ]
The Politico also reports Obama "took eight questions from a crowd of about 150 Democratic lawmakers," including Rep. Peter DeFazio of Oregon, who "told Obama he wanted more infrastructure funding -- and Obama remembered DeFazio's vote against the stimulus." According to a source in the meeting, Obama said, "I know you think we need more for that because you voted against it. Don't think we're not keeping score, brother."

A Showdown on Voting Rights

2009-03-30T05:52:00.001-05:00

http://online.wsj.com/article/SB123820648702763441.html

Building Coalitions, One Issue at a Time

2009-03-17T05:47:00.000-05:00

NYT
By PETER BAKER
WASHINGTON — He has been called a socialist by angry critics on the right, an accommodationist by disappointed fans on the left and a pragmatist by his staff. President Obama, who normally eschews labels, pinned on one of his own last week by declaring himself a “New Democrat.”

After eight weeks in office, Mr. Obama has managed to satisfy or outrage nearly everyone on the ideological spectrum. But his once-murky governing philosophy is coming into sharper focus as he pivots from the opening days of his presidency to lay out a broader agenda for the rest of his term.

Obamaism, as it is shaping up, appears to be an amalgam of philosophies — a strong belief in the role of an activist government in shaping the economy and redistributing wealth, and a more centrist view of national security and at least some cultural issues. Mr. Obama has advanced the most expansive spending programs of any president in generations while moderating, but not wholly dismantling, the wartime policies of his predecessor and speaking to some of the values often embraced by conservatives.

The complex blend of ideas and instincts has proved advantageous in electoral politics, helping him win the presidency by blurring differences and appealing across lines. But now in office, it may force him to build different legislative coalitions depending on the issue, a tricky challenge given the scope of his ambition.

He has rallied liberals behind efforts to overhaul health care, tackle climate change and raise taxes on the rich. But he has challenged liberal orthodoxy on issues like linking teacher pay to performance and has won Republican support for sending 17,000 more troops to Afghanistan and pulling out of Iraq more gradually than the left wanted.

“The answer is yes, he is all of those things, but none of them in toto,” said Michael Berman, a longtime Democratic strategist. “I would likely describe him as a moderate who is instinctively comfortable with a variety of progressive positions. He is very hard to label. And my guess is that that is the way he likes it.”

That has sometimes confused opponents trying to pin down his philosophy. “You could pick any moment out of the last few weeks and make a diametrically opposite conclusion, so I just don’t know,” said Representative Paul D. Ryan, Republican of Wisconsin. “He just got here, and when he got to the Senate he started running for president. So nobody up here really knows him.”

Other presidents came to office with longer histories on the national stage and more defined ideological identities, even if actions in office did not always match their images. Ronald Reagan was the Cold Warrior denouncing government as the problem, not the solution. Bill Clinton was the original New Democrat nudging his party toward the center. George W. Bush was the compassionate conservative sanding the harsher edges off Newt Gingrich’s revolution.

Mr. Obama, with only two years in the Senate before starting his presidential campaign, arrived as something of a cipher — a “Rorschach test,” as he once put it — who often seemed to be whatever people wanted to him to be. While compiling a reliably liberal record, he made enough nods toward the other side that he put moderates and some conservatives at ease.

Just before his inauguration, 40 percent of Americans surveyed by The New York Times and CBS News considered Mr. Obama a liberal, while 34 percent called him a moderate and 13 percent a conservative. Even now, aides point to high approval ratings to argue that Americans are comfortable with his approach and that his critics are out of step.

“He’s not an ideologue,” said David Axelrod, his senior White House adviser. “He’s a pragmatist. He’s someone who’s interested in ideas that will work. Some may have their roots in one doctrine; some may have roots in another. But he’s not concerned about that. He’s less concerned about how he’s described than what he can accomplish.”

During a recent interview with The Times, Mr. Obama rejected the “socialist” tag, arguing that he was only returning top tax rates to where they were before Mr. Bush. Asked if “liberal” or “progressive” better defined his philosophy, he said, “I’m not going to engage in that.”

Days later, though, he did engage during a closed-door meeting with moderate House Democrats, later reported by Politico.com. Mr. Obama called himself a New Democrat, a term popularized under Mr. Clinton referring to Democrats who are fiscally conservative, socially liberal and relatively hawkish on foreign affairs.

“If you asked him, I think he’d put himself on the ideological scale as a New Democrat,” said Rahm Emanuel, the White House chief of staff. “But I think he’d say that doesn’t fully capture it.”

Others said Mr. Obama does not fit the New Democrat model. Where Mr. Clinton overhauled welfare and balanced the budget, Mr. Obama has overseen more than $1 trillion in spending to fix the economy, set aside $634 billion over 10 years to expand health coverage and proposed forcing industry to pay for pollution credits.

“President Obama is turning out to be utterly and conventionally liberal, embracing record-breaking spending programs and record-breaking tax increases and giving us a record-breaking deficit and record-breaking debt,” Peter Wehner, a former Bush aide, wrote on Commentary magazine’s Web site.

Liberals likewise do not view him as a New Democrat. “Here’s a label if you want one — pragmatic populist progressive,” said Justin Ruben, executive director of MoveOn.org, an influential group on the left. “It’s not fire-breathing populism. It doesn’t necessarily look the same. But what he’s saying is this has to work for everyone but in a pragmatic way.”

John D. Podesta, who led Mr. Obama’s transition, says the president has embraced the trial-and-error approach employed by predecessors. “That traces back to progressive roots in the kinds of experimentation in reform you saw under Teddy Roosevelt and the experimentation you saw under Franklin Roosevelt,” he said.

At the same time, Mr. Obama has upheld much of the Bush security architecture. While ordering the closing of the prison at Guantánamo Bay, Cuba, Mr. Obama endorsed some Bush positions on holding detainees, guarding state secrets and snatching terrorism suspects from other countries.

On the cultural front, Mr. Obama has liberalized policies on abortion and stem cell research, but also embraced issues favored by the other side, making “responsibility” a regular theme of his rhetoric and retaining Mr. Bush’s office of faith-based initiatives. And he has resisted calls by liberal allies to investigate the Bush team.

Senator Patrick J. Leahy, a Vermont Democrat who proposed such a “truth commission,” said he understood Mr. Obama’s position. “He has to govern the whole country,” Mr. Leahy said. “He has to bring us back together.”

Former Representative Tom Davis of Virginia, a Republican, said Mr. Obama was smart to avoid fights on secondary issues. “What’s really dominant right now is the economy,” Mr. Davis said. “You can’t afford to alienate people on the cultural front or the national security front while you’re fixing the economy.”

Why the GOP Can't Win With Minorities

2009-03-17T05:32:00.000-05:00

By SHELBY STEELE

Today conservatism is stigmatized in our culture as an antiminority political philosophy. In certain quarters, conservatism is simply racism by another name. And minorities who openly identify themselves as conservatives are still novelties, fish out of water.

Yet there is now the feeling that without an appeal to minorities, conservatism is at risk of marginalization. The recent election revealed a Republican Party -- largely white, male and Southern -- seemingly on its way to becoming a "regional" party. Still, an appeal targeted just at minorities -- reeking as it surely would of identity politics -- is anathema to most conservatives. Can't it be assumed, they would argue, that support of classic principles -- individual freedom and equality under the law -- constitutes support of minorities? And, given the fact that blacks and Hispanics often poll more conservatively than whites on most social issues, shouldn't there be an easy simpatico between these minorities and political conservatism?

Associated Press
'Compassionate conservatism' was clever -- as a marketing ploy.
But of course the reverse is true. There is an abiding alienation between the two -- an alienation that I believe is the great new challenge for both modern conservatism and formerly oppressed minorities. Oddly, each now needs the other to evolve.

Yet why this alienation to begin with? Can it be overcome?

I think it began in a very specific cultural circumstance: the dramatic loss of moral authority that America suffered in the 1960s after openly acknowledging its long mistreatment of blacks and other minorities. Societies have moral accountability, and they cannot admit to persecuting a race of people for four centuries without losing considerable moral legitimacy. Such a confession -- honorable as it may be -- virtually calls out challenges to authority. And in the 1960s challenges emerged from everywhere -- middle-class white kids rioted for "Free Speech" at Berkeley, black riots decimated inner cities across the country, and violent antiwar protests were ubiquitous. America suddenly needed a conspicuous display of moral authority in order to defend the legitimacy of its institutions against relentless challenge.

This was the circumstance that opened a new formula for power in American politics: redemption. If you could at least seem to redeem America of its past sins, you could win enough moral authority to claim real political power. Lyndon Johnson devastated Barry Goldwater because -- among other reasons -- he seemed bent on redeeming America of its shameful racist past, while Goldwater's puritanical libertarianism precluded his even supporting the 1964 Civil Rights Act. Johnson's Great Society grandly advertised a new American racial innocence. If it utterly failed to "end poverty in our time," it succeeded -- through a great display of generosity toward minorities and the poor -- in recovering enough moral authority to see the government through the inexorable challenges of the '60s.

When redemption became a term of power, "redemptive liberalism" was born -- a new activist liberalism that gave itself a "redemptive" profile by focusing on social engineering rather than liberalism's classic focus on individual freedom. In the '60s there was no time to allow individual freedom to render up the social good. Redemptive liberalism would proactively engineer the good. Name a good like "integration," and then engineer it into being through a draconian regimen of school busing. If the busing did profound damage to public education in America, it gave liberals the right to say, "At least we did something!" In other words, we are activists against America's old sin of segregation. Activism is moral authority in redemptive liberalism.

But conservatism sees moral authority more in a discipline of principles than in activism. It sees ideas of the good like "diversity" as mere pretext for the social engineering that always leads to unintended and oppressive consequences. Conservatism would enforce the principles that ensure individual freedom, and then allow "the good" to happen by "invisible hand."

And here is conservatism's great problem with minorities. In an era when even failed moral activism is redemptive -- and thus a source of moral authority and power -- conservatism stands flat-footed with only discipline to offer. It has only an invisible hand to compete with the activism of the left. So conservatism has no way to show itself redeemed of America's bigoted past, no way like the Great Society to engineer a grand display of its innocence, and no way to show deference to minorities for the oppression they endured. Thus it seems to be in league with that oppression.

Added to this, American minorities of color -- especially blacks -- are often born into grievance-focused identities. The idea of grievance will seem to define them in some eternal way, and it will link them atavistically to a community of loved ones. To separate from grievance -- to say simply that one is no longer racially aggrieved -- will surely feel like an act of betrayal that threatens to cut one off from community, family and history. So, paradoxically, a certain chauvinism develops around one's sense of grievance. Today the feeling of being aggrieved by American bigotry is far more a matter of identity than of actual aggrievement.

And this identity calls minorities to an anticonservative orientation to American politics. It makes for an almost ancestral resistance to conservatism. One's identity of grievance is flattered by the moral activism of the left and offended by the invisible hand of the right. Minorities feel they were saved from oppression by the left's activism, not by the right's discipline. The truth doesn't matter much here (in fact it took both activism and principle, civil war and social movement, to end this oppression). But activism indicates moral anguish in whites, and so it constitutes the witness minorities crave. They feel seen, understood. With the invisible hand the special case of their suffering doesn't count for much, and they go without witness.

So here stands contemporary American conservatism amidst its cultural liabilities and, now, its electoral failures -- with no mechanism to redeem America of its shames, atavistically resisted by minorities, and vulnerable to stigmatization as a bigoted and imperialistic political orientation. Today's liberalism may stand on decades of failed ideas, but it is failure in the name of American redemption. It remains competitive with -- even ascendant over -- conservatism because it addresses America's moral accountability to its past with moral activism. This is the left's great power, and a good part of the reason Barack Obama is now the president of the United States. No matter his failures -- or the fruitlessness of his extravagant and scatter-gun governmental activism -- he redeems America of an ugly past. How does conservatism compete with this?

The first impulse is to moderate. With "compassionate conservatism" and "affirmative access" and "faith-based initiatives," President George W. Bush tried to show a redemptive conservatism that could be activist against the legacy of America's disgraceful past. And it worked electorally by moderating the image of conservatives as uncaring disciplinarians. But in the end it was only a marketer's ploy -- a shrewd advertisement with no actual product to sell.

What drew me to conservatism years ago was the fact that it gave discipline a slightly higher status than virtue. This meant it could not be subverted by passing notions of the good. It could be above moral vanity. And so it made no special promises to me as a minority. It neglected me in every way except as a human being who wanted freedom. Until my encounter with conservatism I had only known the racial determinism of segregation on the one hand and of white liberalism on the other -- two varieties of white supremacy in which I could only be dependent and inferior.

The appeal of conservatism is the mutuality it asserts between individual and political freedom, its beautiful idea of a free man in a free society. And it offers minorities the one thing they can never get from liberalism: human rather than racial dignity. I always secretly loved Malcolm X more than Martin Luther King Jr. because Malcolm wanted a fuller human dignity for blacks -- one independent of white moral wrestling. In a liberalism that wants to redeem the nation of its past, minorities can only be ciphers in white struggles of conscience.

Liberalism's glamour follows from its promise of a new American innocence. But the appeal of conservatism is relief from this supercilious idea. Innocence is not possible for America. This nation did what it did. And conservatism's appeal is that it does not bank on the recovery of lost innocence. It seeks the discipline of ordinary people rather than the virtuousness of extraordinary people. The challenge for conservatives today is simply self-acceptance, and even a little pride in the way we flail away at problems with an invisible hand.

Mr. Steele is a research fellow at Stanford University's Hoover Institution.

Cool Whitehouse Link

2009-03-12T11:09:00.001-05:00

http://www.washingtonpost.com/wp-srv/politics/interactives/westwing/

Ruling Limits Scope of Voting Act

2009-03-10T05:54:00.001-05:00

Supreme Court Decision Could Make It Harder for Some Minority Candidates to Win

By JESS BRAVIN

WASHINGTON -- The Supreme Court narrowed the reach of the Voting Rights Act, ruling that a measure aimed at helping minorities elect their preferred candidates only applies in electoral districts where minorities number more than 50% of the voting-age population.

The decision could make it harder for some minority candidates to win election and for Southern Democrats, in particular, to draw friendly electoral boundaries after the 2010 Census.

The 5-4 ruling rejected arguments that the voting act could require legislative mapmakers to draw so-called crossover districts -- those with a substantial but less than 50% nonwhite population. In a crossover district, the idea is that minority voters would create alliances with white voters to elect their chosen candidates.

So Ordered: Supreme Court decisions so far this term.
The case, Bartlett v. Strickland, came from North Carolina, whose state constitution prohibits dividing counties when drawing state legislative districts. State officials believed that the Voting Rights Act, adopted in 1965 to counter the effective disenfranchisement of blacks across the South, required them to create a crossover district in southeastern North Carolina. Black voters, with 39% of the district's population, would then be able to elect their chosen candidate through an alliance with a segment of white voters.

Pender County, named for a Confederate general, challenged its division into two districts. The North Carolina Supreme Court ruled that the Voting Rights Act's Section 2, which bars practices that "deny or abridge the right of any citizen of the United States to vote on account of race or color," applies only when the minority group constitutes "a numerical majority of citizens of voting age." If undivided, Pender County would be within a state House district with a 35% African-American population.

Justice Anthony Kennedy, writing for himself, Chief Justice John Roberts and Justice Samuel Alito, found that 50% was the constitutional threshold. In a democracy, being able to command a majority of votes in a single district holds a "special significance," he wrote, and cohesive majorities of minority voters shouldn't be broken up to frustrate their political power. But "Section 2 does not guarantee minority voters an electoral advantage," Justice Kennedy wrote, and they have no claim to redistricting that seeks to help them build victorious coalitions with white voters. Such a mandate would be unworkable, he wrote, requiring courts "to make predictions or adopt premises" about race-based voting patterns "that even experienced polling analysts and political experts could not assess with certainty."

The court's five-justice right wing split over its reasoning. While Justice Kennedy's plurality preserved some room for minorities to claim their votes had been diluted, in other circumstances the two most conservative justices, Antonin Scalia and Clarence Thomas, contended that such suits should always be barred.

The plurality observed that "racial discrimination and racially polarized voting aren't ancient history. Much remains to be done to ensure that citizens of all races have equal opportunity to share and participate in our democratic processes and traditions." While in this case, North Carolina's whole-county provision interfered, in other instances legislatures would be free to create crossover districts if they chose, Justice Kennedy wrote. "Section 2 must be interpreted to ensure that continued progress."

Justice David Souter, writing for the four liberal dissenters, argued that the ruling did the opposite. A crossover district was better than a "majority-minority district" -- where a minority group holds more than 50% -- "precisely because it requires polarized factions to break out of the mold and form the coalitions that discourage racial divisions," he wrote. He was joined by Justices John Paul Stevens, Ruth Bader Ginsburg and Stephen Breyer.

The decision is likely to place even more power in the hands of state legislatures when they draw new election lines after the 2010 Census, said Richard Hasen, an election-law specialist at Loyola Law School, Los Angeles.

"There might be a slight Republican benefit to this decision," Prof. Hasen said.

Write to Jess Bravin at jess.bravin@wsj.com

Bill Activity

2009-02-13T12:50:00.001-06:00

Go to http://thomas.loc.gov/bss/111search.html

Select one bill from each of the following 110 and 109.
Click on the number and type a subject that interests you. Choose a bill.
Identify the following on the Bill – Number, title, Sponsor, and related bills. Then click on all congressional actions, and Record all of the movements of the bill through congress. Lastly, identify what happened to the bill – exp Bill passed and became law, killed in conference.

How Government Created the Financial Crisis

2009-02-10T05:11:00.000-06:00

Research shows the failure to rescue Lehman did not trigger the fall panic.
Article

By JOHN B. TAYLOR

Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.

David Gothard
The classic explanation of financial crises is that they are caused by excesses -- frequently monetary excesses -- which lead to a boom and an inevitable bust. This crisis was no different: A housing boom followed by a bust led to defaults, the implosion of mortgages and mortgage-related securities at financial institutions, and resulting financial turmoil.

Monetary excesses were the main cause of the boom. The Fed held its target interest rate, especially in 2003-2005, well below known monetary guidelines that say what good policy should be based on historical experience. Keeping interest rates on the track that worked well in the past two decades, rather than keeping rates so low, would have prevented the boom and the bust. Researchers at the Organization for Economic Cooperation and Development have provided corroborating evidence from other countries: The greater the degree of monetary excess in a country, the larger was the housing boom.

The effects of the boom and bust were amplified by several complicating factors including the use of subprime and adjustable-rate mortgages, which led to excessive risk taking. There is also evidence the excessive risk taking was encouraged by the excessively low interest rates. Delinquency rates and foreclosure rates are inversely related to housing price inflation. These rates declined rapidly during the years housing prices rose rapidly, likely throwing mortgage underwriting programs off track and misleading many people.

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Adjustable-rate, subprime and other mortgages were packed into mortgage-backed securities of great complexity. Rating agencies underestimated the risk of these securities, either because of a lack of competition, poor accountability, or most likely the inherent difficulty in assessing risk due to the complexity.

Other government actions were at play: The government-sponsored enterprises Fannie Mae and Freddie Mac were encouraged to expand and buy mortgage-backed securities, including those formed with the risky subprime mortgages.

Government action also helped prolong the crisis. Consider that the financial crisis became acute on Aug. 9 and 10, 2007, when money-market interest rates rose dramatically. Interest rate spreads, such as the difference between three-month and overnight interbank loans, jumped to unprecedented levels.

Diagnosing the reason for this sudden increase was essential for determining what type of policy response was appropriate. If liquidity was the problem, then providing more liquidity by making borrowing easier at the Federal Reserve discount window, or opening new windows or facilities, would be appropriate. But if counterparty risk was behind the sudden rise in money-market interest rates, then a direct focus on the quality and transparency of the bank's balance sheets would be appropriate.

Early on, policy makers misdiagnosed the crisis as one of liquidity, and prescribed the wrong treatment.

To provide more liquidity, the Fed created the Term Auction Facility (TAF) in December 2007. Its main aim was to reduce interest rate spreads in the money markets and increase the flow of credit. But the TAF did not seem to make much difference. If the reason for the spread was counterparty risk as distinct from liquidity, this is not surprising.

Another early policy response was the Economic Stimulus Act of 2008, passed in February. The major part of this package was to send cash totaling over $100 billion to individuals and families so they would have more to spend and thus jump-start consumption and the economy. But people spent little if anything of the temporary rebate (as predicted by Milton Friedman's permanent income theory, which holds that temporary as distinct from permanent increases in income do not lead to significant increases in consumption). Consumption was not jump-started.

A third policy response was the very sharp reduction in the target federal-funds rate to 2% in April 2008 from 5.25% in August 2007. This was sharper than monetary guidelines such as my own Taylor Rule would prescribe. The most noticeable effect of this rate cut was a sharp depreciation of the dollar and a large increase in oil prices. After the start of the crisis, oil prices doubled to over $140 in July 2008, before plummeting back down as expectations of world economic growth declined. But by then the damage of the high oil prices had been done.

After a year of such mistaken prescriptions, the crisis suddenly worsened in September and October 2008. We experienced a serious credit crunch, seriously weakening an economy already suffering from the lingering impact of the oil price hike and housing bust.

Many have argued that the reason for this bad turn was the government's decision not to prevent the bankruptcy of Lehman Brothers over the weekend of Sept. 13 and 14. A study of this event suggests that the answer is more complicated and lay elsewhere.

While interest rate spreads increased slightly on Monday, Sept. 15, they stayed in the range observed during the previous year, and remained in that range through the rest of the week. On Friday, Sept. 19, the Treasury announced a rescue package, though not its size or the details. Over the weekend the package was put together, and on Tuesday, Sept. 23, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified before the Senate Banking Committee. They introduced the Troubled Asset Relief Program (TARP), saying that it would be $700 billion in size. A short draft of legislation was provided, with no mention of oversight and few restrictions on the use of the funds.

The two men were questioned intensely and the reaction was quite negative, judging by the large volume of critical mail received by many members of Congress. It was following this testimony that one really begins to see the crisis deepening and interest rate spreads widening.

The realization by the public that the government's intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP?

It did not have to be this way. To prevent misguided actions in the future, it is urgent that we return to sound principles of monetary policy, basing government interventions on clearly stated diagnoses and predictable frameworks for government actions.

Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.

Mr. Taylor, a professor of economics at Stanford and a senior fellow at the Hoover Institution, is the author of "Getting Off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis," published later this month by Hoover Press.

The Blue Dogs bark

2009-02-05T06:27:00.001-06:00

By: Glenn Thrush and Patrick O'Connor
February 5, 2009 04:29 AM EST

House Speaker Nancy Pelosi has never enjoyed a firmer hold on the leash of her 255-member caucus — but the Blue Dogs are starting to strain against the chain.

Many of the 49 members of the fiscally conservative Blue Dog Coalition are going public with deep misgivings about the goodie-packed $819 billion stimulus package the House passed last week.

That’s hardly surprising, considering it’s a deficit-spending behemoth that inherently offends their balanced-budget sensibilities. But the Dogs are really growling about the way in which the bill passed the House — how Pelosi shepherded it through, and how she suspended “regular order” during the passage of the $700 billion financial markets bailout late last year.

“A lot of the Blue Dogs were unhappy with the [stimulus] bill and even angrier because they felt they had zero input — like their caucus doesn’t matter anymore because of the padded majority,” said a staffer for a prominent caucus member.

“I got in terrible trouble with our leadership because they don’t care what’s in the bill; they just want it to pass and they want it to be unanimous,” Tennessee Rep. Jim Cooper, the member deepest in Pelosi’s doghouse, told a Nashville radio program over the weekend.

“We’re just told how to vote. We’re treated like mushrooms most of the time.”

None of this is lost on Pelosi, a microscopic observer of intra-caucus politics — although it’s not clear if she’ll do anything to appease the group.

Pelosi confidant George Miller (D-Calif.) said Democratic leaders are “definitely paying attention” to the Blue Dogs’ concerns. But at her weekly press conference Wednesday, Pelosi made light of a reporter who tried to ask her about the topic.

“Speaking of the Blue Dogs,” the reporter began.

“Were we speaking about them?” Pelosi asked, before asserting that “a bill … will pass the House” no matter who opposed it.

In the past, the Dogs have barked more than bitten. But they could gain major leverage if Republicans continue to unanimously oppose the stimulus — and Pelosi needs every Democratic vote to pass the House-Senate compromise bill.

Members of the group are slated to meet with President Barack Obama next week and are expected to try to secure a commitment that Obama will tackle the deficit when the crisis passes, said Louisiana Rep. Charlie Melancon, a co-chairman of the Blue Dogs.

More significantly, Melancon will press the case to adopt new rules requiring both chambers to offset any new spending or tax cuts with program cuts or tax increases.

To that end, Blue Dogs are targeting a procedural vote prior to the reconsideration of the stimulus. If Republicans remain opposed to this legislation, the Blue Dogs would have more than enough votes to bring down the procedural measure, suspending consideration of the recovery package and embarrassing party leaders and the new president.

But, as usual, there’s a way out: Melancon hinted that his fellow Blue Dogs would be content with a vote and not passage of the so-called pay-go rules.

The Blue Dogs backed down from a confrontation last week, with an overwhelming majority of their members holding their noses to vote with Pelosi and the White House.

“We didn’t want to embarrass the president,” Melancon said.

But another possible area of friction looms: the inclusion of a new $70 billion alternative minimum tax extension — which most of the Dogs view as fiscal apostasy — as part of the rewritten stimulus expected to emerge from the Senate within the next week or so.

A top House aide said it’s unlikely the group will vote against the package based on the AMT.

Former House Minority Whip Roy Blunt (R-Mo.), a close observer of the Democratic caucus, sees a rising tide of frustration, but one that poses little threat to the imperial speakership anytime soon.

“They genuinely mean what they say, it plays well in their home districts — and it doesn’t make any difference around here,” he said. “To be honest with you, I think their power has diminished, not increased, since last year. They are divided, and they won’t buck this president, and he is going to back their leaders.”

To some extent, these larger fiscal and ideological issues are likely to be less fruitful for the group than a procedural matter — the restoration of regular order, which Pelosi has suspended to fast-track massive bills.

That issue, several leadership aides conceded, is more dangerous to Pelosi in the near term because it addresses basic issues of fairness within the larger Democratic caucus beyond the Blue Dogs.

A group of about 55 Democrats, many of them Blue Dogs, have been working with Majority Leader Steny H. Hoyer (D-Md.), a Blue Dog sympathizer, to prod Pelosi into restoring full committee and subcommittee legislative review.

“We strongly share the view that regular order is important to both the House institutionally and to moving the strongest possible agenda for the American people,” said a person close to Hoyer.

Pelosi is considering loosening her grip, aides say, but hasn’t decided when.

“Both speaker and leadership agree that it is preferable to use regular order, especially in non-emergency cases, and that has always been the intent,” said Pelosi spokesman Nadeam Elshami. “But the fact is, we have lost months in addressing the crisis because of the refusal of the previous administration to acknowledge the rapidly deteriorating conditions — now at a pace of about a half-million jobs lost each month.”

GOP Could Benefit From 2010 Redistricting

2009-01-28T09:16:00.000-06:00

The Hill says that the 2010 census could help the GOP on "their long road back to the majority" in the House. The census "could add multiple House seats to red-leaning states - as many as four districts to Texas and two each to Arizona and Florida. And it could subtract seats from blue-trending states like Michigan, New York, Ohio and Pennsylvania." The Hill adds, "Most of the states slated to gain seats in reapportionment next cycle feature Republican-controlled state legislatures and governor's mansions - the powerhouses that decide how to allocate congressional districts."

Rove subpoena

2009-01-27T05:04:00.000-06:00

A new subpoena was issued yesterday to Karl Rove, the former Bush White House aide, months after Rove deflected an earlier effort to compel his testimony about the firing of nine U.S. attorneys and other political disputes in around the Justice Department. It came from the House Judiciary Committee, which subpoenaed Rove on May 22. Rove rebuffed that summons, asserting that he was barred from testifying because of executive privilege. Yesterday's subpoena may test the limits of that power for the first time since George W. Bush left office, legal experts said. "Change has come to Washington, and I hope Karl Rove is ready for it," said committee chairman John Conyers Jr.

Finals

2009-01-19T13:57:00.001-06:00

Is there any way for us to narrow down the topics that will be covered in the free response questions?

Lobbyists Find Detour Around Latest Ethics Rules

2009-01-18T06:47:00.000-06:00

JANUARY 17, 2009
Article
By BRODY MULLINS and ELIZABETH WILLIAMSON

Lobbyists and corporations have found an opening in the latest congressional-ethics law that allows them to pay for special access to lawmakers and members of the incoming Obama administration during next week's inaugural festivities.

President-elect Barack Obama was a vocal champion of rules enacted last year that prohibit companies and lobbyists from buying anything worth more than $10 for lawmakers. But well-heeled interests have found a way to circumvent the ban by partnering with "state societies" that are throwing parties to celebrate Mr. Obama's inauguration.

These Washington-based nonprofits, whose members include lawmakers, congressional aides, lobbyists and executives from a given state, aren't subject to the ethics law -- even though their social and charitable activities are paid for with corporate money.

State societies' parties will help lobbyists skirt rules. Above, a 2005 inaugural ball sponsored by Texas State Society.
Mr. Obama's home state of Illinois, for example, is holding its own inaugural ball on Monday, the night before Mr. Obama is sworn in. It is offering executives of Motorola Inc., Exelon Corp., and the American Road and Transportation Builders Association a chance to pay big money to dine and pose for photos with Illinois lawmakers and incoming Transportation Secretary Ray LaHood, who recently retired as congressman from the state. The price: $5,000 to $55,000, event organizers said.

Hawaii, Mr. Obama's birthplace, has invited companies and lobbyists who pay as much as $25,000 into a roped-off VIP lounge at its Tuesday night affair, where they can mingle with influential policy makers. Among the drawing cards: Hawaii Sen. Dan Inouye, the new chairman of the Senate Appropriations Committee, and Gen. Eric Shinseki, a Hawaiian tapped to lead the Veterans Affairs Department.

Takers so far include Lockheed Martin Corp., which gave $25,000 for access to the party. Jeff Adams, a spokesman for Lockheed, said: "I can confirm that Lockheed Martin is co-sponsoring some of the unofficial inaugural events."

Gen. Shinseki and Mr. LaHood canceled their appearances at the galas after The Wall Street Journal contacted the transition team about them. Obama spokesman Tommy Vietor declined to comment on the balls.

State societies didn't seek an exemption to the ethics rules, but fall under exceptions that permit lawmakers to attend corporate-sponsored events if they are "widely attended" and considered part of a lawmaker's "official duty." Lawmakers also can accept free attendance at charitable events.

Most state-society members are residents who are living or working in Washington. The attendance of these home-state constituents qualifies lawmakers and the societies' events for ethics exemptions that permit companies to pick up the tab for food, drinks and entertainment. Tickets are free for members.

The ethics rules "don't affect us too much," said Mark Rhoads, a historian with the National Conference of State Societies, which represents all the state groups.

The inaugural balls can be boons to lawmakers. State societies bill their galas as celebrations of their elected leaders. The events also offer politicians a highly visible chance to mix with voters, corporate leaders and campaign donors. In all, more than two-dozen state societies are throwing inaugural balls paid for by corporations. Each sponsor gets access to members of Congress and state politicians through VIP rooms or smaller dinners beforehand.

"The bread and butter of being a sponsor is getting into that dinner, because certainly members of Congress are invited to that dinner," said Jenifer Sarver, historian for the Texas society.

The state balls aren't part of the formal inaugural celebrations. Mr. Obama's Presidential Inaugural Committee is hosting 10 official balls on Jan. 20, paid for by a mix of private donations and government funds. Mr. Obama has banned donations from corporations and lobbyists.

The Illinois society gave more than a dozen companies and lobbying firms that paid as much as $55,000 the option to have dinner with an "honored guest" -- including No. 2 Senate Democrat Richard Durbin and other members of its congressional delegation -- "on a first-come, first-served basis." Mr. LaHood planned to speak at the event, before he canceled. Sen. Durbin has the ball on his schedule but, an aide said, "If he makes it there he's not going to spend more than a few minutes."

The American Road Transportation Builders sponsored the event for the "positive connections" and because one of its lobbyists sits on the Illinois society's board, said David Bauer, a senior vice president for government affairs for the group. "It could be perceived as something that it's not," meaning an effort to influence lawmakers, Mr. Bauer said.

A Motorola spokeswoman said that as an Illinois-based company and state-society member, the telecommunications-equipment maker has served as a sponsor since 1997. An Exelon spokesman said the energy company's sponsorship "is an extension of its commitment to the development of sound public policies concerning energy, the environment, and a number of other issues at the federal, state, and local levels."

The Jan. 19 sold-out Illinois event at the Renaissance Washington D.C. Hotel is one of next week's most elaborate balls. The society raised more than $1 million from corporate sponsors, quadruple its 2005 take.

Obama 2.0

2009-01-14T09:21:00.000-06:00

Obama Said To Be Organizing Private Political Group On its front page, the Los Angeles Times[ ] reports that with President-elect Barack Obama set to take office, "his political team is quietly planning for a nationwide hiring binge that would marshal an army of full-time organizers to press the new president's agenda and lay the foundation for his reelection. The organization, known internally as 'Barack Obama 2.0,' is being designed to sustain a grass-roots network of millions that was mobilized last year to elect Obama." The Times adds that "one source with knowledge of the internal discussion said the organization could have an annual budget of $75 million in privately raised funds.

Vilsack's Seen As "Revolving Door" Example

2009-01-14T09:19:00.001-06:00

In an article titled, "Vilsack's Revolving Door On Energy," the Washington Times reports President-elect Barack Obama "promised to expand the nation's renewable energy sources and close the 'revolving door' that allows top officials to profit by moving between government and the businesses it regulates." But his "appointment of Tom Vilsack as agriculture secretary may test the limits of both of those promises. During his days as Iowa's governor, Mr. Vilsack provided a classic example of the revolving door that helps politicians benefit both politically and personally from their government contacts."

Touring the blogosphere

2009-01-08T13:54:00.002-06:00

Go to http://realclearpolitics.com/

Read and summarize one of the articles from today’s newspapers. Be sure to cite the title, author and newspaper/magazine it appeared in.

Now read comments, and “Join the Discussion.” List three comments that people make. Feel free to add one of your own!!! (and tell me . . . I’ll look for it.)

Now look at the following political blogs. For each one, briefly describe: a) one political debate that appears on today’s (or the last few days’) blog; b) the kind of people who seem to be visiting this blog site.

http://www.democraticunderground.com

http://www.instapundit.com/

http://www.dailykos.com/

http://powerlineblog.com

http://www.firedoglake.com/

http://intherightplace.blogspot.com/

Burris Assignment

2009-01-05T13:41:00.002-06:00

1. What does the U.S. Constitution say about Senators being able to block the appointment/seating of another Senator?
2. What does the Supreme COurt say about Senators being able to block the appointment/seating of another Senator?
3. Will the Senate Democrats be able to block the appointment/seating of Burris?

Cheney: War Powers Act violates Constitution

2008-12-21T15:58:00.001-06:00

By JEN DIMASCIO | 12/21/08 12:00 PM EST

'I think that what we've done has been totally consistent with what the Constitution provides for,' Cheney said in an interview with Chris Wallace on "Fox News Sunday."
Photo: AP

Outgoing Vice President Dick Cheney provided a vigorous defense of some of the most controversial aspects of the Bush presidency’s expansive definition of executive powers, including denying detainees accused of terrorism the right to a trials, aggressive interrogation techniques and increased domestic surveillance.

“I think that what we've done has been totally consistent with what the Constitution provides for,” he said in an interview with Chris Wallace on "Fox News Sunday."

That certainty extends to lingering disputes about giving detainees held at the Guantanamo Bay prison in Cuba access to trials.

Looking back on eight years in office, Cheney pointed to the absence of attacks on the nation since the Sept. 11, 2001, attacks and said although the commander-in-chief’s methods were not always popular, they were rooted in historical precedent and justified.

“First of all, you've got to remember that what we did after 9-11 was make a judgment that the terrorist attacks we were faced with were not a law enforcement problem, they were, in fact, a war. It was a war against the United States — and therefore, that we were justified in using all the means available to us to fight that war.

“And in a war, you capture the enemy and you hold them until the war is over with,” Cheney said. “You don't capture German prisoners of war and then put them on trial in World War II. That's not what we had to deal with here. But in terms of what kind of rights these folks had, they were not covered by the Geneva Convention. They were unlawful combatants.”

With regard to the powers available to the president on national security, Cheney, a former congressman, continues to disagree with Congress writing into statute limits on presidential power, and even deemed the 1973 War Powers Act "a violation of the Constitution."

“The War Powers Act is still in force out there today, that requires him to grant certain notifications to the Congress and give them the authority to supercede those by vote if they want to when it comes to committing troops,” Cheney said. “No president has ever signed off on the proposition that the War Powers Act is constitutional. I would argue that it is, in fact, a violation of the Constitution; that it's an infringement on the president's authority as the commander-in-chief. It's never been resolved, but I think it's a very good example of a way in which Congress has tried to limit the President's authority and, frankly, can’t.”

The interview concluded with a speed round that brought forth the second-in-command’s views on Osama bin Laden, a salty exchange with a Vermont senator and the future election prospects of Alaska Gov. Sarah Palin.

On failing to capture bin Laden since the 9-11 attacks, Cheney noted, “Capturing Osama bin Laden is something we clearly would love to do — there are 30 days left.”

But Cheney has no regrets about a 2004 incident in which he told Democratic Sen. Patrick Leahy to go “bleep” himself. “I thought he merited it at the time,” Cheney said. “And we've since, I think, patched over that wound and we're civil to one another now.”

Cheney seemed cool about the prospects of Alaska Gov. Sarah Palin.

“That's up to Sarah Palin whether or not she wants to pursue higher office again,” he said. “I don’t think she has any kind of lock on that. She’ll have to go out and earn it just as anybody else would have to.”

Voter Turnout Rate Said to Be Highest Since 1968

2008-12-16T05:12:00.000-06:00

Monday, December 15, 2008; Page A03
Ahead of today's vote of the electoral college to certify Barack Obama as the president-elect, a George Mason University professor announced yesterday that voter turnout in last month's presidential election reached the highest level in 40 years, with a record number of Americans casting ballots.

Final figures from nearly every state and the District of Columbia showed that more than 131 million people voted. A little more than 122 million voted in the 2004 presidential election.

This year's total amounts to 61.6 percent of eligible voters, the highest turnout rate since 1968, when Republican Richard M. Nixon defeated Democrat Hubert H. Humphrey, said Michael P. McDonald, a political science professor at GMU.

It was the third straight increase in presidential election turnout, encouraging news for those who have warned about voter apathy. Four years ago, 60.1 percent of eligible voters cast ballots.

"We seem to have restored the levels of civic engagement that we had in the 1950s and 1960s," McDonald said. "But we didn't break those levels."

McDonald's U.S. Elections Project calculated turnout rates based on the number of eligible voters among adult U.S. citizens. States finished certifying their election results this weekend, including California on Saturday.

Experts calculate turnout rates in different ways based on whom they consider eligible voters, a process that excludes noncitizens and, in most states, convicted felons. Regardless of the method, turnout fell short of many predictions, in part because voters in some Republican areas of the country were not as enthusiastic this year with Sen. John McCain (Ariz.) as the party's nominee as they were four years ago with President Bush, who went on to win a second term.

Bush's unpopularity after eight years in office, the nation's fatigue with the Iraq war and the worst economic crisis since the Great Depression -- coupled with Obama's message of change -- contributed to the increased turnout. Obama was also helped by a surge in black voters.

The number of registered Democrats jumped in many states, helping to propel Obama to a larger share of the vote than that for Sen. John F. Kerry, the 2004 Democratic nominee, in 44 states and the District of Columbia.

Voter turnout increased substantially in newly competitive states such as Virginia, Indiana and North Carolina, all of which went for Obama after decades of favoring Republican presidential candidates. Turnout also increased in some GOP-dominated states with large black populations, including Mississippi, South Carolina and Georgia.

North Carolina, which had competitive elections for president, governor and Senate, had the biggest increase in turnout from 2004 to 2008, going from 57.8 percent to 65.8 percent. Obama won the state by 14,177 votes, out of more than 4.3 million cast.

Minnesota, with a competitive Senate race that still has not been decided, had the highest turnout rate, even though it was slightly lower than in some years, at 77.8 percent. It was followed by Wisconsin, Maine, New Hampshire and Iowa.

West Virginia and Hawaii tied for the lowest turnout rate, at 50.6 percent. Arkansas, Utah and Texas came close.

In all, the turnout rate increased in 33 states and the District of Columbia.

Turnout dropped in some states that did not have competitive presidential contests, such as Utah and Oregon. Oregon had been a battleground in previous presidential elections, and the state had a competitive Senate race.

Is This Anything New?

2008-12-09T15:49:00.000-06:00

Illinois has long legacy of public corruption
At least 79 elected officials have been convicted of wrongdoing since 1972
msnbc.com staff and news service reports

Illinois’ official slogan is the “Land of Lincoln,” but an equally apt descriptor would be the “Land of Greased Palms.”
The state, Cook County and its governmental seat, Chicago, have a long history of corruption by elected and appointed officials.
The culture of corruption dates back to the late 19th century, when a gambling-house owner named Michael Cassius McDonald created the city's first political machine, establishing a model in which officials would distribute contracts, jobs and social services in exchange for political support, according to a scholarly history of organized crime in Chicago by Robert Lombardo, a sociology professor and former Chicago and Cook County police officer.
Its persistence was documented in Sept. 7, 2006 by the Chicago Sun-Times, which reported that at least 79 current or former Illinois, Chicago or Cook County elected officials had been found guilty of a crime by judges, juries or their own pleas since 1972. The paper provided this tally of the tarnished: three governors, two other state officials, 15 state legislators, two congressmen, one mayor, three other city officials, 27 aldermen, 19 Cook County judges and seven other Cook County officials.
The article noted that so many aldermen had been jailed that the newspaper ran a front-page-story in 1991 when the year passed with none being indicted or convicted.
Serving timeThe ranks of imprisoned pols include three former Illinois governors — George Ryan, Dan Walker and Otto Kerner Jr.
Ryan, a rare Republican in the heavily Democratic state and Gov. Rod Blagojevich’s predecessor, is serving a six-year prison sentence after being convicted in April 2006 on racketeering and fraud charges. A decade-long investigation began with the sale of driver's licenses for bribes and led to the conviction of dozens of people who worked for Ryan when he was secretary of state and governor.
The probe began when federal investigators looking into a deadly crash in Wisconsin that killed six children uncovered a scheme in Ryan's secretary of state's office in which unqualified truck drivers obtained licenses through bribes. As the Associated Press reported upon his conviction: "The probe expanded over the next eight years into a wide-ranging corruption investigation that eventually reached Ryan in the governor's office."
Walker’s crimes were committed after he served as governor from 1973 to 1977. The Democrat and World War II and Korean War veteran was convicted of fraud related to his stewardship of the First American Savings & Loan Association of Oak Brook. News reports at the time indicated that he received more than $1 million in fraudulent loans for his business and repairs on his yacht, the "Governor's Lady."
The federal government later bailed out the bankrupt S&L and Walker served 18 months of a seven-year sentence in federal prison.
Kerner, a Democrat who was governor from 1961 to 1968 and later served as a judge on the U.S. Court of Appeals, was found guilty in 1973 of bribery, conspiracy, perjury and related charges for taking payoffs from a racetrack operator in exchange for choice racing dates and two expressway exits to funnel fans to the horse races.
The scandal erupted because Marge Lindheimer Everett, manager of Arlington Park and Washington Park racetracks, deducted the value of the stock she gave on her federal income tax returns under her own theory that bribery was an ordinary and necessary business expense in Illinois.
After resigning his judgeship, Kerner was sentenced to three years in federal prison and fined $50,000.
A history of graftChicago, with its long history as a center of vice and organized crime, has had its share of official graft.
One of the most notorious alleged recipients was never convicted of any crime.
William “Big Bill” Thompson, who served as mayor from 1915 to 1923 and again from 1927 to 1931, was the last Republican to serve as mayor of the “City of Broad Shoulders.” He returned to office the second time with the support of gangster Al Capone, pledging to clean up organized crime in the city but instead targeting reformers.
Upon his defeat in 1931 the Chicago Tribune leveled the harshest accusations against Thompson in an editorial:
“For Chicago Thompson has meant filth, corruption, obscenity, idiocy and bankruptcy,” the newspaper said. “.... He has given the city an international reputation for moronic buffoonery, barbaric crime, triumphant hoodlumism, unchecked graft, and a dejected citizenship. … He made Chicago a byword for the collapse of American civilization."
Upon his death, two safe-deposit boxes in his name containing nearly $1.5 million in cash reportedly were discovered.
The Daley legacyInvestigations of possible mayoral misbehavior have been commonplace in recent years.
Current Mayor Richard Daley's administration has been investigated for corruption. In a federal probe that is ongoing, Robert Sorich, Daley's patronage chief, was convicted in 2006 for rewarding the mayor's political allies with city jobs and promotions. Daley has not been accused of wrongdoing.
His father, the late Mayor Richard J. Daley, built the once-mighty machine that doled out jobs and favors in exchange for support for Democrats on Election Day. He was never charged with criminal wrongdoing, but several of his high-ranking aides were sent to prison for political patronage.
Other state officials have apparently prospered from their positions of public trust without ever facing trial.
A large cache of cash surfaced in 1971, shortly after the death of Illinois Secretary of State Paul Powell, who served 30 years as a state legislator before assuming his final post.
Time magazine reported afterward that the executor of Powell’s estate, John S. Rendleman, found that the 68-year-old Powell, who never earned more than $30,000 a year during his career in public service, left behind an estate worth more than $2 million, including $800,000 crammed into shoe boxes, briefcases and strongboxes in the closet of his hotel suite in Springfield, Ill.
Congressional scandalCriminal charges also have followed Illinois politicians to Washington.
Former Illinois Rep. Daniel Rostenkowski, who long served as the Democratic chairman of the powerful House Ways and Means Committee, pleaded guilty in 1996 to mail fraud in connection with a scheme in which he traded postal stamps for cash, padded his payroll with nonexistent workers and used his account at the House stationery shop to buy gifts. He served 15 months in prison and paid a $100,000 fine.
Rostenkowski was pardoned in 2000 by former President Bill Clinton.

Quid Pro Quo!

2008-12-09T15:48:00.000-06:00

Feds: Governor tried to sell Obama's seat
Blagojevich arrested, accused of 'corruption crime spree' over appointment
NBC News and news services

CHICAGO - Illinois Gov. Rod Blagojevich embarked on a "corruption crime spree" and tried to benefit from his ability to appoint President-elect Barack Obama's replacement in the U.S. Senate, federal officials said Tuesday.
At a news conference in Chicago on Tuesday, U.S. Attorney Patrick Fitzgerald called it a sad day for the citizens of Illinois and alleged that the governor tried to "auction off" the Senate seat "to the highest bidder."
He said the alleged behavior "would make (Abe) Lincoln roll over in his grave."
Blagojevich had been arrested hours earlier and was released later in the day after posting a $4,500 bond.
A 76-page FBI affidavit said the 51-year-old Democrat was intercepted on court-authorized wiretaps over the last month conspiring to sell or trade the vacant Senate seat for personal benefits for himself and his wife, Patti.
Fitzgerald said federal investigators bugged Blagojevich's campaign offices and placed a tap on his home phone.
In Illinois, the governor selects a successor when there is a mid-term Senate vacancy. Obama resigned from the Senate soon after winning the Nov. 4 presidential election.
'Truly a new low'Fitzgerald accused Blagojevich of "appalling conduct" and said the governor "has taken us to a truly new low." He alleged that the governor wanted "tangible and up front" cash in return for appointing Obama's successor.
"He wasn't against a corrupt deal, he was against being stiffed in a corrupt deal," Fitzgerald added.
Fitzgerald said "Blagojevich put a 'for sale' sign on the naming of a United States senator."
Federal prosecutors have investigated Blagojevich's administration for at least three years. The governor has repeatedly denied any wrongdoing.
Robert Grant, special agent-in-charge of the Chicago office of the FBI, said colleagues had been left "disgusted and revolted" by the case.
Fitzgerald said federal officials were making "no allegations" that Obama himself was "aware of anything" in connection with the case.
Obama said Tuesday he was saddened by the allegations and said he had no contact with the governor or his office on the matter.
Obama added he will have no further comment on the matter because it is an ongoing investigation.
Obama resigned his Senate seat after winning the presidency. The governor by law picks Obama's replacement.
'I want to make money'The affidavit contends Blagojevich discussed getting a substantial salary for himself at a non-profit foundation or an organization affiliated with labor unions. It also says Blagojevich talked about getting his wife placed on corporate boards where she might get $150,000 a year in director's fees.
The affidavit also quotes Blagojevich as saying in one conversation that "I want to make money."
Blagojevich and John Harris, the governor's chief of staff, were each charged with conspiracy to commit mail and wire fraud and solicitation of bribery.
The FBI affidavit alleges that Blagojevich also sought promises of campaign cash, as well as a cabinet post or ambassadorship in exchange for his Senate choice.
Blagojevich is accused of saying on Nov. 3 that if he was not going to get anything of value for the open seat, then he would appoint himself to the post.
"I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain," the affidavit quotes the governor as saying.
Senate seat is a 'valuable thing'He noted becoming a U.S. senator might remake his image for a possible presidential run in 2016, according to the affidavit.
The affidavit quotes Blagojevich telling an adviser later that day that a Senate seat "is a [expletive] valuable thing, you just don't give it away for nothing."
In a conversation with Harris on Nov. 4, the day of the election, Blagojevich is alleged to have compared his situation to that of a sports agent shopping a potential free agent to the highest bidder.
On Nov. 5, Blagojevich allegedly told an adviser: "I've got this thing and it's [expletive] golden, and, uh, uh, I'm just not giving it up for [expletive] nothing. I'm not gonna do it."
On Nov. 7, while talking on the phone about the Senate seat with Harris and an adviser, Blagojevich said he needed to consider his family and that he is "financially" hurting, the affidavit states.
Harris allegedly said that they were considering what would help the "financial security" of the Blagojevich family.
The complaint alleges that the governor stated, "I want to make money," adding later that he is interested in making $250,000 to $300,000 a year.
The affidavit outlined a Nov. 10 call among Blagojevich, his wife, Harris and a group of advisers in which Harris allegedly suggested working out an agreement with the Service Employees International Union.
Under the plan, Blagojevich would appoint a new senator who would be helpful to the president-elect and in turn get a job as head of Change to Win, a group formed by the union. The union would get an unspecified favor from Obama later.
Nothing in the court papers suggested Obama had any part in the discussion. In fact, Blagojevich allegedly said in the same conversation that Obama most likely would not appoint him as secretary of health and human services or to an ambassadorship because of the negative publicity that has surrounded the governor for three years.
One day later, according to the affidavit, Blagojevich allegedly told an associate he knew Obama wanted a specific Senate candidate but “they’re not going to give me anything except appreciation. [Expletive] them."
Among those being considered for the Senate post: U.S. Reps. Jesse Jackson Jr., Danny Davis, Jan Schakowsky and Luis Gutierrez; Illinois Senate President Emil Jones and Illinois Department of Veterans Affairs Director Tammy Duckworth.
Chicago Tribune allegedly pressuredAccording to a federal criminal complaint, Blagojevich also was charged with illegally threatening to withhold state assistance to the Tribune Co., the owner of the Chicago Tribune, in the sale of Wrigley Field. In return for state assistance, Blagojevich allegedly wanted members of the paper's editorial board who had been critical of him fired.
Blagojevich was quoted in court papers as telling Harris in a profanity laced Nov. 4 conversation that his recommendation to Tribune executives was to fire the editorial writers “and get us some editorial support.”
Harris is quoted as telling the governor Nov. 11 that an unnamed Tribune Owner, presumably CEO Sam Zell, “got the message and is very sensitive to the issue.”
The affidavit said Harris quoted a Tribune financial adviser as saying cuts were coming at the newspaper and “reading between the lines he’s going after that section,” apparently meaning editorial writers. Blagojevich is quoted as saying: “Oh, that’s fantastic.”
“Wow,” Blagojevich allegedly replied. “Keep our fingers crossed. You’re the man. Good job, John.”
Harris allegedly told Blagojevich in his conversation with the financial adviser he had singled out deputy editorial page editor John McCormick as “somebody who was the most biased and unfair.”
After hearing that, Blagojevich allegedly stressed to the head of a Chicago sports consulting firm that it was important to provide state aid for a Wrigley Field sale.
Corruption in the Blagojevich administration has been the focus of a federal Operation Board Games involving an alleged $7 million scheme aimed at squeezing kickbacks out of companies seeking business from the state.
Federal prosecutors have acknowledged they're also investigating "serious allegations of endemic hiring fraud" under Blagojevich.
Political fundraiser Antoin "Tony" Rezko, who raised money for the campaigns of both Blagojevich and Obama, is awaiting sentencing after being convicted of fraud and other charges.
Blagojevich's chief fundraiser, Christopher Kelly, is due to stand trial early next year on charges of obstructing the Internal Revenue Service.
According to Tuesday's complaint, Blagojevich schemed with Rezko, millionaire-fundraiser turned federal witness Stuart Levine and others to get financial benefits for himself and his campaign committee.
Federal prosecutors said Blagojevich and the chairman of his campaign committee have been speeding up corrupt fundraising activities in the last month to get as much money as possible before the end of the year when a new law would curtail his ability to raise contributions from companies with state contracts worth more than $50,000.
According to the affidavit, agents learned Blagojevich was seeking $2.5 million in campaign contributions by the end of the year, with a large part allegedly to come from companies and individuals who have gotten state contracts or appointments.
Blagojevich, in his second term, is the latest in a string of Illinois governors to run afoul of the law. His immediate predecessor, George Ryan, is in jail following a federal corruption conviction.
Would-be reformerBlagojevich took the chief executive's office in 2003 as a reformer promising to clean up Ryan's mess.
Ryan, a Republican, is serving a 6-year prison sentence after being convicted on racketeering and fraud charges. A decade-long investigation began with the sale of driver's licenses for bribes and led to the conviction of dozens of people who worked for Ryan when he was secretary of state and governor.
FBI spokesman Frank Bochte said federal agents arrested the governor and Harris simultaneously at their homes at 6:15 a.m. and took them to the Chicago FBI headquarters.
Bochte said he did not know if either man was handcuffed or if the governor's family was at their North Side home at the time of his arrest. He did say Blagojevich and Harris both were given time to get dressed before being taken away.
He also did not have any details about Blagojevich's arrest, only that he was cooperative with federal agents.
"It was a very calm setting," he said.
The governor was to appear later Tuesday before U.S. Magistrate Judge Nan Nolan to answer the charges.

Big Three Bailout

2008-11-24T22:04:00.001-06:00

November 19, 2008, 8:51 pm — New York Times
A ‘Big Three’ Failure and U.S. Auto Making
By Catherine Rampell
Earlier this week I wrote about how many jobs might initially be destroyed in a major contraction of the Detroit Three auto companies. I promised to follow up on the question of how many of those jobs might be recovered by foreign manufacturers that step in to fill the void. So here goes.
Some argue that the jobs shed by the Big Three would be shipped abroad — where labor is cheaper — never to return to America again. A contraction of the Detroit Three would represent the end of the American industrial base, they say. That’s not necessarily the case.
Many of the “foreign” cars Americans buy are actually built right here in the United States. And there are quite a few reasons that foreign car companies would most likely expand their production here if they grabbed more market share from the Big Three.
First, labor costs, while important, are not as big an issue as most Americans think. While much of the debate about the auto industry has concentrated on the expensive wages given to unionized workers, labor represents a surprisingly small portion of the cost of producing cars. Only about 10 percent of the cost of building a car comes from direct labor costs, according to Kim Hall, director of the Automotive Communities Program at the Center for Automotive Research (C.A.R. is a nonprofit research center with ties to industry, labor, government and academia).
Second, it’s expensive to ship huge numbers of big, heavy cars around the world, especially when fuel costs are high. Producing here saves companies money.
“All the automotive manufacturers in the world want to produce here because this is where they sell,” says Mark J. Perry, an economist at the University of Michigan-Flint.
Third, producing in the same market they sell in allows carmakers to hedge against currency exchange risks. In many ways it’s simpler, and more predictable, to manufacture and sell in one currency.
Fourth, manufacturing here allows companies to keep their fingers on the pulse of American consumer demands. Susan Helper, an economist at Case Western Reserve University, notes that a company that manufactures where it sells can get a better feel for how consumers use its product.
Fifth, manufacturing in America earns some good will among American consumers. “It’s a way to show that you are a good citizen in the country where you sell your products,” says John Paul MacDuffie, a management professor at the Wharton School of the University of Pennsylvania and a co-director of the International Motor Vehicle Program.
Sixth, foreign automakers would probably be able to purchase existing plants at bargain-basement prices –- and these plants would come with existing pools of trained human capital.
Given all these reasons, plus the assumption that Americans will continue to demand millions of cars each year, it would seem that jobs from American-owned car companies could easily make the transition to jobs at foreign-owned car companies. Right?
Maybe not, at least not in the near-term.
There are a few forces that would hinder foreign auto expansion in the United States.
The most immediate hurdle would be the supplier problem. The companies that supply parts to the Big Three also supply parts to foreign-owned plants in the United States. These suppliers have very thin margins, according to Francisco Veloso, a professor in the department of engineering and public policy and an auto industry expert at Carnegie Mellon University. This means that the failure of one automotive company could bring down its suppliers, which would then not be able to continue selling parts to their healthier customers.
Daimler, for example, makes the Mercedes-Benz M-Class in Alabama, Professor Helper says. “The entire cockpit is delivered by Delphi, which would probably be liquidated if G.M. failed,” she says, noting that a cockpit module supplier is “not as easily replaced” as an office stapler supplier.
Given the bad economy, it could take months or years before suppliers fully recover and then turn to meeting the needs of the companies that want to increase their production in the United States. For these reasons, Honda has expressed support for government aid to the Big Three.
Foreign automakers that successfully expand in the United States also may not want to hire former Big Three employees. While there are isolated instances of foreign companies scooping up facilities and human capital from domestically owned plants, many foreign automakers will probably start their own plants and create new work forces, for a few reasons.
One is a perception that in places where a Big Three manufacturing presence remains, residents and public officials will be prejudiced against the foreign interlopers (and be less cooperative on public infrastructure projects, for example, desired by foreign companies).
A second reason is the fact that some automakers will probably want to build their own plants, designed to their own technological specifications –- plants whose construction would probably be subsidized by states looking to attract new employers. Some of those states may also be right-to-work states, meaning that companies won’t have to pay the higher wages demanded by organized labor. (Many foreign-owned car companies have opened shop in Southern states for just this reason.)
Finally, there may be a perception that Big Three employees are somehow “contaminated” by having worked at a union plant or in American manufacturing, Professor Helper says. (This is a view that, Professor Helper argues, has been disproved by a plant that successfully went from “being one of G.M.’s worst plants to one of Toyota’s best with essentially same work force.”)
All this means that Americans whose jobs would be destroyed by a contraction in one or all of the Big Three would not necessarily be the same Americans whose jobs would be created by an expansion of one or all of the Big Three’s foreign-owned competitors. And those who would lose their jobs now would probably have trouble finding work immediately during a recession.
Some auto-related jobs, moreover, would probably never be recovered if foreign auto companies completely replace domestic companies.
Yes, some auto manufacturing jobs will inevitably be lost to more advanced (and more productive) technologies, but that would be the case even if American plants retain their domestic ownership. I’m talking about the jobs in engineering, research, design, administration, advertising and other mostly white-collar positions that can be performed in foreign companies’ home countries.
“All the development of the Prius battery was done in Japan,” says Professor Veloso. He says a foreign company expanding in the United States “probably wouldn’t have too much need for the whole G.M. Tech Center. They might pick up a few people, but that’s it.”

In the year 2025...

2008-11-21T06:36:00.000-06:00

Report predicts U.S. decline, Russia rise
U.S. trend analysis cites Moscow oil boom, dollar woes and al-Qaida's decay
The Associated Press
updated 5:07 a.m. CT, Fri., Nov. 21, 2008

UpdateTimeStamp('633628624685300000');
WASHINGTON - Global warming could be a boon to Russia, a European country could be overrun by organized crime and the U.S. and its dollar could further decline in importance during the next two decades, says a U.S. intelligence report with predictions for the world in 2025.
The report, Global Trends 2025, is published every four years by the National Intelligence Council to give U.S. leaders insight into looming problems and opportunities.
The report says the warming earth will extend Russia and Canada's growing season and ease their access to northern oil fields, strengthening their economies. But Russia's potential emergence as a world power may be clouded by lagging investment in its energy sector, persistent crime and government corruption, the report says.
Analysts also warn that the same kind of organized crime plaguing Russia could eventually take over the government of an Eastern or Central European country. The report is silent on which one.
It also says countries in Africa and South Asia may find themselves unstable and ungoverned, as state regimes collapse or wither away under security problems and water and food shortages brought about by climate change and a population increase of 1.4 billion.
The potential for conflict will be greater in 2025 than it is now, as the world's population competes for declining and shifting food, water and energy resources.
Al-Qaida's decayDespite a more precarious world situation, the report also says al-Qaida's terrorist franchise could decay "sooner than people think." It cites its growing unpopularity in the Muslim world, where it kills most of its victims.
"The prospect that al-Qaida will be among the small number of groups able to transcend the generational timeline is not high, given its harsh ideology, unachievable strategic objectives and inability to become a mass movement," the report states.
The report forecasts a geopolitical rise in non-Arab Muslim states outside of the Middle East, including Turkey and Indonesia, and says Iran could also be a central player in a new world order if it sheds its theocracy.
Decline in America's global powerThe report, a year in the making, also suggests the world may complete its move away from its dependence on oil, and that the U.S. dollar, while remaining important, will decline to "first among equals" among other national currencies.
U.S. global power also will likely decline, as Americans' concerns about putting resources into solving domestic problems may cause the United States to pull resources from foreign and global problems.

The war of the regions?

2008-11-19T05:42:00.001-06:00

From Politico.com
By: Joel Kotkin and Mark Schill
November 18, 2008 04:12 PM EST

It’s time to throw away red, blue and purple, left and right, and get to the real, traditional crux of American politics: the battle for resources among the country’s many diverse regions. How President-elect Barack Obama balances these divergent geographic interests may have more to do with his long-term success than his ideological stance or media image will. Personal charm is transitory; the struggle for money and jobs has a more permanent character.

To succeed as president, Obama must find a way to transcend his own very specific geography — university-dominated, liberal, de-industrialized Chicago — and address the needs of regions whose economies still depend on agriculture, energy and industry. In the primaries, most of these regions voted for Hillary Rodham Clinton.

The geographic concentration of manufacturing prepared by Praxis Strategy Group presents a particularly complex road map for the new president. Although Indiana and Wisconsin top our list of states most dependent on manufacturing employment, the next four are either in the Great Plains — Iowa — or in the South: Arkansas, Alabama and Mississippi. In fact, eight of the top 13 industrial states, on a per capita basis, are located in the South; only one of these manufacturing hotbeds, North Carolina, supported the new president.

In terms of industry, the auto industry represents the most difficult challenge. Great Lakes political leaders, such as Michigan’s clueless Gov. Jennifer Granholm, now a top Obama adviser, will twist the new president’s arm to bail out the crippled U.S.-based auto manufacturers, essentially socializing the industry. Yet in bailing out Detroit, Obama could undermine a growing, thriving auto complex developing in the old Confederacy and along the southern rim of the Midwest.

Although also hit by the recession, companies like Toyota, Honda, Hyundai, Mercedes and BMW have brought unprecedented prosperity to these areas, which include some of the historically poorest regions of the country. This is also where many of the most fuel-efficient “green” vehicles in America are being produced. The workers they employ may not belong to the unions so influential among liberals, but their interests matter mightily to the Democrats as well as the Republicans who represent them.

Energy issues may be even more challenging from a regional perspective. The nation’s fossil fuel resources are heavily concentrated in the West and the South, led by Wyoming, Alaska, West Virginia, Oklahoma, Louisiana, New Mexico, Texas, Montana, North Dakota and Kentucky. Obama took only one of these states: New Mexico. The new president’s statements against coal and other fossil fuels were not popular in areas where they provide not only reliable, low-cost energy but also well-paying jobs.

Not just oil riggers, heartland miners and coal companies have an interest in an expansive approach to energy policy. If enacted, Obama’s cap-and-trade proposals could raise the cost of Midwestern energy, largely coal-based, by between 20 percent and 40 percent, according to a recent study by Bernstein Research. This would create yet another disadvantage for U.S. manufacturers, particularly against largely unregulated competitors in developing countries.

In contrast, reliable and affordable domestic energy supplies from all sources — including nuclear facilities — would be a major boon for manufacturers across the country. Obama must recognize that many states with coal and oil reserves also possess strong wind and bioenergy potential. He should favor expansion of both kinds of energy. The resulting lower-cost electrical power could boost an incipient electric car industry that may be the last, best hope for hard-pressed General Motors.

Here’s another case where regional politics could prove sticky for Obama: Any attempt to boost nonrenewable energy supplies would run into opposition from the largely coastal-based green lobby. These groups generally oppose virtually any fossil fuel development, and most remain hostile to nuclear power. While they may be well-intentioned, increasingly restrictive environmental regulations on manufacturing could push production to parts of the world with dirtier industries and overreliance on shipping long distances. The resulting net reduction in carbon emissions would seem somewhat ephemeral.

The current recession and falling energy prices could provide political cover for Obama to shift his energy policies. Hard times have already eroded support for strict curbs on greenhouse gases in Europe, and strong advocacy for carbon taxes clearly hurt the Liberal Party in the recent Canadian elections. A similar reaction could also emerge in this country, except in the deepest blue coastal enclaves.

Finally, there remains one other regional constituency that must be addressed: the financial community. Our analysis shows securities and commodity trading industries to be regionally concentrated, with the largest clusters in greater New York and Vice President-elect Joe Biden’s home state of Delaware, followed by New Hampshire and Illinois. They are all now bedrock “blue states” and generally backed Obama by large margins.

Yet this presents yet another regional dilemma. Simply put, the rest of the country detests Wall Street. They see the bailout benefiting big players in cities such as New York or Chicago but doing little for smaller banks that do much of their lending outside the big money centers. This sentiment cuts across party lines, particularly in the West and South, as the initial anti-bailout votes in the House showed.

All presidents face such regional challenges in governing this vast and diverse country. Weak politicians, such as President George W. Bush, tend to fall back on an ever-narrower band of regional alliances that, once threatened, easily break apart.

Transformative leaders, such as Presidents Franklin D. Roosevelt and Ronald Reagan, learn to extend their appeal to as many industries and regions as possible. In the next four years, we will get to see what kind of leader Obama intends to be.

Joel Kotkin is a presidential fellow at Chapman University and executive editor of www.newgeography.com. Mark Schill, a principal at the Praxis Strategy Group, is the site’s managing editor.

GM Bankruptcy Continued

2008-11-15T06:02:00.002-06:00

Below is a thread from an MIT Blog I found about the GM issue if you are interested.

http://baselinescenario.com/2008/11/11/auto-industry-gm-bailout/#more-1161

Rift Over Key Committee Post Threatens To Distract Democrats From Agenda

2008-11-10T07:12:00.001-06:00

By GREG HITT

WASHINGTON -- A fight is intensifying over whether Democratic Rep. John Dingell should continue to head the powerful Energy and Commerce Committee, fraying unity among House Democrats soon after they widened their majority in the chamber.

Rep. Henry Waxman of California said the day after the Nov. 4 election that he would challenge Mr. Dingell for the chairmanship. The fight is forcing rank-and-file Democrats to choose sides, and underscores the tensions within the Democratic caucus on high-profile issues such as climate change.

Mr. Dingell, of Michigan, has favored a market approach toward reducing the greenhouse-gas emissions that many scientists say contribute to global warming. Mr. Waxman has pushed for a more-aggressive approach toward cuts.

John Dingell (D., Mich.) is the House's longest-serving current member.
The tiff threatens to distract House Democrats from implementing the policy goals of President-elect Barack Obama and their party. "Congressional committee battles can be more vicious than presidential elections, and can leave lasting scars that can directly affect a president's program," said Larry Sabato, a political-science professor at the University of Virginia.

When asked whether Mr. Waxman's bid is undermining party unity, Waxman spokeswoman Karen Lightfoot said Mr. Waxman believes he is best suited to lead the committee. "Rep. Waxman is running for chairman so he can help President-elect Obama move his legislative agenda," she said. Dingell spokeswoman Jodi Seth said, "This is unhealthy and in no way benefits Democrats or those the party is working to serve."

With Congress out of session, much of the struggle is being played out behind the scenes. Mr. Waxman, who is the second-ranking Democrat on the energy committee after Mr. Dingell and is current chairman of the House Government Reform and Oversight Committee, sent a letter to House Democrats the day after the election seeking their support.

In the letter, Mr. Waxman, 69 years old, stressed that Mr. Dingell's committee, with jurisdiction over health, environmental and energy policy, will play a key role in implementing Mr. Obama's policies. Mr. Waxman said that while he admires Mr. Dingell, the 82-year-old lawmaker will have served as the panel's top Democrat for 28 years as of next year. "I do not take the step of challenging John lightly," Mr. Waxman wrote. "But after 28 years, we need new leadership."

Power Play

The Showdown: A competition has emerged for the top post on the House Energy and Commerce Committee, which has jurisdiction over health, environmental and energy policy and is expected to play a key role in implementing President-elect Barack Obama's proposals.

The Contenders: Rep. Henry Waxman of California is challenging Rep. John Dingell of Michigan, who has been the top Democrat on the committee for nearly 28 years.

Unity Threatened: Rank-and-file Democrats eventually may have to vote to resolve the chairmanship issue.

Democratic Rep. George Miller of California, chairman of the Education and Labor Committee, is helping to rally support for Mr. Waxman, congressional aides said. They said Mr. Waxman hopes to secure backing from the California delegation, which has more than 50 members, and from liberals who dominate the caucus.

Mr. Dingell is circulating his own letter touting the committee's accomplishments. He noted that 91 bills sponsored by the committee were passed by the House over the past two years, with 27 of those signed into law. The lawmaker has also called members to seek their support. More than a dozen Democrats from the caucus, including liberal Rep. Jesse Jackson Jr. of Illinois and moderate Rep. John Tanner of Tennessee, have formed a group to solidify support for Mr. Dingell.

Mr. Dingell's wife, Debbie, who is an executive at General Motors Corp. and a force in Democratic politics in her own right, has also been making phone calls and helping to rally support among Democrats. She declined to comment.

Mr. Dingell, who was first elected to the House in 1955 and is its longest-serving current member, has said he doesn't plan to give up the chairmanship.

Supporters of the men said both have wide support. Some lawmakers, however, suggested they don't want to be caught in the middle. Asked about the fight, House Majority Leader Steny Hoyer, a Maryland Democrat, said he wouldn't comment on the "intramurals."

The conflict could come to a head later this month, when lawmakers are set to gather on Capitol Hill to begin organizing for the 111th Congress, which will formally convene in January. A steering committee of senior Democrats will make an initial determination on how to resolve the chairmanship issue, and the question could eventually be put to a vote in the caucus.

Mr. Dingell's state is home to the country's three largest auto makers. He is a longtime ally of the industry and is seen as being more sympathetic toward business than Mr. Waxman when it comes to environmental and energy issues. Mr. Dingell favors a market approach toward reducing greenhouse-gas emissions that his aides say reflects his understanding of the potential challenges of passing a bill to curb emissions.

Critics have complained that Mr. Dingell isn't aggressive enough. Mr. Waxman has pushed for a program that would impose more-aggressive limits on emissions, and he has disagreed with Mr. Dingell's argument that states shouldn't be allowed to take tougher action on emissions than the federal government.

Mr. Dingell, in his letter, said he would address climate change next year, along with health care and food safety. It would be an "honor and privilege" to serve again, he said in the letter.

Write to Greg Hitt at greg.hitt@wsj.com

'Do What You Got Elected to Do'

2008-11-10T07:09:00.001-06:00

The incoming chief of staff says expect a pragmatic White House.

By JASON L. RILEY

In Rahm Emanuel's telling, the Democratic victories on Tuesday were a continuum of what began in the 2006 midterm elections, when his party won majorities in the House and the Senate for the first time in 12 years. "After 2006, I said it was George Bush and the desire for change," the congressman from Chicago's North Side tells me. "And the same cocktail contributed to this turnout. You had Barack Obama's message of change and Bush and the Republicans' record of incompetence."

Mr. Emanuel would know. As chairman of the Democratic Congressional Campaign Committee, he helped engineer that GOP thumpin' two years ago. And as Mr. Obama's incoming White House chief of staff -- a position he accepted on Thursday -- he's certain to have an outsized say in how the Dems use their political monopoly come January.

Recently, I spoke with Mr. Emanuel during a short layover at the Detroit airport. Officially, he hadn't yet been offered the new post, and when queried about the prospect of serving in the Obama White House he demurred. But Mr. Emanuel, who turns 49 later this month, was eager to discuss Congress's agenda going forward. He explained how Democrats can avoid the mistakes that felled the Republican majority, and he reflected on the lessons learned as a high-ranking member of President Clinton's brain trust in the 1990s.

Asked what Barack Obama was elected to do, and what legislation he's likely to find on his Oval Office desk soonest, Mr. Emanuel didn't hesitate. "Bucket one would have children's health care, Schip," he said. "It has bipartisan agreement in the House and Senate. It's something President-elect Obama expects to see. Second would be [ending current restrictions on federally funded] stem-cell research. And third would be an economic recovery package focused on the two principles of job creation and tax relief for middle-class families."

Editorial board member Jason Riley discusses the Rahm Emanuel pick. (Nov. 8)
The last time a Democratic president's party also ran Congress was 1992. Just two years later, however, voters changed their mind about that arrangement and gave the GOP control of the House and Senate. Mr. Emanuel said he's not at all concerned that the party will overplay its hand this time. He insisted that his caucus is mindful of what happened to Democrats in 1994 and the Republican Congress in 2006.

Not surprisingly, Mr. Emanuel defended President Clinton's decision to push through a tax increase in 1993 -- "a tough call" -- after having campaigned on a middle-class tax cut. He also denied that it had much impact in the midterm elections a year later. Instead, he cited issues like "gays in the military" as more damaging politically. "It's not what we campaigned on," said Mr. Emanuel. And as an example of Republicans losing their way, he cited the Terri Schiavo episode in 2005, where President Bush and the Republican-controlled congress intervened in a case involving a brain-damaged woman's feeding tube.

In both instances, "the lesson is to do what you got elected to do," said Mr. Emanuel. "Do what you talked about on the campaign. If you got elected, that's what people expect. Don't go off on tangents where part of your party is demanding an ideological litmus test. Neither of those things was part of the campaign."

Mr. Emanuel's slight build and basset hound eyes belie the "Rahmbo" moniker that aggressive tactics have earned him over the years. So does his background. The lawmaker's interests ran to ballet, not battleground states, while growing up on Chicago's tony North Shore in the 1970s as the middle son of a pediatrician who emigrated from Israel. A dance prodigy, he was offered a scholarship with the Joffrey Ballet but settled for a liberal arts degree from Sarah Lawrence and a master's in communications from Northwestern.

The political bug bit him in college. A stint with the consumer advocacy group Illinois Public Action led to fund raising for Illinois Democrat Paul Simon's 1984 senate run. Later, Mr. Emanuel would put his money-raising prowess to work for Chicago Mayor Richard Daley and, ultimately, Bill Clinton's 1992 presidential campaign. In 1999, Mr. Emanuel left the White House, where he had served as a policy aide to the president. But there was little doubt that he would return to the political arena eventually.

After three years working as an investment banker, Mr. Emanuel ran for Dan Rostenkowski's old congressional seat. With help from the legendary Daley political machine, he won election in 2002 and quickly rose in the party ranks. Today he chairs the House Democratic Caucus, making him the No. 4 Democrat in the House.

Mr. Emanuel has a reputation as a bullying political operative who stops at nothing to fill seats in Congress with Democrats. As head of the DCCC, he was not only responsible for fund raising but also for vetting candidates. His methods often upset members of his own party, even when they were successful. In 2006, he made a tactical decision to recruit candidates who opposed abortion rights and gun control to run in more conservative-leaning districts. And although the strategy worked, it meant passing over more ideologically pure candidates, which didn't sit well with some orthodox liberals.

Policy-wise, Mr. Emanuel has fashioned himself as a "New Democrat" in the Clinton mold. He has long been an advocate of governing from the center, reaching across the aisle to seek consensus. As a Clinton adviser, he championed welfare reform and free trade. He's even called for a flatter, less progressive system of taxation. As a congressman, Mr. Emanuel supported the Bush administration's decision to remove Saddam Hussein, though he subsequently criticized the president's management of the war in Iraq.

So I asked Mr. Emanuel if the election of an unabashed liberal like Mr. Obama has made the New Democrat strategy obsolete. Perhaps what we witnessed on Tuesday means that liberalism is ascendant and the U.S. is no longer a center-right nation. "I think the country is incredibly pragmatic," he responded. "Pragmatic and progressive. But you still have to mix and match different approaches to reach your objectives. You have to be flexible."

He said the similarities between Barack Obama and the last Democratic president matter more than the differences. "Both Barack and Bill Clinton have an incredible connection to the public," he said. "Both ran on a message of hope. Both ran against failed policies that let the country down prior to them being elected. I don't think the country is yearning for an ideological answer. If anything it's the opposite. They want real solutions to real problems. And if we do an ideological test, we will fail. Our challenge is to work to solve the actual problems that the country is facing, not work to satisfy any constituency or ideological wing of the party."

An Obama administration could very well be planning to govern from the center. But there's still the reality of the Democratic congressional leadership, which is brimming with left-wing barons who have their own agenda.

Barney Frank wants to slash Defense spending by 25%. Charles Rangel wants to bring back the draft. John Conyers, who has called for slavery reparations, is also sympathetic to Europeans who want to indict Bush administration officials for war crimes. And Henry Waxman is angling for steep energy taxes to combat global warming.

The question is whether these veteran lawmakers will simply steam roll the new White House occupant, the way previous liberal majorities in Congress had their way with Presidents Carter and Clinton.

"Barack Obama can stand up to them," countered Mr. Emanuel. He started to defend a couple of his colleagues -- "Charlie Rangel also supports reducing the corporate tax rate, and go ask corporate America how pragmatic Barney Frank has been during the financial crisis" -- but then he paused. At first, I thought it was because Mr. Emanuel had run out of examples, but it turned out that he wanted to make a larger point.

"Let me say this as to my colleagues," he began. "Although committed to their philosophy, they are incredibly pragmatic. They have lived through an experience in the minority. And they know how they got to be in the minority. And they know one very important political principle. They know that if President-elect Obama succeeds, all of us succeed. And if he doesn't succeed, his failures won't be limited to him."

Mr. Emanuel avoided the word "mandate," but the future White House chief of staff said that the future president has been given "clear directions by the country to change policies in Washington -- to change a health-care policy that is bankrupting the family budget as much as the federal budget, and to change an energy policy that has us exporting $700 billion of our wealth to countries overseas."

Mr. Emanuel said that the best way for Democrats to avoid overreach in the next two years is by thinking "less ideologically and more in terms of future versus past." You have to "constantly be turning over the intellectual topsoil in order to stay fresh," he said. "The economy demands it. The political system demands it. The country doesn't want divided government. It wants progress."

Asked where John McCain's campaign went wrong, Mr. Emanuel said that the Republican didn't properly address the issues Americans care about today. "McCain ran a campaign that he thought he had to run rather than the one he should have run," he said. "You can't do that and be successful. We have an energy crisis, a health-care crisis, a public sector that hasn't reformed to the globalized economy." Mr. McCain "tried to make this about small things like Bill Ayers. Barack made it about health care.

"The American people penalized the candidate who talked about small things and rewarded the candidate who talked about big things," he said as our conversation wound down. "You can't win an election where the American people want to talk about one thing and your candidate wants to talk about something else. The American people are unbelievably pragmatic. Have confidence in their pragmatism. It's the operating philosophy of our country."

Mr. Riley is a member of The Wall Street Journal's editorial board.

Obama's Victory Margin Grows

2008-11-07T08:21:00.001-06:00

ABC World News reported, "The national vote as more of it is counted the margin of victory for Barack Obama is actually growing. He now has a seven percentage point win over John McCain. We are now able to say that Barack Obama for certain has carried the states of North Carolina and Indiana" bringing his electoral vote total to 364, while counting continues in Missouri, where Sen. John McCain has a slight lead. The AP[ ] says Obama's win in North Carolina "was the first for a Democratic presidential candidate since Jimmy Carter won the state in 1976. Of Bush's 2004 states, Obama captured Virginia, Florida and North Carolina in the South, Ohio, Indiana and Iowa in the Midwest and Colorado, Nevada and New Mexico in the West." The Washington Post's Harold Meyerson writes, "Even though Obama's victory was nowhere near as numerically lopsided as Franklin Roosevelt's in 1932, his margins among decisive and growing constituencies make clear that this was a genuinely realigning election."
      Obama Made Gains Across Nearly Every Voting Bloc On NBC Nightly News, analyst Chuck Todd said Obama's victory "was across the board. His increases was not just about one voting group. It was across the board, whether it was older voters, younger voter, black voters, white voters, Latino voters, wherever they live. ... If we eliminated every voter under the age of 30, only two states would flip to McCain, Indiana and North Carolina." On the CBS Evening News, Jeff Greenfield also noted that when you "look at where Barack Obama improved over John Kerry...you will see that except for a few states, Kentucky and Arkansas and a few others, he did better than Kerry almost everywhere, and that portends potential long-term trouble for the Republicans."
      Obama Won 67% Of The Hispanic Vote USA Today reports, "Hispanic voters surged this week and swung their support to the Democratic Party, helping flip four states to winner Barack Obama in a trend that poses challenges for Republicans in future elections." Obama "won 67% of the Hispanic vote - 23 percentage points higher than President Bush's showing in 2004." The New York Times adds that "the number of Latinos who went to the polls increased by nearly 25 percent over 2004, with sharp rises among naturalized immigrants and young, first-time voters, according to a study by the National Association of Latino Elected and Appointed Officials."
      Obama Gains Among White Evangelicals The New York Times says Obama "succeeded in chiseling off small but significant chunks of white evangelical voters," doubling "his support among young white evangelicals (those ages 18 to 29) compared with" 2004 Democratic nominee Sen. John Kerry. The Times notes, "The increase was almost the same for white evangelicals ages 30 to 44." Overall, "most white evangelicals remained in the Republican camp," as Sen. John McCain "held 74 percent of the white evangelical vote, compared with 24 percent for Mr. Obama - a gain of only three percentage points over Mr. Kerry. But in most of the swing states where Mr. Obama's campaign concentrated, like Colorado, Florida, Indiana, Michigan, Pennsylvania and Virginia, his gains over Mr. Kerry in 2004 among white evangelicals were larger."

2008-11-04T23:39:00.001-06:00

Barack Obama Wins!!!!!!!!!!!

Obama Team Plans for Hiring Lobbyists

2008-11-01T07:57:00.002-05:00

CLASS ANSWER - WHY DO PRESIDENT'S NEED LOBBYISTS ON THEIR STAFF? WHAT IS THE REVOLVING DOOR? IS IT WISE TO HIRE THEM FOR SOMETHING THEY HAVE NOT LOBBIED FOR? EXPLAIN

By BRODY MULLINS, ELIZABETH WILLIAMSON and CHRISTOPHER COOPER

WASHINGTON -- Democratic Sen. Barack Obama has said lobbyists won't run his White House. But senior campaign officials are crafting a policy that would clear the way for lobbyists to nonetheless hold important government roles.

People familiar with Sen. Obama's still-evolving hiring policy say registered lobbyists would be banned from senior-level White House jobs. But the policy would allow some lobbyists to take important jobs elsewhere in the administration, should the Illinois senator win election Tuesday.

"Our goal is to make sure that people don't leave an industry to come into our administration and then work on issues related to their industry and then go back to that industry. That revolving door has been swinging for years in Washington," said David Axelrod, chief strategist for Sen. Obama. "That's not to say that anyone who has lobbied in their life will be excluded."

Mr. Axelrod would not confirm details of the campaign's internal discussions.

The Obama campaign's effort reflects a challenge that would confront either Sen. Obama or his Republican rival, Sen. John McCain: trying to run an administration without Washington lobbyists, who serve an integral role in advising on legislation and regulations, as well as policy.

Capitol Hill and White House aides routinely serve stints at K Street lobbying firms, where many experienced Democrats have been waiting out the Bush years. "You can't staff the entire government without people who are lobbyists, it's just not possible," said Steve Elmendorf, a Democratic lobbyist.

Sen. McCain has decried the influence of special interests. But the Arizona senator has not pledged to exclude lobbyists from his administration. Instead, he would ban officials in his administration from using the revolving door from government to private practice and back. "If you work in John McCain's administration you would not lobby John McCain's administration," said Brian Rogers, a campaign spokesman.

The McCain campaign required that lobbyists coordinating the campaign cease their lobbying jobs.

On the campaign trail, Sen. Obama has outlined measures he would take to limit lobbyists' influence on White House decision-making. He has plans, for example, to publish details of meetings between lobbyists and members of the executive branch.

Democratic lobbyists are wondering about their future in an Obama administration. Although Sen. Obama has taken a tough line toward registered lobbyists, he has allowed himself maneuvering room. Like Sen. McCain, Sen. Obama has banned lobbyists from working on his campaign until after they quit their lobbying jobs.

Sen. Obama refused donations from registered lobbyists, but former lobbyists and the spouses of current lobbyists are permitted to contribute.

Sen. McCain employs several former lobbyists at the top of his campaign, and has accepted contributions from corporate and special-interest political action committees, targets of criticism by Sen. Obama's campaign.

In speeches, Sen. Obama has pledged that lobbyists will not hold sway if he won.

"I don't take money from lobbyists. I don't take money from PACs. They have not funded my campaign. They will not run my White House," he said in a speech last month.

The proposals under discussion by the Obama campaign would ban lobbyists for particular industries from serving in posts with an influence on that sector. But a lobbyist for the transportation industry could take a job in the Agriculture Department, for example.

Officials in the Bush administration are prohibited from lobbying their former colleagues for 12 months. Sen. Obama would likely extend that to three years, five years or for the duration of his administration, people familiar with the discussions say.

Bans on lobbyist employment have proven difficult to enforce. One hour after taking office, former President Bill Clinton instituted a five-year ban on lobbying the executive branch for officials who left his administration. The ban contributed to difficulties in filling some positions, including in the Treasury and Commerce departments. President Clinton revoked the ban at the end of his administration, in 2001.

Will This Election Be Stolen?

2008-11-01T07:46:00.002-05:00

KEY CONCEPTS - Historical right to vote, and supporting beliefs.

As both parties battle over just how fraud could taint this election, two analysts with very different viewpoints look at voting abuses from the beginning of the republic to the present day.

By MARK CRISPIN MILLER

The day after John McCain charged the community-based organization Acorn (Association of Community Organizations for Reform Now) with planning "one of the greatest frauds in voter history in this country," Sarah Palin told a boisterous crowd in Bangor, Maine: "In this election, it's a choice between a candidate who won't disavow a group committing voter fraud, and a leader who won't tolerate voter fraud."

Soon George Bush leaped into the furor over "voter fraud," asking the Department of Justice to determine whether some 200,000 newly registered Ohio voters should have their identities confirmed. (The Supreme Court had refused that measure; and former Justice Department lawyers claim that the probe requested by the president may violate department policy.)

Will ballots be canceled or diluted by fraudulent votes cast by the dead, noncitizens, fictitious voters, or individuals voting more than once? Read an essay by Hans A. von Spakovsky.

Meanwhile, Ohio congressman John Boehner, House minority leader, wrote Mr. Bush a letter noting "a significant risk, if not a certainty, that unlawful votes will be cast and counted" in his state, where there are now several lawsuits over the apparent threat of Democratic "voter fraud."

Election fraud in the U.S. traces back to the beginning of elections. There's a danger now that eligible voters will be disenfranchised by the thousands, because of efforts to prevent a few unlawful votes. Although the GOP's barrage of charges is unique, the apprehension of "unlawful votes" is hardly new, recalling fears as old as the republic -- or, indeed, even older.

The worry that the undeserving may cast votes recalls the major argument that, in the 18th century, was used to justify strict property requirements for all voters in America. As historian Alexander Keyssar points out in his magisterial "The Right to Vote," those without property were deemed incapable of voting soundly, since their dependency would cause them to defer to those above them. And yet, as Mr. Keyssar notes, those arguing against enfranchising the poor were just as likely to believe not that the poor have no will of their own, but that the poor have too much will. Give such have-nots the vote, believed John Adams, and "an immediate revolution would ensue."

In the 18th century, such qualms were largely theoretical, as voting was restricted to white male freeholders (or, a little later, taxpayers) in a land of villages and farms. In any case, those contradictory misgivings soon receded, as, at first, the busy young republic was increasingly committed to an optimistic faith in universal suffrage.

In that homogeneous society, the problem of "unlawful votes" was not a pressing concern -- as it would be by the middle of the 19th century, when the nation's rampant industry produced a new crop of cities, filling up with huddled masses that Americans did not want at the polls. There were increasing hordes of Irish Catholics, Jews, Italians, Slavs, Chinese and other foreign workers crowded into slummy neighborhoods, and they were often muttering of explosive creeds -- variants of socialism and anarchism -- deeply threatening to the peace and order of the U.S.

Worse, such aliens were getting organized politically, and setting up their own political machines, like Boss Tweed's Tammany Hall, that had large ethnic numbers on their side. And then there was the liberated South, where millions of black freedmen suddenly enjoyed the right to vote, and so would shortly rule the roost (or so it seemed to many nervous whites). "We have received an almost unlimited immigration of adult foreigners, largely illiterate, of the lowest class and of other races," wrote an anonymous contributor to the Atlantic Monthly in 1879. "We have added at one stroke four millions and more of ignorant negroes to our voting population."

Thus many white Americans, native-born, were primed to buy the tales of massive voter fraud in every ghetto -- party hoodlums stuffing ballot boxes, people selling votes, etc. -- even though such stories were, as Mr. Keyssar notes, "greatly exaggerated." Such anecdotes persisted through the decades, ultimately helping to create a sort of counter-narrative against the history of the South, where whites had long suppressed the black vote with appalling ruthlessness.

In tacit contradiction to that story, and especially after the passage of the Voting Rights Act in 1965, the old myth of the demonic trickiness of urban voters (i.e., Democrats) now began to serve as propaganda for a GOP intent on courting disaffected whites, according to "the Southern strategy" (which started under Richard Nixon). Such lore has taught us all about dead people turning out to vote, secret wads of "walking-around money" and other tricks allegedly played by the Democrats alone.

That propaganda has been most effective -- and a lot of it just happens to be true. For example, "Landslide Lyndon" Johnson stole his first election to the Senate in 1948, gaining his minuscule victory margin, 87 votes, through ballot fraud (an act that his biographer Robert Caro called "brazen thievery"). Chicago's infamous Mayor Richard Daley ran the elections there with both an iron hand and no regard for civic probity. In 1960 he helped steal Illinois for John F. Kennedy by rigging the election in Chicago -- where the turnout was an awesome 89%.

Such offenses were, however, not exclusively a Democratic specialty. That year in Illinois, while Daley was doing dirty work in Chicago for John Kennedy, the GOP in neighboring DuPage County, the state's top stronghold of Republicans, went even further in its bid to steal the race for Richard Nixon, since that county's turnout was a staggering 93%. (This comes from county records researched for my book "Loser Take All: Election Fraud and the Subversion of Democracy, 2000-2008.")

The GOP was also using phantom votes and fake addresses. In 1968, the Federal Bureau of Investigation was looking at voter fraud in Gary, Ind., where Richard Hatcher, a black Democrat, was running for mayor. Agent Robert Craig spent days trying to verify the information written out on scores of voter registration cards filed by Republicans. "Names and addresses of 'voters' turned out to be vacant lots where there had never been a house, or the house had been torn down years before the 'person' was registered," Mr. Craig told me in a recent telephone conversation. "The vast majority of the registrations I checked were completely phony."

While both sides always used such tactics, in this century it is the GOP that's done most to rig the vote (with little outcry from the Democrats). In 2000, thousands of Floridians were purged illegally from the voter rolls before Election Day, according to the sworn testimony of George Bruder, a vice president of Database Technologies, before the U.S. Civil Rights Commission. The vote count in Miami-Dade County was shut down by a disturbance variously referred to as a "Brooks Brothers riot" or "bourgeois riot," where several people were pushed and shoved by staffers working for congressional Republicans.

Four years later, in Ohio, ballots were altered or destroyed on a massive scale, making Mr. Bush's win there questionable, says researcher Richard Hayes Phillips. (Officially, Bush won the state by some 118,000 votes.) The damage came to light through a three-year audit led by Mr. Phillips of ballots from selected precincts in 18 Ohio counties (the research is available in his book, "Witness to a Crime").

Recently, Acorn's alleged "unlawful votes" have caused a major stir. Although resonantly charged with "voter fraud," the group has actually been accused of voter-registration fraud -- i.e., the entry of false information on voter-registration forms. In Acorn's case, the crime was perpetrated by volunteers who, probably for mercenary reasons, filled out the forms with bogus names like Mickey Mouse. Acorn itself discovered the suspicious forms and turned them in to the authorities.

Meanwhile, the very party that is demonizing Acorn has now disenfranchised countless voters nationwide, through a dizzying range of tactics. Voters have been stricken from the rolls through purges nationwide, carried out since 2004 at the behest of the Department of Justice. (Courtrooms throughout New York State are crammed with people trying to reclaim their right to vote.) Others have been dropped from the electronic voter rolls, as USA Today began reporting months ago.

Further thousands have been sidelined through the tactic known as "voter caging": the targeting of certain voters for disenfranchisement. This tactic usually entails mailing forms to Democratic voters, in the expectation that the addressees won't fill them out and send them in (the envelopes are nondescript) -- and if they don't, their names are stricken from the voter rolls. And then there are the e-voting machines. Since early voting started recently, worried voters have reported seeing their votes flipped from Barack Obama to Mr. McCain in West Virginia and Texas.

It is not the failure or success of any candidate or party that most matters but the exercise of voting rights, and, through them, our self-government. If either team prevails despite the disenfranchisement of some Americans, that victory will mean all that much less; and if your favorite wins, and then the U.S. doesn't do anything to fix its voting system (and otherwise restore this faltering democracy), that victory of his won't matter much at all, since We the People will have lost control for good.

New York University professor Mark Crispin Miller's latest book is "Loser Take All: Election Fraud and the Subversion of Democracy, 2000-2008."

Unit 1 Review Guide

2008-10-30T12:46:00.001-05:00

Theories of our society – elite, pluralist, hyper-pluralist,
Virginia Plan
New Jersey Plan
Connecticut Plan
Great Compromise
Articles of Confederation – pro’s & cons
Constitution
Duel Federalism
Supremacy clause
Checks and balances
Public goods, public policy
Necessary and Proper clause
McCulloch V. Maryland
Separation of Powers
Expressed powers
Implied powers
Concurrent power
Federalism – marble cake, layer cake
Marbury v. Madison
Federalist – beliefs
Antifederalist beliefs
Locke, Hobbes, and Rousseau belief on the function of government
Fundamental democratic processes
Importance of Shay’s rebellion
Shield Laws
Bad tendency doctrine
Hazelwood v. Kuhlmeier
Planned Parenthood v. Casey
Title IX of the educational act of 1972
Amendments
Exclusionary rule
Brown v. Board of Ed
Engel v. Vitale
Ashcroft v. ACLU
Gideon v. Wainwright
Plessy v. Ferguson
Gitlow v. New York
Griswold v. Connecticut
Miranda v. Arizona
Lawrence v. Texas
Univ of CA Regents v. Bakke
Gratz v. Bollinger
Reason for justice lifetime appointments
Free speech
How is the Bill of rights is applied to states
Establishment clause
Freedom of Information Act
Powers of Congress
Incorporation doctrine

Feds Disrupt Skinhead Plot to Kill Obama

2008-10-27T20:51:00.002-05:00

WASHINGTON (Oct. 27) - Two white supremacists allegedly plotted to go on a national killing spree, shooting and decapitating black people and ultimately targeting Democratic presidential candidate Barack Obama, federal authorities said Monday.
In all, the two men whom officials described as neo-Nazi skinheads planned to kill 88 people — 14 by beheading, according to documents unsealed in U.S. District Court in Jackson, Tenn. The numbers 88 and 14 are symbolic in the white supremacist community.

Federal officials said Monday they had disrupted a plot by two neo-Nazi skinheads to assassinate Democratic presidential nominee Barack Obama. The two suspects also planned to shoot or decapitate 88 black people in a murder spree that was to start in Tennessee, authorities said.
officials said Monday they had disrupted a plot by two neo-Nazi skinheads to assassinate Democratic presidential nominee Barack Obama. The two suspects also planned to shoot or decapitate 88 black people in a murder spree that was to start in Tennessee, authorities said.
The spree, which initially targeted an unidentified predominantly African-American school, was to end with the two men driving toward Obama, "shooting at him from the windows," the court documents show.
"Both individuals stated they would dress in all-white tuxedos and wear top hats during the assassination attempt," the court complaint states. "Both individuals further stated they knew they would and were willing to die during this attempt."
An Obama spokeswoman traveling with the senator in Pennsylvania had no immediate comment.
Sheriffs' deputies in Crockett County, Tenn., arrested the two suspects — Daniel Cowart, 20, of Bells, Tenn., and Paul Schlesselman 18, of Helena-West Helena, Ark. — Oct. 22 on unspecified charges. "Once we arrested the defendants and suspected they had violated federal law, we immediately contacted federal authorities," said Crockett County Sheriff Troy Klyce.
The two were charged by federal authorities Monday with possessing an unregistered firearm, conspiring to steal firearms from a federally licensed gun dealer, and threatening a candidate for president.
Cowart and Schlesselman are being held without bond. Agents seized a rifle, a sawed-off shotgun and three pistols from the men when they were arrested. Authorities alleged the two men were preparing to break into a gun shop to steal more.
Obama Assasination Plot Disrupted
Federal agents say they've broken up a plot to assassinate Democratic presidential nominee Barack Obama and 102 other black people. (Oct. 27)
Jasper Taylor, city attorney in Bells, said Cowart was arrested on Wednesday. He was held for a few days in Bells, then moved over the weekend to another facility.
"It was kept under lid until today," Taylor said.
Until his arrest, Cowart lived with his grandparents in a southern, rural part of the county, Taylor said, adding that Cowart apparently never graduated from high school. He moved away, possibly to Arkansas or Texas, then returned over the summer, Taylor said.
Attorney Joe Byrd, who has been hired to represent Cowart, did not immediately return a call seeking comment Monday. Messages left on two phone numbers listed under Cowart's name were not immediately returned.
No telephone number for Schlesselman in Helena-West Helena could be found immediately.
The court documents say the two men met about a month ago on the Internet and found common ground in their shared "white power" and "skinhead" philosophy.
The numbers 14 and 88 are symbols in skinhead culture, referring to a 14-word phrase attributed to an imprisoned white supremacist: "We must secure the existence of our people and a future for white children" and to the eighth letter of the alphabet, H. Two "8''s or "H''s stand for "Heil Hitler."
Court records say Cowart and Schlesselman also bought nylon rope and ski masks to use in a robbery or home invasion to fund their spree, during which they allegedly planned to go from state to state and kill people. Agents said the skinheads did not identify the African-American school they were targeting by name.
Jim Cavanaugh, special agent in charge of the Nashville, Tenn., field office for the Bureau of Alcohol, Tobacco Firearms and Explosives, said authorities took the threats very seriously.
"They said that would be their last, final act — that they would attempt to kill Sen. Obama," Cavanaugh said. "They didn't believe they would be able to do it, but that they would get killed trying."
He added: "They seemed determined to do it. Even if they were just to try it, it would be a trail of tears around the South."
An ATF affidavit filed in the case says Cowart and Schlesselman told investigators the day they were arrested they had shot at a glass window at Beech Grove Church of Christ, a congregation of about 60 black members in Brownsville, Tenn.
Nelson Bond, the church secretary and treasurer, said no one was at the church when the shot was fired. Members found the bullet had shattered the glass in the church's front door when they arrived for evening Bible study.
"We have been on this site for about 120 years, and we have never had a problem like this before," said Bond, 53 and a church member for 45 years.
The investigation is continuing, and more charges are possible, Cavanaugh said. He said there's no evidence — so far — that others were willing to assist Cowart and Schlesselman with the plot.
At this point, there does not appear to be any formal assassination plan, Secret Service spokesman Eric Zahren said.
"Whether or not they had the capability or the wherewithal to carry out an attack remains to be seen," he said.
Zahren said the statements about the assassination came out in interviews after the men were arrested last week.
The Secret Service became involved in the investigation once it was clear that an Obama assassination attempt was part of this violent, far-reaching plot.
"We don't discount anything," Zahren said, adding that it's one thing for the defendants to make statements, but it's not the same as having an organized assassination plan.
Helena-West Helena, on the Mississippi River in east Arkansas' Delta, is in one of the nation's poorest regions, trailing even parts of Appalachia in its standard of living. Police Chief Fred Fielder said he had never heard of Schlesselman.
However, the reported threat of attacking a school filled with black students worried Fielder. Helena-West Helena, with a population of 12,200, is 66 percent black. "Predominantly black school, take your pick," he said.
Associated Press writers Erik Schelzig in Nashville, Tenn., Jon Gambrell in Little Rock, Ark., and Eileen Sullivan in Washington contributed to this report.
Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

The Populism Divide

2008-10-23T05:23:00.001-05:00

By Dick Morris
As the election enters its last two weeks, social populism wars with economic populism to become the major outlet for American anger and angst and to satisfy the demand for change. In his book The Populist Persuasion, Michael Kazin articulates the difference between these two types of populism: economic and social.

Economic populism, the staple of the Democratic left, demonizes Wall Street and glorifies Main Street. It rails against unequal distribution of wealth and warns, perpetually, that the rich are getting richer and the poor are getting poorer. From Andrew Jackson's frontier democracy to Lyndon Johnson's War on Poverty, economic populism has powered the left.

Social populism, the conservative reply, attacks the values of Hollywood and the intellectual elite. It criticizes the welfare state and opposes a redistribution of wealth from the hardworking and deserving to what it sees as the freeloaders. More recent in origin, social populism has its roots in abolitionism and Prohibitionism and achieved its modern form in Richard Nixon's silent majority, Jerry Falwell's and Pat Robertson's Christian Coalition and Ronald Reagan's new right-wing majority. Within the Republican Party, social populists oppose the country-club wing and emphasize social conservatism over economic austerity.

In recent years, both forms of populism have been in remission. Clinton's policies of triangulation and Bush's lack of focus on domestic issues have steered both parties away from either economic- or social-populist impulses.

But the Obama campaign has been, from the beginning, grounded in economic populism. His explicit attack on the Bush tax cuts "for the rich" and his promise to make them "pay a little bit more" resonated with economic-populist voters. When the Wall Street crisis hit and top executives fled failing companies, taking hundreds of millions of dollars with them, the economic populists powered Obama to a nine-to-10-point lead in the polls.

But meanwhile, social populism was making a comeback on the right. Initially galvanized by Mike Huckabee, the social populists went wild when McCain chose Sarah Palin for vice president. Palin's life story epitomized the values of social populists. Her opposition to abortion, her mothering of a special-needs child, her backing for guns and her robust crusade for energy sources brought mainstream Republican values to the McCain ticket. If McCain wins this election, which he might well, it will have been the social populism of Sarah Palin that engineered much of his comeback.

When the financial crisis broke, McCain and Palin attacked corporate greed and called for restoring values on Wall Street. But their critique seemed merely a faint echo of the outrage of the left's economic populists.

Then came Obama's conversation with Joe the Plumber, possibly the decisive moment in the election. His blunt, blue-collar criticism of Obama's proposal to "spread the wealth around" found immediate resonance among social populists. Where economic populists want to take from the undeserving, overfed rich and give to the needy poor, social populists decry taking from hardworking, thrifty citizens and giving to illegal immigrants and the self-indulgent lazy.

At last, the McCain camp has something to say. Finally, it has, in McCain's phrase, "nailed Jell-O to the wall" and found a way to attack Obama's tax plans and support for social engineering and income redistribution.

It is true that the richest Americans are getting richer a lot faster than the rest of the country. The top 10 percent experienced a real (after inflation) income growth of almost 50 percent in this decade. The rest of America saw its income rise, but by less than 5 percent after inflation.

But it wasn't Bush tax cuts that fueled the growing inequality. The top 1 percent of American taxpayers now pay 40 percent of the taxes (compared with 33 percent in 2003 and 24 percent in 1986).

Obama's proposed increase in taxes on the rich will kill the economy and send us into a deeper depression.

But Clintonian policies like expanding the earned income tax credit, stretching out eligibility for food stamps and Medicaid, and funding college scholarships can make a huge difference. How will we pay for them? By keeping taxes on the rich at their current levels and using growing tax revenues to pay to promote downward irrigation of wealth.

Politically, the unalloyed triumph of economic populism is at an end. Social populism is back in play. And may the best populism win.

Morris, a former political adviser to Sen. Trent Lott (R-Miss.) and President Bill Clinton, is the author of “Outrage.” To get all of Dick Morris’s and Eileen McGann’s columns for free by email, go to www.dickmorris.com.

Obama gets boost from huge funding, Powell backing

2008-10-19T21:47:00.004-05:00

FAYETTEVILLE, North Carolina (Reuters) – Democrat Barack Obama won the support of former Republican Secretary of State Colin Powell on Sunday and announced he raised a record $150 million last month, dealing a double blow to rival John McCain's U.S. presidential campaign.

McCain, despite trailing in opinion polls and fundraising, said he still expects to win the November 4 election and could sense "things are heading our way."

Powell, who served several Republican presidents including George W. Bush as his first secretary of state, said either candidate would make a good president but he was critical of McCain's uncertainty on how to deal with the economic crisis.

Powell, who in the past was mentioned as possibly the first black U.S. president, told NBC's "Meet the Press" he backed Obama "because of his ability to inspire, because of the inclusive nature of his campaign, because he's reaching out all across America, because of who he is."

"I think he is a transformational figure," Powell said of the man who could become the first black president. "His is a new generation coming ... onto the world stage, American stage."

Powell's backing of Obama, 47, could give a boost to the foreign policy and national security credentials of the first-term Illinois senator and appeal to moderates and independents.

But the impact of endorsements on voters is questionable and Powell's reputation was somewhat tarnished by making the case for invading Iraq to the United Nations on the false claims that it possessed weapons of mass destruction.

In the midst of economic turmoil and with just over two weeks to go until the election, Obama leads in national polls and in many battleground states but McCain said he sees some movement in his direction.

Obama's lead over McCain has dropped to 3 points, according to a Reuters/C-SPAN/Zogby poll released on Sunday. Obama leads McCain 48 to 45 percent among likely U.S. voters, down 1 percentage point from Saturday.

"We're very happy with the way the campaign is going," McCain said on the "Fox News Sunday" program. "I've been on enough campaigns, my friend, to sense enthusiasm and momentum, and we've got it."

LOVES THE UNDERDOG ROLE

McCain, 72, said he did not mind being behind in polls.

"And I love being the underdog. You know every time that I've gotten ahead, somehow I've messed it up," he said, referring to the times he has been written off as a candidate.

Obama's fundraising announcement highlighted his disproportionate ability to spend money and blanket the air waves with advertisements, sometimes by a margin of 4-to-1 over McCain.

By bringing in at least $150 million in September, Obama more than doubled the $66 million he raised in August, which had been a record. McCain has accepted public financing and is limited to spending $84 million for the entire campaign.

Unlike McCain, Obama chose not to accept public funding for his campaign, freeing him to raise millions privately.

The Obama campaign said it had 632,000 new donors in September to bring its total to 3.1 million. It said the average donation for the month was less than $100.

McCain again chided Obama for not living up to his pledge to accept public funds and warned of the damages of unlimited spending.

"I'm saying that history shows us where unlimited amounts of money are in political campaigns, it leads to scandal," he said. When asked whether Obama was buying the election as his campaign spokesman claimed, McCain said, "I think you could make that argument."

McCain was spending the day in Ohio, a state he must win if he is to be president. No Republican has won the White House without winning Ohio and it was the state that put Bush over the top in 2004.

Obama was also in a battleground state with a heavy military presence, North Carolina, which had been expected to be an easy Republican win but is now in play for Democrats.

At Fayetteville, near Fort Bragg, the home of the 82nd Airborne Division, Obama called Powell "a great soldier, a great statesman and a great American" and thanked him for his advice over the years.

"He reminded us that at this defining moment, we don't have the luxury of relying on the same political games, the same political tactics that have been used in so many elections to divide us from one another and make us afraid of one another," Obama told the cheering crowd of about 10,000 people.

Powell said he has no plans to campaign for Obama and was not looking for a job in his administration but he left the door open to the possibility.

SNL does it again...

2008-10-19T21:47:00.002-05:00

More comedy for your viewing pleasure...

SNL's "Weekend Update"
http://www.nbc.com/Saturday_Night_Live/video/clips/update-palin-rap/773781/

School Efforts to Stem Violence Offer A Textbook Case of Limits on Speech

2008-10-16T09:10:00.001-05:00

ARE SCHOOLS GOING TO FAR?? WHY OR WHY NOT? WHAT IS THE NAME OF THE CASE THAT SET THE PRECEDENT?

By DAN SLATER

With the nation's school systems roiled by campus shootings over the past decade, and on the lookout for conflict, students are being asked to check a broader array of free-speech rights at the door -- raising questions about what lesson that is teaching them.

Controversial T-shirts like this one increasingly are being banned by schools wary of violence, often with the backing of the court

Public-school administrators are hewing to a zero-tolerance policy on expression they believe incites violence, and they are doing so with the backing of the courts. Controversial clothing has been a common casualty. Struggling with racial tensions at his high school, a principal in Maryville, Tenn., banned depictions of the Confederate flag in 2005 and was supported by a federal court. Last month, the Aurora Frontier K-8 School in Aurora, Colo., suspended an 11-year-old who refused to remove a homemade T-shirt that read, "Obama is a terrorist's best friend." The shirt caused "a very loud argument on the playground," according to a statement from the school.

Since such actions stem from a concern over the safety of adolescents, even free-speech advocates acknowledge a need for some degree of deference to educators. But an argument of imminent danger is hard to make in many of these cases. Some think educators may be inadvertently teaching children that suppressing speech is the ready solution to ideological conflict.

The Supreme Court's history in addressing free speech in schools goes back at least to the Vietnam War era. In 1969, the court struck down a move by schools in Des Moines, Iowa, to ban black armbands worn to protest the war, concluding there was no reason to believe the armbands would cause "substantial disruption." Since then, the court has largely sided with schools in a variety of bans on expression.

"As long as courts hear the word 'disruption,' they'll almost always side with administrators," says Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press.

It isn't clear that censorship of controversial clothing diminishes violence in schools. Serious violent crime in schools decreased 62% between 1994 and 2005, according to the National Center for Education Statistics. That could mean school efforts to crack down on violence, including dress codes, are working. But critics of such bans say that very decline in violence suggests that administrators are overreacting.

Dewey Cornell, who oversees the Youth Violence Project at the University of Virginia, says dress codes don't curtail school violence as much as an overall structured environment does.

Late last month, a federal judge in Pennsylvania sided with a school district in its decision to bar a student from wearing a T-shirt imprinted with images of guns and phrases such as "Volunteer Homeland Security" and "Terrorist Hunting Permit...No Bag Limit."

The teen and his parents said the T-shirt, a gift from an uncle serving in Iraq, was worn in support of the troops. The judge, in rejecting the suggestion of a First Amendment violation, wrote: "Students have no constitutional right to promote violence in our public schools." He noted that, following massacres at Columbine High School and Virginia Tech, among others, schools have had to be more vigilant.

In the Tennessee case, the Confederate flag had long been established as a "battle call," according to Steve Lafon, the principal. Mr. Lafon says that before he arrived, the school had "a lot of tolerance-type programs," but that problems such as racist graffiti and a fight between a black student and a white student at a basketball game "set the stage." At that point, he says, banning the symbol was the only option. Mr. Lafon says he would now consider banning any item that could be "racially divisive," including a Malcolm X shirt.

Dr. Cornell says: "The argument that 'I tried [education] and it didn't work' is not a convincing one. No program, treatment or method works in all cases."

The Pennsylvania case suggests that perceptions of school violence may be leading courts to defer to school administrators. The school district made no showing that the student had evinced violent tendencies or even that violence was a problem at the school, though the court noted that a female student had told a teacher that the shirt made her uncomfortable. The court determined that the shirt lacked a "constitutionally protected political message."

"Throughout American history, there's been a willingness to give up freedom for security," says Leonard Brown, the lawyer who represented the student in the case. "We need to recognize that we're losing something, even though no court likes to say that."

FactChecking Debate No. 3

2008-10-16T06:34:00.000-05:00

October 16, 2008
Sorting out fact and fiction in the presidential candidates' final debate.
Summary
Spin and hype were apparent, once again, at the third and final debate between McCain and Obama:

* McCain claimed the liberal group ACORN “is now on the verge of maybe perpetrating one of the greatest frauds in voter history ... maybe destroying the fabric of democracy.” In fact, a Republican prosecutor said of the first and biggest ACORN fraud case: “[T]his scheme was not intended to permit illegal voting.” He said $8-an-hour workers turned in made-up voter registration forms rather than doing what ACORN paid them to do.

* McCain said “Joe the plumber” faced “much higher taxes” under Obama’s tax plan and would pay a fine under Obama’s health care plan if he failed to provide coverage for his workers. But Ohio plumber Joe Wurzelbacher would pay higher taxes only if the business he says he wants to buy puts his income over $200,000 a year, and his small business would be exempt from Obama’s requirement to provide coverage for workers.

* Obama repeated a dubious claim that his health care plan will cut the average family’s premiums by $2,500 a year. Experts have found that figure to be overly optimistic.

* McCain claimed that Obama’s real “object” is a government-run, single-payer health insurance system like those in Canada or England. The McCain campaign points to a quote from five years ago, when Obama told a labor gathering that he was “a proponent of a single-payer health care program.” But Obama has since qualified his enthusiasm for Canadian-style health care, and his current proposal is nothing like that.

* Obama incorrectly claimed all of McCain’s ads had been “negative.” That was true for one recent week, but not over the entire campaign. And at times Obama has run a higher percentage of attack ads than McCain.

* McCain described Colombia as the "largest agricultural importer of our products." Actually, Canada imports the most U.S. farm products, and Colombia is far down the list.

* Obama strained to portray himself as willing to break ranks with fellow Democrats. His prime example was his vote for a bill that was supported by 18 Democrats and opposed by 26. Congressional Quarterly rates him as voting with his party 97 percent of the time since becoming a U.S. senator.

For details on these and other misleading claims, please read on to the Analysis section.
Analysis
Sens. John McCain and Barack Obama met for their final debate Oct. 15. The face-to-face was held at Hofstra University in Hempstead, N.Y., and was moderated by CBS News' Bob Schieffer.

ACORN and Vote Fraud

McCain made some dire claims about a liberal group he said was out to steal the election:

McCain: We need to know the full extent of Sen. Obama's relationship with ACORN, who is now on the verge of maybe perpetrating one of the greatest frauds in voter history in this country, maybe destroying the fabric of democracy.

It's true that the voter registration wing of the Association of Community Organizers for Reform Now has run into trouble in several states. ACORN employees have been investigated and in some cases indicted for voter registration fraud. Most recently, more than 2,000 registrations in Lake County, Ind., have turned out to be falsified.

But does this constitute "destroying the fabric of democracy"? More like destroying the fabric of work ethic. There's been no evidence that the ACORN employees who submitted fraudulent forms have been paving the way for illegal voting. Rather, they're trying to get paid for doing no work.

Dan Satterberg, the Republican prosecuting attorney in King County, Wash., where the first ACORN case was prosecuted, said:

Satterberg: [A] joint federal and state investigation has determined that this
scheme was not intended to permit illegal voting.

Instead, the defendants cheated their employer. ... It was hardly a sophisticated plan: The defendants simply realized that making up names was easier than actually canvassing the streets looking for unregistered voters. ...

[It] appears that the employees of ACORN were not performing the work that they were being paid for, and to some extent, ACORN is a victim of employee theft.

The $8-an-hour employees were charged with providing false information on a voter registration, and in one case with making a false statement to a public official. ACORN was fined for showing insufficient oversight, but it was not charged with masterminding any kind of fraud.

Meanwhile, on the other side of the table, Obama wasn't entirely forthcoming about his relationship with ACORN:

Obama: The only involvement I've had with ACORN is, I represented them alongside the U.S. Justice Department in making Illinois implement a motor voter law that helped people get registered at DMVs.

He did, but that wasn't his only involvement. He also worked closely with ACORN's Chicago office when he ran a Project Vote registration drive after law school, and Obama did some leadership training for Chicago ACORN. The Woods Fund, where Obama served as a board member, gave grants to ACORN's Chicago branch; both organizations are concerned with disadvantaged populations in that city. And during the primaries of this election, Obama's campaign paid upwards of $800,000 to the ACORN-affiliated Campaign Services Inc. for get-out-the-vote efforts (not voter registration). Those services were initially misrepresented on the campaign's Federal Election Commission reports, an error that some find suspicious and others say is par for the course. ACORN's Chicago office and CSI have not been under investigation.

For more on investigations of ACORN and registration fraud, and Obama's involvement with the group, keep an eye on our home page. A longer article on ACORN is in the works.
all

Joe the Plumber

Ohio plumber Joe Wurzelbacher got a lot of airtime.

McCain first mentioned Joe by saying:

McCain: Joe wants to buy the business that he has been in for all of these years, worked 10, 12 hours a day. And he wanted to buy the business but he looked at your tax plan and he saw that he was going to pay much higher taxes.

Joe’s newfound fame stems from an impromptu encounter Oct. 12, during which Wurzelbacher questioned Obama’s tax plans. Joe has since become a conservative folk hero after telling both Fox News and the conservative Web site Family Security Matters that he thought Obama’s plans sounded “socialist.”

At their encounter, Wurzelbacher told Obama that “I’m getting ready to buy a company that makes 250 to 280 thousand dollars a year,” before asking whether or not Obama would raise his taxes.

If the company is actually that profitable, and depending on how the business is organized legally, Obama’s plan would indeed raise his federal income taxes, and Obama conceded as much during the exchange. As we’ve written before, small businesses commonly are organized in such a way that their owners file business taxes as individuals. So if Joe’s plumbing business earns more than $200,000 per year (or $250,000 if Joe is married and files tax returns jointly) then his taxes would indeed be higher under Obama's plan than under McCain's.

It’s worth noting that while Wurzelbacher told Fox News’ Neil Cavuto that he lives “in a simple, middle class home” and portrayed himself as an ordinary working guy, Wurzelbacher’s $250,000 to $280,000 is a bit higher than "ordinary." In 2007, the last year for which the Census Bureau has figures, the median income for a family in Toledo, Ohio, was $43,553.

But Joe the Plumber wasn’t through yet. He made an encore appearance when McCain recycled a bogus claim that Obama would "fine" small business owners who fail to provide health care coverage for their workers:

McCain: Now, my old buddy, Joe, Joe the plumber, is out there. Now, Joe, Sen. Obama's plan, if you're a small business and . . . you've got employees, and you've got kids, if you don't get – adopt the health care plan that Sen. Obama mandates, he's going to fine you . . . I don't think that Joe right now wants to pay a fine when he is seeing such difficult times in America's economy.

McCain raised a similar charge at the last debate. It's still false. Obama’s plan, which is posted on his Web site, specifically says, “Small businesses will be exempt from this requirement.”

Obama hasn't defined exactly what he means by "small" but he seems to think Joe would qualify; he repeatedly referred to Joe’s “small business” during their exchange.

Obama's health plan does mandate that children have health coverage. If Joe doesn't provide insurance for his kids, he would face some unspecified penalty.

Health Care Hype

Obama and McCain traded boasts and accusations on each other’s health carebob plan. They ran afoul of the facts a few times.

Obama: And we estimate we can cut the average family's premium by about $2,500 per year.

The Obama camp does estimate that. But experts we talked to found that optimistic figure hard to believe.

Then, McCain said:

McCain: Sen. Obama wants to set up health care bureaucracies, take over the health care of America through — as he said, his object is a single payer system. If you like that, you'll love Canada and England.

Obama’s plan is not a single-payer system, which would be one in which everyone has health care provided and paid for by the government. Under Obama’s health care plan, Americans can keep the insurance they have, choose from federally-approved private plans or buy into a new public plan similar to the health care federal employees and members of Congress have.

McCain was referring to comments Obama made at a town hall meeting in Albuquerque in August. But Obama did not say that "his object is a single payer system." He said it would "probably" be his first choice "if" he were starting with a clean slate, which he isn't. He said his object is to "build up the system we got." According to the Wall Street Journal, Obama said:

Obama (as quoted by the Wall Street Journal, Aug. 19): If I were designing a system from scratch, I would probably go ahead with a single-payer system. ... [M]y attitude is let’s build up the system we got, let’s make it more efficient, we may be over time — as we make the system more efficient and everybody’s covered — decide that there are other ways for us to provide care more effectively.

Back in 2003, Obama was much more explicit. At an AFL-CIO forum, he said he was “a proponent of a single-payer health care program,” adding, “that’s what I’d like to see. And as all of you know, we may not get there immediately.”

That was five years ago, however, and recently, Obama has said he’d favor single-payer only if “starting from scratch.” He told The New Yorker in May 2007: “If you're starting from scratch, then a single-payer system ... would probably make sense. But we've got all these legacy systems in place, and managing the transition ... would be difficult to pull off. So we may need a system that's not so disruptive.”

Obama exaggerated a weakness in McCain's health care plan:

Obama: Now, under Sen. McCain's plan there is a strong risk that people would lose their employer-based health care.

Experts see a risk that some would lose their employer-based care, but Obama’s reference to "people" makes it sound as though nearly everyone would. Two independent studies both found that McCain’s plan would lead to a net decline in the number of people with health care through their jobs. (They said Obama’s would result in a net increase.) Both reports show, however, that there’s not a “strong risk” for all, or even a majority, of workers to lose their health care.

Currently, 159 million Americans have health care through their jobs, according to the Kaiser Family Foundation. A study by the Lewin Group shows a net decline in the number with job-provided benefits of 9.4 million people in 2010 for McCain's plan. The Tax Policy Center projected that the net decrease would be 7.7 million in 2010 and 20.3 million people by 2018.

McCain and Obama both said much more that may have confused viewers. For a spin-free look at both of the candidates’ health care plans, see our recent article on this issue.

100% Negative?

Obama falsely claimed all of McCain's ads had been "negative."

Obama: And 100 percent, John, of your ads – 100 percent of them have been negative.
McCain: It's not true.
Obama: It absolutely is true.

It was almost true, for one recent week. Obama was referring to a report by the Wisconsin Advertising Project at the University of Wisconsin that concluded that “nearly 100 percent of the McCain campaign’s advertisements were negative” during the week of Sept. 28 through Oct. 4. During the same week, 34 percent of the Obama campaign’s ads were negative. The Obama campaign was found to have outspent the McCain campaign in nearly all of the competitive states, in some cases by a margin of more than 3-to-1.

McCain’s ads, however, have not been deemed 100 percent negative in other weeks. In fact, in the week after the Republican National Convention, 77 percent of Obama’s ads were negative, according to the advertising project, while 56 percent of McCain’s were negative.

Wrong on Exports to Colombia

McCain was way off when he said that Colombia is "our largest agricultural importer of our products." To be sure, Colombia is an important trade partner. According to statistics from the Department of Agriculture, Colombia imported slightly more than $1.4 million worth of U.S. agricultural products in 2007. But that's not even close to the nearly $1.9 billion worth of agricultural products exported to Canada. And there are dozens of other countries that import more U.S. farm products than Colombia does.

Obama No Maverick

Obama exaggerated his willingness to defy his own party. When McCain asked for an example, Obama offered this:

Obama: First of all, in terms of standing up to the leaders of my party, the first major bill that I voted on in the Senate was in support of tort reform, which wasn't very popular with trial lawyers, a major constituency in the Democratic Party.

obamaThat 2005 bill was S.5, which dealt with class-action lawsuits. Obama was one of 18 Democrats voting for it, while 26 opposed. It's a stretch for Obama to claim that he bolted his party when nearly 41 percent of Democrats voted in favor of the bill.

And as we pointed out before, Obama has a pretty consistent record of voting in stride with his party. According to Congressional Quarterly, in Obama's three years in the Senate, he has voted with his party almost 97 percent of the time.

Budget Ballyhoo

Both candidates got ahead of themselves when it came to balancing the budget and eliminating the deficit. Obama said every one of his spending increases was paid for.

Obama: Now, what I've done throughout this campaign is to propose a net spending cut. ... Every dollar that I've proposed, I've proposed an additional cut so that it matches.

McCain said he could balance the budget within one term.

Schieffer: Do either of you think you can balance the budget in four years? You have said previously you thought you could, Sen. McCain.
McCain: Sure I do. And let me tell you...
Schieffer: You can still do that?
McCain: Yes.

These are pie-in-the-sky predictions. We've looked at McCain's balanced-budget promise before – it's out of reach unless he cuts spending to an unrealistic degree. The Urban-Brookings Tax Policy Center estimates that by 2013, at the end of his first term, McCain's tax plan would have him facing a $662 billion deficit. That could come to more than half of that year's discretionary spending, which the Office of Management and Budget projects to be $1.1 trillion. And we've previously disputed Obama's claim that "every dime" of his proposed spending is covered. The Tax Policy Center estimated that Obama’s plan – and McCain's, too – "would substantially increase the national debt over the next ten years" unless the candidates come up with "substantial cuts in government spending" that they haven't yet specified. More recently, the Committee for a Responsible Federal Budget also estimated that in 2013, Obama’s major budget proposals – including spending cuts – would increase the deficit for that year by $281 billion.

The $42,000, Again.

McCain was on the wrong side of this exchange:

McCain: Sen. Obama talks about voting for budgets. He voted twice for a budget resolution that increases the taxes on individuals making $42,000 a year. . . .

Obama: [T]he notion that I voted for a tax increase for people making $42,000 a year has been disputed by everybody who has looked at this claim.

McCain was wrong to say Obama's March 2008 vote for a budget resolution "increases" anything. Budget resolutions set targets for taxes and spending; actually raising or lowering them requires separate legislation.

mccain The $42,000 figure also would only apply to single taxpayers, not to couples or families. As we’ve reported, a single taxpayer making more than $41,500 would have seen a tax increase, but a couple filing jointly would have seen no increase unless they made at least $83,000, and for a couple with two children the cut-off would have been $90,000. Regardless, the increase that Obama once supported as part of a Democratic budget bill is not part of his own current tax plan. And Obama was right when he said "even FOX News disputes" McCain's $42,000 claim. Chris Wallace of Fox News agreed that it was misleading.

Wrong Justice

McCain said that Obama voted against the confirmations of Supreme Court Justices Stephen Breyer and John Roberts:

McCain: Senator Obama voted against Justice Breyer and Justice Roberts on the grounds that they didn't meet his ideological standards.

McCain probably meant to say that Obama voted against the confirmations of Roberts and Justice Samuel Alito, the most recent additions to the court. Obama did vote against the confirmation of Roberts, but he wasn’t in the Senate when Breyer was nominated to join the Court. Breyer was nominated to the Supreme Court by former President Bill Clinton and confirmed by the Senate in 1994. Obama didn’t become a senator until January 2005.

Charter School Slip-Up

Obama overstated his work on charter schools in Illinois:

Obama: Charter schools, I doubled the number of charter schools in Illinois despite some reservations from teachers unions.

Actually, the bill Obama cosponsored doubled the number of charter schools in Chicago, not in the entire state of Illinois. (And an extra slap on the wrist to Obama for using the personal pronoun in saying that "I doubled the number of charter schools" – as we've pointed out before, it takes a lot more than one politician to get a bill passed.)

Tried But Untrue

And we noted that both candidates continued to recycle bunk that we've heard before:

* McCain said once again, "We have to stop sending $700 billion a year to countries that don't like us very much." As we've noted several times in the past, $700 billion would have been the cost of all annual U.S. oil imports when the price was $140 per barrel. But it's down to about half that now.

* Obama said oil companies have "68 million acres that they currently have leased that they're not drilling." We've previously criticized him for similar statements, and it's still not true. As we've pointed out, there is exploratory drilling being done on much of these lands, which are not yet producing oil. In 2007 there were more than 15,000 holes that were being proposed, started or finished that do not count as "productive" holes.

* Listing some of his running mate's achievements, McCain credited Gov. Sarah Palin with “a $40 billion pipeline of natural gas that's going to relieve the energy needs" of the lower 48 states. We'll just note, again, that the pipeline is still in pre-development and is actually projected to cost $26.5 billion.

Sea Story

Finally, the ears of nautical buffs may have perked up when McCain said, “we've sailed Navy ships around the world for 60 years with nuclear power plants on them.” His naval history is off by a few years. The first nuclear-powered vessel, the submarine USS Nautilus, was actually launched Jan. 21, 1954.

–by Jessica Henig, Joe Miller, Lori Robertson, Justin Bank, D'Angelo Gore, Emi Kolawole and Brooks Jackson

Humor

2008-10-14T08:03:00.001-05:00

David Letterman: President Bush "says he's going to tweak the financial package. ... That's like the captain of the Titanic tweaking the brunch menu."

David Letterman: Bush "is trying to reassure Americans that things are going to get better soon. And I was thinking well sure, in three months he'll be out of office."

Morgan Stanley gets lifeline, is ready for deals

2008-10-13T18:07:00.000-05:00

NEW YORK (AP) - Morgan Stanley averted disaster with a $9 billion lifeline from a major Japanese bank, and on Monday declared it will use that money to pick off smaller rivals.
Just a few days ago, some on Wall Street openly questioned if the embattled investment bank would be the next to collapse amid a deepening global credit crisis. Now, Morgan Stanley appears emboldened by the 21 percent stake taken by Japanese lender Mitsubishi UFJ — and, for now, seems to have regained the market's confidence.
Investors poured back into Morgan Stanley shares, which last week plunged 60 percent. Shares recouped $8.42, or 87 percent, to close at $18.10.
"This is Darwinism finance, literally the survival of the fittest for the banks," said Chris Johnson, chief investment strategist at Johnson Research Group. "This is Wall Street's version of the Amazing Race where these companies are going to jump through hoops and rings of fire to rebuild their businesses as quickly as possible."
The closing of the Morgan Stanley deal, which was agreed upon last month, came as Spain's Banco Santander SA said it was in talks to acquire Pennsylvania's Sovereign Bancorp Inc. Forging ahead with similar takeovers appears to be exactly what John Mack, Morgan Stanley's chairman and chief executive, plans to do now that the nation's No. 2 investment bank is on more solid footing.
Mack, 63, laid out his plan by telling employees in a memo that he "will be looking at acquisitions that might make sense for the firm." Since Morgan Stanley has now converted its structure to a safer retail bank model, the firm wants to expand its network of 500 branches and 8,500 financial advisers.
Analysts believe he will scour the market, looking for faltering retail banks around the country. And with the buyouts of Wachovia Corp. and Washington Mutual Inc. in recent weeks, it appears Morgan Stanley won't have a problem finding a target.
That's not to say the investment bank is out of the woods. The company's book value, the company's total assets minus liabilities, still remains stunningly low.
Also, there still remains reluctance on the part of banks to do business or borrow from one another as the credit crisis deepens. The U.S. government hopes to boost struggling financial companies through a $700 bailout plan, of which some of the money would be used to recapitalize hobbled U.S. banks through direct investments.
But, for the most part, analysts appeared relieved.
"Worst case, if confidence does not return, we believe Mitsubishi would likely step in to protect its investment by buying a majority stake in Morgan Stanley," said James Mitchell, an analyst with Buckingham Research Group. He said such a transaction would combine "Morgan Stanley with the deposit-rich balance sheet of Mitsubishi."
The government was instrumental in ushering through a deal for Morgan Stanley by assuring Mitsubishi UFJ that its investment would be protected. The Japanese lender, the world's second-largest bank, agreed late Sunday on amended terms that were slightly more favorable to it.
"Despite a very challenging environment, (Mitsubishi UFJ) and Morgan Stanley have demonstrated our mutual commitment to this strategic alliance and have revised the terms of our investment in the best interests of both companies and our shareholders," said Nobuo Kuroyanagi, the Japanese bank's president and CEO, in a statement.
Under the revised deal, Mitsubishi will receive only preferred shares, with $7.8 billion eventually convertible to common stock. The original deal called for Mitsubishi to receive a mix of preferred and common stock.
The new deal enables Mitsubishi to receive a dividend on the entire investment, and calls for a lower conversion price when the preferred stock is eventually converted to common stock.
The deal came last month as the credit crisis worsened and competitor Lehman Brothers Holdings Inc. filed for bankruptcy and Merrill Lynch & Co. was sold to Bank of America. Morgan Stanley and Goldman Sachs, the last two major Wall Street investment banks standing, changed their status to bank holding companies to obtain the kind of large deposit base that analysts believe helps add stability.
The change was precipitated by fears that stand-alone investment banks might no longer be viable operations as credit markets continue to worsen.
Aside from the cash investment, Mitsubishi will receive one seat on Morgan Stanley's board of directors, and the pair plan to work jointly as part of a global strategic alliance.
The pair said they have already identified multiple areas for potential collaboration, including corporate and investment banking, certain parts of retail banking and asset management, as well as lending activities such as corporate loans.

Big Presidential Vote Count Error Found and Fixed in New Mexico

2008-10-05T07:00:00.002-05:00

By Steven Rosenfeld . Posted October 4, 2008.

A test in Santa Fe County finds and fixes an error that could have cost Democrats thousands of votes.

An electronic voting machine test in Santa Fe County, New Mexico, on Friday revealed a programming error that, had it not been caught and corrected before the start of early voting next week, would not have counted hundreds -- or possibly thousands -- of votes for president and U.S. Senate in this Democratic stronghold.

The software error concerned straight party voting, where voters fill in one oval on their paper ballot that indicates they want to vote for all the candidates from a political party. The test revealed that the precinct optical-scanner computers, which read hand-marked paper ballots and compile the precinct vote totals, were not counting "straight party" votes for president and U.S. Senate.

"It was a simple error," said Rick Padilla, a senior system supervisor for the Santa Fe County Clerk office, which runs county elections. "When they did the programming, they didn't link the oval to the (presidential and senatorial votes on the) straight party ticket."

"It is one of the things that always has to be checked really carefully in a general election," said Terry Rainey of Automated Election Services, the company that programs the tabulator and provides other voting services in New Mexico. "That is why we test."

Padilla and Rainey both said that the vote count programming error was not found in any other New Mexico county. Across the state, county officials were testing voting machines before the start of early voting on Tuesday. No explanation was given for what caused the programming error.

"The county was trying to get a head start," Rainey said, describing its testing. "They saw it today in a real live test. It was fixed to the satisfaction of the (county) Democratic and Republican party chairs."

County political leaders could not be reached for comment late Friday.

The problem occurred in the ballot definition file, a software program that tells the tabulating device, in this case the ES&S Model 100 precinct based optical scanner, how to interpret the voter's marks on the ballot. As Ellen Theisen of VotersUnite.org explained in her paper "Ballot Definition Files:"

"Ballot definition data is constructed for each specific election and contains all the details about that election. The DRE or optical scanner uses the ballot data to determine how selections on the screen or ballot are recorded in the vote database, which contains the results. The tally software uses the ballot data as a 'key' when it interprets the content of the vote database and calculates the final tallies. Without the ballot data, the system cannot function. With incorrect ballot data, the system functions incorrectly."

New Mexico Election Integrity Issues

Since the 2004 election, New Mexico has shifted to voting on hand-marked paper ballots that are scanned by optical scan computer counters. That transition came after election integrity activists found that paperless electronic voting machines used in the 2004 presidential election did not record more than 21,000 votes for president -- many in historically Democratic strongholds.

There were many explanations offered for the so-called presidential undervote, but the activists tend to believe that voters may have touched the electronic voting machine's screen more than once, which, instead of emphasizing the presidential choice, actually deselected or erased their presidential vote.

Because George W. Bush beat John Kerry in 2004 in New Mexico by slightly less than 6,000 votes, the high undervote rate was among the factors that prompted the state to return to using hand-marked paper ballots. That way, if there was another close count, county election officials could audit or recount the paper ballots to settle disputes, advocates argued.

What is unsettling about the test in Santa Fe County on Friday was the fact that the error affected the two most hotly contested races on the ballot -- president and U.S. senator. A more likely programming error would have have either affected all the party's candidates globally or a single race.

Friday's test raised eyebrows because while it could have affected voters in both parties who voted a straight party ticket, Santa Fe County is predominantly Democratic. In February 2008, more than 20,000 people participated in the Democratic presidential caucus. In contrast, 4,445 voted in the county's Republican primary in June.

Thus, hundreds if not thousands of potential presidential votes -- most for Democrats -- could have been lost had county officials not discovered the software error in testing.

A ballot definition file error could cause miscounts or lost votes on any electronic voting system. The only check on the accuracy of these files occurs during pre-election testing.

The M100 tabulator is used in numerous swing states such as Montana, Iowa and Indiana, according to VerifiedVoting.org, a nonpartisan group that tracks electronic voting issues.

"The main thing is this is a recoverable error," said Pam Smith, president of the Verified Voting Foundation. "In New Mexico they have paper ballots. They can recount them if you need to. New Mexico has a (vote count) audit provision (in state law). … In another state, if this happens, you could miss a ballot definition file error."

"That is something that other jurisdictions should be aware of," Smith said. "They should do pilot audits."

Any thoughts??? Especially regarding the 2004 election.

How Government Stoked the Mania

2008-10-03T05:18:00.002-05:00

Housing prices would never have risen so high without multiple Washington mistakes.

By RUSSELL ROBERTS

Many believe that wild greed and market failure led us into this sorry mess. According to that narrative, investors in search of higher yields bought novel securities that bundled loans made to high-risk borrowers. Banks issued these loans because they could sell them to hungry investors. It was a giant Ponzi scheme that only worked as long as housing prices were on the rise. But housing prices were the result of a speculative mania. Once the bubble burst, too many borrowers had negative equity, and the system collapsed.

David Klein
Part of this story is true. The fall in housing prices did lead to a sudden increase in defaults that reduced the value of mortgage-backed securities. What's missing is the role politicians and policy makers played in creating artificially high housing prices, and artificially reducing the danger of extremely risky assets.

Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.

Hear No Evil

What some Congresspeople said about Fannie and Freddie.

Fannie and Freddie also purchased hundreds of billions of subprime securities for their own portfolios to make money and to help satisfy HUD affordable housing goals. Fannie and Freddie were important contributors to the demand for subprime securities.

Congress designed Fannie and Freddie to serve both their investors and the political class. Demanding that Fannie and Freddie do more to increase home ownership among poor people allowed Congress and the White House to subsidize low-income housing outside of the budget, at least in the short run. It was a political free lunch.

The Community Reinvestment Act (CRA) did the same thing with traditional banks. It encouraged banks to serve two masters -- their bottom line and the so-called common good. First passed in 1977, the CRA was "strengthened" in 1995, causing an increase of 80% in the number of bank loans going to low- and moderate-income families.

Fannie and Freddie were part of the CRA story, too. In 1997, Bear Stearns did the first securitization of CRA loans, a $384 million offering guaranteed by Freddie Mac. Over the next 10 months, Bear Stearns issued $1.9 billion of CRA mortgages backed by Fannie or Freddie. Between 2000 and 2002 Fannie Mae securitized $394 billion in CRA loans with $20 billion going to securitized mortgages.

By pressuring banks to serve poor borrowers and poor regions of the country, politicians could push for increases in home ownership and urban development without having to commit budgetary dollars. Another political free lunch.

Fannie and Freddie and the banks opposed these policy changes at first through both lobbying and intransigence. But when they found out that following these policies could be profitable -- which they were as long as rising housing prices kept default rates unusually low -- their complaints disappeared. Maybe they could serve two masters. They turned out to be wrong. And when Fannie and Freddie went into conservatorship, politicians found out that budgetary dollars were on the line after all.

While Fannie and Freddie and the CRA were pushing up the demand for relatively low-priced property, the Taxpayer Relief Act of 1997 increased the demand for higher valued property by expanding the availability and size of the capital-gains exclusion to $500,000 from $125,000. It also made it easier to exclude capital gains from rental property, further pushing up the demand for housing.

The Fed did its part, too. In 2003, the federal-funds rate hit 40-year lows of 1.25%. That pushed the rates on adjustable loans to historic lows as well, helping to fuel the housing boom.

The Taxpayer Relief Act of 1997 and low interest rates -- along with the regulatory push for more low-income homeowners -- dramatically increased the demand for housing. Between 1997 and 2005, the average price of a house in the U.S. more than doubled. It wasn't simply a speculative bubble. Much of the rise in housing prices was the result of public policies that increased the demand for housing. Without the surge in housing prices, the subprime market would have never taken off.

Fannie and Freddie played a significant role in the explosion of subprime mortgages and subprime mortgage-backed securities. Without Fannie and Freddie's implicit guarantee of government support (which turned out to be all too real), would the mortgage-backed securities market and the subprime part of it have expanded the way they did?

Perhaps. But before we conclude that markets failed, we need a careful analysis of public policy's role in creating this mess. Greedy investors obviously played a part, but investors have always been greedy, and some inevitably overreach and destroy themselves. Why did they take so many down with them this time?

Part of the answer is a political class greedy to push home-ownership rates to historic highs -- from 64% in 1994 to 69% in 2004. This was mostly the result of loans to low-income, higher-risk borrowers. Both Bill Clinton and George W. Bush, abetted by Congress, trumpeted that rise as it occurred. The consequence? On top of putting the entire financial system at risk, the hidden cost has been hundreds of billions of dollars funneled into the housing market instead of more productive assets.

Beware of trying to do good with other people's money. Unfortunately, that strategy remains at the heart of the political process, and of proposed solutions to this crisis.

Mr. Roberts is a professor of economics at George Mason University and a scholar at the Mercatus Center. His latest book is a novel on how markets work, "The Price of Everything: A Parable of Possibility and Prosperity" (Princeton University Press, 2008).

NOW THE BIG QUESTION REGARDING THE BAILOUT IS HAVE THEY ADDRESSED THE CRA AND FRANNIE/FREDDIE TO PREVENT THIS FROM HAPPENING AGAIN? IF NOT WHY? THAT IS THE REAL QUESTION.

What They Said About Fan and Fred

2008-10-02T05:18:00.001-05:00

From WSJ -
What's wrong with this picture?

House Financial Services Committee hearing, Sept. 10, 2003:

Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .
[What They Said] AP

Clockwise from top left: Sen. Thomas Carper, Rep. Barney Frank, Sen. Robert Bennett, Rep. Maxine Waters, Sen. Chris Dodd and Sen. Charles Schumer.

Rep. Maxine Waters (D., Calif.), speaking to Housing and Urban Development Secretary Mel Martinez:

Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?
* * *

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
* * *

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Gregory Meeks, (D., N.Y.): . . . I am just pissed off at Ofheo [Office of Federal Housing Enterprise Oversight] because if it wasn't for you I don't think that we would be here in the first place.
[nowides]
Fannie Mayhem: A History

A compendium of The Wall Street Journal's recent editorial coverage of Fannie and Freddie.

And Freddie Mac, who on its own, you know, came out front and indicated it is wrong, and now the problem that we have and that we are faced with is maybe some individuals who wanted to do away with GSEs in the first place, you have given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they have done a tremendous job. . .

Ofheo Director Armando Falcon Jr.: Congressman, Ofheo did not improperly apply accounting rules; Freddie Mac did. Ofheo did not try to manage earnings improperly; Freddie Mac did. So this isn't about the agency's engagement in improper conduct, it is about Freddie Mac. Let me just correct the record on that. . . . I have been asking for these additional authorities for four years now. I have been asking for additional resources, the independent appropriations assessment powers.

This is not a matter of the agency engaging in any misconduct. . . .

Rep. Waters: However, I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn't broke. Housing is the economic engine of our economy, and in no community does this engine need to work more than in mine. With last week's hurricane and the drain on the economy from the war in Iraq, we should do no harm to these GSEs. We should be enhancing regulation, not making fundamental change.

Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals. . . .

Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?

Mr. Raines?

Mr. Raines: No, sir.

Mr. Frank: Mr. Gould?

Mr. Gould: No, sir. . . .

Mr. Frank: OK. Then I am not entirely sure why we are here. . . .

Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
* * *

Senate Banking Committee, Oct. 16, 2003:

Sen. Charles Schumer (D., N.Y.): And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.

Mr. Raines: But more importantly, banks are in a far more risky business than we are.
* * *

Senate Banking Committee, Feb. 24-25, 2004:

Sen. Thomas Carper (D., Del.): What is the wrong that we're trying to right here? What is the potential harm that we're trying to avert?

Federal Reserve Chairman Alan Greenspan: Well, I think that that is a very good question, senator.

What we're trying to avert is we have in our financial system right now two very large and growing financial institutions which are very effective and are essentially capable of gaining market shares in a very major market to a large extent as a consequence of what is perceived to be a subsidy that prevents the markets from adjusting appropriately, prevents competition and the normal adjustment processes that we see on a day-by-day basis from functioning in a way that creates stability. . . . And so what we have is a structure here in which a very rapidly growing organization, holding assets and financing them by subsidized debt, is growing in a manner which really does not in and of itself contribute to either home ownership or necessarily liquidity or other aspects of the financial markets. . . .

Sen. Richard Shelby (R., Ala.): [T]he federal government has [an] ambiguous relationship with the GSEs. And how do we actually get rid of that ambiguity is a complicated, tricky thing. I don't know how we do it.

I mean, you've alluded to it a little bit, but how do we define the relationship? It's important, is it not?

Mr. Greenspan: Yes. Of all the issues that have been discussed today, I think that is the most difficult one. Because you cannot have, in a rational government or a rational society, two fundamentally different views as to what will happen under a certain event. Because it invites crisis, and it invites instability. . .

Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .
* * *

Senate Banking Committee, April 6, 2005:

Sen. Schumer: I'll lay my marker down right now, Mr. Chairman. I think Fannie and Freddie need some changes, but I don't think they need dramatic restructuring in terms of their mission, in terms of their role in the secondary mortgage market, et cetera. Change some of the accounting and regulatory issues, yes, but don't undo Fannie and Freddie.
* * *

Senate Banking Committee, June 15, 2006:

Sen. Robert Bennett (R., Utah): I think we do need a strong regulator. I think we do need a piece of legislation. But I think we do need also to be careful that we don't overreact.

I know the press, particularly, keeps saying this is another Enron, which it clearly is not. Fannie Mae has taken its lumps. Fannie Mae is paying a very large fine. Fannie Mae is under a very, very strong microscope, which it needs to be. . . . So let's not do nothing, and at the same time, let's not overreact. . .

Sen. Jack Reed (D., R.I.): I think a lot of people are being opportunistic, . . . throwing out the baby with the bathwater, saying, "Let's dramatically restructure Fannie and Freddie," when that is not what's called for as a result of what's happened here. . . .

Sen. Chuck Hagel (R., Neb.): Mr. Chairman, what we're dealing with is an astounding failure of management and board responsibility, driven clearly by self interest and greed. And when we reference this issue in the context of -- the best we can say is, "It's no Enron." Now, that's a hell of a high standard.

Political Humor

2008-10-01T08:17:00.001-05:00

Jay Leno: "As you know, Congress voted against the bailout. See, the problem" in this case is that "members of Congress...were told to vote their conscience. And of course, this totally confused them. 'Conscience?'"

David Letterman: "I guess you heard the news" that "the House killed the bailout plan. So Washington failed to act? Oh, I didn't see that coming. Wow!"

David Letterman: "But...we have the big vice presidential debate coming up on Thursday," and "Sarah Palin is busy preparing." Right now, for example, "she is practicing her caribou caught in the lights look."

The American Public Fights Back

2008-09-30T07:38:00.001-05:00

The public has spoken about the bailout and the answer, at least for now, is "no way." Amid great drama, the House voted down the plan, 228 to 205.

Congress has been flooded by angry phone calls and emails from many constituents opposed to the $700 billion bailout. So even Members inclined to support the legislation have been subjected to intense pressure from the American public.

Americans are grappling with the most basic principles of our national identity - the role of government and the merits of a free-market system. The debate has opened up a dividing line. Where do you stand?

This is the real question at stake here. Below is a clip that goes into more details

http://finance.yahoo.com/tech-ticker/article/79565/The-American-Public-Fights-Back?tickers=%5Edji,%5Eixic,%5Egspc

Bush warns 'entire economy is in danger'

2008-09-24T23:05:00.000-05:00

WASHINGTON - President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said.

"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."

Said Bush: "We must not let this happen."

The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.

Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.

"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.

The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.

But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.

Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.

But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.

Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.

In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates — bitterly fighting each other for the White House but coming together over this issue — said the situation offers a chance for politicians to prove Washington's worth.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."

However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.

White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."

But that has not closed the deal, which for many recalls previous warnings of grave threats from Bush — such as before the Iraq war — that did not materialize. So Bush's goal with his speech, his first prime-time address in 377 days, was to frame the debate in layman's terms to show the depths of the crisis, explain how it affects the people's daily lives and inspire the public to demand action from Washington.

He said that more banks could fail, the stock market could plummet and erase retirement accounts, businesses could find it hard to get credit and be forced to close, wiping out jobs for millions of Americans.

He ended on a positive note, predicting lawmakers would "rise to the occasion" and that the nation's economy will overcome "a moment of great challenge."

With so many crises hitting the United States at once, the presidential race has taken a back seat and so has Bush's involvement in politics. Bush canceled a campaign trip to Florida on Wednesday to deal with the problem, the third time in a week that he has scrapped his attendance at out-of-town fundraisers, either because of the market turmoil or Hurricane Ike.

The economic crisis also is almost certain to overshadow the rest of Bush's four months left in office and could hugely impact his legacy. It has been assumed that the long-term view of Bush's presidency was to be shaped largely by Iraq, Hurricane Katrina and the Sept. 11, 2001, attacks. Now, the dire economic problems and the aftermath of the government's attempted solution will certainly be added to that list.

Good humor

2008-09-24T10:16:00.000-05:00

Jay Leno: "Oh, more bad news from President Bush. Remember those rebate checks from a few months ago? He wants them back. Yeah! We need to give that money to rich people on Wall Street. They need it more than you do!"

2008-09-22T21:23:00.002-05:00

hi guys!
so im taking a class called the american political system and its super similar to ap gov! were also required to take one class all about chicago and i chose representation and representatives of chicago. we just played the redistricting game yesterday and i was basically a pro. =]

i hope school is going well for everyone! i like to be nerdy and check this thing once in awhile!

White House warned 17 times about problems with Fannie and Freddie

2008-09-22T14:20:00.000-05:00

September 22, 2008 - 11:07 ET

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

(White House Press Release)

Obama goes negative

2008-09-22T08:21:00.001-05:00

I thought this was an interesting video.

http://www.cnn.com/video/#/video/politics/2008/09/19/johns.raw.politics.ads.cnn

Judge Orders Cheney to Preserve Records

2008-09-21T06:33:00.001-05:00

Interesting argument. Constitutionally what do you think????

Associated Press

WASHINGTON -- A federal judge on Saturday ordered Dick Cheney to preserve a wide range of the records from his time as vice president.

The decision by U.S. District Judge Colleen Kollar-Kotelly is a setback for the Bush administration in its effort to promote a narrow definition of materials that must be safeguarded under by the Presidential Records Act.

The Bush administration's legal position "heightens the court's concern" that some records may not be preserved, said the judge.

A private group, Citizens for Responsibility and Ethics in Washington, is suing Mr. Cheney and the Executive Office of the President in an effort to ensure that no presidential records are destroyed or handled in a way that makes them unavailable to the public.

In a 22-page opinion, the judge revealed that in recent days, lawyers for the Bush administration balked at a proposed agreement between the two sides on how to proceed with the case.

Mr. Cheney and the other defendants in the case "were only willing to agree to a preservation order that tracked their narrowed interpretation" of the Presidential Records Act, wrote Judge Kollar-Kotelly.

The administration, said the judge, wanted any court order on what records are at issue in the suit to cover only the office of the vice president, not Mr. Cheney or the other defendants in the lawsuit. The other defendants include the National Archives and the archivist of the U.S.

The lawsuit stems from Mr. Cheney's position that his office is not part of the executive branch of government.

This summer, Cheney chief of staff David Addington told Congress the vice president belongs to neither the executive nor legislative branch of government, but rather is attached by the Constitution to Congress. The vice president presides over the Senate.

The lawsuit alleges that the Bush administration's actions over the past 7 1/2 years raise questions over whether the White House will turn over records created by Mr. Cheney and his staff to the National Archives in January.

In 2003, Mr. Cheney asserted that the office of the vice president is not an entity within the executive branch.

Two historians and three groups of historians and archivists joined CREW in filing the suit two weeks ago.

Good clip regarding government issues and the economy

2008-09-20T07:29:00.000-05:00

http://online.wsj.com/video/a-change-in-the-government-agenda/2FAB9F0B-F3C9-4991-B4E6-32AADFCDD7F0.html

Why It's Getting Mean

2008-09-20T07:23:00.001-05:00

Does the election really matter??? will a new president change anything?? - Mr. Schwager

Supporters of both candidates doubt their man is up to the job.

*
By PEGGY NOONAN - WSJ

The financial crisis changes the entire shape and feel of the presidential election. It isn't just bad news, it's bad news that reveals what many people deep down feared, and hoped not to see revealed: that the huge and sprawling financial system of Wall Street is maintained essentially on faith, mood and assumption; that its problems are deep; that at some level the system looks to have been a house of cards. It isn't just bad news; it's deep bad news that reaches into the heart of widespread national anxiety.
[Declarations] Martin Kozlowski

Everyone is afraid—the rich that they will no longer be rich, the poor that they'll be hit first by the downturn in the "last hired, first fired" sense, the middle class that it will be harder now to maintain their hold on middle-classness.

Both the Democrats and the Republicans spent the week treating the catastrophe as a political opportunity. This was unserious. A serious approach might have addressed large questions such as: Was this crisis not, at bottom, a failure of stewardship?

Instead, from Barack Obama: It's the Republicans' fault, and John McCain means more of the same. From McCain: We're reformers and we'll clean up the mess, unlike Mr. I Can't Think of Anything to Do but Raise Taxes.

Open question only history will answer: President Bush did not address the nation on the crisis until Thursday of this week, almost a week after it began, and Democrats are going to try to paint this as 9/11 times Katrina: Where was he? Will this work? Will it stick? They're going to try to turn Mr. Bush into Herbert Hoover. Hoover was not good for the Republican brand.

The economic crisis brings a new question, unarticulated so far but there, and I know because when I mention it to people they go off like rockets. It is: Do you worry that neither of them is up to it? Up to the job in general? Is either Mr. McCain or Mr. Obama actually up to getting us through this and other challenges? I haven't heard a single person say, "Yes, my guy is the answer." A lot of shrugging is going on out there. This is a read not only on the men but on the moment.

The overarching political question: In a time of heightened anxiety, will people inevitably lean toward the older congressional vet, the guy who's been around forever? Why take a chance on the new, young man at a time of crisis? Wouldn't that be akin to injecting an unstable element into an unstable environment? There's a lot at stake.

Or will people have the opposite reaction? I've had it, the system has been allowed to corrode and collapse under seven years of Republican stewardship. Throw the bums out. We need change. Obama may not be experienced, but that may help him cut through. He's not compromised.

The election, still close, still unknowable, may well hinge on whether people conclude A or B.

A mere hunch in a passing moment: In a time of crisis, confusion and fear, Americans just might, in their practicality, turn back to the old tradition of divided government. They know the Congress will be Democratic. They assume it will soon be more Democratic. Therefore the president they choose may well be of the other party.

A fearless prediction: My beautiful election enters its dark phase.

Lots of signs of the new darkness. Mr. Obama's army is swarming, blocking lines when Obama critics show up for radio interviews. A study out Thursday said the Obama campaign has become more negative than the McCain campaign. There is the hacking—no one at this point knows by whom—of Sarah Palin's personal email account. From Mr. Obama himself, a new edge. He tells an audience in Elko, Nev., to "argue" with McCain supporters and "get in their face." Bambi is playing Chicago style. No doubt everyone around him has been saying, and for some weeks now, "Get tough." But this is not how to get tough, and it does not reflect a shrewd reading of what the moment demands. People want depth, not ferocity. We've got nerves that jingle-jangle-jingle.

And it gives Mr. McCain a beautiful opening. He can now play Oldest and Wisest, damning the new meanness more in sorrow than in anger.

There's another reason things will get more mean than meaningful. Here is the tough, sad, rather deadly assumption I see rising among our media people, our thinkers, observers and chatterers, the highly sophisticated who've seen'em come and seen'em go: It is, again: What if neither of them is the right man? What if neither of them is equal to the moment? What if neither party is equal to the moment?

This is not in itself important—who cares what they think, really? But there will be a small impact in terms of tone. If you are a longtime Obama supporter and are beginning now to admit to deep doubts, you can't just announce you've been wrong for the past year. You'd look like a fool. You cannot speak credibly, or in a way you yourself believe, in rosy support. But what you can do is turn, with new rage, on the guy you've at least long opposed. So you ignore Mr. Obama and attack Mr. McCain with new ferocity. Or, if you have doubts about Mr. McCain, you ignore him and turn your heat on Mr. Obama.

The Obama campaign has been one of real dignity and cool, and in this it reflected its candidate. It won't be good to see this end. It will be sad, actually.

On the Republican side, the legitimate anger sparked by the media's personal attacks on Sarah Palin and her family has now been funneled, coolly and almost chillingly, into antimedia manipulation. This is no good. It may help the Republicans win, because no one likes the media. Even the media doesn't like the media. But it invites charges of winning bad. And if you win bad in a 50/50 nation, it makes it really hard to govern.

A final point. Do you ever have the passing thought that the presidential election doesn't matter as much as we think? Whoever wins will govern within more of less the same limits, both domestically and internationally. A New York liberal leaning toward Mr. McCain told me this week he has no fear that Mr. McCain may be a more militant figure than Mr. Obama. We already have two wars, "we're out of army." Even if Mr. McCain wanted a war, he said, he couldn't start one.

I wonder if we follow the election so passionately because we're afraid. We're afraid a lot of our national problems are intractable, and the future too full of challenge.

We cannot tolerate feeling this way. So we make believe the election can change everything. And we follow it passionately to convince ourselves its outcome will be decisive and make everything better. We reassure ourselves with pictures of the cheering crowds at the rally. We even find some comfort in the latest story of the latest dirty trick. But deep inside we think: Ah, that won't work either.

Some part of me thinks we are all making believe this is a life-changing election because we know it's not a life-changing election. Ever have that thought? Me too. Then there's a rally or a scandal or a gaffe, and it passes.

Industry Lobbyists Go After Candidates

2008-09-20T07:14:00.000-05:00

By ELIZABETH WILLIAMSON
WSJ

WASHINGTON -- Top lobbyists for the financial-services industry are feverishly working connections inside both presidential campaigns, hoping to influence a torrent of regulation certain in the aftermath of the market crisis.

As the financial-market crisis has deepened, economic advisers from both campaigns have reached out to the big industry lobbying groups, vetting ideas on what they should do.
[Working It]

It is the "dirty little secret in town," said one financial-services lobbyist -- that after lambasting lobbyists on the stump, the candidates need their counsel on how to respond to a crisis with origins too complicated for most industry outsiders to understand.

"It's a dialogue...that's taken on a greater urgency in the last couple of weeks," said Steve O'Connor, senior vice president for government affairs at the Mortgage Bankers Association. The group is urging caution on regulatory proposals, he said, telling both camps, "You want to get it right."

The financial industry has invested heavily in that dialogue, giving $22.5 million in the current election cycle to Sen. Barack Obama, the Democratic candidate, and $19.6 million to Sen. John McCain, the Republican nominee, according to data from the Center for Responsive Politics.

This week, two of the biggest financial groups in Washington, the Financial Services Roundtable and the Mortgage Bankers Association, have drawn in members from across the country to grill economic advisers from both campaigns, develop policy positions and urge prudence as both parties struggle to craft a regulatory stance on the deepening crisis.

The Financial Services Roundtable has developed draft legislation that calls for the Federal Reserve to regulate brokerages and dealers that seek access to its discount window; a new federal insurance regulator within Treasury; and a mechanism for federal agencies to coordinate regulation among themselves.

The group will fine-tune that proposal at a meeting this week with the chief executives from more than 50 banks, brokerages and insurers, a three-day confab that Thursday included a private session with Obama economic adviser Ian Solomon and McCain adviser Ike Brannon.

The intensifying activity reflects industry concern that the candidates -- under the gun to say what they would do to solve the crisis -- will push solutions the industry can't live with.

Thursday, Sen. McCain said Wall Street had become a "casino" and said he would fire the current head of the Securities and Exchange Commission, Christopher Cox. Sen. McCain called for a new government entity that would buy the assets of troubled companies, then sell them off in better times.

While campaigning Thursday, Sen. Obama said that the Fed's effort to pump billions of dollars into global financial markets to ease liquidity problems was important to "maintain the functioning of our financial system and the flow of credit to American households and businesses."

Sen. Obama said he planned to meet Friday with his top economic advisers to craft a "Homeowner and Financial Support Act" that would provide capital to the financial system, liquidity to the markets and help for families who need to restructure mortgages they can't afford.

At the Financial Services Roundtable gathering, attendees heard Wednesday from House Ways and Means Chairman Charles Rangel (D., N.Y.) and Treasury Secretary Hank Paulson.

Thursday, the group's CEOs agreed to advocate for a change in accounting rules. The proposal would require financial-services firms to state their assets' value on balance sheets based on the assets' purchase price rather than market value, an approach that in the current climate has weakened companies' balance sheets.

American Bankers Association President and CEO Ed Yingling said the group is watching to see how regulation of securities houses affects its members. The group will appeal to the campaigns for prudence, should the Fed take a broader regulatory role.

The Mortgage Bankers Association has been in formal and informal contact with both campaigns. Next month, it will host Mr. Solomon for a discussion of economic policy and regulation.

How did this happen to the economy?

2008-09-19T05:09:00.000-05:00

http://www.foxbusiness.com/video/index.html?playerId=videolandingpage&streamingFormat=FLASH&referralObject=3096191&referralPlaylistId=1292d14d0e3afdcf0b31500afefb92724c08f046

More Contradictions from the Party of Less Government

2008-09-19T04:44:00.002-05:00

Charles Wheelan, Ph.D. The Naked Economist

Posted on Wednesday, September 17, 2008, 12:00AM

All hell is breaking loose on Wall Street, and one of the more subtle things the crisis has exposed is a growing ideological rift in the Republican Party that's starting to border on intellectual incoherence.

Wanting It Both Ways

The traditional small government, "hands off" wing has always argued for minimal regulation and healthy dollops of personal responsibility. This line of thinking suggests that the appropriate response to the Lehman collapse is for investors and executives to exercise more caution in the future. That's how markets work.

Yet there's now a competing populist strand of the party that seeks to protect the "little guy" against greed and incompetence. John McCain was quoted in the New York Times earlier this week as saying that our economy has been put at risk "because of the greed by some based in Wall Street and we have got to fix it."

The problem is that you can't simultaneously embrace markets and personal responsibility and then, when those markets have a car wreck, argue that it's the government's job to protect us against rapacious Wall Street traders.

Fault Lines Exposed

This is just a tiny example of a phenomenon that's been developing through the Bush presidency and into this campaign. Do you remember Sarah Palin's rousing convention speech? Forget the "First Dude," the hockey mom thing, the eyeglasses, and even whether she did or did not support the "Bridge to Nowhere."

Instead, just pay attention to what she said and what it means for the growing contradictions within the GOP. For those who were paying attention, Palin raised two issues that should have exposed the fault lines that will eventually consume her party.

First, do Republicans favor small government, or do they think that government should provide more assistance for families with children who have special needs? Because you can't have it both ways.

A Dual-Sided Speech

In her critique of Barack Obama, Palin told the adoring crowd, "Government is too big ... [Obama] wants to grow it." That's a legitimate point. And it's consistent with Ronald Reagan's famous assertion that the nine most dangerous words in the English language are "I'm from the government and I'm here to help."

The Republicans are supposed to stand for less government -- lower taxes, less regulation, and, as a result, more personal responsibility and self-reliance. That's one of the most important and defensible tenets of the party.

But wait! Was that the same ostensible conservative telling the audience, "To the families of special-needs children all across this country, I have a message: For years, you sought to make America a more welcoming place for your sons and daughters. I pledge to you that if we are elected, you will have a friend and advocate in the White House."

Whose Special Needs?

Why are families who have children with special needs any different from farmers at risk of losing their land, workers who need health insurance, employees hurt on the job, families dealing with parents who have Alzheimer's disease, veterans eating out of trash bins, and so on. If you have those problems, then "a friend and advocate in the White House" is big government.

But if you happen to have a special-needs child, apparently that's different because Palin happens to share your challenge. And if one of her family members happens to get Alzheimer's, then maybe we'll have new programs for that, too.

Palin's speech suggested that, again, the Republicans want it both ways -- and it's no anomaly. This explains how the Republicans can talk about small government and then deliver huge new programs like Medicare prescription drug coverage, the largest expansion of entitlement spending in decades.

Or how the party of personal responsibility is fielding a ticket whose website calls for "aggressive federal action to help keep 200,000 to 400,000 families from losing their homes."

Governing Through Inefficiency

The second point is more subtle but ultimately more damning of the Republicans: How can the government be inefficient and ineffective at most things it does -- and yet perfectly able to decide who should be held indefinitely at Guantanamo Bay without even rudimentary legal protections?

Governor Palin told the convention, "Al-Qaeda terrorists still plot to inflict catastrophic harm on America ... [Obama's] worried that someone won't read them their rights." The Republicans have consistently promised to get tough on terrorists -- no problem there. A terrorist organization with a nuclear weapon is arguably the most dangerous threat we must confront. But Palin was also mocking our basic legal protections, and that's a huge, scary mistake.

Believe it or not, the reason her position makes so little sense is rooted in economics. Researchers have long recognized that any time we test or screen for something -- whether it's detecting prostate cancer or keeping hijackers off airplanes -- there's an unavoidable tradeoff. The more sensitive the screen, the greater the risk that you tell someone they have cancer when they don't, or that you'll stop a guy in the airport security line because he has a big belt buckle and not a hand grenade.

But if you design a less sensitive test to avoid "false positives," then occasionally you won't catch a tumor or the guy trying to board an airplane with a semiautomatic weapon -- a "false negative."

Missing the Tradeoff

The challenge of terrorism is that both false positives and false negatives are unacceptable. We can't let just a few terrorists slip in. But if we design a system so sensitive that it will catch every person who has the potential to do us harm, then we're almost certainly going to snare plenty of people who've done nothing wrong.

Palin's smug line about reading terrorists their rights misses this inevitable tradeoff. The tougher we are on potential terrorists, the more legal protections we need to fix our inevitable mistakes. That's not politics, it's basic logic. Should we send everyone who sets off an airport metal detector straight to prison and leave them there indefinitely?

There's a philosophical inconsistency to the GOP position as well. The Republicans are skeptics about the limits to what government can or should do. Again, this is a reasonable position; without market competition, the government tends to be slow, inefficient, and largely unaccountable.

But how can the party that so vociferously (and effectively) maligns government be willing to entrust so much unchecked power to that very same government when it comes to arresting people and holding them without trial? Would you let the Post Office or the IRS or FEMA send people away indefinitely? If not, why should we entrust any other bureaucracy with that power?

Identity Crisis

Remember, this is the party that has historically opposed gun registration for fear that the government might someday swoop in and take away guns from its citizens. Where's that paranoia and distrust of authority when we need it most?

Yes, the Democrats have heaps of problems of their own. A reasonable person can agree with everything I've written here and still conclude that the Republicans are less dysfunctional than the Democrats.

But that doesn't answer the question that's been festering since the Reagan presidency, and has been highlighted anew by McCain's nod to the Palin wing of the party and by his response to the Wall Street carnage: Who are the Republicans, and what do they stand for?

President Bush broke the mold for traditional conservatives, is McCain going to continue the move? If so where do those conservatives go to vote? Check out the FL polls(McCain v Obama, and the one with all Candidates.