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Earmarks get ax from GOP senators

Posted on November 16, 2010 by admin| Comments Off

Washington (CNN) — The GOP caucus in the Senate agreed Tuesday night to ban earmarks, a policy House Republicans already have in place and are expected to keep in the new Congress.

The idea of prohibiting members from designating funding for specific projects in their states or districts is popular with reform-minded deficit hawks, but it has traditionally been opposed by some congressional veterans trying to steer funds to constituencies back home.

Senate Minority Leader Mitch McConnell, R-Kentucky, a longtime defender of earmarks, announced Monday that he would vote for the ban.

“I’m not wild about turning over more spending authority to the executive branch, but I have come to share the view of most Americans that our nation is at a crossroads,” McConnell said on the Senate floor. The “only way we will be able to turn the corner and save our future is if elected leaders like me make the kinds of difficult decisions voters are clearly asking us to make.”

But McConnell also expressed his own personal conflict on the issue.

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“Make no mistake, I know the good that has come from the projects I have helped support throughout my state. I don’t apologize for them,” McConnell said. “But there is simply no doubt that the abuse of this practice has caused Americans to view it as a symbol of the wasted and the out-of-control spending that every Republican in Washington is determined to fight.”

President Barack Obama responded with a statement welcoming McConnell’s “decision to join me and members of both parties who support cracking down on wasteful earmark spending, which we can’t afford during these tough economic times.”

But the president added, “We can’t stop with earmarks as they represent only part of the problem.”

As Republicans voted in their caucus, Democratic Sen. Claire McCaskill of Missouri said she wants the full Senate to vote on a binding moratorium that would include Democrats, too.

“The arguments against this, every single one of them, I just don’t think pass the smell test,” she said about senators who oppose a ban.

But Senate Majority Leader Harry Reid, D-Nevada, later indicated disagreement with McCaskill. Reid defended earmarks Tuesday, telling Capitol Hill reporters he has “an obligation to the people of Nevada … not to some bureaucrat with green eyeshades.”

“I think (an earmark ban is) a tremendous step backward,” Reid said. “It just gives more power to the executive. … I am not in favor of delegating my constitutional responsibility to the White House.”

Nevertheless, McCaskill’s push puts pressure on Senate Democrats, many of whom agree with Reid, to get behind a ban, which has taken on increased political significance in light of Tea Party gains in the midterm elections.

McCaskill is working with Republican Sen. Tom Coburn of Oklahoma on an earmark-ban amendment they might add to a food safety bill that’s expected to be on the floor later this week. She is working with Democratic leaders to schedule a vote.

The ban would come in the form of a change in Senate rules, an aide to Coburn explained. Senators would be allowed to raise points of order against bills with earmarks, which would be binding.

“If these things (earmarks) are so good, will someone tell me how they’re decided,” a spirited McCaskill asked reporters. “Little cards getting handed around in caucus. There is not an open process. Who decides who gets the most money and on what basis is that decided?”

McConnell, who unexpectedly lent his support to the ban, said in a speech this month to the Heritage Foundation that “you could eliminate every congressional earmark and you would save no money.”

That’s because earmarks don’t represent extra spending. They represent spending that lawmakers have already approved for federal agencies. And earmarks typically account for less than 1 percent of the budget.

For the earmark ban to reduce spending, “you have to lower the spending authorizations by the same amount,” said Maya MacGuineas, fiscal policy director at the New America Foundation.

It’s typically up to federal agencies to decide how their money gets allocated to projects in states, cities and counties, and those decisions are made through an application-and-review process, except when earmarks are involved.

Definitions of earmarks vary widely, and agencies catalog them differently. But typically an earmark is defined as a slice of agency money that a lawmaker or the president requests be set aside for a specific project.

So earmarks are not subject to the same review process, and they are often slipped into unrelated spending bills at the last minute without most people’s knowledge.

The notion that earmarks are wasteful bridges to nowhere is misleading.

Residents of a state or city may not view federal dollars earmarked to help them improve their transit system as a waste.

The problem is that the earmark system is based on “political muscle rather than merit,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan spending watchdog group.

The earmark issue is one of several the lame-duck session of the Democratic Congress is expected to tackle.

The session convened Monday, with members preparing to make decisions on a host of contentious issues that could have major political ramifications for Obama and the incoming Republican House majority.

At the top of the agenda: whether to extend the Bush tax cuts for families making more than $250,000 a year. Republicans contend that failure to extend the cuts for everyone would be a mistake in a weak economy. Obama considers such a move a roughly $700 billion budget-busting mistake, but he recently suggested he’s willing to compromise.

If Congress fails to act, all the cuts will expire at the end of the year.

In addition to the tax cuts, the lame-duck Congress also has to consider expiring cuts in the estate tax and decide what to do about a bill that is keeping the government running but is set to expire December 3.

Other items on the agenda include:

– A possible repeal of the military’s “don’t ask, don’t tell” policy barring gays and lesbians from serving openly in the armed forces.

– Ratification of the nuclear arms reduction treaty with Russia.

– A child nutrition bill backed by first lady Michelle Obama.

– The Dream Act, which would create a path to citizenship for young illegal immigrants if they attend college or serve in the military.

CNN’s Alan Silverleib, Dana Bash, Ted Barrett, Deirdre Walsh and Paul Steinhauser contributed to this report

Earmarks get ax from GOP senators

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Journalists talk about Olbermann suspension

Posted on November 7, 2010 by admin| Comments Off

(CNN) — The controversy surrounding MSNBC’s suspension of prime-time host Keith Olbermann had journalists chiming in with opinions Sunday as the issue took center stage on CNN’s “Reliable Sources.”

MSNBC announced Friday that Olbermann has been suspended indefinitely for violating the ethics policies of his employer earlier this year when he donated to three Democrats seeking federal office.

“I think he should be suspended, but…first of all, the policy may or may not be smart,” Matt Lewis, political analyst for PoliticsDaily.com, told “Reliable Sources” host Howard Kurtz.. “It may be that if you host an evening show, and you obviously have a point of view, as Olbermann does, that you should be exempted from the policy, that’s something to look at.”

Joan Walsh, editor in chief of Salon.com, took more a big-picture look at the Olbermann controversy and suggested it may be a case of media overkill.

“This story is part of the reason why people don’t like the media,” said Walsh. “We’re sitting here naval-gazing about this very wealthy man, respected by many of us, reviled by others, who is going to be fine whatever happens, while people across the country are getting thrown out of their jobs.”

Olbermann’s show, “Countdown,” has been a staple of MSNBC’s prime-time programming, and It has some of the highest ratings on the network.

New York Times media writer David Carr talked about the resiliency of both Olbermann and his show in the long run.

“I don think anybody who watches him would be stunned that he put his money where his mouth is,” said Carr. “In terms of, did he injure his relationship with his viewers? I really doubt it.”

Host Kurtz took time at the end of “Reliable Sources” to talk about the man responsible for Olbermann’s suspension.

“MSNBC President Phil Griffin stepped up to the plate by suspending his star, rather than letting him off with a slap on the wrist,” said Kurtz.

In what was apparently his first public comment since his suspension was announced, Olbermann wrote Sunday on his Twitter page: “Greetings From Exile! A quick, overwhelmed, stunned THANK YOU for support that feels like a global hug & obviously left me tweetless XO.”

Journalists talk about Olbermann suspension

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General election already under way in Washington Senate race

Posted on August 17, 2010 by admin| Comments Off

(CNN) — Voters in Washington state and Wyoming hold primaries Tuesday, with the Senate contest in Washington and a battle for the open Wyoming governor’s seat the most closely watched races of the day.

In Washington, Democratic Sen. Patty Murray and Republican candidate Dino Rossi are expected to emerge from a crowded primary field, setting up a November showdown. Under the state’s system, the two candidates who receive the most votes regardless of party affiliation move on to the general election. Voting has been underway for two weeks, with Washington primarily a mail-in ballot state.

In many ways, Murray and Rossi have already begun their general election campaigns, focusing their attacks on each other. Polls show a close race in the fall if they both advance.

Nathan Gonzales, political editor of the Rothenberg Political Report, said the system gives “a sneak preview of what a head-to-head race (in the fall) will look like.” But he cautions that analysts “should pause before drawing too many conclusions” on what the numbers from a primary race say about November.

For Rossi, this is the third run for statewide office in the last six years after twice losing close races for governor to Democrat Christine Gregoire. “Rossi’s past cuts both ways,” Gonzales said. “It gives him name recognition that can be expensive to get, but brings some of the dirty laundry that’s been aired in the past races.”

Among Republicans also running are conservatives Paul Akers and former NFL tight end Clint Didier. Didier has the backing of former Alaska Gov. Sarah Palin, who has recorded a robocall on his behalf. The Seattle Times reports Palin said in the call that “unlike establishment candidates who just talk about lower taxes, Clint has signed a pledge to do so.”

Murray is seeking a fourth term in the Senate and, as in her two previous re-election bids, she is a target of national Republicans. The Rothenberg Political Report rates the race a toss-up/tilt Democrat in the fall, but Gonzales said Republicans are optimistic they can change the outcome.

“It’s all about the cycle,” Gonzales said. “A majority of Americans are dissatisfied and looking for change. This is a year to tap in, in places like the Northwest where’s it been difficult in recent years.”

President Barack Obama will be in Seattle, Washington, on Tuesday appearing at a fundraiser for Murray. “Murray understands she’s a target,” said Gonzales, who added that the fundraiser is about getting “resources necessary to get her message out.”

While some Democrats have chosen not to appear alongside Obama, Gonzales noted that, “Republicans will try to tie Murray to Obama no matter what she does, so she might as well have the money to defend herself.”

The Washington secretary of state is predicting a 38 percent turnout in the primary, with voters allowed to drop off ballots until 8 p.m. PT on Tuesday.

In Wyoming, Republicans are hoping to reclaim the governor’s mansion as Democrat Dave Freudenthal leaves office. Seven Republicans are competing for the GOP nomination, while five Democrats are running for their party’s nod.

A Mason-Dixon poll conducted three weeks before the election for the Casper Star-Tribune showed that in the race for the GOP nomination, State Auditor Rita Meyer led former U.S. Attorney Matt Mead by a 27 percent to 24 percent margin, but her lead was inside the margin of error. Colin Simpson, son of former U.S. Sen. Alan Simpson, received 17 percent in the same GOP survey, while Ron Micheli polled at 12 percent.

Meyer received the backing of Palin in the final weeks of the campaign, with the former Alaska governor writing on her Facebook page, “her true grit has not escaped the eye of other Americans who know that at every level of political office we all benefit with commonsense constitutional conservatives in service.”

The Mason-Dixon poll showed Leslie Peterson leading Peter Gosar 30 percent to 22 percent in the battle for the Democratic nomination. Three other candidates polled at 2 percent or less.

General election already under way in Washington Senate race

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Critics cite 100 worst stimulus projects

Posted on August 3, 2010 by admin| Comments Off

Washington (CNN) — Monkeys on cocaine. New windows for a closed visitor center. Modern dance as a tool for software development.

A report to be released Tuesday by conservative Republican Sens. Tom Coburn and John McCain cited these and 97 other projects as leading examples of misguided or wasteful spending under the Obama administration’s $862 billion economic stimulus bill.

Titled “Summertime Blues,” the report is the third by the two senators targeting projects that they say fail to meet the job-creation goal of spending under the Recovery Act of 2009.

“We owe it to all Americans that are paying taxes and struggling to find jobs, to rebuild our economy without doing additional harm, and to do it in a way that expands opportunities for future generations,” said the introduction to the report by Coburn, R-Oklahoma, and McCain, R-Arizona. “Too many stimulus projects are failing to meet that goal.”

While some projects in the report “may have merit,” they are “being mismanaged or were poorly planned,” the report said.

The Recovery Act, which was passed a few weeks after President Barack Obama took office, was a government-funded effort to kick-start economic activity in response to the ongoing recession.

It called for “shovel-ready” jobs — from road and bridge repair and construction to scientific research and expanded broadband and wireless service — through federal contracts, grants and loans, as well as helping state and local governments avoid layoffs and funding tax cuts.

The senators’ report challenged the viability or effectiveness of specific projects across the country. However, the report’s use of selected information from hundreds of footnoted sources left it unclear whether the brief summaries of each project told the whole story.

In a previous report in January, the senators included the Napa Valley Wine Train as an example of wasteful stimulus spending, without mentioning that the money was for a flood control project along the train’s route, rather than the train itself.

The latest edition covered a broad range of projects including construction, research, development and conservation.

Topping the list was $554,763 for new windows at the Coldwater Ridge Visitor Center at Mount St. Helens in Washington state. The U.S. Forest Service facility opened in 1993 at a cost of $11.5 million to provide visitors with panoramic views of the scenic volcano.

However, it closed in 2007 due to staffing shortages, and now is getting the stimulus funds to replace its trademark windows in preparation for use for another purpose, according to information provided by the Forest Service.

“One government official likened it to ‘keeping a vacant house in good repair,’ while another official noted that there is hope to find some purpose for the building in the future, whether as a hotel, science camp or restaurant,” the report said, attributing the information to a July 2009 article on tdn.com, a local news website. “Despite those efforts, there are no plans to use the empty space.”

The Forest Service information provided no timetable for the possible reopening of the visitors’ center for another purpose.

“The Forest Service is now reviewing several proposals for how the facility could be used in the future through a variety of public-private partnerships, including a science facility, education camp, or an overnight lodge,” the Forest Service document said.

Ranked second on the senators’ list was a University of North Carolina at Charlotte project that received $762,372 in stimulus finds to develop a computerized choreography program, the report said.

Quoting a July 6 story posted on the Charlotte-based news website WCNC.com, the report said the project involves recording dancers on video, then logging and analyzing their movements.

“This will allow choreographers to explore the interactive dance without always having a full cast of dancers present,” said the grant posted on the government’s stimulus bill website, recovery.gov.

“The system will be extended into a Web-based ‘Dance Tube’ application that will allow the public to engage in interactive dance choreography,” the grant goes on to say.

However, the senators’ report initially failed to state the money was spread over three years. Again citing the WCNC.com story, it also initially said lead researcher Celine Latulipe “noted that her funding was severely restricted by the fact that the university is taking a 44 percent cut to cover ‘overhead’ expenses.”

In reality the website story said: “The money is spread over three years and Latulipe points out the university takes 44 percent overhead.”

After the discrepancy was pointed out by CNN, the report was changed, an aide to Coburn said.

In an interview with CNN, Latulipe said the project fit the kind of research and development work called for by the Recovery Act.

Through its application and further development, it could lead to audiences having an impact on performance by registering their reaction through handheld audience response devices, Latulipe said.

“We’ll need to develop a bunch of different software packages that never existed before,” she said, adding that the project employs three students part-time over its three-year span and pays for dancers and other participants in what amounts to direct economic activity.

“I think it’s sad that this research money that is really allowing innovation and funding students doing great research is being used as a political tool,” Latulipe said.

Then there is the project listed at No. 28 by the senators — $71,623 to researchers at Wake Forest University to see how monkeys react to cocaine.

Titled “Effect of Cocaine Self-Administration on Metabotropic Glutamate Systems,” the project calls for monkeys to self-administer drugs while researchers monitor and study their glutamate levels, the report said.

It cited a March 8 Raleigh News and Observer article that quoted Wake Forest University School of Medicine spokesman Mark Wright as saying the stimulus money would allow the university to continue a job that otherwise might have been cut.

Paula Faria, assistant vice president for media relations at Wake Forest University Baptist Medical Center, said the grant will “have significant impact on public health in regards to cocaine addiction and the issue of relapse.”

“It’s also important to note that the applications for these grants are peer reviewed and this study was deemed of merit by a panel of scientific experts, and then reviewed by the National Advisory Council on Drug Abuse before funds were awarded,” Faria said in a statement to CNN.

Liz Oxhorn, the White House spokesperson for the Recovery Act, called the senators’ report a partisan effort intended to undermine the overall success of the Recovery Act.

According to Oxhorn, new research shows stimulus money is responsible for nearly 3 million jobs and has lowered unemployment by 1.5 percent.

“We’ll look into each of their claims and take action if any have merit, but with more than 70,000 Recovery Act projects underway, any misguided project is just a small fraction of tens of thousands coast to coast that are rebuilding America and putting people to work,” Oxhorn said.

Critics cite 100 worst stimulus projects

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Census data show a widening income gap in US as poor people take bigger hit in recession

Posted on September 29, 2009 by admin| Comments Off

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HOLD FOR RELEASE 12:01 A.M. EDT; graphic shows percentage of households that use food stamps, by city (D. Morris, AP / September 28, 2009)

WASHINGTON – The recession has hit middle-income and poor families hardest, widening the economic gap between the richest and poorest Americans as rippling job layoffs ravaged household budgets.

The wealthiest 10 percent of Americans — those making more than $138,000 each year — earned 11.4 times the roughly $12,000 made by those living near or below the poverty line in 2008, according to newly released census figures. That ratio was an increase from 11.2 in 2007 and the previous high of 11.22 in 2003.

Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade’s worth of gains to hit the lowest level since 1997.

Poverty jumped sharply to 13.2 percent, an 11-year high.

“No one should be surprised at the increased disparity,” said Richard Freeman, an economist at Harvard University. “Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have.”

Analysts attributed the widening gap to the wave of layoffs in the economic downturn that have devastated household budgets. They said while the richest Americans may be seeing reductions in executive pay, those at the bottom of the income ladder are often unemployed and struggling to get by.

Large cities such as Atlanta, Washington, New York, San Francisco, Miami and Chicago had the most inequality, due largely to years of middle-class flight to the suburbs. Declining industrial cities with pockets of well-off neighborhoods, such as Pittsburgh, Cleveland and Buffalo, N.Y., also had sharp disparities.

Up-and-coming cities with growing middle-class populations, such as Mesa, Ariz., Riverside, Calif., Arlington, Texas, and Henderson, Nev., were among the areas showing the least income differences between rich and poor.

It’s unclear whether income inequality will continue to worsen in major cities, said William H. Frey, a demographer at the Brookings Institution. Many Americans are staying put for now in traditional cities to look for jobs and because of frozen lines of credit.

“During the years of the housing bubble, there was middle-class movement from unaffordable metros with high-income inequality,” Frey said. “Now that the bubble burst, more of the population may be headed back to the high-inequality areas, stemming their middle-class losses.”

As to poverty, the biggest shifts last year were increases in metropolitan areas in Florida and central California. Stockton, Calif., jumped from 14.1 percent to 16.8 percent, while Lakeland-Winter Haven, Fla., rose from 12.7 percent to 15.4 percent. Tampa-St. Petersburg, Orlando, Bradenton and Palm Bay — all in Florida — also saw gains in the share of poor residents.

Among other findings:

—Income at the top 5 percent of households — those making $180,000 or more — was 3.58 times the median income, the highest since 2006.

—Twenty-one states and the District of Columbia had higher poverty rates than the national average, many of them in the South, such as Mississippi (21.2 percent), Kentucky, Arkansas and Louisiana (each with 17.3 percent). That’s compared with 19 states and the District of Columbia that ranked above U.S. poverty in 2007.

—Use of food stamps jumped 13 percent last year to nearly 9.8 million U.S. households, led by Louisiana, Maine and Kentucky. The increase was most evident in households with two or more workers, highlighting the impact of the recession on both working families and unemployed single people.

—Pharr, Texas, and Flint, Mich., each had more than a third of its residents on food stamps, at 38.5 percent and 35.4 percent, respectively.

—Between 2007 and 2008, income at the 50th percentile (median) and the 10th percentile fell by 3.6 percent and 3.7 percent, respectively, compared with a 2.1 percent decline at the 90th percentile. Between 1999 and 2008, income at the 50th and 10th percentiles decreased 4.3 percent and 9 percent, respectively, while income at the 90th percentile was statistically unchanged.

—Plano, Texas, a Dallas suburb, had the highest median income among larger cities, earning $85,003. Cleveland ranked at the bottom, at $26,731.

The findings come as the federal government considers new regulations to rein in executive pay at companies in which it has invested. President Barack Obama also typically cites the need for higher taxes on the wealthy to pay for health care overhaul and other measures, arguing that the wealthy have disproportionately benefited from tax cuts during the Bush administration.

The 2008 figures come from the Current Population Survey and the American Community Survey, which gathers information from 3 million households. The government first began tracking household income in 1967.

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‘Cash for clunkers’ slows car donations to charities

Posted on August 13, 2009 by admin| Comments Off

The latest buzz in L.A.’s car culture.

August 12, 2009 – Daniel Saltman |  9:01 am

= Junk_yard-320 You used to hear it all the time. Whenever someone raised the question of what to do with a near-worthless rust bucket, the answer almost always came back the same — donate it to charity.

Since the arrival of “cash for clunkers,” however, donations have dropped off. It’s not hard to imagine why — a $3,500 or $4,500 voucher is certainly more appetizing to the cash-strapped recession-era new car shopper than a tax writeoff come year’s end.

The damage has not been insignificant. According to the Associated Press, a Texas-based charity estimates that the cash for clunkers program has already cost it $75,000 in missed vehicle donations. Unfortunately, instead of being sold for charity funds or turned over to needy families, formerly donation-worthy cars will be sent to the crusher with seized engines, per the program’s stringent guidelines.

Despite a slowdown since its inception, the federal program has succeeded in sending consumers to dealerships. According to a survey of 517 in-market shoppers by Kelley Blue Book (KBB), the cash for clunkers program has persuaded 1 in 10 shoppers to purchase a new vehicle sooner. Taking into account that many trade-ins don’t qualify for the cash for clunkers voucher, charities may see some relief yet. But when you consider that owners of particularly rundown vehicles will be looking at either a low-value tax writeoff or a $4,500 discount on a new car, the decision-making process becomes pretty clear.

Thinking of donating a clunker of your own? Check out this firsthand experience of a Land Rover-to-Nissan Cube swap and get an idea of what you’ll be dealing with.

– Brian Alexander

Brian Alexander is a staff writer at DriverSide.com

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Federal Debt Approaches 100% of GDP

Posted on June 15, 2009 by admin| Comments Off

Federal Debt Approaches 100% of GDP

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Even when The End of the American Century went to press in early 2008, the U.S. federal debt was reaching alarming levels, and was a central element of my forecasts of U.S. economic decline. At that point, the White House’s Office of Management and Budget projected the gross federal debt to expand to $10.6 trillion by 2009, constituting 72% of GDP.

Since then, the federal red ink has become a tidal wave. The OMB now expects the debt at the end of this year to be $12.7 trillion, and to expand to over $15 trillion by 2011, which would then be (at 97% of GDP) almost as large as the entire economy (see chart).

David Leonhardt of the New York Times, one of the few economists to have been tracking and raising concerns about the deficits, writes that erasing the deficits “will be one of the great political issues of the coming decade.” In his article “Sea of Red Ink” in the June 10 issue, he reports on a New York Times analysis of the composition of the debt accumulation over the last decade, “with the aim of understanding how the federal government came to be far deeper in debt than it has been since the years just after World War II.”

The analysis finds that the growth in the federal debt since 2001 comes from four main sources. The first, the business cycle (especially the 2001 recession and the current downturn) is the largest component, accounting for 37%. Another 33% of the recent debt comes from legislation signed by President Bush, including his tax cuts. Another 20% derives from President Obama’s continuation of several Bush policies, including spending on the Iraq War and the Wall Street bailouts. Only about 10% comes from new Obama policies, including the stimulus bill, and news spending on health care, education, energy and other areas.

Leonhardt sees little hope that the Obama administration can reduce or eliminate the deficits with “pay-as-you-go” government spending plans. The solution, he writes, “is no mystery” and involves inevitable tax increases and government spending cuts. These are political tinderboxes, of course, and pose a huge challenge to President Obama’s leadership skills.

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