A Blue View

Sunday Afternoon Relaxation

Taco Bell's New Green Menu Takes No Ingredients From Nature

Chency Ordered The CIA To Lie

A bombshell from the NY Times that increases the odds Attorney General Holder will appoint a Special Prosecutor:

The Central Intelligence Agency withheld information about a secret counterterrorism program from Congress for eight years on direct orders from former Vice President Dick Cheney, the agency’s director, Leon E. Panetta, has told the Senate and House intelligence committees, two people with direct knowledge of the matter said Saturday.

The report that Mr. Cheney was behind the decision to conceal the still-unidentified program from Congress deepened the mystery surrounding it, suggesting that the Bush administration had put a high priority on the program and its secrecy.

Mr. Panetta, who ended the program when he first learned of its existence from subordinates on June 23, briefed the two intelligence committees about it in separate closed sessions the next day. Efforts to reach Mr. Cheney through relatives and associates were unsuccessful.

The question of how completely the C.I.A. informed Congress about sensitive programs has been hotly disputed by Democrats and Republicans since May, when Speaker Nancy Pelosi accused the agency of failing to reveal in 2002 that it was waterboarding a terrorism suspect, a claim Mr. Panetta rejected.

The law requires the president to make sure the intelligence committees “are kept fully and currently informed of the intelligence activities of the United States, including any significant anticipated intelligence activity.” But the language of the statute, the amended National Security Act of 1947, leaves some leeway for judgment, saying such briefings should be done “to the extent consistent with due regard for the protection from unauthorized disclosure of classified information relating to sensitive intelligence sources and methods or other exceptionally sensitive matters.”

In addition, for covert action programs, a particularly secret category in which the role of the United States is hidden, the law says that briefings can be limited to the so-called Gang of Eight, consisting of the Republican and Democratic leaders of both houses of Congress and of their intelligence committees.

The disclosure about Mr. Cheney’s role in the unidentified C.I.A. program comes a day after an inspector general’s report underscored the central role of the former vice president’s office in restricting to a small circle of officials knowledge of the National Security Agency’s program of eavesdropping without warrants, a degree of secrecy that the report concluded had hurt the effectiveness of the counterterrorism surveillance effort.

An intelligence agency spokesman, Paul Gimigliano, declined on Saturday to comment on the report of Mr. Cheney’s role ...

Members of Congress have differed on the significance of the program, whose details remained secret and which even some Democrats have said was properly classified. Most of those interviewed, however, have said that it was an important activity that should have been disclosed to the intelligence committees.

Postracial America - Hah

In case you missed the story.

Obama Speaks At Slave Fort In Ghana

From Dayo Olopade of The Root:

Barack Obama rounded out his trip abroad with a stop in Accra, Ghana over the weekend. There, he spoke to the nation's parliament and paid a visit to a maternal health clinic in Accra, before finishing up with a moving visit to Ghana's Cape Coast Castle—the point of no return for thousands upon thousands of black Africans sold into slavery in the diaspora.

Obama addressed the Ghanaian assembly as a cosmopolitan international leader with "the blood of Africa in me." He encouraged good governance as the building block of international development, that which will invite trade rather than the vicious cycle of aid and waste that characterizes many partnerships between Africa and the West:

In the 21st century, capable, reliable and transparent institutions are the key to success—strong parliaments and honest police forces; independent judges and journalists; a vibrant private sector and civil society. Those are the things that give life to democracy, because that is what matters in peoples’ lives.

Watch part of Obama's speech [Watch the complete speech]:

Though this was Obama's fourth trip to the African continent, it was his first as president, and first to the west coast where most black Americans find their ancestry. And so the trip held a special resonance for Malia, Sasha and Michelle Obama—the members of the Obama family whose ancestors were actually slaves. At the Cape Coast Castle where the Middle Passage began, Obama was cognizant of that history:

...[A]s Americans, and as African Americans, obviously there's a special sense that on the one hand this place was a place of profound sadness; on the other hand, it is here where the journey of much of the African American experience began.  And symbolically, to be able to come back with my family, with Michelle and our children, and see the portal through which the diaspora began, but also to be able to come back here in celebration with the people of Ghana of the extraordinary progress that we've made because of the courage of so many, black and white, to abolish slavery and ultimately win civil rights for all people, I think is a source of hope.  It reminds us that as bad as history can be, it's also possible to overcome.

Just before boarding his plane back to the United States, Obama added that he would "never forget" the sight of his daughters passing through the infamous "door of no return" at the Cape Coast Castle—and then walking back in.

Attorney General Leaning Towards Appointing Prosecutor In Torture Cases ... Against Obama's Wishes

Today's Cheney bombshell likely increases the chance that Holder will do what this Wash Post story contemplates:

Attorney General Eric H. Holder Jr. is leaning toward appointing a criminal prosecutor to investigate whether CIA personnel tortured terrorism suspects after Sept. 11, 2001, setting the stage for a conflict with administration officials who would prefer the issues remain in the past, according to three sources familiar with his thinking.

Naming a prosecutor to probe alleged abuses during the darkest period in the Bush era would run counter to President Obama's oft-repeated desire to be "looking forward and not backwards." Top political aides have expressed concern that such an investigation might spawn partisan debates that could overtake Obama's ambitious legislative agenda.

The White House successfully resisted efforts by congressional Democrats to establish a "truth and reconciliation" panel. But fresh disclosures have continued to emerge about detainee mistreatment, including a secret CIA watchdog report, recently reviewed by Holder, highlighting several episodes that could be likened to torture.

Holder's decision could come within weeks, around the same time the Justice Department releases an ethics report about Bush lawyers who drafted memos supporting harsh interrogation practices, the sources said. The legal documents spell out in sometimes painstaking detail how interrogators were allowed to subject detainees to simulated drowning, sleep deprivation, wall slamming and confinement in small, dark spaces.

Any criminal inquiry could face challenges, including potent legal defenses by CIA employees who could argue that attorneys in the Bush Justice Department authorized a wide range of harsh conduct. But the sources said an inquiry would apply only to activities by interrogators, working in bad faith, that fell outside the "four corners" of the legal memos. Some incidents that might go beyond interrogation techniques that were permitted involve detainees in Iraq and Afghanistan, and are described in the secret 2004 CIA inspector general report, set for release Aug. 31.

The Secret Fundamentalism At The Heart Of American Power

Sen Ensign & Gov Sanford has more than adultery in common: they're both members of a secretive christian fundamentalist group whose members include some of the most powerful in politics. Fresh Air's Terry Gross interviews the author of the investigative book The Family: The Secret Fundamentalism at the Heart of American Power (buy it):

Part I:

Parts II and III:

"We must rebuild it better than before"

This Op Ed in today's Wash Post by Barack Obama shows he was not just paying lip service when he added 'reinvestment' to the name 'The American Recovery and Reinvestment Act.' And as part of that, he announces (after the jump) a new drive to open higher ed to millions of additional Americans:

Rebuilding Something Better

Nearly six months ago, my administration took office amid the most severe economic downturn since the Great Depression. At the time, we were losing, on average, 700,000 jobs a month. And many feared that our financial system was on the verge of collapse.

The swift and aggressive action we took in those first few months has helped pull our financial system and our economy back from the brink. We took steps to restart lending to families and businesses, stabilize our major financial institutions, and help homeowners stay in their homes and pay their mortgages. We also passed the most sweeping economic recovery plan in our nation's history.

The American Recovery and Reinvestment Act was not expected to restore the economy to full health on its own but to provide the boost necessary to stop the free fall. So far, it has done that. It was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall. We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.

I am confident that the United States of America will weather this economic storm. But once we clear away the wreckage, the real question is what we will build in its place. Even as we rescue this economy from a full-blown crisis, I have insisted that we must rebuild it better than before. For if we do not seize this moment to confront the weaknesses that have plagued our economy for decades, we will consign ourselves and our children to future crises, sluggish growth, or both.

There are some who say we must wait to meet our greatest challenges. They favor an incremental approach or believe that doing nothing is somehow an answer. But that is exactly the thinking that led us to this predicament. Ignoring big challenges and deferring tough decisions is what Washington has done for decades, and it's exactly what I sought to change by running for president.

Now is the time to build a firmer, stronger foundation for growth that not only will withstand future economic storms but that helps us thrive and compete in a global economy. To build that foundation, we must lower the health-care costs that are driving us into debt, create the jobs of the future within our borders, give our workers the skills and training they need to compete for those jobs, and make the tough choices necessary to bring down our deficit in the long run.

No Comment

Student Loan Plan Reveals GOP Uses Free Market / Choice Talk When Truth Is They Just Always Support Business. It's The Health Care Debate In Miniature.

First the good news on student loans, from the NY Times:

The chairman of the House Education Committee [California Dem George Miller] has dismissed a last-ditch plea from the private student loan industry and is throwing his support behind President Obama’s plan to end the role of private banks in the federal education lending systems.

Mr. Obama’s plan remains deeply contentious in Congress, and still faces strong opposition from private banks [and Republicans] that for decades have earned big profits for handling federal student loans ...

[The] private-loan industry ... had urged Congress and the White House to consider its own alternative. But Congressional Democrats, the White House and officials at the federal Education Department have now rejected that plan, contending that it was based on accounting tricks and would pour $15 billion into the banks’ coffers that Mr. Obama would direct to the Pell grant program for low-income students ...

The president’s proposal, first outlined in his initial budget in February, would save the government roughly $87 billion over 10 years, according to the Congressional Budget Office — money that the White House says should be used to aid impoverished students.

The article also offered the typical Republican argument about big government, reducing choice, Obama is a socialist, etc.:

Some Republicans have said that in curtailing the role of private lenders, Democrats are trying to expand government.

Senator Lamar Alexander, Republican of Tennessee and a former federal education secretary, said direct government loans were never meant to monopolize student lending.

“This effort by the Obama administration for a Washington takeover of student loans is just one more example of a long line of Washington takeovers of banks, insurance companies, car companies, health care, that I totally object to,” he said.

Unfortunately for the GOP, the story also mentioned some really important details about the "free market" the government was seeking to "takeover":

The federal government already makes some loans directly to students, but most federal student loans are handled by private firms even though there is virtually no private capital available for financing the loans. The industry argues that it provides competition and better marketing and servicing of loans.

The administration’s view, shared by a number of Democratic lawmakers, is that the private lenders should no longer be paid by taxpayers to operate a virtually risk-free business in which they essentially use taxpayer dollars to originate loans, with repayment guaranteed, and then resell those loans to the Treasury.

So let me get this straight. These private financial companies are making billions using public capital (not their own) in a market place made risk-free (because the government takes on all the risk, including guaranteeing repayment) yet the Republicans still argue Obama wants to take over another "free" market.

The fact that the student loan business is transparently as far from a free market as one can get makes it obvious that it is more important to the GOP for their business supporters to get $87 billion than to send millions of additional kids to college. 

The parallels to the health care debate, where it's more important for the GOP to side with their insurance business supporters than to provide 47 million Americans with health coverage, are also obvious.

Obama's Speech To The Ghanian Parliament

                Read key excerpts or full speech.

The AP's report:

An American president who has "the blood of Africa within me" praised and scolded the continent of his ancestors Saturday, asserting forces of tyranny and corruption must yield if Africa is to achieve its promise.

"Yes you can," Barack Obama declared, dusting off his campaign slogan and adapting it for his foreign audience. Speaking to the Ghanaian Parliament, he called upon African societies to seize opportunities for peace, democracy and prosperity.

"This is a new moment of great promise," he said. "To realize that promise, we must first recognize a fundamental truth that you have given life to in Ghana: Development depends upon good governance. That is the ingredient which has been missing in far too many places, for far too long. That is the change that can unlock Africa's potential." ...

America's first black president spoke with a bluntness that perhaps could only come from a member of Africa's extended family.

"No country is going to create wealth if its leaders exploit the economy to enrich themselves, or if police can be bought off by drug traffickers," he said

"No business wants to invest in a place where the government skims 20 percent off the top, or the head of the Port Authority is corrupt. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery.

"That is not democracy, that is tyranny, even if occasionally you sprinkle an election in there," he said, "and now is the time for that style of governance to end."

He added: "Africa doesn't need strongmen, it needs strong institutions."

Obama was on a 21-hour visit to the West African nation to highlight that country's democratic tradition and engagement with the West. His visit, his first to sub-Saharan Africa as president, was greeted as a "spiritual reunion" Saturday by Ghanian legislators.

Before the flight home, Obama visited Cape Coast Castle, a seaside fortress converted to the slave trade by the British in the 17th century. In its dungeons, thousands of shackled Africans huddled in squalor before being herded onto ships bound for America ...

The Obama administration sought a wide African audience for the president's speech, inviting people to watch it at embassies and cultural centers across the continent.

The 33-minute address was in part a splash of cold water for Africans who blame colonialism for their problems.

Obama spoke of the indignities visited upon Africans from the era of European rule. He said his grandfather, a cook for the British in Kenya, was called "boy" by his employers for much of his life despite his being a respected village elder. He said it was a time of artificial borders and unfair trade.

But he said the West is not to blame "for the destruction of the Zimbabwean economy over the last decade, or wars in which children are enlisted as combatants." Nor for the corruption that is a daily fact of life for many, he said.

"Africa is not the crude caricature of a continent at perpetual war," he said. Yet for "far too many Africans, conflict is a part of life, as constant as the sun. There are wars over land and wars over resources. And it is still far too easy for those without conscience to manipulate whole communities into fighting among faiths and tribes ...

The president pledged America's partnership in Africa's growth. Specifically, he said he would make sure U.S. aid gets to the people who need it most, such as farmers and entrepreneurs, not Western consultants and administrators.

That's why $3.5 billion in food assistance will focus on new methods and technologies for farmers, instead of simply sending U.S. goods to Africa, he said.

Obama flew to Ghana after the G-8 summit in L'Aquila, Italy, approved a new $20 billion food security plan. It aims to help poor nations in Africa and elsewhere to avert mass starvation during the global recession.

Ghana celebrates Obama visit

Civil Rights Group Divided Over Marriage Equality

From the NY Times:

The Southern Christian Leadership Conference, the 50-year-old civil rights organization founded by the Rev. Dr. Martin Luther King Jr. and others, is seeking to remove the president of its Los Angeles chapter in response to his support of same-sex marriage in California.

The effort by the Atlanta-based organization is meeting stiff resistance in Los Angeles from both the board of the local chapter, whose chairman is secretary of the state’s Democratic Party, and the City Council president.

During the battle last fall over Proposition 8, an amendment to the State Constitution that banned same-sex marriage, the chapter’s president, the Rev. Eric P. Lee, was ... front and center at an opposition group’s large rally at City Hall and marched in the blazing sun for 15 miles in Fresno. Many other local African-American pastors prepared mailings featuring church leaders in support of the proposition and linking their views to Barack Obama, then the Democratic nominee for president ...

While the Mormon Church raised a great deal of the money in support of the proposition, the role of African-American churches, and their voting parishioners, was not insignificant. The Edison/Mitofsky exit poll in California found that 70 percent of black voters backed the ban, which passed with 52 percent of the vote.

Mr. Lee said that his opposition to Proposition 8 had “created tension in my life I had never experienced with black clergy.”

“But it was clear to me,” he added, “that any time you deny one group of people the same right that other groups have, that is a clear violation of civil rights and I have to speak up on that.”

In April, Mr. Lee attended a board meeting of the Southern Christian Leadership Conference in Kansas City, Mo., and found himself once again in the minority position among his colleagues on the issue of same-sex marriage ... a month later, Mr. Lee said, he was surprised to receive a call from the National Board of Directors summoning him immediately to Atlanta to explain why he had taken a position on same-sex marriage without the authority of the national board ...

“It’s been our position that the local board hired him,” said Reginald Byron Jones-Sawyer, chairman of the local board and secretary of the California Democratic Party. “And, in fact, we are also the ones that approved his stance on the position of marriage equality. We have asked the national board if we have violated any procedures, and we have not gotten an answer.”

Mr. Lee, the former pastor of In His Steps, an African-American Wesleyan church in Los Angeles that he described as “very conservative,” said he saw failures both in the leadership of the conference (“Dr. King would be turning over in his grave right now,” he said) and the largely white anti-Proposition 8 movement that did not more actively seek the support of church-going African-Americans.

“The black church played a significant role in Proposition 8 passing,” Mr. Lee said. “The failure of the campaign was to presume that African-Americans would see this as a civil rights issue.”

Panetta & The CIA's Lying

House Dems Seek To Increase Marginal Rates For Rich To Pay For Health Plan

From the NY Times:

House Democrats will ask the wealthiest Americans to help pay for overhauling the health care system with a $550 billion income tax increase, the chairman of the tax-writing Ways and Means Committee said Friday.

The proposal calls for a surtax on individuals earning at least $280,000 in adjusted gross income and couples earning more than $350,000, said the chairman, Representative Charles B. Rangel of New York.

It would generate about $550 billion over 10 years to pay about half the cost of the legislation, Mr. Rangel said. As the proposal envisions it, the rest of the cost would be covered by lower spending on Medicare, the government health plan for the elderly, and other health care savings.

With the economy still hobbled and Republicans already sharpening their tax-and-spend attack line, the proposal is perhaps the clearest expression yet of the mandate that Democrats believe they won last November, when voters expanded Democratic majorities in Congress and sent Barack Obama to the White House.

An aide to the House speaker, Representative Nancy Pelosi of California, said she and other leaders were supportive of the idea, which they concluded would be their main way to pay for Mr. Obama’s top policy priority: expanding health insurance coverage to virtually all Americans and curtailing the steep rise in the cost of medical care while improving patient outcomes.

But it remains unclear whether the Senate will go along. Most Republicans there, or perhaps all, oppose the idea, along with some centrist Democrats.

Even in the more liberal House, where Democrats have a majority of 255 to 178, the tax proposal will most likely cost a substantial number of Democratic votes. The Blue Dog Coalition, made up of 52 fiscally conservative Democrats, expressed apprehension this week about the unfolding health care legislation, and that was before Mr. Rangel’s announcement Friday.

In recent days, efforts to advance the legislation in both houses of Congress have slowed. That development calls into question whether Democrats will be able to meet their goal of passing the bills before the August recess, reconciling differences between the two versions upon their return and then getting a final measure to Mr. Obama’s desk by October ...

Republicans, who have pummeled the Democrats over the $787 billion economic stimulus, pounced at word of the proposed tax increase, which they said would primarily hurt small-business owners.

“In the middle of a serious recession, with unemployment nearing double digits, the last thing we need is a tax increase on small businesses, which will cost the American economy even more jobs,” said Michael Steel, a spokesman for the House Republican leader, Representative John A. Boehner of Ohio.

Ahmadinejad Can Deny Anything (#iranelection)

Weekly Radio Address

Recovery and the Jobs of the Future

It's Time To Talk To Americans About The Economy Like Adults

From Paul Krugman:

When there’s an ordinary, garden-variety recession, the job of fighting that recession is assigned to the Federal Reserve. The Fed responds by cutting interest rates in an incremental fashion. Reducing rates a bit at a time, it keeps cutting until the economy turns around. At times it pauses to assess the effects of its work; if the economy is still weak, the cutting resumes.

During the last recession, the Fed repeatedly cut rates as the slump deepened — 11 times over the course of 2001. Then, amid early signs of recovery, it paused, giving the rate cuts time to work. When it became clear that the economy still wasn’t growing fast enough to create jobs, more rate cuts followed.

Normally, then, we expect policy makers to respond to bad job numbers with a combination of patience and resolve. They should give existing policies time to work, but they should also consider making those policies stronger.

And that’s what the Obama administration should be doing right now with its fiscal stimulus. (It’s important to remember that the stimulus was necessary because the Fed, having cut rates all the way to zero, has run out of ammunition to fight this slump.) That is, policy makers should stay calm in the face of disappointing early results, recognizing that the plan will take time to deliver its full benefit. But they should also be prepared to add to the stimulus now that it’s clear that the first round wasn’t big enough.

Unfortunately, the politics of fiscal policy are very different from the politics of monetary policy. For the past 30 years, we’ve been told that government spending is bad, and conservative opposition to fiscal stimulus (which might make people think better of government) has been bitter and unrelenting even in the face of the worst slump since the Great Depression. Predictably, then, Republicans — and some Democrats — have treated any bad news as evidence of failure, rather than as a reason to make the policy stronger.

Hence the danger that the Obama administration will find itself caught in a political-economic trap, in which the very weakness of the economy undermines the administration’s ability to respond effectively.

As I said, I was afraid this would happen. But that’s water under the bridge. The question is what the president and his economic team should do now.

It’s perfectly O.K. for the administration to defend what it’s done so far. It’s fine to have Vice President Joseph Biden touring the country, highlighting the many good things the stimulus money is doing.

It’s also reasonable for administration economists to call for patience, and point out, correctly, that the stimulus was never expected to have its full impact this summer, or even this year.

But there’s a difference between defending what you’ve done so far and being defensive. It was disturbing when President Obama walked back Mr. Biden’s admission that the administration “misread” the economy, declaring that “there’s nothing we would have done differently.” There was a whiff of the Bush infallibility complex in that remark, a hint that the current administration might share some of its predecessor’s inability to admit mistakes. And that’s an attitude neither Mr. Obama nor the country can afford.

What Mr. Obama needs to do is level with the American people. He needs to admit that he may not have done enough on the first try. He needs to remind the country that he’s trying to steer the country through a severe economic storm, and that some course adjustments — including, quite possibly, another round of stimulus — may be necessary.

What he needs, in short, is to do for economic policy what he’s already done for race relations and foreign policy — talk to Americans like adults.

Rachel Maddow & Richard Clarke Discuss The CIA & Pelosi

A very interesting discussion about the failings of the current "Gang of 8" method of Congressional oversight:

CIA Hid Program From Congress For 8 Years

Sorry GOP, Pelosi was right about the CIA lying to Congress.  Here's the Wash Post:

Four months after he was sworn in, CIA Director Leon E. Panetta learned of an intelligence program that had been hidden from Congress since 2001, a revelation that prompted him to immediately cancel the initiative and schedule a pair of closed-door meetings on Capitol Hill.

The next day, June 24, Panetta informed the House and Senate intelligence committees of the program and the action he had taken, according to Democratic and Republican members of the panels.

The incident has reignited a long-running dispute between congressional Democrats and the CIA, with some calling it part of a broader pattern of the agency withholding information from Congress. Some Republicans, meanwhile, privately questioned whether Panetta -- who has stood with CIA officers in a dispute with  House Speaker Nancy Pelosi (D-Calif.) -- was looking to score points with House Democrats.

The program remains classified, and those knowledgeable about it would describe it only vaguely yesterday. Several current and former administration officials called it an "on-again, off-again" attempt to create a new intelligence capability and said it was related to the collection of information on suspected terrorists that was instituted after the Sept. 11, 2001, attacks.

Congressional Republicans said no briefing about the program was required because it was not a major tool used against al-Qaeda and other terrorist groups. They accused Democrats of using the matter to divert attention away from Pelosi's accusation that CIA officials intentionally misled her in 2002 about the agency's interrogations of suspected terrorists.

But Democrats waved away such claims and said they may open a congressional investigation of the concealment of the program.

"Instructions were given not to brief Congress,"  Dianne Feinstein (D-Calif.), chairman of the Senate intelligence committee, said in an interview.

Small details of the Panetta briefing emerged earlier this week when Democrats from the House intelligence committee leaked letters that had been privately sent to the CIA director and the bipartisan House leadership. The CIA declined to comment yesterday, pointing to the statement it made Wednesday after six Democrats sent their letter to Panetta accusing the CIA of having "concealed significant actions."...

Current and former administration officials familiar with the program said it was not directly related to previously disclosed high-priority programs such as detainee interrogations or the warrantless surveillance of suspected terrorists on U.S. soil. It was a intelligence-collection activity run by the CIA's Counterterrorism Center, officials said. It was not a covert action, which by law would have required a presidential finding and a report to Congress.

"This characterization of something that began in 2001 and continued uninterrupted for eight years is just wrong. Honest men would question that characterization. It was more off and on," said a former top Bush administration official, who spoke on the condition of anonymity because of the classified nature of the issue.

The official said he was certain that, if the nature of the program could be revealed, it would be seen as "no big deal."

However, another intelligence official said that the program was "sensitive" and should have been briefed to the committees, and that lawmakers had been told they had been fully informed on collection activities.

CIA officials brought the program to Panetta's attention, and when he realized it potentially conflicted with what the committees had been told, he immediately went to Capitol Hill, according to officials who discussed classified material on the condition of anonymity.

Google To Compete With Microsoft

House and Senate Dems Disagree On How To Pay For Health Care

From the NY Times:

House and Senate Democrats appeared on Thursday to be on a collision course over how to pay for a sweeping overhaul of the nation’s health care system, with the House planning to propose an income tax increase on the wealthiest Americans, an idea that Senate negotiators have all but dismissed as unworkable.

Paying for the roughly $1 trillion, 10-year cost of the health care legislation is arguably the biggest hurdle confronting lawmakers and the White House as they pursue President Obama’s top policy goal of extending health coverage to all Americans and curtailing the steep rise in the cost of medical care.

Senate negotiators had been eyeing a tax on some employer-provided health benefits but shifted course this week after the Senate majority leader, Harry Reid of Nevada, and other top Democrats voiced opposition. The House speaker, Nancy Pelosi of California, said Thursday that the House bill would not tax those benefits.

Instead, the House Ways and Means Committee was said to be nearing agreement on an income tax surcharge of 2 percent or more on Americans with the highest incomes — those earning more than $250,000. The surtax would rise for those earning $500,000 and rise again for those earning more than $1 million.

At the same time, aides said that the House was moving away from other ideas, including a proposed sales tax on sodas and other sugary drinks and a new payroll tax of 0.3 percent to be paid by employees and employers.

The White House has not expressed a position on the surtax, but lawmakers said they had heard no objections so far.

The chief of staff, Rahm Emanuel, who visited the Capitol twice this week to discuss health care proposals with House Democrats, has said Mr. Obama would prefer that money to pay for the legislation come from within the health care system. But unlike a tax on employer-provided benefits, which Mr. Obama opposed during the presidential campaign, a tax on the wealthy would be in keeping with his promise not to raise taxes on Americans earning less than $250,000 a year.

Meanwhile, Senate negotiators went back to the drawing board and were looking at an array of options. And they seemed to be narrowing their focus on a plan that would tax only the most generous employer-provided health plans — those worth $25,000 or more a year — as well as a modified limit on tax deductions proposed by Mr. Obama ...

The tax on more generous health insurance plans was projected to generate another $90 billion, and would bring Senate negotiators, led by Max Baucus, Democrat of Montana and chairman of the Finance Committee, more than halfway to the $320 billion in revenue that they had expected from a wider tax on employer-provided benefits.

Lawmakers taking part in the Senate negotiations said Republicans and several moderate Democrats would oppose an income tax surcharge on the wealthy.

Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, called the surtax “non-negotiable.” And Senator Olympia J. Snowe, Republican of Maine, who is also on the Finance Committee, said it was among the “less viable” options under consideration ...

Senators were also considering a plan to apply the Medicare payroll tax of 1.45 percent to non-wage income like dividends and capital gains.

And in yet another potential obstacle, 40 House Democrats in the fiscally conservative blue-dog coalition voiced opposition to the emerging legislation and apprehension over potential new taxes. House leaders swiftly called a meeting with the blue dogs to begin addressing their concerns.

In addition to the income surtax on the wealthy, House Democrats were considering an array of other ideas. One would bar prescription drug companies from deducting the cost of advertisements as a business expense on their corporate tax returns. Another would end a tax break for health care flexible spending accounts, which can now be used to cover out-of-pocket medical costs.

Palin Recreates Rosie the Riverter & John Paul Johns

What A Competent Government Can Do: GM To Emerge From Bankruptcy In Record Time

From the NY Times:

Automakers’ Swift Bankruptcies Shock Experts

That didn’t take long. In fewer than 45 days each, General Motors and Chrysler swept through government-sponsored sales in bankruptcy court — quick tours that most people in the legal community thought impossible not long ago.

The swift action has riveted bankruptcy lawyers and law professors, who say the cases will be widely studied this fall when law students return, The New York Times’s Micheline Maynard writes.

“It is remarkable,” James J. White, a professor at the University of Michigan Law School in Ann Arbor, who is planning a three-day seminar on the cases in his bankruptcy class, told The Times.

Judge Robert E. Gerber of United States Bankruptcy Court in New York approved the G.M. sale late Sunday, although he issued a four-day stay that blocks final action until Thursday.

The sales, handled under Section 363 of the federal bankruptcy code, raised the profile of a tactic once used primarily to shed failing plants or unneeded equipment, and was not considered until a few years ago as a substitute for a complete restructuring ...

For businesses that follow similar legal strategies, the G.M. and Chrysler cases could pave the way for a faster trip through court. For creditors, it could mean less time to reach a deal, especially in situations where companies face strict deadlines from lenders, as the two carmakers did with the government.

In such cases where the government plays a major role, lawyers are likely to feel they have less control than in traditional bankruptcies ...

In fact, a government-imposed deadline for concluding the G.M. case by the end of this week helped the court work through 850 objections in three days of hearings last week. Normally, such issues could take weeks ...

Obama administration officials say the legal community need not expect a wholesale shift in bankruptcy law. The G.M. and Chrysler cases were unique situations, they note, in which the president wanted to make sure that a crucial American industry survived.

Under the terms of the deal, G.M. would sell its most desirable assets, including the Chevrolet and Cadillac brands, to a new company owned largely by the American and Canadian governments and a health care trust for the United Automobile Workers union.

Over the last decade, Professor White said, companies already have been shifting toward a broader use of Section 363 sales as a quicker approach for restructuring than the usual Chapter 11 process ....

G.M. and Chrysler sales beat even the government’s aggressive timetable.

The Treasury Department initially said it expected the Chrysler sale, which required 42 days, including an appeal to the Supreme Court, to be approved in 60 days. It said the G.M. sale would require 60 to 90 days of deliberations; as of Monday, the case has been in court for 36 days.

The speed is even more remarkable given that as recently as mid-March, when the Treasury’s auto task force retained bankruptcy counsel, it was not clear the cases would wind up in bankruptcy court, a senior administration official told The Times on Monday.

At that time, G.M. was still resisting a bankruptcy filing and a case did not seem likely at Chrysler, which had Fiat standing by, prepared to assume management control. Fiat officials eventually signed on to the need for a quick bankruptcy filing, which helped Chrysler shed plants, dealers and suppliers.

By mid-April, G.M. came around to the idea of a conventional prepackaged bankruptcy case, which still could have taken months, the official told The Times.

Treasury officials pointedly told G.M. executives that the government, which was financing the company’s stay in bankruptcy, did not have the patience or resources for a long case, and would only provide financing under a Section 363 sale.

The administration official also said that G.M.’s case moved so quickly in part because it had the benefit of an “icebreaker” from Chrysler’s quick tour through bankruptcy.

In his 95-page opinion Sunday, for example, Judge Gerber repeatedly cited the discussion of issues from the opinion by Judge Arthur J. Gonzalez, who approved the Chrysler sale last month.

Professor White said the Supreme Court’s ruling against pensioners from Indiana, who sought to block the Chrysler sale, also was likely to deter similar actions in the G.M. case.

Beat It

Fox News' War Is Peace Jihad Against Obama

As the author of A Blue View, I certainly understand and condone having a political point of view when you cover the news.  But after reading this Media Matters post, and viewing their other examples of Fox News' editing Obama to make him say the exact opposite of what he actually said, I am fuming and wondering how to respond. 

I'm open to suggestions but here's a start: please pass this post on to anyone you know who watches Fox News.

On the July 7 edition of his Fox News show, Sean Hannity deceptively cropped President Obama's answer to a question from Fox News senior White House correspondent Major Garrett about the Cold War to suggest that Obama did not acknowledge the actions of past U.S. presidents in freeing Eastern Europe.

In fact, as part of his answer, Obama stated, "I'm very proud of the traditions of Democratic and Republican presidents to lift the Iron Curtain," a comment Hannity edited out of the clip he aired of Obama's response.

Hannity aired the following clip:

GARRETT: In your speech this morning, you said the Cold War reached its conclusion because of the actions of many nations over many years.

Mr. President, are the Russian sensitivities so fragile that you can't say the Cold War was won, the West won it, and it was led by a combination of Democratic and Republican American presidents?

OBAMA: There were a whole bunch of people throughout Eastern Europe who showed enormous courage, and I think that it is very important in this part of the world to acknowledge the degree to which people struggled for their own freedom.

We don't have to diminish other people in order to recognize our role in that history.

From Fox News' transcript of Obama's July 7 interview with Garrett, with the portions of Obama's answer Hannity omitted in bold:

GARRETT: In your speech this morning, you said the Cold War reached its conclusion because of the actions of many nations over many years. Mr. President, are the Russian sensitivities so fragile that you can't say the Cold War was won? The West won it? And it was led by a combination of Democratic and Republican American presidents?

OBAMA: Well, listen, the -- I think that you just cut out Lech Walesa and the Poles. You just cut out Havel and the Czechs. There were a whole bunch of people throughout Eastern Europe who showed enormous courage.

And I think that it is very important in this part of the world to acknowledge the degree to which people struggled for their own freedom. I'm very proud of the traditions of Democratic and Republican presidents to lift the Iron Curtain.

But, you know, we don't have to diminish other people in order to recognize our role in that history.

After airing the cropped clip, Hannity said:

HANNITY: Unbelievable. Now, that's interesting, because Lech Walesa, the leader of the Polish Solidarity Movement, said this about the end of the Cold War; he said, quote: "We in Poland took him, Ronald Reagan, so personally. Why? Because we owe him our liberty. Now this can't be said often enough by people who lived under oppression for half a century."

Mr. President, if I were you, you may want to consider hitting the history books maybe before your next foreign trip.

Media Matters for America has documented a pattern by Hannity and other Fox News personalities of cropping Obama's comments abroad to misrepresent their meaning.

Here's what Hannity aired on July 7:

Massachusetts Challenges Constitutionality Of DOMA

From the Boston Globe:

Massachusetts, the first state to legalize gay marriage, yesterday became the first to challenge the constitutionality of a federal law that defines marriage as the union of a man and a woman, contending that Congress intruded into a matter that should be left to states.

The suit filed by state Attorney General Martha Coakley says the Defense of Marriage Act of 1996 violates the US Constitution by interfering with the state’s right to define the marital status of residents. The suit also says the law forces the state to discriminate against same-sex married couples - on certain health benefits and burial rights - or risk losing federal funding.

“Congress overstepped its authority, undermined states’ efforts to recognize marriages between same-sex couples, and codified an animus towards gay and lesbian people,’’ said the complaint filed in US District Court in Boston.

More than 16,000 same-sex couples have wed in Massachusetts since gay marriage became legal in the state in 2004, the suit said, “and the security and stability of families has been strengthened in important ways throughout the state.’’

Charles Miller, a spokesman for the Justice Department, which defends the government in litigation, issued a two-sentence statement yesterday saying President Obama “supports legislative repeal of the Defense of Marriage Act because it prevents LGBT couples from being granted equal rights and benefits. We will review this case.’’

Massachusetts risks losing millions in dollars for MassHealth, the state’s Medicaid program for the poor, and for veterans’ cemeteries overseen by the state Department of Veterans Services, unless it obeys the Defense of Marriage Act. The federal government has told the state that it cannot provide federal funding for MassHealth benefits given to same-sex spouses. It also informed the state it will lose Veterans Affairs funding if it buries the same-sex spouse of a veteran in a cemetery, as the state does for heterosexual spouses of veterans ...

The suit is the second in four months challenging the Defense of Marriage Act in federal court in Boston. On March 3, six same-sex couples and three men whose husbands died brought a claim that said the federal law barred them from getting more than 1,000 marriage-related benefits that heterosexual couples enjoy. The benefits include health insurance for spouses of federal employees and tax deductions for couples who jointly file federal income tax returns.

The Rise of Right Wing Hate

Democrats Say C.I.A. Lied To Congress for Years

From the Wall St Journal:

Central Intelligence Agency Director Leon E. Panetta has told lawmakers that the agency "concealed significant actions" from Congress, according to a letter released Wednesday from seven Democratic lawmakers. The letter also contends that Mr. Panetta said CIA officials have misled Congress since 2001.

House Intelligence Committee Chairman Silvestre Reyes sent a separate letter on Tuesday to the top Republican on his committee saying that Mr. Panetta's appearance led him to conclude that the CIA had "affirmatively lied" to the committee. Mr. Reyes, a Texas Democrat, said the issues Mr. Panetta disclosed to the committee may lead to a full committee investigation.

"I believe that CIA has, in the vast majority of matters, told the truth," Mr. Reyes said in a statement. "But in rare instances, certain officers have not adhered to the high standards held, as a rule, by the CIA with respect to truthfulness in reporting."

Neither letter described the nature of the actions hidden. Both lawmakers and the CIA declined to provide details ... The public tussle nonetheless threatens to further undermine Congressional relations with the CIA. Congress exercises oversight over U.S. intelligence agencies. The House and Senate intelligence panels, created in the late 1970s to prevent a repeat of the Nixon-era domestic-spying abuses, often receive classified briefings in private.

The relationship between the CIA and Congress grew poisonous over the course of the Bush administration after revelations concerning programs such as CIA's coerced interrogations ...

CIA spokesman George Little said, "It is not the policy or practice of the CIA to mislead Congress." Mr. Little said the CIA itself "took the initiative to notify the oversight committees" about the lapses. Mr. Panetta brought the issue to lawmakers' attention on June 24.

Rep. Anna Eshoo, a California Democrat who signed the letter, gave the director "credit for coming up and meeting with us and informing us," adding that Mr. Panetta had learned of the matter the day before the June 24 briefing but said she was deeply disturbed that the CIA actions had been concealed from all lawmakers ...

The Democratic lawmakers' letter, which they sent to Mr. Panetta, asked him to revise his May 15 statement to the intelligence panel, in which he said: "It is not our policy or practice to mislead Congress. That is against our laws and values." Mr. Little said Mr. Panetta stands by that statement.

Rep. Rush Holt, a New Jersey Democrat who chairs a spending subcommittee on intelligence and was among the lawmakers who signed the letter said in an interview that the information that was hidden from Congress was not over a small issue, adding "it's serious stuff."

He added, "Our reason for writing the letter in the first place has to do really with the integrity of Congress and the balance of powers."

Dave's Top Ten Messages On Sarah Palin's Answering Machine

Watch it.

			"Hi, It's George W. Bush. Why didn't anyone tell me resigning was an option?"
			"It's John McCain -- why did I call?"
			"Mark Sanford here. Ever been to Argentina?"
			"I'm calling from Geico to see if you want to renew your dogsled insurance"
			"It's Letterman -- we still cool?"
			"McCain again. Still no idea why I called"
			"Hi, it's the dry cleaner. Having trouble getting caribou blood out of your Prada jacket"
			"Hi, it's Sarah...oops...dialed my own number"
			"Schwarzenegger here. If you want a job, California could use a new governor"
			"Hey, it's McCain. Who would've thought you'd retire before I did?"

Doubts About Obama’s Economic Recovery Plan--And What To Do Next--Increase

From the NY Times:

At his inauguration in January, President Obama warned that times would get tougher before they got better. He has been proved correct.

With unemployment already at 9.5 percent and likely to exceed 10 percent, much higher than White House officials predicted back in February, Mr. Obama has been facing attacks that his $787 billion stimulus program was either too timid or wrong-headed or both. Now, just five months after Congress agreed on the plan, with only a fraction of the money actually out the door, Washington is debating the need for a second round of stimulus amid economic and political crosscurrents.

In Ohio, where unemployment is above 10 percent and where Vice President Joseph R. Biden Jr. will visit on Thursday, Mr. Obama’s popularity has dropped sharply. In a poll by Quinnipiac University earlier this week, 48 percent of respondents said they disapproved of Mr. Obama’s handling of the economy, while 46 percent approved, down 11 percentage points since May ...

For the moment, Mr. Obama and his top economic advisers are fending off calls for more action, combining a message of hard-headed realism about the magnitude of the economy’s problems with more cheerful predictions about an imminent boost as the government spending begins to hit the streets.

“The stimulus is on track,” Lawrence H. Summers, director of the White House National Economic Council, said Wednesday in an interview. “We planned for a program that would stimulate the economy over a two-year period, with a force that increases significantly over calendar year 2009. The implementation is on track to deliver that.”

Administration officials say a job market recovery usually lags behind the economic recovery itself. Indeed, most forecasters had predicted that unemployment was likely to keep rising through the end of 2009 and would not start to edge down until 2010.

“People know that problems of this seriousness cannot be turned around in six months or nine months,” Mr. Summers said ... But political pressures may not give the administration two years to show that its plan is working, especially if Democrats in Congress begin to conclude that continued bad economic news is putting them at risk of losing seats in the 2010 midterm elections ...

Administration officials had predicted that the stimulus program would save or create 600,000 jobs by summer. But the economy has lost more than two million jobs since Mr. Obama took office, and officials now estimate that the program has saved only about 150,000 jobs.

Republicans say that Mr. Obama’s recovery plan is failing and proves that government spending is an inefficient way to help the economy. Some Democrats fret that the program may be either too small or too slow.

Laura Tyson, a former economic adviser to President Bill Clinton, told an investor group in Singapore on Wednesday that the stimulus program was a “bit too small” and that the United States might need a second effort.

A top House Democrat, Representative Steny H. Hoyer of Maryland, told reporters on Tuesday that policy makers needed to be “open” to the possibility of a second program.

Administration officials acknowledge that their initial forecasts, which anticipated that unemployment would peak at 8.5 percent, were too optimistic, although they were in line with Federal Reserve and most private forecasters ...

The looming political battle is about how to respond, and three camps are forming.

Hitler Finds Out Sarah Palin Resigns

G8 Meeting's Mixed Success On Climate Change

From the Wash Post:

The world's leading industrial nations tentatively agreed Wednesday to try to prevent global temperatures from rising above a fixed level, after a more far-reaching proposal to slash production of greenhouse gases fizzled, according to U.S. and European negotiators.

Leaders meeting here for the Group of Eight summit said they would pledge to keep temperatures from rising more than 3.6 degrees Fahrenheit above average levels of more than a century ago, before large-scale industrial pollution occurred.

Temperatures have already risen by nearly half that amount, leaving little wiggle room. It was unclear what mechanisms, if any, would be adopted to enforce the target.

Some environmental groups saw the announcement as a weak nod at the obvious.

"This was such an opportunity," said Tobias Muenchmeyer, a Berlin-based activist with the group Greenpeace. "We are very disappointed that the result is so limited."

For other groups, the best that could be said of Wednesday's declaration was that, although it did not commit countries to specific cuts in greenhouse gases, it appeared to create a moral imperative to do so eventually.

"It may be symbolic now," said David Hamilton of the Sierra Club. But, he added, "if we have a commitment to a temperature goal, then you're actually going to figure out how we're going to get there."

The tentative deal on climate change was one of several agreements to come out of the summit's first day. The leaders also agreed to a statement denouncing Iran for its recent crackdown on election protesters and expressing growing impatience with its nuclear program ...

The leaders also ratified President Obama's proposal to hold a nuclear security summit in Washington next March. The gathering, which administration officials said would involve about 25 nations, would focus on ways to limit the threat of nuclear proliferation.

Has The Storm Passed?

The Price Of Finding Common Ground

Not surprisingly, since Obama's M.O. is to find common ground, he has to trade some horses to get there. This NY Times story explores some of the potential trades:

The deals, trumpeted loudly by the White House, would each help pay for a sweeping overhaul of the health care system.

First, it was a broad consortium of health industry groups — doctors, hospitals, drug makers and insurers, all promising to slow the growth of medical spending by 1.5 percent. Then, it was the big drug makers, promising savings of $80 billion over 10 years, by lowering the cost of medicine for the elderly.

On Wednesday, it will be major hospital associations, pledging to save more than $150 billion over a decade. And a deal with doctors is said to be on tap next.

In each case, the Obama administration hailed the agreements as historic. But what has been little discussed is what the industry groups will be getting in return for their cooperation, whether or not the promised savings ever materialize.

The short-term political benefits are clear. Senior White House officials say the deals are building momentum that will help propel the health care legislation past potential opponents in the private sector and on Capitol Hill.

Rather than running advertisements against the White House, the most influential players in the industry are inside the room negotiating with administration officials and leading lawmakers, like Senator Max Baucus, chairman of the Finance Committee.

“The very groups we have been talking to have been the most vocal opponents of health care reform; they are now becoming the vocal proponents for health care reform,” said Rahm Emanuel, the White House chief of staff.

But some lawmakers said the deals, while seemingly helpful, could raise false expectations by obscuring how much the industry is demanding for its concessions.

“I’m delighted to hear that people are stepping up to help reduce costs,” said Senator Christopher J. Dodd, Democrat of Connecticut, who is leading the Senate health committee, “but I want to know what the ask is, and the ask sometimes can exceed the value of your cost savings.”

Senator Olympia J. Snowe, Republican of Maine, who could provide a critical swing vote, said she had not signed on to any of the White House deals. “It’s one thing for the president to reach that agreement, but it’s another thing for Congress to reach that agreement,” Ms. Snowe said. “We have yet to evaluate what are the specifics and particulars. So it’s uncertain. It could be helpful. I just don’t know.”

As part of their deal with the White House, pharmaceutical companies say they won an agreement from Mr. Baucus to oppose efforts by House Democrats to sharply reduce what the government pays for drugs for some Medicare recipients previously covered by Medicaid.

The deal with doctors could come at a steep price: a $250 billion fix to a 12-year-old provision in federal law intended to limit the growth of Medicare reimbursements. The American Medical Association and other doctors’ groups have sought to change or repeal the provision, and they are likely to try to extract that as their price for boarding the Obama train, people tracking the negotiations said.

Wal-Mart, the nation’s largest private-sector employer, agreed recently to support requiring all big companies to insure their workers. In exchange, Wal-Mart said it wanted a guarantee that the bill would not “create barriers to hiring entry-level employees” — in effect, code words to insist that lawmakers abandon the idea of requiring employers to pay part of the cost for workers covered by Medicaid, the government insurance plan for the poor.

“It’s kind of a give-and-take, quid pro quo kind of environment,” said Tom Daschle, President Obama’s first choice for health secretary, who remains in touch with the White House on health care issues. “I think that the stakeholders wouldn’t do this if they didn’t think there was something in it for them.”

But, Mr. Daschle said, there is something in it for Congress and the White House, too: By getting on board early, groups like the drug makers and hospitals will be “owners of this process, and as owners they have to continue to defend it and support it.”

Both Have Blood On Their Hands

You Can't Always Get What You Want: The Central Issue In Health Care Reform We're Not Debating

Though this Wash Post story uses the emotionally loaded word "rationing" it is a foundational principle of capitalism that not everyone can get what they want or need; just what they can afford.  So how come the notion of a capitalist society putting limits on health care is something so beyond the pale, we can't even discuss rational ways to do it? After all, health care rationing occurs right now, it's just done in a haphazard, unfair way (just ask any of the 47 million uninsured).

The question came from a Colorado neurologist. "Mr. President," he said at a recent forum, "what can you do to convince the American public that there actually are limits to what we can pay for with our American health-care system? And if there are going to be limits, who . . . is going to enforce the rules for a system like that?"

President Obama called it the "right question" -- then failed to answer it. This was not surprising: The query is emerging as the ultimate challenge in reining in health-care costs that now consume $2.5 trillion per year, or 16 percent of the economy. How will tough decisions be made about what to spend money on? In a country where "rationing" is a dirty word, who will say no?

The question permeates all levels of medicine: the use of tests that many argue are unnecessary (U.S. doctors order five times as many MRIs as doctors do in Germany); how early to intervene with common conditions such as heart disease and prostate cancer; how aggressively to treat patients nearing their life's end.

Although Obama and his advisers have held up providers' spending patterns as the crux of the crisis, proposals in Washington go only so far in addressing the thorniest questions about who gets what care. Instead, cost-saving measures are focused on introducing a public insurance option to compete with private insurers, or on general cuts in Medicare and Medicaid payments to hospitals.

The bills being written would put new emphasis on evaluating treatments according to their "comparative effectiveness," or weighing the risks and benefits of different types of treatment for the same illness, but the bills stop short of incorporating cost-benefit analyses into the findings or of requiring that providers abide by conclusions ...

"The questions of who gets what, these difficult choices . . . really are not posed in the current health reform legislation," said Drew E. Altman, president of the Kaiser Family Foundation. "The challenge," he said, "is us, the American people: We want the latest and the best, and we want it now."

The Democrats' caution has not kept Republicans from accusing them of embracing rationing. They raise the specter of the British agency, which goes by the acronym NICE, that decides whether that country's nationalized health-care system will pay for items such as costly cancer drugs that extend lives a few months on average.

"You're going to be saying to people, 'We're not going to care for you, because we've decided it's too expensive to care for you,' " said Robert E. Moffit of the right-leaning Heritage Foundation.

Others retort that the United States already has rationing: The uninsured and under-insured do not get the care they need. "We're already doing it," said Stanford University epidemiologist Randall Stafford. "We're just doing it in such way that it doesn't service societal interests."

But reformers are clearly spooked by the notion that they could be accused of denying, for example, hip surgery to an 80-year-old. In recent months, a federal panel has held hearings on how to spend $1.1 billion in economic stimulus money allocated for comparative effectiveness research. At each hearing, representatives of providers, industry and patient groups praised the research -- but then demanded that cost not factor into the eventual findings.

Scott Wallace, a Bush administration official who is now the Batten Fellow at University of Virginia's Darden School of Business, said factoring cost into treatment decisions would create the same backlash that HMOs encountered in the 1990s. "A mother of five with cancer wins against any rationing scheme ever created," he said.

Keith Olbermann On Michael Scheuer Wanting An Al Qaeda Attack While Glenn Beck Nods Idiotically

New Regulations On “Speculative” Energy Trading Coming

From the NY Times (also see New Regulations On Food Safety Coming):

Reacting to the violent swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering new restrictions on “speculative” traders in markets for oil, natural gas and other energy products.

The move is a big departure from the hands-off approach to market regulation of the last two decades. It also highlights a broader shift toward tougher government oversight under President Obama.

Since Mr. Obama took office, the Justice Department has stepped up antitrust enforcement activities, abandoning many legal doctrines adopted by the Bush administration.

The Obama administration is also proposing an overhaul of financial regulation that would include tougher capital requirements for big banks, tighter regulation of hedge funds and a new consumer protection agency with broad power to regulate credit cards, mortgages and other consumer lending.

In the case of oil and gas trading, regulators made it clear that they were willing to move, without waiting for Congress to act on Mr. Obama’s overhaul, invoking their existing powers.

The Commodity Futures Trading Commission said it would consider imposing volume limits on trading of energy futures by purely financial investors and that it already has adopted tougher information requirements aimed at identifying the role of hedge funds and traders who swap contracts outside of regulated exchanges like the New York Mercantile Exchange ...

Much of Mr. Gensler’s announcement was focused on precise issues well within his agency’s authority, suggesting that he was serious about seeking changes. But his proposals could encounter fierce opposition from big banks and Wall Street firms, which are each big traders in the commodity markets and manage big investment funds focused on commodities ...

“It is the regulatory authority’s business to make sure the markets work,” said Edward L. Morse, head of research at LCM Commodities, a brokerage in New York. “If there’s a lesson of that last few years, it’s that the markets haven’t been functioning as well as they should have been.”

Analysts said regulators face huge challenges in distinguishing normal volatility, which is always high during a chaotic economic period, from speculative swings propelled by investors seeking purely financial gains who end up distorting energy prices.

Mr. Gensler appears focused on two basic goals. The first is to limit the volume of trading by purely financial investors, the “speculators,” as opposed to businesses like airlines or oil companies that consume or produce oil and want to minimize their exposure to big changes in price. But according to data compiled by the Commodity Futures Trading Commission, other noncommercial traders accounted for almost one-fifth of the activity in several major oil and gas products for June.

The government already imposes speculative limits on agricultural commodities like corn and wheat. But for energy products, the limits are left to exchanges like the New York Mercantile Exchange. Mr. Gensler said the limits that have been set in the past have never been aimed at reducing speculative excesses, and financial traders often receive exemptions.

The government’s second goal is to shed more light on who the players really are.

The commission also announced that it will pull back part of the veil on the oil and gas markets, publishing much more detailed information about the aggregate activity of hedge funds and tapping into new information about traders who swap energy contracts outside of traditional exchanges.

Mr. Gensler’s proposals are likely to be opposed by the banks and Wall Street firms that arrange swap contracts in the commodity markets and operate funds that invest in commodities.

More Palin Cartoons

 

New Regulations On Food Safety Coming

From the Wash Post (also see New Regulations On “Speculative” Energy Trading Coming):

The Obama administration took its first step yesterday toward overhauling food safety regulations that have been blamed for a steady stream of food recalls and related illnesses.

The new proposals, recommended by a working group that President Obama created in March, emphasize prevention, enforcement and improving the government's response time to such incidents.

"There are few responsibilities more basic or more important for the government than making sure the food our families eat is safe," Vice President Biden said at a White House news conference, where he was joined by Health and Human Services Secretary Kathleen Sebelius and Agriculture Secretary Tom Vilsack. "American families have enough to worry about today. They should not have [food safety] as a concern."

Fears about food safety have been spurred by outbreaks of salmonella and E. coli illness from products as varied as peanuts, spinach, tomatoes, pistachios, peppers and, most recently, cookie dough.

Fifteen federal agencies oversee food inspections in a complex and sometimes bizarre division of labor: The Food and Drug Administration is responsible for produce, while the Agriculture Department is responsible for meat. Cheese pizzas are inspected by the FDA, while pepperoni pies go to the USDA.

The administration outlined a variety of measures yesterday to prevent the spread of salmonella, a bacterium that causes more than 1 million illnesses each year in the United States.

Among them is a final rule, issued by the FDA, to reduce the contamination in eggs. About 142,000 Americans are infected each year with Salmonella enteritidis from eggs, the result of an infected hen passing along the bacterium. About 30 die.

The FDA will now require that egg producers test regularly for salmonella and buy chicks from suppliers who do the same. Eggs, which must be refrigerated by wholesalers and retail stores, will have to be refrigerated on the farm and during shipment, as well. About half the egg industry is following similar guidelines voluntarily.

The agency said that will help reduce the number of related food-borne illnesses by an estimated 79,000 a year, or about 60 percent. The new requirements will cost producers about $81 million a year, and add about 1 cent to the cost of a dozen eggs, FDA Commissioner Margaret Hamburg said. Sebelius said it will save the nation about $1.4 billion a year in medical expenses ... 

Both agencies also announced plans to tackle E. coli. FSIS will step up enforcement at meat processing plants and increase sampling that tests for the pathogen, especially in ground beef. By the end of the month, the FDA, which is responsible for fresh produce, will issue guidance on ways to reduce contamination in the production and distribution of tomatoes, melons and leafy greens ...

On the whole, food safety advocates were pleased with the new initiatives. "We are coming out of a phase, just like in the financial sector, where the government was loath to regulate," said Caroline Smith DeWaal, food safety director for the advocacy group Center for Science in the Public Interest. "Tougher controls earlier in the food chain will result in fewer recalls and fewer outbreaks."

Bill Marler, a longtime food safety litigator who writes a blog about the issue, said: "Part of the problem with how we currently deal with food-borne illness cases is we wait until people get sick and die, and then we announce an outbreak. It seems that the focus here is a bit on preventing it before we have sick and dead people, as opposed to counting the bodies after salmonella or E. coli is out of the barn."