No Need for Congress: Remember when Bush said he didn't need Congress to make a long-term security agreement with Iraq? (See The Weekly Wonk, The Declaration, 2/9/08 & By-Passing Congress, 2/2/08) Well, he's come up with another excuse. He said that the Authorization for Use of Military Force "permits indefinite combat operations in Iraq." Bush lackeys, uh, officials, are heading to Baghdad this week with drafts of a "status-of-forces" agreement and a "strategic framework." They want these signed by the end of July so they can go into effect when the current UN mandate expires at the end of the year. The Iraqi government has said it will not agree to a renewal of the UN mandate for foreign troops to be there beyond 2008. That's why Bush wants the bilateral agreements. (Washington Post)
Another Executive Order: Bush issued another Executive Order. This one involved the Intelligence Oversight Board (IOB), a standing committee of the President's Foreign Intelligence Advisory Board (PFIAB), that is charged with overseeing the legality of intelligence gathering activities. The EO strips this purpose from the IOB and transfers it to the Director of National Intelligence (DNI), a presidential appointee.
FISA: The U.S. Chamber of Commerce sent a letter to the House urging them to pass the Senate bill giving telecoms retroactive immunity. No surprise there. Everyone conveniently forgets that telecoms can "cooperate" to "save us from terrorism" if the feds get a warrant. Interestingly, the Computer & Communications Industry Association (CCIA), a trade group that represents companies in the computer, internet, information technology and telecommunications industries, is opposed to the immunity, and sent its own letter to Congress.
NSLs: FBI Director Robert Mueller testified before the Senate Judiciary Committee this week and said that an upcoming Justice Department report "will show the bureau improperly used national security letters to obtain personal data on Americans during terror and spy investigations." (AP)
Outlawing Torture: Bush announced on his radio address today that he has vetoed the bill banning the CIA from using torture. (See The Weekly Wonk, Outlawing Torture, 2/16/08) He needs all his options, he says. I don't know what difference it makes. If he doesn't like a law, he just ignores it anyway.
Iran: The UN Security Council approved the third round of sanctions. This is the first time that the ban included goods that have both civilian and military uses and "authorizes inspections of shipments to and from Iran by sea and air that are suspected of carrying banned items." (AP) The Christian Science Monitor had an interesting perspective about European powers taking over the helm.
Somalia: The U.S. made some airstrikes on Somalia. This was the 4th time in 14 months. The feds say the area is giving al Qaeda sanctuary, but a Pentagon spokesperson said the attack was against a known al Qaeda terrorist. "A." Airstrikes to get 1 person? Residents of the Somali town of Dobley said "they believed the missiles were targeting senior Islamist leaders meeting nearby." 6 people were killed and 3 were wounded. (Reuters)
Iraq: The Iraq Cabinet has approved the (once called) Production Sharing Agreements, later re-named ERCs (see The Weekly Wonk, Iraqi Oil Production, 7/7/07), now called Technical Support Agreements (TSAs). The deals will go to Royal Dutch Shell, BP, ExxonMobil, and Chevron. (AP) It appears that the name "Technical Support Agreements" is what had been used under the old, Saddam Hussein-era Hydrocarbon Law. (Iraq Updates) So, having failed to pass the new Hydrocarbon Law, and not getting their PSAs or ERCs, the oil companies are making agreements under the old Saddam Hussein laws. (UPI) I'm no expert in Iraqi law, but if I'm not mistaken, after the Cabinet, this has to go to the Parliament where, so far, the Kurds have blocked these things. The AP appears to be playing into Bush's hands when it says: "Iraq is in dire need of expertise from international oil companies to achieve the Oil Ministry's target of 3 million barrels per day by the end of 2008." These people have been producing oil for many decades. They have the expertise. Or they had, until we ran most of the knowledgeable people out of the country.
Gaza: Vanity Fair has dropped another bombshell. (See Where's the $9 Billion?) David Rose reported on the recent Bush interference in Gaza politics. The introduction says: "After failing to anticipate Hamas's victory over Fatah in the 2006 Palestinian election, the White House cooked up yet another scandalously covert and self-defeating Middle East debacle: part Iran-contra, part Bay of Pigs. With confidential documents, corroborated by outraged former and current U.S. officials, David Rose reveals how President Bush, Condoleezza Rice, and Deputy National-Security Adviser Elliott Abrams backed an armed force under Fatah strongman Muhammad Dahlan, touching off a bloody civil war in Gaza and leaving Hamas stronger than ever." Good God. They started a civil war!!! And yet "impeachment is off the table."
9/11: There's a new book coming out. Philip Shenon tells the story of Bush's ineptitude in the summer of 2001, all the warnings he and his staff ignored, and Philip Zelikow's cover-up in the investigation. (Remember, Zelikow was Condi's friend that Bush put in the PFIAB). The Sydney Morning Herald has an exerpt. Definitely worth a read.
Corporate Shenanigans: KBR, which used to be a subsidiary of Halliburton and is the top U.S. contractor in Iraq, has "avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in [the Cayman islands]." (Boston Globe)
Military Base Realignment: The 2005 Base Closure and Realignment Commission (BRAC) estimated the cost savings for 2 supply-related recommendations. The Government Accountability Office (GAO) has released a report stating that the Department of Defense (DoD) "will spend more, save less, and take longer than expected to recoup upfront costs . . ." GAO estimates that the net savings has been reduced from $1.8 billion to about $222 million.
Fall Senate Shenanigans: Watch for them. According to Roll Call, both Democratic and Republican senators are planning on bringing up "politically divisive issues" in order to derail the presidential candidacy of the other party. Great. Waste more time.
Mark R. Filip: He was confirmed as Mukasey's chief deputy by the Senate. (AP)
EPA & Toxic Chemicals: At the request of the chemical industry, the Environmental Protection Agency (EPA) dismissed Dr. Deborah Rice, a toxicologist, who had chaired a panel investigating the harmful effects of a flame retardant widely used in consumer electronics. According to documents obtained by Environmental Working Group (EWG), EPA removed Rice last August after the American Chemistry Council, a lobby for chemical manufacturers, complained she was biased. Apparently she gave testimony to the Maine Legislature around the time the EPA panel convened in which she called for a state ban on the chemical known as "deca" because "scientific evidence shows it is toxic and accumulating in the environment and people." EPA officials cited "the perception of a potential conflict of interest." (LA Times) Why can't she do this and Scalia can? (See The Weekly Wonk, Scalia & Torture, 2/23/08)
Coal: Anti-coal groups filed a lawsuit to stop federal investment in new power plants that would keep us burning coal for another generation. The suit was filed by the North Carolina-based Appalachian Voices and Canary Coalition. It states "that the federal government shouldn’t be in the business of subsidizing coal plants without knowing the true environmental costs – including impacts of ultra-destructive mountaintop removal coal mining. The Energy Policy Act of 2005 included $1.65 billion in tax incentives for new coal plants, $1 billion of which has been allocated to 9 projects around the country." (I Love Mountains)
Massachusetts' Health Care: The healthcare system put in place in Massachusetts appears to be working. In the first year, the use of "free care" dropped by 16%, which "is a crucial measure of the impact of insuring people." (Boston Globe)
Illegal Immigration: Senate Republicans are introducing a tough illegal immigration enforcement bill. It would require jail time for illegal immigrants caught crossing the border and make it harder for them to open bank accounts and compel them to communicate in English when dealing with federal agencies. (LA Times) Since this has little chance of going anywhere, I'm gonna stick my 2 cents in. First, illegal immigrants don't open bank accounts. They're too afraid of getting caught. Second, how can you compel someone to speak in a language they don't know? There's nothing you can do to compel me to speak in Hungarian. Third, where are we gonna get the jail space and money to lock these people up? And, fourth, ya think they'll enforce this with illegals coming across from Canada?
Legal Immigration: McClatchy managed to obtain a 2006 Immigration and Customs Enforcement (ICE) memo that says the Bush administration has "secretly established profiling techniques to screen immigrants based on their nationalities, protocols that critics charge encourage the unjustified targeting of Muslims."
Job Loss: The Labor Department announced that we lost 63,000 jobs in February, "the biggest drop since March 2003" and a follow-up to January's 22,000-job loss. Though the jobless rate fell slightly to 4.8%, it "reflect[ed] a shrinking labor force as some people gave up looking for work." (Bloomberg) Nobody with half a brain denies that we're in a recession. Also note that this is the 2nd recession of Dubya's administration.
Oil Prices: Went briefly to $103.95 on Monday. When adjusted for inflation, this beat the 1980 record of $103.76 during the Iran hostage crisis. The falling dollar is seen as a key culprit and many expect oil prices to keep increasing as investors continue to seek protection in commodities. (LA Times) Things didn't stop there. On Wednesday it went to $104.95 and on Thursday it went to $105.97. (AFP) Friday it settled out at $105.15. (AP) OPEC refused to increase its output, saying that the "mismanagement" of the American economy is a major culprit in driving up the prices. (Washington Post)
The Euro: It surged to a new high against the dollar on Monday. Gold also hit a record. (AFP)
European Central Bank: The NY Times has a great piece on the differences between the Fed and the European Central Bank in handling the same kind of financial problems. "The contrasting ways Mr. Bernanke and Mr. Trichet responded to the crisis in the markets reflect something more than the differing economic and financial conditions in the United States and Europe. At a more fundamental level, they reflect surprisingly different views of how each economy responds to the underlying forces affecting growth and inflation." A good read for financial wonks.
Show Me the Money: At least someone knows how to save. According to the NY Times, "the typical American corporation has increased its savings so sharply that it probably has enough cash on hand to completely pay off its debts. . . Corporate spending on equipment and other capital expenditures has declined as savings have soared, suggesting that companies could stimulate the economy now by going on a hiring and spending spree." How much is in the piggy bank? One study says it's doubled from 1998 when it was $203 billion to 2004 when it was $600 billion. Now if it would just trickle down.
Home Equity Problem: Moody's released a report stating that nearly 9 million homeowners, about 1 in every 10, will "either have no equity in their homes by the end of this month, or will have mortgage balances that exceed what their homes are worth." Fed Chair Ben Bernanke has asked lenders to "go beyond trimming interest rates on some troubled mortgages by cutting the size of the loans." He said that unless bankers act quickly, many homeowners could just walk away, "reversing the historical pattern of people hanging onto their homes at almost all costs." (LA Times)
Making Money on Failure: Former CEOs Charles Prince of Citigroup, Stan O'Neal of Merrill Lynch, and current CEO Angelo Mozilo of Countrywide Financial testified before the House Oversight and Government Reform Committee. They were asked about the hundreds of millions of dollars they received as "compensation awards" while "shareholders bear the brunt of billions in writedowns from subprime mortgages." O'Neal said "The compensation of senior management at Merrill was determined through a rigorous and independent process, and is consistent with pay levels in the industry." Prince said Citigroup "worked hard to align management's interests with the interests of shareholders." Mozilo had the best response. He said "his company's pay was tied to performance." Think about that one. (Bloomberg)
Wall Street Unfair: States are saying that Wall Street's system used to rate municipal bonds is unfair. It's complicated, but seems to comes down to the fact that Wall Street gives municipal borrowers low credit scores as compared to corporations, despite the fact that "states and cities rarely dishonor their debts." The lower rating makes it more expensive for cities and states to borrow money, forces them to buy expensive insurance policies, and ultimately ends up transferring billions of dollars in taxpayer money to the financial markets that could be used for local projects. Ratings agencies dispute these assertions and emphasize that little or no money would be saved if the system changed. (NY Times)
HSBC: This British bank is writing off an "unprecedented" $51 million a day in loans to Americans as it "grapples with an increase in people defaulting on their mortgages, credit cards, personal loans and car finance." (Times Online)
Save the Dolphins: Bush appealed the decisions of U.S. District Judge Florence-Marie Cooper who, first, imposed "the toughest set of restrictions ever imposed on the U.S. Navy's use of mid-frequency sonar off the Southern California Coast" (see The Weekly Wonk, Save the Dolphins, 1/5/08), and, second, rejected Bush's attempt to exempt the Navy (see The Weekly Wonk, Save the Dolphins, 1/19/08 and 2/9/08). Now the 9th Circuit Court of Appeals has rejected his appeal to exempt the Navy. However, it did give the Navy 30 days so it could conduct training missions without worrying about the damage to sea mammals. (LA Times) So, the sea mammals that survive the 30 days will be protected. (P.S. I heard on the radio this morning, but was unable to locate any print media that covered it, that 3 baby seals had died due to the Navy's operations and that they had suspended the maneuvers.)