Military Spending Reform Stirs Strategic Debate
NYT on the fight to enact the Pentagon’s proposed spending cuts: “Military analysts said the biggest lobbying campaigns would be focused on Mr. Gates’s proposed cutbacks in the F-22, the advanced stealth fighter that critics call a relic of the cold war, as well as his trimming of the Army’s $160 billion modernization project, called the Future Combat Systems. Members of Congress from Georgia and Oklahoma, where the jet and the Army project mean jobs, promised a fight.”
The Hill gives WH upper hand over Congress: “Congress has little chance of stoping President Obama’s sweeping changes to the military budget, which would scrap several high-profile weapons programs … Obama and Gates are selling the proposal as meeting the needs of American soldiers, and efforts to block the recommendation to protect jobs back home may make members look hopelessly parochial.”
NYT editorial board criticism of military spending plan echoes OurFuture.org’s Armand Biroonak: “The only problem is that [Defense Sec. Robert Gates] did not go far enough. Much is being made of his plans to cut the Air Force’s F-22 fighter jet when, in fact, he wants to purchase four more of the planes … We have long argued for canceling the DDG-1000 Zumwalt class destroyer, a stealthy blue-water combat ship designed to fight the kind of mid-ocean battles no other nation is preparing to wage. Mr. Gates wants to buy three of them … He should have cut deeper than $1.4 billion into the unproven missile defense program and gone forward with planned reductions in the size of the active-duty Navy and Air Force.”
Foreign Policy In Focus’ Miriam Pemberton and Travis Sharp see a glass half-full: “It proposes the most ambitious set of cuts to well-entrenched weapons systems since the early ‘90s … At the same time, this budget perpetuates the overall upward trajectory of defense spending … It’s a start. The president’s commitments to negotiate a reduction in our nuclear arsenal down to 1000 warheads, and to get serious about acquisition reform, will bring more. Meanwhile, preserving even these cuts won’t be easy. This tree falling in the forest has made quite a sound, in the form of howls of protest from major contractors echoing through congressional halls even before Gates finished speaking.” (via National Priorities Project)
“Who Won and Who Lost in the Defense Budget?” asks TNR’s The Plank reviews.
As Pentagon chief, Cheney proposed big Pentagon cuts reminds AmericaBlog’s John Aravosis.
Congressional Watchdog Releases Critical TARP Assessment
Bloomberg on Congressional Oversight Panel report: “A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis[,] Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is ‘mixed.’”
“[Panel chief Elizabeth] Warren was joined by Richard Neiman, New York state’s banking superintendent, and Damon Silvers, associate counsel of the AFL-CIO. Voting against its findings were Rep. John Hensarling, R-Texas, and John Sununu, a former Republican senator from New Hampshire,” reports CNN/Money.com.
Robert Borosage in HuffPost suggests how Sen. Dodd could recharge his political standing: “Dodd’s reputation has been sullied in the financial collapse… So, why not turn the lemons into lemonade? As Chair of the Senate Banking Committee, Dodd could make himself into the source of the solution, not part of the problem. We need a Pecora Commission – a grand inquest into the roots of the financial crisis, modeled after the investigation led by Ferdinand Pecora in the 1930s. But the Pecora wasn’t running an independent commission. He was Chief Counsel for the investigation of the Senate Banking Committee.”
W. Post runs negative “unintended consequences” piece on proposed WH regulations on financial markets: “Financial experts say the perception that the government will backstop certain losses will actually encourage some firms to take on even greater risks and grow perilously large. While some financial instruments will come under tighter control, others will remain only loosely regulated, creating what some experts say are new loopholes. Still others say the regulation could drive money into questionable investments, shadowy new markets and lightly regulated corners of the globe. And a shortage of manpower raises questions about the government’s ability to keep up with the vast and complex financial markets.”
W. Post also plays up complaints from business about government conditions on bailout money: “Participation in the government’s signature program to restart lending to consumers was weak this month, as would-be participants were put off by legal complexities and fear that outrage in Congress could hurt them if they take part. Only $1.7 billion in government support for credit card loans and auto loans was supplied in the second month of the Term Asset-Backed Securities Loan Facility, or TALF. That is down from $4.7 billion in the first month, and the Federal Reserve and Treasury Department ultimately envision the program deploying up to $1 trillion to support all sorts of lending.”
AIG counterparty payments being audited. Reuters: “The internal watchdog for the Treasury Department’s financial bailout program is auditing payments made by the American International Group to counterparties in its dealings, including Goldman Sachs.”
Banks try to self-regulate derivatives better, starting today reports CNN/Money.com and FT. “The moves should eventually make it easier for regulators to oversee the [credit default swaps] market, whose rapid growth and limited transparency have long been a source of acute anxiety. Treasury Secretary Tim Geithner has called for putting the market, currently an “over-the-counter” affair that consists of private contracts between traders, on the same footing as the markets for stocks and commodities, in which parties trade with a central counterparty or exchange. The changes, which are due to take effect Wednesday, will push the market closer to that goal.”
Global financial markets needs more capital, suggests IMF. FT reports: “The International Monetary Fund is likely to raise its estimate of total credit losses on US assets from $2,200bn to about $2,800bn when it releases its Global Financial Stability report later this month … The new projection highlights the scale of the challenge involved in fixing the global financial system and suggests that large additional amounts of capital will be required to put it back on a sound footing.”
Four more nations off the OECD tax haven blacklist after accepting higher transparency standards, reports BBC.
Unions Fight On For Free Choice, Look To Unify
The Atlantic’s Chris Good reports labor took a step towards unification to help pass Employee Free Choice and health care: “The largest labor organizations in the country have formed a coalition to guide talks of a unified labor movement: the AFL-CIO and Change to Win, in addition to major affiliate unions and the unaffiliated National Education Association, today formed a National Labor Coordinating Committee, chaired by former Rep. David Bonior … labor now finds itself acting as a major player in two massive legislative/lobbying efforts: the Employee Free Choice Act and health care reform. Bonior today implied that labor needs to unify if it wants to take advantage of its newfound position of power”
The union presidents have largely agreed to focus the federation (its name is still up in the air) on the political and lobbying operations at which the AFL-CIO has excelled. They will continue meeting over the next several months to hammer out details — a timetable that could produce a plan to be ratified at the AFL-CIO’s convention in September.
The unification is the result of both dashed hopes and new hopes. The dashed hopes are those of the founders of Change to Win, who argued that by focusing on organizing rather than politics, they could reverse the decline in union membership. That proved not to be the case, which is why all of labor now sees passage of the Employee Free Choice Act, which would protect workers’ right to join unions, as key to their expansion — or survival…
…the most daunting task the unions face is passing the Employee Free Choice Act — a challenge that’s grown steeper since Sens. Arlen Specter (R-Pa.) and Arkansas’ Blanche Lincoln (D-Walmart) announced that they wouldn’t support the legislation in its current form. Labor must calculate how much it can compromise on a bill that is essential to rebuilding private-sector unions in America, and whether it can renew the fight if the Democrats pick up more senators in next year’s midterm elections — a campaign to which a newly unified labor movement would bring greater numbers, more coordination and a desperate ferocity.
HuffPost’s Art Levine on continuing grassroots efforts to pass Employee Free Choice: “With Congress in recess, unions are using the two-week respite to spark activism among not only union members but their progressive allies, including religious leaders, small business owners, civil rights groups and student organizations.”
WH Backs House Clean Energy & Climate Protection Bill
“The carbon price signal created by a cap-and-trade system will encourage energy efficiency, the low-hanging fruit of greenhouse gas emissions reductions,” CEQ Chairwoman Nancy Sutley said during a carbon markets conference in Washington. “More importantly, it will also encourage the development and deployment of the clean-energy technologies that will be critical to address climate change, enhance energy security and create jobs that can’t be outsourced.”
The draft cap-and-trade bill introduced last week by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) would advance President Obama’s goals, she said.
Speaking with reporters after her speech, Sutley declined to say whether administration officials worked with the lawmakers to craft the bill, which would create a cap-and-trade program curbing U.S. emissions 20 percent below 2005 levels by 2020 and 83 percent by midcentury.
The measure also would create a nationwide renewable electricity standard that reaches 25 percent by 2025, energy efficiency programs, limits on the carbon content of motor fuels, and greenhouse gas standards for new heavy-duty vehicles and engines.
“The Waxman legislation reflects the themes that the president has talked about, so it’s a good place for us to start,” Sutley said. “We’ll find ways to work with the members of Congress.”
Climate Progress’ Jake Caldwell explores how legislation can protect our global competitiveness and prevent jobs from shifting to lax nations: “Overall, an international agreement with binding limits on greenhouse gas emissions and other cooperative efforts are the best means to address U.S. manufacturing competitiveness in a global, low-carbon economy … But should that not happen soon or comprehensively, then prioritizing the distribution of rebates ahead of border adjustments allows for important heavy carbon-emitting industries in the United States to be included under the economy-wide cap-and-trade regime, and arguably provides for a much more effective and economically efficient means to address any potential compliance costs and carbon leakage concerns.”
NYT’s Tom Friedman prods WH to go for a carbon tax instead of a “cap-and-trade” approach to climate protection.
After furious blog push, W. Post reporters call out W. Post columnist George Will for misrepresenting Arctic ice melting data. Grist’s David Roberts: “I can’t think of another instance when a news story at a newspaper explicitly called out an op-ed writer in the same paper for lying, by name.” TNR’s Brad Plumer: “You don’t usually see news reporters criticizing their own papers’ op-ed columnists, but in this case, it was long overdue.” Climate Progress’ Joe Romm: “This is a slap at the man who, though know idealogue, keeps letting Will publish his anti-scientific disinformation, the man whose actions have truly tarnished the reputation of the Washington Post op-ed page and letters column, editorial page editor, Fred Hiatt.” The Intersection’s Chris Mooney: “When someone is as factually wrong as Will is, it shouldn’t just be a matter of opinion.”
Get Energy Smart Now rips flimsy study claiming creating clean-energy jobs causes job losses: “…the study fails to establish cause and effect. In other words, there may have been 2.2 jobs lost for every green job created, but that says nothing about whether there is a causal relationship between the two variables … here have already been studies which contradict the claims … a study by the Union of Concerned Scientists finds that if we are to go to a 25% alternative energy plan by 2025, then we would create a net 200,000 new jobs as well as 200,000 new jobs total. [The UCS study took] into account such things as manufacturing, equipment, installation, and maintenance, while the [other] study did not.”
“Global warming is likely to overshoot a 2 degrees Celsius (3.6 F) rise seen by the European Union and many developing nations as a trigger for “dangerous” change, a Reuters poll of scientists showed on Tuesday … Ten of 11 experts said it was at best ‘unlikely’ — or less than a one-third chance — that the world would manage to limit warming to a 2 degrees Celsius (3.6 Fahrenheit) rise above pre-industrial levels. ‘Scientifically it can be done. But it’s unlikely given the level of political will,’ said Salemeel Huq at the International Institute for Environment and Development in London.” (via Treehugger)
Millions Would Choose Public Health Plan Option
Wonk Room’s Igor Volsky on new analysis of public health plan option: “The Lewin Group has released a new report that ‘examines potential impacts that a public health plan might have in competing for enrollment with the private insurance industry.’ … the short conclusion is this: millions of Americans could abandon private insurance and enroll in the new public plan … . Conservative critics will surely hijack the study to argue that ‘millions of Americans will lose their health insurance coverage,’ but the reality is much more democratic: if millions of Americans are not satisfied with private insurance and believe that a public option would offer better quality at lower costs, then they will stop rewarding private insurers for providing expensive inferior coverage.”
Health Care For America Now’s Jason Rosenbaum adds: “No health care reform proposal under consideration would take away consumer choice. We are not talking about single payer here. So if millions end up on the public health insurance plan, it’s only because they chose to be on the public health insurance plan I can’t for the life of me understand why we wouldn’t want to offer the people in this country that kind of choice.”
EARLIER Lewin study of “Health Care for America” public plan option proposal finds it would “provide health care coverage for virtually every American while generating huge cost savings — more than $1 trillion over 10 years.”
Wonk Room’s Volsky also looks at new report on Massachusetts health care reform: “…early data has indicated that reform has successfully reduced the number of uninsured and increased access to coverage. The Massachusetts legislation did not address cost containment, but the popular reform has vindicated proponents of an employer mandate and shared responsibility … a new report released today reveals that ‘the spending for expansion has been shared more or less in proportion to how the spending for coverage was distributed prior to reform.’ … what conservatives describe as a ‘government-take over’ of health care is actually an arrangement in which all of the different players are helping to finance the system.”
GM Bankruptcy Prep “Intense”
Unnamed source tells both CNN/Money.com and Reuters that GM preparations for bankruptcy are “intense”. “The source, who spoke on the condition of anonymity, said GM still hopes to win concessions from its creditors and unions that will allow it to avoid bankruptcy. But the June 1 deadline given to the company by President Obama and the Treasury Department to reach deals or go into bankruptcy has caused a pick-up in preparations…”