Wednesday, February 2, 2011

Senate Won’t Allow Earmarks in Spending Bills

February 1, 2011, 4:55 PM

By CARL HULSE

Bowing to the inevitable, Senator Daniel K. Inouye, the chairman of the Senate Appropriations Committee, announced Tuesday that the panel would not allow pet spending projects known as earmarks to be included in this year’s appropriations bills.

Mr. Inouye, the nine-term Hawaii Democrat and an expert at steering money to his island state, conceded he did not have much choice since the Republican majority in the House had instituted its own ban and President Obama had also said he would veto any spending measure that contained earmarks.

“The handwriting is clearly on the wall,” Mr. Inouye said. “The president has stated unequivocally that he will veto any legislation containing earmarks, and the House will not pass any bills that contain them. Given the reality before us, it makes no sense to accept earmark requests that have no chance of being enacted into law.”

The decision clearly pained the chairman and he suggested he would resurrect the issue for another look once lawmakers of both parties became tired of not having the ability to direct spending to popular projects in their districts and states.

“Next year, when the consequences of this decision are fully understood by the members of this body, we will most certainly revisit this issue and explore ways to improve the earmarking process,” Mr. Inouye said.

The decision eliminates one complication from this year’s difficult spending debates, but the Democrat-controlled Senate and Republican-run House have different ideas on where Congress should end up on spending both in terms of the total amount and the priorities.

Congressional earmarks have been the subject of a long struggle between senior lawmakers who favor them and other lawmakers and watchdog groups who argue that they increase federal spending and breed corruption. The impact on the federal deficit is negligible, but winning a total ban on such spending is an important symbolic victory for earmark opponents.

“A one-two punch from Congressional Republicans and the president has brought an end to earmarks — at least temporarily,” said Ryan Alexander, the president of Taxpayers for Common Sense. “No more political muscle trumping project merit. This should usher in a new era for accountability and oversight on federal spending, not just in earmarked accounts, but budget-wide.”

Lawmakers are always searching for ways around such restrictions and will no doubt still try to influence spending decisions outside the formal definition of earmarks.

AP sources: House GOP readies restrictions on EPA

(AP) – 20 hours ago

WASHINGTON (AP) — In a sharp challenge to the Obama administration, House Republican leaders intend to unveil legislation to prohibit the Environmental Protection Agency from regulating greenhouse gases, officials said. They expect to advance the bill quickly.

EPA chief Lisa Jackson was due on Capitol Hill on Wednesday for the first time since Republicans took over the House and gained seats in the Senate. She probably will have to defend steps by the EPA to control air pollution and water pollution to Senate Republicans, who have introduced bills of their own to delay regulations aimed at abating climate change, or to bar the government from using any environmental law to fight global warming pollution.

Officials said the House bill, which was to be offered Wednesday, would nullify all of the steps the EPA has taken to date on the issue, including a finding that greenhouse gases endanger public health.

In addition, it seeks to strip the agency of its authority to use the law in any future attempts to crack down on the emissions from factories, utilities and other stationary sources.

Many scientists say carbon dioxide and other heat-trapping pollution contribute to global warming, and the attempt to reduce them is a major priority for President Barack Obama as well as environmentalists. Critics argue the evidence is thin and new rules would drive up costs for businesses and consumers and cause job losses.

The officials who described the GOP plans did so on condition of anonymity, saying they were not authorized to pre-empt the release of a draft measure prepared by the House Energy and Commerce Committee, chaired by Rep. Fred Upton, R-Mich.

Numerous House Republicans already have introduced legislation that would hamstring the EPA from moving forward with regulations to reduce heat-trapping pollution.

The efforts mark yet another arena in which newly empowered House Republicans are moving quickly to challenge the administration.

Sworn into office less than a month ago, the House has already voted to repeal last year's health care law and is advancing toward a series of expected confrontations with Obama over Republican demands for deep spending cuts. Speaker John Boehner, R-Ohio, recently announced support for legislation to restrict abortions.

A vote on the greenhouse gases bill would occur first in the Energy and Commerce Committee, and is expected later this winter. The measure would then go to the House floor, where Republicans express confidence they have a strong enough majority to overcome objections by Democrats, many of whom are expected to oppose it on environmental grounds.

Republicans are attempting similar restrictions in the Senate, where the political situation is more complicated. Sen. John Barrasso of Wyoming has introduced a more sweeping measure than the one House Republicans are drafting. At the same time, Sen. Jay Rockefeller, D-W.Va., has proposed a two-year moratorium on EPA attempts to regulate greenhouse gases, a plan that already has attracted a handful of Democratic supporters.

The Supreme Court ruled in 2007 that the EPA has authority to regulate greenhouse gases under the Clean Air Act, but it wasn't until the Obama administration took office that the effort began.

Initially, the administration's principal focus was on passage of legislation to impose restrictions, but that attempt failed when the Senate balked at a bill Democrats pushed through the House in 2009.

Josh Rosner and Yves Smith on Radio Free Dylan

February 2, 2011

Latest Podcast:

All Podcasts

Previous Podcast: Rep. Brad Miller on Radio Free Dylan

Episode #25 of Radio Free Dylan with John Rosner, Managing Director, Graham Fisher & Co. and Yves Smith, founder of NakedCapitalism.com and author of Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism Exactly How They Steal From UsMore...

Josh Rosner and Yves Smith on Radio Free Dylan

Republicans not being honest on economy

Visit msnbc.com for breaking news, world news, and news about the economy

Turn 21, buy a gun?

Visit msnbc.com for breaking news, world news, and news about the economy

U.S. officials: 'This is a train out of control'

NBC, msnbc.com and news services

updated 11 minutes ago

WASHINGTON — U.S. officials expressed increasing pessimism Wednesday that Egyptian President Hosni Mubarak would be able serve out the remainder of his term.

Mubarak "obviously ... is not going to last until the election," a senior U.S. official told NBC News.
"This is a train out of control now," the official said, adding that "there is nothing we can do now, other than to wait for it and respond appropriately."
Sen. John McCain

, who met with President Barack Obama earlier Wednesday, was more blunt.
"The rapidly deteriorating situation in Egypt leads me to the conclusion that President Mubarak needs to step down and relinquish power," McCain said. "It is clear that the only institution in Egypt that can restore order is the army, but I fear that for it to do so on behalf of a government led by or involving President Mubarak would only escalate the violence and compromise the army's legitimacy.

"I urge President Mubarak to transfer power to a caretaker administration that includes members of Egypt's military, government, civil society, and pro-democracy opposition, which can lead the country to free, fair, and internationally credible elections

this year as part of a real transition to democracy," McCain added.
Mubarak, in a televised speech on Egyptian state TV, on Tuesday night announced he would not seek a sixth term when his current one expires in September. He earlier announced other moves, including the naming of a vice president, in a bid to pacify critics but rejected protesters' calls that he step down immediately.
The senior U.S. official, who spoke on the condition of anonymity, said: "The greatest contribution that President Mubarak can make to the cause of democracy in his country is to remove himself from power."

"The best-case scenario is that the protests settle down and the Mubarak transition is accelerated," the official said, and then the world can "begin to see some formation of what the interim government is going to look like before they even get to new leadership."
At his daily briefing Wednesday, State Department spokesperson P.J. Crowley

spoke about the pressing need for a transition, saying that "the violence today just underscores how urgent the situation is. The longer that this goes unresolved, the greater the danger of further violence."
Asked whether the U.S. would like to see the elections in Egypt accelerated, Crowley said, "We want to see free, fair and credible elections. The sooner that can happen, the better."

White House spokesman Robert Gibbs echoed Obama's public call one night earlier for an immediate and orderly transition to democracy in Egypt. Instead the images on TV were of a brutal clash between protesters and Mubarak supporters.
"If any of the violence is instigated by the government, it should stop immediately," Gibbs said, while declining to speculate whether the Egyptian government was in fact behind the violence.
Obama has spelled out what Egypt's transition to free elections should look like, but he has refused to publicly say whether Mubarak should be in charge all the while. Obama has spoken to Mubarak and telephoned world leaders to try to bolster stability in the region, but he cannot stop violence in the streets of Cairo.
An Egyptian official, speaking for Mubarak's government, complained that the U.S. is pressing for Mubarak's swift departure even as the White House publicly urges an orderly transition.
The official, speaking from a location outside Egypt, told The Associated Press that Mubarak's decision not to seek re-election in September was not a result of pressure from Obama, who has spoken with the Egyptian leader twice since the street uprising began more than a week ago.
The official said in a statement: "There is a clear contradiction between an orderly process of transition and the insistence that this process be rushed."
The official spoke on condition of anonymity, saying his government would not allow him to associate his name with the statement.
He said Mubarak, in addition to agreeing not to run again, had appointed a vice president, stated his readiness for dialogue with the opposition and promised changes in the constitution.
"All of those things can't be done if there is a vacuum at the top," the official said.
NBC News' Jim Miklaszewski and Courtney Kube, Reuters, and The Associated Press contributed to this report.

Steele meets puppet double on 'Daily Show'

Visit msnbc.com for breaking news, world news, and news about the economy

Debating the best way to fix health care

Visit msnbc.com for breaking news, world news, and news about the economy

The Problem of Structrual Unemployment: Really Incompetent Managers

Wednesday, 02 February 2011 05:27

The Washington Post had a major front page article highlighting the argument that the reason that the country has high unemployment is that workers don't have the skills needed for the jobs that are available. While it features comments from several employers, the only data that it presents to support this case is that the number of job openings reported by the Bureau of Labor Statistics is 900,000 higher than the low in the summer of 2009. The number of openings is still down by more than 1,000,000 from pre-recession levels. Furthermore, even if every last job opening were filled (an absurd situation, since there will always be some flux in the labor market), it would still leave almost 80 percent of the unemployed without jobs.

The anecdotal evidence from employers suggests that the problem is that people who run businesses don't understand basic economics. It presents comments from one employer who complains that he can't find workers for jobs that pay $15 an hour. This is not a very good wage. It would be difficult for someone to support themselves and their children on a job paying $15 an hour ($30,000 a year). If the company president understand economics, then he would raise wages enough so that the jobs were attractive to workers who have the necessary skills.

If the economy were actually suffering from a problem of structural unemployment, then we should be seeing substantial sectors of the economy, either by region or occupation, where wages are rising rapidly. We don't see this. There is no major industry or occupational grouping where there is evidence of large pay increases. We should also see big increases in average weekly hours, as firms try to work their existing workforce harder due to the unavailability of additional workers. We don't see this either.

In other words, the data provide essentially zero support for the claim that the economy's problem is that workers don't have the right skills for the available jobs. All the evidence supports the idea that the problem is simply we have not generated enough demand (i.e. the problem is with the people who design economic policy, not with the country's workers).

Interestingly, in spite of the lack of evidence, we continue to see stories about how unemployment is structural. Rather than relying on evidence, these pieces invariably include anecdotes from employers who apparently don't understand that if you can't get the workers you need, then you must offer a higher wage.

Protesters clash in Tehrir Square

Visit msnbc.com for breaking news, world news, and news about the economy

Explainer: Key players in Egyptian protests

YANNIS BEHRAKIS / Reuters

A senior army officer salutes a crowd of cheering protesters at Tahrir square in Cairo.
Protesters stormed Cairo streets in a bid to drive Hosni Mubarak from power, even as the longtime president set the stage for a successor by naming his intelligence chief as his first-ever vice president.
The following are key players in the unfolding crisis.
Sources: The Associated Press, Reuters

President
Khaled Desouki  /  AFP - Getty Images

Egyptian President Hosni Mubarak
Name: Hosni Mubarak
Age: 82
Role: The former air force commander has ruled Egypt for 30 years as leader of the National Democratic Party. Fierce protesters have pushed him into naming a vice president for the first time in three decades.
Background: Mubarak was thrust into office when Islamists gunned down his predecessor Anwar Sadat at a military parade in 1981. He has long promoted peace abroad and on the domestic front he has kept a tight lid on political opposition. He has resisted any significant political change even under pressure from the United States. The U.S. has poured billions of dollars of military and other aid into Egypt since it became the first Arab state to make peace with Israel, signing a treaty in 1979.
Controversy: Mubarak won the first multicandidate presidential election in 2005 although the outcome was never in doubt and his main rival came in a distant second. Rights groups and observers said the election was marred by irregularities.
Personal note: There have been questions about his health after surgery in Germany last March.
New VP
Arno Burgi  /  EPA

Omar Suleiman
Name: Omar Suleiman
Age: 74
Role: The intelligence chief and Mubarak confidant became Egypt's first vice president in three decades on Jan. 29. The move clearly set up a succession that would hand power to Suleiman and keep control of Egypt in the hands of military men.
Military man: He has been the director of the Egyptian General Intelligence Services since 1993, a part in which he has played a prominent public role in diplomacy, including in Egypt's relations with Israel and the United States. In 1992 he headed the General Operations Authority in the Armed Forces and then became the director of the military intelligence unit before taking over EGIS. Suleiman took part in the war in Yemen in 1962 and the 1967 and 1973 wars against Israel.
Intel chief: Suleiman was in charge of the country's most important political security files, and was the mastermind behind the fragmentation of Islamist groups who led the uprising against the state in the 1990s.
New PM
Mohamed Abd El Ghany  /  Reuters

Egypt's Civil Aviation Minister Ahmed Shafiq.
Name: Ahmed Shafiq
Age: 69
Role: President Mubarak appointed Shafiq as prime minister on Jan. 29.
Background: A close associate of Mubarak, Shafiq has been minister of civil aviation since 2002. As minister of civil aviation, Shafiq has won a reputation for efficiency and administrative competence. He has supervised a successful modernization program at the state airline, EgyptAir, and improvements to the country's airports.
Former fighter pilot: Shafiq served as commander of the Egyptian air force between 1996 and 2002, a post Mubarak held before he became vice president of Egypt under former President Anwar Sadat.

Rival
John Macdougall  /  AFP - Getty Images

Mohamed ElBaradei
Name: Mohamed ElBaradei
Age: 68
Role: The Nobel Peace Prize winner joined demonstrators trying to oust Mubarak. ElBaradei has suggested he might run for president if democratic and constitutional change were implemented.
Atomic watchdog: ElBaradei joined the International Atomic Energy Agency in 1984 and served as its director-general in 1997. He transformed the IAEA into a body bold enough to take a stand on political issues relating to peace and proliferation, despite critics' belief that it was not its place. In 2005, ElBaradei and the IAEA were awarded the Nobel Peace Prize. He retired in 2009.
Law and diplomacy: He studied law, graduating from the University of Cairo and the New York University School of Law. He began his career in the Egyptian diplomatic service in 1964, working twice in the permanent missions of Egypt to the United Nations in New York and Geneva. He was in charge of political, legal and arms control issues. He was a special assistant to the Egyptian foreign minister and was a member of the team that negotiated the peace settlement with Israel at Camp David in 1978. He joined the United Nations two years later.
On Iraq: ElBaradei was outspoken on the lack of evidence of weapons of mass destruction in Iraq before the U.S.-led invasion in 2003, which angered the Bush administration.
On guard
Lefteris Pitarakis  /  AP

Egyptian army soldiers in Tahrir square in Cairo.
Name: Egyptian Armed Forces
Role: The army remains the most powerful institution in Egypt's chaotic nation, and whatever it does next will determine the future of the Arab world's most populous country. The military appeared to be going to great lengths to calm the country without appearing opposed to demonstrations.
Background: Egypt's 500,000-man army has long enjoyed the respect of citizens who perceive it as the country's least corrupt and most efficient public institution, particularly compared to a police force notorious for heavy handedness and corruption. It is touted as having defeated Israel in the 1973 Mideast War, and revered for that role.
Stabilizer: The military, for its part, sees itself as the guarantor of national stability and above the political fray, loyal to both the government and what it sees as the interests of the general population. The military has given Egypt all of its four presidents since the monarchy was toppled in 1952.
Provider:  Although it has almost completely withdrawn from politics since 1952, the army has added to its strength by venturing into economic activity, playing a growing role in such key service industries as food production and construction. It stepped in 2008 during an acute shortage of bread, Egypt's main stable, which it provided from its own bakeries. It has since opened outlets for basic food items sold as vastly discounted prices.
The Brotherhood
Asmaa Waguih  /  Reuters

Egypt's Muslim Brotherhood leader Mohamed Badie
Name: Muslim Brotherhood
Role: The brotherhood is Egypt's largest and most organized political opposition movement. Banned in 1954 on charges of using violence, members returned to Egypt to show support in protests.
Background: The group said it has since denounced violence and expanded its international presence. It has participated in Egyptian elections as independents despite frequent crackdowns. It surprisingly won about 20 percent of the 454 seats in 2005 parliamentary elections and since then, authorities have jailed around 5,000 of its members. The group believes in Islamic rule.
New audience: The Muslim Brotherhood is the focus of a TV series, "Al-Gamaa," or "The Group," which centers on a 2009 court case in which members were accused of setting up a student militia.
Mubarak's son
Khaled El Fiqi  /  EPA

Gamal Mubarak
Name: Gamal Mubarak
Age: 47
Role: Served as secretary general of his father's National Democratic Party.
Background: As he leaped up party ranks over the years, the younger Mubarak has avoided confirming or categorically denying he has ever intended to seek the presidency. His credentials as the guide of Egypt's economy suffered a setback when food prices soared in 2008 and street protests over low wages, unemployment and a higher cost of living grew in frequency. Still, he has touted the fruits of his liberalization reforms: creation of jobs over the past five years, economic growth and rises in salaries for state employees. Gamal, unlike his father and Egypt's other presidents, does not have a military background.
'Future man'
Name: Sami Enan
Age: Early 60s
Role: Egypt's armed forces chief of staff could be an acceptable successor to Mubarak because he is perceived as incorruptible, opposition members say.
Background: Little is known internationally about Enan, other than he appears to have spent much of his career in air defense. A profile on Silobreaker, the news and information monitoring service, gives his date and place of birth as 1948, in Cairo, and says he was trained in both Russia and France as well at a military academy in Egypt. He held senior roles in air defense before being appointed to his current job in 2005, the website indicates.
Leadership: Kamel El-Helbawy, a prominent overseas cleric, told Reuters that Enan, who has good ties with Washington, was a liberal who could be seen as suitable by an opposition coalition taking shape on the streets of Egypt. "He can be the future man of Egypt," Helbawy said in a telephone interview. "I think he will be acceptable ... because he has enjoyed some good reputation. He is not involved in corruption. The people do not know him (as corrupt)." Helbawy said Enan was not an Islamist but "a good, liberal man."