Isakson: Obama policies fuel higher gas prices

The Truth-O-Meter Says:

"Since President Obama took office, gas prices have gone up 67 percent."

Johnny Isakson on Friday, March 11th, 2011 in a Twitter post

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Some Republicans have repeated an interesting claim about rising gas prices.


U.S. Sen. Johnny Isakson, R-Ga., joined them in a Twitter post.


"Just the Facts: Since President Obama took office, gas prices have gone up 67 percent," the senator wrote.


Isakson included a link to an article with a chart from the conservative-leaning Heritage Foundationthat found gas prices rose 7 percent during the first two years and two months of Republican George W. Bush’s presidency as compared with prices during a similar time span under Barack Obama, a Democrat who took office in January 2009.


We figured Isakson was trying to make a case that Obama is not doing enough to cap rising gas prices. Isakson’s spokeswoman, Lauren Culbertson, told us her boss was indeed making that argument. She said the Obama administration has "contributed to the increase in gas prices" by:

• Restricting domestic energy production.

• Pushing for expanded cap-and-trade regulations through the Environmental Protection Agency.

• Proposing increased energy taxes of up to $90 billion over the next 10 years in his budget.

Some experts dispute the argument that the president can do much about gas prices, saying they are a combination of many factors, such as demand from motorists and nations such as China, along with the rising cost per barrel for crude oil. The United States gets most of its crude oil from Canada, Mexico and OPEC nations such as Saudi Arabia, Nigeria and Venezuela.


"[The president] has limited control over gas prices," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, an organization aimed at helping motorists find the best gas prices.


First, let’s look at whether the Heritage Foundation got its numbers right.


Crude oil accounts for two-thirds of the price of a gallon of gasoline, according to the federal government. About 10 percent of the cost comes from refining it. About another 10 percent goes toward distribution and marketing. About one-eighth of the cost of gasoline is for taxes.


The foundation’s chart (exact numbers weren’t on the article) shows that average gas prices were slightly below $2 when Bush took office in January 2001. The chart shows prices rose slightly, but were still below $2 in February 2003. Their chart shows gas prices were just below $2 when Obama became president in January 2009 and were $3.10 in February 2011. The Heritage Foundation adjusted its figures for inflation.


The average price for a gallon of regular gasoline was $1.51 the week Bush took office, according to the federal government’s Energy Information Administration. Prices were $1.74 for regular during the last week of February 2003, the EIA reported. That’s a 15.2 percent increase.


By contrast, EIA figures show the average price for a gallon of regular the week Obama took office was $1.83 and has risen steadily since he moved into the White House. During the last week of February, it was $3.34. That is an 82.5 percent increase.


Isakson’s math, courtesy of the Heritage Foundation, is actually lower than the federal government’s totals.


Now, is the context Isakson used to present these numbers on target?


Isakson believes the president should allow more deepwater offshore oil drilling. Obama ordered a moratorium after the disastrous BP oil spill in 2010. The Obama administration approved its first permit since the oil spill, The Associated Press reported last month.


Obama has said domestic oil production rose to a seven-year high in 2010, but others contend that is a result of policies set in place under Bush.


The president has threatened to open the nation’s Strategic Petroleum Reserve to control prices. DeHaan compared that tactic to a classic children’s story.


"That typically cools the market off," DeHaan said. "But we’ve seen so many claims that the traders also discard it. It’s like the boy who cries wolf."


Gas price analysts such as DeHaan and H. Rao Unnava, a marketing professor at Ohio State University, say market speculation and concerns about political unrest in the Middle East have resulted in a rise in crude oil prices in recent months.


In general, they say, gas prices are largely a result of supply and demand.


Federal government data shows fuel consumption rose each year between 2001 and 2007. The average price for regular gasoline also rose in each of those years. The average price rose again in 2008, when the entire nation was feeling the recession, but consumption fell. Consumption has remained steady since while gas prices have risen since the end of 2008.


"I don’t think [rising gas prices] would have much to do with President Bush or President Obama," said Unnava, associate dean of undergraduate programs at Ohio State University’s Fisher College of Business.


Unnava said when gas prices shot past $3 a gallon in the summer of 2006, some conservatives blamed it on increasing demand, particularly in other countries such as China and India. Twenty years ago, China was not among the top five oil consumers. Today, China is second to the U.S.


So where does this leave us? There are two elements to Isakson’s claim: the actual statistics and his implication that Obama is to blame for rising gas prices.


Isakson’s precise statement about gas prices is accurate. They have increased. But the overall statement, intended as a political broadside, leaves out important details and takes things out of  context. We rate this claim Half True.

Report Criticizes High Pay at Fannie and Freddie

By GRETCHEN MORGENSON

Published: March 31, 2011

Brendan Hoffman/Bloomberg News

Michael Williams at Fannie Mae got $9.3 million.

By GRETCHEN MORGENSON

Published: March 31, 2011

 

Jeff Kowalsky/Bloomberg News

Charles Haldeman, Freddie Mac's chief, made $7.8 million in two year

Regulators have approved generous executive compensation atFannie Mae and Freddie Mac, the taxpayer-backed mortgage finance giants, with little scrutiny or analysis, according to a report published Thursday by the inspector general of the Federal Housing Finance Agency.

The companies, whose fates are to be decided by Congress this year, paid a combined $17 million to their chief executives in 2009 and 2010, the two full years when Fannie Mae and Freddie Mac were wards of the state, the report found. The top six executives at the companies received $35.4 million over the two years. Since Fannie Mae and Freddie Mac were taken over in September 2008, the companies’ mounting mortgage losses have required a $153 billion infusion from taxpayers. Total losses may reach $363 billion through 2013, according to government estimates.

Charles E. Haldeman Jr., a former head of Putnam Investments, the giant fund management concern, joined Freddie Mac as its chief executive in 2009. He made $7.8 million for 2009 and 2010. Fannie Mae’s chief is Michael J. Williams, who has worked at the company since 1991. He received $9.3 million for the two years. Company officials declined to comment.

With hundreds of billions in government support necessary to keep the companies running, questions are arising about the nature of the pay packages and how performance goals are determined. The pay was approved by the housing finance agency, which is charged with conserving the assets of Fannie and Freddie on behalf of taxpayers.

“F.H.F.A. has a responsibility to Congress and taxpayers to efficiently, consistently, and reliably ensure that the compensation paid to Fannie Mae’s and Freddie Mac’s senior executives is reasonable,” ’said Steve A. Linick, the newly appointed inspector general of the agency, in a statement.  “This is especially true when you realize that the U.S. Treasury has invested close to $154 billion to stabilize Fannie Mae and Freddie Mac,” and they “are spending tens of millions of dollars for executive compensation.”

The report cited a “lack of standardized evaluation criteria, documentation of management procedures and internal controls” at the oversight agency, missing steps that may have led to overpayments.

For example, the inspector general said that taxpayer support of the companies may have made performance benchmarks easier to meet for executives. In 2009, Fannie Mae issued 47 percent of new mortgage-backed securities, far exceeding its goal of 37.5 percent. But, as the report noted, this hurdle was almost certainly cleared because the Federal Reserve purchased almost all the mortgage securities issued by Fannie and Freddie in 2009.

In response to the report, the housing agency said that it would “institute a more formal and systematic approach” to its review of the performance benchmarks and the assessment of whether they were reached by the companies’ executives. A spokeswoman for the agency said its officials declined to comment.

Lavish executive pay that does not track a company’s performance has led to anger among shareholders in recent years. When the government stepped in to support some of the nation’s biggest financial institutions in 2008, compensation became an issue of concern to taxpayers. Executive pay at institutions receiving support under the Troubled Asset Relief Program, for example, was subject to approval by an overseer, the special master for TARP. Fannie and Freddie were not required to submit to this process because their assistance did not come from TARP.

As the primary regulator and conservator of both companies, the housing agency has broad powers to direct the companies’ activities; it has replaced board members and senior officers, for example. And it can bar the companies from making golden parachute payments to executives. It consulted with the TARP special master on executive pay at Fannie and Freddie after they were rescued by the government.

Nevertheless, the agency delegates pay decisions to the companies’ boards, accepting their recommendations “unless there is an observed reason to do otherwise,” according to the inspector general’s report. The F.H.F.A. receives advice from its own compensation consultant as well as the work of those hired by Fannie and Freddie.

The inspector general’s report noted that the executives at Fannie and Freddie received far more than their counterparts at other federal housing agencies. The top executive at Ginnie Mae, for example, received an annual salary of less than $200,000. The inspector general suggested that the agency review the discrepancy and account for it to taxpayers.

Agency officials say the salaries and deferred compensation awarded to executives at Fannie and Freddie are necessary if they are to attract and keep talent required to run those operations effectively. They say that current pay at Fannie and Freddie is roughly 40 percent less than it was before the bailout and maintain that the compensation plans are based on the companies’ ability to meet financial and performance targets, like providing liquidity and affordability to the mortgage market.

Edward J. DeMarco, acting director of the Federal Housing Finance Agency, testified before Congress on Thursday about proposals to overhaul Fannie and Freddie. “I am concerned that legislation to overhaul the compensation levels and programs in place today with the application of a federal pay system to nonfederal employees carries great risk for the conservatorships and hence the taxpayer,” he said.

Last year, Mr. DeMarco testified that the executive compensation plans at Fannie and Freddie were designed to achieve the goals of the conservatorship and “align executive decision-making with the long-term financial prospects of the enterprises, and minimize costs to the taxpayer.”

Because shares of both Fannie and Freddie have little value, the companies’ executive compensation consists solely of cash paid out in base salary, deferred salary and long-term incentive pay.

But Brian Foley, a compensation consultant in White Plains questioned the characterization of the companies’ incentive pay as long term, given that it is paid entirely within two years. “One hundred percent of the compensation is paid for two-year performance and a fair portion of that is without regard to performance,” he said. “I understand the stock is worthless, but that doesn’t mean you can’t have cash on the table for a long period. If anybody needs to have good long-term performance, isn’t it Fannie Mae and Freddie Mac?”

Uncovered: New $2 billion bailout in Obamacare

BELTWAY CONFIDENTIAL

POLITICS FROM THE NATION'S CAPITAL

By: Byron York 03/31/11 11:02 PM 
Chief Political Correspondent Follow Him @ByronYork

<>

Investigators for the House Energy and Commerce Committee have discovered that a little-known provision in the national health care law has allowed the federal government to pay nearly $2 billion to unions, state public employee systems, and big corporations to subsidize health coverage costs for early retirees.  At the current rate of payment, the $5 billion appropriated for the program could be exhausted well before it is set to expire.

The discovery came on the eve of an oversight hearing focused on the workings of an obscure agency known as CCIO -- the Center for Consumer Information and Insurance Oversight.  CCIO, which is part of the Department of Health and Human Services, oversees the implementation of Section 1102 of the Affordable Care Act, which created something called the Early Retiree Reinsurance Program.  The legislation called for the program to spend a total of $5 billion, beginning in June 2010 -- shortly after Obamacare was passed -- and ending on January 1, 2014, as the system of national health care exchanges was scheduled to go into effect.

The idea was to subsidize unions, states, and companies that had made commitments to provide health insurance for workers who retired early --  between the ages of 55 and 64, before they were eligible for Medicare. According to a new report prepared by the Department of Health and Human Services, "People in the early retiree age group…often face difficulties obtaining insurance in the individual market because of age or chronic conditions that make coverage unaffordable or inaccessible."  As a result, fewer and fewer organizations have been offering coverage to early retirees; the Early Retiree Reinsurance Program was designed to subsidize such coverage until the creation of Obamacare's health-care exchanges.

The program began making payouts on June 1, 2010.  Between that date and the end of 2010, it paid out about $535 million dollars.  But according to the new report, the rate of spending has since increased dramatically, to about $1.3 billion just for the first two and a half months of this year. At that rate, it could burn through the entire $5 billion appropriation as early as 2012.

Where is the money going?  According to the new report, the biggest single recipient of an early-retiree bailout is the United Auto Workers, which has so far received $206,798,086.  Other big recipients include AT&T, which received $140,022,949, and Verizon, which received $91,702,538.  General Electric, in the news recently for not paying any U.S. taxes last year, received $36,607,818.  General Motors, recipient of a massive government bailout, received $19,002,669.

The program also paid large sums of money to state governments.  The Public Employees Retirement System of Ohio received $70,557,764; the Teacher Retirement System of Texas received $68,074,118; the California Public Employees Retirement System, or CalPERS, received $57,834,267; the Georgia Department of Community Health received $57,936,127; and the state of New York received $47,869,044.  Other states received lesser but still substantial sums.

But payments to individual states were dwarfed by the payout to the auto workers union, which received more than the states of New York, California, and Texas combined.  Other unions also received government funds, including the United Food and Commercial Workers, the United Mine Workers, and the Teamsters.

Republican investigators count the early-retiree program among those that would never have become law had Democrats allowed more scrutiny of Obamacare at the time it was pushed through the House and Senate.  Since then, Republicans have kept an eye on the program but were not able to pry any information out of the administration until after the GOP won control of the House last November.  Now, finally, they are learning what's going on.

No Deal: House GOP Continues to Push for Largest Spending Cuts Possible

Posted Fri, 04/01/2011 - 09:06

in Jobs & the Economy

by Cory Fritz

---

At a press conference yesterday, Speaker Boehner squashed any notion that an “agreement” has been struck to fund the government through September, and vowed that Republicans will continue to fight for the largest spending cuts possible to help end economic uncertainty so businesses can start hiring again.  Video is included below courtesy of ABC News:



Boehner says:

“There is no agreement on numbers.  Nothing will be agreed to until everything is agreed to.  House Republicans only control one half of one third of government, but we’re going to continue to fight for the largest spending cuts we can get.”
It’s been 41 days since House Republicans passed a bill to cut spending and keep the government running through September.  It’s time for Washington Democrats to get to work.

Republicans target left's pet causes

House Republicans unveiled a report on AARP’s alleged abuse of its tax status. | John Shinkle/POLITICO

“The committee will of course conduct rigorous oversight, but it does not ‘target’ any group and does not target anyone based on their political views. AARP came under the microscope because they inexplicably (at the time) endorsed over one-half trillion dollars in cuts to seniors’ Medicare benefits,” Ways and Means deputy staff director Sage Eastman said in an email. “We now have a better idea of why they may have done so; as the report suggests, they stand to reap over $1 billion in profits from cuts to the very seniors they claim to represent.”
House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) has devoted much attention to internal abuses by federal agencies. But spokesman Frederick Hill said the panel will also be eyeing another favorite conservative target: public and private unions.

Hill noted internal reviews of allegedly excessive compensation packages for federal employees and favoritism to the pensions of union members of the bankrupt Delphi Corp.

When the House approved Boehner’s school-voucher bill Wednesday, debate fell on the broader context of the influence of teachers unions. Despite earlier GOP expectations for bipartisan support, Illinois Rep. Daniel Lipinski was the only Democrat who voted for the bill, which his party viewed as “anti-union.”
Other examples of longtime liberal allies that have recently come under scrutiny by the House GOP have been pursued for years by individual members. When Indiana Rep. Mike Pence in February won nearly party-line approval of his amendment to end last year’s $317 million in federal support for Planned Parenthood, he said it was the fourth time he had attempted such a cutoff. The controversy over his amendment looms as one of the “policy” issues that could thwart a final deal between the House and Senate to meet the April 8 deadline to extend federal spending.
Likewise, when the House rescinded funds for NPR in the spending bill, internal meltdowns by top officers at the public radio network facilitated the opposition of longtime conservative foes.
Meanwhile, two Republicans — Sen. David Vitter of Louisiana and Rep. Rob Bishop of Utah — have proposed a bill to curtail environmental groups’ access to federal funds to reimburse legal fees for nonprofits that successfully sue the federal government. Such a move would cut off groups like Defenders of Wildlife and Friends of the Earth.
Waxman said Republican attacks on these programs have been politically motivated as part of the GOP’s efforts to silence opponents.
“They want to stay in power. They don’t want criticism, so they make ad hominem attacks. As with all bullies, they only want silence,” he said. “They are doing it for their base.” In the final deal cutting on the budget bill, he worried that “Republicans are trying to blackmail the Senate and the president” on the so-called policy riders.
Republicans dismiss such attacks or suggestions that they have an overarching game plan to punish groups on the left.
“The Democratic majority in the House again and again protected liberal special interests,” Steel said. “We are addressing the oversights of their oversight.”

The GOP's True Intentions
April 1, 2011, Matthew Cochrane

Uh oh. They’re on to us. The mainstream media has finally figured out what the newly energized GOP is all about. Politico has the scoop: If Republicans break through the spending gridlock that has seized Capitol Hill, the rest of their agenda is starting to come into focus: defunding, investigating and otherwise beating up on liberal causes.At every turn, the GOP is attacking sacred cows of the left. The party has already voted to kill all federal funding for Planned Parenthood, a longtime conservative nemesis. NPR may lose its federal support. Republicans have targeted the Environmental Protection Agency for investigation and are moving to kill a federal program that benefits environmental activist groups like Defenders of Wildlife. Even AARP — once untouchable because of its political and demographic power — is being targeted.This week, House Ways and Means Committee Republicans unveiled a 34-page report on AARP’s alleged abuse of its tax status in health care reform. The GOP has also gone after teachers unions, which were a target in the House-passed bill to encourage school vouchers in the District of Columbia. Republican attacks on some of these well-known names in the liberal brand are only beginning, aides and lawmakers say. And nevermind that few of these initiatives stand a chance at becoming law, conservatives are getting in their whacks and sending a message.“Each of these initiatives is designed to save taxpayers’ money or create jobs or help needy children. The goal is better public policy for the American people,” said Michael Steel, spokesman for House Speaker John Boehner. “When conservative policy goals are opposed by liberal special interests, our goal is to break their rice bowls.” Those dastardly Republicans! When they’re not busy cutting billions of dollars from the federal budget, they’re busy fighting public broadcasting, Planned Parenthood, and out-of-control unions! What will they think of next!

Republicans target left's pet causes By: Richard E. Cohen April 1, 2011 04:39 AM EDT If Republicans break through the spending gridlock that has seized Capitol Hill, the rest of their agenda is starting to come into focus: defunding, investigating and otherwise beating up on liberal causes. At every turn, the GOP is attacking sacred cows of the left. The party has already voted to kill all federal funding for Planned Parenthood, a longtime conservative nemesis. NPR may lose its federal support. Republicans have targeted the Environmental Protection Agency for investigation and are moving to kill a federal program that benefits environmental activist groups like Defenders of Wildlife. Even AARP — once untouchable because of its political and demographic power — is being targeted. This week, House Ways and Means Committee Republicans unveiled a 34-page report on AARP’s alleged abuse of its tax status in health care reform. The GOP has also gone after teachers unions, which were a target in the House-passed bill to encourage school vouchers in the District of Columbia. Republican attacks on some of these well-known names in the liberal brand are only beginning, aides and lawmakers say. And nevermind that few of these initiatives stand a chance at becoming law, conservatives are getting in their whacks and sending a message. “Each of these initiatives is designed to save taxpayers’ money or create jobs or help needy children. The goal is better public policy for the American people,” said Michael Steel, spokesman for House Speaker John Boehner. “When conservative policy goals are opposed by liberal special interests, our goal is to break their rice bowls.” But House Democrats, who have been mostly powerless in stopping the GOP attacks, contend that Republican attacks on liberal targets undermine their stated goal of job creation as a top priority. “There is a tendency for the Republican majority to demonize their opposition, as they did with Red-baiting in the 1950s or questioning people’s patriotism,” said California Rep. Henry Waxman, who himself has been a vigorous lawmaker and investigator in the past. “These groups are being punished for their views. I don’t see the constructive side of the Republican criticism. It’s been punitive.” And even though Republican leaders insist they aren’t waging a coordinated assault on issues liberals hold dear, GOP attacks continue to crop up individually among various members and House committees. Republican leaders and committee communicators also discuss these types of issues in weekly reviews of their agendas. This week, when the Ways and Means Committee released its report, “Behind the Veil: The AARP America Doesn’t Know,” Oversight Subcommittee Chairman Charles Boustany (R-La.) suggested that the senior citizen lobby’s commercial activities interfere with its tax-exempt status, and he called for an investigation by the Internal Revenue Service to determine whether the group’s “privileged status ought to be revoked.” Republicans reject criticisms that their AARP review or other investigations have a partisan motive. The 18-month AARP review was spawned by the Democrats’ handling of the health care bill. “The committee will of course conduct rigorous oversight, but it does not ‘target’ any group and does not target anyone based on their political views. AARP came under the microscope because they inexplicably (at the time) endorsed over one-half trillion dollars in cuts to seniors’ Medicare benefits,” Ways and Means deputy staff director Sage Eastman said in an email. “We now have a better idea of why they may have done so; as the report suggests, they stand to reap over $1 billion in profits from cuts to the very seniors they claim to represent.” House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) has devoted much attention to internal abuses by federal agencies. But spokesman Frederick Hill said the panel will also be eyeing another favorite conservative target: public and private unions. Hill noted internal reviews of allegedly excessive compensation packages for federal employees and favoritism to the pensions of union members of the bankrupt Delphi Corp. When the House approved Boehner’s school-voucher bill Wednesday, debate fell on the broader context of the influence of teachers unions. Despite earlier GOP expectations for bipartisan support, Illinois Rep. Daniel Lipinski was the only Democrat who voted for the bill, which his party viewed as “anti-union.” Other examples of longtime liberal allies that have recently come under scrutiny by the House GOP have been pursued for years by individual members. When Indiana Rep. Mike Pence in February won nearly party-line approval of his amendment to end last year’s $317 million in federal support for Planned Parenthood, he said it was the fourth time he had attempted such a cutoff. The controversy over his amendment looms as one of the “policy” issues that could thwart a final deal between the House and Senate to meet the April 8 deadline to extend federal spending. Likewise, when the House rescinded funds for NPR in the spending bill, internal meltdowns by top officers at the public radio network facilitated the opposition of longtime conservative foes. Meanwhile, two Republicans — Sen. David Vitter of Louisiana and Rep. Rob Bishop of Utah — have proposed a bill to curtail environmental groups’ access to federal funds to reimburse legal fees for nonprofits that successfully sue the federal government. Such a move would cut off groups like Defenders of Wildlife and Friends of the Earth. Waxman said Republican attacks on these programs have been politically motivated as part of the GOP’s efforts to silence opponents. “They want to stay in power. They don’t want criticism, so they make ad hominem attacks. As with all bullies, they only want silence,” he said. “They are doing it for their base.” In the final deal cutting on the budget bill, he worried that “Republicans are trying to blackmail the Senate and the president” on the so-called policy riders. Republicans dismiss such attacks or suggestions that they have an overarching game plan to punish groups on the left. “The Democratic majority in the House again and again protected liberal special interests,” Steel said. “We are addressing the oversights of their oversight.”

Ohio Gov. John Kasich Apologizes to Police Officer He Called 'Idiot'

Christopher Weber

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Ohio Gov. John Kasich apologized Thursday to the police officer he called an "idiot" during a speech last month.

The governor met briefly at his office with Officer Rob Barrett, extending an apology to him and to law enforcement as a whole for his comments, according to WCMH-TV, the NBC affiliate in Columbus.

Kasich "apologized for using the term and said it was a wrong choice of words and a bad example," said Jim Gilbert, head of Columbus police union, who was also in the meeting. "The governor looked at me and apologized and said that he holds law enforcement in high regard."

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The meeting, closed to media and the public, lasted only a few minutes.

In a YouTube video that has made the Internet rounds, Kasich is seen last month repeatedly describing a police officer who ticketed him for a traffic violation as "an idiot." Kasich was cited for passing too close to an emergency vehicle.

Officer Barrett told the Republican governor he could face an arrest warrant if he didn't show up in court.

"He's an idiot," Kasich said in the speech to state workers. "You just can't act that way."

The governor initially tried to apologize to Barrett over the phone, but the officer requested that Kasich meet with him in person, Gilbert told the Columbus Dispatch.

Also Thursday, Columbus Police released an official statement saying cruiser video shows that Barrett acted professionally during the traffic stop.

"Officer Barrett's actions were consistent with the division's core values of professionalism, respect, integrity, discipline, and enthusiasm, and reflect positively on himself and the Division of Police," the statement said.

Barrett has been ordered not to speak publicly about the incident.

Kasich paid an $85 fine for his infraction.

Watch portions of the Kasich speech last month: