The Center for Investigative Reporting and National Public Radio have launched a joint initiative tracking the hidden cash in this election season. The Secret Money Project catalogues and examines the sometimes-shadowy independent groups seeking to influence both the presidential and Senate races. In 2004, the Swift Boat Veterans for Truth ads kneecapped Democratic presidential candidate John Kerry’s campaign. This year’s crop of independent ads has the potential to be equally powerful. Outside advocacy groups can raise unlimited sums of money and operate under more secrecy than the candidates or party committees. Check out The Secret Money Project on NPR.org: [ http://www.npr.org/templates/story/story.php?storyId=92513698 ]
+ INTERACTIVE MAP: Who's paying to influence voters in your state? Watch the ads and learn who's behind them in a state-by-state interactive map: [ http://tinyurl.com/4wq5pt ]
+ DIG DEEPER: See profiles of key advocacy groups, showing their background, context and funding sources. A leadership directory details the interconnected web of political operatives behind the advocacy groups: [ http://www.npr.org/templates/story/story.php?storyId=92458631 ]
No Blank Check for Wall Street is a multi-partisan group of people demanding accountability for Wall Street for its role in the 2008 financial crisis. We started by organizing on Facebook and letting Speaker Pelosi and other legislators know that we strongly opposed the Paulson bailout plan.
Our next step is to come up with a proposal of our own -- and then use our growing network to send the word to DC. Please help join us in developing our recommendations and crafting a letter to congress! We'll publicize our work in progress throughout the blogosphere, and deliver the final version to the House and Senate Republican and Democratic leadership.
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Today, the Sunlight Foundation is calling on Congress to exercise restraint and increase legislative transparency by posting the next version of the financial bailout legislation online for at least 72 hours before bringing the bill to a vote.
We believe all legislation should posted online for at 72 hours before a vote to give lawmakers and citizens sufficient time to review and debate it, and this bill is no exception.
That's why we just created a petition -- http://readthebillfirst.org -- that urges Congress to wait at least until 72 hours after the publication of the next version of this bill, before moving to a vote.
This isn't a bill to rename a few courthouses; this bill is Congress's biggest intervention in the economy in decades. This important legislation deserved more time for public scrutiny.
Please join us in our call for legislative transparency by signing the petition at http://readthebillfirst.org
You can review and comment on the Emergency Economic Stabilization Act on PublicMarkup.org -- http://tinyurl.com/4q3zvn -- too.
Our Party Time site -- http://PoliticalPartyTime.org -- is also doing its part to shine a light on how the financial sector is wining and dining the very lawmakers in Congress who are making the decisions about the most massive proposed bailout of industry in history. Based on the anonymously submitted invitations we've received, we now count 357 parties this year planned for or featuring members of the two crucial committees that are the first stops for considering the administration's $700 billion bailout request for the financial sector. See the full list of parties here: http://tinyurl.com/3htbev.
And be sure to check out our blog post here -- http://tinyurl.com/3lq3d7 -- about the finance industry's investment over the past 18 years attempting to influence Congress. The post includes a very cool interactive graph showing their spending, and a YouTube tutorial video explaining the graph.
Thanks for all that you do,
Gabriela Schneider & the Sunlight team
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Missing in the debate over whether taxpayers should bailout Wall Street is any plan or attempt to explain how to pay for the $700 billion bailout.
It is not news to say that Congress and this Administration like solving problems by spending money. And in the case of the Wall Street mess, it is looking inevitable that taxpayers will be forced to fork over an unprecedented level of cash. But what is frustrating to us is that piling up more debt will cost our nation even more than the current price tag if we don't start to make some hard decisions on spending priorities now. We may never see the full extent of our nation's budgetary problems, but our kids certainly will.
Some are saying that if Uncle Sam is able to sell at a fair price the bad debt that we are planning to buy, the bailout will likely cost us well below $700 billion. That would be great. But it is just as likely that the costs of the bailout plan could balloon to well over a trillion dollars.
The Administration and Congress have already blown a $400 billion deficit hole in the current budget, so the budgetary deck is stacked against us. Hoping that the bailout costs a "modest" $250 billion or so should not delay our cutting wasteful and unnecessary spending from the federal budget. We need to start today figuring out how to save some money, and all proposals should be on the table. Here are a few ideas to get us started:
Cut Defense Spending – Spending items in the Defense budget should not escape scrutiny simply because some lawmaker said it is important to the national defense. Defense spending has become the third rail in spending cuts, and very few lawmakers even consider touching it. But just the very fact that non-emergency defense spending now makes up half of all discretionary spending in the budget makes it a critical place to start. Our nomination: start with the F-22 and other weapons systems not necessary to fight the Global War on Terror.
Social Security, Medicare and other entitlements – In order to shore up our credit rating internationally, we need to consider ways to reduce the long-term budgetary impact of these important programs sooner rather than later. Right now, Medicare spends more than it brings in. That day looms for Social Security. Enacting reforms to ensure these programs do not depend on deficit spending would send an important signal to international financial markets that the U.S. is getting serious about our long-term budgetary liabilities.
Stop Wasteful Contracts - The government wastes tens of billions of dollars on failed contracts where the government gets nothing. A recent report estimated the cost of failed contracts with the Department of Homeland Security at $15 billion. We have seen similar results in Iraq. Let's end these contracts earlier and stop wasting our hard-earned tax dollars.
Lead by Example - There are also small but symbolic acts lawmakers can take. For instance, at a time when lawmakers are asking taxpayers to fork over $700 billion, all 535 lawmakers should say no to their annual pay raise. They should also say no to the $6.6 billion in earmarks just passed for this year.
Nobody expects Congress to find $700 billion in spending cuts to pay for this massive bailout package. But what has to change is that taxpayers need to pressure Washington to adopt the same fiscal discipline that they are now demanding of Wall Street. Uncle Sam just cannot keep spending money without figuring out a way to pay for it.
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US House Financial Services Committee. Image via WikipediaGovernment reform orgs. deliver news on major events within their areas of expertise. From: Sunlight Foundation
On Sunday, September 28, congressional leadership issued the Emergency Economic Stabilization Act of 2008, posted online (in PDF) by Speaker Pelosi and by the House Financial Services Committee. This bill is the latest version of Congress' gigantic taxpayer bailout of the financial sector, with a potential cost of $700 billion or more than $2000 per American citizen. We believe, as Justice Brandeis said, that "Sunlight is the best of disinfectants," and that all legislation ought to be open to public comment and consideration in real-time, not just after the fact. So, as a public service, we're posting the 110-page text for public comment.
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A recent alert by the Social Security Administration announces that the agency plans to shut down its databases for maintenance from October 11 through October 13. While this might not sound like an election issue, it turns out that this could significantly impede registration of first-time voters as well as the re-registration of eligible citizens.
Here's why. A 2002 federal law, the Help America Vote Act, requires all states to "coordinate" their voter registration databases with the Social Security database (and state motor vehicle databases) for the purpose of processing new voter registration forms. For the millions of voters who do not have current driver's licenses and register using the last four digits of their Social Security numbers, state election officials are required to try to match their voter registration information against Social Security records. But if the Social Security database is down—as it will be for four days—they won't be able to do that. Across the country, the processing of these voter registration forms will grind to a halt for four days.
Normally, a delay of three days would not have a major impact. But this delay is scheduled to take place three weeks before the November 4 election—a time when election officials in every state will be scampering to try to process the millions of new voter registrations they receive. With only 25 days to process millions of new voter registrations, while doing dozens of other things to prepare for what is shaping up to be the highest turnout election in decades, a loss of three days can spell disaster.
Even without this delay, there are already significant concerns that our overworked and under-resourced election officials will not be able to process all the new voter registrations this year in time for the election. Voter registration numbers are skyrocketing. Election officials are already feeling the strain, and it will only get worse. In every election, there is a huge spike in voter registrations in the period right before the voter registration deadline. Florida, for example, typically receives between 13 and 20% of its new voter registrations in the week before the deadline. In short, this shutdown is planned for the worst possible time, a time when every minute counts.
If the shutdown goes as planned, it will seriously impair the ability of states to process new voter registrations before the November 4 election. Who would this impact? New voters, as well as people who re-register because they have moved, who do not have state-issued driver's licenses or non-driver's IDs. Those citizens are disproportionately older, African-American, and low-income, studies show.
Fortunately, the solution to this potential disaster is easy: postpone the shutdown until after the election. And next time, look at the calendar before deciding when to turn off a database relied on by millions.
(Editor's note: On Tuesday, September 23rd, Sen. Diane Feinstein (D-CA) and chairwoman of the Senate committee overseeing elections, wrote to the Social Security Administration, asking the agency to defer its database maintenance until after the November election.)
Wendy Weiser directs the Brennan Center’s work on voting rights and elections. During the run-up to the 2004 and 2006 elections, she masterminded litigation and advocacy efforts that kept hundreds of thousands of voters from being disenfranchised.
Washington, DC at night. Image via WikipediaGovernment reform orgs. deliver news on major events within their areas of expertise. From: The Concord Coalition
WASHINGTON -- As Congress and the Bush Administration negotiate a $700 billion plan to shore up credit markets by purchasing “troubled assets,” The Concord Coalition urged them to heed the lesson of Wall Street’s failure: corrective actions are more effective and much less costly if taken in advance of a crisis rather than in the face of one.
Concord said that in dealing with the immediate crisis, policymakers should limit taxpayer exposure, maximize transparency of any new obligations and develop a debt repayment plan to ensure that the short-term emergency measures do not result in further deterioration of the long-term budget outlook. More fundamentally, however, policymakers must acknowledge and begin to address the fact that the federal budget is itself suffering from the same over-reliance on debt and lack of transparency that doomed the institutions they are now rushing to rescue. If they fail to do so, the eventual and inevitable consequences for the economy are no less stark.
“It’s fine to hope for the best, but we should budget for the worst. While the intent of this plan is to recoup much, if not all, of the initial cost to taxpayers there are no guarantees. The value of the assets to be purchased is highly uncertain. What we know for certain is that the government will incur a huge upfront cost, immediately adding to the debt and immediately incurring compounding interest payments. All of this will be layered on top of a deficit expected to exceed $500 billion next year, and an overall fiscal policy that is unsustainable. Meanwhile, we are borrowing increasing amounts from abroad to make up for our inability to make crucial budgetary decisions. The answer to every problem in Washington seems to be more debt. That simply cannot go on. Given the uncertainty of the return on this $700 billion of new borrowing, and the daunting challenges already confronting the fiscal outlook, Congress should adjust budget policy either though phased-in spending cuts or tax increases to ensure against any permanent fiscal deterioration,” said Concord Coalition executive director Robert L. Bixby.
The Concord Coalition further stressed that once the immediate threat has passed, and the new administration and Congress start their work next year, their agenda must confront the nation’s long-term fiscal challenges.
“Washington can normally act in the face of a crisis. We don’t need to relearn that lesson. A more fundamental issue is whether we can learn from the current crisis and finally break the pattern of routinely ignoring long festering problems. It is no secret that our nation is entering an unprecedented and permanent demographic transformation to an older society and that we are doing so with steadily rising health care costs and steadily falling national savings. This is a dangerous combination for the future health of the economy. And yet, nothing in the budget process requires Congress to review the current-law outlook beyond the next five years, much less take corrective action. If we learn from Wall Street’s mistakes, we can act more effectively, with less pain, and more time to prepare the public for difficult but necessary choices. If we don’t change course, the federal government itself will be in need of a bailout,” Bixby said.
###
The Concord Coalition is a nonpartisan, grassroots organization dedicated to balanced federal budgets and generationally responsible fiscal policy. Former U.S. Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord's co-chairs and former Secretary of Commerce Peter Peterson serves as president. CONTACT: Jonathan DeWald (703) 894-6222 communications@concordcoalition.org
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Government reform orgs. deliver news on major events within their areas of expertise. From: National Taxpayers Union For Immediate Release Sep 25, 2008 For Further Information, Contact: Peter J. Sepp, Natasha Altamirano, (703) 683-5700
As Election Day Nears, Presidential Candidates Continue Out-Promising, Out-Spending Each Other
(Alexandria, Va.) -- As John McCain and Barack Obama jockeyed for position in the race to appear "leader-like" over the economy and in upcoming debates, the latest update of the National Taxpayers Union Foundation's (NTUF) candidate cost analysis project shows that despite their different styles, the major party Presidential hopefuls have one thing in common: both their agendas would add billions more to the taxpayer's tab every year.
NTUF's fourth and final round of assigning price tags to the candidates' platforms since January 29 found that Sen. McCain (R-AZ) would increase yearly federal spending by $92.4 billion, compared to Sen. Obama's (D-IL) $293.0 billion. NTUF also released a first-time analysis of Libertarian Party candidate Bob Barr, who would instead cut annual federal spending by $200.9 billion. The studies include proposals through September 19.
"Both the McCain and Obama campaigns have tried to keep pace with the political issues of the day -- largely by responding with proposals for new programs and regulations that could reach deeper and deeper into taxpayers' pockets," NTUF Senior Policy Analyst Demian Brady said. "On the other side of the spectrum, Bob Barr's Libertarian philosophy is strongly reflected in a platform that is built upon cutting programs and slashing spending."
Though it appears that Obama's platform cost has dropped since NTUF's last update on June 3 ($343.6 billion), excluding a previously unavailable savings estimate for reducing troop levels in Iraq ($90.5 billion annually), Obama would actually boost annual federal outlays by $383.4 billion -- a 12 percent jump from June, Brady noted. Obama's annual spending platform has increased by about 34 percent since January 29 (when it was $287.0 billion). Likewise, McCain's spending total has jumped by 37 percent since June 3 ($68.5 billion) and by more than 13 times the amount he was backing in January ($6.9 billion).
"If eight months on the campaign trail can mean an increase of tens of billions of dollars in yearly federal outlays, imagine what four -- or potentially, eight -- years in office could bring," Brady said. "Both candidates have talked about reducing wasteful spending, but neither has been specific enough."
Obama's latest study includes 65 new proposals and updated costs for existing proposals, most notably the Iraq-related savings mentioned above and $25 billion for a second economic "stimulus" package. McCain's analysis reflects 46 new or updated proposals, including a new cost estimate for a health care program known as the Guaranteed Access Plan, which would cost $8.5 billion annually, and a new proposal to freeze non-defense, non-veterans discretionary spending for one year, which would save $15 billion. Barr's biggest cuts come from defense ($92.4 billion in annual savings from withdrawing troops from Iraq) and education ($68.0 billion in annual savings from eliminating the Department of Education).
NTUF's latest analyses include cost calculations based on hard data for hundreds of proposals that would affect the federal budget -- dozens of which have unknown fiscal effects. NTUF assumed the most conservative estimates based on a variety of sources, including the candidates' own projections; summaries from the Congressional Budget Office, Congressional Research Service, and the White House Office of Management and Budget; and results from equivalent legislation from NTUF's BillTally cost-accounting system.
NTUF is the nonpartisan research arm of the National Taxpayers Union, a citizen group founded in 1969. Note: For more on the candidate cost analysis project, visit www.ntu.org.
Image via WikipediaGovernment reform orgs. deliver news on major events within their areas of expertise. From: National Taxpayers Union
Urgent: Tell Your Elected Officials to Vote "NO" on the $700 Billion Financial Industry Bailout
Today, Sunday, September 28, Congress is scheduled to vote on the $700 billion bailout package. Below is a Vote Alert sent by NTU to each Capitol Hill office.
As a concerned taxpayer, you can help by picking up your phone and urging your elected officials to oppose this plan.
Contact information can be found by clicking here.
****************************************** National Taxpayers Union Vote Alert
NTU urges all Members of Congress to vote "NO" on the $700 billion financial industry bailout plan.
This unconscionable scheme forces the vast majority of taxpayers who were honest and prudent to bail out firms on Wall Street that made bad business decisions. Furthermore, it does nothing to address the root causes of today's market difficulties. The long-term effects of this fiasco, including inflation, a weaker dollar, and an even more precarious federal balance sheet, are almost certain to outweigh the shallow short-term stabilization of moneyed interests who have been twisting arms on both ends of Pennsylvania Avenue.
Congress helped to create this debacle with the Community Reinvestment Act, poor tax policies, hastily designed mark-to-market regulations, and spectacular negligence with regard to the systemic risks posed by Fannie Mae and Freddie Mac. Rather than addressing those core problems, this disgraceful plan instead snatches $700 billion from the pockets of hard-working Americans, the vast majority of whom had no part in this horrific play.
Congress apparently decided to listen to a few political heavy-hitters in the financial community about the need to shovel boatloads of taxpayer money into their faltering businesses, rather than listening to their constituents who oppose this giveaway almost unanimously. The legislation before you has made nips and tucks to the Treasury's original proposal that ultimately cannot conceal its fundamental flaws. Surely some Members will reap what they have sown at the ballot box for their shocking negligence of taxpayers' concerns.
Roll call votes on the bailout will be one of only a handful of votes in the last decade to receive the highest weight of 100 in our annual Rating of Congress.
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Image via WikipediaGovernment reform orgs. deliver news on major events within their areas of expertise. From: Ellen Miller of Sunlight Foundation via [openhouseproject] group
The Bailout Legislation
As news spreads that a consensus Wall Street bailout plan is being finalized, and leaders negotiate between proposals submitted from the Treasury Department, Senator Dodd, Representative Markey, and others, two separate conversations are taking place. One is public, as the nation struggles to evaluate the urgency of the economic situation, and to understand the best course of action. The other, however, is not public, as the compromises and deal making — the real stuff of urgent policy-making — are held in the dark.
The Sunlight Foundation is calling on Congress to publish the proposed bailout legislation as soon as possible, to give constituents and lawmakers themselves as much time as possible to examine the specifics of the proposal before it’s voted on. We will post the draft legislation to PublicMarkup.org as soon as possible, to give citizens a chance to weigh in on the proposal’s specifics. http://blog.sunlightfoundation.com/2008/09/25/show-us-the-legislation/
Congress faces urgent pressure from the Administration and from constituents to act. Regardless of the course of action Congress ultimately chooses, this is a decision that must be made in full public view. If citizens don’t have a chance to evaluate the legislation, how can Congress possibly represent their constituents’ needs?
The need for sunlight is especially required for urgent or emergency legislation. All too often, Congress praises transparency as a democratic value, but violates it in practice. Any lack of transparency in consideration of this legislation would be especially ironic since lawmakers have blamed the current crisis on financial malfeasance that was hidden from public view.
We have called the relevant congressional committees and have asked for copies of the new consensus legislation. As soon we get it, we’ll be posting the text of the legislation online at PublicMarkup.org.
Now more than ever, Congress must represent the needs of all Americans, and to give everyone - citizens and lawmakers alike — a chance to participate actively in the legislative process.
Before the bailout proposal is considered by lawmakers, it must undergo an even more important test: evaluation and assessment by the public.
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Government reform orgs. deliver news on major events within their areas of expertise. From: Election Protection
We've seen it over and over again: undertrained poll workers causing problems that lead to voters being disenfranchised.
When poll workers don't know what to do when machines break down, misunderstand state law about voters showing photo ID, or can't explain their state's ballot correctly - or when there simply aren't enough of them - votes are lost.
There's an answer to the problem: you.
We've partnered with Credo Mobile to recruit our non-legal members to be poll workers for Election Day 2008.
It's simple and easy: enter your zip code, press join, and you'll be guided through the process. With a full day of your time, you can have a tremendous impact.
Having enough poll workers to handle high turnout on Election Day couldn't be more important - but we're running out of time to recruit the poll workers we need. That's why I'm hoping you will sign up to be a poll worker in this year's election today!
Poll workers are a vital part of a fair, accountable, election in which every voter can cast their ballot and have it counted.
Election Protection is recruiting legal volunteers - but if you don't have a legal background, becoming a poll worker is a fantastic way to help ensure a fair and efficient election. Please consider becoming an official poll worker.
US House Financial Services Committee. Image via WikipediaGovernment reform orgs. deliver news on major events within their areas of expertise. From: OMB Watch
The pace at which Congress is considering the largest intervention into financial markets in the history of the United States, if not the world, is shocking. Over the weekend, the Bush administration proposed legislation that would grant it the authority to buy up toxic financial assets in an amount equal to five percent of gross domestic product (GDP). The magnitude of the funds requisitioned is matched only by the administration's requested level of unchecked power and opacity in how it would execute this historic market intervention. Congress has responded with uncharacteristic haste, setting the stage for passage of monumentally flawed legislation that purports to fix a yet-undiagnosed problem in roughly one week.
We do not pretend to know whether a bailout is needed or, if one is needed, what size and scope it should be. But most assuredly, rushed actions will result in quick fixes without resolving underlying problems. If economists and financial experts are correct in their assessment of the economy, Congress would be well advised to take a collective breath, slow down, and begin the process of study and deliberation that legislation of this historic magnitude deserves. If the economic crisis is as severe as Treasury Secretary Henry Paulson now indicates, Congress can wait an extra week before adjourning or return during the final weeks of the election season to address this issue. That Democratic leaders Harry Reid (D-NV) and Nancy Pelosi (D-CA) have neglected to mitigate the hysteria induced by an impending adjournment date that could easily be postponed is baffling and frustrating. After all, addressing national priorities is precisely why they were elected.
Paulson's initial request to Congress would have hid the actions of the Treasury from the sight of not only the public, but also from Congress and the courts. Sec 2(b)(2) of Paulson's legislative text would give his department authority to enter into contracts "without regard to any other provision of law regarding public contracts." Sec. 8 would make "[d]ecisions by the Secretary pursuant to the authority of this Act … non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Paulson has agreed to modify these provisions, but it is a clear indicator that the administration has its sights set on virtually unchecked authority — much like what happened after the 9/11 terrorist attacks.
Congress would be wise to ensure that significant oversight and accountability structures are in place. If Paulson or his successor can make unilateral decisions about contracts, for example, it will likely raise conflicts of interest. The firms most able to help the government dispose of toxic assets are likely the firms that are seeking the government bailout. Congress must be wary of ceding authority to a unilateral actor with no assurances of safeguarding the public from conflicts of interest.
Paulson's proposal would do what advocates and watchdogs of all ideological stripes abhor: it would socialize the risks (and bad decisions) of capitalism while privatizing the rewards. The Bush administration's toxic asset buyout program would purchase from financial firms and individuals assets that are now worth significantly less than the original purchase price. The plan calls for the government to relieve the financial industry of hundreds of billions (potentially trillions) of dollars of bad debt without receiving anything in return from these firms. Nothing. No one knows what the size or value of these debts will be. Progressives complain the taxpayers get no equity in the companies that created the bad debt; conservatives complain about government interference in the free market. This issue is at the crux of a major philosophical debate about the role of capitalism as this country moves into the 21st century.
Without attaching strings to a bailout, Washington would place an additional $2,000 of debt on the shoulders of each man, woman, and child in the country while encouraging the foolish and greedy decisions of Wall Street. It was the poor decisions of investment bankers that put the nation's entire economy at risk; it would be nothing less than immoral to enable and reward their reckless behavior as millions of Americans find themselves unemployed, losing their homes, and struggling to pay for food and electricity.
With nary a witness heard nor public forum entertained, the chair of the Senate Banking Committee, Christopher Dodd (D-CT), working with his counterpart in the lower chamber, chair of the House Financial Services Committee Barney Frank (D-MA), had started circulating the outline of the legislation his committee is likely to offer. However, Republican ranking member on the Senate Banking Committee, Richard Shelby (R-AL), sensing the imprudent manner under which Congress is responding to the administration, believes "Congress must immediately undertake a comprehensive, public examination of the problem and alternative solutions rather than swiftly pass the current plan with minimal changes or discussion." Dodd's contribution is substantively promising, and Shelby's warning is well warranted and should be heeded. While things are shifting quickly, if a bailout is to occur, the legislation must adhere to the principles outlined in a letter co-authored by ACORN and the Campaign for America's Future, to which OMB Watch has signed on.
These guidelines include the set of principles that should be followed whenever Congress intervenes in the market:
* Ensure proper oversight will be conducted over the intervening agency * Protect the taxpayer by ensuring that the federal government not only assumes the risks of a bailout, but also shares in the benefits * Maintain a sensible regulatory framework under which assisted firms and individuals conduct business * Hold individuals accountable for their irresponsible behavior
In addition to these guidelines, consideration should be given to aiding individual citizens who continue to struggle to stay in their homes. Above all, Congress must conduct its deliberations transparently and be wary of potential conflicts of interest of those that seek to influence the legislative outcome.
It was only four days ago that Paulson asked Congress to pass legislation that would allow his department to use $700 billion to purchase mountains of bad debt. That's five percent of the nation's total economic annual output, or to put it another way, that's even more than what has been spent on the war in Iraq. With so much riding on the decisions and actions that our leaders are about to make at this pivotal moment in our history, every American deserves more than five days of Congress's time. Perhaps now, more than any other time, elected officials, particularly Congress, need to do more than prop up our expectations with short-term solutions. Instead, they should develop a clear understanding of all the components that led to this crisis. Only then will proposed reforms have lasting impact and ensure this type of problem is not allowed to happen again. Let's hope our leaders make the prudent decision to slow the process down and devise a wise policy solution that benefits our entire society.
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To develop its new website that tries to help the public understand direct-to-consumer drug ads, the U.S. Food and Drug Administration (FDA) "turned to a nonprofit front group erected by Shaw Science Partners, a public relations firm that specializes in launching new drugs," according to the Center for Science in the Public Interest (CSPI). EthicAd, the nonprofit behind the FDA site, is funded by Shaw Science and its own board members. Shaw Group founder Michael Shaw admitted that "if not all, almost all" of EthicAd's funders "do work for industry." EthicAd also "shares the same physical address as Shaw Science Partners." CSPI gives a negative review of the FDA site, calling it "jargon-filled" and lacking advice on how to evaluate messages about drug side effects, among other consumer topics. CSPI is calling on the FDA "to scuttle the web site, to terminate its relationship with the drug companies' PR firm, and to seek out advice from leading physicians, pharmacists, or consumer groups."
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A statue of the first US Secretary of the Treasury Alexander Hamilton stands in front of the US Treasury. Image by Getty Images via DaylifeGovernment reform orgs. deliver news on major events within their areas of expertise. From: The Concord Coalition
$700 Billion Market Bailout: Piling on more Debt
The Administration released over the weekend proposed legislation that would give the Secretary of the Treasury sweeping authority to purchase "on such terms and conditions as determined by the Secretary" up to $700 billion of "mortgage-related assets from any financial institution having its headquarters in the United States."
The Treasury would issue new Treasury debt to finance the purchases. In order to accommodate the new debt, the bill would increase the statutory limit on the public debt to $11.3 trillion. When the Bush Administration took office in 2001, the public debt was half that amount, at $5.7 trillion.
There is ongoing discussion among congressional staff, and the Congressional Budget Office (CBO) and the Office of Management Budget (OMB), about how to "score" the Treasury purchases. The draft legislation states that the "cost of mortgage-related assets...shall be determined as provided under the Federal Credit Reform Act...." However, this would be an odd formulation, since the Credit Reform Act applies to direct loans and loan guarantees originated by the government -- not the purchase of market assets.
Regardless of how the "scoring" issues are resolved, the bottom line is that the Treasury would be borrowing up to $700 billion in order to purchase mortgage-related assets--and this borrowing would add substantially to the public debt, and U.S. indebtedness to foreign lenders.
Of particular importance, the ballooning debt would add substantially to annual interest payments by the Federal government. Net interest payments, already nearly $250 billion per year, consume more than one in five income tax dollars. The new Treasury borrowing would take an increasing bite out of income tax revenues--and leave future generations with the tab for this generation's market meltdown.
The bailout legislation is likely to be added to a Continuing Resolution that Congress must pass by September 30, 2008 in order to keep the government functioning when the new fiscal year begins on October 1.
The Exploding Public Debt
Since 2001, the debt held by the public has increased from $3.3 trillion to $5.4 trillion, and total public debt has increased from $5.7 trillion to nearly $10 trillion, due to deficit-financed tax cuts; two deficit-financed wars; a recession in 2001-02; and a deficit-financed expansion of Medicare (the prescription drug plan). In recent weeks, several actions have been undertaken or proposed that could swell debt held by the public to more than $6 trillion and total public debt to more than $11 trillion. These include:
--$700 billion: Proposed authority for the Treasury to purchase distressed mortgages to ease the credit crunch
--$85 billion: Federal Reserve loan to AIG (American International Group)
--$29 billion: Federal guarantees to allow Bear Stearns to be purchased by JP Morgan Chase
--$25 billion: CBO estimate of the Federal bailout of Fannie Mae and Freddie Mac
>All Things Reform Mobile: allthingsreform.mofuse.mobi >Capitol Switchboard: 202-224-3121 (not toll-free) >US House/Senate Mobile: bit.ly/members >Contact your reps tips: bit.ly/dear >Shortened All Things Reform URL: bit.ly/dw
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