November 23, 2009
Payback Time
By EDMUND L. ANDREWS

WASHINGTON — The United States government is financing its more than trillion-dollar-a-year borrowing with i.o.u.’s on terms that seem too good to be true.

But that happy situation, aided by ultralow interest rates, may not last much longer.

Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and interest rates that are sure to climb back to normal as soon as the Federal Reserve decides that the emergency has passed.

Even as Treasury officials are racing to lock in today’s low rates by exchanging short-term borrowings for long-term bonds, the government faces a payment shock similar to those that sent legions of overstretched homeowners into default on their mortgages.

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.

The surge in borrowing over the last year or two is widely judged to have been a necessary response to the financial crisis and the deep recession, and there is still a raging debate over how aggressively to bring down deficits over the next few years. But there is little doubt that the United States’ long-term budget crisis is becoming too big to postpone.

Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden.

“The government is on teaser rates,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates lower deficits. “We’re taking out a huge mortgage right now, but we won’t feel the pain until later.”

So far, the demand for Treasury securities from investors and other governments around the world has remained strong enough to hold down the interest rates that the United States must offer to sell them. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt.

The government’s average interest rate on new borrowing last year fell below 1 percent. For short-term i.o.u.’s like one-month Treasury bills, its average rate was only sixteen-hundredths of a percent.

“All of the auction results have been solid,” said Matthew Rutherford, the Treasury’s deputy assistant secretary in charge of finance operations. “Investor demand has been very broad, and it’s been increasing in the last couple of years.”

The problem, many analysts say, is that record government deficits have arrived just as the long-feared explosion begins in spending on benefits under Medicare and Social Security. The nation’s oldest baby boomers are approaching 65, setting off what experts have warned for years will be a fiscal nightmare for the government.

“What a good country or a good squirrel should be doing is stashing away nuts for the winter,” said William H. Gross, managing director of the Pimco Group, the giant bond-management firm. “The United States is not only not saving nuts, it’s eating the ones left over from the last winter.”

The current low rates on the country’s debt were caused by temporary factors that are already beginning to fade. One factor was the economic crisis itself, which caused panicked investors around the world to plow their money into the comparative safety of Treasury bills and notes. Even though the United States was the epicenter of the global crisis, investors viewed Treasury securities as the least dangerous place to park their money.

On top of that, the Fed used almost every tool in its arsenal to push interest rates down even further. It cut the overnight federal funds rate, the rate at which banks lend reserves to one another, to almost zero. And to reduce longer-term rates, it bought more than $1.5 trillion worth of Treasury bonds and government-guaranteed securities linked to mortgages.

Those conditions are already beginning to change. Global investors are shifting money into riskier investments like stocks and corporate bonds, and they have been pouring money into fast-growing countries like Brazil and China.

The Fed, meanwhile, is already halting its efforts at tamping down long-term interest rates. Fed officials ended their $300 billion program to buy up Treasury bonds last month, and they have announced plans to stop buying mortgage-backed securities by the end of next March.

Eventually, though probably not until at least mid-2010, the Fed will also start raising its benchmark interest rate back to more historically normal levels.

The United States will not be the only government competing to refinance huge debt. Japan, Germany, Britain and other industrialized countries have even higher government debt loads, measured as a share of their gross domestic product, and they too borrowed heavily to combat the financial crisis and economic downturn. As the global economy recovers and businesses raise capital to finance their growth, all that new government debt is likely to put more upward pressure on interest rates.

Even a small increase in interest rates has a big impact. An increase of one percentage point in the Treasury’s average cost of borrowing would cost American taxpayers an extra $80 billion this year — about equal to the combined budgets of the Department of Energy and the Department of Education.

But that could seem like a relatively modest pinch. Alan Levenson, chief economist at T. Rowe Price, estimated that the Treasury’s tab for debt service this year would have been $221 billion higher if it had faced the same interest rates as it did last year.

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.

To lock in low interest rates in the years ahead, Treasury officials are trying to replace one-month and three-month bills with 10-year and 30-year Treasury securities. That strategy will save taxpayers money in the long run. But it pushes up costs drastically in the short run, because interest rates are higher for long-term debt.

Adding to the pressure, the Fed is set to begin reversing some of the policies it has been using to prop up the economy. Wall Street firms advising the Treasury recently estimated that the Fed’s purchases of Treasury bonds and mortgage-backed securities pushed down long-term interest rates by about one-half of a percentage point. Removing that support could in itself add $40 billion to the government’s annual tab for debt service.

This month, the Treasury Department’s private-sector advisory committee on debt management warned of the risks ahead.

“Inflation, higher interest rate and rollover risk should be the primary concerns,” declared the Treasury Borrowing Advisory Committee, a group of market experts that provide guidance to the government, on Nov. 4.

“Clever debt management strategy,” the group said, “can’t completely substitute for prudent fiscal policy.”

November 22, 2009
By DAVID M. HERSZENHORN and ROBERT PEAR

WASHINGTON — The Senate voted on Saturday to begin full debate on major health care legislation, propelling President Obama’s top domestic initiative over a crucial, preliminary hurdle in a formidable display of muscle-flexing by the Democratic majority.

“Tonight we have the opportunity, the historic opportunity to reform health care once and for all,” said Senator Max Baucus, Democrat of Montana, and a chief architect of the legislation. “History is knocking on the door. Let’s open it. Let’s begin the debate.”

The 60-to-39 vote, along party lines, clears the way for weeks of rowdy floor proceedings that will begin after Thanksgiving and last through much of December.

The Senate bill seeks to extend health benefits to roughly 31 million Americans who are now uninsured, at a cost of $848 billion over 10 years.

The House earlier this month approved its health care bill by 220 to 215, with just one Republican voting in favor. That measure is broadly similar to the Senate legislation, but there are some major differences that would have to be resolved before a bill could reach Mr. Obama, and that would almost surely push the process into next year.

As the Democrats succeeded Saturday in uniting their caucus by winning over the last two holdouts, big disagreements remained, making final approval of the bill far from certain.

Two reluctant Democratic senators, Mary L. Landrieu of Louisiana and Blanche Lincoln of Arkansas, warned that their support for a motion to open debate did not guarantee that they would ultimately vote for the bill. Their remarks echoed previous comments by several other senators, including Ben Nelson, Democrat of Nebraska, and Joseph I. Lieberman, independent of Connecticut.

Those comments made clear that more horse-trading lies ahead and that major changes might be required if the bill is to be approved. And it suggested that the Senate majority leader, Harry Reid of Nevada, who relied only on members aligned with his party to bring the bill to the floor, may yet have to sway one or more Republicans to his side to get the bill adopted.

The Senate Republican leader, Mitch McConnell of Kentucky, said his party’s opposition would persist. “The battle has just begun,” he said.

In a rare ceremonial gesture reserved for major votes, senators cast their yeas and nays from their desks in the chamber, each one rising to voice his or her position. Senator George V. Voinovich, Republican of Ohio, was not present and did not vote.

After the vote, Mr. Reid said he understood that Ms. Landrieu was already working with two other Democratic senators, Thomas R. Carper of Delaware and Charles E. Schumer of New York, to see if they could devise a public insurance plan with broad appeal.

The White House issued a statement praising the vote. “The President is gratified that the Senate has acted to begin consideration of health insurance reform legislation,” his press secretary, Robert Gibbs, said, adding that President Obama “looks forward to a thorough and productive debate.”

Mrs. Lincoln, who faces a tough re-election campaign next year and has in recent weeks been the target of millions of dollars in television advertising by both sides in the health care fight, said pointedly that she would not vote for the measure if it retained a government-run health insurance plan, known as the public option, to compete with private insurers. “Although I don’t agree with everything in this bill, I believe it is more important that we begin debate on how to improve the health care system for all Americans,” said Mrs. Lincoln, who was the last uncommitted Democrat, and whose speech, at about 2:30 p.m. Saturday, lifted a cloud of suspense that had hovered around the Capitol.

She added: “But let me be perfectly clear. I am opposed to a new government-administered health care plan as a part of comprehensive health insurance reform, and I will not vote in favor of the proposal that has been introduced by leader Reid as it is written.” But Senator Lieberman, who voted to take up the health care bill, said he was still staunchly opposed to a government-run plan. It is “a terrible idea,” he said.

Ms. Landrieu, whose support came after she won a provision that could be worth more than $100 million in additional federal aid for her financially troubled state, said, “I have decided there are enough significant reforms and safeguards in this bill to move forward, but much more work needs to be done.”

A parade of Democrats and Republicans spent Saturday laying out their arguments for and against the bill in floor speeches.

Mr. Reid, in a rousing closing speech given at his customary volume, which is barely audible, likened the health care bill to some of the most profound issues confronted by the Senate across history.

“Imagine if instead of debating either of the historic G.I. Bills — legislation that has given so many brave Americans the chance to brave college — if this body had stood silent,” Mr. Reid said. “Imagine if instead of debating the bills that created Social Security or Medicare, the Senate’s voices had been stilled. Imagine if instead of debating whether to abolish slavery, instead of debating whether giving women and minorities a right to vote, those who disagreed were muted, discussion was killed.”

With the Democrats nominally controlling 60 votes — the precise number needed to overcome the Republican attempt to stop the bill — the vote on Saturday evening was the biggest test yet of the Democrats’ resolve and of Mr. Reid’s ability to unite his fragile caucus. Mr. Reid faces a tough re-election fight next year.

The bill would expand health benefits by broadly expanding Medicaid, the federal-state insurance program for low-income people, and by providing subsidies to help moderate-income people buy either private insurance or coverage under a new government-run plan, the public option. And it would impose a requirement that nearly all Americans obtain insurance or pay monetary penalties for failing to do so.

According to the Congressional Budget Office, the cost of the legislation would be more than offset by new taxes and fees and reductions in government spending, so that the bill would reduce future federal budget deficits by $130 billion through 2019.

Mr. Reid accused Republicans who opposed the legislation of “living in a different world.” He and several other Democrats also used their speeches to assail perceived abuses by private insurers. “The health insurance industry has an insatiable appetite for more profit,” Mr. Reid said.

Senate Republicans countered with an impassioned denunciation of the measure as an ill-conceived budget-busting expansion of government and a threat to the health and economic security of all Americans, especially the elderly.

The Republicans sought to portray the vote on Saturday — on whether to end debate on a motion to bring up the health bill — as tantamount to a vote on the bill itself, and to shake the confidence of Democrats who had wavered in recent days.

In his closing argument, just ahead of the vote, Mr. McConnell implored at least a single Democrat to vote no. “If we don’t stop this bill tonight,” he said, “the only debate we’ll be having is about higher premiums, not savings for the American people, higher taxes instead of lower costs, and cuts to Medicare rather than improving seniors’ care.”

“The American people are looking at the Senate tonight; they’re hoping we say no to this bill,” Mr. McConnell added moments later, holding up a single index finger. “All it would take,” he said, “is just one member of the other side of the aisle, just one, to give us an opportunity not to end the debate but to change the debate in the direction the American people would like us to go.”

Mr. McConnell warned of the political consequences for senators who voted to move ahead. “Senators who support this bill have a lot of explaining to do,” he said. “Americans know that a vote to proceed on this bill, to get on this bill, is a vote for higher premiums, higher taxes and massive cuts to Medicare.”

Republicans also said that the vote was a proxy for a larger dispute over abortion, because they said the bill did not sufficiently restrict the use of federal money for insurance covering abortions. Senator Mike Johanns, Republican of Nebraska, described the vote as “the key vote on abortion in the health care debate.”

Saturday night’s vote was required because Senate rules and precedent have long granted a right of virtually unlimited debate, or filibuster, to the minority that can be curtailed only by a supermajority vote of 60 senators to move ahead. Currently, there are 58 Democrats in the Senate and two independents who routinely align with them. If the Democrats had lost the vote, they could have tried again, presumably after changing the bill to try to attract more votes.

Senator Patrick J. Leahy, Democrat of Vermont assailed the Republicans as obstructionists on Saturday morning. “I will vote today to end the filibuster so the Senate can begin the historic debate to improve and reform our nation’s health insurance system,” he said. “Let’s not duck the debate, let the debate begin. Let’s not hide from the votes.”

While Democrats generally agree on the broad goals of the legislation, to cover the uninsured and to slow the growth in health care spending, there are potentially serious disagreements over any number of provisions that could sink the bill.

Ms. Landrieu, in her speech, methodically cataloged provisions of the bill that she liked and those that she said needed improvement.

Under the bill, she said, owners of small businesses would no longer face “volatile costs” for health insurance. In addition, she said, the bill would “encourage employers to move away from high-cost benefit plans” and shift some compensation to wages.

But more needed to be done to improve the bill, she argued, particularly to help small businesses and the self-employed. And she issued a stern warning about the public option, one of the most contentious features of the sweeping health care legislation.

Carl Hulse contributed reporting.

November 18, 2009
By HELENE COOPER

BEIJING — In six hours of meetings, at two dinners and during a stilted 30-minute news conference in which President Hu Jintao did not allow questions, President Obama was confronted, on his first visit, with a fast-rising China more willing to say no to the United States.

On topics like Iran (Mr. Hu did not publicly discuss the possibility of sanctions), China’s currency (he made no nod toward changing its value) and human rights (a joint statement bluntly acknowledged that the two countries “have differences”), China held firm against most American demands.

With China’s micro-management of Mr. Obama’s appearances in the country, the trip did more to showcase China’s ability to push back against outside pressure than it did to advance the main issues on Mr. Obama’s agenda, analysts said.

“China effectively stage-managed President Obama’s public appearances, got him to make statements endorsing Chinese positions of political importance to them and effectively squelched discussions of contentious issues such as human rights and China’s currency policy,” said Eswar S. Prasad, a China specialist at Cornell University. “In a masterstroke, they shifted the public discussion from the global risks posed by Chinese currency policy to the dangers of loose monetary policy and protectionist tendencies in the U.S.”

White House officials maintained they got what they came for — the beginning of a needed give-and-take with a surging economic giant. With a civilization as ancient as China’s, they argued, it would be counterproductive — and reminiscent of President George W. Bush’s style — for Mr. Obama to confront Beijing with loud chest-beating that might alienate the Chinese. Mr. Obama, the officials insisted, had made his points during private meetings and one-on-one sessions.

“I do not expect, and I can speak authoritatively for the president on this, that we thought the waters would part and everything would change over the course of our almost two-and-a-half-day trip to China,” said Robert Gibbs, the White House spokesman. “We understand there’s a lot of work to do and that we’ll continue to work hard at making more progress.”

Several China experts noted that Mr. Obama was not leaving Beijing empty-handed. The two countries put out a five-point joint statement pledging to work together on a variety of issues. The statement calls for regular exchanges between Mr. Obama and Mr. Hu, and asks that each side pay more attention to the strategic concerns of the other. The statement also pledges that they will work as partners on economic issues, Iran and climate change.

But despite a conciliatory tone that began weeks ago when Mr. Obama declined to meet the Tibetan spiritual leader, the Dalai Lama, before visiting China to avoid offending China’s leaders, it remains unclear whether Mr. Obama made progress on the most pressing policy matters on the American agenda in China or elsewhere in Asia.

The president has had to fend off criticism from American conservatives that he appeared to soften the American stance on the positioning of troops on the Japanese island of Okinawa, and for bowing to Japan’s emperor.

At a regional conference in Singapore, Mr. Obama announced a setback on another top foreign policy priority, climate change, acknowledging that comprehensive agreement to fight global warming was no longer within reach this year.

Past American presidents have usually insisted in advance on some concrete achievements from their trips overseas. President Bush received vigorous endorsements of his top foreign policy priority, the global war on terrorism, during his visits to Beijing, and President Bill Clinton guided China toward joining the World Trade Organization after prolonged negotiations. When either of those presidents visited the country, China often made a modest concession on human rights as well.

This time, Mr. Hu declined to follow the lead of President Dmitri A. Medvedev of Russia, who, after months of massaging by the Obama administration, now says that he is open to tougher sanctions against Iran if negotiations fail to curb Iran’s nuclear program. The administration needs China’s support if tougher sanctions are to be approved by the United Nations Security Council. But during the joint appearance in Beijing on Tuesday, Mr. Hu made no mention of sanctions.

Rather, he said, it was “very important” to “appropriately resolve the Iranian nuclear regime through dialogue and negotiations.” And then, as if to drive home that point, Mr. Hu added, “During the talks, I underlined to President Obama that given our differences in national conditions, it is only normal that our two sides may disagree on some issues.”

White House officials acknowledged that they did not get what they wanted from Mr. Hu on Iran but said that Mr. Obama’s method would yield more in the long term. “We’re not looking for them to lead or change course, we’re looking for them to not be obstructionist,” one administration official said.

In a meeting in Beijing with a senior Chinese official on Wednesday morning, Secretary of State Hillary Rodham Clinton again pressed China on Iran. She told the official, Dai Bingguo, that even if China had not decided what sanctions on Iran it would accept, “you need to send a signal,” said a senior American official, who spoke on condition of anonymity so he could describe the exchange.

Mr. Obama did not appear to move the Chinese on currency issues, either. China has come under heavy pressure, not only from the United States but also from Europe and several Asian countries, to revise its policy of keeping its currency, the renminbi, pegged at an artificially low value against the dollar to help promote its exports. Some economists say China must take that step to prevent the return of large trade and financial imbalances that may have contributed to the recent financial crisis.

Mr. Obama on Tuesday could only cite China’s “past statements” in support of shifting toward market-oriented exchange rates, implying that he had not extracted a fresh commitment from Beijing to move in that direction soon.

There are many reasons the White House may have heeded China’s clear desire for a visit free of the polemics that often accompany meetings between leaders of the two countries. Mr. Obama’s foreign policy is rooted in recasting the United States as a thoughtful listener to friends and rivals alike. “No we haven’t made China a democracy in three days — maybe if we pounded our chest a lot that would work,” Mr. Gibbs said in an e-mail message on Tuesday night. “But it hasn’t in the last 16 years.”

Kenneth Lieberthal, a Brookings Institution scholar who oversaw China issues in President Clinton’s White House, agreed. “The United States actually has enormous influence on popular thinking in China, but it is primarily by example,” he said. “If you go to the next step and say, ‘You guys ought to be like us,’ you lose the impact of who you are.”

The National Security Council’s spokesman, Michael A. Hammer, added, “What we did come to do is speak bluntly about the issues which are important to us, not in an unnecessarily offensive manner, but rather in the Obama style of showing respect.”

Mr. Obama, even as he projected a softer image, did nudge the Chinese on some delicate issues.

On Tuesday, standing next to Mr. Hu, Mr. Obama brought up Tibet, where Beijing-backed authorities have clamped down on religious freedom. “While we recognize that Tibet is part of the People’s Republic of China, the United States supports the early resumption of dialogue between the Chinese government and representatives of the Dalai Lama to resolve any concerns and differences that the two sides may have,” he said.

Reporting was contributed by Sharon LaFraniere, Edward Wong, Michael Wines and Mark Landler.

GOP and liberals put pressure on Democrat as Senate vote nears

By Shailagh Murray
Washington Post Staff Writer
Tuesday, November 17, 2009

When the Senate begins floor debate on a health-care reform package this week, the outcome is almost certain to rest on decisions made by a handful of moderate Democrats.

None of those Democrats is feeling the heat as intensely as Sen. Blanche Lincoln (Ark.), who has become emblematic of the improbable distance that health-care reform has traveled, and how far it still must go before becoming law.

Her vote and that of two other Democrats expressing serious reservations about the legislation — Sens. Ben Nelson (Neb.) and Mary Landrieu (La.) — will determine whether it will garner the 60 needed to break an all-but-certain Republican filibuster.

There are 60 members of the Democratic caucus but one, independent Sen. Joseph I. Lieberman (Conn.), has threatened to join a GOP filibuster if the final bill contains a government insurance plan, or “public option.” With only a single Republican, Sen. Olympia J. Snowe of Maine, even considering backing the final product on the floor, the trio of Democratic centrists could make or break the reform effort.

And of those three, only Lincoln must face voters next year.

Hundreds of thousands of Lincoln’s constituents are low-income and lack insurance, the very kind of voters expected to benefit under the Senate bill. Lincoln, a second-term senator, helped write some of the legislation’s key provisions as a member of the Finance Committee, and her sometimes uncomfortable role near the center of the debate could cost her in culturally conservative Arkansas. Despite the potential benefits for many in her state, polls show her support weakening, and constituents are expressing doubts about the proposed overhaul.

The low-profile centrist is being pressed by both sides. Democratic activists are incensed that she has turned against the public option, an idea she once supported. Republicans are casting her cautious approach to the health-care debate in starkly political terms, saying that she is unwilling to put local interests above those of a president who lost the state by a resounding 20 percentage points.

“I want to be a check and balance on Barack Obama’s extreme agenda,” state Sen. Gilbert Baker, a front-runner for the GOP nomination, told reporters last week.

An Arkansas Poll published Nov. 5 found that Lincoln’s job-approval rating had dropped to 43 percent, from 54 percent a year ago. At least seven Republicans are vying to challenge her bid for a third term; Baker raised $500,000 in his first month as a candidate. And if she does not embrace the party line on the health issue, Lincoln could also face a Democratic primary challenger, along with a Green Party opponent in the general election.

“In some ways, there’s not a good vote on this,” said Sen. Mark Pryor (D), Arkansas’s junior senator, who coasted to reelection last year. “You’re going to have detractors on either side, no matter what you do. So I think in the end you have to what you think is right. And I think that’s what we’re all going to have to do.”

The first test for Lincoln could come as early as Friday, when the Senate will vote on whether to bring the bill to the floor. Lincoln told party leaders she would study the final product before committing either way.

“What people want is for us to take our time and not rush into something that we haven’t thought completely through,” she said, shrugging off the pressure as she hurried back to her office after a Senate vote last week.

Although Pryor supports the reform effort, another prominent Arkansan, Rep. Mike Ross (D), voted against the House bill.

“Most people support the need for health-insurance reform; they just think we can do it for less,” Ross said. “They really, as I do, support more choices. They’re just skeptical of a bill that takes 2,000 pages to accomplish that.”

Ross was reluctant to offer Lincoln advice, but acknowledged her predicament. “She represents the whole state. I just represent one-fourth of the state. I’d just be guessing.” But he added: “I think people fear the unintended consequences in a bill this massive.”

Democratic leaders expect Lincoln to stick with them on key procedural votes, but are less confident about winning her support on critical amendments — particularly on the contentious public option.

Lincoln’s record on a government insurance plan has drawn detractors on both sides. In July, she wrote in the Arkansas Democrat-Gazette: “Individuals should be able to choose from a range of quality health insurance plans. Options should include private plans as well as a quality, affordable public plan or non-profit plan that can accomplish the same goals as those of a public plan.”

By Sept. 1, she had changed her mind. “I would not support a solely government-funded public option,” Lincoln said at an event in Little Rock. “We can’t afford that.”

In recent weeks, she also has raised concerns about both potential compromise approaches — one that would allow states to “opt out” of a public plan that Senate Majority Leader Harry M. Reid (D-Nev.) is expected to include in the Senate bill, and a proposal by Snowe, the only Republican still at the negotiating table, to create a public option as a fallback if private insurers do not offer reasonable rates.

In the process, Lincoln has riled liberal groups including MoveOn.org, which is targeting her with radio ads, direct mail and rallies outside two of her Arkansas offices. Perhaps more ominously, MoveOn — working with the liberal group Democracy for America — has amassed $3.5 million in pledges to fund primary challenges against any Democratic senator who sides with Republicans to block an up-or-down vote on a bill with a public option.

“We think it’s really important for her to see there are negative political consequences to being on the wrong side of this issue,” said Ilyse Hogue, MoveOn’s campaign director. “There’s no arguing she’s in a conservative state, but she’s going to face a tough election no matter what, and she can’t do it without the base. These are the activists, the people who knock on doors, and she is really running the risk of alienating them.”

The National Republican Senatorial Committee is also documenting each of Lincoln’s comments on health care to build a case against her. The Republican National Committee released a Web video this week that compares her public-option remarks to Sen. John F. Kerry’s “I actually voted for it before I voted against it” line about Iraq war funding.

For GOP leaders, the best strategy for defeating the Senate bill is to sow doubts among vulnerable Democrats, convincing them that Reid is leading them off a political cliff.

“There’s a great effort under way here to convince their members to ignore public opinion” on health-care reform, Minority Leader Mitch McConnell (R-Ky.) told reporters last week. “I hope it will not be lost on our Democratic friends where the public is, how the public feels about this measure. They’re speaking increasingly loudly that they do not think it ought to pass.”

Recent polls suggest that reform is a difficult sell in Lincoln’s home state. The Arkansas Poll, conducted in mid-October by the University of Arkansas’s Survey Research Center, found that 39 percent of voters support a public option and 48 percent oppose the idea. And respondents split about evenly on the question of whether reform would improve or hurt their quality of care.

“It’s hard to draw firm conclusions,” said Arkansas Poll Director Janine Parry. “People are dissatisfied, but they haven’t signed on with an alternative.” Lincoln, said Parry, appears to be “right with her constituents — convinced that we need to do something, and not convinced it’s this.”

Senior Senate aides said Lincoln helped to shape measures aimed at reducing the cost of such procedures as MRIs and at better coordinating care among doctors, hospitals and nursing homes. And she was the primary sponsor, along with Snowe, of a provision aimed at giving small businesses more health-care choices for employees.

According to the Kaiser Family Foundation, of the nearly 473,000 Arkansas residents who lacked coverage as of 2008, virtually all would be eligible for federal assistance under the Senate bill — either through Medicaid or through tax credits that would subsidize the purchase of private plans.

“There’s a lot in the bill that will be good for Arkansas,” Pryor said. “But there are a lot of people in our state who are against this bill. Some have very legitimate concerns and ask very good questions. But also some is based on bad information. We have to try to talk to those people.”

If Lincoln supports the Senate bill, she will have to sell it to constituents before they see many of the legislation’s benefits. But she says she is well aware of the challenge. “I have no doubt that I’ll be held accountable on this,” she said. “We’re going to be held accountable on a lot of things.”

But poll finds support for key provisions of reform effort

By Dan Balz and Jon Cohen
Washington Post Staff Writers
Tuesday, November 17, 2009

As the Senate prepares to take up legislation aimed at overhauling the nation’s health-care system, President Obama and the Democrats are still struggling to win the battle for public opinion. A new Washington Post-ABC News poll shows Americans deeply divided over the proposals under consideration and majorities predicting higher costs ahead.

But Republican opponents have done little better in rallying the public opposition to kill the reform effort. Americans continue to support key elements of the legislation, including a mandate that employers provide health insurance to their workers and access to a government-sponsored insurance plan for those people without insurance.

Over the past few months, public opinion has solidified, leaving Obama and the Democrats with the political challenge of enacting one of the most ambitious pieces of domestic legislation in decades in the face of a nation split over the wisdom of doing so. In the new poll, 48 percent say they support the proposed changes; 49 percent are opposed.

With the bill through the House, Senate Democrats are now looking for the votes to enact their version of the legislation and keep the reform effort moving forward. Whatever the outcome of the health-care debate, it will have a powerful influence in shaping the political climate for next year’s midterm elections.

The House bill contains a highly controversial provision prohibiting abortion coverage for those insured under a new public insurance plan as well as those who received federal subsidies to purchase private insurance. In the poll, 61 percent say they support barring coverage for abortions for those receiving public subsidies, but if private funds were used to pay for abortion expenses, the numbers flipped. With segregated private money used to cover abortion procedures, 56 percent say insurance offered to those using government assistance should be able to include such coverage.

The new poll provides ammunition for both advocates and opponents of reform. For opponents, a clear area of public concern centers on cost — 52 percent say an altered system would probably make their own care more expensive, and 56 percent see the overall cost of health care in the country going up as a result.

Few see clear benefits in exchange for higher expenses. Rather, there has been a small but significant increase in the number (now 37 percent) who anticipate their care deteriorating under a revamped system, putting that number in line with opinion in July 1994, just before President Bill Clinton’s health-care reform efforts fizzled.

Among those with insurance, three times as many continue to see worse rather than better coverage options ahead (39 to 13 percent), and fewer than half of those who lack insurance see better options under a changed system. Six in 10 see it as “very” or “somewhat” likely that many private insurers would be forced out of business by a government-sponsored insurance plan, a potential result that GOP leaders frequently warn about.

But reform proponents have other findings to bolster their case. Two-thirds of those surveyed support one of the basic tenets of the reform plan, a new requirement that all employers with payrolls of $500,000 or more provide health insurance coverage for their employees or face fines.

As in previous polls, a majority supports a government-sponsored heath insurance plan to compete with private insurers, although the percentage supporting the general idea has slipped slightly over the past month to 53 percent. Support for the scheme jumps to 72 percent when the public plan is limited to those who lack access to coverage through an employer or the Medicare or Medicaid systems.

While Americans overall are divided on reform legislation, the Democrats have made some progress among at least one key group. Support among senior citizens, while still broadly negative, is up 13 points since September to 44 percent.

Seniors have also tilted back toward Obama when matched head to head with congressional Republicans on dealing with health-care reform, helping the president to a 13-point advantage over the GOP on this issue.

Republicans appear to be hampered by a widespread perception that they have not offered clear choices: 61 percent of those polled say the GOP is “mainly criticizing” without presenting alternatives to Democratic proposals.

Looking toward next year’s midterm elections, 25 percent say they more apt to back a candidate who supports the proposed health-care changes; 29 percent are less likely to do so. More, 45 percent, say the vote will not make much of a difference. Independents are nearly twice as likely to be swayed away from rather than toward a candidate who supports the changes (31 percent to 17 percent).

Beyond health care, Obama continues to garner broadly positive ratings from the public. His overall approval rating stands at 56 percent, holding steady in Post-ABC polls since the late summer. More, 61 percent, say they have an overall favorable impression of him, and a slim majority continues to see him as “about right” ideologically (four in 10 consider him “too liberal.”

The president, who is on a 10-day visit to Asia, gets his top mark on handling international affairs, and also picks up majority approval on dealing with the threat of terrorism. But Americans are more divided over his performance on other key issues, with nearly even splits in satisfaction with his work on health care, the economy and the situation in Afghanistan. On each of these three issues, intensity runs against the president, with significantly higher numbers expressing “strong” disapproval as strident approval. Obama receives generally negative reviews on his handling of the federal budget deficit, with 53 percent disapproving of his actions on that front.

Obama continues to be lifted by weakness in the opposition. In addition to his double-digit lead over congressional Republicans on health care, the president has a 15-point advantage on handling the nation’s still-struggling economy. More broadly, Democrats continue to have the edge as the party more trusted to deal with the country’s main problems over the next few years and when it comes to being more empathetic and more in tune with people’s values.

But there are also evident signs of an anti-incumbent mood in the new survey, which would disproportionately hurt the majority Democrats next fall should they hold. Most see the country as headed pretty seriously off on the wrong track and half of all Americans say they are inclined to look around for someone new to support for Congress; just 38 percent are inclined to reelect their member of Congress. These numbers are similar to those from November 1993, one year before Republicans took back control of the House and Senate and close to those from May 2006, six months before Democrats re-captured the Congress.

Among independents, nearly two-thirds say they are inclined to seek new representatives. Independents also about evenly divided over which party better represents their personal values and give Democrats a narrow advantage on being more in tune with “needs of people like you.” More than a quarter of independents do not trust either party to adequately deal with the country’s primary concerns in the coming years.

The poll was conducted Nov. 12-15 by conventional and cellular telephone among a random national sample of 1,001 adults. The margin of sampling error is plus or minus three percentage points.

Polling analyst Jennifer Agiesta contributed to this report.

Justices decline to review ruling on team nickname

By Robert Barnes
Washington Post Staff Writer
Tuesday, November 17, 2009

A nearly two-decade legal challenge by Native American activists to the nickname of the Washington Redskins came to a close Monday when the Supreme Court declined to review the group’s last loss in federal courts.

The justices declined without comment to reconsider a lower court’s ruling that the activists waited too long to bring their assertion that the nickname is so racially offensive that it does not deserve trademark protection.

“Obviously, we’re quite pleased; it’s been a long road,” said Robert Raskopf, a lawyer for the team since the suit was first filed in 1992. “We’re not surprised the court didn’t see any issue worthy of review.”

Philip Mause, who represented the challengers, said the activists were “disappointed” by the court’s decision but not yet resigned to accept defeat. A new group of challengers has filed the same trademark cancellation suit in hopes that their slightly different circumstances can avoid the procedural bar that halted this case.

Raskopf said the team is not worried about the new complaint. “I think we’re very confident with our likelihood of success,” he said.

Through the years, the team has steadfastly defended the use of the Redskins nickname as honoring Native Americans, not disparaging them. When based in Boston, the team was known as the Boston Braves and was renamed in 1933 as the Redskins. The team said in its brief to the court that the new name was “in honor of the team’s head coach, William ‘Lone Star’ Dietz, who was a Native American.”

The team became the Washington Redskins in 1937, when it moved south.

Native American groups have persuaded scores of high school and college teams to rename their mascots. The National Congress of American Indians told the justices in a friend of the court brief that the name is “patently offensive, disparaging, and demeaning and perpetrates a centuries-old stereotype.”

But despite vociferous protests, Washington has not budged. Under both former owner Jack Kent Cooke and current owner Daniel Snyder, Raskopf said, there has never been “even a whisper” about changing the nickname.

For the most part, though, the battle has been fought on the more mundane grounds of legal procedure, and even a victory by the activists would have cost the team only trademark protection and would not have forced it to abandon the name.

The battle began in 1992, when seven activists, led by Suzan S. Harjo, challenged Redskins trademarks issued in 1967. They won a decision seven years later from the Trademark Trial and Appeal Board, which said the name could be interpreted as offensive to Native Americans.

Trademark law prohibits registration of a name that “may disparage . . . persons, living or dead, . . . or bring them into contempt, or disrepute.”

Pro-Football Inc., the team’s corporate owner, appealed to federal court.

In 2003, U.S. District Judge Colleen Kollar-Kotelly sided with the team, ruling that the activists had not produced enough evidence to show the name was so insulting that it could not be protected by a trademark. She also said the trademark-cancellation claim was barred by the doctrine of laches, which serves as a defense against claims that should have been made long ago.

She revisited the issue after the U.S. Court of Appeals for the District of Columbia returned it to her, saying the youngest of the plaintiffs might have standing to pursue the case. But Kollar-Kotelly ruled that the challenger, Mateo Romero, waited eight years after he reached the age of majority to file the complaint. She said the delay unfairly penalized the Redskins, who invested millions of dollars marketing the team during that eight-year span.

A three-judge panel of the appeals court agreed that eight years was too long to bring the claim.

The Supreme Court was being asked only to review whether the claim was brought too late, not whether the nickname was offensive.

Mause had argued that the justices should take the case to decide whether disparaging trademarks can be challenged at any time. He cited a decision from the U.S. Court of Appeals for the 3rd Circuit, which was written by then-judge, now-Justice Samuel A. Alito Jr., that he said supported that view.

The case the court declined to hear is Harjo v. Pro-Football, Inc.

You can’t stop either. Why that’s good.

By Jacob Weisberg | NEWSWEEK
Published Oct 31, 2009
From the magazine issue dated Nov 9, 2009

“I think this would be a good time for a beer,” Franklin D. Roosevelt said upon signing a bill that made 3.2 percent lager legal, ahead of the full repeal of Prohibition. I hope Barack Obama will come up with some comparably witty remarks as he presides over the dismantling of our contemporary forms of prohibition—laws that prevent gay marriage, restrict cannabis as a Schedule I controlled substance, and ban travel to Cuba. “You may now kiss the groom,” perhaps, or a version of the comment he once made about smoking pot: “I inhaled—that was the point.” (Click here to follow Jacob Weisberg)

Prohibition now is different from Prohibition then. When the 18th Amendment went into effect in 1920, it was a radical social experiment challenging a custom as old as civilization. A predictable failure—the insult to individual rights, the impossibility of enforcement, the spawning of organized crime—it came to an end in 1933. Today it is a byword for futile attempts to legislate morality and remake human nature.

Our forms of prohibition are more sins of omission than commission. Rather than trying to take away longstanding rights, they’re instances of conservative laws failing to keep pace with a liberalizing society. But like Prohibition in the ’20s, these restrictions have become indefensible as well as impractical, and as a result are fading fast. Within 10 years, it seems a reasonable guess that Americans will travel freely to Cuba, that all states will recognize gay unions, and that few will retain criminal penalties for marijuana use by individuals. These reforms are inevitable—not because politics has changed, but because society has.

A few reference points: in April, Obama lifted restrictions on travel and remittances by Cuban-Americans. Last month the Justice Department announced that it would no longer prosecute cases involving medical marijuana. Same-sex marriages are recognized in six states and counting. In a larger frame, loosening restrictions and lax enforcement reflect evolving social norms. Gay unions have been celebrated on the New York Times weddings page since 2002. Since George W. Bush left office, American tourists no longer worry about being prosecuted for visiting Havana without a Treasury license. In L.A., you need only tell an on-site doctor at a walk-in pot emporium that you feel anxious to walk out with a legal bag of Captain Kush.

The chief reason these prohibitions are falling away is the evolving definition of the pursuit of happiness. What’s driving the legalization of gay marriage is not so much the moral argument, but the pressures from couples who want to sanctify their relationships, obtain legal benefits, and raise children in a stable environment. What’s advancing the decriminalization of marijuana is not just the demand for pot as medicine but the number of adults—more than 23 million in the past year, according to the most recent government survey—who use it and don’t believe they should face legal jeopardy. What’s bringing the change on Cuba is not the epic failure of the 49-year-old U.S. embargo, but the demand on the part of Americans who want to go there—whether to visit relatives, prospect for post-Castro business opportunities, or sip rum drinks on the beach.

For similar reasons, there isn’t likely to be any retreat on the right to have an abortion or own a gun. Popular demand for an individual right is simply too powerful to overcome. The Internet has been a crucial amplifier of all such claims. With pornography and gambling, the Web itself became an irrepressible distribution tool. When it comes to gay marriage, it has accelerated the recognition of a new civil right by serving as an organizing tool and information clearinghouse. More broadly, the freest communications medium the world has ever known has raised expectations of personal liberty. In a world where everyone has his own printing press, restrictions on personal behavior become increasingly untenable.

Politicians will continue to lag, rather than lead, these changes. Republicans face a risk in resisting the new realities. If the GOP remains the party of prohibition, it will increasingly alienate libertarian leaners and the young. Democrats face a different danger in embracing cultural transformations too eagerly. Nearly four decades after George McGovern became known as the candidate of amnesty, abortion, and acid, cultural issues are still treacherous territory for them. Why get in front of change when you can follow from a safe distance and end up with the same result?

Jacob Weisberg is also the author of The Bush Tragedy and In an Uncertain World: Tough Choices from Wall Street to Washington .

by Don Barbieri
Special to The Spokesman-Review

In September, the U.S. Senate began deliberations on the Clean Energy Jobs and American Power Act, following passage of a comprehensive climate and energy bill by the House of Representatives in June. Regional energy experts led by Sen. Maria Cantwell and people I trust from Avista and Itron have convinced me that now is the time for the Inland Northwest to stand up for a clean energy economy. We have the resources and technology; we just need the national leadership to do what is right and begin a transition to a clean energy economy.

For those of us in Eastern Washington, the need for this legislation is clear. Temperatures in Washington are expected to rise 5 degrees Fahrenheit by 2050, which will result in snowmelt occurring earlier and faster each year. Early snowmelt means more water resource problems for our dry region, including limited water supplies for drinking, agriculture and forest fire mitigation. Given these damaging consequences, we need to make sure that we’re at the forefront of the conversation to shift our nation to a clean energy economy.

Not only do we stand to gain by mitigating the impacts of climate change, we also stand to benefit significantly from investments in a new clean energy economy. Washington has what it takes to be the future powerhouse for clean energy. We currently rank fifth nationally in wind power and fourth nationally in clean energy venture capital investments. Under the national legislation we would receive $680 million for expanded energy efficiency investments.

Eastern Washington is home to some of the most dynamic leaders in clean energy innovation, and some of the nation’s foremost clean technology research and development capabilities are at Pacific Northwest National Laboratory. Our universities are joining smart researchers together with free enterprise leaders to find workable solutions. We have an abundance of renewable resources here: sun, water, wind and, most of all, the human resources to lead the way.

A strong national commitment to a bold clean energy transition will spur a flurry of investments that will accelerate economic recovery and drive solutions that pay dividends for years to come. Arguing against clean energy will shortchange our community’s future.

It’s also an argument against our national security. Our foreign affairs and defense are linked to our energy policy through our dependence on foreign oil. There is no doubt we as Americans rely on foreign oil reserves controlled by countries whose interests are at odds with our own; currently, we are sending billions of dollars overseas to pay for oil, leaving us and our military personnel vulnerable to unstable or hostile regimes.

It’s not just the threats to our national security. In these tough times, families are clipping coupons, buying in bulk and pinching pennies any way they can. As costs for everything from groceries to gasoline climb, the costs of not solving our economic crisis grow. However, if the Clean Energy Jobs bill passes, the average family in Washington is estimated to save over $5 per month on their energy bills and nearly $10 per month on vehicle fuel costs. Nationally, the legislation would create 1.7 million new clean energy jobs, of which at least 34,000 would be right here in Washington. The Clean Energy Jobs bill will help revive our nation’s struggling economy while protecting our planet; now is our moment to seize that opportunity.

Here in Washington state, we have the opportunity to help our nation lead. Our senators are both accomplished leaders. Sen. Cantwell has established herself as a clean energy champion and Sen. Patty Murray is an influential member of the Senate’s leadership. Now it’s up to these senators to ensure that the U.S. Senate passes the Clean Energy Jobs Act this year. We need them to do more than vote for the bill; they must speak loudly for the people of Washington and actively work to advance the bill.

In these challenging times, we need immediate action by the Senate to create jobs. We need the Senate to put us on a path to a clean energy economy and shift away from the carbon-based fuels that threaten our environment, our economy and our national security. We need Sens. Cantwell and Murray to take on their leadership roles to advance this legislation so that Washington state will reap the benefits of energy independence and building a clean energy economy. The future will be much brighter when Congress steps up to this enormous opportunity.

Don Barbieri is chairman of the board for Red Lion Hotels Corp.

Change dropping abortion coverage may have helped sway vote
by David Lightman
McClatchy

WASHINGTON – The House of Representatives on Saturday passed, by a 220-215 vote, historic health care overhaul legislation that would require nearly all Americans to obtain health insurance and create a government-run health insurance plan to help them do so.

If passed by the Senate, the bill would bring about the most sweeping changes in the American health care system since Medicare was created 44 years ago.

Supporters of the measure burst into cheers and applause on the House floor as it became clear the measure had won, but the vote was excruciatingly close, passing by just two votes more than the bare minimum needed. One Republican, Joseph Cao of Louisiana, voted for the bill; 39 Democrats, including Idaho’s Walt Minnick, voted against.

President Barack Obama made a personal plea for passage before the all-day debate began.

“Now is the time to finish the job,” Obama said in brief remarks in the White House Rose Garden after meeting with House Democrats.

The job is far from finished. The Senate hopes to act by the end of the year, and if successful, the two Houses would then craft a compromise that would need approval of each chamber.

The House vote came with a warning: Getting enough votes later this year or early in 2010 will not be easy. Thirty-nine Democrats, most from conservative districts or freshmen who narrowly won their 2008 elections, voted against the House bill, joining 176 Republicans. In the Senate, eight to 12 moderates have expressed reservations about that chamber’s proposal.

In addition to creating the public option government-run insurance program, the House-passed bill would bar insurers from denying people coverage because of pre-existing conditions and set up health care “exchanges,” or marketplaces, where consumers could easily shop for coverage.

The changes are expected to mean that by 2019, 96 percent of eligible Americans would have health insurance, up from the current 83 percent.

During his half-hour appearance on Capitol Hill, Obama took no questions from lawmakers, but his presence was a vivid reminder that the president has put health care overhaul at the top of his domestic agenda – a change that has eluded presidents for nearly a century.

“He came here to say, ‘This is what we said we would do in the campaign. Let’s do it,’ ” said House Majority Leader Steny Hoyer, D-Md.

On the House floor, Democratic leaders appealed to members’ sense of history, reminding them this was one of the most significant votes, short of war, that they were likely to take.

“There are few moments when we have the opportunity to do so much good with one vote. This is one of those moments,” said Hoyer.

Republicans countered with arguments that the health care plan did little to improve coverage or affordability.

“Astoundingly, Democrats are bringing to the floor a bill today that will not reduce the costs of health insurance; it will grow the size of government,” said GOP Conference Chairman Mike Pence, R-Ind.

The bill may have gotten a boost from a deal to bar coverage by government-subsidized insurance policies of elective abortions.

As originally written, the measure would have required insurers to separate public and private money, so that only private funds could be used for elective abortions. Abortion opponents were concerned that such a policy would effectively expand the government’s role in improving access to abortion, and as many as 40 Democrats threatened to withhold support from the health care bill unless changes were made.

After tense negotiations Friday night – with White House officials and representatives of the U.S. Conference of Catholic Bishops as well as key Democratic members of Congress – House Democratic leaders agreed to allow a vote Saturday on sweeping changes to the abortion provision.

The measure was approved, 240-194, as 64 Democrats joined 176 Republicans to back the change.

The change would permit abortion coverage for people receiving federal aid for their insurance only in the case of rape or incest or when the mother’s life is endangered, consistent with a 1970s-era federal law governing public funding of abortion. Under the new provision, only people buying private insurance with their own funds would have an elective abortion covered.

Many abortion rights advocates were angry, and the brief debate often pitted Democrat against Democrat. “This amendment is government interference in the decision between a woman and her physician,” said Rep. Lois Capps, D-Calif. “Unnecessary and reprehensible,” added Rep. Nita Lowey, D-N.Y.

“Today we’re on the brink of passing health care reform that honors and respects life in every state,” countered Rep. Brad Ellsworth, D-Ind.

Republicans tried throughout the day to create more doubt and delay, shouting objections to routine parliamentary requests by objecting when Democratic women tried to discuss their concerns on the House floor.

GOP members then pushed their own plan, which would make it easier for small businesses to band together to purchase competitively priced coverage, allow consumers to buy policies across state lines, and effect strong medical malpractice reforms.

It was easily defeated on a largely party line vote, 258-176.

In the Senate, where moderates’ concerns have stalled progress, Democratic leaders are hoping for a debate and vote before the end of the year.

“My vote is not an endorsement of all the provisions of the bill, because I find much of the bill to be deeply flawed,” said Rep. Jim Cooper, D-Tenn., a Blue Dog who backed the measure. “My reason for voting ‘yes’ is to advance the cause … by forcing the Senate to act.”

10 ways the House bill would change health care

1 Creates a government-run “public option” to offer coverage.

2 Sets up insurance “exchanges” where consumers can easily compare plans.

3 Requires nearly everyone to obtain health insurance by 2013.

4 Requires health plans to allow children to remain on parents’ policies until their 27th birthday.

5 Provides federal financial help for lower- and middle-income consumers to obtain coverage.

6 Bars insurers from denying or limiting coverage because of pre-existing conditions.

7 Bars insurers from imposing lifetime limits on coverage.

8 Expands Medicaid coverage.

9 Imposes 5.4 percent surcharge on adjusted gross incomes of more than $500,000 for individuals and $1 million for joint filers.

10 Imposes penalties on people and businesses who fail to comply.

McClatchy-Tribune

Critics call for faster, bolder initiatives
by Neil Irwin And Michael A. Fletcher
Washington Post

WASHINGTON – The jump in the unemployment rate to 10.2 percent, reported Friday, suggests that the job market could take longer than expected to recover and deepens the pressure on President Barack Obama to come up with more immediate solutions.

The jobless rate crossed into double digits last month, from 9.8 percent in September, the Labor Department reported. That is the highest level since 1983 and evidence that the economy, though expanding, has not yet grown enough to end the brutal conditions facing American workers.

A broader measure of joblessness that includes people working part time for lack of full-time positions and those who have given up looking for work out of frustration rose to 17.5 percent from 17 percent.

Economists have been projecting that job growth would resume early in 2010, and the unemployment rate would start coming down by the middle of the year. But that forecast is in doubt because job losses in the last few months are only decelerating very slowly. Typically after a recession, the jobless rate keeps increasing for a few months, but at a more gradual rate. That tapering off hasn’t happened yet.

“This is the worst labor market most of us have ever seen,” said Scott Anderson, senior economist at Wells Fargo.

Even the good news in the report wasn’t all that good: Employers slashed 190,000 jobs in the month, the sort of cuts found in a run-of-the-mill recession. That figure seems encouraging only when compared to job losses that ran at several times that rate earlier in the year.

The weak numbers confront the Obama administration with a difficult situation. The economy grew at a 3.5 percent rate in the third quarter, as measured by gross domestic product, and the president and his advisers have presented this as evidence that their policies to arrest the downturn are working.

But 15.7 million Americans were unemployed last month. And in mid-October, a majority of adults viewed Obama’s policies as either making the economy either worse (22 percent) or having no effect (35 percent), according to a Washington Post-ABC News poll.

The administration is pursuing policies that, while less ambitious than the $787 billion stimulus package passed in February, provide targeted help for the economy. On Friday, Obama signed legislation that extends unemployment insurance benefits for up to 20 weeks more and renews an $8,000 tax credit for first-time homebuyers while expanding eligibility.

But rather than offering a short-term fix for joblessness, the White House is now more focused on a longer-term strategy for fueling the economic recovery. Speaking in the Rose Garden on Friday, Obama said his economic advisers are weighing additional measures to create jobs, including new infrastructure spending, renovations to make buildings more energy efficient, and additional support for U.S. exports.

Private economists said those initiatives are likely to have little immediate effect. “The impact will be pretty minimal,” said Dean Baker, co-director of the Center for Economic and Policy Research. “They are good things to do. We should be spending more money weatherizing. It will employ some people.”

Critics, especially on the left, are calling on the president to move faster and take initiatives that pay off sooner.

“Every day, it becomes more urgent that the federal government step up to the plate with bold actions to boost job creation,” said Richard Trumka, president of the AFL-CIO. “Those actions should include urgently needed fiscal relief to state and local governments, community jobs programs, additional investments in infrastructure and green jobs and credit relief to small and medium-sized businesses.”

Associated Press

OLYMPIA – Washington voters have approved the state’s new “everything but marriage” law, expanding rights for domestic partners and marking the first time any state’s voters have approved a gay equality measure at the ballot box.

With about 72 percent of the expected vote counted Thursday in unofficial returns, Referendum 71 was leading 52 percent to 48 percent, with a margin of about 60,000 votes.

Sen. Ed Murray, a Seattle Democrat who spearheaded the law, called it “a great step forward for equality in Washington state.”

The measure asked voters to approve or reject the latest expansion of the state’s domestic partnership law, granting registered domestic partners additional state rights previously given only to married couples.

Full-fledged gay marriage is still not allowed under Washington law.

Gary Randall of Protect Marriage Washington, which opposed the law and pushed to get the referendum on the ballot, said they weren’t ready to concede.

“We’re just going to wait and watch it play out,” he said.

Two national gay rights groups – the National Gay and Lesbian Task Force and the Family Equality Council – say that voter approval of such a measure was a first. Gay equality laws in other states, ranging from civil rights to gay marriage, have either been implemented by the courts or legislative process. Voters have rejected gay marriage 31 states, most recently in Maine, where voters repealed a gay marriage law on Tuesday.

“Our state made history today,” said Anne Levinson, chairwoman of Washington Families Standing Together, which fought to keep the law on the books. “This is a day for which we can all look back with pride.”

The expanded law in Washington state adds benefits, such as the right to use sick leave to care for a domestic partner, and rights related to adoption, child custody and child support.

During the campaign, opponents argued the law is a stepping-stone to gay marriage. Gay rights activists countered that while the marriage debate was for another day, same-sex couples need additional legal protections and rights in the meantime.

The law will take effect Dec. 3, according to the secretary of state’s office.

The underlying domestic partnership law, which the Legislature passed in 2007, provided hospital visitation rights, the ability to authorize autopsies and organ donations, and inheritance rights when there is no will.

Last year, lawmakers expanded the law to give domestic partners standing under laws covering probate and trusts, community property and guardianship.

By Chris Jordan
November 5, 2009

Last week, Senate Majority Leader Harry Reid surprised political observers everywhere with his announcement that the Senate’s health-reform bill would include a public-insurance option.

Despite polls showing strong public support for the proposal, TV pundits declared the public option dead due to a lack of support among moderate democrats.

Why would these democrats be so antsy about an idea that was backed by strong majority of voters? Insurance companies have been fighting the public option tooth-and-nail and have been lining the pockets of politicians in the process.

Take for example, Sen. Max Baucus, chairman of the Finance Committee. He almost single-handedly killed the public option when his influential committee passed a bill replacing it with weaker “co-ops.” Not surprisingly, he has received almost $500,000 in campaign contributions from insurance and other health industry lobbyists and their clients.

Baucus may well be a totally honest guy who simply ignores these hundreds of thousands of dollars when deciding how to vote. It’s possible.

But examples like this help explain Congress’ recent approval rating of 21 percent. While giant corporations shell out millions in lobbying and campaign contributions, average citizens feel ignored. Congressmen and -women, in order to win re-election, spend enormous amounts of time raising money when that time should be spent at town halls getting input from the people they represent.

In order to end special interest dominance of our political process, it’s time Americans consider public financing of federal campaigns.

No existing reform laws have changed the fundamental reality that politicians rely on big donors and spend far too much time raising funds for the next election. One practical solution is the optional Clean Elections system being used in Maine and Arizona.

Under this system, candidates who gather a sufficient number of small contributions from citizens in their district qualify for a grant of public funds to run their campaign. Instead of spending months building connections among wealthy donors, candidates seeking office must go directly to the voters at a grassroots level for support in order to secure funding for their campaigns.

Clean Elections means election outcomes will be increasingly determined by the appeal of a candidate’s message, rather than how much money he or she is able to raise.

One persistent challenge to these sorts of public finance systems has been the Supreme Court. It has ruled that private donations amount to political speech protected by the First Amendment and that “rescue money” provisions are unconstitutional.

Regardless, it’s still possible to set up a public system that is so attractive an option to candidates that it effectively eliminates the incentive for private funding.

Clean Elections has proved to be a successful alternative funding method in Arizona. In 2008, 65 percent of candidates in the state ran as “clean” candidates. While cheaters have occasionally been able to game the system, some tweaks here and there should overcome the issue.

Following the example of Arizona and making improvements over time, Americans should embrace the Clean Elections model as superior to one dominated by the wealthy and special interest groups. Public financing offers great hope of diluting the influence of money in politics and making politicians more connected to their constituents.

Reach columnist Chris Jordan at opinion@dailyuw.com.

By DAVID M. HALBFINGER and IAN URBINA

Republicans swept contests for governor in New Jersey and Virginia on Tuesday as voters went to the polls filled with economic uncertainty, dealing President Obama a setback and building momentum for a Republican comeback attempt in next year’s midterm Congressional elections.

But in a closely watched Congressional race in upstate New York, a Democrat who received a late push from the White House triumphed over a conservative candidate who attracted national backers ranging from Rush Limbaugh to Sarah Palin, the former Alaska governor.

In New Jersey, a former federal prosecutor, Christopher J. Christie, became the first Republican to win statewide in 12 years by vowing to attack the state’s fiscal problems with the same aggressiveness he used to lock up corrupt politicians.

He overcame a huge Democratic voter advantage and a relentless barrage of negative commercials to defeat Jon S. Corzine, an unpopular incumbent who outspent him by more than two to one and drew heavily on political help from the White House, including three visits to the state from President Obama.

“We are in a crisis; the times are extraordinarily difficult, but I stand here tonight full of hope for the future,” said Mr. Christie, 47, who will become New Jersey’s 55th governor. “Tomorrow begins the task of fixing a broken state.”

Mr. Corzine, 62, who entered politics a decade ago after a career at Goldman Sachs, conceded at 10:55 p.m. “It has been quite a journey,” he said. “There’s a bright future ahead for New Jersey if we stay focused on people’s lives, and I’m telling you, I’m going to do that for the rest of my life.”

With 98 percent of precincts reporting, Mr. Christie had 49 percent of the vote, Mr. Corzine 44 percent.

In Virginia, where Mr. Obama was the first Democratic presidential nominee to carry the state since 1964, Robert F. McDonnell, a Republican and former state attorney general, rolled to victory over R. Creigh Deeds, a veteran state senator.

With 99 percent of precincts reporting, Mr. McDonnell had 59 percent and Mr. Deeds 41 percent. Mr. McDonnell’s victory, along with Republican victories in the races for attorney general and lieutenant governor, ended eight years of Democratic control in Richmond.

In New York’s 23rd Congressional District, Douglas L. Hoffman, a little known accountant running on the Conservative Party line, conceded after midnight to his Democratic rival, Bill Owens, after driving a moderate Republican from the race.

The three races marked the first major elections since the country plunged into the worst recession in decades, and basic economic issues — job losses, foreclosures, taxes — were front and center.

In Virginia, Mr. McDonnell, avoided divisive social issues, concentrating instead on his plans to create jobs, improve the economy and fix the state’s transportation problems.

In New Jersey, Mr. Christie held Mr. Corzine, a onetime Goldman Sachs chief executive, accountable for rising unemployment, persistent budget deficits, and his failure to gain control over skyrocketing property taxes, the nation’s highest. Voters embraced Mr. Christie even though he offered little detail about how he would fix the state’s chronic financial problems and instead appealed to voters hungry for change.

Voters in both states remained strongly supportive of President Obama, exit polls conducted by Edison Research showed, though they said that was not a factor in their decisions. But independent voters, who in New Jersey favored the president in 2008 and in Virginia split between Mr. Obama and John McCain, delivered strong margins for both Mr. Christie and Mr. McDonnell, the surveys showed.

In New Jersey, a sprawling corruption case begun by Mr. Christie, which culminated in July with the arrests of dozens of politicians and others, appeared to have taken its toll on the Democratic get-out-the-vote machinery. In Hudson County, a party bastion where a number of Democratic officials were charged, only 39 percent of registered voters cast their ballots, county officials said.

The races in New Jersey, Virginia and New York attracted intense interest because they provided the first test of President Obama’s ability to transfer the excitement he unleashed last year to other Democratic candidates.

The White House, to varying degrees, became involved in all three races, worried that defeats would undermine the public’s perceptions of the president’s political clout and his ability to pass major legislation.

With polls of the Virginia race showing Mr. Deeds falling further behind, the White House refrained from an all-out effort on his behalf, though Mr. Obama campaigned with Mr. Deeds twice.

In New York, however, the president’s aides played a pivotal role in helping Mr. Owens over the weekend, engineering a surprise endorsement from the moderate Republican who had abandoned the race under pressure from conservatives.

And in New Jersey, the White House took a firm hand in guiding Mr. Corzine’s re-election campaign, culminating in rallies featuring the president campaigning with the governor in Newark and Camden on Sunday.

The victor in Virginia, Mr. McDonnell, 55, is a social and fiscal conservative, but ran on a more moderate platform that appealed to voters in the suburbs in Fairfax County, where he was raised. By contrast, Mr. Deeds, 51, had a difficult time introducing himself to densely populated Northern Virginia.

Mr. Deeds sought to portray Mr. McDonnell as a radical conservative by publicizing his 20-year-old master’s thesis, which criticized working women and single mothers. But polls showed voters found Mr. Deeds’s commercials too negative.

The New York race emerged in the national spotlight after President Obama appointed the district’s long-serving congressman, John M. McHugh, a Republican, as secretary of the Army. Almost immediately after local Republican leaders chose Dede Scozzafava, a supporter of gay rights and abortion rights who embraced the federal stimulus package, she came under attack by conservatives as heretical.

Leading conservative voices lined up behind Mr. Hoffman, of Lake Placid, and opponents of same-sex marriage and abortion flooded the district with volunteers from across the country.

In the final days of the campaign, Ms. Scozzafava stunned her party by withdrawing from the race and then backing Mr. Owens. Vice President Joseph R. Biden Jr. traveled to Watertown on Monday to rally Democrats and disgruntled Republicans, but the event drew only about 200 people.

In New Jersey, Mr. Christie attacked Mr. Corzine’s economic leadership, saying he had driven jobs and residents from the state. The governor countered that Mr. Christie offered no viable plan for digging New Jersey out of its enormous financial hole.

Christopher J. Daggett, a former state and federal environmental official, made a splash with a plan to cut property taxes and a strong debate performance, but was hobbled by weak fund-raising. After reaching 20 percent in one public-opinion poll, he failed to break out of the double digits.

New Jersey was a deep-blue state, and Mr. Obama’s election boosted Democratic registration, giving the party a 700,000-vote advantage. Mr. Corzine assailed Mr. Christie, who was named United States attorney by President George W. Bush in 2001, as a philosophical clone of Mr. Bush.

The White House, viewing New Jersey as its best hope for victory, poured resources into the race. The president’s pollster overhauled the campaign’s message, White House aides reviewed Corzine commercials and attended strategy sessions, and cabinet officials lined up to appear at Mr. Corzine’s side.

But Mr. Corzine’s abiding unpopularity — his highest approval rating followed his 2007 car accident and was chalked up to pity — suggested that even “Obama surge” voters who voted for the first time last year could not tilt the outcome in the governor’s favor.

No issue loomed larger in New Jersey than the economy, which Mr. Corzine assured residents in January ranked as his No. 1, 2 and 3 priorities. But Mr. Christie never wavered from a simple strategy: making the vote a referendum on Mr. Corzine and highlighting how his supposed Wall Street financial skills had been a bust for the state.

David Kocieniewski and Nate Schweber contributed reporting.

By DAVID W. CHEN and MICHAEL BARBARO

Mayor Michael R. Bloomberg pulled out a narrow re-election victory on Tuesday, as voters angry over his maneuver to undo the city’s term limits law and his extravagant campaign spending provided an unexpected lift to his vastly underfinanced challenger, William C. Thompson Jr.

Unofficial returns showed Mr. Bloomberg with 51 percent and Mr. Thompson with 46 percent. The result will make Mr. Bloomberg only the fourth three-term mayor in the last century.

“Conventional wisdom says historically third terms haven’t been too successful,” the mayor told supporters at the Sheraton New York Hotel in Midtown Manhattan around midnight after a tense night of watching returns. “But we’ve spent the last eight years defying conventional wisdom.”

Still, the margin seemed to startle Mr. Bloomberg’s aides and the city’s political establishment, which had predicted a blowout. Published polls in the days leading up to the election suggested that the mayor would win by as many as 18 percentage points; four years ago, he cruised to re-election with a 20 percent margin.

The billionaire mayor had poured $90 million of his own fortune into the race, a sum without equal in the history of municipal politics that gave him a 14-to-1 advantage in campaign spending.

But the turnout appeared to be on track to be among the lowest in modern New York history as the mayor’s vaunted campaign machinery failed to deliver the surge of supporters his aides had predicted.

“Everybody was shocked,” a Bloomberg aide said.

Mr. Bloomberg had based his third-term campaign largely on the argument that the city has been better run since he ushered in an era of corporate efficiency and nonpartisan leadership at City Hall. He also pointed to his accomplishments in education, crime reduction and public health.

But voters from Park Slope in Brooklyn to Morrisania in the Bronx seemed torn.

While they praised his competence and intelligence, many were put off by what they saw as Mr. Bloomberg’s heavy-handed move to rewrite the law that would have limited him to two consecutive terms, saying it was obviously self-serving. The mayor had previously opposed any undoing of term limits, which voters had approved twice.

“The main reason I didn’t vote for Bloomberg was the term limits,” said Katherine Krase, a 34-year-old professor, voting at her local school in Park Slope.

At the same school, Gerni Oster, 34, said: “I think that Mayor Bloomberg is too egotistical and arrogant for me to vote for at this point.”

Exit polls indicated that 45 percent of voters said that Mr. Bloomberg’s handling of term limits was a factor in their decision not to vote for him, and roughly the same number said the mayor’s spending on the race was an important factor. Nearly 7 of 10 approved of his job performance.

Bill de Blasio and John C. Liu, both Democrats, were elected public advocate and comptroller, respectively.

The results in the mayor’s race are likely to be personally bruising to Mr. Bloomberg, a man of no small ego who told the public last fall that his financial acumen made him uniquely qualified to pull the city out of a deep economic funk.

Already, Democrats seemed emboldened by the outcome.

“We learned tonight that people do not forget easily,” said Representative Anthony D. Weiner, the Queens Democrat who considered, but then decided against, challenging the mayor. “A lot of people, whether they said it to pollsters or not, were offended by the term limits fight.”

And, addressing a crowd at the New York Hilton in Midtown, Mr. Thompson sounded like a man who was planning another campaign.

“The work we started during this campaign doesn’t end tonight, in fact, it’s just beginning,” he said.

Even those who backed the mayor seemed to do so reluctantly.

Stav Brinbaum, 37, a Web producer from Prospect Heights, Brooklyn, described his own vote for the mayor as “unfortunate.”

“I feel he bought himself the election,” Mr. Brinbaum said, and “ran a smear campaign against a nonexistent opponent.” But, he added, “He’s doing a really good job.”

“If there were somebody stronger running against him, I would have happily voted for them,” said Paul Ranson, 56, a designer also from Prospect Heights. “But there’s not, so I unhappily voted for Bloomberg.”

Mr. Bloomberg’s campaign managers prided themselves on the their communications strategy, which flooded mailboxes, e-mail inboxes and television screens.

But for some on the receiving end, it was just too much. Ken Ficara, 40, a Web developer from the same neighborhood, remained undecided until the day before the election, when he received six automated telephone calls from the Bloomberg campaign.

He updated his Facebook page, writing: “Mike, the more you call me, the less likely I am to vote for you.”

Still, according to exit polls, Mr. Bloomberg tapped into his historic sources of strength: Staten Island and Queens backed him by comfortable margins, as did Jews, white Catholics and those earning more than $200,000.

Mr. Thompson did best in the Bronx, and ran even with Mr. Bloomberg among voters aged 18 to 29.

Though he drew 46 percent of the vote, residents expressed striking unfamiliarity with him, even after a yearlong campaign.

The son a prominent judge, and a product of the Brooklyn Democratic machine, Mr. Thompson seemed to run a conventional municipal campaign designed for a previous decade, and rarely radiated political hunger. Those who backed the mayor pointed to the qualities that first won them over eight years ago, as he moved from the financial services empire he founded, Bloomberg L.P., to elective office: independence from campaign donors and a no-nonsense management style.

“I thing he’s doing a good job,” Luke Geissbuhler, 39, a cinematographer in Prospect Heights in Brooklyn, said. “It gives me great comfort that he’s less prone to be corrupt by way of his wealth.”

A little more than a year ago, the mayoral field was crowded with ambitious Democrats from City Hall to Congress. But once Mr. Bloomberg engineered the bid to overturn term limits, only Mr. Thompson remained, and for that act of political grit, he earned admiration, though not much public support, from the Democratic establishment.

Yet Mr. Thompson struggled to raise money, pulling in less than $6 million, and failed to communicate his central critique of the mayor: That Mr. Bloomberg had circumvented the will of the voters, who twice approved term limits, and ignored the welfare of working-class New Yorkers, favoring his wealthy friends and developers.

But Mr. Bloomberg was often more adept at framing the debate. He put Mr. Thompson on the defensive early on, challenging his record at the Board of Education and at the comptroller’s office. But what some voters seemed to really remember from the campaign was his spending; the mayor poured some $15,000 an hour into the race in the final months.

“The Yankees buy pennants and we buy mayoralties,” said Mr. Ficara, the Web developer from Prospect Heights.

Reporting was contributed by Flora Fair, Joel Stonington, Mathew R. Warren and Karen Zraick.

by Cal Thomas
The Spokesman-Review

Does the U.S. Constitution stand for anything in an era of government excess? Can that founding document, which is supposed to restrain the power and reach of a centralized federal government, slow down the juggernaut of czars, health insurance overhaul and anything else this administration and Congress wish to do that is not in the Constitution?

The Framers created a limited government, thus ensuring individuals would have the opportunity to become all that their talents and persistence would allow. The Left has put aside the original Constitution in favor of a “living document” that they believe allows them to do whatever they want and demand more tax dollars with which to do it.

Can they be stopped? Some constitutional scholars think the Tenth Amendment offers the best opportunity. The Tenth Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

In 1939, the Supreme Court began to dilute constitutional language so that it became open to broader interpretation. Rob Natelson, professor of Constitutional Law and Legal History at the University of Montana, has written that even before Franklin Roosevelt’s court-packing scheme, it was changing the way the Constitution was interpreted, especially “how the commerce and taxing powers were turned upside-down, the necessary and proper clauses and incidental powers, the false claim that the Supreme Court is conservative, how bad precedent leads to more bad court rulings, state elections as critical for constitutional activists, and more.”

While during the past seven decades the court has tolerated the federal welfare state, Natelson says it has never, except in wartime, “authorized an expansion of the federal scope quite as large as what is being proposed now. And in recent years, both the Court and individual justices – even ‘liberal’ justices – have said repeatedly that there are boundaries beyond which Congress may not go.” … “Chief Justice John Marshall once wrote that if Congress were to use its legitimate powers as a ‘pretext’ for assuming an unauthorized power, ‘it would become the painful duty’ of the Court ‘to say that such an act was not the law of the land.’ ”

It would be nice to know now what those boundaries are and whether Congress is exceeding its powers as it prepares to alter one-sixth of our economy and change how we access health insurance and health care.

Natelson makes a fascinating argument in his essay, “Is ObamaCare Constitutional?” (www.tenthamend mentcenter.com/2009/08/18/is-obama care-constitutional), using the court’s Roe v. Wade ruling in 1973. In Roe, he writes, the court struck down state abortion laws that “intruded into the doctor-patient relationship. But the intrusion invalidated in Roe was insignificant compared to the massive intervention contemplated by schemes such as HB3200. ‘Global budgeting’ and ‘single-payer’ plans go even further, and seem clearly to violate the Supreme Court’s Substantive Due Process rules.”

Constitutional attorney John Whitehead, president of the Rutherford Institute, tells me, “Although the states surrendered many of their powers to the new federal government, they retained a residuary and inviolable sovereignty that is reflected throughout the Constitution’s text. The Framers rejected the concept of a central government that would act upon and through the states, and instead designed a system in which the state and federal governments would exercise concurrent authority over the people. The court’s jurisprudence makes clear that the federal government may not compel the states to enact or administer a federal regulatory program.”

Lawyers are busy writing language only they can understand that seeks to circumvent the intentions of the Founders. But it will be difficult to circumvent the last four words of the Tenth Amendment, which state unambiguously where ultimate power lies: “… or to the people.”

Americans who believe their government should not be a giant ATM, dispensing money and benefits to people who have not earned them, and who want their country returned to its founding principles, must now exercise that power before it is taken from them. The Tenth Amendment is one place to begin. The streets are another. It worked for the Left.

Cal Thomas is a columnist for Tribune Media Services.

Boehner says House version based on four principles
by David Lightman
McClatchy

WASHINGTON – Small businesses would have an easier time banding together to offer insurance to employees. Consumers could cross state lines to buy coverage. There’d be no big government expansion.

Those are among the ideas that Republicans in the House of Representatives plan to push later this week, as lawmakers expect to begin debating how to overhaul the nation’s health care system.

One longtime favorite Republican proposal apparently will be absent: The Republican plan will contain no tax incentives for consumers who buy insurance individually, said House Minority Leader John Boehner, R-Ohio.

“Cost,” he said, was the reason for the omission.

Chances are that little or none of the Republican plan will become law, since the House has 177 Republicans and 256 Democrats and Democrats control 60 of the Senate’s 100 seats.

The Republican strategy has two missions: Illustrate what the party stands for, and try to demonize and defeat Democratic initiatives.

House Democrats have proposed a 1,990-page bill that includes a government-run insurance plan, or “public option,” that would compete with private insurers. Savings in Medicare and a tax on the wealthy largely would pay for the legislation, which has been estimated to cost a net $894 billion over 10 years. The tax surcharge would apply to adjusted gross incomes of more than $500,000 for individuals and $1 million for joint filers.

Debate on that plan could begin late this week, with final votes late this week or early next week. The Republican plan would be offered as an alternative.

In the House, Republican leaders began mounting an offensive last week built around four key principles, as Boehner outlined Monday:

•Giving states more flexibility to “create their own innovative reforms.”

•Making it easier for employers, individuals and small businesses to set up risk pools.

Under one scenario, a small business that operates in different states could draw customers – and thus pool risks – from all states where it conducts business. Currently, such pools are subject to the rules and regulations of each state, which critics see as burdensome.

Researchers study three decades worth of data
by Lindsey Tanner
Associated Press

CHICAGO – Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say.

The estimate comes from an analysis of 30 years of national data, and it bolsters other recent evidence on the pervasiveness of youngsters at economic risk. It suggests that almost everyone knows a family who has received food stamps, or will in the future, said lead author Mark Rank, a sociologist at Washington University in St. Louis.

“Your neighbor may be using some of these programs, but it’s not the kind of thing people want to talk about,” Rank said.

The analysis was released Monday in the November issue of Archives of Pediatrics and Adolescent Medicine. The authors say it’s a medical issue pediatricians need to be aware of because children on food stamps are at risk for malnutrition and other ills linked with poverty.

“This is a real danger sign that we as a society need to do a lot more to protect children,” Rank said.

Food stamps are a Department of Agriculture program for low-income individuals and families, covering most foods although not prepared hot foods or alcohol. For a family of four to be eligible, their annual take-home pay can’t exceed about $22,000.

According to a USDA report released last month, 28.4 million Americans received food stamps in an average month in 2008, and about half were younger than age 18. The average monthly benefit per household totaled $222.

Rank and Cornell University sociologist Thomas Hirschl studied data from a nationally representative survey of 4,800 American households interviewed annually from 1968 through 1997 by the University of Michigan. About 18,000 adults and children were involved.

Overall, about 49 percent of all children were on food stamps at some point by the age of 20, the analysis found. That includes 90 percent of black children and 37 percent of whites. The analysis didn’t include other ethnic groups.

The time span included typical economic ups and downs, including the early 1980s recession. That means similar portions of children now and in the future will live in families receiving food stamps, although ongoing economic turmoil may increase the numbers, Rank said.

An editorial in the medical journal agreed.

“The current recession is likely to generate for children in the United States the greatest level of material deprivation that we will see in our professional lifetimes,” Stanford pediatrician Dr. Paul Wise wrote.

Wise said the Archives study estimate is believable.

“I find it terribly sad, but not surprising,” Wise said.

James Weill, president of Food Research and Action Center, a Washington-based advocacy group, said the analysis underscores that “there are just very large numbers of people who rely on this program for a month, six months, a year.”

“What I hope comes out of this study is an understanding that food stamp beneficiaries aren’t them – they’re us,” Weill said.

The analysis is in line with other recent research suggesting that more than 40 percent of U.S. children will live in poverty or near-poverty by age 17; and that half will live at some point in a single-parent family. Also, other researchers have estimated that slightly more than half of adults will use food stamps at some point by age 65.

by Alison Boggs and Jim Camden
The Spokesman-Review

Voters seemed wary Tuesday of ballot measures that would cost them money or mandate too much more change.

Kootenai County voters shot down a pair of ballot measures would have increased the sales tax for 10 years to pay for a jail expansion and provide property tax relief.

In Washington, voters turned thumbs down to Initiative 1033, new spending limits on state, county and city governments that elected officials had said were so radical they’d wind up hamstringing services. Voters were narrowly passing Referendum 71, a measure to ratify expanded rights to domestic partnerships, but the final decision might not be known for days.

Spokane city voters were narrowly rejecting a new $33 million bond issue for city fire equipment and stations, but fire officials were trying to remain “cautiously optimistic” that they would gain enough votes in counts in the coming weeks.

There’s no such wait for a proposed change to Spokane’s City Charter: Voters soundly rejected a package of amendments that would have set new rules for wages, workplaces, neighborhood development and environmental protection.

Here’s a rundown of some of the top ballot measures:

Initiative 1033

This was the latest in a long line of attempts by Tim Eyman to put restrictions on government. It tried to attack the ability of the state, counties and cities to spend money, allowing their expenses to go up each year only by a formula that accounts for inflation and population growth. Any money collected above that level would be set aside, and returned the following year as rebates to property taxes.

It drew support from small business coalitions, many Republicans and the populist conservative Tea Party movement. It was blasted by government officials of both political parties in state and local jurisdictions as a dangerous formula in the midst of a recession.

Eyman seemed to acknowledge defeat before the first ballot results were in, e-mailing a copy of his statement to supporters that the campaign was “proud of all our heroic supporters” whatever happened, and listing previous victories at the ballot box. The measure failed decisively in Spokane, Whitman, Garfield and Asotin counties as well as those surrounding the Puget Sound.

Referendum 71

Social conservatives sought to block expanded legal protections for domestic partnerships that the Legislature approved last spring for same-sex couples and seniors who want to live together without getting married. Those rights were labeled “everything but marriage” in the legislation, but opponents said it essentially allows marriage for same-sex couples.

Approving the referendum meant allowing the law to go into effect, while rejecting the referendum rejected the changes.

Supporters of R-71 raised more than $2 million, which fueled a television ad blitz in the month before the election. Opponents of the measure, who had put it on the ballot, raised about $275,000, and concentrated on yard signs and mailings.

The measure was narrowly passing at press time, but sharply dividing the state. Most counties around the Puget Sound were approving the measure, while the remainder of the state’s counties were heavily rejecting it.

Spokane Proposition 4

Named the Community Bill of Rights by supporters, this proposal offered voters the chance to add nine amendments to the Spokane City Charter. It was drafted in a series of meetings sponsored by Envision Spokane with neighborhood groups, labor unions and environmental organizations, and fine tuned through town hall style meetings.

But the breadth of the amendments, which either had to be approved or rejected as a group, prompted criticism from city officials and business organizations. They said it could saddle the city with costs of guaranteeing health care or make businesses uncompetitive. Most of all, they said, it would spawn lawsuits because many of the concepts were untested.

It failed, nearly 3-to-1 in votes counted Tuesday.

“We think the voters of Spokane realized this is a bad idea,” Brian Murray, a campaign manager for one of the opposition groups, said Tuesday night. Spokane Mayor Mary Verner and business leaders have said they’d be willing to sit down with Envision Spokane to discuss other ways to accomplish some of their goals, he added.

But Brad Read of Envision Spokane said the outcome wasn’t surprising considering opponents heavily outspent them and used dire predictions like “Spokane would cease to exist” if the measure passed. Whether the group would accept an offer to discuss other ways to make changes is unclear, Read added, and there is some skepticism that opponents are willing to negotiate seriously.

Spokane Proposition 1

City voters were also asked to approve a $33 million bond issue for new fire engines, equipment and stations. The 10-year bond issue would cost a homeowner $27 for every $100,000 of assessed value of property; it’s designed to replace a bond issue passed in 1999, but raises the cost by about $10 per $100,000. It needed a 60 percent supermajority, and in Tuesday’s tally had collected only 58.6 percent.

Assistant Chief Brian Schaeffer said supporters hoped to close the gap in upcoming ballot counts. If that doesn’t work, the Fire Department will try again, but not before meeting with voters and asking them if the department should take a different direction.

David G. Savage / Los Angeles Times September 10, 2009

WASHINGTON – The Supreme Court’s conservative bloc sounded poised Wednesday to strike down on free speech grounds a 100-year-old ban against corporations spending large amounts of money to elect or defeat congressional and presidential candidates.

If the justices were to issue such a ruling in the next few months, it could reshape American politics, beginning with the congressional campaign in 2010. Big companies and industries – and possibly unions as well – could fund campaign ads to support or defeat members of Congress.

Since 1907, federal law has prohibited corporations from giving money to candidates. And since 1947, corporations and unions have been barred from spending money on their own to urge voters to elect or defeat federal candidates. Corporate executives, as individuals, can contribute money to a corporate political action committee or PAC, but these amounts are relatively modest compared to the funds available to the corporate treasury.
At least 24 states have similar bans on corporate spending in state races.
All those spending limits have come under growing legal attack from conservatives and libertarians who say the government should not be allowed to set limits on campaign spending and electioneering, even when corporate or union money is in play.

Three justices – Antonin Scalia, Anthony Kennedy and Clarence Thomas – have already said they would overrule past decisions that had upheld federal and state restrictions on corporate election spending. Chief Justice John Roberts and Justice Samuel Alito also have said they favor free speech over the campaign funding limits. But they have not yet said whether they would go along and give corporations a free speech right to spend on campaign ads.

That was the issue before the court Wednesday. It was a rare re-argument in a seemingly narrow case of a small nonprofit group called Citizens United. It had produced a video called “Hillary: The Movie,” which was designed to undercut Hillary Rodham Clinton’s 2008 campaign for the presidency. However, it got tied up in a legal battle with the Federal Election Commission.

Because Citizens United is incorporated and received a small amount of corporate money, the group and its movie came under FEC regulation. Any amount of corporate money can trigger regulatory action under the election laws.
In March, the justices debated whether the law should apply to a nonprofit group that produced a campaign-related video. But rather than decide that narrow question, the justices said in June they would focus instead on whether to say that all corporations, like individuals, have a right to spend freely to elect or defeat candidates.

Washington lawyer Ted Olson, the former solicitor general under President George W. Bush, pressed the justices to rule broadly. “Corporations are persons entitled to protection under the First Amendment,” said Olson, who represented Citizens United.

Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis., co-sponsors of the 2002 campaign funding law, were in the courtroom and listened intently to the 90-minute argument. The ruling could strike down part of the McCain-Feingold Act that restricted corporate and union-funded election ads in the months before the election.

The court will meet behind closed doors later this week to vote on the case. A decision could come within a few months.

by Froma Harrop
The Spokesman-Review

Social Security is a glossy piece of paper on which nearly every politician wants to finger-paint an agenda. But Social Security has no need of ornament. It is a very grown-up program. Put some other toy into the political playpen.

Come January, for the first time since 1975, Social Security payments will not be ratcheted upward for inflation. The reason is simple: no inflation.

But now President Barack Obama is pushing Congress to send every senior a $250 check to compensate for … for … for what? For the fact that some Social Security recipients expect a “raise” every year, whether or not it is warranted? They saw a 6 percent hike in their benefits last year. But that was not a “raise.” It was a cost-of-living adjustment to maintain (not increase) the buying power of their monthly checks.

If the president wants to hand out checks to stimulate the economy, why make them age-specific? Money sent to low-income people, whether young or old, would make far more sense. And the still better stimulus is government spending on roads and other worthy projects. That money gets shot right into the economy.

Sending an extra check to Social Security beneficiaries is also about pandering to older voters. But politicians should first ask themselves, “How many other Americans got 6 percent ‘raises’ last year?”

There is another proposal to cut payroll taxes. The plan is foolish and reckless – and has drawn bipartisan support. These taxes pay for Social Security and Medicare. Cutting payroll taxes puts those programs in jeopardy, which is why some liberal economists, such as Robert Reich, should hang their heads in shame for wanting to monkey with them.

On the right, meanwhile, there is growing affection for the idea. First off, many conservatives hold that cutting taxes solves all problems. (That did wonders for the deficit, didn’t it?) Secondly, fooling with payroll taxes could undermine the public’s faith in Social Security by lending ammo to the false charge that the program’s trust fund is all a fraud.

You see, the Social Security taxes now paid by workers and their employers support current beneficiaries. What’s left over goes into the trust fund to be tapped in future years, when a surge in retirees puts pressure on the program. It’s been a conservative talking point that the Social Security trust fund doesn’t exist; the government has spent the money.

Not quite. The Treasury bonds in the trust fund are real IOUs representing real money taken from real workers for more than 25 years. No matter what the federal government did with that borrowed money, it still has to pay it back.

Make the argument, if you must, that the Treasuries sitting in the trust fund’s file cabinets are not like the super-safe government securities traded around the world – that the Treasury doesn’t have to make good on them. The truth is that these special Treasury bonds are different, but they still cannot be defaulted upon without a vote by Congress.

So here’s an assignment for anyone who calls the trust fund’s Treasuries “worthless pieces of paper”: Find me one member of Congress, Republican or Democrat, who vows to vote against Washington’s promise to honor them. I’ll buy lunch.

According to the Social Security trustees’ latest report, payroll taxes will cover all of the retirees’ promised benefits until 2016. After that, the trust fund can make up for any shortfall until 2039. That is 30 years from now. We can worry about Social Security’s finances in 20 years.

You know what children with paint want to do with a clean sheet of paper? They want to mess it up. Social Security is a clean program. Let’s keep it that way.

Froma Harrop is a columnist for the Providence Journal.

By MICHAEL BARBARO and DAVID W. CHEN

Michael R. Bloomberg, the Wall Street mogul whose fortune catapulted him into New York’s City Hall, has set another staggering financial record: He has now spent more of his own money than any other individual in United States history in the pursuit of public office.

Newly released campaign records show the mayor, as of Friday, had spent $85 million on his latest re-election campaign, and is on pace to spend between $110 million and $140 million before the election on Nov. 3.

That means Mr. Bloomberg, in his three bids for mayor, will have easily burned through more than $250 million — the equivalent of what Warner Brothers spent on the latest Harry Potter movie.

The sum easily surpasses what other titans of business have spent to seek state or federal office. New Jersey’s Jon S. Corzine has plunked down a total of $130 million in two races for governor and one for United States Senate. Steve Forbes poured $114 million into his two bids for president. And Ross Perot spent $65 million in his quest for the White House in 1992 and $10 million four years later.

“I have never seen anything like this — it’s off the charts,” said Jennifer A. Steen, a lecturer in political science at Yale who has studied self-financed candidates for the last decade. “He’s in a league of his own.”

Mr. Bloomberg has used his wealth, estimated at $16 billion, to establish what appears to be insurmountable financial dominance in the race.

He has spent at least 14 times what his Democratic rival in the race, William C. Thompson Jr., has: $6 million. A Thompson campaign spokeswoman on Friday called the mayor’s spending “obscene.”

Since late September, the pace of Mr. Bloomberg’s spending has drastically accelerated: He is now sending nearly $1 million a day into the city’s economy. The bulk of the money is devoted to advertising on television, radio and the Web, but much of it bankrol ls a first-class approach to parties, snacks and travel.

The campaign has spent $322,521 on food, $293,953 on transportation, $176,066 on furniture and $39,858 on parking.

His lavish spending has confounded political consultants and campaign finance experts, who said that his popularity with New Yorkers, and his built-in advantages as a two-term incumbent, should be sufficient to win him re-election. (Compare/Contrast this with The Doctrine of Sufficiency – Kautzman)

“The main thing money does is allow you to get name recognition,” said Meredith McGehee, policy director of the Campaign Legal Center, a watchdog group in Washington. “But in this case, with Bloomberg, because he’s so well known, it’s more like, he can do it, so why not?”

With more than 100 employees, his campaign now has a staff larger than 97 percent of all businesses in New York City. And his political operation has become a one-man economic stimulus program, buying $8,892 worth of pizza from Goodfellas Brick Oven Pizza on Staten Island and in the Bronx. The company had suffered a big drop in business since the start of the recession.

“It’s a huge help,” said Marc Cosentino, one of the owners of Goodfellas. “They don’t have to economize like everyone else.”

Squier Knapp Dunn, the media company responsible for the mayor’s television ads, has taken in $48,313,776. While most of that money pays for TV time, media companies typically receive fees of about 15 percent.

“A number of firms are practically living off of this,” said Steve Malanga, a senior fellow at the Manhattan Institute.

The spending has drawn howls of protest from good-government groups and advocates of campaign finance reform. In interviews, several said, angrily, that the mayor’s decisions to rewrite New York City’s term limits law and then spend wildly to secure re-election, have undermined democratic principles.

“Whether Bloomberg wins or loses, the toxic combination of mega-spending and crass use of his office to bypass the voters on term limits will always be a stain on his mayoralty,” said Gene Russianoff, staff attorney for the New York Public Interest Research Group.

“These twin assaults on municipal democracy will undermine his political clout in a third term and sadly fuel public skepticism about elections and elected officials,” Mr. Russianoff said.

A spokesman for Mr. Bloomberg’s campaign, Howard Wolfson, defended the spending, saying, “Voters in this race have a choice between one candidate who is independent and doesn’t take a dime from special interests and another who practices politics as usual.”

Mr. Thompson, a Democrat, has had the unenviable task of trying to raise money in the middle of a deep recession, when many voters already assume that Mr. Bloomberg will prevail. Their lack of enthusiasm for Mr. Thompson’s candidacy was reflected in his latest campaign finance disclosure, which showed he had raised $270,000 over the last three weeks.

While donations came in at a much brisker pace than in the previous three-week reporting period, when he raised $114,000, that is unlikely to make a dent in Mr. Bloomberg’s advantage. Factoring in public matching funds, Mr. Thompson will have $3 million in the final week and a half of the race.

“This is a clear indication that the momentum of the mayoral race continues to shift towards Bill Thompson,” said Mike Murphy, a spokesman for the Thompson campaign.

But Mr. Thompson’s fund-raising still badly trails that of the two last Democrats who lost to Mr. Bloomberg: the former public advocate, Mark Green, and Fernando Ferrer, the former Bronx borough president.

The newly released records show that Mr. Bloomberg is handsomely rewarding top aides who take leaves from their City Hall posts to join the campaign. His first deputy mayor, Patricia E. Harris, is earning about $28,000 a month. It is a healthy raise: At City Hall, she made about $21,000 a month.

The mayor also typically showers the aides with additional bonuses after Election Day.

All that money shows how far Mr. Bloomberg has come, wealth-wise. His campaign spending this year will nearly equal what his boyhood hometown of Medford, Mass., population 55,000, devotes to its annual budget.

by Chris Jordan
October 21, 2009

We’ve got a problem, people.

We’ve got a big, trillion-dollar problem. It’s no secret that our federal budget is in trouble, and “in trouble” is probably an understatement.

The economic crisis has forced the government to spend billions in unforeseen expenditures in order to rescue the financial system from disaster and stimulate the economy. As a result, the budget deficit has skyrocketed.

Recessions suck.

In order to begin to tackle this problem and bring things back into balance, it’s time we raised taxes on the rich. Yep, I said it.

Why, you ask, don’t we just cut unnecessary spending instead of burdening people with new taxes? This is a valid point, but if we’re honest about the scope of the problem, we’re going to need both approaches. We should be raising taxes on those at the top while cutting waste.

Raising taxes can be a touchy subject, especially during tough economic times. Hence, I’ve come armed with statistics.

One of the reasons I believe the rich should pay more is that, in recent history, their incomes have ballooned while the rest of us have been stuck in a rut. Despite increases in worker productivity, middle-class wages have remained stagnant. In fact, according to The Wall Street Journal, since 1970, the average CEO income has increased a whopping 730 percent, while worker income has decreased 13 percent ­­­— all this in 2008 dollars.

This growing disparity is dangerous. When an entire generation of workers is worse off than their parents, the American dream is fundamentally threatened.

Today, our federal income tax rate on the highest bracket is 35 percent. Under Clinton in the 1990s, when CEO incomes doubled, it was 39.6 percent. Is President Obama really a “socialist” for suggesting we return to those 1990s levels? A little historical perspective ought to clear things up.

It might shock you that between 1932 and 1981, income tax rates on the highest tax bracket fluctuated between an astonishingly high 63 percent and 92 percent. President Dwight Eisenhower, a Republican, oversaw the highest income tax rates in history and opposed efforts to lower them.

Evan Adam Smith, philosophical father of the free-market system and author of Wealth of Nations, argued for progressive taxation. In that very book, he stated, “It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

I am not one who believes the rich to be bad or evil. Clearly, executives who would give themselves outrageous bonuses using taxpayer money lack a sound, moral conscience, but I don’t believe they are the norm. Many wealthy Americans are hard working and brilliant people, who deserve to enjoy the fruits of their labor.

But getting rich is not a one-way street. You don’t become wealthy in a vacuum. You live in a country that supports free enterprise, protects your property rights, allows your wealth to be passed down from generations, and invests in the infrastructure and education that makes this economy, and thus your wealth, possible.

To say the rich owe nothing back to society is absurd. They benefit the most from our system and should, hence, pay the most to ensure its continued strength.

Estimates are that restoring tax rates on the wealthy to levels from the 1990s could generate roughly $400 billion in revenue over 10 years.

I am by no means advocating a return to the days of 92 percent, but increasing that top bracket rate by a couple percentage points could go a long way towards getting our budget crisis under control.

Reach columnist Chris Jordan at opinion@dailyuw.com.

by Cal Thomas
The Spokesman-Review

“That’s just the way it is. Some things will never change …” (Bruce Hornsby song lyric)

The Washington Post headline sounds as if a comedy writer, or someone fluent in George Orwell’s “Newspeak” wrote it: “Record-High Deficit May Dash Big Plans,” it said.

As if a contributing factor to the projected record-high deficit of $1.4 trillion has nothing to do with big spending by this and previous administrations. Is there no end? Will we ever reach a limit where government says, “no more, we’ve done enough; you’re on your own now”? Apparently not. The “greatest generation” mostly lived within their means. They knew what it meant to go without all but essentials. Today, we think the sky is the limit when it comes to spending and that if we can conceive it, then we are entitled to it.

This is partly because of how dysfunctional Washington has become and partly due to our own sense of “what we are owed.” Government can spend, tax and do whatever it wishes. If you oppose what it does, you are a selfish, greedy, rich elitist who cares nothing about people less fortunate than yourself. But wait. Did we have fewer poor people before government stepped in to “cure” poverty? Do we have fewer now? We aren’t sure if the war in Afghanistan can be won, but we know the war on poverty was lost. Once, the prospect of an empty stomach motivated most people to get up and start chasing opportunity. Today, people can do whatever they want and government will bail them out with a welfare check (for the poor) or a corporate welfare check (for the rich). Bad decisions? No problem. Failure is no longer an option.

Thomas, you are such a racist and an uncaring person. You’ve been lucky and should have to pony up for the less fortunate.

How about showing the “less fortunate” the way to become fortunate? Does anyone hear a politician in either party encouraging people to do for themselves, instead of relying on government? And that goes for big corporations, too.

People who play by the rules, stay in school, refuse to take drugs, marry before having children, and stay married, are no longer considered worthy role models by government, which has no intention of making them the norm. These norms have disappeared in a cloud of diversity and political correctness. Government now proposes to transform health insurance and tax responsible citizens at increased rates to pay for the votes, uh, benefits of others who are more content to take slices of other people’s pies rather than learn to bake their own.

If you have been an honest businessperson and give money to your church and charities to help others who want to succeed but are having difficulty doing so through no fault of their own, that no longer matters. In fact, government proposes to reduce the deductibility of your charitable giving because government sees itself as more capable of charity than you.

That’s what the Obama administration’s proposal to send a $250 check to every senior citizen is about. Seniors won’t get a cost of living adjustment in their Social Security checks next year because the cost of living hasn’t gone up. But because seniors have become accustomed to an annual raise, the president apparently thinks by giving it to them anyway, he can buy their support for health care legislation that is not in their interest.

Washington’s attitude toward those who make right decisions for themselves so as not to become a burden to government seems to be, “Good for you, but because you made all those right decisions (‘right’ being a relative term, so the government will say they were right FOR YOU), we will penalize your decisions and your success and take the money you earned and give it to others who didn’t earn it because we want their votes so we can preserve our political careers.”

“Well they passed a law in ’64,

To give those who ain’t got a little more,

But it only goes so far.”

For government, it’s never far enough.

Cal Thomas is a columnist for Tribune Media Services.
Get more news and information at Spokesman.com

CLEAR MAJORITY NOW BACKS PLAN
Americans still divided on overall packages

By Dan Balz and Jon Cohen
Washington Post Staff Writer
Tuesday, October 20, 2009

A new Washington Post-ABC News poll shows that support for a government-run health-care plan to compete with private insurers has rebounded from its summertime lows and wins clear majority support from the public.

Americans remain sharply divided about the overall packages moving closer to votes in Congress and President Obama’s leadership on the issue, reflecting the partisan battle that has raged for months over the administration’s top legislative priority. But sizable majorities back two key and controversial provisions: both the so-called public option and a new mandate that would require all Americans to carry health insurance.

Independents and senior citizens, two groups crucial to the debate, have warmed to the idea of a public option, and are particularly supportive if it would be administered by the states and limited to those without access to affordable private coverage.

But in a sign of the fragile coalition politics that influence the negotiations in Congress, Obama’s approval ratings on health-care reform are slipping among his fellow Democrats even as they are solidifying among independents and seniors. Among Democrats, strong approval of his handling of the issue has dropped 15 percentage points since mid-September.

These numbers underscore the challenges ahead for the president and Democratic leaders in Congress as they attempt to maintain support among liberals and moderates in their own party while continuing to win over at least a few Republican lawmakers.

Overall, 45 percent of Americans favor the broad outlines of the proposals now moving in Congress, while 48 percent are opposed, about the same division that existed in August, at the height of angry town hall meetings over health-care reform. Seven in 10 Democrats back the plan, while almost nine in 10 Republicans oppose it. Independents divide 52 percent against, 42 percent in favor of the legislation.

There are also deep splits in the new poll over whether the proposed changes would go too far or not far enough in expanding coverage and controlling costs. Twice as many see the plan as leaning toward too much government involvement, but since last month there has been a nine-point increase in the number who say government should be more involved.

On the issue that has been perhaps the most pronounced flash point in the national debate, 57 percent of all Americans now favor a public insurance option, while 40 percent oppose it. Support has risen since mid-August, when a bare majority, 52 percent, said they favored it. (In a June Post-ABC poll, support was 62 percent.)

If a public plan were run by the states and available only to those who lack affordable private options, support for it jumps to 76 percent. Under those circumstances, even a majority of Republicans, 56 percent, would be in favor of it, about double their level of support without such a limitation.

Fifty-six percent of those polled back a provision mandating that all Americans buy insurance, either through their employers or on their own or through Medicare or Medicaid. That number rises to 71 percent if the government were to provide subsidies for many lower-income Americans to help them buy coverage. With those qualifiers, a majority of Republicans say they support the mandate.
The public option

Faced with a basic choice that soon may confront the administration and Democratic congressional leaders, a slim majority of Americans, 51 percent, would prefer a plan that included some form of government insurance for people who cannot get affordable private coverage even if it had no GOP support in Congress. Thirty-seven percent would rather have a bipartisan plan that did not feature a public option. Republicans and Democrats are on opposite sides of this question, while independents prefer a bill that includes a public option but does not have Republican support, by 52 percent to 35 percent.

But if there is clear majority support for the public option and the mandate, there is broad opposition to one of the major mechanisms proposed to pay for the bill. The Senate Finance Committee suggested taxing the most costly private insurance plans to help offset the costs of extending coverage to millions more people. Sixty-one percent oppose the idea, while 35 percent favor it.

Nearly seven in 10 say they think that any health-care measure would increase the federal budget deficit, a possible concern for Obama. But nearly half of those who see the legislation as growing the deficit also say the increase would be “worth it.”

Concerns about the implications for Medicare continue to cloud the debate. More than twice as many Americans (43 percent to 18 percent) say they think the legislation would weaken Medicare. Despite the dip in opposition to a health-care overhaul among seniors, most, 51 percent, still think reform would hurt the popular program.

Overall, 57 percent approve of the way Obama is handling his job as president and 40 percent disapprove. While those numbers have moved only marginally over the past few months, here, too, are fresh signs of restiveness among the party faithful: “Strong approval” among liberal Democrats is down 16 percentage points over the past month.

On the economy, 50 percent approve of Obama’s efforts, while 48 percent disapprove.

The president receives better marks from all Americans for his handling of international affairs and his performance as commander in chief (57 percent approval on each). Slim majorities also approve of how he is dealing the situation with Iran and his winning of the Nobel Peace Prize. A majority disapprove of his work on the federal budget deficit.
Partisan divide

Despite those mixed reviews on domestic priorities, Obama continues to hold a big political advantage over Republicans.

Poll respondents are evenly divided when asked whether they have confidence in Obama to make the right decisions for the country’s future, but just 19 percent express confidence in the Republicans in Congress to do so. Even among Republicans, only 40 percent express confidence in the GOP congressional leadership to make good choices.

Only 20 percent of adults identify themselves as Republicans, little changed in recent months, but still the lowest single number in Post-ABC polls since 1983. Political independents continue to make up the largest group, at 42 percent of respondents; 33 percent call themselves Democrats.

The wide gap in partisan leanings and the lack of confidence in the GOP carries into early assessments of the November 2010 midterm elections: Fifty-one percent say they would back the Democratic candidate in their congressional district if the elections were held now, while 39 percent would vote for the Republican. Independents split 45 percent for the Democrat, 41 percent for the Republican.

The poll was conducted by conventional and cellular telephone from Oct. 15 to 19 among a random sample of 1,004 adults. The margin of sampling error for the full poll is plus or minus three percentage points.

Attorney general says prosecuting such cases ‘will not be a priority’

By Carrie Johnson
Washington Post Staff Writer
Tuesday, October 20, 2009

Attorney General Eric H. Holder Jr. directed federal prosecutors Monday to back away from pursuing cases against medical marijuana patients, signaling a broad policy shift that drug reform advocates interpret as the first step toward legalization of the drug.

The government’s top lawyer said that in 14 states with some provisions for medical marijuana use, federal prosecutors should focus only on cases involving higher-level drug traffickers, money launderers or people who use the state laws as a cover.

The Justice Department’s action came days after the Senate’s second-highest-ranking Democrat introduced a bill that would eradicate a two-decade-old sentencing disparity for people caught with cocaine in rock form instead of powder form. Taken together, experts say, the moves represent an approach favored by President Obama and Vice President Biden to put new emphasis on violent crime and the sale of illicit drugs to children. Legislation that would cover a third administration commitment, to support federal funding of needle exchanges, is moving through the House.

The announcement set off waves of support from advocacy groups that have long sought to relax the enforcement of marijuana laws. But some local police and Republican lawmakers criticized the change, saying it could exacerbate the flow of drug money to Mexican cartels, whose violence has spilled over the Southwestern border.

In a statement, Holder asserted that drug traffickers and people who use firearms will continue to be direct targets of federal prosecutors, but that, on his watch, “it will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana.”

The turnaround could pave the way for Rhode Island, New Mexico and Michigan to put together marijuana-distribution systems for residents of those states, according to Graham Boyd, director of the Drug Law Reform Project at the American Civil Liberties Union. Advocates say marijuana use can help alleviate pain and stimulate appetite in patients suffering from cancer, HIV-AIDS and other ailments. But the American Medical Association since 2001 has held firm to a policy opposing marijuana for medical purposes.

Under the Controlled Substances Act, which is more than three decades old, marijuana remains within the category of drugs most tightly restricted by the government. Donna Lambert, who is awaiting criminal trial in San Diego County Superior Court for allegedly providing medical marijuana to another patient, injected a note of skepticism into Holder’s announcement. In an interview, Lambert noted that senior administration officials had made public comments this year in line with the Justice Department policy, only to have law enforcement agents, including the Drug Enforcement Administration, take part in raids soon afterward.

Ethan Nadelmann, executive director of the Drug Policy Alliance, said he and other advocates will watch closely whether federal agents refuse to participate in raids or send other signals to district attorneys in the states that allow some medical use of marijuana.

Americans for Safe Access, which supports medical marijuana programs nationwide, estimated that during the Bush administration federal authorities conducted 200 raids in California alone. A 2005 U.S. Supreme Court case made clear that the federal government has the discretion to enforce federal drug laws even in states that had approved some relaxation of marijuana statutes for sick patients.

White House press secretary Robert Gibbs, at a daily briefing in Washington, declined to address “what states should do” in response to the Justice Department guidance. But Gibbs said that the president since January had outlined his medical marijuana policy and that the Justice Department memo, signed by Deputy Attorney General David W. Ogden, helped to fill in the details.

The administration stopped far short Monday of endorsing wholesale marijuana legalization, frustrating some activists. At the libertarian Cato Institute, official Tim Lynch described the war on drugs as a “grand failure.” He exhorted the White House to take “much bolder steps to stop the criminalization of drug use more generally.”

In the three-page memo, Ogden made clear that the department is not creating a new legal defense for people who may have violated the Controlled Substances Act. Instead, the memo is intended to guide prosecutors on where to train their scarce investigative resources.

The International Association of Chiefs of Police “strongly believes that the federal government must continue to play a central role in the investigation and prosecution of . . . traffickers, dispensary operators, and growers,” said Meredith Mays, a spokeswoman for the group.

Rep. Lamar Smith (Tex.), the top Republican on the House Judiciary Committee, said the Justice Department guidelines “fly in the face of Supreme Court precedent and undermine federal laws that prohibit the distribution and use of marijuana.”

He added: “We cannot hope to eradicate the drug trade if we do not first address the cash cow for most drug-trafficking organizations — marijuana.”

The cocaine bill is still pending in the Senate, although advocates say its prospects are stronger now than over the past decade. The sponsor, Sen. Richard J. Durbin (D-Ill.), said in an interview last week that he was working to enlist GOP co-sponsors to ease the bill’s passage.

by Gary Crooks
The Spokesman-Review

While heading into work on Friday, I saw a small group on the corner of Second Avenue and Lincoln Street waving signs in opposition to Referendum 71, which would give voter approval to the “everything but marriage” law that was adopted by the Legislature last spring. The law grants to registered same-sex couples the same rights and benefits accorded married couples under state statutes.

Normally, I wouldn’t mind such a political display, but among those holding “Protect Children” placards were children themselves. Do you suppose the kids independently researched the topic before deciding they’d be imperiled if discrimination against same-sex couples were brought to an end? More likely, adults shoved the signs into their hands for emotional appeal. Must be that indoctrination I’ve been hearing about.

The use of children in politics has always bugged me, whether it’s the serene family photos on glossy brochures or those oh-so-cute appearances at political rallies. Then there’s the positioning of children near the lectern to dissuade questions about why politicians were sleeping around. But the anti-Referendum 71 example strikes me as particularly odious, because the signs make it seem like the issue is about child predators and one side is all for them.

The logical leap is that a household with a man and a woman is better for child-rearing. There is no firm empirical evidence of this, but even if there were, there are many socioeconomic factors that determine outcomes for children. Divorce and single parenthood matter. So do income, educational level and the age at which people marry.

So where are the campaigns to prohibit marriage (and the rights that go with it) for those who have low incomes or are under 25 years old or don’t have college degrees? Where are the signs protesting the impending marriages of those who tried it before and failed? There aren’t any, and I wonder why. Isn’t this about the kids?

Mixed message. Speaking of protecting children, a justice of the peace in Hammond, La., is making headlines for refusing to sign a marriage license because the couple is biracial. That’s right, Keith Barnwell turned away the couple because of his concern for their yet-to-be-born children. For one thing, he says, mixed-race couples are more apt to get divorced.

Barnwell says he’s not racist, because he has officiated at many marriages involving African-American men and women. But why would he do that when those couples have an above-average divorce rate? Don’t those kids matter?

Maybe we need to pass a law that prohibits adults from using children as an excuse for their bigotry.

You don’t say. It’s interesting how many arguments against gay marriage were first used to defend state laws that barred mixed-race nuptials. Here’s one:

“We aren’t bigoted,” said the backers of anti-miscegenation laws. “We just worry, what will happen to the children? They’ll be taunted and teased.”

It’s like telling a shoe salesman that size matters. Minorities don’t need a heads-up on the possibilities of bigotry. Neither do gays and lesbians. It’s a truth that’s self-evident.

Follow the balloon. A nation is transfixed. What is it? What keeps it aloft? How high will it go? What if it crashes? What if there’s too much inflation or sudden deflation? What if rescuers can’t get there in time? What if there’s no way to bail out? Who built it? Who approved it? Who could think it would ever be safe?

But enough about the economy, how about that balloon boy?

Smart Bombs is written by Associate Editor Gary Crooks and appears Wednesdays and Sundays on the Opinion page. Crooks can be reached at garyc@spokesman.com or at (509) 459-5026.

By ROBERT PEAR and DAVID M. HERSZENHORN

WASHINGTON — After months of relentless courting and suspense, Senator Olympia J. Snowe, Republican of Maine, cast her vote with Democrats on Tuesday as the Senate Finance Committee approved legislation to remake the health care system and provide coverage to millions of the uninsured.

With Ms. Snowe’s support, the committee backed the $829 billion measure on a vote of 14 to 9, with all the other Republicans opposed.

“Is this bill all that I would want?” Ms. Snowe said. “Far from it. Is it all that it can be? No. But when history calls, history calls. And I happen to think that the consequences of inaction dictate the urgency of Congress to take every opportunity to demonstrate its capacity to solve the monumental issues of our time.”

Ms. Snowe’s remarks silenced the packed committee room, riveted colleagues and thrilled the White House. President Obama had sought her vote, hoping that she would break with Republican leaders and provide at least a veneer of bipartisanship to the bill, which he has declared his top domestic priority.

Mr. Obama, speaking in the Rose Garden, described the committee’s action as “a critical milestone” and declared, “We are now closer than ever before to passing health reform.” But he added: “Now is not the time to pat ourselves on the back. Now is not the time to offer ourselves congratulations. Now is the time to dig in and work even harder to get this done.”

With its vote Tuesday, the Finance Committee became the fifth — and final — Congressional panel to approve a sweeping health care bill. The action will now move to the floors of the House and the Senate, where the health care measures still face significant hurdles.

Aside from Ms. Snowe, no Republicans in Congress have publicly endorsed the bills in their current form. And Republican leaders are strongly opposed, saying the bills cost too much, raise taxes, cut Medicare and dangerously expand federal power.

Pressure from lobbyists is sure to grow in the coming weeks. And many more lawmakers will get involved in what promise to be impassioned and highly politicized debates in the Senate and the House.

After the Finance Committee vote, the chief architect of the bill, Senator Max Baucus, Democrat of Montana and chairman of the committee, declared: “It’s clear that health care reform will pass this year. Our action today provides terrific momentum.”

Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, said the bill put the nation on “a slippery slope toward more and more government control of health care.”

Ms. Snowe helped write the Finance Committee bill, in months of bipartisan negotiations, but had not committed to vote for it. She said Tuesday that she shared many of her Republican colleagues’ reservations about the legislation, and pointedly warned Democrats that they could lose her support later in the legislative process.

“My vote today is my vote today,” she said. “It doesn’t forecast what my vote will be tomorrow.” And she observed, “There are many, many miles to go in this legislative journey.”

Ms. Snowe gave no clue how she would vote in the first few hours of committee deliberations Tuesday and she did not alert the White House to her plans.

While colleagues spoke, she kept her head buried in papers, fidgeted and spoke occasionally with aides. When Mr. Baucus stepped over to speak to her, a small army of photographers snapped pictures, with cameras clicking like a chorus of chirping crickets.

The Congressional Budget Office said the bill would cost $829 billion over 10 years. The costs include $345 billion for the expansion of Medicaid and $461 billion for subsidies to help lower-income people buy insurance.

The budget office said the costs would be completely offset by new fees and taxes and by cutbacks in Medicare, so federal budget deficits in the next 10 years would be $81 billion lower than now projected.

But Douglas W. Elmendorf, director of the Congressional Budget Office, said his agency had not estimated the impact of the bill on overall national health spending, public and private, and could not say whether it would “bend the cost curve,” as Mr. Obama and lawmakers want.

Likewise, Mr. Elmendorf said he did not know for sure how the bill would affect premiums.

Several senators said they would fight for changes on the Senate floor.

Liberal Democrats, like Senator John D. Rockefeller IV of West Virginia, said they would push for a public insurance plan. Senators Ron Wyden of Oregon and Robert Menendez of New Jersey, both Democrats, said they would seek changes to make insurance more affordable to middle-income families. And Senator John Kerry of Massachusetts said he wanted to require employers to provide insurance to their employees.

The bill does not include such an employer mandate. But employers with more than 50 workers would have to reimburse the government for some or all of the cost of federal subsidies provided to employees who buy insurance on their own.

Ms. Snowe said she liked the Finance Committee bill because it would prohibit insurance companies from discriminating against people on account of health status or sex and would create a network of insurance exchanges where individuals, families and small businesses could shop for coverage, with subsidies from the federal government.

At the same time, Ms. Snowe said she shared Republican “concerns about vast governmental bureaucracies and governmental intrusions.” That, she said, is why she had opposed amendments to create a government insurance plan and would continue to do so.

Ms. Snowe said she was open to a compromise under which a public plan could be “triggered” in states where people could not otherwise find affordable insurance. She said her “paramount concern” was that insurance might be too expensive for some people, even with government subsidies.

The Congressional Budget Office said the Finance Committee bill would provide coverage to 29 million people, but still leave 25 million uninsured in 2019. Of those left uncovered, about a third would be illegal immigrants.

David Stout contributed reporting.

Point by point arguments on proposed community bill of rights
by Jonathan Brunt / jonathanb@spokesman.com, (509) 459-5442

Proposition 4 is the most debated and argued, hated and loved, vilified and oversimplified question on November’s ballot.

Supporters say the Community Bill of Rights – Proposition 4 on ballots that will be mailed later this week to voters in the city of Spokane – is an attempt to empower citizens to improve the environment, ensure housing and basic preventive health care, give neighborhoods a say in development projects and create an economy that has good jobs.

Opponents say the proposed amendments to the City Charter were written in a way to ensure constant lawsuits that will more likely halt progress on the goals listed in the proposition and will drive businesses and jobs from the city of Spokane to Spokane Valley or elsewhere.

Below is the wording from each of the nine rights in the Community Bill of Rights and statements from a debate at The Spokesman-Review this week:

Kai Huschke, the campaign manager for Envision Spokane, the group that successfully placed the proposal on the ballot.

Kate McCaslin, a former Spokane County commissioner, representing Jobs & Opportunities Benefiting Spokane, a group formed to oppose the measure.

Right 1

Residents have the right to a locally based economy to ensure local job creation and enhance local business opportunities. The right shall include the right to have local monies reinvested locally by lending institutions, and the right to equal access to capital, credit, contracts, incentives, and services for businesses owned by Spokane residents.

Supporters

The first amendment is about keeping money earned in Spokane in Spokane, Huschke said. That means requiring banks to use money from residents and businesses within city limits only on investments within the city of Spokane.

“If we are going to have a vibrant economy, we have to enhance our local economy,” Huschke said. “In order to do that, we have to make sure that we are treating our local businesses as best we can.”

Opponents

McCaslin said working for a locally based economy is positive, but not through a banking regulation that would create vast accounting headaches and likely lawsuits for lending institutions.

“This basically says people could sue the bank if they felt like those moneys were going outside Spokane,” McCaslin said, adding that banks might simply move outside city limits. “That will cost us jobs.”

Right 2

Residents have the right to affordable preventive health care. For residents otherwise unable to access such care, the City shall guarantee such access by coordinating with area health care providers to create affordable fee-for-service programs within 18 months following adoption of this Charter provision.

Supporters

Huschke said the city’s only duty under this provision is to convene a group of health care providers and to make a good-faith attempt to create the program.

“There is no cost to the city, plain and simple,” he said.

That’s because any administrative costs that might be created if health care providers successfully create a fee-for-service plan would be paid for by the fees, he said. Because most people who are uninsured have a source of income, fees could be charged to cover costs, he said.

“It was very, very critical to the people who formulated this that we didn’t build it such that there would be a cost to taxpayers,” Huschke said.

Opponents

McCaslin argues that the provision could easily be interpreted to mean that the city’s on the hook to provide preventive health care – whether or not the group of health care providers successfully creates the program.

And if a program is created, she said, there’s too much ambiguity about what’s required.

“Maybe what’s affordable to me is way different than what’s affordable to my neighbor, which is way different than is affordable to the neighbor down the street.”

She questioned who would pay for fees charged to patients who couldn’t afford them.

Right 3

Residents have the right to affordable housing, the right to a safely maintained dwelling, and the right to be free from housing discrimination. The City shall ensure the availability of low-income housing stock sufficient to meet the needs of the low-income housing community. People and families may only be denied renting or buying of a dwelling for non-discriminatory reasons and may only be evicted from their residence for non-discriminatory causes.

Supporters

Huschke said the provision could be met by the creation of regulations or incentives so that future housing developments include a certain percentage of low-income housing.

“It’s not about building houses; it’s about making sure that the stock of development is sufficient for the low-income community,” he said.

Opponents

McCaslin said if regulations or incentives fail to create enough low-income housing, the city could be forced into financing construction because it says the city “shall ensure the availability” of housing.

“These words are very specific,” she said. “The city could be on the hook for a lot of money.”

Right 4

Residents have the right to access affordable and renewable energy sources.

Supporters

“This would give residents the ability to actually generate their own energy if need be as well as to make sure that energy access stays affordable and renewable for the citizens of Spokane,” Huschke said. “If we’re going to play our part on a community level we need to have the ability to access renewable energy sources.”

Opponents

McCaslin said the rule likely would result in endless lawsuits.

“I just think that this is so open to interpretation that we are going to spend years and years and years trying to figure out what it means at great cost,” McCaslin said.

Right 5

Ecosystems, including but not limited to, all groundwater systems, surface water systems and aquifers, have the right to exist and flourish. River systems have the right to flow and have water quality necessary to provide habitat for native plants and animals, and to provide clean drinking water. Aquifers have the right to sustainable recharge, flow and water quality.

Supporters

Huschke said current environmental laws are “not giving us the level of protections we need.”

He noted studies that indicate that summertime flow of the Spokane River has fallen significantly in the past century – a development that puts strain on fish populations.

“This ups greater protections both from the pollution standpoint and from the flow standpoint,” he said.

As current law stands, a person concerned about an environmental problem often needs to have a financial interest in order to file a lawsuit, Huschke said.

This provision would do away with that requirement and make it possible for anyone to bring a suit.

Opponents

McCaslin said great improvements to the river and environment have occurred with current regulations and by “people working together.”

“We will all admit there are major issues that we need to address with our river and keep moving forward, but this is not the way to do and, in fact, could bring all of those efforts to a standstill,” McCaslin said.

McCaslin questioned the ability, as defined in the Ninth Amendment, allowing “anyone” to file a challenge.

“It really opens up the potential for vast amounts of litigation because you really don’t have to prove any standing, you just have to be a human to bring a lawsuit.”

Right 6

A neighborhood council may veto a land development project if requested to veto that project by a number of neighborhood registered voters equal to or greater than 15 percent of the total number of votes cast at the last preceding general municipal election within that neighborhood.  … A neighborhood council shall veto a land development project if requested to veto that project by a number of neighborhood registered voters greater than 50 percent of the total number of votes cast at the last preceding general municipal election within that neighborhood.  …

Supporters

Huschke noted that the city already has funded creation of some neighborhood plans, which become part of the city’s comprehensive plan – the city’s long-term growth guide. Continuing those efforts simply puts the city on a path of following through on promises officials made several years ago to craft development plans based on neighborhood input, supporters say.

Some neighborhood leaders have argued that developers’ vast resources and campaign contributions to City Council members unfairly tilt the process in their favor even if rules and zoning don’t favor their proposals. In development controversies in Spokane County, opponents have noted that even when neighbors successfully sued Spokane County for inappropriately approving development, the contested projects were vested under state law and were allowed to move forward even when deemed to have been illegally approved.

“Right now we don’t have the ability to actually uphold our plans on a neighborhood level. This is actually about empowering the residents to be able to do so,” Huschke said. “Until we as residents have the ability to actually call that into question through a legal manner we won’t have the ability to protect the integrity of our neighborhoods as we should.”

Opponents

McCaslin said if a law is approved requiring neighborhood planning, the cost to provide those services will pull from some other city priorities.

Most of the city’s funding for neighborhood plans thus far was paid for with surpluses experienced by the city before the recent recession.

“The point is that in a year like this, it could mean a decision between funding a police officer or a planning staff member,” McCaslin said.

McCaslin said provisions empowering neighborhood councils to veto a development project take away authority from leaders chosen by secret ballot in certified elections.

“We depend upon people who are formally elected through a process that we can trust,” McCaslin said. “It’s not just who shows up at a meeting one night and happens to get elected.”

She noted that the proposal is based on the number of voters who participated in the most recent city election. If turnout was closer to 30 percent, it would only take about 200 signatures in a neighborhood with 4,000 registered voters to give the neighborhood council veto power.

Opponents note that once a neighborhood council would veto a project it’s dead because there’s no provision to reverse course even if a majority of residents in the neighborhood sign a petition in support of the development.

Right 7

Workers have the right to be paid the prevailing wage on all private construction projects exceeding $2 million in construction costs (as annually adjusted for inflation), and all public and publicly subsidized construction projects, within the City of Spokane. Workers have the right to work as apprentices on all private construction projects exceeding $2 million in construction costs (as annually adjusted for inflation), and all public and publicly subsidized construction projects, through programs approved under the Washington State Apprenticeship Training Program, and each contractor and subcontractor building those projects shall be required to use apprentices for a minimum of 15 percent of the total hours worked on each project.

Supporters

Huschke said the rules are about “pay equity” and giving people opportunities to learn skills. They also would result in a better work force, one that is “more loyal, one that has less injuries,” he said.

“If you don’t give them opportunities to actually access jobs … in an apprentice program, you’re actually losing jobs because you don’t have the skill sets we need,” Huschke said.

Opponents

McCaslin said the rules will raise the cost of private construction, perhaps by 20 percent or more. That means, she said, jobs will be lost because some projects won’t move forward, at least not in the city of Spokane.

“I’ll tell you where they’re going to go and it’s not going to be in the city. Jobs will be lost. Property taxes in the future will be lost, and it will end up to be a great detriment to the city.”

Right 8

Workers have the right to employer neutrality when unionizing, and the right to be free from captive audience meetings, or other mandatory, non-work-related meetings, in the workplace.

Supporters

Union leaders have argued that federal law is slanted against unionization because of intimidation from employers, sometimes at “captive-audience” meetings where managers dissuade creation of a labor group.

Huschke said this rule would create an equal playing field.

“It doesn’t mean that employers can’t give their opinion, but they can’t block people from discussing the possibility of unionizing,” he said.

He added that employers could still hold meetings as long as employees aren’t punished for not attending.

“This is about having a freedom of choice,” he said.

Opponents

McCaslin argues that workers’ unionizing rights already are protected under federal law. Envision Spokane’s proposal, she said, would strip employer rights from the process.

“Employers would no longer have that option of talking about why their employees may not want to consider a union, and that is just unfair,” she said. “This alone will cost hundreds, if not thousands of jobs, in the city of Spokane as employers say, ‘You know what? I put everything at risk to have my small business. I do not think it is fair that I should not be able to talk to my employees about these issues,’ and they will simply leave.”

Right 9

All rights recognized by the Community Bill of Rights are fundamental, inalienable and self-executing. The City of Spokane, or any person, neighborhood, or neighborhood council aggrieved by a violation of their rights, or any person seeking to enforce the rights of ecosystems, may enforce these rights. Enforcement actions shall be filed as civil actions in a court of competent jurisdiction, against any person, government or entity violating these rights, and sufficient legal and equitable relief shall be awarded to remedy the violation, including restoration of a damaged ecosystem. In any action to enforce any Charter right, the court may allow the prevailing plaintiff a reasonable attorney’s fee and expert fees. Corporations and other business entities shall not be deemed to possess any legal rights, privileges, powers or protections which would enable those entities to avoid the enforcement of these rights, or which would enable them to nullify these rights.  …

Supporters

Huschke said, in part, the amendment aims to prevent corporations from overpowering the rights of citizens through power and wealth.

He agreed that rights could mean some businesses would leave the city, but those likely would be big-box stores that pay low wages, he said. Locally owned establishments would replace what leaves.

“If you want to continue to bring outside businesses to settle in here, yeah, those jobs are going to be gone, but they’re going to be replaced by a lot better jobs,” he said.

Opponents

McCaslin said it’s easy to vilify big corporations, but small businesses make up the bulk of the local economy and they too would be challenged by the rules and be just as likely to flee Spokane.

“If a community has a regulation that strips you of your rights, why would you ever be here?” she said. “It really undermines our business climate here, our ability to recruit business and frankly our ability to keep businesses here.”

By Chris Jordan
October 7, 2009

Prepare yourself for the shocker of the century…

I am not a fan of George W. Bush.

I know what you’re thinking: Oh, how original. But first, let me explain.

One of the things I remember most vividly about the Bush years was feeling like the United States’ global influence was fading rapidly. We were becoming the hated bully of the world.

Instead of building partnerships and working with our allies, we were essentially alone. Instead of displaying leadership on pressing global issues like climate change, we were constantly at odds with the world.

So far, President Obama has put us on a good path towards progress. He has re-engaged with allies, reached out to Muslims around the world, and made real progress on nuclear arms control.

But the greatest challenge is yet to come. Forging a new global framework for climate-change mitigation will be the goal of the upcoming U.N. Climate Conference in Copenhagen, Denmark.

The Kyoto Protocol is the existing treaty aimed at global greenhouse gas reductions, and it was signed and ratified by every nation on Earth with the exceptions of Iraq, Afghanistan, Somalia, the United States and a tiny handful of others. It is set to expire in 2012. This Copenhagen Conference, set to occur in December, is the next step for humanity in dealing with climate change.

British Prime Minister Gordon Brown recently warned that, “the [Copenhagen] negotiations are proceeding so slowly that a deal is in grave danger.”

Part of the reason behind this stall is the political situation in Washington, D.C.

While world leaders had planned to build on the framework of Kyoto for the new agreement, the United States wants to weaken and change the treaty so it might have a shot at ratification in the U.S. Senate.

According to The Guardian, European leaders worry, “it could take several years to negotiate a replacement framework.”

So why is the Obama administration so uncomfortable with the old Kyoto Protocol?

First of all, in 1997 the Senate passed a bill 95-0 that stated that the United States should not be a signatory to any protocol that did not include binding targets and timetables for developing nations. Democratic climate change legislation passed in the U.S. House of Representatives earlier this year, but only by a tiny margin of 219-212. On the Senate side, where it takes 60 votes to break a filibuster and pass any bill these days, the odds of a bill passing are in serious doubt.

What happens in the United States over the next several months will directly affect the success or failure of world leaders at Copenhagen, and the United States’ global role for years to come.

Without the passage of a climate-change bill in Congress, the United States will never credibly lead the world on this issue, and we will never be able to reduce our national greenhouse gas emissions. Without significant public support at home, the new Copenhagen treaty, if it emerges at all, will never be ratified in the Senate.

The United States has a golden opportunity to restore our global leadership on the most important issue of our time. We cannot let partisanship and division in Washington stand in the way of that opportunity.

So consider this column a call to action. If you’ve ever cared about the environment, now is the most critical time to make your voice heard. Talk to your friends. Tell your representatives to support climate change legislation.

The opportunity presented by climate change is about more than just saving the trees and polar bears. It’s about restoring our economy by creating new green industries. It’s about securing the future for coming generations. And to me, it’s fundamentally about the ability of our country to accomplish great things and be a leader in the world once again.

Reach columnist Chris Jordan at opinion@dailyuw.com.

by David S. Broder

Barack Obama has reached the moment of truth for answering the persistent question about his core beliefs and political priorities. The coming votes in the House and Senate on his signature health care reform effort will tell us more about the president than anything so far in his White House tenure.

The challenge is not one he invited. All during last year’s campaign, Obama skillfully skirted the question of whether he was a moderate, consensus-seeking pragmatist, as his words suggested, or a faithful adherent to the liberal agenda, as his voting record demonstrated.

In stylistic terms, he cultivated the pragmatic image. On issues, he was alternately one or the other – lining up with the liberals on Iraq and civil liberties, for example, but joining the hard-liners on Afghanistan and the budget.

In the campaign, he took the moderate side of the health care debate – disagreeing with Hillary Clinton on the necessity for an individual mandate to buy health insurance and suggesting he would be satisfied with incremental progress toward covering all the uninsured.

But now, a number of factors have combined to strip him of the camouflage he once enjoyed when it comes to health care policy.

His effort to craft a bipartisan package with significant Republican support has failed, as GOP leaders in Congress have chosen to take their chances on handing him a costly defeat rather than opting to claim a share of the credit for success. With Sen. Olympia Snowe of Maine apparently the only Republican who might vote for the evolving legislation, Obama will have to find virtually all the votes he needs among his fellow Democrats.

Also, the debates inside the five House and Senate committees that have shared in drafting the bills have dramatized the deep ideological splits on the Democratic side of the aisle. The symbolic issue has been the public option – the proposal for a Medicare-like insurance plan competing with those offered by private companies.

Four of the five committees have included that proposal; the fifth, the Senate Finance Committee, has explicitly rejected it.

Beyond that much-hyped dispute are multiple disagreements on the cost and financing of the overall reform, with no consensus between the more conservative Democratic Blue Dogs and the more numerous liberals, especially in the House.

The first imperative for House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid is to find a formula that will produce 218 Democratic votes in the House and 59 of the needed 60 votes in the Senate.

Obama will have to be an active player in that process. But in addition, he will have to negotiate something that will be workable in the real world. As he contemplates a re-election race in 2012, he needs at least three years when his most important domestic initiative has not blown up in his face.

What are his chances of pulling it off? It will not be easy. In the House, Pelosi and a clear majority of the Democratic caucus members want a liberal bill, including the public option. They may have to offer some cosmetic concessions to the Blue Dogs, but they are unlikely to yield on the main points.

In the Senate, on the other hand, while the liberals may prevail on floor amendments to install the public option, they cannot by themselves deliver 60 votes for passage. At this point, the leverage swings to the handful of more conservative, small-state Democratic senators who, with the Republicans, may be able to force substantive changes.

As this plays out – finally, in a House-Senate conference committee – the political cost of the Republican decision to be simply a blocking force will become clear. Had the GOP furnished even a few votes in return for seeing some of their concerns addressed, chances are Obama and the Democratic congressional leaders would not have felt the necessity to keep all the liberals in line. This would have given the president more room to maneuver.

As it is, his main leverage point is the realization among nearly all Democrats that nothing would be as costly to them, in their individual 2010 races, as the failure of this Congress, with its heavy Democratic majorities, to pass a substantive health reform bill.

That may be enough in the end for Obama to succeed. But the task of getting there will really test him – and expose his core values.

David S. Broder is a columnist for the Washington Post. His e-mail address is davidbroder@washpost.com.

October 4, 2009

By ROBERT PEAR and DAVID M. HERSZENHORN

WASHINGTON — With the Senate Finance Committee set to approve its health care bill this week, Democrats are tantalizingly close to bringing legislation that would make sweeping changes in the nation’s health care system to the floor of both houses of Congress.

Party leaders still face immense political and policy challenges as they combine rival proposals — two bills in the Senate and three in the House. But the broad contours of the legislation are in place: millions of uninsured Americans would get subsidized health benefits, and the government would move to slow the growth of health spending.

Senior Democrats said they were increasingly confident that a bill would pass this year. “I am Scandinavian, and we don’t like to overstate anything,” said Senator Kent Conrad, Democrat of North Dakota and an architect of the Finance Committee bill. “But I have a solid feeling about the direction of events.”

President Obama, in his weekly address on Saturday, noted Friday’s dismal unemployment numbers and said the health care overhaul would bolster small businesses and create jobs.

Mr. Obama called the overhaul “a critical step in rebuilding our economy” and said he was working with his economic advisers “to explore additional options to promote job creation.”

Step by difficult step, the legislative process is lurching forward. Proponents say they see some momentum — more than they saw in Congress 15 years ago, when President Bill Clinton’s plan for universal health coverage collapsed.

As Senate Democrats try to secure the 60 votes needed to overcome a possible Republican filibuster, intricate details and big hurdles stand in their way. Republicans have said they will fight the legislation at every turn.

The policy challenges are also daunting. In the space of one year, the Democrats are trying to restructure one-sixth of the economy, writing a bill that will affect almost every American, every business and every doctor and hospital in the country.

Three House committees approved health care bills in July, as did the Senate health panel. After hearing from constituents in August — some furious, some pleading for change — many Democrats returned to the Capitol determined to plow ahead. They were also emboldened by Mr. Obama’s speech to Congress on Sept. 9 that cast the legislation as a moral and political imperative.

The Finance Committee is expected to approve its bill this week, after receiving cost estimates from the Congressional Budget Office. And while the panel made numerous changes over seven days of public debate, the core components of its more centrist proposal, developed in months of bipartisan talks, are still intact.

After the committee votes, a new, potentially more perilous phase will begin as party leaders put together the final proposals they will take to the floor of the Senate and the House.

These are some of the huge issues that remain:

¶The major House and Senate bills would require most Americans to carry insurance. This individual mandate could touch off an angry public reaction, especially if the penalties for violations are taxes collected by the Internal Revenue Service. Many lawmakers want to minimize the penalties.

¶Whether the government should require employers to provide health benefits to their employees, or pay a penalty, is still an open question. Liberal Democrats say yes. Moderate Democrats are unsure. Republicans are generally opposed.

¶Lawmakers have not decided how to pay for the legislation, expected to cost about $900 billion over 10 years, though they insist that it will not add to the deficit. The House has proposed a surtax on high-income people, while the Senate proposed an excise tax on high-cost insurance plans.

¶Democrats are divided over whether to create a government insurance company to compete with private insurers. The more liberal House will probably not pass a health care bill without such a public insurance option, while the Senate appears unlikely to pass one with it.

¶Lawmakers are looking for ways to provide more generous subsidies to help low- and middle-income people buy insurance. Many Democrats and some Republicans, like Senator Olympia J. Snowe of Maine, insist that insurance must be affordable if people are required to buy it.

¶While Congressional leaders say they want to curb the explosive growth of health costs, it is unclear whether the final bill will make a serious effort to do so. Every proposal meets resistance from health care providers who fear a loss of income, even as they stand to gain millions of paying customers if nearly everyone has insurance.

Mr. Conrad said that even some Republicans seemed to recognize the likelihood that Congress would pass major health care legislation this year. “I thought there was an air of resignation that settled over our colleagues on the other side of the aisle,” he said.

But Senator Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, predicted that opposition would grow. “It would be very difficult for a bill like the Finance Committee bill to pass the Senate,” he said. “There is nothing inevitable about such a bill. There is nothing predictable about the Senate floor.”

Republicans are not waiting for the finished product and have unleashed a barrage of criticism. In addition to expanding government and raising taxes, they say, the Democratic plans will hurt older Americans by cutting Medicare, intrude on personal freedom by forcing people to buy insurance and impose new costs on states by expanding Medicaid.

Democrats said that once the Finance Committee acts this week, they will be closer than ever to carrying out a major overhaul of the health care system — a goal that has eluded presidents and Congress for more than a half-century.

October 3, 2009

By JULIET MACUR

COPENHAGEN — When Rio de Janeiro was elected host city for the 2016 Olympic Games on Friday, the room where its bid team gathered turned into a boisterous party with members in uniform navy or moss green blazers hugging, dancing, crying and waving Brazilian flags. The bid leader, Carlos Arthur Nuzman, yelled, “We did it! We did it!”

Rio and Chicago had gone into the day considered the favorites, ahead of Tokyo and Madrid. But by the time Rio was chosen by the International Olympic Committee to become the first South American city to host the Olympics, the Chicago delegation and its star-studded supporters were nowhere in sight.

They had already left the building.

Despite the support of President Obama, who flew in specifically to address the I.O.C. voters, Chicago finished last, out of the running in the first round of voting, with a paltry 18 of a total 94 votes. Tokyo received 22, with Rio getting 26 and Madrid 28. In each round, until one city gains a majority, the low vote-getter is eliminated. After Chicago was tossed aside, nearly all of its votes went straight to Rio in the second round. In the third, after Tokyo was eliminated, Rio won handily, 66-32.

The chance to bring the Olympics to a continent that had never hosted the Games worked in Rio’s favor. During its presentation, the bid team showed a graphic of the world and marked all the places that have held an Olympics. South America was glaringly bare.

“There was absolutely no flaw in the bid,” the I.O.C. president, Jacques Rogge, said.

Chicago officials had worked nearly four years and spent nearly $50 million to bring the Summer Olympics to the United States for the first time since the 1996 Atlanta Games. There were many possible explanations for Chicago’s spectacular failure, but little consensus.

Some pointed to the regional bloc voting in the treacherous first round. Others said some voters, assuming Chicago was a lock to advance because of the presence of Mr. Obama and his wife, Michelle, might have taken their early votes elsewhere. Many also blamed the rocky relationship between the United States Olympic Committee and the I.O.C.

Others said there was no explaining it.

“Everybody was shocked at that result,” said Rene Fasel, an I.O.C. member from Switzerland, regarding Chicago’s first-round ouster. “Everybody expected Chicago and Rio, everybody. It was really strange, and I feel really sorry. If it would have been Chicago and Rio in the end, it would have been much closer.”

Anita DeFrantz, one of two I.O.C. members from the United States, said she could not believe how the vote unfolded, particularly after the Obamas’ visit. “I hate the fact that these elegant people were here and then our country got treated that way,” she said.

Beyond showing an apparent indifference to the United States’ star power, the I.O.C. vote was interpreted as a repudiation of the U.S.O.C., which has been in upheaval over the past year and has struggled to gain a favorable standing within the I.O.C.

“It was a defeat for the U.S.O.C., not for Chicago,” said Denis Oswald, an I.O.C. member from Switzerland.

Mr. Oswald said that 10 to 15 fellow I.O.C. members had approached him recently wanting to discuss issues related to the U.S.O.C. He said that changes in U.S.O.C. leadership “has not helped,” either, and that it was clear that the Chicago bid and the U.S.O.C. were not united. Stephanie Streeter, the acting chief executive of the U.S.O.C., and Larry Probst, the committee’s chairman, have taken their posts in the last year and have run into problems with the I.O.C., most notably over their stalled plan for an Olympic television network and their share of the Games’ network and corporate sponsorship contracts.

“The United States, within the Olympic movement, hasn’t engaged as well as we could have for a long time,” said Robert Ctvrtlik, the U.S.O.C. vice president for international relations. “There’s a lot of politics going on. This isn’t just on the merits. I don’t think it’s anti-American. Maybe we still don’t have the horsepower to do some of the politicking within the movement.”

For the first time, a United States president met with the I.O.C. on behalf of an American bid — which U.S.O.C. officials called the country’s strongest bid ever — but that was not enough. This followed New York City’s failed bid for the 2012 Summer Games, a second-round exit after winning only 19 votes.

“All we know is that the first round is always the most dangerous and obviously we didn’t have a large region of support,” Chicago’s bid leader, Patrick G. Ryan, said. “We wanted to bring home the victory and we didn’t. It wasn’t our day.”

On his flight back to Washington on Friday, Mr. Obama said he was disappointed about Chicago’s finish.

“I have no doubt that it was the strongest bid possible and I’m proud that I was able to come in and help make that case in person,” Mr. Obama said after arriving back in Washington.

In Rio, officials declared a holiday for city and state employees. While tens of thousands of people had begun the celebration on the city’s Copacabana beach, where people dressed in shorts and bikinis jumped to samba music, the scene was different earlier in Chicago.

All over the city, people responded to the city’s elimination with astonished silence, blank looks and questions. The word there had been that Chicago would survive at least until a late round of voting, if not win. Planned celebrations at schools, parks and restaurants ended abruptly Friday morning.

“It’s sad,” said Marshall Burt, a lawyer, as he stood in Daley Plaza, in the heart of Chicago’s Loop, where thousands had gathered for what they expected to be a victory rally. “But I think probably the world is still not real keen on America.” He added later, “Chicago may still have the image of gangsters and corruption.”

The I.O.C. member Kevan Gosper, of Australia, said the few votes cast for Chicago could have been an accident. “There might have been an effort on the part of the Asian group to protect Tokyo in the first round,” he said.

Richard W. Pound, an I.O.C. member from Canada, said that Chicago might have been eliminated early on purpose. “I think there were a lot of people saying, if we don’t get it, we’ll support you, but we’ve got to stop Chicago,” he said. “That’s sport politics, not anything else. It’s election management. The Europeans and the Asians are much better at this than we are.”

Some members of the Olympic movement in the United States said they were bracing for this moment.

Skip Gilbert, the chief executive of USA Triathlon and the chairman of the National Governing Bodies Association, said he planned to meet with other executives at national governing bodies to decide what to do next. One option would be to recommend a change in leadership, he said.

“I think it comes down to when you have a leadership that has no real connection to the Olympic movement before they walk into their roles, what would you expect that they’re going to be able to do in terms of being leaders of an Olympic movement?” he said. “Unfortunately it seems like — and the vote kind of confirms it — that we were doomed to fail from the beginning.”

Still, Chicago planned for victory. The bid team reserved a hall in downtown here, where they had planned to celebrate with about 500 supporters. When the team arrived, the crowd began singing “The Star-Spangled Banner,” said Michael Plant, a U.S.O.C. board member here as part of Chicago’s delegation.

Geography, though, was Rio’s strongest point. It helped the city overcome concerns about security in the Brazilian city. There were also concerns that the country would be overextended because it is hosting the 2014 World Cup.

It helped Rio that the I.O.C. has a history of trying to effect change with its choices for bid cities. The committee awarded the 2008 Summer Games to Beijing, hoping to help open China to the world. In 1981, it gave the 1988 Summer Games to Seoul to help usher in a civilian government.

By choosing Rio, it could help the country develop faster and could bring an entire continent of people closer to the Olympic movement.

“Today is the most emotional day in my life, the most exciting day of my life,” President Luiz Inácio Lula da Silva of Brazil said. “I’ve never felt more pride in Brazil. Now, we are going to show the world we can be a great country. We aren’t the United States, but we are getting there, and we will get there.”

Monica Davey contributed reporting from Chicago; Alexei Barrionuevo from Rio de Janeiro; and Richard Sandomir, Katie Thomas and Lynn Zinser from New York.

October 3, 2009

By PETER S. GOODMAN

After several months in which the American economy flashed tentative signs of improvement, a sobering report on the national job market released on Friday amplified worries that a lengthy period of lean times lay ahead.

The economy shed 263,000 jobs in September, and the unemployment rate edged up to 9.8 percent from 9.7 percent in August, according to the Labor Department’s monthly snapshot of the employment picture.

Though the job market worsened, the pace of deterioration remained markedly slower than during the early months of the year, when roughly 700,000 jobs a month were disappearing. That improvement seems consistent with the widespread belief that the recession has given way to economic growth. Yet the report also buttressed fears that economic expansion would be weak and hesitant, with scarce paychecks and economic anxiety remaining prominent features of American life well into next year.

“This is a weak report,” said Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh. “The rate of job loss has tapered off, but we still haven’t reached the point where businesses are willing to hire.”

The Labor Department also made a preliminary revision in its survey of private employers that indicated the job market shrank even more during the recession. The department disclosed that in March this year the economy held 824,000 fewer jobs than previously reported, making an already bleak picture worse.

The endurance of hard times seems likely to increase pressure on the Obama administration and Congress to consider another dose of spending aimed at stimulating the economy, even as the government grapples with deficits projected by some economists to exceed $10 trillion over the next decade.

Despite a $787 billion stimulus package adopted early this year and aimed in part at shoring up state and local coffers, government jobs slipped by 53,000 in September.

“That’s the budget crunch hitting,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “We’re still losing jobs at a very rapid pace. We’re still looking at an economy with a lot of weakness.”

For millions of unemployed people, the latest data merely confirms something they have come to understand intimately, through the discouraging process of seeking work.

“There’s nothing out there,” said Jerry Lamirande, a technology systems engineer in Amarillo, Tex., who has been without a job since April 2008.

During the technology boom of the late 1990s, Mr. Lamirande, 62, worked for I.B.M., where he drew a salary of about $130,000. After a layoff seven years ago, he has earned about $70,000 a year as a technology consultant working on contract.

Since the spring, he and his wife have lived on her modest salary as a public school teacher and on hardship withdrawals from his retirement account. He has searched nationwide for his next contract, willing to relocate.

“I’ve got to go where the opportunities are,” he said. “The problem is, there aren’t many opportunities.”

The latest jobs report lent credence to that contention. The unemployment rate continued to inch toward double digits, a level last seen in June 1983. The so-called underemployment rate (which includes people whose hours have been cut, and those working part-time for lack of full-time positions, along with the jobless) reached 17 percent, the highest level since the government began tracking it in 1994.

More jobs were lost last month, at 263,000, than were lost in August, as the Labor Department revised the August decline to 201,000 jobs from the 216,000 it initially reported.

Health care remained a rare bright spot, adding 19,000 jobs in September, but construction jobs slipped by 64,000, manufacturing declined by 51,000 and retail lost 39,000 jobs.

Most economists assume the economy expanded at an annual pace of about three percent from July through September. But debate focuses on the vigor and staying power of the recovery.

Optimists anticipate a robust bounce-back from what now stands as the longest recession since the Great Depression. But most economists expect a sustained slog through high rates of joblessness.

The economic improvement in recent months largely stems from businesses cutting inventories at a slower pace. As some companies begin to rebuild stocks, the impact could wash through the economy for a few more months, adding jobs and moderating the overall decline.

Then the underlying weakness of the economy will probably reassert itself, say experts. After years of borrowing against homes and cashing in stock to spend in excess of their incomes, many Americans are tapped out. Austerity and saving have replaced spending and investment in many households, constraining the economy.

As many Americans transition from living on home equity loans to sustaining themselves on paychecks, weekly pay continues to effectively shrink: Over the last year, average hourly earnings for rank-and-file workers — some 80 percent of the labor force — have increased by 2.5 percent. But average weekly earnings have expanded by only 0.7 percent, less than the increase in the cost of living, because employers have slashed working hours.

In September, the average workweek edged down by one-tenth of an hour, to 33 hours.

For those out of work, the job market looks harsher now than at any point in the recession. The number of people who have been jobless for more than six months increased in September by 450,000, reaching 5.4 million.

“We have a truly massive crisis of long-term unemployment,” said Christine L. Owens, executive director of the National Employment Law Project in a statement, adding that nearly 400,000 jobless people had exhausted their unemployment benefits by the end of September. “Today’s employment report is a marching order for Congress to pass unemployment benefit extensions to all states, quickly.”

The first signs of improvement are likely to be seen among temporary workers, say experts, as companies now hunkering down in the face of uncertain prospects take tentative steps to expand.

But temporary help services lost 1,700 jobs in September.

“Companies are extremely cautious,” said Roy G. Krause, chief executive of Spherion, a recruiting and staffing company based in Fort Lauderdale, Fla.

All of which translates into continued apprehension in many households.

“It’s terrifying,” said Stephanie Wheeler, 56, of Elizabeth, N.J., who has drained her savings to $800 in the year since she lost her job at a data-processing company, rendering her ability to pay the rent on her apartment uncertain.

“I’ve been here for eight years,” she said. “I don’t know what’s going to happen. I’m petrified of being set out on the street.”

Jack Healy contributed reporting.

By Chris Jordan
October 1, 2009

As UW students flock back to school this week, their representatives in Congress will have recently flocked back to their D.C. offices after an August recess marked by angry town halls and endless health-care ad wars.

President Barack Obama’s signature domestic agenda item has faced a tough road, and no doubt his own strategy and execution is partly to blame. By failing to explain what health-care reform means to those who already possess insurance, the President left a vague plan open to attack.

Such Republican scare tactics and outright lies (see “death panels”) have unfortunately had an impact. They’ve inflamed the passions of anti-Obama activists on the right and sewn doubt in the minds of many Americans about health insurance reform.

The key sticking point in this debate has been the inclusion of a government run “public option” that would compete with private health insurance. While support has declined for the Democratic plan in general, a CBS poll in September showed support for a public option strong at 68 percent. Another poll published in September found that 73 percent of doctors support the public option.

Republicans have used confusion over this proposal to paint the entire reform effort as a “government takeover.” They have constantly claimed that Americans will be forced from their private insurance into a “big government plan.”

I find this to be a strange argument because, as I understand it, you can’t be forced into something that is by definition an option.

The public option is intended to provide competition to private insurance by giving Americans more choices. If people choose to abandon their private insurance for a public option, it’ll be because they make the decision that they can get better care at a lower cost with that plan. It won’t be because the evil, socialist government forced them to do it.

We can all agree that the goals of health reform should be to lower overall costs and increase the quality of care. We can also agree on the general principle that more choice for consumers and competition in the marketplace leads to both lower costs and an increased quality of the product being sold. That’s what the public plan will do; provide another choice to consumers and force private insurers to compete.

For those who suggest that the public option would drive private insurers out of business, the Congressional Budget Office estimates that only 11 to 12 million people will sign up for it. Not to mention the fact that reform will require everyone to have insurance, similar to the way everyone is required to have auto insurance. With roughly 45 million Americans currently lacking any plan, private insurance companies will be signing up new customers faster than they can take them.

And for those who suggest that the public option would be too costly, the President has said that it must be self-sustaining and funded by those who pay to use it.

We should set up a health-care system that is uniquely American; one that combines the best aspects of our own system (high quality care, innovation) with the best of other systems (universal coverage, lower cost). That’s why Obama is not proposing a government takeover, he’s proposing a government option that will pay for itself and provide more health insurance choices, and thus competition.

If the public option does not survive into the final bill, we will have lost a great tool for controlling health-care costs.

Reach columnist Chris Jordan at opinion@dailyuw.com.

If Congress fails to act, agency plans to proceed
Jim Tankersley / Tribune Washington bureau

Tags: climate change Environmental Protection Agency global warming

WASHINGTON – The Environmental Protection Agency on Wednesday unveiled a detailed proposal for using the government’s regulatory powers to curb greenhouse gas emissions – reassuring foreign allies on the U.S. commitment to fight climate change and warning Congress that the administration will act on its own if lawmakers fail to address the issue.

The proposed regulations would apply to large-scale industrial sources of heat-trapping gases, including power plants, factories and refineries, but not to smaller sources, such as new schools, as some critics of the EPA action had feared.

The rules would force new – or substantially modified – industrial emitters to employ “best available control technologies and energy efficiency measures” to minimize greenhouse-gas emissions, a tougher standard than the one applied to many emitters now.

The EPA action, along with the formal unveiling of proposed legislation in the Senate, stoked optimism among environmentalists and others who have voiced concern that the chances for agreement at a global warming conference in Copenhagen could be reduced if leaders of other countries concluded the U.S. was not prepared to take the kinds of steps it has urged other developed nations to take.

“We are not going to continue with business as usual while we wait for Congress to act,” EPA Administrator Lisa P. Jackson told a climate conference in Los Angeles. She said the proposal “allows us to do what the Clean Air Act does best – reduce emissions for better health, drive technology innovation for a better economy, and protect the environment for a better future – all without placing an undue burden on the businesses that make up the better part of our economy.”

EPA officials unveiled the proposal as international climate negotiators gathered in Bangkok to prepare for global warming treaty talks in Copenhagen in December.

The EPA rules would mimic how the agency forces power plants and factories to install “scrubbers” and other means of limiting many types of air pollutants.

But it’s unclear exactly how that would apply in the case of greenhouse gases, which scientists blame for climate change. Researchers are still studying and have yet to deploy a commercial-scale method to capture and store carbon emissions from coal plants, for example.

The EPA proposal, which must now move through a lengthy process of comments and reviews, is likely to encounter legal challenges.

Donna St. George / Washington Post

By the numbers
5.6 million: Number of full-time, stay-at-home mothers in the United States
165,000: Number of full-time, stay-at-home fathers

WASHINGTON – The first national snapshot of married women who stay home to raise their children shows that the popular obsession with high-achieving professional mothers sidelining careers for family life is largely beside the point.

Instead, census statistics released today show that stay-at-home mothers tend to be younger and less educated, with lower family incomes. They are more likely than other mothers to be Hispanic or foreign-born.

Census researchers said the new report is the first of its kind and was spurred by interest in the so-called “opt-out revolution” among well-educated women said to be leaving the workforce to care for children at home.

“I do think there is small population, a very small population, that is opting out, but with the nationally representative data, we’re just not seeing that,” said Diana Elliott, a family demographer who is co-author of the U.S. Census Bureau report.

The report showed that mothering full time at home is a widespread phenomenon, including 5.6 million women, or nearly one in four married mothers with children under age 15. By comparison, the country’s stay-at-home dads number 165,000.

Researchers noted that the somewhat younger ages of stay-at-home mothers could partly explain their lower education levels, and that less family income would be expected with just one parent in the workforce.

Even so, the profile of mothers at home that emerged is at clearly at odds with the popular discussion that has flourished in recent years, they said.

The notion of an opt-out revolution took shape in 2003, when New York Times writer Lisa Belkin coined the term to describe the choices made by a group of high-achieving Princeton women who left the fast track after they had children.

It has since been the subject of public debate, academic study and media obsession. It has been derided as a myth, but has never quite gone away in an era when women still struggle to balance work and family, and motherhood’s conflicts have been parodied and probed in everything from Judith Warner’s book “Perfect Madness” to television’s “Desperate Housewives” and “The Secret Life of a Soccer Mom.”

The census statistics show, for example, that the educational level of nearly one in five mothers at home was less than a high school degree, as compared with one in 12 other mothers. Thirty-two percent of moms at home have at least a bachelor’s degree, compared with 38 percent of other mothers.

Twelve percent of stay-at-home moms live below the poverty line, compared with 5 percent of other mothers. On the other end of the economic scale, about one-third of moms at home had family incomes of $75,000 a year or more, whereas roughly half of other mothers did.

Given this portrait, mothers at home appear to be “the more vulnerable women, for whom I would argue the issue is lack of opportunity,” said sociologist Pamela Stone of Hunter College. “They have a hard time finding a job and finding a job that makes work worth it.”

This may well be illuminating for many observers of family life, she said, because “the attention is always focused on this erroneous perception about the women at the top.”

Stone, who studied successful women who left their careers for a 2007 book called “Opting Out?,” said some shift course and focus on their children but “not at the numbers people think. Even among this advantaged group, there is no upward trend of staying at home.”

The Census report was based on nationally representative data from 2007, predating the current economic crisis.

Charles Krauthammer is a columnist for the Washington Post Writers Group. His e-mail address is letters@charleskrauthammer.com.

My mother wanted to die, but the doctors wouldn’t let her. At least that’s the way it seemed to me as I stood by her bed in an intensive-care unit at a hospital in Hilton Head, S.C., five years ago. My mother was 79, a longtime smoker who was dying of emphysema. She knew that her quality of life was increasingly tethered to an oxygen tank, that she was losing her ability to get about, and that she was slowly drowning. The doctors at her bedside were recommending various tests and procedures to keep her alive, but my mother, with a certain firmness I recognized, said no. She seemed puzzled and a bit frustrated that she had to be so insistent on her own demise.

The hospital at my mother’s assisted-living facility was sustained by Medicare, which pays by the procedure. I don’t think the doctors were trying to be greedy by pushing more treatments on my mother. That’s just the way the system works. The doctors were responding to the expectations of almost all patients. As a doctor friend of mine puts it, “Americans want the best, they want the latest, and they want it now.” We expect doctors to make heroic efforts—especially to save our lives and the lives of our loved ones.

Compared with other Western countries, the United States has more health care—but, generally speaking, not better health care. There is no way we can get control of costs, which have grown by nearly 50 percent in the past decade, without finding a way to stop overtreating patients. In his address to Congress, President Obama spoke airily about reducing inefficiency, but he slid past the hard choices that will have to be made to stop health care from devouring ever-larger slices of the economy and tax dollar. A significant portion of the savings will have to come from the money we spend on seniors at the end of life because, as Willie Sutton explained about why he robbed banks, that’s where the money is.

As President Obama said, most of the uncontrolled growth in federal spending and the deficit comes from Medicare; nothing else comes close. Almost a third of the money spent by Medicare—about $66.8 billion a year—goes to chronically ill patients in the last two years of life. This might seem obvious—of course the costs come at the end, when patients are the sickest. But that can’t explain what researchers at Dartmouth have discovered: Medicare spends twice as much on similar patients in some parts of the country as in others. The average cost of a Medicare patient in Miami is $16,351; the average in Honolulu is $5,311. In the Bronx, N.Y., it’s $12,543. In Fargo, N.D., $5,738. The average Medicare patient undergoing end-of-life treatment spends 21.9 days in a Manhattan hospital. In Mason City, Iowa, he or she spends only 6.1 days.

Maybe it’s unsurprising that treatment in rural towns costs less than in big cities, with all their high prices, varied populations, and urban woes. But there are also significant disparities in towns that are otherwise very similar. How do you explain the fact, for instance, that in Boulder, Colo., the average cost of Medicare treatment is $9,103, whereas an hour away in Fort Collins, Colo., the cost is $6,448?

The answer, the Dartmouth researchers found, is that in some places doctors are just more likely to order more tests and procedures. More specialists are involved. There is very little reason for them not to order more tests and treatments. By training and inclination, doctors want to do all they can to cure ailments. And since Medicare pays by procedure, test, and hospital stay—though less and less each year as the cost squeeze tightens—there is an incentive to do more and more. To make a good living, doctors must see more patients, and order more tests.

All this treatment does not necessarily buy better care. In fact, the Dartmouth studies have found worse outcomes in many states and cities where there is more health care. Why? Because just going into the hospital has risks—of infection, or error, or other unforeseen complications. Some studies estimate that Americans are overtreated by roughly 30 percent. “It’s not about rationing care—that’s always the bogeyman people use to block reform,” says Dr. Elliott Fisher, a professor at Dartmouth Medical School. “The real problem is unnecessary and unwanted care.”

But how do you decide which treatments to cut out? How do you choose between the necessary and the unnecessary? There has been talk among experts and lawmakers of giving more power to a panel of government experts to decide—Britain has one, called the National Institute for Health and Clinical Excellence (known by the somewhat ironic acronym NICE). But no one wants the horror stories of denied care and long waits that are said to plague state-run national health-care systems. (The criticism is unfair: patients wait longer to see primary-care physicians in the United States than in Britain.) After the summer of angry town halls, no politician is going to get anywhere near something that could be called a “death panel.”

There’s no question that reining in the lawyers would help cut costs. Fearing medical-malpractice suits, doctors engage in defensive medicine, ordering procedures that may not be strictly necessary—but why take the risk? According to various studies, defensive medicine adds perhaps 2 percent to the overall bill—a not-insignificant number when more than $2 trillion is at stake. A number of states have managed to institute some kind of so-called tort reform, limiting the size of damage awards by juries in medical-malpractice cases. But the trial lawyers—big donors to the Democratic Party—have stopped Congress from even considering reforms. That’s why it was significant that President Obama even raised the subject in his speech last week, even if he was vague about just what he’d do. (Best idea: create medical courts run by experts to rule on malpractice claims, with no punitive damages.)

But the biggest cost booster is the way doctors are paid under most insurance systems, including Medicare. It’s called fee-for-service, and it means just that. So why not just put doctors on salary? Some medical groups that do, like the Mayo Clinic, have reduced costs while producing better results. Unfortunately, putting doctors on salary requires that they work for someone, and most American physicians are self-employed or work in small group practices. The alternative—paying them a flat rate for each patient they care for—turned out to be at least a partial bust. HMOs that paid doctors a flat fee in the 1990s faced a backlash as patients bridled at long waits and denied service.

Ever-rising health-care spending now consumes about 17 percent of the economy (versus about 10 percent in Europe). At the current rate of increase, it will devour a fifth of GDP by 2018. We cannot afford to sustain a productive economy with so much money going to health care. Over time, economic reality may force us to adopt a national health-care system like Britain’s or Canada’s. But before that day arrives, there are steps we can take to reduce costs without totally turning the system inside out.

One place to start is to consider the psychological aspect of health care. Most people are at least minor hypochondriacs (I know I am). They use doctors to make themselves feel better, even if the doctor is not doing much to physically heal what ails them. (In ancient times, doctors often made people sicker with quack cures like bleeding.) The desire to see a physician is often pronounced in assisted-living facilities. Old people, far from their families in our mobile, atomized society, depend on their doctors for care and reassurance. I noticed that in my mother’s retirement home, the talk in the dining room was often about illness; people built their day around doctor’s visits, partly, it seemed to me, to combat loneliness.

Physicians at Massachusetts General Hospital are experimenting with innovative approaches to care for their most ill patients without necessarily sending them to the doctor. Three years ago, Massachusetts enacted universal care—just as Congress and the Obama administration are attempting to do now. The state quickly found it could not afford to meet everyone’s health-care demands, so it’s scrambling for solutions. The Mass General program assigned nurses to the hospital’s 2,600 sickest—and costliest—Medicare patients. These nurses provide basic care, making sure the patients take their medications and so forth, and act as gatekeepers—they decide if a visit to the doctor is really necessary. It’s not a perfect system—people will still demand to see their doctors when it’s unnecessary—but the Mass General program cut costs by 5 percent while providing the elderly what they want and need most: caring human contact.

Other initiatives ensure that the elderly get counseling about end-of-life issues. Although demagogued as a “death panel,” a program in Wisconsin to get patients to talk to their doctors about how they want to deal with death was actually a resounding success. A study by the Archives of Internal Medicine shows that such conversations between doctors and patients can decrease costs by about 35 percent—while improving the quality of life at the end. Patients should be encouraged to draft living wills to make their end-of-life desires known. Unfortunately, such paper can be useless if there is a family member at the bedside demanding heroic measures. “A lot of the time guilt is playing a role,” says Dr. David Torchiana, a surgeon and CEO of the Massachusetts General Physicians Organization. Doctors can feel guilty, too—about overtreating patients. Torchiana recalls his unease over operating to treat a severe heart infection in a woman with two forms of metastatic cancer who was already comatose. The family insisted.

Studies show that about 70 percent of people want to die at home—but that about half die in hospitals. There has been an important increase in hospice or palliative care—keeping patients with incurable diseases as comfortable as possible while they live out the remainder of their lives. Hospice services are generally intended for the terminally ill in the last six months of life, but as a practical matter, many people receive hospice care for only a few weeks.

Our medical system does everything it can to encourage hope. And American health care has been near miraculous—the envy of the world—in its capacity to develop new lifesaving and life-enhancing treatments. But death can be delayed only so long, and sometimes the wait is grim and degrading. The hospice ideal recognized that for many people, quiet and dignity—and loving care and good painkillers—are really what’s called for.

That’s what my mother wanted. After convincing the doctors that she meant it—that she really was ready to die—she was transferred from the ICU to a hospice, where, five days later, she passed away. In the ICU, as they removed all the monitors and pulled out all the tubes and wires, she made a fluttery motion with her hands. She seemed to be signaling goodbye to all that—I’m free to go in peace.

With Pat Wingert, Suzanne Smalley, and Claudia Kalb in Washington

Well, we survived August, which is good news. It was not a month that will be recorded in the Enlightened Discourse Hall of Fame. In fact, it was a national embarrassment — not just the steady stream of misinformation about the nature of President Obama’s health-care proposals, but the racism — both overt and opaque — the death threats, the imprecations (calling someone a Nazi is evidence of the evil of banality), the idiots bearing assault rifles at presidential events. As the lunatics took over the asylum, the President’s poll ratings dropped, and the chances for a truly bipartisan health-care-reform effort vanished, if they existed in the first place. Consequently, we have had a back-to-school fusillade of advice for the President from my columnizing peers — and an effusion of premature crowing from conservatives about the collapse of the Obama presidency.

The drop in the President’s poll numbers represents a natural political process. When politicians talk about spending their political capital, they are talking about their poll numbers — and the cliché is somewhat misleading. They are actually investing their political capital, hoping for a greater return if their gamble succeeds. George W. Bush invested his capital in privatizing Social Security, and the stock tanked. Barack Obama is investing in health-care reform. We are at the point of the legislative process where all seems hopeless, but Obama should be heartened by the fact that most of his Republican adversaries oppose the bill for crass political rather than ideological reasons. They assume that if it passes, his investment of political capital will result in higher poll numbers — which means they assume the public will like the changes he is proposing. (See TIME’s photo-essay “The Health-Care Debate Turns Angry.”)

And, I fearlessly predict, the public will. If insurance companies can no longer deny coverage for pre-existing conditions, or drop people who get too sick, the public will love it. If health-care exchanges give individuals and small businesses the power to negotiate lower premiums from the insurance companies, people will love that too. Making health care available to everyone, even if some people — young, healthy people — who are not buying in now are told they have to join up, will also be well received. The odds are better than even that a bill containing those provisions will pass in Congress this fall.

But even if most of the noise about Obama is nonsense, there is one area of concern that could affect the ultimate success of his presidency. It is his tendency to overlearn the lessons of past presidencies, especially when those lessons enable him to avoid taking responsibility for tough decisions. It has been widely observed that Obama overlearned the lesson of the Clinton health-care effort by deferring to Congress to write the legislation. It has been less widely observed that the President overlearned the lesson of Bush’s hyperpoliticized Justice Department by leaving to Attorney General Eric Holder the decision about whether to investigate the CIA for torture abuses.

What should the President have done? Well, there’s a path between the 1,300-page Clinton health-care plan and the 1,000-page Henry Waxman plan that will be voted on in the House. The President could have laid out a set of principles and said, “I will veto any bill that doesn’t contain the following …” (Indeed, he still could do so.) They should be clear, simple, popular and achievable. My list would include insurance reform, health-care exchanges, near universal coverage and tort reform. (Obama’s position on tort reform is another abdication of responsibility: he says he’s open to it, knowing the congressional Democrats are closed to it.) (See “Understanding the Health-Care Debate: Your Indispensable Guide.”)

The President’s deferral of responsibility for the CIA investigation is more serious than his health-care meanderings. This is a matter of national security that will directly affect the morale and behavior of our clandestine services. The President can’t say he wants to look forward, not backward, then allow his Attorney General to look backward. The most egregious practices, like waterboarding, were (outrageously) declared legal by the Bush Justice Department. How can you prosecute one interrogator for threatening a prisoner with an electric drill and let others who waterboarded a prisoner 83 times off the hook? Is it right for the interrogators to be prosecuted and the real miscreants — people, like former Vice President Dick Cheney, who ordered, and still approve of, the torture — to escape unpunished? Most legal experts believe that such cases would be difficult to prosecute. But whether you favor an investigation or not, this is a presidential decision the President avoided.

In the great sweep of history, this presidency has barely begun. The mistakes Obama has made are rookie mistakes that can be corrected. And the general tendency of his Administration — toward civility, as opposed to the ugliness we’ve seen in the past month — is the right one. But he can’t allow his desire for civility to neuter the requirements of leadership. He has to lead, clearly and decisively, starting right now.

Froma Harrop is a columnist for the Providence Journal.

Justices could overturn finance restrictions

Government program endorsed, not required

WASHINGTON – President Barack Obama on Wednesday laid out a series of compromises he’s willing to make to get a health care overhaul through a nervous Congress this year, including diluting his vision for a new public insurance program and embracing ideas floated by Republicans.

In an address to a joint session of Congress, Obama tried to seize control of the Democratic Party’s highest domestic priority after months of party disarray and raucous public debate across the country. The president said that he’d require all individuals to have health insurance and would provide tax credits to people and small businesses that couldn’t afford it.

“Well, the time for bickering is over. The time for games has passed. Now is the season for action,” Obama said.

At one point, a South Carolina Republican congressman shouted, “You lie” when Obama characterized reports that he’d insure illegal immigrants as false.

On perhaps the most controversial single plank in his program, Obama endorsed creating a “public option” government program to compete against private insurers, but he didn’t insist that it be included.

Instead, he left room for alternatives that liberal Democrats in Congress are resisting. Those include creating nonprofit health care cooperatives; a “trigger” mechanism for a public option to kick in later if private insurers fail to meet benchmarks of coverage; or perhaps simply tightening regulations on private insurers.

He pledged that any “public option” wouldn’t weaken coverage for those in Medicare or insured through their employers. He promised them “more security and stability.”

In turn, Obama made it clear that he intends to work with congressional Democrats to push some health care plan through Congress this year – on a bare partisan majority if necessary.

“I am not the first president to take up this cause, but I am determined to be the last,” Obama said in remarks that he hoped would breathe new life into Democrats’ push to expand coverage to many of the roughly 46 million in the U.S. who now lack health insurance.

“We are the only advanced democracy on Earth, the only nation, that allows such hardships for millions of people,” he said. “Now is the season for action.”

Such an expansion is a goal that’s eluded presidents since Harry Truman, and, most recently, Bill Clinton 15 years ago.

Obama said that his plan would cost about $900 billion over a decade. He said it could be paid for mostly by eliminating “waste and abuse” from the existing health care system, but he wasn’t specific. In addition, he’d charge insurance companies “a fee for their most expensive policies” to fund his plan. Beyond that, he failed to specify how his proposals would slow rising health costs.

Three House of Representatives committees have written legislation that would create a public option, raise taxes on the wealthy to help pay for the plan and mandate coverage for most people. The House is expected to combine three pending Democratic bills into one piece of legislation and attempt to pass it this month.

The Senate outlook is cloudier and likely to take longer. Even if both chambers pass versions of the legislation, they’re all but certain to differ, requiring a House-Senate conference to draft a compromise version that each house then must pass. How that will happen or what final terms it may contain aren’t clear.

Fleshing out a framework that he’s been advocating for months now, Obama called for creating a government health insurance exchange, or marketplace, to take effect by 2013. Through it many Americans could obtain lower-cost private coverage – or possibly coverage through some variation of a public plan if Congress creates one.

Until the exchange would take effect, Obama would borrow from a plan that his 2008 Republican rival, Arizona Sen. John McCain, proposed last year – to provide catastrophic coverage for those with pre-existing conditions.

In another olive branch to Republicans, Obama indicated that he’d support some “demonstration projects” to try setting experimental limits on medical malpractice lawsuits – long a Republican goal that Democrats typically oppose.

Obama also called for new regulations on private insurers to protect patients. He told Americans that any plan he signs will:

•Ban insurance companies from denying coverage because of pre-existing conditions.

•Prevent insurers from dropping or watering down coverage during illness.

•End arbitrary annual or lifetime coverage caps.

•Limit out-of-pocket expenses.

•Require insurers to cover routine checkups, mammograms and colonoscopies.

Judge rejects challenge to Referendum 71

By Michael Barone

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Dr. Donald F. Condon is a physician in Spokane.

Charles Krauthammer is a columnist for the Washington Post Writers Group. His e-mail address is letters@charleskrauthammer.com.

Insurance companies would face benchmarks

David S. Broder is a columnist for the Washington Post. His e-mail address is davidbroder@washpost.com.

Charles Krauthammer

Charles Krauthammer is a columnist for the Washington Post Writers Group. His e-mail address is letters@charleskrauthammer.com.

AUSTIN, Tex. — Even as evidence mounts that the Great Recession has finally released its chokehold on the American economy, experts worry that the recovery may be weak, stymied by consumers’ reluctance to spend.

Given that consumer spending has in recent years accounted for 70 percent of the nation’s economic activity, a marginal shrinking could significantly depress demand for goods and services, discouraging businesses from hiring more workers.

Millions of Americans spent years tapping credit cards, stock portfolios and once-rising home values to spend in excess of their incomes and now lack the wherewithal to carry on. Those who still have the means feel pressure to conserve, fearful about layoffs, the stock market and real estate prices.

“We’re at an inflection point with respect to the American consumer,” said Mark Zandi, chief economist at Moody’s Economy .com, who correctly forecast a dip in spending heading into the recession, and who provided data supporting sustained weakness.

“Lower-income households can’t borrow, and higher-income households no longer feel wealthy,” Mr. Zandi added. “There’s still a lot of debt out there. It throws a pall over the potential for a strong recovery. The economy is going to struggle.”

In recent weeks, spending has risen slightly because of exuberant car buying, fueled by the cash-for-clunkers program. On Friday, the Commerce Department said spending rose 0.2 percent in July from the previous month. But most economists see this activity as short-lived, pointing out that incomes did not rise. Some suggest the recession has endured so long and spread pain so broadly that it has seeped into the culture, downgrading expectations, clouding assumptions about the future and eroding the impulse to buy.

The Great Depression imbued American life with an enduring spirit of thrift. The current recession has perhaps proven wrenching enough to alter consumer tastes, putting value in vogue.

“It’s simply less fun pulling up to the stoplight in a Hummer than it used to be,” said Robert Barbera, chief economist at the research and trading firm ITG. “It’s a change in norms.”

Here in Austin, a laid-back city on the banks of the Colorado River, change is palpable.

A decade ago, Heather Nelson gained a lucrative job in telecommunications and celebrated by buying a new Ford sport utility vehicle with leather seats and an expensive stereo system. Today, Ms. Nelson, 38, again has designs on a new vehicle, but this time she plans to buy a Toyota Prius, the fuel-efficient hybrid.

In December, Ms. Nelson was laid off from her six-figure job as a patent attorney at a local software firm. Self-assured, she exudes confidence she will land another high-paying position.

But even if her spending power is restored, Ms. Nelson says her inclination to buy has been permanently diminished. Through nine months of joblessness, she has learned to forgo the impulse buys that used to provide momentary pleasure — $4 lattes at Starbucks, lip gloss, mints. She has found she can survive without the pedicures and chocolate martinis that once filled regular evenings at the spa. Before punishing heat and drought turned much of central Texas brown, she subsisted primarily on vegetables harvested from her plot at a community garden, where only one oasis of flowers remains.

Once intent on buying a home, Ms. Nelson now feels security in remaining a renter, steering clear of the shark-infested waters of the mortgage industry.

“I’m having to shift my dreams to accommodate the new realities,” she said. “Now, I have more of a bunker mentality. If you get hit hard enough, it lasts. This impact is going to last.”

For years, Americans have tapped stock portfolios and borrowed against homes to fill wardrobes with clothes, garages with cars and living rooms with furniture and electronics. But stock markets have proven volatile. Home values are sharply lower. Banks remain reluctant to lend in the aftermath of a global financial crisis.

Households must increasingly depend upon paychecks to finance spending, a reality that seems likely to curb consumption: Unemployment stands at 9.4 percent and is expected to climb higher. Working hours have been slashed even for those with jobs.

Economists subscribe to a so-called wealth effect: as households amass wealth, they tend to expand their spending over the following year, typically by 3 to 5 percent of the increase.

Between 2003 and 2007 — prime years of the housing boom — the net worth of an American household expanded to about $540,000, from about $400,000, according to an analysis of federal data by Moody’s Economy.com.

Now, the wealth effect is working in reverse: by the first three months of this year, household net worth had dropped to $421,000.

“Not only have people lost money, but they don’t expect as much appreciation in the money they have, and that should affect consumption,” said Andrew Tilton, an economist at Goldman Sachs. “This is a cultural shift going on. People will save more.”

As recently as the middle of 2007, Americans saved less than 2 percent of their income, according to the Bureau of Economic Analysis. In recent months, the rate has exceeded 4 percent.

Austin has fared better than most cities during the recession. Increased government payrolls enabled by the state’s energy wealth have largely compensated for layoffs in construction and technology. Local unemployment reached 7.1 percent in June — well below the national average. Housing prices have mostly held. Yet even people with high incomes appear reluctant to spend.

“The only time you do a lot of business is when you throw a sale,” said Pat Bennett, a salesman at a Macy’s in north Austin. “You see very little impulse buying. They come in saying, ‘I need a pair of underwear,’ and they get it and leave. You don’t really see them saying, ‘Oh, I love the way that shirt looks, and I’m just going to get it.’ ”

Mr. Bennett attributes frugality to a general uneasiness about the future.

“Our parents had the Depression,” Mr. Bennett said. “This is like a mini-shock for the baby boomers after the go-go years.”

At a mall devoted to home furnishings, many storefronts were vacant, and survivors were draped in the banners of desperation: “Inventory Clearance,” “50% Off,” “It’s All On Sale.”

But at the Natural Gardener — a lush assemblage of demonstration plots that sells seeds, plants and tools for organic gardening — business has never been better.

Sales of vegetable plants swelled fivefold in March over past years. The company added a public address system and bleachers to accommodate hordes showing up for vegetable-growing classes.

Part of the embrace of gardening stems from concerns about the environment and food safety, says the company’s president, John Dromgoole. Momentum also reflects desire to save on food costs.

“People are very interested in shoring up against losing their jobs,” he said.

July 14, 2009 in Nation/World

Fed boss says U.S. economy should start growing again soon

Bernanke

JACKSON, Wyo. – Federal Reserve Chairman Ben Bernanke on Friday offered his most optimistic outlook since the financial crisis struck, saying the economy is on the verge of growing again.

Speaking at an annual Fed conference, Bernanke acknowledged no missteps by the central bank in managing the worst crisis since the Great Depression. But he conceded that consumers and businesses are still having trouble getting loans, even though the financial system is gradually stabilizing.

Economic activity in both the U.S. and around the world seems to be leveling out, and the economy is likely to start growing again soon, Bernanke said.

Bernanke’s hopeful remarks on the economy contributed to a rally on Wall Street. The Dow Jones industrial average surged about 155 points, or 1.7 percent, and broader stock averages also gained sharply.

Despite his upbeat tone, Bernanke cautioned that the recovery is likely to be “relatively slow at first.”

Unemployment, now at 9.4 percent, is widely expected to hit double digits later this year and to remain high for many months.

The financial markets have stabilized, and some businesses and consumers have found it easier to get loans. Still, the banking system has yet to return to normal, Bernanke said.

Financial institutions face further losses on soured investments. And many businesses and households still can’t get the credit they need to fuel the economy, he said.

“Although we have avoided the worst, difficult challenges still lie ahead,” Bernanke told the gathering of fellow bankers, academics and economists. “We must work together to build on the gains already made to secure a sustained economic recovery.”

Reviewing the past year’s crisis, Bernanke outlined the many emergency measures the Fed and other regulators took to help ward off a global financial meltdown. He declined to acknowledge critics’ arguments that regulators failed to detect signs of the crisis before it occurred – or that Wall Street bailouts sent a message that big companies that make reckless bets would be rescued with taxpayer money.

A $700 billion taxpayer-funded bailout program to prop up financial institutions incensed many Americans. So did the repeated bailouts of AIG, which paid hefty bonuses to employees who worked in the division that brought down the firm.

Some analysts said Bernanke appeared to be angling to keep his job for another term.

“The lack of any mea culpa suggests the Fed chairman wants to be reappointed,” said Richard Yamarone, economist at Argus Research. “When you go on an interview, you never speak of your shortcomings.”

President Barack Obama will have to decide in coming months whether to reappoint or replace Bernanke, whose term expires early next year.

The bulk of Bernanke’s speech chronicled the extraordinary events of the past year.

Financial markets took a dizzying plunge starting in September and into October, nearly shutting down the flow of credit. The crisis felled storied Wall Street firms. The government took over mortgage giants Fannie Mae and Freddie Mac, as well as insurance titan American International Group Inc.

Lehman Brothers failed. It filed for bankruptcy on Sept. 15, the largest in corporate history, roiling markets worldwide.

The Fed swooped in with unprecedented emergency lending programs to fight the crisis. It eventually slashed a key bank lending rate to a record low near zero. And Congress enacted programs to stimulate the economy, including a $787 billion package of tax cuts and increased government spending.

“Without these speedy and forceful actions, last October’s panic would likely have continued to intensify, more major firms would have failed and the entire global financial system would have been at serious risk,” Bernanke said.

Unlike in the 1930s, Washington policymakers this time acted aggressively and quickly to contain the crisis, said Bernanke, a scholar of the Great Depression.

“As severe as the economic impact has been, however, the outcome could have been decidedly worse,” he said.

Global cooperation in battling the crisis was crucial, with central banks slashing interest rates and the U.S. and other governments delivering fiscal stimulus, he said.

David S. Broder is a columnist for the Washington Post. His e-mail address is davidbroder@washpost.com.

Republican Senator Cites Policy Disagreements As Congress Prepares to Vote on Stimulus Plan

By Anne E. Kornblut and Michael D. Shear
Washington Post Staff Writers
Friday, February 13, 2009

Saying he “made a mistake,” Republican Sen. Judd Gregg withdrew yesterday as the nominee for commerce secretary, dealing a fresh blow to President Obama’s quest to fill out his Cabinet and dramatically undercutting his efforts to forge a new bipartisanship in the capital.

Gregg said that he had simply lacked foresight and that he shouldered the burden of the decision entirely. “I should have focused sooner and more effectively on the implications of being in the Cabinet versus myself as an individual doing my job,” he said at a news conference on Capitol Hill.

He cited concerns about Obama’s economic recovery plan and the administration’s intent to have the next census director report to senior White House officials as well as the commerce secretary.

The timing of Gregg’s communication with the White House about his decision was murky through much of the day, as the president’s aides scrambled to revise their sometimes conflicting statements about when Obama was notified. Returning to Washington from Springfield, Ill., Obama told reporters on Air Force One that he learned just yesterday of Gregg’s decision. He later clarified that he had spoken with the senator from New Hampshire a day earlier but “wasn’t sure whether he’d made a final decision.”

The episode underscored how burdensome Cabinet selection has become for the new administration, which has watched nearly half a dozen of its top appointees withdraw or face embarrassing scrutiny over the past several weeks. The slip-ups have caused the White House to revamp its vetting process and have slowed down confirmations for nominees already in the pipeline.

And now Obama is left with two key openings — at the departments of Commerce and Health and Human Services — and more questions about his personnel choices.

Gregg’s withdrawal comes as Congress prepares for final passage of a $789 billion stimulus package; Obama previously got no Republican votes for the legislation in the House and only three in the Senate.

Senior Obama officials portrayed the latest personnel debacle as reflecting badly on Gregg alone, insisting they are still on course to change the tone in Washington and implement the president’s policies. But aides acknowledged that it is now clear that Obama has not been rewarded for reaching across the aisle, and they said he feels no imperative to replace Gregg with another Republican.

Gregg’s confirmation would have given Obama more Republican Cabinet members than any Democratic president in history. Obama himself wasted no time making clear that Gregg was responsible for first seeking, and then rejecting, the position, despite efforts to accommodate him.

“It comes as something of a surprise, because the truth, you know, Mr. Gregg approached us with interest and seemed enthusiastic,” Obama said in an interview yesterday with the State Journal-Register in Springfield. “But ultimately, I think, we’re going to just keep on making efforts to build the kind of bipartisan consensus around important issues that I think the American people are looking for.”

Though the news came as a shock to the political establishment, White House officials said they had an inkling of Gregg’s unease. Chief of Staff Rahm Emanuel said Gregg called him Monday to say he was having second thoughts. Obama met with Gregg privately at the White House on Wednesday, according to Emanuel, and the three-term senator said he was leaning toward dropping out.

Gregg made the decision public yesterday afternoon, becoming the second Commerce Department nominee in two months to withdraw from consideration.

“It’s better we discover it now than later,” Emanuel told reporters last night. Asked what had motivated Gregg, the chief of staff replied: “I’m not going to play psychologist or get into his head.” Gregg and administration officials alike said there had been no vetting issues involved.

The timing was unfortunate for Obama, who had sought to focus on promoting his economic recovery plan yesterday, as well as to celebrate the 200th birthday of Abraham Lincoln, whose spirit of unity Obama has claimed as his own.

As the news unfolded, Obama was on his way to a dinner in Lincoln’s honor in Springfield. White House officials rushed to contain the fallout, pointing to Gregg’s seemingly peculiar decision to accept a job that would, by definition, require him to adhere to the positions that he later claimed drove him away. Administration officials rejected the idea that the size of the economic stimulus package, or other Democratic policies, had alienated Gregg.

In his statement, Gregg said that “on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns.”

“I think what ended Judd Gregg’s hope of and desire of being the commerce secretary wasn’t anything any Democrat said or did, but what Republicans said and did,” a senior administration official said, speaking on the condition of anonymity. Democratic officials said they believed Gregg would have potentially faced rough questioning from Republicans during his confirmation hearings as they worked to find the GOP’s footing as an opposition party.

The withdrawal raised new questions about whom Obama can safely choose for the commerce spot. A senior official said the president was not quite back at ground zero in the selection process. Still, there were no obvious alternatives.

After losing New Mexico Gov. Bill Richardson (D) and then Gregg, Obama could turn to Symantec chief John Thompson, a Silicon Valley executive. But as a wealthy businessman, Thompson could have complicated finances, a situation Obama might want to avoid after the tax problems that have plagued other nominees.

Tax issues felled his pick to lead Health and Human Services, former senator Thomas A. Daschle (D-S.D.), and he has yet to announce a replacement.

Asked whether Obama had suffered a blow in his efforts to recruit Republicans, White House press secretary Robert Gibbs said he had not. “I’m standing in East Peoria with Ray LaHood,” Gibbs said by phone, referring to the Republican transportation secretary.

Nonetheless, Gregg’s withdrawal sharpened the already palpable sense in Washington that Obama’s promise of a new era of bipartisanship is seriously faltering. Just days after his historic inauguration, Obama held an unprecedented pair of closed-door meetings with Republicans on Capitol Hill — meetings that, despite the kind words from GOP lawmakers that followed, yielded no results measured in votes.

By the time the president’s stimulus package passed the Senate this week, all but three GOP members of Congress were lined up against it, complaining furiously that Obama and his allies were forcing a bloated, liberal bill down their throats.

“Despite our repeated attempts to work with President Obama and the Democrat Majority, Speaker Pelosi has refused to meet with us, or even include us in key negotiations, choosing instead to stick with a pork-filled bill that even members of her own party do not support,” said a statement from Rep. Eric Cantor (R-Va.), the minority whip.

Obama and his top aides tried furiously all week to rebut that cha rge. In his prime-time news conference Monday, the president said his efforts at bipartisanship were “designed to try to build up some trust over time.”

Staff writers Alec MacGillis and Michael A. Fletcher contributed to this report.

WASHINGTON — The White House plan to rescue the nation’s financial system, announced on Tuesday by Timothy F. Geithner, the Treasury secretary, is far bigger than anyone predicted and envisions a far greater government role in markets and banks than at any time since the 1930s.

Administration officials committed to flood the financial system with as much as $2.5 trillion — $350 billion of that coming from the bailout fund and the rest from private investors and the Federal Reserve, making use of its ability to print money.

Mindful of previous financial crises at home and abroad that became protracted because governments moved too slowly, Mr. Geithner pointedly criticized the Bush administration for not acting boldly and quickly enough.

But the initial assessment of the plan from the markets, lawmakers and economists was brutally negative, in large part because they expected more details.

Basic questions about how the various parts of the program would work, especially those involving the unsellable mortgages that banks are holding and preventing home foreclosures, were left for another day. Some Wall Street experts criticized the plan for relying too heavily on the same vague solutions proposed by the Bush administration.

The stock market, propped up for weeks on the expectation that Washington would finally deliver a comprehensive rescue plan, dipped almost as soon as Mr. Geithner began speaking in the morning. The Dow Jones industrial average fell 382 points, or 4.6 percent, by the time the market closed. Yields on Treasury bills dropped, indicating a flight from stocks to the safety of government bonds. Asian markets slipped more narrowly.

While traveling in Fort Myers, Fla., President Obama welcomed the news that the Senate voted 61-37 to approve its $838 billion economic stimulus bill Tuesday, but dismissed the market reaction to his bank rescue plan.

“Wall Street, I think, is hoping for an easy out on this thing and there is no easy out,” Mr. Obama said in an interview with ABC News.

Many of the vital details of the program remain unsettled and are the subject of an intense behind-the-scenes debate.

The president himself had built up expectations that the plan would get ahead of the crisis — and not lurch from pillar to post as the Bush administration did last year, often in partnership with the New York Federal Reserve under its then-president, Mr. Geithner.

A central piece of the plan — and the one item that investors most craved information about — would create one or more so-called bad banks that would rely on taxpayer and private money to purchase and hold banks’ bad assets. But the administration provided the least amount of details about this part of the plan.

Another centerpiece of the plan would stretch the last $350 billion that the Treasury has for the bailout by relying on the Federal Reserve’s ability to create money, in effect, out of thin air. The Fed’s money will enable the government to become involved in the management of markets and banks in ways not seen since the Great Depression.

In the credit markets, for instance, the administration and the Fed are proposing to expand a lending program that would spend as much as $1 trillion to make up for the $1.2 trillion decline between 2006 and last year in the issuance of securities backed primarily by consumer loans.

The plan’s third major component would give banks new helpings of capital with which to lend. Banks that receive new government assistance will have to cut the salaries and perks of their executives and sharply limit dividends and corporate acquisitions.

They will also have to make public more information about their lending practices. A Treasury fact sheet said that banks would have to state monthly how many new loans they make, but stopped short of ordering banks to issue new loans or requiring them to account in detail for the federal money.

Mr. Obama, in the ABC News interview, suggested that banks would be required to reveal more about their mortgage holdings.

“Essentially what you’ve got are a set of banks that have not been as transparent as we need to be in terms of what their books look like. And we’re going to have to hold out the Band-Aid a little bit and go ahead and just be clear about some of the losses that have been made because until we do that, we’re not going to be able to attract private capital into the marketplace.”

The day was the first big test of Mr. Geithner as Treasury secretary, who has one of the toughest sells in America: convincing lawmakers and taxpayers that they should again bail out the very banks whose mistakes contributed to the loss of more than three million jobs and caused acute financial pain.

It was clear during the hours he spent before the cameras and lawmakers that he was well-spoken and thoughtful. But his career until now had played out behind the scenes as a civil servant and a central banker. He occasionally lapsed into financial jargon and struggled to connect to a broader public audience.

As the day wore on, Mr. Geithner faced growing skepticism from Democratic and Republican lawmakers, many of them channeling deep voter disgust with the way the government has handled the bailout over the last nine months.

Even Democrats who are supportive of the administration said that it had failed to provide more information about how it would be spending the remaining money in the bailout program.

“We need more details from Treasury on how exactly it plans to remove bad assets while protecting the taxpayer,” said Senator John Kerry, the Massachusetts Democrat who is a senior member of the Senate Finance Committee. “We have zombie banks that are weighed down because their liabilities exceed their assets. Without a precise mechanism for addressing toxic assets, it will be difficult to increase lending.”

The pessimism seemed to indicate that Mr. Geithner missed the mark with one of his shorter-term goals — to quickly instill confidence that the Obama administration has a coherent approach to the banking crisis and that the transparency and oversight of the new program will differ markedly from the Bush administration’s management of the first $350 billion that Congress authorized last year for the Troubled Asset Relief Program, or TARP.

“The spectacle of huge amounts of taxpayer money being provided to the same institutions that helped cause the crisis, with limited transparency and oversight, added to the public distrust,” the Treasury secretary said, in a clear swipe at the Bush administration.

“We will have to try things we’ve never tried before. We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted,” Mr. Geithner said.

Representative Barney Frank, the Massachusetts Democrat who heads the House Financial Services Committee, criticized the Obama administration for not putting out more details and said it should commit more than $50 billion to avert home foreclosures.

“The secretary said the administration would present details of their foreclosure reduction plan in a few weeks, which is too much time,” Mr. Frank said.

Appearing on Tuesday afternoon before the Senate banking committee, Mr. Geithner vowed to move quickly to provide more details. But Republicans were skeptical.

“Is there a concrete plan here?” Richard Shelby of Alabama, the senior Republican on the committee, asked Mr. Geithner point blank, after noting that Mr. Geithner had been part of the leadership involved in last year’s bailout efforts. “What is different about the process that you are offering here to devise your plan such that we should have confidence that it is well thought out?”

There was also withering criticism from Wall Street. Ethan Harris, co-head of United States economics research at Barclays Capital, said the program was “shock and uh.” He said the Treasury made a “tactical mistake” by building up expectations about a plan before it had much to announce.

“What’s striking is that these are not new issues that they are facing,” Mr. Harris said. “These are the same issues that the Treasury faced last fall — how do we price the assets? The fact that it’s so been so difficult to figure out the answer may tell you something about whether it’s worth doing or not.”

Mr. Harris warned that setting up a so-called bad bank would be very expensive, as Mr. Geithner himself acknowledged when he set the goal of creating a fund that would reach $1 trillion. Frank Pallotta, a former managing director at Morgan Stanley and a veteran mortgage trader, said the gap was so wide between what banks were valuing their assets and what investors were willing to pay that the government would attract investors to buy only if it provided a subsidy of one form or another.

“Right now, the banks aren’t selling anything,” said Mr. Pallotta, now a consultant to both buyers and sellers of distressed mortgages. “You have Chase thinking that its assets are worth 75 cents on the dollar, and Joe Hedge Fund who thinks they are only worth 45 or 25. There is a huge gap, and the government has to find out if there is some middle point where they can get in.”

Mr. Pallotta said he did not fault the Treasury for failing to offer specifics yet, but he said it could not delay for long. “If we don’t hear in the next 30 days about how this thing will flesh out, then I would be upset.”

Jeff Zeleny contributed reporting from Fort Myers, Fla.

Cal Thomas is a columnist for Tribune Media Services.

Trudy Rubin is a columnist for the Philadelphia Inquirer. Her e-mail address is trubin@phillynews.com.

Beth Thew is secretary-treasurer of the Spokane Regional Labor Council, AFL-CIO.

Charles Krauthammer is a columnist for the Washington Post Writers Troup. His e-mail address is letters@charleskrauthammer.com.

WASHINGTON — Senate Democrats reached an agreement with Republican moderates on Friday to pare a huge economic recovery measure, clearing the way for approval of a package that President Obama said was urgently needed in light of mounting job losses.

The deal, announced on the Senate floor, was a result of two days of tense negotiations and political theater. Mr. Obama dispatched his chief of staff to Capitol Hill to help conclude the talks and reassure senators in his own party, and he called three key Republicans to applaud them for their patriotism.

Earlier, when it looked as if a vote might take place Friday night, officials said, a government plane was dispatched to Florida to bring back Senator Edward M. Kennedy, a Massachusetts Democrat who has brain cancer.

The fine print was not immediately available, and the numbers were shifting. But in essence, the Democratic leadership and two centrist Republicans announced they had struck a deal on about $110 billion in cuts to the roughly $900 billion legislation — a deal expected to provide at least the 60 votes needed to send the bill out of the Senate and into negotiations with the House, which has passed its own version.

The pact, which is expected to be approved in the next few days, was concluded just hours after the Labor Department announced that 598,000 jobs were lost in January. The contraction in jobs is already steeper than in any other recession since at least the early 1980s. And economists warn that several more shoes are about to drop, a message that added urgency to the Senate deliberations.

As the negotiations were under way, lawmakers said it was time to stop quibbling about the exact parameters of the legislation — which mixes safety-net spending, tax cuts and a huge infusion of dollars into federal programs — and to begin work toward a final agreement that could be sent to Mr. Obama next week.

“Our country can’t wait another day for another approach,” said Senator Ben Nelson, a Nebraska Democrat who is a leader of the bipartisan coalition that worked out the agreement.

The details were negotiated at an afternoon meeting in the office of the Senate majority leader, Harry Reid of Nevada, involving Mr. Reid, other top Democrats and two Republicans, Susan Collins of Maine and Arlen Specter of Pennsylvania. After they came to terms, the senators brought in the White House chief of staff, Rahm Emanuel, for assurance that the deal was acceptable to the administration. Mr. Emanuel signaled it was.

“With today’s unemployment numbers reaching more than 3.6 million workers,” Mr. Emanuel said after the session, “delay and failure were not an option.”

Mr. Obama called Ms. Collins and Mr. Specter, as well as Senator Olympia J. Snowe of Maine, another Republican expected to support the deal, to acknowledge they were acting against pressure from their party and, one official said, to thank them for their patriotism in helping advance the bill at a critical time.

Earlier in the day, Mr. Obama urged Congress to act expeditiously. “It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work,” said Mr. Obama, who has recently shown less patience for Republican resistance to the bill.

Most Senate Republicans remained opposed to the measure, criticizing it as a case study in excessive spending that would do little to lift the economy. Some conservatives indicated Friday night that they would push for time to study the new legislation before any final vote.

“We want to stimulate the economy, not mortgage the future of our children and grandchildren by the kind of fiscally profligate spending embodied in this legislation,” said Senator John McCain of Arizona, the defeated Republican presidential nominee, who has emerged as a chief opponent of the proposal.

Republicans were clearly irritated at the outcome and faulted those involved in working out the bargain. “When you say this was the best we could do, I disagree with you,” Senator Lindsey Graham of South Carolina said on the floor. “This not remotely close to what we could have done if we had sat down in a true bipartisan fashion and found a better way.”

The Senate’s proposed cuts took aim at an array of popular spending programs that critics said should not be part of a fiscal recovery bill, even if they represent laudable policy goals, because they would not deliver a quick enough jolt to the economy.

Even Mr. Obama’s signature tax cut for middle-class Americans was scaled back as part of the deal. Under the new plan, tax credits of up to $500 for individuals and $1,000 for couples would begin to phase out at lower income levels than first proposed, saving the government $2 billion.

The biggest cut, roughly $40 billion in aid to states, was likely to spur a fierce fight in negotiations with the House over the final bill. Many states, hit hard by the recession, face wrenching cuts in services and layoffs of public employees as they struggle to comply with laws requiring them to balance their budgets.

When debate began this week, the price tag on the Senate version of the stimulus bill was roughly $884 billion, but it grew to more than $900 billion as senators added provisions including tax breaks totaling $30 billion for purchases of homes and cars.

Lawmakers said that by poring over the 736-page bill they had excised about $110 billion, bringing the total cost to about $780 billion — $40 billion less than the stimulus bill approved by the House last week. Because of consumer tax breaks and spending for health research that had been added in the Senate, the new total for the measure could be about $820 billion. But even the senators behind the compromise were uncertain of the number.

In addition to the large cut in state aid, the Senate agreement would cut nearly $20 billion proposed for school construction; $8 billion to refurbish federal buildings and make them more energy efficient; $1 billion for the early childhood program Head Start; and $2 billion from a plan to expand broadband data networks in rural and underserved areas.

The administration had initially hoped that it could win the support of as many as 80 senators, but that goal disappeared after House Republicans voted unanimously against the measure. As questions were raised about the total spending, getting even three or four Republican senators to sign on became difficult.

Ms. Collins said she believed the changes had significantly improved the measure. Mr. Specter said that while he still had reservations, he had come to accept Mr. Obama’s push to enact the economic plan by mid-February. “I believe we do have to act,” Mr. Specter said, “and under the circumstances this is the best we can do.”

But several other Republicans who had taken part in the talks said they could not support the compromise.

“Unfortunately, there was too much in the Democratic counterproposal that was not stimulative,” said Senator George V. Voinovich of Ohio, “and that did not provide the jump-start our economy so desperately needs.”

The Senate Republican leader, Mitch McConnell of Kentucky, said most Republicans remained unconvinced that the package would reinvigorate the economy.

“You have to balance the likelihood of success versus the crushing debt that we’re levying on the backs of our children, our grandchildren and, yes, their children,” Mr. McConnell said.

Mr. Reid urged Republicans to get behind the plan. “This is a critical day for this new Congress and our country,” he said. “Faced with this grave and growing economic crisis, Republicans must decide today whether they will join the president and Congressional Democrats on that road to recovery.”

WASHINGTON — President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions.

“There will be time for them to make profits, and there will be time for them to get bonuses,” Mr. Obama said during an appearance in the Oval Office with Treasury Secretary Timothy F. Geithner. “Now’s not that time. And that’s a message that I intend to send directly to them, I expect Secretary Geithner to send to them.”

It was a pointed — if calculated — flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail. He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the $700 billion already authorized, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as $900 billion.

This week alone, American companies reported as many as 65,000 job cuts, and public anger is rising over reports of profligate spending by banks and investment firms that are receiving help from the $700 billion bailout fund. About half of that money is still available, but the new administration has yet to announce how it will use it, and many analysts think it will take far more to stabilize the banking system.

Should Mr. Obama have to go to Congress to seek more money for the bailout fund to avert the failure of more banks, he would most likely encounter opposition within both parties and demands for tighter restrictions on pay for executives of institutions that receive government assistance.

Mr. Geithner has already signaled a willingness to impose stricter compensation limits as part of a revamped approach to dealing with the banking crisis, but with his strong words on Thursday, Mr. Obama seemed intent on reassuring Congress and the public that he would step up the pressure on bankers before granting them additional assistance.

Mr. Obama was reacting to a report by the New York State comptroller that found financial executives had received an estimated $18.4 billion in bonuses for 2008, less than for the previous several years but the same level of bonuses as they received in 2004, when times were flush.

“That is the height of irresponsibility,” Mr. Obama said. “It is shameful. And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.”

The Obama administration and lawmakers have begun to consider ways to control executive pay; the bailout fund, known as the Troubled Asset Relief Program, or TARP, would be the main vehicle for exerting such control. The administration of former President George W. Bush issued guidelines last October to try to control executive pay at companies receiving government help, but so far they have done little to curb large salaries.

During his confirmation hearings, Mr. Geithner said the administration is preparing rules that would require executives at companies receiving taxpayer money to agree that any compensation above a certain amount — he did not specify how much — be “paid in restricted stock or similar form” that could not be liquidated or sold until the government had been repaid.

Some lawmakers, meanwhile, have said they are considering so-called “clawback” provisions that could be invoked by the government to take back bonuses and executive pay from officials at companies that encountered problems.

In the meantime, public outrage is already forcing some companies to rein in their lavish spending. John A. Thain, the former Merrill Lynch executive who was forced out of Bank of America, said this week he would reimburse Bank of America for an expensive renovation of his office that included an $87,000 area rug and $35,000 commode.

But it took the urging of the Obama administration to force Citigroup, which received an infusion of taxpayer funds last year, to abandon plans to buy a $50 million corporate jet. On Thursday, Mr. Obama made reference to the jet, without singling out Citigroup by name; his remarks came one day after the president met at the White House with business leaders, including Richard D. Parsons, the new chairman of Citigroup.

On Capitol Hill, Senator Christopher J. Dodd of Connecticut, the chairman of the Senate Banking Committee, issued his own warning on Thursday, saying companies would be summoned to testify if taxpayer money was involved.

“Whether it was used directly or indirectly, this infuriates the American people and rightly so,” Mr. Dodd said. “So I say to anyone else who does it, if you do it, I’m going to bring you before the committee.”

There is also political pressure to rein in pay in industries beyond banks and investment firms. The pressure reflects the substantial disparities between pay increases for senior executives, the low rate of wage growth for workers and the frequent disconnect between compensation and the long-term strategic success or failure of corporations.

Mr. Obama’s message on Thursday was reinforced by Vice President Joseph R. Biden Jr., who pledged in an interview with CNBC and The New York Times that the government would spend the remaining $350 billion of the troubled assets money “wisely and prudently and transparently.”

Mr. Biden said that he, like the president, was outraged by reports of large bonuses going to Wall Street executives.

“I’d like to throw these guys in the brig,” he said. “They’re thinking the same old thing that got us here, greed. They’re thinking, ‘Take care of me.’  ”

John Harwood contributed reporting.

UPDATE

In Curbing Pay, Obama Seeks to Alter Corporate Culture

WASHINGTON — In announcing executive pay limits on Wednesday, President Obama is trying to hold the financial industry accountable to taxpayers while aiming to change an entrenched corporate culture that endorses outsize bonuses and perks that often bear little relationship to corporate performance.

Mr. Obama also needs to deflect a growing populist outrage over sky-high pay among the banks and other companies now on the public dole. His announcement comes just days before the administration is expected to unveil a new strategy — and possibly request more money from Congress — to guarantee or buy outright hundreds of billions of dollars in bad assets held by banks.

The new rules would set a $500,000 cap on cash compensation for the most senior executives, curtail severance pay when top executives left a company, restrict cashing in on stock incentives until government assistance was repaid and prod corporate boards to closely scrutinize luxury perquisites like private jets and country club memberships.

The plan’s effectiveness in curbing executive pay may not be known for years, however. Past administrations have also been critical of excessive pay, but corporate executives have found ingenious ways around limits, often hiring consultants to create new forms of compensation.

Even the new rules allow companies some leeway. While giving shareholders a say in bonuses above the cap and restricting when stock incentives can be cashed in, the rules do not place limits on the size of such awards, which have become the biggest part of many compensation packages. In addition, the toughest new rules apply only to large companies seeking government assistance to survive.

They do not apply to the more than 350 institutions that have already received bailout funds, only to those that seek aid under the next phase of the bailout program. And companies that seek aid but do not need exceptional government assistance can waive the $500,000 pay cap, as long as they submit their executive pay policies to a nonbinding shareholder vote.

Still, the rules represent the most comprehensive effort to curb compensation. “This is America,” Mr. Obama said on Wednesday. “We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we believe that success should be rewarded. But what gets people upset — and rightfully so — are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.”

In 2007, the latest year that figures are available, the largest participants in the bailout program paid their chief executives an average compensation of $11 million, including salary, bonus and benefits. Of that amount, according to a review by Equilar, an executive compensation firm, only about $844,000 was cash salary. About $2.5 million was in a cash bonus, with the bulk — $7.4 million — in stock awards, and the remainder in benefits and perks.

If banks return to the government for more money, the new rules would require a reduction in pay, but not in stock awards, though these would be subject to a non-binding vote of the shareholders and would be in the form of long-term incentives because of restrictions on when they could be cashed in.

The plan will most likely force companies to think twice before coming to Washington for a handout, and it is certain to nudge them to return taxpayer loans more quickly.

On Wednesday, for instance, David A. Viniar, the chief financial officer of Goldman Sachs, which received $10 billion from the Treasury Department, told analysts that his firm wanted to repay the government as quickly as feasible to “be under less scrutiny and under less pressure,” according to Bloomberg News.

The Financial Services Roundtable, which lobbies on behalf of banks and other financial institutions, said that giving shareholders a vote on pay could discourage companies from seeking aid.

The rules would not prohibit a lower-level executive, like a stock trader or investment banker, from continuing to receive tens of millions of dollars in pay. Officials also emphasized that several of the proposals would not be made final until after public comments had been considered.

Still, investor groups, union leaders and lawmakers in both parties embraced the proposal.

“There is absolutely no reason why hard-working American taxpayers should be financing, directly or indirectly, excessive compensation for corporate executives whose decisions, in many cases, have crippled their firms and weakened the broader economy,” said Senator Christopher J. Dodd, the Connecticut Democrat who heads the Senate banking committee.

Representative John A. Boehner of Ohio, the Republican minority leader, said that pay limits would be more equitable for rank-and-file taxpayers. “If anyone is looking for the taxpayer to help bail their company out,” he said, “these types of executive pay caps are appropriate.”

Officials said that the larger goal of the proposal was to make the boards of major corporations across a wide range of industries award pay packages more consistent with corporate earnings.

Appearing with Treasury Secretary Timothy F. Geithner, the architect of the plan, Mr. Obama repeated a theme that he began last week of attacking Wall Street for its excessive compensation.

“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it’s a bad strategy, and I will not tolerate it as president,” Mr. Obama said. He said such pay is “exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis — a culture of narrow self-interest and short-term gain at the expense of everything else.”

During the Bush administration, the Securities and Exchange Commission adopted new rules promoting better public disclosure of executive compensation as a way to discourage pay not tied to performance. Treasury Secretary Henry M. Paulson Jr. also criticized excessive pay as a factor contributing to the crisis on Wall Street and tried to impose some limits on banks receiving bailout funds.

But none of that put a significant dent in executive pay. A recent study by Equilar, a compensation research firm, found that the chief executives of the 10 largest financial services firms in a survey of 200 companies with revenue of at least $6.5 billion were awarded a total of $320 million last year, even though the companies had mortgage-related losses of $55 billion.

Some companies may not find the new pay curbs all that burdensome. The plan does not limit the size of bonuses that can take the form of restricted stock above the $500,000 cap — though companies would have to give shareholders a nonbinding vote on such awards.

Indeed, troubled financial institutions are already giving executives significant sums of restricted stock — shares that are locked up for years and can be sold only under specified conditions — in part because they are trying to preserve cash. Alan Johnson, managing director of Johnson Associates, a Wall Street pay consulting firm, said that in some cases, restricted stock was making up 60 percent of executives’ total compensation.

Mr. Johnson said the new restrictions could make it harder for the government to resuscitate ailing firms by making it harder for them to retain and recruit talented executives.

The plan does not appear to prohibit a financial institution from sponsoring a major golf tournament that most of its executives attend as part of the company’s marketing strategy. At a White House briefing, senior officials repeatedly declined to answer whether the plan would prohibit a company like Citigroup from paying $400 million to have its name on a baseball stadium. It is also unclear whether lucrative pension plans would be banned.

The administration will have to determine how broadly to apply the most severe restrictions as the TARP program is revised. If the new strategy envisions that many banks will be eligible for assistance, as they have in the past, then the less restrictive pay rules would apply to them.

Eric Dash contributed reporting from New York, and Jeff Zeleny from Washington.

WASHINGTON — Without a single Republican vote, President Obama won House approval on Wednesday for an $819 billion economic recovery plan as Congressional Democrats sought to temper their own differences over the enormous package of tax cuts and spending.

As a piece of legislation, the two-year package is among the biggest in history, reflecting a broad view in Congress that urgent fiscal help is needed for an economy in crisis, at a time when the Federal Reserve has already cut interest rates almost to zero.

But the size and substance of the stimulus package remain in dispute, as House Republicans argued that it tilted heavily toward new spending instead of tax cuts.

All but 11 Democrats voted for the plan, and 177 Republicans voted against it. The 244-to-188 vote came a day after Mr. Obama traveled to Capitol Hill to seek Republican backing, if not for the package then on other issues to come.

Mr. Obama, in a statement hailing the House passage of the plan, did not take note of the partisan divide but signaled that he expected changes to be made in the Senate that might attract support.

“I hope that we can continue to strengthen this plan before it gets to my desk,” he said. “But what we can’t do is drag our feet or allow the same partisan differences to get in our way. We must move swiftly and boldly to put Americans back to work, and that is exactly what this plan begins to do.”

Mr. Obama followed the House vote with a cocktail party at the White House for the Congressional leaders of both parties, from the House and the Senate. The House Republicans, including the minority leader, Representative John A. Boehner of Ohio, were fresh from their votes against the recovery package.

The failure to win Republican support in the House seemed to echo the early months of the last Democratic administration, when President Bill Clinton in 1993 had to rely solely on Democrats to win passage of a deficit-reduction bill that was a signature element of his presidency.

Mr. Obama’s chief of staff, Rahm Emanuel, had met Tuesday night at the White House with 11 moderate House Republicans, none of whom ended up supporting the bill. “The most important number here for this recovery plan is how many jobs it produces, not how many votes it gets,” Mr. Emanuel said.

As Senate Democrats prepare to bring their version of the package to the floor on Monday, House Democrats and the administration indicated they would ultimately accept a provision in the emerging Senate package that would adjust the alternative minimum tax to hold down many middle-class Americans’ income taxes for 2009. The provision was not in the House legislation.

Its cost would drive the overall package’s tally to nearly $900 billion. That would exceed the roughly $850 billion limit that Mr. Obama has set for Congress, House Democratic leadership aides said, and leave no room for other proposals that senators of both parties are poised to seek during Senate debate next week.

While the House and Senate measures are similar, they are most likely to differ in ways that could snarl negotiations between Democrats from the two chambers, and delay getting a measure to the president. In particular, House and Senate Democrats are split over how to divide $87 billion in relief to the states for Medicaid, with senators favoring a formula more beneficial to less-populous states.

Democrats’ own differences aside, they also are under pressure from the White House to be open to proposals from Senate Republicans who might support the final legislation if their interests are accommodated, and which might draw a few Republican supporters on a final vote next month in the House.

The provision on the alternative minimum tax, for example, was a priority for Senator Charles E. Grassley, Republican of Iowa, who added it Tuesday in the Finance Committee’s work on the legislation.

Democrats’ goal is to have the stimulus package, which is roughly two-thirds new spending and one-third tax cuts, to Mr. Obama’s desk for his signature by Feb. 13, before Congress breaks for Presidents’ Day.

“He said he wanted action, bold and swift, and that is exactly what we’re doing today,” Speaker Nancy Pelosi, Democrat of California, said as debate began.

Democrats voluntarily dropped from the package several provisions that Republicans had singled out for derision in recent days, including money to restore the Jefferson Memorial and for family planning programs. But the day’s debate contrasted with the president’s conciliatory gestures.

Representative Virginia Foxx, Republican of North Carolina, said that former President George Bush’s signature tax cuts in 2001 had created years of growth but that the nation’s problems started when Democrats regained majorities in Congress in the 2006 elections.

Representative Steny H. Hoyer, Democrat of Maryland and the majority leader, said that “the economics that got us into this mess” were the Republicans’ policies for the six years that Republicans controlled both the White House and Congress, through 2006.

The House voted down several Republican proposals, including a substitute package made up entirely of tax cuts for individuals and businesses. Republicans did not say how much their package would cost, although Mr. Boehner said it would be far less than the Democratic plan. That tax-cut-only approach was defeated on a mostly party-line vote of 266 to 170; two Democrats joined all but nine moderate Republicans in voting for the Republican plan.

By another near-party-line vote, 270 to 159, the House rejected a Republican plan to delete a number of spending programs, including several representing top campaign promises of Mr. Obama, and to add instead $36 billion for highway construction, more than doubling the $30 billion in the bill, and $24 billion for Army Corps of Engineers projects.

After the final vote, Representative Eric Cantor of Virginia, the second-ranking House Republican, called the Democratic package “a spending bill beyond anyone’s imagination.”

Some Democrats seemed surprised that no Republicans voted for the measure.

“Not one person felt his or her district needed to have any of this assistance?” Representative Rosa DeLauro, Democrat of Connecticut, asked of the Republicans. “That can’t be.”

Brad Woodhouse, president of the union-supported, pro-Democratic group Americans United for Change, e-mailed a statement condemning the Republicans’ opposition under the subject line “Political Suicide.”

That $355 billion in spending isn’t about the economy.

The stimulus bill currently steaming through Congress looks like a legislative freight train, but given last week’s analysis by the Congressional Budget Office, it is more accurate to think of it as a time machine. That may be the only way to explain how spending on public works in 2011 and beyond will help the economy today.

According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill’s $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing given that Congress’s justification for passing this bill so urgently is to help the economy right now, if not sooner.

And the red Congressional faces must be very red indeed, because CBO’s analysis has since vanished into thin air after having been posted early last week on the Appropriations Committee Web site. Officially, the committee says this is because the estimates have been superseded as the legislation has moved through committee. No doubt.

AP

David Obey.

In addition to suppressing the CBO analysis, Democrats have derided it. Appropriations Chairman David Obey (D., Wis.) called it “off the wall,” never mind that CBO is now run by Democrats. Mr. Obey also suggested that it would be a mistake to debate the stimulus “until the cows come home.” We’d settle for a month or two, so at least the voters can inspect the various Congressional cattle they’re buying with that $355 billion.

The stimulus bill is also a time machine in the sense that it’s based on an old, and largely discredited, economic theory. As Harvard economist Robert Barro pointed out on these pages last Thursday, the “stimulus” claim is based on something called the Keynesian “multiplier,” which is that each $1 of spending the government “injects” into the economy yields 1.5 times that in greater output. There’s little evidence to support this theory, but you have to admire its beauty because it assumes the government can create wealth out of thin air. If it were true, the government should spend $10 trillion and we’d all live in paradise.

The problem is that the money for this spending boom has to come from somewhere, which means it is removed from the private sector as higher taxes or borrowing. For every $1 the government “injects,” it must take $1 away from someone else — either in taxes or by issuing a bond. In either case this leaves $1 less available for private investment or consumption. Mr. Barro wrote about this way back in 1974 in his classic article, “Are Government Bonds Net Wealth?”, in the Journal of Political Economy. Larry Summers and Paul Krugman must have missed it.

The government spending will be a net stimulus only if its $1 goes to more productive purposes than those to which private investors would have put that same $1. There are some ways we may want the government to spend money — on national defense, say — but that doesn’t mean it’s a stimulus.

A similar analysis applies to the tax cuts that are part of President Obama’s proposal. In contrast to the spending, at least the tax cuts will take effect immediately. But the problem is that Mr. Obama wants them to be temporary, which means taxpayers realize they will see no permanent increase in their after-tax incomes. Not being fools, Americans may either save or spend the money but they aren’t likely to change their behavior in ways that will spur growth. For Exhibit A, consider the failure of last February’s tax rebate stimulus, which was a bipartisan production of George W. Bush and Mr. Summers, who is now advising Mr. Obama.

To be genuinely stimulating, tax cuts need to be immediate, permanent and on the “margin,” meaning that they apply to the next dollar of income that an individual or business earns. This was the principle behind the Kennedy tax cuts of 1964, as well as the Reagan tax cuts of 1981, which finally took full effect on January 1, 1983.

If the Obama Democrats can’t abide this because it’s a “tax cut for the rich,” as an alternative they could slash the corporate tax to spur business incentives. The revenue cost of eliminating the corporate tax wouldn’t be any more than their proposed $355 billion in new spending, and we guarantee its “multiplier” effects on growth would be far greater. Research by Mr. Obama’s own White House chief economist, Christina Romer, has shown that every $1 in tax cuts can increase output by as much as $3.

As for all of that new spending, CBO will release an updated analysis this week. And we anticipate that the budget analysts will in the interim have discovered that much more of that $355 billion will somehow find its way to “shovel-ready” projects that the Obama Administration can start building before the crocuses bloom. But in the real world, the CBO’s first estimate is likely to prove closer to the truth.

The spending portion of the stimulus, in short, isn’t really about the economy. It’s about promoting long-time Democratic policy goals, such as subsidizing health care for the middle class and promoting alternative energy. The “stimulus” is merely the mother of all political excuses to pack as much of this spending agenda as possible into a single bill when Mr. Obama is at his political zenith.

Apart from the inevitable waste, the Democrats are taking a big political gamble here. Congress and Mr. Obama are promoting this stimulus as the key to economic revival. Americans who know nothing about multipliers or neo-Keynesians expect it to work. The Federal Reserve is pushing trillions of dollars of monetary stimulus into the economy, and perhaps that along with a better bank rescue strategy will make the difference. But if spring and then summer arrive, and the economy is still in recession, Americans are going to start asking what they bought for that $355 billion.

CARACAS, Venezuela — President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Mr. Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

Their willingness to even consider investing in Venezuela reflects the scarcity of projects open to foreign companies in other top oil nations, particularly in the Middle East.

But the shift also shows how the global financial crisis is hampering Mr. Chávez’s ideological agenda and demanding his pragmatic side. At stake are no less than Venezuela’s economic stability and the sustainability of his rule. With oil prices so low, the longstanding problems plaguing Petróleos de Venezuela, the national oil company that helps keep the country afloat, have become much harder to ignore.

Embracing the Western companies may be the only way to shore up Petróleos de Venezuela and the raft of social welfare programs, like health care and higher education for the poor, that have been made possible by oil proceeds and have helped bolster his popular support.

“If re-engaging with foreign oil companies is necessary to his political survival, then Chávez will do it,” said Roger Tissot, an authority on Venezuela’s oil industry at Gas Energy, a Brazilian consulting company focusing on Latin America. “He is a military man who understands losing a battle to win the war.”

While the new oil projects would not be completed for years, Mr. Chávez is already looking beyond the end of his current term in 2012 by putting forward a referendum, expected as early as next month, that would let him run for indefinite re-election.

In recent years, Mr. Chávez has preferred partnerships with national oil companies from countries like Iran, China and Belarus. But these ventures failed to reverse Venezuela’s declining oil output. State-controlled oil companies from other nations have also been invited to bid this time, but the large private companies are seen as having an advantage, given their expertise in building complex projects in Venezuela and elsewhere in years past.

The bidding process was first conceived last year when oil prices were higher but Petróleos de Venezuela’s production decline was getting impossible to overlook. Still, the process is moving into high gear only this month, with the authorities here expected to start reviewing the companies’ bidding plans on new areas of the Orinoco Belt, an area in southern Venezuela with an estimated 235 billion barrels of recoverable oil. Altogether, more than $20 billion in investment could be required to assemble devilishly complex projects capable of producing a combined 1.2 million barrels of oil a day.

Mr. Chávez’s olive branch to Western oil companies comes after he nationalized their oil fields in 2007. Two companies, Exxon Mobil and ConocoPhillips, left Venezuela and are still waging legal battles over lost projects.

But Venezuela may have little choice but to form new ventures with foreign oil companies. Nationalizations in other sectors, like agriculture and steel manufacturing, are fueling capital flight, leaving Venezuela reliant on oil for about 93 percent of its export revenue in 2008, up from 69 percent in 1998 when Mr. Chávez was first elected.

In the past year, with higher oil prices paving the way, Mr. Chávez also vastly expanded Petróleos de Venezuela’s power, inextricably linking it to his political program. He directed the oil company to build roads, import and distribute food, build docks and shipyards and set up a light-bulb factory. He even expanded it into areas like milk production, soybean farming and the training of athletes after a weak performance at the Beijing Olympics.

One of the oil company’s ventures sells subsidized food and extols Mr. Chávez’s leadership at its stores across Venezuela. At one frenzied store in eastern Caracas, posters hung from the ceiling last Saturday showing Mr. Chávez arm in arm with children beneath the heading, “fortifying agrarian socialism.”

Petróleos de Venezuela has also carried out nationalizations in other industries, absorbing companies like Electricidad de Caracas, the utility serving this city of five million. Top executives like Eulogio del Pino, the Stanford-educated vice president for exploration and production, spent much of 2008 negotiating unfinished deals like the takeover of a cement company.

But all the while, Petróleos de Venezuela has faced its own difficulties. It claimed it produced about 3.3 million barrels a day throughout most of 2008. But other sources, like OPEC, of which Venezuela is a member, place the figure closer to 2.3 million and show a fall of about 100,000 barrels a day from a year earlier. When Mr. Chávez rose to power a decade ago, Venezuela was producing about 3.4 million barrels a day.

Rafael Ramírez, the energy minister and president of Petróleos de Venezuela, did not respond to requests for an interview. But energy executives here with contacts within Petróleos de Venezuela said Mr. Ramírez, a confidant of Mr. Chávez, has been waging a struggle within the company to refocus operations toward producing more oil.

After weathering the turmoil of recent years, Western oil companies here are loath to speak publicly about their plans. “We don’t elaborate on bidding processes beyond the fact that we evaluate every opportunity and our decisions will be based on economics and other factors,” said Scott Walker, a spokesman for Chevron.

But energy executives here speak with restrained optimism. Nineteen companies paid $2 million each last month for data on areas open for exploration, twice what such data costs elsewhere.

Oil companies say they recognize the risk of investing in Venezuela, given the country’s abrupt shifts in the past. But they focus on the long-term potential of its petroleum reserves. Venezuela poses little risk in the search for oil since geologists have known for years where it lies in the Orinoco Belt.

Venezuela also differs from top oil nations like Saudi Arabia and Mexico, where national oil companies have monopolies. Petróleos de Venezuela let private companies remain as minority partners after the nationalizations, despite Mr. Chávez’s often aggressive anticapitalist stance.

Moreover, foreign oil services companies like Halliburton, which has done business in Venezuela for 70 years, have even expanded their activities in the country as Petróleos de Venezuela grew more dependent on contractors to help extract oil from aging wells.

Still, doubts persist over the chances that the new bids, which are set to conclude in June, will ultimately result in finished oil projects. Risks of operating here were underscored again last week when Venezuela ordered new production cuts along with other OPEC members, impacting ventures with private partners.

Under the current bidding rules, the onus for financing the new projects lies with the foreign companies, even though Petróleos de Venezuela would maintain control. Banks might balk at such a prospect. Distrust also lingers in dealing with Petróleos de Venezuela.

“An agreement on a piece of paper means nothing in Venezuela because of the way Chávez abruptly changes the rules of the game,” said a Venezuelan oil executive who has had dealings with oil companies from China, Russia and other countries.

“In 10 years, not one major oil project has been built in Venezuela,” said the oilman, who asked not to be identified for fear of retribution. “Chávez has left his so-called strategic partners out to dry, like the Chinese, who have been given the same treatment as Exxon.”

But the severity of the drop in oil prices may ultimately dictate the terms on which Venezuela re-engages with foreign oil companies.

“Chávez is celebrating the demise of capitalism as this international crisis unfolds,” said Pedro Mario Burelli, a former board member of Petróleos de Venezuela. “But the irony is that capitalism actually fed his system in times of plenty,” he said. “That is something Chávez will discover the hard way.”

María Eugenia Díaz and Thom Walker contributed reporting

María Eugenia Díaz and Thom Walker contributed reporting.

By Rich Noyes

January 10, 2009

By LOUIS UCHITELLE

The nation lost 524,000 jobs in December, reflecting a pervasive fear among employers that if they fail to shed workers quickly their companies may go under in a recession poised to become the worst since the 1930s.

The unemployment rate, meanwhile, jumped to a 16-year-high of 7.2 percent, the Bureau of Labor Statistics reported on Friday. The growing army of the unemployed, at 11.1 million, is nearly 50 percent bigger than at the start of the recession a year ago.

Responding to the report, President-elect Barack Obama said Congress must enact an economic stimulus plan quickly.

The December decline in jobs came on top of similar losses in October and November. Not since 1980 has the work force shrunk so much in just three months. Companies across all industries are grappling with sales that are deteriorating rapidly just as they lose easy access to loans.

“The simplest way for a company to hoard cash is to drain their inventories and fire their workers,” said Robert J. Barbera, chief economist at the Investment Technology Group, a research and trading firm, “and everywhere you look, that is what is happening.”

The total number of jobs lost in the recession now totals 2.59 million, counting upward revisions for October and November, with many more job losses expected in coming months.

Nearly as troubling, hundreds of thousands more people sought full-time work in December but could not get more than part-time jobs.

If those workers are included, the so-called total unemployment rate swelled to 13.5 percent, from 12.6 percent in November and just 8.7 percent at the start of the recession. Total unemployment includes the officially unemployed, the part-timers who seek more hours and the nearly 300,000 who would like a job but tell pollsters from the Bureau of Labor Statistics that they are too discouraged to look.

Employers in nearly every industry cut payrolls. Only health care and education bucked the trend in December, adding just 45,000 jobs combined, the Bureau of Labor Statistics reported. Manufacturers, construction companies and retailers led all last year in eliminating jobs, and they did so again in December.

“What happened to jobs in the fourth quarter tells us unmistakably that this recession is going to be a long one and a deep one,” Mr. Barbera said. “The toughest six months,” he added, “will be the just-completed fourth quarter and the first quarter of this year.”

The consensus view of economists surveyed by Blue Chip Economic Indicators is that the economy will continue to contract until July at the very least, but at a slowing pace in the second quarter. That would make it the longest recession since the 1930s, outlasting the two record-holders, the mid-1970s and early 1980s downturns. Each of these recessions lasted 16 months. The current recession, which started in December 2007, would reach that milestone in April.

At a news conference in Washington, Mr. Obama said that behind the latest job statistics were “real lives, real suffering, real fears,” and Congress must bring Americans relief by quickly enacting a stimulus plan. Asked whether he was worried that some lawmakers thought his proposed stimulus program, estimated at $775 billion, was too small, he responded that others thought it was too big and said he was open to a “whole host of ideas” in consultation with Congress.

“You are assuming that I expected it to be easy,” he told one questioner. “No.”

The latest jobs report suggested that many employers tried to cut back hours before resorting to job cuts or hiring freezes. The average number of hours that Americans worked fell to 33.3 a week in December, down two-tenths of an hour, to the lowest level since records first were kept in 1964. Over the course of the recession, average weekly hours worked are down 4 percent.

“There has been a change in psychology as the financial crisis has devolved into a panic,” said Mark Zandi, chief economist at Moody’s Economy.com. “Businesses have gone from trying to hold onto workers, by reducing their hours, to laying them off in an effort to survive.”

Economists fell over themselves in describing the dire nature of the jobs report, which they said was alarming confirmation that the economy was in the midst of a sharp contraction in which consumer spending and business investment bordered on free fall. Many say that the economy contracted in the fourth quarter at a 5 or 6 percent annual rate and that steep contraction will continue at least through the first quarter, letting up only if Congress approves a sizable stimulus, one that kicks in soon and is at least as big as the $775 billion that the Obama camp has proposed.

“It will add massively to the budget deficit,” said Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh, who counts himself as an advocate of balanced budgets. “But I am not against running deficits in these circumstances, not with so many people losing their jobs.”

Mr. Hoffman expects the unemployment rate, which jumped to 7.2 percent last month from 6.8 percent in November, to rise to 8.5 percent by July and plateau there for the rest of the year.

Others are less sanguine. They see 9 or 10 percent unemployment by early next year, and a jobless recovery that continues for about six months even after the economy ceases to contract.

By comparison, the unemployment rate reached 10.8 percent in the 1981-1982 recession, its highest level since World War II. In those years, unemployment and economic growth rose and fell more or less in tandem. But in the early 1990s that changed. In the 1990-1991 recession and again after the 2001 recession, employers continued to shed jobs for months. In the case of the 2001 recession, employment did not return to its prerecession level for four years.

“Even with the help of a stimulus,” said David A. Levy, chairman of the Jerome Levy Forecasting Center, “the unemployment rate is going to keep rising for the rest of the year, or longer.”

GOP Asked to Help Design Bill; $300 Billion in Tax Cuts Sought

By Paul Kane, Lori Montgomery and Shailagh Murray
Washington Post Staff Writers
Tuesday, January 6, 2009; A01

President-elect Barack Obama arrived on Capitol Hill yesterday and immediately set to work reassuring skeptical Republicans about his massive economic stimulus package — part of a campaign that earned him praise for seeking their input but questions from those averse to hundreds of billions of dollars in new spending.

Pitching a plan that is expected to include $300 billion in tax cuts, Obama pledged to consult Republican leaders, who until yesterday had been left out of negotiations between the president-elect’s advisers and congressional Democratic staff.

“The monopoly on good ideas does not belong to a single party. If it’s a good idea, we will consider it,” Obama told House and Senate leaders at an hour-long closed-door meeting, according to one attendee.

Obama, making his pitch two weeks before taking office, won generally favorable reviews from GOP leaders, particularly because of his decision to increase the tax-cut ratio to 40 percent of the overall package.

Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John A. Boehner (R-Ohio) told reporters they were convinced that Obama was sincere in his invitation to let Republicans help craft the nearly $800 billion package to create jobs and lift the nation out of recession. But they also expressed concerns about the size of the package, as well as particular elements under discussion between Obama and Democratic lawmakers.

“I remain concerned about wasteful spending that might be attached to the tax relief. Simply put, we should not bury future generations under mountains of debt,” Boehner said.

Boehner suggested the legislation would likely be signed into law by mid-February, but the president-elect said yesterday that he would like the House and Senate to present him with a bill by the end of January or beginning of February.

“The economy is very sick,” Obama said. “The situation is getting worse. . . . We have to act and act now to break the momentum of this recession.”

As described by his advisers, Obama is proposing a package of tax cuts to benefit families and businesses. Like the overall spending proposal, the tax cuts would be designed to put cash in people’s pockets over the next two years and kick-start the economy.

Working families would be eligible for a tax credit worth up to $1,000. Individuals would be eligible for a $500 credit.

Businesses would get an extension of expired tax breaks from the 2008 stimulus package signed by President Bush, including a “bonus depreciation” break that allows businesses to write off more of their purchases more quickly and an increase in small-business expensing limits. Businesses could apply current losses to taxes paid back as far as five years ago, reaping an immediate cash windfall. And they would receive a $3,000 tax credit for every job they create or preserve.

Key details of the stimulus proposal remain unresolved. For instance, upper-income individuals would not be eligible for the income tax credit, but the income threshold for phasing out the benefit has not been set. Obama officials said it would likely be about $200,000 a year, the range set during the campaign.

Obama officials said they tried to keep the package ideologically neutral, rejecting an option supported by many progressives to make people who are not working eligible for a “refundable” tax credit. And they passed up conservative provisions such as estate tax relief and capital gains tax cuts that disproportionately benefit wealthier individuals.

After a lunchtime session with his economic advisers, Obama rejected suggestions that the tax cuts were designed to win over GOP votes. “The notion that me wanting to include relief for working families in this plan is somehow a political ploy, when this was a centerpiece of my plan for the last two years doesn’t make too much sense,” he told reporters.

Some prominent Republicans expressed reservations about the tax proposals’ specifics. Jon Kyl (Ariz.), a member of the Senate Republican leadership team, said he hadn’t studied the list of proposed cuts, but that he favored reducing corporate and capital gains taxes, and providing more generous small-business incentives. And, he said, “These changes should be permanent, rather than just temporary.”

Sen. Charles E. Grassley (Iowa), the senior Republican on the tax-writing Senate Finance Committee, said he would prefer a tax package that is “inclusive rather than exclusive” and that offers relief to “as many as taxpayers as possible.” One option, according to a senior Grassley aide, would be to include a $75 billion provision to prevent the alternative minimum tax from applying to millions of additional families.

It is also not clear that tax cuts are the most effective way to win GOP votes. Two key Republican moderates in the Senate — Susan Collins and Olympia J. Snowe, both of Maine — have not focused on tax breaks as the best solution to the economic crisis.

In a letter to Obama last month, Collins outlined her stimulus priorities as transportation construction projects, energy-efficiency investments and a temporary increase in Medicaid assistance to states. In conversations with Obama and his Treasury secretary-designate Timothy F. Geithner, Snowe has urged the inclusion of unemployment assistance, mortgage relief for strapped homeowners and programs to ease the credit crunch facing small businesses.

“With more than 10.3 million people currently out of work, Congress must swiftly enact economic recovery legislation that will create jobs, assist the unemployed and reduce the devastating rate of home foreclosures,” Snowe said.

Obama bounced across the Capitol yesterday to take part in three meetings, beginning with a one-on-one meeting with House Speaker Nancy Pelosi (D-Calif.) in the morning and a sit-down in the early afternoon with Senate Majority Leader Harry M. Reid (D-Nev.). The final meeting was with the bipartisan leadership from both chambers.

Democrats described the atmosphere as markedly different than the confrontational tone of recent battles with the Bush White House, in part because the new administration is run by former senators.

“They understand the Senate, they understand the Capitol. It wasn’t as if someone new was coming to town,” Sen. Richard J. Durbin (D-Ill.), the majority whip and close Obama ally, said afterward.

Some Republicans, while saying they were pleased by Obama’s attempt to open dialogue, questioned whether the spending side of the plan would be transparent enough. Rahm Emanuel, Obama’s chief of staff, pledged to put details of the spending plan online, including the creation of a monitoring system for the progress on some of the projects, according to one attendee.

Some independent analysts joined GOP aides in questioning Obama’s tax credit for job creation, saying it’s unclear how such a provision would be crafted.

“When somebody lays off 10,000 people but hires back 1,000, should they get a tax credit? That doesn’t really seem fair,” said Leonard Burman, a director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution. “The problem with these things is defining what qualifies.”

Meanwhile, some Republicans and moderate Democrats are pushing Obama to commit to addressing the nation’s long-term budget problems even as his stimulus package pushes the government deeper into debt. With congressional budget analysts expected to announce later this week that this year’s deficit is likely to soar well over $1 trillion, a commitment to reducing future deficits is critical, said Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee.

“At some point here, you have to pivot and face up to these long-term problems,” said Conrad, who along with Sen. Judd Gregg (R-N.H.) is proposing a commission to re-examine the expensive entitlement programs Social Security, Medicare and Medicaid.

January 5, 2009
Op-Ed Columnist

By PAUL KRUGMAN

“If we don’t act swiftly and boldly,” declared President-elect Barack Obama in his latest weekly address, “we could see a much deeper economic downturn that could lead to double-digit unemployment.” If you ask me, he was understating the case.

The fact is that recent economic numbers have been terrifying, not just in the United States but around the world. Manufacturing, in particular, is plunging everywhere. Banks aren’t lending; businesses and consumers aren’t spending. Let’s not mince words: This looks an awful lot like the beginning of a second Great Depression.

So will we “act swiftly and boldly” enough to stop that from happening? We’ll soon find out.

We weren’t supposed to find ourselves in this situation. For many years most economists believed that preventing another Great Depression would be easy. In 2003, Robert Lucas of the University of Chicago, in his presidential address to the American Economic Association, declared that the “central problem of depression-prevention has been solved, for all practical purposes, and has in fact been solved for many decades.”

Milton Friedman, in particular, persuaded many economists that the Federal Reserve could have stopped the Depression in its tracks simply by providing banks with more liquidity, which would have prevented a sharp fall in the money supply. Ben Bernanke, the Federal Reserve chairman, famously apologized to Friedman on his institution’s behalf: “You’re right. We did it. We’re very sorry. But thanks to you, we won’t do it again.”

It turns out, however, that preventing depressions isn’t that easy after all. Under Mr. Bernanke’s leadership, the Fed has been supplying liquidity like an engine crew trying to put out a five-alarm fire, and the money supply has been rising rapidly. Yet credit remains scarce, and the economy is still in free fall.

Friedman’s claim that monetary policy could have prevented the Great Depression was an attempt to refute the analysis of John Maynard Keynes, who argued that monetary policy is ineffective under depression conditions and that fiscal policy — large-scale deficit spending by the government — is needed to fight mass unemployment. The failure of monetary policy in the current crisis shows that Keynes had it right the first time. And Keynesian thinking lies behind Mr. Obama’s plans to rescue the economy.

But these plans may turn out to be a hard sell.

News reports say that Democrats hope to pass an economic plan with broad bipartisan support. Good luck with that.

In reality, the political posturing has already started, with Republican leaders setting up roadblocks to stimulus legislation while posing as the champions of careful Congressional deliberation — which is pretty rich considering their party’s behavior over the past eight years.

More broadly, after decades of declaring that government is the problem, not the solution, not to mention reviling both Keynesian economics and the New Deal, most Republicans aren’t going to accept the need for a big-spending, F.D.R.-type solution to the economic crisis.

The biggest problem facing the Obama plan, however, is likely to be the demand of many politicians for proof that the benefits of the proposed public spending justify its costs — a burden of proof never imposed on proposals for tax cuts.

This is a problem with which Keynes was familiar: giving money away, he pointed out, tends to be met with fewer objections than plans for public investment “which, because they are not wholly wasteful, tend to be judged on strict ‘business’ principles.” What gets lost in such discussions is the key argument for economic stimulus — namely, that under current conditions, a surge in public spending would employ Americans who would otherwise be unemployed and money that would otherwise be sitting idle, and put both to work producing something useful.

All of this leaves me concerned about the prospects for the Obama plan. I’m sure that Congress will pass a stimulus plan, but I worry that the plan may be delayed and/or downsized. And Mr. Obama is right: We really do need swift, bold action.

Here’s my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it’s only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy — well, you can see where this is going.

So this is our moment of truth. Will we in fact do what’s necessary to prevent Great Depression II?

Adjusted for inflation, it’s at lowest since ’57

by Joel Stein

Joel Stein is a columnist for The Los Angeles Times. His e-mail address is jstein@latimescolumnists.com.

Take it from a Brit: Losing the No. 1 world superpower spot won’t be that bad. Really.

By Chris Ayres

December 27, 2008

There has been much talk in the media about America’s threatened superpower status — a result of its near-fatal exposure to the Kryptonite of subprime mortgages, among other factors — and how the country will inevitably find itself going the way of that other once-undefeated political juggernaut, the dear old British Empire.

To which I say: Lucky America!

I mean, yeah, it’s going to sting a bit. Losing any big, sexy-sounding job title will inevitably deliver a blow to your self-esteem. Yet it can also be liberating.

Do Tehranis and Muscovites blame Britain for the culture of mindless self-gratification that brought down the global economy? Of course not. They blame America — even though Britain is arguably the more guilty party, what with its foreign-debt-to-GDP ratio standing at an unconscionable (and, really, quite embarrassing) 490%, as opposed to the United States’ puritanical 89% (according to the 2007 “purchasing power parity” GDP and external debt figures supplied by the CIA World Factbook).

The fact is that when you’re No. 1, you always get blamed for everything. When you’re No. 3, or No. 5 — or No. 135 — you can put your hands in your pockets and whistle tunelessly with a “Who, me?” look on your face, and no one ever asks any questions.

Take Slovakia. Five years ago, Slovakia invaded Iraq. Admittedly, it did this with the help of a few other countries. But still, does Slovakia ever get the blame for all the trouble that has gone down over there since then?

Nope.

Imagine, for a moment, the relief of being simply too unimportant to be held responsible for any event of consequence. Imagine Barack Obama being roused by the proverbial “red phone” at 11 a.m. — the leaders of low-ranking countries can presumably nap until late morning — to be informed of a terrible rumpus in deepest Nmbubu-Oobu, and his only responsibility is to write a stern news release calling on Belgium to act. And when it all goes horribly wrong — as it inevitably will — all he has to do is tut disapprovingly and mutter something about those arrogant Flems in Bruges.

Being British, I speak from some experience when it comes to lost superpowerdom. I was born in northern England in the mid-1970s — a time when my grandparents still believed that Britain was the mightiest nation on Earth, even though the prime minister, Harold Wilson, was being warned that the country was facing “wholesale domestic liquidation” unless it could secure an emergency, Third World-style bailout from the International Monetary Fund.

In Britain in those days — as in America now — people bought consumer products based on patriotism. The misery! I later fell victim to this nonsense myself: My first car was an antique 1974 MGB, the electronics supplied by the pride of postwar British manufacturing, Lucas Industries. When I bought the MGB, I sincerely believed that British sports cars were the finest in the world. Then the wiring loom under the steering wheel short-circuited when I was halfway down Caledonia Road in North London and I had to jump out with my trousers literally on fire.

My next car was Japanese.

Today, of course, there are pretty much no truly British cars. And who cares? We live in an era of globalization. The Indians might own the company that makes Jaguars, but I probably have money in a pension fund somewhere that owns stock in that very same Indian company. So, in a small way, the British are still in the car business — with the added benefit that a modern Jag probably won’t cause a trouser fire.

And even if you own a “foreign” car these days, chances are that at least a few bits and pieces of it have been sourced from your homeland. That’s the way it should be: Countries that are good at one thing should concentrate on it, and countries that are bad at that same thing should stop doing it.  [See Law of Comparative Advantage - Kautzman]

Besides, abandoning consumer patriotism is as liberating as no longer being blamed for everything. It’s especially liberating when shopping for an automobile. Farewell, beige Ford Taurus! Hello, gunmetal-gray BMW M3!

Not all domestic industries suffer when a nation goes into an irreversible decline, of course. Others suddenly find themselves booming. The beleaguered American newspaper industry, for example, might very well be able to profit immensely by simply dispatching its most snide and ironically detached correspondents to the new capitals of world power, from which they will be able to report with maximum condescension about the hilarious earnestness of the locals. Mark my words: Demoralized Americans won’t be able to get enough of these reports, and thus will buy multiple newspapers every morning while traveling to work on buses and trains, having abandoned their cars when the U.S. government stopped qualifying for its bulk oil discount from the Saudis.

Not that working 8-to-7 six days a week will seem so important when you’re no longer ruling the world. If Britain’s experience is anything to go by, Americans will soon find more satisfaction by trying to break pointless world records — crossing Greenland on a pogo stick, using only one arm, while dressed in native Bolivian costume, for example — or writing absurdist comedy, or recovering from apocalyptic, three-gin-and-tonic lunchtime hangovers.

Oh yes, you’re in for a treat.

Chris Ayres is Los Angeles correspondent for the Times of London and the author of “Death by Leisure: A Cautionary Tale” (Grove Press, February 2009).