The Daily Blog

House Passes Sweeping Cuts to Domestic Programs.

WASHINGTON - Jolted to action by deficit-conscious newcomers, the Republican-controlled House passed sweeping legislation early Saturday to cut $61 billion from hundreds of federal programs and shelter coal companies, oil refiners and farmers from new government regulations.

The 235-189 vote to send the bill to the Senate was largely along party lines and defied a veto threat from President Barack Obama. It marked the most striking victory to date for the 87-member class of freshmen Republicans elected last fall on a promise to attack the deficit and reduce the reach of government. Three Republicans joined Democrats in opposing the measure.

“The American people have spoken. They demand that Washington stop its out-of-control spending now, not some time in the future,” declared freshman Rep. Tim Huelskamp, R-Kan.

The $1.2 trillion bill covers every Cabinet agency through the Sept. 30 end of the budget year, imposing severe spending cuts aimed at domestic programs and foreign aid, including aid for schools, nutrition programs, environmental protection, and heating and housing subsidies for the poor.

The measure faces a rough ride in the Democratic-controlled Senate, even before the GOP amendments adopted Thursday, Friday and early Saturday morning pushed the bill further and further to the right on health care and environmental policy. Senate Democrats promise higher spending levels and are poised to defend Obama’s health care bill, environmental policies and new efforts to overhaul regulation of the financial services industry.Changes rammed through the House on Friday and Saturday would shield greenhouse-gas polluters and privately owned colleges from federal regulators, block a plan to clean up the Chesapeake Bay, and bar the government from shutting down mountaintop mines it believes will cause too much water pollution, siding with business groups over environmental activists and federal regulators in almost every instance.

“This is like a Cliff Notes summary of every issue that the Republicans, the Chamber of Commerce, and the (free market) CATO Institute have pushed for 30 years,” said Rep. Edward Markey, D-Mass. “And they’re just going to run them through here.”

The gulf between the combatants ensures that difference on the measure won’t be resolved soon, requiring a temporary spending bill when a current stopgap measure expires March 4. Senate Democrats and House Speaker John Boehner, R-Ohio, are already maneuvering for political advantage in anticipation of talks on a short-term extension that will be needed.

Democrats say Boehner’s insistence that any stopgap measure carry spending cuts amounts to an ultimatum that could threaten a government shutdown like the episodes that played to the advantage of former President Bill Clinton in his battles with Republicans in 1995-1996.

The Obama administration upped the ante on Friday, warning that workers who distribute Social Security benefits might be furloughed if the GOP cuts go through.

Across four long days of freewheeling debate, Republicans left their conservative stamp in other ways.

They took several swipes at the year-old health care law, including voting for a ban on federal funding for its implementation. At the behest of anti-abortion lawmakers, they called for an end to federal funding for Planned Parenthood.

Republicans awarded the Pentagon an increase of less than 2 percent increase, but domestic agencies would bear slashing cuts of about 12 percent. Such reductions would feel almost twice as deep since they would be spread over the final seven months of the budget year.

Republicans recoiled, however, from some of the most politically difficult cuts to grants to local police and fire departments, special education and economic development. Amtrak supporters easily repelled an attempt to slash its budget.

About the only victory scored by Obama during the week came on a vote Wednesday to cancel $450 million for a costly alternative engine for the Pentagon’s next-generation F-35 warplane. It was a top priority of Defense Secretary Robert Gates and passed with the votes of many GOP conservatives who opposed the $3 billion program, more than half of the 87 Republican freshmen elected last fall on promises to cut the budget.

Democrats overwhelmingly oppose the measure and Obama has threatened a veto if it reaches his desk, citing sweeping cuts that he says would endanger the economic recovery.

“The bill will destroy 800,000 American jobs,” said House Democratic Leader Nancy Pelosi, D-Calif., citing a study by the left-leaning Economic Policy Institute. “It will increase class sizes and take teachers out of the classrooms … It will jeopardize homeless veterans, make our communities less secure, threaten America’s innovation.”

The Environmental Protection Agency was singled out by Republicans eager to defend business and industry from numerous agency regulations they say threaten job-creation and the economy. The EPA’s budget was slashed by almost one-third, and then its regulatory powers were handcuffed in a series of floor votes.

Proposed federal regulations would be blocked on emission of greenhouse gases, blamed for climate change, and a proposed regulation on mercury emissions from cement kilns would also be stopped. Additionally, the bill also calls for a halt to proposed regulations affecting Internet service providers and privately-owned colleges, victories for the industries that would be affected.

The 359-page bill was shaped beginning to end by the first-term Republicans, many of them elected with tea party backing.

They rejected an initial draft advanced by the leadership and produced by Rep. Hal Rogers, R-Ky., chairman of the Appropriations Committee, saying it did not cut deeply enough.

The revised bill added more reductions, and cut $100 billion from Obama’s request for the current year, the amount Republicans had cited in their campaign-season Pledge to America.

But a tea party-backed amendment to slash $22 billion on top of the $60-billion-plus worth of steep cuts already made by the measure failed on Friday almost 2-1.

The heavily subsidized ethanol industry absorbed a pair of defeats Saturday at the hands of it many critics, including Rep. John Sullivan, R-Ohio, who won a vote to block the EPA from approving boosting the amount of ethanol in most gasoline to 15 percent.

On other regulatory issues, foes of the EPA won a 249-176 vote to block the agency from using its regulatory powers to curb greenhouse gases. EPA has already taken steps to regulate global warming pollution from vehicles and the largest factories and industrial plants and is expected to soon roll out rules that target refineries and power plants.The move to stop the EPA from regulating greenhouse-gas polluters came from Rep. Ted Poe, R-Texas, who said his congressional district is home to more oil refineries than any other.

“We’re in the midst of a massive economic downturn and the last thing we need to do is shoot ourselves in the foot with unnecessary, expensive new regulations that are on business and industry,” he said.

Republicans also prevailed in more parochial issues, with Rep. Tom McClintock, R-Calif., winning a close vote to block the government from removing hydroelectric dams on the Klamath River, while Robert Goodlatte, R-Va., won a 230-195 vote to block an EPA plan for cleaning up the Chesapeake Bay that would cut pollution from runoff from farms and municipalities throughout the Chesapeake watershed.

And Florida agricultural interests won a vote to block EPA rules issued last year aimed at controlling fertilizer and other pollutants that stoke the spread of algae in the state’s waters.

On Thursday, the House voted to block regulations governing the emission of mercury from cement plants and to stop the Federal Communications Commission from enforcing proposed regulations opposed by Verizon and other large Internet Service Providers.

Switzerland Freezes Assets Tied to Mubarak.

GENEVA - The Swiss government on Friday froze any assets belonging to former Egyptian President Hosni Mubarak or his family in Switzerland.

Foreign Ministry spokesman Lars Knuchel said the order took effect immediately but gave no details on what bank accounts or other assets Mubarak or his family might have in Switzerland.He spoke as pro-democracy demonstrators in Cairo were jubilantly celebrating the announcement that Mubarak has resigned after nearly three decades of authoritarian rule and handed power over to the military.”(The government) wants to avoid any risk of misappropriation of state-owned Egyptian assets,” the Foreign Ministry said in a statement. It also forbid the sale of any assets, especially real estate holdings.Swiss Finance Minister Widmer-Schlumpf was asked earlier this week by Swiss national TV station SF whether Mubarak or his family had any money in Switzerland.

“We’re in the process of clarifying this and we’ll act appropriately,” she said, adding that the Foreign Ministry was investigating the issue.

At the end of 2009, Egyptian deposits in Swiss bank accounts totaled 3.6 billion Swiss francs (about $3.5 billion), according to the Swiss National Bank.

Obama Says Talks Have Begun in Egypt on Government.

WASHINGTON — President Barack Obama said Friday that discussions have begun in Egypt on a turnover of the government, and he said he hoped “to see this moment of turmoil turned into a moment of opportunity.” ”The whole world is watching,” Obama said after meeting at the White House with Canadian Prime Minister Stephen Harper.

Obama said he was encouraged with the restraint showed Friday and repeated his insistence that the U.S. opposes the use of violence either by the government or the protesters.”This is obviously still a fluid situation, and we’re monitoring it closely,” Obama said.

He said the U.S. wants to send a “strong and clear message” that attacks on journalists, human rights activists and peaceful protesters “are unacceptable.”

He did not directly blame the Mubarak government for the attacks but said the Egyptian government is responsible for protecting its people.Obama did not insist that Egyptian President Hosni Mubarak leave immediately. But he talked about “a transition period that begins now.”He said the process must “lead to free and fair elections” but that “details of this transition will be worked by Egyptians.”

Pressed on whether Mubarak should leave office immediately, Obama appealed to the longtime Egyptian leader to consider the greater good o

Federal Budget Deficit on Track to Hit Record $1.5 Trillion.

WASHINGTON — A continuing weak economy and last month’s bipartisan tax cut legislation will drive the government’s deficit to a record $1.5 trillion this year, a new government estimate predicts.

The eye-popping numbers mean the government will continue to borrow 40 cents for every dollar it spends.

The new Congressional Budget Office estimates will add fuel to a raging debate over cutting spending and looming legislation that’s required to allow the government to borrow more money as the national debt nears the $14.3 trillion cap set by law. Republicans controlling the House say there’s no way they’ll raise the limit without significant cuts in spending, starting with a government funding bill that will advance next month.

The CBO analysis predicts the economy will grow by 3.1 percent this year, but that joblessness will remain above 9 percent this year. Dauntingly for President Obama, the nonpartisan agency estimates a nationwide unemployment rate of 8.2 percent on Election Day in 2012.

The latest figures are up from previous estimates because of bipartisan legislation passed in December that extended Bush-era tax cuts, unemployment benefits for the long-term jobless and provided a 2 percent payroll tax cut this year.

That measure added almost $400 billion to this year’s deficit, CBO says.

The deficit is on track to beat the record of $1.4 trillion set in 2009. That figure reflected huge outlays from the Wall Street bailout. The nonpartisan budget agency predicts the deficit will drop to $1.1 trillion next year.

“The fiscal challenge confronting us is enormous. To solve this problem, it will require real compromise and a great deal of political will,” said Budget Committee Chairman Kent Conrad, D-N.D. “We need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground.”

The chilling figures come the morning after Obama called for a five-year freeze on domestic agency budgets passed by Congress each year. But those nondefense programs make up just 18 percent of the $3.7 trillion budget, which means any upcoming deficit reduction package - at least one that begins to significantly slow the gush of red ink - will require politically dangerous curbs to popular benefit programs, which include Social Security, Medicare, the Medicaid health care program for the poor and disabled, and food stamps.

Neither Obama nor his GOP rivals on Capitol Hill have yet come forward with specific proposals for cutting such benefit programs. Successful efforts to curb the deficit always require active, engaged presidential leadership but Obama’s unwillingness to thus far take chances has deficit hawks discouraged. Obama will release his 2012 budget proposal next month.

“Somebody is going to have to bite the bullet and get this process going,” said Maya MacGuineas of the Committee for a Responsible Federal Budget, a bipartisan group that advocates fiscal responsibility. “And that somebody has to be the president.”

Obama has pointedly steered clear of the recommendations of his deficit commissions, which in December called for politically difficult moves such as increasing the Social Security retirement age and reducing future increases in benefits. It also proposed a 15 cents a gallon increase in the gas tax and eliminating or scaling back tax breaks - including the child tax credit, mortgage interest deduction and deduction claimed by employers who provide health insurance - in exchange for rate cuts on corporate and income taxes.

“I find the president moving in the same directions as (the deficit commission), certainly the same goals,” said Sen. Dick Durbin, D-Ill., who served on the panel and voted for its controversial findings. “Stay tuned.”

CBO predicts that the deficit will fall to $551 billion by 2015, down to a sustainable 3 percent of the size of the economy.

But under its rules, the CBO assumes that recently extended cuts in taxes on income, investment and people inheriting large estates will expire in two years. If those tax cuts, and numerous others, are extended, the deficit for that year would be almost three times as large.

Tax revenues, which dropped significantly in 2009 because of the recession, have stabilized. But revenue growth will continue to be constrained because of the slow pace of economic growth and the extension of Bush era tax cuts passed by Congress in December. The CBO projects revenues to be 6 percent higher in 2011 than they were two years ago, which will not keep pace with the growth in spending.As a share of the economy, tax revenues in 2011 are projected to reach their lowest levels since 1950. The CBO projects that tax revenues will be 14.8 percent of GDP in 2011, which would be 0.1 percentage point lower than in 2009.

“The United States faces daunting economic and budgetary challenges. The economy has struggled to recover from the recent recession, which was triggered by a large decline in house prices and a financial crisis - events unlike anything this country has seen since the Great Depression,” the CBO report says.

Separately, almost a dozen Republican senators endorsed a proposal by Orrin Hatch, R-Utah, to amend the Constitution to require a balanced budget. The version is stricter than a bipartisan balanced budget amendment that fell one vote short in the Senate in 1997. It requires a two-thirds vote in Congress to raise taxes, among other provisions backed by tea party activists. No Democrats have signed on to the measure.

‘War on Drugs’ Gives Way to the Dangerous New Face of Narco-Politics.

A shotgun blast of news this year shredded what most Americans believe about what used to be called the “war on drugs” — that it was being fought to curb what were seen as simply criminal enterprises. Instead, it left us all facing the new dangers of narco-politics, whether it is cartels challenging governments and attacking social institutions, capitalizing on corruption, or involvement in the drug trade by terrorist groups.As a veteran California law enforcement officer told Politics Daily: “What we’re seeing in Mexico is cartels as new ‘state making’ agencies.”That’s politics, even if, as that street cop noted, it doesn’t sound like politics “in the sound byte sense.”A study by the private Center for a New American Security released in 2010 reported that ” … crime, terrorism and insurgency are interwoven in new and dangerous ways that threaten not just the welfare but also the security of societies in the Western Hemisphere … the capability to destabilize governments has made the cartels an insurgent threat as well as a criminal one.”A March report by our government’s Congressional Research Service (CRS) noted that the number of “foreign terrorist groups” involved in the global narcotics trade “jumped from 14 groups in 2003 to 18 in 2008.”Terrorists may “tax” smugglers of drugs, sometimes as a prelude to taking over the business — CRS, the Drug Enforcement Administration (DEA) and the California street cop cite as an example Columbia’s FARC group, which formed in the 1960s with the goal of overthrowing the government and replacing it with a Marxist regime.The Taliban, which is not on the State Department terrorist list but is at war with the U.S. in Afghanistan, has alliances with narcotics traffickers, although al-Qaeda does not appear to sanction such connections, according to the CRS.By the end of 2010, narco-related violence will have accounted for nearly 30,000 murders in Mexico — everything from grisly beheadings to thug vs. thug gunfights, to raids by squads of cartel gunmen.Mexico’s Congress failed to act on President Felipe Calderon’s plan to squeeze the cartels by cracking down on money laundering and reorganizing local police forces so that they could better stand up to them. Mexico’s ordinary citizens are losing faith in their government. Cartel-fostered lawlessness has prompted ordinary Mexicans to resort to vigilantism to protect themselves from rapes and kidnappings including, in at least one instance, digging a trench around their town to prevent thugs from reaching it by going off-road in their SUVs.Cartels attack every element of “legitimate” society – cops, teachers, medical personnel. Cartels attack journalists, prompting El Diario, the leading paper of Juarez, Mexico, this September to publish an extraordinary Sunday front page “letter” to the cartels, saying: “Explain to us what you want from us. What are we supposed to publish or not publish, so we know what to abide by? You are at this time the de facto authorities in this city …”In a blood-soaked irony, many guns in cartel arsenals – including AK-47s and other assault rifles — come from the United States, according to a Washington Post investigation. They are often legally bought here and then smuggled across the border by gunrunners called hormigas (ants) even as cartel drug mules smuggle narcotics in the opposite direction. Efforts to regulate guns are hot-button political issues in the United States, and The Post article quotes Chris W. Cox of the multimillion-dollar lobbying group, the National Rifle Association, as saying: “To suggest that U.S. gun laws are somehow to blame for Mexican drug cartel violence is a sad fantasy.”Meanwhile, Mexican cartels — already key importers of heroin, cocaine, and marijuana to the U.S. – now dominate what was once our “homegrown” market in meth, the killer drug that began ravaging our heartland in the 1990’s.Economists talk about “contagion” — a political, cultural, or social force “infecting” a neighboring group. Contagion is an issue for the United States beyond the cartels’ core business of, say, providing the meth that destroys a teenager in Montana.

Grace Jones Owes The IRS $63,000.

We can now add Grace Jones to the ever-expanding line of celebrities on Uncle Sam’s hit ‘em list.

The Detroit News reports that the government is pulling up to her bumper, baby, to collect $63,000 in back taxes.

The IRS filed a lien against her on October 29, 2010 with the New York City Register.

Grace Jones seems like she would bite a tax auditor if he got too testy, so good luck with that, Unc.

Kelly Rowland Owes IRS $100K.

Kelly Rowland is the latest inductee to the club of celebrities in tax trouble, as word has it that she owes Uncle Sam nearly $100,000.

According to the Detroit News, the ‘Bills, Bills, Bills’ singer owes $98,634 in delinquent tax payments prompting the government to file a lien against her on Nov. 8 with the New York City Register. In a year that has been riddled with tax trouble from more than a few prominent figures in the music industry, Rowland’s financial woes find her in the company of Snoop Dogg, Toni Braxton and Omarion just to name a few.

Rowland, 29, is one-third of the top selling girl group Destiny’s Child. Since the group dismantled, she and fellow member Michelle Williams have had trouble matching the solo success achieved by lead singer Beyonce. Rowland has released a couple of solo albums, but to lukewarm success.

Last year the Grammy winner announced that she was cutting business ties with longtime manager, and Beyonce’s father, Mathew Knowles. “Mathew Knowles has been a positive influence in my career,” she said in a statement. “I have had great success under his guidance — both as a member of Destiny’s Child and with my solo projects. Although we have decided to part ways professionally, the Knowles family and the entire Music World Entertainment team will always be my family.”

After trying her hand in a few television roles, most recently as the co-host of the Bravo! reality show ‘The Fashion Show,’ for which she has since been replaced by model Iman, Rowland is getting back to making music. Her third studio album, titled ‘Kelly Rowland,’ which includes the single ‘Forever and a Day,’ is due in stores next year.

GlaxoSmithKline to Pay $750M Fine for Sale of Bad Drugs.

(Oct. 26) — Another day, another hard pill to swallow for GlaxoSmithKline.

On Tuesday, the pharmaceutical giant agreed to pay $750 million to settle a government lawsuit alleging that the company sold defective and potentially dangerous medication.

The U.S. Justice Department brought suit against GSK after finding that the company’s Cidra, Puerto Rico, factory produced drugs sold to consumers that were often mislabeled, of the wrong dosage and contaminated with micro-organisms.

“Today’s settlement reminds the pharmaceutical industry that they must observe those standards and reflects the commitment of Federal law enforcement organizations to pursue improper and illegal conduct that places health care consumers at risk,” Patrick E. McFarland, inspector general of the U.S. Office of Personnel Management, said in a statement.
It’s a sharp turn south for the company from earlier this year, when the Food and Drug Administration initially ruled to keep the drug Avandia on the U.S. market and stop studying it before later withdrawing it from store shelves. GSK, which closed the Cidra factory in 2009, issued its own statement to as much affect about today’s settlement:

“We regret that we operated the Cidra facility in a manner that was inconsistent with current Good Manufacturing Practice (cGMP) requirements and with GSK’s commitment to manufacturing quality,” said PD Villarreal, GSK’s senior vice president and head of global litigation. “GSK worked hard to resolve fully the manufacturing issues at the Cidra facility prior to its closure in 2009 and we are committed to continuous improvement in our manufacturing processes.”

According to the Justice Department, the drugs found to be adulterated included Bactroban, Kytril, Paxil CR and Avandamet.
The federal government will receive $436,440,000, and GSK will pay $163,560,000 to states participating in the agreement, the Justice Department said.

In September, the FDA announced it was implementing new restrictions on rosiglitazone, the main ingredient in Avandia, Avandamet and Avandaryl, which are used to help control type 2 diabetes, and which earn GlaxoSmithKline billions in profit annually. The European Medicines Agency, meanwhile, recommended that Avandia be taken off the market altogether after studies indicated a sharp increase in heart attack risk associated with the drug.

Obama’s African Relatives Think His Father Was Murdered.

(Oct. 18) — Perhaps the president can add this one to his list of myths to bust in December when he appears on the Discovery Channel show “MythBusters”: His father was not killed in a car accident in 1982, as was reported, but was murdered.

So goes a family theory investigated by Peter Firstbrook in his history of President Barack Obama’s African side of the family, “The Obamas,” and dissected by Obama biographer David Remnick in a post today on the New Yorker’s website.

Barack Obama Sr. was “a thwarted politician and bureaucrat,” outspoken in his criticism of the Kenyan government’s acceptance of corruption among its ranks, according to Remnick.

He was also a heavy drinker, nicknamed “Mr. Double-Double” after his usual Scotch orders. On the night of his death he was found inside his car, which had hit a tree.

Firstbrook talked to Charles Oluoch, a cousin of the president, who related the family’s suspicions. Obama Sr. had been in a number of accidents before and had survived them all. His body appeared to be fairly unharmed — no broken bones and only a small amount of blood.

“Although it looked like an accident, our family suspected that there must have been foul play. I am not a medical doctor, but the way we saw Barack lying there, he didn’t look like somebody who was involved in an accident,” Oluoch said.

Sarah Obama, the president’s step-grandmother, told the author a similar story.”We think there was foul play there, and that is how he died, and they covered it up [by saying] that he had an accident,” she said. “But we just had to leave it like that because the government then was very ruthless.”

Remnick talked to Caroline Elkins, a historian at Harvard, who said she doesn’t buy it. Obama Sr. was a “serious, fall-down alcoholic” and his family is probably trying to restore his reputation now that they have one of their own in White House, she said.

But as Firstbrook points out 25 years later, we will probably never know the truth …