Original Link: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/07/31/financial/f132210D69.DTL
By TIM PARADIS, AP Business Writer
Wall Street sank Thursday, after weak readings on economic growth and the job market touched off renewed concerns about the financial health of businesses and consumers. The Dow Jones industrial average fell more than 200 points.
The Commerce Department's report that gross domestic product grew at a 1.9 percent pace in the second quarter disappointed investors. Economists polled by Thomson Financial/IFR had expected growth of 2.4 percent in the broad measure of the economy's health.
Investors were also concerned about Labor Department data saying that the number of people seeking jobless benefits jumped to the highest level in five years. Economists warned the weekly figures can be volatile, however, and some dismissed them as an aberration.
A $4.5 billion cash offer from Bristol-Myers Squibb Co. for its cancer drug partner ImClone Systems Inc. kept the Nasdaq composite index from falling as sharply as other indexes. In other positive news, oil prices declined, and an index of Midwestern business activity indicated growth.
But Wall Street could not shake off its worries about the economy — particularly after sobering remarks from Former Federal Reserve Chairman Alan Greenspan on CNBC late in the afternoon. Greenspan said he would be more surprised if the United States did not enter recession than if it did.
The comments came after Treasury Secretary Henry Paulson said in a speech in Washington that the economy will continue to grow at a moderate pace for the rest of the year, and the government's $168 billion stimulus package had helped grease the economy's wheels.
But Larry Smith, chief investment officer at Third Wave Global Investors in Greenwich, Conn., said tightness in credit markets and high oil prices continue to weigh on the economy and the stimulus package won't deliver a permanent fix.
"Tax rebates have been a very effective way of propping up the economy in the second quarter, and less so in the third quarter," Smith said. "To fix the economic growth problems, you have to restore liquidity to the system."
The Dow Jones industrial average fell 205.67, or 1.78 percent, to 11,378.02, continuing its string of erratic, triple-digit daily swings.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 16.88, or 1.31 percent, to 1,267.38, while the Nasdaq fell 4.17, or 0.18 percent, to 2,325.55.
During the month of July, the Dow inched up 0.25 percent, the S&P fell 0.99 percent, and the Nasdaq rose 1.42 percent. It was certainly a better showing than in June, during which the Dow dropped 10.19 percent, the S&P fell 8.60 percent, and the Nasdaq lost 9.10 percent.
Bond prices jumped following the economic readings. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.95 percent from 4.05 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell $2.69 to settle at $124.08 a barrel on the New York Mercantile Exchange after rising more than $4.50 on Wednesday. Oil has fallen more than $20 since hitting a high above $147 on July 11, raising hopes that inflation pressures could ease.
Thursday's stock market pullback follows bets investors made this week that the beaten-down financial sector would rebound and that the Labor Department's employment report on Friday would show a less gloomy jobs market.
But other stock rallies have fizzled in recent weeks. Investors have remained concerned about the housing and credit markets, the health of financial companies and the effect of high commodities prices.
The latest GDP reading, which reflected consumers cashing tax rebate checks, still shows the economy grew at a faster pace than the weak 0.9 percent seen in the first quarter. But revised numbers also revealed for the first time that the economy shrank in the fourth quarter last year.
The mixed economic figures are making it hard for investors to have much conviction, observers say.
"I think in the short run, it's going to be a tug-of-war between the optimists and the pessimists," said Jack Caffrey, equities strategist at JPMorgan Private Bank. "I think both sides are going to be able to find enough information to support their case."
At some point one side will give in, he said.
"The challenge is, you can't identify what the catalyst is that will change psychology."
Investors sifted through a flurry of quarterly profit reports for clues about the economy.
Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion, the largest quarterly profit ever by a U.S. corporation. But the per-share earnings fell well short of Wall Street's forecast, which assumed that record crude prices would push earnings even higher. The stock fell $3.95, or 4.7 percent, to $80.43 and weighed on the Dow industrials.
The Walt Disney Co. fell $1.32, or 4.2 percent, to $30.35 after the company reported a slowdown in the U.S. advertising market in the current quarter and weak box office results in the period that ended in June.
Motorola Inc. jumped 96 cents, or 12.5 percent, to $8.64 after posting a surprise profit for its second quarter. The company said it shipped more cell phones than in the first quarter.
Eastman Kodak Co. reported a second-quarter profit but the results missed Wall Street's forecast. The stock declined $1.13, or 7.2 percent, to $14.64.
In other news, Wall Street applauded Bristol-Myers' offer $60 per share for ImClone, a 30 percent premium to ImClone's closing price of $46.44 Wednesday. Bristol-Myers, which already owns about 17 percent of ImClone, is a U.S. partner for the colon and head and neck cancer drug Erbitux. ImClone surged $17.49, or 37.7 percent, to $63.93. Bristol-Myers slipped 39 cents to $21.12.
Declining issues outpaced advancers by about 3 to 2 on the New York Stock Exchange. Consolidated volume came to 5.16 billion shares, up from 5.06 billion shares.
The Russell 2000 index of smaller companies fell 4.34, or 0.60 percent, to 714.52.
Overseas, Japan's Nikkei stock average closed up 0.07 percent. Britain's FTSE 100 fell 0.16 percent, Germany's DAX index rose 0.30 percent, and France's CAC-40 fell 0.19 percent.
Thursday, July 31, 2008
Federal judge rules Bush's aides can be subpoenaed
Original Link: http://www.examiner.com/a-1515162~Federal_judge_rules_Bush_s_aides_can_be_subpoenaed.html
By MATT APUZZO, AP
President Bush's top advisers are not immune from congressional subpoenas, a federal judge ruled Thursday in a long-running dispute between the two political branches.
Congressional Democrats called the ruling a ringing endorsement of the principle that nobody is above the law. They swiftly announced that the Bush officials who have defied their subpoenas, including Bush's former top adviser Karl Rove, must appear as part of a probe of whether the White House directed the firings of nine federal prosecutors. Democrats announced plans to open hearings at the height of election season.
The Bush administration was expected to appeal.
In his ruling, U.S. District Judge John Bates said there's no legal basis for Bush's argument and that his former legal counsel, Harriet Miers, must appear before Congress. If she wants to refuse to testify, he said, she must do so in person. The committee also has sought to force testimony from White House chief of staff Joshua Bolten.
House panel votes to cite Rove with contempt "Harriet Miers is not immune from compelled congressional process; she is legally required to testify pursuant to a duly issued congressional subpoena," Bates wrote. He said that both Bolten and Miers must give Congress all nonprivileged documents related to the firings.
Bates, who was appointed to the bench by Bush, issued a 93-page opinion that strongly rejected the administration's legal arguments. He noted that the executive branch could not point to a single case in which courts held that White House aides were immune from congressional subpoenas.
"That simple yet critical fact bears repeating: the asserted absolute immunity claim here is entirely unsupported by existing case law," Bates wrote.
The ruling is a blow to the Bush administration's efforts to bolster the power of the executive branch at the expense of the legislative branch. Disputes over congressional subpoenas are normally resolved through political compromise, not through the court system. Had Bush prevailed, it would have dramatically weakened congressional authority in oversight investigations.
House Speaker Nancy Pelosi, D-Calif., left open the prospect of a full House vote on a contempt citation against Rove, who defied his subpoena to appear before the Judiciary Committee on July 10.
"It certainly strengthens our hand," she said of Bates' ruling. "This decision should send a clear signal to the Bush administration that it must cooperate fully with Congress and that former administration officials Harriet Miers and Karl Rove must testify before Congress."
That wasn't clear at all to the White House or Rove's attorney.
Bush administration lawyers were still considering whether to appeal, but there was no doubt what they thought of the ruling.
"We disagree with the district court's decision," White House spokeswoman Dana Perino said.
With only a few months left in Bush's presidency, there appeared to be no sense of urgency to come to a decision.
"I have not yet talked with anyone at the White House ... and don't expect that this matter will be finally resolved in the very near future," Rove attorney Robert Luskin said in an e-mail.
The House Judiciary Committee's senior Republican, Rep. Lamar Smith of Texas, said he was pleased the court ruled in Congress' favor, but he cautioned that an ongoing showdown in federal court could ultimately curtail Congress' powers, and he urged Democrats and the White House to strike an agreement.
"Unfortunately, today's victory may be short-lived," Smith said in a statement. "If the administration appeals the ruling, our congressional prerogatives will once again be put at risk."
The chairmen of the House and Senate Judiciary Committees quickly demanded that the White House officials subpoenaed appear before their panels.
Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, signaled that hearings would commence in September on the controversy that scandalized the Justice Department and led to the resignation of a longtime presidential confidant, Attorney General Alberto Gonzales.
"We look forward to the White House complying with this ruling and to scheduling future hearings with Ms. Miers and other witnesses who have relied on such claims," Conyers said in a statement. "We hope that the defendants will accept this decision and expect that we will receive relevant documents and call Ms. Miers to testify in September."
Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said, "I look forward to working with the White House and the Justice Department to coordinate the long overdue appearances."
By MATT APUZZO, AP
President Bush's top advisers are not immune from congressional subpoenas, a federal judge ruled Thursday in a long-running dispute between the two political branches.
Congressional Democrats called the ruling a ringing endorsement of the principle that nobody is above the law. They swiftly announced that the Bush officials who have defied their subpoenas, including Bush's former top adviser Karl Rove, must appear as part of a probe of whether the White House directed the firings of nine federal prosecutors. Democrats announced plans to open hearings at the height of election season.
The Bush administration was expected to appeal.
In his ruling, U.S. District Judge John Bates said there's no legal basis for Bush's argument and that his former legal counsel, Harriet Miers, must appear before Congress. If she wants to refuse to testify, he said, she must do so in person. The committee also has sought to force testimony from White House chief of staff Joshua Bolten.
House panel votes to cite Rove with contempt "Harriet Miers is not immune from compelled congressional process; she is legally required to testify pursuant to a duly issued congressional subpoena," Bates wrote. He said that both Bolten and Miers must give Congress all nonprivileged documents related to the firings.
Bates, who was appointed to the bench by Bush, issued a 93-page opinion that strongly rejected the administration's legal arguments. He noted that the executive branch could not point to a single case in which courts held that White House aides were immune from congressional subpoenas.
"That simple yet critical fact bears repeating: the asserted absolute immunity claim here is entirely unsupported by existing case law," Bates wrote.
The ruling is a blow to the Bush administration's efforts to bolster the power of the executive branch at the expense of the legislative branch. Disputes over congressional subpoenas are normally resolved through political compromise, not through the court system. Had Bush prevailed, it would have dramatically weakened congressional authority in oversight investigations.
House Speaker Nancy Pelosi, D-Calif., left open the prospect of a full House vote on a contempt citation against Rove, who defied his subpoena to appear before the Judiciary Committee on July 10.
"It certainly strengthens our hand," she said of Bates' ruling. "This decision should send a clear signal to the Bush administration that it must cooperate fully with Congress and that former administration officials Harriet Miers and Karl Rove must testify before Congress."
That wasn't clear at all to the White House or Rove's attorney.
Bush administration lawyers were still considering whether to appeal, but there was no doubt what they thought of the ruling.
"We disagree with the district court's decision," White House spokeswoman Dana Perino said.
With only a few months left in Bush's presidency, there appeared to be no sense of urgency to come to a decision.
"I have not yet talked with anyone at the White House ... and don't expect that this matter will be finally resolved in the very near future," Rove attorney Robert Luskin said in an e-mail.
The House Judiciary Committee's senior Republican, Rep. Lamar Smith of Texas, said he was pleased the court ruled in Congress' favor, but he cautioned that an ongoing showdown in federal court could ultimately curtail Congress' powers, and he urged Democrats and the White House to strike an agreement.
"Unfortunately, today's victory may be short-lived," Smith said in a statement. "If the administration appeals the ruling, our congressional prerogatives will once again be put at risk."
The chairmen of the House and Senate Judiciary Committees quickly demanded that the White House officials subpoenaed appear before their panels.
Rep. John Conyers, D-Mich., chairman of the House Judiciary Committee, signaled that hearings would commence in September on the controversy that scandalized the Justice Department and led to the resignation of a longtime presidential confidant, Attorney General Alberto Gonzales.
"We look forward to the White House complying with this ruling and to scheduling future hearings with Ms. Miers and other witnesses who have relied on such claims," Conyers said in a statement. "We hope that the defendants will accept this decision and expect that we will receive relevant documents and call Ms. Miers to testify in September."
Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., said, "I look forward to working with the White House and the Justice Department to coordinate the long overdue appearances."
Alaska's 'earmarks' king Stevens, now indicted
Original Link: http://www.csmonitor.com/2008/0731/p01s11-uspo.html
By Yereth Rosen, Correspondent of The Christian Science Monitor
Some predict the charges may end the career of an Alaskan icon who has dominated the state's political scene since territorial days.
It is, according to federal prosecutors, the scene of the crime. But as potential illegal payout, it appears a paltry trade for what could be the ruin of Alaska Sen. Ted Stevens's long legacy of public service.
The modest chalet-style house on a dirt road south of Anchorage has peeling brown paint, a front lawn in need of mowing, and a pair of handmade campaign signs. The house, the official Alaska residence of Senator Stevens, was expanded and remodeled through unreported gifts from VECO Corp., a company that was once a giant in both the Alaska oil fields and the halls of political power, according to a federal indictment issued in Washington Tuesday.
The charges against Stevens are part of a federal probe of political corruption in Alaska that so far has sent three former state lawmakers to prison. The investigation is forcing Alaskans, who receive more federal funds in earmarks per person than residents of any other state, to take a harder look at their heavy reliance on US tax dollars and to ask whether the mutual back-scratching that has long characterized business and politics here needs to be reconsidered.
With Stevens's indictment, some see an end of that era. Others predict it may also end the career of an Alaskan icon who has dominated the political scene since territorial days.
"The phrase that comes to mind is 'sic transit gloria.' It is the end of an era," says Jerry McBeath, a University of Alaska Fairbanks political scientist.
The indictment, the first issued against a sitting senator since 1993, charges Stevens with seven felony counts involving a failure to report gifts, worth more than $250,000, bestowed from 1999 to 2006 by VECO and its chief executive – mostly in the form of materials and labor used to double the size of his Girdwood home. While Stevens is not charged specifically with taking bribes, the indictment alleges that he helped steer lucrative federal contracts to VECO and took other actions that benefited the company.
Though the most powerful figure entangled so far, the senator is not likely to be the last. His son, former state Senate President Ben Stevens, has been fingered in court testimony by VECO executives as the recipient of $243,000 in VECO bribes that they said were disguised as payments for "consulting" work.
The elder Stevens, the longest-serving Senate Republican in history, proclaimed his innocence in a terse statement Tuesday. "I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. Senator," said the statement, released by his Senate office.
He also said that in line with Senate GOP rules, he would temporarily give up leadership positions. Stevens is a senior Republican on the Commerce Committee and Appropriations Committee.
His campaign issued a statement as well, insisting that his bid for a seventh term, in which he was already lagging in the polls against popular Anchorage Mayor Mark Begich, "is continuing to move full steam ahead."
After being appointed to office in 1968 and coasting to victory in every Senate election since, an indicted Stevens is now the decided underdog against Mayor Begich, a Democrat, and may not even survive the Aug. 26 GOP primary, says Ivan Moore, a pollster and political consultant who generally works for Democrats.
"Is Ted Stevens going to win in November? No. Is Ted Stevens going to win the Republican primary? He could, but I think it's unlikely," says Mr. Moore.
In fact, within minutes of the indictment, the Congressional Quarterly changed its rating of this race from Leans Republican to Leans Democratic.
"Even before the indictment, this race was already very competitive," says Jennifer Duffy, who tracks Senate races for the Cook Political Report in Washington. "What some people don't appreciate is that Senator Stevens has a primary race, and now it might be tougher to see him come out of it."
For Alaska, it would be a seismic shift.
Stevens has long been lionized as a pillar of the economy here. The state is reliant on North Slope oil and the money it generates, and it has been at least equally reliant on generous amounts of federal spending, otherwise known as "Stevens dollars," that is distributed throughout Alaska. "Stevens dollars" are particularly appreciated in the rural bush, where some Native villages still lack running water and rely on plastic-bag-lined "honey buckets" for toilets.
The nickname "Uncle Ted" is bestowed more in awe than in affection, according to Mr. McBeath.
"Stevens is not a likable person because of the nature of his personality. But I've rarely seen a public official as respected as he is because of his effectiveness," he says.
Alaskans have shown their appreciation over the years. At about the time the Justice Department says VECO's unreported gifts began, Stevens was honored as "Alaskan of the Century" by a civic group and by the state Legislature, and the airport in Anchorage was named after him.
In the Lower 48, Stevens has been much lampooned for his angry outbursts on the Senate floor, his promotion of big-ticket budget earmarks that appear preposterous outside of Alaska, and his oft-quoted speech about how the Internet is a "series of tubes."
True to the old Alaska saying "We don't care how they do it Outside," with "Outside" referring to every place that is not Alaska, Stevens shows little concern about being unpopular in the Lower 48. He even seems to relish his cantankerous image, donning an "Incredible Hulk" tie for major political clashes on the Senate floor.
If Stevens does not care what people say "Outside," however, several younger Alaska leaders do.
"Unfortunately, it's been that perception by mostly the Outside media that ... has been, 'What are you guys doing up there to clean up any corruption or perceived corruption?' " Gov. Sarah Palin said at a news conference in Juneau Tuesday. "We recognize that we have, perhaps, that reputation at this point." Governor Palin, a Republican who won her office on an anticorruption platform, touts several reform measures that she and lawmakers have put into place. She has also instructed budget writers to scale back the state's requests for federal dollars.
The governor drew ire from Stevens and US Rep. Don Young (R) for canceling state work on an expensive project that they had championed but was ridiculed as a "bridge to nowhere."
Other younger leaders also say Alaska needs to reassess its reliance on federal money and move on to a new era. Between Alaska's current oil wealth and the growing federal budget deficit and overall hardships in the Lower 48, it's the wrong time for the state to make big demands on the federal treasury, they say.
If oil prices average $120 a barrel for the current fiscal year, Alaska could reap a $9 billion surplus, notes state Sen. Hollis French (D). "Right now, we're sort of floating on a sea of oil," he says.
The move-on message was echoed Tuesday by Begich, who held a previously scheduled news conference intended to promote a new city program to convert to energy-efficient lighting. At the event, held on the sidewalk just below Stevens's office in the city's federal building, Begich found himself fending off reporters' questions about the man he hopes to replace in Washington.
"It's basically a sad day for Alaska, but we're going to keep focusing on the future of this great state," said the mayor, who was only 6 when Stevens was first sent to the Senate. "We're resilient. We're Alaskans. And we'll move forward."
By Yereth Rosen, Correspondent of The Christian Science Monitor
Some predict the charges may end the career of an Alaskan icon who has dominated the state's political scene since territorial days.
It is, according to federal prosecutors, the scene of the crime. But as potential illegal payout, it appears a paltry trade for what could be the ruin of Alaska Sen. Ted Stevens's long legacy of public service.
The modest chalet-style house on a dirt road south of Anchorage has peeling brown paint, a front lawn in need of mowing, and a pair of handmade campaign signs. The house, the official Alaska residence of Senator Stevens, was expanded and remodeled through unreported gifts from VECO Corp., a company that was once a giant in both the Alaska oil fields and the halls of political power, according to a federal indictment issued in Washington Tuesday.
The charges against Stevens are part of a federal probe of political corruption in Alaska that so far has sent three former state lawmakers to prison. The investigation is forcing Alaskans, who receive more federal funds in earmarks per person than residents of any other state, to take a harder look at their heavy reliance on US tax dollars and to ask whether the mutual back-scratching that has long characterized business and politics here needs to be reconsidered.
With Stevens's indictment, some see an end of that era. Others predict it may also end the career of an Alaskan icon who has dominated the political scene since territorial days.
"The phrase that comes to mind is 'sic transit gloria.' It is the end of an era," says Jerry McBeath, a University of Alaska Fairbanks political scientist.
The indictment, the first issued against a sitting senator since 1993, charges Stevens with seven felony counts involving a failure to report gifts, worth more than $250,000, bestowed from 1999 to 2006 by VECO and its chief executive – mostly in the form of materials and labor used to double the size of his Girdwood home. While Stevens is not charged specifically with taking bribes, the indictment alleges that he helped steer lucrative federal contracts to VECO and took other actions that benefited the company.
Though the most powerful figure entangled so far, the senator is not likely to be the last. His son, former state Senate President Ben Stevens, has been fingered in court testimony by VECO executives as the recipient of $243,000 in VECO bribes that they said were disguised as payments for "consulting" work.
The elder Stevens, the longest-serving Senate Republican in history, proclaimed his innocence in a terse statement Tuesday. "I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. Senator," said the statement, released by his Senate office.
He also said that in line with Senate GOP rules, he would temporarily give up leadership positions. Stevens is a senior Republican on the Commerce Committee and Appropriations Committee.
His campaign issued a statement as well, insisting that his bid for a seventh term, in which he was already lagging in the polls against popular Anchorage Mayor Mark Begich, "is continuing to move full steam ahead."
After being appointed to office in 1968 and coasting to victory in every Senate election since, an indicted Stevens is now the decided underdog against Mayor Begich, a Democrat, and may not even survive the Aug. 26 GOP primary, says Ivan Moore, a pollster and political consultant who generally works for Democrats.
"Is Ted Stevens going to win in November? No. Is Ted Stevens going to win the Republican primary? He could, but I think it's unlikely," says Mr. Moore.
In fact, within minutes of the indictment, the Congressional Quarterly changed its rating of this race from Leans Republican to Leans Democratic.
"Even before the indictment, this race was already very competitive," says Jennifer Duffy, who tracks Senate races for the Cook Political Report in Washington. "What some people don't appreciate is that Senator Stevens has a primary race, and now it might be tougher to see him come out of it."
For Alaska, it would be a seismic shift.
Stevens has long been lionized as a pillar of the economy here. The state is reliant on North Slope oil and the money it generates, and it has been at least equally reliant on generous amounts of federal spending, otherwise known as "Stevens dollars," that is distributed throughout Alaska. "Stevens dollars" are particularly appreciated in the rural bush, where some Native villages still lack running water and rely on plastic-bag-lined "honey buckets" for toilets.
The nickname "Uncle Ted" is bestowed more in awe than in affection, according to Mr. McBeath.
"Stevens is not a likable person because of the nature of his personality. But I've rarely seen a public official as respected as he is because of his effectiveness," he says.
Alaskans have shown their appreciation over the years. At about the time the Justice Department says VECO's unreported gifts began, Stevens was honored as "Alaskan of the Century" by a civic group and by the state Legislature, and the airport in Anchorage was named after him.
In the Lower 48, Stevens has been much lampooned for his angry outbursts on the Senate floor, his promotion of big-ticket budget earmarks that appear preposterous outside of Alaska, and his oft-quoted speech about how the Internet is a "series of tubes."
True to the old Alaska saying "We don't care how they do it Outside," with "Outside" referring to every place that is not Alaska, Stevens shows little concern about being unpopular in the Lower 48. He even seems to relish his cantankerous image, donning an "Incredible Hulk" tie for major political clashes on the Senate floor.
If Stevens does not care what people say "Outside," however, several younger Alaska leaders do.
"Unfortunately, it's been that perception by mostly the Outside media that ... has been, 'What are you guys doing up there to clean up any corruption or perceived corruption?' " Gov. Sarah Palin said at a news conference in Juneau Tuesday. "We recognize that we have, perhaps, that reputation at this point." Governor Palin, a Republican who won her office on an anticorruption platform, touts several reform measures that she and lawmakers have put into place. She has also instructed budget writers to scale back the state's requests for federal dollars.
The governor drew ire from Stevens and US Rep. Don Young (R) for canceling state work on an expensive project that they had championed but was ridiculed as a "bridge to nowhere."
Other younger leaders also say Alaska needs to reassess its reliance on federal money and move on to a new era. Between Alaska's current oil wealth and the growing federal budget deficit and overall hardships in the Lower 48, it's the wrong time for the state to make big demands on the federal treasury, they say.
If oil prices average $120 a barrel for the current fiscal year, Alaska could reap a $9 billion surplus, notes state Sen. Hollis French (D). "Right now, we're sort of floating on a sea of oil," he says.
The move-on message was echoed Tuesday by Begich, who held a previously scheduled news conference intended to promote a new city program to convert to energy-efficient lighting. At the event, held on the sidewalk just below Stevens's office in the city's federal building, Begich found himself fending off reporters' questions about the man he hopes to replace in Washington.
"It's basically a sad day for Alaska, but we're going to keep focusing on the future of this great state," said the mayor, who was only 6 when Stevens was first sent to the Senate. "We're resilient. We're Alaskans. And we'll move forward."
Wednesday, July 30, 2008
Little progress since bridge collapse
Original Link: http://abcnews.go.com/US/wireStory?id=5482458
By ROBERT TANNER, STEVE KARNOWSKI and FRANK BASS Associated Press Writers
A year after the worst U.S. bridge collapse in a generation brought calls for immediate repairs to other spans, two of every three of the busiest problem bridges in each state — carrying nearly 40 million vehicles a day — have had no work beyond regular maintenance.
An Associated Press review of repairs on each state's 20 most-traveled bridges with structural deficiencies found just 12 percent have been fixed. In most states, the most common approach was to plan for repairs later rather than fix problems now.
The bridges reviewed by the AP — 1,020 in all — are not in imminent danger of collapse, state engineers and highway officials say. But the officials acknowledge the structures need improvement, many sooner rather than later.
The collapse of the eight-lane Interstate 35W bridge into the Mississippi River on Aug. 1, 2007, killed 13 people and brought immediate calls for repairs to bridges across the nation.
The failure to follow through was not because of lack of effort, officials said. Soaring construction costs, budget shortages, election-year politics, a backlog of bridge projects, competing highway repairs and bureaucracy often held bridge work to only incremental progress.
The AP gathered information on repair status from 48 states and Washington, D.C. In six states, data could not be obtained for some locally owned bridges. Louisiana and Nevada failed to respond.
The AP findings:
—Sixty-four percent of the bridges received no work beyond regular maintenance, though most were targeted for some kind of future work.
—Twelve percent had their structural defects fixed — usually through a major rehabilitation or outright replacement.
—An additional 24 percent have seen a partial improvement, either through a short-term repair to temporarily address the defect or an ongoing project that is not yet complete.
The worst were Indiana, Oklahoma, New Hampshire and South Carolina, where work was conducted on only one of each state's 20 most heavily traveled structurally deficient bridges.
"At some point, relying on miracles is not going to be the best way to manage our system," said Pete Rahn, the transportation commissioner of Missouri. "I would pray we don't have to have another disaster to bring about the right attention to this. I see very little political will there."
Adds Pennsylvania Gov. Ed Rendell: "The Minneapolis incident obviously caused people to stand up and take notice, but I think it got dwarfed by the bad economic news."
"There's plenty of blame to go around," said Rendell, who has joined a national campaign to demand more federal investment in infrastructure. He argues the federal government bears a larger share than states, which are struggling to make do with limited help.
Rahn, one of many state transportation officials interviewed who said it is long past time for Congress and the states to invest in bridges and roads, blames the federal government most of all.
But as Congress debates highway spending, some members criticize states for not devoting enough highway money to bridges. Also, the Bush administration has promised to veto the latest $1 billion proposed increase, itself a fraction of the estimated $140 billion needed for repairs on bridges alone.
"Thirteen people were killed and not much happened," said engineer William Schutt, a critic of the status quo of bridge assessment and repair. "Who's to blame? Congress, the American people — for putting up with it."
Bridges deemed structurally deficient have elements that need monitoring and parts that need to be scheduled for repair or replacement. The designation does not necessarily mean a bridge is unsafe, although it is one of the factors used to determine when a bridge is at risk, and which ones quality for federal money.
"Structural deficiency ultimately determines whether a bridge will stand or fall," said Kris Kolluri, New Jersey's transportation commissioner. But recognizing the problem is only the first step.
"If you look at the full picture of bridges and the task that transportation professionals have," Kolluri said, "it's an overwhelming task."
The Minneapolis bridge, one of the busiest in Minnesota, collapsed during a Wednesday evening rush hour into a tangle of steel and concrete and crushed cars. In addition to the 13 killed, 145 people were injured. A school bus with 52 children aboard that came to rest on an angled piece of pavement provided one of the enduring images of the tragedy.
Investigators have yet to issue their final determination on the cause of the Minneapolis collapse but have said an error in the original design was the critical factor. Certain gussets — steel plates that fastened the trusses together — were roughly half the 1-inch thickness they should have been, investigators said. A National Transportation Safety Board lab report made public Tuesday noted at least two gussets broke partially along lines of corrosion.
The disaster has generated a rush of emergency bridge inspections, an extra $1 billion from Congress for bridge repairs so far and vows from leaders to tackle the problems spotlighted by the tragedy.
Washington state Gov. Chris Gregoire called the I-35W collapse a "wake-up call to this nation." She vowed to tackle two of her state's overdue bridge projects, telling state lawmakers: "We need to take them down, not leave it to Mother Nature!" The Alaskan Way Viaduct along Seattle's waterfront is to be demolished by 2012, and work to replace the SR 520 floating bridge over Lake Washington should begin the same year.
In all, 17 states proposed ambitious bridge and road spending totaling $13.7 billion. To date, $8.3 billion has won approval in six states, including $160 million in Maine, $600 million in Missouri and $6.6 billion in Minnesota.
But in 33 states and Washington, D.C., there was no significant new spending, and little debate.
The AP started its review by identifying the 20 most heavily trafficked structurally deficient bridges in each state, using a Federal Highway Administration inventory of data submitted by states.
But the inventory, which includes about 70,000 structurally deficient bridges nationwide, doesn't reflect the latest work — most of that information from the states was gathered before the collapse.
So the AP asked state transportation departments to explain the current status of repairs on each of those bridges and disclose future plans and whether officials had identified any new heavily trafficked, structurally deficient bridges since the last update to the federal government.
Some states wound up with more than 20 structurally deficient bridges in the AP analysis because they had additional, newly categorized, busy bridges that were structurally deficient.
Understandably, Minnesota's response has been among the most vigorous.
The Democratic-controlled Legislature, with some Republican help, overrode GOP Gov. Tim Pawlenty's veto of the $6.6 billion transportation spending plan, which raised the gas tax, local sales taxes and vehicle registration fees. The Senate then sacked his transportation commissioner, who had resisted the increased spending and higher taxes.
In June, a new commissioner outlined a $2.5 billion draft bridge improvement plan that would replace 11 major spans over the next decade using the new money. By 2018, 120 bridges that lack structural redundancies — like the doomed I-35W bridge — or that rank poorly on the structural sufficiency scale would be repaired, replaced or under construction.
Minnesota officials abruptly closed or partially closed three busy bridges after those inspections found flaws. The state also moved swiftly to replace the I-35W bridge.
Contractors aim to complete work by Sept. 15 — 100 days ahead of the deadline.
Missouri was another bright spot, where the Legislature moved ahead on a stalled bridge-improvement plan that was put on a fast track weeks after the Minneapolis collapse.
Lawmakers agreed on a measure to award a single 30-year contract to fix and maintain 802 of the state's worst bridges, despite a price tag of $600 million that analysts say could easily double over the contract's lifetime.
Politics dashed ambitious plans in Colorado and Virginia.
Despite initial support from the governor, months of study and accusations that opponents were playing "structurally deficient bridge roulette," Colorado lawmakers killed proposals to raise car registration fees, sales and gas taxes.
In Virginia, transportation may have been the biggest single issue of the last several years. The governor's $1 billion transportation plan became a political, partisan showdown and, despite a special session in July, wound up a stalemate.
The debate echoes from statehouses to Washington.
Last week, the U.S. House overwhelmingly approved another $1 billion for bridge work, though the White House has opposed the increase and has promised a veto.
The nation's bridges depend significantly on the federal government. In 2004, $10.5 billion was invested across the country on bridge improvements, according to the FHWA. The federal Highway Bridge Program provided $5.1 billion, with another $1.5 billion coming from other federal aid; states and local government paid $3.9 billion.
Much of the federal support comes out of the Highway Trust Fund, which is financed largely through fuel taxes — a potential problem because high pump prices have led people to drive less.
"The federal government has basically ignored infrastructure at every level," said Rendell, who, with California Gov. Arnold Schwarzenegger and New York Mayor Michael Bloomberg, has launched a group called Building America's Future to demand infrastructure investment. "They've just literally abdicated their responsibility."
According to the American Association of State Highway and Transportation Officials, a projected $14 billion shortfall means only about $27 billion in federal money will be available next year to states and local governments for new highway and bridge investments — a 34 percent reduction — even though the current federal highway act calls for spending $41 billion a year.
The risks of another Minneapolis-style collapse aren't getting smaller as bridges age and traffic and weather take their toll.
Even annual inspections — twice as often as the standard federal requirement — don't guarantee a bridge is safe.
On Saturday afternoon, 1,200 pounds of concrete chunks fell from the underside of a 50-year-old bridge in St. Paul over I-35E, a few miles from last summer's fatal collapse.
Two cars were damaged but nobody was injured. The bridge was inspected last August; since it is structurally deficient, it was due for another inspection soon.
The bridge is safe to carry traffic, said Dan Dorgan, Minnesota's chief bridge engineer, though the previous inspection had noted that deteriorating concrete had been fixed.
"It is not acceptable for us to have concrete falling off a bridge," he said.
By ROBERT TANNER, STEVE KARNOWSKI and FRANK BASS Associated Press Writers
A year after the worst U.S. bridge collapse in a generation brought calls for immediate repairs to other spans, two of every three of the busiest problem bridges in each state — carrying nearly 40 million vehicles a day — have had no work beyond regular maintenance.
An Associated Press review of repairs on each state's 20 most-traveled bridges with structural deficiencies found just 12 percent have been fixed. In most states, the most common approach was to plan for repairs later rather than fix problems now.
The bridges reviewed by the AP — 1,020 in all — are not in imminent danger of collapse, state engineers and highway officials say. But the officials acknowledge the structures need improvement, many sooner rather than later.
The collapse of the eight-lane Interstate 35W bridge into the Mississippi River on Aug. 1, 2007, killed 13 people and brought immediate calls for repairs to bridges across the nation.
The failure to follow through was not because of lack of effort, officials said. Soaring construction costs, budget shortages, election-year politics, a backlog of bridge projects, competing highway repairs and bureaucracy often held bridge work to only incremental progress.
The AP gathered information on repair status from 48 states and Washington, D.C. In six states, data could not be obtained for some locally owned bridges. Louisiana and Nevada failed to respond.
The AP findings:
—Sixty-four percent of the bridges received no work beyond regular maintenance, though most were targeted for some kind of future work.
—Twelve percent had their structural defects fixed — usually through a major rehabilitation or outright replacement.
—An additional 24 percent have seen a partial improvement, either through a short-term repair to temporarily address the defect or an ongoing project that is not yet complete.
The worst were Indiana, Oklahoma, New Hampshire and South Carolina, where work was conducted on only one of each state's 20 most heavily traveled structurally deficient bridges.
"At some point, relying on miracles is not going to be the best way to manage our system," said Pete Rahn, the transportation commissioner of Missouri. "I would pray we don't have to have another disaster to bring about the right attention to this. I see very little political will there."
Adds Pennsylvania Gov. Ed Rendell: "The Minneapolis incident obviously caused people to stand up and take notice, but I think it got dwarfed by the bad economic news."
"There's plenty of blame to go around," said Rendell, who has joined a national campaign to demand more federal investment in infrastructure. He argues the federal government bears a larger share than states, which are struggling to make do with limited help.
Rahn, one of many state transportation officials interviewed who said it is long past time for Congress and the states to invest in bridges and roads, blames the federal government most of all.
But as Congress debates highway spending, some members criticize states for not devoting enough highway money to bridges. Also, the Bush administration has promised to veto the latest $1 billion proposed increase, itself a fraction of the estimated $140 billion needed for repairs on bridges alone.
"Thirteen people were killed and not much happened," said engineer William Schutt, a critic of the status quo of bridge assessment and repair. "Who's to blame? Congress, the American people — for putting up with it."
Bridges deemed structurally deficient have elements that need monitoring and parts that need to be scheduled for repair or replacement. The designation does not necessarily mean a bridge is unsafe, although it is one of the factors used to determine when a bridge is at risk, and which ones quality for federal money.
"Structural deficiency ultimately determines whether a bridge will stand or fall," said Kris Kolluri, New Jersey's transportation commissioner. But recognizing the problem is only the first step.
"If you look at the full picture of bridges and the task that transportation professionals have," Kolluri said, "it's an overwhelming task."
The Minneapolis bridge, one of the busiest in Minnesota, collapsed during a Wednesday evening rush hour into a tangle of steel and concrete and crushed cars. In addition to the 13 killed, 145 people were injured. A school bus with 52 children aboard that came to rest on an angled piece of pavement provided one of the enduring images of the tragedy.
Investigators have yet to issue their final determination on the cause of the Minneapolis collapse but have said an error in the original design was the critical factor. Certain gussets — steel plates that fastened the trusses together — were roughly half the 1-inch thickness they should have been, investigators said. A National Transportation Safety Board lab report made public Tuesday noted at least two gussets broke partially along lines of corrosion.
The disaster has generated a rush of emergency bridge inspections, an extra $1 billion from Congress for bridge repairs so far and vows from leaders to tackle the problems spotlighted by the tragedy.
Washington state Gov. Chris Gregoire called the I-35W collapse a "wake-up call to this nation." She vowed to tackle two of her state's overdue bridge projects, telling state lawmakers: "We need to take them down, not leave it to Mother Nature!" The Alaskan Way Viaduct along Seattle's waterfront is to be demolished by 2012, and work to replace the SR 520 floating bridge over Lake Washington should begin the same year.
In all, 17 states proposed ambitious bridge and road spending totaling $13.7 billion. To date, $8.3 billion has won approval in six states, including $160 million in Maine, $600 million in Missouri and $6.6 billion in Minnesota.
But in 33 states and Washington, D.C., there was no significant new spending, and little debate.
The AP started its review by identifying the 20 most heavily trafficked structurally deficient bridges in each state, using a Federal Highway Administration inventory of data submitted by states.
But the inventory, which includes about 70,000 structurally deficient bridges nationwide, doesn't reflect the latest work — most of that information from the states was gathered before the collapse.
So the AP asked state transportation departments to explain the current status of repairs on each of those bridges and disclose future plans and whether officials had identified any new heavily trafficked, structurally deficient bridges since the last update to the federal government.
Some states wound up with more than 20 structurally deficient bridges in the AP analysis because they had additional, newly categorized, busy bridges that were structurally deficient.
Understandably, Minnesota's response has been among the most vigorous.
The Democratic-controlled Legislature, with some Republican help, overrode GOP Gov. Tim Pawlenty's veto of the $6.6 billion transportation spending plan, which raised the gas tax, local sales taxes and vehicle registration fees. The Senate then sacked his transportation commissioner, who had resisted the increased spending and higher taxes.
In June, a new commissioner outlined a $2.5 billion draft bridge improvement plan that would replace 11 major spans over the next decade using the new money. By 2018, 120 bridges that lack structural redundancies — like the doomed I-35W bridge — or that rank poorly on the structural sufficiency scale would be repaired, replaced or under construction.
Minnesota officials abruptly closed or partially closed three busy bridges after those inspections found flaws. The state also moved swiftly to replace the I-35W bridge.
Contractors aim to complete work by Sept. 15 — 100 days ahead of the deadline.
Missouri was another bright spot, where the Legislature moved ahead on a stalled bridge-improvement plan that was put on a fast track weeks after the Minneapolis collapse.
Lawmakers agreed on a measure to award a single 30-year contract to fix and maintain 802 of the state's worst bridges, despite a price tag of $600 million that analysts say could easily double over the contract's lifetime.
Politics dashed ambitious plans in Colorado and Virginia.
Despite initial support from the governor, months of study and accusations that opponents were playing "structurally deficient bridge roulette," Colorado lawmakers killed proposals to raise car registration fees, sales and gas taxes.
In Virginia, transportation may have been the biggest single issue of the last several years. The governor's $1 billion transportation plan became a political, partisan showdown and, despite a special session in July, wound up a stalemate.
The debate echoes from statehouses to Washington.
Last week, the U.S. House overwhelmingly approved another $1 billion for bridge work, though the White House has opposed the increase and has promised a veto.
The nation's bridges depend significantly on the federal government. In 2004, $10.5 billion was invested across the country on bridge improvements, according to the FHWA. The federal Highway Bridge Program provided $5.1 billion, with another $1.5 billion coming from other federal aid; states and local government paid $3.9 billion.
Much of the federal support comes out of the Highway Trust Fund, which is financed largely through fuel taxes — a potential problem because high pump prices have led people to drive less.
"The federal government has basically ignored infrastructure at every level," said Rendell, who, with California Gov. Arnold Schwarzenegger and New York Mayor Michael Bloomberg, has launched a group called Building America's Future to demand infrastructure investment. "They've just literally abdicated their responsibility."
According to the American Association of State Highway and Transportation Officials, a projected $14 billion shortfall means only about $27 billion in federal money will be available next year to states and local governments for new highway and bridge investments — a 34 percent reduction — even though the current federal highway act calls for spending $41 billion a year.
The risks of another Minneapolis-style collapse aren't getting smaller as bridges age and traffic and weather take their toll.
Even annual inspections — twice as often as the standard federal requirement — don't guarantee a bridge is safe.
On Saturday afternoon, 1,200 pounds of concrete chunks fell from the underside of a 50-year-old bridge in St. Paul over I-35E, a few miles from last summer's fatal collapse.
Two cars were damaged but nobody was injured. The bridge was inspected last August; since it is structurally deficient, it was due for another inspection soon.
The bridge is safe to carry traffic, said Dan Dorgan, Minnesota's chief bridge engineer, though the previous inspection had noted that deteriorating concrete had been fixed.
"It is not acceptable for us to have concrete falling off a bridge," he said.
Iraq's rebuilding planned at nearly $120 billion
Original Link: http://abcnews.go.com/Politics/wireStory?id=5477372
By PAULINE JELINEK, The Associated Press
Iraq's coffers are bulging with oil money, yet some Baghdad residents go without electricity for much of the day and others get drinking water tainted with sewage.
"They don't need more money," said Stuart Bowen, special inspector general for Iraq reconstruction. "But they are having a difficult time, apparently, spending the money that they have."
Bowen Wednesday is releasing his quarterly report to Congress on efforts to rebuild Iraq's shattered nation — a program now expected to spend $117.79 billion.
Aided by money from a postwar record in oil production, Baghdad itself is now set to spend an amount almost equal to the U.S. share, the report says. That is, as of the end of the quarter on June 30 the U.S. has appropriated $50.46 billion, the Iraqis are contributing $50.33 billion and international donors have pledged $17 billion.
Bowen said that on a number of fronts, Iraq made progress in the last quarter toward standing on its own — a key to bringing home U.S. troops.
Amid improved security, the Iraq economy has continued to expand and essential services to residents have improved somewhat.
"But they remain uneven and are not adequate to meet current demand," the 270-page report said. "Improved security across the country has helped reduce attacks on oil pipelines, and the electricity sector's expanded operations and maintenance programs have helped increase production."
The government of Iraq still struggles to develop effective water and sewer services.
"Emblematic of this struggle is the fact that two-thirds of the raw sewage produced in Baghdad flows untreated into rivers and waterways," the report said. Sewage water is mixing with tap water in several areas of Baghdad, experts say.
The Iraqi government also is still far from its goal of achieving political reconciliation; and it lacks some skills to run the government, the report says.
"They obviously have made enormous economic progress by virtue of improving their oil sector and they've made significant security progress," Bowen said in an interview.
"However on the governance and political front, there are still hurdles," he said, naming the need to pass an oil law and hold provincial elections.
And they are still having trouble executing their budgets at the national level and particularly in the provinces.
"For progress to really occur across Iraq, they're going to have to remedy that," Bowen said.
There was no figure available for how much of the allocated Iraqi money had been spent. Of the $17 billion pledged internationally, only $2.5 billion had been disbursed. And at of the end of the quarter, the U.S. had spent $33.28 billion of the more than $50 billion Congress appropriated, Bowen said.
He said American taxpayers did not always get their money's worth.
One success story was a $34 million project that built a system of ditches, berms, fences and other security to protect pipelines from attacks.
"The success of the program is evident in the fact that there have been no successful attacks on northern oil lines this year," the report said, noting that contributed to the increased oil production.
The Iraqis have refused to take over control of some of the facilities built for them, forcing the U.S. to "unilaterally transfer" hundreds of projects without formal agreement and increasing the risk that the U.S. investment will be wasted, Bowen said.
Some of the projects were rejected because they were incomplete, some because they didn't meet Iraqi expectations and others because the Iraqis deemed them unnecessary, Bowen said, recommending a new U.S.-Iraqi agreement for such transfers.
Other details in the report said:
—The quarter's oil production averaged 2.43 million barrels a day, the highest reported since the reconstruction program began five years ago, but below prewar levels of 2.58 million.
As of June 30, the United States had spent $1.86 billion on rebuilding the oil industry.
— Average daily electricity production for the quarter was 12 percent higher than the same time last year and the second highest quarterly average since the start of the war. Still, publicly available power, which is provided virtually without fees, only meets about 55 percent of increasing demand, forcing people to buy power buy power from private generators run by neighbors or small businessmen.
The United States has spent nearly $4.62 billion in this sector.
— Only 47 percent of people in rural areas use drinking water supplied via pipes to their homes. Only 20 percent of families outside of Baghdad province have access to working sewage facilities.
The United States has $2.4 billion in the water sector.
— Despite better security, "violence continues to pose a deadly threat to personnel involved in reconstruction activities." The State Department reported that 15 U.S. civilians died in Iraq this quarter. Since the beginning of the U.S. reconstruction effort, 271 U.S. civilians have died in Iraq.
By PAULINE JELINEK, The Associated Press
Iraq's coffers are bulging with oil money, yet some Baghdad residents go without electricity for much of the day and others get drinking water tainted with sewage.
"They don't need more money," said Stuart Bowen, special inspector general for Iraq reconstruction. "But they are having a difficult time, apparently, spending the money that they have."
Bowen Wednesday is releasing his quarterly report to Congress on efforts to rebuild Iraq's shattered nation — a program now expected to spend $117.79 billion.
Aided by money from a postwar record in oil production, Baghdad itself is now set to spend an amount almost equal to the U.S. share, the report says. That is, as of the end of the quarter on June 30 the U.S. has appropriated $50.46 billion, the Iraqis are contributing $50.33 billion and international donors have pledged $17 billion.
Bowen said that on a number of fronts, Iraq made progress in the last quarter toward standing on its own — a key to bringing home U.S. troops.
Amid improved security, the Iraq economy has continued to expand and essential services to residents have improved somewhat.
"But they remain uneven and are not adequate to meet current demand," the 270-page report said. "Improved security across the country has helped reduce attacks on oil pipelines, and the electricity sector's expanded operations and maintenance programs have helped increase production."
The government of Iraq still struggles to develop effective water and sewer services.
"Emblematic of this struggle is the fact that two-thirds of the raw sewage produced in Baghdad flows untreated into rivers and waterways," the report said. Sewage water is mixing with tap water in several areas of Baghdad, experts say.
The Iraqi government also is still far from its goal of achieving political reconciliation; and it lacks some skills to run the government, the report says.
"They obviously have made enormous economic progress by virtue of improving their oil sector and they've made significant security progress," Bowen said in an interview.
"However on the governance and political front, there are still hurdles," he said, naming the need to pass an oil law and hold provincial elections.
And they are still having trouble executing their budgets at the national level and particularly in the provinces.
"For progress to really occur across Iraq, they're going to have to remedy that," Bowen said.
There was no figure available for how much of the allocated Iraqi money had been spent. Of the $17 billion pledged internationally, only $2.5 billion had been disbursed. And at of the end of the quarter, the U.S. had spent $33.28 billion of the more than $50 billion Congress appropriated, Bowen said.
He said American taxpayers did not always get their money's worth.
One success story was a $34 million project that built a system of ditches, berms, fences and other security to protect pipelines from attacks.
"The success of the program is evident in the fact that there have been no successful attacks on northern oil lines this year," the report said, noting that contributed to the increased oil production.
The Iraqis have refused to take over control of some of the facilities built for them, forcing the U.S. to "unilaterally transfer" hundreds of projects without formal agreement and increasing the risk that the U.S. investment will be wasted, Bowen said.
Some of the projects were rejected because they were incomplete, some because they didn't meet Iraqi expectations and others because the Iraqis deemed them unnecessary, Bowen said, recommending a new U.S.-Iraqi agreement for such transfers.
Other details in the report said:
—The quarter's oil production averaged 2.43 million barrels a day, the highest reported since the reconstruction program began five years ago, but below prewar levels of 2.58 million.
As of June 30, the United States had spent $1.86 billion on rebuilding the oil industry.
— Average daily electricity production for the quarter was 12 percent higher than the same time last year and the second highest quarterly average since the start of the war. Still, publicly available power, which is provided virtually without fees, only meets about 55 percent of increasing demand, forcing people to buy power buy power from private generators run by neighbors or small businessmen.
The United States has spent nearly $4.62 billion in this sector.
— Only 47 percent of people in rural areas use drinking water supplied via pipes to their homes. Only 20 percent of families outside of Baghdad province have access to working sewage facilities.
The United States has $2.4 billion in the water sector.
— Despite better security, "violence continues to pose a deadly threat to personnel involved in reconstruction activities." The State Department reported that 15 U.S. civilians died in Iraq this quarter. Since the beginning of the U.S. reconstruction effort, 271 U.S. civilians have died in Iraq.
House panel votes to cite Rove for contempt
Original Link: http://seattletimes.nwsource.com/html/politics/2008080937_aplameduckoversight.html
By LAURIE KELLMAN, Associated Press Writer
A House panel Wednesday voted to cite former top White House aide Karl Rove for contempt of Congress as its Senate counterpart explored punishment for alleged Bush administration misdeeds.
Voting 20-14 along party lines, the House Judiciary Committee said that Rove had broken the law by failing to appear at a July 10 hearing on allegations of White House influence over the Justice Department, including whether Rove encouraged prosecutions against Democrats such as former Alabama Gov. Don Siegelman.
The committee decision is only a recommendation, and a spokesman for Speaker Nancy Pelosi, D-Calif., said she would not decide until September whether to bring it to a final vote.
With little more than three months before Election Day, it wasn't clear whether majority Democrats could take any substantial action in a political environment in which time for the current Congress is running short and lawmakers face a host of daunting legislative problems and a cluttered calendar.
The House committee vote occurred as members of the Senate Judiciary Committee delved into allegations of wrongdoing ranging from discriminating against liberals at Justice to ignoring subpoenas and lying to Congress.
For his part, Rove has denied any involvement with Justice decisions, and the White House has said Congress has no authority to compel testimony from current and former advisers. His attorney, Robert Luskin, had urged the panel in letter not to vote for a citation, calling it a "gratuitously punitive" action that would serve no purpose because the question of executive privilege is already pending in two other cases in federal court.
Republicans who unanimously opposed the measure accused Democrats of staging political theater.
"Instead of conducting witch hunts, we should consider bipartisan legislation to reduce the price of gas, reduce crime and secure the borders," said Rep. Lamar Smith of Texas, the top panel Republican.
But Democrats cited recent internal audits finding that politics heavily shaped Justice Department hiring, and they said that Rove had left them with no choice but to support a contempt citation.
"His name has come up repeatedly in the hearings on this subject," said Judiciary Chairman John Conyers, D-Mich. "Yet he refuses to testify based on legally invalid claims of immunity privilege."
The Senate proceedings were the latest congressional review of the White House, a constitutionally mandated power that majority Democrats are eager to use. Justice Department Inspector General Glenn A. Fine, who reported this week that former department officials broke the law by letting administration politics dictate the hiring of prosecutors, immigration judges and career government lawyers, Fine said his office and Justice's Office of Professional Responsibility are investigating.
He said specifically that they're trying to determine whether Bradley Schlozman, former head of the department's Civil Rights Division, used political or ideological criteria to make hiring decisions.
Under questioning by Sen. Arlen Specter of Pennsylvania, the panel's senior Republican, Fine said he uncovered no evidence that any Justice officials involved made false statements to Congress or violated criminal law. Politicization of the hiring process for career positions is a violation of civil law and department policy, he said.
The Senate probe sprang from Justice's firings of nine federal prosecutors that sparked congressional investigations last year and led to the resignation of Attorney General Alberto Gonzales.
House and Senate Democrats said the findings of Justice's IG's office affirmed their contention that career employees there were hired and fired based on whether they were deemed sufficiently conservative, a violation of law. Conyers said earlier that he was considering bringing criminal charges against some of the former officials named in Fine's report who may have lied to his committee. Lying to Congress is a crime, but there's little agreement among Democrats on whether a perjury referral against some of the officials is warranted.
Sen. Chuck Schumer, D-N.Y., who led the investigation into the prosecutor firings, is pressing Fine to say whether making such a disregard of civil service rules a crime would deter the kind of conduct his investigation uncovered.
Similar legislation will be considered in the House.
"I will be asking Chairman Conyers to consider legislation to ensure that the politicization of hiring of career employees at the Justice Department never happens again," Pelosi said in a statement.
By LAURIE KELLMAN, Associated Press Writer
A House panel Wednesday voted to cite former top White House aide Karl Rove for contempt of Congress as its Senate counterpart explored punishment for alleged Bush administration misdeeds.
Voting 20-14 along party lines, the House Judiciary Committee said that Rove had broken the law by failing to appear at a July 10 hearing on allegations of White House influence over the Justice Department, including whether Rove encouraged prosecutions against Democrats such as former Alabama Gov. Don Siegelman.
The committee decision is only a recommendation, and a spokesman for Speaker Nancy Pelosi, D-Calif., said she would not decide until September whether to bring it to a final vote.
With little more than three months before Election Day, it wasn't clear whether majority Democrats could take any substantial action in a political environment in which time for the current Congress is running short and lawmakers face a host of daunting legislative problems and a cluttered calendar.
The House committee vote occurred as members of the Senate Judiciary Committee delved into allegations of wrongdoing ranging from discriminating against liberals at Justice to ignoring subpoenas and lying to Congress.
For his part, Rove has denied any involvement with Justice decisions, and the White House has said Congress has no authority to compel testimony from current and former advisers. His attorney, Robert Luskin, had urged the panel in letter not to vote for a citation, calling it a "gratuitously punitive" action that would serve no purpose because the question of executive privilege is already pending in two other cases in federal court.
Republicans who unanimously opposed the measure accused Democrats of staging political theater.
"Instead of conducting witch hunts, we should consider bipartisan legislation to reduce the price of gas, reduce crime and secure the borders," said Rep. Lamar Smith of Texas, the top panel Republican.
But Democrats cited recent internal audits finding that politics heavily shaped Justice Department hiring, and they said that Rove had left them with no choice but to support a contempt citation.
"His name has come up repeatedly in the hearings on this subject," said Judiciary Chairman John Conyers, D-Mich. "Yet he refuses to testify based on legally invalid claims of immunity privilege."
The Senate proceedings were the latest congressional review of the White House, a constitutionally mandated power that majority Democrats are eager to use. Justice Department Inspector General Glenn A. Fine, who reported this week that former department officials broke the law by letting administration politics dictate the hiring of prosecutors, immigration judges and career government lawyers, Fine said his office and Justice's Office of Professional Responsibility are investigating.
He said specifically that they're trying to determine whether Bradley Schlozman, former head of the department's Civil Rights Division, used political or ideological criteria to make hiring decisions.
Under questioning by Sen. Arlen Specter of Pennsylvania, the panel's senior Republican, Fine said he uncovered no evidence that any Justice officials involved made false statements to Congress or violated criminal law. Politicization of the hiring process for career positions is a violation of civil law and department policy, he said.
The Senate probe sprang from Justice's firings of nine federal prosecutors that sparked congressional investigations last year and led to the resignation of Attorney General Alberto Gonzales.
House and Senate Democrats said the findings of Justice's IG's office affirmed their contention that career employees there were hired and fired based on whether they were deemed sufficiently conservative, a violation of law. Conyers said earlier that he was considering bringing criminal charges against some of the former officials named in Fine's report who may have lied to his committee. Lying to Congress is a crime, but there's little agreement among Democrats on whether a perjury referral against some of the officials is warranted.
Sen. Chuck Schumer, D-N.Y., who led the investigation into the prosecutor firings, is pressing Fine to say whether making such a disregard of civil service rules a crime would deter the kind of conduct his investigation uncovered.
Similar legislation will be considered in the House.
"I will be asking Chairman Conyers to consider legislation to ensure that the politicization of hiring of career employees at the Justice Department never happens again," Pelosi said in a statement.
Tuesday, July 29, 2008
S&P: Home prices drop by record 15.8 pct. in May
Original Link: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/07/29/financial/f060534D10.DTL
By J.W. ELPHINSTONE, AP Business Writer
Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.
The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.
No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.
Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.
Nine metropolitan cities — Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. — posted record declines in May. And the value of housing in Detroit is now lower than it was in 2000.
But a possible bright spot in an otherwise dismal report, seven metros — Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta — showed smaller annual declines.
Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.
Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last metro still showing price gains.
By J.W. ELPHINSTONE, AP Business Writer
Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.
The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.
No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.
Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.
Nine metropolitan cities — Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. — posted record declines in May. And the value of housing in Detroit is now lower than it was in 2000.
But a possible bright spot in an otherwise dismal report, seven metros — Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta — showed smaller annual declines.
Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.
Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last metro still showing price gains.
Criminal case ices GOP plans
Original Link: http://www.politico.com/news/stories/0708/12162.html
By: Martin Kady II and John Bresnahan
Beleaguered congressional Republicans woke up Tuesday morning thinking they’d gained traction with their focus on offshore oil drilling and hoping that they could pin the “culture of corruption” on Democrats.
By lunchtime, the longest-serving Republican senator in history had been indicted on charges that he hid $250,000 in gifts from an oil company looking for favors.
Can it get any worse for the GOP?
“This is very bad for the party,” a retiring Senate Republican told Politico as news of Ted Stevens’ indictment echoed across Capitol Hill on Tuesday. “The timing on this couldn’t be worse.”
One year ago today, Stevens pleaded with his Republican colleagues to “stay with me” as he rode out a Justice Department investigation and an FBI raid on his Alaska home.
Now, there’s an arrest warrant out for the 84-year-old senator. He’s been stripped of his top committee rankings. His iconic career is crumbling. His hopes for reelection are in serious doubt.
And Senate Republicans have no idea what to do about it.
GOP Senate leader Mitch McConnell of Kentucky was a congressional intern in 1964, when Stevens was planning his first run for the Senate. McConnell can’t and won’t ask a legend to resign, at least at this point.
The Senate ethics committee says it won’t do anything until the criminal case runs it course.
Senate Majority Leader Harry Reid (D-Nev.) has left the ball in McConnell’s court, saying it’s “all up to [Republicans]” to decide how to handle Stevens.
Rep. Adam Putnam of Florida, the House Republican Conference chairman who had hoped to spend Tuesday blaming Barack Obama for Democratic inaction on energy, instead was left to argue that the indictment of the Senate’s most senior Republican was somehow “bad for both parties.”
The conservative National Review called for Stevens’ resignation. Democrats across the country called on their Republican opponents to return Stevens’ campaign contributions. Illinois Rep. Mark Kirk, a Republican, used Stevens’ indictment to demand passage of legislation that would deny congressional pensions to members convicted of felonies.
Stevens proclaimed his innocence Tuesday, saying he “never knowingly submitted a false disclosure form required by law as a U.S. senator.” But the details laid out by the Department of Justice are blistering, suggesting a seven-year pattern of failing to disclose the “gifts” provided to the senator by the Alaska oil field services company VECO.
The indictment charges Stevens with failing to report on his financial disclosure forms $250,000 in “things of value” including remodeling work on his home, a Viking grill and a sweetheart deal on a Land Rover.
The indictment further alleges that “during the same time he was concealing his continued receipt of these things of value from VECO and [VECO executive Bill J.] Allen,” that Stevens “received solicitations for official actions from Allen and other VECO employees, and that Sen. Stevens used his position and office on behalf of VECO during that same time period.”
In exchange, according to the indictment, the oil services company asked Stevens for help with company projects in Pakistan and Russia, as well as a National Science Foundation grant to a VECO subsidiary.
Matthew Friedrich, the acting assistant attorney general, said that prosecutors have not been able to establish the quid pro quo necessary for bribery charges. However, he said that the investigation is ongoing.
Stevens has a reputation as a fighter, so he may very well launch a counterattack on the Justice case against him. His campaign has said it’s “full steam ahead” for the fall election, adding that Stevens’ office has been “flooded” with calls and e-mails from supporters urging him to press on.
“The message from them is clear: Alaska needs Ted Stevens in the U.S. Senate.”
Stevens is a former Senate Appropriations Committee chairman who has funneled billions of dollars in earmarks and federal funds back to his home state, but he become the butt of jokes over the so-called “bridge to nowhere” earmark that became a symbol of Washington excess.
While he’s known in Washington for his explosive temper, Stevens is beloved in Alaska, where Republican Gov. Sarah Palin said Tuesday that news of the senator’s indictment had “rock[ed] the foundation of our state.”
“A lot of people here see him like he’s our uncle,” said McHugh Pierre, a spokesman for the Alaska Republican Party. “A lot of people want to help him” in his time of need, he added.
Sen. Daniel Inouye (D-Hawaii), a longtime Stevens friend, said he wasn’t surprised by the news because Stevens has been under investigation for so long. He said, however, that he believes Stevens is innocent.
Other senators responded with caution. “I need to learn more of the facts before I comment,” said Sen. John Warner (R-Va.). “I have the highest personal regard for him,” Warner added. “He is a strong man. He fought hard for his state, which he loved. All of us have unexpected moments in our career. All of us have to do our best to work through them. I wish him the best.”
Sen. Richard J. Durbin of Illinois, emerging from the Democrats’ weekly policy lunch, said there had been a “somber” reaction to word of Stevens’ indictment. Sen. Chris Dodd (D-Conn.) said he was saddened by the news.
Appearing on MSNBC on Tuesday afternoon, Republican National Committee Chairman Mike Duncan said that the indictment involves “a serious allegation” but insisted that it wouldn’t be a distraction from John McCain’s presidential campaign. “This presidential campaign will not be about the senior senator from Alaska,” Duncan said. “It’s going to be about big issues, about energy, about tax policy; it’s going to be about the future of America. This is a blip along the way.”
McCain, who has clashed repeatedly with Stevens in the past, issued no statement on the indictment.
Late Tuesday, an Appropriations Committee aide said that Sen. Thad Cochran (R-Miss.) will replace Stevens as ranking member on the Appropriation Committee’s Defense subcommittee “through the end of this Congress or until such time as Sen. Stevens is able to resume his duties as ranking member.”
Patrick O’Connor and Daniel W. Reilly contributed to this story.
By: Martin Kady II and John Bresnahan
Beleaguered congressional Republicans woke up Tuesday morning thinking they’d gained traction with their focus on offshore oil drilling and hoping that they could pin the “culture of corruption” on Democrats.
By lunchtime, the longest-serving Republican senator in history had been indicted on charges that he hid $250,000 in gifts from an oil company looking for favors.
Can it get any worse for the GOP?
“This is very bad for the party,” a retiring Senate Republican told Politico as news of Ted Stevens’ indictment echoed across Capitol Hill on Tuesday. “The timing on this couldn’t be worse.”
One year ago today, Stevens pleaded with his Republican colleagues to “stay with me” as he rode out a Justice Department investigation and an FBI raid on his Alaska home.
Now, there’s an arrest warrant out for the 84-year-old senator. He’s been stripped of his top committee rankings. His iconic career is crumbling. His hopes for reelection are in serious doubt.
And Senate Republicans have no idea what to do about it.
GOP Senate leader Mitch McConnell of Kentucky was a congressional intern in 1964, when Stevens was planning his first run for the Senate. McConnell can’t and won’t ask a legend to resign, at least at this point.
The Senate ethics committee says it won’t do anything until the criminal case runs it course.
Senate Majority Leader Harry Reid (D-Nev.) has left the ball in McConnell’s court, saying it’s “all up to [Republicans]” to decide how to handle Stevens.
Rep. Adam Putnam of Florida, the House Republican Conference chairman who had hoped to spend Tuesday blaming Barack Obama for Democratic inaction on energy, instead was left to argue that the indictment of the Senate’s most senior Republican was somehow “bad for both parties.”
The conservative National Review called for Stevens’ resignation. Democrats across the country called on their Republican opponents to return Stevens’ campaign contributions. Illinois Rep. Mark Kirk, a Republican, used Stevens’ indictment to demand passage of legislation that would deny congressional pensions to members convicted of felonies.
Stevens proclaimed his innocence Tuesday, saying he “never knowingly submitted a false disclosure form required by law as a U.S. senator.” But the details laid out by the Department of Justice are blistering, suggesting a seven-year pattern of failing to disclose the “gifts” provided to the senator by the Alaska oil field services company VECO.
The indictment charges Stevens with failing to report on his financial disclosure forms $250,000 in “things of value” including remodeling work on his home, a Viking grill and a sweetheart deal on a Land Rover.
The indictment further alleges that “during the same time he was concealing his continued receipt of these things of value from VECO and [VECO executive Bill J.] Allen,” that Stevens “received solicitations for official actions from Allen and other VECO employees, and that Sen. Stevens used his position and office on behalf of VECO during that same time period.”
In exchange, according to the indictment, the oil services company asked Stevens for help with company projects in Pakistan and Russia, as well as a National Science Foundation grant to a VECO subsidiary.
Matthew Friedrich, the acting assistant attorney general, said that prosecutors have not been able to establish the quid pro quo necessary for bribery charges. However, he said that the investigation is ongoing.
Stevens has a reputation as a fighter, so he may very well launch a counterattack on the Justice case against him. His campaign has said it’s “full steam ahead” for the fall election, adding that Stevens’ office has been “flooded” with calls and e-mails from supporters urging him to press on.
“The message from them is clear: Alaska needs Ted Stevens in the U.S. Senate.”
Stevens is a former Senate Appropriations Committee chairman who has funneled billions of dollars in earmarks and federal funds back to his home state, but he become the butt of jokes over the so-called “bridge to nowhere” earmark that became a symbol of Washington excess.
While he’s known in Washington for his explosive temper, Stevens is beloved in Alaska, where Republican Gov. Sarah Palin said Tuesday that news of the senator’s indictment had “rock[ed] the foundation of our state.”
“A lot of people here see him like he’s our uncle,” said McHugh Pierre, a spokesman for the Alaska Republican Party. “A lot of people want to help him” in his time of need, he added.
Sen. Daniel Inouye (D-Hawaii), a longtime Stevens friend, said he wasn’t surprised by the news because Stevens has been under investigation for so long. He said, however, that he believes Stevens is innocent.
Other senators responded with caution. “I need to learn more of the facts before I comment,” said Sen. John Warner (R-Va.). “I have the highest personal regard for him,” Warner added. “He is a strong man. He fought hard for his state, which he loved. All of us have unexpected moments in our career. All of us have to do our best to work through them. I wish him the best.”
Sen. Richard J. Durbin of Illinois, emerging from the Democrats’ weekly policy lunch, said there had been a “somber” reaction to word of Stevens’ indictment. Sen. Chris Dodd (D-Conn.) said he was saddened by the news.
Appearing on MSNBC on Tuesday afternoon, Republican National Committee Chairman Mike Duncan said that the indictment involves “a serious allegation” but insisted that it wouldn’t be a distraction from John McCain’s presidential campaign. “This presidential campaign will not be about the senior senator from Alaska,” Duncan said. “It’s going to be about big issues, about energy, about tax policy; it’s going to be about the future of America. This is a blip along the way.”
McCain, who has clashed repeatedly with Stevens in the past, issued no statement on the indictment.
Late Tuesday, an Appropriations Committee aide said that Sen. Thad Cochran (R-Miss.) will replace Stevens as ranking member on the Appropriation Committee’s Defense subcommittee “through the end of this Congress or until such time as Sen. Stevens is able to resume his duties as ranking member.”
Patrick O’Connor and Daniel W. Reilly contributed to this story.
Ted Stevens indicted, longest-serving GOP senator
Original Link: http://www.guardian.co.uk/world/feedarticle/7687341
By LARA JAKES JORDAN, Associated Press Writer
Sen. Ted Stevens, the nation's longest-serving Republican senator and a major figure in Alaska politics since before statehood, was indicted Tuesday on seven felony counts of concealing more than a quarter of a million dollars in house renovations and gifts from a powerful oil contractor that lobbied him for government aid.
Stevens, 84, is the first sitting U.S. senator to face federal indictment since 1993. He declared, ``I am innocent of these charges and intend to prove that.''
He is accused of lying on his annual Senate financial disclosure reports between 1999 and 2006 - an indictment that caps a lengthy FBI investigation that has upended Alaska politics and brought unfavorable attention to both Stevens and his congressional colleague, GOP Rep. Don Young. Both are running for re-election this year.
Stevens' indictment further damages Republican prospects in the November election as Senate Democrats, who now enjoy a 51-49 majority, try to capture a filibuster-proof 60-vote majority. Stevens faces both Democratic and Republican challengers who are trying to capitalize on his legal woes.
The Justice Department accused Stevens of accepting expensive work on his home in Girdwood, Alaska, a ski resort town outside Anchorage, from oil services contractor VECO Corp. and its executives. VECO normally builds oil processing equipment and pipelines, but its employees helped do the work on Stevens' home.
Prosecutors said that work included a new first floor, garage, wraparound deck, plumbing and electrical wiring. He also is accused of accepting from VECO a Viking gas grill, furniture and tools, and of failing to report swapping an old Ford for a new Land Rover to be driven by one of his children.
From May 1999 to August 2007, prosecutors said, the senator concealed ``his continuing receipt of hundreds of thousands of dollars worth of things of value from a private corporation.''
Stevens said in a statement distributed by his office: ``I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator.''
He said that in line with Senate GOP rules he was temporarily giving up the ranking positions his seniority has given him. If the Republicans were to take over the Senate, the party's most-senior senator would be in line to become president pro tempore, a mostly symbolic title but one that would make him third in line for the presidency after the vice president and speaker of the House.
Stevens was expected to turn himself in, prosecutors said. The case was assigned to U.S. District Judge Emmet G. Sullivan, who was appointed to the bench by President Clinton, a Democrat.
Tuesday's charges tarnish one of the most powerful and savvy of the GOP lions in the Senate. Stevens has coasted to re-election six times in Alaska but this year is in what has been viewed as the toughest race of his career against Anchorage Mayor Mark Begich.
Young, who is under scrutiny for his fundraising practices involving VECO, called Stevens ``one of the most effective and honest legislators I have ever worked with.''
``He has worked diligently to serve Alaska and has fought to make life better for people in every region of our state,'' Young said in a statement. ``I hope people will not rush to judgment and will let the judicial process work. The process is based on being innocent until proven guilty.''
Said Senate Majority Leader Harry Reid, D-Nev.: ``It's a sad day for him, us, but you know I believe in the American system of justice, and he's presumed innocent.''
At the White House, press secretary Dana Perino said, ``The president has been working with Senator Stevens for many years, and he appreciates his strong leadership on key issues. This is a legal matter that the Department of Justice is handling, and so we will not comment further on it.''
Prosecutors said Stevens ``took multiple steps to continue'' receiving things from VECO and its founder, Bill Allen. The indictment says Allen and other VECO employees were soliciting Stevens for ``multiple official actions ... knowing that Stevens could and did use his official position and his office on behalf of VECO during that same time period.''
VECO's requests included funding and other aid for the company's projects and partnerships in Pakistan and Russia. It also included federal grants from several agencies, as well as help in building a national gas pipeline in Alaska's North Slope Region, according to the indictment filed in Washington.
Stevens has maintained he didn't do anything for VECO that he didn't do for any other constituent or pro-Alaska interest. The indictment stops short of charging Stevens with bribery or other traditional corruption crimes.
Had prosecutors been able to prove any special treatment for VECO, that could have triggered much more serious charges.
VECO was once the dominant force in Alaska oil services industry. Its founder, Allen, and vice president, Rick Smith, have pleaded guilty to bribing state lawmakers to push legislation to help the company. Allen agreed to cooperate with the FBI as part of a plea deal for a lesser penalty. That cooperation included letting the FBI tape his phone calls with Stevens, though those calls do not appear as part of the indictment.
Throughout the investigation, Stevens has remained an iconic figure in Alaska. A moderate Republican, he has served almost 40 years in the Senate, where he unabashedly steered money to his remote and sparsely populated home state. He often drew criticism from outside Alaska for going around the traditional appropriations process to obtain hundreds of millions of dollars for pet projects.
The Justice Department has closely followed that money, looking for where it intersects with the senator's son, Ben, who also is under investigation concerning financial ties to a company that stood to make millions off a piece of federal legislation his father wrote.
Tuesday's indictment comes a year after another Republican senator, Larry Craig of Idaho, pleaded guilty to charges arising out of a Minneapolis airport men's room sex sting.
On Capitol Hill, Sen. John Warner, R-Va., called Stevens a hero, adding, however, he didn't know any details about the indictment. ``All of us have times that we have to deal with that are tough,'' Warner said. ``I wish him the best.''
Another GOP colleague, Arlen Specter of Pennsylvania, said, ``I've known Ted Stevens for 28 years, and have always known him to be impeccably honest.''
The last sitting senator to be indicted in federal court was Republican Sen. David Durenberger of Minnesota, who was charged in 1993 with conspiring to file fraudulent claims for Senate reimbursement of $3,825 in lodging expenses. He eventually pleaded guilty to misdemeanor charges and was sentenced to one year of probation and a $1,000 fine.
In the Stevens case, Acting Assistant Attorney General Matthew Friedrich, chief of the Justice Department's criminal division, said prosecutors followed their policy of keeping politics out of the decision-making process.
``We bring cases based on our evaluation of the facts and the law,'' Friedrich said. ``We bring cases when they are ready to be charged, and that's what happened here.''
By LARA JAKES JORDAN, Associated Press Writer
Sen. Ted Stevens, the nation's longest-serving Republican senator and a major figure in Alaska politics since before statehood, was indicted Tuesday on seven felony counts of concealing more than a quarter of a million dollars in house renovations and gifts from a powerful oil contractor that lobbied him for government aid.
Stevens, 84, is the first sitting U.S. senator to face federal indictment since 1993. He declared, ``I am innocent of these charges and intend to prove that.''
He is accused of lying on his annual Senate financial disclosure reports between 1999 and 2006 - an indictment that caps a lengthy FBI investigation that has upended Alaska politics and brought unfavorable attention to both Stevens and his congressional colleague, GOP Rep. Don Young. Both are running for re-election this year.
Stevens' indictment further damages Republican prospects in the November election as Senate Democrats, who now enjoy a 51-49 majority, try to capture a filibuster-proof 60-vote majority. Stevens faces both Democratic and Republican challengers who are trying to capitalize on his legal woes.
The Justice Department accused Stevens of accepting expensive work on his home in Girdwood, Alaska, a ski resort town outside Anchorage, from oil services contractor VECO Corp. and its executives. VECO normally builds oil processing equipment and pipelines, but its employees helped do the work on Stevens' home.
Prosecutors said that work included a new first floor, garage, wraparound deck, plumbing and electrical wiring. He also is accused of accepting from VECO a Viking gas grill, furniture and tools, and of failing to report swapping an old Ford for a new Land Rover to be driven by one of his children.
From May 1999 to August 2007, prosecutors said, the senator concealed ``his continuing receipt of hundreds of thousands of dollars worth of things of value from a private corporation.''
Stevens said in a statement distributed by his office: ``I have proudly served this nation and Alaska for over 50 years. My public service began when I served in World War II. It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator.''
He said that in line with Senate GOP rules he was temporarily giving up the ranking positions his seniority has given him. If the Republicans were to take over the Senate, the party's most-senior senator would be in line to become president pro tempore, a mostly symbolic title but one that would make him third in line for the presidency after the vice president and speaker of the House.
Stevens was expected to turn himself in, prosecutors said. The case was assigned to U.S. District Judge Emmet G. Sullivan, who was appointed to the bench by President Clinton, a Democrat.
Tuesday's charges tarnish one of the most powerful and savvy of the GOP lions in the Senate. Stevens has coasted to re-election six times in Alaska but this year is in what has been viewed as the toughest race of his career against Anchorage Mayor Mark Begich.
Young, who is under scrutiny for his fundraising practices involving VECO, called Stevens ``one of the most effective and honest legislators I have ever worked with.''
``He has worked diligently to serve Alaska and has fought to make life better for people in every region of our state,'' Young said in a statement. ``I hope people will not rush to judgment and will let the judicial process work. The process is based on being innocent until proven guilty.''
Said Senate Majority Leader Harry Reid, D-Nev.: ``It's a sad day for him, us, but you know I believe in the American system of justice, and he's presumed innocent.''
At the White House, press secretary Dana Perino said, ``The president has been working with Senator Stevens for many years, and he appreciates his strong leadership on key issues. This is a legal matter that the Department of Justice is handling, and so we will not comment further on it.''
Prosecutors said Stevens ``took multiple steps to continue'' receiving things from VECO and its founder, Bill Allen. The indictment says Allen and other VECO employees were soliciting Stevens for ``multiple official actions ... knowing that Stevens could and did use his official position and his office on behalf of VECO during that same time period.''
VECO's requests included funding and other aid for the company's projects and partnerships in Pakistan and Russia. It also included federal grants from several agencies, as well as help in building a national gas pipeline in Alaska's North Slope Region, according to the indictment filed in Washington.
Stevens has maintained he didn't do anything for VECO that he didn't do for any other constituent or pro-Alaska interest. The indictment stops short of charging Stevens with bribery or other traditional corruption crimes.
Had prosecutors been able to prove any special treatment for VECO, that could have triggered much more serious charges.
VECO was once the dominant force in Alaska oil services industry. Its founder, Allen, and vice president, Rick Smith, have pleaded guilty to bribing state lawmakers to push legislation to help the company. Allen agreed to cooperate with the FBI as part of a plea deal for a lesser penalty. That cooperation included letting the FBI tape his phone calls with Stevens, though those calls do not appear as part of the indictment.
Throughout the investigation, Stevens has remained an iconic figure in Alaska. A moderate Republican, he has served almost 40 years in the Senate, where he unabashedly steered money to his remote and sparsely populated home state. He often drew criticism from outside Alaska for going around the traditional appropriations process to obtain hundreds of millions of dollars for pet projects.
The Justice Department has closely followed that money, looking for where it intersects with the senator's son, Ben, who also is under investigation concerning financial ties to a company that stood to make millions off a piece of federal legislation his father wrote.
Tuesday's indictment comes a year after another Republican senator, Larry Craig of Idaho, pleaded guilty to charges arising out of a Minneapolis airport men's room sex sting.
On Capitol Hill, Sen. John Warner, R-Va., called Stevens a hero, adding, however, he didn't know any details about the indictment. ``All of us have times that we have to deal with that are tough,'' Warner said. ``I wish him the best.''
Another GOP colleague, Arlen Specter of Pennsylvania, said, ``I've known Ted Stevens for 28 years, and have always known him to be impeccably honest.''
The last sitting senator to be indicted in federal court was Republican Sen. David Durenberger of Minnesota, who was charged in 1993 with conspiring to file fraudulent claims for Senate reimbursement of $3,825 in lodging expenses. He eventually pleaded guilty to misdemeanor charges and was sentenced to one year of probation and a $1,000 fine.
In the Stevens case, Acting Assistant Attorney General Matthew Friedrich, chief of the Justice Department's criminal division, said prosecutors followed their policy of keeping politics out of the decision-making process.
``We bring cases based on our evaluation of the facts and the law,'' Friedrich said. ``We bring cases when they are ready to be charged, and that's what happened here.''
Sen. Stevens Indicted in Alaska Corruption Probe
Original Link: http://www.cqpolitics.com/wmspage.cfm?docID=news-000002928658
By Kathleen Hunter, CQ Staff
Sen. Ted Stevens of Alaska, the senior Republican in the Senate, was indicted Tuesday by a federal grand jury in Washington on seven felony counts of making false statements on his financial disclosure forms.
The 28-page indictment — the latest in an ongoing probe of corruption in Alaska politics — claims Stevens concealed receiving more than $250,000 worth of benefits from oil services company Veco Corp. and its former chief executive, Bill Allen, from 1999-2006.
The benefits allegedly included substantial renovation and enlargement of his house in Girdwood, Alaska, household goods and automobiles that were significantly more valuable than ones he offered in exchange.
His home was raided in July 2007 by the FBI and the IRS, which was reportedly investigating whether Veco may have covered Stevens’ home renovation costs.
The indictment also claims Stevens used his Senate position to aid Veco at the request of Allen and other company employees.
Stevens, 84, an icon in Alaska politics since first winning his seat by appointment in December 1968, denied wrongdoing in a statement and said he was giving up his positions as ranking Republican on the Commerce, Science and Transportation Committee and two subcommittees.
“It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator,” Stevens said. “I am innocent of these charges and intend to prove that.”
Matthew Friedrich, acting assistant attorney general for the Criminal Division, said Stevens “will be allowed to turn himself in. He will not be arrested.”
Allen and former Veco vice president Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to Alaska public officials.
Two lobbyists and three Alaska state lawmakers have also been convicted in the scandal, including Peter Knott, the former speaker of the Alaska House, who was convicted of extortion, bribery and conspiracy last year and sentenced to six years in prison.
Colleagues Cautious
Stevens’ closest friend in the Senate and a fellow World War II veteran, Hawaii Democrat Daniel K. Inouye , said Stevens should be considered “innocent until proven guilty,” adding that the indictment should not impact Stevens’ ability to do his job.
Another fellow World War II and Senate veteran, John W. Warner , R-Va., said Stevens has “been a hero and a fighter, and he’s been a fighter for his country’s interests and a fighter for his state ever since.”
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens, the longest-serving Republican senator in history, ranks seventh in all-time Senate seniority. He was chairman of the Appropriations Committee from 1997 to 2005 — except when Democrats held the chamber for 18 months in 2001 and 2002 — and remains ranking Republican on the Defense Appropriations Subcommittee. Stevens also is ranking Republican on the Homeland Security and Governmental Affairs Disaster Recovery Subcommittee.
Senate Republican Conference rules required him to relinquish those posts.
An Appropriations Committee aide said committee Republicans would recommend Thad Cochran of Mississippi take Stevens’ place on the Defense subcommittee. Cochran is ranking Republican on the full committee.
Earlier, outside watchdogs groups that had been critical of the Senate Ethics Committee’s failure to investigate allegations against Stevens hailed the Justice Department’s action and called on GOP leaders to strip him of his committee leadership posts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said, “We think the indictment is overdue. We are very happy to see the Justice Department is taking action when the Senate wouldn’t.”
Added Steve Ellis, vice president of Taxpayers for Common Sense: “Senator Stevens is entitled to due process and remains innocent until proven otherwise. But considering his role as a powerful appropriator and ranking member of Commerce, Science and Transportation Committee, he should be immediately removed from those capacities.”
Among the favors Stevens was accused of doing for Veco in the indictment was helping the company win a federal contract to provide logistical support services such as transportation, clothing and housing to National Science Foundation outposts in the Arctic. Ellis said the 5-year contract was worth $170 million and Veco “had little experience in the area.”
The indictment also accuses Stevens of aiding Veco by securing funds for a new natural gas pipeline from Alaska’s North Slope region to Chicago in the fiscal 2005 military construction spending bill (PL 108-324).
Veco’s lobbyist on the pipeline issue, former Alaska Teamster official Gerald L. Hood, became local district director for Rep. Don Young , R-Alaska, on Nov. 1, 2006, the day after he stopped lobbying for the company, according to federal databases.
Stevens faced little electoral risk when he announced in 2006 that he would seek a seventh full term this year. But the ongoing scandal has eroded his support to the point where his likely Democratic opponent, Anchorage Mayor Mark Begich, leads in some polls.
Democratic Senatorial Campaign Committee Chairman Charles E. Schumer , D-N.Y., declined to comment on how Stevens’ indictment might influence what was already considered a pickup opportunity for Democrats.
“I feel bad for him and his family. That’s all I want to say today,” Schumer said.
Stevens also faces opposition in the Aug. 26 GOP primary from David Cuddy, a wealthy real estate developer who lost to Stevens in the 1996 primary after spending more than $1 million in personal funds, and five lesser-known candidates including Republican minister Gerald L. Heikes.
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens’ campaign spokesman Aaron Saunders said the campaign is moving “full steam ahead. Our office has been flooded today with calls and e-mails from supporters urging the senator to press on.”
But in the aftermath of the indictment, CQ Politics is changing its rating of the Alaska Senate race from Leans Republican to Leans Democratic.
By Kathleen Hunter, CQ Staff
Sen. Ted Stevens of Alaska, the senior Republican in the Senate, was indicted Tuesday by a federal grand jury in Washington on seven felony counts of making false statements on his financial disclosure forms.
The 28-page indictment — the latest in an ongoing probe of corruption in Alaska politics — claims Stevens concealed receiving more than $250,000 worth of benefits from oil services company Veco Corp. and its former chief executive, Bill Allen, from 1999-2006.
The benefits allegedly included substantial renovation and enlargement of his house in Girdwood, Alaska, household goods and automobiles that were significantly more valuable than ones he offered in exchange.
His home was raided in July 2007 by the FBI and the IRS, which was reportedly investigating whether Veco may have covered Stevens’ home renovation costs.
The indictment also claims Stevens used his Senate position to aid Veco at the request of Allen and other company employees.
Stevens, 84, an icon in Alaska politics since first winning his seat by appointment in December 1968, denied wrongdoing in a statement and said he was giving up his positions as ranking Republican on the Commerce, Science and Transportation Committee and two subcommittees.
“It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator,” Stevens said. “I am innocent of these charges and intend to prove that.”
Matthew Friedrich, acting assistant attorney general for the Criminal Division, said Stevens “will be allowed to turn himself in. He will not be arrested.”
Allen and former Veco vice president Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to Alaska public officials.
Two lobbyists and three Alaska state lawmakers have also been convicted in the scandal, including Peter Knott, the former speaker of the Alaska House, who was convicted of extortion, bribery and conspiracy last year and sentenced to six years in prison.
Colleagues Cautious
Stevens’ closest friend in the Senate and a fellow World War II veteran, Hawaii Democrat Daniel K. Inouye , said Stevens should be considered “innocent until proven guilty,” adding that the indictment should not impact Stevens’ ability to do his job.
Another fellow World War II and Senate veteran, John W. Warner , R-Va., said Stevens has “been a hero and a fighter, and he’s been a fighter for his country’s interests and a fighter for his state ever since.”
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens, the longest-serving Republican senator in history, ranks seventh in all-time Senate seniority. He was chairman of the Appropriations Committee from 1997 to 2005 — except when Democrats held the chamber for 18 months in 2001 and 2002 — and remains ranking Republican on the Defense Appropriations Subcommittee. Stevens also is ranking Republican on the Homeland Security and Governmental Affairs Disaster Recovery Subcommittee.
Senate Republican Conference rules required him to relinquish those posts.
An Appropriations Committee aide said committee Republicans would recommend Thad Cochran of Mississippi take Stevens’ place on the Defense subcommittee. Cochran is ranking Republican on the full committee.
Earlier, outside watchdogs groups that had been critical of the Senate Ethics Committee’s failure to investigate allegations against Stevens hailed the Justice Department’s action and called on GOP leaders to strip him of his committee leadership posts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said, “We think the indictment is overdue. We are very happy to see the Justice Department is taking action when the Senate wouldn’t.”
Added Steve Ellis, vice president of Taxpayers for Common Sense: “Senator Stevens is entitled to due process and remains innocent until proven otherwise. But considering his role as a powerful appropriator and ranking member of Commerce, Science and Transportation Committee, he should be immediately removed from those capacities.”
Among the favors Stevens was accused of doing for Veco in the indictment was helping the company win a federal contract to provide logistical support services such as transportation, clothing and housing to National Science Foundation outposts in the Arctic. Ellis said the 5-year contract was worth $170 million and Veco “had little experience in the area.”
The indictment also accuses Stevens of aiding Veco by securing funds for a new natural gas pipeline from Alaska’s North Slope region to Chicago in the fiscal 2005 military construction spending bill (PL 108-324).
Veco’s lobbyist on the pipeline issue, former Alaska Teamster official Gerald L. Hood, became local district director for Rep. Don Young , R-Alaska, on Nov. 1, 2006, the day after he stopped lobbying for the company, according to federal databases.
Stevens faced little electoral risk when he announced in 2006 that he would seek a seventh full term this year. But the ongoing scandal has eroded his support to the point where his likely Democratic opponent, Anchorage Mayor Mark Begich, leads in some polls.
Democratic Senatorial Campaign Committee Chairman Charles E. Schumer , D-N.Y., declined to comment on how Stevens’ indictment might influence what was already considered a pickup opportunity for Democrats.
“I feel bad for him and his family. That’s all I want to say today,” Schumer said.
Stevens also faces opposition in the Aug. 26 GOP primary from David Cuddy, a wealthy real estate developer who lost to Stevens in the 1996 primary after spending more than $1 million in personal funds, and five lesser-known candidates including Republican minister Gerald L. Heikes.
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens’ campaign spokesman Aaron Saunders said the campaign is moving “full steam ahead. Our office has been flooded today with calls and e-mails from supporters urging the senator to press on.”
But in the aftermath of the indictment, CQ Politics is changing its rating of the Alaska Senate race from Leans Republican to Leans Democratic.
Stevens Indictment Means Trouble for GOP on Senate Seat
Original Link: http://www.cqpolitics.com/wmspage.cfm?docID=news-000002928658
By Kathleen Hunter, CQ Staff
Sen. Ted Stevens of Alaska, the senior Republican in the Senate, was indicted Tuesday by a federal grand jury in Washington on seven felony counts of making false statements on his financial disclosure forms.
The 28-page indictment — the latest in an ongoing probe of corruption in Alaska politics — claims Stevens concealed receiving more than $250,000 worth of benefits from oil services company Veco Corp. and its former chief executive, Bill Allen, from 1999-2006.
The benefits allegedly included substantial renovation and enlargement of his house in Girdwood, Alaska, household goods and automobiles that were significantly more valuable than ones he offered in exchange.
His home was raided in July 2007 by the FBI and the IRS, which was reportedly investigating whether Veco may have covered Stevens’ home renovation costs.
The indictment also claims Stevens used his Senate position to aid Veco at the request of Allen and other company employees.
Stevens, 84, an icon in Alaska politics since first winning his seat by appointment in December 1968, denied wrongdoing in a statement and said he was giving up his positions as ranking Republican on the Commerce, Science and Transportation Committee and two subcommittees.
“It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator,” Stevens said. “I am innocent of these charges and intend to prove that.”
Matthew Friedrich, acting assistant attorney general for the Criminal Division, said Stevens “will be allowed to turn himself in. He will not be arrested.”
Allen and former Veco vice president Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to Alaska public officials.
Two lobbyists and three Alaska state lawmakers have also been convicted in the scandal, including Peter Knott, the former speaker of the Alaska House, who was convicted of extortion, bribery and conspiracy last year and sentenced to six years in prison.
Colleagues Cautious
Stevens’ closest friend in the Senate and a fellow World War II veteran, Hawaii Democrat Daniel K. Inouye , said Stevens should be considered “innocent until proven guilty,” adding that the indictment should not impact Stevens’ ability to do his job.
Another fellow World War II and Senate veteran, John W. Warner , R-Va., said Stevens has “been a hero and a fighter, and he’s been a fighter for his country’s interests and a fighter for his state ever since.”
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens, the longest-serving Republican senator in history, ranks seventh in all-time Senate seniority. He was chairman of the Appropriations Committee from 1997 to 2005 — except when Democrats held the chamber for 18 months in 2001 and 2002 — and remains ranking Republican on the Defense Appropriations Subcommittee. Stevens also is ranking Republican on the Homeland Security and Governmental Affairs Disaster Recovery Subcommittee.
Senate Republican Conference rules required him to relinquish those posts.
An Appropriations Committee aide said committee Republicans would recommend Thad Cochran of Mississippi take Stevens’ place on the Defense subcommittee. Cochran is ranking Republican on the full committee.
Earlier, outside watchdogs groups that had been critical of the Senate Ethics Committee’s failure to investigate allegations against Stevens hailed the Justice Department’s action and called on GOP leaders to strip him of his committee leadership posts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said, “We think the indictment is overdue. We are very happy to see the Justice Department is taking action when the Senate wouldn’t.”
Added Steve Ellis, vice president of Taxpayers for Common Sense: “Senator Stevens is entitled to due process and remains innocent until proven otherwise. But considering his role as a powerful appropriator and ranking member of Commerce, Science and Transportation Committee, he should be immediately removed from those capacities.”
Among the favors Stevens was accused of doing for Veco in the indictment was helping the company win a federal contract to provide logistical support services such as transportation, clothing and housing to National Science Foundation outposts in the Arctic. Ellis said the 5-year contract was worth $170 million and Veco “had little experience in the area.”
The indictment also accuses Stevens of aiding Veco by securing funds for a new natural gas pipeline from Alaska’s North Slope region to Chicago in the fiscal 2005 military construction spending bill (PL 108-324).
Veco’s lobbyist on the pipeline issue, former Alaska Teamster official Gerald L. Hood, became local district director for Rep. Don Young , R-Alaska, on Nov. 1, 2006, the day after he stopped lobbying for the company, according to federal databases.
Stevens faced little electoral risk when he announced in 2006 that he would seek a seventh full term this year. But the ongoing scandal has eroded his support to the point where his likely Democratic opponent, Anchorage Mayor Mark Begich, leads in some polls.
Democratic Senatorial Campaign Committee Chairman Charles E. Schumer , D-N.Y., declined to comment on how Stevens’ indictment might influence what was already considered a pickup opportunity for Democrats.
“I feel bad for him and his family. That’s all I want to say today,” Schumer said.
Stevens also faces opposition in the Aug. 26 GOP primary from David Cuddy, a wealthy real estate developer who lost to Stevens in the 1996 primary after spending more than $1 million in personal funds, and five lesser-known candidates including Republican minister Gerald L. Heikes.
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens’ campaign spokesman Aaron Saunders said the campaign is moving “full steam ahead. Our office has been flooded today with calls and e-mails from supporters urging the senator to press on.”
But in the aftermath of the indictment, CQ Politics is changing its rating of the Alaska Senate race from Leans Republican to Leans Democratic.
By Kathleen Hunter, CQ Staff
Sen. Ted Stevens of Alaska, the senior Republican in the Senate, was indicted Tuesday by a federal grand jury in Washington on seven felony counts of making false statements on his financial disclosure forms.
The 28-page indictment — the latest in an ongoing probe of corruption in Alaska politics — claims Stevens concealed receiving more than $250,000 worth of benefits from oil services company Veco Corp. and its former chief executive, Bill Allen, from 1999-2006.
The benefits allegedly included substantial renovation and enlargement of his house in Girdwood, Alaska, household goods and automobiles that were significantly more valuable than ones he offered in exchange.
His home was raided in July 2007 by the FBI and the IRS, which was reportedly investigating whether Veco may have covered Stevens’ home renovation costs.
The indictment also claims Stevens used his Senate position to aid Veco at the request of Allen and other company employees.
Stevens, 84, an icon in Alaska politics since first winning his seat by appointment in December 1968, denied wrongdoing in a statement and said he was giving up his positions as ranking Republican on the Commerce, Science and Transportation Committee and two subcommittees.
“It saddens me to learn that these charges have been brought against me. I have never knowingly submitted a false disclosure form required by law as a U.S. senator,” Stevens said. “I am innocent of these charges and intend to prove that.”
Matthew Friedrich, acting assistant attorney general for the Criminal Division, said Stevens “will be allowed to turn himself in. He will not be arrested.”
Allen and former Veco vice president Richard L. Smith pleaded guilty in May 2007 to providing more than $400,000 in corrupt payments to Alaska public officials.
Two lobbyists and three Alaska state lawmakers have also been convicted in the scandal, including Peter Knott, the former speaker of the Alaska House, who was convicted of extortion, bribery and conspiracy last year and sentenced to six years in prison.
Colleagues Cautious
Stevens’ closest friend in the Senate and a fellow World War II veteran, Hawaii Democrat Daniel K. Inouye , said Stevens should be considered “innocent until proven guilty,” adding that the indictment should not impact Stevens’ ability to do his job.
Another fellow World War II and Senate veteran, John W. Warner , R-Va., said Stevens has “been a hero and a fighter, and he’s been a fighter for his country’s interests and a fighter for his state ever since.”
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens, the longest-serving Republican senator in history, ranks seventh in all-time Senate seniority. He was chairman of the Appropriations Committee from 1997 to 2005 — except when Democrats held the chamber for 18 months in 2001 and 2002 — and remains ranking Republican on the Defense Appropriations Subcommittee. Stevens also is ranking Republican on the Homeland Security and Governmental Affairs Disaster Recovery Subcommittee.
Senate Republican Conference rules required him to relinquish those posts.
An Appropriations Committee aide said committee Republicans would recommend Thad Cochran of Mississippi take Stevens’ place on the Defense subcommittee. Cochran is ranking Republican on the full committee.
Earlier, outside watchdogs groups that had been critical of the Senate Ethics Committee’s failure to investigate allegations against Stevens hailed the Justice Department’s action and called on GOP leaders to strip him of his committee leadership posts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said, “We think the indictment is overdue. We are very happy to see the Justice Department is taking action when the Senate wouldn’t.”
Added Steve Ellis, vice president of Taxpayers for Common Sense: “Senator Stevens is entitled to due process and remains innocent until proven otherwise. But considering his role as a powerful appropriator and ranking member of Commerce, Science and Transportation Committee, he should be immediately removed from those capacities.”
Among the favors Stevens was accused of doing for Veco in the indictment was helping the company win a federal contract to provide logistical support services such as transportation, clothing and housing to National Science Foundation outposts in the Arctic. Ellis said the 5-year contract was worth $170 million and Veco “had little experience in the area.”
The indictment also accuses Stevens of aiding Veco by securing funds for a new natural gas pipeline from Alaska’s North Slope region to Chicago in the fiscal 2005 military construction spending bill (PL 108-324).
Veco’s lobbyist on the pipeline issue, former Alaska Teamster official Gerald L. Hood, became local district director for Rep. Don Young , R-Alaska, on Nov. 1, 2006, the day after he stopped lobbying for the company, according to federal databases.
Stevens faced little electoral risk when he announced in 2006 that he would seek a seventh full term this year. But the ongoing scandal has eroded his support to the point where his likely Democratic opponent, Anchorage Mayor Mark Begich, leads in some polls.
Democratic Senatorial Campaign Committee Chairman Charles E. Schumer , D-N.Y., declined to comment on how Stevens’ indictment might influence what was already considered a pickup opportunity for Democrats.
“I feel bad for him and his family. That’s all I want to say today,” Schumer said.
Stevens also faces opposition in the Aug. 26 GOP primary from David Cuddy, a wealthy real estate developer who lost to Stevens in the 1996 primary after spending more than $1 million in personal funds, and five lesser-known candidates including Republican minister Gerald L. Heikes.
Sen. Stevens Indicted in Alaska Corruption Probe
Stevens’ campaign spokesman Aaron Saunders said the campaign is moving “full steam ahead. Our office has been flooded today with calls and e-mails from supporters urging the senator to press on.”
But in the aftermath of the indictment, CQ Politics is changing its rating of the Alaska Senate race from Leans Republican to Leans Democratic.
Monday, July 28, 2008
EPA tells staff don't talk to investigators, press
Original Link: http://www.examiner.com/a-1509285~EPA_tells_staff_don_t_talk_to_investigators__press.html
By DINA CAPPIELLO, AP
The Environmental Protection Agency is telling its pollution enforcement officials not to talk with congressional investigators, reporters and even the agency's own inspector general, according to an internal e-mail provided to The Associated Press.
The June 16 message instructs 11 managers in the EPA's Office of Enforcement and Compliance Assurance, the branch of the agency charged with making sure environmental laws are followed, to remind their staff members to keep quiet.
"If you are contacted directly by the IG's office or GAO requesting information of any kind ... please do not respond to questions or make any statements," reads the e-mail sent by Robbi Farrell, the division's chief of staff. Instead, staff members should forward inquiries to a designated EPA representative, the memo says.
Public Employees for Environmental Responsibility obtained the e-mail and provided it to the AP. The group is a nonprofit alliance of local, state and federal professionals. Its Web site carries the slogan, "Protecting Employees Who Protect Our Environment."
"The clear intention behind this move is to chill the cubicles by suppressing any uncontrolled information," said Ruch.
The EPA, in an official statement, said Monday the e-mail was aimed at making agency responses to the press, EPA's inspector general and Congress' General Accountability Office more efficient, consistent and coordinated. The EPA also said officials could still talk to investigators as long as they checked in with the appropriate representatives. About 900 lawyers and technical support staff are employed by the division at EPA headquarters in Washington.
"There is nothing ... that restricts conversation between enforcement staff, the press, GAO and the IG, and the procedure is consistent with existing agency policies," the statement said. "No one has to get permission or approval to speak with the IG or GAO."
The e-mail, according to EPA, was a response to a May 2007 audit by the Inspector General's Office that found the agency had not responded to earlier IG reports on problems with water enforcement and other matters. However, the audit did not make any specific recommendations about communications between staff and the inspector general's office.
In a statement issued Monday, the Office of Inspector General said it did not approve of the language in the e-mail and was engaged in discussions with enforcement officials to ensure the electronic dispatch would not hinder its access to information.
"All EPA officials and employees are required to cooperate with OIG," the statement said. "This cooperation includes providing the OIG full and unrestricted access to EPA documents, records, and personnel."
A spokesman for the congressional GAO said Monday that that agency will deal with access issues as they arise.
The EPA is currently under pressure from several congressional committees to disclose documents relating to its position on global warming and its denial of a petition by California to control greenhouse gases from motor vehicles. Just last week, EPA Administrator Stephen Johnson denied a request to appear before two Senate committees to discuss whether the agency's decisions comply with its staff's technical and legal recommendations.
Sen. Barbara Boxer, the California Democrat who heads the Senate environment committee, said Monday the administrator had turned "the EPA into a secretive, dangerous ally of polluters, instead of a leader in the effort to protect the health and safety of the American people."
In a letter sent to EPA's inspector general on Friday, Senate Judiciary Chairman Patrick Leahy, D-Vt., asked for a probe into President Bush's claims of executive privilege over the California documents and other "White House interference" into decisions by the agency.
On Monday, Leahy said, "I hope this e-mail is not akin to the wide range of tactics this administration has used to thwart accountability."
By DINA CAPPIELLO, AP
The Environmental Protection Agency is telling its pollution enforcement officials not to talk with congressional investigators, reporters and even the agency's own inspector general, according to an internal e-mail provided to The Associated Press.
The June 16 message instructs 11 managers in the EPA's Office of Enforcement and Compliance Assurance, the branch of the agency charged with making sure environmental laws are followed, to remind their staff members to keep quiet.
"If you are contacted directly by the IG's office or GAO requesting information of any kind ... please do not respond to questions or make any statements," reads the e-mail sent by Robbi Farrell, the division's chief of staff. Instead, staff members should forward inquiries to a designated EPA representative, the memo says.
Public Employees for Environmental Responsibility obtained the e-mail and provided it to the AP. The group is a nonprofit alliance of local, state and federal professionals. Its Web site carries the slogan, "Protecting Employees Who Protect Our Environment."
"The clear intention behind this move is to chill the cubicles by suppressing any uncontrolled information," said Ruch.
The EPA, in an official statement, said Monday the e-mail was aimed at making agency responses to the press, EPA's inspector general and Congress' General Accountability Office more efficient, consistent and coordinated. The EPA also said officials could still talk to investigators as long as they checked in with the appropriate representatives. About 900 lawyers and technical support staff are employed by the division at EPA headquarters in Washington.
"There is nothing ... that restricts conversation between enforcement staff, the press, GAO and the IG, and the procedure is consistent with existing agency policies," the statement said. "No one has to get permission or approval to speak with the IG or GAO."
The e-mail, according to EPA, was a response to a May 2007 audit by the Inspector General's Office that found the agency had not responded to earlier IG reports on problems with water enforcement and other matters. However, the audit did not make any specific recommendations about communications between staff and the inspector general's office.
In a statement issued Monday, the Office of Inspector General said it did not approve of the language in the e-mail and was engaged in discussions with enforcement officials to ensure the electronic dispatch would not hinder its access to information.
"All EPA officials and employees are required to cooperate with OIG," the statement said. "This cooperation includes providing the OIG full and unrestricted access to EPA documents, records, and personnel."
A spokesman for the congressional GAO said Monday that that agency will deal with access issues as they arise.
The EPA is currently under pressure from several congressional committees to disclose documents relating to its position on global warming and its denial of a petition by California to control greenhouse gases from motor vehicles. Just last week, EPA Administrator Stephen Johnson denied a request to appear before two Senate committees to discuss whether the agency's decisions comply with its staff's technical and legal recommendations.
Sen. Barbara Boxer, the California Democrat who heads the Senate environment committee, said Monday the administrator had turned "the EPA into a secretive, dangerous ally of polluters, instead of a leader in the effort to protect the health and safety of the American people."
In a letter sent to EPA's inspector general on Friday, Senate Judiciary Chairman Patrick Leahy, D-Vt., asked for a probe into President Bush's claims of executive privilege over the California documents and other "White House interference" into decisions by the agency.
On Monday, Leahy said, "I hope this e-mail is not akin to the wide range of tactics this administration has used to thwart accountability."
US deficit zooming to half trillion as Bush leaves
Original Link: http://www.examiner.com/a-1509741~US_deficit_zooming_to_half_trillion_as_Bush_leaves.html
By ANDREW TAYLOR, AP
The government's budget deficit will surge past a half-trillion dollars next year, according to gloomy new estimates, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda.
The deficit will hit $482 billion in the 2009 budget year that will be inherited by Democrat Barack Obama or Republican John McCain, the White House estimated Monday. That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy fails to recover as the administration predicts.
The result: the biggest deficit ever in terms of dollars, though several were higher in the 1980s and early 1990s as a percentage of the overall economy.
Neither campaign is backing off campaign promises - McCain to cut taxes and Obama to expand health and education programs - in light of the bleaker new figures.
But Democrats controlling Congress suggest that may have to change once President Bush's successor takes office.
"Whoever becomes the next president will have a very, very sobering first week in office," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
McCain promises to renew the full roster of Bush tax cuts enacted in 2001 and 2003 and add many more for businesses and upper income people who pay the alternative minimum tax. The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year. Eliminating the alternative minimum at the same time would cost almost as much.
Obama would repeal tax cuts on wealthier taxpayers and investors but would leave most of the Bush tax cuts in place while seeking additional cuts for senior citizens, the middle class and the working poor. And he also wants lots of new spending for health care, education and many other federal programs.
"There's a total disconnect between today's report and what we're hearing on the campaign trail," said Robert Bixby of the Concord Coalition budget watchdog group.
The deficit situation confronting the next president is reminiscent of that which Bill Clinton faced in 1993. Under Wall Street pressure, Clinton abandoned promises of tax cuts and pushed a tax-heavy deficit reduction plan through a Democratic Congress.
The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. But the numbers could go even higher if the economy performs worse than the White House predicts.
The budget office predicts the economy will grow at a rate of 1.6 percent this year and will rebound to a 2.2 percent growth rate next year. That's a half point higher than predicted by the widely cited "blue chip" consensus of business economists. The administration also sees inflation averaging 3.8 percent this year, but easing to 2.3 percent next year - better than the 3 percent seen by the blue chip panel.
"The nation's economy has continued to expand and remains fundamentally resilient," said the budget office report.
A $482 billion deficit would easily surpass the record deficit of $413 billion set in 2004. The White House in February had forecast that next year's deficit would be $407 billion.
The deficit numbers for 2008 and 2009 represent about 3 percent of the size of the economy, which is the measure seen as most relevant by economists. By that measure, the 2008 and 2009 deficits would be smaller than the deficits of the 1980s and early 1990s that led Congress and earlier administrations to cobble together politically painful deficit-reduction packages.
Still, the new figures are so eye-popping in dollar terms that they may restrain the appetite of the next president to add to the deficit with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled, with Congress also feeling pressure to curb spending growth.
The administration actually underestimates the deficit since it leaves out about $80 billion in war costs. In a break from tradition - and in violation of new mandates from Congress - the White House did not include its full estimate of war costs.
On a slightly brighter note, the deficit for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.
McCain used the new 2009 estimates to slam both the Bush White House for its "profligate spending" and Democratic rival Obama, who has declined to endorse the goal of McCain - and congressional Democrats - to balance the budget.
"I have an unmatched record in fighting wasteful earmarks and unnecessary spending in the U.S. Senate, and I have the determination and experience to do the same as president," McCain said in a statement. McCain again called for a full plate of multi-trillion dollar tax cuts, though campaign adviser Douglas Holtz-Eakin said some modifications could be made to McCain's economic plan to try to reach balance.
Obama's campaign used the new numbers to assail McCain for embracing Bush's tax cuts. As for Obama's plans, campaign adviser Furman said the candidate would cut wasteful spending, close corporate loopholes and roll back the Bush tax cuts on upper brackets while still promising to make "health care affordable and putting a middle class tax cut in the pocket of 95 percent of workers and their families."
Monday's figures capped a remarkable deterioration in the United States' budgetary health under Bush's time in office.
He inherited a budget seen as producing endless huge surpluses after four straight years in positive territory. That stretch of surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest expansion in U.S. history.
In his first year in office, helped by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts.
However, faulty estimates, a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.
There had been progress since then, with a $161.5 billion deficit for 2007 representing the lowest amount of red ink since an imbalance of $159 billion in 2002.
By ANDREW TAYLOR, AP
The government's budget deficit will surge past a half-trillion dollars next year, according to gloomy new estimates, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda.
The deficit will hit $482 billion in the 2009 budget year that will be inherited by Democrat Barack Obama or Republican John McCain, the White House estimated Monday. That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy fails to recover as the administration predicts.
The result: the biggest deficit ever in terms of dollars, though several were higher in the 1980s and early 1990s as a percentage of the overall economy.
Neither campaign is backing off campaign promises - McCain to cut taxes and Obama to expand health and education programs - in light of the bleaker new figures.
But Democrats controlling Congress suggest that may have to change once President Bush's successor takes office.
"Whoever becomes the next president will have a very, very sobering first week in office," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
McCain promises to renew the full roster of Bush tax cuts enacted in 2001 and 2003 and add many more for businesses and upper income people who pay the alternative minimum tax. The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year. Eliminating the alternative minimum at the same time would cost almost as much.
Obama would repeal tax cuts on wealthier taxpayers and investors but would leave most of the Bush tax cuts in place while seeking additional cuts for senior citizens, the middle class and the working poor. And he also wants lots of new spending for health care, education and many other federal programs.
"There's a total disconnect between today's report and what we're hearing on the campaign trail," said Robert Bixby of the Concord Coalition budget watchdog group.
The deficit situation confronting the next president is reminiscent of that which Bill Clinton faced in 1993. Under Wall Street pressure, Clinton abandoned promises of tax cuts and pushed a tax-heavy deficit reduction plan through a Democratic Congress.
The administration said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling into a deep recession. But the numbers could go even higher if the economy performs worse than the White House predicts.
The budget office predicts the economy will grow at a rate of 1.6 percent this year and will rebound to a 2.2 percent growth rate next year. That's a half point higher than predicted by the widely cited "blue chip" consensus of business economists. The administration also sees inflation averaging 3.8 percent this year, but easing to 2.3 percent next year - better than the 3 percent seen by the blue chip panel.
"The nation's economy has continued to expand and remains fundamentally resilient," said the budget office report.
A $482 billion deficit would easily surpass the record deficit of $413 billion set in 2004. The White House in February had forecast that next year's deficit would be $407 billion.
The deficit numbers for 2008 and 2009 represent about 3 percent of the size of the economy, which is the measure seen as most relevant by economists. By that measure, the 2008 and 2009 deficits would be smaller than the deficits of the 1980s and early 1990s that led Congress and earlier administrations to cobble together politically painful deficit-reduction packages.
Still, the new figures are so eye-popping in dollar terms that they may restrain the appetite of the next president to add to the deficit with expensive spending programs or new tax cuts. In fact, pressure may build to allow some tax cuts enacted in 2001 and 2003 to expire as scheduled, with Congress also feeling pressure to curb spending growth.
The administration actually underestimates the deficit since it leaves out about $80 billion in war costs. In a break from tradition - and in violation of new mandates from Congress - the White House did not include its full estimate of war costs.
On a slightly brighter note, the deficit for the 2008 budget year ending Sept. 30 will actually drop from an earlier projection of $410 billion to $389 billion, the report said.
McCain used the new 2009 estimates to slam both the Bush White House for its "profligate spending" and Democratic rival Obama, who has declined to endorse the goal of McCain - and congressional Democrats - to balance the budget.
"I have an unmatched record in fighting wasteful earmarks and unnecessary spending in the U.S. Senate, and I have the determination and experience to do the same as president," McCain said in a statement. McCain again called for a full plate of multi-trillion dollar tax cuts, though campaign adviser Douglas Holtz-Eakin said some modifications could be made to McCain's economic plan to try to reach balance.
Obama's campaign used the new numbers to assail McCain for embracing Bush's tax cuts. As for Obama's plans, campaign adviser Furman said the candidate would cut wasteful spending, close corporate loopholes and roll back the Bush tax cuts on upper brackets while still promising to make "health care affordable and putting a middle class tax cut in the pocket of 95 percent of workers and their families."
Monday's figures capped a remarkable deterioration in the United States' budgetary health under Bush's time in office.
He inherited a budget seen as producing endless huge surpluses after four straight years in positive territory. That stretch of surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest expansion in U.S. history.
In his first year in office, helped by projections of continuing surpluses, Bush drove through a 10-year, $1.35 trillion package of tax cuts.
However, faulty estimates, a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.
There had been progress since then, with a $161.5 billion deficit for 2007 representing the lowest amount of red ink since an imbalance of $159 billion in 2002.
White House sees record budget gap in 2009
Original Link: http://www.reuters.com/article/GCA-inflation/idUSN2847371220080728
By Jeremy Pelofsky and David Lawder
The Bush administration on Monday projected the U.S. budget deficit will soar to a record of nearly half a trillion dollars in fiscal 2009 as a housing-led economic slowdown cuts into government revenues.
The economic and fiscal deterioration will complicate efforts to bring the budget to balance and pose challenges for whoever takes over the White House in January, either Republican Sen. John McCain or Democratic Sen. Barack Obama.
"I believe whoever becomes the next president will have a very, very sobering first week in office," predicted Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat.
Reacting to the White House's new prediction that the budget deficit will hit $482 billion in the fiscal year that starts October 1, Conrad said that number easily could rise by an additional $80 billion when the full costs of the Iraq war are tallied next year.
The economy has been hobbled by the housing market collapse and soaring food and energy prices. In February, the Democratic-controlled Congress and President George W. Bush approved a $168 billion, two-year stimulus plan to ward off recession.
With the slowing economy and the cost of the economic stimulus plan, the White House said it thinks the deficit will hit a record $482 billion in fiscal 2009. However, it cut its forecast for the current fiscal year to $389 billion.
White House budget chief Jim Nussle cited the government stimulus checks and slower economic growth as primary reasons for larger deficits in 2008 and 2009. "The determination was made that getting the economy back on track was a higher priority than immediate deficit reduction," he told reporters.
In February, the administration forecast the deficit would hit $410 billion this year and drop to $407 billion in 2009.
The new report said the budget deficit would fall to $178 billion in 2010, and surpluses would emerge in 2012.
However, the deficit projections did not include the full amount of funding for the wars in Iraq and Afghanistan or costly tax law changes, and acknowledged it would be a "challenge" to reach surpluses in 2012.
Nussle also poured cold water on the idea of a second economic stimulus package floated by some Democrats and instead pressed lawmakers to approve energy legislation to boost the economy, including permitting offshore drilling.
"The proposals we hear about sound a lot more like election stimulus or political stimulus than it does economic stimulus," Nussle told reporters.
The White House also lowered its forecast of 2008 economic growth to 1.6 percent from 2.7 percent -- bringing it into line with private-sector projections. It said growth should pick up to 2.2 percent next year, showing more optimism than many private economists.
It forecast inflation at 3.8 percent this year, but said it should ease to 2.3 percent in 2009.
"We don't think this is a rosy scenario in any way. We think it's a realistic scenario," said Edward Lazear, chairman of the White House Council of Economic Advisers.
"Our hope is that we will be through most of the issues that are plaguing those markets right now and that we won't see continued increases in energy prices," he said, adding that falling or stabilizing energy prices will boost the economy.
BUDGETARY STRAINS
In addition to the efforts to give a lift to the economy, the budget has been sapped by the prolonged wars in Iraq and Afghanistan that came as Bush's tax cuts went into effect. Economists have also warned about an expected rise in health care spending as members of the baby boom generation retire.
Democrats have blasted the Republican administration for squandering budget surpluses and nearly doubling the national debt, from $5.6 trillion when Bush took office in 2001 to over $9.5 trillion now.
"President Bush has mortgaged our future with record deficit spending on the wrong priorities," Democratic House Speaker Nancy Pelosi said. "An unnecessary and extraordinarily costly war in Iraq has turned record surpluses into record deficits."
Nussle defended Bush's fiscal record during an eight-year term that started with record budget surpluses but will end with a record deficit. He said Bush inherited a recession that hurt revenues and needed to quickly ramp up spending on homeland security and the military after attacks on New York and Washington in 2001.
As the White House predicted more red ink, the Treasury Department said it expects to sell $171 billion in debt securities over the July-September quarter, marking its second-highest quarterly borrowing after the January-March quarter's record $244 billion.
It estimated net borrowing through Treasury bonds, notes and bills for fiscal 2008 will total $555 billion, compared with $134 billion a year earlier.
By Jeremy Pelofsky and David Lawder
The Bush administration on Monday projected the U.S. budget deficit will soar to a record of nearly half a trillion dollars in fiscal 2009 as a housing-led economic slowdown cuts into government revenues.
The economic and fiscal deterioration will complicate efforts to bring the budget to balance and pose challenges for whoever takes over the White House in January, either Republican Sen. John McCain or Democratic Sen. Barack Obama.
"I believe whoever becomes the next president will have a very, very sobering first week in office," predicted Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat.
Reacting to the White House's new prediction that the budget deficit will hit $482 billion in the fiscal year that starts October 1, Conrad said that number easily could rise by an additional $80 billion when the full costs of the Iraq war are tallied next year.
The economy has been hobbled by the housing market collapse and soaring food and energy prices. In February, the Democratic-controlled Congress and President George W. Bush approved a $168 billion, two-year stimulus plan to ward off recession.
With the slowing economy and the cost of the economic stimulus plan, the White House said it thinks the deficit will hit a record $482 billion in fiscal 2009. However, it cut its forecast for the current fiscal year to $389 billion.
White House budget chief Jim Nussle cited the government stimulus checks and slower economic growth as primary reasons for larger deficits in 2008 and 2009. "The determination was made that getting the economy back on track was a higher priority than immediate deficit reduction," he told reporters.
In February, the administration forecast the deficit would hit $410 billion this year and drop to $407 billion in 2009.
The new report said the budget deficit would fall to $178 billion in 2010, and surpluses would emerge in 2012.
However, the deficit projections did not include the full amount of funding for the wars in Iraq and Afghanistan or costly tax law changes, and acknowledged it would be a "challenge" to reach surpluses in 2012.
Nussle also poured cold water on the idea of a second economic stimulus package floated by some Democrats and instead pressed lawmakers to approve energy legislation to boost the economy, including permitting offshore drilling.
"The proposals we hear about sound a lot more like election stimulus or political stimulus than it does economic stimulus," Nussle told reporters.
The White House also lowered its forecast of 2008 economic growth to 1.6 percent from 2.7 percent -- bringing it into line with private-sector projections. It said growth should pick up to 2.2 percent next year, showing more optimism than many private economists.
It forecast inflation at 3.8 percent this year, but said it should ease to 2.3 percent in 2009.
"We don't think this is a rosy scenario in any way. We think it's a realistic scenario," said Edward Lazear, chairman of the White House Council of Economic Advisers.
"Our hope is that we will be through most of the issues that are plaguing those markets right now and that we won't see continued increases in energy prices," he said, adding that falling or stabilizing energy prices will boost the economy.
BUDGETARY STRAINS
In addition to the efforts to give a lift to the economy, the budget has been sapped by the prolonged wars in Iraq and Afghanistan that came as Bush's tax cuts went into effect. Economists have also warned about an expected rise in health care spending as members of the baby boom generation retire.
Democrats have blasted the Republican administration for squandering budget surpluses and nearly doubling the national debt, from $5.6 trillion when Bush took office in 2001 to over $9.5 trillion now.
"President Bush has mortgaged our future with record deficit spending on the wrong priorities," Democratic House Speaker Nancy Pelosi said. "An unnecessary and extraordinarily costly war in Iraq has turned record surpluses into record deficits."
Nussle defended Bush's fiscal record during an eight-year term that started with record budget surpluses but will end with a record deficit. He said Bush inherited a recession that hurt revenues and needed to quickly ramp up spending on homeland security and the military after attacks on New York and Washington in 2001.
As the White House predicted more red ink, the Treasury Department said it expects to sell $171 billion in debt securities over the July-September quarter, marking its second-highest quarterly borrowing after the January-March quarter's record $244 billion.
It estimated net borrowing through Treasury bonds, notes and bills for fiscal 2008 will total $555 billion, compared with $134 billion a year earlier.
Is Our $3 Trillion War Fueling a Recession?
Original Link: http://washingtonindependent.com/view/is-our-3-trillion
By Mary Kane
As the war approaches its sixth year, and the fight over its future heats up during an election cycle, the economic costs are attracting more attention. For a war of this length, it's not unusual to begin tallying up total spending and pursuing whether money is being wasted.
But these questions have already been transformed into a contentious battle of words, escalated recently by a new book from the Nobel laureate economist Joseph Stiglitz, who charges that war costs have been hidden and may total a staggering $3 trillion. At the same time, the economy already appears on shaky ground, either heading into a recession or already there, prompting arguments over the extent of the war's contribution to the current slowdown.
"We're a rich country and we can afford to spend a lot of money in a lot of areas," said Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, a non-partisan research institute in Washington. "But at the same time we're talking about a large amount of money in budgetary terms being spent on the war. The costs at first didn't appear to be foremost in people's minds. But the further it gets from 9-11, the more people start having questions."
During a talk in London recently, Stiglitz upped the ante, citing war costs as as a hidden cause of the subprime housing meltdown now dragging down the economy. He charged that the Federal Reserve flooded the economy with cheap credit to cover up for the government's extensive spending on the war.
No one previously has linked war costs with the subprime mess, which has usually been attributed to lax lending standards, problems with rating agencies, Wall Street greed and other causes. Even among economists who oppose the war, Stiglitz' theory draws few supporters.
"Stiglitz is a very good economist," said Dean Baker, co-director of the Center for Economic and Policy Research. "But this one doesn't make any sense."
Interest rates plummetted in 2001, predating the war, Baker noted. They fell even lower in 2003, after the war started. "Furthermore, the housing bubble began in the mid-1990s as a spinoff from the tech bubble. It had already grown dangerously large by 2002...basically, nothing fits the Stiglitz story," he said in an email.
Like Stiglitz, however, some liberal advocacy groups including MoveOn.org, along with former Democratic presidential candidate John Edwards, are trying to tie war costs more closely to the economy's problems. While it's worthwhile to ask whether military dollars could be better spent elsewhere to stimulate the economy, it's overly simplistic to link the war's costs - Kosiak puts the current tab at $500 billion and counting - directly to a possible recession. That lets lenders and investors escape responsibility for their roles in the collapse of the $8 trillion housing bubble, which vastly overshadows the war in its economic impact, Baker said. "People say, 'Ok, we have economic problems because of the war,' and they misunderstand this," Baker said in an interview.
Expect the misunderstandings to continue. Determining the war's effects on the economy is like wading through the country's political divide, with many on the far left blaming a possible recession entirely on the war and those who support it contending it's a question that shouldn't even be asked. Between Stiglitz' book, the war's coming anniversary, the presidential election and the worsening credit crunch, arguments over the the war's cost to the the economy are likely to ratchet up even more.
"Economists are slightly arrogant when they think they can measure everything," said Irwin Stelzer, a conservative economist who supports the war. "This is really an existential battle over American values."
The battle began even before the war, when the Bush administration declined to discuss potential costs in the buildup to the invasion. In 2002, White House economic advisor Lawrence Lindsey pegged the costs as high as $100 billion to $200 billion; he was dismissed later that year. Former Defense Secretary Donald Rumsfeld in 2003 predicted total costs of just $50 billion.
The back and forth seemed to matter little. Early in the war, budget figures weren't the focus of public attention. Critics of the war risked being attacked as unpatriotic, and wading into the numbers question wasn't exactly encouraged. But in a mostly low-profile way, economists continued the debate. Yale's William Nordhaus came up with a high-end estimate of nearly $2 trillion in 2002 dollars. Scott Wallsten, a resident scholar at the American Enterprise Institute, and Steven Davis, a University of Chicago economist, also attempted to crunch the numbers. A small but growing number of economists found it perfectly appropriate to probe the economic impact of waging war. After all, a cost-benefit analysis routinely accompanies most public policy proposals.
That view isn't universally shared. Other economists, in particular those who support the war, say it's not useful to try to put a price on fighting terrorism and keeping the country safe.
"I don't want my six kids being killed by a terrorist as I put them in bed for the night," said Diana Furchtgott-Roth, a senior fellow at the Hudson Institute, a conservative think tank. "We're spending this money to make sure we're not attacked again. It is true that defense spending is talking a lot from our economy, but it's also ensuring our safety. Terrorists are out to get us and we need to do something about it. We can't just say we need to spend money on health insurance, education and national parks and close our eyes to it."
That kind of talk has both discouraged and obscured what some economists see as the bigger question: What role war spending plays in an economy.
In response to Stiglitz' $3 trillion estimate, White House spokesman Tony Fratto put it this way: "People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure."
That kind of talk has both discouraged and obscured what some economists see as the bigger question: What role war spending plays in an economy.
In general, war spending early on in a conflict stimulates the economy; jobs are created, defense contractors thrive. World War II usually is credited for pulling the U.S. out of the Great Depression. But if a war continues for many years, war costs can weaken an economy, and the dilemma becomes whether all the military spending is pulling resources away from other places that would benefit from the money.
During Vietnam, former President Lyndon B. Johnson expanded spending on domestic social programs like Medicare while fighting the war. A long period of stagflation in the 1970s followed, which usually was attributed to Johnson's guns and butter strategy. In hindsight, many economists now say inflationary problems stemmed from the oil shock of the early 1970s and from the inability at the time to manage monetary policy, not from the war and domestic spending, which helped contribute to low unemployment. As a sign of how contentious war spending debates can become, however, not all economists agree, and more than three decades after the war's end they're still arguing about it.
Most, however, say that war spending is especially key during a recession, to act as a stimulant. If the war ended tomorrow, "it would only add to the recessionary pressures we have in place," said Paul Davidson, an economist at the The New School in New York who has studied what happens to economies once the fighting ends.
That's not to say economists are pushing for the war to continue to avoid a recession. But they are pointing to the stimulant effect of war spending to prove that substantial public investment can benefit the economy, in a far more efficient way than military spending. "It's a tragedy we require a war to do these things," said Robert Pollin, co-director of the Political Economy Research Institute at UMass-Amherst.
In 2007, the U.S. could have generated one million new jobs, provided health coverage for all the uninsured, and invested in energy conservation and education by using all the money spent on the Iraq War and by rescinding the Bush tax cuts, Pollin concluded. With the economy in trouble and local and state governments facing smaller budgets and cutbacks in services, views like his are gaining in favor.
"I come from Minneapolis and I have relatives who cross that bridge that broke down last summer every day," said Greg Speeter, executive director of the National Priorities Project, a Northampton, Mass., nonprofit that analyzes federal data and features a real-time Iraq War costs counter on its website. "We should be spending money on things that save lives and don't give us a rotten reputation around the world."
On the other side, Stelzer, the economist, looks at it this way: "I put a very, very high premium on Iraq being eliminated as a source and a haven for terrorists."
While the debate continues, the housing slump is deepening, and oil prices keep hitting record highs. Unlike during Vietnam, the U.S. entered this war with an economy that wasn't in such great shape to begin with. If consumers begin to feel more pain from a recession soon, the fight over war costs and the economy will only find its way further into the long-running debate over Iraq.
By Mary Kane
As the war approaches its sixth year, and the fight over its future heats up during an election cycle, the economic costs are attracting more attention. For a war of this length, it's not unusual to begin tallying up total spending and pursuing whether money is being wasted.
But these questions have already been transformed into a contentious battle of words, escalated recently by a new book from the Nobel laureate economist Joseph Stiglitz, who charges that war costs have been hidden and may total a staggering $3 trillion. At the same time, the economy already appears on shaky ground, either heading into a recession or already there, prompting arguments over the extent of the war's contribution to the current slowdown.
"We're a rich country and we can afford to spend a lot of money in a lot of areas," said Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, a non-partisan research institute in Washington. "But at the same time we're talking about a large amount of money in budgetary terms being spent on the war. The costs at first didn't appear to be foremost in people's minds. But the further it gets from 9-11, the more people start having questions."
During a talk in London recently, Stiglitz upped the ante, citing war costs as as a hidden cause of the subprime housing meltdown now dragging down the economy. He charged that the Federal Reserve flooded the economy with cheap credit to cover up for the government's extensive spending on the war.
No one previously has linked war costs with the subprime mess, which has usually been attributed to lax lending standards, problems with rating agencies, Wall Street greed and other causes. Even among economists who oppose the war, Stiglitz' theory draws few supporters.
"Stiglitz is a very good economist," said Dean Baker, co-director of the Center for Economic and Policy Research. "But this one doesn't make any sense."
Interest rates plummetted in 2001, predating the war, Baker noted. They fell even lower in 2003, after the war started. "Furthermore, the housing bubble began in the mid-1990s as a spinoff from the tech bubble. It had already grown dangerously large by 2002...basically, nothing fits the Stiglitz story," he said in an email.
Like Stiglitz, however, some liberal advocacy groups including MoveOn.org, along with former Democratic presidential candidate John Edwards, are trying to tie war costs more closely to the economy's problems. While it's worthwhile to ask whether military dollars could be better spent elsewhere to stimulate the economy, it's overly simplistic to link the war's costs - Kosiak puts the current tab at $500 billion and counting - directly to a possible recession. That lets lenders and investors escape responsibility for their roles in the collapse of the $8 trillion housing bubble, which vastly overshadows the war in its economic impact, Baker said. "People say, 'Ok, we have economic problems because of the war,' and they misunderstand this," Baker said in an interview.
Expect the misunderstandings to continue. Determining the war's effects on the economy is like wading through the country's political divide, with many on the far left blaming a possible recession entirely on the war and those who support it contending it's a question that shouldn't even be asked. Between Stiglitz' book, the war's coming anniversary, the presidential election and the worsening credit crunch, arguments over the the war's cost to the the economy are likely to ratchet up even more.
"Economists are slightly arrogant when they think they can measure everything," said Irwin Stelzer, a conservative economist who supports the war. "This is really an existential battle over American values."
The battle began even before the war, when the Bush administration declined to discuss potential costs in the buildup to the invasion. In 2002, White House economic advisor Lawrence Lindsey pegged the costs as high as $100 billion to $200 billion; he was dismissed later that year. Former Defense Secretary Donald Rumsfeld in 2003 predicted total costs of just $50 billion.
The back and forth seemed to matter little. Early in the war, budget figures weren't the focus of public attention. Critics of the war risked being attacked as unpatriotic, and wading into the numbers question wasn't exactly encouraged. But in a mostly low-profile way, economists continued the debate. Yale's William Nordhaus came up with a high-end estimate of nearly $2 trillion in 2002 dollars. Scott Wallsten, a resident scholar at the American Enterprise Institute, and Steven Davis, a University of Chicago economist, also attempted to crunch the numbers. A small but growing number of economists found it perfectly appropriate to probe the economic impact of waging war. After all, a cost-benefit analysis routinely accompanies most public policy proposals.
That view isn't universally shared. Other economists, in particular those who support the war, say it's not useful to try to put a price on fighting terrorism and keeping the country safe.
"I don't want my six kids being killed by a terrorist as I put them in bed for the night," said Diana Furchtgott-Roth, a senior fellow at the Hudson Institute, a conservative think tank. "We're spending this money to make sure we're not attacked again. It is true that defense spending is talking a lot from our economy, but it's also ensuring our safety. Terrorists are out to get us and we need to do something about it. We can't just say we need to spend money on health insurance, education and national parks and close our eyes to it."
That kind of talk has both discouraged and obscured what some economists see as the bigger question: What role war spending plays in an economy.
In response to Stiglitz' $3 trillion estimate, White House spokesman Tony Fratto put it this way: "People like Joe Stiglitz lack the courage to consider the cost of doing nothing and the cost of failure."
That kind of talk has both discouraged and obscured what some economists see as the bigger question: What role war spending plays in an economy.
In general, war spending early on in a conflict stimulates the economy; jobs are created, defense contractors thrive. World War II usually is credited for pulling the U.S. out of the Great Depression. But if a war continues for many years, war costs can weaken an economy, and the dilemma becomes whether all the military spending is pulling resources away from other places that would benefit from the money.
During Vietnam, former President Lyndon B. Johnson expanded spending on domestic social programs like Medicare while fighting the war. A long period of stagflation in the 1970s followed, which usually was attributed to Johnson's guns and butter strategy. In hindsight, many economists now say inflationary problems stemmed from the oil shock of the early 1970s and from the inability at the time to manage monetary policy, not from the war and domestic spending, which helped contribute to low unemployment. As a sign of how contentious war spending debates can become, however, not all economists agree, and more than three decades after the war's end they're still arguing about it.
Most, however, say that war spending is especially key during a recession, to act as a stimulant. If the war ended tomorrow, "it would only add to the recessionary pressures we have in place," said Paul Davidson, an economist at the The New School in New York who has studied what happens to economies once the fighting ends.
That's not to say economists are pushing for the war to continue to avoid a recession. But they are pointing to the stimulant effect of war spending to prove that substantial public investment can benefit the economy, in a far more efficient way than military spending. "It's a tragedy we require a war to do these things," said Robert Pollin, co-director of the Political Economy Research Institute at UMass-Amherst.
In 2007, the U.S. could have generated one million new jobs, provided health coverage for all the uninsured, and invested in energy conservation and education by using all the money spent on the Iraq War and by rescinding the Bush tax cuts, Pollin concluded. With the economy in trouble and local and state governments facing smaller budgets and cutbacks in services, views like his are gaining in favor.
"I come from Minneapolis and I have relatives who cross that bridge that broke down last summer every day," said Greg Speeter, executive director of the National Priorities Project, a Northampton, Mass., nonprofit that analyzes federal data and features a real-time Iraq War costs counter on its website. "We should be spending money on things that save lives and don't give us a rotten reputation around the world."
On the other side, Stelzer, the economist, looks at it this way: "I put a very, very high premium on Iraq being eliminated as a source and a haven for terrorists."
While the debate continues, the housing slump is deepening, and oil prices keep hitting record highs. Unlike during Vietnam, the U.S. entered this war with an economy that wasn't in such great shape to begin with. If consumers begin to feel more pain from a recession soon, the fight over war costs and the economy will only find its way further into the long-running debate over Iraq.
A $3 trillion debacle
Original Link: http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2008/03/15/a_3_trillion_debacle/
NEARLY FIVE years since the start of the Iraq war, the Bush administration is still funding much of it through emergency appropriations, and only partially through the regular defense budget. This is one of several ways in which the administration has managed to hide the true cost of the war from the American people. Until Congress insists on a full and open accounting, the nation won't know how much of a drag it is on the economy.
more stories like thisEconomists once believed that wars stimulated an economy. But when much of the funding goes to Iraqi or Filipino contractors working in Iraq, the benefit to the US economy diminishes, especially in light of what the funding could achieve if used for home-front needs.
In the run-up to the war, President Bush's top economic adviser, Larry Lindsey, said it might cost as much as $200 billion. Defense Secretary Donald Rumsfeld said the actual amount would be just $50 billion to $60 billion, calling Lindsey's projection "baloney," much as Rumsfeld had belittled General Eric Shinseki's estimate that it would take several hundred thousand US troops to fight the war successfully.
Both Lindsey and Rumsfeld were far from the mark. Nobel laureate economist Joseph Stiglitz and Harvard University's Linda Bilmes have just published "The Three Trillion Dollar War: The True Cost of the Iraq Conflict," and they consider that figure a conservative estimate.
In their estimate, Stiglitz and Bilmes include the long-term costs for care of the wounded and the financing costs of paying for the war with borrowed money. Calculating the cost for veterans' care was not easy. While the government discloses figures on those wounded by hostile action, Stiglitz and Bilmes had to use Freedom of Information Act lawsuits to learn the total injured in Iraq.
The two authors make much of what the country could be getting if it were not paying for the war. For a fraction of the war's cost, Stiglitz has noted, Congress could put the Social Security system "on solid financial footing." The entire federal budget for autism research, about $108 million, is spent every four hours in Iraq. With just $1 trillion, the country could provide 43 million students with scholarships for four years at public universities.
Wasted dollars are just one of the costs of the war, and not the most important. Nearly 4,000 US troops and at least tens of thousands of Iraqis have lost their lives. The conflict has left Iraq divided along its religious and ethnic fault lines, strengthened the theocracy in Iran, and made Uncle Sam a pariah in much of the Islamic world. This toll in human life and geopolitical consequences is all too obvious. Congress should make sure the country understands the economic cost of the war, too
NEARLY FIVE years since the start of the Iraq war, the Bush administration is still funding much of it through emergency appropriations, and only partially through the regular defense budget. This is one of several ways in which the administration has managed to hide the true cost of the war from the American people. Until Congress insists on a full and open accounting, the nation won't know how much of a drag it is on the economy.
more stories like thisEconomists once believed that wars stimulated an economy. But when much of the funding goes to Iraqi or Filipino contractors working in Iraq, the benefit to the US economy diminishes, especially in light of what the funding could achieve if used for home-front needs.
In the run-up to the war, President Bush's top economic adviser, Larry Lindsey, said it might cost as much as $200 billion. Defense Secretary Donald Rumsfeld said the actual amount would be just $50 billion to $60 billion, calling Lindsey's projection "baloney," much as Rumsfeld had belittled General Eric Shinseki's estimate that it would take several hundred thousand US troops to fight the war successfully.
Both Lindsey and Rumsfeld were far from the mark. Nobel laureate economist Joseph Stiglitz and Harvard University's Linda Bilmes have just published "The Three Trillion Dollar War: The True Cost of the Iraq Conflict," and they consider that figure a conservative estimate.
In their estimate, Stiglitz and Bilmes include the long-term costs for care of the wounded and the financing costs of paying for the war with borrowed money. Calculating the cost for veterans' care was not easy. While the government discloses figures on those wounded by hostile action, Stiglitz and Bilmes had to use Freedom of Information Act lawsuits to learn the total injured in Iraq.
The two authors make much of what the country could be getting if it were not paying for the war. For a fraction of the war's cost, Stiglitz has noted, Congress could put the Social Security system "on solid financial footing." The entire federal budget for autism research, about $108 million, is spent every four hours in Iraq. With just $1 trillion, the country could provide 43 million students with scholarships for four years at public universities.
Wasted dollars are just one of the costs of the war, and not the most important. Nearly 4,000 US troops and at least tens of thousands of Iraqis have lost their lives. The conflict has left Iraq divided along its religious and ethnic fault lines, strengthened the theocracy in Iran, and made Uncle Sam a pariah in much of the Islamic world. This toll in human life and geopolitical consequences is all too obvious. Congress should make sure the country understands the economic cost of the war, too
Subscribe to:
Posts (Atom)